Interim / Quarterly Report • Nov 12, 2021
Interim / Quarterly Report
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Investor Relator Marco Paredi Tel: 035.4232840 - Fax: 035.3844606 e-mail: [email protected]
Tesmec S.p.A.
Registered Office: Piazza Sant'Ambrogio, 16 – 20123 Milan Fully paid-up share capital as at 30 September 2021 Euro 15,702,162 Milan Register of Companies no. 314026 Tax and VAT code: 10227100152
Website: www.tesmec.com Switchboard: 035.4232911
| COMPOSITION OF THE CORPORATE BODIES 7 |
|---|
| GROUP STRUCTURE 9 |
| INTERIM CONSOLIDATED REPORT ON OPERATIONS 11 |
| 1. Introduction 12 |
| 2. Macroeconomic Framework 12 |
| 3. Significant events during the period 14 |
| 4. Activity, reference market and operating performance for the first nine months of 2021 15 |
| 5. Income statement 16 |
| 6. Summary of balance sheet figures as at 30 September 2021 20 |
| 7. Management and types of financial risk 22 |
| 8. Atypical and/or unusual and non-recurring transactions with related parties 22 |
| 9. Group Employees 22 |
| 10. Other information 22 |
| CONSOLIDATED FINANCIAL STATEMENTS 25 |
| Consolidated statement of financial position as at 30 September 2021 and as at 31 December 2020 26 |
| Consolidated income statement as at 30 September 2021 and 30 September 2020 28 |
| Consolidated statement of comprehensive income as at 30 September 2021 and 30 September 2020 29 |
| Statement of consolidated cash flows as at 30 September 2021 and 30 September 2020 30 |
| Statement of changes in consolidated shareholders' equity as at 30 September 2021 and 30 September |
| 2020 31 |
| Explanatory notes 32 |
| Certification pursuant to Article 154-bis of Italian Legislative Decree no. 58/98 37 |
Board of Directors (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2021)
| Chairman and Chief Executive Officer | Ambrogio Caccia Dominioni |
|---|---|
| Vice Chairman | Gianluca Bolelli |
| Directors | Caterina Caccia Dominioni Lucia Caccia Dominioni Paola Durante () Simone Andrea Crolla () Emanuela Teresa Basso Petrino () Guido Luigi Traversa () |
| (*) Independent Directors |
| Chairman | Simone Cavalli |
|---|---|
| Statutory Auditors | Stefano Chirico Alessandra De Beni |
| Alternate Auditors | Attilio Marcozzi Stefania Rusconi |
Members of the Control and Risk, Sustainability and Related Parties Transactions Committee (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2021)
| Chairman | Emanuela Teresa Basso Petrino |
|---|---|
| Members | Simone Andrea Crolla Guido Luigi Traversa |
Members of the Remuneration and Appointments Committee (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2021)
| Chairman | Simone Andrea Crolla |
|---|---|
| Members | Emanuela Teresa Basso Petrino Caterina Caccia Dominioni |
| Lead Independent Director | Paola Durante |
| Director in charge of the internal control and risk management system |
Caterina Caccia Dominioni |
| Manager responsible for preparing the Company's financial statements |
Marco Paredi |
| Independent Auditors | Deloitte & Touche S.p.A. |
(Not audited by the Independent Auditors)
The Tesmec S.p.A. Parent Company (hereinafter "Parent Company" or "Tesmec") is a legal entity organised in accordance with the legal system of the Italian Republic. The ordinary shares of Tesmec are listed on the MTA (screen-based share market) STAR Segment of the Milan Stock Exchange. The registered office of the Tesmec Group (hereinafter "Group" or "Tesmec Group") is in Milan, Piazza S. Ambrogio 16.
The Tesmec Group is a leader in the design, production and marketing of special products and integrated solutions for the construction, maintenance and streamlining of infrastructures relating to the transmission of electrical power and data and material transport.
Founded in Italy in 1951 and managed by the Chairman and Chief Executive Officer Ambrogio Caccia Dominioni, the Group, as from its listing on the Stock Exchange on 1 July 2010, has pursued the stated objective of diversification of the types of products in order to offer a complete range of integrated solutions grouped into three main areas of business: Energy, Trencher and Rail. The structure has more than 900 employees and has production plants located in Grassobbio (Bergamo), Endine Gaiano (Bergamo), Sirone (Lecco) and Monopoli (Bari) in Italy, Alvarado (Texas) in the USA and Durtal in France. Furthermore, after the reorganisation of the Automation sector, Tesmec Automation has 3 additional operating units available in Fidenza, Padua and Patrica (Frosinone). The Group has a global commercial structure, with a direct presence on different continents, through foreign companies and sales offices in the USA, South Africa, Russia, Qatar, China, France, Australia, New Zealand, Ivory Coast and Saudi Arabia.
Through the different types of product, the Group is able to offer:
machines and integrated systems for the installation, maintenance and diagnostics of the railway catenary wire system, plus customised machines for special operations on the line.
The know-how achieved in the development of specific technologies and innovative solutions and the presence of a team of highly-skilled engineers and technicians allow the Tesmec Group to directly manage the entire production chain: from the design, production and marketing or rental of machinery to the supply of know-how relating to the use of systems and optimisation of work, to all pre- and post-sales services related to machinery and the increase in site efficiency.
The global recovery continues to be strong, albeit with uncertainties related to the pace of vaccination campaigns and the spread of new variants of the virus. Trade returned to pre-pandemic levels, but significant bottlenecks emerged on the supply side - partly caused by the very speed of the recovery - mainly related to semiconductor shortages and critical issues in logistics and transport.
Inflation expectations increased: after a drop in August, oil prices started to rise again, boosting global inflation. Natural gas prices also increased significantly. These tensions in supplies of raw materials and intermediate inputs may continue to affect prices for a longer period than initially expected, and some factors suggest that part of the price increase may become permanent.
According to forecasts released in October by the International Monetary Fund, world GDP will grow by 5.9% in 2021, exceeding pre‑pandemic levels. However, the outlook remains mixed across countries: output in advanced economies will be back in line with the pre-pandemic trend next year, while in emerging economies the effects of the health crisis will be more lasting. While
confirming their expansionary monetary stance, as cyclical conditions improved, the Federal Reserve and the Bank of England began to foreshadow assessments that will determine when and how monetary stimulus will be reduced.
In the Eurozone, growth continues to be robust, even if the consequences of the health emergency have not been fully absorbed. Manufacturing activity was held back by global semiconductor shortages and by the lengthening of the delivery times of intermediate inputs.
Consumer-price inflation stood at 3.4% in September and inflation expectations from inflation swaps increased over the twoand five-year horizons. The acceleration of prices is mainly due to the extremely strong growth of the energy component, which is likely to persist in the coming months, also as a result of the sharp increase in natural gas prices.
The Governing Council of the ECB believes that maintaining favourable financing conditions remains essential to ensure the continuation of the recovery. Since the beginning of July, the Euro depreciated against the dollar, reflecting expectations of a relatively more expansionary monetary stance by the ECB in the coming months. The Commission started disbursing the first portion of pre-financing resources for more than Euro 52 billion, of which just under half is earmarked for Italy.
In the summer months, the Italian economy continued to benefit from the progress of the vaccination campaign and the full recovery of mobility. The significant recovery of value added in services, especially in the sectors most affected by the containment measures (trade, transport and accommodation), was accompanied by a new increase in industry. According to the most recent information, industrial production continued to grow in the third quarter, steadily recovering pre-pandemic levels. The Bank of Italy's updated forecast also suggests that growth could be around 6% year-on-year. The new estimates were affected by a higher than expected growth in GDP and take into account, among other things, some favourable elements emerged during the monitoring of revenues and expenses of the Public Administrations. In fact, economic activity is benefiting from the positive trend in demand, while the unavailability of intermediate inputs is the most significant obstacle to the activity of industrial companies. Shortages in the supply of raw materials and intermediate products, limitations and increased costs in transport and the consequent lengthening of delivery times continue to put increasing pressure on the early stages of price formation. Among companies with supply problems, 80% reported increases in production inputs, about 70% reported their unavailability, and a similar proportion reported delays related to supplier processing or transport times; in particular, the unavailability of semiconductors and other electrical components mainly affected the engineering sector. These difficulties are mainly reflected in an increase in sales prices (34%) and delivery times (30%), as well as in the reduction in profit margins (23%). Inflation in September reached 2.9%, driven by a marked increase in energy prices to 20.5%. The increase is likely to continue in the coming months, which is why companies have adjusted their inflation expectations and price increase forecasts upwards. However, on the whole, companies confirm very favourable opinions on the conditions for investing. Imports increased especially the goods component - against the background of further recovery in investment. Exports of services also increased supported by the gradual recovery of international tourism.
Financial market conditions in Italy remained relaxed and purchases of Italian public and private securities by non-residents continued. Since the second half of July, Italian government bond yields on long-term maturities in particular, increased, as have yields in the major advanced economies. Share prices have risen more in Italy than in the Eurozone (7.4% and 3.6%) since the second half of July. The positive effect of the announcement of higher-than-expected profits was partly offset by fears about possible increases in market rates and the trend in energy prices. In the summer months, growth in loans to non-financial companies lost momentum, reflecting lower applications for loans in the face of the abundant liquidity accumulated over the past year and a half and the improved cash flows induced by positive economic developments.
However, the effects of the pandemic crisis have not been fully overcome and the use of wage support instruments is still widespread. Uncertainty on the strength of the recovery - related to the evolution of the pandemic situation - and on the inflation trend remains a risk factor. In this context, the Government plans to use a large part of the room for manoeuvre deriving from the improvement in the trend framework for new expansionary measures that will be defined in the next Budget Law. In particular, the aim of the reform is to reduce the tax burden on the factors of production, rationalise and simplify the tax system, preserve its progressiveness and combat tax evasion and avoidance.
The significant events occurred during the period are reported below:
As described above, on 24 June 2021 the parent company Tesmec S.p.A. acquired 49% of the share capital of Tesmec Saudi Arabia LLC for a price of Euro 2,019 thousand, the remaining 51% was acquired by a third-party local operator, the company SAS Machineries. The purpose of the transaction is to directly oversee the area and increase Tesmec's presence in the Middle Eastern market.
The equity investment in Tesmec Saudi Arabia LLC is an equity investment in an associated company and is therefore recognised in the financial statements in accordance with the equity method. The differential arising between the shareholders' equity of the associated company and the acquisition price amounts to Euro 2,462 thousand and is provisionally allocated to Goodwill, which remains implicitly recorded in the value of the equity investment. Any adjustments arising from the completion of the purchase price allocation will be included in the Tesmec Group's consolidated financial statements as soon as this process is completed within 12 months of the acquisition date, as permitted by IFRS 3.
The assets and liabilities of Tesmec Saudi Arabia, measured at fair value, are broken down below:
| Values of the acquired company | |
|---|---|
| (Euro in thousands) | |
| NON-CURRENT ASSETS | |
| Property, plant and equipment | 3,262 |
| TOTAL NON-CURRENT ASSETS | 3,262 |
| CURRENT ASSETS | |
| Inventories | 1,812 |
| Trade receivables | 1,228 |
| Other current assets | 98 |
| Cash and cash equivalents | 170 |
| TOTAL CURRENT ASSETS | 3,308 |
| TOTAL ASSETS | 6,570 |
| SHAREHOLDERS' EQUITY | |
| Share capital | 45 |
| Reserves / (deficit) | (950) |
| TOTAL SHAREHOLDERS' EQUITY | (905) |
| NON-CURRENT LIABILITIES | |
| Employee benefit liability | 101 |
| TOTAL NON-CURRENT LIABILITIES | 101 |
| CURRENT LIABILITIES | |
| Interest-bearing financial payables (current portion) | 2,006 |
| Trade payables | 5,368 |
| TOTAL CURRENT LIABILITIES | 7,374 |
| TOTAL LIABILITIES | 6,570 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 6,570 |
The difference between the total consideration of the acquisition and the net value of the acquired assets and liabilities measured at fair value on the basis of the provisional data available at the date of acquisition was recognised as follows:
| (Euro in thousands) | Goodwill calculation |
|---|---|
| Total consideration of the acquisition | 2,019 |
| Acquired shareholders' equity | (443) |
| Goodwill | 2,462 |
This Goodwill is still included in the value of the equity investment in Tesmec Saudi Arabia, measured in the financial statements using the equity method, and will be subject to impairment testing for the purpose of preparing the financial statements as at 31 December 2021.
The consolidated financial statements of Tesmec have been prepared in accordance with International Financial Reporting Standards (hereinafter the "IFRS" or the "International Accounting Standards"), which were endorsed by the European Commission, in effect as at 30 September 2021. The following table shows the Group's major economic and financial indicators as at September 2021 compared with the same period of 2020 and with 31 December 2020.
| 30 September 2020 | Key income statement data (Euro in millions) | 30 September 2021 |
|---|---|---|
| 116.8 | Operating Revenues | 144.2 |
| 15.7 | EBITDA | 21.2 |
| 0.2 | Operating Income | 4.8 |
| (4.8) | Group Net Profit | 2.0 |
| 909 | Number of employees | 945 |
| 31 December 2020 | Key financial position data (Euro in millions) | 30 September 2021 |
| 173.8 | Net Invested Capital | 189.6 |
| 69.4 | Shareholders' Equity | 73.1 |
| 104.4 | Group net financial indebtedness | 116.5 |
| 105.0 | ESMA Net financial indebtedness | 116.9 |
| 36.9 | Investments in property, plant and equipment, intangible assets and rights of use | 12.0 |
In this section, a number of Alternative Performance Measures not envisaged by IFRS (non-GAAP measures) and used by the directors in order to allow a better assessment of the Group's operating performance are illustrated. The Alternative Performance Measures are constructed exclusively from the Group's historical accounting data and are determined in accordance with the provisions of the Guidelines on Alternative Performance Measures issued by ESMA/2015/1415 as per CONSOB Communication no. 92543 of 3 December 2015.
The Alternative Performance Measures shown below are not audited and should not be interpreted as indicators of the Group's future performance:
The comments provided below refer to the comparison of the consolidated income statement figures as at 30 September 2021 with those as at 30 September 2020.
The main accounting figures for the first nine months of 2021 and 2020 are presented in the table below:
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | % of revenues | 2020 | % of revenues | |
| Revenues from sales and services | 144,184 | 100.0% | 116,832 | 100.0% | |
| Cost of raw materials and consumables | (58,116) | -40.3% | (49,816) | -42.6% | |
| Costs for services | (26,412) | -18.3% | (20,992) | -18.0% | |
| Payroll costs | (41,405) | -28.7% | (35,328) | -30.2% | |
| Other operating (costs)/revenues, net | (2,720) | -1.9% | 495 | 0.4% | |
| Amortisation and depreciation | (16,335) | -11.3% | (15,518) | -13.3% | |
| Development costs capitalised | 5,393 | 3.7% | 4,175 | 3.6% | |
| Portion of losses/(gains) from operational Joint Ventures evaluated using the equity method |
252 | 0.2% | 319 | 0.3% | |
| Total operating costs | (139,343) | -96.6% | (116,665) | -99.9% | |
| Operating income | 4,841 | 3.4% | 167 | 0.1% | |
| Financial expenses | (8,148) | -5.7% | (7,751) | -6.6% | |
| Financial income | 6,535 | 4.5% | 1,125 | 1.0% | |
| Portion of losses/(gains) from associated companies and non-operational Joint Ventures evaluated using the equity method |
(6) | 0.0% | 18 | 0.0% | |
| Pre-tax profit/(loss) | 3,222 | 2.2% | (6,441) | -5.5% | |
| Income tax | (1,167) | -0.8% | 1,648 | 1.4% | |
| Profit/(loss) for the period | 2,055 | 1.4% | (4,793) | -4.1% | |
| Profit/(loss) attributable to non-controlling interests | 15 | 0.0% | 14 | 0.0% | |
| Group profit/(loss) | 2,040 | 1.4% | (4,807) | -4.1% |
Total revenues as at 30 September 2021, compared to the corresponding period of the previous year, recorded an increase of 23.4%.
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | % of revenues | 2020 | % of revenues | 2021 vs 2020 |
| Sales of products | 91,569 | 63.51% | 87,417 | 74.82% | 4,152 |
| Services rendered | 38,970 | 27.03% | 27,382 | 23.44% | 11,588 |
| Changes in work in progress | 13,645 | 9.46% | 2,033 | 1.74% | 11,612 |
| Total revenues from sales and services | 144,184 | 100.00% | 116,832 | 100.00% | 27,352 |
Services rendered mainly concern the trencher segment and are represented by the machine rental business carried out in the United States, France, North Africa and Oceania.
The Group's turnover is produced abroad for 75.2% and, in particular, in non-EU countries. The revenue analysis by area is indicated below, compared with the first nine months of 2021 and the first nine months of 2020, which indicates the growth of the BRIC and Others market, partially balanced by the downtrends recorded in the North and Central American markets. It is emphasised that the segmentation by geographic area is determined by the country where the customer is located, regardless of where project activities/sales are organised.
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | 2020 | 2021 vs 2020 | % change | |
| Italy | 35,726 | 21,769 | 13,957 | 64.1% | |
| Europe | 37,943 | 35,972 | 1,971 | 5.5% | |
| Middle East | 11,507 | 5,520 | 5,987 | 108.5% | |
| Africa | 8,307 | 8,096 | 211 | 2.6% | |
| North and Central America | 21,708 | 27,498 | (5,790) | -21.1% | |
| BRIC and Others | 28,993 | 17,977 | 11,016 | 61.3% | |
| Total revenues | 144,184 | 116,832 | 27,352 | 23.4% |
Operating costs net of depreciation and amortisation amounted to Euro 123,008 thousand and increased by 21.6% compared to the previous year as a percentage lower than the increase in revenues.
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | 2020 | 2021 vs 2020 | % change | |
| Cost of raw materials and consumables | (58,116) | (49,816) | (8,300) | 16.7% | |
| Costs for services | (26,412) | (20,992) | (5,420) | 25.8% | |
| Payroll costs | (41,405) | (35,328) | (6,077) | 17.2% | |
| Other operating (costs)/revenues, net | (2,720) | 495 | (3,215) | -649.5% | |
| Development costs capitalised | 5,393 | 4,175 | 1,218 | 29.2% | |
| Portion of losses/(gains) from operational Joint Ventures evaluated using the equity method |
252 | 319 | (67) | -21.0% | |
| Operating costs net of depreciation and amortisation | (123,008) | (101,147) | (21,861) | 21.6% |
In terms of margins, EBITDA amounted to Euro 21,176 thousand, improving compared to what was recorded in the first nine months of 2020 when it was equal to Euro 15,685 thousand.
A restatement of the income statement figures representing the performance of EBITDA is provided below:
| As at 30 September | ||||||
|---|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | % of revenues | 2020 | % of revenues | 2021 vs 2020 | |
| Operating income | 4,841 | 3.4% | 167 | 0.1% | 4,674 | |
| + Amortisation and depreciation | 16,335 | 11.3% | 15,518 | 13.3% | 817 | |
| EBITDA | 21,176 | 14.7% | 15,685 | 13.4% | 5,491 |
| As at 30 September | ||||
|---|---|---|---|---|
| (Euro in thousands) | 2021 | 2020 | 2021 vs 2020 | % change |
| Net financial income/expenses | (3,576) | (3,690) | 114 | -3.09% |
| Foreign exchange gains/losses | 1,948 | (2,777) | 4,725 | -170.15% |
| Fair value adjustment of derivative instruments on exchange rates | 15 | (159) | 174 | -109.43% |
| Portion of losses/(gains) from associated companies and non operational Joint Ventures evaluated using the equity method |
(6) | 18 | (24) | -133.33% |
|---|---|---|---|---|
| Total net financial income/expenses | (1,619) | (6,608) | 4,989 | -75.5% |
The net financial management increased compared to the same period in the previous financial year by Euro 4,989 thousand, with the following changes reported:
The tables below show the income statement figures as at 30 September 2021 compared to those as at 30 September 2020, broken down into three operating segments.
| As at 30 September | ||||||
|---|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | % of revenues | 2020 | % of revenues | 2021 vs 2020 | |
| Energy | 36,495 | 25.3% | 29,187 | 25.0% | 7,308 | |
| Trencher | 84,908 | 58.9% | 66,217 | 56.7% | 18,691 | |
| Rail | 22,781 | 15.8% | 21,428 | 18.3% | 1,353 | |
| Total Revenues | 144,184 | 100.0% | 116,832 | 100.0% | 27,352 |
In the first nine months of 2021, the Group consolidated revenues of Euro 144,184 thousand, with an increase of Euro 27,352 thousand (equal to 23.4%) compared to Euro 116,832 thousand in the same period of the previous year. This change, despite the persistence of a situation of uncertainty in the global context due to the pandemic, substantially brings revenues back to pre-COVID levels with a better margin due to the actions taken as from the 2020 financial year and the integration process of the 4service Group.
In detail, the turnover of the Trencher segment as at 30 September 2021 amounted to Euro 84,908 thousand, up by 28.2% compared to the figure of Euro 66,217 thousand as at 30 September 2020, albeit impacted by delays due to the critical issues on the supply chain and performance in the USA where the Group has not yet fully grasped the market opportunities and for which new organisational initiatives have consequently been undertaken with the appointment of a new Country Manager. Growth was recorded mainly in the renewable energy and telecom sectors, with an increase in the share of sustainable turnover.
With reference to the Energy segment, revenues were Euro 36,495 thousand, with an increase of 25.0% compared to Euro 29.187 thousand as at 30 September 2020. In particular, the Energy-Automation segment achieved revenues of Euro 12,194 thousand, compared to Euro 8,297 thousand as at 30 September 2020. This sector also shows a recovery driven by growth in investment.
The Rail segment recorded revenues of Euro 22,781 thousand, slightly up compared to the corresponding period of the previous year, when they amounted to Euro 21,428 thousand. This sector was the least affected in the previous financial year by the lockdown period; however, revenues were affected by the delayed start-up of new Projects that impact the short term and not the medium-long term outlook.
The tables below show the income statement figures as at 30 September 2021 compared to those as at 30 September 2020, broken down into three operating segments:
| As at 30 September | ||||||
|---|---|---|---|---|---|---|
| (Euro in thousands) | 2021 | % of revenues | 2020 | % of revenues | 2021 vs 2020 | |
| Energy | 6,624 | 18.2% | 3,750 | 12.8% | 2,874 | |
| Trencher | 10,419 | 12.3% | 8,888 | 13.4% | 1,531 | |
| Rail | 4,133 | 18.1% | 3,047 | 14.2% | 1,086 | |
| EBITDA | 21,176 | 14.7% | 15,685 | 13.4% | 5,491 |
This result is the combined effect of different trends in the three segments:
Information is provided below on the Group's main equity indicators as at 30 September 2021 compared to 31 December 2020. In particular, the following table shows the reclassified funding sources and uses from the consolidated balance sheet as at 30 September 2021 and as at 31 December 2020:
| As at 30 September | As at 31 December | |
|---|---|---|
| (Euro in thousands) | 2021 | 2020 |
| USES | ||
| Net working capital | 79,580 | 64,256 |
| Fixed assets | 98,653 | 99,530 |
| Other long-term assets and liabilities | 11,390 | 10,032 |
| Net invested capital | 189,623 | 173,818 |
| SOURCES | ||
| Net financial indebtedness | 116,535 | 104,370 |
| Shareholders' equity | 73,088 | 69,448 |
| Total sources of funding | 189,623 | 173,818 |
The table below shows a breakdown of "Net Working Capital" as at 30 September 2021 and 31 December 2020:
| (Euro in thousands) | As at 30 September 2021 | As at 31 December 2020 |
|---|---|---|
| Trade receivables | 63,362 | 60,415 |
| Work in progress contracts | 16,283 | 11,216 |
| Inventories | 81,780 | 74,386 |
| Trade payables | (58,297) | (61,385) |
| Other current assets/(liabilities) | (23,548) | (20,376) |
| Net working capital | 79,580 | 64,256 |
Net working capital amounted to Euro 79,580 thousand, marking an increase of Euro 15,324 thousand (equal to 23.8%) compared to 31 December 2020. This trend is mainly due to the increase in the item "Inventories" of Euro 7,394 thousand
(equal to 9.9%), which reflects both a greater use of supplies essential to meet the turnover expected in the last quarter of the year and a general increase in the prices of raw materials and components.
The table below shows a breakdown of "Fixed assets" as at 30 September 2021 and 31 December 2020:
| (Euro in thousands) | As at 30 September 2021 | As at 31 December 2020 |
|---|---|---|
| Intangible assets | 23,091 | 22,487 |
| Property, plant and equipment | 47,743 | 49,831 |
| Rights of use | 21,181 | 22,825 |
| Equity investments in associates | 6,635 | 4,384 |
| Other equity investments | 3 | 3 |
| Fixed assets | 98,653 | 99,530 |
Total fixed assets recorded a net decrease of Euro 877 thousand compared to 31 December 2020 mainly due to the disposal of some trenchers in the fleet no longer intended for rental activities partially offset by the increase in the item "Equity investments in associates" of Euro 2,251 thousand due to the acquisition of 49% of the share capital of Tesmec Saudi Arabia LLC for Euro 2,462 thousand.
The table below shows a breakdown of "Net financial indebtedness" as at 30 September 2021 and 31 December 2020:
| As at 30 | of which with related parties |
As at 31 | of which with related parties |
|
|---|---|---|---|---|
| (Euro in thousands) | September 2021 | and group | December 2020 | and group |
| Cash and cash equivalents | (48,509) | (70,426) | ||
| Current financial assets | (17,398) | (6,132) | (13,777) | (3,691) |
| Current financial liabilities | 56,554 | 2,495 | 85,799 | 2,788 |
| Current financial liabilities from rights of use | 5,560 | 5,218 | ||
| Current portion of derivative financial instruments | - | 1 | ||
| Current financial indebtedness | (3,793) | (3,637) | 6,815 | (903) |
| Non-current financial liabilities | 103,754 | 3,263 | 80,530 | 3,263 |
| Non-current financial liabilities from rights of use | 16,419 | 16,855 | ||
| Non-current portion of derivative financial instruments | 155 | 170 | ||
| Trade payables and other payables (non-current) | 375 | 625 | ||
| Non-current financial indebtedness | 120,703 | 3,263 | 98,180 | 3,263 |
| Net financial indebtedness pursuant to ESMA 32-382- 1138 Communication |
116,910 | (374) | 104,995 | 2,360 |
| Trade payables and other payables (non-current) | (375) | (625) | ||
| Group net financial indebtedness | 116,535 | (374) | 104,370 | 2,360 |
In the first nine months of 2021, the Group's net financial indebtedness increased by Euro 12,165 thousand compared to the figure at the end of 2020, to service the increase in net working capital. The financial indebtedness prior to the application of IFRS 16, as at 30 September 2021, amounts to Euro 94,556 thousand.
The table below shows the breakdown of the changes:
decrease in current financial indebtedness of Euro 10,608 thousand due to the:
The existing loan agreements and bond issues contractually provide for the calculation of the financial covenants based on net financial indebtedness calculated on the consolidated financial statements as at 31 December and prior to the application of IFRS 16.
The only covenant calculated on a half-yearly basis on the local financial statements of the subsidiary Tesmec USA Inc. vis-à-vis the Comerica Credit Institute was not met; therefore, the residual medium/long-term portion was reclassified as short-term for Euro 1,832 thousand.
With regard to the recent ESMA 32-382-1138 guidelines, which required the disclosure within the Net Financial Indebtedness of trade payables and other non-current payables that have a significant implicit or explicit financing component and any other non-interest-bearing loans, the amount of Euro 375 thousand corresponds to the consideration still to be paid for the lease of the AMG business unit started in 2019.
With regard to reverse factoring, the Group assesses, for each supplier, the deferral conditions obtained from financial counterparties on these liabilities and, depending on the substance of the liabilities, records them as trade payables or reclassifies them as financial payables. This assessment is required to understand the substance of the deferral agreements and necessarily involves a subjective assessment of the elements to be considered for the purposes of whether or not the corresponding payable is included in the Group's financial liabilities.
For the management of financial risks, please see the paragraph "Financial risk management policy" contained in the Explanatory Notes to the Annual Consolidated Financial Statements for 2020, where the Group's policies in relation to the management of financial risks are presented.
In compliance with the Consob communications of 20 February 1997, 27 February 1998, 30 September 1998, 30 September 2002 and 27 July 2006, we specify that no transactions took place with related parties of an atypical or unusual nature that are far removed from the company's normal operations or such as to harm the profits, balance sheet or financial results of the Group.
For significant intercompany and related party information, please see the paragraph "Related party transactions" in the Explanatory Notes.
The number of Group employees in the first nine months of 2021, including the employees of companies that are fully consolidated, is 945 persons compared to 909 in the first nine months of 2020.
Events occurring after the end of the reporting period included:
on 22 October 2021, the parent company Tesmec S.p.A. announced that, compared to the guidance for the year 2021, last communicated to the market on August 5, related to the expected consolidated turnover of approximately Euro 220 million, the Group now expects a revised turnover of more than Euro 200 million, but lower than the previous guidance. The change is attributable to the Group's performance in the US market, with respect to which a positive growth outlook is confirmed for 2022. Precisely in order to seize the growing opportunities in the sectors of reference in the USA, on 4 October 2021, Tesmec appointed a new Country Manager, who will also serve as CEO of the American subsidiary Tesmec USA Inc.
In relation to the slowdown of operations in the U.S. market, Tesmec has revised its closing estimates for the 2021 financial period, confirming revenues over Euro 200 million, EBITDA above 15% and Net Financial Indebtedness below Euro 110 million.
The change in the year-end outlook is attributable to the gap generated in the US market in the various reference businesses, in particular the Trencher segment, amounting to approximately Euro 20 million, which led to a correction of the previous estimate of Euro 220 million. In terms of margins, the lag in revenues and the performance in Australia lead to a revision of the EBITDA estimate to the aforementioned percentages compared to the previous estimate of over 16%. In terms of Net Financial Indebtedness, Tesmec expects to mitigate and reverse the change in working capital, which increased due to exogenous factors linked to the trend in the supplies and rental market. This reduction will have a positive impact on the Net Financial Indebtedness that is expected to improve, also thanks to the expected installments in the railway sector, compared to the end of the period at 30 September 2021, reaching a value lower than Euro 110 million, but not in line with the previous estimate which forecast a reduction compared to the end of the 2020 period.
The Group, despite the delays in terms of revenues and margins in the current financial period, confirms its expenditure guidelines for the 2020_2023 Plan. In fact, Tesmec is active in sectors that will benefit from new investments and development policies aimed at strengthening the key infrastructures of the main countries: the Group's business is concentrated in strategic sectors that are extremely lively and have significant growth prospects. Huge investments are planned in the Trencher segment to strengthen and digitalize telecommunications networks in addition to strong development in the mining sector. The Rail segment is benefiting from a significant increase in investments to reduce traffic congestion of road vehicles and increase sustainable mobility, as well as for the maintenance of lines with the aim of ensuring the safety of rail transport. In the Energy segment, the transition to renewable energy sources is confirmed, with consequent updated of the power grids due to this trend.
The effects of these investments, both in terms of the general macroeconomic recovery and in terms of their impact on the Group's activities and volumes, will be all the more evident the faster the government authorities define and assign the actions linked to the so-called Recovery Fund made available by the institutions of the European Union.
The priority of the Group remains the reduction of debt, bringing it to the levels defined by the Plan. Eventual investments must be compatible with this target.
(Not audited by the Independent Auditors)
| (Euro in thousands) NON-CURRENT ASSETS Intangible assets 23,091 22,487 Property, plant and equipment 47,743 49,831 Rights of use 21,181 22,825 Equity investments in associates evaluated using the equity method 6,635 4,384 Other equity investments 3 3 Financial receivables and other non-current financial assets 4,812 5,196 Derivative financial instruments 1 1 Deferred tax assets 17,042 16,446 Non-current trade receivables 2,551 1,302 TOTAL NON-CURRENT ASSETS 123,059 122,475 CURRENT ASSETS Work in progress contracts 16,283 11,216 Inventories 74,386 81,780 Trade receivables 60,415 63,362 of which with related parties: 1,590 7,085 Tax receivables 1,444 1,492 Other available-for-sale securities 1 1 Financial receivables and other current financial assets 13,776 17,397 of which with related parties: 6,132 3,691 Other current assets 10,587 8,810 Cash and cash equivalents 48,509 70,426 TOTAL CURRENT ASSETS 239,411 240,474 TOTAL ASSETS 362,470 362,949 SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS Share capital 15,702 15,702 Reserves / (deficit) 55,268 60,513 Group net profit / (loss) 2,040 (6,828) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO PARENT COMPANY 73,010 69,387 SHAREHOLDERS Capital and reserves / (deficit) attributable to non-controlling interests 63 44 Net profit / (loss) for the period attributable to non-controlling interests 15 17 TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO NON-CONTROLLING 78 INTERESTS 61 TOTAL SHAREHOLDERS' EQUITY 73,088 69,448 NON-CURRENT LIABILITIES Medium/long-term loans 98,791 74,336 of which with related parties: 3,263 3,263 Bond issue 4,963 6,194 Non-current financial liabilities from rights of use 16,419 16,855 Derivative financial instruments 155 170 Employee benefit liability 4,570 4,660 |
30 September 2021 | 31 December 2020 | |
|---|---|---|---|
| Deferred tax liabilities | 8,071 | 7,628 |
| Other long-term liabilities | 375 | 625 |
|---|---|---|
| TOTAL NON-CURRENT LIABILITIES | 133,344 | 110,468 |
| CURRENT LIABILITIES | ||
| Interest-bearing financial payables (current portion) | 54,094 | 68,362 |
| of which with related parties: | 2,495 | 2,788 |
| Bond issue | 2,460 | 17,437 |
| Current financial liabilities from rights of use | 5,560 | 5,218 |
| Derivative financial instruments | - | 1 |
| Trade payables | 58,297 | 61,385 |
| of which with related parties: | 1,684 | 1,465 |
| Advances from customers | 9,238 | 3,185 |
| Income taxes payable | 1,292 | 626 |
| Provisions for risks and charges | 3,248 | 2,968 |
| Other current liabilities | 21,849 | 23,851 |
| TOTAL CURRENT LIABILITIES | 156,038 | 183,033 |
| TOTAL LIABILITIES | 289,382 | 293,501 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 362,470 | 362,949 |
| As at 30 September | ||
|---|---|---|
| (Euro in thousands) | 2021 | 2020 |
| Revenues from sales and services | 144,184 | 116,832 |
| of which with related parties: | 9,739 | 5,894 |
| Cost of raw materials and consumables | (58,116) | (49,816) |
| of which with related parties: | (56) | (12) |
| Costs for services | (26,412) | (20,992) |
| of which with related parties: | (26,412) | (52) |
| Payroll costs | (41,405) | (35,328) |
| Other operating (costs)/revenues, net | (2,720) | 495 |
| of which with related parties: | 139 | (530) |
| Amortisation and depreciation | (16,335) | (15,518) |
| Development costs capitalised | 5,393 | 4,175 |
| Portion of losses/(gains) from operational Joint Ventures evaluated using the equity method |
252 | 319 |
| Total operating costs | (139,343) | (116,665) |
| Operating income | 4,841 | 167 |
| Financial expenses | (8,148) | (7,751) |
| of which with related parties: | (40) | (371) |
| Financial income | 6,535 | 1,125 |
| of which with related parties: | 60 | 72 |
| Portion of losses/(gains) from associated companies and non-operational Joint Ventures evaluated using the equity method |
(6) | 18 |
| Pre-tax profit/(loss) | 3,222 | (6,441) |
| Income tax | (1,167) | 1,648 |
| Net profit/(loss) for the period | 2,055 | (4,793) |
| Profit/(loss) attributable to non-controlling interests | 15 | 14 |
| Group profit/(loss) | 2,040 | (4,807) |
| Basic and diluted earnings/(losses) per share | 0.0034 | (0.045) |
| As at 30 September | ||
|---|---|---|
| (Euro in thousands) | 2021 | 2020 |
| NET PROFIT/(LOSS) FOR THE PERIOD | 2,055 | (4,793) |
| Other components of comprehensive income: | ||
| Other components of comprehensive income that will be subsequently reclassified to net income/(loss) for the year: |
||
| Exchange differences on conversion of foreign financial statements | 1,719 | (2,172) |
| Other components of comprehensive income that will not be subsequently reclassified to net income/(loss) for the year: |
||
| Actuarial profit/(loss) on defined benefit plans | 171 | - |
| Income tax | (42) | - |
| 129 | - | |
| Total other income/(losses) after tax | 1,848 | (2,172) |
| Total comprehensive income (loss) after tax | 3,903 | (6,965) |
| Attributable to: | ||
| Shareholders of Parent Company | 3,886 | (4,856) |
| Non-controlling interests | 17 | 4 |
| As at 30 September | ||
|---|---|---|
| (Euro in thousands) | 2021 | 2020 |
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net profit/(loss) for the period | 2,055 | (4,793) |
| Adjustments to reconcile net income for the period with the cash flows generated by (used in) operating activities: |
||
| Amortisation and depreciation | 16,335 | 15,518 |
| Provisions for employee benefit liability | 67 | - |
| Provisions for risks and charges / inventory obsolescence / doubtful accounts | 938 | 1,396 |
| Employee benefit payments | (157) | 124 |
| Payments of provisions for risks and charges | (161) | (410) |
| Net change in deferred tax assets and liabilities | (123) | (1,810) |
| Change in fair value of financial instruments | (16) | 159 |
| Change in current assets and liabilities: | ||
| Trade receivables | 390 | 7,433 |
| of which with related parties: | (5,495) | 2,663 |
| Inventories | (11,406) | (10,679) |
| Trade payables | (3,198) | (2,108) |
| of which with related parties: | 219 | (916) |
| Other current assets and liabilities | (3,421) | (3,744) |
| NET CASH FLOW GENERATED BY OPERATING ACTIVITIES (A) | 1,303 | 1,086 |
| CASH FLOW FROM INVESTING ACTIVITIES | ||
| Investments in property, plant and equipment | (10,865) | (4,627) |
| Investments in intangible assets | (6,968) | (7,760) |
| Investments in Rights of use | (3,484) | (2,925) |
| (Investments) / disposals of financial assets | (2,407) | (2,440) |
| of which with related parties: | (2,441) | 151 |
| Change in the consolidation area | (2,462) | (23,590) |
| Proceeds from sale of property, plant and equipment and rights of use | 9,342 | 8,703 |
| NET CASH FLOW USED IN INVESTING ACTIVITIES (B) | (16,844) | (32,639) |
| NET CASH FLOW FROM FINANCING ACTIVITIES | ||
| Disbursement of medium/long-term loans | 27,530 | 58,535 |
| of which with related parties: | - | 4,263 |
| Recognition of financial liabilities from rights of use | 4,933 | 8,049 |
| Repayment of medium/long-term loans | (26,735) | (5,022) |
| Repayment of financial liabilities from rights of use | (5,029) | (4,467) |
| Net change in short-term financial debt | (7,145) | (3,579) |
| of which with related parties: | (293) | 5,987 |
| Paid increase of capital | - | 9,400 |
| Other changes | (132) | - |
| NET CASH FLOW GENERATED BY / (USED IN) FINANCING ACTIVITIES (C) | (6,578) | 62,916 |
| TOTAL CASH FLOW FOR THE PERIOD (D=A+B+C) | (22,119) | 31,363 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (E) | 202 | (412) |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (F) | 70,426 | 17,935 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (G=D+E+F) | 48,509 | 48,886 |
| Additional information: | ||
| Interest paid | 3,254 | 3,913 |
| Income tax paid | 971 | 1,093 |
| (Euro in thousands) | Share capital |
Legal reserve |
Share premium reserve |
Reserve of treasury shares |
Translation reserve |
Other reserves |
Net profit/(loss) for the period |
Total shareholders' equity attributable to Parent Company shareholders |
Total shareholders' equity attributable to non controlling interests |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2021 |
15,702 | 2,141 | 39,215 (2,341) | 1,809 | 19,689 | (6,828) | 69,387 | 61 | 69,448 | |
| Comprehensive income statement |
- | - | - | - | 1,717 | 129 | 2,040 | 3,886 | 17 | 3,903 |
| Other changes | - | - | - | - | - | (263) | - | (263) | (263) | |
| Allocation of profit for the period |
- | - | - | - | - | (6,828) | 6,828 | - | - | - |
| Balance as at 30 September 2021 |
15,702 | 2,141 | 39,215 (2,341) | 3,526 | 12,727 | 2,040 | 73,010 | 78 | 73,088 |
| (Euro in thousands) | Share capital |
Legal reserve |
Share premium reserve |
Reserve of treasury shares |
Translation reserve |
Other reserves |
Net profit/(loss) for the period |
Total shareholders' equity attributable to Parent Company shareholders |
Total shareholders' equity attributable to non controlling interests |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2020 |
10,708 | 2,141 | 10,915 (2,341) | 5,028 | 16,684 | 2,967 | 46,102 | 50 | 46,152 | |
| Comprehensive income statement |
- | - | - | - | (2,162) | - | (4,807) | (6,969) | 4 | (6,965) |
| Future capital increase | - | - | - | - | - | 9,400 | - | 9,400 | - | 9,400 |
| Allocation of profit for the period |
- | - | - | - | - | 2,967 | (2,967) | - | - | - |
| Balance as at 30 September 2020 |
10,708 | 2,141 | 10,915 (2,341) | 2,866 | 29,051 | (4,807) | 48,533 | 54 | 48,587 |
The Parent Company Tesmec S.p.A. (hereinafter "Parent Company" or "Tesmec") is a legal entity organised in accordance with the legal system of the Italian Republic. The ordinary shares of Tesmec are listed on the MTA STAR Segment of the Milan Stock Exchange as from 1 July 2010. The registered office of the Tesmec Group (hereinafter "Group" or "Tesmec Group") is in Milan, Piazza S. Ambrogio 16.
The interim consolidated report on operations as at 30 September 2021 was prepared in condensed form. Since the interim consolidated report on operations does not disclose all the information required in preparing the consolidated annual financial statements or interim financial statements in accordance with IAS 34, it must be read together with the consolidated financial statements as at 31 December 2020.
The accounting standards adopted in preparing this interim consolidated report on operations as at 30 September 2021 are those adopted for preparing the consolidated financial statements as at 31 December 2020 in compliance with IFRS, to which reference is made for full details. Note that the standards and interpretations approved by the European Union and that came into force for the first time on 1 January 2021 have no particular relevance for the Group. Moreover, the Group has not adopted in advance any other principle, interpretation or modification published but not yet in force.
The interim consolidated report on operations as at 30 September 2021 comprises the consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income, statement of changes in consolidated shareholders' equity, statement of consolidated cash flows. Comparative figures are disclosed (31 December 2020 for the statement of financial position and the third quarter of 2020 for the consolidated income statement, consolidated statement of comprehensive income, statement of changes in shareholders' equity and cash flow statement).
More precisely, the consolidated statement of financial position, the consolidated income statement, the consolidated comprehensive income statement, the consolidated statement of changes in shareholders' equity and the consolidated statement of cash flows are drawn up in extended form and are in the same format adopted for the consolidated financial statements as at 31 December 2020.
The interim consolidated report on operations is presented in Euro. The balances in the financial statements and notes to the financial statements are expressed in thousands of Euro, except where specifically indicated.
Disclosure of the interim consolidated report on operations of the Tesmec Group for the period ended 30 September 2021 was authorised by the Board of Directors on 5 November 2021.
The exchange rates used to determine the value in Euros of the financial statements of subsidiary companies expressed in foreign currency (exchange rate to 1 Euro) are shown below:
| Average exchange rates for the | End-of-period exchange rate | ||||||
|---|---|---|---|---|---|---|---|
| period ended 30 September | as at 30 September | ||||||
| 2021 | 2020 | 2021 | 2020 | ||||
| US Dollar | 1.196 | 1.125 | 1.158 | 1.171 | |||
| Russian Rouble | 88.534 | 79.960 | 84.339 | 91.776 | |||
| South African Rand | 17.423 | 18.809 | 17.563 | 19.709 |
| Renminbi | 7.738 | 7.866 | 7.485 | 7.972 |
|---|---|---|---|---|
| Qatari Riyal | 4.354 | 4.095 | 4.215 | 4.262 |
| Algerian Dinar | 160.224 | 141.524 | 158.747 | 151.305 |
| Tunisian Dinar | 3.295 | 3.179 | 3.267 | 3.237 |
| Australian Dollar | 1.577 | 1.663 | 1.610 | 1.644 |
| New Zealand Dollar | 1.682 | 1.762 | 1.686 | 1.780 |
| Saudi Riyal | 4.486 | 4.219 | 4.342 | 4.391 |
| CFA Franc | 655.957 | 655.957 | 655.957 | 655.957 |
| GNF Franc | 11,802.972 | 10,671.76 | 11,237.184 | 11,404.46 |
As at 30 September 2021, the consolidation area changed compared to that as at 31 December 2020:
The accounting standards adopted for the preparation of the Interim consolidated report on operations are the same as those adopted for the preparation of the consolidated financial statements for the year ended 31 December 2020, with the exception of the adoption as of 1 January 2021 of the new standards and amendments. The Group has not adopted in advance any new standard, interpretation or amendment issued but not yet in force.
Several amendments are applied for the first time in 2021 but have no impact on the Group's interim condensed consolidated financial statements.
The amendments include the temporary easing of the requirements with respect to the effects on the financial statements when the interest rate offered in the interbank market (IBOR) is replaced by an alternative rate that is essentially risk-free (Risk Free Rate - RFR):
The amendments include the following practical expedients:
These amendments have no impact on the interim financial statements of the Group. The Group intends to use these practical expedients in future periods when they will be applicable.
Starting from 1 January 2021, the Group adopted a new method of determining the depreciation of trencher machines in the fleet. Based on technical analyses carried out by the company's engineers, and confirmed by an external opinion, a period of 8 years was identified as the best representation of the average useful life of these machines, therefore, the new depreciation rate of 12.5% on an annual basis is in force. This new method represents a change in estimates and is therefore applied prospectively.
For management purposes, the Tesmec Group is organised into strategic business units identified based on the goods and services provided, and presents three operating segments for disclosure purposes:
machines and integrated systems for the installation, maintenance and diagnostics of the railway catenary wire system, plus customised machines for special operations on the line.
No operating segment has been aggregated in order to determine the indicated operating segments that are the subject of the reporting.
| As at 30 September | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | ||||||||||
| (Euro in thousands) | Energy | Trencher | Rail | Consolidated | Energy | Trencher | Rail | Consolidated | |||
| Revenues from sales and services | 36,495 | 84,908 | 22,781 | 144,184 | 29,187 | 66,217 | 21,428 | 116,832 | |||
| Operating costs net of depreciation and amortisation |
(29,871) | (74,489) | (18,648) | (123,008) | (25,437) | (57,329) | (18,381) | (101,147) | |||
| EBITDA | 6,624 | 10,419 | 4,133 | 21,176 | 3,750 | 8,888 | 3,047 | 15,685 | |||
| Amortisation and depreciation | (4,162) | (9,374) | (2,799) | (16,335) | (4,275) | (8,731) | (2,512) | (15,518) | |||
| Total operating costs | (34,033) | (83,863) | (21,447) | (139,343) | (29,712) | (66,060) | (20,893) | (116,665) | |||
| Operating income | 2,462 | 1,045 | 1,334 | 4,841 | (525) | 157 | 535 | 167 | |||
| Net financial income/(expenses) | (1,619) | (6,608) | |||||||||
| Pre-tax profit/(loss) | 3,222 | (6,441) | |||||||||
| Income tax | (1,167) | 1,648 | |||||||||
| Net profit/(loss) for the period | 2,055 | (4,793) | |||||||||
| Profit/(loss) attributable to non controlling interests |
15 | 14 | |||||||||
| Group profit/(loss) | 2,040 | (4,807) |
The directors monitor separately the results achieved by the business units in order to make decisions on resources, allocation and performance assessment. Segment performance is assessed based on operating income.
Group financial management (including financial income and charges) and income tax are managed at Group level and are not allocated to the individual operating segments.
The following table shows the consolidated statement of financial position by operating segment as at 30 September 2021 and as at 31 December 2020:
| As at 30 September 2021 | As at 31 December 2020 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Euro in thousands) | Energy | Trencher | Rail | Not allocated |
Consolidated | Energy | Trencher | Rail | Not allocated |
Consolidated | |||
| Intangible assets | 10,516 | 5,874 | 6,701 | - | 23,091 | 9,748 | 5,287 | 7,452 | - | 22,487 | |||
| Property, plant and equipment | 2,997 | 36,650 | 8,096 | - | 47,743 | 2,756 | 39,474 | 7,601 | - | 49,831 | |||
| Rights of use | 875 | 19,719 | 587 | - | 21,181 | 760 | 21,351 | 714 | - | 22,825 | |||
| Financial assets | 3,363 | 3,399 | 1,926 | 2,763 | 11,451 | 3,523 | 965 | 1,925 | 3,171 | 9,584 | |||
| Other non-current assets | 1,777 | 6,904 | 305 | 10,607 | 19,593 | 1,736 | 7,197 | 841 | 7,974 | 17,748 | |||
| Total non-current assets | 19,528 | 72,546 | 17,615 | 13,370 | 123,059 | 18,523 | 74,274 | 18,533 | 11,145 | 122,475 | |||
| Work in progress contracts | 1,403 | - | 14,880 | - | 16,283 | - | - | 11,216 | - | 11,216 | |||
| Inventories | 19,560 | 56,307 | 5,913 | - | 81,780 | 18,316 | 50,030 | 6,040 | - | 74,386 | |||
| Trade receivables | 9,643 | 42,448 | 11,271 | - | 63,362 | 9,330 | 38,400 | 12,685 | - | 60,415 | |||
| Other current assets | 2,576 | 5,896 | 6,307 | 14,698 | 29,477 | 1,825 | 5,052 | 6,164 | 10,990 | 24,031 | |||
| Cash and cash equivalents | 3,990 | 7,715 | 8,178 | 28,626 | 48,509 | 3,565 | 7,145 | 7,721 | 51,995 | 70,426 | |||
| Total current assets | 37,172 | 112,366 | 46,549 | 43,324 | 239,411 | 33,036 | 100,627 | 43,826 | 62,985 | 240,474 | |||
| Total assets | 56,700 | 184,912 | 64,164 | 56,694 | 362,470 | 51,559 | 174,901 | 62,359 | 74,130 | 362,949 | |||
| Shareholders' equity attributable to parent company shareholders |
- | - | - | 73,010 | 73,010 | - | - | - | 69,387 | 69,387 | |||
| Shareholders' equity attributable to non-controlling interests |
- | - | - | 78 | 78 | - | - | - | 61 | 61 | |||
| Non-current liabilities | 3,251 | 18,591 | 9,337 | 102,165 | 133,344 | 1,760 | 17,725 | 8,468 | 82,515 | 110,468 | |||
| Current financial liabilities | 2,376 | 3,728 | 8,772 | 41,678 | 56,554 | 3,788 | 6,255 | 9,616 | 66,141 | 85,800 | |||
| Current financial liabilities from rights of use |
282 | 2,802 | 80 | 2,396 | 5,560 | 242 | 2,129 | 83 | 2,764 | 5,218 | |||
| Trade payables | 9,695 | 40,427 | 8,113 | 62 | 58,297 | 19,124 | 29,666 | 12,595 | - | 61,385 | |||
| Other current liabilities | 2,956 | 9,044 | 11,023 | 12,604 | 35,627 | 1,590 | 7,812 | 13,358 | 7,870 | 30,630 | |||
| Total current liabilities | 15,309 | 56,001 | 27,988 | 56,740 | 156,038 | 24,744 | 45,862 | 35,652 | 76,775 | 183,033 | |||
| Total liabilities | 18,560 | 74,592 | 37,325 | 158,905 | 289,382 | 26,504 | 63,587 | 44,120 | 159,290 | 293,501 | |||
| Total shareholders' equity and liabilities |
18,560 | 74,592 | 37,325 | 231,993 | 362,470 | 26,504 | 63,587 | 44,120 | 228,738 | 362,949 |
The following table gives details of economic and equity transactions with related parties. The companies listed below have been identified as related parties as they are linked directly or indirectly to the current shareholders:
| Half-year ended 30 September 2021 | Half-year ended 30 September 2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (Euro in thousands) | Revenues | Cost of Costs raw for materials services |
Other operating costs/revenues, net |
Financial income and expenses |
Revenues | Cost of Costs raw for materials services |
Other operating costs/revenues, net |
Financial income and expenses |
|||
| Associates: | |||||||||||
| Locavert S.A. | 140 | - | - | - | - | (237) | - | - | - | - | |
| Subtotal | 140 | - | - | - | - | (237) | - | - | - | - | |
| Joint Ventures: | |||||||||||
| Condux Tesmec Inc. | 6,088 | - | - | 114 | 9 | 5,188 | - | (2) | 132 | 10 |
| Total | 9,739 | (56) | (193) | 139 | 20 | 5,894 | (12) | (52) | (530) | (299) |
|---|---|---|---|---|---|---|---|---|---|---|
| Subtotal | 1,748 | (1) | (193) | 25 | (28) | 851 | (12) | (50) | (662) | (347) |
| RX S.r.l. | - | - | - | - | (21) | - | - | - | - | (64) |
| Triskell Conseil Partner | - | - | (169) | - | - | - | - | - | - | - |
| COMATEL | 29 | - | - | - | - | - | - | - | - | - |
| ICS Tech. S.r.l. | 109 | - | - | - | - | - | - | - | - | - |
| M.T.S. Officine meccaniche S.p.A. | 1,610 | (1) | (1) | 9 | (3) | 851 | (12) | 4 | (712) | - |
| FI.IND | - | - | - | 29 | - | - | - | - | 52 | (8) |
| Dream Immobiliare S.r.l. | - | - | - | (12) | (4) | - | - | - | - | (272) |
| Ceresio Tours S.r.l. | - | - | - | - | - | - | - | (3) | - | - |
| TTC S.r.l. | - | - | (23) | - | - | - | - | (51) | - | - |
| Ambrosio S.r.l. | - | - | - | (1) | - | - | - | - | (2) | (3) |
| Related parties: | ||||||||||
| Subtotal | 7,851 | (55) | - | 114 | 48 | 5,280 | - | (2) | 132 | 48 |
| Tesmec Peninsula | 263 | (55) | - | - | 39 | 92 | - | - | - | 38 |
| Tesmec Saudi Arabia | 1,500 | - | - | - | - | - | - | - | - | - |
| 30 September 2021 | 31 December 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Euro in thousands) | Trade receivables |
Current financial receivables |
Non current financial payables |
Current financial payables |
Trade payables |
Trade receivables |
Current financial receivables |
Non current financial payables |
Current financial payables |
Trade payables |
| Associates: | ||||||||||
| Locavert S.A. | 95 | - | - | - | - | 27 | - | - | - | - |
| R&E Contracting | - | - | - | - | - | - | - | - | - | - |
| Subtotal | 95 | - | - | - | - | 27 | - | - | - | - |
| Joint Ventures: | ||||||||||
| Condux Tesmec Inc. | 3,985 | 1,202 | - | - | - | 1,345 | 933 | - | - | 25 |
| Tesmec Peninsula | 17 | 1,999 | - | 1,013 | 59 | 12 | 1,887 | - | 1,214 | - |
| Tesmec Saudi Arabia | 2,227 | 2,059 | - | - | - | - | - | - | - | - |
| Marais Lucas | - | 794 | - | - | - | - | 794 | - | - | - |
| Subtotal | 6,229 | 6,054 | - | 1,013 | 59 | 1,357 | 3,614 | - | 1,214 | 25 |
| Related parties: | ||||||||||
| Ambrosio S.r.l. | - | - | - | - | 35 | - | - | - | - | 22 |
| Dream Immobiliare S.r.l. | - | 78 | - | - | 1,400 | - | 77 | - | - | 1,240 |
| Fi.ind. | 29 | - | - | - | - | 25 | - | - | - | 11 |
| TTC S.r.l. | - | - | - | - | 16 | - | - | - | - | 16 |
| M.T.S. Officine meccaniche S.p.A. | 593 | - | 3,050 | 43 | 2 | 181 | - | 3,050 | 43 | 59 |
| ICS Tech. S.r.l. | 133 | - | - | - | - | - | - | - | - | - |
| COMATEL | 6 | - | - | - | - | - | - | - | - | - |
| Triskell Conseil Partner | - | - | - | - | 56 | - | - | - | - | - |
| RX S.r.l. | - | - | 213 | 1,439 | 116 | - | - | 213 | 1,531 | 92 |
| Subtotal | 761 | 78 | 3,263 | 1,482 | 1,625 | 206 | 77 | 3,263 | 1,574 | 1,440 |
| Total | 7,085 | 6,132 | 3,263 | 2,495 | 1,684 | 1,590 | 3,691 | 3,263 | 2,788 | 1,465 |
of the administrative and accounting procedures adopted to prepare the Interim consolidated report on operations as at 30 September 2021.
Grassobbio, 5 November 2021
Ambrogio Caccia Dominioni Marco Paredi
Chief Executive Officer Manager responsible for preparing the Company's financial statements
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