- Decline in Group revenue and recurring EBITDA predominately due
to negative impact of Covid-19 on customer production rates
- Rapid and proactive measures taken to curtail operating costs
and preserve Group liquidity
- Negative revenue trends to persist in H2 2020, partially offset
by operating efficiency improvements
Regulatory News:
Latécoère (Paris:LAT), a tier 1 partner to major international
aircraft manufacturers, today announced that its Board of Directors
under the Chairmanship of Pierre Gadonneix, at their meeting on
September 16, 2020, adopted and authorised the publication of
Latécoère’s financial statements for the six-month period ended
June 30, 20201.
Philip Swash, Group Chief Executive Officer, commented:
“Latécoère’s H1 2020 results are consistent with the challenges
affecting the broader aerospace industry. The Covid-19 crisis has
led a number of our key customers to curtail aircraft production,
which has in turn stunted the “pre-Covid” top-line growth trends we
were experiencing in both Aerostructure and Interconnected Systems.
We expect lower than normal production rates to prevail for the
remainder of the year, negatively impacting our full year 2020
revenues.”
“Although we cannot control the exogenous factors impacting our
business, we have taken prudent measures since March to reduce
operating costs and strengthen our liquidity. We have reduced
capital expenditures and will continue to take steps to ensure our
cost base is aligned with our operating environment while
preserving our engineering and operational strengths. During this
difficult period, we have put in place across all our facilities
extensive sanitary measures to protect our employees’ health. We
have also made every effort to stay close to our customers at all
times and believe we are well positioned to quickly regain the
positive momentum we had before the Covid-19 crisis began.”
A limited review of the financial statements has been performed
by the statutory auditors.1
First Half Year 2020 Highlights and Financial Summary
(Limited review - € million)
H1 2020
H1 2019
Revenue
231.9
371.7
Reported growth
(37.6)%
15.9%
Growth at constant exchange rates
(36.8)%
13.1%
Recurring EBITDA *
(17.2)
28.1
Recurring EBITDA * Margin on Revenue
(7.4)%
7.6%
Recurring Operating Income
(34.0)
10.8
Recurring Operating Margin on Revenue
(14.6)%
2.9%
Non-recurring items
(34.6)
(7.9)
o/w Assets depreciation
(28.2)
-
Operating Income
(68.6)
2.9
Net Cost of debt
(1.6)
(2.7)
Other financial income/(expense)
(11.7)
(5.2)
Financial result
(13.3)
(7.9)
Income tax
(12.1)
(1.0)
Net Income
(94.0)
(5.9)
Operating free cash flow
(5.2)
(46.3)
* Recurring EBITDA corresponds to recurring operating income
before recurring amortization, depreciation and impairment losses.
Details of non-recurring items are presented in the Group's
accounting principles from consolidation financial statements
Latécoère’s 2020 half yearly financial results reflect the
overall decline in production rates across the aerospace sector. As
previously indicated, the crisis had a very strong impact on the
second quarter with a decline in revenue of (56.8)% at constant
exchange rates in this quarter alone. Overall in H1 2020, the Group
revenue decreased by (37.6)% to € 231.9 million at constant
exchange rates, or (36.8)% on an organic basis with all business
segments being impacted.
Latécoère H1 2020 recurring EBITDA amounted to € (17.2) million,
representing a margin of (7.4)%. Latécoère H1 2020 recurring
operating income amounted to € (34) million compared to € 10.8
million in the same period of 2019.
Latécoère net financial results totalled € (13.3) million in H1
2020 compared to € (7.9) million in H1 2019. Financial results
include foreign exchange losses for €(9.8) million and cost of debt
limited to only €(1.6) million.
The Group net income totalled € (94) million. The anticipation
of a slow recovery in air traffic and the knock on effects on the
Aerospace industry has led the Group to impair some assets in the
Aerostructures branch for €(28.2) million and depreciate the
remaining deferred tax assets still accounted for in the balance
sheet for €(10.1) million.
As a result of the strong measures taken to mitigate the effects
of the crisis on Latécoère liquidity, Operating Free Cash Flow over
the period was €(5.2) million compared to €(46.3) million a year
ago. Net debt remained relatively stable at €(124) million
including the € 60 million Prêt Garanti Etat loans announced with
Q1 2020 results, versus €(115.8) million at the end of 2019, with a
strong cash position of €44.5 million (vs €33.8 at the end of
2019).
Adaptation plan
The Group has taken swift action to mitigate the effects of the
Covid-19 crisis, including reducing its overseas workforce by 35%
in 2020. As a result, the Group booked one-time restructuring costs
totalling €1.6 million for the period and anticipates additional
one-time costs in the second half as it completes the restructuring
of its operations outside of France.
Purchasing programs have also been scaled back in line with the
subdued activity, decreasing by more than (40)% of raw materials,
supplies expenses, and sub-contracting expenses. Work-in-progress
and inventories have thus stabilized over the period at €176.3
million versus €179.8 at the end of 2019. Working Capital has also
improved strongly to €176.5 million at the end of June versus
€208.6 million in December 2019.
Capital expenditures have been reduced by (60)% to €6.4 million
in H1 2020 compared to €16.2 million in H1 2019.
Despite the crisis, the Group intends to continue to invest in
its future and will maintain its R&T efforts in 2020 at a level
of €5.5 million similar to 2019. The 14% decrease in R&T
expenses seen in H1 2020 at €2.5 million compared to H1 2019 (€2.9
million) is largely due to phasing of expenses on some
programs.
Aerostructures
Revenue in Latécoère’s Aerostructures division declined (41.7)%
at constant exchange rates, or (42.7)% as reported for the first
half of 2020. Revenue totalled € 123.5 million compared to € 215.3
million for the same period in 2019, in large part due to a €70
million reduction in production rates in the second quarter alone
as a result of the temporary stoppage of our customers’ production.
The year-over-year Aerostructures revenue comparison is also
affected by higher production rates in Q1 2019 as Latécoère
insourced production of primary parts after the default of a
supplier.
Recurring EBITDA in the division was €(9.1) million compared to
€16.2 million in H1 2019, with the decline in production rates
partially offset by a reduction in operating costs in response to
Covid-19.
Aerostructures
(Limited review - € million)
H1 2020
H1 2019
Consolidated Revenue
123.5
215.3
Growth at constant exchange rates
(41.7)%
14.5%
Inter-segment Revenue
11.1
8.9
Revenue
134.6
224.2
Recurring EBITDA*
(9.1)
16.2
Recurring EBITDA* Margin on Revenue
(6.8)%
7.2%
Recurring Operating Income
(17.7)
8.7
Recurring Operating Margin on Revenue
(13.1)%
3.9%
* Recurring EBITDA corresponds to recurring operating income
before recurring amortization, depreciation and impairment losses.
Details of non-recurring items are presented in the Group's
accounting principles from consolidation financial statements
Interconnection Systems
The Interconnection Systems revenue of €108.5 million represents
a (30.2)% decline at constant exchange rates and (30.7)% on a
reported basis compared to €156.4 million in H1 2019. Consistent
with the commercial pressure impacting the sector, approximately
€35 million of this decline is attributable to production rate
declines compounded by the decrease in development activity in the
Mitsubishi Aircraft SpaceJet M90 program noted in Q1 as well as a
decline in Kitting and Service activities.
Recurring EBITDA for Interconnection Systems was € (8.2) million
compared to €11.9 million in H1 2019 affected similarly by the
decline in production rates.
Due to the health crisis in Mexico and France, the closing of
the acquisition of Bombardier Interconnection Systems activities
has been delayed and is now anticipated to take place in the last
quarter of the year. In a depressed environment, this acquisition
is key to help the Group strengthen and diversify its business
development on new platforms and in the North American market.
Interconnection Systems
(Limited review - € million)
H1 2020
H1 2019
Consolidated Revenue
108.5
156.4
Growth at constant exchange rates
(30.2)%
11.3%
Inter-segment Revenue
0.5
1.0
Revenue
108.9
157.4
Recurring EBITDA*
(8.2)
11.9
Recurring EBITDA * Margin on Revenue
(7.5)%
7.5%
Recurring Operating Income
(16.4)
2.1
Recurring Operating Margin on Revenue
(15.0)%
1.3%
* Recurring EBITDA corresponds to recurring operating income
before recurring amortization, depreciation and impairment losses.
Details of non-recurring items are presented in the Group's
accounting principles from consolidation financial statements
FY 2020 Outlook
Latécoère does not anticipate an improvement in market
conditions during the second half of 2020 as high uncertainty
remains as to the duration and intensity of the Covid-19 pandemic
and its impact on the commercial aerospace sector. As a result, it
expects FY 2020 revenues to decline by approximately (40)% compared
to FY 2019. In the second half of the year, Latécoère will continue
to deploy the necessary adaptation measures to adjust its activity
to the slow recovery in air traffic expected in the coming
years.
Latécoère does not intend to publish Q3 revenues this year and
is re-evaluating the practice of quarterly revenue reporting on an
ongoing basis.
_________________________________________________________________________________
About Latécoère
Latécoère is a tier 1 partner to major international aircraft
manufacturers (Airbus, Embraer, Dassault, Boeing, Bombardier and
Mitsubishi Aircraft), in all segments of the aeronautical market
(commercial, regional, corporate and military aircraft),
specializing in two fields:At 30 June 2020, Latécoère employed
4,714 people in 13 different countries. Latécoère, a French
corporation (société anonyme) with capital of €189,637,036 divided
into 94,818,518 shares with a par value of €2, is listed on
Euronext Paris - Compartment B. ISIN codes: FR0000032278 - Reuters:
LAEP.PA - Bloomberg: LAT.FP
- Aerostructures (58% of total revenue): fuselage sections and
doors.
- Interconnexion systems (42% of total revenue): onboard wiring,
electrical harnesses and avionics bays.
At 30 June 2020, Latécoère employed 4,714 people in 13 different
countries. Latécoère, a French corporation (société anonyme) with
capital of €189,637,036 divided into 94,818,518 shares with a par
value of €2, is listed on Euronext Paris - Compartment B. ISIN
codes: FR0000032278 - Reuters: LAEP.PA - Bloomberg: LAT.FP
Appendix – Table of content
Glossary
Profit & Loss
Balance Sheet
Cash Flow Statement
Glossary
Growth at constant exchange rate
The Group measures the growth of its revenue exclusive of
EUR/USD currency impacts to help understand revenue trends in its
business.
The impact of exchange rate is offset by applying a constant
EUR/USD exchange rate for the concerned periods.
Organic Growth
Organic growth excludes EUR/USD currency impacts (by applying a
constant exchange rate for the periods considered) and by applying
a constant Group structure. The constant Group structure is
obtained by:
- Eliminating revenues of companies acquired during the
period,
- Adding to the previous period full-year revenues of companies
acquired in the previous period,
- Eliminating revenues of companies sold during the current or
comparable periods.
Recurring operating income
In order to better reflect the current economic performance, the
Group uses a sub-total named “recurring operating income” which
excludes from operating income, non-recurring items (income or
expenses) which are inherently difficult to predict due to their
unusual, irregular or non-recurring nature. Details of
non-recurring items are presented in the Group's accounting
principles from consolidation financial statements.
EBITDA
EBITDA corresponds to operating income before depreciation,
amortization, and impairment losses.
Recurring EBITDA
Recurring EBITDA corresponds to recurring operating income
before recurring amortization, depreciation and impairment losses.
Details of non-recurring items are presented in the Group's
accounting principles from consolidation financial statements.
Operating free cash flow
Operating free cash flow corresponds to cash flow from operating
activities and from investing activities excluding income tax
paid.
Recurring Operating free cash flow
Recurring Operating free cash flow corresponds to operating cash
flow excluding non-recurring items from operating activities and
investing activities. Details of non-recurring items are presented
in the Group's accounting principles from consolidation financial
statements.
Net debt
Net debt corresponds to loans and bank borrowings (over one
year) and loans and bank borrowings (less than one year) which
include factoring and bank overdrafts less cash and cash
equivalents. Net debt also includes financial debt from finance
lease contracts.
Backlog
The backlog corresponds to firm orders published by OEMs
(Original Equipment Manufacturers) and are not yet recognized in
revenue.
A limited review of the financial statements has been performed
by the statutory auditors.[1]
Profit & Loss
(‘000 EURO)
June 30, 2020
June 30, 2019
Revenue
231 917
371 736
Other operating revenue
306
305
Change in inventory : work-in-progress
& finished goods
-6 751
5 255
Raw material, Other Purchases &
external charges
-148 475
-250 964
Personnel expenses
-94 285
-105 730
Taxes
-3 927
-5 926
Amortization
-16 727
-17 298
Net operating provisions charges
870
711
Depreciation of current assets
-4 519
4 712
Other operating income
- 539
8 952
Other operating expenses
-2 915
-939
RECURRING OPERATING INCOME
-33 967
10 814
Other non-recurring operating income and
expenses
-34 627
- 7 869
OPERATING INCOME
-68 594
2 945
Net Cost of debt
-1 599
-2 667
Foreign Exchange gains/losses
-9 830
-1 298
Change in fair value of financial
derivative instruments
-755
- 3 876
Other financial incomes and expenses
-1 111
-48
FINANCIAL RESULTS
-13 295
-7 890
Income tax
-12 128
-968
NET RESULT FOR THE PERIOD
-94 016
-5 913
- Of which, Owners of the parent
-94 016
-5 913
- Of which, non-controlling interests
0
0
Balance Sheet
ASSETS
(‘000 EURO)
June 30, 2020
June 30, 2019
Intangible assets
72 256
77 799
Tangible assets
135 482
173 043
Other financial assets
3 499
3 698
Deferred tax assets
226
10 279
Financial non-current assets
391
1 020
Other non-current assets
215
168
TOTAL NON-CURRENT ASSETS
212 069
266 007
Inventories
176 312
179 757
Accounts receivable
86 397
157 839
Tax receivable
15 972
16 003
Financial derivate instruments
2 519
1 897
Other current assets
2 745
2 232
Cash & Cash Equivalents
44 451
33 790
TOTAL CURRENT ASSETS
328 396
391 518
TOTAL ASSETS
540 465
657 525
LIABILITIES & EQUITY
(‘000 EURO)
June 30, 2020
June 30, 2019
Share capital
189 637
189 637
Share premium
213 658
213 658
Treasury stock
-547
-1 842
Other reserves
-187 290
-147 486
Derivates future cash flow hedges
-21 567
-21 883
Group net result
-94 016
-32 864
EQUITY ATTRIBUTABLE TO PARENTS
OWNERS
99 874
199 220
NON CONTROLLING INTERESTS
0
0
TOTAL EQUITY
99 874
199 220
Loans and banks borrowings
100 904
98 190
Refundable Advances
22 285
22 824
Employee benefits
21 347
20 400
Non-current provisions
7 432
8 876
Deferred tax liabilities
23
12
Financial derivative instruments
1 500
8 205
Other non-current liabilities
2 298
4 638
TOTAL NON-CURRENT LIABILITIES
155 790
163 146
Loans and bank borrowings (less than 1
year)
67 583
51 366
Refundable Advances
2 580
2 634
Current provisions
3 619
1 997
Accounts payable
116 095
146 292
Income tax liabilities
1 666
1 918
Contracts liabilities
41 254
43 609
Other current liabilities
2 314
4 055
Financial derivative instruments
49 691
43 288
TOTAL CURRENT LIABILITIES
284 801
295 159
TOTAL LIABILITIES
440 591
458 305
TOTAL EQUITY & LIABILITIES
540 465
657 525
Cash Flow Statement
(‘000 EURO)
June 30, 2020
June 30, 2019
Net result for the period
-94 016
-5 913
Ajustement related to non-cash
activities :
Depreciation and provisions
46 445
16 362
Fair value gains/losses
755
3 876
Net (gains)/losses on disposal assets
71
-81
Other non-cash items
1 874
667
CASH FLOWS AFTER COST OF DEBT AND
INCOME TAXES
-44 871
14 911
Income taxes
12 128
968
Net Cost of debt
1 593
2 669
CASH FLOWS BEFORE COST OF DEBT AND
INCOME TAX
-31 150
18 548
Changes in inventories net of
provisions
-3 841
-10 150
Changes in client and other receivables
net of provisions
69 795
-35 642
Changes in suppliers and other
payables
-33 759
-2 939
Income tax paid
-1 248
-4 025
CASH FLOWS FROM OPERATING
ACTIVITIES
-23
-34 208
Effect of changes in group structure
0
113
Purchase of tangible and intangible assets
(including changes in payables to fixed asset suppliers)
-6 494
-16 251
Purchase of financial assets
0
0
Increase (decrease) in loans and advances
made
57
-91
Proceeds from sales of tangible and
intangible assets
1
84
Dividends received
0
3
CASH FLOWS FROM INVESTING
ACTIVITIES
-6 436
- 16 142
Proceeds from issue of shares
0
0
Purchase or disposal of treasury
shares
1296
-4 676
Proceeds from borrowings
60 000
10 000
Repayment of borrowings
0
0
Repayments of lease liabilities
-2 816
-1 503
Financial interest paid
-1 448
-2 605
Dividends paid
0
0
Flows from refundable advances
-594
-803
Other flows from financing operation
-38 538
-72
CASH FLOW FROM FINANCING
ACTIVITIES
17 900
341
Effects of exchange rate changes
-777
103
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
10 664
-49 906
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200916006011/en/
Taddeo Michael Henson / Investor Relations +44 (0) 7551
720441 Pierre-Jean Le Mauff / Media Relations +33 (0)7 77 78 58 67
teamlatecoere@taddeo.fr
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