Results for fiscal year 2022/2023
Results for fiscal year
2022/2023
After a transformative 2022/2023,
Derichebourg is confident for the 2023/2024 fiscal
year
The Board meeting of December 6, 2023, chaired
by Mr. Daniel Derichebourg, approved the parent company and
consolidated financial statements for the year ended September 30,
2023. During this meeting, the Chairman of the Board of Directors
highlighted the resilience of the Derichebourg Group’s results
within a more challenging economic environment than the previous
two years, and welcomed the CAPEX plan underway to create new
value-added niches for the Group. He also highlighted the value
creation potential for the Group of the 48.31% stake in Elior
Group, whose results are improving. The Board of Directors will
propose to the General Meeting of January 30, 2024 the payment of a
dividend payment of €0.16 per share.
The figures in this press release are in
accordance with the IFRS 5 classification of the Multiservices
business as of September 30, 2023 (comparative balance sheet and
income statement) and the new division of operating segments into
Recycling and Services to Municipalities. Finally, it should be
noted that the Ecore Group acquired on December 17, 2021 was
consolidated for 12 months this fiscal year and 9.5 months last
fiscal year.
Consolidated revenue
Full-year consolidated revenue was €3.6 billion,
down 16.7% year on year, mainly due to the revenue decline in the
Recycling division (down 17.8%), partly offset by a 10.9% increase
in Services to Municipalities revenue.
(in thousands of metric tons) |
FY 2022/2023 |
FY 2021/2022 |
Change |
Ferrous metals |
4,686.6 |
4,972.7 |
(5.8%) |
Non-ferrous metals |
770.4 |
812.5 |
(5.2%) |
Total volumes |
5,457.0 |
5,785.2 |
(5.7%) |
(in millions of euros) |
FY 2022/2023 |
FY 2021/2022 (1) |
Change |
Ferrous metals |
1,646.2 |
2,114.9 |
(22.2%) |
Non-ferrous metals |
1,605.1 |
1,877.3 |
(14.5%) |
Services |
177.0 |
179.6 |
(1.4%) |
Recycling revenue |
3,428.3 |
4,171.7 |
(17.8%) |
Services to Municipalities revenue |
183.0 |
165.1 |
10.9% |
Holding company revenue |
10.0 |
11.1 |
(10.4%) |
Total Group |
3,621.3 |
4,348.0 |
(16.7%) |
(1) : Restated for the
reclassification of companies from Business Services to “Income
from discontinued activities” following their transfer to Elior
Group.
Recycling
From May/June 2022 onwards, economic
expectations deteriorated in Europe, driven by rising energy costs
as a result of reduced supplies of fossil fuels from Russia
following the invasion of Ukraine. The rise in gas prices led to a
sharp increase in spot and forward electricity prices, due to the
European mechanism for setting electricity prices.
The Group’s ferrous scrap metal customers, who
are electro-intensive, adjusted their production rates downwards
from summer 2022, so as not to be overly penalized by these
historically high electricity costs. Spot prices only returned to
sustainable levels in spring 2023.
Rising energy and food prices triggered an
inflationary cycle. The policy pursued by central banks to combat
inflation, which was spreading throughout the economy, resulted in
a historic rise in interest rates (up 400 bps in 18 months in
Europe), provoking the desired effect, namely a slowdown in
economic activity. This slowdown came early for the end sectors to
which the Group is exposed:
- the automotive
sector for ferrous scrap metal supplies and aluminum ingot
sales;
- the long steel
sector for construction and infrastructure;
- the general
economy for non-ferrous metals.
Ferrous scrap metal volumes were down 5.8%. The
decline in the underlying business was around 11.5%, in line with
that of steel production in the major markets served by the Group.
Against this backdrop, the price of ferrous scrap metal fell versus
the previous year, a period in which it reached record highs. The
average price of ferrous scrap metal sold was down €75/t (around
17%) compared to last year.
Volumes of non-ferrous metals sold were down
5.2%. The downward trend in the economic environment mentioned in
the previous paragraph explains this decrease, which is also around
9% after restatement for changes in consolidation scope.
The price of all metals processed by the Group
fell sharply compared to last year, by around €225/t or 10%.
Services to Municipalities
Revenue rose 10.9% driven by the commencement of
several contracts and the full-year impact of contracts commenced
last year, including:
- Waste collection
contracts for Paris districts, renewed under new economic terms in
September 2022;
- the management
contract for the recently commissioned sorting center in
Angers;
- various other
waste collection contracts (Nantes, Guérande, etc.).
Recurring EBITDA1
Recurring EBITDA for the fiscal year amounted to
€334.8 million, down by 27.1% compared to last year, mainly due to
falling volumes and unit margins and increasing costs in the
Recycling business (electricity from January 2023 in
particular).
Recurring operating profit
(loss)2
After taking into account €151.3 million in
depreciation over the fiscal year, recurring operating profit
amounted to €184.9 million, down 43.6% year on year.
Operating profit (loss)
Non-recurring items for the fiscal year
include:
- the net capital
gain realized on the sale of eight recycling centers to the Riva
Group in fulfillment of the commitments made by Derichebourg
Environnement to the European Commission to obtain authorization to
acquire the Ecore Group (€12.6 million).
- a capital gain
generated in April 2023 on the transfer of Derichebourg
Multiservices to Elior Group, net of disposal costs of €50.7
million.
- the financial
consequences of a ruling by the French Supreme Court against the
Group in a dispute between Veolia and various subsidiaries of the
Services to Municipalities business following the takeover of staff
assigned to waste collection contracts in 2014 (€3.7 million).
Allowing for these items, which had an overall
positive net impact of €59.8 million, operating profit amounted to
€244.7 million, down 23.5% compared to last year.
Profit (loss) before tax
After €29.6 million in financial expenses (up €9
million due to the increase in interest rates) and net other
financial expenses of €1.6 million, Group profit before tax came to
€213.5 million, down 30.0% year on year.
Income from associates
Income from associates (€37.7 million loss)
includes a €39.4 million loss generated by Elior Group for the
year. In the first half, the share of income was 24.36%. For the
second half, it was 48.3%, taking into account the securities-based
remuneration for the transfer of the Multiservices division. This
€39.4 million expense corresponds to €35.1 million in costs
classified as non-recurring by Elior Group.
Net profit (loss) from continuing
operations
After taking into account a corporate income tax
expense of €44.0 million, entailing an effective tax rate of 27.5%
on profit before tax restated for the capital gain on the transfer
of Derichebourg Multiservices to Elior Group, and income from
associates, net profit from continuing operations totaled €131.8
million, down 40% year on year.
Income net of tax from discontinued
activities
First-half 2022/2023 income net of tax from the
Multiservices business was €5.6 million, it came to €19.2 million
for the full 2021/2022 fiscal year.
Consolidated net profit
(loss)
Consolidated net profit for the 2022/2023 fiscal
year totaled €137.4 million, down 42.5% year on year. The portion
attributable to Derichebourg SA shareholders was €136.9
million.
Update on the cyberattack of November
10, 2023
Following the cyberattack on November 10, 2023,
the Group’s IT activities are gradually being restored. Its
operational activities have not been interrupted, although they
have been slowed down.
Outlook
In the medium term, the Group is convinced of
the role and future of recycled raw materials due to the benefits
they provide in terms of greenhouse gas emissions and energy
consumption compared to primary metal production. This confidence
is corroborated by the numerous projects expected to materialize in
Europe over the coming years for the construction of electric steel
mills that can consume ferrous scrap metal. Due to be commissioned
between 2027 and 2030, these projects will generate additional
demand for several million metric tons.
The Group is optimistic for the 2023/2024 fiscal
year for the following reasons:
- The first
few months of the year were in line with the last few months of the
previous year: the Group seems to have reached a plateau in terms
of volumes processed, which are now comparable with the same months
of the previous year, with limited fluctuation.
- Despite
sluggish economic growth, recent increases in ferrous scrap metal
prices, albeit limited, reflect a shortage of collected materials
in relation to steel mill requirements, particularly for export
markets.
- During
the 2023/2024 fiscal year, several production facilities invested
in during the 2022/2023 fiscal year will come on stream, helping to
boost the Group’s added value.
- From
January 2024, the Group will benefit from new electricity prices in
France, which will translate into full-year savings of around €15
million, at equivalent volumes.
- In
Services to Municipalities, revenue is expected to rise slightly,
as is profitability measured in terms of EBITDA.
-
Derichebourg will also benefit from Elior Group’s improved
results.
Against this backdrop, the Group has set itself
the target of generating recurring EBITDA in excess of €350 million
for the 2023/2024 fiscal year, with tangible investments
representing less than 50% of recurring EBITDA.
Annex 1: INCOME STATEMENT
(in millions of euros) |
FY 2022/2023 |
FY 2021/2022 1 |
Change |
Revenue |
3,621.3 |
4,348.0 |
(16.7%) |
Recurring EBITDAi |
334.8 |
459.3 |
(27.1%) |
|
315.8 |
445.8 |
(29.2%) |
- Services to Municipalities
|
30.5 |
25.2 |
20.7% |
Recurring operating profit (loss) |
184.9 |
328.0 |
(43.6%) |
|
184.9 |
332.1 |
(44.3%) |
- Services to Municipalities
|
13.9 |
10.4 |
33.9% |
Net non-recurring items |
59.8 |
(8.1) |
|
Operating profit (loss) |
244.7 |
319.9 |
(23.5%) |
Net financial expenses |
(29.6) |
(20.2) |
|
Other financial items |
(1.6) |
5.5 |
|
Profit (loss) before tax |
213.5 |
305.1 |
(30.0%) |
Income tax |
(44.0) |
(83.3) |
|
Income from associates |
(37.7) |
(2.1) |
|
Income from discontinued or held-for-sale activities |
5.6 |
19.2 |
|
Net profit (loss) attributable to non-controlling interests |
(0.5) |
(1.4) |
|
Net profit attributable to shareholders |
136.9 |
237.6 |
(42.3%) |
1 Restated for the reclassification of companies from Business
Services to “Income from discontinued activities” following their
transfer to Elior Group.
Annex 2: BALANCE SHEET
Assets |
|
|
|
(in millions of euros) |
9/30/2023 |
9/30/2022 |
Change |
Goodwill |
276.1 |
473.8 |
|
Intangible assets |
2.0 |
5.3 |
|
Property, plant and equipment |
838.5 |
766.3 |
|
Right-of-use assets |
274.5 |
259.0 |
|
Financial assets |
5.0 |
10.7 |
|
Interests in associates and joint ventures |
414.8 |
208.0 |
|
Deferred taxes |
23.2 |
32.0 |
|
Other assets |
0.0 |
0.5 |
|
Total non-current assets |
1,834.2 |
1,755.6 |
4.5% |
Inventories |
158.3 |
185.1 |
|
Trade receivables |
305.8 |
462.2 |
|
Tax receivables |
7.4 |
6.7 |
|
Other assets |
105.7 |
86.9 |
|
Financial assets |
11.4 |
15.5 |
|
Cash and cash equivalents |
161.1 |
323.2 |
|
Financial instruments |
1.5 |
3.0 |
|
Total current assets |
751.1 |
1,082.7 |
(30.6%) |
Total
non-current assets and asset groups held for sale |
- |
40.6 |
|
Total assets |
2,585.3 |
2,878.9 |
(10.3%) |
Liabilities |
|
|
|
(in millions of euros) |
9/30/2023 |
9/30/2022 |
Change |
Group shareholders’ equity |
990.4 |
918.8 |
|
Non-controlling interests |
2.4 |
5.0 |
|
Total shareholders’ equity |
992.8 |
923.8 |
7.5% |
Loans and financial debts |
773.6 |
807.9 |
|
Provision for pensions and similar benefits |
28.2 |
43.2 |
|
Other provisions |
31.8 |
34.8 |
|
Deferred taxes |
33.4 |
32.7 |
|
Other liabilities |
4.2 |
5.0 |
|
Total non-current liabilities |
871.2 |
923.6 |
(5.7%) |
Loans and financial debts |
160.2 |
168.7 |
|
Provisions |
14.3 |
16.3 |
|
Trade payables |
390.0 |
503.0 |
|
Tax payables |
9.7 |
6.2 |
|
Other liabilities |
144.9 |
318.6 |
|
Financial instruments |
2.2 |
2.3 |
|
Total current liabilities |
721.3 |
1,015.1 |
(22.5%) |
Total
liabilities related to a group of assets held for
sale |
|
16.4 |
|
Total equity & liabilities |
2,585.3 |
2,878.9 |
(0.7%) |
Annex 3: CHANGE IN NET FINANCIAL DEBT
FROM September 30, 2022 TO September 30, 2023
Net
financial debt at September 30, 2022 |
653.4 |
Recurring
EBITDA |
(334.8) |
Non-recurring
costs |
9.2 |
Change in
working capital requirements |
61.5 |
Net financial
expenses |
29.6 |
Corporate
income taxes |
44.6 |
Capital
expenditure |
260.5 |
New rights of
use from operating leases |
25.7 |
Asset
disposals |
(37.9) |
Dividends |
51.0 |
Acquisitions |
7.1 |
Other (incl.
IFRS 5 impact) |
2.9 |
Net financial debt at September 30, 2023 |
772.7 |
1 Recurring EBITDA = Recurring operating profit + net
depreciation and amortization on tangible and intangible assets and
right-of-use assets2 Recurring operating profit (loss): operating
profit (loss) +/- non-recurring items
- Results for fiscal year 2022-2023
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