Sogefi: results for first quarter 2020

Revenues at € 350.2 million, -8.8% (market -24.4%)

Revenues +1% in first 2 months and -30% in March, due to Covid-19

EBITDA at € 34.9 million, 10% of sales (10.6% in first quarter 2019)

Net debt at € 256.7 million (€ 262.1 million at 31/03/2019)

Milan, April 20 2020 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, approved the Interim Financial Report of the group as of March 31 2020 as presented by Chief Executive Officer Mauro Fenzi.   

Sogefi, a company of the CIR Group, is one of the main world producers of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.


In the first quarter of 2020, the world car market has reported rates of decline previously seen only during the crisis of 2009. World production fell by 24.4% compared to the first quarter of 2019: -21.3% in Europe, -10.8% in North America, -44.7% in Asia and -16.3% in South America. In March the decline was -38.2%, with Europe posting -48.3%.

The exceptional performance described reflects the impact of the spread, first in China and then in the rest of the world, of the Covid-19 pandemic and the consequent and necessary restrictive measures adopted by local governments or independently by businesses with the aim of protecting their workers and the population at large. These measures led to an almost total suspension of non-essential production activities and in particular of automotive production. This shutdown took place first of all in China and subsequently in the remaining geographical areas during the month of March. Currently, business resumed in China in the middle of March, with reduced volumes, while shutdown continues in the remaining areas with the timing and methods of reopening remaining totally uncertain. It should also be noted that the automotive market, even before the spread of the pandemic, had already proved to be in a period of weakness after the inversion of the trend that took place in mid-2018, with world production decreasing by 5.8% in 2019 and still declining at the beginning of 2020.

In this context Sogefi suspended production first in China and then, in the second half of March, in all of its facilities except for those in the USA, which remained partially active. At the present time production in China has started up again, after almost all of its main customers had also opened up for business.

During the first quarter, the priority of the company was the safety of its workforce. From the moment in which news of the Covid-19 phenomenon in China was received, action was taken immediately to reduce the risk of contagion from relations with China, and to encourage smart-working. Subsequently all the health and safety precautions defined and required by the various local authorities were implemented. 

Moreover, the company is doing all it can to manage the crisis and protect the company, focusing on continuing operations, through an assessment of liquidity, disbursement-reducing plans, cost cutting and reducing investments that are not strictly necessary.


In the first quarter of 2020 Sogefi reported revenues of € 350.2 million, which were down by 10.2% at historical exchange rates and by 8.8% at constant exchange rates compared to the first quarter of 2019. In the first two months of the year revenues at constant exchange rates had shown growth of 1% thanks to the good performance of all geographical areas except for China. In March, given the situation caused by the Covid-19 pandemic, sales contracted by 30% and the decline affected all geographical areas and all divisions.

The decline in the quarter (-8.8% at constant exchange rates) was overall much less than that reported by the market (-24.4%).

Performance of revenues by geographical area

By geographical area, revenues at constant exchange rates were down by 9% in Europe, versus the market’s 21.3%, thanks partly to the resilience of After Market sales, and by 4% in North America, compared to the market’s -10.8%, thanks to the new production sites started up in the first two months of the year.

Performance of revenues by Business Unit

By business sector, Filtration reported growth of 1.8% at constant exchange rates, bucking the market trend thanks to the contribution of the new production site in Morocco and the fact that Aftermarket and OES sales held up until March. Air and Cooling reported a more modest decline than the market (-8.2% at current exchange rates and -8.7% at constant rates), with revenues underpinned by the new contracts acquired in North America, while the revenues of Suspensions reported a decline of 18.5% (-20.9% at constant exchange rates), affected mainly by the market difficulties in China and the suspension of production in Europe a few days earlier than suspension of the production of engine components.


EBITDA for the first quarter of 2020 came in at € 34.9 million, versus € 41.3 million in the corresponding period of 2019; profitability (EBITDA/Revenues %) was 10% and was lower than the 10.6% reported in the same period of the previous year. The performance of the first two months showed an improvement in profitability but the dramatic fall in volumes in March, following suspension of production activities, had a significant impact partly due to the time required to implement the cost-cutting measures. The evolution of EBITDA in the first quarter included an overall result that held up well in Europe thanks to the first two months of the year whereas evolution was negative in China due to the collapse of business, in South America due to the economic situation particularly in Argentina and the impact of exchange rates against the local currencies, and in North America mainly because of exchange rates.

EBIT came to € 3.7 million, down from € 11.3 million in the first quarter of 2019. The reduction in EBIT came in March with the collapse of volumes, and included the negative effect of exchange rates for € 5.3 million reported by the group’s businesses in North and South America.

The net result was a negative € 5.6 million versus net income of € 1.6 million in the first quarter of 2019, after tax expense of € 2.5 million, compared to € 3.6 million in the previous year.


Free Cash Flow was positive for € 5.4 million in the first quarter of 2020 compared to -€ 9.1 million in the first quarter of 2019, thanks to a decidedly more favourable performance of working capital.

Net financial debt before IFRS 16 stood at € 256.7 million at March 31 2020 and was substantially unchanged from € 256.2 million at the end of 2019 and lower than the € 262.1 million reported at March 31 2019. Including the amount of € 56.7 million resulting from the application of IFRS 16, the net debt figure at March 31 2020 amounted to € 313.4 million, down from € 318.9 million at December 31 2019.

At March 31 2020 the Group had committed credit lines of € 298.0 million in excess of its net debt figure.

Equity, excluding minority shareholder interests, amounted to € 181.1 million at March 31 2020 (€ 188.7 million at December 31 2019).


The parent company Sogefi S.p.A. reported a net loss of € 2.8 million in the first quarter of 2020 (-€ 3.2 million in the same period of the previous year).


In an environment with extremely limited visibility, the most recent sector sources are estimating that world car production may fall by between 20% and 25% in 2020 according to different scenarios as to the effects of Covid-19.

Indeed at present all the elements that contribute to the formulation of forecasts for the year remain totally uncertain: the evolution of the pandemic, the decisions to be made by the authorities on the subject of resuming production activity, today in lockdown, and lastly, following the possible startup of activity, the reaction of parts of the world. At present the circumstances described above make any forecast that the company could make highly uncertain.

The group is focused on doing all it can to manage the crisis: it has put in place actions to reduce costs and limit as far as possible current costs and investments that are not strictly necessary, it regularly assesses liquidity positions, keeping the Board of Directors informed, liaising with its financial partners, and is preparing to start operating again, introducing higher safety standards for personnel and cost flexibility in relation to volumes that will be affected by circumstances for a certain period of time.

However, both for the period of closure and the first months after business starts up again there will be significant economic losses that will also be reflected in an increase in net debt.

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