Jacquet Metal Service SA: First quarter 2019 results

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

Jacquet Metal Service SA (Paris:JCQ):

> Sales €482 million (-4.1% vs. Q1 2018)

> EBITDA €26.5 million (5.5% of sales)

> Net income (Group share) €11.4 million

On May 14, 2019 the Board of Directors, chaired by Éric Jacquet, approved the consolidated financial statements for the three months ended March 31, 2019.

€m   Q1 2019   Q1 2018
Sales 482.0 502.5
Gross margin 112.1 126.0
% of sales 23.3% 25.1%
EBITDA 1 2 26.5 34.5
% of sales 5.5% 6.9%
Adjusted operating income 2 19.1 29.4
% of sales 4% 5.9%
Operating income 20.6 33.4
Net income (Group share) 11.4 22.4

1 Q1 2019 EBITDA benefited from a positive €4.3 million impact relating to the application of IFRS 16 - Leases as from January 1, 2019.
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 and is available at www.jacquetmetalservice.com.

First quarter 2019 sales and earnings

In a changing market environment less favorable than last year, Q1 2019 sales and earnings were impacted by:

> good resilience in volumes sold by STAPPERT and JACQUET-Abraservice, +1.9% and +1.6% respectively from Q1 2018;

> low demand for engineering steels, particularly in Germany, with IMS group volumes down 10.3% from Q1 2018;

> a decline in selling prices (-1.7% versus Q4 2018) resulting in a corresponding decrease in gross margins and earnings.

Market conditions are not expected to change significantly during Q2 2019.

Sales amounted to €482 million, down 4.1% compared to Q1 2018, including the following effects:

> volumes sold: -4.6%;

> price: +3.1% versus Q1 2018 (-1.7% versus Q4 2018);

> scope: -2.6% (i.e. €-13 million in sales) following the disposal of non-strategic assets carried out in 2018.

Gross margin amounted to €112 million and represented 23.3% of sales, compared to 25.1% in Q1 2018.

At constant consolidation, operating expenses excluding non-recurring items amounted to €93 million, down 0.6% compared to Q1 2018.

EBITDA amounted to €26.5 million, or 5.5% of sales. It benefited from a positive €4.3 million impact relating to the application of IFRS 16 - Leases as of January 1, 2019. Adjusted for the impact of IFRS 16, EBITDA amounted to €22.2 million, i.e. 4.6% of sales, compared to 6.9% in Q1 2018.

Adjusted operating income amounted to €19.1 million (4% of sales) compared to €29.4 million (5.9% of sales) in Q1 2018. The application of IFRS 16 had no material impact on adjusted operating income.

Net income (Group share) amounted to €11.4 million (2.4% of sales) compared to €22.4 million (including €2.8 million gain on sales of assets) in Q1 2018 (4.5% of sales). The application of IFRS 16 had no material impact on net income.

Financial position

The Group generated operating cash flow of €+23.1 million during Q1 2019. As of March 31, 2019:

> operating working capital amounted to €452 million, including inventories of €473 million, and represented 24.5% of sales, compared to €447 million at 2018 year-end (including inventories of €493 million).

> net debt came to €179 million (debt to equity ratio 46.1%).

The application of IFRS 16 - Leases led to the recognition on the Group's balance sheet as of March 31, 2019 of:

> a "right of use" asset amounting to €97.6 million, €18 million of which was recorded under "net non-current assets" as of December 31, 2018, according to IAS 17;

> "Lease obligations" under liabilities amounting to €94.6 million, €15.1 million of which was recorded under "Borrowings" as of December 31, 2018, according to IAS 17.

Dividend

The Board of Directors will propose a dividend of €0.70 per share to the General Meeting of Shareholders on June 28, 2019.

Q1 2019 earnings by division excluding impacts of IFRS 16

   

 

Stainless steel and
wear-resistant quarto
plates

 

 

 

 

Stainless steel long
products

 

 

 

Engineering steels

€m Q1 2019 Q1 2019 Q1 2019
Sales 112.1 133.0 241.8
Change vs 2018 +7.7% +3.0% -9.9%
Price effect +6.2% +1.0% +3.1%
Volume effect +1.6% +1.9% -10.3%
Change in consolidation -2.6%
EBITDA 1 2 8.3 5.0 7.4
% of sales 7.4% 3.8% 3.1%
Adjusted operating income 2 6.2 5.2 6.7
% of sales 5.5% 3.9% 2.8%

1 Non-division operations contributed €1.4 million to Q1 2019 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.

JACQUET - Abraservice

specializes in the distribution of stain- less steel and wear-resistant quarto plates. JACQUET and Abraservice have separate sales networks. The division generates 74% of its business in Europe and 20% in North America.

Sales amounted to €112.1 million, up +7.7% from €104.1 million in Q1 2018:

> volumes: +1.6%;

> prices: +6.2%

(+1.3% compared to Q4 2018).

The gross margin amounted to €34.7 million (30.9% of sales) compared to €32.7 million (31.5% of sales) in Q1 2018.

EBITDA amounted to €8.3 million (7.4% of sales) compared to €7.5 mil- lion (7.2% of sales) in Q1 2018.

STAPPERT specializes in the dis- tribution of long stainless steel prod- ucts in Europe. The division generates 42% of its sales in Germany, the largest European market.

Sales amounted to €133 million, up

+3% from €129.2 million in Q1 2018:

> volumes: +1.9%;

> prices: +1%

(-3.9% compared to Q4 2018).

The gross margin amounted to €25 million (18.8% of sales) compared to €27.8 million (21.5% of sales) in Q1 2018.

EBITDA amounted to €5 million (3.8% of sales) compared to €7.3 million (5.7% of sales) in Q1 2018.

IMS group specializes in the distribution of engineering steels, mostly in the form of long products. The division generates 47% of its sales in Germany, the largest Euro- pean market.

Sales amounted to €241.8 million, down -9.9% from €268.4 million in Q1 2018:

> volumes: -10.3%;

> prices: +3.1%

(-2.0% compared to Q4 2018);

> change in consolidation: -2.6%.

The gross margin amounted to €52.4 million (21.7% of sales) compared to €63.9 million (23.8% of sales) in Q1 2018.

EBITDA amounted to €7.4 million (3.1% of sales) compared to €17.7 million (6.6% of sales) in Q1 2018 (€16.9 million or 6.5% at constant consolidation scope).

Financial information

 

Income statement

€m  

Q1 2019

 

Q1 2018

Sales 482.0 502.5
Gross margin 112.1 126.0
% of sales 23.3% 25.1%
EBITDA 1 2 26.5 34.5
% of sales 5.5% 6.9%
Adjusted operating income 2 19.1 29.4
% of sales 4% 5.9%
Operating income 20.6 33.4
Net income (Group share) 11.4 22.4

1 Q1 2019 EBITDA benefited from a positive €4.3 million impact relating to the application of IFRS 16 - Leases as from January 1, 2019.

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 and is available at www.jacquetmetalservice.com.

Cash flow
€m   Q1 2019   Q1 2018
Operating cash flow before change in working capital 23.7 30.5
Change in working capital (0.6) (33.8)
Cash flow from operating activities 23.1 (3.3)
Capital expenditure (5.6) (5.3)
Asset disposals 0.2 4.1
Dividends paid to shareholder of Jacquet Metal Service SA
Interest paid (2.7) (2.2)
Other movements 20.2 (1.7)
Change in net debt 35.2 (8.4)
     
Net debt brought forward 214.5 183.1
Net debt carried forward 179.4 191.5

Balance sheet

   
€m 31.03.19 31.12.18
Goodwill 68.3 68.3
Net non-current assets 139.6 155.9
Right of use 1 97.6
Net inventory 473.1 493.0
Net trade receivables 227.7 182.4
Other assets 93.8 100.2
Cash & cash equivalents 141.4 119.4
Total assets 1,241.6 1,119.0
Shareholders’ equity 389.4 376.8
Provisions (including provisions for employee benefit obligations) 93.7 96.2
Trade payables 248.6 228.3
Borrowings 324.7 337.8
Other liabilities 90.6 80.0
Lease obligations 1 94.6
Total equity and liabilities 1,241.6 1,119.0
1 Application of IFRS 16 - Leases as from January 1, 2019.

Activity report available : www.jacquetmetalservice.com - H1 2019 results : September 18, 2019 after close of trading

Jacquet Metal Service is a European leader in the distribution of specialty steels. The Group operates and develops a portfolio which currently consists of four brands:

JACQUET stainless steel quarto plates - STAPPERT stainless steel long products - Abraservice wear-resistant quarto
plates - IMS group engineering steels. With a headcount of 3,291 employees, Jacquet Metal Service has a network of 111 distribution centers 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
Chief Financial Officer
comfi@jacquetmetals.com

NewCap
Investor Relations
Emmanuel Huynh
Tel. : +33 1 44 71 94 94
jacquetmetalservice@newcap.eu

Contacts

Jacquet Metal Service
Thierry Philippe
Chief Financial Officer
comfi@jacquetmetals.com

NewCap
Investor Relations
Emmanuel Huynh
Tel. : +33 1 44 71 94 94
jacquetmetalservice@newcap.eu