ETX-10829_Etex-AR2017_WEB_2018_DEF2 (2)

6.1
Financial report
Consolidated financial statements
Etex Annual Report 2017
Financial report
Consolidated financial statements
Note 23 – Loans and borrowings
In thousands of EUR 2016 2017
Bank loans 393,258 514,363
Other financial loans 524 11,213
Obligations under finance leases 1,745 4,159
Redeemable preference shares 3,407 -
Total non-current financial liabilities 398,934 529,735
In thousands of EUR 2016 2017
Bank loans 86,216 19,633
Retail bond 399,692 -
Bank overdrafts 3,803 3,045
Other financial loans 29,778 190,271
Obligations under finance leases 112 220
Redeemable preference shares 3,407 -
Total current financial liabilities 523,008 213,169
In March 2017, Etex repaid its outstanding retail bond of €400 million, as well as the remaining outstanding amount of €26 million on the
old Schuldschein. This was financed with the proceeds of the sale of Etex’s Ceramics business in Latin America in 2016, the issuance of
a new Schuldschein in October 2016, as well as with the group’s cash flow generation. The Syndicated Facility of €600 million was drawn
at €160 million per end of 2017 (drawn at €0 per end of 2016), and will mature in January 2019. It is being used for general corporate
purposes.
Etex also makes use of a Commercial Paper program of €200 million, drawn at €157.6 million per end of 2017 (€4 million per end of
2016).
In 2017, Etex continued to roll-out its € 200 million non-recourse Factoring Program, through which customer receivables from 18 entities
in 10 European countries are being sold to a pool of banks on a non-recourse basis. Per end of 2017, €200 million were financed through
that program, out of which €166.9 million was eligible for trade receivables derecognition.
The utilisations of the Syndicated Loan Facilities may be in Euro or other freely available currencies, as agreed. The interest payable is
calculated at the relevant interbank rate for the period of the utilisation that has been chosen by the borrower, floored at 0%, plus the
applicable margin. The Credit Facility, Retail Bond and Schuldschein contain a number of operating covenants, including restrictions on
giving security to lenders, on the amount of external subsidiary borrowings and restrictions on the acquisition and the disposal of material
assets. They also contain financial covenants which include in particular required ratios of consolidated net debt to consolidated EBITDA
of the Group and operating profit interest coverage.
Transaction costs on the Syndicated Loan and on the new Schuldschein Loan of 2016 have been deducted from the loan at initial
recognition and are being amortised over the life of the extended loan. The amount still to be amortized at the end of 2017 amounts to
€2.198 thousand (€4.804 thousand at the end of 2016).
Finally, for its local funding, the Group is relying on some long-term and short-term facilities with local banks for a total amount of €87.2
million end of 2017.
In Latin America, the main countries with local financing are Brazil and Colombia. In 2017, thanks to the cash received from the sale of
Etex’s Ceramics business in the region, most of our Latin American affiliates have been able to reimburse part or all of their external
debt.
Peru has reimbursed all is external debt
Brazil has a total drawn amount of €25.0 million borrowed in Brazilian real (€69.2 million at the end of 2016) with a maturity in 2020. It is
used to finance part of the new Santa Cruz plant.
Colombia has a total drawn amount of €7,4 million in Colombian pesos (€7.9 million in 2016).
- Skinco mainly relies on a €1,3 million short term loan ending in March 2018.
- Gyplac has a short-term loan of €6,1 million ending in January and April 2018.
To end this overview, the Group has 3 other countries using external financing, Romania, Indonesia and Spain.
Romania has an external loan for a total amount of €16.8 million borrowed in Romanian Leu with ING Romania, the loan is used to
finance part of the new Turceni plant.
Indonesia, has contracted a loan of €21.7 million with BNP Brussels maturing in 2020. The loan is used to finance part of the investment
in the new West Java plant.
Pladur Gypsum Spain is financed via Spanish state subsidised loans for €10.9 million and with Ibercaja Banco for €1.9 million.
The management of interest rate risk is described in Note 16.
Net financial debt
The net financial debt position is calculated as follows:
In thousands of EUR 2016 2017
Non-current loans and borrowings 398,934 529,735
Current portion of loans and borrowings 523,008 213,169
Current financial assets -8,731 -3,137
Cash and cash equivalents -283,235 -107,013
Net financial debt 629,976 632,754
Finance lease liabilities
The Group has finance leases for various items of plant, property and equipment. Future minimum lease payments, interest payments
and present value of payments are as follows:
In thousands of EUR 2016 2017
Minimum lease
payments Interest Present value
Minimum lease
payments Interest Present value
Less than 1 year 116 -4 112 431 -211 220
Between 1 and 5 years 921 -455 466 2,651 -1,109 1,542
More than 5 years 1,668 -389 1,279 3,329 -712 2,617
Total 2,705 -848 1,857 6,411 -2,032 4,379
Operating leases
The total expenses for operating leases recognised in the consolidated income statement for 2017 amount to €38,391 thousand (€39,609
thousand in 2016). Future committed operating lease payments are as follows:
In thousands of
EUR 2016 2017
Less than 1 Between 1 and
year 5 years
More than 5
years
Total
Less than 1 Between 1 and
year 5 years
More than 5
years
Buildings 11,251 21,358 18,291 50,900 9,125 14,891 14,084 38,100
Equipment 7,296 9,575 1,897 18,768 7,184 12,441 1,203 20,828
Total 18,547 30,933 20,188 69,668 16,309 27,332 15,287 58,928
Note 24 – Deferred tax
In thousands of EUR Assets Liabilities Net
Net carrying amount at 31 December 2016 150,262 139,545 10,717
Translation differences -2,472 -2,503 31
Recognised in income statement -33,728 -33,155 -573
Recognised in equity 20,871 38,471 -17,600
Change in scope of consolidation 2,840 7,451 -4,611
Netting -22,680 -22,680 -
Net carrying amount at 31 December 2017 115,093 127,129 -12,036
Total
Etex Annual Report 2017 p. 53
Etex Annual Report 2017 p. 54
148 149