Saft Groupe SA Reports 2010 First Half Sales And Earnings
PARIS, July 28, 2010 /PRNewswire-FirstCall/ -- Saft, leader in the design, development and manufacture of advanced batteries for industry and defence, announces its sales and earnings for the 6 month period ended 30 June 2010.
First half sales and earnings highlights - Q2 sales of EUR154.4m, up 8.9% at actual exchange rates and up 5.1% at constant exchange rates. - H1 2010 sales of EUR290.0m, an increase of 0.9% YoY as reported and a reduction of 0.4% YoY at constant exchange rates. - EBITDA margin of 18.7% of sales in H1 2010, at EUR54.2m, ahead of the initial annual guidance. - Net income up by 5.6% YoY to EUR22.8m. - Earnings Per Share of EUR0.92 in H1 2010 compared to an adjusted EUR1.03 in H1 2009. Outlook for FY 2010 FY 2010 sales guidance maintained but EBITDA margin guidance increased - Sales guidance unchanged with growth of 0 to 5% at constant exchange rates. - 2010 EBITDA margin increased from cubed 18.0% of sales to cubed 18.5% of sales.
John Searle, Chairman of the Management Board, commented: "I am delighted to report sales growth in Q2, following a challenging 2009. Saft's markets are recovering at different speeds with some activities recording strong growth in H1, notably sales to the electronics and lighting markets.
In contrast, we do have some late cycle activities such as the industrial standby power activities, where sales in H1 were lower than 2009, but I certainly expect this activity to return to growth during H2.
Saft has delivered a strong level of profitability, ahead of 2010 guidance and 2009, due to good cost control and the benefit of the restructuring carried out in 2009, notably the merger of Divisions.
I anticipate continued sales growth in H2 and maintain our sales guidance unchanged. However, following the strong performance in H1, I am able to revise our EBITDA margin guidance upwards to at least 18.5% of sales.
Finally, with continuing strong cash flow, the company has solid finances and continues to invest in the exciting markets of the future, notably batteries for clean vehicles and renewable energy storage." Consolidated sales and results - first half 2010
In euro million First half Variations change 2010 2009 Sales 290.0 287.4 (0.4)% Gross profit 89.8 82.6 8.7% Gross profit % 31.0% 28.7% EBITDA (*) 54.2 51.5 5.2% EBITDA margin % 18.7% 17.9% EBIT (**) 38.8 35.7 8.7% EBIT margin % 13.4% 12.4% Profit before income tax 27.6 27.4 0.7% Net income 22.8 21.6 5.6% EPS (EUR per share) (***) 0.92 1.03 (10.7)%
Percentages changes are at actual exchange rates except for sales which are at constant exchange rates.
(*) EBITDA is defined as net income from operations, before depreciation, amortisation, restructuring costs and other operating income and expenses.
(**) EBIT is defined as net income from operations, before restructuring costs and other operating income and expenses.
(***) 2009 EPS has been adjusted to factor in the capital increase with maintained preferential subscription rights carried out in December
2009. 2009 non-adjusted EPS was EUR1.14.
Notes:
1. There have been no changes in the consolidation perimeter between 2009 and 2010.
2. Average exchange rate during H1 2010 was EUR1 = $1.33, in line with EUR1 = $1.33 during H1 2009.
2010 Interim Condensed Consolidated Financial Statements closed by the Saft Groupe SA Management Board have been reviewed by the Supervisory Board on July 23, 2010.
Key figures - Sales were EUR290.0m in H1 2010, compared with EUR287.4m in H1 2009, an increase of 0.9% at actual exchange rates and a decrease of 0.4% at constant exchange rates. - Gross profit margin increased by 1.3% at 31.0% in H1 2010 compared to 28.7% in H1 2009, mainly due to cost controls and the benefit of the merger initiated in 2009 between the IBG and RBS divisions. - At 18.7% of sales, EBITDA margin has been increased by 80 bps as compared to H1 2009 level. Excluding costs of EUR0.6m incurred on the Jacksonville project, EBITDA was EUR54.9m in H1 2010 (18.9% of sales) as compared with EUR51.5m (17.9% of sales) in 2009. - Net income during H1 was EUR22.8m, up 5.6% compared with 2009. - Earnings Per Share was EUR0.92 compared to adjusted EPS of EUR1.03 in H1 2009. - Due to a stronger US dollar, net debt at June 30, 2010 slightly increased at EUR119.2m, compared with EUR108.5m at December 31, 2009. Leverage ratio was 1.0 as at end of June 2010, compared with 1.09 as at end December 31, 2009. - Group cash position is EUR225.3m at June 30, 2010, showing a slight increase as compared to December 31, 2009, despite increased investments during the first half. - Investments in fixed assets and capitalised R&D costs for H1 2010 were EUR27.3m, compared with EUR9.9m in H1 2009. Investment in our Johnson Controls-Saft joint venture was EUR17.0m, compared with EUR21.8m in H1 2009. Second quarter sales by product line In euro million Variations in % Product line Q2 2010 Q2 2009 At actual At constant exchange rates exchange rates IBG 83.6 82.8 1.0% (2.1)% SBG 70.8 59.0 20.0% 15.1% Total 154.4 141.8 8.9% 5.1%
Sales numbers are at actual exchange rates.
The average exchange rate in Q2 2010 was EUR1 to $1.27 (compared with EUR1 to $1.36 in Q2 2009).
There was no change in perimeter between Q2 2009 and Q2 2010. Results by product line 6 months ended 30 June 2010 6 months ended 30 June 2009 Product Sales EBITDA EBITDA line Sales growth EBITDA margin Sales EBITDA Margin EURm % EURm % EURm EURm % IBG 160.7 (2.0)% 27.0 16.8% 162.4 26.9 16.6% SBG 129.3 1.7% 29.6 22.9% 125.0 27.4 21.9% Other 0 0 (2.4) n.a. 0 (2.8) n.a. Total 290.0 (0.4)% 54.2 18.7% 287.4 51.5 17.9%
All at actual exchange rates, except sales growth % which is at constant exchange rates.
Industrial Battery Group (IBG)
H1 2010 saw IBG sales decrease by 1% as reported at EUR160.7m, compared with H1 2009. At constant exchange rates, this equated to a reduction of 2% YoY. During Q2 alone, sales as reported increased by 1% but were down 2.1% YoY at constant exchange rates.
Sales into the telecom infrastructure market continued to record good growth, and aviation battery sales recovered strongly during Q2. This growth trend looks set to continue. In contrast, the industrial standby power and rail markets showed reduced sales, although the industrial standby sector is expected to return to growth in H2.
The small nickel battery activity (ex.RBS Division) had a strong H1 due to a market recovery and some market share gains.
EBITDA margin for the division increased to 16.8% compared to 16.6% in H1 2009. Excluding costs of the Jacksonville project, EBITDA margin reached 17.2% of sales at EUR27.6m. Cost reduction measures have enabled the division to increase the gross margin strongly during the first half while maintaining investment in future developments.
Specialty Battery Group (SBG)
SBG sales in H1 increased by 3.4% as reported to EUR129.3m, and by 1.7% at constant exchange rates. Q2 was extremely strong with sales increasing by 20.0% as reported and 15.1% at constant exchange rates.
The main driver of this growth was the civil electronics business and in particular the demand for batteries from the utility meter market. The military activities reported a slight growth in Q2 despite a challenging base of comparison.
During H2, the civil electronics activity is expected to continue to grow coupled with stronger sales in the space market. In contrast, as indicated earlier, the military market will remain more difficult and will not be a growth driver in 2010.
The EBITDA margin for the division has increased by 100 bps to 22.9% of sales in H1 2010. This improvement results from good cost control and stable prices.
Other activities
Costs of "Other activities" are costs not allocated to operational divisions and include costs of central functions such as IT, research and central management, finance and administration, a proportion of which is recharged to each of the product lines.
EBITDA of other activities for the first half year is EUR(2.4)m compared to EUR(2.8)m in 2009.
Investments in applications for the future
Saft continues to invest heavily in two very significant emerging applications: batteries for clean vehicles and renewable energy storage.
In the developing renewable energy storage market, Saft has announced a new demonstration contract with the SMUD, and has been awarded a contract for the development and supply of containerised batteries for a grid stabilisation project in Spain.
In the clean vehicle space, Johnson Controls-Saft continues to see additional opportunities develop. Ford has decided to launch the Ford Transit Connect EV in Europe as well as in 2010 in the US, whilst Azure Dynamics will purchase batteries from Johnson Controls-Saft for a new PHEV delivery vehicle to be sold alongside the HEV model being launched in H2 2010.
Finally, in the important Chinese market, Johnson Controls-Saft is continuing discussions with a number of potential strategic partners.
Outlook
Based on the H1 performance, Saft confirms unchanged FY10 sales guidance at 0 to 5% at constant exchange rates, but is increasing its 2010 profitability guidance as follows:
In euro million FY 2009 H1 2010 FY 2010 FY 2010 Actual Initial Revised Estimate (**) Estimate (***) Sales 559.3 290.0 0 to 5% 0 to 5% 18.1% 18.9% greater than greater than or equal to or equal to EBITDA margin % (*) 18.0% 18.5% Average EUR/$ exchange rate 1.39 1.33 1.39 1.33
(*) Excluding costs related to the construction project of Jacksonville lithium-ion
factory.
(**) Excluding impact of the costs related to the Jacksonville project estimated at $5 to 6 million.
(***) Excluding impact of the costs related to the Jacksonville project re-estimated at $2 to 3 million.
Saft sales and EBITDA sensitivity to exchange rates remained unchanged as follows:
- a 10% change in EUR/$ exchange rates results in a 4% change in sales, - a 10% change in EUR/$ exchange rates results in a 6 to 7% change in EBITDA. Financial calendar 2010 2010 Q3 turnover 3 November 2010 FY sales and results 2010 17 February 2011
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS
Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans, objectives or results of operation. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and Saft's plans and objectives to differ materially from those expressed or implied in the forward looking statements.
About Saft
Saft (Euronext: Saft) is a world specialist in the design and manufacture of high-tech batteries for industry. Saft batteries are used in high performance applications, such as industrial infrastructure and processes, transportation, space and defence. Saft is the world's leading manufacturer of nickel batteries for industrial applications and of primary lithium batteries for a wide range of end markets. The group is also the European leader for specialised advanced technologies for the defence and space industries and world leader in lithium-ion satellite batteries. Saft is also delivering its lithium-ion technology to the emerging applications of clean vehicles and renewable energy storage. With approximately 4,000 employees worldwide, Saft is present in 18 countries. Its 15 manufacturing sites and extensive sales network enable the group to serve its customers worldwide. Saft is listed in the SBF 120 index on the Paris Stock Market.
This press release includes the main Financial Statements as appendices. Also available on Saft's website https://www.saftbatteries.com/ are: - Saft's 2010 Interim Report, including the Interim Condensed Consolidated Financial Statements, - A presentation on Saft's interim results. Appendices Consolidated balance sheet Assets In euro million As of As of As of June 30, December 31, December 31, 2010 2009 2008 . Non-current assets Intangible assets, net 225.4 228.2 236.0 Goodwill 117.0 104.8 107.3 Property, plant and equipment, net 134.2 109.9 112.6 Investment properties 0.1 0.2 0.2 Investments in joint undertakings 42.7 30.0 19.5 Deferred income tax assets 10.2 10.1 13.3 Other non current financial assets 1.0 0.9 1.3 530.6 484.1 490.2 Current assets Inventories 77.8 63.1 79.2 Trade and other receivables 151.4 141.1 153.8 Derivative financial instruments 0.8 2.2 0.1 Cash and cash equivalents 225.3 207.4 68.8 455.3 413.8 301.9 Total assets 985.9 897.9 792.1 Consolidated balance sheet Liabilities and equity In euro million As of As of As of June 30, December 31, December 31, 2010 2009 2008 Shareholders' equity Ordinary shares 24.7 24.7 18.5 Share premium 92.6 92.5 (27.7) Treasury shares (1.0) (0.3) (1.0) Cumulative translation adjustments 40.1 11.8 7.6 Fair value and other reserves (8.0) 12.8 9.1 Group consolidated reserves 170.9 164.3 146.7 Minority interest in equity 1.3 1.0 0.6 Total shareholders' equity Liabilities 320.6 306.8 153.8 Non-current liabilities Debt 342.8 312.7 324.3 Other non-current financial 8.5 8.1 5.5 liabilities Deferred grants related to assets 8.3 0.0 0.0 Deferred income tax liabilities 67.6 69.0 66.8 Pensions and other retirement benefits 9.0 8.5 9.5 Provisions for other liabilities and charges 36.1 33.3 38.5 472.3 431.6 444.6 Current liabilities Trade and other payables 172.8 136.4 152.9 Taxes payable 1.8 5.3 2.3 Debt and other current financial 3.0 3.2 25.6 liabilities Derivative instruments 3.4 2.1 5.6 Pensions and other retirement 0.7 1.0 0.2 benefits Provisions for other liabilities and charges 11.3 11.5 7.1 193.0 159.5 193.7 Total liabilities and equity 985.9 897.9 792.1 Consolidated income statement In euro million Period Period ended Period ended ended June 30, 2009 June 30, June 30, 2010 2008 Revenues 290.0 287.4 306.4 Cost of sales (200.2) (204.8) (220.8) Gross profit 89.8 82.6 85.6 Distribution and sales costs (18.2) (17.1) (15.9) Administrative expenses (21.7) (21.4) (21.7) Research and development expenses (11.1) (8.4) (7.4) Restructuring costs (0.4) (0.5) 0.0 Other operating income and expenses 1.9 2.0 0.1 Operating profit 40.3 37.2 40.7 Finance costs-net (6.5) (5.6) (8.3) Share of profit / (loss) of associates (6.2) (4.2) (4.5) Profit before income tax 27.6 27.4 27.9 Income tax expense (4.8) (5.8) (5.4) Profit for the period 22.8 21.6 22.5 Equity holders of the company 22.8 21.4 22.5 Minority interest 0.0 0.2 0.0 Basic earnings per share (in EUR per share) 0.92 1.14 1.20 Diluted earnings per share (in EUR per share) 0.92 1.14 1.20 Consolidated statement of comprehensive income In euro million Period Period Period ended ended ended June 30, June 30, June 30, 2010 2009 2008 Profit for the period 22.8 21.6 22.5 Other comprehensive income Fair value gains / (losses) on cash flow hedge (2.1) 3.0 (0.7) Fair value gains / (losses), net on investment hedge (29.0) 0.2 4.5 Actuarial gains and losses on defined-benefit pensions plans 0.0 0.9 0.0 Currency translation adjustments 28.5 (0.2) (4.9) Tax effect on income / (expenses) recognised directly in equity 10.4 (1.1) (1.0) Total other comprehensive income for the period, net of tax 7.8 2.8 (2.1) Total comprehensive income for the period 30.6 24.4 20.4 Attributable to: Equity holders of the company 30.3 24.2 20.4 Minority interest 0.3 0.2 0.0 Consolidated statement of cash flows In euro million Period Period Period ended ended ended June 30, June 30, June 30, 2010 2009 2008 Net profit for the period 22.8 21.6 22.5 Adjustments: Earning of equity basis companies (net of dividends) 6.2 4.7 5.0 Income tax expense 4.8 5.8 5.4 Depreciation of property, plant and equipment and amortisation of intangible assets 15.4 15.8 14.2 Finance costs-net 6.5 5.6 8.3 Net movements in provisions (1.2) (1.6) (4.7) Other (0.9) 1.4 0.1 53.6 53.3 50.8 Change in inventories (9.1) 6.9 (8.1) Change in trade and other receivables (4.5) 7.6 3.0 Change in trade and other payables 13.0 (18.6) (1.2) Changes in working capital (0.6) (4.1) (6.3) Cash flows generated from operations before interest and tax 53.0 49.2 44.5 Interest paid (6.8) (8.5) (11.9) Income tax paid (3.7) 0 (2.0) Net cash provided by operating activities 42.5 40.7 30.6 Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired (17.0) (21.8) (3.8) Purchase of property, plant and equipment (24.4) (7.7) (10.9) Purchase of intangible assets (2.9) (2.2) (3.0) Proceeds from sale of property, plant and equipment 1.5 0.2 1.2 Variation of other non-current financial assets and liabilities (0.1) 0.1 0.3 Net cash used in investing activities (42.9) (31.4) (16.2) Cash flows from financing activities Proceeds from issuance of ordinary shares 0.1 0.0 0.0 Purchase / Sale of treasury shares and liquidity contract (0.7) 0.0 0.0 Debt repayments 0.0 (10.2) 0.0 Grants related to assets 7.7 0.0 0.0 Increase/(decrease) in other long-term liabilities 0.0 0.0 0.4 Dividends paid to company shareholders 0.0 0.0 0.0 Net cash generated by/(used) in financing activities 7.1 (10.2) 0.4 Net increase/(decrease) in cash 6.7 (0.9) 14.8 Cash and cash equivalents at beginning of period 207.4 68.8 42.3 Exchange gain / (loss) on cash and cash equivalents 11.2 1.3 (0.6) Cash and cash equivalents at end of period 225.3 69.2 56.5 Consolidated statement of changes in equity Number of Attributable to equity Minority Share- shares holders of the company interest holders' In euro making up equity million the capital Share Share Consolidated Capital Premium reserves and retained earnings Balance at 01/01/2008 18,514,086 18.5 (15.1) 122.7 0.8 126.9 Employee stock option schemes (value of employee services) 0.0 0.0 1.7 0.0 1.7 Dividend paid 0.0 (12.6) 0.0 0.0 (12.6) Purchase / Sale of treasury shares 0.0 0.0 (0.3) 0.0 (0.3) Total comprehensive income 0.0 0.0 38.3 (0.2) 38.1 Balance at 31/12/2008 18,514,086 18.5 (27.7) 162.4 0.6 153.8 Employee stock option 0.0 0.0 0.8 0.0 0.8 schemes (value of employee services) Dividend to be paid 0.0 0.0 (12.6) 0.0 (12.6) Purchase / Sale of treasury shares 0.0 0.0 0.0 0.0 0.0 Total comprehensive income 0.0 0.0 24.2 0.2 24.4 Balance at 30/06/2009 18,514,086 18.5 (27.7) 174.8 0.8 166.4 Employee stock option schemes (value of employee services) 0.0 0.0 0.8 0.0 0.8 Capital increase with maintenance of preferential subscription rights 5,696,328 6.0 114.4 (5.5) 0.0 114.9 Capital increase by exercise of stock options 231,864 0.2 5.8 0.0 0.0 6.0 Dividend paid in shares 241,815 0.0 0.0 5.6 0.0 5.6 Purchase / Sale of treasury shares 0.0 0.0 0.8 0.0 0.8 Total comprehensive income 0.0 0.0 12.1 0.2 12.3 Balance at 31/12/2009 24,684,093 24.7 92.5 188.6 1.0 306.8 Employee stock option schemes (value of employee services) 0.0 0.0 0.6 0.0 0.6 Capital increase by exercise of stock options 4,450 0.0 0.1 0.0 0.0 0.1 Dividend to be paid 0.0 0.0 (16.8) 0.0 (16.8) Purchase / Sale of treasury shares 0.0 0.0 (0.7) 0.0 (0.7) Total comprehensive income 0.0 0.0 30.3 0.3 30.6 Balance at June 30, 2010 24,688,543 24.7 92.6 202.0 1.3 320.6 For more information, visit Saft at https://www.saftbatteries.com/ SAFT Jill Ledger, Corporate Communications and Investor Relations Director Tel: +33-1-49-93-17-77, [email protected] FINANCIAL DYNAMICS Stéphanie BIA, Tel: +33-1-47-03-68-16, [email protected] Yannick DUVERGÉ, Tel: +33-1-47-03-68-10, [email protected] Clément BENETREAU, Tel: +33-1-47-03-68-12, [email protected]
