Press Release
Results 2023VANTIVA
ACHIEVES ITS OBJECTIVES
Strong margin resilience in a difficult
environmentAdjusted EBITDA of 142 million eurosAdjusted EBITDA
margin up 1 point to 6.8% of sales Adjusted EBITA at 57 million
eurosPositive FCF (before interest and tax) of 13 million euros The
group confirms the potential of synergy resulting from Home
Networks acquisition
Paris – March 26, 2024 – Vantiva (Euronext Paris:
VANTI), announces its financial results for the year 2023.
These results were approved by the Board of Directors today.
The audit procedures on the consolidated financial statements
have been completed, and the certification report will be issued
once the verification of the management report and the due
diligence relating to the electronic ESEF format of the 2023
financial statements have been finalized.
Results for the 2023 financial year are in line with
targets, despite the difficult economic
climate.
- Sales fell by 25.3% to 2,075 million euros (-23.3% at constant
exchange rates).
- Adjusted EBITDA totaled 142 million euros (-11.7%), with the
margin rising to 6.8% of sales from 5.8% in 2022.
- Adjusted EBITA rose slightly to 57 million euros (versus 55
million euros in 2022).
- Net income from continuing operations was a loss of 283 million
euros, compared with a loss of 529 million euros in 2022, which
took into account a negative contribution of 311 million euros from
equity-accounted earnings resulting from the impairment of the
value of TCS shares.
- Group net income was a loss of 285 million euros, compared with
a profit of 151 million euros, which included a profit of 680
million euros from "discontinued operations", mainly due to the
distribution of TCS shares.
- Free cash flow, before interest
and taxes, was positive at 13 million euros, down by 75 million
euros compared with 2022, due to the decline in EBITDA and above
all to the negative impact of changes in working capital.
- At year-end, Vantiva held cash
and cash equivalents of 133 million euros and an undrawn credit
line of 76 million euros.
- Total net debt (excluding asset
leases) amounted to 366 million euros (nominal).
Luis Martinez-Amago, Chief Executive
Officer of Vantiva, said:
"We are proud to have achieved our targets against a backdrop of
reduced customer orders in both our Connected Home where customers
are still holding excess inventories and Supply Chain Solutions
where the new diversified offer is still not compensated the
natural decline in Disks. The strong resilience shown by our
improved adjusted EBITDA margin, despite the significant drop in
sales, demonstrates the company's agility and responsiveness in
responding to a highly volatile environment in a context of cost
inflation. This performance gives me particular confidence in the
successful integration of the acquisition of CommScope's Home
Networks business. This acquisition is a strategic turning point
for Vantiva and ideally positions the group to meet the challenges
of our industry and achieve unprecedented financial results for the
company. I would like to thank all our teams for their commitment,
without which these results would not have been possible".
I- Key points 2023 and
outlook 2024
|
|
|
|
|
In € million, continuing operations |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Sales
figures |
2,075 |
2,776 |
(25.3)% |
(23.3)% |
Adjusted
EBITDA |
142 |
161 |
(11.7)% |
(9.2)% |
As % of sales |
6.8% |
5.8% |
105 bps |
106 bps |
Adjusted
EBITA |
57 |
55 |
2.9% |
6.1% |
Free cash flow before interest and taxes |
13 |
88 |
(75) |
(74) |
Key points 2023
The group's business was penalized by the general economic
environment and the reduction in investment budgets by major
telecom network and cable operators, against a backdrop of high
inventories. The company's responsiveness to this situation enabled
it to limit the decline in adjusted EBITDA in absolute terms, and
to improve the margin as a percentage.
Vantiva sales totaled 2,075 million euros, down 25.3% (-23.3% at
constant exchange rates). "Connected Home" contributed 1,563
million, down 26.3% (-24.2% at constant exchange rates), while
"Supply Chain Solutions" sales fell by 21.9% to 512 million euros
(-20.3% at constant exchange rates).
Adjusted EBITDA came to 142 million euros for the group. The
decline in this indicator was limited to 19 million euros. This
decline was mainly due to the impact of lower sales in both
divisions, largely but not totally offset by cost-cutting measures
and tight control of central costs. The contribution of "Connected
Home" is 120 million euros (compared with 135 million in 2022) and
that of "Supply Chain Solutions" 45 million euros (compared with 56
million in 2022).
Cost-containment measures improved EBITDA margin, which rose by
105 basis points to 6.8% of sales.Free cash flow before financial
expenses and taxes is positive at €13 million, compared with €88
million in 2022. This deterioration is largely explained by lower
EBITDA and the negative impact of changes in working capital.
Outlook
The beginning of the year confirms that 2024 should be another
challenging year for Connected Home business. Major telco operators
are cutting their capex program for the year and this will weigh on
demand for CPE. We are expecting the market to start to recover by
the end of 2024.
For Supply Chain Solutions, Vantiva anticipates a natural
decline in demand for optical discs, and an increase in sales for
"growth activities". The increase in vinyl records production
capacity should continue to be one of the main growth drivers in
this area.
Against this backdrop, Vantiva management will be focused on the
success of Home Networks’ integration and will continue to make the
needed structural adjustments for preserving the profitability.
For the fiscal year 2024, the group aims to achieve the
following:
- Adjusted EBITDA > €140 million
- FCF(1)> €0 million
(1)After financial expenses and taxes and before restructuring
and integration costs related to HN acquisition.
This outlook is based on a €/$ parity assumption of 1.08.
By 2026, the management is confident that
Vantiva will generate a sustainable and healthy positive FCF, after
interest, tax and restructuring costs.
II- Analysis by division
- Highlights of 2023 resultsConnected
Home
Breakdown of sales by product
|
|
|
|
|
In € million |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Sales
figures |
1,563 |
2,120 |
(26.3)% |
(24.2)% |
Of which |
|
|
|
|
Broadband |
1,262 |
1,598 |
(21.1)% |
(19.0)% |
Video |
301 |
522 |
(42.3)% |
(39.9)% |
|
|
|
|
|
Adjusted
EBITDA |
120 |
135 |
(10.4)% |
(8.3)% |
As % of sales |
7.7% |
6.3% |
|
|
The contribution of the Connected Home division
accounted for 75% of group sales (versus 76% in 2022) and totaled
1,563 million euros, down 26.3%. At constant exchange rates, the
decline would have been -24.2% compared with 2022. This is
primarily the result of falling volumes in all regions where the
group is active, due to reduced investment programs by telecom and
cable network operators. Broadband products, especially fiber, held
up better than video products, which were particularly hard hit,
notably in North America, by the decline in Android TV products.
Broadband accounted for over 80% of the division's sales, compared
with 75% the previous year.
The division's adjusted EBITDA represented 85%
of the group total, versus 84% in 2022. It amounted to 120 million
euros for 2023 versus 135 million in 2022, or 7.7% of sales (6.3%
in 2022). This increase in the margin rate illustrates the
cost-cutting measures rapidly deployed to offset the decline in
activity.
Supply Chain Solutions
Sales and EBITDA
In € million |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Sales
figures |
512 |
655 |
(21.9)% |
(20.3)% |
Adjusted EBITDA |
45 |
56 |
(20.4)% |
(18.4)% |
As % of sales |
8.8% |
8.6% |
|
|
Sales for the “Supply Chain Solutions” division
amounted to €512 million in 2023, down 21.9% on 2022. At constant
exchange rates, the decline would have been -20.3%. The structural
decline in optical disc sales was amplified by the downturn in
consumer discretionary spending, particularly in North America, but
partially offset by price increases. Other logistic activities
remained relatively stable despite this unfavorable environment.
Vinyl record sales rose following the commissioning of new
production capacity.
The division's adjusted EBITDA amounted to 45
million euros (vs. 56 million in 2022), representing 8.8% of sales
vs. 8.6% in 2022. The decline was limited thanks to cost
reductions, price increases and the ramp-up of the vinyl record
business. As a result, adjusted EBITDA margin improved by 17 basis
points.
Corporate & Other
In € million |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Sales
figures |
1 |
1 |
Ns |
Ns |
Adjusted EBITDA |
(23) |
(30) |
Ns |
Ns |
As % of sales |
ns |
ns |
|
|
Corporate & Other recorded sales of 1
million euros, as in 2022. Adjusted EBITDA amounted to -23 million,
an improvement of 7 million euros in 2022 due to strict control of
central services operating expenses.
III- Income statement
analysisIncome statement
|
|
|
|
|
In € million |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Sales from continuing operations |
2,075 |
2,776 |
(25.3)% |
(23.3)% |
Adjusted EBITDA from continuing operations |
142 |
161 |
(11.7)% |
(9.2)% |
% of
sales |
6.8% |
5.8% |
105 bps |
106 bps |
D&A & provisions1 (excluding amortization of intangible
assets acquired) |
(86) |
(106) |
19.2% |
17.2% |
Adjusted
EBITA from continuing operations |
57 |
55 |
2.9% |
6.1% |
% of
sales |
2.7% |
2.0% |
74 bps |
76 bps |
PPA Amortization |
(26) |
(31) |
16.7% |
14.7% |
Non-recurring items |
(167) |
(35) |
ns |
ns |
EBIT from continuing operations |
(136) |
(11) |
ns |
ns |
% of
sales |
(6.5)% |
(0.4)% |
na |
na |
Net financial
income (expense) |
(107) |
(177) |
39.7% |
39.0% |
Income
tax |
(15) |
(30) |
48.9% |
48.0% |
Contribution from equity affiliates |
(25) |
(311) |
ns |
ns |
Net
income from continuing operations |
(283) |
(529) |
ns |
ns |
Results of discontinued operations |
(2) |
680 |
ns |
ns |
Net income for the year |
(285) |
151 |
ns |
ns |
1 Provisions for risks, litigation and guarantees.
Sales for 2023 amounted to 2,075 million euros,
down 25.3% (-23.3% at constant exchange rates), due to the downturn
in our main markets for "Connected Home", notably in North America,
and for video decoders. The contribution of the "Supply chain
Solutions" division fell by a similar amount, due to the continuing
downturn in the DVD business, marginally offset by an increase in
growth activities.
Adjusted EBITDA totaled 142 million euros, down
11.7% and 9.2% at constant exchange rates. By contrast, adjusted
EBITDA margin improved by 105 basis points to 6.8% of sales. This
improvement, against a backdrop of a significant contraction in
business, reflects the impact of cost-cutting measures which were
implemented rapidly and effectively.
Adjusted EBITA of €57 million was up €2 million
despite the fall in adjusted EBITDA, due to lower depreciation and
provisions.
PPA amortization totaled -26 million euros,
compared with 31 million euros.
Non-recurring items showed a negative balance
of 167 million euros, due to:
- Restructuring costs
of -14 million euros, compared with -17 million in 2022, following
a drop in expenses for “Supply Chain Solutions” and Corporate,
while they increased by 2 million for “Connected Home";
- Other income and
expenses, which represented an expense of -14 million
euros versus -13 million euros the previous year, mainly due to
costs incurred in connection with the acquisition of Home
Networks;
- Impairment losses
on non-current assets of -139 million euros (vs. -5 million in
2022) following the impairment of "Supply Chain Solutions" goodwill
recorded in the first half of the year.
As a result, EBIT is negative by -136 million
euros, compared with a loss of -11 million in 2022.
Net financial expense amounted to -107 million
euros for 2023, compared with -177 million the previous year.
Net interest expense on debt (excluding asset leases) came to
-70 million euros, compared with -167 million euros in 2022. It
should be remembered that the cost of debt in 2022 was impacted by
the cost of early repayment of debt prior to completion of the
Spin-Off.
Other financial expenses of -37 million euros were mainly due to
impairment of TCS assets and an increase in pension
commitments.
Income tax amounted to -15 million euros,
compared with -30 million euros in 2022.
Equity-accounted income was a loss of -25
million euros versus -311 million euros in 2022, mainly due to the
impairment of the value of the 35% stake in TCS.
Net income from continuing operations for the
year was therefore -283 million euros, compared with -529 million
euros in 2022.
Group net income was a loss of -285 million
euros, compared with a profit of 151 million euros, which took into
account the gain on the valuation of TCS at the time of the
Spin-Off.
Cash flow and debt analysis
|
|
|
|
|
In € million |
2023 |
2022 |
Real exchange rates |
Constant exchange rates |
Adjusted EBITDA from continuing operations |
142 |
161 |
(19) |
(15) |
Investments |
(77) |
(80) |
3 |
1 |
Non-recurring
expenses (cash impact) |
(45) |
(50) |
5 |
5 |
Change in WCR and other assets and liabilities |
(8) |
57 |
(65) |
(65) |
Free cash flow before interest and taxes |
13 |
88 |
(75) |
(74) |
|
31/12/2023 |
31/12/2022 |
Gross nominal debt (including lease liabilities) |
555 |
449 |
Cash and cash equivalents |
(133) |
(167) |
Net
nominal debt (non-IFRS) |
422 |
282 |
IFRS adjustments |
(15) |
(19) |
Net financial debt (IFRS) |
407 |
263 |
Free cash flow before interest and taxes fell
from +88 million euros to +13 million. This decline was due to
adjusted EBITDA (-19 million), and changes in working capital (-65
million), while capital expenditure and restructuring costs were
down by 3 and 4 million euros respectively.
The change in working capital requirements is
mainly due to the negative impact of lower sales and customer order
deferrals.
Pension commitments fell by 10 million euros after taking into
account payments made for 28 million euros, a negative actuarial
effect of 7 million euros and a net charge for the year of 12
million euros.
Cash out for restructuring amounted to -18
million euros versus -22 million euros.
Capital expenditure amounted to -77 million
euros, a decrease of 3 million euros compared to 2022. Most of this
was R&D capital expenditure.
The cash position at the end of December 2023
was 133 million euros, compared with 167 million euros a year
earlier.
Nominal net debt at the end of the year stood
at 422 million euros, an increase of 140 million due mainly to
negative FCF (after interest and tax cash out), non-cash interest
and new leases.
Under IFRS, net debt was €407 million at
December 31, 2023.
Post-closing event
On October 3, 2023, the group announced an agreement to acquire
CommScope's home connectivity business. This acquisition was
finalized on January 9, 2024. For further details, please refer to
the press releases published on these dates and available on our
website.
Appendice 1
Debt details
In € million
Line |
Features |
Nominal |
IFRS amount |
Nominal rates |
IFRS rates |
Barclays |
Cash: Euribor 3M + 2.50% & PIK |
258 |
249 |
10.4% |
13.7% |
Angelo Gordon |
Cash: Euribor 3M + 4.00% & PIK |
131 |
125 |
13.4% |
18.0% |
Angelo G Barclays STL |
PIK:E + 10% SALES |
85 |
85 |
14.0% |
31.4% |
Wells Fargo |
WF prime rate + 1.75 margin |
0 |
0 |
10.3% |
10.3% |
Lease commitments |
|
56 |
56 |
15.4% |
15.4% |
Leasing |
|
2 |
2 |
10.9% |
10.9% |
Accrued interest & Other |
|
24 |
24 |
0.0% |
0.0% |
Total debt |
|
555 |
541 |
11.7% |
17.0% |
Cash & Equivalents |
|
133 |
133 |
|
|
Net debt |
|
422 |
407 |
|
|
Appendice 2
Impact of IFRS 16
|
|
|
|
|
Year 2023 (incl. IFRS 16) |
|
|
|
Year 2023 (excl. IFRS
16) |
|
|
|
IFRS 16 impact |
|
|
|
In € million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At real rates |
|
|
|
At real rates |
|
|
|
At real rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales figures |
|
|
2,075 |
|
|
|
2,075 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA ADJ |
|
|
142 |
|
|
|
111 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITA |
|
|
57 |
|
|
|
50 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow |
|
|
48 |
|
|
|
17 |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCF before financial expenses and taxes |
|
|
13 |
|
|
|
(18) |
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FCF after financial expenses and taxes |
|
|
(45) |
|
|
|
(66) |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendice 3
Reconciliation of indicators
4
In addition to the published results, and to enable better
comparability of operating performance trends in 2023 versus 2022,
Vantiva presents a set of adjusted indicators which exclude the
following items as presented in the group's consolidated income
statement and financial statements:
- Net restructuring costs;
- Expenses net of asset impairment;
- Other income and expenses (other non-recurring items).
In € million |
2023 |
2022 |
Variation1 |
EBIT from continuing operations |
(136) |
(11) |
(125) |
Restructuring
costs, net |
14 |
17 |
(4) |
Impairment gains
(losses) on non-recurring operating assets |
139 |
5 |
134 |
Other income
(expenses) |
14 |
13 |
1 |
PPA
amortization |
26 |
31 |
(5) |
Adjusted EBITA from continuing operations |
57 |
55 |
2 |
Depreciation,
amortization and impairment ("D&A") 2 |
86 |
106 |
(20) |
Adjusted EBITDA from continuing operations |
142 |
161 |
(19) |
1 Change at real exchange rates |
|
|
|
2
Excluding amortization of intangible assets arising on
acquisitions, and including provisions for risks, litigation and
warranties. |
Adjusted EBITDA corresponds to income from continuing operations
before tax and net financial income, excluding other income and
expenses, depreciation and amortization (including the impact of
provisions for risks, guarantees and litigation).
Adjusted EBITA corresponds to income from continuing operations
before tax and net financial income, excluding other income and
expenses and impairment of PPA items.
###
Warning: Forward Looking Statements
This press release contains certain statements that constitute
"forward-looking statements", including but not limited to
statements that are predictions of or indicate future events,
trends, plans or objectives, based on certain assumptions or which
do not directly relate to historical or current facts. Such
forward-looking statements are based on management's current
expectations and beliefs and are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from the future results expressed, forecasted, or implied by such
forward-looking statements. For a more complete list and
description of such risks and uncertainties, refer to Vantiva’s
filings with the French Autorité des marchés financiers (AMF). The
Universal Registration Document (Document d’enregistrement
universel) for fiscal year 2022 was filed with the Autorité des
marchés financiers on April 26, 2023, under no. D.23-0337, and an
amendment was filed with the Autorité des marchés financiers on
December 8, 2023, under no. D.23-0337-A01.
###About
Vantiva
Pushing the Edge
Vantiva shares are admitted to trading on the regulated market
of Euronext Paris (VANTI).
Vantiva, formerly known as Technicolor, is headquartered in
Paris, France. It is an independent company which is a global
technology leader in designing, developing and supplying innovative
products and solutions that connect consumers around the world to
the content and services they love – whether at home, at work or in
other smart spaces. Vantiva has also earned a solid reputation for
optimizing supply chain performance by leveraging its decades-long
expertise in high-precision manufacturing, logistics, fulfillment
and distribution. With operations throughout the Americas, Asia
Pacific and EMEA, Vantiva is recognized as a strategic partner by
leading firms across various vertical industries, including network
service providers, software companies and video game creators for
over 25 years. The group’s relationships with the film and
entertainment industry goes back over 100 years by providing
end-to-end solutions for its clients.
Following the acquisition of CommScope’s Home Networks in
January 2024, Vantiva continues its 130-year legacy as a global
leader in the connected home market.
Vantiva is committed to the highest standards of corporate
social responsibility and sustainability across all aspects of
their operations.
For more information, please visit vantiva.com and follow
Vantiva on LinkedIn and Twitter.
Contacts
Vantiva Investor Relations
Image
7investor.relations@vantiva.com
vantiva.press@image7.fr
- 2024-03-26 PR FY2023 - EN
Vantiva (EU:VANTI)
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