Outlook

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.

SOURCE: Financial Report 2021