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

SOGEFI S.P.A.

(SO)
  Report
Delayed Quote. Delayed Italian Stock Exchange - 01/15 11:35:55 am
1.188 EUR   -2.62%
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Sogefi: results for first nine months of 2020

10/23/2020 | 08:00am EST

PRESS RELEASE

THIRD QUARTER 2020 SHOWS PROFIT

Higher revenues, greater margin and lower fixed costs

RESULTS FOR FIRST NINE MONTHS NEGATIVELY IMPACTED BY FIRST HALF

Revenues at € 860.6 million, -21.9% at constant exchange rates (car market -23.2%)

EBITDA margin in line with 2019: € 94.7million, 11% of revenues

(11.4% in first nine months of 2019)

EBIT: -€ 3.2 million as effect of lower volumes

EBIT for the whole year 2020 expected to be positive (excluding restructuring costs)

Highlights from results for 3Q 2020

(in €m)

2019

2020

Δ%

Δ% at constant

exchange rates

Revenues

371.1

341.1

-8.1

-1.3

EBITDA*

44.4

47.6

EBIT

13.1

15.6

Net result

1.4

5.6

Highlights from results for 9M 2020

(in €m)

2019

2020

Δ%

Δ% at constant

exchange rates

Revenues

1149.0

860.6

-25.1

-21.9

EBITDA*

130.7

94.7

EBIT

37.4

-3.2

Net result

8.3

-23.2

Net debt (end of period)

264.6

299.0

Payables for leasing and rights of use

75.5

IFRS 16

Net debt after IFRS 16

374.5

  • EBITDA is calculated by adding to the "Ebit" figure the item "Amortization and depreciation" and the amount for the write-down of tangible and intangible assets included in the item "Other non-operating costs (revenues)", which totalled € 8.2 million at September 30 2020 (€ 2.2 million in the same period of the previous year).

1

Milan, October 23 2020 - The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Interim Financial Report of the group as of September 30 2020. Sogefi, a company of the CIR group, is one of the main producers worldwide of components for motor vehicles in three sectors: Air and Cooling, Filtration and Suspensions.

After the first half of 2020 in which world car production suffered an unprecedented decline (- 33.2%) due to the effects of the spread of the Covid-19 pandemic, in the third quarter the market reported a strong recovery compared to the previous quarter (+60.7%), with volumes just 3.5% below those of the same period of 2019 (after a second quarter at -42.9%). The recovery affected all markets: China, where production was greater than that of the third quarter of the previous year (+10.7%), NAFTA with volumes equivalent to those of third quarter 2019 (+0.5%), the EU with volumes gradually rising, although lower in the third quarter than in 2019 (-10.7%). In South America the situation was still decidedly critical (-20.9%).

Despite the recovery in the third quarter, the first nine months of 2020 as a whole again posted very significant declines: -23.2% for world car production compared to the first nine months of 2019, -31.3% in the EU, -26.5% in North America, -8.9 % in China and -40.4% in South America.

During the first half of the year the Group's priority was the safety of its workforce. From the moment when news of the Covid-19phenomenon in China was received, action was taken immediately to reduce the risk of contagion. In the second quarter almost all activity in the factories and other workplaces was suspended in compliance with the instructions issued by the various local authorities or at the decision of the company, which had recourse everywhere to working from home whenever possible. All measures recommended for health and safety in the workplace were adopted and production processes were reviewed in all geographical areas with the formulation and implementation of new safety protocols including social distancing and the use of systems for individual protection. In the current phase, the new wave of contagion is leading to the adoption of further restrictive measures to limit the number of people present in the workplace with the adoption of flexible working.

At the same time, incisive measures were put in place to mitigate the impact of the crisis and the consequent contraction in sales and these made it possible to achieve a positive result in the third quarter. In particular, this result was due to the following:

  • The increase in the contribution margin to 31%, up from 30.3% in the third quarter of 2019 and 29.5% in the second quarter;
  • The 20.2% reduction in fixed costs with their ratio to revenues falling from 17% in third quarter 2019 to 14.8% in 2020.

Despite the situation of the first nine months, since the beginning of the year Sogefi has obtained new contracts for a total amount estimated to be in line with previous years and with the objectives of maintaining/growing its market share.

More specifically, Air and Cooling obtained an important contract (€ 100 million) to supply air intake manifolds in aluminium to a prime German OEM. This material to all extents and purposes introduces a new product line in a date 25% of the value of orders received in the first nine months of the year were for components for cooling hybrid or full-electric vehicles, which forms a basis for the division to achieve an excellent positioning in the markets in future.

2

The Suspensions division received an order from a prime North American producer of full- electric vehicles and thus, at global level, orders for hybrid and full-electric applications reached 35% of the total orders for the 9-month period. This growth was obtained partly thanks to the new product developed specifically to meet the demand for lightweight parts and rapid time-to-market for electric vehicles. The division has in fact engineered a conical progressive rate spring suspension for this type of application.

KEY RESULTS FOR THE THIRD QUARTER OF 2020

Third quarter revenues showed a significant recovery compared to the previous period and were more or less in line with the third quarter of 2019 at constant exchange rates (-8.1% at current exchange rates).

The results were positive thanks to the recovery of revenues and to the measures adopted, which led to a slight increase in the contribution margin and a significant reduction of fixed costs.

EBITDA was 14% compared to 12% in the same period of 2019.

EBIT was positive for € 15.6 million, which was higher than the figure for 2019 of € 13.1 million; the ratio of EBIT to sales rose from 3.5% to 4.6%.

In the period the Group reported net income of € 5.6 million versus € 1.4 million in 2019.

Free Cash Flow before IFRS 16 was positive for € 28.0 million versus € 2.8 million in 2019.

KEY RESULTS FOR THE FIRST NINE MONTHS OF 2020

REVENUES

In the first nine months of 2020, Sogefi's revenues came in at € 860.6 million, posting a decline compared with the same period of 2019 of 25.1% at historical exchange rates and of 21.9% at constant exchange rates.

Looking back at the trend of revenues during the year, after the first two months of the year when sales were in line with 2019, in March the first effects of the pandemic were recorded (- 29.5% on 2019), which then became seriously worse in the months of April (-79.5%) and May (- 64.5%); in June the recovery began (with a more limited fall in revenues compared to 2019, -

24.9 %), continuing then in July (-18%), August (-7.5%) and September, when revenues showed slight growth compared to 2019 (+0.8%).

The performance of revenues at constant exchange rates in the first nine months was better than the market in all the main geographical areas: -24.6% in Europe versus the market's - 31.3%, -17.9% in NAFTA versus -26.5%, +12.6% in China versus -8.9%.

3

Performance of revenues by geographical areas

(in millions of Euro)

9M 2020

9M 2019

reported

constant

reference

weight

change

exchange

market

based on

rates

production

Q1 2020

Amount

Amount

%

%

%

%

Europe

530.9

705.1

(24.7)

(24.6)

(31.3)

61.7

North America

177.2

220.8

(19.8)

(17.9)

(26.5)

20.6

South America

60.4

120.7

(50.0)

(27.0)

(40.4)

7.0

Asia

97.0

109.1

(11.1)

(7.6)

(13.4)

11.3

- of which China

58.7

53.1

10.5

12.6

(8.9)

6.8

Intercompany eliminations

(4.9)

(6.7)

-

-

-

-

TOTAL

860.6

1,149.0

(25.1)

(21.9)

(23.2)

100.0

By business sector, Filtration (with a fall in revenues of 16.2% at constant exchange rates) and Air and Cooling (-17.8% at constant exchange rates) reported a distinctly less unfavourable performance than the market thanks, for Filtration, to the greater resilience of the OES and Aftermarket channels and, for Air and Cooling, to the development of the contract portfolio particularly in North America. The impact of the crisis was greater for Suspensions, where revenues fell by 30.6% at constant exchange rates, reflecting the greater concentration of the business in Europe and South America and the particularly unfavourable performance of the sector in these areas.

Performance of revenues by Business Unit

OPERATING RESULT AND NET RESULT

In the nine month period the fall in revenues had significant effects on the economic results of the group, despite the positive impact of the mitigation measures adopted.

EBITDA for the first nine months came in at € 94.7 million, down from € 130.7 million in the same period of 2019; it should be noted that profitability (EBITDA / Revenues %) came to 11%, which was substantially in line with the same period of 2019 (11.4%).

The contribution margin of the first nine months of the year was slightly better than that of 2019, rising from 29.7% to 30.3%; the impact of the cost of raw materials was lower thanks partly to market phenomena and partly to the plans put in place as from last year to optimize the purchase prices of steel for the production of suspension systems and this offset the impact of the inevitable production inefficiencies caused by the shutdown and subsequent return to production and the low volumes. The ratio of fixed costs to sales in the first nine months was substantially unchanged from the same period of 2019, thanks to the reductions

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Sogefi S.p.A. published this content on 23 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 October 2020 11:59:03 UTC


© Publicnow 2020
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Financials
Sales 2020 1 209 M 1 461 M 1 461 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.
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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
Sell
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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
Managers and Directors
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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