CHARGEURS (EPA:CRI) - CHARGEURS - First Quarter 2019 Revenue

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06/05/2019 07:00

FIRST-QUARTER 2019 REVENUE: NEW ACCELERATION IN OVERALL GROWTH BY MORE THAN 11%

PRESS RELEASE

Paris, May 6, 2019

    Quarterly revenue exceeds the EUR160 million mark for the first time

- Revenue up by a sharp 11.3% despite a very high basis of comparison with the
  first quarter of 2018
- Reinforced financial flexibility, following the renegotiation of the
  financial terms and conditions of Chargeurs' Euro PP notes to align them with
  those of the syndicated credit agreement signed in December 2018
- Continuation of the Group's active external growth drive in 2019
- Launch of ''Chargeurs for future'' - a new program dedicated to investment
  in innovation and game-changing technologies

"Chargeurs began 2019 on a strong commercial footing across all continents
despite a volatile environment. Sales in the first quarter reached a new record
high as the Group reaped the benefits of recent acquisitions, continued with
its premiumization strategy as part of the Game Changer plan, and took its
financial flexibility to a new level. Today, Chargeurs has confirmed that it is
on track to achieving its strategic objective of topping EUR1 billion in
revenue by the end of 2021", said Michaël Fribourg, Chargeurs' Chairman and
Chief Executive Officer.

FURTHER ACCELERATION IN OVERALL GROWTH IN FIRST-QUARTER 2019

Consolidated revenue for the first quarter of 2019 rose by a sharp 11.3% to
EUR161.2 million, led by the ongoing optimization of the product mix, a 1.0%
favorable currency effect mainly deriving from the US dollar, and a 15.0% scope
effect linked to acquisitions carried out in 2018 (UK-based Leach in Technical
Substrates, and US and Asia-based PCC Interlining in Fashion Technologies).
This performance was achieved despite a very high basis of comparison with the
first quarter of 2018, when revenue for the Protective Films business hit
record levels at like-for-like production capacity.

As announced, the Group pursued its premiumization strategy in all of its
businesses and continued to concentrate on very high value-added products and
services. Boosted by the Game Changer plan, Chargeurs maintained its strategy
of focusing its production on premium offerings and made some selective
operating choices, particularly in the Protective Films business.

ROBUST REVENUE CONTRIBUTIONS FROM ALL GEOGRAPHIC REGIONS IN FIRST-QUARTER 2019

                    First quarter          Change 19/18
In euro millions    2019      2018      Reported  Like-for-like*
Europe              78.4      77.1        +1.7%         -1.9%
Americas            38.4      34.1       +12.6%         +3.7%
Asia                44.4      33.6       +32.1%        -19.4%
Chargeurs          161.2     144.8       +11.3%         -4.6%

* Based on a comparable scope of consolidation and at constant exchange rates

The Group's 11.3% revenue growth for first-quarter 2019 can be analyzed as
follows by geographic region:
* In Europe, revenue rose 1.7%, fueled by (i) solid sales momentum propelled by
  the acquisition of UK-based Leach in Technical Substrates, and (ii) new
  strategic industrial partnerships signed in the Luxury Materials business.

* In the Americas, revenue advanced 12.6%, thanks to (i) the integration of PCC
  Interlining into the Fashion Technologies business in 2018, and (ii) a very
  positive currency effect due to the rise in the US dollar (although this
  was partly offset by a weaker Argentine peso). Like-for-like growth came in
  at 3.7%, underpinned by the capture of new strategic markets and brisk sales
  momentum in North America (the United States and Mexico) spurred by the
  stronger US dollar.

* In Asia, revenue leapt 32.1% on the back of the strategic integration of PCC
  Interlining into the Fashion Technologies business in August 2018. This
  performance was achieved in spite of some Luxury Materials orders being
  postponed (notably due to the fact that China will be reducing its standard
  VAT rate from April 1, 2019) and a very high basis of comparison in New
  Zealand with first-quarter 2018.

SIGNIFICANT EVENTS OF FIRST-QUARTER 2019

                       First quarter    Change 19/18         Change
In euro millions     2019   2018   2017 Reported  Like-for    19/17
                                                  -like*
Protective Films     69.2    74.7   70.9  -7.4%    -9.5%      -2.4%
Fashion Technologies 53.0    33.8   33.6  56.8%     2.4%      57.7%
Technical Substrates  8.1     6.3    6.6  28.6%   -12.7%      22.7%
Luxury Materials     30.9    30.0   32.3   3.0%     1.3%      -4.4%
Chargeurs           161.2   144.8  143.4  11.3%    -4.6%      12.3%
* Based on a comparable scope of consolidation and at constant exchange rates

The Group's 11.3% revenue growth for first-quarter 2019 can be analyzed as
follows by operating segment:
* Chargeurs Protective Films posted EUR69.2 million in revenue, representing
  one of the best quarterly performances in its history and testifying to its
  market clout. As previously mentioned, year-on-year comparisons should be
  made bearing in mind that first-quarter 2018 figures reached record highs and
  were boosted by a very strong operating context. During the first quarter of
  2019, Chargeurs Protective Films was able to firmly hold its ground both in
  terms of sales volumes and prices. It achieved this despite a less favorable
  economic environment in Europe - especially in Germany where customers have
  adopted a much more wait-and-see attitude - as well as in China, where some
  customers postponed their orders to the second quarter of the year, when the
  new lower VAT rate will be introduced. Chargeurs Protective Films pursued its
  premiumization strategy during the period by prioritizing certain types of
  production and making selective operational choices. This allowed it to
  effectively prepare for new strategic premium production at its Sessa plant
  in Italy, which will come on stream in the second half of 2019. The
  additional production capacity will strengthen the business line's sales
  clout for premium value-added products, while also ensuring that its client
  base around the world continues to benefit from the level of service that
  makes it the leader it is today. Drawing on its numerous structural
  strengths, Chargeurs Protective Films intends to actively pursue its strategy
  of consolidating its global leadership position throughout 2019. To date,
  despite the more volatile economic environment, Chargeurs Protective Films'
  order book is higher than in the same period of 2018.

* Chargeurs PCC Fashion Technologies delivered solid like-for-like growth of
  2.4% in first-quarter 2019, led by its customer-centric strategy. On a
  reported basis, revenue surged 56.8%, mainly driven by the integration of US
  and Asia-based PCC Interlining in 2018, and despite a negative 2.1% currency
  effect (primarily due to the Argentine peso). The business reaped the
  benefits of new synergies leveraged during the period and continued to ramp
  up the premiumization of its product and service offerings. By strategically
  strengthening its positions in all of the geographic regions around the world
  where it produces and distributes technical textiles for the fashion and
  luxury industries, Chargeurs PCC Fashion Technologies was able to accelerate
  its geographic expansion and value creation while increasing its global
  leadership.

* Chargeurs Technical Substrates reported 28.6% revenue growth for the first
  three months of 2019. This year-on-year increase was fueled by the
  integration, in May 2018, of Leach - a leading UK-based specialist in large-
  format graphic displays - which has enabled the segment to propose a new and
  unique offering of end-to-end visual communication solutions and access new
  strategic markets. First-quarter 2019 growth also reflects an improved
  product mix. Buoyed by the acquisition of Leach, Chargeurs Technical
  Substrates is pursuing its capital expenditure drive to accelerate its
  global geographic expansion, while breaking into new markets that have high
  innovation potential and strong long-term growth prospects. It is also
  continuing to implement its consolidation strategy and is standing by its
  target of topping the EUR100 million revenue mark by end-2021.

Chargeurs Luxury Materials' revenue came to EUR30.9 million in first quarter
2019, up 3.0% year on year as reported and 1.3% like for like. The main growth
drivers during the period were a better product mix and a favorable currency
effect, notably stemming from the US dollar. The segment enjoyed another period
of robust sales, driven by its new strategic contract in Europe and the
integration of Responsible Wool Standard (RWS) certification in its Organica
Precious Fiber label, the world's leading label for certified and traceable
premium-grade fibers designed for the most prestigious global luxury and
sportswear brands. Lastly, it is continuing to roll out its new luxury online
brand, Amédée 1851, which is specialized in scarves and squares made of
premium-grade fibers.

FINANCIAL POSITION

In the first quarter of 2019, Chargeurs successfully renegotiated the indenture
for its Euro PP notes issued in 2016 and 2017, in order to align the notes'
financial terms and conditions with those of the syndicated credit agreement
signed in December 2018. This involved removing the leverage covenant, lowering
the gearing requirement to 1.2x and extending the maturity of the notes by
three years until 2023 in order to extend the average maturity of the Group's
debt and stagger its repayments.

This successful renegotiation has enabled the Group to further increase its
financial flexibility.

OUTLOOK CONFIRMED

Barring any changes in the geopolitical and macro-economic climate, for
full-year 2019 Chargeurs is aiming to achieve further growth in its overall
performance and once again increase its revenue and recurring operating profit
while generating solid cash flow, drawing on its solid fundamentals, reinforced
financial flexibility, the iconic brands strategy underpinning its Game Changer
plan, and its very long-term shareholder vision. The Group also intends to
actively pursue its strategy of acquisitions with highly profitable profiles.

As well as accelerating its capital expenditure drive dedicated to innovation
in game-changing technologies, Chargeurs has announced the launch of a new
strategic investment program called "Chargeurs for future".

Backed by its numerous structural strengths, which are enabling it to
increasingly stand out from the competition, the Group has every confidence
that it will be able to meet its strategic objective of topping EUR1 billion in
profitable revenue by the end of 2021.

Appendices - Definitions:
Like-for-like change (LFL) - Like-for-like growth:
Like-for-like changes in year Y compared with year Y-1 are calculated:
* by applying the average exchange rates for year Y-1 to the period concerned
(year, half-year, quarter); and
* based on the scope of consolidation for Year Y-1.

Revenue by geographical market (or destination):
Revenue by geographical market (or destination) is presented according to
customer location.

Financial Calendar

Thursday, September 12, 2019
(before the start of trading)  First-half 2019 results
Thursday, November 14, 2019
(after the close of trading)   Third-quarter 2019 financial information

ABOUT CHARGEURS
Chargeurs is a global manufacturing and services group with leading positions
in four segments: temporary surface protection, garment interlinings, technical
substrates and combed wool.

It has over 2,000 employees based in 45 countries on five continents, who serve
a diversified customer base spanning more than 90 countries.

In 2018, revenue totaled EUR573.3 million, of which more than 90% was generated
outside France.

CONTACTS - www.chargeurs.fr
Group Corporate Communications - +33 1 47 04 13 40 - comcorporate@chargeurs.fr
Group Financial Communications - +33 1 47 04 13 40 - comfin@chargeurs.fr

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