Business Wire

Latécoère Reports H1 2021 Results

  • 2021 outlook confirmed, including improved activity and recurring margin in H2 2021 excluding the positive impact of the acquisition of TAC
  • First half 2021 results still impacted by the effects of the crisis, but we expect the first quarter to be the low point
  • Reported financials include the Bombardier’s electrical wiring business in Querétaro (Mexico) from February 1, 2021, onwards, and Technical Airborne Components (TAC) as of May 1, 20211

Major post-closing events

Strengthening of the Group’s balance sheet: capital increase of €222.4 million completed on August 4, 2021 and obtention of €130 million in French State backed loans (PGE); these resources will enable the Group to pursue its external growth strategy and secure its liquidity.

TOULOUSE, France–(BUSINESS WIRE)–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 13, 2021, adopted Latécoère’s financial statements for the six-month period ended June 30, 2021.

Thierry Mootz, Group Chief Executive Officer, stated: “The recapitalization of Latécoère was a success giving us the means of our growth ambitions. H1 results have been impacted by the Covid-19 crisis and it seems that the lowest level of activity has been reached during this period.”

Adjusted results for the first half of 2021

Preamble

In order to better monitor and compare its operating and financial performance, the Group has decided to disclose adjusted financial statements alongside the consolidated financial statements. The explanation of the restatements is presented in the appendix to this press release.

All figures are expressed in adjusted figures, unless otherwise stated.

(Adjusted data – € thousand)   Jun, 30 2021   Jun 30, 2020
Revenue  

181.1

 

 

231.9

 

Reported growth  

-21.9

%

 

-37.6

%

On like-for-like and constant exchange rate basis  

-31.7

%

 

-36.8

%

Recurring EBITDA *  

(23.0

)

 

(14.1

)

Recurring EBITDA margin on revenue  

-12.7

%

 

-6.1

%

Recurring operating income  

(36.5

)

 

(30.8

)

Recurring EBIT margin on revenue  

-20.2

%

 

-13.3

%

Non recurring items  

(2.8

)

 

(34.6

)

Impairment depreciation    

(28.2

)

Other non recurring items  

(2.8

)

 

(6.4

)

Operating income  

(39.3

)

 

(65.4

)

Net Cost of debt  

(1.4

)

 

(1.6

)

Other financial income/(expense)  

(14.2

)

 

(10.7

)

Financial result  

(15.6

)

 

(12.3

)

Income tax  

(1.7

)

 

(12.1

)

Net result  

(56.6

)

 

(89.8

)

Operating free cash flows  

(16.7

)

 

(5.2

)

* Adjusted 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 half-year financial results for 2021 reflect the low level of production in the aeronautical sector as a whole. As previously indicated, the crisis continued into the first half of 2021, reaching its low point in the period. Overall, in the first half of 2021, the Group’s revenue decreased by (21.9)% to €181.1 million on a reported basis or (31.7)% on a like-for-like basis, with all business segments being affected. It should be noted that the 2020 business activity included a pre-covid 1st quarter 2020.

Recurring EBITDA in the first half of 2021 amounted to €(23.0) million, representing a margin of (12.7)%, in decline from the first half of 2020. Latécoère’s current operating income in the first half of 2021 amounted to €(36.5) million, compared to €(30.8) million for the same period in 2020.

Latécoère’s net financial result amounted to €(15.6) million in the first half of 2021 compared to €(12.3) million in the first half of 2020. Other financial income and expenses include the impact of the amortisation of the shareholder loan for an amount of €(16.4) million following the early repayment of the shareholder loan in August 2021 for an amount of €52.5 million in accordance with the conciliation protocol approved on July 2, 2021.

The Group’s net result amounted to €(56.6) million in the first half of 2021 compared to a loss of €(89.9) million which included notably an asset impairment of the Aerostructures division of €(28.2) million.

Free cash flow from operations for the period was €(16.7) million compared to €(5.2) million a year ago.

Net debt increased by €64.4 million (€40.6 million excluding IFRS 16) and includes the impact of the accelerated amortisation of the shareholder loan of €16.4 million, the change in lease liabilities of €23.4 million (mainly related to the lease of the Group’s new headquarters) and a deterioration in cash and cash equivalents of €22.1 million. The cash position at June 30, 2021 amounts to €55.6 million.

Adaptation plan

Following previous announcements made, Latécoère has continued to further adjust its cost base and industrial footprint to ensure its long-term sustainability in the post Covid-19 reality.

Aerostructures

Revenue in Latécoère’s Aerostructures Division declined by (36.5)% at constant exchange rates and scope of consolidation, or by (32.9)% on a reported basis for the first half of 2021.

The division’s activity was penalised by low production rates and the temporary stoppage of production by one of the Group’s customers.

In this context, the division’s activity reached a low point in the first quarter of 2021 and amounted to €82.8 million in the first half of 2021 compared to €123.5 million for the same period in 2020.

The division’s recurring EBITDA amounted to €(13.5) million compared to €(6.6) million in H1 2020, with lower production rates partially offset by a reduction in operating costs in response to the Covid-19 crisis.

It should be noted that the division’s results take into account the activity of Technical Airborne Components (TAC) since the end of April 2021.

Aerostructures
(Adjusted data – € thousand)
  Jun 30, 2021   Jun 30, 2020
Consolidated revenue  

82.8

 

 

123.5

 

On like-for-like and constant exchange rate basis  

-36.5

%

 

-41.7

%

Inter-segment revenue  

10.2

 

 

11.1

 

Revenue  

93.1

 

 

134.6

 

Recurring EBITDA *  

(13.5

)

 

(6.6

)

Recurring EBITDA margin on revenue  

-14.5

%

 

-4.9

%

Recurring operating income  

(21.0

)

 

(15.1

)

Recurring EBIT margin on revenue  

-22.6

%

 

-11.2

%

* 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 revenue of €98.3 million was down (26.3)% at constant exchange rates and perimeter and (9.4)% on a reported basis, compared to €108.5 million in the first half of 2020. This decrease is attributable to the base effect between the pre-covid first quarter of 2020 and the first quarter of 2021. The change in revenue on a reported basis is due to lower production rates, particularly on the A350 and ATR programs, partially offset by the integration of the Bombardier activity for €18.9 million in the first half of 2021.

Recurring EBITDA for the Interconnection Systems reached €(9.5) million, compared to €(7.5) million in H1 2020, affected similarly by the decline in production rates.

Interconnection Systems
(Adjusted – € thousand)
  Jun 30, 2021   Jun 30, 2020
Consolidated revenue  

98.3

 

 

108.5

 

On like-for-like and constant exchange rate basis  

-26.3

%

 

-30.2

%

Inter-segment revenue  

0.5

 

 

0.5

 

Revenue  

98.8

 

 

108.9

 

Recurring EBITDA *  

(9.5

)

 

(7.5

)

Recurring EBITDA margin on revenue  

-9.6

%

 

-6.9

%

Recurring operating income  

(15.6

)

 

(15.7

)

Recurring EBIT margin on revenue  

-15.7

%

 

-14.5

%

* 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.

Confirmation of 2021 outlook

Following the Company’s FY 2020 results press release published on March 16, 2021, and the amendment to the Latécoère 2020 Universal Registration Document filed on July 13, 2021, Latécoère is confirming the guidance previously published excluding the impact of acquisitions.

As a reminder, the Group’s outlook for 2021 is as follows:

  • Revenue will be around 25% lower than in 2020 on an organic basis. On a reported basis, the decline is expected to be around (10)%;
  • Recurring EBITDA will improve by around 20% from FY 2020 levels, demonstrating the Group’s strong fundamentals as it completes its adaptation plan; however, it will remain negative;
  • Free Cash Flow from operations will remain negative partly due to the roll-out of the adaptation plan.

Post-closing events

Recapitalisation and strengthening of the Group’s liquidity

In accordance with the terms of the conciliation protocol approved on July 7, 2021, the Group conducted recapitalization operations, the main measures of which are as follows:

  • Capital increase completed at the beginning of August for an amount of €222.4 million, resulting in the issue of 436,165,182 new shares at a unit subscription price of €0.51;
  • Obtention of new state guaranteed loans (PGE) in the amount of €130 million;
  • Rescheduling of the repayment schedules of existing PGE and postponement of the maturity of loans contracted with the European Investment Bank (EIB) to 2027.

The proceeds from this recapitalisation were used to repay the shareholder loan for an amount of €52.5 million on September 6, 2021, and to finance the acquisition of Technical Airborne Components Industries (TAC) closed on August 31, 2021. The balance of the proceeds will be used to achieve external growth operations and more generally to finance the general needs of the Group, in the short and medium term.

Acquisition of Technical Airborne Components (TAC)

On August 31, 2021, the Group definitively acquired Technical Airborne Components (TAC), based in Belgium (Liège), from Searchlight Capital Partners. The investment company had acquired TAC from TransDigm Group Incorporated in April of this year and the Group held an option to purchase the company from Searchlight Capital Partners since that date. With a turnover of approximately €25 million and nearly 150 employees, TAC supplies parts for commercial aircraft, regional and business jets, helicopters, as well as for several military and space programmes.

About Latécoère

As a “Tier 1” international partner of the world’s major aircraft manufacturers (Airbus, Boeing, Bombardier, Dassault, Embraer and Mitsubishi Aircraft), Latécoère is active in all segments of the aeronautics industry (commercial, regional, business and military aircraft), in two areas of activity:

  • Aerostructures (55% of turnover): fuselage sections and doors,
  • Interconnection Systems (45% of turnover): wiring, electrical furniture and on-board equipment.

As of December 31, 2020, the Group employed 4,172 people in 13 different countries. As of August 31, 2021, Latécoère, a French limited company capitalised at €132,745,925 divided into 530,983,700 shares with a par value of €0.25, is listed on Euronext Paris – Compartment B, ISIN Codes: FR0000032278 – Reuters: LAEP.PA – Bloomberg: LAT.FP.

Appendix – Table of content

Reconciliation of the consolidated financial statements to the adjusted financial statements

In order to better monitor and compare its operating and financial performance, the Group presents, in parallel with the consolidated financial statements, adjusted financial statements:

– for the foreign exchange result of instruments not eligible for hedge accounting under IFRS. This result, presented as financial result in the consolidated financial statements, is reclassified as revenue (operating result) in the adjusted financial statements,

– for changes in fair value, which include all changes in the fair value of derivatives not eligible for hedge accounting and relating to flows in future periods and the revaluation at the hedged rate of balance sheet positions (trade receivables and trade payables denominated in USD), the amount of which is presented in operating income.

– changes in deferred taxes resulting from these items are also adjusted if necessary.

Income statement for the 1st half of 2021

(‘000 EURO)     Hedging  
  Consolidated
income
statement
June 30, 2021
  Exchange
rate result
  Change in
fair value
  Adjusted income
statement
June 30, 2021
         
Revenue  

178 476

 

2 590

   

181 066

Other operating revenue  

460

     

460

Change in inventory : work-in-progress & finished goods  

-7 997

     

-7 997

Raw material, Other Purchases & external charges  

-118 519

     

-118 519

Personnel expenses  

-78 758

     

-78 758

Taxes  

-2 431

     

-2 431

Amortization  

-13 554

     

-13 554

Net operating provisions charge  

-3 609

     

-3 609

Net depreciation of current assets  

819

     

819

Other operating income  

6 308

   

220

 

6 528

Other operating expenses  

-543

     

-543

RECURRING OPERATING INCOME  

-39 348

 

2 590

 

220

 

-36 538

Operating Income / Sales  

-22.05%

     

-20.18%

         
Other non-recurring operating income and expenses  

-2 753

     

-2 753

OPERATING INCOME  

-42 101

 

2 590

 

220

 

-39 291

         
Net Cost of debt  

-1 428

     

-1 428

Foreign Exchange gains / losses  

5 730

 

-2 590

 

-438

 

2 702

Change in fair value of financial derivative instruments  

2 784

   

-2 784

 

0

Other financial incomes and expenses  

-16 903

     

-16 903

FINANCIAL RESULT  

-9 816

 

-2 590

 

-3 222

 

-15 628

         
Income tax  

-1700

     

-1 700

NET RESULT FOR THE PERIOD  

-53 617

 

0

 

-3 002

 

-56 619

• Of which, Owners of the parent  

-53 617

 

0

 

-3 002

 

-56 619

• Of which, non controlling interests  

0

 

0

 

0

 

0

Income statement for the 1st half of 2020

(‘000 EURO)     Hedging  
  Consolidated
income
statement
June 30, 2020
  Exchange
rate result
  Change in
fair value
  Adjusted income
statement
June 30, 2020
         
Revenue  

231 917

     

231 917

Other operating revenue  

306

     

306

Change in inventory : work-in-progress & finished goods  

-6 751

     

-6 751

Raw material, Other Purchases & external charges  

-148 475

     

-148 475

Personnel expenses  

-90,395

     

-90,395

Taxes  

-3 927

     

-3 927

Amortization  

-16 727

     

-16 727

Net operating provisions charge  

870

     

870

Net depreciation of current assets  

-4 519

     

-4 519

Other operating income  

6,648

   

3,190

 

9,838

Other operating expenses  

-2 915

     

-2,915

RECURRING OPERATING INCOME  

-33 967

 

2,590

 

3 190

 

-30 777

Operating Income / Sales  

-14.65%

     

-13,27%

         
Other non-recurring operating income and expenses  

-34 627

     

-34 627

OPERATING INCOME  

-68,594

 

0

 

3,190

 

-65,404

         
Net Cost of debt  

-1,599

     

-1,599

Foreign Exchange gains / losses  

-9,830

   

282

 

-9,549

Change in fair value of financial derivative instruments  

-755

   

755

 

0

Other financial incomes and expenses  

-1,111

     

-1,111

FINANCIAL RESULT  

-13,295

 

0

 

1,037

 

-12,258

         
Income tax  

-12,128

     

-12,128

NET RESULT FOR THE PERIOD  

-94,016

 

0

 

4,227

 

-89,789

• Of which, Owners of the parent  

-94,016

 

0

 

4,227

 

-89,789

• Of which, non controlling interests  

0

 

0

 

0

 

0

Half-Year Consolidated financial statements (IFRS)

Consolidated Income statement

(‘000 EURO)   Jun 30, 2021   Jun 30, 2020
     
Revenue  

178 476

 

231 917

Other operating revenue  

460

 

306

Change in inventory: work-in-progress & finished goods  

-7 997

 

-6 751

Raw material, Other Purchases & external charges  

-118 519

 

-148 475

Personnel expenses (*)  

-78 758

 

-90 395

Taxes  

-2 431

 

-3 927

Amortization  

-13 554

 

-16 727

Net operating provisions charge  

-3 609

 

870

Net depreciation of current assets  

819

 

-4 519

Other operating income (*)  

6 308

 

6 648

Other operating expenses  

-543

 

-2 915

RECURRING OPERATING INCOME  

-39 348

 

-33 967

     
Other non-recurring operating income and expenses  

-2 753

 

-34 627

OPERATING INCOME  

-42 101

 

-68 594

     
Net Cost of debt  

-1 428

 

-1 599

Foreign Exchange gains/losses  

5 730

 

-9 830

Change in fair value of financial derivative instruments  

2 784

 

-755

Other financial incomes and expenses  

-16 903

 

-1 111

FINANCIAL RESULT  

-9 816

 

-13 295

     
Income tax  

-1 700

 

-12 128

NET RESULT FOR THE PERIOD  

-53 617

 

-94 016

• Of which, Owners of the parent  

-53 617

 

-94 016

• Of which, Non-controlling interests  

0

 

0

(*) At June 30, 2020, a reclassification was made from “Other operating income” to “Personnel expenses” for €3.9 million following the reallocation of a part of operating expenses transfer.

Half-Year Consolidated Balance sheet

(‘000 EURO)   Jun 30, 2021   Dec 30, 2021
Goodwill  

23 177

 

0

Intangible assets  

60 994

 

56 022

Tangible assets  

152 037

 

154 155

Other financial assets  

4 800

 

4 291

Deferred tax assets  

547

 

684

Financial derivative instruments  

0

 

0

Other non-current assets  

422

 

129

TOTAL NON-CURRENT ASSETS  

241 977

 

215 282

     
Inventories  

127 150

 

115 122

Accounts receivable  

82 354

 

65 269

Tax receivable  

11 821

 

11 509

Financial derivative instruments  

4 371

 

3 347

Other current assets  

2 722

 

1 816

Cash & Cash Equivalents  

55 561

 

77 614

TOTAL CURRENT ASSETS  

283 979

 

274 676

     
TOTAL ASSETS  

525 956

 

489 957

(‘000 EURO)   Jun 30, 2021   Dec 31, 2020
     
Share capital  

23 705

 

189 637

Share premium  

213 658

 

213 658

Treasury stock  

-459

 

-455

Other reserves  

-198 809

 

-177 595

Derivatives future cash flow hedges  

370

 

509

Group net result  

-53 617

 

-189 566

EQUITY ATTRIBUTABLE TO PARENT OWNERS  

-15 153

 

36 188

NON-CONTROLLING INTERESTS  

0

 

0

TOTAL EQUITY  

-15 153

 

36 188

     
Loans and bank borrowings  

204 525

 

215 546

Refundable Advances  

21 724

 

22 359

Employee benefits  

17 403

 

17 770

Non-current provisions  

25 510

 

26 445

Deferred tax liabilities  

51

 

29

Financial derivative instruments  

0

 

0

Other non-current liabilities  

5 062

 

3 650

TOTAL NON-CURRENT LIABILITIES  

270 276

 

285 799

     
Loans and bank borrowings (less than 1 year)  

63 043

 

9 707

Refundable Advances  

2 254

 

2 254

Current provisions  

24 577

 

18 096

Accounts payable  

140 801

 

89 480

Income tax liabilities  

1 222

 

2 745

Contracts liabilities  

35 736

 

38 982

Other current liabilities  

1 974

 

3 844

Financial derivative instruments  

1 226

 

2 863

TOTAL CURRENT LIABILITIES  

270 832

 

167 970

TOTAL LIABILITIES  

541 108

 

453 769

     
TOTAL EQUITY & LIABILITIES  

525 956

 

489 957

Half-Year Consolidated cash flow statement

(‘000 EURO)   Jun 30, 2021   Jun 30, 2020
   
Net result for the period  

-53 617

 

-94 016

     
Adjustments related to non-cash activities :    
Depreciation and provisions  

15 571

 

46 445

Fair value gains/losses  

-2 784

 

755

Net (gains)/losses on disposal of assets  

290

 

71

Other non-cash items  

16 528

 

1 874

CASH FLOWS AFTER COST OF DEBT AND INCOME TAXES  

-24 011

 

-44 871

     
Income taxes  

1 700

 

12 128

Net Cost of debt  

1 435

 

1 593

CASH FLOWS BEFORE COST OF DEBT AND INCOME TAXES  

-20 876

 

-31 150

     
Changes in inventories net of provisions  

10 999

 

-3 841

Changes in client and other receivables net of provisions  

-7 585

 

69 795

Changes in suppliers and other payables  

7 671

 

-33 579

Income tax paid  

-3 095

 

-1 248

CASH FLOWS FROM OPERATING ACTIVITIES  

-12 887

 

-23

     
Effect of changes in group structure (*)  

3 973

 

0

Purchase of tangible and intangible assets (including changes in payables to fixed asset suppliers)  

-10 449

 

-6 494

Purchase of financial assets  

0

 

0

Increase (decrease) in loans and advances made  

-504

 

57

Proceeds from sale of tangible and intangible assets  

92

 

1

Dividends received  

0

 

0

CASH FLOWS FROM INVESTING ACTIVITIES  

-6 888

 

-6 436

     
Purchase or disposal of treasury shares  

-4

 

1 296

Proceeds from borrowings  

1 562

 

60 000

Repayments of borrowings  

0

 

0

Repayments of lease liabilities  

-2 815

 

-2 816

Financial interest paid  

-1 516

 

-1 448

Dividends paid  

0

 

0

Flows from refundable advances  

-635

 

-594

Other flows from financing operation  

811

 

-38 538

CASH FLOW FROM FINANCING ACTIVITIES  

-2 596

 

17 900

Of which financing flows provided / (used) by discontinued operations*    
     
Effects of exchange rate changes  

270

 

-777

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  

-22 102

 

10 664

Opening cash and cash equivalents position  

77 589

 

33 762

Closing cash and cash equivalents position  

55 487

 

44 426

(*) Composed of opening cash of Technical Airborne Components (TAC) and put option on this company paid in April 2021

____________________

1 In accordance with IFRS 10, the Group has controlled Technical Airborne Components (TAC) since the date of acquisition of the company’s call option.

Contacts

Taddeo
Antoine Denry / Investor Relations

+33 (0)6 18 07 83 27

Marie Gesquière / Media Relations

+33 (0)6 26 48 97 98

[email protected]

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