Earnings Release • Feb 17, 2016
Earnings Release
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Suresnes, February 17, 2016: the Recylex Group (Euronext Paris: FR0000120388 - RX) has today reported its consolidated sales for the year ended December 31, 2015 and for the fourth quarter of 2015. Sales came respectively to €385.4 million, down 9% on the level posted in 2014, and to €91.3 million, down 3% on the fourth quarter of 2014.
The breakdown in consolidated sales in the year to December 31, 2015 by segment was as follows:
| (€ million) | 2015 | 2014 | Change (%) |
|---|---|---|---|
| Lead | 281.8 | 311.8 | -10% |
| Zinc | 66.0 | 68.1 | -3% |
| Special Metals | 20.5 | 23.6 | -13% |
| Plastics | 17.1 | 18.0 | -5% |
| Total | 385.4 | 421.5 | -9% |
"Our performance in 2015 was impacted by the two maintenance shutdowns in the key Lead and Zinc segments during the first half, plus the very high level of volatility in commodity prices in the second half. In these tough conditions, our sales declined by 9%. After successfully completing Recylex SA's continuation plan in December, we are continuing to take the necessary steps to pursue the Group's recovery. As part of these efforts, cash preservation measures were reinforced and talks are currently continuing concerning our search for a global financing package for the Group's German perimeter."
Between January 2, 2015 and December 31, 2015, lead prices rose by 8%, while zinc prices declined by 19%. Both lead and zinc prices were highly volatile during the year, with a strong decline in the second half of 2015. Reflecting the strength of this downturn, zinc prices sank in late 2015 to their lowest level since 2009.
Nonetheless, the average lead price in 2015 was still 2% higher than the 2014 average. The average zinc price in 2015 was 6% higher than its level in 2014. Average prices in the year to December 31 were thus as follows:
| (€ per tonne) | At December 31, 2015 | At December 31, 2014 | Change (%) |
|---|---|---|---|
| Lead price | 1,608 | 1,579 | +2% |
| Zinc price | 1,737 | 1,634 | +6% |
Between January 2 and December 31, 2015, the €/\$ exchange rate sank from 1.2039 to 1.0883, representing a decrease of around 10% over the period.
Furthermore, the average €/\$ exchange rate in 2015 declined by 16% to 1.1097 in 2015 from 1.3286 in 2014.
In the second half of 2215, commodity prices posted a very strong decline, which the appreciation in the dollar against the euro failed to offset, putting the Group's margins under pressure.
Sales recorded in the 2015 financial year came to €385.4 million, down 9% on their 2014 level. In the fourth quarter of 2015, sales totaled €91.3 million, representing a fall of 3% on the fourth quarter of 2014.
In 2015, Lead sales accounted for 73% of consolidated sales.
Sales in the year ended December 31, 2015 came to €281.8 million, down 10% on their 2014 level, with the decline in sales volumes caused by the maintenance shutdown offset only partially by the small increase in average lead prices in the period.
Sales were also affected by the fact that volumes produced under tolling agreements, which accounted for some 27% of 2015 annual output, are not recognized on the sales figure.
Production at the Weser-Metall GmbH's smelter reached 125,506 tonnes in 2015, down close to 10% from 139,334 tonnes in 2014. This decrease reflected the impact of the scheduled maintenance shutdown of the smelter in the second quarter of 2015 (no scheduled maintenance shutdowns took place in 2014).
Sales in the fourth quarter of 2015 rose 4% to €69.3 million, primarily as a result of an increase in sales volumes over the period.
Zinc segment: sales down 3%
Zinc sales accounted for 17% of the Group's consolidated total in 2015.
They totaled €66.0 million in the year to December 31, 2015, down 3% on their 2014 level. The very strong fall in zinc prices in the second half of 2015 was the main factor contributing to this decline.
The increase in Waelz oxide production volumes helped to offset the impact of the scheduled maintenance shutdown in the second quarter of 2015, but was not sufficient to make up for the strong decline in zinc prices over the period. Even so, the zinc oxide production activity recorded a stable performance owing to the improvement in its commercial conditions.
Waelz oxide production at the Harz-Metall GmbH subsidiary declined by 9% to 22,182 tonnes in 2015 from 24,473 tonnes in 2014 as a result of the maintenance shutdown. Norzinco GmbH's zinc oxide production totaled 22,941 tonnes in 2015, down 5% on the 24,282 tonnes recorded in 2014.
In the fourth quarter of 2015, sales totaled €13.3 million, down 21% owing to the very strong decline in zinc prices during the quarter and a slowdown in the zinc oxide production activity.
Special Metals: sales down 13%
Special Metals sales contributed 5% of the Group's consolidated total in the year to December 31, 2015.
They fell back to €20.5 million, down 13% in 2015 compared with 2014. This fall is the result of the drop in germanium sales volumes due to the ramp-up in the industrial tolling policy for this metal, which accounts for a large proportion of the segment's activity.
In the fourth quarter of 2015, PPM Pure Metals GmbH's sales totaled €4.7 million, versus €6.0 million in the fourth quarter of 2014, representing a contraction of 22% for the same reasons.
Plastics: sales down 5%
Plastics sales accounted for 5% of consolidated sales in the 2015 financial year.
They dropped 5% lower to €17.1 million in the year to December 31, 2015. With selling prices moving lower in France owing to their indexation to oil prices, the growth in volumes sold in Germany helped to offset part of the small decline in sales volumes in France.
The segment's total production of recycled polypropylene came to 16,533 tonnes in 2015, down from 16,609 tonnes in 2014.
In the fourth quarter of 2015, sales totaled €4.0 million, representing a decrease of 17% compared with the fourth quarter of 2014 owing to the sales contraction caused by a more selective commercial policy.
The document summarizing developments in legal proceedings concerning Recylex SA, with the latest deliberation dates, is available from the Recylex Group's website (www.recylex.fr - News - Legal proceedings schedule).
Following payment on November 23, 2015 of the last €4.3 million instalment due under the continuation plan, the Paris Commercial Court noted on December 15, 2015 due completion of Recylex SA's 10-year continuation plan, originally adopted in November 2005. In sum, the Group repaid a total of €58 million under this plan (see the press release dated December 15, 2015 and Note 18.2 to the consolidated financial statements at December 31, 2014).
Given its tight cash position, the Group accelerated measures to preserve its working capital requirement. Unless it receives a financing proposal by the end of the first quarter of 2016, the going concern status of the Group's German subsidiaries – and with it that of Recylex SA – could be called into question (see section F of Note 1 to the condensed consolidated financial statements at June 30, 2015).
Discussions have continued concerning the search for a combined financing package covering the new production project in the Lead segment, the €3 million credit line that expires at the end of March 2016 and the working capital requirement of the Group's German perimeter. Recylex SA will keep its stakeholders informed of developments in these discussions.
Full-year 2015 results: Thursday, April 7, 2016 (after the market close)
With operations in France, Germany and Belgium, Recylex is a European group specialized in lead and plastics recycling (mainly from automotive and industrial batteries), zinc recycling (from electric arc furnace dust and zinc scrap) 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 680 employees in Europe and generated consolidated sales of €385 million in 2015.
For more information about Recylex Group: www.recylex.fr and on twitter: @Recylex
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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 (Autorité des Marchés Financiers) General Regulation. 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).
| (€ per tonne) |
First quarter 2015 |
Second quarter 2015 |
Third quarter 2015 |
Fourth quarter 2015 |
First quarter 2014 |
Second quarter 2014 |
Third quarter 2014 |
Fourth quarter 2014 |
|---|---|---|---|---|---|---|---|---|
| Lead price | 1,605 | 1,758 | 1,542 | 1,535 | 1,538 | 1,528 | 1,645 | 1,600 |
| Zinc price | 1,848 | 1,981 | 1,663 | 1,472 | 1,482 | 1,512 | 1,743 | 1,788 |
Source: London Metal Exchange 2015
| (€ million) | First quarter 2015 |
Second quarter 2015 |
Third quarter 2015 |
Fourth quarter 2015 |
First quarter 2014 |
Second quarter 2014 |
Third quarter 2014 |
Fourth quarter 2014 |
|---|---|---|---|---|---|---|---|---|
| Lead | 75.9 | 64.4 | 72.2 | 69.3 | 87.0 | 80.0 | 78.3 | 66.5 |
| Zinc | 19.4 | 17.5 | 15.8 | 13.3 | 17.5 | 16.2 | 17.6 | 16.8 |
| Special Metals |
6.4 | 4.9 | 4.5 | 4.7 | 4.9 | 5.8 | 6.9 | 6.0 |
| Plastics | 4.8 | 4.7 | 3.6 | 4.0 | 4.5 | 4.6 | 4.1 | 4.8 |
| Total | 106.5 | 91.5 | 96.1 | 91.3 | 113.9 | 106.6 | 106.9 | 94.1 |
| (€ million) | At December 31, 2015 |
At December 31, 2014 |
Change (%) |
|---|---|---|---|
| Lead segment | 62.1 | 73.8 | 16% |
| Services to Group companies |
1.5 | 1.7 | -12% |
| Total sales | 63.6 | 75.5 | -16% |
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