Interim / Quarterly Report • Aug 30, 2022
Interim / Quarterly Report
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| Interim Management Statement | 4 |
|---|---|
| Half-Yearly Condensed Consolidated Financial Statements | |
| Consolidated statement of financial position | 14 |
| Consolidated income statement | 15 |
| Consolidated statement of comprehensive income | 16 |
| Consolidated statement of cash flows | 17 |
| Statement of changes in consolidated shareholders' equity | 18 |
| Explanatory notes | 19 |
Decree 58/98 45
Independent auditors' report
| Registered and administrative office: | Via dei Carpini 1 - 25035 Ospitaletto (Brescia) |
|---|---|
| REA.: | Brescia 347512 |
| Tax Code: | 03244470179 |
| Share capital: | €11,533,450 fully paid in |
| Web site: | www.sabafgroup.com |
| Companies consolidated on a line-by-line basis | ||
|---|---|---|
| Faringosi Hinges s.r.l. | Italy | 100% |
| Sabaf do Brasil Ltda. | Brazil | 100% |
| Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf | ||
| Turkey) | Turkey | 100% |
| Sabaf Appliance Components (Kunshan) Co., Ltd. | China | 100% |
| Okida Elektronik Sanayi Ve Ticaret A.S. | Turkey | 100% |
| Sabaf US Corp. | U.S.A. | 100% |
| A.R.C. s.r.l. | Italy | 100% |
| Sabaf India Private Limited | India | 100% |
| Sabaf Mexico Appliance Components | Mexico | 100% |
| C.M.I. s.r.l. | Italy | 100% |
| C.G.D. s.r.l. | Italy | 100% |
| Chairman | Claudio Bulgarelli |
|---|---|
| Vice Chairman (*) | Nicla Picchi |
| Chief Executive Officer | Pietro Iotti |
| Director | Gianluca Beschi |
| Director | Alessandro Potestà |
| Director | Cinzia Saleri |
| Director (*) | Carlo Scarpa |
| Director (*) | Daniela Toscani |
| Director (*) | Stefania Triva |
| (*) independent directors |
| Chairman | Alessandra Tronconi |
|---|---|
| Statutory Auditor | Maria Alessandra Zunino de Pignier |
| Statutory Auditor | Mauro Giorgio Vivenzi |
This Half-Yearly Report at 30 June 2022 has been prepared in accordance with Art. 154 ter of Legislative Decree 58/1998 and in compliance with the applicable international accounting standards recognised in the European Community and, in particular, IAS 34 - Interim Financial Reporting. The half-year figures at 30 June 2022 and 30 June 2021 and for the six-month period ended on the same dates were audited by EY S.p.A., the financial figures at 31 December 2021, shown for comparative purposes, were audited by EY S.p.A.
The Sabaf Group is active in the production of components for household appliances and is one of the world's leading manufacturers of components for gas cooking appliances. Its reference market therefore consists of manufacturers of household appliances. Sabaf's product range focuses on the following main lines:
In May 2022, the Group presented its plan to enter the field of electromagnetic induction cooking to the public. The expansion of the product range, made possible by this strategically important initiative, will soon enable Sabaf to be present in all cooking technologies: gas, traditional electric and induction. The first prototypes will be presented in the coming months, while production will start by the first half of 2023.
The Sabaf Group currently has twelve production plants: Ospitaletto (Brescia), Bareggio (Milan), Campodarsego (Padua), Crespellano (Bologna - two plants), Jundiaì (Brazil), Manisa (Turkey), Istanbul (Turkey – two plants), Kunshan (China), Myszkow (Poland) and Hosur (India), where production started in June 2022.
| (€/000) | Q2 2022 (*) |
Q2 2021 (*) |
% change | H1 2022 | H1 2021 | % change | 2021 FY |
|---|---|---|---|---|---|---|---|
| Sales revenue | 74,832 | 72,840 | +2.7% | 145,684 | 137,665 | +5.8% | 263,259 |
| EBITDA EBITDA % |
13,862 18.5 |
17,076 23.4 |
-18.8% | 26,886 18.5 |
32,184 23.4 |
-16.5% | 54,140 20.6 |
| EBIT EBIT % |
8,960 12.0 |
12,940 17.8 |
-30.8% | 18,045 12.4 |
23,960 17.4 |
-24.7% | 37,508 14.2 |
| Pre-tax profit | 4,920 | 11,667 | -57.8% | 14,069 | 22,081 | -36.3% | 29,680 |
| Group net profit | 5,554 | 8,293 | -33.0% | 13,008 | 16,749 | -22.3% | 23,903 |
(*) unaudited figures
| Q2 2022 (*) |
Q2 2021 (*) |
H1 2022 | H1 2021 | |
|---|---|---|---|---|
| (€/000) | ||||
| OPERATING REVENUE AND INCOME | ||||
| Revenue | 74,832 | 72,840 | 145,684 | 137,665 |
| Other income | 2,078 | 2,597 | 4,663 | 4,485 |
| Total operating revenue and income | 76,910 | 75,437 | 150,347 | 142,150 |
| OPERATING COSTS | ||||
| Materials | (37,859) | (39,199) | (77,195) | (76,146) |
| Change in inventories | 1,405 | 8,810 | 7,348 | 20,345 |
| Services | (13,612) | (14,231) | (27,647) | (26,517) |
| Personnel costs | (13,684) | (14,250) | (27,146) | (28,136) |
| Other operating costs | (284) | (111) | (728) | (815) |
| Costs for capitalised in-house work | 986 | 620 | 1,907 | 1,303 |
| Total operating costs | (63,048) | (58,361) | (123,461) | (109,966) |
| OPERATING PROFIT BEFORE DEPRECIATION & | ||||
| AMORTISATION, CAPITAL GAINS/LOSSES AND | ||||
| WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT | 13,862 | 17,076 | 26,886 | 32,184 |
| ASSETS (EBITDA) | ||||
| Depreciations and amortisation | (4,995) | (4,209) | (9,063) | (8,341) |
| Capital gains/(losses) on disposals of non-current assets | 93 | 73 | 222 | 117 |
| Write-downs/write-backs of non-current assets | 0 | 0 | 0 | 0 |
| OPERATING PROFIT (EBIT) | 8,960 | 12,940 | 18,045 | 23,960 |
| Financial income | 588 | 51 | 1,117 | 551 |
| Financial expenses | (495) | (317) | (786) | (528) |
| Net income/(expenses) from hyperinflation | (4,606) | 0 | (4,606) | 0 |
| Exchange rate gains and losses | 473 | (1,004) | 347 | (1,853) |
| Profits and losses from equity investments | 0 | (3) | (48) | (49) |
| PROFIT BEFORE TAXES | 4,920 | 11,667 | 14,069 | 22,081 |
| Income taxes | 634 | (3,122) | (1,061) | (4,768) |
| NET PROFIT FOR THE PERIOD | 5,554 | 8,545 | 13,008 | 17,313 |
| of which: | ||||
| Minority interests | 0 | 252 | 0 | 564 |
| PROFIT ATTRIBUTABLE TO THE GROUP | 5,554 | 8,293 | 13,008 | 16,749 |
(*) unaudited figures
| (€/000) | Q2 2022 (*) |
Q2 2021 (*) |
% change | H1 2022 | H1 2021 | % change | 2021 FY |
|---|---|---|---|---|---|---|---|
| Europe (excluding Turkey) |
24,349 | 24,852 | -2.0% | 50,816 | 48,904 | +3.9% | 92,935 |
| Turkey | 18,978 | 17,354 | +9.4% | 36,725 | 33,630 | +9.2% | 65,526 |
| North America | 13,712 | 8,277 | +65.7% | 23,857 | 15,578 | +53.1% | 30,472 |
| South America | 9,310 | 11,531 | -19.3% | 18,053 | 21,421 | -15.7% | 39,589 |
| Africa and Middle East | 5,092 | 6,066 | -16.1% | 10,178 | 9,974 | +2.0% | 19,614 |
| Asia and Oceania | 3,391 | 4,760 | -28.8% | 6,055 | 8,158 | -25.8% | 15,123 |
| Total | 74,832 | 72,840 | +2.7% | 145,684 | 137,665 | +5.8% | 263,259 |
(*) unaudited figures
Sales by product line
| (€/000) | Q2 2022 (*) |
Q2 2021 (*) |
% change | H1 2022 | H1 2021 | % change | 2021 FY |
|---|---|---|---|---|---|---|---|
| Gas parts | 46,331 | 52,452 | -11.7% | 91,363 | 97,041 | -5.9% | 182,468 |
| Hinges | 21,202 | 14,795 | +43.3% | 40,698 | 29,114 | +39.8% | 58,375 |
| Electronic components | 7,299 | 5,593 | +30.5% | 13,623 | 11,510 | +18.4% | 22,416 |
| Total | 74,832 | 72,840 | +2.7% | 145,684 | 137,665 | +5.8% | 263,259 |
(*) unaudited figures
In a macroeconomic scenario that gradually deteriorated - also due to the continuing conflict between Russia and Ukraine - and characterised by strong inflationary tensions, the Sabaf Group recorded further growth in sales compared to the record levels of the first half of 2021. Profitability, despite the strong impact of rising costs of energy and raw materials, remained at historically excellent levels.
The implementation of the Business Plan continued and an increasing diversification of the business was confirmed: in the first half-year, the revenues of the Gas, Hinges and Electronics divisions accounted for 63%, 28% and 9% of the total. International projects also continue apace: in June, production of gas components started in India, while the new plant in Mexico will be completed by the end of the year
Revenue was €145.7 million in the first half-year, an increase of 5.8% versus the figure of €137.7 million in the corresponding period of the previous year. The best results were achieved in North America, up by 53% to €23.9 million, thanks to the start of new hinge supplies and to the increase in market share in gas components. On the other hand, there was a decrease in sales in South America (€18.1 million, -15.7%) and in Asia (€6.1 million, -25.8%) related to the negative economic situation in the main countries (Brazil and China). The European market (€50.8 million, +3.9%) and the Turkish market (€36.7 million, +9.2%) confirmed a positive trend. In terms of products, Hinges (€40.7 million, +39.8%) and Electronics (€13.6 million, +18.4%) showed significant growth rates, while Gas Components recorded a decline (€91.4 million, -5.9%).
Increases in sales prices (+9.3%) largely offset the increase in raw materials and energy costs. The production volumes normalized compared to the exceptional peaks registered in the first half of 2021. EBITDA for the first half of 2022 was €26.9 million (18.5% of turnover, -18.8% compared to €32.2 million in the same period of 2021, equal to 23.4% of sales, a half-year in which the effects of increased costs of materials and energy were still limited). EBIT was €18 million (12.4% of sales) compared to €24 million in the first half of 2021.
Profit before taxes amounted to €14.1 million in the first half of 2022 (€22.1 million in the first half of 2021) and net profit was €13 million (€16.7 million in the first half of 2021).
In the second quarter, the Group recorded sales of €74.8 million, up by 2.7% compared to the second quarter of 2021. EBITDA was €13.9 million, equal to 18.5% of turnover (- 18.8% versus €17 million in the second quarter of 2021, when it was 23.4% of turnover), and EBIT was €9 million, equivalent to 12% of turnover (-30.8% versus €12.9 million in the second quarter of 2021, when it was 17.8% of turnover). Net profit for the period was €5.6 million, compared to €8.3 million for the second quarter of 2021.
| (€/000) | 30/06/2022 | 31/12/2021 | 30/06/2021 |
|---|---|---|---|
| Non-current assets | 154,593 | 130,093 | 136,192 |
| Short-term assets1 Short-term liabilities2 Working capital 3 |
173,159 (70,517) 102,642 |
141,494 (72,863) 68,631 |
147,018 (76,586) 70,432 |
| Provisions for risks and charges, deferred taxes, post-employment benefit and non current payables |
(8,982) | (8,681) | (8,883) |
| Net invested capital | 248,253 | 190,043 | 197,741 |
| Short-term net financial debt | (17,858) | 18,897 | (33,239) |
| Medium/long-term net financial debt | (76,935) | (86,504) | (37,887) |
| Total Net financial debt | (94,793) | (67,607) | (71,126) |
| Group shareholders' equity Third-party shareholders' equity |
153,460 0 |
121,525 911 |
121,250 5,365 |
At 30 June 2022, net working capital amounted to €102.6 million, compared to €68.6 million at the end of 2021. The factors that generated the increase in working capital are as follows:
At 30 June 2022, the impact of the net working capital on sales is 35.2% (26.1% at the end of 2021); in the second half of the year, the figure is expected to normalise to values in line with the historical average of less than 30% of sales.
In the first half-year, investments of €12 million were made (€16.2 million in the first half of 2022), including those for:
In June 2022, Sabaf S.p.A. distributed dividends of €6.7 million (€0.60 per share), in implementation of the shareholders' resolution of 28 April 2022 (€6.2 million dividends
1 Sum of Inventories, Trade receivables, Tax receivables and Other current receivables
2 Sum of Trade payables, Tax payables and Other liabilities
3 Difference between short-term assets and short-term liabilities
paid in 2021). During the first half-year, 48,852 treasury shares were purchased for a value of €1.2 million.
At 30 June 2022, the net financial debt was €94.8 million, compared with €67.6 million on 31 December 2021. Consolidated shareholders' equity attributable to the Group amounted to €153.5 million. The ratio of net financial debt to annualised EBITDA is 1.8.
Transactions with related parties, including intra-group transactions, have not been qualified as atypical or unusual, as they fall under the normal course of Group operations. These transactions are regulated at arm's length conditions.
Related party transactions other than intra-group transactions are described in the Explanatory Notes to the half-yearly condensed consolidated financial statements, which also show to what extent related- party transactions affected financial statement items.
In relation to the conflict between Ukraine and Russia, note that the Group has an insignificant direct exposure to the markets of Russia, Belarus and Ukraine. However, these are markets supplied by some of the Sabaf Group's customers, who are exposed to varying degrees in terms of market access and changes in consumer behaviour.
The outbreak of the conflict generated strong tensions on the prices of electricity, gas and raw materials used and required further revisions of sales lists to limit the impact on the Group's profitability. Moreover, high levels of inflation are likely to significantly affect demand and, more generally, the performance of the sector. The overall repercussions on the macroeconomic system are not quantifiable in that they are related to future developments of the conflict, which are currently unpredictable.
The Group also considered the risk of a possible rationing of methane gas supplies in the coming months, for the Ospitaletto plant in particular, which uses methane as an energy source for some production processes. In case of a possible reduction in the availability of methane gas, the Group can count on production capacity at other plants, in particular in Turkey, where any production that cannot be carried out in Italy can be temporarily allocated.
The coronavirus pandemic presented all organisations with new challenges. The following risks have emerged or become more significant:
The Group maintains active counteracting and mitigating actions to minimise the impact on the business and continues to monitor any element that may modify the risk factors related to the development of the pandemic and its direct and indirect effects on business activities.
The Sabaf Group is also exposed to various risk factors, attributable to the macrocategories described below:
Risks deriving from the external context in which Sabaf operates, which could have a negative impact on the economic and financial sustainability of the business in the medium/long-term. The most significant risks in this category are related to general economic conditions, trend in demand and product competition, in addition to the risks related to the possible instability in the emerging countries in which the Group operates.
Strategic risks that could negatively impact Sabaf's medium-term performance, including, for example, risks related to low profitability of certain product lines, the risks arising from the mismatch between market needs and product innovation and the loss of business opportunities in the Chinese market.
Risks of suffering losses due to inadequate or malfunctioning processes, human resources and information systems. This category includes financial risks (e.g. losses deriving from the volatility of the price of raw materials and from fluctuations in exchange rates), risks related to production processes (e.g. product liability, saturation level of production capacity), organisational risks (e.g. loss of key staff and expertise and/or the difficulty of replacing them) and Information Technology risks.
Risks related to Sabaf's contractual liabilities and compliance with the regulations applicable to the Group, including: Legislative Decree 231/2001, Law 262/2005, HSE regulations, regulations applicable to listed companies, tax regulations, labour regulations, international trade regulations and intellectual property regulations.
The Report on Operations at 31 December 2021, to which reference should be made, describes in detail these risks and the related risk management actions that are currently being implemented.
Environmental issues are also managed through a risk-based approach. Environmental sustainability is considered from the product design stage, through the different stages of its implementation and from a perspective that considers the whole life cycle of the product. With regard to physical risks related to climate change, such as the increase in global temperatures, sea level and the increase in extreme weather events, the Group has not identified any significant risks to date. On the other hand, transitional risks, such as the increase in energy costs, changes in consumer choices or those related to the
introduction of new technologies, which the Group manages at a strategic level, are of significant impact and probability.
The recently concluded supply agreements on a global scale with some of the main players in the sector will continue to support the growth trend in sales in the coming months and lead to confirm the forecasts for the full year 2022 previously released.
However, the climate of uncertainty fuelled by inflationary pressures, less accommodative monetary policies and the continuing conflict between Russia and Ukraine is weakening the reference market and limiting visibility into the second half of the year.
These forecasts assume a macroeconomic scenario not affected by unpredictable events. If the economic situation were to change significantly, actual figures might diverge from the forecasts.
For the Board of Directors The Chairman Claudio Bulgarelli
Ospitaletto, 4 August 2022
| (€/000) | Notes | 30/06/2022 | 31/12/2021 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 1 | 95,015 | 82,407 |
| Investment property | 2 | 1,713 | 2,311 |
| Intangible assets | 3 | 48,563 | 35,553 |
| Equity investments | 4 | 83 | 83 |
| Non-current financial assets | 10 | 0 | 0 |
| Non-current receivables | 5 | 1,215 | 1,100 |
| Deferred tax assets | 22 | 8,004 | 8,639 |
| Total non-current assets | 154,593 | 130,093 | |
| CURRENT ASSETS | |||
| Inventories | 6 | 72,962 | 64,153 |
| Trade receivables | 7 | 90,189 | 68,040 |
| Tax receivables | 8 | 4,452 | 6,165 |
| Other current receivables | 9 | 5,556 | 3,136 |
| Current financial assets | 10 | 1,461 | 1,172 |
| Cash and cash equivalents | 11 | 12,343 | 43,649 |
| Total current assets | 186,963 | 186,315 | |
| ASSETS HELD FOR SALE | 0 | 0 | |
| TOTAL ASSETS | 341,556 | 316,408 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 12 | 11,533 | 11,533 |
| Retained earnings, Other reserves | 13 | 128,919 | 86,089 |
| Profit for the year | 13,008 | 23,903 | |
| Total equity interest of the Parent Company | 153,460 | 121,525 | |
| Minority interests | 0 | 911 | |
| Total shareholders' equity | 153,460 | 122,436 | |
| NON-CURRENT LIABILITIES | |||
| Loans | 14 | 76,935 | 86,504 |
| Post-employment benefit and retirement provisions | 16 | 3,590 | 3,408 |
| Provisions for risks and charges | 17 | 813 | 1,334 |
| Deferred tax liabilities | 22 | 4,579 | 3,939 |
| Total non-current liabilities | 85,917 | 95,185 | |
| CURRENT LIABILITIES | |||
| Loans | 14 | 30,694 | 24,405 |
| Other financial liabilities | 15 | 968 | 1,519 |
| Trade payables | 18 | 55,867 | 54,837 |
| Tax payables | 19 | 1,678 | 4,951 |
| Other payables | 20 | 12,972 | 13,075 |
| Total current liabilities | 102,179 | 98,787 | |
| LIABILITIES HELD FOR SALE | 0 | 0 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 341,556 | 316,408 |
| Notes | H1 2022 | H1 2021 | |
|---|---|---|---|
| (€/000) | |||
| OPERATING REVENUE AND INCOME | |||
| Revenue | 23 | 145,684 | 137,665 |
| Other income | 24 | 4,663 | 4,485 |
| Total operating revenue and income | 150,347 | 142,150 | |
| OPERATING COSTS | |||
| Materials | 25 | (77,195) | (76,146) |
| Change in inventories | 7,348 | 20,345 | |
| Services | 26 | (27,647) | (26,517) |
| Personnel costs | 27 | (27,146) | (28,136) |
| Other operating costs | 28 | (728) | (815) |
| Costs for capitalised in-house work | 1,907 | 1,303 | |
| Total operating costs | (123,461) | (109,966) | |
| OPERATING PROFIT BEFORE DEPRECIATION & | |||
| AMORTISATION, CAPITAL GAINS/LOSSES AND WRITE-DOWNS/WRITE-BACKS OF NON |
26,886 | 32,184 | |
| CURRENT ASSETS (EBITDA) | |||
| Depreciations and amortisation | (9,063) | (8,341) | |
| Capital gains/(losses) on disposals of non-current assets | 222 | 117 | |
| Write-downs/write-backs of non-current assets | 0 | 0 | |
| OPERATING PROFIT (EBIT) | 18,045 | 23,960 | |
| Financial income | 29 | 1,117 | 551 |
| Financial expenses Net income/(expenses) from hyperinflation |
30 30 |
(786) (4,606) |
(528) 0 |
| Exchange rate gains and losses | 31 | 347 | (1,853) |
| Profits and losses from equity investments | (48) | (49) | |
| PROFIT BEFORE TAXES | 14,069 | 22,081 | |
| Income taxes | 32 | (1,061) | (4,768) |
| PROFIT FOR THE YEAR | 13,008 | 17,313 | |
| of which Minority interests |
0 | 564 | |
| PROFIT ATTRIBUTABLE TO THE GROUP | 13,008 | 16,749 | |
| (in €) | |||
| Basic earnings per share Diluted earnings per share |
33 33 |
1.158 1.158 |
1.496 1.496 |
| H1 2022 | H1 2021 |
|---|---|
| 13,008 | 17,313 |
| (1,454) | (2,210) |
| (266) | |
| 0 | 0 |
| (1,627) | (2,476) |
| 11,381 | 14,837 |
| 564 | |
| (9) | |
| 11,381 | 555 |
| (173) 0 0 |
| H1 2022 | H1 2021 | |
|---|---|---|
| Cash and cash equivalents at beginning of period | 43,649 | 13,318 |
| Net profit/(loss) for the period | 13,008 | 17,313 |
| Adjustments for: | ||
| - Depreciation and amortisation for the period | 9,063 | 8,341 |
| - Realised gains/losses | (222) | (117) |
| - Profits and losses from equity investments | 48 | 49 |
| - Monetary revaluation IAS 29 | 1,453 | |
| - Financial income and expenses | 878 | (23) |
| - IFRS 2 measurement stock grant plan | 789 | 155 |
| - Income tax | 1,061 | 4,768 |
| Change in post-employment benefit | 182 | 23 |
| Change in risk provisions | (521) | (545) |
| Change in trade receivables | (22,151) | (18,230) |
| Change in inventories | (6,037) | (19,511) |
| Change in trade payables | 1,047 | 14,721 |
| Change in net working capital | (27,141) | (23,020) |
| Change in other receivables and payables, deferred taxes | 779 | 1,103 |
| Payment of taxes | (6,751) | (923) |
| Payment of financial expenses | (988) | (406) |
| Collection of financial income | 153 | 111 |
| Cash flows from operations | (8,209) | 6,829 |
| Investments in non-current assets | ||
| - intangible | (1,475) | (1,004) |
| - tangible | (10,739) | (15,215) |
| - financial | 0 | 0 |
| Disposal of non-current assets | 1,196 | 1,057 |
| Cash flows from investment activities | (11,018) | (15,162) |
| Repayment of loans | (14,607) | (11,921) |
| New loans | 9,621 | 25,349 |
| Change in financial assets | 672 | 117 |
| Purchase of treasury shares | (1,189) | 0 |
| Payment of dividends | (6,690) | (6,172) |
| Cash flows from financing activities | (12,193) | 7,373 |
| Change in the scope of consolidation | (97) | 0 |
| Foreign exchange differences | 211 | 562 |
| Net cash flows for the period | (31,306) | (398) |
| Cash and cash equivalents at end of period | 12,343 | 12,920 |
| (€/000) | Share capital |
Share premium reserve |
Legal reserve |
Treasury shares |
Translation reserve |
Post employment benefit discounting reserve |
Other reserves |
Profit for the year |
Total Group shareholders' equity |
Minority interests |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2020 | 11,533 | 10,002 | 2,307 | (4,341) | (31,503) | (541) | 111,580 | 13,961 | 112,998 | 4,809 | 117,807 |
| Allocation of 2020 profit - carried forward - dividends paid out IFRS 2 measurement stock grant plan Treasury share transactions |
438 | 7,789 155 (438) |
(7,789) (6,172) |
(6,172) 155 |
(6172) 155 |
||||||
| Other changes | (13) | (13) | 1 | (12) | |||||||
| Components of the total result | (2,210) | (257) | (2,467) | (9) | (2,476) | ||||||
| Result for the first half of 2021 | 16,749 | 16,749 | 564 | 17,313 | |||||||
| Balance at 30 June 2021 | 11,533 | 10,002 | 2,307 | (3,903) | (33,713) | (541) | 118,816 | 16,749 | 121,250 | 5,365 | 126,615 |
| IFRS 2 measurement stock grant plan Change in the scope of consolidation Other changes Total profit at 31 December 2021 |
(12,342) | 20 | 650 4,909 25 (141) |
7,154 | 650 4,909 25 (5,309) |
(4,678) (1) 225 |
650 231 24 (5,084) |
||||
| Balance at 31 December 2021 | 11,533 | 10,002 | 2,307 | (3,903) | (46,055) | (521) | 124,259 | 23,903 | 121,525 | 911 | 122,436 |
| Monetary revaluation - hyperinflation (IAS 29) |
11,402 | 11,402 | 11,402 | ||||||||
| Balance at 1 January 2022 restated | 11,533 | 10,002 | 2,307 | (3,903) | (46,055) | (521) | 135,661 | 23,903 | 132,927 | 911 | 133,838 |
| Allocation of 2021 profit - carried forward - dividends paid out IFRS 2 measurement stock grant plan Treasury share transactions Change in the scope of consolidation Monetary revaluation - hyperinflation (IAS 29) Other changes Total profit at 30 June 2022 |
(123) | (1,454) | 17,145 789 (1,066) 784 15,531 (5) (173) |
(17,145) (6,758) 13,008 |
(6,758) 789 (1,189) 784 15,531 (5) 11,381 |
(911) | (6,758) 789 (1,189) (127) 15,531 (5) 11,381 |
||||
| Balance at 30 June 2022 | 11,533 | 10,002 | 2,307 | (4,026) | (47,509) | (521) | 168,666 | 13,008 | 153,460 | 0 | 153,460 |
Sabaf Group | 2022 Half-Yearly Report 18
The half-yearly condensed consolidated financial statements at 30 June 2022 were prepared in accordance with IAS 34 on interim reports. These condensed half-year consolidated financial statements do not include all the information required for the annual financial report and must be read together with the financial statements for the year ended 31 December 2021. Reference to IFRS also includes all current International Accounting Standards (IAS). They have been prepared in euro, rounding amounts to the nearest thousand, and are compared with the half-yearly and annual consolidated financial statements of the previous year, prepared according to the same standards, with the exception of those relating to the application of IAS 29 with reference to the financial statements of the Turkish subsidiaries. They consist of the consolidated statement of financial position, the consolidated income statement, the consolidated statement of comprehensive income, the statement of changes in consolidated shareholders' equity, the consolidated statement of cash flows and these explanatory notes.
The half-yearly consolidated financial statements have been prepared on a going concern basis with reference to which the Group assessed that it is a going concern in accordance with paragraphs 25 and 26 of IAS 1 and Art. 2423 bis of the Italian Civil Code, also due to the strong competitive position, high profitability and solidity of the financial structure.
The consolidation policies, criteria for converting items in foreign currencies, the accounting principles and policies are the same as those used for preparing the financial statements at 31 December 2021, to which reference should be made for additional information, with the exception of the application of IAS 29 with reference to the financial statements of Turkish subsidiaries starting from the current financial year (for further details, please refer to the specific paragraph Hyperinflation - Turkey: application of IAS 29) and for the adoption of the new standards and amendments effective from 1 January 2022 described below. The Group has not early adopted any new standards, interpretations or amendments issued but not yet in force.
The amendment clarifies that all costs directly attributable to the contract must be taken into account when estimating the possible onerousness of a contract. Accordingly, the assessment of whether a contract is onerous includes not only incremental costs (such as the cost of direct material used in processing), but also all costs that the enterprise cannot avoid because it has entered into the contract (such as, for example, the share of depreciation of machinery used for the performance of the contract).
These changes had no impact on the Group's half-yearly condensed consolidated financial statements.
The purpose of the amendments is not to allow the deduction from the cost of property, plant and equipment of the amount received from the sale of goods produced in the test phase of the asset. These sales revenues and related production costs will therefore be
recognised in the income statement. These changes had no impact on the Group's halfyearly condensed consolidated financial statements.
The amendment allows a subsidiary that chooses to apply paragraph D16(a) of IFRS 1 to account for cumulative translation differences on the basis of the amounts recognised by the parent company, taking into account the parent's date of transition to IFRSs. This amendment had no impact on the Group's half-yearly condensed consolidated financial statements as the Group is not a first-time adopter.
The amendments are intended to replace references to the Framework for the Preparation and Presentation of Financial Statements with the references to the Conceptual Framework for Financial Reporting published in March 2018 without a significant change to the requirements of the standard. The Board also added an exception to the measurement principles of IFRS 3 to avoid the risk of potential "day-after" losses or gains arising from liabilities and contingent liabilities that would fall within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately. The exemption requires entities to apply the requirements of IAS 37 or IFRIC 21, rather than the Conceptual Framework, to determine whether an obligation exists at the date of acquisition. The amendment also added a new paragraph to IFRS 3 to clarify that contingent assets do not qualify as recognisable assets at the date of acquisition. These amendments had no impact on the Group's half-yearly condensed consolidated financial statements in that no contingent assets, liabilities or contingent liabilities were recognised in the half-year for the purpose of these amendments.
the amendments clarify what fees can be included in measuring whether the terms of a new financial liability (or changes to an existing financial liability) are materially different from the terms of the original financial liability. This amendment had no impact on the Group's half-yearly condensed consolidated financial statements in that there were no changes in the Group's financial liabilities during the half-year.
The amendment removes the requirement to exclude cash flows arising from taxation when measuring the fair value of assets within the scope of IAS 41. This amendment had no impact on the Group's half-yearly condensed consolidated financial statements in that the Group does not have any assets to which IAS 41 applies.
The Group has adopted the following formats:
a comprehensive income statement, which records all changes in Other overall earnings (losses) during the year, generated by transactions other than those conducted with shareholders and based on specific IAS/IFRS standards;
a statement of cash flows that presents cash flows originating from operating activity, using the indirect method.
Use of these formats permits the most meaningful representation of the Group's operating results, financial position and cash flows.
The scope of consolidation at 30 June 2022 comprises the parent company Sabaf S.p.A. and the following companies controlled by Sabaf S.p.A., consolidated on a line-by-line basis:
Control is the power to determine, directly or indirectly, the financial and management policies of an entity so as to obtain benefits from its activities. Subsidiaries are consolidated from the date on which control begins until the date on which control ceases.
Compared to the consolidated financial statements at 31 December 2021, Handan ARC Burners Co. Ltd. is no longer consolidated. The 51% stake, which was held indirectly through A.R.C. s.r.l., was sold to a third party during the first quarter of 2022. The plant, equipment and inventories of Handan ARC Burners Co. Ltd. were simultaneously acquired by Sabaf Appliance Components Kunshan Co., Ltd. (Sabaf China). This operation did not have a significant impact on the Group's shareholders' equity.
The companies in which Sabaf S.p.A. simultaneously possess the following three elements are considered subsidiaries: (a) power over the company; (b) exposure or rights to variable returns resulting from involvement therein; (c) ability to affect the size of these returns by exercising power. If these subsidiaries exercise a significant influence, they are consolidated as from the date in which control begins until the date in which control ends so as to provide a correct representation of the Group's operating results, financial position and cash flows.
The criteria applied for consolidation are as follows:
a) Assets and liabilities, income and costs in the financial statements consolidated on a line-by-line basis are incorporated into the Group financial statements, regardless of the
entity of the equity interest concerned. In addition, the carrying value of equity interests is eliminated against the shareholders' equity relating to investee companies.
b) Positive differences arising from elimination of equity investments against the carrying value of shareholders' equity at the date of first-time consolidation are attributed to the higher values of assets and liabilities when possible and, for the remainder, to goodwill.
c) Payable/receivable and cost/revenue items between consolidated companies and profits/losses arising from intra-group transactions are eliminated.
d) If minority shareholders exist, the portion of shareholders' equity and net profit for the period pertaining to them is posted in specific items of the consolidated statement of financial position and income statement.
Separate financial statements of each company belonging to the Group are prepared in the currency of the country in which that company operates (functional currency). For the purposes of the consolidated financial statements, the financial statement of each foreign entity is expressed in euro, which is the Group's functional currency and the reporting currency for the consolidated financial statements.
The balance sheet items in accounts expressed in currencies other than euro are converted by applying current end-of-year exchange rates. Income statement items are converted at average exchange rates for the period, with the exception of the financial statements of companies operating in hyperinflationary economies whose income statements are converted by applying the end-of-year exchange rate as required by IAS 21 paragraph 42.b.
Foreign exchange differences arising from the comparison between opening shareholders' equity converted at current exchange rates and at historical exchange rates, together with the difference between the net result expressed at average and current exchange rates, are allocated to "Other Reserves" in shareholders' equity.
The exchange rates used for conversion into euro of the statements of financial position of the foreign subsidiaries, prepared in local currency, are shown in the following table:
| Description of currency |
Exchange rate in effect at 30/06/2022 |
Average exchange rate 01/01/2022 - 30/06/2022 |
Exchange rate in effect at 31/12/2021 |
Average exchange rate 01/01/2021 - 30/06/2021 |
|---|---|---|---|---|
| Brazilian real | 5.4229 | 5.5565 | 6.3101 | 6.4901 |
| Turkish lira | 17.322 | n/a | 15.233 | 9.5195 |
| Chinese renminbi | 6.9624 | 7.0823 | 7.1947 | 7.7938 |
| Polish Zloty | n/a | n/a | 4.5969 | 4.5373 |
| Indian Rupee | 82.113 | 83.318 | 84.229 | 88.413 |
| Mexican peso | 20.964 | 22.165 | 23.143 | 24.327 |
| US Dollar | 1.0387 | 1.0934 | 1.1884 | 1.2054 |
The Group's operating segments in accordance with IFRS 8 - Operating Segment are identified in the business segments that generate revenue and costs, whose results are periodically reassessed by top management in order to assess performance and decisions regarding resource allocation. The Group operating segments are the following:
The preparation of the half-yearly financial statements and notes in accordance with IFRS requires the Directors to make estimates and assumptions that affect the values of revenue, costs, assets and liabilities of the half-yearly financial statements and the disclosures on contingent assets and liabilities at 30 June 2022. In the event that in future these estimates and assumptions, which are based on the Directors' best assessments, should deviate from actual circumstances, they will be amended appropriately at the time the circumstances change. Estimates and assumptions are regularly reviewed and the effects of each change immediately reflected in the income statement.
It should also be noted that certain valuation processes, particularly the more complex ones such as the determination of any impairment losses of non-current assets, are generally carried out in full only for the preparation of the annual financial statements, when all information that could be necessary is available, except in cases in which impairment indicators require an immediate valuation of any impairment losses.
As from 1 April 2022, the Turkish economy is considered and hyperinflationary economy in accordance with the criteria set out in "IAS 29 - Financial Reporting in Hyperinflationary Economies", i.e. following the assessment of qualitative and quantitative elements including the presence of a cumulative inflation rate greater than 100% over the previous three years.
Therefore, as from these financial statements, IAS 29 is concretely applied with reference to the parent company's subsidiaries in Turkey: Sabaf Turkey (Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki) and Okida (Okida Elektronik Sanayi Ve Ticaret A.S.). In order to reflect the changes in the purchasing power of the Turkish lira at the end of this reporting period, the Group restated the value of non-monetary items, shareholders' equity and income statement account items of the investee companies in Turkey to the extent of their recoverable amount, applying the change in the general consumer price index to historical data.
| Consumer price index | Value at 31/12/2021 |
Value at 30/06/2022 |
Change |
|---|---|---|---|
| TURKSTAT | 686.95 | 977.90 | +42.35% |
| Consumer price index | Value at 01/01/2003 |
Value at 31/12/2021 |
Change |
| TURKSTAT | 100 | 686.95 | +586.95% |
The value of the general consumer price index at the end of the reporting period and the changes in the index during the current and previous financial year are shown below:
The accounting effects of the restatement were recognised as follows.
In accordance with IAS 21 (paragraph 42.b), it was not necessary to restate the financial and economic data for the year 2021 for comparative purposes only, as the Group's functional currency does not belong to a hyperinflationary economy.
The first-time adoption of IAS 29 generated a positive adjustment (net of the related tax effect) recognised in shareholders' equity reserves in the consolidated financial statements at 1 January 2022 of €11,402 thousand. Moreover, during the first half of 2022, the application of IAS 29 resulted in the recognition of a net financial expense (before tax) of €4,606 thousand.
| Consolidated statement of financial position |
30/06/2022 | Hyperinflation effect |
30/06/2022 with Hyperinflation effect |
|---|---|---|---|
| Total non-current assets | 132,129 | 22,464 | 154,593 |
| Total current assets | 184,179 | 2,784 | 186,963 |
| Total Assets | 316,308 | 25,248 | 341,556 |
| Total shareholders' equity | 128,742 | 24,718 | 153,460 |
| Total non-current liabilities | 85,387 | 530 | 85,917 |
| Total current liabilities | 102,179 | - | 102,179 |
| Total liabilities and shareholders' equity |
316,308 | 25,248 | 341,556 |
The effects of the application of hyperinflation on the Consolidated Statement of Financial Position and Consolidated Income Statement are shown below.
| Consolidated income statement |
First half of 2022 |
Hyperinflation effect |
First half of 2022 with Hyperinflation effect |
|---|---|---|---|
| Operating revenue and income | 148,809 | 1,538 | 150,347 |
| Operating costs | (124,044) | 583 | (123,461) |
| Operating profit before depreciation & amortisation, capital gains/losses and write-downs/write-backs of non-current assets (EBITDA) |
24,765 | 2,121 | 26,886 |
| EBIT | 16,734 | 1,311 | 18,045 |
| Result before taxes | 17,526 | (3,457) | 14,069 |
| Income taxes | (3,065) | 2,004 | (1,061) |
| Profit for the year | 14,461 | (1,453) | 13,008 |
| Property | Plant and | Other assets | Assets under | Total | |
|---|---|---|---|---|---|
| Cost | equipment | construction | |||
| At 31 December 2021 |
59,430 | 228,297 | 58,829 | 6,636 | 353,192 |
| Increases | 165 | 3,959 | 2,400 | 4,192 | 10,716 |
| Reclassifications | 12 | 2,695 | 308 | (3,050) | (35) |
| Disposals | - | (1,138) | (436) | - | (1,574) |
| Change in the scope of consolidation |
- | (623) | (133) | 728 | (28) |
| Monetary revaluation (IAS 29) |
4,251 | 9,577 | 3,271 | - | 17,099 |
| Forex differences | 245 | 1,001 | 392 | 46 | 1,684 |
| At 30 June 2022 | 64,103 | 243,768 | 64,631 | 8,552 | 381,054 |
| Accumulated depreciations At 31 December 2021 |
26,203 | 194,530 | 50,052 | - | 270,785 |
| Increases | 1,159 | 4,543 | 1,930 | - | 7,632 |
| Reclassifications | - | (99) | 99 | - | - |
| Disposals | - | (1,023) | (78) | - | (1,101) |
| Monetary revaluation (IAS 29) |
1,677 | 4,387 | 1,830 | - | 7,894 |
| Forex differences | 32 | 477 | 321 | - | 830 |
| At 30 June 2022 | 29,071 | 202,815 | 54,153 | - | 286,039 |
| Carrying value | |||||
| At 31 December 2021 |
33,227 | 33,767 | 8,777 | 6,636 | 82,407 |
| At 30 June 2022 | 35,032 | 40,953 | 10,478 | 8,552 | 95,015 |
The carrying value of the item "Property" is made up as follows:
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Land | 9,225 | 8,613 | 612 |
| Industrial buildings | 25,807 | 24,614 | 1,193 |
| Total | 35,032 | 33,227 | 1,805 |
Changes in property, plant and equipment resulting from the application of IFRS 16 are shown below:
| Property | Plant and | Other assets | Total | |
|---|---|---|---|---|
| equipment | ||||
| At 31 December 2021 | 2,221 | 203 | 932 | 3,356 |
| Increases | 144 | 6 | 159 | 310 |
| Decreases | - | - | - | - |
| Depreciations | (371) | (92) | (169) | (633) |
| Foreign exchange differences | (61) | - | 6 | (55) |
| At 30 June 2022 | 1,933 | 117 | 928 | 2,978 |
During the half-year, the most significant investments were made:
Internal and external indicators which would necessitate an impairment test on property, plant and equipment, with reference to these half-yearly financial statements were not identified.
| Cost | |
|---|---|
| At 31 December 2021 | 10,177 |
| Increases | 144 |
| Disposals | (1,236) |
| At 30 June 2022 | 9,085 |
| Cumulative depreciations and write | |
| downs | |
| At 31 December 2021 | 7,866 |
| Depreciations for the period Derecognition due to disposal |
162 (656) |
| Carrying value | |
|---|---|
| At 31 December 2021 | 2,311 |
| At 30 June 2022 | 1,713 |
Disposals during the period resulted in capital gains totalling €226 thousand.
Changes in investment property resulting from the application of IFRS 16 are shown below:
| Investment | |
|---|---|
| property | |
| At 31 December 2021 | 3 |
| Increases | 144 |
| Depreciations | (21) |
| At 30 June 2022 | 126 |
This item includes non-operating buildings owned by the Group: these are mainly properties for residential use, located in Ospitaletto near Sabaf S.p.A.'s headquarters, held for rental or sale. The carrying value is considered to be in line with the presumed realisable value.
| Goodwill | Patents, software | Development | Other | Total | |
|---|---|---|---|---|---|
| and know-how | costs | intangible assets |
|||
| Cost | |||||
| At 31 December 2021 | 22,136 | 9,585 | 8,298 | 18,701 | 58,720 |
| Increases | - | 271 | 1,021 | 183 | 1,475 |
| Decreases | - | (142) | - | - | (142) |
| Reclassifications | - | 235 | (242) | 63 | 56 |
| Monetary revaluation (IAS 29) |
9,789 | 350 | - | 5,782 | 15,921 |
| Forex differences | (893) | (17) | - | (525) | (1,435) |
| At 30 June 2022 | 31,032 | 10,282 | 9,077 | 24,204 | 74,595 |
| Accumulated amortisation |
|||||
| At 31 December 2021 | 4,546 | 8,787 | 4,800 | 5,034 | 23,167 |
| Increases | - | 239 | 182 | 848 | 1,269 |
| Decreases | - | - | - | - | - |
| Reclassifications | - | 13 | (13) | 23 | 23 |
| Monetary revaluation (IAS 29) |
- | 276 | - | 1,436 | 1,712 |
| Forex differences | - | (11) | - | (128) | (139) |
| At 30 June 2022 | 4,546 | 9,304 | 4,969 | 7,213 | 26,032 |
| Carrying value | |||||
| At 31 December 2021 | 17,590 | 798 | 3,498 | 13,667 | 35,553 |
| At 30 June 2022 | 26,486 | 978 | 4,108 | 16,991 | 48,563 |
The Group verifies the ability to recover goodwill at least once a year or more frequently if there are indications of impairment. Recoverable amount is determined through value of use, by discounting expected cash flows.
The goodwill booked in the financial statements is allocated:
An analysis of impairment indicators was carried out by assessing both external and internal factors. The Group did not identify signs that tangible and intangible assets including goodwill relating to the "Hinges", "Professional burners", "Electronic components" and "C.M.I. Hinges" CGUs may have suffered an impairment loss. All CGUs achieved largely positive results and in line with expectations in the first half of 2022. In consideration of the margins emerging from the impairment tests and sensitivity analysis carried out at 31 December 2021, no impairment test was required at 30 June 2022.
Other intangible fixed assets have a finite useful life and, as a result, are amortised throughout their life. The useful life of projects for which development costs are capitalised is estimated to be 10 years.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Other equity investments | 83 | 83 | - |
| Total | 83 | 83 | - |
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Tax receivables | 1,098 | 985 | 113 |
| Guarantee deposits | 115 | 115 | - |
| Other | 2 | - | 2 |
| Total | 1,215 | 1,100 | 115 |
Tax receivables relate to indirect taxes expected to be recovered after 30 June 2023.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Raw Materials | 32,962 | 26,771 | 6,191 |
| Semi-processed goods | 18,126 | 15,133 | 2,993 |
| Finished products | 26,725 | 25,646 | 1,079 |
| Provision for inventory write-downs | (4,851) | (3,397) | (1,454) |
| Total | 72,962 | 64,153 | 8,809 |
The value of inventories at 30 June 2022 increased due to the inflationary effect caused by the increase in the prices of raw materials (estimated at approximately €8 million) and as a result of the monetary revaluation carried out in application of IAS 29 for hyperinflation in Turkey (of €2,784 thousand). On the other hand, the volumes of products in stock showed a moderate decline.
At 30 June 2022, the value of inventories was adjusted based on an improved estimate of the idle capacity and obsolescence risk, measured by analysing slow and non-moving inventory.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Total trade receivables | 91,275 | 69,139 | 22,136 |
| Bad debt provision | (1,086) | (1,099) | 13 |
| Net total | 90,189 | 68,040 | 22,149 |
The amount of trade receivables at 30 June 2022 increased significantly compared to the balance at the end of 2021 due to the different seasonal trend of sales (revenues of €74.8 million in the second quarter of 2022 compared to €62.5 million in the fourth quarter of 2021) and the temporary deferral of some collections.
The amount of trade receivables recognised in the financial statements includes approximately €33.9 million in insured receivables (€24.3 million at 31 December 2021).
Receivables assigned to factors without recourse (€9,683 thousand at 30 June 2022, €8,398 thousand at 31 December 2021) are derecognised from the Statement of Financial Position in that the reference contract provides for the assignment of ownership of the receivables, together with ownership of the cash flows generated by the receivable, as well as of all risks and benefits, to the assignee.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Current receivables (not past due) | 79,756 | 60,358 | 19,398 |
| Outstanding up to 30 days | 7,495 | 4,132 | 3,363 |
| Outstanding from 30 to 60 days | 1,513 | 1,290 | 223 |
| Outstanding from 60 to 90 days | 1,298 | 794 | 504 |
| Outstanding for more than 90 days | 1,213 | 2,565 | (1,352) |
| Total | 91,275 | 69,139 | 22,136 |
The breakdown of trade receivables by past due period is shown below:
The bad debt provision was adjusted to the better estimate of the credit risk and expected losses at the end of the reporting period. Changes during the year were as follows:
| 31/12/2021 | 1,099 |
|---|---|
| Provisions | - |
| Utilisation | - |
| Forex differences | (13) |
| 30/06/2022 | 1,086 |
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| For income tax | 1,341 | 1,395 | (54) |
| For VAT and other sales taxes | 3,111 | 4,751 | (1,640) |
| Other tax credits | - | 19 | (19) |
| Total | 4,452 | 6,165 | (1,713) |
At 30 June 2022, income tax receivables include, in addition to advances paid during the period:
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Advances to suppliers | 2,737 | 859 | 1,878 |
| Accrued income and prepaid | |||
| expenses | 1,207 | 476 | 731 |
| Credits to be received from | 794 | 1,267 | (473) |
| suppliers | |||
| Other | 818 | 534 | 284 |
| Total | 5,556 | 3,136 | 2,420 |
Credits to be received from suppliers mainly refer to bonuses paid to the Group for the attainment of purchasing objectives.
The higher value of accrued income and prepaid expenses at 30 June 2022 compared to 31 December 2021 is due to the recognition of costs or revenues whose collection or payment occurs annually at the beginning or end of year, such as insurance premiums.
| 30/06/2022 | 31/12/2021 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Restricted bank accounts | 500 | - | 1,172 | - |
| Derivative instruments on | ||||
| interest rates | 961 | - | - | - |
| Total | 1,461 | - | 1,172 | 0 |
At 30 June 2022, a term deposit of €500 thousand, due by 2022, for the portion of the price not yet paid to the sellers of the C.M.I. equity investment and deposited as collateral in accordance with the terms of the C.M.I. acquisition agreement (Note 15).
At 30 June 2022, the Group has in place six interest rate swap (IRS) contracts for amounts and maturities coinciding with six unsecured loans that are being amortised, whose residual value at 30 June 2022 is €32,315 thousand. The contracts have not been designated as capital flow hedges and are therefore at their fair value through profit and loss, and recognised in the items "Financial assets" or "Other financial liabilities".
Cash and cash equivalents, which amounted to €12,343 thousand at 30 June 2022 (€43,649 thousand at 31 December 2021) consisted of bank current account balances of €12,261 thousand (€43,217 thousand at 31 December 2021) and investments in liquidity of €82 thousand (€432 thousand at 31 December 2021). Changes in the cash and cash equivalents are analysed in the statement cash flows.
Sabaf S.p.A.'s share capital at 30 June 2022 consists of 11,533,450 shares with a par value of €1.00 each and has not changed compared with 31 December 2021.
With regard to the 2018 - 2020 Stock Grant Plan, following the expiry of the three-year vesting period, during the first half of 2022, 79,128 ordinary shares of the Company were allocated and transferred to the beneficiaries of Cluster 2, through the use of shares already available to the issuer.
In the course of the first half year of 48,852 treasury shares were acquired at an average unit price of €24.32, while they have not been sold.
At 30 June 2022, Sabaf S.p.A. held 281,526 treasury shares (2.466% of the share capital), reported in the financial statements as an adjustment to shareholders' equity at a weighted average unit value of €14.16 (the closing stock market price of the Share at 30 June 2022 was €23.45). There were 11,251,924 outstanding shares at 30 June 2022.
Items "Retained earnings, other reserves" of €127,213 thousand included, at 30 June 2022, the stock grant reserve of €1,593 thousand, which included the measurement at 30 June 2022 of the fair value of rights assigned to receive shares of the Parent Company relating to the 2021 – 2023 Stock Grant Plan, medium- and long-term incentive plan for directors and employees of the Sabaf Group, for the details of which reference is made to Note 37.
The following table shows the change in the Cash Flow Hedge reserve related to the application of IFRS 9 on derivative contracts and referring to the recognition in net equity of the effective part of the derivative contracts signed to hedge the foreign exchange rate risk for which the Group applies hedge accounting.
| Value at 31 December 2021 | (151) |
|---|---|
| Change during the period | (173) |
| Value at 30 June 2022 | (324) |
| 30/06/2022 | 31/12/2021 | |||||
|---|---|---|---|---|---|---|
| Current | Non-current | Total | Current | Non current |
Total | |
| Bond issue | - | 29,667 | 29,667 | - | 29,649 | 29,649 |
| Unsecured loans | 19,600 | 44,733 | 64,333 | 19,044 | 53,913 | 72,957 |
| Short-term bank loans | 2,000 | - | 2,000 | 1,769 | - | 1,769 |
| Advances on bank receipts or invoices |
7,694 | - | 7,694 | 2,263 | - | 2,263 |
| Leases | 1,290 | 2,535 | 3,825 | 1,329 | 2,942 | 4,271 |
| Interest payable | 110 | - | 110 | - | - | - |
| Total | 30,694 | 76,935 | 107,629 | 24,405 | 86,504 | 110,909 |
Changes in loans over the half-year are shown in the statement of cash flows. In December 2021, Sabaf S.p.A. issued a €30 million bond fully subscribed by PRICOA with a maturity of 10 years, an average life of 8 years and a fixed coupon of 1.85% per year. The loan described has some financial covenants widely complied with at 30 June 2022 and for which, according to the Group's business plan, compliance is also expected in subsequent years.
Some of the outstanding unsecured loans have financial covenants, which at 30 June 2022 had been fully complied with and for which compliance is also expected at 31 December 2022.
To manage interest rate risk, unsecured loans are either fixed-rate or hedged by IRS.
The following table shows the changes in lease liabilities during the first half of 2022:
| Lease liabilities at 31 December 2021 | 4,271 |
|---|---|
| New agreements signed during the first half of 2022 | 310 |
| Repayments during the first half of 2022 | (764) |
| Forex differences | 7 |
| Lease liabilities at 30 June 2022 | 3,824 |
| 30/06/2022 | 31/12/2021 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Payables to C.M.I. shareholders |
500 | - | 1,173 | - |
| Derivative instruments on interest rates |
- | - | 190 | - |
| Currency derivatives | 468 | - | 156 | - |
| Total | 968 | - | 1,519 | - |
The payable to the C.M.I. shareholders of €0.5 thousand due by 2022 is related to the part of the price still to be paid to the sellers, which was deposited on a non-interest-bearing restricted account and will be released in favour of the sellers in accordance with contractual agreements and guarantees issued by the sellers.
Currency derivatives refer to forward sales contracts recognised using hedge accounting.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Post-employment benefit | 3,590 | 3,408 | 182 |
| Total | 3,590 | 3,408 | 182 |
| 31/12/2021 | Provisions | Utilisation | Exchange rate differences |
30/06/2022 | |
|---|---|---|---|---|---|
| Provision for agents' indemnities |
249 | 16 | (5) | - | 260 |
| Product guarantee fund | 60 | - | (11) | - | 49 |
| Provision for legal risks | 416 | 6 | (21) | 7 | 408 |
| Other provisions for risks and charges |
609 | - | (500) | (13) | 96 |
| Total | 1,334 | 22 | (537) | (6) | 813 |
The provision for agents' indemnities covers amounts payable to agents if the Group terminates the agency relationship.
The product guarantee fund covers the risk of returns or charges by customers for products already sold.
Following the process of allocating the price paid for the acquisition of the C.M.I. Group on the net assets acquired (Purchase Price Allocation), completed during 2019, a provision for legal risks with a residual value of €348 thousand was recognised.
Following the settlement of a tax dispute, in the first half of 2022, the provision for risks and charges in which a specific provision of the same amount was recognised, was used in the amount of €500 thousand.
Other provisions for risks and charges, recognised as part of the Purchase Price Allocation following the acquisition of Okida Elektronik, reflect the fair value of the potential liabilities of the acquired entity.
The provisions for risks, which represent the estimate of future payments made based on historical experience, have not been discounted because the effect is considered negligible.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Total | 55,867 | 54,837 | 1,030 |
At 30 June 2022, there were no overdue payables of a significant amount and the Group did not receive any injunctions for overdue payables.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Income tax payables | 622 | 3,450 | (2,828) |
| Withholding taxes | 618 | 954 | (336) |
| Other tax payables | 438 | 547 | (109) |
| Total | 1,678 | 4,951 | (3,273) |
The income tax payables refer to the taxes for the year, for the portion exceeding the advances paid.
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| To employees | 7,352 | 6,706 | 646 |
| To social security institutions | 2,690 | 2,844 | (154) |
| To agents | 336 | 283 | 53 |
| Advances from customers | 1,092 | 1,694 | (602) |
| Other current payables, accrued and deferred | 1,502 | 1,548 | (46) |
| Total | 12,972 | 13,075 | (103) |
At 30 June 2022, payables due to employees included amounts for the thirteenth month's pay and for holidays accrued but not taken.
| 30/06/2022 | 31/12/2021 | Change | ||
|---|---|---|---|---|
| A. | Cash | 12,261 | 43,217 | (30,956) |
| B. | Cash equivalents | 82 | 432 | (350) |
| C. | Other current financial assets | 1,461 | 1,172 | 289 |
| D. | Liquidity (A+B+C) | 13,804 | 44,821 | (31,017) |
| E. | Current financial payable | 10,773 | 5,551 | 5,222 |
| F. | Current portion of non-current financial debt | 20,889 | 20,373 | 516 |
| G. | Current financial debt (E+F) | 31,662 | 25,924 | 5,738 |
| H. | Net current financial debt (G-D) | 17,858 | (18,897) | 36,755 |
| I. | Non-current financial payable | 47,268 | 56,855 | (9,587) |
| J. | Debt instruments | 29,667 | 29,649 | 18 |
| K. | Trade payables and other non-current payables | - | - | - |
| L. | Non-current financial debt (I+J+K) | 76,935 | 86,504 | (9,569) |
| M. | Total financial debt (H+L) | 94,793 | 67,607 | 27,186 |
The consolidated statement of cash flows, which shows the changes in cash and cash equivalents (sum of letters A. and B. of this statement), describes in detail the cash flows that led to the change in the net financial debt. In particular, as can be seen from the Consolidated Statement of Cash Flows, the increase in net financial debt in the period is mainly attributable to:
| 30/06/2022 | 31/12/2021 | Change | |
|---|---|---|---|
| Deferred tax assets | 8,005 | 8,639 | (634) |
| Deferred tax liabilities | (4,579) | (3,939) | (640) |
| Net position | 3,426 | 4,700 | (1,274) |
The table below shows the main elements forming deferred tax assets and liabilities and their changes during the half year:
| Non current tangible and intangible assets |
Provisio ns, value adjustm ents |
Fair value of derivati ve instrum ents |
Good will |
Tax incenti ves |
Tax losses |
Actuarial evaluatio n of post employm ent benefit |
Hyperinfla tion effect Turkey IAS29 |
Other temporary differences |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| 31/12/2021 | (1,912) | 1,278 | 35 | 1,063 | 2,586 | 744 | 192 | 0 | 714 | 4,700 |
| Through profit or loss |
19 | 305 | (258) | (89) | 243 | (527) | - | 2,093 | (53) | 1,733 |
| To shareholders' equity |
- | - | - | - | - | - | - | (2,622) | - | (2,622) |
| Forex differences |
(5) | - | - | - | (312) | (65) | - | - | (3) | (385) |
| 30/06/2022 | (1,898) | 1,583 | (223) | 974 | 2,517 | 152 | 192 | (529) | 658 | 3,426 |
Deferred tax assets relating to goodwill refer to the exemption, in 2011, of the value of goodwill recognised following the acquisition of Faringosi Hinges s.r.l., whose tax benefit is achieved in ten annual instalments starting in 2018.
Deferred tax assets relating to tax incentives are commensurate to investments made in Turkey, for which the Group benefited from reduced taxation recognised on income generated.
In the first half of 2022, revenue from sales and services totalled €145.684 million, up by 5.8% versus €137.665 million in the same period.
For comments on changes in revenues and a detailed analysis of revenues by product family and geographical area, please see the Report on Operations.
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Sale of trimmings and raw materials | 2,142 | 2,486 | (344) |
| Rental income | 60 | 62 | (2) |
| Contingent income | 223 | 226 | (3) |
| Release of risk provisions | 6 | 2 | 4 |
| Other income | 2,232 | 1,709 | 523 |
| Total | 4,663 | 4,485 | 178 |
Other income includes income from the sale of moulds to customers for customised products, various charges to customers and government grants received by Group companies.
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Commodities and outsourced components |
72,616 | 70,895 | 1,721 |
| Consumables | 4,579 | 5,251 | (672) |
| Total | 77,195 | 76,143 | 1,052 |
The purchase volumes being equal, the effective average prices of the main raw materials (aluminium, steel and brass) had a negative effect of approximately €12.5 million, equal to 8.7% of sales, which the Group was able to offset by adjusting sales prices.
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Outsourced processing | 8,616 | 10,354 | (1,738) |
| Natural gas and electricity | 6,122 | 3,321 | 2,801 |
| Maintenance | 3,614 | 4,218 | (604) |
| Advisory services | 1,412 | 1,167 | 245 |
| Transport and export expenses | 2,395 | 2,668 | (273) |
| Travel expenses and allowances | 275 | 84 | 191 |
| Directors' fees | 411 | 398 | 13 |
| Commissions | 570 | 602 | (32) |
| Insurance | 477 | 395 | 82 |
| Waste disposal | 280 | 314 | (34) |
| Canteen | 430 | 400 | 30 |
| Use of temporary agency workers | 301 | 275 | 26 |
| Other costs | 2,744 | 2,321 | 423 |
| Total | 27,647 | 26,517 | 1,130 |
During the first half-year, the Group reduced its subcontracting activities compared to the same period in 2021, when the support of external suppliers had been used extensively to meet peaks in market demand.
The very significant increases in the costs of electricity and methane gas (which the Group uses as an energy source for aluminium die-casting and for the enamelling of burner covers) led to higher charges of €2.8 million. Energy consumption being equal, the higher energy costs led to a 2.5% higher impact on sales, negatively impacting the Group's profitability.
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Salaries and wages | 16,249 | 17,373 | (1,124) |
| Social Security costs | 5,150 | 5,398 | (248) |
| Post-employment benefit | |||
| and supplementary | 1,160 | 932 | 228 |
| pension | |||
| Temporary agency | 3,497 | 3,905 | (408) |
| workers | |||
| Stock grant plan | 789 | 154 | 635 |
| Other costs | 301 | 373 | (72) |
| Total | 27,146 | 28,135 | (989) |
The Group headcount at 30 June 2022 was 1,454 employees compared to 1,502 at 30 June 2021.
The item "Stock Grant Plan" of €789 thousand, included the measurement at 30 June 2022 of the fair value of rights assigned to receive shares of the Parent Company relating to the 2021 – 2023 Stock grant plan. For details of this Plan, refer to Note 37.
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Non-income related taxes and duties |
359 | 347 | 12 |
| Contingent liabilities | 128 | 45 | 83 |
| Provisions for risks | 22 | 0 | 22 |
| Bad debt provision | - | 83 | (83) |
| Other operating costs | 219 | 340 | (121) |
| Total | 728 | 815 | (87) |
Financial income of €1,117 thousand refers for €1,061 thousand to the recognition of the fair value of interest rate derivatives (IRSs hedging rate risks of unsecured loans pending).
| H1 2022 | H1 2021 | Change | ||
|---|---|---|---|---|
| Expenses from hyperinflation |
4,606 | - | 4,606 | |
| Interest paid to banks | 532 | 243 | 289 | |
| Interest paid on leases and | ||||
| rents | 57 | 56 | 1 | |
| Financial expenses on | ||||
| derivative financial | - | 33 | (33) | |
| instruments | ||||
| Banking expenses | 118 | 126 | (8) | |
| Other financial expense | 79 | 70 | 9 | |
| Financial expenses | 786 | 528 | 258 |
As from 2022, the effect of inflation accounting on the Turkish subsidiaries, which impacted some financial statement items and resulted in total expenses of €4,606 thousand, was reflected in the financial statements. For an appropriate and detailed analysis, please refer to the specific paragraph in the Explanatory Notes to these Financial Statements.
In the first half of 2022, the Group reported net foreign exchange gains of €347 thousand (net losses of €1,853 thousand in the same period of 2021).
| H1 2022 | H1 2021 | Change | |
|---|---|---|---|
| Current taxes | 2,795 | 4,945 | (2,150) |
| Deferred tax liabilities | (1,734) | (177) | (1,557) |
| Total | 1,061 | 4,768 | (3,707) |
Income tax is calculated in the same way as taxes are calculated when drafting the annual financial statements.
In the first half of 2022, the impact of taxes as a share of the pre-tax profit (tax-rate) is 18.1%, compared with 21.6% in the first half of 2021.
In these consolidated financial statements, the Group r\ecognised lower taxes for tax benefits related to the "Super-amortisation" and "Hyper-amortisation" related to investments made in Italy of €322 thousand and tax benefits for incentives on investments made in Turkey of €669 thousand.
Basic and diluted EPS are calculated based on the following data:
| H1 2022 | H1 2021 | |
|---|---|---|
| (€/000) | (€/000) | |
| Net profit for the period | 13,008 | 16,749 |
| H1 2022 | H1 2021 | |
|---|---|---|
| Weighted average number of ordinary shares for determining basic earnings per share |
11,232,408 | 11,196,132 |
| Dilutive effect from potential ordinary shares | 0 | 0 |
| Weighted average number of ordinary shares for determining diluted earnings per share |
11,232,408 | 11,196,132 |
| H1 2022 | H1 2021 | |
| Euro | Euro | |
| Basic earnings per share | 1.158 | 1.496 |
| Diluted earnings per share | 1.158 | 1.496 |
The number of shares for measuring the earnings per share was calculated net of the average number of shares in the portfolio.
On 1 June 2022, a dividend of €0.60 per share was paid to shareholders (total dividends of €6,616 thousand), to implement the resolution to allocate the 2021 profit approved by the Sabaf S.p.A. shareholders' meeting on 28 April 2022.
Below is the information by business segment for the first half of 2022 and 2021.
First half of 2022
| Gas parts (household and professional) |
Hinges | Electronic components |
Total | |
|---|---|---|---|---|
| Sales | 90,899 | 41,326 | 13,459 | 145,684 |
| Ebit | 8,055 | 4,772 | 5,218 | 18,045 |
First half of 2021
| Gas parts (household and professional) |
Hinges | Electronic components |
Total | |
|---|---|---|---|---|
| Sales | 97,041 | 29,114 | 11,510 | 137,665 |
| Ebit | 15,848 | 4,310 | 3,802 | 23,960 |
Transactions between Sabaf S.p.A. and its consolidated subsidiaries have been eliminated from the consolidated financial statements and are not addressed in these notes. The table below illustrates the impact of all transactions between the Group and other related parties on the statement of financial position and income statement.
Impact of related party transactions or positions on items in the statement of financial position at 30 June 2022.
| Total financial statement item |
Of which with related parties |
Impact on the total |
|
|---|---|---|---|
| Trade payables | 55,867 | 2 | 0.00% |
Impact of related party transactions or positions on items in the statement of financial position at 30 June 2021.
| Total financial statement item |
Of which with related parties |
Impact on the total |
|---|---|---|
| 56,493 | 2 | 0.00% |
Impact of related party transactions or positions on income statement items at 30 June 2022
| Total | |||
|---|---|---|---|
| financial | Impact | ||
| statement | Of which with | on the | |
| item | related parties | total | |
| Services | 27,647 | 11 | 0.04% |
Impact of related party transactions or positions on income statement items at 30 June 2021
| Total financial statement item |
Of which with related parties |
Impact on the total |
|
|---|---|---|---|
| Services | 26,517 | 9 | 0.03% |
All transactions are regulated by specific contracts regulated at arm's length conditions.
A plan for the free allocation of shares, approved by the Shareholders' Meeting of 6 May 2021, is in place; the related Regulations were approved by the Board of Directors on 13 May 2021.
The Plan aims to promote and pursue the involvement of the beneficiaries whose activities are considered relevant for the implementation of the contents and the achievement of the objectives set out in the Business Plan, foster loyalty development and motivation of managers, by increasing their entrepreneurial approach as well as align the interests of management with those of the Company's shareholders more closely, with a view to encouraging the achievement of significant results in the economic and asset growth and sustainability of the Company and of the Group.
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 260,000 Options, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share. The free allocation of Sabaf S.p.A. shares is conditional on the achievement, in whole or in part, with progressiveness, of the business targets related to the ROI and EBITDA and social and environmental targets.
The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the 2021 - 2023 Business Plan. A total of 226,000 Rights were allocated to the Beneficiaries already identified.
The 2021 - 2023 Plan expires on 31 December 2024.
In connection with this Plan, €789 (Note 27) were recognised in personnel costs during this half-year, an equity reserve of the same amount (Note 13) was recognised as a balancing entry.
In line with the date on which the beneficiaries became aware of the assignment of the rights and terms of the plan, the grant date was set at 13 May 2021.
The main assumptions made at the beginning of the vesting period and the methods for determining the fair value at the end of the reporting period are illustrated below. The following economic and financial parameters were taken into account in determining the fair value per share at the start of the vesting period:
| Share price on grant date adjusted for dividends | 23.09 |
|---|---|
| Dividend yield | 2.60% |
| Expected volatility per year | 28% |
| Interest rate per year | -0.40% |
Based on the exercise right at the different dates established by the Plan Regulations and on the estimate of the expected probability of achieving the objectives for each reference period, the unitary fair value at 30 June 2022 was determined as follows:
| Rights relating to objectives measured on ROI |
Total value on ROI | 18.54 | Fair Value | 6.49 |
|---|---|---|---|---|
| Rights on ROI | 35% |
| Rights relating to objectives measured on EBITDA |
Total value on EBITDA | 18.80 | Fair Value | 7.52 |
|---|---|---|---|---|
| Rights on EBITDA | 40% |
| Rights relating to ESG objectives | Total value on "Personnel training" |
20.41 | ||
|---|---|---|---|---|
| measured on personnel training | Rights on "Personnel training" | 5% | Fair Value | 1.02 |
| Rights relating to ESG objectives | Total value on "Safety indicator" |
7.82 | ||
|---|---|---|---|---|
| measured on safety indicator | Rights on "Safety indicator" | 5% | Fair Value | 0.39 |
| Rights relating to ESG objectives measured on reduction of emissions |
Total value on "Reduction of Emissions" |
20.41 | ||
|---|---|---|---|---|
| Rights on "Reduction of Emissions" |
15% | Fair Value | 3.06 |
| Fair Value per share | 18.48 |
|---|---|
Pursuant to Consob communication of 28 July 2006, the Group declares that no significant nonrecurring transactions as defined by the Consob communication itself were carried out during the first half of 2022.
Pursuant to Consob communication of 28 July 2006, the Group declares that no atypical and/or unusual transactions as defined by the Consob communication itself were carried out during the first half of 2022.
The Sabaf Group issued sureties to guarantee consumer and mortgage loans granted by BPER (ex Ubi Banca) to Group employees for a total of €3,235 thousand (€3,443 thousand at 31 December 2021).
| Company name | Registered offices | Share capital | Participating company |
ownership % |
|---|---|---|---|---|
| Parent company | ||||
| Sabaf S.p.A. | Ospitaletto (BS) Via dei Carpini, 1 |
€ 11,533,450 | ||
| Subsidiary companies | ||||
| Faringosi-Hinges s.r.l. | Ospitaletto (BS) Via Martiri della Libertà, 66 |
EUR 90,000 | Sabaf S.p.A. | 100% |
| Sabaf do Brasil Ltda. | Jundiaí - São Paulo (Brazil) | BRL 53,348,061 | Sabaf S.p.A. | 100% |
| Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey) |
Manisa (Turkey) | TRY 160,000,000 | Sabaf S.p.A. | 100% |
| Okida Elektronik Sanayi Ve Ticaret A.S. |
Istanbul (Turkey) | TRY 5,000,000 | Sabaf S.p.A. Sabaf Turkey |
30% 70% |
| Sabaf Appliance Components (Kunshan) Co., Ltd. |
Kunshan (China) | EUR 9,900,000 | Sabaf S.p.A. | 100% |
| Sabaf US Corp. | Plainfield (USA) | USD 200,000 | Sabaf S.p.A. | 100% |
| Sabaf India Private Limited | Bangalore (India) | INR 153,833,140 | Sabaf S.p.A. | 100% |
| A.R.C. s.r.l. | Campodarsego (PD) | EUR 45,000 | Sabaf S.p.A. | 100% |
| Sabaf Mexico Appliance Components |
San Louis Potosì (Mexico) | MXN 106,772,225 |
Sabaf S.p.A. | 100% |
| C.M.I. Cerniere Meccaniche Industriali s.r.l. |
Valsamoggia (BO) | €1,000,000 | Sabaf S.p.A. | 100% |
| C.G.D. s.r.l. | Valsamoggia (BO) | EUR 26,000 | C.M.I. s.r.l. | 100% |
Gianluca Beschi, the Financial Reporting Officer of Sabaf S.p.A., has taken into account the requirements of Art. 154-bis, paragraphs 3 and 4, of Legislative Decree 58 of 24 February 1998 and can certify
of the administrative and accounting procedures to draft the half-yearly condensed consolidated financial statements in the first half of 2022.
They also certify that:
Ospitaletto, 4 August 2022
Chief Executive Officer Pietro Iotti
The Financial Reporting Officer Gianluca Beschi
Half-yearly condensed consolidated financial statements as of 30 June 2022
Review report on the half-yearly condensed consolidated financial statements
(Translation from the original Italian text)
EY S.p.A. Via Rodolfo Vantini, 38 25126 Brescia
Tel: +39 030 2896111 | +39 030 226326 ey.com
To the Shareholders of Sabaf S.p.A.
We have reviewed the half-yearly condensed consolidated financial statements, comprising the consolidated statement of financial position, the consolidated income statement, the consolidated statement of comprehensive income, the statement of changes in consolidated shareholders' equity, the consolidated statement of cash flows and the related explanatory notes of Sabaf S.p.A. and its subsidiaries (the "Sabaf Group") as of 30 June 2022. The Directors of Sabaf S.p.A. are responsible for the preparation of the half-yearly condensed consolidated financial statements in conformity with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on these half-yearly condensed consolidated financial statements based on our review.
We conducted our review in accordance with review standards recommended by Consob (the Italian Stock Exchange Regulatory Agency) in its Resolution no. 10867 of 31 July 1997. A review of interim condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an 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 half-yearly condensed consolidated financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the half-yearly condensed consolidated financial statements of Sabaf Group as of 30 June 2022 are not prepared, in all material respects, in conformity with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34) as adopted by the European Union.
Brescia, 5 August 2022
EY S.p.A. Signed by: Marco Malaguti, Auditor
This report has been translated into the English language solely for the convenience of international readers
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