Financial information IFRS interim consolidated financial statements
at 30 June 2020
Registered office: 12 rue Léon Laval, L-3372 Leudelange
Registered company number: B27846
Contents
IFRS interim consolidated financial statements at 30 June 2020
Management report | p. 3 |
Message from the Managing Directors | p. 4 |
Financial indicators | p. 6 |
Main events over the period and recent events | p. 8 |
Net Asset Value | p. 10 |
Risk Management | p. 12 |
Outlook | p. 12 |
Legal notice | p. 13 |
Report of the Réviseur d'Entreprises Agréé | p. 15 |
Consolidated statement of profit or loss | p. 17 |
Consolidated statement of comprehensive income | p.18 |
Consolidated statement of financial position | p. 19 |
Consolidated statement of cash flow | p. 21 |
Consolidated statement of changes in equity | p. 22 |
Notes to the interim consolidated financial statements | p. 23-32 |
Management
Report
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 4
MESSAGE FROM THE MANAGING DIRECTORS
Dear Shareholders,
The first six months of 2020 have proven to be quite out of the ordinary with the emergence of the Covid-19 pandemic and related sanitary crisis. We have seen most countries in Europe (and the world) put into lockdown for several months. Governments and Central banks had to step in quickly and in dramatic manner to keep our social, economic and financial systems alive.
The outcome of this crisis remains uncertain and it is very difficult at this stage to fully assess the impact on business and our lives in general.
However, we believe that Luxempart has a solid foundation and is well prepared to weather the storm and preserve your investment. Our investment activity is based on a long-term horizon and on significant diversification of our assets, geographically as well as in terms of industry exposure. We do not have to react in the short term and are able to commit significant resources to the preservation and development of our assets. The solidity of our portfolio is shown in the relative resilience of our net asset value. Even though on a line by line basis, some assets suffer more than others from the Covid-19 crisis, all have performed reasonably well, none is in jeopardy, and the reduction in value is mainly related to the overall downturn in stock markets.
Our net asset value decreased by 8.3% (6.4% dividend paid to our shareholders reintegrated) due to the unrealised mark to market valuation of our portfolio on 30 June 2020, which is impacted by the negative market environment. Indeed, our reference index declined by more than 13% over the same period. Luxempart compares favorably mainly due to 3 reasons : (i) ca. 13% of our NAV is cash and remains stable (ii) our main portfolio companies, thanks to their robust operating performance, compare favourably to other companies in their sector in Europe and (iii) our portfolio is over-exposed (compared to the index) to non-discretionary consumer goods, whose performance remained very solid during the Covid-19 crisis.
Furthermore, we would like to underline that since Luxempart has no constraints to rotate its portfolio, this downturn during the first half of 2020 should not have a significant impact on our companies' future valuations. Thus under the assumption, which is valid as of today, that our assets, given their intrinsic qualities, should recover from the impact of the current crisis, the value of the portfolio remains solid and sustainably so.
A crisis is also a time of opportunity. Our company has taken a number of initiatives in 2020 in line with the strategy that was outlined in 2019 :
- Luxempart has invested in total € 111 m: on the one hand, in partnership with Cobepa, in Enoflex, a very promising unlisted group that has achieved the status of world leader in its niche market, and on the other hand has reinforced its exposure to some of our listed portfolio lines, taking advantage of their lower stock market valuation.
- At the same time, benefitting from the quality of several portfolio companies that were only marginally affected, we pursued divestments, generating capital gains in line with our long term objectives. During the first half of 2020 Luxempart has made divestments of € 100 m; further exits are expected to be realised in the next months.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 5
Moreover, we have continued to reinforce our investment team with the arrival of 3 new investment professionals in 2020, at the executive committee as well as in the younger levels of our team. This trend is continuing as we were able in July to attract a very seasoned Investment Director who will cover the DACH region for Luxempart and we are in advanced talks with a candidate for the same position but geared towards French-speaking Europe. We believe that with these reinforcements, Luxempart will have all necessary human resources to seize interesting investment and divestment opportunities in the coming quarters, as well as to continue to preserve the value of our portfolio and to foster growth by committing additional capital.
2020 will be a transitional year for Luxempart, in an challenging environment, but we remain cautiously optimistic and strongly believe that the fundamental strengths of your company will allow us to continue to create shareholder value in the long term.
John Penning | Olaf Kordes |
Managing Director | Managing Director |
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 6
FINANCIAL INDICATORS
The interim consolidated accounts of Luxempart cover the first 6 months of 2020. They were subject to a limited review by the statutory auditor Deloitte, who issued a report, to a thorough analysis by the Audit, Risk and Compliance Committee in its meeting held on 24 August and the approval of the Board of Directors on 26 August. The financial statements have been prepared in compliance with IAS 34 - Interim financial reporting. Since they are condensed financial statements, they do not include all the information required under IFRS and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2019.
The consolidated result of the period ending 30 June 2020 of € -101 million is mainly composed of € -97 million from investments activities (dividends received and capital gains/losses - realised and unrealised) and € -4 million expenses on ordinary activities (operating expenses, staff cost…).
Financial statements information | 30/06/2020 | 31/12/2019 | 30/06/2019 |
(in € million) | (6 months) | (12 months) | (6 months) |
Equity (group share) | 1,444 | 1,575 | 1,460 |
Net result | -101 | 207 | 92 |
ALTERNATIVE PERFORMANCE INDICATORS
The Alternative Performance Indicators present mainly the capital gains and losses, investments and divestments and net cash position directly of Luxempart and indirectly of its subsidiaries:
API | 30/06/2020 | 31/12/2019 | 30/06/2019 | ||
(in € million) | (6 months) | (12 months) | (6 months) | ||
Market capitalisation | 940 | 1,064 | 1,084 | ||
Net asset value | 1,444 | 1,575 | 1,460 | ||
Dividends from portfolio | 12 | 23 | 24 | ||
Net realised and unrealised capital | -110 | 193 | 73 | ||
gains (losses) of the period | |||||
Investments | 111 | 169 | 44 | ||
Divestments | 100 | 127 | 33 | ||
Net cash (cash net of financial debt) | 115 | 155 | 185 | ||
Liquid securities portfolio | 95 | 79 | 54 | ||
Interim consolidated financial statements at 30 June 2020 Luxempart S.A.7
For its performance reporting, the Management of the Group does not exclusively refer to a reporting prepared under IFRS. In addition to the IFRS Financial Statements, and in order to increase transparency, the Group has decided to present Alternative Performance Indicators (API). The API reporting is a financial measure of historical and future financial performance, financial position, and cash flows other than a financial measure defined or specified in the applicable financial reporting framework (IFRS). For more information on the difference between the API reporting and the IFRS, please refer to the annual report 2019. A reconciliation between the API reporting and the IFRS financial statements is presented hereafter.
KEY FIGURES PER SHARE
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Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 8
MAIN EVENTS OVER THE PERIOD AND RECENT EVENTS
General overview
The first half year was affected by the Covid-19 pandemic and the decline of financial markets in March 2020, partially absorbed during the last weeks of the first semester. Central banks reacted fast and governments took supporting measures such as credit guarantees, tax rescheduling and other financial supports.
Luxempart, being cash rich and with no limited leverage, has solid financial fundamentals and is well equipped to serenely pass through these uncertain times, support its portfolio companies and maintain a regular dividend payment.
Our investment team based in Luxembourg is mainly composed of nationals from Belgium, France, Germany and Switzerland who have permanent access to our portfolio companies based in these countries. Moreover, Luxempart is associated to teams in those countries and in Northern Italy.
The exceptional crisis impacting nearly all our portfolio lines intensified the links our investment managers have with the portfolio companies and directed the focus on short term support measures, business plan reviews and strategic reorientation. Our team, in close coordination and collaboration with the company management teams and co- stakeholders, reacted quickly, with prudence and determination.
During the first semester, only one portfolio line required a limited capital injection complementary to a loan guaranteed by its government and one portfolio line was declared insolvent (already fully impaired in the 2019 accounts). The capital increase of Atenor is not due to the pandemic but serves mainly growth financing. Most of our portfolio lines were of course impacted by the lockdown during several weeks, especially those exposed to retail and tourism, with reduced sales and profit margins. Some of our main portfolio lines lost in value mostly due to the lower valuation multiples of peer companies. The value decrease of SES is explained by a general re-rating of satellite companies and the impact on our net asset value is limited due to the low weight on our total portfolio.
Other listed companies, such as Zooplus and Süss Microtec, increased in value due to the positive evolution of e- commerce and microchips. Our investments in funds are rather stable in terms of valuation, except Ekkio that decreased in value due to its exposure to French tourism.
All in all, the net value decreased during the first half year, impacting negatively our result by € 105.9 million. This shows so far the resilience of our diversified portfolio through the balanced exposure to several sectors and geographies.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A.9
Main events
During the first half year 2020, the Group succeeded in investing € 111 million and disinvesting € 100 million.
ENOFLEX
Enoflex
ξ Acquisition of a minority stake in the global market leader of wine closure solutions ξ Investment alongside COBEPA and the Moglia family
ξ Representation at the board of directors by 2 Luxempart team members
ξ Enoflex is a mid-cap company resulting from the combination of Enoplastic (IT) and Sparflex (F)
Atenor
ξ Subscription to the € 78 million capital increase proportionally to our preference rights for € 8 million
ξ Reinforcement of equity capital to pursue growth and international diversification
LPKF
ξ Sale of our stake with an IRR of 23.4 %
ξ Contribution to value creation through governance measures and strategic input
Low&Bonar
ξ Sale of our stake in the wake of the public takeover by the global technology group Freudenberg
SES
ξ Sale of 1.4 million shares during the first semester ξ Remaining position at 1.5 million shares
Zooplus
ξ Sale of 94,165 shares to take profit of the rising share price and to reduce our exposure
Luxempart also reinforced its listed portfolio investing near € 3.5 million, its treasury portfolio for 39 million and contributed to capital calls from investment funds for € 8 million.
Luxempart has sold for € 19 million in treasury portfolio.
Moreover, Luxempart received capital distributions from investment funds of € 5 million.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 10
NET ASSET VALUE AND RESULTS
Total estimated net asset value
The net asset value estimated at 30 June 2020 amounts to € 1,444 million compared to € 1,575 million as at 31 December 2019, which is a decrease of -8.3%(-6.4% performance including the dividend paid to the shareholders in May 2020).
The net asset value per share of € 71.92 compares to a stock price per share of € 46.80 on June 30, 2020.
This performance compares favourably with the MSCi Europe mid-cap net return which had a negative return of 13.2% over the first 6 months of the year.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 11
Consolidated results
The IFRS consolidated results at 30 June 2020 amount € -101 million. It is mainly composed of the impacts of the valuation decrease of investments.
Reconciliation between IFRS and Alternative Performance Indicators
The tables below present the reconciliation of the IFRS financial indicators and the Alternative Performance Indicators (called "API").
Profit and loss as at 30/06/2020
(in €M) | IFRS | Adjustments | API |
Dividends received | 9 | 4 | 12 |
Net gains / (losses) on financial assets | -106 | -4 | -110 |
Result on ordinary activities and tax | -4 | 0 | -4 |
Profit for the period | -101 | - | -101 |
The differences are mainly composed of the dividends and distributions received by Luxempart Capital Partners that are recognised in "Net gains / (losses) on financial assets" in the financial statements.
Net asset as at 30/06/2020
(in €M) | IFRS | Adjustments | API |
Financial assets at fair value through profit and loss | 1,344 | -10 | 1,334 |
Cash | 116 | 32 | 148 |
Cash and cash equivalents | 41 | 107 | 148 |
Bank deposit | 75 | -75 | - |
Amounts owed to credit institutions | -13 | -19 | -32 |
Other assets and liabilities | -3 | -3 | -6 |
Total equity / Net asset value | 1,444 | - | 1,444 |
The Group Executive Committee manages the cash of the Group as being composed of the sum of the cash accounts and bank deposits of Luxempart and all its subsidiaries, whereas "Cash and cash equivalents" under IFRS are only composed of the current accounts of Luxempart and its subsidiaries that provide investment-related services (management companies).
The adjustment on the "Amounts owed to credit institutions" corresponds to the hedging loan held by Luxempart PIPE.
Cash flows in 2020
(in €M) | IFRS | Adjustments | API |
Cash at 31/12/2019 | 51 | 132 | 184 |
Investments | -99 | -12 | -111 |
Divestments | 108 | -8 | 100 |
Other cash movements | -20 | -5 | -25 |
Cash at 30/06/2020 | 41 | 107 | 148 |
The investments under IFRS are less than the operational investments as Luxempart Capital Partners and some other subsidiaries invested about € 12 million without cash injection from Luxempart.
The divestments under IFRS are higher than the economic exits performed because the non-consolidated subsidiaries distributed more cash to Luxempart than the value of the exits performed.
The differences on "Other cash movements" are mainly composed of decrease of the bank deposits.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 12
RISK MANAGEMENT
Luxempart faces specific risks due to the nature of its activities. Each of its investments is exposed to particular risks, mainly due to the business, location, regulation, customer's base and strategy decisions. Luxempart implements governance rules and closely liaises with the management of the major portfolio investments to mitigate the risk factors.
A major risk of Luxempart on all levels of the group is the market risk. All our assets are impacted by the evolution of financial markets and macroeconomic indicators (stock markets, comparable transactions of peer companies, valuation multiples, interest ratios…).
Especially investments listed on stock markets are under the influence of global market trends. Luxempart investments in such listed companies is about 21 % as of 30 June 2020.
Other risks are described in more detail in the 2019 annual financial statements.
Luxempart is not an investment fund submitted to exit constraints. Our Group is a patient investor who is not driven by the financial markets and its volatility cycles. Our investment teams and our Audit, Risk and Compliance Committee closely follow the evaluation of the portfolio investments. Investment and divestment decisions depend more on specific company analysis than financial market or fund investment cycles.
OUTLOOK
The uncertainty caused by the Covid-19 pandemic affecting the rhythm and intensity of the economic recovery makes it more difficult to give a reliable outlook. It is therefore hazardous to predict how the valuation of our portfolio - and therefore indirectly our net result - will evolve until the end of the year.
Over the long term, the following positive elements have to be kept in mind:
- Strong financial fundamentals and no leverage of Luxempart and limited leverage of most of its major portfolio lines
- Cash position (including deposits) and treasury portfolio in excess of € 200 million and wide access to credit lines
- Stable, professional and international team in Luxembourg with team members partially based in our home markets Germany, France, Belgium and Northern Italy
- Stable shareholder base with entrepreneurial background and a long term orientation
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 13
LEGAL NOTICE
No specific legal notice is required for the half year financial report.
Nevertheless, Luxempart provides the following information:
Own shares
As at 30 June 2020 Luxempart holds 615,428 own shares which corresponds to 3.0% of the issued share capital for a book value of € 17 million.
Stock option plan (as at 30 June 2020)
The number of outstanding stock options corresponds to 379,728 options (1.9% of the circulating shares).
Research and development
Luxempart does not pursue any research and development activities.
Transparency
The Board of Directors of Luxempart declares that it has examined and approved the interim financial statements and management as at 30 June 2020 report upon recommendation of the Audit, Risk, and Compliance Committee and in consideration of the limited review of the statutory auditor.
The statement reflects the true and fair financial situation of Luxempart Group as of 30 June 2020 in line with applicable rules and standards.
The Board of Directors assumes full responsibility for the content of the half year report including the interim financial statements as of 30 June 2020.
Report of the Réviseur
d'Entreprises Agréé
Deloitte Audit
Société à responsabilité limitée 20 Boulevard de Kockelscheuer L-1821 Luxembourg
B.P. 1173
L-1011 Luxembourg
Tel: +352 451 451
www.deloitte.lu
To the Shareholders of Luxempart S.A.
12, rue Léon Laval L-3372 Leudelange
REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL INFORMATION
Introduction
We have reviewed the accompanying interim consolidated financial statements of Luxempart S.A comprising the consolidated statement of financial position at June 30, 2020, related consolidated statement of profit or loss, consolidated statements of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows, for the 6 months period from January 1, 2020 to June 30, 2020 ("interim consolidated financial information") and a summary of significant accounting policies and other explanatory notes. The Board of Directors are responsible for the preparation and fair presentation of this interim financial information in accordance with IAS 34 "Interim Financial Reporting "as adopted by the European Union. Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Société à responsabilité limitée au capital de 360.000 €
RCS Luxembourg B67.895
Autorisation d'établissement 10022179
© Deloitte Audit, SARL | 15 |
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting " as adopted by the European Union.
Deloitte Audit, Cabinet de Révision Agréé
Christian van Dartel, Réviseur d'Entreprises Agréé
Partner
August 2020
16
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 17
Consolidated statement of profit or loss
As at 30 June 2020
in thousands of € | Notes | 30/06/2020 | 30/06/2019 |
Investments activities | |||
Dividends received | 3 | 8,834 | 19,665 |
Net gains / (losses) on financial assets | 3, 4 | -105,892 | 76,416 |
Profit on investments activities | -97,059 | 96,081 | |
Ordinary activities | |||
Services / recovery of services | 878 | 1,080 | |
Staff costs | -1,785 | -1,724 | |
Operating expenses | -3,145 | -2,643 | |
Depreciation and amortisation of non-current assets | -60 | -49 | |
Profit on ordinary activities | -4,111 | -3,336 | |
Operating income | -101,170 | 92,745 | |
Financial income | 597 | 219 | |
Financial expenses | -217 | -612 | |
Profit before tax | -100,790 | 92,352 | |
Tax current | -25 | -29 | |
Profit for the period | -100,815 | 92,323 | |
Attributable to the owners of the Company | -100,815 | 92,323 | |
Earnings per share attributable to the owners of the Company | |||
Weighted average number of shares | 20,080,305 | 20,073,337 | |
Earnings per share - | |||
attributable to the owners of the Company (in €) | -5.02 | 4.60 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 18
Consolidated statement of comprehensive income
As at 30 June 2020
in thousands of € | Notes | 30/06/2020 | 30/06/2019 |
Consolidated profit for the period | -100,815 | 92,323 | |
Items that could be reclassified subsequently to profit or loss : | - | - | |
Total comprehensive income | -100,815 | 92,323 | |
Attributable to the owners of the Company | -100,815 | 92,323 | |
Comprehensive income attributable to the owners of the Company | |||
Weighted average number of shares | 20,080,305 | 20,073,337 | |
Comprehensive income per share attributable | |||
to the owners of the Company (in €) | -5.02 | 4.60 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 19
Consolidated statement of financial position
As at 30 June 2020
in thousands of € | Notes | 30/06/2020 | 31/12/2019 |
Non-current assets | |||
Intangible and tangible fixed assets | 428 | 459 | |
Financial assets at fair value through profit and loss | 4 | 1,343,067 | 1,458,625 |
Loans and receivables | 853 | 844 | |
Total non-current assets | 1,344,348 | 1,459,929 | |
Current assets | |||
Loans and receivables | 2,382 | 2,129 | |
Bank deposits | 75,000 | 80,000 | |
Cash and cash equivalents | 41,444 | 51,366 | |
Total current assets | 118,826 | 133,495 | |
Total assets | 1,463,174 | 1,593,423 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 20
Consolidated statement of financial position
As at 30 June 2020
in thousands of € | Notes | 30/06/2020 | 31/12/2019 |
Equity attributable to the owners of the Company | |||
Capital and share premium | 5 | 66,860 | 66,860 |
Reserves | 1,478,371 | 1,300,371 | |
Profit for the period attributable to the owners of the Company | -100,815 | 207,449 | |
Total equity attributable to the owners of the Company | 1,444,417 | 1,574,680 | |
Total equity | |||
1,444,417 | 1,574,680 | ||
Non-current liabilities | |||
Non-current provisions | 3,280 | 3,342 | |
Amounts owed to credit institutions | 7 | - | 10,179 |
Total non-current liabilities | 3,280 | 13,521 | |
Current liabilities | |||
Trade and other payables | 2,476 | 5,222 | |
Amounts owed to credit institutions | 7 | 13,000 | - |
Total current liabilities | 15,476 | 5,222 | |
Total liabilities | 18,757 | 18,743 | |
Total equity and liabilities | 1,463,174 | 1,593,423 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 21
Consolidated statement of cash flow
As at 30 June 2020
in thousands of € | Notes | 30/06/2020 | 30/06/2019 | |
Profit for the period | -100,815 | 92,323 | ||
Adjustments for : | ||||
Depreciation and amortisation of non-current assets | -2 | -20 | ||
Net gains / (losses) on financial assets | 4 | 105,892 | -76,416 | |
5,075 | 15,887 | |||
Acquisition of financial assets | 4 | -98,679 | -40,608 | |
Disposal of financial assets | 4 | 108,344 | 16,650 | |
Net change in loans and receivables | -262 | -314 | ||
Net change in borrowings and debts | -2 746 | -902 | ||
Amounts owed to credit institutions | 7 | 2,821 | 6,592 | |
Other changes | 57 | -24 | ||
Net cash flows from operating activities | 14,788 | -2,719 | ||
Including : | ||||
Taxes paid | -23 | -35 | ||
Interest paid | -88 | -260 | ||
Interest received | 14 | 146 | ||
Acquisitions / disposals of tangible and intangible assets | -30 | -7 | ||
Net cash flows from investing activities | -30 | -7 | ||
Deposit account | 5,000 | - | ||
Disposals / acquisitions of own shares | 5 | 221 | 46 | |
Dividends paid | 6 | -29,725 | -28,248 | |
Net cash flows from financing activities | -24,680 | -28,202 | ||
Net increase/ (decrease) in cash | -9,922 | -30,929 | ||
Cash at the beginning of the period | 51,365 | 200,812 | ||
Cash at the end of the period | 41,443 | 169,884 | ||
Net increase / (decrease) in cash | -9,922 | -30,929 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 22
Consolidated statement of changes in equity
As at 30 June 2020
Notes | Capital and | Own | Legal | Other | Profit for | Attributable | |
share | shares | reserve | reserves | the period | to owners | ||
premium | of the | ||||||
in thousands of € | Company | ||||||
Equity at 31/12/2018 | 74,894 | -104,982 | 5,989 | 1,403,571 | 16,009 | 1,395,481 | |
Dividends paid by the | |||||||
Company | 6 | - | - | - | -28,248 | - | -28,248 |
Allocation of profit | - | - | - | 16,009 | -16,009 | - | |
Capital reduction | -8,034 | 87,779 | - | -79,745 | - | - | |
Operations on own shares | - | 46 | - | -4 | - | 41 | |
Comprehensive income for | |||||||
the period | - | - | - | - | 92,323 | 92,323 | |
Equity at 30/06/2019 | 66,860 | -17,158 | 5,989 | 1,311,584 | 92,323 | 1,459,599 | |
Notes | Capital and | Own | Legal | Other | Profit for | Attributable | |
share | shares | reserve | reserves | the period | to owners | ||
premium | of the | ||||||
in thousands of € | Company | ||||||
Equity at 31/12/2019 | 66,860 | -17,218 | 5,989 | 1,311,600 | 207,449 | 1,574,680 | |
Dividends paid by the | |||||||
Company | 6 | - | - | - | -29,725 | - | -29,725 |
Allocation of profit | - | - | - | 207,449 | -207,449 | - | |
Legal reserve reduction | - | - | -814 | 814 | - | - | |
Operations on own shares | - | 221 | - | 55 | - | 276 | |
Comprehensive income for | |||||||
the period | - | - | - | - | -100,815 | -100,815 | |
Equity at 30/06/2020 | 66,860 | -16,997 | 5,175 | 1,490,193 | -100,815 | 1,444,417 |
The notes form an integral part of these interim consolidated financial statements.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 23
Notes to the interim consolidated financial statements as at 30 June 2020
Note 1 - General information
Luxempart S.A. ("the Company" or "Luxempart") is an investment company whose registered office is located at 12, rue Léon Laval, L-3372 in Leudelange. The Company was founded on 25 April 1988, under the name BIL Participations. The General Meeting of the shareholders of 15 September 1992 decided to change the Company's name to Luxempart S.A. The interim consolidated financial statements for the first 6 months ending on 30 June 2020 incorporate the financial statements of the Company and its subsidiaries ("the Group"). The Company is listed on the Luxembourg Stock Exchange and registered on the trade register under no. B27846.
Luxempart is primarily active in Luxembourg, Belgium, France, Italy and Germany. It actively manages a portfolio of listed and non-listed companies.
The publication of Luxempart's interim consolidated financial statements as at 30 June 2020 was authorised by the Company's Board of Directors on 26 August 2020.
The first six months of 2020 have proven to be quite out of the ordinary with the emergence of the Covid-19 pandemic and related sanitary crisis. The outcome of this crisis remains uncertain and it is very difficult at this stage to fully assess the impact on business and our lives in general.
However, the Board of Directors believes that Luxempart has a solid foundation and is well prepared to weather the storm. Its investment activity is based on a long-term horizon and on significant diversification of its assets, geographically as well as in terms of industry exposure. Luxempart does not have to react in the short term and is able to commit significant resources to the preservation and development of its assets. The solidity of its portfolio is shown in the relative resilience of its net asset value. Even though on a line by line basis, some assets suffer more than others from the Covid-19 crisis, all have performed reasonably well, none is in jeopardy, and the reduction in value is mainly related to the overall downturn in stock markets.
Note 2 - Consolidation principles, valuation rules and accounting standards
Declaration of conformity
The interim consolidated financial statements of Luxempart and its subsidiaries as at 30 June 2020 have been prepared in compliance with IAS 34 Interim financial reporting. Since they are condensed financial statements, they do not include all the information required under IFRS and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2019.
The majority of dividends from investments were received during the first half of 2020. The Group's other activities and results are not significantly seasonal or cyclical in nature.
Framework for preparation and presentation of financial statements
The interim consolidated financial statements are presented in thousands of euros (€). The functional and presentational currency is the euro (€).
The principles, methods and assessment and consolidation techniques used in preparing these interim consolidated financial statements are not identical to those used by the Group in preparing its consolidated financial statements to 31 December 2019.
Accounting principles and policies are applied consistently and continuously within the Group.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 24
Note 3 - Segment information
The activities of Luxempart are developed under two segments:
- The "Direct investments" that consists in taking direct participations in companies in the target geographical regions, which primarily consist of the Belux Region, France, Germany and Italy.
- The "Fund investments" that consists in the acquisition of shares in investment funds mainly active in private equity and venture capital.
Prior period comparable figures have been restated to reflect the new segmentation.
A geographical segmentation is considered not relevant for Luxempart.
Group chart as at 30 June 2020
DIRECT INVESTMENTS | |||||||||
Private equity | Co-investments | Listed | |||||||
Foyer | Mehler | Atenor | |||||||
eduPro | ESG | SES | |||||||
Mirato | Prym | Zooplus | |||||||
Quip | Boxine | Kaufman & Broad | |||||||
Assmann | Marlink | RTL | |||||||
Rimed | Fx Solutions | SEO | |||||||
WDS | Campings | TCM | |||||||
Novotergum | ECAS | Schaltbau | |||||||
Enoflex | IHS | Ascom | |||||||
Rattay | Stoll | Süss Microtec | |||||||
AEB | Technotrans | ||||||||
Vivalto | |||||||||
FUND INVESTMENTS | |||||||||
Ekkio Capital | Armira Holding | Bravo Capital | Indufin Capital Partners | ||||||
(minority & majority | (minority & majority | (minority & majority | |||||||
(minority & majority | Other Funds | ||||||||
private equity in the | private equity in | private equity in | |||||||
private equity in France) | |||||||||
DACH region) | Northern Italy) | Belgium) | |||||||
Ekkio I | Biosynth | Arbo | Baobab | Quadrille | |||||
Ekkio II | Prym | Metalworks | NMC | Mangrove | |||||
Ekkio III | Polycine | Axi | Faso | ||||||
Ekkio IV | F24 | Apax X | |||||||
Virtamed | Cat@Work | ||||||||
Filewave | Other | ||||||||
AGN | |||||||||
Boxine | |||||||||
Scheu Dental |
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 25
Segmentation information
Profit or loss
Direct | Fund | |||
in thousands of € | investments | investments | Others (*) | 30/06/2019 |
Investments activities | ||||
Dividends received | 19,665 | - | - | 19,665 |
Net gains / (losses) on financial assets | 47,108 | 29,361 | -52 | 76,416 |
Profit on investments activities | 66,772 | 29,361 | -52 | 96,081 |
Ordinary activities | - | - | ||
Services / recovery of services | 1,080 | 1,080 | ||
Staff costs | - | - | -1,724 | -1,724 |
Operating expenses | - | - | -2,643 | -2,643 |
Depreciation and amortisation of non-current assets | - | - | -49 | -49 |
Profit on ordinary activities | - | - | -3,336 | -3,336 |
Operating income | 66,772 | 29,361 | -3,388 | 92,745 |
Financial income | - | - | 219 | 219 |
Financial expenses | - | - | -612 | -612 |
Profit before tax | 66,772 | 29,361 | -3,782 | 92,352 |
Tax current | - | - | -29 | -29 |
Profit for the period | 66,772 | 29,361 | -3,810 | 92,323 |
Direct | Fund | |||
in thousands of € | investments | investments | Others (*) | 30/06/2020 |
Investments activities | ||||
Dividends received | 8,834 | - | - | 8,834 |
Net gains / (losses) on financial assets | -85,459 | -20,349 | -84 | -105,892 |
Profit on investments activities | -76,626 | -20,349 | -84 | -97,059 |
Ordinary activities | - | - | ||
Services / recovery of services | 878 | 878 | ||
Staff costs | - | - | -1,785 | -1,785 |
Operating expenses | - | - | -3,145 | -3,145 |
Depreciation and amortisation of non-current assets | - | - | -60 | -60 |
Profit on ordinary activities | - | - | -4,111 | -4,111 |
Operating income | -76,626 | -20,349 | -4,195 | -101,170 |
Financial income | - | - | 597 | 597 |
Financial expenses | - | - | -217 | -217 |
Profit before tax | -76,626 | -20,349 | -3,815 | -100,790 |
Tax current | - | - | -25 | -25 |
Profit for the period | -76,626 | -20,349 | -3,840 | -100,815 |
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 26
Assets
Direct | Fund | Others | ||
in thousands of € | investments | investments | (*) | 31/12/2019 |
Non-current assets | ||||
Intangible and tangible fixed assets | - | - | 459 | 459 |
Financial assets at fair value through profit and loss | 1,082,092 | 349,406 | 27,128 | 1,458,625 |
Loans and receivables | 844 | - | - | 844 |
Total non-current assets | 1,082,936 | 349,406 | 27,587 | 1,459,929 |
Current assets | ||||
Loans and receivables | - | - | 2,129 | 2,129 |
Bank deposits | - | - | 80,000 | 80,000 |
Cash and cash equivalents | - | - | 51,366 | 51,366 |
Total current assets | - | - | 133,495 | 133,495 |
Total assets | 1,082,936 | 349,406 | 161,081 | 1,593,423 |
Direct | Fund | Others | ||
in thousands of € | investments | investments | (*) | 30/06/2020 |
Non-current assets | ||||
Intangible and tangible fixed assets | - | - | 428 | 428 |
Financial assets at fair value through profit and loss | 992,690 | 346,538 | 3,840 | 1,343,067 |
Loans and receivables | 853 | - | - | 853 |
Total non-current assets | 993,543 | 346,538 | 4,267 | 1,344,348 |
Current assets | ||||
Loans and receivables | - | - | 2,382 | 2,382 |
Bank deposits | - | - | 75,000 | 75,000 |
Cash and cash equivalents | - | - | 41,444 | 41,444 |
Total current assets | - | - | 118,826 | 118,826 |
Total assets | 993,543 | 346,538 | 123,093 | 1,463,174 |
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 27
Equity and liabilities
Direct | Fund | |||
in thousands of € | investments | investments | Others (*) | 31/12/2019 |
Total equity | - | - | 1,574,680 | 1,574,680 |
Non-current liabilities | ||||
Non-current provisions | - | - | 3,342 | 3,342 |
Amounts owed to credit institutions | 10,179 | - | - | 10,179 |
Total non-current liabilities | 10,179 | - | 3,342 | 13,521 |
Current liabilities | ||||
Trade and other payables | - | - | 5,222 | 5,222 |
Total current liabilities | - | - | 5,222 | 5,222 |
Total liabilities | 10,179 | - | 8,564 | 18,743 |
Total equity and liabilities | 10,179 | - | 1,583,244 | 1,593,423 |
Direct | Fund | |||
in thousands of € | investments | investments | Others (*) | 30/06/2020 |
Total equity | - | - | 1,444,417 | 1,444,417 |
Non-current liabilities | ||||
Non-current provisions | - | - | 3,280 | 3,280 |
Total non-current liabilities | - | - | 3,280 | 3,280 |
Current liabilities | ||||
Trade and other payables | - | - | 2,476 | 2,476 |
Amounts owed to credit institutions | 13,000 | - | - | 13,000 |
Total current liabilities | 13,000 | - | 2,476 | 15,476 |
Total liabilities | 13,000 | - | 5,757 | 18,757 |
Total equity and liabilities | 13,000 | - | 1,450,174 | 1,463,174 |
(*) All assets, liabilities, income and expenses that are not allocated to a segment.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 28
Note 4 - Financial assets at fair value through profit and loss
The following table provides details of changes in financial assets at fair value through profit and loss ("assets FVPL") at 30 June 2020 and 31 December 2019.
Financial assets at fair | |||
value through profit and | |||
in thousands of € | Financial assets held for trading | loss | Total |
Fair value as at 31/12/2018 | 51 216 | 1,174,794 | 1,226,010 |
Asset classification transfer | -51,216 | 51,216 | - |
Acquisitions | - | 197,043 | 197,043 |
Disposals | - | -160,522 | -160,522 |
Net gains/(losses) on financial assets | - | 196,094 | 196,094 |
Fair value as at 31/12/2019 | - | 1,458,625 | 1,458,625 |
Acquisitions | - | 98,679 | 98,679 |
Disposals | - | -108,344 | -108,344 |
Net gains/(losses) on financial assets | - | -105,892 | -105,892 |
Fair value as at 30/06/2020 | - | 1,343,067 | 1,343,067 |
The trading assets managed by Capital at Work were previously recognised as "Financial assets held for trading". In 2019 they have been reclassified in AFVPL in non-current assets as they are not considered as trading portfolios anymore, but as investments with a mid to long term.
During the first half of 2020, the Group has bought shares in Enoflex, reinforced its positions in Atenor and Capital at Work and created new bonds portfolio. The Group sold a part of its shares in SES, Zooplus and Low & Bonar generating a realised gain of € 6,979 thousand.
Luxempart Capital Partners SICAR, Luxempart PIPE and Luxco Invest proceeded to capital decrease following the sale of some assets for € 46,741 thousand.
The net losses recognised for the first semester on the Direct investments is € -85,459 thousand (principally on Foyer, SES and Atenor) and € -20,349 thousand on the Fund investments.
The carrying amount of these assets is their fair value. Assets FVPL are categorised as level 1, 2 and 3 in the fair value hierarchy.
Changes in fair value are recognised in the statement of profit and loss under "Net gains / (losses) on financial assets".
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 29
Fair value hierarchy of financial assets (FVPL) | ||||
in thousands of € | Level 1 | Level 2 | Level 3 | Total |
Fair value as at 31/12/2018 | 312,095 | - | 913,915 | 1,226,010 |
Acquisitions | 51,774 | 83,715 | 61,554 | 197,043 |
Disposals | -122,692 | - | -37,829 | -160,522 |
Net gains/(losses) on financial assets | -5,954 | 25,877 | 176,171 | 196,094 |
Fair value as at 31/12/2019 | 235,223 | 109,592 | 1,113,810 | 1,458,625 |
Level transfer | - | 6,493 | -6,493 | - |
Acquisitions | 47,162 | 1,500 | 50,017 | 98,679 |
Disposals | -61,603 | -22,000 | -24,741 | -108,344 |
Net gains/(losses) on financial assets | -5,669 | -2,219 | -98,005 | -105,892 |
Fair value as at 30/06/2020 | 215,113 | 93,366 | 1,034,588 | 1,343,067 |
There were one transfer between levels of fair value in 2020. ForAtenor's assets have been transferred from one level to another because the underlying is listed.
Level 1 financial assets consist of listed investments, such as SES, RTL Group, Atenor...
Level 2 financial assets consist of holding company holding listed investments such as Luxempart Pipe and ForAtenor.
Level 3 financial assets consist of private investments in Foyer, Armira Holding, Mehler, Stoll and Luxempart Capital Partners.
Level 1 financial assets risk analysis
An analysis of the sensitivity of the listed assets is provided in the table below. A range of variation of -10% to +10% was applied, when needed, to the market price as at 30 June 2020. This range of variation is relevant and reasonably possible.
in thousands of € | Level 1 for financial assets | ||
Share price sensitivity | -10% | 0% | 10% |
Fair value | 193,602 | 215,113 | 236,625 |
Impact through profit and loss | -21,511 | - | 21,511 |
Level 2 financial assets risk analysis
A range of variation of -10% to +10% was applied to the valuation as at 30 June 2020. This range of variation is relevant and reasonably possible.
in thousands of € | Level 2 for financial assets | ||
Sensitivity | -10% | 0% | +10% |
Fair value | 83,902 | 93,366 | 102,830 |
Impact through profit and loss | -10,613 | - | 10,613 |
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 30
Level 3 financial assets risk analysis
The following table sets out the impacts of a plus or minus 10% change in non-observable data on the fair value of financial assets. The methodology used to determine the fair value of these assets remain unchanged compared to 2019.
in thousands of € | Level 3 for financial assets | ||
Sensitivity | -10% | 0% | +10% |
Fair value | 995,009 | 1,034,588 | 1,075,676 |
Impact through profit and loss | -39,579 | - | 41,088 |
Note 5 - Capital, share premium and own shares
in thousands of € | 06/2020 | 12/2019 | ||||||
Subscribed capital | 51,750 | 51,750 | ||||||
Share premium | 15,110 | 15,110 | ||||||
Total | 66,860 | 66,860 | ||||||
The authorised capital amounts to € 90,000 thousand. | ||||||||
Own shares and reserve for own shares | ||||||||
Number of | ||||||||
Number of shares | Number of own | outstanding | ||||||
issued | shares | shares | ||||||
As at 31/12/2018 | 23,913,594 | 3,843,420 | 20,070,174 | |||||
Capital reduction | -3 213 594 | -3 213 594 | - | |||||
Acquisition and disposals | - | -6,398 | 6,398 | |||||
As at 31/12/2019 | 20,700,000 | 623,428 | 20,076,572 | |||||
Acquisition and disposals | - | -8,000 | 8,000 | |||||
As at 30/06/2020 | 20,700,000 | 615,428 | 20,084,572 | |||||
As at 30 June 2020, the Group held 615,428 own shares | (2019: 623,428). At 30 June 2020, the reserve | for own shares is | ||||||
€ -16,997 thousand (31/12/2019: € -17,218 thousand). |
Note 6 - Dividends paid
A dividend of € 1.48 gross per share was paid in May 2020 in respect of 2019, totalling € 29,725,167 (2019: € 1.407 gross per share, giving a total dividend of € 28,247,737).
Note 7 - Amounts owed to credit institutions
During the first half of 2020, the amounts owed to credit institutions € 10,179 thousand was repaid following the sale of Low & Bonar.
As at 30 June 2020, the amounts owed to credit institutions to short-term stand at € 13,000 thousand and result from the acquisition of new financial assets in Direct investment.
The borrowings bear interest at a rate of 3-month Libor + 0.9%.
The fair value of these debts do not differ significantly from their carrying amount.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 31
Note 8 - List of subsidiaries
a. Subsidiaries providing investment related services that are fully consolidated
The following table lists all subsidiaries providing investment related services to the Company and that are fully consolidated:
Subsidiary | Place of incorporation | Percentage held | Percentage held | |||||
in 30/06/2020 | in 31/12/2019 | |||||||
Luxempart Invest S.à r.l. | Luxembourg | 100,00% | 100,00% | |||||
Luxempart Ireland Limited | Dublin | 100,00% | 100,00% | |||||
Luxempart Management S.à r.l. | Luxembourg | 100,00% | 100,00% | |||||
Bravo Capital S.A. | Luxembourg | 80,00% | 80,00% |
b. Non-consolidated subsidiaries
The following table lists all entities under the Company's control or significant influence, which are measured at fair value through profit or loss. The Group is exempt from any requirement to consolidate these companies by virtue of its status as an investment entity. Luxempart neither provided nor committed to provide financial or other support to any of its non-consolidated subsidiaries, except for the engagement disclosed in the note 9.
Subsidiary | Place of incorporation | Percentage held | Percentage held |
in 30/06/2020 | in 31/12/2019 | ||
Indufin NV | Belgium | 40.00% | 40.00% |
M-Sicherheitsholding GmbH (Mehler) | Germany | 30.00% | 30.00% |
Pescahold S.A. | Luxembourg | 100.00% | 100.00% |
Pryco GmbH (Prym) | Germany | 55.60% | 55.60% |
Foyer S.A. | Luxembourg | 27.94% | 27.94% |
E-Sicherheitsholding GmbH (ESG) | Germany | 27.60% | 27.60% |
ForAtenoR S.A. | Belgium | 25.00% | 25.00% |
DMB2 GmbH & Co (Stoll) | Germany | 32.80% | 32.80% |
Assmann holding GmbH | Germany | 50.00% | 50.00% |
Luxempart Pipe S.à r.l. ** | Luxembourg | 100.00% | 100.00% |
LuxCo Invest S.à r.l. ** | Luxembourg | 83.33% | 83.33% |
Luxempart Capital Partners Sicar S.A. ** | Luxembourg | 100.00% | 100.00% |
Quip Holding GmbH | Germany | 51.00% | 51.00% |
Bravo Capital Partners SCA RAIF** | Luxembourg | 100.00% | 100.00% |
Arbo S.p.a | Italy | 40.00% | 40.00% |
Metalworks S.p.a | Italy | 60.00% | 60.00% |
Luxempart German Invest S.A. ** | Luxembourg | 99.99% | 99.99% |
EduPRO GmbH | Austria | 60.00% | 60.00% |
Arwe Mobility Holding | Germany | 50.00% | 50.00% |
Rimed AG | Switzerland | 29.30% | 29.30% |
Rattay Group GmbH | Germany | 39.90% | 39.90% |
WDS GmbH | Germany | 44.00% | 44.00% |
Luxempart German Invest II S.à r.l. ** | Luxembourg | 99.99% | 99.99% |
Novotergum GmbH | Germany | 43.80% | 43.80% |
Luxempart French Investment S.à r.l. ** | Luxembourg | 100.00% | 100.00% |
D'Alba Invest S.à r.l. ** | Luxembourg | 99.22% | 99.22% |
Indufin Capital Partners S.A. Sicar ** | Belgium | 50.00% | 50.00% |
Decoscent S.A. (Baobab)* | Belgium | 61.50% | 61.50% |
Kyotec Group * | Luxembourg | - | 32,00% |
Axithon S.A. (Axi)* | Belgium | 51.59% | 51.59% |
- The percentages indicated are the percentages of ownership by Indufin Capital Partners, itself held at 50% by Luxempart Capital Partners SICAR.
- These entities are investments entities, such as defined by IFRS 10.
Interim consolidated financial statements at 30 June 2020 Luxempart S.A. 32
Note 9 - Main off balance sheet rights and commitments
The Group has invested in private equity investment funds through its subsidiary Luxempart Capital Partners SICAR. As at 30 June 2020, € 103,620 thousand remain uncalled.
Bravo Capital Partners RAIF has recognised an uncalled capital amounting to € 32,377 thousand to be paid by Luxempart Capital Partners SICAR.
As at 30 June 2020, the commitment for Armira I and Armira II is € 28,700 thousand.
The loan of € 13,000 thousand is secured by a pledge of Luxempart's portfolio until its repayment in July 2020.
Note 10 - Related parties
Service revenues include exclusively services provided by Luxempart and billed to its investments.
The Foyer Assurances group rebills, on a quarterly basis, office rental expenses and other related expenses, insurance expenses, and miscellaneous services for a total amount of € 404 thousand as at 30 June 2020 (30/06/2019: € 307 thousand).
Two members of Luxempart's Group Executive Committee are not an employee of the Group and invoices consulting fees to Luxempart and its subsidiaries. The fees amount to € 664 thousand for the period ended 30 June 2020 (30/06/2019: € 152 thousand).
Transaction fees paid to Capital at Work, a subsidiary of the Foyer group, amount to € 11 thousand (30/06/2019: € 11 thousand) and are included in "Interest and similar expenses".
Note 11 - Events after the reporting period
There has been no significant event after the end of the reporting period.
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Luxempart SA published this content on 31 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2020 08:24:04 UTC