Quarterly Report • Nov 22, 2017
Quarterly Report
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Quarterly Financial Report at 30 th September 2017
| GROUP STRUCTURE | pag. 1 |
|---|---|
| COMPOSITION OF CORPORATE BODIES | pag. 2 |
| MANAGEMENT REPORT | pag. 3 |
| CONSOLIDATED FINANCIAL STATEMENTS | |
| Statement of financial position - assets | pag. 16 |
| Statement of financial position - liabilities | pag. 17 |
| Statement of income | pag. 18 |
| Statement of comprehensive income | pag. 19 |
| Statement of cash flow | pag. 20 |
| Statement of shareholders' equity | pag. 21 |
| Presentation and content | pag. 22 |
|---|---|
| Information on the statement of financial position | pag. 26 |
| Information on the statement of income | pag. 46 |
1. 2016 Restated consolidated statement of income
2. Declaration pursuant to Art. 154-bis, pars. 2, Legislative Decree 58/1998
Branch / Rep. Office
APAC
OTHER
Volta Romano Chairman (2)
Volta Valentina Director & Chief Executive Officer (2)
Aversa Carlo Achille Director
Caruso Pier Paolo Director
Di Stefano Luigi Independent Director
Mazzalveri Gaia Independent Director
Todescato Pietro Director
Volta Filippo Maria Director
Fiorenza Salvatore Marco Andrea Chairman
Santagostino Roberto Statutory Auditor
Lancellotti Elena Statutory Auditor
Prandi Paolo Alternate Statutory Auditor
Fuzzi Mario Alternate Statutory Auditor
Magnani Sonia Alternate Statutory Auditor
Reconta Ernst & Young S.p.A.
(2) Legal representative with respect to third parties.
(1) The Board of Directors will remain in office until the general meeting that approves the accounts for the financial year ending 31 December 2017.
(3) The Statutory Auditors in office until the approval of the accounts for the financial year ending 31 December 2018.
This Interim Report on Operations as at 30 September 2017 was drawn up pursuant to Art. 154 of T.U.F. [Consolidated Law on Finance] and was prepared in compliance with the international accounting standards (IAS/IFRS) endorsed by the European Union.
The Datalogic Group is the world leader in the manufacture of fixed bar code readers, mobile computers, RFID-Radiofrequency Identification technology, detection, measurement and security sensors, vision and laser marking systems. Solutions offered by Datalogic increase efficiency and quality of processes, along the entire value chain, in the Retail, Transportation & Logistics, Manufacturing and Healthcare sectors.
The following table summarises the Datalogic Group's key operating and financial results as at 30 September 2017 in comparison with the same period a year earlier (figures in Euro thousands):
| nine months ended | ||||||
|---|---|---|---|---|---|---|
| 30.09.2017 | 30.09.2016 | change | % change | |||
| Total revenues | 450,711 | 421,753 | 28,958 | 6.9% | ||
| EBITDA (*) | 77,905 | 66,639 | 11,266 | 16.9% | ||
| % of total revenues | 17.3% | 15.8% | ||||
| Operating result (EBIT) | 62,466 | 52,750 | 9,716 | 18.4% | ||
| % of total revenues | 13.9% | 12.5% | ||||
| Group net profit/loss | 45,071 | 40,882 | 4,189 | 10.2% | ||
| % of total revenues | 10.0% | 9.7% | ||||
| Net financial position (NFP) | (15,176) | (37,577) | 22,401 | -59.6% |
The results of the nine months highlight a strong growth in all the economic indicators, thus confirming the positive trend reported over the first half. Thanks to higher revenues from sales and improved efficiency on operating costs, EBITDA increased by 16.9% to around €77.9 million, EBIT increased by over 18.4%, to €62.5 million and net profit by 10.2%, to €45.1 million.
The Net Financial Position, negative by €15.2 million, highlighted an improvement of €22.4 million compared to 30 September 2016.
To allow for a better valuation of the Group's performance, the Management adopted some alternative performance indicators (NON-GAAP measures) that are not identified as accounting measures within IFRS. The measurement criteria applied by the Group might be not consistent with the ones adopted by other groups and the balance obtained might not be comparable with the one determined by the latter. These alternative performance indicators, determined according to provisions set out by Guidelines on Alternative Performance Indicators, issued by ESMA/2015/1415 and adopted by CONSOB with communication no. 92543 of 3 December 2015, refer only to the performance of the accounting period related to this Interim Report on Operations and the compared periods.
The alternative performance indicators must be considered as supplementary and do not supersede information given pursuant to IFRS standards. The main alternative performance measures are described hereunder. The measures described relate to overall results achieved:
The following table shows the main income statement items, compared with the same period in the previous year:
| nine months ended | ||||||
|---|---|---|---|---|---|---|
| (in €/000) | 30.09.2017 | 30.09.2016 | change | % | ||
| change | ||||||
| Total revenues | 450,711 | 100.0% | 421,753 | 100.0% | 28,958 | 6.9% |
| Cost of goods sold | (238,201) | -52.9% | (227,381) | -53.9% | (10,820) | 4.8% |
| Gross profit | 212,510 | 47.1% | 194,372 | 46.1% | 18,138 | 9.3% |
| Other revenues | 2,005 | 0.4% | 2,321 | 0.6% | (316) | -13.6% |
| Research and development expenses | (39,889) | -8.9% | (36,636) | -8.7% | (3,253) | 8.9% |
| Distribution expenses | (73,225) | -16.2% | (72,259) | -17.1% | (966) | 1.3% |
| General and administrative expenses | (32,966) | -7.3% | (30,394) | -7.2% | (2,572) | 8.5% |
| Other operating costs | (1,450) | -0.3% | (1,147) | -0.3% | (303) | 26.4% |
| Total Operating costs and other costs | (147,530) | -32.7% | (140,436) | -33.3% | (7,094) | 5.1% |
| Ordinary operating result before non recurring costs and revenues and administrative costs arising from acquisitions (EBITANR) (*) |
66,985 | 14.9% | 56,257 | 13.3% | 10,728 | 19.1% |
| Non-recurring costs and revenues | (858) | -0.2% | 149 | 0.0% | (1,007) | n.a. |
| Depreciation & amortisation due to acquisitions |
(3,661) | -0.8% | (3,656) | -0.9% | (5) | 0.1% |
| Operating result (EBIT) | 62,466 | 13.9% | 52,750 | 12.5% | 9,716 | 18.4% |
| Net financial income (expenses) | (3,441) | -0.8% | (2,603) | -0.6% | (838) | 32.2% |
| Profits/(losses) from associates | (1) | 0.0% | (466) | -0.1% | 465 | -99.8% |
| Foreign exchange gains/(losses) | (2,259) | -0.5% | (548) | -0.1% | (1,711) | 312.2% |
| Pre-tax profit/(loss) | 56,765 | 12.6% | 49,133 | 11.6% | 7,632 | 15.5% |
| Taxes | (11,694) | -2.6% | (8,251) | -2.0% | (3,443) | 41.7% |
| GROUP NET PROFIT/(LOSS) | 45,071 | 10.0% | 40,882 | 9.7% | 4,189 | 10.2% |
| Depreciation and write-downs of tangible assets |
(7,649) | -1.7% | (6,629) | -1.6% | (1,020) | 15.4% |
| Amortisation and write-downs of intangible assets |
(3,271) | -0.7% | (3,753) | -0.9% | 482 | -12.8% |
| EBITDA | 77,905 | 17.3% | 66,639 | 15.8% | 11,266 | 16.9% |
It should be noted that, since 2017, some costs have been reclassified under various items. Comparative data as at 30 September 2016 have therefore been disclosed accordingly. For details please refer to the Annex 1 to the Interim report on operations.
The Group results as at 30 September 2017 included data related to the third quarter of the company Soredi Touch Systems GmbH acquired on 6 July 2017, as better described in the Explanatory Notes in section Change in the scope of consolidation and Business combination.
Consolidated net revenues amounted to €450,711 thousand, an increase of 6.9% compared to €421,753 thousand as at 30 September 2016 (+6.8% at constant Euro/Dollar change), despite a negative trend of Euro/Dollar exchange in the third quarter, which fully compensated the benefits recorded in the first half of the year. On a consolidation like-for-like basis, consolidated net revenues related to the first nine months of the year stood at €448,775 thousand, up 6.4% compared to the same period of the previous year (up 6.3% at constant Euro/Dollar exchange rate).
| nine months ended | Change | |||||
|---|---|---|---|---|---|---|
| 30.09.2017 | % | 30.09.2016 | % | % | ||
| Italy | 41.589 | 9,2% | 39.926 | 9,5% | 1.663 | 4,2% |
| EMEA (except Italy) | 196.137 | 43,5% | 181.509 | 43,0% | 14.628 | 8,1% |
| Total EMEA (*) | 237,726 | 52.7% | 221,435 | 52.5% | 16,291 | 7.4% |
| North America | 133,772 | 29.7% | 131,754 | 31.2% | 2,018 | 1.5% |
| Latin America | 20,106 | 4.5% | 20,517 | 4.9% | (411) | (2.0%) |
| Asia & Pacific (including China) | 59,107 | 13.1% | 48,047 | 11.4% | 11,060 | 23.0% |
| Total revenues | 450,711 | 100.0% | 421,753 | 100.0% | 28,958 | 6.9% |
The following table shows the breakdown by geographical area of Group revenues achieved in the first nine months of 2017 compared with the same period of 2016:
(*) EMEA: Europe, Middle East and Africa.
Since 2017, data related to geographical areas will be disclosed to reflect the actual involvement of each area within the new commercial organisation of the Group. Comparative data as at 30 September 2016 will be disclosed accordingly.
In the first nine months of 2017, a consolidation in EMEA was reported, with 7.4% growth (€237.7 million), as well as a significant growth in APAC, driven by China. North America performed moderately well, with 1.5% growth, above all thanks to the performance of Solution Net Systems in the third quarter and the T&L sector. Latin America continued to improve, with a double-digit growth (+16.1%) in the third quarter, albeit over the nine months, this result was still affected by the negative performance reported in the first quarter of the year.
The booking over the nine-month period, achieved €464.8 million, up by 9.2% compared to the same period of 2016.
The impact of new products on sales for the period amounted to 12.9% (25.6% in the same period of 2016), as the benefits of the sale of new products announced at the end of the quarter had not been included yet.
Gross profit, equal to €212,510 thousand, increased by 9.3% against €194,372 thousand reported in the same period of the previous year (+9.5% at constant Euro/Dollar exchange rate), while its impact on revenues increased by one percentage point, from 46.1% in the first nine months of 2016 to 47.1% in the first nine months of 2017 (47.3% in the analysis at constant Euro/Dollar exchange rate), due mainly to sales volumes, the improvement of sales mix and efficiencies of the main components of cost of goods sold.
Operating costs, amounting to €147,530 thousand, increased by 5.1% (+4,9% at constant Euro/Dollar exchange rate), compared to €140,436 thousand of the same period in 2016, albeit improving in their impact on turnover, from 33.3% to 32.7%. This trend reflects an increase in costs for Research and Development by 8.9%, achieving €39,889 thousand, with 8.9% impact on revenues over 8.7% reported in the first nine months of 2016.
EBITDA reported a significant growth of 16.9%, from €66,639 thousand of the previous year to €77,905 thousand (+17.7% at constant Euro/Dollar exchange rate), while the impact on revenues (EBITDA margin) rose to 17.3% (17.4% at constant Euro/Dollar exchange rate), compared to 15.8%, thanks to improved gross profit, a reduction in general and administrative expenses and a different seasonal effect of distribution expenses.
The Operating Result (EBIT) increased by 18.4%, from €52,750 thousand in the previous year to €62,466 thousand (+19.5% at constant Euro/Dollar exchange rate).
Group net profit amounted to €45,071 thousand, 10.2% (+11.7% at constant Euro/Dollar exchange rate) higher than the profit obtained in the same period of the previous year, equal to €40,882 thousand.
The following table compares the main operating results achieved in the third quarter of 2017 with the same period of 2016.
| 3Q 2017 | % | 3Q 2016 | % | change | % | |
|---|---|---|---|---|---|---|
| Total revenues | 151,403 | 100.0% | 139,911 | 100.0% | 11,492 | 8.2% |
| EBITDA | 26,080 | 17.2% | 21,682 | 15.5% | 4,398 | 20.3% |
| Operating result (EBIT) | 21,277 | 14.1% | 17,437 | 12.5% | 3,840 | 22.0% |
| Group net profit/loss | 15,774 | 10.4% | 14,706 | 10.5% | 1,068 | 7.3% |
In the third quarter of 2017, total revenues amounted to €151.4 million, an increase of 8.2% compared to the third quarter of 2016 (+10.7% at constant Euro/Dollar exchange rate). On a consolidation like-for-like basis, consolidated net revenues would stand at €149.5 million in the third quarter, up 6.8% compared to the same period of the previous year (+9.3% at constant Euro/Dollar exchange rate).
The following table shows the breakdown by geographical area of Group revenues achieved in the third quarter of 2017 compared with the same period of 2016:
| Change | |||||
|---|---|---|---|---|---|
| 3Q 2017 | % | 3Q 2016 | % | % | |
| 13.906 | 9,2% | 12.955 | 9,3% | 951 | 7,3% |
| 65.164 | 43,0% | 60.302 | 43,1% | 4.862 | 8,1% |
| 79,070 | 52.2% | 73,257 | 52.4% | 5,813 | 7.9% |
| 43,354 | 28.6% | 44,587 | 31.9% | (1,233) | (2.8%) |
| 8,152 | 5.4% | 7,020 | 5.0% | 1,132 | 16.1% |
| 20,827 | 13.8% | 15,047 | 10.8% | 5,780 | 38.4% |
| 151,403 | 100.0% | 139,911 | 100.0% | 11,492 | 8.2% |
(*) EMEA: Europe, Middle East and Africa.
Revenues recorded in the third quarter continued to highlight a positive trend despite the typical seasonality effect of the period, the negative performance of the Euro/Dollar exchange and the postponement of some important launches of new products to the fourth quarter. The recorded growth is mainly related to Manufacturing and T&L sectors, thanks to significant orders made by some important customers and China's excellent performance. Revenues grew in EMEA, which benefited also of our recent acquisition of Soredi Touch System, in Asia & Pacific driven by China and also in Latin America. The positive feedback from customers on the new products launched over the quarter, including the new Android terminal with Joya Touch A6 wireless charging, the new Magellan bench scanners and the new Quickscan Lite manual reader, intended for the Retail sector, as well as the new Powerscan 9100 industrial reader, equipped with the innovative "scan engine", developed in house, suggests a positive performance in the last quarter of the year as well.
The booking of the quarter amounted to €142 million, up 2.9% compared to the third quarter of 2016, as it was still not benefiting from the sale of the new products announced at the end of the quarter.
The impact on turnover of new products in the third quarter of 2017 amounted to 8.4% (20.4% in the same period of 2016).
EBITDA amounted to €26,080 thousand, an increase of 20.3% (+19.1% at constant Euro/Dollar exchange rate), compared to the third quarter of 2016, with an impact on revenues from 15.5%, recorded in the third quarter of 2016, to 17.2%, recorded in the third quarter of 2017 (16.7% at constant Euro/Dollar exchange rate), primarily thanks to improved Gross profit.
The operating sectors, as periodically remeasured by the top management, are defined in the following divisions:
Revenues in the nine months and in the third quarter and EBITDA related to nine months are broken down hereunder by Divisions.
| nine months ended | Change | |||||
|---|---|---|---|---|---|---|
| 30.09.2017 | % | 30.09.2016 (*) | % | % | ||
| Datalogic | 417,745 | 92.7% | 390,962 | 92.7% | 26,783 | 6.9% |
| Solution Net Systems (*) | 19,307 | 4.3% | 13,781 | 3.3% | 5,526 | 40.1% |
| Informatics | 16,366 | 3.6% | 18,559 | 4.4% | (2,193) | (11.8%) |
| Adjustments | (2,707) | (0.6%) | (1,549) | (0.4%) | (1,158) | 74.8% |
| Total revenues | 450,711 | 100.0% | 421,753 | 100.0% | 28,958 | 6.9% |
(*) Data for 2016 have been restated on the basis of the new operational structure
| Third Quarter | Change | |||||
|---|---|---|---|---|---|---|
| 2017 | % | 2016 (*) | % | % | ||
| Datalogic | 138,567 | 91.5% | 130,787 | 93.5% | 7,780 | 5.9% |
| Solution Net Systems (*) | 8,732 | 5.8% | 3,829 | 2.7% | 4,903 | 128.1% |
| Informatics | 5,127 | 3.4% | 5,807 | 4.2% | (680) | (11.7%) |
| Adjustments | (1,023) | (0.7%) | (512) | (0.4%) | (511) | 99.8% |
| Total revenues in third quarter |
151,403 | 100.0% | 139,911 | 100.0% | 11,493 | 8.2% |
(*) Data for 2016 have been restated on the basis of the new operational structure
| nine months ended | Change | |||||
|---|---|---|---|---|---|---|
| 30.09.2017 | % | 30.09.2016 (*) | % | % | ||
| Datalogic | 75,159 | 18.0% | 68,893 | 17.6% | 6,266 | 9.1% |
| Solution Net Systems (*) | 2,840 | 14.7% | (1,247) | (9.0%) | 4,087 | n.a. |
| Informatics | (115) | (0.7%) | (938) | (5.1%) | 823 | n.a. |
| Adjustments | 21 | (0.8%) | (69) | 4.5% | 90 | n.a. |
| Total EBITDA | 77,905 | 17.3% | 66,639 | 15.8% | 11,266 | 16.9% |
(*) Data for 2016 have been restated on the basis of the new operational structure
In the third quarter of the year, the Datalogic Division recorded a turnover of €138.6 million, up 5.9% (+8.1% at constant Euro/Dollar exchange rate) compared to the third quarter of 2016, with a very positive trend in EMEA and in APAC, especially in China, where a growth of over 80% was recorded, and benefited from the contribution of Soredi Touch Systems, equal to around €2 million. In North America, the T&L Division reported a double-digit growth, while the Retail sector was affected by the postponement in the launching of new products and some important projects.
In the first nine months of 2017, this Division reported a turnover of €417.7 million, up 6.9% (+6.7% at constant Euro/Dollar exchange rate), compared to the same period of 2016. EBITDA related to the Division amounted to €75.2 million, up 9.1%, with an impact on sales of 18%.
| Change | ||||||
|---|---|---|---|---|---|---|
| 30.09.2017 % 30.09.2016 % |
% | |||||
| Retail | 204,790 | 49.0% | 207,413 | 53.1% | (2,623) | -1.3% |
| Manufacturing | 110,409 | 26.4% | 100,190 | 25.6% | 10,219 | 10.2% |
| Transportation & Logistics | 43,876 | 10.5% | 40,168 | 10.3% | 3,708 | 9.2% |
| Healthcare | 20,789 | 5.0% | 14,584 | 3.7% | 6,205 | 42.5% |
| Channel (unallocated) (*) | 37,881 | 9.1% | 28,606 | 7.3% | 9,275 | 32.4% |
| Total revenues | 417,745 | 100.0% | 390,961 | 100.0% | 26,784 | 6.9% |
Below is the breakdown of the Datalogic Division's revenues, divided by business sector:
(*) The Channel sector (unallocated) includes revenues not directly attributable to the 4 areas identified.
The Retail sector reported a slight decrease (-1.3%) compared to last year, mainly due to a slowdown in sales in North America, due to the postponement of some projects with key customers. EMEA and China confirmed the growth trend.
An expansion is confirmed in the Manufacturing sector, with 10.2% growth compared to the first nine months of last year. The increase was driven by China, where sales grew by about 70% compared to the previous year.
After a non-positive performance for the first months of the year, the Transportation & Logistics sector recorded a double-digit growth in the following quarters, mainly driven by North America and China. In the nine months of the year, growth was equal to 9.2% compared to 2016.
The Healthcare sector continues to have the strongest growth in percentage terms, or 42.5% over last year. This is mainly due to North America, where revenue has more than doubled.
Very positive performance should be also highlighted in sales through distribution channel, especially to small and medium-sized customers (SMEs), not directly attributable to any of the four main sectors, and that reported 32.4% growth compared to 2016.
The Solution Net Systems Division recorded an excellent performance in the quarter, with a turnover of €8.7 million, more than doubled compared to €3.8 million recorded in the third quarter of 2016 (+128.1%, +138.1% at constant Euro/Dollar exchange rates), thanks to important orders in addition to the order in place made by the Royal Mail.
In the first nine months of 2017, the Division recorded a turnover of €19.3 million, highlighting 40.1% growth compared to the same period of 2016 (+41% at constant Euro/Dollar exchange rate). EBITDA related to the Division amounted to €2.8 million (negative by 1.2 million in the same period of 2016), with an impact on sales of 14.7%.
In the second quarter, the Informatics Division recorded a turnover of €5.1 million, down 11.7% (-7.5% at constant Euro/Dollar exchange rate) compared to the third quarter of 2016.
In the first nine months of 2017, this Division reported a turnover of €16.4 million, down 11.8% (-12.2% at constant Euro/Dollar exchange rate), compared to the same period of 2016. EBITDA of the Division is negative by €0.1 million and it is improving compared to the same period of 2016 (negative by €0.9 million).
The following table shows the main financial and equity items as at 30 September 2017, for the Datalogic Group, compared with 31 December 2016 and 30 September 2016.
| 30.09.2017 | 31.12.2016 | 30.09.2016 | |
|---|---|---|---|
| Net intangible assets | 43,464 | 51,997 | 50,777 |
| Goodwill | 176,937 | 188,934 | 178,597 |
| Net tangible assets | 68,108 | 72,082 | 67,488 |
| Unconsolidated equity investments | 12,013 | 6,928 | 6,088 |
| Other non-current assets | 54,892 | 51,807 | 51,766 |
| Non-current capital | 355,414 | 371,748 | 354,716 |
| Net trade receivables from customers | 93,141 | 75,477 | 72,626 |
| Amounts due to suppliers | (90,846) | (104,585) | (86,714) |
| Inventories | 87,521 | 82,344 | 90,399 |
| Net working capital, trading | 89,816 | 53,236 | 76,311 |
| Other current assets | 37,570 | 34,184 | 36,147 |
| Other current liabilities and provisions for short term risks | (76,299) | (77,625) | (68,763) |
| Net working capital | 51,087 | 9,795 | 43,695 |
| Other M/L term liabilities | (30,387) | (30,836) | (26,055) |
| Employee severance indemnity | (6,745) | (6,647) | (6,661) |
| Provisions for risks | (13,674) | (11,169) | (10,469) |
| Net invested capital | 355,695 | 332,891 | 355,226 |
| Total Shareholders' Equity | (340,519) | (336,394) | (317,649) |
| Net financial position | (15,176) | 3,503 | (37,577) |
As at 30 September 2017, the net working capital in the trading segment amounted to €89.8 thousand, (€88.6 million on a like-for-like basis), an increase of €36.6 million compared to 31 December 2016, and of €13.5 million compared to the same period in the previous year.
The increase in this item, compared to 31 December 2016, is primarily attributable to the increase in customer trade receivables. Trade payables and inventories show improvement over the same period of the prior year, while the difference with respect to 31 December 2016 is instead purely due to seasonal effects.
| 30.09.2017 | 31.12.2016 | 30.09.2016 |
|---|---|---|
| 238,716 | 146,930 | 76,499 |
| 12 | 47 | 46 |
| 12 | 47 | 46 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
| 0 | 0 | |
| 238,728 | 146,977 | 76,545 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
| 0 | 0 | 0 |
| 151 | 212 | 193 |
| 51,463 | 30,180 | 24,196 |
| 2,956 | 5,878 | 2,992 |
| 5 | 37 | 0 |
| 22 | 248 | 269 |
| 2,929 | 5,593 | 2,723 |
| 54,570 | 36,270 | 27,381 |
| (184,158) | (110,707) | (49,164) |
| 118,349 | ||
| 31,716 108 |
||
| 56 | ||
| 52 | ||
| 0 | ||
| 86,741 | ||
| 37,577 | ||
| 229,755 31,171 750 0 750 199,334 15,176 |
139,321 32,117 0 0 0 0 107,204 (3,503) |
As at 30 September 2017, the net financial debt/(net financial position) is broken down as follows:
The Net Financial Position, as at 30 September 2017, was negative by €15.2 million, down by €18.7 million compared to 31 December 2016 (positive by €3.5 million) and up by 22.4 million, compared to 30 September 2016.
The reconciliation between the Parent Company's shareholders' equity and net profit and the corresponding consolidated amounts is as shown below:
| 30 September 2017 | 31 December 2016 | ||||
|---|---|---|---|---|---|
| Total equity | Period results | Total equity | Period results | ||
| Parent Company shareholders' equity and profit | 287,881 | 21,246 | 291,677 | 52,334 | |
| Difference between consolidated companies' shareholders' equity and their carrying value in the Parent Company's financial statements; effect of equity-based valuation |
114,623 | 50,728 | 111,061 | 51,183 | |
| Reversal of dividends | (27,657) | (53,387) | |||
| Amortisation of intangible assets "business combination" |
(5,827) | (5,827) | |||
| Effect of acquisition under common control | (31,733) | (31,733) | |||
| Elimination of capital gain on sale of business branch |
(18,479) | 186 | (18,665) | ||
| Effect of eliminating intercompany transactions | (13,410) | 679 | (17,700) | (4,231) | |
| Reversal of write-downs and capital gains on equity investments |
5,517 | 5,517 | (604) | ||
| Sale of know-how | (7) | (7) | |||
| Goodwill impairment | (1,395) | (1,395) | |||
| Other | (1,226) | (27) | (1,193) | (61) | |
| Deferred taxes | 4,575 | (84) | 4,659 | 612 | |
| Group shareholders' equity | 340,519 | 45,071 | 336,394 | 45,846 |
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Financial income/(expenses) | (2,208) | (1,296) | (912) |
| Foreign exchange differences | (2,259) | (548) | (1,711) |
| Bank expenses | (1,600) | (1,340) | (260) |
| Other | 367 | 33 | 334 |
| Total Net financial income (expenses) | (5,700) | (3,151) | (2,549) |
The financial management was negative by €5.7 million, compared to the negative result of €3.2 million reported in the same period of the previous year, mainly by effect of the performance of exchange differences (losses amounting to €2.3 million compared to losses equal to €0.5 million in the first nine months of 2016), connected with the effects, on net Group balances, of the depreciation of the US Dollar and the increase in financial expenses due to the higher gross indebtedness.
Transactions with related parties, as disclosed in the financial statements, and described in detail in the related Notes to the Income Statements items, to which reference is made, cannot be quantified as atypical or unusual, given that they can be included in the normal business of the Group companies, and are governed at arm's length.
As regards the Procedure for Transactions with Related Parties, reference is made to the documents published on the website www.datalogic.com, in the Investor Relations section.
On 13 April 2017, Datalogic S.p.A. signed an agreement for a new credit line worth €250 million and maturing in 2023. The loan granted was partly intended for an early redemption, compared to the original maturity, of the existing credit line (€126 million), and partly to support the ordinary activities and development of the Group.
On 4 May 2017, the Extraordinary Shareholders' Meeting approved the amendments, amongst other, to Articles 6 and 9 of the Corporate By-Laws, mainly aimed at introducing the concept of "enhanced voting rights" for long-term shareholders of the Company, pursuant to Art. 127 quinquies of the Legislative Decree 58/1998 ("T.U.F."), introduced by Art. 20, par. 1 bis, of the Law Decree no. 91/2014, converted into Law no. 116/2014 ("Competitiveness Decree").
On 6 June 2017, a binding agreement was entered, finalised on 6 July, for the acquisition of 100% share capital of the German company Soredi Touch Systems GmbH, leader in technologies for terminals, especially forklifts terminals. This transaction envisaged a total maximum financial commitment for Datalogic, within 2021, of €10 million, of which €8 million cash and €2 million treasury shares.
As already reported in the first two quarters, the third quarter confirmed the growth trend of revenues with respect to the previous year. Consistently with its customer-oriented business model, the Group is planning to continue its investments in R&D and in commercial structures. The positive feedback from customers in relation to new products launched in the quarter, including the new Android terminal with Joya Touch A6 wireless charging, the new Magellan bench scanners and the new Quickscan Lite manual reader, intended for the Retail sector, as well as the new Powerscan 9100 industrial reader, equipped with the innovative "scan engine", developed in house, suggests a positive performance for the rest of the year as well.
As for the last months of the year, in a substantially stable macroeconomic scenario, the Group expects to confirm the growth trend of revenues recorded in the first nine months of the year, and to continue the streamlining of production processes for the purposes of consolidating the improvement of profitability over the previous year.
| ASSETS (Euro/000) | Note | 30.09.2017 | 31.12.2016 |
|---|---|---|---|
| A) Non-current assets (1+2+3+4+5+6+7) | 386.585 | 403.865 | |
| 1) Tangible assets | 68.108 | 72.082 | |
| land | 1 | 7.763 | 8.218 |
| buildings | 1 | 29.529 | 31.014 |
| other assets | 1 | 28.901 | 30.175 |
| assets in progress and payments on account | 1 | 1.915 | 2.675 |
| of which from related parties | 182 | ||
| 2) Intangible assets | 220.401 | 240.931 | |
| goodwill | 2 | 176.937 | 188.934 |
| development costs | 2 | 2.906 | 4.302 |
| other | 2 | 35.499 | 43.534 |
| assets in progress and payments on account | 2 | 5.059 | 4.161 |
| 3) Equity investments in associates | 3 | 3.629 | 2.214 |
| 4) Financial assets | 39.555 | 35.721 | |
| equity investments | 5 | 8.384 | 4.714 |
| securities | 5 | 0 | 0 |
| other | 5 | 31.171 | 31.007 |
| 5) Loans | 5 | 1.110 | |
| 6) Trade and other receivables | 7 | 2.257 | 2.394 |
| 7) Deferred tax assets | 13 | 52.635 | 49.413 |
| B) Current assets (8+9+10+11+12+13+14) | 456.960 | 338.982 | |
| 8) Inventories | 87.521 | 82.344 | |
| raw and ancillary materials and consumables | 8 | 35.844 | 29.954 |
| work in progress and semi-finished products | 8 | 28.648 | 25.883 |
| finished products and goods | 8 | 23.029 | 26.507 |
| 9) Trade and other receivables | 7 | 113.004 | 91.526 |
| trade receivables | 7 | 93.141 | 75.477 |
| trade receivables from third parties | 7 | 92.347 | 74.490 |
| trade receivables from associates | 7 | 794 | 979 |
| trade receivables from related parties | 7 | 0 | 8 |
| other receivables - accrued income and prepaid expenses | 7 | 19.863 | 16.049 |
| of which from related parties | 874 | 75 | |
| 10) Tax receivables | 9 | 17.707 | 18.135 |
| of which to the parent company | 5.782 | 8.010 | |
| 11) Financial assets | 5 | 0 | 0 |
| 12) Loans | 0 | 0 | |
| 13) Financial assets - Derivative instruments | 6 | 0 | 0 |
| 14) Cash and cash equivalents | 10 | 238.728 | 146.977 |
| Total assets (A+B) | 843.545 | 742.847 |
| LIABILITIES (Euro/000) | Note | 30.09.2017 | 31.12.2016 |
|---|---|---|---|
| A) Total shareholders' equity (1+2+3+4+5) | 11 | 340.519 | 336.394 |
| 1) Share capital | 11 | 148.291 | 146.291 |
| 2) Reserves | 11 | 17.314 | 42.817 |
| 3) Profits (losses) of previous years | 11 | 129.843 | 101.440 |
| 4) Group profit (loss) for the period/year | 11 | 45.071 | 45.846 |
| 5) Minority interests | 11 | 0 | 0 |
| B) Non-current liabilities (6+7+8+9+10+11+12) | 281.311 | 187.973 | |
| 6) Financial payables | 12 | 230.505 | 139.321 |
| 7) Financial liabilities - Derivative instruments | 6 | ||
| 8) Tax payables | 9 | 43 | 44 |
| 9) Deferred tax liabilities | 13 | 26.684 | 26.498 |
| 10) Post-employment benefits | 14 | 6.745 | 6.647 |
| 11) Provisions for risks and charges | 15 | 13.674 | 11.169 |
| 12) Other liabilities | 16 | 3.660 | 4.294 |
| C) Current liabilities (13+14+15+16+17) | 221.715 | 218.480 | |
| 13) Trade and other payables | 16 | 139.632 | 151.494 |
| trade payables | 16 | 90.846 | 104.585 |
| trade payables to third parties | 16 | 90.744 | 104.058 |
| trade payables to parent company | 16 | 0 | 106 |
| trade payables to associates | 16 | 72 | 24 |
| trade payables to related parties | 16 | 30 | 397 |
| other payables - accrued liabilities and deferred income | 16 | 48.786 | 46.909 |
| 14) Tax payables | 9 | 18.619 | 21.032 |
| of which to the parent company | 8.698 | 15.114 | |
| 15) Provisions for risks and charges | 15 | 8.894 | 9.684 |
| 16) Financial liabilities - Derivative instruments | 6 | 5 | 37 |
| 17) Financial payables | 12 | 54.565 | 36.233 |
| Total liabilities (A+B+C) | 843.545 | 742.847 |
| (Euro/000) | Note | 30.09.2017 | 30.09.2016 |
|---|---|---|---|
| 1) Total revenues | 17 | 450.711 | 421.753 |
| of which from related parties and associates | 4.258 | 4.218 | |
| 2) Cost of goods sold | 18 | 238.517 | 227.467 |
| of which non-recurring | 18 | 316 | 86 |
| of which from related parties and associates | 657 | 243 | |
| Gross profit (1-2) | 212.194 | 194.286 | |
| 3) Other operating revenues | 19 | 2.005 | 2.321 |
| 4) R&D expenses | 18 | 40.121 | 36.715 |
| of which non-recurring | 18 | 153 | 0 |
| of which amortisation, depreciation and write-downs pertaining to acquisitions |
79 | 79 | |
| of which from related parties and associates | 18 | 45 | 8 |
| 5) Distribution expenses | 18 | 73.225 | 72.423 |
| of which non-recurring | 18 | 0 | 164 |
| of which from related parties and associates | 8 | 72 | |
| 6) General and administrative expenses | 18 | 36.937 | 33.971 |
| of which non-recurring | 18 | 389 | 0 |
| of which amortisation, depreciation and write-downs pertaining to acquisitions |
18 | 3.582 | 3.577 |
| of which from related parties and associates | 208 | 1052 | |
| 7) Other operating expenses | 18 | 1.450 | 748 |
| of which non-recurring | 0 | (399) | |
| Total operating costs | 151.733 | 143.857 | |
| Operating result | 62.466 | 52.750 | |
| 8) Financial income | 20 | 23.916 | 12.769 |
| 9) Financial expenses | 20 | 29.616 | 15.920 |
| Net financial income (expenses) (8-9) | (5.700) | (3.151) | |
| 10) Profits from associates | 3 | (1) | (466) |
| Profit/(loss) before taxes from the operating assets | 56.765 | 49.133 | |
| Income tax | 21 | 11.694 | 8.251 |
| Profit/(loss) for the period | 45.071 | 40.882 | |
| Basic earnings/(loss) per share (€) | 22 | 0,7755 | 0,7026 |
| Diluted earnings/(loss) per share (€) | 22 | 0,7755 | 0,7026 |
| (Euro/000) | Note | 30.09.2017 | 30.09.2016 |
|---|---|---|---|
| Net profit/(loss) for the period | 45.071 | 40.882 | |
| Other components of the statement of comprehensive income: | |||
| Other components of the statement of comprehensive income which will | |||
| be restated under profit/(loss) for the year: | |||
| Profit/(loss) on cash flow hedges | 11 | (1.011) | 49 |
| Profit/(loss) due to translation of the accounts of foreign companies | 11 | (17.552) | (4.062) |
| Profit/(loss) on exchange rate adjustments for financial assets available | 11 | 4.215 | (587) |
| for sale | |||
| Reserve for exchange rate adjustment | 11 | (11.155) | (1.982) |
| Total other components of the statement of comprehensive income | (25.503) | (6.582) | |
| which will be restated under profit/(loss) for the year | |||
| Other components of the statement of comprehensive income which will | |||
| not be restated under profit/(loss) for the year: | |||
| Actuarial (loss)/gain on defined-benefit plans | |||
| of which tax effect | |||
| Total other components of the statement of comprehensive income | |||
| which will not be restated under profit/(loss) for the year | 0 | 0 | |
| Total profit/(loss) of Comprehensive Income Statement | (25.503) | (6.582) | |
| Total net profit/(loss) for the period | 19.568 | 34.300 | |
| Attributable to: | |||
| Parent company shareholders | 19.568 | 34.300 | |
| Minority interests | 0 | 0 |
| (Euro/000) | Note | 30.09.2017 | 30.09.2016 |
|---|---|---|---|
| Pre-tax profit | 56.765 | 49.133 | |
| Depreciation of tangible assets and write-downs | 1, 2 | 7.649 | 6.629 |
| Amortisation of intangible assets and write-downs | 1, 2 | 6.932 | 7.409 |
| Capital losses from sale of assets | 18 | 76 | 5 |
| Capital gains from sale of assets | 19 | (4) | (132) |
| Change in provisions for risks and charges (*) | 15 | 1.421 | (3.811) |
| Effect of change in provisions for risks and charges | 1.197 | 188 | |
| Change in employee benefits reserve | 14 | 98 | (153) |
| Bad debt provisions | 18 | 76 | 78 |
| Net financial expenses including exchange rate differences | 20 | 4.077 | 3.039 |
| Net financial income including exchange rate differences | 20 | (636) | (436) |
| Foreign exchange differences | 20 | 2.259 | 548 |
| Adjustments to value of financial assets | 3 | 1 | 466 |
| Cash flow generated (absorbed) from operations before changes in working | |||
| capital | 79.911 | 62.963 | |
| Change in trade receivables (including provision) (*) | 7 | (16.920) | (3.939) |
| Change in final inventories (*) | 8 | (3.630) | (20.922) |
| Change in current assets (*) | 7 | (3.762) | (1.730) |
| Change in other medium-/long-term assets | 7 | 137 | (103) |
| Change in trade payables (*) | 16 | (14.475) | (14.997) |
| Change in other current liabilities (*) | 16 | 1.786 | 1.628 |
| Other medium/long-term liabilities | 16 | (634) | 383 |
| Commercial foreign exchange differences | 20 | 3.257 | (308) |
| Foreign exchange effect of working capital | (1.708) | 378 | |
| Cash flow generated (absorbed) from operations after changes in working capital | 43.962 | 23.353 | |
| Change in tax | (16.710) | (12.298) | |
| Foreign exchange effect of tax | (3.298) | (528) | |
| Interest paid and banking expenses | 20 | (3.440) | (2.603) |
| Cash flow generated (absorbed) from operations (A) | 20.514 | 7.924 | |
| Increase in intangible assets excluding exchange rate effect | 2 | (2.568) | (2.738) |
| Decrease in intangible assets excluding exchange rate effect | 2 | 212 | 132 |
| Increase in tangible assets excluding exchange rate effect | 1 | (6.658) | (6.582) |
| Decrease in tangible assets excluding exchange rate effect | 1 | 930 | 130 |
| Change in unconsolidated equity investments | 5 | 0 | 53 |
| Acquisition of an equity investment | (5.866) | ||
| Cash flow generated (absorbed) from investments (B) | (13.950) | (9.005) | |
| Change in LT/ST financial receivables | 5 | (129) | 563 |
| Change in short-term and medium-/long-term financial debt (*) | 12, 6 | 107.545 | (33.523) |
| Financial foreign exchange differences | 20 | (5.517) | (240) |
| Purchase/sale of treasury shares (*) | 11 | 0 | (368) |
| Change in reserves Exchange rate effect of financial assets/liabilities, equity and tangible and intangible assets (*) |
11, 1, 2 | 827 | (384) |
| Dividend payment | 11 | (17.443) | (14.543) |
| Cash flow generated (absorbed) by financial activity (C) | 85.283 | (48.495) | |
| Net increase (decrease) in available cash (A+B+C) (*) | 10 | 91.847 | (49.576) |
| Net cash and cash equivalents at beginning of period (Note 10) | 10 | 146.718 | 126.121 |
| Net cash and cash equivalents at end of period (Note 10) | 10 | 238.565 | 76.545 |
| Description | Share capital and capital |
Reserves of Statement of Comprehensive Income | Retained earnings | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| reserves Total share capital and capital reserves |
Cash-flow hedge reserve |
Translation reserve |
Reserve for exchange rate adjustment |
Actuarial gains/(losses) reserve |
Held-for-sale financial assets reserve |
Total Reserves of Statement of Comprehensive Income |
Earnings carried forward |
Capital contribution reserve |
Legal reserve |
IAS reserve |
Total | Profit for the year |
Total Group shareholders' equity |
|
| 01.01.2016 | 146.659 | (92) | 22.168 | 13.404 | (371) | 509 | 35.618 | 59.878 | 958 | 5.917 | 8.683 | 75.436 | 40.547 | 298.260 |
| Allocation of earnings | 0 | 0 | 40.386 | 161 | 40.547 | (40.547) | 0 | |||||||
| Dividends | 0 | 0 | (14.543) | (14.543) | (14.543) | |||||||||
| Translation reserve | 0 | 0 | 0 | 0 | ||||||||||
| Change in IAS reserve | 0 | 0 | 0 | 0 | ||||||||||
| Sale/purchase of treasury shares | (368) | 0 | 0 | (368) | ||||||||||
| Other changes | 0 | 0 | 0 | |||||||||||
| Profit/(loss) as at 30.09.2016 | 0 | 0 | 0 | 40.882 | 40.882 | |||||||||
| Total other components of the statement of comprehensive income |
49 | (4.062) | (1.982) | (587) | (6.582) | 0 | (6.582) | |||||||
| 30.09.2016 | 146.291 | (43) | 18.106 | 11.422 | (371) | (78) | 29.036 | 85.721 | 958 | 6.078 | 8.683 | 101.440 | 40.882 | 317.649 |
| Description | Share capital and capital reserves |
Reserves of Statement of Comprehensive Income | Retained earnings | |||||||||||
| Total share capital and capital reserves |
Cash-flow hedge reserve |
Translation reserve |
Reserve for exchange rate adjustment |
Actuarial gains/(losses) reserve |
Held-for-sale financial assets reserve |
Total Reserves of Statement of Comprehensive Income |
Earnings carried forward |
Capital contribution reserve |
Legal reserve |
IAS reserve |
Total | Profit for the year |
Total Group shareholders' equity |
|
| 01.01.2017 | 146.291 | (28) | 25.436 | 17.290 | (371) | 490 | 42.817 | 85.721 | 958 | 6.078 | 8.683 | 101.440 | 45.846 | 336.394 |
| Allocation of earnings | 0 | 0 | 45.846 | 45.846 | (45.846) | 0 | ||||||||
| Dividends | 0 | (17.443) | (17.443) | (17.443) | ||||||||||
| Translation reserve | 0 | 0 | 0 | 0 | ||||||||||
| Change in IAS reserve | 0 | 0 | 0 | 0 | ||||||||||
| Sale/purchase of treasury shares | 2.000 | 0 | 0 | 2.000 | ||||||||||
| Other changes | 0 | 65 | (65) | 0 | 0 | |||||||||
| Profit/(loss) as at 30.09.2017 | 0 | 0 | 0 | 45.071 | 45.071 | |||||||||
| Total other components of the statement of comprehensive income |
(1.011) | (17.552) | (11.155) | 4.215 | (25.503) | 0 | (25.503) | |||||||
| 30.09.2017 | 148.291 | (1.039) | 7.884 | 6.135 | (371) | 4.705 | 17.314 | 114.189 | 958 | 6.078 | 8.618 | 129.843 | 45.071 | 340.519 |
Datalogic is the world leader in the markets of automatic data capture and process automation. The company is specialized in the design and production of fixed bar code readers, RFID, mobile computers, detection, measurement and security sensors, vision and laser marking systems.
Its pioneering solutions contribute to increase efficiency and quality of processes in the areas of large-scale distribution, manufacturing, transport & logistics and health, along the entire value chain.
Datalogic S.p.A. (hereinafter "Datalogic", the "Parent Company" or the "Company") is a joint-stock company listed on the STAR segment of Borsa Italiana, with its registered office in Italy. The address of the registered office is Via Candini, 2 - Lippo di Calderara (BO).
The Company is a subsidiary of Hydra S.p.A., which is also based in Bologna and is controlled by the Volta family.
This Interim report on operations as at 30 September 2017 includes the figures of the Parent Company and its subsidiaries (defined hereinafter as the "Group"), as well as its minority interests in associates.
The publication of the Interim report on operations ended 30 September 2017 of the Datalogic Group was authorised by resolution of the Board of Directors dated 13 November 2017.
The Interim report on operations as at 30 September 2017 was prepared pursuant to Art. 154 ter of Italian Legislative Decree no. 58/1998, and to the Consob provisions in this field.
The International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) issued by the International Financial Reporting Interpretations Committee (IFRIC), endorsed by the European Commission and in force when this Report was approved, were applied for the evaluation and measurement of the accounting balances. This Report must therefore be read together with the Consolidated Financial Statements and the Notes as at 31 December 2016, which have been prepared in accordance with the IFRS endorsed by the European Union, approved at the Shareholders' Meeting held on 4 May 2017 and available in the section Investor Relations www.datalogic.com.
The consolidated financial statements include interim reports of the Parent Company and the companies that are directly and/or indirectly controlled by the Parent Company or on which the latter has a significant influence.
Interim reports of subsidiaries were duly adjusted, as necessary, to render them consistent with the accounting criteria of the Parent Company.
The companies included in the scope of consolidation as at 30 September 2017, as disclosed hereunder, were all consolidated on a line-by-line basis.
| Company | Registered office | Share capital | Total Profit/loss for shareholders' the period equity (€/000) (€/000) |
% Ownership |
||
|---|---|---|---|---|---|---|
| Datalogic S.p.A. | Bologna – Italy | Euro | 30,392,175 | 287,881 | 21,246 | |
| Datalogic Real Estate France Sas |
Paris – France | Euro | 2,227,500 | 3,521 | 17 | 100% |
| Datalogic Real Estate Germany GmbH |
Erkenbrechtsweiler Germany |
Euro | 1,025,000 | 1,393 | (2) | 100% |
| Datalogic Real Estate UK Ltd |
Redbourn - England | GBP | 3,500,000 | 4,395 | 96 | 100% |
| Datalogic IP Tech S.r.l. | Bologna – Italy | Euro | 65,677 | 10,632 | 8,231 | 100% |
| Informatics Holdings Inc. |
Plano Texas - Usa | \$USA | 9,996,000 | 14,402 | (345) | 100% |
| Wasp Barcode Technologies Ltd |
Redbourn - England | GBP | - | 150 | 51 | 100% |
| Datalogic Automation Asia Ltd. |
Hong-Kong - China | HKD | 7,000,000 | (232) | 183 | 100% |
| Datalogic (Shenzhen) Industrial Automation Co. Ltd. |
Shenzhen - China | CNY | 2,136,696 | 3,000 | 1,792 | 100% |
| Datalogic Hungary Kft | Fonyod-Hungary | HUF | 3,000,000 | 2,600 | 702 | 100% |
| Solution Net Systems, Inc. |
Quakertown, PA - USA | USD | 6,959 | 1,662 | 100% | |
| Datalogic S.r.l. | Bologna – Italy | Euro | 10,000 | 154,272 | 14,679 | 100% |
| Datalogic ADC HK Ltd. | Hong-Kong - China | HKD | 100,000 | 84 | (13) | 100% |
| Datalogic Slovakia S.r.o. |
Trnava-Slovakia | Euro | 66,388 | 7,616 | 7,543 | 100% |
| Datalogic USA Inc. | Eugene OR-Usa | \$USA | 100 | 74,887 | 4,505 | 100% |
| Datalogic do Brazil Ltda. |
Sao Paulo - Brazil | R\$ | 159,525 | (3,133) | (1,361) | 100% |
| Datalogic Tecnologias de Mexico S.de r.l.de c.v. |
Colonia Cuauhtemoc Mexico |
\$USA | - | 36 | 14 | 100% |
| Datalogic Scanning Eastern Europe GmbH |
Darmstadt-Germany | Euro | 25,000 | 4,612 | 46 | 100% |
| Datalogic Australia Pty Ltd |
Mount Waverley (Melbourne)-Australia |
\$AUD | 3,188,120 | 596 | 270 | 100% |
| Datalogic Vietnam LLC | Vietnam | USD | 3,000,000 | 74,889 | 17,033 | 100% |
| Datalogic Singapore Asia Pacific Pte Ltd. |
Singapore | SGD | 100,000 | 1,812 | 583 | 100% |
| SOREDI Touch Systems GmbH |
Olching (Munich)- Germany |
Euro | 25,000 | 1,699 | 76 | 100% |
The following companies were consolidated at equity as at 30 September 2017:
| Company | Registered office |
Share capital | Total shareholders' equity (€/000) |
Profit/loss for the period (€/000) |
% Ownership |
|
|---|---|---|---|---|---|---|
| Laservall Asia Co. Ltd | Hong-Kong - China |
HKD | 2,860,000 | 3,174 | (2) | 50% |
| Suzhou Mobilead Electronic Technology Co, Ltd (*) |
China | CNY | 13,262,410 | n.a. | n.a. | 25% |
| CAEN RFID S.r.l. (*) | Viareggio LU - Italy |
Euro | 150,000 | n.a. | n.a. | 20% |
(*) Financial position not available as at 30 September 2017
The following companies were consolidated at cost as at 30 September 2017:
| Company | Registered office | Share capital | Total shareholders' equity (€/000) |
Profit/loss for the period (€/000) |
% Ownership |
|
|---|---|---|---|---|---|---|
| Datasensor Gmbh | Otterfing – Germany | Euro | 150,000 | 0 | (3) | 30% |
| Datalogic Automation AB | Malmö, Sweden | KRS | 100,000 | 486 | 155 | 20% |
| Specialvideo S.r.l. | Imola - Italy | Euro | 10,000 | 380 | 152 | 40% |
Data are as at 31 December 2016
It is noted that on 6 July 2017, Datalogic S.p.A. finalized the closing for the acquisition of 100% share capital of the German company Soredi Touch Systems GmbH, leader in technologies for terminals, especially forklifts terminals, with registered office in Olching (Munich). As at 30 September 2017, this company was consolidated on a line-by-line basis and the net result considered was related to the 1 July 2017 - 30 September 2016 period (amounting to €76 thousand).
The maximum total investment of Datalogic for the acquisition of Soredi Touch Systems GmbH, amounted to €10 million including the acquired net financial position and the best estimate of earn-outs depending on the achievement of sales and profitability targets to be paid over the next few years. For this transaction, Datalogic wholly acquired the company SOREDI Touch Systems GmbH, as well as the "SOREDI" trademark, recognised under item Intangible assets for €0.4 million.
At closing, Datalogic S.p.A. paid €6 million cash and €2 million treasury shares (equal to 85,215 shares). Datalogic will make the residual payment, equal to €2 million, within 2021.
Since the acquisition is a business combination, the Group has recognised it using the purchase method, pursuant to the revised IFRS 3.
The acquisition took place for a total consideration of €10 million, with ancillary costs, although directly attributable to the combination, not considered as part of the acquisition cost but fully recognised in the income statement, pursuant to the revised IFRS 3.
The preliminary goodwill emerging from this transaction amounted to €7.9 million. It is worth noting that the initial recognition of the business combination, recorded in the third quarter, was temporarily determined as the fair value of assets, liabilities or potential liabilities was still being measured. Moreover, the cost of business combinations was determined in a non-final way. As envisaged by IFRS 3, any possible adjustments shall be recognised within 12 months from the acquisition date.
Details of movements as at 30 September 2017 and 31 December 2016 are as follows:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Land | 7,763 | 8,218 | (455) |
| Buildings | 29,529 | 31,014 | (1,485) |
| Other assets | 28,901 | 30,175 | (1,274) |
| Assets in progress and payments on account | 1,915 | 2,675 | (760) |
| Total | 68,108 | 72,082 | (3,974) |
The decrease in the items "Land" and "Buildings" relates mainly to the sale of the building belonging to Datalogic Real Estate Germany GmbH (€127 thousand and €734 thousand), which generated a loss of €43 thousand recognised in the income statement in the item "Other operating expenses".
The "Other assets" item as at 30 September 2017 mainly includes the following categories: Industrial equipment and moulds (€9,659 thousand), Plant and machinery (€8,636 thousand), Office furniture and machines (€7,056 thousand), Maintenance on third-party assets (€1,143 thousand), General plants related to buildings (€1,860 thousand), Motor vehicles (€100 thousand) and Commercial equipment and demo room (€363 thousand).
The contribution to "Other assets", resulting from the first consolidation of the company Soredi Touch Systems GmbH, amounted to €163 thousand under item "Industrial equipment and moulds" and €25 thousand under item "Motor vehicles".
The increase in this item (€6,276 thousand, including €332 thousand for the acquisition of Soredi Touch Systems GmbH) is mainly due to:
The decrease in the item "Other assets" relates mainly to the depreciation expense for the period (€7,227 thousand), the impairment of improvements to third-party assets and equipment no longer used and the scrapping of assets that are entirely depreciated and no longer used.
The balance of "Assets in progress and payments on account", equal to €1,915 thousand, consists of €448 thousand for investments related to the enlargement of the plant in Hungary and, for the remaining portion, to down payments for equipment, instruments and moulds for normal production activities.
Details of movements as at 30 September 2017 and 31 December 2016 are as follows:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Goodwill | 176,937 | 188,934 | (11,997) |
| Development costs | 2,906 | 4,302 | (1,396) |
| Other | 35,499 | 43,534 | (8,035) |
| Assets in progress and payments on account | 5,059 | 4,161 | 898 |
| Total | 220,401 | 240,931 | (20,530) |
"Goodwill", totalling €176,937 thousand, consisted of the following items:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| CGU Datalogic | 163,977 | 174,750 | (10,773) |
| CGU Informatics | 12,960 | 14,184 | (1,224) |
| Total | 176,937 | 188,934 | (11,997) |
The change in "Goodwill" by comparison with 31 December 2016 is attributable to:
negative change, equal to €19,942 thousand, and related to translation differences, as most of the goodwill is expressed in US Dollars,
positive change, equal to €7,945 thousand, for the preliminary allocation to goodwill of the portion of price related to the company Soredi Touch Systems GmbH and not directly attributable to the fair value of assets and liabilities, but to expectations to obtain a positive contribution in terms of cash flow for an indefinite period. The initial recognition of this business combination was temporarily determined pursuant to IFRS 3 that envisages a period of 12 months during which the measured preliminary amounts can be adjusted.
Goodwill has been allocated to the CGUs (Cash Generating Units) corresponding to the individual companies and/or sub-groups to which they pertain. It should be noted that the format of the CGU related to Goodwill was reviewed according to the new organisational structure that the Group adopted as from 1 January 2017. In particular, according to the corporate reorganisation, assets of ADC (Automatic Data Capture) and IA (Industrial Automation) Divisions were transferred to one single business organisation, on which the corporate business plans are based (Datalogic CGU). The redetermination of CGUs led to no reallocation of Goodwill.
The estimated recoverable value of each CGU, associated with each goodwill item measured, consists of its corresponding value in use.
Value in use is calculated by discounting the future cash flows generated by the CGU – during production and at the time of its retirement – to present value using a certain discount rate, based on the Discounted Cash Flow method.
"Development costs", which amount to €2,906 thousand, consist of specific development projects capitalised when they meet IAS 38 requirements and in compliance with Group policies, which call for the capitalisation only of projects relating to the development of products featuring significant innovation.
The change in "Development costs" by comparison with 31 December 2016 is attributable to:
The "Other" item, amounting to €35,499 thousand, consists primarily of intangible assets acquired through business combinations carried out by the Group, which are specifically identified and valued in the context of purchase accounting. Details are shown in the following table:
| 30.09.2017 | 31.12.2016 | Useful life | |
|---|---|---|---|
| Acquisition of the PSC Group (on 30 November 2006) | 14,137 | 17,273 | |
| PATENTS | 14,137 | 17,273 | 20 |
| Acquisition of Evolution Robotics Retail Inc. (on 1 July 2010) | 1,631 | 2,326 | |
| PATENTS | 271 | 388 | 10 |
| TRADE SECRETS | 1,360 | 1,938 | 10 |
| Acquisition of Accu-Sort Inc. (on 20 January 2012) | 10,486 | 13,675 | |
| PATENTS | 6,202 | 8,088 | 10 |
| TRADE SECRETS | 4,284 | 5,587 | 10 |
| Licence agreement | 3,912 | 4,796 | 5-15 |
| Other | 5,333 | 5,464 | |
| TOTAL OTHER INTANGIBLE ASSETS | 35,499 | 43,534 |
The "Other" item mainly consists of software licenses and includes the Soredi trademark (€396 thousand, net of amortisation).
The "Assets in progress and payments on account" item, equal to €5,059 thousand, is attributable, in the amount of €4,260 thousand, to the capitalisation of costs relating to the R&D projects with the features required by IAS 38 and currently still underway, as well as, in the amount of €799 thousand, to software implementations that are not yet completed.
| 31.12.2016 | Increases | Decreases | Exchange rate diff. |
on transfers |
Share of profit |
30.09.2017 | |
|---|---|---|---|---|---|---|---|
| Associates | |||||||
| Laservall Asia CO. Ltd | 1,588 | (1) | 1,587 | ||||
| CAEN RFID Srl | 550 | 550 | |||||
| Suzhou Mobilead Electronic Technology Co., Ltd. |
(104) | 1,520 | 1,416 | ||||
| Datalogic Automation AB | 2 | 2 | |||||
| Specialvideo Srl | 29 | 29 | |||||
| Datasensor GMBH | 45 | 45 | |||||
| Total associates | 2,214 | 0 | 0 | (104) | 1,520 | (1) | 3,629 |
| TOTAL | 2,214 | 0 | 0 | (104) | 1,520 | (1) | 3,629 |
Equity investments owned by the Group as at 30 September 2017 were as follows:
The change in the item "associates" is due to the following:
The financial statement items coming within the scope of "financial instruments" as defined by IAS/IFRSs are as follows:
| 30.09.2017 | Loans and receivables |
Financial assets at fair value charged to the income statement |
Available for sale | Total |
|---|---|---|---|---|
| Non-current financial assets | 2,257 | 31,171 | 8,384 | 41,812 |
| Financial assets - Equity investments (5) | 8,384 | 8,384 | ||
| Financial assets - Securities | 0 | |||
| Financial assets - Loans | 0 | |||
| Financial assets - Other | 31,171 | 31,171 | ||
| Other receivables (7) | 2,257 | 2,257 | ||
| Current financial assets | 350,064 | 0 | 0 | 350,064 |
| Trade receivables from third parties (7) | 92,347 | 92,347 | ||
| Other receivables from third parties (7) | 18,989 | 18,989 | ||
| Financial assets - Other (5) | 0 | 0 | ||
| Financial assets - Securities (5) | 0 | 0 | ||
| Cash and cash equivalents (10) | 238,728 | 238,728 | ||
| TOTAL | 352,321 | 31,171 | 8,384 | 391,876 |
| 30.09.2017 | Derivatives Other financial liabilities | Total | |
|---|---|---|---|
| Non-current financial liabilities | 0 | 234,165 | 234,165 |
| Financial payables (12) | 230,505 | 230,505 | |
| Financial liabilities - Derivative instruments (6) | 0 | ||
| Other payables (16) | 3,660 | 3,660 | |
| Current financial liabilities | 5 | 194,095 | 194,100 |
| Trade payables to third parties (16) | 90,744 | 90,744 | |
| Other payables (16) | 48,786 | 48,786 | |
| Financial liabilities - Derivative instruments (6) | 5 | 5 | |
| Short-term financial payables (12) | 54,565 | 54,565 | |
| TOTAL | 5 | 428,260 | 428,265 |
Most of financial assets and liabilities are short-term financial assets and liabilities for which, given their nature, the book value is considered as a reasonable approximation of fair value.
In the other residual positions, fair value is determined based on methods that can be classified under the various hierarchy Levels of fair value, as set forth by IFRS 13.
The Group has adopted internal valuation models that are generally used in finance and based on prices supplied by market operators, or prices taken from active markets.
All the financial instruments measured at fair value are classified in the three categories defined below: Level 1: market prices,
Level 2: valuation techniques (based on observable market data),
Level 3: valuation techniques (not based on observable market data).
| 30.09.2017 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets measured at fair value | ||||
| Financial assets - Equity investments (5) | 8,307 | 77 | 8,384 | |
| Financial assets - LT securities (5) | 0 | 0 | ||
| Financial assets - Other LTs (5) | 9,882 | 21,289 | 31,171 | |
| Financial assets - Other (5) | 0 | |||
| Financial assets - Loans | 0 | |||
| Financial assets - ST Derivative instruments (6) | 0 | |||
| Total Assets measured at fair value | 18,189 | 21,289 | 77 | 39,555 |
| Liabilities measured at fair value | 0 | |||
| Financial liabilities - LT derivative instruments (6) | 0 | |||
| Financial liabilities - ST derivative instruments (6) | 5 | 5 | ||
| Total Liabilities measured at fair value | 0 | 5 | 0 | 5 |
As at 30 September 2017, no reclassification occurred in the hierarchy levels of fair value.
Available-for-sale financial assets include the following items:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Other equity investments | 8,384 | 4,714 | 3,670 |
| Other long-term financial assets | 31,171 | 31,007 | 164 |
| Total Other long-term financial assets | 39,555 | 35,721 | 3,834 |
| Long-term loans | 0 | 1,110 | (1,110) |
| Total Financial assets | 39,555 | 36,831 | 2,724 |
The "Other LT financial assets" item consists of an investment of corporate liquidity in two insurance policies subscribed in May and July 2014, and a mutual investment fund subscribed in August 2015.
As at 30 September 2017, equity investments held by the Group in other companies were as follows:
| 31.12.2016 | Increases | Decreases | Adj. to fair value | Adjustment on exchange rates |
Reclassifica tions |
30.09.2017 | |
|---|---|---|---|---|---|---|---|
| Listed equity investments | 4,227 | 4,714 | (634) | 8,307 | |||
| Unlisted equity investments |
487 | (410) | 77 | ||||
| Total Shareholdings | 4,714 | 0 | 0 | 4,714 | (634) | (410) | 8,384 |
The amount of the "Listed equity investments" item is represented by the 1.2% investment in the share capital of the Japanese company Idec Corporation listed on the Tokyo Stock Exchange.
The change in the item "Unlisted equity investments" reflects the reclassification to "Equity investments in associates" of the payment made, on 9 November 2016, for the future increase in share capital of the company Suzhou Mobilead Electronic Technology Co., Ltd following the acquisition of the shares of the company.
It should be highlighted that the Parent Company holds a minority interest in the Alien Technology Corporation, which was written down completely as at 31 December 2010.
| 30.09.2017 | 31.12.2016 | |||
|---|---|---|---|---|
| Assets Liabilities |
Assets | Liabilities | ||
| Financial instruments measured at fair value and recognised in the statement of comprehensive income |
||||
| Interest rate derivatives - LT cash flow hedges | 0 | 0 | 0 | 0 |
| Interest rate derivatives - ST cash flow hedges | 0 | 5 | 0 | 37 |
| Total | 0 | 5 | 0 | 37 |
The Group has entered into interest rate derivative contracts to manage the risk stemming from changes in interest rates on bank borrowings, converting them from variable to fixed-rate via interest rate swaps having the same amortisation plan as the hedged underlying asset.
As envisaged by IAS 39, the fair value of these contracts, totalling €5 thousand, is recognised in a specific equity reserve net of the tax effect, because they hedge future cash flows and meet all IAS 39 requirements for the application of hedge accounting.
As at 30 September 2017, the notional principal of interest swaps totalled €1,500 thousand (€3,000 thousand as at 31 December 2016).
As at 30 September 2017, the Group had no active forward contracts for exchange rate risk.
As regards Financial risk management, reference is made to the annual financial report as at 31 December 2016.
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Third-party trade receivables | 93,665 | 75,914 | 17,751 |
| Less provision for doubtful receivables | 1,318 | 1,424 | (106) |
| Net third-party trade receivables | 92,347 | 74,490 | 17,857 |
| Receivables from associates | 794 | 979 | (185) |
| Datasensor GMBH | 76 | 54 | 22 |
| Specialvideo | 2 | (2) | |
| Datalogic Automation AB | 718 | 923 | (205) |
| Related-party receivables | 0 | 8 | (8) |
| Total Trade receivables | 93,141 | 75,477 | 17,664 |
| Other receivables - current accrued income and prepaid expenses | 19,863 | 16,049 | 3,814 |
| Other receivables - non-current accrued income and prepaid expenses | 2,257 | 2,394 | (137) |
| Total Other receivables - accrued income and prepaid expenses | 22,120 | 18,443 | 3,677 |
| Less non-current portion | 2,257 | 2,394 | (137) |
| Trade and other receivables - current portion | 113,004 | 91,526 | 21,478 |
"Trade receivables falling due within 12 months", totalling €93,141 thousand as at 30 September 2017, included €740 thousand resulting from the first consolidation of the company Soredi Touch Systems GmbH.
The increase amounted to €17,664 thousand (+23.4%) compared to 31 December 2016. As at 30 September 2017, factored trade accounts receivables amounted to €22,406 thousand (compared to €29,193 thousand at the end of 2016).
Receivables from associates arise from commercial transactions carried out at arm's length conditions.
Customer trade receivables are posted net of bad debt provisions totalling €1,318 thousand (€1,424 thousand as at 31 December 2016).
The detail of the item "Other receivables - accrued income and prepaid expenses" is as shown below:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Other short-term receivables | 2,244 | 1,778 | 466 |
| Other long-term receivables | 2,257 | 2,394 | (137) |
| VAT receivables | 14,174 | 11,615 | 2,559 |
| Accrued income and prepaid expenses | 3,445 | 2,656 | 789 |
| Total | 22,120 | 18,443 | 3,677 |
The change in the "Other short-term receivables" item amounted to €159 thousand and is attributable to the inclusion of the company Soredi Touch Systems GmbH in the scope of consolidation.
The "Accrued income and prepaid expenses" item is mainly composed of prepaid expenses related to insurance and Hardware and Software instalments.
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Raw and ancillary materials and consumables | 35,844 | 29,954 | 5,890 |
| Work in progress and semi-finished products | 28,648 | 25,883 | 2,765 |
| Finished products and goods | 23,029 | 26,507 | (3,478) |
| Total | 87,521 | 82,344 | 5,177 |
The contribution to "Raw and ancillary materials and consumables", resulting from the first consolidation of the company Soredi Touch Systems GmbH, amounted to €1,352 thousand, while the contribution to "Finished products and goods" amounted to €199 thousand.
As at 30 September 2017, "Tax receivables" amounted to €17,707 thousand, down by €428 thousand (€18,135 thousand as at 31 December 2016). The receivables for IRES tax from the parent company Hydra, equal to €5,782 thousand (€8,010 thousand as at 31 December 2016) are classified under this item. This amount is due under tax consolidation.
As at 30 September 2017, "Tax payables" amounted to €18,619 thousand, down by €2,413 thousand (€21,032 thousand as at 31 December 2016). The amount payable to the parent company Hydra for IRES tax, due under tax consolidation, is classified in this item and amounted to €8,698 thousand (€15,114 thousand as at 31 December 2016).
Cash and cash equivalents are broken down as follows:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Cash and cash equivalents shown on financial statements | 238,728 | 146,977 | 91,751 |
| Restricted cash | (12) | (47) | 35 |
| Current account overdrafts | (151) | (212) | 61 |
| Cash and cash equivalents for statement | 238,565 | 146,718 | 91,847 |
According to the requirements of Consob Communication no. 15519 of 28 July 2006, the Group's financial position is reported in the following table:
| 30.09.2017 | 31.12.2016 | |
|---|---|---|
| A. Cash and bank deposits | 238,716 | 146,930 |
| B. Other cash and cash equivalents | 12 | 47 |
| b1. restricted cash deposit | 12 | 47 |
| C. Securities held for trading | 0 | 0 |
| c1. Short-term | 0 | 0 |
| c2. Long-term | 0 | 0 |
| D. Cash and equivalents (A) + (B) + (C) | 238,728 | 146,977 |
| E. Current financial receivables | 0 | 0 |
| F. Other current financial receivables | 0 | 0 |
| f1. hedging transactions | 0 | 0 |
| G. Bank overdrafts | 151 | 212 |
| H. Current portion of non-current debt | 51,463 | 30,180 |
| I. Other current financial payables | 2,956 | 5,878 |
| i1. hedging transactions | 5 | 37 |
| i2. payables for leasing | 22 | 248 |
| i3. current financial payables | 2,929 | 5,593 |
| J. Current financial debt (G) + (H) +(I) | 54,570 | 36,270 |
| K. Current financial debt, net/(current net financial position) (J) - (D) - (E) - (F) | (184,158) | (110,707) |
| L. Non-current bank borrowing | 229,755 | 139,321 |
| M. Other non-current financial assets | 31,171 | 32,117 |
| N. Other non-current liabilities | 750 | 0 |
| n1. hedging transactions | 0 | 0 |
| n2. lease payables | 0 | 0 |
| n3. non-current financial payables | 750 | 0 |
| O. Non-current financial debt (L) - (M) + (N) | 199,334 | 107,204 |
| P. Net financial debt/(net financial position) (K) + (O) | 15,176 | (3,503) |
Net financial debt as at 30 September 2017 was negative by €15,176 thousand, a decrease of €18,679 thousand compared to 31 December 2016 (positive by €3,503 thousand).
The change, compared to 31 December 2016, was mainly due to the payment of dividends, amounting to €17.4 million, to the acquisition of the company Soredi Touch Systems GmbH, occurred on 6 July 2017, which involved a disbursement of around €8 million and to ordinary investments, net of disinvestments, amounting to €8 million.
The detail of equity accounts is shown below, while changes in equity are reported in the specific statement:
| 30.09.2017 | 31.12.2016 | |
|---|---|---|
| Share capital | 30,392 | 30,392 |
| Extraordinary share-cancellation reserve | 2,813 | 2,813 |
| Treasury shares held in portfolio | 6,120 | 4,120 |
| Treasury share reserve | 2,026 | 2,821 |
| Share premium reserve | 106,940 | 106,145 |
| Share capital and capital reserves | 148,291 | 146,291 |
| Cash-flow hedge reserve | (1,039) | (28) |
| Translation reserve | 7,884 | 25,436 |
| Reserve for exchange rate adjustment | 6,135 | 17,290 |
| Actuarial gains/(losses) reserve | (371) | (371) |
| Held-for-sale financial assets reserve | 4,705 | 490 |
| Other reserves | 17,314 | 42,817 |
| Retained earnings | 129,843 | 101,440 |
| Earnings carried forward | 114,189 | 85,721 |
| Capital contribution reserve | 958 | 958 |
| Legal reserve | 6,078 | 6,078 |
| IAS reserve | 8,618 | 8,683 |
| Profit for the year | 45,071 | 45,846 |
| Total Group shareholders' equity | 340,519 | 336,394 |
Movements in share capital as at 30 September 2017 are reported below (in Euro '000):
| Number of shares |
Share capital |
Extraordinary share cancellation reserve |
Treasury shares held in portfolio |
Treasury share reserve |
Share premium reserve |
Total | |
|---|---|---|---|---|---|---|---|
| 01.01.2017 | 58,144,262 | 30,392 | 2,813 | 4,120 | 2,821 | 106,145 | 146,291 |
| Purchase of treasury shares | 0 | 0 | 0 | 0 | |||
| Sale of treasury shares | 85,215 | 795 | (795) | 795 | 795 | ||
| Capital gains/(capital losses) from the sale of treasury shares |
1,205 | 1,205 | |||||
| Costs for the purchase/sale of treasury shares | 0 | 0 | 0 | ||||
| 30.09.2017 | 58,229,477 | 30,392 | 2,813 | 6,120 | 2,026 | 106,940 | 148,291 |
Extraordinary share-cancellation reserve
Interim Report on Operations as at 30 September 2017 – Explanatory Notes 37
The Extraordinary Shareholders' Meeting of Datalogic S.p.A., held on 20 February 2008, approved a reduction of share capital through the cancellation of 5,409,981 treasury shares (equal to 8.472% of the share capital), owned by the Company.
When these shares were cancelled, as resolved by the Extraordinary Shareholders' Meeting, an extraordinary share-cancellation reserve was set aside for the amount of €2,813 thousand, through the use of the share premium reserve. Therefore, this reserve remained classified under item "Share Capital".
As at 30 September 2017, the total number of ordinary shares was 58,446,491, including 217,014 held as treasury shares, making the number of shares in circulation at that date 58,229,477. The shares have a nominal unit value of €0.52 and are fully paid up.
The item "Treasury shares", amounting to €6,120 thousand, includes capital gains/(losses) resulting from the sale of treasury shares, net of purchases and related charges (€8,146 thousand). During 2017, the Group sold 85,215 thousand treasury shares, with a value of €2 million for the acquisition of the company SOREDI Touch Systems GmbH, with a capital gain of €1,205 thousand.
Pursuant to provisions set forth by IAS 39, the change in fair value of derivative contracts, designated as effective hedging instruments, is recognised in accounts directly with shareholders' equity, in the cash-flow hedge reserve. These contracts were entered to hedge exposure to the risk of interest rate fluctuations on variable-rate loans. The reserve, negative by €1,039 thousand, is disclosed net of the tax effect and includes, in the amount of €1,135 thousand, the fair value of the hedging instruments related to the refinancing transaction as well as, in the amount of €4 thousand, the fair value of the derivative instrument disclosed under derivative financial instruments.
In compliance with IAS 21, translation differences arising from translation of the foreign currency financial statements of consolidated companies into the Group accounting currency are classified as a separate equity component.
In application to IAS 21.15, this reserve comprises profits/losses generated by monetary elements which are an integral part of the net investment of foreign managements. In particular, it relates to the effect of exchange rates measurement at year-end for receivables for loans in US dollars granted to some Group companies by the Parent Company Datalogic S.p.A. and Datalogic USA Inc. For these loans no regulation and/or defined reimbursement plan are provided, nor is it deemed probable that they will be reimbursed in the foreseeable future.
Pursuant to IAS 19R, this reserve includes actuarial gains and losses, which are now recognised under other components in the comprehensive income statement and permanently excluded from the income statement.
This reserve was created upon first-time adoption of international accounting standards as at 1 January 2004 (Consolidated Financial statements for the year ended 31 December 2003) pursuant to IFRS 1.
This item includes equity changes occurring in consolidated companies after acquisition date.
On 4 May 2017, the Ordinary Shareholders' Meeting of Datalogic S.p.A. decided to distribute an ordinary dividend of €0.30 per share (€0.25 in 2016). The overall dividends began to be paid starting from 10 May 2017 and had been paid in full by 30 September.
The reconciliation between the Parent Company's shareholders' equity and net profit and the corresponding consolidated amounts is as shown below:
| 30 September 2017 | 31 December 2016 | |||
|---|---|---|---|---|
| Total equity |
Period results | Total equity | Period results |
|
| Parent Company shareholders' equity and profit | 287,881 | 21,246 | 291,677 | 52,334 |
| Difference between consolidated companies' shareholders' equity and their carrying value in the Parent Company's financial statements; effect of equity-based valuation |
114,623 | 50,728 | 111,061 | 51,183 |
| Reversal of dividends | (27,657) | (53,387) | ||
| Amortisation of intangible assets "business combination" | (5,827) | (5,827) | ||
| Effect of acquisition under common control | (31,733) | (31,733) | ||
| Elimination of capital gain on sale of business branch | (18,479) | 186 | (18,665) | |
| Effect of eliminating intercompany transactions | (13,410) | 679 | (17,700) | (4,231) |
| Reversal of write-downs and capital gains on equity investments |
5,517 | 5,517 | (604) | |
| Sale of know-how | (7) | (7) | ||
| Goodwill impairment | (1,395) | (1,395) | ||
| Other | (1,226) | (27) | (1,193) | (61) |
| Deferred taxes | 4,575 | (84) | 4,659 | 612 |
| Group shareholders' equity | 340,519 | 45,071 | 336,394 | 45,846 |
The breakdown of the item, divided by short/long-term classification, is shown in the following table:
| Datalogic Group | |||
|---|---|---|---|
| 30.09.2017 | 31.12.2016 | Change | |
| Long-term financial payables | 230,505 | 139,321 | 91,184 |
| Short-term financial payables | 54,565 | 36,233 | 18,332 |
| Total Financial payables | 285,070 | 175,554 | 109,516 |
The breakdown of this item is as detailed below:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Bank loans | 281,218 | 169,501 | 111,717 |
| Other | 2,000 | 0 | 2,000 |
| Payables to factoring companies | 1,679 | 5,593 | (3,914) |
| Payables for leasing | 22 | 248 | (226) |
| Bank overdrafts (ordinary current accounts) | 151 | 212 | (61) |
| Total Financial payables | 285,070 | 175,554 | 109,516 |
The breakdown of changes in the "Bank loans" item as at 30 September 2017 and 30 September 2016 is shown below:
| 2017 | 2016 | |
|---|---|---|
| 1 January | 169,501 | 172,612 |
| Increases | 249,182 | 0 |
| Repayments | (125,771) | (20,000) |
| Decreases for loan repayments | (11,694) | (10,067) |
| 30 September | 281,218 | 142,545 |
On 13 April, Datalogic S.p.A. signed an agreement for a new credit line worth €250 million and maturing in 2023. The loan granted to Datalogic was partly intended for an early redemption, compared to the original maturity, of the existing credit line (€126 million), and partly to support the ordinary activities and development of the Group.
The transaction was concluded at a fixed rate, so as to allow Datalogic S.p.A. to take advantage of the favourable interest rates currently available on the market and to lock in the cost of the Datalogic Group funding over the coming years.
The fair value of the loans (current and non-current) coincides substantially with their book value.
The "Others" item includes the financial debt related to the acquisition of the company SOREDI Touch Systems GmbH, which will be paid by 2021.
Deferred tax assets and liabilities result both from positive items already recognised in the income statement and subject to deferred taxation under current tax regulations and temporary differences between consolidated balance-sheet assets and liabilities and their relevant taxable value.
Deferred tax assets are accounted for based on future recoverability assumptions of temporary differences that originated them, or based on economic and fiscal strategic plans.
Temporary differences that generate deferred tax assets are mainly tax losses and taxes paid abroad, provisions for risks and charges and adjustments on exchange rates. Deferred tax liabilities are mainly due to temporary differences for adjustments to exchange rates and statutory and fiscal differences of amortisation/depreciation plans related to tangible and intangible assets.
For a better disclosure of deferred tax assets and liabilities, albeit not required by IAS 12, the total of net deferred taxes is reported compared with the previous year.
The total of net deferred taxes is broken down as follows:
| 30.09.2017 | 31.12.2016 | change | |
|---|---|---|---|
| Deferred tax assets | 52,635 | 49,413 | 3,222 |
| Deferred tax liabilities | (26,684) | (26,498) | (186) |
| Net deferred taxes | 25,951 | 22,915 | 3,036 |
The breakdown per company of deferred taxes is shown below:
| 30.09.2017 | 31.12.2016 | change | |
|---|---|---|---|
| Datalogic S.p.A. | 786 | (8,151) | 8,937 |
| Datalogic RE Germany GmbH | 0 | (75) | 75 |
| Datalogic RE France SaS | 52 | 52 | 0 |
| Datalogic RE UK Ltd | 101 | 104 | (3) |
| Datalogic IP Tech S.r.l. | 1,549 | 2,832 | (1,283) |
| Datalogic USA Inc. | 18,973 | 23,789 | (4,816) |
| Datalogic S.r.l. | (761) | (19) | (742) |
| Datalogic Slovakia S.r.o. | 3,095 | 1,373 | 1,722 |
| Datalogic ADC do Brazil Ltd. | (33) | 347 | (380) |
| Datalogic Scanning Eastern Europe GmbH | (433) | (442) | 9 |
| Datalogic Vietnam LLC | 262 | 578 | (316) |
| Datalogic Australia Pty Ltd | 156 | 161 | (5) |
| Datalogic ADC HK Ltd. | 0 | (3) | 3 |
| Datalogic ADC Singapore | (7) | (8) | 1 |
| Informatics Holdings Inc. | 693 | 579 | 114 |
| Solution Net Systems, Inc. | 190 | 199 | (9) |
| Total Net long-term deferred taxes | 24,623 | 21,316 | 3,307 |
| Deferred taxes recognised due to the consolidation entries | 1,328 | 1,599 | (271) |
| Total Net long-term deferred taxes | 25,951 | 22,915 | 3,036 |
The change in net deferred tax assets and liabilities is mainly attributable to:
The breakdown of changes in the "Post-employment benefits" item as at 30 September 2017 and 30 September 2016 is shown below:
| 2017 | 2016 | |
|---|---|---|
| 1 January | 6,647 | 6,814 |
| Amount allocated in the period | 1,407 | 1,322 |
| Uses | (576) | (726) |
| Other movements | (9) | (157) |
| Social security receivables for the employee severance indemnity reserve |
(724) | (592) |
| 30 September | 6,745 | 6,661 |
The breakdown of the "provisions for risks and charges" item was as follows:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Short-term provisions for risks and charges | 8,894 | 9,684 | (790) |
| Long-term provisions for risks and charges | 13,674 | 11,169 | 2,505 |
| Total | 22,568 | 20,853 | 1,715 |
The contribution to "Short-term provisions for risks and charges", resulting from the first consolidation of the company Soredi Touch Systems GmbH, amounted to €299 thousand.
Below we show the detailed breakdown of and changes in this item:
| 31.12.2016 | Increases | (Uses) and (Releases) |
Acquisition | on transfers |
Exchan ge rate diff. |
30.09.2017 | |
|---|---|---|---|---|---|---|---|
| Product warranty provision | 11,486 | 2,067 | (480) | 104 | (841) | 12,336 | |
| Provision for management incentive scheme |
3,322 | 2,411 | (159) | 5,574 | |||
| "Stock rotation" provision | 3,325 | 66 | (350) | (172) | 2,869 | ||
| Other | 2,720 | 1,080 | (2,070) | 195 | (93) | (43) | 1,789 |
| Total Provisions for risks and charges |
20,853 | 5,624 | (2,900) | 299 | (93) | (1,215) | 22,568 |
The "Product warranty provision" covers the estimated cost of repairing products sold up to 30 September 2017 and covered by periodical warranty. It amounts to €12,336 thousand (of which €7,684 thousand longterm) and is considered sufficient in relation to the specific risk it covers.
The "Provision for management incentive scheme" is attributable to the long-term incentive plan for directors and managers.
The "Other" item mainly comprises:
This table shows the details of trade and other payables:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Trade payables due within 12 months | 90,744 | 104,058 | (13,314) |
| Third-party trade payables | 90,744 | 104,058 | (13,314) |
| Payables to associates | 72 | 24 | 48 |
| Laservall Asia | 43 | 14 | 29 |
| Mobilhead | 4 | 0 | 4 |
| Caen | 21 | 0 | 21 |
| Datalogic Automation AB | 4 | 10 | (6) |
| Payables to the parent company | 0 | 106 | (106) |
| Hydra | 106 | (106) | |
| Payables to related parties | 30 | 397 | (367) |
| Total Trade payables | 90,846 | 104,585 | (13,739) |
| Other payables - current accrued liabilities and deferred income | 48,786 | 46,909 | 1,877 |
| Other payables - non-current accrued liabilities and deferred income | 3,660 | 4,294 | (634) |
| Total Other payables - accrued liabilities and deferred income | 52,446 | 51,203 | 1,243 |
| Less non-current portion | 3,660 | 4,294 | (634) |
| Current portion | 139,632 | 151,494 | (11,862) |
The decrease in "Trade payables", amounting to €13,739 thousand compared to 31 December 2016, is due to a mere seasonal effect.
The contribution to "Trade payables", resulting from the first consolidation of the company Soredi Touch Systems GmbH, amounted to €645 thousand.
The detailed breakdown of this item is as follows:
| 30.09.2017 | 31.12.2016 | Change | |
|---|---|---|---|
| Other long-term payables | 3,660 | 4,294 | (634) |
| Other short-term payables: | 25,014 | 23,115 | 1,899 |
| Payables to employees | 17,553 | 15,061 | 2,492 |
| Payables to pension and social security agencies | 4,791 | 5,005 | (214) |
| Other payables | 2,670 | 3,049 | (379) |
| VAT liabilities | 2,796 | 2,869 | (73) |
| Accrued liabilities and deferred income | 20,976 | 20,925 | 51 |
| Total | 52,446 | 51,203 | 1,243 |
The contribution to "Other payables", resulting from the first consolidation of the company Soredi Touch Systems GmbH, amounted to €48 thousand.
Amounts payable to employees represent the amount due for salaries and vacations accrued by employees as at the reporting date.
"Accrued liabilities and deferred income" are mainly composed of deferred income related to multi-annual maintenance contracts.
The decrease in the item "Other payables" is attributable, in the amount of €505 thousand, to the payment of debt relating to land purchased in December 2016.
As at 30 September 2017, the Datalogic Group recorded revenues in the amount of €450,711 thousand, up 6.9% compared to €421,753 thousand in the first nine months of 2016 (+6.8% at constant Euro/Dollar exchange rate).
The following table shows the breakdown of revenues per geographical areas:
| Nine months ended | Change | |||||
|---|---|---|---|---|---|---|
| 30.09.2017 | % | 30.09.2016 | % | % | ||
| Italy | 41,589 | 9.2% | 39,926 | 9.5% | 1,663 | 4.2% |
| EMEA (except Italy) | 196,137 | 43.5% | 181,509 | 43.0% | 14,628 | 8.1% |
| Total EMEA | 237,726 | 52.7% | 221,435 | 52.5% | 16,291 | 7.4% |
| North America | 133,772 | 29.7% | 131,754 | 31.2% | 2,018 | 1.5% |
| Latin America | 20,106 | 4.5% | 20,517 | 4.9% | (411) | (2.0%) |
| Asia & Pacific | 59,107 | 13.1% | 48,047 | 11.4% | 11,060 | 23.0% |
| Total revenues | 450,711 | 100.0% | 421,753 | 100.0% | 28,958 | 6.9% |
(*) EMEA: Europe, Middle East and Africa.
As from this Report, data related to geographical areas will be disclosed to reflect the actual involvement of each area within the new commercial organisation of the Group. Comparative data as at 30 September 2016 will be disclosed accordingly.
Pursuant to the introduction of IAS principles, the following table reports non-recurring costs and amortisation arising from acquisitions as extraordinary items no longer listed separately but included in ordinary operations.
| Nine months ended | ||||
|---|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | ||
| TOTAL COST OF GOODS SOLD (1) | 238,517 | 227,467 | 11,050 | |
| of which non-recurring | 316 | 86 | 230 | |
| TOTAL OPERATING COSTS (2) | 151,733 | 143,857 | 7,876 | |
| Research and Development expenses | 40,121 | 36,715 | 3,406 | |
| of which non-recurring | 153 | 0 | 153 | |
| of which amortisation, depreciation pertaining to acquisitions | 79 | 79 | 0 | |
| Distribution expenses | 73,225 | 72,423 | 802 | |
| of which non-recurring | 0 | 164 | (164) | |
| General and administrative expenses | 36,937 | 33,971 | 2,966 | |
| of which non-recurring | 389 | 0 | 389 | |
| of which amortisation, depreciation pertaining to acquisitions | 3,582 | 3,577 | 5 | |
| Other operating costs | 1,450 | 748 | 702 | |
| of which non-recurring | 0 | (399) | 399 | |
| TOTAL (1+2) | 390,250 | 371,324 | 18,926 | |
| of which non-recurring costs | 858 | (149) | 1,007 | |
| of which amortisation, depreciation pertaining to acquisitions |
3,661 | 3,656 | 5 |
It should be noted that, since 2017, some costs have been reclassified under various items. Comparative data as at 30 September 2016 have therefore been disclosed accordingly. For details please refer to the Annex 1 to the Interim report on operations.
The non-recurring costs/(revenues) item, as at 30 September 2017, shows a positive amount of €858 thousand. The breakdown of this item is as follows:
| ITEM | AMOUNT | TYPE OF COST |
|---|---|---|
| 1) "Cost of goods sold" | 316 | Restructuring Plan |
| 2) "R&D expenses" | 28 | Restructuring Plan |
| 2) "R&D expenses" | 125 | Reorganisation Plan |
| 3) "General and administrative expenses" | 218 | Reorganisation Plan |
| 3) "General and administrative expenses" | 171 | Acquisition Projects |
| TOTAL NON-RECURRING COSTS/(REVENUES) | 858 |
The costs relating to the Reorganisation Plan (equal to €343 thousand) refer to the new model for the Datalogic Group's reorganisation, which was begun in 2016, and relate mainly to consultancy. Moreover, during the last quarter, a Restructuring Plan was started in the plant in Donnas, which required allocations for €344 thousand. Costs related to Acquisition Plans amounted to €171 thousand.
Amortisation from acquisitions (equal to €3,661 thousand), mainly included under "General and administrative expenses" (€3,582 thousand), are comprised of:
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Acquisition of the PSC Group (on 30 November 2006) | 1,362 | 1,361 | 1 |
| Acquisition of Evolution Robotics Retail Inc. (on 1 July 2010) | 471 | 471 | 0 |
| Acquisition of Accu-Sort Inc. (on 20 January 2012) | 1,828 | 1,824 | 4 |
| TOTAL | 3,661 | 3,656 | 5 |
This item increased by 4.9% compared to the same period in 2017 (4.3% on a like-for-like consolidation basis). At constant Euro/Dollar exchange rate and net of non-recurring costs, it increased by 4.5%.
The operating costs, excluding non-recurring costs and the amortisation inherent in the acquisitions, increased by 5.1% from €140,436 thousand to €147,530 thousand (€146,895 thousand on a like-for-like consolidation basis). At constant exchange rates, the increase was slightly lower (4.9%). As a whole, a reduced impact of operating costs on revenues was reported, from 33.3% to 32.7%.
In particular:
"R&D expenses" amounted to €40,121 thousand and increased by €3,253 thousand, compared to the same period of the previous year, less non-recurring costs and amortisation resulting from acquisitions (+€3,193 thousand at constant exchange rates). This increase is primarily attributable to the increase in payroll & employee benefits, project consultancy services and quality certification expenses.
"Distribution expenses" amounted to €73,225 thousand and, net of non-recurring costs, increased by €966 thousand with respect to the comparison period. Nevertheless, they decreased by almost one percentage point, as impact on revenues. Based on the analysis at constant exchange rates, and net of non-recurring costs, these increased by €826 thousand, due mainly to an increase in payroll & employee benefits, partially offset by a decrease in marketing, shipment and consultancy costs.
The breakdown of "Other operating costs" is as follows:
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Non-income taxes | 940 | 1,002 | (62) |
| Allocation to the risk reserve | 234 | (381) | 615 |
| of which non-recurring | 0 | (399) | 399 |
| Provisions for doubtful accounts | 76 | 78 | (2) |
| Capital losses on assets | 76 | 5 | 71 |
| Contingent liabilities | 12 | 25 | (13) |
| Other | 112 | 19 | 93 |
| Total | 1,450 | 748 | 702 |
The "Allocations to the risk reserve" item in 2016 was positive as it included €399 thousand referred to the release to the income statement of the surplus of the provision allocated in 2014 for a probable tax liability related to one of the Group's foreign companies.
The following table provides the details of total costs (cost of goods sold and total operating costs) by type, for the main items:
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Purchases | 181,004 | 182,600 | (1,596) |
| Change in inventories | (6,673) | (20,278) | 13,605 |
| Payroll & employee benefits | 122,586 | 117,750 | 4,836 |
| Amortisation, depreciation and write-downs | 14,581 | 14,038 | 543 |
| Goods receipt & shipment | 12,838 | 14,572 | (1,734) |
| Technical, legal and tax advisory services | 6,802 | 6,666 | 136 |
| Travel & accommodation | 6,492 | 6,667 | (175) |
| Repairs and allocation to the warranty provision | 6,191 | 5,497 | 694 |
| Marketing expenses | 5,677 | 6,524 | (848) |
| Building expenses | 4,917 | 4,575 | 342 |
| Material collected from the warehouse | 3,332 | 3,678 | (346) |
| EDP expenses | 3,040 | 2,680 | 360 |
| Royalties | 3,020 | 3,199 | (179) |
| Subcontracted work | 2,981 | 1,941 | 1,040 |
| Consumables and R&D materials | 2,261 | 2,500 | (239) |
| Telephone expenses | 2,167 | 1,881 | 286 |
| Quality certification expenses | 1,759 | 1,129 | 630 |
| Sundry service costs | 1,657 | 1,264 | 393 |
| Directors' remuneration | 1,566 | 996 | 570 |
| Utilities | 1,527 | 1,506 | 21 |
| Commissions | 1,315 | 1,217 | 98 |
| Expenses for plant and machinery and other assets | 1,045 | 760 | 285 |
| Meeting expenses | 939 | 1,005 | (66) |
| Accounts certification expenses | 937 | 869 | 68 |
| Vehicle expenses | 874 | 806 | 68 |
| Insurance | 727 | 698 | 29 |
| Entertainment expenses | 478 | 711 | (233) |
| Training courses for employees | 404 | 369 | 35 |
| Stationery and printings | 192 | 212 | (20) |
| Other | 5,615 | 5,292 | 323 |
| Total Cost of goods sold and operating costs | 390,250 | 371,324 | 18,926 |
It should be noted that some items disclosed in the 2016 comparison period have been restated for homogeneity and comparison purposes.
Expenses reported in item "Goods receipt & shipment", equal to €12,838 thousand, decreased by €1,734 thousand, particularly goods receipt expenses, due to the effect of increased efficiency in the management of logistical flows.
The item "Marketing expenses", equal to €5,677 thousand, decreased by €848 thousand compared to the same period of 2016, mainly due to the decrease in advertising costs and in Marketing, by reason of a postponement of some activities.
Costs related to "Subcontracted work" amounted to €2,981 thousand (up €1,040 thousand compared to the same period of 2016) and refer primarily to orders in the Solution Net System division.
"Quality certification expenses" amounted to €1,759 thousand and were €630 thousand higher than the same period of 2016. This increase is attributable to higher expenses borne for the implementation of the new organisational model and to the inclusion of the company Soredi Touch Systems GmbH in the scope of consolidation, as well as.
The detailed breakdown of payroll & employee benefits is as follows:
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Wages & salaries | 93,088 | 92,266 | 822 |
| Social security charges | 17,502 | 16,076 | 1,426 |
| Employee severance indemnities | 1,394 | 1,234 | 160 |
| Retirement and similar benefits | 1,000 | 975 | 25 |
| Medium- to long-term managerial incentive plan | 2,409 | (381) | 2,790 |
| Vehicle expenses for employees | 2,283 | 2,364 | (81) |
| Other costs | 3,818 | 3,645 | 173 |
| Early retirement incentives | 1,092 | 1,571 | (479) |
| Total | 122,586 | 117,750 | 4,836 |
The "Wages and salaries" item, equal to €93,088 thousand, includes Sales commissions and incentives totalling €12,191 thousand (€11,797 thousand as at 30 September 2016).
This item reported an increase of €822 thousand (up €634 thousand at constant exchange rates) compared to the same period of the previous year.
The "Early retirement incentives" item includes costs, totalling €344 thousand, stated under the "Nonrecurring costs and revenues" item, resulting from the re-organisation activities of the plant in Donnas (€250 thousand as at 30 September 2016).
The detailed breakdown of this item is as follows:
| Nine months ended | ||||
|---|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | ||
| Grants to Research and Development expenses | 1,138 | 1,240 | (102) | |
| Miscellaneous income and revenues | 782 | 955 | (173) | |
| Rents | 99 | 63 | 36 | |
| Capital gains on asset disposals | 4 | 132 | (128) | |
| Contingent assets | (18) | (69) | 51 | |
| Total | 2,005 | 2,321 | (316) |
The "Grants to Research and Development expenses" item amounted to €1,138 thousand (€1,240 thousand as at 30 September 2016) and is related to the tax credit of companies that perform R&D activities, as envisaged by Art. 3 of the Law Decree no. 145 of 23 December 2013, converted into Law no. 9 of 21 February 2014, as amended by par. 35 of Art. 1 of Law no. 190 of 23 December 2014 (Stability Law 2015), Tax credit for R&D activities.
The item "Miscellaneous income and revenues" mainly includes revenues for internal building works and reimbursements from employees for the use of vehicles for the pertaining portion.
As at 30 September 2016, the item "Capital gains on asset disposals" primarily included the profit from the disposal of certain patents.
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Financial income/(expenses) | (2,208) | (1,296) | (912) |
| Foreign exchange differences | (2,259) | (548) | (1,711) |
| Bank expenses | (1,600) | (1,340) | (260) |
| Other | 367 | 33 | 334 |
| Total Net financial income (expenses) | (5,700) | (3,151) | (2,549) |
Financial income was negative by €5,700 thousand, compared to a negative result of €3,151 thousand related to the same period of the previous year, mainly due to the trend of foreign exchange differences and the increase in financial expenses.
The performance of "Foreign exchange differences" item is mainly connected with the effects, on net Group balances, of the depreciation of the US Dollar against the Euro in the first nine months of 2017.
The "Financial income/(expenses)" item decreased by €912 thousand, mainly by reason of the increased gross indebtedness, due to the entering of a new loan agreement with a pool of banks for the amount of €250 million on 13 April 2017 and the redemption, at the same time, of pre-existing loan amounting to €126 million. This transaction permitted to increase the average life of the financial debt and therefore reduce the exposure to variable interest rates as the new contract is at fixed rate.
The "Bank expenses" item reported an overall increase of €260 thousand, mainly due to the release of a portion pertaining to the upfront fees (€437 thousand) related to the early redemption of the abovementioned long-term loan.
Losses generated by companies carried at equity were recognised in the amount of €1 thousand (compared with losses of €466 thousand as at 30 September 2016).
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Pre-tax profit | 56,765 | 49,133 | 7,632 |
| Income tax | 13,303 | 9,965 | 3,338 |
| Deferred taxes | (1,609) | (1,714) | 105 |
| Total | 11,694 | 8,251 | 3,443 |
| Tax Rate | 20.6% | 16.8% | 3.8% |
The average tax rate comes to 20.6% (16.8% as at 30 September 2016). Taxes were calculated by using the best estimate of the annual tax rate expected at the reporting date.
Law no. 190/2014, par. 37-45, as amended by Art. 5 of Law Decree no. 3/2015, introduced the so-called "Patent box optional regime" in the Italian legislation. This envisages the reduced tax regime on income resulting from the use of some types of intangible assets and earned by the owners of the company's income who also carry out certain R&D activities.
Based on this measure, some Italian companies within the Group adhered to this optional regime and, over this three-month period, they reported the benefit, in terms of reduced taxation on 2016, in the Income Statement.
| Nine months ended | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | ||
| Group earnings/(loss) for the period | 45,071,000 | 40,882,000 | |
| Average number of shares | 58,115,857 | 58,184,156 | |
| Earnings/(loss) per share | 0.7755 | 0.7026 | |
| Average number of shares | 58,115,857 | 58,184,156 | |
| Diluted effect | 0 | 0 | |
| Diluted earnings/(loss) per share | 0.7755 | 0.7026 |
EPS as at 30 September 2017 was calculated by dividing Group net profit of €45,071 thousand (Group net profit of €40,882 thousand as at 30 September 2016) by the average number of ordinary shares outstanding as at 30 September 2017, equal to 58,115,857 shares (58,184,156 as at 30 September 2016).
For the definition of "Related parties", see both IAS 24, approved by EC Regulation 1725/2003, and the Procedure for Transactions with Related Parties approved by the Board of Directors on 4 November 2010 (most recently amended on 24 July 2015), available on the Company's website www.datalogic.com.
The parent company of the Datalogic Group is Hydra S.p.A.
Infragroup transactions are executed as part of the ordinary operations and at arm's length conditions. Furthermore, there are other relationships with related parties, always carried out as part of the ordinary operations and at arm's length conditions, with an irrelevant amount and by the effects of the "OPC Procedure", chiefly with Hydra S.p.A. or entities under joint control (with Datalogic S.p.A.), or with individuals that carry out the coordination and management of Datalogic S.p.A. (including entities controlled by the same and close relatives).
Related-party transactions refer chiefly to commercial and real estate transactions (instrumental and noninstrumental premises for the Group under lease or leased) and advisory activities as well as to companies joining the scope of tax consolidation. None of these assumes particular economic or strategic importance for the Group since receivables, payables, revenues and costs to the related parties are not a significant proportion of the total amount of the financial statements.
Pursuant to Art. 5, par. 8, of the Consob Regulations, it should be noted that, over the period 01/01/2017 - 30/09/2017, the Company's Board of Directors did not approve any relevant transaction, as set out by Art. 3, par. 1, lett. b) of the Consob Regulations, or any transaction with minority related parties that had a significant impact on the Group's equity position or profit/(loss).
| RELATED PARTIES | Hydra (parent company) |
Hydra Immobiliare and Aczon |
Associates | Natural person |
TOTAL 30/09/2017 |
|---|---|---|---|---|---|
| parent company |
company controlled by Chairman of BoD |
Not consolidated on a line-by-line basis |
member of BoD |
||
| Equity investments | - | - | 3,629 | - | 3,629 |
| Non-current assets | - | - | 182 | - | 182 |
| Trade receivables - accrued income and prepaid expenses |
- | 75 | 1,593 | - | 1,668 |
| Receivables pursuant to tax consolidation | 5,782 | - | - | - | 5,782 |
| Liabilities pursuant to tax consolidation | 8,698 | - | - | - | 8,698 |
| Trade payables | - | - | 73 | 4 | 77 |
| Financial payables | - | - | - | - | - |
| Sales/service expenses | - | 539 | 363 | 16 | 918 |
| Commercial revenues | - | - | 4,258 | - | 4,258 |
| Financial income | - | - | - | - | - |
| Profits/(losses) from associates | - | - | (1) | - | (1) |
| Datalogic Group | |||
|---|---|---|---|
| 30.09.2017 | 30.09.2016 | Change | |
| Datalogic | 2,716 | 2,583 | 133 |
| Solution Net Systems | 40 | 0 | 40 |
| Informatics | 82 | 100 | (18) |
| Total | 2,838 | 2,683 | 155 |
The Chairman of the Board of Directors (Mr. Romano Volta)
| (Euro/000) | Note 30.09.2016 Reclassifications | 30.09.2016 | ||
|---|---|---|---|---|
| Restated | ||||
| 1) Total revenues | 17 | 421.753 | 421.753 | |
| of which from related parties | 4.218 | 4.218 | ||
| 2) Cost of goods sold | 18 | 227.355 | 112 | 227.467 |
| of which non-recurring | 18 | 86 | 86 | |
| of which from related parties | 243 | 243 | ||
| Gross profit (1-2) | 194.398 | (112) | 194.286 | |
| 3) Other operating revenues | 19 | 2.321 | 2.321 | |
| 4) R&D expenses | 18 | 36.715 | 36.715 | |
| of which non-recurring | 18 | 0 | 0 | |
| of which amortisation, depreciation and write-downs pertaining to acquisitions |
79 | 79 | ||
| of which from related parties | 18 | 8 | 8 | |
| 5) Distribution expenses | 18 | 75.056 | (2.633) | 72.423 |
| of which non-recurring | 18 | 164 | 164 | |
| of which from related parties | 72 | 72 | ||
| 6) General and administrative expenses | 18 | 31.450 | 2.521 | 33.971 |
| of which amortisation, depreciation and write-downs | 18 | 3.577 | 3.577 | |
| pertaining to acquisitions | ||||
| of which from related parties | 1.052 | 1.052 | ||
| 7) Other operating expenses | 18 | 748 | 748 | |
| of which non-recurring | 18 | (399) | (399) | |
| Total operating costs | 143.969 | (112) | 143.857 | |
| Operating result | 52.750 | 0 | 52.750 | |
| 8) Financial income | 20 | 12.769 | 12.769 | |
| 9) Financial expenses | 20 | 15.920 | 15.920 | |
| Net financial income (expenses) (8-9) | (3.151) | 0 | (3.151) | |
| 10) Profits from associates | 3 | (466) | (466) | |
| Profit (loss) before taxes from the operating assets | 49.133 | 0 | 49.133 | |
| Income tax | 21 | 8.251 | 8.251 | |
| Profit/(loss) for the period | 40.882 | 0 | 40.882 | |
| Basic earnings/(loss) per share (€) | 22 | 0,7026 | 0,7026 | |
| Diluted earnings/(loss) per share (€) | 22 | 0,7026 | 0,7026 |
Note: It should be noted that, since 2017, some costs have been reclassified under various items.
Il sottoscritto Dott. Alessandro D'Aniello, quale Dirigente Preposto alla redazione dei documenti contabili societari di Datalogic S.p.A.
attesta
in conformità a quanto previsto dal secondo comma dell'art. 154 bis, comma secondo, del decreto legislativo 24 febbraio 1998, n. 58 che il Resoconto intermedio di gestione al 30 settembre 2017 corrisponde alle risultanze documentali, ai libri e alle scritture contabili.
Datalogic S.p.A.
Il Dirigente Preposto alla redazione dei documenti contabili Alessandro D'Aniello
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