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HellermannTyton Grp (HTY)

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Thursday 29 August, 2013

HellermannTyton Grp

Half Yearly Report

RNS Number : 6836M
HellermannTyton Group PLC
29 August 2013
 



 

29 August 2013

HellermannTyton Group PLC

"HellermannTyton" or "the Group"

 

Interim Results

 

HellermannTyton, the market-leading global manufacturer and provider of high performance and innovative cable management solutions, announces its interim results for the six months ended 30 June 2013.

 

Highlights

 

·     Revenue of €267.5 million up 6.8% in constant currency (up 2.5% at reported rates)

 

·     Strong revenue growth in the Americas and Asian segments (up 9.9% and 11.5% respectively in constant currency)

 

·     Automotive market showed strong growth (up 12.4% in constant currency), mainly in the car market in  Americas (USA) and Asian (China and South Korea)

 

·     Underlying EBITA of €42.1 million up 7.9% in constant currency (up 3.2% at reported rates) and stable margins resulted in operating profit of €28.8 million

 

·     Strong balance sheet position with cash of €71.7 million and an undrawn €80.0 million committed facility

 

·     Interim dividend of 1.32 cents per share - in line with the policy set out in the prospectus (pro-rated for the period from admission)

 

·     Order intake up by 9.0% in constant currency with positive book-to-bill ratios in each region

 

Summary financial performance

 

Growth (%)

€ millions

H1 2013

H1 2012

Reported

Rates

Constant Currency

Revenue

 

267.5

260.9

2.5

6.8

Underlying EBITA

 

Operating profit

 

Basic EPS (cents)

 

Underlying Basic EPS (cents)

 

Interim dividend per share (cents)

 

42.1

 

28.8

 

6.54

 

11.78

 

1.32

40.8

 

37.7

 

10.56

 

11.43

 

n/a

 

 

Note: The Group defines Underlying EBITA as EBITA before certain one-off costs (including reorganisation and termination costs), transaction costs, and non-cash losses or gains on revaluation of intra group loans (previously described as "Adjusted" in the IPO prospectus).

 

Steve Salmon, CEO, commented: "I am pleased to announce that HellermannTyton has made solid progress during the first half of 2013 in all of the regions in which it operates. Our Americas and Asian segments have continued to perform particularly strongly, and we have also delivered double-digit revenue growth in our Automotive market. Order intake grew ahead of sales in each region during the period, and we remain confident in our prospects for the full year."

 

Financial position

The Group's net borrowings at 30 June 2013 were €145.9 million (2012: €170.5 million), which reflects the net proceeds to the Group from the IPO of €29.0 million.  Net cash generated from operating activities in the period was €12.7 million (2012: €5.9 million).  As at 30 June 2013, the Group had €220.0 million of senior secured notes outstanding and an undrawn €80.0 million revolving credit facility. Cash and cash equivalents were €71.7 million (2012: €50.1 million)

 

Exchange rates

 

Translation rates used in the reported results:

 

Rates to Euro

2012 H1 average

2012 full year average

2013 H1 average

GBP

0.82

0.81

0.85

USD

1.30

1.29

1.31

JPY

103.47

102.77

125.68

 

Outlook

 

HellermannTyton is making solid progress in executing its organic growth strategy by focussing on the areas of highest potential, despite the fact that end market demand continues to be affected by global economic uncertainty. We remain committed to investing in new product development and in our world class operations in order to ensure that we maintain our long term competitive edge.  The Group continues to evaluate a number of potential bolt-on acquisition opportunities in line with its stated disciplined strategy. Order intake for the start of the second half of 2013 continues to be good, and the Board remains confident in the prospects for the full year.

 

Enquiries

HellermannTyton at Powerscourt:

+44 (0) 20 7250 1446

Giles Sanderson

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.

 

FORWARD LOOKING STATEMENTS

Certain statements in this condensed set of consolidated interim 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 and Other market segments. The Group operates world class production facilities in 11 primary locations across nine countries offering more than 20,000 products in over 70,000 SKUs and employed a total of 3,451 employees worldwide as at 30 June 2013. The Group's global network also comprises over 34 sales offices and warehouses employing an experienced global sales force of 790 employees as at 30 June 2013.

The Group sells its products and solutions directly in more than 34 countries, with its core geographies of 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 in which it operates, which has enabled it to meet the product demands of its global customers and to attract new customers in those locations. 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 key growth drivers in the 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.

The Group's revenue and underlying EBITDA for the twelve months ended 31 December 2012 were €514.2 million and €100.4 million, respectively. The Group's underlying EBITDA margin has remained at 20% over the last three years. For further information, please go to  www.hellermanntytoninvestors.com



 

BUSINESS REVIEW

Revenue

 

Group revenue in the first six months of 2013 was €267.5 million, 6.8% ahead of the first half of 2012 in constant currency and 2.5% ahead at reported rates. 

 

Revenue by geographic segment

 

 

Growth %

 

 

€ millions

 

H1 2013

 

H1 2012

Reported

Rates

Constant Currency

EMEA

142.2

139.9

+1.6%

+3.4%

Americas

69.2

65.5

+5.6%

+9.9%

Asian

56.1

55.5

+1.1%

+11.5%

Total revenue

267.5

260.9

+2.5%

+6.8%

 

Growth in the EMEA segment was lower than in other regions due to challenging market conditions. Revenue for the EMEA segment for the first six months of 2013 was €142.2 million, which is 1.6% higher than the first half of 2012 and 3.4% higher in constant currency.

 

Revenue for the Americas segment for the first half of 2013 was €69.2 million, which is 5.6% higher than the first six months of 2012 and 9.9% higher in constant currency reflecting increased sales volumes, particularly in the Automotive market.

 

Revenue for the Asian segment for the first six months of 2013 was €56.1 million, which is 1.1% higher than the first half of 2012 and 11.5% higher in constant currency as a result of increased sales volumes in the Automotive market.

 

Revenue by market

 

 

Growth %

 

 

€ millions

 

H1 2013

 

H1 2012

Reported

Rates

Constant Currency

Electrical

119.4

122.5

-2.5%

+3.8%

Automotive

126.5

114.5

+10.5%

+12.4%

Datacom & Others

21.6

23.9

-9.6%

-4.9%

Total

267.5

260.9

+2.5%

+6.8%

 

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

 

Automotive: on a constant currency basis, there was strong growth in the car market in Americas (USA) and Asian (China and South Korea) and modest growth in EMEA. 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 platforms.

 

Datacom & Others: the Datacom business was impacted by the reduced level of projects being undertaken, mainly in Europe, due to the lower level of government financed projects being approved but has seen sales growth in North America and Asian. The underlying data centre market drivers remain good with sales of proprietary RapidNet solutions growing year on year, but low economic growth in Europe is undermining corporate appetite for significant investment in this area. Overall, fibre infrastructure investment is continuing and HellermannTyton is focused on value-added solutions to reduce installation times and minimise total cost of ownership.

 

Cost of Sales

 

The Group's cost of sales for the first six months of 2013 was €155.9 million, compared to €151.6 million in the first half of 2012, representing an increase of €4.3 million, or 2.9%. This increase was principally due to the increased sales with margins remaining constant.

 

The underlying manufacturing margin (gross profit before one-off costs) was 42.3% compared to 42.2% in the first six months of 2012.

 

Selling and distribution costs

 

Selling and distribution costs incurred for the first six months of 2013 were €59.3 million, compared to €57.9 million in the first half of 2012, representing an increase of €1.4 million, or 2.4%.

 

Administrative expenses

 

The Group's administrative expenses for the first six months of 2013 were €23.5 million, compared to €13.7 million in the first half of 2012. The increase is principally due to one-off transaction costs in respect of the IPO of €3.8 million and a €5.9 million non-cash movement in the revaluation of Intra-Group financing loans which resulted in a loss of €4.3 million in the first half of 2013, compared to a gain of €1.6 million in the first six months of 2012.

 

 

FINANCIAL OVERVIEW

 

Underlying results

 

The following table reconciles the underlying results to the operating profit.

 

€ millions

H1 2013

H1 2012

Underlying EBITDA

52.8

51.2

Depreciation

(10.7)

(10.4)

Underlying EBITA

42.1

40.8

Amortisation

(3.4)

(3.4)

Underlying Operating Profit

38.7

37.4

One-off costs (incl. reorganisation & termination costs)

(1.8)

(0.7)

Transaction costs

(3.8)

(0.6)

Non-cash (loss)/gain on revaluation of Intra Group loans

(4.3)

1.6

Operating profit

28.8

37.7

 

Cash flows

 

€ millions

H1 2013

H1 2012

Cash flows:

 

 

from operating activities

12.7

5.9

from investing activities

(15.9)

(13.2)

from financing activities

26.3

(7.9)

Net cash movement

23.1

(15.2)

 

 

Net cash generated from operating activities

 

Underlying operational cash flows for the first six months were similar to the first half of last year but the overall year on year increase was due to €7.9 million higher taxation payments in the first half of last year.

 

Net cash used in investing activities

 

 The capital expenditure in the first six months of 2013 of € 16.2 million included the completion of the fit out of the Good Hope Road facility in Milwaukee, USA (€3.4 million), replacement moulding machines, automation and other production equipment in the UK, Germany, France, Brazil and Japan (€5.3 million), construction of the Technical Centre in Germany (€1.4 million), new and replacement moulds (€2.7 million) and ERP upgrade projects in Germany and the UK (€1.1 million).

 

Net cash generated in financing activities

 

Net cash generated in financing activities was €26.3 million for the first six months of 2013 compared to €7.9 million used in the first half of 2012. The inflow in the first half of 2013 includes the net proceeds from the IPO of €29.0 million partly offset by the settlement of professional fees of €2.4 million in relation to the issuance of the Floating Rate Senior Secured Notes in December 2012.

 

Finance costs - Net

 

Net finance costs were €6.9 million for the first six months of 2013 the same as the first half of 2012.  The interest charge on the senior secured notes was at a similar level to the interest paid in the first half of 2012 for the bank debt with the increased amortisation of transaction costs of €1.3 million in the first six months of 2013 being offset by fair value gains on the interest rate swaps.

 

Taxation

 

The tax charge for the first six months of 2013 was €7.7 million, compared to a charge of €9.7 million for the first half of 2012. The effective tax rate for the period of 27.8% results from the impact of the weighted average corporation tax rate expected for the full financial year. The effective tax rate has increased from 27.0% in 2012 due to the increased proportion of profit generated in the USA.

 

 

 

 

 

Earnings per share

 

Underlying basic earnings per share from operations for the first half year were 11.78 cents (H1 2012 pro forma 11.43 cents). Reported basic earnings per share were 6.54 cents and reported diluted earnings per share were 6.45 cents.

 

Dividend

 

The Board has declared an initial interim dividend of 1.32 cents per share based on the trading period since listing on the 2 April to 30 June 2013 and this payment will be €2.8 million. The interim dividend will be paid on 16 October 2013 to all shareholders on the register at the close of business on 6 September  2013 (record date) with an ex-dividend date of 4 September 2013.

 

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors do not consider that the principal risk factors of the Group have changed since the publication of the IPO prospectus on 26 March 2013, where the risk factors are detailed on pages 17 to 34.

The risks referred to and which could have a material impact on the Group's performance for the remainder of the current financial year relate to:

·     Raw material availability

·     Maintaining customer relationships and service

·     Lower priced competition

·     Damage to HellermannTyton Brand

·     Employee retention, and

·     Currency fluctuations.

 

GOING CONCERN

As stated in note 1 to the condensed consolidated interim accounts, the Directors have formed a judgement, at the time of approving the condensed consolidated interim accounts, that there is reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the condensed consolidated interim accounts.

 

 

RELATED PARTY TRANSACTIONS

Immediately prior to Admission HellermannTyton Group PLC acquired the parent company loan (payable to HellermannTyton S.a.r.l) as part of the reorganisation of the Group. The parent company loan was then exchanged for ordinary shares in the Company.

There have been no other material changes in related party relationships during the six months to 30 June 2013, and no further related party transactions have taken place which have materially affected the financial position or the performance of the Group during that period.

RESPONSIBILITY STATEMENT

The Directors confirm that to the best of their knowledge:

·     The interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union;

·     The financial highlights, review of business performance and interim financial information includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and a description of the principal risks and uncertainties for the remaining six months of the year); and

·     The financial highlights and review of business performance includes a fair review of the information required by DTR 4.2.8R (disclosure of material related party transactions and changes therein).

At the date of this statement, the directors are those listed in the IPO prospectus dated 26 March 2013.

 

By order of the Board

 

Steve Salmon

Chief Executive

28 August 2013

 

Tim Jones

Chief Financial Officer

28 August 2013

 


Condensed consolidated interim income statement

By function of expense

Note

Six months

ended

30 June 2013

Unaudited

€'000

Six months

ended

1 July 2012

Unaudited

€'000

 

Revenue

5

267,504

260,926

 

Cost of sales


(155,947)

(151,585)

 

Gross profit


111,557

109,341

 

Selling and distribution costs


(59,254)

(57,860)

 

Administrative expenses


(23,542)

(13,738)

 

Operating profit

5

28,761

37,743

 

Finance income

7

1,553

338

 

Finance costs

7

(8,486)

(7,241)

 





 

Profit before income tax


21,828

30,840

 

Income tax expense

9

(7,748)

(9,716)

 

Profit for the period attributable to owners of the parent


14,080

21,124

 

 

 




 

Earnings per share (cents)

 




 

Basic

11

6.54

10.56

 

Diluted

 

 

11

6.45

10.56

 





 

Condensed consolidated interim statement of comprehensive income


 Note    

Six months

ended 30

June 2013

Unaudited €'000

Six months

ended

1  July 2012

Unaudited €'000

 

Profit for the period attributable to owners of the parent


14,080

21,124

 

Other comprehensive income/(expense):




 

Items that will not be reclassified to the profit or loss




 

Actuarial loss on post-employment benefit obligations


-

(189)

 

Items that may be reclassified subsequently to the profit or loss



 

Currency translation differences


(16,105)

1,381

 

Total comprehensive income for the period attributable to owners of the parent


(2,025)

22,316

 

The notes below are an integral part of the condensed consolidated interim accounts.

Condensed consolidated balance sheet as at 30 June 2013



30 June     2013

31 December 
2012


Note

Unaudited €'000

Audited              €'000

 

Assets




Non-current assets




Intangible assets


252,653

269,836

Property, plant and equipment

8

150,329

149,170

Deferred income tax assets


3,673

4,537

Retirement benefit surplus


598

619

Other receivables


4,668

6,095

                                 


411,921

430,257

Current assets




Inventories


80,285

76,142

Trade and other receivables


123,757

103,624

Derivative financial instruments


1,385

285

Non-current assets classified as held for sale


3,734

3,945

Cash and cash equivalents


71,668

50,138



280,829

234,134

Total assets


692,750

664,391





Capital and reserves attributable to equity holders of the Company

Ordinary shares


2,154

10,000

Share premium


-

4,700

Translation reserve


4,589

20,694

Capital redemption reserve


100

-

Other reserves


(35,772)

322,652

Retained earnings


379,040

(39,573)

Total equity


350,111

318,473

 

 

 

 

 

 

 

 

 

 


 

 

Liabilities


 

 

Non-current liabilities




Trade and other payables


624

597

Borrowings

6

217,102

219,408

Deferred income tax liabilities


27,436

28,524

Retirement benefit obligations


3,769

4,367



248,931

252,896

 

Current liabilities




Trade and other payables


86,636

86,960

Current income tax liabilities


4,750

2,648

Borrowings

6

505

1,190

Derivative financial instruments


157

82

Provisions for other liabilities and charges


1,660

2,142



93,708

93,022

Total liabilities


342,639

345,918

Total equity and liabilities


692,750

664,391

 

 

The notes below are an integral part of the condensed consolidated interim accounts.

 

The condensed set of interim consolidated accounts were approved by the Board of Directors on 28 August 2013.

Condensed consolidated statement of changes in equity for the six months ended 30 June 2013

 

 

 

Share capital Unaudited €'000

Share Premium Unaudited €'000

Preference shares Unaudited €'000

Translation       reserve     Unaudited €'000

Capital redemption reserve  Unaudited €'000

Other reserves Unaudited €'000

Retained earnings         Unaudited €'000

Total

Unaudited €'000








Balance at 1 January 2013

10,000

4,700

-

20,694

-

322,652

(39,573)

318,473

Profit for the period

-

-

-

-

-

-

14,080

14,080

Other comprehensive income

-

-

-

(16,105)

-

-

-

(16,105)

Total comprehensive income

-

-

-

(16,105)

-

-

14,080

(2,025)

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

154

33,128

-

-

-

-

-

33,282

Capital reduction

-

(404,252)

-

-

-

-

404,252

-

Equity settled share based payments

-

-

-

-

-

-

381

381

Balance at 30 June 2013

2,154

-

-

4,589

100

(35,772)

379,040

350,111

 

Condensed consolidated statement of changes in equity for the six months ended 1 July 2012

 

 

Share capital Unaudited €'000

 Share Premium Unaudited €'000

Preference shares Unaudited €'000

Translation       reserve     Unaudited €'000

Capital redemption reserve Unaudited €'000

Other reserves Unaudited €'000

Retained earnings         Unaudited €'000

Total

Unaudited €'000








Balance at 1 January 2012

10,000

4,700

-

37,137

-

322,652

(70,197)

304,292

Profit for the period

-

-

-

-

-

-

21,124

21,124

Other comprehensive income

-

-

-

1,381

-

-

(189)

1,192

Total comprehensive income

-

-

-

1,381

-

-

20,935

22,316

Balance at 1 July 2012

10,000

4,700

-

38,518

-

322,652

(49,262)

326,608

 

 

The notes below are an integral part of the condensed consolidated interim accounts.

Condensed consolidated statement of cash flows for the six months ended 30 June 2013



     

Note

Six months ended 30

June 2013

Unaudited €'000

 

Six months ended

1 July  2012

Unaudited €'000

 

Cash flows from operating activities





Cash generated from operations



24,424

24,747

Interest paid



(6,695)

(5,886)

Income tax paid



(5,077)

(13,008)

Net cash generated from operating activities



12,652

5,853






Cash flows from investing activities





Purchase of property, plant and equipment (PPE)


8

(16,250)

(14,238)

Proceeds from sale of PPE



174

669

Interest received



168

338

Net cash used in investing activities



(15,908)

(13,231)






Cash flows from financing activities





Net proceeds from issue of ordinary shares



29,479

-

Payment of fees relating to issue of secured notes



(2,380)

-

Net repayments of bank borrowings and finance leases



(790)

(7,865)

Net cash generated from/(used in) financing activities



26,309

(7,865)






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



23,053

(15,243)

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



50,138

60,358

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



(1,563)

349






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



71,628

45,464

 

The notes below are an integral part of the condensed consolidated interim accounts.

Notes to the condensed consolidated interim accounts for the six months ended 30 June 2013

 

1      Introduction

 

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 and Other market segments.

 

The Group has direct sales operations in 34 countries worldwide supported by strategically positioned distribution, design and manufacturing facilities, with 11 manufacturing facilities located in nine countries.

 

HellermannTyton's strong innovation ethos and end customer relationships ensure a continuous flow of new and enhanced products being added to its global product range, many with patented features.

 

On 2 April 2013 the Company successfully applied for admission of its ordinary shares to the Official List of the UK Financial Services Authority and to trading on the main market for listed securities of the London Stock Exchange ("Admission"). The address of its registered office is Stoner House, London Road, Crawley, West Sussex, RH10 8LJ.

 

The condensed consolidated interim accounts have been reviewed, not audited, and were approved by the Board for issue on 28 August 2013.

 

2      Basis of preparation

 

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

 

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

 

These six month accounts are prepared up to and including the last Sunday of the sixth accounting period closest to the end of June, hence the six month period does not necessarily end on 30 June.

 

As required by the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority), the condensed consolidated interim accounts have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU. It does not contain all the disclosures required for annual accounts and should therefore be read in conjunction with the annual accounts of HellermannTyton Alpha S.a.r.l. for the year ended 31 December 2012, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

 

The condensed consolidated interim accounts have been prepared applying the accounting policies and presentation that were applied in the preparation of the HellermannTyton Alpha S.a.r.l. audited consolidated accounts for the year ended 31 December 2012. Those consolidated accounts were prepared in accordance with IFRS as adopted by the EU.

 

 

These condensed consolidated interim accounts do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for HellermannTyton Alpha S.a.r.l. for the year ended 31 December 2012 were approved by the Board of Directors on 26 March 2013. The report of the auditors on those accounts was unqualified and did not contain an emphasis of matter paragraph.

 

Going concern

 

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim accounts.

 

3      Accounting policies

 

The accounting policies adopted are consistent with those described within the prospectus issued at the time of the IPO and the HellermannTyton Alpha S.a.r.l. published consolidated accounts for the year ended 31 December 2012, with the exception of tax which is the weighted average annual tax rate expected for the full year, the adoption of IAS 19 (revised 2011) 'Employees benefits', and the additional disclosure requirements of IFRS 13 'Fair value measurement'.

 

IAS 19 (revised 2011) makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits. One of these changes is that the expected return on plan assets is no longer recognised. This will increase the pension expense for plans in a net deficit position and increase the pension income for plans in a net funds position. The amendment does not have a material impact on the consolidated financial information.

 

The Group has included the additional disclosures required by IAS 34.

 

The preparation of these condensed consolidated interim accounts requires the use of certain critical accounting estimates and assumptions. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The estimates and underlying assumptions are based on management's best knowledge of current facts, circumstances and future events. Actual results may differ, possibly significantly, from those estimates.

 

4      Financial risk management and Financial instruments

Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

 

The condensed consolidated interim accounts do not include all the financial risk management information and disclosure required in the annual accounts; they should be read in conjunction with the HellermannTyton Alpha S.a.r.l. annual accounts as at 31 December 2012. There have been no changes in the risk management policies since the year end.

 

Liquidity risk

Compared to the year end position, the parent company loan, preference shares and ordinary class A-II shares which were classified as non-current borrowings, were exchanged for ordinary shares in the Company upon Admission. There have been no other material changes in the contractual undiscounted cash flows for financial liabilities.

 

Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

 

- Level 1. Quoted prices (unadjusted) in active markets for identical assets and liabilities.

- Level 2. Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as process) or indirectly (that is, derived from process)

- Level 3. Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

 

The following table presents the Group's assets and liabilities that are measured at fair value at 30 June 2013.

 

At 30 June 2013

€'000

Level 1

Level 2

Level 3

Total

Assets

 

 

 

 

- Trading derivatives

-

1,385

-

1,385

 

 

 

 

 

Total assets

-

1,385

-

1,385

 

 

 

 

 

Liabilities

 

 

 

 

- Trading derivatives

-

157

-

157

 

 

 

 

 

Total liabilities

-

157

-

157

 

 

The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2012.

 

At 31 December 2012

€'000

Level 1

Level 2

Level 3

Total

Assets

 

 

 

 

- Trading derivatives

-

285

-

285

 

 

 

 

 

Total assets

-

285

-

285

 

 

 

 

 

Liabilities

 

 

 

 

- Trading derivatives

-

82

-

82

 

 

 

 

 

Total liabilities

-

82

-

82

 

 

 

Valuation techniques used to derive Level 2 fair values

Level 2 trading derivatives comprise forward foreign exchange contracts and interest rate swaps. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

 

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

 

The fair value of the following financial assets and liabilities approximate their carrying amount: Trade and other receivables, cash and cash equivalents, trade and other payables and borrowings.

 

 

5      Segmental information

For management purposes, the Group is organised into three geographical segments, being: Europe, Middle East and Africa ("EMEA"), Americas and Asian. These three operating segments are the basis on which the Group reports its segmental information.

 

The segment results for the six months ended 30 June 2013 are as follows:

 

 

 

 

 

 

EMEA

Americas

Asian

Group

 

€'000

€'000

€'000

€'000

Total segment revenue

157,823

72,797

65,565

296,185

Inter-segment revenue

(15,616)

(3,638)

(9,427)

(28,681)

Revenue

142,207

69,159

56,138

267,504

Operating profit/segment result

8,099

8,043

12,619

28,761

 

 

The segment results for the six months ended 1 July 2012 are as follows:

 

 

 

 

 

 

EMEA

Americas

Asian

Group

 

€'000

€'000

€'000

€'000

Total segment revenue

151,234

69,449

65,801

286,484

Inter-segment revenue

(11,322)

(3,936)

(10,300)

(25,558)

Revenue

139,912

65,513

55,501

260,926

Operating profit/segment result

15,570

8,794

13,379

37,743

 

 

6      Borrowings


30 June     2013

31 December    2012


€'000

€'000

Non-current



Secured notes

210,072

208,969

Debentures and other loans

2,740

2,889

Preference shares

-

100

Parent company loan

-

2,123

Ordinary shares - class A-II

-

978

Finance lease obligations

4,290

4,349


217,102

219,408

Current



Bank overdrafts

40

-

Finance lease obligations

465

1,190


505

1,190




Total borrowings

217,607

220,598

 

Bank borrowings

Bank borrowings were fully repaid on 15 December 2012.

 

Secured notes

On 15 December 2012 the Group issued €220 million floating rate senior secured notes, which are listed on the Luxembourg stock exchange and traded on the Euro MTF market. Interest on the notes is payable quarterly in arrears on 15 March, 15 June, 15 September and 15 December each year, and at a rate of 5.125% above 3 month EURIBOR. The notes will mature on 15 December 2017. Cross currency interest rate swaps have been taken out to hedge the currency fluctuations and interest costs. Transaction costs of €11,031,000 have been capitalised in relation to the secured notes.

Revolving Credit Facility

The Group has an undrawn revolving credit facility of €80 million (31 December 2012: €80 million), which expires beyond one year. If the facility is drawn down, a leverage covenant will apply. No draw down was made during the six months. Transaction costs of €3,740,000 have been capitalised in relation to the instrument.

Parent company loan, ordinary class A-II shares and preference shares

On 2 April 2013 upon admission to the London Stock Exchange, the parent company loan, ordinary class A-II shares and preference shares were exchanged for new shares in the Company as part of the reorganisation of the Group.

 

Finance lease obligations

The Group's finance leases are principally to purchase land and buildings and, to a lesser extent, vehicles and machinery. The lease liabilities are effectively self-secured as the rights to the leased assets revert to the lessors in the event of default. In most cases the Group has an option to purchase at the end of the lease at a pre-determined price.

7      Finance income and costs


Six months ended 30 June 2013

 

Six months ended 1 July 2012

 


€'000

€'000

 

Bank borrowings and related swaps

(1,198)

(6,247)

Secured notes

(5,703)

-

Preferred equity certificates

-

(139)

Parent company loan

(74)

-

Ordinary shares - class A-II

(34)

(64)

Preference shares - class P

(4)

(7)

Amortisation of transaction fees

(1,348)

(627)

Bank loans and overdrafts

(6)

(7)

Finance lease charges

(119)

(150)

Finance costs

(8,486)

(7,241)

Fair value gains on financial instruments:

- Cross currency interest rate swaps

1,385

-

Interest receivable on short term bank deposits

168

338

Finance income

1,553

338

Net finance costs

(6,933)

(6,903)

 

8          Property, plant and equipment

 

 

 

Furniture,

 

 

Land &

Vehicles &

Fittings &

 

 

Buildings

Machinery

Equipment

Total

 

€'000

€'000

€'000

€'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

 

 

 

 

 

Six months ended 30 June 2013

 

 

 

 

Opening net book amount

57,231

76,114

15,825

149,170

Exchange differences

(1,808)

(2,061)

(383)

(4,252)

Additions

2,658

11,468

2,124

16,250

Disposals

-

(103)

(8)

(111)

Depreciation charge

(921)

(7,830)

(1,977)

(10,728)

Closing net book amount

57,160

77,588

15,581

150,329

 

 

 

 

 

At 30 June 2013

 

 

 

 

Cost

64,131

123,582

36,881

224,594

Accumulated depreciation

(6,971)

(45,994)

(21,300)

(74,265)

Net book amount

57,160

77,588

15,581

150,329

 

 

 

9          Income tax expense

 

Six months

ended

30 June 2013

 

Six months

ended

1 July 2012

 

 

€'000

€'000

(restated)

Effective tax rate

27.8%

27.0%

The income tax expense for the six months to 30 June 2013 is an estimate based on the weighted average effective rate of taxation for the full year. The effective rate of taxation applied to underlying profit before tax for the six months is 27.8% (2012: 27.0%). The table below shows a reconciliation of the tax expense on underlying profit to the actual tax expense.

 

Six months

ended

30 June 2013

Six months

ended

1 July 2012

 

€'000

€'000

(restated)

Tax credit on amortisation of intangibles

(907)

(907)

Tax credit on transaction costs

(609)

(180)

Tax credit on one-off costs

(506)

(191)

Tax expense

7,748

9,716

 

10       Underlying profit before income tax

The underlying profit before income tax is calculated as below:

 

Six months

ended

30 June 2013

 

Six months

ended

1 July 2012

 

 

€'000

€'000

(restated)

Amortisation of acquired intangible assets

3,395

3,395

Transaction costs

3,764

562

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

4,349

(1,629)

One-off costs

1,807

682

Underlying profit before income tax

35,143

33,850

 

One-off costs in the six months to 30 June 2013 principally represent costs related to facility reorganisation in the USA, and termination costs in Europe. One-off costs in the six months to 1 July 2012 principally represent costs related to facility reorganisation in France and termination costs in the Americas.

 

11       Earnings per share

The earnings per share is calculated by reference to the profit for the period and the number of Ordinary shares in issue during the period as follows:

 

 

Six months

ended

30 June 2013

 

Six months

Ended

1

July 2012

 

 

€'000

€'000

(restated)

Profit attributable to owners of the parent

14,080

21,124

 

 

 

 

 

Weighted average number of shares in issue - basic

215,308,075

200,000,000

 

Dilutive potential of employees share incentives

2,981,449

-

 

Weighted average number of shares in issue - diluted

218,289,524

200,000,000

 

 

 

 

 

Earnings per share (cents)

 

 

 

Basic

6.54

10.56

 

Diluted

6.45

10.56

 

 

The weighted average number of shares for the six months ended 1 July 2012 is based on the share capital of the Company immediately prior to the primary share offer made on Admission.

 

 

 

 

 

 

 

 

 

 

 

 

 

The Group is disclosing underlying earnings per share attributable to owners of the parent in order to enable more consistent period-on-period comparisons of its performance, as follows:

 

 

Six months

ended

30 June 2013

 

Six months

Ended

1 July 2012

 

 

€'000

€'000

(restated)

Profit attributable to owners of the parent

14,080

21,124

Amortisation of acquired intangible assets

3,395

3,395

Transaction costs

3,764

562

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

4,349

(1,629)

One-off costs (see note 10)

1,807

682

Tax effect on the above items

(2,023)

(1,278)

Underlying profit attributable to owners of the parent

25,372

22,856

Underlying earnings per share (cents)

 

 

Basic

11.78

11.43

Diluted

11.62

11.43

 

 

 

12       Dividends

An interim dividend of 1.32 cents per share (2012: nil) was declared by the board of directors on 28 August 2013. It is payable on 16 October 2013 to shareholders who are on the register at 6 September 2013 (record date). This interim dividend has not been recognised as a liability in this interim financial information.

 

13       Related party transactions

Immediately prior to Admission the Company acquired the parent company loan (payable to HellermannTyton S.a.r.l) as part of the reorganisation of the Group. This parent company loan was then exchanged for ordinary shares in the Company.

There have been no other material changes in related party relationships during the six months to 30 June 2013, and no further related party transactions have taken place which have materially affected the financial position or the performance of the Group during that period.

14       Subsequent events

There have been no significant subsequent events.



Independent review report to HellermannTyton Group PLC

Introduction

We have been engaged by the company to review the condensed consolidated interim accounts in the interim financial report for the six months ended 30 June 2013, which comprises the Condensed consolidated Interim Income Statement, the Condensed consolidated Interim Statement of Comprehensive Income, the Condensed consolidated Balance Sheet, the Condensed consolidated Statement of Changes in Equity, the Condensed consolidated Statement of Cash Flows and related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim accounts.

Directors' responsibilities

The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual accounts of the group are prepared in accordance with IFRS as adopted by the European Union. The condensed consolidated interim accounts included in this interim financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed consolidated interim accounts in the interim financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim accounts in the interim financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLP
Chartered Accountants
28 August 2013
Gatwick

(a)  The maintenance and integrity of the HellermannTyton Group PLC website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the accounts since they were initially presented on the website.

 

(b)  Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

 

 

 


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