SPERIAN PROTECTION 
By Regulatory News:
- Strong growth in revenue and profitability
- Solid financial position
- Honeywell's public tender offer underway
The Board of Directors of Sperian Protection (Paris:SPR), reference leader in personal protective equipment (PPE), today approved the Group's consolidated results for the first half of 2010.
Sperian Protection reported a satisfactory first-half performance with significant sales and margin growth compared to 2009. The Group's situation gradually improved in the second half of 2009 and first half of 2010, after a first part of 2009 that was hard hit by the economic crisis.
| In millions of euros | H1 2010 | H1 2010 at H1 2009 exchange rates* | H1 2009 | |||
| Revenue | 362.4 | 356.5 | 326.9 | |||
| Income from operating activities | 55.5 | 55.5 | 25.3 | |||
| Operating margin (% of revenues) | 15.3% | 15.6% | 7.7% | |||
| Net income | 16.5 | 16.3 | 5.8 | |||
| Net margin (% of revenues) | 4.5% | 4.6% | 1.8% |
* H1 2010 results at H1 2009 exchange rates
- Revenue growth
As announced on July 21st, Sperian Protection reported organic growth of 11.8% with consolidated revenue of €362.4 million in the first half of 2010, compared with €326.9 million in the first half of 2009.
Organic growth in the first half mainly reflects a favorable basis of comparison with the year-earlier period. The first half of 2009 saw an organic decline of 20.3% compared with the same period in 2008, as distributors sharply reduced inventories and adapted their business to the downturn in demand as of early 2009.
In the first half of 2010, the head protection division generated organic growth of 15.3%. This performance is largely due to single-use respiratory masks, which continued to benefit from the last deliveries for a French government contract. Other segments (hearing and eye protection) also reported organic growth but not as strongly; as a result revenue fell short of the 2008 level.
The body protection division also reported good growth at 7.7%, thanks largely to buoyant performances in fall protection and footwear. In contrast, gloves and clothing activities contracted slightly.
- High profit margins
Income from operating activities amounted to €55.5 million in the first half of 2010, compared to €25.3 million in the first half of 2009. The operating margin1 was 15.3%, in line with the H1 2008 figure and a significant improvement over last year's first-half margin of 7.7%.
This improvement can be attributed to sales growth in volume, an improved product mix and better absorption of fixed costs.
EBITDA2 amounted to €67.0 million, or 18.5% of revenue.
Net income amounted to €16.5 million, or 4.5% of revenue. Among other operating elements, this figure primarily includes expenses related to the public tender offers.
- Solid financial position
Net debt was €213 million at June 30, 2010, down from €216 million at December 31, 2009. At constant exchange rates, debt reduction was even more significant in the first half, down €21 million.
The Group's financial structure remains solid with a net-debt-to-EBITDA3 ratio of 1.84 at June 30, 2010, compared with 2.49 at the end of 2009. The net-debt-to-equity ratio was 32% compared to 37% at December 31, 2009.
Working capital requirements amounted to €123 million, equivalent to 65 days of revenue. At the end of 2009, it stood at €110 million, or 62 days of revenue, when the Group benefited from major inventory reduction efforts. At the end of June 2010, non-recourse factoring amounted to €15.6 million, compared to €19.2 million at the end of December 2009.
- Honeywell's public tender offer
Honeywell's public tender offer was approved by the US antitrust authorities on July 16, 2010, and by the European Commission on August 5, 2010. The tender offer opened on July 12, 2010 and will close on September 2, 2010. The French market regulator (Autorité des Marchés Financiers-AMF) will publish the results of the tender offer on September 10, 2010.
- Outlook
For the full year, Sperian Protection expects to generate organic sales growth and an improvement in operating margin. However, the basis of comparison will be less favorable in the second half of this year both in terms of revenue and margin. Indeed, the second half of 2009 was particularly bolstered by major shipments of disposable respiratory masks as part of A-flu pandemic plans. These sales will not occur again in the second half of 2010.
Brice de La Morandière, Chief Executive Officer of Sperian Protection, stated: "The Group delivered a strong first-half performance, both in terms of organic growth and margins. Sperian Protection's future development is based on increased investments on attractive vertical markets and high-growth potential emerging countries, as well as on innovations to further align the product and service offering to meet the needs and expectations of all customers. In addition, teaming up with Honeywell, assuming the proposed public tender offer is a success, will strengthen the Group's position as the undisputed leader in Personal Protective Equipment."
Sperian Protection will report third-quarter 2010 revenue on October 27, 2010 after the market close.
About Sperian Protection
Sperian Protection is the reference leader in personal protective equipment (hearing, eye, respiratory and fall protection, gloves, clothing and footwear), resolutely geared towards international markets. The Group offers innovative products adapted to high-risk environments so that workers in the manufacturing and services industries can work with confidence.
www.sperian.com
| Consolidated statement of financial position | June 2010 | Dec 2009 | ||
| Assets | €'000 | €'000 | ||
| Non-current assets | ||||
| Goodwill | 614,413 | 556,752 | ||
| Other intangible assets | 101,199 | 92,281 | ||
| Intangible assets | 715,612 | 649,033 | ||
| Property, plant and equipment | 89,372 | 88,469 | ||
| Deferred tax assets | 34,571 | 30,022 | ||
| Other financial assets | 3,606 | 3,382 | ||
| Total non-current assets | 843,161 | 770,906 | ||
| Current assets | ||||
| Inventories and work in progress | 120,420 | 95,190 | ||
| Trade receivables | 103,388 | 86,576 | ||
| Other operating receivables | 16,315 | 27,939 | ||
| Derivative financial instruments | 2,905 | 589 | ||
| Cash and cash equivalents | 18,663 | 16,689 | ||
| Total current assets | 261,691 | 226,983 | ||
| Total assets | 1,104,852 | 997,889 | ||
| Equity and liabilities | ||||
| Equity | ||||
| Share capital | 15,300 | 15,310 | ||
| Share premium | 442,366 | 442,721 | ||
| Treasury shares | (7,066) | (8,225) | ||
| Currency translation difference | 4,013 | (62,397) | ||
| Gain/Loss on hedging instruments | (1,370) | (1,356) | ||
| Net income for the period | 16,394 | 18,553 | ||
| Reserves and retained earnings | 194,231 | 182,159 | ||
| Total equity attributable to equity holders of the parent | 663,868 | 586,765 | ||
| Minority interets | 1,262 | 1,271 | ||
| Total equity | 665,130 | 588,036 | ||
| Non-current liabilities | ||||
| Deferred tax liabilities | 32,478 | 27,534 | ||
| Long term financial liabilities | 205,368 | 212,035 | ||
| Retirement benefit obligation | 11,162 | 10,387 | ||
| Provisions | 30,747 | 26,010 | ||
| Total non-current liabilities | 279,755 | 275,966 | ||
| Current liabilities | ||||
| Trade payables | 116,581 | 99,415 | ||
| Current tax liabilities | 2,314 | 0 | ||
| Short-term financial liabilities | 26,652 | 20,837 | ||
| Derivative financial instrument | 4,396 | 2,166 | ||
| Provisions | 10,024 | 11,469 | ||
| Total current liabilities | 159,967 | 133,887 | ||
| Total liabilities | 439,722 | 409,853 | ||
| Total equity and liabilities | 1,104,852 | 997,889 |
| Consolidated income statement | June 2010 | June 2009 | ||
| €'000 | €'000 | |||
| Sales | 362,447 | 326,920 | ||
| Cost of goods sold | (215,552) | (211,082) | ||
| Gross Profit | 146,895 | 115,838 | ||
| Sales & Marketing expenses | (48,467) | (46,082) | ||
| General & administrative expenses | (35,181) | (37,204) | ||
| R&D expenses | (7,763) | (7,284) | ||
| Income of operating activities | 55,484 | 25,268 | ||
| Restructuring costs | (1,380) | (8,151) | ||
| Amortization and impairment of revalued intangible assets | (2,899) | (2,582) | ||
| Other income/expenses | (20,969) | 42 | ||
| Operating income from continuing operations | 30,236 | 14,577 | ||
| Net finance costs | (5,403) | (17,441) | ||
| Income before tax | 24,833 | 8,805 | ||
| Income tax | (8,381) | (2,963) | ||
| Net income | 16,452 | 5,842 | ||
| Attributable to : | ||||
| Equity holders of the parent | 16,394 | 5,811 | ||
| Minority interest | 58 | 31 | ||
| 16,452 | 5,842 | |||
| Earnings per share | ||||
| Basic earnings per share | 2.17 | 0.77 | ||
| Diluted earnings per share | 2.07 | 0.77 | ||
| Weighted average number of shares in issue | 7,561,174 | 7,542,886 | ||
| Weighted average number of shares fully diluted | 7,907,211 | 7,542,886 |
| Consolidated statement of cash-flows | June 2010 | June 2009 | ||||
| €'000 | €'000 | |||||
| Operating activities | ||||||
| Income before income tax | 24,775 | 8,774 | ||||
| Minority interest | 58 | 31 | ||||
| Non-cash income and expenses: | ||||||
| Share-based payment | 1,091 | 1,200 | ||||
| Depreciation, amortization and impairment | 16,718 | 13,784 | ||||
| Change in provisions | (1,633) | 4,471 | ||||
| Change in financial instruments | 540 | (3,037) | ||||
| Gains/losses on divestment of non-current assets | 289 | 300 | ||||
| Interest charges | 4,079 | 3,733 | ||||
| Interest paid | (3,961) | (3,614) | ||||
| Income taxes paid | (6,134) | (7,149) | ||||
| Operating cash-flow before change in working capital | 35,822 | 18,493 | ||||
| (Increase)/Decrease in inventory and work in process | (16,841) | 24,440 | ||||
| (Increase)/Decrease in trade and other receivables | (9,219) | 21,874 | ||||
| Increase/(Decrease) in trade and other payables | 16,604 | (12,266) | ||||
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© Business Wire - 2010
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