Rotterdam, The Netherlands (8 November 2017) - IMCD N.V. (“IMCD” or “Company”), a leading distributor of speciality chemicals and food ingredients, today announces its first nine months 2017 results.
• Gross profit growth of 11% to EUR 317.9 million (+11% on a constant currency basis)
• Operating EBITA increase of 10% to EUR 123.8 million (+10% on a constant currency basis)
• Net result before amortisation and non-recurring items increase of 8% to EUR 85.5 million (+8% on a constant currency basis)
• Cash earnings per share increased by 8% to EUR 1.60
• Completion of the acquisition of L.V. Lomas, one of North America's leading speciality chemicals distributors, providing geographical presence in Canada and strengthening IMCD's position in the US
Piet van der Slikke, CEO: "Our nine months results are in line with what we reported earlier this year: strong growth of EBITA and cash flow. The acquisition of L.V. Lomas closed in September and in close cooperation with the current management of Lomas, we are making good progress to integrate the business into IMCD with the goal of building a strong North American organisation."
Jan. 1 - Sept. 30 2017 Jan. 1 - Sept. 30 2016 Change Change Fx adj. Change
Revenue 1,411.3 1,305.8 105.5 8% 8%
Gross profit 317.9 286.9 31.0 11% 11%
Gross profit in % of revenue 22.5% 22.0% 0.5%
Operating EBITA1 123.8 112.8 11.0 10% 10%
Operating EBITA in % of revenue 8.8% 8.6% 0.2%
Conversion margin2 39.0% 39.3% (0.3%)
Net result before amortisation / non-recurring items 85.5 79.2 6.3 8% 8%
Free cash flow3 115.5 104.0 11.5 11%
Cash conversion margin4 90.7% 89.7% 1.0%
Earnings per share (weighted) 1.18 1.08 0.10 9% 10%
Cash earnings per share (weighted)5 1.60 1.48 0.12 8% 8%
Number of full time employees end of period 2,258 1,848 410 22%
1 Result from operating activities before amortisation of intangibles and non-recurring items
2 Operating EBITA in percentage of Gross profit
3 Operating EBITDA excluding non cash share based payment expenses, plus/less changes in working capital less capital expenditures
4 Free cash flow in percentage of Operating EBITDA
5 Result for the year before amortisation (net of tax)
In the first nine months of 2017, revenue was EUR 1,411.3 million, an increase of 8% compared to the same period in 2016. All regions contributed to the increase. On a constant currency basis, the increase in revenue
was 8%, consisting of organic growth (3%) and the first time inclusion of acquired companies (5%).
Gross profit, defined as revenue less cost of materials and inbound logistics, increased from EUR 286.9 million
to EUR 317.9 million, an increase of 11% compared to the first nine months of 2016. On a constant currency basis, the gross profit growth was 11%, consisting of organic growth of 6% and the first time inclusion of acquisitions of 5%.
Gross profit in % of revenue increased from 22.0% in the first nine months of 2016 to 22.5% in 2017. The increase of 0.5%-point is the result of the first time inclusion of acquired companies, local market circumstances, currency changes and the usual fluctuations in the product mix.
In the first nine months of 2017 operating EBITA amounted to EUR 123.8 million, an increase of 10% compared to the first nine months of 2016.
The growth in operating EBITA was a combination of organic growth and the first time inclusion of acquired companies. The operating EBITA in % of revenue increased from 8.6% in the first nine months of 2016 to 8.8% in 2017.
The conversion margin, defined as operating EBITA as a percentage of gross profit, decreased by 0.3%-point
from 39.3% in the first nine months of 2016 to 39.0% in 2017.
Cash flow and capital expenditure
Compared to the first nine months of 2016, free cash flow increased by 11%, from EUR 104.0 million to EUR 115.5 million. The cash conversion margin, defined as free cash flow as a percentage of operating EBITDA, was 90.7%, an improvement of 1.0-% point compared to the first nine months of 2016. The improvement of the free cash flow and cash conversion margin in 2017 were mainly driven by the higher operating EBITDA.
The investment in working capital (sum of inventories, trade and other receivables minus trade and other payables) in the first nine months of 2017 was EUR 10.9 million compared to EUR 8.9 million in the first nine months of 2016.
Capital expenditure was EUR 2.5 million in 2017 compared to EUR 4.1 million in the first nine months of 2016 and mainly relates to improvements of the ICT infrastructure and office furniture and equipment.
As at 30 September 2017, net debt was EUR 507.1 million compared to EUR 397.6 million as at 31 December 2016. The main driver of the increase in net debt in the first nine months of 2017 is the acquisition of L.V.
Lomas at the end of August 2017, financed by existing bank facilities and available cash. The leverage ratio (net debt/operating EBITDA including full year impact of acquisitions) as at 30 September 2017 was 2.9 times
EBITDA (31 December 2016: 2.6). Calculated on the basis of the definitions used in the IMCD loan documentation, the leverage ratio as at 30 September 2017 was 2.9 times EBITDA (31 December 2016: 2.3).
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