Disclosure regarding the buyback of shares

Milan, 15 April 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 8 and 12 April 2024 it bought back, on the Euronext Milan market, 1,423,500 shares at an average unitary price of € 0.5508, for a total amount of € 784,127.42. As of today, CIR S.p.A. is holding a total of 73,321,211 treasury shares, equal to 6.62% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

Publication of the resolution proposal on integration of Statutory Auditors – appointment of an Alternate Auditor

Milan, 15 April 2024 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in ordinary and extraordinary session on April 29, 2024, 10.00 a.m., at a single calling, it is announced that the resolution proposal submitted by F.lli De Benedetti S.p.A. related to the 5. item on the agenda – ordinary part “Integration of the Board of Statutory Auditors through the appointment of an Alternate Auditor” is available at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.it (section Governance/Shareholders meetings) and on the authorized storage mechanism eMarket STORAGE.

Download pdf

Disclosure regarding the buyback of shares

Milan, 8 April 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 3 and 5 April 2024 it bought back, on the Euronext Milan market, 299,000 shares at an average unitary price of € 0.5376, for a total amount of € 160,741.15. As of today, CIR S.p.A. is holding a total of 71,897,711 treasury shares, equal to 6.49% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

CIR: filing of documentation for Annual General Meeting on April 29 2024

Milan, 5 April 2024 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in ordinary and extraordinary session on April 29, 2024, 10.00 a.m., at a single calling, it is announced that the following documentation:

  • The Annual Report and Financial Statements for the year ended 31 December 2023, the Report of the Board of Statutory Auditors, and the Reports of the Firm of Auditors (item 1 Ordinary Part);
  • The Consolidated Non-Financial Report for 2023;
  • The Report on Corporate Governance and ownership structure as per Art. 123-bis TUF;
  • The Report on the proposal to authorize the purchase and disposal of treasury shares (item 2 Ordinary Part);
  • The Report on the remuneration policy and on compensation paid (item 3 Ordinary Part);
  • The Report on the cancellation of treasury shares without reduction of share capital (item 1 Extraordinary Part)

is available at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.it (section Governance/Shareholders meetings) and on the authorized storage mechanism eMarket STORAGE.

Additional documentation relating to the Annual General Meeting, as required by current regulations, will be made available to the public, in the manner and within the time limits prescribed by law.

Download pdf

Disclosure regarding the buyback of shares

Milan, 3 April 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 28 March and 2 April 2024 it bought back, on the Euronext Milan market, 212,100 shares at an average unitary price of € 0.5394, for a total amount of € 114,409.05. As of today, CIR S.p.A. is holding a total of 71,598,711 treasury shares, equal to 6.47% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

Disclosure regarding the buyback of shares

Milan, 28 March 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 25 and 27 March 2024 it bought back, on the Euronext Milan market, 792,200 shares at an average unitary price of € 0.5483, for a total amount of € 434,395.13. As of today, CIR S.p.A. is holding a total of 71,386,611 treasury shares, equal to 6.45% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

CIR: filing of documentation for Annual General Meeting on April 29 2024

Milan, 26 March 2024 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in ordinary and extraordinary session on April 29, 2024, 10.00 a.m., at a single calling, it is announced that the following documentation:

– Proposal regarding the approval of the Stock Grant Plan 2024 (item 4 Ordinary Part);

– Report of the Board of Directors on the Integration of the Board of Statutory Auditors through the appointment of an Alternate Auditor (item 5 Ordinary Part);

is available at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.it (section Governance/Shareholders meetings) and on the authorized storage mechanism eMarket STORAGE.

Additional documentation relating to the Annual General Meeting, as required by current regulations, will be made available to the public, in the manner and within the time limits prescribed by law.

Download pdf

Disclosure regarding the buyback of shares

Milan, 25 March 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 18 and 22 March 2024 it bought back, on the Euronext Milan market, 1,159,070 shares at an average unitary price of € 0.5331, for a total amount of € 617,944.00. As of today, CIR S.p.A. is holding a total of 70,594,411 treasury shares, equal to 6.38% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Disclosure regarding the buyback of shares

Milan, 18 March 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 11 and 15 March 2024 it bought back, on the Euronext Milan market, 1,860,364 shares at an average unitary price of € 0.5308, for a total amount of € 987,519.15. As of today, CIR S.p.A. is holding a total of 69,435,341 treasury shares, equal to 6.27% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Update of the key information contained in the FDB shareholders’ agreement

Milan, 18 March 2024 – Notice is hereby given that the key information document drafted pursuant to Article 130 of Consob Regulation 11971/1999 (“Rules for Issuers”) on the shareholders’ agreement concerning shares in Fratelli De Benedetti S.p.A. (“FDB”) and CIR S.p.A. – Compagnie Industriali Riunite (“CIR”) (the “FDB SHA“) has been updated as of 18 March 2024 for the purpose of taking into account changes concerning the financial instruments of CIR held directly and indirectly by the parties to the FDB SHA and the tacit renewal of FDB SHA for further three years, until 16 March 2027.

The key information document on the provisions contained in the FDB SHA and an extract of the SHA has been published, pursuant to the above-mentioned Art. 130 of the Rules for Issuers, on CIR’s website at www.cirgroup.it/en/shareholders-agreements/.

Download .pdf

Disclosure regarding the buyback of shares

Milan, 11 March 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 4 and 8 March 2024 it bought back, on the Euronext Milan market, 1,564,689 shares at an average unitary price of € 0.5283, for a total amount of € 826,604.86. As of today, CIR S.p.A. is holding a total of 67,999,174 treasury shares, equal to 6.14% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

CIR: results for the year 2023

  • Consolidated revenues up by 6.9% on 2022, at € 2,379.8, +10% million in the healthcare sector and +5.5% in the automotive sector (+9.1% at constant exchange rates)
  • Consolidated EBITDA at € 352.2 million, +18.9% on 2022
  • Consolidated net income at € 32.8 million
  • Net financial position of the parent company positive and substantially unchanged at € 314.4 million; sizeable reduction in the debt of the industrial subsidiaries (-€ 70 million)
  • CIR and its subsidiaries reached the objectives set out in their sustainability plans
  • Proposal to not distribute dividends but to renew the authorization to carry out buyback for a maximum of 208,000,000 shares, with cancellation of own shares held in the portfolio, without any reduction of the share capital


Milan, 11 March 2024 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR”, the “Group” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed financial statements for the year and the consolidated financial statements of the group as of 31 December 2023, as presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In 2023 the CIR group achieved a net improvement in its consolidated results.

Revenues rose to € 2,379.8 million, posting an increase of 6.9% on 2022, with positive dynamics in both sectors of the group’s business.

The consolidated gross operating margin (EBITDA) for 2023 came in at € 352.2 million (14.8% of revenues), up from € 296.2 million in the same period of 2022 (13.3% of revenues). The higher EBITDA was due to the increase in revenues and profitability of both KOS and Sogefi, as illustrated in more detail below.

The consolidated operating result (EBIT) came to € 146.2 million, up by 74.3% from € 83.9 million in 2022.

The consolidated net result was a positive € 32.8 million, versus breakeven in 2022, with increases in all of the businesses.

Consolidated net debt before IFRS16 declined to € 17.8 million at 31 December 2023 from € 81.8 million at 31 December 2022:

  • The net financial debt of the subsidiaries was € 332.2 million versus € 402.2 million at 31 December 2022;
  • The net financial position of the Parent Company (including the subsidiaries CIR Investimenti and CIR International) was positive for € 314.4 million, down slightly from the figure at 31 December 2022 (€ 320.4 million) as an effect of the buyback of own shares for € 14.0 million.

The consolidated net financial debt including the IFRS16 liabilities amounted to € 871.5 million at 31 December 2023, including rights of use of € 853.7 million, mainly referring to the subsidiary KOS (€ 788.8 million), which operates principally in leased premises.

The shareholders’ equity of the Group stood at € 753.6 million at 31 December 2023 (€ 743.4 million at 31 December 2022).

KOS

KOS’s business activity, which was strongly hit by the consequences of the pandemic, has been reporting a gradual recovery since the middle of 2021; in 2023 the Functional and Psychiatric Rehabilitation sector was running to full capacity again and as for the nursing-home sector the return to full occupancy, both in Italy and in Germany, should be completed during 2024.

Revenues for 2023 came in at € 751.9 million, posting a 10.0% rise on 2022, thanks to the recovery in all of the sectors: +12.1% for NHs (nursing homes) in Italy and +15.4% for NHs in Germany, where the increased revenues also include an adjustment of tariffs, and +7.2% for Functional and Psychiatric Rehabilitation.

EBIT rose to € 53.0 million from € 30.3 million in 2022, despite the end of the significant support still guaranteed in 2022 by the German healthcare system to social healthcare providers. The increase in the operating result was due to the higher level of activity, the adjustments to tariffs, the recovery of operating efficiency, thanks to the higher level of occupancy and to the “normalization” of the public health situation, and the inversion of the trend of energy costs compared to 2022.

The net result was a positive € 11.7 million (-€ 0.8 million in 2022). The net result in Italy showed a distinct recovery, although it was still lower than pre-crisis levels; performance was more critical in Germany, where the results of the subsidiary Charleston, as was the case for the entire sector in which it operates, reflect the end of the significant subsidies paid out in the previous year and an adjustment of tariffa insufficient to cover the higher costs incurred during the two-year period 2022-2023, which particularly affected healthcare costs.

Free cash flow before the application of IFRS16 was positive for € 46.4 million: operating cash flow amounted to € 15.7 million, income of € 36.8 million was recorded on the sale of assets (sale of the Indian business in the Diagnostics and Cancer Care sector and of properties in Italy).  Investments were made in development for an amount of € 6.1 million.

Net debt, excluding liabilities resulting from the application of IFRS16, totalled € 131.9 million at year-end 2023 (€ 178.3 million at year-end 2022); total net debt, including the IFRS16 liabilities, stood at € 920.7 million.

On 28 June 2023 the sale was completed of the Diagnostics and Cancer Care business in India, thus concluding the refocusing strategy begun in 2020 with the sale of Medipass. The equity value of the sale, net of transaction costs, was € 18.6 million with a net capital gain of € 1.5 million.

The Board of Directors of KOS S.p.A. voted to propose that the Annual General Meeting of the Shareholders, scheduled for 24 April 2024, distribute a dividend for a total amount of € 11.7 million. CIR’s share of the dividend entitlement is € 7.0 million.

In 2024, it is expected that business will return to full operating capacity in all sectors, including the NHs, and that the return to profit will continue thanks to the increase in saturation, the ramp-up of the numerous greenfield projects developed in the last few years and to the recovery plan in progress in Germany, which rests on the assumption that the country’s health system will allow gradual increases in fees to compensate for the increase in costs over the last three years.

Sogefi   

In 2023 the automotive market recorded a vigorous recovery, with world production of motor vehicles posting growth of 9.4% compared to 2022 and progress made in all geographical areas: +12.5% in Europe, +9.5% in NAFTA, +9.4% in China, +6.3% in India and +3.5% in Mercosur. Global production for the year reached the volumes of 2019 (+1.2%), thanks to China (+17.2%) and India (+29.5%), while particularly Europe is still lower (-13.0%), as are Mercosur (-9.6%) and NAFTA (-4.1%). On the production cost front, tensions eased in the commodity and energy markets while labour costs were affected by the inflation recorded in the last two years.

The Group’s consolidated revenues were € 1,627.9 million grew by 5.5% compared to 2022 and by 9.1% at constant exchange rates, which reflects the higher production volumes (+6.1%) and higher selling costs (+2.8%).

EBIT, amounting to € 105.2 million, was up by 49.2%, with an EBIT margin at 6.5% of sales, up from 4.6% in 2022.

Net income was € 57.8 million (+95.4% versus € 29.6 million in 2022).

Free cash flow was positive for € 37.9 million (€ 29.3 million in 2022) and net debt (before IFRS16) declined to € 200,7 million at 31 December 2023, from € 224.3 million at 31 December 2022 (due to the free cash flow generated and net of the dividends paid to minority shareholders and the fair value of derivatives).  

Commercial activity was positive for all divisions too, both in terms of the total value of the contracts acquired and in terms of mix, with 31% of the value of the new contracts acquired during the year being for e-mobility. Significant new contracts were awarded in North America, Europe and China.

The Group has an ambitious plan of development for the Air & Cooling sector particularly in thermal management products destined for the Electric Vehicle sector. It is also engaged in a turn-around plan for the Suspensions division after the loss of profitability caused by the increased production costs, which have not been entirely compensated by the price adjustments and the action taken over the last three years to rationalize the production structure.

The Board of Directors of Sogefi S.p.A. has voted to propose that the Annual General Meeting of the Shareholders, to be held on 22 April 2024, distribute a dividend for a total amount of € 23.7 million. CIR’s share of the dividend entitlement amounts to € 13.4 million.

Financial Management

In 2023, global stock and bond markets experienced a strong recovery after the extremely negative performance of 2022 and bond yields turned positive again following the various hikes in interest rates implemented by the central banks to combat inflation.

Management of the financial assets of the parent company and the financial subsidiaries gave a return of 1.4%, versus -1.3% in 2022. More specifically, liquid assets (bonds, hedge funds, shares) gave a return of +3.7%, while the remaining part of the portfolio (Private Equity and minority shareholdings) reported a correction partly due to the evolution of the euro/dollar exchange rate.

ESG plans and performance

In 2023 the CIR group achieved the objectives set out in the sustainability plans of the Company and its subsidiaries.

Progress was reported on the front of the sustainability of business and innovation with KOS continuing to roll out its programme aimed at ensuring a permanent improvement in quality care and service, and with Sogefi increasing the part of its sales and R&D investment relating to e-mobility products.

Regarding the eco-compatibility of processes, both operating companies improved their performance, reducing waste and/or increasing recycling of the same, and Sogefi also further reduced its energy intensity and increased its use of renewable energy.

On the subject of human resources management, there was an increase in the number of hours destined for the training of personnel and action continued to guarantee that equal treatment is monitored in all countries where there are operations. There was also an increase in the number of initiatives for fostering social involvement at local level.

Lastly, ESG criteria were introduced in the management of the financial assets of the parent company CIR.

Significant events that have occurred since 31 December 2023

On February 23 2024 the subsidiary Sogefi signed a put-option agreement with the US Investment Fund Pacific Avenue, on the strength of which two acquisition vehicles that refer back to the aforementioned fund have unilaterally, unconditionally and irrevocably undertaken to buy, in the event of Sogefi exercising the put option, the entire share capital of Sogefi Filtration S.A. and Sogefi USA Inc., i.e. the Filtration business unit consolidation perimeter. Exercise of the put option by Sogefi and the signing of the purchase and sale agreement relating to the described sale of the Filtration division may take place only once the consultation procedure with the trade union representatives, required by French law, has taken place. Completion of the deal is in any case subject to obtaining FDI (Foreign Direct Investment) authorization in Slovenia and antitrust authorization in Morocco. The transaction is expected to complete by the end of August 2024.

The price of the Transaction is based on an enterprise value of € 374 million, corresponding to an equity value, to be settled entirely in cash, estimated today at approximately € 330 million, which would be set at the closing according to a bridge to equity calculation, which takes into account adjustments based on Working Capital and Net Financial Position, in line with the standards for this kind of transaction. Based on the estimated Equity Value, the deal would give rise to a capital gain which, based on the balance sheet values at 31 December 2023, would amount to approximately € 130 million.

The strategic rationale of the Transaction for Sogefi is as follows: above all, the transaction makes it possible to realize the value of the filtration division in a phase in which the latter has achieved unprecedented results, following a programme that has involved the disposal of unprofitable assets, commercial development and increased profitability, in a market environment favourable for the Aftermarket channel. The transaction also reduces the powertrain component in the group’s asset portfolio, making Sogefi less exposed to risks relating to the transition to e-mobility. It also makes it possible to reduce the complexity and diversification of the group and to focus on the two high-potential sectors of Suspensions, currently in a turnaround phase, and Air and Cooling, a business that has reported positive results that are continuing to improve, with a view to achieving ambitious growth. Lastly, the group will have a very solid financial and capital position which will enable it to make further investments in the development of the EV market, investments that have already been identified and are currently in progress, as it will be able to count on at least part of the financial resources resulting from the envisaged sale.

Subject to exercise of the put option by Sogefi and completion of the Transaction, the proceeds of the sale, estimated at approximately € 330 million, may for at least 50% be used to reduce debt while, for the remaining part, the Board of Directors of Sogefi will decide whether to propose that it be distributed.

Outlook for the year

As far as KOS is concerned, in an environment in which the public health and operational problems caused by the pandemic are coming to an end, it is expected that in 2024 the full operating levels that have already been restored should be maintained for the Rehabilitation and Acute sectors, whereas occupancy should continue to increase for the NHs in Italy and Germany, reaching regime levels by the end of 2024, with the exception of facilities currently being ramped up. Because of the inflationary dynamics present in the sector and in the general economy over the last three years, for a return to normal profitability it will be necessary to gradually increase tariffs, especially in Germany. In the absence of any facts or circumstances that could make the climate more complex than it is at present, KOS’s operating results for 2024 should show an improvement on those of last year.

As for the automotive market, in which Sogefi operates, visibility as to the trend for 2024 remains limited due to uncertainty regarding the macroeconomic and geopolitical environment. S&P Global (IHS) predicts that, after the growth recorded in 2023, world car production will remain substantially stable (-0.5%), with Europe declining by 1.9%, China in line with 2023 and marginal growth in the other geographical areas.

As far as commodity and energy prices are concerned, the early months of 2024 have confirmed a certain stability, already seen in the second half of 2023, but prices remain exposed to the risk of volatility caused by geopolitical tensions. The pressure of inflation on labour costs also remains a source of tension in certain geographical areas.

In this scenario Sogefi is constantly monitoring performance in the various geographical areas and seeking fair agreements on selling prices with all its customers.  

In the absence of any factors that could cause the deterioration of the macroeconomic scenario compared to today, for 2024 it is expected that there will be low single-digit growth in revenues, higher than that forecast for the automotive market, and operating profitability, excluding non-recurring charges, at least in line with that reported for the year 2023. In the event of the deconsolidation of the Filtration division from the perimeter of the ongoing consolidated businesses (Suspensions and Air & Cooling), the same evolution of revenues as that described above is to be expected, with an increase in operating profitability and a positive net result.

As regards the management of the holding company’s financial assets, given the continuing uncertainty linked to the geopolitical, macroeconomic and financial scenarios, conditions of high volatility are expected to continue.

Dividend proposal

The Board of Directors has decided to propose to the Annual General Meeting of the Shareholders that no dividend be distributed, in the belief that in current market conditions continuing to implement the policy of buying back the Company’s own shares, as has been the case in recent years, is the most effective way of distributing to the Shareholders.

Annual General Meeting of the Shareholders

The Board of Directors has authorized the Chairman to proceed, within the timeframes established in the rules applicable, to call the Annual General Meeting of the Shareholders, in an ordinary and an extraordinary session, at a single calling, for 29 April 2024, establishing that the following proposals, among others, will be submitted:

  • to approve the Financial Statements for the year of CIR S.pA. – Compagnie Industriali Riunite, accompanied by the Report of the Board of Directors, the Report of the Board of Statutory Auditors and the Report of the firm of legal auditors;  
  • after first revoking the existing authorization (for the part not utilized), to renew the authorization of the Board of Directors, for a period of 18 months, to buy back a maximum of 208,000,000 own shares, equal to 18.79% of the share capital, and 19.86% of the share capital after cancellation of 60,000,000 shares as per below, it being understood that, including in the calculation the own shares already owned even through subsidiaries, the number of the shares bought back (and not cancelled) must not in any case exceed 20% of CIR’s share capital.
  • To cancel 60,000,000 CIR shares, without a nominal value, held by the Company, without a reduction in the share capital, and to cancel any CIR own shares that may be bought back on the strength of the AGM authorization granted in the ordinary session, without a reduction in the share capital, up to a maximum overall number of CIR shares no greater than 208,000,000 shares, however with an exception made for the own shares which, together with any own shares already held in the Company’s portfolio, may be necessary from time to time to cover commitments resulting from outstanding stock grant plans;
  • to approve a Stock Grant Plan for 2024 aimed at employees of the company and its subsidiaries, in the terms that will be defined by the Board of Directors and disclosed to the market in good time for legal obligations;
  • to appoint an Alternate Auditor, to make up the minimum number of alternate Auditors established in the Company Bylaws, followingthe vacancy of a position.

Disclosure regarding the buyback of shares

Milan, 4 March 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 26 February and 1st March 2024 it bought back, on the Euronext Milan market, 2,657,665 shares at an average unitary price of € 0.5342, for a total amount of € 1,419,659.87.As of today, CIR S.p.A. is holding a total of 66,434,485 treasury shares, equal to 6% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Disclosure regarding the buyback of shares

Milan, 26 February 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 19 and 23 February 2024 it bought back, on the Euronext Milan market, 1,133,795 shares at an average unitary price of € 0.4591, for a total amount of € 520,569.35. As of today, CIR S.p.A. is holding a total of 63,776,820 treasury shares, equal to 5.76% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Sogefi: put option agreement for the sale of the Filtration BU

Milan, 23 February 2024 – Sogefi, in the context of a process aimed at the valorization of its Filtration Business Unit, entered into a put option agreement with the US private equity fund Pacific Avenue Capital Partners, pursuant to which Carta Acquisition France S.A.S. (“Carta France”) and Carta Acquisition U.S., Inc. (“Carta US”), the latter corporate vehicles incorporated by the fund, have unilaterally, unconditionally and irrevocably committed to acquire – upon the exercise of the put option by Sogefi – the entire share capital of, respectively, Sogefi Filtration S.A. and Sogefi USA Inc. The Filtration Business Unit will operate under the name Purflux Group in case of closing of the transaction.

Under the terms of the put option agreement, Sogefi has granted the acquiring entities, Carta US and Carta France a 6-month exclusivity period to complete the transaction.

The exercise of the put option by Sogefi and the signing of the sale and purchase agreement relating to the potential sale of the Filtration Business Unit (“Transaction”) can only take place once the works council consultation process, required by French law, has been completed.

The Transaction is in any case subject to the obtainment of the clearance from the Slovenian FDI (Foreign Direct Investment) authority and the clearance from the Moroccan antitrust authority.

Subject to the exercise of the put option by Sogefi, the closing of the Transaction is expected to occur within six months from today’s date.

The exercise of the put option by Sogefi will be communicated in accordance with applicable law.

The consideration for the Transaction is based on an enterprise value of Euro 374 million, corresponding to an Equity Value, to be settled entirely in cash, currently estimated at approximately Euro 330 million, which would be determined at closing on the basis of a bridge to equity, which takes into account adjustments based on the Working Capital and the Net Financial Position, as customary for this type of transactions.

The enterprise value implies a multiple of 0.65 times 2023 revenues (compared to 0.41 for the average of mid cap peers and 0.31 for Sogefi) and 3.6 times 2023 EBITDA (in line with the average multiples of mid cap peers and significantly higher than Sogefi’s spot multiple estimated at 2.3 EBITDA), year in which the Filtration Business Unit achieved a record EBITDA result, +24% compared to 2022.

Therefore, the consideration envisaged for the Transaction implies a substantial generation of value compared to the current stock market value.

Based on the estimated Equity Value, the Transaction would result in a capital gain of approximately Euro 130 million vs. the balance sheet value in the financial statements as of December 31, 2023.

For Sogefi, the strategic rationale for the Transaction is clear and articulated.

First of all, the Transaction allows to realize the value of Filtration in a phase when the unithas achieved unprecedented results, following a program that has involved the disposal of unprofitable activities, commercial development and an increase in profitability, in a favorable market context for the Aftermarket division.

The Transaction entails the reduction of the powertrain component in the group’s business portfolio, making Sogefi less exposed to the risks associated with the transition to E-mobility.

The Transaction also allows the reduction of the complexity and diversification of the group and to focus on two high-potential sectors, namely Suspension, which is undergoing a turnaround, and Air&Cooling, an activity that has been recording positive and ever-increasing results and an ambitious growth path.

Finally, the group will have a very solid financial position, which will allow greater investments for development,already identified and in progress, in the EV market, by leveraging on at least part of the financial resources deriving from the potential sale.

Subject to the exercise of the put option by Sogefi and completion of the Transaction, at least 50% of the proceeds from the sale, estimated in approximately Euro 330 million, will be allocated to the reduction of the group’s indebtedness (Euro 266.1 million as of December 31, 2023, Euro 200.7 million without considering IFRS 16 liabilities) and, for the remaining portion, the Board of Directors will evaluate to propose its distribution.

Sogefi’s Filtration Business Unit produces a full range of filters for the Original Equipment (OE), Original Equipment Spares (OES) markets, and the Independent Aftermarket (IAM). Specifically, the Aftermarket division serves all channels of the independent automotive replacement markets, also through the sale of products branded by the Group: CoopersFiaam, Tecnocar, FRAM® and Purflux for light vehicles, SogefiPro dedicated to commercial vehicle applications.

The Business Unit, headquartered in Paris, is a major player in the sector, with operations in Europe, the United States and India, has 11 production sites, and in 2023 recorded revenues of Euro 573.6 million (35% of the Sogefi group’s turnover).

Pacific Avenue Capital Partners is a Los Angeles, CA-based private equity firm focused on corporate divestitures, carve-outs and other complex situations in the middle market.

In relation to the Transaction, the Company’s was advised by Houlihan Lockey and Clifford Chance, BNP Paribas provided the fairness opinion.

Sogefi: results higher in 2023

RESULTS HIGHER IN 2023

Revenues: +5.5% to € 1,627.9 million, (+9.1% at constant exchange rates)

EBIT: +49.2% to € 105.2 million

Net income: +95.4% to € 57.8 million (€ 29.6 million in 2022)

Free Cash Flow positive for € 37.9 million (€ 29.3 million in 2022)

Debt before IFRS 16 reduced to € 200.7 million (€ 224.7 million at end of December 2022)

Milan, 23 February 2024 – 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 2023 presented by Chief Executive Officer Frédéric Sipahi.

Sogefi, a company of the CIR Group, is one of the main global producers of automotive components in the sectors of Air and Cooling, Suspensions and Filtration.

PERFORMANCE OF THE MARKET

In the fourth quarter of 2023 world car production rose by 9.1% compared to the fourth quarter of 2022, confirming the positive trend recorded in the first nine months of the year, with growth in all geographical areas except for Mercosur (-3%).

For the whole of 2023 world vehicle production thus reported growth of 9.4% compared to 2022, with a return to the volumes of 2019 before the pandemic crisis (+1.2%).

Performance in 2023 was positive in all geographical areas: +12.5% in Europe, +9.5% in NAFTA, +9.4% in China, +6.3% in India and +3.5% in Mercosur.

However, compared to 2019, while China and India experienced strong growth (+17.2% and +29.5% respectively), production volumes still remained lower in Europe (-13%), in Mercosur (-9.6%) and in NAFTA (-4.1%).

For the year 2024, S&P Global (IHS) forecasts that world production should remain substantially unchanged (-0.5%) from 2023.

KEY FIGURES OF SOGEFI’S PERFORMANCE IN 2023

The consolidated revenues of the Group were up by 5.5% on 2022 and by 9.1% at constant exchange rates, in line with the increased production volumes (+6.1%) and selling prices (+2.8%).

Results were significantly better than those of 2022:

  • EBITDA, totalling € 221.4 million, rose by +13.5%, with an EBITDA margin of 16.6% thanks to the increase in volumes and the greater contribution margin;
  • EBIT, which came in at € 105.2 million, was up by +49.2%, with an EBIT margin of 6.5% of sales, versus 4.6% in 2022;
  • Net income was € 57.8 million (+95.4% versus € 29.6 million in 2022);
  • Free cash flow was positive for € 37.9 million (€ 29.3 million in 2022);
  • Net debt (before IFRS16) declined to € 200.7 million at 31 December 2023 from € 224.3 million at 31 December 2022.

Commercial activity was positive too, both in terms of the total value of contracts acquired and in terms of mix, with 31% of the value of the new contracts being for E-mobility. Significant new contracts were awarded inNorth America, Europe and China.

The Suspensions division acquired new business in the Chinese market with local operators, in particular signing a contract for the supply of stabilizer bars to an innovative player aspiring to become one of the main producers in the electric car market in China. The division also obtained various contracts in Europe, particularly for the supply of stabilizer bars for top-of-the-range electric SUVs and for the supply of coil springs for E-mobility platforms. The contracts for E-mobility account for 45% of the value of the new contracts obtained during the year.

The Air and Cooling division has been continuing to develop in China, with the acquisition of various orders from BYD including one for the supply of air manifolds for a Plug-in-Hybrid platform and a contract for the supply of oil manifolds used in electric cars to lubricate the inside of the gearbox. These parts, which were traditionally made of metal, are offered by Sogefi in plastic which makes it possible to reduce weight and optimize design and cost. Important contracts were also signed in North America and these will enable the Group to increase its market share in this area, especially for the supply of thermal management and cooling products for E-mobility platforms.In Europe the main orders were for thermostat units for E-mobility and intake manifolds for thermal management. 27% of the value of the new contracts obtained by the Air and Cooling division in 2023 was for components for E-mobility platforms.

The Filtration division reached important agreements in Europe for both the OEM (Original Equipment Manufacturer) and the IAM (Independent After Market) channels: it obtained new contracts for the supply of filters for truck brake circuits and signed a three-year exclusivity agreement with one of the principal market leaders in the distribution of automotive components through the Aftermarket channel. Development has also been continuing in India with a gradual increase in market share. Lastly, the company obtained new contracts for the supply of air-purification filters representing around 15% of the total value.

RESULTS FOR 2023

Revenues for 2023 came in at € 1,627.9 million, posting a rise of 5.5% at current exchange rates and of 9.1% at constant exchange rates compared to 2022.

The growth in revenues reflects the very positive performance reported in Europe (+10%), in North America (+ 6.0% and +10.5% at constant exchange rates) and in India (+7.1% and +15.6% at constant exchange rates); in the remaining areas volumes were substantially stable but revenues were negatively affected by exchange rate movements (- 7.1% in China, +0.5% at constant exchange rates, and -21.7% in South America, -2.2% at constant exchange rates net of inflation in Argentina).

Suspensions reported a 4.8% increase in revenues (+9.5% at constant exchange rates) with significant growth particularly in India and Europe.

Air and Cooling recorded a rise of 5.0% (+8.9% at constant exchange rates), with particularly significant growth in NAFTA (+12.4% at constant exchange rates).

Filtration reported a rise in revenues of 7.1% (+9.3% at constant exchange rates), with strong growth in the Aftermarket channel (+10.5%) and in India.

EBITDA came in at € 221.4 million, posting growth of 13.5% on 2022 (€ 195.1 million). The EBITDA marginrose from 12.6% in 2022 to 13.6% in 2023.

The contribution margin was 12.8% greater than in 2022, thanks to the higher volumes and to the profit margin (ratio in percentage terms of contribution margin to revenues) which rose from 27.4% in 2022 to 29.3% in 2023.

The impact of fixed costs on revenues was 14.6%, substantially unchanged from 2022 (14.3%).

Other charges, which mainly include exchange rate differences, made a negative contribution to EBITDA of € 10.4 million versus a positive contribution of € 0.8 million in 2022.   

EBIT came to € 105.2 million and was up by 49.2% from € 70.5 million in 2022. The ratio to revenues rose from 4.6% in 2022 to 6.5% in 2023. 

The Group reported consolidated net income from operating activities of € 67.7 million, versus € 32.6 million in the previous year.

In October 2023 the Suspensions business in Mexico was sold, giving rise to a net loss for “discontinued operations and operations held for sale” of € 6.7 million (€ -1.4 million in 2022) which includes the net result of operations for the period until October and the capital loss posted.

The group reported net income of € 57.8 million, up from € 29.6 million in the previous year.

Free Cash Flow was a positive € 37.9 million, higher than in 2022 (€ 29.3 million).

At 31 December 2023 shareholders’ equity, excluding minority interests, stood at € 272.9 million, compared to € 230.7 million at 31 December 2022. The increase reflects the net result for the year, the exchange rate differences (negative) from currency conversion, the fair value of the instruments hedging cash flows as well as other changes.

Net financial debt before IFRS16 totalled € 200.7 million at 31 December 2023, down from € 224.3 million at 31 December 2022. Including financial payables for rights of use, in accordance with IFRS 16, the net financial debt at 31 December 2023 amounted to € 266.1 million, versus € 294.9 million at 31 December 2022.

At 31 December 2023 the Group had committed credit lines in excess of its requirements of € 242 million.

KEY RESULTS OF FOURTH QUARTER 2023

In the fourth quarter of 2023, Sogefi reported revenues of € 375.3 million, down by 2.4% on the same period of 2022; at constant exchange rates the group reported growth of 4.1% thanks to the higher production volumes (+2.9%) and to the adjustment of selling prices.

EBITDA came to € 47.5 million, 12.7% of revenues, compared to € 43.5 million (11.3%) in the fourth quarter of 2022, thanks to the higher contribution margin which rose from 26.5% to 31.1%.

EBIT was a positive € 16.0 million versus € 6.6 million in fourth quarter 2022.

The consolidated net result for the fourth quarter of 2023 was a positive € 12 million after a negative result of € 3.4 million in the same period of the previous year.

SIGNIFICANT EVENTS HAVE TAKEN PLACE SINCE YEAR END

A put option agreement in Sogefi’s favour has been signed for the sale of the Filtration division to the US investment fund Pacific Avenue

Today the company has signed a put option agreement with the US investment fund Pacific Avenue, pursuant to which Carta Acquisition France S.A.S. (“Carta France”) and Carta Acquisition U.S., Inc. (“Carta US”), acquisition vehicles that refer to the fund, have unilaterally, unconditionally and irrevocably undertaken to buy – in the event that Sogefi should exercise the put option – the entire share capital of Sogefi Filtration S.A. and Sogefi USA Inc, respectively. The filtration division will operate under the name of Purflux Group in the event of the transaction being completed.

As per the terms of the put option agreement, Sogefi has granted Carta US and Carta France a six-month period of exclusivity to complete the transaction.

Exercise of the put option by Sogefi and the signing of the purchase and sale agreement relating to the described sale of the Filtration division (the “Transaction”) may take place only once the consultation procedure with the trade union representatives, required by French law, has taken place.

The deal is in any case subject to obtaining FDI (Foreign Direct Investment) authorization in Slovenia and antitrust authorization in Morocco.

Subject to exercise of the put option by Sogefi, the Transaction should be finalized within six months of today’s date.

Exercise of the put option by Sogefi will be disclosed in compliance with applicable laws and regulations.

For the conditions of the Transaction see the press release issued at the same time as this one.   

OUTLOOK FOR THE YEAR

Visibility as to the trend of the automotive market in 2024 remains low due to uncertainty as to the evolution of the macroeconomic and geopolitical scenarios. S&P Global (IHS) expects that, after the growth reported in 2023, world car production will remain substantially stable (-0.5%), with Europe declining by 1.9%, China in line with 2023 and higher margins in the other geographical areas.

As far as commodity and energy prices are concerned, the early months of 2024 have confirmed a certain stability, already seen in the second half of 2023, but prices remain exposed to the risk of volatility caused by geopolitical tensions. The pressure of inflation on labour costs also remains a source of tension in certain geographical areas.  

In this scenario the Group is constantly monitoring performance in the various geographical areas and seeking fair agreements with all of its customers with regard to selling prices.

In the absence of any factors causing the deterioration of the macroeconomic scenario compared to today, for 2024 it is expected – for all of the three divisions currently comprising the group – that there will be single-digit revenue growth, higher than that forecast for the automotive market, and operating profitability, excluding non-recurring charges, at least in line with that reported for the year 2023.

In the event of deconsolidation of the Filtration division from the perimeter of the consolidated businesses (Suspensions and Air & Cooling), the same evolution of revenues as that described above is to be expected, with an increase in operating profitability and a positive net result.

DIVIDEND PROPOSAL

In view of the result for the year and the financial solidity of the Group, the Board of Directors will propose that the Ordinary General Meeting of the Shareholders, convened at the first call for 22 April 2024, allocate the net result resulting from the Financial Statements for the year ended 31 December 2023, totalling Euro 6,735,288.96, to a dividend distribution of Euro 0.20 for each of the shares in circulation, giving a total amount of Euro 23,730,484, of which Euro 16,995,195.04 will be withdrawn from the “Retained Earnings Reserve” while the amount of Euro 6,735,288.96 will be the net income for the year 2023.

The dividend will be paid out as from 8 May 2024 after coupon detachment on 6 May 2024 and record date on 7 May 2024.

ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

The Annual General Meeting of the Shareholders of Sogefi has been called for 22 April 2024 at the first call and for 23 April 2024 at the second call.

The full text of the proposed resolutions and the reports of the Board of Directors on the items on the Agenda, together with all the relevant documentation, will be available, within the time frames required by law, at the registered office, on the authorized storage mechanism eMarket Storage (www.emarketstorage.com) and on the Company’s website  www.sogefigroup.com (section Shareholders/Shareholder Meetings).

Disclosure regarding the buyback of shares

Milan, 19 February 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 12 and 16 February 2024 it bought back, on the Euronext Milan market, 827,888 shares at an average unitary price of € 0.4437, for a total amount of € 367,370.89. As of today, CIR S.p.A. is holding a total of 62,643,025 treasury shares, equal to 5.66% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Disclosure regarding the buyback of shares

Milan, 5 February 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 29 January and 2 February 2024 it bought back, on the Euronext Milan market, 449,350 shares at an average unitary price of € 0.4251, for a total amount of € 191,010.34. As of today, CIR S.p.A. is holding a total of 61,231,445 treasury shares, equal to 5.53% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download .pdf

Disclosure regarding the buyback of shares

Milan, 29 January 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 22 and 26 January 2024 it bought back, on the Euronext Milan market, 237,807 shares at an average unitary price of € 0.4251, for a total amount of € 101,095.08. As of today, CIR S.p.A. is holding a total of 60,782,095 treasury shares, equal to 5.49% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

Calendar of events for 2024

Milan, 25 January 2024 – CIR S.p.A. announces that the Company’s calendar of events for 2024 will be as follows:

Monday11.03.202410,00 amBoard of Directors Meeting (Pro-forma Financial Report for 2023)
Monday29.04.202410,00 amAnnual General Meeting of the Shareholders (Approval of Financial Report for 2023)
Monday29.07.202410,00 amBoard of Directors Meeting (Half-year Financial Report for 2024)

Download PDF

CIR: acquisition of the “SME” status

Milan, 23 January 2024 – CIR S.p.A. – Compagnie Industriali Riunite (“CIR”) announces that, as its average market capitalization was below the threshold of 500 million euros during 2023, as of 1 January 2024 it will qualify as a Small and Medium Enterprise (“SME”) pursuant to Article 1, paragraph 1, letter w-quater.1 of Legislative Decree No. 58 of February 24, 1998 (“TUF”) and Article 2-ter, paragraph 2, of the regulations adopted by Consob Resolution No. 11971 of May 14, 1999 (“Issuers’ Regulations”).

As a result, for the purposes of disclosure requirements for significant shareholdings, pursuant to Article 120, paragraph 2, of the TUF, the relevant threshold of 5 percent of capital applies (to be understood as referring to the total number of voting rights in view of the voting surcharge provided for in CIR’s bylaws).

Disclosure regarding the buyback of shares

Milan, 15 January 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 8 and 12 January 2024 it bought back, on the Euronext Milan market, 344,746 shares at an average unitary price of € 0.4255, for a total amount of € 146,689.01. As of today, CIR S.p.A. is holding a total of 60,022,499 treasury shares, equal to 5.42% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

Disclosure regarding the buyback of shares

Milan, 8 January 2024 – Following the resolution of the Board of Directors on 28 April 2023 on the continuation of the share buyback plan launched on 16 March 2022, in accordance with and in execution of the authorization granted by the Shareholders’ Meeting on 28 April 2023, CIR S.p.A. announces that between 2 and 5 January 2024 it bought back, on the Euronext Milan market, 375,000 shares at an average unitary price of € 0.428, for a total amount of € 160,517.50. As of today, CIR S.p.A. is holding a total of 59,677,753 treasury shares, equal to 5.39% of its share capital. The subsidiaries of CIR do not own any shares in the Company.

Download pdf

Update of the key information contained in the FDB shareholders’ agreement

Milan, 5 January 2024 – Notice is hereby given that the key information document drafted pursuant to Article 130 of Consob Regulation 11971/1999 (“Rules for Issuers”) on the shareholders’ agreement concerning shares in Fratelli De Benedetti S.p.A. (“FDB”) and CIR S.p.A. – Compagnie Industriali Riunite (“CIR”) (the “FDB SHA“) has been updated as of 5 January 2024 for the purpose of taking into account changes concerning the financial instruments of CIR held directly and indirectly by the parties to the FDB SHA.

The key information document on the provisions contained in the FDB SHA has been published, pursuant to the above-mentioned Art. 130 of the Rules for Issuers, on CIR’s website at www.cirgroup.it/en/shareholders-agreements/.

Download .pdf