Quarterly Report • Sep 1, 2023
Quarterly Report
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2023
Corporate Boards
| CHIARA MIO | Chairperson (*) |
|---|---|
| GIULIO BONAZZI | Chief Executive Officer |
| GIOVANNI STEFANO LORO | Director |
| FRANCO ROSSI | Director |
| SILVANA BONAZZI | Director |
| FRANCESCO BONAZZI | Director |
| FRANCESCO PROFUMO | Director (*) |
| ILARIA MARIA DALLA RIVA | Director (*) |
| PATRIZIA RIVA | Director (*) |
(*) Director declaring independence in accordance with Article 147-ter, paragraph 4 of the CFA and Article 3 of the Self-Governance Code
CHIARA MIO Chairperson FRANCESCO PROFUMO Member PATRIZIA RIVA Member
FRANCESCO PROFUMO Chairperson PATRIZIA RIVA Member ILARIA MARIA DALLA RIVA Member
FABIO EGIDI Chairperson KARIM TONELLI Member MICHELE PANSARELLA External member
STEFANO POGGI LONGOSTREVI Chairperson BETTINA SOLIMANDO Statutory Auditor BEATRICE BOMPIERI Statutory Auditor
PRICEWATERHOUSECOOPERS S.p.A. – Trento (Italy), Viale della Costituzione 33
The Board of Directors will remain in office until the approval of the financial statements for the year 2025 and the Board of Statutory Auditors will remain in office until the approval of the financial statements for the year 2023. The independent audit firm was appointed for the 2017-2025 period.
For full details on the Corporate Boards, reference should be made to the Corporate Governance and Ownership Structure Report, drawn up in accordance with Article 123-bis of Legislative Decree 58/1998 and available on the Aquafil Group website.
Directors' Report of the Aquafil Group at June 30, 2023
Registered Office: Via Linfano, 9 - Arco (TN) - 38062 - Italy Telephone: +39 0464 581111 Certified e-mail: [email protected] E-mail: [email protected] Website: www.aquafil.com Share capital (at approval of the Half-Year Financial Statements at June 30, 2023): • Approved: Euro 50,522,417.18 • Subscribed: Euro 49,722,417.28 • Paid-in: Euro 49,722,417.28 Tax and VAT No.: IT 09652170961 ATECO Code: 20.6 Trento Economic & Administrative Registration: TN - 228169
The Group consolidates the following companies, with headquarters in EMEA, the United States, Asia, Oceania and South America.
The changes to the scope in the period are outlined in the Notes.
The Group comprises 21 direct or indirect subsidiaries of Aquafil S.p.A. and one associated company and a joint venture, both measured at equity. Production is carried out at 21 plants located in Europe, the United States, Asia and Oceania.
In Europe, our industry's environment also proved more challenging than expected in the second quarter.
Demand declined suddenly and sharply due to a combination of slowing end consumption and destocking among clients.
This general market weakness also resulted in a significant decline in raw material levels, which returned to mid-2021 levels. Our sales prices, as following raw material prices, temporarily saw a contracting margin as a result of the high unit carrying amount of the inventories built up in 2022.
Demand and quantities sold in the United States and Asia Pacific confirmed the previous year's satisfying numbers.
The engineering plastics project developed strongly in the first half of the year, and despite the continually weak market is close to target levels. These in factshall certainly be achieved by year-end. BCF market demand improved in the Summer in the EMEA area, and whose destocking should now have largely concluded.
Finally, the major debt containment actions launched in 2022 have continued, thanks to the restructuring of working capital and the almost concluded investment cycle begun in previous years.
The Group's key events in the first half of the year included:
Aquafil S.p.A./Aqualeuna GmbH: the company Aqualeuna GmbH, which was the subject of a tax audit by the Federal Tax Office ("Bundeszentralamt fur Steuern"), division of Leuna (Germany), received in May 2023 from the Finanzamt Merseburg office notification of the closure of the audit for the tax periods 2018 and 2019 and the subsequent assessment and settlement notices for the company's income tax. For further details, reference should be made to the "Contingent liabilities" paragraph of the Explanatory Notes.
On May 5, 2023, the World Health Organisation officially declared the health emergency over. This had begun on March 11, 2020, when it was first declared a pandemic. Over the past few years, the Aquafil Group has been able to carefully manage the developments of the pandemic from the very beginning, promptly taking the necessary measures to prevent, control and contain the virus at its facilities, at a global level. Its objective has always been to protect the health of its employees and collaborators by constantly monitoring developments, including the spread of variants, at all operational locations globally, confirming the key objective of protecting the health of its employees and collaborators. The health crisis did not substantially impact the results for the period.
The conflict between Russia and Ukraine that began on February 24, 2022 has brought severe repercussions to Europe in terms of economic instability, resulting in significant inflation for the broad range of products — caused particularly by the sudden unavailability of imports from Russia and Belarus of the products subject to sanctions and the high price levels of energy components — and increased shipping costs by sea and on land.
Against this backdrop, the Aquafil Group immediately reacted by, on the one hand, seeking regional diversification where possible of raw material procurement sources and, on the other hand, by recovering the incremental purchase and service cost components on the products sold within the three product lines.
With regards to commercial relations with parties located in the countries involved in the conflict, the Group does not have a dependence on particular products and/or suppliers/customers in these areas which may impact upon operations. No direct consequences were therefore felt from the stoppage of import/exports of the products and businesses subject to limitations.
Specifically, we note that the Group had no business dealings with Russian suppliers of caprolactam flakes during the six-month period in question, having permanently discontinued supply as early as October 2022.
At June 30, 2023, the Aquafil share price (ISIN IT0005241192) was Euro 3.76, down approx. 38.7% on December 30, 2022 (Euro 6.14), against an increase in the FTSE MIB in the same period of 19%.
The Aquafil share generally declined in the period, between a minimum of Euro 3.63 (on June 27, 2023) and a maximum of Euro 6.30 (on January 12, 2023).
The average traded volume in the period was 31,767 shares, with a maximum daily volume (traded on April 17, 2023) of 130,218 shares, and a minimum daily volume (traded on January 23, 2023) of 1,089 shares.
This is an alternative performance indicator not defined under IFRS but used by company management to monitor and assess the operating performance as not impacted by the effects of differing criteria in determining taxable income, the amount and types of capital employed, in addition to the amortisation and depreciation policies. This indicator is defined by the Aquafil Group as the net result for the year adjusted by the following components:
Calculated as EBITDA, to which the accounts "amortisation, depreciation and write-downs" and "provisions and write-downs" are added. Adjusted EBIT differs from EBIT in terms of the non-recurring components and other charges, as specified in the notes to the "Key Group Financial Highlights" table.
On April 29, 2021, Consob issued "Call to attention No. 5/21" in which it highlighted that the new "ESMA Guidelines" of March 4, 2021 replaced on May 5, 2021 those of preceding Consob communications. In particular, guideline No. 39 requires that financial statement disclosure includes the following definition of net financial debt:
| (in Euro thousands) | At June 30, 2023 | At June 30, 2022 |
|---|---|---|
| Profit/(loss) for the period | (4,136) | 17,674 |
| Income taxes | 2,058 | 6,457 |
| Investment income and charges | 0 | 70 |
| Amortisation, depreciation and write-downs | 24,287 | 23,756 |
| Provisions and write-downs | (178) | (200) |
| Financial items (*) | 7,651 | 2,435 |
| Non-recurring items (**) | 1,645 | 1,321 |
| EBITDA | 31,327 | 51,513 |
| Revenues | 311,117 | 351,009 |
| EBITDA margin | 10.1% | 14.7% |
| (in Euro thousands) | At June 30, 2023 | At June 30, 2022 |
|---|---|---|
| EBITDA | 31,327 | 51,513 |
| Amortisation, depreciation and write-downs | (24,287) | (23,756) |
| Provisions and write-downs | 178 | 200 |
| Adjusted EBIT | 7,218 | 27,956 |
| Revenues | 311,117 | 351,009 |
| Adjusted EBIT margin | 2.3% | 8.0% |
(*) Comprises: (i) interest expense on loans and other bank charges for Euro -7.5 million, (ii) customer cash discounts for Euro -1.5 million, (iii) financial income for Euro 0.3 million and (iv) net exchange gains of Euro 1 million.
(**) Comprises: (i) non-recurring charges concerning the company Aquafil Carpet Recycling #1 for an extraordinary event for Euro -0.6 million, (ii) non-recurring Group expansion costs for Euro -0.4 million, (iii) non-recurring extraordinary legal consultancy costs for Euro -0.3 million, (iv) non-recurring costs for personnel mobility of two group companies for Euro -0.2 million, (v) other non-recurring charges of Euro -0.2 million. For a complete table, see paragraph 6.14 of the Notes to the Half-Year Financial Statements.
For an analysis of the highlights indicated above, reference should be made to subsequent paragraphs.
| (in Euro thousands) | At June 30, 2023 | At December 31, 2022 |
|---|---|---|
| Consolidated Shareholders' Equity | 149,207 | 175,402 |
| Net Financial Position | 250,652 | 247,885 |
| EBITDA LTM (Last Twelve Months) | 72,075 | 92,261 |
| NFP/EBITDA | 3.48 | 2.69 |
The comments on the movements in the Net Financial Position are reported in paragraph "10. Group balance sheet and financial position" paragraph.
The H1 2023 Income Statement compared with the previous half year is reported below:
| Consolidated Income Statement (in Euro thousands) |
Note | H1 2023 of which non-recurring | H1 2022 of which non-recurring | ||
|---|---|---|---|---|---|
| Revenues | 6.1 | 311,117 | 0 | 351,009 | 525 |
| of which related parties | 151 | 26 | |||
| Other revenues and income | 6.2 | 4,947 | 3 | 2,413 | 114 |
| Total revenues and other revenues and income | 316,064 | 3 | 353,422 | 639 | |
| Cost of raw materials and changes to inventories | 6.3 | (158,938) | 0 | (158,365) | (294) |
| Service costs and rents, leases and similar costs | 6.4 | (67,864) | (1,018) | (81,957) | (738) |
| of which related parties | (264) | (230) | |||
| Personnel costs | 6.5 | (63,019) | (515) | (64,898) | (811) |
| Other costs and operating charges | 6.6 | (1,764) | (114) | (2,446) | (115) |
| of which related parties | (35) | (35) | |||
| Amortisation, depreciation & write-downs | 6.7 | (24,287) | (23,756) | ||
| Provisions and write-downs | 6.8 | 115 | 174 | ||
| (Write-down)/recovery of financial assets (receivables) | 6.8 | 62 | 26 | ||
| Increase in internal work capitalised | 6.9 | 3,736 | 2,347 | ||
| EBIT | 4,106 | (1,645) | 24,548 | (1,321) | |
| Investment income/charges | 0 | (70) | |||
| of which related parties | 0 | 90 | |||
| Financial income | 6.10 | 339 | 2,987 | ||
| Financial charges | 6.11 | (7,505) | (3,862) | ||
| of which related parties | (87) | (64) | |||
| Exchange gains/losses | 6.12 | 983 | 528 | ||
| Profit/(loss) before taxes | (2,078) | (1,645) | 24,131 | (1,321) | |
| Income taxes | 6.13 | (2,058) | (6,457) | ||
| Profit/(loss) for the period | (4,136) | (1,645) | 17,674 | (1,321) | |
| Minority interest net profit | 0 | 0 | |||
| Group Net Profit/(loss) | (4,136) | (1,645) | 17,674 | (1,321) | |
| Basic earnings per share | 6.15 | 0 | 0.35 | ||
| Diluted earnings per share | 6.15 | 0 | 0.35 |
Comments on the main H1 Consolidated Income Statement accounts compared to H1 of the previous year follow:
Revenues by region and product line are presented in the following table (Euro millions) and also in percentage terms, alongside an analysis of the movements against the same period of the previous year:
| BCF (carpet yarn) | NTF (clothing yarn) | Polymers | Total | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| H1 23 | H1 22 | Δ | Δ% | H1 23 | H1 22 | Δ | Δ% | H1 23 | H1 22 | Δ | Δ% | H1 23 | H1 22 | Δ | Δ% | |
| EMEA | 99.0 | 117.8 | (18.9) | (16.0%) | 46.3 | 57.9 | (11.6) | (20.0%) | 19.8 | 28.8 | (9.0) | (31.2%) | 165.1 | 204.5 | (39.4) | (19.3%) |
| North America | 80.0 | 76.3 | 3.7 | 4.8% | 15.6 | 16.6 | (1.0) | (5.9%) | 2.8 | 1.5 | 1.3 | 86.6% | 98.4 | 94.4 | 4.0 | 4.2% |
| Asia and Oceania | 44.2 | 48.1 | (3.9) | (8.2%) | 2.0 | 1.8 | 0.2 | 10.3% | 0.4 | 0.5 | (0.2) | (28.5%) | 46.6 | 50.5 | (3.9) | (7.8%) |
| Rest of the world | 0.5 | 0.3 | 0.2 | 58.8% | 0.6 | 1.3 | (0.7) | (54.4%) | 0.0 | 0.0 | (0.0) | N.A. | 1.1 | 1.6 | (0.5) | (33.5%) |
| Total | 223.6 | 242.6 | (19.0) | (7.8%) | 64.5 | 77.6 | (13.1) | (16.9%) | 23.0 | 30.8 | (7.8) | (25.4%) | 311.1 | 351.0 | (39.9) | (11.4%) |
| % | 71.9% | 69.1% | 20.7% | 22.1% | 7.4% | 8.8% |
Sales revenues in the period of Euro 311.1 million decreased Euro 39.9 million (-11.4%) on Euro 351 million in H1 2022.
Specifically, a comparison between the two periods highlights:
Other revenues and income amounted to Euro 4.9 million, compared to Euro 2.4 million in the first half of 2022, increasing Euro 2.5 million, mainly due to the increase in government grants obtained by Aquafil S.p.A. and Tessilquattro S.p.A. compared to the preceding period.
Raw materials, ancillaries and consumables totalled Euro 158.9 million, compared to Euro 158.4 million in H1 2022, an increase of Euro 0.5 million. They accounted for 51% of revenues(45% in H1 2022). The increase in the proportion of raw materials on revenues- despite the decrease in the costs (particularly evident in Q2) - was mainly due to the effect of the higher unit value of stock built up in 2022.
Service costs totalled Euro 67.8 million, compared to Euro 82 million in H1 2022, a decrease of Euro 14.2 million (-17.3%). The reduction, related to the lower production volumes, was particularly significant in terms of transport and utility costs which, as outlined in the explanatory notes, in the first half of 2023 significantly declined.
Personnel costs totalled Euro 63 million, decreasing Euro 1.9 million compared to H1 2022 (Euro 64.9 million). They accounted for 20% of revenues (18% in the same period of 2022).
The decrease in personnel costs is mainly due to the reduction in the average Group workforce (-64 units), decreasing from an average of 2,803 in H1 2022 to 2,739 in H1 2023, in addition to the reduction in hours worked.
Other costs and operating charges amount to Euro 1.8 million (Euro 2.4 million in H1 2022), decreasing Euro 0.7 million.
The increases for internal work amount to Euro 3.7 million (Euro 2.3 million in H1 2022), increasing Euro 1.4 million. The increase is mainly due to the capitalisation of higher development costs related to new products (IAS 38) in the first half of 2023 compared to the first half of 2022.
EBITDA, as defined by the alternative performance measures outlined in the key financial highlights of this report, was Euro 31.3 million, compared to Euro 51.5 million in the same period of the previous year, decreasing Euro 20.2 million.
This reduction is mainly as a result of both the decrease in quantities sold and the decrease in sales prices, which therefore resulted in an increase in the percentage of raw material costs on revenues, as commented upon above.
The EBITDA Margin on revenues in H1 2023 was 10.1% (14.7% in the same period of the previous year).
Amortisation, depreciation and write-downs in H1 2023 totalled Euro 24.3 million, compared to Euro 23.8 million in the first half of 2022 (increasing Euro 0.5 million). This figure, substantially in line with the first half of 2022, relates to the straight-line amortisation and depreciation of fixed assets.
"Other provisions" reported a positive amount (represented by releases) in the first half of 2023 of Euro 0.1 million, substantially in line with the first half of 2022.
H1 2023 EBIT was Euro 4.1 million, compared to Euro 24.5 million in the first half of 2022 (decreasing Euro 20.4 million). The movement is mainly due to the reduction in EBITDA, as outlined above.
H1 2023 net financial charges amounted to Euro 6.2 million, compared to Euro 0.4 million in the same period of the previous year (increasing Euro 5.8 million). The movement relates to:
These negative impacts were partially offset by net exchange gains in the first half of 2023 of Euro 1 million (compared to gains of Euro 0.5 million in the previous year).
Income taxes in the period totalled Euro 2.1 million, compared to Euro 6.5 million in the first half of 2022 (decreasing Euro 4.4 million, due to the decrease in the gross result).
The Group consolidated net result was a loss of Euro 4.1 million, compared to a profit in the first half of 2022 of Euro 17.7 million, a decline of Euro 21.8 million, due to the reasons outlined above.
The interim reporting is supported by a breakdown of the consolidated result for Q2 2023 against the same period of 2022.
| Key Financial Highlights (in Euro thousands) |
Q2 2023 | Q2 2022 |
|---|---|---|
| Profit/loss) for the period | (7,427) | 8,554 |
| Income taxes | 706 | 3,675 |
| Investment income and charges | (0) | 70 |
| Amortisation, depreciation and write-downs | 12,458 | 12,838 |
| Provisions and write-downs | (28) | (191) |
| Financial income/(charges) | 3,524 | 893 |
| Non-recurring items | 522 | 861 |
| EBITDA | 9,755 | 26,699 |
| Revenues | 144,297 | 179,849 |
| EBITDA margin | 6.8% | 14.8% |
| (in Euro thousands) | Q2 2023 | Q2 2022 |
|---|---|---|
| EBITDA | 9,755 | 26,699 |
| Amortisation, depreciation and write-downs | (12,458) | (12,838) |
| Provisions and write-downs | 28 | 191 |
| Adjusted EBIT | (2,675) | 14,053 |
| Revenues | 144,297 | 179,849 |
| Adjusted EBIT margin | (1.9%) | 7.8% |
| Revenues 144,297 of which related parties Other revenues and income Total revenues and other revenues and income 146,527 Cost of raw materials and changes to inventories (76,754) Service costs and rents, leases and similar costs (31,622) of which related parties |
Q2 2023 of which non-recurring | Q2 2022 of which non-recurring | |
|---|---|---|---|
| 179,849 | 229 | ||
| 76 | 13 | ||
| 2,230 1 |
1,157 | 23 | |
| 1 | 181,006 | 251 | |
| 0 | (79,798) | (204) | |
| (215) | (43,097) | (384) | |
| (139) | 296 | ||
| Personnel costs (30,985) |
(197) | (33,511) | (464) |
| Other costs and operating charges | (901) (111) |
(1,212) | (60) |
| of which related parties | (17) | (17) | |
| Amortisation, depreciation & write-downs (12,458) |
(12,838) | ||
| Provisions and write-downs | 28 | 191 | |
| Write-downs of financial assets (receivables) | (0) | 1 | |
| Increase in internal work capitalised | 2,286 | 1,343 | |
| EBIT (3,880) |
(522) | 12,085 | (861) |
| Investment income/charges | 0 | (70) | |
| of which related parties | 0 | 90 | |
| Financial income | 224 | 1,293 | |
| of which related parties | 0 | 0 | |
| Financial charges (4,225) |
(1,991) | ||
| of which related parties | (42) | (33) | |
| Exchange gains/losses | 1,159 | 912 | |
| Profit/(loss) before taxes (6,721) |
(522) | 12,229 | (861) |
| Income taxes | (706) | (3,675) | |
| Profit/(loss) for the period (7,427) |
(522) | 8,554 | (861) |
| Minority interest net profit | (0) | ||
| Group Net Profit/(loss) (7,427) |
(0) |
Comments on the main Q2 Consolidated Income Statement accounts compared to Q2 of the previous year follow:
Revenues by region and product line are presented in the following table (Euro millions) and also in percentage terms, alongside an analysis of the movements against the same period of the previous year:
| BCF (carpet yarn) | NTF (clothing yarn) | Polymers | Total | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2Q23 | 2Q22 | Δ | Δ% | 2Q23 | 2Q22 | Δ | Δ% | 2Q23 | 2Q22 | Δ | Δ% | 2Q23 | 2Q22 | Δ | Δ% | ||
| EMEA | 44.7 | 58.5 | (13.8) | (23.6%) | 20.0 | 29.4 | (9.5) | (32.2%) | 8.9 | 14.3 | (5.4) | (37.8%) | 73.6 | 102.2 | (28.6) | (28.0%) | |
| North America | 38.6 | 42.4 | (3.8) | (9.0%) | 8.4 | 9.3 | (0.8) | (8.9%) | 1.3 | 1.2 | 0.1 | 7.3% | 48.4 | 52.9 | (4.6) | (8.6%) | |
| Asia and Oceania | 20.7 | 22.9 | (2.2) | (9.8%) | 1.0 | 0.8 | 0.2 | 23.3% | 0.1 | 0.1 | 0.0 | 21.2% | 21.8 | 23.9 | (2.0) | (8.5%) | |
| Rest of the world | 0.3 | 0.1 | 0.1 | 100.9% | 0.3 | 0.7 | (0.5) | (61.8%) | 0 | (0.0) | 0.0 | N.A. | 0.5 | 0.9 | (0.3) | (37.4%) | |
| Total | 104.2 | 123.9 | (19.7) | (15.9%) | 29.7 | 40.2 | (10.5) | (26.2%) | 10.4 | 15.7 | (5.3) | (33.7%) | 144.3 | 179.8 | (35.6) | (19.8%) | |
| % | 72.2% | 68.9% | 20.6% | 22.4% | 7.2% | 8.7% |
Sales revenues totalled Euro 144.3 million, compared to Euro 179.8 million for Q2 2022, decreasing Euro 35.6 million (-19.8%).
Specifically, a comparison between the two periods highlights:
Other revenues and income amounted to Euro 2.2 million, compared to Euro 1.2 million in Q2 2022, an increase of Euro 1 million.
Raw materials, ancillaries and consumables totalled Euro 76.7 million, compared to Euro 79.8 million in Q2 2022, a decrease of Euro 3.1 million (-3.8%). The increase in the percentage of raw material, ancillary and consumable costs on revenues for Q2 2023 compared to Q2 2022, despite the reduction in raw material costs, was particularly sharp in view of the high unitary values of the stock built up in the corresponding period of 2022.
Service costs totalled Euro 31.6 million, compared to Euro 43.1 million in Q2 2022, a decrease of Euro 11.5 million (-26.7%). Service costs represented 21.9% of revenues, compared to 24% in the same period of the previous year.
Personnel costs were Euro 31 million, compared to Euro 33.5 million in Q2 2022, a decrease of Euro 2.5 million (-7.5%). The percentage of revenues was 21.5% (18.6% in Q2 2022).
Other costs and operating charges amounted to Euro 0.9 million (Euro 1.2 million in Q2 2022), decreasing Euro 0.3 million.
Increases for internal work amounted to Euro 2.3 million, compared to Euro 1.3 million in Q2 2022, an increase of Euro 1 million. The increase is mainly due to the capitalisation of higher development costs related to new products (IAS 38) in the second quarter of 2023 compared to the same quarter of the previous year.
EBITDA, as defined by the alternative performance measures outlined in the key financial highlights of this report, was Euro 9.8 million, compared to Euro 26.7 million in Q2 2022, decreasing Euro 16.9 million.
The EBITDA Margin on revenues in Q2 2023 was 6.8% (14.8% in the same period of the previous year).
This reduction in EBITDA in Q2 is mainly as a result of both the decrease in quantities sold and the decrease in sales prices, in addition to the increase in the percentage of raw material costs on revenues, as commented upon above.
Amortisation, depreciation and write-downs in Q2 2023 amounted to Euro 12.4 million (Euro 12.8 million in the same period of the previous year), decreasing by Euro 0.4 million.
Q2 2023 EBIT was a loss of Euro 3.8 million, compared to Euro 12.1 million in the same period of the previous year (a decrease of Euro 16 million). This movement was mainly due to the decrease in EBITDA, as outlined above.
Net financial charges of Euro 2.8 million was reported in Q2 2023, compared to net income of Euro 0.1 million in the same period of the previous year (decreasing Euro 2.9 million). This movement is due to the higher financial charges in the period of Euro 4 million, compared to Euro 0.7 million in the same period of the previous year, increasing by Euro 3.3 million; this was impacted by the MTM measurement of IRS (Interest Rate Swap) derivatives undertaken in order to manage interest rate fluctuations on the parent company's medium-term loan contracts, although accounted as non-hedging contracts, as outlined in paragraph "5.3 Current and non-current financial assets and investments measured at equity" below in the Explanatory Notes. The deterioration was partially offset by the increase in net exchange gains in the quarter of Euro 1.2 million, compared to net gains of Euro 0.9 million, an increase of Euro 0.3 million on the same quarter of the previous year.
Income taxes were Euro 0.7 million, compared to Euro 3.7 million in the same period of the previous year, decreasing Euro 3 million as a result of the lower gross result.
The Group consolidated net result was a loss of Euro 7.4 million, compared to a profit of Euro 8.6 million in the same period of the previous year.
The following table reclassifies the consolidated equity and financial position of the Group at June 30, 2023 and December 31, 2022.
| Group Balance Sheet and Financial Situation (in Euro thousands) |
At June 30, 2023 | At December 31, 2022 | Change |
|---|---|---|---|
| Trade receivables | 27,150 | 28,553 | (1,404) |
| Inventories | 217,965 | 260,808 | (42,843) |
| Trade payables | (105,035) | (126,840) | 21,805 |
| Tax receivables | 642 | 580 | 62 |
| Other current assets | 16,130 | 15,861 | 269 |
| Other current liabilities | (25,251) | (25,163) | (88) |
| Non-current assets held for sale | 0 | 0 | 0 |
| Net working capital | 131,600 | 153,800 | (22,199) |
| Property, plant and equipment | 243,825 | 247,469 | (3,644) |
| Intangible assets | 20,827 | 21,596 | (769) |
| Goodwill | 15,359 | 15,647 | (288) |
| Financial assets | 1,816 | 1,850 | (33) |
| Net fixed assets | 281,827 | 286,561 | (4,734) |
| Employee benefits | (4,866) | (5,192) | 325 |
| Other net assets/(liabilities) | (8,702) | (11,883) | 3,181 |
| Net capital employed | 399,859 | 423,287 | (23,427) |
| Cash and banks | 111,001 | 110,682 | 319 |
| ST bank payables and loans | (69,139) | (60,481) | (8,657) |
| M-LT bank payables and loans | (198,387) | (202,234) | 3,847 |
| M-LT bond loan | (64,560) | (70,301) | 5,740 |
| ST bond loan | (13,217) | (13,108) | (109) |
| Current loans | 6,481 | 9,964 | (3,483) |
| Other financial payables | (22,831) | (22,407) | (424) |
| Net Financial Position | (250,652) | (247,885) | (2,767) |
| Group shareholders' equity | (149,207) | (175,401) | 26,194 |
| Minority interest shareholders' equity | (1) | (1) | 0 |
| Total shareholders' equity | (149,207) | (175,402) | 26,195 |
Net working capital amounts to Euro 131.6 million, decreasing Euro 22.2 million on Euro 153.8 million at December 31, 2022.
This decrease is mainly due to the reduction in the value of inventories, as outlined at paragraph 5.6 of the Explanatory Notes, for a total of Euro 42.8 million. This decrease was partially offset by the reduction in trade payables for Euro 21.8 million.
Fixed assets at June 30, 2023 amounted to Euro 281.8 million, decreasing Euro 4.7 million on Euro 286.6 million at December 31, 2022, as a combined effect of:
Investments in tangible and intangible assets are outlined in the Explanatory Notes and mainly concerned (a) the industrial and energy efficiency improvements at the Group's facilities, (b) the industrial efficiency and energy improvement regarding the production of ECONYL® caprolactam and of its raw materials, in addition to the development of circularity-focused technologies, (c) the expansion of existing production capacity, (d) the improvement and technological upgrading of existing plants and equipment, (e) the right-of-use as per IFRS 16 and (f) the development costs of textile fiber samples, which comply with the criteria set out in IAS 38.
Shareholders' Equity decreased by Euro 26.2 million, from Euro 175.4 million to Euro 149.2 million, substantially due to the distribution of dividends by Aquafil S.p.A. in the first half of 2023 for Euro 12 million, the consolidated net loss for the period of Euro 4.1 million and the negative exchange differences from the translation of the financial statements expressed in currencies other than the Euro of Euro 9.5 million, in addition to the purchase of treasury shares for Euro 0.6 million.
The Net Financial Position at June 30, 2023 was a debt position of Euro 250.7 million, compared to Euro 247.9 million at December 31, 2022, increasing Euro 2.8 million. The main factors are outlined in the consolidated cash flow statement and principally concern (a) cash flow generated by operating activities of Euro 28 million, (b) the changes in net working capital which absorbed cash of Euro 5 million, mainly due to the value of inventories, partially offset by the reduction in trade payables and (c) cash flows from investing activities which absorbed Euro 18.4 million, excluding the IFRS 16 effects which do not generate cash flows. The distribution of dividends and the purchase of treasury shares absorbed cash of Euro 12.5 million.
Group company current account liquidity, diversified by region and institution, increased from Euro 110.7 million at December 31, 2022 to Euro 111 million at June 30, 2023.
New mortgages were entered into in the first half of the year totalling Euro 35 million, with instalments on existing loans settled for Euro 35.8 million. A breakdown of the bank debt is provided in the Notes.
The short-term credit lines granted to the Group companies were available for a total amount at period-end of Euro 70.8 million, and all the relative lines remain permanently unused. A "Shelf Facility" line was in addition available, related to the bond loan signed by the Prudential Group companies for a total amount of approx. USD 50 million.
Aquafil Group operations directly involve - both in terms of production and distribution - the Group companies, which are assigned (depending on the case) the processing, special processing, production and sales phases for specific regions.
The main activities of the various group companies and principal events in H1 2023, broken down by each of the three product lines, were as follows:
The core business of the Aquafil Group is the production, re-processing and sale of yarn, mainly polyamide 6-based yarn, partly petroleum based and partly from regenerated ECONYL®, for the higher-quality end-markets. The Group also produces and markets polyester fibers for certain textile flooring applications.
The Group companies involved in the production and sales processes for this product line are the parent company Aquafil S.p.A., with production site in Arco (Italy), Tessilquattro S.p.A., with production based in Cares (Italy) and in Rovereto (Italy), Aquafil SLO d.o.o., with facilities in Ljubljana, Store and Ajdovscina (Slovenia), Aquafil USA Inc. with two facilities in Aquafil Drive and Fiber Drive in Cartersville (U.S.A.), Aquafil Synthetic Fibers and Polymers Co. Ltd with facilities in Jiaxing (China), Aquafil Asia Pacific Co. Ltd with facilities in Rayong (Thailand), Aquafil UK, Ltd. with facilitiesin Kilbirnie (Scotland), the commercial company Aquafil Benelux-France B.V.B.A. based in Harelbeke (Belgium) and the commercial company Aquafil Oceania Pty Ltd., Melbourne (AUS).
Group commercial operations for this product line are undertaken with industrial clients, which in turn produce for the intermediate/ end-consumer markets, whose sectors are principally (a) the "contract" markets (hotels, offices and large public environments), (b) internal high-end car floors and (c) residential textile flooring. Ongoing product and process technology innovation involves frequent updates to the yarns comprising the customer's collection; the research and development is carried out by the internal development centre in collaboration with developers within client companies and architectural studies upon the final users of carpets.
The NTF product line produces and reprocesses polyamide 6 and 66 fibers, Dryarn® polypropylene microfibers for men's and women's hosiery, knitwear and non-run fabrics for underwear, sportswear and special technical applications. The markets concern producers in the clothing, underwear and sportswear sectors, on which the main clothing brands operate.
The production/sale of fibers for textile/clothing use is undertaken by the companies Aquafil S.p.A., Aquafil SLO d.o.o. with facilities in Ljubljana and Senozece (Slovenia), Aquafil CRO d.o.o., with facilities in Oroslavje (Croatia) and Aquafil Tekstil Sanayi Ve Ticaret A. S., with commercial operations based in Istanbul (Turkey).
The percentage of NTF polyamide-6 fiber made from caprolactam obtained from the ECONYL® regeneration process continues to increase, and the product is being increasingly well-received by clothing brands that are sensitive to environmental issues.
The Group produces and sells polymers and polyamide 6 for the "engineering plastics" sectors.
The polymers are mainly produced/sold by Aquafil S.p.A., Aquafil SLO d.o.o. and Aquafil USA Inc. Cartersville (USA). The companies Tessilquattro S.p.A. and Aquafil S.p.A. also sell engineering plastics for the plastic moulding industry, with production carried out at the new production site in Rovereto (TN).
A significant proportion of polyamide-6 fibers, for both the BCF and the NTF product lines, as well as for polymers, are produced using the caprolactam from regenerated ECONYL® , a logistical-production system which obtains top-quality caprolactam from the transformation of materials, and mainly recovered industrial (pre-consumer) polyamide 6 and/or (post-consumer) materials disposed of at the end of their life cycle.
The caprolactam monomer obtained at the Ljubljana plant from the ECONYL® process supports all three product lines — BCF, NTF and polymers — as an alternative raw material to that from fossil sources, for applications (a) in textile flooring with a specific sustainability focus, (b) in clothing and accessories, in particular at the request of the leading international fashion brands more dedicated to a concrete circular economy and (c) in the design and manufacture of innovative polyamide 6 based plastic products, instead of other plastic materials that cannot be restored to their original state by way of chemical regeneration such as polyamide 6.
The ECONYL® regeneration process is fed by recovering polyamide-6 textile flooring materials and fish netting at the end of their useful lives and a series of other industrial and consumer waste materials with high polyamide-6 content. The process is completed at the facilities of Aquafil SLO d.o.o. in Ljubljana (SLO), while taking advantage of synergies within a single system of logistics and production across multiple Group companies. For the regeneration of textile flooring, certain stages of material collection and pre-treatment of used carpeting are carried out by the companies Aquafil Carpet Recycling (ACR) #1 Inc. in Phoenix, Arizona (USA), Aquafil Carpet Recycling (ACR) #2 Inc. in Woodland, California (USA), and Aquafil Carpet Collection LLC in Phoenix, Arizona (USA). The company ACR #1 is operational with the processes of extraction of nylon 6 and other by-products from the "end-of-life" carpets and subsequent regranulation in pellets in order to effectively support the ECONYL® industrial process at the Ljubljana plant. ACR #2 also undertook the extraction of nylon 6 and of other by-products at the Woodland production site from end-of-life carpets. In H2 2022, however, it was however decided to launch a reorganisation and industrial streamlining that saw the transfer of production lines to other Group sites, particularly to ACR #1's Phoenix site and Aquafil SLO d.o.o.'s Slovenian site, to improve the current production capacity, while maintaining logistics activities at the Woodland site. For the regeneration of fish netting, in addition to the company Nofir AS in Bodǿ, Norway, a European leader in the collection and treatment of end-of-life fish netting, the Group invested in the fish net supply chain in Chile, through the company Aquafil Chile, which operates on that market to support the ECONYL® process. The newly formed Acca S.p.A. will contribute to this activity, as previously described in the section regarding significant events in H1 2023.
The Slovakian company Cenon S.r.o. (Slovakia) does not undertake production activities. on January 12,2022, the company sold the assets held in Slovakia to third parties, without generating income statement impacts as the relative assets have already been fully written-down. The company is not operative and will likely be the subject of voluntary liquidation.
Aquafil Engineering GmbH, Berlin (Germany), carries out industrial chemical plant design and supply for customers outside the Group and in part for Group companies.
Aqualeuna GmbH, with registered office in Berlin (Germany), does not conduct operations-related activities and is solely the holding company, with a 100% stake, of Aquafil Engineering GmbH. The company currently has a tax dispute pending with the German Tax Agency, a detailed explanation of which may be found in the Notes.
The subsidiary Aquafil India Private Ltd. (India) does not undertake operational activities.
The main objective of the subsidiary Bluloop S.r.l. benefit company is to sell products made with ECONYL® polyamide to end consumers on the e-commerce channels. The company also has communication, training and intervention objectives on environmental and social sustainability issues in the areas in which the Aquafil Group operates.
With the other related companies to which reference is not expressly made, commercial operations are undertaken at arm's length, in consideration of the features of the goods and services rendered.
The transactions of the Aquafil Group with related parties, as defined by international accounting standard IAS 24, relating to the consolidated financial statements for the year ended June 30, 2023, are presented below. The Aquafil Group undertakes commercial and financial transactions with its related companies, consisting of transactions relating to ordinary operations and at normal market conditions, taking into account the features of the goods and services provided.
The Group has made available on its website www.aquafil.com, in the Corporate Governance section, the Related Parties Transactions Policy.
The Aquafil Group undertakes transactions with the following related parties:
The transactions between the Parent Company, its subsidiaries outside of the consolidation scope and the Aquafil Group concern financial transactions, commercial leases and transactions for the settlement of accounts receivable and payable arising from the tax consolidation of Aquafin Holding S.p.A., which includes, in addition to Aquafil S.p.A., the company Tessilquattro S.p.A.. The transactions are shown in the Notes to the Consolidated financial report.
The transactions were executed at market conditions; for a breakdown of the income statement and balance sheet amounts generated by related party transactions included in the Group consolidated financial statements at June 30, 2023, reference should be made to the financial statements (which highlight the amounts attributable to related party transactions) and the notes to the Consolidated financial report.
With the exception of that indicated above there were no other transactions or contracts with related parties which, with regard to materiality upon the financial statements, may be considered significant in terms of value or conditions.
The Aquafil Group has a Research & Development unit that manages and oversees all product and process innovation applied to BCF yarns, NTF yarns, PA6 polymers and ECONYL® and the continued upgrading and pre-industrialisation of the bio caprolactam production process.
Technological research, development and innovation for H1 2023 constitutes the natural continuation of the work carried out in the preceding years, and concerned the main stages of production and the materials used, from the production inputs to the by-products of polymerisation, spinning, reprocessing and, for ECONYL®, regeneration and recycling of materials.
A number of projects — due to their complexity — last many years and are undertaken in collaboration with outside partners; other less complex projects present results in a short timeframe.
More specifically, R&D led to actions regarding efficiency, performance, product functioning, eco-design, recycling, use of auxiliary products from natural origins, the study of micro-plastics, the development of polymerisation processes, and the sectors in areas of product application, taking advantage of outside contributions coming in the form of market input, new technologies, new materials, and the use of solutions recommended by qualified research partners.
Technological research, development and innovation concerned numerous projects, some of which began in 2023, while others began in prior years. The main projects are listed below:
The following is a list of patents that have been filed:
In 2022, the assessments from the patent offices in the various regions arrived, which continued into H1 2023 with opinions from patent offices for the following areas and countries: Brazil, EP, Eurasia, India, South Korea and the USA. Mexico and Thailand's Opinion are still outstanding, while Brazil has sent payment notifications for annual fees in connection with the patent grant. Meanwhile, in addition to the PCT publication, the patent was published in important areas such as the USA, Eurasia, and India;
g) as part of the development of the PET recycling process, on May 17, 2021 a patent application was filed in Italy with No. 102021000012617; the patent is owned by Aquafil S.p.A. with joint inventors Aquafil and the Department of Industrial Engineering of the University of Padua. On May 16, 2022, following further interesting additions in the laboratories of Aquafil and the University of Padua, the application wassubmitted to PCT Patent. The international patent (WO 2022/243832A1) was published on November 24, 2022. The opinion of the International Research Authority reviewing the PCT patent was received in August 2022, and the preparation of responses to the observations commenced with the support of experimental activities again undertaken with the Department of Engineering of Padua. In H1 2023, two opinions on PCT patent were received from the international rese-
arch authorities ISA and IPEA. The grant certificate for the Italian patent was made official by the UIBM on June 5, 2023, following responses to the European Office's opinion in March 2023. Extension activities have begun in the following regions and countries: EP, Eurasia, the USA, Canada, Mexico, Brazil, China, Japan, South Korea, Thailand, Indonesia, India, and Saudi Arabia. In all of these countries, polyester and the processes for its chemical recycling play a key role;
On May 25, 2023, the UIBM sent the opinion made through the EPO. Responses to the comments will be submitted within the 12-month deadline from the original filing, i.e. by December 9, 2023. The extension as a PCT and then national and regional extensions will also have begun by that date.
Disclosure upon the Ownership Structure is provided in the "2022 Corporate Governance and Ownership Structure Report", prepared in accordance with Article 123-bis of Legislative Decree No. 58/1998, made available at the registered office of the Company and on the Group website (http://ir.aquafil.com/ita/bilanci-relazioni).
The Company is not subject to management and co-ordination pursuant to Article 2497 and subsequent of the Civil Code.
The Parent Company Aquafin Holding S.p.A. does not exercise management and co-ordination over Aquafil as substantially operating as a holding company, without an independent organisational structure and, consequently, de facto does not exercise direct management over Aquafil S.p.A..
All of the Italian direct or indirectsubsidiaries of Aquafil S.p.A. have met the publication requirements under Article 2497-bis of the Civil Code, indicating Aquafil S.p.A. as the company exercising management and co-ordination.
As part of the treasury share purchase plan approved by the Shareholders' Meeting on October 20, 2021, it should be noted that, in January 2023, Aquafil continued to purchase shares up to a total of 1,278,450 treasury shares held, equal to 2.4961% of the share capital.
The authorisation by shareholders had a validity of 18 months from the date of the related resolution and therefore authorised the purchase, in one or more tranches, of ordinary shares up to a maximum number which, taking account of the ordinary shares which may be held in portfolio by the company and by its subsidiary, does not total more than 3% of share capital. This authorisation concluded in April 2023.
Aquafil S.p.A. is the consolidating company of the group taxation procedure, as chosen by Aquafin Holding S.p.A. for the 2021-2023 three-year period in accordance with Articles 117 to 128 of Presidential Decree 917/1986, as amended by Legs. Decree No. 344/2003. Similarly, the company Tessilquattro S.p.A. is a consolidated company within the Group taxation procedure, in accordance with the option exercised by Aquafin Holding S.p.A. as consolidating company.
In preparing the interim financialstatements of these companies, the effects of the transfer of the tax positions due to the consolidated tax accounts were taken into account; in particular, the subsequent accounts receivable from/payable to the consolidating company were recognised.
The Italian companies of the Aquafil Group have supplemented the organisation, management and control model as per Legislative Decree No. 231 of June 8, 2001, including the conduct code and operating procedures, as updated by: (a) Law No. 3 of January 9, 2019, "Measures to combat offenses against the public sector, as well as on the statute of limitations and the transparency of political parties and movements", with particular reference to the new offense as per Article 346 bis of the Italian Criminal Code - Exercising of undue influence, introduced by Article 25 of Legislative Decree 231/01; (b) Law No. 157 of December 19, 2019, "Conversion into law, with amendments, of Legislative Decree No. 124 of October 26, 2019, containing urgent provisions on tax matters and for unavoidable needs", which introduces tax offences into the catalogue as per Legislative Decree No. 231/01; (c) Legislative Decree No. 75 of July 14, 2020, "Implementation of Directive (EU) 2017/1371 on the fight against fraud to the EU's financial interests by means of criminal law".
In order to conduct impairment tests for the purpose of verifying the recoverability of assets, the Parent Company has adopted specific, formal procedures as approved by the Board of Directors on February 15, 2019.
The EMEA marketsharply contracted in Q2, while demand in the other regionssubstantially held up on the same period of the previous year.
In Europe, in addition, the price of the Group's main raw material has suddenly dropped by nearly 30% since the beginning of the year. This decrease resulted in a misalignment between market prices and the unitary values of stock built up in 2022, with a significant although temporary — impact on the Group margin.
Asia and the U.S. are expected to confirm a substantial maintenance of market demand in the second half of the year. The EMEA market, on the other hand, remains extremely sluggish, particularly for clothing fibers, although the quantities sold of carpet fibers and polymers is expected to recover. In addition, technopolymer market demand is generally recovering, which will enable our new product line to hit its planned targets by the end of the current year.
In this environment, the Group continues the major debt containment initiatives introduced in 2022, in addition to the actions to cut costs. Both the level of debt and margins are constantly monitored in order to be able to take appropriate actions if necessary.
Arco, August 31, 2023
for the Board of Directors The Chairperson Full Professor Chiara Mio
Condensed Consolidated Half-Year Financial Statements at June 30, 2023
| (in Euro thousands) | Note | At June 30, 2023 | At December 31, 2022 |
|---|---|---|---|
| Intangible assets | 5.1 | 20,827 | 21,596 |
| Goodwill | 5.1 | 15,359 | 15,647 |
| Property, plant & equipment | 5.2 | 243,825 | 247,469 |
| Financial assets | 5.3 | 798 | 831 |
| of which parent companies, related parties, associates | 318 | 318 | |
| Investments valued at equity | 5.3 | 1,018 | 1,018 |
| Other assets | 5.4 | 304 | 426 |
| Deferred tax assets | 5.5 | 11,326 | 11,519 |
| Total non-current assets | 293,457 | 298,506 | |
| Inventories | 5.6 | 217,965 | 260,808 |
| Trade receivables | 5.7 | 27,150 | 28,553 |
| of which parent companies, related parties | 163 | 376 | |
| Financial assets | 5.3 | 6,481 | 9,964 |
| Tax receivables | 5.8 | 642 | 580 |
| Other assets | 5.9 | 16,130 | 15,862 |
| of which parent companies, related parties | 3,744 | 247 | |
| Cash and cash equivalents | 5.10 | 111,001 | 110,682 |
| Total current assets | 379,368 | 426,449 | |
| Total assets | 672,826 | 724,955 | |
| Share capital | 5.11 | 49,722 | 49,722 |
| Reserves | 5.11 | 103,620 | 96,528 |
| Group net result | 5.11 | (4,136) | 29,151 |
| Total parent share. equity | 149,207 | 175,401 | |
| Minority interest shareholders' equity | 5.11 | 1 | 1 |
| Minority interest net profit | 5.11 | 0 | 0 |
| Total consolidated net equity | 149,208 | 175,402 | |
| Employee benefits | 5.12 | 4,866 | 5,192 |
| Financial liabilities | 5.13 | 275,378 | 285,385 |
| of which parent companies, related parties | 4,350 | 5,262 | |
| Provisions for risks and charges | 5.14 | 1,226 | 1,975 |
| Deferred tax liabilities | 5.5 | 9,232 | 9,237 |
| Other liabilities | 5.15 | 7,303 | 8,985 |
| Total non-current liabilities | 298,005 | 310,774 | |
| Financial liabilities | 5.13 | 92,756 | 83,146 |
| of which parent companies, related parties | 2,706 | 2,957 | |
| Current tax payables | 5.8 | 2,570 | 3,630 |
| Trade payables | 5.16 | 105,035 | 126,840 |
| of which parent companies, related parties | 350 | 270 | |
| Other liabilities | 5.15 | 25,251 | 25,163 |
| of which parent companies, related parties | 0 | 230 | |
| Total current liabilities | 225,613 | 238,779 | |
| Total shareholders' equity and liabilities | 672,826 | 724,955 |
| (in Euro thousands) | Note | At June 30, 2023 of which non-recurring | At June 30, 2022 of which non-recurring | ||
|---|---|---|---|---|---|
| Revenues | 6.1 | 311,117 | 0 | 351,009 | 525 |
| of which related parties | 151 | 26 | |||
| Other revenues and income | 6.2 | 4,947 | 3 | 2,413 | 114 |
| Total revenues and other revenues and income | 316,064 | 3 | 353,422 | 639 | |
| Cost of raw materials and changes to inventories | 6.3 | (158,938) | 0 | (158,365) | (294) |
| Service costs and rents, leases and similar costs | 6.4 | (67,864) | (1,018) | (81,957) | (738) |
| of which related parties | (264) | (230) | |||
| Personnel costs | 6.5 | (63,019) | (515) | (64,898) | (811) |
| Other costs and operating charges | 6.6 | (1,764) | (114) | (2,446) | (115) |
| of which related parties | (35) | (35) | |||
| Amortisation, depreciation & write-downs | 6.7 | (24,287) | (23,756) | ||
| Provisions and write-downs | 6.8 | 115 | 174 | ||
| (Write-down)/recovery of financial assets (receivables) | 6.8 | 62 | 26 | ||
| Increase in internal work capitalised | 6.9 | 3,736 | 2,347 | ||
| EBIT | 4,106 | (1,645) | 24,548 | (1,321) | |
| Investment income/charges | 0 | (70) | |||
| of which related parties | 0 | 90 | |||
| Financial income | 6.10 | 339 | 2,987 | ||
| Financial charges | 6.11 | (7,505) | (3,862) | ||
| of which related parties | (87) | (64) | |||
| Exchange gains/losses | 6.12 | 983 | 528 | ||
| Profit/(loss) before taxes | (2,078) | (1,645) | 24,131 | (1,321) | |
| Income taxes | 6.13 | (2,058) | (6,457) | ||
| Profit/(loss) for the period | (4,136) | (1,645) | 17,674 | (1,321) | |
| Minority interest net profit | 0 | 0 | |||
| Group Net Profit/(loss) | (4,136) | (1,645) | 17,674 | (1,321) | |
| Basic earnings per share | 6.15 | 0 | 0.35 | ||
| Diluted earnings per share | 6.15 | 0 | 0.35 |
| (in Euro thousands) | Note | At June 30, 2023 | At June 30, 2022 |
|---|---|---|---|
| Profit/(loss) for the period | 5.11 | (4,136) | 17,674 |
| Actuarial gains/(losses) | 16 | 280 | |
| Tax effect from actuarial gains and losses | (4) | (67) | |
| Other income items not to be reversed to income statement in subsequent periods | 12 | 213 | |
| Currency difference from conversion of financial statements in currencies other than the Euro | (9,569) | 13,805 | |
| Total other components of comprehensive income | (9,556) | 14,018 | |
| Comprehensive profit/(loss) for the period | (13,692) | 31,693 | |
| Minority interest comprehensive income | 0 | 0 | |
| Group comprehensive income/(loss) for the period | (13,692) | 31,693 |
| (in Euro thousands) | Note | At June 30, 2023 | At June 30, 2022 |
|---|---|---|---|
| Operating activities | |||
| Profit/(loss) for the period | 5.11 | (4,136) | 17,674 |
| of which related parties: | (234) | (213) | |
| Income taxes | 6.13 | 2,058 | 6,457 |
| Investment income and charges | 0 | 70 | |
| of which related parties: | 0 | (90) | |
| Financial income | 6.10 | (339) | (2,987) |
| Financial charges | 6.11 | 7,505 | 3,862 |
| of which related parties: | 87 | 64 | |
| Exchange gains/(losses) | 6.12 | (983) | (528) |
| Asset disposal (gains)/losses | (172) | (74) | |
| Net provisions | 6.8 | (115) | (174) |
| Net provisions (Doubtful debt provision) | 6.8 | (62) | (26) |
| Amortisation, depreciation and write-downs | 6.7 | 24,287 | 23,757 |
| Cash flow from operating activities before working capital changes | 28,043 | 48,030 | |
| Decrease/(Increase) in inventories | 5.6 | 42,846 | (60,647) |
| Increase/(Decrease) in trade payables | 5.16 | (21,805) | 31,120 |
| of which related parties: | 80 | (103) | |
| Increase/(Decrease) in trade receivables | 5.7 | 1,466 | (10,157) |
| of which related parties: | 213 | 33 | |
| Changes to assets and liabilities | (4,644) | 4,764 | |
| of which related parties: | (3,497) | 3,163 | |
| Net paid financial charges | (6,570) | (875) | |
| Income taxes paid | (5,639) | (896) | |
| Utilisation of provisions | (971) | (1,317) | |
| Cash flow generated/(absorbed) from operating activities (A) | 32,726 | 10,021 | |
| Investing activities | |||
| Investments in tangible assets | 5.2 | (16,273) | (15,889) |
| Disposal of tangible assets | 5.2 | 533 | 1,077 |
| Investments in intangible assets | 5.1 | (2,500) | (1,316) |
| Disposal of intangible assets | 5.1 | ||
| Investments in financial assets | 5.3 | (151) | (52) |
| Dividends received | 0 | 91 | |
| Disposal of financial assets | (160) | ||
| Cash flow generated by investing activities (B) | (18,390) | (16,249) | |
| Financing activities | |||
| Drawdown non-current bank loans and borrowings | 5.13 | 35,000 | 31,000 |
| Repayment non-current bank loans and borrowings | 5.13 | (35,821) | (25,338) |
| Net changes in current and non-current financial assets and liabilities (including IFRS 16) | 5.13 | 3,492 | 1,427 |
| of which related parties: | (1,163) | 1,126 | |
| Non-cash change IFRS 16 | (4,063) | (6,246) | |
| Distribution dividends | (12,027) | (6,045) | |
| Acquisition of treasury shares | (598) | (4,285) | |
| Cash flow from generated/(absorbed) by financing activities (C) | (14,016) | (9,487) | |
| Net cash flow in the period (A) + (B) + (C) | 319 | (15,715) | |
| Opening cash and cash equivalents | 110,682 | 152,656 | |
| Closing cash and cash equivalents | 111,001 | 136,941 | |
| Share capital | Legal reserve | Translation | Share premium | Listing cost | FTA | |
|---|---|---|---|---|---|---|
| (in Euro thousands) | reserve | reserve | reserve | Reserve | ||
| December 31, 2021 | 49,722 | 700 | (8,052) | 19,975 | (3,287) | (2,389) |
| Other changes | ||||||
| Allocation of prior-year result | 558 | |||||
| Distribution dividends | ||||||
| Share capital increase | ||||||
| Profit for the period | ||||||
| Actuarial gains/(losses) employee benefits | ||||||
| Translation difference | 13,805 | |||||
| Total comprehensive income for the period | 13,805 | |||||
| June 30, 2022 | 49,722 | 1,258 | 5,753 | 19,975 | (3,287) | (2,389) |
| December 31, 2022 | 49,722 | 1,258 | (3,095) | 19,975 | (3,287) | (2,389) |
| Other changes | ||||||
| Allocation of prior-year result | ||||||
| Distribution dividends | ||||||
| Profit/(loss) for the period | ||||||
| Actuarial gains/(losses) employee benefits | ||||||
| Translation difference | (9,569) | |||||
| Total comprehensive income/(loss) for the period | (9,569) | |||||
| June 30, 2023 | 49,722 | 1,258 | (12,663) | 19,975 | (3,287) | (2,389) |
| Total Parent Company | Net result | Retained | Treasury | IAS 19 |
|---|---|---|---|---|
| shareholders net equity | earnings | shares | Reserve | |
| 152,101 | 10,670 | 88,367 | (2,545) | (1,060) |
| (4,081) | 204 | (4,285) | ||
| 0 | (10,670) | 10,112 | ||
| (6,046) | (6,046) | |||
| 0 | ||||
| 17,674 | 17,674 | |||
| 213 | 213 | |||
| 13,805 | ||||
| 31,691 | 17,674 | 0 | 213 | |
| 173,668 | 17,674 | 92,617 | (6,830) | (847) |
| 175,401 | 29,151 | 92,498 | (8,015) | (417) |
| (474) | 124 | (598) | ||
| 0 | (29,151) | 29,151 | ||
| (12,027) | (12,027) | |||
| (4,136) | (4,136) | |||
| 12 | 12 | |||
| (9,569) | ||||
| (13,692) | (4,136) | 0 | 12 | |
| 149,207 | (4,136) | 109,745 | (8,612) | (405) |
Aquafil S.p.A. ("Aquafil", "Company" or "Parent company" and, together with itssubsidiaries, "Group" or "Aquafil Group") is a company listed on the Italian Stock Exchange, STAR Segment since December 4, 2017, resulting from the business combination through merger by incorporation of Aquafil S.p.A. (pre-merger), founded in 1969 in Arco (TN) and renowned for the production and distribution of fibers and polymers, principally polyamide, into Space3 S.p.A., as an Italian registered Special Purpose Acquisition Company (SPAC), with efficacy from December 4, 2017.
The majority shareholder of Aquafil S.p.A. is Aquafin Holding S.p.A., with registered office in Via Leone XIII No. 14, 20145 Milan, Italy, which does not exercise management and co-ordination activities. The ultimate Parent Company, which draws up specific consolidated financial statements, is GB&P S.r.l. with registered office in Via Leone XIII No. 14, 20145 Milan, Italy.
The Aquafil Group produces and sells fibers and polymers, principally polyamide 6, on a global scale through the:
Group products are also sold on the market under the ECONYL® brand, which offers the Group's products obtained by regenerating industrial waste and end-of-life products.
The Group enjoys a consolidated presence in Europe, the United States and Asia.
The consolidated half-year report of the Aquafil Group at June 30, 2023 and for the six months ended at that date (hereafter the "Half-Year Financial Report") was prepared in accordance with Article 154-ter paragraph 2 of Legislative Decree No. 58/98 - CFA — and subsequent amendments and supplements and comprises the following documents:
These consolidated financialstatements(hereafter the "financialstatements") include the comparative figures, as per IAS 34, i.e. (i) the figures at December 31, 2022 for the consolidated balance sheet (ii) the figures relating to H1 2022 for the consolidated income statement, the comprehensive consolidated income statement, the consolidated cash flow statement and the movements in consolidated shareholders' equity pursuant to IAS 34. The Half-Year Financial Report was prepared in Euro, the functional currency of the Group.
The amounts reported in the financial statements and in the accompanying tables in the explanatory notes are expressed in thousands of Euro, unless otherwise indicated.
The Half-Year Financial Report was prepared in accordance with international accounting standards (IFRS/IAS) issued by the International Accounting Standard Board (IASB),recognised by the European Union pursuant to regulation (EU) No. 1606/2002 and in force at the reporting date, the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC), as well as the interpretations of the Standing Interpretations Committee (SIC), in force at the same date. In particular, the Half-Year Financial Report was prepared in accordance with IAS 34 "Interim Financial Statements", issued by the International Accounting Standard Board (IASB).
The accounting policies adopted in the preparation of these financial statements are the same as those adopted for the preparation of the consolidated financial statements at December 31, 2022, to which reference should be made.
Against this backdrop we note that the introduction of the new IFRS 17 standard, applicable as of January 1, 2023, had no impact on the Group.
The explanatory notes, in accordance with IAS 34, are reported in condensed format and do not include all the disclosures required for annual accounts, as they refer exclusively to those items which, for amount, composition or variation, are essential for the full understanding of the financial situation, equity and results of the Group at June 30, 2023. The Half-Year Financial Report should therefore be read together with the 2022 Group Annual Financial Report. The Half-Year Financial Report at June 30, 2023 of the Aquafil Group was subject to a limited audit by PricewaterhouseCoopers and was approved by the Board of Directors on August 31, 2023, which authorised its publication according to the terms and means required by current regulations.
The Group's business is not impacted by seasonal factors. Despite this, we report that typically there is a small drop in production in second half of the year due to the lower number of working days in this period compared to the first half of the year. This generally results in a small decrease in revenues and costs and in the margin in the second half of the year compared to the first half of the year.
As previously reported in the interim Directors' Report, on May 5, 2023, the World Health Organization officially declared the health emergency over. This had begun on March 11, 2020, when it was first declared a pandemic. Over the past few years, the Aquafil Group has been able to carefully manage the developments of the pandemic from the very beginning, promptly taking the necessary measures to prevent, control and contain the virus at its facilities, at a global level. Its objective has always been to protect the health of its employees and collaborators by constantly monitoring developments, including the spread of variants, at all operational locations globally, confirming the key objective of protecting the health of its employees and collaborators. The health crisis did not substantially impact the results for the period, nor generated particular difficulties.
The conflict between Russia and Ukraine that began on February 24, 2022 has brought severe repercussions to Europe in terms of economic instability, resulting in significant inflation for the broad range of products — caused particularly by the sudden unavailability of imports from Russia and Belarus of the products subject to sanctions and the high price levels of energy components — and increased shipping costs by sea and on land.
Against this backdrop, the Aquafil Group immediately reacted by, on the one hand, seeking regional diversification where possible of raw material procurement sources and, on the other hand, by recovering the incremental purchase and service cost components on the products sold within the three product lines.
With regards to commercial relations with parties located in the countries involved in the conflict, the Group does not have a dependence on particular products and/or suppliers/customers in these areas which may impact upon operations. No direct consequences were therefore felt from the stoppage of import/exports of the products and businesses subject to limitations.
Specifically, we note that the Group had no business dealings with Russian suppliers of caprolactam flakes during the six-month period in question, having permanently discontinued supply as early as October 2022.
Group management has constantly monitored the real and potential impact of the Covid-19 emergency and the Russia-Ukraine conflict on the Group's business activities, financial position, credit risk, liquidity risk and operating performance. As regards credit risk, the Group has consistently implemented a hedging strategy which, as part of a specific risk policy, makes use of insurance policies agreed with leading insurance companies and carries out accurate daily assessments of the levels of exposure to customers; at the date of this report, the credit risk remains under control, despite reductions in insurance ceilings. Changes in the situation are monitored by the Credit Committee.
As regards liquidity risk, which is constantly monitored by the Risk Control Committee, the Group operates a mitigation strategy that combines careful planning and monitoring of its financial structure to ensure solvency both in normal operating conditions and in crisis situations. This strategy is designed to guarantee ample liquidity through the generation of cash from business activities, and access to new medium-term financial resources that allow available short-term credit lines to remain unused.
For all other additional information required in relation to financial risk management, reference should be made to the Group's annual financial statements at December 31, 2022 for a detailed analysis.
The Aquafil Group passionately pursues its environmental, social and governance policy and takes an active role in the community in which it operates.
The Group's organisational structure has evinced a long-standing interest in the environmental impact of processes and products, and continuously assesses possible avenues for improvement, with an approach firmly focused on sustainability and circularity.
In particular, this structure considers the consequences of climate change for its activities, processes and local organisations, the risk of which is consistently monitored and assessed. It can thus be stated that no significant impacts are currently expected on operating activities in the regions where the Group operates.
The Consolidated Financial Statements includes the equity and financial position and results of the Parent Company and of the subsidiaries and/or associated companies, prepared on the basis of the relative accounting entries and, where applicable, appropriately adjusted in line with international accounting standards IAS/IFRS.
The following table summarises, with reference to the subsidiaries and associated companies, details on the Company name, registered office, share capital, profit for the period, functional currency and the direct and indirect holding of the company and the consolidation method applied at June 30, 2023:
| Company | Registered office | Share capital in foreign currency |
June 30, 2023 Net Profit (Loss) |
Currency | Group holding |
% of votes |
Consoli dation method |
|---|---|---|---|---|---|---|---|
| Parent Company: | |||||||
| Aquafil S.p.A. | Arco (IT) | 49,722,417 | (3,812,361) | Euro | |||
| Subsidiary companies: | |||||||
| Aquafil SLO d.o.o. | Ljubjiana (SLO) | 50,135,728 | (9,511,030) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil USA Inc. | Cartersville (USA) | 77,100,000 | 7,238,512 | US Dollar | 100.00% | 100.00% | Line-by-line |
| Tessilquattro S.p.A. | Arco (IT) | 3,380,000 | (2,595,461) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Jiaxing Co. Ltd. | Jiaxing (CHN) | 531,408,631 | 56,735,345 | Yuan | 100.00% | 100.00% | Line-by-line |
| Aquafil UK Ltd. | Ayrshire (UK) | 3,669,301 | (826,633) | UK Sterling | 100.00% | 100.00% | Line-by-line |
| Aquafil CRO d.o.o. | Oroslavje (CRO) | 9,436,592 | (616,614) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Asia Pacific Co. Ltd. | Rayoung (THA) | 53,965,000 | 21,325,561 | Baht | 99.99% | 99.99% | Line-by-line |
| Aqualeuna GmbH | Leuna (GER) | 2,325,000 | (579,044) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Engineering GmbH | Berlino (GER) | 255,646 | (527,010) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Tekstil Sanayi Ve Ticaret A.S. | Istanbul (TUR) | 1,512,000 | (2,545,877) | Turkish Lira | 99.99% | 99.99% | Line-by-line |
| Aquafil Benelux France B.V.B.A. | Harelbake (BEL) | 20,000 | 34,722 | Euro | 100.00% | 100.00% | Line-by-line |
| Cenon S.r.o. | Zilina (SLO) | 26,472,682 | (40,658) | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Carpet Recycling #1, Inc. | Phoenix (USA) | 250,000 | (2,820,737) | US Dollar | 100.00% | 100.00% | Line-by-line |
| Aquafil Carpet Recycling #2, Inc. | Woodland California (USA) | 250,000 | (77,555) | US Dollar | 100.00% | 100.00% | Line-by-line |
| Aquafil Oceania Ltd. | Melbourne (AUS) | 49,990 | 3,515 | Aus. Dollar | 100.00% | 100.00% | Line-by-line |
| Aquafil India Private Ltd. | New Dehli (IND) | 85,320 | 0 | Indian Rupee | 99.97% | 99.97% | Line-by-line |
| Aquafil O'Mara Inc. | North Carolina (USA) | 36,155,327 | 212,189 | US Dollar | 100.00% | 100.00% | Line-by-line |
| Aquafil Carpet Collection LLC | Phoenix (USA) | 3,400,000 | 1,360,739 | US Dollar | 100.00% | 100.00% | Line-by-line |
| Aquafil Japan Corp. | Chiyoda (JP) | 150,000,000 | (116,497,704) | Japanese Yen | 100.00% | 100.00% | Line-by-line |
| Bluloop S.r.l. Benefit Company | Arco (IT) | 50,000 | 23,129 | Euro | 100.00% | 100.00% | Line-by-line |
| Aquafil Chile S.p.A. | Santiago del Chile (CL) | 351,576,000 | (95,200,868) | Chilean Peso | 100.00% | 100.00% | Line-by-line |
| Associated companies: | |||||||
| Nofir AS | Bodo (NO) | 663,700 (*) | 929,083 (*) | Norwegian Krone | 31.66% | 31.66% | Equity |
| Companies under joint control: | |||||||
| Acca S.p.A. | Santiago del Chile (CL) | 1,000,000 | (**) | Chilean Peso | 50% | 50% | Equity |
(*) Data at December 31, 2022.
(**) Company no longer operative.
The only change in the Aquafil Group consolidation scope in the period concerned the incorporation of Acca S.p.A. on January 18, 2023, which represents a joint venture between Aquafil Chile S.p.A. and its other equal partner Atando Cabos Chile S.p.A.. The company has its registered office in Santiago, Chile, and share capital of CLP 1 million. Its corporate purpose is the acquisition, storage and recycling of fishing nets, nautical ropes and other plastic waste.
The main criteria adopted by the Group for the definition of the consolidation scope and the relative consolidation principles did not change compared to those applied for the consolidated financial statements at December 31, 2022.
The financial statements of subsidiaries are prepared in the primary currency in which they operate. The rules for the translation of financial statements of companies in currencies other than the functional currency of the Euro are as follows:
The exchange rates utilised for the conversion of these financial statements are shown in the table below:
| June 2023 | December 2022 | June 2022 | ||||
|---|---|---|---|---|---|---|
| Period-end rate | Average rate | Period-end rate | Average rate | Period-end rate | Average rate | |
| US Dollar | 1.09 | 1.08 | 1.07 | 1.05 | 1.04 | 1.09 |
| Croatian Kuna | 7.54 | 7.53 | 7.53 | 7.54 | ||
| Chinese Yuan | 7.90 | 7.49 | 7.36 | 7.08 | 6.96 | 7.08 |
| Turkish Lira | 28.32 | 21.57 | 19.96 | 17.41 | 17.32 | 16.26 |
| Baht | 38.48 | 36.96 | 36.84 | 36.86 | 36.75 | 36.86 |
| UK Sterling | 0.86 | 0.88 | 0.89 | 0.85 | 0.86 | 0.84 |
| Japanese Yen | 157.16 | 145.76 | 140.66 | 138.03 | 141.54 | 134.31 |
| Australian Dollar | 1.64 | 1.60 | 1.57 | 1.52 | 1.51 | 1.52 |
| Chilean Peso | 872.59 | 871.11 | 913.82 | 917.86 |
Transactions in currencies other than the Euro are recognised at the exchange rate at the date of the transaction. Assets and liabilities denominated in currencies other than the Euro are subsequently adjusted to the exchange rate at the reporting date. Exchange differences are recognised to the income statement under "Exchange gains and losses".
No business combinations were undertaken in the period.
The impairment (or recoverability) test assesses whether there exist any indications that an asset may have incurred a reduction in value. For goodwill and any other indefinite useful life intangible assets an assessment should be made at least annually that their recoverable value is at least equal to the book value and, when considered necessary, or rather in the presence of trigger events (IAS 36 paragraph 9), the impairment test must be undertaken more frequently.
The goodwill arising from the business combination was subject to a recoverability test as per IAS 36. In particular, it is noted that the recoverable value of a non-current asset is based on the estimates and on the assumptions utilised for the determination of the cash flows and of the discount rate applied. Where it is considered that the book value of a non-current asset has incurred a loss in value, the asset is written-down up to the relative recoverable value, estimated with reference to its utilisation and any future disposal, based on the most recent business plans.
In assessing the recoverable value of property, plant and equipment, of investment property, of intangible assets and of goodwill, the Group generally applies the criterion of the value in use.
The value in use is the present value of the expected future cash flows to be derived from an asset. In defining the value in use, the expected future cash flows are discounted utilising a pre-tax rate that reflects the current market assessment of the time value of money, and the specific risks of the asset.
The estimated future cash flows utilised to determine the value in use is based on the most recent business plans, approved by management and containing forecasts for volumes, revenues, operating costs and investments. For the sole purpose of verifying the recoverability of the value of the assets, the figures in the business plan have been adjusted on the basis of a number of possible scenarios to reflect the updated market situation and the resulting economic and financial forecasts. These forecasts cover the period of the next three years; consequently, the cash flows relating to the subsequent years are determined on the basis of a growth rate which does not exceed the average growth rate for the sector and the country.
Where the book value of an asset is higher that its recoverable value a loss in value is recognised which is recorded in the income statement under "Amortisation, depreciation and write-downs".
The loss in value of a cash generating unit (the Aquafil Group has, due to the nature of its business and its production process, only one CGU) is firstly attributed to the reduction in the carrying value of any goodwill allocated and, thereafter, to a reduction of other assets, in proportion to their carrying value.
When the reasons for the write-down no longer exist, the carrying value of the asset is restated through the income statement, in the account "Amortisation, depreciation & write-downs", up to the value at which the asset would be recorded if no write-down had taken place and amortisation or depreciation had been recorded.
The original value of the goodwill is not restated even when in subsequent years the reasons for the reduction in value no longer exist.
The tables below illustrate the breakdown of financial assets and liabilities of the Group required by IFRS 7, as per the categories identified by IAS 39, at June 30, 2023:
| (in Euro thousands) | Financial assets and liabilities measured at fair value through P&L |
Loans and receivables |
AFS financial assets |
Financial liabilities at amortised cost |
Total |
|---|---|---|---|---|---|
| Current and non-current financial assets | 3,465 | 3,814 | 0 | 0 | 7,279 |
| Trade receivables | 27,150 | 27,150 | |||
| Current tax receivables | 0 | 642 | 0 | 0 | 642 |
| Other current & non-current assets | 0 | 16,434 | 0 | 0 | 16,434 |
| Cash and cash equivalents | 111,001 | 0 | 0 | 0 | 111,001 |
| Total | 114,466 | 48,040 | 0 | 0 | 162,506 |
| Current and non-current financial liabilities | 0 | 0 | 0 | 368,133 | 368,133 |
| Trade payables | 0 | 0 | 0 | 105,035 | 105,035 |
| Other current and non-current liabilities | 0 | 0 | 0 | 32,555 | 32,555 |
| Total | 0 | 0 | 0 | 505,723 | 505,723 |
The other financial assets and liabilities are short-term and regulated at market interest rates and therefore the book value is considered to reasonably approximate fair value.
The fair value measurement of the financial instruments is undertaken applying IFRS 13 "Fair value measurement" (IFRS 13). This standard identifies the following fair value hierarchy which reflect the importance of the inputs used in the relative measurement.
The methods applied are broken down into the following levels, based on the information available:
The fair value calculation is determined in accordance with the methods classified in Level 2 and the general criterion utilised for this calculation is the present value of the expected future cash flows of the instrument subject to measurement — a method commonly applied in financial practice. There were no transfers between hierarchical levels of the fair value in the period considered.
The table below summarises the assets and liabilities measured at fair value at June 30, 2023, on the basis of the level which reflects the inputs utilised in the determination of the fair value.
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Derivative financial instruments – Liabilities | 0 | 0 |
| Derivative financial instruments – Assets | 3,465 | 4,063 |
| Total | 3,465 | 4,063 |
For the purposes of IFRS 8 - Operating Segments, Group activity is identifiable in a single operating segment.
In fact, the Group structure identifies a strategic and singular vision of the business and this representation is consistent with the manner in which management takes its decisions, allocates resources and defines the communication strategy. Dividing the business into separate divisions is therefore currently viewed as detrimental to its economic interests.
The breakdown in the account and changes in the period were as follows:
| (in Euro thousands) | Development costs |
Patents & property rights |
Trademarks, concessions and licenses |
Other intangible assets |
Intangible assets in progress |
Non Contractual Customer relationships |
Total |
|---|---|---|---|---|---|---|---|
| December 31, 2021 | 4,660 | 52 | 359 | 4,789 | 10,295 | 3,397 | 23,551 |
| Historic cost | 6,370 | 5,213 | 4,767 | 19,485 | 10,295 | 6,272 | 52,401 |
| Accumulated depreciation | (1,710) | (5,162) | (4,408) | (14,696) | (2,875) | (28,850) | |
| Reclassifications | 0 | 0 | 159 | 9,805 | (9,798) | 0 | 166 |
| Increases | 1,675 | 0 | 60 | 1,437 | 991 | 0 | 4,163 |
| Decreases | 0 | 0 | 0 | 0 | (132) | 0 | (132) |
| Amortisation | (1,482) | 0 | (108) | (3,617) | 0 | (797) | (6,004) |
| Exchange diff. - Historic cost | 0 | (1) | (120) | 24 | 0 | (139) | (236) |
| Exchange diff. - Accumulated depreciation | 0 | 1 | 1 | (6) | 0 | 94 | 90 |
| December 31, 2022 | 4,852 | 52 | 350 | 12,432 | 1,355 | 2,555 | 21,596 |
| Historic cost | 8,044 | 5,212 | 5,152 | 30,692 | 1,355 | 6,132 | 56,587 |
| Accumulated depreciation | (3,192) | (5,160) | (4,802) | (18,260) | 0 | (3,577) | (34,991) |
| Reclassifications | 0 | 0 | 1 | 79 | (79) | 0 | 1 |
| Increases | 1,797 | 0 | 2 | 156 | 545 | 0 | 2,500 |
| Amortisation | (981) | 0 | (204) | (1,700) | 0 | (377) | (3,262) |
| Exchange diff. - Historic cost | 0 | 0 | 110 | (4) | (1) | (419) | (314) |
| Exchange diff. - Accumulated depreciation | 0 | 0 | 40 | 1 | 0 | 264 | 306 |
| June 30, 2023 | 5,668 | 52 | 300 | 10,965 | 1,820 | 2,023 | 20,827 |
| Historic cost | 9,841 | 5,212 | 5,155 | 30,859 | 1,820 | 5,713 | 58,600 |
| Accumulated depreciation | (4,173) | (5,160) | (4,855) | (19,894) | 0 | (3,690) | (37,773) |
"Other intangible assets" mainly includes the costs of development projects incurred by the Parent Company for the digitization of processes.
The increases in the period, overall amounting to Euro 2.5 million, mainly relate to:
Goodwill was Euro 15,359 thousand at June 30, 2023. This figure includes the goodwill recognised on the Aquafil O'Mara business combination in 2019 and the goodwill on the acquisition in 2020 of Aquafil Carpet Recycling, now Aquafil Carpet Collection LLC.
It should also be noted that the goodwill related to Aquafil O'Mara and Aquafil Carpet Collection LLC, having been recognised by the direct subsidiary Aquafil USA, was negatively affected by the translation from Dollars to Euro as part of the consolidation process.
This value representsthe excess between the consideration transferred, measured at fair value at the acquisition date, assubsequently updated, compared to the net value of the identifiable assets and liabilities of the purchase measured at fair value.
After initial recognition the goodwill is not amortised but subject to an annual impairment test as described in the previous paragraph "Impairment test - verification of recoverability".
In accordance with the provisions of IAS 36, the Group therefore undertook a specific impairment test in order to verify the recoverability of the net capital employed, including the value of goodwill registered.
The impairment test was carried out determining the value in use with the discounted cash flow method (DCF) net of income taxes in line with the post-tax discount rate utilised.
The growth rate (g) applied is 2.7%, equal to the average forecast global growth from 2023, while the discounting of the cash flows was carried out on the basis of a weighted average cost of capital which reflects the current market assessment of the cost of money. The value identified was 8.85%.
From the impairment test carried out, no adjustments are required to the value of the goodwill or other net working capital items.
The breakdown in the account and changes in the period were as follows:
| (in Euro thousands) | Land & buildings |
Plant & equipment |
Industrial and commercial equipment |
Other assets | Assets in progress |
Investment property |
Total before RoU |
Right of-Use |
Total |
|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | 54,769 | 119,935 | 381 | 1,775 | 45,020 | 344 | 222,224 | 18,265 | 240,489 |
| Historic cost | 126,870 | 499,888 | 10,503 | 7,257 | 45,020 | 793 | 690,331 | 35,855 | 726,186 |
| Accumulated depreciation | (72,102) | (379,953) | (10,122) | (5,482) | 0 | (449) | (468,108) | (17,591) | (485,699) |
| Change in consolidation scope | 0 | 9 | 0 | 0 | 28 | 0 | 37 | 0 | 37 |
| Reclassifications | 1,873 | 39,134 | 47 | 38 | (41,280) | 0 | (188) | 0 | (188) |
| Increase | 371 | 10,119 | 310 | 489 | 23,574 | 0 | 34,863 | 10,545 | 45,408 |
| Decreases | (8) | (23) | 0 | (5) | (163) | 0 | (199) | (885) | (1,084) |
| Depreciation | (4,374) | (28,697) | (137) | (589) | 0 | (12) | (33,809) | (8,329) | (42,138) |
| Exchange diff. - Historic cost | 2,203 | 4,748 | (25) | 141 | 1,244 | 0 | 8,311 | 747 | 9,058 |
| Exchange diff. - Accumulated | 65 | (3,740) | (2) | (153) | 0 | 0 | (3,830) | (283) | (4,113) |
| depreciation | |||||||||
| December 31, 2022 | 54,898 | 141,485 | 574 | 1,696 | 28,423 | 333 | 227,407 | 20,060 | 247,467 |
| Historic cost | 128,288 | 543,135 | 10,798 | 7,690 | 28,423 | 793 | 719,127 | 36,122 | 755,249 |
| Accumulated depreciation | (73,390) | (401,650) | (10,224) | (5,994) | (460) | (491,718) | (16,062) | (507,780) | |
| Reclassifications | 295 | 3,862 | 14 | 51 | (4,235) | 0 | (13) | 0 | (13) |
| Increases | 47 | 1,481 | 8 | 228 | 14,509 | 0 | 16,273 | 5,942 | 22,215 |
| Decreases | (0) | (331) | 0 | (30) | 0 | 0 | (361) | (1,878) | (2,239) |
| Depreciation | (1,805) | (14,348) | (77) | (294) | 0 | (6) | (16,529) | (4,495) | (21,024) |
| Exchange diff. - Historic cost | (739) | (5,267) | (7) | (195) | (292) | 0 | (6,500) | (332) | (6,832) |
| Exchange diff. - Accumulated depreciation |
274 | 3,630 | 6 | 105 | 0 | 0 | 4,015 | 235 | 4,250 |
| June 30, 2023 | 52,970 | 130,512 | 519 | 1,561 | 38,405 | 327 | 224,293 | 19,532 | 243,825 |
| Historic cost | 127,885 | 537,293 | 10,805 | 6,957 | 38,405 | 793 | 722,138 | 35,742 | 757,880 |
| Accumulated depreciation | (74,915) | (406,781) | (10,287) | (5,395) | 0 | (466) | (497,845) | (16,211) | (514,055) |
The increases in the year, excluding the effect of changes in "Right-of-use", amounted to Euro 16.3 million and mainly refer to:
The recoverability of all assets, including investments not yet definitively operative, was verified with an impairment test carried out on the only Aquafil Group CGU.
The table below, in accordance with IFRS 16, presents the right-of-use of the non-current asset subject to the leasing contract. In particular this refers to buildings, equipment and transport and motor vehicles as illustrated in the table below:
| (in Euro thousands) | Right-of-Use buildings |
Right-of-Use equipment and transport vehicles |
Right-of-Use motor vehicles |
Right-of-Use other |
Total |
|---|---|---|---|---|---|
| December 31, 2021 | 14,237 | 2,887 | 1,084 | 57 | 18,265 |
| Historical cost | 28,417 | 5,720 | 1,616 | 102 | 35,855 |
| Accumulated depreciation | (14,180) | (2,833) | (532) | (45) | (17,591) |
| Increase | 7,848 | 2,356 | 341 | 0 | 10,545 |
| Decreases | (329) | (483) | (72) | 0 | (885) |
| Depreciation | (6,452) | (1,434) | (420) | (22) | (8,329) |
| Exchange diff. - Historic cost | 618 | 87 | 36 | 6 | 747 |
| Exchange diff. - Accumulated depreciation | (230) | (46) | (4) | (3) | (283) |
| December 31, 2022 | 15,691 | 3,366 | 964 | 39 | 20,060 |
| Historic cost | 27,912 | 6,385 | 1,717 | 109 | 36,122 |
| Accumulated depreciation | (12,221) | (3,018) | (753) | (70) | (16,062) |
| Increases | 5,098 | 573 | 271 | 0 | 5,942 |
| Decreases | (1,641) | (201) | (36) | 0 | (1,878) |
| Depreciation | (3,566) | (693) | (225) | (11) | (4,495) |
| Exchange diff. - Historic cost | (343) | (38) | (12) | (2) | (395) |
| Exchange diff. - Accumulated depreciation | 218 | 23 | 55 | 1 | 235 |
| June 30, 2023 | 15,457 | 3,031 | 1,017 | 28 | 19,533 |
| Historic cost | 27,148 | 6,666 | 1,821 | 107 | 35,742 |
| Accumulated depreciation | (11,692) | (3,635) | (804) | (79) | (16,211) |
The movement principally concerns the renewal of the logistics industrial buildings lease contracts of Aquafil Carpet Recycling #1, Aquafil S.p.A. and Aquafil US.
The breakdown of the account is shown below (including current and non-current):
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Receivables from parent companies | 234 | 234 |
| Investments valued at equity | 1,018 | 1,018 |
| Investments in group companies | 6 | 6 |
| Escrow bank deposits | 3,015 | 5,902 |
| Investments in other companies | 164 | 14 |
| Current and non-current financial assets | 315 | 499 |
| Receivables from related parties | 79 | 79 |
| Derivative financial instruments - Current | 3,465 | 4,062 |
| Total | 8,296 | 11,814 |
| of which current | 6,480 | 9,964 |
| of which non-current | 1,816 | 1,850 |
"Receivables from parent companies" refer to guarantee deposits paid by Aquafil S.p.A. to the Parent Company Aquafin Holding S.p.A. over the multi-year leasing contract for the industrial and logistical use property located in Viale dell'Industria - Verona.
"Investments in other companies" relates to minor holdings.
"Investments valued at equity" concern the 32% interest in the Norwegian company Nofir AS, based in Mørkved, Bodǿ, Norway, a European leader in the collection and treatment of end-of-life fish netting.
The "Escrow bank deposits", amounting to Euro 3 million, are held mainly by the Group company Aquafil Jiaxing Co Ltd, with a short-term restriction.
"Receivables from other related parties" refer to guarantee deposits paid by Tessilquattro S.p.A. and Aquafil S.p.A. to Aquaspace S.p.A. over a multi-year leasing contract for the industrial and logistical use property located in Via del Garda 40 - Rovereto.
"Derivative financial instruments" includes the positive fair value of derivative instruments outstanding at June 30, 2023 (IRS - Interest Rate Swap), which, although entered into to hedge changesin borrowing rates, have been treated for accounting purposes, consistently with the past, as non-hedging instruments as it is very complex to prepare the mandatory hedging report.
Consequently, the fair value at June 30, 2023 (Euro 3,465 thousand) has been classified to current "Financial assets" and the movement recognised to the income statement (in the period a negative Euro 597 thousand).
The amount mainly relates to the receivable of the parent company Aquafil S.p.A. and Aquafil SLO d.o.o. from the European Union related to the "Effective" project, co-ordinated by Aquafil and funded by Bio-Based Industries Joint Undertaking (BBI JU) as part of the European Horizon 2020 research programme, with the entire chain (from raw material manufacturers to brands) involved in validating the use of bio Nylon 6 and other bio-polymer consumer market products.
In particular, with the signing of the agreement between the partners and other lenders, an overall amount of Euro 3.3 million was stipulated, with deferred income recognised under "Other liabilities" (Note 5.15). The receivable isreduced for the amounts effectively paid by the European Union, substantially recognised on the basis of the convention rules which provides for payment based on the state of advancement.
At June 30, 2023, the residual receivable amounted to Euro 0.3 million.
The breakdown of the items "Deferred tax assets" and "Deferred tax liabilities" is shown below:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Deferred tax assets | 11,326 | 11,519 |
| Deferred tax liabilities | (9,232) | (9,237) |
| Total | 2,094 | 2,281 |
Deferred tax assets totalled Euro 11.3 million, decreasing Euro 0.2 million on December 31, 2022, while deferred tax liabilities amount to Euro 9.2 million, substantially in line with December 31, 2022.
The changes in the account were as follows:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Raw materials, ancillary and consumables | 75,096 | 98,093 |
| Finished products and goods | 142,814 | 162,653 |
| Advances | 54 | 63 |
| Total | 217,965 | 260,808 |
Inventories are recorded net of the obsolescence provision amounting to Euro 0.6 million and relates to slow-moving stock.
The significant decrease is mainly as a combined effect of the reduction in stock and the decrease in the average price.
The changes in the account were as follows:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Trade receivables | 28,481 | 30,235 |
| Parent, associates and other related parties | 163 | 376 |
| Doubtful debt provision | (1,495) | (2,057) |
| Total | 27,150 | 28,553 |
The following table provides a breakdown of trade receivables at June 30, 2023, grouped by due date and net of the doubtful debt provision:
| (in Euro thousands) | At June 30, 2023 | Not yet due | Overdue within 30 days |
Overdue between 31 and 90 days |
Overdue between 91 and 120 days |
Overdue beyond 120 days |
|---|---|---|---|---|---|---|
| Guaranteed trade receivables (a) | 22,318 | 18,493 | 3,208 | 200 | 36 | 381 |
| Non-guaranteed trade receivables (b) | 6,112 | 5,049 | 720 | 128 | 14 | 202 |
| Non-guaranteed trade receivables impaired (c) | 215 | 215 | 0 | 0 | 0 | 0 |
| Trade receivables before doubtful debt provision [(a) + (b) + (c)] |
28,645 | 23,757 | 3,928 | 328 | 50 | 583 |
| Doubtful debt provision | (1,495) | 0 | (1,201) | (100) | (15) | (178) |
| Trade receivables | 27,150 | 23,757 | 2,727 | 228 | 35 | 405 |
Current tax receivables total Euro 0.6 million, substantially in line with H1 2022 (Euro 0.6 million) and concern advances paid for Group company current taxes.
Current tax payables of Euro 2.6 million decreased Euro 1 million on the first half of 2022, and concern Group company income tax payables.
The changes in the account were as follows:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Tax receivables | 4,072 | 9,408 |
| Supplier advances | 1,456 | 885 |
| Pension and social security institutions | 352 | 406 |
| Employee receivables | 137 | 275 |
| Tax receivables from parent | 3,744 | 247 |
| Other receivables | 764 | 974 |
| Prepayments and accrued income | 5,933 | 3,665 |
| Total | 16,458 | 15,862 |
The following is specified in relation to the above items:
The account is comprised of:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Cash and equivalents | 17 | 19 |
| Bank and postal deposits | 110,984 | 110,662 |
| Total | 111,001 | 110,682 |
The item relates to the current account balances of the different Group companies. The breakdown of cash and cash equivalents in Euro of foreign currencies is illustrated in the table below:
| (in Euro thousands) | At June 30, 2023 |
|---|---|
| EUR | 60,398 |
| TRL | 145 |
| USD | 33,517 |
| THB | 499 |
| CNY | 8,501 |
| AUD | 262 |
| GBP | 1,328 |
| JPY | 6,351 |
| Total | 111,001 |
There were no restrictions on liquidity.
For further details on cash and cash equivalents, reference should be made to the consolidated cash flow statement.
The movement of the individual accounts in presented in the Statement of changes in Consolidated Shareholders' Equity. The individual components are described below.
At June 30, 2023, the Company authorised share capital amounted to Euro 50,522 thousand, whose subscribed and paid-up capital amounts to Euro 49,722 thousand, while the unsubscribed and unpaid portion relates to: (i) Euro 800 thousand, the capital increase in service of Aquafil Sponsor Warrants. The subscribed and paid-up share capital is divided into 51,218,794 shares without nominal value divided into:
It is recalled that, in 2022, following the fulfilment of that indicated at Article 5 of the By-Laws of Aquafil S.p.A., 100% of the Class C shares (i.e. 80,000 class C shares) were automatically converted into ordinary shares, according to the conversion ratio of 1 ordinary share for each Class C share, without the expression of interest from their respective holders and without any change in the total amount of the company share capital.
In addition, as for the 80,000 special Class C shares, identified by the ISIN Code IT0005241747, they were without voting rights in the ordinary and extraordinary shareholders' meetings of the company and excluded from the right to receive profits which the company resolved to distribute as an ordinary dividend, and non-transferable until April 5, 2022.
As a result of this share conversion, the Group's share capital remained at Euro 49,722,417 while the number of ordinary shares increased from 42,822,774 to 42,902,774, while the class B shares remained unchanged (8,316,020 shares) and consequently the total number of shares remained unchanged (51,218,794 shares).
The detailed breakdown of Aquafil S.p.A.'s subscribed and paid-up share capital at June 30, 2023 is shown below:
| Type of shares | No. shares | % of share capital | Listing |
|---|---|---|---|
| Ordinary | 42,902,774 | 83.76% | MTA, STAR Segment |
| Class B | 8,316,020 | 16.24% | Non-listed |
| Class C | |||
| Total | 51,218,794 | 100.00% |
On the basis of communications sent to the National Commission for Companies and the Stock Exchange (CONSOB), and received by the Company pursuant to Article 120 of Legislative Decree No. 58 of February 24, 1998, as well as the effect of the conversion of Market Warrants in the previous year, holders of a significant shareholding as at June 30, 2023 - i.e. considering Aquafil S.p.A.'s qualification as an SME pursuant to Article 1 (w-quater). 1 of the CFA, of a shareholding of greater than 5% of Aquafil S.p.A. share capital with voting rights.
| The declarant or subject at the top of the equity chain |
Direct shareholder | Type of shares | Number of shares | No. of voting rights |
|---|---|---|---|---|
| GB&P S.r.l. | Aquafin Holding S.p.A. | Ordinary | 21,554,705 | 21,554,705 |
| Class B | 8,316,020 | 24,948,060 | ||
| Total | 29,870,725 | 46,502,765 | ||
| Share | 58.32% | 68.52% |
The following were initially issued on listing:
The legal reserve at June 30, 2023 was Euro 1.26 million.
The translation reserve, negative at June 30, 2023 for Euro 12.66 million (increasing by a negative Euro 9.57 million in the period), includes all the differences arising from the translation into Euro of the subsidiaries' financial statements included in the consolidation scope expressed in foreign currency.
Thisisthe effect ofstatement translation,so it had no impact on profitsfor the year, but isrecognised on the consolidated comprehensive income statement as reserves to be carried forward.
The item amounted to Euro 19.98 million at June 30, 2023 and is derived from the merger transaction between Aquafil S.p.A. and Space3 S.p.A. in December 4, 2017.
The item amounted to Euro 3.29 million at June 30, 2023 as a decrease in shareholders' equity and relatesto the costsincurred in 2017 for the listing and thereafter the share capital increase.
The item amounts to Euro 2.39 million and represents the conversion effects from Italian GAAP to IFRS.
At June 30, 2023, it was equal to a Euro 0.41 million reduction in shareholders' equity and includes the actuarial effects at that date of severance indemnities and all the other benefits for employees of Group companies.
The negative reserve for treasury shares in portfolio totalled Euro 8.61 million at June 30, 2023.
At June 30, 2023, the account amounts to Euro 109.75 million and represents the results generated by the Aquafil Group in previous years (including pre-merger with Space3 S.p.A.), net of the distribution of dividends.
As illustrated in paragraph "2. Consolidation scope" and consolidation criteria, the minority interests shareholders' equity substantially reduced to zero.
The account is comprised of:
| (in Euro thousands) | June 30, 2023 |
|---|---|
| December 31, 2022 | 5,192 |
| Financial charges | 46 |
| Net balance between accruals and settlement/advances | (356) |
| Actuarial gains/(losses) | (16) |
| June 30, 2023 | 4,866 |
The post-employment benefits provision includes the effects of discounting as required by the IAS 19 accounting standard. The following is a breakdown of the main economic and demographic assumptions used for actuarial valuations:
| June 30, 2023 |
|---|
| 3.64% |
| 2.30% |
| 3.23% |
| The RG48 mortality tables published by the General State Controller |
| INPS tables by age and gender |
| 100% on satisfying AGO requirements |
| 4.50% |
| 2.50% |
The bond's financial average duration at June 30, 2023 is approx. 6.3 years.
The account is comprised of:
| (in Euro thousands) | June 2023 | of which | December 2022 | of which |
|---|---|---|---|---|
| current portion | current portion | |||
| Bank loans | 268,175 | 69,788 | 263,114 | 60,880 |
| Accrued interest and accessory charges Bank loans | (649) | (649) | (399) | (399) |
| Total bank Loans | 267,526 | 69,139 | 262,715 | 60,481 |
| Bond loans | 77,418 | 12,857 | 83,158 | 12,857 |
| Accrued interest and charges on bonds | 360 | 360 | 251 | 251 |
| Total bond loan | 77,778 | 13,217 | 83,409 | 13,108 |
| Leasing and RoU financial payables | 20,967 | 8,536 | 21,074 | 8,224 |
| Other lenders and banks – short term | 1,864 | 1,864 | 1,333 | 1,333 |
| Total financial liabilities (current and non-current) | 368,134 | 92,756 | 368,531 | 83,146 |
This item refers to payables relating to financing agreements obtained from credit institutions. These agreements stipulate the payment of interest at a fixed rate or, alternatively, at a variable rate typically linked to the Euribor rate for the period plus a spread.
| (in Euro thousands) | Original amount |
Granting date |
Maturity date |
Repayment plan | Rate applied | At June 30, 2023 |
of which current portion |
|---|---|---|---|---|---|---|---|
| Medium/long term bank loans - fixed rate |
|||||||
| Cassa Centrale Banca - Credito Cooperativo del Nord Est (formerly Casse Rurali Trentine) (*) |
15,000 | 2019 | 2026 Quarterly from 30/09/2021 | 1.25% fixed from July 1, 2024, 3 months Euribor + 1% |
9,112 | 3,000 | |
| Cassa Centrale Banca (*) | 11,000 | 2022 | 2029 22 quarterly instalments | 1.20% fixed from April 1, 2026, 3 months Euribor + 1% |
11,000 | 1,458 | |
| Credito Valtellinese (*) | 15,000 | 2018 | 2024 20 quarterly from 05/10/2018 | 1% fixed | 5,417 | 4,329 | |
| Cassa Depositi e Prestiti (*) | 20,000 | 2020 | 2027 8 half-yearly from 20/06/2023 | 1.48% fixed | 18,000 | 4,000 | |
| Total medium/long term bank loans - fixed rate |
43,529 | 12,787 | |||||
| Medium/long term bank loans - variable rate |
|||||||
| Deutsche Bank (*) | 5,000 | 2018 | 2024 Quarterly from 15/01/2019 | Euribor 3 months + 1.20% | 1,563 | 1,250 | |
| Deutsche Bank (*) | 20,000 | 2022 | 2028 20 quarterly from 01/10/2023 | Euribor 3 months + 1.20% | 20,000 | 4,000 | |
| Cassa Risparmio di Bolzano (*) | 20,000 | 2018 | 2025 26 quarterly from 31/03/2020 | Euribor 3 months + 0.85% | 10,106 | 4,017 | |
| Cassa Risparmio di Bolzano (*) | 10,000 | 2022 | 2028 16 quarterly from 31/12/2024 | Euribor 3 months + 1.05% | 10,000 | 0 | |
| Banca Intesa () (*) | 15,000 | 2018 | 2024 10 half-yearly from 31/07/2019 | Euribor 6 months + 0.95% | 3,857 | 2,571 | |
| Banca Intesa () (*) | 30,000 | 2021 | 2027 Half-yearly from 30/06/2023 | Euribor 6 months + 1.10% | 27,000 | 6,000 | |
| Banca di Verona | 15,000 | 2017 | 2024 28 quarterly from 30/06/2017 | Euribor 3 months + 2% | 3,920 | 2,600 | |
| Banca di Verona | 3,000 | 2019 | 2024 Quarterly from 06/08/2021 | Euribor 3 months + 1.30% | 1,545 | 1,545 | |
| Banca di Verona | 5,000 | 2022 | 2027 Quarterly from 27/10/2024 | Euribor 6 months + 1.20% | 5,000 | 0 | |
| Banca di Verona | 5,000 | 2023 | 2028 Quarterly from 04/07/2024 | Euribor 6 months + 1.20% | 5,000 | 0 | |
| Credito Valtellinese | 3,000 | 2017 | 2023 Quarterly from 05/07/2017 | Euribor 3 months + 0.90% | 153 | 153 | |
| Banca Popolare di Milano () (*) | 25,000 | 2018 | 2026 29 quarterly from 31/03/2020 | Euribor 3 months + 0.90% | 13,845 | 4,477 | |
| Banca Popolare di Milano () (*) | 15,000 | 2019 | 2025 Quarterly from 30/09/2020 | Euribor 3 months + 1.05% | 7,626 | 2,982 | |
| Banca Popolare di Milano () (*) | 15,000 | 2023 | 2028 20 quarterly from 30/09/2023 | Euribor 3 months + 1.15% | 15,000 | 2,749 | |
| Banca Popolare Emilia Romagna () (*) | 10,000 | 2019 | 2025 Monthly from 26/09/2020 | Euribor 3 months + 0.75% | 5,454 | 2,506 | |
| Banca Nazionale del Lavoro (*) | 7,500 | 2018 | 2025 Half-yearly from 31/12/2019 | Euribor 6 months + 1.40% | 2,727 | 1,364 | |
| Banca Nazionale del Lavoro (*) | 12,500 | 2018 | 2025 Half-yearly from 31/12/2019 | Euribor 6 months + 1.25% | 4,545 | 2,271 | |
| Banca Nazionale del Lavoro (*) | 20,000 | 2022 | 2027 Quarterly from 08/12/2023 | Euribor 3 months + 1.40% | 20,000 | 3,750 | |
| Banca Popolare di Sondrio | 5,000 | 2017 | 2023 Monthly from 31/08/2018 | Euribor 1 month + 0.80% | 106 | 106 | |
| Credit Agricole Friuladria (formerly Banca Popolare Friuladria) () (*) |
10,000 | 2017 | 2025 22 quarterly from 31/03/2019 | Euribor 3 months + 1.30% | 3,711 | 1,825 | |
| Credit Agricole Friuladria (formerly Banca Popolare Friuladria) () (*) |
10,000 | 2019 | 2025 22 quarterly from 28/12/2020 | Euribor 6 months + 1.05% | 4,545 | 1,818 | |
| Monte dei Paschi (*) | 15,000 | 2018 | 2025 8 half-yearly from 31/12/2019 | Euribor 6 months + 0.80% | 7,500 | 3,750 | |
| Crediti Emiliano | 5,000 | 2022 | 2027 8 half-yearly from 16/09/2023 | Euribor 3 months + 0.90% | 5,000 | 1,052 | |
| Banca del Mezzogiorno () (*) | 10,000 | 2019 | 2026 8 half-yearly from 09/11/2020 | Euribor 1 month + 1.20% | 5,500 | 2,000 | |
| Banca del Mezzogiorno () (*) | 15,000 | 2023 | 2028 Quarterly from 30/06/2025 | Euribor 3 months + 1.20% | 15,000 | 0 | |
| Cassa Depositi e Prestiti (*) | 20,000 | 2022 | 2027 8 half-yearly from 30/06/2024 | Euribor 6 months + 1.55% | 20,000 | 2,500 | |
| Mediocredito Trentino Alto Adige | 3,000 | 2022 | 2026 12 quarterly from 15/10/2023 | Euribor 3 months + 1% | 3,000 | 743 | |
| Credito Valtellinese (*) | 5,000 | 2020 | 2026 16 quarterly from 30/09/2021 | Euribor 3 months + 1.40% | 2,942 | 973 | |
| Total medium/long term bank loans - variable rate |
224,645 | 57,002 | |||||
| Accrued interest on medium/long term bank loans |
(649) | (649) | |||||
| Medium/long term bank loans - fixed and variable rate |
267,525 | 69,140 |
(*) Loans that provide for compliance with financial covenants.
(**) Loan to which an interest rate swap contract is linked under which interest to be paid to the bank is fixed and equal to the value shown in the table.
Certain loan agreements provide for compliance with financial and equity covenants, as summarised below:
| Loan | Period | Parameter | Reference | Limit |
|---|---|---|---|---|
| Credite Agricole Friuladria | Annually | Net Debt/Net Equity | Group | ≤ 2.50 |
| Annually | Net debt/EBITDA net of lease costs | ≤ 3.75 | ||
| Banca Intesa | Annually | Net Debt/Net Equity | Group | ≤ 2.50 |
| Annually | Net Debt/EBITDA | ≤ 3.75 | ||
| Cassa di Risparmio di Bolzano | Annually | Net Debt/Net Equity | Group | ≤ 2.50 |
| Annually | Net Debt/EBITDA | ≤ 3.75 | ||
| Banca Nazionale del Lavoro | Annually | Net Debt/Net Equity | Group | ≤ 2.50 |
| Annually | Net Debt/EBITDA | ≤ 3.75 | ||
| Banco BPM | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Credito Valtellinese | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Deutsche Bank | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Annually | EBITDA/Financial charges | > 3.50 | ||
| Monte dei Paschi di Siena | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Cassa Centrale Banca Cred, Coop, Nord Est | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Banca Popolare Emilia Romagna | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| MCC/Banca del Mezzogiorno | Annually | Net Debt/EBITDA | Group | ≤ 3.75 |
| Annually | Net Debt/Net Equity | ≤ 2.50 | ||
| Cassa Depositi e Prestiti | Half-yearly | Net Debt/EBITDA | Group | ≤ 3.75 |
| Half-yearly | Net Debt/Net Equity | ≤ 2.50 | ||
In addition, in the first half of 2023, the company Aquafil S.p.A. agreed three new medium/long-term variable rate loans for a total of Euro 35 million.
For further information on the transactions undertaken in the period with the lending institutions, reference should be made to the Directors' Report and also paragraph "7. Net financial debt" below.
With reference to the loans granted, there are no mortgages or guarantees registered on company assets.
For bank loans stipulating compliance with the above half-yearly covenants, these had been satisfied at June 30, 2023.
Compliance with the above covenantsis on an annual basis and half-yearly for certain types of loans; at June 30, 2023, these covenants had been complied with. Compliance at December 31, 2023 shall be consistently monitored in the second half of the year in order to adopt in a timely manner any appropriate actions with the Lending institutions.
The company had issued two fixed-rate bond loans for an original total value of Euro 90 million, as follows:
tchet" condition, similar to that for Bond Loan "A". During the period, due to the NFP/EBITDA ratio of the previous contractual six-month period, a surcharge of 0.50% was applied from May 24, 2023. In May 2023, the first instalment of Euro 5.7 million was settled.
The following table summarises the main characteristics of the aforementioned bond loans:
| Bond loan | Total Nominal Value |
Issue date | Maturity date | Capital portion repayment plan |
Interest rate applied |
|---|---|---|---|---|---|
| Bond loan A | 50,000,000 | 23/06/2015 | 20/09/2028 | 7 annual instalments from 20/09/2022 |
4.20% |
| Bond loan B | 40,000,000 | 24/05/2019 | 24/05/2029 | 7 annual instalments from 24/05/2023 |
2.37% |
Bond loans envisage compliance with the following financial covenants, as contractually defined, to be calculated on the basis of the Group's consolidated financial statements:
| Financial parameters | Parameter | Covenant limit |
|---|---|---|
| Interest Coverage Ratio | EBITDA / Net financial charges | > 3.50 |
| Leverage Ratio (*) | Net Debt / EBITDA | < 3.75 |
| Net Debt Ratio | Net Debt / Net Equity | Minimum Net Equity threshold levels |
(*) This indicator must be calculated with reference to the 12-month period which terminates on December 31 and June 30 for all years applicable.
Non-compliance with just one of the above financial parameters, where not resolved within the contractual deadlines provided, would constitute a circumstance for the bond loan's compulsory early repayment.
Compliance with the above covenants is on a half-yearly basis. At June 30, 2023, these covenants had been complied with. For the Covenants' compliance at December 31, 2023 it refers to previous paragraph.
The terms and conditions of the above bond loans also envisage, as is customary for financial transactions of this type, a structured series of commitments to be borne by the Company and Group companies ("Affirmative Covenants") and a series of limitations on the possibility of carrying out certain transactions, if not in compliance with certain financial parameters orspecific exceptions provided for by the agreement with the bondholders ("Negative Covenants"). Specifically, there are in fact certain limitations on the assumption of financial debt, on carrying out certain investments and on acts of disposal of corporate assets. To ensure the timely and correct fulfilment of obligations arising on account of the Parent Company from the issue of securities, the companies Aquafil Usa Inc. and Aquafil SLO d.o.o. have issued joint corporate guarantees in favour of underwriters:
Financial payables for leases, which amounted to Euro 21 million, were substantially in line with December 31, 2022 (Euro 21.1 million) and refer to the effects of the application of IFRS 16 and whose current portion amounted to Euro 8.5 million.
The account is comprised of:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Agents' supplementary indemnity provision and others | 1,059 | 1,734 |
| Guarantee fund on client engineering orders | 166 | 241 |
| Total | 1,226 | 1,975 |
At June 30, 2023, "Provisions for risks and charges" amounted to Euro 1.2 million, compared to Euro 2.0 million at December 31, 2022.
The account is comprised of:
| (in Euro thousands) | June 2023 | of which current portion |
December 2022 | of which current portion |
|---|---|---|---|---|
| Employee payables | 13,362 | 13,362 | 13,955 | 13,955 |
| Social security payables | 3,085 | 3,085 | 3,229 | 3,229 |
| Payables to parent for income taxes | 0 | 0 | 230 | 230 |
| Tax payables | 2,194 | 2,194 | 2,125 | 2,125 |
| Other payables | 2,224 | 2,224 | 1,215 | 1,215 |
| Accrued liabilities and deferred income | 11,689 | 4,386 | 13,394 | 4,409 |
| Total | 32,554 | 25,251 | 34,148 | 25,163 |
"Employee payables" refers to sums due by Group companies to their employees at June 30, 2023 and amounts to Euro 13.4 million, substantially in line with December 31, 2022 (Euro 13.9 million);
"Socialsecurity payables" mainly includesthe amount owed at June 30, 2023 by the Group companiesto socialsecurity institutions and amount to Euro 3.1 million, substantially in line with December 31, 2022.
the movement in "Tax payables" concerns mainly the amounts due for Value Added Tax (VAT) and amount to Euro 2.2 million.
Accrued liabilities and deferred income mainly comprise:
The account is comprised of:
| (in Euro thousands) | June 2023 | December 2022 |
|---|---|---|
| Trade payables | 101,100 | 125,445 |
| Payables to parent, associates and other related parties | 918 | 270 |
| Payments on account | 3,018 | 1,126 |
| Total | 105,035 | 126,841 |
This account includes payables related to the normal conduct of commercial activity by the Group, in particular, the purchase of raw materials and external processing services.
The decrease on December 31, 2022 was strictly related to the reduction in revenues in the first half of 2023, as outlined in detail in the Directors' Report.
The payments on account mainly concern the advancesreceived in the first half of 2023 by the parent company Aquafil S.p.A. for future supplies.
At June 30, 2023 there were no payables falling due over five years recognised to the financial statements.
The breakdown of revenues is shown below:
| June 2023 | June 2022 | Change | ||||
|---|---|---|---|---|---|---|
| in Euro millions | % | in Euro millions | % | in Euro millions | % | |
| EMEA | 165.1 | 53.1% | 204.5 | 58.3% | (39.4) | (19.3%) |
| North America | 98.4 | 31.6% | 94.4 | 26.9% | 4.0 | 4.2% |
| Asia and Oceania | 46.6 | 15.0% | 50.5 | 14.4% | (3.9) | (7.8%) |
| Rest of the world | 1.1 | 0.3% | 1.6 | 0.5% | (0.5) | (32.0%) |
| Total | 311.1 | 100.0% | 351.0 | 100.0% | (39.9) | (11.4%) |
Revenues almost entirely include the value of the sale of goods of the three Group product lines described above, that is, the BCF Product Line (carpet fibers), the NTF Product Line (clothing fibers) and the Polymers Product Line.
The significant decrease in the period (-11.4%) is mainly as a combined effect of the reduction in quantities sold, in addition to the decrease in sales prices across the various product lines, as outlined in the Directors' Report, which also breaks down revenues by Product Line.
In accordance with IFRS 15, revenues include, as a direct reduction in their amount, cash discounts, which amount to Euro 1.5 million at June 30, 2023.
"Other revenues and income" amount to Euro 4.9 million, increasing Euro 2.5 million on the previous period. The account mainly include:
The account includes raw materials and consumables costs, in addition to changes in inventories.
The account amounts to Euro 158.9 million, compared to Euro 158.4 million at June 30, 2022. As also outlined in the Directors' Report, H1 2023 was impacted by the high unitary stock values in 2022 and despite the reduction in raw material costs in the first half of 2023.
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Raw materials and semi-finished goods | 141,565 | 136,584 |
| Ancillaries and consumables | 14,238 | 17,918 |
| Other purchases and finished products | 3,134 | 3,863 |
| Total | 158,938 | 158,365 |
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Transport, shipping & customs | 8,550 | 16,962 |
| Electricity, propulsive energy, water and gas | 30,199 | 36,886 |
| Maintenance | 5,557 | 4,829 |
| Services for personnel | 3,536 | 2,515 |
| Technical, ICT, commercial, legal & tax consultancy | 5,996 | 5,818 |
| Insurance | 1,959 | 1,635 |
| Marketing and advertising | 2,083 | 2,418 |
| Cleaning, security and waste disposal | 1,829 | 1,906 |
| Warehousing and external storage | 2,103 | 2,247 |
| External processing | 2,905 | 3,190 |
| Other sales expenses | 79 | 148 |
| Statutory auditors fees | 83 | 83 |
| Other service costs | 1,686 | 2,118 |
| Rentals and hire | 1,297 | 1,203 |
| Total | 67,864 | 81,957 |
Service costs amount to Euro 67.8 million, decreasing Euro 14.2 million on H1 2022 (Euro 82 million).
The reduction, related to the lower production volumes, was particularly significant in terms of transport and utility costs which, as outlined in the Directors' Report, in the first half of 2023 significantly declined.
These costs are broken down as follows:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Wages and salaries | 49,821 | 49,496 |
| Social security charges | 10,739 | 10,766 |
| Post-employment benefits | 987 | 984 |
| Other non-recurring costs | 515 | 811 |
| Director fees | 956 | 2,841 |
| Total | 63,019 | 64,898 |
"Personnel costs" amounted to Euro 63 million, decreasing Euro 1.8 million on the first half of 2022 (Euro 64.9 million).
The reduction in personnel costs is related to the contraction of the average workforce in H1 2023 compared to H1 2022. As reported in the table below, the average Aquafil Group workforce in the first six months of 2023 was 2,739, compared to 2,803 for the first half of 2022. In addition, hours worked reduced in the first half of 2023.
| June 30, 2023 | June 30, 2022 | Average H1 2023 |
Average H1 2022 |
|
|---|---|---|---|---|
| Managers | 46 | 52 | 46 | 53 |
| Middle managers | 164 | 157 | 162 | 155 |
| Managers | 439 | 434 | 433 | 431 |
| Workers | 2,065 | 2,160 | 2,098 | 2,164 |
| Total | 2,714 | 2,803 | 2,739 | 2,803 |
These costs are broken down as follows:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Taxes, duties & sanctions | 1,496 | 1,518 |
| Losses on asset sales | 33 | 51 |
| Other operating charges | 235 | 877 |
| Total | 1,764 | 2,446 |
"Other operating costs and charges" amounted to Euro 1.8 million in H1 2023, decreasing Euro 0.7 million on the first half of 2022 (Euro 2.4 million). The account mainly comprises "Taxes, duties and sanctions" for Euro 1.5 million, which mainly concern local property taxes and for Euro 0.2 million "Other operating charges".
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Amortisation | 3,263 | 2,869 |
| Depreciation | 16,529 | 16,647 |
| RoU (Right-of-Use) depreciation | 4,495 | 4,240 |
| Total | 24,287 | 23,756 |
Amortisation and depreciation totalled Euro 24.3 million, substantially in line with the first half of 2022 (Euro 23.8 million).
The figure includes the straight-line amortisation and depreciation in the period, in addition to the amortisation and depreciation on the bio-caprolactam project initiated in the previous year.
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Net provisions/(releases) for doubtful debts | (62) | (26) |
| Net provisions/(releases) for provisions for risks and charges | (115) | (174) |
| Total | (178) | (200) |
This account, amounting to Euro 3.7 million, mainly concerns the capitalisations in the first half of 2023 regarding new product development costs (IAS 38).
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Derivative financial instruments | 0 | 2,809 |
| Other interest | 0 | 71 |
| Interest income current accts. | 338 | 106 |
| Total | 339 | 2,987 |
"Financial income" amounted to Euro 0.3 million, decreasing Euro 2.7 million on H1 2022, which benefited from the fair value movement of derivatives (IRS). At June 30, 2023, the Mark to Market was positive for Euro 3.4 million, although with an approx. Euro 0.6 million reduction in financial charges. As previously illustrated, "hedge accounting" was not applied to these derivatives as, although entered into for hedging purposes, have been considered for accounting purposes and consistently with the past, as non-hedging instruments (and therefore the relative fair value is recognised in the income statement), as it is very complex to prepare the mandatory hedging relationship.
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Interest on bank loans and borrowings | 3,547 | 1,374 |
| Interest on bonds | 1,250 | 1,441 |
| Interest exp. on current accounts | 500 | 345 |
| Write-down of derivative financial instruments | 597 | 0 |
| Other financial and interest expense | 1,611 | 701 |
| Total | 7,505 | 3,862 |
"Financial charges" of Euro 7.5 million increased Euro 3.6 million on H1 2022, mainly due to the increase in interest charges on mortgages and bank loans, in addition to the decrease of Euro 0.6 million in the fair value of derivatives (IRS), as outlined in the preceding paragraph.
The breakdown of the account is as follows:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Total exchange gains | 5,261 | 6,449 |
| Total exchange losses | (4,278) | (5,921) |
| Total exchange differences | 983 | 528 |
A net gain of Euro 1 million is reported for H1 2023, as the balance between exchange gains and losses, with a slight increase on H1 2022 (net gain of Euro 0.5 million).
The breakdown of the account is as follows:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Current and prior year income taxes | 1,630 | 6,424 |
| Deferred tax income/charges | 428 | 32 |
| Total | 2,058 | 6,457 |
Net income taxes in H1 2023 totalled Euro 2.1 million, and mainly concern for Euro 1.2 million current and prior year income taxes and for a negative Euro 0.4 million the net balance between deferred tax income and deferred tax charges related to the first half of 2023.
For better comparability, we indicate that a reclassification of the figures at June 30, 2022 for the "Current and prior year income taxes" and "Deferred tax income/charges" account was made.
The account is comprised of:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Non-recurring charges | 177 | 183 |
| Expansion costs Aquafil Group | 376 | 114 |
| Non-recurring costs ACR1 | 623 | 1,024 |
| Restructuring and other personnel costs | 181 | 0 |
| Extraordinary legal consultancy and administrative | 290 | 0 |
| Total non-recurring costs | 1,648 | 1,321 |
| Non-recurring revenues | (3) | 0 |
| Total non-recurring income | (3) | 0 |
| Non-operating income and charges | 1,645 | 1,321 |
Non-recurring items mainly refer to costsincurred by Aquafil Carpet Recycling # 1, which wasimpacted by an extraordinary event in the United Statesthat involved extraordinary restoration work totaling Euro 623 thousand, and costsincurred by the Group for the analysis and verification of new business opportunities. For further details, reference should be made to paragraph 6.2 of the Directors' Report.
The breakdown of the account is as follows:
| (in Euro thousands) | June 2023 | June 2022 |
|---|---|---|
| Group Net Profit | (4,136) | 17,674 |
| Number of shares | 51,219 | 51,139 |
| Earnings per share | 0.00 | 0.35 |
We point out that diluted earnings per share is equal to the above-mentioned earnings per share because there are no stock option plans. The basic earnings per share is calculated by dividing the result of the Group by the number of ordinary shares outstanding during the period, excluding treasury shares.
A breakdown follows of the net financial debt at June 30, 2023 and December 31, 2022, determined in accordance with the ESMA Guidelines (32-382-1138):
| Net Financial Debt | At June 30, 2023 | At December 31, 2022 | |
|---|---|---|---|
| (in Euro thousands) | |||
| A. | Liquidity | 111,001 | 110,682 |
| B. | Cash and cash equivalents | 0 | 0 |
| C. | Other current financial assets | 6,481 | 9,964 |
| D. | Liquidity (A + B + C) | 117,482 | 120,646 |
| E. | Current financial debt (including debt instruments but excluding the current portion of non-current financial debt) |
(1,864) | (1,333) |
| F. | Current portion of non-current debt | (90,892) | (81,814) |
| G. | Current financial debt (E + F) | (92,756) | (83,146) |
| H. | Net current financial debt (G – D) | 24,726 | 37,500 |
| I. | Non-current financial debt (excluding current portion and debt instruments) | (210,818) | (215,084) |
| J. | Debt instruments | (64,560) | (70,301) |
| K. | Trade payables and other non-current payables | 0 | 0 |
| L. | Non-current debt (I + J + K) | (275,378) | (285,385) |
| M. | Total financial debt (H + L) | (250,652) | (247,885) |
The net financial reconciliation between the beginning and end of the period are presented below. The effects indicated include the currency effects.
| (in Euro thousands) | current portion | non-current portion | |
|---|---|---|---|
| Net Debt at December 31, 2022 | (247,885) | 110,837 | (358,722) |
| Net cash flow in the period | 319 | 319 | |
| Decrease in liquidity subject to restrictions | (2,886) | (2,886) | |
| New bank loans and borrowings | (35,000) | (35,000) | |
| Repayment/reclass. bank loans and borrowings | 35,821 | 35,821 | |
| Repayment/reclass. lease liability | 107 | 107 | |
| Change in fair value derivatives | (597) | (597) | |
| Other changes | (531) | (531) | |
| Net Debt at June 30, 2023 | (250,652) | 143,070 | (393,722) |
Transactions and balances with related parties are illustrated in the tables below. The companies indicated are considered related parties as directly or indirectly related to the majority shareholder of the Aquafil Group. Transactions with related parties were undertaken in line with market conditions.
Payables and receivables of the Group with related parties are illustrated in the table below:
| (in Euro thousands) | Parent companies |
Subsidiaries | Associates | Related parties |
Total | Total book value |
% on total account items |
|---|---|---|---|---|---|---|---|
| Non-current financial assets | |||||||
| At June 30, 2023 | 234 | 6 | 1,018 | 79 | 1,337 | 1,816 | 73.63% |
| At December 31, 2022 | 234 | 6 | 1,018 | 79 | 1,337 | 1,849 | 72.28% |
| Trade receivables | |||||||
| At June 30, 2023 | 125 | 38 | 163 | 27,150 | 0.60% | ||
| At December 31, 2022 | 305 | 71 | 376 | 28,553 | 1.32% | ||
| Other current assets | |||||||
| At June 30, 2023 | 3,744 | 3,744 | 16,130 | 23.21% | |||
| At December 31, 2022 | 247 | 247 | 15,862 | 1.56% | |||
| Non-current financial liabilities | |||||||
| At June 30, 2023 | (450) | (3,899) | (4,350) | (275,378) | 1.58% | ||
| At December 31, 2022 | (831) | (4,431) | (5,262) | (285,385) | 1.84% | ||
| Current financial liabilities | |||||||
| At June 30, 2023 | (590) | (2,117) | (2,706) | (92,756) | 2.92% | ||
| At December 31, 2022 | (537) | (2,420) | (2,957) | (83,146) | 3.56% | ||
| Trade payables | |||||||
| At June 30, 2023 | (3) | (347) | (350) | (105,035) | 0.33% | ||
| At December 31, 2022 | 0 | (270) | (270) | (126,840) | 0.21% | ||
| Other current liabilities | |||||||
| At June 30, 2023 | 0 | (25,251) | 0.00% | ||||
| At December 31, 2022 | (230) | (230) | (25,163) | 0.92% |
The transactions of the Group with related parties are illustrated in the table below:
| (in Euro thousands) | Parent companies |
Subsidiaries | Other related parties |
Total | Book value | % on total account items |
|---|---|---|---|---|---|---|
| Revenues | ||||||
| H1 2023 | 125 | 26 | 151 | 311,117 | 0.05% | |
| H1 2022 | 26 | 26 | 351,009 | 0.01% | ||
| Service costs and rent, lease and similar costs | ||||||
| H1 2023 | (2) | (262) | (264) | (67,864) | 0.39% | |
| H1 2022 | (230) | (230) | (81,957) | 0.28% | ||
| Other operating costs and charges | ||||||
| H1 2023 | (35) | (35) | (1,764) | 1.98% | ||
| H1 2022 | (35) | (35) | (2,446) | 1.43% | ||
| Financial charges | ||||||
| H1 2023 | (15) | (73) | (87) | (7,505) | 1.16% | |
| H1 2022 | (17) | (47) | (64) | (3,862) | 1.67% | |
| Investment income | ||||||
| H1 2023 | 0 | 0 | 0 | 0.00% | ||
| H1 2022 | 90 | 90 | (70) | (128.57%) |
At June 30, 2023, the Parent Company provided sureties in favour of credit institutions in the interest of subsidiaries for a total of Euro 22.6 million.
Provided below is a list of fiscal positions and disputed defined and pending as at the balance sheet date that concern the Parent Company, Aquafil S.p.A.. We are not aware of the existence of further disputes or proceedings that are likely to have significant repercussions on the Group's economic and financial situation.
For tax years 2018 and 2019, not the subject of the aforementioned audits and during which Aqualeuna recognised further tax losses, the German tax administration began another audit in September 2021, requesting that the Italian tax administration launch a joint audit similar to the one conducted for 2016.
The German Tax Administration Finanzamt Merseburg, after analysing the documentation produced by Aqualeuna, identified the following findings to Aqualeuna on May 31, 2023: (i) the application of a 1.4% mark-up on the total production costs for the sale of finished and semi-finished products and (ii) the disallowance of the deductibility for Aqualeuna of the costs of restructuring and closing the Leuna plant.
On June 9, 2023, Aqualeuna then received the relevant assessment notices with the findings which indicate (i) for the 2018 tax period an upward adjustment to income of the German company of Euro 2,363 thousand and (ii) for the 2019 tax period an upward adjustment to income of Euro 4,429 thousand.
For the 2018 and 2019 tax periods, these total recoveries therefore result in for German tax purposes for Aqualeuna the reabsorption of the originally declared current tax losses of 2018 and 2019, and positive taxable income for 2018 and 2019, with the consequent payment of total taxes and interest of Euro 282 thousand for the 2018 tax period and of Euro 81 thousand for the 2019 tax period.
For the stated tax periods, Aqualeuna filed an appeal with the tax authorities against the assessments on June 26, 2023, requesting their suspension in order to allow for the introduction and conclusion of amicable procedures with the relevant Italian authorities.
From an Italian viewpoint, the parent company Aquafil S.p.A., with reference to the years concerned will begin appropriate procedures to eliminate any double taxation that may arise at Group level, with the consequence that the upward recovery of taxable income in Germany for Aqualeuna may be neutralised by a corresponding opposing adjustment granted to the parent company by the Italian Tax Agency.
In view of that outlined, it is considered that there are no additional contingent liabilities on the part of Aquafil S.p.A. and the Aquafil Group to be covered by an allocation to a risk provision.
There were no further significant events which could have an impact on the Half-Year Financial Statements at June 30, 2023.
Arco, August 31, 2023
The Chairperson of the Board of Directors The Executive Officer Full Professor Chiara Mio Mr. Roberto Carlo Luigi Bobbio
Independent auditor's report
Aquafil SpA
Review report on consolidated condensed interim financial statements as of 30 June 2023
To the shareholders of AQUAFIL SPA
We have reviewed the accompanying consolidated condensed interim financial statements of AQUAFIL SPA and its subsidiaries (the "AQUAFIL Group") as of 30 June 2023, comprising the statement of financial position, income statement, statement of comprehensive income, cashflow statement, statement of changes in equity and related notes. The Directors of AQUAFIL SpA are responsible for the preparation of the consolidated condensed interim 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 consolidated condensed interim financial statements based on our review.
We conducted our work in accordance with the criteria for a review recommended by Consob in Resolution No. 10867 of 31 July 1997. A review of consolidated condensed interim 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 consolidated condensed interim financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the
consolidated condensed interim financial statements of AQUAFIL Group as of 30 June 2023 are not prepared, in all material respects, in accordance with international accounting standard applicable to interim financial reporting (IAS 34) as adopted by the European Union.
Trento, 31 August 2023
PricewaterhouseCoopers SpA
Signed by
Alberto Michelotti (Partner)
This report has been translated into English from the Italian original solely for the convenience of international readers
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Via Linfano, 9 38062 Arco (Tn) T +39 0464 581111 F +39 0464 532267
www.aquafil.com [email protected]
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