Jacquet Metal Service SA: 2017 Annual Results

  • Sales €1,741 million (+ 9.6% vs. 2016)
  • EBITDA €106.4 million (6.1% of sales)
  • Net income (Group share) €46.2 million (2.7% of sales)

SAINT-PRIEST, France--()--Regulatory News:

Jacquet Metal Service SA (Paris:JCQ):

On March 7, 2018 the Board of Directors, chaired by Éric Jacquet, examined the consolidated financial statements for the year ended December 31, 2017.

€m   Q4 2017   Q4 2016   2017   2016
Sales   417.9   369.5   1,741.1   1,588.3
Gross margin   107.8   95.1   443.0   385.9
% of sales   25.8%   25.7%   25.4%   24.3%
EBITDA1   23.6   14.5   106.4   54.7
% of sales   5.7%   3.9%   6.1%   3.4%
Adjusted operating income1   17.5   7.8   84.2   33.5
% of sales   4.2%   2.1%   4.8%   2.1%
Operating income 2   14.8   14.2   80.8   40.8
Net income (Group share) ²   9.1   8.3   46.2   16.0

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 2016 operating income and net income (Group share) include a non-recurring income of €6.4 million recorded in the fourth quarter and relating to the adjustment to the S+B Distribution acquisition price.

2017 Sales and earnings

Headlines

2017 was marked by:

  • The positive impacts of measures to improve operating efficiency of S+B Distribution, which contributed €15.8 million to Group EBITDA in 2017 (versus €2.6 million in 2016 and a €6.2 million loss in 2015).
  • 2017 sale prices +8.6% above 2016 sale prices, which were down 8% compared to 2015 sale prices.
  • A +4.1% increase in volumes sold (excluding S+B Distribution).

In this context, all divisions improved their profitability. Accordingly, the Group’s gross margin rose from 24.3% in 2016 to 25.4% in 2017, while EBITDA increased by 95% from €54.7 million in 2016 to €106.4 million in 2017.

Fourth quarter 2017

Group sales amounted to €418 million, +13.1% compared to Q4 2016, with the following effects:

  • Volumes: +7.3%.
  • Price: +5.8%. The price effect compared to Q3 2017 was +2.4%.

Group EBITDA came to €23.6 million (5.7% of sales) compared to €14.5 million (3.9% of sales) in Q4 2016.

Net income (Group share) amounted to €9.1 million compared to €8.3 million last year. Q4 2016 net income (Group share) includes a non-recurring income of €6.4 million relating to the adjustment to the S+B Distribution acquisition price.

Full-year results

Group sales amounted to €1,741 million, +9.6% compared to 2016, including the following effects:

  • Volumes: +1% (+4.1% excluding S+B Distribution),
  • Price: +8.6%.

Gross margin amounted to €443 million, representing 25.4% of sales (Q4: 25.8%) compared to 24.3% in 2016.

Operating expenses excluding non-recurring items amounted to €358.8 million in 2017, a 1.8% increase from €352.4 million in 2016 mainly due to the increase in Group sales and profit margins.

As a result, EBITDA came to €106.4 million (6.1% of sales) compared to €54.7 million (3.4% of sales) in 2016.

Net income (Group share) came to €46.2 million (2.7% of sales) compared to €16 million (1% of sales) in 2016.

Financial position at December 31, 2017

In 2017 the Group generated operating cash flow of €79.9 million (versus €43.1 million in 2016) and incurred capital expenditure of €31.9 million (versus €19.2 million in 2016).

As of December 31, 2017, operating working capital amounted to €383 million, including inventory of €418 mil- lion, and represented 22% of sales versus 23.4% at December 31, 2016. Group net debt stood at €183 million (€205 million at the end of 2016) compared to shareholders’ equity of €332 million, resulting in a net debt to equity ratio of 55.2% compared to 69.2% at December 31, 2016.

In February 2018, the Group issued a Schuldscheindarlehen (private placement of debt instruments under German law) for €150 million. Maturing in April 2023 (repayable at maturity) and subject to improved financial conditions, this placement is intended to refinance the existing Schuldscheindarlehen (€88 million, maturing in October 2020) and to finance ongoing business and Group’s development.

2017 Earnings by division

   

JACQUET – Abraservice
Stainless steel and
wear-resistant quarto plates

 

 

STAPPERT

 

Stainless steel long products

 

 

IMS group

 

Engineering steels

 

   
€m   Q4 2017   2017   Q4 2017   2017   Q4 2017   2017
Sales   91.8   378.4   105.0   456.6   219.4   900.6
Change vs. 2016   19.2%   17.0%   9.8%   9.8%   12.1%   6.4%
Price effect   4.2%   8.9%   7.4%   12.1%   5.4%   6.9%
Volume effect   15.0%   8.1%   2.5%   -2.2%   6.7%   -0.5%
EBITDA 1 2   4.9   22.6   6.0   28.2   8.9   44.2
% of sales   5.3%   6.0%   5.7%   6.2%   4.1%   4.9%

Adjusted operating income 2

  2.9   13.7   4.9   25.6   6.8   36.3
% of sales   3.1%   3.6%   4.7%   5.6%   3.1%   4.0%

1 Non-division operations contributed €3.9 million to Q4 2017 EBITDA and €11.4 million to 2017 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.

The JACQUET – Abraservice division specializes in the distribution of stainless steel and wear-resistant quarto plates. JACQUET and Abraservice have separate sales networks. It generated 74% of its business in Europe and 18% in North America.

2017 sales amounted to €378.4 million, a 17% increase compared to 2016 (Q4: +19.2%), including the following effects:

  • Volumes: +8.1% (Q4: +15%)
  • Price: +8.9% (Q4: +4.2%).

The gross margin rate came to 30.4% (Q4: 30.8%), while gross margin came to €115.1 million compared to €99.6 million in 2016.

EBITDA came to €22.6 million (6% of sales) compared to €10.8 million (3.3% of sales) in 2016.

The STAPPERT division specializes in the distribution of long stainless steel products in Europe. It generated 41% of its sales in Germany, the largest European market.

Sales amounted to €456.6 million, a 9.8% increase from €415.8 million in 2016 (Q4: +9.8%), including the following effects:

  • Volumes: -2.2% (Q4: +2.5%)
  • Price: +12.1% (Q4: +7.4%).

The gross margin rate rose 1 percentage point to 22.7%, while gross margin came to €103.7 million compared to €90.2 million in 2016.

EBITDA came to €28.2 million (6.2% of sales) compared to €16.3 million (3.9% of sales) in 2016.

The IMS group division specializes in the distribution of engineering steels, mostly in the form of long products. It generated 48% of its sales in Germany, the largest European market.

Sales amounted to €900.6 million, a 6.4% increase compared to 2016 (Q4: +12.1%), including the following effects:

  • Volumes: -0.5% (Q4: +6.7%)
  • Price: +6.9% (Q4: +5.4%).

The gross margin rate rose 1.6 percentage point to 24.1% (Q4: 24.1%), while gross margin came to €217.5 million compared to €190.8 million in 2016.

EBITDA amounted to €44.2 million (4.9% of sales) compared to €18.3 million (2.2% of sales) in 2016. S+B Distribution (the distribution business purchased from the Schmolz+Bickenbach group in July 2015) contributed €15.8 million to EBITDA (3.1% of sales) versus €2.6 million in 2016 (0.5% of sales).

Key financial information    
Income statement  
€m   2017   2016
Sales   1,741.1   1,588.3
Gross margin   443.0   385.9
% of sales   25.4%   24.3%
EBITDA 1   106.4   54.7
% of sales   6.1%   3.4%
Adjusted operating income 1   84.2   33.5
% of sales   4.8%   2.1%
Operating income 2   80.8   40.8
Net income (Group share) ²   46.2   16.0

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 2016 operating income and net income (Group share) include a non-recurring income of €6.4 million recorded in the fourth quarter and relating to the adjustment to the S+B Distribution acquisition price.

Balance sheet

€m   31.12.17   31.12.16
Goodwill   68.3   68.5
Net non-current assets   156.2   147.6
Net inventory   418.0   376.2
Net trade receivables   189.3   171.3
Other assets   94.0   91.7
Cash & cash equivalents   102.1   73.0
Total assets   1,027.9   928.3
Shareholders’ equity   331.8   296.5
Provisions (including provisions for employee benefit obligations)   106.5   112.3
Trade payables   224.0   176.4
Total borrowings   289.6   281.2
Other liabilities   76.0   61.8
Total equity and liabilities   1,027.9   928.3

Cash flow

€m   2017   2016
Operating cash flow before change in working capital   89.2   45.3
Change in working capital   (9.3)   (2.2)
Cash flow from operating activities   79.9   43.1
Capital expenditure   (31.9)   (19.2)
Asset disposals   1.0   1.2
Dividends paid to shareholders of Jacquet Metal Service SA   (11.8)   (9.5)
Interest paid   (10.0)   (9.6)
Other movements   (5.0)   2.3
Change in net debt   22.1   8.3
         
Net debt brought forward   205.3   213.5
Net debt carried forward   183.1   205.3

Activity report available: www.jacquetmetalservice.com.Q1 2018 release: Friday, May 4, 2018 before start of trading

Jacquet Metal Service is a European leader in the distribution of specialty steels. The Group operates and develops a portfolio currently comprising four brands: JACQUET (stainless steel quarto plates), STAPPERT (long stainless steel products), Abraservice (wear-resistant quarto plates) and IMS group (engineering steels).
With 3,329 employees, Jacquet Metal Service has a network of 110 distribution centers located in 25 countries in Europe, China and North America.

Compartment B
ISIN : FR0000033904
Reuters : JCQ.PA
Bloomberg : JCQ FP

Contacts

Jacquet Metal Service
Thierry Philippe
Group CFO
comfi@jacquetmetals.com
or
NewCap - Investor relations
Julien Perez, T : +33 1 44 71 94 94
jacquetmetalservice@newcap.eu

Contacts

Jacquet Metal Service
Thierry Philippe
Group CFO
comfi@jacquetmetals.com
or
NewCap - Investor relations
Julien Perez, T : +33 1 44 71 94 94
jacquetmetalservice@newcap.eu