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ER - Salcef Group: Nine-month results confirm robust growth and support further raising of the guidance for 2023 revenues

Company: Salcef Group Date: 2023-11-14 Language: English Register to download
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| Informazione<br>Regolamentata n.<br>20176-120-2023 |   | Data/Ora Inizio<br>Diffusione<br>14 Novembre 2023<br>17:45:46                                                              | Euronext Star Milan |
|----------------------------------------------------|---|----------------------------------------------------------------------------------------------------------------------------|---------------------|
| Societa'                                           | : | SALCEF GROUP                                                                                                               |                     |
| Identificativo<br>Informazione<br>Regolamentata    | : | 183399                                                                                                                     |                     |
| Nome utilizzatore                                  | : | SALCEFGROUPN02 - Salciccia                                                                                                 |                     |
| Tipologia                                          | : | REGEM                                                                                                                      |                     |
| Data/Ora Ricezione                                 | : | 14 Novembre 2023 17:45:45                                                                                                  |                     |
| Data/Ora Inizio<br>Diffusione                      | : | 14 Novembre 2023 17:45:46                                                                                                  |                     |
| Oggetto                                            | : | Salcef Group: Nine-month results confirm<br>robust growth and support further raising of<br>the guidance for 2023 revenues |                     |
| Testo del comunicato                               |   |                                                                                                                            |                     |

Vedi allegato.

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# **Salcef Group: Nine-month results confirm robust growth and support further raising of the guidance for 2023 revenues. Backlog reaches 2 billion euros**

**Revenues at € 568 million up 47%, EBITDA at € 116 million (+49%) and Backlog at above € 2 billion**

**9M 2023 key results (vs. 9M 2022):**

- **Revenues at € 567.9 million (+47.2%)**
- **EBITDA at € 115.5 million (+49.1%)**
- **EBIT at € 77.3 million (+51.7%)**
- **Net Income at € 51.3 million (+83.3%)**
- **Adjusted Net Financial Position positive for € 7.1 million (figure at 31 December 2022 positive for € 26.0 million)**

Rome, 14 November 2023 – The Board of Directors of Salcef Group S.p.A., convened today under the chairmanship of Gilberto Salciccia, approved the consolidated results for the first nine months of 2023.

#### **Valeriano Salciccia, Chief Executive Officer of Salcef Group,** commented*:*

*"We are particularly pleased with the results of the first nine months, which exceeded the entire 2022. The Group continues to grow and strengthen, with a workforce of over 2,000 people and a backlog at above 2 billion euros for the first time, consolidating the visibility on the business. Moreover, the integration of the companies acquired in 2022 and 2023 continues positively, bringing in new resources and competencies. Therefore, we believe that there are all the conditions for 2023 to end with volumes growing even more than the 30% we communicated in August".*

The Salcef Group has been operating for over 70 years in the development and innovation of sustainable mobility infrastructures. It is a global player in the maintenance, renewal, construction and electrification of railway and urban transport infrastructure, as well as in the construction and sale of railway machines and the production of reinforced concrete structures. Maintenance and renewal of railway and urban infrastructure form the core business and account for 71% of volumes. Established in 1949, Salcef has been controlled by the Salciccia family since 1975 and it is currently led by brothers Gilberto and Valeriano Salciccia, in the roles of Chairman and Chief Executive Officer respectively. The Group has 7 Operative Business Units and is present on 4 continents. It employs more than 2,000 highly specialized people and in 2022 recorded revenues for 565 million euro. The Salcef Group is based in Italy and since October 2021 is listed on the STAR segment of the Euronext Milan market of the Italian Stock Exchange (Borsa Italiana: SCF; Reuters: SCFG.MI; Bloomberg: SCF:IM).

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### **9M 2023 KEY PERFORMANCE INDICATORS**

| € million                        | 9M 2023 | 9M 2022<br>1 | Δ Abs.   | Δ %     |
|----------------------------------|---------|--------------|----------|---------|
| Revenues                         | 567.9   | 385.8        | 182.1    | 47.2%   |
| EBITDA                           | 115.5   | 77.5         | 38.0     | 49.1%   |
| EBITDA margin                    | 20.4%   | 20.1%        | 0.3 p.p. | -       |
| EBIT                             | 77.3    | 51.0         | 26.3     | 51.7%   |
| EBIT margin                      | 13.6%   | 13.2%        | 0.4 p.p. | -       |
| Adjusted Net Income2             | 51.7    | 38.9         | 12.8     | 32.9%   |
| Net Income                       | 51.3    | 28.0         | 23.3     | 83.3%   |
| Adjusted Net Financial Position3 | 7.1     | 26.0         | (18.9)   | (72.8%) |

(1) The figures, where applicable, has been restated to retroactively reflect the effects resulting from the completion of the purchase price allocation related to the acquisition of the railway business unit of PSC Group, in accordance with the accounting principles in force

- (2) Net Income adjusted to exclude the impact on financial expenses of the fair value change on financial investments, its related tax impact as well as the tax impact of the reversal of deferred tax assets on revaluations
- (3) Comparative figures and related changes as at 31 December 2022. Does not consider:
	- a. fair value change on financial investments (€ 4.4 million);
	- b. final installment paid in August 2023 for the acquisition of FVCF (€ 3 million);
	- c. payment for the acquisition of Colmar Technik (€ 23.8 million);
	- d. liquidity used in 2023 for the buy-back programme (€ 15.5 million);
	- e. amounts subject to precautionary seizure in proceedings against some subsidiaries. (€ 3.5 million).

In the first nine months of the year, consolidated **Revenues** amounted to **€ 567.9 million,** up 47.2% over the same period of 2022. The growth is due to a robust 32% organic growth as well as to the contribution of the subsidiaries recently entered into the Group's perimeter: the railway business unit of PSC Group and Francesco Ventura Costruzioni Ferroviarie acquired in May and December 2022 respectively, as well as, to a lesser extent, Colmar Technik S.p.A. acquired in August 2023.

Consolidated **EBITDA** reached **€ 115.5 million**, with a 49.1% increase over 9M 2022. The **EBITDA** *margin* stood at 20.4%, in line with expectations and the first half.

Consolidated **EBIT** reached **€ 77.3 million**, +51.7% YoY despite higher D&A for € 10.1 million due to the entry into operation of new plants and machines resulting from capex made both during 2022 and in the first nine months of 2023. Moreover, it should be noted that both the actual and comparative figures include the depreciation of the intangible assets accounted for following the purchase price allocation related to the acquisition of the railway business unit of PSC Group.

The Group *Adjusted* **Net Income** amounted to **€ 51.7 million**, up 32.9% compared to the € 38.9 million of the first nine months of 2022, mainly due to higher EBIT and lower financial expenses, partially offset by higher adjusted income taxes. The **Net Income** at **€ 51.3 million** was € 23.3 million (83.3%) higher than the first nine months of 2022.

The *Adjusted* **Net Financial Position** as at 30 September 2023 was positive for **€ 7.1 million** (positive for € 26.0 million at year-end 2022), mainly as a result of the dividend payment for € 30.8 million. The **Net Financial Position** was negative for € 43.1 million.

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The **Backlog** revises upward the previous record set at the end of June 2023, reaching for the first time € 2.02 billion. Among the main contracts awarded in the third quarter: extension of the existing underground passage in *Piazza Pia* in Rome; first supply of turnout bearers; track works activities in southern Italy. From a geographical perspective, the domestic component stands at 70.8%, slightly higher compared to the figure at 30 June 2023. *Track & Light Civil Works* and *Energy Signalling & Telecommunication* Business Units continue to be the most represented, accounting for 66.9% and 19.9% of the backlog, respectively. *Railway Machines* benefitted from the consolidation of Colmar (€ 27.8 million) and reached 2.4% of the backlog compared to the previous 0.5%.

## **Major events of the third quarter 2023**

#### **Acquisition of Colmar Technik S.p.A.**

On 1 August 2023 Salcef Group S.p.A. announced the closing of the acquisition of 100% of the share capital of Colmar Technik S.p.A., a company active in the design and manufacturing of machines for railway maintenance and construction, with two plants in Arquà Polesine (RO) and Costa di Rovigo (RO). The closing followed the preliminary agreement signed by the parties on 26 June 2023 and took place after the fulfillment of the conditions precedent included in the mentioned agreement as well as after the positive outcome of the due diligence process.

The parties agreed on a consideration of €16.5 million, entirely paid although partially deposited in an escrow account, without any price adjustment, clauses or further conditions precedent.

Through this acquisition, Salcef Group intends to expand its range of products in the railway machines sector, both for internal uses and for the market, also thanks to the synergies and the complementary nature of Colmar's range of products with those offered by the group's subsidiary SRT, which also operates in the railway machines business but with a primary focus on wagons and rail grinders. Moreover, the acquisition is also expected to lead to sales synergies generated by Colmar's international network.

Colmar has approximately 110 employees and an order backlog of over € 27 million.

#### **Legal proceedings under Italian Legislative Decree 231/2001**

During August and September 2023, Salcef S.p.A., Euro Ferroviaria S.r.l. and Francesco Ventura Costruzioni Ferroviarie S.r.l. were notified that they were under investigation and informed of the completion of the preliminary investigations in relation to criminal proceedings being handled by Milan Public Prosecutor's Office, in which the aforesaid Group companies are under investigation, together with other companies, for suspected offences under Legislative Decree 231/2001 (the "Proceedings"). The offences for which the Group companies have been informed that they are under investigation concern: (i) their possible involvement in the offence of conspiracy to favour the business of supplier companies owned by people with alleged links to organised crime and; (ii) only for possible offences committed after 24 December 2019, claimed fiscal offences relating to the entry in the companies' books of invoices issued by the said suppliers for the hire of assets and secondment of staff, and the inclusion of the said invoices in income tax and VAT returns. In September 2023, after receipt of the notice that they were under investigation, the Group companies involved were served Preventive Seizure for the amounts of the claimed illegal gains from the tax offences referred to above, calculated by the Investigating Judge on the request of the Public Prosecutor. As of the date of this document, the total seized amount on these grounds from the three Group companies involved in the Proceedings amounts to € 3.48 million, which breaks down into € 2.9 million for Francesco Ventura Costruzioni Ferroviarie S.r.l., € 0. 56 million for Salcef S.p.A. and € 2.6 thousands for Euro Ferroviaria S.r.l..

As things now stand, in light of the submittal of supplementary IRES and IRAP tax and VAT returns and the voluntary additional payments of all the amounts initially saved on their tax bills through deduction of the

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costs generated by the transactions with the suppliers concerned made by Salcef S.p.A. ed Euro Ferroviaria S.r.l., as well as on the basis of the legal opinions obtained by the Group (issued after examination of the paperwork for the Proceedings, the claimed offences and the conduct of the people and organisations under investigation), the experts' opinions regarding the Organisation, Management and Control Model under Legislative Decree no. 231/2001 adopted by the companies and the completed and ongoing experts' opinions on the genuine nature of the services received, although nothing can be ruled out, it is considered that: (i) the Group companies involved are highly unlikely to be found guilty in the Proceeding; (ii) they are very unlikely to suffer any other financial losses over and above the sums already seized and; (iii) it is not believed that the Proceedings currently adversely affect the companies' general compliance with the requirements of the new Italian Public Contract Code on disqualification from participation in public tenders.

#### **Outlook**

In light of the results achieved during the first nine months and of the solidity of the Group's backlog, revenue growth at year-end is expected between 30% and 35% vs. 2022.

Group profitability is expected to remain in line with the one recorded in the first nine months, considering the inflationary scenario in Europe.

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The manager responsible for the drafting of corporate accounting documents Fabio De Masi declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

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This press release is available on the Salcef Group website [https://www.salcef.com](https://www.salcef.com/) in the *Investor Relations/Price Sensitive Press Releases* section.

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Management will present the 9M 2023 results to the financial community on **Wednesday, 15 November at 11:00 CET** via webcast and conference call. To join the Audio Webcast/Conference Call, please register at the followin[g link.](https://services.choruscall.it/DiamondPassRegistration/register?confirmationNumber=1943513&linkSecurityString=1b3914330)

The Presentation will be made available before the beginning of the conference on the Investor Relations section of [www.salcef.com.](http://www.salcef.com/)

A replay of the webcast will be then available on the Investor Relations section of [www.salcef.com.](http://www.salcef.com/)

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#### **Consolidated Balance Sheet**

| ASSETS                                     | 30.09.2023    | 31.12.2022<br>Restated* |
|--------------------------------------------|---------------|-------------------------|
| Non-current Assets                         |               |                         |
| Intangible assets with finite useful lives | 19,539,504    | 21,583,417              |
| Goodwill                                   | 123,072,822   | 98,484,694              |
| Property, plant and equipment              | 212,404,204   | 194,829,294             |
| Right-of-use assets                        | 14,616,210    | 17,073,977              |
| - of which, with related parties           | 0             | 993,661                 |
| Equity-accounted investments               | 135,643       | 135,643                 |
| Other non-current assets                   | 29,800,447    | 25,112,368              |
| - of which, with related parties           | 1,321,453     | 1,526,853               |
| Deferred tax assets                        | 23,625,446    | 25,452,686              |
| Total non-current Assets                   | 423,194,276   | 382,672,079             |
| Current Assets                             |               |                         |
| Inventories                                | 47,157,936    | 29,764,667              |
| Contract assets                            | 219,457,123   | 156,033,743             |
| Trade receivables                          | 133,682,572   | 140,505,148             |
| - of which, with related parties           | 21,724,819    | 11,609,934              |
| Current tax assets                         | 3,534,659     | 4,167,579               |
| Current financial assets                   | 125,320,464   | 148,643,040             |
| Cash and cash equivalents                  | 64,540,191    | 135,245,724             |
| Other current assets                       | 48,863,486    | 35,333,090              |
| Assets held for sale                       | 0             | 2,529,499               |
| Total current Assets                       | 642,556,431   | 652,222,490             |
| TOTAL ASSETS                               | 1,065,750,707 | 1,034,894,569           |

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| LIABILITIES                                                          | 30.09.2023    | 31.12.2022<br>Restated* |
|----------------------------------------------------------------------|---------------|-------------------------|
| Equity attributable to the owners of the Parent                      |               |                         |
| Share capital                                                        | 141,544,532   | 141,544,532             |
| Other reserves                                                       | 249,357,662   | 252,475,698             |
| Profit for the period                                                | 51,051,359    | 45,190,464              |
| Total equity attributable to the owners of the Parent                | 441,953,553   | 439,210,694             |
| Share capital and reserves attributable to non-controlling interests | 2,650,300     | 2,348,332               |
| Profit for the period attributable to non-controlling interests      | 276,305       | 302,068                 |
| TOTAL EQUITY                                                         | 444,880,158   | 441,861,094             |
| Non-current liabilities                                              |               |                         |
| Non-current financial liabilities                                    | 132,013,871   | 119,211,190             |
| Lease liabilities                                                    | 8,466,664     | 10,428,864              |
| - of which, with related parties                                     | 0             | 727,379                 |
| Employee benefits                                                    | 4,147,147     | 6,678,524               |
| Provisions for risks and charges                                     | 6,187,340     | 2,357,957               |
| Deferred tax liabilities                                             | 7,273,869     | 8,809,255               |
| Other non-current liabilities                                        | 4,681,757     | 4,266,809               |
| Total non-current liabilities                                        | 162,770,648   | 151,752,599             |
| Current liabilities                                                  |               |                         |
| Bank loans and borrowings                                            | 0             | 4,064,734               |
| Current financial liabilities                                        | 87,039,134    | 89,263,299              |
| Current portion of lease liabilities                                 | 5,449,399     | 5,387,527               |
| - of which, with related parties                                     | 0             | 342,844                 |
| Current employee benefits                                            | 1,259,926     | 1,127,387               |
| Contract liabilities                                                 | 39,831,314    | 77,763,713              |
| Trade payables                                                       | 243,091,042   | 218,281,916             |
| - of which, with related parties                                     | 753,392       | 460,002                 |
| Tax liabilities                                                      | 21,860,175    | 8,085,187               |
| Other liabilities                                                    | 59,568,911    | 36,035,410              |
| Liabilities directly related to assets held for sale                 | 0             | 1,271,703               |
| Total current liabilities                                            | 458,099,901   | 441,280,876             |
| TOTAL LIABILITIES                                                    | 620,870,549   | 593,033,475             |
| TOTAL EQUITY AND LIABILITIES                                         | 1,065,750,707 | 1,034,894,569           |

(\*) Figures restated to retroactively reflect the effects resulting from the completion of the purchase price allocation related to the acquisition of the railway business unit of PSC Group

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## **Consolidated Income Statement**

|                                        | 9M 2023       | 9M 2022<br>Restated* |
|----------------------------------------|---------------|----------------------|
| Revenues from contracts with customers | 560,832,041   | 377,926,413          |
| - of which, with related parties       | 23,152,338    | 1,627,260            |
| Other income                           | 7,019,872     | 7,868,685            |
| Total revenues                         | 567,851,913   | 385,795,098          |
| Raw materials, supplies and goods      | (146,424,855) | (91,296,234)         |
| - of which, with related parties       | (70,524)      | 0                    |
| Services                               | (212,628,244) | (144,567,186)        |
| - of which, with related parties       | (823,434)     | (8,573)              |
| Personnel expenses                     | (105,811,614) | (80,121,223)         |
| Depreciation and Amortisation          | (36,510,230)  | (26,439,178)         |
| Impairement losses                     | (1,716,005)   | (69,870)             |
| Other operating costs                  | (12,154,615)  | (8,760,773)          |
| Internal work capitalised              | 24,707,418    | 16,437,125           |
| Total costs                            | (490,538,145) | (334,817,339)        |
| Operating profit                       | 77,313,768    | 50,977,759           |
| Financial expenses                     | (4,208,553)   | (7,293,603)          |
| - of which, with related parties       | (42,109)      | (45,192)             |
| Pre-tax profit (loss)                  | 73,105,215    | 43,684,156           |
| Income taxes                           | (21,777,551)  | (15,680,602)         |
| Profit (loss) for the period           | 51,327,664    | 28,003,555           |
| Profit for the period attributable to: |               |                      |
| Non-controlling interests              | 276,305       | (75,900)             |
| Owners of the Parent                   | 51,051,359    | 28,079,455           |

(\*) Figures restated to retroactively reflect the effects resulting from the completion of the purchase price allocation related to the acquisition of the railway business unit of PSC Group

| Fine Comunicato n.20176-120 | Numero di Pagine: 9 |
|-----------------------------|---------------------|
|-----------------------------|---------------------|