Solid results in face of COVID-19. Steady recovery underway.
Sibelco today announced a resilient full year financial performance for 2020 and a steady recovery from the initial impacts of the COVID-19 pandemic seen in the first half of last year. Sibelco implemented a range of measures to secure the health of its workforce and to ensure business continuity and cash preservation during the pandemic. Sibelco (excluding Covia) generated an EBITDA of EUR 245 million, a free operating cash flow of EUR 79 million and an improved return on capital employed. Sibelco introduced its Sibelco 2025 vision and strategy in February 2021. This maps out a transformational path to further improvements in operational, commercial and financial performance and a clear commitment to sustainability – particularly occupational safety and carbon emission reduction.
For Covia, the changes in the North American proppant sector, COVID-19 and the collapse in the oil price as well as the burden of the onerous contracts related to railcar leases led to the company filing for Chapter 11 protection in June. On 31 December 2020, Covia’s restructuring plan was approved by the court thereby confirming Sibelco’s exit as a shareholder, including full releases. Covia was deconsolidated from Sibelco’s financial reporting as from 30 June. A fuller explanation can be found on page 4. For this reason, most of the commentary in this financial update relates to Sibelco excluding Covia.
- Revenues excluding Covia were down by 21% to EUR 1,489 million. This decrease was due to the impact of COVID-19 on the markets served by Sibelco’s activities and also the reduced levels of revenues from those assets that were sold or being discontinued from 2019-2020, notably lime and limestone, magnesia and mineral sands. At constant scope (i.e. excluding the impact of divestments & closures) the reduction in revenue was 9% (from EUR 1,534 million to EUR 1,389 million).
- EBITDA excluding Covia amounted to EUR 245 million compared to EUR 328 million in 2019, a reduction of 25%. At constant scope (i.e. excluding the impact of divestments & closures) the reduction in adjusted EBITDA was 16% (from EUR 245 million to EUR 205 million).
- The combination of positive operating cash flows, aggressive management of working capital and capex and the inflow of proceeds from sales of assets further reinforced Sibelco’s finances. The Group’s net cash position at 31 December was EUR 168 million, an improvement of EUR 1,510 million from a net debt position of EUR 1,342 million at 31 December 2019.
- Despite the challenging economic environment, Sibelco continued to invest in selective organic growth projects and completed three smaller acquisitions in the areas of glass recycling and high-quality clays. Sibelco also largely completed the process of divestment from non-core activities that was started in 2018.
- Sibelco made good progress on its sustainability agenda with the most notable achievement being a significant reduction in its recordable injury rate (RIR) – down to 4.7 from 6.8; an ambitious plan for carbon emission reduction is being developed and will be communicated in August.
Commenting on the results, Sibelco CEO Hilmar Rode said: “I would like to thank the employees of Sibelco for their resilience and dedication during what has been an exceptionally challenging year. They have provided our customers with largely uninterrupted service, operated our facilities in a safe manner and adapted to new ways of working throughout the year. While we are not yet where we want to be in terms of performance, we have solid foundations in place. Our new vision and strategy – Sibelco 2025 – marks the start of a new journey for Sibelco with clear ambitions for our company to reconnect with its industrial heritage and establish itself as a clear leader in silica, clays for ceramics, feldspathics, olivine and glass recycling.”
Read the results release here.