QUARTERLY REPORT FOR THE THREE MONTHS AND NINE MONTHS ENDED 30 SEPTEMBER 2014 (unaudited) HYVA GLOBAL B.V. (the Issuer )

Transcription

1 QUARTERLY REPORT FOR THE THREE MONTHS AND NINE MONTHS ENDED 30 SEPTEMBER 2014 HYVA GLOBAL B.V. (the Issuer ) 28 November 2014

2 Introduction On 24 March 2011, Hyva Global B.V. (the Issuer or the Company ) issued its 8.625% Senior Secured Notes due 2016 (the Notes ) pursuant to an indenture dated 24 March 2011 among the Issuer, Hyva III B.V., Wilmington Trust FSB, as Trustee, Principal Paying Agent, Registrar and Transfer Agent, and Wilmington Trust (London) Limited, as Security Agent (as amended or supplemented, the Indenture ). Unless otherwise specified, capitalised terms used herein that are not otherwise defined, have the meanings given to such terms in the Indenture. Section 4.16(1)(b) of the Indenture requires, so long as any Notes are outstanding, the Issuer to furnish to the Trustee, within 60 days following the end of each of the first three fiscal quarters in each fiscal year of the Issuer thereafter, quarterly financial statements containing the following information: (i) the Issuer s unaudited condensed consolidated balance sheet as at the end of such quarter and unaudited condensed statements of income and cash flow for the most recent quarter year to date period ending on the unaudited condensed balance sheet date and the comparable prior period, together with condensed footnote disclosure; (ii) an operating and financial review of the unaudited financial statements, including a discussion of the results of operations, financial condition, and material changes in liquidity and capital resources of the Issuer; and (iii) calculations of Consolidated EBITDA, Consolidated Non-Guarantor EBITDA, Consolidated Interest Expense and Consolidated Non-Guarantor Debt, in each case, for the four quarters ended with such fiscal quarter. Section 4.16(3) of the Indenture further requires the Issuer to make available copies of the report discussed above (a) on the Issuer s public website; (b) through the newswire service of Bloomberg, or, if Bloomberg does not then operate, any similar agency; and (c) if and so long as the Notes are listed and quoted on the Official List of the SGX-ST and to the extent that the rules of the SGX-ST so require, copies of such reports furnished to the Trustee shall also be made available at the specified office of the paying agent in Singapore. This Quarterly Report as of and for the three months and nine months ended 30 September 2014, is published to comply with the reporting requirements in the Indenture discussed above. Forward-Looking Statements This Quarterly Report may include forward-looking statements. All statements other than statements of historical fact contained in this Quarterly Report, including, without limitation, those regarding future financial position and results of operations, strategy, plans, objectives, goals and targets, future developments in the markets in which the Issuer and its consolidated subsidiaries (together Hyva ) participate or seek to participate, and any statements preceded by, followed by or that include the words believe, expect, aim, intend, will, may, anticipate, seek, should or similar expressions or the negative thereof, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Hyva, which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future business strategies and the environment in which Hyva will operate in the future. Actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. All forward-looking statements in this document are based on information available to Hyva as of the date of this Quarterly Report and Hyva assumes no obligation to update any such forward-looking statements. 1

3 Presentation of Financial Information and Use of Non-GAAP Financial Information The condensed consolidated financial statements presented in this Quarterly Report have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ( IFRS ) and International Financial Reporting Interpretations Committee interpretations applicable to companies reporting under IFRS. However, please note that this Quarterly Report does not necessarily include all disclosure required by IFRS, including IAS 34 Interim Financial Reporting. The quarterly condensed consolidated financial statements included herein do not include all the information and disclosure required in the annual consolidated financial statements, and should therefore be read in conjunction with the Issuer s annual financial statements as at 31 December Detailed information regarding the accounting policies used for preparing the condensed financial statements included in this Quarterly Report is provided in Note 2 to the Issuer s consolidated financial statements for the year ended 31 December In this Quarterly Report, reference is made to EBITDA, Pro forma EBITDA and Adjusted EBITDA. EBITDA is defined as operating profit plus depreciation, amortisation and impairment of assets. Pro forma EBITDA is defined as EBITDA adjusted to exclude Transaction (as defined herein) related expenses. Adjusted EBITDA is defined as Pro forma EBITDA adjusted to exclude other additional extraordinary items, non-recurring costs and certain other items. Unless otherwise indicated, EBITDA, Pro forma EBITDA and Adjusted EBITDA figures in this Quarterly Report are calculated on a consolidated basis, inclusive of all subsidiaries of Hyva Global B.V., as of 30 September It should also be noted that EBITDA is calculated differently from Consolidated EBITDA as defined and used in the Indenture governing the Notes. Management believes that EBITDA, Pro forma EBITDA and Adjusted EBITDA serve as useful indicators of Hyva s (as defined herein) operating performance. EBITDA, Pro forma EBITDA and Adjusted EBITDA are non-gaap measures and are not required by or presented in accordance with IFRS. They are not intended as a replacement for, or alternatives to, measures such as net cash from operating activities or operating profit as defined and required under IFRS. Hyva believes that EBITDA, Pro forma EBITDA and Adjusted EBITDA are measures commonly used by analysts, investors and peers in the industry. Accordingly, this information is disclosed to permit a more complete analysis of Hyva s operating performance. EBITDA, Pro forma EBITDA and Adjusted EBITDA, as calculated herein, may not be comparable to similarly titled measures reported by other companies. EBITDA, Pro forma EBITDA and Adjusted EBITDA may not be indicative of historical results of operations, nor are they meant to be predictive of future results. In this Quarterly Report, where information has been presented in thousands or millions, amounts may have been rounded. Accordingly, totals of columns or rows of numbers in tables or charts may not be equal to the apparent sum of the individual items. Actual numbers may differ from those contained herein due to such rounding. Important Note Regarding Confidentiality This Quarterly Report is confidential and has been prepared exclusively for use by any holder of the Notes or any prospective investor in accordance with Section 4.16 of the Indenture. You are authorised to use this Quarterly Report solely for the purpose of evaluating your investment in, or considering the purchase of, the Notes. Neither the delivery of, or access to, this Quarterly Report implies that any information set forth in this Quarterly Report is correct as of any date after the date of this Quarterly Report. You may not reproduce or distribute this Quarterly Report, in whole or in part, and you may not disclose any of the contents of this Quarterly Report or use any information herein for any purpose other than evaluating your investment in, or considering the purchase of, the Notes. You agree to the foregoing by accepting delivery of, or access to, this Quarterly Report. 2

4 TABLE OF CONTENTS 1. GENERAL Introduction Corporate Information Material Recent Developments Senior Management Update Risk Factors UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Introduction Unaudited Condensed Consolidated Statement of Income Unaudited Condensed Consolidated Balance Sheet Unaudited Condensed Consolidated Statement of Cash Flow OPERATING AND FINANCIAL REVIEW Introduction Results of Operations Financial Condition Liquidity and Capital Resources Outlook CERTAIN CALCULATIONS

5 1. GENERAL 1.1 Introduction This Quarterly Report provides an operational and financial review, including condensed consolidated financial information, for the Issuer for the three months and nine months ended 30 September 2014 ( Q and YTD 2014, respectively). 1.2 Corporate Information The Issuer s registered address is Antonie van Leeuwenhoekweg 37, 2408 AK Alphen aan den Rijn, The Netherlands. Hyva is engaged in the development, production, marketing and distribution of hydraulic products and solutions for application in heavy duty equipment used in the mining, infrastructure, construction and environmental services end markets. 1.3 Material Recent Developments As discussed in our previous quarterly report, our hook and skip loader manufacturing activities are being relocated from the Netherlands into our existing crane manufacturing facility in Italy. This relocation is proceeding according to plan and expected to be finalised in the last quarter of There is no material new development since 29 August 2014, the date of our previous material developments update. 1.4 Senior Management Update There are no other significant developments since 29 August 2014, the date of our previous senior management update. 1.5 Risk Factors An investment in our Notes involves significant risks. This Quarterly Report does not include a detailed discussion of these risks. Existing and prospective investors should refer to the risk factors set forth in the Offering Memorandum dated 17 March 2011 relating to the Notes. Prospective investors should consider those risks carefully before making a decision to invest in the Notes. If any of those risks actually materialise, then our business, financial condition and results of operations would suffer. In addition, there may be risks of which we are currently unaware or that we currently regard as immaterial based on the information available to us that later may prove to be material. These risks may adversely affect our business, financial condition and operating results. As a result, you may lose all or part of your original investment in the Notes. 4

6 2. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2.1 Introduction The following summarises the unaudited condensed consolidated financial data of the Issuer, including the unaudited condensed consolidated statement of income, the unaudited condensed consolidated balance sheet and the unaudited condensed consolidated statement of cash flow. 2.2 Unaudited Condensed Consolidated Statement of Income Unaudited condensed consolidated statement of income For the three months and nine months ended 30 September 2014 and 2013 QTD QTD YTD YTD 1 Jul Jul Jan Jan 2013 to to to to 30 Sep Sep 2013 Change 30 Sep Sep 2013 Change USD '000 USD '000 % USD '000 USD '000 % Revenue 141, , % 480, , % Cost of sales (105,576) (98,391) 7.3% (353,035) (326,627) 8.1% Gross profit 36,056 37, % 127, , % Selling, general and administrative costs (23,388) (23,365) 0.1% (73,742) (72,125) 2.2% Other operating expenses (4,892) (5,089) -3.9% (15,040) (15,152) -0.7% One-time restructuring costs - (5,302) % (1,761) (6,989) -74.8% Total operating costs (28,280) (33,756) -16.2% (90,543) (94,266) -3.9% Operating profit 7,776 3, % 36,602 25, % Interest income % 1,847 1, % Interest costs (9,376) (9,230) 1.6% (28,169) (28,011) 0.6% Other finance expense net (1,056) (1,076) -1.8% (1,115) (1,936) -42.4% Net finance costs (9,607) (9,880) -2.8% (27,437) (28,690) -4.4% (Loss)/profit before income tax (1,831) (6,191) -70.4% 9,165 (2,804) % Income tax expense (5,330) (4,714) 13.1% (14,252) (13,659) 4.3% Result for the period (7,161) (10,905) -34.3% (5,087) (16,463) -69.1% Result attributable to: Owners of the parent (7,145) (10,905) -34.5% (5,012) (16,463) -69.6% Non-controlling interests (16) - (75) - (7,161) (10,905) -34.3% (5,087) (16,463) -69.1% Other comprehensive income: Currency translation differences (13,917) 8, % (19,819) 3, % Comprehensive income for the period (21,078) (1,955) 978.2% (24,906) (12,571) 98.1% Comprehensive income attributable to: Owners of the parent (21,062) (1,955) 977.3% (24,831) (12,571) 97.5% Non-controlling interests (16) - (75) - (21,078) (1,955) 978.2% (24,906) (12,571) 98.1% 5

7 2.3 Unaudited Condensed Consolidated Balance Sheet Unaudited condensed consolidated balance sheet As at 30 September 2014 and Sep Sep 2013 USD '000 USD '000 Property, plant and equipment 37,363 42,898 Intangible fixed assets 659, ,631 Deferred income tax assets 10,270 12,449 Financial fixed assets Total non-current assets 707, ,978 Inventories 101,397 99,758 Trade and other receivables 163, ,601 Current income tax receivable 1,164 1,524 Cash and cash equivalents 58,380 66,039 Current assets 324, ,922 Total assets 1,031,622 1,061,900 Equity attributable to the owners of the parent 387, ,308 Non-controlling interest Total equity 387, ,308 Non-current liabilities Borrowings 372, ,511 Deferred income tax liabilities 82,238 90,142 Other non-current liabilities 4,300 4,294 Current liabilities Borrowings 659 2,382 Current income tax payable 3,503 4,690 Trade and other payable 175, ,026 Other current liabilities 5,812 6,547 Total liabilities 644, ,592 Total equity and liabilities 1,031,622 1,061,900 6

8 2.4 Unaudited Condensed Consolidated Statement of Cash Flow Unaudited condensed consolidated statement of cash flow For the three months and nine months ended 30 September 2014 and 2013 QTD QTD YTD YTD 1 Jul Jul Jan Jan 2013 to to to to 30 Sep Sep Sep Sep 2013 USD '000 USD '000 USD '000 USD '000 Cash flows from operating activities (Loss) / profit before income tax (1,831) (6,191) 9,165 (2,804) Adjustments for: - Depreciation and amortisation 6,502 6,762 20,314 20,448 - Change in provisions (1,713) 45 (1,115) Result on disposal of property, plant and equipment (12) (44) 1 (105) - Net interest expense 8,550 8,805 26,321 26,754 - Changes in working capital (3,932) (2,050) (34,417) (9,058) Cash generated from operating activit\ies 7,564 7,328 20,269 35,673 Taxes paid (6,512) (5,041) (16,684) (13,952) Interest paid (15,778) (16,924) (31,814) (34,659) Net cash used in operating activities (14,726) (14,637) (28,229) (12,938) Cash fows from/(used in) investing activities Purchases of property, plant and equipment (1,938) (1,971) (4,033) (6,983) Investments in intangible assets (32) (37) (349) (259) Proceeds from sale of property, plant and equipment , Net cash used in investing activities (1,934) (1,754) (1,204) (6,919) Cash flows used in financing activities Movements in loans and borrowings (308) (635) (690) (1,211) Net cash used in financing activities (308) (635) (690) (1,211) Net decrease in cash and cash equivalents (16,968) (17,026) (30,123) (21,069) Cash and cash equivalents at beginning of the period 79,143 83,956 93,941 89,239 Exchange losses on cash and cash equivalent (3,795) (891) (5,438) (2,132) Cash and cash equivalents at end of the period 58,380 66,039 58,380 66,039 7

9 3. OPERATING AND FINANCIAL REVIEW 3.1 Introduction This section presents an operating and financial review, including historical condensed consolidated financial information, for the Issuer for the three months and the nine months ended 30 September For purposes of this section, the terms we, our and us refer to Hyva. 3.2 Results of Operations Consolidated Results Hyva s consolidated Q revenue of USD million improved by USD 5.8 million or 4.3% compared to the prior year corresponding period ( pcp ). Performance varied by region, with strong improvement noted in India, EMEA and to a lesser extent Other Asia, offset by a continued deceleration in the third quarter in China. YTD 2014 revenue is 7.5% higher than pcp, largely due to strong growth in India and the EMEA region. The Q gross margin level decreased to 25.5% vs the pcp level of 27.6% mainly as a result of a change in regional and product revenue mix, while YTD 2014 gross margin was 26.5% versus the pcp margin of 26.9%. Despite the reduction in consolidated gross margin, we were able to maintain and even slightly improve our gross margins at regional and product level versus pcp, reflecting our continued focus on improving our cost structures. The Q SG&A cost was USD 23.4 million and it remained flat compared to pcp. YTD 2014 SG&A costs increased slightly to USD 73.7 million compared to USD 72.1 million in the pcp (up 2.2%, or USD 1.6 million versus pcp) and were mainly driven by the revenue increase observed during the period. Expressed as a percentage of revenue, SG&A cost in YTD 2014 are 15.4% compared to 16.1% in pcp. Other operating expenses mainly represent the amortization of intangible fixed assets that resulted from the purchase price allocation and fair value adjustments arising in relation to the Acquisition. One-time restructuring costs, amounting to USD 1.7 million for YTD 2014, mainly relate to the costs associated with the relocation of manufacturing activities from the Netherlands into our existing crane manufacturing facility in Italy as mentioned in Section 1.3 above. Adjusted EBITDA amounted to USD 15.0 million or 10.6% of sales for Q versus 13.0% of sales for pcp, largely driven by the change in regional and product revenue mix. Overall, YTD 2014 revenue increased by 7.5% whilst Adjusted EBITDA amounted to USD 59.9 million or 12.5% of sales, a level comparable with pcp. Currency movements during Q had a net positive impact on sales of USD 0.4 million, or 0.3% and USD 0.2 million or 1.6% on EBITDA. For YTD 2014, currency movements had a net adverse impact of USD 4.9 million or 1.0% on sales and USD 1.0 million or 1.8% on EBITDA. This is largely due to the devaluation of Indian Rupee and Brazilian Real. 8

10 The table below sets forth EBITDA (as reported), Pro forma EBITDA and Adjusted EBITDA: EBITDA adjustments For the three months and nine months ended 30 September 2014 and 2013 (Unaudited) QTD QTD YTD YTD 1 Jul Jul Jan Jan 2013 to to to to 30 Sep Sep 2013 Change 30 Sep Sep 2013 Change USD '000 USD '000 % USD '000 USD '000 % EBITDA (as reported) 14,278 10, % 56,915 46, % Transaction related adjustments: Transaction related expenses Pro forma EBITDA 14,278 10, % 56,915 46, % Other exceptional items: Restructuring costs - 5, % 1,761 6, % Various other normalisations 738 1, % 1,267 2, % Adjusted EBITDA 15,017 17, % 59,943 55, % EBITDA (as reported) as % of revenue 10.1% 7.7% 11.9% 10.4% Pro forma EBITDA as % of revenue 10.1% 7.7% 11.9% 10.4% Adjusted EBITDA as % of revenue 10.6% 13.0% 12.5% 12.5% Segment Results The table below sets forth revenue by region on an originating sales entity basis for the Hyva Group: Revenue by region on an originating sales entity For the three months and nine months ended 30 September 2014 and 2013 (Unaudited) QTD QTD YTD YTD 1 Jul Jul Jan Jan 2013 to to to to 30 Sep Sep 2013 Change 30 Sep Sep 2013 Change USD '000 USD '000 % USD '000 USD '000 % China 25,030 36, % 137, , % India 21,310 17, % 70,347 61, % Other Asia 10,911 9, % 28,227 27, % Americas 17,687 17, % 50,406 54, % Europe/Middle East/Africa (EMEA) 66,694 54, % 193, , % Total 141, , % 480, , % As shown in the table above, the varying degrees of movements across each region has impacted the geographic mix of business compared to last year. In Q3 2014, China s contribution to consolidated revenue has decreased to 17.7% from 26.8% in pcp while EMEA s contribution increased to 47.1% in Q from 40.4% in the pcp. 9

11 China China revenue for Q decreased by USD 11.4 million or 31.2% versus pcp (30.2% lower excluding exchange rate movements). For YTD 2014, sales decreased by USD 3.8 million or 2.7% versus pcp (2.8% lower excluding exchange rate movements). Our revenue performance in China mirrors developments in the heavy duty truck and tipper market in China, which started slowing down in Q and has further weakened in Q We believe that we have held our market share during the year and our technology leadership in tipper hydraulics has been further enhanced with the introduction of our new range of hydraulic cylinders ( Alpha ) that offer significant benefits in speed and weight reduction relative to competitive offerings. We also continue to invest in our waste handling equipment business in China and the business has recorded strong growth during YTD 2014, albeit off a small base. Although we expect the market for heavy duty tippers and therefore our hydraulic cylinders to remain subdued during Q4 2014, we continue to believe that the long term prospects for the primary end markets that our products serve remain strong in China. India Sales in India increased by USD 4.3 million or 25.1% versus pcp (20.4% higher excluding exchange rate movements) driven by the continued improvement in industrial and infrastructure activity in India which has increased demand for our hydraulics and tipper products. Overall, YTD 2014 sales in India were USD 70.3 million, 14.1% higher than pcp (21.1% higher excluding exchange rate movements). Other Asia Revenue from Other Asia in Q was 10.8% higher versus pcp (12.3% higher excluding exchange rate movements). For YTD 2014, sales increased by 1.0%, or USD 0.3 million (up 6.2% excluding exchange rate movements). The positive revenue development is a result of a strong improvement in Indonesia, which signals recovery in the mining sector, as well as from an increase in sales to other countries in the region such as South Korea, offset by the continued soft market conditions in Australia and Thailand. Americas Revenue from the Americas in Q was in line with last year (USD 0.1 million or 0.3% lower, 0.2% higher excluding exchange rate movements) driven by a continued soft market for hydraulics offset by good crane sales development in Brazil. For YTD 2014, the Americas revenue was USD 4.6 million or 8.3% lower than YTD 2013 (1.8% lower excluding exchange rate movements). Short term prospects for the Brazilian HDT market remain challenging with latest 2014 GDP growth, a weak short term outlook for the truck industry as a whole and tightening fiscal spending which could further restrict access to subsidized funding (FINAME). EMEA EMEA Q revenue increased by USD 11.9 million or 21.7% versus pcp (21.4% higher excluding exchange rate movements). For YTD 2014, sales increased by USD 32.8 million or 20.4% (17.5% increase excluding exchange rate movements). This was largely driven by the continued recovery observed in Western Europe, Eastern Europe and in the Middle East, reflecting the development of the heavy commercial vehicle market in the region, which has also benefited from the transition to Euro VI emission standards, particularly in the UK. 10

12 3.2.3 Tax, Financing and Other Items Interest costs YTD 2014 Interest costs mainly represent interest and amortisation expenses on the Notes of approximately USD 24.3 million and USD 2.7 million respectively. Other finance expense net Other finance net expense for Q and YTD 2014 mainly represents foreign exchange loss of approximately USD 0.9 million, largely driven by (mostly unrealized) foreign exchange losses in China, partly offset by foreign exchange gains on a USD position in Brazil. Income tax expense Our income tax expense increased by 13.1% to USD 5.3 million in Q compared to USD 4.7 million in Q Currency translation differences Currency translation differences (as included in other comprehensive income) amount to negative USD 13.9 million in Q due to the depreciation of the Euro, Brazilian Real and the Indian Rupee during the three months ended 30 September Financial Condition Working Capital 1 Hyva s net working capital increased by USD 15.0 million to USD 89.6 million as at 30 September 2014 (30 September 2013: USD 74.6 million) mainly as a result of an increase in trade and other receivables (USD 20.2 million) caused by higher sales in India and EMEA, offset by an increase in creditors (USD 6.3 million) mostly in India, EMEA and Americas. 1 Working capital: inventories plus trade and other receivables (excluding interest related receivables) less current liabilities (excluding provisions, income tax payables, interest related payables and current debt items). 11

13 Cash and debt The table below sets forth the debt of Hyva as at 30 September 2014: Debt (consolidated) (Unaudited) As at As at 30 Sep Sep 2013 USD '000 USD '000 Non-current debt Interest bearing loans and borrowings * 375, ,284 Financial lease liabilities 1,127 1,264 Other financial liabilities 1,257 1, , ,404 Current debt Interest bearing loans and borrowings * Financial lease liabilities Bank overdrafts Other financial liabilities ** 5,940 3,540 6,354 4,902 Guarantees Gross debt *** 383, ,450 Cash and cash equivalents (excl. bank overdrafts) (58,380) (66,039) Net debt 325, ,411 Gross leverage (Gross debt / Consolidated EBITDA ****) Net leverage (Net debt / Consolidated EBITDA ****) Notes: *: Total interest bearing loans and borrowings classified as non-current debt as at 30 September 2014 include USD 375 million Notes issued by the Issuer and USD 0.2 million government loans in Italy. The amount in the balance sheet is net of the capitalised financing costs (USD 5.3 million as at 30 September 2014 and USD 8.9 million as at 30 September 2013). **: The USD 5.9 million Other financial liabilities are predominantly specific to customer payment agreements in India (USD 5.7 million as at 30 September 2014 and USD 2.5 million as at 30 September 2013). ***: Gross debt is calculated as per Section 1.01 Indenture dated as at March 24, ****: Consolidated EBITDA is calculated as per Section 1.01 Indenture dated as at March 24, 2011 and shown in Section 4 of this report. Cash and cash equivalents (excl. bank overdraft) totaled USD 58.4 million as at 30 September 2014, decrease from USD 66.0 million as at 30 September Non-current liabilities Non-current liabilities mainly represent the Notes, net of capitalised financing costs (approximately USD million) as well as deferred tax liabilities (approximately USD 82.2 million) which mainly originate from the purchase price allocation (approximately USD 81.7 million). 12

14 3.4 Liquidity and Capital Resources Capital Expenditure Q capex of USD 1.9 million is at a similar level versus pcp. We largely fund our capital expenditure and investments in property, plant and equipment through cash generated from operating activities. We intend to continue to fund our future investments from existing financial resources and cash generated from operations. Net Cash from (used in) Operating Activities Operating activities recorded a net cash outflow of USD 14.7 million due to a positive operating cash flow (USD 7.6 million) being offset by tax payments (USD 6.5 million) and interest payments (USD 15.8 million). Net Cash from (used in) Investing Activities Our net cash used in investing activities Q amounted to USD 1.9 million and is primarily related to normal capital expenditures in the ordinary course of business. Net Cash from (used in) Financing Activities Our net cash used in financing activities created an outflow of USD 0.3 million in Q3 2014, compared to an outflow of USD 0.6 million in Q Available liquidity The Issuer s available liquidity as at 30 September 2014 is USD 88.4 million (USD 58.4 million) of cash and a USD 30 million available credit facility. This provides the business with sufficient cash to meet operating requirements, debt service obligations under the Notes and budgeted capital expenditure and investments. 3.5 Outlook In the context of a mixed macro-economic growth on a global basis, Hyva continues to focus on executing a range of initiatives to ensure we maintain our margins and cash flow while positioning ourselves to drive growth when the trading environment in our main markets further improves. To that end, we are focused on completing the consolidation of our manufacturing footprint in Europe (from five sites to two) as well as driving productivity across all of our production sites globally. We are actively controlling operating costs and even more selective in our investments. Working capital is the object of a specific focus with a view to structurally reduce our inventory levels and minimize overdue receivables. Key revenue growth initiatives include (i) investing in R&D and NPI to develop the next generation of products, (ii) globalizing Hyva s crane and waste handling business, with a particular focus on the emerging markets and (iii) leveraging Hyva s existing distribution network by exploring vertical and horizontal product expansion. 13

15 4. CERTAIN CALCULATIONS This section should be read in conjunction with the section titled Presentation of Financial Information and Use of Non-GAAP Financial Information in this Quarterly Report. In order to calculate Consolidated EBITDA, Consolidated Non-Guarantor EBITDA and Consolidated Interest Expense, this report includes financial information for the Issuer for the twelve month period ended 30 September Hyva Global B.V. (Unaudited) Twelve month period ended 30 Sep 2014 USD '000 Consolidated EBITDA 82,823 Consolidated Non-Guarantor EBITDA 76,761 Consolidated Interest Expense 33,937 Consolidated Non-Guarantor Debt 6,065 The following table below sets forth the reconciliation from Reported EBITDA to Consolidated EBITDA for the Pro forma twelve-month period ended 30 September 2014: Hyva Global B.V. EBITDA calculation (Unaudited) Twelve month period ended 30 Sep 2014 USD '000 Reported EBITDA 76,056 Transaction related expenses - Pro forma EBITDA 76,056 Restructuring costs 2,884 Other adjustments 1,645 Adjusted EBITDA 80,586 Realised FX gains (248) Management fee 1,258 Interest income 1,227 Consolidated EBITDA 82,823 14