Lannion,
H1 earnings: income from ordinary operations growth in a crisis context
- Income from ordinary operations up 9.7% to €2.9m
- Strong increase in margins for the Laser division
Extract from the condensed half-year consolidated financial statements
approved by the Board of Directors on
at | H1 2020 | H1 2019 | Reported change | Organic change | ||
value | % | value | % | |||
Revenues | 45.8 | 51.7 | (5.9) | -11.5% | (8.9) | -17.1% |
EBITDA | 7.6 | 6.7 | +1.0 | +13.3% | 0.2 | +3.2% |
% revenues | 16.7% | 13.0% | ||||
Current operating income | 2.9 | 2.6 | +0.9 | +9.7% | (0.3) | -11.9% |
% revenues | 6.3% | 5.1% | ||||
Operating income | (2.1) | 2.6 | (4.7) | - | (1.3) | - |
Pre-tax income | (2.6) | 2.2 | (4.8) | - | (1.5) | - |
Net income | (1.9) | 1.8 | (3.7) | - | (1.5) | - |
Significant developments for the period
Covid-19
The context for the first half of 2020 was complicated by the health crisis. During this period, the Group’s sites remained open and all the measures were put in place to ensure the safety of people, resulting in a reduction in production capacity by around 30%. In terms of its robust commercial development, the Group did not record any order cancellations. However, certain deliveries had to be deferred as some client sites were closed (particularly universities, for the Scientific business) or following delays with production, as well as a slowdown in sales in
At the height of this period, the Group benefited from various government support measures: government job support packages (€0.2m), deferred social security charges (€1m), freeze on BPI loan repayments deferred to maturity (€0.6m), and government-backed loans set up (€15.9m, including €15m in
Despite the impact of the crisis on the Group’s business in 2020, it does not call into question the Group’s business model or the intrinsic value of its assets (notably recognized as goodwill on the balance sheet).
Payment fraud
During the first half of 2020, the Group was the victim of a payment fraud affecting its new subsidiary Halo-Photonics (
Acquisition of Ellex’s Laser and Ultrasound branch
On
As this operation was completed on
- it did not impact the LUMIBIRD Group’s income statement for the first half of 2020;
- it involved a net outlay of €53.3m, with an impact on net financial debt for the same amount;
- it led the Group, before the aforementioned disbursement, to borrow €29.9m through its acquisition financing bank line.
On a proforma basis (unaudited), with the assumption that the transaction took place on
Business analysis
Summary of results for each division
(€m) | H1 2020 | H1 2019 | ||||
Laser | Medical | TOTAL | Laser | Medical | TOTAL | |
Revenues | 30.0 | 15.8 | 45.8 | 34.0 | 17.7 | 51.7 |
EBITDA | 5.7 | 1.9 | 7.6 | 4.8 | 1.9 | 6.7 |
% of revenues | 18.9% | 12.4% | 16.7% | 14.0% | 11.2% | 13.0% |
Current operating income | 2.3 | 0.6 | 2.9 | 1.6 | 1.0 | 2.6 |
% of revenues | 7.7% | 3.8% | 6.3% | 4.8% | 5.8% | 5.1% |
Operating income | (2.7) | 0.6 | (2.1) | 1.6 | 1.0 | 2.6 |
% of revenues | -9.1% | 3.6% | -6.3% | 4.5% | 5.8% | 5.1% |
Limited contraction in revenues in a crisis context
In the economic context for the first half of 2020, with €45.8m of first-half consolidated revenues, the
Like-for-like and at constant exchange rates, excluding the 2020 contributions for the acquisitions of Optotek Medical and Halo-Photonics respectively in August and
Profitability maintained despite the lower level of business
Restated for the positive contribution in 2020 (€0.6m) by the Optotek and Halo-Photonics activities, the Group’s like-for-like current operating income totaled €2.3m (5.4% of revenues), compared with €2.6m (5.1% of revenues) for the same period in 2019. This performance (improvement in the current operating income margin) is linked primarily to the following factors:
- the change in the Group’s gross margin for -€5.2m following the contraction in business based on an identical gross margin rate;
- the improvement in the gross margin rate, on the historical scope, for +€2.7m, up from 59.2% to 65.5%, thanks to the optimization of the Laser division’s product mix, the new strong value-added Medical products, and a production and purchasing cycle that was temporarily more profitable for the Defense contracts;
- the reduction in net external expenses and staff costs, for +€2.5m, resulting from the efforts made since mid-2019 and stepped up during the months affected by the crisis;
- the increase in depreciation charges, for -€0.3m, in line with the Group’s investment policy, particularly in terms of development.
After taking into account the impact of non-recurring items (primarily including the cost of the payment fraud for €4.0m and the cost of business combinations for €0.9m), operating income shows a €(2.1)m loss, compared with €2.6m for the first half of 2019.
Pre-tax income came to €(2.6)m, after €0.5m of finance costs.
Following a positive corporate income tax contribution of €0.7m, net income totaled €(1.9)m, compared with €1.8m for the first half of 2019. Excluding the impact of the payment fraud (€3.2m net of tax), net income came to +€1.6m for the first half of 2020.
Solid balance sheet position
Balance sheet highlights (€m) | Change | Change from scope effect | Organic change | ||
69.3 | 40.1 | 29.2 | 29.8 | (0.6) | |
Non-current assets (excl. | 65.5 | 50.3 | 15.2 | 13.5 | 1.7 |
Current assets (excl. cash) | 82.3 | 53.1 | 29.2 | 22.3 | 6.9 |
Cash and equivalents | 78.6 | 50.3 | 28.3 | (53.3) | 81.6 |
TOTAL ASSETS | 295.7 | 193.8 | 101.9 | 12.3 | 89.6 |
Shareholders’ equity (Incl. minority interests) | 156.3 | 124.9 | 31.4 | - | 31.4 |
Long-term financial liabilities1 | 81.7 | 25.0 | 56.7 | 0.8 | 55.9 |
Other long-term liabilities | 10.7 | 9.5 | 1.2 | 1.1 | 0.1 |
Current financial liabilities | 7.5 | 7.1 | 0.4 | 0.5 | (0.1) |
Current liabilities | 39.5 | 27.3 | 12.2 | 9.9 | 2.3 |
TOTAL LIABILITIES | 295.7 | 193.8 | 101.9 | 12.3 | 89.6 |
The balance sheet at
- €156.3m of shareholders’ equity (vs. €124.9m), with a €35.6m impact for the Group’s rights issue in
June 2020 ; - €89.2m of gross financial debt2 (vs. €32.1m). This level of debt includes:
- the drawdown – for €29.9m – on the balance of the acquisition debt – which made it possible to finance the Ellex operation at
June 30, 2020 ; this debt (i) is subject to interest at the 3-month Euribor +1.65% (while noting thatLumibird has made a commitment to set up rate hedging for 100% of the nominal amount of this debt atDecember 31, 2020 ), (ii) is repayable in five equal instalments fromDecember 2020 (first instalment to be paid in December 2021); - the drawdown – for €0.8m - on the dedicated debt financing work on the Cournon d’Auvergne building;
- the new financing lines set up: a French government-backed loan plan with six partner banks for €15m, two lines for €5m with BPI Financement for nine years and nine months (including deferred repayment for eight quarters) based on a rate of 1.5% and combined with cash collateral for a total of €0.5m, as well as a specific financing line for €0.9m in the US to support businesses in the context of the Covid crisis.
- the drawdown – for €29.9m – on the balance of the acquisition debt – which made it possible to finance the Ellex operation at
These facilities do not include any ratios or clauses for higher interest rates, early repayments or collateral, with the exception of the acquisition debt. This acquisition debt is subject to two ratios which are tested annually at
- a leverage ratio (ratio of consolidated net debt to consolidated EBITDA) that must not exceed a maximum, based on a sliding scale, decreasing gradually from 3 (upper limit) at
December 31, 2019 to 2 (lower limit) atDecember 31, 2022 ; - a coverage ratio (ratio of consolidated net cash flow to debt servicing) that must be higher than 1 for the duration of the credit facilities.
With €78.6m of cash assets (vs. €50.3m), net financial debt3 changed from €(18.2)m at
Cash flow analysis – healthy financial position
(€m) | ||
Net cash-flow from operations | (1.4) | (0.8) |
Operating cash-flow before interests and tax (and before Halo-Photonics fraud impact) | 6.5 | 6.7 |
Change in WCR | (7.8) | (3.5) |
Taxes paid | (0.1) | ns |
Halo-Photonics fraud | - | (4.0) |
Net cash-flow from investing activities | (7.7) | (59.0) |
Capital expenditures | (7.7) | (5.0) |
Ellex acquisition | - | (53.3) |
Other financial assets investments | - | (0.7) |
Net cash-flow from financing activities | 25.4 | 88.8 |
Capital increase | 24.6 | 35.6 |
Loans issuance | 3.9 | 56.6 |
Financing cost | (2.9) | (2.0) |
Other change | (0.2) | (1.4) |
16.3 | 28.9 |
During the period,
- +€35.6m linked to the rights issue carried out in
June 2020 , intended to finance future external growth operations; - -€4.0m linked to the payment fraud described previously;
- -€23.4m linked to the acquisition of Ellex (corresponding to the amount paid out for the period net of the drawdown on the acquisition line set up in 2019 to finance this operation);
- +€20.7m from the recurrent business cycle, including:
- +€3.2m for cash flow from recurrent operating activities;
- +€24.7m for cash flow linked to the financing operations (excluding Ellex);
- -€5m linked to cash flow for industrial investment activities;
- -€2.2m linked primarily to the financing of financial assets (excluding Ellex) and treasury stock.
Up from €49.0m at the start of the year, the Group’s net cash position5 came to €77.7m at
Outlook
While the Covid-19 health crisis has not called into question the Group’s strategy, focused on combining organic and external growth on its three buoyant markets (Lidar, Defense / Space and Medical), it has made visibility more uncertain for the short and medium term. When publishing its 2019 earnings, this situation had led the Group to suspend its short and medium-term guidance.
With development, production and delivery capabilities that have been fully reestablished and strategic markets that remain buoyant despite the crisis,
Taking into account its new scale and its strong prospects, the Group is currently working to draw up a new strategic plan, which will be presented to the market before the end of the year. The updated objectives based on this strategic plan, including Ellex’s activities, will replace the guidance that was previously suspended by the Group.
Publication of the 2020 Half-Year Financial Report
The Lumibird Group’s 2020 half-year financial report was filed with the French financial markets authority (AMF) on
Next date: Q3 2020 revenues on
Born from the combination of
Contacts
Chairman and CEO Tel. +33(0) 1 69 29 17 00 info@lumibird.com | Aude Nomblot-Gourhand Secretary General – CFO Tel. +33(0) 1 69 29 17 00 info@lumibird.com | Calyptus Investors Relations Tel. +33(1) 53 65 37 91 lumibird@calyptus.net |
1 Financial liabilities (current and non-current) include lease liabilities under IFRS 16.
2 Gross financial debt corresponds to the sum of non-current financial liabilities and current financial liabilities, including lease liabilities under IFRS 16.
3 Net financial debt corresponds to the difference between gross financial debt and cash assets.
4 The cash position corresponds to “cash and cash equivalents” on the asset side of the balance sheet, net of current bank borrowings (cash liabilities) included in current financial liabilities on the liability side of the balance sheet
5 Cash assets net of current bank borrowings included in current financial liabilities.
Attachment
- 200922_LUMIBIRD_RS1_2020_EN
© OMX, source