Statutory Financials

Statutory Financials

SAH Group improves quarterly revenue by 19% to TND 160 million

SAH Group improves quarterly revenue by 19% to TND 160 million

TUNIS, APRIL 10, 2020

The good business and financial performances of SAH Group (Lilas) were confirmed in the first quarter of the current year. The activity indicators as at the end of March show a solid performance both on the local and international markets.

SAH Group announced to have achieved consolidated revenues of TND 160.6 million in the first quarter of the current year, vs. TND 135 million in the same quarter of 2019, an increase of 19 %.

Taking into consideration non-delivered orders to both the local and export markets, i.e. Libyan and Algerian markets, valued at TND 5 million (US$ 1.75 million) and TND 8 million (US$ 2.8 million) respectively, adjusted revenues would reach TND 173.6 million (US$ 61 million), up by 28.6% compared to the first quarter of 2019, i.e. an increase of 38.3% on consolidated local sales and 13.4% on international sales.

Indeed, the Group stated that Deliveries were temporarily disrupted during the month of March due to the travel restrictions on the Tunisian territory and the suspension of international flights as well as the closure of land borders in response to the spread of the COVID-19 pandemic.

The group has secured a maritime solution and will resume deliveries for Libya during the month of April. In addition, SAH Group is pursuing its expansion strategy to strengthen its presence on foreign markets and to consolidate its international sales by diversifying its products offering.

Q1’2020 revenue growth was driven by a solid performance of the local market supported by additional revenues from Azur Detergents as well as the strong performance of SAH Libya and SAH Ivory Coast, which sales increased by 50% and 10% respectively.

The growth of the Libyan and Ivorian subsidiaries combined with the sustained turnover of SAH Algeria offset the overall downturn in revenues of other SAH entities (-6%).

FINANCIAL PERFORMANCE:

The group's profitability is expected to improve during the first quarter of 2020, benefiting from (1) the impact of lower prices of its main raw materials including cellulose, super absorbent and pulp, (2) the optimization of its operations process and (3) the strict management of its financial expenses by restraining its recourse to financial debts. The group has also put focus on cash collection to improve its solvency ratio.  

SAH Group confirms its commitment to finalize its development plan started in 2018. For Azur Détergents, the company will develop a new range of products intended for professionals as well as the sale of own-branded products in partnership with major distribution brands. 

Regarding Azur Papier, the company second line is scheduled to go into production in the second half of 2020, which will increase production capacity by 150%.  

As for SAH Tunisia, new products will be developed and will focus on technological innovation through the acquisition of new production units, while for SAH Senegal, the production unit will enter in operation during the second quarter of 2020.

2020 OUTLOOK

Growth will be driven by the strong performance of hygiene products and the start of production of Azur Papier's second line, scheduled for the second half of 2020.  

In addition, Azur Detergents will report its first full year’s activity in 2020 with an estimated annual turnover of TND 135 million (c.US$ 47.4 million), of which TND 20 million (c.US$ 7 million) generated by export markets, i.e. an overall increase of 140% while doubling its export sales. 

Growth in international sales will be driven mainly by the performance of Algerian, Libyan, Ivorian, and Senegalese subsidiaries, expected to start operations over the second half of 2020. New African markets have been prospected and would contribute to the group’s expansion. 

For the time being and despite the delivery constraints encountered in the first quarter of 2020, SAH Group maintains its forecasts for the first half of 2020 while closely monitoring the impact of the current health crisis.

PARENT COMPANY PERFORMANCE IN THE FIRST QUARTER

At the end of the first quarter of 2020, sales recorded a decrease of 5.8% compared to the first quarter of 2019 to reach 100.1 million dinars. 

In the local market, the company maintained the same level of sales compared to the same period of the previous year. This performance reflects the resilience of the local market despite a difficult economic situation. In the export market, sales decreased by 25.3% in the first quarter of 2020. However, the level of export sales remains 34% higher than that achieved in 2018. 

SAH Tunisia's turnover, adjusted for orders not yet delivered to the local market and Libyan market, would report a 6% growth, i.e. 5,6% growth on the local market and 9,3% export growth. To note that March outstanding orders will be delivered in April. 

As of 31st March 2020, baby care sales contributed up to 53% of SAH Tunisia's total sales followed by Family care* sales (30%) and sales of products for female care (11%). At the end of last March, Libya was the first export destination for SAH Tunisia, representing 82% of its export sales.

CAPEX

Investments reached TND 5.7 million (US$ 2 million), an increase of 155% compared to the first quarter of 2019, and correspond to new acquisitions of production machines and transport equipment. 2020 CapEx is expected to be higher than 2019‘s in line with SAH expansion in terms of production capacity.

INDEBTEDNESS

Overall indebtedness reached TND 149,7 million (US$ 51.8 million) as of March 31, 2020 compared to TND 154,6 million (US$ 50.7 million) as of March 31, 2019, decreasing by TND 4,8 million. The decrease was recorded on both long-term debts (-7,9%) and short-term debts (-1,5%). Compared to December 31st, 2019, indebtedness level remains under control despite the ongoing investment plan and the impact of the health crisis on activity.

CODIV-2019 – BUSINESS CONTINUITY PLAN

The business continuity plan has been rapidly activated at SAH to secure the continuity of its operations. Since the beginning of the pandemic, SAH Group has defined three clear priorities:

• ENSURE SAFETY AND WELL-BEING OF EMPLOYEES IN THE WORKPLACE: A work-from-home protocol for office workers is put in place. For plant workers for which telework cannot be considered and a reorganization of working hours is difficult, preventive sanitary measures have been strengthened. The teams are trained with respect to the rules of distancing by maintaining a constant state of sterilization and disinfection of premises and equipment with daily monitoring of the enforcement of sanitary measures. In addition to barrier gestures, safety measures have included the provision of dispensers of hydro-alcoholic solutions in all common areas, antibacterial hand-washing soaps, protective masks, and disposable gloves. 
• CONTINUE TO MEET THE NEEDS OF HOUSEHOLDS AND PROFESSIONALS: The group is committed to responding to the needs of consumers diligently and responsibly by ensuring the availability of its products with an increasing demand in this exceptional context.  
• PROVIDING SUPPORT TO THE LOCAL COMMUNITY IN TIMES OF NEEDS: SAH Group responded to the Ministry of Health's call for funds with a contribution of TND 200 thousand to the 1818 Solidarity Fund. A donation of 80,000 liters of bleach, disinfectants and other detergent products was also provided to the public health facilities.

Steps have been taken to support the local community’s efforts. SAH Group is committed in improving the daily lives of 400 families of those in need in partnership with Aziza supermarkets and has provided more than TND 50 thousand for health organizations and solidarity committees as well as local authorities in the governorates of Zaghouan and Beja (where its factories are located).