ORAPI’s Board of Directors, which convened on 19 March 2019, under Chairman Guy Chifflot, announced the results of 2018’s consolidated accounts.
• Inflexion of EBITDA
The Orapi Group is working on sustainable growth markets and confirms the return to a favourable sales dynamics. This trajectory, which was visible from Q3 onwards, coupled with the gradual ramp-up of the Lyon Saint-Vulbas plant, enabled the Group to record 2018 sales of €255.9 million (at current scope and exchange rates), up by 5%.
This return to growth has partially smoothed the significant impacts of its reorganizations (plant relocation, site closure, plant start-up costs, etc.) and logistics alignment. EBITDA thus experienced a turnaround in H2 compared to the previous year. In 2018, however, it stood at €9.7 million or 3.8% of turnover. Lagging behind, the current operating profit was €2.7 million, and the net result (Group share) after IT and €2.7 million in financial costs - €3.7 million.
Cash flows related to the activity amounted to €1.9 million, investments to €11.2 million and financing to €13.1 million. At December 31, 2018, free cash is €8.6M.
• Reshaped financial situation, divesture of DACD
As announced, the Group has finalized the renegotiation of its medium- and long-term debt with its banking pool. This operation gives the Group the means to implement its strategic refocusing and operational efficiency plan. Post-closing, on March 15, the Group made the first sale of a non-strategic asset (DACD), whose cash will be used for debt reduction of €17 million, of which €15 million will be available upon signing and €2 million will be related to support over three years. The €13M DACD turnover in 2018 contributed up to €2.3M to the group EBITDA.
• 2019-2021: a major action plan to speed-up the turnaround
Launched lasy January 2019 around a tight team composed of Guy Chifflot, Henri Biscarrat and Laurent Ragueneau (COO), the 2019-2021 plan will accelerate the turnaround. It is structured around four major and realistic working axes:
- reshaping the organization and governance,
- decreasing in WCR and controlling Capex,
- improving profitability: pricing power, recasting of Purchases, and management of gross margin,
- increasing in industrial efficiency: improvement of the productivity of the plant in Lyon Saint-Vulbas, production planning, redesigning logistics and transport.
The implementation of this plan will enable the Group to increase development, on long-term and promising markets, to improve financial performance and strengthen the Group’s financial basis.
« In 2018, Orapi set up a system to improve its results and conducted the study of a new strategic plan for 2019 - 2021. In the second half of 2018, Orapi recorded an acceleration of its sales. In 2019, Orapi reviewed its governance and put in place a plan to improve operational efficiency. We integrate in our factories the maximum of products that we manufacture for our priority customers, while accelerating the digital development of the group. Our priority objective is to restore the group's major financial balances. »
Guy Chifflot, Chairman and CEO, ORAPI Group