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Jacquet Metals — Interim / Quarterly Report 2016
Nov 9, 2016
1454_10-q_2016-11-09_f35fcac8-127d-430b-ae47-5d67641286db.pdf
Interim / Quarterly Report
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Third quarter 2016
Sales €379.2 million EBITDA(1) €15.9 million (4.2% of sales)
On November 8, 2016, the Board of Directors, chaired by Eric Jacquet, examined the unaudited consolidated financial statements for the nine months ended September 30, 2016.
| €m | Q3 2016 | Q3 2015 (2) | 2016 | 2015 |
|---|---|---|---|---|
| 9-month | 9-month (2) | |||
| Sales | 379.2 | 378.0 | 1,218.8 | 1,000.8 |
| Gross margin | 95.2 | 78.2 | 290.8 | 228.7 |
| % of sales | 25.1% | 20.7% | 23.9% | 22.8% |
| EBITDA (1) | 15.9 | 9.4 | 40.1 | 37.4 |
| % of sales | 4.2% | 2.5% | 3.3% | 3.7% |
| Operating income before non-recurring items (1) | 11.7 | 3.7 | 25.7 | 24.4 |
| % of sales | 3.1% | 0.9% | 2.1% | 2.4% |
| Operating income | 12.1 | 52.7(3) | 26.6 | 73.3(3) |
| Net income (Group share) | 5.4 | 48.7(3) | 7.8 | 59.6(3) |
(1) Adjusted for non-recurring items. The activity report includes a definition of non-IFRS financial indicators and explains the methods used to calculate them.
(2) Including from July 22, 2015 the distribution business acquired from Schmolz+Bickenbach
(3) Q3 2015 operating income and net income (Group share) include non-recurring income of €48.9 million related to the Schmolz+Bickenbach acquisition
Third quarter 2016 sales and earnings
Group third quarter 2016 sales amounted to €379.2 million, up +0.3% from third quarter 2015, including the following effects:
- Consolidation: +7.2% corresponding to Schmolz+Bickenbach Distribution sales of €27.1 million for the period July 1 to July 22, 2016, the anniversary of its acquisition.
- Volumes sold: +0.5%. Excluding Schmolz+Bickenbach Distribution, Group volume growth amounted to +2.3%.
- Price: -7.3%. Sale prices are still 7.3% below the prices observed during third quarter 2015, but are 2.4% up on Q2 2016 prices.
Gross margin amounted to €95.2 million or 25.1% of sales (25.4% at constant consolidation) versus 20.7% in Q3 2015.
At constant consolidation, operating expenses before non-recurring items were flat compared to Q3 2015.
As a result, EBITDA came to €15.9 million (4.2% of sales versus 2.5% in Q3 2015), while operating income before non-recurring items amounted to €11.7 million (3.1% of sales versus 0,9% in Q3 2015).
Net income (Group share) for third quarter 2016 amounted to €5.4 million (versus €48.7 million for Q3 2015, including non-recurring income of €48.9 million).
Sales and earnings for the period ended September 30, 2016 (9 months)
Group sales for the nine months ended September 30, 2016 amounted to €1,218.8 million, up +21.8% from the previous year and including the following effects:
- Consolidation: +29.4% corresponding to Schmolz+Bickenbach Distribution sales of €294 million for the period January 1 to July 22, 2016.
- Volumes sold: +3.6%
- Price: -11.2%
EBITDA for the first nine months ended September 30, 2016 came to €40.1 million (3.3% of sales), while operating income before non-recurring items amounted to €25.7 million (2.1% of sales) versus €24.4 million the previous year.
Net income (Group share) amounted to €7.8 million.
Financial position
As of September 30, 2016, operating working capital amounted to €376.4 million, or 23.6% of sales versus 27% as of December 31, 2015. Over the first nine months of 2016, the Group generated operating cash flow of €33.4 million, while capital expenditure totalled €11.9 million.
As of September 30, 2016, Group net debt stood at €208.2 million compared to shareholders' equity of €289.9 million, resulting in a net debt to equity ratio of 71.8% compared to 72.3% at December 31, 2015.
Earnings per division
| Stainless steel and wear- resistant quarto plates |
Long stainless steel products |
Engineering steels |
||||
|---|---|---|---|---|---|---|
| €m | Q3 2016 | 2016 9-month |
Q3 2016 | 2016 9-month |
Q3 2016 | 2016 9-month |
| Sales | 77.4 | 246.5 | 103.5 | 320.3 | 197.1 | 650.9 |
| Change vs 2015 | -3.1% | -5.8% | -5.1% | -7.4% | +3.8% | +64.8% |
| Price effect | -8.4% | -14.9% | -8.0% | -13.0% | -6.5% | -6.9% |
| Volume effect | +5.3% | +9.1% | +2.9% | +5.6% | -4.0% | -2.9% |
| Change in consolidation | 0.0% | 0.0% | 0.0% | 0.0% | +14.3% | +74.5% |
| EBITDA (1) (2) | 3.0 | 7.6 | 6.5 | 13.2 | 4.4 | 13.8 |
| % of sales | 3.9% | 3.1% | 6.3% | 4.1% | 2.2% | 2.1% |
| Operating income before non-recurring items (2) |
1.2 | 1.9 | 5.7 | 11.5 | 3.4 | 8.8 |
| % of sales | 1.5% | 0.8% | 5.5% | 3.6% | 1.7% | 1.4% |
(1) Non-division operations (including Jacquet Metal Service SA) contributed €2.0 million to Q3 2016 EBITDA and €5.5 million to 2016 9-month EBITDA.
(2) Adjusted for non-recurring items. The activity report includes a definition of non-IFRS financial indicators and explains the methods used to calculate them.
Jacquet-Abraservice
Third quarter volumes increased +5.3% compared to Q3 2015. Sales came to €77.4 million, down 3.1% from €79.8 million in Q3 2015, impacted by the 8.4% fall in sale prices compared to Q3 2015. The Q3 2016 price effect compared to Q2 2016 was +3.2%.
The gross margin rate rose 4.4 percentage points to 31.1%, while gross margin came to €24.1 million compared to €21.3 million in Q3 2015.
EBITDA amounted to €3 million, or 3.9% of sales, up from €1.4 million or 1.8% of sales in Q3 2015.
The division posted sales of €246.5 million for the nine months ended September 30, 2016, down 5.8% from €261.6 million in the previous year (+9.1% volume effect; -14.9% price effect). Nine-month EBITDA was €7.6 million, or 3.1% of sales, up from 2.9% in 2015.
Stappert
Third quarter volumes were up +2.9% from Q3 2015. Sales came to €103.5 million, down 5.1% from €109.1 million in Q3 2015, impacted by the 8% drop in sale prices compared to Q3 2015. The Q3 2016 price effect compared to Q2 2016 was +4.6%.
The gross margin rate rose 5 percentage points to 23.7%, while gross margin came to €24.6 million compared to €20.4 million in Q3 2015.
EBITDA came to €6.5 million, or 6.3% of sales, up from €3.1 million or 2.9% of sales in Q3 2015.
The division posted sales of €320.3 million for the nine months ended September 30, 2016, down 7.4% from €345.9 million in the previous year (+5.6% volume effect; -13% price effect). Nine-month EBITDA was €13.2 million, or 4.1% of sales, up from 3.9% in 2015.
IMS group
Schmolz+Bickenbach Distribution has been part of this division since July 22, 2015.
Third quarter 2016 sales amounted to €197.1 million, up +3.8% from €189.8 million in Q3 2015, including the following effects:
- Consolidation: +14.3% corresponding to Schmolz+Bickenbach Distribution sales of €27.1 million for the period July 1 to July 22, 2016.
- Volumes sold: -4%. This reduction is mainly due to challenging conditions in the German engineering steels market and the decision taken by Schmolz+Bickenbach Distribution to stop distributing a number of non-strategic product lines.
- Price: -6.5%. The Q3 2016 price effect compared to Q2 2016 was +1%.
The gross margin rate rose 4.3 percentage points from 18.6% in Q3 2015 to 22.9%. EBITDA came to €4.4 million, or 2.2% of sales, up from €1.2 million or 0.6% of sales in Q3 2015.
IMS group sales for the first nine months of 2016 amounted to €650.9 million, up +64.8% from €395 million last year (-2.9% volume effect; -6.9% price effect; +74.5% change in consolidation corresponding to Schmolz+Bickenbach Distribution sales from January 1 to July 22, 2016).
Nine-month EBITDA came to €13.8 million, or 2.1% of sales, up from €10.7 million in 2015.
For 2016, the division is focusing mainly on integrating and turning around the business of Schmolz+Bickenbach Distribution.