• Strong revenue growth in the first half of 2022 of +33.8%
  • Improvement in recurring EBITDA of €16.1 million in H1 2022 despite inflation pressure and global adverse economic situation
  • 2022 outlook confirmed, including increased trading activity and significant improvement in recurring EBITDA
  • Latecoèere is on track to deliver on its M&A strategy: Post integration of Malaga Aerospace, Defence & Electronics Systems SA (MADES) as of May 2022, target is to close the acquisitions of Figeac Aero’s Hermosillo industrial site (Mexico) and Avcorp Industries Inc. during Q4’2022.

Regulatory News:

Latecoere, a tier 1 partner to major international aircraft manufacturers, today announced that the Board of Directors with Chairman Pierre Gadonneix approved Latecoere’s financial statements for the six-month period ended June 30, 2022, on September 19, 2022.

Thierry Mootz, Group Chief Executive Officer, stated: “We are on track to deliver our targets for 2022. The half year results reflect the increased level of production in the aeronautical sector and the changes implemented by management to optimize the group footprint and operating cost base, resulting in an improvement in recurring EBITDA. We are starting to see the result of our cost reduction programs, the optimization of the group’s footprint as well as our commercial efforts, supported by an industry backdrop that is experiencing a recovery in demand.”

1st Half Year 2022 Results

(€ million)

Jun 30, 2022

 

Jun 30, 2021 ³

Revenue

242,3

 

181,1

Reported growth

33,8%

 

-21,9%

On like-for-like and constant exchange rate basis1

18,8%

 

-31,7%

Recurring EBITDA2

(6,9)

 

(23,0)

Recurring EBITDA margin on revenue

-2,8%

 

-12,7%

Recurring operating income

(22,7)

 

(36,5)

Recurring EBIT margin on revenue

-9,4%

 

-20,2%

Non recurring items

0,3

 

(2,8)

Other non recurring items

0,3

 

(2,8)

Operating income

(22,4)

 

(39,3)

Net Cost of debt

(3,3)

 

(1,4)

Other financial income/(expense)

1,2

 

(14,2)

Financial result

(2,1)

 

(15,6)

Income tax

(2,8)

 

(1,7)

Net result

(27,3)

 

(56,6)

Operating free cash flows

(75,5)

 

(16,7)

Latecoere's half-year financial results for 2022 reflect the increased level of production in the aeronautical sector as a whole. Revenues amounted to €242.3 million, up by €61.2 million or +33.8%. At constant exchange rates and scope, the increase was +18.8%. The increase in revenues benefited from higher production rates, notably for the A320 and Embraer programs, albeit the long-haul market segment continues to be challenging and impacted by the B787 production halt that ended in August 2022.

The Group also benefited over the period from the contribution of the activities of the new acquisitions, with a perimeter variance effect of €19.0 million, and a favorable currency effect of €14.1 million.

The Group reported a recurring EBITDA for the first half of 2022 of €(6.9) million, a demonstrable improvement of €16.1 million over the first half of 2021. This improvement was mainly driven by a recovery in margins in both business lines, in line with the recovery in production rates, and in addition by a favorable currency effect of €5.1 million and the impact of acquisitions €(0,7) million.

Latecoere's net financial income amounted to €(2.1) million in the first half of 2022, compared with €(15.6) million in the first half of 2021. The previous period had been impacted by a one-off effect related to the amortization of the shareholder loan in the amount of €(16.4) million following its early repayment.

The Group's net income for the first half of 2022 amounted to €(27.3) million, compared with €(56.6) million for the previous period.

Free cash flow from operations for the period amounted to €(75.5) million, which was mainly impacted by an increased working capital requirement of €(38.0) million in connection with the recovery in activity, and by the acquisition of MADES for an amount of €(19.0) million.

At June 30, 2022, net debt amounted to €147.9 million, an increase of €83.0 million compared to December 31, 2021, mainly due to the €80.6 million reduction of the cash position. The cash position at June 30, 2022 was €197.0 million.

The hedging portfolio amounted to $570 million at June 30, 2022 at an average EUR/USD rate of 1.16. Since June 30, 2022, the Group has continued to put in place hedges for 2024, enabling it to improve the average realized hedging rate.

Aerostructures

Revenues for Latecoere's Aerostructures Division rose by +22.3% at constant exchange rates and scope of consolidation, compared to €82.8 million for the first half of 2021. The segment's activity benefited from significant overall recovery in production rates, notably on the A320 and Embraer programs, despite ongoing production challenges of the Boeing 787 program, following the temporary halt in production in July 2021. Boeing has resumed 787 deliveries in August 2022, and Latecoere expect the Boeing 787 program will gradually resume production in the second half of 2022.

The division's recurring EBITDA amounted to €(2.4) million, an improvement of €11.1 million, benefiting in particular from the upturn in activity and the improvement in the hedged rate for the period.

Aerostructures (€ million)

30/06/2022

 

30/06/2021*

Consolidated revenue

114,9

 

82,8

On like-for-like and constant exchange rate basis

22,3%

 

-36,5%

Inter-segment revenue

11,6

 

10,2

Revenue

126,5

 

93,1

Recurring EBITDA

(2,4)

 

(13,5)

Recurring EBITDA margin on revenue

-1,9%

 

-14,5%

Recurring operating income

(11,2)

 

(21,0)

Recurring EBIT margin on revenue

-8,9%

 

-22,6%

* Adjusted data. See Note 4 to the Condensed Consolidated Financial Statements

Interconnection Systems

Revenues of €127.4 million were up +15.4% at constant exchange rates and scope of consolidation compared with €98.3 million in the first half of 2021. This growth is notably driven by the increase in deliveries from the A320 program.

Recurring EBITDA for the Interconnection Systems division reached €(4.5) million, up by +€4.0 million compared to the previous period, benefiting from the improving production dynamics for the A320 and A350 programs during the period.

Systèmes d'interconnexion (€ million)

30/06/2022

 

30/06/2021*

Consolidated revenue

127,4

 

98,3

On like-for-like and constant exchange rate basis

15,4%

 

-26,3%

Inter-segment revenue

0,5

 

0,5

Revenue

127,9

 

98,8

Recurring EBITDA

(4,5)

 

(9,5)

Recurring EBITDA margin on revenue

-3,5%

 

-9,6%

Recurring operating income

(11,4)

 

(15,6)

Recurring EBIT margin on revenue

-8,9%

 

-15,7%

* Adjusted data. See Note 4 to the Condensed Consolidated Financial Statements

Confirmation of 2022 outlook

The Group confirms its guidance for the fiscal year 2022 in terms of recurring EBITDA and free cash flow from operations, namely:

• Revenue growth in excess of +20% on a reported basis and organic growth (at constant exchange rates and scope of consolidation) at the high end of the range of 15 to 19%;

• Significant improvement in recurring EBITDA, derived from ongoing cost reduction arising from Latecoere’s footprint optimization strategy and the ongoing recovery within the commercial aerospace sector, offset by inflationary pressure impacting 2022 and beyond. We expect EBITDA close to breakeven but still negative in 2022; and

• Operating free cash flow will be impacted by the remaining one off costs of Latecoere’s restructuring plans, the increase in working capital due to revenue growth and key investments to strengthen Latecoere's competitive position, including M&A.

Post-closing events

None to report

_________________________________________________________________________________

About Latecoere

As a "Tier 1" international partner of the world's major aircraft manufacturers (Airbus, Boeing, Bombardier, Dassault, Embraer and Mitsubishi Aircraft), Latecoere is active in all segments of the aeronautics industry (commercial, regional, business and military aircraft), in two areas of activity:

  • Aerostructures (46% of turnover): fuselage sections and doors,
  • Interconnection Systems (54% of turnover): wiring, electrical furniture and on-board equipment.

As of December 31, 2021, the Group employed 4,764 people in 14 different countries. Latecoere, a French limited company capitalised at €133,912,589.25 divided into 535,650,357 shares with a par value of €0.25, is listed on Euronext Paris - Compartment B, ISIN Codes: FR0000032278 - Reuters: LAEP.PA - Bloomberg: LAT.FP.

1 Growth at constant exchange rates and scope of consolidation: Organic growth is obtained by neutralizing the effect of the EUR/USD exchange rate (use of a constant exchange rate for the periods concerned) and by applying a constant scope of consolidation (neutralization of the impact of acquisitions/disposals).

2 Recurring EBITDA corresponds to current operating income before depreciation, amortization and impairment of current tangible and intangible assets.

3 Adjusted data. See Note 4 to the Condensed Consolidated Financial Statements. In 2021, the Group presented, in parallel with the IFRS consolidated financial statements, an adjusted income statement (of a strictly non-accounting nature) mainly due to the significant volume of transactions that did not qualify as hedge accounting and which did not allow the Group to recognize the foreign exchange gains and losses arising from these instruments at the same level as the underlying asset concerned. As the use of instruments not qualifying for hedge accounting has become immaterial, the Group has concluded to no longer present adjusted financial statements from January 1, 2022. However, in order to ensure comparability of information, the Group presents adjusted data as of June 30, 2021 in its business report. The reconciliation table between the 2021 adjusted data and the consolidated data is available in Note 4 of the notes to the Group's condensed consolidated financial statements.

Appendix – Table of content

Half-Year Consolidated financial statements (IFRS)

Consolidated Income statement

('000 EURO) - 6 monts June 30, 2022 June 30, 2021   Revenue

242 303

178 476

Other operating revenue

782

460

Change in inventory: work-in-progress & finished goods

7 100

-7 997

Raw material, Other Purchases & external charges

-168 108

-118 519

Personnel expenses

-97 622

-78 758

Taxes

-2 777

-2 431

Amortization

-15 797

-13 554

Net operating provisions charge

2 521

-3 609

Net depreciation of current assets

2 261

819

Other operating income

8 014

6 308

Other operating expenses

-1 355

-543

RECURRING OPERATING INCOME

-22 678

-39 348

  Other non-recurring operating income and expenses

292

-2 753

OPERATING INCOME

-22 386

-42 101

  Net Cost of debt

-3 328

-1 428

Foreign Exchange gains/losses

2 580

5 730

Change in fair value of financial derivative instruments

89

2 784

Other financial incomes and expenses

-1 457

-16 903

FINANCIAL RESULT

-2 116

-9 816

Income tax

-2 829

-1 700

NET RESULT FOR THE PERIOD

-27 331

-53 617

• Of which, Owners of the parent

-27 331

-53 617

• Of which, Non-controlling interests

0

0

Hal-Year Consolidated Balance sheet

('000 EURO)   June 30, 2022   Dec 31, 2021 Goodwill  

28 584

 

16 431

Intangible assets  

65 847

 

67 541

Tangible assets  

153 476

 

155 433

Other financial assets  

5 268

 

5 105

Deferred tax assets  

766

 

913

Financial derivative instruments  

292

 

4 299

Other non-current assets  

1 417

 

775

TOTAL NON-CURRENT ASSETS  

255 650

 

250 497

      Inventories  

156 756

 

124 298

Accounts receivable  

127 432

 

85 771

Tax receivable  

12 131

 

9 829

Financial derivative instruments  

0

 

2 574

Other current assets  

2 913

 

1 613

Cash & Cash Equivalents  

197 030

 

277 659

TOTAL CURRENT ASSETS  

496 262

 

501 746

            TOTAL ASSETS  

751 912

 

752 243

            LIABILITIES & EQUITY     ('000 EURO)   June 30, 2022   Dec 31, 2021 Share capital  

133 913

 

132 746

Share premium  

327 265

 

326 064

Treasury stock  

-481

 

-477

Other reserves  

-301 384

 

-196 695

Derivatives future cash flow hedges  

-31 420

 

323

Group net result  

-27 331

 

-110 975

EQUITY ATTRIBUTABLE TO PARENT OWNERS  

100 562

 

150 986

NON-CONTROLLING INTERESTS  

0

 

0

TOTAL EQUITY  

100 562

 

150 986

      Loans and bank borrowings  

320 774

 

325 453

Refundable Advances  

21 273

 

20 886

Employee benefits  

12 549

 

16 060

Non-current provisions  

26 779

 

25 281

Deferred tax liabilities  

2 599

 

3 012

Financial derivative instruments  

15 416

 

4 568

Other non-current liabilities  

10 259

 

6 297

TOTAL NON-CURRENT LIABILITIES  

409 648

 

401 557

      Loans and bank borrowings (less than 1 year)  

24 165

 

17 353

Refundable Advances  

2 254

 

2 966

Current provisions  

7 723

 

15 046

Accounts payable  

152 730

 

122 729

Income tax liabilities  

2 963

 

1 811

Contracts liabilities  

31 261

 

33 700

Other current liabilities  

4 618

 

4 262

Financial derivative instruments  

15 988

 

1 832

TOTAL CURRENT LIABILITIES  

241 702

 

199 700

            TOTAL LIABILITIES  

651 350

 

601 257

      TOTAL EQUITY & LIABILITIES  

751 912

 

752 243

Half-Year Consolidated cash flow statement

('000 EURO)   June 30, 2022   June 30, 2021       30/06/2022 Net result for the period  

-27 331

-53 617

        Adjustments related to non-cash activities  :       Depreciation and provisions   

10 062

15 571

Fair value gains/losses  

-89

-2 784

Net (gains)/losses on disposal of assets (**)  

-10 619

290

Other non-cash items  

1 633

16 528

CASH FLOWS AFTER COST OF DEBT AND INCOME TAXES  

-26 344

-24 011

        Income taxes  

2 829

1 700

Net Cost of debt  

2 098

1 435

CASH FLOWS BEFORE COST OF DEBT AND INCOME TAXES  

-21 417

-20 876

        Changes in inventories net of provisions  

-15 993

10 999

Changes in client and other receivables net of provisions   

-36 267

-7 585

Changes in suppliers and other payables  

14 317

7 671

Income tax paid  

-1 069

-3 095

CASH FLOWS FROM OPERATING ACTIVITIES  

-60 429

-12 887

        Effect of changes in group structure (*)  

-18 965

3 973

Purchase of tangible and intangible assets (including changes in payables to fixed asset suppliers)  

-8 215

-10 449

Purchase of financial assets  

0

0

Increase (decrease) in loans and advances made  

60

-504

Proceeds from sale of tangible and intangible assets (**)  

11 000

92

Dividends received  

0

0

CASH FLOWS FROM INVESTING ACTIVITIES  

-16 120

-6 888

        Proceeds from issue of shares  

2 367

0

Purchase or disposal of treasury shares  

-4

-4

Proceeds from borrowings  

250

1 562

Repayments of borrowings  

-205

0

Repayments of lease liabilities   

-4 303

-2 815

Financial interest paid  

-2 280

-1 516

Flows from refundable advances   

-324

-635

Other flows from financing operation  

0

811

Increase (decrease) in loans and advances made from financing activities     

0

CASH FLOW FROM FINANCING ACTIVITIES  

-4 499

-2 596

        Effects of exchange rate changes  

419

270

Other changes without cash impact       INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  

-80 630

-22 102

Opening cash and cash equivalents position  

277 620

77 589

Closing cash and cash equivalents position  

196 990

55 487

      (*) Composed of opening cash of Malaga Aerospace, Defence & Electronics Systems SA (MADES) and put option on this company paid at theend of May 2022 (**) Composed of a net gain on the sale of property complex (Lot 2 Périole) for 11 M€.

Reconciliation of the consolidated financial statements to the adjusted financial statements for the 1st half of 2021

In order to better monitor and compare its operating and financial performance, the Group presents, in parallel with the consolidated financial statements, adjusted financial statements:

- for the foreign exchange result of instruments not eligible for hedge accounting under IFRS. This result, presented as financial result in the consolidated financial statements, is reclassified as revenue (operating result) in the adjusted financial statements,

- for changes in fair value, which include all changes in the fair value of derivatives not eligible for hedge accounting and relating to flows in future periods and the revaluation at the hedged rate of balance sheet positions (trade receivables and trade payables denominated in USD), the amount of which is presented in operating income.

- changes in deferred taxes resulting from these items are also adjusted if necessary.

Income statement for the 1st half of 2021

('000 EURO)   ConsolidatedincomestatementJune 30, 2021   Hedging   Adjusted incomestatementJune 30, 2021     Exchange rateresult   Change infair value                   Revenue   

178 476

 

2 590

     

181 066

Other operating revenue  

460

         

460

Change in inventory: work-in-progress & finished goods  

-7 997

         

-7 997

Raw material, Other Purchases & external charges  

-118 519

         

-118 519

Personnel expenses  

-78 758

         

-78 758

Taxes  

-2 431

         

-2 431

Amortization   

-13 554

         

-13 554

Net operating provisions charge  

-3 609

         

-3 609

Net depreciation of current assets  

819

         

819

Other operating income  

6 308

     

220

 

6 528

Other operating expenses  

-543

         

-543

RECURRING OPERATING INCOME  

-39 348

 

2 590

 

220

 

-36 538

Operating Income / Sales  

-22.05%

         

-20.18%

                Other non-recurring operating income and expenses  

-2 753

         

-2 753

OPERATING INCOME  

-42 101

 

2 590

 

220

 

-39 291

                Net Cost of debt  

-1 428

         

-1 428

Foreign Exchange gains/losses  

5 730

 

-2 590

 

-438

 

2 702

Change in fair value of financial derivative instruments  

2 784

     

-2 784

 

0

Other financial incomes and expenses  

-16 903

         

-16 903

FINANCIAL RESULT  

-9 816

 

-2 590

 

-3 222

 

-15 628

                Income tax  

-1 700

         

-1 700

NET RESULT FOR THE PERIOD  

-53 617

 

0

 

-3 002

 

-56 619

•  Of which, Owners of the parent  

-53 617

 

0

 

-3 002

 

-56 619

•  Of which, Non-controlling interests  

0

 

0

 

0

 

0

 

Taddeo Antoine Denry / Investor Relations +33 (0)6 18 07 83 27

Thibault Gential / Media Relations +33 (0)6 76 21 42 05 teamlatecoere@taddeo.fr

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