19/09/2023 21:08 |
Informations privilégiées / Communiqué sur comptes, résultats |
INFORMATION REGLEMENTEE
Toulouse, France - 19 September 2023
Latecoere Reports H1 2023 Results Strong revenue growth in the first half of 2023 of +42.9%, reflecting production rates ramp-ups and business acquisitions. This reflects the continuous upswing experienced across the aerospace industry as it is recovering from the COVID crisis New business wins secured in H1-23 including contracts with Boeing, Airbus and Hondajet, further demonstrating Latecoere’s strategic importance to Tier 1 OEMs Inflation and ongoing supply chain challenges impacting recurring EBITDA in H1-23 at €(18.4) million; Situation expected to improve in H2-23 as detailed in the outlook below Latecoere continues to invest in its operating platform, people, creating a more resilient business model better positioned to grow with customer requirements Latecoere and its stakeholders agreed a comprehensive recapitalization, including a €183 million reduction of its financial debt and a committed capital increase of at least €100 million to be executed in H2-23, putting Latecoere on a strong footing to capitalize on the industry recovery Bernd Kessler appointed as Independent Non-Executive Director and Nick Sanders appointed as Advisor to the Board Latecoere, a tier 1 supplier to major international aircraft manufacturers, today announced that the Board of Directors approved Latecoere’s financial statements for the six-month period ended June 30, 2023 on September 18, 2023. Thierry Mootz, Chairman and Group Chief Executive Officer, stated: “H1 2023 has been a challenging period for Latecoere. There has been a number of successes, the quick integration of the newly acquired businesses delivering strong positive results in terms of cash and EBITDA and the signing of a binding recapitalization agreement with our shareholders and lenders that will close in Q4 2023. Although revenues are growing, we are operating within a challenging environment. Significant headwinds arise from an impaired performance of some of our suppliers, higher inflation on energy, raw materials and labor costs, impacting the financial performance of the group in H1 2023. We expect the situation to improve in the second half of the year and are taking the steps required to improve both our operational and financial situation.” 1st Half Year 2023 Results Jun 30, (€ million) Jun 30, 2023 2022** Revenue 303,8 212,4 Reported growth 42,9% 17,3% On like-for-like and constant exchange rate basis 15,2% 18,8% Recurring EBITDA * (18,4) (5,2) Recurring EBITDA margin on revenue -6,0% -2,4% Recurring operating income (38,3) (21,6) Recurring EBIT margin on revenue -12,6% -10,2% Non recurring items (11,0) 1,9 Other non recurring items (11,0) 1,9 Operating income (49,4) (19,7) Net Cost of debt (8,9) (3,3) Other financial income/(expense) (0,3) 1,2 Financial result (9,2) (2,1) Income tax (0,7) (2,8) Net result from continuing operations (59,2) (24,7) Net result from discontinued operations 1,1 (2,7) Net result (58,2) (27,3) Operating free cash flows excl. discontinued operations (58,3) (65,8) (*) Recurring EBITDA = Recurring operating income + Depreciation and amortization of tangible and intangible assets and impairment losses (**) 2022 data have been adjusted to show the IFRS 5 impact of discontinued activities Latecoere’s half-year financial results for 2023 mirror the increased level of production in the aeronautical sector as a whole. Revenues amounted to €303.8 million, up €91.4 million or +42.9%. At constant exchange rates and scope, the corresponding increase was 15.2%. The increase in revenues was driven by higher production rates from OEMs and the contribution of the activities from the new acquisitions, with a perimeter variance effect of €58.6 million, and a favorable currency effect of €1.9 million compared to H1 2022. The Group reported a recurring EBITDA for the first half of 2023 of €(18.4) million, a deterioration compared to the €(5.2) million reported in the first half of 2022. This reduction was mainly driven by inflationary pressures on the material cost base and ongoing supply chain disruptions during the ramp up of the operations. Compared to H1 2022, acquisitions contributed €1.1 million of additional EBITDA, and we realized a favorable currency effect of €2.2 million. Latecoere’s net financial result amounted to €(9.2) million in the first half of 2023, compared with €(2.1) million in the first half of 2022, reflecting increased interest rates on PGE debt and the impact of acquisitions of €2.3 million. The Group’s net result for the first half of 2023 amounted to €(58.2) million, compared with €(27.3) million for the previous period. Free cash flow from operations for the period amounted to €(58.3) million, mainly impacted by the negative EBITDA, an increase of working capital to fund revenue growth, and non-recurring costs. The operating free cash flow for the first half 2022 result of €(65.8) million was mainly impacted by an increased working capital requirement in connection with the recovery in activity, but also included the acquisition of MADES for an amount of €(19.0) million. At the end of June 2023, cash and cash equivalent stood at €45.8 million a reduction of €28.1 million as a result of cash flow from continuing operations of €(58.3) million, cash flow from discontinued operations for €(3.2) million and debt repayment of €(7.1) million. As part of the recapitalization agreement Latecoere received a net €44.1 million bridge loan in June 30, 2023. Other cash flows amounted €3.6 million. The net debt at the end of June 2023 stood at €370.3 million which will significantly improve as part of the previously announced recapitalization. The hedging portfolio amounted to $624 million at June 30, 2023 at an average EUR/USD rate of 1.12. Since June 30, 2023, the Group has continued to put in place hedges for 2024 and 2025 at attractive terms. Aerostructures Revenue for Latecoere’s Aerostructures Division rose by +66% on a reported basis vs 1 st half of 2022 or 22.3% at constant exchange rates and scope of consolidation. The segment’s activity benefited from significant overall recovery in production rates. The division’s recurring EBITDA amounted to €(11.8) million, a reduction of €9.4 million vs the first half of 2022. Despite the increase in the top line, ongoing supply chain issues impacting the organization during the ramp-up lead to a significant cost increase. Aerostructure Aerostructures Jun 30, 2023 Jun 30, 2022 Var. (€ million) Consolidated revenue 190,2 114,9 75,3 On like-for-like and constant exchange rate basis 22,3% 22,3% Inter-segment revenue 11,2 11,6 (0,4) Revenue 201,4 126,5 74,9 Recurring EBITDA * (11,8) (2,4) (9,4) Recurring EBITDA margin on revenue -5,9% -1,9% Interconnection Systems Revenues of €113.6 million were up by +16% on a reported basis vs 1st half of 2022 compared with €97.5 million in the first half of 2022. This growth is notably driven by the acquisition of Mades; at constant exchange rates and scope of consolidation the increase was +6.5% due to lower than expected deliveries notably for the A320 program. Recurring EBITDA for the Interconnection Systems division reached €(6.6) million, down +€3.8 million from the previous period, primarily driven by inflationary pressures. Interconnection Systems* Interconnection Systems Jun 30, 2023 Jun 30, 2022 Var. (€ million) Consolidated revenue 113,6 97,5 16,1 On like-for-like and constant exchange rate basis 6,5% 15,4% Inter-segment revenue 1,3 0,5 0,8 Revenue 114,9 98,0 16,9 Recurring EBITDA * (6,6) (2,8) (3,8) Recurring EBITDA margin on revenue -5,7% -2,8% * Excluding discontinued operations 2023 outlook H1 2023 was a challenging period for Latecoere and the broader aerospace industry. Management expects these challenges to continue across 2023 and into 2024, with headwinds arising from persistent inflationary pressures and supply chain disruptions, compounded by changing OEM requirements. OEM volume growth for commercial, business jet and defense market sub-segments continues to improve overall revenues, whilst adding challenges and cost pressures to the industry to support the ramp up in activity. To alleviate these challenges, Latecoere continues to invest in its operating platform, people and geographic footprint, creating a more resilient business model better positioned to grow with customer requirements. Latecoere’s outlook for FY 2023 includes: Increased revenue growth of ca. 35% on a reported basis; Reduction in EBITDA losses in the 2nd half of 2023, resulting from the realization of operational initiatives, an improving supply chain situation and increased activity across key commercial, business jet and defense market sub-segments; and Free cash flow will be impacted by the remaining costs of restructuring, the increased working capital due to sales growth and by key investments to strengthen Latecoere’s competitive position. Latecoere is proud to announce that it has signed contracts with a.) Boeing for the supply of wiring systems for the 737 MAX and 767 programs, b.) Airbus for the A321 over-wing door and c.) HondaJet for the design and build of its passenger access doors during H1 2023. These new commercial wins demonstrate the confidence of Latecoere’s customer base in its strategic road map. Latecoere will continue to strive to successfully meet the increasing ramp up in aviation demand from its OEM customer base. Post-closing events None to report. Recapitalization Effective date of the reverse stock-split and reduction in the Company’s share capital The reverse stock-split, involving the exchange of 10 existing ordinary shares with a par value of 0.25 euros each for 1 new ordinary share with a par value of 2.50 euros each, took effect on September 15, 2023. The old shares were delisted from the Euronext Paris market after market close on September 14, 2023. The new shares resulting from the reverse stock-split, with ISIN code FR001400JY13, were admitted to trading on the Euronext Paris market on September 15, 2023, the first day of trading. In accordance with articles L. 228-6-1 and R. 228-12 of the French Commercial Code, any new shares that have not been allotted individually and correspond to fractional rights will be sold on the stock market by the account-keepers until October 18, 2023 (inclusive). The proceeds of these sales will be distributed proportionally to the holders of fractional rights as compensation. On September 15, 2023, the Company’s Chief Executive Officer noted the completion of the reduction in the Company’s share capital due to losses, by reducing the par value of ordinary and preference shares, in accordance with the authorization granted by the Combined General Meeting of July 26, 2023 and the decision of the Board of Directors on the same date. The Company’s share capital now stands at 536,195.35 euros, divided into 53,619,535 shares, including 53,565,035 ordinary shares and 54,500 preference shares with a par value of 0.01 euros each. Rights issue On September 18, 2023, the Company’s Board of Directors decided, in accordance with resolutions 21 and 29 of the Combined General Meeting of July 26, 2023, and pursuant to the conciliation agreement signed on June 9, 2023 which homologation by the Toulouse Commercial Court occurred on June 16, 2023, to approve the principle of a capital increase in the Company’s share capital by subscription in cash and by offsetting against certain, liquid and due claims held against the Company, with preferential subscription rights maintained. This capital increase will be for a minimum amount of €100 million and under the terms of the conciliation agreement, the subscription price will be €0.01 per new ordinary share. The capital increase will be open to the public in France only. The capital increase is backstopped by Searchlight Capital Partners (SCP) and that €45 million have already been advanced to the Company via a bridge loan funded on May 15, 2023. This bridge loan will be repaid by offsetting part of the subscription price paid by SCP as part of the capital increase. The terms and conditions of the capital increase will be detailed in a press release to be published once the Autorité des Marchés Financiers has approved the prospectus relating to the operation. The capital increase is expected to be completed by the end of November 2023. Governance At its meeting on September 18, 2023, the Board of Directors appointed Bernd Kessler as an Independent Non-Executive Director to the Board replacing Philip Swash, who resigned from his directorship and Shareholders will be asked to ratify this appointment at the next Annual General Meeting called to approve the 2023 financial statements. Also, the Board has decided to enlist the services of Nick Sanders who will be acting as Advisor to the Board. Following the meeting of Latecoere's Social and Economic Committee on September 13, 2023, Fabienne Lelandais was designated as new director representing the employees. She first joined the Board of Directors at its meeting on September 18, 2023. Fabienne Lelandais graduated from National Institute of Applied Sciences (INSA) with a Master’s degree of environmental Management. After experiences in the automotive Industry and in the Construction Materials Industry, she joined Latecoere in 2016 as an Environmental Health and Safety Coordinator for Toulouse plant and currently for the entire Aerostructures Branch. Bernd Kessler: Bernd Kessler was the CEO of SRTechnics AS, a privately-held global aircraft, aircraft system components and engines service provider. (2008-2010). He was the President and CEO of MTU Maintenance, a subsidiary of MTU Aero Engines AG, an aircraft engine manufacturer (2004-2007) where he was an integral part of the successful IPO of the Company on the Frankfurt Stock Exchange. Prior to 2004, Bernd Kessler held aerospace management and executive positions for 20 years at Honeywell International, Inc. and its preceding company AlliedSignal Corp. Bernd Kessler also serves as Chairman of ProXES GmbH. Since 2010 he serves on the board of Polaris Inc., one of the world’s largest company specializing in designing, engineering and producing off-road vehicles (ORV), which include all-terrain vehicles (ATV) and side-by-side vehicles for recreational and utility use, motorcycles, small vehicles (SV), boats and snowmobiles. Polaris Inc. is a public company traded at the NYSE. He also serves on the board of The Packaging Group GmbH. Nick Sanders: Nick Sanders began his career at the aerospace division of UK engineering company Rolls-Royce. Between 1992 and 2001, he served as a chief engineer and then operations director at aerospace industry component manufacturer TRW Lucas Aerospace. Nick become the CEO of UK engineering and manufacturing firm CompAir group in 2002 where he remained in the role until 2009. From 2009 until 2015, he was a member of the senior team at Better Capital, an early stage venture firm where he was Head of Portfolio. He was also Executive Chairman of aerospace component manufacturer Gardner Aerospace between 2010 and 2019. Nick Sanders serves as Non-Executive Chair of Sertec, a UK automotive components manufacturer, he is also a Non-Executive director of Doncasters and Non-Executive Chair of Walker Precision Ltd. _______________________________________________________ About Latecoere As a Tier 1 partner to major industrial OEMs (Airbus, BAE Systems, Boeing, Bombardier, Dassault Aviation, Embraer, Honda Aircraft Company, Lockheed Martin, Raytheon Technologies, Thales), Latecoere serves the aerospace sector with innovative solutions for a sustainable world. The Group operates in all segments of the aerospace industry (commercial, regional, business, defense, space), in two business areas: Aerostructures (55 % of sales as of December 31, 2022): doors, fuselage, wings and empennage, connecting rods and customer service; Interconnection systems (45 % of sales as of December 31, 2022): wiring, avionics furniture, on-board equipment, electronic products and customer service. At December 31, 2022, the Group employed 5 918 people in 14 countries. Latecoere is listed on Euronext Paris - Compartment B, ISIN Code: FR001400JY13 - Reuters: AEP.PA - Bloomberg: AT.FP Contact Thierry Mahé / Media Relations +33 (0)6 60 69 63 85 LatecoereGroupCommunication@latecoere.aero Appendix – Table of content Half-Year Consolidated financial statements (IFRS) Consolidated Income statement In thousands of euros June 30, 2023 June 30, 2022 Turnover 303,797 212,433 Other income from the activity 5,684 782 Stocked production -3,398 5,630 Purchases consumed and external expenses -200,713 -140,780 Personnel expenses -123,441 -92,620 Taxes -3,360 -2,727 Amortization and impairment -19,160 -15,748 Net allocations to operating provisions 4,012 2,521 Net allocations to current assets 440 2,261 Other income 2,333 8,014 Other expenses -4,533 -1,355 CURRENT OPERATING PROFIT -38,340 -21,589 Other non-current operating income 10,771 10,984 Other non-current operating expenses -21,806 -9,119 OPERATING INCOME -49,375 -19,723 Cost of net financial debt -8,823 -3,328 Foreign exchange gains and losses 1,027 2,580 Latent gains and losses on financial derivatives -40 89 Other financial income and expenses -1,354 -1,457 FINANCIAL PROFIT -9,190 -2,116 Tax on profit -675 -2,829 NET PROFIT FROM CONTINUED ACTIVITIES -59,239 -24,668 NET PROFIT FROM DISCONTINUED ACTIVITIES 1,086 -2,663 NET PROFIT -58,153 -27,331 of which attributable to the owners of the parent company -58,153 -27,331 of which attributable to non-controlling investments 0 0 Hal-Year Consolidated Balance sheet In thousands of euros June 30, 2023 Dec 31, 2022 Goodwill 80,458 80,458 Intangible assets 91,323 93,161 Tangible assets 151,688 155,832 Other financial assets 6,194 8,008 Deferred taxes 2,835 1,341 Financial derivatives 4,366 2,961 Other long-term assets 433 753 TOTAL NON-CURRENT ASSETS 337,295 342,514 Stocks and WIP 199,461 202,546 Trade and other receivables 100,295 81,364 Tax receivables 11,129 9,987 Financial derivatives 165 701 Other current assets 6,342 3,325 Cash and cash equivalents 45,845 73,967 Assets held for sale 17,954 28,084 TOTAL CURRENT ASSETS 381,190 399,974 TOTAL ASSETS 718,486 742,490 In thousands of euros June 30, 2023 Dec 31, 2022 Capital 133,926 133,913 Premiums related to capital 327,251 327,265 Treasury shares -475 -484 Other reserves -421,844 -300,571 Financial derivatives - effective portion -3,460 -11,606 Profit for the period -58,118 -127,088 ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE PARENT -22,720 21,427 COMPANY NON-CONTROLLING INVESTMENTS 0 0 TOTAL SHAREHOLDER EQUITY -22,720 21,427 Loans and financial debts 282,798 341,589 Repayable advances 20,751 20,824 Commitments to employees 11,140 10,856 Non-current provisions 26,625 29,130 Deferred taxes 5,714 5,584 Financial derivatives 2,212 6,776 Other non-current liabilities 7,580 2,473 TOTAL NON-CURRENT LIABILITIES 356,820 417,233 Loans and bank loans 133,250 29,422 Repayable advances 2,254 2,254 Current provisions 4,536 5,008 Trade and other payables 166,092 175,335 Tax payable 3,158 4,743 Contract liabilities 25,938 28,842 Other current liabilities 25,966 21,369 Financial derivatives 9,750 12,424 Liabilities held for sale 13,442 24,432 TOTAL CURRENT LIABILITIES 384,386 303,830 TOTAL LIABILITIES 741,206 721,063 TOTAL SHAREHOLDER EQUITY AND LIABILITIES 718,486 742,490 Half-Year Consolidated cash flow statement In thousands of euros June 30, 2023 June 30, 2022 Net profit for the period -58,153 -27,331 Adjustment for: Amortization and provisions 9,676 10,062 Elimination of re-evaluation profits / losses (fair value) 40 -89 (Gains)/losses on asset disposals 2,896 -10,619 Other elements with no impact on cash flow -1,299 1,633 (*) Other 778 CASH FLOW FROM OPERATIONS AFTER COST OF NET FINANCIAL -46,064 -26,344 DEBT AND TAX Of which cash flow from discontinued operations -11,107 -2,825 Income tax expense 675 2,829 Cost of financial debt 8,823 2,098 SELF-FINANCING CAPACITY BEFORE COST OF FINANCIAL DEBT -36,566 -21,417 AND TAXES Variation in stocks net of provisions 18,886 -15,993 Variation in trade and other receivables net of provisions -27,788 -36,267 Variation in trade and other payables 478 14,317 Taxes paid -2,676 -1,069 CASH FLOW FROM OPERATIONAL ACTIVITIES -47,664 -60,429 Of which cash flow from operating activities related to discontinued -2,578 -9,439 operations Impact of perimeter 0 -18,965 Acquisition of tangible and intangible fixed assets (of which variation in fixed -19,320 -8,215 asset suppliers) Acquisition of financial assets 0 0 Variation in loans and advances granted 1,781 60 Disposal of tangible and intangible fixed assets 1,075 11,000 Dividends received 0 0 CASH FLOW FROM INVESTMENT ACTIVITIES -16,464 -16,120 Of which cash flow from investment activities from discontinued operations -598 -245 Capital increase 0 2,367 Acquisitions or disposals of treasury shares 9 -4 Loan issuance 51,753 250 Loan repayment -1,849 -205 Repayment of debts on lease obligations -5,374 -4,303 Financial interest paid -8,595 -2,280 Flows related to repayable advances -74 0 Other flows related to financing operations -324 CASH FLOW FROM FINANCING ACTIVITIES 35,871 -4,499 +/- impact of foreign exchange variations 145 419 NET CASH FLOW VARIATION -28,113 -80,630 of which net cash flow related to discontinued operations -3,176 -9,684 Cash and cash equivalents at start of year 73,897 277,620 Cash and cash equivalents at end of year 45,784 196,990 |