Sogefi: results for first nine months of 2024

Revenues: -4.6% at € 766.7 million

EBIT: significantly increased to € 38.0 million (€ 25.3 million in the first nine months of 2023)

Net profit from ongoing operations € 15.1m (€8.3m in the first nine months of 2023)

Net income reached €149.5 million, reflecting the impact of the sale of the Filtration business

Free Cash Flow generated from ongoing operations positive for € 19.4 million (- € 7.1 million in the first nine months of 2023)

Free cash flow from Filtration of € 321.8 million

Debt, excluding IFRS 16, decreased to €16.1 million from €192.7 million at the end of September 2023, following the payment of €136.7 million in dividends

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Milan, 25 October 2024 – The Board of Directors of Sogefi S.p.A., chaired by Monica Mondardini, convened today to approve the group’s interim management report as of 30 September 2024.

Sogefi, a company of the CIR Group, ranks among the world’s leading manufacturers of automotive components, specializing in the Air and Cooling and Suspensions sectors.

MARKET PERFORMANCE

In Q3 2024, world car production significantly slowed, declining by 4.6% compared to Q3 2023. The European market’s weakness, with a 5.2% drop already evident in the first half of the year, was exacerbated by substantial declines in the NAFTA region, down 4.7%, and in China, down 2.6%. These regions had previously shown stability or slight growth in the first half of the year.

Following the negative results in the third quarter, global car production declined by 1.6% in the first nine months of 2024 compared to the same period in 2023. During the nine-month period, China and India experienced growth of +2% and +4.5%, respectively, while Europe, NAFTA, and Mercosur experienced declines of -4.9%, -0.8%, and -0.6%, respectively.

S&P Global (IHS) expect a 2.2% decrease in global production for the entire year of 2024 in comparison to 2023. China and Mercosur are expected to maintain their current levels, while NAFTA is expected to experience a minor decline of -1.4%. Europe is expected to experience a 6.3% decline, which is slightly higher than the decline observed in the first nine months.

SOGEFI’S PERFORMANCE SUMMARY IN THE FIRST NINE MONTHS OF 2024:

The figures for Filtration are reported in conformance with IFRS 5, which means that only the net result of the business is recorded under the category of “profit from discontinued operations or held for sale” following the divestment in May 2024. The operating data discussed below pertain exclusively to the scope of ongoing operations, excluding Filtration. The net profit (loss) and free cash flow are presented for ongoing operations, discontinued operations, and total operations.

Revenue performance was affected by market volatility during the first nine months of 2024, leading to a 4.6% decline compared to the same period in 2023. Despite this, operations showed a significant increase in profitability:

  • With an EBITDA margin of 12.6%, EBITDA reached €96.7 million, marking a 14.6% increase compared to the same period in 2023;
  • EBIT increased from €25.3 million in the first nine month of 2023 to €38.0 million. The EBIT margin increased to 5.0% of revenues from 3.1% in the first none months of 2023;
  • Net income from continuing operations totalled €15.1 million, compared to €8.3 million in the first half of 2023;
  • Free cash flow from operations was positive at €19.4 million, compared to a cash absorption of €7.1 million in the first nine months of 2023.

As outlined in the Half-Yearly Financial Report, the discontinued operations reported the following outcomes:

  • net profit of €136.4 million, including the effects of the sale, such as the capital gain, tax charges and transaction costs;
  • free cash flow of € 321.8 million.

Overall, in the first nine months of 2024, the Group reported:

  • net profit of € 149.5 million (net of minority interests)
  • free cash flow of € 341.2 million

As of 30 September 2024, net debt stood at €62 million (€16.1 million excluding rights of use, in line with IFRS 16), marking a decrease from €266.1 million as of 31 December 2023. This reduction follows the distribution of an ordinary dividend of €23.7 million and an extraordinary dividend of €109.6 million to shareholders of Sogefi S.p.A.

RESULTS FOR THE FIRST NINE MONTHS OF 2024

For the first nine months of 2024, revenues reached €766.7 million, reflecting a decline of 4.6% (4.3% at constant exchange rates) in comparison to the same period in 2023.

Revenues by geographical area

The decline in total revenues was influenced by the performance observed in Europe (-7.9%) and North America (-4.4%), primarily due to the dynamics of the respective markets and key customers. In contrast, South America and China experienced revenue growth of +2.2% and +5.1% respectively, aligning with or surpassing market trends.

Revenues by business sector

Suspensions experienced a 6.2% decline in revenues, influenced by adverse trends in the European market, affecting both the passenger car and heavy-duty segments, with the latter seeing a 10.4% decrease in Europe. Conversely, notable growth was observed in China, with a 35.3% increase, and a strong performance was recorded in Mercosur.

Air and Cooling reported a 2.3% decline in revenues (1.5% at constant exchange rates), with Europe showing a positive performance of 3.8%, defying the overall market decline. However, revenues decreased in North America due to product mix issues and in China due to a local production drop by some customers.

EBITDA reached €96.7 million, reflecting a 14.7% increase compared to the first nine months of 2023 (€84.4 million), despite a slight decrease in volumes. The EBITDA margin rose from 10.5% in 2023 to 12.6% in the same period of 2024.

Despite the reduction in volumes, the positive trend in profitability is primarily due to an increase in the contribution margin, which accounted for 29.3% of sales, up from 26.9% in the first nine months of 2023; this increase reflects the gradual decline in raw material and energy costs.

In spite of the decrease in turnover, the fixed costs as a percentage of revenue remained at 15.7%, essentially unchanged from 2023 (15.6%). This was primarily due to the reduction of fixed costs from € 126.3 million to € 120.5 million.

EBIT totalled € 38.0 million, compared to € 25.3 million in first half 2023, and the ratio to revenue rose from 3.1% in the first half of 2023 to 5.0% in the same period of 2024. The increase reflects the improved profitability of the Suspension division and the good profitability of Air & Cooling, in an unfavourable market environment.

Financial expenses amounted to €11.7 million, reflecting a modest decrease compared to €12.4 million in the same period in 2023. Notably, cash financial expenses decreased from €12.2 million in 2023 to €10.7 million in the corresponding period of 2024. This reduction, occurring entirely since early June, is attributed to the decrease in debt following the sale of the Filtration business, despite the one-off charges associated with the early repayment of certain loans.

The tax expense totalled €11.2 million, compared to €4.6 million in the first half of 2023, reflecting the increased pre-tax profit.

The net income from operations was positive by € 15.1 million compared to € 8.3 million in the same period of the previous year.

The net result of ‘discontinued operations’ (Filtration) amounted to € 136.4 million, (€ 39.8 million in the first nine months of 2023). This amount includes the net income of the business as of the sale date on 31 May 2024, totalling €22.2 million, the capital gain from the sale of the Filtration business amounting to €124.5 million, the tax liabilities resulting from the transaction, and the expenses associated with completing the transaction.

The Group reported a total net profit of € 149.5 million, net of minority interests, compared to € 45.8 million in the first nine months of 2023.

 Free Cash Flow was positive by € 341.2 million and includes a free cash flow of € 321.8 million from Filtration and € 19.4 million generated by ongoing operations, a clear improvement compared to the first nine months of 2023 (negative FCF of € 7.1 million).

The Group distributed dividends totaling €136.7 million, comprising €23.7 million classified as the Company’s ordinary dividend, €109.6 million designated as the Company’s extraordinary dividend, and €3.4 million allocated as dividends from investees to third-party shareholders.

 As of 30 September 2024, equity, excluding non-controlling interests, amounted to €300.4 million, compared to €272.9 million as of 31 December.

Net debt at the end of September 2024 was € 62 million compared to net debt of € 266.1 million at the end of 2023.

Net debt excluding liabilities for right-of-use assets at 30 September 2024 amounted to € 16.1 million, compared to € 200.7 at 31 December 2023. 

At 30 September 2024, the Group had committed credit lines in excess of requirements of € 187 million.

SUMMARY OF RESULTS FOR Q3 2024

In Q3 2024, the Sogefi Group reported revenues of €242.6 million, marking a decline of 8.5% (-7.7% at constant exchange rates), reflecting the adverse market conditions experienced during the quarter.

At constant exchange rates, Air and Cooling declined by 6.0% and Suspension by 8.9%.

EBITDA reached €29.8 million, down from €32.0 million in Q3 2023, while the EBITDA margin remained stable at 12%. Excluding restructuring costs and other non-operating expenses, which totaled €5 million in Q3 2024 compared to €0.7 million in 2023, EBITDA for Q3 2024 would be €34.8 million, up from €32.7 million in the same period of 2023.

The contribution margin of 30.1% represents a significant improvement from the previous figure of 28.4% in Q3 2023. Furthermore, the fixed cost ratio was maintained at 15.7%, a decrease from 16.1% in Q3 2023, despite the decrease in turnover, as a result of the 10.8% decrease in fixed costs. 

EBIT was positive at €10.2 million, compared to €11.5 million in Q3 2023. Excluding non-recurring charges, EBIT was €15.2 million, up from €12.2m in 2023.

Net income from operations totalled € 4.3 million, compared to € 4.7 million in third quarter 2023.

The consolidated net result t for the third quarter of 2024 was €3.7 million, down from €14.4 million in the same period of the previous year, which included a net result from ‘discontinued operations’ of € 10.5 million).

SIGNIFICANT EVENTS AFTER 30 SEPTEMBER 2024

No significant events that occurred after 30 September 2024, have the potential to affect the economic and financial information that is being presented.

BUSINESS OUTLOOK

Following the negative data from the third quarter, the outlook for the automotive market remains uncertain in the coming months. According to S&P Global (IHS), global car production may decrease by 2.2%  in 2024 following the growth observed in 2023. Europe is expected to experience a 6.3% decline, NAFTA is expected to experience a 1.4% decline, while China and India are expected to experience modest growth.

In terms of commodity and energy prices, the initial months of 2024 have confirmed a degree of stability that was already evident in the latter half of 2023. However, volatility risks are still present, which are further exacerbated by geopolitical tensions. Inflationary tensions on labour costs also persist in some geographical areas.

Sogefi expects a decline in its annual revenues substantially in line with that recorded in the first nine months of the year. The company also confirms the target of an operating result in progression compared to that recorded in the 2023 financial year on the current perimeter, excluding any non-recurring charges and extraordinary events that are currently unforeseeable.

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CIR: Results for first half 2024 and amendment of Company Bylaws

  • Consolidated revenues up by 2% on 2023, to € 928.2 million, +9% in the healthcare sector and -2.7% in the automotive sector
  • Consolidated EBITDA at € 134.4 million, + 20.8% on 1H 2023
  • Consolidated net income at €114.3 million, including extraordinary transactions
  • Free Cash Flow of € 365.1 million, before dividend distribution and buyback of own shares
  • Net financial position of the parent company positive and higher at € 369.8 million, before the receipt of € 61,7 million extraordinary dividend by Sogefi on 24 July
  • Net debt of the industrial subsidiaries before IFRS 16 substantially lower at € 54 million (before the € 110 million extraordinary dividend paid out by Sogefi on 24 July)
  • Call of the extraordinary shareholder’s meeting for the amendment of the Company Bylaws

Milan, 29 July 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 semi-annual interim report as of 30 June 2024 as presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In the first half of 2024, the CIR group reported a distinct improvement in the results of its continuing operations and completed extraordinary asset realization transactions, which generated capital gains and very significant cash flows.  

More specifically, the group reported a net result of € 114.3 million, compared to net income of € 14.0 million in the first half of 2023, and Free Cash Flow of € 365.1 million, before the dividend distribution and the buyback of own shares.

 As for the continuing operations:

  • Consolidated revenues came in at € 928.2 million, posting a rise of 2% on the first half of 2023; KOS reported revenues up by 9.0% while Sogefi reported a decline in revenues of 2.7%;
  • The consolidated gross operating margin (EBITDA) for the first half of 2024 came to € 134.4 million (14.5% of revenues), versus € 111.3 million in the same period of 2023 (12.2% of revenues).
  • The consolidated operating result (EBIT) came to € 49.5 million, up from € 28.6 million in the first half of 2023, following the evolution of EBITDA.
  • The net result was € 27.7 million or € 19.8 million net of minority interests (versus a loss of € 3.2 million in the first half of 2023); all the businesses of the group reported an improvement in their results, the subsidiaries Sogefi and KOS and the financial management activity carried out by CIR Investimenti and CIR International.
  • Free Cash Flow came to € 31.0 million, before the application of IFRS 16, dividends and the buyback of own shares.

As for the results of the assets sold:

On 25 June 2024, the sale was completed of the residential complex situated in Via dell’Orso 8, Milan, for a total amount of € 38 million, of which € 7 million had already been received in previous years as a deposit. The sale gave rise to a capital gain, net of transactions costs and taxes, of € 18.9 million;

  • On 31 May, the subsidiary Sogefi completed the sale of its Filtration division, as part of the strategy aimed at taking profit from the business after very significant growth in its results, reducing the group’s exposure to businesses that cannot be easily converted to e-mobility technologies, lowering the group’s debt and ensuring that it has the capacity needed to complete the turn-around of Suspensions and to further develop Air & Cooling products for e-mobility; the proceeds of the sale amounted to € 331.2 and the free cash flow (before IFRS 16) of the deal totalled € 316.5 million, net of the cash transferred, the costs of the deal and the tax charges resulting from the transaction. The deal generated a net capital gain of € 114.2 million, of which € 64,3 million attributable to CIR; the purchase and sale agreement provides for a price adjustment mechanism, on the basis of which Sogefi does not expect substantial changes to the amount cashed in at closing.
  • The contribution to net result of assets held for disposal, which includes the net income for the year of Filtration, came to € 154.1 million of which CIR’s share was € 94.5 million;
  • The Free Cash Flow of assets held for disposal, before IFRS 16, including Filtration’s operating free cash flow for the first five months of 2024, amounted to € 334.1 million.

At June 30 2024 the group had a consolidated net financial position before IFRS 16 of € 316.2 million, compared to a net debt position of € 17.8 million at 31 December 2023 and of € 32.8 million at 30 June 2023, thanks to the Free Cash Flow of € 365.1 million and after disbursements for dividends and the buyback of own shares for an amount of € 31.1 million.

The net financial position of theParent Company (including the subsidiaries CIR Investimenti and CIR International) was positive for € 369.8 million; the increase from 31 December 2023, when the NFP was € 314.4 million, was due mainly to the receipt of the balance due on the sale of the property complex (€ 31.0 million) and to the inflow of the dividends distributed by the subsidiaries KOS and Sogefi (€ 20.3 million).

The consolidated net financial debt including the IFRS 16 payables, amounted to € 532.6 million at 30 June 2024, which includes rights of use of € 848.8 million, mainly of the subsidiary KOS (€ 802.8 million), which operates principally in leased properties.

The equity of the Group stood at € 863.3 million at 30 June 2024 (€ 743.4 million at 31 December 2023).

KOS

In the first half of 2024 KOS reported a 9% rise in revenues, thanks to the increased saturation levels of the nursing homes both in Italy and in Germany.

In Italy the nursing homes (RSAs) reported an increase of 11.6% in their revenues with an average saturation of 91% including the facilities at the start-up stage, and of 93.2% for the consolidated facilities, a rate that is close to the level recorded before the pandemic crisis. The return to full operating potential forecast for the year 2024 is thus confirmed.

In Germany revenues increased by 14.2%, with an average saturation rate of 90% for the first half of the year, remaining lower than that of Italy. However, the trend is positive with an increase of 5 percentage points compared to the first half of 2023. The revenue growth also reflects adjustments being made to tariffs, aimed at offsetting the cost inflation in the three-year period 2021-2023.

The Rehabilitation and Psychiatrics sector, which had already recovered a normal level of activity in 2023, grew by 4.1%, thanks to the increase in services provided to National Health Service patients in some regions.

EBIT came to € 27.9 million, equal to 6.9% of revenues, compared to € 20.8 million, 5.6% of revenues, in the first half of 2023. The higher operating result was due to the increased level of business and to the ongoing adjustment of tariffs, especially in Germany, which at present are not sufficient to compensate for the cost inflation recorded in recent years. The group has adopted a plan for gradually increasing profitability through a gradual, non-traumatic adjustment of tariffs, greater operating efficiency, an improvement in the quality of the facility portfolio, and a ramp-up of green-field projects. Currently, performance is in line with the plan.

The net result was a positive € 5.0 million, up from + € 0.8 million in the first half of 2023.

Operating free cash flow, before application of IFRS 16, was balanced, negatively affected by the increase of € 17.3 million in working capital, due to higher receivables with the Public Administration, coherently with revenues growth and net working capital seasonality.

Net debt at the end of June 2024 increased by € 17.5 million, excluding the charges resulting from application of IFRS 16, to € 149.3 million, versus € 131.9 million at 31 December 2023. This was due to investments in development of € 4.7 million and dividends of € 12.3 million, of which € 6.9 million paid to CIR.

The net debt including payables for rights of use totalled € 952.1 million at 30 June 2024, compared to € 920.7 million at 31 December 2023.

Sogefi

In the first half of 2024, with car production remaining stable worldwide but declining in European and South American markets (-5.2% and -7.1% respectively), the consolidated revenues of the Sogefi Group (referring solely to continuing operations, excluding the Filtration business unit, which was subject to IFRS 5 following the sale agreement) came in at € 524.1 million, down by 2.7% compared to first half 2023, mainly as an effect of the non-positive performance reported in Europe (-6.3%), caused by the downturn in the market, and in North America (-2.6%), while in South America, China and India revenues increased by 2.6%, 16.2% and 10.3% respectively, outperforming the market.

EBIT, totalling € 27.8 million, was up on the first half of 2023 (€ 13.8 million), with an EBIT margin of 5.3% of revenues, compared to 2.6% in first half 2023.

Net income of the continuing operations came in at € 9.4 million, versus € 2.1 million in first half 2023; the net result of assets held for disposal was € 136.4 million, including the net result of the Filtration Business Unit in the first five months of 2024 and the capital gain on its sale, net of tax charges and transaction costs; therefore total net income came to € 145.8 million (€ 31.4 million in the first half of 2023).

Free cash flow, before the application of IFRS 16, was positive for € 323.1 million and included a free cash flow amount of € 303.1 million from Filtration and € 20.0 million generated by continuing business operations (€ -3.1 million in first half 2023).

The net financial position before IFRS 16 stood at € 95.3 million at 30 June 2024, versusa net debt position of € 200.7 million at 31 December 2023, after the payout of a total € 27.1 million dividends, of which € 13.4 million to CIR.  

The net financial position at the end of June 2024 including payables for rights of use was € 48.8 million, compared to a net debt of €266.1 million at 31 December 2023.

Following the resolution adopted by the Shareholders Meeting held on 17 July 2024, on 24 July 2024 the company paid an extraordinary dividend for a total of approximately € 110 million, thus reducing by the same amount the net financial position of the Group.

Financial Management

In the first half of the year, the financial markets performed positively in all sectors and bond yields were positive thanks to the interest rate hikes implemented by the central banks during previous years in order to combat inflation.

Management of the financial assets of the Parent Company and the financial subsidiaries generated positive financial income of € 17.5 million, compared to € 0.9 million in the first half of 2023. More specifically, the return on “easily convertible” assets (shares, bonds, hedge funds) was 2.6%, giving income of € 8.6 million, the Private Equity portfolio generated a gain of € 5.4 million, or 9.3%, while equity investments contributed a positive € 3.5 million.

Significant events that have occurred since 30 June 2024

As far as the Parent Company and its subsidiaries KOS and Sogefi are concerned, there have been no significant events that could affect the economic, patrimonial and financial information described with the exception of the payment on 24 July 2024 of an extraordinary dividend of € 0.923 per share giving a total of approximately € 110 million, known to the market, with an inflow for the Parent Company CIR S.p.A. of approximately € 61.7 million.

Outlook for the year

Visibility as to the performance of the Group’s businesses in the next few months remains limited because of the uncertainties linked to the macroeconomic evolution, in the context of the unpredictable dynamics regarding a reduction in the level of inflation and cuts in interest rates, which are still at levels higher than those expected in the long term.

As far as concerns KOS, there is expected to be a further consolidation of saturation levels thanks to the gradual recovery in regions that have not yet returned to being fully operational and in the facilities at the start-up stage. Because of the inflation dynamic seen in the previous three years, which has had a particular effect on professional healthcare personnel costs, to fully recover profit margins a further adjustment to tariff structures will be necessary. Provided there are no facts or circumstances that could make the environment more complex than it is at present, KOS’s operating results for the whole year should be significantly higher than those of last year.

As for the automotive market in which Sogefi operates, visibility as to the performance of the market in 2024 remains limited because of the uncertainty linked to the macroeconomic and geopolitical evolution. S&P Global (IHS) expects that, after the growth reported in 2023, world car production could decline by 2% with Europe falling 5.3% and with limited growth in China, NAFTA and India. As for commodity and energy prices, the first half of 2024 confirmed a certain stability, which was already seen in the second half of 2023, nonetheless they remain exposed to the risk of greater volatility caused by geopolitical tensions. There is still some inflationary tension on labour costs 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 pricing.

On the basis of a more conservative forecast for the automotive market than the S&P Global estimates, particularly for Europe, Sogefi is expecting in 2024 a low single-digit decline in its revenues, confirming in any case the expectation that operating profitability, excluding non-recurring charges and extraordinary events that cannot be anticipated at the present time, will be better that that reported in financial year 2023.

As for the management of financial assets, despite the positive performance of the financial markets in the first part of the year, given the uncertainty regarding the macroeconomic and financial scenario, it is expected that in the second half of the year conditions of high volatility will remain and thus, despite the profile of prudent management adopted, reductions in the value of the financial instruments held cannot be ruled out, in particular of Private Equity and Hedge Funds, after the positive performance of the first half.

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Call of the extraordinary shareholder’s meeting for the amendment of the Company Bylaws

The Board of Directors also resolved to convene the Shareholders’ Meeting, in an extraordinary session, for September 6, 2024, to resolve on the proposal for certain amendments of the Company Bylaws, including: (i) the strengthening of the increased voting rights currently envisaged until to a maximum of ten votes; (ii) the introduction of the possibility of holding meetings through exclusive participation of a designated representative; (iii) the introduction of the possibility of holding meetings exclusively by means of telecommunications; (iv) the clarification of the cases for maintaining the increased voting rights envisaged by the law and other changes to the statutory rules related to the increased voting rights; (v) the modification of the maximum number of directors and the inclusion of the rules for the presentation of independent candidates and to guarantee the appointment of the Board of Directors in compliance with the applicable regulations; and (vi) the provision of the sectors of activity strictly related to that of the company for the eligibility of statutory auditors, pursuant to the decree of the Ministry of Justice dated 30 March 2000, n. 162. The details regarding the proposals will be disclosed upon publication of the notice of call in the next few days, in accordance with the applicable regulation.

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Sogefi: Results for first half 2024

Revenues: -2.7% at € 524.1 million

EBIT: increased to € 27.8 million (€ 13.8 million in first half 2023)

Net income at € 145.8 million, including the effects of the sale of Filtration

Free Cash Flow from continuing operations € 20.7 million (€ 3.1 million in first half 2023)

Free Cash Flow from Filtration € 321,8 million

NFP before IFRS 16 at 30 June positive at € 95.3 million, before the extraordinary dividend to be paid as of 24 July

Milan, 23 July 2024 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, approved the Group’s half-yearly financial report at 30 June 2024, presented by the Chief Executive Officer Frédéric Sipahi.

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

MARKET PERFORMANCE

In the first half of 2024, global car production decreased by 0.2% compared to the first half of 2023. Production increased in China (+5.2%), India (+6.8%) and NAFTA (+1.8%), while it recorded a downturn in Mercosur (-7.1%) and Europe (-5.2%), a geographical area that had shown strong recovery in 2023.

For the full year 2024, S&P Global (IHS), a source commonly used in the industry, predicts that world production may drop by 2% compared to 2023, with a much more modest increase in China than in the first half of the year, substantial stability in NAFTA, a 5.3% drop, in line with the first half, in Europe, and a 2.1% drop in Mercosur.

SUMMARY OF SOGEFI’S PERFORMANCE IN FIRST QUARTER 2024

In view of the agreement signed on 23 February 2024 for the sale of the Filtration Business Unit, the figures for this business are reported in accordance with IFRS 5, i.e., by recording only the net result of the business under the item ‘income from assets held for sale and discontinued operations’. The operating data commented on below refer only to the perimeter of continuing operations excluding Filtration; the net result and the free cash flow will be shown for continuing operations, discontinued operations and total operations.

With regard to continuing operations, the results showed a significant improvement compared to first half 2023:

  • revenues decreased by 2.7% compared to first half 2023 due to the performance of the European market;
  • EBITDA, equal to € 67 million, increased by 27.8% compared to the same period of 2023, with an EBITDA margin of 12.8%;
  • EBIT, equal to € 27.8 million, recorded an increase on first half 2023 (€ 13.8 million), with an EBIT margin of 5.3% of revenues, compared to 2.6% in first half 2023;
  • net income from continuing operations totalled € 10.8 million, compared to € 3.7 million in first half 2023;
  • free cash flow from operating activities was positive by € 20.7 million, compared to € 3.1 million in first half 2023.

With regard to discontinued operations:

  • the net result was equal to € 136.4 million, including the capital gain, tax charges and costs arising from the sale transaction;
  • the free cash flow amounted to € 321.8 million.

Overall, in first half 2024, the Group recorded:

  • net income of 145.8 million
  • free cash flow of € 342.5 million
  • with a net financial position at 30 June 2024 equal to € 48.8 million, against a net debt of € 266.1 million at 31 December 2023, after the payment of an ordinary dividend of € 23.7 million to the Parent Company’s shareholders in May 2024.

Following the resolution adopted by the Shareholders’ Meeting held on 17 July 2024, an extraordinary dividend totalling approximately € 110 million will be paid on 24 July 2024, reducing the Group’s net financial position by the same amount.

FIRST HALF RESULTS 2024

In first half 2024 revenues stood at € 524.1 million, down by 2.7% on first half 2023.

The drop in revenues mainly reflected the less than positive performance recorded in Europe (-6.3%), due to the market downturn (-5.2%), and in North America -2.6%, while South America, China and India grew by +2.6%, +16.2% and +10.3% respectively, outperforming the market.

Suspensions recorded a 4.7% drop in revenues, affected by the unfavourable trend in the European market, while significant growth was recorded in China and India, +44.3% and +16.2% respectively.

Air and Cooling reported revenues in line with first half 2023, recording an above-market performance in Europe, +5.9%, and a slight decline in the North American and Chinese markets.

EBITDA stood at € 67 million, up by 27.8% on first half 2023 (€ 52.4 million) despite the slight decline in volumes. The EBITDA margin rose from 9.7% in 2023 to 12.8% in the same period of 2024.

The contribution margin increased by 7.4% compared to first half 2023, representing 29% of revenues compared to 26.2%, due in part to lower raw material and energy costs.

The ratio of fixed costs to revenues stood at 15.7% in first half 2024, essentially stable compared to 2023 (15.5%).

Other charges, which specifically included exchange rate differences, made a negative contribution of € 0.5 million to EBITDA, compared to the negative contribution of € 3.2 million in first half 2023.  

EBIT totalled € 27.8 million, compared to € 13.8 million in first half 2023, and the ratio to revenues rose from 2.6% in first half 2023 to 5.3% in the same period of 2024. The increase mainly reflects the improved results recorded by the Suspensions division.

Financial expense, equal to € 9.1 million, was higher than in the same period of 2023 (€ 8.2 million) mainly due to one-off charges related to the early repayment of a number of loans, following the proceeds from the sale of the Filtration division, which enabled the Company to drastically reduce its financing needs.  

Tax expense amounted to € 8 million (€ 1.9 million in first half 2023), reflecting the higher pre-tax profit.

The net income from operating activities was positive by € 10.8 million compared to € 3.7 million in the same period of the previous year.

The net result of ‘discontinued operations’ refers to the Filtration division and amounted to € 136.4 million in first half 2024, compared to € 29.3 million in first half 2023. This value incorporates the net income of the business up to the date of sale on 31 May 2024, equal to € 22.2 million, the capital gain realised on the sale of the business, equal to € 124.5 million, the tax charges arising from the transaction and the costs incurred in finalising the transaction.

The Group reported total net income of € 145.8 million, compared to € 31.4 million in first half 2023.

The Free Cash Flow was positive by € 342.5 million and includes a free cash flowof € 321.8 million from Filtration and € 20.7 million generated by continuing operations (€ 3.1 million in first half 2023).

At 30 June 2024, excluding non-controlling interests, equity came to € 407.6 million (€ 272.9 million at 31 December 2023). The increase essentially reflects the net result for the period and the dividends paid to the Parent Company’s shareholders (€ 23.7 million).

The Net Financial Position at end of June 2024, after payment of € 27.1 million in dividends, was positive by € 48.8 million, compared to net debt at the end of 2023 of € 266.1 million. The Net Financial Position excluding payables for rights of use at 30 June 2024 was positive by € 95.3 million, compared to € 200.7 million at 31 December 2023 and € 185.3 million at 30 June 2023. 

At 30 June 2024, the Group had committed credit lines in excess of requirements of € 309 million.

SUMMARY OF RESULTS OF SECOND QUARTER 2024

In the second quarter of 2024, the Sogefi Group reported revenues of € 260.9 million, slightly down at both current (-1.5%) and constant (-2%) exchange rates. At constant exchange rates, revenue growth was positive in China (+14.9%) and India (+27.6%), while it was negative in Europe (-3.9%), South America (-3.6%) and North America (-4.6%).

Air and Cooling recorded growth of 1.6% at constant exchange rates, while Suspensions recorded a decrease at constant exchange rates of -4.8%.

EBITDA stood at € 33.3 million compared to € 26.6 million in second quarter 2023, due to the increase in the contribution margin from 26.7% of revenues in second quarter 2023 to 29.5% in second quarter 2024.

EBIT was positive at € 13.2 million (compared to € 7.2 million in second quarter 2023).

Net income from operating activities amounted to € 5.2 million, compared to € 2.8 million in second quarter 2023.

The consolidated net result for second quarter 2024, including discontinued operations, amounted to € 130.8 million (€ 18.2 million in the same period of the previous year), as it incorporates the April-May 2024 results of the Filtration division and the capital gain generated by the sale.

SIGNIFICANT EVENTS AFTER 30 JUNE 2024

No significant events that could affect the economic, equity and financial information reported occurred after 30 June 2024, with the exception of payment of the extraordinary dividend of € 0.923 per share, totalling approximately € 110 million, resolved by the Shareholders’ Meeting on 18 July 2024, with ex-dividend date on 22 July 2024, which was disclosed to the market.

The CEO and General Manager Frédéric Sipahi resigned from his role, as per the press release published today.

OUTLOOK FOR THE YEAR

There is still limited visibility on the automotive market’s performance in 2024 due to the uncertainties linked to macroeconomic and geopolitical developments. S&P Global (IHS) predicts that, after the growth recorded in 2023, global car production may drop by 2%, with Europe down by 5.3% and modest growth in China, NAFTA and India.

As far as commodity and energy prices are concerned, the first half 2024 confirms a certain degree of stability, already seen in the second part of 2023, but they are still exposed to volatility risks exacerbated by geo-political tensions. Inflationary tensions on labour costs also persist in some geographical areas. In this scenario, the Group constantly monitors trends in the various geographic areas, seeking fair agreements with all customers on sales prices.

Based on a more conservative forecast for the automotive market than the S&P Global estimates, with specific regard to Europe, Sogefi in 2024 expects a low single-digit revenue decline, while confirming its expectation that operating profitability, excluding non-recurring charges and extraordinary events that are not yet foreseeable, will be higher than in 2023.

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CIR: AGM approves Financial Statements for 2023

The Ordinary and Extraordinary Meeting of the Shareholders:

  • Approves the Financial Statements for year ended 31 December 2023 and the allocation of the net income for the year;
  • Authorizes the buy-back and use of own shares, subject to revoking the previous authorization for the part not executed;
  • Approves the Company’s remuneration policy contained in the first section of the Remuneration Report and adopts a vote in favour of the second section of the same report;
  • Approves a stock grant plan for 2024;
  • Appoints an Alternate Auditor to make up the number of members of the Board of Statutory Auditors;
  • Votes to cancel own shares without reducing the share capital.

The Board of Directors votes to continue the share buyback plan currently in progress and assigns the units of the new Stock Grant Plan 2024.

Milan, 29 April 2024 – The Annual General Meeting of the Shareholders of CIR S.p.A. – Compagnie Industriali Riunite was held today in Milan under the chairmanship of Rodolfo De Benedetti, in both an ordinary and an extraordinary session.

As per the terms of Art. 106 of Decree Law no. 18 of 17 March 2020, transposed with some amendments by Law no. 27 of 24 April 2020 and recently extended an effect of Law no. 18 of 23 February 2024, the Shareholders attended solely through the designated representative, appointed in accordance with the terms of Art. 135-undecies of D.Lgs no. 58 of 24 February 1998 (“TUF”) and identified as Monte Titoli S.p.A., to whom proxies/sub-proxies were give as per Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph4, of the TUF.

Approval of the Financial Statements for 2023

The Shareholders approved the Financial Statements for the year 2023 of CIR S.p.A. – Compagnie Industriali Riunite, making no changes to the pro-forma statements approved by the Board of Directors on 11 March 2024 and published as per the terms of the law, which showed a net loss of € 6,720,331 that the Shareholders voted to cover in its entirety using the available funds from the “Other reserves”.

The group closed the year with consolidated revenues of € 2,379.8 million (€ 2,226.8 million in 2022), a consolidated gross operating margin of € 352.2 million (€ 296.2 million in 2022) and a consolidated net result of € 32.8 million (-€ 0.2 million in 2022).

Authorization to buy back and use own shares 

After revoking the resolution authorizing the buyback of own shares approved by the ordinary Annual General Meeting held on 28 April 2023 for the part not utilized, the Shareholders authorized the Board of Directors, and for the Board the Chairman and the Chief Executive Officer, severally, for a period of eighteen months, to buy back a maximum of 208,000,000 own shares. Including in the calculation the own shares already owned even through subsidiaries, the number of shares bought back must not in any case exceed 20% of the total number of shares constituting the share capital. This authorization is for the buyback at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the Stock Exchange trading session preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases following the procedures stated in points (i), (iii) and (iv) of the following paragraph. In any case, when the purchases are made with 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 in the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) 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; (iii) 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; (iv) 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 Consob’s Rules for Issuers, and as per the terms of Articles 5 and 13 of the MAR. As far as the disposal (transfer) of the own shares is concerned, the resolution submitted includes the authorization to carry out various forms of disposal, including the right to use the own shares bought back, without any time limits or constraints, even for the remuneration plans based on the Company’s shares.

The main reasons why this authorization is being renewed are the following: (a) 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 CIR or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) 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”), all within the limits posed by current regulations; (c) 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; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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.

Remuneration Policy

The Shareholders approved the first section of the “Report on remuneration and on compensation paid” and expressed a vote in favour of the second section of the same report.

Stock Grant Plan 2024

The AGM also approved the Stock Grant Plan for 2024 aimed at directors and/or executives of the company and its subsidiaries for a maximum number 4,000,000 conditional units, not transferable to third parties or other beneficiaries, each of which will give the beneficiaries the right to be assigned 1 CIR share free of charge when the time is right and subject to compliance with the conditions set out in Stock Grant Plan 2024 as described in the Information Document prepared and published in compliance with the terms of D.Lgs. no. 58/98. The shares assigned will be made available from the treasury shares held by the Company. The plan has the aim of aligning the interests of management with the objectives of creating value for the group and its shareholders over a medium-long term time horizon and of encouraging those holding key positions to remain with the Group.

Completion of the number of members of the Board of Statutory Auditors 

The Shareholders appointed Mr. Gaetano Rebecchini as an alternate auditor, thus making up the numbers of the Board of Statutory Auditors after the untimely passing of one of the alternate auditors appointed by the Shareholders’ Meeting in April 2023.

Cancellation of 60,000,000 own shares 

The Shareholders’ meeting, in an extraordinary session, voted to cancel 60,000,000 own shares (equal to 5.42% of the share capital) with no nominal value without reducing the share capital, and also to cancel any own shares that may be bought back on the strength of the AGM authorization to buy back own shares approved at today’s ordinary session, without reducing the share capital, up to a maximum overall number of shares not exceeding 208,000,000 shares, giving the Board of Directors the power to execute the latter cancellation, either in smaller parts or as a single transaction, within 24 months of the date of the AGM, determining the actual number of own shares to be cancelled, but excluding the own shares which, together with any other own shares already in the Company’s portfolio, may be needed to cover commitments resulting from time to time from outstanding stock grant plans.  

Meeting of the Board of Directors

The Board of Directors of CIR, which met after the Annual General Meeting, voted to continue with the share buyback programme launched on 16 March 2022 and currently in progress. The new resolution is for the buyback of a maximum of 208,000,000 own shares, without prejudice to the limit of 20% of the share capital and the other characteristics of the programme, as approved by the Shareholders and already referred to above

As of 28 April 2024 CIR owned 75,186,274 own shares, equal to 6.79% of the Company’s share capital.

After verifying that the requisites are still in place, the Board of Directors confirmed the independent director status of Philippe Bertherat, Tommaso Nizzi, Elisabetta Oliveri, Francesca Pasinelli and Maria Serena Porcari, five directors out of a total of nine.

The Board also acknowledged that the members of the Board of Statutory Auditors are also in possession of the requisites for independence on the strength of a check carried out by the same.

Lastly, in accordance with the AGM resolution, the Board of Directors implemented Stock Grant Plan 2024, assigning a total of 2,982,130 rights to four beneficiaries.

Sogefi: results for first quarter 2024

Revenues: -3.9% at € 263.2 million, -3.1% at constant exchange rates

EBIT: significantly higher at € 14.6 million (€ 6.5 million in first quarter 2023)

Net income: +13.5% at € 15.0 million (€ 13.2 million in first quarter 2023)

Free Cash Flow positive for € 30.7 million (€ 39.6 million in first quarter 2023)

Reduction of debt before IFRS 16 to € 171.4 million (€ 186.9 million at end of March 2023)

Milan, 22 April 2024 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the interim report on operations of the group as of 31 March 2024, as 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 the Air and Cooling, Filtration and Suspensions sectors.

PERFORMANCE OF THE MARKET

In the first quarter of 2024 world car production declined by 0.8% on the first quarter of 2023. Growth was reported in China (+4.3%) and India (+6.6%), a decline in Mercosur (-5.6%) and in Europe (-5.9%), a geographical area that in 2023 had shown a strong recovery, and substantial stability in NAFTA (+1.4%).

For the year 2024, S&P Global (IHS), a source commonly used in the sector, expects that world production will remain stable compared to 2023, with a positive trend in China and India, substantial stability in NAFTA and Mercosur and a decline of 2.6% in Europe.

SUMMARY OF SOGEFI’S PERFORMANCE IN FIRST QUARTER 2024

Taking into account the agreement signed on 23 February 2024 for the sale of the Filtration Business Unit, the income statement figures for the first quarters of 2023 and 2024 of these businesses are shown in accordance with IFRS 5, i.e. reclassifying the result of the business to the item “income from assets held for sale and discontinued operations”. Therefore, the figures commented on below refer to the consolidation of the continuing businesses and exclude Filtration.

The consolidated revenues of the Group recorded a decline of 3.9% (-3.1% at constant exchange rates) compared to the first quarter of 2023 because of the lower production volumes in Europe due to the performance of the market (-5.9%).

The results showed a significant improvement compared to the first quarter of 2023:

  • EBITDA, totalling € 33.7 million, was up by 30.9% compared to the same period of 2023, with an EBITDA margin of 12.8%;
  • EBIT, amounting to € 14.6 million, was significantly higher than in first quarter 2023, € 6.5 million, with an EBIT margin of 5.6% of revenues, up from 2.4%;
  • Net income from continuing operations was € 5.6 million;
  • Total net income, including the net income of the Filtration business, destined for disposal, came in at € 15 million (+13.5% versus € 13.2 million in the first quarter of 2023);
  • Free cash flow was a positive € 30.7 million (€ 39.6 million in first quarter 2023);

Net debt (before IFRS 16) declined to € 171.4 million at 31 March 2024, compared to € 200.7 million at 31 December 2023 and € 186.9 million at 31 March 2023.

Commercial activity was positive both in terms of total value of the contracts acquired and in terms of mix, with 48% of the value of the new contracts acquired during the year destined for E-mobility. Significant new contracts were awarded in Europe, China and North America.

Air and Cooling obtained most of its new orders in North America and China for the supply of air manifolds and water pumps. 46% of the value of the new contracts obtained by the Air and Cooling division in first quarter 2024 was for components for E-mobility platforms.

Suspensions obtained new business mainly for the supply of stabilizer bars in China to a totally electric player, and in India to a producer of buses. 57% of the value of the new contracts obtained in first quarter 2024 by the Suspensions divisions were for components for E-mobilityplatforms.

RESULTS FOR FIRST QUARTER 2024

Revenues for the first quarter of 2024 came in at € 263.2 million and were down by 3.9% at current exchange rates and by 3.1% at constant exchange rates on the numbers for first quarter 2023.

The performance of revenues was affected mainly by the evolution recorded in Europe                  (-8.5%), caused principally by the downturn in the market (-5.9%). In South America and North America revenues were substantially unchanged at +1.5% e +0.3% respectively at constant exchange rates, while in China and India they showed growth of 14.9% and +9.9% respectively at constant exchange rates.

Suspensions reported a decline in revenues of 5.7% (-5.2% at constant exchange rates) affected by the unfavourable trend of the market in Europe; by contrast, significant growth was recorded in China and India which posted +55.7% and +9.9% respectively at constant exchange rates.

Air and Cooling reported revenues that were down by 1.4% (-0.1% at constant exchange rates), outperforming the market in Europe (+0.9%) and holding up well in the North American market.  

EBITDA came in at € 33.7 million, posting growth of 30.9% on first quarter 2023 (€ 25.8 million). The EBITDA marginrose from 9.4% in 2023 to 12.8% in the same period of 2024.

The contribution margin rose by 5.7% compared to the first quarter of 2023, with a profit margin (the ratio in % of the contribution margin/revenues) widening from 25.8% in first quarter 2023 to 28.4% in the same period of 2024 thanks partly to lower raw material and energy costs.

The impact of fixed costs on revenues was 15.4%, unchanged from 2023.

Other charges, which in particular include exchange rate differences, made a positive contribution of € 0.1 million to EBITDA versus a negative contribution of € 2.4 million in first quarter 2023.   

EBIT totalled € 14.6 million, up from € 6.5 million in the first quarter of 2023, and the ratio to revenues rose from 2.4% in first quarter 2023 to 5.6% in the same period of 2024. The increase mainly reflects the improvement in the results of Suspensions.

Financial expense, equal to € 5.1 million, was higher than that of the same period of 2023 (€ 4.1 million) mainly due to the (no cash) financial charges relating to the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) to the Argentinian subsidiary. Tax expense came to € 3.9 million (€ 1.6 million in first quarter 2023).

The net income from operating activity was a positive € 5.6 million versus € 0.8 million in the same period of the previous year.

The net result of “assets held for sale and discontinued operations” (Filtration) came to € 10.4 million in the first quarter of 2024, down from € 13.2 million in first quarter 2023 taking also into account the non-recurring costs relating to the extraordinary transaction in progress.

The Group reported net income of € 15 million, posting a 13.5% increase from € 13.2 million in the previous year thanks to the higher net result of continuing operations (Suspensions and Air and Cooling).  

Free Cash Flow was positive for € 30.7 million versus € 39.6 million in first quarter 2023.

At 31 March 2024 shareholders’ equity, excluding minority interests, stood at € 295.5 million, up from € 272.9 million at 31 December 2023. The increase reflects the net result for the period, the positive currency translation differences, the fair value of cash flow hedging instruments and other changes.

The net financial debt before IFRS 16 amounted to € 171.4 million at 31 March 2024, down from € 200.7 million at 31 December 2023 and € 186.9 at 31 March 2023. Including financial payables for rights of use, in compliance with IFRS 16, net debt totalled € 235.7 million at 31 March 2024 compared to € 266.1 million at 31 December 2023 and € 255.9 at 31 March 2023.

At 31 March 2024 the Group had committed credit lines in excess of its requirements for € 258 million.

SIGNIFICANT EVENTS THAT HAVE OCCURRED SINCE 31 MARCH 2024

Nothing significant has happened since the end of March that could have an impact on the economic, patrimonial and financial information as of 31 March 2024.

OUTLOOK FOR THE YEAR

Visibility as to the trend of the automotive market in 2024 remains limited due to uncertainty linked 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 stable, with Europe declining by 2.6%, marginal growth in China and India and overall stability 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 higher 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 macroeconomic scenario to deteriorate compared to today and assuming that the Filtration division will be deconsolidated in line with what has already been disclosed, for 2024 it is expected that for the divisions that continue to operate (Suspensions and Air and Cooling) there will be low single-digit revenue growth, higher than that forecast for the automotive market, with operating profitability, excluding non-recurring charges, showing an improvement on that reported for the year 2023 and a positive net result.

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.

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).

Sogefi: results for first nine months of 2023

RESULTS HIGHER IN FIRST NINE MONTHS OF 2023

Revenues: +8.1% to € 1,252.5 million

EBIT: +39.5% to € 89.1 million

Net income € 45.8 million (€ 33.0 million in first nine months of 2022)

Free Cash Flow positive for € 38.4 million (€ 31.6 million in first nine months of 2022)

Debt before IFRS 16 lower at € 192.7 million (€ 219.7 million at 30 September 2022)

Orbey, 23 October 2023 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Interim Report on Operations of the Group as of 30 September 2023, 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 the sectors Air and Cooling, Filtration and Suspensions.

PERFORMANCE OF THE MARKET

In the third quarter of 2023 world car production increased by 3.8% compared to the third quarter of 2022, which had in its turn reported growth of 29.5% on the previous year.

In the first nine months of 2023, world production of motor vehicles rose by 9% compared to the corresponding period of 2022. Growth was particularly strong in Europe (+15.3%) and NAFTA (+11.3%) and significant also in Mercosur (+6%) and India (+6.7%). As for China, the performance of the quarter had its ups and downs with production in the first nine months posting an overall increase (of +4.8%).

S&P Global (IHS) expects that the fourth quarter will see growth in world car production of 3.5% compared to fourth quarter 2022, forecasting for the whole year 2023 a rise of 7.5% on 2022, with growth in all the main geographical areas.

SUMMARY OF SOGEFI’S PERFORMANCE IN THE FIRST NINE MONTHS OF 2023

In the first nine months of 2023, the consolidated revenues of the Group recorded growth of 8.1% on the first nine months of 2022; at constant exchange rates the increase would have been 10.7%, thanks to the 7.1% rise in production volumes and the 3.4% rise in selling prices.

The results were positive and showed a significant improvement on those of the first nine months of 2022:

  • EBITDA, totalling € 173.9 million, was up by 14.7% thanks to the growth in revenues and the greater contribution margin;
  • EBIT, which came to € 89.1 million, was up by 39.5%, with an EBIT margin of 7.1% of revenues, up from 5.5% in the first nine months of 2022;
  • Net income came in at € 45.8 million (+39% compared to € 33.0 million in the first nine months of 2022);
  • Free Cash Flow was positive for € 38.4 million (€ 31.6 million in the first nine months of 2022);
  • Net debt (before IFRS 16) stood at € 192.7 million at 30 September 2022, down from € 224.3 million at 31 December 2022.

Business activity performed positively, with a good percentage of contracts for E-mobility (28% of the value of the new contracts acquired in the first nine months of 2023); the acquisition of new businesses was particularly dynamic in North America, China and India.

In particular, Air and Cooling obtained important contracts in North America, which will make it possible to increase market share in that area, and in China, including various orders from the car manufacturer BYD. 32% of the value of the new contracts obtained in 2023 by the business unit were for parts for E-mobility platforms.

Suspensions, in addition to having obtained new orders in Europe mainly for the supply of stabilizer bars, also signed a contract in China with an innovative local player who aspires to becoming one of the main producers in the electric car market.

CONSOLIDATED RESULTS FOR THE FIRST NINE MONTHS OF 2023

Revenues for the first nine months of 2023 came in at € 1,252.5 million, posting a rise of 8.1% at current exchange rates and of 10.7% at constant exchange rates compared to the same period of 2022.

Growth was very significant in Europe (+11.1%), North America (+9.2% and +13.3% at constant exchange rates) and India (+7.8% and +16.8% at constant exchange rates). However, in South America and in China revenues were down slightly because of the changes in exchange rates; at constant exchange rates, revenues were equivalent to or slightly higher than those of the previous year.  

Sogefi’s overall performance was substantially in line with that of the market; by geographical areas, its performance was better in NAFTA and India.  

All of the business units reported substantial revenue growth.

Revenues of Suspensions were up by 9.8% (+11.7% at constant exchange rates), with particularly positive performance in Europe (+14.4% at constant exchange rates) and India (+25.7% at constant exchange rates).

Filtration reported revenue growth of 7.9% (+10.1% at constant exchange rates), with the Aftermarket channel in Europe reporting +10.7% and India reporting +15.3% at constant exchange rates.

Air and Cooling reported a 6.9% rise in revenues (+10.7% at constant exchange rates), with growth of 14.5% at constant exchange rates in NAFTA.

EBITDA, totalling € 173.9 million, was up by 14.7% compared to the first nine months of 2022 (€ 151.7 million). 

The contribution margin increased by 12.3% compared to the first nine months of 2022, thanks to the higher revenues and greater margins (% of ratio of contribution margin to revenues), rising from 27.7% in 2022 to 28.8%. 

The impact of fixed costs on revenues (14.3%) was unchanged from the first nine months of 2022.  

Other income/charges made a negative contribution to EBITDA of € 4.2 million, versus a positive contribution of € 5.5 million in the first nine months of 2022 and consist mainly of exchange rate differences.  

EBIT came in at € 89.1 million, +39.5% from € 63.9 million in the first nine months of 2022. Its ratio to revenues increased from 5.5% in the first nine months of 2022 to 7.1% in the first nine months of 2023. 

Financial expense, totalling € 16.4 million, was higher than in the first nine months of 2022 (€ 13.6 million) because the rise in interest rates affected the loans at variable interest rates.  

Tax expense came to € 18.2 million (€ 15.0 million in the same period of 2022).

Net income from continuing operations was € 54.5 million, up from € 35.3 million in the same period of last year.

The net result of “discontinued operations and assets held for sale” refers to the sale, currently under negotiation, of the Suspensions business in Mexico; the result was a negative € 6.4 million (€ -1.1 million in the same period of 2022) and includes the net result of the business in the first nine months of 2023 and the best estimate of the income from the envisaged sale.

The group reported net income of € 45.8 million (€ 33.0 million in the first nine months of 2022).

Free Cash Flow was positive for € 38.4 million (€ 31.6 million in the first nine months of 2022).

At 30 September 2023 shareholders’ equity, excluding minority interests, stood at € 273.5 million, versus € 230.7 million at 31 December 2022. The increase mainly reflects the net result for the period.

Net financial debt before IFRS 16 totalled € 192.7 million at 30 September 2023, down from € 224.3 million at 31 December 2022 and € 219.7 million at 30 September 2022. Including the financial payables for rights of use, in accordance with IFRS 16, the net financial debt stood at € 257.9 million at 30 September 2023, down from € 294.9 million at 31 December 2022 and € 292.7 million at 30 September 2022. 

At 30 September 2023 the Group had committed credit lines in excess of its requirements for € 270.0 million.

SUMMARY OF THE RESULTS FOR THIRD QUARTER 2023

In the third quarter of 2023, the Sogefi Group reported revenues of € 404.9 million, -0.5% compared to the same period of 2022 and +4.6% at constant exchange rates.

EBITDA came in at € 61.7 million, up from € 51.6 million in the third quarter of 2022, thanks to the contribution margin increasing from 27% to 30%.

EBIT was a positive € 32.3 million (versus € 22.3 million in the third quarter of 2022).

The net income from continuing operations in the quarter was € 20.2 million, up from € 13.4 million in the same period of the previous year.

In the third quarter a negative net result of € 5.0 million was recorded for “discontinued operations and assets held for sale” (€ -0.3 million in the same period of 2022), which refers to the Suspensions business in Mexico and includes, as well as the net result of the business in the third quarter, the best estimate of the income from the disposal.

The consolidated net result for the third quarter of 2023 was € 14.4 million compared to € 12.2 million in the same period of the previous year.  

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE 30 SEPTEMBER 2023

Since the close of the period, there have been no significant events that could have an impact on the economic, patrimonial or financial information contained in this press release.

OUTLOOK FOR THE YEAR

Visibility as to the automotive market trend in 2023 remains limited due to the uncertainties regarding the macroeconomic evolution in a context of high inflation and still rising interest rates.

For the fourth quarter of 2023, S&P Global (IHS) expects world car production to grow by 3.5% compared to the same period of 2022.

As far as raw materials are concerned, in the first nine months of 2023 prices trended downwards and as yet there have been no signs of any inversion of the trend. As for energy costs, after a phase of containment, volatility remains high and could potentially intensify due to the new geo-political tensions.

Assuming there are no factors that could cause a deterioration of the macroeconomic scenario from today’s levels, for 2023 the Sogefi Group expects to see revenue growth of over 5% and an increase in profitability, excluding non-recurring charges, in line with the results reported for the first nine months of the year.

CIR: results for first half 2023

Consolidated revenues € 1,223.1 million, up by 11.9% compared to first half 2022

Consolidated net income € 14.0 million

Significant growth in revenues and results of Sogefi

Ongoing sustained recovery of KOS’ activity

Further reduction in consolidated net debt to € 32.9 million (€ 81.8 million at 31 December 2022)

Net financial position of the parent company stable and positive for € 314.0 million

Milan, 31 July 2023 – 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 Semi-Annual Financial Report as of 30 June 2023 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

Although the environment remained complex, in the first half of 2023 the adverse phenomena that had in the last three years negatively affected the business sectors in which the Group operates became decidedly less severe: the healthcare emergency phase linked to the pandemic had ended, the tensions regarding the availability and prices of commodities and energy, which had worsened in the first half of 2022 with the onset of the Russian-Ukrainian conflict, but which do nevertheless remain, are in a phase of partial resolution and, lastly, the financial markets are showing a strong recovery after the very negative performance of 2022. However, the general inflationary dynamic has led to a significant increase in costs for services and personnel costs and the higher interest rates have increased financial expense for the subsidiaries, mitigated by the fact that a part of their funding is at a fixed rate and their overall debt has declined.

During the first half of the year, the group’s social healthcare sector (KOS) has been continuing steadily along the road to recovery of its business activity, which began in the middle of 2021 after the shock caused by the pandemic, with the prospect of returning to full capacity in 2024.  

The group’s automotive sector (Sogefi), which was negatively affected by the market collapse of 2020 and the commodities dynamics of 2021 and 2022, in the first half of the year 2023, in a context of a recovering market, particularly the European market, has reported strong growth of revenues and results, which in 2023 have been significantly above pre-pandemic levels.

The consolidated revenues of the Group came in at € 1,223.1 million, up by 11.9% compared to the first half of 2022, with positive dynamics in both sectors of the group’s business.

The consolidated gross operating margin (EBITDA) came to € 170.0 million, posting a rise of 15.4% on the same period of 2022, thanks to the higher revenues and profitability of both sectors in which the group operates.

The net result was € 14.0 million versus breakeven in the first half of 2022.  

The consolidated net financial debt before IFRS 16 fell to € 32.9 million at 30 June 2023 from € 81.8 million at 31 December 2022 and € 95.6 million at 30 June 2022, thanks to the reduction of the net debt of the subsidiaries, which in total amounted to € 346.9 million.  

The net financial position of the Parent Company of the Group (including the financial sub-holdings CIR Investimenti and CIR International) was significantly positive, standing at € 314.0 million; the slight reduction from the position of € 320.4 million at 31 December 2022 was due to the buyback of own shares for € 7.7 million during the period.

The consolidated net debt including the IFRS 16 payables amounted to € 910.9 million at 30 June 2023, including rights of use of € 878.0 million relating mainly to the subsidiary KOS (€ 812.7 million), which operates mostly in leased facilities.

The shareholders’ equity of the Group stood at € 747.3 million at 30 June 2023 (€ 743.4 million at 31 December 2022).

KOS

KOS’s business activity was strongly affected by the consequences of the pandemic in 2020 and 2021 but reported a gradual recovery as from the middle of 2021. In the first half of 2023 the Functional Psychiatric Rehabilitation sector returned to full operating capacity; the nursing homes sector has not yet reached full capacity but the trend is positive both in Italy and in Germany.

The results of first half 2023 were impacted by the rise in the cost of healthcare personnel and procurement, particularly in Germany where this impact is currently being absorbed with gradual adjustments to tariffs and with the deflation of energy costs.

Revenues for the first half of 2023 totalled € 370.7 million, with a rise 9.9% on the first half of 2022, thanks to the recovery in all sectors: nursing homes (RSAs) in Italy, +13.2%, and in Germany, +15.8%, where the increase in revenues was also driven by significant increases in tariffs, as well as Functional and Psychiatric Rehabilitation (+6.4%).

EBIT came to € 20.8 million, posting an increase of € 10.1 million compared to the EBIT of the first half of 2022 (€ 10.7 million), thanks to the increased business activity and the recovery of operating efficiency despite the inflation of costs and the discontinuation of the significant support guaranteed by the German healthcare system to healthcare operators until July 2022.

The net result was a positive € 0.8 million, versus – € 2.9 million in first half 2022.

Free cash flow, before the application of IFRS16, was positive for € 16.4 million; non-recurring income of € 36.3 million was reported (from the sale of the Indian operation in the Diagnostics and Oncological Treatments sector and of certain properties in Italy), and a negative operating cash flow of approximately € 20.0 million, due to the increase in working capital of approximately € 25.0 million, which should be absorbed at least in part during the year.

Net debt, excluding the payables resulting from application of accounting standard IFRS16, totalled € 161.9 million at the end of June 2023, down from € 178.3 million at 31 December 2022 and € 192.9 million at 30 June 2022.

On 28 June 2023 the sale was completed of the Diagnostics and Cancer Care subsidiary in India, concluding the strategic refocusing process undertaken in 2020 with the sale of Medipass. The price, or equity value, of the sale was € 18.8 million.

Sogefi

In a context of global growth in car production of 11.2% compared to the equivalent period of 2022 with progress achieved in all geographical areas and a strong recovery in Europe, in the first six months of 2023 Sogefi’s consolidated revenues came in at € 852.4 million, recording growth of 12.8% and 14% at constant exchange rates. This reflects the increase in production volumes (+9.4%) and selling prices (+4.2%). Sogefi outperformed the market in NAFTA, China and India.

EBIT, amounting to € 54.8 million, increased by 35.6%, with an EBIT margin of 6.4% of revenues, up from 5.3% in the first half of 2022. All business lines reported higher profitability thanks to volumes and to the fact that margins held up despite the impact that inflation had on costs.

Net income was € 31.4 million (+51% from € 20.8 million in the first half of 2022).

Free cash flow was positive for € 45.0 million, including factoring (€ 41.2 million at 30 June 2022).

Net debt (before IFRS16) stood at € 185.3 million at 30 June 2023 down from € 224.3 million at 31 December 2022.

The customer portfolio also performed positively with 32% of the value of new contracts destined for hybrid and electric platforms, with high growth potential.

Financial management

In the first half of the year global equity and bond markets reported a recovery after the very negative performances of 2022 and bond yields turned positive again after the central banks raised interest rates several times in order to counter inflation.

The management of the financial assets of the parent company and the financial subsidiaries gave slightly positive financial income (€ 0.9 million, with a return of 0.2% for the period) that compares with a negative € 5.1 million in the first half of 2022. More specifically, the overall return on liquid assets (shares, bonds, hedge funds) was 0.8%, while the remaining part of the portfolio (Private Equityand minority shareholdings) recorded a negative return of 2.2%, due partly to the unfavourable evolution of the euro/dollar exchange rate.

Significant events that have occurred since 30 June 2023

Since the close of the period there have been no significant events that could have an impact on the economic, patrimonial and financial information reported.

Outlook for the year

Visibility as to the trend of the businesses of the CIR Group in the coming months remains limited due to the uncertainties regarding the evolution of the macroeconomic scenario in a context of high inflation and still rising interest rates.

As far as KOS is concerned, operations are expected to return to full capacity in the Rehabilitation and Acute sectors during the current year while for nursing homes in Italy and Germany the trend of increasing occupancy has yet to be consolidated and it is expected that this will lead to full operational capacity between the end of 2023 and the beginning of 2024.  Because of the inflationary dynamics that have characterized the sector and particularly the rise in the cost of healthcare personnel, in order for profitability to recover there needs to be a gradual adjustment of tariffs both in Italy and in Germany, a subject currently under discussion between business associations and the institutions affected. Assuming there are no further factors or circumstances, unpredictable as of today, that could make the context even more complex than it is at present, the operating results of KOS for the whole year should be significantly higher than those of last year.

As for Sogefi, visibility as to the automotive market trend in 2023 again remains limited due to uncertainties regarding the evolution of the macroeconomic scenario. For 2023 S&P Global (IHS) expects world car production to grow by 5.3% on 2022, with Europe at +11.8%, NAFTA at +8.2%, India at +7.2% and South America and China substantially unchanged. As far as raw materials and energy are concerned, since the beginning of the year 2023 prices have been trending downwards but they remain high and very volatile. Assuming there are no further factors that could cause a deterioration of the macroeconomic scenario from today’s levels, for 2023 Sogefi expects to see mid-single-digit revenue growth, in line with forecasts for the automotive market, and higher profitability, excluding non-recurring charges, than that of 2022.

As for financial asset management, despite the better performance of the financial markets in the first half of the year, given the uncertainties linked to the macroeconomic and financial scenarios, it is expected that conditions of high volatility will remain in the second half of the year as well.

Sogefi: results for first quarter 2023

Revenues up by 12.8% to € 852.4 million

EBIT: € 54.8 million, +35.6%

Net income € 31.4 million (€ 20.8 million in first half 2022)

Free Cash Flow positive for € 45.0 million (€ 41.2 million in first half 2022)

Debt before IFRS 16 reduced to € 185.3 million (€ 216.4 million at end of June 2022)

Milan, 24 July 2023 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the group’s Semi-Annual Financial Report as of 30 June 2023, presented by Chief Executive Frédéric Sipahi.

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

PERFORMANCE OF THE MARKET

In the first half of 2023 world vehicle production reported growth of 11.2% compared to the same period of 2022, with progress made in all geographical areas.

Growth was particularly strong in Europe (+20.2%) and NAFTA (+12.2%) and significant in Mercosur (+9.7%), India (+6.5%) and China (+7%), where, after a negative first quarter of 2023 (-4.7%), there was a distinct recovery in the second quarter (+20.3%). 

For 2023, S&P Global (IHS), a source widely used in the sector, expects that world production will grow by 5.3% compared to 2022, with an increase in all the main geographical areas. The reduction in the growth index forecast for the full year compared with that reported in the first half of the year is due to the strong recovery of production seen in the second half of 2022.

KEY FIGURES OF SOGEFI’S PERFORMANCE IN THE FIRST HALF OF 2023

The consolidated revenues of the Group recorded double-digit growth compared to the first half of 2022 (+12.8% and +14% at constant exchange rates), which reflects the increase in production volumes (+9.4%) and in selling prices (+4.2%).

The results were positive and significantly better than those of first half 2022:

  • EBITDA came in at € 111.1 million and was up by 11.3% on first half 2022, thanks to the growth in volumes and the contribution margin holding up well;
  • EBIT, totalling € 54.8 million, rose by 35.6%, with the EBIT margin at 6.4% of sales, up from 5.3% in first half 2022;
  • Net income was € 31.4 million (+ 51% from € 20.8 million in first half 2022);
  • Free cash flow was positive for € 45.0 million (€ 41.2 million in first half 2022);
  • Net debt (before IFRS 16) stood at € 185.3 million at 30 June 2023, down from € 216.4 million at the end of June 2022.

Commercial activity was positive with an important part of contracts being for E-mobility (32% of the value of new contracts acquired in the first half) with significant new contracts awarded in China, India and the United States too.  

Filtration signed important agreements in Europe both for the OEM (Original Equipment Manufacturers) and the IAM (Independent Automotive Aftermarket) channels: it gained contracts for the supply of filters for truck brake circuits and signed an exclusivity agreement for three years with one of the principal leaders in the distribution of automotive parts in the Aftermarket channel. Development has been continuing in India too, where the business unit is gradually gaining market share.

Suspensions obtained new business in the Indian market with local operators, signing a contract in particular for the supply of stabilizer bars for light commercial vehicles with an innovative player aspiring to becoming one of the principal E-mobility producers in the Indian market. The division also obtained various contracts in Europe, particularly for the supply of stabilizer bars for top-of-the-range electric SUVs and for coil springs for E-mobility platforms.

Air and Cooling is continuing to develop in China, with the receipt of an important order from BYD 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. Sogefi can offer these components, which are traditionally made of metal, in plastic which gives a weight reduction and optimizes design and cost. Contracts have also been signed in North America for the supply of thermal management products and in Europe for thermostat groups for E-mobility and intake manifolds. 47% of the value of the new contracts signed in 2023 by the Air and Cooling division were for parts destined for E-mobility platforms.

CONSOLIDATED RESULTS FOR FIRST HALF 2023

The revenues for the first half of 2023 totalled € 852.4 million, posting growth of 12.8% at current exchange rates and 14% at constant exchange rates on the corresponding period of 2022.   

Revenues recorded growth in all geographical areas: +14% in Europe, +15.8% in North America (+17.2% at constant exchange rates), +5.6% in South America (+3.9% at constant exchange rates net of inflation in Argentina), +10.3% in India (+17.7% at constant exchange rates), +2.3% in China (+8.2% at constant exchange rates).

Sogefi outperformed the market in North America, India and China.

Suspensions reported growth in revenues of 15.4% (+15.7% at constant exchange rates).

Filtration reported an 11% rise in revenues (+12.4% at constant exchange rates), with particularly significant growth in the Aftermarket channel in Europe (+13.6%), North America and India.

Air and Cooling revenues were up by 12.2% (+14.4% at constant exchange rates), with a particularly significant increase in NAFTA (+18.5% at constant exchange rates).

EBITDA came in at € 111.1 million and was up by 11.3% compared to first half 2022 (€ 99.8 million). 

The contribution margin increased by 12.9% compared to the first half of 2022, thanks to the higher volumes and to profitability (ratio of contribution margin/revenues %) which was unchanged at 28.1% compared to 2022, despite the extra costs linked to energy prices and in general to inflation.

The ratio of fixed costs to revenues declined to 14.3% from 14.9% in the first half of 2022.

Other expense, which mainly includes exchange rate differences, made a negative contribution to EBITDA of € 3.8 million versus a positive contribution of € 3.9 million in the first half of 2022.   

EBIT came to € 54.8 million, posting growth of 35.6% compared to € 40.4 million in first half 2022. The ratio to revenues increased from 5.3% in first half 2022 to 6.4% in first half 2023. 

Financial expense totalled € 11.0 million and was higher than in the first half of 2022 (€ 9.1 million) because the rise in interest rates affected the variable-rate part of the loan portfolio.

Tax expense was substantially unchanged at € 10.8 million (€ 10.3 million in the same period of 2022).

The group reported net income of € 31.4 million (€ 20.8 million in the first half of 2022).

Free Cash Flow was positive for € 45.0 million (€ 41.2 million in first half 2022), including the effect of the greater recourse to factoring on account of the increase in revenues.

At 30 June 2023 shareholders’ equity, excluding minority interests, stood at € 258 million, up from € 230.7 million at 31 December 2022.

Net financial debt before IFRS 16 totalled € 185.3 million at 30 June 2023, down from € 224.3 million at 31 December 2022 and € 216.4 million at 30 June 2022. Including the financial payables for rights of use, in accordance with IFRS 16, the net financial debt at 30 June 2023 amounted to € 250.6 million, versus € 294.9 million at 31 December 2022 and € 285.2 million at 30 June 2022. 

At 30 June 2023 the Group had committed credit lines in excess of its requirements for € 284.0 million.

SIGNIFICANT EVENTS THAT HAVE OCCURRED SINCE 30 GIUGNO 2023

Since the close of the period there have been no significant events that could have an impact on the economic, patrimonial and financial information presented herein.

OUTLOOK FOR THE YEAR

Visibility as to the automotive market trend in 2023 remains limited due to the uncertainties relating to the macroeconomic evolution in a context of high inflation and still rising interest rates.

For 2023, S&P Global (IHS) expects global car production to grow by 5.3% on 2022, with Europe up 11.8%, NAFTA up 8.2%, India up 7.2% and South America and China substantially unchanged.

As far as raw materials and energy are concerned, since the beginning of the year prices have been trending downwards, but they remain high and very volatile.

Assuming there are no further factors that could cause a deterioration of the macroeconomic scenario from today’s levels, for 2023 the Sogefi Group expects to see mid-single-digit revenue growth, in line with forecasts for the automotive market, and higher profitability, excluding non-recurring charges, than that of 2022.

CIR: AGM approves Financial Statements for 2022

New Board of Directors appointed. Rodolfo De Benedetti confirmed as Chairman and Monica Mondardini as Chief Executive Officer. Independent directors Elisabetta Oliveri and Tommaso Nizzi join the Board

New Board of Statutory Auditors for the three years 2023-2024-2025: Giovanni Barbara (Chairman), Maria-Maddalena Gnudi and Francesco Mantegazza

Milan, 28 April 2023 – The Annual General Meeting of the Shareholders of CIR S.p.A. – Compagnie Industriali Riunite was held today in an ordinary session under the Chairmanship of Rodolfo De Benedetti.

As per the terms of Art. 106 of Decree Law no. 18 of 17 March 2020, transposed with amendments into Law no. 27 of 24 April 2020 and recently extended as an effect of Law no. 14 of 24 February 2023, attendance at the AGM by the shareholders took place exclusively through the representative designated by the Company as per the terms of Art. 135-undecies of D.Lgs. no. 58 of 24 February 1998 (TUF) and identified as Studio Segre S.r.l., to whom proxies/sub-proxies were also given pursuant to the terms of Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the TUF.

Approval of the Financial Statements for 2022

The Shareholders approved CIR’s Financial Statements for the year 2022. The group closed the year with consolidated revenues of  € 2,235.6 million (€ 1,962.5 million in 2021), a consolidated gross operating margin of € 295.7 million (€ 300.7 million in 2021) and a consolidated net result of -€ 0.2 million (earnings of € 18.0 million in 2021).

The Shareholders approved the Board of Directors’ proposal not to distribute dividends.

Remuneration Policy and Stock Grant Plan

The AGM approved the first section of the “Report on the Remuneration Policy and on Compensation Paid” and expressed a majority vote in favour of the second section of the same report.

The Meeting also approved the Stock Grant Plan for 2023, aimed at directors and/or executives of the Company and its subsidiaries for a maximum number of 5,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned 1 CIR share free of charge. The shares assigned will be made available from the treasury shares held by the Company. The plan has the aim of aligning the interests of management with the objectives of creating value for the group and its shareholders over a medium-long term time horizon and of encouraging those holding key positions to remain with the group.

Authorization to buy back own shares 

The Shareholders’ Meeting gave the Board of Directors an authorization, valid for a period of 18 months, to buy back a maximum of 220,000,000 own shares, and in any case no more than 20% of the total number of shares constituting the share capital, at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the stock exchange trading session preceding each individual buyback transaction or preceding the date on which the price is fixed. In the event of purchases made according to the procedures set out in points (i), (iii) and (iv) of the following paragraph and in any case when the purchases are made with 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 in the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) 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; (iii) 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; (iv) 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 Consob’s Rules for Issuers, and as per the terms of Articles 5 and 13 of the MAR. As far as the disposal or the transfer of the own shares is concerned, the resolution submitted includes the authorization to carry out various forms of disposal, including the right to use the own shares bought back, without any time limits or constraints, even for the remuneration plans based on the Company’s shares.

The main reasons why this authorization is being renewed are the following: (a) 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 CIR or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) 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”), all within the limits posed by current regulations; (c) 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; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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.

Appointment of the Board of Directors

The Shareholders Meeting has appointed Philippe Bertherat, Edoardo De Benedetti, Marco De Benedetti, Rodolfo De Benedetti, Monica Mondardini, Tommaso Nizzi, Elisabetta Oliveri, Francesca Pasinelli and Maria Serena Porcari as directors. The directors were drawn from the list presented by the majority shareholder F.lli De Benedetti S.p.A., holder of 35.957% of the share capital, with the exception of Tommaso Nizzi, who was drawn from the minority list presented by Alessandro Nizzi and Beatrice Baroncelli, holders of 2.507% of the share capital.

The CVs of the directors are available on the website www.cirgroup.it.

During the meeting, Chairman Rodolfo De Benedetti and Chief Executive Officer Monica Mondardini thanked the outgoing directors, Maristella Botticini, Franco Debenedetti, Paola Dubini and Silvia Giannini and the outgoing auditor Gaetano Rebecchini for their work on behalf of the Company.

Appointment of the Board of Statutory Auditors

The Shareholders also appointed the members of the Board of Statutory Auditors for the three years 2023-2024-2025. The auditors in office are Giovanni Barbara (Chairman), Maria-Maddalena Gnudi and Francesco Mantegazza. The alternate auditors are Marco Pardi, Antonella Dellatorre and Luigi Macchiorlatti Vignat. The auditors were drawn from the list presented by the majority shareholder F.lli De Benedetti S.p.A., with the exception of the Chairman Giovanni Barbara and the alternate auditor Marco Pardi, who were chosen by the minority list presented by Alessandro Nizza and Beatrice Baroncelli. 

The CVs of the statutory auditors are available on the website www.cirgroup.it.

*****

Board of Directors Meeting

The Board of Directors of CIR voted to continue with the share buyback plan launched on 16 March 2022 and currently in progress, in accordance with and in execution of the authorization granted today by the Shareholders Meeting. The new resolution authorizes the buyback of no more than 220,000,000 own shares, without prejudice to the limit of 20% of the share capital and the other characteristics of the plan already announced on 12 September 2022.

As of 27 April 2023, CIR owned 38,516,899 of its own shares, equal to 3.48% of the Company’s share capital.

The Board of Directors confirmed Rodolfo De Benedetti as Chairman and Monica Mondardini as Chief Executive Officer of the Company. Pietro La Placa was confirmed as Secretary to the Board of Directors.

Carlo De Benedetti and Franco Debenedetti were appointed respectively as Honorary Chairman and Honorary Deputy Chairman of CIR, in consideration of their contribution to the affirmation and the development of the Company.  

The Board verified with a positive outcome that the requisites for qualification as independent were met with for those directors who had declared themselves independent, i.e. directors Philippe Bertherat, Tommaso Nizzi, Elisabetta Oliveri, Francesca Pasinelli and Maria Serena Porcari. Five directors out of a total of nine are therefore independent.

The Board also acknowledged the fulfilment of the requirements for independence of the members of the Board of Statutory Auditors after prior verification.  

The members of the Appointments and Remuneration Committee were appointed(Francesca Pasinelli, Chairman, Philippe Bertherat, Maria Serena Porcari), as were the members of the Control, Risk and Sustainability Committee (Maria Serena Porcari, Chairman, Tommaso Nizzi, Elisabetta Oliveri), and the Committee for Related-Party Transactions (Philippe Bertherat, Chairman, Tommaso Nizzi, Francesca Pasinelli) and the Lead Independent Director (Maria Serena Porcari).

Lastly, the Board, as per the AGM resolution on the subject, launched the implementation of Stock Grant Plan 2023 by assigning 4,584,544 rights.

*****

The Executive responsible for the preparation of the Company’s Financial Statements, Michele Cavigioli, hereby declares, in compliance with the terms of paragraph 2 Article 154 bis of the Finance Consolidation Law (TUF), that the figures contained in this press release correspond to the results documented in the Company’s accounts and general ledger.

Sogefi: results for first quarter 2023

Revenues up by 13.2% to € 431.6 million

EBIT: +21.4% to € 25.7 million

Net income higher at € 13.2 million  (€ 10.7 million in first quarter 2022)

Free Cash Flow positive for € 39.6 million (€ 43.7 million in first quarter 2022)

Debt before IFRS 16 lower at € 186.9 million (€ 213.4 million at end of March 2022)

Milan, 21 April 2023 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the interim report on operations of the group as of 31 March 2023, presented by Chief Executive Officer Frédéric Sipahi.

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

PERFORMANCE OF THE MARKET

In the first quarter of 2023 world vehicle production reported growth of 5.7% compared to the equivalent period of 2022, with progress made in all geographical areas except China, which reported a decline of 7.9%. Growth was particularly buoyant in Europe, +25.6%, and was also significant in NAFTA (+9.8%), Mercosur (+14.2%) and India (+9.4%). 

In 2023, S&P Global (IHS), a source commonly used in the sector, forecasts that world production could rise by 3.8% compared to 2022, with growth in all the main geographical areas.

SUMMARY OF SOGEFI’S PERFORMANCE IN FIRST QUARTER 2023

The Group’s consolidated revenues posted double-digit growth on the first quarter of 2022, +13.2%, underpinned by the increase in production volumes (+7.3%) and by the higher selling prices (+5.4%).

Results were positive and showed an improvement:

  • EBITDA rose by 7.4% compared to first quarter 2022, to € 53.7 million, thanks to the growth in volumes and the contribution margin holding up well despite the higher energy costs;
  • EBIT was up by 21.4% at € 25.7 million and the EBIT margin rose to 6% of revenues versus 5.6% in first quarter 2022;
  • The business generated free cash flow of € 39.6 million (€ 43.7 million in first quarter 2022);
  • Net debt (before IFRS 16) decreased to € 186.9 million at 31 March 2023, versus € 224.3 million at 31 December 2022.

Commercial activity was positive, with new contracts concluded even for E-mobility platforms (31% of the value of new contracts in first quarter 2023);

  • The Filtration division obtained contracts in Europe for the supply of brake circuit filters for trucks and in India for the supply of air filters;
  • The Suspensions division signed a contract in India for stabilizer bars with an innovative player who is aspiring to become one of the main producers in the market for electric cars in India, and various contracts in Europe and South America for stabilizer bars and leaf springs;
  • The Air and Cooling division signed contracts, in China with customers in the E-mobilitysector, in North America for the supply of thermal management and air ducts, and in Europe for inlet manifolds. 66% of the value of the new contracts obtained in 2023 by the Air and Cooling division are for E-mobility platforms.

Investments in innovations were significant:

  • The use of HoloLens Metaverse viewers for augmented reality, which make it possible to visit production sites virtually, supporting workplace safety remotely and giving instructions in real time: the aim is to equip all the group’s production sites with this innovative technology by the end of 2023;
  • The ACMA, the association representing Indian car component producers, has given the Suspensions division three awards for its excellence in digitization, designing and developing new products and localization, and has certified it as a sustainable business.

CONSOLIDATED RESULTS IN FIRST QUARTER 2023

The revenues for first quarter 2023 came in at € 431.6 million, up by 13.2% compared to the same period of 2022 (+13.1% at constant exchange rates).

Volumes sold rose by 7.3% compared to those of the same period of 2022 and selling prices increased on average by 5.4%, the increase being distributed between the different product lines partly as a function of the evolution of the costs of raw materials and the parts used.

Revenues posted double-digit growth in all geographical areas, with the sole exception of China: +11.9% in Europa, +21.5% in North America (+19.2% at constant exchange rates), +17.6% in South America (+8.8% at constant exchange rates net of inflation in Argentina) and +15.9% in India (+21.3% at constant exchange rates); in China revenues declined by 3% but were stable at constant exchange rates.

Sogefi’s revenue performance was significantly better than that of the market in NAFTA, India and China.

Suspensions reported a rise in revenues of 18.4% (+17.4% at constant exchange rate), with significant growth rates in all the geographical areas in which it operates, with the exception of China on account of the performance of the local market.

Filtration revenues were up by 10.6% (+11.1% at constant exchange rates), thanks to the good performance of business activity in North America and India and of the Aftermarket channel in Europe. 

Air and Cooling reported a 10.7% rise in revenues (both at current and constant exchange rates), with particularly significant increases in NAFTA.

EBITDA, totalling € 53.7 million, was up by 7.4% compared to € 50.0 million in first quarter 2022.

The contribution margin increased by 11.3% compared to first quarter 2022, thanks to the higher sales volumes, and the ratio of contribution margin to revenues remained substantially stable at 27.5% (28% in the same period of 2022), absorbing the extra costs generated by energy prices and inflation in general.  

The impact of fixed costs on revenues edged down to 14.3%, from 14.6% in first quarter 2022.

Other charges, which refer mainly to exchange rate differences, made a negative contribution to EBITDA of € 2.7 million versus a positive contribution of € 0.9 million in first quarter 2022.   

EBIT came in at € 25.7 million, up by 21.4% from € 21.2 million in first quarter 2022. The impact on revenues rose from 5.6% in first quarter 2022 to 6% in first quarter 2023. 

Financial expenses, amounting to € 5.7 million, were higher than those of the first quarter of 2022 (€ 4.5 million) because of the higher interest rates on the variable part of the loans.

Tax expense was substantially unchanged at € 6.0 million (€ 5.9 million in the same period of 2022).

The group reported net income of € 13.2 million (€ 10.7 million in the first quarter of 2022).

Free Cash Flow was a positive € 39.6 million (€ 43.7 million in first quarter 2022), also taking into account recourse to factoring.

At 31 March 2023 shareholders’ equity, excluding minority interests, stood at € 240.5 million, up from € 230.7 million at 31 December 2022.

Net financial debt before IFRS 16 totalled € 186.9 million at 31 March 2023, down from € 224.3 million at 31 December 2022 and € 213.4 million at 31 March 2022. Including financial payables for rights of use, in accordance with IFRS 16, net debt at 31 March 2023 stood at € 255.9 million, down from € 294.9 million at 31 December 2022 and € 281.8 million at 31 March 2022. 

At 31 March 2023 the Group had committed credit lines in excess of its needs for € 313.0 million.

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE 31 MARCH 2023

Since the close of the period, there have been no significant events that could have an impact on the economic, patrimonial or financial information contained in this press release.

OUTLOOK FOR THE YEAR

Visibility as to the performance of the automotive market in 2023 is still limited because of the uncertainties linked to the macroeconomic evolution, the volatility of commodity prices (although less pronounced than in 2022), particularly energy, and to the trend of inflation and interest rates.  

For 2023, S&P Global (IHS) is forecasting that world car production will grow by 3.8% on 2022, with Europe posting +8.2%, NAFTA +5.2% and South America +3.6%.

As for raw materials and energy, in the early months of 2023 prices have been trending downwards but they remain very high and very volatile.     

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 profitability, excluding non-recurring expense, at least in line with that of 2022.

CIR: filing of documentation for AGM

Milan, 6 April 2023 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in ordinary session for 28 April 2023, 10.00 a.m., at a single calling, it is announced that the following documentation 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:

  • The Annual Report and Financial Statements for the year ended 31 December 2022, the Report of the Board of Statutory Auditors, and the Reports of the Firm of Auditors (item 1);
  • The Consolidated Non-Financial Report for 2022;
  • The Report on Corporate Governance and ownership structure as per Art. 123 – bis del TUF.

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CIR: results for the year 2022

  • Strong growth in revenues (+13.9% on 2021) to € 2,235.6 million, thanks to the positive evolution of the subsidiaries Sogefi and KOS

  • Consolidated EBITDA at € 295.7 million (higher on a recurring basis)

  • Consolidated net result at overall breakeven (-€ 0.2 million), negatively affected by returns on financial assets, due to the negative market trends

  • Net financial position of the parent company positive for € 320.3 million

Milan, 13 March 2023 – 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 accounts of the group as of 31 December 2022 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

During 2022, the Company and its subsidiaries operated in a complex environment that was still suffering the effects of the pandemic, although to a lesser extent, and the high cost of raw materials and energy, aggravated by the conflict between Russia and Ukraine and by the negative performance of the financial markets. Only in the last quarter of the year did the tension in the financial, energy and commodity markets ease. 

The consolidated revenues of the Group came in at € 2,235.6 million, posting a rise of 13.9% on 2021, with positive dynamics in both areas of activity (healthcare and automotive components), which recovered considerably after two years that were strongly impacted by the effects of the Covid-19 pandemic.

The consolidated gross operating margin (EBITDA) came to € 295.7 million, 13.2% of revenues (€ 300.7 million in 2021). Excluding the non-recurring items reported in the two years, consolidated EBITDA increased by 5.4% compared to 2021.

The consolidated operating result (EBIT) was € 81.7 million (€ 80.2 million in 2021). Excluding, in this case too, the effect of the non-recurring items, consolidated EBIT rose by 40% on a recurring basis.

The management of financial assets, which were worth a total of € 393.1 million at the end of 2022, produced a negative result of € 5.0 million (+€ 24.4 million in 2021), with an average return of -1.3%; it should be noted that the return obtained compares with performances of between -10% and -20% for the main equity and bond indexes.

Thus the consolidated net result came to -€ 0.2 million versus net income of € 18.0 million in 2021.

The recurring operating results of the subsidiaries showed growth while the consolidated net result was impacted by the return on the financial investment portfolio, which was affected by the negative performance of the markets; the net result of the financial subsidiaries of the group (CIR, CIR International and CIR Investimenti) was in fact negative for € 16.5 million, after a positive contribution of € 16.1 million in 2021.

Consolidated net financial debt before IFRS 16 stood at € 81.8 million at 31 December 2022, almost unchanged from € 85.6 million at 31 December 2021:

  • The net debt of the subsidiaries declined to € 402.2 million from € 418.0 million at 31 December 2021;
  • the net financial position of the Parent Company(including the subsidiaries CIR Investimenti and CIR International) is still very positive, at € 320.3 million, but is slightly lower than at 31 December 2021 (€ 332.3 million), due to the buyback of own shares for € 6.4 million and to the lower financial results.

Consolidated net financial debt, inclusive of IFRS 16 payables, amounted to € 950.6 million at 31 December 2022, with rights of use of € 868.8 million, referring mainly to the subsidiary KOS (€ 798.2 million), which operates largely in leased premises.

The shareholders’ equity of the Group stood at € 743.4 million at 31 December 2022 (€ 740.4 million al 31 December 2021).

KOS

The effects of the Covid-19 pandemic caused a reduction in the activity of KOS as from the second quarter of 2020 until the early months of 2021; from the second quarter of 2021 and for the whole of 2022 the business reported an improvement, thanks to the pandemic situation becoming less critical, although it still has not reached pre-Covid levels.

KOS’ revenues came in at € 683.5 million, posting growth of 6.5% compared to the previous year, thanks especially to the recovery of the nursing home sector in Italy (+16.3%) and in Germany (+6.6%).

EBIT came to € 30.4 million; in 2021 KOS had reported EBIT of € 31.8 million, which included non-recurring income of approximately € 12.0 million; the recurring operating result has therefore increased, thanks to the gradual recovery in levels of activity and operating efficiency, and despite the considerable rise in healthcare personnel costs and energy costs.

The net result for the year was one of overall breakeven (-€ 0.8 million versus € 1.4 million in 2021, which contained the non-recurring income mentioned above).

Operating Free Cash Flow before IFRS 16 was a positive € 5.0 million; KOS is continuing to pursue its plan for developing and acquiring new facilities and invested € 23.0 million in greenfield sites, for which the cash flow, including investments in new facilities, came to -€ 18.1 million.

Net debt at the close of 2022, excluding payables from the application of IFRS 16, stood at € 178.3 million (€ 160.2 million at year-end 2021); total net debt, including the IFRS 16 payables, came to € 976.4 million.

Sogefi

Global production of motor vehicles recorded growth of 6.2% compared to 2021, with a contribution from all geographical areas: +5.7% in Europe, +9.7% in NAFTA, +8.3% in Mercosur, +6.1% in China and +22.7% in India. As for production costs, the first nine months of 2022 saw continuing tension in the commodity and energy markets, which was exacerbated by the conflict between Russia and Ukraine, but which eased in the last quarter of the year.

Sogefi’s revenues were up by 17.5% compared to 2021, thanks to growth in production volumes (+4%), the increase in selling prices linked to the rise in the cost of raw materials, and to the evolution of exchange rates (+12.6% at constant exchange rates).

Economic results were positive, posting a distinct improvement: in fact EBIT came in at € 68.3 million (4.4% of revenues), up by 17% from € 58.4 million in 2021.

Net income was € 29.6 million (€ 2.0 million in 2021).

Free Cash Flow was positive for € 29.3 million (€ 32.4 million in 2021).

Net debt before IFRS 16 was lower at € 224.3 million at 31 December 2022, compared to € 258.2 million at 31 December 2021.

Financial management

As a result of the shock to the financial markets caused by the conflict between Russia and Ukraine and the hike in interest rates adopted by central banks to counter inflation, during 2022 the financial markets reported one of the worst performances of the last few decades.

Against this backdrop, the management of financial assets, which totalled € 393.1 million at year end 2022, reported a negative result of € 5.0 million (+€ 24.4 million in 2021), with an average return of -1.3%; it should be noted however that the return obtained compares with performances of between -10% and -20% for the main equity and bond indexes.

On 22 December 2022 the parent company CIR signed a binding preliminary agreement, subject to certain conditions precedent, for the sale of a real estate property complex not instrumental to the business, which has a carrying value in the accounts of € 11.0 million, for a total amount of € 38.0 million. The amount of € 5.0 million has been received as a deposit, while the remaining amount will be paid on completion of the deal (indicatively by the end of 2023), when the capital gain will be recognized.

ESG plans and performance

In 2022 the CIR group achieved the sustainability objectives set out in the 2021-2025 plans of the Company and its subsidiaries.

Progress has been made on the de-carbonization front, with a reduction in energy intensity in all the group’s businesses and a mix of energy sourcing with a growing percentage of green energy.

Waste management has also improved significantly, with an increase of almost 10p.p. in the percentage of waste recycled, especially by Sogefi. The latter has also continued to develop products for sustainable mobility with more than 50% of new orders being for hybrid or electric platforms.

With regards to the management of human resources, the number of hours dedicated to personnel training has increased and action continues to be taken to guarantee that equality of treatment is monitored in all countries in which the group operates.

Significant events that have taken place since 31 December 2022

Since the close of the year 2022 there have been no significant events that could have an impact on the economic, patrimonial and financial information given herein.

Outlook for the year

Visibility as to the performance of the Group’s businesses in coming months remains low due to the continuing uncertainty regarding the evolution of the Russian-Ukrainian conflict, macroeconomic developments and the prices of raw materials, particularly energy.

As far as KOS is concerned, in a context with fewer critical operational issues relating to the pandemic, return to pre-Covid levels of activity is expected during this year for Rehabilitation and Acute and in 2024 for nursing homes in Italy and Germany, after a gradual increase in saturation during 2023, reaching levels close to those of 2019. In the absence of events or circumstances that could make the environment more complex than it is at present, the operating results of KOS for the whole year should be improving vs. the past year.

As for the automotive market, in which Sogefi operates, visibility for 2023 remains limited due to the uncertainty linked to the Russian-Ukrainian conflict, the macroeconomic trend, and the availability and cost of raw materials and 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 and energy prices are concerned, in 2022 the rising trend came to an end, although volatility remains high. In some geographical areas there are still inflationary pressures on labour costs. Provided there is no serious deterioration in the geopolitical and macroeconomic scenario from today’s levels, for 2023 Sogefi expects to see mid-single-digit revenue growth and an operating result, excluding non-recurring expense, which is at least in line with that of 2022.

As for the financial asset management of the holding company, given the uncertainty linked to the geo-political, macroeconomic and financial climate, volatile conditions are expected to continue throughout 2023 although there should be an improvement in the returns on financial assets.  

Dividend proposal

The Board of Directors will put forward to the Annual General Meeting of the Shareholders the proposal that no dividend be distributed.

Annual General Meeting of the Shareholders

The Annual General Meeting of the Shareholders will be held, in an ordinary session and at a single calling, on 28 April 2023. The Board of Directors at today’s meeting has voted, among other things, to put the following proposals before the Annual General Meeting of the Shareholders:

  • The cancellation (for the part not utilized) and renewal of the authorization of the Board of Directors, in the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 32 of D.Lgs no. 58/98 (the “TUF”), of Art. 144-bis of CONSOB Resolution no. 11971/1999, of EU Regulation no. 596/2014 (the “MAR”), of EU Delegated Regulation no. 2016/1052, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, for a period of 18 months to buy back a maximum of 220,000,000 of its own shares; it should also be taken into account that, including in the calculation any own shares already owned even through subsidiaries, the number of shares bought back must not in any case exceed a total number of shares representing one fifth of the share capital of CIR; that the buyback transactions may take place at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the Stock Exchange trading session preceding each single buyback or preceding the date on which the price is fixed in the event of purchases made in accordance with points (i), (iii) and (iv) of the following paragraph. In any case, when the shares are bought back with 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.

    The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) 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; (iii) 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; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve 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 the MAR. As far as the disposal (alienation) of the own shares is concerned, the resolution being submitted includes am authorization to carry out any act of disposition, including the right to use the shares thus bought, without any time limits or constraints, even for compensation plans based on the Company’s shares.

    The main reasons why this authorization is being renewed are the following: (a) 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 CIR or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) 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”), all within the limits of the regulations in force at the time (c) 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; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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;

  • The approval of a stock grant plan for 2023 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 carried out. The stock grant plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them an incentive to increase their commitment to improving the performance of the Company.

  • The renewal of the Board of Directors, whose mandate ends with the approval of the financial statements as of 31 December 2022;

  • The renewal of the Board of Statutory Auditors, whose mandate ends with the approval of the financial statements as of 31 December 2022.

Sogefi: results higher in 2022 than 2021

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.

Sogefi: results higher in first nine months of 2022

Revenues: +17.7% to € 1,165.6 million (+29.4% in third quarter)

Sales higher in all geographical areas and business units

EBITDA: +5% to € 151.3 million, equal to 13% of revenues

Net income: € 33.0 million (-€ 2.0 million in first nine months of 2021)

Free Cash Flow positive for € 31.6 million (€ 25.1 million in first nine months of 2021)

Reduction in debt before IFRS 16 to 219.7 million (€ 267.4 million at 30.9.2021)

Milan, 21 October 2022 -The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the interim report on operations of the group as of 30 September 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 the third quarter of 2022 world car production recorded growth of 27.5% compared to the same period of 2021 (+38.4% in Europe), after falling by 1.8% in the first half of 2022 because of difficulties in sourcing parts and raw materials, which had already begun in 2021, and the effects of the conflict between Russia and Ukraine.

Thanks to the recovery in the third quarter, world motor vehicle production was up by 7.5% in the first nine months of 2022 compared to the same period of 2021, with increases in all geographical areas: +2.8% in Europe, +10.6% in NAFTA, +10% in Mercosur, +11.1% in China and +23.7% in India.

Despite the recovery in the first nine months of 2022, world car productions is still lower than it was in 2019, -8.9%, with Europe at -26.3%.

The trend of the market remains uncertain; S&P Global (IHS), a source commonly used in the sector, is forecasting growth in world car production compared to 2021 of 2.2% for fourth quarter 2022 and 6% for the whole year 2022.

SUMMARY OF SOGEFI’S PERFORMANCE IN THE FIRST NINE MONTHS OF 2022

The Group’s consolidated revenues grew by 17.7% compared to the first nine months of 2021: the rise in sales was due to the growth in production volumes (+3.4%), to the adjustment of selling prices to the increases in the cost of raw materials and to the evolution of exchange rates (at constant exchange rates the rise in revenues would be 11.7%).

The performance of the third quarter was particularly positive (+29.4%), even at constant exchange rates (+21%).

The economic results were positive and showed a distinct improvement:

  • EBITDA was higher at € 151.3 million, up from € 144.1 million in the first nine months of 2021;
  • EBIT came in at € 62.3 million (5.3% of revenues), and was up by 26% from € 49.4 million in 2021 (5% of revenues);
  • Net income came to € 33.0 million (in 2021 the net result was € 24.3 million for continuing operations and € 2.0 million including discontinued operations);
  • Business generated a positive free cash flow of € 31.6 million (€ 25.1 million in 2021);
  • Net debt (before IFRS 16) declined to € 219.7 million at 30 September 2022 from € 258.2 million at 31 December 2021.

Significant Investments were made in innovation with progress throughout the period:

  • The SOGEFI cabin filter CabinHepa+, which uses HEPA media (High Efficiency Particulate Air) and filters mechanically capturing particles that are 50 times smaller than a conventional cabin filter, was nominated product of the year in France;
  • At Marckolsheim in France the inauguration took place of the European E-Mobility Tech Center, which is equipped with the largest 3D printer in Europe and is devoted to the research and development of new products for E-mobility;
  • In September the innovative cooling plates for EV platforms were presented at the Novi Michigan Battery Show and received a great deal of customer interest.

In the first nine months of the year commercial activity was buoyant,with important contractsobtained even in the EV sector:

  • The Filtration division obtained contracts for the supply of air purification filters, oil and fuel module filters in Europe and India; 
  • The Suspensions division signed contracts in Europe for the supply of coil springs and stabilizer bars – the majority of which will be produced in Romania – and three new contracts for the supply of stabilizer bars for electric or plug-in hybrid vehicles. 43% of the total estimated value of the new contracts obtained in 2022 is for E-mobility platforms;
  • The Air and Cooling division obtained important contracts in NAFTA, Europe and China for the supply of thermal management products and cooling plates for electric mobility. 54% of the total value of these new contracts is for E-mobility platforms.

Moreover, in line with ESG strategiesfor reducing energy from non-renewable sources, Sogefi has installed photovoltaic panels at its plants in Nules (Spain) and Pune (India) with the aim of mitigating its impact on climate change. These solar panels will make it possible to cover approximately 20% of the energy requirements of the plants involved.

CONSOLIDATED RESULTS FOR THE FIRST NINE MONTHS OF 2022

Revenues for the first nine months of 2022 came in at € 1,165.6 million, posting growth of 17.7% compared to the same period of 2021.

The increase at constant exchange rates was 11.7%: sales volumes were up by 3.4% on those of the first nine months of 2021 and the remaining part of the increase reflects the adjustment of the selling prices of the various product lines to the evolution of the costs of raw materials and of the components used.

All geographical areas reported growth: +7.4% in Europa, +30.6% in North America (+17.4% at constant exchange rates), +57.4% in South America (+19.8% at constant exchange rates, net of inflation in Argentina), +27.9% in Asia (+17.6% at constant exchange rates).

Suspensions reported an increase in revenues of 24.1% (+16.7% at constant exchange rates), with significant growth rates particularly in South America, North America and India.

Filtration reported an increase in revenues of 16.8% (+12.8% at constant exchange rates), thanks to the good performance of the after-market channel in Europe and of business activity in North America and India.  

Air and Cooling reported an increase in revenues of 11.9% (+4.8% at constant exchange rates), negatively affected by a decline in Europe, which in 2021 had realized a non-recurring gain on the sale of a special project.

EBITDA, amounting to € 151.3 million, rose by 5% from € 144.1 million in the first nine months of 2021; the EBITDA/Revenues ratio declined to 13% from 14.6% in the first nine months of 2021.

In order to understand the evolution of profitability, it is necessary to consider that the higher costs for materials and energy have been offset by the rise in selling prices; however, the increase by the same amount in revenues and in the cost of materials used has caused a dilution of the profitability index.

The contribution margin has risen by 3.8% compared to the first nine months of 2021, in line with the increase in volumes sold, and the ratio of the contribution margin/revenues % has declined to 27.7% from 31.4% for the first nine months of 2021 as a result of the dilution effect described above.

The impact of fixed costs on revenues has declined from 16.4% in the same period of 2021 to the current 14.5%.    

EBIT came to € 62.3 million (5.3% of revenues) and was up by 26% from € 49.4 million in 2021 (5% of revenues).

Financial expense, totalling € 13.6 million, was in line with the figure for the first nine months of 2021 (€ 13.4 million).

Tax expense increased to € 14.5 million (€ 13.2 million in 2021).

Income from operating activity came in at € 34.2 million, up from € 24.3 million in the first nine months of 2021.

No results were reported for discontinued operations or operations held for sale, while in the same period of last year the sale of the Filtration branches in Brazil and Argentina gave a negative accounting result of € 24.7 million. The group reported net income of € 33.0 million (€ -2.0 million in the first nine months of 2021).

Free Cash Flow was a positive € 31.6 million, up from € 25.1 million in the first nine months of 2021. The increase reflects the positive evolution of results and the change in working capital in the period, which was less unfavourable than the first nine months of 2021 because there was greater use of factoring.   

At 30 September 2022 shareholders’ equity, excluding minority interests, amounted to € 248.5 million versus € 187.7 million at 31 December 2021. The rise reflects the net result for the period, positive currency translation differences, actuarial gains, the fair value of cash flow hedging instruments, and other changes.

Net financial debt before IFRS 16 stood at € 219.7 million at 30 September 2022, lower than at the close of 2021 (€ 258.2 million) and at 30 September 2021 (€ 267.4 million). Including financial payables for rights of use, as per IFRS 16, net debt at 30 September 2022 totalled € 292.7 million, down from € 327.6 million at 31 December 2021.

At 30 September 2022 the Group had committed credit lines in excess of its requirements for € 294.0 million.

SUMMARY OF THE RESULTS FOR THIRD QUARTER 2022

In the third quarter of 2022, Sogefi reported revenues of € 409.6 million, posting an increase of 29.4% (+21% at constant exchange rates), thanks to the market recovery, the adjustment of selling prices and the positive effect of exchange rates. The dynamics of revenues, even at constant exchange rates, was particularly positive and outperformed the market in Asia and North America.

EBITDA came in at € 51.5 million, 12.6% of revenues, versus € 35.8 million in the third quarter of 2021 (11.3% of revenues).

EBIT was a positive € 21.8 million (€ 2.1 million in third quarter 2021).

Net income from operating activities was € 13.1 million (€ -2.1 million in third quarter 2021).

The consolidated net result was € 12.2 million compared to € -23.4 million in the third quarter of 2021, which suffered a negative accounting charge of € 21.2 million on the sale of the filtration business in Argentina.

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE 30 SEPTEMBER 2022

Since the close of the period, there have been no significant events that could have an impact on the economic, patrimonial or financial information contained in this press release.

IMPACT OF COVID-19 AND THE RUSSIAN-UKRAINE CONFLICT ON THE BUSINESS

In 2022, despite the continuing pandemic, there has been no suspension of industrial or commercial activity except for the lockdowns in certain areas of China. The Sogefi Group 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. Despite this, staff absences due to contagion or to contact with the virus have continued, causing operating difficulties.  

As for the consequences of the conflict between Russia and Ukraine, it should be noted that in March 2022 the Group ceased its commercial activity in Russia and exports to Ukraine and Belarus; the total revenues of the above activities were not significant (in 2021 they accounted for 0.7% of the Group’s revenues) and thus the loss of revenues has been irrelevant. However, discontinuing business in Russia meant recognizing losses in the value of assets held in that country of € 0.9 million.

In more general terms, the Group, like all of the automotive sector, is feeling the indirect effects of the war particularly the further hikes in the prices of energy and raw materials and the sourcing difficulties.

Lastly, as a combined effect of the pandemic crisis that is still not over 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 not recovered as expected.  

OUTLOOK FOR THE YEAR

Visibility as to the performance of the automotive market in the fourth quarter of 2022 remains limited because of the uncertainty linked to the conflict between Russia and Ukraine, the macroeconomic scenario, the availability and prices of raw materials and energy, and the logistics of transportation and sourcing from Asian markets.

For 2022, S&P Global (IHS) expects higher volumes to continue in the fourth quarter too and is forecasting growth in world car production of 6% for the whole year compared to 2021 with Europe at +5.4%, NAFTA at +10.9%, South America at +6.7% and China at +6.4%.

As for the prices of raw materials, as from April the rising trend of steel prices came to an end while the prices of other materials such as resin and energy prices continue to rise.  

It should be noted that in the first nine months of 2022 the selling prices of Sogefi’s products were adjusted to factor in the higher costs of raw materials recorded in 2021 and at the beginning of 2022. Given the further rises in the cost of certain raw materials and energy, Sogefi’s management is continuing in its commitment to reaching fair agreements with all its customers with the aim of continuing commercial relationships that are sustainable in the long term.

Assuming that there are no other factors that could seriously worsen the macroeconomic and production scenario (a significant tightening of the sanctions imposed on Russia, a deterioration of the Russian-Ukrainian conflict, further 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 expects to achieve an operating result for the whole year 2022, excluding non-recurring charges, that is at least in line with the result for 2021.

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CIR: results for first half 2022

  • Revenues at € 1,102.5 million, up by 10.4% from first half 2021
  • Positive results for Sogefi, results of KOS in recovery, results of financial management affected by the negative performance of the financial markets
  • Net income at break-even, negatively affected by the adjustment of fair value of the financial asset portfolio
  • Reduction of consolidated net debt of the operating subsidiaries
  • Net financial position of the parent company positive for € 313.3 million, after the disbursement of € 84.2 million for the buyback of own shares and despite the impairment recorded by the portfolio of financial investments in the current market situation

Milan, 29 July 2022 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the Semi-Annual Financial Report as of 30 June 2022 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In the first half of 2022 the Company and its investees were operating in a complex environment due to the effects of the still ongoing pandemic, which have a direct impact on the social healthcare sector, to the increases in the cost of raw materials and energy, which affect the automotive sector, and the negative performance of the financial markets, which have had an impact on the results of the group’s investment portfolio. The conflict between Russia and Ukraine has worsened the critical issues already present in relation to raw materials, energy, the financial markets and the weakness of certain economic sectors in Europe.

Against this backdrop, KOS continued to see a recovery of its activities which began in the second quarter of 2021, after the fall caused by the pandemic, and Sogefi managed effectively the many critical factors that impacted the market; while the results of financial management suffered the inversion of the trend in the markets, suffering losses in value across all of the main asset classes.

The consolidated revenues of the Group came in at € 1,102.5 million and were up by 10.4% on the first half of 2021, with positive dynamics in both sectors of the group’s business activities.  

The group reported a net result at break-even (-€ 0.2 million) versus net income of € 21.6 million in the first half of 2021. The decline was due to the lower returns on the financial investment portfolio, with the financial companies of the group (CIR, CIR International and CIR Investimenti) contributing a negative € 10.2 million to the consolidated net result after a positive contribution of € 9.3 million in the first half of 2021.

Consolidated net financial debt before IFRS 16 stood at € 95.6 million at 30 June 2022 compared to € 85.6 million at 31 December 2021 and € 41.4 million at 30 June 2021:

  • The net debt of the subsidiaries declined to € 408.9 million from € 418.0 million at 31 December 2021 and € 446.4 million at 30 June 2021;
  • The net financial position of the Parent Company (including the subsidiaries CIR Investimenti and CIR International) remains very positive at € 313.3 million and the reduction compared to 31 December 2021 (€ 332.4 million) and 30 June 2021 (€ 405.0 million) was due mainly to the buyback of own shares for € 84.2 million over the last 12 months and to a lesser extent to the impairment losses recorded by the financial investment portfolio in the current market situation.  

Consolidated net debt, including IFRS 16 payables, stood at € 969.8 million at 30 June 2022, and included € 874.2 million for rights of use that refer mainly of the subsidiary KOS (€ 805.3 million), which operates in premises that are generally leased.

The Group’s equity amounted to € 749.4 million at 30 June 2022 (€ 740.4 million at 31 December 2021).

KOS

In 2020 the Covid-19 pandemic had a significant impact on the activities of KOS, leading to a reduction in the number of guests entering the nursing homes and in the services provided in the rehabilitation units. The recovery began in the middle of 2021 and was confirmed in the first half of 2022, although pre-pandemic levels have not yet been reached.

In the first half of 2022, the Group’s revenues came to € 346.5 million, posting a rise of 6.5% on the same period of the previous year, thanks particularly to the recovery in the nursing home sector in Italy (+16.2%) and in Germany (+5.2%).

Recurring EBIT rose from € 8.3 million to € 11.5 million (total EBIT for first half 2021 came to € 20.9 million and included non-recurring income of € 12.6 million).

Sogefi

In the first half of 2022 the market continued to have difficulty in the sourcing of raw materials and components (which even caused the temporary closure of certain of the principal car manufacturers’ production facilities worldwide) and rises in the prices of raw materials and energy, made worse by the conflict between Russia and Ukraine. World car production fell by 1.8% compared to the first half of 2021, with Europe at -7.6%, China and Mercosur in line (at +0.7% and -0.6% respectively), and NAFTA and India recovering (+4.7% e +16.4% respectively).

In this scenario, Sogefi reported revenues 12.3% higher than in the first half of 2021, due to the rise in selling prices to bring them into line with the cost of raw materials, and to the trend of exchange rates; production and sales volumes were substantially in line with first half 2021 with a positive performance compared to the market (-1.8%).

Recurring EBIT for the first half of the year was in line with that of the same period of 2021; total EBIT came to € 40.4 million versus € 47.3 million in 2021 because of higher restructuring costs (€ 4.1 million compared to € 1.3 million in the first half of 2021) and lower non-operating income (€ 3.9 million versus € 9.4 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.

Net debt (before IFRS 16) fell to € 216.4 million at 30 June 2022 from € 258.2 million at 31 December 2021 and € 261.4 million at 30 June 2021.

The first half of the year was positive for commercial activity too: the Filtration division was awarded various contracts for the supply of oil and air filters; the Air and Cooling division signed important contracts in NAFTA and Europe for the supply of thermal management products and cooling plates for electric mobility; the Suspensions division obtained contracts for components that will be produced in the new facilities in Romania and in China, even for electric vehicles. Despite the market challenges of the last two years, Sogefi has always been able to meet the needs of its clients, confirming its image of a supplier capable to deliver high quality products, with reliable service levels.

Financial management

In the first half of 2022 the impact on the markets of the war in progress and the rise in interest rates, decided on by the central banks to counter inflationary effects, was negative for all asset classes. Management of the financial assets of the parent company and the financial subsidiaries therefore reported a negative net result of € 5.1 million for adjustments made to the fair value of assets, with a return for the first half of –1.3% after income of € 12.4 million in the first half of 2021. In particular, the overall return on cash equivalent assets (shares, bonds, hedge funds) was -2.5%, while the remaining part of the portfolio (private equity and minority shareholdings) gave a positive return of 3.8%.

Significant events that have taken place since 30 June 2022

Since the close of the period there have been no significant events that could have an impact on the economic, patrimonial or financial information reported.

Outlook for the year

Visibility as to the performance of the Group’s businesses in coming months remains limited given the continuing uncertainty about the evolution of the pandemic (which has a direct effect on the healthcare sector in particular), the Russian-Ukrainian conflict, the commodity and energy markets (which affect mainly the automotive sector) and the financial markets.

As far as KOS is concerned, thanks to the vaccination plan, there are expected to be less critical operational issues linked to the evolution of the pandemic. In this case the forecasts predict that the Rehabilitation and Acute services could return to pre-Covid levels already this year. For the nursing homes in Italy and Germany the time needed to return to full occupancy of the care homes is expected to be structurally longer, lasting at least until 2023. The company is in the process of performing an in-depth analysis of service models, in light of technological innovations and of the needs of its patients.

As for Sogefi, visibility as to the performance of the automotive market 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; the selling prices of Sogefi’s products have been adjusted to factor in these rises and after 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 or circumstances that could make the scenario even more complex than it is at present, the operating results of Sogefi and KOS for the whole year should be at least in line with those of last year.

As for the management of the financial assets of the holding company, given the uncertainty surrounding the geopolitical, macroeconomic and financial scenario, the second part of the year is expected to be just as volatile as the first half was. Despite the prudent management profile adopted, further impairment of the financial instruments in the portfolio cannot be ruled out. 

Sogefi: results for first half 2022

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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CIR: AGM approves Financial Statements for 2021

Milan, 29 April 2022 – The Annual General Meeting of the Shareholders of CIR S.p.A. was held today in Milan in an ordinary session under the chairmanship of Rodolfo De Benedetti.

As per the terms of Art. 106, paragraph 4, of Decree Law no. 18 of 17 March 2020, the Shareholders were able to attend exclusively through the designated representative, appointed in accordance with Art. 135-undecies of D.Lgs. no. 58 of 24 February 1998 (TUF) and identified as Studio Segre S.r.l., to whom proxies/sub-proxies were also assigned under Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the same TUF.

Approval of the Financial Statements for 2021

The Shareholders approved CIR’s financial statements for the year 2021. The group closed the year with consolidated revenues of € 1,980.7 million (€ 1,821.8 million in 2020) and net income of € 18.0 million. The parent company CIR S.p.A. reported net income of € 2.1 million.

The Shareholders approved the proposal of the Board of Directors not to distribute any dividends.

Remuneration policy and stock grant plan

The Shareholders approved the first section of the “Report on remuneration policy and compensation paid” and expressed a majority vote in favour of the second section of the same report.

The Meeting also approved the Stock Grant Plan for 2022, aimed at directors and/or executives of the Company and its subsidiaries for a maximum number of 5,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned 1 CIR share free of charge. The shares assigned will be made available from the treasury shares held by the Company. The plan has the aim of aligning the interests of management with the objectives of creating value for the group and its shareholders over a medium-long term time horizon and of encouraging those holding key positions to remain with the group.

Authorization to buy back own shares 

The Shareholders’ Meeting gave the Board of Directors an authorization, valid for a period of 18 months, to buy back a maximum of 76,016,488 own shares, and in any case up to 5.95% of the total number of shares constituting the share capital, at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the stock exchange trading session preceding each individual buyback transaction or preceding the date on which the price is fixed. In the event of purchases made according to the procedures set out in points (i), (iii) and (iv) of the following paragraph and in any case when the purchases are made with 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 in the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) 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; (iii) 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; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve 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 the MAR.

The main reasons why this authorization is being renewed are the following: (a) 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 CIR or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) 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”); (c) 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; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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.

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Board of Directors Meeting

The Board of Directors of CIR resolved to continue the share buyback plan launched on 16 March 2022 and which is currently in progress, in accordance with and in execution of the authorization that it has just received from the Shareholders. The new resolution is for the buyback of no more than 76,016,488 own shares (equal to 5.95% of CIR’s share capital) without prejudice to the limit of 20% of the share capital and the other characteristics of the plan which were published on 11 March 2022 and on 15 March 2022.

As of 28 April 2022 CIR owned 185,881,760 treasury shares, representing 14.55% of the shares that constitute the Company’s share capital.

The Board of Directors and the Board of Statutory Auditors also verified that the Members who have declared themselves to be independent do in fact have the requisites to be considered as independent.  

Lastly, in accordance with the AGM resolution on the subject, the Board began implementing Stock Grant Plan 2022 by assigning 4,274,469 rights.

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Sogefi: AGM approves financial statements for 2021

SOGEFI: AGM APPROVES FINANCIAL STATEMENTS FOR 2021
BOARD OF DIRECTORS APPOINTED FOR THREE YEARS 2022-2024
MONDARDINI CONFIRMED AS CHAIRMAN AND SIPAHI AS CHIEF EXECUTIVE OFFICER

Independent directors Patrizia Arienti, Maha Daoudi and Massimiliano Picardi join the Board

Milan, 22 April 2022 – The ordinary Annual General Meeting of the Shareholders of Sogefi S.p.A. was held today under the chairmanship of Monica Mondardini.

Pursuant to Article 106, paragraph 4, of Italian Decree-Law no. 18 of March 17, 2020, shareholders exclusively participated in the Annual General Meeting of the Shareholders through the designated representative appointed pursuant to Article 135-undecies of Italian Legislative Decree no. 58 of February 24, 1998 (TUF) and identified in Studio Segre S.r.l., to which proxies/subproxies pursuant to art. 135-novies of the TUF have also been granted, as an exception to art. 135-undecies, paragraph 4, of the TUF.

Approval of the Financial Statements for 2021

The Shareholders approved the Financial Statements for the year 2021. Sogefi closed the year with consolidated revenues of € 1,320.6 million (€ 1,190.2 million in 2020), EBITDA of € 192.5 million (€ 137.0 million in 2020) and a positive net result of € 2.0 million (loss of € 35.1 million in 2020). The parent company of the group Sogefi S.p.A. reported a profit of € 69.9 million (loss of € 6.2 million in 2020).

The Shareholders approved the proposal put forward by the Board of Directors that no dividends be distributed.

Compensation Policy and Stock Grant Plan

The AGM approved the first section of the Report on Compensation and remuneration paid and expressed a majority vote in favour of the second section of the same Report.

The Shareholders also approved the stock grant plan for 2022 aimed at employees of the Group holding strategically important roles for a maximum of 1,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned free of charge 1 Sogefi share. The shares thus assigned will be made available from the own shares held by the Company. The plan aims to align the interests of management with the objective of creating value for the Group and its Shareholders over a medium-long term time horizon, stimulating the commitment to achieving common objectives at Group level and encouraging those who hold key positions to remain with the Group.

Authorization to buy back own shares

The Annual General Meeting of the Shareholders renewed the proxy to the Board of Directors for a period of 18 months, with power 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 trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made in accordance with 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 highest price of the last independent transaction and the highest current independent bid price on the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of Italian Leg. Decree no. 58/98 and with the terms of the law and the rules 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 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 no. 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 that can be used as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the sphere of transactions of interest to the Company (a so-called “stock of shares”); (iii) to engage in action to support market liquidity, optimize capital structure, and remunerate shareholders in particular market situations, 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 or domestic rules, and with the procedures established therein.

As of today’s date, the Company is the owner of 1,993,372 own shares, equal to 1.66% of the share capital.

Appointment of the Board of Directors

The Annual General Meeting of the Shareholders appointed Patrizia Arienti, Maha Daoudi, Rodolfo De Benedetti, Mauro Melis, Monica Mondardini, Massimiliano Picardi, Frédéric Sipahi, Christian Georges Streiff as directors for the three-year period 2022-2024.

Seven directors were drawn from the list submitted by the majority shareholder CIR S.p.A. – Compagnie Industriali Riunite, holder of 55.637% of the voting rights, and one director, Massimiliano Picardi, was taken from the list submitted by minority shareholder Navig S.a.s. of Giorgio Zaffaroni, holder of 3.33% of voting rights. The curricula vitae of the directors are available on the website www.sogefigroup.com.

During the Annual General Meeting, Chairman Monica Mondardini and CEO Frédéric Sipahi thanked outgoing board members Patrizia Canziani, Roberta Di Vieto and Ervino Riccobon for their service at the Company.

Board of Directors Meeting

Following the Annual General Meeting of the Shareholders, the Board of Directors confirmed Monica Mondardini as Chairman and Frédéric Sipahi as CEO of the Company.

The Board verified that five directors out of a total of eight were independent. They are Patrizia Arienti, Maha Daoudi, Mauro Melis, Massimiliano Picardi and Christian Georges Streiff.

The Board of Statutory Auditors in its turn verified the presence of the requisites for the independence of its members.

The Board of Directors also defined the composition of the committees: the Appointment and Remuneration Committee is composed of the directors Mauro Melis, Massimiliano Picardi and Christian Georges Streiff, the Control, Risk and Sustainability Committee is composed of Patrizia Arienti, Maha Daoudi and Mauro Melis and the Committee for Related Party Transactions is composed of Patrizia Arienti, Mauro Melis and Massimiliano Picardi. Mauro Melis was appointed lead independent director.

Lastly, the Board, in accordance with the AGM resolution, implemented the 2022 stock grant plan for the first time, granting 995,000 rights.

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Sogefi: results for first quarter 2022

RESULTS FOR FIRST QUARTER 2022

Revenues at € 381.1 million, up 8% on the first quarter of 2021
Better than market performance

EBITDA margin at 13.1% of turnover, lower than in the first quarter of 2021
(15.4%) due to higher raw material and energy costs

Net income of € 10.7 million
(€ 11.8 million in the first quarter of 2021)

Free Cash Flow positive for € 43.7 million and higher
than the first quarter of 2021 (€ 32.4 million)

Milan, 22 April 2022 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Interim Financial Report of the Group as of March 31, 2022, presented by Chief Executive Officer Frédéric Sipahi.

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

PERFORMANCE OF THE MARKET

In the first few months of the year the difficulties in sourcing specific components continued (which also led to the temporary closure of some factories of the main world manufacturers), as did the shortages of raw materials and the increase in raw material and energy prices. Starting at the end of February, this problematic situation was compounded by the difficulties linked to the conflict between Russia and Ukraine and the economic and financial sanctions imposed on Russia by Europe, the United States and other countries around the world, which led to a reduction in world trade and a further rise in raw material and energy prices.

Against this backdrop, in the first quarter of 2022, global automobile production was down 4.5% compared to 2021; in March, the decline became more pronounced at -11.4%. Europe performed the worst, with car production at -17% compared to the first quarter of 2021 (-24.3% in March); production also fell in NAFTA and Mercosur (-1.8% and -13.3% respectively), while China showed a positive trend (+6.1%).

Despite the above, IHS maintains a forecast for global manufacturing growth of 4.4% in 2022.

SOGEFI’S KEY RESULTS IN THE FIRST QUARTER OF 2022

The Group revenues grew by 8% compared to 2021: production volumes remained substantially stable (compared to a market at -4.5%) and sales prices were adjusted to take into account the increases in raw material costs (particularly steels) recorded over the last 12 months.

The economic results were positive:
net income was € 10.7 million (€ 11.8 million in 2021);
positive free cash flow was € 43.7 million (€ 32.4 million in 2021);
net debt before IFRS 16 at March 31, 2022 was € 213.4 million, down from € 258.2 million at December 31, 2021 and € 261.1 million at the end of March 2021.

The first quarter of 2022 was also positive for business activity.

During the quarter, the SOGEFI CabinHepa+ cabin filter, which uses HEPA (High Efficiency Particulate Air) media and filters mechanically, capturing particles 50 times smaller than a conventional cabin filter, won the 2022 Product of the Year award in France. The new European E-Mobility Tech Center, based in eastern France, was also inaugurated. It is dedicated to research and development of new E-mobility products and equipped with Europe’s largest 3D printer.

The Air and Cooling division entered into major contracts in NAFTA to supply thermal management products and cooling plates for electric mobility. In particular, a new contract was signed, the largest electric mobility contract ever entered into by Sogefi, with a manufacturer of electric commercial vehicles, for the production of aluminum cooling plates welded with laser technology to control the temperature of the battery. Filtration obtained a significant number of contracts for the supply of oil filters and air purification filters. Suspensions obtained contracts in Europe for coil springs and stabilizer bars, most of which will be manufactured in Romania.

REVENUES

In the first quarter of 2022, Sogefi’s revenues amounted to € 381.1 million, up 8% on the corresponding period of 2021 (€ 352.8 million).

Turnover grew in all geographies: +4.1% in Europe, +13.5% in North America, +31.9% in South America and +7.6% in Asia. Sogefi outperformed the market in all areas except China, where in the same period of the previous year Sogefi had already reported strong growth in revenues thanks to the launch of new programs.

By Business Unit, Suspensions reported revenues up 9.5%, with a particularly significant rate of increase in South America. Filtration reported revenues up 11.6%, with strong performance from the Aftermarket in Europe and the North American operations. The Air and Cooling division grew by 2.7% due to exchange rates, while at constant exchange rates it contracted slightly (-1.7%).

OPERATING RESULT AND NET RESULT

EBITDA amounted to € 50.0 million compared with € 54.2 million in the first quarter of 2021; gross profitability (EBITDA / Revenue %) fell to 13.1%, from 15.4% in the first quarter of 2021. This reflects a decline in contribution margin to 28%, compared to 30.7% in the first quarter of 2021, due to higher material and energy costs. In contrast, fixed costs as a percentage of revenue are down from 16.2% (in the same period of 2021) to 14.6%.

EBIT amounted to € 21.2 million, compared with € 25.4 million in 2021.

Financial expenses, at € 4.5 million, were down on those in the first quarter of 2021 (€ 5.8 million) thanks to the reduction in debt and the cost of debt; tax expenses were essentially stable at € 5.9 million (€ 6.0 million in 2021).

The net result was a positive € 10.7 million (€ 11.8 million in the first quarter of 2021).

DEBT AND EQUITY

The Free Cash Flow was positive for € 43.7 million versus € 32.4 million in Q1 2021. The Free Cash Flow reflects the positive results and specific actions on working capital implemented by the Group.

Net debt before IFRS16 stood at € 213.4 million at March 31, 2022, down from the end of 2021 (€ 258.2 million) and from March 31, 2021 (€ 261.1 million).
Including financial payables for rights of use as per IFRS 16, net debt at March 31, 2022 stood at € 281.8 million, down from € 327.6 at December 31, 2021.

As of March 31, 2022, the Group has committed credit lines in excess of requirements of € 321 million.

At March 31, 2022, Shareholders’ equity, excluding minority interests, amounted to € 205.8 million versus € 187.7 million at December 31, 2021.

IMPACTS OF COVID-19 AND RUSSIAN-UKRAINIAN CONFLICT ON THE BUSINESS

In 2022, despite the continuing pandemic crisis, the effects on the market in which the Company operates were less severe than those suffered in the previous two years. However, demand remains weak, particularly in Europe and NAFTA, and operational challenges related to uneven production levels and staff absences caused by the pandemic continue. The current lockdown in some areas of China could have negative impacts both directly, on manufacturing activities in China, and indirectly, on raw materials imported from the country.

In 2022, the Sogefi Group continued to apply all the rules for health and safety in the workplace aimed at reducing the risk of contagion, namely social distancing, the use of individual protective equipment and measures to limit the presence of personnel in the workplace, i.e. working from home.

Regarding the impact of the Russian-Ukrainian conflict, it should be pointed out that Sogefi has a very limited direct presence in the countries involved: in 2021 revenues earned in these countries accounted for 0.7% of Sogefi’s total revenues. Sales to Russia, Ukraine and Belarus have been discontinued since March. As a result, in the first quarter of 2022, Sogefi recorded impairment losses of € 1.1 million on assets held in Russia. With the exception of these losses, the impact on revenues and margins was not significant.

Regarding the indirect impact of the conflict, Sogefi, like the whole automotive sector, could suffer consequences on production volumes linked to the closure of the factories of the main world manufacturers present in Russia (such as, for example, Renault) and in general the repercussions of a further rise in the prices of raw materials and of increased supply difficulties.

OUTLOOK FOR THE YEAR

Visibility as to the market trend in the next few months of 2022 remains low. The uncertainties related to the evolution of the pandemic, availability and prices of raw materials, transportation and supply logistics from Asian markets, and thus the recovery of the automotive sector have been amplified by the Russian-Ukrainian conflict.

For 2022, however, IHS maintains a forecast of global manufacturing volumes recovering 4.4% from 2021, with Europe at +11.3%, NAFTA at +13%, South America at +9.6% and China essentially breaking even (-0.9%).

With regard to commodity prices, the early months of 2022 have seen a further rise and it is difficult to make forecasts for 2022. It should be noted that in the first quarter of 2022, sales prices were adjusted to reflect the increase in raw material costs recorded in 2021. Faced with a further rise in the cost of raw materials and energy following the outbreak of the Russian-Ukrainian conflict, Sogefi’s management is committed to seeking fair agreements with all its customers, as it did in the first quarter, in order to continue to have sustainable long-term business relationships.

Assuming that there are no further factors causing a serious deterioration in the macro-economic and production scenario (significant tightening of sanctions against Russia, extension of the conflict outside Ukraine, shortages and price rises in energy and raw materials compared to the current ones that would compromise the sustainability of the supply chain), Sogefi confirms its target of achieving operating results for the whole of 2022, excluding non-recurring costs, substantially in line with the result recorded in 2021.

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CIR: results for the year 2021 and launch of share buyback plan

Revenues at € 1,980.7 million, up by 8.7% on 2020

Consolidated EBITDA at € 303.9 million (+34% from € 226.4 million in 2020

Net income at € 18.0 million (€ 16.3 million in 2020)

Reduction of consolidated net debt before IFRS 16 to € 85.6 million (€ 100.0 million at December 31 2020), despite disbursement of € 80.0 million for the Voluntary Public Tender Offer to buy back own shares

Net financial position of the parent company positive for € 332.4 million

Decision taken to launch a share buyback plan on the regulated market for a maximum equivalent of € 17.0 million

Milan, 11 March 2022 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed financial statements and the consolidated financial statements of the group for the year ended December 31 2021 as presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In 2021 business in the sectors in which the CIR Group operates reported a distinct recovery compared to 2020, although there has not yet been a return to the levels prior to the spread of the Covid-19 pandemic.

KOS, which operates in social and healthcare services, after suffering a significant decline in its business in 2020 and first quarter 2021, from May onwards reported a gradual recovery thanks partly to the roll-out of the vaccination plan, which brought the Rehabilitation and Acute activities back to levels close to those of 2019, while the Nursing Home sector has not yet fully recovered either in Italy or in Germany.

Sogefi, active in the production of components for the automotive sector, in 2021 reported growth in revenues where it outperformed the market, recovering most of the decline in revenues of 2020, caused by the generalized temporary suspension of production activities and the collapse in demand due to the pandemic. Profitability and cash generation were higher than in the period preceding the public health crisis, thanks partly to the effective reorganization and cost-cutting plan that has been in place since 2020.

Management of the financial investment portfolio of the parent company reported high returns, due to the favourable performance of all the main financial markets during the year.

In 2021 some significant extraordinary transactions were carried out.

On 6 August 2021 CIR successfully concluded a Voluntary Partial Public Tender Offer to buy back 156,862,745 of its own shares, equal to 12.3% of its share capital, at a price of € 0.51 per share, for a total amount of € 80.0 million.

Sogefi completed the planned disposal of its filtration business in South America as part of its strategy for rationalizing its geographical presence and industrial footprint, with the aim of improving the efficiency and profitability of the group.

The consolidated revenues of the Group came to € 1,980.7 million, posting growth of 8.7% on 2020, thanks to the recovery in the business of both sectors in which the Group operates, and were in line with 2019 sales.

The consolidated gross operating margin (EBITDA) came in at € 303.9 million, equal to 15.3% of revenues, up from 12.4% in 2020 (€ 226.4 million) and was higher than that of 2019 (€ 272.0 million).

Consolidated EBIT came to € 80.9 million (€ 18.1 million in 2020).

The consolidated net result was a positive figure of € 18.0 million, despite the negative impact of € 13.9 million pro-rata from the sale of Sogefi’s Argentinian subsidiary (€ 16.3 million in 2020, with a net capital gain pro-rata of € 32.5 million generated by the sale of Medipass by KOS).

The consolidated financial debt before IFRS 16 was € 85.6 million at the end of the year 2021, lower than at December 31 2020 (€ 100.0 million) and comprised the following:

  • the net debt of the subsidiaries of € 418.0 million, down from € 491.7 million at December 31 2020, thanks to the lower numbers reported by KOS (€ 40.5 million) and Sogefi (€ 33.1 million);
  • the positive net financial position of the Parent Company (including the subsidiaries CIR Investimenti and CIR International) of € 332.4 million, down by € 59.3 million compared to December 31 2020 (€ 391.7 million) after the Voluntary Public Tender Offer to buy back own shares described above, which led to a disbursement of € 80.0 million, which was partly offset by the result for the year of financial asset management.

The total consolidated net financial debt amounted to € 929.9 million at December 31 2021, including the financial payables for rights of use as per IFRS 16 of € 844.3 million, referring mainly to the subsidiary KOS (€ 774.9 million) which operates principally in leased premises.

The shareholders’ equity of the Group stood at € 740.4 million at December 31 2021 (€ 771.0 million at December 31 2020), after the reduction of €80.0 million resulting from the buyback of own shares.

KOS

In 2021 revenues totalled € 660.1 million and were up by 4.5% on 2020, mainly due to the good performance of rehabilitation and the acute sector, which benefited from the recovery of normal hospital activity after the acute phase of the public health emergency.

However, for the Italian RSAs (nursing homes) the effect of the pandemic lasted longer. Partly because of the restrictions imposed by the health authorities, new entries were limited for most of 2020 and the early months of 2021, causing a gradual decline in the number of presences in the first quarter with a gradual recovery in the second part of the year. The average number of presences in 2021 was therefore lower than in 2020 and significantly lower than in 2019.

In the German RSAs the impact of the pandemic, particularly in the early stages, was significantly lower in medical terms and thus the reduction in the number of guests was less pronounced than it was in Italy. Moreover, state subsidies, which involved compensation for the lower revenues and the higher costs incurred, made it possible to neutralize the economic impact of the decline in the number of presences and the higher costs caused by the pandemic.

EBIT came to € 32.4 million, up from € 15.4 million in 2020. The improvement was due to the recovery in rehabilitation and to the higher state subsidies received for the nursing home sector. The result also benefited from non-recurring results, capital gains and other non-operating income of around € 12.0 million (€ 9.6 million in 2020).

KOS reported net income of € 1.4 million (€ 46.7 million in 2020, underpinned by a net capital gain on the sale of Medipass of € 54.4 million).

Free Cash Flow, without considering the effects of IFRS 16, was a positive figure of € 41.0 million, consisting of positive operating cash flow of € 4.0 million, inflows from the disposal of properties of € 53.0 million and investments in the development of new facilities of € 16.0 million.

Net debt at the end of 2021, before the application of IFRS 16, went down to € 160.2 million from € 200.7 million at December 31 2020.

Sogefi

In 2021 world car production reported growth of 2.5%, after a decline of 16.2% in 2020.

Sogefi’s revenues recorded growth of 11% compared to 2020, achieving a distinctly better performance than the market; however revenues have not yet returned to the level of 2019, coming in at -8.3%, a result significantly less negative than the -14.1% for world car production. The year 2021 was also a positive year for commercial activity, and particularly for the diversification of platforms for the future: Sogefi was awarded important contracts in Europe, NAFTA and China for the supply of thermal management products for electric mobility, contracts with new customers focused exclusively on electric products and a significant number of contracts for the supply of filters unrelated to thermal engines (air purification and transmission filters).

In the current context of the generalized increase in the cost of raw materials, transportation and energy, which caused margins to deteriorate in the second half of 2021, Sogefi has started negotiations with all its customers with the aim of adjusting its selling prices in order to continue its commercial relationships in a way that is sustainable in the long term.

Net income from operating activities came in at € 28.6 million and compares with a loss of € 18.4 million in 2020. This improvement was achieved mainly thanks to the recovery in volumes and the reduction of the impact of fixed costs on revenues (16.3% compared to 16.9% in 2020 and 17.2% in 2019) and the reduction of restructuring costs. The net result from operating activities was higher even than that of 2019 (net income of € 13.8 million).

The sale of the filtration business in Argentina generated a negative result of € 24.1 million, of which € 20.8 million came from the reclassification of accrued exchange rate differences from shareholders’ equity to the result for the year, with no impact on either cash or equity. The net result was thus a positive figure of € 2.0 million after a loss of € 35.1 million in 2020 and earnings of € 3.2 million in 2019.

In 2021 Sogefi generated positive Free Cash Flow of € 32.4 million, versus cash absorption of € 38.2 million in the previous year, due to the particular circumstances that occurred in 2020 and particularly to the fall in revenues, which also had an impact on working capital. In 2021 the strong recovery of Free Cash Flow reflected the positive evolution of results and the specific action taken by the Group on working capital.

Net financial debt before IFRS 16 stood at € 258.2 million at December 31 2021, lower than at the end of 2020 (€ 291.3 million) and substantially in line with December 31 2019 (€ 256.2 million).

Financial Management

Thanks to the positive trend of the markets, total net financial income of € 23.1 million was reported with a return of 5.1%. The return on readily convertible assets, i.e. the stock, bond and hedge fund portfolio, rose to 3.3% (€ 12.4 million), while the private equity and minority shareholding portfolio recorded net income of € 10.7 million and gave a return of 13.2%.

Inclusion of ESG values in the strategy

During 2021, all the companies of the Group defined sustainable development plans. These ESG plans are organized around four strategic commitments in the long term, specifically defined for each business. These are: Corporate Governance par excellence, ESG-driven Innovation (i.e. boosting the quality of the care and services of KOS and the development of E-Mobility products for Sogefi), Eco-compatibility of operations (i.e. contribution to decarbonization and a greater circularity in the management of resources), and Individual and Community wellbeing (i.e. training, attention to diversity and equality, safety and quality of the working environment and contribution to the local communities in which the Group operates). The ESG plans and the related KPIs and targets adopted are set out in CIR’s Non-Financial Disclosure (“DNF”), which will be published on the Company’s website, and in the DNFs of Sogefi and KOS, to be published on their respective websites.

Significant events that have occurred since December 31 2021

There have been no significant events since the close of financial year 2021.

Outlook for the year

Given the continuing uncertainty regarding the evolution of the pandemic and the geopolitical situation following the Russian-Ukrainian crisis, visibility as to the performance of the Group businesses in the coming months remains limited.

As far as KOS is concerned, thanks to the vaccination drive and provided there are no further crises relating to the pandemic, it is expected that there could be a return to the level of pre-Covid activity for Rehabilitation and Acute services during this year. For the nursing homes in Italy and Germany, however, the time needed for them to return to levels of full occupation is expected to be structurally longer, lasting at least until 2023. As far as activities in Italy are concerned, the impact of costs will probably continue to be higher than in 2019, even when business has fully recovered, because of contract renewals and cost inflation in general but not to an extent that would compromise the profitability of the business model.

As for the automotive sector, IHS was estimating, before the start of the Ukrainian crisis, a recovery in world car production volumes of 8.5% in 2022 compared to 2021, which would still be lower than in 2019 (-6.8%). Countering this recovery, in 2021 there was a rise in commodity prices that was unprecedented in terms of size and duration, making it difficult to come up with any forecasts and which as things stand at present is continuing in the first half of this year. Within this scenario, Sogefi expects to achieve operating profitability for the whole of 2022, excluding non-recurring charges, substantially in line with that of 2021, thanks to the effects of the incisive action already implemented to reduce the impact of fixed costs and structurally improve profitability and, with regard to Suspensions in particular, the gradual entry into operation of the new plant in Romania. However, the conflict between Russia and Ukraine, to which Sogefi is not directly exposed as it has no presence in the two countries affected, could have an impact on the automotive sector both in terms of demand and supply chains: at present it is not yet possible to foresee such impact.

Dividend proposal

The Board of Directors has decided to put before the Annual General Meeting of the Shareholders the proposal that no dividend be distributed.

Annual General Meeting of the Shareholders

The Annual General Meeting of the Shareholders will be held, in an ordinary session and at a single calling, on 29 April 2022. The Board of Directors at today’s meeting has voted, among other things, to put the following proposals before the Annual General Meeting of the Shareholders:

  • The cancellation (for the part not utilized) and renewal of the authorization of the same Board of Directors, in the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 32 of D.Lgs no. 58/98 (the “TUF”), of Art. 144-bis of CONSOB Resolution no. 11971/1999, of EU Regulation no. 596/2014 (the “MAR”), of EU Delegated Regulation no. 2016/1052, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, for a period of 18 months to buy back a maximum of 76,016,488 of its own shares at a unit price that cannot be more than 15% higher or lower than the benchmark price recorded by the shares on regulated markets on the trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made in accordance with the procedures stated in points (i), (iii) and (iv) of the following paragraph. In any case, when the shares are bought back with 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.
    The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) 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; (iii) 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; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve 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 the MAR.
    The main reasons why this authorization is being renewed are the following: (a) 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 CIR or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) 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”); (c) 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; (d) to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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;
  • The approval of a stock grant plan for 2022 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 carried out. The stock grant plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them an incentive to increase their commitment to improving the performance of the Company.

Share buyback plan

The Board of Directors of CIR has also decided today to take the necessary action to launch a share buyback programme with the terms and conditions described below (the “Buyback Plan”).

The Buyback Plan is in implementation of the authorization given by the Annual General Meeting of the Shareholders held on 30 April 2021 and is in compliance with the aims and the terms stipulated therein and already communicated to the market.

The Buyback Plan has the following characteristics:

  • Aims and procedures through which the buyback can be effected: the Buyback Plan will be implemented for the reasons stated in Art. 5, paragraph 2, lett. a), of the MAR and in the authorization given by the AGM as stated above and the individual purchases must be carried out in compliance with the terms of Art. 132 of the TUF, of Art. 144-bis, paragraph 1, letter b), of CONSOB Regulation no. 11971/99, and must also comply with Art. 5 of the MAR and with EU Delegated Regulation no. 2016/1052;
  • Maximum cash amount allocated to the Buyback Plan and maximum number of shares to be bought back: the purchases will be made, even in part and/or in fractions of the total, for a total disbursement of up to a maximum of Euro 17,000,000.00 (an amount in line with the distributable reserves identified in the pro-forma financial statements for the year ended December 31 2021 approved today by the Board of Directors of CIR) and in any case must not exceed 50,000,000 CIR shares (equal to approximately 3.9% of the share capital of CIR as of the date of this press release);
  • Duration of the Buyback Plan: the purchases will commence at the latest in the week beginning 21 March 2022 and will terminate on 30 October 2022 (unless revoked);
  • Minimum and maximum price: the purchases must be made in compliance with the limits established by EU Delegated Regulation 2016/1052, it remaining understood that – in accordance with the above-mentioned authorization of the AGM of the Company held on 30 April 2021 – the purchase price must not be more than 15% higher or lower than the benchmark price recorded by the CIR share in the Euronext Milan session, organized and managed by Borsa Italiana S.p.A., on the day preceding the completion of each single purchase and, in any case, the price must not be higher than the higher of the last independent transaction and the highest current independent bid price in the same market, in compliance with the terms of Art. 3 of EU Delegated Regulation 2016/1052;
  • Market: the purchases will be made on Euronext Milan, organized and managed by Borsa Italiana S.p.A..

In order to implement the plan, CIR will give a mandate to a qualified intermediary (the “Appointed Intermediary”), who will take the decisions as to the purchases in full autonomy, even in relation to the timing of the transactions and compliance with the price limits stated above.

Information on the transactions effected will be communicated to the market in the terms and following the procedures contained in the rules and regulations in force at the time.

The assignment of the mandate to the Appointed Intermediary and any subsequent changes made to the Buyback Plan will be made known to the public promptly in the terms and following the procedures contained in the rules and regulations in force at the time.

The Company is not required to complete the Plan, which could therefore be suspended, interrupted or modified at any time, for any reason, in compliance with rules and regulations in force at the time.

It should be noted that as of March 10 2022 CIR was holding 179,424,975 of its own shares, representing 14.05% of the total number of shares that make up the Company’s share capital. The subsidiaries do not own any shares in the Company.

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Sogefi: results higher in 2021

Revenues at € 1,320.6 million: up by 11% on 2020
Outperforming the market in all geographical areas

EBITDA margin at 14.6% of revenues higher than the EBITDA margin of 2020 (11.5%) and 2019 (12.1%)

Net income from continuing operations at € 28.6 million (loss of € 18.4 million in 2020 and earnings of € 13.8 million in 2019)

Free Cash Flow positive for € 32.4 million (negative for € 38.2 million in 2020 and for € 8.4 million in 2019)

Milan, February 25 2022 – 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 2021 presented by Chief Executive Frédéric Sipahi.

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

PERFORMANCE OF THE MARKET

In 2021 world car production rose by 2.5% compared to 2020. After the rise of 29.2% in the first half of 2021 compared to the first half of 2020 (impacted by the spread of the Covid-19 pandemic and the resulting lockdown), in the second half global production was significantly lower than that of the same period of 2020 (-16%). It was particularly affected by the difficulties experienced in the sourcing of specific parts (which also involved the temporary closure of certain production sites of some of the top global producers), shortages of raw materials and the sharp rise in the prices of the same.

In 2021 Europe reported the worst performance, with car production at -6.2% compared to 2020; production remained substantially stable in NAFTA (+0.1%) and reported a recovery in China (+4%) and Mercosur (+16.2%).

Global production in 2021 did not see a return to the volumes of the pre-pandemic period, and reported -14.1% on 2019 (Europe -27.9%, NAFTA -20.1% and Mercosur -19.4%); the only exception was China, which did substantially return to the levels of 2019 (-0.6%).

After the fall reported in 2020 and the extremely weak recovery in 2021, IHS is forecasting 8.5% growth in production for 2022.

SOGEFI’S KEY RESULTS FOR 2021

The Group’s revenues recorded growth of 11% compared to 2020, clearly outperforming the market (+2.5%); compared to 2019 revenues were -8.3%, versus -14.1% for car production worldwide.

The recovery of revenues and the action taken to counter the economic impact of the crisis made it possible to close the year with:

  • “Net income from continuing operations” of € 28.6 million, versus a loss of € 18.4 million in 2020,
  • Positive free cash flow of € 32.4 million (a negative € 38.2 million in 2020),
  • Net debt before IFRS16 lower at € 258.2 million (€ 291.3 million at December 31 2020).

The year 2021 was also a positive year for commercial activity.

The Air and Cooling Division obtained important contracts in Europe, NAFTA and China for the supply of thermal management products for electric mobility, which contain greater added value than the average standard value of traditional products for internal combustion engines. More specifically, these new contracts were with a prime German car manufacturer for a new-generation electric platform, with two producers of electric commercial vehicles, one pure electric and the other using fuel cell technology, and with various Chinese car manufacturers of full electric vehicles.

Filtration obtained a significant number of contracts for the supply of air purification Filters and two important contracts in the NAFTA zone for transmission filters.

Suspensions extended its customer portfolio, obtaining contracts with new customers focusing exclusively on electric products. The division also obtained contracts from historical customers for orders that will be produced in the new production plant at Oradea in Romania. Of these it is worth mentioning the first contract signed with one of the principal customers for the production of coil springs in Eastern Europe.

In the current context of generalized increases in the cost of raw materials, transportation and energy, which led to a deterioration in margins in the second half of 2021, Sogefi has started negotiations with all customers aimed at adjusting its sales prices to the situation to a more complete extent than that envisaged by the indexation mechanisms contained in the contracts. Sogefi’s management is determined and confident that it will be able to reach fair agreements with all of its customers in order to continue its commercial relationships in a way that is sustainable in the long term. With some of them this objective has already been reached.

REVENUES

In 2021 Sogefi’s revenues came in at € 1,320.6 million and were up by 11% on 2020.

After growth of 34.7% in the first half, the second half closed with a decline of 6.2% on the same period of 2020, although this was still significantly better than the market’s -16%.

Performance of revenues by geographical area

Revenues rose in all geographical areas: +7.8% in Europe, +4.6% in North America, +22.0% in Asia, +67.9% in South America.

Performance of revenues by Business Unit

The Air and Cooling and Filtration sectors reported revenues close to those reported in 2019. The growth of Air and Cooling compared to 2020 (+8.1%) was due partly to the recovery of the market but partly also to the expansion of the contract portfolio particularly in China, where revenues were up by 18.4% compared to the previous year.

The increase in the revenues of Filtration (+10%) reflects the strong recovery in India as well as the evolution of the market.

Lastly, Suspensions posted revenue growth of 14.7%, but business remains significantly below the levels of the corresponding period of 2019 (-16.6%).

The rise in revenues mainly reflects the good performance in South America and China.

OPERATING RESULT AND NET RESULT

EBITDA came to € 192.5 million, up from € 137.0 million in 2020 and € 174.6 million in 2019; gross profitability (EBITDA / Revenues %) rose to 14.6% from 11.5% in 2020 (13.1% excluding non-recurring restructuring charges) and 12.1% in 2019.

The contribution margin remained stable (30.6% versus 30.8% in 2020 and 30.1% in 2019) and the increase in profitability was due to the decline in the impact of fixed costs on revenues to 16.3% (16.9% in 2020 and 17.2% in 2019) and of restructuring costs. It should be noted that compared to 2019 fixed costs were down by 12.8%, thanks to the action plans put in place. Lastly, the higher EBITDA was partly due to the positive effect of exchange rates (€ +2.5 million in 2021 versus € -4.7 million in 2020).

In conclusion, it should be pointed out that, as was the case in the third quarter, the fourth quarter was negatively affected by the weakness in volumes and the generalized rise in the cost of raw materials, especially steel prices for the production of suspensions, which caused a reduction in the contribution margin for the quarter from 31.5% in 2020 to 28.1% in 2021.

EBIT came to € 58.4 million, up from € 7.1 million in 2020 and € 46.4 million in 2019.

Financial expense, totalling € 17.8 million, was lower than in 2020 (€ 22.1 million) thanks to the reduction in debt and to the recognition of an item of non-recurring financial income (of € 1.2 million); tax expense came to € 13.5 million versus € 3.4 million in 2020.

Net income from operating activity came in at € 28.6 million and compares with a loss of € 18.4 million in 2020 and earnings of € 13.8 million in 2019.

The net result of discontinued operations was a loss of € 24.5 million (a loss of € 16.2 million at December 31 2020) and related to the filtration business in Argentina, which was sold in 2021 and which generated an accounting loss in the income statement of € 24.1 million, of which € 20.8 million due to the restatement of accrued exchange rate differences from shareholders’ equity to the result for the period. This had no impact either on the cash or the equity position.

The net result was a positive € 2.0 million compared to a loss of € 35.1 million in 2020 and net income of € 3.2 million in 2019.

DEBT AND EQUITY

Free Cash Flow was positive for € 32.4 million, versus cash absorption of € 38.2 million in 2020, due to the particular circumstances that occurred in 2020 and more especially to the fall in revenues, which also had an impact on working capital. In 2021 the strong recovery of Free Cash Flow reflected the positive evolution of results and the specific action taken by the Group on working capital.

Net financial debt before IFRS 16 stood at € 258.2 million at December 31 2021, lower than at the end of 2020 (€ 291.3 million) and substantially in line with December 31 2019 (€ 256.2 million).

Including financial payables for rights of use, as per IFRS 16, net debt stood at € 327.6 million at December 31 2021, down from € 358.1 million at December 31 2020 (€ 318.9 million at December 31 2019).

At December 31 2021 the Group had committed credit lines of € 280 million in excess of its requirements (after repaying its convertible bond loan of € 100 million in May).

At December 31 2021 shareholders’ equity, excluding minority interests, stood at € 187.7 million compared to € 133.8 million at December 31 2020 (€ 188.7 million at December 31 2019).

KEY RESULTS OF FOURTH QUARTER 2021

In the fourth quarter of 2021, Sogefi reported revenues of € 330.6 million, with a decline of 8.4% compared to the fourth quarter of 2020, in a market in which production was -13.2%. The fourth quarter, like the third quarter, was affected by the temporary closure of certain production facilities of top global producers; the business unit most affected by the performance of the market was Air and Cooling partly because of its greater exposure to the two markets that suffered the most (Europe and NAFTA).

EBITDA came to € 48.3 million, up from € 38.8 million in the fourth quarter of 2020 and € 43.1 million in 2019. The EBITDA margin was 14.6%, higher than in 2020, but in line excluding the non-recurring expenses of the previous year. The contraction of the contribution margin (from 31.5% in fourth quarter 2020 to 28.1% in fourth quarter 2021) reflects the increase in the cost of raw materials, which had a particular impact on the results of the suspensions business unit; negotiations are in progress with customers to adjust sales prices to the current conditions of the commodity markets.

EBIT was a positive € 8.9 million (€ 3.8 million in fourth quarter 2020).

The net result of operating activity was a positive € 4.3 million, versus a loss of € 2.9 million in the fourth quarter of 2020.

The net result of discontinued operations was a positive € 0.2 million compared to a negative result of € 8 million in the fourth quarter of 2020 (due particularly to the Brazilian Filtration business, which was sold at the end of 2020).

The consolidated net result for the fourth quarter of 2021 was € 3.9 million, compared to a loss of € 12.0 million in the previous year.

IMPACT OF COVID-19 ON THE BUSINESS

In 2021, despite the continuing pandemic crisis, the effects on the market in which the Company operates were less severe than those suffered in 2020. There was, however, a general weakness in demand, which is still lower than in the same period of 2019, particularly in Europe (-27.9%) and NAFTA (-20.1%), and operating difficulties linked to fluctuating production levels and personnel absences caused by contagion and, most of all, by contact with infected people.

During the year 2021, the Sogefi Group continued to apply all the rules for health and safety in the workplace aimed at reducing the risk of contagion, namely social distancing, the use of individual protective equipment and measures to limit the presence of personnel in the workplace, i.e. working from home.

RESULTS OF THE PARENT COMPANY SOGEFI S.P.A.

In financial year 2021 the Company recognized a reversal of an impairment loss on equity investments after conducting an impairment test at December 31 2021. The reversal was for € 68.1 million (recognized to the item “Adjustments to the value of financial assets”), relating to the French subsidiary Sogefi Filtration S.A.. Thanks to this reversal Sogefi S.p.A. realized net income of € 69.9 million in financial year 2021 after reporting a net loss of € 6.2 million in 2020.

SIGNIFICANT EVENTS OCCURRING AFTER DECEMBER 31 2021

No significant events have occurred since the close of the year.

OUTLOOK FOR THE YEAR

Visibility as to the market trend in the next few months remains low, mainly due to the uncertainty, still existing, as to the evolution of the pandemic and the macroeconomic situation.

There are also specific areas of uncertainty regarding the trend of demand, the generalized increase in commodity prices and their availability, as well as logistic difficulties involving transportation and sourcing from Asian markets.

For 2022, after the decline in 2020 and performance in 2021 that was lower than expected at the start of the year, IHS is estimating a recovery in world car production volumes of 8.5% compared to 2021, with Europe +20.8%, Nafta +16.6%, South America +12.5% and China substantially breaking even (+0.9%); despite the expected positive trend, 2022 production would still be lower than that of 2019 (-6.8%), especially in Europe (-12.9%), Nafta (-6.9%) and South America (-9.4%), with only the Asian market at pre-Covid levels (+0.7%).

With regard to commodity prices, given the unprecedented price boom in 2021, it is difficult to make any forecasts for 2022 and the current situation seems to be continuing in the first part of this year. To mitigate the effects of this, the Group has already started resourcing activities, putting in place measures to contain costs and taking commercial action.

In this scenario and in the absence of any currently unforeseeable extraordinary events, Sogefi expects to achieve operating profitability for full year 2022, excluding non-recurring charges, substantially in line with that of 2021, thanks to the effects of the incisive action already implemented to reduce the impact of fixed costs and structurally improve profitability and, with regard to Suspensions in particular, the gradual entry into operation of the new plant in Romania.

DIVIDEND PROPOSAL

The Board of Directors will put before the Annual General Meeting of the Shareholders the proposal that no dividend be distributed.

ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

The Annual General Meeting of the Shareholders of Sogefi will be held at the first call on April 22 2022 and at the second call on April 26 2022.

The Board of Directors has voted to put the following proposals before the Annual General Meeting of the Shareholders:

a) The cancellation and renewal of the authorization of the same Board of Directors, 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, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, 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 trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made in accordance with 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’s date the Company is the owner of 1,993,372 own shares, equal to 1.65% 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 and the rules 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 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 no. 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 that can be used as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the sphere of transactions of interest to the Company (a so-called “stock of shares”); (iii) to engage in action to support market liquidity, optimize capital structure, and remunerate shareholders in particular market situations, 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 or domestic rules, and with the procedures established therein.

b) The approval of a stock grant plan for 2022 aimed at employees of the Company and its subsidiaries, in the terms to be defined by the Board of Directors and notified to the market in sufficient time for any legal obligations to be carried out. The Stock Grant Plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them an incentive to increase their commitment to improving the performance of the Company.

APPOINTMENT OF THE NEW CHIEF FINANCIAL OFFICER AND THE EXECUTIVE RESPONSIBLE FOR THE PREPARATION OF THE COMPANY’S FINANCIAL STATEMENTS

The Board of Directors has approved the appointment, as from May 1 2022, of Olivier Proust as the new Chief Financial Officer and Investor Relator in replacement of Yann Albrand who should be leaving the Company on April 30 2022. Mr Proust has been working for Sogefi since 2008 and is currently in charge of the group’s treasury. Mr Proust owns 8,394 shares in the Company.

It should be noted that Mr Albrand has terminated his relationship with the Company by mutual consent; in connection with the termination of the employment there will be payment of an all-inclusive sum as a negotiated settlement (including the notice period) of euro 307,000 and he will keep the benefits that he was assigned that have not yet vested under the stock grant plans approved by the Company for the years 2018 and 2019.

According to the information available to the Company, Mr Albrand owns 74,517 shares in the Company.

In addition to the position of Chief Financial Officer, Mr Albrand was also the Executive Responsible for the preparation of the Company’s Financial Statements. After obtaining the favourable opinion of the Board of Statutory Auditors, the Board of Directors has resolved to assign the title of Executive Responsible for the preparation of the Company’s Financial Statements to Ms Maria Beatrice De Minicis, who has been in Sogefi since 2004 and is currently in charge of the Company’s consolidated accounts and reporting. Ms De Minicis is the owner of 20,570 shares in the Company.

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