HAMON & CIE (INTERNATIONAL) S.A. Continuation during H1 2017, of the transformation plan through the thorough execution of the 2016 and 2017 cost saving plans on the one hand and the implementation of a new organization on the other hand.
Disposal of our US subsidiary Thermal Transfer Corporation, resulting in a solid capital gain and a cash contribution.
Bookings lower than in 2016 but with improved margins thanks to a favorable mix new projects/ services. The Group's increased presence in after-market services is in line with the strategy and contributes to improved profitability levels.
EBITDA is slightly higher than in 2016, although still negative.
Transformation Plan
The Group decided to downsize, not only to re-establish its profitability but also to have a more variable cost structure. Thanks to this new organization, it will be easier to absorb the large volume swings inherent to our business.
The cost saving plans of 2016 and 2017 will have an impact of EUR 12,4 million in 2017 and of EUR 22,6 million in 2018.
A new Group organization was approved in June 2017 and will be fully effective by year-end. The Group is now organized by region and no longer by business unit with a reduced Executive Committee consisting of the Chief Executive Officer, the Chief Financial Officer, the Chief Sales Officer and the Chief Operating Officer. The objective of this new organization is to simplify the Group structure, to make it more transparent and to improve controls as well as decision-making processes.
Commercial activity
The first semester 2017 was characterized by a slow moving market with many postponed projects. We operate in a sector where large fluctuations from one period to the next are common. The backlog is sizeable which helps us reduce large swings and ensures a relatively stable activity level. The backlog at the end of 2016 perfectly played this role: at equal consolidation scope, revenue of S1 2017 is equal to S1 2016 revenue. The backlog at the end of June 2017 remains very strong which will allow a sustained activity level during the coming quarters.
EBITDA
Despite the positive impact of the cost saving programs, EBITDA is negative at EUR -10,8 million (2016: EUR -12,4 million). On one hand, the organization structure is not fully adjusted yet to a revenue level of EUR 210 million for a semester as the cost saving programs initiated in 2016 and 2017 had a very limited impact in H1 2017 (their full benefit will be visible in 2018); on the other hand, the first semester was negatively impacted by specific issues encountered in the finalization of certain contracts. The Group took the necessary measures to avoid such deteriorations in the future.
Net result
The non-recurring items include mainly the capital gain related to the disposal of Thermal Transfer Corporation as well as restructuring expenses.
Income taxes include the tax charge on the above-mentioned capital gain.
The Group net result amounts to EUR -11,8 million compared to EUR -24,8 million for the same period last year.
Balance Sheet
The balance sheet at the end of June 2017 is impacted by the deconsolidation of the Thermal Transfer Corporation subsidiary.
Equity at the end of June includes EUR 4,9 million (net of transaction costs) coming from the capital increase recorded in January 2017 (EUR 5,2 million gross).
PerspectivesAccording to its policy, Hamon does not release any guidance on its future results.
Table of contents
Notes to the condensed consolidated interim financial statements16
V. AUDITOR'S REPORT........................................................................................................
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