Earnings Release • Mar 18, 2010
Earnings Release
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Introduced by Compagnie Plastic Omnium in March 2008, the PO 2009 cost-reduction plan helped to lower costs by 19%,generating savings of €200 million.
The Company,which already reported a positive operating margin and net profit for first-half 2009, ended the yearwith both indicators substantially higher,in a very difficult business environment shaped by a significant decline in global automobile production and spending cutbacks by local governments.
The Board of Directors of Compagnie Plastic Omnium met on 16 March 2010 under the chairmanship of Laurent Burelle to approve the accounts for the year ended 31 December 2009.
| (in € millions) |
2008 | 2009 |
|---|---|---|
| Consolidated revenue | 2,696.5 | 2,458.6 |
| Operating margin | 70.7 | 102.1 |
| as a % of revenue | 2.6% | 4.2% |
| Restructuring costs | -72.6 | -33.4 |
| Net profit (loss) | -63.2 | 31.0 |
| EBITDA | 220.0 | 272.0 |
| as a % of revenue | 8.2% | 11.1% |
| Net debt at 31 December Gearing |
560.0 128% |
406.0 92% |
Demand varied considerably during the year, especially in the automotive business. The full-year 8.8% decline in revenue comprised a 19% drop in the first half,followed by a 2.7% increase in the second half, with a 16.8% rise in the fourth quarter alone. Automotive revenuewas down 7.2% for the year at €2,015 million, while Environment revenue declined by 15.4% to €444 million under the impact of budget restrictions in Germany, Spain and the United Kingdom.
Operating margin rose by 44% to €102.1 million – on a par with 2007,the last year before the crisis – and stood at 4.2% of revenue, compared with 3.8% in 2007.
The PO 2009 cost-reduction plan,which in the first half helped to offset the decline in business and generate an operating margin of €35.5 million (3% of revenue), made a greater impact in the second half thanks to resurgent demand. Second-half operating margin amounted to €66.6 million,representing 5.2% of revenue, and improved in both core businesses,Automotive and Environment. For the full year, operating margin came to €78.1 million in the Automotive Division (3.9% of revenue, compared with 1.9% in 2008) and€24million in the Environment Division (5.4%ofrevenue). Additional cost-cutting measures were introduced in 2009 in anticipation of a decline in volumes in mid-2010. The cost of these measures amounted to €33.4 million, in addition to the €72.6 million incurred in 2008.
Benefiting fromthe decline in debt and borrowing costs,the Company saw its net finance costs reduced by half to €25 million, or 1% of revenue.
Net profit amounted to €31 million, or 1.3% of revenue.
In line with objectives, working capital requirement was reduced by €53 million, ofwhich €34 million in inventory drawdowns,while routine and project capex was limited to 3.4% of revenue.
Free cash flow amounted to €181 million, representing 7.4% of revenue, which helped to drive a €154-million reduction in net debt to €406 million, comparedwith €560 million at 31 December 2008.Gearing stood at 92% while net debt was 1.5 times EBITDA.
At theAnnual Meeting of Shareholders on 29April 2010,the Board of Directors will recommend payment of a dividend of €0.70 per share.
Plastic Omnium is pursuing its development in emerging markets, bringing two newfacilities on stream in China in 2010while ramping up production at two plants in India and commissioning a third plant – in New Delhi – in partnership with Suzuki-Maruti. The Company is also strengthening its strategic focus on environmental innovations in order to reaffirm its role as a global, independent leader in both automotive equipment and waste management. Business in early 2010 has been on a parwith late 2009.Production volumes are still underpinned by automobile scrapping incentives in Europe and growth in emerging markets. As a result, first-half 2010 operating margin should be comparable to second-half 2009. For the full year, Plastic Omnium expects to see slight growth in revenue and positive free cash flow.
Tel: +33 (0)1 40 87 64 49 / Fax: +33 (0)1 40 87 96 62 / Email: [email protected] More detailed financial information is available at www.plasticomnium.com
Plastic Omnium is a world leader in automotive components and modules, and a major European player in products and services for local communities. Plastic Omnium is listed on the Euronext Paris stock market, Compartment B, and is included in the SBF 250 and CAC Mid 100 indexes (ISIN code:. FR0000124570).
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