Picanol Group Consolidated Results HY 2021

Strong recovery of Global Machinery Market generates increases revenue in HY 21. Tessenderlo Group in line with expectations.

1.           Key Events First Half Year 2021

  • In the spring of 2021, Proferro in Ieper commissioned a new automatic high bay warehouse. PsiControl is currently continuing to build its new production facility in Rasnov (Romania). The works should be completed by the end of 2021 (Machines & Technologies segment).
  • In the first half of 2021, Tessenderlo Group filed the relevant applications in order to participate in the Belgian Capacity Remuneration Mechanism (CRM) tender for the construction of a second gas-fired power station of 900 MW in Tessenderlo (Belgium). If successful in the CRM auction, the new power plant (which involves an investment of approximately 500 million EUR) should be operational by November 1, 2025.
  • Within the Agro segment, Tessenderlo Kerley International will build a new Thio-Sul® (ammonium thiosulfate) manufacturing plant in Geleen (the Netherlands). With its second Thio-Sul® plant in Europe, Tessenderlo Kerley International is further expanding its local presence in the liquid fertilizer market for precision farming. Construction works on the new liquid fertilizer plant are planned to start in April 2022. The factory is scheduled to be operational from the second quarter of 2023.
  • Meanwhile, Tessenderlo Kerley International continues to study major Thio-Sul® investments in the Eastern European/CIS region to support qualitative and productivity increases of agriculture in that region.
  • In the first quarter of 2021, Tessenderlo Group established a new growth unit “Violleau”, to support the growth of organic agricultural solutions in Europe. This growth unit is part of the Bio-valorisation segment.
  • In March 2021, Picanol Group acquired a 10 % minority stake in Rieter Holding AG (SWX: RIEN) for a total of 467,236 shares at a price of 45.4 million EUR. Rieter is the world’s leading supplier of systems for spinning short staple fibres.

After the balance date:

  • In August 2021, the group reached an agreement on the sale of the MPR and ECS businesses (Industrial Solutions segment). The sale includes the main assets of these businesses. The annual contribution of MPR/ECS to the group’s results was not significant. The sale is expected to be completed in the second half of 2021 and will lead to a non-significant result in the EBIT adjusting items.
  • In the third quarter of 2021, the Mining & Industrial business unit changed its name to Moleko (Industrial Solutions segment).

Update COVID-19:

  • In the light of the latest developments regarding the corona pandemic, Picanol Group continues to take all necessary measures to ensure that its employees are safe, and its plants and businesses remain operational. All plants and operations are currently running as expected. The impact of COVID-19 on the group’s condensed consolidated interim financial information for the first six months of 2021 was not significant. Activities could be further impacted in the coming weeks or months if too many employees are affected by COVID-19 and/or if access to raw and auxiliary materials to transportation resources were to become more difficult, or if customers were to reduce production or become unable to process products.

1 The enclosed information constitutes regulated information as defined in the Royal Decree of November 14, 2007, regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market.

Financial Key Figures


HY21 revenue increased by 19 % compared to the same period last year. Machines & Technologies realized a 66 % revenue increase as the global machine market showed a strong recovery after the COVID-19 impacted first half of 2020. Excluding the foreign exchange effect, the revenue of Industrial Solutions increased by +26.8 % thanks to the performance of DYKA Group. Agro revenue increased by +9.6 %, the revenue of Bio-valorisation increased by +6.4 % while T-Power revenue remained stable (+1.7 %).

2 Adjusted EBITDA equals adjusted EBIT plus depreciation and amortization.

3 Adjusted EBIT is considered by the group to be a relevant performance measure in order to compare results over the period 2020-2021 as it excludes EBIT adjusting items.

Adjusted EBITDA

The HY21 Adjusted EBITDA amounts to EUR 236.0 million compared to EUR 195.5 million one year earlier, which implies an increase by 21 %. The Adjusted EBITDA of segment Machines & Technologies increased by 37.9 million EUR (+281 %) driven by the strong demand. The contribution to the Adjusted EBITDA of Industrial Solutions, when excluding the foreign exchange effect, increased by +18.0 million EUR (+72.8 %), while a decrease by -1.8 million EUR (or -6.7 %) could be noted in T-Power. The contributions of Bio-valorisation (-1.7 %) and Agro (-3.5 %) were in line with last year.

Profit (+)/ Loss (-) for the period attributable to the Equity holders of the Company

The HY21 profit amounts to 75.4 million EUR compared to 36.6 million EUR in HY20. The profit was impacted by exchange gains and losses, mainly on non-hedged intercompany loans and cash and cash equivalents in USD. Excluding these exchange gains and losses, the profit for HY21 would have increased by 81 %.

3.           Outlook

The following statements are forward-looking and actual results may differ materially.

The group anticipates a continued high level of uncertainty in the second half of 2021 due to difficult supply chain circumstances and other challenges posed by the ongoing corona pandemic, where the development of customer demand and margin is exposed to increased risk. However, based on the current situation, Picanol Group is anticipating an Adjusted EBITDA for the full financial year 2021 that will be approximately 10 % higher than the Adjusted EBITDA of 2020. This guidance already takes the expected negative foreign exchange effect in 2021 compared to 2020, following the weakening of the USD, into account.

The group would like to emphasize further that it currently operates in a volatile political, economic, financial and health environment.

4. Operating segments performance review

After the heavy impact of the COVID-19 pandemic in the first half of 2020, the recovery – which started in the second half of 2020 – continued in 2021. Both the weaving machines activities (Picanol) as well as the other industrial activities (Proferro, PsiControl) showed a strong revenue increase. HY21 Adjusted EBITDA increased by 281 % compared to last year as fixed costs did not increase proportionally to sales. This strong improvement in earnings was achieved despite the negative impact of rising component prices that could not be fully translated into higher sales prices, partly due to the large order book.

When excluding the foreign exchange effect, revenue increased by +9.6%, thanks to an increase of volumes, which were also impacted by the start of the partnership agreement between Tessenderlo Kerley International and Kemira Oyj (Kemira), which was announced in 2020, under which Kemira produces premium SOP fertilizers (both standard and water-soluble grade) at its plant in Helsingborg (Sweden) and Tessenderlo Kerley International partially markets these products.

The Adjusted EBITDA, when excluding the foreign exchange effect, remained in line with prior year (-3.5 %). The segment was significantly impacted by the increase of raw material prices, such as sulfur, and also by increased transportation costs. While the Adjusted EBITDA of Tessenderlo Kerley International remained stable, the Adjusted EBITDA of NovaSource increased thanks to higher volumes. The Adjusted EBITDA of Crop Vitality decreased as higher sales volumes were more than offset by lower margins.

Bio-valorisation revenue, when excluding the foreign exchange effect, increased by +6.4%, mainly thanks to favourable market conditions and an improved product mix.

Adjusted EBITDA slightly decreased to EUR 41.8 million (or remained stable when excluding the foreign exchange effect) as favourable market circumstances for fats and proteins were offset by lower margins of some gelatine products.

Industrial Solutions revenue, when excluding the foreign exchange effect, increased by +26.8%, mainly thanks to the increase of volumes and sales prices within DYKA Group. While HY20 DYKA Group volumes were negatively impacted by the corona pandemic, HY21 included the full contribution of the production plant in La Chapelle- Saint-Ursin in France, which was only acquired during HY20. Also, the growth of the product portfolio positively impacted DYKA Group sales volumes.

The Adjusted EBITDA increased to 42.1 million EUR or increased by +72.8% when excluding the foreign effect, being impacted by the increase of DYKA Group sales volumes, an improved product mix and a further increase of production efficiency based on investments made. The significant increase of raw material purchase costs was offset by timely pricing management. Also, the cessation of S8 Engineering had a positive impact on the evolution of the HY21 Adjusted EBITDA, while the Adjusted EBITDA of the other activities remained stable.

T-Power contributed EUR 35.2 million to the HY21 revenue and EUR 25.6 million to the HY21 Adjusted EBITDA of the group. These results were in line with expectations, as T-Power fulfilled all tolling agreement requirements. The Adjusted EBITDA decrease was mainly due to the ongoing development expenses for the construction of a second gas-fired power station in the Belgian municipality of Tessenderlo. At the beginning of July 2020, Tessenderlo Group started filing the relevant applications in order to participate in the Belgian Capacity Remuneration Mechanism (CRM) tender.

Condensed consolidated Income Statement

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of Financial Position

Condensed consolidated statement of Cash Flows

Picanol Group is a diversified industrial group and it is active worldwide in the fields of mechanical engineering, agriculture, food, energy, water management, the efficient (re)use of natural resources and other industrial markets. The group’s products are used in a variety of applications, industrial and consumer markets. Picanol Group realized a consolidated turnover of 2.2 billion EUR in 2020. Picanol Group has approximately 7000 employees worldwide and it is listed on Euronext Brussels (PIC) via Picanol nv.