- Decrease in the Lead segment sales due to the scheduled maintenance shutdown and a current slowdown in production linked to the adaptation phase to the smelter's new configuration
- Solid performance in the Zinc segment on the back of the rise in zinc price
- Strong increase in the Special Metals segment's sales and small decline in the Plastics segment's sales
- Pursuance of the reduction furnace's hot commissioning, started end of June 2018 and to last several weeks
Suresnes, July 26th 2018: the Recylex Group (Euronext Paris: FR0000120388 - RX) has today released its financial information for the first half year of 2018 and for the second quarter of 2018. Consolidated sales for the six-month period to June 30th 2018 totaled €194.6 million, down 11% on the first six months of 2017. Consolidated sales for the second quarter 2018 totaled €99.3 million, up 4% on the same period of 2017.
Consolidated sales by segment (unaudited IFRS figures):
| (€ million) | Six months to June 30th 2018 | Six months to June 30th 2017 | Change (in %) |
| Lead | 124.2 | 151.4 | -18% |
| Zinc | 53.8 | 52.4 | +3% |
| Special Metals | 9.5 | 7.2 | +32% |
| Plastics | 7.1 | 7.3 | -3% |
| Total | 194.6 | 218.3 | -11% |
Sebastian Rudow, Chairman and CEO of the Recylex Group, commented:
"The Recylex group sales' decrease for the first six months of 2018 reflects the deep transition period we are experiencing in our lead segment. The construction works of the Lead segment's reduction furnace were finished on time. As planned, its hot commissioning has started end of June and is currently on going. This key phase requires to perform complete set of tests and to make technical adjustments, therefore it will last several weeks. In this context, the Group is focussing on its working capital requirements. Commissioning such an innovative furnace is a key challenge for us and the ramp-up phase of the reduction furnace's production, currently planned during the third quarter of 2018, shall only start after the successful ending of this hot commissioning phase."
- Trend in metals prices to June 30th, 2018 (in €)1
Compared with the first half of 2017, the lead price average in € of the first half of 2018 recorded a very slight 1% decline, reaching €2,029. In $, the lead price average has increased but this effect has been offset nearly completely by the depreciation of the $. Moreover, between January 2nd and June 30th 2018, lead prices in € experienced a stable evolution and finally decreased only 1%.
Compared to the first half of 2017 the zinc price average in € for the first half of 2018 increased by 9%, reaching €2,699. Although remaining at high level, zinc prices in € experienced a 10% decrease between January 2nd and June 30th 2018: the slight correction at the end of the first quarter continued in the second quarter of 2018.
Average prices for the six-month period to end-June were as follows:
| (in € per tonne) | First half 2018 | First half 2017 | Change (%) |
| Lead price | 2,029 | 2,053 | -1% |
| Zinc price | 2,699 | 2,487 | +9% |
The average $/€ exchange rate increased 12%, from $1.0827 in the first half of 2017 to
$ 1.2109 in the first half of 2018, which impacted negatively the metals prices' performance in €. Between January 2nd and June 30th 2018, the $/€ exchange decreased 3% over the period.
1 Source: London Metal Exchange 2018.
- Breakdown of consolidated sales to June 30th 2018 relative to June 30th 2017
Consolidated sales in the first six months of 2018 came to €194.6 million, down 11% compared with the same period of 2017. Restated2 consolidated sales in the six months to June 30th 2018 came to €207.9 million, a 10% decline compared with the same period of 2017.
- Lead: sales down 18%
In the first six months of 2018, Lead sales accounted for 64% of consolidated sales.
The segment's performance in the second quarter of 2018 did not succeed in offsetting the first quarter's. As a reminder, first quarter 2018 was impacted by a long major scheduled shutdown of the Nordenham smelter (for maintenance and to prepare the connection between the current bath smelting furnace with the new reduction furnace). Despite a favorable base of comparison due to a maintenance shutdown in the second quarter of 2017, Weser-Metall GmbH's smelter production slowed down in the second quarter of 2018 compared to the same period of 2017, due to the adaptation to the smelter's new configuration. This has reduced the availability of the current bath smelting furnace.
For these reasons, production totaled 45,890 tonnes for the first half of 2018, down 20% compared to the first six months of 2017 and the Group reduced its purchasing during the second quarter of 2018, in a context of good availability of scrap batteries.
As a result, the segment's sales reached €124.2 million in the first half of 2018, down 18% compared to the first half of 2017.
- Zinc: sales up 3%
In the first six months of 2018, Zinc sales accounted for 27% of consolidated sales.
Zinc sales totaled €53.8 million in the first half of 2018, up by 3% compared with the same period of 2017. Restated2 Zinc segment sales came to €67.2 million, up 5% compared to the first half of 2017. Sales remained overall at a solid level but the impact of the maintenance shutdowns in the first quarter of 2018 in the Waelz oxides activity and the slightly reduced volumes of sales in the zinc oxides activity were more than offset by the rise in zinc prices.
Sales in the dust recycling activity increased, in line with the zinc price average evolution in the first half of 2018. Total Group Waelz oxide production reached 35,023 tonnes in the first half of 2018, almost stable at -1% compared to the first half of 2017.
The major maintenance shutdown of Harz-Metall GmbH is scheduled for the fourth quarter of 2018 instead of the third quarter of 2018 as initially planned.
Sales in the scrap zinc recycling activity were stable. Zinc oxide production from Norzinco GmbH reached 12,540 tonnes in the first half of 2018, stable compared to the first half of 2017. However, sales volumes were slightly reduced, especially in the zinc dust market, which partly offset the rise in zinc price average.
- Special Metals: sales up 32%
Special Metals contributed 5% of the Group's consolidated sales in the first half of 2018.
PPM Pure Metals GmbH sales stood at €9.5 million, up 32% on the first half of 2017.
Thanks to its commercial efforts and to a higher demand, PPM Pure Metals GmbH increased its sales significantly. In particular, Arsenic sales increased strongly on the back of higher volumes, which more than offset the unfavorable prices evolution. Germanium demand increased as well as prices, which generated significantly improved sales.
- Plastics: sales down 3%
Plastics sales accounted for 4% of consolidated sales in the first six months of 2018.
They totaled €7.1 million, a small 3% decline compared with the first half of 2017.
During the first half 2018, the segment's total production of recycled polypropylene dropped 4% to 6,877 tonnes.
The segment is impacted by a tough market environment. C2P S.A.S in France recorded a slight increase in sales compared with the first half of 2017: the increase in volumes sold during the first quarter of 2018 offset slightly declining prices and decreasing volumes in the second quarter of 2018. C2P Germany GmbH recorded a significant decrease in sales during the first quarter of 2018.
2 When assessing the performance of the Zinc segment, the Group consolidates its 50% investment in Recytech S.A. proportionately, which is not permitted under IFRS. See note 19 to the 2017 consolidated financial statements.
- Ongoing legal proceedings3
The June 29th 2018 update summarizing the proceedings concerning Recylex S.A. is available from the Recylex Group's website at www.recylex.fr - News - Legal proceedings schedule).
3 See press releases dated April 4th 2018; April 11th 2018; May 7th 2018; May 24th 2018 and June 29th 2018.
- Financial agenda
- Next publication: 2018 interim financial results, on Thursday September 6th 2018 (after market)
*************************************
Regenerating the urban mines
With operations in France and Germany, Recylex is a European group specialized in lead, plastics and zinc recycling, as well as a producer of special metals. A key player in the circular economy with long-standing expertise in urban waste recovery, the Group has more than 660 employees in Europe and generated consolidated sales of €450 million in 2017. For more information about Recylex Group: www.recylex.fr, on Linkedin and twitter: @Recylex
*************************************
Press/Investor contact:
Gabriel ZEITLIN
+ 33 (0)1 58 47 29 89
gabriel.zeitlin@recylex.fr
APPENDIX
1. Quarterly trend in metals prices
| (€ per tonne) | First quarter 2018 | Second quarter 2018 | First quarter 2017 | Second quarter 2017 |
| Lead price | 2,052 | 2,006 | 2,138 | 1,963 |
| Zinc price | 2,783 | 2,612 | 2,610 | 2,358 |
Source: London Metal Exchange.
2. Consolidated sales by quarter5
| (€ million) | First quarter 2018 | Second quarter 2018 | First quarter 2017 | Second quarter 2017 |
| Lead | 59.6 | 64.6 | 86.5 | 64.9 |
| Zinc | 27.6 | 26.2 | 28.5 | 23.9 |
| Special Metals | 4.3 | 5.2 | 3.8 | 3.4 |
| Plastics | 3.8 | 3.3 | 3.8 | 3.5 |
| Total | 95.3 | 99.3 | 122.6 | 95.7 |
5 IFRS - 2018 data unaudited, 2017 data audited.
3. Recylex S.A.'s sales5
| (€ million) | Six months to June 30th 2018 | Six months to June 30th 2017 | Change (in %) |
| Lead segment | 41.7 | 45.4 | -8% |
| Services to Group companies | 0.7 | 0.6 | +17% |
| Total sales | 42.4 | 46.0 | -8% |
5 IFRS - 2018 data unaudited, 2017 data audited.
Disclaimer: This press release may contain forward-looking statements that do not constitute forecasts regarding results or any other performance indicator, but rather trends or targets. These statements are by their nature subject to risks and uncertainties as described in the Company's annual report available on its website (www.recylex.fr). Further information about Recylex is available from its website (www.recylex.fr).
