Sharp improvement in second half margins
Sales growth, inflation, supply shortages and the large order book expected for 2022–2023 led to a significant increase in the Group’s working capital requirements, which, combined with the acquisitions, caused net debt to rise.
Full-year 2021–2022 sales amounted to €977.0 million, up 11.4%. Growth at constant foreign exchange rates and scope was 4.4%. In response to rising raw material and component costs, EXEL Industries has endeavored to optimally adjust prices across all business lines. This policy implemented throughout the year offset certain volume declines due to shortages (mainly in agricultural equipment) or the market (gardening). The currency effect was particularly favorable to the agricultural spraying and industry segments.
The change in consolidation scope represented sales of €29.8 million for the year. Comments on sales per activity are detailed in our press release of October 27, 2022. As previously announced, the Italian company G.F. was acquired on February 15, 2022.
Recurring EBITDA was down to €60 million, or 6.1% of Group sales, compared to €78 million or 8.9% of sales in FY 2020–2021.
This decline can be explained by several factors:
Net income was down to €28.6 million versus €43.5 million in FY 2020–2021. This decrease is mainly due to the reduction in EBITDA and non-recurring items, which were boosted last year by a €5.3 million gain from the revaluation of UK pension commitments. Net income includes the following items:
Net financial debt (NFD) amounted to €160.5 million at September 30, 2022, compared to €42.4 million last year. The decrease in cash over the year is mainly due to working capital requirements, up sharply due to fourth quarter sales growth (up 23% versus Q4 2020–2021) and component shortages. These shortages, less acute than during the first half but still present, prompted the Company to secure the supply of key components in view of the large order book at the start of the 2022–2023 fiscal year. Temporary factors (acquisitions, decrease in EBITDA, and higher working capital) increased 2021–2022 leverage (NFD/recurring EBITDA) to 2.7. However, as the Group’s lines of credit are not subject to covenants, this will not trigger the immediate repayment of debt.
Furthermore, the EXEL Industries Group has lines of credit that allow it to support its operating and, where applicable, external growth requirements. Several lines of credit have recently been renewed, for which interest rates will be adjusted in accordance with the achievement of CSR targets. Some lines were switched to fixed rates when the interest rate curve steepened.
A dividend of €1.05 per share corresponding to 25% of consolidated net income will be proposed to the Annual General Meeting on February 7, 2023.
The Group Audit Committee met on December 14, 2022.
The Board of Directors met on December 15, 2022, and approved the Group parent company and consolidated financial statements for the year ended September 30, 2022.
The Statutory Auditors have finished certifying the parent company and consolidated financial statements and will shortly issue a report without reservations.
After initiating an ambitious process, the Group has continued to strengthen its sustainable development policy, with new financings indexed to CSR criteria and the creation of a CSR committee within the Board of Directors. In 2021–2022, EXEL Industries launched a new initiative at Group level to identify the main catalysts to reduce its Scope 3 greenhouse gas emissions.
SUGAR BEET HARVESTERS
Yves Belegaud, Chief Executive Officer of the EXEL Industries Group
“The 2021–2022 year saw contrasting trends, with a challenging first half followed by margin improvement in the second half thanks to more rigorous price discipline, even if shortages continued to have an impact. The Group has launched various action plans to reduce inventory levels as far as possible. Bolstered by a well-filled order book, the Group is confident about the coming fiscal year despite the current macro-economic uncertainty. Lastly, EXEL Industries has assigned greater priority to sustainable development in its strategy.”
First half 2022–2023 results
Second quarter 2022-2023 sales up 20.4%
“We have everything we need to continue to move the Group forward.”
Check out EXEL Industries' 2021-2022 Annual Report