The overall organic revenue growth was the balance of local macroeconomic circumstances, further strengthening of the product portfolio by adding new supplier relationships, expanding relationships with existing suppliers and increasing customer penetration by adding new products and selling more products to existing and new customers.
“2018 was an outstanding year for IMCD, with all our regions contributing to this success,” said CEO Piet van der Slikke. “We achieved record growth as operating EBITA grew to €202.1 million (+25 percent) and cash earnings per share developed positively to €2.53 (+23 percent).
“We have made good progress with the integration of our existing businesses in the US and Canada and with the acquisition of E.T. Horn, enabling IMCD US to become a nationally operating organization,” van der Slikke added. “With our newly developed global digital infrastructure, we will continue to enhance customer offerings. Despite today’s geopolitical uncertainties, we remain positive about our ability to translate new opportunities into future growth.’’
Gross profit, defined as revenue less cost of materials and inbound logistics, increased by 25% from €428.7 million in 2017 to €536.1 million in 2018. The increase in gross profit was the balance of organic growth (13 percent), the first time inclusion of acquisitions (15 percent) and the negative impact of foreign currency exchange rate developments (-3 percent). On a consolidated level, gross profit by percent of revenue remained stable at 22.5 percent in 2018.
Operating EBITA increased by €40.4 million (25 percent), from €161.7 million in 2017 to €202.1 million in 2018. On a constant currency basis, the increase was by 30 percent. The growth in operating EBITA of 25 percent was a combination of organic growth, the first-time inclusion of acquisitions completed in 2017 and 2018 and the negative impact of foreign currency exchange differences (-5 percent). Operating EBITA by percent of revenue remained stable at 8.5 percent in 2018.
Free cash flow is defined as operating EBITDA excluding non-cash share-based payment expenses, plus or less changes in working capital, less capital expenditures. In 2018, free cash flow increased by three percent from €161.3 million in 2017 to €166.5 million in 2018.
As at the end of 2018, net debt was €610.7 million, compared to €490.0 million as at year-end 2017. The increase in net debt is predominantly the balance of positive and healthy cash flows from operating activities set-off by cash outflows as a result of acquisition-related payments of €141 million and a dividend payment of €33 million in 2018.