Latecoere Reports H1 2024 Results

   -- 
 Strong revenue growth of +16%, driven by the continued ramp-up of 
      production and the execution of commercial initiatives to partially 
      mitigate inflation. 
 
 
   -- 
 Recurring EBITDA loss of EUR(1.8) million; a significant improvement 
      from H1-2023 of EUR(17.6) million. This reflects the operational leverage 
      coming from volume growth, and execution of the commercial measures 
      tackling inflation. 
 
 
   -- 
 Latecoere continues to invest in its operating platform, in its people 
      and in creating a more resilient business model better positioned to grow 
      with customer requirements, including focusing on quality and on-time 
      delivery. 
 
TOULOUSE, France--(BUSINESS WIRE)--December 23, 2024-- 

Regulatory News:

Latecoere (Paris:LAT), a Tier 1 supplier to major international aircraft manufacturers, announced that the Board of Directors approved Latecoere's financial statements for the six-month period ended June 30, 2024.

André-Hubert Roussel Group Chief Executive Officer, stated: "2023 and the first half of 2024 have been a time of unprecedented challenges for the aerospace supply chain, including Latecoere. However, I am proud of the resilience and adaptability our team has shown in navigating inflationary pressures and supply chain constraints. As OEM volume growth drives increasing activity across commercial, business jet, and defense markets, we are fully committed to supporting this ramp-up while addressing the associated challenges.

We continue to invest strategically in our operations, workforce, and geographic footprint to build a stronger, more competitive Latecoere. Looking ahead, we are optimistic about 2024, with expectations of increased revenue growth, a significant reduction in EBITDA losses, and marked improvements in operational free cash flow. These outcomes reflect the positive impact of our ongoing operational and commercial initiatives. While we remain mindful of the restructuring and working capital demands tied to growth, we are confident in our path forward to deliver enhanced value to our customers and stakeholders."

1(st) Half Year 2024 Results

 
 Group                                      June 30, 2023 - 
  (EUR million)          June 30, 2023        restated(1)        June 30, 2024 
     Revenue                 303,8               303,8               352,1 
 Reported growth             42,9%               42,9%               15,9% 
     Recurring EBITDA       (18,4)              (17,6)               (1,8) 
 Recurring EBITDA 
  margin on revenue          -6,0%               -5,8%               -0,5% 
     Operating free 
      cash flows from 
      continuing 
      operations            (59,1)              (59,1)              (40,9) 
     Net Cash Flow          (28,1)              (28,1)              (46,2) 
     Cash and cash 
      equivalents            45,8                45,8                38,8 
     Net Debt                370,3               370,3               183,5 
-----------------------  -------------  -----------------------  ------------- 
 

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

Latecoere's half-year financial results for 2024 reflect the general increase level of production in the aeronautical sector as a whole. Revenues amounted to EUR352.1 million, up EUR48.2 million or +16%. The increase in revenues was driven by higher production rates from OEMs, additional revenue from new business wins.and the conclusion of commercial initiatives to offset inflation.

The Group reported a recurring EBITDA for the first half of 2023 of EUR(1.8) million, a significant improvement compared to the EUR(17.6) million reported in the first half of 2023. This turnaround was mainly driven by operating leverage from increased volumes, and the positive benefits coming from both operational and commercial initiatives undertaken by the Group. These positive benefits are still being offset however by continued inflationary pressures on the material cost base and ongoing supply chain disruptions during the ramp up of the operations.

Latecoere's net financial result amounted to EUR(9.4) million in the first half of 2024, compared with EUR(9.1) million in the first half of 2023.

The Group's net result for the first half of 2024 amounted to EUR(49.3) million, compared with EUR(59.6) million for the first half of 2023.

Free cash flow from operations for the period amounted to EUR(40.9) million, mainly impacted by the negative EBITDA, an increase of working capital, (net of customer advances), to fund the revenue growth, and non-recurring costs.

At the end of June 2024, cash and cash equivalent stood at EUR38.8 million. The net debt at the end of June 2024 stood at EUR183.5 million.

To date, the hedging portfolio amounted to $627.1 million at an average EUR/USD rate of 1.12. Since June 30, 2024, the Group has continued to put in place hedges for 2025 and 2026 at attractive terms.

Aerostructures

Revenue for Latecoere's Aerostructures Division rose by +8% on a reported basis vs 1(st) half of 2023. The segment's activity benefited from increased production rates and the benefit of commercial initiatives concluded in 2024.

The division's recurring EBITDA amounted to EUR(13.2) million, in line with losses generated in the first half of 2023. Despite the increase in revenue, ongoing supply chain issues impacting the organization during the ramp-up led to significant cost increases, offsetting most of the improvements coming from the additional volumes and better commercial terms and conditions.

 
 Aerostructures                             June 30, 2023 - 
  (EUR million)          June 30, 2023        restated(1)        June 30, 2024 
 Consolidated revenue        190,2               190,2               205,6 
     Reported growth         65,5%               65,5%               8,1% 
   Inter-segment 
    revenue                  11,2                11,2                10,4 
 Revenue                     201,4               201,4               216,0 
 Recurring EBITDA           (11,8)              (11,0)              (13,2) 
   Recurring EBITDA 
    margin on revenue        -5,9%               -5,5%               -6,1% 
-----------------------  -------------  -----------------------  ------------- 
 

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

Interconnection Systems

Revenues of EUR146.5 million were up by +29% on a reported basis compared with EUR113.6 million in the first half of 2023. This growth is notably driven by increased volumes notably for the A320 program and from the benefit of commercial initiatives concluded in 2024.

Recurring EBITDA for the Interconnection Systems division reached EUR11.4 million, a turnaround from the EUR(6.6) million from the prior year, reflecting operating leverage from volume increase, tight costs control and better commercial terms and conditions achieved with customers.

 
 Interconnection                            June 30, 2023 - 
 Systems (EUR million)   June 30, 2023        restated(1)        June 30, 2024 
 Consolidated revenue        113,6               113,6               146,5 
     Reported growth         16,3%               16,3%               28,9% 
 
   Inter-segment 
    revenue                   1,3                 1,3                 1,0 
 Revenue                     114,9               114,9               147,4 
 Recurring EBITDA            (6,6)               (6,6)               11,4 
   Recurring EBITDA 
    margin on revenue        -5,7%               -5,7%               7,7% 
-----------------------  -------------  -----------------------  ------------- 
 

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

2024 outlook

2023 and H1 2024 were challenging periods for the aerospace supply chain industry in general and for Latecoere in particular. These challenges continue to persist throughout 2024, with inflationary pressures and challenges arising from operating within a constrained aerospace supply chain. OEM volume growth for commercial, business jet and defense market sub-segments continues to improve overall revenue, but the ramp-up in activity results in challenges and cost pressures for the whole industry. To alleviate these challenges, Latecoere continues to invest in its operating platform, people and geographic footprint, creating a more resilient business model better positioned to grow with customer requirements. Latecoere's outlook for FY 2024 includes:

   -- 
 Increased revenue growth; 
 
 
   -- 
 Significant reduction in EBITDA losses, resulting from the realization 
      of operational and commercial initiatives, an improving supply chain 
      situation and increased activity across key commercial, business jet and 
      defense market sub-segments and; 
 
 
   -- 
 A significant improvement in operational free cash flow reflecting the 
      improvements in operational and commercial initiatives partially offset 
      by restructuring costs, increased working capital due to sales growth and 
      key investments to strengthen Latecoere's competitive position. 
 

Significant Events in the period

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