The GET efficiency program has provided a significant improvement in profitability in Fiscal 2021 and Fiscal 2022. Half of the initiatives were aimed at protecting the gross profit margin by adapting on-site costs to the new post-Covid levels of activity and to compensate for the end of government aid. The other half of the program was aimed at structurally reducing SG&A for the long-term by simplifying the structures in the Group, to free up capacity to invest in growth and to enhance margins.
Fiscal 2022 results benefited from the final tranche of cost savings of 164 million euros, of which 98 million euros in cost avoidance and 66 million euros in SG&A. The cash impact for the year was 73 million euros.
|
(in million euros) |
GET PROGRAM | |||
|---|---|---|---|---|
| FISCAL 2020 | FISCAL 2021 | FISCAL 2022 | TARGET | |
| CUMULATED NUMBERS | ||||
| Total exceptional costs | 158 | 312 | 322 | 350 |
| Cash impact | (75) | (217) | (290) | (315) |
| SG&A savings | — | 91 | 157 | 175 |
| Gross profit cost avoidance | — | 127 | 225 | 175 |
| Total savings | — | 218 | 382 | 350 |
| Savings/Costs | 119% | 100% | ||
Cumulated, the GET program has cost 322 million euros, generated 382 million euros of annual savings, with a cash impact of 290 million euros. As a result, the program exceeded the target cost savings by 32 million euros with a ratio of savings to costs of 119%, also above the target of 100%.
Other operating income and expenses amounted to -5 million euros compared to -239 million euros in the previous year. This significant reduction is due to the end of the GET program, with only 10 million euros of restructuring costs, a spill-over from Fiscal 2021, compared to 153 million euros in the previous year, and 117 million euros of gains related to the disposals program.
As a result, the Operating Profit recovered to 1,054 million euros compared to 339 million euros in the previous year.
| (in million euros) | FISCAL 2022 | FISCAL 2021 |
|---|---|---|
| UNDERLYING OPERATING PROFIT |
UNDERLYING OPERATING PROFIT FISCAL 2022 1,059 |
UNDERLYING OPERATING PROFIT FISCAL 2021 578 |
| Net scope change impacts |
Net scope change impacts FISCAL 2022 50 |
Net scope change impacts FISCAL 2021 (32) |
| Restructuring and rationalization costs |
Restructuring and rationalization costs FISCAL 2022 (10) |
Restructuring and rationalization costs FISCAL 2021 (153) |
| Amortization of purchased intangible assets |
Amortization of purchased intangible assets FISCAL 2022 (46) |
Amortization of purchased intangible assets FISCAL 2021 (33) |
| Other |
Other FISCAL 2022 1 |
Other FISCAL 2021 (21) |
| OTHER OPERATING INCOME AND EXPENSES |
OTHER OPERATING INCOME AND EXPENSES FISCAL 2022 (5) |
OTHER OPERATING INCOME AND EXPENSES FISCAL 2021 (239) |
| OPERATING PROFIT |
OPERATING PROFIT FISCAL 2022 1,054 |
OPERATING PROFIT FISCAL 2021 339 |
Fiscal 2022 Net financial expenses decreased to 87 million euros against 106 million euros in the previous year. The reduction came from the net effect of the debt reimbursements and issuance in Fiscal 2021 and Fiscal 2022, an increase in interest income related to higher levels of activity and some positive currency impacts. The blended cost of debt at Fiscal 2022 year end was stable at 1.6% relative to year end Fiscal 2021.
The tax charge was up significantly to 264 million euros, reflecting the higher pre-tax profit. However, the Effective tax rate on Pre-tax profit (excluding the share of profit of companies accounted for using the equity method) of 960 million euros was 27.5%, back down to a more normal rate, against 43.9% last year.
The share of profit of other companies accounted for using the equity method was stable at 8 million euros. Profit attributed to non-controlling interests was 9 million euros compared to the previous year amount of -2 million euros.
As a result, Group net income was multiplied by five to reach 695 million euros, compared to 139 million euros in Fiscal 2021. Underlying net profit adjusted for Other operating income and expenses net of tax doubled to reach 699 million euros, compared to 346 million euros in Fiscal 2021.
