Earnings Release • Nov 7, 2013
Earnings Release
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Suresnes, November 7, 2013: The Recylex Group (NYSE Euronext Paris: FR0000120388 - RX) today reported its sales for the nine months period to September 30, 2013 and for the third quarter of 2013. Sales for the first nine months of the year totaled €319.1 million, down 7% compared with the same period in 2012, while third-quarter sales came to €109.8 million, down 1% compared with the third quarter of 2012.
The breakdown of consolidated sales by business line to September 30, 2013 is as follows:
| At | At | Change | |
|---|---|---|---|
| (in millions of euros) | September 30, 2013 | September 30, 2012 | (%) |
| Lead | 233.8 | 255.3 | -8% |
| Zinc | 59.0 | 61.8 | -5% |
| Special Metals | 14.5 | 16.6 | -13% |
| Plastics | 11.8 | 9.8 | +20% |
| Total | 319.1 | 343.4 | -7% |
"The Group's sales for the first nine months of the year were impacted by the major scheduled shutdowns for maintenance that occurred during the first quarter and by the unfavorable evolution of lead and zinc prices over the period. Against this backdrop, the decline in sales was nevertheless limited to 7% compared with the same period in 2012. Recylex also initiated its program to reduce its working capital requirement in order to optimize stock levels and the Group's net cash position."
Lead and zinc prices have fallen sharply since January 1, 2013, by -14% and -12% respectively. However, compared with the same period last year, the average lead price increased by +4% over the first nine months of 2013, while the average zinc price decreased by -4% over the same period.
Average prices were as follows at end-September:
| (in euros per ton) | At September 30, 2013 | At September 30, 2012 | Change (%) |
|---|---|---|---|
| Lead price | 1,633 | 1,571 | +4% |
| Zinc price | 1,450 | 1,518 | -4% |
Consolidated sales for the first nine months of 2013 totaled €319.1 million, down 7% relative to the same period in 2012. This fall reflects the decline in metal prices over the first nine months of the year, as well as the major scheduled shutdowns for maintenance works in Germany, at the Weser-Metall GmbH smelter (Lead segment), and at the Harz-Metall GmbH Waelz oxides production plant (Zinc segment).
Consolidated sales for the third quarter of 2013 totaled €109.8 million, down 1% relative to the same period in 2012, mainly due to the fall in metals prices.
During the first nine months of 2013, lead sales accounted for 73% of consolidated sales. It came to €233.8 million, an 8% fall compared with the same period in 2012. This decline is primarily a result of the drop in sales volumes over the period following the three-week scheduled maintenance shutdown at the Weser-Metall GmbH smelter in Nordenham (Germany) in the first quarter of 2013 - as a reminder, no scheduled maintenance shutdowns in 2012 - as well as a sharp fall in prices for silver (down -21% compared with the average for the first nine months of 2012), a sub-product of the lead smelter.
In the third quarter of 2013, lead sales came to €83.1 million, up 3% compared with the third quarter of 2012. This performance is thanks to an increase in sales volumes on the back of the program to reduce stock levels of sub-products from the Nordenham smelter (silver and sulfuric acid), although under market conditions that remained less favorable than in 2012.
Zinc sales accounted for 18% of consolidated sales during the first nine months of 2013. They recorded 5% fall compared with the same period in 2012, to €59.0 million. Performances once again varied depending on the activity. Scrap zinc recycling saw a slight increase in sales thanks to higher sales volumes, despite unfavorable prices. Meanwhile, the electric arc furnace dust recycling business sustained a fall in sales, mainly due to the six-week major scheduled maintenance shutdown at German subsidiary Harz-Metall GmbH in June 2013.
In the third quarter, consolidated lead sales came to €19.8 million, down 7% compared with the third quarter of 2012, primarily as a result of the fall in zinc prices over the period.
Special Metals sales accounted for 5% of consolidated sales to September 30, 2013, reaching €14.5million. This represents a fall of 13% compared with the same period in 2012, mainly due to the very sharp drop in germanium and arsenic sales in the third quarter of 2013.
Third-quarter sales totalled €3.3 million, down 46% as a result of very fierce competition in germanium, arsenic and gallium.
Plastics sales accounted for 4% of consolidated sales during the first nine months of 2013. Sales saw strong growth of 20% over the period to €11.8 million, thanks in particular to the continuing brisk momentum of subsidiary C2P in France.
During the third quarter, consolidated sales rose by 16% to €3.6 million, with C2P continuing with its business development efforts.
On September 10, 2013, within the context of the legal proceedings initiated in 2010 by 192 former employees of Metaleurop Nord for damages for dismissal without real and serious cause (total amount claimed of €9.96 million, for which provisions have been set aside in Recylex SA's accounts), the Industrial Section of the Lens Labour Court considered that Recylex SA was the co-employer of 136 former non-managerial employees and granted damages amounting to a total of €4.5 million.
Recylex lodged an appeal against these decisions, which are not provisionally enforceable.
Within the context of the claims for damages for prejudice of anxiety and disruption to living conditions formulated in 2013 by more than 350 former employees of Metaleurop Nord SAS, 11 of whom are claiming additional compensation for dismissal without real and serious cause or unlawful dismissal (total amount claimed of €11.6 million, not provisioned in Recylex SA's accounts):
Within the framework of the appeal lodged before the Cour de Cassation by the liquidators of Metaleurop Nord against the decision of the Douai Appeal Court of September 19, 2012 confirming the rejection of their action for the repayment of liabilities, the Cour de Cassation's judgment will be delivered at 2.00 p.m. on November 19, 2013.
Furthermore, within the context of the liability claim initiated by Recylex SA against Metaleurop Nord SAS's liquidators, the next procedural hearing before the Béthune Regional Court has been set for February 5, 2014.
* A document summarizing the development of legal proceedings relating to Recylex SA and Metaleurop Nord SAS can be founded on the Recylex website (www.recylex.fr – News – Legal proceedings schedule).
Recylex SA is continuing to study the several different options to finance its cash requirements identified for 2014-15.
Sales for the fourth quarter of 2013: Thursday, February 13, 2014
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With operations in France, Germany and Belgium, Recylex is a European group specializing in lead and plastics recycling (mainly from automotive and industrial batteries), zinc recycling (from electric arc furnace dust and scrap zinc) and the production of special metals, primarily for the electronics industry.
A key player in the circular economy with long-standing expertise in urban waste recovery, the Group has close to 675 employees in Europe and generated consolidated sales of €471 million in 2012.
For more information about the Recylex Group go to: www.recylex.fr
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Press/Investor contact:
Gabriel ZEITLIN + 33 (0)1 58 47 29 89 [email protected]
Disclaimer: this press release contains regulated quarterly financial information for the Recylex Group as defined in Article L. 451-1-2-IV of the French Monetary and Financial Code and Article 221-1 of the AMF General Regulations. This press release may contain forward-looking statements that do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its website (www.recylex.fr). Further information about Recylex is available from its website (www.recylex.fr).
| (in euros per ton) | 1st quarter 2013 |
2nd quarter 2013 |
3rd quarter 2013 |
1st quarter 2012 |
2nd quarter 2012 |
3rd quarter 2012 |
|---|---|---|---|---|---|---|
| Lead price | 1,741 | 1,572 | 1,587 | 1,597 | 1,536 | 1,581 |
| Zinc price | 1,539 | 1,408 | 1,404 | 1,544 | 1,502 | 1,509 |
| 1st | 2nd | 3rd | 1st | 2nd | 3rd | |
|---|---|---|---|---|---|---|
| (in millions of euros) |
quarter 2013 |
quarter 2013 |
quarter 2013 |
quarter 2012 |
quarter 2012 |
quarter 2012 |
| Lead | 69.4 | 81.3 | 83.1 | 90.1 | 84.7 | 80.4 |
| Zinc | 21.4 | 17.8 | 19.8 | 21.6 | 18.8 | 21.4 |
| Special Metals | 5.0 | 6.2 | 3.3 | 5.0 | 5.5 | 6.1 |
| Plastics | 4.0 | 4.2 | 3.6 | 3.3 | 3.4 | 3.1 |
| Total | 99.8 | 109.6 | 109.8 | 120.0 | 112.4 | 111.0 |
| (in millions of euros) | At September 30, 2013 |
At September 30, 2012 |
Change (%) |
|---|---|---|---|
| Lead business | 56.5 | 59.3 | -5% |
| Services to Group companies | 1 | 1 | 0% |
| Total sales | 57.5 | 60.3 | -5% |
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