Sogefi: in first quarter 2011 earnings continue to grow

Board of Directors approves results as of March 31 2011


The company is able to report another positive quarter with a double-digit rise in all its economic indicators compared to the same period of  2010

Strong increase in sales in the United States. Growth continues in South America, China and India

Consolidated results of Q1 2011

·         Revenues: € 255.8 million (+19.6% from € 214 million in Q1 2010) ·         Operating income: € 17.9 million (+47.5% from € 12.2 million in Q1 2010) ·         EBITDA: € 25 million (+21.1% from € 20.6 million in Q1 2010) ·         Net income:  € 6.7 million (+76.6% from € 3.8 million in Q1 2010) ·         Net debt: € 166.6 million (€ 164.9 million at 12/31/2010)

Milan, April 19 2011 – The Board of Directors of Sogefi SpA met today under the chairmanship of Rodolfo De Benedetti to examine the consolidated results of the group for the first quarter of 2011.

Sogefi, the automotive components company of the CIR group, is one of the principal world producers in the sectors of filters and flexible suspension components.  

Performance of operations

In the first quarter of 2011 the Sogefi group continued the trend of significant growth in its results which began in the second half of 2009, thanks to the ongoing efficiency enhancing actions put in place by the company and to the recovery in vehicle production levels in all the main world markets.

Regarding the performance of the various markets in the first quarter, in Europe the weakness of domestic demand for vehicles was more than compensated for, in terms of production, by the strong growth in the export of top-of-the-range models, particularly to Asia, from which the German manufacturers in particular were able to benefit.  Weakness remains especially in the Italian and Spanish markets, which are having difficulty in recovering pre-crisis sales levels without incentives.

In the American markets production volumes continue to grow both in the Nafta area and in the Mercosur countries, where the level of demand remains particularly high. The positive trend in production has also been continuing in the Chinese and Indian markets. Performance in Europe and South America was also particularly favourable in the industrial vehicle sector, which consolidated the recovery that began in the second half of 2010.

Consolidated results

In the first quarter of 2011 the Sogefi group reported consolidated revenues of 255.8 million euro, which were up by 19.6% on the figure for 2010 (214 million euro). The greatest contribution to revenues was made by the Suspension Components Division (+28.4% to 138.7 million euro), because it is mainly active in original equipment, while the Filter Division rose by 10.5% with sales of 117.8 million euro.

In the European market the revenues of the Sogefi group rose by 15.8%, reaching 184.5 million euro. In the United States the group benefited from the fact that the production platforms launched last year  were fully up and running (revenues were +145.3% on the same quarter of 2010), while in Mercosur growth was 22.9% with revenues in at 55.9 million euro. Sales have continued to grow significantly in China (+27.3%) and India (+44.2%). In the industrial vehicle sector the group reported a rise in revenues of 43% on the same period of 2010.

Despite a general rise in the prices of commodities and components, which has so far been only partly transferred to selling prices, the profitability of the group has improved thanks to greater volumes of business, to the benefits of the reorganization carried out in the previous year and to the efficiency recovered in the quarter with further action taken to reduce headcount, especially in the Filter Division and in certain European markets.

The consolidated operating result, which came in at 17.9 million euro (7% of revenues), rose by 47.5% compared to the figure of 12.2 million euro (5.7% of revenues) for the same quarter of 2010.

Consolidated EBITDA, despite the presence of restructuring costs of 0.6 million euro, came to 25 million euro (9.8% of revenues), and was up by 21.1% from the 20.6 million (9.6% of revenues) for first quarter  2010. Consolidated EBIT rose to 13.9 million euro (5.4% of revenues) from 9.5 million euro (4.5% of revenues) in the first quarter of last year (+45.7%).

The result before taxes and non-controlling interests rose to 11.7 million euro (7 million euro in first quarter 2010), thanks to the rise in operating margins and the reduction in financial expenses.

The consolidated net income figure for the quarter was 6.7 million euro (2.6% of revenues), and was up by 76.6% compared to the 3.8 million euro (1.8% of revenues) of the same period of 2010.

At March 31 2011 net financial debt stood at 166.6 million euro, substantially unchanged from 164.9 million euro at December 31 2010. The figure is significantly lower than the 188.4 million euro reported at March 31 2010.

Total consolidated equity amounted to 216.2 million euro at March 31 2011 (214.4 million euro at December 31 2010). The group’s share of consolidated equity stood at 198.7 million euro at the end of the first quarter (197.2 million euro at the end of 2010).

The group had 5,646 employees at March 31 2011 (5,574 at the end of 2010).

Outlook for the year

For the whole year the group expects to see a rise in revenues associated with an opportunity to increase profitability compared to 2010, confident of being able to pass the higher cost of raw material and components on to selling prices. In the second part of the year there will be further production reorganization in the filter business, which will generate higher costs than those recorded in the first quarter.

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