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MarketScreener Homepage  >  Equities  >  Italian Stock Exchange  >  Sogefi S.p.A.    SO   IT0000076536

SOGEFI S.P.A.

(SO)
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Delayed Quote. Delayed Italian Stock Exchange - 01/15 11:35:55 am
1.188 EUR   -2.62%
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Sogefi S p A : July 27, 2020 - H1 2020 Financial Results

07/27/2020 | 09:35am EST

H1 2020 RESULTS

Milano - July 27th, 2020

Mauro FENZI - Chief Executive Officer

Yann ALBRAND - Chief Financial Officer

Stefano CANU - Investor Relations

Agenda

1

2

3

H1 2020 Results

Covid update

Perspectives

2 I

H1 2020 Highlights

Revenues at €519.5m

vs €777.8m in H1 2019

EBITDA at € 47.0m

vs €86.4m in H1 2019

EBIT at € -18.8m

vs €24.4m in H1 2019

Net Income at € -28.8

vs € 6.9m end H1 2019

FCF1 at -70.8m

vs €-3.3m in H1 2019

Net debt1 at € 256.7

vs € 256.2m end of 2019

1. FCF and Net debt excluding IFRS 16

  • Down 33.2% on a reported basis (-31.2% at constant exchange rate) strongly outperforming in most regions
  • In Q2 in Europe Sogefi was 55.7% down vs 65.5% for the market
  • 9.1% on sales vs 11.1% in PY, mainly volume impact mitigated by reduction of gross fixed costs of € 38.8 million vs H1 2019
  • In Q2 cost actions implemented are becoming effective (€ -32.0 million in Q2 vs € 6.8 million in Q1)
  • € 7.3 million in restructuring costs vs € 4.4 million in H1 2019
  • Including € 4 million of adverse exchange impacts in North & South America
  • In 1H 2020 assets write-down was €6.4 million vs €1.9 million in the previous year
  • After positive tax impact for € +1.0 million vs €-8.2 million in H1 2019
  • Free Cash Flow - € 70.8 million vs €-3.3 million in H1 2019
  • Net debt to € 327.0 vs € 256.2 million end of 2019 and € 267.3 million end
    June 2019

3

H1 2020 Highlights

Starting from March an emergency plan has been launched to

reduce costs and minimize cash out:

  • Variable costs reduction in line with new volumes, minimizing impact of manufacturing inefficiencies in an unstable context
  • Gross fixed costs reduced by 27% vs 2019
  • Investments reduced by 24% vs 2019 whilst protecting development of new products and the ramp-up of the new plant in Romania

4

Revenues by Geographical Area

STRONG OUTPERFORMANCE IN MOST REGIONS

reported

constant

reference

performance

reported

constant

reference

performance

weight

Q2 2019

Q2 2020

exchange

market

vs market

H1 2019

H1 2020

exchange

market

vs market

based on

change

change

€m

rates

production

(bps)

rates

production

(bps)

H1 2020

Europe

242.4

107.2

-55.8%

-55.7%

-65.5%

979

486.8

329.6

-32.3%

-32.2%

-41.7%

951

63.5%

North America

72.7

29.8

-59.0%

-58.5%

-69.1%

1057

146.8

102.5

-30.2%

-30.5%

-39.9%

940

19.7%

South America

40.1

6.6

-83.6%

-74.9%

-81.6%

667

77.6

35.6

-54.2%

-36.7%

-50.6%

1391

6.9%

Asia

34.9

26.9

-23.0%

-20.1%

-5.9%

-1419

71.0

54.7

-22.9%

-21.5%

-24.9%

339

10.5%

- of which China

16.1

22.5

39.8%

41.8%

9.4%

3241

33.2

34.3

3.1%

4.0%

-19.7%

2373

6.6%

Intercompany

(2.1)

(1.2)

(4.4)

(2.9)

Total

388.0

169.3

-56.4%

-54.5%

-44.5%

777.8

519.5

-33.2%

-31.2%

-33.2%

100.0%

Source: Sogefi and IHS data. Passenger cars and Light commercial vehicles only. Europe is Europe 28 and Asia is China + India

5

Revenues by Business Unit

reported

constant

reported

constant

Q2 2019

Q2 2020

exchange

H1 2019

H1 2020

exchange

change

change

rates change

rates change

€m

Air&Cooling

104.6

50.8

-51.4%

-50.7%

213.4

150.8

-29.3%

-29.1%

Filtration

139.2

62.3

-55.3%

-53.1%

274.0

197.0

-28.1%

-25.7%

Suspensions

145.3

56.4

-61.2%

-58.8%

292.3

172.7

-40.9%

-38.2%

Intercompany

(1.1)

0.2

(1.9)

(1.0)

Total

388.0

169.3

-56.4%

-54.5%

777.8

519.5

-33.2%

-31.2%

6

Sales by client

H1 2019

H1 2020

5%10%

7

H1 2020 EBIT performance breakdown €m / % sales

3.5%

2.9%

8

Suspensions

Sales (€m)

EBITDA (%)

  • Down 40.9% (-38.2% at constant exchange)
  • Affected by higher presence in Europe and in the most difficult markets (South America and India)
  • China + 22.6% in Q2
  • EBITDA benefiting lower material costs in % of revenues
  • Including costs of new Romania plant
  • € 15.6m of fixed cost reduction
  • EBIT margin (-4.7%) reflecting higher incidence of depreciation

Suspensions9

Filtration

Sales (€m)

  • Revenues down 28.1% at current exchange rates (-25.7% at constant exchange rates)
  • After a Q1 growth, Europe performed better than the market in Q2 thanks to Morocco and to Aftermarket
  • Major decline registered in South America and India.

Filtration

EBITDA (%)

  • Decline mainly related to volume decline in Europe and worsening of the situation in South America and India
  • € 13.2m of fixed cost reduction
  • Including € 2.6 million negative effect of exchange rate in Brazil

10

Air & Cooling

Sales (€m)

  • Down 29.3% (-29.1% at constant exchange)
  • Major decline in Europe and North America
  • China after a negative Q1 grew 54% in Q2 overperforming the market thanks to new SOPs

Air & Cooling

EBITDA (%)

  • Higher EBITDA in Europe and China
  • € 7.1m of fixed cost reduction
  • EBIT at breakeven despite the volumes gap

11

H1 2020/ Quarterly P&L - Sogefi Group - €m / % sales

€m

Q1 2020

%

Q2 2020

%

H1 2019

%

H1 2020

%

REVENUES

350.2

100.0%

169.3

100.0%

777.8

100.0%

519.5

100.0%

Variable costs

reduction

Costs of sales / Variable costs

245.1

70.0%

119.4

70.5%

549.2

70.6%

364.5

70.2%

Gross Fixed Costs

67.5

19.3%

39.0

23.0%

145.3

18.7%

106.5

20.5%

In Q2 € 32.0

million of gross

EBITDA

34.9

10.0%

12.1

7.1%

86.4

11.1%

47.0

9.1%

fixed cost

reduction

D&A

30.3

8.7%

29.2

17.2%

60.1

7.7%

59.5

11.4%

1.8m€ linked

Write downs

0.9

0.3%

5.5

3.2%

1.9

0.2%

6.4

1.2%

to Covid-19

EBIT

3.7

1.1%

(22.5) -13.3%

24.4

3.1%

(18.8)

-3.6%

Financial results

6.8

1.9%

4.8

2.8%

11.0

1.4%

11.6

2.2%

Income Tax

2.5

0.7%

-3.5

-2.1%

8.2

1.1%

-1.0

-0.2%

Minority Interest

0.0

0.0%

-0.6

-0.4%

2.3

0.3%

-0.6

-0.1%

NET INCOME OF

(5.6)

-1.6%

(23.2)

-13.7%

2.9

0.4%

(28.8)

-5.5%

OPERATING ACTIVITIES

Net income from discontinued

0.0

0.0%

0.0

0.0%

4.0

0.5%

0.0

0.0%

operations

NET INCOME

(5.6)

-1.6%

(23.2) -13.7%

6.9

0.9%

(28.8)

-5.5%

12

H1 2020 FCF Highlights - Cash Flow generation

  • Figures excluding IFRS16

€m

Q1 2020

Q2 2020

H1 2019

H1 2020

FUNDS PROVIDED BY OPERATIONS

23.2

6.1

71.0

29.4

Working Capital

(2.0)

(52.2)

(23.0)

(54.2)

of which € 7.5m

Capex (Tangible, Intangibles & IFRS15)

(25.4)

(21.5)

(54.0)

(46.8)

for new

Romanian plant

Others

3.7

(2.8)

2.7

0.8

FREE CASH FLOW (NET)

(0.4)

(70.3)

(3.3)

(70.8)

NET DEBT

256.7

327.0

267.3

327.0

FACTORING

96.3

57.6

103.2

57.6

13

Financial Position

  • At June 30, 2020, the Group has financing in excess for € 194.2 million
  • Sogefi anticipates a similar excess end 2020
  • In H2 2020 no debt repayments are scheduled
  • As of June 20 all covenants were met
  • Currently discussion on-going with banks for new state-backed financing in France and Italy: the group expects to thereby secure medium-term financing for around € 100 million

14

Covid update

15 I

Covid update - Status

Safety:

Actions taken to protect

workforce

Plants:

All plants now open

Main actions:

Using all government

incentives + cost

efficiency

Expectation:

Customers plants are now

reopened

  • Travel limitations, "quarantine" for employees coming back from zones at risk
  • Massive use of smart working in all regions
  • Implemented all health safety means defined by local authorities
  • Production processes revised to implement safety rules
  • Internal production of safety masks for the workforce
  • As of today Sogefi has reopened all plants working with reduced volume (with the exception of China now running at speed)
  • Local government support is high in western Europe and not-existing in other regions (i.e. South America or India) where the situation was managed trough local union agreements
  • In addition taking all necessary steps to manage the crisis by assessing liquidity, containing cash-out by reducing costs and investments that are not strictly necessary
  • China, strong recovery since March
  • North America, strong recovery since mid-May
  • EMEA, gradual recovery since mid-May
  • Brazil and India, very slow recovery

16

Covid update - Plants situation & incentives/agreements

Plants

Open

Europe

North America

Status

(61% of sales)

(19% of sales)

France

USA

↑↑

Italy

Canada

↑↑

↑↑↑

Asia

Slovenia

(10% of sales)

Mexico

Others

China

Closing March 23 / 26

Currently all open

Closing March 8 / 27

India

Currently all open

India closed March 23

Currently all open

Production

Governments'

Union

South America

Recovery

Incentives

Agreements

(11% of sales)

High

↑↑↑

↑↑↑

Brazil

Middle

↑↑

↑↑

Argentina

Low

Closing March 19 / 30

Currently all open

17

Perspectives

18 I

Market production evolution

€m

Europe

North America

South America

Asia

  • of which China Total

IHS Forecast (July 2020)

1Q 2020E

2Q 2020E

3Q 2020E

4Q 2020E

FY 2020E

-18.9%

-65.5%

-8.5%

-3.4%

-25.0%

-10.7%

-69.1%

-2.4%

-5.5%

-22.6%

-16.3%

-81.6%

-23.4%

-3.0%

-32.3%

-42.0%

-5.9%

-6.8%

-9.3%

-16.1%

-46.2%

9.4%

-3.3%

-9.5%

-12.8%

-22.2%

-44.5%

-11.0%

-9.5%

-21.9%

Primary brokers, institutes,

consulting firms estimating within a range -15/30% depending on different scenarios

Source: Sogefi and IHS data. Passenger cars and Light commercial vehicles only. Europe is Europe 28 and Asia is China + India

19

2020 OUTLOOK

  • For H2 2020, IHS expects that, without a second outbreak of Covid-19, world production could be at -10% vs H2 2019. Market analysts forecasts, more cautiously, expect a world market reduction in a range between -15% and -30%
  • In this uncertain scenario, Sogefi has incorporated into its expectations for H2 2020 a world market scenario of around -20%, in which it expects to achieve a slightly positive EBIT, excluding restructuring costs, a significant reduction in the net loss vs H1 2020 and a slightly positive free cash flow
  • In light of the uncertain market outlook for the next few years, Sogefi has launched a plan for a significant reduction of fixed costs, which will be completed by the end of H1 2021, as well as actions to rationalize footprint and manage suppliers
  • At the end of June the 2020 the Company has financial resources in excess of its current needs and it does not foresee an increase in its debt by year end
  • In view of market uncertainties and anticipating the natural expiry of existing loans, Sogefi has started negotiations with its current financial partners to renew loans and enter into new medium-term loans for a total value of around € 100 million

20

CONTACTS

Yann Albrand, Group CFO

Stefano Canu, Investor Relations

SOGEFI

Via Ciovassino, 1/a

20121 Milano - Italia

Tel: +39 02 46750214

Fax: +39 02 43511348

Mail: ir@sogefigroup.com

21

DISCLAIMER

o

o

This document has been prepared by SOGEFI S.p.A. for information purposes only and for use in presentations of the Group's results and strategies.

For further details on the SOGEFI Group. reference should be made to publicly available information. including the Annual Report. the Semi-Annual and Quarterly Reports.

o Statements contained in this document. particularly the ones regarding any SOGEFI Group possible or assumed future performance are or may be forward looking statements and in this respect they involve some risks and uncertainties.

o

o

Any reference to past performance of the SOGEFI Group shall not be taken as an indication of future performance.

This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it

shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

22

Disclaimer

Sogefi S.p.A. published this content on 27 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2020 13:35:09 UTC


© Publicnow 2020
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Sales 2020 1 209 M 1 460 M 1 460 M
Net income 2020 -29,7 M -35,9 M -35,9 M
Net Debt 2020 375 M 453 M 453 M
P/E ratio 2020 -5,09x
Yield 2020 -
Capitalization 140 M 169 M 169 M
EV / Sales 2020 0,43x
EV / Sales 2021 0,38x
Nbr of Employees 6 284
Free-Float 42,6%
Chart SOGEFI S.P.A.
Duration : Period :
Sogefi S.p.A. Technical Analysis Chart | SO | IT0000076536 | MarketScreener
Technical analysis trends SOGEFI S.P.A.
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
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Buy
Mean consensus HOLD
Number of Analysts 4
Average target price 1,15 €
Last Close Price 1,19 €
Spread / Highest target 5,22%
Spread / Average Target -3,20%
Spread / Lowest Target -11,6%
EPS Revisions
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NameTitle
Mauro Fenzi Chief Executive Officer & General Manager
Monica Mondardini Chairman
Yann Albrand Group Chief Financial Officer
Rodolfo de Benedetti Director
Roberta di Vieto Independent Director
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