2014 FULL YEAR RESULTS

Transcription

1 2014 FULL YEAR RESULTS Yves ROCHE, Chief Executive Officer Ingo SCHAEFER, Chief Financial Officer

2 Agenda 1. Introduction 2. Key Performance Indicators by segment financial key figures 4. Legal proceedings 5. Environmental rehabilitations 6. Conclusion and outlook 7. Q&A 2

3 1. Introduction 3

4 Regenerating the urban mine with 4 business segments at the heart of the circular economy Lead 3 rd largest producer and 2 nd largest recycler in Europe Best in-class lead recycling process mainly from automotive and industrial batteries Lead ingots labeled on the LME mainly sold to battery producers 2014 production: approx. 140,000 tonnes Plastics Pioneer and leader in polypropylene recycling Polypropylene recycling mainly from automotive batteries, production offcuts, bumpers, etc. Recycled polypropylene mainly sold to the automotive industry 2014 production: approx. 17,000 tonnes Zinc Special Metals Key position in zinc recycling Zinc recycling from electric arc furnace dust Waelz oxides produced sold to zinc producers 2014 production: approx. 71,000 tonnes Zinc recycling from zinc scrap Zinc oxides produced sold to the tires, cosmetics, pharmaceutical industries 2014 production: approx. 25,000 tonnes Among the worldwide leader in certain special metals production Production of high purity special metals notably for telecommunications, electronics, infrared technology, solar energy, etc. Germanium, Arsenic, Gallium, Indium, etc. 4

5 Breakdown of consolidated sales per segment 2014 consolidated sales (per segment) Consolidated sales* (in million) % 422 Lead Zinc Special Metals Polypropylene * IFRS - Do not anymore include 50% of Recytech SA in the Zinc segment Scrap lead-acid batteries integrated recycling (lead + plastics) accounts for almost 80% of sales 5

6 2014 highlights Group operating loss before non-recurring items of 13.3 million, reduced by 21 M from 2013 Further improvement in the Lead segment s operating performance in H Sharp increase in the Zinc segment s operating income before non-recurring items Plastics segment dynamism affected as scheduled by new extrusion line ramp up Reduction of the Special Metals segment operating loss Cash flow from operating activities before tax back in positive territory at 3.8 M Restated EBITDA at 8.2 M, up 22M Net loss reduced by 40% ( 23.9 million) from 2013 Including impairment losses of 10.5 million in the Lead and Special Metals segments recognized in 2014 Loan facility by Glencore International AG arranged by Recylex SA primarily to complete its continuation plan Payment of plan s penultimate installment made successfully in November 2014 ( 4.3M) 6

7 2006/2014 Recylex SA cash-outs linked to the past Total (10 installments) Frozen debt / Initial continuation plan ( 50M*) 40M 2M M Environment (mines and L Estaque) 27M 15M and beyond 42M Metaleurop Nord employees legal procedures integrated in the continuation plan 13.5M 2.5M M 2010 claims at risk + 10M** Total 80.5M 19.5M 100M Probably 110M** * Deferral until 2019 of the repayment of several amounts outstanding under the continuation plan, for approx. 8M ** Potential risk due to 2013 claims for prejudice of anxiety ( 14M / not provisioned) 7

8 2. Key Performance Indicators by segment 8

9 2. Key Performance Indicators by segment 2.1 Lead segment Weser-Metall GmbH, Nordenham, Germany / Lead smelter 9

10 Lead-acid batteries recycling in the Recylex Group Recylex s integrated LAB recycling process (lead + polypropylene + sulfuric acid) Collection Crushing Extruding Lead and polypropylene separation Cleaning SULFURIC ACID RECOVERY Smelting LEAD POLYPROPYLENE Refining 10

11 Lead price evolution in price evolution (daily prices per ton) Annual average (in per ton) -2% Lead price strong downward trend at the end of 2014 /$ parity key driver in 2014, especially in Q4 11

12 2014 operational performance Industrial performance (in tonnes) * Weser-Metall GmbH smelter in Nordenham only Sales (in million) -4% -8% +4% More selective purchasing policy initiated in 2014 to recover margins Slight contraction in scrap batteries volumes (-8%) Shift in smelter feeding mix in favor of non-secondary materials New comparison base for Group lead production Focus on Nordenham (vs with last volumes of FMM production in Belgium) Increase in lead production at the Nordenham smelter (+5,500 tonnes) Favorable comparison base (no maintenance shutdown in 2014 vs. 1 in 2013) Continued productivity gains and teams efforts Record number of production days between 2 scheduled maintenance shutdowns Sales impacted by 2% lead price decrease and tolling contract on concentrates in H Exclusion of volumes produced under tolling agreements (approx. 5% of 2014 sales) 12

13 Business model key parameters 2014 evolution LME Lead price Annual average down 2% vs. 2013, Strong decrease in Q partially offset by the USD strengthening vs. Euro Treatment charges = Stable Premiums Up vs By-products (sulfuric acid) Decrease in sulfuric acid sales (volumes up and price slight decline) Overrecovery Up due to increase in volumes Scrap battery price = Remained at very high levels, continued strong demand for materials to be recycled 13

14 2014 financial performance Financial performance IFRS Restated Financial performance (after revaluation of stocks in LIFO**) (in million) Sales EBIT (11.6) (29.2) in % of Sales (3.7)% (9.0)% (in million) Sales EBIT (5.8) (23.4) in % of Sales (1.9)% (7.2)% EBITDA (7.7) (22.3) EBITDA (0.7) (17.6) in % of Sales (2.5)% (6.9)% Gross margin* in % of Sales 10.0% 6.1% in % of Sales (0.2)% (5.4)% Gross margin* in % of Sales 12.3% 7.5% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) ** Valuation method not admitted under IFRS. The valuation method for the «Lead» operating segment is based on LIFO (Last In First Out) for internal reporting in valuing inventory for the Group s main smelter in Germany (Nordenham). For the effects of restating inventories under the LIFO method at the Nordenham smelter, see note 19 to the 2014 consolidated financial statements 14

15 2014 highlights Strong improvement in operating profitability Better margins due to productivity gains, benefits from the more selective purchasing policy, favorable base of comparison Further improvement in operating profitability in H2 vs H Restated Half Year EBITDA (in M) Restated EBIT at -5.8 M Up 17.6 M compared to /2014 Restated EBIT bridge (in M) Restated EBITDA almost at break even 2013 restated EBIT Scrap batteries selective purchasing policy benefits Cost reductions at Weser-Metall GmbH Impact of the absence of maintenance shutdown Non-cash effects Others 2014 restated EBIT 8.8 M impairment loss on the segment s assets Despite improvement in operating performance As a result of the recurring profitability issues

16 2. Key Performance Indicators by segment 2.2 Plastics segment C2P, Villefranche-sur-Saône, France / Recycled polypropylene granulates 16

17 2014 operational performance Industrial performance (in tonnes) Sales (in million) +17% +20% Continued sales growth in 2014 Growing demand from the automotive industry for C2P France Customers portfolio expansion for C2P Germany Production increase thanks to the renewed extrusion line in France Ramp up phase during H

18 2014 financial performance and highlights Financial performance IFRS (in M) Sales EBIT in % of Sales 2.8% 5.8% EBITDA Profitability impacted by the expected ramp up phase of the new extrusion line in H EBIT down but positive EBITDA positive, in slight decline in % of Sales 6.1% 9.1% Gross margin* in % of Sales 51.1% 57.1% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) 18

19 2. Key Performance Indicators by segment 2.3 Zinc segment Recytech SA, Fouquières-lez-Lens France / Waelz oxides kiln 19

20 Zinc price evolution in price evolution (daily prices per ton) Annual average (in per ton) +14% Strong increase due to worldwide market small deficit in 2013 and 2014 Lower /$ parity impact on Zinc price compared to lead in

21 2014 operational performance Industrial performance (in tonnes) -2% * Including 100% of Recytech SA Restated sales (in million) +7% +1% Overall stable volumes in terms of waste treatment and production Waelz oxides: 170,000 tonnes of EAF treated (+1%) 70,650 tonnes of Waelz oxides produced (+1%) Zinc oxides: Sales up 7% 24,200 tonnes of scrap treated (-2%) 24,800 tonnes of zinc oxides produced (-2%) Thanks to the high increase in zinc price during 2014 and a favorable base of comparison (no maintenance shut down at Harz-Metall GmbH in 2014 vs. 1 in 2013) Notably despite less favorable commercial conditions in the Waelz oxides activity 21

22 Business model key parameters 2014 evolution LME Zinc price 14% increase on average compared to 2013 Waelz oxides Treatment charges dust Treatment charges paid Small decline due to market strong demand for materials to be recycled In line with the increase of the zinc concentrates treatment charges Zinc oxides Zinc oxides price Zinc scrap price Slight increase due to zinc price increase but in a weak market Strong demand of zinc scrap 22

23 2014 key financial figures and highlights Financial performance IFRS (in million) Sales EBIT in % of Sales 4.8% 1.6% EBITDA in % of Sales 9.0% 7.3% Gross margin* in % of Sales 31.0% 32.3% Restated Financial performance** (in million) Sales EBIT in % of Sales 11.0% 6.7% EBITDA in % of Sales 15.4% 12.8% Gross margin* in % of Sales 38.1% 38.9% Significant increase in profitability vs (EBITDA and EBIT) Zinc price strong increase in 2014 Favorable base of comparison * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) ** Accounting for Recytech SA (50%-owned) using proportional consolidation in the Zinc segment / method not permitted under IFRS 23

24 2. Key Performance Indicators by segment 2.4 Special Metals segment PPM Pure Metals GmbH, Langelsheim, Germany / Germanium purification 24

25 2014 key financial figures and highlights Financial performance IFRS (in M) Sales EBIT (1.1) (2.5) in % of Sales NS NS EBITDA (0.3) (1.8) in % of Sales NS NS Gross margin* Strong increase in sales (+19%) Higher arsenic and germanium sales, especially in H Improvement in operating performance but margins at unsatisfactory levels EBIT still negative EBITDA almost at break even 1.7 million impairment loss on the segment s assets due to recurring profitability issues in % of Sales 37.7% 39.2% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) 25

26 financial key figures 26

27 Key figures (IFRS) (in tsd. ) * VAR. Sales 421, ,835-3,298 EBITDA (5,560) (23,480) +17,920 EBIT (13,305) (34,442) +21,137 Non recurrent result (13,557) (2,709) -10,848 Financial result (1,587) (2,969) +1,382 Net income (23,940) (39,626) +15,686 Cash flow from operating activities before tax 3,846 (7,180) +11,026 Operating cash flow (3,769) (15,650) +11,881 *: 2013 IFRS data restated for companies accounted for under the equity method in line with IFRS 10 and IFRS 11 27

28 Restated Key figures* (in tsd. ) VAR. EBITDA 8,158 (13,628) +21,786 EBIT (1,690) (24,471) +22,781 Cash flow from operating activities before tax 3,846 (7,180) +11,026 Operating cash flow (3,769) (15,650) +11,881 * Indicators tracked internally including the accounting of Lead segment inventories using the LIFO method and accounting for Recytech SA (a 50%-owned subsidiary) using proportional consolidation in the Zinc segment / These methods are not permitted under IFRS, see Note 19 to the consolidated financial statements. 28

29 From EBITDA to Net Result From EBITDA to Net Result 2014 (in tsd.) Restated EBITDA LIFO->PMP IFRS 10 & 11 EBITDA IFRS Amortization & Depreciation Increase in environmental provisions Provisions Risk & Restructuring costs Impairment Financial Result Result in associated company Corporate Taxes Net result 8,158-7,010 c -6,708-5,560-7,745-1,852-1,152 3, ,940 Cash effects Non-Cash effects -10,554-1,587 29

30 Group Cash flows 2014 Group Cash Flow evolution / IFRS 10 & 11 (in tsd.) 2,679 3,053 17,761 1,450-5,852-5,156 Investments financed from generated cash -4,261-2,874-1, ,388 Cash, gross 01/01/2014 EBITDA (LIFO) Dividends associated company Working capital variation (LIFO) Net investments Rehabilitation expenses Continuation plan Loans & financing costs Others Taxes Cash, gross 31/12/

31 Key figures (IFRS) (in tsd. ) Dec. 31, 2014 Dec. 31, 2013 VAR. See Financial LT Debt (including factoring wo short term facilities) 8,570 6,105 +2,465 Note 13 Rescheduled Debt (consolidated excluding provisions) 9,353 13,563-4,210 Note 18 Claw-back clause 6,270 6,270 0 Provisions 35,458 38,310-2,852 Note 14 Pensions liabilities 39,287 33,761 +5,526 Note 15 Capital expenditures 6,334 12,825-6,491 Notes 3 & 4 Working Capital 47,725 56,873-9,148 Cash, net of short term facilities (including leasing) (3,692) 5,274-8,966 Note 11 Equity 17,996 46,408-28,412 Net Debt 29,677 23,043 +6,634 Net Debt/ Restated EBITDA 3.64 (1.69) 31

32 Group Equity 2013/2014 Group Equity evolution (in tsd.) 46,408-23,940-4, ,996 Equity 2013 Net result Actuarial Variances Pensions Net Equity Line Equity

33 Net debt (in tsd. ) Dec. 31, 2014 Dec. 31, 2013 Used Credit lines Other short term financing Leasing < 1 year Total short term Continuation Plan Claw-back clause Long term Loans & Leasing Total Debt Cash gross 9,080 12,487 1,312 1, ,872 14,866 9,353 13,563 6,270 6,270 8,570 6,105 35,065 40,804 (5,388) (17,761) Net debt 29,677 23,043 33

34 Rescheduled debt (including continuation plan) Passive Payments Passive Payment Passive Payment Payment (in M) initial /12/ /12/ Initial Plan of (27.6) 3.9 (1.7) 2.2 (2.3) Intercompany 6.4 (3.6) (2.8) Glencore International AG 11.5 (6.4) (5.1) Total Plan of (37.6) 11.8 (1.7) 10.1 (2.3) (7.8) Indemnities (1. Wave) employees blue collar Metaleurop Nord SAS Indemnities (1. Wave) employees white collar Metaleurop Nord SAS 12.6 (8.6) 4.0 (2.0) 2.0 (2.0) 3.5 (2.3) 1.2 (0.6) 0.6 (0.6) Total Indemnities 16.1 (10.9) 5.2 (2.6) 2.6 (2.6) Total rescheduled passive Recylex SA 65.5 (48.5) 17.0 (4.3) 12.7 (4.9) (7.8) Debt (intragroup) (6.4) (2.8) (2.8) 2.8 Total rescheduled passive consolidated (4.3) 9.9 (4.9) (5.1) Provisions litigation (0.6) (0.6) (0.6) 0.6 Total rescheduled debt consolidated (4.3) 9.3 (4.3) (5.1) thereof current 4.3 thereof non current

35 Change in provisions in 2014 Release during the period (in tsd. ) December 31, 2013 Balance Increase during the period Discount to actual value Reclassed amounts Used Not used December 31, 2014 Balance Environmental provisions 26,528 1,630 (163) - (4,826) (23) 23,146 Litigation 10, (34) - 11,085 Restructuring (295) Other risks and charges Total provisions 38,310 2,398 (72) - (5,155) (23) 35,458 35

36 Capital Expenditures Capex* & Amortization (in million) Capex by sector (in million) * Capex 2013 and 2012 restated, IFRS 10 & 11 Capex reduction in order to spare cash 36

37 4. Legal proceedings - A document summarizing the developments in legal proceedings concerning Recylex SA and Metaleurop Nord can be found on the Recylex Group s website ( News Legal proceedings schedule) - European Commission s Directorate General for Competition s investigation concerning the lead batteries and other lead scrap purchase sector is still pending 37

38 Summary of legal proceedings concerning Metaleurop Nord Initiated in 2005: 554 final decisions ( 16.2M) Damages for dismissal without fair cause 586 claims for 17.6M (84% already paid for 2006/2014, last installment on 24/11/ for 2.6M) Initiated in 2010: 192 claims for 9.96M Pending in appeal Former employees of Metaleurop Nord Damages for prejudice of anxiety (asbestos)* and/or disruption in living conditions and/or contesting of dismissal Initiated in : 423 claims for 13,6 M Pending (first instance) Damages for prejudice arising from the cancellation of dismissal Initiated in 2014: authorization, dismissal without fair cause and prejudice of anxiety and/or disruption in living conditions 16 claims from former protected employees for 2,4 M Pending (first instance) * Pending administrative legal proceedings in order to cancel the classification of the Noyelles-Godault facility of Metaleurop Nord SAS into the list of facilities eligible for the early retirement allocation for asbestos workers 38

39 Summary of legal proceedings concerning Metaleurop Nord and Recylex SA Claim for extension of liquidation of Metaleurop Nord SAS (2003) Favorable decisions for RX in first instance, in appeal and in Supreme Court Final decision favorable to Recylex (2005) Liquidators of Metaleurop Nord Claim for repayment of Metaleurop Nord liabilities for 50M (2005) Claim for liability against Recylex SA as co-employer (2014) Favorable decisions for RX in first instance, in appeal and in Supreme Court To indemnify them up to 22 M (statutory severance indemnities paid to the former employees of Metaleurop Nord by the salary guarantee fund regime - AGS ) Final decision favorable to Recylex (2013) Pending (first instance) Claim for liability filed by Recylex SA against the liquidators (2013) For personal misconduct committed within the Metaleurop Nord employees redundancies Pending (first instance) 39

40 Legal proceedings: 2014 highlights July and September 2014: new claims for damages from 16 former protected employees In July and September 2014, the Company received 16 new claims for damages from former protected employees for prejudice arising from cancellation of dismissal authorization and dismissal without fair cause. 12 of them are also claiming damages for prejudice of anxiety and/or disruption to their living conditions. The total amount claimed stands at around 2.4 million (amount not accrued in the accounts) The Company intends to vigorously defend its interests against these latest claims 40

41 Legal proceedings: 2014 highlights Claim for liability filed by the liquidators of Metaleurop Nord SAS October 17, 2014: the liquidators of Metaleurop Nord SAS initiated a claim against Recylex SA before the Arras Commercial Court to have it condemned, as co-employer, to indemnify them for approximately 22 millions corresponding to the statutory employment contract severance payments and indemnities paid to the former Metaleurop Nord employees in 2003 by the salary guarantee fund regime (AGS - French employers association overseeing guaranteed payment of salaries and wages) Recylex SA intends to defend itself vigorously against this claim and to protect its interests 41

42 5. Environmental rehabilitations 42

43 Environmental liabilities of Recylex SA Rehabilitation of 28 old mines (none under operation) Legacy from the company s mining past Rehabilitation designed with each mine own specifications Under the control of environmental and mining authorities 18 mining claims signed away since mines still to be signed away Of which 7 waiting for French administration s stamp Semnon In green: rehabilitation works completed and mine claim signed away (18 mines) In blue: rehabilitation works completed, pending signing away (7 mines) In red : ongoing rehabilitation works (3 mines) Rehabilitation of the old industrial site in L Estaque (Marseille France) Legacy from the company s industrial past Site size approx. 83 hectares ( 830,000 m²) of which: 15 ha to be rehabilitated 68 ha of natural land (no rehabilitation needed no construction possible in the future) Puy les vignes Charrier Montmins La Gruvaz La Plagne Villefort Le Piscieux Villemagne Chassezac Trèves St Julien Largentière Malines L Argentière La Bessée Peyrebrune Anjeau St Salvy La Mole Palouma Labarré La Londe Faucon L Argentière Villeneuve Arrens Les Bormettes Pierrefitte Orle 43

44 Rehabilitation of the L Estaque site / 2014 highlights Rehabilitation work at the L Estaque old industrial site in Marseille continued in 2014 Construction and partial filling of landfill # works amounted at 3.6 million Recylex SA continues its search for dedicated financing to finalize this rehabilitation work A request to defer the completion date for the rehabilitation work at this site, currently set at December 31,, will be filed in the first half of with the relevant authorities 44

45 6. Conclusion and outlook 45

46 Cash position and update on the search for financing 2014 achievements: Working capital requirement reduced in the Lead segment as a consequence of: Tolling agreement covering the processing of lead concentrates Cost reduction initiatives Loan agreement in Q with Glencore International AG for up to 16 million, intended chiefly to cover the final two repayments due under its continuation plan Payment of plan s penultimate installment made successfully in November 2014 The Group continues its financing search initiated in 2014 and is currently in discussion with banks in order to obtain additional credit lines aiming at covering all the working capital requirements of the Group s German subsidiaries Given the cash used in 2013 and 2014, the Group s current cash situation remains very difficult 46

47 Outlook for Group priorities: 1/ Continue the search for additional financing of the working capital requirement 2/ Continue further industrial efforts to restore the Lead segment s profitability Lead Favorable fundamentals (global market deficit) despite current decrease in lead prices Positive outlook for premiums Mild 2014/ winter: Expected decline in scrap availability early Smelter maintenance shutdown scheduled in H1 priorities to restore operating profit: Plastics Pursuance of the selective purchasing policy Pursuance of the feasibility study of a plan to set up an additional industrial installation at the Nordenham smelter Continue to reduce operating costs Early production levels similar to 2014 segment s performance will depend on ability to offset oil prices decrease Primarily by paying lower input costs priorities: Improve industrial efficiency Continue to diversify customer portfolio Zinc Favorable fundamentals for zinc price on the medium term Global market moderate deficit again expected for Zinc oxides: Waelz oxides: priority: continue to develop sourcing portfolio priority: continue to improve industrial efficiency Harz-Metall GmbH Waelz kiln maintenance shutdown scheduled in H1 Special Metals recovery main drivers: Sustainability of the demand from the semiconductors sector, especially in Asia Evolution of the euro/yen exchange rate priorities: Continue to develop sales, commercial network and secondary feeds Operational efficiency program 47

48 7. Q&A 48