Sogefi

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- 15:50 CEST

Sogefi: results for first nine months of 2024

Revenues: -4.6% at € 766.7 million

EBIT: significantly increased to € 38.0 million (€ 25.3 million in the first nine months of 2023)

Net profit from ongoing operations € 15.1m (€8.3m in the first nine months of 2023)

Net income reached €149.5 million, reflecting the impact of the sale of the Filtration business

Free Cash Flow generated from ongoing operations positive for € 19.4 million (- € 7.1 million in the first nine months of 2023)

Free cash flow from Filtration of € 321.8 million

Debt, excluding IFRS 16, decreased to €16.1 million from €192.7 million at the end of September 2023, following the payment of €136.7 million in dividends

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Milan, 25 October 2024 – The Board of Directors of Sogefi S.p.A., chaired by Monica Mondardini, convened today to approve the group’s interim management report as of 30 September 2024.

Sogefi, a company of the CIR Group, ranks among the world’s leading manufacturers of automotive components, specializing in the Air and Cooling and Suspensions sectors.

MARKET PERFORMANCE

In Q3 2024, world car production significantly slowed, declining by 4.6% compared to Q3 2023. The European market’s weakness, with a 5.2% drop already evident in the first half of the year, was exacerbated by substantial declines in the NAFTA region, down 4.7%, and in China, down 2.6%. These regions had previously shown stability or slight growth in the first half of the year.

Following the negative results in the third quarter, global car production declined by 1.6% in the first nine months of 2024 compared to the same period in 2023. During the nine-month period, China and India experienced growth of +2% and +4.5%, respectively, while Europe, NAFTA, and Mercosur experienced declines of -4.9%, -0.8%, and -0.6%, respectively.

S&P Global (IHS) expect a 2.2% decrease in global production for the entire year of 2024 in comparison to 2023. China and Mercosur are expected to maintain their current levels, while NAFTA is expected to experience a minor decline of -1.4%. Europe is expected to experience a 6.3% decline, which is slightly higher than the decline observed in the first nine months.

SOGEFI’S PERFORMANCE SUMMARY IN THE FIRST NINE MONTHS OF 2024:

The figures for Filtration are reported in conformance with IFRS 5, which means that only the net result of the business is recorded under the category of “profit from discontinued operations or held for sale” following the divestment in May 2024. The operating data discussed below pertain exclusively to the scope of ongoing operations, excluding Filtration. The net profit (loss) and free cash flow are presented for ongoing operations, discontinued operations, and total operations.

Revenue performance was affected by market volatility during the first nine months of 2024, leading to a 4.6% decline compared to the same period in 2023. Despite this, operations showed a significant increase in profitability:

  • With an EBITDA margin of 12.6%, EBITDA reached €96.7 million, marking a 14.6% increase compared to the same period in 2023;
  • EBIT increased from €25.3 million in the first nine month of 2023 to €38.0 million. The EBIT margin increased to 5.0% of revenues from 3.1% in the first none months of 2023;
  • Net income from continuing operations totalled €15.1 million, compared to €8.3 million in the first half of 2023;
  • Free cash flow from operations was positive at €19.4 million, compared to a cash absorption of €7.1 million in the first nine months of 2023.

As outlined in the Half-Yearly Financial Report, the discontinued operations reported the following outcomes:

  • net profit of €136.4 million, including the effects of the sale, such as the capital gain, tax charges and transaction costs;
  • free cash flow of € 321.8 million.

Overall, in the first nine months of 2024, the Group reported:

  • net profit of € 149.5 million (net of minority interests)
  • free cash flow of € 341.2 million

As of 30 September 2024, net debt stood at €62 million (€16.1 million excluding rights of use, in line with IFRS 16), marking a decrease from €266.1 million as of 31 December 2023. This reduction follows the distribution of an ordinary dividend of €23.7 million and an extraordinary dividend of €109.6 million to shareholders of Sogefi S.p.A.

RESULTS FOR THE FIRST NINE MONTHS OF 2024

For the first nine months of 2024, revenues reached €766.7 million, reflecting a decline of 4.6% (4.3% at constant exchange rates) in comparison to the same period in 2023.

Revenues by geographical area

The decline in total revenues was influenced by the performance observed in Europe (-7.9%) and North America (-4.4%), primarily due to the dynamics of the respective markets and key customers. In contrast, South America and China experienced revenue growth of +2.2% and +5.1% respectively, aligning with or surpassing market trends.

Revenues by business sector

Suspensions experienced a 6.2% decline in revenues, influenced by adverse trends in the European market, affecting both the passenger car and heavy-duty segments, with the latter seeing a 10.4% decrease in Europe. Conversely, notable growth was observed in China, with a 35.3% increase, and a strong performance was recorded in Mercosur.

Air and Cooling reported a 2.3% decline in revenues (1.5% at constant exchange rates), with Europe showing a positive performance of 3.8%, defying the overall market decline. However, revenues decreased in North America due to product mix issues and in China due to a local production drop by some customers.

EBITDA reached €96.7 million, reflecting a 14.7% increase compared to the first nine months of 2023 (€84.4 million), despite a slight decrease in volumes. The EBITDA margin rose from 10.5% in 2023 to 12.6% in the same period of 2024.

Despite the reduction in volumes, the positive trend in profitability is primarily due to an increase in the contribution margin, which accounted for 29.3% of sales, up from 26.9% in the first nine months of 2023; this increase reflects the gradual decline in raw material and energy costs.

In spite of the decrease in turnover, the fixed costs as a percentage of revenue remained at 15.7%, essentially unchanged from 2023 (15.6%). This was primarily due to the reduction of fixed costs from € 126.3 million to € 120.5 million.

EBIT totalled € 38.0 million, compared to € 25.3 million in first half 2023, and the ratio to revenue rose from 3.1% in the first half of 2023 to 5.0% in the same period of 2024. The increase reflects the improved profitability of the Suspension division and the good profitability of Air & Cooling, in an unfavourable market environment.

Financial expenses amounted to €11.7 million, reflecting a modest decrease compared to €12.4 million in the same period in 2023. Notably, cash financial expenses decreased from €12.2 million in 2023 to €10.7 million in the corresponding period of 2024. This reduction, occurring entirely since early June, is attributed to the decrease in debt following the sale of the Filtration business, despite the one-off charges associated with the early repayment of certain loans.

The tax expense totalled €11.2 million, compared to €4.6 million in the first half of 2023, reflecting the increased pre-tax profit.

The net income from operations was positive by € 15.1 million compared to € 8.3 million in the same period of the previous year.

The net result of ‘discontinued operations’ (Filtration) amounted to € 136.4 million, (€ 39.8 million in the first nine months of 2023). This amount includes the net income of the business as of the sale date on 31 May 2024, totalling €22.2 million, the capital gain from the sale of the Filtration business amounting to €124.5 million, the tax liabilities resulting from the transaction, and the expenses associated with completing the transaction.

The Group reported a total net profit of € 149.5 million, net of minority interests, compared to € 45.8 million in the first nine months of 2023.

 Free Cash Flow was positive by € 341.2 million and includes a free cash flow of € 321.8 million from Filtration and € 19.4 million generated by ongoing operations, a clear improvement compared to the first nine months of 2023 (negative FCF of € 7.1 million).

The Group distributed dividends totaling €136.7 million, comprising €23.7 million classified as the Company’s ordinary dividend, €109.6 million designated as the Company’s extraordinary dividend, and €3.4 million allocated as dividends from investees to third-party shareholders.

 As of 30 September 2024, equity, excluding non-controlling interests, amounted to €300.4 million, compared to €272.9 million as of 31 December.

Net debt at the end of September 2024 was € 62 million compared to net debt of € 266.1 million at the end of 2023.

Net debt excluding liabilities for right-of-use assets at 30 September 2024 amounted to € 16.1 million, compared to € 200.7 at 31 December 2023. 

At 30 September 2024, the Group had committed credit lines in excess of requirements of € 187 million.

SUMMARY OF RESULTS FOR Q3 2024

In Q3 2024, the Sogefi Group reported revenues of €242.6 million, marking a decline of 8.5% (-7.7% at constant exchange rates), reflecting the adverse market conditions experienced during the quarter.

At constant exchange rates, Air and Cooling declined by 6.0% and Suspension by 8.9%.

EBITDA reached €29.8 million, down from €32.0 million in Q3 2023, while the EBITDA margin remained stable at 12%. Excluding restructuring costs and other non-operating expenses, which totaled €5 million in Q3 2024 compared to €0.7 million in 2023, EBITDA for Q3 2024 would be €34.8 million, up from €32.7 million in the same period of 2023.

The contribution margin of 30.1% represents a significant improvement from the previous figure of 28.4% in Q3 2023. Furthermore, the fixed cost ratio was maintained at 15.7%, a decrease from 16.1% in Q3 2023, despite the decrease in turnover, as a result of the 10.8% decrease in fixed costs. 

EBIT was positive at €10.2 million, compared to €11.5 million in Q3 2023. Excluding non-recurring charges, EBIT was €15.2 million, up from €12.2m in 2023.

Net income from operations totalled € 4.3 million, compared to € 4.7 million in third quarter 2023.

The consolidated net result t for the third quarter of 2024 was €3.7 million, down from €14.4 million in the same period of the previous year, which included a net result from ‘discontinued operations’ of € 10.5 million).

SIGNIFICANT EVENTS AFTER 30 SEPTEMBER 2024

No significant events that occurred after 30 September 2024, have the potential to affect the economic and financial information that is being presented.

BUSINESS OUTLOOK

Following the negative data from the third quarter, the outlook for the automotive market remains uncertain in the coming months. According to S&P Global (IHS), global car production may decrease by 2.2%  in 2024 following the growth observed in 2023. Europe is expected to experience a 6.3% decline, NAFTA is expected to experience a 1.4% decline, while China and India are expected to experience modest growth.

In terms of commodity and energy prices, the initial months of 2024 have confirmed a degree of stability that was already evident in the latter half of 2023. However, volatility risks are still present, which are further exacerbated by geopolitical tensions. Inflationary tensions on labour costs also persist in some geographical areas.

Sogefi expects a decline in its annual revenues substantially in line with that recorded in the first nine months of the year. The company also confirms the target of an operating result in progression compared to that recorded in the 2023 financial year on the current perimeter, excluding any non-recurring charges and extraordinary events that are currently unforeseeable.

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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.

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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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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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