Acquisitions contribute significantly to strong Growth of IMCD in 2018
Specialty Chemicals distributor IMCD N.V. (Rotterdam, The Netherlands) reported last Friday on the performance for 2018. Sales (or revenues as IMCD calls it) were EUR 2’379.1 mn, up 25% from EUR 1’907.4 in 2017 (+29% on a constant currency basis). IMCD say the growth comes from its existing business (10%), the effect of acquisitions (18%) and some negative currency effects at -3%.
Gross Profit grew by 25% to EUR 536.1 mn (+29% on a constant currency basis) and Operating EBITA 25% to EUR 202.1 mn (+30% on a constant currency basis) . This represents a return on sales of 8.5%, virtually unchanged from the previous year and a conversion marging (= Operating EBITA as percentage of Gross Profit) that was flat at a level of 37.7%.
The resulting in Cash Earnings per Share (i.e. before amortisation) were EUR 2.53, an increase of 23% when compared with the result for 2017 at EUR 2.06. Free cash flow increased by 3%, from EUR 161.3 mn in 2017 to EUR 166.5 mn, as the higher operating EBITA was partially offset by higher working capital investments required to support sales growth and also resulting from the acquisitions made in 2018.
IMCD plans to propose a dividend of EUR 0.80 per share in cash, up 29% from the EUR 0.62 per share paid for 2017. Pending approval at the AGM in May this would result in the comapny paying EUR 42 mn or 32% of the Net Result 2018, adjusted for non-cash amortisation charges and net of tax.
The (geographical) operating segments showed a mixed picture, mostly driven by strong M&A activities in the Americas. EMEA (defined as Europe, Turkey and Africa) posted revenues of EUR 1’240.8 mn (up 9% as reported or 10% on a constant currency basis). Operating EBITA in the region grew from EUR 112.6 mn to EUR 127.8 mn, up 14% as reported and 16 % when adjusted for currency effects. Asia-Pacific generated revenues of EUR 335.7 mn (up from EUR 314.9 mn, or +7% as reported, +14% in constant currency). Operating EBITA in that region came in at EUR 31.2 mn, which compares with EUR 28.1 mn in 2017, up 11% as reported and 19% when adjusted for currency effects. In the Americas the effect of acquisitions completed during the last 18 months (i.e. Bosco Industries in July 2017, L.V. Lomas in September 2017 and E.T. Horn in July 2018) was significant. Revenues were EUR 802.6 mn, up from EUR 450.7 mn or +78% as reported (or +88% adjusted for currency effects) in 2017. Operating EBITA was EUR 60.1 mn, up 69% from the EUR 35.5 mn in the previous year (a growth of 79% at constant currency).
Structural cost increased, resulting in a Operating EBITA for the “holding companies” (i.e. the head office in Rotterdam and regional head offices in Sinagpore and New Jersey, United States of America) of EUR -17.0 mn (compared to EUR -14.5 mn in 2017).
The original press release can be accessed via the link below:
Source: IMCD press release
HGE / DCG – 04.03.2019