ETX-10829_Etex-AR2017_WEB_2018_DEF2 (2)

6.1
Financial report
Consolidated financial statements
Etex Annual Report 2017
Financial report
Consolidated financial statements
Restructuring plans initiated in 2017 mainly relate to the following:
- the closure of the concrete plant in Heidelberg, Germany (charges €3,800 thousand and impairment of equipment for €835
thousand),
- the adaptation of clay tile capacity to market demand, with impact our premises in Malsh and Autenried (Germany), by stopping
production on several lines (charges €7,000 thousand and impairment of equipment for €5,269 thousand),
- the further integration of the fire protection technical construction business into the building board division (€2,850 thousand),
- the manufacturing operations in Chile (charges €1,062 thousand and impairment of equipment for €835 thousand),
- the discontinued scaffolding activities in the United Kingdom (€ 542 thousand),
- other elimination of roles in sales forces and administration in France and South Africa (€ 1,057 thousand).
In 2016, following restructuring plans were initiated:
- the corrugated sheets plant in Heidelberg (Germany) which was closed to further align to the European market demand (charges
€17,331 thousand and impairment of assets for €1,849 thousand); part of the provision booked in 2016 appeared to be in excess
and was reversed in 2017 (€ 3,237 thousand)
- the integration of the German roofing businesses, clay, concrete and fibre cement into one, with impacts on sales organization
and administration (€13,573 thousand); part of the provision booked in 2016 appeared to be in excess and was reversed in 2017
(€ 777 thousand)
- the integration of the fire protection technical construction business into the building board division (€3,620 thousand),
- the elimination of management roles in Europe within the roofing division (€1,320 thousand) and in Latin America (€1,194
thousand),
- the elimination of key management personnel roles (severance payments of €4,012 thousand),
- the relocation and closure of sites within the fire protection business in the United Kingdom (€3,437 thousand) and in France
(€599 thousand),
- the decision to discontinue businesses in Shangai (China) and Sapele (Nigeria) with restructuring charges of €828 thousand and
€3,148 thousand respectively, and impairment of assets for €2,127 thousand.
- additional charges were incurred in 2016 relating to the closure of the plants in Dorfen (Germany) and in Vitry (France) decided in
2015 (€1,472 thousand, net of impairment reversal for € 668 thousand),
- other elimination of roles in sales forces and administration in France, Brazil and the United Kingdom mainly (€ 1,081 thousand).
Health claims impacts are €2,081 thousand in 2016 and €313 thousand in 2017.
Environmental remediation covers various projects which costs were exposed to renovate asbestos-containing sites and properties
The impairment losses incurred in 2017 are mainly relating to office building in Brussels and to raw material preparation in the United
Kingdom; partially offset by reversal of impairment on equipment in Spain.
In 2016 impairment losses relate mainly to finishing lines in Germany, Poland and in Russia (€1,542 thousand) and to equipment in a
quarry that cannot be exploited (€470 thousand).
In 2016, the €500 thousand favourable price adjustment on acquired business have been realised on the acquisition of Russian producer
paints and sprays for passive fire protection, A+B, acquired in 2013.
Other non recurring items mainly include charges relating to acquisition projects and other costs relating to minority shareholders in the
German entity Creaton AG.
In 2016, the main other non recurring items are legal and consulting costs relating to associate participations, acquisitions charges and
doubtful debtors on non operational assets.
Note 5 – Finance income and expense
In thousands of EUR 2016 2017
Interest income from receivables, deposits and cash and cash equivalents (loans and receivables) 3,356 4,141
Positive impact of change in discount rate of long term provisions - 526
Other interest related income 106 20
Interest income 3,462 4,687
Interest expense on financial liabilities measured at amortised cost -47,735 -35,190
Net interest expense on employee benefits -8,175 -8,383
Unwinding of discount long term provisions -133 -210
Negative impact of change in discount rate of long term provisions -3,731 -428
Negative fair value adjustments of interest rate contracts (held for trading at fair value through profit and
loss)
-1 -1
Other interest related charges -3,824 -2,938
Interest expense -63,599 -47,150
Dividend income from shares in non consolidated companies (available-for-sale) 85 136
Net foreign exchange gains (loans and receivables) 46 8,592
Other 310 58
Other finance income 441 8,786
Net foreign exchange losses (liabilities at amortised cost) -10,533 -18,919
Other -1,282 -1,003
Other finance expense -11,815 -19,922
Net finance costs -71,511 -53,599
The lower interest expense on financial liabilities measured at amortised cost is mainly explained by the refund of the retail bond in March
2017, and the refinancing at a lower cost. It includes the effect of interest rate swaps hedging the Group’s interest rate risk: €7,667
thousand paid in 2017 (€7,462 thousand paid in 2016).
The other interest related charges mainly include upfront fee expenses for €2,607 thousand (€3,416 thousand in 2016) in connection with
external financial debt which are amortised over the duration of the loan.
Foreign exchange gains and losses are presented net of the effect of foreign exchange derivative instruments. The net exchange loss is
the result of the Group’s foreign exchange exposure in Argentina, Brazil, Peru and Indonesia, on the current financial asset and liabilities
in these countries.
Etex Annual Report 2017 p. 25
Etex Annual Report 2017 p. 26
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