TOULOUSE, France--(BUSINESS WIRE)--Regulatory News:
Latecoere (Paris:LAT), a Tier 1 supplier to major international aircraft manufacturers, announced that the Board of Directors approved Latecoere’s financial statements for the six-month period ended June 30, 2024.
André-Hubert Roussel Group Chief Executive Officer, stated: “2023 and the first half of 2024 have been a time of unprecedented challenges for the aerospace supply chain, including Latecoere. However, I am proud of the resilience and adaptability our team has shown in navigating inflationary pressures and supply chain constraints. As OEM volume growth drives increasing activity across commercial, business jet, and defense markets, we are fully committed to supporting this ramp-up while addressing the associated challenges.
We continue to invest strategically in our operations, workforce, and geographic footprint to build a stronger, more competitive Latecoere. Looking ahead, we are optimistic about 2024, with expectations of increased revenue growth, a significant reduction in EBITDA losses, and marked improvements in operational free cash flow. These outcomes reflect the positive impact of our ongoing operational and commercial initiatives. While we remain mindful of the restructuring and working capital demands tied to growth, we are confident in our path forward to deliver enhanced value to our customers and stakeholders.”
1st Half Year 2024 Results
Group
|
June 30, 2023 |
June 30, 2023 - restated1 |
June 30, 2024 |
Revenue |
303,8 |
303,8 |
352,1 |
Reported growth |
42,9% |
42,9% |
15,9% |
Recurring EBITDA |
(18,4) |
(17,6) |
(1,8) |
Recurring EBITDA margin on revenue |
-6,0% |
-5,8% |
-0,5% |
Operating free cash flows from continuing operations |
(59,1) |
(59,1) |
(40,9) |
Net Cash Flow |
(28,1) |
(28,1) |
(46,2) |
Cash and cash equivalents |
45,8 |
45,8 |
38,8 |
Net Debt |
370,3 |
370,3 |
183,5 |
(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.
Latecoere’s half-year financial results for 2024 reflect the general increase level of production in the aeronautical sector as a whole. Revenues amounted to €352.1 million, up €48.2 million or +16%. The increase in revenues was driven by higher production rates from OEMs, additional revenue from new business wins.and the conclusion of commercial initiatives to offset inflation.
The Group reported a recurring EBITDA for the first half of 2023 of €(1.8) million, a significant improvement compared to the €(17.6) million reported in the first half of 2023. This turnaround was mainly driven by operating leverage from increased volumes, and the positive benefits coming from both operational and commercial initiatives undertaken by the Group. These positive benefits are still being offset however by continued inflationary pressures on the material cost base and ongoing supply chain disruptions during the ramp up of the operations.
Latecoere’s net financial result amounted to €(9.4) million in the first half of 2024, compared with €(9.1) million in the first half of 2023.
The Group’s net result for the first half of 2024 amounted to €(49.3) million, compared with €(59.6) million for the first half of 2023.
Free cash flow from operations for the period amounted to €(40.9) million, mainly impacted by the negative EBITDA, an increase of working capital, (net of customer advances), to fund the revenue growth, and non-recurring costs.
At the end of June 2024, cash and cash equivalent stood at €38.8 million. The net debt at the end of June 2024 stood at €183.5 million.
To date, the hedging portfolio amounted to $627.1 million at an average EUR/USD rate of 1.12. Since June 30, 2024, the Group has continued to put in place hedges for 2025 and 2026 at attractive terms.
Aerostructures
Revenue for Latecoere’s Aerostructures Division rose by +8% on a reported basis vs 1st half of 2023. The segment’s activity benefited from increased production rates and the benefit of commercial initiatives concluded in 2024.
The division’s recurring EBITDA amounted to €(13.2) million, in line with losses generated in the first half of 2023. Despite the increase in revenue, ongoing supply chain issues impacting the organization during the ramp-up led to significant cost increases, offsetting most of the improvements coming from the additional volumes and better commercial terms and conditions.
Aerostructures
|
June 30, 2023 |
June 30, 2023 - restated1 |
June 30, 2024 |
Consolidated revenue |
190,2 |
190,2 |
205,6 |
Reported growth |
65,5% |
65,5% |
8,1% |
Inter-segment revenue |
11,2 |
11,2 |
10,4 |
Revenue |
201,4 |
201,4 |
216,0 |
Recurring EBITDA |
(11,8) |
(11,0) |
(13,2) |
Recurring EBITDA margin on revenue |
-5,9% |
-5,5% |
-6,1% |
(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.
Interconnection Systems
Revenues of €146.5 million were up by +29% on a reported basis compared with €113.6 million in the first half of 2023. This growth is notably driven by increased volumes notably for the A320 program and from the benefit of commercial initiatives concluded in 2024.
Recurring EBITDA for the Interconnection Systems division reached €11.4 million, a turnaround from the €(6.6) million from the prior year, reflecting operating leverage from volume increase, tight costs control and better commercial terms and conditions achieved with customers.
Interconnection Systems
|
June 30, 2023 |
June 30, 2023 - restated1 |
June 30, 2024 |
Consolidated revenue |
113,6 |
113,6 |
146,5 |
Reported growth |
16,3% |
16,3% |
28,9% |
|
|
|
|
Inter-segment revenue |
1,3 |
1,3 |
1,0 |
Revenue |
114,9 |
114,9 |
147,4 |
Recurring EBITDA |
(6,6) |
(6,6) |
11,4 |
Recurring EBITDA margin on revenue |
-5,7% |
-5,7% |
7,7% |
(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.
2024 outlook
2023 and H1 2024 were challenging periods for the aerospace supply chain industry in general and for Latecoere in particular. These challenges continue to persist throughout 2024, with inflationary pressures and challenges arising from operating within a constrained aerospace supply chain. OEM volume growth for commercial, business jet and defense market sub-segments continues to improve overall revenue, but the ramp-up in activity results in challenges and cost pressures for the whole industry. To alleviate these challenges, Latecoere continues to invest in its operating platform, people and geographic footprint, creating a more resilient business model better positioned to grow with customer requirements. Latecoere's outlook for FY 2024 includes:
- Increased revenue growth;
- Significant reduction in EBITDA losses, resulting from the realization of operational and commercial initiatives, an improving supply chain situation and increased activity across key commercial, business jet and defense market sub-segments and;
- A significant improvement in operational free cash flow reflecting the improvements in operational and commercial initiatives partially offset by restructuring costs, increased working capital due to sales growth and key investments to strengthen Latecoere's competitive position.
Significant Events in the period
On Sunday February 4, 2024, a fire broke out at the Latecoere elementary parts production site in Hermosillo, Mexico. The Hermosillo fire department extinguished the blaze with no injuries. Damage was limited to the surface treatment and painting building. Machining and sheet metal operations were unaffected. Latecoere set up a dedicated team to deal with the consequences of this incident. To date, the estimated financial impact is -€2.7million mainly composed as follows:
- Inventory write-downs of €4.1 million;
- Depreciation of damaged industrial assets for around €1.4 million ;
- Insurance profit received in advance for €5 million ;
- Postponed deliveries of the B787 program from February 2024 to May 2024, while the supply chain was reorganized, resulting in additional production costs.
A claim has been filed with the Group’s insurance companies to cover the property damage suffered and business interruption operating losses. The financial consequence of these events, including receiving a down payment from the insurance coverage, has been fully recognized in the financial statements for the half year period ended June 30, 2024.
Post-closing events
None to report.
About Latecoere
As a Tier 1 partner to major industrial OEMs (Airbus, BAE Systems, Boeing, Bombardier, Dassault Aviation, Embraer, Honda Aircraft Company, Lockheed Martin, Raytheon Technologies, Thales), Latecoere serves the aerospace sector with innovative solutions for a sustainable world. The Group operates in all segments of the aerospace industry (commercial, regional, business, defense, space), in two business areas:
- Aerostructures: doors, fuselage, wings and empennage, connecting rods and customer service;
- Interconnection systems: wiring, avionics furniture, on-board equipment, electronic products and customer service.
At December 31, 2023, the Group employed 5,497 people in 14 countries. Latecoere is listed on Euronext Paris - Compartment B, ISIN Code: FR001400JY13 - Reuters: AEP.PA - Bloomberg: AT.FP
Appendices
Half-Year Consolidated financial statements (IFRS)
Consolidated Income statement
In thousands of euros |
June 30, 2024 |
June 30. 2023* |
Sales figures |
352 081 |
303 797 |
Other operating income |
1 742 |
5 684 |
Stocked production |
16 804 |
-3 398 |
Purchases and external charges |
-227 282 |
-199 901 |
Personnel expenses |
-139 946 |
-123 441 |
Taxes |
-4 542 |
-3 360 |
Depreciation, amortization and impairment |
-18 550 |
-21 922 |
Net additions to operating provisions |
-4 914 |
4 012 |
Net additions to current assets |
-2 339 |
440 |
Other products |
4 457 |
2 333 |
Other expenses |
-1 560 |
-4 533 |
OPERATING INCOME RECURRING |
-24 048 |
-40 289 |
Other non-recurring operating income |
6 485 |
10 771 |
Other non-current operating expenses |
-15 648 |
-21 806 |
OPERATING INCOME |
-33 211 |
-51 324 |
Cost of net financial debt |
-6 210 |
-8 823 |
Foreign exchange gains and losses |
-1 079 |
1 027 |
Unrealized gains and losses on derivative financial instruments |
-57 |
-40 |
Other financial income and expense |
-2 089 |
-1 354 |
FINANCIAL RESULT |
-9 435 |
-9 190 |
Income tax |
-6 674 |
-148 |
NET INCOME FROM CONTINUING OPERATIONS |
-49 319 |
-60 663 |
NET INCOME FROM DISCONTINUED OPERATIONS |
|
1 086 |
NET INCOME |
-49 319 |
-59 576 |
(*) Restated data: key financial indicators for the first half of 2023 have been restated to reflect Avcorp goodwill allocation adjustments under IFRS 3, recognized retrospectively
Half-Year Consolidated Balance sheet
In thousands of euros |
June 30, 2024 |
Dec. 31, 2023 |
Goodwill |
17 970 |
17 970 |
Intangible assets |
125 664 |
132 422 |
Property, plant and equipment |
109 525 |
113 421 |
Other financial assets |
6 407 |
6 151 |
Deferred taxes |
1 660 |
3 078 |
Derivative financial instruments |
579 |
3 618 |
Other long-term assets |
12 |
8 |
TOTAL NON-CURRENT ASSETS |
261 817 |
276 669 |
Inventories and work-in-progress |
239 012 |
215 622 |
Trade and other receivables |
142 602 |
116 540 |
Tax receivables |
10 621 |
11 810 |
Derivative financial instruments |
653 |
3 710 |
Other current assets |
4 550 |
4 647 |
Cash and cash equivalents |
39 433 |
85 423 |
TOTAL CURRENT ASSETS |
436 871 |
437 751 |
TOTAL ASSETS |
698 689 |
714 420 |
In thousands of euros |
June 30, 2024 |
Dec. 31, 2023 |
Capital |
124 968 |
124 968 |
Additional paid-in capital |
327 251 |
327 251 |
Treasury stock |
-448 |
-440 |
Other reserves |
-286 626 |
-294 134 |
Derivative financial instruments - effective portion |
-11 455 |
1 532 |
Net income / loss for the period |
-49 319 |
6 159 |
ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY |
104 370 |
165 335 |
NON-CONTROLLING INTERESTS |
0 |
0 |
TOTAL SHAREHOLDERS' EQUITY |
104 371 |
165 335 |
Borrowings and financial liabilities |
93 694 |
183 186 |
Repayable advances |
20 636 |
20 694 |
Commitments to employees |
12 133 |
12 429 |
Non-current provisions |
9 352 |
33 229 |
Deferred taxes |
7 376 |
7 826 |
Derivative financial instruments |
10 176 |
1 097 |
Other non-current liabilities |
1 671 |
6 853 |
TOTAL NON-CURRENT LIABILITIES |
155 037 |
265 312 |
Borrowings and bank overdrafts |
146 088 |
34 808 |
Repayable advances |
2 464 |
2 254 |
Current provisions |
32 229 |
1 151 |
Trade and other payables |
186 731 |
173 070 |
Tax payable |
4 067 |
5 597 |
Contract liabilities |
18 765 |
25 720 |
Other current liabilities |
42 344 |
36 974 |
Derivative financial instruments |
6 593 |
4 200 |
TOTAL CURRENT LIABILITIES |
439 280 |
283 774 |
TOTAL LIABILITIES |
594 317 |
549 086 |
TOTAL EQUITY AND LIABILITIES |
698 689 |
714 420 |
Half-Year Consolidated cash flow statement
In thousands of euros |
June 30. 2024 |
June 30. 2023* |
(*)Net income for the period |
-49 319 |
-58 153 |
Adjustment for : |
|
|
Depreciation and provisions |
26 018 |
9 676 |
Elimination of revaluation gains/losses (fair value) |
57 |
40 |
(Gains)/losses on asset disposals |
3 170 |
2 896 |
Other non-cash items |
1 357 |
-1 299 |
Other (*) |
3 159 |
778 |
CASH FLOW AFTER COST OF NET DEBT AND TAX |
-15 558 |
-46 064 |
Of which cash flow from discontinued operations |
|
-11 106 |
Income tax expense |
6 674 |
675 |
Cost of debt |
6 209 |
8 823 |
CASH FLOW FROM OPERATIONS BEFORE COST OF DEBT AND TAX |
-2 675 |
-36 566 |
Change in inventories net of provisions (**) |
-25 014 |
18 886 |
Change in trade and other receivables net of provisions (**) |
-29 713 |
-27 788 |
Change in trade and other payables (**) |
12 633 |
478 |
Tax paid |
-3 044 |
-2 676 |
CASH FLOW FROM OPERATING ACTIVITIES |
-47 813 |
-47 664 |
Of which cash flow from operating activities related to discontinued operations |
|
-2 578 |
Impact of changes in scope of consolidation |
|
0 |
Acquisitions of tangible and intangible fixed assets (including change in fixed asset suppliers) (***) |
-13 228 |
-19 320 |
Acquisition of financial assets |
414 |
0 |
Change in loans and advances |
1 426 |
1 781 |
Disposal of property, plant and equipment and intangible assets |
1 414 |
1 075 |
Dividends received |
0 |
0 |
CASH FLOW FROM INVESTING ACTIVITIES |
-9 974 |
-16 464 |
Of which cash flow from investing activities related to discontinued operations |
|
-598 |
Capital increase |
0 |
0 |
Purchase or sale of treasury shares |
-8 |
9 |
Bond issues |
24 988 |
51 753 |
Loan repayments |
-422 |
-1 849 |
Repayment of lease obligations |
-5 285 |
-5 374 |
Interest paid |
-6 268 |
-8 595 |
Cash flow from repayable advances |
150 |
-74 |
Other flows from financing activities |
-1 556 |
|
CASH FLOW FROM FINANCING ACTIVITIES |
11 598 |
35 871 |
+/- impact of exchange rate fluctuations |
-93 |
145 |
CHANGE IN NET CASH AND CASH EQUIVALENTS |
-46 281 |
-28 113 |
Of which net cash from discontinued operations |
0 |
-3 176 |
Opening cash and cash equivalents (net of bank overdrafts) |
85 102 |
73 897 |
Closing cash and cash equivalents (net of bank overdrafts) |
38 821 |
45 784 |
(1) This item consists solely of calculated income and expenses relating to share-based payments.
(2) In June 2023, changes in inventories net of provisions were impacted by €14.3m by changes in inventories relating to the Bombardier business. Changes in trade and other receivables are impacted by -4.1 M€ and changes in trade and other payables by 1.6 M€. The impact on operating cash flow is shown on the line 'Of which cash flow from operating activities related to discontinued operations'.
(3) Total purchases of property, plant and equipment and intangible assets differ from the total presented in note 6 due to the inclusion of changes in fixed asset suppliers and the impact of new leases which have no impact on cash flow. In 2023, the earn-out paid by the Mades entity has been reclassified under “Other cash flows from financing activities”.
(*) Restated data: key financial indicators for the first half of 2023 have been restated to reflect adjustments to the allocation of Avcorp goodwill under IFRS 3, accounted for retrospectively.