Board of Directors approves results as of March 31 2019
SOGEFI (CIR GROUP): RESULTS FOR FIRST QUARTER 2019
Revenues at € 389.9m, -2.9% at constant exchange rates in a global market down by 6.7%
EBITDA at € 41.3m (€ 48.8m in 2018)
Net income at € 1.6m (€ 11.2 in 2018)
Net debt (net of IFRS 16) at € 262.1m (€ 260.5 at 31/12/2018)
Milan, April 26 2019 – The Board of Directors of Sogefi S.p.A., which met today and was chaired by Monica Mondardini, approved the Interim Financial Report of the group as of March 31 2019. Sogefi, a company of the CIR Group, is one of the main global producers of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.
Laurent Hebenstreit, Chief Executive Officer of Sogefi, made the following statement: “The first quarter was, as expected, difficult for the automotive markets. Sogefi reported a decline in revenues of 2.9% at constant exchange rates, with a better performance than the market, which was down by 6.7% in the first quarter of 2019. Profitability was affected by lower volumes and the reduction in margins in Filtration and Suspensions”.
In the first quarter of 2019, the world car market reported a decline in production of 6.7%, with Europe down by 5%, Asia down by 11.8% (mainly because of the contraction of the Chinese market, -13.5%) and North America down by 2.5%. South America also reported a decline (-4.9%) mainly because of the difficult Argentinian market.
In this context, Sogefi reported revenues of € 389.9 million, down by 2.9% at constant exchange rates and by 4% at historical exchange rates compared to the same period of 2018, obtaining a better performance than that of the market in which it operates.
Performance of revenues by geographical area
By geographical areas revenues at constant exchange rates were down in Europe (-3.6%), in North America (-2.6%) and in Asia (-9.1%).
Performance of revenues by Business Unit
By Business Units, at constant exchange rates, Suspensions reported a decline of 3.9% (-6.9% at current exchange rates), Filtration was down by 2.7% (-4.1% at current exchange rates) and lastly, Air and Cooling declined by 2.1% (at current exchange rates revenues were in line with the previous year).
Operating results and net income
EBITDA came in at € 41.3 million, lower than in the first quarter of 2018 (€ 48.8 million); profitability (EBITDA / Revenues %) fell from 12% to 10.6%. The reduction in profitability reflects the lower volumes and the margins erosion occurred in 2018 in Filtration and Suspensions, mainly due to the increase in the raw materials price.
EBIT, totalling € 11.3 million, was also lower than in the first quarter of 2018 (€ 22.6 million) and was equal to 2.9% of revenues. The decline in EBIT substantially reflects the decline in EBITDA.
Income before taxes and minority shareholder interests amounted to € 5.1 million (€ 15.8 million in first quarter 2018).
Net income came to € 1.6 million, down from the figure reported in the first quarter of 2018 (€ 11.2 million), after tax expense of € 3.6 million in first quarter 2019, versus € 5.2 million in the same period of 2018.
Free Cash Flow was a negative € 9.1 million in the first quarter of 2019 compared to a positive amount of € 9.3 million in the same period of 2018 and includes € 7.5 million for the application of the accounting standard IFRS 16 and € 1.6 million of operating cash consumption of which € 3.1 million due to the start-up of the new production plant in Morocco.
Net debt stood at € 328.9 million at March 31 2019. The application of IFRS 16 million determined the recognition in the accounts of financial debts for right of use for € 66.8 million. Excluding this amount, the financial debt at March 31 2018 came to € 262.1 million, up from € 260.5 million at the end of 2018.
At March 31 2019, equity excluding minority shareholders’ interests totalled 194.5 million (€ 192.9 million at December 31 2018).
The Sogefi Group had 6,906 employees at March 31 2019, down from 6,967 at December 31 2018.
Results of the Parent Company Sogefi S.p.A.
In the period under examination the parent company of the Group Sogefi S.p.A. reported a net loss of € 3.2 million (-€ 5.2 million in the first quarter of 2018). The change was due mainly to lower net financial expense.
Outlook for the year
In the second quarter, the global car market is expected to decline by 3.4% compared to the previous year (-7.7% in Europe).
In this environment, in the second quarter Sogefi forecast a lower sales reduction than market forecasts. In terms of profitability, EBIT for the second quarter is expected to improve compared to the first quarter.
The executive responsible for the preparation of the Company’s financial statements, Yann Albrand, hereby declares, in compliance with the terms of paragraph 2 Article 154-bis of the Finance Consolidation Act (TUF), that the accounting figures contained in this press release correspond to the results documented in the Company’s accounts and general ledger.
26 April 2019 | 16:30 CEST