Revenues: +17.5% at € 1,552.1 million
Revenue growth in all geographical areas and product lines
EBIT: +17% at € 68.3 million
Net income higher at € 29.6 million (€ 2.0 million in 2021)
Free Cash Flow positive for € 29.3 million (€ 32.4 million in 2021)
Debt before IFRS 16 reduced to € 224.3 million (€ 258.2 million at end of 2021)
Milan, 24 February 2023 -The Board of Directors of Sogefi S.p.A., which met today under the
chairmanship of Monica Mondardini, has approved the proposed financial statements for the year 2022 , presented by chief executive officer Frédéric Sipahi.
Sogefi, a company of the CIR Group, is one of the main producers worldwide of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.
PERFORMANCE OF THE MARKET
In
2022 global vehicle production reported growth of 6.2% compared to the previous
year with progress recorded in all geographical areas: +5.7% in Europe, +9.7%
in NAFTA, +8.3% in Mercosur, +6.1% in China and +22.7% in India. The good
performance reflects the strong rise in production in the third quarter of 2022
(+29.5%) and the more limited rise in the last quarter (+1.7%).
However, despite the recovery in 2022, world car production was still lower than it was in 2019 (-7.8%), with Europe posting -23.2%. For 2023, S&P Global (IHS), a source commonly used in the sector, is predicting a rise in world production of 3.6% compared to 2022, with growth in all the main geographical areas.
SUMMARY OF SOGEFI’S PERFORMANCE IN 2022
The results for 2022 were positive and showed a significant improvement:
- Revenues posted growth of 17.5% compared to 2021, +12.5% at constant exchange rates, due to the higher production volumes and selling prices;
- EBITDA was higher at € 194.7 million versus € 192.5 million in 2021;
- EBIT totalled € 68.3 million (4.4% of revenues) and was up by 17% from € 58.4 million in 2021;
- Net income came in at € 29.6 million (€ 2.0 million in 2021);
- Free cash flow was a positive
€ 29.3 million (€ 32.4 million in 2021);
- Net debt (before
IFRS 16) contracted to € 224.3 million at 31 December 2022, from € 258.2 million
at 31 December 2021.
Product innovation was significant during 2022:
- SOGEFI’s CabinHepa+ cabin filter, which uses HEPA (High Efficiency Particulate Air) media and filters the air
mechanically, capturing particles 50 times smaller than a conventional cabin
filter, was nominated product of the year 2022 in France;
- In the month of
September the innovative cooling plates for Electric Vehicle platforms were
presented at the Novi Michigan Battery Show and were very well received by the
market;
- In
the month of October new aftermarket products and the latest product
innovations were presented at the Paris Equip Auto Show, where they received great interest from
operators in the sector.
Commercial activity was positive and 52% of the total value of new contracts was for E-mobility platforms:
- The Filtration division was awarded contracts for the supply of air purification filters, oil filters and fuel modules in Europe and India;
- The Suspensions division signed contracts in Europe for the supply of stabilizer bars for electric or plug-in hybrid vehicles and was awarded a contract for the supply of stabilizer bars for the electric version of one of the most popular pick-up trucks;
- The Air and Cooling division signed important contracts in NAFTA, Europe and China for the supply of thermal management products and cooling plates for electric mobility. 54% of the value of the division’s new contracts has to do with E-mobility platforms.
Sustainability performance improves: reduction of the energy intensity index, improvement to the procurement mix in favour of renewable sources, an increase in the amount of waste products reused.
CONSOLIDATED RESULTS FOR 2022
Revenues for 2022 came in at € 1,552.1 million
and were up by 17.5% compared to the same period of 2021.
At constant exchange rates the rise was 12.6%: sales volumes were 3.9% higher than in 2021 while the remaining part of the increase reflects the higher selling prices over the various product lines as a result of the evolution of the cost of raw materials and the components used.
Revenues were higher in all geographical areas: +9.5% in Europe, +29.7% in North America (+17.2% at constant exchange rates), +38.7% in South America (+15.8% at constant exchange rates, net of inflation in Argentina), +15% in China (+6.7% at constant exchange rates) and +36.8% in India (+29.4% at constant exchange rates).
Suspensions reported a rise in
revenues of 21.5% (+16.6% at constant exchange rates), with significant growth
rates particularly in India, North America, South America and Europe.
Filtration
reported a rise in revenues of 15.6% higher (+12.1% at constant exchange rates),
thanks to the good performance of the Aftermarket
channel in Europe and of business in North America and India.
Air and Cooling reported revenues
that were up by 15.4% (+8.9% at constant exchange rates), with particularly
significant increases in China and Nafta.
EBITDA, totalling € 194.7 million, rose by 1.1% from € 192.5 million in 2021; excluding
other non-operating income/expense, EBITDA increased by 7%.
EBIT came to € 68.3 million, posting growth of
17% compared to € 58.4 million in 2021. The ratio to sales in 2022 was in line
with 2021 (4.4%).
Financial expense, totalling € 18.8 million, was
slightly higher than in 2021 (€ 17.8 million), which included an item of
non-recurring financial income of € 1.2 million.
Tax expense was higher at € 18.3 million (€ 13.5
million in 2021).
Net income came in at € 29.6 million, up from € 2.0
million in 2021 (€ 26.4 million, not considering the accounting loss generated
by the sale of the Argentinian Filtration business).
Free Cash Flow was positive for € 29.3 million and was substantially
in line with the figure of € 32.4 million for 2021.
At
31 December 2022 shareholders’ equity,
excluding minority interests, stood at € 230.7 million compared to € 187.7 million
at 31 December 2021. The increase reflects the net result for the period
together with other positive accounting effects.
Net financial debt before IFRS 16 amounted to € 224.3 million
at 31 December 2022 compared to € 258.2 million at year end 2021 and € 219.7
million at 30 September 2022. Including the financial payables for rights of
use, in accordance with IFRS 16, net financial debt totalled € 294.9 million at
31 December 2022, down from € 327.6 million at 31 December 2021.
At 31 December 2022 the Group had committed credit lines in excess of its requirements for € 279.0 million.
KEY RESULTS OF FOURTH QUARTER 2022
In
the fourth quarter of 2022, Sogefi reported revenues of € 386.5 million,
posting growth of 16.9% (+15.4% at constant exchange rates) compared to the
same period of 2021, thanks to the increase in production volumes (+5.8%), to the
adjustment of selling prices and to the positive effect of exchange rates.
Revenue dynamics, even with constant exchange rates
and selling prices, were positive and outperformed the market.
EBITDA came in at € 43.3 million,
11.2% of revenues, compared to € 48.3 million (14.6%) in fourth quarter 2021. The
performance of EBITDA was affected by non-operating costs of € 4.5 million
which compare with non-operating income of € 13.3 million in the fourth quarter
of 2021. Excluding the non-operating expense/income, which are of a
non-recurring nature, EBITDA rose from € 35.0 million (10.6%) in 2021 to € 47.8
million (12.4%) in 2022.
EBIT was positive for € 6.0
million (versus € 8.9 million in fourth quarter 2021) and was impacted by the
non-recurring results mentioned above.
The
consolidated net result for the
fourth quarter of2022 was a negative € 3.4 million after net
income of € 3.9 million in the same period of the previous year, after
financial expense of € 5.2 million (€ 4.4 million in 2021) and tax expense of €
3.7 million (€ 0.3 million in 2021). The greater impact of taxes reflects the
presence in the result of losses not relevant for tax purposes or for which
there was no basis for recognizing deferred tax assets; whereas the fourth
quarter of 2021 benefited from the recognition of deferred tax assets of € 4.3
million.
SIGNIFICANT
EVENTS OCCURRING AFTER 31 DECEMBER 2022
Since the
close of the year, there have been no significant factors or events that could
have an impact on the economic, patrimonial and financial information presented
in this document.
OUTLOOK FOR THE YEAR
Visibility as to the trend of the automotive market in
2023 remains low due to the uncertainties linked to the Russian-Ukrainian
conflict, the macroeconomic evolution and the prices of raw materials,
particularly energy.
For 2023, S&P Global (IHS) is forecasting growth
in world car production of 3.6% compared to 2022, with Europe at +7.1%, NAFTA at
+5.4%, South America at +4.9% and China at +1.1%.
As far as commodity prices are concerned, during 2022
the rising trend of steel prices came to an end and in the last part of the
year the prices of resin and other raw materials, gas and electricity stopped
rising although volatility remains high. It should also be noted that there
continue to be inflationary pressures on labour costs in certain geographical areas.
Provided there is no serious deterioration in the
geopolitical and macroeconomic scenario from today’s levels, in 2023 the Sogefi
Group expects to see mid single-digit revenue growth and an operating result,
excluding non-recurring expense, that is at least in line with that of 2022.
DIVIDEND PROPOSAL
The Board of Directors will
put forward to the Annual General Meeting of the Shareholders the proposal that
no dividend be distributed.
VERIFICATION OF THE REQUISITES OF
INDEPENDENCE
During
today’s meeting the Board of Directors verified the presence of the requisites
of independence of the directors who have declared themselves to be
independent, Patrizia Arienti, Maha Daoudi, Mauro Melis, Massimiliano Picardi
and Christian Georges Streiff. Five directors out of a total of nine are
therefore independent. The Board of Statutory Auditors in its turn verified the
existence of the requisites of independence of its members. All the independent
directors and members of the Board of Statutory Auditors therefore possess the
requisites established by the law and by the Corporate Governance Code adopted
by the Company.
ANNUAL GENERAL MEETING OF THE
SHAREHOLDERS
The Annual General Meeting of the Shareholders
of Sogefi will be held at the first call on 21 April 2023 and at the second
call on 24 April 2023.
The Board of Directors has voted to put the following resolution
proposals before the Annual General Meeting of the Shareholders:
Authorization to buy back
own shares
In the light of
the rules stated in Articles 2357 and following articles of the Civil Code, of
Art. 132 of D.Lgs. no. 58/98, of Art.
144-bis of Consob Resolution no. 11971/1999, of EU Regulation no. 596/2014, EU
Delegated Regulation no. 2016/1052, and of Consob Resolution no. 20876 of April
3 2019 and Consob Guidelines of July 2019, the cancellation and renewal of the
authorization of the same Board of Directors, for a period of 18 months to buy
back a maximum of 10 million own shares at a unit price that cannot be more
than 15% higher or lower than the benchmark price recorded by the Company’s
shares on the Stock Exchange trading day preceding each single buyback
transaction or preceding the date on which the price is fixed in the event of
purchases made according to the procedures stated in points (a), (c) and (d) of
the following paragraph, and in any case, when the shares are bought back
through orders placed in the regulated market, the price must not be higher
than the higher of the price of the last independent transaction and the
highest current independent bid price on the same market. As of today the
Company owns 1,877,751 of its own shares, equal to 1.56% of the share capital.
The buyback must take place in the market,
in compliance with the terms of Art. 132 of D.Lgs no. 58/98 and with the terms
of the law or the regulations in force at the moment of the transaction and
more precisely (a) through a public tender offer to buy or exchange shares; (b)
on regulated markets following operating procedures established in the rules
for organizing and managing the said markets, which do not allow bids and
offers to be matched directly; (c) through the assignment pro-rata
of put options to the shareholders to be assigned within 15 months of the date
of the AGM resolution authorizing the same with exercise within 18 months of
the same resolution; (d) through the purchase and sale of
derivative instruments traded on regulated markets that involve the physical
delivery of the underlying shares in compliance with the further provisions
contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per
the terms of Articles 5 and 13 of EU Regulation 596/2014.
The main reasons why this authorization is
being renewed are the following: (i) to fulfil obligations resulting
from possible stock option plans or other awards of shares of the Company to
employees or members of the Board of Directors of Sogefi S.p.A. or its
subsidiaries, or to fulfil any obligations resulting from debt instruments that
are convertible into or exchangeable with equity instruments; (ii)
to have a portfolio of own shares to use as consideration for any extraordinary
transactions, even those involving an exchange of shareholdings, with other
parties within the scope of transactions of interest to the Company (a
so-called “stock of securities”); (iii) to engage in action to support
market liquidity, optimize the capital structure and remunerate shareholders in
particular market conditions, all within the limits established by current
rules and regulations; (iv)
to take advantage of opportunities for creating value, as well as
investing liquidity efficiently in relation to the market trend; (v)
for any other purpose qualified by the competent Authorities as admitted market
practice in accordance with applicable European and domestic rules, and with
the procedures established therein.
Stock Grant Plan 2023
The approval of a stock grant plan for 2023, for a maximum of 1,250,000 units, aimed at employees of the Company and its subsidiaries, in terms to be defined by the Board of Directors and communicated to the market in sufficient time for any legal obligations to be complied with. The stock grant plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them a medium-long term incentive to increase their commitment to improving the performance of the Company while at the same time aligning the interests of management, shareholders and all stakeholders.
