Jacquet Metals : 2022 Half-year financial report

2022

Half-year financial report

A European leader in the distribution of specialty steels

Table of contents

pages

04 Press release dated September 7, 2022 - First half 2022 results

1. The Group
2. 1 A leading distributor of specialty steels
3. 2 Brand management
4. 3 Stock market information and shareholder structure
5. 4 Financial communication schedule
6. Half-yearactivity report - June 30, 2022
7. 1 Group's sales and earnings

18 2 Sales and earnings by division

22 3 Consolidated financial position

25 4 Summary interim consolidated financial statements

1. 5 Statutory Auditors' Review Report on the Half-yearly Financial Information

1. 6 Statement by the person responsible for the half-year financial report

PRESS RELEASE

First half 2022 results

07.09.2022 - 6.00 PM

Sales: €1,480m (+58% vs H1 2021)

EBITDA: €209m (14.1% of sales)

Net income (Group share): €126m

In H1 2022, the Group benefited from a favorable environment mainly marked by the increase in raw materials prices.

Volumes distributed also rose in the H1 (+1.9% compared to H1 2021). Demand, which was well oriented at the beginning of the year, showed a decline from Q2 onwards.

Likewise, after 18 months of increase, raw material prices began to decrease, leading to a decrease in purchase prices, a trend that is expected to continue in Q4. However this decrease should be mitigated by the increase in steel production costs, heavily impacted by energy costs.

The inventory valuation as of June 30, 2022 takes this evolution into account, with the recording of an impairment representing 19.8% of the gross value of inventory compared to 17.1% as of December 31, 2021.

Sales increased by +58% to €1,480 million and the gross margin by +63% to €404 million, representing 27.3% of sales, compared to 26.4% a year earlier.

In this context, EBITDA amounted to €209 million in H1 2022 (14.1% of sales versus 8.6% in H1 2021) and Net income (Group share) amounted to €126 million, compared to €43 million a year earlier.

Operating working capital also increased and represented 28% of sales as of June 30, 2022 compared to 26% at 2021 year-end.

During the period, the Group generated operating cash flow of €52 million and strengthened its financing structure with a shareholders' equity of €622 million and a net debt to equity ratio (gearing) of 27% (35% at 2021 year-end).

Capital expenditure (excluding external growth) amounted to €13 million in H1 2022.

In early May, the Group acquired the Canadian company Fidelity PAC Metals (annual sales: €33 million) specializing in master distribution of stainless steel long products and operating 3 logistics centers in Toronto, Montreal and Vancouver. Fidelity PAC Metals will strengthen the JACQUET division's positioning in North America, the largest market of the division, now representing one third of its sales.

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On September 7, 2022, the Board of Directors, chaired by Éric Jacquet, approved the consolidated financial statements for the six months ended June 30, 2022, on which the Statutory Auditors had conducted a limited review.

€m	Q2 2022	Q2 2021	H1 2022	H1 2021
Sales	757	492	1,480	937
Gross margin	205	131	404	248
% of sales	27.0%	26.7%	27.3%	26.4%
EBITDA 1	107	46	209	81
% of sales	14.2%	9.5%	14.1%	8.6%
Adjusted operating income 1	93	36	183	64
% of sales	12.3%	7.3%	12.3%	6.8%
Operating income	89	35	179	61
Net income (Group share)	63	27	126	43

1 Adjusted for non-recurring items.

H1 2022 results

Sales amounted to €1,480 million, up +58% versus H1 2021 including the following effects:

• volumes: +1.9% (Q1 +8.9%; Q2 -4.9%);
• prices: +55.5% (Q1 +53.7%; Q2 +57.6%; Q2 2022 +15.4% compared to Q1 2022);
• scope: +0.6% (Q2 +1.2%) following the acquisition of Fidelity PAC Metals at the beginning of May 2022.

Gross margin amounted to €404 million (Q1 €200 million; Q2 €205 million), representing 27.3% of sales, compared to €248 million a year earlier (26.4% of sales).

Current operating expenses* amounted to €195 million (13.2% of sales) compared to €167 million in H1 2021 (17.8 % of sales). The increase in energy costs contributed for €2.5 million to the increase in H1 current operating expenses.

* excluding depreciation, amortization and provisions €(31)m.

EBITDA amounted to €209 million and represented 14.1% of sales (Q1 14.0%; Q2 14.2%) compared to €81 million in H1 2021 (8.6% of sales).

Adjusted operating income amounted to €183 million (12.3% of sales).

In this context, Net income (Group share) amounted to €126 million compared to €43 million in H1 2021.

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