EXEL Industries // 2020 Universal registration document

Management report 3 Annual highlights

Amounts are expressed in millions of euros or thousands of euros and the values presented are rounded to the nearest whole figure. There may therefore be a non-material di ff erence between the sum of these rounded-up values and the total amounts presented in this section. The following section devoted to the Statement of Non-Financial Performance (DPEF) is an integral part of the management report.

Annual highlights

3.1

have been through, our teams worked hard to adapt our organization to meet our customers’ demands. That enabled us to maintain our direct margin. At the same time, we have adjusted our fi xed cost structure, ensuring tighter control of our operating cash fl ow. Operating pro fi t increased by €2.5 million to €35.3 million. The net loss of €10.7 million is a re fl ection of the following main accounting items:  an exceptional loss of €29.9 million. The very uncertain macro economic context, notably as a result of the health crisis, led us to increase the overall level of general risk taken into account in our asset impairment testing. This resulted in impairment of Agricultural Spraying goodwill in the amount of €26 million, supplemented by a non-recurring expense of €3.9 million;  net financial expense of €11.1 million, mainly consisting of the mechanical e ff ect of the closing exchange rates on our balance sheet items in the amount of €7.9 million. Last year, we recorded a foreign exchange gain of €2.7 million;  lastly, the amount of tax recorded was €5.4 million. Net fi nancial debt at September 30, 2020was €87 million, compared with €61.1 million in 2019. It includes €67.8 million related to the acquisition of iNTEC and the application of IFRS 16, i.e . cash generation of €41.9 million during the fi scal year. Financial leverage for the year 2019/2020 (NFD/EBITDA) remains at a controlled level of 1.9. Excluding iNTEC and IFRS 16 it was 0.5, compared with 1.5 the previous year. In addition, the EXEL Industries group has fi nancing lines that enable it to meet its operating needs and, where applicable, external growth, without lasting damage to its balance sheet structure.

The 2019/2020 fi scal year, which closed at the end of September 2020, resulted in EXEL Industries group sales of €754.4 million, down €22.3 million (-2.9%) compared with the end of September 2019. At constant foreign exchange rates and scope, revenue came to €729.3 million, down €47.4 million ( 6.1%).  At €332.1 million, the Agricultural Spraying business recorded a decline in sales in a global market a ff ected in 2020 by the health crisis and the price of agricultural commodities, which remained at low levels. In France, where the Group generates less than half of its sales, the agricultural equipment market was down 5%.  The Sugar Beet Harvesting business recorded a slight increase of €114.2 million in sales in 2019. The market seems to have stabilized over the past two years, at the level to which we have adapted our industrial plant in a depressed climate for the sugar industry that has seen the level of activity fall by 35% compared with the peak of 2017.  The Garden Watering and Spraying business, whose market is growing by an average of 4% per year, benefited from the enthusiasm of households in lockdown and exceptional weather from late spring. This allowed us to record sales of €121.1 million (the highest level of the last fi ve years).  The Industrial Spraying business was a ff ected by the slowdowns in the automotive and aerospace industries, re fl ected in lesser demand for wearing parts and the deferral of painting booth installation projects. The TRICOFLEX “ fl exible technical hoses” product family was for its part much less penalized. In total, we ended the year with sales of €187 million (including €27.9 million from iNTEC). At €45.4 million (6% of sales), reported EBITDA was up €3.3 million compared with 2018/2019. Despite the particularly hectic period we

Events after the reporting period and outlook

3.2

Events after the reporting period At the beginning of the fi scal year, SAMES KREMLIN announced the development of PRiNTEC ™ , a range of products and services based on patented printhead technology for the application of paint. It opens up unlimited possibilities for customization thanks to the high-speed printing of horizontal or vertical stripes, patterns or checkerboards, on 2D or 3D surfaces. It is also applicable to adhesives and sealants. PRiNTEC ™ targets the automotive, rail, aerospace, furniture and ceramics markets. This technology will enable its customers to make productivity gains while making a signi fi cant contribution to preserving the environment with no loss of paint.

Pro fi t forecasts or estimates AGRICULTURAL SPRAYING. The somewhat sluggish agricultural equipment market could be boosted by better short-term prospects for agricultural prices (wheat, corn, etc.) and government support plans (France, Australia, USA, etc.). We also plan to finalize our transformation plan in France, which is expected to produce its fi rst e ff ects on our fi xed costs and strengthen our commercial momentum. SUGAR BEET HARVESTERS. The current price of sugar and diseases could weigh heavily on the areas allocated to beet growing and therefore on equipment orders. However, sugar beet prices received fi rm support from sugar producers in the 2020/2021 season. We also

EXEL Industries group I 2020 Universal Registration Document

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