WFS Global Holding SAS

Transcription

1 WFS Global Holding SAS Supplemental Pro Forma Data For the Period Ended December 31, m Senior secured notes 9.5% due m Senior notes 12.5% due 2022

2 This Pro Forma Data of WFS is intended to supplement Unaudited Pro Forma Consolidated Financial Information for period ended December 31, Pro Forma Data of WFS The following table presents unaudited financial information of WFS, which we use to analyze our business on a consolidated basis, as well as certain data presented on an as adjusted basis for the refinancing of our Existing Indebtedness and on a pro forma basis to reflect our CAS Acquisition, Orbital and FCS Acquisition, in each case for the periods indicated: Twelve-month ended September 30, 2015 (as presented in the OM, dated February 5, 2016) Year ended December 31, 2015 ( in millions except percentages and ratios) Revenue - WFS 738,7 771,9 Pro forma revenue (1) 974, ,8 EBITDA - WFS (2)(3)(5) 44,5 39,8 Adjusted EBITDA - WFS (2)(4)(5) 60,8 59,4 Adjusted EBITDA Margin - WFS (5) 8,2% 7,7% Pro forma Adjusted EBITDA (6) 111,0 110,8 Pro forma Adjusted EBITDA margin (5) 11,4% 10,6% Net capital expenditures - WFS (7) (11,2) (14,9) Change in working capital - WFS (8) 0,6 2,7 Adjusted pre-tax free cash flow - WFS (9) 46,1 44,4 As Adjusted total debt (10) 510,8 526,7 As Adjusted cash and cash equivalents and marketable securities (11) 49,4 32,4 As Adjusted net senior secured debt (12) 320,4 352,1 As Adjusted net debt (13) 461,4 494,3 As Adjusted cash interest expense (14) (52,3) (52,6) Ratio of As Adjusted total debt to Pro forma Adjusted EBITDA 4.60x 4,76x Ratio of Adjusted net senior secured debt to Pro forma Adjusted EBITDA 2,89x 3,18x Ratio of As Adjusted net debt to Pro forma Adjusted EBITDA 4,16x 4,46x Ratio of Pro forma Adjusted EBITDA to As Adjusted cash interest expense 2,12x 2,11x (1) The pro forma financial and other data presented herein reflects the effect of our full consolidation of the results of operations of Orbital into our consolidated financial statements subsequent to our acquisition of an 80% stake in its common equity, as if such full consolidation had taken place from January 1, 2015, the effect of FCS Acquisition and the effect of the acquisition of a 100% controlling share in CAS, as if the acquisition had occurred as of January 1, For a reconciliation of Pro forma revenue to Revenue, see Unaudited Pro Forma Consolidated Income Statement. (2) EBITDA and Adjusted EBITDA as presented here may differ from the definition of Consolidated EBITDA. EBITDA, Adjusted EBITDA and Adjusted pre-tax free cash flow are not uniformly or legally defined financial measures and are measurements of performance under French GAAP, and you should not consider Adjusted EBITDA or Adjusted pre-tax free cash flow as an alternative to operating income or net income (as determined in accordance with French GAAP) as a measure of our operating performance, cash flows from operating, investing and financing activities as a measure of our ability to meet our cash needs, or any other measures of performance under French GAAP or any other generally accepted accounting principles. We believe that Adjusted EBITDA or Adjusted pre-tax free cash flow are useful indicators of our ability to incur and service our indebtedness and can assist securities analysts, investors and other parties to evaluate us. Adjusted EBITDA or Adjusted pre-tax free cash flow and similar measures are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. There is no assurance that items we have identified for adjustment as non-recurring will not recur in the future or that similar items will not be incurred in the future. The majority of the adjustments relating to transactions classified as non-recurring for the purposes of calculating Adjusted EBITDA have been determined in the judgment of the management of our individual subsidiaries; we cannot exclude that such transactions may be viewed as recurring in nature if such classification had been performed at the level of the consolidated group. You should exercise caution in comparing Adjusted EBITDA or Adjusted pre-tax free cash flow as reported by us to similarly-named measures of other companies. See Presentation of Financial and Other Information Non-GAAP Financial Measures. 2

3 (3) EBITDA is defined as operating income plus depreciation and amortization of intangible and tangible assets. The following is a reconciliation of consolidated net income (loss) and operating income to EBITDA of WFS for the periods indicated: Year ended December 31, 2015 Consolidated net (loss) (20,9) Goodwill amortization 9,4 Income tax expense 4,8 Net financial income (expense) 29,4 Non-recurring income (0,2) Operating income 22,4 Non-recurring income 0,2 Depreciation and amortization of intangible and tangible assets 17,1 EBITDA 39,8 (4) Adjusted EBITDA is defined as EBITDA plus business tax expense and non-recurring items (including restructuring, closing and severance costs, pensions, transaction costs and other exceptional items). The following is a reconciliation of EBITDA to Adjusted EBITDA of WFS for the periods indicated: Year ended December 31, 2015 EBITDA 39,8 Business tax expense 3,4 Restructuring, closing and severance costs(b) 1,6 Pensions(c) 0,8 Transaction costs(d) 1,2 Other non-recurring items(e) 12,6 Adjusted EBITDA 59,4 (b) (c) (d) (e) Business tax expense principally includes the Business Contribution on Added Value tax (Contribution à la Valeur Ajoutée des Entreprises or CVAE ) which replaced the French business tax in January Under French GAAP, CVAE is classified as other operating expenses rather than corporate income tax and therefore is a reduction to operating income. Restructuring, closing and severance costs include costs incurred as a result of closing business units or terminating contracts in connection with specific restructuring measures. Severance costs relate to the departure of employees. Represents the change in provision related to our liability for future payments under pension and retirement plans applicable to the employees of the WFS group, which is a French GAAP requirement and is calculated on the basis of actuarial estimates of future liabilities. We adjust EBITDA for this item because it is a non-cash charge on our income statement. Actual payments under applicable pension and retirement plans related to any particular period are charged against the provision and included in EBITDA for that period. Transaction costs related to the group s refinancing and due diligence processes. Other non-recurring items resulting from recording of provisions associated with the on-going operations of its Italian subsidiary, costs of discontinuing operations in Sweden, the start-up costs of new businesses or stations and payment to employees associated with the sale of the share capital of WFS Global Holding SAS. (5) Adjusted EBITDA margin and Pro forma adjusted EBITDA margin are defined as Adjusted EBITDA divided by revenue and as Pro forma adjusted EBITDA divided by Pro forma revenue, respectively. 3

4 (6) Pro forma Adjusted EBITDA (including synergies) WFS CAS as adjusted, reclassifed and converted Orbital as adjusted, reclassifed and converted FCS as adjusted and reclassifed Pro forma CAS Acquisition (Ω) Pro forma Orbital Acquisition ( ) Total Pro forma adjustments (Ω + ) (b) Pro forma Revenue 771,9 237,9 7,1 27, ,8 Other operating income 2, ,5 Cost of goods sold (190,9) (66,5) (0,3) (20,5) (278,2) Personnel expenses (418,8) (135,4) (4,5) (7,4) (566,0) Other operating expenses (102,3) (11,7) (0,5) (0,5) (115,0) Taxes and duties (16,6) (1,0) (0,0) (17,6) Amortization and depreciation (17,1) (14,2) (0,2) (0,7) (32,3) Provisions (6,3) (12,8) (0,1) (0,1) (19,3) Operating income 22,4 (3,7) 1,6 (1,4) ,9 Net financial income (expense) (29,4) (8,6) - (0,2) (22,5) - (22,5) (60,7) Income (loss) from ordinary activities of consolidated companies (7,0) (12,2) 1,6 (1,6) (22,5) - (22,5) (41,8) Non-recurring income 0, ,2 Corporate income tax (4,8) 7,1 (0,5) (0,5) 8,2-8,2 9,6 Net income (loss) from consolidated companies (11,5) (5,1) 1,0 (2,1) (14,3) - (14,3) (32,0) Goodwill amortization (9,4) (12,2) (0,3) (12,5) (21,8) Consolidated net income (loss) (20,9) (5,1) 1,0 (2,1) (26,4) (0,3) (26,7) (53,8) Minority interests (0,6) - 0,6 - - (1,0) (1,0) (1,0) Net income (loss) attributable to the group (21,5) (5,1) 1,6 (2,1) (26,4) (1,2) (27,7) (54,8) Operation Income 22,4 (3,7) 1,6 (1,4) ,9 Non-recurring income (loss) 0, ,2 Amortization and depreciation (17,1) (14,2) (0,2) (0,7) (32,3) EBITDA 39,8 10,5 1,8 (0,7) ,4 Business tax expense (3,4) (3,4) Restructuring, closing and severance costs for WFS (b) (1,6) (1,6) Restructuring, closing and severance costs for CAS (c) - (11,2) (11,2) Pensions (d) (0,8) (0,8) Transaction costs for WFS (e) (1,2) (1,2) Transaction costs for CAS (f) - (1,4) (1,4) Other non-recurring items for WFS (g) (12,6) (12,6) Other non-recurring items for CAS (h) - (3,9) (3,9) Adjusted EBITDA 59,4 27,0 1,8 (0,7) ,5 Synergies(i) - 19,5-3, ,5 Add-back : Discontinued operation (j) 0, ,8 Pro forma adjusted EBITDA (k) 60,3 46,5 1,8 2, ,8 (b) (c) Business tax expense principally includes the CVAE which replaced the French business tax in January Under French GAAP, CVAE is classified as other operating expenses rather than corporate income tax and therefore is a reduction to operating income. For WFS, restructuring, closing and severance costs include costs incurred as a result of closing business units or terminating contracts in connection with specific restructuring measures. Severance costs relate to the departure of employees. For CAS, restructuring, closing and severance costs include provisions for legal claims. 4

5 (d) (e) (f) (g) (h) Represents the change in provision related to our liability for future payments under pension and retirement plans applicable to the employees of the WFS group, which is a French GAAP requirement and is calculated on the basis of actuarial estimates of future liabilities. We adjust EBITDA for this item because it is a non-cash charge on our income statement. Actual payments under applicable pension and retirement plans related to any particular period are charged against the provision and included in EBITDA for that period. For WFS, transaction costs related to the group s refinancing and due diligence processes. For CAS, transaction costs reflect expenses related to the sale of CAS to WFS such as legal advisory fees, financial due diligence and other advisory services. For WFS, other non-recurring items resulting from recording of provisions associated with the on-going operations of its Italian subsidiary, costs of discontinuing operations in Sweden, the start-up costs of new businesses or stations and payment to employees associated with the sale of the share capital of WFS. For CAS, other non-recurring items principally include adjustments of management fees paid to former controlling shareholder ICV Partners, along with additional adjustments related to fuel tax credit and the integration of IAS. Integration related items include: rebranding, start-up and temporary duplicate rental costs. (i) CAS synergies : We believe that the combination of the WFS North American operations with CAS will unlock significant synergies, enhancing the profitability of the combined business. Based on management s analysis prepared and diligence at a detailed level with the assistance of outside advisors and other professionals, run-rate synergies are an estimated 19.5 million ($21.6 million) relating to initiatives that we plan to implement within 48 months following the completion of the Acquisition; although we anticipate implementing a significant portion of such cost savings measures much sooner. The synergies are comprised of: FCS synergies: Reduction in operating expenses across sites where there is overlap between WFS and CAS, derived from the consolidation of management teams and facilities. Reduction in operating expenses across sites where there is no overlap, derived from the restructuring of management assignments, sharing of best practices to improve efficiencies, and the shutdown of peripheral loss-making sites. Cost saving resulting from the consolidation of North American head offices and the removal of duplicative headcount across several functions. Increase in revenue achieved by rolling out the CAS online customer service portal across WFS sites. We believe that the combination of WFS German operations with FCS under the terms of our joint venture agreement will provide significant cost savings thereby enhancing the profitability of the combined operation. Based on management s analysis prepared and diligence at a detailed level with the assistance of outside advisors and other professionals, net run-rate synergies are an estimated 3.0 million per annum relating to initiatives that we plan to implement within 12 months. The synergies are comprised of consolidation of management teams, facilities and contracts. The figures presented herein as cost savings are estimates and are for informational purposes only and based on our analysis of certain operating and financial information. Although we believe the estimates and assumptions we have used to calculate the synergies and cost savings are reasonable and are based either on our historical experience or our knowledge of the marketplace, investors should not place undue reliance upon any of these calculations as underlying estimates and assumptions could differ from what would have been our results. The assumptions used in estimating synergies are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the synergies benefit estimates. We cannot assure you that we will be able to realize any of these synergies or cost savings, and the costs we incur in trying to realize these synergies may outweigh the benefits. (j) WFS discontinued its operations in Sweden on December 31, (k) Pro forma Adjusted EBITDA represents Consolidated EBITDA as described in the bond indenture with effect of pro forma adjustments plus the impact of estimated synergies and add-back of discontinued operations. (7) Net capital expenditure is capital expenditures net of proceeds from disposals of fixed assets. (8) Change in working capital is calculated as the difference between working capital at the end of the relevant period and working capital at the beginning of the relevant period. 5

6 (9) Adjusted pre-tax free cash flow is defined as Adjusted EBITDA less business tax expense, change in provisions, change in working capital and net capital expenditure. The following is a reconciliation of Adjusted EBITDA to Adjusted of WFS pre-tax free cash flow for the periods indicated: Year ended December 31, 2015 Adjusted EBITDA 59,4 Business tax expenses (3,4) Change in provision 0,6 Change in working capital 2,7 Net capital expenditures (14,9) Ajdjusted pre-tax free cash flow 44,4 Business tax expense principally includes the CVAE which replaced the French business tax in January Under French GAAP, CVAE is classified as other operating expenses rather than corporate income tax and therefore is a reduction to operating income. (10) As adjusted total debt is defined as financial indebtedness after giving effect to the Transactions, excluding accrued and unpaid interest. As adjusted total debt as presented here differs from the calculation of the amount of indebtedness of WFS and its restricted subsidiaries for purposes of the covenants in the Indenture and our other financing documents. (11) As adjusted cash and cash equivalents is defined as cash and cash equivalents, marketable securities after giving effect to the Transactions. (12) As adjusted net senior secured debt corresponds to Senior Secured Indebtedness as defined in the Senior Secured Notes Indenture, less cash, cash equivalent and marketable securities. As adjusted net senior secured debt as of December 31, 2015 is comprised of (i) the principal amounts of indebtedness outstanding under our Revolving Credit Facility on December 31, 2015 ( 21.0 million), (ii) the principal amount of our Existing Senior Secured Indebtedness ( million), (iii) the principal amount of the Additional Senior Secured Notes ( million), (iv) the limited recourse factoring outstanding on December 31, 2015 ( 18.7 million) and (v) the finance leases outstanding on December 31, 2015 ( 19.8 million). (13) As adjusted net debt is defined as adjusted total debt less as adjusted cash, cash equivalents and marketable securities. (14) The as adjusted cash interest expense of 52.6 million reflects the total interest expense that the Group would pay on a twelvemonth basis based on the actual balances of Capital Leases, Factoring and the Revolving Credit Facility outstanding as of December 31, 2015, including the interest expense on (A) the million Existing Senior Secured Notes and (B) the million of Additional Senior Secured Notes and million of Senior Notes. Actual interest rates used to calculate the WFS total interest expense in the amount of 52.6 million is 9.5% on the million Additional Senior Secured Notes and 12.5% on the million Senior Notes. 6