Sogefi

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- 15:15 CEST

Sogefi: Resignation of the CEO and General Manager

Milan, 23 July 2024 – Sogefi S.p.A. informs that Frédéric Sipahi has resigned as CEO and General Manager in order to undertake a new and different professional project.

The Board of Directors thanked Frédéric Sipahi for his contribution to the improvement of the group’s results over the last few years and to the sale of Filtration, completed in May.

The Board of Directors believes that, taking into account the simplification of the group, now made of two Business Units, Air & Cooling and Suspensions, following the resignation of the CEO, the priority going forward is to ensure a strong operational management of the BUs, focused on the specific challenges of each one.

In particular, the Board of Directors has entrusted the management of the Air & Cooling BU to Michael Sebagh, currently NAFTA General Manager. Michael Sebagh has a long career at Sogefi Air & Cooling and has been responsible for the development of North America, currently the BU’s first market, which generates approximately 50% of global turnover. With an in-depth knowledge of products and customers, Michael Sebagh will have the task of boosting the European market and further developing the business in China.

As regards Suspensions, coordination remains entrusted to Frédéric Muller, General Manager Europe, India and business line. Frédéric Muller has consolidated experience in the Suspension sector, of which he was formerly Sales Director and then has been covering his current role since July 2023.

The supervision of the strategic and financial activities carried out by the holding company Sogefi S.p.A., will be directly assumed, in continuity with what has been done so far, by the Executive Chairman of the Company, Monica Mondardini.

The Board of Directors believes that the new organizational structure meets the current needs of the Group; any further development will be promptly communicated to the market.

Finally, the Board of Directors is currently evaluating to proceed with the appointment by co-optation of a new board member within a next suitable board meeting, so as to reinstate the number of directors decided by the shareholders’ meeting.

* * *

Mr. Sipahi’s resignation from his role of CEO will be effective end July 2024 and from his role of General Manager end August 2024. The Company has decided to activate the non-compete clause provided for under his employment contract, for a duration of one year, which entails the payment of a total gross amount of euro 300.000, paid on a monthly basis starting from september 2024. Furthermore, the Company will pay euro 50.000 gross, within September 2024, in consideration for the customary reciprocal waivers. Based on the information available as of the date hereof, Mr. Sipahi owns n. 96.834 Sogefi shares, and could receive additional Sogefi shares, up to maximum n. 48.958 shares, as a result of the vesting, within the termination date of his employment, of the grants provided under the rules of the stock grant plans currently in force.

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- 15:10 CEST

Sogefi: Results for first half 2024

Revenues: -2.7% at € 524.1 million

EBIT: increased to € 27.8 million (€ 13.8 million in first half 2023)

Net income at € 145.8 million, including the effects of the sale of Filtration

Free Cash Flow from continuing operations € 20.7 million (€ 3.1 million in first half 2023)

Free Cash Flow from Filtration € 321,8 million

NFP before IFRS 16 at 30 June positive at € 95.3 million, before the extraordinary dividend to be paid as of 24 July

Milan, 23 July 2024 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, approved the Group’s half-yearly financial report at 30 June 2024, presented by the Chief Executive Officer Frédéric Sipahi.

Sogefi, a company of the CIR Group, is one of the leading global manufacturers of automotive components in the Air and Cooling, Filtration and Suspensions sectors.

MARKET PERFORMANCE

In the first half of 2024, global car production decreased by 0.2% compared to the first half of 2023. Production increased in China (+5.2%), India (+6.8%) and NAFTA (+1.8%), while it recorded a downturn in Mercosur (-7.1%) and Europe (-5.2%), a geographical area that had shown strong recovery in 2023.

For the full year 2024, S&P Global (IHS), a source commonly used in the industry, predicts that world production may drop by 2% compared to 2023, with a much more modest increase in China than in the first half of the year, substantial stability in NAFTA, a 5.3% drop, in line with the first half, in Europe, and a 2.1% drop in Mercosur.

SUMMARY OF SOGEFI’S PERFORMANCE IN FIRST QUARTER 2024

In view of the agreement signed on 23 February 2024 for the sale of the Filtration Business Unit, the figures for this business are reported in accordance with IFRS 5, i.e., by recording only the net result of the business under the item ‘income from assets held for sale and discontinued operations’. The operating data commented on below refer only to the perimeter of continuing operations excluding Filtration; the net result and the free cash flow will be shown for continuing operations, discontinued operations and total operations.

With regard to continuing operations, the results showed a significant improvement compared to first half 2023:

  • revenues decreased by 2.7% compared to first half 2023 due to the performance of the European market;
  • EBITDA, equal to € 67 million, increased by 27.8% compared to the same period of 2023, with an EBITDA margin of 12.8%;
  • EBIT, equal to € 27.8 million, recorded an increase on first half 2023 (€ 13.8 million), with an EBIT margin of 5.3% of revenues, compared to 2.6% in first half 2023;
  • net income from continuing operations totalled € 10.8 million, compared to € 3.7 million in first half 2023;
  • free cash flow from operating activities was positive by € 20.7 million, compared to € 3.1 million in first half 2023.

With regard to discontinued operations:

  • the net result was equal to € 136.4 million, including the capital gain, tax charges and costs arising from the sale transaction;
  • the free cash flow amounted to € 321.8 million.

Overall, in first half 2024, the Group recorded:

  • net income of € 145.8 million
  • free cash flow of € 342.5 million
  • with a net financial position at 30 June 2024 equal to € 48.8 million, against a net debt of € 266.1 million at 31 December 2023, after the payment of an ordinary dividend of € 23.7 million to the Parent Company’s shareholders in May 2024.

Following the resolution adopted by the Shareholders’ Meeting held on 17 July 2024, an extraordinary dividend totalling approximately € 110 million will be paid on 24 July 2024, reducing the Group’s net financial position by the same amount.

FIRST HALF RESULTS 2024

In first half 2024 revenues stood at € 524.1 million, down by 2.7% on first half 2023.

The drop in revenues mainly reflected the less than positive performance recorded in Europe (-6.3%), due to the market downturn (-5.2%), and in North America -2.6%, while South America, China and India grew by +2.6%, +16.2% and +10.3% respectively, outperforming the market.

Suspensions recorded a 4.7% drop in revenues, affected by the unfavourable trend in the European market, while significant growth was recorded in China and India, +44.3% and +16.2% respectively.

Air and Cooling reported revenues in line with first half 2023, recording an above-market performance in Europe, +5.9%, and a slight decline in the North American and Chinese markets.

EBITDA stood at € 67 million, up by 27.8% on first half 2023 (€ 52.4 million) despite the slight decline in volumes. The EBITDA margin rose from 9.7% in 2023 to 12.8% in the same period of 2024.

The contribution margin increased by 7.4% compared to first half 2023, representing 29% of revenues compared to 26.2%, due in part to lower raw material and energy costs.

The ratio of fixed costs to revenues stood at 15.7% in first half 2024, essentially stable compared to 2023 (15.5%).

Other charges, which specifically included exchange rate differences, made a negative contribution of € 0.5 million to EBITDA, compared to the negative contribution of € 3.2 million in first half 2023.  

EBIT totalled € 27.8 million, compared to € 13.8 million in first half 2023, and the ratio to revenues rose from 2.6% in first half 2023 to 5.3% in the same period of 2024. The increase mainly reflects the improved results recorded by the Suspensions division.

Financial expense, equal to € 9.1 million, was higher than in the same period of 2023 (€ 8.2 million) mainly due to one-off charges related to the early repayment of a number of loans, following the proceeds from the sale of the Filtration division, which enabled the Company to drastically reduce its financing needs.  

Tax expense amounted to € 8 million (€ 1.9 million in first half 2023), reflecting the higher pre-tax profit.

The net income from operating activities was positive by € 10.8 million compared to € 3.7 million in the same period of the previous year.

The net result of ‘discontinued operations’ refers to the Filtration division and amounted to € 136.4 million in first half 2024, compared to € 29.3 million in first half 2023. This value incorporates the net income of the business up to the date of sale on 31 May 2024, equal to € 22.2 million, the capital gain realised on the sale of the business, equal to € 124.5 million, the tax charges arising from the transaction and the costs incurred in finalising the transaction.

The Group reported total net income of € 145.8 million, compared to € 31.4 million in first half 2023.

The Free Cash Flow was positive by € 342.5 million and includes a free cash flowof € 321.8 million from Filtration and € 20.7 million generated by continuing operations (€ 3.1 million in first half 2023).

At 30 June 2024, excluding non-controlling interests, equity came to € 407.6 million (€ 272.9 million at 31 December 2023). The increase essentially reflects the net result for the period and the dividends paid to the Parent Company’s shareholders (€ 23.7 million).

The Net Financial Position at end of June 2024, after payment of € 27.1 million in dividends, was positive by € 48.8 million, compared to net debt at the end of 2023 of € 266.1 million. The Net Financial Position excluding payables for rights of use at 30 June 2024 was positive by € 95.3 million, compared to € 200.7 million at 31 December 2023 and € 185.3 million at 30 June 2023. 

At 30 June 2024, the Group had committed credit lines in excess of requirements of € 309 million.

SUMMARY OF RESULTS OF SECOND QUARTER 2024

In the second quarter of 2024, the Sogefi Group reported revenues of € 260.9 million, slightly down at both current (-1.5%) and constant (-2%) exchange rates. At constant exchange rates, revenue growth was positive in China (+14.9%) and India (+27.6%), while it was negative in Europe (-3.9%), South America (-3.6%) and North America (-4.6%).

Air and Cooling recorded growth of 1.6% at constant exchange rates, while Suspensions recorded a decrease at constant exchange rates of -4.8%.

EBITDA stood at € 33.3 million compared to € 26.6 million in second quarter 2023, due to the increase in the contribution margin from 26.7% of revenues in second quarter 2023 to 29.5% in second quarter 2024.

EBIT was positive at € 13.2 million (compared to € 7.2 million in second quarter 2023).

Net income from operating activities amounted to € 5.2 million, compared to € 2.8 million in second quarter 2023.

The consolidated net result for second quarter 2024, including discontinued operations, amounted to € 130.8 million (€ 18.2 million in the same period of the previous year), as it incorporates the April-May 2024 results of the Filtration division and the capital gain generated by the sale.

SIGNIFICANT EVENTS AFTER 30 JUNE 2024

No significant events that could affect the economic, equity and financial information reported occurred after 30 June 2024, with the exception of payment of the extraordinary dividend of € 0.923 per share, totalling approximately € 110 million, resolved by the Shareholders’ Meeting on 18 July 2024, with ex-dividend date on 22 July 2024, which was disclosed to the market.

The CEO and General Manager Frédéric Sipahi resigned from his role, as per the press release published today.

OUTLOOK FOR THE YEAR

There is still limited visibility on the automotive market’s performance in 2024 due to the uncertainties linked to macroeconomic and geopolitical developments. S&P Global (IHS) predicts that, after the growth recorded in 2023, global car production may drop by 2%, with Europe down by 5.3% and modest growth in China, NAFTA and India.

As far as commodity and energy prices are concerned, the first half 2024 confirms a certain degree of stability, already seen in the second part of 2023, but they are still exposed to volatility risks exacerbated by geo-political tensions. Inflationary tensions on labour costs also persist in some geographical areas. In this scenario, the Group constantly monitors trends in the various geographic areas, seeking fair agreements with all customers on sales prices.

Based on a more conservative forecast for the automotive market than the S&P Global estimates, with specific regard to Europe, Sogefi in 2024 expects a low single-digit revenue decline, while confirming its expectation that operating profitability, excluding non-recurring charges and extraordinary events that are not yet foreseeable, will be higher than in 2023.

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- 16:10 CEST

Sogefi: Shareholders’ Meeting approves the extraordinary dividend of euro 0.923 and amendment of the By-Laws

Milan, 18 July 2024 – The Shareholders’ Meeting of Sogefi S.p.A. was held today under the chairmanship of Monica Mondardini.

In ordinary session, the  Shareholders’ Meeting approved the Board of Directors’ proposal of distributing an extraordinary unit dividend of € 0.923, to be taken from the distributable Profit Reserve and the Share Premium Reserve. The ex-dividend date (coupon 34) will be July 22, 2024 and the dividend will be paid as from July 24, 2024.

In extraordinary session, the Shareholders’ Meeting resolved to amend articles 10 and 13 of the By-Laws relating to the methods of intervention and representation in the shareholders’ meetings.

For further information please refer to: (i) press release of June 17, 2024; and (ii) illustrative reports on the items on the agenda of the Shareholders’ Meeting, available on the Company website www.sogefigroup.com and on the authorized storage mechanism e-Market Storage at the address www.emarketstorage.it.

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- 09:30 CEST

Sogefi: AGM approves financial statements for 2023

DIVIDEND OF EURO 0,20
BOARD OF STATUTORY AUDITORS APPOINTED FOR 2024-2026

Milan, 22 April 2024 – The Annual General Meeting of the Shareholders of Sogefi S.p.A. was held today under the chairmanship of Monica Mondardini.

As per the terms of Art. 106, paragraph 4, of Decree Law no. 18 of March 17 2020, converted with amendments into Law no. 27 of April 24, 2020, as further amended and extended, the Shareholders were able to attend only through the designated representative, appointed in accordance with Art. 135-undecies of D.Lgs no. 58 of February 24 1998 (TUF) and identified as Monte Titoli S.p.A., to whom proxies/sub-proxies were also assigned as per Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the TUF.

APPROVAL OF THE FINANCIAL STATEMENTS 2023

The Shareholders approved the Financial Statements for the year 2023.

Sogefi closed the year with consolidated revenues of € 1,627.9 million (€ 1,543.4 million in 2022), EBITDA of € 221.4 million (€ 195.1 million in 2022) and net income of € 57.8 million (€ 29.6 million in 2022).

The parent company Sogefi S.p.A. reported a net income of €6.7 million, compared to the net loss of € 58.7 million in 2022, which included a write-down of equity investments, recognized on the basis of the impairment test, equal to € 78.9 million compared to a recovery of value, equal to €9.4 million, registered in financial year 2023.

The Shareholders’ Meeting approved the Board of Directors’ proposal to distribute a dividend per share  of €0.20 to each of the 118,652,484 shares in circulation, for a total of € 23,730,484, using the net income for the year and withdrawing the difference from the “Retained earnings” reserve.

The dividend will be paid as from 8 May 2024, after coupon detachment on 6 May 2024 and “record date” on 7 May 2024.

COMPENSATION POLICY AND STOCK GRANT PLAN

The AGM approved the first section of the Report on Compensation and remuneration paid and expressed a vote in favour of the second section of the same Report.

The Shareholders also approved the Stock Grant Plan for 2024 aimed at employees of the Group holding strategically important roles for a maximum of 1,250,000 conditional rights, each of which will give the beneficiaries the right to be assigned free of charge n. 1 Sogefi share. The shares thus assigned will be made available from the own shares held by the Company. The plan aims to align the interests of management with the objective of creating value for the Group and its Shareholders over a medium-long term time horizon, stimulating the commitment to achieving common objectives at Group level and encouraging those who hold important positions to remain within the Group.

AUTHORIZATION TO BUY BACK OWN SHARES

The Shareholders renewed for a period of 18 months the authorization to the Board of Directors to buy back a maximum of 10 million of its own shares, at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Sogefi shares in the Stock Exchange trading session preceding each individual buyback transaction or the date on which the price is fixed, in case of buyback according to letters (a), (c) and (d) of the following paragraph and, in any case, when the purchases are made in the regulated market, the price cannot be higher than the higher of the price of the last independent transaction and the highest current independent bid price on the same market.

The purchase must take place in the market, in accordance with what is set out in Art. 132 of Legislative Decree 58/98 and as well as by the rules of law and regulations in force at the moment of the transaction and more specifically (a) through a public offer to buy or exchange shares; (b) on regulated markets following operating procedures set out in the rules for organizing and managing the same markets, which do not allow bid prices to be matched directly with offer prices; (c) through pro-rata assignation to the shareholders of put options to be assigned within 15 months of the date of the Shareholders meeting resolution and exercisable within 18 months of the same date; (d) through the purchase and sale of derivative instruments traded on regulated markets that involve the physical delivery of the underlying shares in accordance with the provisions contained in Art. 144-bis of the Rules for Issuers, as well as in accordance with the provisions of Art. 5 and 13 of the EU Regulation no. 596/2014.

The main reasons why the authorization is renewed are: (i) to fulfill the obligations deriving from any share option programs or other assignments of shares of the Company to employees or members of the administrative bodies of Sogefi S.p.A. or subsidiaries, as well as fulfill any obligations arising from any debt instruments convertible or exchangeable with equity instruments; (ii) to dispose of a portfolio of treasury shares to be used as consideration in any extraordinary transactions, including exchange of shareholdings, with other parties in the context of transactions of interest to the Company (so-called “securities warehouse”); (iii) to carry out activities to support market liquidity, optimizing the capital structure, remunerating shareholders in particular market situations, all within the limits established by current legislation; (iv) to seize opportunities for value creation, as well as efficient use of liquidity in relation to market trends; (v) for any other purpose that the competent Authorities may qualify as market practices permitted pursuant to the applicable European and domestic regulations, and with the methods established therein.

As of today, the Company owns n. 1,465,574 treasury shares, equal to 1.22% of the share capital.

APPOINTMENT OF THE BOARD OF STATUTORY AUDITORS

The Shareholders’ Meeting also appointed the members of the Board of Statutory Auditors of the Company for the three years 2024-2026. The Effective Auditors are Daniela Delfrate (Chairman of the Board of Statutory Auditors), Gaetano Rebecchini and Rita Rolli. The Alternate Auditors are Luigi Borré, Anna Maria Allievi and Franco Aldo Abbate. The Auditors were drawn from the list presented by the majority Shareholder CIR S.p.A., with the exception of the Chairman Daniela Delfrate and the Alternate Auditor Franco Aldo Abbate, who were selected from the minority list presented by Navig S.a.s.

All members of the Board of Statutory Auditors have declared that they possess the independence requirements pursuant to art. 148 of the TUF and to Corporate Governance Code issued by the Italian Stock Exchange. The Board of Statutory Auditors verified the existence of these requirements.

RENEWAL OF PROXY TO THE BOARD OF DIRECTORS

In extraordinary session, the Shareholders’ Meeting, after revocation of the existing delegation, granted new proxy to the Board of Directors (i) for capital increases, also with exclusion or limitation of the right of option pursuant to art. 2441 IV and V paragraphs of the Civil Code, up to a maximum amount of €100 million, (ii) for capital increases in favor of directors and employees of the Company and its subsidiaries, for a maximum amount of €5.2 million, and (iii) for the issuing, even with the exclusion of the right of option, and in this case in favor of institutional investors, convertible bonds or with accessory rights of share allocations, even with foreign currency, with a corresponding increase in share capital, up to a maximum amount of €100 million.

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- 17:00 CEST

Sogefi: results for first quarter 2024

Revenues: -3.9% at € 263.2 million, -3.1% at constant exchange rates

EBIT: significantly higher at € 14.6 million (€ 6.5 million in first quarter 2023)

Net income: +13.5% at € 15.0 million (€ 13.2 million in first quarter 2023)

Free Cash Flow positive for € 30.7 million (€ 39.6 million in first quarter 2023)

Reduction of debt before IFRS 16 to € 171.4 million (€ 186.9 million at end of March 2023)

Milan, 22 April 2024 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the interim report on operations of the group as of 31 March 2024, as presented by Chief Executive Officer Frédéric Sipahi. Sogefi, a company of the CIR GROUP, is one of the main producers worldwide of automotive components in the Air and Cooling, Filtration and Suspensions sectors.

PERFORMANCE OF THE MARKET

In the first quarter of 2024 world car production declined by 0.8% on the first quarter of 2023. Growth was reported in China (+4.3%) and India (+6.6%), a decline in Mercosur (-5.6%) and in Europe (-5.9%), a geographical area that in 2023 had shown a strong recovery, and substantial stability in NAFTA (+1.4%).

For the year 2024, S&P Global (IHS), a source commonly used in the sector, expects that world production will remain stable compared to 2023, with a positive trend in China and India, substantial stability in NAFTA and Mercosur and a decline of 2.6% in Europe.

SUMMARY OF SOGEFI’S PERFORMANCE IN FIRST QUARTER 2024

Taking into account the agreement signed on 23 February 2024 for the sale of the Filtration Business Unit, the income statement figures for the first quarters of 2023 and 2024 of these businesses are shown in accordance with IFRS 5, i.e. reclassifying the result of the business to the item “income from assets held for sale and discontinued operations”. Therefore, the figures commented on below refer to the consolidation of the continuing businesses and exclude Filtration.

The consolidated revenues of the Group recorded a decline of 3.9% (-3.1% at constant exchange rates) compared to the first quarter of 2023 because of the lower production volumes in Europe due to the performance of the market (-5.9%).

The results showed a significant improvement compared to the first quarter of 2023:

  • EBITDA, totalling € 33.7 million, was up by 30.9% compared to the same period of 2023, with an EBITDA margin of 12.8%;
  • EBIT, amounting to € 14.6 million, was significantly higher than in first quarter 2023, € 6.5 million, with an EBIT margin of 5.6% of revenues, up from 2.4%;
  • Net income from continuing operations was € 5.6 million;
  • Total net income, including the net income of the Filtration business, destined for disposal, came in at € 15 million (+13.5% versus € 13.2 million in the first quarter of 2023);
  • Free cash flow was a positive € 30.7 million (€ 39.6 million in first quarter 2023);

Net debt (before IFRS 16) declined to € 171.4 million at 31 March 2024, compared to € 200.7 million at 31 December 2023 and € 186.9 million at 31 March 2023.

Commercial activity was positive both in terms of total value of the contracts acquired and in terms of mix, with 48% of the value of the new contracts acquired during the year destined for E-mobility. Significant new contracts were awarded in Europe, China and North America.

Air and Cooling obtained most of its new orders in North America and China for the supply of air manifolds and water pumps. 46% of the value of the new contracts obtained by the Air and Cooling division in first quarter 2024 was for components for E-mobility platforms.

Suspensions obtained new business mainly for the supply of stabilizer bars in China to a totally electric player, and in India to a producer of buses. 57% of the value of the new contracts obtained in first quarter 2024 by the Suspensions divisions were for components for E-mobilityplatforms.

RESULTS FOR FIRST QUARTER 2024

Revenues for the first quarter of 2024 came in at € 263.2 million and were down by 3.9% at current exchange rates and by 3.1% at constant exchange rates on the numbers for first quarter 2023.

The performance of revenues was affected mainly by the evolution recorded in Europe                  (-8.5%), caused principally by the downturn in the market (-5.9%). In South America and North America revenues were substantially unchanged at +1.5% e +0.3% respectively at constant exchange rates, while in China and India they showed growth of 14.9% and +9.9% respectively at constant exchange rates.

Suspensions reported a decline in revenues of 5.7% (-5.2% at constant exchange rates) affected by the unfavourable trend of the market in Europe; by contrast, significant growth was recorded in China and India which posted +55.7% and +9.9% respectively at constant exchange rates.

Air and Cooling reported revenues that were down by 1.4% (-0.1% at constant exchange rates), outperforming the market in Europe (+0.9%) and holding up well in the North American market.  

EBITDA came in at € 33.7 million, posting growth of 30.9% on first quarter 2023 (€ 25.8 million). The EBITDA marginrose from 9.4% in 2023 to 12.8% in the same period of 2024.

The contribution margin rose by 5.7% compared to the first quarter of 2023, with a profit margin (the ratio in % of the contribution margin/revenues) widening from 25.8% in first quarter 2023 to 28.4% in the same period of 2024 thanks partly to lower raw material and energy costs.

The impact of fixed costs on revenues was 15.4%, unchanged from 2023.

Other charges, which in particular include exchange rate differences, made a positive contribution of € 0.1 million to EBITDA versus a negative contribution of € 2.4 million in first quarter 2023.   

EBIT totalled € 14.6 million, up from € 6.5 million in the first quarter of 2023, and the ratio to revenues rose from 2.4% in first quarter 2023 to 5.6% in the same period of 2024. The increase mainly reflects the improvement in the results of Suspensions.

Financial expense, equal to € 5.1 million, was higher than that of the same period of 2023 (€ 4.1 million) mainly due to the (no cash) financial charges relating to the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) to the Argentinian subsidiary. Tax expense came to € 3.9 million (€ 1.6 million in first quarter 2023).

The net income from operating activity was a positive € 5.6 million versus € 0.8 million in the same period of the previous year.

The net result of “assets held for sale and discontinued operations” (Filtration) came to € 10.4 million in the first quarter of 2024, down from € 13.2 million in first quarter 2023 taking also into account the non-recurring costs relating to the extraordinary transaction in progress.

The Group reported net income of € 15 million, posting a 13.5% increase from € 13.2 million in the previous year thanks to the higher net result of continuing operations (Suspensions and Air and Cooling).  

Free Cash Flow was positive for € 30.7 million versus € 39.6 million in first quarter 2023.

At 31 March 2024 shareholders’ equity, excluding minority interests, stood at € 295.5 million, up from € 272.9 million at 31 December 2023. The increase reflects the net result for the period, the positive currency translation differences, the fair value of cash flow hedging instruments and other changes.

The net financial debt before IFRS 16 amounted to € 171.4 million at 31 March 2024, down from € 200.7 million at 31 December 2023 and € 186.9 at 31 March 2023. Including financial payables for rights of use, in compliance with IFRS 16, net debt totalled € 235.7 million at 31 March 2024 compared to € 266.1 million at 31 December 2023 and € 255.9 at 31 March 2023.

At 31 March 2024 the Group had committed credit lines in excess of its requirements for € 258 million.

SIGNIFICANT EVENTS THAT HAVE OCCURRED SINCE 31 MARCH 2024

Nothing significant has happened since the end of March that could have an impact on the economic, patrimonial and financial information as of 31 March 2024.

OUTLOOK FOR THE YEAR

Visibility as to the trend of the automotive market in 2024 remains limited due to uncertainty linked to the evolution of the macroeconomic and geopolitical scenarios. S&P Global (IHS) expects that after the growth reported in 2023 world car production will remain stable, with Europe declining by 2.6%, marginal growth in China and India and overall stability in the other geographical areas.

As far as commodity and energy prices are concerned, the early months of 2024 have confirmed a certain stability, already seen in the second half of 2023, but prices remain exposed to the risk of higher volatility caused by geopolitical tensions. The pressure of inflation on labour costs also remains a source of tension in certain geographical areas. In this scenario the Group is constantly monitoring performance in the various geographical areas and seeking fair agreements with all of its customers with regard to selling prices.  

In the absence of any factors causing the macroeconomic scenario to deteriorate compared to today and assuming that the Filtration division will be deconsolidated in line with what has already been disclosed, for 2024 it is expected that for the divisions that continue to operate (Suspensions and Air and Cooling) there will be low single-digit revenue growth, higher than that forecast for the automotive market, with operating profitability, excluding non-recurring charges, showing an improvement on that reported for the year 2023 and a positive net result.

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- 19:07 CET

Sogefi: put option agreement for the sale of the Filtration BU

Milan, 23 February 2024 – Sogefi, in the context of a process aimed at the valorization of its Filtration Business Unit, entered into a put option agreement with the US private equity fund Pacific Avenue Capital Partners, pursuant to which Carta Acquisition France S.A.S. (“Carta France”) and Carta Acquisition U.S., Inc. (“Carta US”), the latter corporate vehicles incorporated by the fund, have unilaterally, unconditionally and irrevocably committed to acquire – upon the exercise of the put option by Sogefi – the entire share capital of, respectively, Sogefi Filtration S.A. and Sogefi USA Inc. The Filtration Business Unit will operate under the name Purflux Group in case of closing of the transaction.

Under the terms of the put option agreement, Sogefi has granted the acquiring entities, Carta US and Carta France a 6-month exclusivity period to complete the transaction.

The exercise of the put option by Sogefi and the signing of the sale and purchase agreement relating to the potential sale of the Filtration Business Unit (“Transaction”) can only take place once the works council consultation process, required by French law, has been completed.

The Transaction is in any case subject to the obtainment of the clearance from the Slovenian FDI (Foreign Direct Investment) authority and the clearance from the Moroccan antitrust authority.

Subject to the exercise of the put option by Sogefi, the closing of the Transaction is expected to occur within six months from today’s date.

The exercise of the put option by Sogefi will be communicated in accordance with applicable law.

The consideration for the Transaction is based on an enterprise value of Euro 374 million, corresponding to an Equity Value, to be settled entirely in cash, currently estimated at approximately Euro 330 million, which would be determined at closing on the basis of a bridge to equity, which takes into account adjustments based on the Working Capital and the Net Financial Position, as customary for this type of transactions.

The enterprise value implies a multiple of 0.65 times 2023 revenues (compared to 0.41 for the average of mid cap peers and 0.31 for Sogefi) and 3.6 times 2023 EBITDA (in line with the average multiples of mid cap peers and significantly higher than Sogefi’s spot multiple estimated at 2.3 EBITDA), year in which the Filtration Business Unit achieved a record EBITDA result, +24% compared to 2022.

Therefore, the consideration envisaged for the Transaction implies a substantial generation of value compared to the current stock market value.

Based on the estimated Equity Value, the Transaction would result in a capital gain of approximately Euro 130 million vs. the balance sheet value in the financial statements as of December 31, 2023.

For Sogefi, the strategic rationale for the Transaction is clear and articulated.

First of all, the Transaction allows to realize the value of Filtration in a phase when the unithas achieved unprecedented results, following a program that has involved the disposal of unprofitable activities, commercial development and an increase in profitability, in a favorable market context for the Aftermarket division.

The Transaction entails the reduction of the powertrain component in the group’s business portfolio, making Sogefi less exposed to the risks associated with the transition to E-mobility.

The Transaction also allows the reduction of the complexity and diversification of the group and to focus on two high-potential sectors, namely Suspension, which is undergoing a turnaround, and Air&Cooling, an activity that has been recording positive and ever-increasing results and an ambitious growth path.

Finally, the group will have a very solid financial position, which will allow greater investments for development,already identified and in progress, in the EV market, by leveraging on at least part of the financial resources deriving from the potential sale.

Subject to the exercise of the put option by Sogefi and completion of the Transaction, at least 50% of the proceeds from the sale, estimated in approximately Euro 330 million, will be allocated to the reduction of the group’s indebtedness (Euro 266.1 million as of December 31, 2023, Euro 200.7 million without considering IFRS 16 liabilities) and, for the remaining portion, the Board of Directors will evaluate to propose its distribution.

Sogefi’s Filtration Business Unit produces a full range of filters for the Original Equipment (OE), Original Equipment Spares (OES) markets, and the Independent Aftermarket (IAM). Specifically, the Aftermarket division serves all channels of the independent automotive replacement markets, also through the sale of products branded by the Group: CoopersFiaam, Tecnocar, FRAM® and Purflux for light vehicles, SogefiPro dedicated to commercial vehicle applications.

The Business Unit, headquartered in Paris, is a major player in the sector, with operations in Europe, the United States and India, has 11 production sites, and in 2023 recorded revenues of Euro 573.6 million (35% of the Sogefi group’s turnover).

Pacific Avenue Capital Partners is a Los Angeles, CA-based private equity firm focused on corporate divestitures, carve-outs and other complex situations in the middle market.

In relation to the Transaction, the Company’s was advised by Houlihan Lockey and Clifford Chance, BNP Paribas provided the fairness opinion.

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- 19:05 CET

Sogefi: results higher in 2023

RESULTS HIGHER IN 2023

Revenues: +5.5% to € 1,627.9 million, (+9.1% at constant exchange rates)

EBIT: +49.2% to € 105.2 million

Net income: +95.4% to € 57.8 million (€ 29.6 million in 2022)

Free Cash Flow positive for € 37.9 million (€ 29.3 million in 2022)

Debt before IFRS 16 reduced to € 200.7 million (€ 224.7 million at end of December 2022)

Milan, 23 February 2024 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the proposed financial statements for 2023 presented by Chief Executive Officer Frédéric Sipahi.

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

PERFORMANCE OF THE MARKET

In the fourth quarter of 2023 world car production rose by 9.1% compared to the fourth quarter of 2022, confirming the positive trend recorded in the first nine months of the year, with growth in all geographical areas except for Mercosur (-3%).

For the whole of 2023 world vehicle production thus reported growth of 9.4% compared to 2022, with a return to the volumes of 2019 before the pandemic crisis (+1.2%).

Performance in 2023 was positive in all geographical areas: +12.5% in Europe, +9.5% in NAFTA, +9.4% in China, +6.3% in India and +3.5% in Mercosur.

However, compared to 2019, while China and India experienced strong growth (+17.2% and +29.5% respectively), production volumes still remained lower in Europe (-13%), in Mercosur (-9.6%) and in NAFTA (-4.1%).

For the year 2024, S&P Global (IHS) forecasts that world production should remain substantially unchanged (-0.5%) from 2023.

KEY FIGURES OF SOGEFI’S PERFORMANCE IN 2023

The consolidated revenues of the Group were up by 5.5% on 2022 and by 9.1% at constant exchange rates, in line with the increased production volumes (+6.1%) and selling prices (+2.8%).

Results were significantly better than those of 2022:

  • EBITDA, totalling € 221.4 million, rose by +13.5%, with an EBITDA margin of 16.6% thanks to the increase in volumes and the greater contribution margin;
  • EBIT, which came in at € 105.2 million, was up by +49.2%, with an EBIT margin of 6.5% of sales, versus 4.6% in 2022;
  • Net income was € 57.8 million (+95.4% versus € 29.6 million in 2022);
  • Free cash flow was positive for € 37.9 million (€ 29.3 million in 2022);
  • Net debt (before IFRS16) declined to € 200.7 million at 31 December 2023 from € 224.3 million at 31 December 2022.

Commercial activity was positive too, both in terms of the total value of contracts acquired and in terms of mix, with 31% of the value of the new contracts being for E-mobility. Significant new contracts were awarded inNorth America, Europe and China.

The Suspensions division acquired new business in the Chinese market with local operators, in particular signing a contract for the supply of stabilizer bars to an innovative player aspiring to become one of the main producers in the electric car market in China. The division also obtained various contracts in Europe, particularly for the supply of stabilizer bars for top-of-the-range electric SUVs and for the supply of coil springs for E-mobility platforms. The contracts for E-mobility account for 45% of the value of the new contracts obtained during the year.

The Air and Cooling division has been continuing to develop in China, with the acquisition of various orders from BYD including one for the supply of air manifolds for a Plug-in-Hybrid platform and a contract for the supply of oil manifolds used in electric cars to lubricate the inside of the gearbox. These parts, which were traditionally made of metal, are offered by Sogefi in plastic which makes it possible to reduce weight and optimize design and cost. Important contracts were also signed in North America and these will enable the Group to increase its market share in this area, especially for the supply of thermal management and cooling products for E-mobility platforms.In Europe the main orders were for thermostat units for E-mobility and intake manifolds for thermal management. 27% of the value of the new contracts obtained by the Air and Cooling division in 2023 was for components for E-mobility platforms.

The Filtration division reached important agreements in Europe for both the OEM (Original Equipment Manufacturer) and the IAM (Independent After Market) channels: it obtained new contracts for the supply of filters for truck brake circuits and signed a three-year exclusivity agreement with one of the principal market leaders in the distribution of automotive components through the Aftermarket channel. Development has also been continuing in India with a gradual increase in market share. Lastly, the company obtained new contracts for the supply of air-purification filters representing around 15% of the total value.

RESULTS FOR 2023

Revenues for 2023 came in at € 1,627.9 million, posting a rise of 5.5% at current exchange rates and of 9.1% at constant exchange rates compared to 2022.

The growth in revenues reflects the very positive performance reported in Europe (+10%), in North America (+ 6.0% and +10.5% at constant exchange rates) and in India (+7.1% and +15.6% at constant exchange rates); in the remaining areas volumes were substantially stable but revenues were negatively affected by exchange rate movements (- 7.1% in China, +0.5% at constant exchange rates, and -21.7% in South America, -2.2% at constant exchange rates net of inflation in Argentina).

Suspensions reported a 4.8% increase in revenues (+9.5% at constant exchange rates) with significant growth particularly in India and Europe.

Air and Cooling recorded a rise of 5.0% (+8.9% at constant exchange rates), with particularly significant growth in NAFTA (+12.4% at constant exchange rates).

Filtration reported a rise in revenues of 7.1% (+9.3% at constant exchange rates), with strong growth in the Aftermarket channel (+10.5%) and in India.

EBITDA came in at € 221.4 million, posting growth of 13.5% on 2022 (€ 195.1 million). The EBITDA marginrose from 12.6% in 2022 to 13.6% in 2023.

The contribution margin was 12.8% greater than in 2022, thanks to the higher volumes and to the profit margin (ratio in percentage terms of contribution margin to revenues) which rose from 27.4% in 2022 to 29.3% in 2023.

The impact of fixed costs on revenues was 14.6%, substantially unchanged from 2022 (14.3%).

Other charges, which mainly include exchange rate differences, made a negative contribution to EBITDA of € 10.4 million versus a positive contribution of € 0.8 million in 2022.   

EBIT came to € 105.2 million and was up by 49.2% from € 70.5 million in 2022. The ratio to revenues rose from 4.6% in 2022 to 6.5% in 2023. 

The Group reported consolidated net income from operating activities of € 67.7 million, versus € 32.6 million in the previous year.

In October 2023 the Suspensions business in Mexico was sold, giving rise to a net loss for “discontinued operations and operations held for sale” of € 6.7 million (€ -1.4 million in 2022) which includes the net result of operations for the period until October and the capital loss posted.

The group reported net income of € 57.8 million, up from € 29.6 million in the previous year.

Free Cash Flow was a positive € 37.9 million, higher than in 2022 (€ 29.3 million).

At 31 December 2023 shareholders’ equity, excluding minority interests, stood at € 272.9 million, compared to € 230.7 million at 31 December 2022. The increase reflects the net result for the year, the exchange rate differences (negative) from currency conversion, the fair value of the instruments hedging cash flows as well as other changes.

Net financial debt before IFRS16 totalled € 200.7 million at 31 December 2023, down from € 224.3 million at 31 December 2022. Including financial payables for rights of use, in accordance with IFRS 16, the net financial debt at 31 December 2023 amounted to € 266.1 million, versus € 294.9 million at 31 December 2022.

At 31 December 2023 the Group had committed credit lines in excess of its requirements of € 242 million.

KEY RESULTS OF FOURTH QUARTER 2023

In the fourth quarter of 2023, Sogefi reported revenues of € 375.3 million, down by 2.4% on the same period of 2022; at constant exchange rates the group reported growth of 4.1% thanks to the higher production volumes (+2.9%) and to the adjustment of selling prices.

EBITDA came to € 47.5 million, 12.7% of revenues, compared to € 43.5 million (11.3%) in the fourth quarter of 2022, thanks to the higher contribution margin which rose from 26.5% to 31.1%.

EBIT was a positive € 16.0 million versus € 6.6 million in fourth quarter 2022.

The consolidated net result for the fourth quarter of 2023 was a positive € 12 million after a negative result of € 3.4 million in the same period of the previous year.

SIGNIFICANT EVENTS HAVE TAKEN PLACE SINCE YEAR END

A put option agreement in Sogefi’s favour has been signed for the sale of the Filtration division to the US investment fund Pacific Avenue

Today the company has signed a put option agreement with the US investment fund Pacific Avenue, pursuant to which Carta Acquisition France S.A.S. (“Carta France”) and Carta Acquisition U.S., Inc. (“Carta US”), acquisition vehicles that refer to the fund, have unilaterally, unconditionally and irrevocably undertaken to buy – in the event that Sogefi should exercise the put option – the entire share capital of Sogefi Filtration S.A. and Sogefi USA Inc, respectively. The filtration division will operate under the name of Purflux Group in the event of the transaction being completed.

As per the terms of the put option agreement, Sogefi has granted Carta US and Carta France a six-month period of exclusivity to complete the transaction.

Exercise of the put option by Sogefi and the signing of the purchase and sale agreement relating to the described sale of the Filtration division (the “Transaction”) may take place only once the consultation procedure with the trade union representatives, required by French law, has taken place.

The deal is in any case subject to obtaining FDI (Foreign Direct Investment) authorization in Slovenia and antitrust authorization in Morocco.

Subject to exercise of the put option by Sogefi, the Transaction should be finalized within six months of today’s date.

Exercise of the put option by Sogefi will be disclosed in compliance with applicable laws and regulations.

For the conditions of the Transaction see the press release issued at the same time as this one.   

OUTLOOK FOR THE YEAR

Visibility as to the trend of the automotive market in 2024 remains low due to uncertainty as to the evolution of the macroeconomic and geopolitical scenarios. S&P Global (IHS) expects that, after the growth reported in 2023, world car production will remain substantially stable (-0.5%), with Europe declining by 1.9%, China in line with 2023 and higher margins in the other geographical areas.

As far as commodity and energy prices are concerned, the early months of 2024 have confirmed a certain stability, already seen in the second half of 2023, but prices remain exposed to the risk of volatility caused by geopolitical tensions. The pressure of inflation on labour costs also remains a source of tension in certain geographical areas.  

In this scenario the Group is constantly monitoring performance in the various geographical areas and seeking fair agreements with all of its customers with regard to selling prices.

In the absence of any factors causing the deterioration of the macroeconomic scenario compared to today, for 2024 it is expected – for all of the three divisions currently comprising the group – that there will be single-digit revenue growth, higher than that forecast for the automotive market, and operating profitability, excluding non-recurring charges, at least in line with that reported for the year 2023.

In the event of deconsolidation of the Filtration division from the perimeter of the consolidated businesses (Suspensions and Air & Cooling), the same evolution of revenues as that described above is to be expected, with an increase in operating profitability and a positive net result.

DIVIDEND PROPOSAL

In view of the result for the year and the financial solidity of the Group, the Board of Directors will propose that the Ordinary General Meeting of the Shareholders, convened at the first call for 22 April 2024, allocate the net result resulting from the Financial Statements for the year ended 31 December 2023, totalling Euro 6,735,288.96, to a dividend distribution of Euro 0.20 for each of the shares in circulation, giving a total amount of Euro 23,730,484, of which Euro 16,995,195.04 will be withdrawn from the “Retained Earnings Reserve” while the amount of Euro 6,735,288.96 will be the net income for the year 2023.

The dividend will be paid out as from 8 May 2024 after coupon detachment on 6 May 2024 and record date on 7 May 2024.

ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

The Annual General Meeting of the Shareholders of Sogefi has been called for 22 April 2024 at the first call and for 23 April 2024 at the second call.

The full text of the proposed resolutions and the reports of the Board of Directors on the items on the Agenda, together with all the relevant documentation, will be available, within the time frames required by law, at the registered office, on the authorized storage mechanism eMarket Storage (www.emarketstorage.com) and on the Company’s website  www.sogefigroup.com (section Shareholders/Shareholder Meetings).

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