UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
SECURITIES EXCHANGE ACT OF 1934
For the month of September 2013
Commission File Number: 333-175137
Pinafore Holdings B.V.
(Translation of registrants name into English)
Fred. Roeskestraat 123, 1076 EE,
Amsterdam, The Netherlands
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
þ Form 20-F ¨ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Quarterly Report for the Period Ended September 28, 2013.
This Current Report on Form 6-K (Report) contains the Quarterly Report of Pinafore Holdings B.V. (the Company) and its subsidiaries, as of and for the period ended September 28, 2013, which is filed as Exhibit 99.1.
Forward-Looking Statements
This Report and related exhibit may contain statements that are or may be forward-looking statements. Forward-looking statements include statements that typically contain words such as expect, believe, intend, anticipate, estimate, will, may, could, should and similar expressions. The Company cautions that any forward-looking statements made by the Company are not guarantees of future performance or events and are subject to risks and uncertainties that may cause actual results to differ materially from those predicted. Certain of these risks and uncertainties are described in the Companys annual report on Form 20-F in the Risk Factors section on pages 4 to 25. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Therefore investors should not place undue reliance on such statements as a prediction of actual results. These forward-looking statements represent our view only as of the date they are made and we are not under any obligation to update forward-looking statements contained herein, except as may otherwise be required by law.
Exhibit Index
Exhibit No. |
Description | |
99.1 | Quarterly Report of Pinafore Holdings B.V. and its subsidiaries, as of and for the period ended September 28, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pinafore Holdings B.V. (Registrant) | ||||||
Date: November 6, 2013 | By: | /s/ Roel Langelaar | ||||
Name: Roel Langelaar | ||||||
Title: | Director |
Exhibit 99.1
PINAFORE HOLDINGS B.V.
AND SUBSIDIARIES
QUARTERLY REPORT
Quarter ended September 28, 2013
PINAFORE HOLDINGS B.V.
AND SUBSIDIARIES
CONTENTS OF QUARTERLY REPORT
Quarter ended September 28, 2013
Page | ||||
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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Introduction |
1 | |||
Industry trends and outlook |
1 | |||
Results of operations |
2 | |||
Liquidity and capital resources |
5 | |||
FINANCIAL INFORMATION |
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Condensed consolidated income statement |
8 | |||
Condensed consolidated statement of comprehensive income |
9 | |||
Condensed consolidated cash flow statement |
10 | |||
Condensed consolidated balance sheet |
11 | |||
Condensed consolidated statement of changes in equity |
12 | |||
Notes to the condensed consolidated financial statements |
14 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This document and oral statements made in connection with this document may contain statements that are or may be forward-looking statements. Forward-looking statements include statements that typically contain words such as expect, believe, intend, anticipate, estimate, will, may, could, should and similar expressions. Pinafore Holdings B.V. (the Company) cautions that any forward-looking statements made by the Company, including those made in or in connection with this document in relation to the outlook for the remainder of 2013, are subject to risks and uncertainties that may cause actual results to differ materially from those predicted. Certain of these risks and uncertainties were described in the Companys Annual Report on Form 20-F for the year ended December 31, 2012. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward-looking statements. Therefore investors should not place undue reliance on such statements as a prediction of actual results. These forward-looking statements represent our view only as of the date they are made and we are not under any obligation to update forward-looking statements contained herein, except as may otherwise be required by law.
Registered office
Pinafore Holdings B.V.
Fred. Roeskestraat 123
1076 EE
Amsterdam
The Netherlands
www.tomkins.co.uk
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
Managements Discussion and Analysis should be read in conjunction with the unaudited condensed consolidated financial statements included elsewhere in this report, which cover the 13-week period from June 30, 2013 to September 28, 2013 (Q3 2013) and the 39-week period from January 1, 2013 to September 28, 2013 (9M 2013), with comparative information for the 13-week period from July 1, 2012 to September 29, 2012 (Q3 2012) and the 39-week period from January 1, 2012 to September 29, 2012 (9M 2012).
As used herein, the terms we, us, our, or the Group, unless the context requires otherwise, mean the Company and its subsidiaries.
Overview
We are a global engineering and manufacturing company with a portfolio of market-leading businesses. Our products are highly engineered and used primarily in the industrial and automotive end markets. Approximately 61% of our Q3 2013 sales were generated from the global industrial replacement end market and automotive aftermarket. Our industrial replacement business provides us with exposure to a broad range of industrial end market segments that have an ongoing need for replacement parts, while the automotive aftermarket provides us with both a stable source of revenue and our highest margins.
Our revenue and earnings base is highly diversified by product, geography, end market and customer. We derive revenues from nearly every developed country across the globe and are well-positioned in most major emerging markets with our industrial and automotive component products.
Our segments operate in diverse end markets, which are highlighted by the following analysis of our total Q3 2013 sales:
$ million | Industrial replacement |
Industrial original equipment |
Automotive aftermarket |
Automotive original equipment |
Total | |||||||||||||||||||||||||||||||||||
Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | |||||||||||||||||||||||||||||||
Gates North America |
111.3 | 113.7 | 75.1 | 75.3 | 135.1 | 134.7 | 18.3 | 19.8 | 339.8 | 343.5 | ||||||||||||||||||||||||||||||
Gates South America |
14.2 | 13.1 | 7.6 | 4.8 | 10.6 | 10.1 | 5.1 | 5.4 | 37.5 | 33.4 | ||||||||||||||||||||||||||||||
Gates EMEA |
49.6 | 45.7 | 21.1 | 20.5 | 71.4 | 61.4 | 46.2 | 41.6 | 188.3 | 169.2 | ||||||||||||||||||||||||||||||
Gates APAC |
34.9 | 37.2 | 23.4 | 26.5 | 32.5 | 32.2 | 62.4 | 72.3 | 153.2 | 168.2 | ||||||||||||||||||||||||||||||
Gates |
210.0 | 209.7 | 127.2 | 127.1 | 249.6 | 238.4 | 132.0 | 139.1 | 718.8 | 714.3 | ||||||||||||||||||||||||||||||
Residential construction |
Manufactured Housing |
Total | ||||||||||||||||||||||||||||||||||||||
Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | Q3 2013 | Q3 2012 | |||||||||||||||||||||||||||||||||||
Aquatic |
34.4 | 28.5 | 1.2 | 0.9 | 35.6 | 29.4 | ||||||||||||||||||||||||||||||||||
Ongoing operations |
754.4 | 743.7 |
INDUSTRY TRENDS AND OUTLOOK
During the third quarter of 2013, the US economy continued to show signs of improvement. The US Federal Reserve Industrial Production index continued to improve through the third quarter and in September stood 0.9% higher than the level at June 2013.
European industrial production (as measured by the Eurostat Industrial Production index) showed some signs of improvement in the third quarter of 2013, but remained below the levels seen in 2012, and at August 2013 stood 1.4% lower than in August 2012. Industrial production in China, as measured by the National Bureau of Statistics, grew by 9.6% in the year to September 2013, compared with 9.2% for the same period in 2012.
For 2013 as a whole, we expect industrial production in the Americas to be weak. In Europe we expect continued weakness, with declines possible. Low levels of growth are also expected in industrial activity in Asia.
US miles driven, a key driver of vehicle repair, continued to be weak and was up 0.3% in the year to August 2013 (compared with the same period in 2012) but up by 3.5% in the three months to August 2013 compared with the previous three months, with July and August being particularly strong. The average US price of gasoline, another factor influencing the amount of spending on car maintenance, was $3.58/gallon over the first nine months of 2013, 2.4% lower than the price over the same period in 2012.
For 2013 as a whole, we expect the global automotive aftermarket to grow by around 3 to 5%.
Global automotive original equipment (OE) production volumes (as measured by IHS Global Insight Inc., IHS) were up by 2.1% year-on-year for the first nine months of 2013, driven by growth in China and North and South America where volumes were up by 10.7%, 4.9% and 9.7% respectively. This growth is offset by declines in Europe, Japan and Korea.
Global volumes grew by 3.0% year-on-year in Q3 2013, with growth in all regions except Europe. For 2013 as a whole, global production volumes are forecast by IHS to grow by 2%, with volumes in China and North America forecast to grow by 10% and 5% respectively and volumes in Japan/Korea and Europe expected to decline by 4% and 2% respectively.
PAGE | 1
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The US housing market continued to improve, with housing starts for the year to August 2013 at 616,000 units, an increase of 22.6% year-on-year. Starts are expected to be around 900,000 units for 2013 as a whole.
RESULTS OF OPERATIONS
Summary Group performance
$ million |
Q3 2013 | Restated* Q3 2012 |
9M 2013 | Restated* 9M 2012 |
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Continuing operations |
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Sales |
754.4 | 743.7 | 2,327.8 | 2,331.6 | ||||||||||||
Cost of sales |
(464.0 | ) | (476.9 | ) | (1,446.9 | ) | (1,485.5 | ) | ||||||||
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Gross profit |
290.4 | 266.8 | 880.9 | 846.1 | ||||||||||||
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Gross profit margin |
38.5 | % | 35.9 | % | 37.8 | % | 36.3 | % | ||||||||
Adjusted EBITDA margin |
19.2 | % | 15.5 | % | 18.4 | % | 17.2 | % | ||||||||
Adjusted EBITDA |
145.0 | 115.3 | 427.8 | 401.0 | ||||||||||||
Depreciation and amortization |
(54.0 | ) | (60.1 | ) | (162.2 | ) | (180.9 | ) | ||||||||
Share-based incentives |
(5.0 | ) | (11.3 | ) | (17.7 | ) | (38.1 | ) | ||||||||
Impairments |
(1.9 | ) | | (2.4 | ) | (3.1 | ) | |||||||||
Restructuring costs |
(8.6 | ) | (4.9 | ) | (18.5 | ) | (17.5 | ) | ||||||||
Net gain/(loss) on disposals and on the exit of businesses |
0.4 | 0.6 | (0.3 | ) | 0.1 | |||||||||||
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Operating profit |
75.9 | 39.6 | 226.7 | 161.5 | ||||||||||||
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Net finance costs |
(34.5 | ) | (111.9 | ) | (99.0 | ) | (236.4 | ) | ||||||||
Income tax (expense)/benefit |
(6.4 | ) | 65.7 | (28.3 | ) | 107.2 | ||||||||||
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Profit/(loss) for the period |
35.0 | (6.6 | ) | 99.4 | 32.3 | |||||||||||
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* | Restated and re-presented (see note 1 to the accompanying financial statements) |
Sales
Sales in Q3 2013 were $754.4 million (Q3 2012: $743.7 million), an increase of 1.4% compared with Q3 2012. The quarters sales were positively impacted by strong demand in the automotive replacement market, particularly in Europe. Partially offsetting this growth was the adverse impact of movements in average currency translation rates, principally the Japanese Yen in Gates APAC. The Groups year-to-date sales were $2,327.8 million, $3.8 million lower than in 9M 2012 due to the continued softness in the industrial markets, principally weak demand in the construction, agriculture and transportation sectors in North America. The year-to-date decrease is also attributable to the adverse impact of currency translation rates in Asia throughout 2013. Excluding the impact of movements in average currency translation rates, underlying sales for the first nine months of 2013 were consistent with 9M 2012.
Gross profit
Gross profit was $290.4 million in Q3 2013, an improvement of $23.6 million compared with Q3 2012, driven primarily by lower material costs resulting from lower commodity prices and the benefits of procurement initiatives. Gross profit margin consequently rose to 38.5% for Q3 2013, compared with 35.9% in Q3 2012. The trend for the nine months was broadly similar, with gross profit rising from $846.1 million in 9M 2012 to $880.9 million in 9M 2013, despite slightly lower sales during 9M 2013 compared with 9M 2012. Gross profit margin increased from 36.3% in 9M 2012 to 37.8% in 9M 2013.
Adjusted EBITDA
Adjusted EBITDA was $145.0 million (Q3 2012: $115.3 million) and the adjusted EBITDA margin increased from 15.5% in Q3 2012 to 19.2% in Q3 2013. The improvement in the adjusted EBITDA margin during Q3 2013 was driven largely by a combination of the higher gross profit and administrative cost savings. The year-to-date adjusted EBITDA margin also increased from 17.2% in 9M 2012 to 18.4% in 9M 2013.
Restructuring costs
Restructuring costs in 9M 2013 were $18.5 million (9M 2012: $17.5 million), including $7.2 million recognized during Q3 2013 in respect of the closure of our facility in Ashe County, North Carolina and $4.7 million in respect of business and executive severance and reorganization costs, largely in Gates North America. Also during 9M 2013, restructuring costs of $5.0 million were recognized in relation to the planned closure of the London corporate center and the transfer of the majority of those functions to the Groups corporate headquarters in Denver, Colorado.
Restructuring costs for the first nine months of 2012 were $17.5 million and related principally to our Sierra initiative that focused on continuous identification and implementation of cost reduction opportunities and efficiency improvements across the Gates businesses.
PAGE | 2
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Net finance costs
Net finance costs decreased from $111.9 million in Q3 2012 to $34.5 million in Q3 2013, with a similar year-on-year decrease recognized in 9M 2013. This was due largely to a combination of a decrease in the principal amount of debt outstanding as a result of debt repayments during the first nine months of 2012 (particularly the repayment of $590.0 million of the Second Lien Notes) and, effective January 18, 2013, the re-pricing of Term Loan A and Term Loan B. Included in net finance costs for Q3 2013 are premiums of $3.5 million paid in respect of the 10% call option exercised during the quarter, compared with costs incurred on the prepayment of borrowings of $63.9 million in Q3 2012, primarily in relation to the fully-subscribed $475 million tender offer completed in July 2012. In addition, the Group recognized a net loss of $0.1 million in Q3 2013 relating to the movement in the fair value of the embedded interest rate floor derivatives (Q3 2012: loss of $6.2 million). The key components of net finance costs may be summarized as follows:
$ million |
Q3 2013 | Restated* Q3 2012 |
9M 2013 | Restated* 9M 2012 |
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Net bank interest and interest on other loans: |
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Term loans |
20.3 | 26.5 | 61.7 | 80.1 | ||||||||||||
Second Lien Notes |
10.4 | 15.2 | 32.6 | 65.2 | ||||||||||||
2015 Notes |
0.4 | 0.4 | 0.8 | 1.0 | ||||||||||||
Other |
0.3 | | 0.8 | 0.5 | ||||||||||||
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31.4 | 42.1 | 95.9 | 146.8 | |||||||||||||
Net interest recognized in relation to post-employment benefits |
1.5 | 1.7 | 4.7 | 5.2 | ||||||||||||
Loss/(gain) on embedded derivatives |
0.1 | 6.2 | (8.3 | ) | 11.3 | |||||||||||
Currency translation (gain)/loss on hedging instruments |
(4.0 | ) | (3.9 | ) | (1.2 | ) | (2.1 | ) | ||||||||
Costs incurred on prepayment of borrowings |
3.5 | 63.9 | 3.5 | 63.9 | ||||||||||||
Net loss/(gain) on financial liabilities held at amortized cost |
| 0.9 | (1.2 | ) | 6.2 | |||||||||||
Other |
2.0 | 1.0 | 5.6 | 5.1 | ||||||||||||
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34.5 | 111.9 | 99.0 | 236.4 | |||||||||||||
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* | Restated (see note 1 to the accompanying financial statements) |
Income tax expense
During the 9M 2013, the income tax expense attributable to continuing operations was $28.3 million (9M 2012: benefit of $107.2 million) on a profit before tax of $127.7 million (9M 2012: loss before tax of $74.9 million).
Our effective tax rate in 9M 2013 was lower than the statutory tax rates that are applicable in the jurisdictions in which we operate, primarily as a result of a number of discrete tax items that may occur in any given year, but are not consistent from year to year, such as a reduction in withholding taxes for amendments to existing treaties and legislative changes to statutory tax rates.
Analysis by operating segment
As discussed in note 2 to the accompanying financial statements, following the disposal in 2011 and 2012 of a number of the Groups non-core businesses and the consequent re-focus on the Gates business, the board of directors have revised the way in which they review and manage the Groups corporate costs. Previously, the Gates North America segment included certain US income and expenses that related to the worldwide operations (including items relating to royalties, research and development, global marketing, information technology, human resources and other global services). These items are now reallocated across all the Gates segments to ensure comparability of reporting between segments.
In addition, costs incurred at a Group level (including management oversight, accounting, treasury, tax, information services and legal services) have been previously partially allocated across all of the Groups segments. These costs are now no longer allocated and are presented within the Corporate segment, providing a clearer view of the controllable performance of the individual operational segments.
Comparative information for Q3 2012 has been re-presented to reflect these segmental reporting revisions.
Furthermore, as discussed in note 1 to the accompanying financial statements, the comparative information for 9M 2012 and for Q3 2012 has been restated for the retrospective impact of the adoption of IAS 19 Employee Benefits (2011) (IAS 19R), which had the following impacts on the Groups continuing operations:
| An increase in administrative expenses of $0.7 million in Q3 2012 and $1.9 million in 9M 2012. |
| Reversal in 9M 2012 of $40.7 million (Q3 2012: $13.9 million) previously included in interest expense and $49.2 million (Q3 2012: $16.6 million) previously included in investment income, both in relation to post-employment benefits, and the inclusion in 9M 2012 in other finance (expense)/income of a net interest charge of $5.2 million (Q3 2012: $1.7 million) as determined in accordance with IAS 19R. |
| A corresponding adjustment to other comprehensive income in respect of the above two adjustments. |
| A corresponding switch between tax recognized in profit or loss and tax recognized in other comprehensive income in relation to the above adjustments. |
PAGE | 3
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Groups segmental results are summarized below:
Sales | Adjusted EBITDA | |||||||||||||||||||||||||||||||
Q3 2013 $ million |
Q3 2012 $ million |
9M 2013 $ million |
9M 2012 $ million |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
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Continuing operations |
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Ongoing segments |
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Gates: |
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Gates North America |
339.8 | 343.5 | 1,046.1 | 1,051.3 | 84.2 | 75.8 | 245.3 | 241.1 | ||||||||||||||||||||||||
Gates South America |
37.5 | 33.4 | 123.6 | 114.6 | 5.1 | 3.3 | 15.9 | 10.9 | ||||||||||||||||||||||||
Gates EMEA |
188.3 | 169.2 | 575.5 | 565.7 | 32.8 | 22.0 | 101.4 | 90.5 | ||||||||||||||||||||||||
Gates APAC |
153.2 | 168.2 | 481.9 | 512.2 | 35.4 | 34.7 | 104.5 | 104.5 | ||||||||||||||||||||||||
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718.8 | 714.3 | 2,227.1 | 2,243.8 | 157.5 | 135.8 | 467.1 | 447.0 | |||||||||||||||||||||||||
Aquatic |
35.6 | 29.4 | 100.7 | 87.8 | 0.5 | (6.2 | ) | 1.5 | (5.4 | ) | ||||||||||||||||||||||
Corporate |
| | | | (13.0 | ) | (13.5 | ) | (39.8 | ) | (39.6 | ) | ||||||||||||||||||||
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Total ongoing |
754.4 | 743.7 | 2,327.8 | 2,331.6 | 145.0 | 116.1 | 428.8 | 402.0 | ||||||||||||||||||||||||
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Exited segments |
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Powertrain |
| | | | | | (0.5 | ) | | |||||||||||||||||||||||
Other I&A |
| | | | | (0.1 | ) | | (0.2 | ) | ||||||||||||||||||||||
Doors & Windows |
| | | | | (0.7 | ) | (0.5 | ) | (0.8 | ) | |||||||||||||||||||||
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Total exited segments |
| | | | | (0.8 | ) | (1.0 | ) | (1.0 | ) | |||||||||||||||||||||
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Total continuing operations |
754.4 | 743.7 | 2,327.8 | 2,331.6 | 145.0 | 115.3 | 427.8 | 401.0 | ||||||||||||||||||||||||
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Discontinued operations |
| 311.6 | | 1,070.4 | | 48.9 | | 160.5 | ||||||||||||||||||||||||
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Total operations |
754.4 | 1,055.3 | 2,327.8 | 3,402.0 | 145.0 | 164.2 | 427.8 | 561.5 | ||||||||||||||||||||||||
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* | Restated and re-presented (see note 1 to the accompanying financial statements) |
Summary ongoing segment performance
Q3 Adjusted EBITDA margin (%) |
9M Adjusted EBITDA margin (%) | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Gates North America | 45.0% of Q3 2013 sales |
24.8% | 22.1% | 23.4% | 22.9% |
Sales in Q3 2013 were $339.8 million, down 1.1% compared with Q3 2012 sales of $343.5 million. The decline in sales was driven by lower volumes in the industrial replacement end markets. Year-to-date sales were $1,046.1 million (9M 2012: $1,051.3 million), a decrease of 0.5%, driven by weak demand in our Industrial channels, primarily related to the construction, agriculture and transportation sectors.
Adjusted EBITDA was $84.2 million (Q3 2012: $75.8 million), and the adjusted EBITDA margin increased to 24.8% (Q3 2012: 22.1%), primarily due to lower material costs as a result of procurement initiatives and favorable commodity prices. The year-to-date adjusted EBITDA increased from $241.1 million to $245.3 million, driven by lower material costs and restructuring benefits.
Q3 Adjusted EBITDA margin (%) |
9M Adjusted EBITDA margin (%) | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Gates South America | 5.0% of Q3 2013 sales |
13.6% | 9.9% | 12.9% | 9.5% |
Sales were $37.5 million, up 12.3% compared with Q3 2012 sales of $33.4 million. The growth in sales was driven by higher selling prices across the region, as well as volume increases in the industrial OE market. Sales for the nine months followed a similar trend, increasing from $114.6 million in 9M 2012 to $123.6 million in 9M 2013, benefitting in particular from strong agricultural demand.
Adjusted EBITDA was $5.1 million (Q3 2012: $3.3 million), and the adjusted EBITDA margin improved from 9.9% in Q3 2012 to 13.6% in Q3 2013, driven by higher sales volumes and pricing. The adjusted EBITDA for the nine months followed a similar trend, increasing from $10.9 million in 9M 2012 to $15.9 million in 9M 2013.
Q3 Adjusted EBITDA margin (%) |
9M Adjusted EBITDA margin (%) | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Gates EMEA | 25.0% of Q3 2013 sales |
17.4% | 13.0% | 17.6% | 16.0% |
Sales were $188.3 million (Q3 2012: $169.2 million), an increase of 11.3%, driven by higher sales to the automotive aftermarket, particularly in Eastern Europe. Sales for the first nine months of 2013 followed a similar trend, increasing from $565.7 million in 9M 2012 to $575.5 million in 9M 2013.
Adjusted EBITDA was $32.8 million, up from $22.0 million in Q3 2012 due principally to higher sales volumes. The adjusted EBITDA margin rose to 17.4% (Q3 2012: 13.0%), driven by manufacturing efficiencies and lower material costs. These factors also drove the year-to-date increase in adjusted EBITDA of 12.0%.
PAGE | 4
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Q3 Adjusted EBITDA margin (%) |
9M Adjusted EBITDA margin (%) | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Gates APAC | 20.3% of Q3 2013 sales |
23.1% | 20.6% | 21.7% | 20.4% |
Sales were $153.2 million (Q3 2012: $168.2 million), a decline of 8.9% driven principally by weaker sales to the automotive OE market, particularly in Japan, and the continued adverse impact of average currency translation rates, primarily the Japanese Yen. Sales for the nine months in 2013 followed a similar trend, decreasing from $512.2 million in 9M 2012 to $481.9 million in 9M 2013.
Despite lower sales, adjusted EBITDA increased to $35.4 million (Q3 2012: $34.7 million), driven principally by lower material costs. The adjusted EBITDA margin accordingly increased from 20.6% in Q3 2012 to 23.1% in Q3 2013. The year-to-date adjusted EBITDA remained the same at $104.5 million in 9M 2012 and 9M 2013.
Q3 Adjusted EBITDA margin (%) |
9M Adjusted EBITDA margin (%) | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Aquatic | 4.7% of Q3 2013 sales |
1.4% | (21.1%) | 1.5% | (6.2%) |
Sales for the quarter were $35.6 million (Q3 2012: $29.4 million), an increase of 21.1% principally as a result of improved market conditions, new products, customer conversions, and stronger retail expansion. Strong market conditions also drove the increase in sales for the first nine months of 2013 from $87.8 million in 9M 2012 to $100.7 million in 9M 2013.
Aquatics adjusted EBITDA was $0.5 million (Q3 2012: loss $6.2 million), the increase being due largely to the inclusion in the Q3 2012 results of a one-time unfavorable adjustment of $7.2 million to the product liability provision related to the segments former installation business. Excluding that movement, Aquatics Q3 2013 adjusted EBITDA was $0.5 million lower than the prior year due primarily to higher material pricing and unfavorable healthcare insurance adjustments, partially mitigated by price increases and continued cost saving benefits.
Corporate
Adjusted EBITDA for our Corporate segment for Q3 2013 was a loss of $13.0 million (Q3 2012: $13.5 million), the improvement compared with Q3 2012 was driven principally by headcount and cost reductions, particularly in relation to legal, consultancy and other professional fees.
Summary ongoing segment performance (last twelve months)
The performance of the Groups ongoing segments for the twelve months ended September 28, 2013 may be analyzed as follows:
Sales $ million |
Adjusted EBITDA $ million |
Adjusted EBITDA margin % |
||||||||||
Gates: |
||||||||||||
Gates North America |
1,352.7 | 305.4 | 22.6 | % | ||||||||
Gates South America |
161.0 | 19.4 | 12.0 | % | ||||||||
Gates EMEA |
743.2 | 126.5 | 17.0 | % | ||||||||
Gates APAC |
649.2 | 137.0 | 21.1 | % | ||||||||
|
|
|
|
|
|
|||||||
2,906.1 | 588.3 | 20.2 | % | |||||||||
Aquatic |
127.4 | 1.1 | 0.9 | % | ||||||||
Corporate |
| (53.1 | ) | n/a | ||||||||
|
|
|
|
|
|
|||||||
Total ongoing segments |
3,033.5 | 536.3 | 17.7 | % | ||||||||
|
|
|
|
|
|
LIQUIDITY AND CAPITAL RESOURCES
Cash flow
During the nine months ended September 28, 2013, the Groups net debt decreased by $20.3 million (9M 2012: decreased by $514.7 million) from $1,481.6 million at December 31, 2012 to $1,461.3 million at September 28, 2013.
Cash generated by operations was $214.2 million in 9M 2013 compared with cash generated in 9M 2012 of $382.2 million. Operating cash flow before movements in working capital was $395.2 million, a decrease of $121.6 million compared with 9M 2012, driven by the reduction in the Groups total adjusted EBITDA largely as a result of the disposal of businesses during 2012. Movements in working capital during 9M 2013 reduced cash flows by a further $46.4 million compared with 9M 2012, due partly to the effect of the industry-wide extended payment terms provided to certain automotive aftermarket customers. Gross capital expenditure was $57.8 million (9M 2012: $79.1 million). Excluding the proceeds on asset sales arising from restructurings, net capital expenditure was $56.6 million (9M 2012: $77.6 million). Cash outflow on restructurings was $8.6 million (9M 2012: $13.6 million), which was net of proceeds on related asset sales of $3.4 million (9M 2012: $4.0 million).
The Groups resulting controllable operating cash for 9M 2013 was an inflow of $188.5 million compared with $353.8 million in 9M 2012.
PAGE | 5
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Group paid net cash interest of $55.0 million, down from $119.0 million in 9M 2012 due to a combination of debt reductions during 2012 and the re-pricing of the term loans that became effective in January 2013. During 9M 2012, the Group paid premiums of $62.6 million in respect of the prepayment of borrowings, primarily in relation to the fully-subscribed $475 million tender offer completed in July 2012. A premium of $3.5 million was paid in September 2013 on the 10% call option exercised during the quarter. Contributions paid to post-employment benefit plans reduced in 9M 2013 compared with 9M 2012, driven by a zero contribution requirement for 2013 due to the funded status of the Groups US defined benefit pension plans.
Cash flows arising on acquisitions and disposals in 9M 2012 included $492.2 million received on the disposal of the businesses comprising the Groups Sensors & Valves segment. Net cash flows to non-controlling interests, comprised primarily of dividends paid to Nitta Corporation, were down by $16.5 million compared with 9M 2012.
The table below shows the movements in net debt:
$ million |
9M 2013 | Restated* 9M 2012 |
||||||
Opening net debt |
(1,481.6 | ) | (2,324.8 | ) | ||||
|
|
|
|
|||||
Controllable operating cash flows |
||||||||
Adjusted EBITDA |
427.8 | 561.5 | ||||||
Change in working capital and provisions |
(181.9 | ) | (129.8 | ) | ||||
Capital expenditure |
(57.8 | ) | (79.1 | ) | ||||
Asset disposals |
1.2 | 1.5 | ||||||
Other movements |
(0.8 | ) | (0.3 | ) | ||||
|
|
|
|
|||||
188.5 | 353.8 | |||||||
Restructuring cash flows |
||||||||
Restructuring cash outflows |
(12.0 | ) | (17.6 | ) | ||||
Proceeds on asset disposals arising on restructuring |
3.4 | 4.0 | ||||||
|
|
|
|
|||||
(8.6 | ) | (13.6 | ) | |||||
Financing, tax and post-employment benefit cash flows |
||||||||
Interest paid (net) |
(55.0 | ) | (119.0 | ) | ||||
Premium on redemption of borrowings |
(3.5 | ) | (62.6 | ) | ||||
Deferred financing costs |
(2.0 | ) | (5.8 | ) | ||||
Post-employment benefit funding in excess of income statement movement |
(19.0 | ) | (32.0 | ) | ||||
Tax paid |
(60.9 | ) | (60.2 | ) | ||||
|
|
|
|
|||||
(140.4 | ) | (279.6 | ) | |||||
Cash flows arising on acquisitions and disposals |
||||||||
Acquisitions and disposals (net) |
2.2 | 488.8 | ||||||
|
|
|
|
|||||
Total cash flows before dividends paid |
41.7 | 549.4 | ||||||
|
|
|
|
|||||
Net cash flows to non-controlling interests |
(17.1 | ) | (33.6 | ) | ||||
Compensation payment to management in relation to the return of capital |
(1.5 | ) | | |||||
Foreign currency movements |
(2.8 | ) | 0.3 | |||||
Non-cash movements in net debt |
| (1.4 | ) | |||||
|
|
|
|
|||||
Closing net debt |
(1,461.3 | ) | (1,810.1 | ) | ||||
|
|
|
|
* | Restated (see note 1 to the accompanying financial statements) |
Net debt may be analyzed as follows:
$ million |
As at September 28, 2013 |
As at December 31, 2012 |
||||||
Total operations |
||||||||
Borrowings: |
||||||||
Bank overdrafts |
(5.7 | ) | (2.9 | ) | ||||
Bank and other loans |
(1,788.8 | ) | (1,921.6 | ) | ||||
|
|
|
|
|||||
(1,794.5 | ) | (1,924.5 | ) | |||||
Obligations under finance leases |
(2.5 | ) | (2.6 | ) | ||||
|
|
|
|
|||||
Debt |
(1,797.0 | ) | (1,927.1 | ) | ||||
Cash and cash equivalents |
323.2 | 431.3 | ||||||
Collateralized cash |
12.4 | 14.2 | ||||||
Foreign currency derivatives |
0.1 | | ||||||
|
|
|
|
|||||
Net debt |
(1,461.3 | ) | (1,481.6 | ) | ||||
|
|
|
|
PAGE | 6
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Borrowings
Summary
As at September 28, 2013, the Groups borrowings principally consisted of two term loans under the Senior Secured Credit Facilities and the Second Lien Notes that were used to finance the acquisition of Tomkins plc in 2010.
The Groups borrowings as at September 28, 2013 may be analyzed as follows:
$ million | Carrying amount | Principal amount | ||||||||||||||
As at September 28, 2013 |
As at December 31, 2012 |
As at September 28, 2013 |
As at December 31, 2012 |
|||||||||||||
Bank overdrafts |
5.7 | 2.9 | 5.7 | 2.9 | ||||||||||||
Bank and other loans: |
||||||||||||||||
Secured |
||||||||||||||||
Term loans |
1,360.5 | 1,333.4 | 1,427.8 | 1,442.9 | ||||||||||||
Second Lien Notes |
325.3 | 432.1 | 330.0 | 445.0 | ||||||||||||
Unsecured |
31.1 | 34.1 | 31.0 | 33.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,722.6 | 1,802.5 | 1,794.5 | 1,924.5 | |||||||||||||
|
|
|
|
|
|
|
|
Details of the Groups borrowings together with a reconciliation of their carrying amount to their principal amount are presented in note 11 to the accompanying financial statements.
Repayments
On July 10, 2013, the Group gave notice to the holders of the Second Lien Notes of its intention to exercise a call option in full. The resulting prepayment of an aggregate principal amount of $115.0 million, plus the required 3% premium and interest accrued up to the redemption date, was made on September 4, 2013.
Re-pricing of the term loans
On January 18, 2013, the Group reached an agreement with the providers of the senior secured credit facilities for a re-pricing of the term loans. For both term loans, the applicable margin for LIBOR was reduced from 3.0% to 2.75% per annum, subject to a reduced floor of 1.0% (previously 1.25%), and the applicable margin for base rate was reduced from 2.0% to 1.75% per annum, subject to a reduced floor of 2.0% (previously 2.25%). The Group has recognized neither a gain nor a loss on the re-pricing and recognized the associated costs of $2.0 million and the associated decrease of $10.9 million in the embedded interest rate derivative as adjustments to the carrying amounts of the borrowings outstanding under the facilities.
Borrowing headroom
As at September 28, 2013, the Groups committed revolving credit facility of $300.0 million was undrawn for cash but there were letters of credit outstanding against the facility amounting to $51.0 million. Also, the Group had drawn $5.7 million against uncommitted borrowing facilities (almost exclusively bank overdrafts) and had outstanding performance bonds, letters of credit and bank guarantees amounting to $31.0 million (in addition to those outstanding under the revolving credit facility).
Overall, therefore, the Groups committed borrowing headroom was $212.3 million, in addition to cash balances of $335.6 million (including collateralized cash of $12.4 million).
Borrowing covenants
The Group is subject to covenants, representations and warranties in respect of the Senior Secured Credit Facilities including two financial covenants as defined in the credit agreement. Firstly, the ratio of consolidated total debt to consolidated EBITDA (the total leverage ratio) must not exceed 5.25 times (for the covenant test period ended September 28, 2013, the ratio was 3.14 times). Secondly, the ratio of consolidated EBITDA to consolidated net interest (the interest coverage ratio) must not be less than 2.10 times (for the covenant test period ended September 28, 2013, the ratio was 5.84 times).
Any future non-compliance with the borrowing covenants could, if not waived, constitute an event of default and may, in certain circumstances, lead to an acceleration of the maturity of borrowings drawn down and the inability to access committed facilities.
PAGE | 7
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
Note | Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
||||||||||||||
Continuing operations |
||||||||||||||||||
Sales |
2 | 754.4 | 743.7 | 2,327.8 | 2,331.6 | |||||||||||||
Cost of sales |
(464.0 | ) | (476.9 | ) | (1,446.9 | ) | (1,485.5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
290.4 | 266.8 | 880.9 | 846.1 | ||||||||||||||
Distribution costs |
(91.0 | ) | (89.8 | ) | (274.6 | ) | (272.1 | ) | ||||||||||
Administrative expenses |
(113.2 | ) | (133.2 | ) | (358.3 | ) | (392.4 | ) | ||||||||||
Impairments |
(1.9 | ) | | (2.4 | ) | (3.1 | ) | |||||||||||
Restructuring costs |
3 | (8.6 | ) | (4.9 | ) | (18.5 | ) | (17.5 | ) | |||||||||
Net gain/(loss) on disposals and on the exit of businesses |
3 | 0.4 | 0.6 | (0.3 | ) | 0.1 | ||||||||||||
Share of (loss)/profit of associates |
(0.2 | ) | 0.1 | (0.1 | ) | 0.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Operating profit |
75.9 | 39.6 | 226.7 | 161.5 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Interest expense |
4 | (33.8 | ) | (44.5 | ) | (101.7 | ) | (159.8 | ) | |||||||||
Investment income |
5 | 0.4 | 0.5 | 1.4 | 1.7 | |||||||||||||
Other finance (expense)/income |
6 | (1.1 | ) | (67.9 | ) | 1.3 | (78.3 | ) | ||||||||||
Net finance costs |
(34.5 | ) | (111.9 | ) | (99.0 | ) | (236.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit/(loss) before tax |
41.4 | (72.3 | ) | 127.7 | (74.9 | ) | ||||||||||||
Income tax (expense)/benefit |
(6.4 | ) | 65.7 | (28.3 | ) | 107.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit/(loss) for the period from continuing operations |
35.0 | (6.6 | ) | 99.4 | 32.3 | |||||||||||||
Discontinued operations |
||||||||||||||||||
(Loss)/profit for the period from discontinued operations |
7 | (1.5 | ) | 16.0 | 5.5 | 179.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit for the period |
33.5 | 9.4 | 104.9 | 211.5 | ||||||||||||||
Non-controlling interests |
(7.5 | ) | (6.6 | ) | (20.3 | ) | (17.5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit for the period attributable to equity shareholders |
26.0 | 2.8 | 84.6 | 194.0 | ||||||||||||||
|
|
|
|
|
|
|
|
* | Restated and re-presented (see note 1) |
PAGE | 8
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Profit for the period |
33.5 | 9.4 | 104.9 | 211.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
||||||||||||||||
Foreign currency translation: |
||||||||||||||||
Currency translation differences on foreign operations: |
||||||||||||||||
Subsidiaries |
34.3 | 70.7 | (34.3 | ) | 60.6 | |||||||||||
Associates |
0.2 | 0.2 | | 0.1 | ||||||||||||
Gain/(loss) on net investment hedges |
0.1 | (1.5 | ) | 0.2 | (1.1 | ) | ||||||||||
Reclassification to profit or loss of currency translation gain on foreign operations sold |
| | | (5.4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
34.6 | 69.4 | (34.1 | ) | 54.2 | ||||||||||||
Available-for-sale investments: |
||||||||||||||||
Unrealized gain/(loss) recognized in the period |
0.2 | (0.1 | ) | 1.1 | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
0.2 | (0.1 | ) | 1.1 | | ||||||||||||
Post-employment benefits: |
||||||||||||||||
Net actuarial (loss)/gain |
(6.7 | ) | (29.0 | ) | 14.5 | (67.8 | ) | |||||||||
Effect of the asset ceiling |
(1.0 | ) | 10.0 | (8.2 | ) | 29.8 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(7.7 | ) | (19.0 | ) | 6.3 | (38.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) before tax |
27.1 | 50.3 | (26.7 | ) | 16.2 | |||||||||||
Income tax benefit/(expense) |
1.7 | 5.5 | (3.7 | ) | 13.0 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss) |
28.8 | 55.8 | (30.4 | ) | 29.2 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive income for the period |
62.3 | 65.2 | 74.5 | 240.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Attributable to: |
||||||||||||||||
Equity shareholders in Pinafore Holdings B.V. |
||||||||||||||||
Arising from continuing operations |
53.2 | 42.4 | 53.5 | 41.3 | ||||||||||||
Arising from discontinued operations |
(1.5 | ) | 13.0 | 5.5 | 180.5 | |||||||||||
51.7 | 55.4 | 59.0 | 221.8 | |||||||||||||
Non-controlling interests |
10.6 | 9.8 | 15.5 | 18.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
62.3 | 65.2 | 74.5 | 240.7 | |||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 9
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Unaudited)
Note | Q3 2013 $ million |
Q3 2012 $ million |
9M 2013 $ million |
9M 2012 $ million |
||||||||||||||
Operating activities |
||||||||||||||||||
Cash generated from operations |
8 | 114.9 | 161.2 | 214.2 | 382.2 | |||||||||||||
Income taxes paid |
(20.5 | ) | (18.4 | ) | (70.2 | ) | (64.2 | ) | ||||||||||
Income taxes received |
| | 9.3 | 4.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net cash inflow from operating activities |
94.4 | 142.8 | 153.3 | 322.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Investing activities |
||||||||||||||||||
Purchase of property, plant and equipment |
(20.9 | ) | (30.3 | ) | (52.9 | ) | (74.4 | ) | ||||||||||
Purchase of computer software |
(1.6 | ) | (1.7 | ) | (4.9 | ) | (4.7 | ) | ||||||||||
Capitalization of development costs |
| | | (0.5 | ) | |||||||||||||
Disposal of property, plant and equipment |
1.7 | 2.6 | 4.6 | 5.5 | ||||||||||||||
Purchase of available-for-sale investments |
| | | (0.4 | ) | |||||||||||||
Purchase of interests in subsidiaries, net of cash acquired |
| (0.9 | ) | (0.3 | ) | (2.0 | ) | |||||||||||
Sale of investments in associates |
| | | 2.5 | ||||||||||||||
Sale of businesses and subsidiaries, net of cash disposed |
(1.0 | ) | (5.3 | ) | 2.5 | 489.7 | ||||||||||||
Interest received |
0.4 | 0.5 | 1.4 | 1.6 | ||||||||||||||
Dividends received from associates |
| | 0.1 | 0.1 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net cash (outflow)/inflow from investing activities |
(21.4 | ) | (35.1 | ) | (49.5 | ) | 417.4 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Financing activities |
||||||||||||||||||
Draw-down of bank and other loans |
| | | 2.1 | ||||||||||||||
Repayment of bank and other loans |
(115.0 | ) | (601.1 | ) | (132.6 | ) | (785.6 | ) | ||||||||||
Premiums on redemption of borrowings |
(3.5 | ) | (62.6 | ) | (3.5 | ) | (62.6 | ) | ||||||||||
Receipts/(payments) on foreign currency derivatives |
2.0 | 2.3 | (0.1 | ) | 0.7 | |||||||||||||
Capital element of finance lease rental payments |
(0.1 | ) | (0.2 | ) | (0.2 | ) | (0.3 | ) | ||||||||||
Interest element of finance lease rental payments |
| (0.2 | ) | | (0.3 | ) | ||||||||||||
(Increase)/decrease in collateralized cash |
(0.6 | ) | 2.8 | 1.6 | 4.2 | |||||||||||||
Purchase of own shares |
(1.7 | ) | (0.2 | ) | (1.7 | ) | (1.1 | ) | ||||||||||
Interest paid |
(7.1 | ) | (37.0 | ) | (56.4 | ) | (120.3 | ) | ||||||||||
Financing costs paid |
| (5.8 | ) | (2.0 | ) | (5.8 | ) | |||||||||||
Redemption of subsidiary preference shares held by minority shareholders |
(2.5 | ) | | (2.5 | ) | | ||||||||||||
Investment by a minority shareholder in a subsidiary |
| | 2.7 | | ||||||||||||||
Dividend paid to a minority shareholder in a subsidiary |
(11.4 | ) | (12.4 | ) | (17.3 | ) | (33.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net cash outflow from financing activities |
(139.9 | ) | (714.4 | ) | (212.0 | ) | (1,002.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Decrease in net cash and cash equivalents |
(66.9 | ) | (606.7 | ) | (108.2 | ) | (263.2 | ) | ||||||||||
Net cash and cash equivalents at the beginning of the period |
377.7 | 815.4 | 428.4 | 474.5 | ||||||||||||||
Foreign currency translation |
6.7 | 3.2 | (2.7 | ) | 0.6 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net cash and cash equivalents at the end of the period |
317.5 | 211.9 | 317.5 | 211.9 | ||||||||||||||
|
|
|
|
|
|
|
|
Analysis of net cash and cash equivalents:
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Cash and cash equivalents |
323.2 | 431.3 | ||||||
Bank overdrafts |
(5.7 | ) | (2.9 | ) | ||||
|
|
|
|
|||||
317.5 | 428.4 | |||||||
|
|
|
|
PAGE | 10
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
UNAUDITED | AUDITED | |||||||||
Note | As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
||||||||
Non-current assets |
||||||||||
Goodwill |
1,314.8 | 1,326.1 | ||||||||
Other intangible assets |
9 | 1,352.8 | 1,450.6 | |||||||
Property, plant and equipment |
656.2 | 693.2 | ||||||||
Investments in associates |
5.9 | 6.1 | ||||||||
Trade and other receivables |
10 | 16.8 | 21.0 | |||||||
Deferred tax assets |
5.1 | 6.1 | ||||||||
Post-employment benefit surpluses |
15 | 6.8 | 0.7 | |||||||
|
|
|
|
|||||||
3,358.4 | 3,503.8 | |||||||||
|
|
|
|
|||||||
Current assets |
||||||||||
Inventories |
492.9 | 476.8 | ||||||||
Trade and other receivables |
10 | 806.7 | 629.7 | |||||||
Income tax recoverable |
5.6 | 18.9 | ||||||||
Available-for-sale investments |
17.2 | 16.3 | ||||||||
Cash and cash equivalents |
323.2 | 431.3 | ||||||||
|
|
|
|
|||||||
1,645.6 | 1,573.0 | |||||||||
|
|
|
|
|||||||
Assets held for sale |
9.4 | 6.8 | ||||||||
|
|
|
|
|||||||
Total assets |
5,013.4 | 5,083.6 | ||||||||
|
|
|
|
|||||||
Current liabilities |
||||||||||
Bank overdrafts |
11 | (5.7 | ) | (2.9 | ) | |||||
Bank and other loans |
11 | (32.7 | ) | (14.2 | ) | |||||
Obligations under finance leases |
(0.2 | ) | (0.1 | ) | ||||||
Trade and other payables |
12 | (453.7 | ) | (429.0 | ) | |||||
Income tax liabilities |
(111.4 | ) | (91.7 | ) | ||||||
Provisions |
16 | (47.4 | ) | (52.0 | ) | |||||
|
|
|
|
|||||||
(651.1 | ) | (589.9 | ) | |||||||
|
|
|
|
|||||||
Non-current liabilities |
||||||||||
Bank and other loans |
11 | (1,684.2 | ) | (1,785.4 | ) | |||||
Obligations under finance leases |
(2.3 | ) | (2.5 | ) | ||||||
Trade and other payables |
12 | (36.9 | ) | (54.9 | ) | |||||
Post-employment benefit obligations |
15 | (173.0 | ) | (190.2 | ) | |||||
Deferred tax liabilities |
(422.4 | ) | (490.8 | ) | ||||||
Provisions |
16 | (25.4 | ) | (26.0 | ) | |||||
|
|
|
|
|||||||
(2,344.2 | ) | (2,549.8 | ) | |||||||
|
|
|
|
|||||||
Total liabilities |
(2,995.3 | ) | (3,139.7 | ) | ||||||
|
|
|
|
|||||||
Net assets |
2,018.1 | 1,943.9 | ||||||||
|
|
|
|
|||||||
Capital and reserves |
||||||||||
Share capital |
| | ||||||||
Share premium account |
984.0 | 984.0 | ||||||||
Own shares |
(10.1 | ) | (10.8 | ) | ||||||
Currency translation reserve |
(24.4 | ) | 4.6 | |||||||
Available-for-sale reserve |
0.6 | | ||||||||
Accumulated surplus |
819.9 | 716.8 | ||||||||
|
|
|
|
|||||||
Shareholders equity |
1,770.0 | 1,694.6 | ||||||||
Non-controlling interests |
248.1 | 249.3 | ||||||||
|
|
|
|
|||||||
Total equity |
2,018.1 | 1,943.9 | ||||||||
|
|
|
|
PAGE | 11
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
Q3 2013
Share capital $ million |
Share premium account $ million |
Own shares $ million |
Other reserves $ million |
Accumulated surplus $ million |
Total shareholders equity $ million |
Non- controlling interests $ million |
Total equity $ million |
|||||||||||||||||||||||||
As at June 29, 2013 |
| 984.0 | (9.0 | ) | (56.2 | ) | 795.8 | 1,714.6 | 251.3 | 1,965.9 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Profit for the period |
| | | | 26.0 | 26.0 | 7.5 | 33.5 | ||||||||||||||||||||||||
Other comprehensive income/(loss) |
| | | 32.4 | (6.7 | ) | 25.7 | 3.1 | 28.8 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income/(loss) |
| | | 32.4 | 19.3 | 51.7 | 10.6 | 62.3 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other changes in equity: |
||||||||||||||||||||||||||||||||
Buy-back of shares from management |
| | (1.7 | ) | | | (1.7 | ) | | (1.7 | ) | |||||||||||||||||||||
Issue of own shares to management |
| | 0.6 | | (0.6 | ) | | | | |||||||||||||||||||||||
Share-based incentives (including a tax benefit of $0.5 million) |
| | | | 5.4 | 5.4 | 0.1 | 5.5 | ||||||||||||||||||||||||
Redemption of subsidiary preference shares held by minority shareholders |
| | | | | | (2.5 | ) | (2.5 | ) | ||||||||||||||||||||||
Dividends paid to minority shareholders |
| | | | | | (11.4 | ) | (11.4 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| | (1.1 | ) | | 4.8 | 3.7 | (13.8 | ) | (10.1 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
As at September 28, 2013 |
| 984.0 | (10.1 | ) | (23.8 | ) | 819.9 | 1,770.0 | 248.1 | 2,018.1 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Q3 2012* | ||||||||||||||||||||||||||||||||
Share capital $ million |
Share premium account $ million |
Own shares $ million |
Other reserves $ million |
Accumulated surplus $ million |
Total shareholders equity $ million |
Non- controlling interests $ million |
Total equity $ million |
|||||||||||||||||||||||||
As at June 30, 2012 |
| 2,145.5 | (0.5 | ) | (60.6 | ) | 187.0 | 2,271.4 | 256.9 | 2,528.3 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Profit for the period |
| | | | 2.8 | 2.8 | 6.6 | 9.4 | ||||||||||||||||||||||||
Other comprehensive loss |
| | | 66.1 | (13.5 | ) | 52.6 | 3.2 | 55.8 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive (loss)/income |
| | | 66.1 | (10.7 | ) | 55.4 | 9.8 | 65.2 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other changes in equity: |
||||||||||||||||||||||||||||||||
Buy-back of shares from management |
| | (0.2 | ) | | | (0.2 | ) | | (0.2 | ) | |||||||||||||||||||||
Issue of ordinary B shares |
| 0.4 | 0.2 | | (0.6 | ) | | | | |||||||||||||||||||||||
Share-based incentives (including a tax benefit of $0.5 million) |
| | | | 13.5 | 13.5 | | 13.5 | ||||||||||||||||||||||||
Dividends paid to minority shareholders |
| | | | | | (12.4 | ) | (12.4 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| 0.4 | | | 12.9 | 13.3 | (12.4 | ) | 0.9 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
As at September 29, 2012 |
| 2,145.9 | (0.5 | ) | 5.5 | 189.2 | 2,340.1 | 254.3 | 2,594.4 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 12
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
(Unaudited)
9M 2013
Share capital $ million |
Shares to be issued $ million |
Share premium account $ million |
Own shares $ million |
Other reserves $ million |
Accumulated surplus $ million |
Total shareholders equity $ million |
Non- controlling interests $ million |
Total equity $ million |
||||||||||||||||||||||||||||
As at December 31, 2012 |
| | 984.0 | (10.8 | ) | 4.6 | 716.8 | 1,694.6 | 249.3 | 1,943.9 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Profit for the period |
| | | | | 84.6 | 84.6 | 20.3 | 104.9 | |||||||||||||||||||||||||||
Other comprehensive (loss)/income |
| | | | (28.4 | ) | 2.8 | (25.6 | ) | (4.8 | ) | (30.4 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total comprehensive (loss)/income |
| | | | (28.4 | ) | 87.4 | 59.0 | 15.5 | 74.5 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other changes in equity: |
||||||||||||||||||||||||||||||||||||
Buy-back of shares from management |
| | | (1.7 | ) | | | (1.7 | ) | | (1.7 | ) | ||||||||||||||||||||||||
Issue of own shares to management |
| | | 2.4 | | (2.4 | ) | | | | ||||||||||||||||||||||||||
Share-based incentives (including a tax benefit of $0.8 million) |
| | | | | 18.1 | 18.1 | 0.4 | 18.5 | |||||||||||||||||||||||||||
Shares issued by a subsidiary to minority shareholders |
| | | | | | | 2.7 | 2.7 | |||||||||||||||||||||||||||
Redemption of subsidiary preference shares held by minority shareholders |
| | | | | | | (2.5 | ) | (2.5 | ) | |||||||||||||||||||||||||
Dividends paid to minority shareholders |
| | | | | | | (17.3 | ) | (17.3 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| | | 0.7 | | 15.7 | 16.4 | (16.7 | ) | (0.3 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
As at September 28, 2013 |
| | 984.0 | (10.1 | ) | (23.8 | ) | 819.9 | 1,770.0 | 248.1 | 2,018.1 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
9M 2012* | ||||||||||||||||||||||||||||||||||||
Share capital $ million |
Shares to be issued $ million |
Share premium account $ million |
Own shares $ million |
Other reserves $ million |
Accumulated (deficit)/ surplus $ million |
Total shareholders equity $ million |
Non- controlling interests $ million |
Total equity $ million |
||||||||||||||||||||||||||||
As at December 31, 2011 |
| | 2,143.3 | (0.3 | ) | (47.5 | ) | (20.6 | ) | 2,074.9 | 268.7 | 2,343.6 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Profit for the period |
| | | | | 194.0 | 194.0 | 17.5 | 211.5 | |||||||||||||||||||||||||||
Other comprehensive loss |
| | | | 53.0 | (25.2 | ) | 27.8 | 1.4 | 29.2 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total comprehensive (loss)/income |
| | | | 53.0 | 168.8 | 221.8 | 18.9 | 240.7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Other changes in equity: |
||||||||||||||||||||||||||||||||||||
Subscription for shares not yet issued |
| 0.3 | | | | (0.3 | ) | | | | ||||||||||||||||||||||||||
Buy-back of shares from management |
| | | (1.1 | ) | | | (1.1 | ) | | (1.1 | ) | ||||||||||||||||||||||||
Issue of ordinary B shares |
| (0.3 | ) | 2.6 | 0.9 | | (3.2 | ) | | | | |||||||||||||||||||||||||
Share-based incentives (including a tax benefit of $0.8 million) |
| | | | | 44.5 | 44.5 | 0.3 | 44.8 | |||||||||||||||||||||||||||
Dividends paid to minority shareholders |
| | | | | | | (33.6 | ) | (33.6 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| | 2.6 | (0.2 | ) | | 41.0 | 43.4 | (33.3 | ) | 10.1 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
As at September 29, 2012 |
| | 2,145.9 | (0.5 | ) | 5.5 | 189.2 | 2,340.1 | 254.3 | 2,594.4 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 13
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 | BASIS OF PREPARATION |
These condensed consolidated financial statements cover:
| the 13-week period from June 30, 2013 to September 28, 2013 (Q3 2013), with comparative information for the 13-week period from July 1, 2012 to September 29, 2012 (Q3 2012); and |
| the 39-week period from January 1, 2013 to September 28, 2013 (9M 2013), with comparative information for the 39-week period from January 1, 2012 to September 29, 2012 (9M 2012). |
The condensed consolidated financial statements have been prepared on a going concern basis in accordance with IAS 34 Interim Financial Reporting and were approved by the Board of Directors on November 4, 2013. These financial statements have not been subject to audit, but comparative numbers as at December 31, 2012 have been derived from the Groups audited financial statements included in its Annual Report on Form 20-F, filed with the SEC on March 21, 2013.
Except as outlined below, the Groups accounting policies are unchanged compared with the year ended December 31, 2012.
At the beginning of the period, the Group adopted the following accounting pronouncements that are relevant to its operations:
| IFRS 10 Consolidated Financial Statements |
| IFRS 11 Joint Arrangements |
| IFRS 12 Disclosure of Interests in Other Entities |
| Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance |
| IFRS 13 Fair Value Measurement |
| IAS 19 Employee Benefits (2011) (IAS 19R) |
| Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) |
| IAS 28 Investments in Associates and Joint Ventures (2011) |
| Improvements to IFRSs 2011 |
An outline of each of the above pronouncements was provided on pages F-22 and F-24 of the Groups 2012 Annual Report on Form 20-F. The only pronouncement adopted during the period that had any significant impact on the results or financial position of the Group during the period was the retrospective application of IAS 19R.
Retrospective impact of the adoption of IAS 19R
The retrospective adoption of this pronouncement had no impact on the consolidated balance sheet as at December 31, 2012, but there was an impact on the Groups results from operations for Q3 2012 and 9M 2012, which is summarized below:
Amounts as previously disclosed* |
Restated amounts |
Retrospective (debit)/credit adjustment required under IAS 19R |
||||||||||||||||||||||
Q3 2012 $ million |
9M 2012 $ million |
Q3 2012 $ million |
9M 2012 $ million |
Q3 2012 $ million |
9M 2012 $ million |
|||||||||||||||||||
Condensed consolidated income statement |
||||||||||||||||||||||||
Administrative expenses |
(132.5 | ) | (390.5 | ) | (133.2 | ) | (392.4 | ) | (0.7 | ) | (1.9 | ) | ||||||||||||
Interest expense |
(58.4 | ) | (200.5 | ) | (44.5 | ) | (159.8 | ) | 13.9 | 40.7 | ||||||||||||||
Investment income |
17.1 | 50.9 | 0.5 | 1.7 | (16.6 | ) | (49.2 | ) | ||||||||||||||||
Other finance income/(expense) |
(66.2 | ) | (73.1 | ) | (67.9 | ) | (78.3 | ) | (1.7 | ) | (5.2 | ) | ||||||||||||
Income tax benefit |
64.0 | 102.2 | 65.7 | 107.2 | 1.7 | 5.0 | ||||||||||||||||||
Profit/(loss) for the period from discontinued operations |
16.6 | 180.6 | 16.0 | 179.2 | (0.6 | ) | (1.4 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(4.0 | ) | (12.0 | ) | |||||||||||||||||||||
Condensed consolidated statement of comprehensive income |
||||||||||||||||||||||||
Post-employment benefits |
(24.9 | ) | (55.7 | ) | (19.0 | ) | (38.0 | ) | 5.9 | 17.7 | ||||||||||||||
Income tax benefit/(expense) |
7.4 | 18.7 | 5.5 | 13.0 | (1.9 | ) | (5.7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
4.0 | 12.0 | |||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net impact |
| | ||||||||||||||||||||||
|
|
|
|
* | Re-presented for the reclassification of certain costs (see Re-presentations below). |
PAGE | 14
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1 | BASIS OF PREPARATION (CONTINUED) |
Re-presentations
In addition to the restatements described above, the Group has re-presented its comparative information for the following:
| revisions to the segmental reporting as described in note 2A; and |
| the reclassification of certain comparative numbers to present more appropriately the Groups expenses based on their function within the Group. Cost of sales in Q3 2012 has been reduced from $481.9 million (9M 2012: $1,499.5 million) to $476.9 million (9M 2012: $1,485.5 million). A corresponding adjustment has been made to distribution expenses, which have been increased from $89.5 million to $89.8 million (9M 2012: from $270.4 million to $272.1 million), and to administrative expenses, which have been increased from $128.5 million to $133.2 million (9M 2012: from $380.1 million to $392.4 million), in both cases after restatement for IAS 19R. These reclassifications have had no impact on operating profit for the period. |
2 | SEGMENT INFORMATION |
A) | BACKGROUND |
Gates manufactures a wide range of systems and components for the industrial equipment, car and truck manufacturing markets, and industrial and automotive aftermarkets throughout the world. The business is comprised of four operating segments: Gates North America, Gates South America, Gates Europe, Middle East & Africa (Gates EMEA) and Gates Asia and the Pacific Regions (Gates APAC).
Aquatic manufactures baths and whirlpools for the residential, and hotel and resort development markets, mainly in North America.
The Groups operating segments are identified by grouping together businesses that manufacture similar products, and, in the case of the Gates group of businesses, by grouping together businesses that operate in similar regions, as this is the basis on which information is provided to the Board for the purposes of allocating resources within the Group and assessing the performance of the Groups businesses.
The Groups internal management reports distinguish between those of the Groups continuing operations that are ongoing and those that have been exited but do not meet the conditions to be classified as discontinued operations.
During 2012, the former Bathware operating segment was renamed Aquatic.
Previously, the Gates North America segment included certain US income and expenses that related to the worldwide operations (including items relating to royalties, research and development, global marketing, information technology, human resources and other global services). These items are now reallocated across all the Gates segments to ensure comparability of reporting between segments.
In addition, costs incurred at a Group level (including management oversight, accounting, treasury, tax, information services and legal services) have been previously partially allocated across all of the Groups segments. These costs are now no longer allocated and are presented within the Corporate segment, providing a clearer view of the controllable performance of the individual operational segments.
Comparative information for Q3 2012 and 9M 2012 has been re-presented to reflect these segmental reporting revisions.
B) | MEASURE OF SEGMENT PROFIT OR LOSS |
The Board uses adjusted earnings before net finance costs, income taxes, depreciation and amortization (adjusted EBITDA) to measure the profitability of each segment. Adjusted EBITDA is, therefore, the measure of segment profit or loss presented in the Groups segment disclosures.
EBITDA represents profit or loss for the period before net finance costs, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before specific items that are considered to hinder comparison of the trading performance of the Groups businesses either year-on-year or with other businesses.
During the periods under review, the specific items excluded from EBITDA in arriving at adjusted EBITDA were as follows:
| the compensation expense in relation to share-based incentives; |
| impairments, comprising impairments of goodwill and material impairments of other assets; |
| restructuring costs; and |
| the net gain or loss on disposals and on the exit of businesses. |
For the avoidance of any confusion, the non-GAAP measures EBITDA and adjusted EBITDA differ in certain respects to consolidated EBITDA as defined in the financial covenants attaching to the Senior Secured Credit Facilities.
PAGE | 15
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 | SEGMENT INFORMATION (CONTINUED) |
C) | SALES AND ADJUSTED EBITDA CONTINUING OPERATIONS |
Sales | Adjusted EBITDA | |||||||||||||||
Q3 2013 $ million |
Q3 2012* $ million |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
|||||||||||||
Ongoing segments |
||||||||||||||||
Gates: |
||||||||||||||||
Gates North America |
339.8 | 343.5 | 84.2 | 75.8 | ||||||||||||
Gates South America |
37.5 | 33.4 | 5.1 | 3.3 | ||||||||||||
Gates EMEA |
188.3 | 169.2 | 32.8 | 22.0 | ||||||||||||
Gates APAC |
153.2 | 168.2 | 35.4 | 34.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
718.8 | 714.3 | 157.5 | 135.8 | |||||||||||||
Aquatic |
35.6 | 29.4 | 0.5 | (6.2 | ) | |||||||||||
Corporate |
| | (13.0 | ) | (13.5 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total ongoing |
754.4 | 743.7 | 145.0 | 116.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exited segments |
||||||||||||||||
Other I&A |
| | | (0.1 | ) | |||||||||||
Doors & Windows |
| | | (0.7 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total exited |
| | | (0.8 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total continuing operations |
754.4 | 743.7 | 145.0 | 115.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
By origin |
||||||||||||||||
US |
307.5 | 307.1 | 52.8 | 40.2 | ||||||||||||
Rest of North America |
75.7 | 73.7 | 23.8 | 20.1 | ||||||||||||
UK |
22.7 | 19.7 | 2.2 | (1.6 | ) | |||||||||||
Rest of Europe |
150.2 | 136.0 | 26.1 | 19.1 | ||||||||||||
Asia |
140.5 | 153.7 | 33.8 | 33.2 | ||||||||||||
Rest of the world |
57.8 | 53.5 | 6.3 | 4.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
754.4 | 743.7 | 145.0 | 115.3 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
By destination |
||||||||||||||||
US |
311.8 | 309.2 | ||||||||||||||
Rest of North America |
65.7 | 65.0 | ||||||||||||||
UK |
17.0 | 15.3 | ||||||||||||||
Rest of Europe |
154.6 | 139.3 | ||||||||||||||
Asia |
139.9 | 153.5 | ||||||||||||||
Rest of the world |
65.4 | 61.4 | ||||||||||||||
|
|
|
|
|||||||||||||
754.4 | 743.7 | |||||||||||||||
|
|
|
|
* | Restated and/or re-presented (see note 1) |
Sales between reporting segments and the impact of such sales on segmental adjusted EBITDA are not included in internal reports presented to the Board and have therefore not been included above.
PAGE | 16
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 | SEGMENT INFORMATION (CONTINUED) |
C) | SALES AND ADJUSTED EBITDA CONTINUING OPERATIONS (continued) |
Sales | Adjusted EBITDA | |||||||||||||||
9M 2013 $ million |
9M 2012* $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Ongoing segments |
||||||||||||||||
Gates |
||||||||||||||||
Gates North America |
1,046.1 | 1,051.3 | 245.3 | 241.1 | ||||||||||||
Gates South America |
123.6 | 114.6 | 15.9 | 10.9 | ||||||||||||
Gates EMEA |
575.5 | 565.7 | 101.4 | 90.5 | ||||||||||||
Gates APAC |
481.9 | 512.2 | 104.5 | 104.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,227.1 | 2,243.8 | 467.1 | 447.0 | |||||||||||||
Aquatic |
100.7 | 87.8 | 1.5 | (5.4 | ) | |||||||||||
Corporate |
| | (39.8 | ) | (39.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total ongoing segments |
2,327.8 | 2,331.6 | 428.8 | 402.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exited segments |
||||||||||||||||
Powertrain |
| | (0.5 | ) | | |||||||||||
Other I&A |
| | | (0.2 | ) | |||||||||||
Doors & Windows |
| | (0.5 | ) | (0.8 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total exited segments |
| | (1.0 | ) | (1.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total continuing operations |
2,327.8 | 2,331.6 | 427.8 | 401.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
By origin |
||||||||||||||||
US |
936.4 | 934.9 | 151.9 | 146.7 | ||||||||||||
Rest of North America |
233.2 | 226.9 | 67.7 | 60.8 | ||||||||||||
UK |
65.2 | 65.0 | 6.5 | 0.5 | ||||||||||||
Rest of Europe |
465.0 | 458.6 | 82.4 | 77.3 | ||||||||||||
Asia |
441.9 | 467.9 | 99.9 | 98.9 | ||||||||||||
Rest of the world |
186.1 | 178.3 | 19.4 | 16.8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
2,327.8 | 2,331.6 | 427.8 | 401.0 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
By destination |
||||||||||||||||
US |
954.8 | 942.5 | ||||||||||||||
Rest of North America |
197.4 | 199.3 | ||||||||||||||
UK |
50.8 | 50.4 | ||||||||||||||
Rest of Europe |
476.0 | 469.5 | ||||||||||||||
Asia |
439.4 | 466.9 | ||||||||||||||
Rest of the world |
209.4 | 203.0 | ||||||||||||||
|
|
|
|
|||||||||||||
2,327.8 | 2,331.6 | |||||||||||||||
|
|
|
|
* | Restated and/or re-presented (see note 1) |
Sales between reporting segments and the impact of such sales on segmental adjusted EBITDA are not included in internal reports presented to the Board and have therefore not been included above.
PAGE | 17
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 | SEGMENT INFORMATION (CONTINUED) |
C) | SALES AND ADJUSTED EBITDA CONTINUING OPERATIONS (continued) |
Reconciliation of profit/(loss) for the period from continuing operations to adjusted EBITDA:
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Profit/(loss) for the period from continuing operations |
35.0 | (6.6 | ) | 99.4 | 32.3 | |||||||||||
Income tax expense/(benefit) |
6.4 | (65.7 | ) | 28.3 | (107.2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit/(loss) before tax |
41.4 | (72.3 | ) | 127.7 | (74.9 | ) | ||||||||||
Net finance costs |
34.5 | 111.9 | 99.0 | 236.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit |
75.9 | 39.6 | 226.7 | 161.5 | ||||||||||||
Amortization |
29.8 | 30.8 | 89.9 | 93.5 | ||||||||||||
Depreciation |
24.2 | 29.3 | 72.3 | 87.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
129.9 | 99.7 | 388.9 | 342.4 | ||||||||||||
Share-based incentives |
5.0 | 11.3 | 17.7 | 38.1 | ||||||||||||
Impairments |
1.9 | | 2.4 | 3.1 | ||||||||||||
Restructuring costs (see note 3) |
8.6 | 4.9 | 18.5 | 17.5 | ||||||||||||
Net (gain)/loss on disposals and on the exit of businesses (see note 3) |
(0.4 | ) | (0.6 | ) | 0.3 | (0.1 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
145.0 | 115.3 | 427.8 | 401.0 | ||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
3 | RESTRUCTURING INITIATIVES |
Restructuring costs in 9M 2013 were $18.5 million (9M 2012: $18.2 million), including $7.2 million recognized during Q3 2013 in respect of the closure of our facility in Ashe County, North Carolina. This project is expected to be largely completed by the end of 2013, with production transferred to our Siloam Springs, Arkansas and Toluca, Mexico facilities, enhancing our overall efficiency. Restructuring costs for 9M 2013 also include $5.0 million (of which $1.1 million was recognized in Q3 2013) in relation to the planned closure of the London corporate center and the transfer of the majority of those functions to the Groups corporate headquarters in Denver, Colorado. An additional $4.7 million has been recognized during the year in respect of business and executive severance and reorganization costs, largely in Gates North America.
Restructuring costs incurred in 9M 2012 included $11.5 million in relation to Project Sierra, an initiative that focused on identifying and implementing cost reduction opportunities and efficiency improvements across the Gates businesses, and costs of $4.9 million incurred in relation to the closure of the Charleston plant, of which $2.8 million was incurred during Q3 2012.
During 9M 2013, the Group recognized $5.5 million in relation to disposals of discontinued operations, primarily in relation to provision releases of $6.8 million in relation to discontinued operations that were sold in previous years, partially offset by additional costs recognized on prior period disposals. During 9M 2012, the Group recognized a gain of $163.9 million on the disposal of the majority of the businesses comprising its discontinued Sensors & Valves operating segment.
Q3 2013 | Q3 2012 | 9M 2013 | 9M 2012 | |||||||||||||||||||||||||||||
Restructuring costs $ million |
Disposals and exit of businesses $ million |
Restructuring costs $ million |
Disposals and exit of businesses $ million |
Restructuring costs $ million |
Disposals and exit of businesses $ million |
Restructuring costs $ million |
Disposals and exit of businesses $ million |
|||||||||||||||||||||||||
Continuing operations |
||||||||||||||||||||||||||||||||
Ongoing segments |
||||||||||||||||||||||||||||||||
Gates: |
||||||||||||||||||||||||||||||||
Gates North America |
(7.3 | ) | | (4.0 | ) | | (12.1 | ) | (0.1 | ) | (11.1 | ) | | |||||||||||||||||||
Gates South America |
(0.2 | ) | | (0.4 | ) | | (0.3 | ) | | (1.1 | ) | | ||||||||||||||||||||
Gates EMEA |
0.2 | | 0.5 | | 1.0 | (0.8 | ) | (2.2 | ) | | ||||||||||||||||||||||
Gates APAC |
| | (1.1 | ) | | (0.2 | ) | | (3.6 | ) | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(7.3 | ) | | (5.0 | ) | | (11.6 | ) | (0.9 | ) | (18.0 | ) | | ||||||||||||||||||||
Aquatic |
| | 0.1 | | (0.1 | ) | | (0.5 | ) | | ||||||||||||||||||||||
Corporate |
(1.3 | ) | 0.4 | | 0.6 | (6.8 | ) | 0.6 | | 0.1 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total ongoing |
(8.6 | ) | 0.4 | (4.9 | ) | 0.6 | (18.5 | ) | (0.3 | ) | (18.5 | ) | 0.1 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Exited segments |
||||||||||||||||||||||||||||||||
Powertrain |
| | | | | | 1.0 | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Continuing operations |
(8.6 | ) | 0.4 | (4.9 | ) | 0.6 | (18.5 | ) | (0.3 | ) | (17.5 | ) | 0.1 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Discontinued operations |
| (1.5 | ) | (0.3 | ) | 0.5 | | 5.5 | (0.7 | ) | 163.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operations |
(8.6 | ) | (1.1 | ) | (5.2 | ) | 1.1 | (18.5 | ) | 5.2 | (18.2 | ) | 164.0 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 18
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4 | INTEREST EXPENSE |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Borrowings: |
||||||||||||||||
Interest on bank and other loans: |
||||||||||||||||
Term loans |
20.3 | 26.5 | 61.7 | 80.1 | ||||||||||||
Other bank loans |
0.7 | 0.6 | 2.1 | 2.4 | ||||||||||||
Second Lien Notes |
10.4 | 15.2 | 32.6 | 65.2 | ||||||||||||
2015 Notes |
0.4 | 0.4 | 0.8 | 1.0 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31.8 | 42.7 | 97.2 | 148.7 | |||||||||||||
Interest element of finance lease rentals |
| 0.2 | | 0.3 | ||||||||||||
Net loss/(gain) on financial liabilities held at amortized cost |
| 0.9 | (1.2 | ) | 6.2 | |||||||||||
Other interest payable |
2.0 | 0.7 | 5.7 | 4.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
33.8 | 44.5 | 101.7 | 160.1 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Continuing operations |
33.8 | 44.5 | 101.7 | 159.8 | ||||||||||||
Discontinued operations |
| | | 0.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
33.8 | 44.5 | 101.7 | 160.1 | |||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
Details of the bank and other loans are presented in note 11. Interest expense includes the amortization of issue costs incurred in relation to the borrowings.
5 | INVESTMENT INCOME |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Interest on bank deposits |
0.4 | 0.6 | 1.3 | 1.7 | ||||||||||||
Other interest receivable |
| | 0.1 | 0.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
0.4 | 0.6 | 1.4 | 1.9 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Continuing operations |
0.4 | 0.5 | 1.4 | 1.7 | ||||||||||||
Discontinued operations |
| 0.1 | | 0.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
0.4 | 0.6 | 1.4 | 1.9 | |||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
6 | OTHER FINANCE (EXPENSE)/INCOME |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
(Loss)/gain on embedded derivatives |
(0.1 | ) | (6.2 | ) | 8.3 | (11.3 | ) | |||||||||
Currency translation gain on hedging instruments |
4.0 | 3.9 | 1.2 | 2.1 | ||||||||||||
Costs incurred on the prepayment of borrowings |
(3.5 | ) | (63.9 | ) | (3.5 | ) | (63.9 | ) | ||||||||
Net interest recognized in respect of post-employment benefits |
(1.5 | ) | (1.9 | ) | (4.7 | ) | (5.8 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(1.1 | ) | (68.1 | ) | 1.3 | (78.9 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Continuing operations |
(1.1 | ) | (67.9 | ) | 1.3 | (78.3 | ) | |||||||||
Discontinued operations |
| (0.2 | ) | | (0.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(1.1 | ) | (68.1 | ) | 1.3 | (78.9 | ) | ||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 19
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7 | DISCONTINUED OPERATIONS |
A) | BACKGROUND |
On November 9, 2012, the Group sold its Air Distribution segment to the Canada Pension Plan Investment Board, a related party. The Air Distribution segment supplies a wide range of air distribution products and systems, including grilles, registers and diffusers, dampers and fans, for the non-residential and residential construction end markets.
On November 1, 2012, the Group concluded the sale of the businesses comprising the Dexter segment to an affiliate of The Sterling Group, a Houston-based private equity firm. Dexter is a leading manufacturer of axle components for the utility, industrial trailer and recreational vehicle end market segments primarily in the US.
Discontinued operations also include the Schrader Electronics and Schrader International businesses, which together constitute the Sensors & Valves operating segment. Schrader Electronics, which is based in Northern Ireland, is a designer and manufacturer of Tire Pressure Monitoring Systems and sells primarily into automotive OE markets in the US. Schrader International manufactures a range of automotive products including gauges and valves, which are sold mainly in the US and Europe. The Group concluded the disposal of the Schrader businesses on April 27, 2012.
B) | RESULTS AND CASH FLOWS |
The profit for the period from discontinued operations may be analyzed as follows:
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Sales |
| 311.6 | | 1,070.4 | ||||||||||||
Cost of sales |
| (210.4 | ) | | (743.4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
| 101.2 | | 327.0 | ||||||||||||
Distribution costs |
| (33.5 | ) | | (109.9 | ) | ||||||||||
Administrative expenses |
| (24.2 | ) | | (94.7 | ) | ||||||||||
Impairments |
| (1.8 | ) | | (3.4 | ) | ||||||||||
Restructuring costs |
| (0.3 | ) | | (0.7 | ) | ||||||||||
Net gain on disposals and on the exit of businesses |
| 0.5 | | 1.0 | ||||||||||||
Share of profit/(loss) of associates |
| 0.1 | | (0.1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit |
| 42.0 | | 119.2 | ||||||||||||
Interest expense |
| | | (0.3 | ) | |||||||||||
Investment income |
| 0.1 | | 0.2 | ||||||||||||
Other finance expense |
| (0.2 | ) | | (0.6 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit before tax |
| 41.9 | | 118.5 | ||||||||||||
Income tax expense |
| (25.4 | ) | | (114.3 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit after tax |
| 16.5 | | 4.2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss)/profit on disposal of discontinued operations |
||||||||||||||||
(Loss)/profit before tax |
(1.5 | ) | | 5.5 | 162.9 | |||||||||||
Income tax (expense)/benefit |
| (0.5 | ) | | 12.1 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss)/profit after tax |
(1.5 | ) | (0.5 | ) | 5.5 | 175.0 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Loss)/profit for the period from discontinued operations |
(1.5 | ) | 16.0 | 5.5 | 179.2 | |||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
During 9M 2013, the Group recognized provision releases of $6.8 million, primarily in relation to discontinued operations that were sold in previous years, partially offset by additional costs recognized on prior period disposals.
Cash flows arising from discontinued operations during the period were as follows:
Q3 2013 $ million |
Q3 2012 $ million |
9M 2013 $ million |
9M 2012 $ million |
|||||||||||||
Cash inflow from operating activities |
| 48.8 | | 103.0 | ||||||||||||
Cash outflow from investing activities |
| (6.3 | ) | | (20.6 | ) | ||||||||||
Cash outflow from financing activities |
| (0.3 | ) | | (1.7 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase in net cash and cash equivalents |
| 42.2 | | 80.7 | ||||||||||||
|
|
|
|
|
|
|
|
PAGE | 20
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7 | DISCONTINUED OPERATIONS (CONTINUED) |
C) | RECONCILIATION TO ADJUSTED EBITDA |
Reconciliation of profit for the period from discontinued operations to adjusted EBITDA:
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
(Loss)/profit for the period from discontinued operations |
(1.5 | ) | 16.0 | 5.5 | 179.2 | |||||||||||
Loss/(profit) on disposal of discontinued operations |
1.5 | 0.5 | (5.5 | ) | (175.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit after tax |
| 16.5 | | 4.2 | ||||||||||||
Income tax expense |
| 25.4 | | 114.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit before tax |
| 41.9 | | 118.5 | ||||||||||||
Net finance costs |
| 0.1 | | 0.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit |
| 42.0 | | 119.2 | ||||||||||||
Amortization |
| 1.1 | | 11.8 | ||||||||||||
Depreciation |
| 2.5 | | 20.5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
| 45.6 | | 151.5 | ||||||||||||
Share-based incentives |
| 1.7 | | 5.9 | ||||||||||||
Impairments |
| 1.8 | | 3.4 | ||||||||||||
Restructuring costs (see note 3) |
| 0.3 | | 0.7 | ||||||||||||
Net gain on disposals and on the exit of businesses (note 3) |
| (0.5 | ) | | (1.0 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
| 48.9 | | 160.5 | ||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
8 | CASH FLOW |
Q3 2013 $ million |
Restated* Q3 2012 $ million |
9M 2013 $ million |
Restated* 9M 2012 $ million |
|||||||||||||
Profit for the period |
33.5 | 9.4 | 104.9 | 211.5 | ||||||||||||
Interest expense |
33.8 | 44.5 | 101.7 | 160.1 | ||||||||||||
Investment income |
(0.4 | ) | (0.6 | ) | (1.4 | ) | (1.9 | ) | ||||||||
Other finance expense/(income) |
1.1 | 68.1 | (1.3 | ) | 78.9 | |||||||||||
Income tax expense/(benefit) |
6.4 | (39.8 | ) | 28.3 | (5.0 | ) | ||||||||||
Share of profit of associates |
0.2 | (0.2 | ) | 0.1 | (0.3 | ) | ||||||||||
Amortization of intangible assets |
29.8 | 31.9 | 89.9 | 105.3 | ||||||||||||
Depreciation of property, plant and equipment |
24.2 | 31.8 | 72.3 | 107.9 | ||||||||||||
Impairments: |
||||||||||||||||
Investment in associate |
| 1.6 | | 2.6 | ||||||||||||
Property, plant and equipment |
1.8 | 0.2 | 2.3 | 3.5 | ||||||||||||
Trade and other receivables |
0.1 | | 0.1 | 0.4 | ||||||||||||
Loss/(gain) on disposal of businesses: |
||||||||||||||||
Continuing operations |
1.0 | (0.5 | ) | 2.0 | (0.1 | ) | ||||||||||
Discontinued operations |
1.5 | | (5.5 | ) | (162.9 | ) | ||||||||||
Gain on sale of property, plant and equipment |
(1.5 | ) | (0.4 | ) | (2.0 | ) | (0.6 | ) | ||||||||
Share-based incentives |
5.0 | 13.0 | 17.7 | 44.0 | ||||||||||||
Decrease in post-employment benefit obligations |
(7.0 | ) | (11.8 | ) | (19.0 | ) | (32.0 | ) | ||||||||
Increase in provisions |
3.3 | 9.2 | 5.1 | 5.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
132.8 | 156.4 | 395.2 | 516.8 | |||||||||||||
Movements in working capital: |
||||||||||||||||
Increase in inventories |
(16.7 | ) | (6.7 | ) | (22.8 | ) | (55.7 | ) | ||||||||
(Increase)/decrease in receivables |
(9.9 | ) | 24.6 | (190.5 | ) | (114.5 | ) | |||||||||
Increase/(decrease) in payables |
8.7 | (13.1 | ) | 32.3 | 35.6 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash generated from operations |
114.9 | 161.2 | 214.2 | 382.2 | ||||||||||||
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 21
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9 | OTHER INTANGIBLES |
Brands and trade names $ million |
Customer relationships $ million |
Technology and know-how $ million |
Computer software $ million |
Total $ million |
||||||||||||||||
Carrying amount |
||||||||||||||||||||
As at December 31, 2012 |
208.0 | 1,052.7 | 178.4 | 11.5 | 1,450.6 | |||||||||||||||
Additions |
| | | 4.9 | 4.9 | |||||||||||||||
Amortization charge for the period |
| (59.0 | ) | (28.3 | ) | (2.6 | ) | (89.9 | ) | |||||||||||
Foreign currency translation |
| (13.0 | ) | | 0.2 | (12.8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at September 28, 2013 |
208.0 | 980.7 | 150.1 | 14.0 | 1,352.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
10 | TRADE AND OTHER RECEIVABLES |
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Current assets |
||||||||
Financial assets: |
||||||||
Trade receivables |
725.6 | 544.2 | ||||||
Derivative financial instruments (see note 13) |
| 0.5 | ||||||
Collateralized cash |
12.4 | 14.2 | ||||||
Other receivables |
37.2 | 40.6 | ||||||
|
|
|
|
|||||
775.2 | 599.5 | |||||||
|
|
|
|
|||||
Non-financial assets: |
||||||||
Prepayments |
31.5 | 30.2 | ||||||
|
|
|
|
|||||
806.7 | 629.7 | |||||||
|
|
|
|
|||||
Non-current assets |
||||||||
Financial assets: |
||||||||
Derivative financial instruments (see note 13) |
0.1 | 0.1 | ||||||
Other receivables |
4.4 | 4.7 | ||||||
|
|
|
|
|||||
4.5 | 4.8 | |||||||
|
|
|
|
|||||
Non-financial assets: |
||||||||
Prepayments |
12.3 | 16.2 | ||||||
|
|
|
|
|||||
16.8 | 21.0 | |||||||
|
|
|
|
11 | BORROWINGS |
As at September 28, 2013 | As at December 31, 2012 | |||||||||||||||||||||||
Current liabilities $ million |
Non-current liabilities $ million |
Total $ million |
Current liabilities $ million |
Non-current liabilities $ million |
Total $ million |
|||||||||||||||||||
Carrying amount |
||||||||||||||||||||||||
Bank overdrafts |
5.7 | | 5.7 | 2.9 | | 2.9 | ||||||||||||||||||
Bank and other loans: |
||||||||||||||||||||||||
Secured |
23.6 | 1,662.2 | 1,685.8 | 2.2 | 1,763.3 | 1,765.5 | ||||||||||||||||||
Unsecured |
9.1 | 22.0 | 31.1 | 12.0 | 22.1 | 34.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
32.7 | 1,684.2 | 1,716.9 | 14.2 | 1,785.4 | 1,799.6 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
38.4 | 1,684.2 | 1,722.6 | 17.1 | 1,785.4 | 1,802.5 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The Groups secured borrowings are jointly and severally, irrevocably and fully and unconditionally guaranteed by certain of the Companys direct and indirect subsidiaries and secured by liens on substantially all of their assets. An analysis of the security given is presented in note 18.
The carrying amount of borrowings includes the following items, each of which are being amortized to profit or loss over the term of the related borrowings using the effective interest method:
| costs incurred on the arrangement and subsequent re-pricings and amendments of the Term Loan A and Term Loan B credit facilities and on the issuance of the Second Lien Notes and subsequent amendments to the indenture governing those notes; and |
| the fair value on inception of the interest rate floor (an embedded derivative) that applies to amounts drawn down under the Term Loan A and Term Loan B credit facilities and the change in the fair value of the interest rate floor that resulted from the subsequent re-pricings of the facilities. |
PAGE | 22
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 | BORROWINGS (CONTINUED) |
The carrying amount of borrowings may be reconciled to the principal amount outstanding as follows:
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Carrying amount |
1,722.6 | 1,802.5 | ||||||
Issue costs and interest rate floor adjustment |
100.5 | 132.6 | ||||||
Accrued interest payable |
(28.6 | ) | (10.6 | ) | ||||
|
|
|
|
|||||
Principal amount |
1,794.5 | 1,924.5 | ||||||
|
|
|
|
The principal amount of borrowings may be analyzed as follows:
As at September 28, 2013 | As at December 31, 2012 | |||||||||||||||||||||||
Current liabilities $ million |
Non-current liabilities $ million |
Total $ million |
Current liabilities $ million |
Non-current liabilities $ million |
Total $ million |
|||||||||||||||||||
Principal amount |
||||||||||||||||||||||||
Bank overdrafts |
5.7 | | 5.7 | 2.9 | | 2.9 | ||||||||||||||||||
Bank and other loans: |
||||||||||||||||||||||||
Secured |
||||||||||||||||||||||||
Term Loan A |
12.3 | 80.0 | 92.3 | 12.3 | 86.4 | 98.7 | ||||||||||||||||||
Term Loan B |
13.7 | 1,321.8 | 1,335.5 | 13.7 | 1,330.5 | 1,344.2 | ||||||||||||||||||
Second Lien Notes |
| 330.0 | 330.0 | | 445.0 | 445.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
26.0 | 1,731.8 | 1,757.8 | 26.0 | 1,861.9 | 1,887.9 | |||||||||||||||||||
Unsecured |
||||||||||||||||||||||||
2015 Notes |
| 21.2 | 21.2 | | 21.3 | 21.3 | ||||||||||||||||||
Other loan notes |
9.0 | | 9.0 | 11.6 | | 11.6 | ||||||||||||||||||
Other bank loans |
| 0.8 | 0.8 | | 0.8 | 0.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
9.0 | 22.0 | 31.0 | 11.6 | 22.1 | 33.7 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
40.7 | 1,753.8 | 1,794.5 | 40.5 | 1,884.0 | 1,924.5 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Senior Secured Credit Facilities
The Group has Senior Secured Credit Facilities consisting of a Term Loan A credit facility, a Term Loan B credit facility and a senior secured revolving credit facility. The Term Loan A credit facility and the revolving credit facility mature on September 29, 2015 and the Term Loan B credit facility matures on September 29, 2016.
Term Loan A is subject to quarterly amortization payments of 2.5% and Term Loan B is subject to quarterly amortization payments of 0.25%, in each case based on the original principal amount less certain prepayments, with the balance payable on maturity. During 9M 2013, the Group made amortization payments of $6.2 million against Term Loan A and $6.8 million against Term Loan B. The third quarter amortization payments, totalling $6.5 million, fell due and were paid on September 30, subsequent to the Groups balance sheet date, and have therefore not been recognized in Q3 2013.
As at September 28, 2013, the principal amount outstanding under Term Loan A was $92.3 million and that under Term Loan B was $1,335.5 million.
The revolving credit facility provides for multi-currency revolving loans and letters of credit up to an aggregate principal amount of $300.0 million, with a letter of credit sub-facility of $100.0 million. As at September 28, 2013, there were no drawings for cash under the revolving credit facility but there were letters of credit outstanding amounting to $51.0 million.
Borrowings under the Senior Secured Credit Facilities bear interest at a floating rate, which can be either LIBOR plus an applicable margin or, at the Groups option, a base rate as defined in the credit agreement plus an applicable margin. LIBOR and the base rate are both subject to interest rate floors.
Effective January 18, 2013, the Group agreed with the providers of the Senior Secured Credit Facilities a re-pricing of Term Loan A and Term Loan B. For both term loans, the applicable margin for LIBOR was reduced from 3.0% to 2.75% per annum, with LIBOR being subject to a reduced floor of 1.0% (previously 1.25%), and the applicable margin for base rate was reduced from 2.0% to 1.75% per annum, with base rate being subject to a reduced floor of 2.0% (previously 2.25%). As at September 28, 2013, borrowings under both Term Loan A and Term Loan B attracted an interest rate of 3.75% per annum (in both cases, to be next re-set on December 27, 2013). Management considered that the re-pricing did not cause a substantial change in the net present value of the expected future cash flows in relation to the facilities. Accordingly, the Group has recognized neither a gain nor a loss on the re-pricing and recognized the associated costs of $2.0 million and the associated decrease of $10.9 million in the embedded interest rate derivative as adjustments to the carrying amounts of the borrowings outstanding under the facilities, which will be amortized to profit or loss over the term of the related borrowings using the effective interest method.
PAGE | 23
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 | BORROWINGS (CONTINUED) |
Second Lien Notes
As at September 28, 2013, the Group had outstanding $330.0 million 9% Senior Secured Second Lien Notes (the Second Lien Notes), which mature on October 1, 2018.
At any time, or from time to time, prior to October 1, 2013, but not more than once in any twelve-month period, the Group had the option to redeem up to 10% of the original aggregate principal amount of the Second Lien Notes at a redemption price of 103% of the principal amount thereof plus accrued and unpaid interest thereon up to but not including the redemption date.
On July 10, 2013, the Group gave notice to the holders of the Second Lien Notes of its intention to exercise this call option in full. The resulting prepayment of an aggregate principal amount of $115.0 million, plus the required 3% premium and interest accrued up to the redemption date, was made on September 4, 2013.
At any time prior to October 1, 2014, the Group may redeem the Second Lien Notes at its option, in whole at any time or in part from time to time, at 100% of the principal amount thereof plus the greater of (i) 1% of the principal amount and (ii) the excess of the present value at the redemption date of the redemption price as at October 1, 2014 and the required interest payments due from the redemption date to October 1, 2014 (discounted using an appropriate US Treasury Rate plus 50 basis points) over the principal amount, plus accrued and unpaid interest to the redemption date.
On and after October 1, 2014, the Group may redeem the Second Lien Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest to the redemption date:
Redemption price | ||||
During the year commencing: |
||||
October 1, 2014 |
104.50 | % | ||
October 1, 2015 |
102.25 | % | ||
October 1, 2016 and thereafter |
100.00 | % |
In the event of a change of control over the Company, each holder will have the right to require the Group to repurchase all or any part of such holders Second Lien Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase, except to the extent that the Group has previously elected to redeem the Second Lien Notes.
2015 Notes
When it was acquired by the Group, one of Tomkins plcs subsidiaries had in issue 6.125% notes repayable at par on September 16, 2015 (the 2015 Notes). As at September 28, 2013, the principal amount outstanding of the 2015 Notes was £13.2 million ($21.2 million).
Other loan notes
Other loan notes comprise principally the loan notes that certain shareholders in Tomkins plc elected to receive as an alternative to cash in respect of all or part of the consideration payable to them by the Group on the acquisition of Tomkins plc (the Loan Note Alternative). During 9M 2013, loan notes with a principal amount of £1.6 million were repaid at the request of certain of the note holders. As at September 28, 2013, loan notes with a principal amount of £5.6 million ($9.0 million) were outstanding under the Loan Note Alternative. The loan notes accrue interest at the higher of 0.8% below LIBOR and 0% (to be next re-set on December 31, 2013).
The loan notes fall due for repayment, at par, on December 31, 2015, prior to which each holder has the right to require full or part repayment, at par, half-yearly on June 30 and December 31 and for this reason these loan notes are classified as current liabilities. The Group may purchase some or all of the loan notes at any time and at any price by tender, private treaty or otherwise.
Although the loan notes are unsecured, the Group is required to retain in an escrow account cash equivalent to the nominal amount of the outstanding loan notes.
PAGE | 24
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12 | TRADE AND OTHER PAYABLES |
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Current liabilities |
||||||||
Financial liabilities: |
||||||||
Trade payables |
292.2 | 278.2 | ||||||
Other taxes and social security |
21.4 | 19.2 | ||||||
Derivative financial instruments (see note 13) |
0.1 | 0.3 | ||||||
Other payables |
20.6 | 23.6 | ||||||
|
|
|
|
|||||
334.3 | 321.3 | |||||||
|
|
|
|
|||||
Non-financial liabilities: |
||||||||
Accruals and deferred income |
119.4 | 107.7 | ||||||
|
|
|
|
|||||
453.7 | 429.0 | |||||||
|
|
|
|
|||||
Non-current liabilities |
||||||||
Financial liabilities: |
||||||||
Derivative financial instruments (see note 13) |
22.4 | 41.7 | ||||||
Other payables |
13.5 | 13.2 | ||||||
|
|
|
|
|||||
35.9 | 54.9 | |||||||
|
|
|
|
|||||
Non-financial liabilities: |
||||||||
Accruals and deferred income |
1.0 | | ||||||
|
|
|
|
|||||
36.9 | 54.9 | |||||||
|
|
|
|
13 | DERIVATIVE FINANCIAL INSTRUMENTS |
The carrying amount of derivative financial instruments held by the Group was as follows:
As at September 28, 2013 | As at December 31, 2012 | |||||||||||||||||||||||
Assets $ million |
Liabilities $ million |
Total $ million |
Assets $ million |
Liabilities $ million |
Total $ million |
|||||||||||||||||||
Hedging activities |
||||||||||||||||||||||||
Translational hedges: |
||||||||||||||||||||||||
Currency swaps |
0.1 | | 0.1 | 0.1 | (0.1 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Transactional hedges: |
||||||||||||||||||||||||
Currency forwards |
| (0.1 | ) | (0.1 | ) | 0.5 | (0.3 | ) | 0.2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
0.1 | (0.1 | ) | | 0.6 | (0.4 | ) | 0.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other items |
||||||||||||||||||||||||
Embedded derivatives |
| (22.4 | ) | (22.4 | ) | | (41.6 | ) | (41.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
0.1 | (22.5 | ) | (22.4 | ) | 0.6 | (42.0 | ) | (41.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Classified as: |
||||||||||||||||||||||||
Current |
| (0.1 | ) | (0.1 | ) | 0.5 | (0.3 | ) | 0.2 | |||||||||||||||
Non-current |
0.1 | (22.4 | ) | (22.3 | ) | 0.1 | (41.7 | ) | (41.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
0.1 | (22.5 | ) | (22.4 | ) | 0.6 | (42.0 | ) | (41.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
14 | FAIR VALUE |
With the exception of bank and other loans, the carrying amounts of all of the Groups financial assets and liabilities are considered to approximate to their fair values. Available-for-sale investments include equity instruments acquired as part of the disposal of the Schrader businesses in April 2012. These instruments are unlisted and management does not believe that a reliable estimate of their fair value can be determined. The instruments are therefore carried at cost, being the value of $14.4 million ascribed to them under the disposal agreement.
The carrying amount, which includes certain deferred costs as described in note 11, and fair value of bank and other loans may be analyzed as follows:
As at September 28, 2013 | As at December 31, 2012 | |||||||||||||||
Carrying amount $ million |
Fair value $ million |
Carrying amount $ million |
Fair value $ million |
|||||||||||||
Current |
32.7 | 63.6 | 14.2 | 48.4 | ||||||||||||
Non-current |
1,684.2 | 1,787.3 | 1,785.4 | 1,947.9 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,716.9 | 1,850.9 | 1,799.6 | 1,996.3 | |||||||||||||
|
|
|
|
|
|
|
|
PAGE | 25
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14 | FAIR VALUE (CONTINUED) |
As at September 28, 2013 and December 31, 2012, the Group had no significant assets or liabilities in its balance sheet that were measured at their fair value on a non-recurring basis. The Groups assets and liabilities that are measured at fair value on a recurring basis as required under IFRS are set out below:
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Level 1 |
||||||||
Available-for-sale investments |
2.8 | 1.9 | ||||||
Level 2 |
||||||||
Trade and other receivables: |
||||||||
Derivative assets |
0.1 | 0.6 | ||||||
Trade and other payables: |
||||||||
Derivative liabilities |
(22.5 | ) | (42.0 | ) |
Available-for-sale investments that are held at fair value are listed and are valued by reference to quoted market prices.
Derivative assets and liabilities represent the fair value of foreign currency derivatives held by the Group at the balance sheet date together with embedded interest rate derivatives that were required to be separated from their host loan contracts. Foreign currency derivatives are valued by reference to prevailing forward exchange rates. Embedded interest rate derivatives are valued using a valuation model incorporating assumptions of expected forward interest rates and estimated debt prepayments.
No amounts were transferred between Levels 1 and 2 during the period.
15 | POST-EMPLOYMENT BENEFIT OBLIGATIONS |
The net liability recognized as at September 28, 2013 in respect of post-employment benefits was as follows:
Pensions $ million |
Other post- employment benefits $ million |
Total $ million |
||||||||||
Present value of the benefit obligation |
(1,091.3 | ) | (103.0 | ) | (1,194.3 | ) | ||||||
Fair value of plan assets |
1,066.4 | | 1,066.4 | |||||||||
|
|
|
|
|
|
|||||||
(24.9 | ) | (103.0 | ) | (127.9 | ) | |||||||
Effect of the asset ceiling |
(38.3 | ) | | (38.3 | ) | |||||||
|
|
|
|
|
|
|||||||
Net liability |
(63.2 | ) | (103.0 | ) | (166.2 | ) | ||||||
|
|
|
|
|
|
The net liability is presented in the Groups balance sheet as follows:
Pensions $ million |
Other post- employment benefits $ million |
Total $ million |
||||||||||
Surpluses |
6.8 | | 6.8 | |||||||||
Deficits |
(70.0 | ) | (103.0 | ) | (173.0 | ) | ||||||
|
|
|
|
|
|
|||||||
Net liability |
(63.2 | ) | (103.0 | ) | (166.2 | ) | ||||||
|
|
|
|
|
|
Changes in the net liability during 9M 2013 were as follows:
Pensions $ million |
Other post- employment benefits $ million |
Total $ million |
||||||||||
Net liability as at December 31, 2012 |
(74.2 | ) | (115.3 | ) | (189.5 | ) | ||||||
|
|
|
|
|
|
|||||||
Service costs |
(3.5 | ) | (0.1 | ) | (3.6 | ) | ||||||
Net interest |
(1.6 | ) | (3.1 | ) | (4.7 | ) | ||||||
Net actuarial gain |
6.1 | 8.4 | 14.5 | |||||||||
Contributions |
16.2 | 6.0 | 22.2 | |||||||||
Foreign currency translation |
2.0 | 1.1 | 3.1 | |||||||||
|
|
|
|
|
|
|||||||
(55.0 | ) | (103.0 | ) | (158.0 | ) | |||||||
|
|
|
|
|
|
|||||||
Effect of the asset ceiling |
(8.2 | ) | | (8.2 | ) | |||||||
|
|
|
|
|
|
|||||||
Net liability as at September 28, 2013 |
(63.2 | ) | (103.0 | ) | (166.2 | ) | ||||||
|
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|
|
|
|
PAGE | 26
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
15 | POST-EMPLOYMENT BENEFIT OBLIGATIONS (CONTINUED) |
The weighted average discount rates used in determining the net liability were as follows:
As at September 28, 2013 |
As at December 31, 2012 |
|||||||
Pensions: |
||||||||
US |
4.625 | % | 3.750 | % | ||||
UK |
4.375 | % | 4.375 | % | ||||
Other countries |
3.696 | % | 3.366 | % | ||||
|
|
|
|
|||||
Other benefits |
4.551 | % | 3.750 | % | ||||
|
|
|
|
16 | PROVISIONS |
$ million | ||||
As at December 31, 2012 |
78.0 | |||
Charge for the period |
30.2 | |||
Utilized during the period |
(24.6 | ) | ||
Released during the period |
(10.7 | ) | ||
Foreign currency translation |
(0.1 | ) | ||
|
|
|||
As at September 28, 2013 |
72.8 | |||
|
|
Provisions are presented in the Groups balance sheet as follows:
As at September 28, 2013 $ million |
As at December 31, 2012 $ million |
|||||||
Current liabilities |
47.4 | 52.0 | ||||||
Non-current liabilities |
25.4 | 26.0 | ||||||
|
|
|
|
|||||
72.8 | 78.0 | |||||||
|
|
|
|
17 | CONTINGENCIES |
The Group is, from time to time, party to legal proceedings and claims, which arise in the ordinary course of business, including, in Brazil, ongoing litigation with the State of Sao Paulo Tax Department in respect of tax paid, totaling approximately $26 million (including penalties and interest). Although the affected Group business has been sold as part of the Schrader disposal, under the terms of the sale agreement the Group has provided an indemnity in respect of this litigation. Based on the success of work to date, and legal advice received, management is of the opinion that the Group is able to rigorously defend its position against virtually all of this particular claim, plus the associated penalty and interest.
The Group is also, from time to time, party to legal proceedings and claims in respect of environmental obligations, product liability, intellectual property and other matters which arise in the ordinary course of business and against which management believes the Group has meritorious defenses available. While it is not possible to quantify the financial impact or predict the outcome of all pending claims and litigation, management does not anticipate that the outcome of any other current proceedings or known claims, either individually or in aggregate, will have a material adverse effect upon the Groups financial position, results of operations or cash flows.
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
The Senior Secured Credit Facilities and the Second Lien Notes were issued by Tomkins, Inc. and Tomkins, LLC (the Issuers), which are both wholly-owned subsidiaries of the Company, and are jointly and severally, irrevocably and fully and unconditionally guaranteed by the Company and certain other of the Companys wholly-owned subsidiaries (the Guarantors).
Supplemental condensed consolidating financial information is presented below comprising the Groups income statements, statements of comprehensive income and cash flow statements for Q3 2013, Q3 2012, 9M 2013 and 9M 2012 and its balance sheets as at September 28, 2013 and December 31, 2012, showing the amounts attributable to the Company, the Issuers and those of its other subsidiaries that were Guarantors as at September 28, 2013 separately from the amounts attributable to those of its subsidiaries that were not Guarantors. The condensed consolidating financial information is prepared in accordance with the Groups accounting policies, except that investments in subsidiaries are accounted for by their parent company under the equity method of accounting. Under the equity method of accounting, the parent companys income statement includes on one line its share of the profit or loss of its subsidiary undertakings and the parent companys balance sheet includes on one line its share of the net assets of its subsidiary undertakings.
PAGE | 27
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
A) | CONSOLIDATED INCOME STATEMENT |
Q3 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Continuing operations |
||||||||||||||||||||||||
Sales |
| | 471.6 | 469.6 | (186.8 | ) | 754.4 | |||||||||||||||||
Cost of sales |
| | (314.4 | ) | (336.3 | ) | 186.7 | (464.0 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
| | 157.2 | 133.3 | (0.1 | ) | 290.4 | |||||||||||||||||
Distribution costs |
| | (57.5 | ) | (33.5 | ) | | (91.0 | ) | |||||||||||||||
Administrative expenses |
(0.4 | ) | (0.2 | ) | (68.9 | ) | (43.7 | ) | | (113.2 | ) | |||||||||||||
Impairments |
| | (1.9 | ) | | | (1.9 | ) | ||||||||||||||||
Restructuring costs |
| | (8.2 | ) | (0.4 | ) | | (8.6 | ) | |||||||||||||||
Net gain on disposals and on the exit of businesses |
| | 0.3 | 0.1 | | 0.4 | ||||||||||||||||||
Share of loss of associates |
| | | (0.2 | ) | | (0.2 | ) | ||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss)/profit |
(0.4 | ) | (0.2 | ) | 21.0 | 55.6 | (0.1 | ) | 75.9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
(14.4 | ) | (32.6 | ) | (31.4 | ) | (1.9 | ) | 46.5 | (33.8 | ) | |||||||||||||
Investment income |
0.1 | 26.4 | 17.2 | 3.2 | (46.5 | ) | 0.4 | |||||||||||||||||
Other finance (expense)/income |
| (3.5 | ) | 2.9 | (0.8 | ) | 0.3 | (1.1 | ) | |||||||||||||||
Net finance (costs)/income |
(14.3 | ) | (9.7 | ) | (11.3 | ) | 0.5 | 0.3 | (34.5 | ) | ||||||||||||||
Share of profits of subsidiaries under the equity method |
40.7 | | 24.9 | | (65.6 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) before tax |
26.0 | (9.9 | ) | 34.6 | 56.1 | (65.4 | ) | 41.4 | ||||||||||||||||
Income tax (expense)/benefit |
| (3.3 | ) | 7.6 | (10.7 | ) | | (6.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period from continuing operations |
26.0 | (13.2 | ) | 42.2 | 45.4 | (65.4 | ) | 35.0 | ||||||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Loss for the period from discontinued operations |
| | (1.5 | ) | | | (1.5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period |
26.0 | (13.2 | ) | 40.7 | 45.4 | (65.4 | ) | 33.5 | ||||||||||||||||
Non-controlling interests |
| | | (7.5 | ) | | (7.5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period attributable to equity shareholders |
26.0 | (13.2 | ) | 40.7 | 37.9 | (65.4 | ) | 26.0 | ||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
PAGE | 28
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
B) | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
Q3 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Profit/(loss) for the period |
26.0 | (13.2 | ) | 40.7 | 45.4 | (65.4 | ) | 33.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
||||||||||||||||||||||||
Foreign currency translation: |
||||||||||||||||||||||||
Currency translation differences on foreign operations: |
||||||||||||||||||||||||
Subsidiaries |
| | (32.1 | ) | 66.4 | | 34.3 | |||||||||||||||||
Associates |
| | | 0.2 | | 0.2 | ||||||||||||||||||
Gain on net investment hedges |
| | 0.1 | 0.5 | (0.5 | ) | 0.1 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (32.0 | ) | 67.1 | (0.5 | ) | 34.6 | |||||||||||||||||
Available-for-sale investments: |
||||||||||||||||||||||||
Unrealized gain recognized in the period |
| | 0.1 | 0.1 | | 0.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | 0.1 | 0.1 | | 0.2 | |||||||||||||||||||
Post-employment benefits: |
||||||||||||||||||||||||
Net actuarial loss |
| | (4.4 | ) | (2.3 | ) | | (6.7 | ) | |||||||||||||||
Effect of the asset ceiling |
| | (1.0 | ) | | | (1.0 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (5.4 | ) | (2.3 | ) | | (7.7 | ) | ||||||||||||||||
Share of other comprehensive gain of subsidiaries under the equity method |
25.7 | | 61.8 | | (87.5 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income before tax |
25.7 | | 24.5 | 64.9 | (88.0 | ) | 27.1 | |||||||||||||||||
Income tax benefit |
| | 1.2 | 0.5 | | 1.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
25.7 | | 25.7 | 65.4 | (88.0 | ) | 28.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income/(loss) for the period |
51.7 | (13.2 | ) | 66.4 | 110.8 | (153.4 | ) | 62.3 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to: |
||||||||||||||||||||||||
Equity shareholders in Pinafore Holdings B.V. |
||||||||||||||||||||||||
Arising from continuing operations |
53.2 | (13.2 | ) | 67.9 | 100.2 | (154.9 | ) | 53.2 | ||||||||||||||||
Arising from discontinued operations |
(1.5 | ) | | (1.5 | ) | | 1.5 | (1.5 | ) | |||||||||||||||
51.7 | (13.2 | ) | 66.4 | 100.2 | (153.4 | ) | 51.7 | |||||||||||||||||
Non-controlling interests |
| | | 10.6 | | 10.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
51.7 | (13.2 | ) | 66.4 | 110.8 | (153.4 | ) | 62.3 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 29
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
C) | CONSOLIDATED INCOME STATEMENT |
Q3 2012*
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Continuing operations |
||||||||||||||||||||||||
Sales |
| | 444.4 | 465.5 | (166.2 | ) | 743.7 | |||||||||||||||||
Cost of sales |
| | (302.1 | ) | (341.0 | ) | 166.2 | (476.9 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
| | 142.3 | 124.5 | | 266.8 | ||||||||||||||||||
Distribution costs |
| | (54.3 | ) | (35.5 | ) | | (89.8 | ) | |||||||||||||||
Administrative expenses |
(0.4 | ) | (0.2 | ) | (86.2 | ) | (46.4 | ) | | (133.2 | ) | |||||||||||||
Restructuring costs |
| | (4.4 | ) | (0.5 | ) | | (4.9 | ) | |||||||||||||||
Net gain/(loss) on disposals and on the exit of businesses |
| | 0.7 | (0.1 | ) | | 0.6 | |||||||||||||||||
Share of profit of associates |
| | | 0.1 | | 0.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss)/profit |
(0.4 | ) | (0.2 | ) | (1.9 | ) | 42.1 | | 39.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
| (45.8 | ) | (43.2 | ) | | 44.5 | (44.5 | ) | |||||||||||||||
Investment income |
| 35.5 | 6.1 | 3.4 | (44.5 | ) | 0.5 | |||||||||||||||||
Other finance (expense)/income |
| (70.0 | ) | 3.0 | (0.9 | ) | | (67.9 | ) | |||||||||||||||
Net finance (costs)/income |
| (80.3 | ) | (34.1 | ) | 2.5 | | (111.9 | ) | |||||||||||||||
Share of profits/(losses) of subsidiaries under the equity method |
3.2 | | (69.7 | ) | | 66.5 | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) before tax |
2.8 | (80.5 | ) | (105.7 | ) | 44.6 | 66.5 | (72.3 | ) | |||||||||||||||
Income tax (expense)/benefit |
| (22.4 | ) | 94.9 | (6.8 | ) | | 65.7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/loss for the period from continuing operations |
2.8 | (102.9 | ) | (10.8 | ) | 37.8 | 66.5 | (6.6 | ) | |||||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Profit for the period from discontinued operations |
| | 14.0 | 2.0 | | 16.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period |
2.8 | (102.9 | ) | 3.2 | 39.8 | 66.5 | 9.4 | |||||||||||||||||
Non-controlling interests |
| | | (6.6 | ) | | (6.6 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period attributable to equity shareholders |
2.8 | (102.9 | ) | 3.2 | 33.2 | 66.5 | 2.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
* | Restated and re-presented (see note 1) |
PAGE | 30
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
D) | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
Q3 2012*
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Profit/(loss) for the period |
2.8 | (102.9 | ) | 3.2 | 39.8 | 66.5 | 9.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
||||||||||||||||||||||||
Foreign currency translation: |
||||||||||||||||||||||||
Currency translation differences on foreign operations: |
||||||||||||||||||||||||
Subsidiaries |
| | (23.3 | ) | 94.0 | | 70.7 | |||||||||||||||||
Associates |
| | 0.2 | | | 0.2 | ||||||||||||||||||
Loss on net investment hedges |
| | (1.5 | ) | | | (1.5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (24.6 | ) | 94.0 | | 69.4 | ||||||||||||||||||
Available-for-sale investments: |
||||||||||||||||||||||||
Unrealized loss recognized in the period |
| | | (0.1 | ) | | (0.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | | (0.1 | ) | | (0.1 | ) | |||||||||||||||||
Post-employment benefits: |
||||||||||||||||||||||||
Net actuarial loss |
| | (26.9 | ) | (2.1 | ) | | (29.0 | ) | |||||||||||||||
Effect of the asset ceiling |
| | 9.8 | 0.2 | | 10.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (17.1 | ) | (1.9 | ) | | (19.0 | ) | ||||||||||||||||
Share of other comprehensive gain of subsidiaries under the equity method |
52.6 | | 88.5 | | (141.1 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income before tax |
52.6 | | 46.8 | 92.0 | (141.1 | ) | 50.3 | |||||||||||||||||
Income tax benefit/(expense) |
| | 5.8 | (0.3 | ) | | 5.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
52.6 | | 52.6 | 91.7 | (141.1 | ) | 55.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income/(loss) for the period |
55.4 | (102.9 | ) | 55.8 | 131.5 | (74.6 | ) | 65.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to: |
||||||||||||||||||||||||
Equity shareholders in Pinafore Holdings B.V. |
||||||||||||||||||||||||
Arising from continuing operations |
42.4 | (102.9 | ) | 42.8 | 117.7 | (57.6 | ) | 42.4 | ||||||||||||||||
Arising from discontinued operations |
13.0 | | 13.0 | 4.0 | (17.0 | ) | 13.0 | |||||||||||||||||
55.4 | (102.9 | ) | 55.8 | 121.7 | (74.6 | ) | 55.4 | |||||||||||||||||
Non-controlling interests |
| | | 9.8 | | 9.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
55.4 | (102.9 | ) | 55.8 | 131.5 | (74.6 | ) | 65.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
* | Restated (see note 1) |
PAGE | 31
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
E) | CONSOLIDATED INCOME STATEMENT |
9M 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Continuing operations |
||||||||||||||||||||||||
Sales |
| | 1,445.0 | 1,447.7 | (564.9 | ) | 2,327.8 | |||||||||||||||||
Cost of sales |
| | (972.5 | ) | (1,038.8 | ) | 564.4 | (1,446.9 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
| | 472.5 | 408.9 | (0.5 | ) | 880.9 | |||||||||||||||||
Distribution costs |
| | (172.0 | ) | (102.6 | ) | | (274.6 | ) | |||||||||||||||
Administrative expenses |
(1.2 | ) | (1.0 | ) | (222.9 | ) | (133.2 | ) | | (358.3 | ) | |||||||||||||
Impairments |
| | (2.4 | ) | | | (2.4 | ) | ||||||||||||||||
Restructuring costs |
| | (16.1 | ) | (2.4 | ) | | (18.5 | ) | |||||||||||||||
Net gain/(loss) on disposals and on the exit of businesses |
| | 0.5 | (0.8 | ) | | (0.3 | ) | ||||||||||||||||
Share of loss of associates |
| | | (0.1 | ) | | (0.1 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss)/profit |
(1.2 | ) | (1.0 | ) | 59.6 | 169.8 | (0.5 | ) | 226.7 | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
(42.2 | ) | (98.5 | ) | (94.9 | ) | (7.5 | ) | 141.4 | (101.7 | ) | |||||||||||||
Investment income |
0.2 | 80.9 | 52.8 | 8.9 | (141.4 | ) | 1.4 | |||||||||||||||||
Other finance income/(expense) |
| 4.8 | (1.6 | ) | (2.4 | ) | 0.5 | 1.3 | ||||||||||||||||
Net finance costs |
(42.0 | ) | (12.8 | ) | (43.7 | ) | (1.0 | ) | 0.5 | (99.0 | ) | |||||||||||||
Share of profits of subsidiaries under the equity method |
127.8 | | 95.3 | | (223.1 | ) | | |||||||||||||||||
|
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|
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|
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|
|||||||||||||
Profit/(loss) before tax |
84.6 | (13.8 | ) | 111.2 | 168.8 | (223.1 | ) | 127.7 | ||||||||||||||||
Income tax (expense)/benefit |
| (3.3 | ) | 11.1 | (36.1 | ) | | (28.3 | ) | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period from continuing operations |
84.6 | (17.1 | ) | 122.3 | 132.7 | (223.1 | ) | 99.4 | ||||||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Profit for the period from discontinued operations |
| | 5.5 | | | 5.5 | ||||||||||||||||||
|
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|
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|
|||||||||||||
Profit/(loss) for the period |
84.6 | (17.1 | ) | 127.8 | 132.7 | (223.1 | ) | 104.9 | ||||||||||||||||
Non-controlling interests |
| | | (20.3 | ) | | (20.3 | ) | ||||||||||||||||
|
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|
|||||||||||||
Profit/(loss) for the period attributable to equity shareholders |
84.6 | (17.1 | ) | 127.8 | 112.4 | (223.1 | ) | 84.6 | ||||||||||||||||
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PAGE | 32
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
F) | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
9M 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Profit/(loss) for the period |
84.6 | (17.1 | ) | 127.8 | 132.7 | (223.1 | ) | 104.9 | ||||||||||||||||
|
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|
|||||||||||||
Other comprehensive loss |
||||||||||||||||||||||||
Foreign currency translation: |
||||||||||||||||||||||||
Currency translation differences on foreign operations: |
||||||||||||||||||||||||
Subsidiaries |
| | (3.4 | ) | (30.9 | ) | | (34.3 | ) | |||||||||||||||
Gain on net investment hedges |
| | 0.2 | 0.5 | (0.5 | ) | 0.2 | |||||||||||||||||
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|
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|
|||||||||||||
| | (3.2 | ) | (30.4 | ) | (0.5 | ) | (34.1 | ) | |||||||||||||||
Available-for-sale investments: |
||||||||||||||||||||||||
Unrealized gain recognized in the period |
| | 0.2 | 0.9 | | 1.1 | ||||||||||||||||||
|
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|
|||||||||||||
| | 0.2 | 0.9 | | 1.1 | |||||||||||||||||||
Post-employment benefits: |
||||||||||||||||||||||||
Net actuarial gain |
| | 10.1 | 4.4 | | 14.5 | ||||||||||||||||||
Effect of the asset ceiling |
| | (8.2 | ) | | | (8.2 | ) | ||||||||||||||||
|
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|
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|
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|
|||||||||||||
| | 1.9 | 4.4 | | 6.3 | |||||||||||||||||||
Share of other comprehensive loss of subsidiaries under the equity method |
(25.6 | ) | | (22.3 | ) | | 47.9 | | ||||||||||||||||
|
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|||||||||||||
Other comprehensive loss before tax |
(25.6 | ) | | (23.4 | ) | (25.1 | ) | 47.4 | (26.7 | ) | ||||||||||||||
Income tax expense |
| | (2.2 | ) | (1.5 | ) | | (3.7 | ) | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive loss |
(25.6 | ) | | (25.6 | ) | (26.6 | ) | 47.4 | (30.4 | ) | ||||||||||||||
|
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|
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|
|
|
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|
|||||||||||||
Comprehensive income/(loss) for the period |
59.0 | (17.1 | ) | 102.2 | 106.1 | (175.7 | ) | 74.5 | ||||||||||||||||
|
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|
|||||||||||||
Attributable to: |
||||||||||||||||||||||||
Equity shareholders in Pinafore Holdings B.V. |
||||||||||||||||||||||||
Arising from continuing operations |
53.5 | (17.1 | ) | 96.7 | 90.6 | (170.2 | ) | 53.5 | ||||||||||||||||
Arising from discontinued operations |
5.5 | | 5.5 | | (5.5 | ) | 5.5 | |||||||||||||||||
59.0 | (17.1 | ) | 102.2 | 90.6 | (175.7 | ) | 59.0 | |||||||||||||||||
Non-controlling interests |
| | | 15.5 | | 15.5 | ||||||||||||||||||
|
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|
|||||||||||||
59.0 | (17.1 | ) | 102.2 | 106.1 | (175.7 | ) | 74.5 | |||||||||||||||||
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|
PAGE | 33
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
G) | CONSOLIDATED INCOME STATEMENT |
9M 2012*
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Continuing operations |
||||||||||||||||||||||||
Sales |
| | 1,385.8 | 1,476.6 | (530.8 | ) | 2,331.6 | |||||||||||||||||
Cost of sales |
| | (944.7 | ) | (1,071.6 | ) | 530.8 | (1,485.5 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
| | 441.1 | 405.0 | | 846.1 | ||||||||||||||||||
Distribution costs |
| | (162.1 | ) | (110.0 | ) | | (272.1 | ) | |||||||||||||||
Administrative expenses |
(1.0 | ) | (1.4 | ) | (248.7 | ) | (141.3 | ) | | (392.4 | ) | |||||||||||||
Impairments |
| | (2.9 | ) | (0.2 | ) | | (3.1 | ) | |||||||||||||||
Restructuring costs |
| | (17.3 | ) | (0.2 | ) | | (17.5 | ) | |||||||||||||||
Net gain on disposals and on the exit of businesses |
| | 0.1 | | | 0.1 | ||||||||||||||||||
Share of profit of associates |
| | | 0.4 | | 0.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss)/profit |
(1.0 | ) | (1.4 | ) | 10.2 | 153.7 | | 161.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
| (159.1 | ) | (147.4 | ) | (11.2 | ) | 157.9 | (159.8 | ) | ||||||||||||||
Investment income |
0.1 | 132.5 | 16.2 | 10.8 | (157.9 | ) | 1.7 | |||||||||||||||||
Other finance expense |
| (75.2 | ) | (0.7 | ) | (2.4 | ) | | (78.3 | ) | ||||||||||||||
Net finance income/(costs) |
0.1 | (101.8 | ) | (131.9 | ) | (2.8 | ) | | (236.4 | ) | ||||||||||||||
Share of profits/(loss) of subsidiaries under the equity method |
194.9 | | (3.2 | ) | | (191.7 | ) | | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) before tax |
194.0 | (103.2 | ) | (124.9 | ) | 150.9 | (191.7 | ) | (74.9 | ) | ||||||||||||||
Income tax (expense)/benefit |
| (23.6 | ) | 151.9 | (21.1 | ) | | 107.2 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period from continuing operations |
194.0 | (126.8 | ) | 27.0 | 129.8 | (191.7 | ) | 32.3 | ||||||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Profit for the period from discontinued operations |
| | 167.9 | 11.3 | | 179.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period |
194.0 | (126.8 | ) | 194.9 | 141.1 | (191.7 | ) | 211.5 | ||||||||||||||||
Non-controlling interests |
| | | (17.5 | ) | | (17.5 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Profit/(loss) for the period attributable to equity shareholders |
194.0 | (126.8 | ) | 194.9 | 123.6 | (191.7 | ) | 194.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
* | Restated and re-presented (see note 1) |
PAGE | 34
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
H) | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
9M 2012*
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Profit/(loss) for the period |
194.0 | (126.8 | ) | 194.9 | 141.1 | (191.7 | ) | 211.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
||||||||||||||||||||||||
Foreign currency translation: |
||||||||||||||||||||||||
Currency translation differences on foreign operations: |
||||||||||||||||||||||||
Subsidiaries |
| | (13.6 | ) | 74.2 | | 60.6 | |||||||||||||||||
Associates |
| | 0.1 | | | 0.1 | ||||||||||||||||||
Loss on net investment hedges |
| | (1.1 | ) | | | (1.1 | ) | ||||||||||||||||
Reclassification to profit or loss of currency translation gain on foreign operations sold |
| | (5.0 | ) | (0.4 | ) | | (5.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (19.6 | ) | 73.8 | | 54.2 | ||||||||||||||||||
Post-employment benefits: |
||||||||||||||||||||||||
Net actuarial loss |
| | (63.8 | ) | (4.0 | ) | | (67.8 | ) | |||||||||||||||
Effect of the asset ceiling |
| | 29.3 | 0.5 | | 29.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | (34.5 | ) | (3.5 | ) | | (38.0 | ) | ||||||||||||||||
Share of other comprehensive gain of subsidiaries under the equity method |
27.8 | | 69.8 | | (97.6 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income before tax |
27.8 | | 15.7 | 70.3 | (97.6 | ) | 16.2 | |||||||||||||||||
Income tax benefit |
| | 12.1 | 0.9 | | 13.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income |
27.8 | | 27.8 | 71.2 | (97.6 | ) | 29.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income/(loss) for the period |
221.8 | (126.8 | ) | 222.7 | 212.3 | (289.3 | ) | 240.7 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Attributable to: |
||||||||||||||||||||||||
Equity shareholders in Pinafore Holdings B.V. |
||||||||||||||||||||||||
Arising from continuing operations |
41.3 | (126.8 | ) | 42.2 | 186.2 | (101.6 | ) | 41.3 | ||||||||||||||||
Arising from discontinued operations |
180.5 | | 180.5 | 7.2 | (187.7 | ) | 180.5 | |||||||||||||||||
221.8 | (126.8 | ) | 222.7 | 193.4 | (289.3 | ) | 221.8 | |||||||||||||||||
Non-controlling interests |
| | | 18.9 | | 18.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
221.8 | (126.8 | ) | 222.7 | 212.3 | (289.3 | ) | 240.7 | |||||||||||||||||
|
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|
|
|
|
|
* | Restated (see note 1) |
PAGE | 35
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
I) | CONSOLIDATED CASH FLOW STATEMENT |
Q3 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Cash (absorbed by)/generated from operations |
(0.1 | ) | (0.2 | ) | 53.0 | 62.2 | | 114.9 | ||||||||||||||||
Income taxes paid |
| | (8.3 | ) | (12.3 | ) | 0.1 | (20.5 | ) | |||||||||||||||
Income taxes received |
| | 0.1 | | (0.1 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (outflow)/inflow from operating activities |
(0.1 | ) | (0.2 | ) | 44.8 | 49.9 | | 94.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investing activities |
||||||||||||||||||||||||
Purchase of property, plant and equipment |
| | (9.5 | ) | (11.4 | ) | | (20.9 | ) | |||||||||||||||
Purchase of computer software |
| | (1.3 | ) | (0.3 | ) | | (1.6 | ) | |||||||||||||||
Disposal of property, plant and equipment |
| | 1.6 | 0.1 | | 1.7 | ||||||||||||||||||
Sale of businesses and subsidiaries, net of cash disposed |
| | 1.6 | | (2.6 | ) | (1.0 | ) | ||||||||||||||||
Interest received |
0.1 | 27.8 | 15.8 | 3.2 | (46.5 | ) | 0.4 | |||||||||||||||||
Dividends received from subsidiaries |
| | 11.7 | | (11.7 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) from investing activities |
0.1 | 27.8 | 19.9 | (8.4 | ) | (60.8 | ) | (21.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financing activities |
||||||||||||||||||||||||
Buy-back of shares |
| | | (2.6 | ) | 2.6 | | |||||||||||||||||
Repayment of bank and other loans |
| (115.0 | ) | | | | (115.0 | ) | ||||||||||||||||
Premiums on redemption of borrowings |
| (3.5 | ) | | | | (3.5 | ) | ||||||||||||||||
Receipts on foreign currency derivatives |
| | 2.0 | | | 2.0 | ||||||||||||||||||
Capital element of finance lease rental payments |
| | (0.1 | ) | | | (0.1 | ) | ||||||||||||||||
Increase in collateralized cash |
| | (0.5 | ) | (0.1 | ) | | (0.6 | ) | |||||||||||||||
Net transactions in Company shares |
(1.2 | ) | | (0.4 | ) | (0.1 | ) | | (1.7 | ) | ||||||||||||||
Loans (to)/from Group companies |
15.6 | 11.2 | (0.9 | ) | (25.9 | ) | | | ||||||||||||||||
Interest paid |
(14.4 | ) | (5.5 | ) | (32.2 | ) | (1.5 | ) | 46.5 | (7.1 | ) | |||||||||||||
Redemption of subsidiary preference shares held by minority shareholders |
| | | (2.5 | ) | | (2.5 | ) | ||||||||||||||||
Equity dividend paid |
| | | (11.7 | ) | 11.7 | | |||||||||||||||||
Dividend paid to a minority shareholder in a subsidiary |
| | | (11.4 | ) | | (11.4 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash outflow from financing activities |
| (112.8 | ) | (32.1 | ) | (55.8 | ) | 60.8 | (139.9 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Decrease)/increase in net cash and cash equivalents |
| (85.2 | ) | 32.6 | (14.3 | ) | | (66.9 | ) | |||||||||||||||
Net cash and cash equivalents at the beginning of the period |
| 119.5 | 67.2 | 191.0 | | 377.7 | ||||||||||||||||||
Foreign currency translation |
| | (10.7 | ) | 17.4 | | 6.7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash and cash equivalents at the end of the period |
| 34.3 | 89.1 | 194.1 | | 317.5 | ||||||||||||||||||
|
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|
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|
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|
|
|
|
|
PAGE | 36
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
J) | CONSOLIDATED CASH FLOW STATEMENT |
Q3 2012
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Cash (absorbed by)/generated from operations |
| (0.1 | ) | 74.0 | 87.3 | | 161.2 | |||||||||||||||||
Income taxes paid |
| | (6.3 | ) | (14.6 | ) | 2.5 | (18.4 | ) | |||||||||||||||
Income taxes received |
| | | 2.5 | (2.5 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (outflow)/inflow from operating activities |
| (0.1 | ) | 67.7 | 75.2 | | 142.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investing activities |
||||||||||||||||||||||||
Purchase of property, plant and equipment |
| | (14.4 | ) | (19.1 | ) | 3.2 | (30.3 | ) | |||||||||||||||
Purchase of computer software |
| | (1.7 | ) | | | (1.7 | ) | ||||||||||||||||
Disposal of property, plant and equipment |
| | 5.7 | 0.1 | (3.2 | ) | 2.6 | |||||||||||||||||
Purchase of interests in subsidiaries, net of cash acquired |
| | (16.3 | ) | (0.2 | ) | 15.6 | (0.9 | ) | |||||||||||||||
Sale of businesses and subsidiaries, net of cash disposed |
| | (4.9 | ) | (0.1 | ) | (0.3 | ) | (5.3 | ) | ||||||||||||||
Interest received |
0.1 | 37.0 | 4.5 | 3.3 | (44.4 | ) | 0.5 | |||||||||||||||||
Dividends received from subsidiaries |
| | 20.2 | | (20.2 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) from investing activities |
0.1 | 37.0 | (6.9 | ) | (16.0 | ) | (49.3 | ) | (35.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financing activities |
||||||||||||||||||||||||
Issue of shares |
0.4 | | | 15.2 | (15.6 | ) | | |||||||||||||||||
Repayment of bank and other loans |
| (599.0 | ) | (2.1 | ) | | | (601.1 | ) | |||||||||||||||
Premiums on redemption of borrowings |
| (62.6 | ) | | | | (62.6 | ) | ||||||||||||||||
Loans (to)/from Group companies |
(0.5 | ) | 452.1 | (380.4 | ) | (71.2 | ) | | | |||||||||||||||
Receipts on foreign currency derivatives |
| | 2.3 | | | 2.3 | ||||||||||||||||||
Capital element of finance lease rental payments |
| | (0.2 | ) | | | (0.2 | ) | ||||||||||||||||
Interest element of finance lease rental payments |
| | (0.2 | ) | | | (0.2 | ) | ||||||||||||||||
Decrease in collateralized cash |
| | 2.2 | 0.6 | | 2.8 | ||||||||||||||||||
Net transactions in Company shares |
| | (0.6 | ) | 0.1 | 0.3 | (0.2 | ) | ||||||||||||||||
Interest paid |
| (36.8 | ) | (41.5 | ) | (3.1 | ) | 44.4 | (37.0 | ) | ||||||||||||||
Financing costs paid |
| (5.8 | ) | | | | (5.8 | ) | ||||||||||||||||
Equity dividend paid |
| | | (20.2 | ) | 20.2 | | |||||||||||||||||
Dividend paid to a minority shareholder in a subsidiary |
| | | (12.4 | ) | | (12.4 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash outflow from financing activities |
(0.1 | ) | (252.1 | ) | (420.5 | ) | (91.0 | ) | 49.3 | (714.4 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Decrease in net cash and cash equivalents |
| (215.2 | ) | (359.7 | ) | (31.8 | ) | | (606.7 | ) | ||||||||||||||
Net cash and cash equivalents at the beginning of the period |
| 238.2 | 416.1 | 161.1 | | 815.4 | ||||||||||||||||||
Foreign currency translation |
| | (11.1 | ) | 14.3 | | 3.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash and cash equivalents at the end of the period |
| 23.0 | 45.3 | 143.6 | | 211.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 37
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
K) | CONSOLIDATED CASH FLOW STATEMENT |
9M 2013
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Cash (absorbed by)/generated from operations |
(1.5 | ) | (1.0 | ) | 38.7 | 178.0 | | 214.2 | ||||||||||||||||
Income taxes paid |
| | (25.7 | ) | (46.2 | ) | 1.7 | (70.2 | ) | |||||||||||||||
Income taxes received |
| | 10.9 | 0.1 | (1.7 | ) | 9.3 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (outflow)/inflow from operating activities |
(1.5 | ) | (1.0 | ) | 23.9 | 131.9 | | 153.3 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investing activities |
||||||||||||||||||||||||
Purchase of property, plant and equipment |
| | (23.0 | ) | (29.9 | ) | | (52.9 | ) | |||||||||||||||
Purchase of computer software |
| | (4.5 | ) | (0.4 | ) | | (4.9 | ) | |||||||||||||||
Disposal of property, plant and equipment |
| | 4.0 | 0.6 | | 4.6 | ||||||||||||||||||
Purchase of interests in subsidiaries, net of cash acquired |
| | (7.5 | ) | | 7.2 | (0.3 | ) | ||||||||||||||||
Sale of businesses and subsidiaries, net of cash disposed |
| | 6.2 | (1.1 | ) | (2.6 | ) | 2.5 | ||||||||||||||||
Interest received |
0.2 | 85.0 | 49.1 | 8.9 | (141.8 | ) | 1.4 | |||||||||||||||||
Dividends received from associates |
| | | 0.1 | | 0.1 | ||||||||||||||||||
Dividends received from subsidiaries |
| | 28.5 | | (28.5 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) from investing activities |
0.2 | 85.0 | 52.8 | (21.8 | ) | (165.7 | ) | (49.5 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financing activities |
||||||||||||||||||||||||
Issue of shares |
| | | 4.6 | (4.6 | ) | | |||||||||||||||||
Repayment of bank and other loans |
| (130.1 | ) | (2.5 | ) | | | (132.6 | ) | |||||||||||||||
Premiums on redemption of borrowings |
| (3.5 | ) | | | | (3.5 | ) | ||||||||||||||||
Payments on foreign currency derivatives |
| | (0.1 | ) | | | (0.1 | ) | ||||||||||||||||
Capital element of finance lease rental payments |
| | (0.2 | ) | | | (0.2 | ) | ||||||||||||||||
Decrease in collateralized cash |
| | 1.6 | | | 1.6 | ||||||||||||||||||
Net transactions in Company shares |
0.2 | | (1.8 | ) | (0.1 | ) | | (1.7 | ) | |||||||||||||||
Loans from/(to) Group companies |
43.3 | (66.0 | ) | 41.4 | (18.7 | ) | | | ||||||||||||||||
Interest paid |
(42.2 | ) | (53.9 | ) | (95.7 | ) | (6.4 | ) | 141.8 | (56.4 | ) | |||||||||||||
Financing costs paid |
| (2.0 | ) | | | | (2.0 | ) | ||||||||||||||||
Redemption of subsidiary preference shares held by minority shareholders |
| | | (2.5 | ) | | (2.5 | ) | ||||||||||||||||
Equity dividend paid |
| | | (28.5 | ) | 28.5 | | |||||||||||||||||
Investment by a minority shareholder in a subsidiary |
| | | 2.7 | | 2.7 | ||||||||||||||||||
Dividend paid to a minority shareholder in a subsidiary |
| | | (17.3 | ) | | (17.3 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) from financing activities |
1.3 | (255.5 | ) | (57.3 | ) | (66.2 | ) | 165.7 | (212.0 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Decrease)/increase in net cash and cash equivalents |
| (171.5 | ) | 19.4 | 43.9 | | (108.2 | ) | ||||||||||||||||
Net cash and cash equivalents at the beginning of the period |
| 205.8 | 66.6 | 156.0 | | 428.4 | ||||||||||||||||||
Foreign currency translation |
| | 3.1 | (5.8 | ) | | (2.7 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash and cash equivalents at the end of the period |
| 34.3 | 89.1 | 194.1 | | 317.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 38
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
L) | CONSOLIDATED CASH FLOW STATEMENT |
9M 2012
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Operating activities |
||||||||||||||||||||||||
Cash (absorbed by)/generated from operations |
(0.8 | ) | (1.3 | ) | 171.0 | 213.3 | | 382.2 | ||||||||||||||||
Income taxes paid |
| | (28.0 | ) | (41.3 | ) | 5.1 | (64.2 | ) | |||||||||||||||
Income taxes received |
| 0.8 | 3.7 | 4.6 | (5.1 | ) | 4.0 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash (outflow)/inflow from operating activities |
(0.8 | ) | (0.5 | ) | 146.7 | 176.6 | | 322.0 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investing activities |
||||||||||||||||||||||||
Purchase of property, plant and equipment |
| | (43.0 | ) | (37.4 | ) | 6.0 | (74.4 | ) | |||||||||||||||
Purchase of computer software |
| | (4.2 | ) | (0.5 | ) | | (4.7 | ) | |||||||||||||||
Capitalization of development costs |
| | (0.5 | ) | | | (0.5 | ) | ||||||||||||||||
Disposal of property, plant and equipment |
| | 8.0 | 3.5 | (6.0 | ) | 5.5 | |||||||||||||||||
Purchase of available-for-sale investments |
| | (0.4 | ) | | | (0.4 | ) | ||||||||||||||||
Sale of investments in associates |
| | 2.5 | | | 2.5 | ||||||||||||||||||
Purchase of interests in subsidiaries, net of cash acquired |
| | (67.0 | ) | (0.4 | ) | 65.4 | (2.0 | ) | |||||||||||||||
Sale of businesses and subsidiaries, net of cash disposed |
| | 496.4 | 48.8 | (55.5 | ) | 489.7 | |||||||||||||||||
Interest received |
0.2 | 137.0 | 12.4 | 10.2 | (158.2 | ) | 1.6 | |||||||||||||||||
Dividends received from associates |
| | | 0.1 | | 0.1 | ||||||||||||||||||
Dividends received from subsidiaries |
| | 120.3 | | (120.3 | ) | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow from investing activities |
0.2 | 137.0 | 524.5 | 24.3 | (268.6 | ) | 417.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financing activities |
||||||||||||||||||||||||
Issue of shares |
2.6 | | | 9.8 | (12.4 | ) | | |||||||||||||||||
Draw down of bank and other loans |
| | 2.0 | 0.1 | | 2.1 | ||||||||||||||||||
Repayment of bank and other loans |
| (778.2 | ) | (7.4 | ) | | | (785.6 | ) | |||||||||||||||
Premiums on redemption of borrowings |
| (62.6 | ) | | | | (62.6 | ) | ||||||||||||||||
Loans (to)/from Group companies |
(1.8 | ) | 752.0 | (663.7 | ) | (86.5 | ) | | | |||||||||||||||
Receipts on foreign currency derivatives |
| | 0.7 | | | 0.7 | ||||||||||||||||||
Capital element of finance lease rental payments |
| | (0.3 | ) | | | (0.3 | ) | ||||||||||||||||
Interest element of finance lease rental payments |
| | (0.3 | ) | | | (0.3 | ) | ||||||||||||||||
Decrease/(increase) in collateralized cash |
| | 4.3 | (0.1 | ) | | 4.2 | |||||||||||||||||
Net transactions in Company shares |
(0.2 | ) | | (3.3 | ) | (0.1 | ) | 2.5 | (1.1 | ) | ||||||||||||||
Interest paid |
| (118.6 | ) | (149.8 | ) | (10.1 | ) | 158.2 | (120.3 | ) | ||||||||||||||
Financing costs paid |
| (5.8 | ) | | | | (5.8 | ) | ||||||||||||||||
Equity dividend paid |
| | | (120.3 | ) | 120.3 | | |||||||||||||||||
Dividend paid to a minority shareholder in a subsidiary |
| | | (33.6 | ) | | (33.6 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash inflow/(outflow) from financing activities |
0.6 | (213.2 | ) | (817.8 | ) | (240.8 | ) | 268.6 | (1,002.6 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Decrease in net cash and cash equivalents |
| (76.7 | ) | (146.6 | ) | (39.9 | ) | | (263.2 | ) | ||||||||||||||
Net cash and cash equivalents at the beginning of the period |
| 99.8 | 190.9 | 183.8 | | 474.5 | ||||||||||||||||||
Foreign currency translation |
| (0.1 | ) | 1.0 | (0.3 | ) | | 0.6 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash and cash equivalents at the end of the period |
| 23.0 | 45.3 | 143.6 | | 211.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 39
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
M) | CONSOLIDATED BALANCE SHEET |
As at September 28, 2013
Company $ million |
Issuers $ million |
Other Guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Goodwill |
| | 545.0 | 769.8 | | 1,314.8 | ||||||||||||||||||
Other intangible assets |
| | 770.5 | 582.3 | | 1,352.8 | ||||||||||||||||||
Property, plant and equipment |
| | 245.0 | 411.2 | | 656.2 | ||||||||||||||||||
Investments in subsidiaries |
2,969.9 | | 2,488.3 | | (5,458.2 | ) | | |||||||||||||||||
Investments in associates |
| | 3.4 | 2.5 | | 5.9 | ||||||||||||||||||
Trade and other receivables |
17.5 | 1,678.1 | 1,404.6 | 868.2 | (3,951.6 | ) | 16.8 | |||||||||||||||||
Deferred tax assets |
| | 1.0 | 4.3 | (0.2 | ) | 5.1 | |||||||||||||||||
Post-employment benefit surpluses |
| | 2.5 | 4.3 | | 6.8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,987.4 | 1,678.1 | 5,460.3 | 2,642.6 | (9,410.0 | ) | 3,358.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Current assets |
||||||||||||||||||||||||
Inventories |
| | 282.2 | 211.8 | (1.1 | ) | 492.9 | |||||||||||||||||
Trade and other receivables |
| 2.9 | 556.9 | 456.6 | (209.7 | ) | 806.7 | |||||||||||||||||
Income tax recoverable |
| | (5.7 | ) | 11.7 | (0.4 | ) | 5.6 | ||||||||||||||||
Available-for-sale investments |
| | 15.0 | 2.2 | | 17.2 | ||||||||||||||||||
Cash and cash equivalents |
| 39.1 | 89.8 | 194.3 | | 323.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| 42.0 | 938.2 | 876.6 | (211.2 | ) | 1,645.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Assets held for sale |
| | 6.7 | 2.7 | | 9.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total assets |
2,987.4 | 1,720.1 | 6,405.2 | 3,521.9 | (9,621.2 | ) | 5,013.4 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Current liabilities |
||||||||||||||||||||||||
Bank overdrafts |
| (4.8 | ) | (0.7 | ) | (0.2 | ) | | (5.7 | ) | ||||||||||||||
Bank and other loans |
| (23.6 | ) | (9.1 | ) | | | (32.7 | ) | |||||||||||||||
Obligations under finance leases |
| | (0.2 | ) | | | (0.2 | ) | ||||||||||||||||
Trade and other payables |
(0.9 | ) | (1.4 | ) | (319.6 | ) | (341.5 | ) | 209.7 | (453.7 | ) | |||||||||||||
Income tax liabilities |
| (3.3 | ) | (62.4 | ) | (46.1 | ) | 0.4 | (111.4 | ) | ||||||||||||||
Provisions |
| | (38.3 | ) | (9.1 | ) | | (47.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(0.9 | ) | (33.1 | ) | (430.3 | ) | (396.9 | ) | 210.1 | (651.1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Non-current liabilities |
||||||||||||||||||||||||
Bank and other loans |
| (1,662.2 | ) | (21.2 | ) | (0.8 | ) | | (1,684.2 | ) | ||||||||||||||
Obligations under finance leases |
| | (2.3 | ) | | | (2.3 | ) | ||||||||||||||||
Trade and other payables |
(1,216.5 | ) | (35.0 | ) | (2,566.9 | ) | (170.2 | ) | 3,951.7 | (36.9 | ) | |||||||||||||
Post-employment benefit obligations |
| | (103.6 | ) | (69.4 | ) | | (173.0 | ) | |||||||||||||||
Deferred tax liabilities |
| | (287.1 | ) | (135.5 | ) | 0.2 | (422.4 | ) | |||||||||||||||
Provisions |
| | (23.9 | ) | (1.5 | ) | | (25.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(1,216.5 | ) | (1,697.2 | ) | (3,005.0 | ) | (377.4 | ) | 3,951.9 | (2,344.2 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total liabilities |
(1,217.4 | ) | (1,730.3 | ) | (3,435.3 | ) | (774.3 | ) | 4,162.0 | (2,995.3 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net assets |
1,770.0 | (10.2 | ) | 2,969.9 | 2,747.6 | (5,459.2 | ) | 2,018.1 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Capital and reserves |
||||||||||||||||||||||||
Shareholders equity |
1,770.0 | (10.2 | ) | 2,969.9 | 2,499.5 | (5,459.2 | ) | 1,770.0 | ||||||||||||||||
Non-controlling interests |
| | | 248.1 | | 248.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total equity |
1,770.0 | (10.2 | ) | 2,969.9 | 2,747.6 | (5,459.2 | ) | 2,018.1 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
PAGE | 40
PINAFORE HOLDINGS B.V. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 | CONDENSED CONSOLIDATING FINANCIAL INFORMATION (CONTINUED) |
N) | CONSOLIDATED BALANCE SHEET |
As at December 31, 2012
Company $ million |
Issuers $ million |
Other guarantor subsidiaries $ million |
Non- guarantor subsidiaries $ million |
Consolidation adjustments $ million |
Total Group $ million |
|||||||||||||||||||
Non-current assets |
||||||||||||||||||||||||
Goodwill |
| | 545.4 | 780.7 | | 1,326.1 | ||||||||||||||||||
Other intangible assets |
| | 818.6 | 632.0 | | 1,450.6 | ||||||||||||||||||
Property, plant and equipment |
| | 256.9 | 436.3 | | 693.2 | ||||||||||||||||||
Investments in subsidiaries under the equity method |
2,851.7 | | 2,437.8 | | (5,289.5 | ) | | |||||||||||||||||
Investments in associates |
| | 3.4 | 2.7 | | 6.1 | ||||||||||||||||||
Trade and other receivables |
| 4.7 | 14.1 | 2.2 | | 21.0 | ||||||||||||||||||
Deferred tax assets |
| | 7.1 | 5.5 | (6.5 | ) | 6.1 | |||||||||||||||||
Post-employment benefit surpluses |
| | 0.7 | | | 0.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,851.7 | 4.7 | 4,084.0 | 1,859.4 | (5,296.0 | ) | 3,503.8 | ||||||||||||||||||
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Current assets |
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Inventories |
| | 263.8 | 213.5 | (0.5 | ) | 476.8 | |||||||||||||||||
Trade and other receivables |
17.3 | 1,642.5 | 1,803.6 | 1,266.1 | (4,099.8 | ) | 629.7 | |||||||||||||||||
Income tax recoverable |
| | 8.2 | 11.0 | (0.3 | ) | 18.9 | |||||||||||||||||
Available-for-sale investments |
| | 14.9 | 1.4 | | 16.3 | ||||||||||||||||||
Cash and cash equivalents |
| 205.8 | 69.5 | 156.0 | | 431.3 | ||||||||||||||||||
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17.3 | 1,848.3 | 2,160.0 | 1,648.0 | (4,100.6 | ) | 1,573.0 | ||||||||||||||||||
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Assets held for sale |
| | 4.9 | 1.9 | | 6.8 | ||||||||||||||||||
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Total assets |
2,869.0 | 1,853.0 | 6,248.9 | 3,509.3 | (9,396.6 | ) | 5,083.6 | |||||||||||||||||
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Current liabilities |
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Bank overdrafts |
| | (2.9 | ) | | | (2.9 | ) | ||||||||||||||||
Bank and other loans |
| (2.2 | ) | 27.4 | (39.4 | ) | | (14.2 | ) | |||||||||||||||
Obligations under finance leases |
| | (0.1 | ) | | | (0.1 | ) | ||||||||||||||||
Trade and other payables |
(1.3 | ) | (0.3 | ) | (278.0 | ) | (329.7 | ) | 180.3 | (429.0 | ) | |||||||||||||
Income tax liabilities |
| | (45.3 | ) | (46.7 | ) | 0.3 | (91.7 | ) | |||||||||||||||
Provisions |
| | (41.1 | ) | (10.9 | ) | | (52.0 | ) | |||||||||||||||
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(1.3 | ) | (2.5 | ) | (340.0 | ) | (426.7 | ) | 180.6 | (589.9 | ) | ||||||||||||||
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Non-current liabilities |
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Bank and other loans |
| (1,763.3 | ) | (21.3 | ) | (0.8 | ) | | (1,785.4 | ) | ||||||||||||||
Obligations under finance leases |
| | (2.5 | ) | | | (2.5 | ) | ||||||||||||||||
Trade and other payables |
(1,173.1 | ) | (80.5 | ) | (2,546.1 | ) | (174.7 | ) | 3,919.5 | (54.9 | ) | |||||||||||||
Post-employment benefit obligations |
| | (116.8 | ) | (73.4 | ) | | (190.2 | ) | |||||||||||||||
Deferred tax liabilities |
| | (345.6 | ) | (151.7 | ) | 6.5 | (490.8 | ) | |||||||||||||||
Provisions |
| | (24.9 | ) | (1.1 | ) | | (26.0 | ) | |||||||||||||||
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(1,173.1 | ) | (1,843.8 | ) | (3,057.2 | ) | (401.7 | ) | 3,926.0 | (2,549.8 | ) | ||||||||||||||
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Total liabilities |
(1,174.4 | ) | (1,846.3 | ) | (3,397.2 | ) | (828.4 | ) | 4,106.6 | (3,139.7 | ) | |||||||||||||
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Net assets |
1,694.6 | 6.7 | 2,851.7 | 2,680.9 | (5,290.0 | ) | 1,943.9 | |||||||||||||||||
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Capital and reserves |
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Shareholders equity |
1,694.6 | 6.7 | 2,851.7 | 2,431.6 | (5,290.0 | ) | 1,694.6 | |||||||||||||||||
Non-controlling interests |
| | | 249.3 | | 249.3 | ||||||||||||||||||
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Total equity |
1,694.6 | 6.7 | 2,851.7 | 2,680.9 | (5,290.0 | ) | 1,943.9 | |||||||||||||||||
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PAGE | 41