gategroup increases revenue, delivers strong cash flow from operations and confirms its outlook for the full year Donnerstag, 22. August 2013 - 06:40

gategroup increases revenue, delivers strong cash flow from operations and confirms its outlook for the full year

Deutsche Version

 

• Revenue HY1 up 3.6% to CHF 1,465.4 million
• EBITDA margin of 4.3%, in line with expectations
• Cash generated from operations in HY1 of CHF 36.7 million, compared with CHF 8.4 million in previous year
• Restructuring program in Europe on track to achieve expected savings
• Full year 2013 outlook confirmed with an EBITDA margin of 5.5% to 6.0%

 

ZURICH, August 22, 2013 - gategroup reported revenues of CHF 1,465.4 million for the first half of 2013, an increase of 3.6% over the previous year (CHF 1,413.9 million). The EBITDA margin in the first half of 2013 was 4.3% compared to 5.8% (restated) in the first half of 2012. Net loss for the period was CHF 12.9 million (compared to a restated net profit of CHF 4.0 million in the first half of 2012), driven by lower EBITDA, one-off costs from restructuring activities in Europe and Australia, and foreign exchange losses. Cash generated from operations increased to CHF 36.7 million, up from CHF 8.4 million in 2012. gategroup confirms its guidance of 5.5% to 6.0% EBITDA margin for the full year.

 

 

Earnings situation

In the first half of 2013 gategroup posted total revenue of CHF 1,465.4 million, representing growth of CHF 51.5 million, or 3.6%. Acquisitions contributed CHF 25.7 million, or 1.8% and currency effects negatively impacted this result by CHF 4.3 million, or 0.3%.

 

gategroup achieved an EBITDA of CHF 62.4 million (4.3% EBITDA margin) in the first half of 2013 compared to CHF 81.8 million (5.8% EBITDA margin) in the first half of the previous year (2012 restated for IAS19R). The lower EBITDA was largely driven by the Airline Solutions trading environment in Europe which as previously disclosed degraded substantially in the second half of 2012. Additional impacts resulted from the Qantas Catering (Q catering) and Alpha acquisitions now in the integration phase and some adverse product mix and raw material costs in the Product and Supply Chain Solutions segment.

 

The loss for the reporting period was CHF 12.9 million, down from a restated profit of CHF 4.0 million in the same period in the previous year. This was mainly driven by additional restructuring costs and a foreign exchange loss (largely unrealized).

 

Cash flow statement and balance sheet

gategroup improved its cash generated from operations in HY1 2013 to CHF 36.7 million, significantly up from CHF 8.4 million in the equivalent period of the previous year. The rise was mainly driven by applying improved working capital practices to new business gained in 2012.

 

gategroup’s balance sheet as per June 30, 2013, shows total equity of CHF 277.5 million, compared to restated CHF 350.2 million as per June 30, 2012 and to CHF 254.6 as per December 31, 2012. Net financial debt as per June 30, 2013, was at CHF 270.8 million compared to CHF 244.7 million for H1 2012 and CHF 258.5 million at December 31, 2012.

 

Segment reporting

Airline Solutions revenues increased by 4.3%, from CHF 1,221.8 million to CHF 1,274.9 million for the first half of 2013. Segment EBITDA reached CHF 62.4 million (4.9% of revenues) in HY1 2013 compared to CHF 74.9 million (6.1% of revenues) in HY1 2012. The result was mainly influenced by the challenging market environment in Europe and the acquisition related impact in Australia and Amsterdam. The restructuring program in Europe is on track to deliver savings of CHF 25 – 30 million for the full year with approximately 40% captured in HY1.

 

The Product and Supply Chain Solutions (P&SCS) business reported a 4.3% increase in revenues to CHF 280.9 million for the first half of 2013 from CHF 269.4 million for the same period in 2012. P&SCS also reported an EBITDA of CHF 16.4 million (5.8% of revenues) in HY1 2013 compared to CHF 18.4 million (6.8% of revenues) in the previous reporting period. The decrease in EBITDA was mainly driven by some raw material price increases for plastic items and the loss of some high-margin product sales that were not fully offset by new product sales at lower-margins.

 

Business development and major business wins

In March, gategroup extended its business with long-time customer Iberia, Spain’s leading carrier, and Iberia Express. The Group signed a pair of five-year agreements that cover Iberia and its newly formed short- and medium-haul subsidiary, Iberia Express. The agreements will take effect from the end of an existing contract in 2015. The total value is approximately CHF 425 million in revenue over the life of the contracts. gategroup’s core brand Gate Gourmet will provide catering and provisioning services at Madrid and Barcelona, the two main Spanish airports in Iberia’s network, as well as at multiple locations across Europe, the United States and Latin America. Gate Gourmet also will supply products to Iberia’s VIP lounges in Madrid, and under the separate contract with Iberia Express, will provide business class catering for that subsidiary.

 

As part of gategroup’s decision to streamline its operations, and following a strategic review of the cabin cleaning and de-icing businesses in the U.K. & Ireland region, the Group decided to withdraw from its aircraft de-icing activities in London Heathrow, Gatwick and the cabin cleaning business at London Heathrow. The impact of this transaction is not material.

 

Outlook

gategroup confirms its 2013 full-year outlook. Thus, gategroup maintains an expectation of nominal growth in revenues across its portfolio and expects to achieve an EBITDA margin in the range of 5.5% to 6.0% for the full year. gategroup’s continuous focus on streamlining the European Airline Solutions business, on-going integration of the new acquisitions, together with activities in all other businesses, is expected to result in a continued margin improvement and an improved financial performance for the second half of the year.

 

 

Please visit our website www.gategroup.com and for more information on our half-year report athttp://www.gategroup.com/index.php/investor-relations/investor-pack?layout=edit&id=597.

 

 

Overview of key figures

millions of CHF	Q1 2013	Q2 2013	HY1 2013	HY1 2012 (restated)	Change HY1 vs. HY1
Revenue	686.0	779.4	1,465.4	1,413.9	3.6%
EBITDA	21.0	41.4	62.4	81.8	(23.7%)
EBITDA margin	3.1%	5.3%	4.3%	5.8%	(1.5pp)
Operating profit	3.1	19.3	22.4	39.7	(43.6%)
Operating profit margin	0.5%	2.5%	1.5%	2.8%	(1.3pp)
(Loss) / profit for the period	(5.1)	(7.8)	(12.9)	4.0
Cash generated from operations	1.1	35.6	36.7	8.4	28.3
Total equity	272.8	277.5	277.5	350.2
Net financial debt	290.8	270.8	270.8	244.7	(10.7%)
Cash (incl. available credit lines)	265.7	289.9	289.9	338.8	(48.9)

 

 

Invitation to analysts, investors and journalists

gategroup CEO Andrew Gibson and CFO Thomas Bucher would like to invite analysts, investors and journalists to participate in a telephone conference call regarding the 2013 first half year results.

 

The presentation can be accessed via webcast and dial-in teleconference at 14:30 CET on Thursday, August 22, 2013.

 

To listen to the live presentation via teleconference, call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone.

 

Direct dial-in numbers:

Switzerland toll:          +41 44 580 00 74

UK toll:                        +44 203 367 9453

US toll-free:                +1 866 907 5923

 

To link to the live webcast of the presentation, please follow the link on our website:

http://www.media-server.com/m/p/snvqjr5g