Plastic Omnium - 2018 Registration Document

4 2018 CONSOLIDATED FINANCIAL STATEMENTS Comments on the year and outlook www.plasticomnium.com PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 130 GROWTH IN ALL REGIONS OVER THE FULL YEAR In millions of euros and % of economic revenue By region 2017 2018 Change Change like-for-like (3) Europe/Africa 4,050.1 4,487.2 +10.8% +1.7% 52.8% 54.4% North America 2,035.5 2,148.9 +5.6% +1.1% 26.6% 26.1% Asia, including China 1,318.2 1,414.7 +7.3% +7.1% 17.2% 17.2% South America 261.4 193.2 -26.1% +2.1% 3.4% 2.3% ECONOMIC REVENUE 7,665.1 8,243.9 +7.6% +2.4% Joint ventures 1,232.1 999.3 -18.9% +8.7% CONSOLIDATED REVENUE 6,433.0 7,244.6 +12.6% +1.6% Over the whole of 2018, business activity in Europe, which represents 54% of total revenue, was up by 10.8%. It benefited from the full consolidation of HBPO on July 1, 2018, 60% of whose activity is European. On a like-for-like basis, the business, up by +1.7%, outperformed worldwide automotive production, down by -1.8%, by 3.5 points. Germany is the leading contributor to the Group’s revenue, posting 17% of total sales. Over the year, the country’s revenue was down by -5.9%. Excluding Germany, revenue grew by +5.6%, driven primarily by Eastern Europe, particularly Slovakia with the Porsche Cayenne. Business in North America grew by +1.1% on a like-for-like basis over the year, with automotive production down by -0.7%, resulting in an outperformance of 1.8 points. The Group was boosted by strong business in Mexico, particularly with the plant at San Luis Potosi (launching Daimler’s A-Class). This offset the falls in volumes linked to the gradual ramp-up of bumpers for BMW’s new X5 model, achieved simultaneously with a transfer of production between the American Anderson and Greer facilities. The end of the transition period between Anderson and Greer, which will conclude with the closing of the Anderson facility mid 2019, the launch of new programs, particularly in the Mexican plants, and the ramp-up of HBPO business in the region, will help the Group speed up growth in North America in 2019. Business in Asia, including China, grew by +7.1% like-for-like over the year when automotive production was down by -1%, giving an outperformance of 8.1 points. In China, which accounts for revenue of €793.5 million, i.e. 10% of total sales, growth in business like-for-like came to +10.8% in 2018. In this country, the Group has benefited from market share gains and a ramp-up of the current industrial facility, which in the years ahead will be augmented by the development of HBPO’s business, including an initial site built in 2017 and 3 additional sites scheduled by 2021. In 2018, Volkswagen remained the Group’s leading customer with 24.6% of economic revenue, ahead of PSA Peugeot Citroën with 11.5% and General Motors with 11.3%. In 2018, German carmakers remained the top contributors to Group’s economic revenue with 38% of the business, ahead of Asian carmakers with 24%, American carmakers with 22%, and French carmakers with 15%. In total, the Group has a diversified portfolio of 83 customer brands. OPERATING MARGIN COMPARABLE TO THAT OF 2017, UNDER IFRS 5, AND STRONG GROWTH IN NET PROFIT DRIVEN BY SCOPE EFFECTS Consolidated gross margin was €1,060.2 million, versus €1,027.1 million in 2017. It represented 14.6% of consolidated sales, versus 16.0% in 2017. Gross R&D spend was €417.8 million, representing 5.8% of consolidated revenue (compared with €394.6 million in 2017 and 6.1% in 2017), an increase of 5.9%. Net R&D spend, i.e. after deduction of capitalized development costs and amounts re-invoiced to customers, was €204.3 million (2.8% of consolidated revenue, versus 2.6% in 2017), compared with €168.0 million in 2017. Selling costs were €37.4 million (0.5% of consolidated revenue) compared with €40.9 million (0.6% of consolidated revenue) in 2017. Administrative expenses fell from €245.0 million in 2017 to €241.8 million in 2018 and represent 3.3% of consolidated revenue, versus 3.8% in 2017. Amortization of intangible assets acquired in business combinations represented an expense of €18.4 million in 2018, compared with €20.3 million in 2017. The share of profit of associates and joint ventures amounted to €51.9 million in 2018, versus €61.7 million in 2017. This trend is explained by the full consolidation of HBPO in the Group’s financial statements as of July 1, 2018.