ALCOI COIL

2023 ANNUAL RESULTS

• Sales of €21.8m (down 18.0%) were impacted by the difficult economic climate.
• Current operating income was a loss of €(2.1)m due to lower sales and lower absorption of fixed costs.
• Net profit reduced its loss to €(2.2)m, compared with €(3.0)m in 2022, and includes non-recurring items relating to an impairment loss on the goodwill and exceptional write-backs of depreciation and provisions in respect of investment subsidies in Germany.
• Net debt under control at 24% of equity at 31 December 2023.
• In 2024, COIL will roll out its strategic agreement to leverage its technology and brand in China.

COIL, world leader in aluminium anodising, has released its annual results for the 2023 financial year.

• Significant events of the financial year

Following two years of growth in 2021 (+9.7%) and 2022 (+5.6%) driven by post-Covid recovery, the Company's sales fell by -18.0% to €21.8m in 2023. This downturn coincided with slowing global economic growth, reduced demand in key markets, and persistent economic and geopolitical uncertainties.

Tolling sales (80% of 2023 sales) were adversely affected by destocking in the distribution chain due to low aluminium price following the major distortion in the market caused by the post-COVID market. In addition, the Company was faced with the emergence of a new competitor in the European continuous anodising market. In this context, tolling sales contracted by 15.3% year-on-year.

Package sales including metal (20% of 2023 sales) were impacted by the decline in new architectural projects in Europe as from the second half of 2023 and by the slow post-Covid recovery in the projects business in Asia.

The Company has done its utmost to limit the impact of this slowdown by raising its prices and optimising its variable costs. Nevertheless, due to a high fixed cost structure, the sharp fall in sales has a significant impact on the Company's results, since variable costs represent only around 36% of sales.

• Results

Despite the €4.8m drop in sales, EBITDA fell by only €2.3m to €0.6m, or 2.6% of sales. This was mainly due to i) a smaller fall in gross margin, resulting from a favourable change in the product mix and a reduction in variable production costs, particularly energy costs in Germany, and ii) higher operating costs in an inflationary environment.

The contraction in volumes sold had a significant impact on income from ordinary operations, which fell by €2.0m to a loss of €2.1m, compared with a loss of €0.1m in 2022.

Operating result was a loss of €2.7m, including non-recurring items such as:

• the negative impact of the impairment loss on the goodwill of continuous anodising assets (€1.3m in 2023 compared with €2.5m in 2022) as a result of a change in market conditions and the application of certain IFRS accounting standards1. It should be noted that this impairment has no impact on the Company's cash position.
• the positive impact of the exceptional write-back of depreciation on investment subsidies in Germany (€0.7m), which had been recognised in the first half of 2023 following the audit carried out by the German authorities in connection with the subsidies paid for the construction of the Bernburg plant, which revealed that the requirements of the award notice dated 2 May 2012 had been met.

The net result was a loss of €2.2m, compared with a loss of €3.0m in 2022. It includes exceptional financial income of €0.7m, relating to a reversal of provisions for interest due in the event of repayment of subsidies in Germany.

• Summary income statement

• Balance sheet

After taking into account profit for the year, shareholders' equity at 31 December 2023 was €21.4m, down €2.2m on 31 December 2022. Net financial debt at 31 December 2023 was €5.2m (€0.9m lower than at 31 December 2022) and remained at reasonable level, representing 24% of equity, compared with 26% at 31 December 2022.

• Business trends since the start of the 2024 financial year

The first quarter of 2024 followed the trend observed in 2023. Quarterly sales amounted to €5.0m, down 21.3% on the same period last year. Package sales (€1.0m; -39.9%) were down against a high comparison base in the first quarter of 2023, which recorded +37.3% growth. At the same time, the destocking by metal distributors and the increased competition in the European continuous anodising market continue to weigh on tolling sales (€4.0m; -14.7%).

Quarterly sales did not incorporate the initial payments resulting from the collaboration and licensing agreement recently signed with a Chinese company. This partnership, announced on February 14, 2024, entails the use of the Company's technology and brand in China. Notably, the Company received a first upfront payment of €1m in April 2024. The agreement's execution signifies the anticipation of further milestone payments and a consistent flow of royalties, which are expected to bolster the Company's developmental funding.

• Outlook

In 2024, the Company aims to replicate its success in continuous anodising within the high-demand Asian market, from a tailored, competitive, and value-driven business model. In Europe, it remains cautious due to ongoing macroeconomic challenges and anticipates continued weak demand affecting tolling volumes. However, the Company's flexible industrial resources will enable it to react quickly to any improvement in demand during the year.

By leveraging its technological and commercial assets and diversifying its positions in mature and emerging markets, the Company is confident in its development prospects, capitalising on its broad portfolio of premium, sustainable products with a smaller carbon footprint to boost its business potential.

• Additional information

The financial statements were approved by the Board of Directors on 29 April 2024. They are included in the 2023 consolidated annual accounts available on the Company's financial website (http://investors.coil.be).

• Agenda

About COIL

COIL is the world's leading anodiser in the building and industrial sectors and trades under the ALOXIDE brand name.

Anodising is an electrochemical process (electrolysis) which develops a natural, protective oxide layer on the surface of aluminium and can be coloured in a range of UV-proof finishes. It gives the metal excellent resistance to corrosion and/or reinforces its functional qualities. Anodising preserves all the natural and ecological properties of aluminium; it retains its high rigidity and excellent strength-to-weight ratio, its non-magnetic properties, its exceptional resistance to corrosion. The metal remains totally and repeatedly recyclable through simple re-melting. Anodised aluminium is used in a wide variety of industries and applications: architecture, design, manufacturing, and the automotive sector.

COIL deploys an industrial model that creates value by leveraging its unique know-how, its operational excellence, the quality of its investments and the expertise of its people. COIL has around 110 employees in Belgium and Germany and generated a turnover of €21,8 million in 2023.

Listed on Euronext Growth Paris | Isin: BE0160342011 | Reuters: ALCOI.PA | Bloomberg: ALCOI: FP

For more information, please visit www.aloxide.com

Contact

1 The recognition of this unrealised impairment loss results from the application of the IAS36 standard. This standard prescribes that an entity is obliged to reduce the asset value (in casu, the goodwill value related to the continuous anodising unit) to ensure that the asset is carried at no more than its recoverable amount. Such reduction qualifies as an impairment loss, which does not have any impact on the cash position of the company.2 Anodising and metal included.

Attachment

• COILpressrelease30april2024_EN_Vdef

COIL (EU:ALCOI)
Historical Stock Chart
From Oct 2024 to Nov 2024

COIL (EU:ALCOI)
Historical Stock Chart
From Nov 2023 to Nov 2024