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    IMCD   NL0010801007

IMCD N.V.

(IMCD)
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IMCD N : IMCD reports 46% EBITA growth in the first half of 2021

08/04/2021 | 08:06am EDT

Press release

IMCD reports 46% EBITA growth in the first half of 2021

Rotterdam, The Netherlands (4 August 2021) - IMCD N.V. ("IMCD" or "Company"), a leading distributor of speciality chemicals and ingredients, today announces its first half year 2021 results.

HIGHLIGHTS

  • Gross profit growth of 23% to EUR 410.9 million (+28% on a constant currency basis)
  • Operating EBITA increase of 46% to EUR 192.3 million (+52% on a constant currency basis)
  • Net result before amortisation and non-recurring items increase of 52% to EUR 137.5 million (+57% on a constant currency basis)
  • Cash earnings per share increased by 44% to EUR 2.43 (first half of 2020: EUR 1.69)
  • In the second quarter of 2021, IMCD completed the acquisitions of Siliconas in Colombia, Andes Chemical in the US, Colombia and Peru and Yuanhe Chemicals in China

Piet van der Slikke, CEO: "We are reporting very strong results for the first six months of the year. After a promising start of the year, the positive momentum continued into the second quarter and our teams across all regions were able to benefit optimally from the strong product demand. This has resulted in double digit growth numbers, with gross profit being up 23% (+28% on a constant currency basis), and operating EBITA being up 46% (+52% on a constant currency basis). All regions achieved substantial organic growth and contributed to the overall positive results. It remains to be seen how the pandemic will influence the current economic conditions, but we are optimistic that we can further execute our growth strategy successfully in the remainder of the year."

KEY FIGURES

EUR MILLIONJAN. 1 - JUNE 30, 2021JAN. 1 - JUNE 30, 2020CHANGECHANGE FX ADJ. CHANGE

Revenue

1,673.9

1,411.2

262.7

19%

23%

Gross profit

410.9

332.7

78.2

23%

28%

Gross profit in % of revenue

24.5%

23.6%

0.9%

Operating EBITA1

192.3

131.4

60.9

46%

52%

Operating EBITA in % of revenue

11.5%

9.3%

2.2%

Conversion margin2

46.8%

39.5%

7.3%

Net result before amortisation/non-recurring items

137.5

90.2

47.3

52%

57%

Free cash flow3

118.1

76.3

41.8

55%

Cash conversion margin4

61.0%

57.4%

3.6%

Earnings per share (weighted)

1.85

1.22

0.63

52%

56%

Cash earnings per share (weighted)5

2.43

1.69

0.74

44%

48%

Number of full time employees end of period

3,516

3,049

467

15%

  • Result from operating activities before amortisation of intangibles and non-recurring items
    2 Operating EBITA in percentage of gross profit
    3 Operating EBITDA excluding non-cashshare-based payment expenses, less lease payments, plus/less changes in working capital, less capital expenditures
    4 Free cash flow in percentage of adjusted operating EBITDA (operating EBITDA plus non-cashshare-based payment costs minus lease payments) 5 Result for the year before amortisation (net of tax) divided by the weighted average number of outstanding shares

Revenue

In the first half of 2021, revenue increased by 19% to EUR 1,673.9 million, compared to the same period of 2020. On a constant currency basis, the increase in revenue is 23%, consisting of organic growth of 15% and the impact of the first-time inclusion of companies acquired in 2020 and 2021 of 8%.

Gross profit

Gross profit, defined as revenue less costs of materials and inbound logistics, increased by 23% from EUR 332.7 million in the first half of 2020 to EUR 410.9 million in the same period of 2021. On a constant currency basis, the gross profit growth was 28%, consisting of organic growth of 19% and the impact of the first time inclusion of businesses acquired in 2020 and 2021 of 9%.

Gross profit in % of revenue increased by 0.9%-point from 23.6% in the first half of 2020 to 24.5% in 2021. The gross profit margin increase is the result of changes in local market conditions, gross margin improvement initiatives, the impact of newly acquired businesses, currency exchange rate movements and fluctuations in the product mix.

Operating EBITA

Operating EBITA increased by 46% from EUR 131.4 million in the first half of 2020 to EUR 192.3 million in the same period of 2021. On a constant currency basis operating EBITA increased by 52%. The growth in operating EBITA, on a constant currency basis, is a combination of organic growth and the first time inclusion of companies acquired in 2020 and 2021.

The operating EBITA in % of revenue increased by 2.2%-point from 9.3% in the first half of 2020 to 11.5% in 2021.

The conversion margin, defined as operating EBITA as a percentage of gross profit, increased by 7.3%-point from 39.5% in the first half of 2020 to 46.8% in 2021. The increase in conversion margin is the result of substantial organic EBITA growth, whereby organic gross profit growth more than compensated organic own cost growth, combined with a positive impact of acquisitions made.

Cash flow and capital expenditure

In the first half of 2021, free cash flow was EUR 118.1 million compared with EUR 76.3 million in the first half of 2020 (+55%).

The cash conversion margin, defined as free cash flow as a percentage of adjusted operating EBITDA (Operating EBITDA adjusted for non-cashshare-based payments and lease payments), was 61.0% compared with 57.4% in the first half of 2020. The increase in free cash flow and cash conversion margin in 2021 is the balance of higher operating EBITDA, higher investments in net working capital and less capital expenditures.

The investment in net working capital (sum of inventories, trade and other receivables minus trade and other payables) in the first half of 2021 was EUR 73.3 million compared with EUR 53.1 million in the first half of 2020. Working capital investments were primarily driven by increased business activities. As at the end of June 2021, net working capital in days of revenue was 56 days (June 2020: 60 days).

Capital expenditure was EUR 2.3 million in the first half of 2021 compared with EUR 3.6 million in the same period of 2020 and mainly relates to investments in the ICT infrastructure, office improvements and technical and office equipment.

2

Net debt

As at 30 June 2021, net debt was EUR 816.8 million compared with EUR 739.3 million as at 31 December 2020.

The leverage ratio (net debt/operating EBITDA ratio including full year impact of acquisitions) as at the end of June 2021, was 2.3 times EBITDA (31 December 2020: 2.3). Calculated on the basis of the definitions used in the IMCD loan documentation, the leverage ratio at the end of June 2021 was 1.6 times EBITDA (31 December 2020: 1.6), which is well below the maximum of 3.5 as allowed under the loan documentation.

The leverage development in the second quarter of 2021 is, among other things, influenced by a dividend payment of EUR 58.1 million in June.

3

DEVELOPMENTS BY OPERATING SEGMENT

The reporting segments are defined as follows:

  • EMEA: all operating companies in Europe, Turkey, Russia, Israel, United Arab Emirates, Saudi Arabia and Africa
  • Americas: all operating companies in the United States of America, Canada, Brazil, Puerto Rico, Chile, Argentina, Uruguay, Colombia and Mexico
  • Asia Pacific: all operating companies in Australia, New Zealand, India, Bangladesh, China, Malaysia, Indonesia, Philippines, Thailand, Singapore, Vietnam, Japan and South Korea
  • Holding companies: all non-operating companies, including the head office in Rotterdam and the regional offices in Singapore and New Jersey, USA

The developments by operating segment in the first half of 2021 are as follows.

EMEA

EUR MILLIONJAN. 1 - JUNE 30, 2021JAN. 1 - JUNE 30, 2020CHANGECHANGEFX ADJ. CHANGE

Revenue

800.6

686.0

114.6

17%

18%

Gross profit

206.7

176.0

30.7

17%

19%

Gross profit in % of revenue

25.8%

25.7%

0.1%

Operating EBITA

92.5

69.8

22.7

33%

35%

Operating EBITA in % of revenue

11.6%

10.2%

1.4%

Conversion margin

44.8%

39.6%

5.2%

Revenue increased by 17% from EUR 686.0 million in the first half of 2020 to EUR 800.6 million in 2021. On a constant currency basis, revenue growth was 18%. Gross profit increased by 17% to EUR 206.7 million in the first half of 2021 (+19% on a constant currency basis). Gross profit margin increased by 0.1%-point to 25.8%.

Operating EBITA increased by 33% from EUR 69.8 million in the first half of 2020 to EUR 92.5 million in 2021. On a constant currency basis the increase in operating EBITA was 35%. Compared with the same period in 2020, operating EBITA in % of revenue increased by 1.4%-point to 11.6% in the first half of 2021.

The first half of 2021 figures include the impact the acquisition of Oy Kokko-Fiber Ab, completed in September 2020, Ejder Kimya İlaç Danışmanlık Sanayi ve Ticaret A.Ş., Peak International Products B.V. and Siyeza Fine Chem Propriety Limited, completed in January 2021.

Americas

EUR MILLIONJAN. 1 - JUNE 30, 2021JAN. 1 - JUNE 30, 2020CHANGECHANGEFX ADJ. CHANGE

Revenue

530.6

493.0

37.6

8%

17%

Gross profit

118.9

109.3

9.5

9%

18%

Gross profit in % of revenue

22.4%

22.2%

0.2%

Operating EBITA

54.4

47.6

6.9

14%

24%

Operating EBITA in % of revenue

10.3%

9.7%

0.6%

Conversion margin

45.8%

43.5%

2.3%

In the first half of 2021, revenue increased by 8% compared to the same period of 2020. On a constant currency basis, revenue growth was 17%. Gross profit increased by 9% to EUR 118.9 million in 2021, compared with EUR 109.3 million in the first half of 2020 (+ 18% on a constant currency basis). Gross profit margin increased by 0.2%-point from 22.2% in the first half of 2020 to 22.4% in 2021.

4

Operating EBITA increased by 14% from EUR 47.6 million in the first half of 2020 to EUR 54.4 million in 2021. On a constant currency basis operating EBITA increased by 24%. Operating EBITA in % of revenue increased by 0.6%- point to 10.3%.

In April 2021, IMCD divested its Nutri Granulations manufacturing assets and associated business, which was acquired by IMCD as part of the ET-Horn acquisition in 2018. Located in La Mirada, CA, with 22 employees, Nutri Granulations manufactures food grade and USP grade calcium carbonate granulations for the nutraceuticals, food and pharmaceuticals markets. Nutri Granulations realised a revenue of USD 11 milion in 2020. The divestment aligns with IMCD's strategy to focus on the sales, marketing and distribution of speciality chemicals and ingredients.

On 14 May 2021, IMCD acquired Siliconas y Químicos ("Siliconas"), based in Bogotá, Colombia. Siliconas is a speciality chemicals distributor and serves the personal care, coatings, silicones and other speciality industrial markets and perfectly complements IMCD's existing pharmaceuticals, food and nutrition business in Colombia. The company, based in Bogotá has 25 employees and generated a revenue of USD 9 million in 2020. IMCD acquired 80% of the shares of Siliconas; the remaining 20% will be acquired in 2022.

On 19 May 2021, IMCD acquired Andes Chemical Corp. ("Andes Chemical"). Headquartered in the Miami metropolitan area, Andes Chemical is active in Caribbean and Central American countries, Colombia and Peru. Andes Chemical serves the coatings, adhesives, sealants, and elastomers (CASE), construction, cosmetics, personal care, plastics, pharmaceuticals, and HI&I industries. Andes Chemical has 43 employees and generated a revenue of USD 46 million in 2020.

The first half of 2021 figures include the impact the acquisition of VitaQualy (Brazil) in August 2020 and Millikan S.A. de C.V. and Banner Química S.A. de C.V. (Mexico) in December 2020.

Asia Pacific

EUR MILLIONJAN. 1 - JUNE 30, 2021JAN. 1 - JUNE 30, 2020CHANGECHANGEFX ADJ. CHANGE

Revenue

342.7

232.2

110.6

48%

48%

Gross profit

85.3

47.4

37.9

80%

80%

Gross profit in % of revenue

24.9%

20.4%

4.5%

Operating EBITA

54.2

21.9

32.4

148%

147%

Operating EBITA in % of revenue

15.8%

9.4%

6.4%

Conversion margin

63.6%

46.1%

17.5%

In the first half of 2021, revenue increased by 48% to EUR 342.7 million (+48% on a constant currency basis). Gross profit increased by 80% to EUR 85.3 million in the first half of 2021, compared with EUR 47.4 million in the same period in 2020 (+80% on a constant currency basis). Gross profit in % of revenue increased by 4.5%-point from 20.4% in the first half of 2020 to 24.9% in 2021.

Operating EBITA increased by 148% from EUR 21.9 million in the first half of 2020 to EUR 54.2 million in 2021 (+147% on a constant currency basis). In the first half of 2021, operating EBITA in % of revenue was 15.8% compared with 9.4% in the same period of last year.

On 2 June 2021, IMCD acquired 100% of the shares in Yuanhe HK Limited ("Yuanhe Chemicals"), which holds a 100% interest in Shanghai Yuanhe Chemicals Co Ltd and the Yuanhe Guangzhou branch. Yuanhe, based in Shanghai, is a speciality coatings, textile and ink solution distributor for the China market. It generated a revenue of EUR 13.2 million in 2020 and has 20 employees.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

IMCD NV published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 12:05:11 UTC.


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