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Holland Colours NV
Earnings Release • Oct 25, 2023
3850_ir_2023-10-25-075852_4e6565d6-4671-490e-aa53-a14d6d4564f2.pdf
Earnings Release
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PRESS RELEASE
HOLLAND COLOURS HALF YEAR RESULTS 2023/2024
- Revenues of EUR 52.2 million compared to EUR 62.9 million the same period last year, a decrease of 17%, of which 2% was due to an unfavorable translation from USD to EUR.
- Operating result amounted to EUR 3.2 million versus the same period previous year EUR 5.3 million.
- Net result of EUR 2.2 million compared to EUR 4.1 million the same period last year resulting in net earnings per share of EUR 2.61 compared to the same period previous year EUR 4.75.
Significant market uncertainty and sharply increased interest rates had a negative impact on demand in most of our core business segments. It is due to these continued unfavorable market conditions, all divisions saw decreases in volume and revenue.
Revenue in Division EMEIA decreased by 6%, mainly in Building & Construction, while revenue in the Packaging and Coatings & Sealants segments were slightly favorable versus the same period last year. The revenue decrease experienced by Division Asia was 32% in USD. This was partly due to a relatively low market demand in our primary segments in South East Asia. In addition, the lower growth seen in the Chinese economy had a negative impact on the region and our exports to China. Division Americas saw a revenue decrease in USD of 19%. This was mainly due to lower market demand in Building & Construction.
The direct contribution margin for the Group was EUR 24.2 million, a decrease of EUR 2.6 million compared to the same period last year. Due to effective margin management across all regions, the margin as a percentage of revenue increased to 46%, versus 43% the same period last year. The net revaluation of inventories (- EUR 0.6 million) unfavorably impacted the margin by 1%.
Operating expenses were EUR 20.9 million, down by EUR 0.5 million (2%) compared to the same period previous year. Strict cost control, a lower number of FTEs, lower energy and consulting costs as well as favorable exchange rate differences contributed to this. Depreciation costs went up due to the commissioning of parts of a new production line in Apeldoorn. The new line is expected to be in full operation during the second half of this financial year.
The operating result was EUR 3.2 million compared to EUR 5.3 million the same period last year. The net result was EUR 2.2 million (EUR 2.61 per share) versus EUR 4.1 million the same period previous year (EUR 4.75 per share).
Net cash flow amounted to EUR 1.2 million (negative), whilst for the same period last year the net cashflow amounted to EUR 4.9 million (negative). Compared to the same period last year, working capital improved by EUR 2.6 million, mainly because of strict inventory management, and income taxes paid were lower by EUR 1.3 million. Overall, this resulted in an improved cash flow from operating activities (EUR 2.8 million increase), despite a decrease in operating result of EUR 1.2 million compared to the same period last year.
Cash flow from investment activities remained unchanged compared to the same period last year due to the assembling of the new production line in Apeldoorn. Cash outflow from financing activities decreased due to the lower dividend that has been paid.
Our market position is focused on structural healthy business segments. We have a strong relationship with our customers, based on personal service and co-designing customized solutions. We are finalizing the preparation of various strategic initiatives which will have a positive impact on the sustainable growth of our core business. It is our plan to implement organizational changes in the second half of the financial year. These changes will not only support an effective implementation of the strategic initiatives but also result in a reduction of operating expenses.
OUTLOOK 2023/2024
We believe that most of the destocking measures we saw previously in our markets have now come to an end. However, continued global economic uncertainty will most likely continue to impact our markets in the short term. In line with previous years, Holland Colours refrains from making financial forward-looking statements.
Apeldoorn, October 25th, 2023
Board of Management Coen Vinke (CEO) Eelco van Hamersveld (CTO) Geert Rutgers (CFO ad interim)
KEY FIGURES
FOR THE FINANCIAL HALF YEAR ENDED SEPTEMBER 30, 2023
| April 1, 2023/ | April 1, 2022/ | ||
|---|---|---|---|
| In EUR million | September 30, 2023 | September 30, 2022 | |
| RESULTS | |||
| Revenue | 52.2 | 62.9 | |
| Revenue growth versus comparable period (%) | (17.0) | 15.0 | |
| Depreciation | (1.6) | (1.5) | |
| Operating result | 3.2 | 5.3 | |
| Net result | 2.2 | 4.1 | |
| CASH FLOW | |||
| Net cash flow | (1.2) | (4.9) | |
| Investments | 2.7 | 2.7 | |
| BALANCE SHEET | |||
| Trade working capital1 | 19.8 | 25.7 | |
| Invested capital | 45.6 | 49.6 | |
| Shareholders equity (excl. Minority interest) | 59.0 | 60.4 | |
| Balance-sheet total | 73.9 | 78.9 | |
| RATIOS | |||
| Return on Sales (ROS) (%) | 6.1 | 8.4 | |
| Solvency2 (%) | 79.8 | 76.5 | |
| Return on invested capital3 (ROI) (%) |
11.3 | 22.2 | |
| Working capital (%) | 19.6 | 21.6 | |
| FIGURES PER SHARE (In euros) | |||
| Total net result | 2.61 | 4.75 | |
| Growth of earnings per share (%) | (45.0) | (32.0) | |
| Equity (excl. Minoritory interest) | 68.6 | 70.18 | |
| Closing price | 95.0 | 123.00 | |
| OTHER DATA | |||
| Number of outstanding shares | 860,351 | 860,351 | |
| Average number of employees (FTEs) | 458 | 464 |
1) Trade working capital: inventory + trade accounts receivable -/- trade accounts payable
2) Solvency: total equity / balance-sheet total
3) Return on invested capital: operating result / (equity+provisions+interest-bearing liabilities -/- cash)
INCOME STATEMENT
| April 1 2023/ | April 1 2022/ | ||||
|---|---|---|---|---|---|
| In EUR 1,000 | September 30 2023 | September 30 2022 | |||
| Revenue | 52,226 | 62,921 | |||
| Cost of Materials | (28,067) | (36,113) | |||
| Direct Contribution Margin | 24,159 | 26,808 | |||
| Personnel Expenses | (12,034) | (12,112) | |||
| Amortization and Impairments | (5) | (43) | |||
| Depreciation and Impairments | (1,581) | (1,454) | |||
| Other Operating Expenses | (7,329) | (7,895) | |||
| Total Operating Expenses | (20,949) | (21,504) | |||
| Operating Result | 3,210 | 5,304 | |||
| Finance Income | 217 | 68 | |||
| Finance Expense | (179) | (106) | |||
| Finance Income and Expense | 38 | (38) | |||
| Result before Income Tax | 3,248 | 5,266 | |||
| Income Tax | (1,000) | (1,176) | |||
| Net Result | 2,248 | 4,090 | |||
| Attributable to: | |||||
| ▪ Shareholders of the Company | 2,248 | 4,090 | |||
| 2,248 | 4,090 | ||||
| Earnings per share in euros | |||||
| Average number of shares issued | 860,351 | 860,351 | |||
| Earnings per Share from Continued Operations | 2.61 | 4.75 | |||
| Earnings per Share from Total Net Result | 2.61 | 4.75 |
STATEMENT OF COMPREHENSIVE INCOME
| In EUR 1.000 | April 1 2023/ September 30 |
April 1 2022/ September 30 |
|---|---|---|
| Net Result | 2,248 | 4.090 |
| Other comprehensive income that could in future | ||
| be classified to the income statement | ||
| Foreign Currency Translation Differences | 888 | 4.044 |
| Other Comprehensive Income | 888 | 4.044 |
| Total Comprehensive Income | 3,136 | 8,134 |
| Attributable: | ||
| Shareholders of the Company | 3.136 | 8.135 |
| 3,136 | 8,135 |
BALANCE SHEET
| September 30, | September 30, | |
|---|---|---|
| In EUR 1,000 | 2023 | 2022 |
| Non-Current Assets | ||
| 25 | ||
| Intangible Assets | - | |
| Property, Plant and Equipment | 23,962 | 23,336 |
| Right-of-Use Assets | 938 | 970 |
| Deferred Tax Assets | 1,089 | 1,526 |
| Current Assets | 25,989 | 25,857 |
| Inventory | 14,824 | 21,677 |
| Trade and Other Receivables | 17,632 | 18,335 |
| Income Tax Receivables | 946 | 1,001 |
| Cash and Cash Equivalents | 14,556 | 12,029 |
| 47,958 | 53,042 | |
| Total Assets | 73,947 | 78,899 |
| Equity | ||
| Share Capital | 1,953 | 1,953 |
| Share Premium Reserve | 1,219 | 1,219 |
| Other Reserves | ||
| 1,420 | 4,027 | |
| Retained Earnings | 54,421 | 53,181 |
| 59,013 | 60,380 | |
| Non-Current Liabilities | ||
| Lease Liabilities | 470 | 457 |
| Employee Benefit Obligations | 810 | 1,138 |
| Deferred Tax Liabilities | 106 | 272 |
| 1,386 | 1,867 | |
| Current Liabilities | ||
| Lease Liabilities | 394 | 406 |
| Trade and Other Liabilities | 12,683 | 14,348 |
| Income Tax Liabilities | 151 | 1,810 |
| Employee Benefit Obligations | 320 | 88 |
| 13,548 | 16,652 | |
| Total Equity and Liabilities | 73,947 | 78,899 |
STATEMENT OF CHANGES IN EQUITY
| Legal | ||||||||
|---|---|---|---|---|---|---|---|---|
| Foreign | Reserve | |||||||
| Share | Currency | for | Non | |||||
| Share | Premium | Translation | Intangible | Retained | Controlling | Total | ||
| In EUR 1,000 | Capital | Reserve | Reserve | Assets | Earnings | Subtotal | Interest | Equity |
| Half Year 2022/2023 | ||||||||
| As at March 31, 2022 | 1,953 | 1,219 | 145 | (162) | 54,176 | 57,330 | 420 | 57,750 |
| Net Result | - | - | - | - | 4,090 | 4,090 | - | 4,090 |
| Other Comprehensive Income | - | - | 4,044 | - | - | 4,044 | - | 4,044 |
| Buy out of minority shareholder | - | - | - | - | - | - | (420) | (420) |
| Total Comprehensive Income | - | - | 4,044 | - | 4,090 | 8,135 | (420) | 7,715 |
| Dividends paid | - | - | - | - | (5,085) | (5,085) | - | (5,085) |
| As at September 30, 2022 | 1,953 | 1,219 | 4,189 | (162) | 53,181 | 60,380 | - | 60,380 |
| In EUR 1,000 | ||||||||
| Half Year 2023/2024 | ||||||||
| As at March 31, 2023 | 1,953 | 1,219 | 506 | - | 55,135 | 58,813 | - | 58,813 |
| Net Result | - | - | - | - | 2,248 | 2,248 | - | 2,248 |
| Other Comprehensive Income | - | - | 888 | - | - | 888 | - | 888 |
| Buy out of minority shareholder | - | - | - | - | - | - | - | - |
| Total Comprehensive Income | - | - | 888 | - | 2,248 | 3,136 | - | 3,136 |
| Dividends paid | - | - | - | - | (2,934) | (2,934) | - | (2,934) |
| As at September 30, 2023 | 1,953 | 1,219 | 1,394 | - | 54,449 | 59,015 | - | 59,015 |
STATEMENT OF CASH FLOW
| April 1 Zuzar | April 1 Zuzzi | |
|---|---|---|
| September | September | |
| In EUR 1,000 | 30 2023 | 30 2022 |
| Operating Result | 3,210 | 5,304 |
| Adjustments for: | ||
| Amortisation of Intangible Assets and Impairments | 5 | 43 |
| 1,278 | ||
| Depreciation of Property, Plant and Equipment and Impairments | 1,207 | |
| Depreciation of Right-of-Use Assets | 303 | 247 |
| IFRS 16: reversal of lease costs | (266) | |
| Changes in Provisions | 70 | (51) |
| Exchange-rate Differences | (11) | (439) |
| Cash Flow from Operating Activities before Changes in Working | ||
| Capital, Tax and Interest | 4,855 | 6,045 |
| Changes in Working Capital | (29) | (2,684) |
| Income Tax Paid | (451) | (1,759) |
| Interest Received | 217 | |
| Interest Paid | (179) | (6) |
| Cash Flow from Operating Activities | 4,413 | 1,596 |
| Capital Expenditures in Property, Plant and Equipment | (2,691) | (2,666) |
| Cash Flow from Investment Activities | (2,691) | (2,666) |
| Dividends Paid | (2,934) | (5,085) |
| Lease Liabilities Payments | (280) | |
| Cash Flow from Financing Activities | (5,085) | |
| (3,214) | ||
| Exchange-rate and Translation Differences on Cash and Cash Equivalents | 291 | 1,225 |
| Net Cash Flow | (1,201) | (4,930) |
| Cash and Cash Equivalents as at April 1 | 15,757 | 16,959 |
| Cash and Cash Equivalents as at September 30 | 14,556 | 12,029 |
| Net Cash Flow | (1,201) | (4,930) |
SEGMENT REPORTING
| Adjustments and |
||||||
|---|---|---|---|---|---|---|
| Segments 2023/24 In EUR 1,000 | Europe | Americas | Asia | Other eliminations | Total | |
| Revenue | 27,299 | 19,432 | 5,495 | - | - | 52,226 |
| Intersegmental transactions | 747 | 18 | - | - | (765) | - |
| Revenue Including Intersegemental Transactions | 28,046 | 19,450 | 5,495 | - | (765) | 52,226 |
| Depreciation, Amortisation and Impairments | (853) | (457) | (202) | (77) | 3 | (1,586) |
| Operating Result | 1,239 | 863 | 520 | 588 | - | 3,210 |
| Financial Income | - | - | - | - | 217 | 217 |
| Financial Expense | - | - | - | - | (179) | (179) |
| Tax | - | - | - | - | (1,000) | (1,000) |
| Net Result | - | - | - | - | 2,248 | 2,248 |
| Non-current Assets | 14,932 | 6,090 | 2,810 | 59,637 | (57,481) | 25,989 |
| Current Assets | 24,404 | 18,791 | 10,535 | 6,696 | (12,468) | 47,958 |
| Liabilities | 17,702 | 4,528 | 2,171 | 7,317 | (16,784) | 14,934 |
| Investments | 2,369 | 283 | 39 | - | - | 2,691 |
| Average Number of Employees (FTEs) | 210 | 98 | 127 | 23 | - | 458 |
| Adjustments and |
||||||
|---|---|---|---|---|---|---|
| Segments 2022/23 In EUR 1,000 | ||||||
| Europe | Americas | Asia | Other eliminations | Total | ||
| Revenue | 29,217 | 25,239 | 8,465 | - | - | 62,921 |
| Intersegmental transactions | 771 | 14 | - | - | (785) | - |
| Revenue Including Intersegemental Transactions | 29,988 | 25,253 | 8,465 | - | (785.00) | 62,921 |
| Depreciation, Amortisation and Impairments | (813) | (498) | (219) | (95) | 127 | (1,497) |
| Operating Result | 818 | 2,629 | 1,107 | 4,145 | (3,395) | 5,304 |
| Financial Income | - | - | - | - | 68 | 68 |
| Financial Expense | - | - | - | - | (106) | (106) |
| Tax | - | - | - | - | 1,176 | (1,176) |
| Net Result | - | - | - | - | 4,090 | 4,090 |
| Non-current Assets | 12,926 | 7,080 | 3,326 | 65,553 | (63,028) | 25,857 |
| Current Assets | 25,271 | 23,246 | 11,255 | 4,193 | (10,923) | 53,042 |
| Liabilities | 17,269 | 6,425 | 2,381 | 9,457 | (17,012) | 18,520 |
| Investments | 2,265 | 229 | 158 | 14 | (0) | 2,666 |
| Average Number of Employees (FTEs) | 204 | 102 | 137 | 22 | - | 464 |
NOTES
Basis of preparation
The interim financial information regarding the period ending September 30, 2023 has been prepared in accordance with the principles for consolidation and financial reporting, as described in the annual report of Holland Colours NV for the fiscal year 2022/2023 and do not include all information and disclosures required for the annual financial statements. Accordingly, they should be read in conjunction with the financial statements for the year ended March 31, 2023, which have been prepared in accordance with IFRS EU.
Audit
The interim financial information is not audited.
PROFILE
Holland Colours develops and manufactures groundbreaking solid and liquid color concentrates, plus masterbatches and additive concentrates for rigid and flexible PVC for the building & construction industry, and for the production of PET and polyolefin-based packaging. We also produce color concentrates for use in coatings, sealants & adhesives and other applications.
As a company, we set out to deliver customer peace of mind through superior product performance, worldleading product stewardship and outstanding technical service. Our experts co-design color and functional solutions with our customers, develop solutions to support recycling and actively contribute to creating a more sustainable industry overall.
Holland Colours is a Dutch company, founded in 1979 and listed on the Euronext Amsterdam Stock Exchange. With committed employee shareholders and production locations in the Americas, Europe and Asia, we serve customers on every continent. To find out more, visit us at hollandcolours.com.
KEY DATES (provisional)
May 30, 2024 Publication of 2023/2024 financial statements July 11, 2024 Annual General Meeting of Shareholders
Holland Colours NV PO Box 720 | 7300 AS Apeldoorn | Netherlands Tel + 31 (0)55 368 07 00 | [email protected] | www.hollandcolours.com |
