Quarterly Report • Jun 12, 2018
Quarterly Report
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This document has been translated from the original version in Greek. In the event that differences exist between this translation and the original Greek text , the document in the Greek language will prevail over this document.
The present Interim Condensed Financial Statements are approved by the Board of Directors of "Frigoglass S.A.I.C." on the 7th June 2018.
The present Interim Condensed Financial Statements of the period are available on the company's website www.frigoglass.com
| A) | Financial Review | 3 |
|---|---|---|
| B) | Interim Condensed Financial Statements for the period 1 January to 31 March 2018 |
7 |
| C) | Alternative Performance Measures ("APMs") | 60 |
Pages
It is asserted that for the preparation of the Financial Statements the following are responsible:
The Chairman of the Board of Directors The Managing Director
Haralambos David Nikolaos Mamoulis
The Head of Finance
Vasileios Stergiou
Frigoglass made a solid start to the year, with sales growing 19.8% to €105.7 million for the three months ended 31 March 2018. This increase primarily reflects higher year‐on‐ year commercial refrigeration (ICM) sales in Europe and solid demand for glass and plastic crates in Nigeria.
Commercial refrigeration net sales revenue increased by 15.8% for the three months ended 31 March 2018, driven by ICM investments from Coca‐Cola bottlers in Europe and Africa. In Eastern Europe, net sales revenue increased 27.1% year‐on‐year. This solid performance was supported by incremental ICM placements from the Coca‐Cola bottler in Romania, Bulgaria and Hungary mainly as a result of its promotional plans and innovations. Sales growth momentum continued in Western Europe, driven by orders from the Coca‐Cola bottler in Italy and Greece, more than offsetting soft demand in Germany, Belgium and France. This is the ninth consecutive quarter of positive growth in Western Europe, with net sales revenue growing 9.4% year‐on‐year.
In Africa and Middle East, net sales revenue increased by 90.8% year‐on‐year. This strong performance was driven by increased customer ICM investments in Nigeria that mainly reflect orders being transferred from the previous quarter, as well as, increased demand in North Africa. Net sales revenue in Asia declined by 44.3% year‐on‐year, mainly led by lower demand in India following the phasing of orders by a key customer and intense competition.
Glass business reported a strong performance for the three months ended 31 March 2018, with net sales revenue increasing by 35.1% year‐on‐year due to solid glass container volume growth and increased demand for our complementary plastic crates offering, as well as, targeted pricing initiatives. This was tempered by lower net sales revenue in metal crown business and the impact from the devaluation of Nigeria's Naira. In local currency terms, net sales revenue in our Nigerian operations increased approximately by 56% year‐ on‐year. Sustained demand in our core Nigerian market resulted in a 25.3% year‐on‐year net sales revenue growth in glass bottles' operations. This performance primarily reflects the currently upbeat beer market environment triggered by new product launches and the startup of a new brewery in the second quarter of the year. Significantly higher year‐ on‐year demand from key soft drinks and brewery customers for our plastic crates business was well‐supported by glass related volume growth. Metal crowns' net sales revenue declined by 30.2% for the three months ended 31 March 2018 mainly due to phasing of orders, compared to last year.
Cost of goods sold increased by 16.5% to €86.6 million for the three months ended 31 March 2018, as a result of higher year‐on‐year volume growth. Cost of goods sold was assisted by ICM plants productivity related savings and the positive impact from the devaluation of Nigeria's Naira. Overall, cost of goods sold as a percentage of the Group's net sales revenue improved to 82.0% for the three months ended 31 March 2018, from 84.3% for the three months ended 31 March 2017, reflecting the favorable geographical mix and better fixed cost absorption in ICM business due to higher sales.
Administrative expenses increased by 6.8% to €5.5 million for the three months ended 31 March 2018, mainly due to increased third‐party fees and IT expenses. The ratio of administrative expenses to net sales revenue improved to 5.2% in the three months ended 31 March 2018, from 5.9% in the three months ended 31 March 2017.
Selling, distribution and marketing expenses decreased by 8.3% to €5.1 million for the three months ended 31 March 2018, aided by lower employee related expenses and warranty expenses. As a percentage of net sales revenue, selling, distribution and marketing expenses improved to 4.8% in the three months ended 31 March 2018, from 6.3% in the three months ended 31 March 2017.
Research and development expenses decreased by 14.2% to €0.9 million for the three months ended 31 March 2018, reflecting lower depreciation charges and miscellaneous expenses. As a percentage of net sales revenue, research and development expenses improved to 0.8% in the three months ended 31 March 2018, from 1.2% in the three months ended 31 March 2017.
Other income decreased by €1.5 million to €0.7 million for the three months ended 31 March 2018, primarily reflecting last year's insurance compensation.
Finance costs declined by 30.7% year‐on‐year to €4.9 million for the three months ended 31 March 2018, driven by a lower gross debt level and cost of debt following the recently completed capital restructuring process.
In the three months ended 31 March 2018, the Group incurred restructuring costs of €0.3 million related to the termination of one production shift in Indonesia. Frigoglass incurred restructuring costs of €3.7 million in the three months ended 31 March 2017 related to the Group's capital restructuring process.
Income tax expense increased to €3.7 million for the three months ended 31 March 2018, following increased pre‐tax profits in Nigeria and Romania.
Frigoglass reported net losses of €1.4 million from discontinued operations for the three months ended 31 March 2018, compared to losses of €1.8 million for the three months ended 31 March 2017, due to lower depreciation charges following the fixed assets impairment. Net losses reflect continued weak demand and the consequent cost under‐ absorption in the Dubai‐based glass plant. Including discontinued operations, Frigoglass reported net losses of €3.7 million for the three months ended 31 March 2018, compared to losses of €12.2 million for the three months ended 31 March 2017, reflecting the improved operating profit and the capital restructuring related expenses that impacted the prior year.
Net cash from operating activities amounted to €0.3 million for the three months ended 31 March 2018, compared to net cash used in operating activities of €0.4 million for the three months ended 31 March 2017. This improvement reflects the higher operating profit and lower restructuring costs in the three months ended 31 March 2018. It also reflects an increase in other liabilities of €3.2 million for the three months ended 31 March 2018, compared to an increase of €2.6 million in the three months ended 31 March 2017.
Net cash used in investing activities amounted to €3.8 million in the three months ended 31 March 2018, compared to €1.8 million in the three months ended 31 March 2017, reflecting increased capital expenditure in ICM and Glass operations.
Net cash from financing activities amounted to €5.8 million in the three months ended 31 March 2018, compared to net cash used in financing activities of €3.3 million in the three months ended 31 March 2017. This increase reflects net proceeds of bank loans of €8.1 million in the three months ended 31 March 2018, compared to net repayments of €2.2 million the prior year.
Net trade working capital from continuing operations as of 31 March 2018 amounted to €124.9 million, compared to €95.9 million as of 31 March 2017. This increase reflects inventory build‐up following sustained demand in the next couple of months, higher trade receivables due to the top‐line growth in 1Q18 and lower trade payables following the normalisation of payments due to the completion of the capital restructuring.
| Continuing Operations (in €m) | 31 March 2018 | 31 March 2017 |
|---|---|---|
| Trade debtors | 97.7 | 83.7 |
| Inventories | 92.3 | 87.4 |
| Trade creditors | 65.0 | 75.2 |
| Net Trade Working Capital | 124.9 | 95.9 |
Capital expenditures amounted to €3.8 million in the three months ended 31 March 2018, of which €3.3 million related to the purchase of property, plant and equipment and €0.5 million related to the purchase of intangible assets, compared to €1.8 million in the three months ended 31 March 2017, of which €1.4 million related to the purchase of property, plant and equipment and €0.4 million related to the purchase of intangible assets.
In an improving macroeconomic environment with key customers stepping up coolers' investments to improve in‐market execution, we anticipate sales growth in 2018. The commercial refrigeration business will benefit from the sustained growth momentum in key markets. In Europe, strong demand for ICOOL from Coca‐Cola bottlers and Service business (Frigoserve) roll‐out will drive sales growth in the region. Through the commercialization of Flex and Plus ranges we aim to enhance our customer base and improve our cost competiveness in the region. Following a strong start to the year, we focus on maintaining growth in Africa through the recently launched Hybrid cooler and the cost competitive new Super range with HCF‐free refrigerants. In Asia, our priority is to enhance our presence in the highly competitive market and improve our cost competitiveness through our recently launched SL range. In the Glass business, supported by favorable beverage market trends, we anticipate growth momentum to continue in our glass and complementary plastic crates businesses in Nigeria.
As part of the drive towards the return to profitable growth and operational excellence, we remain focused on realizing material cost savings, implement continuous Lean manufacturing to free‐up capacity and further improve productivity, as well as, product range simplification investments to drive efficiencies. We are constantly reviewing our manufacturing footprint to allow high production flexibility and cost competitiveness. In the Glass business, volume leverage and price initiatives will also support profit margins this year.
Full‐year capital expenditure estimate of approximately €29 million remains unchanged.
| 1. | Income Statement | 9 | |
|---|---|---|---|
| 2. | Statement of Comprehensive Income | 10 | |
| 3. | Balance Sheet | 11 | |
| 4. | Statement of Changes in Equity | 12 | |
| 5. | Cash Flow Statement | 14 | |
| 6. | Notes to the interim condensed financial statements | ||
| (1) | General Information | 15 | |
| (2) | Basis of Preparation | 16 | |
| (3) | Principal accounting policies | 18 | |
| (4) | Critical accounting estimates and judgments | 23 | |
| (5) | Segment Information | 25 | |
| (6) | Property, Plant & equipment | 28 | |
| (7) | Intangible assets | 31 | |
| (8) | Inventories | 34 | |
| (9) | Trade receivables | 34 | |
| (10) | Other receivables | 35 | |
| (11) | Cash & cash equivalents | 36 | |
| (12) | Other payables | 36 | |
| (13) | Non‐current & current borrowings | 37 | |
| (14) | Investments in subsidiaries | 44 | |
| (15) | Share capital | 45 | |
| (16) | Other reserves | 46 | |
| (17) | Financial expenses | 48 | |
| (18) | Income tax | 49 | |
| (19) | Commitments | 51 | |
| (20) | Related party transactions | 51 | |
| (21) | Earnings per share | 52 | |
| (22) | Contingent liabilities | 53 | |
| (23) | Seasonality of operations | 54 | |
| (24) | Post balance sheet events | 54 |
| (25) | Average number of personnel | 54 |
|---|---|---|
| (26) | Other operating income & Other gains / |
|
| (27) | Reconciliation of EBITDA | 56 |
| (28) | Restructuring gains / |
57 |
| (29) | Discontinued operations | 58 |
| FRIGOGLASS | |||
|---|---|---|---|
| Consolidated | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | Three months ended | Three months ended | ||||
| 31.03.2018 31.03.2017 | 31.03.2018 31.03.2017 | |||||
| Continuing operations: | ||||||
| Net sales revenue | 5 & 23 | 105.664 | 88.214 | 12.073 | 5.321 | |
| Cost of goods sold | (86.607) | (74.355) | (11.320) | (5.130) | ||
| Gross profit | 19.057 | 13.859 | 753 | 191 | ||
| Administrative expenses | (5.514) | (5.164) | (4.054) | (3.908) | ||
| Selling, distribution & marketing expenses | (5.083) | (5.544) | (1.141) | (1.118) | ||
| Research & development expenses | (886) | (1.033) | (662) | (570) | ||
| Other operating income | 26 | 653 | 2.139 | 4.473 | 5.038 | |
| Other gains |
26 | 28 | (219) | 8 | 11 | |
| Operating Profit / |
8.255 | 4.038 | (623) | (356) | ||
| Finance |
17 | (4.933) | (7.122) | (628) | (2.174) | |
| Profit / |
3.322 | (3.084) | (1.251) | (2.530) | ||
| Restructuring gains/ |
28 | (275) | (3.748) | (3.748) | ||
| Profit / |
3.047 | (6.832) | (1.251) | (6.278) | ||
| Income tax expense | 18 | (3.708) | (2.463) | (144) | (185) | |
| Profit / |
||||||
| continuing operations | (661) | (9.295) | (1.395) | (6.463) | ||
| Discontinued operations: | ||||||
| Profit / |
||||||
| discontinued operations attributable to the shareholders | 29 | |||||
| of the company | (1.425) | (1.782) | ||||
| Profit / |
(2.086) | (11.077) | (1.395) | (6.463) | ||
| Attributable to: | ||||||
| Non-controlling interests | 1.585 | 1.148 | ||||
| Shareholders | (3.671) | (12.225) | (1.395) | (6.463) | ||
| Depreciation | 4.874 | 5.484 | 884 | 863 | ||
| EBITDA | 27 | 13.129 | 9.522 | 261 | 507 | |
| Amounts in € | ||||||
| Basic Earnings / |
||||||
| - Continuing operations | 21 | (0,0063) | (0,6192) | (0,0039) | (0, 3832) | |
| - Discontinued operations | 21 | (0,0040) | (0, 1057) | |||
| Total | (0,0103) | (0,7249) | (0,0039) | (0, 3832) | ||
| Diluted Earnings / |
||||||
| - Continuing operations | 21 | (0,0063) | (0,6192) | (0,0039) | (0, 3832) | |
| - Discontinued operations | 21 | (0,0040) | (0, 1057) | |||
| Total | (0, 0103) | (0, 7249) | (0,0039) | (0, 3832) |
| Consolidated | ||
|---|---|---|
| Three months ended | ||
| 31.03.2018 | 31.03.2017 | |
| Profit / |
||
| (Income Statement) | (2.086) | (11.077) |
| Other Compehensive Income: | ||
| Items that will be reclassified to Profit & Loss: | ||
| Currency translation differences | (2.928) | (1.336) |
| Items that will be reclassified to Profit & Loss | (2.928) | (1.336) |
| Items that will not be reclassified to Profit & Loss: | ||
| Items that will not be reclassified to Profit & Loss | ||
| Other comprehensive income / |
(2.928) | (1.336) |
| Total comprehensive income / |
(5.014) | (12.413) |
| Attributable to: | ||
| - Non-controlling interests | 526 | 522 |
| - Shareholders | (5.540) | (12.935) |
| (5.014) | (12.413) | |
| Total comprehensive income / |
||
| net of tax attributable to the shareholders | ||
| of the company from: | ||
| - Continuing operations | (4.405) | (11.715) |
| - Discontinued operations | (1.135) | (1.220) |
| (5.540) | (12.935) | |
| Parent Company | ||
| Three months ended 31.03.2018 |
31.03.2017 | |
| Profit / |
||
| (Income statement) | (1.395) | (6.463) |
| Other comprehensive income / |
||
| Total comprehensive income / |
(1.395) | (6.463) |
| Consolidated | Parent Company | |||||||
|---|---|---|---|---|---|---|---|---|
| Note | 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | ||||
| Assets: | ||||||||
| Property, plant & equipment | 6 | 104.450 | 106.755 | 4.230 | 4.415 | |||
| Intangible assets | 7 | 10.264 | 10.776 | 6.928 | 7.289 | |||
| Investments in subsidiaries | 14 | 60.005 | 60.005 | |||||
| Deferred tax assets | 1.403 | 1.432 | ||||||
| Other long term assets | 291 | 329 | 86 | 115 | ||||
| Total non current assets | 116.408 | 119.292 | 71.249 | 71.824 | ||||
| Inventories | 8 | 92.309 | 89.075 | 2.415 | 1.747 | |||
| Trade receivables | 9 | 97.686 | 84.824 | 7.613 | 4.223 | |||
| Other receivables | 10 | 26.316 | 25.475 | 1.234 | 2.299 | |||
| Current tax assets | 1.399 | 1.463 | ||||||
| Intergroup receivables | 20 | 16.291 | 14.312 | |||||
| Cash & cash equivalents | 11 | 53.918 | 53.130 | 1.706 | 998 | |||
| 271.628 | 253.967 | 29.259 | 23.579 | |||||
| Assets held for sale | 29 | 18.092 | 17.575 | |||||
| Total current assets | 289.720 | 271.542 | 29.259 | 23.579 | ||||
| Total assets | 406.128 | 390.834 | 100.508 | 95.403 | ||||
| Liabilities: | ||||||||
| Non current borrowings | 13 | 237.893 | 233.414 | |||||
| Deferred tax liabilities | 13.248 | 13.533 | ||||||
| Retirement benefit obligations | 14.496 | 14.510 | 5.132 | 5.056 | ||||
| Intergroup bond loans | 13 | 34.106 | 33.702 | |||||
| Provisions | 4.278 | 3.910 | ||||||
| Deferred income from government grants | 17 | 18 | 17 | 17 | ||||
| Total non current liabilities | 269.932 | 265.385 | 39.255 | 38.775 | ||||
| Trade payables | 65.050 | 60.985 | 3.844 | 3.745 | ||||
| Other payables | 12 | 48.400 | 42.485 | 6.920 | 4.750 | |||
| Current tax liabilities | 14.433 | 11.830 | ||||||
| Intergroup payables | 20 | 27.646 | 23.895 | |||||
| Current borrowings | 13 | 45.820 | 42.441 | |||||
| 173.703 | 157.741 | 38.410 | 32.390 | |||||
| Liabilities associated with assets held for sale | 29 | 9.772 | 9.973 | |||||
| Total current liabilities | 183.475 | 167.714 | 38.410 | 32.390 | ||||
| Total liabilities | 453.407 | 433.099 | 77.665 | 71.165 | ||||
| Equity: | ||||||||
| Share capital | 15 | 127.958 | 127.958 | 127.958 | 127.958 | |||
| Share premium | 15 | (33.801) | (33.801) | (33.801) | (33.801) | |||
| Other reserves | 16 | (14.101) | (12.232) | 25.463 | 25.463 | |||
| Retained earnings | (168.744) | (165.073) | (96.777) | (95.382) | ||||
| Equity attributable to equity holders of the | ||||||||
| parent | (88.688) | (83.148) | 22.843 | 24.238 | ||||
| Non-controlling interests | 41.409 | 40.883 | ||||||
| Total Equity | (47.279) | (42.265) | 22.843 | 24.238 | ||||
| Total liabilities & equity | 406.128 | 390.834 | 100.508 | 95.403 | ||||
| Consolidated | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Share Capital | Share premium |
Other reserves |
Retained earnings |
Total | Non- Controlling Interests |
Total Equity |
|||
| Balance at 01.01.2017 | 15.178 | 2.755 | (13.773) | (172.113) | (167.953) | 39.100 | (128.853) | ||
| Profit / |
٠ | $\blacksquare$ | $\sim$ | (12.225) | (12.225) | 1.148 | (11.077) | ||
| Other Comprehensive income / net of tax |
٠ | $\overline{\phantom{a}}$ | (372) | (338) | (710) | (626) | (1.336) | ||
| Total comprehensive income / net of taxes |
۰ | ×. | (372) | (12.563) | (12.935) | 522 | (12.413) | ||
| Total Transactions with owners in their capacity as owners |
۰ | $\blacksquare$ | $\overline{\phantom{a}}$ | ۰ | ٠ | $\blacksquare$ | |||
| Balance at 31.03.2017 | 15.178 | 2.755 | (14.145) | (184.676) | (180.888) | 39.622 | (141.266) |
| Balance at 01.04.2017 | 15.178 | 2.755 | (14.145) | (184.676) | (180.888) | 39.622 | (141.266) |
|---|---|---|---|---|---|---|---|
| Profit / |
۰ | $\overline{\phantom{a}}$ | ۰ | 19.873 | 19.873 | 6.141 | 26.014 |
| Other Comprehensive income / |
٠ | $\,$ | (7.170) | (270) | (7.440) | (4.267) | (11.707) |
| Total comprehensive income / |
|||||||
| net of taxes | ۰ | ٠ | (7.170) | 19,603 | 12.433 | 1.874 | 14.307 |
| Dividends to non controlling interest | ۰ | ۰ | $\sim$ | $\sim$ | (613) | (613) | |
| Share capital increase (Note 15) | 121.887 | (34.321) | ٠ | $\,$ | 87.566 | $\overline{a}$ | 87.566 |
| Cost fot the Share capital increase (Note 15) | $\sim$ | (2.235) | $\overline{\phantom{a}}$ | $\overline{\phantom{a}}$ | (2.235) | $\blacksquare$ | (2.235) |
| Share option reserve | $\overline{\phantom{a}}$ | (24) | ۰ | (24) | $\sim$ | (24) | |
| Transfers between reserves | (9.107) | $\sim$ | 9.107 | ۰ | $\sim$ | ||
| Total Transactions with owners in their | |||||||
| capacity as owners | 112,780 | (36.556) | 9.083 | ٠ | 85.307 | (613) | 84.694 |
| Balance at 31.12.2017 | 127.958 | (33.801) | (12.232) | (165.073) | (83.148) | 40.883 | (42.265) |
| Balance at 01.01.2018 | 127.958 | (33.801) | (12.232) | (165.073) | (83.148) | 40.883 | (42.265) |
|---|---|---|---|---|---|---|---|
| Profit / |
٠. | ÷ | (3.671) | (3.671) | 1.585 | (2.086) | |
| Other Comprehensive income / after tax |
۰ | $\sim$ | (1.869) | (1.869) | (1.059) | (2.928) | |
| Total comprehensive income / net of taxes |
۰ | ۰ | (1.869) | (3.671) | (5.540) | 526 | (5.014) |
| Total Transactions with owners in their capacity as owners |
٠ | ٠ | u, | $\overline{\phantom{a}}$ | |||
| Balance at 31.03.2018 | 127.958 | (33.801) | (14.101) | (168.744) | (88.688) | 41.409 | (47.279) |
| Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| Share Capital |
Share premium |
Other reserves |
Retained earnings |
Total Equity |
|||
| Balance at 01.01.2017 | 15.178 | 2.755 | 16.380 | (47.567) | (13.254) | ||
| Profit / |
۰. | - | ÷. | (6.463) | (6.463) | ||
| Other comprehensive income / |
۰ | $\overline{\phantom{a}}$ | |||||
| Total comprehensive income / |
|||||||
| net of taxes | ۰ | ٠ | (6.463) | (6.463) | |||
| Total Transactions with owners in their | |||||||
| capacity as owners | $\overline{\phantom{a}}$ | $\blacksquare$ | $\frac{1}{2}$ | $\blacksquare$ | |||
| Balance at 31,03,2017 | 15.178 | 2.755 | 16.380 | (54.030) | (19.717) |
| Balance at 01.04.2017 | 15.178 | 2.755 | 16.380 | (54.030) | (19.717) |
|---|---|---|---|---|---|
| Profit / |
(41.404) | (41.404) | |||
| Other Comprehensive income / |
۰ | ٠ | 52 | 52 | |
| Total comprehensive income / |
|||||
| net of taxes | $\overline{\phantom{a}}$ | $\frac{1}{2}$ | (41.352) | (41.352) | |
| Share capital increase (Note 15) | 121.887 | (34.321) | $\overline{\phantom{a}}$ | 87.566 | |
| Cost fot the Share capital increase (Note 15) | (2.235) | ۰ | (2.235) | ||
| Share option reserve | ÷ | (24) | ٠ | (24) | |
| Transfers between reserves | (9.107) | $\overline{\phantom{a}}$ | 9.107 | $\blacksquare$ | |
| Total Transactions with owners in their | |||||
| capacity as owners | 112.780 | (36.556) | 9.083 | ٠ | 85.307 |
| Balance at 31.12.2017 | 127.958 | (33.801) | 25.463 | (95.382) | 24.238 |
| Balance at 01.01.2018 | 127.958 | (33.801) | 25.463 | (95.382) | 24.238 |
|---|---|---|---|---|---|
| Profit / |
$\overline{\phantom{a}}$ | $\bar{a}$ | $\sim$ | (1.395) | (1.395) |
| Other comprehensive income / |
۰ | $\overline{\phantom{a}}$ | $\,$ | ||
| Total comprehensive income / |
|||||
| net of taxes | ۰ | (1.395) | (1.395) | ||
| Total Transactions with owners in their | |||||
| capacity as owners | - | ||||
| Balance at 31.03.2018 | 127.958 | (33.801) | 25.463 | (96.777) | 22.843 |
| Consolidated | Parent Company | |||||
|---|---|---|---|---|---|---|
| Note | Three months ended | Three months ended | ||||
| 31.03.2018 31.03.2017 | 31.03.2018 31.03.2017 | |||||
| Profit / |
(2.086) | (11.077) | (1.395) | (6.463) | ||
| Adjustments for: | ||||||
| Income tax expense | 18 | 3.708 | 2.463 | 144 | 185 | |
| Depreciation | 4.876 | 6.819 | 884 | 863 | ||
| Provisions | 568 | 415 | 126 | 48 | ||
| Finance costs, net | 17 | 5.176 | 7.493 | 628 | 2.174 | |
| Loss/ |
26 | (28) | ||||
| Changes in working capital: | ||||||
| Decrease / (increase) of inventories | (3.013) | (10.756) | (668) | 71 | ||
| Decrease / (increase) of trade receivables | (14.512) | (11.276) | (3.390) | (854) | ||
| Decrease / (increase) of intergroup receivables | 20 | (1.979) | (2.445) | |||
| Decrease / (increase) of other receivables | (1.156) | (4.571) | 922 | (506) | ||
| Decrease / (increase) of other long term receivables | 31 | 29 | 30 | 35 | ||
| (Decrease) / increase of trade payables | 4.594 | 17.874 | 99 | 4.646 | ||
| (Decrease) / increase of intergroup payables | 20 | 3.749 | 1.670 | |||
| (Decrease) / increase of other liabilities | 3.217 | 2.645 | 1.999 | (773) | ||
| Less: | ||||||
| Income taxes paid | (1.042) | (411) | ||||
| (a) Cash flows from operating activities | 333 | (353) | 1.149 | (1.349) | ||
| Cash flows from investing activities | ||||||
| Purchase of property, plant and equipment | 6 | (3.288) | (1.383) | (11) | (15) | |
| Purchase of intangible assets | $\overline{7}$ | (434) | ||||
| (528) | (430) | (329) | ||||
| Proceeds from disposal of property, plant & equipment and | ||||||
| intangible assets | 49 | |||||
| (b) Net cash flows(used in) /from investing activities | (3.767) | (1.813) | (340) | (449) | ||
| Net cash generated from operating and investing | ||||||
| $activities (a) + (b)$ | (3.434) | (2.166) | 809 | (1.798) | ||
| Cash flows from financing activities | ||||||
| Proceeds from borrowings | 25.150 | 15.520 | ||||
| (17.076) | (17.741) | |||||
| Proceeds from intergroup loans | 5.000 | 2.250 | ||||
| (5.100) | (400) | |||||
| Interest paid | (2.231) | (1.101) | (159) | |||
| (3.322) | (1) | |||||
| (c) Net cash flows from/(used in) financing activities | 5.843 | (101) | 1.691 | |||
| Net increase / (decrease) in cash and cash equivalents | ||||||
| $(a) + (b) + (c)$ | 2.409 | (5.488) | 708 | (107) | ||
| Cash & cash equivalents at the beginning of the year | ||||||
| - Continuing operations | 53.130 | 56.655 | ||||
| Cash & cash equivalents at the beginning of the year | ||||||
| - Discontinued operations | 29 | 415 | 871 | |||
| Cash and cash equivalents at the beginning | ||||||
| of the year | 53.545 | 57.526 | 998 | 1.145 | ||
| Effects of changes in exchange rate | (869) | (554) | ||||
| Cash and cash equivalents from discontinued operations | 29 | (1.167) | ||||
| Cash and cash equivalents at the end of the year | 11 | 53.918 | 51.484 | 1.706 | 1.038 |
These interim condensed financial statements include the financial statements of the Parent Company FRIGOGLASS S.A.I.C. (the "Company") and the Consolidated Financial Statements of the Company and its subsidiaries (the "Group"). The names of the subsidiaries are presented in Note 14 of the financial statements.
FRIGOGLASS S.A.I.C. and its subsidiaries are engaged in the manufacturing, trade and distribution of commercial refrigeration units and packaging materials for the beverage industry. The Group has manufacturing plants and sales offices in Europe, Asia and Africa.
The Company is a limited liability company incorporated and based in Kifissia, Attica.
The Company's' shares are listed on the Athens Stock Exchange.
The address of its registered office is:
15, A. Metaxa Street GR 145 64, Kifissia Athens, Hellas
The company's web page is: www.frigoglass.com
The interim condensed financial statements have been approved by the Board of Directors on 7th June 2018.
These financial statements have been prepared by management in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union, and International Financial Reporting Standards issued by the IASB.
The financial statements have been prepared on a historical cost basis, except for assets held for sale which are measured at fair value less cost of disposal.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
Differences that may exist between the figures of the financial statement and those of the notes are due to rounding. Wherever it was necessary, the comparative figures have been reclassified in order to be comparable with the current year's presentation.
The financial statements have been prepared in accordance with the going concern basis of accounting. The use of this basis of accounting takes into consideration the Group's current and forecasted financing position.
The Interim Condensed Financial Information should be read in conjunction with the annual financial statements for the year ended 31 December 2017 that are available on the company's web page www.frigoglass.com.
On April 2018, the Company reached an agreement to sell the entire share capital of its glass container subsidiary Frigoglass Jebel Ali FZE. The transaction is expected to be completed in the second half of 2018, while it is anticipated that the proceeds of the sale, after certain deductions including transaction related fees and expenses, will be applied towards the reduction of Frigoglass' first lien debt.
Frigoglass S.A.I.C. has an equity position of €22,8m, therefore, is lower than half (1/2) of the share capital. As a consequence, the requirements of article 47 of the Companies Act 2190/1920 are applicable.
The total consolidated current liabilities of the group amounted to €183,5m and the total consolidated current assets amounted to €289,7m.
The Group's financial projections for the upcoming 12 months indicate that it will be able to meet its obligations as they fall due.
Taking into consideration the above, the Directors have a reasonable expectation that the Group will be able to successfully navigate the present uncertainties and continue its operation. Therefore, the financial statements have been prepared on a going concern basis.
The accounting policies adopted in preparing this Interim Condensed Financial Information are consistent with those described in the Company and Group annual financial statements for the year ended 31 December 2017.
There have been no changes in the accounting policies that were used for the preparation of the annual financial statements prepared by the Company and the Group for the year ended 31 December 2017.
The financial statements have been prepared on a historical cost basis, except for assets held for sale which are measured at fair value less cost of disposal.
The preparation of these Interim Condensed Financial Information in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after 01.01.2018.
None of the standards and interpretations issued is expected to have a significant effect on the Consolidated or the Parent Company financial statements with the exception of IFRS 16 "Leases" effective after 1 January 2019.
For IFRS 16 "Leases" effective for annual periods after 1 January 2019 the management of the company is evaluating the impact on the Consolidated or the Parent Company financial statements.
IFRS 9 replaces the guidance in IAS 39 which deals with the classification and measurement of financial assets and financial liabilities and it also includes an expected credit losses model that replaces the incurred loss impairment model that was applied under IAS 39. IFRS 9 establishes a more principles‐based approach to hedge accounting and addresses inconsistencies and weaknesses in the previous model in IAS 39.
The Group and the Company applied the Standard from 1 January 2018 retrospectively, without revising comparative information from previous years.
During 2017, the Group and the Company completed their study of the requirements of IFRS 9 on Classification and Measurement (including impairment), concluding that their financial instruments will be accounted for in a manner similar to IAS 39. In particular, the examination of the business model and cash flow characteristics does not affect the classification and measurement of trade and other receivables of the Group and the Company that will continue to be measured at amortized cost. The effect of the new impairment model was also examined. The Group and the Company have determined that their trade receivables and other financial assets generally have a low credit risk.
The effect of applying the new model of expected loss to the Group and the Company does not affect the financial statements.
IFRS 15 has been issued in May 2014. The objective of the standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity recognises revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.
The Group and the Company adopted the Standard on January 1, 2018 using the modified retrospective method, the transition effect will be collectively recognized in the "Retained earnings", while the comparative amounts will not be restated.
In 2017, the Group and the Company examined a representative sample of contracts with customers in order to identify changes in the time or amount of revenue recognition.
The studies were conducted on contracts that would not have been completed on the date of the first application, and receipts from sales of commercial refrigeration including service provision and sales of glass were examined.
Ratings have shown that no adjustment is required during the transition.
The amendments introduce two approaches. The amended standard: a) gives all companies that issue insurance contracts the option to recognise in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is issued; and b) gives companies, whose activities are predominantly connected with insurance, an optional temporary exemption from applying IFRS 9 until 2021. The entities that have elected to defer the application of IFRS 9 continue to apply the existing financial instruments standard—IAS 39.
The amendment clarifies the measurement basis for cash‐settled, share‐based payments and the accounting for modifications that change an award from cash‐settled to equity‐ settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity‐settled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share‐based payment and pay that amount to the tax authority.
The amendments clarified that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition and the change must be supported by evidence.
The interpretation provides guidance on how to determine the date of the transaction when applying the standard on foreign currency transactions, IAS 21. The interpretation applies where an entity either pays or receives consideration in advance for foreign currency‐denominated contracts.
IAS 28 "Investments in associates and Joint ventures"
The amendments clarified that when venture capital organisations, mutual funds, unit trusts and similar entities use the election to measure their investments in associates or joint ventures at fair value through profit or loss (FVTPL), this election should be made separately for each associate or joint venture at initial recognition.
The amendments allow companies to measure particular prepayable financial assets with so‐called negative compensation at amortised cost or at fair value through other comprehensive income if a specified condition is met—instead of at fair value through profit or loss.
IFRS 16 has been issued in January 2016 and supersedes IAS 17. The objective of the standard is to ensure the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.
For IFRS 16 "Leases" effective for annual periods after 1 January 2019 the management of the company is evaluating the impact on the Consolidated or the Parent Company financial statements.
IFRS 17 has been issued in May 2017 and supersedes IFRS 4. IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard and its objective is to ensure that an entity provides relevant information that faithfully represents those contracts. The new standard solves the comparison problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current values instead of historical cost. The standard has not yet been endorsed by the EU.
The amendments clarify that companies account for long‐term interests in an associate or joint venture—to which the equity method is not applied—using IFRS 9. The amendments have not yet been endorsed by the EU.
IFRIC 23 "Uncertainty over income tax treatments" (effective for annual periods beginning on or after 1 January 2019)
The interpretation explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment. IFRIC 23 applies to all aspects of income tax accounting where there is such uncertainty, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates. The interpretation has not yet been endorsed by the EU.
The amendments specify how companies determine pension expenses when changes to a defined benefit pension plan occur. The amendments have not yet been endorsed by the EU.
The amendments set out below include changes to four IFRSs. The amendments have not yet been endorsed by the EU.
IFRS 3 "Business combinations"
The amendments clarify that a company remeasures its previously held interest in a joint operation when it obtains control of the business.
The amendments clarify that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.
The amendments clarify that a company accounts for all income tax consequences of dividend payments in the same way.
The amendments clarify that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under current circumstances.
The Group makes estimates and assumptions concerning the future. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year concern income tax.
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required by the Group Management in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. If the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax.
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in Note 2.6.1. of the annual financial statements. The recoverable amounts of cash‐generating units have been determined based on value‐in‐ use calculations. These calculations require the use of estimates (see Note 7).
The Group's investments in subsidiaries are tested for impairment when indications exist that its carrying value may not be recoverable. The recoverable amount of the investments in subsidiaries is determined on value in use calculations, which requires the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a one year period and cash projections for four additional years. At 31 December 2017, the Company has an investment in Frigoinvest Holdings B.V. of €60 m, which holds the Group's subsidiaries in the ICM and Glass segments which represent the two identifiable, separate cash generating units. Based on the assessment performed by management no impairment charge was recognized with respect to the Company's investment in subsidiary.
The Group assesses on an annual basis, the useful lives of its property, plant and equipment and intangible assets. These estimates take into account the relevant operational facts and circumstances, the future plans of Management and the market conditions that exist as at the date of the assessment.
The provision for doubtful debts has been based on the outstanding balances of specific debtors after taking into account their ageing and the agreed credit terms. This process has excluded receivables from subsidiaries as Management is of the view that these receivables are not likely to require an impairment provision. The analysis of the provision is presented in Note 9.
The present value of the retirement benefit obligations depend on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the relevant obligation comprises the discount rate, the expected return on plan assets, the rate of compensation increase, the rate of inflation and future estimated pension increases. Any changes in these assumptions will impact the carrying amount of the retirement benefit obligations. The Group determines the amount of the retirement benefit obligations using suitably qualified independent actuaries at each year‐end's balance sheet date
The Group's property, plant & equipment is tested for impairment when indications exist that its carrying value may not be recoverable. The recoverable amount of the property, plant & equipment is determined under IAS 36 at the higher of its value in use and fair value less costs of disposal. When the recoverable amount is determined on a value in use basis, the use of assumptions is required.
There are no areas that Management required to make critical judgements in applying accounting policies.
The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements as at 31 December 2017. There have been no changes in the risk management department or in any risk management policies since the year end of the previous year.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.
The operating segment information presented below is based on the information that the Management Committee uses to assess the performance of the Group's operating segments.
Taking into account the above, the categorization of the Group's operations in business segments is the following:
‐ Ice Cold Merchandise ( ICM ) Operations
‐ Glass Operations
The consolidated Balance Sheet and Income Statement per business segment are presented below:
| Three months ended | Three months ended | Three months ended | ||||||
|---|---|---|---|---|---|---|---|---|
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |||||
| Discontinued Operations Glass Operations |
ICM Operations |
Glass Operations |
Total | ICM Operations |
Glass Operations |
Total | ||
| Net sales revenue | 5.419 | 6.074 | 81.142 | 24.522 105.664 70.064 | 18.150 88.214 | |||
| Operating Profit / |
(1.182) (1.411) | 3.797 | 4.458 8.255 | 1.272 | 2.766 4.038 | |||
| Finance |
(243) (371) (6.431) 1.498 (4.933) (8.377) 1.255 (7.122) | |||||||
| Profit / restructuring costs |
(1.425) (1.782) (2.634) 5.956 3.322 (7.105) 4.021 (3.084) | |||||||
| Restructuring gains/ |
‐ | ‐ | (275) | ‐ (275) | (3.748) ‐ (3.748) | |||
| Profit / |
(1.425) (1.782) (2.909) 5.956 3.047 (10.853) 4.021 (6.832) | |||||||
| Income tax expense | ‐ ‐ | (1.483) | (2.225) (3.708) (883) (1.580) (2.463) | |||||
| Profit / expenses from continuing operations |
(1.425) (1.782) (4.392) 3.731 (661) (11.736) 2.441 (9.295) | |||||||
| Profit / shareholders of the company |
(1.425) (1.782) (4.272) | 2.026 | (2.246) | (11.591) | 1.147 | (10.444) | ||
| Depreciation | 2 | 1.334 | 3.256 | 1.618 4.874 | 3.551 | 1.933 5.484 | ||
| EBITDA | (1.180) | (77) 7.053 |
6.076 13.129 | 4.823 | 4.699 9.522 |
Net sales revenue
EBITDA
Operating Profit /
There are no sales between the two segments.
| Y‐o‐Y % | |||||
|---|---|---|---|---|---|
| 31.03.2018 vs 31.03.2017 | |||||
| Glass | ICM | ||||
| Total | Operations | Operations | |||
| 19,8% | 35,1% | 15,8% | |||
| 104,4% | 61,2% | 198,5% | |||
| 37,9% | 29,3% | 46,2% | |||
Continuing operations:
ii) Balance Sheet
| Three months ended 31.03.2018 |
Year ended 31.12.2017 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Held for sale | ICM Operations |
Glass Operations |
Total | Held for sale | ICM Operations |
Glass Operations |
Total | |
| Total assets | 18.092 | 269.620 | 118.416 | 406.128 | 17.575 | 255.438 | 117.821 | 390.834 |
| Total liabilities | 9.772 | 436.880 | 6.755 | 453.407 | 9.973 | 372.862 | 50.264 | 433.099 |
| Capital expenditure | 81 | 1.965 | 1.770 | 3.816 | 1.127 | 6.971 | 11.131 | 19.229 |
Reference Note 6 & 7
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations of each segment.
| Consolidated | Glass Operations | Discontinued Operations | ||
|---|---|---|---|---|
| Three months ended | Three months ended | |||
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |
| ICM Operations : | ||||
| East Europe | 39.152 | 30.813 | ||
| West Europe | 23.169 | 21.186 | ||
| Africa / Middle East | 12.750 | 6.684 | ||
| Asia/Oceania | 6.021 | 10.810 | ||
| America | 50 | 571 | ||
| Total | 81.142 70.064 | |||
| Glass Operations : | ||||
| Africa / Middle East | 24.522 | 18.150 | ||
| Total | 24.522 | 18.150 | ||
| Total Sales : | ||||
| East Europe | 39.152 30.813 | ‐ | ‐ | |
| West Europe | 23.169 21.186 | ‐ | ‐ | |
| Africa / Middle East | 37.272 24.834 | 1.954 | 3.276 | |
| Asia/Oceania | 6.021 10.810 | 3.465 | 2.798 | |
| America | 50 571 | ‐ | ‐ | |
| Consolidated | 105.664 88.214 5.419 | 6.074 |
in € 000's
Net sales revenue analysis per geographical area (based on customer location)
| Three months ended | |||
|---|---|---|---|
| 31.03.2018 | 31.03.2017 | ||
| ICM Operations : | |||
| East Europe | 241 | 436 | |
| West Europe | 8.411 | 3.172 | |
| Africa / Middle East | 1.626 | 249 | |
| Sales to third parties | 10.278 | 3.857 | |
| Intercompany sales | 1.795 | 1.464 | |
| Total Sales | 12.073 | 5.321 |
c) Capital expenditure per geographical area
| 31.03.2018 31.12.2017 | 31.03.2017 | ||
|---|---|---|---|
| ICM Operations : | |||
| East Europe | 1.499 | 3.374 | 126 |
| West Europe | 339 | 1.972 | 450 |
| Africa / Middle East | 71 | 630 | 103 |
| Asia/Oceania | 56 | 995 | 141 |
| Total | 1.965 6.971 820 | ||
| Glass Operations: | |||
| Africa / Middle East | 1.770 | 11.131 | 975 |
| Total | 1.770 | 11.131 | 975 |
| Discontinued οperations | 82 | 1.127 | 18 |
| Consolidated | 3.817 19.229 1.813 |
Parent Company
Consolidated Period ended
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Balance at 01.01.2018 | 5.097 | 60.013 | 202.320 | 5.751 | 11.445 | 284.626 |
| Additions | ‐ | 26 | 49 | 99 | 216 | 390 |
| Construction in progress & advances | ‐ | ‐ | 2.817 | ‐ | ‐ | 2.817 |
| Disposals | ‐ | ‐ | (387) | ‐ | ‐ | (387) |
| Exchange differences | (146) (436) (3.276) | (93) | (113) | (4.064) | ||
| Balance at 31.03.2018 | 4.951 | 59.603 | 201.523 | 5.757 | 11.548 | 283.382 |
| Accumulated Depreciation | ||||||
| Balance at 01.01.2018 | ‐ | 27.585 | 136.469 | 4.275 | 9.542 | 177.871 |
| Additions | ‐ | 603 | 2.955 | 154 | 182 | 3.894 |
| Disposals | ‐ | ‐ | (366) | ‐ | ‐ | (366) |
| Exchange differences | ‐ | (151) (2.154) | (66) | (96) | (2.467) | |
| Balance at 31.03.2018 | ‐ | 28.037 | 136.904 | 4.363 | 9.628 | 178.932 |
| Net book value at 31.03.2018 | 4.951 | 31.566 | 64.619 | 1.394 | 1.920 | 104.450 |
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Balance at 01.01.2017 | 5.509 | 88.126 | 305.628 | 6.271 | 13.545 | 419.079 |
| Additions | ‐ | 2 | 511 | 9 | 51 | 573 |
| Additions‐Discontinued operations | ‐ | ‐ | 18 | ‐ | ‐ | 18 |
| Construction in progress & advances | ‐ | 39 | 741 | ‐ | 12 | 792 |
| Assets held for sale | ‐ | (18.740) | (82.807) | (202) | (851) | (102.600) |
| Exchange differences | 37 | (44) (1.117) | (58) | 35 | (1.147) | |
| Balance at 31.03.2017 | 5.546 | 69.383 | 222.974 | 6.020 | 12.792 | 316.715 |
| Accumulated Depreciation | ||||||
| Balance at 01.01.2017 | ‐ | 44.330 | 226.488 | 4.451 | 11.653 | 286.922 |
| Additions | ‐ | 510 | 3.334 | 159 | 186 | 4.189 |
| Additions‐Discontinued operations | ‐ | 125 | 1.191 | 2 | 7 | 1.325 |
| Assets held for sale | ‐ | (16.338) | (74.817) | (199) | (795) | (92.149) |
| Exchange differences | ‐ | (43) (274) | (44) | (21) | (382) | |
| Balance at 31.03.2017 | ‐ | 28.584 | 155.922 | 4.369 | 11.030 | 199.905 |
| Net book value at 31.03.2017 | 5.546 | 40.799 | 67.052 | 1.651 | 1.762 | 116.810 |
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Balance at 01.01.2018 | 303 | 9.014 | 14.292 | 267 | 2.906 | 26.782 |
| Additions | ‐ | 2 | 4 | ‐ | 5 | 11 |
| Balance at 31.03.2018 | 303 | 9.016 | 14.296 | 267 | 2.911 | 26.793 |
| Accumulated Depreciation | ||||||
| Balance at 01.01.2018 | ‐ | 6.333 | 13.308 | 255 | 2.471 | 22.367 |
| Additions | ‐ | 94 | 73 | 1 | 28 | 196 |
| Balance at 31.03.2018 | ‐ | 6.427 | 13.381 | 256 | 2.499 | 22.563 |
| Net book value at 31.03.2018 | 303 | 2.589 | 915 | 11 | 412 | 4.230 |
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| Land | Building & technical works |
Machinery technical installation |
Motor vehicles |
Furniture & fixtures |
Total | |
| Cost | ||||||
| Balance at 01.01.2017 | 303 | 9.030 | 14.181 | 267 | 2.615 | 26.396 |
| Additions | ‐ | ‐ | 9 | ‐ | 6 | 15 |
| Balance at 31.03.2017 | 303 | 9.030 | 14.190 | 267 | 2.621 | 26.411 |
| Accumulated Depreciation | ||||||
| Balance at 01.01.2017 | ‐ | 5.162 | 12.993 | 250 | 2.451 | 20.856 |
| Additions | ‐ | 97 | 77 | 3 | 10 | 187 |
| Balance at 31.03.2017 | ‐ | 5.259 | 13.070 | 253 | 2.461 | 21.043 |
| Net book value at 31.03.2017 | 303 | 3.771 | 1.120 | 14 | 160 | 5.368 |
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| Development costs |
Patents & trademarks |
Software & other intangible assets |
Total | ||||
| Cost | |||||||
| Balance 01.01.2018 | 28.833 | 212 | 24.088 | 53.133 | |||
| Additions | 23 | ‐ | 129 | 152 | |||
| Construction in progress & advances | 285 | ‐ | 91 | 376 | |||
| Exchange differences | 20 | 3 | (31) | (8) | |||
| Balance at 31.03.2018 | 29.161 | 215 | 24.277 | 53.653 | |||
| Accumulated Depreciation | |||||||
| Balance at 01.01.2018 | 22.250 | 212 | 19.895 | 42.357 | |||
| Additions | 519 | ‐ | 514 | 1.033 | |||
| Exchange differences | 21 | 3 | (25) | (1) | |||
| Balance at 31.03.2018 | 22.790 | 215 | 20.384 | 43.389 | |||
| Net book value at 31.03.2018 | 6.371 | ‐ | 3.893 | 10.264 |
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| Development costs |
Patents & trademarks |
Software & other intangible assets |
Total | ||||
| Cost | |||||||
| Balance at 01.01.2017 | 31.715 | 225 | 25.953 | 57.893 | |||
| Additions | 16 | ‐ | 52 | 68 | |||
| Construction in progress & advances | 362 | ‐ | ‐ | 362 | |||
| Assets held for sale | ‐ | ‐ | (197) | (197) | |||
| Exchange differences | (330) | (1) | (50) | (381) | |||
| Balance at 31.03.2017 | 31.763 | 224 | 25.758 | 57.745 | |||
| Accumulated Depreciation | |||||||
| Balance at 01.01.2017 | 23.320 | 225 | 20.188 | 43.733 | |||
| Additions | 768 | ‐ | 484 | 1.252 | |||
| Assets held for sale | ‐ | ‐ | (148) | (148) | |||
| Exchange differences | (57) | (1) | (71) | (129) | |||
| Balance at 31.03.2017 | 24.031 | 224 | 20.453 | 44.708 | |||
| Net book value at 31.03.2017 | 7.732 | ‐ | 5.305 | 13.037 | |||
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
| Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| Development costs |
Patents & trademarks |
Software & other intangible assets |
Total | ||||
| Cost | |||||||
| Balance at 01.01.2018 | 21.429 | 35 | 16.959 | 38.423 | |||
| Additions | 10 | ‐ | 40 | 50 | |||
| Construction in progress & advances | 279 | ‐ | ‐ | 279 | |||
| Balance at 31.03.2018 | 21.718 | 35 | 16.999 | 38.752 | |||
| Accumulated Depreciation | |||||||
| Balance at 01.01.2018 | 16.617 | 35 | 14.482 | 31.134 | |||
| Additions | 351 | ‐ | 339 | 690 | |||
| Balance at 31.03.2018 | 16.968 | 35 | 14.821 | 31.824 | |||
| Net book value at 31.03.2018 | 4.750 | ‐ | 2.178 | 6.928 |
Costs related to Construction in progress and advances are capitalised until the end of the forthcoming year.
| Parent Company | ||||
|---|---|---|---|---|
| Development costs |
Patents & trademarks |
Software & other intangible assets |
Total | |
| Cost | ||||
| Balance at 01.01.2017 | 20.403 | 35 | 16.470 | 36.908 |
| Additions | 11 | ‐ | 62 | 73 |
| Construction in progress & advances | 361 | ‐ | ‐ | 361 |
| Balance at 31.03.2017 | 20.775 | 35 | 16.532 | 37.342 |
| Accumulated Depreciation | ||||
| Balance at 01.01.2017 | 15.300 | 35 | 13.089 | 28.424 |
| Additions | 341 | ‐ | 332 | 673 |
| Balance at 31.03.2017 | 15.641 | 35 | 13.421 | 29.097 |
| Net book value at 31.03.2017 | 5.134 | ‐ | 3.111 | 8.245 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Raw materials | 60.815 | 64.384 | 2.792 | 2.760 |
| Work in progress | 3.337 | 2.671 | 28 | 29 |
| Finished goods | 36.928 | 31.659 | 1.488 | 851 |
| Less: Provision | (8.771) | (9.639) | (1.893) | (1.893) |
| Total | 92.309 | 89.075 | 2.415 | 1.747 |
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
| Consolidated | Parent Company | ||||
|---|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | ||
| Trade receivables | 103.759 | 91.018 | 13.236 | 9.846 | |
| (6.073) | (6.194) | (5.623) | (5.623) | ||
| 97.686 | 84.824 | 7.613 | 4.223 |
The fair value of trade debtors closely approximates their carrying value. The Group and the Company have a significant concentration of credit risk with specific customers which comprise large international groups such as Coca ‐ Cola HBC, other Coca ‐ Cola bottlers, Diageo ‐ Guinness and Heineken.
The Group does not require its customers to provide any pledges or collateral due to the general high calibre and international reputation of portfolio.
Management does not expect any losses from non‐performance of trade receivables, other than as provided for as at 31.03.2018.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| V.A.T receivable | 11.798 | 11.904 | 370 | 842 |
| Grants for exports receivable | 7.371 | 7.306 | ‐ | ‐ |
| Insurance prepayments | 1.306 | 1.282 | 199 | 201 |
| Prepaid expenses | 2.372 | 1.131 | 285 | 86 |
| Other taxes receivable | 1.009 | 921 | ‐ | ‐ |
| Advances to employees | 708 | 561 | ‐ | ‐ |
| Other receivables | 1.752 | 2.370 | 380 | 1.170 |
| Total | 26.316 | 25.475 | 1.234 | 2.299 |
Grants for exports receivable of € 7,3m. (2017 € 7,3m.) comprise of Export Expansion Grants (EEG) and Negotiable Duty Credit Certificates (NDCC). Export Expansion Grants (EEG) are granted by the Nigerian Government on exports of goods produced in the country, which meet certain eligibility criteria. These grants are recognized at fair value, and Management does not expect any losses from non‐recoverability.
Negotiable Duty Credit Certificates (NDCC) originate from export grants received from the government and are useful for the settlement of custom duties payable to the government, with no expiry date.
A revised scheme has been proposed to be implemented as of 2018, whereby the Settlement of Claims for EEG by the Nigerian Government will be performed through the issue of negotiable tax credit certificates to the beneficiaries. This instrument, known as Export Credit Certificate (ECC), will be used to settle all Federal Government taxes such as company income tax, VAT, WHT, etc. as well as the following: a. purchase of Federal Government Bonds, b. settlement of credit facilities by Bank of Industry, NEXIM Bank and Central Bank of Nigeria intervention Facilities, and c. settlement of AMCON liabilities. The Certificate will be valid for two years and will be transferable once to the final beneficiaries. Existing EEG claims not yet settled will continue to be eligible under the revised scheme. It is proposed that the existing NDCCs with the Exporters will be swapped with promissory notes (under‐written by the Federal Government).
The V.A.T receivable is fully recoverable through the operating activity of the Group and the Company.
Other receivables comprise of various prepayments and accrued income not invoiced. The fair value of other receivables closely approximates their carrying value.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Cash on hand | 10 | 8 | 1 | 1 |
| Short term bank deposits | 53.908 | 53.122 | 1.705 | 997 |
| Total | 53.918 | 53.130 | 1.706 | 998 |
The tight liquidity in 2017 and 2018 in the foreign exchange market in Nigeria has significantly limited our ability to execute payments in foreign currency, leading to a high Nigerian Naira cash balance of € 22 m.. We expect the excess cash to be utilised among others to fund capital expenditure and raw material purchases over the coming years.
The effective interest rate on short term bank deposits as at 31.03.2018 was 4,44% ( December 2017: 2,9% ).
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Taxes and duties payable | 1.891 | 1.785 | 400 | 1 |
| VAT payable | 1.553 | 1.028 | ‐ | ‐ |
| Social security insurance | 2.233 | 1.704 | 324 | 493 |
| Customers' advances | 1.194 | 1.293 | 114 | 87 |
| Other taxes payable | 1.833 | 1.645 | ‐ | ‐ |
| Accrued discounts on sales | 12.091 | 11.327 | 1.250 | 273 |
| Accrued fees & costs payable to third parties | 6.731 | 5.538 | 1.332 | 1.110 |
| Accrued payroll expenses | 7.507 | 5.765 | 2.539 | 1.953 |
| Other accrued expenses | 2.707 | 2.843 | 117 | 144 |
| Accrued interest for bank loans | 3.517 | 2.454 | ‐ | ‐ |
| Expenses for restructuring activities | 74 | 126 | ‐ | ‐ |
| Accrual for warranty expenses | 2.840 | 2.542 | 516 | 367 |
| Other payables | 4.229 | 4.435 | 328 | 322 |
| Total | 48.400 | 42.485 | 6.920 | 4.750 |
The fair value of other creditors approximates their carrying value.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
Accrued discount on sales: The increase in the balance is mainly attributable to the higher sales and seasonality of sales.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Bank loans | 59.964 | 55.485 | ‐ | ‐ |
| Intergroup bond loans | ‐ | ‐ | 34.106 | 33.702 |
| Bond loans | 177.929 | 177.929 | ‐ | ‐ |
| Total Non current borrowings | 237.893 | 233.414 | 34.106 | 33.702 |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Bank overdrafts | 4.060 | 2.584 | ‐ | ‐ |
| Bank loans | 41.760 | 39.857 | ‐ | ‐ |
| Total current borrowings | 45.820 | 42.441 | ‐ | ‐ |
| Total borrowings | 283.713 | 275.855 | 34.106 | 33.702 |
| Maturity of non current borrowings | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Between 2 & 5 years | 237.893 | 233.414 | 34.106 | 33.702 |
| Total | 237.893 | 233.414 | 34.106 | 33.702 |
| Effective interest rates | Consolidated | Parent Company | ||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Bond loans | 5,77% | 5,77% | 5,90% | 8,60% |
| Non current borrowings | 4,13% | 4,29% | ‐ | ‐ |
| Bank overdrafts | 9,15% | 9,15% | ‐ | ‐ |
| Current borrowings | 2,91% | 3,13% | ‐ | ‐ |
| Consolidated | Parent Company | |||
| Net debt / Total capital | 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 |
| Net debt / Total capital $(A) / (C)$ |
|---|
| Total capital $(C) = (A) + (B)$ |
| Total equity (B) |
| Net debt (A) |
| Cash & cash equivalents |
| Total borrowings |
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| Net debt / Total capital | 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 |
| Total borrowings | 283.713 | 275.855 | 34.106 | 33.702 |
| Cash & cash equivalents | (53.918) | (53.130) | (1.706) | (998) |
| Net debt (A) | 229.795 | 222.725 | 32.400 | 32.704 |
| Total equity (B) | (47.279) | (42.265) | 22.843 | 24.238 |
| Total capital (C) = (A) + (B) | 182.516 | 180.460 | 55.243 | 56.942 |
| Net debt / Total capital (A) / (C) | 125,90% | 123,42% | 58,65% | 57,43% |
The foreign currency exposure of borrowings is as follows:
| Consolidated | |||||||
|---|---|---|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | ||||||
| Current borrowings |
Non current borrowings |
Total | Current borrowings |
Non current borrowings |
Total | ||
| ‐ EURO | 40.534 | 218.836 | 259.370 | 37.937 | 213.836 | 251.773 | |
| ‐ USD | 1.226 | 19.057 | 20.283 | 1.920 | 19.578 | 21.498 | |
| ‐ INR | 4.060 | ‐ | 4.060 | 2.584 | ‐ | 2.584 | |
| Total | 45.820 | 237.893 | 283.713 | 42.441 | 233.414 | 275.855 |
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | |||||
| Current borrowings |
Non current borrowings |
Total | Current borrowings |
Non current borrowings |
Total | |
| ‐ EURO | ‐ | 34.106 | 34.106 | ‐ 33.702 |
33.702 | |
| Total | ‐ | 34.106 | 34.106 | ‐ | 33.702 | 33.702 |
With the exception of the 2nd Lien Notes, the Group borrows at floating interest rates, which are renegotiated in periods not longer than six months.
In May 2013, the Company's indirect subsidiary Frigoglass Finance B.V. (the "Issuer" or "Borrower") issued €250m senior notes due 15 May 2018 (the "2013 Notes"), at a fixed coupon of 8,25% per annum and at an issue price of 100%. In addition, the Group also entered into two bilateral revolving credit facilities (the "2013 RCFs"), each in an amount of €25m and with a three year maturity (i.e. maturing on the 17th of May 2016).
On 22 April 2016, the lenders under the 2013 RCFs entered into an agreement with the Issuer pursuant to which they agreed to extend the maturity of the 2013 RCFs up to 31 March 2017 and to waive all breaches and to make certain other amendments to the terms of the 2013 RCFs including the removal of certain financial covenants, subject to certain conditions being met (including the provision of the Boval Term Loan Facility (as defined below) by the Company's largest shareholder, Boval S.A. ("Boval"). On 31 March 2016, Boval committed to provide the Group with a €30m term loan facility (the "Boval Term Loan Facility") maturing on 31 March 2017, on terms substantially similar to the 2013 RCFs and subject to shareholder approval at the Company's general meeting of shareholders. The shareholders approved the Boval Term Loan Facility at the general meeting held on 22 April 2016. The Boval Term Loan Facility was fully drawn as of 31st December 2016.
In connection with the amendment and extension of the 2013 RCFs, Frigoglass agreed to repay and cancel €12m of indebtedness outstanding under each 2013 RCF by 31 December 2016 pursuant to an amortization schedule.
In accordance with relevant IFRS pronouncements, the 2013 Notes were re‐classified as current liabilities as of 31 December 2016 on the basis that the payment and covenant obligations under the 2013 RCFs had triggered an event of default under the 2013 Notes due to the fact that the waivers obtained as at the balance sheet dates did not cover a period of 12 months after the respective balance sheet date.
The Group in 2016 engaged several advisors and began a comprehensive review of its business and financing arrangements in order to optimize the capital structure of the Group and to ensure that an adequate level of financial liquidity is achieved and maintained.
On 23 October 2017 the capital restructuring was completed following the satisfaction of all conditions precedents and the completion of all required implementation steps.
As part of the overall capital restructuring of the Group, Frigoglass entered into new debt arrangements that replaced the existing Group financing with new financing with extended maturities. The 2013 Notes issued by the Issuer were cancelled and delisted from the Luxembourg Stock Exchange in connection with the completion of the restructuring.
The Group's new first‐lien indebtedness under the First Lien Debt amounts to approximately €120,0m, consisting of €40,4m senior secured first‐lien facilities and €79.4m senior secured first‐lien notes. The Group's second‐lien debt amounts to approximately €141m, comprising of €42,2m second‐lien secured facilities and €98,5m second‐lien secured notes. The above amounts assume full utilization of the new revolving credit facilities (RCFs).
The First Lien Facilities comprise a €25.000.000 First Lien RCF with a base currency amount denominated in Euro, a \$10.000.000 First Lien Term Facility and a €7.100.937,38 First Lien Term Facility.
The maturity date of the First Lien Facilities Agreement is 31 December 2021 (the "Maturity Date"). A €2m aggregate amortisation payment (each an "Amortisation Payment") will be paid every six months starting from March 2019 to prepay the First Lien Debt.
Interest is accrued based on EURIBOR/LIBOR (as applicable) plus a rate of 4,25% per annum.
There are two covenants: (i) a Minimum Liquidity Covenant which is tested weekly and (ii) a Leverage Covenant which will be tested semi‐annually.
On 23 October 2017, the Borrower issued the €79.394.180 senior secured guaranteed notes, with interest rate of Euribor plus 4,25% per annum due 2021 (the "First Lien Notes").
The First Lien Notes Subscription Agreement contains the same covenants and undertakings as the First Lien Facilities, except for the financial covenants.
The Second Lien Facilities comprise a €24.850.000 Second Lien RCF with a base currency amount denominated in Euro and a €17.393.375 Second Lien Term Facility.
The maturity date of the Second Lien Facilities Agreement is 31 March 2022. There is no amortisation.
Interest is accrued as EURIBOR/LIBOR (as applicable) plus a rate of 3,25% per annum.
The representations, covenants and events of default are substantially the same as those in the First Lien Facilities Agreement.
On 23 October 2017, the Issuer issued the €98.535.239 second priority secured notes due 2022 (the "Second Lien Notes") at a fixed rate of 7% per annum.
The second lien notes indenture contains a series of common restrictions and undertakings for the Group, including among other restrictions on financial indebtedness, distribution of dividends, the disposal of assets and mergers and acquisitions.
The following companies have granted guarantees in respect of the new loan facilities and the notes:
*Upon completion of the anticipated sale of Frigoglass Jebel Ali FZE, the buyer will receive the shares of Frigoglass Jebel Ali FZE and the securities and guarantees granted by Frigoglass Jebel Ali FZE will, at that point, be released.
The security granted in favour of the creditors under the First Lien Facilities, First Lien Notes, Second Lien Facilities and Second Lien Notes will initially include the following:
| ASSET | IN € 000'S |
|---|---|
| Tangible assets | 35.557 |
| Other long term assets | 130 |
| Inventories | 33.056 |
| Trade debtors | 33.988 |
| Intergroup receivables | 54.119 |
| Intergroup loan receivables | 348.590 |
| Other debtors | 4.126 |
| Income tax advance | 11 |
| Cash & cash equivalents | 11.953 |
| Total | 521.530 |
Note 14 ‐ Investments in subsidiaries
| Parent Company | ||
|---|---|---|
| 31.03.2018 | 31.12.2017 | |
| Net book value | Net book value | |
| 60.005 | 58.045 | |
| Additions | ‐ | 1.960 |
| Total Frigoinvest Holdings B.V (The Netherlands) | 60.005 | 60. 005 |
In its separate financial statements, the Parent Company accounts for investments in subsidiaries at historic cost less any impairment losses.
The increase in Parent Company's investment in the subsidiary Frigoinvest Holdings B.V. derived as a result of the capital restructuring process. The increase incurred with the payment of € 37,5 m. in cash reduced by the effect of the capitalisation of intergroup borrowing of € ‐35,5 m., as described in Note 13.
The subsidiaries of the Group, the country of incorporation and their shareholding status as are described below:
| Country of | Consolidation | % | |
|---|---|---|---|
| Company name & business segment | incorporation | method | Shareholding |
| ICM Operations | |||
| Frigoglass S.A.I.C. | Greece | Parent Company | |
| SC. Frigoglass Romania SRL | Romania | Full | 100,00% |
| PT Frigoglass Indonesia | Indonesia | Full | 99,98% |
| Frigoglass South Africa Ltd. | South Africa | Full | 100,00% |
| Frigoglass Eurasia LLC | Russia | Full | 100,00% |
| Frigoglass (Guangzhou) Ice Cold Equipment Co. ,Ltd. | China | Full | 100,00% |
| Scandinavian Appliances A.S | Norway | Full | 100,00% |
| Frigoglass Iberica SL | Spain | Full | 100,00% |
| Frigoglass Spzoo | Poland | Full | 100,00% |
| Frigoglass India PVT.Ltd. | India | Full | 100,00% |
| Frigoglass East Africa Ltd. | Kenya | Full | 100,00% |
| Frigoglass GmbH | Germany | Full | 100,00% |
| Frigoglass Hungary Kft | Hungary | Full | 100,00% |
| Frigoglass Nordic AS | Norway | Full | 100,00% |
| Frigoglass West Africa Limited | Nigeria | Full | 76,03% |
| Frigoglass Cyprus Limited | Cyprus | Full | 100,00% |
| Norcool Holding A.S | Norway | Full | 100,00% |
| Frigoinvest Holdings B.V | The Netherlands | Full | 100,00% |
| Frigoglass Finance B.V | The Netherlands | Full | 100,00% |
| 3P Frigoglass Romania SRL | Romania | Full | 100,00% |
| Glass Operations | |||
| Frigoglass Global Limited | Cyprus | Full | 100,00% |
| Frigoglass Jebel Ali FZE | Dubai | Full | 100,00% |
| Beta Glass Plc. | Nigeria | Full | 55,21% |
| Frigoglass Industries (NIG.) Ltd. | Nigeria | Full | 76,03% |
All subsidiary undertakings are included in the consolidation.
The Parent Company does not have any shareholdings in the preference shares of subsidiary undertakings included in the Group.
2017 The share capital of the company at 31.12.2016 comprises of 50.593.832 fully paid up ordinary shares of € 0,30 each. The share premium accounts represents the difference between the issue of shares (in cash) and their par value.
The 1st Repetitive General Meeting of shareholders of "FRIGOGLASS S.A.I.C." took place on June 27, 2017. The following items of the agenda were discussed and resolved:
a) the increase of the nominal value of each common registered share of the Company from € 0,30 to € 0,90 through merger of every 3 existing shares to 1 new share and parallel decrease of the total number of shares from 50.593.832 to 16.864.610 (reverse share split 3:1).
b) the nominal decrease of the Company's share capital by the amount of € 9.106.889,40, by a corresponding decrease of the nominal value of each Company's share from € 0,90 (as such will be adjusted following the reverse share split) to € 0,36, according to article 4 para. 4a of C.L. 2190/1920, for the purpose of forming a special reserve of equal amount the use of which will be decided in the future.
c) the share capital increase of the Company up to the amount of € 136.398.446,64, in accordance with article 13a of C.L. 2190/1920, with pre‐emptive rights for the existing shareholders of the Company at a ratio of 22,46 new shares for each existing share through payment in cash and the issuance of 378.884.574 new common voting registered shares, with a nominal value of € 0,36 each, and subscription price of € 0,36.
The share capital increase through cash payment was completed on 18.10.2017 and the amount paid was € 63.459.341,82 which was allocated to € 62.851.774,68 in the share capital account and € 607.567,14 to the share premium account.
d) issuance of 163.984.878 new shares of the Company with a nominal value of € 0.36348 each following the conversion of 163.984.878 Convertible Bonds of a nominal value of € 0,36348 each held by the participating bank lenders and the Scheme creditors.
The Board of Directors of Frigoglass on 23.10.2017 ratified the relevant share capital increase as a result of the above conversion by the amount of € 59.034.556,08. Due to the fact that the share capital increase resulted from the conversion of existing borrowings, the issued capital was recognized at its fair value, ie the stock market value of the shares at the date of the issue, which on November 16, 2017 was € 0,147 per share. As a result, the difference from the nominal value of the shares of € 34.929 thousands was recognized to the share premium account.
The share capital of the Group as at 31.12.2017 comprised of 355.437.751 fully paid up ordinary shares with an nominal value of € 0,36 each.
The share capital of the Group as at 31.03.2018 comprised of 355.437.751 fully paid up ordinary shares with an nominal value of € 0,36 each.
| Number of shares | Share capital ‐000' Euro‐ |
Share premium ‐000' Euro‐ |
|
|---|---|---|---|
| Balance at 01.01.2017 | 50.593.832 | 15.178 | 2.755 |
| Reverse Share Split | (33.729.222) | ‐ | ‐ |
| Transfer to reserves due to the decrease of the nominal value of each share |
‐ | (9.107 | ) ‐ |
| Share capital increase at 18.10.2017 | 174.588.263 | 62.852 | 608 |
| Share capital increase at 23.10.2017 | 163.984.878 | 59.035 | (34.929) |
| Cost for the share capital increase | ‐ | ‐ | (2.235) |
| Balance at 31.12.2017 | 355.437.751 | 127. 958 |
33.801) ( |
|--|
| Consolidated | ||||||
|---|---|---|---|---|---|---|
| Statutory reserves |
Share option reserve |
Extraordinary reserves |
Tax free reserves |
Currency translation reserve |
Total | |
| Balance at 01.01.2017 | 4.177 | 694 | 7.746 | 6.831 | (33.221) | (13.773) |
| Exchange differences | ‐ | ‐ | (38) | ‐ | (717) | (755) |
| Balance at 31.03.2017 | 4.177 | 694 | 7.708 | 6.831 | (33.938) | (14.528) |
| Balance at 01.04.2017 | 4.177 | 694 | 7.708 | 6.831 | (33.938) | (14.528) |
| Transfer from share capital | ‐ | 7.178 | 1.929 | ‐ | 9.107 | |
| Expiration / Cancellation of | ||||||
| share option reserve | ‐ | (24) | ‐ | ‐ | ‐ | (24) |
| Exchange differences | ‐ | ‐ | (248) | ‐ | (6.539) | (6.787) |
| Balance at 31.12.2017 | 4.177 | 670 | 14.638 | 8.760 | (40.477) | (12.232) |
| Balance at 01.01.2018 | 4.177 | 670 | 14.638 | 8.760 | (40.477) | (12.232) |
| Exchange differences | ‐ | ‐ | (53) | ‐ | (1.816) | (1.869) |
| Balance at 31.03.2018 | 4.177 | 670 | 14.585 | 8.760 | (42.293) | (14.101) |
| Parent Company | |||||
|---|---|---|---|---|---|
| Statutory reserves |
Share option reserve |
Extraordinary reserves |
Tax free reserves |
Total | |
| Balance at 01.01.2017 | 4.020 694 4.835 6.831 16.380 | ||||
| Balance at 31.03.2017 | 4.020 694 4.835 6.831 16.380 | ||||
| Balance at 01.04.2017 | 4.020 694 4.835 6.831 16.380 | ||||
| Expiration/Cancellation of share option reserve Transfer from share capital |
‐ (24) | ‐ ‐ (24) ‐ ‐ 7.178 1.929 9.107 |
|||
| Balance at 31.12.2017 | 4.020 670 12.013 8.760 25.463 | ||||
| Balance at 01.01.2018 | 4.020 670 12.013 8.760 25.463 | ||||
| Balance at 31.03.2018 | 4.020 670 12.013 8.760 25.463 |
A statutory reserve is created under the provisions of Hellenic law (Law 2190/20) according to which, an amount of at least 5% of the profit (after tax) for the year must be transferred to this reserve until it reaches one third of the paid up share capital. The statutory reserve can not be distributed to the shareholders of the Company except for the case of liquidation.
The share option reserve refers to the established Stock Option Plan provided to senior managers and members of the Management Committee, as described in Note 15.
The Company has created tax free reserves, in accordance with several Hellenic tax laws, during the years, in order to achieve tax deductions, either
a) by postponing the settlement of tax liabilities until the distribution of the reserves to the shareholders, or
b) by eliminating any future income tax payment related to the issuance of bonus shares to the shareholders.
Should the reserves be distributed to the shareholders as dividends, the distributed profits will be taxed with the applicable rate at the time of distribution.
No provision has been recognized for contingent income tax liabilities in the event of a future distribution of such reserves to the Company's shareholders since such liabilities are recognized at the same time as the dividend liability associated with such distributions.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |
| Interest expense | 3.807 | 6.210 | 506 | 2.078 |
| Interest income | (512) | (427) | ‐ | (3) |
| Net interest expense / |
3.295 | 5.783 | 506 | 2.075 |
| Exchange loss / (gain) & | ||||
| Other Financial costs | 1.638 | 1.339 | 122 | 99 |
| Total finance cost / |
4.933 | 7.122 | 628 | 2.174 |
| Total finance cost / discontinued operations |
243 | 371 |
For the reduction of Interest expenses, reference is made in Note 13 about Non current & current borrowings.
The Group's principal sources of finance consist of Bond Loans, local overdraft facilities, short‐ and long‐term local bank borrowing facilities and Revolving Credit Facilities (RCFs).
The ratio of the fixed to floating interest rates of the Group's principal sources of finance as at 31.3.2018 amounts to 65% / 35%.
The exposure to interest rate risk on the Group's income and cash flows from financing activities is set out below with the relevant sensitivity analysis.
| Volatility of | Effect on | |
|---|---|---|
| Interest Rates | Profit / |
|
| in € 000's | ( +/‐) | before income tax |
| 01.01.2018 ‐ 31.03.2018 ‐EURO |
1,00% | 1.591 |
| ‐USD | 1,00% | 203 |
| ‐INR | 1,00% | 41 |
| Total | 1.835 |
The income tax rates in the countries where the Group operates are between 0% and 33%.
A part of non deductible expenses, tax losses for which no deferred income tax asset was recognised, the different tax rates in the countries in which the Group operates, incomes not subject to tax and other taxes create the final effective tax rate for the Group.
For the financial years 2011 to 2017, all Hellenic Societe Anonyme and Limited Liability Companies that are required to prepare audited statutory financial statements must in addition obtain an "Annual Tax Certificate" as provided for by paragraph 5 of Article 82 of L.2238/1994 for the financial years 2011‐2013 and the Article 65A of L.4174/2013 for the financial years 2014‐2017. This "Annual Tax Certificate" must be issued by the same statutory auditor or audit firm that issues the audit opinion on the statutory financial statements.
Upon completion of the tax audit, the statutory auditor or audit firm must issue a "Tax Compliance Report" which will subsequently be submitted electronically to the Ministry of Finance.
For the years 2011 up to 2016 a respective "Tax Certificate" has been issued by the statutory Certified Auditors in accordance with art 65A of Law 4174/2013, without any qualification or matter of emphasis as pertains to the tax compliance of the Company.
The year 2017 is also audited by the company's certified auditor, the "Tax Certificate" of which has not been issued as yet, since its filing deadline is 31 October 2018.
For financial year 2017, tax audit is in progress and the Company's management does not expect that additional tax liabilities will arise for this year.
The Parent Company has not been audited by tax authorities for the 2010 financial year.
Up to 31.03.2018 we have not been officially served with any audit mandate by the competent Greek tax authorities for the year 2010.
Consequently, the State is not anymore entitled, due to the lapse of the statute of limitation, to issue assessment sheets
and assessment acts for taxes, duties, contributions and surcharges for the years up to and including 2010, pursuant to
the following provisions:
(a) para. 1 art. 84 of Law 2238/1994 (unaudited cases of Income taxation),
(b) para. 1 art. 57 of Law 2859/2000 (unaudited cases of Value Added Tax), and,
(c) para. 5 art. 9 of Law 2523/1997 (imposition of penalties for income tax cases).
For the Parent Company, the "Tax Compliance Report" for the financial years 2011 ‐ 2016 has been issued with no substantial adjustments with respect to the tax expense and corresponding tax provision as reflected in the annual financial statements of 2011 ‐ 2016.
The Parent company received an audit mandate for a tax re‐examination for 2012.
The tax returns of the Parent Company and the Group's subsidiaries have not been assessed by the tax authorities for different periods (see the table below).
Until such time the special tax audit of the companies in the below table is completed, the tax burden for the Group relating to those years cannot be accurately determined. The Group is raising provisions for any additional taxes that may result from future tax audits to the extent that the relevant liability is probable and may be reliably measured.
In some countries, the tax audit is not mandatory and may only be performed under certain conditions.
| Company | Country | Unaudited tax | Line of Business |
|---|---|---|---|
| years | |||
| Frigoglass S.A.I.C. ‐ Parent Company | Greece | 2017 | Ice Cold Merchandisers |
| SC. Frigoglass Romania SRL | Romania | 2010‐2017 | Ice Cold Merchandisers |
| PT Frigoglass Indonesia | Indonesia | 2014‐2017 | Ice Cold Merchandisers |
| Frigoglass South Africa Ltd. | S. Africa | 2012‐2017 | Ice Cold Merchandisers |
| Frigoglass Eurasia LLC | Russia | 2014‐2017 | Ice Cold Merchandisers |
| Frigoglass (Guangzhou) Ice Cold Equipment Co. ,Ltd. |
China | 2017 | Ice Cold Merchandisers |
| Frigoglass Iberica SL | Spain | 2004‐2017 | Sales Office |
| Frigoglass Spzoo | Poland | 2009‐2017 | Sales Office |
| Frigoglass India PVT.Ltd. | India | 2016‐2017 | Ice Cold Merchandisers |
| Frigoglass Hungary Kft | Hungary | 2017 | Service Center ICM's |
| Frigoglass Jebel Ali FZE | Dubai | ‐ | Glass Operation |
| Beta Glass Plc. | Nigeria | 2014‐2017 | Glass Operation |
| Frigoglass Industries (NIG.) Ltd. | Nigeria | 2014‐2017 | Crowns & Plastics |
| Frigoglass West Africa Limited | Nigeria | 2015‐2017 | Ice Cold Merchandisers |
| 3P Frigoglass Romania SRL | Romania | 2009‐2017 | Plastics |
| Frigoglass East Africa Ltd. | Kenya | 2014‐2017 | Sales Office |
| Frigoglass GmbΗ | Germany | 2011‐2017 | Sales Office |
| Scandinavian Appliances A.S | Norway | 2010‐2017 | Sales Office |
| Frigoglass Nordic AS | Norway | 2010‐2017 | Sales Office |
| Norcool Holding A.S | Norway | 2010‐2017 | Holding Company |
| Frigoglass Cyprus Limited | Cyprus | 2011‐2017 | Holding Company |
| Frigoglass Global Limited | Cyprus | 2015‐2017 | Holding Company |
| Frigoinvest Holdings B.V | Netherlands | 2013‐2017 | Holding Company |
| Frigoglass Finance B.V | Netherlands | 2013‐2017 | Financial Services |
The Group Management is not expecting significant tax liabilities to arise from the specific tax audit of the open tax years of the Company as well as of other Group entities in addition to the ones already disclosed in the consolidated financial statements and estimates that the results of the tax audit of the unaudited tax years will not significantly affect the financial position, the asset structure, the profitability and the cash flows of the Company and the Group.
The capital commitments contracted for but not yet incurred at the balance sheet date 31.03.2018 for the Group amounted to € 305 thousands (31.12.2017: € 709 thousands) and relate mainly to purchases of machinery. There are no capital commitments for the Parent Company for the years ended 31.12.2017 and 31.03.2018.
| Note 20 ‐ Related party transactions | ( based on IAS 24 ) |
|---|---|
Truad Verwaltungs A.G is the main shareholder of Frigoglass S.A.I.C with 48,55% shareholding.
Truad Verwaltungs A.G. has also a 23% stake in Coca‐Cola HBC AG share capital.
In April 2016 Frigoglass Finance B.V. signed a loan agreement of a total amount of € 30 m. with BOVAL S.A on the same terms as the RCFs.
BOVAL S.A in Luxembourg is a subsidiary of Truad Verwaltungs A.G.
Ιn October 2017 BOVAL S.A. participated in the share capital increase and the loan was paid.
| in € 000's | 31.03.2018 | 31.03.2017 |
|---|---|---|
| BOVAL S.A. : Participation in the share capital increase | ‐ ‐ | |
| Balance of loan with the BOVAL S.A. | ‐ | 30.000 |
| Loan interest to BOVAL S.A. | ‐ | 411 |
The Coca‐Cola HBC AG is a non alcoholic beverage company. Apart from the common share capital involvement of Truad Verwaltungs A.G. at 23% with Coca‐Cola HBC AG, Frigoglass is the major shareholder in Frigoglass Industries Ltd. and Frigoglass West Africa Ltd. based on Nigeria, with shareholding of 76,0%, where Coca‐Cola HBC AG also owns a 23,9% equity interest.
Based on a contract that has been renewed until 31.12.2020 the Coca‐Cola HBC AG purchases ICM's from the Frigoglass Group at yearly negotiated prices.
Truad Verwaltungs A.G. has also a 50,7% stake in A.G. Leventis Nigeria Plc.
Frigoglass Industries Nigeria is party to an agreement with A.G. Leventis Nigeria Plc. for the lease of office space in Lagos, Nigeria. The lease agreement is renewed annually.
The investments in subsidiaries are reported to Note 14.
a) The amounts of related party transactions and balances were:
| Consolidated | Parent Company | ||
|---|---|---|---|
| 31.03.2018 | 31.03.2017 | 31.03.2018 | |
| Sales of goods and services | 52.900 27.753 | 7.773 2.564 | |
| Purchases of goods and services | 68 84 | 17 22 | |
| Receivables / |
50.423 26.554 | 4.289 1.894 |
b) The intercompany transactions and balances of the Parent company with the Group's subsidiaries were:
| Sales of goods | 1.795 1.464 |
|---|---|
| Other services | 213 225 |
| Income from subsidiaries: Services fees and royalties on sales | 4.361 4.084 |
| Income from subsidiaries: commissions on sales | 112 114 |
| Purchases of goods / Expenses from subsidiaries | 8.465 2.486 |
| Interest expense | 506 2.078 |
| Receivables | 16.291 32.511 |
| Payables | 27.646 18.333 |
| Loans payables (note 13) | 34.106 95.323 |
c) The fees to members of the Board of Directors and Management compensation include wages, indemnities and other employee benefits and the amounts are:
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |
| Fees for Board of Directors | 84 43 | 84 43 | ||
| Management compensation | 516 605 | 429 517 |
Basic earnings per share are calculated by dividing the profit attributable to shareholders, by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company (treasury shares).
The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the decrease in the number of ordinary shares due to the reverse split adjusted retrospectively and the increase in the number of ordinary shares issued during the year due to the share capital increase with cash and the share capital increase with the conversion of bonds ( Note 15) , multiplied by a time‐weighting factor.
Given that the average share price for the year is not in excess of the available stock options' exercise price, there is no dilutive effect.
According IAS 33, the weighted average number of shares for 2017 and the comparative of 2016 has been adjusted to a 1/3 rate to reflect the effect of reverse split on earnings per share, which was decided at the 1st Repetitive General Meeting of shareholders on June 27, 2017.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| in 000's € | Three months ended | Three months ended | ||
| (apart from earning per share and number of shares) | 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 |
| Profit / attributable to the shareholders of the company |
||||
| (2.246) | (10.443) | (1.395) | (6.463) | |
| Profit / attributable to the shareholders of the company |
||||
| (1.425) (1.782) |
||||
| Profit / shareholders of the company |
(3.671) | (12.225) | (1.395) | (6.463) |
| Weighted average number of ordinary shares for the purposes of basic earnings per share Weighted average number of ordinary shares for the purpose |
355.437.751 | 16.864.610 | 355.437.751 | 16.864.610 |
| of diluted earnings per share | 355.437.751 | 16.864.610 | 355.437.751 | 16.864.610 |
| a) Basic: | ||||
| Profit / attributable to the shareholders of the company |
||||
| Profit / operations attributable to shareholders of the company |
(0,0063) | (0,6192) | (0,0039) | (0,3832) |
| (0,0040) | (0,1057) | |||
| Basic earnings / |
(0,0103) | (0,7249) | (0,0039) | (0,3832) |
| b) Diluted: | ||||
| Profit / attributable to the shareholders of the company |
||||
| (0,0063) | (0,6192) | (0,0039) | (0,3832) | |
| Profit / operations attributable to the shareholders of the company |
||||
| (0,0040) | (0,1057) | |||
| Diluted earnings / |
(0,0103) | (0,7249) | (0,0039) | (0,3832) |
The Parent company has contingent liabilities in respect of bank guarantees on behalf of its subsidiaries arising from the ordinary course of business.
Pledged fixed assets are described in detail in Note 13 ‐ Non current and current borrowings.
Based on the loan agreements each guarantor guarantees separately for the total amount of the loan up the amount of € 261m.. See Note 13 for the guarantors.
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.12.2017 | 31.03.2018 | 31.12.2017 | |
| Guarantees | 260.390 | 260.612 | 260.390 | 260.612 |
There are no significant litigations or arbitration disputes between judicial or administrative bodies that have a significant impact on the financial statements or the operation of the Company or the Group.
in € 000's
| Consolidated | ||||
|---|---|---|---|---|
| Quarter | 2018 | 2017 | ||
| Q1 | 105.664 | 100% | 88.214 | 23% |
| Q2 | 0% ‐ | 115.560 | 30% | |
| Q3 | ‐ | 0% | 76.045 | 20% |
| Q4 | 0% ‐ | 106.230 | 28% | |
| Total Year | 105.664 | 100% | 386.049 | 100% |
As shown above the Group's operations exhibit seasonality.
On 2 April 2018 the Company announced to sell the entire share capital of its wholly owned glass container subsidiary Frigoglass Jebel Ali FZE to ATG Investments Limited. The total cash consideration of the transaction amounts to US \$ 12,5m., on a debt‐free basis. US \$ 5m. will be payable on completion of the transaction, with a further US \$ 7,5m. in 4 installments over 4 years following completion of the transaction. The above payments are subject to working capital and other customary adjustments.
There are no other post‐balance events which are likely to affect the financial statements or the operations of the Group and the Parent company apart from the ones mentioned above.
The average number of personnel per operation for the Group & for the Parent company are listed below:
| Consolidated | ||
|---|---|---|
| Operations | 31.03.2018 | 31.03.2017 |
| ICM Operations | 3.987 | 3.655 |
| Glass Operations | 1.412 | 1.383 |
| Total | 5.399 | 5.038 |
| Discontinued operations | 324 | 328 |
| Parent Company | ||
| 31.03.2018 | 31.03.2017 | |
| Average number of personnel | 206 | 205 |
in € 000's
| Consolidated | Parent Company | |||
|---|---|---|---|---|
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |
| Other operating income | ||||
| Income from subsidiaries: Services fees & royalties on sales |
‐ | ‐ | 4.361 | 4.084 |
| Income from subsidiaries: Commission on sales |
‐ | ‐ | 112 | 114 |
| Revenues from insurance claims | ‐ | 840 | ‐ | 840 |
| Revenues from scraps sales | 204 | 290 | ‐ | ‐ |
| Other charges to customers | ‐ | 571 | ‐ | ‐ |
| Other | 449 | 438 | ‐ | ‐ |
| Total: Other operating income | 653 | 2.139 | 4.473 | 5.038 |
| Total: Other gains/ |
28 | (219) | 8 | 11 |
|---|---|---|---|---|
| Other | ‐ | (219) | 8 | 11 |
| Profit/ |
28 | ‐ | ‐ | ‐ |
| Continuing operations | Consolidated Three months ended |
Parent Company | ||||
|---|---|---|---|---|---|---|
| Three months ended | ||||||
| 31.03.2018 | 31.03.2017 | 31.03.2018 | 31.03.2017 | |||
| Profit / |
3.047 | (6.832) | (1.251) | (6.278) | ||
| plus: Depreciation | 4.874 | 5.484 | 884 | 863 | ||
| plus: Impairment of tangible assets & goodwill | ‐ | ‐ | ‐ | ‐ | ||
| plus: Restructuring costs | 275 | 3.748 | ‐ | 3.748 | ||
| plus: Finance |
4.933 | 7.122 | 628 | 2.174 | ||
| EBITDA | 13.129 | 9.522 | 261 | 507 |
* Finance
| FRIGOGLASS S.A.I.C. Notes to the Interim Condensed Financial Statements in € 000's |
|||
|---|---|---|---|
| Note 28 ‐ Restructuring gains/ |
|||
| Consolidated | Parent Company | ||
| 31.03.2018 | |||
| Restructuring activities of ICM Operations: | |||
| (275) | ‐ | ||
| Restructuring gains/ |
(275) | ‐ |
The Group incurred during 2018 restructuring costs of €0.3 million related to the termination of one production shift in Indonesia.
| Consolidated | Parent Company | ||
|---|---|---|---|
| Capital restructuring expenses: | 31.03.2017 | ||
| Capital restructuring expenses ‐ Consulting fees | (3.748) | (3.748) | |
| Restructuring gains/ |
(3.748) | (3.748) |
The Group has completed the process of its capital restructuring in October 2017.
The Company announced on 2 April 2018 that it has entered into an agreement to sell the entire share capital of its wholly owned glass container subsidiary Frigoglass Jebel Ali FZE to ATG Investments Limited. The total cash consideration of the transaction amounts to US \$ 12,5m., on a debt‐free basis. US \$ 5m. will be payable on completion of the transaction, with a further US \$ 7,5m. in 4 instalments over 4 years following completion of the transaction. The above payments are subject to working capital and other customary adjustments.
The decision to sell this operation was taken at the Board of Directors meeting held on 2 March 2018.
Based on the current course of the transaction, management concluded that the provisions of IFRS 5 were in effect at the end of the year ended December 31, 2017 because management has obtained the necessary approvals for the sale of that subsidiary and has been identified a reasonable cash consideration for the sale and the aforementioned activities have been presented as assets held for sale.
Assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Based on the fair value less costs to sell a loss of € 11,353 m. has been charged in discontinued operations.
In the context of this sale the Group will leave two geographical areas of Glass Industry (United Arab Emirates, Asia ‐ Oceania) and for this reason it has been portrayed as discontinued operations.
| B) Income statement | Three months ended | |
|---|---|---|
| 31.03.2018 | 31.03.2017 | |
| Net sales revenue | 5.419 | 6.074 |
| Cost of goods sold | (6.385) (7.256) |
|
| Gross profit | (966) | (1.182) |
| Administrative expenses | (45) | (58) |
| Selling, distribution & marketing expenses | (220) | (223) |
| Other operating income | 49 | 52 |
| Operating Profit / |
(1.182) | (1.411) |
| Finance |
(243) | (371) |
| Profit / |
(1.425) | (1.782) |
| Attributable to: Non‐controlling interests |
‐ | ‐ |
| Shareholders | (1.425) | (1.782) |
| Depreciation | 2 | 1.334 |
| EBITDA | (1.180) (77) |
| Note 29 Discontinued operations (continued) | ||
|---|---|---|
| Three months ended | ||
| 31.03.2018 | 31.03.2017 | |
| C) Statement of comprehensive income | ||
| Profit / |
(1.425) (1.782) | |
| Other Comprehensive Income: | ||
| Items that will be reclassified to Profit & Loss : | ||
| Currency translation differences | 290 | 561 |
| Other comprehensive income / |
290 | 561 |
| Total comprehensive income / |
(1.135) | (1.221) |
| Attributable to: | ||
| ‐ Non‐controlling interests | ‐ | ‐ |
| ‐ Shareholders | (1.135) (1.221) |
Assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Based on the fair value less costs to sell a loss of € 11,3 m. has been charged in discontinued operations.
| 31.03.2018 | 31.12.2017 | |
|---|---|---|
| Property, plant & equipment | ‐ | 38 |
| Intangible assets | 7 | 16 |
| Inventories | 11.508 | 12.264 |
| Trade receivables | 3.955 | 3.139 |
| Other receivables | 1.455 | 1.703 |
| Cash & cash equivalents | 1.167 | 415 |
| Assets held for sale | 18.092 | 17.575 |
| Retirement benefit obligations | 1.752 | 1.760 |
| Trade payables | 6.926 | 7.073 |
| Other payables | 1.094 | 1.140 |
| Liabilities associated with assets held for sale | 9.772 | 9.973 |
| Net assets classified as held for sale | 8.320 | 7.602 |
| Three months ended | ||
|---|---|---|
| E) Cash flow statement | 31.03.2018 | 31.03.2017 |
| Profit / |
(1.425) | (1.781) |
| (a) Cash flows from operating activities | (1.140) | (90) |
| (b) Net cash generated from investing activities | (82) | (18) |
| (c) Net cash generated from intergroup balances | 1.989 | (45) |
| Net increase / (decrease) in cash and cash equivalents | ||
| (a) + (b) + (c) | 767 | (153) |
| Cash and cash equivalents at the beginning of the year | 415 | 871 |
| Effects of changes in exchange rate | (15) (10) |
|
| Cash and cash equivalents at the end of the year | 1.167 | 708 |
The Group uses certain Alternative Performance Measures ("APMs") in making financial, operating and planning decisions as well as in evaluating and reporting its performance. These APMs provide additional insights and understanding to the Group's operating and financial performance, financial condition and cash flow. The APMs should be read in conjunction with and do not replace by any means the directly reconcilable IFRS line items.
In discussing the performance of the Group, certain measures are used, which are calculated by deducting from the directly reconcilable amounts of the Financial Statements the impact of restructuring costs. In this context, we are focusing on the APMs from Continued Operations, while we also present Discontinued Operations for reconciliation purposes.
Restructuring costs comprise costs arising from significant changes in the way the Group conducts business, such as the discontinuation of manufacturing operations, as well as expenses related to the Group's capital restructuring, debt write‐off and gains from the conversion of the convertible bonds. These costs are included in the Company's/Group's Income Statement, while the payment of these expenses are included in the Cash Flow Statement. However, they are excluded from the results in order for the user to obtain a better understanding of the Group's operating and financial performance achieved from ongoing activity.
EBITDA is calculated by adding back to profit before income tax, the depreciation, the impairment of property, plant and equipment and intangible assets and net finance cost/income. EBITDA margin (%) is defined as EBITDA divided by Net Sales Revenue.
| (in € 000's) | 1Q18 | 1Q17 |
|---|---|---|
| Profit / (Loss) before income tax | 3,047 | ‐6,832 |
| Depreciation | 4,874 | 5,484 |
| Restructuring costs | 275 | 3,748 |
| Finance costs | 4,933 | 7,122 |
| EBITDA | 13,129 | 9,522 |
| Net sales revenue | 105,664 | 88,214 |
| EBITDA margin, % | 12.4% | 10.8% |
EBITDA is intended to provide useful information to analyze the Group's operating performance.
Net Trade Working Capital is calculated by subtracting Trade Payables from the sum of Inventories and Trade Receivables. The Group presents Net Trade Working Capital because it believes the measure assists users of the financial statements to better understand its short term liquidity and efficiency.
| 31 March | 31 December | 31 March | |
|---|---|---|---|
| (in € 000's) | 2018 | 2017 | 2017 |
| Continuing operations |
Continuing operations |
Continuing operations |
|
| Trade debtors | 97,686 | 84,824 | 83,763 |
| Inventories | 92,309 | 89,075 | 87,386 |
| Trade creditors | 65,050 | 60,985 | 75,243 |
| Net Trade Working Capital | 124,945 | 112,914 | 95,906 |
Free cash flow is an APM used by the Group and defined as cash generated by operating activities after cash generated from investing activities. Free cash flow is intended to measure the cash generation from the Group's business, based on operating activities, including the efficient use of working capital and taking into account the purchases of property, plant and equipment and intangible assets. The Group presents free cash flow because it believes the measure assists users of the financial statements in understanding the Group's cash generating performance as well as availability for interest payment, dividend distribution and own retention.
| (in € 000's) | 1Q18 | ||
|---|---|---|---|
| Continuing operations |
Discontinued operations |
Reported | |
| Net cash from operating activities | 1,473 | ‐1,140 | 333 |
| Net cash from investing activities | ‐3,685 | ‐82 | ‐3,767 |
| Free Cash Flow | ‐2,212 | ‐1,222 | ‐3,434 |
| (in € 000's) | 1Q17 | ||
|---|---|---|---|
| Continuing | Discontinued | ||
| operations | operations | Reported | |
| Net cash from operating activities | ‐263 | ‐90 | ‐353 |
| Net cash from investing activities | ‐1,795 | ‐18 | ‐1,813 |
| Free Cash Flow | ‐2,058 | ‐108 | ‐2,166 |
Adjusted Free Cash Flow facilitates comparability of Cash Flow generation with other companies, as well as enhance the comparability of information between reporting periods. Adjusted Free Cash Flow is calculated by excluding from the Free Cash Flow (defined above) the restructuring related cost and proceeds from disposal of property, plant and equipment (PPE).
| (in € 000's) | 1Q18 | ||
|---|---|---|---|
| Continuing operations |
Discontinued operations |
Reported | |
| Free Cash Flow | ‐2,212 | ‐1,222 | ‐3,434 |
| Restructuring Costs | 435 | 0 | 435 |
| Proceeds from disposal of PPE | ‐49 | 0 | ‐49 |
| Adjusted Free Cash Flow | ‐1,826 | ‐1,222 | ‐3,048 |
| (in € 000's) | 1Q17 | ||
|---|---|---|---|
| Continuing operations |
Discontinued operations |
Reported | |
| Free Cash Flow | ‐2,058 | ‐108 | ‐2,166 |
| Restructuring Costs | 1,420 | 0 | 1,420 |
| Proceeds from disposal of PPE | 0 | 0 | 0 |
| Adjusted Free Cash Flow | ‐638 | ‐108 | ‐746 |
Net debt is an APM used by Management to evaluate the Group's capital structure and leverage. Net debt is defined as long‐term borrowings plus short‐term borrowings less cash and cash equivalents as illustrated below.
| (in € 000's) | 31 March 2018 |
31 December 2017 |
|---|---|---|
| Continuing operations |
Continuing operations |
|
| Long‐term borrowings | 237,893 | 233,414 |
| Short‐term borrowings | 45,820 | 42,441 |
| Cash and cash equivalents | 53,918 | 53,130 |
| Net Debt | 229,795 | 222,725 |
Capital expenditure is defined as the purchases of property, plant and equipment and intangible assets. The Group uses capital expenditure as an APM to ensure that capital spending is in line with its overall strategy for the use of cash.
| (in € 000's) | 1Q18 | |||
|---|---|---|---|---|
| Continuing operations |
Discontinued operations |
Reported | ||
| Purchase of PPE | ‐3,206 | ‐82 | ‐3,288 | |
| Purchase of intangible assets | ‐528 | 0 | ‐528 | |
| Capital expenditure | ‐3,734 | ‐82 | ‐3,816 |
| (in € 000's) | 1Q17 | ||
|---|---|---|---|
| Continuing operations |
Discontinued operations |
Reported | |
| Purchase of PPE | ‐1,365 | ‐18 | ‐1,383 |
| Purchase of intangible assets | ‐430 | 0 | ‐430 |
| Capital expenditure | ‐1,795 | ‐18 | ‐1,813 |
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