Gascogne : 2016 annual results and favourable outcome of CRE5 call for tenders

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2016 featured the Group’s continuing turnaround. The investments made in 2014 and 2015 and the savings, downsizing and restructuring plans are starting to bear their fruit. This allowed a significant improvement in profitability in 2016 (the EBITDA doubled in two years) and consolidation of the financial structure.

2016 Figures
Sales 406.8 (415.1 in 2015)
EBITDA : 22.0 (16.7 in 2015)
Underlying operating profit : 11.6 (vs 7.7)
Operating profit : 10.5 (vs 9.7)
Consolidated net profit : 7.4 (vs 7.1)
Sales totalled €406.8m, a slight drop of 2.0% compared to 2015.
This drop is consistent with the Group’s strategy to focus on higher-profitability segments that will allow larger margins by working on the market and product mix that we will target in the upcoming years.
The EBITDA increased by more than 30% from €16.7m in 2015 to €22.0m in 2016 by controlling the wage bill (down €3.4m) and lower energy costs (down €1.6m), mainly due to the commissioning of the biomass boiler in the second half. The recovery of profitability was however limited by high wood supply costs.
The underlying operating profit increased from +€7.7m to +€11.6m. The increase in underlying operating profit is less than the increase in EBITDA because the depreciations rose by €1.4m due to the major investments made the past three years.
The Paper Branch generated a TO of 106,1 M€ (106,8 M€ in 2015). The profitability doubled due to the measures taken the past 3 years concerning its cost structure : the wage bill decreased significantly and energy costs continued to drop sustainably (non dependent on price of fuel) with the commissioning of the biomass boiler.
The division also benefited from a slight fall in the price of wood, which remains nonetheless much higher than historical prices.

Result of CRE5 call for tenders
The Mimizan paper plant was selected in March 2017 through the French Ministry of Ecology’s biomass call for tenders for the implementation of a cogeneration unit (electricity produced from steam) with electric power of 19.38 MW. The Gascogne Papier company has already invested close to €30m in a biomass boiler commissioned in the first half of 2016. This cogeneration project will enable completion of this investment with two latest-generation electricity turbines and equipment to improve the site’s energy efficiency. This project, which will generate value, is part of the program to turn around the production site and make it sustainable.

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