Earnings Release • Mar 1, 2024
Earnings Release
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Waregem, 1 March 2024, 7:00 am CET Regulated information For immediate publication
In Bentley Mills, the full year Revenue for 2023 decreased by 9.5% to €160.8m (€177.8m 2022). Sales volumes were lower compared to a very strong year 2022 following a general market demand softening, while cost inflation could be passed through with higher average sales price levels. Unfavourable FX translation also contributed to the lower reported Revenue.
Full year Adjusted EBITDA for 2023 of €30.6m was down by 7.8% (€33.2m 2022) with an Adjusted EBITDA margin of 19.0% (18.7% in 2022). At constant FX, the Full Year Adjusted EBTDA for 2023 was down by 5.0%. The negative impact of the lower volumes was partly offset by higher unitary margins and lower fixed expenses.
Fourth quarter Revenue for 2023 of €37.5m decreased by 18.0% versus 2022, reflecting a further softening of overall market demand. Nevertheless, Adjusted EBITDA margin for Q4 2023 was increased to 18.4% in Q4 2022 mainly due to higher unitary margins and reduced fixed costs.
In Europe, the full year Revenue for 2023 decreased by 12.2% to €140.1m (€159.6m 2022). The lower revenue is driven by the weak market demand while average sales prices are materially higher after the implementation of several price increase waves in the course of 2022 to compensate for the strong cost inflation. Full year Adjusted EBITDA was €3.0m (€2.3m 2022) with an Adjusted EBITDA margin of 2.2% (vs. 1.4% in 2022). This performance is driven by the lower volumes in both the Commercial and Residential business lines throughout the year. Improved raw material and production costs as well as reduced fixed expenses brought positive effects, but only benefiting results in H2 2023.
Fourth quarter Revenue for 2023 was €34.2m, which represents a YoY decrease of -5.9% (Q4 2022 Revenue of €36.3m). The market demand weakness continued driving lower volumes.
BELYSSE
BELYSSE GROUP NV / Franklin Rooseveltlaan 172-174, 8790 Waregem
1 As defined in the SSN facility agreements, excluding IFRS16 impact but including sale and leasebacks 2 Calculation based upon assumption of refinancing of SSN '24 notes by new credit facility at 31 December 2023
ln spite of this, Adjusted EBITDA improved to €3.5m (10.2% margin) from €0.1m in Q4 2022, driven by the lower raw materials and energy prices in the costs of goods sold in combination with the positive effects of the executed fixed expense program.
" In 2023, Bentley Mills, our US division, was able to successfully complete its yarn transition project at the end of Q1, but was recently confronted with a slowdown of market demand influenced by high inflation and increased interest rates. Thanks to its unique positioning in the soft flooring market and a flexible cost structure, the company was able to maintain its EBITDA margin.
Europe faced a pronounced slowdown in market demand in both Residential and Commercial segments throughout the year. The beneficial effects of actions taken since last year within sourcing and supply chain and the general normalization of raw material and energy prices, became only visible in our accounts at the end of the third quarter, due to delays caused by the FIFO accounting practice in combination with soft volumes. To compensate for the lower volumes, a fixed expense program was executed in July with savings seen in H2 2023. Towards the end of the year, all actions taken helped the European results to start recovering and reporting a double digit Adjusted EBITDA margin in Q4 2023.
In December, Belysse Group signed a €120m (equivalent) credit facility to repay the existing senior secured notes due in 2024. The repayment of these notes took place on 5 February 2024 which provides the company with sufficient time to recover from the weak market environment.
l would like to thank all the Belysse team members as they kept their enthusiasm and their professionalism intact in this challenging market environment."
| (€ million, unless other wise | FY | FY | o/w | 0/W | |
|---|---|---|---|---|---|
| ment i oned) | 2023 | 2022 | % Change | or gani c | FX |
| Eur ope | 1 40. 1 | 159.6 | (12,2) % | ||
| വട | 1 60. 8 | 177.8 | 9.5) % | ||
| Consol i dated Revenue | 300. 9 | 337.4 | (10,8) % | (9.6) % | (1.2)% |
| Eur ope | 3, 0 | 2.3 | 34. 4% | ||
| വട | 30, 6 | 33, 2 | 7.8) % | ||
| Consol i dated Adjusted EBI TDA | 33, 7 | 35, 5 | (5,1)% | (2,4) % | (2,7)% |
| Eur ope | 2.2% | 1.4% | |||
| വട | 19.0% | 18.7% | |||
| Consolidated Adjusted EBI TDA Margi n | 11,2% | 10, 5% |
| (€ million, unless other wise ment i oned) |
04 2023 |
04 2022 |
% Change | 0/W or gani c |
o/w FX |
|---|---|---|---|---|---|
| Eur ope | 34. 2 | 36, 3 | 5, 9) % | ||
| വട | 37, 5 | 45, 7 | (18.0) % | ||
| Consol i dated Revenue | 71,7 | 82, 1 | (12,7)% | (10,2) % | (2,5) % |
| Eur ope | 3.5 | 0.1 | 2604. 4% | ||
| വട | 6.9 | 7.5 | (7.7) % | ||
| Consol i dated Adjusted EBI TDA | 10.4 | 7.6 | 36. 3% | 41.3% | (5.0) % |
| Eur ope | 10. 2% | 0, 4% | |||
| ાંટે | 18. 4% | 6.4% | |||
| Consolidated Adjusted EBI TDA Margi n | 14.5% | 9.3% |
The net impact of non-recurring items on 2023 net result was negative €3.1m (€0.09 per share), as compared to negative €1.4m (€0.04 per share) in 2022. The expense in the current period is mainly driven by the one-off cost for the fixed expense reduction programme executed in Europe and strategic advisory fees
The net financing cost of €18.4m (€19.7m2022), primarily represents the interest expense on external borrowings. This decrease is mainly driven by the lower financing cost of the debt repayments after the divestment of Rugs and Residential PP in April 2022.
The Group reported a tax expense for 2023 of €3.4m (€9.0m 2022) based on an overall loss before tax of €7.7m (loss before tax of €4.3m for the Continuing Operations for 2022). This amount results from the taxing of the profits at our US division and the fact that no deferred tax assets are recognized on the losses in Europe. The difference in tax expense year over year is mainly linked to the de-recognition of deferred tax assets in Europe, triggered by future prospects and a change in tax legislation.
Loss per share of €0.31 in 2023 compared to loss per share of €0.37 in 2022.
Our focus remains on deleveraging and investing into the business further, the Board will not propose a dividend for the year.
The following alternative performance measures (non-IFRS) have been used as management believes that they are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. The alternative performance measures may not be comparable to similarly-titled measures of other companies, have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results, our performance, or our liquidity under IFRS.
Organic Growth is defined as growth excluding (i) FX impacts, which comprise the translation of key foreign entities and (ii) M&A impacts.
Adjusted EBITDA is defined as operating profit / (loss) adjusted for (i) the impact of the purchase price allocation mainly on change in inventories, (ii) gains on asset disposals, (iii) integration and restructuring expenses, (iv) depreciation / amortization and (v) impairment and write-offs.
Adjusted EBITDA margin is defined as the Adjusted EBITDA as a percentage of revenue.
Gross Debt is defined as (i) Senior Secured Notes adjusted for the financing fees included in the carrying amount and (ii) Bank and other borrowings adjusted for capitalized financing fees.
Net Debtis defined as (i) Senior Secured Notes adjusted for the financing fees included in the carrying amount, (ii) Bank and other borrowings adjusted for capitalized financing fees (iii) cash and cash equivalents.
Leverage is defined as the ratio of Net Debt to Adjusted EBITDA (both excluding IFRS 16 impacts as per financing documentation, except for sale and leaseback transactions).
BELYSSE GROUP NV / Franklin Rooseveltlaan 172-174, 8790 Waregem
| December 31, 2023 | December 31, 2022 | |||||
|---|---|---|---|---|---|---|
| (€ million) | Non Current | Current | Total | Non Current | Current | Total |
| Senior Secured Notes | 1.8 | 135.2 | 137.0 | 130.7 | 1.6 | 132.4 |
| Bank and other borrowings for continued operations | 14.4 | 2.1 | 16.5 | 16.0 | 1.9 | 17.9 |
| Less: Cash and Cash equivalents for continued operations | (35.8) | (35.8) | (38.5) | (38.5) | ||
| Adjusted for capitalized financing fees | 0.2 | 0.2 | 0.4 | 2.2 | 1.9 | 4.1 |
| Net Debt (excl. IFRS16 Impact) | 16.5 | 101.7 | 118.2 | 148.9 | (33.1) | 115.8 |
| Adjusted EBITDA (excl. IFRS16) for continued operations | 26.2 | 28.6 | ||||
| Leverage | 4.5x | 4.0x | ||||
| IFRS16 impact continued operations | 20.4 | 6.8 | 27.1 | 25.6 | 6.9 | 32.4 |
| Reported Net Debt | 36.9 | 108.5 | 145.3 | 174.5 | (26.2) | 148.3 |
10 Leverage excluding IFRS16 impact but including sale and leaseback transactions
"The statutory auditor, PwC Bedrijfsrevisoren BV / Reviseurs d'Entreprises SRL, represented by Wouter Coppens*, has confirmed that the audit, which is substantially complete, has not to date revealed any material misstatement in the draft consolidated accounts, and that the accounting data reported in the press release is consistent, in all material respects, with the draft accounts from which it has been derived."
The statutory auditor PwC Bedrijfsrevisoren BV / Reviseurs d'Entreprises SRL
Represented by
Wouter Coppens* Bedrijfsrevisor/Réviseur d'Entreprises
*: Acting on behalf of Wouter Coppens BV
| For the year ended December 31 |
||
|---|---|---|
| (€ thousands) | 2023 | 2072 |
| I. CONSOLIDATED INCOME STATEMENT | ||
| Continuing Operations | ||
| Revenue | 300-918 | 337.430 |
| Raw material expenses | (124.174) | (162.318) |
| Changes in inventories | (11.018) | 10.434 |
| Employee benefit expenses | (76.021) | (78.049) |
| Other income | 929 | 316 |
| Other expenses | (56.956) | (72.308) |
| Depreciation / amortization | (19.890) | (18.688) |
| Adjusted Operating Profit | 13.788 | 16.818 |
| Integration and restructuring expenses | (3.069) | (1.445) |
| Operating profit / (loss) | 10.718 | 15.373 |
| Finance income | 367 | |
| Finance expenses | (18.795) | (19.650) |
| Net finance expenses | (18.428) | (19.650) |
| Profit / (loss) before income taxes | (7.710) | (4.277) |
| Income tax benefit / (expense) | (3.386) | (9.010) |
| Profit / (loss) for the period from Continuing Operations | (11.095) | (13.287) |
| Profit / (loss) for the period from Discontinued Operations | (54.459) | |
| Profit / (loss) for the period | (11.095) | (67.746) |
Items in other comprehensive income that may be subsequently reclassified to P&L
| Exchange differences on translating foreign operations | (4.529) | 10.214 |
|---|---|---|
| Changes in fair value of hedging instruments qualifying for cash flow hedge accou | 152 | |
| ltems in other comprehensive income that will not be reclassified to P&L | ||
| Changes in deferred taxes | (40) | 268 |
| Changes in employee defined benefit obligations | (13) | లిక్ |
| Other comprehensive income for the period continuining operations, net | (4.583) | 10.702 |
| Total comprehensive income from Discontinued Operations | 54.456 | |
| Total comprehensive income for the period | (15.678) | (2.587) |
| For the year ended | ||
|---|---|---|
| December 31 | ||
| ( thousands) | 2023 | 2022 |
| Property, plant and equipment | 100,795 | 108,178 |
| Of which IFRS 16 related right-of-use assets (excluding sales-and-leaseback) | 23,533 | 29,388 |
| Land and buildings | 44,963 | 51,245 |
| Plant and machinery | 49,742 | 50,025 |
| Other fixtures and fittings, tools and equipment | 6,090 | 6,908 |
| Goodwill | 103,046 | 105,662 |
| Intangible assets | 5,212 | 5,432 |
| Deferred income tax asset | 426 | 829 |
| Trade and other receivables | ર્ફ્રિસ | 599 |
| Total non-current assets | 210,066 | 220,700 |
| Inventories | 52,257 | 76,177 |
| Trade and other receivables | 28,377 | 24,994 |
| Current income tax assets | 1,045 | |
| Cash and cash equivalents | 35,812 | 38,488 |
| Total current assets | 117,491 | 139,660 |
| Total assets | 327,557 | 360,359 |
| Share capital | 252,950 | 252,950 |
| Share premium | 65,660 | 65,660 |
| Other comprehensive income | 1,283 | 5,866 |
| Retained earnings | (202,298) | (191,208) |
| Other reserves | (39,876) | (39,876) |
| Total equity | 77,720 | 93,392 |
| Senior Secured Notes | 1,839 | 130,745 |
| Bank and Other Borrowings | 34,778 | 41,590 |
| Of which IFRS 16 related lease liabilities (excluding sales-and-leaseback) | 20,375 | 25,577 |
| Deferred income tax liabilities | 5,814 | 6,355 |
| Provisions for other liabilities and charges | 2,229 | 2,176 |
| Employee benefit obligations | 159 | 150 |
| Total non-current liabilities | 44,818 | 181,015 |
| Senior Secured Notes | 135,203 | 1,611 |
| Bank and Other Borrowings | 8,875 | 8,760 |
| Of which IFRS 16 related lease liabilities (excluding sales-and-leaseback) | 6,757 | 6,872 |
| Derivative financial instruments | ||
| Other payrolland social related payables | 14,444 | 17,161 |
| Trade and other payables | 46,462 | 57,201 |
| Income tax liabilities | 36 | 1,219 |
| Total current liabilities | 205,019 | 85,952 |
| Total liabilities | 249,837 | 266,967 |
| Total equity and liabilities | 327,557 | 360,359 |
BELYSSE GROUP NV / Franklin Rooseveltlaan172-174, 8790 Waregem
| For the year ended |
|||
|---|---|---|---|
| ( thousands) | 2023 | 2022 | |
| I. CASH FLOW FROM OPERATING ACTIVITIES FOR CONTINUING OPERATIONS | |||
| Net profit / (loss) from the period for Continuing Operations | (11,095) | (13,287) | |
| Adjustments for: Income tax expense/(income) |
3,386 | ||
| Finance income | (367) | 9,010 | |
| Financial expense | 18,795 | 19,650 | |
| Depreciation, amortisation | 19,890 | 18,688 | |
| (Gain) / loss on disposal of non-current assets | (2) | ||
| Movement in provisions | (1,999) | 3,276 | |
| Expense recognised in respect of equity-settled share-based payments | 6 | (61) | |
| Fair value of derivatives | 125 | ||
| Cash generated before changes in working capital | 28,615 | 37,399 | |
| Changes in working capital: | |||
| Inventories | 24,459 | (14,507) | |
| Trade receivables | 979 | 1,156 | |
| Trade payables | (9,124) | 10,534 | |
| Other working capital | (8,476) | (1,061) | |
| Cash generated after changes in working capital | 36,452 | 33,522 | |
| Net income tax (paid) | (5,400) | (5,641) | |
| Net cash generated / (used) by operating activities | 31,053 | 27,880 | |
| II. CASH FLOW FROM INVESTING ACTIVITIES FOR CONTINUING OPERATIONS | |||
| Acquisition & disposal of property, plant and equipment | (10,458) | (11,778) | |
| Acquisition of intangibles | (1,332) | (128) | |
| Proceeds from non-current assets | 163,700 | ||
| Net cash used by investing activities | (11,790) | 151,794 | |
| III. CASH FLOW FROM FINANCING ACTIVITIES FOR CONTINUING OPERATIONS | |||
| Interest and other finance charges paid, net | (13,565) | (25,918) | |
| Proceeds from borrowings with third parties | 130,000 | ||
| Repayments of Senior Secured Notes | (232,818) | ||
| Repayments of borrowings with third parties | (7,892) | (60,665) | |
| Net cash generated / (used) by financing activities | (21,457) | (189,402) | |
| NET INCREASE/ (DECREASE) IN CASH AND BANK OVERDRAFTS | (2,195) | (9,728) | |
| Cash, cash equivalents and bank overdrafts at the beginning of the period for Continuing Operations |
38,488 | 51,394 | |
| Exchange gains/(losses) on cash and cash equivalents | (482) | 903 | |
| Financing and cash transactions between Continuing and Discontinued Operations | (4,081) | ||
| Cash, cash equivalents and bank overdrafts at the end of the period for Continuing Operations |
35,812 | 38,488 |
BELYSSE GROUP NV / Franklin Rooseveltlaan172-174, 8790 Waregem
| 1 | ||||
|---|---|---|---|---|
(1) Change in scope reflects the transfer of the elements of comprehensive income from discontinued operations to retained earnings of the group at completion date of the divestment w ithout currency translation adjustments w hich are recycled over the income statement
| (€ thousands) | Share capital |
Share premium |
Other comprehensive income |
Retained earnings |
Other reserves |
Total continuing operations |
Elements of comprehensive income of Discontinued Operations |
Total equity |
|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2022 | 252.950 | 65.660 | 5.866 | (191.208) | (39.876) | 93.392 | 93.392 | |
| Profit / (loss) for the period | (11.0995) | (11.095) | (11.095) | |||||
| Other comprehensive income | ||||||||
| Exchange differences on translating foreign operations | (4.529) | (4.529) | (4.529) | |||||
| Cumulative changes in deferred taxes | (40) | (40) | (40) | |||||
| Cumulative changes in employee defined benefit obligations | ૫૩) | (13) | (13) | |||||
| Total comprehensive income for the period | - | - | (4.583) | (11.095) | (15.678) | (15.678) | ||
| Equity-settled share-based payment plans | 0 | 0 | 6 | |||||
| Balance at 31 December 2023 | 252.950 | 65.660 | 1.283 | (202.298) | (39.876) | 77.720 | 77.720 |
The FY 2023 Results will be presented on 1 March 2024 at 10.00 am CET via a webcast, by the Chairman of the Board Cyrille Ragoucy, CEO James Neuling and CFO Andy Rogiest. The results presentation will be available on www.belysse.com/investors.
www.belysse.com
We kindly refer you to our website www.belysse.com/en/investors/company-results where the FY 2023 Results Presentation is available with more detailed slides on our Results.
Belysse manufactures sustainable textile floor coverings for commercial and residential applications and commercialises its products focusing 90% on North-America and Europe under the premium brands Bentley (US), modulyss, arc edition and ITC (Europe). Headquartered in Waregem (Belgium), Belysse employs nearly 1100 people and operates three manufacturing sites in Belgium (Tielt and Zele) and the United States (Los Angeles). Belysse realised sales of 301 million euros in 2023 and is listed on Euronext. (Euronext: BELYS)
Certain financial data included in this press release are "non-IFRS financial measures." These non-IFRS financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with International Financial Reporting Standards. Although Belysse Group nv believes these non-IFRS financial measures provide useful information to users in measuring the financial performance and condition of its business, users are cautioned not to place undue reliance on any non-IFRS financial measures or any ratios included in this presentation. This press release may include projections and other "forward-looking" statements. Any such projections or statements reflect the current views of the issuer about further events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from these projections. Belysse Group nv expressly disclaims any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law. The fact that the current press release includes certain forward-looking statements does not imply an obligation of or constitute a guarantee by Belysse Group nv to include such forward-looking statements in future press releases or communication. Rounding adjustments have been made in calculating some of the financial information included in this press release. As a result, figures shown as totals may not be exact arithmetic aggregations of the figures that precede them.
Belysse Group nv intends to publish a trading update for Q1 2024 in May 2024.
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