Press release

SABCA

INTERIM FINANCIAL REPORT AS OF JUNE 30, 2019

Regulated information - Inside information, published on 24/09/2019 at 18.00 h

Corporate information

The Board of 24thSeptember 2019 approved and authorized the publication of the consolidated financial statements of SABCA Group for the six months ended 30 June 2019.

Interim management report

The results for the six months ending 30 June 2019 illustrate the progress of the implementation of the Project of the Century. The new organisation put in place over the past years, the changes made to the processes of SABCA, and the improvements in the global efficiency have allowed significant increase of on-time delivery performance to its customers, while achieving cost reductions both in its production processes and in its overall cost structure.

The half-year financial result is consistent with the forecast.

  • The company has experienced adverse impacts indefence-related activities, and specific action plans have been put in place to mitigate such difficulties, with positive results over the last weeks of the semester.
  • The company has experienced strong operational and commercial performance notably with the A330 and A350 programs while the volumes have decreased for the A380 and for the business jets segment. Margin improvements in the aviation programs have offset impacts ondefence-related activities.
  • In the space domain, the development phase of actuation systems for the Ariane 6 andVega-C launchers is running. SABCA has been impacted by the temporary stoppage of the Vega program following the premature conclusion of the VV15 mission in July. Vega return to flight, is now expected in the first quarter of 2020.

Key figures for the first half of 2019

(in thousands of euros)

30.06.2019

30.06.2018

Revenues

98.331

100.285

Operating result

2.959

2.261

Operating margin as % of Turnover

3,5%

2,4%

Finance result including fair value adjustment of hedging instruments

-1.137

-1.900

Taxes

-456

-97

Net result for the period

1.366

264

Adjusted net result (without fair value adjustment of hedging instruments)

1.912

1.921

Cash and cash equivalents

85.694

91.021

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

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Press release

Update on strategic roadmap

The management of SABCA remains committed to its strategic roadmap with a view to pursue the development of its three main markets.

  • For the aviation market, the focus remains of the efficient and profitable delivery of existing programs. The management is fully committed to the business development of the activity to offset the decline of some mature platforms, including the A380 following the program stoppage announced on February 14, 2019.
  • For thedefence-related activities, the F16 market is expected to remain strong based on existing customer relationships and some opportunities in new geographies.
  • For the space market, the focus will be on the successful pursuit of Vega activity and the smooth transitioning from Ariane 5 to Ariane 6.

Guidance

For the full year 2019, the operating result is expected to reach the same level as in 2018 in absolute terms.

Shareholders

The Company refers to the announcement on April 10, 2019 that the board of directors had been informed of the decision of its shareholder, Dassault Belgique Aviation SA, a wholly-owned subsidiary of the Groupe Industriel Marcel Dassault, to sell its stake of 96.85% in the share capital of SABCA and to appoint, for this purpose, the investment bank Rothschild & Co. Further information will be provided as soon as a definitive agreement will be reached.

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

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Press release

Appendix - Details on interim results for the six months ended 30 June 2019

Basis of preparation

The condensed consolidated interim financial statements of the SABCA group for the six months ended June 30, 2019 have been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements of the SABCA group for the financial year ended on December 31, 2018, which was prepared in accordance with International Financial Reporting Standards as approved for use in the European Union (endorsed IFRS), on the basis of the same principles, calculation methods and presentations as in the SABCA group's financial statements on December 31, 2018,except for the new standards and interpretations which have been adopted as of January 1st, 2019 (see section "Accounting Principles" below) and which had an impact on the interim condensed consolidated financial statements.

Condensed consolidated statement of financial position

(in thousands of euros)

30.06.2019

01.01.2019

IFRS16

31.12.2018

ASSETS

334.837

340.509

333.823

Non-current assets

106.722

116.951

110.265

Intangible assets

38.535

40.890

40.890

Property, plant and equipment

65.592

68.211

+6.686

61.525

Affiliated enterprises

112

112

112

Financial assets and other non-current assets

2.483

7.738

7.738

Current assets

228.115

223.558

223.558

Inventories

29.791

31.329

31.329

Work-in-progress

47.372

35.809

35.809

Trade and other receivables

63.884

62.200

62.200

Cash and cash equivalents

85.693

93.427

93.427

Other current assets

1.375

793

793

EQUITY AND LIABILITIES

334.837

340.509

333.823

Total equity

89.860

90.640

90.640

Attributable to shareholders of the parent

89.397

90.162

90.162

company

Capital

12.400

12.400

12.400

Consolidated reserves

76.997

77.762

77.762

Non-controlling interests

463

478

478

Non-current liabilities

179.482

174.318

168.672

Long-term borrowings

141.110

137.097

+5.646

131.451

Non-current provisions

34.113

32.723

32.723

Deferred tax liabilities

4.259

4.498

4.498

Current liabilities

65.495

75.551

74.511

Trade and other payables

28.366

39.470

39.470

Tax and social liabilities

13.292

13.316

13.316

Other current liabilities

4.164

3.820

+1.040

2.840

Current provisions

19.673

18.885

18.885

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

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Press release

Condensed consolidated statement of profit and loss

(in thousands of euros)

30.06.2019

30.06.2018

Revenues

98.331

100.285

Turnover

83.522

92.947

Increase (+), decrease (-) in work in progress

11.564

2.990

Own construction capitalized

1.760

2.402

Other operating income

1.485

1.946

Operating expenses

-95.372

-98.024

Raw materials and consumables used

22.871

20.432

Services and other goods

31.275

37.228

Wages and salaries, social security costs and pensions

32.709

31.942

Depreciation and amortization of intangible and tangible assets

7.787

7.278

Write offs on inventories and trade debtors

40

40

Provisions for liabilities and charges

-540

577

Other operating expenses

1.230

527

Result from continuing operations

2.959

2.261

Finance income

1.695

1.405

Finance costs

-2.832

-3.305

Result from continuing operations after finance result

1.822

361

Income taxes

-456

-97

Net result for the period

1.366

264

whereof

Attributable to shareholders of the parent

1.381

313

Share of non-controlling interests

-15

-49

Result per share in EUR

30.06.2019

30.06.2018

(number of shares : 2.400.000)

- basic

0,57

0,11

- diluted

0,57

0,11

Condensed consolidated statement of comprehensive income

(in thousands of euros)

30.06.2019

30.06.2018

Net result for the period

1.366

264

Other comprehensive income (+) / loss(-) after tax impact

-2.145

-165

Other comprehensive income to be reclassified to profit/loss in subsequent

periods, net of taxes

-82

-165

Fair value adjustment of hedging instruments

-99

-225

Income tax impact

17

60

Other comprehensive income not to be reclassified to profit/loss in

subsequent periods, net of taxes

-2.063

Actuarial gains/losses on post-employment benefits

-2.707

Income tax impact

644

Total comprehensive income (+)/loss (-), net of taxes, for the period

-779

99

Attributable to :

-779

99

Shareholders of the parent

-764

148

Share of non-controlling interests

-15

-49

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

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Press release

Condensed consolidated statement of cash flow

(in thousands of euros)

30.06.2019

30.06.2018

Cash flow from operating activities

-4.937

-6.808

Net income before tax

1.822

361

Fair value adjustment of derivatives

826

2.490

Depreciation and amortization on fixed assets

7.787

7.263

Change in working capital

-14.710

-17.251

Change in provisions, deferred taxes and reserves

-662

329

Cash flow from investing activities

Acquisition of intangible, tangible and financial non-current assets

Increase and decrease of receivables

Cash flow from financing activities

Change in short-term liabilities

(except trade and financial debts)

Change in long-term liabilities

(except trade and financial debts)

Change in short-term financial liabilities

Interests

  • earned
  • paid

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, at the beginning of the period (1stJanuary)

Cash and cash equivalents, at the end of the period (30thJune)

-2.803-3.277

-2.802-3.276

-1-1

7 -808

-50-318

717-58

-735-452

10552

-30-32

-7.733-10.893

93.427 101.914

85.694 91.021

Condensed consolidated statement of changes in equity

(in thousands of euros)

Consolidated reserves

Actuarial gains / losses

Hedging instruments on

Total attributable to shareholders of the parent

Non-controlling interests

Capital

Total equity

Balance as of 1stJanuary 2018

12.400

75.851

-6.080

82.171

123

82.294

Result for the period

313

313

-49

264

Other comprehensive income (+)/loss (-)

-165

-165

-165

Total comprehensive income

313

-165

148

-49

99

Balance as of 30thJune 2018

12.400

76.164

-6.080

-165

82.319

74

82.393

Balance as of 1stJanuary 2019

12.400

81.044

-2.641

-642

90.161

478

90.639

Result for the period

1.381

1.381

-15

1.366

Other comprehensive income to be

Reclassified to profit (+)/loss (-)

-82

-82

-82

Other comprehensive income not to be

reclassified to profit (+)/loss (-)

-2.063

-2.063

-2.063

Total comprehensive income

1.381

-2.063

-82

-764

-15

-779

Balance as of 30thJune 2019

12.400

82.425

-4.704

-724

89.397

463

89.860

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

5

Press release

Notes to the condensed consolidated financial statements

A. Profit and loss

The operating resultfor the first half of 2019 is +2.959 K€compared to +2.261K€ for the first half of 2018. Despite the decrease in revenues, this improvement is generated by lower operating costs.

The financial resultfor the first half of 2019 is -1.137K€compared to -1.900 K€ for the first half of 2018.

This negative result includes a fair value adjustment of currency hedging instruments for an amount of -727 K€ which does not reflect the future financial results upon settlement of such financial instruments. In the first half of 2018, the fair value adjustment of currency hedging instruments was -2.265 K€.

Deferred taxes are recalculated in accordance with the Belgian tax reform, which implies an average tax rate of 25 %.

The net resultfor the first half of 2019 is +1.366 K€compared to +264 K€ for the first half of 2018.

Without taking into account the negative variation of the Mark-to-Market value of the currency hedging instruments not settled as of 30/06/2019, the net result is +1.912 k€, to be compared with +1.921 K€ for the first half of 2018.

B. Balance sheet

The Group's cash flow on the first half of 2019 is -7.733 K€. This decrease is explained by the increase in working capital requirements.

C. Accounting principles

The financial statements for the first half of 2019 are presented in accordance with the accounting principles described in the Group's Annual Report for the year ended as of 31 December 2018, except for the new standards and interpretations which have been adopted as of January 1st, 2019 which had an impact on the interim condensed consolidated financial statements.

Changes in basis of accounting

As from 1stJanuary 2019, the Group has applied for the first time IFRS 16 "Leases". As required by IAS 34, the nature and effect of these changes are disclosed below.

The Group adopted IFRS 16 using the modified retrospective transition approach. Therefore, the opening balance sheet as of December 31, 2018 has been restated on January 1, 2019 taking into account the right-of- use of identified underlying assets on one side and the obligations to make lease payments on the other side.

As of June 30, 2019, lease costs were booked taking into the depreciation of the right-of-use of the underlying assets as well as a financing cost, against reversal of the corresponding rental costs incurred.

The principal risks and uncertainties faced by the Group are outlined below:

Liquidity and Cash Flow Risks

Financial debts do not pose a significant risk for the Group. The Group's cash position enables it to meet its commitments without liquidity risk.

Credit Risks

The Group carries out its treasury and foreign exchange transactions with recognised financial institutions.

The Group mitigates the risks related to the default of the customer counterparties by making the majority of its sales in cash and by guaranteeing the credit granted by credit insurer or by real guarantees.

Given the method of depreciation of trade receivables used for the preparation of the financial statements, the risk-bearing portion of non-depreciated receivables due at closing is insignificant.

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

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Press release

Market and Currency Risks

The Group is exposed to a foreign exchange risk for sales denominated in USD, the major share of expenses being incurred in EUR, despite the intensification of purchases in USD.

The Group hedges this risk by using forward sales contracts and, where applicable, currency options.

It only covers its future net cash flows if they are recognised as sufficient to exercise the currency hedges put in place. The amount of the hedge can be adjusted according to the evolution over time of the expected net flows.

Value in consolidated

statement of financial

position on 30/06/2019

Net carrying

Fair value

value

Market value of hedging instruments included in "other current liabilities"

1.078

1.078

Market value variation: impact on result and on equity

Market value

Market value

on

on

30/06/2019

31/12/2018

Hedging instruments not-qualifying for hedge accounting

-113

614

Hedging instruments qualifying for hedge accounting

-965

-867

Total hedging instruments

-1.078

-253

Impact on result

Impact on

result from

finance

Total

equity

continuing

result

operations

(*)

Market value variation of hedging instruments

-99

-727

-826

(*) Change in market-value of hedging instruments not-qualifying for hedge accounting as defined in IFRS9

Risks on Long-Term Programmes

The Group is exposed to a risk on Long-Term Programmes because of their technical, economic and financial evolutions, which can put their profitability in jeopardy. These risks are typically related to the ability to deliver products and services in accordance with customer needs (quality and timeliness), constant pressure on prices that could lead to margin degradation, lack of capacity in machinery or human resources, etc.

Operational Risks

Following the work done by the Risk Management and Internal Control managers, the operational risks were identified and mapped according to their acceptability:

  • Variations in production rates in the needs expressed by customers under existing contracts, and the uncertainty related to obtaining new contracts, lead to a variable charge and - in the long term - one that is lower than the internal capacity of the company; this could lead to a need to adapt capacity.
  • The age distribution within the workforce, and particularly the high average age, makes succession to key positions, training, and transmission of skills particularly difficult, especially in the complex regulatory and technological environment of the aerospace industry.
  • The reorganisation of the SABCA Group via the Project of the Century (POTC) represents a challenge that is closely monitored by the Management.

Related-party transactions

Sales and purchases are at market price.

Balances outstanding at half-year are not guaranteed and payments are made in cash. No guarantees were provided or received for related-party receivables.

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

7

Press release

Declaration of the persons responsible for the report

In the name and on behalf of SABCA Group, we hereby certify that to our knowledge :

  1. the condensed set of financial statements prepared in accordance with applicable accounting standards gives a fair view of the assets, financial position and results of the company and entities included in the consolidation.
  2. the interim management report includes a fair review of important events and principal transactions with related parties during the first half year, their impact on the set of financial statements and a description of principal risks and uncertainties for the remaining months of the year.
  3. no significant events after the interim period, that have not been reflected in the interim financial reporting, have to be reported.

Dimitri Duray

Thibauld Jongen

Chief Financial Officer

Chief Executive Officer

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

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Press release

Auditor's report

Statutory auditor's report to the board of directors of S.A.B.C.A. SA on the review of the condensed consolidated interim financial information as at June 30th, 2019 and for the six- month period then ended

Introduction

We have reviewed the accompanying interim condensed consolidated balance sheet of S.A.B.C.A. SA and its subsidiaries as of June 30th, 2019 and the related interim condensed consolidated income statement, the interim condensed consolidated statement of changes in equity, the interim condensed consolidated of comprehensive income and the interim condensed consolidated cash flow statement for the six-month period then ended, as well as the explanatory notes.

The board of directors is responsible for the preparation and fair presentation of this condensed consolidated interim financial information in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information as at June 30th, 2019 and for the six-month period then ended is not prepared, in all material respects, in accordance with IAS 34 as adopted by the European Union.

Brussels, September 24th, 2019

Mazars Réviseurs d'Entreprises SCRL

Represented by

Lieven ACKE

Registered Auditor

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

9

Press release

Financial calendar

  1. Annual report 31 December 2019 : April 2020
  2. General meeting : 28thMay 2020
  3. Half-yearresults 30 June 2020 : September 2020

Financial information

The company makes available its financial information on its website : www.sabca.be

Contact

Accounting and financial data

Dimitri DURAY

Chief Financial Officer 02/729 55 20

General

Angeles AGUILILLA MONTERO Assistant General Management 02/729 57 01

___________________

______________________________________________________________________________________________________

SOCIETE ANONYME BELGE DE CONSTRUCTIONS AERONAUTIQUES

Chaussée de Haecht 1470 - B-1130 BRUXELLES

Haachtsesteenweg 1470 - B-1130 Brussel

RPM Bruxelles

T.V.A. BE 0405 770 992 B.T.W.

RPR Brussel

10

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SABCA - Société Anonyme Belge de Constructions Aéronautiques published this content on 24 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 September 2019 20:02:01 UTC