Board of Directors approves results as of June 30 2018
SOGEFI (CIR GROUP):
Revenues at € 839.1m in H1 2018 (+3.2% at constant exchange rates, outperforming the market; € 857.5m in H1 2017)
EBITDA at € 104m (€ 114m in H1 2017)
Net debt lower at € 259.6m (€ 264m at 31/12/2017)
Milan, July 24 2018 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, approved the Semi-Annual Financial Report as of June 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 half of 2018 Sogefi outperformed the market. Profitability increased in Filtration and Air & Cooling whilst it declined in Suspensions due to the increase in steel costs”.
Revenues up by 3.2% at constant exchange rates
In first half of 2018, the global automotive market reported a growth in production of 1.7%. Production grew in Europe (+1.8%), in Asia (+4.2% thanks to the recovery of the Chinese market) and in South America (+10.7%). By contrast in North America the market continued to decline (-2.9%).
The considerable movements of the exchange rates of currencies other than the Euro in which the group operates, all of which lost significant value, had a strong impact on the evolution of the main economic indicators and particularly on revenues.
In this environment, in H1 2018 Sogefi reported revenues of € 839.1 million, up 3.2% at constant exchange rates but down by 2.1% at historical exchange rates compared with H1 2017.
Revenues grow in all geographical areas
Business in Europe and North America was slightly up compared to the previous year (+0.7% and +1.6% respectively at constant exchange) and grew significantly in Asia and in South America (+10% and 13.5% respectively at constant exchange rates).
Performance of the three Business Units
Suspensions posted growth of 7.1% at constant exchange rates (+1.9% at current exchange mainly related to the depreciation of the South American currencies), Filtration grew by 2.7% at constant exchange rates (but declined by 4% due to the fall in value of the South American currencies) while Air & Cooling sales declined -1.2% at constant exchange rates (-5.1% at current exchange rates affected by the decline in car production and the trend of the Canadian Dollar).
Operating results and net income
EBITDA came in at € 104.0 million, down from the first half of 2017 (€ 114.0 million); the decline is related to the trend of exchange rates (with a total effect of € 5.4 million) and the negative impact of higher steel prices (€ 6.0 million) on Suspensions. Profitability (EBITDA/revenues) declined from 13.3% to 12.4%.
EBIT was € 44.4 million down from € 49.2 million in the first half of 2017 and represents 5.3% of revenues (5.7% in the first half of 2017). First half 2017 included € 6.0 million of write-downs of the fixed assets of the Brazilian operations.
Net income before taxes and non-controlling interests was € 30.9 million (€ 36.4 million in the first half of 2017), after financial expenses of € 13.5 million vs € 12.8 million in the same period of 2017.
Net income was € 17.0 million vs € 19.4 million in first half 2017 (2% vs 2.3% in 2017), after € 11.8 million of tax expense in 2018 vs € 14.9 million in 2017.
Regarding the risks resulting from the claims made against Sogefi Air & Cooling S.A.S. (formerly Systèmes Moteurs S.A.S.), in the first half of 2018 the situation remained unchanged.
Net debt
Free Cash Flow in the first half of 2018 amounted to a positive € 3.9 million down from € 19.0 million in the same period of 2017. The decline is mainly linked to the lower EBITDA and the cash-out relating to the start-up of the new plant in Morocco (around € 9.0 million) which will start operating in Q4 2018.
Net financial debt at June 30 2018 stood at € 259.6 million, showing an improvement of € 4.4 million compared to December 31 2017 (€ 264.0 million) and of € 20.8 million compared to June 30 2017 (€ 280.4 million).
Shareholders’ equity
At June 30 2018 Shareholders’ equity excluding minority interests amounted to € 190.8 million (€ 177.4 million at December 31 2017).
Employees
The Sogefi group had 7,040 employees at June 30 2018 compared to 6,947 at December 31 2017.
Results of the parent company Sogefi S.p.A.
In the first half of the year 2018 the parent company Sogefi S.p.A. reported net income of € 24.2 million, up from € 21.5 million in the same period of 2017. The increase compared to first half 2017 was due mainly to the higher dividends distributed by the subsidiaries (€ 1.5 million) together with lower non-operating charges (€ 1.0 million).
Net debt stood at € 223.8 million at June 30 2018 (€ 257.8 million at December 31 2017).
The company’s equity totalled € 240.5 million at June 30 2018 (€ 214.5 million at December 31 2017).
Outlook for the year
Despite the current uncertainties of the global car market, the group confirms the expectation that it will moderately outperform the market at constant exchange rates thanks to the growth initiatives in Mexico (Suspensions) and Morocco (Filtration). The group also foresees a net result on a full year basis in line with that of 2017 despite the increases in the cost of raw materials and the adverse exchange rates.
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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 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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