LAT Latin American Minerals Inc

• Strong revenue growth of +16%, driven by the continued ramp-up of production and the execution of commercial initiatives to partially mitigate inflation.
• Recurring EBITDA loss of €(1.8) million; a significant improvement from H1-2023 of €(17.6) million. This reflects the operational leverage coming from volume growth, and execution of the commercial measures tackling inflation.
• Latecoere continues to invest in its operating platform, in its people and in creating a more resilient business model better positioned to grow with customer requirements, including focusing on quality and on-time delivery.

Regulatory News:

Latecoere (Paris:LAT), a Tier 1 supplier to major international aircraft manufacturers, announced that the Board of Directors approved Latecoere’s financial statements for the six-month period ended June 30, 2024.

André-Hubert Roussel Group Chief Executive Officer, stated: “2023 and the first half of 2024 have been a time of unprecedented challenges for the aerospace supply chain, including Latecoere. However, I am proud of the resilience and adaptability our team has shown in navigating inflationary pressures and supply chain constraints. As OEM volume growth drives increasing activity across commercial, business jet, and defense markets, we are fully committed to supporting this ramp-up while addressing the associated challenges.

We continue to invest strategically in our operations, workforce, and geographic footprint to build a stronger, more competitive Latecoere. Looking ahead, we are optimistic about 2024, with expectations of increased revenue growth, a significant reduction in EBITDA losses, and marked improvements in operational free cash flow. These outcomes reflect the positive impact of our ongoing operational and commercial initiatives. While we remain mindful of the restructuring and working capital demands tied to growth, we are confident in our path forward to deliver enhanced value to our customers and stakeholders.”

1st Half Year 2024 Results

Group (€ million)

June 30, 2023

June 30, 2023 - restated1

June 30, 2024

Revenue

303,8

303,8

352,1

Reported growth

42,9%

42,9%

15,9%

Recurring EBITDA

(18,4)

(17,6)

(1,8)

Recurring EBITDA margin on revenue

-6,0%

-5,8%

-0,5%

Operating free cash flows from continuing operations

(59,1)

(59,1)

(40,9)

Net Cash Flow

(28,1)

(28,1)

(46,2)

Cash and cash equivalents

45,8

45,8

38,8

Net Debt

370,3

370,3

183,5

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

Latecoere’s half-year financial results for 2024 reflect the general increase level of production in the aeronautical sector as a whole. Revenues amounted to €352.1 million, up €48.2 million or +16%. The increase in revenues was driven by higher production rates from OEMs, additional revenue from new business wins.and the conclusion of commercial initiatives to offset inflation.

The Group reported a recurring EBITDA for the first half of 2023 of €(1.8) million, a significant improvement compared to the €(17.6) million reported in the first half of 2023. This turnaround was mainly driven by operating leverage from increased volumes, and the positive benefits coming from both operational and commercial initiatives undertaken by the Group. These positive benefits are still being offset however by continued inflationary pressures on the material cost base and ongoing supply chain disruptions during the ramp up of the operations.

Latecoere’s net financial result amounted to €(9.4) million in the first half of 2024, compared with €(9.1) million in the first half of 2023.

The Group’s net result for the first half of 2024 amounted to €(49.3) million, compared with €(59.6) million for the first half of 2023.

Free cash flow from operations for the period amounted to €(40.9) million, mainly impacted by the negative EBITDA, an increase of working capital, (net of customer advances), to fund the revenue growth, and non-recurring costs.

At the end of June 2024, cash and cash equivalent stood at €38.8 million. The net debt at the end of June 2024 stood at €183.5 million.

To date, the hedging portfolio amounted to $627.1 million at an average EUR/USD rate of 1.12. Since June 30, 2024, the Group has continued to put in place hedges for 2025 and 2026 at attractive terms.

Aerostructures

Revenue for Latecoere’s Aerostructures Division rose by +8% on a reported basis vs 1st half of 2023. The segment’s activity benefited from increased production rates and the benefit of commercial initiatives concluded in 2024.

The division’s recurring EBITDA amounted to €(13.2) million, in line with losses generated in the first half of 2023. Despite the increase in revenue, ongoing supply chain issues impacting the organization during the ramp-up led to significant cost increases, offsetting most of the improvements coming from the additional volumes and better commercial terms and conditions.

Aerostructures (€ million)

June 30, 2023

June 30, 2023 - restated1

June 30, 2024

Consolidated revenue

190,2

190,2

205,6

Reported growth

65,5%

65,5%

8,1%

Inter-segment revenue

11,2

11,2

10,4

Revenue

201,4

201,4

216,0

Recurring EBITDA

(11,8)

(11,0)

(13,2)

Recurring EBITDA margin on revenue

-5,9%

-5,5%

-6,1%

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

Interconnection Systems

Revenues of €146.5 million were up by +29% on a reported basis compared with €113.6 million in the first half of 2023. This growth is notably driven by increased volumes notably for the A320 program and from the benefit of commercial initiatives concluded in 2024.

Recurring EBITDA for the Interconnection Systems division reached €11.4 million, a turnaround from the €(6.6) million from the prior year, reflecting operating leverage from volume increase, tight costs control and better commercial terms and conditions achieved with customers.

Interconnection Systems (€ million)

June 30, 2023

June 30, 2023 - restated1

June 30, 2024

Consolidated revenue

113,6

113,6

146,5

Reported growth

16,3%

16,3%

28,9%

 

 

 

 

Inter-segment revenue

1,3

1,3

1,0

Revenue

114,9

114,9

147,4

Recurring EBITDA

(6,6)

(6,6)

11,4

Recurring EBITDA margin on revenue

-5,7%

-5,7%

7,7%

(1) Restated data: key financial indicators for the first half of 2023 have been restated to reflect goodwill allocation adjustments under IFRS 3, recognized retrospectively in the opening balance sheets of acquired entities prepared at the acquisition date.

2024 outlook

2023 and H1 2024 were challenging periods for the aerospace supply chain industry in general and for Latecoere in particular. These challenges continue to persist throughout 2024, with inflationary pressures and challenges arising from operating within a constrained aerospace supply chain. OEM volume growth for commercial, business jet and defense market sub-segments continues to improve overall revenue, but the ramp-up in activity results in challenges and cost pressures for the whole industry. To alleviate these challenges, Latecoere continues to invest in its operating platform, people and geographic footprint, creating a more resilient business model better positioned to grow with customer requirements. Latecoere's outlook for FY 2024 includes:

• Increased revenue growth;
• Significant reduction in EBITDA losses, resulting from the realization of operational and commercial initiatives, an improving supply chain situation and increased activity across key commercial, business jet and defense market sub-segments and;
• A significant improvement in operational free cash flow reflecting the improvements in operational and commercial initiatives partially offset by restructuring costs, increased working capital due to sales growth and key investments to strengthen Latecoere's competitive position.

Significant Events in the period

On Sunday February 4, 2024, a fire broke out at the Latecoere elementary parts production site in Hermosillo, Mexico. The Hermosillo fire department extinguished the blaze with no injuries. Damage was limited to the surface treatment and painting building. Machining and sheet metal operations were unaffected. Latecoere set up a dedicated team to deal with the consequences of this incident. To date, the estimated financial impact is -€2.7million mainly composed as follows:

• Inventory write-downs of €4.1 million;
• Depreciation of damaged industrial assets for around €1.4 million ;
• Insurance profit received in advance for €5 million ;
• Postponed deliveries of the B787 program from February 2024 to May 2024, while the supply chain was reorganized, resulting in additional production costs.

A claim has been filed with the Group’s insurance companies to cover the property damage suffered and business interruption operating losses. The financial consequence of these events, including receiving a down payment from the insurance coverage, has been fully recognized in the financial statements for the half year period ended June 30, 2024.

Post-closing events

None to report.

About Latecoere

As a Tier 1 partner to major industrial OEMs (Airbus, BAE Systems, Boeing, Bombardier, Dassault Aviation, Embraer, Honda Aircraft Company, Lockheed Martin, Raytheon Technologies, Thales), Latecoere serves the aerospace sector with innovative solutions for a sustainable world. The Group operates in all segments of the aerospace industry (commercial, regional, business, defense, space), in two business areas:

• Aerostructures: doors, fuselage, wings and empennage, connecting rods and customer service;
• Interconnection systems: wiring, avionics furniture, on-board equipment, electronic products and customer service.

At December 31, 2023, the Group employed 5,497 people in 14 countries. Latecoere is listed on Euronext Paris - Compartment B, ISIN Code: FR001400JY13 - Reuters: AEP.PA - Bloomberg: AT.FP

Appendices

Half-Year Consolidated financial statements (IFRS)

Consolidated Income statement

In thousands of euros

June 30, 2024

June 30. 2023*

Sales figures

352 081

303 797

Other operating income

1 742

5 684

Stocked production

16 804

-3 398

Purchases and external charges

-227 282

-199 901

Personnel expenses

-139 946

-123 441

Taxes

-4 542

-3 360

Depreciation, amortization and impairment

-18 550

-21 922

Net additions to operating provisions

-4 914

4 012

Net additions to current assets

-2 339

440

Other products

4 457

2 333

Other expenses

-1 560

-4 533

OPERATING INCOME RECURRING

-24 048

-40 289

Other non-recurring operating income

6 485

10 771

Other non-current operating expenses

-15 648

-21 806

OPERATING INCOME

-33 211

-51 324

Cost of net financial debt

-6 210

-8 823

Foreign exchange gains and losses

-1 079

1 027

Unrealized gains and losses on derivative financial instruments

-57

-40

Other financial income and expense

-2 089

-1 354

FINANCIAL RESULT

-9 435

-9 190

Income tax

-6 674

-148

NET INCOME FROM CONTINUING OPERATIONS

-49 319

-60 663

NET INCOME FROM DISCONTINUED OPERATIONS

 

1 086

NET INCOME

-49 319

-59 576

(*) Restated data: key financial indicators for the first half of 2023 have been restated to reflect Avcorp goodwill allocation adjustments under IFRS 3, recognized retrospectively

Half-Year Consolidated Balance sheet

In thousands of euros

June 30, 2024

Dec. 31, 2023

Goodwill

17 970

17 970

Intangible assets

125 664

132 422

Property, plant and equipment

109 525

113 421

Other financial assets

6 407

6 151

Deferred taxes

1 660

3 078

Derivative financial instruments

579

3 618

Other long-term assets

12

8

TOTAL NON-CURRENT ASSETS

261 817

276 669

Inventories and work-in-progress

239 012

215 622

Trade and other receivables

142 602

116 540

Tax receivables

10 621

11 810

Derivative financial instruments

653

3 710

Other current assets

4 550

4 647

Cash and cash equivalents

39 433

85 423

TOTAL CURRENT ASSETS

436 871

437 751

TOTAL ASSETS

698 689

714 420

In thousands of euros

June 30, 2024

Dec. 31, 2023

Capital

124 968

124 968

Additional paid-in capital

327 251

327 251

Treasury stock

-448

-440

Other reserves

-286 626

-294 134

Derivative financial instruments - effective portion

-11 455

1 532

Net income / loss for the period

-49 319

6 159

ISSUED CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY

104 370

165 335

NON-CONTROLLING INTERESTS

0

0

TOTAL SHAREHOLDERS' EQUITY

104 371

165 335

Borrowings and financial liabilities

93 694

183 186

Repayable advances

20 636

20 694

Commitments to employees

12 133

12 429

Non-current provisions

9 352

33 229

Deferred taxes

7 376

7 826

Derivative financial instruments

10 176

1 097

Other non-current liabilities

1 671

6 853

TOTAL NON-CURRENT LIABILITIES

155 037

265 312

Borrowings and bank overdrafts

146 088

34 808

Repayable advances

2 464

2 254

Current provisions

32 229

1 151

Trade and other payables

186 731

173 070

Tax payable

4 067

5 597

Contract liabilities

18 765

25 720

Other current liabilities

42 344

36 974

Derivative financial instruments

6 593

4 200

TOTAL CURRENT LIABILITIES

439 280

283 774

TOTAL LIABILITIES

594 317

549 086

TOTAL EQUITY AND LIABILITIES

698 689

714 420

Half-Year Consolidated cash flow statement

In thousands of euros

June 30. 2024

June 30. 2023*

(*)Net income for the period

-49 319

-58 153

Adjustment for :

 

 

Depreciation and provisions

26 018

9 676

Elimination of revaluation gains/losses (fair value)

57

40

(Gains)/losses on asset disposals

3 170

2 896

Other non-cash items

1 357

-1 299

Other (*)

3 159

778

CASH FLOW AFTER COST OF NET DEBT AND TAX

-15 558

-46 064

Of which cash flow from discontinued operations

 

-11 106

Income tax expense

6 674

675

Cost of debt

6 209

8 823

CASH FLOW FROM OPERATIONS BEFORE COST OF DEBT AND TAX

-2 675

-36 566

Change in inventories net of provisions (**)

-25 014

18 886

Change in trade and other receivables net of provisions (**)

-29 713

-27 788

Change in trade and other payables (**)

12 633

478

Tax paid

-3 044

-2 676

CASH FLOW FROM OPERATING ACTIVITIES

-47 813

-47 664

Of which cash flow from operating activities related to discontinued operations

 

-2 578

Impact of changes in scope of consolidation

 

0

Acquisitions of tangible and intangible fixed assets (including change in fixed asset suppliers) (***)

-13 228

-19 320

Acquisition of financial assets

414

0

Change in loans and advances

1 426

1 781

Disposal of property, plant and equipment and intangible assets

1 414

1 075

Dividends received

0

0

CASH FLOW FROM INVESTING ACTIVITIES

-9 974

-16 464

Of which cash flow from investing activities related to discontinued operations

 

-598

Capital increase

0

0

Purchase or sale of treasury shares

-8

9

Bond issues

24 988

51 753

Loan repayments

-422

-1 849

Repayment of lease obligations

-5 285

-5 374

Interest paid

-6 268

-8 595

Cash flow from repayable advances

150

-74

Other flows from financing activities

-1 556

 

CASH FLOW FROM FINANCING ACTIVITIES

11 598

35 871

+/- impact of exchange rate fluctuations

-93

145

CHANGE IN NET CASH AND CASH EQUIVALENTS

-46 281

-28 113

Of which net cash from discontinued operations

0

-3 176

Opening cash and cash equivalents (net of bank overdrafts)

85 102

73 897

Closing cash and cash equivalents (net of bank overdrafts)

38 821

45 784

(1) This item consists solely of calculated income and expenses relating to share-based payments. (2) In June 2023, changes in inventories net of provisions were impacted by €14.3m by changes in inventories relating to the Bombardier business. Changes in trade and other receivables are impacted by -4.1 M€ and changes in trade and other payables by 1.6 M€. The impact on operating cash flow is shown on the line 'Of which cash flow from operating activities related to discontinued operations'. (3) Total purchases of property, plant and equipment and intangible assets differ from the total presented in note 6 due to the inclusion of changes in fixed asset suppliers and the impact of new leases which have no impact on cash flow. In 2023, the earn-out paid by the Mades entity has been reclassified under “Other cash flows from financing activities”. (*) Restated data: key financial indicators for the first half of 2023 have been restated to reflect adjustments to the allocation of Avcorp goodwill under IFRS 3, accounted for retrospectively.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223291910/en/

Thierry Mahé / Media Relations +33 (0)6 60 69 63 85 LatecoereGroupCommunication@latecoere.aero