Sogefi (CIR Group): revenues at 777.8m in first half 2019
Board of Directors approves results as of June 30 2019
SOGEFI (CIR GROUP): RESULTS FOR FIRST HALF 2019
Revenues at 777.8m, -3% at constant exchange rates in a global market down by 6.7%
EBITDA at 86.4m ( 95.3m in 2018)
Net income at 6.9m ( 14.8 in 2018)
Net debt (net of IFRS 16) at 267.3m ( 260.5 at 31/12/2018)
Milan, July 22 2019 The Board of Directors of Sogefi S.p.A., which met today and was chaired by Monica Mondardini, approved the Semi-Annual Financial Report as of June 30 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 half was difficult for the automotive markets with a 6.7% decrease in volumes. However, Sogefi reported a decline in revenues of 3% at constant exchange rates, with a better performance than the market, especially in Europe. The profitability of the second quarter was, as expected, slightly better than in the first quarter.
In the first half of 2019, the world car market reported a decline in production of 6.7%, with Europe down by 6.1%, Asia down by 12.4% and North America down by 2.7%. South America also reported a decline (-3.2%) mainly because of the difficult Argentinian market (-33%).
Sogefi reported revenues of 777.8 million, down by 3% at constant exchange rates and by 4.3% at historical exchange rates compared to the same period of 2018, with a better performance than that of the market in which it operates thanks to the resiliency of business in Europe.
Performance of revenues by geographical area
By geographical area, revenues at constant exchange rates were down in Europe (-3.3%), in North America (-3.7%) and in Asia (-14%) while South America recorded +11%.
Performance of revenues by Business Unit
By Business Unit, at constant exchange rates, Suspensions reported a decline of 4.3% (-7.5% at current exchange rates), Filtration was down by 0.6% (-2.1% at current exchange rates) and lastly, Air and Cooling declined by 4.2% (-2.4% at current exchange rates).
Operating results and net income
EBITDA came in at 86.4 million versus 95.3 million in the first half of 2018; profitability (EBITDA / Revenues %) fell from 11.7% to 11.1%. The reduction in EBITDA mainly reflects the lower volumes.
EBIT came to 24.4 million compared to 38.1 million in the first half of 2018. Profitability (EBIT / Revenues %) was 3.1% versus 4.7% in the first half 2018, this decline also deriving mainly from the reduction in volumes.
It is worth mentioning that the quarterly trend indicates a slight improvement in the profitability of the second quarter compared to the first (from 2.9% to 3.4%), as well as a realignment compared to the values of the same period of 2018 (3.8%).
Income before taxes and minority shareholder interests amounted to 13.4 million ( 24.2 million in first half 2018) after financial expense of 11 million ( 13.9 million in first half 2018).
Net income came to 6.9 million, compared to the figure reported in the first half of 2018 ( 14.8 million), after tax expense of 8.3 million in first half 2019, versus 10.4 million in the same period of 2018. The increase in the tax rate reflects the composition of the result considering that, with some areas showing significant earnings and other areas reporting losses linked to the start-up of businesses or to ongoing difficulties, it was decided not to set aside deferred tax assets.
Net income includes a profit of 4.0 million relating to the sale of the Fraize plant (reported under the item discontinued operations), which compares with 3.1 million for the same activity in the first half of 2018.
The Free Cash Flow for the first half of 2019 was negative for 8.8 million, which includes 5.4 million from the application of the IFRS 16 accounting principle; excluding the IFRS 16 effect, the cash flow for the period is equal to - 3.4 million, compared to the positive amount of 3.9 million in the same period of 2018, as a consequence of the lower operating cash generation due to the effect of business performance.
Net debt stood at 332.1 million as of June 30 2019, including 64.8 million relating to the application of IFRS 16. Excluding this amount, the financial debt as of June 30 2019 came to 267.3 million, and is substantially in line with net debt at the end of June and December 2018.
At June 30 2019, equity excluding minority shareholder interests totalled 195.4 million ( 192.9 million at December 31 2018).
The Sogefi Group had 6,683 employees at June 30 2019, compared to 6,967 at December 31 2018. Apart from the decline in business, the reduction was also due to the disposal in 2019 of the Fraize plant (127 employees at December 31 2018 and 123 at June 30 2018).
Results of the Parent Company Sogefi S.p.A.
In the first half of 2019 Sogefi S.p.A. recorded net income of 32.7 million compared to 24.2 million in the corresponding period of the previous year. The increase was mainly due to the higher dividends distributed by the subsidiaries (+ 4.4 million) and lower net financial expense (- 3.7 million).
Net debt at June 30 2019 amounted to 188.6 million, compared to 225.7 million at December 31 2018.
Shareholders' equity stood at 236.5 million at June 30 2019, up from 203.2 million at December 31 2018.
Outlook for the year
In relation to the forecasts for the automotive market, after the 6.7% decline reported in the first half of 2019, the sources generally used at the sector level are expecting, for the second half of the year, a much lower decrease (-0.4% ), which also reflects the weakness of the market in the second half of 2018.
Based on these general prospects, as well as on specific factors, Sogefi expects sales in the second half of the year to be substantially in line with the same period of last year.
Given the above, the EBIT margin in the second half is expected to improve slightly compared to the first half of the year.
The executive responsible for the preparation of the Companys 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 Companys accounts and general ledger.
22 July 2019 | 15:18 CEST