Consolidated Results 2017 (Unaudited)

Transcription

1 SAG GEST Soluções Automóvel Globais, SGPS, SA Listed Company Estrada de Alfragide, nº 67, Amadora Registered Share Capital: 169,764,398 euros Registered at the Amadora Registrar of Companies under the single registration and taxpayer no ANNOUNCEMENT Consolidated Results 2017 (Unaudited) Consolidated Turnover in 2017 decreased 2.0% to Eur million (Eur million in 2016) SIVA s total new cars volume (30,171 units) decreased 4.3% in 2017, with a 1.4% decrease (343 units) in the volume relating to the Dealer Networks and Other Channels, and a 15.5% decrease (999 units) in the volume relating to the Rent-a-Car (RAC) business Consolidated EBITDA was Eur 7.7 million, a 57.5% (Eur 10.5 million) decrease when compared to the previous year, basically as a result of (i) deteriorating business conditions and decrease levels of activity, (ii) an increase of approx. Eur 2.8 million (28.4%) in advertising spending and sales campaigns to support the Brands represented by SIVA, as well as (iii) an internal restructuring process which translated, in 2017, in an approx. Eur 1.5 million cost increase Consolidated Net Result was, therefore, Eur 9.8 million negative, a deterioration not only in comparison to 2016, but also to the first part of The 2016 Net Result was a Eur 1.2 million loss Consolidated Net Debt was Eur million at the end of December 2017, Eur 29.7 million more than at the end of 2016, resulting essentially from increased working capital requirements due to the increasingly aggressive business conditions in the sale of new and used cars 1

2 Operating conditions and results were, at the end of 2017, significantly deteriorated by increased cash flow requirements which could not be fully funded by commercial banks, resulting in additional pressure to sell inventory in less advantageous business terms The context of SAG Gest s income statement, within the framework of the significant financial restructuring implemented in 2015, has increased the liquidity risk, to which SAG Gest has responded with the thorough and strict centralized management of its cash flows and permanent communication with the Financial Institutions that have traditionally supported its business The assumptions underlying the above restructuring process which enabled the rebalancing of SAG Gest s consolidated financial structure, were contradicted by the deteriorating business conditions which prevented, particularly at the end of 2017, the verification of the conditions required to enable the presentation of a sustainable Consolidated Income Statement The lack of the capacity to accommodate the temporary impacts associate to the nature of its main business may result in an increased risk affecting the normal development of SAG Gest s business and that of its Affiliates SAG Gest s Board of Directors is developing, together with the Brands represented by SIVA, a plan designed to reposition its business in order to reverse the current situation and to ensure the sustainability of this group of Companies and, consequently, its normal access to the financing sources required for its business activity 2

3 1. OPERATIONAL PERFORMANCE 1.1. Automotive Distribution In 2017, the Passenger Car (PC) market volume increased 7.1% (14,804 vehicles) when compared to 2016, with a total of 222,134 units. This behavior was driven by robust growth in the Rent-a-Car segment where, according to data released by ARAC (the Portuguese Car Rental Association), the number of cars delivered to Rent-a-Car operators was up 25.0% (10,470 vehicles). Volume in the Light Commercial Vehicles market increased 10.4%, to 38,520 units. The total Light Vehicles market was, therefore, up 7.6%, with a total volume of 260,654 units (242,220 in 2016). Volume by the Brands represented by SIVA was 30,171 units, down 4.3% (1,342 vehicles) when compared with 31,513 units in the previous year. This decrease was essentially due to the strategic decision to not meet the strong growth pace of the Rent-a-Car segment, where most sales involve a repurchase commitment. In this channel, the volume of the Brands represented by SIVA in 2017 was down 15.5% (999 units) when compared with The weight of the Rent-a-Car segment in SIVA s volume in 2017 was 18.1%, down from 20.5% in Consequently, SIVA s market share was 11.6% in 2017, a 1.4% decrease when compared to Volkswagen - Passenger Cars, with 16,473 units (a 3.3% decrease from 17,031 units in 2016), recorded a 7.4% market share (8.2% in 2016) in the Light Passenger Vehicles market. The volume change is related to the 10.6% volume decline in the Rent-a-Car segment. Audi Brand volume was 9,614 units, a 1.2% increase when compared with 9,503 units in the previous. In spite of a decrease in volume in the Rent-a-Car segment, the Brand achieved a volume similar to 2016 due to growth in the Dealer Network Channel. Skoda s volume was down 20.8% to 2,280 units (2,879 units in 2016) due to the Brand s product cycle and to the significant 34.3% (260 cars) decline in the Rent-a-Car segment, as well as to the effects of the major restructuring of the Brand s Dealership Network carried out in Volkswagen Commercial Vehicles volume was 1,790 units, down 14.5% in comparison with 2016 (2,094 units). In this context, and with the significant increase in commercial spending to support sales of Brands represented by SIVA, operating cash generation (EBITDA) of the Distribution Area (Eur 9.6 million) was down 52.2% (Eur 10.5 million) when compared with the previous year (Eur 20.1 million). This decline was clearly influenced by the use of wholesale channels in used car sales and by the product cycle of the Brands. The product cycle is expected to generate a reversal of the trend in 2018 with the full year availability of new VW models (Golf, Polo an T-Roc, the latter manufactured in Portugal), the launch of new Audi models (A8, A7, A6, A1, Q3, Q8 and e- Tron) and the effect of Skoda s new products (Kodiaq and Karoq) Automotive Retail The number of new vehicles of the Volkswagen, Audi, Skoda and Volkswagen Commercial Vehicles sold by the Soauto Dealerships (Soauto SA, Loures Automóveis, Rolporto and Rolvia) in 2017 was 4,426 units, down 0.8% when compared with the previous year. In the Used car business, Soauto Dealerships sold 1,947 units, a 3.2% increase when compared with After-Sales (Workshops) business recorded a volume of 183,445 hours sold, increasing 2.0% when compared with

4 Total Turnover decreased 0.4% when compared with 2016 to Eur million (Eur million in 2016), with the Parts business decreasing 3.1%, negatively impacting EBITDA in this Business Area. EBITDA in Automotive Retail was Eur 2.5 million (Eur 3.6 million in 2016), down approx. 31.3% when compared with ECONOMIC AND FINANCIAL RESULTS Consolidated Turnover was Eur million in 2017, a 2.0% decrease when compared with Eur million in the previous financial year. The Consolidated Effective Margin decreased 7.4% when compared with 2016, representing 9.7% of Consolidated Turnover (10.2% in 2016), reflecting deteriorating business conditions in the car market. Operating Expenses increased 12.2% when compared with 2016, mainly due to an increase in advertising and campaigns to support the activities of the Brands represented by SIVA, with a focus on improving brand awareness among Customers, as well as to a streamlining process and human resources strengthening. Consequently, Consolidated EBITDA in 2017 (Eur 7.7 million) decreased 57.5% (Eur 10.5 million) when compared with Eur 18.2 million in Earnings Before Interest and Taxes (EBIT) was Eur 5.3 million, a decrease of 66.7% (approx. Eur 10.7 million) when compared with Eur 16.0 million in Consolidated net financial expenses recorded a marginal increase of Eur 0.6 million (4.1%) when compared to Therefore, Consolidated Net Profit attributable to SAG Gest was a Eur 9.8 million loss, a deterioration when compared with Eur 1.2 million loss in 2016, due to the worsening business conditions. Consolidated Equity was affected by negative results in 2017 (Eur 9.8 million) and was Eur 11.4 million as at 31 December On 31 December 2017, Consolidated Net Debt was Eur million, an increase of Eur 29.7 million (31.1%) when compared with Eur 95.4 million as at 31 December 2016, reflecting seasonal fluctuations in the business, especially in inventory levels. Alfragide, 6 March 2018 José Maria Cabral Vozone Investor Relations 4

5 CONSOLIDATED STATEMENT OF PROFIT AND LOSS (Thousands of Euros) (Unaudited) Consolidated Income Statement (000) 12 months ended 31 December % Chg Sales 609, , % Services Rendered 11,185 10, % Turnover 620, , % 0.0% Contribution Margin 59,922 64, % % of Turnover 9.7% 10.2% Outside Services & Supplies - Commercial Expenses (12,486) (9,728) -28.4% Outside Services & Supplies - Car Expenses (2,552) (2,218) -15.0% Sub Total Variable Expenses (15,038) (11,946) -25.9% Outside Services & Supplies - Non Variable Expenses (14,570) (13,448) -8.3% Payroll Expenses (22,596) (21,132) -6.9% Sub Total Overheads (37,166) (34,580) -7.5% Operating Expenses (52,204) (46,526) -12.2% % of Turnover -8.4% -7.5% EBITDA 7,718 18, % % of Turnover 1.2% 2.9% Depreciation and Amortization (2,359) (2,126) -11.0% Gain/losses in sales assets (10) % Provisions % EBIT 5,349 16, % % of Turnover 0.9% 2.5% Income from Associated Companies - Equity Method % Net Interest (7,766) (7,710) -0.7% Other Financial Expenses (8,305) (7,710) -7.7% Net Financial Income / (Expenses) (16,054) (15,420) -4.1% EBT (10,705) % % of Turnover -1.7% 0.1% Income Tax 1,019 (1,650) % Net Profit (9,686) (1,009) % Non-Controlling Interests (141) (149) 5.4% Net Profit Attributable to SAG Gest's Shareholders (9,827) (1,158) % % of Turnover -1.6% -0.2% 5

6 CONSOLIDATED STATEMENT OF THE FINANCIAL POSITION (Thousands of Euros) (Unaudited) CONSOLIDATED STATEMENT OF THE FINANCIAL POSITION (000) Dec - 17 Dec - 16 Other Fixed Assests 77,425 77,097 Investments in Associates - Equity Method Consolidation () 4 Accounts Receivable - Related Parties 139, ,186 Deferred Tax Assets 6,755 5,661 Non-Current Assets 223, ,947 Inventories 216, ,631 Accounts Receivable 76,649 81,732 Current Income Tax Receivable 7,636 5,634 Taxes Receivable - Other Than Income Taxes 21,626 3,237 Cash and Banks 7,593 11,854 Current Assets 330, ,088 TOTAL ASSETS 554, ,036 Registered Share Capital, Equity Reserves, Non-Controlling Interests 310, ,001 Supplementary Capital Payments 135, ,172 Retained Earnings (424,934) (423,927) Net Profit (9,827) (1,158) TOTAL SHAREHOLDERS EQUITY 11,401 21,087 Bank Loans - Medium and Long Term 44,098 90,600 Deferred Tax Liabilities 3,913 3,062 Non-Current Liabilities 48,011 93,662 Bank Loans - Short Term 88,667 16,738 Accounts Payable 356, ,043 Current Income Tax Payable Taxes Payable - Other Than Income Taxes 48,879 36,480 Non-Current Liabilities 494, ,286 TOTAL LIABILITIES 542, ,948 TOTAL LIABILITIES & SHAREHOLDERS EQUITY 554, ,036 6