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Sequana Full-year 2017 results

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-Sales down 2.8% year-on-year to €2,765 million (down 1.3% at constant exchange rates)
-EBITDA down 13.2% to €104 million ; EBITDA margin rate at 3.7% (down 0.5 points)
o Antalis : EBITDA at €84 million (down 4.3%) ; EBITDA margin stable at 3.6%
o Arjowiggins : EBITDA of €29 million (down 31.2%), mainly reflecting the decline in printing paper volumes and sharp increases in raw material prices (pulp) in H2 2017

-Attributable net loss of €115 million following recognition of €131 million in net non-recurring expenses, including €99 million for impairment of Sequana’s historic goodwill in Antalis (no impact on the Group’s cash position)

-Net debt of €335 million vs. €315 million at 31 December 2016

-The Board of Directors recommend not paying a dividend for 2017

The plan announced on 15 February 2017 for fiscal year 2017 has been completed
-The IPO of Antalis took place on 12 June 2017 and its refinancing was completed in late March 2018
-Exit from the banknote paper market (Security division), a heavily loss-making business, is now effective
o Arjowiggins Security BV (Dutch banknote paper business) was sold to Oberthur Fiduciaire in late July 2017
o The sale of Arjowiggins Security (French banknote paper business) to Blue Motion Technologies Holding will be completed before end-April 2018

Sequana’s Board of Directors meeting in Boulogne-Billancourt on 9 April 2018 examined and approved the 2017 financial statements and convened the Annual General Meeting for 24 May 2018.

Sales were down by 2.8% year on year to €2,765 million (down 1.3% at constant exchange rates) compared to 2016 pro form sales. Antalis’ Packaging and Visual Communication businesses and Arjowiggins’ specialty businesses had a satisfactory year, partially offsetting the structural decline in printing paper volumes. The acquisitions completed by Antalis in late 2016 added €25 million to full-year 2017 sales. The negative forex impact (mainly attributable to sterling), which essentially affected Antalis, amounted to €43 million.
EBITDA came in at €104 million, down 13.2% on the 2016 pro forma figure of €119 million. Sequana was hit by higher raw material and energy prices, the decline in printing paper volumes and a negative forex impact. Conversely, the Group benefited from an improved product mix on both sides of the business and reductions in Antalis’ overheads. EBITDA margin was 3.7% (down 0.5 points).
Current operating income was €73 million, down 11.0% when compared with the €82 million recorded in 2016 (on a pro forma basis). Current operating margin represented 2.6% of sales (down 0.3 points).
Sequana recorded net non-recurring expenses of €131 million during the year for continuing operations, mainly comprising €99 million in write-downs taken on Sequana’s historic goodwill in Antalis (no impact on the Group’s consolidated cash position), €14 million in restructuring costs and €8 million in costs related to the Antalis IPO and refinancing. Moreover, discontinued operations generated a loss of €33 million for the period.
After factoring in these non-recurring items, net loss attributable to owners was €115 million for the year, compared with a net loss of €52 million in 2016.
Non-recurring disbursements for the year amounted to €63 million and included €33 million for the operating requirements of the Security division, €23 million in restructuring costs and other non-recurring items and €7 million in costs related to the Antalis IPO and refinancing. Moreover, the disposal of Arjowiggins Security BV had a positive €11 million impact on the Group’s consolidated net debt.
Consolidated net debt stood at €335 million at end-December 2017, compared to €315 million at end-December 2016.
Commenting on the full-year results, Sequana’s Chairman and Chief Executive Officer Pascal Lebard said, “Despite Antalis’ solid operational performances, the Group’s EBITDA declined in 2017, hit mainly by higher pulp costs for Arjowiggins, a negative forex impact and the decline in printing paper volumes. We have implemented the plan announced in February 2017 : Antalis was listed on Euronext Paris on 12 June 2017 and completed the refinancing of its debt initiated in H2 2017. Obtaining these funds, which have been secured through 31 December 2021, is an important milestone in Antalis’ targeted acquisition strategy, especially in the Packaging and Visual Communication sectors. Following the divestment of Arjowiggins Security BV (Netherlands) in July 2017, Arjowiggins is in the process of completing the sale of its France-based Arjowiggins Security business over the next few weeks. This operation will mark its exit from banknote paper production and its complete withdrawal from heavily loss-making businesses.”

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