Earnings Release • Oct 24, 2017
Earnings Release
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Levallois, October 24, 2017
Over the first nine months of the year:
For the 3rd quarter 2017:
For 2017 as a whole:
Strong outperformance in comparison with worldwide automotive production
Investor Day held on December 13, 2017 in Levallois (Paris)
| 9 months In €M, by segment |
Change at | |||
|---|---|---|---|---|
| 2016 | 2017 | Change | constant scope and exchange rates3 |
|
| Automotive | 4,613 | 5,656 | +22.6% | +11.8% |
| Environment | 277 | 246 | -11.3% | +4.1% |
| Economic revenue1 | 4,889 | 5,901 | +20.7% | +11.4% |
| Joint ventures | 776 | 913 | +17.6% | +18.1% |
| Consolidated revenue2 | 4,114 | 4,989 | +21.3% | +10.1% |
Over the first nine months of the year 2017, economic revenue1 of Plastic Omnium totaled €5,901.4 million, an increase of 20.7% in reported data, in comparison with the first 9 months of the year 2016. Growth was 11.4% at constant scope and exchange rates (-€24.3 million due to currency effects and +€654.3 million due to scope3).
Consolidated revenue2, excluding joint ventures, amounts to €4,988.7 million. It rose by 21.3% based on published figures compared to the first 9 months of 2016 and by 10.1% at constant scope and exchange rates.
This sharp increase is attributable to:
Over the first 9 months of the year 2017, Automotive revenue1 for Plastic Omnium was €5,656.0 million. It grew by 22.6%, and 11.8%, at constant scope and exchange rates3, in a context of worldwide automotive production that was up by 2.7% (source: IHS October 2017), thus representing market outperformance of 9.1 points. This shows the solidity of the order book, with the confirmation of gains in market shares, the ramp-up of new capacities (Mexico, England), and the success of the portfolio of innovative products.
On September 20, Plastic Omnium announced its plan to sell its Environment division.
Following the disposal of non-core activities in mid-2016, the Environment division's activity is now fully focused on products and services aimed at optimizing waste management for local authorities and industry. Business activity rose by 4.1% at constant scope and exchange rates.
In the 3rd quarter of 2017, economic revenue1 of Plastic Omnium totaled €1,839.2 million, an increase of 7.6%, in reported data, compared to the 3rd quarter of 2016, and by 9.6%, at constant scope and exchange rates. In the 3rd quarter, exchange rates had a negative impact of €51.7 million on growth, mainly due to the fall in the value of the dollar over the period.
Consolidated revenue2 in the 3rd quarter of 2017 came to €1,533.8 million, an increase of 5.5% compared to the 3rd quarter of 2016 (+7.8% at constant scope and exchange rates).
| 9 months | Automotive change | ||||
|---|---|---|---|---|---|
| In €M and as a % of revenue, by region Automotive and Environment |
2016 | 2017 | Change | Change at constant scope and exchange rates3 |
at constant scope and exchange rates3 |
| Europe | 2,648 | 3,198 | +20.8% | +4.4% | +4.4% |
| 54% | 54% | ||||
| North America | 1,300 | 1,539 | +18.4% | +18.4% | +18.2% |
| 27% | 26% | ||||
| South America | 131 | 205 | +57.3% | +32.1% | +36.1% |
| 3% | 4% | ||||
| Asia, including China | 811 | 959 | +18.3% | +19.1% | +19.3% |
| 17% | 16% | ||||
| Economic revenue1 | 4,889 | 5,901 | +20.7% | +11.4% | +11.8% |
| 100% | 100% | ||||
| Joint ventures | 776 | 913 | +17.6% | +18.1% | +18.1% |
| Consolidated revenue2 | 4,114 | 4,989 | +21.3% | +10.1% | +10.5% |
Activity in Europe, which accounts for 53% of total automotive revenue1, increased by 24.3%. It benefited from the acquisition of external systems, a mainly European business. At constant scope and exchange rates, the activity posted an increase of 4.4% compared to a 2.4% rise in automotive production.
Business in North America grew by 18.2% at constant scope and exchange rates over the first 9 months of the year, outperforming automotive production by 22.6 points. The business benefited from the new capacities that have come on stream over the past 2 years (2 plants commissioned in the United States in 2015, followed by 3 plants in Mexico in 2016 and 2017), and the expected ramp-up of SCR systems to reduce diesel vehicle emissions in the United States.
Business in Asia, including China, increased by 19.3%, at constant scope and exchange rates. In China, which represents revenue1 of €509 million, or 9% of total revenue, the increase in business at constant exchange rates, came to 24.4% over the first nine months of the year, for a 3.4% increase in automotive production. The Group benefited from market share gains and the high investments made over the last 3 years to develop the industrial footprint.
The external systems business acquired in July 2016 for a final amount of €402 million has now been completed. Its industrial rationalization is continuing at a sustained pace, with the recording of the first significant impacts on its operational profitability.
SCR systems for reducing diesel vehicle emissions recorded further growth worldwide with an increase of 46% over the first 9 months of the year to reach revenue of €293 million. At present, 19 programs are under production and 16 are under development for 13 carmakers.
The range of tailgate and spoiler products has been enhanced. Today, 53 programs are under production while 33 are under development.
Production of the first pressurized tanks for plug-in hybrid vehicles started in December 2016. Four programs are also in the development phase. The Group has thus taken position to cater for the strong growth of hybrid electric vehicles.
A sustained investment program to develop and optimize its growth-tapping industrial facilities
Committed to a major investment program of €2.5 billion over the 2017-2021 period, the Group continued its investments in the 3rd quarter to further strengthen and optimize its industrial facilities through:
On July 20, 2017, the Board of Directors decided to cancel 1.5 million treasury shares as of August 14, 2017. After this cancellation, the percentage of control of Burelle SA rose from 57.01% to 57.57%.
For the whole of 2017, the Plastic Omnium Group will largely outperform worldwide automotive production (expected to grow around 2%), and will record a significant increase in revenue. The 2017 financial results will show a strong increase and the Group's balance sheet will be further strengthened, reflecting the continuous improvement of industrial performance combined with the impacts of the rationalization of the acquired business.
On December 13, 2017, Plastic Omnium will hold an Investor Day dedicated to the Group's strategic plan for the 2017-2021 period, and its innovation strategy for a cleaner, safer and smarter vehicle of the future.
| December 13, 2017 | Investor Day – 10am |
|---|---|
| February 15, 2018 | 2017 annual results – 9am |
These two meetings will be held at the Group's administrative headquarters: 1 allée Pierre Burelle – Levallois-Perret (Paris – France)
| In €M, by segment | rd quarter 3 |
Change at constant | ||
|---|---|---|---|---|
| 2016 | 2017 | Change | scope and exchange rates3 |
|
| Automotive | 1,620 | 1,762 | +8.8% | +10.2% |
| Environment | 90 | 78 | -14.1% | -1.8% |
| Economic revenue1 | 1,710 | 1,839 | +7.6% | +9.6% |
| Joint ventures | 256 | 305 | +19.1% | +19.7% |
| Consolidated revenue2 | 1,454 | 1,534 | +5.5% | +7.8% |
| In €M and as a % of revenue, by region |
rd quarter 3 |
Change | Change at constant scope and exchange rates3 |
|
|---|---|---|---|---|
| 2016 | 2017 | |||
| Europe | 905 | 963 | +6.4% | +5.7% |
| 53% | 52% | |||
| North America | 467 | 491 | +5.1% | +10.8% |
| 27% | 27% | |||
| South America | 55 | 76 | +38.5% | +35.0% |
| 3% | 4% | |||
| Asia, including China | 282 | 309 | +9.4% | +15.1% |
| 16% | 17% | |||
| Economic revenue1 | 1,710 | 1,839 | +7.6% | +9.6% |
| 100% | 100% | |||
| Joint ventures | 256 | 305 | +19.1% | +19.7% |
| Consolidated revenue2 | 1,454 | 1,534 | +5.5% | +7.8% |
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