PRESS RELEASE
FULL-YEAR OPERATING MARGIN BEFORE NON-RECURRING ITEMS OF 7.5%
2015 DIVIDEND UNCHANGED ON 2014 (€0.5 PER SHARE)
2016 LIKE-FOR-LIKE SALES EXPECTED TO BE OF THE SAME ORDER AS IN 2015; 2016 OPERATING MARGIN BEFORE NON-RECURRING ITEMS AROUND 7.5% OF SALES
LAUNCH OF AN AMBITIOUS OPERATIONAL EXCELLENCE PLAN TO DELIVER €30 MILLION IN SAVINGS OVER 2 TO 3 YEARS
Mersen's Supervisory Board met on March 8, 2016 and reviewed the audited 2015 financial statements. The Management Board met later the same day to approve them.
2015 KEY FIGURES
2015 | 2014 restated | |
Sales (€m) | 772.2 | 726.1 |
Operating margin before non-recurring items | 7.5% | 8.2% |
EBITDA margin | 12.7% | 13.2% |
Net income from continuing operations (€m) | 6.3 | 2.6 |
Net income (€m) | 2.6 | 2.8 |
Net debt/equity ratio | 47% | 46% |
Dividend per share (€) | 0.5 | 0.5 |
2015 HIGHLIGHTS
Completion of the Transform plan launched at the beginning of 2014, which has streamlined Mersen's manufacturing facilities. Under the plan, eight projects were launched by the Group, leading to the closure or downsizing of certain sites.
Acquisition of ASP, a leading Chinese specialist in overvoltage protection (surge protection devices). This deal has strengthened Mersen's presence in the segment and expanded its sales base in Asia thanks to its excellence in IEC technology, which has been widely adopted in the region.
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Announcement of the Group's new organization structure with effect from January 1, 2016, reflecting the priorities of Mersen's expansion strategy. Advanced Materials and Electrical Power are the two internally consistent new segments in this new organization, and they are backed up by the creation of positions dedicated to Innovation and Asia respectively.
"The economic environment was not very supportive in 2015, particularly capital spending. Even so, our expanding markets-renewable energies, electronics and aerospace-continued to perform very well.
Despite the business contraction, we achieved an EBITDA margin of 12.7%, thanks largely to the improvements unlocked by the operational excellence plans and the Transform plan. The Transform plan was completed as announced in December 2015, on budget and delivering the savings anticipated. The teams involved deserve a great deal of credit for this achievement.
The economic environment is likely to remain sluggish in 2016. However, we can draw strength from our expanding markets, our rapid time-to-market for innovations and our ability to seize opportunities of growth to mitigate the impact of the slowdown in certain markets.
Thanks to the new organization set up at the beginning of 2016 and built around two new internally consistent business segments, we will be more efficient and responsive in our markets. I have every confidence in the commitment of all our employees and in our ability to continue the process of transforming Mersen so that it is better adapted to its environment and is able to win market share in 2016. We will furthermore continue to increase our competitiveness with an ambitious operational excellence plan to deliver €30 million in savings over the next 2 to 3 years.
Without commitment to meeting precise medium-term figures because of the uncertain environment, we are still aiming high with our plans to boost our sales and profitability thanks to our new organization and our even stronger emphasis on innovation and operational excellence. Our strengths remain the diversification of our markets and of our sales reach, our substantial cash generation, robust balance sheet and ability to adapt rapidly ", stated Luc Themelin, Chairman of Mersen's Management Board.
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SALES, OPERATING INCOME AND EBITDA
Mersen posted full-year 2015 consolidated sales of €772.2 million1, up 6.4% compared with the previous year (restated2 ), with a positive currency effect of €63.5 million. On a like-for-like basis, the top line contracted by 2.2% compared with the previous year. Excluding the chemicals market, organic growth ran at close to 1%.
EBITDA3 came to €98 million, up 2.4% compared with the restated2 2014 figure. This represented 12.7% of the Group's sales.
Mersen's operating income before non-recurring items4 came to €58.1 million in 2015, representing 7.5% of sales, compared with 8.2% in 2014. The shortfall was attributable to negative volume and mix effects, and unfavorable pricing effects in the Materials segment, offset partly by the benefits of the Transform plan. The increase in depreciation and amortization in 2015 derived from currency effects.
The Materials segment's operating margin before non-recurring items was lower than in the previous year (4% vs. 6.5%) owing to a combination of several factors-the very hefty decline in anti-corrosion system for chemical industry volumes, pricing pressures in graphite and, conversely, the benefits of the Transform plan.
The Electrical segment's operating margin before non-recurring items of 12.3% was in line with the previous year. This was chiefly attributable to a positive volume effect and the benefits of the Transform plan and other savings plans, counterbalanced by a negative product mix effect.
NET INCOME
1 On January 28, 2016, the Group reported sales of €777 million. This figure included the contribution made by a brazing technology business now accounted for under assets held for sale in accordance with IFRS 5.
2 IFRS 5
3 Operating profit before non-recurring items + depreciation and amortization.
4 As defined in CNC Regulation 2009.R.03.
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of activity in the chemicals market and underutilization of certain items of graphite production equipment, plus restructuring charges (€5.6 million, including €3 million under the Transform plan).
Mersen's net finance costs totaled €10 million in 2015, in line with their 2014 level. Excluding currency effects, average debt in 2015 was close to its 2014 level (€232 million compared with an average debt of
€226 million in 2014).
Taking this into account, Mersen's net income came to €2.6 million compared with a restated 2014 figure of €2.8 million.
CASH AND DEBT
The Group continue to generate a high level of cash-flow from operating activities excluding non-recurring items: net cash from continuing operating activities excluding non-recurring cash flows during the year (restructuring including the Transform plan) came to €73 million, a decline of around €6 million on 2014. This change reflected an increase in the WCR as a result of unfavorable seasonal change in trade payables, plus tax prepayments in the United States in 2015. This figure came to €48.2 million, including non-recurring cash flows.
All in all, cash flows under the Transform plan came to €19.3 million in 2015, including €3 million in capex,
€20 million in restructuring costs and proceeds of €4 million from real estate disposals.
For 2015 as a whole, net cash flow was thus negative at €12.6 million, compared with €3.3 million in 2014.
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Mersen SA issued this content on 09 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 March 2016 06:09:20 UTC
Original Document: https://www.mersen.com/fileadmin/user_upload/pdf/corporate/2016/2016-03-pr-mersen-2015-full-year-results.pdf