PARIS, August 28 Saft
PARIS, August 28 /PRNewswire-FirstCall/ -- Saft, leader in the design,
development and manufacture of high-end batteries for industry and defence,
announces its results for the 6 month period ended 30 June 2008.
First half results highlights
- Strong first half sales of EUR306.4m, up 7.2% YoY at constant exchange
rates
(+1.4% YoY as reported);
- H1 2008 EBITDA up by 6.4% YoY, on a trend slightly ahead of guidance;
- Net income up by 42.4% YoY to EUR22.5m.
Outlook for FY 2008
FY 2008 guidance revised upwards
- 2008 Sales expected to be towards the top of the sales guidance of 4 to
6% at constant exchange rates;
- Based on the average H1 exchange rates, 2008 EBITDA should be equal to
or slightly exceed 18% of sales, revised upwards from a range of
16.5 - 17.5% (at EUR1 = $ 1.53).
John Searle, Chairman of the Management Board, commented: "Saft has
delivered the expected sales and profitability growth during the first half
of 2008, despite the unfavourable impact of exchange rates. The impact of
price increases implemented during 2007 following the surge in the price of
nickel, has benefited the profitability of our Industrial Battery division
during the first half. These results confirm Saft's strong market positioning
and defensive qualities due to its mix of businesses in growing applications
and emerging markets. In addition, cash generation has been strong during H1.
I remain confident that sales and profitability will continue to grow in
H2, with a recovery in sales growth in our Specialty Battery division. The
recent fall in the price of nickel has enabled Saft to hedge most of its
needs for the second half giving us good visibility of our costs in H2.
Finally, we continue to make good progress in developing our business in
emerging applications notably for hybrid vehicles, through our JV
Johnson-Controls-Saft, and renewable energy systems.
I am very pleased overall with Saft's performance and am now confident
that sales and profitability for 2008 will be slightly ahead of our guidance
given in March this year."
Consolidated results - first half 2008
EURm First half
2008 2007Growth
Restated*%
Sales 306.4302.1 1.4%
Gross profit85.6 81.8 4.6%
Gross profit % 27.9%27.1%
EBITDA* 54.8 51.5 6.4%
EBITDA %17.9%17.0%
EBIT* 40.6 37.4 8.6%
EBIT % 13.3%12.4%
Profit before income27.9 22.325.1%
tax
Net income 22.5 15.842.4%
EPS (EUR per share) 1.22 0.8641.9%
(*) EBITDA and EBIT presented above for the six month period ended June
30, 2007 include a EUR1.1m research tax credit. Up to 2007 year-end, research
tax credits were accounted for under the line "Other operating income and
expenses", below EBIT. This change in accounting principles is fully
disclosed in the Interim condensed consolidated financial statement. The
research tax credit in H1 2008 was EUR2.8m.
Notes:
1. There have been no changes in consolidation perimeter between 2007 and
2008.
2. EBIT is defined as net income from operations, before restructuring
costs and other income and expenses.
3. EBITDA is defined as net income from operations, before depreciation,
amortisation, restructuring costs and other income and expenses.
4. Average exchange rate during H1 2008 was EUR1 = $1.53 compared with
EUR1 = $1.33 during H1 2007.
This press release includes the main Financial Statements as appendices.
Also available on Saft's website http://www.saftbatteries.com are:
- Saft's 2008 Interim Report, including the Interim Condensed
Consolidated Financial Statements;
- A presentation on Saft's interim results.
Key figures
- Sales were EUR306.4m in the first half of 2008, compared with EUR302.1m
in the first half of 2007, an increase of 1.4% at actual exchange rates
and 7.2% at constant exchange rates.
- Gross profit increased by almost one point at 27.9% in first half 2008
as compared to 27.1% in first half 2007.
- EBITDA and EBIT have significantly increased as compared to first half
2007:
- EBITDA was EUR54.8m (17.9% of sales), compared with EUR51.5m (17% of
sales) in 2007;
- EBIT was EUR40.6m (13.3% of sales), compared with EUR37.4m (12.4% of
sales) in 2007.
- Net income during H1 was EUR22.5m compared with EUR15.8m in 2007. This
marked improvement was the result of:
- Reduced net financial costs;
- The elimination of mark to market losses on commodity contracts;
- Increased losses at Johnson-Controls-Saft to EUR5.1m from EUR3.8m in
2007 (equity accounted).
- A significant reduction in the tax rate which was only 19% during H1.
Full year effective tax rate is expected to be not more than 25%.
- Earnings Per Share were at EUR1.22 as compared with EUR0.86 in 2007.
- Net debt at June 30, 2008 was EUR268.1m, compared with EUR297.8m at
December 31, 2007. Net debt to EBITDA ratio was 2.67 as of end of June
2008 (3.1 as at December 31, 2007).
- Shareholder's equity increased to EUR148.1m at June 30, 2008 as
compared with EUR126.9 at December 31, 2007.
- Group cash position is EUR56.5m, showing a EUR14.2m increase as
compared to December 31, 2007. The increase in cash position results
from both increased profitability from operations and improved working
capital management.
- Investments in fixed assets for 2008 first half were EUR13.9m, compared
to EUR11.4m in 2007.
Results by product line
6 months ended 30 June 2008 6 months ended 30 June 2007
Product EBITDA EBITDA
line Sales Margin SalesEBITDA Margin
Sales growth EBITDA% EURm EURm%
EURm % EURm
SBG 117.63.5%25.4 21.6% 121.7 29.3 24.1%
IBG 149.2 14.4%29.9 20.0% 137.3 22.1 16.1%
RBS39.6 (5.1%)1.12.8% 43.1 1.8 4.2%
Other 0.0(1.6) 0.0 (1.7)
Total 306.47.2%54.8 17.9% 302.1 51.5 17.0%
All at actual exchange rates, except sales growth % which is at constant
exchange rates.
June 2007 results modified to reflect research tax credit.
Industrial Battery Group (IBG)
In the first half, IBG sales increased by 14.4% at constant exchange
rates to EUR149.2m, up by 8.6% as reported, compared with H1 2007.
Saft estimates that 50% of IBG sales growth was due to increased volumes.
This was mainly due to the expected strong growth in the telecom market in
Q1, but also to strong demand for industrial standby batteries, especially
from the oil and gas, power generation and distribution markets throughout
the first half. A significant part of that latter demand comes from emerging
markets.
The rest of the growth was due to price increases, implemented in H1
2007, which only impacted sales from H2 2007.
The EBITDA margin recovered strongly at 20% of sales as a result of
pricing and continued volume growth.
Foreign exchange rate changes have negatively impacted the result of IBG,
partially offset by the division having significant purchases of metals in
USD. Saft has taken advantage of the falling nickel price to increase its
hedging to 80% of its needs for H2 2008, and has also taken positions for a
lesser proportion of its needs in H1 2009.
Specialty Battery Group (SBG)
SBG sales increased by 3.5% at constant exchange rates to EUR117.6m, down
3.4% as reported compared with H1 2007.
Continued growth was seen from the civil market, most notably batteries
for metering systems in the US and satellite batteries. Second quarter growth
was stronger due to greater demand and sales in military markets. Important
contracts were announced during the first half and strong orders from the
military market were recorded in the second quarter.
Finally, the multi-year contract with the U.S. Defense Logistics Agency
(DLA) to supply the U.S. armed forces with lithium batteries was renewed in
July with Saft being awarded 100% of the contract.
The EBITDA margin for the division decreased by 2.5 points to 21.6% of
sales in H1 2008, as a result of a weakening dollar against the euro. The
Division had growing sales in the US but lower US production due to the low
demand from the US Army. The fall in EBITDA margin % can be fully accounted
for by foreign exchange movements.
Rechargeable Battery Systems (RBS)
In the first half, RBS reported sales of EUR39.6m, a decrease of 5.1% at
constant exchange rates, down by 7.9% as reported, compared with H1 2007.
This sales reduction, all in Q2, was largely the result of pricing
adjustments related to the nickel surcharge. Despite a challenging market
environment, the Division achieved a positive EBITDA at 2.8% of sales due to
the combined effect of higher prices from the 1st January 2008 and tight
control of costs.
Other
The "Other" cost centre includes central functions such as IT, research
and central management, finance and administration, a proportion of which is
recharged to each of the product lines. The cost centre result EUR(1.6)m is
better than in 2007 EUR(1.7)m due to the slight effect of the tax credit on
the net cost of research.
Johnson Controls - Saft Advanced Power Solutions LLC ("JC-S")
The recent announcement of a contract with Ford to develop and supply
batteries for a fleet of Plug-In Hybrid Ford Escapes highlights the
continuing progress of the Johnson Controls-Saft JV.
The JV has received contracts from six different car manufacturers and
its Nersac production facility is ready to kick-off production of lithium
batteries for Mercedes by the end of 2008.
Saft's share in operational losses at Johnson Controls-Saft was recorded
in the first half Consolidated Financial Statements for a total amount of
EUR5.1m, compared with EUR3.8m in 2007.
Saft has contributed EUR3.8m ($5.9m) of equity to the venture in H1 and
anticipates contributing 49% of the $40m cash needs for the full year.
Outlook
EUR mFY 2007* H1 2008 FY 2008 FY 2008
Restated Actual March 08 Revised
Estimate Estimate
Sales 600.5306.4 4 - 6%** 5 - 6%**
EBITDA*98.0 54.8
EBIDTDA margin % 16.3%17.9%16.5- 17.5% supérieure
ou égale a
18.0%
EUR / $ rate 1.37 1.531.53 1.53
LME cash nickel ($k/t) 37.2 27.3<35.0~20.0
(*) EBITDA presented above for 2007 include research tax credits which
amount to EUR1.9m. Research tax credits were previously reported below EBIT
under the line "Other operating revenues and expenses. This change in
accounting principles is fully disclosed in the interim condensed
consolidated financial statements.
(**)Sales estimate assumes constant exchange rate EUR1=$1.37
The revised guidance takes into account the following:
- Impact of falling nickel costs on the level of sales in the RBS
Division;
- EBITDA guidance based on FY average exchange rate EUR1 = $1.53;
- Assumes H2 LME nickel cash price will be in the region of $20k/t ;
- Assumes sensitivity of sales and EBITDA to exchange rates is unchanged
as follows :
- a 10 % change in $/EUR exchange rates results in a 4% change in sales
- a 10 % change in $/EUR exchange rates results in a 6% change in EBITDA.
Financial calendar 2008
2008 Q3 turnover: 6 November 2008
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS
Certain statements contained herein are forward-looking statements
including, but not limited to, statements that are predictions of or indicate
future events, trends, plans, objectives or results of operation. Undue
reliance should not be placed on such statements because, by their nature,
they are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results and Saft's plans
and objectives to differ materially from those expressed or implied in the
forward looking statements.
About Saft
Saft (Euronext: SAFT) is a world specialist in the design and manufacture
of high-tech batteries for industry. Saft batteries are used in high
performance applications such as industrial infrastructure and processes,
transportation, space and defence. Saft is the world's leading manufacturer
of nickel-cadmium batteries for industrial applications and of primary
lithium batteries for a wide range of end markets. The group is also the
European leader for specialised advanced technologies for the defence and
space industries. With approximately 3,900 employees worldwide, Saft is
present in 18 countries. Its 15 manufacturing sites and extensive sales
network enable the group to serve its customers worldwide.
For more information, visit Saft at http://www.saftbatteries.com
Appendices
Consolidated balance sheet
ASSETS
in EUR million At June 30, 2008 At December 31, 2007
ASSETS
Non-current assets
Property, plant and equipment, 105.1 104.7
net
Assets held under finance leases 3.33.3
Investments in associates14.0 17.2
Investment properties 0.30.4
Goodwill 98.9 103.5
Intangible assets, net 238.8 242.2
Investments in related0.40.4
undertakings
Deferred tax assets 9.2 10.5
Financial receivables 1.92.2
471.9 484.4
Current assets
Inventories 83.8 78.5
Trade and other receivables 149.2 156.7
Derivative instruments1.10.3
Cash and cash equivalents56.5 42.3
290.6 277.8
Total assets762.5 762.2
Liabilities and equity
in EUR million At June 30,At December 31,
2008 2007
SHAREHOLDERS' EQUITY
Ordinary shares 18.5 18.5
Share premium (15.1)(15.1)
Treasury shares (0.7) (0.7)
Cumulative translation adjustment(7.8) (3.0)
Fair value and other reserves19.3 16.5
Group consolidated reserves 133.2 109.9
Minority interest in equity 0.7 0.8
Total shareholders' equity 148.1 126.9
LIABILITIES
Non-current liabilities
Contingent advances 3.5 3.5
Debt321.4 332.4
Other non-current liabilities 2.7 2.6
Deferred income tax liabilities 70.4 68.5
Pensions and other long-term employee 9.6 9.5
benefits
Provisions for other liabilities and 34.6 37.5
charges
442.2 454.0
Current liabilities
Trade and other payables152.9 153.1
Taxes payable 3.9 5.6
Debt 3.2 7.7
Derivative instruments1.4 1.3
Pensions and other long-term employee 0.2 0.2
benefits
Provisions for other liabilities and 10.6 13.4
charges
172.2 181.3
Total liabilities and equity762.5 762.2
Consolidated income statement
in EUR million At June 30, 2008 At June 30, 2007
Restated
Revenue 306.4302.1
Cost of sales (220.8) (220.3)
Gross profit 85.6 81.8
Distribution costs (15.9) (15.9)
Administrative expenses (21.7) (20.9)
Research and development (7.4)(7.6)
expenses
Restructuring costs -(0.1)
Other operating income / 0.1 (2.3)
expenses
Operating profit 40.7 35.0
Finance costs-net(8.3)(9.1)
Share of profit / (loss) of (4.5)(3.6)
associates
Profit before income tax 27.9 22.3
Income tax expenses (5.4)(6.5)
Profit for the period22.5 15.8
Net income of minority - 0.1
Profit for the period after 22.5 15.9
minority
Attributable to :
Equity holders of the company22.5 15.8
Minority interest - 0.1
Earnings per share for profit
attributable to the equity
holders of the company during
the year (in EUR per share)
Basic1.22 0.86
Diluted 1.22 0.86
Consolidated statement of income and expenses recognised in the period
6 months ended
in EUR million June 30, 2008 June 30, 2007
Fair value gains / (losses), cash flow hedge (0.7) (2.3)
Fair value gains / (losses), net investment 4.50.4
hedge
Actuarial gains and losses on defined - -
benefit pension plan
Currency translation adjustments (4.9)2.7
Tax effect on income / (expenses) recognised (1.0)0.6
directly in equity
Net income / (expenses) recognised directly (2.1)1.4
in equity
Profit for the period 22.5 15.8
Total recognised income in the period 20.4 17.2
Attributable to:
Shares20.4 17.2
Consolidated statement of cash flows
in EUR millionAt 30 June 2008 At 30 June 2007
Profit for the year 22.5 15.8
Adjustments :
Earning of equity basis companies (net of 5.03.7
dividends received)
Tax 5.46.5
Tangible and intangible assets 14.2 14.1
amortisation
Finance costs-net 8.39.1
Net movements in provisions (4.7) (3.7)
Other variable cost/income - lease part 0.1 (1.2)
50.8 44.3
Change in inventories(8.1) (15.8)
Change in trade and other receivables 3.0 (17.3)
Change in trade and other payables (1.2) (1.7)
Changes in working capital (6.3) (34.8)
Cash generated from operations before44.59.5
interest and tax
Interest paid (11.9) (9.7)
Income tax paid (2.0) (3.2)
Net cash provided by operating activities30.6 (3.4)
Cash flows from investing activities
Acquisition of subsidiaries, net of cash (3.8) -
acquired
Purchase of property plant and equipment(10.9) (8.8)
(PPE)
Purchase of intangible assets(3.0) (2.6)
Proceeds from sale of PPE 1.20.1
Proceeds from sale of available-for-sale 2.41.2
financial assets
Purchases of short-term securities (2.1) (1.2)
Interest received- 2.3
Net cash generated from investing (16.2) (9.0)
activities
Cash flows from financing activities
(Purchase) / Proceeds from issuance of - (0.1)
treasury shares
Increase / (decrease) in other long-term 0.4 (0.3)
liabilities
Net cash used in financing activities 0.4 (0.4)
Net increase in cash and bank overdrafts 14.8 (12.8)
Cash and bank overdrafts at beginning of 42.3 61.6
period
Exchange gain / (loss) on cash and bank (0.6) (0.6)
overdrafts
Cash and bank overdrafts at end of period 56.5 48.2
Press and Investor Contacts:
SAFT
Jill LEDGER
Corporate Communications and Investor Relations Director
Tel.: +33-1-49-93-17-77
jill.ledger@saftbatteries.com
FINANCIAL DYNAMICS
Press Contacts
Elodie MARCHAND
Tel.: +33-1-47-03-68-17
elodie.marchand@fd.com
Henrietta GREEN,
Tel.: +33-1-47-03-68-60
henrietta.green@fd.com
Investor Relations
Valéry LEPINETTE
Tél.: +33-1-47-03-68-62
valery.lepinette@fd.com
Clément BENETREAU,
Tél.: +33-1-47-03-68-12
clement.benetreau@fd.com
SOURCE Saft
