Quarterly Report • Nov 14, 2023
Quarterly Report
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Interim report at 30.09.2023
These financial statements were approved by the Board of Directors on 14 November 2023 and it is available on the Internet at the address www.emakgroup.com
Emak S.p.A. • Via Fermi, 4 • 42011 Bagnolo in Piano (Reggio Emilia) ITALY Tel. +39 0522 956611 • Fax +39 0522 951555 • www.emakgroup.it • www.emakgroup.com Capitale Sociale Euro 42.623.057,10 Interamente versato • Registro delle Imprese N. 00130010358 • R.E.A. 107563 Registro A.E.E. IT08020000000632 • Registro Pile/Accumulatori IT09060P00000161 Meccanografico RE 005145 • C/C Postale 11178423 • Partita IVA 00130010358 • Codice Fiscale 00130010358
| Organizational chart of Emak Group at 30 September 2023 3 |
|---|
| Corporate Bodies of Emak S.p.A. 4 |
| Main economic and financial figures for Emak Group 5 |
| Directors' report 6 |
| Comments on economic figures 7 |
| Comment to consolidated statement of financial position 8 |
| Highlights of the consolidated financial statement broken down by operating segment for the first nine months |
| 2023 11 |
| Comments on interim results by operating segment 12 |
| Business outlook 13 |
| Subsequent events 13 |
| Other information 13 |
| Definitions of alternative performance indicators 14 |
| Consolidated Income Statement 15 |
| Statement of consolidated financial position 16 |
| Statement of changes in consolidated equity for the Emak Group at 31.12.2022 and at 30.09.2023 17 |
| Comments on the financial statements 18 |
| Declaration of the manager in charge of preparing the accounting statements pursuant to the rules of Article |
| 154-bis, paragraph 2 of Legislative Decree no. 58/1998 22 |
The Ordinary General Meeting of the Shareholders of the Parent Company, Emak S.p.A. on 29 April 2022 appointed the Board of Directors and the Board of Statutory Auditors for the financial years 2022-2024.
| Board of Directors | |
|---|---|
| Non-executive Chairman | Massimo Livatino |
| Deputy Chairman and Chief Executive Officer | Luigi Bartoli |
| Executive Director | Cristian Becchi |
| Independent Director | Silvia Grappi |
| Elena Iotti | |
| Alessandra Lanza | |
| Directors | Francesca Baldi |
| Ariello Bartoli | |
| Paola Becchi | |
| Giuliano Ferrari | |
| Marzia Salsapariglia | |
| Vilmo Spaggiari | |
| Paolo Zambelli | |
| Risk Control and Sustainability Committee; Remuneration | |
| Committee, Related Party Transactions Committee, |
|
| Nomination Committee | |
| Chairman | Elena Iotti |
| Components | Alessandra Lanza |
| Silvia Grappi | |
| Manager in charge of preparing the accounting statements | Roberto Bertuzzi |
| Supervisory Body as per Legislative Decree 231/01 | |
| Chairman | Sara Mandelli |
| Acting member | Marianna Grazioli |
| Board of Statutory Auditors | |
| Chairman | Stefano Montanari |
| Acting auditors | Roberta Labanti |
| Livio Pasquetti | |
| Alternate auditor | Rossana Rinaldi |
| Giovanni Liberatore | |
| Independent Auditor | Deloitte & Touche S.p.A. |
| Year 2022 | 3 Q 2023 | 3 Q 2022 | 9 months 2023 | 9 months 2022 | |
|---|---|---|---|---|---|
| 605,723 | Revenues from sales | 118,785 | 124,060 | 449,941 | 492,265 |
| 76,644 | EBITDA before non ordinary income/expenses (*) | 11,138 | 14,631 | 60,547 | 68,676 |
| 76,079 | EBITDA (*) |
10,833 | 14,494 | 59,675 | 68,457 |
| 46,755 | EBIT | 3,498 | 7,962 | 38,324 | 49,190 |
| 31,165 | Net profit | 751 | 5,401 | 22,809 | 37,147 |
| Year 2022 | 3 Q 2023 | 3 Q 2022 | 9 months 2023 | 9 months 2022 | |
|---|---|---|---|---|---|
| 16,429 | Investment in property, plant and equipment | 3,725 | 3,518 | 11,939 | 9,794 |
| 5,303 | Investment in intangible assets | 1,341 | 1,409 | 3,913 | 3,704 |
| 60,489 | Free cash flow from operations (*) |
8,086 | 11,933 | 44,160 | 56,414 |
| 31.12.2022 | 30.09.2023 | 30.09.2022 | |
|---|---|---|---|
| 454,292 | Net capital employed (*) | 475,538 | 473,876 |
| (177,305) | Net debt (*) | (186,498) | (181,627) |
| 276,987 | Total equity | 289,040 | 292,249 |
| Year 2022 | 3 Q 2023 | 3 Q 2022 | 9 months 2023 | 9 months 2022 | |
|---|---|---|---|---|---|
| 12.6% | EBITDA / Net sales (%) | 9.1% | 11.7% | 13.3% | 13.9% |
| 7.7% | EBIT/ Net sales (%) | 2.9% | 6.4% | 8.5% | 10.0% |
| 5.1% | Net profit / Net sales (%) | 0.6% | 4.4% | 5.1% | 7.5% |
| 10.3% | EBIT / Net capital employed (%) | 8.1% | 10.4% | ||
| 0.64 | Net debt / Equity | 0.65 | 0.62 | ||
| 2,284 | Number of employees at period end | 2,392 | 2,257 |
| 31.12.2022 | 30.09.2023 | 30.09.2022 | |
|---|---|---|---|
| 1.17 | Official price (€) | 0.96 | 0.89 |
| 2.13 | Maximum share price in period (€) | 1.35 | 2.13 |
| 0.88 | Minimum share price in period (€) | 0.95 | 0.88 |
| 191 | Stockmarket capitalization (€ / million) | 157 | 146 |
| 163,934,835 | Number of shares comprising share capital | 163,934,835 | 163,934,835 |
| 163,451,400 | Average number of outstanding shares | 162,837,602 | 163,537,602 |
(*) See section "definitions of alternative performance indicators"
The war between Ukraine and Russia has had a significant impact on the economy and finances of both countries involved, as well as other nations and the global economic system as a whole.
The Group continues to monitor the evolution of the situation resulting the invasion of the Ukrainian territory by the Russian Federation and to implement the necessary actions to mitigate the risks and direct and indirect impacts on the Group.
Regarding the direct impacts, the Group operates in Ukraine mainly through a subsidiary, Epicenter Llc, while it distributes its products through independent customers in other areas impacted by the conflict: particularly Russia and Belarus.
Epicenter Llc, located in Kiev (Ukraine), 100% controlled by Emak S.p.A., since the beginning of the war, has implemented all the necessary measures to preserve the safety of its employees in the first instance and, therefore, integrity of company assets, mainly represented by product inventories. The subsidiary, which has 22 employees, generated a turnover of € 4.3 million in the first nine months of 2023 (€ 4.7 million in full year 2022).
The total assets of the Ukrainian subsidiary as of 30 September 2023 amount to € 4.1 million, mainly represented by inventories, trade receivables and cash on hand.
The local management continues to monitor market exposure, the integrity of the product inventory and the evolution of the situation to guarantee the continuity of the business under the safest condition. Excluding the activities of the trading subsidiary, the Ukrainian market is marginal for the Group, with sales in the first nine months of 2023 amounting to of approximately € 0.5 million (€ 0.4 million in the full year 2022) and direct exposure of receivables on the Ukrainian market as of 30 September 2023, amounted to approximately € 14 thousand.
The Group's revenues achieved in the Russian and Belarusian markets represent 1.9% in the first nine months 2023 against 2% in the full year 2022. The exposure at the end of September amounts to about € 0.3 million, decreased compared to previous periods.
As for the supply chain, there are no impacts related to the current conditions.
The Group systematically monitors the regulatory and sanction framework related to the markets and parties affected by the conflict, complying with the most scrupulous checks of the counterparties to limit regulatory risks, the continuous assessment of the geopolitical framework aims to prevent potential negative impacts of a commercial and financial nature.
Compared to 31 December 2022, the company Bestway LLC entered the scope of consolidation following its acquisition on February 1, 2023, by Valley LLP. On March 21, 2023 Bestway was merged by incorporation into Valley LLP.
Compared to 30 September 2022, the Spanish company Trebol Maquinaria Y Suministros S.A., consolidated starting from 1 October 2022, entered the scope of consolidation.
We also note the change in the percentage investment in Lavorwash S.p.A., which went from 98.45% to 98.91% following the purchase of shares from some minority shareholders.
The turnover of third quarter 2023 amounts to € 118,785 thousand, compared to € 124,060 thousand of the same period last year, a decrease of 4.25%, however, the decrease is less than the figure for the first half of the year.
In the first nine months 2023 Emak Group achieved a consolidated turnover of € 449,941 thousand, compared to € 492,265 thousand of last year, a decrease of 8.6%. This decrease is due to an organic decline in sales for 13.9% and the negative effect of foreign exchange translation for 0.5%, partially offset by the positive effects of the change in the scope of consolidation for 5.8%.
The decline in revenues, after the strong growth trend recorded in the last two years, is linked to some macroeconomic dynamics such as the inflation and interest rates trends and their impact on customers' purchasing power, in addition to the progressive change of consumption preferences resulting from the removal of restrictions.
EBITDA of third quarter 2023 amounts to € 10,833 thousand, compared to € 14,494 thousand in the corresponding quarter of last year.
EBITDA for the first nine months of 2023 amounts to € 59,675 thousand (13.3% of revenues) compared to € 68,457 thousand (13.9% of revenues) in the corresponding period of previous year.
During nine months 2023, non-ordinary expenses were recorded for € 872 thousand (in the same period 2022 nonordinary expenses for € 219 thousand were recorded).
Ebitda before non-ordinary expenses and revenues is equal to € 60,547 thousand (13.5% of revenues) compared to € 68,676 thousand of the same period last year (14% of revenues).
The application of the IFRS 16 principle has resulted in a positive effect on the Ebitda of the first nine months 2023 for € 6,703 thousand, against to a positive effect of € 5,393 thousand in the nine months 2022.
Ebitda for the nine months benefited from the change in the area for € 2,992 thousand and from the implementation of the increase in sales prices, while it was affected by the decrease in sales volumes and the increase in commercial costs partly offset by the reduction in transport costs.
The increase in personnel costs, equal to € 2,426 thousand, compared to the same period of 2022, is due to the change in area (€3,361 thousand). In the same area, the reduction in personnel costs is attributable to a lower use of temporary staff due to the reduction in production volumes and the use of social safety nets by some Group companies.
The average number of resources employed by the Group, also considering temporary workers employed during the period and the different scope of consolidation, was 2,515 compared to 2,497 in the same period of last year.
Operating result of third quarter 2023 is equal to € 3,498 thousand, compared to € 7,962 thousand in the corresponding quarter of last year.
Operating result for the first nine months of 2023 is € 38,324 thousand, with an incidence of 8.5% on revenues compared to € 49,190 thousand (10% of revenues) in the corresponding period of previous year.
Depreciation and amortization are € 21,351 thousand compared to € 19,267 thousand in the same period of previous year.
Non-annualized operating result as a percentage of net capital employed is 8.1% compared to 10.4% of the same period of the previous year.
Net Profit of third quarter 2023 is equal to € 751 thousand compared to € 5,401 thousand of the same period last year.
Net Profit for the first nine months of 2023 is € 22,809 thousand, compared to € 37,147 thousand in the same period of previous year.
The item "financial income", equal to € 2,851 thousand, includes € 1,792 thousand of income on valuation and fixing of derived for hedging interest rate.
The item "financial expenses" equal to € 11,708 thousand (of which € 8,687 thousand of interests to banks), increased compared to € 4,711 thousand of the same period 2022, mainly due to the increase in market interest rates.
Exchange currencies result in the first nine months 2023 is positive for € 932 thousand, compared to a positive value of € 2,901 thousand for the same period of the previous year.
Exchange rate management was positively affected by the revaluation of the Brazilian Real against the Euro and of the Euro against the Chinese Renminbi.
The item "Income from/(expenses on) equity investment", equal to a positive value of € 2 thousand, relates to the valuation according to the equity method of the investment in the associated company Raw Power S.r.l.
The effective tax rate is 25% a decrease compared to 26.3% in the same period of the previous year mainly due to the different distribution of the taxable income between the countries in which the Group operates and as a result of some tax benefits that came into effect from the current financial year.
| €/000 | 30.09.2023 | 30.09.2022 |
|---|---|---|
| 222,168 | 206,553 | |
| 267,323 | ||
| 475,538 | 473,876 | |
| 284,631 | 288,542 | |
| 4,409 | 3,707 | |
| (186,498) | (181,627) | |
| Net non-current assets () Net working capital () Total net capital employed () Equity attributable to the Group Equity attributable to non controlling interests Net debt () |
253,370 |
(*) See section "definitions of alternative performance indicators"
In the first nine months 2023 the Group invested € 15,852 thousand in tangible and intangible assets, as follows:
| 31.12.2022 | €/000 | 30.09.2023 | 30.09.2022 |
|---|---|---|---|
| 4,939 | Innovation technological of products | 3,787 | 3,688 |
| 8,223 | Production capacity and process innovation | 6,283 | 4,090 |
| 3,559 | Computer network system | 3,081 | 2,375 |
| 3,155 | Industrial buildings | 1,401 | 1,853 |
| 1,856 | Other investments | 1,300 | 1,492 |
| 21,732 | Total | 15,852 | 13,498 |
| 31.12.2022 | €/000 | 30.09.2023 | 30.09.2022 |
|---|---|---|---|
| 14,742 | Italy | 10,067 | 8,371 |
| 2,595 | Europe | 1,080 | 1,520 |
| 2,816 | Americas | 3,546 | 2,245 |
| 1,579 | Asia, Africa and Oceania | 1,159 | 1,362 |
| 21,732 | Total | 15,852 | 13,498 |
Net working capital, compared to 31 December 2022, increased by € 5,683 thousand, rising from € 247,687 thousand to € 253,370 thousand.
The following table shows the change in net working capital at 30 September 2023 compared with the same period of the previous year:
| €/000 | 9M 2023 | 9M 2022 |
|---|---|---|
| Net working capital at 01 January | 247,687 | 198,085 |
| Increase/(decrease) in inventories | (21,289) | 16,854 |
| Increase/(decrease) in trade receivables | (3,843) | 2,417 |
| (Increase)/decrease in trade payables | 20,284 | 46,905 |
| Change in scope of consolidation | 12,302 | - |
| Other changes | (1,771) | 3,062 |
| Net working capital at 30 September | 253,370 | 267,323 |
The positive trend of reduction in net working capital continued in the third quarter. As of 30 September, the value is significantly lower than the same period and decreasing, for the same area, also compared to the December 2022 figure. The normalization of the level of inventories, a consequence of the initiatives carried out starting from the second half of 2022 and the decline in trade receivables due to lower sales, made it possible to balance the negative effect deriving from the reduction in trade payables linked to the lower purchases made in the period.
Net negative financial position amounts to € 186,498 thousand at 30 September 2023, compared to € 177,305 thousand at 31 December 2022 and € 181,627 thousand at 30 September 2022.
The following table shows the movements in the net financial position in the first nine months 2023 compared with the same period last year:
| ARKE ЖR |
|---|
| CERTIFIED |
| €/000 | 9M 2023 | 9M 2022 | |
|---|---|---|---|
| Opening NFP | (177,305) | (144,269) | |
| Net profit | 22,809 | 37,147 | |
| Amortization, depreciation and impairment losses | 21,351 | 19,267 | |
| Cash flow from operations, excluding changes in operating assets and liabilities |
44,160 | 56,414 | |
| Changes in operating assets and liabilities | 8,075 | (61,320) | |
| Cash flow from operations | 52,235 | (4,906) | |
| Changes in investments and disinvestments | (16,584) | (13,149) | |
| Changes rights of use IFRS 16 | (10,333) | (2,231) | |
| Dividends cash out | (10,628) | (12,373) | |
| Other equity changes | (220) | - | |
| Changes from exchange rates and translation reserve | (3,359) | (4,699) | |
| Change in scope of consolidation | (20,304) | - | |
| Closing NFP | (186,498) | (181,627) |
Cash flow from operations is equal to € 44,160 thousand compared to € 56,414 thousand in the same period of the previous financial year. Cash flow from operations is positive for € 52,235 thousand compared to a negative value of € 4,906 thousand in the same period of the previous financial year. The acquisition of Bestway resulted in a higher debt of € 20,304 thousand related to the purchase price and approximately € 3,850 thousand linked to the accounting of the respective lease payments in accordance with the IFRS 16 accounting standard.
Details of the net financial position is analysed as follows:
| (€/000) | 30.09.2023 | 31.12.2022 | 30.09.2022 |
|---|---|---|---|
| A. Cash | 91,499 | 86,477 | 86,185 |
| B. Cash equivalents | - | - | - |
| C. Other current financial assets | 2,021 | 2,745 | 2,432 |
| D. Liquidity funds (A+B+C) | 93,520 | 89,222 | 88,617 |
| E. Current financial debt | (15,468) | (22,956) | (35,493) |
| F. Current portion of non-current financial debt | (58,381) | (60,694) | (61,803) |
| G. Current financial indebtedness (E + F) | (73,849) | (83,650) | (97,296) |
| H. Net current financial indebtedness (G - D) | 19,671 | 5,572 | (8,679) |
| I. Non-current financial debt | (207,408) | (184,028) | (174,081) |
| J . Debt instruments | - | - | - |
| K. Non-current trade and other payables | - | - | - |
| L. Non-current financial indebtedness (I + J + K) | (207,408) | (184,028) | (174,081) |
| M. Total financial indebtedness (H + L) (ESMA) | (187,737) | (178,456) | (182,760) |
| N. Non current financial receivables | 1,239 | 1,151 | 1,133 |
| O. Net financial position (M-N) | (186,498) | (177,305) | (181,627) |
| Effect IFRS 16 | 42,852 | 38,039 | 37,426 |
| Net financial position without effect IFRS 16 | (143,646) | (139,266) | (144,201) |
Net financial position at 30 September 2023 includes actualized financial liabilities related to the payment of future rental and lease payments, in application of IFRS 16 standard, equal to overall € 42,852 thousand, of which € 7,368 thousand are due within 12 months while at 31 December 2022 they amounted to a total of € 38,039 thousand, of which € 6,357 thousand are due within 12 months.
Current financial indebtedness mainly includes:
Financial liabilities for the purchase of the remaining minority shares are equal to € 7,661 thousand, of which € 6,527 thousand in the medium to long term, related to the following companies:
Total equity is equal to € 289,040 thousand against € 276,987 thousand at 31 December 2022. Earnings per share at 30 September 2023 is equal to 0.136 Euro compared to 0.222 Euro in the same period of previous year.
At December 31, 2022, the Company held 1,097,233 treasury shares in portfolio for an equivalent value of € 2,835 thousand.
During first nine months 2023 there were no movements in the consistency of the number of treasury shares.
| OUTDOOR POWER EQUIPMENT |
PUMPS AND HIGH PRESSURE WATER JETTING |
COMPONENTS AND ACCESSORIES |
Other not allocated / Netting |
Consolidated | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| €/000 | 30.09.2023 30.09.2022 30.09.2023 30.09.2022 30.09.2023 30.09.2022 30.09.2023 30.09.2022 30.09.2023 | 30.09.2022 | ||||||||
| Sales to third parties | 137,470 | 169,594 | 193,155 | 192,540 | 119,316 | 130,131 | 449,941 | 492,265 | ||
| Intersegment sales | 319 | 297 | 2,529 | 2,829 | 5,988 | 7,977 | (8,836) | (11,103) | ||
| Revenues from sales | 137,789 | 169,891 | 195,684 | 195,369 | 125,304 | 138,108 | (8,836) | (11,103) | 449,941 | 492,265 |
| Ebitda (*) | 12,468 | 13,431 | 27,645 | 29,983 | 21,131 | 27,457 | (1,569) | (2,414) | 59,675 | 68,457 |
| Ebitda/Total Revenues % | 9.0% | 7.9% | 14.1% | 15.3% | 16.9% | 19.9% | 13.3% | 13.9% | ||
| Ebitda before non ordinary expenses (*) | 12,553 | 13,490 | 28,170 | 30,061 | 21,393 | 27,539 | (1,569) | (2,414) | 60,547 | 68,676 |
| Ebitda before non ordinary expenses/Total Revenues % | 9.1% | 7.9% | 14.4% | 15.4% | 17.1% | 19.9% | 13.5% | 14.0% | ||
| Operating result | 6,661 | 7,315 | 19,551 | 23,666 | 13,681 | 20,623 | (1,569) | (2,414) | 38,324 | 49,190 |
| Operating result/Total Revenues % | 4.8% | 4.3% | 10.0% | 12.1% | 10.9% | 14.9% | 8.5% | 10.0% | ||
| Net financial expenses (1) | (7,923) | 1,207 | ||||||||
| Profit befor taxes | 30,401 | 50,397 | ||||||||
| Income taxes | (7,592) | (13,250) | ||||||||
| Net profit | 22,809 | 37,147 | ||||||||
| Net profit/Total Revenues% | 5.1% | 7.5% | ||||||||
| (1) Net financial expenses includes the amount of Financial income and expenses, Exchange gains and losses and the amount of the Income from equity investment | ||||||||||
| STATEMENT OF FINANCIAL POSITION | 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 | 31.12.2022 | ||||||||
| Net debt (*) | 7,455 | 21,295 | 129,405 | 108,992 | 49,638 | 47,018 | 0 | 0 | 186,498 | 177,305 |
| Shareholders' Equity | 188,301 | 184,363 | 103,119 | 98,689 | 75,786 | 72,228 | (78,166) | (78,293) | 289,040 | 276,987 |
| Total Shareholders' Equity and Net debt | 195,756 | 205,658 | 232,524 | 207,681 | 125,424 | 119,246 | (78,166) | (78,293) | 475,538 | 454,292 |
| Net non-current assets (2) (*) | 121,826 | 122,922 | 117,253 | 101,679 | 58,338 | 57,242 | (75,249) | (75,238) | 222,168 | 206,605 |
| Net working capital (*) | 73,930 | 82,736 | 115,271 | 106,002 | 67,086 | 62,004 | (2,917) | (3,055) | 253,370 | 247,687 |
| Total net capital employed (*) | 195,756 | 205,658 | 232,524 | 207,681 | 125,424 | 119,246 | (78,166) | (78,293) | 475,538 | 454,292 |
| (2) The net non-current assets of the Outdoor Power Equipment area includes the amount of Equity investments for 76,074 thousand Euro | ||||||||||
| OTHER STATISTICS | 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 31.12.2022 30.09.2023 | 31.12.2022 | ||||||||
| Number of employees at period end | 733 | 747 | 958 | 873 | 692 | 655 | 9 | 9 | 2,392 | 2,284 |
| OTHER INFORMATIONS | 30.09.2023 30.09.2022 30.09.2023 30.09.2022 30.09.2023 30.09.2022 30.09.2023 30.06.2022 30.09.2023 | 30.09.2022 | ||||||||
| Amortization, depreciation and impairment losses | 5,807 | 6,116 | 8,094 | 6,317 | 7,450 | 6,834 | 21,351 | 19,267 | ||
| Investment in property, plant and equipment and in intangible assets |
3,574 | 3,025 | 6,870 | 4,788 | 5,408 | 5,685 | 15,852 | 13,498 |
(*) See section "Definitions of alternative performance indicators"
The table below shows the breakdown of "Sales to third parties" in the third quarter and in first nine months of 2023 by business sector and geographic area, compared with the same period last year.
Third quarter turnover:
| OUTDOOR POWER EQUIPMENT | PUMPS AND HIGH PRESSURE WATER JETTING |
COMPONENTS AND ACCESSORIES |
CONSOLIDATED | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €/000 | 3Q 2023 | 3Q 2022 | Var. % | 3Q 2023 | 3Q 2022 | Var. % | 3Q 2023 3Q 2022 | Var. % | 3Q 2023 3Q 2022 | Var. % | ||
| Europe | 25,920 | 27,864 | (7.0) | 22,284 | 24,570 | (9.3) | 18,048 | 16,070 | 12.3 | 66,252 | 68,504 | (3.3) |
| Americas | 1,387 | 1,947 | (28.8) | 24,853 | 21,139 | 17.6 | 12,808 | 17,524 | (26.9) | 39,048 | 40,610 | (3.8) |
| Asia, Africa and Oceania | 3,525 | 3,325 | 6.0 | 6,172 | 7,613 | (18.9) | 3,788 | 4,008 | (5.5) | 13,485 | 14,946 | (9.8) |
| Total | 30,832 | 33,136 | (7.0) | 53,309 | 53,322 | (0.0) | 34,644 | 37,602 | (7.9) | 118,785 | 124,060 | (4.3) |
Turnover of the first nine months:
| OUTDOOR POWER EQUIPMENT | PUMPS AND HIGH PRESSURE WATER JETTING |
COMPONENTS AND ACCESSORIES |
CONSOLIDATED | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| €/000 | 9M 2023 | 9M 2022 | Var. % | 9M 2023 | 9M 2022 | Var. % | 9M 2023 9M 2022 | Var. % | 9M 2023 9M 2022 | Var. % | ||
| Europe | 116,672 | 147,180 | (20.7) | 82,886 | 98,997 | (16.3) | 67,991 | 67,581 | 0.6 | 267,549 | 313,758 | (14.7) |
| Americas | 4,751 | 7,285 | (34.8) | 88,807 | 68,895 | 28.9 | 37,164 | 47,837 | (22.3) | 130,722 | 124,017 | 5.4 |
| Asia, Africa and Oceania | 16,047 | 15,129 | 6.1 | 21,462 | 24,648 | (12.9) | 14,161 | 14,713 | (3.8) | 51,670 | 54,490 | (5.2) |
| Total | 137,470 | 169,594 | (18.9) | 193,155 | 192,540 | 0.3 | 119,316 130,131 | (8.3) | 449,941 492,265 | (8.6) |
Segment revenues decreased by 18.9% compared to the same period of the previous year. This contraction depends on the reduced spending capacity and the change in consumption priorities of the end user, together with a reduction in stocks in the distribution network, compounded by the delay in the start of the season.
The general decrease in turnover in Europe concerns the markets that had performed best in 2022: France, Germany and Italy.
A general decline is also noted in the Americas area, with a greater contraction in the Argentine market.
In the Asia, Africa and Oceania area, sales recover thanks to a good performance in the Turkish market, which offset the lower sales in the Far East and Africa.
EBITDA, equal to € 12,468 thousand, was down compared to the same period, due to the contraction in sales, partially offset by an improvement in the margin attributable to the increase in sales prices and the decrease in operating costs. Of note is the reduction in transport costs and, in particular, the significant decrease in rates related to sea freight.
Net negative financial position, equal to € 7,455 thousand, decreased compared to 31 December 2022, mainly due to the seasonal dynamics of net working capital.
Sales in the segment grew by 0.3% compared to the same period of the previous year, mainly due to the change in area, which offset the organic decline in sales.
In Europe, sales generally contracted in all markets in the area, with significant decline especially in Italy and France. The contraction in sales through the online channel continues.
The increase in revenues in the Americas area is due to the change in the consolidation area, which contributed 25,5 million euros, while there was a contraction in sales in South America, with the exception of Brazil.
Despite the good performance on the Turkish market, the decrease in sales in Oceania, Thailand and China led to a decline in turnover in Asia, Africa and Oceania.
EBITDA, equal to € 27,645 thousand, down compared to € 29,983 thousand in the same period, benefited from the change in area for approximately € 2.6 million, while it was affected by the increase in fixed and labor costs.
Net negative financial position, equal to € 129,405 thousand, increased compared to 31 December 2022, mainly due to the change in area.
The segment's revenues decreased by 8.3% compared to the same period of the previous year.
The slight growth in turnover in Europe is due to the effect of the change in the area, which contributed approximately 3 million euros, offsetting the decrease recorded in the Italian and Polish markets.
The negative performance recorded by Brazilian subsidiaries in the agriculture sector due to the loss of some incentives, combined with the general decline in the South American market, led to a decline in sales in the Americas area.
The contraction in turnover in Asia, Africa and Oceania is due to the decrease in sales in the main Far East countries, although partly offset by the growth recorded in Turkey.
EBITDA, equal to € 21,131 thousand, down compared to the same period in 2022, was affected by the decrease in sales and an unfavorable mix effect, only partially offset by the reduction in raw material costs, the lower transport costs and the change in scope.
Net negative financial position, equal to € 49,638 thousand, increased from the end of 2022, due to both the increase in net working capital and the signing and renewal of new contracts for the use of third-party assets which increased IFRS 16 financial debt.
The sales trend in the first nine months of the year was in line with the trends of the Group's reference markets. Particular suffering was recorded in the agriculture sector, especially in the South American area which, until now, had always been characterized by brilliant performances.
However, the Group achieved excellent cash generation results. Thanks to the organic improvement in working capital, it was possible to reduce the debt compared to June values and bring it to the same levels as the same period last year, while including the impact of the Bestway acquisition concluded at the beginning of the year. Despite the macroeconomic forecasts, which estimate a continuation of the worsening of the external reference context for the Group, expectations for the fourth quarter are for a moderate growth in sales compared to the values of the same period of the previous year.
No significant events occurred after the end of the period of this report.
Significant operations: derogation from disclosure obligations
The Company has resolved to make use, with effect from 31 January 2013, of the right to derogate from the obligation to publish the informative documents prescribed in the event of significant merger, demerger, share capital increase through the transfer of goods in kind, acquisition and disposal operations, pursuant to art. 70, paragraph 8, and art. 71, paragraph 1-bis of Consob Issuers Regulations, approved with resolution no. 11971 of 4/5/1999 and subsequent modifications and integrations.
The chart below shows, in accordance with recommendation ESMA/201/1415 published on October 5, 2015, the criteria used for the construction of key performance indicators that management considers necessary to the monitoring the Group performance.
It should be noted that alternative performance indicators are not identified as an accounting measure under the International Accounting Standards and, therefore, should not be considered a substitute measure for the evaluation of the Company's and Group's results. The criterion for determining these indicators applied by the Company and the Group may not be homogeneous with that adopted by other companies in the sector and, therefore, such data may not be comparable.
| Year 2022 | CONSOLIDATED INCOME STATEMENT | 3 Q 2023 | 3 Q 2022 | 9 months 2023 | 9 months 2022 |
|---|---|---|---|---|---|
| 605,723 | Revenues from sales | 118,785 | 124,060 | 449,941 | 492,265 |
| 4,753 | Other operating incomes | 846 | 1,212 | 3,321 | 3,049 |
| 12,790 | Change in inventories | (2,786) | (701) | (10,205) | 9,627 |
| (331,528) | Raw materials, consumables and goods | (58,622) | (62,057) | (228,176) | (269,344) |
| (99,519) | Personnel expenses | (24,600) | (22,156) | (78,194) | (75,768) |
| (116,140) | Other operating costs and provisions | (22,790) | (25,864) | (77,012) | (91,372) |
| (29,324) | Amortization, depreciation and impairment losses | (7,335) | (6,532) | (21,351) | (19,267) |
| 46,755 | Operating result | 3,498 | 7,962 | 38,324 | 49,190 |
| 4,007 | Financial income | 932 | 1,172 | 2,851 | 3,017 |
| (8,560) | Financial expenses | (3,443) | (2,177) | (11,708) | (4,711) |
| 1,895 | Exchange gains and losses | (299) | 654 | 932 | 2,901 |
| - | Income from/(expeses on) equity investment | 16 | - | 2 | - |
| 44,097 | Profit before taxes | 704 | 7,611 | 30,401 | 50,397 |
| (12,932) | Income taxes | 47 | (2,210) | (7,592) | (13,250) |
| 31,165 | Net profit (A) | 751 | 5,401 | 22,809 | 37,147 |
| (897) | (Profit)/loss attributable to non controlling interests | (209) | (339) | (742) | (862) |
| 30,268 | Net profit attributable to the Group | 542 | 5,062 | 22,067 | 36,285 |
| 0.185 | Basic earnings per share | 0.003 | 0.031 | 0.136 | 0.222 |
| 0.185 | Diluted earnings per share | 0.003 | 0.031 | 0.136 | 0.222 |
| Year 2022 | CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME |
9 months 2023 | 9 months 2022 |
|---|---|---|---|
| 31,165 | Net profit (A) | 22,809 | 37,147 |
| 8,102 | Profits/(losses) deriving from the conversion of foreign company accounts |
92 | 11,542 |
| (232) | Actuarial profits/(losses) deriving from defined benefit plans |
- | - |
| 65 | Income taxes on OCI | - | - |
| 7,935 | Total other components to be included in the | 92 | 11,542 |
| comprehensive income statement (B) | |||
| 39,100 | Total comprehensive income for the perdiod (A)+(B) | 22,901 | 48,689 |
| (935) | Comprehensive net profit attributable to non controlling interests (C) | (777) | (1,065) |
| 38,165 | Comprehensive net profit attributable to the Group (A)+(B)+(C) | 22,124 | 47,624 |
| 31.12.2022 | ASSETS | 30.09.2023 | 30.09.2022 |
|---|---|---|---|
| Non-current assets | |||
| 82,524 | Property, plant and equipment | 85,066 | 80,255 |
| 24,482 | Intangible assets | 29,399 | 24,324 |
| 36,461 | Rights of use | 41,062 | 35,958 |
| 71,216 | Goodwill | 72,914 | 75,360 |
| 8 | Equity investments in other companies | 8 | 8 |
| - | Equity investments in associates | 802 | - |
| 10,395 | Deferred tax assets | 10,918 | 10,267 |
| 1,151 | Other financial assets | 1,239 | 1,133 |
| 60 | Other assets | 98 | 62 |
| 226,297 | Total non-current assets | 241,506 | 227,367 |
| Current assets | |||
| 233,970 | Inventories | 225,495 | 234,170 |
| 119,661 | Trade and other receivables | 121,684 | 131,451 |
| 9,967 | Current tax receivables | 8,565 | 8,705 |
| 38 | Other financial assets | 37 | 38 |
| 2,707 | Derivative financial instruments | 1,984 | 2,394 |
| 86,477 | Cash and cash equivalents | 91,499 | 86,185 |
| 452,820 | Total current assets | 449,264 | 462,943 |
| 679,117 | TOTAL ASSETS | 690,770 | 690,310 |
| 31.12.2022 | SHAREHOLDERS' EQUITY AND LIABILITIES | 30.09.2023 | 30.09.2022 |
|---|---|---|---|
| Shareholders' Equity | |||
| 273,003 | Shareholders' Equity of the Group | 284,631 | 288,542 |
| 3,984 | Non-controlling interests | 4,409 | 3,707 |
| 276,987 | Total Shareholders' Equity | 289,040 | 292,249 |
| Non-current liabilities | |||
| 152,346 | Loans and borrowings due to banks and other lenders | 171,924 | 142,871 |
| 31,682 | Liabilities for leasing | 35,484 | 31,210 |
| 7,962 | Deferred tax liabilities | 7,667 | 8,019 |
| 6,291 | Employee benefits | 6,153 | 7,455 |
| 2,778 | Provisions for risks and charges | 2,906 | 2,605 |
| 1,510 | Other liabilities | 1,373 | 1,601 |
| 202,569 | Total non-current liabilities | 225,507 | 193,761 |
| Current liabilities | |||
| 109,344 | Trade and other payables | 95,305 | 98,691 |
| 4,984 | Current tax liabilities | 5,338 | 6,609 |
| 76,594 | Loans and borrowings due to banks and other lenders | 66,056 | 90,333 |
| 6,357 | Liabilities for leasing | 7,368 | 6,216 |
| 699 | Derivative financial instruments | 425 | 747 |
| 1,583 | Provisions for risks and charges | 1,731 | 1,704 |
| 199,561 | Total current liabilities | 176,223 | 204,300 |
| 679,117 | TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 690,770 | 690,310 |
| Thousand of Euro | SHARE PREMIUM |
Treasury Shares |
OTHER RESERVES | RETAINED EARNINGS | EQUITY | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SHARE CAPITAL |
Legal reserve |
Revaluation reserve |
Cumulative translation adjustment |
Reserve IAS 19 |
Other reserves |
Retained earnings |
Net profit of the period |
TOTAL GROUP |
ATTRIBUTABLE TO NON CONTROLLING INTERESTS |
TOTAL | |||
| Balance at 31.12.2021 | 42,623 | 41,513 | (2,029) | 3,750 | 4,353 | 175 | (1,487) | 31,885 | 99,892 | 32,508 | 253,183 | 2,750 | 255,933 |
| Profit reclassification | 497 | 454 | 19,291 | (32,508) | (12,266) | (159) | (12,425) | ||||||
| Change in treasury shares | (806) | (806) | (806) | ||||||||||
| Other changes | - | 444 | 444 | ||||||||||
| Net profit for the period | 2,089 | 535 | 30,268 | 32,892 | 949 | 33,841 | |||||||
| Balance at 31.12.2022 | 42,623 | 41,513 | (2,835) | 4,247 | 4,353 | 2,264 | (952) | 32,339 | 119,183 | 30,268 | 273,003 | 3,984 | 276,987 |
| Profit reclassification | 722 | 3,056 | 15,906 | (30,268) | (10,584) | (44) | (10,628) | ||||||
| Other changes | 88 | 88 | (308) | (220) | |||||||||
| Net profit for the period | 57 | 22,067 | 22,124 | 777 | 22,901 | ||||||||
| Balance at 30.06.2023 | 42,623 | 41,513 | (2,835) | 4,969 | 4,353 | 2,321 | (952) | 35,483 | 135,089 | 22,067 | 284,631 | 4,409 | 289,040 |
The interim report has been prepared under disclosure continuity, comparability, international best practice and transparency to the market. The Board of Directors of Emak S.p.A. has decided, because of membership in the STAR segment of the Euronext, to draw up and publish the quarterly reports, in compliance with art. 2.2.3, paragraph 3, letter. a) of the Regulation of Markets organized and managed by Borsa Italiana S.p.A. The reports are made available to the public in the usual forms of deposit at the registered office, the company website and the "eMarket Storage" storage mechanism.
In relation to the above, it is confirmed that the accounting principles and policies adopted by the Group in preparing the quarterly consolidated financial statements are consistent with those adopted in the consolidated financial statements at 31 December 2022, with the peculiarities shown below.
In this interim report IAS 19 is not applied as far as the quantification of changes in actuarial gains accrued in the period is concerned. In addition, in the context of disclosure of synthetic and essential character, are not observed all the detailed requirements of IAS 34, whenever it is assessed that its application does not bring meaningful information.
It should be noted that:
| 31.12.2022 | Amount of foreign for 1 Euro | Average 9 M 2023 | 30.09.2023 | Average 9 M 2022 | 30.09.2022 | |||
|---|---|---|---|---|---|---|---|---|
| 0.89 | GB Pounds (UK) | 0.87 | 0.86 | 0.85 | 0.88 | |||
| 7.36 | Renminbi (China) | 7.62 | 7.74 | 7.02 | 6.94 | |||
| 1.07 | Dollar (Usa) | 1.08 | 1.06 | 1.06 | 0.97 | |||
| 4.68 | Zloty (Poland) | 4.58 | 4.63 | 4.67 | 4.85 | |||
| 18.10 | Zar (South Africa) | 19.89 | 19.98 | 16.95 | 17.54 | |||
| 39.04 | Uah (Ukraine) | 39.61 | 38.74 | 32.93 | 35.64 | |||
| 5.64 | Real (Brazil) | 5.42 | 5.31 | 5.46 | 5.26 | |||
| 11.16 | Dirham (Morocco) | 10.96 | 10.92 | 10.58 | 10.71 | |||
| 20.86 | Mexican Pesos (Mexico) | 19.28 | 18.50 | 21.55 | 19.64 | |||
| 913.82 | Chilean Pesos (Chile) | 890.08 | 959.80 | 912.74 | 939.73 | |||
| 11.12 | Swedish krona (Sweden) | 11.48 | 11.53 | 10.53 | 10.90 | |||
| Significant, non-recurring transactions or atypical, unusual transactions Acquisition of the Bestway Ag Holdings LLC business |
||||||||
| On 1 February 2023, Valley Industries LLP completed the closing of the acquisition of the business of Bestway AG, with its headquarters in Hopkinsville (Kentucky), operating in the production and marketing of equipment for spraying and weeding used in agriculture. |
||||||||
| The company is recognized as a reference operator in the USA market for the production and marketing of sprayers, equipment for applications in the agricultural sector with own-brand spray tanks and for the sale of pumps and accessories of other market brand leaders. |
||||||||
| The operation forms part of the Group's growth strategy for external lines through the expansion and completion of its product range, specifically of the "Pumps and High-Pressure Water Jetting" segment; thanks to this acquisition, the North American agricultural market can be served by the Group more extensively, enabling commercial synergies. |
The "Bestway AG" business achieved in 2022 a turnover of approximately 32 million US Dollars and an EBITDA of 2.5 million US Dollars.
The operation was formally achieved through the acquisition of 100% of the share capital of the NewCo "Bestway Holding LLC", specially incorporated with the prior contribution on the part of the sellers of the assets and liabilities of the "Bestway AG" business. Once the activities relating to the deal have been completed, on March 21, 2023, the NewCo was merged by incorporation into Valley Industries.
The final consideration for the acquisition was equal to 22.1 million US dollars (of which 3.5 million deposited in an escrow account) fully paid at the closing date.
The fair value of the assets and liabilities of acquisition determined on the basis of the last financial statements of February 1, 2023 on a provisional basis and the price paid are detailed below:
| €/000 | Book values | Fair Value adjustments |
Fair value of acquired assets and liabilities |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 1,867 | - | 1,867 |
| Intangible fixed assets | 5,568 | - | 5,568 |
| Current assets | |||
| Inventories | 12,814 | - | 12,814 |
| Trade and other receivables | 4,568 | - | 4,568 |
| Current liabilities | |||
| Trade and other payables | (5,080) | - | (5,080) |
| Total net assets acquired | 19,736 | - | 19,736 |
| % interest held | 100% | ||
| Equity acquired | 19,736 | ||
| Goodwill | 567 | ||
| Acquisition price paid at closing | 20,304 |
The fair values of the assets, liabilities and contingent liabilities acquired were determined, in compliance with the provisions of IFRS 3 "Business Combinations". It should also be noted that, at present, no adjustments have been identified for the adjustment to the fair value of the assets and liabilities reflected in the financial statements of the acquired company, which, by virtue of the previously commented transfer operation, were already recorded at the relative current values defined from the parties.
On 22 February 2023, the Parent Company sanctioned the entry into the shareholding structure of the company Raw Power S.r.l., with registered office in Reggio Emilia, through the subscribing of an increase in share capital for a stake of 24%, for the amount of 800 thousand Euro.
The company deals with all aspects relating to power electronics design, aimed at automation and static conversion of energy and the design of electric motors and generators.
The rationale of the operation is to allow the enhancement of the know-how of electric motors technology in order to increase competitiveness in the market of battery products, in continuous and rapid evolution.
The fair value of the assets and liabilities, on the basis of the estimated financial statements at the acquisition date is shown below:
| €/000 | Book values | Fair Value adjustments |
Fair value of acquired assets and liabilities |
|---|---|---|---|
| Non-current assets | |||
| Property, plant and equipment | 71 | - | 71 |
| Intangible assets | 31 | - | 31 |
| Other financial assets | 1 | - | 1 |
| Current assets | |||
| Trade and other receivables | 613 | - | 613 |
| Cash and cash equivalents | 877 | - | 877 |
| Non-current liabilities | |||
| Employee benefits | (103) | - | (103) |
| Current liabilities | |||
| Trade and other payables | (339) | - | (339) |
| Current tax liabilities | (33) | - | (33) |
| Total net assets acquired | 1,118 | - | 1,118 |
| % interest held | 24% | ||
| Net equity acquired | 268 | ||
| Goodwill | 532 | ||
| Net cash outflow for subscription of paid in capital |
800 |
The fair values of the assets, liabilities and potential liabilities in the half-yearly financial report as at 30 September 2023 were determined, in accordance with the provisions of IFRS 3 "Business Combinations", on a provisional basis as the related valuation processes are still in progress. course.
On 22 February 2023, the minority shareholders of Agres exercised the Put option, selling the 4.5% stake to Tecomec S.r.l., which took its own stake to 95.5%. The price paid for the acquisition of the 4.5% stake is around 11.2 million Reais, equal to around 2 million Euros. The difference between the price paid and the value of the payable for the purchase of 4.5% recognized in the consolidated financial statements as at 31 December 2022 amounts to € 98 thousand and was recognized as a charge in the income statement as at 30 September 2023.
During the first quarter of 2023, the company Comet Usa Inc. has started the preparatory procedures for the merger by incorporation of the company Ptc Waterblasting, already 100% controlled.
The company was incorporated in 2017 with the aim of developing the United States market in the pumps and very high-pressure systems sector. The results achieved over the years have been below expectations due to high entry barriers; as a result, with the lack of strategic interest and the reduced operations, the parent company Comet Usa will guarantee the continuity of the residual business of Ptc Waterblasting.
As of May 1st, the Chinese subsidiary Jiangmen Autech Equipment Co. Ltd became operational following the completion of the spin-off procedure and transfer of the business branch of the Chinese subsidiary Jiangmen Emak Outdoor Power Equipment.
During the month of May 2023, the subsidiary Tecomec S.r.l., following the resolution of the Board of Directors of 10 May, exercised the call option for the purchase of a further 30% of Markusson shares, as envisaged by the contract signed on 2020, thus rising to 81% as a controlling percentage of the Swedish company. The shareholders' agreements stipulated with the minority shareholder provide for the purchase of the additional 19% in 2026. The value of the transaction, calculated according to the same parameters used for the original purchase of the 51%, is 26,451 thousand Sek, equal to approximately € 2.3 million. The difference between the price paid and the value of the payable for the purchase of 30% recorded in the consolidated financial statements as of 31 December 2022 amounts to € 174 thousand and was recognized as a charge in the income statement as of 30 September 2023.
Bagnolo in Piano (RE), November 14, 2023 On behalf of the Board of Directors
The Chairman
Massimo Livatino
The manager in charge of preparing corporate accounting statements of EMAK S.p.A., Roberto Bertuzzi, based on his own knowledge,
certifies,
in accordance with the second paragraph of Art. 154-bis, of Italian Legislative Decree No. 58 of 24 February 1998, that the accounting information contained in the Quarterly Report at 30 September 2023, examined and approved today by the Board of Directors of the company, corresponds with the accounting documents, ledgers and records.
Faithfully Bagnolo in Piano (RE), November 14, 2023
Roberto Bertuzzi The Manager in charge of preparing the accounting statements
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