Earnings Release • Nov 9, 2012
Earnings Release
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Suresnes, November 9, 2012: The Recylex Group (NYSE Euronext Paris: FR0000120388 - RX) has today reported its sales for the nine-month period to September 30, 2012 and for the third quarter of 2012. They came respectively to €343.4 million, down 8% on the level posted in the same period of 2011, and to €111 million in the third quarter, down 10% on the third quarter of 2011.
The breakdown in consolidated sales in the nine months to September 30, 2012 by business segment was as follows:
| (€ million) | Nine months to September 30, 2012 |
Nine months to September 30, 2011 |
% Variation | |
|---|---|---|---|---|
| Lead | 255.3 | 273.3 | -7% | |
| Zinc | 61.8 | 66.0 | -6% | |
| Special metals | 16.6 | 22.7 | -27% | |
| Plastics | 9.8 | 9.7 | 1% | |
| Total | 343.4 | 371.7 | -8% |
Commenting on these figures, Yves Roche, Chairman and Chief Executive Officer of the Recylex Group, said:
"During the first nine months of the year, Recylex again demonstrated the resilience of its sales in an environment that remained mixed across its business segments. In spite of a firmer trend during the third quarter, metals prices were again at a lower level than they were in the same period of 2011. Even so, the sustained improvement in our industrial performance in Lead and Zinc, as well as market share gains in Plastics, helped to offset this fall to some extent. The cost of scrap battery purchases remained at a very high level throughout the period. Accordingly, we are focusing more than ever on improving our industrial performance and on our business development."
In spite of a firmer trend during the third quarter, the first nine months of 2012 brought a significant decline in lead and zinc prices, taking account of the high comparison base.
Average prices in the nine months to 30 September were as follows:
| (€ per tonne) | Nine months to September 30, 2012 |
Nine months to September 30, 2011 |
% Variation |
|---|---|---|---|
| Lead | 1,571 | 1,806 | -13% |
| Zinc | 1,518 | 1,630 | -7% |
Consolidated sales in the first nine months of 2012 came to €343.4 million, down 8% on the same period of 2011.
Consolidated sales in the third quarter of 2012 totaled €111 million, down 10% compared with the same period of 2011, owing chiefly to the fall in metals prices.
During the first nine months of 2012, Lead sales accounted for 74% of consolidated sales. They recorded a modest decline of 7% given the steep decline in lead prices during the period (down 13%). The sharp increase in sales volumes owing to the productivity gains unlocked particulalry at the main smelter in Nordenham partly helped to offset the hefty fall in lead prices.
During the third quarter of 2012, consolidated sales totaled €80.4 million. This 12% decline was primarily attributable to the fall in lead prices compared with the same period of 2011 and the processing of concentrates with lower silver content at the Nordenham smelter. Excluding the silver effect, sales recorded a contraction of 5% in the third quarter of 2012 compared with the same period of 2011.
Zinc sales accounted for 18% of the consolidated total during the first nine months of 2012 and contracted by 6% compared with the same period of 2011. While lower zinc prices were the main factor to blame for this performance, trends varied from one business to another.
On the one hand, the zinc scrap recycling business experienced a sharp slowdown in demand for zinc oxides during the period. On the other hand, Waelz oxide production was boosted by an increase in sales volumes and higher selling prices. The Group benefited from the improvement made to production processes at German subsidiary Harz-Metall GmbH, which increases the zinc recovered from recycled materials.
For the same reasons, consolidated third-quarter 2012 sales posted a small decline of 3% compared with the same period of 2011 to reach €21.4 million.
Special metals sales contributed 5% of the consolidated total in the nine months to September 30, 2012. They recorded a steep decline of 27%. This contraction was driven in particular by a sharp drop in demand for arsenic and for germanium.
During the third quarter of 2012, consolidated sales recorded a decline of 13% compared with the same period of 2011, slipping to €6.1 million. While the third quarter of 2012 brought a slight improvement in the trend by comparison with the first two quarters of 2012, it is still premature to confirm a recovery in demand given the low level of production in the semiconductor industry.
Plastics sales contributed 3% of consolidated sales during the first nine months of 2012. It recorded a slight increase of 1% over the period.
The Group was boosted by a rise in polypropylene prices owing to the increase in oil prices and, more significantly, by growth in sales volumes in France owing to the sales and marketing initiatives since the beginning of the year.
Consolidated third-quarter 2012 sales posted an increase of 21% compared with the same period of 2011 for the same reasons.
In a ruling handed down on September 19, 2012, the Douai Court of Appeal upheld the ruling by the Béthune Regional Court on February 27, 2007 dismissing the request submitted by the liquidators of Metaleurop Nord SAS for it to order Recylex SA to repay the liabilities of Metaleurop Nord SAS up to €50 million, on the grounds that Recylex SA was not the de facto manager of its subsidiary. Metaleurop Nord's liquidators have until November 28, 2012 to decide whether they are going to appeal to the Cour de Cassation [France's supreme court].
On September 12, 2012, the Cour de Cassation dismissed the appeal submitted by Recylex, together with the appeals lodged by six former protected employees, against the rulings handed down by the Douai Appeal Court on December 17, 2010.
On October 16, 2012, as part of the further claims for damages lodged in 2010 by 192 former managerial and non-managerial employees of Metaleurop Nord SAS, the Industry and Management sections of the Lens labour tribunal postponed their ruling until January 15, 2013. Provisions for the full amount claimed in connection with these proceedings (around €9.9 million) have been set aside in the Company's financial statements.
*A document summarising the developments in legal proceedings against Recylex SA can be found on the Recylex Group's website (www.recylex.fr – News – Legal proceedings schedule).
2012 sales: February 14, 2013
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With operations in France, Germany and Belgium, Recylex is a European Group specialised in lead and plastic recycling (mainly from automobile and industrial batteries), in zinc particles recycling (from electric steel plants dust), in zinc scrap recycling and in special metals production notably for the electronics industry. The Recylex Group has close to 650 employees and generated consolidated sales of €458 million in 2011.
More information on the Recylex Group can be found at: www.recylex.fr
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Press/Investor contact:
Gabriel ZEITLIN + 33 (0)1 58 47 29 89 [email protected]
Disclaimer: this press release contains regulated quarterly financial information for the Recylex Group as defined in Article L. 451-1-2-IV of the French Monetary and Financial Code and Article 221-1 of the AMF General Regulations. This press release may contain forward-looking statements that do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its website (www.recylex.fr). Further information about Recylex is available from its website (www.recylex.fr).
| (€ per tonne) | st 1 quarter 2012 |
nd 2 quarter 2012 |
rd 3 quarter 2012 |
st 1 quarter 2011 |
nd 2 quarter 2011 |
rd 3 quarter 2011 |
|---|---|---|---|---|---|---|
| Lead | 1,597 | 1,536 | 1,581 | 1,905 | 1,779 | 1,742 |
| Zinc | 1,544 | 1,502 | 1,509 | 1,750 | 1,568 | 1,575 |
| (€ million) | st 1 quarter 2012 |
nd 2 quarter 2012 |
rd 3 quarter 2012 |
st 1 quarter 2011 |
nd 2 quarter 2011 |
rd 3 quarter 2011 |
|---|---|---|---|---|---|---|
| Lead | 90.1 | 84.7 | 80.4 | 89.1 | 93.1 | 91.1 |
| Zinc | 21.6 | 18.8 | 21.4 | 23.7 | 20.2 | 22.2 |
| Special metals | 5.0 | 5.5 | 6.1 | 7.2 | 8.4 | 7.0 |
| Plastics | 3.3 | 3.4 | 3.1 | 3.4 | 3.7 | 2.6 |
| Total | 120.0 | 112.4 | 111.0 | 123.4 | 125.4 | 122.9 |
| Nine months to September 30, |
Nine months to September 30, |
|
|---|---|---|
| (€ million) | 2012 | 2011 |
| Lead activities | 59.3 | 70.3 |
| Services to Group companies | 1 | 1 |
| Total sales | 60.3 | 71.3 |
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