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HellermannTyton Grp (HTY)

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Monday 02 March, 2015

HellermannTyton Grp

2014 Preliminary Results Announcement

RNS Number : 1679G
HellermannTyton Group PLC
02 March 2015
 

2 March 2015

HellermannTyton Group PLC

"HellermannTyton" or "the Group"

 

Preliminary Results

 

HellermannTyton, the market-leading global manufacturer and provider of high performance and innovative cable management solutions, announces its preliminary results for the year ended 31 December 2014.

 

 

Highlights

 

·    Revenue of €596.9 million, up 13.5% in constant currency (up 10.9% at reported rates) 

 

·   Each geographic segment delivered double digit constant currency revenue growth, and strong revenue growth at reported rates

 

·   Automotive market showed strong growth, up 19.8% in constant currency, particularly in the car market in all regions and in the bus and truck market in USA and China

 

·   Underlying EBITA of €90.4 million, increased by 11.4% in constant currency (up 9.0% at reported rates), and operating profit was €82.9 million (2013: €63.5 million)

 

·   Proposed final dividend of 5.63 cents per share, an increase of 7.6%, resulting in a full year dividend of 8.45 cents

 

·   Order intake up by 13.0% in constant currency with positive book-to-bill ratios in each region 

 

 

Summary financial performance

 

Growth (%)

€ million

2014

2013

Reported

Rates

Constant Currency

Underlying EBITA

 

Operating profit

 

Underlying Basic EPS (cents)

 

Basic EPS (cents)

 

Final dividend per share (cents)

 

90.4

 

82.9

 

26.08

 

23.66

 

5.63

83.0

 

63.5

 

22.81

 

10.60

 

5.23

9.0

 

30.6

 

14.3

 

 

11.4

Note: The Group defines Underlying EBITA as profit before taxation, interest and amortisation (excl. business software amortisation) and certain one-off costs (including reorganisation and termination costs), transaction costs, and non-cash losses or gains on revaluation of intra group loans.

 

 

 

 

 

 

 

 

Steve Salmon, CEO, commented:  "2014 was another year of profitable growth for HellermannTyton against a background of mixed economic conditions.  Encouragingly, this growth is not attributable to any one geography, customer, project win or product launch, and it primarily reflects the increased volume of sales in all of the Group's segments. 

We have continued to be successful in specifying our products on customers' upcoming platforms and our world class marketing activities are delivering a strong pipeline of projects.  We have expanded our global presence and extended our range of cable management products in order to provide comprehensive solutions and increase customer penetration."

   

 

Outlook

 

As global industrial production increases we expect to benefit from this and positive underlying structural growth drivers. We will therefore continue to expand our capacity and footprint during 2015. Our programme of capital investment is designed to ensure we extend our reach and deliver sustainable growth as we concentrate on providing innovative cable management solutions and high levels of service to our customer base.

 

2015 has started well with the Group focusing on delivering growth through broadly based initiatives.

 

 

 

 

 

 

 

FORWARD LOOKING STATEMENTS

Certain statements in this condensed set of consolidated accounts are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

 

 

 

About HellermannTyton

HellermannTyton is the market leading global manufacturer and supplier of high performance and innovative cable management solutions for fastening, identifying, insulating, protecting, organising, routing and connecting components in its Electrical, Automotive and Datacom & Other market segments. The Group operates world class production facilities in 12 primary locations across ten countries offering more than 20,000 products in over 70,000 SKUs and employed a total of 3,808 employees worldwide at 31 December 2014. The Group's global network also comprises 35 sales offices and warehouses.

The Group sells its products and solutions worldwide, with its core geographies the E.U., the United States, Japan, China and Brazil, and a focus on other emerging markets. The Group has, as a result, developed local knowledge of the various geographic markets, which has enabled it to meet the product demands of its global customers and to attract new customers. The Group believes that the high quality, reliability and innovative nature of the Group's products, as well as its strong commitment to customer service, have been key drivers for the Group's growth and recognition as a market leader. In addition, a significant factor in the Group's growth has been its ability to develop its products in response to structural growth drivers in the various markets in which it operates, such as the increasing demand for data and power and access to electricity, increased urbanisation, increased industrial and infrastructure construction, the substitution of metal fixings by plastic fixings, fuel efficiency in vehicles and the growing demand for installation efficiencies in the Group's end-markets.

For further information, please go to  www.hellermanntytoninvestors.com

Enquiries

HellermannTyton at Powerscourt:

+44 (0) 20 7250 1446

Rob Greening

Sophie Moate

 

There will be a presentation and conference call for equity analysts and equity investors at 09:00am London time today.  Please contact Powerscourt on +44 (0) 20 7250 1446 or at [email protected]for access details.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS REVIEW

 

Revenue

Group revenue in the year ended 31 December 2014 was €596.9 million, 13.5% ahead of 2013 in constant currency and 10.9% ahead at reported rates.

Revenue by geographic segment

 

Growth %

€ million

Year ended   31 December

2014

Year ended   31 December

2013

Reported

Rates

Constant Currency

EMEA

313.2

283.4

+10.5%

+11.6%

Americas

148.3

136.1

+8.9%

+12.9%

Asian

135.4

118.5

+14.3%

+19.2%

Total revenue

596.9

538.0

+10.9%

+13.5%

 

Revenue for the EMEA segment was €313.2 million, which is 10.5% higher than 2013 and 11.6% higher in constant currency with increased sales in all market areas.

Revenue for the Americas segment was €148.3 million, which is 8.9% higher than 2013 and 12.9% higher in constant currency reflecting increased sales, particularly in the Automotive market.

Revenue for the Asian segment was €135.4 million, which is 14.3% higher than 2013 and 19.2% higher in constant currency mainly as a result of increased sales in the Automotive market.

Revenue by market

 

Growth %

€ million

Year ended   31 December 2014

Year ended   31 December 2013

Reported

Rates

Constant Currency

Electrical

249.1

 

240.2

+3.7%

+7.6%

Automotive

301.2

254.6

+18.3%

+19.8%

Datacom & Other

46.6

43.2

+7.8%

+9.1%

Total

596.9

538.0

+10.9%

+13.5%

 

Electrical: on a constant currency basis, there was growth in all regions, particularly in EMEA. HellermannTyton continues to benefit from growth in the demand and complexity of electrical content, and the expectations of end-users for high quality, reliable products. The Group focuses on providing innovative solutions for demanding applications and meeting exacting industrial standards and safety requirements.

Automotive: on a constant currency basis there was strong growth in all regions, particularly in the car market. China and USA saw good growth in sales to bus and truck, but there were actually  lower truck build rates in EMEA, Brazil and China. The structural growth drivers for HellermannTyton in this market include: an increase in cable and wire content; the substitution of metal by plastic; increasing safety standards; and new and more innovative vehicle platforms.

Datacom & Other: Datacom saw growth in EMEA, particularly in broadband products, and Asian but with lower sales in the Americas.

Cost of sales

The Group's cost of sales for the year was €343.2 million (2013: €313.2 million), representing an increase of €30.0 million, or 9.6%. This increase was principally due to the increased sales.

The manufacturing margin (gross profit before one-off costs) for the year was 42.5% compared to 42.4% in 2013.

Selling and distribution costs

Selling and distribution costs incurred for the year were €133.2 million (2013: €119.4 million), representing an increase of €13.8 million, or 11.5%. The costs represent 22.3% of revenue compared to 22.2% in 2013, reflecting a slight increase in distribution costs as a proportion of revenue mainly due to increased use of third party logistics.

 

Administrative expenses

The Group's administrative expenses for the year were €37.6 million (2013: €42.7 million). The reduction is due to a €8.5 million non-cash movement in the revaluation of Intra-Group financing loans, as a result of a gain of €0.9 million in 2014 compared to a loss of €7.6 million in 2013, offset by an increase in costs of €3.4 million.

 

Underlying operating profit by geographic segment

 

 

Growth %

€ million

Year ended   31 December

2014

Year ended   31 December

2013

Reported

Rates

EMEA

32.5

32.2

+0.8%

Americas

18.6

17.0

+9.2%

Asian

32.6

27.0

+20.9%

Total

83.6

76.2

+9.8%

 

 

The growth in underlying operating profit in EMEA, compared to 2013 has been impacted by the higher level of corporate costs in 2014,  the Group's first full year as a listed entity, and also the cost of increased use of third party logistics. The underlying operating profit for Americas has increased in line with sales and the Asian underlying operating profit has benefited from production efficiencies with the increase in sales volumes.

 

Finance costs - net

 

Net finance costs were €10.8 million (2013: €28.4 million). The reduction is primarily due to lower interest expense on the revolving credit facility compared to the senior secured bonds it replaced,  the 2013 results also included the accelerated write down of the bond transaction costs of €13.0 million.

 

Taxation

 

The tax charge for the year was €21.3 million (2013: €12.7 million), representing an effective tax rate on underlying profit for the year of 29.5% (2013: 28.5%).

 

Cash flows

 

 

Year ended 31 December

€ million

2014

2013

Cash flows:

 

 

from operating activities

66.5

43.9

used in investing activities

(51.0)

(36.7)

(used in)/from financing activities

(40.5)

26.9

Net cash movement

(25.0)

34.1

 

 

Net cash generated from operating activities

 

Cash flows from operating activities for 2014 were €22.6 million higher than 2013 due to €23.7 million additional cash flow from improved trading and a reduction in interest payments of €4.8 million, offset by €5.9 million of higher taxation payments.

 

Net cash used in investing activities

 

Capital expenditure in 2014 of €57.1 million comprised facility expansion and growth and maintenance as follows:

 

Facility expansion project capex of €11.4 million, which included: preparations for a new logistics centre in Germany; construction work for the expansion of the Good Hope Road facility in Milwaukee; and construction of the new mezzanine in the logistics facility in Manchester.

 

Growth and maintenance capex of €45.7 million, which included: new and replacement moulding machines, automation and other production equipment in our manufacturing facilities; new and replacement moulds; set up of equipment in the rented facility in Poland;  and ERP upgrade projects in Germany, USA and UK.

 

Net cash generated from financing activities

 

Net cash used in financing activities was €40.5 million compared to €26.9 million generated in 2013. The net outflow in 2014 reflects the repayment of the senior secured bonds in March 2014, including associated costs, by using €25.6 million of cash and drawing down €200.0 million of the new five year revolving credit facility. The cash generated in 2013 included the net proceeds from the IPO of €29.5 million.

 

Liquidity and funding

 

On 26 February 2014, the Company signed a new €230.0 million revolving credit facility at Euribor +1.75% for a term of five years. The new facility replaced the Group's €220.0 million senior secured bonds (Euribor +5.125%) and an undrawn €80.0 million revolving credit facility. On 28 March 2014 €200.0 million of the new facility was drawn down to repay the bonds with the balance of €20.0 million repaid using cash.

 

Cash and cash equivalents at 31 December 2014 were €57.4 million (2013: €80.0 million).

 

Net debt at 31 December 2014 was €161.1 million (2013: €150.6 million) with, at that date, undrawn committed facilities of €30.0 million available from the €230.0 million revolving credit facility.

 

The ratio of net debt to underlying EBITDA as at 31 December 2014 was 1.4x (2013: 1.4x).

 

Earnings per share

 

Underlying basic earnings per share from operations for 2014 were 26.08 cents (2013: 22.81 cents). Reported basic earnings per share were 23.66 cents and reported diluted earnings per share were 22.99 cents.

 

Dividend

 

The Board has proposed a final dividend of 5.63 cents per share which will result in a payment of €12.1 million. The final dividend will be paid subject to approval by shareholders at the Annual General Meeting on 29 April 2015. The ex-dividend date is 19 March 2015 and  all shareholders on the register at the close of business on 20 March 2015(record date) will receive the dividend. Including the interim dividend of 2.82 cents, the full year dividend will be 8.45 cents (2013: 6.55 cents).

 

Exchange rates

 

Translation rates used in the reported results:

 

Rates to Euro

2013 average

2014 average

2014 closing

GBP

0.85

0.81

0.78

USD

1.33

1.33

1.21

JPY

129.80

140.34

145.08

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The Group's risk register is built up from contributions from the manufacturing and associated sales operations.  There has been a top down review by members of the Executive Committee and Board, facilitated by Internal Audit.  Risk registers are maintained and periodically updated.  As well as identifying the headline risks, emerging risks are also identified and members of management are assigned to monitor and oversee actions taken to mitigate them.

 

The Board has overall responsibility for ensuring that our risks are managed appropriately and, either directly or through the Audit Committee, reviews the effectiveness of the Group's risk management processes and other internal controls.  Internal Audit provides the Audit Committee with a quarterly update of risk management activity and the risk register is a standing item in business performance reviews.

 

Below, we have selected from the Risk Register those items we currently consider to have the greatest potential impact on the Group. The order in which they are presented is not significant.

 

 

Risk Description and

Potential Impact

Mitigating Activities

Reputation

 

Inferior product quality, poor service or damage caused by the Group's products could result in new or existing customers being less willing to do business with HellermannTyton.

Close scrutiny of product quality and customer scorecards

 

On-time delivery performance

 

Customer Relationships

 

If a number of customer relationships were terminated or the number of products delivered reduced within a short period of time, the Group's results of operations and prospects could be materially adversely affected.

Close monitoring and review of strategy and customer activity

 

Review of market activity

 

Investment in sales and marketing

Lower priced competitor

 

If the Group is unable to be competitive on prices, it may not be able to retain existing customers or win new customers.

Close monitoring of competitors'  pricing

 

Close analysis  of new product development programme

 

Initiatives to maximise product cost-effectiveness

Retention, development and incentivisation of key employees

 

Business operations could be adversely affected by failure to attract, retain, develop and incentivise key personnel in sales, marketing, product development, operations, finance and management.

Alignment of objectives, incentives and remuneration

 

Maintenance of positive work environment

 

Encouragement of initiative and innovation

Automotive market demand

 

A substantial deterioration in vehicle production such as that experienced in 2008 and 2009 could have a significant negative effect on the Group's sales and results of operations.

 

Close monitoring of market and customer activity

 

Broaden product range and customer base

Innovation and new product development

 

If the Group fails to deliver complex and innovative solutions as well as to anticipate technological trends, it could lose market share and suffer adverse effects on future growth.

Diversified product range

 

Investment in new product development and high calibre employees

 

Close monitoring of product development programme and milestones

 

Third-party manufacturers

 

The Group's production or distribution could be adversely affected if there are any significant adverse changes with respect to moulding equipment suppliers or suppliers of bought-in products.

Maintain multiple sources of  supply and strong supplier relationships

Raw materials supply

 

If the Group faces any restrictions in its sourcing of raw materials, it could face significant disruptions to production or supply of goods to its customers.

Maintain multiple suppliers and manage volume limits from each supplier as well as safety stock and source from other  Group sites

Foreign exchange movements

 

Significant adverse exchange movements could impact negatively on the profitability of the Group.

Close monitoring of foreign exchange exposures and hedging of exposures with forward exchange contracts

 

 

GOING CONCERN

 

The Directors have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, based upon:

·      significant cash and cash equivalents at the year-end;

·     the €230.0 million revolving credit facility arranged during the year, of which €30 million is undrawn, which expires on 26 February 2019;

·      a history of cash generation and covenant compliance; and

·      good visibility in near-term forecasts and budgets, taking account of capital expenditure plans and reasonably possible changes in trading performance, indicates that we expect to be able to operate within the level of our banking facilities.

 

For these reasons the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

 

 

RESPONSIBILITY STATEMENT

 

The Directors confirm that to the best of their knowledge:

 

·     The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities and financial position and profit of the company and the undertakings included in the consolidation taken as a whole; and

 

·     This announcement includes a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

 

On behalf of the Board

 

Steve Salmon

 

Chief Executive

 

Tim Jones

 

Chief Financial Officer

 

27 February 2015

 

 

Underlying Results

 

The following tables reconcile the underlying results to operating profit and basic earnings per share:

 

 

 

Year ended 31 December

€ million

2014

2013

Underlying EBITDA

115.7

104.8

Depreciation (incl. business software amortisation)

(25.3)

(21.8)

Underlying EBITA

90.4

83.0

Amortisation (excl. business software amortisation)

(6.8)

(6.8)

Underlying Operating profit

83.6

76.2

One-off costs

(1.6)

(3.7)

Gain on disposal of asset

1.2

0.9

Transaction costs

(1.2)

(2.3)

Non-cash gain/(loss) on revaluation of intra-group loans

0.9

(7.6)

Operating profit

82.9

63.5

 

 

 

 

Year ended 31 December

Cents

2014

2013

Underlying basic earnings per share

26.08

22.81

Amortisation of acquired intangible assets

(2.27)

(2.35)

Transaction costs

(0.41)

(5.28)

Non-cash gain/(loss) on revaluation of intra-group loans

0.43

(3.57)

One-off costs including gain on disposal of asset

(0.17)

(1.01)

Basic earnings per share

23.66

10.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group Income statement for the year ended 31 December 2014

 

 

By function of expense

Note

2014
€'000

2013
€'000

Revenue

3

596,866

537,989

Cost of sales


(343,159)

(313,207)

Gross profit


253,707

224,782





Selling and distribution costs


(133,184)

(119,422)

Administrative expenses


(37,545)

(42,718)

Gain on asset held for sale


-

902

Operating profit


82,978

63,544





Finance income

9

847

1,453

Finance costs

9

(11,619)

(29,887)

Finance costs - net

9

(10,772)

(28,434)

Profit before tax


72,206

35,110





Tax expense

10

(21,251)

(12,690)

Profit for the year


50,955

22,420





Earnings per share


cents

cents

Basic

4

23.66

10.60

Diluted

4

22.99

10.41

 

 

 

Group statement of comprehensive income

 

 

 


2014
€'000

2013
€'000

Profit for the year


50,955

22,420

Other comprehensive income/(expense):




Items that will not be reclassified to profit or loss




Actuarial (loss)/gain on post-employment benefit obligations


(301)

1,434

Deferred tax on actuarial loss/gain


87

(413)

Items that may be reclassified subsequently to profit or loss




Currency translation differences


11,551

(32,944)

Total other comprehensive income/(expense)


11,337

(31,923)

Total comprehensive income/(expense) for the year


62,292

(9,503)

 

The notes below are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

Group balance sheet as at 31 December 2014


Note

2014
€'000

2013
€'000

Non-current assets




Intangible assets

7

242,662

239,814

Property, plant and equipment

6

191,304

159,044

Deferred tax assets


5,780

5,792

Retirement benefit surplus


1,197

1,103

Other receivables


3,245

5,191



444,188

410,944

Current assets




Inventories


101,658

83,243

Trade and other receivables


140,960

118,225

Derivative financial instruments


85

1,012

Cash and cash equivalents (excluding bank overdrafts)


57,403

80,039



300,106

282,519

Total assets


744,294

693,463





Equity attributable to owners of the Parent Company




Ordinary shares


2,154

2,154

Capital redemption reserve


100

100

Treasury shares


(169)

-

Translation reserve


(699)

(12,250)

Other reserves


(35,772)

(35,772)

Retained earnings


424,848

387,072

Total equity


390,462

341,304





Non‑current liabilities




Trade and other payables


793

686

Borrowings

8

214,742

229,587

Deferred tax liabilities


24,548

23,632

Retirement benefit obligations


2,721

2,542



242,804

256,447

Current liabilities




Trade and other payables


102,338

88,164

Current tax liabilities


5,295

5,029

Borrowings

8

1,074

979

Derivative financial instruments


921

137

Provisions for other liabilities and charges


1,400

1,403



111,028

95,712

Total liabilities


353,832

352,159

Total equity and liabilities


744,294

693,463

The notes below are an integral part of these consolidated financial statements.

The financial statements were approved by the Board of Directors on 27  February 2015 and were signed on its behalf by:

David Newlands                                                                                                                                                                                    Tim Jones

Chairman                                                                                                                            Chief Financial Officer

Group statement of changes in equity for the year ended 31 December 2014


Note

Ordinary shares
€'000

Share premium
€'000

Preference shares
€'000

Treasury

shares
€'000

Capital redemption reserve
€'000

Translation reserve
€'000

Other
reserves
€'000

Retained earnings
€'000

Total
€'000

Balance at 1 January 2013


10,000

4,700

-

-

-

20,694

322,652

(39,573)

318,473

Comprehensive income











Profit for the year


-

-

-

-

-

-

-

22,420

22,420

Other comprehensive income/(loss)











Actuarial gain on post‑employment benefit obligations


-

-

-

-

-

-

-

1,434

1,434

Deferred tax on actuarial gain

-

-

-

-

-

-

-

(413)

(413)

Currency translation differences


-

-

-

-

-

(32,944)

-

-

(32,944)

Total comprehensive income/(loss)


-

-

-

-

-

(32,944)

-

23,441

(9,503)

Change in Group structure


(8,000)

366,424

100

-

-

-

(358,424)

-

100

Redemption of preference shares


-

-

(100)

-

100

-

-

(100)

(100)

Issue of new shares on IPO


153

33,128

-

-

-

-

-

-

33,281

Capital reduction


-

(404,252)

-

-

-

-

-

404,252

-

Issue of shares for free share scheme


1

-

-

-

-

-

-

-

1

Equity settled share
based payments


-

-

-

-

-

-

-

1,645

1,645

Tax credit relating to equity settled share
based payments


-

-

-

-

-

-

-

242

242

Dividend payments


-

-

-

-

-

-

-

(2,835)

(2,835)

Balance at 1 January 2014


2,154

-

-

-

100

(12,250)

(35,772)

387,072

341,304

Comprehensive income











Profit for the year


-

-

-

-

-

-

-

50,955

50,955

Other comprehensive income/(loss)










Actuarial loss on post‑employment benefit obligations


-

-

-

-

-

-

-

(301)

(301)

Deferred tax on actuarial loss

-

-

-

-

-

-

-

87

87

Currency translation differences


-

-

-

-

-

11,551

-

-

11,551

Total comprehensive income


-

-

-

-

-

11,551

-

50,741

62,292

Equity settled share
based payments


-

-

-

(169)

-

-

-

3,481

3,312

Tax credit relating to equity settled share
based payments


-

-

-

-

-

-

-

716

716

Dividend payments

5

-

-

-

-

-

-

-

(17,162)

(17,162)

Balance at 31 December 2014

2,154

-

-

(169)

100

(699)

(35,772)

424,848

390,462












The notes below are an integral part of these consolidated financial statements.

 

 

Group statement of cash flows for the year ended 31 December 2014

 


Note

2014
€'000

2013
€'000

Cash flows from operating activities




Cash generated from operations


96,806

73,122

Interest paid


(8,446)

(13,318)

Tax paid


(21,819)

(15,904)

Net cash generated from operating activities


66,541

43,900





Cash flows from investing activities




Purchase of property, plant and equipment (PPE) and business software

6,7

(57,144)

(40,746)

Proceeds from sale of asset held for sale


-

2,885

Proceeds from sale of PPE


5,224

744

Interest received


841

441

Net cash used in investing activities


(51,079)

(36,676)





Cash flows from financing activities




Net proceeds from issuance of ordinary shares


-

29,479

Dividends paid

5

(17,162)

(2,835)

Proceeds from borrowings


204,105

240

Payment of fees relating to new borrowings


(4,019)

-

Repayments of senior secured notes


(223,413)

-

Net cash (used in)/generated from  financing activities


(40,489)

26,884





Net (decrease)/increase in cash, cash equivalents and bank overdrafts


(25,027)

34,108

Cash, cash equivalents and bank overdrafts at beginning of the year


80,039

50,138

Exchange gain/( loss) on cash, cash equivalents and bank overdrafts


2,391

(4,207)





Cash, cash equivalents and bank overdrafts at end of the year


57,403

80,039

The notes below are an integral part of these consolidated financial statements.

 

 

Notes to the consolidated financial statements for the year ended 31 December 2014

 

1 General information

HellermannTyton Group PLC ("the Company") and its subsidiaries (together "the Group") is a leading global manufacturer and distributor of high performance and innovative cable management solutions for fastening, identifying, insulating, protecting, organising, routing and connecting components in its Electrical, Automotive and Datacom & Other market segments.

The Group has direct sales operations in 35 countries worldwide supported by strategically positioned distribution, design and manufacturing facilities, with 12 manufacturing facilities located in ten countries.

The Company is incorporated and domiciled in the UK and its registered office is Griffin House, 135 High Street, Crawley, West Sussex RH10 1DQ.

These Group consolidated financial statements, for the year ended 31 December 2014, were authorised for issue by the Board on 27 February 2015.

2 Summary of significant accounting policies

The Group's principal accounting policies adopted in the preparation of the financial statements are set out below.

Basis of preparation

The Company was incorporated on 19 February 2013. To facilitate the admission to the market, the entire issued share capital of HellermannTyton Alpha S.à.r.l. was acquired by the Company. Prior to this restructuring, the business was conducted solely through HellermannTyton Alpha S.à.r.l. and its subsidiaries.

The consolidated financial statements have been prepared as a continuation of the HellermannTyton Alpha S.à.r.l. business with an adjustment to reflect the share capital of HellermannTyton Group PLC.

This consolidated financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the International Financial Reporting Standards Interpretations Committee's (IFRS IC) interpretations, and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial information has been prepared under the historical cost convention except for certain financial assets and liabilities (including derivative instruments) that have been measured at fair value through profit or loss.

This consolidated financial information does not constitute statutory accounts as defined in Sections 434 of the Companies Act 2006. The financial information has been extracted from the financial statements for the year ended 31 December 2014, which have been approved by the Board of Directors and on which the auditors have reported without qualification. The financial statements will be delivered to the Registrar of Companies after the Annual General Meeting.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

Going concern

The Directors have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, based upon:

·  significant cash and cash equivalents at the year end;

·  the €230 million revolving credit facility arranged during the year, of which €30 million is undrawn, which expires on 26 February 2019;

·  a history of cash generation and covenant compliance; and

·  good visibility in near-term forecasts and budgets, taking account of capital expenditure plans and reasonably possible changes in trading performance, indicates that we expect to be able to operate within the level of our refinanced banking facilities.

For these reasons, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries up to 31 December 2014. The financial statements of subsidiaries are prepared for the same reporting period as the Parent Company, using consistent accounting policies.

Results of subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. All intra‑Group transactions, balances, income and expenses are eliminated on consolidation.

3 Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive who makes strategic decisions.

Sales between segments are carried out on an arm's length basis and it is considered that sale of goods is the only material revenue stream for consideration.

The segment results for the year ended 31 December 2014 are as follows:


EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Total revenue

435,183

160,094

163,956

759,233

Intra-segment revenue

(89,293)

(3,648)

(9,469)

(102,410)

Total segment revenue

345,890

156,446

154,487

656,823

Inter-segment revenue

(32,680)

(8,194)

(19,083)

(59,957)

Revenue from external customers

313,210

148,252

135,404

596,866

Underlying operating profit/segment result

32,508

18,561

32,595

83,664

 

A reconciliation of the underlying operating profit to the operating profit as per the income statement is included after the Business Review. Finance costs have not been allocated to segments as operating performance is assessed by the chief operating decision maker at an operating profit level. Some of these finance costs are incurred centrally and to allocate them to segments would not assist in performance assessment. Central costs of €5,810k (2013: € 4,269k) have not been allocated and are included within the EMEA segment, as this is where the costs are geographically incurred.

Other segment items included in the income statement are as follows:


Note

EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Depreciation

6

12,422

6,676

5,076

24,174

Amortisation

7

5,238

647

2,026

7,911

The segment results for the year ended 31 December 2013 are as follows:


EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Total revenue

393,907

147,855

144,378

686,140

Intra-segment revenue

(80,633)

(4,247)

(7,554)

(92,434)

Total segment revenue

313,274

143,608

136,824

593,706

Inter-segment revenue

(29,866)

(7,484)

(18,367)

(55,717)

Revenue from external customers

283,408

136,124

118,457

537,989

Underlying operating profit/segment result

32,233

16,994

26,943

76,170

 

Other segment items included in the income statement are as follows:


Note

EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Depreciation

6

11,498

5,706

4,681

21,885

Amortisation

7

4,405

637

1,748

6,790

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, trade and other receivables and cash and cash equivalents. Segment liabilities comprise operating liabilities, taxation and borrowings.  Borrowings are included, even though finance costs are not allocated to segments, as borrowings are held directly by the respective segments.

Capital expenditure comprises additions to property, plant and equipment (Note 7).

The Group is domiciled in the UK. The result of its revenue from external customers in the UK is €39,473,000  (2013: €36,630,000), and the total of revenue from external customers from other countries is €557,393,000 (2013: €501,359,000).

The total of non-current assets other than financial instruments and deferred tax assets (there are no employment benefit assets and rights arising under insurance contracts) located in the UK is €52,638,000 (2013: €42,093,000), and the total of such non-current assets located in other countries is €385,770,000 (2013: €366,962,000).

The segment assets and liabilities at 31 December 2014 and capital expenditure for the year then ended are as follows:


Note

EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Total assets


417,365

132,510

194,419

744,294

Total liabilities


223,161

77,238

53,433

353,832

Capital expenditure

6,7

26,542

20,425

10,177

57,144

 

The segment assets and liabilities at 31 December 2013 and capital expenditure for the year then ended are as follows:


Note

EMEA
€'000

Americas
€'000

Asian
€'000

Group
€'000

Total assets


412,291

102,741

178,431

693,463

Total liabilities


299,016

22,137

31,006

352,159

Capital expenditure 

6,7

21,085

12,116

7,545

40,746

4 Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit for the year by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.


2014
€'000

2013
€'000

Profit for the year

50,955

22,420

Weighted average number of shares in issue - basic

215,396,442

211,481,056

Dilutive potential of employee share incentives

6,238,307

3,868,497

Weighted average number of shares in issue - diluted

221,634,749

215,349,553

Earnings per share

cents

cents

Basic

23.66

10.60

Diluted

22.99

10.41

The weighted average number of shares for the year ended 31 December 2013 is based on the share capital of the Company immediately prior to the primary share offer made on admission to the market.

The Group is disclosing underlying EPS in order to enable more consistent period-on-period comparisons of its performance, as follows:


Note

2014
€'000

2013
€'000

Profit for the year


50,955

22,420

Amortisation of acquired intangible assets


6,790

6,790

Transaction costs


1,234

15,314

Non-cash (gain)/loss on revaluation of intra-group loans


(934)

7,542

Gain on disposal of asset


(1,193)

(902)

One-off costs

11

1,579

3,659

Tax effect on the above items


(2,264)

(6,582)

Underlying profit for the year


56,167

48,241

Underlying earnings per share


cents

cents

Basic


26.08

22.81

Diluted


25.34

22.40

5 Dividends

Amounts recognised as distributions to owners of the Parent Company in the year

2014
€'000

2013
€'000

Final dividend for the year ended 31 December 2013 of 5.23 cents per share (2013: nil)

11,312

-

Interim dividend for the year ended 31 December 2014 of 2.82 cents per share (2013: 1.32 cents)

5,850

2,835


17,162

2,835

The proposed final dividend for the year ended 31 December 2014 of 5.63 cents per share (2013: 5.23 cents), amounting to €12,131,000 (2013: €11,312,000), is subject to approval by shareholders at the AGM and has not been included as a liability in these financial statements.

6 Property, plant and equipment



Land and
buildings
€'000

Vehicles and
machinery
€'000

Furniture,
fittings and
equipment
€'000

Total
€'000

At 1 January 2013






Cost


63,281

116,339

35,329

214,949

Accumulated depreciation


(6,050)

(40,225)

(19,504)

(65,779)

Net book amount


57,231

76,114

15,825

149,170

Year ended 31 December 2013






Opening net book amount


57,231

76,114

15,825

149,170

Exchange differences


(3,053)

(5,044)

(555)

(8,652)

Additions


4,348

29,873

6,525

40,746

Disposals


(12)

(295)

(28)

(335)

Depreciation charge


(1,492)

(15,950)

(4,443)

(21,885)

Reclassification


(5,981)

(320)

6,301

-

Closing net book amount


51,041

84,378

23,625

159,044

At 31 December 2013






Cost


58,566

132,082

46,157

236,805

Accumulated depreciation


(7,525)

(47,704)

(22,532)

(77,761)

Net book amount


51,041

84,378

23,625

159,044

Year ended 31 December 2014






Opening net book amount


51,041

84,378

23,625

159,044

Exchange differences


2,159

6,886

933

9,978

Additions


2,992

48,588

1,026

52,606

Disposals


(3,350)

(232)

(18)

(3,600)

Depreciation charge


(1,514)

(18,539)

(4,121)

(24,174)

Reclassification


414

(5,061)

2,097

(2,550)

Closing net book amount


51,742

116,020

23,542

191,304

At 31 December 2014






Cost


59,585

175,391

32,646

267,622

Accumulated depreciation


(7,843)

(59,371)

(9,104)

(76,318)

Net book amount


51,742

116,020

23,542

191,304

Depreciation expense of €20,408,000 (2013: €17,458,000) has been charged in cost of goods sold, €3,076,000 (2013: €2,972,000) in selling and distribution costs and €690,000 (2013: €1,455,000) in administrative expenses.

Land and buildings includes the following amounts where the Group is a lessee under a finance lease:


2014
€'000

2013
€'000

Net book value

12,157

12,384

The Group leases vehicles and machinery and furniture, fittings and equipment under non-cancellable finance lease agreements. The lease terms are between three and ten years, and ownership of the assets lies within the Group. The net book amount of these assets held under finance lease is €271,000 (2013: €260,000).

Borrowings are secured against the property, plant and equipment of the Group (see Note 8).

7 Intangible assets

 

Note

Goodwill
€'000

Brands and trademarks
€'000

Business software

€'000

Others
€'000

Total
€'000

At 1 January 2013

 

 

 

 

Cost

 

198,134

48,143

-

77,613

323,890

Accumulated amortisation

 

-

(16,130)

-

(37,924)

(54,054)

Net book amount

 

198,134

32,013

-

39,689

269,836

Year ended 31 December 2013

 

 

 

 

Opening net book amount

 

198,134

32,013

-

269,836

Exchange differences

 

(17,223)

(2,295)

-

(3,714)

(23,232)

Amortisation charge

18

-

(2,346)

-

(4,444)

(6,790)

Closing net book amount

 

180,911

27,372

-

31,531

239,814

At 31 December 2013

 

 

 

 

 

Cost

 

180,911

45,848

-

73,899

300,658

Accumulated amortisation

 

-

(18,476)

-

(42,368)

(60,844)

Net book amount

 

180,911

27,372

-

31,531

239,814

Year ended 31 December 2014

 

 

 

 

 

 

Opening net book amount

 

180,911

27,372

-

31,531

239,814

Reclassification

 

-

-

2,550

-

2,550

Exchange differences

 

2,278

894

101

398

3,671

Additions

 

-

-

4,538

-

4,538

Amortisation charge

18

-

(2,346)

(1,121)

(4,444)

(7,911)

Closing net book amount

 

183,189

25,920

6,068

27,485

242,662

At 31 December 2014

 

 

 

 

 

 

Cost

 

183,189

46,742

24,554

74,297

328,782

Accumulated amortisation

 

-

(20,822)

(18,486)

(46,812)

(86,120)

Net book amount

 

183,189

25,920

6,068

27,485

242,662

Other intangible assets are comprised of acquired customer relationships, patents, the HellermannTyton product database and the HellermannTyton catalogue.

Goodwill represents the excess of cost over the fair value of assets acquired.

8 Borrowings


2014
€'000

2013
€'000

Non‑current



Bank borrowings

203,525

-

Secured notes

-

222,200

Other loans

7,287

2,586

Finance lease obligations

3,930

4,801


214,742

229,587

Current



Other loans

72

-

Finance lease obligations

1,002

979


1,074

979

Total borrowings

215,816

230,566

 

Bank borrowings

On 26 February 2014 a new five-year €230 million revolving credit facility was signed, of which €200 million was drawn down on 28 March 2014 and, together with €20 million of existing cash reserves, was utilised to repay the secured notes. The facility was drawn down in Euros, GBP, USD and JPY into the respective local businesses, and consequently the gross borrowings are retranslated at the closing exchange rates and will not necessarily total €200 million. Interest on the revolving credit facility is payable quarterly in arrears at a rate of 1.75% above the applicable LIBOR in the territory where the borrowings are drawn down, for a term of five years.

Transaction costs in relation to the instrument of €3,039,000 have been capitalised and are being amortised as finance costs over five years. The balance of capitalised transaction costs is shown in the table below:


2014
€'000

2013
€'000

Gross bank borrowings

206,172

-

Capitalised transaction costs

(2,647)

-

Net bank borrowings

203,525

-

 

As a result of the new arrangements the Group has an undrawn revolving credit facility of €30 million at 31 December 2014 (31 December 2013: €80 million).

Secured notes

The secured notes were repaid in full on 28 March 2014. As at 31 December 2013 therefore, the liability recognised in respect of the secured notes included an early repayment fee of 1%. Interest on the notes was payable quarterly in arrears at a rate of 5.125% above EURIBOR. Cross currency interest rate swaps which had been taken out to hedge the currency fluctuations and interest costs were redeemed at that time.

Other loans

Other loans relate to loans against two properties, and are repayable within seven years.

The carrying amounts and fair value of the non‑current borrowings are as follows:


Carrying amount

Fair value


2014
€'000

2013
€'000

2014
€'000

2013
€'000

Non-current





Bank borrowings

203,525

-

200,459

-

Secured notes

-

222,200

-

222,200

Other loans

7,287

2,586

7,113

2,410

Finance lease obligations

3,930

4,801

4,069

4,614

Total

214,742

229,587

211,641

229,224

The fair values are based on cash flows discounted using a rate based on the average borrowing rate of 2.2% (2013: 5.3%).

The fair value of current borrowings does not differ significantly from their carrying value, as the impact of discounting is not significant.

The carrying amounts of the Group's borrowings are denominated in the following currencies:

Currency

2014
€'000

2013
€'000

GBP

19,840

-

Euro

128,500

228,374

US Dollar

49,060

1,892

Japanese Yen

18,071

-

Other currencies

345

300

Total

215,816

230,566

9 Finance income and costs

 

2014
€'000

2013
€'000

Bank borrowings and related swaps

(5,995)

(1,969)

Secured notes

(3,211)

(11,891)

Accelerated write-down of transaction fees and early redemption fee

(1,027)

(12,987)

Net loss on termination of cross currency interest rate swaps

(664)

-

Parent Company loan

-

(74)

Ordinary shares - Class A‑II

-

(34)

Preference shares

-

(4)

Amortisation of transaction fees

(466)

(2,697)

Bank loans and overdrafts

(9)

(11)

Finance lease charges

(247)

(220)

Finance costs

(11,619)

(29,887)

Fair value gains on financial instruments:



Forward exchange contracts

85

-

Cross currency interest rate swaps

-

1,012

Interest receivable on short-term bank deposits

762

441

Finance income

847

1,453

Net finance costs

(10,772)

(28,434)

10 Tax expense


2014
€'000

2013
€'000

Current tax

21,018

18,558

Adjustments in respect of prior years

92

420

Total current tax

21,110

18,978

Deferred tax



Origination and reversal of temporary differences

25

(5,508)

Impact of change in tax rates

(7)

41

Adjustments in respect of prior years

123

(821)

Total deferred tax

141

(6,288)

Tax expense

21,251

12,690

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the Parent Company tax rate applicable to profits of the consolidated entities as follows:


2014
€'000

2013
€'000

Profit before tax

72,206

35,110

Tax calculated at Parent Company rate of tax: 21.5% (2013: 23.25%)

15,524

8,163

Permanent differences

693

674

Current year losses not recognised in period

28

2,407

Non-deductible interest

252

533

Other temporary differences unrecognised

(404)

283

Adjustment in respect of prior periods

215

(401)

Overseas tax rate differences

5,145

1,944

Utilisation of previously unrecognised tax losses

(202)

(913)

Tax expense

21,251

12,690

The effective rate of taxation applied to underlying profit before tax for the year is 29.5% (2013: 28.5%). The increase in the effective rate is primarily due to proportionally more profits in the higher tax rate territories. The following table shows a reconciliation of the tax expense on underlying profit (see Note 10) to the actual tax expense.


2014
€'000

2013
 €'000

Tax expense on underlying profit before tax at effective rate

23,515

19,272

Tax credit on amortisation of intangibles

(1,905)

(1,815)

Tax credit on transaction costs

(355)

(4,148)

Tax credit on one‑off costs

(466)

(619)

Tax charge on gain

462

-

Tax expense

21,251

12,690

 

11 Underlying profit before tax

The underlying profit before tax is calculated as below:


2014
€'000

2013
€'000

Profit before tax

72,206

Amortisation of acquired intangible assets (excludes business software amortisation)

6,790

Transaction costs

1,234

Non‑cash (gain)/loss on revaluation of intra‑group loans

(934)

One‑off costs

1,579

3,659

Gain on disposal of asset

(1,193)

(902)

Underlying profit before tax

79,682

67,513

One‑off costs in the year to 31 December 2014 principally represent costs related to facility reorganisations in Japan and ERP implementation costs in Germany. One‑off costs in the year to 31 December 2013 principally represent costs related to facility reorganisation in the US and termination costs in Europe.

The gain on disposal of asset in the year to 31 December 2014 relates to the sale of a property in the USA. In the year to 31 December 2013 the gain on disposal of asset relates to the sale of a property in the UK.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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