Sales growth of 8.7% and solid financial performance in 2014

Sales growth of 8.7%
and solid financial performance in 2014
Paris, 18 February 2015 – Saft, leader in the design, development and manufacture of
advanced batteries for industry, announces its fourth quarter and full-year 2014 revenue,
along with its full-year 2014 results.
2014 key figures





Sales of €678.4 million, strong growth of 8.7%, in line with Saft’s medium term
ambitions.
Improved profitability with an EBITDA margin of 15.3% compared to 14.8% in 2013
and EBITDA of €104.0 million.
Net profit of €48.1 million, up 31.8%.
Strong free cash flow of €46.2 million in 2014.
Proposed dividend of €0.82 per share, an increase of 5.1%.
Outlook
 2015 sales growth of over 5% at constant exchange rates.
 EBITDA margin of at least 15.8% of sales.
 Medium-term outlook confirmed.
_________________________________________________________________________________
Bruno Dathis, Acting Chairman of the Management Board, commented:
"The Saft Group performed very well in 2014 in terms of both business growth and
profitability.
Revenues grew strongly for the second consecutive year. Sales increased in the three main
technologies, with the strongest growth coming from the lithium-ion activities. Saft continued
to increase market share in several segments, particularly in the industrial standby, rail and
metering markets.
The Group’s operational profitability increased in 2014, supported by improved EBITDA
margins in both divisions while net profit recorded strong growth.
This solid operational performance together with a well-controlled investment policy and a
firm grip on the working capital requirement enabled us to increase our free cash flow very
significantly in 2014.
For 2015, Saft is targeting sales growth of over 5% and an EBIDTA margin of at least 15.8%.
I am confident in our teams’ ability to drive the Group’s medium term development and to
achieve the objectives fixed last November.”
N° 06-15
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2014 key figures
Reported
(in € million)
2014
2013
YoY
Growth
Revenue
678.4
624.2
8.7
o/w IBG
415.9
367.9
13.3%
o/w SBG
262.5
256.3
2.1%
193.3
170.8
13.2%
28.5%
27.4%
+110 bps
104.0
92.5
12.4%
o/w IBG
47.2
38.8
21.6%
o/w SBG
62.6
59.1
5.9%
(5.8)
(5.4)
n.a.
15.3%
14.8%
+50 bps
IBG EBITDA margin (%)
11.3%
10.5%
+80 bps
SBG EBITDA margin (%)
23.8%
23.1%
+70 bps
64.4
54.5
18.2%
9.5%
8.7%
+80 bps
Net profit for the period
48.1
36.5
31.8%
EPS (€ per share)
1.83
1.44
27.1%
Free Cash Flow
46.2
16.6
177.1%
Net debt/EBITDA
0.65
1.18
(54.1)%
Gross profit
Gross profit margin (%)
EBITDA
o/w Others
(1)
EBITDA margin (%)
EBIT
EBIT margin (%)
(1) The cost center "Others" includes costs for central departments, mainly IT, research, headquarters, finance and
administration.
n.a. not applicable.
Sales figures and variations are at current exchange rates, except for the change in revenue which is measured at constant
exchange rates. The average exchange rates EUR/USD in 2014 and 2013 are identical at 1 euro to US$1.33.
The 2014 consolidated financial statements prepared by Saft's Management Board were
reviewed by the Supervisory Board on 13 February 2015. The consolidated financial
statements were certified by the statutory auditors on 17 February 2015.
N° 06-15
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2014 highlights
Saft’s multi-technology, multi-market strategy continued to bring broad-based benefits in
2014.
Numerous successes in Asia
2014 saw continued success for Saft’s commercial teams in Asia, in particular on the rail
market, with major contract wins in high-profile projects such as the Shanghai metro and the
Lanxin line bullet trains in Northwest China.
SBG also continued to gain market share in China in new water and gas meter projects won
against local competitors. These successes are contributing to the development of Saft’s
Zhuhai facility, which reached a major milestone at the end of 2014 when it produced its one
hundred millionth primary cell.
Good growth in Li-ion activities
On the ESS market, Saft won projects around the world, with for example a first Li-ion
container project on a Japanese island and others deployed in Hawaii, in La Reunion and in
South America.
Another major Li-ion success in 2014 was the launch by a European customer of a new
electric forklift truck range with Saft batteries. This leading European manufacturer chose Liion as it offers significant performance, operational benefits and cost savings. They are
anticipating rolling out Li-ion throughout their entire warehouse and electric truck portfolio.
Saft’s Li-ion batteries are also now deployed in electric and hybrid bus scale tests in
Stockholm and Hamburg for a major European manufacturer, with start of production
planned for H1 2016.
Traditional technologies continue to outperform their markets
2014 was also a particularly strong year for Saft’s traditional technologies with very large
contracts won for stationary back-up power batteries in oil projects in Qatar and Abu Dhabi,
excellent growth for nickel telecom batteries in the US, market share gains in primary lithium
in India and China and the technological success of the Philae lander mission with a Saft
primary lithium battery.
N° 06-15
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Divisional performance
Industrial Battery Group (IBG)
Over the full year, despite a small sales decrease of 2.4% in the fourth quarter, the Industrial
Battery Group division’s sales progressed by 13.3% at constant exchange rates, and totalled
€415.9 million, with growth in all market segments except telecom networks. Full-year sales
in the division increased in both nickel and lithium-ion technologies.
The division’s EBITDA grew 21.6% to €47.2 million in 2014. This improvement in profitability
was driven by volume growth in both nickel and lithium-ion technologies, leading to further
reductions in losses at the Jacksonville and Nersac facilities.
Stationary applications
Sales of stationary backup power batteries rose 10.4% over the year. The growth came from
both the industrial standby and the energy storage systems segments.
In the fourth quarter, sales of stationary batteries fell 4.5% due to a decrease in telecom
network batteries as a major contract in India came to an end. This effect was also seen in
the third quarter. However the industrial standby market continued to grow strongly as did the
sales of lithium-ion energy storage batteries which more than doubled during the quarter,
progressing almost 150% over the year.
Transportation
The transportation market posted full-year sales growth of 16.0%, with strong growth in each
of the aviation, rail and vehicle segments. In the fourth quarter, growth in the transport
business was 4.2%, due to a challenging comparable.
The aviation business was strong in 2014, both in the civil and the US military markets. As in
2013, growth in the rail segment remained higher than market growth, driven in particular by
sales in Asia. Finally, in the vehicle segment, sales of lithium-ion batteries grew strongly over
the year.
Specialty Battery Group (SBG)
2014 sales in the Specialty Battery Group totalled €262.4 million, an increase of 2.1% yearon-year at constant exchange rates. Sales rose 3.0% in the fourth quarter.
The division's EBITDA totalled €62.6 million in 2014, up 5.9% compared with 2013. This
increase was mainly driven by volume growth and good control of production costs.
Civil electronics
The strong momentum in the civil electronics markets over the first nine months of the year
continued into the fourth quarter, with sales up 13.3%, resulting in full-year sales growth of
13%. This segment achieved strong growth in Asia but also in Europe, with the roll-out of
several nationwide programmes of new gas and water metering systems.
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Space and defence
The space and defence segment saw sales decline 15.1% over 2014. All defence segments
saw business levels decline with an expected sharp drop in torpedo battery sales. Radio
battery sales posted a more limited decline. Full-year sales to the space market saw a
moderate decrease compared with the previous year.
Other highlights of 2014 financial results
Taking into account the €5.8 million cost of support activities and a €1.6 million increase in
depreciation and amortisation charges to €39.6 million, Group EBIT totalled €64.4 million in
2014, up 18.2% relative to 2013.
Net financial costs amounted to €2.1 million, €8.4 million less than the 2013 figure. Financial
expenses were pushed down by €7.2 million of foreign exchange gains in 2014, caused by
the dollar's sharp rise against the euro at year-end. The Group's net borrowing cost was
globally stable at €6.9 million, giving an average interest rate on net debt of 3.23%.
After taking into account the Group's €1.9 million share of the net income generated by the
ASB joint venture – which rose sharply – net income from continuing operations totalled
€48.1 million in 2014 as opposed to €41.7 million in 2013.
Total net income in 2014 was also €48.1 million versus €36.5 million in 2013, the latter
including a €5.2 million net loss on the disposal of the Small Nickel Battery (SNB) business.
2014 net income grew 31.8% compared to 2013.
Due to a strong increase in operating cash flow to €78.9 million, reduced investment of
€32.8 million and a controlled increase in the working capital requirement, free cash flow
surged from €16.6 million(1) in 2013 to €46.2 million in 2014.
Saft ended 2014 with an excellent cash position of €150.2 million, giving the Group the
flexibility it needs for the future.
Net debt totalled €77.4 million at 31 December 2014, as opposed to €111.6 million at the end
of 2013.
The strong generation of cash flow and the robust balance sheet enables management to
propose an ordinary dividend of €0.82 per share, up 5.1% compared to 2013.
(1) Before capital transactions, i.e. the acquisition of the Nersac Li-ion production unit for €8.5 million.
N° 06-15
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Outlook
For 2015, the Group expects sales growth of over 5% at constant exchange rates and an
EBITDA margin of at least 15.8%.
The IBG division has begun 2015 with a solid order book. IBG sales growth will be affected
by lower sales of lithium-ion batteries in the first half.
The SBG division is targeting sales growth in the civil electronics and space markets and a
slowdown in defence activities. This sales growth objective integrates a cautious view of
activity in the oil industry.
Saft confirms the medium term objectives announced during the Investor day in November
2014: CAGR of 8-10% at constant exchange rates between 2015 and 2018, a medium-term
EBITDA margin of 17%, together with improved cash flow generation.
An investor and analyst presentation is available at www.saftbatteries.com.
Financial calendar for 2015
2015 Q1 turnover
23 April 2015
Annual General Meeting
12 May 2015
2015 Q2 turnover and half year results
23 July 2015
2015 Q3 turnover
22 October 2015
IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS
Certain statements contained herein are forward-looking statements including, but not limited to, statements that
are predictions of or indicate future events, trends, plans, objectives or results of operation. Undue reliance should
not be placed on such statements because, by their nature, they are subject to known and unknown risks and
uncertainties and can be affected by other factors that could cause actual results and Saft’s plans and objectives
to differ materially from those expressed or implied in the forward looking statements.
About Saft
Saft (Euronext: Saft) is a world leading designer and manufacturer of advanced technology batteries for industry.
The Group is the world’s leading manufacturer of nickel batteries and primary lithium batteries for the industrial
infrastructure and processes, transportation, civil and military electronics’ markets. Saft is the world leader in
space and defence batteries with its Li-ion technologies which are also deployed in the energy storage,
transportation and telecommunication network markets. More than 3,800 employees in 18 countries, 14
manufacturing sites and an extensive sales network all contribute to accelerating the Group’s growth for the
future.
Saft batteries. Designed for industry. www.saftbatteries.com
Saft
Jill Ledger, Corporate Communications Director
Tel: +33 1 49 93 17 77, [email protected]
Vannara Huot, Group Treasurer and Investors Relations Manager
Tel: +33 1 49 93 17 10, [email protected]
Brunswick
Mathilde Rodié, Benoit Grange, Guillaume Le Tarnec
Tel.: + 33 1 53 96 83 83 - e-mail : [email protected]
N° 06-15
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APPENDICES
 Quarterly sales by division
 Consolidated income statement
 Consolidated statement of comprehensive income
 Consolidated statement of cash flows
 Consolidated statement of financial position
 Statement of changes in equity
N° 06-15
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Quartely sales by division
In € million
2014
2013
YoY growth
at current
exchange rates
YoY growth
at constant
exchange rates
IBG
93.2
74.6
24.9%
28.0%
SBG
Total
61.1
154.3
58.9
133.5
3.7%
15.5%
5.2%
17.9%
IBG
112.3
85.3
31.7%
34.9%
SBG
Total
63.5
175.8
66.1
151.4
(3.9)%
16.1%
(1.7)%
18.9%
92.5
90.5
2.2%
2.8%
SBG
Total
64.3
156.8
62.7
153.2
2.6%
2.3%
2.2%
2.5%
IBG
117.9
117.5
0.3%
(2.4)%
SBG
Total
73.6
191.5
68.6
186.1
7.3%
2.9%
3.0%
(0.4)%
IBG
415.9
367.9
13.0%
13.3%
SBG
Total
262.5
678.4
256.3
624.2
2.4%
8.7%
2.1%
8.7%
Q1
Q2
Q3
IBG
Q4
Total
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Consolidated income statement
(in € million)
2014
2013
2012
Revenue
678.4
624.2
598.0
Cost of sales
(485.1)
(453.4)
(422.0)
Gross profit
193.3
170.8
176.0
Distribution and sales costs
(45.3)
(40.6)
(39.4)
Administrative expenses
(51.5)
(47.4)
(42.4)
Research and Development expenses
(33.9)
(28.3)
(24.4)
Restructuring costs
(0.5)
0.5
(0.8)
Other operating income and expenses
(0.1)
6.1
0.3
Operating profit
63.8
61.1
69.3
Finance costs, net
(2.1)
(10.5)
(12.6)
1.9
1.5
0.8
63.6
52.1
57.5
(15.5)
(10.4)
(15.5)
48.1
41.7
42.0
-
(5.2)
(7.3)
Net profit for the period
48.1
36.5
34.7
Attributable to owners of the parent company
48.0
36.5
34.5
0.1
-
0.2
Share of profit/(Loss) of associates
Profit before income tax from continuing
operations
Income tax on continuing operations
Net profit/(loss) from continuing operations
Net profit/(Loss) from discontinued operations(1)
Attributable to non-controlling interests
Earnings per share (in € per share)

basic
1.83
1.44
1.38

diluted
1.82
1.44
1.37
Earnings per share of continued operations
(in € per share)

basic
1.83
1.64
1.67

diluted
1.82
1.64
1.66
(1) Net profit/(loss) from discontinued operations for 2012 and 2013 relate to the “SNB” small nickel batteries activity sold on
28 June 2013.
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Consolidated statement of comprehensive income
2014
2013
2012
48.1
36.5
34.7
Actuarial gains and losses recognised against statement of
comprehensive income
(3.9)
1.0
(4.7)
Tax effect on actuarial gains and losses recognised against
statement of comprehensive income
1.3
(0.4)
1.6
Items that will not be reclassified to profit or loss
(2.6)
0.6
(3.1)
Fair value gains/(losses) on cash flow hedge
(1.1)
(0.9)
1.5
(14.8)
4.9
12.1
26.6
(12.8)
(9.2)
5.5
(1.4)
(4.6)
Items that may be reclassified subsequently to profit
or loss
16.2
(10.2)
(0.2)
Total other comprehensive income for the period, net
of tax
13.6
(9.6)
(3.3)
Total comprehensive income for the period
61.7
26.9
31.4
61.3
27.4
31.4
0.4
(0.5)
-
(in € million)
Net profit for the period
Other comprehensive income:
Fair value gains/(losses), net on investment hedge
Currency translation adjustments
Tax effect on income/(expenses) recognised directly in
equity
Attributable to:

Owners of the parent company

Non-controlling interests
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Consolidated statement of cash flows
(in € million)
2014
2013
2012
Net profit for the period from continuing operations
48.1
41.7
42.0
Share of net profit/(loss) of associates (net of dividends received)
(0.8)
(0.5)
0.1
Income tax expense from continued activities
15.5
10.4
15.5
Property, plant and equipment and intangible assets amortisation
and depreciation(1)
Adjustments
39.6
38.0
32.7
Finance costs, net
2.1
10.5
12.6
Stock option plans
0.7
1.0
1.4
(1.7)
-
(4.7)
4.7
(6.1)
(0.4)
Net movements in provisions
Other
Change in inventories
Change in trade and other receivables
Change in trade and other payables
Change in other receivables and payables
Changes in working capital
Cash flows from operations before interest and tax
Interest paid
Income tax paid
Net cash generated by operating activities
108.2
95.0
99.2
0.9
(19.2)
(3.3)
(13.8)
(3.1)
(13.6)
6.2
2.5
1.0
(4.9)
(6.8)
(11.5)
(11.6)
(26.6)
(27.4)
96.6
68.4
71.8
(7.2)
(7.3)
(6.6)
(10.5)
(6.9)
(9.7)
78.9
54.2
55.5
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
0.2
(8.7)
-
(28.8)
(42.0)
(44.6)
(5.3)
(6.3)
(9.7)
1.1
0.3
0.7
-
(0.2)
0.1
(32.8)
(56.9)
(53.5)
Capital increase
5.7
1.7
-
Purchase/Sale of treasury shares - liquidity contract
1.0
0.5
(0.2)
-
-
209.4
(328.5)
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of property, plant and equipment
Variation of other non-current financial assets and liabilities
Net cash used in investing activities
Cash flows from financing activities
New financial debt
Financial debt repayments
-
-
0.2
9.0
10.5
Increase/(decrease) in other long-term liabilities
(1.1)
(0.4)
(0.4)
Dividends paid to Company shareholders
(9.8)
(9.0)
(43.1)
Net cash generated by/(used in) financing activities
(4.0)
1.8
(152.3)
Net cash generated by/(used in) continuing operations
42.1
(0.9)
(150.3)
-
(8.4)
-
42.1
(9.3)
(150.3)
101.4
114.5
267.2
Grants related to assets and insurance indemnities
Net cash generated by/(used in) discontinued operations (2)
Net increase/(decrease) in cash
Cash and cash equivalents at beginning of period
Impact of changes in exchange rates
CASH AND CASH EQUIVALENTS AT END OF PERIOD
6.7
(3.8)
(2.4)
150.2
101.4
114.5
(1) Net of amortisation of deferred grants related to assets.
(2) Net cash used in discontinued operations for 2013 relate to the “SNB” small nickel batteries activity sold on 28 June 2013.
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Consolidated statement of financial position
Assets
(in € million)
31/12/2014
31/12/2013
31/12/2012
Intangible assets, net
199.8
205.9
213.3
Goodwill
117.7
107.8
111.1
Property, plant and equipment, net
260.5
245.1
226.7
0.1
0.1
0.1
14.6
13.8
13.3
Deferred income tax assets
8.5
6.5
5.9
Other non-current financial assets
0.3
0.5
0.3
601.5
579.7
570.7
Inventories
101.2
97.1
80.2
Tax credits
24.2
22.5
14.7
194.7
173.0
170.0
0.4
1.0
1.0
150.2
101.4
114.5
470.7
395.0
380.4
-
-
18.8
1,072.2
974.7
969.9
Non-current assets
Investment properties
Investments in joint undertakings
Current assets
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Assets held for sale(1)
TOTAL ASSETS
(1)
Assets held for sale as of end of 2012 relate to the “SNB” small nickel batteries activity sold on 28 June 2013.
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Liabilities
(in € million)
31/12/2014
31/12/2013
31/12/2012
Ordinary shares
26.6
25.9
25.2
Share premium
104.3
88.9
78.1
Treasury shares
(0.5)
(1.5)
(2.0)
Cumulative translation adjustments
39.9
13.7
26.0
Fair value and other reserves
(7.7)
5.4
2.1
Group consolidated reserves
309.7
280.9
262.3
2.6
2.2
2.7
474.9
415.5
394.4
222.4
208.3
212.8
2.5
3.2
4.9
Deferred grants related to assets
53.7
52.7
53.4
Deferred income tax liabilities
66.6
69.9
75.1
Pensions and other long-term employee benefits
15.0
10.2
11.0
Provisions
33.1
32.4
31.5
393.3
376.7
388.7
181.3
164.4
152.9
Income tax payable
8.4
6.3
5.7
Financial debt
5.2
4.7
4.7
Derivative instruments
2.0
0.6
1.0
Pensions and other long-term employee benefits
1.2
1.2
1.1
Provisions
5.9
5.3
6.3
204.0
182.5
171.7
-
-
15.1
1,072.2
974.7
969.9
Shareholders’ equity
Minority interest in equity
Total shareholders’ equity
Liabilities
Non-current liabilities
Financial debt
Other non-current financial liabilities
Current liabilities
Trade and other payables
Liabilities associated with assets held for sale
TOTAL LIABILITIES AND EQUITY
(1)
(1)
Liabilities associated with assets held for sale as end of 2012 relate to the “SNB” small nickel batteries activity sold on
28 June 2013.
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Statement of changes in equity
Owners of the parent company
(in € million)
Total
Number
Noncomprehensive
of shares
Shareholders’
controlling
Share
Share
income
for
the
making up
equity
Reserves
Total interests
period
the capital capital premium
attributable to
equity
Balance at 31/12/2011
25,174,845
25.2
103.2
193.7
80.2
402.3
2.7
405.0
Appropriation of 2011
comprehensive income
-
-
80.2
(80.2)
-
-
0.0
Employee stock option plans
(value of employee services)
-
-
1.3
-
1.3
-
1.3
Dividend paid
-
(25.1)
(18.0)
- (43.1)
-
(43.1)
Purchase/Sale of treasury
shares
-
-
(0.2)
-
(0.2)
-
(0.2)
Total comprehensive income
-
-
-
31.4
31.4
-
31.4
Balance at 31/12/2012
25.2
78.1
257.0
31.4
391.7
2.7
394.4
Appropriation of 2012
comprehensive income
-
-
31.4
(31.4)
-
-
0.0
Employee stock option plans
(value of employee services)
-
-
1.0
-
1.0
-
1.0
95,370
0.1
1.6
-
1.7
-
1.7
583,596
Capital increase by exercise
of stock options
Dividend paid in shares
25,174,845
0.6
9.2
(9.8)
-
-
-
Dividend paid
-
-
(9.0)
-
(9.0)
-
(9.0)
Purchase/Sale of treasury
shares
-
-
0.5
-
0.5
-
0.5
Total comprehensive income
-
-
-
27.4
27.4
(0.5)
26.9
Balance at 31/12/2013
25.9
88.9
271.1
27.4
413.3
2.2
415.5
Appropriation of 2013
comprehensive income
-
-
27.4
(27.4)
-
-
-
Employee stock option plans
(value of employee services)
-
-
0.8
-
0.8
-
0.8
0.2
5.5
-
-
5.7
5.7
-
-
(9.8)
-
(9.8)
(9.8)
0.5
9.9
(10.4)
-
-
-
Purchase/Sale of treasury
shares
-
-
1.0
-
1.0
1.0
Total comprehensive income
-
-
-
61.3
61.3
0.4
61.7
26.6
104.3
280.1
61.3
472.3
2.6
474.9
Capital increase by exercise
of stock options
25,853,811
283,591
Dividend paid
Dividend paid in shares
Balance at 31/12/2014
N° 06-15
467,630
26,605,032
14