Board of Directors approves results as of December 31 2011
SOGEFI: REVENUES AT 1.16 BN (+25.3%), ALL TIME HIGH FOR THE GROUP
MARGINS POST DOUBLE-DIGIT GROWTH, NET INCOME AT 24.7 MLN (+31.4%)
Despite the slowdown of the economy in the last quarter, sales were driven by the acquisition of Systèmes Moteurs, consolidated in August,
and by the organic growth of the businesses. Pro-forma revenues at 1,335 million euro
The Group continues to expand in extra-European countries: revenues up significantly in North America (+266.1%), Mercosur (+9.6%), China (+36.4%) and India (+37.6%).
Strong growth of profitability in the Suspension Components Division
Board of Directors proposes distribution of dividend of 0.13 euro per share
Consolidated results for financial year 2011
Revenues: € 1,158.4 million (+25.3% from € 924.7 million in 2010
Operating income: € 89.1 million (+31.9% from € 67.5 million in 2010)
EBITDA: € 108.3 million (+24.9% from € 86.7 million in 2010)
Net income: € 24.7 million (+31.4% from € 18.8 million in 2010)
Net debt: € 299.8 million (€ 325.3 million at 09/30/2011)
Milan, February 23 2012 – The Board of Directors of Sogefi SpA, which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed statutory financial statements and the consolidated financial statements of the group for financial year 2011.
Sogefi, the automotive components company of the CIR group, is one of the main world producers of engine systems and suspension components with a production presence with 43 operations in 18 countries and 14 commercial offices.
Performance of operations
In 2011 production volumes of cars and industrial vehicles at global level only partly benefited from the good performance in the first half of the year because of the slowdown in the economy that took place in the later part of the year. The highest impact was reported in the European market with a decline of 1.7% in car registrations for the whole year compared to 2010.
The South American, Chinese and Indian markets, while continuing their positive trend, showed lower growth rates than those of the previous three years. Strong growth, however, was seen in the North American market, where all the main constructors reported higher levels of production and sales.
Despite the complex market scenario and the decline in demand recorded in the later part of the year, the Sogefi group closed 2011 with double-digit growth in all its main economic indicators.
In particular, the group posted revenues of 1,158 million euro, reaching an all-time high for the thirty years of its history. This result was obtained thanks to the acquisition of the businesses of Systèmes Moteurs S.A.S., which was consolidated as from August 1 2011, and to the organic growth of the businesses of the group.
The acquisition of Systèmes Moteurs enabled Sogefi to achieve three important industrial objectives: the extension of its product lines into engine air and cooling systems; higher penetration in North America, China and India; a greater presence among German prestige car manufacturers.
Consolidated results
Revenues for 2011 came in at 1,158.4 million euro, and were up by 25.3% from the figure of 924.7 million euro in 2010. The rise was due to the acquisition of Systèmes Moteurs and to the organic growth of the businesses of the group. In fact on the same basis of consolidation as last year revenues would have been 1,021.2 million euro, with a rise of 10.4%. Pro-forma revenues, including the businesses of Systèmes Moteurs in the consolidation as from January 1 2011, would be 1,335 million euro.
In 2011 Sogefi continued its process of growth in extra-European markets, making significant progress in Mercosur (+9.6%), North America (+266.1% thanks to the contribution of Systèmes Moteurs; +46.1% with the same consolidation as last year), China (+36.4%) and India (+37.6%).
The year was characterized by a higher impact of the cost of materials (especially steel), which was almost all passed on to selling prices. This impact, even in relation to the higher impact on the activities of Systèmes Moteurs, came to 49.8% compared to 46% last year. By contrast, the ratio of labour costs to total sales revenues fell by 24.6% to 22.9%.
The operating result was 89.1 million euro, up by 31.9% on the figure for 2010 (67.5 million), with a ratio to sales of 7.7% (7.3% in 2010). With the same consolidation as last year, operating income would have been 78.6 million euro (7.7% of sales), with a rise of 16.4%.
During the year reorganization continued to cut structure costs. More specifically, the personnel at the Llantrisant plant (Wales) was downsized considerably and there were other minor reorganizations in most of the companies of the group. Total restructuring costs came to 8.8 million euro compared to 12 million euro in 2010. The restructuring action also includes non-operating costs of 3.4 million euro for the writedowns of assets. Non-operating costs also include disbursements of 4.4 million euro related to the acquisition of Systèmes Moteurs.
EBITDA for the year was 108.3 million euro (9.3% of sales revenues), up by 24.9% from 86.7 million euro in 2010 (9.4% of sales). With the same consolidation as last year, excluding the businesses of Systèmes Moteurs and the acquisition costs, EBITDA would have been 99.8 million euro (9.8% of sales).
Pro-forma EBITDA for 2011, including the businesses of Systèmes Moteurs from January 1 2011, would be 123.1 million euro (9.2% of pro-forma revenues).
EBIT rose to 59.5 million euro (5.1% of sales), up from 41.8 million euro in 2010 (4.5% of sales), posting growth of 42.5%. With the same consolidation as last year, excluding the businesses of Systèmes Moteurs and the acquisition costs, EBIT would have been 55.9 million euro (5.5% of sales).
Net income came in at 24.7 million euro and was up 31.4% on the figure for the previous year (18.8 million euro).
Net debt stood at 299.8 million euro at December 31 2011, down sharply from the figure of 325.3 million reported at September 30. The rise compared to the figure at the end of 2010 (164.9 million euro) was due mainly to the acquisition of Systèmes Moteurs and to the payment of dividends of 16.1 million euro.
Consolidated equity stood at 195.9 million euro at December 31 2011 (197.2 million at December 31 2010).
The group had 6,708 employees, of which 1,187 from Systèmes Moteurs, on its books at December 31 2011 up from 5,574 at December 31 2010.
Engine Systems Division
The revenues of the Engine Systems Division came to 611.5 million euro (+31.5%), including a contribution of 135.7 million euro from the businesses of Systèmes Moteurs in the last five months of the year. With the same consolidation as last year revenues would have been 475.9 million euro (+2.3%). Weak demand in the European independent aftermarket was more than compensated by a rise in all markets in the original equipment (OEM) and OES aftermarket (Europe +4.2%, Mercosur +5.8%, United States +45.8%, China +183.9%, India +22.2%).
Although the profitability of the division with the new consolidation area is higher in absolute terms, it is lower in terms of ratio to sales because of the decline in sales (-4.1%) in the most profitable market, that of the independent aftermarket. EBITDA and EBIT were also affected by the costs incurred for the reorganization of the Welsh plant at Llantrisant (10.3 million euro). EBITDA came in at 47 million euro (+19.9%) while EBIT came to 23 million (+18.4%).
The Air filter and Cooling businesses, corresponding to the companies acquired with Systèmes Moteurs, in the last five months of the year (after entering the Sogefi consolidation) reported revenues of 135.7 million euro, EBITDA of 12.3 million euro and EBIT of 7.3 million euro.
Suspension Components Division
The Suspension Components Division closed 2011 with strong growth thanks to the rise in volumes in both its sectors of activity (cars and industrial vehicles) in the first part of the year and to its ability to offset the higher cost of steel by raising its selling prices.
Revenues rose by 18.6% (+15.6% for the light commercial vehicle segment and +35.7% for the industrial vehicle sector) to 547.7 million euro, from 461.6 million euro in 2010.
Profitability improved at all levels from the previous year, thanks to greater activity in the more profitable industrial vehicle market, the reduction in structure costs and the already mentioned upward adjustment of prices in line with the higher cost of the raw material. EBITDA was 12.5% of revenues, climbing to 68.3 million euro (+31.2%), while EBIT rose to 8.1% of revenues (44.1 million euro, up by 60.2% on 2010).
Results of the parent company of the group Sogefi SpA
The parent company Sogefi SpA closed 2011 with net income of 10.5 million euro, down from 12.4 million in the previous year. Despite the higher dividend flow received than in 2010, the lower figure was due essentially to the costs incurred for the acquisition of Systèmes Moteurs, to the writedown of the Italian investee Sogefi Rejna SpA for 5.5 million euro to bring it into line with the results of the impairment test carried out at December 31, and to higher financial expense.
Net debt stood at 254.7 million euro at December 31 2011, with a rise of 135.2 million euro from the figure at December 31 2010. The change was mainly due to the disbursement made for the acquisition of Systèmes Moteurs.
Outlook for the year 2012
2012 began in a recessionary scenario in Europe, the group’s main market, and with slower growth in other important countries such as Brazil and China. Despite this, the group expects to see higher revenues and income in 2012 than in 2011 thanks partly to the fact that the Systèmes Moteurs businesses will be in the consolidation for the whole year. At present no price rises are expected for the main commodities. Management will as always be focusing on a greater flexibility of production resources and on reducing cost factors to counter any significant decline in business and revenues which cannot be envisaged today.
Proposed dividend
The Board of Directors will propose that the Shareholders’ Meeting approve the distribution of a dividend of 0.13 euro per share (the same as in 2011), which will be paid out as from May 4 2012 against presentation of coupon no. 30 on April 30 2012.
Shareholders’ Meeting
The Meeting of the Shareholders of Sogefi has been convened at the first call for April 19 2012 and at the second call for April 20 2012. The Board of Directors has specifically resolved:
– To propose that the Shareholders Meeting cancel and renew its authorization of the Board of Directors for a period of 18 months to buy back a maximum of 10 million of the company’s own shares (including 3,486,229 shares already held as of today, corresponding to 2.99% of the ordinary share capital) at a unit price that cannot be more than 10% higher or lower than the official price of the shares recorded at the trading session on the regulated market prior to that of each individual transaction. The main reasons why this authorization is being renewed are the possibility of investing in shares of the company at prices below their actual value, based on the real economic value of its equity and its income generating prospects and also of being able to use the shares bought back for the Company’s share-based compensation plans.
– To put forward for approval by the Shareholders’ Meeting a stock grant plan for 2012 for employees of the company and its subsidiaries and the Chief Executive Officer of the company for a maximum of 1,600,000 conditional rights, each of which will give the beneficiaries the right to be assigned 1 Sogefi share free of charge. The shares assigned will be the own shares held by the Company as treasury stock.
Cooptation of a Director
The Board has coopted as Director Mr Gerardo Benuzzi to replace Mr Alberto Piaser, who resigned the post on February 1 2012. Mr Benuzzi will remain in office until the next Shareholders’ Meeting.
The Shareholders’ Meeting will be called upon to approve the appointment of a Director and to renew the appointment of the Board of Statutory Auditors.
The executive responsible for the preparation of the company’s financial statements, Giancarlo Coppa, hereby declares, in compliance with the terms of paragraph 2 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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