Recylex : Half-year results 2

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16 December 2020 - 6.45 pm

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Press release

Half-year results 2020

Recylex S.A. (Euronext Paris: FR0000120388 - RX) publishes today its consolidated financial results for the first half of 2020, as approved by the Board of Directors at its meeting on December 16, 2020. For more details, the 2020 Half-Year Financial Report, filed today with the Autorité des Marchés Financiers, can be consulted on the company's website www.recylex.eu(Finance - Publications section).

1. Context of the closing of the 2020 half-year financial statements

As a reminder1, following the filing for insolvency under the German law on May 14, 2020 by all the German sub-group, Recylex S.A. definitively lost control of these entities, which consequently led to the deconsolidation of the entire German scope of consolidation with effect from May 2020. Since then, the Recylex Group consists2 solely of the French operations, which are Recylex S.A.'s two used lead-acid battery recycling plants, C2P S.A.S. in the polypropylene recycling business and Recytech S.A.'s 50% joint venture.

Like the 20193 consolidated and parent company financial statements, the closing of the 2020 half- year financial statements is characterized by the uncertainties that still weigh on the company's ability to continue as a going concern and on the realization of the assumptions structuring its financial plan, which were taken to close the 2020 half-year consolidated financial statements.

This going concern depends on the fulfilment of several structuring assumptions4 relating to the continuation of a business activity with Weser-Metall GmbH, the restructuring of Recylex S.A.'s financial and non-financial debt and to the disposal of non-operating assets.

In this context, the suspension of the share's listing remains in place until Recylex is in a position to communicate reliably on its going concern outlook.

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Recylex S.A. | Registered office: 6 place de la Madeleine | 75 008 Paris | France

Administrative office: 79 rue Jean-Jacques Rousseau | 92 158 Suresnes Cedex | France

The European expert
in the circular economy
www.recylex.eu
	The European expert
	in the circular economy

2. Consolidated results and balance sheet items as of June 30, 2020

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In order to enable an assessment of the 2020 consolidated figures in the context of the Group's new scope of consolidation following the loss of control of the German entities in May 2020, certain key aggregates of the Recylex Group's 2019 and 2020 financial information are presented under "New scope of consolidation", excluding those entities that have been deconsolidated2.

2.1 Income statement items

											As of			As of			Change
					As of			As of			30/06/2020			30/06/2019
	in millions of euros											New scope of
			30/06/2020			30/06/2019			New scope of			New scope of
													consolidation
											consolidation			consolidation
	Sales				82.0			153.6			26.3			37.0			-10.7
	EBITDA5				(14.1)		(12.9)		(3.7)			(1.2)		-2.5
	Operating	income/(loss)
	before	non-recurring			(23.8)			(18.4)			(10.2)			(2.0)			-8.2
	items
	Net income				129.4		(21.4)		148.3			0.5		+ 147.8

Consolidated sales at June 30, 2020 amounted to €82.0 million euros. Sales of the new scope of consolidation (i.e. without taking into account the entities of the German sub-group) amounted to €26.3 million compared to €37.0 million in the first half of 2019.

In the context of a general economic slowdown in the first half of 2020 related to the health measures linked to the SARS-CoV-2 pandemic, the decline in activity in the new scope of consolidation is

Press & Investor contact : T [phone] | [e-mail]

Recylex S.A. | Registered office: 6 place de la Madeleine | 75 008 Paris | France

Administrative office: 79 rue Jean-Jacques Rousseau | 92 158 Suresnes Cedex | France

Half-yearresults 2020 | Press release | 16 December 2020 | Page 3 of 12

explained by the decline in the performance of the Lead segment impacted by the reduction in volumes processed by the two used lead battery recycling plants in France and by the fall in lead prices (-8% compared to the first half of 2019) but also by a sharp reduction in sales in the Plastics segment given this context.

In the first half of 2020, consolidated EBITDA5 reached -€14.1 million. The consolidated EBITDA5 of the new scope of consolidation amounted to -€3.7 million compared to -€1.2 million in the first half of 2019.

This erosion in operating profitability of the new scope of consolidation is mainly explained by (i) the disappearance of the mechanism for sharing structure costs between the Group's holding company and the German entities that were deconsolidated (-€1,7 million) and (ii) the lower financial performance of the Lead and Plastics businesses (-€0.8 million) due to lower volumes in both businesses and lower sales margin in the Lead segment.

Consequently, while the Group recorded a current operating loss of €23.8 million in the first half of 2020 compared to €18.4 million in the first half of 2019, the current operating loss of the new scope of consolidation was €10.2 million compared to a loss of €2.0 million in the first half of 2019. This sharp deterioration in recurring operating income is notably due to the impairment of trade receivables from entities of the German sub-group in the amount of €5.2 million.

In the first half of 2020, income from associates (50% stake in Recytech S.A.S) amounted to €0.7 million, a down €3.1 million compared with the first half of 2019, given the sharp fall in zinc prices over the period.

The Group reported a net income of €129.4 million at June 30, 2020, compared with a net loss of €21.4 million at June 30, 2019, reflecting the impact of the deconsolidation of the German entities in the first half of 2020 in the amount of €159.4 million. This impact is solely of an accounting nature and reflects the negative consolidated contribution in the past of the German sub-group to the Group's net equity.

Press & Investor contact : T [phone] | [e-mail]

Recylex S.A. | Registered office: 6 place de la Madeleine | 75 008 Paris | France

Administrative office: 79 rue Jean-Jacques Rousseau | 92 158 Suresnes Cedex | France

Half-yearresults 2020 | Press release | 16 December 2020 | Page 4 of 12

2.2 Balance sheet Items

As of

Change

As of

As of

31/12/2019

in millions of euros

Variation

New scope of

30/06/2020

31/12/2019

New scope of

consolidation

consolidation

Cash

and

cash

13.1

9.1

+ 4.0

5.2

+7.9

equivalents

Net cash6

13.1

(5.9)

+19.0

5.2

+7.9

Equity

(37.5)

(168,7)

+131.2

-

-

Net debt

41,5

176.9

-135.4

49.1

-7.6

Consolidated gross cash at June 30, 2020 was €13.1 million, an increase of €4.0 million compared to December 31, 2019. It should be noted that as of June 30, 2020 the Group had no credit lines, unlike as of December 31, 2019 when it had credit lines of €15.0 million, which were fully drawn down at the level of the German sub-group.

As a result of the deconsolidation of the German sub-group in the first half of 2020, the Group's net cash position was positive for €13.1 million euros as of June 30, 2020, compared to a negative position of -€5.9 million as of December 31, 2019. The net cash position of the new scope of consolidation increased by €7.9million. This temporary increase in the cash position of the new scope of consolidation is explained by:

• A positive cash flow from operating activities of €6.4 million following a strong decrease in working capital requirements of €10.1 million on both activities which more than compensated the loss generated by both activities;
• Dividends from Recytech SA (equity method consolidated company) in the amount of 4.0 million euros;
• A positive cash flow of €0.7 million euros related to the repayment of part of the compensation paid by Recylex S.A. in respect of claims by former employees of Metaleurop Nord following the decision of the French Supreme Court of Appeals of May 24, 2018 in favor of Recylex S.A.

Cash flows generated by the reduction in working capital requirements made it possible to finance

1. maintenance investments (€0.5 million), (ii) the repayment of the European Commission's fine payment plan in the amount of €0.8 million (including interest) and (iii) expenses related to the rehabilitation of former sites in the amount of €2.1 million (including €1.5 million for the Estaque site).

Press & Investor contact : T [phone] | [e-mail]

Recylex S.A. | Registered office: 6 place de la Madeleine | 75 008 Paris | France

Administrative office: 79 rue Jean-Jacques Rousseau | 92 158 Suresnes Cedex | France