2013 FULL YEAR RESULTS

Transcription

1 2013 FULL YEAR RESULTS Yves ROCHE, Chief Executive Officer Ingo SCHAEFER, Chief Financial Officer

2 A European leading recycler A major player in the urban mine valorization in Europe: Recylex Group s sites (in Europe) 3 rd largest lead producer and 2 nd largest lead recycler Lead recycling mainly from automotive and industrial batteries Pioneer and leader in plastic recycling Polypropylene recycling mainly from automotive batteries, production off-cuts, car bumpers, etc. Key position in zinc recycling Zinc recycling from electric arc furnace dust Zinc recycling from zinc scrap Among the worldwide leader in certain special metals production Production of high purity special metals notably for the electronics industry Lead Zinc* Plastics Special Metals Headquarters More than 650 employees in Europe * Recytech in France is 50% owned 2

3 Products and customers at the heart of the circular economy Lead Plastics Recycled lead ingots mainly sold to battery producers Recycled polypropylene mainly sold to the automotive industry Annual production: 140,000 tonnes Annual production: 12,000 tonnes Zinc Special Metals Waelz oxides (semi-finished product): zinc producers High purity metals for telecommunications, electronics, infrared technology, solar energy, etc. Zinc oxides: tires, cosmetics, pharmaceutical, etc. Annual production: 25,000 tonnes 3

4 Breakdown of consolidated sales per activity 2013 consolidated sales (per activity) Consolidated sales (in million) % 438 Lead Zinc Special Metals Polypropylene 4

5 Agenda 1. Market data and key figures by activity Consolidated financial statements Cash flows 4. Legal proceedings 5. Environmental rehabilitations 6. Conclusion and outlook 7. Q&A 5

6 1. Market data and key figures by sector 6

7 Lead: price evolution in price evolution (daily prices in per ton) Annual average (in per ton) +1% 2013 annual average stable vs Very volatile prices in 2013 on a global downward trend 7

8 Lead: 2013 operational performance Operational performance Industrial performance (in tonnes) Sales (in million) -8% -5% -8% 8

9 Lead: business model key parameters MINE BUSINESS MODEL RECYLEX BUSINESS MODEL Concentrates Market Lead production / Primary smelter Recycling Sales Over recovery Smelter By-products profit Premiums Recylex profit Over recovery lead and byproducts & Premiums Mine costs Treatment charges Costs Breakers profit Costs LME Lead price Treatment charges LME Lead price Profit variation linked to lead price hedging LME Lead price Scrap battery price Mines profit 9

10 Lead: business model key parameters main evolutions in 2013 Lead price average (in /t) +1% LME Lead price = Stable compared to 2012 but on a downward trend in 2013 Treatment charges Down vs notably owing to a change in the mix between primary and secondary materials Premiums Up vs By-products (sulfuric acid and silver) Strong decrease in sulfuric acid sales (volumes down and very strong market price decline) Strong decrease in silver sales (silver prices down 28% in 2013) Overrecovery Down due to the decrease in lead production volumes Scrap battery price Price increase, strong demand for materials to be recycled 10

11 Lead: 2013 key financial figures Financial performance IFRS Financial performance after revaluation of stocks in LIFO** (en M ) Sales EBIT (29.2) 3.3 in % of Sales (9.0)% 0.9% (en M ) Sales EBIT (23.4) 5.2 in % of Sales (7.2)% 1.5% EBITDA (22.3) 6.8 EBITDA (17.6) 10.4 in % of Sales (6.9)% 1.9% Gross margin* in % of Sales 6.1% 12.7% in % of Sales (5.4)% 2.9% Gross margin* in % of Sales 7.5% 13.7% * 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 2013 consolidated financial statements. 11

12 Lead: 2013 highlights Weak performance in Lead owing to several factors Increase in scrap batteries prices to record levels ( 8 million in additional procurement costs) Unfavorable materials mix (relative increase in lead concentrates compared with secondary materials) and commercial conditions (overall shortfall of around 8 million) Costs and missing volumes due to : : Scheduled maintenance shutdown of the Nordenham smelter in Germany ( 6.5 million) Definitive closure of FMM SA s smelter in Belgium in 2013 ( 0.7 million) Strong decrease in silver price and sulfuric acid market price (by-products of the Nordenham smelter) Depreciation of silver and sulfuric acid inventories ( 3.2 million) Low decrease of production 140,000 tonnes (vs. 152,000 in 2012, down 8%) Productivity gains since 2 years confirmed 2013 production (with maintenance shutdown) = 2011 production (without maintenance shut down) From 2012 EBIT to 2013 EBIT LIFO* (in M) Negative EBIT and EBITDA Both in IFRS and LIFO 2012 LIFO EBIT* Scrap batteries price Unfavorable evolution Costs and volume increase of the primary/secondary mix reduction due to the maintenance shutdown Non-cash effects (inventories depreciation and valorization effects) 2013 LIFO EBIT* * Valuation method non admitted under IFRS 12

13 Plastics: 2013 operational performance Operational performance Industrial performance (in tonnes) Sales (in million) +19% +15% 13

14 Plastics: 2013 key financial figures Financial performance IFRS (in M) Sales EBIT in % of Sales 5.8% 8.5% EBITDA in % of Sales 8.4% 10.8% Gross margin* in % of Sales 57.1% 62.3% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) 14

15 Plastics: 2013 highlights Continued strong growth Sales 19% increase Volumes up 15% In hard market conditions, C2P is a reference for automotive business partners Still contrasted performances by country C2P-France: volumes up and slight prices increase thanks to higher product quality and new clients C2P GmbH: slight increase in volumes did not totally offset price decrease Positive EBIT and EBITDA 15

16 Zinc: price evolution in price evolution (daily prices in per ton) Annual average (in per ton) -5% Very volatile zinc price during 2013 Another decrease in annual average price 16

17 Zinc: 2013 operational performance Operational performance Industrial performance (in tonnes) Sales (in million) -5% -6% +12% * including 100% Recytech SA 17

18 Zinc: Waelz oxides Business model key parameters RECYLEX BUSINESS MODEL WAELZ OXIDES Electric Arc Furnace RECYCLING steel dust Zinc producer Waste from steel production: Steel dust Recycling Dumping Treatment charges dust Treatment charges paid Costs Sales revenues Classified waste dump LME Zinc price % of zinc recovery Profit LME Zinc price 18

19 Zinc: Waelz oxides Business model key parameters 2013 main evolutions Zinc price average (in /t) -5% LME Zinc price 5% decrease compared to 2012 Treatment charges dust = Stable Treatment charges paid In line with the increase of the zinc concentrates treatment charges 19

20 Zinc: Zinc oxides Business model key parameters 2013 main evolutions Zinc price average (in /t) -5% LME Zinc price 5% decrease compared to 2012 Zinc oxides price In line with the decrease of the zinc price Zinc scrap price Strong demand of zinc scrap 20

21 Zinc: 2013 key financial figures Financial performance IFRS (in M) Sales EBIT in % of Sales 6.7% 10.4% EBITDA in % of Sales 12.8% 15.3% Gross margin* in % of Sales 38.9% 40.0% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) 21

22 Zinc: 2013 highlights Sales resilience (-5%) Zinc prices declined 5% A contrasted evolution between activities within the Zinc segment Zinc oxide (59% of overall zinc sales) Sales up 1% owing to a stronger demand of the automotive and chemical sectors 25,200 tonnes of zinc oxides produced (+12%) Waelz oxides (41% of overall zinc sales) Sales down 12% mainly due to the zinc price decline and to the decrease in volumes produced (because of Harz-Metall GmbH scheduled maintenance shutdown) 168,500 tonnes of Electric Arc Furnace dust recycled (-7%) to produce 69,800 tonnes of Waelz oxides (-6%) Positive EBIT and EBITDA Impacted by the zinc price decline and the scheduled maintenance shutdowns 22

23 Special Metals: 2013 key financial figures Financial performance IFRS (in M) Sales EBIT (2.5) (1.2) in % of Sales NS NS EBITDA (1.8) (0.4) in % of Sales NS NS Gross margin* in % of Sales 39.2% 40.7% * Gross Margin = Total Sales - Purchases used +/- Changes in work in progress and finished goods - Goods transportation (included in external costs) 23

24 Special Metals: 2013 highlights Sales down 14% in 2013 Continued weakened demand in the semiconductors sector Decline in demand in the high-purity arsenic and germanium markets No sign of recovery from the European solar industry Decrease in EBIT and EBITDA 24

25 Consolidated financial statements 25

26 Key figures (IFRS) (in tsd. ) VAR. Sales 438, ,140 (32,920) EBITDA (18,319) 15,961 (34,280) EBIT (30,208) 7,863 38,071 Non recurrent result (2,701) (6,474) (3,773) Financial result (2,952) (5,400) 2,448 Net income (39,626) (6,614) (33,012) Operating cash flow (15,828) 4,472 (20,300) 26

27 Key figures (after revaluation of stocks in LIFO*) (in tsd. ) VAR. EBITDA (13,628) 19,586 (33,214) EBIT (24,471) 9,742 (34,213) Net income (33,889) (5,282) (28,607) Operating cash flow (15,828) 4,472 (20,300) * Valuation method non admitted under IFRS 27

28 From EBITDA to Net Result EBITDA to Net Result 2013 (in tsd.) -13,628-4,691-18,319 c -11,889-2, ,624-3,678-39,627 EBITDA LIFO LIFO->PMP EBITDA IFRS Amortization Depreciation Environmental expenses Other depreciations & Provisions for risks Claw back clause Discounting effects Financial Result Corporate Taxes Net Result 28

29 Key figures (IFRS) (in tsd. ) Dec. 31, 2013 Dec. 31, 2012 VAR. Financial Debt* 8,484 1,892 6,592 Continuation plan (before discounting)* 14,150 17,396 (3,246) Provisions 38,318 41,829 (3,691) Pensions liabilities 33,761 35,277 (1,516) Investments 13,712 9,423 4,290 Working capital** 61,909 81,403 (19,494) Net cash*** 6,921 29,833 (22,912) Equity 46,408 85,782 (39,374) Gearing (net) 208% 89% - * Cf. Slide 32 ** Gross values before depreciation *** After deduction of bank overdrafts 29

30 Cash flows 30

31 Recylex Group 2013 Cash flows 2013 Group Cash Flow (in tsd.) 2013 cash out (by destination) 5,273 29,833 16,458-11,125-6,367-18,319-3,153-2,098-1,612-1,969 6,921 Cash, net 01/01/2013* EBITDA Working Capital var. Loans Investments net Rehabilitation expenses Continuation Plan and legal proceedings** Interests Taxes Other Cash, net 31/12/2013* * Cash net of short term borrowings ** Total amount of the 2013 payments according to the terms of Recylex SA Continuation Plan and Claims launched by former employees of Metaleurop Nord SAS 31

32 Continuation plan & financial debts (in tsd. ) Debts as at December 31, ,716 Payment initial plan 2005 (1,193) Payment of damages to former employees of Metaleurop Nord (1,960) Total payments (3,153) Integrations - Total integrations - Debts as at December 31, 2013 * 13,563 * Before actualization and after elimination of intragroup debt Maturity Cash Flows (in tsd. ) Rescheduled debt before discounting Financial debts including interests w/o factoring > 5 years TOTAL 4,260 4, ,050 14,150 15,331** 1,477 1,415 1, ,554 Total 19,591 6,317 1,415 1, ,050 34,704 ** Including 12.5 million of short term borrowings 32

33 Change in provisions in 2013 Release during the period (in tsd. ) December 31, 2012 Balance Increase during the period Discount to actual value Reclassed amounts Used Not used December 31, 2013 Balance Environmental provisions 30,707 1, (6,301) - 26,528 Litigation 10, (28) (174) 10,579 Restructuring (32) Other risks and charges (6) (12) 334 Total provisions 41,829 2, (6,367) (187) 38,318 33

34 Investments Investments & Amortization (in million) Investments by sector (in million) Investments strengthened in order to improve productivity especially in the Lead and Plastics segments 34

35 4. Legal proceedings 35

36 Overview of the Metaleurop Nord legal proceedings Damages for dismissal without real and serious Initiated in 2005: Approx. 580 claims for 16 M Status : final decisions 68% already paid for 2006/2013, 32%provisioned for /2015 Fomer employees cause Initiated in 2010: Approx. 190 claims for 10 M Status: pending in appeal () 100% provisioned Damages for prejudice of anxiety (abestos) Initiated in 07/2013: Approx. 400 claims for approx. 13 M Status: pending (first instance) Not provisioned Claim for extension of liquidation of Metaleurop Nord SAS (2003) Favorable decision for RX in first instance, in appeal and in Supreme Court Status: final decision favorable to Recylex (2005) Liquidators Claim for repayment of Metaleurop Nord liabilities ( 50 M) (2005) Favorable decision for RX in first instance, in appeal and in Supreme Court Status : final decision of the Supreme Court favorable to Recylex (2013) Claim for liability filed by Recylex SA against the liquidators For personal misconduct committed within the ME Nord redundancies Status: pending (first instance) 36

37 Legal proceedings: 2013 highlights* As part of the claims lodged in 2010 by 192 former Metaleurop Nord employees for dismissal without fair cause (aggregate amount of 9.96 million claimed, provided for in full in Recylex SA s financial statements): On May 10, 2013 and September 10, 2013, the Industry section of the Lens Labor Court ruled that Recylex SA was a co-employer of 137 former non-managerial employees and decided to add damages for dismissal without fair cause totaling around 4.7 million to Recylex SA s liabilities. Recylex SA appealed against these rulings, which are not immediately enforceable. The next hearing of the Douai Appeal Court concerning the case of a former nonmanagerial employee has been scheduled for July 1,. The schedule for the 136 other cases is not yet known. On January 15, 2013, the Management Section of the Lens Labor Court ruled that Recylex SA was a co-employer of 49 non-protected former managerial employees and decided to add damages for dismissal without fair cause totaling around 2.4 million to Recylex SA s liabilities. Recylex SA has decided to appeal against these decisions. In January, 20 of these former managerial employees lodged their first claims in the appeal court for damages for prejudice of anxiety and loss of pension rights amounting to a total of 920,000 (not provided for in Recylex SA s financial statements). The next hearing of the Douai Appeal Court is scheduled for July 1,. Conversely, the Management Section of the Lens Labor Court rejected claims from six protected former managerial employees. Following the procedure for raising a question of jurisdiction lodged by these former protected employees, the Douai Appeal Court confirmed these decisions in rulings on February 21,. * 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). 37

38 Legal proceedings: 2013 highlights* As part of the claims for damages for prejudice of anxiety and disruption to their livelihood lodged in 2013 and by 411 former Metaleurop Nord SAS employees, nine of them claiming additional damages for dismissal without fair cause (aggregate amount claimed now totaling approximately 13 million compared with 11.9 million previously, not provisioned in Recylex SA s financial statements): On November 12, 2013 and December 3, 2013, a date was set on September 16, for 354 claims for damages to be heard by the bureau de jugement (decision-making panel) of the Industry and Management sections of the Lens Labor Court. Claims for damages by four former non-managerial employees are due to be heard on April 1, by the bureau de conciliation (conciliation service) of the Industry section of the Lens Labor Court. In February, the Company received a further 53 claims for damages, with hearings scheduled for April 1, (52 former non-managerial employees) and April 8, (1 manager) before the bureau de conciliation of the Lens Labor Court. Furthermore, Recylex SA, which has never been asked to appear or represented in connection with the administrative procedure to add the Metaleurop Nord SAS plant in Noyelles-Godault to the list of asbestos manufacturing, flocking and insulating plants eligible for allocation of the early retirement allocation for asbestos workers, submitted an application to set aside a judgment adversely affecting its interests to the Douai Administrative Appeal court and an application to the Lille Administrative Court to repeal the interministerial order of November 5, 2013 adding the Metaleurop Nord SAS facility in Noyelles-Godault to the aforementioned list. * 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). 38

39 Legal proceedings: 2013 highlights* In the claim for repayment of the 50 million in Metaleurop Nord SAS liabilities brought by the liquidators of Metaleurop Nord SAS in 2005, the Cour de Cassation dismissed the appeal lodged by the liquidators on November 19, 2013, making definitive the ruling handed by the Douai Appeal Court on September 19, 2012 that upheld the rejection of their action to claim repayment of the liabilities and thereby removing a major source of uncertainty hanging over the Group. On March 19, 2013, Recylex SA commenced proceedings for damages before the Béthune Regional Court against the liquidators of Metaleurop Nord SAS for the loss that the Company suffered on account of the personal fault committed by the liquidators in connection with the dismissals of the former employees of Metaleurop Nord SAS, which led to damages being granted to the latter. On February 5,, the Béthune Regional Court set a date of April 2, for preliminary hearings in the case. * 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). 39

40 5. Environmental rehabilitations

41 Environmental liabilities On-going rehabilitations Under the company s direct management with specialized and well-recognized subcontractors In close relationships with environmental and mining administrations, local representatives and associations Rehabilitation of 28 old mines (none under operation) Legacy from the company s mining past 17 mining claims signed away since 2005 (1 in 2012) 11 mines to be signed away Rehabilitation of old industrial sites (none under operation) Legacy from the company s industrial past 1 site in Rieux (Oise, France) 1 site in L Estaque (Marseille, Provence-Alpes-Côte d'azur, France) 41

42 Rehabilitation of old mines Rehabilitation of 28 old mines 17 mining claims signed away since remaining (of which 8 waiting for French administration s stamp) Recylex owns property of 14 mines out of 28 Future uses, when possible, under review but no value creation to be expected Solar fields, speleology, Semnon In green: rehabilitation works completed and mine claim signed away (17 mines) In blue: rehabilitation works completed, pending signing away (8 mines) In red : ongoing rehabilitation works (3 mines) Puy les vignes Charrier Montmins La Gruvaz La Plagne Villefort Le Piscieux Villemagne St Julien Trèves Chassezac L Argentière Malines L Argentière La Bessée Peyrebrune Anjeau St Salvy La Mole Palouma Labarré La Londe Faucon L Argentière Villeneuve Arrens Les Bormettes Pierrefitte Orle 42

43 L Estaque site rehabilitation Site size: approx. 83 hectares ( 830,000 m²) of which 15 ha to be rehabilitated (possible building lands once rehabilitated) 68 ha of natural land (no rehabilitation needed no construction possible in the future) Landfill #1 Waste excavation and final storage in a dedicated landfill Estimated volume: 230,000 m 3 (capacity: 300,000 m 3 ) Surface: 20,000 m 2 (= 3 football fields) Waste layer thickness: 20 m Landfill #1: currently under filling 43

44 L Estaque site rehabilitation Ground after waste excavation Landfill under filling Clean ground Waste 44

45 6. Conclusion and outlook 45

46 2013 highlights 1. Strong deterioration of operational performances Strong volatility and decrease of metal prices Underachievement in the Lead segment owing to the surge in the prices of scrap batteries to record levels Negative effect of the scheduled maintenance shutdown in the major segments (Lead and Zinc) generating higher costs and reduced volumes 2. Negative net result, in strong decline 3. Strengthened Capex to continue to improve productivity in the major business segments 4. Payment of the 8 th installment of the continuation plan expiring in Definitive rejection of the Metaleurop Nord liquidators claim for repayment of Metaleurop Nord liabilities 6. Deferral obtained of the repayment of several amounts outstanding under the continuation plan, representing 1/3 of the plan s remaining balance 7. Search for financing for 16 million its projected cash requirements during and 2015 Recylex aims to obtain firm offers by June 30, at the latest Search for additional financing or specialized partnerships, dedicated specifically to L Estaque 46

47 Outlook for Lead Temporary decline in scrap batteries volumes due to the unfavorable mild winter Medium term favorable trend for lead price and on ingots premium But strong volatility priorities: Plastics Continue investments to improve industrial performance Project in Germany currently at the feasibility study stage to valorize certain by-products (currently sold) Current ramping up phase of the new extrusion line of C2P France priorities: Improve industrial efficiency Continue to develop customer portfolio Zinc Medium term favorable trend for zinc price Zinc oxides: Waelz oxides: priority: pursue commercial actions to develop procurements sourcing priority: continue to improve industrial performance Special Metals Recovery main drivers: priority: Performance of the semiconductors sector, especially in south-east Asia and in Japan Direction of the euro/yen exchange rate Develop commercial network Develop secondary feeds share 47

48 7. Q&A 48