Sogefi (CIR Group): net income at € 7.4 m in 9M 2015 (- € 5.8 m in 9M 2014)

Board of Directors approves results as of September 30 2015


Revenues at € 1.1bn up by 11.5% in 9M 2015 (+8.7% like for like)

Strong growth in Europe (+9.3%) and North America (+23.2%)
EBITDA at € 91.3m up 13.1% in 9M

Net income at € +7.4m (loss of € -5.8m in 9M 2014)

New product-oriented organization
Three business units: Suspensions, Filtration and Air&Cooling
Leaner central structures: new Product Innovation and Marketing Division set up

Milan, October 23 2015
– 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 September 30 2015.

Laurent Hebenstreit, Sogefi’s Chief Executive Officer, made the following statement:

“Third quarter confirms the positive revenue trend of the first half of the year driven by robust organic growth in Europe and North America and by resilience in South America despite continuing market weakness. Sogefi in October deployed a new, lean, product-oriented organization with three Business Units: Suspensions, Filtration and Air&Cooling. The central management divisions have been reduced from seven to three: Finance, Information Systems and Administration; Human Resources; Product Innovation and Marketing. The new organization will enable Sogefi to strengthen its competitiveness, leveraging on quality, efficiency and innovation. Improving profitability is a top priority for the Group”.

Sales up 10.9% in Q3 and 11.5% in 9M 2015

Automotive production in the first nine months of 2015 rose 1%, benefiting from the robust recovery in the European market (+6.1%) and from the continuing expansion in North America (+3.0%). Production in Asia slowed to +2.5% as a consequence of the decline recorded in China in Q3 (-5%). In South America recession continued with production down by 15%.
In this environment Sogefi reported significant revenue growth in the first nine months of 2015 (+11.5%, + 8.7% on a like-for-like basis) thanks to the positive contribution of all business units and geographical areas, with the exception of Latin America.

Sales by geographical area: robust growth in Europe and North America

Europe, which represents the group’s main market, showed significant growth of +9.3% in the first nine months of 2015 and +6.7% in Q3 alone, driven by a market recovery with a positive contribution from all areas of the business.

In North America Sogefi is outperforming the market, benefiting from its positioning with regard to North American car manufacturers which led to an acceleration of sales growth in Q3 2015 of +30.6% on a like- for-like basis.

In South America, despite the market decline, sales in the quarter grew 7.6% on a like-for-like basis (-4.5% including the forex effect) thanks to Sogefi’s business resilience and to the positive contribution of the suspension business.

In Asia, despite the slowdown that affected the Chinese market, Sogefi experienced in the quarter a 10.2% growth in sales on a like-for-like basis.

Sales by client

The main clients of Sogefi are Ford, FCA, Renault/Nissan, PSA, Daimler and GM. Almost all clients recorded growth in sales in the first nine months of 2015.

Sales by business unit: significant growth in Q3 and 9M
In the first nine months of 2015 all business units contributed with solid revenue growth: Suspensions sales increased +11% versus the previous year, Filtration +13.7% and Air&Cooling +9.5%.

In the third quarter, sales of the Suspensions business unit grew by 10.6% on a like-for-like basis in Q3 benefiting from the positive momentum in Europe and from an increased market share in South America.

Sales of the Filtration business unit increased by 10.2% on a like-for-like basis in the third quarter underpinned by the European business, the aftermarket and the growth in North America. OEM sales of filters specifically for diesel engines account for less than 10% of total Filtration revenues.

Air & Cooling sales grew in the quarter thanks to the increased market share in North America and Europe.

Operating results and net income for 9M
in the first nine months of 2015 increased 13.1% to € 91.3 million (8.1% of sales) compared to the first nine months of 2014.
Non-recurring expenses of € 16.8 million were recorded in the period (€ 17.9 million in the corresponding period of 2014, all relating to restructuring),  of which € 11.8 million in Q2 for an Air&Cooling provision for product warranties of Systèmes Moteurs and € 4 million for restructuring costs. 
In particular Q3 EBITDA was impacted by higher non-operating costs, mainly referring to exchange rate losses, net of which the figure would have been in line with the trend experienced in H1.

The review of the risks of the Air&Cooling warranties issue in Q3 gave rise to no variation in the provision.

Consolidated EBIT
amounted to € 43.2 million and was up 18.4% on the first nine months of 2014.

The result before taxes and minority interests was a positive figure of € 19.6 million (€ 6.5 million in the first nine months of 2014) after net financial expense of € 23.6 million.

The rise in revenues, the better absorption of fixed costs (the ratio to revenues went down from 18% to 17.1%), together with lower net financial expense enabled Sogefi to achieve a positive net result for the first nine months of 2015 of € 7.4 million, compared to a loss of € 5.8 million in the same period of 2014.

Shareholders’ equity

At September 30 2015 shareholders’ equity excluding minority interests amounted to € 173.5 million (€ 161.2 million at December 31 2014).

Net debt comparable with last year

Net financial debt
stood at € 339.7 million at September 30 2015 and was comparable with the figure reported at the end of September 2014 (€ 348.5 million).

The Sogefi group had 6,689 employees at September 30 2015 compared to 6,668 at December 31 2014.

Outlook for the year

Sogefi expects the positive trends seen in its main markets, particularly North America and Europe, to continue. Also in China and India the company should achieve further growth, while in South America market conditions remain difficult.

Stock Grant Plan

The Board of Directors, on the strength of the authorization given to it by the Shareholders’ Meeting held on April 20 2015, implemented Stock Grant Plan 2015 by assigning 441,004 rights.

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