Revenues at € 1,219.8m in 9M 2018 (+3.3% at constant exchange rates, outperforming the market; € 1,242.3m in 9M 2017)
EBITDA at € 153.1m (€ 161.9m in 9M 2017)
Net income at € 23.1m (€ 27.9m in 9M 2017)
Net debt at € 286.2m (€ 266.7m at 9/30/2017)
Milan, October 22 2018 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, approved the Interim Financial Report as of September 30 2018.
Sogefi, a company of the CIR Group, is a leading global manufacturer of automotive components in three business segments: Air & Cooling, Filtration and Suspensions.
Laurent Hebenstreit, Chief Executive of Sogefi, said:
“In the first nine months of the year Sogefi has outperformed the market. Profitability declined in Suspensions due to the increase in steel costs. Free cash flow reflects the unfavourable performance of working capital and investments in India and Morocco”.
Revenues up by 3.3% at constant exchange rates
In the first nine months of 2018, the global automotive market reported a slowdown in growth with production rising by 0.8%. Production declined in Europe (-0.4%) because of the weak third quarter (-6%) and in North America (-1.3%). By contrast, it was higher in South America (+7.7%) and in Asia (2.7%), the latter thanks particularly to the good performance of the Indian market and despite the slowdown of the Chinese market.
The considerable movements of the exchange rates of the various currencies in which the group operates, all of which lost significant value against the Euro, had a strong negative impact on the evolution of the main economic indicators and particularly on revenues.
In this environment, in the first nine months of the year Sogefi reported revenues of € 1,219.8 million, up 3.3% at constant exchange rates, outperforming the market; at current exchange rates revenues declined by 1.8% compared to the same period of 2017.
Revenues by geographical areas
Source: Sogefi and IHS data
At constant exchange rates sales in Europe were substantially stable (-0.4%) but were up in North America, Asia and South America (+5.3%, +9.5% and +16.2% respectively).
Performance of the three Business Units
Suspensions posted growth of 5.3% (-0.3% at current exchange rates mainly because of the loss in value of the South American currencies), Filtration grew by 3.1% (-3.2% at current exchange rates due to the South American currencies) while, lastly, Air & Cooling sales grew by 0.7% (-2.4% at current exchange rates, affected by the decline in car production in North America and the lower value of the US Dollar).
Operating results and net income
EBITDA came in at € 153.1 million, compared to € 161.9 million in the first nine months of 2017, with profitability (EBITDA/revenues) edging down from 13% to 12.6%. The main factors determining this evolution (despite the positive effect of € 6.6 million relating to the final settlement of the Systèmes Moteurs S.A.S. claims) were the exchange rates (with a negative effect of € 6.4 million) and the higher steel prices, which had a negative impact of around € 9 million on the Suspensions result.
EBIT was € 63.7 million down from € 70.3 million in the first nine months of 2017 and accounts for 5.2% of revenues (compared to 5.7% in 2017).
Net income before taxes and non-controlling interests was € 43.9 million (€ 51.1 million in the first nine months of 2017), after financial expense of € 19.8 million in 2018 versus € 19.2 million in 2017.
Net income was € 23.1 million versus € 27.9 million in the first nine months of 2017 (1.9% of sales versus 2.2% in 2017), after € 18.3 million of tax expense in 2018 versus € 20.3 million in the previous year.
Net debt
Free cash flow amounted to a negative € 22.7 million compared to a positive € 32.5 million in the same period of 2017. The difference is mainly due to the unfavourable trend of working capital, considered to be temporary (€ 18 million), the acquisition of the minority interests in the Indian subsidiary Sogefi M.N.R. Engine Systems India Pvt Ltd, in constant and profitable growth (€ 16.7 million) and the building of the new production site in Morocco (€ 12 million), which will start operating in Q4 2018, as well as the impact on free cash flow of the weaker results from Suspensions.
Net financial debt stood at € 286.2 million at September 30 2018 versus € 264 million at December 31 2017 and € 266.7 million at September 30 2017.
Shareholders’ equity
At September 30 2018 Shareholders’ equity excluding minority interests amounted to € 191.4 million (€ 177.4 million at December 31 2017).
Employees
The Sogefi group had 7,044 employees at September 30 2018 compared to 6,947 at December 31 2017.
Results of the parent company Sogefi S.p.A.
In the first nine months of the year 2018 the parent company Sogefi S.p.A. reported net income of € 23.3 million, up from € 17.9 million in the same period of the previous year. The increase was due mainly to the higher dividends distributed by the subsidiaries (€ 4 million) and to lower non-operating charges (€ 1.4 million).
Outlook for the year
Despite the current uncertainties of the global car market, the Group confirms the expectation that it will outperform the market at constant exchange rates. The Group expects to achieve a full year net result in line with that of 2017 despite the increases in the cost of raw materials and the adverse impact of exchange rates.
The Group also expects to have a positive free cash flow in the fourth quarter.
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The Executive responsible for the preparation of the Company’s financial statements, Yann Albrand, hereby declares, in compliance with the terms of paragraph 2 of Article 154-bis of the Finance Consolidation Act (TUF), that the accounting figures contained in this press release correspond to the results documented in the Company’s accounts and general ledger.
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