Scienza e Tecnologia
Lumibird / h1 Earnings: Income From Ordinary Operations Growth in a Crisis Context
H1 earnings: income from ordinary operations growth in a crisis context
The LUMIBIRD Group, the European leader for laser technologies, is reporting an improvement in income from ordinary operations for the first half of the year. This performance reflects the resilience of the business (revenues -11.5%) in the context of a global recession, a significant increase in the gross margin, particularly for the Laser division, and strict control over external costs. Excluding the €3.8m expense linked to the payment fraud affecting the subsidiary Halo-Photonics, Operating income represents €1.8m. Further strengthened through its latest external growth operations, and particularly its acquisition of Ellex, the Group is now fully operational across all its activities and effectively positioned to meet demand on its markets which remains intact compared with the pre-crisis situation. New medium-term strategic objectives will be presented to the market before the end of the year.
Extract from the condensed half-year consolidated financial statements
approved by the Board of Directors on September 22, 2020
Significant developments for the period
Covid-19
The context for the first half of 2020 was complicated by the health crisis. During this period, the Group's sites remained open and all the measures were put in place to ensure the safety of people, resulting in a reduction in production capacity by around 30%. In terms of its robust commercial development, the Group did not record any order cancellations. However, certain deliveries had to be deferred as some client sites were closed (particularly universities, for the Scientific business) or following delays with production, as well as a slowdown in sales in China, particularly for the Medical branch.
At the height of this period, the Group benefited from various government support measures: government job support packages (€0.2m), deferred social security charges (€1m), freeze on BPI loan repayments deferred to maturity (€0.6m), and government-backed loans set up (€15.9m, including €15m in France). LUMIBIRD also took particular care to monitor its trade receivables and did not record any losses relating to client defaults.
Despite the impact of the crisis on the Group's business in 2020, it does not call into question the Group's business model or the intrinsic value of its assets (notably recognized as goodwill on the balance sheet).
Payment fraud
During the first half of 2020, the Group was the victim of a payment fraud affecting its new subsidiary Halo-Photonics (UK), representing a maximum cost of €3.8m (before any action to recover the funds), recognized in operating income for the period. The costs incurred to date for recovering these funds represent €0.2m, also recognized in operating income. This fraud, which was quickly brought under control, is not likely to call into question the Group's development or its ability to cover its financial commitments over the short, medium or long term.
Acquisition of Ellex's Laser and Ultrasound branch
On June 30, 2020, LUMIBIRD finalized its acquisition of Ellex's laser and ultrasound activities. Through this acquisition, the Group has doubled the size of its Medical division, while creating a world leader for laser and ultrasound technologies for the diagnosis and treatment of ocular diseases. The Group is taking a major step forward with its strategic development, combining external and organic growth on its three markets: Lidar, Defense / Space and Medical.
As this operation was completed on June 30, 2020:
On a proforma basis (unaudited), with the assumption that the transaction took place on January 1, 2020, the Group's consolidated revenues for the first half of the year came to €65.5m. Despite a lower gross margin rate (54.7%) than LUMIBIRD, Ellex's activities are expected to have made an accretive contribution to current operating income, with a current operating income margin of 7.1% (6.3% for LUMIBIRD), giving €4.3m of proforma current operating income for their combined position.
Business analysis
Summary of results for each division
Limited contraction in revenues in a crisis context
In the economic context for the first half of 2020, with €45.8m of first-half consolidated revenues, the LUMIBIRD Group showed its high level of resilience in response to the crisis, with a limited revenue contraction of 11.5%.
Like-for-like and at constant exchange rates, excluding the 2020 contributions for the acquisitions of Optotek Medical and Halo-Photonics respectively in August and December 2019, the contraction in revenues came to -17.4%.
Profitability maintained despite the lower level of business
LUMIBIRD recorded €2.9m in current operating income for the first half of the year, up 9.7% compared with the first half of 2019.
Restated for the positive contribution in 2020 (€0.6m) by the Optotek and Halo-Photonics activities, the Group's like-for-like current operating income totaled €2.3m (5.4% of revenues), compared with €2.6m (5.1% of revenues) for the same period in 2019. This performance (improvement in the current operating income margin) is linked primarily to the following factors:
After taking into account the impact of non-recurring items (primarily including the cost of the payment fraud for €4.0m and the cost of business combinations for €0.9m), operating income shows a €(2.1)m loss, compared with €2.6m for the first half of 2019.
Pre-tax income came to €(2.6)m, after €0.5m of finance costs.
Following a positive corporate income tax contribution of €0.7m, net income totaled €(1.9)m, compared with €1.8m for the first half of 2019. Excluding the impact of the payment fraud (€3.2m net of tax), net income came to +€1.6m for the first half of 2020.
Solid balance sheet position
The balance sheet at June 30 includes the acquisition of Ellex (change in scope). As a result, the balance sheet total increased from €194.3m at December 31, 2019 to €295.7m at end-June, with:
These facilities do not include any ratios or clauses for higher interest rates, early repayments or collateral, with the exception of the acquisition debt. This acquisition debt is subject to two ratios which are tested annually at December 31 and which, if they are not complied with, result in the debt becoming payable:
With €78.6m of cash assets (vs. €50.3m), net financial debt changed from €(18.2)m at December 31, 2019 to €10.6m at June 30, 2020 (including the Ellex financing and the impact of the payment fraud mentioned previously²), enabling the Group to maintain its financial flexibility and its capacity to continue financing its ambitions for external growth.
Cash flow analysis – healthy financial position
During the period, Lumibird further strengthened its cash flow, achieving a positive change in its cash position of €28.9m, based on:
Up from €49.0m at the start of the year, the Group's net cash position came to €77.7m at June 30, 2020.
Outlook
While the Covid-19 health crisis has not called into question the Group's strategy, focused on combining organic and external growth on its three buoyant markets (Lidar, Defense / Space and Medical), it has made visibility more uncertain for the short and medium term. When publishing its 2019 earnings, this situation had led the Group to suspend its short and medium-term guidance.
With development, production and delivery capabilities that have been fully reestablished and strategic markets that remain buoyant despite the crisis, LUMIBIRD is once again repositioning itself to target both external and organic growth, while moving forward cautiously with regard to the pandemic's potential new impacts on the global markets.
Taking into account its new scale and its strong prospects, the Group is currently working to draw up a new strategic plan, which will be presented to the market before the end of the year. The updated objectives based on this strategic plan, including Ellex's activities, will replace the guidance that was previously suspended by the Group.
Publication of the 2020 Half-Year Financial Report
The Lumibird Group's 2020 half-year financial report was filed with the French financial markets authority (AMF) on September 22, 2020 and is available on Lumibird's website: www.lumibird.com .
Next date : Q3 2020 revenues on October 26, 2020 after close of trading
LUMIBIRD is one of the world's leading specialists in lasers. With 50 years of experience and a mastering of solid state laser, laser diodes and fiber laser technologies, the Group designs, manufactures and markets high performance lasers for scientific (laboratories and universities), industrial (manufacturing, defense, Lidar sensors) and medical (ophthalmology) markets.
Born from the combination of Keopsys Group with Quantel in October 2017, LUMIBIRD has more than 800 employees and over €110 million of revenues in 2019 and is present in Europe, America and Asia.
LUMIBIRD shares are listed on the Euronext Paris B Compartment. FR0000038242 – LBIRD
www.lumibird.com
Contacts
Financial liabilities (current and non-current) include lease liabilities under IFRS 16.
Gross financial debt corresponds to the sum of non-current financial liabilities and current financial liabilities, including lease liabilities under IFRS 16.
Net financial debt corresponds to the difference between gross financial debt and cash assets.
The cash position corresponds to “cash and cash equivalents” on the asset side of the balance sheet, net of current bank borrowings (cash liabilities) included in current financial liabilities on the liability side of the balance sheet
Cash assets net of current bank borrowings included in current financial liabilities.
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