Plastic Omnium - 2018 Registration Document

4 2018 CONSOLIDATED FINANCIAL STATEMENTS Comments on the year and outlook www.plasticomnium.com PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 132 SOLID FINANCIAL STRUCTURE The net financial debt totaled €698 million as at December 31, 2018, up by €127 million compared with December 31, 2017. It includes an enterprise value of €350 million for the takeover of HBPO last July, the global leader for front-end modules, offset in part by an enterprise value of €220 million for the disposal of the Environment business completed in December 2018. In 2018, the Group distributed dividends to the value of €101 million. Additionally, it pushed ahead with the buy-back of 2.1 million treasury shares for a total net amount of €71 million and canceled 2.4 million shares, thereby increasing the share of control held by Burelle SA from 57.57% to 58.51%. The Group’s net debt now represents 32% of equity and 0.8x EBITDA. strengthening the Group’s financing structure by extending the maturity of its debt and diversifying its sources of financing. Furthermore, in December 2018 Compagnie Plastic Omnium invested in a Schuldscheindarlehen (private investment under German law) for €300 million. This private investment, without covenant or rating, carries a 7-year maturity and offers a fixed coupon of 1.632%, thereby As at December 31, 2018, the Group can call on available resources of €3 billion, including undrawn lines of credit worth €1.2 billion. INVESTMENTS 2019-2021 4.1.2 In a volatile market context, Plastic Omnium is strengthening its fundamental management principles with, among other things, special attention paid to free cash-flow generation. Thus, during the 2019-2021 period, Plastic Omnium plans to invest about 6% of its consolidated revenue (compared to 7 to 8% of its consolidated revenue over the 2016-2018 period). These investments will be in new capacities, the ongoing optimization of the manufacturing base (industry 4.0 and operational excellence), the development of new programs, and the launch of new research projects. OUTLOOK AND POST-BALANCE SHEET EVENTS 4.1.3 The beginning of 2019 will continue to be marked by macro-political and macro-economic risks, translating to greater uncertainty and volatility, particularly in the automotive industry. In this market context, Plastic Omnium is working with a hypothesis of flat worldwide automotive production for the whole year. It takes account of strong disparity between a first half-year showing an expected downturn, and a second half with projected growth (enjoying a favorable comparison effect) that will be reflected in the Group’s results. The Group has strengthened its management fundamentals, with a particular attention paid to freecash-flow generation, a strengthened cost reduction policy and a renewed ambition in terms of industrial excellence. Equally, it has the benefit of a solid backlog. The financial outlook for 2019 is part of the 2019-2021 strategic plan presented during the Group’s Investor Day on December 13, 2018. In this context, for 2019 Plastic Omnium confirms: a 5-point outperformance over worldwide automotive production; ● an operating margin showing growth in value; ● a generation of freecash-flow of at least €200 million after 6% of the ● Group’s consolidated sales for investments. No other event likely to have a material impact on the Group’s business, financial position, earnings or assets and liabilities at December 31, 2018 has occurred since the closing date.