INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE FINANCIAL QUARTER ENDED 31 MARCH 2017

Transcription

1 INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE FINANCIAL QUARTER ENDED 31 MARCH 2017 Consolidated statement of financial position Assets ( millions) Notes Non-current assets Goodwill Other intangible assets Property, plant and equipment Non-current financial assets 4 3 Deferred tax assets 7 8 Other non-current assets Total non-current assets Current assets Inventories Trade receivables Other receivables Current financial assets 2 2 Cash and cash equivalents Total current assets Total assets Liabilities and equity En millions d'euros Notes Equity Share capital Share premiums Foreign currency translation reserve (51) (52) Retained earnings and other consolidated reserves (488) (497) Equity attributable to Antalis' shareholders Non-controlling interests 1 1 Total equity Non-current liabilities Provisions Borrowings and financial liabilities Deferred tax liabilities 1 1 Total non-current liabilities Current liabilities Provisions Borrowings and financial liabilities Trade payables Other payables Total current liabilities Total equity and liabilities The accompanying notes are an integral part of the financial statements.

2 Consolidated income statement ( millions) Notes Sales Gross margin Personnel expenses (70) (74) Other selling, general and administrative expenses (61) (65) Current operating income Other operating income 4 Other operating expenses (5) (3) Other operating income and expenses, net 8 (1) (3) Operating income Cost of net debt (6) (6) Other financial income and expenses, net (1) (1) Net financial expenses (7) (7) Income tax expenses 9 (2) (2) Net income 9 2 Attributable to: - Antalis' shareholders 9 2 Earnings per share - Weighted average number of shares outstanding Fully-diluted number of shares Basic earnings per share ( ) - Consolidated earnings/(loss) 0,12 0,03 Diluted earnings per share ( ) - Consolidated earnings/(loss) 0,12 0,03 The accompanying notes are an integral part of the financial statements.

3 Consolidated statement of comprehensive income millions Net income 9 2 Items that be recycled to profit or loss 1 (8) Translation adjustments 1 (8) Items that may not be recycled to profit or loss (5) Actuarial gains or losses related to pension and other post-employment benefit obligations (5) Total other comprehensive income 1 (13) TOTAL COMPREHENSIVE INCOME (LOSS) 10 (11) Of which: - Attributable to Antalis shareholders 10 (11) - Attributable to non-controlling interests Statement of changes in consolidated equity ( millions) Numbers of shares issued Share capital Additional paid-in capital Cumulative translation adjustment Retained earnings and other consolidated reserves Shareholder s' equity Non-controlling interests Equity at 1 January (45) (489) Net income Other comprehensive loss - - (8) (5) (13) (13) Equity at 31 March (53) (492) Net income (loss) Dividends (8) (8) (8) Other comprehensive income (loss) Change in scope of consolidation 1 1 Equity at 31 December (52) (497) Net income Other comprehensive income (loss) Equity at 31 March (51) (488) The accompanying notes are an integral part of the financial statements. Total equity

4 Consolidated statement of net cash flow ( millions) Notes Cash flows from operating activities Operating income Elimination of non-cash and non-operating income and expenses: Depreciation, amortisation and provisions (except on current assets), net 10 (2) 1 Disposal gains and losses 10 (4) Gross operating cash flow Income taxes paid (1) (1) Change in operating working capital 10 (82) (108) Net cash from (used in) operating activities (i) (71) (97) Cash flows from investing activities Expenditure on acquisitions of property, plant and equipment and intangible assets (4) (4) Proceeds from disposals of property, plant and equipment and intangible assets 7 Impact of changes in scope of consolidation 10 (3) Net cash used in investing activities (ii) (4) Cash flows from financing activities Net change in borrowings and debts Net financial expenses (6) (6) Net cash generated from financing activities (iii) Effects of fluctuations in foreign exchange rates (iv) (3) YEAR-ON-YEAR INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (i+ii+iii+iv) (54) (54) Net cash and cash equivalents at start of year Net cash and cash equivalents at end of year YEAR-ON-YEAR INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (54) (54) Breakdown of net cash and cash equivalents at end of year Cash and cash equivalents Short-term bank borrowings and overdrafts (3) (3) Net cash and cash equivalents at end of year The accompanying notes are an integral part of the financial statements.

5 Notes to the condensed interim consolidated financial statements Note 1 - Significant events of the financial quarter and subsequent events a) Antalis International s IPO In February 2017, the Sequana group announced a plan to distribute to their shareholders a minority portion of Antalis International s shares, this dividend in kind resulting in the listing of all Antalis shares in the regulated market of Euronext Paris. The relevant IPO prospectus was filed with the French financial markets authority (AMF) on 19 May Sequana Board of Directors' meeting held immediately after the Annual General Meeting set the date of distribution of about 18% Antalis International shares to Sequana shareholders at 12 June 2017 and the Initial Public Offering effectively occurred on such date. As a result of the approval by this Shareholders Meeting, Antalis International has become a joint stock corporation (société anonyme) with immediate effect. b) Refinancing project Ahead of the upcoming maturity of the main financing facilities of the Group in 2018, and in the context of the aforementioned recent listing of the company, Antalis has decided to take the opportunity of favourable market conditions for preparing a bond issuance, expected to occur in July c) Capital reduction In April 2017, Antalis decided to reduce its share capital through a reduction in the nominal value of shares from 9 to 3. As a result, the share capital went down from 639 million to 213 million. No further events with a potentially material impact on the Group s commercial and financial position other than those described above have occurred since the end of the financial quarter. Note 2 - Summary of significant accounting policies a) Basis of preparation The condensed interim consolidated financial statements for the quarter ended 31 March 2017 were prepared in accordance with IAS 34 Interim Financial Reporting. As these are condensed financial statements, they do not contain all of the information required by IFRS for annual financial statements and must be read in conjunction with the consolidated financial statements for the year ended 31 December 2016, included in the prospectus filed by Antalis with the French financial markets authority (AMF) on 19 May The condensed interim consolidated financial statements for the financial quarter ended 31 March 2017 were prepared using the same accounting principles as those used to prepare the consolidated financial statements for the year ended 31 December 2016, except for the following: the tax expense is calculated using an estimated tax rate for 2017 based on the tax rates that will be effective for the period and the forecast pre-tax earnings of the Group's tax entities. This rate is then applied to the pre-tax earnings of each tax entity for the interim period. pension plans and other defined benefit obligations are prorated based on projected costs for the year, taken from actuarial calculations performed by independent experts at the end of the previous reporting period. For most plans, the net benefit obligations are measured based on the revised fair value of plan assets at 31 March 2017 and on any changes in actuarial assumptions during the period, in particular as a result of changes in market conditions. Only those events significantly impacting plan participants or the terms and conditions of the plans are taken into account in the calculations. b) Standards applied There are no new standards, interpretations and amendments adopted by the European Union at 31 March 2017 and mandatory for reporting periods beginning on or after 1 January The Group has not chosen to early adopt any of the standards or interpretations published in the Official Journal of the European Union as of 31 March 2017, for which early adoption is permitted for accounting periods beginning on or after 1 January The impact on the consolidated financial statements of those new standards, and particularly IFR9 and IFRS15, is currently being analysed. Regarding the application of IFRS 15 which is mandatory for periods beginning on or after 1 January 2018, the Group has reviewed the arrangements introduced by this standard with regard to its current practices. At this stage of its analysis, it has not identified the need for any changes. That said, the agent/principal distinction it introduces requires judgement to be exercised in respect of the distribution business, and the Group has not yet determined definitively that there will be no impact on its revenue recognition.

6 c) Estimates The preparation of financial statements involves the use of estimates and assumptions that affect the reported amounts of certain assets and liabilities and recognised income and expenses. These estimates and assumptions take into account the specific risks associated with the Group's businesses as well as more general risks to which companies operating in an international environment are exposed. In exercising its judgement, the Group refers to past experience and to available information it considers pertinent. Assumptions are revised on a regular basis and estimates adjusted as necessary. Due to the uncertainties inherent in assumptions used in any measurement process, the amounts shown in the Group's financial statements in future accounting periods may differ from those estimated and reported in the current period. Significant assumptions used by the Group to prepare its financial statements for the financial quarter ended 31 March 2017 chiefly concern estimates of provisions (see Note 5). d) Seasonal fluctuations Although the Group's activities are not greatly exposed to fluctuations between the first and the second-halves of the year, working capital requirements in the distribution business do vary considerably from one quarter to another. Note 3 - Changes in the scope of consolidation Acquisitions acquisitions (see below) represent a contribution of 7 million to Q1 sales During the fourth quarter, Antalis acquired a packaging product distributor in Peru and a visual communication consumables company in Norway. The first of these deals involved the acquisition of a 70% interest in the share capital at the outset, while stating the terms and conditions for the subsequent acquisition by the Group of the remaining 30% (these arrangements led to the recognition of a non-material financial liability at 31 December 2016). These deals were supplemented in late December by the acquisition of a distribution business from an Irish paper distribution company. The assets acquired mainly consist of the working capital requirement of these new subsidiaries or business franchises generating full-year revenue of around 24 million. Their impact on the Group s revenue and earnings for the financial year was negligible owing to the short period of the year for which they were controlled. The terms and conditions of these transactions led to the recognition of 4 million in total goodwill. The definitive allocation of the purchase price to the assets and liabilities acquired will be made over the 12-month period starting on the date of acquisition in accordance with IFRS 3 (rev.). The acquisitions of subsidiaries during the period can be summarised as follows by geographical region: ( million) Peru Norway Acquisition date December 2016 December 2016 Percentage ownership 70% 100% Financial year-end 31 December 31 December Acquisition cost of the investments (i) 2 2 Form of payment Cash Cash Non-current assets 1 Working capital requirement 2 1 Net debt (2) Other assets/(liabilities), net (1) Net assets acquired (ii) 1 Net goodwill/(negative goodwill) (i-ii) 1 2

7 Note 4 - Other assets Breakdown by type ( millions) OTHER NON-CURRENT ASSETS Defined benefit pension plans with a net surplus Tax credits and current tax receivables 2 2 TRADE RECEIVABLES Gross amount Provision for impairment in value (20) (20) OTHER RECEIVABLES Tax credits and current tax receivables 7 6 Indirect tax receivables 4 3 Advances to suppliers 3 Other current receivables (1) (1) Receivables in respect of rebates to be granted to paper suppliers as part of the Group s distribution business account for the lion s share of this line item. Note 5 - Provisions Analysis by type of provision Current portion Non-current portion ( millions) Restructuring costs Litigation and environmental contingencies Pensions and other post-employment benefits Other provisions CLOSING BALANCE Movements in provisions over the three months to 31 March 2017 millions Opening balance Additions Reversals (utilised provisions) Reversal (surplus provisions) Change in scope of consolidation Other movements Closing balance Restructuring costs 5 1 (3) 3 Litigation and environmental contingencies Pensions and other postemployment benefits (2) (2) 56 Other provisions 12 (1) 11 TOTAL 81 2 (6) (2) 75 Impact on income statement captions Additions to and reversals of provisions (recurring operating income) Other operating income and expenses, net 1 (2) 1

8 Note 6 - Employee benefits Reconciliation of the net amount recognised with the consolidated statement of financial position millions Provisions for pension and other employee benefit obligations (see note 6) (56) (59) Defined benefit pension plans with a net surplus (see note 5) NET AMOUNT RECOGNISED (39) (42) Key developments in the financial quarter Early 2017, an amendment to the annuitization under the Pensionskasse in Switzerland has resulted in a change to this pension plan within the meaning of IAS 19. This change generated a 2 million gain which was recognised in full in January 2017 under personal expenses, in accordance with section 102 et seq of IAS 19. Note 7 - Borrowings Analysis by maturity millions Less than 1 year 1 to 5 years Over 5 years Total Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other 1 1 At 31 MARCH Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other AT 31 DECEMBER (1) Most of the factoring agreements entered into in 2015 have maturities equal to or greater than that of the syndicated credit facility, the maturity of which was extended to 31 December Despite the long-term nature of the lenders commitment, the factoring liabilities are shown under current liabilities in accordance with the accounting policies applicable to this type of financing. Analysis by interest rate millions Below 3% Between 3 and 4 % Between 4 and 5 % Over 5 % Total Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other 1 1 At 31 MARCH Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other 5 5 AT 31 DECEMBER

9 Analysis by main currencies Other millions EUR GBP USD currencies Total Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other 1 1 At 31 MARCH Short-term bank borrowing and overdrafts 3 3 Other bank borrowings Finance lease obligations Factoring liabilities Other 5 5 AT 31 DECEMBER Breakdown of the consolidated net debt millions Borrowing and debt Cash and cash equivalents (81) (134) CONSOLIDATED NET DEBT Both the bank loans and factoring programmes require Antalis to comply with a number of conditions and covenants, with ratios tested on a regular basis. Under the terms of the main factoring agreement, the two key ratios and the frequency of testing have been aligned with those applicable under the syndicated credit facility: Test date Leverage ratio (1) Interest cover ratio (2) 31 March June September December March June September (1) Consolidated net debt/consolidated EBITDA (2) Consolidated current operating income/consolidated net interest expense Based on the tests carried out in 2017, the Group complied with all the covenants applicable to the different contracts. As mentioned in Note 1, the Group is expecting to enter into a large refinancing process in 2017 which could result in the early termination of the syndicated credi facility.

10 Note 8 - Other operating income and expenses, net millions Other operating income Gains on disposal of tangible assets and property, plant and equipment 4 Sub-total 4 Other operating expenses Net restructuring expenses (4) (3) Other items, net (1) Sub-total (5) (3) TOTAL (1) (3) Note 9 - Income tax millions Current taxes (1) (2) Deferred taxes (1) INCOME TAX BENEFIT/(EXPENSE) (2) (2) millions Operating income (loss) Net financial income (loss) (7) (7) Pre-tax income (loss) from continuing operations 11 4 Standard tax rate in France 34,4% 34,4% Effective tax rate for the Group 18,2% 50,0% Theoretical tax expense (i) (4) (1) Actual tax expense (ii) (2) (2) DIFFERENCE (ii-i) 2 (1) This difference can be analysed as follow : Impact of non-taxation of asset disposals 1 Recognition/(non-recognition) of deferred tax assets (1) (1) Tax saving on unrecognised prior-year tax losses 1 Other items (1) (1) DIFFERENCE 2 (1)

11 Note 10 - Analysis of cash flows millions Depreciation, amortisation and provisions Depreciation and amortisation of property, plant and equipment and intangible assets, net 5 5 Net additions to (reversals of) other provisions (7) (4) NET ADDITIONS TO DEPRECIATION, AMORTISATION and PROVISIONS (2) 1 Disposal (gains) and losses Net impact of disposals of property, plant and equipment and intangible assets (4) DISPOSAL (GAINS) AND LOSSES (4) Change in operating working capital Inventories (8) (14) Trade receivables (13) 1 Trade payables (54) (89) Other receivables (4) 6 Other payables (3) (12) CHANGE IN OPERATING WORKING CAPITAL (82) (108) Net impact of changes in scope of consolidation Acquisition Scandinavia (2) Acquisition Ireland (1) NET IMPACT OF CHANGES IN SCOPE OF CONSOLIDATION (3) (1) Cf. notes 1, 3 et 21. Note 11 - Segment information Segment analysis of the 2017 income statement Main European Rest of the ( million) Geographies Rest of Europe World Total Revenue Gross margin EBITDA Current operating income Operating income/(loss) EBITDA reconciliation for 2017 Q1 Main European Rest of the En millions d'euros Geographies Rest of Europe World Total Current operating income Less depreciation and amortisation Less net charges to provisions (2) (2) EBITDA

12 Segment analysis of the 2016 income statement Main European Rest of the ( million) Geographies Rest of Europe World Total Revenue Gross margin EBITDA Current operating income Operating income EBITDA reconciliation for 2016 Q1 Main European Rest of the En millions d'euros Geographies Rest of Europe World Total Current operating income Less depreciation and amortisation Less net charges to provisions 1 1 EBITDA Revenue by type of product ( million) Paper Packaging products Visual communication Total