ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
Condensed Unaudited Interim Consolidated Financial Statements
For the period ended September 30, 2012
1
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
MANAGEMENT REPORT
July – September 2012
January – September 2012
Actual sales growth continued to be weak in the third quarter due to soft market conditions in North America and in Europe, offset
by strong growth in emerging countries (India, Indonesia, Brazil).
Adjusted Ebitda margin (excluding exceptional items) improved year on year in the third quarter as a result of all cost reduction
initiatives launched over the past 18 months.
Changes in currency exchange rates negatively impacted sales and Adjusted Ebitda by approximately 7%.
The free cash flow for the first 9 months was negative, driven by significant one offs cash out (restructuring costs, Rexam
acquisition fees and acquisition of Tex).
Third quarter results
Tubes
F&C
Group
Organic Sales
(2.9%)
(0.6%)
(1.9%)
Fx Translation
effect
(7.0%)
(7.4%)
(7.2%)
Acquisition
n/a
+9.0%
+3.7%
Reported Sales
(9.7%)
+0.3%
(5.6%)
Business Segments : Tubes / F&C : Fragrances & Cosmetics
Reported sales for the 3-month period ending September 30th 2012 at $233.5m from $247.3m in 2011. Changes in currency
exchange rates impacted sales by approximately 7%.
Quarter 3 sales included the results of Albea Metal (acquired in November 2011) and Tex China (acquired in April 2012), our last
two acquisitions, for a total of $8.5m.
2
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
Revenues in our “Tubes” segment at $131.4m from $145.6m in 2011 mainly due to both the one off loss of one contract in
emerging market, and the soft market conditions in mature countries.
Revenues in our “Fragrance and cosmetics” segment increased to $102m from $101.7m in 2011 as a result of the consolidation
of our acquisitions in the US and in China, and growth in emerging markets, which offset poor market conditions in Europe and in
North America.
Adjusted Ebitda was stable at $20.9m compared to $21.3m for the same period in 2011, despite an unfavourable translation
effect of approximately $1.5m. The Group Adjusted Ebitda margin improved by +0.3 point year on year despite volume losses,
supported by positive productivity gains net of inflation, and by the benefit of footprint optimizations completed in 2011 in mature
and emerging markets.
Year-to-date results
Business Segments : Tubes / F&C : Fragrances & Cosmetics
Reported sales for the 9-month period ending September 30th 2012 at $724.0m from $776.2m in 2011. Changes in currency
exchange rates impacted sales by approximately 6%.
Sales included the results of Albea Metal and Tex, our last two acquisitions, for a total of $23.2m.
Revenues in our ”Tubes” segment at $414.7m from $460.7m in 2011 mainly due to the one off loss of one contract in emerging
market, and due to soft market conditions in mature countries.
Revenues in our “Fragrance and cosmetics” segment at $308.8m from $315.4m in 2011 due to soft volumes in Europe and in
North America compared to prior year which included new fragrance launches, partly offset by our acquisitions in the US and in
China, and growth in Brazil.
3
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
Adjusted Ebitda at $68.5m improved vs 2011 by +$0.3m, despite an unfavourable translation effect of approximately $4.2m. The
Group Adjusted Ebitda margin improved +0.7 point year on year despite volume losses, supported by positive productivity gains
net of inflation, and by the benefit of footprint optimizations completed in 2011 in mature and emerging markets. New acquisitions
only contributed +$0.6m to the group Adjusted Ebitda as sales and operational turnaround just started.
Outlook
Total business opportunities and our pipeline of innovations are very promising for our long term growth. However, we will have a
challenging fourth quarter due to inventory management at our customer premises, and general softness in mature markets.
Customers are also reinforcing pressure on cash by increasing the payment terms
4
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
CONSOLIDATED INCOME STATEMENT
July to
September 30
2012
July to
September 30
2011
Period ended
September 30
2012
Period ended
September 30
2011
4-5.1
233 454
247 280
724 004
776 164
5.2
(192 481)
40 973
(201 540)
45 741
(592 690)
131 314
(631 968)
144 196
(28 244)
(11 426)
11
0
473
1 786
(31 157)
(7 052)
(0)
0
(233)
7 298
(86 483)
(28 569)
(277)
2 392
278
18 654
(97 318)
(16 456)
(0)
0
240
30 661
(689)
1 097
(3 501)
(2 403)
(1 295)
6 003
(2 094)
3 909
(5 438)
13 215
(10 312)
2 903
(4 129)
26 532
(9 067)
17 466
0
(2 403)
0
3 909
0
2 903
0
17 466
(2 391)
(12)
3 985
(76)
2 967
(64)
16 094
1 372
-11,8
19,7
14,7
79,6
Note
Continuing operations:
Revenue
Cost of sales
Gross profit
Selling and administrative expenses
Restructuring and projects costs (*)
Impairment charges
Badwill
Other (expense) / benefit
Operating profit
Finance costs (income) – net
Profit from continuing operations before income taxes
Income tax (expense) / benefit
Profit from continuing operations
5.3
5.4
Discontinued operations:
Profit / (loss) from discontinued operations
Profit for the period
Attributable to:
Owners of the Group
Minority interests
Earning per share (in usd)
3
5.5
* Including 19.5 MUSD of acquisition costs incurred at the end of September 2012 for the acquisition of the Personal Care
business of Rexam PLC (See note 3) / 9.3 MUSD for Q3 2012
The notes are an integral part of the condensed interim consolidated financial statements
5
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended
September 30
2012
Profit for the period
Net change in foreign currency translation adjustments
Gains/(losses) generated during the period
Recycling
2 903
1 953
Gains on available asset for sale (*)
Gains/(losses) generated during the period
Recycling
Actuarial gains (losses) on post-retirement benefit
plans
Gains/losses generated during the period
Recycling
Tax effects
Other Comprehensive Income
Total Comprehensive Income
Attributable to:
– Owners of the Group
– Non-controlling interests
(4 260)
536
(1 771)
1 132
1 195
(64)
The notes are an integral part of the condensed interim consolidated financial statements
6
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
CONSOLIDATED BALANCE SHEET - ASSETS
Period ended 30
September
Period ended 31
December
2012
2011 (*)
6.1
6.2
6.2
12 460
5 608
248 351
7 344
6 045
279 808
11 843
4 960
216 684
8 050
7 433
248 970
6.3
6.4
6.5
95 628
174 429
24 417
294 477
574 284
86 379
150 242
28 412
265 033
514 005
Note
Non-current assets
Goodwill
Intangible assets
Properties, plants and equipments
Deferred income tax assets
Other financial assets NC
Total non-current assets
Current assets
Inventories
Trade receivables and other
Cash and cash equivalents
Total current assets
Total assets
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
The notes are an integral part of the condensed interim consolidated financial statements
7
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
CONSOLIDATED BALANCE SHEET - EQUITY AND LIABILITIES
Period ended
30 September
Period ended
31 December
2012
2011 (*)
302
19 392
157 552
300
19 197
154 586
Other comprehensive income
(17 954)
(16 184)
Equity excluding Non controlling interests
159 292
157 899
Non controlling interests
Total invested equity
109
159 401
170
158 069
28 521
30 371
40 412
4 532
3 394
872
12 086
120 189
24 726
31 971
35 871
4 273
2 824
0
13 653
113 318
69 219
213 094
8 776
3 606
294 694
414 883
574 284
46 287
184 847
4 127
7 357
242 618
355 936
514 005
Note
Invested equity
Capital stock
Additional paid-in capital
Retained earnings and other components of equity
Non-current liabilities
Borrowings NC
Deferred income tax liabilities
Pension and other retirement benefit obligations
Other long-term employee benefit obligations
Other financial liabilities NC
Other non financial liabilities NC
Provisions
Total non-current liabilities
Current liabilities
Borrowings C
Trade payables and other
Income taxes payable
Provisions
Total current liabilities
Total liabilities
Total invested equity and liabilities
6.6
6.9
6.8
6.10
6.7
6.9
6.11
6.7
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
The notes are an integral part of the condensed interim consolidated financial statements
8
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
CONSOLIDATED CASH FLOW STATEMENT
Period ended
September 30
2012
Period ended
December 31
2011 (*)
2 903
18 635
10 312
5 438
21 654
(2 392)
(630)
(1 680)
(5 450)
(6 619)
23 536
9 008
6 595
24 264
(4 273)
(34)
30 663
(1 611)
(14 479)
68 768
(46 439)
415
(5 582)
(62 473)
894
5 616
487
(51 119)
(1 694)
(57 657)
11 359
15 140
(2 522)
(3 200)
0
5 583
25 735
(51 406)
(2 266)
0
Cash flow from financing activities
249
21 027
755
(21 599)
Net increase / decrease in cash and cash equivalents
(6 556)
(10 488)
Opening cash and cash equivalents
27 438
39 089
148
(1 163)
21 030
27 438
Note
Profit from the period
Adjustments for :
Income tax expense recognised in profit or loss
Finance cost (Net)
Depreciation and amortisation
Badwill (Tex China in 2012, Albea Metal in 2011)
Net (gain)/loss on disposal of assets
Movements in working capital
Provisions variation
Income taxes paid
3
Cash flow from operating activities
Acquisitions of Assets
Disposal of Assets
Impact of scope variation (**)
Others
Cash flow from investing activities
Loans issued
Factoring
Repayment of loans (***)
Interest paid
Dividends paid to owners of the Company
Increase (decrease) of capital
Effects of exchange rate variations on the cash balance held
in foreign currencies
Closing cash and cash equivalents
(*) Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
(**) Tex China / Plastimec proceeds
(***) In 2011, Bett’s debt repayment for 48 MUSD
9
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
The notes are an integral part of the condensed interim consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated
Cumulative
reserves and
Unrealized
translation
retained
gains (losses)
adjustments
earnings
Capital
stock
Additional
paid-in
capital
247
18 495
126 537
17 183
0
0
17 183
53
300
702
19 197
0
0
2
195
Equity
attribuable to
the group
Non
controlling
interest
Total equity
142 723
17 183
(13 627)
3 556
161
1 449
(203)
1 246
142 884
18 632
(13 833)
4 802
(1 238)
170
(64)
0
(64)
9 627
755
158 069
2 903
(1 771)
1 132
2
108
197
2
159 401
In thousands $
December 31, 2010
Net income
Other comprehensive income
Total comprehensive income
Dividend paid
Capital increases
Betts acquisition under commun control
Change in Group holding
December 31, 2011 (*)
Net income
Other comprehensive income
Total comprehensive income
Dividend paid
Capital increases
Other
September 30, 2012
(2 556)
(1 504)
(1 504)
(12 123)
(12 123)
10 865
302
19 392
154 585
2 967
2 967
157 552
(1 504)
(14 679)
(3 724)
(3 724)
1 953
1 953
10 865
755
157 899
2 967
(1 771)
1 195
(12 727)
197
0
159 292
(5 228)
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
10
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
Notes to the condensed interim consolidated financial statements
Consolidated Statement
Consolidated Income Statement
Consolidated Statement of Financial Position
Note 6
Notes to the Balance sheet
Consolidated Statement of comprehensive income
Note 6.1
Goodwill
Consolidated Balance sheet - Assets
Note 6.2
Tangible and intangible assets
Consolidated Balance sheet – Equity and liabilities
Note 6.3
Inventories
Consolidated Cash Flows Statement
Note 6.4
Trade Receivables and Other
Consolidated Statement of Change in Equity
Note 6.5
Cash and Cash Equivalents
Note 6.6
Capital share
Note 6.7
Provisions
Consolidated General information
Note 6.8
Pension provision
Note 6.9
Borrowings
Note 1
General information
Note 6.10
Other financial liabilities
Note 2
Accounting Policies
Note 6.11
Trade Payables and Other
Note 3
Other informations
Note 4
Segment reporting
Note 7
Related parties
Note 8
Subsequent events
Consolidated Statement of Income
Note 5
Notes to the Income Statement
Note 5.1
Revenues
Note 5.2
Cost of sales
Note 5.3
Restructuring and projects costs
Note 5.4
Income tax
Note 5.5
Earnings per share
11
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 1
GENERAL INFORMATION
1.1. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying notes are an integral part of these condensed interim financial statements for the three and nine month
periods ended September 30, 2012.
1.2. GENERAL INFORMATION
Twist Beauty S.à.r.l. & Partners S.C.A (the “Company”) is domiciled in Luxembourg and registered in the Registre du Commerce
et des Sociétés de Luxembourg under number B 152.772 and is an affiliate of Sun Capital Partners V LP.
Twist Beauty Holdings SA, issuer of the Bonds, is held by Twist International Holdings S.A which is held by Twist Beauty S.à.r.l. &
Partners S.C.A, head of Albéa. These two entites have no operating activities for the period ended September 30, 2012.
The Company and the entities included in the scope of consolidation (Note 8 of December 2011 Notes) constitute Albéa Group
(“Albéa”, or “the Group”). This group was created by Sun Capital after the acquisition of the Beauty Packaging business from Rio
Tinto Alcan the 2 July 2010. The scope of consolidation is impacted by the acquisition of Tex China (see Note 3).
Albéa is one of the world’s leading producers of plastic packaging products for the beauty and cosmetics industry, providing a
wide range of solutions for the make-up, fragrance, skincare, personal and oral care markets. The operational headquarters of the
Group are located in Gennevilliers, France. The Group employs about 9,000 people and operates 36 manufacturing facilities in 13
different countries across Europe, the Americas and Asia.
The consolidated financial statements are presented in thousands of US dollar and all values are rounded to the nearest
thousand (‘000) except where otherwise indicated.
12
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 2
ACCOUNTING POLICIES
2.1 COMPLIANCE WITH IAS 34
These condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial
Reporting. They do not contain all the disclosures required for annual financial statements and should therefore be read in
conjunction with the Group’s annual financial statements for the year ended December 31, 2011, in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union.
2.2. BASIS OF PREPARATION
2.2.1. General principle
The preparation of these condensed interim financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a
higher degree of judgment, complexity or areas where assumptions and estimates are significant to the condensed interim
consolidated financial statements are disclosed in Note 2.2.2.
Based on preliminary analysis, the amendments of IAS 19 and IAS 1, published by the IASB and adopted by the European Union
but not mandatory for reporting periods beginning on or after January 1, 2012 and not early adopted by the Group and the new
standards (IFRS 10, IFRS 11, IFRS 12 and IFRS 13) published by the IASB but not mandatory for reporting periods beginning on
or after January 1, 2012 and not yet adopted by the European Union, would not have material impacts on Albéa financial
statements.
2.2.2. Accounting estimates and judgments
The preparation of these condensed interim consolidated financial statements requires Management to exercise its judgment and
make estimates and assumptions. These estimates and underlying assumptions are based on past experience and other factors
considered reasonable under the circumstances.
They serve as the basis for any judgment required for determining the carrying amounts of assets and liabilities when such
amounts cannot be obtained directly from other sources.
Actual amounts may differ from these estimates.
13
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
The main sources of uncertainty relating to estimates used to prepare the interim consolidated financial statements were the
same as those described in the full-year 2011 consolidated financial statements. During the first nine months of 2012,
Management reviewed its estimates regarding:
- Deferred tax assets not recognized in prior periods relating to unused tax losses;
- The recoverable amount of certain property, plant and equipment, intangible assets and goodwill;
- Provisions for contingencies.
2.2.3 Specific issues concerning the preparation of interim financial statements
For the purpose of preparing the Group’s condensed interim consolidated financial statements, the following calculations and
estimates are applied in addition to the recognition, measurement and presentation rules described in note 2.2.2.
- The current and deferred tax charge for the period is calculated by applying the estimated average annual tax rate for the
current fiscal year to the first nine months pre-tax income figure for each entity or tax group.
- Expenses relating to pensions and other post-employment benefit obligations are estimated based on the prorata temporis
amount expected for the full year, except where specific events occur which have a material impact on the consolidated
financial statements, in which case adjustments are made.
2.2.4 Seasonality
The Group's performance is not affected by significant cyclical factors.
2.3. CHANGE OF ALBEA METAL PURCHASE ACCOUNTING PRICE ALLOCATION
The purchase price allocation of Albea Metal has been finalized during the first semester of 2012. The fair value of assets and
liabilities acquired in this transaction has been restated for the following amounts at the acquisition date :
-
Fixed assets : + 88 KUSD
-
Inventories : + 669 KUSD
-
Deferred Tax Liabilities : - 2 830 KUSD
-
Other assets net : + 120 KUSD
Accordingly the badwill has been restated for an amount of – 1 953 KUSD
The change on 31 December 2011 accounts are the following :
-
Fixed assets : + 88 KUSD
-
Inventories : + 660 KUSD
-
Deferred Tax Liabilities : - 2 574 KUSD
-
Other assets net : -77 KUSD
Consolidated reserves and retained earnings: - 1 903 KUSD
14
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 3
OTHER INFORMATIONS
CHANGE OF SCOPE
Acquisition made in 2012
Acquisition of Tex China
On April 20, 2012, Albéa signed an agreement to acquire Tex China (the official name of the company is Zhongshan Meiquan
Plastic Products Co Ltd). Tex China produces Fragrance and Cosmetic products such as mascaras, lip gloss, lipstick, jars, and
compacts. The company operates 3 sites located in Zhongshan (Guangdong Province) and employs 700 people. Albéa acquired
100% of Tex China shares for 10 144 KUSD to individuals (via two sub-holdings). The objective of this acquisition is to increase
Albéa’s production capacities in China in the Fragrance & Cosmetic segment.
All assets, liabilities and contingent liabilities had been fair valued in accordance with IFRS 3R “business combination” at the
acquisition date.
In thousands $
Acquisition price (A)
April 20, 2012
10 144
ASSETS
Property, plant and equipment
Deferred tax asset
7 040
568
Total non-current assets
Inventories
Trade receivables and other
Cash and cash equivalents
7 608
2 201
4 192
2 587
Total current assets
Total assets
8 980
16 589
LIABILITIES
Deferred tax liabilities
Provisions
410
351
Total non-current liabilities
Trade payables and other
761
3 291
Total current liabilities
3 291
Total liabilities
4 052
Net attribuable assets acquired (B)
Badwill (B) - (A)
12 536
2 392
15
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
The contribution of Tex China in the consolidated income for the period from April 20, 2012 to September 30, 2012 is the
following:
- Sales: 6 863 KUSD (11 801 KUSD including interplant sales)
- Operating result: 16 KUSD
- Net result: 33 KUSD
Acquisitions made in 2011
Acquisition of Betts Group
Following the signature of a definitive share purchase agreement on February 2, 2011 with effect from January 1, 2011, Albéa
acquired the Betts Group by the issuance of shares, except for the acquisition of Betts Central Europe Holdings Limited (UK)
and its subsidiary located in Poland, to its shareholder Sun Capital. Betts is a producer of laminate tubes that operates six plants
in the UK, Poland, Mexico, India and Indonesia.
Albéa acquired 52,88% of the Iona TopCo Limited and its subsidiaries and 100% of Betts Central Europe Holdings Limited (UK)
and its subsidiary from its shareholder Sun Capital, through its entities Twist Beauty Packaging Holding UK and Cebal Tuba Sp
zoo (Poland).
On June 20, 2011, Twist Beauty Packaging SCA acquired from its shareholder Sun Capital 100% of Iona Luxembourg Sarl which
notably held the remaining 47,12% of the Betts Group.
The minority interests in the condensed interim consolidated income statement for the period ended September 30, 2011 were
related to the 47.12% of Betts Group not held by Albéa between January 1, 2011 to June 20, 2011.
At the end of these two transactions, Albéa holds 100% of the Betts Group.
Acquistion of Albéa Metal
On November 10, 2011, Albéa entered into an Asset Purchase Agreement with Eyelematic Manufacturing Company, Inc. (CT,
USA), Echo Manufacturing Company, Inc. (CT, USA) and Seemar Real Estate, LLC, (CT, USA) to acquire Property Plant and
Equipment, Working Capital for a total consideration of USD 9.6 million.
The contribution of Albéa Metal in the consolidated income for the period ended September 30, 2012 is the following:
- Sales: 16 320 KUSD (17 782 KUSD including interplant sales)
- Operating result: (2 502) KUSD
- Net result: (2 547) KUSD
16
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
OTHER SIGNIFICANT EVENTS OF THE PERIOD
After the cancellation of a major contract in 2011 in Brazil, Albea has closed its Suape Plant in Brazil at the end of August
2012.
On August 17, 2012, Albéa signed an agreement related to the sale of its 51% investment in the outstanding capital share of
TPI Plastimec for 1.1 MUSD. This disposal results in the recognition of a gain of 514 KUSD.
On September 20, 2012, Albéa signed an Equity Purchase Agreement to acquire the Personal Care business of Rexam plc
(“Rexam”). The closing of the Rexam Personal Care (“Rexam PC”) acquisition is subject to certain conditions, including the
approval of merger control authorities in the United States, the European Commission, Brazil and China and the absence of a
material adverse change in the business.
Rexam PC is a leading global manufacturer of cosmetics, home and personal care packaging for customers located worldwide.
Following completion of the acquisition, the Cosmetics division of Rexam PC will be part of Albéa. It employs approximately 6,500
people in 11 facilities across 6 countries.
On October 17, 2012, Albéa successfully issued 200 M€ and 385 MUSD Senior Secured Notes due in 2019.
No other significant events have occurred during the nine months period ended September 30, 2012.
17
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 4
SEGMENT REPORTING
As described below, Albéa has two operating segments, and reports the corporate costs not allocated to either of these two
segments in the “Group” segment :
• Tubes: laminate and plastic tubes for the oral care and cosmetic industry
• Fragrance & Cosmetic and Business Solutions (F&C + BS): skincare caps, lipstick, compact, mascara, trading activities
• Group : “Holding & Corporate” costs not allocated to the two operating segments
Albéa also presents data categorized according to three geographic areas, consisting of its three main geographic markets:
Europe, North America, Emerging countries (India, China, Indonesia, Brazil, Hong Kong, Russia and Mexico).
The “Adjusted EBITDA” excludes non recurring income and expenses (restructuring costs and severance costs, non recurring
fees, shareholders management fees, separation costs from Rio Tinto (2011), acquisitions and integration costs, Other
compensation and termination benefits, unrealized gains (losses) on change, gains (losses) on disposals, impairment, badwill).
Operating segments are reported in a consistent manner with the internal reporting provided to the management. The
management, who is responsible for allocating resources and assessing performance of the operating segments, has been
identified as the executive committee that takes strategic decisions.
18
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
4.1. SEGMENT REPORTING
Undaudited Acounts
Three months
ended
30
September
2012
Revenue
- Tubes
- F&C + BS
- Group
Total Revenue
Adjusted EBITDA
- Tubes
- F&C + BS
- Group
Total Ajusted EBITDA
Adjusted EBITDA Margin
- Tubes
- F&C + BS
- Group
Total Adjusted EBITDA Margin
Capital Expenditures
- Tubes (*)
- F&C + BS (**)
- Group
Total Capital Expenditures
Capital Expenditures
- Tubes
- F&C + BS
- Group
Total Capital Expenditures
LTM
ended
Nine months
ended
30
30
30
September
September
September
2011
2012
2011
(in KUSD, except for ratios where indicated)
30
September
2012
131 422
102 032
0
233 454
145 576
101 705
0
247 280
414 735
308 867
402
724 004
460 743
315 421
0
776 164
549 547
405 583
402
955 532
15 035
7 894
-2 063
20 865
14 985
7 729
-1 447
21 267
48 541
25 344
-5 337
68 548
49 849
23 190
-4 881
68 158
62 354
26 512
-569
88 297
11,4%
7,7%
10,3%
7,6%
11,7%
8,2%
10,8%
7,4%
11,3%
6,5%
8,9%
8,6%
9,5%
8,8%
9,2%
7 775
6 769
312
14 855
9 127
4 522
-388
13 261
25 352
19 482
1 605
46 439
27 470
8 995
594
37 059
40 404
21 503
3 041
64 948
5,9%
6,6%
6,3%
4,4%
6,1%
6,3%
6,0%
2,9%
7,4%
5,3%
6,4%
5,4%
6,4%
4,8%
6,8%
(*) increased capacity
(**) Of which : (i) Foot print optimization : Indonesia relay-out (1 MUSD), Italy (1.8 MUSD) and (ii) Value reintegration : Brazil
(1.9 MUSD). Excluding those projects, F&C Ytd Capex/sales ratio is 4,8%
19
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
4.2. INFORMATION BY GEOGRAPHY
Unaudited Acounts
Three months
ended
30
September
2012
Revenue
- Europe
- North America
- Emerging countries
- Group
Total Revenue
Ajusted EBITDA
- Europe
- North America
- Emerging countries
- Group
Total Adjusted EBITDA
Ajusted EBITDA Margin
- Europe
- North America
- Emerging countries
- Group
Total Adjusted EBITDA Margin
Capital Expenditures
- Europe
- North America
- Emerging countries
- Group
Total Capital Expenditures
Capital Expenditures
- Europe
- North America
- Emerging countries
- Group
Total Capital Expenditures
116 207
44 211
73 036
0
233 454
LTM
ended
Nine months
ended
30
30
30
September
September
September
2011
2012
2011
(in KUSD, except for ratios where indicated)
131 920
45 820
69 540
0
247 280
370 081
133 891
219 630
402
724 004
585
763
581
063
865
8 717
3 151
10 846
-1 447
21 267
34 460
10 673
28 752
-5 337
68 548
32
10
30
-4
68
607
256
176
881
158
42 151
14 077
32 639
-569
88 297
9,1%
6,2%
13,1%
6,6%
6,9%
15,6%
9,3%
8,0%
13,1%
7,8%
7,7%
13,5%
8,5%
8,0%
11,5%
8,9%
8,6%
9,5%
8,8%
9,2%
7 449
751
6 344
312
14 855
6 606
1 708
4 947
0
13 261
20 464
3 459
20 911
1 605
46 439
22 925
3 659
10 475
31 538
8 584
24 826
37 059
64 948
6,4%
1,7%
8,7%
5,0%
3,7%
7,1%
5,5%
2,6%
9,5%
5,5%
2,7%
4,7%
6,4%
4,9%
8,7%
6,4%
5,4%
6,4%
4,8%
6,8%
10
2
9
-2
20
419 916
133 160
223 088
0
776 164
30
September
2012
494 718
175 521
284 891
402
955 532
20
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
4.3. EBITDA RECONCILIATION
Revenue
Adjusted EBITDA
Depreciation/amortisation
Restructuring and projects costs (See note 5.3)
Others (1)
Operating Profit
At September 30
2012
At September 30
2011
724 004
776 164
68 548
68 158
(21 011)
(28 569)
(314)
(18 492)
(16 456)
(2 548)
18 654
30 661
At September 30
2012
2 392
(2 706)
At September 30
2011
0
(2 787)
239
(314)
(2 548)
(1) The main components of Others are as follows:
Badwill Tex
Sun management fees
Other
Total Others
4.4. EBITDA BRIDGE
Adjusted EBITDA in thousands $
September 30, 2011
68 158
- Fx translation
- Acquisition
- Organic variance
(4 210)
566
4 034
September 30, 2012
68 548
21
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 5
NOTES TO THE INCOME STATEMENT
5.1. REVENUES
Revenue represents sales of goods deriving from the Group’s main activities, net of value added taxes (VAT).
Net sales amounted to USD 724 million for the first nine months of 2012. Compared to 2011, consolidated sales decreased by
6,7 % mainly linked to exchange effect and the loss of an important customer in Brazil.
Revenue in thousands $
September 30, 2011
776 164
- Fx translation
- Acquisition
- Organic variance
(49 494)
23 183
(25 849)
September 30, 2012
724 004
5.2. COST OF SALES
Employee benefit expense
Depreciation and amortisation expense
Other expenses
Total Costs of sales
At 30
September
2012
(159 098)
(19 811)
(413 781)
At 30
September
2011
(156 183)
(16 754)
(459 031)
(592 690)
(631 968)
At 30
September
2012
(242 666)
(80 148)
(44 302)
(15 532)
(31 132)
(413 781)
At 30
September
2011
(265 108)
(90 879)
(53 631)
(16 009)
(33 403)
(459 031)
The variation of the cost of sales is directly linked to the variation of the revenues.
Other expenses can be broken down as follows:
Materials, Raw and Components (resins, film, inks, caps…)
Goods for resale (trading third party)
Other production consumables, energy and utilities
Freight and warehousing
Other costs (repairs, maintenance, services, …)
Total other expenses (from Costs of Sales)
22
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
5.3. RESTRUCTURING AND PROJECT COSTS
Additions to provisions for restructuring costs
Other costs of the period
Total restructuring and projects costs
At 30
September
2012
(608)
(27 961)
At 30
September
2011
(3 292)
(13 164)
(28 569)
(16 456)
At 30 September 2011
Restructuring and project costs include:
Non-recurring costs incurred by the separation from the previous shareholder, Rio Tinto Group. These costs were
mainly IT related costs and all the internal and external costs incurred by the exit of the Rio Tinto Shared Services
(Finance, IT, Human Resources).
Other restructuring costs linked to footprint optimization
At 30 September 2012
The main components of the restructuring and project costs include :
- 19.5 MUSD fees and expenses (including accruals for 17.8MUSD) engaged at the end of September 2012 for the
acquisition of Rexam PC (See Note 3)
- 3 MUSD, integration and acquisition costs of new entities (Tex, Albea Metal)
- 3.5 MUSD relocation costs (Colchester, Suape plants)
- 1 MUSD severances costs (o/w 608 KUSD allowances to provision)
- 1 MUSD projects costs linked to footprint optimization projects (France, Italy)
- 0.5 MUSD other
5.4. INCOME TAX
Income tax rate is 78% because approximately two thirds of the acquisition costs incurred in connection with the Rexam PC
acquisition are not considered to be tax deductible at this stage. The tax structure of the future group is not yet finalized.
Without acquisition costs impact, income tax rate is 39.3%, close to 2011 full year tax rate.
5.5. EARNINGS PER SHARE
Number of shares:
Number of the total shares
Number of shares used to calculate basic earnings per share (Class A shares see 6.6)
Net profit:
Net profit attribuable to equity holders (in thousand $)
Basic earning per share (in USD)
Period ended
September 30
2012
Period ended
September 30
2011
216 287
202 217
202 217
202 217
2 967
16 094
14,67
79,59
23
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 6
NOTES TO THE BALANCE SHEET
6.1. GOODWILL
The goodwill presented in the statement of financial position is related to the acquisition of Betts. This goodwill arose from the
acquisition on June 17th 2010 by Sun Capital through its holding Iona Bidco Limited of the entire share capital of Betts
Acquisition (2009) Limited. As mentioned in § 3.2 of December 2011 notes, this goodwill has been measured at the
predecessor basis value. The variation of the goodwill is only due to the change of the exchange rate.
6.2. TANGIBLE AND INTANGIBLE ASSETS
The increase of the period is mainly linked to the capital expenditures of the period.
The breakdown of the variation is as follows ;
- capital expenditures (machinery and equipments): 44.9 MUSD,
- advance on capital expenditures: 1.5 MUSD,
- depreciation increase: (21.8) MUSD
- scope entry (Tex China): 6.9 MUSD
- others: 1.5 MUSD (foreign exchange variation)
The capital expenditures of the period include 0.6 MUSD for the capitalization of development costs.
6.3. INVENTORIES
Work in progress
Finished goods
Raw materials
Provision / Impairment on Inventories
Total of inventories
At 30 September
2012
18 566
39 461
46 555
(8 953)
At 31 December
2011 (*)
15 521
32 333
45 965
(7 440)
95 628
86 379
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
Amounts are shown above after provisions and elimination of intercompany margin in finished goods inventory.
24
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
6.4. TRADE RECEIVABLES AND OTHER
Trade receivables – gross
Less: Provision for impairment
Total trade receivables – net
Other debtors
Total Trade receivables and Other
At 30 September
2012
144 365
-15 193
At 31 December
2011 (*)
129 442
-14 951
129 173
45 257
174 429
114 554
35 751
150 242
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
6.5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents are comprised of cash in bank accounts and on hand, short-term deposits held on call with banks
and highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk
of changes in value, less bank overdrafts that are repayable on demand.
At 30 September At 31 December
2012
2011 (*)
Cash in bank accounts and on hand
Short-term bank deposits and investments
23 265
1 152
27 009
1 402
Less: Bank overdrafts repayable on demand
24 417
3 387
28 412
974
Net Cash and Cash Equivalents
21 030
27 438
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
Bank overdrafts are included in current borrowings.
6.6. CAPITAL SHARE
The capital of Twist Beauty S.à.r.l. & Partners S.C.A amounts to 216 288 euros and is represented by 1 management share,
202 217 class A shares, 12 320 class B shares with a nominal value of 1 euro and 1 750 class B1 shares with a nominal value of
1 euro, each fully paid.
25
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
6.7. PROVISIONS
Provisions (excluding Pension and OPEB)
Restructuring
Litigations and claims
Others
Total
of which current
of which non current
December 31,
2011
Allowances
Reversal of
provision used
Reversal of
provision not
used
Businees
combinaison
Exchange
impact
Others
September 30,
2012
7 635
9 837
3 538
824
528
321
-4 116
-320
-686
-216
-1 042
-519
0
501
0
-243
-59
64
0
-358
0
3 884
9 087
2 720
(5 123)
(1 777)
(238)
(358)
21 010
7 357
13 653
1 673
501
15 692
3 606
12 086
The decrease of the provisions at September 30, 2012 compared to December 31, 2011 is mainly linked to the consumption
(cash-out) of the restructuring provision (Brazil, France).
6.8. PENSION PROVISION
Compared to December 31, 2011, pension provisions have been adjusted to take account of the decrease of the discount rate,
3% as at September 30, 2012, versus 4.3% as at December 31, 2011.
6.9. BORROWINGS
Changes of borrowings during the period:
At 30 September
2012
Carrying value
At 31 December
2011 (*)
Factoring (Europe)
Assets Based Landing (ABL) term loan (US)
Assets Based Landing (ABL) revolving (US)
PEC/CPEC
Other
Borrowings
37
16
23
2
17
97
988
167
198
592
796
740
24 561
18 426
21 498
2 601
3 926
71 012
of which current
of which non current
69 219
28 521
46 287
24 726
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
The main components of the other borrowings are the following:
- Poland: 3 MUSD, maturity 3 years
- Italy: 5.1 MUSD, maturity 5 years
- India: 4.3 MUSD, maturity 3 years
- UK: 1.3 MUSD, maturity 3 years
26
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
- Bank overdrafts: 3.3 MUSD
The maturity of the borrowings is the following:
At 30 September 2012
ABL & Factoring
PEC/CEPC
Other and term loan US
Total
6.10.
Less than
one year
61 186
45
7 988
69 219
Between
1 and 3
years
0
0
24 542
24 542
Between
3 and 5
years
0
0
1 142
1 142
More than
five years
Total
0
2 547
290
2 836
61 186
2 592
33 961
97 740
OTHER FINANCIAL LIABILITIES
They include finance leases of machinery in the UK, France and Brazil for a total of 3.4 MUSD.
6.11.
TRADE PAYABLES AND OTHER
Trade payables
Other payables
Employee payables
I
Total Trade payables and Other
At 30 September
2012
108 168
At 31 December
2011 (*)
99 033
58 047
46 879
213 094
40 622
45 192
184 847
* Including the fair value adjustments update of Albea Metal acquisition accounting (See note 2.3)
Other payables include the costs related to the Rexam PC acquisition for 17.8 MUSD (See Note 3).
27
ALBÉA
Condensed Unaudited Interim Consolidated Financial Statements for the three and nine month periods
ended September 30, 2012
In thousands of USD
NOTE 7
RELATED PARTIES
Related parties’ transactions include :
- Debt component of PEC and CPEC issued in 2010 and 2011 and associated interest cost with entities controlled by
Sun Capital (see note 6.8 “borrowings” of December 2011 notes);
- Management fees invoiced by Sun Capital Partners Management V, LLC for an amount of 2 605 KUSD.
NOTE 8
SUBSEQUENT EVENTS
The closing of the Rexam PC acquisition is still subject to the approval of the Chinese Antitrust authorities.
28