Revenues at € 760.0 million, up by 12.3% on first half 2021
EBITDA at € 99.8 million, equal to 13.2% of revenues
Net income at € 20.8 million, in line with first half 2021 (€ 21.4 million)
Free Cash Flow positive for
€ 41.2 million,
higher than in first half
2021 (€ 33.1 million)
Debt lower at € 216.4 million
(€ 261.4 million at 30.6.2021)
Raffaella Pallavicini
appointed director
Milan, 22 July 2022 – The Board of Directors of Sogefi S.p.A., which met today under the
chairmanship of Monica Mondardini,
has approved the Semi-Annual Financial
Report of the group as of 30 June 2022, as presented by Chief
Executive Frédéric Sipahi.
Sogefi, a
company of the CIR Group, is one of the main automotive component producers worldwide
in three sectors: Air and Cooling, Filtration and Suspensions.
PERFORMANCE
OF THE MARKET
The first half of 2022 saw the difficulty in sourcing specific
components and raw materials continue (even causing the temporary closure of
certain of the principal car manufacturers’ production facilities worldwide) while
commodity prices continued to rise. As from March 2022 the effects of the
conflict between Russia and Ukraine and of the economic and financial sanctions
imposed on Russia began to be felt, particularly the decline in world trade and
further rises in the prices of energy and raw materials.
Against this backdrop, world car production fell by 1.8% in first half
2022 compared to the first half of 2021.
Europe reported the most critical performance: -7.6% compared
to first half 2021; in China and Mercosur production in the first half was
broadly in line with that of the first half of 2021 (+0.7% and -0.6% respectively),
while NAFTA and India experienced a recovery (+4.7% and +16.4% respectively).
The trend of the market remains uncertain; S&P
Global (IHS) expects to see growth in world production of 4.7% for the whole
year compared to 2021, with +11.5% in the second half compared to second half
2021, after the -1.8% of the first half.
SUMMARY
OF SOGEFI’S PERFORMANCE IN THE FIRST HALF OF 2022
The Group’s consolidated revenues grew by 12.3% compared to the first half of 2021:
production volumes were substantially in line with 2021 (a positive performance
compared to the market’s -1.8%) and the rise in revenues was due to the evolution
of exchange rates and to the adjustment of selling prices to the higher costs
of raw materials.
Worthy of note
is the positive performance of the After Market segment, which gained market
share thanks to its ability to respond adequately to client requirements,
despite difficulties in the logistics chain.
The economic results were positive:
- Net
income came in at € 20.8 million (€ 21.4 million in 2021);
- Free cash
flowwas a positive € 41.2 million (€ 33.1 million in
2021);
- Net debt (before IFRS 16) declined to € 216.4 million at 30 June 2022, versus
€ 258.2 million at 31 December 2021.
From the product innovation viewpoint, 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. The
inauguration took place of the new European
E-Mobility
Tech Center in Marckolsheim, Eastern France, which is devoted to the
research and development of new E-mobility products and is equipped
with the largest 3D printer in Europe.
The first half
was also positive for commercial activity:
- The Filtration division was awarded
various contracts for the supply of oil filters and air purification filters;
- The Suspensions division signed contracts
in Europe for the supply of coil springs and stabilizer bars and also won a
contract for the supply of stabilizer bars to an important Chinese company that
is entering the electric vehicle market;
- The Air and Cooling division signed some
important contracts in NAFTA and Europe for the supply of thermal management products and cooling
plates for electric mobility and the most important contract ever
obtained with a producer of electric commercial vehicles and buses for the
production of cooling plates in aluminium soldered using laser technology to
regulate the temperature of the battery, integrated cooling modules and regulation
and vent valves for the battery.
CONSOLIDATED
RESULTS FOR THE FIRST HALF
The revenues of
first half 2022 came in at € 756.0 million and were up by 12.3% on those of the
same period of 2021.
Production volumes were substantially in line with those of the first
half of 2021 and the Group outperformed the market (which declined by 1.8%
globally and by 7.6% in Europe).
The trend of exchange rates, particularly the weakness
of the euro and the consequent strengthening of the US and Canadian dollars and
the Chinese renminbi, led to a rise in consolidated revenues of 2.9 percentage
points. The remaining increase in revenues reflects the adjustment of selling
prices across the different product lines to factor in the evolution of the
cost of raw materials and the components used.
Performance of revenues by
geographical area
The Suspensions business
unit reported a rise in revenues of 14.1% (+13.2% at constant exchange rates), with
significant growth rates particularly in South America.
The Filtration
business unit reported a rise in revenues of 15.3% (+12% at constant exchange
rates), thanks to the good performance of the After Market channel in Europe
and of business in North America and India.
The Air and Cooling
business unit reported a rise in revenues of 6.7% and of 1.1% at constant
exchange rates due to the negative performance of the Chinese market and
particularly to the lockdowns in some areas in April and May when the pandemic flared
up again.
EBITDA came to € 99.8 million, compared to the first half 2021 (€ 108.3 million), recurring EBITDA is stable but some non-recurring factors weighed on the result: particularly higher restructuring costs (€ 4.1 million versus € 1.3 million in first half 2021) and lower non-operating income (€ 3.9 million versus € 9.4 million at 30 June 2021).
EBIT came in
at € 40.4 million versus € 47.3 million in 2021.
The Group reported net income of € 20.8 million, in line with that of the first half
of 2021, which was € 21.4 million.
Free Cash Flow was a positive € 41.2
million, compared to € 33.1 million in first half 2021, thanks to the positive
results and to the management of working capital, the change in which was more
favourable in this period compared to that of the first half of 2021, also due
to greater use of factoring.
Net debt before IFRS 16 stood at € 216.4 million at 30 June 2022, lower than at
the end of 2021 (€ 258.2 million) and at 30 June 2021 (€ 261.4 million). Including
the financial payables for rights of use as per IFRS 16, the net financial debt
of the Group at 30 June 2022 amounted to € 285.2 million, down from € 327.6 million
at 31 December 2021.
At 30 June 2022 the Group had committed credit lines in excess of its
requirements for € 302.0 million.
At 30 June 2022 shareholders’
equity, excluding minority interests, stood at € 230.3 million, up from €
187.7 million at 31 December 2021. The increase of € 42.6 million was due mainly
to the net income for the period (€ 20.8 million), to currency translation
differences and to actuarial gains on the valuation of pension funds.
SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE
SINCE 30 JUNE 2022
Since the close of
the first half of the year there have been no significant events that could
have an impact on the economic, patrimonial and financial information given in
this report.
IMPACT OF COVID-19 AND THE RUSSIAN-UKRAINIAN CONFLICT ON THE BUSINESS
In 2022, despite
the continuation of the pandemic crisis, the effects on the market in which the
Company operates have been less severe than those recorded in previous years,
as there has been no suspension of industrial or commercial activity except for
the lockdowns in certain areas of China in April and May.
However, operational
difficulties linked to personnel absences due to infection or contact have been
continuing in spite of the fact that Sogefi has maintained all the rules for
health and safety in the workplace aimed at reducing the risk of contagion:
social distancing, the use of individual protection and measures aimed at
limiting the presence of personnel in the workplace by having staff work from
home.
As for the direct
impact on Sogefi of the conflict between Russia and Ukraine, until March 2022
Sogefi had a commercial business in Russia and exported to Ukraine and Belarus;
the total revenues from these activities were not signficant as they accounted
for 0.7% of the Group’s revenues in 2021. The businesses in Russia, Ukraine and
Belarus were discontinued as from March 2022 and the Russian branch is in the
process of being wound up. As a result, in the first half of 2022 Sogefi
reported losses in value of the assets held in Russia for an amount of € 1.3 million,
while the direct impact on revenues and margins was minimal.
Sogefi, like all of
the automotive sector, is feeling the indirect effects of the war and
particularly the further hike in energy prices and commodities and the sourcing
problems.
Lastly, as a combined effect of the
pandemic crisis that is still ongoing and of the Russian-Ukrainian conflict ,
with a significant impact on important European customers for whom the Russian
market was important, demand in Europe has been weak.
OUTLOOK FOR THE YEAR
Visibility as to the performance of the automotive market in the coming months of 2022 is limited because of the uncertainty about the macroeconomic scenario and how the public health situation will evolve, the conflict between Russia and Ukraine, the availability and prices of raw materials, and the logistics of transportation and sourcing from Asian markets.
However, for 2022 S&P Global (IHS) is continuing to forecast 4.7% growth in world car production compared to 2021, with Europe at +10.7%, Nafta at +12.7%, South America at +6.9% and China remaining substantially stable (+0.4%).
As for commodity prices, the first six months of 2022 saw further price rises and it is difficult to make forecasts for the second half of the year. It should be noted that in the first half of 2022 Sogefi’s selling prices were adjusted to take into account the rise in the cost of raw materials recorded in 2021 and at the beginning of 2022. Given the further commodity and energy price rises since the start of the Russian-Ukrainian conflict, Sogefi’s management is committed to reaching fair agreements with all its customers, as it did in the first half of the year, in order to continue commercial relationships that are sustainable in the long term.
Assuming that there are no factors that could worsen the macroeconomic and production scenario (a significant tightening of the sanctions imposed on Russia, an extension of the conflict outside of Ukraine, shortages and higher prices of energy and raw materials than current ones, such that could compromise the sustainability of the supply chain, further lockdowns), Sogefi hereby confirms its objective of achieving an operating result for the whole year 2022, excluding non-recurring charges, that is substantially in line with the result of 2021.
RAFFAELLA
PALLAVICINI NEW DIRECTOR OF SOGEFI
The General Meeting of the shareholders of Sogefi S.p.A., held today in Milan in an ordinary session, approved an increase in the number of directors of Sogefi from eight to nine and appointed Ms Raffaella Pallavicini as director until the mandate of the current Board of Directors comes to an end, i.e. until the date on which the financial statements for the year 2024 are approved by the Annual General Meeting of the Shareholders. Ms Raffaella Pallavicini’s candidature was put forward by the majority shareholder CIR S.p.A. – Compagnie Industriali Riunite, holder of 55.64% of the voting rights. Her curriculum vitae is available on the website www.sogefigroup.com.
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