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Emak

Quarterly Report May 13, 2022

4407_ir_2022-05-13_5cbcfaa0-9ef7-4cd5-936f-2a322e78e756.pdf

Quarterly Report

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Interim report at 31.03.2022

Organizational chart of Emak Group 3
Corporate Bodies of Emak S.p.A4
Main economic and financial figures for Emak Group 5
Directors' report6
Comments on economic figures 6
Comment to consolidated statement of financial position 8
Highlights of the consolidated financial statement broken down by operating segment for the first quarter 2022 11
Comments on interim results by operating segment 11
Business outlook12
Subsequent events 13
Other informations 13
Definitions of alternative performance indicators14
Consolidated Income Statement15
Statement of consolidated financial position16
Statement of changes in consolidated equity for the Emak Group at 31.12.2021 and at 31.03.2022 17
Comments on the financial statements18
Declaration of the executive in charge of preparing the accounting statements pursuant to the rules of Article 154-
bis, paragraph 2 of Legislative Decree no. 58/1998 19

Organizational chart of Emak Group

    1. Valley Industries LLP is consolidated at 100% as a result of the "Put and Call Option Agreement" that governs the purchase of the remaining 10%.
    1. Comet do Brasil Investimentos Ltda is owned for 99.63% by Comet S.p.A. and 0.37% by P.T.C. S.r.l.
    1. Emak do Brasil is owned for 99.98% by Emak S.p.A. and 0.02% by Comet do Brasil.
    1. Lavorwash Brasil Ind. Ltda is owned for 99.99% by Lavorwash S.p.A. and 0.01% by Comet do Brasil LTDA.
    1. S.I.Agro Mexico is owned for 97% by Comet S.p.A. and 3% by P.T.C. S.r.l.
    1. Markusson Professional Grinders AB is consolidated at 100% as a result of the "Put and Call Option Agreement" that governs the purchase of the remaining 49%.
    1. Agres Sistemas Eletrônicos S.A. is consolidated at 100% as a result of the "Put and Call Option Agreement" that governs the purchase of the remaining 9%.
    1. Poli S.r.l. is consolidated at 100% as a result of the "Put and Call Option Agreement" that governs the purchase of the remaining 20%.
    1. The companies Emak Deutschland Gmbh and Speed Industrie Sarl have ceased their operational activities.

The Ordinary General Meeting of the Shareholders of the Parent Company, Emak S.p.A. on 29 April 2022 appointed the Board of Directors and the Board of Statutory Auditors for the financial years 2022-2024.

Board of Directors
Non-executive Chairman Massimo Livatino
Deputy Chairman and Chief Executive Officer Luigi Bartoli
Executive Director Cristian Becchi
Independent Directors Silvia Grappi
Elena Iotti
Alessandra Lanza
Directors Francesca Baldi
Ariello Bartoli
Paola Becchi
Giuliano Ferrari
Marzia Salsapariglia
Vilmo Spaggiari
Paolo Zambelli
Secretary of the Board of Directors Paolo Messarra
Risk Control and Sustainability Committee; Remuneration
Committee,
Related
Party
Transactions
Committee,
Nomination Committee
Chairman Elena Iotti
Components Alessandra Lanza
Silvia Grappi
Financial Reporting Officer Roberto Bertuzzi
Supervisory Body as per Legislative Decree 231/01
Chairman Sara Mandelli
Acting member Marianna Grazioli
Board of Statutory Auditors
Chairman Stefano Montanari
Acting auditors Roberta Labanti
Livio Pasquetti
Alternate auditor Rossana Rinaldi
Giovanni Liberatore
Independent Auditor Deloitte & Touche S.p.A.

Income statement (€/000)

Year 2021 1Q 2022 1Q 2021
588,299 Revenues from sales 190,247 162,881
77,436 EBITDA before non ordinary income/expenses
(*)
27,339 26,375
77,296 (*)
EBITDA
27,339 26,917
52,904 EBIT 21,067 21,169
33,111 Net profit 16,852 15,280

Investment and free cash flow (€/000)

Year 2021 1Q 2022 1Q 2021
13,338 Investment in property, plant and equipment 3,016 3,072
4,223 Investment in intangible assets 836 920
57,503 Free cash flow from operations
(*)
23,124 21,028

Statement of financial position (€/000)

31.12.2021 31.03.2022 31.03.2021
400,202 Net capital employed (*) 472,463 388,233
(144,269) Net debt (*) (192,890) (148,397)
255,933 Total equity 279,573 239,836

Other statistics

Year 2021 1Q 2022 1Q 2021
13.1% EBITDA / Net sales (%) 14.4% 16.5%
9.0% EBIT / Net sales (%) 11.1% 13.0%
5.6% Net profit / Net sales (%) 8.9% 9.4%
13.2% EBIT / Net capital employed (%) 4.5% 5.5%
0.56 Net debt / Equity 0.69 0.62
2,225 Number of employees at period end 2,275 2,171

Share information

Year 2021 1Q 2022 1Q 2021
0.199 Earnings per share (€) 0.102 0.093
2.12 Official price (€) 1.41 1.32
2.28 Maximum share price in period (€) 2.13 1.35
1.08 Minimum share price in period (€) 1.41 1.08
348 Stockmarket capitalization (€ / million) 231 216
163,934,835 Number of shares comprising share capital 163,934,835 163,934,835
163,537,602 Average number of oustanding shares 163,537,602 163,537,602

(*) See section "Definitions of alternative performance indicators"

Directors' report

Information about Russia-Ukraine conflict

The military aggression of the Ukrainian territory by the Russian army starting in February is creating repercussions at an international level, both in terms of financial market trends and commodity prices.

As for Ukraine, the Group operates on this market mainly through the commercial branch, 100% controlled by Emak S.p.A. This company has a staff of 24 people and in 2021 recorded a turnover of € 4.2 million with a profit for the year of approximately € 500 thousand.

The value of the investment recorded by the parent company Emak S.p.A. in the company Epicenter, located in Kiev, is equal to approximately € 1.7 million, to date no goodwill on this CGU is recorded in the consolidated financial statements of the Group. The subsidiary has total assets of a equivalent € 3.3 million at March 31, 2022.

The subsidiary operating in Ukraine, since the beginning of the war, has adopted measures aimed at securing its employees and the goods in stock, while ensuring business continuity and recording a turnover in the first three months of 2022 of approximately € 870 thousand, higher than the € 650 thousand recorded at March 31, 2021.

On an annual basis, in 2021, the Group's sales were equal to € 5.2 million on the Ukrainian market and € 11.1 million on the Russian and Belarusian market.

Consolidated revenues for the 2022 quarter on the Ukrainian market amounted to € 1.3 million, compared to € 1 million in the same period of the previous year.

The Group's turnover in the first quarter of 2022 on the Russian and Belarusian markets amounted to € 2.1 million (compared to € 3.3 million in the same period of last year) and the exposure to customers on these markets amounts to approximately € 1.7 million at the end of March 2022; the related commercial risk is partially covered by an insurance policy.

There are no particular critical issues related to the conflict in relation to the procurement of raw materials. The geopolitical context of reference remains today characterized by significant uncertainties, therefore the situation is continuously monitored by the company management which maintains a strong supervision in particular on the exposure of the affected markets, on the supply chain and on financial flows.

Scope of consolidation

Compared to 31 December 2021 there are no changes in the area; with reference to 31 March 2021 the company Poli S.r.l. joined the consolidation area.

Comments on economic figures

Revenues from sales

Emak Group achieved a consolidated turnover of € 190,247 thousand in the first quarter of 2022, compared to € 162,881 thousand of the same period last year, a 16.8% increase. This increase is due to the organic growth for 14.5%, from the effect of translation changes for 1.6% and from change in the scope of consolidation for 0.7%.

The growth trend already recorded in recent years is confirmed in all segments in which the Group operates, mainly concentrated in the Europe area.

EBITDA

EBITDA for the first quarter 2022 amounts to € 27,339 thousand (14.4% of sales), compared to € 26,917 thousand (16.5% of sales) for the corresponding quarter of the previous year.

Ebitda before non-ordinary expenses and revenues is unchanged and amounts to € 27,339 thousand in the first quarter 2022 (14.4% of revenues) compared to € 26,375 thousand in the first quarter 2021 (16.2% of revenues) including non-ordinary revenues for € 608 thousand and non-ordinary expenses for € 66 thousand.

The application of the IFRS 16 principle has resulted in a positive effect on the EBITDA for € 1,772 thousand, against to € 1,598 thousand in the first quarter of 2021.

EBITDA for the quarter benefited from the increase in sales volumes and the change in the consolidation area while it was penalized by the increase in the costs of raw materials, energy costs, transports and other operating costs functional to the development of the business, partially offset by the increase in the price lists.

Personnel costs increased compared to the same period by € 2,344 thousand, mainly due to the greater use of workforce to cope with higher production volumes, and the change in the scope of consolidation. The average number of resources employed by the Group, also considering temporary workers employed in the period, was 2,573 units, compared to 2,424 units in the first quarter of 2021.

Operating result

Operating result for the first quarter 2022 is € 21,067 thousand with an incidence of 11.1% of revenues, compared to € 21,169 thousand (13% of sales) for the corresponding quarter of the previous year.

Depreciation and amortization are € 6,272 thousand, compared to € 5,748 thousand in the same period last year.

Non-annualized operating result as a percentage of net capital employed is 4.5% compared to 5.5% in the same period last year.

Net result

Net result for the first quarter 2022 is € 16,852 thousand, against € 15,280 thousand in the same period 2021.

Not realized income on valuation of derivatives for hedging interest rate risk has led a significant increase of "financial income" item.

Currency management in the first quarter 2022 is positive for € 2,108 thousand against a positive balance of € 375 thousand for the same period of the last year. The result mainly benefited from the revaluation of the Brazilian Reais which had a positive effect on the valuation of some debt items.

The tax rate for the first quarter of 2022 stands at 26.7%, an increase compared to the 24.9% of the same period of 2021, mainly due to a different geographical breakdown of taxable income.

31.12.2021 Thousand of Euro 31.03.2022 31.03.2021
202,117 Net non-current assets (*) 205,121 183,804
198,085 Net working capital (*) 267,342 204,429
400,202 Total net capital employed (*) 472,463 388,233
253,183 Equity attributable to the Group 276,346 237,520
2,750 Equity attributable to non controlling interests 3,227 2,316
(144,269) Net debt (*) (192,890) (148,397)

(*) See section "Definitions of alternative performance indicators"

Net non current assets

During first quarter 2022 Emak Group invested € 3,852 thousand in property, plant and equipment and intangible assets, as follows:

  • € 1,077 thousand for innovation, improvement and technological adaptation of products;
  • € 1,470 thousand for adjustment of production capacity and for process innovation;
  • € 436 thousand for upgrading the computer network system;
  • € 532 thousand for modernization of industrial buildings;
  • € 337 thousand for other investments in operating activities.

Investments broken down by geographical area are as follows:

  • € 2,430 thousand in Italy;
  • € 502 thousand in Europe;
  • € 569 thousand in the Americas;
  • € 351 thousand in Asia, Africa and Oceania.

Net working capital

Net working capital, compared to 31 December 2021, increases by € 69,257 thousand, from € 198,085 thousand to € 267,342 thousand.

The following table shows the change in net working capital at 31 March 2022 compared with the same period last year:

€/000 3M 2022 3M 2021
Opening Net working capital 198,085 165,655
Increase/(decrease) in inventories 13,229 (243)
Increase/(decrease) in trade receivables 63,025 51,561
(Increase)/decrease in trade payables (3,064) (4,132)
Other changes (3,933) (8,412)
Closing Net working capital 267,342 204,429

The trend in net working capital as of March 31, 2022 is consistent with the seasonality of the business and the active management of inventories by the Group.

The significant increase in inventories was necessary to counteract the criticalities in the supply chain and the consequent increase in delivery times. Trade receivables are increasing following the growth in turnover.

Net financial position

Net negative financial position amounts to € 192,890 thousand at 31 March 2022 compared to € 144,269 thousand at 31 December 2021.

Below are the movements in net debt for the first three months of 2022 compared with the same period last year:

€/000 3M 2022 3M 2021
Opening NFP (144,269) (126,552)
Ebitda 27,339 26,917
Financial income and expenses (199) (1,199)
Exchange gains and losses 2,108 375
Income taxes (6,124) (5,065)
Cash flow from operations, excluding changes in operating
assets and liabilities
23,124 21,028
Changes in operating assets and liabilities (63,696) (38,889)
Cash flow from operations (40,572) (17,861)
Changes in investments and disinvestments (3,607) (3,860)
Changes rights of use IFRS 16 (1,069) (1,363)
Other equity changes - -
Changes from exchange rates and translation reserve (3,373) 1,239
Closing NFP (192,890) (148,397)

Cash flow from operations net of taxes amounted to € 23,124 thousand, compared to € 21,028 thousand for the same period in 2021.

Cash flow from operations is negative for € 40,572 thousand compared to € 17,861 thousand in the same period of the previous year, consequently to a significant increase in net working capital.

Details of the net financial position is analyzed as follows:

31.03.2022 31.12.2021 31.03.2021
46,157 79,645 81,555
- - -
1,595 358 1,666
47,752 80,003 83,221
(33,684) (19,938) (25,229)
(56,865) (56,213) (60,112)
(90,549) (76,151) (85,341)
(42,797) 3,852 (2,120)
(151,117) (149,105) (147,126)
- - -
- - -
(151,117) (149,105) (147,126)
(193,914) (145,253) (149,246)
1,024 984 849
(192,890) (144,269) (148,397)
39,112 38,974 28,935
(153,778) (105,295) (119,462)

Net financial position at 31 March 2022 includes actualized financial liabilities related to the payment of future rental and rent payments, in application of IFRS 16 standard, equal to overall € 39,112 thousand, of which € 6,078 thousand falling due within 12 months while at 31 December 2021 they amounted to a total of € 38,974 thousand, of which € 5,863 thousand falling due within 12 months.

Current financial indebtedness mainly consist of:

  • account payables and self-liquidating accounts;
  • loan repayments falling due by 31 March 2023;
  • amounts due to other providers of finance falling due by 31 March 2023;
  • debt for equity investments in the amount of € 2,634 thousand.

Financial liabilities for the purchase of the remaining minority shares and for the settlement of purchase transactions with deferred price subject to contractual restrictions are equal to € 11,401 thousand, of which € 8,767 thousand in the medium to long term, related to the following companies:

  • Agres for € 3,893 thousand;
  • Markusson for € 3,278 thousand;
  • Valley LLP for € 2,234 thousand;
  • Poli S.r.l. for € 1,996 thousand.

Equity

Total equity is equal to € 279,573 thousand against € 255,933 thousand at 31 December 2021. Earnings per share at 31 March 2022 is equal to € 0.102 compared to € 0.093 in the same period of the previous year.

On 31 December 2021 the company held 397,233 treasury shares in portfolio number (equal to 0.2% of share capital) for the equivalent of € 2,029 thousand.

From 1 January 2022 to 31 March 2022 Emak S.p.A. did not buy or sell treasury shares, for which the quantity in stock and value are unchanged from December 31, 2021.

Highlights of the consolidated financial statement broken down by operating segment for the first quarter 2022

OUTDOOR POWER
EQUIPMENT
PUMPS AND HIGH
COMPONENTS AND
PRESSURE WATER
ACCESSORIES
JETTING
Other not allocated /
Netting
Consolidated
€/000 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021
Sales to third parties 74,857 57,118 70,073 63,172 45,317 42,591 190,247 162,881
Intersegment sales 93 77 901 669 3,351 2,916 (4,345) (3,662)
Revenues from sales 74,950 57,195 70,974 63,841 48,668 45,507 (4,345) (3,662) 190,247 162,881
Ebitda 6,967 6,024 11,440 11,477 9,702 10,304 (770) (888) 27,339 26,917
Ebitda/Total Revenues % 9.3% 10.5% 16.1% 18.0% 19.9% 22.6% 14.4% 16.5%
Ebitda before non ordinary expenses 6,967 6,024 11,440 10,869 9,702 10,370 (770) (888) 27,339 26,375
Ebitda before non ordinary expenses/Total Revenues % 9.3% 10.5% 16.1% 17.0% 19.9% 22.8% 14.4% 16.2%
Operating result 4,892 4,015 9,390 9,639 7,555 8,403 (770) (888) 21,067 21,169
Operating result/Total Revenues % 6.5% 7.0% 13.2% 15.1% 15.5% 18.5% 11.1% 13.0%
Net financial expenses (1) 1,909 (824)
Profit befor taxes 22,976 20,345
Income taxes (6,124) (5,065)
Net profit 16,852 15,280
Net profit/Total Revenues% 8.9% 9.4%
(1) Net financial expenses includes the amount of Financial income and expenses, Exchange gains and losses and the amount of the Income from equity investment
STATEMENT OF FINANCIAL POSITION 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021
Net debt 39,040 6,778 105,114 96,092 48,845 41,399 (109) 0 192,890 144,269
Shareholders' Equity 191,104 186,501 94,540 83,830 71,926 63,454 (77,997) (77,852) 279,573 255,933
Total Shareholders' Equity and Net debt 230,144 193,279 199,654 179,922 120,771 104,853 (78,106) (77,852) 472,463 400,202
Net non-current assets (2) 127,924 128,424 97,335 95,854 55,213 53,233 (75,351) (75,394) 205,121 202,117
Net working capital 102,220 64,855 102,319 84,068 65,558 51,620 (2,755) (2,458) 267,342 198,085
Total net capital employed 230,144 193,279 199,654 179,922 120,771 104,853 (78,106) (77,852) 472,463 400,202
(2) The net non-current assets of the Outdoor Power Equipment area includes the amount of Equity investments for 76,074 thousand Euro
OTHER STATISTICS 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021 31.03.2022 31.12.2021
Number of employees at period end 750 758 867 837 649 622 9 8 2,275 2,225
OTHER INFORMATIONS 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021 31.03.2022 31.03.2021
Amortization, depreciation and impairment losses 2,075 2,009 2,050 1,838 2,147 1,901 6,272 5,748
Investment in property, plant and equipment and in
intangible assets
980 1,171 931 824 1,941 1,997 3,852 3,992

(*) See section "Definitions of alternative performance indicators"

Comments on interim results by operating segment

The table below shows the breakdown of "sales to third parties" in the first three months in 2022 by business sector and geographic area, compared with the same period last year.

OUTDOOR POWER EQUIPMENT PUMPS AND
HIGH PRESSURE WATER JETTING
COMPONENTS AND
ACCESSORIES
CONSOLIDATED
€/000 1Q 2022 1Q 2021 Var. % 1Q 2022 1Q 2021 Var. % 1Q 2022 1Q 2021 Var. % 1Q 2022 1Q 2021 Var. %
Europe 65,074 50,077 29.9% 38,039 34,007 11.9% 25,740 23,859 7.9% 128,853 107,943 19.4%
Americas 2,548 2,388 6.7% 23,256 21,007 10.7% 13,601 13,100 3.8% 39,405 36,495 8.0%
Asia, Africa and Oceania 7,235 4,653 55.5% 8,778 8,158 7.6% 5,976 5,632 6.1% 21,989 18,443 19.2%
Total 74,857 57,118 31.1% 70,073 63,172 10.9% 45,317 42,591 6.4% 190,247 162,881 16.8%

Outdoor Power Equipment

Revenues of the segment are up by 31.1% compared to the same period.

There was a generalized increase in turnover in Europe, with particular reference to the Italian, French and Polish markets, while sales on the Russian market were down.

In the Americas area, sales grew slightly with reference to the North American market, while in the main markets of South America they were substantially in line with the same period.

Sales growth in Asia, Africa and Oceania was concentrated in Turkey, the Far East and China.

EBITDA, equal to € 6,967 thousand, increased compared to March 31, 2021, due to the increase in sales volumes, while the commercial policies of price rise have partially offset the increase in transport costs, raw materials and other operating costs.

Net negative financial position of € 39,040 thousand, consistent with the seasonality of the business, increasing compared to 31 December 2021, mainly due to the increase in net working capital due to the strong growth in revenues in the quarter.

Pompe e High Pressure Water Jetting

Sales of the segment are up 10.9% compared to the same period of 2021.

In Europe, growth was driven by the Italian and French markets, together with the contribution of the change in the scope of consolidation. Sales through the online channel were down slightly.

In the Americas area, the good sales performance is attributable to the good performance of the North American market and the Mexican subsidiary, thanks also to the positive exchange rate effect.

Turnover in Asia, Africa and Oceania recorded a more contained increase, while sales were good in Turkey and South Korea.

EBITDA for the first quarter of 2022, equal to € 11,440 thousand, compared to € 11,477 thousand in the same period of the previous year (€ 10,869 thousand net of non-recurring income), benefited from the increase in turnover and area variation, while it was affected by increases in the price of raw materials and transport, partially covered by increases in price lists.

Net negative financial position, equal to € 105,114 thousand, is up compared to 31 December 2021, in line with the seasonality of the business and the growth in turnover for the period which led to an increase in trade receivables and inventories.

Components and Accessories

Sales of the segment are up 6.4% compared to the same period of 2021.

The growth in Europe is attributable to higher sales in the agriculture and cleaning divisions.

The increase in sales in the Americas area is due to the good performance of revenues in South America which offset the slight decline in the North American market.

The slight growth in Asia, Africa and Oceania is attributable to higher sales in Asia and Australia, as well as to the good performance of the South African subsidiary.

EBITDA in the first quarter of 2022, equal to € 9,702 thousand compared to € 10,304 thousand in the same period of the previous year, benefited from the increase in sales volumes, while it was negatively affected by an unfavorable mix and the increase the cost of raw materials, electricity and gas.

Net negative financial position, equal to € 48,845 thousand, increasing compared to the end of the 2021 financial year, is due to the increase in net working capital during the quarter linked to the growth of trade receivables and inventories, the latter to meet the good market demand.

Business outlook

The first quarter ended with a significantly higher turnover than last year's record quarter.

The external scenario, however, remains characterized by uncertainties related to the evolution of the pandemic and the consequences of the effects of the Russian-Ukrainian conflict, as well as by the growth trend in the costs of raw materials, energy and transport and by tensions on the supply chain.

In this context, in order to safeguard its profitability, the Group has progressively adjusted sales lists starting from last year. This activity also continues in 2022 to cope with the tightening of supply conditions.

In continuity with the past months, the Group considers the maintenance, even in objectively difficult conditions, of a high level of service to its customers to be a critical success factor. To this end, together with its partners, it actively manages stocks with the aim of minimizing the risks of product shortage.

Despite the criticalities of the period that determine a reduced visibility on demand for the next few months, the management is confident that, thanks to the order portfolio already acquired, the turnover of the first half will record a positive growth trend compared to the first six months of 2021, thus remaining at record levels compared to the historical results.

Subsequent events

No significant events occurred after the end of the period of this report.

Other informations

Significant operations: derogation from disclosure obligations

The Company has resolved to make use, with effect from 31 January 2013, of the right to derogate from the obligation to publish the informative documents prescribed in the event of significant merger, demerger, share capital increase through the transfer of goods in kind, acquisition and disposal operations, pursuant to art. 70, paragraph 8, and art. 71, paragraph 1-bis of Consob Issuers Regulations, approved with resolution no. 11971 of 14/5/1999 and subsequent modifications and integrations.

Definitions of alternative performance indicators

The chart below shows, in accordance with recommendation ESMA/201/1415 published on October 5, 2015, the criteria used for the construction of key performance indicators that management considers necessary to the monitoring the Group performance.

  • EBITDA before non-ordinary expenses and revenues: is obtained by deducting at EBITDA the impact of charges and income for litigation and grants, expenses related to M&A transaction, and costs for staff reorganization and restructuring.
  • EBITDA: calculated by adding the items "Operating Result" plus "Amortization, depreciation and impairment losses".
  • FREE CASH FLOW FROM OPERATIONS: calculated by adding the items "Net profit" plus "Amortization, depreciation and impairment losses".
  • NET WORKING CAPITAL: include items "Trade receivables", "Inventories", current non financial "other receivables" net of "Trade payables" and current non financial "other payables.
  • NET FIXED ASSETS or NET NON-CURRENT ASSETS: include non-financial "Non current assets" net of nonfinancial "Non-current liabilities".
  • NET CAPITAL EMPLOYED: is obtained by adding the "Net working capital" and "Net non-current assets".
  • NET FINANCIAL POSITION: It is obtained by adding the active financial balances and subtracting the passive financial balances, as well as identified according to the criteria of the Esma (according to Consob communication no. 5/21 of 29 April 2021).

It should be noted that alternative performance indicators are not identified as an accounting measure under the International Accounting Standards and, therefore, should not be considered a substitute measure for the evaluation of the performance of the Company and the Group. The criterion for determining these indicators applied by the Company and the Group may not be homogeneous with that adopted by other companies in the sector and, therefore, such data may not be comparable.

Consolidated financial statements

Consolidated Income Statement

Thousand of Euro

FY 2021 CONSOLIDATED INCOME STATEMENT 1 Q 2022 1 Q 2021
Revenues from sales
588,299
5,110
190,247
713
162,881
1,381
Other operating incomes
48,764 Change in inventories 9,094 (1,272)
(354,737) Raw materials, consumable and goods (113,573) (85,406)
(98,231) Personnel expenses (26,601) (24,257)
(111,909) Other operating costs and provisions (32,541) (26,410)
(24,392) Amortization, depreciation and impairment losses (6,272) (5,748)
52,904 Operating result 21,067 21,169
1,003 Financial income 893 67
(8,611) Financial expenses (1,092) (1,266)
589 Exchange gains and losses 2,108 375
45,885 Profit befor taxes 22,976 20,345
(12,774) Income taxes (6,124) (5,065)
33,111 Net profit (A) 16,852 15,280
(603) (Profit)/loss attributable to non controlling interests (241) (138)
32,508 Net profit attributable to the Group 16,611 15,142
0.199 Basic earnings per share 0.102 0.093
0.199 Diluted earnings per share 0.102 0.093
FY 2021 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE
INCOME
1 Q 2022 1 Q 2021
33,111 Net profit (A) 16,852 15,280
8,102 Profits/(losses) deriving from the conversion of foreign company
accounts
6,788 2,256
(232) Actuarial profits/(losses) deriving from defined benefit plans (*) - -
65 Income taxes on OCI (*) - -
7,935 Total other components to be included in the comprehensive
income statement (B)
6,788 2,256
41,046 Total comprehensive income for the perdiod (A)+(B) 23,640 17,536
(641)
40,405
Comprehensive net profit attributable to non controlling interests
Comprehensive net profit attributable to the Group
(477)
23,163
(153)
17,383

(*) Items will not be classified in the income statement

Statement of consolidated financial position

Thousand of Euro

31.12.2021 ASSETS 31.03.2022 31.03.2021
Non-current assets
78,558 Property, plant and equipment 79,201 77,183
24,853 Intangible assets 24,854 22,591
37,665 Rights of use 37,677 27,867
70,634 Goodwill 73,652 67,208
8 Equity investments in other companies 8 8
10,012 Deferred tax assets 9,662 8,970
984 Other financial assets 1,024 849
59 Other assets 60 58
222,773 Total non-current assets 226,138 204,734
Current assets
217,316 Inventories 230,545 163,359
127,984 Trade and other receivables 193,243 162,824
10,076 Current tax receivables 10,047 6,107
72 Other financial assets 332 619
286 Derivative financial instruments 1,263 1,047
79,645 Cash and cash equivalents 46,157 81,555
435,379 Total current assets 481,587 415,511
658,152 TOTAL ASSETS 707,725 620,245
31.12.2021 SHAREHOLDERS' EQUITY AND LIABILITIES 31.03.2022 31.03.2021
Shareholders' Equity
253,183 Shareholders' Equity of the Group 276,346 237,520
2,750 Non-controlling interests 3,227 2,316
255,933 Total Shareholders' Equity 279,573 239,836
Non-current liabilities
115,994 Loans and borrowings due to banks and other lenders 118,083 123,087
33,111 Liabilities for leasing 33,034 24,039
7,386 Deferred tax liabilities 7,774 6,537
7,500 Employee benefits 7,428 7,604
2,590 Provisions for risks and charges 2,655 2,422
2,197 Other non-current liabilities 2,135 3,517
168,778 Total non-current liabilities 171,109 167,206
Current liabilities
149,222 Trade and other payables 152,742 117,342
6,182 Current tax liabilities 12,130 9,279
69,707 Loans and borrowings due to banks and other lenders 83,992 79,539
5,863 Liabilities for leasing 6,078 4,896
581 Derivative financial instruments 479 906
1,886 Provisions for risks and charges 1,622 1,241
233,441 Total current liabilities 257,043 213,203
658,152 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 707,725 620,245

Statement of changes in consolidated equity for the Emak Group at 31.12.2021 and at 31.03.2022

SHARE
CAPITAL
SHARE
PREMIUM
Treasury
Shares
OTHER RESERVES RETAINED EARNINGS EQUITY
Thousand of Euro Legal
reserve
Revaluation
reserve
Cumulative
translation
adjustment
Reserve
IAS 19
Other
reserves
Retained
earnings
Net profit
of the
period
TOTAL
GROUP
ATTRIBUTABLE
TO NON
CONTROLLING
INTERESTS
TOTAL
Balance at 31.12.2020 42,623 41,513 (2,029) 3,611 4,353 (7,889) (1,320) 31,702 88,273 19,300 220,137 2,163 222,300
Profit reclassification 139 183 11,619 (19,300) (7,359) (54) (7,413)
Other changes - -
Net profit for the period 8,064 (167) 32,508 40,405 641 41,046
Balance at 31.12.2021 42,623 41,513 (2,029) 3,750 4,353 175 (1,487) 31,885 99,892 32,508 253,183 2,750 255,933
Profit reclassification 32,508 (32,508) - -
Other changes - -
Net profit for the period 6,552 16,611 23,163 477 23,640
Balance at 31.03.2022 42,623 41,513 (2,029) 3,750 4,353 6,727 (1,487) 31,885 132,400 16,611 276,346 3,227 279,573

Comments on the financial statements

The interim report has been prepared under disclosure continuity, comparability, international best practice and transparency to the market. Despite the lack of legal obligation, the Board of Directors of Emak S.p.A. has in fact decided, also because of his membership in the STAR segment of the MTA, to continue in drafting and systematic publication of quarterly reports, in compliance with art. 2.2.3, paragraph 3, letter. a) of the Regulation of Markets organized and managed by Borsa Italiana S.p.A. The reports are made available to the public in the usual forms of deposit at the registered office, the company website and the "eMarket Storage" storage mechanism.

In relation to the above, it is confirmed that the accounting principles and policies adopted by the Group in preparing the quarterly consolidated financial statements are consistent with those adopted in the consolidated financial statements at 31 December 2021, with the peculiarities shown below.

In this interim report IAS 19 is not applied as far as the quantification of changes in actuarial gains accrued in the period is concerned. In addition, in the context of disclosure of synthetic and essential character, are not observed all the detailed requirements of IAS 34, whenever it is assessed that its application does not bring meaningful information.

It should be noted that:

  • when it has not been possible to obtain invoices from suppliers for the provision of consulting and other services, a reasonable estimate of these costs has been made on the basis of the stage of completion of the work;
  • current and deferred taxes have been calculated using the tax rates applied in the current year in the individual countries of operation;
  • the quarterly report is not subject to audit;
  • all amounts are expressed in thousands of euros, unless otherwise specified.

Exchange rates used to translation of financial statements in foreign currencies:

31.12.2021 Amount of foreign for 1 Euro Average 3 M 2022 31.03.2022 Average 3 M 2021 31.03.2021
0.84 GB Pounds (UK) 0.84 0.85 0.87 0.85
7.19 Renminbi (China) 7.12 7.04 7.81 7.68
1.13 Dollar (Usa) 1.12 1.11 1.20 1.17
4.60 Zloty (Poland) 4.62 4.65 4.55 4.65
18.06 Zar (South Africa) 17.08 16.17 18.03 17.35
30.92 Uah (Ukraine) 32.25 32.48 33.68 32.63
6.31 Real (Brazil) 5.87 5.30 6.60 6.74
10.48 Dirham (Morocco) 10.63 10.71 10.78 10.63
23.14 Mexican Pesos (Mexico) 22.99 22.09 24.53 24.05
964.35 Chilean Pesos (Chile) 907.57 875.81 872.41 854.90
10.25 Swedish krona (Sweden) 10.48 10.34 10.12 10.24

Significant, non-recurring transactions or atypical, unusual transactions

There are no noteworthy events.

Bagnolo in Piano (RE), May 13, 2022 On behalf of the Board of Directors

The Chairman

Massimo Livatino

Declaration of the executive in charge of preparing the accounting statements pursuant to the rules of Article 154-bis, paragraph 2 of Legislative Decree no. 58/1998

The executive in charge of preparing corporate accounting statements of EMAK S.p.A., Roberto Bertuzzi, based on his own knowledge,

certifies,

in accordance with the second paragraph of Art. 154-bis, of Italian Legislative Decree No. 58 of 24 February 1998, that the accounting information contained in the Quarterly Report at 31 March 2022, examined and approved today by the Board of Directors of the company, corresponds with the accounting documents, ledgers and records.

Faithfully, Bagnolo in Piano (RE), May 13, 2022

Roberto Bertuzzi Executive in charge of preparing the accounting statements

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