Quarterly Report • Aug 3, 2023
Quarterly Report
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Executive Chairperson Federico De Nora(*)
Chief Executive Officer Paolo Enrico Dellachà(*)
Directors Stefano Venier Maria Giovanna Calloni(**) Mario Cesari Paola Bonandrini Michelangelo Mantero Teresa Cristiana Naddeo(**) Elisabetta Oliveri(**) Giovanni Toffoli(**) Alessandro Garrone(**)
Chair Marcello Del Prete
Statutory Auditors Beatrice Bompieri Guido Sazbon
Alternate Auditors Pierpaolo Giuseppe Galimi Gianluigi Lapietra Raffaella Piraccini
Chair Teresa Cristiana Naddeo Giovanni Toffoli Paola Bonandrini
Chair Elisabetta Oliveri Mario Cesari Maria Giovanna Calloni
Chair Maria Giovanna Calloni Teresa Cristiana Naddeo Elisabetta Oliveri
Chair Paolo Enrico Dellachà Federico De Nora Mario Cesari Stefano Venier Paola Bonandrini
Massimiliano Moi
PricewaterhouseCoopers S.p.A.2
Chair Gianluca Sardo Silvio Necchi Claudio Vitacca
1 Appointed by the Shareholders' Meeting held on March 9, 2022 (with the exception of Directors Stefano Venier appointed on April 28, 2022, Alessandro Garrone appointed on June 20, 2022, Paola Bonandrini appointed on April 28, 2023, already co-opted on March 22, 2023). The Board of Directors is in office until the approval of the Financial Statements as at December 31, 2024. On June 1 2023 the Company received the resignation of Roberto Cingolani as independent non-executive Director and Strategies Committee member.
(*) Executive director.
(**) Independent director pursuant to Articles 147-ter, paragraph 4, and 148, paragraph 3, of the TUF (Consolidated Finance Act) and Article 2 of the Corporate Governance Code.
2 Appointed by the Shareholders' Meeting on February 18, 2022 for the period covering 2022 - 2030.
Below is the Group structure with an indication of the companies belonging to the Group and the investment held
by the Parent Company, directly or indirectly, in each subsidiary at June 30, 2023.
Effective January 1, 2023, De Nora ISIA S.r.l. was merged by incorporation into De Nora Water Technologies Italy S.r.l..
In May, Industrie De Nora S.p.A. has completed through its German subsidiary De Nora Deutschland GmbH, the acquisition of 100% of the share capital of Shotec GmbH.
146.32% Indian Stock exchange + promoters 266% thyssenkrupp Projekt 1 GmbH 3 20% Mr. Bu Bingxin 4 20% Biocatters Holding, LLC 5 10% SNAM S.p.A.
Legal entity Branch office
9
The global economy is turning a corner but faces a long road ahead to attain strong and sustainable growth. Global GDP growth slowed substantially throughout 2022, but several of the factors weighing negatively are now unwinding. Falling energy prices and headline inflation, easing supply bottlenecks and the reopening of China's economy, coupled with strong employment and relatively resilient household finances, all contribute to a projected recovery. Nevertheless, the recovery will be weak by past standards. Global growth is projected to be 2.7% in 2023, with a modest pick-up to 2.9% in 2024, both well below the average growth rate in the decade preceding the COVID-19 pandemic.
Although headline inflation is declining thanks to lower energy prices, core inflation remains high, more so than previously expected. Central banks need to maintain restrictive monetary policies until there are clear signs that underlying inflationary pressures are abating. Given the uncertainties around the impact of the rapid and globally synchronised monetary policy tightening following an extended period of low interest rates. The tightening has already revealed some vulnerabilities in financial markets. Should further financial market stress arise, central banks should deploy financial policy instruments to enhance liquidity and minimise contagion risks.
The choices for fiscal policymakers are clearer but no easier to implement given the political sensitivity of policy choices with direct redistributive effects.
Fiscal policy played a vital role in supporting the global economy through the shocks of the COVID-19 pandemic and Russia's war in Ukraine. However, in the aftermath, most countries are grappling with higher budget deficits and higher public debt. The burden of debt servicing is increasing and spending pressures related to ageing and the climate transition are building.
As the recovery takes hold, fiscal support should be scaled back and better targeted. Resources should be targeted only to those who really need it and to high-priority productivity-enhancing investments, including those driving the green transition and improving labour supply and skills.
Ultimately only ambitious structural policy reforms, such as revitalising labour and product markets, removing barriers to cross-border trade, promoting competition and adapting competition policies to the digital era and enhancing skill development, can sustainably raise long-term economic growth and people's quality of life.
Private and public investment is needed in human, tangible and intangible capital to enable people to make the most of their skills and capabilities, and to harness the ever-increasing opportunities from technological transformation. Investment in education and skills is critical to enable people to flourish in the future economy and reap the benefits of increased productivity.
3 Source: OECD Economic Outlook, June 2023.
The following table summarizes the main reference foreign currencies of De Nora Group (transaction currency or functional currencies of foreign entities belonging to the Group) for the reporting period and the corresponding period of 2022 and the relative foreign exchange rates:
| Average exchange rate for the first half-year ended June 30 |
Exchange rate at June 30 |
Exchange rate at December 31 |
||
|---|---|---|---|---|
| Currency | 2023 | 2022 | 2023 | 2022 |
| US Dollar | 1.0809 | 1.09321 | 1.0866 | 1.0666 |
| Japanese Yen | 145.7753 | 134.61467 | 157.1600 | 140.66 |
| Indian Rupee | 88.8562 | 83.29386 | 89.2065 | 88.1710 |
| Chinese Yuan Renminbi | 7.4906 | 7.08820 | 7.8983 | 7.3582 |
| Brazilian Real | 5.4827 | 5.55545 | 5.2788 | 5.6386 |
| GB Pound | 0.8763 | 0.84296 | 0.8583 | 0.8869 |
In addition to the Euro, the most important currencies for the Group are the US dollar and the Japanese Yen: the US dollar has devaluated by approximately 2% in the first half of 2023, while the Japanese Yen recorded a devaluation close
to 12%. Also relevant, albeit to a lesser extent in terms of impact on the Group's performance, are the devaluation of the Chinese Yuan Renminbi (approximately -7%) and the appreciation of the Brazilian real (approximately +6%).
Stock market performance during the first half of 2023 has been characterized by different events and trends such as the strong increase of technological shares, normalization of markets linked to raw materials and the significant drop in banking market. Such market trends reflected also the continuous increase of interest rates affecting as well exchange rates in the different geographies.
The increase in cost of money linked to inflationary pressures already hit the market in 2022. But in the first half of 2023 the perception that the end of that cycle was near has strengthened Such expectations favored a rebound of the main stock international indices, notwithstanding the uncertainties related to the macroeconomic international scenario.
In the first year of listing on Euronext Milan (first listing day June 30, 2022) the share has increased by 42% compared to IPO price (13.50 Euro), confirming the interest and appreciation of national and international investors of the Equity Story of the Group, strongly positioned on enabling technologies for the energy transition with particular focus on
green hydrogen and on a solid global leadership of the traditional businesses Electrode Technologies and Water Technologies.
With reference to the period January – June 2023 De Nora share has vigorously followed the international stock markets recovery, showing a positive performance of 32%, higher than the Euro Stoxx 600 that has increased by around 8% and the Italian index FTSE All Share that has increased by 16%. The share has also recorded a good relative performance compared to the main international listed peers4.
Average volumes traded daily in the first half of 2023 amount to 0.16 million of shares with an average unit price per share of 18.15 Euro.
De Nora during the first six months of the year has carried out an intense investor relation activity through various roadshows in Europe (both in presence and virtually), conventions organized by primary national and international brokers and conference calls following quarterly results presentations, meeting over 360 investors and 240 investment houses. Engagement with investors plays a key role for the Group and will be pursued and strengthened also in the coming years.
4 Peers included in the analysis: Xylem, Pentair, Fluidra, Permascand, Plugpower, Nel, ITM, MchPhy.
| Industrie De Nora share - Euronext Milan, (Euro) | Period 01/01/2023 - 30/06/2023 |
|---|---|
| Beginning of the period price (January 2, 2023) | 14.50 |
| Maximum (June 9, 2023) | 21.00 |
| Minimum (January 2, 2023) | 14.50 |
| Average | 18.15 |
| End of the period price (June 30, 2023) | 19.23 |
| Capitalization – ordinary shares – ¤ million | 985 |
| Total capitalization5 as at June 30, 2023 – ¤ million | 3,878 |
| Number of shares | Number of voting rights | |
|---|---|---|
| Share Capital | Euro 18,268,203.90 | Euro 18,268,203.90 |
| Total shares | n. 201,685,174 | n. 502,647,564 |
| Ordinary shares | n. 51,203,979 | n. 51,203,979 |
| Multiple voting shares7 | n. 150,481,195 | n. 451,443,585 |
5 Total capitalization is calculated as follows: (number of ordinary shares + multiple voting shares) multiplied by ordinary shares price.
6 Source: Bloomberg.
7 Owned by the shareholders Federico De Nora, Federico De Nora S.p.A., Norfin S.p.A. and Asset Company 10 S.r.l. Multiple voting shares are not admitted to trading on Euronext Milan and are not counted in the free float and market capitalization value. The multiple voting shares grants 3 votes at the shareholders' meeting.
In this document, in addition to the financial measures provided for by International Financial Reporting Standards (IFRS), a number of measures derived from the latter are presented even though they are not provided for by IFRS (Non-GAAP Measures) in line with ESMA's guidelines on Alternative Performance Indicators (ESMA/2015/1415 Guidelines, adopted by Consob with Communication No. 92543 of December 3, 2015) published on October 5, 2015. These measures are presented in order to enable a better assessment of the Group's operating performance and should not be regarded as alternatives to IFRS. Specifically, the Non-GAAP Measures used are as follows:
Adjusted EBITDA Margin is calculated as the ratio of Adjusted EBITDA to Revenues.
Adjusted EBIT is defined as EBIT adjusted for: (i) certain charges/(income) of a non-recurring nature; (ii) certain Provision for risk and charges, net of utilization and releases, of a non-recurring nature.
net of Employee benefits, Provisions for risks and charges, Deferred tax liabilities, Trade payables (non-current portion), Income tax payables and Other payables (non-current portion).
Net Financial Indebtedness ESMA is determined in accordance with CONSOB Communication DEM/6064293 of July 28, 2006, as amended by CONSOB Communication No. 5/21 of April 29, 2021, and in accordance with ESMA Recommendations contained in Guidelines 32-382-1138 of March 4, 2021 on disclosure requirements under the Prospectus Regulation.
open for Euro 80,000 thousand and USD 40,000 thousand, respectively.
by Stefan Hartmann and based in Hanau (Germany), Shotec develops and operates plasma coating technologies for metals and metal surfaces to improve their mechanical and physical-chemical properties. This transaction will allow De Nora to exploit its know-how in coating preparations for many electrochemical processes and is aimed at broadening the process and technology portfolio for the production of electrodes, while also guaranteeing its production capacity enhancement. The acquisition was
pursued following continuous monitoring of the market and evaluation of key synergies with companies and research centers, with the ultimate goal of further strengthening research and development activities with a view to a progressive reduction in the use of precious metals in anodic and cathodic coating activities, to make the electrochemical processes in which the coatings are used increasingly competitive, in line with market demand for economic and reliable performance over time.
Revenues for the six-month period amounted to Euro 420.4 million, of which approximately Euro 231.7 million were attributable to the Electrode Technologies segment, approximately Euro 141.4 million to the Water Technologies segment, and approximately Euro 47.3 million to the Energy Transition segment, an overall increase of 2.4% over the comparable six-month period in 2022.
EBITDA is close to Euro 85 million, compared to almost Euro 80 million in the first half of 2022 (+6.5%), while Adjusted EBITDA8 is Euro 86.1 million, compared to Euro 102.3 million in the first half of 2022, with a decrease of about 16%. Adjusted EBITDA margin decreased from 24.9% in the first half of 2022 to 20.5% in the first half of 2023.
Similarly, the operating result, equals to Euro 67.4 million, increased by 7.2% compared to the same half of 2022, whist Adjusted EBIT is equal to 68.7 million, compared to Euro 85.2 million of the same half of 2022, with a decrease of 19.4%.
The share of profit of equity-accounted investees, referring to the 34% stake in tk nucera, is positive for Euro 1.5 million (share of the net result of the associated company for the period January 1st 2023 – March 31st 2023) compared to the negative Euro 5.5 million in the first half of 2022.
Financial operations show net expenses of Euro 4.5 million, compared with net income of Euro 3.7 million in the first half of 2022, the latter with a better net balance between foreign exchange gain and losses.
After current and deferred income taxes, amounting to Euro 17.7 million (compared to Euro 21.2 million in the first half of 2022), the half-year closed with a net profit (Group's share) of Euro 46.2 million, increased by about 16% compared to the Euro 39.9 million in the comparable half-year of 2022.
Statement of financial position shows a net invested capital of about Euro 739 million (+47 million compared to the end of 2022) and an equity of Euro 748 million (Euro 4 million higher than as of December 31, 2022) with a net financial position of approximately Euro 9 million (reduced by Euro 43 million compared to the end of 2022).
The increase in net invested capital, with resulting impacts on the net financial position reduction, is attributable both to net operating working capital, which amounts to Euro 312 million at the end of June 2023 with an increase of Euro 32 million compared to the end of 2022 mainly due to trade receivables and construction contracts, and to the increase of tangible assets for the new investments of the period.
8 For the reconciliation between EBITDA and Adjusted EBITDA see paragraph 5.2 and 5.4.2
| For the half-year ended June 30 | |||||
|---|---|---|---|---|---|
| in ¤ thousands | 2023 | 2022 | |||
| Revenue | 420,384 | 100.0% | 410,467 | 100.0% | |
| Change in inventory of finished goods and work in progress |
25,308 | 6.0% | 14,485 | 3.5% | |
| Other income | 3,372 | 0.8% | 2,540 | 0.6% | |
| Value of production | 449,064 | 106.8% | 427,492 | 104.1% | |
| Material Consumption | (198,953) | -47.3% | (189,950) | -46.3% | |
| Personnel costs | (72,450) | -17.2% | (83,191) | -20.3% | |
| Costs for services | (86,665) | -20.6% | (69,981) | -17.0% | |
| Other operating expenses/income | (6,196) | -1.5% | (4,771) | -1.2% | |
| EBITDA | 84,800 | 20.2% | 79,599 | 19.4% | |
| Amortization of intangible assets | (5,217) | -1.2% | (4,498) | -1.1% | |
| Depreciation of property, plant and equipment |
(9,227) | -2.2% | (9,062) | -2.2% | |
| Net provision for risk and charges | (1,694) | -0.4% | (107) | 0% | |
| Impairment and write-backs | (1,276) | -0.3% | (3,083) | -0.8% | |
| Operating profit (EBIT) | 67,386 | 16.0% | 62,849 | 15.3% | |
| Share of profit of equity-accounted investees | 1,527 | 0.4% | (5,551) | -1.4% | |
| Finance income | 5,925 | 1.4% | 21,483 | 5.2% | |
| Finance expenses | (10,429) | -2.5% | (17,799) | -4.3% | |
| Profit before tax | 64,409 | 15.3% | 60,982 | 14.9% | |
| Income tax expense | (17,683) | -4.2% | (21,249) | -5.2% | |
| Profit for the period | 46,726 | 11.1% | 39,733 | 9.7% | |
| Attributable to: | |||||
| Parent Company shareholders | 46,233 | 11.0% | 39,918 | 9.7% | |
| Non-controlling interests | 493 | 0.1% | (185) | 0% | |
| EBITDA | 84,800 | 20.2% | 79,599 | 19.4% | |
| Non-recurring items | 1,323 | 22,724 | |||
| Adjusted EBITDA | 86,123 | 20.5% | 102,323 | 24.9% | |
| Operating Profit (EBIT) | 67,386 | 16.0% | 62,849 | 15.3% | |
| Non-recurring items | 1,323 | 22,724 | |||
| Utilization of provisions | - | (344) | |||
| Adjusted EBIT | 68,709 | 16.3% | 85,229 | 20.8% |
| in ¤ thousands | As of June 30 2023 | As of December 31 2022 | ||
|---|---|---|---|---|
| Trade receivables | 135,466 | 123,421 | ||
| Trade payables | (86,805) | (80,554) | ||
| Inventories | 298,424 | 295,476 | ||
| Construction contracts, net of progress payments and advances |
23,263 | 16,432 | ||
| Net Operating Working Capital | 370,348 | 50.1% | 354,775 | 51.2% |
| Other current assets/(liabilities) | (62,964) | (74,620) | ||
| Net Working Capital | 307,384 | 41.6% | 280,155 | 40.4% |
| Goodwill and intangible assets | 126,427 | 131,552 | ||
| Property, plant and equipment | 205,135 | 184,177 | ||
| Equity-accounted investees | 123,482 | 122,664 | ||
| Non-current assets | 455,044 | 61.5% | 438,393 | 63.3% |
| Employee benefits | (20,693) | (2.8)% | (20,628) | (3.0)% |
| Provisions for risks and changes | (22,267) | (3.0)% | (20,688) | (3.0)% |
| Deferred tax assets/(liabilities) | 6,391 | 0.9% | 4,432 | 0.6% |
| Other non-current assets/(liabilities) | 13,551 | 1.8% | 11,174 | 1.6% |
| Net Invested Capital | 739,410 | 100.0% | 692,838 | 100.0% |
| Covered by: | ||||
| Medium/long term financial debt | (121,929) | (267,544) | ||
| Short-term financial indebtedness | (13,464) | (13,655) | ||
| Financial assets and derivatives | 11,297 | 158,392 | ||
| Cash and cash equivalents | 132,507 | 174,129 | ||
| Net liquidity – ESMA | 8,411 | 1.1% | 51,322 | 7.4% |
| Fair value of financial instruments (exchange rate hedges) |
665 | 644 | ||
| Net liquidity | 9,076 | 1.2% | 51,966 | 7.5% |
| Equity attributable to minority interests | (5,034) | (0.7)% | (3,586) | (0.5)% |
| Equity attributable to the Group | (743,452) | (100.5)% | (741,218) | (107.0)% |
| Total Equity and Minority interests | (739,410) | (100.0)% | (692,838) | (100.0)% |
Revenue by business segment
The Group is organized into three business segments each with its own portfolio of specific products and services:
The following tables show the Group's revenues for each business segment and by geographic area for the six-month periods ended June 30, 2023 and 2022, respectively.
| Revenue by Business Segment |
First Half Year 2023 |
% of total revenue |
First Half Year 2023 at constant exchange rates |
First Half Year 2022 |
∆ First Half Year 2023 vs 2022 |
∆ First Half Year 2023 vs 2022 at constant exchange rates |
|---|---|---|---|---|---|---|
| (in ¤ thousands) | ||||||
| Electrode Technologies | 231,701 | 55% | 238,146 | 227,952 | 3,749 | 10,194 |
| Water Technologies | 141,406 | 34% | 141,852 | 175,650 | (34,244) | (33,798) |
| Energy Transition | 47,277 | 11% | 47,379 | 6,865 | 40,412 | 40,514 |
| Total Revenue | 420,384 | 100% | 427,377 | 410,467 | 9,917 | 16,910 |
| Revenue by geographical area and by business segment |
First Half-Year 2023 |
% of revenues |
First Half-Year 2022 |
% of revenues |
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Electrode Technologies | 231,701 | 55% | 227,952 | 55% |
| EMEIA | 66,769 | 16% | 81,631 | 20% |
| AMS | 58,940 | 14% | 46,188 | 11% |
| APAC | 105,992 | 25% | 100,133 | 24% |
| Water Technologies | 141,406 | 34% | 175,650 | 43% |
| EMEIA | 46,834 | 11% | 42,102 | 10% |
| AMS | 66,848 | 16% | 95,118 | 23% |
| APAC | 27,724 | 7% | 38,430 | 10% |
| Energy Transition | 47,277 | 11% | 6,865 | 2% |
| EMEIA | 45,016 | 11% | 5,226 | 2% |
| AMS | 872 | 0% | 235 | 0% |
| APAC | 1,389 | 0% | 1,404 | 0% |
| Total Revenue | 420,384 | 100% | 410,467 | 100% |
The following table show Group revenues related to new installations or new plants ("New Installations") and to periodic maintenance of the plants and of the existing installations ("Services") for the six-month periods ended June 30, 2023 and 2022, respectively.
| First Half-Year 2023 |
% of revenues |
First Half-Year 2022 |
% of revenues |
||||
|---|---|---|---|---|---|---|---|
| (in ¤ thousands) | |||||||
| New Installations | 292,301 | 70% | 290,144 | 71% | |||
| Services | 128,083 | 30% | 120,323 | 29% | |||
| Total Revenue | 420,384 | 100% | 410,467 | 100% |
At consolidated level, revenues amounted to Euro 420,384 thousand, including Euro 231,701 thousand in the Electrode Technologies segment, Euro 141,406 thousand in the Water Technologies segment, and Euro 42,278 thousand in the Energy Transition segment.
Specifically, revenues increased overall by Euro 9,917 thousand compared to the first half of 2022; at constant exchange rates, Group revenues in the first half of 2023 would have been increased by Euro 16,910 thousand.
| EBITDA by business segment | First Half-Year 2023 |
% of revenues |
First Half-Year 2022 |
% of revenues |
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Electrode Technologies | 59,643 | 70% | 52,760 | 66% |
| Water Technologies | 19,225 | 23% | 30,595 | 38% |
| Energy Transition | 5,932 | 7% | (3,756) | (4%) |
| Total | 84,800 | 100% | 79,599 | 100% |
| First Half-Year 2023 | First Half-Year 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| Non-recurring items impacting EBITDA |
Electro de Techno logies |
Water Techno logies |
Energy Transi tion |
Total | Electro de Techno logies |
Water Techno logies |
Energy Transi tion |
Total |
| (in ¤ thousands) | ||||||||
| Terminations costs (labor + legal expenses) |
142 | 120 | - | 262 | 10 | 310 | - | 320 |
| Costs relative to IPO process |
368 | 225 | 75 | 668 | 1,437 | 1,106 | 43 | 2,586 |
| Costs relative to M&A, integration, and company reorganization |
93 | - | - | 93 | 9 | - | - | 9 |
| Costs relative to startup of De Nora Tech, LLC – US plant |
- | - | - | - | 50 | - | - | 50 |
| Advisory costs for special projects |
- | - | - | - | 343 | - | - | 343 |
| Management Incentive Plan |
- | - | - | - | 10,752 | 8,284 | 324 | 19,360 |
| Other non recurring costs |
198 | 76 | 26 | 300 | 6 | 50 | - | 56 |
| Total | 801 | 421 | 101 | 1,323 | 12,607 | 9,750 | 367 | 22,724 |
| Adjusted EBITDA by business segment |
First Half-Year 2023 |
% of total |
First Half-Year 2022 |
% of total |
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Electrode Technologies | 60,444 | 70% | 65,367 | 64% |
| Water Technologies | 19,646 | 23% | 40,345 | 39% |
| Energy Transition | 6,033 | 7% | (3,389) | (3%) |
| Total | 86,123 | 100% | 102,323 | 100% |
Group EBITDA increased by Euro 5,201 thousand (+6.5%), from Euro 79,599 thousand in the six months ended June 30, 2022 to Euro 84,800 thousand in the six months ended June 30, 2023. The increase refers both to the Electrode Technologies and Energy Transition segments (respectively for Euro 6,882 thousand and Euro 9,689 thousand) while the Water Technologies segment, shows a decrease of Euro 11,370 thousand.
The EBITDA margin improves from 19.4% in the six months ended June 30, 2022 to 20.2% in the six months ended June 30, 2023.
Adjusted EBITDA decreased by Euro 16,200 thousand (-15.8%) from Euro 102,323 thousand in the six months ended June 30, 2022 to Euro 86,123 thousand in the six months ended June 30, 2023.
The Adjusted EBITDA margin shows a decrease from 24.9% in the six months ended June 30, 2022 to 20.5% in the six months ended June 30, 2023.
Electrode Technologies' core business is the production and sale mainly of:
For the six-month period ended June 30, 2023, the Electrode Technologies Business accounted for approximately 55% of the Group's revenues in line with the previous period.
The table below shows the revenues generated by the Electrode Technologies Business for the six-month periods ended June 30, 2023 and 2022, broken down by business lines.
| Revenue by Business Line Electrode Technologies |
First Half-Year 2023 |
% of total revenue |
First Half-Year 2023 at constant exchange rates |
First Half-Year 2022 |
∆ First Half-Year 2023 vs 2022 |
∆ First Half-Year 2023 vs 2022 at constant exchange rates |
|---|---|---|---|---|---|---|
| (in ¤ thousands) | ||||||
| Chlor-alkali | 158,502 | 69% | 162,696 | 145,174 | 13,328 | 17,522 |
| Electronics | 42,176 | 18% | 43,853 | 47,381 | (5,205) | (3,528) |
| Specialties and New Applications |
31,023 | 13% | 31,598 | 35,397 | (4,374) | (3,799) |
| Total Electrode Technologies | 231,701 | 100% | 238,147 | 227,952 | 3,749 | 10,195 |
Revenues related to the Electrode Technologies Business segment increased by Euro 3,749 thousand (+2%), from Euro 227,952 thousand in the six months ended June 30, 2022 to Euro 231,701 thousand in the six months ended June 30, 2023. The growth is mainly related to Chlor-alkali business line only partially offset by the other business lines Electronics and Specialties and New Applications.
At constant exchange rates, revenues related to the Electrode Technologies Business would have increased by Euro 10,195 thousand (+4%), from Euro 227,952 thousand in the six months ended June 30, 2022 to Euro 238,147 thousand in the six months ended June 30, 2023.
Revenues from the chlor-alkali business line increased by Euro 13,328 thousand (+9%), from Euro 145,174 thousand in the six months ended June 30, 2022 to Euro 158,502 thousand in the six months ended June 30, 2023. Such variation is mainly attributable to:
(i) higher Membrane sales for Euro 17,662 thousand the Euro 20,614 thousand distributed homogeneously in Asia, United States and EMEIA;
(ii) lower sales of Hydrochloric Acid (HCl) for Euro 8,953 thousand due to the non-repetitiveness of some maintenance projects executed in 2022 through tk nucera;
(iii) the increase of Euro 4,619 thousand in Diaphragm and Mercury sales mainly in Italy and Brazil.
At constant exchange rates, revenues related to the Chlor-Alkali line would have increased by Euro 17,522 thousand (+12%), from Euro 145,174 thousand in the six months ended June 30, 2022 to Euro 162,696 thousand in the six months ended June 30, 2023.
For the six months ended June 30, 2023, the chlor-alkali business line accounted for 69% of Electrode
Technologies segment revenues and 38% of the Group's total revenues.
Revenues related to the Electronics business line decreased by Euro 5,205 thousand (-11%), from Euro 47,381 thousand in the six months ended June 30, 2022 to Euro 42,176 thousand in the six months ended June 30, 2023. This decrease is mainly attributable to the slow down of the demand of printed circuit boards in the Asian market due to a negative rebound effect following the strong increased occurred during COVID-19 pandemic.
At constant exchange rates, revenues related to the Electronics business line would have decreased by Euro 3,528 thousand (-7%).
For the six months ended June 30, 2023, the Electronics business line accounted for 18% of Electrode Technologies segment revenues and 10% of the Group's total revenues, respectively.
Revenues related to the Specialties and new applications business line decreased by Euro 4,374 thousand (-12%), from Euro 35,397 thousand in the six months ended June 30, 2022 to Euro 31,023 thousand in the six months ended June 30, 2023. This decrease is mainly attributable to:
(i) lower sales for Euro 4,349 thousand of Electrowinning product line following the slowdown of shipments to the Russian customer Norilsk Nickel. For further information regarding the management of relationships with counterparties operating in Russia see paragraph "3.2 Russia-Ukraine conflict" in the Notes to the condensed consolidated half-yearly financial statements section;
(ii) lower sales for Euro 3,283 thousand of electrodes for Systems and Plants in Asia;
(iii) higher sales for Euro 3,283 thousand of other materials.
At constant exchange rates, revenues related to the specialties and new applications business line would have decreased by Euro 3,799 thousand (-11%), from Euro 35,397 thousand in the six months ended June 30, 2022 to Euro 31,598 thousand in the six months ended June 30, 2023.
For the six months ended June 30, 2023, the Specialties and new applications business line accounted for 13% of Electrode Technologies segment revenues and 7% of the Group's total revenues, respectively.
The following table shows the revenues generated by the Electrode Technologies Business for the six-month periods ended June 30, 2023 and 2022, broken down by new installations ("New Installations") and periodic maintenance or modernization services for existing plants ("Services").
| First Half-Year 2023 |
% of total revenue |
First Half-Year 2022 |
% of total revenue |
||||
|---|---|---|---|---|---|---|---|
| (in ¤ thousands) | |||||||
| New Installations | 139,461 | 60% | 138,123 | 61% | |||
| Services | 92,240 | 40% | 89,829 | 39% | |||
| Total Revenue | 231,701 | 100% | 227,952 | 100% |
New Installations accounted for 60% of the segment's turnover for the first half of 2023, in line with the corresponding half of 2022.
Services during the first half of 2022 accounted for 40% of the segment's turnover; the related activities include the periodic maintenance of the electrodes or replacement with new products and/or latest generation products capable of improving the performance of the process for which they are intended, supply of spare parts, design and re-engineering of the electrodes, technical assistance, lease contracts, performance monitoring, laboratory analysis.
In particular, the electrodes at the end of their useful life must be replaced or suitably treated, in order to restore the catalytic coating through a process called re-coating or reactivation. The re-coating process allows the metal structure of the electrode, whether titanium or nickel, to be preserved and a new coating to be reapplied, thus allowing the initial characteristics of the electrode to be restored.
The continuous improvement of the product portfolio allows the Group to offer customers technologies capable of responding to new process targets and market demands also in terms of sustainability. In particular, in the Electrode Technologies Business, the extension of the customer base is a significant growth factor for Services sales.
| First Half-Year 2023 |
First Half-Year 2022 |
∆ First Half-Year 2023 vs First Half-Year 2022 |
|
|---|---|---|---|
| (in ¤ thousands) | |||
| EBITDA Electrode Technologies | 59,642 | 52,760 | 6,882 |
| Adjusted EBITDA Electrode Technologies | 60,444 | 65,367 | (4,923) |
EBITDA related to the Electrode Technologies Business increased by Euro 6,882 thousand (+13%), from Euro 52,760 thousand in the six months ended June 30, 2022 to Euro 59,642 thousand in the six months ended June 30, 2023 with a percentage on the segment revenues increasing from 23% in the six months ended June 30, 2022 to 26% in the six months ended June 30, 2023. The EBITDA percentage of the Electrode Technologies business segment on the Group revenues shows an increase from 12.9% in the six months ended June 30, 2022 to 14.2% in the six months ended June 30, 2023.
Adjusted EBITDA of the Electrode Technologies Business shows, on the contrary, a decrease of Euro 4,923 thousand (-7.5%), from Euro 65,367 thousand in the six months ended June 30, 2022 to Euro 60,444 thousand in the six months ended June 30, 2023. The decrease is due to the lower gross margin, to the increase of fixed costs for travel, personnel recruitment and administrative consultancies only partially offset by the revenue increase described above.
The main activity of the Water Technologies Business is the manufacture and sale of equipment, systems and technologies used in the water treatment sector. The Group has long experience in the water treatment sector and a broad portfolio of products and solutions that meet a wide range of requirements for the treatment of various types of water.
In particular, the Group develops, manufactures, and sells systems and technologies for swimming pool disinfection, electrochlorination of seawater and brine for on-site production of low concentration sodium hypochlorite, disinfection and filtration of drinking water and wastewater, and water treatment systems in marine applications.
In addition to supplying equipment, products, and systems for new installations or newly constructed plants ("New Installations"), the Group provides after-sales services for maintenance, supply of spare parts, re-engineering of existing systems, on-site or remote monitoring activities, and other services that maintain product performance while ensuring consistency in treated water quality ("Services").
The table below shows the revenues generated by the Water Technologies Business for the six-month periods ended June 30, 2023 and 2022, broken down by business lines.
| Revenue by Business Line Water Technologies |
First Half-Year 2023 |
% of total revenue |
First Half-Year 2023 at constant exchange rates |
First Half-Year 2022 |
∆ First Half-Year 2023 vs 2022 |
∆ First Half-Year 2023 vs 2022 at constant exchange rates |
|
|---|---|---|---|---|---|---|---|
| (in ¤ thousands) | |||||||
| Pools | 48,398 | 34% | 48,031 | 100,842 | (52,444) | (52,811) | |
| Electrochlorination | 42,267 | 30% | 42,728 | 34,975 | 7,292 | 7,753 | |
| Disinfection and Filtration | 45,350 | 32% | 45,763 | 33,119 | 12,231 | 12,644 | |
| Marine technologies | 5,391 | 4% | 5,330 | 6,714 | (1,323) | (1,384) | |
| Total Water Technologies | 141,406 | 100% | 141,852 | 175,650 | (34,244) | (33,798) |
Revenues related to the Water Technologies Business segment decreased by Euro 34,244 thousand equal to 19.5%, from Euro 175,650 thousand in the six months ended June 30, 2022 to Euro 141,406 thousand in the six months ended June 30, 2023. This decrease is mainly attributable to a decrease in revenues of Pools business line and, to a lower extent, of Marine technologies. The Disinfection and Filtration and Electrochlorination business lines, on the other hand, saw an increase compared to 2022 revenue level respectively of 37% and 21%. Overall, revenues are up in EMEIA and down in America, mainly due to the exposure of this geographic area to the pools business, and in Asia.
At constant exchange rates, revenues related to the Water Technologies segment would have decreased by Euro 33,798 thousand (-19.2%), from Euro 175,650 thousand in the six months ended June 30, 2022 to Euro 141,852 thousand in the six months ended June 30, 2023.
The percentage of revenues related to the Water Technologies business on Group revenues decreased, from 43% in the six months ended June 30, 2022 to 34% in the six months ended June 30, 2023.
Revenues related to the Pools business line decreased by Euro 52,443 thousand (-52%), from Euro 100,842 thousand in the six months ended June 30, 2022 to Euro 48,398 thousand in the six months ended June 30, 2023. This decrease can be attributed both to the so called destocking carried out by our main customers and, in turn, by their final customers following the normalization of the demand after the so called Staycation effect due to COVID-19 restrictions has ended, and to a lower selling price indexed to that of ruthenium, the noble metal used in the production process, which is on average lower than in the first half of 2022.
At constant exchange rates, revenues related to the Pools business line would have decreased by Euro 52,811 thousand (-52.4%), from Euro 100,842 thousand in the six months ended June 30, 2022 to Euro 48,031 thousand in the six months ended June 30, 2023. For the six months ended June 30, 2022, the Pools business line accounted for 34% of Water Technologies revenues and 11.5% of the Group's total revenues, respectively.
Revenues related to the Electrochlorination business line increased by Euro 7,291 thousand (+20.9%), from Euro 34,975 thousand in the six months ended June 30, 2022 to Euro 42,266 thousand in the six months ended June 30, 2023. This increase is mainly attributable to:
(i) the increase of Euro 4,437 thousand related to revenues from the seawater electrochlorination (SWEC) product line, mainly due to the execution of an important project for the installation of a from the installation of a SEACLOR® system in Vietnam;
(ii) the increase of Euro 2,782 thousand in revenues pertaining to IEM technology (Brine Electrochlorination Plants) realized in Asia, due to the increased level of orders acquired by the Japanese subsidiary;
(iii) the increase of Euro 2,481 thousand in revenues related to hydraulic fracturing systems (so-called Fracking) classified entirely as aftermarket sales;
(iv) increase of Euro 1,971 thousand in revenues from sales of "Omnipure" electrolytic water treatment plants, mainly attributable to the execution of two important projects in Oil & Gas sector in Texas (U.S.A.) both related to the installation of Sewage Treatment Omnipure 64 systems (projects in backlog at the end of 2022);
(v) these effects were partly negatively offset by a decrease of Euro 4,380 thousand in revenues related to installation of electrochlorination OSHG systems (on-site hypochlorite generation) in the United States. To be noted that such decrease is not due to an unexpected slow-down of this market in the current year but is the consequence of a high backlog as of December 2021 that has been converted into revenues in the first half of 2022.
At constant exchange rates, the Electrochlorination business line would have
recorded an increase in revenues of Euro 7,753 thousand (+22.2%), from Euro 34.975 thousand in the six months ended June 30, 2022 to Euro 42,728 thousand in the six months ended June 30, 2023. For the six months ended June 30, 2023, the Electrochlorination business line accounted for 30.0% of the Water Technologies Business revenues and 10% of the Group's total revenues.
Revenues related to the Disinfection and Filtration business line show an increase of Euro 12,231 thousand (36.9%), from Euro 33,119 thousand in the six months ended June 30, 2022 to Euro 45,350 thousand in the six months ended June 30, 2023. This change is attributable to an increase in all product lines, in particular to:
(i) the increase of Euro 4,690 thousand in revenues relating to ozone technology mainly thanks to the execution of an important project related to the installation of ozone generators in Bahrein (phase four of the expansion of the Tubli wastewater treatment plant). Such contract had been awarded in the second half of 2022 and the related revenues, for a total value of 10 million Euro are accounted in De Nora Water Italy S.r.l., that is executing the project since the end of last year;
(ii) the increase of approximately Euro 3,095 thousand in revenues related to Gas Feed technology related to the installation of new plants in the United States;
(iii) the increase of Euro 2,338 thousand in revenues related to the ultraviolet ray disinfection for which the backlog at the end of 2022 amounted to around 7 million Euro compared to a backlog at the end of 2021 of about 2 million Euro. The abovementioned technology is managed by the US subsidiary, in particular by the Pittsburgh plant in Pennsylvania. The increase in sales is mainly attributable to Santa Rosa project, in California, which contract amount is above 5 million USD;
(iv) the increase of Euro 1,895 thousand in revenues relating to the "bed filtration systems" (so-called Deep Bed Filtration) accounted for in the EMEIA region, mainly linked to the "Al Jubail" project in Saudi Arabia, contract signed in the last quarter of 2022. The plant will become one of the world's biggest reverse osmosis seawater desalination plant (SWRO), producing daily up to 1 million cubic meter of seawater;
(v) the increase of Euro 483 thousand in revenues related to Media technology, in the United States and UK. This technology allows removal of arsenic and other contaminants in ground water of some particular areas.
At constant exchange rates, revenues related to the Disinfection and Filtration business line would have increased by Euro 12,643 thousand (38.2%), from Euro 33,119 thousand in the six months ended June 30, 2022 to Euro 45,763 thousand in the six months ended June 30, 2023. For the six months ended June 30, 2023, the Disinfection and Filtration business line accounted for 32% of Water Technologies Business revenues and 11% of the Group's total revenues.
Revenues related to the Marine technology line decreased by Euro 1,323 thousand (-19.7%), from Euro 6,714 thousand in the six months ended June 30, 2022 to Euro 5,391 thousand in the six months ended June 30, 2023. This decrease is mainly attributable to the reduction of the market demand for new installations.
Such decrease is partially offset by the volume increase from aftermarket sales.
At constant exchange rates, revenues related to the Marine technology business line would have decreased by Euro 1,384 thousand (-20.6%), from Euro 6,714 thousand in the six months ended June 30, 2022 to Euro 5,330 thousand in the six months ended June 30, 2023. For the six-month period ended June 30, 2023, the marine technologies business line accounted for 4% of Water Technologies Business revenues and 1.3% of the Group's total revenues.
The following table shows the revenues generated by the Water Technologies Business for the six months ended June 30, 2023 and 2022, broken down by new installations or newly constructed plants ("New Installations") and periodic maintenance or modernization services for existing plants ("Services").
| First Half-Year 2023 |
% of total revenue |
First Half-Year 2022 |
% of total revenue |
|||
|---|---|---|---|---|---|---|
| (in ¤ thousands) | ||||||
| New Installations | 105,719 | 75% | 145,338 | 83% | ||
| Services | 35,687 | 25% | 30,312 | 17% | ||
| Total Revenue | 141,406 | 100% | 175,650 | 100% |
New Installations accounted for 75% of the Water Technologies segment revenue for the first half of 2023, down from the previous period. Within this classification, revenues from the swimming pool business line are entirely included.
Services cover the entire product portfolio and during the first half of 2022 accounted for 25% of the segment revenues. Such activities include the replacement of electrodes or their reactivation, maintenance of installed
equipment and systems, supply of spare parts, and technological improvements (including automation) aimed at maximizing performance and ensuring optimal operation of the products during the entire life cycle. In addition to these activities, the Group offers technical assistance services in the field and remotely, training programs, test agreements and contracts for the use of the systems against a fee linked to the quantity of water treated.
| First Half-Year 2023 |
First Half-Year 2022 |
∆ First Half-Year 2023 vs First Half-Year 2022 |
|
|---|---|---|---|
| (in ¤ thousands) | |||
| EBITDA Water Technologies | 19,225 | 30,595 | (11,370) |
| Adjusted EBITDA Water Technologies | 19,646 | 40,345 | (20,699) |
EBITDA related to the Water Technologies business segment decreased by Euro 11,370 thousand (-37.2%), from Euro 30,595 thousand in the six months ended June 30, 2022 to Euro 19,225 thousand in the six months ended June 30, 2023.
The percentage of the EBITDA of the Water Technologies business segment on the revenues of the segment deceased from 17.4% in the six months ended June 30, 2022 to 13.6% in the six months ended June 30, 2023. The percentage of the EBITDA of the Water Technologies business segment on the total revenues of the Group decreased from 7.4% in the six months ended June 30, 2022 to 4.6% in the six months ended June 30, 2023.
Adjusted EBITDA decreased by Euro 20,699 thousand (-51.3%) from Euro 40,345 thousand in the six months ended June 30, 2022 to Euro 19,646 thousand in the six months ended June 30, 2023. Such decrease is mainly attributable to the following factors:
(i) reduction in revenues amounting to Euro 34,244 thousand (-19.5%), from Euro 175,650 thousand to Euro 141,406, as described above;
(ii) margin decrease in the Pools business line negatively impacted by sales price reduction linked to the fluctuation of ruthenium, only partially offset by a profitability improvement mainly due to the reduction of indirect costs in the other business lines of the Water Technologies segment;
(iii) operating cost saving of over 2 million Euro. Such variation is mainly attributable to the decrease of personnel cost and general and administrative expenses supporting the business (mainly ICT cost and legal consultancies) partially offset by the increase in cost for travels of the sales personnel.
The Energy Transition Business includes the offering of electrodes (anodes and cathodes), electrolyzer components, and systems (i) for the generation of hydrogen and oxygen through water electrolysis processes, (ii) for use in fuel cells for electricity generation from
hydrogen or another energy carrier (e.g., methanol, ammonia) without CO2 emissions, and (iii) for use in redox flow batteries.
The following table shows the revenues generated by the Energy Transition Business for the six-month periods ended June 30, 2023 and 2022.
| Revenue Business Energy Transition |
1° Half-year 2023 |
First Half Year 2023 at constant exchange rates |
1° Half-year 2022 |
∆ First Half-Year 2023 vs 2022 |
∆ First Half Year 2023 vs 2022 at constant exchange rates |
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Energy Transition | 47,278 | 47,379 | 6,865 | 40,413 | 40,514 |
Revenues of the Energy Transition Business increased by Euro 40,413 thousand (+589%), from Euro 6,865 thousand in the six months ended June 30, 2022 to Euro 47,278 thousand in the six months ended June 30, 2023. This increase is related to the execution of important projects acquired mainly through the associated tk nucera. At constant exchange rates, revenues related to the Energy Transition business would have increased by Euro 40,514 thousand (+590%), from Euro 6,865 thousand in
the six months ended June 30, 2022 to Euro 47,379 thousand in the six months ended June 30, 2023.
The following table shows the revenues generated by the Energy Transition Business for the six-month periods ended June 30, 2023 and 2022, broken down by new installations or newly constructed plants ("New Installations") and periodic maintenance or modernization services for existing plants ("Services").
| First Half-Year 2023 |
% of total revenue |
First Half-Year 2022 |
% of total revenue |
||||
|---|---|---|---|---|---|---|---|
| (in ¤ thousands) | |||||||
| New Installations | 47,122 | 100% | 6,683 | 97% | |||
| Services | 156 | 0% | 182 | 3% | |||
| Total Revenue | 47,278 | 100% | 6,865 | 100% |
| First Half-Year 2023 |
First Half-Year 2022 |
∆ First Half-Year 2023 vs First Half-Year 2022 |
|
|---|---|---|---|
| (in ¤ thousands) | |||
| EBITDA Energy Transition | 5,933 | (3,756) | 9,689 |
| Adjusted EBITDA Energy Transition | 6,033 | (3,389) | 9,423 |
EBITDA and Adjusted EBITDA related to the Energy Transition business segment for the six months ended June 30, 2023 and 2022 amount respectively to Euro 5,933 thousand and Euro 6,033 thousand mainly thanks to the above mentioned projects executed in Germany, showing a significant increase compared to the negative values of the
previous period (Euro – 3,756 and Euro – 3,389 respectively). Volumes reached and good gross margin allow, from the current year, a better absorption of fixed costs, in particular of the research and development projects on which the Group is putting most of the effort of research activities.
Relating to strategic risks, legal and non-compliance risks, operational risks and environmental risks, please refer to 2022 Annual Financial report whose considerations are still valid. For financial risks, please refer to the Notes to the condensed consolidated half-yearly financial statements as of June 30, 2023.
With regard to transactions carried out with related parties, it should be noted that they cannot be classified as atypical or unusual, as they fall within the normal course of business of the Group companies. These transactions are settled at market conditions, taking into account the characteristics of the goods and services provided.
Information on transactions with related parties, including that required by Consob Communication of July 28, 2006, is included in the Notes to the condensed consolidated half-yearly financial statements as of June 30, 2023.
It should be noted that in the reference period:
The Board of Directors of Industrie De Nora S.p.A., on July 5, 2022, has approved a procedure for transactions with related parties ("RPT Procedure"), subject to the favorable opinion of the Committee for Transactions with Related Parties, adjusted to provisions on related party transactions adopted by Consob. Afterwards the rocedure has been amended by the Board of Directors of Industrie De Nora S.p.A., on May 10, 2023 following the favorable opinion of the Committee for Transactions with Related Parties.
The RPT Procedure can be consulted, together with the other documents on corporate governance, on the website www.denora.com.
Pursuant to Consob Communication No. DEM/6064293 of July 28, 2006, it should be noted that there were no atypical and/or unusual transactions, as defined in the Communication.
As regards the main corporate information of the legal entities that make up the Group, please refer to the Consolidation area section included in the Explanatory Notes to the condensed consolidated half-yearly financial statements as of June 30, 2023.
As at June 30, 2023, the Parent Company does not hold directly or through trustees or nominees, any treasury shares or shares of other parent companies, nor has it acquired or sold such shares or quotas during the first half of 2023.
The employees of the De Nora Group companies are bound by the Code of Ethics, which establishes the ethical and behavioral standards to be followed in the conduct of day-to-day activities. The Group is committed to maintaining a consistent standard of ethical conduct at a global level, with respect for the cultures and the commercial practices of the countries and communities in which it operates.
Compliance with the Code by directors, managers and employees, as well as by all those who work to achieve the Group's objectives, each within their own area of responsibility, is fundamentally important to De Nora's efficiency, reliability and reputation, factors that play a crucial role in the Group's success.
The principles and guidelines set out in the Code are addressed and analysed in further detail in other policies and business procedures.
The corporate governance system adopted by Industrie De Nora S.p.A. complies with the indications contained in the Corporate Governance Code published by Borsa Italiana S.p.A. In compliance with regulatory obligations, the Report on corporate governance and ownership structures (the "CG Report") is drafted on a yearly basis and contains a general description of the corporate governance system adopted by the Group and contains information on the ownership structure and compliance with the Corporate Governance Code, including the main governance practices applied and the characteristics of the internal control and risk management system also in relation to the financial reporting process.
The aforementioned CG Report is available on the website www.denora.com in the "Governance - Shareholders' Meetings" section.
The Corporate Governance Code is available on the Borsa Italiana S.p.A. website www.borsaitaliana.it.
The reduction in the percentage of Industrie De Nora S.p.A. investment in tk nucera (dilutive effect) and the capital gain resulting from the exercise of the greenshoe option will determine the recognition in the consolidated financial statements of a total income of about Euro 130 million.
— The Italian Ministero delle Imprese e del Made in Italy and De Nora Italy Hydrogen Technologies S.r.l. ("DNIHT") have signed the decree granting DNHIT an amount of Euro 32,250,000.00 in the form of reimbursement of expenses incurred within the fund established by the Ministry for the financial support of the enterprises participating in the implementation of Important Projects of Common European Interest (IPCEI Fund). The funding granted by the Ministry is aimed at the execution of the Italian Gigafactory project by DNHIT in joint venture with Snam S.p.A. The amount granted by the Ministry is financed through PNRR resources – the National Recovery and Resilience Plan (PNRR M2C2- I5.2) - Mission 2 'Green Revolution and Ecological Transition', Component 2 'Renewable Energy, Hydrogen, Grid and Sustainable Mobility', Investment 5.2 'Hydrogen' under the ownership of the Ministry of Ecological Transition. DNHIT is eligible to receive up to EUR 63,206,000 of public funding, following the additional resources which might become available in the framework of the support to the IPCEI Hydrogen 1.
The Group confirms its commitment to pursue the sustainable growth opportunities included in the Business Plan. In particular, in the Electrode Technologies and Water Technologies segments the Group foresees to maintain and consolidate its leadership position in the related markets.
In the Energy Transition segment the hydrogen production market still plays a fundamental role for the growth of the Group in the medium term.
Milan, July 31st, 2023
To address such growth the Group is actively working to the expansion of the production capacity, both in Italy and globally taking advantage, where possible, of funding identified at local level.
Outlook for 2023 confirms the profitability and financial structure targets notwithstanding a slow-down of the expected growth that however remains in the low end of the range considered for 2023.
On behalf of the Board of Directors The Managing Director Paolo Enrico Dellachà
| Notes | As of June 30, |
of which with related |
As of December |
of which with related |
|
|---|---|---|---|---|---|
| 2023 | parties | 31, 2022 | parties | ||
| (in ¤ thousands) | |||||
| Assets | |||||
| Goodwill and other intangible assets | 16 | 126,427 | 131,552 | ||
| Property, plant and equipment | 17 | 205,135 | 184,177 | ||
| Equity-accounted investees | 18 | 123,482 | 122,664 | ||
| Financial assets, including derivatives | 19 | 4,444 | 4,610 | ||
| Deferred tax assets | 12,894 | 13,096 | |||
| Other receivables | 20 | 11,463 | 52 | 9,030 | 52 |
| Employee benefits | 27 | 3,429 | 3,331 | ||
| Total non current assets | 487,274 | 468,460 | |||
| Inventory | 21 | 298,424 | 295,476 | ||
| Financial assets, including derivatives | 19 | 11,962 | 159,036 | ||
| Current tax assets | 22 | 6,380 | 376 | 4,893 | 376 |
| Construction contracts | 23 | 32,115 | 29,135 | ||
| Trade receivables | 24 | 135,466 | 21,587 | 123,421 | 7,267 |
| Other receivables | 20 | 31,086 | 52 | 33,074 | - |
| Cash and cash equivalents | 25 | 132,507 | 174,129 | ||
| Total current assets | 647,940 | 819,164 | |||
| Total assets | 1,135,214 | 1,287,624 | |||
| Equity and liabilities | |||||
| Equity attributable to Owners of the Parent | 743,452 | 741,218 | |||
| Equity attributable to non-controlling interest | 5,034 | 3,586 | |||
| Total equity | 26 | 748,486 | 744,804 | ||
| Employee benefits | 27 | 24,122 | 23,959 | ||
| Provisions for risks and charges | 28 | 2,244 | 2,142 | ||
| Deferred tax liabilities | 6,503 | 8,664 | |||
| Financial liabilities, net of current portion | 29 | 121,929 | 267,544 | ||
| Trade payables | 30 | 78 | 83 | ||
| Income tax payable | 31 | - | - | ||
| Other payables | 32 | 2,278 | 398 | 2,384 | 444 |
| Total non current liabilities | 157,154 | 304,776 | |||
| Provisions for risks and charges | 28 | 20,023 | 18,546 | ||
| Financial liabilities | 29 | 13,464 | 13,655 | ||
| Construction contracts | 23 | 8,852 | 12,702 | ||
| Trade payables | 30 | 86,805 | 1,003 | 80,554 | 889 |
| Income tax payable | 31 | 16,439 | 10,970 | ||
| Other payables | 32 | 83,991 | 21,564 | 101,617 | 34,869 |
| Total current liabilities | 229,574 | 238,044 | |||
| Total equity and liabilities | 1,135,214 | 1,287,624 | |||
| For the First Half-Year ended June 30, | ||||||
|---|---|---|---|---|---|---|
| Notes | 2023 | of which with related parties |
2022 | of which with related parties |
||
| (in ¤ thousands) | ||||||
| Revenues | 4 | 420,384 | 108,661 | 410,467 | 64,668 | |
| Change in inventory of finished goods and work in progress |
5 | 25,308 | 14,485 | |||
| Other income | 6 | 3,372 | 342 | 2,540 | 389 | |
| Costs for raw materials, consumables, supplies and goods |
7 | (198,029) | (191) | (189,659) | (488) | |
| Personnel expenses | 8 | (72,450) | (2,636) | (83,109) | (20,204) | |
| (of which Management Incentive Plan) | - | (19,360) | (17,679) | |||
| Costs for services | 9 | (86,586) | (1,006) | (69,839) | (482) | |
| Other operating costs and expenses | 10 | (5,723) | (4,430) | |||
| Amortization and depreciation | 16/17 | (14,444) | (13,560) | |||
| (Impairment losses)/write backs and accruals for provisions |
11 | (4,446) | (4,046) | |||
| Operating profit | 67,386 | 62,849 | ||||
| Share of profit of equity-accounted investees | 18 | 1,527 | (5,551) | |||
| Finance income | 12 | 5,925 | 21,483 | |||
| Finance expenses | 13 | (10,429) | (17,799) | |||
| Profit before tax | 64,409 | 60,982 | ||||
| Income tax expense | 14 | (17,683) | (21,249) | |||
| Profit for the period | 46,726 | 39,733 | ||||
| Attributable to: | ||||||
| Parent Company shareholders | 46,233 | 39,918 | ||||
| Non-controlling interests | 493 | (185) | ||||
| Basic and diluted earnings per share ordinary (in Euro) |
15 | 0.23 | 0.22 |
| For the First Half-Year ended June 30, | |||
|---|---|---|---|
| 2023 | 2022 | ||
| (in ¤ thousands) | |||
| Profit for the period | 46,726 | 39,733 | |
| Items that will not be reclassified to profit or loss: | |||
| Actuarial reserve | (42) | 6,384 | |
| Tax effect | 0 | (1,852) | |
| Total items that will not be reclassified to profit or loss, net of the tax effect (A) |
(42) | 4,532 | |
| Items that may be reclassified subsequently to profit or loss: | |||
| Effective portion of the change in fair value of financial instruments hedging cash flows |
(40) | (80) | |
| Change in fair value of financial assets | 248 | 42 | |
| Translation reserve | (20,145) | 10,192 | |
| Tax effect | (53) | (3) | |
| Total items that may be reclassified subsequently to profit or loss, net of the tax effect (B) |
(19,990) | 10,151 | |
| Total other comprehensive income net of the tax effects (A + B) | (20,032) | 14,683 | |
| Total comprehensive income | 26,694 | 54,416 | |
| Attributable to: | |||
| Parent Company shareholders | 26,146 | 54,549 | |
| Non-controlling interests | 548 | (133) |
| For the First Half-Year ended June 30, | |||||
|---|---|---|---|---|---|
| Notes | 2023 | of which with related parties |
2022 | of which with related parties |
|
| (in ¤ thousands) | |||||
| Cash flows from operating activities | |||||
| Profit for the period | 46,726 | 39,733 | |||
| Adjustments for: | |||||
| Amortization and depreciation | 16/17 | 14,444 | 13,560 | ||
| Impairment losses/(write-back) of property, plant and equipment | - | 3,083 | |||
| Impairment losses/(write-back) of intangible assets | 11/16 | 1,276 | - | ||
| Management Incentive Plan | 26 | - | 19,360 | 17,679 | |
| Share based payments | 26 | 290 | - | ||
| Finance expenses | 13 | 10,429 | 17,799 | ||
| Finance income | 12 | (5,925) | (21,483) | ||
| Share of profit of equity-accounted investees | 18 | (1,527) | (1,527) | 5,551 | 5,551 |
| (Gains) losses on the sale of property, plant and equipment and intangible assets |
16/17 | 202 | 155 | ||
| Income tax expense | 14 | 17,683 | 21,249 | ||
| Change in inventory | 21 | (11,692) | (43,537) | ||
| Change in trade receivables and construction contracts | 23/24 | (23,018) | (14,611) | (20,547) | 2,675 |
| Change in trade payables | 30 | 8,866 | 157 | 1,508 | (287) |
| Change in other receivables/payables | 20/32 | (18,673) | (12,760) | (260) | (3,063) |
| Change in provisions and employee benefits | 27/28 | 1,889 | (1,471) | ||
| Cash flows generated by/(used in) operating activities | 40,969 | 34,700 | |||
| Interest and other finance expenses paid | 13 | (9,158) | (11,953) | ||
| Interest and other finance income collected | 12 | 4,597 | 9,460 | ||
| Income tax paid | 14 | (12,869) | (20,400) | ||
| Net cash flows generated by/(used in) operating activities | 23,539 | 11,807 | |||
| Cash flows from investing activities | |||||
| Sales of property, plant and equipment and intangible assets | 16/17 | 399 | 132 | ||
| Investments in property, plant and equipment | 16/17 | (33,453) | (11,729) | ||
| Investments in intangible assets | 16/17 | (3,955) | (3,477) | ||
| Investments in associated companies | 18 | - | (17) | (17) | |
| Acquisitions, net of cash acquired | (2,046) | - | |||
| Investments (disposals) of financial assets | 19 | 147,971 | (3,683) | ||
| Net cash flows generated by/(used in) investing activities | 108,917 | (18,774) | |||
| Cash flows from financing activities | |||||
| Share capital increase (reimbursement) | 26 | 900 | 196,581 | ||
| New loans | 29 | 482 | 292,506 | ||
| Repayments of loans | 29 | (147,196) | (256,298) | ||
| Increase (decrease) in other financial liabilities | 29 | (1,041) | (1,269) | ||
| (Increase) decrease in financial assets | 19 | (4) | 141 | ||
| Dividends paid | 26 | (24,202) | (20,000) | ||
| Net cash flows generated by/(used in) financing activities | (171,061) | 211,661 | |||
| Net increase (decrease) in cash and cash equivalents | (38,606) | 204,695 | |||
| Opening cash and cash equivalents | 174,129 | 73,843 | |||
| Exchange rate gains/(losses) | (3,016) | 802 | |||
| Closing cash and cash equivalents | 25 | 132,507 | 279,340 |
| (in ¤ thousands) | Share capital |
Legal reser ve |
Share premium |
Retained earnings |
Tran slation reserve |
Share capital |
Profit for the period |
Equity attribu table to the Parent Company sharehol ders |
Equity attribu table to non con trolling intere sts |
Total Equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as of December 31, 2021 |
16,786 | 3,357 | 24,915 | 340,546 | 5,563 | (7,404) | 66,696 | 450,459 | 3,503 | 453,962 |
| Transactions with shareholders: | ||||||||||
| Share capital increase | 1,482 | - | 198,518 | - | - | (3,419) | - | 196,581 | - | 196,581 |
| Allocation of profit for 2021 |
- | - | - | 66,696 | - | - | (66,696) | - | - | - |
| Dividends distribution | - | - | - | (20,000) | - | - | - | (20,000) | - | (20,000) |
| Other movements | - | - | - | - | - | 19,360 | - | 19,360 | - | 19,360 |
| Comprehensive income statement: | ||||||||||
| Profit for the period | - | - | - | - | - | - | 39,918 | 39,918 | (185) | 39,733 |
| Actuarial reserve | - | - | - | - | - | 4,532 | - | 4,532 | - | 4,532 |
| Effective portion of the change in fair value of financial instruments hedging cash flows |
- | - | - | - | - | (74) | - | (74) | - | (74) |
| Change in fair value of financial assets |
- | - | - | - | - | 14 | - | 14 | 19 | 33 |
| Translation reserve | - | - | - | - | 10,159 | - | - | 10,159 | 33 | 10,192 |
| Balance as of June 30, 2022 |
18,268 | 3,357 | 223,433 | 387,242 | 15,722 | 13,009 | 39,918 | 700,949 | 3,370 | 704,319 |
| Balance as of December 31, 2022 |
18,268 | 3,357 | 223,433 | 387,242 | 5,059 | 14,295 | 89,564 | 741,218 | 3,586 | 744,804 |
| Transactions with shareholders: | ||||||||||
| Share capital increase | - | - | - | - | - | - | - | - | 900 | 900 |
| Allocation of profit for 2022 |
- | - | - | 89,564 | - | - | (89,564) | - | - | - |
| Dividends distribution | - | - | - | (24,202) | - | - | - | (24,202) | - | (24,202) |
| Other movements | - | - | - | - | - | 290 | - | 290 | - | 290 |
| Comprehensive income statement: | ||||||||||
| Profit for the period | - | - | - | - | - | - | 46,233 | 46,233 | 493 | 46,726 |
| Actuarial reserve | - | - | - | - | - | (45) | - | (45) | 3 | (42) |
| Effective portion of the change in fair value of financial instruments hedging cash flows |
- | - | - | - | - | (30) | - | (30) | - | (30) |
| Change in fair value of financial assets |
- | - | - | - | - | 99 | - | 99 | 86 | 185 |
| Translation reserve | - | - | - | - | (20,111) | - | - | (20,111) | (34) | (20,145) |
| Balance as of June 30, 2023 |
18,268 | 3,357 | 223,433 | 452,604 | (15,052) | 14,609 | 46,233 | 743,452 | 5,034 | 748,486 |
| 46 | A. General information |
|---|---|
| 56 | B. Notes to the main financial statements items - |
| Condensed consolidated half-year income | |
| statement | |
| 63 | C. Notes to the main financial statements items - |
| Statement of financial position - Assets | |
| 73 | D. Notes to the main financial statements items - |
| Statement of financial position - Equity and liabilities | |
| 81 | E. Risk |
| 84 | F. Segment reporting |
| 88 | G. Related party transactions |
| 91 | H. Non-recurring events |
| 92 | I. Commitments, guarantees and contingent liabilities |
| 93 | J. Events after the reporting date |
Industrie De Nora S.p.A. (hereinafter the "Company" or "IDN" and together with its subsidiaries the "Group" or the "De Nora Group") is a joint-stock company incorporated and registered in Italy at the Companies Register Office of Milan. The Company, with registered office at Via Bistolfi 35 - Milan, Italy, has been listed on Euronext Milan since June 30, 2022.
Please note that these Condensed Consolidated Half-Year Financial Statements for the six months ended June 30, 2023 (hereinafter the "Condensed Consolidated Half-Year Financial Statements") were approved by the Company's Board of Directors on July 31, 2023, and have been subjected to a limited audit by PricewaterhouseCoopers S.p.A..
The De Nora Group has prepared these Condensed Consolidated Half-Year Financial Statements in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and endorsed by the European Union and in accordance with IAS 34 - Interim Financial Reporting by applying the same accounting standards adopted in the preparation of the Consolidated Financial Statements as of December 31, 2022 and in effect as of June 30, 2023, hereinafter the "IFRS". The IFRS have been applied consistently in all the periods presented. These Condensed Consolidated Half-Year Financial Statements have been prepared in "condensed" form, i.e., with a significantly lower level of disclosure than required by IFRS, as permitted by IAS 34, and should therefore be read in conjunction with the Group's consolidated financial statements for the year ending December 31, 2022, prepared in accordance with IFRS and approved by the Board of Directors on March 22, 2023.
The Condensed Consolidated Half-Year Financial Statements consist of the interim consolidated statement of financial position, the interim consolidated income statement, the interim consolidated statement of comprehensive income, the interim statement of changes in the net consolidated equity, and the interim consolidated statement of cash flows, as well as the explanatory notes.
Assets and liabilities as of June 30, 2023 are compared with the consolidated statement of financial position as of December 31, 2022. The amounts in the consolidated income statement, consolidated statement of comprehensive income, statement of changes in the net consolidated equity, and consolidated statement of cash flows for the six months ended June 30, 2023, are compared with the respective amounts for the six months ended June 30, 2022.
The Group has chosen to present the consolidated income statement by the nature of the expenses, highlighting the interim results relating to the operating result and the result before tax.
The statement of financial position is prepared using the format whereby assets and liabilities are presented on a "current/non-current" basis. An asset is classified as current when:
All other assets are classified as non-current. In particular, IAS 1 includes property, plant and equipment, intangible assets and long-term financial assets among non-current assets.
A liability is classified as current when:
All other liabilities are classified by the company as non-current.
The operating cycle is the time that elapses between the acquisition of assets for the production process and their realisation in cash or cash equivalents. When the normal operating cycle is not clearly identifiable, its duration is assumed to be twelve months.
The consolidated statement of cash flows is prepared using the indirect method.
The statement of changes in the consolidated equity shows the changes in shareholders' equity items related to:
The consolidated statement of comprehensive income presents, on a separate basis, the profit/(loss) for the period and any income and expense not recognized in the income statement, but is instead recognized directly in equity, in accordance with specific IFRS principles.
The Condensed Consolidated Half-Year Financial Statements have been drawn up in Euro, the Company's functional currency. The financial position and income statements, the explanatory notes and the tables are expressed in thousands of Euro, unless otherwise indicated.
The Condensed Consolidated Half-Year Financial Statements were prepared:
— on a going concern basis, as the Directors verified the absence of financial, management or other indicators that could indicate significant uncertainties about the Group's ability to meet its obligations in the foreseeable future and, in particular, in the 12 months following the closing date,
as compared to the date of these interim financial statements. The assessments made confirm that the Group is able to operate in compliance with the going concern assumption and in compliance with financial covenants;
The following new amendments were issued by the International Accounting Standards Board ("IASB") and adopted by the European Union, and are effective as of January 1, 2023:
| Accounting principle/amendment | Approved by the EU |
Effective date |
|---|---|---|
| Amendments to IFRS 17 (Insurance contracts): First application of IFRS 17 and IFRS 9 - Comparative information |
YES | January 1, 2023 |
| Amendments to IAS 1 Presentation of the Financial Statements and to IFRS Practice Statement 2: information on accounting policies |
YES | January 1, 2023 |
| Amendments to IAS 8 Accounting policies, changes in accounting estimates and errors: definition of accounting estimates |
YES | January 1, 2023 |
| Amendments to IAS 12 Income taxes: deferred taxes relating to assets and liabilities deriving from a "Single Transaction" |
YES | January 1, 2023 |
These amendments did not result in any noteworthy impacts on the Condensed Consolidated Interim Financial Statements.
At the date of approval of these Condensed Consolidated Interim Financial Statements, the competent bodies of the European Union have not yet completed the approval process necessary for the adoption of the following accounting standards and amendments:
| Accounting principle/amendment | Approved by the EU |
Effective date |
|---|---|---|
| Amendments to IAS 12 Income Taxes: International Tax Reform – Pillar Two Model Rules |
NO | January 1, 2023 |
| Amendments to IAS7 and IFRS7: Supplier Finance Arrangements | NO | January 1, 2024 |
| Amendments to IAS 1 Presentation of the Financial Statements: classification of liabilities as current or non-current |
NO | January 1, 2024 |
| Accounting principle/amendment | Approved by the EU |
Effective date |
|---|---|---|
| Amendments to IAS 1 Presentation of the Financial Statements: classification of liabilities as current or non-current – deferral of effective date |
NO | January 1, 2024 |
| Amendments to IAS 1 Presentation of the Financial Statements: non-current liabilities with covenants |
NO | January 1, 2024 |
| Amendments to IFRS 16 Leases: lease liability in a sale and leaseback |
NO | January 1, 2024 |
The analysis of the impacts of the changes introduced by the Pillar Two Model Rules is ongoing.
The Condensed Consolidated Half-Year Financial Statements include the economic and financial position of the Company and its subsidiaries, prepared on the basis of the related accounting situations and, where applicable, appropriately adjusted to make them compliant with IFRS.
As of June 30, 2023, the financial statements of the companies in which the Company directly or indirectly has control have been consolidated using the "full consolidation method", through the full assumption of the assets and liabilities and the costs and revenues of the subsidiaries. Companies that are jointly controlled by the Group, in accordance with IFRS 11, and those in which the Group exercises significant influence are measured using the "equity method", which foresees the initial recognition of the equity investment at cost and the subsequent adjustment of its carrying amount to reflect the investor's share of the related company's profits or losses after the acquisition date.
The companies included in the consolidation scope at June 30, 2022 are as follows:
| Company | Registered office | Cur rency |
Share capital as of 30.06.2023 | interest % De Nora Group |
Conso lidation criterion |
||
|---|---|---|---|---|---|---|---|
| in local currency | in Euro | as of 30.06.2023 |
as of 31.12.2022 |
||||
| Oronzio De Nora International BV - NETHERLANDS |
Basisweg 10 - 1043 AP Amsterdam - NETHERLANDS |
Euro | 4,500,000.00 | 4,500,000.00 | 100% | 100% | line by-line |
| De Nora Deut schland GmbH - GERMANY |
Industriestrasse 17 63517 Rodenbach - GERMANY |
Euro | 100,000.00 | 100,000.00 | 100% | 100% | line by-line |
| Shotec GmbH - GERMANY |
An der Bruchengrube 5, 63452 Hanau - GERMANY |
Euro | 40,000.00 | 40,000.00 | 100% | - | line by-line |
| De Nora India Ltd - INDIA |
Plot Nos. 184, 185 & 189 Kundaim Indu strial Estate Kundaim 403 115, Goa, INDIA |
INR | 53,086,340.00 | 595,094.98 | 53.67% | 53.67% | line by-line |
| De Nora Permelec Ltd - JAPAN |
2023-15 Endo, Fuji sawa City - Kanagawa Pref. 252 - JAPAN |
JPY | 90,000,000.00 | 572,664.80 | 100% | 100% | line by-line |
| De Nora Hong Kong Limited - HONG KONG |
Unit D-F 25/F YHC Tower 1 Sheung YUET Road Kowllon Bay KL - HONG KONG |
HKD | 100,000.00 | 11,743.02 | 100% | 100% | line by-line |
| Company | Registered office | Cur rency |
Share capital as of 30.06.2023 | De Nora Group | interest % | Conso lidation criterion |
|
|---|---|---|---|---|---|---|---|
| in local currency | in Euro | as of 30.06.2023 |
as of 31.12.2022 |
||||
| De Nora do Brasil Ltda - BRAZIL |
Avenida Jerome Case No. 1959 Eden - CEP 18087-220 - Soroco ba/SP - BRAZIL |
BRL | 9,662,257.00 | 1,830,388.91 | 100% | 100% | line by-line |
| De Nora Elettrodi (Suzhou) Ltd - CHINA |
No. 113 Longtan Road, Suzhou Industrial Park 215126 - CHINA |
USD | 25,259,666.00 | 23,246,517.58 | 100% | 100% | line by-line |
| De Nora China - Jinan Co Ltd - CHINA |
Building 3, No.5436, Wenquan Rd.,Lingang Development Zone, Licheng District, Jinan City.Shandong Province PR - CHINA |
CNY | 15,000,000.00 | 1,899,142.85 | 100% | 100% | line by-line |
| De Nora Glory (Shanghai) Co Ltd - CHINA |
No.2277 Longyang Rd. Unit 1605 Yongda Int'l Plaza - Shanghai - CHINA |
CNY | 1,000,000.00 | 126,609.52 | 80% | 80% | line by-line |
| De Nora Italy S.r.l. - ITALY |
Via L. Bistolfi, 35 - 20134 Milan - ITALY |
Euro | 5,000,000.00 | 5,000,000.00 | 100% | 100% | line by-line |
| De Nora Water Technologies Italy S.r.l. - ITALIA |
Via L. Bistolfi, 35 - 20134 Milan - ITALY |
Euro | 78,000.00 | 78,000.00 | 100% | 100% | line by-line |
| De Nora Water Technologies FZE – DUBAI |
Office No: 614, Le Solarium Tower, Dubai Silicon Oasis - DUBAI |
AED | 250,000.00 | 62,648.79 | 100% | 100% | line by-line |
| De Nora Italy Hydrogen Technologies S.r.l. - ITALY |
Via L. Bistolfi, 35 - 20134 Milan - ITALY |
Euro | 110,000.00 | 110,000.00 | 90% | 90% | line by-line |
| De Nora Holding UK Ltd – ENGLAND |
c/o Pirola Pennuto Zei & Associati Limited, 5th Floor, Aldermary House, 10-15 Queen Street, London, EC4N 1TX ENGLAND |
Euro | 19.00 | 19.00 | 100% | 100% | line by-line |
| De Nora Water Technologies UK Services Ltd – ENGLAND |
Daytona House Am ber Close, Amington, Tamworth, INGHIL TERRA B77 4RP ENGLAND |
GBP | 7,597,918.00 | 8,852,493.36 | 100% | 100% | line by-line |
| De Nora Holding US Inc. – USA |
7590 Discovery Lane, Concord, OH 4407 - USA |
USD | 10.00 | 9.20 | 100% | 100% | line by-line |
| De Nora Tech LLC – USA |
7590 Discovery Lane, Concord, OH 4407 - USA |
USD | no share capital |
- | 100% | 100% | line by-line |
| De Nora Water Technologies LLC - USA |
3000 Advance Lane 18915 - Colmar - PA - USA |
USD | 968,500.19 | 891,312.53 | 100% | 100% | line by-line |
| De Nora Water Technologies (Shanghai) Co. Ltd - CHINA |
2277 Longyang Road, Unit 305 Yongda International Plaza 201204 - Pudong Shanghai - CHINA |
CNY | 16,780,955.00 | 2,124,628.72 | 100% | 100% | line by-line |
| De Nora Water Technologies Ltd - ENGLAND |
c/o Pirola Pennuto Zei & Associati Limited, 5th Floor, Aldermary House, 10-15 Queen Street, London, EC4N 1TX - ENGLAND |
GBP | 1.00 | 1.17 | 100% | 100% | line by-line |
| Company | Registered office | Cur rency |
Share capital as of 30.06.2023 | De Nora Group | interest % | Conso lidation criterion |
|
|---|---|---|---|---|---|---|---|
| in local currency | in Euro | as of 30.06.2023 |
as of 31.12.2022 |
||||
| De Nora Water Technologies (Shanghai) Ltd - CHINA |
No 96 Street A0201 Lingang Marine Science Park, Pu dong New District, Shanghai - CHINA |
CNY | 7,757,786.80 | 982,209.69 | 100% | 100% | line by-line |
| De Nora Marine Technologies LLC – USA |
1110 Industrial Blvd., Sugar Land, TX 77478 - USA |
USD | no share capital |
- | 100% | 100% | line by-line |
| De Nora Neptune LLC – USA |
305 South Main Street, Fort Stockton, Texas 76735 - USA |
USD | no share capital |
- | 80% | 80% | line by-line |
| Capannoni S.r.l. - ITALY |
Via L. Bistolfi, 35 - 20134 Milan - ITALY |
Euro | 8,500,000.00 | 8,500,000.00 | 100% | 100% | line by-line |
| Capannoni LLC - USA |
7590 Discovery Lane, Concord, OH 4407 - USA |
USD | 3,477,750.00 | 3,200,579.79 | 100% | 100% | line by-line |
| thyssenkrupp nucera AG & Co. KGaA - GERMANY |
Germany | Euro | 100,000,000.00 | 100,000,000.00 | 34% | 34% | equity |
| thyssenkrupp nucera Italy S.r.l.- ITALY |
Italy | Euro | 1,080,000.00 | 1,080,000.00 | 34% | 34% | equity |
| thyssenKrupp nucera Australia Pty - AUSTRALIA |
Australia | AUD | 500,000.00 | 304,915.23 | 34% | 34% | equity |
| thyssenkrupp nucera Arabia for Contracting Limited |
Saudi Arabia | SAR | 2,000,000.00 | 501,190.33 | 34% | 34% | equity |
| thyssenkrupp nucera Japan Ltd - JAPAN |
Japan | JPY | 150,000,000.00 | 954,441.33 | 34% | 34% | equity |
| thyssenkrupp nucera (Shanghai) Co., Ltd - CHINA |
China | CNY | 20,691,437.50 | 2,619,733.04 | 34% | 34% | equity |
| thyssenkrupp nucera USA Inc. - USA |
USA | USD | 700,000.00 | 644,211.30 | 34% | 34% | equity |
| thyssenkrupp nucera Management AG |
Germany | Euro | 50,000.00 | 50,000.00 | 34% | 34% | equity |
It should be noted that the scope of consolidation as of June 30, 2023 has changed in relation to December 31, 2022 due to the following:
— on May 15, 2023, Industrie De Nora S.p.A. completed through its German subsidiary De Nora Deutschland GmbH, the acquisition of 100% of the capital share of Shotec GmbH.
This acquisition is an important achievement since it represents an opportunity for De Nora to broaden the process and technology portfolio to produce electrodes whilst also enhancing production capacity. Furthermore, the transaction allows De Nora and Shotec to further strengthen their Research and Development activities with a view to a progressive reduction in the use of precious metals in anodic and cathodic coating activities, to make the electrochemical processes in which the coatings are used increasingly competitive.
Starting from the acquisition date, Shotec GmbH became part of the Group's scope of consolidation and fully consolidated in accordance with the provisions of IFRS 10 Consolidated Financial Statements.
The acquisition of Shotec GmbH represents a business combination recognized in accordance with IFRS 3 Business Combinations. To this end, on the date control was acquired, the individual assets acquired, and liabilities assumed were recognized at the relative fair value. The fair values of the assets and liabilities acquired were determined on a provisional basis, as at the date of preparation of these condensed consolidated interim financial statements, some valuation processes had not yet been finalized. These fair values could be subject to changes within 12 months of the acquisition date.
The purchase price defined for the acquisition was equal to Euro 2,117.8 thousand and is not subject to adjustments
The fair values at the acquisition date of the assets and liabilities of Shotec GmbH determined on a provisional basis are summarized below:
| (in ¤ thousands) | ASSETS | 15/05/2023 |
|---|---|---|
| Non current assets | ||
| Property, plant and equipment | 943 | |
| Other receivables | 11 | |
| Total non current assets | 954 | |
| Current assets | ||
| Inventory | 116 | |
| Trade receivables | 108 | |
| Other receivables | 107 | |
| Cash and cash equivalents | 72 | |
| Total current assets | 403 | |
| Total assets | 1,357 |
| (in ¤ thousands) | LIABILITIES | 15/05/2023 |
|---|---|---|
| Equity | (corresponding to the Fair value of the net assets acquired) | 937 |
| Total non current liabilities | - | |
| Current liabilities | ||
| Trade payables | 48 | |
| Income tax payable | 60 | |
| Other payables | 312 | |
| Total current liabilities | 420 | |
| Total equity and liabilities | 1,357 |
The excess of the purchase price compared to the fair value at the acquisition date of the assets and liabilities of Shotec GmbH, equal to a total of Euro 1,181 thousand, has been entirely recognized as Goodwill on a provisional basis in the present condensed interim consolidated financial statements.
Transaction costs related to the above acquisition are immaterial.
Shotec GmbH's contribution to the
consolidated condensed financial statements as at June 30, 2023 amounts to Euro 178 thousand in Revenues and Euro 50 thousand of Net Profit.
It is also worth noting that effective January 1, 2023, De Nora ISIA S.r.l. was merged by incorporation into De Nora Water Technologies Italy S.r.l. This transaction did not have any impact in consolidated financial statements as of June 30, 2023.
The following table shows the end-ofperiod exchange rates, against the Euro, for the major currencies in which the
Group operates, as of June 30, 2023 and December 31, 2022:
| Currency | At June 30, 2023 |
At December 31, 2022 |
|---|---|---|
| US Dollar | 1.0866 | 1.0666 |
| Japanese Yen | 157.16 | 140.66 |
| Indian Rupee | 89.2065 | 88.171 |
| Chinese Yuan Renminbi | 7.8983 | 7.3582 |
| Brazilian Real | 5.2788 | 5.6386 |
| Pound sterling (GBP) | 0.8583 | 0.8869 |
The following table shows the average exchange rates, against the Euro, for the major currencies in which the Group operates for the six-month periods ended June 30, 2023 and 2022:
| Half-year period ended June 30 | ||
|---|---|---|
| Currency | 2023 | 2022 |
| US Dollar | 1.0809 | 1.0932 |
| Japanese Yen | 145.7753 | 134.6147 |
| Indian Rupee | 88.8562 | 83.29386 |
| Chinese Yuan Renminbi | 7.4906 | 7.0882 |
| Brazilian Real | 5.4827 | 5.5555 |
| GB Pound | 0.8763 | 0.8430 |
The main recognition, classification and valuation criteria and accounting policies adopted for the preparation of the Condensed Consolidated Half-Year Financial Statements are uniform to those adopted for the preparation of the Consolidated Financial Statements as of December 31, 2022, except for the newly issued standards mentioned above, to which reference is therefore made.
The Group has not adopted early any standard, interpretation or improvement issued but not yet in effect.
Furthermore, income taxes for the period are determined on the basis of the best possible estimate in relation to the available information and on the reasonable expectation of the year's performance until the end of the tax period.
Estimates and assumptions used to draw up these Condensed Consolidated Half-Year Financial Statements are consistent with the ones used for the preparation of the Consolidated Financial Statements as of December 31, 2022 to which reference is therefore made.
The Group's activities show no significant seasonal or cyclical variations.
The Group has not experienced significant issues related to the ongoing Russo-Ukrainian conflict in terms of supply, production, and sales. As of June 30, 2023, the Group's main suppliers of strategic materials are located outside of Russia and Ukraine. Customers in the affected area represent approximately 2% of the Group's revenues for the six months ending June 30, 2023 (3.4% for the six months ending June 30, 2022).
As of June 30, 2023, the exposure to Russian or Ukrainian customers amounts to approximately Euro 1.7 million and does not pose any significant risks of non-payment.
However, it is not ruled out that the continuation of a military conflict situation in Ukraine and an escalation of tensions between Russia and the countries where the Group operates and the tightening of the sanctions framework against Russia could have a negative impact on business opportunities of the Group in the territories affected by the conflict or negatively influence global macroeconomic conditions and the economies of those countries leading to a potential decrease in demand and a subsequent reduction in production levels.
The following table details revenues
from contracts with customers by type for the six-month periods ended June 30, 2023 and 2022:
| First half-year ended June | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| (in ¤ thousands) | ||||
| Sales of electrodes | 230,376 | 242,186 | ||
| Sales of systems | 14,741 | 18,062 | ||
| After-market and other sales | 133,329 | 120,629 | ||
| Change in construction contracts | 41,938 | 29,590 | ||
| Total | 420,384 | 410,467 |
Revenues for the six months ended June 30, 2023, amounted to Euro 420,384 thousand (Euro 410,467 thousand for the six months ended June 30, 2022). The increase of Euro 9,917 thousand (+2.4%, +4.1% at constant exchange rates)9 is mainly due:
Details of revenues by geographic area, is shown below:
| 2023 | 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Europe, Middle East, Africa and India (EMEIA) | 158,618 | 128,959 |
| North and South America (AMS) | 126,661 | 141,541 |
| Asia and South Pacific (APAC) | 135,105 | 139,967 |
| Total | 420,384 | 410,467 |
For the half-year ended June 30, 2023, almost all of the obligations to be
fulfilled by the Group refer to contracts with a duration of less than 12 months.
9 Determined by converting data in currencies other than euros for the six months ended June 30, 2023, at historical exchange rates for the six months ended June 30, 2022.
For the six months ended June 30, 2023, the Group had a positive change in inventories of semi-finished and finished products of Euro 25,308 thousand (Euro 14,485 thousand for the six months ended June 30, 2022).
The table below shows the details of other income for the six-month periods ended June 30, 2023 and 2022:
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| (in ¤ thousands) | |||
| Sundry income | 2,090 | 2,030 | |
| R&D grants | 655 | 354 | |
| R&D income | 63 | 85 | |
| Gains on sale of non-current assets | 1 | 41 | |
| Insurance refunds | 563 | 30 | |
| Total | 3,372 | 2,540 |
Other income mainly refers to income from ancillary operations.
The table below shows the cost for raw materials, consumables, supplies and goods for the six-month periods ended June 30, 2023 and 2022:
| 2023 | 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Purchase of raw materials | 127,226 | 172,781 |
| Change in inventory | 12,826 | (23,813) |
| Purchase of semi-finished and finished goods | 48,371 | 37,541 |
| Purchase of consumables and supplies | 11,011 | 6,938 |
| Purchase of packaging material | 1,142 | 793 |
| Other purchases and related charges | 73 | 44 |
| (Capitalized costs) | (2,620) | (4,625) |
| Total | 198,029 | 189,659 |
Capitalized costs refer to costs incurred by the Group companies for the internal development of projects and products that meet the requirements for capitalization.
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| (in ¤ thousands) | |||
| Wages and salaries | 59,283 | 52,692 | |
| Management Incentive Plan | - | 19,360 | |
| Social security contributions | 12,876 | 11,115 | |
| Post-employment benefits and other pension plans | 1,210 | 1,248 | |
| Other personnel net (income)/expenses | 1,201 | 878 | |
| (Capitalized costs) | (2,120) | (2,184) | |
| Total | 72,450 | 83,109 |
Personnel expenses amounted to Euro 72,450 thousand for the six months ended June 30, 2023 (Euro 83,109 thousand for the six months ended June 30, 2022) with an increase compared to the six months of the previous year amounting to Euro 10,659 thousand, mainly due to the recognition of the cost of the Management Incentive Plan in the year being compared.
Net of that non-recurring item impacting the half year ended June 30, 2022, personnel expense would have increased by Euro 8,701 as a consequence of the ongoing headcount increase; the following table shows the average number of Group employees for the six-month periods ended June 30, 2023 and 2022.
| 2023 | 2022 | |
|---|---|---|
| Average number of employees | 1,983 | 1,777 |
Other personnel net (income)/expenses, amounting to Euro 1,201 thousand (Euro 878 thousand for the six months ended June 30, 2022), are mainly related to charges and incentives for employee terminations, costs for medical and insurance coverage, and benefits for expatriates.
Capitalised costs refer to costs incurred by the Group companies for the internal development of projects and products that meet the requirements for capitalisation.
| First half-year ended June 30 | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| (in ¤ thousands) | ||||
| Outsourcing expenses | 34,533 | 22,017 | ||
| Consultancies | ||||
| - Production and technical assistance | 6,536 | 6,915 | ||
| - Selling | 160 | 166 | ||
| - Legal, tax, administrative and ICT | 6,926 | 8,898 | ||
| - M&A and Business development | 43 | 141 | ||
| Utilities/Telephony | 5,891 | 4,897 | ||
| Maintenance | 9,115 | 6,834 | ||
| Travel expenses | 4,363 | 3,072 | ||
| R&D | 648 | 545 | ||
| Statutory auditors' fees | 62 | 68 | ||
| Insurance | 2,004 | 1,748 | ||
| Rents and other lease expenses | 1,481 | 1,211 | ||
| Commissions and royalties | 2,860 | 3,643 | ||
| Freight | 6,574 | 5,030 | ||
| Waste disposal, office cleaning and security | 1,807 | 1,482 | ||
| Promotional, advertising and marketing expenses | 486 | 865 | ||
| Patents and trademarks | 618 | 713 | ||
| Canteen, training and other personnel expenses | 1,840 | 1,254 | ||
| Board of Directors fees | 641 | 340 | ||
| Total | 86,586 | 69,839 |
Costs for services amounted to Euro 86,586 thousand for the six months ended June 30, 2023 (Euro 69,839 thousand for the six months ended
June 30, 2022) with a total increase of Euro 16,747 thousand mainly related to outsourcing expenses to third party vendors.
The table below shows the detail of other operating expenses for the six-month periods ended June 30, 2023 and 2022:
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 2022 |
|||
| (in ¤ thousands) | |||
| Indirect taxes and duties | 4,382 | 3,083 | |
| Losses on sale of non-current assets | 203 | 196 | |
| Other expenses | 1,138 | 1,151 | |
| Total | 5,723 4,430 |
Other operating expenses amounted to Euro 5,723 thousand for the six months ended June 30, 2023 (Euro 4,430 thousand for the six months ended June 30, 2022).
The following table shows the detail of the item impairment (losses)/revaluations of non-current assets and provisions for the six-month periods ended June 30, 2023 and 2022:
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| (in ¤ thousands) | |||
| Net provisions for risks and charges | 3,418 | 1,269 | |
| Net bad debt provision | (248) | (306) | |
| Impairment/(Write back) of Property, Plant and Equipment and Intangible assets |
1,276 | 3,083 | |
| Total | 4,446 | 4,046 |
The impairment of Euro 1,276 thousand recorded in the six months ended June 30, 2023 refers to the intangible asset (development cost) recognized in the company De Nora Water Technologies Italy S.r.l. for the development of a water treatment system on cruise ships (Advanced Wastewater Treatment Plant, hereinafter "AWTP").
The impairment of Euro 3,083 recognized in in the six months ended June 30, 2022 was related to plant and machinery used in the United States for hydraulic fracturing activities (so-called Fracking) pertaining to the Water technologies segment.
| First half-year ended June 30 | ||||
|---|---|---|---|---|
| 2023 2022 |
||||
| (in ¤ thousands) | ||||
| Exchange rate gains | 4,445 | 16,021 | ||
| Fair value (positive) on financial instrument | 30 | 5,256 | ||
| Income from non-current financial assets | 305 | 1 | ||
| Financial income from banks/financial receivables | 1,027 | 159 | ||
| Interest on trade receivables | 1 | - | ||
| Other finance income | 117 | 46 | ||
| Total | 5,925 | 21,483 |
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| (in ¤ thousands) | |||
| Bank interest and interest on loans and borrowings | 4,662 | 2,648 | |
| Exchange rate losses | 4,716 | 10,316 | |
| Fair value (negative) on financial instruments | 2 | 3,996 | |
| Finance expenses on personnel costs | 320 | 133 | |
| Bank fees | 455 | 434 | |
| Other finance expenses | 274 | 272 | |
| Total | 10,429 | 17,799 |
The adjustment of financial instruments to fair value is mainly related to derivatives to hedge exchange rate fluctuations. Therefore, the amount of this item should be read in conjunction with the amount of exchange rate gains and losses for the respective six-month periods ended June 30, 2023, and 2022.
For the six-month periods ended June 30, 2023, and June 30, 2022, other financial expenses mainly include interest related to lease contracts and bank guarantee expenses.
| First half-year ended June 30 | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| (in ¤ thousands) | ||||
| Current taxes | 19,444 23,044 |
|||
| Deferred taxes | (1,684) (2,658) |
|||
| Prior years taxes | (77) | 863 | ||
| Total | 17,683 | 21,249 |
| First half-year ended June 30 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| Profit for the period attributable to shareholders of the Parent Company distributable to ordinary and multiple voting shares (in ¤ thousands) |
46,233 | 39,918 | |
| Weighted average number of shares for basic and diluted earnings per share |
201,685,174 | 178,485,291 | |
| Basic and diluted earnings per ordinary and multiple voting share (in Euro) |
0.23 | 0.22 |
The table below shows the breakdown and changes in intangible assets for the six months ended June 30, 2023:
| (in ¤ thousands) | Goo dwill |
Industrial patents and intellectual property rights |
Conces sions, licenses and trade marks |
Know how and Technolo gies |
Custo mer relation ships |
Deve lopment costs |
Other | Assets under con struction and advance paymen ts |
Total intangible assets |
|---|---|---|---|---|---|---|---|---|---|
| Historical cost at December 31, 2022 |
66,981 | 14,878 | 37,697 | 47,441 | 52,430 | 22,754 | 9,136 | 8,969 | 260,286 |
| Change in consolidation scope |
1,181 | - | - | - | - | - | - | - | 1,181 |
| Increases | - | 230 | 1,069 | - | - | - | - | 2,656 | 3,955 |
| Decreases | - | - | - | - | - | - | - | (157) | (157) |
| Impairment | - | - | - | - | - | (1,276) | - | - | (1,276) |
| Reclassifications/ other movements |
- | 185 | 1,390 | - | - | 447 | 328 | (2,483) | (132) |
| Exchange rate difference | (1,186) | (194) | (1,206) | (2,820) | (1,454) | (515) | (174) | (200) | (7,750) |
| Historical cost at June 30, 2023 |
66,976 | 15,100 | 38,950 | 44,621 | 50,976 | 21,410 | 9,290 | 8,785 | 256,107 |
| Accumulated amortization as of December 31, 2022 |
- | 13,400 | 28,720 | 32,984 | 38,931 | 9,476 | 5,221 | - | 128,733 |
| Increases | - | 495 | 1,594 | 759 | 569 | 1,726 | 261 | - | 5,404 |
| Decreases | - | - | - | - | - | - | - | - | - |
| Reclassifications/Other movements |
- | - | 74 | - | - | (81) | (180) | - | (187) |
| Exchange rate difference | - | (130) | (1,024) | (1,740) | (967) | (302) | (106) | - | (4,269) |
| Accumulated amortiza tion as of June 30, 2023 |
- | 13,766 | 29,364 | 32,003 | 38,533 | 10,818 | 5,196 | - | 129,681 |
| Net book value as of December 31, 2022 |
66,981 | 1,478 | 8,977 | 14,457 | 13,499 | 13,278 | 3,915 | 8,969 | 131,552 |
| Net book value as of June 30, 2023 |
66,976 | 1,334 | 9,586 | 12,617 | 12,444 | 10,591 | 4,094 | 8,785 | 126,427 |
The increase related to goodwill (Euro 1,181 thousand) refers to the acquisition of 100% of the share capital of Shotec GmbH and represents the entire excess of the purchase price over the fair value of the assets and liabilities of the acquired company. This goodwill is provisionally recognized in the current Condensed Consolidated Half Year Financial Statements as of June 30, 2023 as certain valuation processes have not yet been finalized.
Investments in intangible assets for the half year 2023 amounted to Euro 3,955 thousand and mainly refer to:
(i) industrial patent rights and intellectual property rights for Euro 230 thousand mainly attributable to the registration and acquisition of industrial patents by the Parent Company Industrie De Nora S.p.A.;
(ii) concessions, licenses and trademarks for Euro 1,069 thousand mainly relating to the implementation of SAP management system and other ICT systems;
(iii) intangible assets in progress for Euro 2,656 thousand relating to: for Euro 774 thousand to industrial patent rights and intellectual property rights mainly attributable to the registration and acquisition of industrial patents by the Parent Company Industrie De Nora S.p.A. and by the Japanese subsidiary De Nora Permelec Ltd., for Euro 177 thousand to concessions, licenses and trademarks mainly relating to the implementation of the SAP management system and other ICT systems and for Euro 1,705 thousand related to product development costs mainly pertaining to the Water Technologies business segment.
As of June 30, 2023, an impairment test was conducted on the recoverability of the remaining carrying value of development costs recognised in De Nora Water Technologies Italy S.r.l., related to an onboard cruise ship water treatment system (Advanced Wastewater Treatment Plant, hereinafter referred to as "AWTP").
The net book value of this intangible asset as of June 30, 2023, amounted to Euro 2,136 thousand, after the total impairment of Euro 4,323 thousand that was recognized in the consolidated financial statements for the year ended December 31, 2022.
Based on the updated forecast data of turnover and expected operating profitability resulting from the utilization of this asset, its value in use was assessed using the "DCF Method" (Discounted Cash Flow Method). Below are the main parameters used to estimate the present value of cash flows related to this asset:
| Asset tested | WACC |
|---|---|
| AWTP | 11,4% |
Based on the impairment test, the value in use attributable to this asset amounts to Euro 860 thousand. Therefore, total impairment of Euro 1,276 thousand was recognized in the consolidated financial statements for the six-month period ended June 30, 2023.
With regard to other intangible activities, no impairment indicators have been identified. Therefore, no further impairment tests have been conducted, also considering the significant headroom emerged from the evaluations performed on the financial statements closed on December 31, 2022.
The following table shows the breakdown and changes in property, plant and equipment for the six months ended June 30, 2023:
| (in ¤ thousands) | Land | Buildin gs |
Plant and Ma chinery |
Other assets |
Leased assets |
Right of use of PPE: |
- of which Buildin gs |
- of which Other assets |
Assets under con struction and advance paymen ts |
Total property, plant and equip ment |
|---|---|---|---|---|---|---|---|---|---|---|
| Historical cost as of December 31, 2022 |
28,805 | 93,750 | 107,071 | 20,577 | 122,591 | 10,855 | 8,691 | 2,163 | 20,100 | 403,750 |
| Change in consolidation scope |
- | 414 | 504 | 25 | - | - | - | - | - | 943 |
| Increases | 14,240 | 102 | 691 | 31 | 2,713 | 3,740 | 3,607 | 133 | 15,675 | 37,192 |
| Decreases | - | (290) | (682) | (393) | (181) | - | - | - | (232) | (1,779) |
| Impairment | - | - | - | - | - | - | - | - | - | - |
| Reclassifications/ other movements |
- | 1,305 | 2,943 | 323 | 289 | - | - | - | (4,681) | 178 |
| Exchange rate difference |
(2,315) | (3,148) | (3,168) | (765) | (8,662) | (432) | (424) | (8) | (473) | (18,963) |
| Historical cost at June 30, 2023 |
40,731 | 92,133 | 107,358 | 19,797 | 116,750 | 14,163 | 11,874 | 2,288 | 30,390 | 421,321 |
| Accumulated depreciation as of December 31, 2022 |
10 | 38,224 | 63,442 | 15,969 | 97,240 | 4,688 | 3,028 | 1,660 | - | 219,572 |
| Increases | - | 1,570 | 2,945 | 643 | 2,942 | 1,130 | 938 | 192 | - | 9,230 |
| Decreases | - | (141) | (638) | (378) | (178) | - | - | - | - | (1,334) |
| Impairment | - | - | - | - | - | - | - | - | - | - |
| Reclassifications/ other movements |
- | 11 | 13 | (22) | - | - | - | - | - | 2 |
| Exchange rate difference |
- | (1,447) | (2,098) | (611) | (6,997) | (131) | (124) | (7) | - | (11,284) |
| Accumulated depreciation as of June 30, 2023 |
10 | 38,217 | 63,664 | 15,602 | 93,007 | 5,687 | 3,842 | 1,845 | - | 216,186 |
| Net book value as of December 31, 2022 |
28,795 | 55,526 | 43,629 | 4,608 | 25,351 | 6,167 | 5,663 | 503 | 20,100 | 184,177 |
| Net book value as of June 30, 2023 |
40,721 | 53,916 | 43,694 | 4,195 | 23,743 | 8,476 | 8,032 | 443 | 30,390 | 205,135 |
Increases in property, plant and equipment amounted to Euro 37,192 for the first half 2023. In particular, investments in property, plant and equipment excluding increases in rights of use of property, plant and equipment amounted to Euro 33,453 thousand and mainly refer to:
(i) acquisition of land for Euro 9,459 thousand related to an industrial area in Cernusco sul Naviglio for the project "Italian Gigafactory";
(ii) acquisition of land for Euro 4,780 thousand related to a disused industrial area adjacent to the existing area of Via Bistolfi 35. The objective of this acquisition is to host new offices, laboratories and collaborative spaces, improving the Milan workplace through the creation of a "campus" and allowing the planned workforce increase;
(iii) leased assets for Euro 2,713 thousand related to anodes to be leased within the Electrode Technologies business segment;
(iv) plant and machinery for Euro 691 thousand mainly attributable to the German subsidiary;
(v) assets under construction and advance payments amounting to Euro 15,675 thousand, which refer for Euro 7,433 thousand to plant and machinery aimed at the technological renewal and the planned production capacity expansion mainly in Italy (Gigafactory), Germany China, United States and Japan, and to the installation of solar panels in the office building of Via Bistolfi and in the plant of Cologno Monzese, for Euro 3,442 thousand to buildings mainly in Italy (Gigafactory), China, Germany and United States, for Euro 945 thousand to other tangible assets under construction and for Euro 3.855 thousand to advance payments. These latter refer to advances paid for the manufacturing sites expansion projects in China and Germany.
No impairment indicators have been identified and therefore, no further impairment tests have been conducted.
This item refers to the investment in the associated company Thyssenkrupp Nucera AG & Co. KGaA (hereinafter "tk nucera").
| (in ¤ thousands) | |
|---|---|
| Opening balance | 122,664 |
| Share of profits (losses) | 1,527 |
| Other increases (decreases) | (709) |
| Closing balance | 123,482 |
| Investment % | 34% |
For the purpose of measuring the investment using the equity method, the results for the quarter ending as of March 31, 2023 were used in the absence of tk nucera financial figures referring to a more recent date, taking into account any transactions or events that had a significant impact on the associated company in the April-June 2023 period, in accordance with IFRS (IAS 28, paragraph 34).
The following table shows the consolidated statement of financial position and income statement figures for tk nucera for the 3-month period ended March 31, 2023 (a period that represents the second quarter of operations of the associate company since the business year of tk nucera group companies runs from October 1 to September 30).
| As of March 31 | |
|---|---|
| 2023 | |
| (in ¤ thousands) | |
| Intangible assets | 56,732 |
| Property, plant and equipment | 9,030 |
| Deferred tax assets | 11,997 |
| Other non-current assets | 2,520 |
| Inventory | 69,592 |
| Trade receivables | 39,789 |
| Financial assets and other current receivables | 357,152 |
| Cash and cash equivalents | 26,687 |
| Total assets | 573,499 |
| Share Capital | 100,000 |
| Reserves | 119,623 |
| Deferred tax liabilities | 9,629 |
| Employees benefits | 7,373 |
| Financial liabilities | 2,235 |
| Other non-current payables | 1,665 |
| Trade payables | 92,358 |
| Construction contracts and other current payables | 240,616 |
| Total liabilities and equity | 573,499 |
| For the period ended March 31, |
|
|---|---|
| 2023 | |
| (in ¤ thousands) | |
| Revenues | 151,165 |
| Operating costs (*) | (148,854) |
| Finance income/(expense) | 2,705 |
| Income tax expense | (1,406) |
| Profit for the period | 3,610 |
| Other components of the comprehensive income statement | (2,034) |
| Profit of the comprehensive income statement for the year | 1,576 |
(*) For the 3-month period ended March 31, 2023 it includes depreciation and amortization and write-down of Euro 1,033 thousand.
The table below shows the breakdown of non-current financial assets as of June 30, 2023 and December 31, 2022:
| As of June 30, 2023 |
As of December 31, 2022 |
||
|---|---|---|---|
| (in ¤ thousands) | |||
| Non-current | |||
| Financial receivables | 1,790 | 1,823 | |
| Investments in financial assets | 2,654 | 2,787 | |
| Total | 4,444 | 4,610 |
Financial receivables refer to financial lease contracts related to hydraulic fracturing activities (so-called Fracking) related to the Water Technologies segment. The receivable recognized represents the present value of the future lease payments contractually due beyond the next financial year. Financial receivables are shown net of the related bad debt provision equal to Euro 3,335 thousand
as of June 30, 2023 (Euro 3,398 thousand as of December 31, 2022).
Investments in financial assets mainly refer to some pension funds and company supplementary funds for employees.
The table below shows the breakdown of current financial assets as of June 30, 2023 and December 31, 2022.
| As of June 30, 2023 |
As of December 31, 2022 |
|
|---|---|---|
| (in ¤ thousands) | ||
| Current | ||
| Financial receivables | 39 | 150,234 |
| Investments in financial assets | 11,250 | 8,158 |
| Fair value of derivatives | 673 | 644 |
| Total | 11,962 | 159,036 |
The financial receivables as of December 31, 2022, mainly related to the Parent Company. Industrie De Nora S.p.A. had entered into time deposit agreements with some major financial
institutions in 2022, which had fully matured and were not renewed.
Investments in financial assets relate primarily to investments subject to shortterm time restrictions.
The following table shows the detail
of the other receivables as of June 30, 2023 and December 31, 2022, broken down between current and non-current amounts:
| As of June 30, 2023 | As of December 31, 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Non-current | ||
| Tax receivables | 8,681 | 6,416 |
| Other receivables from third parties | 2,727 | 2,561 |
| Prepaid expenses and accrued income | 3 | 1 |
| Receivables from related parties | 52 | 52 |
| Total | 11,463 | 9,030 |
| (in ¤ thousands) | ||
|---|---|---|
| Current | ||
| Advances to suppliers | 8,593 | 9,017 |
| Tax receivables | 10,911 | 14,708 |
| Other receivables from third parties | 3,787 | 2,377 |
| Prepaid expenses and accrued income | 7,743 | 6,972 |
| Receivables from related parties | 52 | - |
| Total | 31,086 | 33,074 |
As of June 30, 2023, other current and non-current receivables totalled Euro 42,549 thousand, (Euro 42,104 thousand as of December 31, 2022).
Non-current tax receivables relate to withholding taxes incurred mainly by the Parent Company against collections of receivables from foreign subsidiaries.
The other non-current receivables from
third parties are mainly attributable to the contributions paid by the Italian companies of the Group against existing supplementary pension funds as a counter-entry to the contribution due by the employer.
Current tax receivables mainly refer to VAT receivables of Euro 8,863 thousand as of June 30, 2023 and Euro 13,138 thousand as of December 31, 2022.
| As of June 30, 2023 |
As of December 31, 2022 |
|
|---|---|---|
| (in ¤ thousands) | ||
| Raw materials and consumables | 118,998 | 135,731 |
| Works in progress and semi-finished products | 109,420 | 107,407 |
| Finished products and goods | 82,169 | 70,731 |
| Goods in transit | 6,736 | 4,848 |
| Total gross inventories | 317,323 | 318,717 |
| Allowance for inventory write-down | (18,899) | (23,241) |
| Total Net inventories | 298,424 | 295,476 |
Inventories, amounting to Euro 298,424 thousand, increased Euro 2,948 thousand compared to the value as at December 31, 2022.
down reserve equal to Euro 18,899 thousand at June 30, 2023 (Euro 23,241 thousand at December 31, 2022). The movements of the inventory write-down provision were as follows:
Inventory is shown net of the write
| Raw materials and consumables |
Works in progress and semi-finished products |
Finished products and goods |
Total | |
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Balance as of December 31, 2022 |
1,597 | 13,564 | 8,080 | 23,241 |
| Accruals | 566 | 64 | 168 | 798 |
| Utilization and releases | (256) | (2,472) | (1,637) | (4,365) |
| Exchange rate difference | (29) | (605) | (141) | (775) |
| Balance as of June 30, 2023 | 1,878 | 10,551 | 6,470 | 18,899 |
Current tax assets amounted to Euro
6,380 thousand at June 30, 2023 (Euro 4,893 thousand at December 31, 2022) and mainly refer to advances on income taxes paid by some Group companies.
down of Construction contracts as of June 30, 2023 and December 31, 2022.
| As of June 30, 2023 |
As of December 31, 2022 |
|
|---|---|---|
| (in ¤ thousands) | ||
| Current assets | ||
| Construction contracts | 118,490 | 107,946 |
| (Progress payments) | (85,132) | (77,544) |
| Provision for losses on construction contracts | (1,243) | (1,267) |
| Total | 32,115 | 29,135 |
| Current liabilities | ||
| Works in progress to order | 70,786 | 68,031 |
| (Progress payments and Advances) | (79,492) | (80,695) |
| Provision for losses on construction contracts | (146) | (38) |
| Total | (8,852) | (12,702) |
| Total works in progress to order (net of advances) | 23,263 | 16,433 |
Construction contracts (net of contractual advances) amounted to Euro 23,263 thousand at June 30, 2023, an increase from Euro 16,433 thousand as of December 31, 2022, and refer to contracts relating to the Water Technologies business segment.
The table below shows the detail of trade receivables as of June 30, 2023 and December 31, 2022.
| As of June 30, 2023 | As of December 31, 2022 |
|---|---|
| (in ¤ thousands) | |||
|---|---|---|---|
| Current | |||
| Third parties | 121,144 | 124,008 | |
| Related parties | 21,587 | 7,267 | |
| Bad debt reserve | (7,265) | (7,854) | |
| Total | 135,466 | 123,421 |
Trade receivables originate from sales transactions and the provision of services and amounted, at June 30, 2023, to Euro 135,466 thousand (Euro 123,421 thousand at December 31, 2022).
The carrying amount of trade receivables, net of the bad debt reserve provisions, is deemed to approximate its fair value.
Following are the movements in the bad debt provision:
As of June 30, 2023
| (in ¤ thousands) | |
|---|---|
| Current | |
| Balance as of December 31, 2022 | 7,854 |
| Accruals for the period | 351 |
| Utilisation and releases of the period | (853) |
| Exchange rate difference | (87) |
| Balance as of June 30, 2023 | 7,265 |
The table below provides a breakdown of cash and cash equivalents as of June 30, 2023 and December 31, 2022:
| As of June 30, 2023 | |||
|---|---|---|---|
As of June 30, 2023 As of December 31, 2022
| (in ¤ thousands) | ||
|---|---|---|
| Bank and postal accounts | 128,185 | 170,639 |
| Cash on hand | 37 | 28 |
| Deposit accounts | 4,285 | 3,462 |
| Cash and cash equivalents | 132,507 | 174,129 |
Cash and cash equivalents are made up of effectively available values and deposits. As regards the amounts on deposits and current accounts, the related interest has been recognised on accrual basis.
Cash and cash equivalents, amounting to Euro 132,507 thousand as of June 30, 2023, decreased by Euro 41,622 thousand compared to December 31, 2022.
For further details on the variations of the period please refer to Interim consolidated statement of cash flows.
Equity as of June 30, 2023 is Euro 748,486 thousand, up from Euro 744,804 thousand as of December 31, 2022.
The shares issued are fully paid up and have no nominal value.
Changes in equity for the six-month periods ended June 30, 2023 and June 30, 2022 are shown in the "Consolidated statement of changes in equity", while the "Consolidated statement of comprehensive income" sets out the other components of the statement of comprehensive income for the period, net of the tax effects.
As a result of the sale of shares by the shareholders Asset Company 10 S.r.l., a wholly owned subsidiary of Snam S.p.A., Federico De Nora S.p.A. and Norfin S.p.A. on April 5, 2023, no. 7,304,480 shares with multiple voting rights of Industrie De Nora S.p.A. were automatically converted into ordinary shares, at a conversion ratio of no. 1 (one) ordinary share for each share with multiple voting rights, without the need for any manifestation of will on the part of the respective holders and without any change in the amount of the Company's share capital. The conversion took effect on April 11, 2023.
As a result of this share conversion, the share capital of Industrie De Nora S.p.A. remained equal to Euro 18,268,203.90 and the number of ordinary shares increased from no. 43,899,499 to no.
51,203,979, with no indication of par value, corresponding to the same number of voting rights, while the number of multiple voting shares decreased from no. 157,785,675 to 150,481,195, with no indication of par value, corresponding in aggregate to 451,443,585 voting rights. The total number of shares remained unchanged at 201,685,174, and the aggregate number of voting rights decreased from 517,256,524 to 502,647,564.
Retained earnings, translation reserve and other reserves pertaining to the Group as of June 30, 2023, amounted to Euro 452,161 thousand (Euro 406,596 thousand as of December 31, 2022), a net increase of Euro 45,565 thousand over December 31, 2022, of which:
The table below shows the breakdown of minority interests as of June 30, 2023 and December 31, 2022:
| As of June 30, 2023 | As of December 31, 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Share capital and reserves | 4,486 | 3,599 |
| Profit/(loss) for the period | 493 | 101 |
| Other comprehensive income | 55 | (114) |
| Total | 5,034 | 3,586 |
The increase in share capital and reserves in the half-year period ended as of June 30, 2023 is essentially due to De Nora Italy Hydrogen Technologies S.r.l. following the payment made by the minority shareholder Snam S.p.A..
Employee benefits at June 30, 2023
amount to Euro 20.693 thousand (Euro 26.628 thousand at December 31, 2022).
The following table shows the composition and movements of the provisions for risks and charges as of June 30, 2023 and December 31, 2022.
| As of June 30, 2023 | As of December 31, 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Non-current | ||
| Provision for contractual warranties | 249 | 179 |
| Provision for other risks | 1,995 | 1,963 |
| Total | 2,244 | 2,142 |
| Current | ||
| Provision for contractual warranties | 11,580 | 11,605 |
| Provision for other risks | 8,443 | 6,941 |
| Total | 20,023 | 18,546 |
| Total provisions for risks and charges | 22,267 | 20,688 |
Provisions for risks and charges mainly include: (i) the provision for miscellaneous risks, amounting to Euro 10.438 thousand as of June 30, 2023, and Euro 8,904 thousand as of December 31, 2022; and (ii) the provision for contractual warranties risks, which represents an estimate of the costs for
contractually stipulated warranties in connection with the supply of products and plants and amounts to Euro 11,829 thousand as of June 30, 2032, and Euro 11,784 thousand as of December 31, 2022.
Changes for the period ended June 30, 2023 were as follows:
| Provision for contractual warranties |
Provision for other risks |
|||
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Balance as of December 31, 2022 | 11,784 | 8,904 | ||
| Accruals for the period | 2,309 | 2,217 | ||
| Utilization and releases of the period | (1,706) | (623) | ||
| Exchange rate differences | (558) | (60) | ||
| Balance as of June 30, 2023 | 11,829 | 10,438 |
| As of June 30, 2023 | As of December 31, 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Non-current | ||
| Bank loans and borrowings | 115,575 | 262,741 |
| Lease payables | 6,354 | 4,803 |
| Total | 121,929 | 267,544 |
| Current | ||
| Bank overdrafts | 38 | 282 |
| Bank loans and borrowings | 10,817 | 11,740 |
| Payables to other lenders | 137 | - |
| Lease payables | 2,464 | 1,633 |
| Fair value of derivatives | 8 | - |
| Total | 13,464 | 13,655 |
| Total financial liabilities | 135,393 | 281,199 |
The table below shows the details of
bank loans and borrowings and bank overdrafts:
| As of June 30, 2023 | As of December 31, 2022 | |||||
|---|---|---|---|---|---|---|
| (in ¤ thousands) | Non Current |
Current | Total | Non Current |
Current | Total |
| New Pool Loan (IDN) | 79,123 | - | 79,123 | 178,772 | - | 178,772 |
| New Pool Loan (De Nora Holdings US Inc) | 36,452 | - | 36,452 | 83,969 | 10 | 83,979 |
| Sumitomo Mitsui Banking Co. (De Nora Permelec Ltd) |
- | 6,363 | 6,363 | - | 9,953 | 9,953 |
| Sumitomo Mitsui Trust Bank (De Nora Permelec Ltd) |
- | 4,454 | 4,454 | - | 355 | 355 |
| Bank of Yokohama (De Nora Permelec Ltd) |
- | - | - | - | 1,422 | 1,422 |
| Overdrafts and financial accrued expenses | - | 38 | 38 | - | 282 | 282 |
| Total | 115,575 | 10,855 | 126,430 | 262,741 | 12,022 | 274,763 |
As of June 30, 2023 and December 31, 2022, the fair value of payables to banks approximates their book value.
Considering the Group's financial resources, at the end of the first quarter 2023, it was decided to repay part of these financings in advance. In particular, the early repayment involved Euro 100,000 thousand of the Euro-denominated credit line granted to Industrie De Nora S.p.A. and USD 50,000 thousand of the USD-denominated credit line granted to De Nora Holdings US Inc. As a result, as of June 30, 2023, these credit lines remain open for Euro 80,000 thousand and USD 40,000 thousand, respectively, and are presented among the financial liabilities net of upfront fees and other charges directly related to the financings. These upfront fees and charges, paid at the loan agreement date, are presented in the financial statements as a reduction of the overall debt according to the amortized cost method.
The short-term credit lines with Sumitomo Mitsui Banking Co. and Sumitomo Mitsui Trust Bank are instead underwritten by De Nora Permelec Ltd. for a total of JPY 4 billion and utilized as of June 30, 2023, for JPY 1 billion (Euro 6,363 thousand) and JPY 700 million (Euro 4,454 thousand), respectively. The annual interest rates for these financings are 0.13% and 0.14%, respectively.
The following table details the composition of the Group's net financial indebtedness determined in accordance with the provisions of the CONSOB Communication DEM/6064293 of July 28, 2006, as amended by CONSOB Communication No. 5/21 of April 29, 2021 and in accordance with ESMA Recommendations contained in Guidelines 32-382-1138 of March 4, 2021 on disclosure requirements under the Prospectus Regulation (the "Net Financial Indebtedness - ESMA"). The table below includes figures as of June 30, 2023 and figures as of December 31, 2022:
| As of June 30, 2023 |
As of December 31, 2022 |
||
|---|---|---|---|
| (in ¤ thousands) | |||
| A | Cash | 128,222 | 170,667 |
| B | Cash equivalents | 4,285 | 3,462 |
| C | Other current financial assets | 11,289 | 159,036 |
| D | Liquidity (A + B + C) | 143,796 | 333,165 |
| E | Current financial debt | 10,992 | 12,666 |
| F | Current portion of non-current financial debt | 2,464 | 1,633 |
| G | Current financial indebtedness (E + F) | 13,456 | 14,299 |
| - Of which secured | - | - | |
| - Of which unsecured | 13,456 | 14,299 | |
| H | Net current Liquidity (G - D) | (130,340) | (318,866) |
| I | Non-current financial debt | 121,929 | 267,544 |
| J | Debt instruments | - | - |
| K | Non-current trade and other payables | - | - |
| L | Non-current financial indebtedness (I + J + K) | 121,929 | 267,544 |
| - Of which secured | - | - | |
| - Of which unsecured | 121,929 | 267,544 | |
| M | Net Financial Indebtedness (Net Liquidity) - ESMA (H + L) |
(8,411) | (51,322) |
The reconciliation between the Net Financial Indebtedness/(Net liquidity) - ESMA and the net financial indebtedness/(net liquidity) of the Group as
monitored by the Group (hereinafter the "Net Financial Indebtedness (Net liquidity) - De Nora") as of June 30, 2023 and December 31, 2022, is shown below:
| As of June 30, 2023 |
As of December 31, 2022 |
|||
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Net Financial Indebtedness (Net financial assets) - ESMA |
(8,411) | (51,322) | ||
| Fair value of derivatives hedging currency risks | (665) | (644) | ||
| Net Financial Indebtedness (Net financial assets) - De Nora |
(9,076) | (51,966) |
The reduction in Net Liquidity - ESMA as of June 30, 2023 compared to December 31, 2022, totalling Euro 42,911 thousand, is mainly attributable to the combined effect of the following factors:
(i) cash absorbed by investment activities in Property, plants and Equipment and Intangible assets equal to Euro 37,408 thousand in the six months ended June 30, 2023;
(ii) dividend distribution amounting to Euro 24,202 thousand;
(iii) the acquisition of the new company Shotec GmbH (price paid Euro 2,046 thousand net of cash acquired);
(iv) partially offset by the cash generated from operating activities amounting to Euro 23,539 thousand in the six months ended June 30, 2022.
For further details on the cash flows for the period, please refer to the consolidated cash flow statement.
The following table shows an analysis of the maturity of the Group's financial payables as of June 30, 2023:
| As of June 30, 2023 | |
|---|---|
| --------------------- | -- |
| Due date | |||||||
|---|---|---|---|---|---|---|---|
| Carrying amount |
Con tractual cash flows* |
0-12 months |
1-2 years |
2-3 years |
3-5 years |
Oltre 5 years |
|
| (in ¤ thousands) | |||||||
| Financial liabilities | |||||||
| Bank loans and borrowings |
126,430 | 127,667 | 10,855 | - | - | 116,812 | - |
| Lease payables | 8,818 | 8,818 | 2,464 | 2,185 | 1,258 | 1,384 | 1,527 |
| Other financial liabilities | 145 | 145 | 145 | - | - | - | - |
| Trade payables | 86,883 | 86,883 | 86,805 | 78 | - | - | - |
| Other payables | 86,269 | 86,269 | 83,991 | 2,278 | - | - | - |
| Total Financial liabilities | 308,545 | 309,782 | 184,260 | 4,541 | 1,258 | 118,196 | 1,527 |
* The difference between the total bank loans and borrowings and the contractual cash flows is due to the upfront Fees and other charges directly related to new financing agreements, which, paid on the date of stipulation of the loan agreement, are recognized in the statement of financial position as a decrease of the total amount payable.
| As of June 30, 2023 | As of December 31, 2022 | ||||
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Non-current | |||||
| Third parties | 78 | 83 | |||
| Total | 78 | 83 | |||
| Current | |||||
| Third parties | 85,802 | 79,665 | |||
| Related parties | 1,003 | 889 | |||
| Total | 86,805 | 80,554 | |||
| Total current payables | 86,883 | 80,637 |
As of June 30, 2023, trade payables, between current and non-current portions, amounted to Euro 86,883 thousand (Euro 80,637 thousand as of December 31, 2022).
This item mainly includes payables related to the purchase of goods and services, which are due within twelve months. It is deemed that the carrying amount of trade payables approximates their fair value.
Income tax payables as of June 30, 2023 amounted to Euro 16,439 thousand (Euro 10,970 thousand as of December 31, 2022).
| As of June 30, 2023 | As of December 31, 2022 | |
|---|---|---|
| (in ¤ thousands) | ||
| Non-current | ||
| Payables to employees | 1,485 | 1,357 |
| Tax payables | 258 | 263 |
| Customer prepayments | 4 | 4 |
| Other - third parties | 133 | 316 |
| Other - related parties | 398 | 444 |
| Total | 2,278 | 2,384 |
| Current | ||
| Customer prepayments | 30,688 | 34,482 |
| Advances from related parties | 20,592 | 33,024 |
| Accrued expenses and deferred income | 5,917 | 6,322 |
| Payables to employees | 16,145 | 16,493 |
| Social security payables | 2,939 | 2,524 |
| Withholding tax payables | 1,763 | 1,810 |
| VAT payables | 1,530 | 2,745 |
| Other tax payables | 2,435 | 1,963 |
| Other - third parties | 1,855 | 2,254 |
| Other - related parties | 127 | - |
| Total | 83,991 | 101,617 |
| Total Other payables | 86,269 | 104,001 |
Payables to employees relate to amounts accrued but not yet liquidated, such as vacations and bonuses.
In the context of business risks, the main risks identified, monitored and, as specified below, actively managed by the Group, are the following:
The Group's objective is to maintain, over time, a balanced management of its financial exposure, in order to guarantee a liability structure that is balanced with the composition of the assets on the statement of financial position and able to ensure the necessary operating flexibility through the use of the liquidity generated by current operations and the use of bank loans.
The Group considers risk monitoring and control systems a top priority to guarantee an efficient risk management. In line with this objective, the Group has adopted a risk management system with formalized strategies, policies and procedures to ensure the identification, measurement and control of individual risks at centralized level for the entire Group.
The purpose of the Group's risk management policies is to:
The Condensed Consolidated Half-Year Financial Statements do not include all of the risk management disclosures mentioned above, required by IFRS. For a detailed description of this information, please refer to Note "E - RISKS" in the 2022 Consolidated Financial Statements.
The tables below indicate the carrying amount of each financial asset and liability recognised in the statement of financial position.
| Investments Deri Loans and Other Total in financial vatives Level Level (in ¤ thousands) Notes recei financial carrying assets - at Fair 1 2 vables liabilities amount Fair value value Cash and cash equivalents 25 132,507 - - - 132,507 - - |
Level 3 - |
|---|---|
| 20/22 Trade and other 184,395 - - - 184,395 - - receivables /24 |
- |
| Financial assets including 19 1,829 13,904 673 - 163,646 13,904 673 derivatives |
- |
| Financial assets 318,731 13,904 673 - 480,548 13,904 673 |
- |
| Bank loans and borrowings 29 - - - 126,430 126,430 - - |
- |
| Lease payables 29 - - - 8,818 8,818 - - |
- |
| Other financial liabilities 29 - - - 145 145 8 - |
- |
| 30/31 Trade and other payables - - - 189,591 189,591 - - /32 |
- |
| Financial liabilities - - - 324,984 324,984 - 8 |
- |
| Classification and fair value as of December 31, 2022 |
Carrying amount | Fair value* | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (in ¤ thousands) | Notes | Loans and recei vables |
Invest ments in financial assets - Fair value |
Deri vatives at Fair value |
Other financial liabilities |
Total carrying amount |
Level 1 |
Level 2 |
Level 3 |
| Cash and cash equivalents | 25 | 174,129 | - | - | - | 174,129 | - | - | - |
| Trade and other receivables |
20/22 /24 |
170,418 | - | - | - | 170,418 | - | - | - |
| Financial assets including derivatives |
19 | 152,057 | 10,945 | 644 | - | 163,646 | 10,945 | 644 | - |
| Financial assets | 496,604 | 10,945 | 644 | - | 508,193 | 10,945 | 644 | - | |
| Bank loans and borrowings | 29 | - | - | - | 274,763 | 274,763 | - | - | - |
| Lease payables | 29 | - | - | - | 6,436 | 6,436 | - | - | - |
| Trade and other payables | 30/31 /32 |
- | - | - | 195,608 | 195,608 | - | - | - |
| Financial liabilities | - | - | - | 476,807 | 476,807 | - | - | - |
(*) Hierarchical scale of fair value.
The tables show the financial instruments recognized at fair value based on the valuation technique used. The different levels have been defined as described below:
During the periods under review, the Group did not make any changes regarding valuation techniques for financial instruments accounted for at fair value and did not reclassify financial assets between the different categories.
The financial instruments in these financial statements can be divided as follows:
| Level 1 | Level 2 | Level 3 | |||
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Fair value investments in financial assets | 13,904 | - | - | ||
| Net fair value of derivative instruments | - | 665 | - | ||
| Total | 13,904 | 665 | - |
| Level 1 | Level 2 | Level 3 | |||
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Fair value investments in financial assets | 10,945 | - | - | ||
| Net fair value of derivative instruments | - | 644 | - | ||
| Total | 10,945 | 644 | - |
During the periods under review, the Group did not make any changes regarding valuation techniques for financial
instruments recognised at fair value.
The information relating to business segments was prepared in accordance with the provisions of IFRS 8 "Operating segments" (hereinafter "IFRS 8"), which require that the provided information is consistent with the reports submitted to the highest operational decision-making level for the purpose of making decisions regarding the resources to be allocated to the sector and assessing the related results.
In particular, the Group identifies the following three operational business segments:
— Electrode Technologies: this includes the offering of metal electrodes (anodes and cathodes) coated with special catalysts, electrolyser components and systems, with multiple applications, in particular (i) for the production processes of chlorine and caustic soda; (ii) for the electronics industry and in the production of components for lithium battery production; (iii) for the refining of non-ferrous metals (nickel and cobalt); (iv) for the galvanic finishing industry; (v) for the cellulose and paper industry; and (vi) for the
infrastructure sector for corrosion prevention of reinforced concrete and metal structures;
In support of these business segments there are the so-called Corporate activities which costs are fully allocated to the segments.
The following tables show the economic information by business segment for the six-month periods ended June 30, 2023 and 2022:
| Half-year ended June 30, 2023 | |||||
|---|---|---|---|---|---|
| Group Total |
Electrode Technologies Segment |
Water Technologies Segment |
Energy Transition Segment |
||
| (in ¤ thousands) | |||||
| Revenues | 420,385 | 231,701 | 141,406 | 47,278 | |
| Royalties and commissions | (4,932) | (3,437) | (1,442) | (53) | |
| Cost of goods sold | (269,342) | (144,234) | (93,693) | (31,415) | |
| Selling expenses | (14,980) | (4,275) | (9,578) | (1,127) | |
| G&A expenses | (24,349) | (9,895) | (12,372) | (2,082) | |
| R&D expenses | (6,765) | (1,520) | (386) | (4,859) | |
| Other operating income (expenses) | 1,019 | (46) | 1,022 | 43 | |
| Corporate costs allocation to business segments |
(16,236) | (8,651) | (5,732) | (1,853) | |
| EBITDA | 84,800 | 59,643 | 19,225 | 5,932 | |
| Depreciation and amortization | (14,444) | ||||
| Impairment | (1,276) | ||||
| Provisions for risks and charges net of releases and utilizations |
(1,694) | ||||
| Operating profit - EBIT | 67,386 | ||||
| Share of profit of equity-accounted investees | 1,527 | ||||
| Finance income | 5,925 | ||||
| Finance expenses | (10,429) | ||||
| Profit before tax | 64,409 | ||||
| Income tax expense | (17,683) | ||||
| Profit/(loss) for the period | 46,726 |
| Half-year ended June 30, 2022 | |||||
|---|---|---|---|---|---|
| Group Total |
Electrode Technologies Segment |
Water Technologies Segment |
Energy Transition Segment |
||
| (in ¤ thousands) | |||||
| Revenues | 410,467 | 227,952 | 175,650 | 6,865 | |
| Royalties and commissions | (4,990) | (4,039) | (899) | (52) | |
| Cost of goods sold | (249,226) | (138,505) | (105,834) | (4,887) | |
| Selling expenses | (14,340) | (4,482) | (9,432) | (426) | |
| G&A expenses | (22,821) | (8,557) | (13,490) | (774) | |
| R&D expenses | (5,819) | (1,134) | (683) | (4,002) | |
| Other operating income (expenses) | 148 | 34 | 28 | 86 | |
| Corporate expenses allocation to business segments |
(14,460) | (7,758) | (6,460) | (242) | |
| Allocation MIP | (19,360) | (10,751) | (8,285) | (324) | |
| EBITDA | 79,599 | 52,760 | 30,595 | (3,756) | |
| Depreciation and amortization | (13,560) | - | - | - | |
| Impairment | (3,083) | - | - | - | |
| Provisions for risks (net of releases and utilizations) |
(107) | - | - | - | |
| Operating profit - EBIT | 62,849 | - | - | - | |
| Share of profit of equity-accounted investees | (5,551) | - | - | - | |
| Finance income | 21,483 | - | - | - | |
| Finance expenses | (17,799) | - | - | - | |
| Profit before tax | 60,982 | - | - | - | |
| Income tax expense | (21,249) | - | - | - | |
| Profit/(loss) for the period | 39,733 | - | - | - |
The following table shows investments by business segment as of June 30,
2023:
| Group Total |
Electrode Technologies Segment |
Water Technologies Segment |
Energy Transition Segment |
Activities Corporate |
|
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Half-year ended June 30, 2023 |
|||||
| Property, plant and equipment (**) |
33,453 | 13,003 | 682 | 14,714 | 5,053 |
| Intangible assets | 3,955 | 527 | 1,887 | 486 | 1,055 |
| Total Investment as of 2023 |
37,408 | 13,530 | 2,569 | 15,200 | 6,108 |
(**) It does not include increases related to rights of use of Property, Plant and Equipment.
In accordance with the provisions of IFRS 8, paragraph 34, it should also be noted that for the six-month periods ended June 30, 2023 and 2022, there was only one customer (tk nucera, associated company) belonging to the Electrode Technologies business and Energy Transition business segments that generated revenues exceeding 10% of the total, amounting to Euro 108,066
thousand and Euro 64,668 thousand, in the six-month periods ended June 30, 2023 and 2022 respectively.
The table below shows the non-current assets, other than financial assets and deferred tax assets, by geographical area at June 30, 2023 and at December 31, 2022, allocated on the basis of the country in which the assets are located.
| Italy | EMEIA, excluding Italy |
APAC | AMS | Total | |
|---|---|---|---|---|---|
| (in ¤ thousands) | |||||
| Intangible assets | 8,104 | 5,531 | 14,751 | 98,041 | 126,427 |
| Property, plant and equipment | 42,861 | 32,750 | 69,069 | 60,455 | 205,135 |
| Other receivables | 10,571 | 37 | 770 | 85 | 11,463 |
| Total | 61,536 | 38,318 | 84,590 | 158,581 | 343,025 |
| As of December, 2022 | |||||
|---|---|---|---|---|---|
| Italy | EMEIA, excluding Italy |
APAC | AMS | Total | |
| (in ¤ thousands) | |||||
| Intangible assets | 8,482 | 4,570 | 17,263 | 101,237 | 131,552 |
| Property, plant and equipment | 26,903 | 27,471 | 69,725 | 60,078 | 184,177 |
| Other receivables | 8,169 | 15 | 783 | 63 | 9,030 |
| Total | 43,554 | 32,056 | 87,771 | 161,378 | 324,759 |
Transactions with related parties, as defined by IAS 24 - Related Party Disclosures, mainly relate to commercial, administrative and financial transactions. They are carried out as part of ordinary operations, within the scope of the core business of each party and take place on an arm's length basis. In particular, the Group has relations with the following related parties:
and its subsidiaries (the "Associates");
The table below details the statement of financial position values referring to the related party transactions at June 30, 2023 and December 31, 2021 (excluding the transactions with Top Management, that are shown in the next section):
| (in ¤ thousands) | Parent Company |
Associates | Other - related parties |
Total | Total item in financial statements |
Percentage on financial statements item |
|---|---|---|---|---|---|---|
| Other non-current receivables |
||||||
| As of June 30, 2023 | - | - | 52 | 52 | 11,463 | 0.5% |
| As of December 31, 2022 | - | - | 52 | 52 | 9,030 | 0.6% |
| Current tax assets | ||||||
| As of June 30, 2023 | 376 | - | - | 376 | 6,380 | 5.9% |
| As of December 31, 2022 | 376 | - | - | 376 | 4,893 | 7.7% |
| Current trade receivables | ||||||
| As of June 30, 2023 | 10 | 20,989 | 588 | 21,287 | 135,466 | 15.9% |
| As of December 31, 2022 | 17 | 7,250 | - | 7,267 | 123,421 | 5.9% |
| Other receivables | ||||||
| As of June 30, 2023 | - | - | 52 | 52 | 31,086 | 0.2% |
| As of December 31, 2022 | - | - | - | - | 33,074 | 0% |
| Other non-current payables | ||||||
| As of June 30, 2023 | - | 398 | - | 398 | 2,278 | 17.5% |
| As of December 31, 2022 | - | 444 | - | 444 | 2,384 | 18.7% |
| Current trade payables | ||||||
| As of June 30, 2023 | 30 | 797 | 175 | 1,003 | 86,805 | 1.2% |
| As of December 31, 2022 | 25 | 775 | 89 | 889 | 80,554 | 1,1% |
| Other current payables | ||||||
| As of June 30, 2023 | - | 20,592 | 127 | 20,719 | 83,991 | 24.7% |
| As of December 31, 2022 | - | 33,024 | - | 33,024 | 101,617 | 32.5% |
Balance sheet amounts with the Parent Company mainly relate to current tax assets of Euro 376 thousand, unchanged compared to the previous year and related to the national tax consolidation agreement that was in place between the Parent Company Federico De Nora S.p.A, Industrie De Nora S.p.A., De Nora Italy S.r.l., De Nora Water Technology Italy S.r.l. and Capannoni S.r.l. discontinued in 2022 following the listing of Industrie De Nora S.p.A..
Balance sheet amounts with Associated Companies mainly correspond to current trade receivables equal to Euro 20,989 thousand and Euro 7,250 thousand, respectively at June 30, 2023 and at December 31, 2022, mainly concerning the sale of electrodes under the
supply "Tool Manufacturing and Services Agreement" initially stipulated on April 1, 2015 with tk nucera and subsequently amended.
Other current payables to Associated Companies amounting to Euro 20,592 thousand and Euro 33,024 thousand as of June 30, 2023 and December 31, 2022, respectively, mainly related to advances obtained with reference to the aforementioned supply contract.
The table below shows the detail of the economic values relating to transactions with related parties for the six-month periods ended June 30, 2023 and 2022 (excluding the transactions with Top Management, that are shown in the next section):
| (in ¤ thousands) | Parent Company |
Associates | Other - related parties |
Total | Total item in financial statements |
Percentage on financial statements item |
|---|---|---|---|---|---|---|
| Revenues | ||||||
| First half-year ended June 30, 2023 | - | 108,066 | 595 | 108,661 | 420,384 | 25.8% |
| First half-year ended June 30, 2022 | - | 64,668 | - | 64,668 | 410,467 | 15.8% |
| Other income | ||||||
| First half-year ended June 30, 2023 | 27 | 314 | 1 | 342 | 3,372 | 10.1% |
| First half-year ended June 30, 2022 | 25 | 364 | - | 389 | 2,540 | 15.3% |
| Consumption of raw materials, consumables, supplies and goods |
||||||
| First half-year ended June 30, 2023 | - | 10 | 181 | 191 | 198,029 | 0.1% |
| First half-year ended June 30, 2022 | - | 488 | - | 488 | 189,659 | 0.3% |
| Costs for services | ||||||
| First half-year ended June 30, 2023 | 30 | 64 | 912 | 1,006 | 86,586 | 1.2% |
| First half-year ended June 30, 2022 | 41 | 54 | 387 | 482 | 69,839 | 0.7% |
| Personnel expenses | ||||||
| First half-year ended June 30, 2023 | - | - | 1 | 1 | 72,450 | 0% |
| First half-year ended June 30, 2022 | - | - | - | - | 83,109 | 0% |
The economic relations with the Associated Companies mainly relate to revenues, amounting to Euro 108,666 thousand and Euro 64,668 thousand, for the six-month periods ended June 30, 2023 and 2022, respectively, mainly concerning the sale of electrodes under the "Tool Manufacturing and Services Agreement" mentioned above.
The costs for services to Other Related Parties include remunerations to members of the Board of Directors amounting to Euro 641 thousand in the first six months of 2023 (Euro 340 thousand in the first six months of 2022), of which Euro 127 thousand still unpaid as of June 30, 2023.
In addition to the balance sheet and income statement amounts with related parties presented in the tables above, the Group has recognised compensation to Top Management for the amount of Euro 2,635 thousand and
Euro 20,204 thousand for the six-month periods ended June 30, 2023 and 2022, respectively. The payable in relation to Top Management amounts to Euro 845 thousand.
The table below shows the breakdown of the aforementioned compensation under the cost categories identified by IAS 24.
| 2023 | 2022 | |||
|---|---|---|---|---|
| (in ¤ thousands) | ||||
| Short-term employee benefits | 2,449 | 2,341 | ||
| Post-employment benefits | 186 | 184 | ||
| Other long-term benefits | - | - | ||
| Termination benefits | - | - | ||
| Share-based payment | - | 17,679 | ||
| Total | 2,635 | 20,204 |
Top Management compensation represents 3.6% of the total personnel expense for the six-month period ended June 30, 2023 (24.3% for the six-month period ended June 30, 2022).
In the period under analysis, there are no non-recurring events and operations for which information are required according to Consob Communication n. DEM/6064293 of July 28, 2006.
The Company has not undertaken any commitments that have not been recorded in the statement of financial position, except for some orders for the purchase of capital assets amounting to around Euro 39 million at June 30, 2023.
The Group has not assumed any contingent liabilities that have not been recognised in the financial statements.
The reduction in the percentage of Industrie De Nora S.p.A. investment in tk nucera (dilutive effect) and the capital gain resulting from the exercise of the greenshoe option will determine the recognition in the consolidated financial statements of a total income of about Euro 130 million.
— The Italian Ministry for Enterprises and Made in Italy and De Nora Italy Hydrogen Technologies S.r.l. ("DNIHT") have signed the decree granting DNHIT an amount of Euro 32,250,000.00 in the form of reimbursement of expenses incurred within the fund established by the Ministry for the financial support of the enterprises participating in the implementation of Important Projects of Common European Interest (IPCEI Fund). The funding granted by the Ministry is aimed at the execution of the Italian Gigafactory project by DNHIT in joint venture with Snam S.p.A. The amount granted by the Ministry is financed through PNRR resources – the National Recovery and Resilience Plan (PNRR M2C2- I5.2) - Mission 2 'Green Revolution and Ecological Transition', Component 2 'Renewable Energy, Hydrogen, Grid and Sustainable Mobility', Investment 5.2 'Hydrogen' under the ownership of the Ministry of Ecological Transition. DNHIT is eligible to receive up to Euro 63,206,000 of public funding, following the additional resources which might become available in the framework of the support to the IPCEI Hydrogen 1.
Milan, July 31, 2023
On behalf of the Board of Directors The Managing Director Paolo Enrico Dellachà
in accordance with Article 81-ter of CONSOB Regulation No. 11971 of May 14, 1999 and subsequent amendments and additions.
The undersigned Paolo Enrico Dellachà and Massimiliano Moi respectively Chief Executive Officer and Principal Financial Officer of Industrie De Nora S.p.A. (the Company) declare, also considering the provisions of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:
No significant issues have arisen in this regard.
The undersigned also certify that the Condensed Consolidated Half-Year Financial Statements as of June 30, 2023:
The interim management provides a reliable analysis of the significant events occurred in the first six months of the year and their incidence on the condensed consolidated half-year financial statements, as well as a description of the principal risks and uncertainties for the remaining six months of the year. The interim management report also includes a reliable analysis of the information regarding relevant transactions with related parties.
Milan, July 31 2023
Paolo Enrico Dellachà Chief Executive Officer
Massimiliano Moi Principal Financial Officer
To the shareholders of Industrie De Nora SpA
We have reviewed the accompanying condensed consolidated half-year financial statements of Industrie De Nora SpA and its subsidiaries (the De Nora Group) as of 30 June 2023, comprising the interim consolidated statement of financial position, interim consolidated income statement, interim consolidated statement of comprehensive income, interim statement of changes in the net consolidated equity, interim consolidated statement of cashflows and related notes. The directors of Industrie De Nora SpA are responsible for the preparation of the condensed consolidated half-year financial statements in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on these condensed consolidated half-year financial statements based on our review.
We conducted our work in accordance with the criteria for a review recommended by Consob in Resolution 10867 of 31 July 1997. A review of condensed consolidated half-year financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than a fullscope audit conducted in accordance with International Standards on Auditing (ISA Italia) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the condensed consolidated half-year financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated half-year financial statements of De Nora Group as of 30 June 2023 are not prepared, in all material respects, in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union.
Milan, 1 August 2023
PricewaterhouseCoopers SpA
Signed by Francesco Ronco (Partner)
This report has been translated into English from the Italian original solely for the convenience of international readers
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