Quarterly Report • Nov 14, 2017
Quarterly Report
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Investor Relator Lucia Caccia Dominioni Tel: 035.4232840 - Fax: 035.3844606 email: [email protected]
Registered Office: Piazza Sant'Ambrogio, 16 – 20123 Milan Fully paid up share capital as at 30 September 2017 Euro 10,708,400 Milan Register of Companies no. 314026 Tax and VAT code 10227100152
Website: www.tesmec.com Switchboard: 035.4232911
TABLE OF CONTENTS
| TABLE OF CONTENTS 5 |
|---|
| COMPOSITION OF THE CORPORATE BODIES7 |
| GROUP STRUCTURE9 |
| INTERIM CONSOLIDATED REPORT ON OPERATIONS11 |
| 1. Introduction12 |
| 2. Macroeconomic Framework 12 |
| 3. Significant events occurred during the period 13 |
| 4. Activity, reference market and operating performance for the first nine months of 201714 |
| 5. Income statement15 |
| 6. Summary of balance sheet figures as at 30 September 2017 19 |
| 7. Management and types of financial risk 21 |
| 8. Atypical and/or unusual and non-recurring transactions with related parties21 |
| 9. Group Employees21 |
| 10. Other information 21 |
| INTERIM REPORT ON OPERATIONS 23 |
| Consolidated statement of financial position as at 30 September 2017 and as at 31 December 2016 24 |
| Consolidated income statement as at 30 September 2017 and 2016 25 |
| Consolidated statement of comprehensive income as at 30 September 2017 and 2016 26 |
| Statement of consolidated cash flows as at 30 September 2017 and 2016 27 |
| Statement of changes in consolidated shareholders' equity as at 30 September 2017 and 2016 28 |
| Explanatory notes29 |
| Certification pursuant to Article 154-bis of Italian Legislative Decree 58/9846 |
COMPOSITION OF THE CORPORATE BODIES
Board of Directors (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2018)
| Chairman and Chief Executive Officer | Ambrogio Caccia Dominioni |
|---|---|
| Vice Chairman | Gianluca Bolelli |
| Directors | Sergio Arnoldi () Gioacchino Attanzio () Guido Giuseppe Maria Corbetta () Caterina Caccia Dominioni Lucia Caccia Dominioni Paola Durante () |
| (*) Independent Directors |
Board of Statutory Auditors (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2018)
| Chairman | Simone Cavalli |
|---|---|
| Statutory Auditors | Stefano Chirico Alessandra De Beni |
| Alternate Auditors | Attilio Marcozzi Stefania Rusconi |
Members of the Control and Risk Committee (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2018)
Chairman Sergio Arnoldi
Members Gioacchino Attanzio Gianluca Bolelli
Members of the Remuneration and Appointments Committee (in office until the date of the Shareholders' Meeting convened to approve the financial statements as at 31 December 2018)
| Chairman | Gioacchino Attanzio |
|---|---|
| Members | Sergio Arnoldi Caterina Caccia Dominioni |
| Lead Independent Director | Gioacchino Attanzio |
| Director in charge of the internal control and risk management system |
Caterina Caccia Dominioni |
| Manager responsible for preparing the Company's financial statements |
Andrea Bramani |
| Independent Auditors | Ernst & Young S.p.A. |
GROUP STRUCTURE
(3) The On June 30, 2017 the company SGE S.r.l. changed the name in Tesmec Automation S.r.l..
(Not audited by the Independent Auditors)
The parent company Tesmec S.p.A. (hereinafter "Parent Company" or "Tesmec") is a legal entity organised in accordance with the legal system of the Italian Republic. The ordinary shares of Tesmec are listed on the MTA (screen-based share market) STAR Segment of the Milan Stock Exchange. The registered office of the Tesmec Group (hereinafter "Group" or "Tesmec Group") is in Milan, Piazza S. Ambrogio 16.
The Tesmec Group is a leader in the design, production and marketing of special products and integrated solutions for the construction, maintenance and streamlining of infrastructures relating to the transmission of electrical power and data and material transport.
Founded in Italy in 1951 and managed by the Chairman and Chief Executive Officer Ambrogio Caccia Dominioni, the Group has more than 700 employees and production plants located in Grassobbio (Bergamo), Endine Gaiano (Bergamo), Sirone (Lecco) and Monopoli (Bari) in Italy, Alvarado (Texas) in the USA and Durtal in France. Moreover, as a result of the recent acquisitions of the companies Bertel, Tesmec Automation (formerly SGE S.r.l.) and CPT, the Tesmec Group has other three production plants in Fidenza (Parma), Padua and Patrica (Frosinone), respectively. The Group also has a global commercial presence, with a direct presence on different continents, through foreign companies and sales offices in the USA, South Africa, Russia, Qatar, China and France.
As a result of its listing on the Stock Exchange on 1 July 2010, the Parent Company has pursued the stated objective of diversification of the types of products in order to offer a complete range of integrated solutions grouped into three main areas of business: Energy, Trencher and Rail.
Note: as from the Interim consolidated financial report as at 30 June 2017, following the increased offer of products not strictly related to the stringing equipment, the sector previously called stringing equipment will be called Energy.
Through the different types of product, the Group is able to offer:
▪ Machines and integrated systems for the installation, maintenance and diagnostics of the railway catenary wire system, plus customised machines for special operations on the line.
The know-how achieved in the development of specific technologies and innovative solutions and the presence of a team of highly-skilled engineers and technicians allow the Tesmec Group to directly manage the entire production chain: from the design, production and marketing of machinery to the supply of know-how relating to the use of systems and optimisation of work, to all pre- and post-sales services related to machinery and the increase in site efficiency.
Signs of robust growth of the major economies of the planet multiply. In connection with this significant trend, there are no typical overheating effects with inflation that is estimated at the end of the year for the European area at 1.1%, down from the previous estimate of 1.3%. The increase in crude oil demand mainly from the major Asian economies (China and India in the foreground) is balanced by an increase in the offer coming from the United States where the extraction costs of Shale Oil continue to decrease and by the increase in the offer of the Countries not aligned with OPEC (Libya, Nigeria). Therefore, in the short term, the barrel price is expected to fluctuate from 50 to 60 USD. The growing volumes of production coming from
investments in the renewable sector the output of which represents an increasingly important part of the energy supply mitigate the upward pressures as well. In this scenario of increased energy consumption and in particular the one coming from renewable sources and of increased attention to control over emissions, the offer of the Group, also thanks to recent acquisitions, is believed to be extremely favourable.
The extraordinary transactions that occurred during the period include the following:
The consolidated financial statements of Tesmec have been prepared in accordance with International Financial Reporting Standards (hereinafter the "IFRS" or the "International Accounting Standards"), which were endorsed by the European Commission, in effect as at 31 December 2016. The following table shows the major economic and financial indicators of the Group as at September 2017 compared with the same period of 2016.
| OVERVIEW OF RESULTS | ||||||
|---|---|---|---|---|---|---|
| 30 September 2016 | Key income statement data (Euro in millions) | 30 September 2017 | ||||
| 108.5 | Operating Revenues | 132.1 | ||||
| 10.7 | EBITDA | 13.6 | ||||
| 1.6 | Operating Income | 3.1 | ||||
| (1.4) | Group Net Profit | (1.8) | ||||
| 31 December 2016 | Key financial position data (Euro in millions) | 30 September 2017 | ||||
| 146.6 | Net Invested Capital | 138.7 | ||||
| 49.9 | Shareholders' Equity | 45.2 | ||||
| 96.7 | Net Financial Indebtedness | 93.5 | ||||
| (1.2) | Investments in property, plant and equipment and intangible assets | 12.0 | ||||
| 659 | Annual average employees | 769 | ||||
The information on the operations of the main subsidiaries in the reference period is shown:
▪ Marais Technologies SAS, with registered office in Durtal (France), company 52.83% owned by Tesmec S.p.A., 33.96% by Simest S.p.A. (with an option of Tesmec to repurchase this shareholding interest as at 30 June 2020) and 13.21% by C2D SAS. The French company, purchased on 8 April 2015, is the holding of an international group leader in rental services and construction of machines for infrastructures in telecommunications, electricity and gas. The Group generated during the first nine months of 2017 revenues totalling Euro 33.5 million clearly recovering on the figure of Euro 24.9 million compared with the same period in the previous year thanks to the development trend of service activities for projects in the telecommunications and renewable energy segments in Oceania and Africa.
The figures relating to Tesmec Automation S.r.l., company that contains as at 30 September almost all the activities of the Group in the automation segment with the exception of the Ampere business unit which will be granted starting on 2 October 2017:
▪ Tesmec Automation S.r.l. (formerly SGE S.r.l.), company 100% owned by Tesmec S.p.A., with registered office in Grassobbio (BG) specialised in the design and sales of sensors and fault detectors and measurement devices for medium voltage power lines. During the first nine months of 2017, revenues amounted to Euro 2.9 million after the merger with CPT S.r.l.
The comments provided below refer to the comparison of the consolidated income statement figures as at 30 September 2017 with those as at 30 September 2016.
The main profit and loss figures for the first nine months of 2017 and 2016 are presented in the table below:
| As at 30 September | ||||
|---|---|---|---|---|
| (Euro in thousands) | 2017 | % of revenues | 2016 | % of revenues |
| Revenues from sales and services | 132,131 | 100.0% | 108,477 | 100.0% |
| Cost of raw materials and consumables | (58,678) | -44.4% | (46,285) | -42.7% |
| Costs for services | (22,915) | -17.3% | (22,593) | -20.8% |
| Payroll costs | (33,412) | -25.3% | (29,190) | -26.9% |
| Other operating (costs)/revenues, net | (7,433) | -5.6% | (3,312) | -3.1% |
| Amortisation and depreciation | (10,463) | -7.9% | (9,115) | -8.4% |
| Development costs capitalised | 3,929 | 3.0% | 3,513 | 3.2% |
| Portion of losses/(gains) from the valuation of Joint Ventures using the equity method |
(38) | 0.0% | 85 | 0.1% |
| Total operating costs | (129,010) | -97.6% | (106,897) | -98.5% |
| Operating income | 3,121 | 2.4% | 1,580 | 1.5% |
| Financial expenses | (8,110) | -6.1% | (5,891) | -5.4% |
| Financial income | 1,644 | 1.2% | 2,470 | 2.3% |
| Portion of losses/(gains) from the valuation of equity investments using the equity method |
63 | 0.0% | (177) | -0.2% |
| Pre-tax profit/(loss) | (3,282) | -2.5% | (2,018) | -1.9% |
| Income tax | 1,467 | 1.1% | 641 | 0.6% |
| Net profit/(loss) for the period | (1,815) | -1.4% | (1,377) | -1.3% |
| Profit / (loss) attributable to non-controlling interests | 25 | 0.0% | 50 | 0.0% |
| Group profit/(loss) | (1,840) | -1.4% | (1,427) | -1.3% |
Total revenues as at 30 September 2017 increased by 21.8%. The following table shows their division between service activities and sales of products:
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | 2017 | 2016 | |
| Sales of products | 95,409 | 84,817 | |
| Services rendered | 30,474 | 21,572 | |
| 125,883 | 106,389 | ||
| Changes in work in progress | 6,248 | 2,088 | |
| Total revenues from sales and services | 132,131 | 108,477 |
The revenues confirm the recovery already shown in the previous quarters with an increase as at 30 September 2017 of 21.8% compared to the same period the previous year. This result is mainly supported by the services sector that recorded an increase in the same period by 41%. Services rendered mainly concern the trencher segment and are represented by the project activities and machine rental business carried out in France, Africa, Oceania and in the United States.
Even if the revenues recorded by the Group in Italy more than doubled compared to the same period last year thanks to the contributions of the Rail and Automation segments, the Group recorded 82% of revenues abroad and in particular in non-EU countries. The revenue analysis by area is indicated below, compared with the first nine months of 2017 and the first nine months of 2016, which indicates the growth of the Italian and BRIC and Others markets, partially balanced by the downtrends recorded in the African and Middle-Eastern markets. In the BRIC and Others segment, note the contribution deriving from the completion of the order to the Indonesian Electricity Company (PLN), the award of which was announced on 7 November 2016. It is emphasised that the segmentation by geographic area is determined by the Country where the customer is, regardless of the place where the project activities are organised.
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | 2017 | 2016 | |
| Italy | 23,422 | 11,038 | |
| Europe | 25,676 | 24,963 | |
| Middle East | 10,873 | 13,478 | |
| Africa | 9,826 | 16,808 | |
| North and Central America | 21,710 | 21,549 | |
| BRIC and Others | 40,624 | 20,641 | |
| Total revenues | 132,131 | 108,477 |
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2017 | 2016 | 2017 vs. 2016 | % change | |
| Cost of raw materials and consumables | (58,678) | (46,285) | (12,393) | 26.8% | |
| Costs for services | (22,915) | (22,593) | (322) | 1.4% | |
| Payroll costs | (33,412) | (29,190) | (4,222) | 14.5% | |
| Other operating (costs)/revenues, net | (7,433) | (3,312) | (4,121) | 124.4% | |
| Development costs capitalised | 3,929 | 3,513 | 416 | 11.8% | |
| Portion of losses/(gains) from the valuation of Joint Ventures using the equity method |
(38) | 85 | (123) | -144.7% | |
| Operating costs net of depreciation and amortisation | (118,547) | (97,782) | (20,765) | 21.2% |
The table shows an increase in operating costs of Euro 20,756 thousand (+21.2%) lower than the increase in sales (+21.8%). Among the cost items, there is an increase in the cost items for raw materials linked to the higher sales during the period and to their different mix. It should be noted that the comparison with the same period of the previous year is also affected by a different consolidation area that in 2016 included the companies CPT and Bertel only from the date of acquisition (therefore for five months and seven months, respectively).
The increase in the item "Other operating (costs)/revenues, net" is mainly due to higher rental costs of Euro 1.7 million following the lease contract executed at the end of last year and to the non-recurring costs connected with the closing of the Fehlingher litigation described under paragraph 4. Activity, reference market and operating performance for the first nine months of 2017 equal to Euro 1.7 million.
A restatement of the income statement figures representing the performance of EBITDA is provided below:
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2017 | % of revenues | 2016 | % of revenues | 2017 vs. 2016 |
| Operating income | 3,121 | 2.4% | 1,580 | 1.5% | 1,541 |
| + Depreciation and amortisation | 10,463 | 7.9% | 9,115 | 8.4% | 1,348 |
| EBITDA (*) | 13,584 | 10.3% | 10,695 | 9.9% | 2,889 |
(*) EBITDA is represented by the operating income gross of amortisation/depreciation. The EBITDA thus defined represents a measurement used by Company management to monitor and assess the company's operating performance. EBITDA is not recognised as a measure of performance by the IFRS and therefore is not to be considered an alternative measurement for assessing the performance of the Group's operating income. As the composition of EBITDA is not governed by the reference accounting standards, the criterion for determination applied by the Group may not be in line with the criterion adopted by others and is therefore not comparable.
In terms of margins, EBITDA amounts to Euro 13,584 thousand, up by 27.0% over the figure recorded in the first nine months of 2016 and an almost doubled operating income thanks to higher sales volumes.
It is noted that, when comparing the same figure with the previous year, rental costs of Euro 1.7 million are calculated in EBITDA 2017, as a result of the new lease contract realised at the end of last year, which in 2016 were recorded as amortisation and interest expense. Excluding these costs, EBITDA as at 30 September 2017 would have been Euro 15.3 million.
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | 2017 | 2016 | |
| Net Financial Income/Expenses | (2,017) | (3,170) | |
| Foreign exchange gains/losses | (4,561) | (308) | |
| Fair value adjustment of derivative instruments | 112 | 57 | |
| Portion of losses/(gains) from the valuation of equity investments using the equity method |
63 | (177) | |
| Total net financial income/expenses | (6,403) | (3,598) |
The financial management is negatively affected by foreign exchange losses deriving from the adjustment of the currency positions at the exchange rate applicable at year-end due to the effect of the appreciation of the euro against the main currencies with which the holding entertains qualifying and gearing ratios. The main factor that affected this cost is attributable to the different trend in the USD/EUR exchange rate in the two periods of reference (EUR/USD Exchange Rate equal to 1.054 as at 31 December 2016 and 1.1806 as at 30 September 2017). This phenomenon involved losses net of hedging for a total of Euro 4,561 thousand in the first nine months of 2017 against net losses of Euro 308 thousand in the first nine months of 2016.
It should be noted that the amount of Euro 4,561 thousand consists of a positive value of realised exchange rate differences of Euro 97 thousand and a negative value of unrealised exchange rate differences of Euro 4,658 thousand. The latter refers to medium to long-term intercompany positions that could be reabsorbed over time.
Conversely, financial management recorded a lower cost of Euro 1,153 thousand due to the lower cost of indebtedness and to the lower interests due to the effects of the lease contract for the amount of Euro 655 thousand.
The tables below show the income statement figures as at 30 September 2017 compared to those as at 30 September 2016, broken down into three operating segments.
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2017 | % of revenues | 2016 | % of revenues | 2017 vs. 2016 |
| Energy | 44,836 | 33.9% | 30,472 | 28.1% | 14,364 |
| Trencher | 76,083 | 57.6% | 74,276 | 68.5% | 1,807 |
| Rail | 11,212 | 8.5% | 3,729 | 3.4% | 7,483 |
| Total revenues | 132,131 | 100.0% | 108,477 | 100.0% | 23,654 |
In the first nine months of 2017, the Group consolidated revenues of Euro 132,131 thousand, marking an increase of Euro 23,654 thousand compared to Euro 108,477 thousand in the same period of the previous year. In percentage terms, this increase represents a positive difference of 21.8%, which is split unevenly between the Group's three business areas. More specifically, an increase of +47.1% was recorded for the Energy segment, +200.7% for the Rail segment and +2.4% for the Trencher segment.
For all three segments, the trend already seen in the previous quarters is confirmed compared to the same period last year with trenchers that recovered the drop in revenues of the first quarter.
For the Energy segment, revenues as at 30 September 2017 benefit from a general recovery in infrastructure investments in Emerging Countries.
With regard to the Rail segment, the improvement is attributable to the development phase of production activities related to the major orders acquired at the end of 2016.
For the Trencher segment, the trend is mainly attributable to the growth of revenues for service activities.
The tables below show the income statement figures as at 30 September 2017 compared to those as at 30 September 2016, broken down into three operating segments:
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2017 | % of revenues | 2016 | % of revenues | 2017 vs. 2016 |
| Energy | 7,305 | 16.3% | 2,927 | 9.6% | 4,378 |
| Trencher | 4,815 | 6.3% | 7,494 | 10.1% | (2,679) |
| Rail | 1,465 | 13.1% | 274 | 7.3% | 1,191 |
| EBITDA (*) | 13,585 | 10.3% | 10,695 | 9.9% | 2,890 |
(*) EBITDA is represented by the operating income gross of amortisation/depreciation. The EBITDA thus defined represents a measurement used by Company management to monitor and assess the company's operating performance. EBITDA is not recognised as a measure of performance by the IFRS and therefore is not to be considered an alternative measurement for assessing the performance of the Group's operating income. As the composition of EBITDA is not governed by the reference accounting standards, the criterion for determination applied by the Group may not be in line with the criterion adopted by others and is therefore not comparable.
This result is the combined effect of different trends in the three segments:
▪ Energy: the improvement of the EBITDA from Euro 2,927 thousand in the first nine months of 2016 to Euro 7,305
thousand in 2017 is due to higher sales volumes. In percentage terms, the value is 16.3% of revenues in line with the trends that this industry has historically achieved in the past.
Information is provided below on the Group's main equity indicators as at 30 September 2017 compared to 31 December 2016. In particular, the following table shows the reclassified funding sources and uses from the consolidated balance sheet as at 30 September 2017 and as at 31 December 2016:
| As at 30 September 2017 |
As at 31 December 2016 |
|
|---|---|---|
| (Euro in thousands) | ||
| USES | ||
| Net working capital (1) | 68,584 | 76,038 |
| Fixed assets | 68,715 | 70,056 |
| Other long-term assets and liabilities | 1,415 | 517 |
| Net invested capital (2) | 138,714 | 146,611 |
| SOURCES | ||
| Net financial indebtedness (3) | 93,522 | 96,691 |
| Shareholders' equity | 45,192 | 49,920 |
| Total sources of funding | 138,714 | 146,611 |
(1) The net working capital is calculated as current assets net of current liabilities excluding financial assets and financial liabilities. Net working capital is not recognised as a measure of performance by the IFRS. The valuation criteria applied by the Company may not necessarily be the same as those adopted by other groups and therefore the balance obtained by the Company may not necessarily be comparable therewith.
(2) The net invested capital is calculated as net working capital plus fixed assets and other long-term assets less long-term liabilities. The net invested capital is not recognised as a measure of performance under IFRS. The valuation criteria applied by the Company may not necessarily be the same as those adopted by other groups and therefore the balance obtained by the Company may not necessarily be comparable therewith.
(3) The net financial indebtedness is calculated as the sum of cash and cash equivalents, current financial assets including available–for–sale securities, noncurrent financial liabilities, fair value of hedging instruments and other non-current financial assets.
Details of the composition of the "Net Working Capital" as at 30 September 2017 and 31 December 2016 are as follows:
| (Euro in thousands) | As at 30 September 2017 |
As at 31 December 2016 |
|---|---|---|
| Trade receivables | 52,410 | 49,433 |
| Work in progress contracts | 4,454 | 1,291 |
| Inventories | 60,831 | 69,227 |
| Trade payables | (33,199) | (31,197) |
| Other current assets/(liabilities) | (15,912) | (12,716) |
| Net working capital (1) | 68,584 | 76,038 |
(1) The net working capital is calculated as current assets net of current liabilities excluding financial assets and financial liabilities. Net working capital is not recognised as a measure of performance by the IFRS. The valuation criteria applied by the Company may not necessarily be the same as those adopted by other groups and therefore the balance obtained by the Company may not necessarily be comparable therewith.
Net working capital amounted to Euro 68,584 thousand, marking a decrease of Euro 7,454 thousand (equal to 9.8%) compared to 31 December 2016. This trend is mainly due to the decrease in "Inventories" of Euro 8,396 thousand (-12.1%), the increase in "Trade payables" and "Other current assets/(liabilities) for a net amount of Euro 5,198 thousand, partially offset by the increase in the item "Trade receivables" and the increase in "Work in progress contracts" for a total of Euro 6,140 thousand.
The table below shows a breakdown of "Fixed assets" as at 30 September 2017 and 31 December 2016:
| (Euro in thousands) | As at 30 September 2017 |
As at 31 December 2016 |
|---|---|---|
| Intangible assets | 18,161 | 18,891 |
| Property, plant and equipment | 46,808 | 47,289 |
| Equity investments in associates | 3,739 | 3,869 |
| Other equity investments | 7 | 7 |
| Fixed assets | 68,715 | 70,056 |
The total of net fixed assets decreased by Euro 1,341 thousand in that the depreciations made were greater than new investments.
Details of the breakdown of "Net financial indebtedness" as at 30 September 2017 and 31 December 2016 are as follows:
| (Euro in thousands) | As at 30 September 2017 |
of which with related parties and group |
As at 31 December 2016 |
of which with related parties and group |
|---|---|---|---|---|
| Cash and cash equivalents | (21,994) | (18,501) | ||
| Current financial assets (1) | (11,451) | (10,029) | (9,053) | (8,944) |
| Current financial liabilities | 79,427 | 28 | 70,010 | 33 |
| Current portion of derivative financial instruments | 19 | 110 | ||
| Current financial indebtedness (2) | 46,001 | (10,001) | 42,566 | (8,911) |
| Non-current financial liabilities | 47,418 | - | 53,916 | - |
| Non-current portion of derivative financial instruments | 103 | 209 | ||
| Non-current financial indebtedness (2) | 47,521 | - | 54,125 | - |
| Net financial indebtedness pursuant to CONSOB Communication No. DEM/6064293/2006 |
93,522 | (10,001) | 96,691 | (8,911) |
(1) Current financial assets as at 30 September 2017 and 31 December 2016 include the market value of shares and warrants, which are therefore considered cash and cash equivalents.
(2) Current and non-current financial indebtedness is not identified as an accounting element by the IFRS. The valuation criteria applied by the Group may not necessarily be the same as those adopted by other groups and therefore the balances obtained by the Group may not necessarily be comparable therewith.
In the first nine months of 2017, the Group's net financial indebtedness decreased by Euro 3,169 thousand compared to the figure at the end of 2016.
The table below shows the breakdown of the following changes:
▪ the increase in current financial indebtedness of Euro 3,435 thousand whose main effects include:
For the management of financial risks, please see the paragraph "Financial risk management policy" contained in the Explanatory Notes to the Annual Consolidated Financial Statements for 2016, where the Group's policies in relation to the management of financial risks are presented.
In compliance with the Consob communications of 20 February 1997, 27 February 1998, 30 September 1998, 30 September 2002 and 27 July 2006, we specify that during the first nine months of 2017, no transactions took place with related parties of an atypical or unusual nature with no bearing on the company's normal operations or such as to harm the income statement, balance sheet or financial results of the Group.
For significant information on intercompany and related party transactions, please see the paragraph "Related party transactions" in the Explanatory Notes.
The average number of Group employees in the first nine months of 2017, including the employees of companies that are fully consolidated, is 769 persons compared to 659 in 2016.
On 29 April 2016, the Shareholders' Meeting authorised the treasury share buy-back plan; the authorisation was granted for a period of 18 months; the authorisation of 29 April 2016 replaces the last authorisation resolved by the Shareholders' Meeting on 30 April 2015 and expiring in October 2016. The plan set the maximum quantity as 10% of Share Capital; from the launch of the buy-back plan resolved on 10 January 2012 (and renewed on 30 April 2014) to the date of the period covered by this report, 30 June 2017, a total of 4,711,879 shares (4.40% of Share Capital) have been purchased at an average price of Euro 0.5543 (net of commission) for a total equivalent value of Euro 2,612 thousand.
Significant events occurred after 30 September 2017 include the signing of some arrangements with the related party MTS – Officine Meccaniche di Precisione S.p.A. illustrated in the Information Document published on 2 November 2017.
The revenues of the fourth quarter are expected to be higher than those of the third quarter mainly thanks to the development rate of the projects as part of Green Energy where the Group already consolidated its presence and to the deliveries related to the work order of railway wagons with RFI. Therefore, revenues will be achieved at the end of the year of around Euro 180 million and generate a level of EBITDA Adj on revenues of approximately 14%. Finally, a forecast of debt reduction is confirmed thanks to the continuous improvement of working capital.
Consolidated financial statements
| (Euro in thousands) NON-CURRENT ASSETS Intangible assets 6 18,161 18,891 Property, plant and equipment 7 46,808 47,289 Equity investments in associates valued using the equity method 3,739 3,869 Other equity investments 7 7 Financial receivables and other non-current financial assets 195 324 Derivative financial instruments 15 1 3 Deferred tax assets 11,611 11,520 Non-current trade receivables 277 373 TOTAL NON-CURRENT ASSETS 80,799 82,276 CURRENT ASSETS Work in progress contracts 8 4,454 1,291 Inventories 9 60,831 69,227 Trade receivables 10 52,410 49,433 of which with related parties: 10 2,980 753 Tax receivables 903 1,705 Other available-for-sale securities 3 2 Financial receivables and other current financial assets 11 11,448 9,049 of which with related parties: 11 10,029 8,944 Other current assets 5,543 2,816 of which with related parties: 600 - Derivative financial instruments - 2 Cash and cash equivalents 21,994 18,501 TOTAL CURRENT ASSETS 157,586 152,026 TOTAL ASSETS 238,385 234,302 SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS Share capital 12 10,708 10,708 Reserves / (deficit) 12 34,601 41,457 Group net profit / (loss) 12 (1,840) (3,944) TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO PARENT COMPANY 43,469 48,221 SHAREHOLDERS Minority interest in capital and reserves / (deficit) 1,698 1,608 Net profit / (loss) for the period attributable to non-controlling interests 25 91 TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO NON-CONTROLLING 1,723 INTERESTS 1,699 TOTAL SHAREHOLDERS' EQUITY 45,192 49,920 NON–CURRENT LIABILITIES Medium/long-term loans 13 32,637 39,181 Bond issue 14,781 14,735 Derivative financial instruments 15 103 209 Employee benefit liability 3,415 3,680 Deferred tax liabilities 7,240 7,870 Provisions for risks and charges 12 - Other non-current liabilities - 150 Non-current trade payables 2 3 TOTAL NON-CURRENT LIABILITIES 58,190 65,828 CURRENT LIABILITIES Interest-bearing financial payables (current portion) 14 79,427 70,010 of which with related parties: 14 28 33 Derivative financial instruments 15 19 110 Trade payables 33,199 31,197 of which with related parties: 325 153 Advances from customers 7,355 3,463 Income taxes payable 495 199 Provisions for risks and charges 3,619 3,704 Other current liabilities 10,889 9,871 TOTAL CURRENT LIABILITIES 135,003 118,554 TOTAL LIABILITIES 193,193 184,382 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 238,385 234,302 |
Notes | 30 September 2017 | 31 December 2016 |
|---|---|---|---|
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | Notes | 2017 | 2016 |
| Revenues from sales and services | 17 | 132,131 | 108,477 |
| of which with related parties: | 12,915 | 4,387 | |
| Cost of raw materials and consumables | (58,678) | (46,285) | |
| of which with related parties: | (1) | (25) | |
| Costs for services | (22,915) | (22,593) | |
| of which with related parties: | (199) | (238) | |
| Payroll costs | (33,412) | (29,190) | |
| Other operating (costs)/revenues, net | (7,433) | (3,312) | |
| of which with related parties: | (1,573) | 187 | |
| Amortisation and depreciation | (10,463) | (9,115) | |
| Development costs capitalised | 3,929 | 3,513 | |
| Portion of losses/(gains) from the valuation of Joint Ventures using the equity method |
(38) | 85 | |
| Total operating costs | 18 | (129,010) | (106,897) |
| Operating income | 3,121 | 1,580 | |
| Financial expenses | (8,110) | (5,891) | |
| of which with related parties: | - | (655) | |
| Financial income | 1,644 | 2,470 | |
| of which with related parties: | 89 | 97 | |
| Portion of losses/(gains) from the valuation of equity investments using the equity method |
63 | (177) | |
| Pre-tax profit/(loss) | (3,282) | (2,018) | |
| Income tax | 1,467 | 641 | |
| Net profit/(loss) for the period | (1,815) | (1,377) | |
| Profit/(loss) attributable to non-controlling interests | 25 | 50 | |
| Group profit/(loss) | (1,840) | (1,427) | |
| Basic and diluted earnings/(losses) per share | (0.0172) | (0.0133) |
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | Notes | 2017 | 2016 |
| NET PROFIT/(LOSS) FOR THE PERIOD | (1,840) | (1,427) | |
| Other components of comprehensive income | |||
| Other components of comprehensive income that will be subsequently reclassified to net income/(loss) for the year: Exchange differences on conversion of foreign financial statements Other components of comprehensive income that will not be |
12 | (2,975) | (827) |
| subsequently reclassified to net income/(loss) for the year: | |||
| Actuarial profit/(loss) on defined benefit plans | 142 | (251) | |
| Income tax | (34) | 69 | |
| 12 | 108 | (182) | |
| Total other income/(losses) after tax | (2,867) | (1,009) | |
| Total comprehensive income (loss) after tax | (4,707) | (2,436) | |
| Attributable to: | |||
| Equity holders of parent | (6,522) | (3,813) | |
| Minority interests | 1,815 | 1,377 |
| As at 30 September | |||
|---|---|---|---|
| (Euro in thousands) | Notes | 2016 | 2015 |
| CASH FLOW FROM OPERATING ACTIVITIES | |||
| Net profit/(loss) for the period | (1,815) | (1,377) | |
| Adjustments to reconcile net income for the period with the cash flows generated by (used in) operating activities: |
|||
| Amortisation and depreciation | 6-7 | 10,463 | 9,115 |
| Provisions for employee benefit liability | 77 | 533 | |
| Provisions for risks and charges / inventory obsolescence / doubtful accounts | 423 | 864 | |
| Employee benefit payments | (222) | (423) | |
| Payments of provisions for risks and charges | (116) | (22) | |
| Net change in deferred tax assets and liabilities | (1,046) | (1,646) | |
| Change in fair value of financial instruments | 15 | (193) | (58) |
| Change in current assets and liabilities: | |||
| Trade receivables | 10 | 2,964 | (7,520) |
| Inventories | 9 | 2,372 | 5,067 |
| Trade payables | 2,347 | (11,976) | |
| Other current assets and liabilities | (813) | 598 | |
| NET CASH FLOW GENERATED BY OPERATING ACTIVITIES (A) | 14,441 | (6,845) | |
| CASH FLOW FROM INVESTING ACTIVITIES | |||
| Investments in property, plant and equipment | 7 | (11,573) | (11,376) |
| Investments in intangible assets | 6 | (5,176) | (5,538) |
| (Investments) / disposal of financial assets | (2,497) | 5,326 | |
| Changes in the consolidation area | - | (6,538) | |
| Proceeds from sale of property, plant and equipment and intangible assets | 6-7 | 4,771 | 6,223 |
| NET CASH FLOW USED IN INVESTING ACTIVITIES (B) | (14,475) | (11,903) | |
| NET CASH FLOW FROM FINANCING ACTIVITIES | |||
| Disbursement of medium/long-term loans | 16 | 5,909 | 17,657 |
| Repayment of medium/long-term loans | 16 | (19,065) | (17,008) |
| Changes in the consolidation area | - | 930 | |
| Net change in short-term financial debt | 16 | 16,951 | 13,500 |
| Purchase of treasury shares | 12 | - | (316) |
| Other changes | 12 | 42 | 87 |
| Dividend distribution | 12 | - | (2,566) |
| NET CASH FLOW GENERATED BY (USED IN) FINANCING ACTIVITIES (C) | 3,837 | 12,284 | |
| TOTAL CASH FLOW FOR THE PERIOD (D=A+B+C) | 3,803 | (6,464) | |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (E) | (310) | (8) | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD (F) | 18,501 | 21,204 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (G=D+E+F) | 21,994 | 14,732 | |
| Additional information: | |||
| Interest paid | 4,221 | 3,652 | |
| Income tax paid | - | 2,411 |
| (Euro in thousands) | Share capital |
Legal reserve |
Share premium reserve |
Reserve of Treasury Shares |
Translation reserve |
Other reserves |
Net profit/(loss) for the period |
Total Shareholders' equity attributable to Parent Company shareholders |
Total Shareholders ' equity attributable to non controlling interests |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2017 |
10,708 | 2,141 | 10,915 (2,341) | 6,560 | 24,182 | (3,944) | 48,221 | 1,699 | 49,920 | |
| Profit for the period | - | - | - | - | - | - | (1,840) | (1,840) | 25 | (1,815) |
| Other profits/(losses) | - | - | - | - | (2,975) | 108 | - | (2,867) | (4) | (2,871) |
| Total comprehensive income/(loss) |
- | - | - | - | - | - | - | (4,707) | 21 | (4,686) |
| Allocation of profit from the previous year |
- | - | - | - | - | (3,944) | 3,944 | - | - | - |
| Change in the consolidation area |
- | - | - | - | - | (45) | - | (45) | 3 | (42) |
| Purchase of treasury shares | - | - | - | - | - | - | - | - | ||
| Balance as at 30 September 2017 |
10,708 | 2,141 | 10,915 (2,341) | 3,585 | 20,301 | (1,840) | 43,469 | 1,723 | 45,192 |
| (Euro in thousands) | Share capital |
Legal reserve |
Share premium reserve |
Reserve of Treasury Shares |
Translation reserve |
Other reserves |
Net profit/(loss) for the period |
Total Shareholders ' equity attributable to Parent Company shareholders |
Total Shareholders' equity attributable to non controlling interests |
Total shareholders ' equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January | ||||||||||
| 2016 | 10,708 | 2,141 | 10,915 | (2,136) | 5,731 | 19,972 | 6,931 | 54,262 | 1,615 | 55,877 |
| Profit for the period | - | - | - | - | - | - | (1,427) | (1,427) | 50 | (1,377) |
| Other profits/(losses) | - | - | - | - | (827) | (182) | - | (1,009) | 7 | (1,002) |
| Total comprehensive income/(loss) |
- | - | - | - | - | - | - | (2,436) | 57 | (2,379) |
| Allocation of profit from the previous year |
- | - | - | 111 | - | 4,254 | (4,365) | - | - | |
| Dividend distribution | - | - | - | - | - | - | (2,566) | (2,566) | - | (2,566) |
| Change in the consolidation area |
- | - | - | - | - | 106 | - | 106 | (19) | 87 |
| Purchase of treasury shares | - | - | (316) | - | - | - | (316) | - | (316) | |
| Balance as at 30 September 2016 |
10,708 | 2,141 | 10,915 | (2,341) | 4,904 | 24,150 | (1,427) | 49,050 | 1,653 | 50,703 |
The parent company Tesmec S.p.A. (hereinafter "Parent Company" or "Tesmec") is a legal entity organised in accordance with the legal system of the Italian Republic. The ordinary shares of Tesmec are listed on the MTA STAR Segment of the Milan Stock Exchange as from 1 July 2010. The registered office of the Tesmec Group (hereinafter "Group" or "Tesmec Group") is in Milan, Piazza S. Ambrogio 16.
The interim consolidated financial statements as at 30 September 2017 were prepared in condensed form in accordance with International Financial Reporting Standards (IFRS), by using the methods for preparing interim financial reports provided by IAS 34 Interim financial reporting.
The accounting standards adopted in preparing the interim consolidated report on operations as at 30 September 2017 are those adopted for preparing the consolidated financial statements as at 31 December 2016 in compliance with IFRS.
More precisely, the consolidated statement of financial position, income statement, comprehensive income statement, statement of changes in shareholders' equity and statement of cash flows are drawn up in extended form and are in the same format adopted for the consolidated financial statements as at 31 December 2016. The explanatory notes to the financial statements indicated below are in condensed form and therefore do not include all the information required for annual financial statements. In particular, as provided by IAS 34, in order to avoid repeating already disclosed information, the notes refer exclusively to items of the consolidated statement of financial position, the consolidated income statement, the consolidated statement of comprehensive income, the statement of changes in consolidated shareholders' equity and the statement of consolidated cash flows whose breakdown or change, with regard to amount, type or unusual nature, are significant to understanding the economic and financial situation of the Group.
Since the interim condensed consolidated report on operations does not disclose all the information required in preparing the consolidated annual financial statements, it must be read together with the consolidated financial statements as at 31 December 2016.
The interim condensed consolidated report on operations as at 30 September 2017 comprise the consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income, statement of changes in consolidated shareholders' equity, statement of consolidated cash flows and related explanatory notes. Comparative figures are disclosed as required by IAS 34 (31 December 2016 for the statement of financial position and the first nine months of 2016 for the consolidated income statement, comprehensive income statement, statement of changes in shareholders' equity and statement of cash flows).
The interim condensed consolidated report on operations is presented in Euro and all values are rounded to the nearest thousand, unless otherwise indicated.
Disclosure of the interim condensed consolidated report on operations of the Tesmec Group for the period ended 30 September 2017 was authorised by the Board of Directors on 27 October 2017.
The exchange rates used to determine the value in Euros of the financial statements of subsidiary companies expressed in foreign currency (exchange rate to 1 Euro) are shown below:
| Average exchange rates for the | End-of-period exchange rate | ||||
|---|---|---|---|---|---|
| period ended 30 September | as at 30 September | ||||
| 2017 | 2016 | 2017 | 2016 | ||
| US Dollar | 1.103 | 1.116 | 1.181 | 1.116 | |
| Bulgarian Lev | 1.956 | 1.956 | 1.956 | 1.956 | |
| Russian Rouble | 64.434 | 76.305 | 68.252 | 70.514 | |
| South African Rand | 14.578 | 16.702 | 15.944 | 15.524 | |
| Renminbi | 7.540 | 7.343 | 7.853 | 7.446 | |
| Qatar Riyal | 4.016 | 4.062 | 4.297 | 4.063 | |
| Algerian Dinar | 120.678 | 121.649 | 133.478 | 122.317 | |
| Tunisian Dinar | 2.627 | 2.348 | 2.917 | 2.461 | |
| Australian Dollar | 1.448 | 1.505 | 1.508 | 1.466 | |
| New Zealand Dollar | 1.545 | 1.614 | 1.635 | 1.537 | |
| CFA Franc | 655.957 | 655.957 | 655.957 | 655.957 |
On 30 September 2017, the consolidated area changed with respect to that as at 31 December 2016:
The accounting standards adopted for the preparation of the interim condensed consolidated financial statements are the same as those adopted for the preparation of the consolidated financial statements for the year ended 31 December 2016, with the exception of the adoption as of 1 January 2017 of the new standards and amendments. The Group has not adopted in advance any new standard, interpretation or change issued but not yet in force.
The nature and effects of these changes are shown below. Albeit these amendments were applicable for the first time in 2017, they have no significant impact on the interim condensed consolidated financial statements of the Group. The nature and impact of each new standard/amendment is listed below:
The amendments require an entity to provide supplementary information on the changes in liabilities tied to the financing activity, including both the cash flow changes and the non-monetary changes (such as profits and losses on exchange rates). At the time of initial application of this amendment, the entity does not have to submit the comparative information of previous financial periods.
The amendments clarify that an entity must consider whether the tax legislation restricts the sources of taxable income against which it could make deductions associated with the turnover ratio of temporary deductible differences. The amendment also
provides guidelines on how an entity should determine future taxable income, and it explains the circumstances in which the taxable income might include recovery of some assets for a value higher than their book value.
Entities must apply these amendments retrospectively. However, at the time of initial application of the amendments, the change in opening shareholders' equity of the first period of comparison might be recorded under opening retained earnings (or under another shareholders' equity item, as the case may be), without allocating the change to opening retained earnings and the other shareholders' equity items. The entities that apply this facility must report it.
The amendments clarify that the disclosure requirements of IFRS 12, unlike that described under paragraphs B10-B16, apply to the equity investments of an entity in a subsidiary, joint venture or an associate (or to the shareholding in a joint venture or an associate) that is classified (or included in a classified disposal group) as held for sale.
The following standards have been approved by the European Union but will apply from 2018; therefore, they are not applicable by the company in the consolidated financial statements at 30 September 2017.
▪ IFRS 9 "Financial instruments": this standard, approved by the European Union on 29 November 2016, entirely replaces IAS 39 "Financial instruments: recognition and measurement" and introduces two new criteria to recognise and measure financial assets and liabilities. The main changes introduced by IFRS 9 may be summarised as follows: financial assets can be measured either at fair value or at their amortised cost. As a result, the categories "loans and receivables", "available-for-sale financial assets" and "held-to-maturity investments" disappear. Classification within the two categories is carried out on the basis of an entity's business model and the contractual cash flow characteristics of the financial asset. A financial asset is measured at amortised cost if both of the following requirements are met: the objective of the entity's business model is to hold assets to collect contractual cash flows (and therefore in substance not to earn trading profits) and the characteristics of the cash flows of the asset are solely payments of principal and interest. A financial asset is measured at fair value if it is not measured at amortised cost. The rules to account for derivatives have been simplified, as the embedded derivative and the host financial asset are no longer recognised separately.
All equity instruments - listed or unlisted - must be measured at fair value (IAS 39 established on the other hand that unlisted equity instruments should be valued at cost if fair value could not be reliably measured).
An entity has the option of presenting changes in the fair value of equity instruments that are not held for trading in equity; that option is not permitted for equity instruments that are held for trading. This designation is permitted on initial recognition, may be adopted for each individual instrument and is irrevocable. If an election is made for this option, changes in the fair value of these instruments may never be reclassified from equity to the income statement. On the other hand, dividends continue to be recognised in the income statement.
IFRS 9 does not permit reclassifications between the two categories of financial asset except in the rare case of a change in an entity's business model. In this case, the effects of the reclassification are applied prospectively.
The disclosures required to be made in the notes have been adjusted to the classification and measurements rules introduced by IFRS 9. On 19 November 2013, the IASB issued an amendment to this standard that mainly regards the following:
A partial amendment to the standard was issued in July 2014 on the subject of the valuation of financial instruments, with the introduction of the expected-loss impairment model for loans that replaces the impairment model based on realised losses. The amendment in question is applicable from 1 January 2018.
▪ IFRS 15 "Revenue from contracts with customers": the standard, issued by the IASB on 28 May 2014 and approved by the European Union on 29 October 2016, is the result of efforts to achieve convergence between the IASB and the FASB ("Financial Accounting Standard Board", the body responsible for issuing new accounting standards in the United States) in order to achieve a single revenue recognition model applicable both in terms of IFRS and US GAAP. The new standard will apply to all contracts with customers, including contract work in progress, and will thus replace the current IAS 18 - Revenue and IAS 11 - Construction contracts and all related interpretations. A contract with a customer falls within the scope of the standard if all the following conditions are met:
IFRS 15 also includes the disclosure requirements that are significantly more extensive than the existing standard concerning the nature, amounts, timing and uncertainty of revenues and cash flows arising from contracts with customers.
On 11 September 2015, IASB issued an amendment to the standard in question postponing its date of application effective as from 1 January 2018.
During 2016, the company started a preliminary assessment of the effects of IFRS 15 still in the process of being completed.
The extraordinary transactions that occurred during the period include the following:
on 15 March 2017, Cerved Rating Agency, the Italian rating agency specialised in assessing the creditworthiness of non-financial companies, assigned the B1.1 - Good credit rating to the Company;
with reference to the Bond Issue "Tesmec S.p.A. 6% 2014-2021" (the "Bond Issue"), note that because of the company's failure to comply with the financial covenants set out in Art. 12(vi) of the Bond Issue regulations (the "Regulations"), pursuant to Art. 7 of the Regulations, the interest rate applicable to these bonds in the period between 10 April 2018 and 10 April 2019 will be increased 1% more than the initial interest rate, so it will be 7%. To provide complete disclosure, please note that if the Company (i) restores the values of the financial parameters as set out in Art. 12(vi) of the Regulations as at the first date of calculation and verification of said financial parameters - and therefore during 2018 - the interest rate applicable to the bonds in the period between 10 April 2019 and 10 April 2020 will return to 6%, or (ii) restores the values of the financial parameters as set out in Art. 12(vi) of the Regulations as at the second date of calculation and verification of said financial parameters - and therefore during 2019 - the interest rate applicable to the bonds in the period between 10 April 2020 and 10 April 2021 (date of maturity of the Bond Issue) will be 6.5%";
The breakdown and changes in "Intangible assets" as at 30 September 2017 and as at 31 December 2016 are shown in the table below:
| (Euro in thousands) | 01/01/2017 | Increases due to purchases |
Decreases | Reclassifications | Amortisation | Exchange rate differences |
30/09/2017 |
|---|---|---|---|---|---|---|---|
| Development costs | 14,622 | 4,621 | - | - | (4,850) | (225) | 14,168 |
| Rights and trademarks | 2,305 | 51 | - | 1,959 | (829) | (2) | 3,484 |
| Assets in progress and advance payments to suppliers |
1,964 | 504 | - | (1,959) | - | - | 509 |
| Total intangible assets | 18,891 | 5,176 | - | - | (5,679) | (227) | 18,161 |
As at 30 September 2017, intangible assets totalled Euro 18,161 thousand, down Euro 730 thousand on the previous year due to:
▪ development costs capitalised in the first nine months of 2017 of Euro 4,621 thousand, fully offset by amortisation for the period (Euro 4,850 thousand). These costs are related to projects for the development of new products and equipment that are expected to generate positive cash flows in future years;
▪ the reclassification of the period equal to Euro 1,959 thousand from Assets in progress and advance payments to suppliers to Rights and trademarks concerns the allocation of emerging differentials during 2016 relating to the acquisition of the company CPT Engineering and to the line-by-line consolidation of the subsidiary Bertel S.r.l. as from 1 March 2016.
As provided by IFRS 3, within 12 months after the acquisition, these differentials were allocated among rights and trademarks in that they relate to the Know How acquired that will be amortised over a five year period.
The breakdown and changes in "Property, plant and equipment" as at 30 September 2017 and as at 31 December 2016 are shown in the table below:
| (Euro in thousands) | 01/01/2017 | Increases due to purchases |
Decreases | Reclassifications | Depreciation | Exchange rate differences |
30/09/2017 |
|---|---|---|---|---|---|---|---|
| Land | 1,797 | - | - | - | (6) | (23) | 1,768 |
| Buildings | 11,595 | 235 | - | 26 | (355) | (649) | 10,852 |
| Plant and machinery | 4,657 | 263 | - | (146) | (765) | (148) | 3,861 |
| Equipment | 1,607 | 745 | (74) | (156) | (391) | (2) | 1,729 |
| Other assets | 27,111 | 10,321 | (4,697) | 276 | (3,267) | (1,677) | 28,067 |
| Assets in progress and advance payments to suppliers |
522 | 9 | - | - | - | - | 531 |
| Total property, plant and equipment | 47,289 | 11,573 | (4,771) | - | (4,784) | (2,499) | 46,808 |
As at 30 September 2017, property, plant and equipment totalled Euro 46,808 thousand, down compared to the previous year by Euro 481 thousand.
The change is due to the capitalisation of trencher machines registered in the fleet following the drawing-up of new lease contracts offset by the sale of trencher machines and by depreciations for the period.
The following table sets forth the breakdown of Work in progress contracts as at 30 September 2017 and as at 31 December 2016:
| (Euro in thousands) | 30 September 2017 | 31 December 2016 |
|---|---|---|
| Work in progress (Gross) | 6,249 | 1,291 |
| Advances from contractors | (1,795) | - |
| Work in progress contracts | 4,454 | 1,291 |
| Advances from contractors (Gross) | - | - |
| Work in progress (Gross) | - | - |
| Advances from contractors | - | - |
"Work in progress" refers exclusively to the rail segment where the machinery is produced in accordance with specific customer requirements. "Work in progress" is recognised as an asset if, on the basis of an analysis carried out for each contract, the gross value of work in progress is greater than advances from customers; it is recognised as a liability if the advances are greater than the related work in progress.
If the advances are not collected at the reporting date, the corresponding amount is recognised as trade receivables. The change for the period is mainly due to the progress of orders in the Rail segment and the advances refer to the invoicing of states of progress of works not yet completed.
The following table provides a breakdown of Inventories as at 30 September 2017 compared to 31 December 2016:
| (Euro in thousands) | 30 September 2017 | 31 December 2016 |
|---|---|---|
| Raw materials and consumables | 37,561 | 32,803 |
| Work in progress | 13,791 | 12,360 |
| Finished products and goods for resale | 9,214 | 23,958 |
| Advances to suppliers for assets | 265 | 106 |
| Total Inventories | 60,831 | 69,227 |
Inventories compared to 31 December 2016 decreased by Euro 8,396 thousand thanks to the sales in the first nine months of 2017.
The following table provides a breakdown of Trade receivables as at 30 September 2017 and as at 31 December 2016:
| (Euro in thousands) | 30 September 2017 | 31 December 2016 |
|---|---|---|
| Trade receivables from third-party customers | 49,430 | 48,680 |
| Trade receivables from associates, related parties and joint ventures | 2,980 | 753 |
| Total trade receivables | 52,410 | 49,433 |
The increase in trade receivables (6.0%) reflects the trend of sales for the period concentrated in September in particular. The balance of trade receivables due from related parties increased by Euro 2,227 thousand mainly due to higher sales to the
related party M.T.S. Officine meccaniche S.p.A. For further information, please see the paragraph 19.Related party transactions in the Explanatory Notes.
The following table provides a breakdown of financial receivables and other current financial assets as at 30 September 2017 and as at 31 December 2016:
| (Euro in thousands) | 30 September 2017 | 31 December 2016 |
|---|---|---|
| Financial receivables due from associates, related parties and joint ventures | 10,029 | 8,944 |
| Financial receivables from third parties | 1,376 | 47 |
| Other current financial assets | 43 | 58 |
| Total financial receivables and other current financial assets | 11,448 | 9,049 |
The increase in current financial assets from Euro 9,049 thousand to Euro 11,448 thousand is mainly due to the increase in financial receivables from third parties by Euro 1,329 thousand for a receivable accrued following the positive ruling of the arbitration board on a litigation with a Chinese trading company and from related parties by Euro 1,085 thousand where receivables from related parties M.T.S. Officine meccaniche S.p.A. and MTS4SERVICE USA L.L.C. increased.
The share capital amounts to Euro 10,708 thousand, fully paid in, and is comprised of 107,084,000 shares with a par value of Euro 0.1 each.
The following table provides a breakdown of Other reserves as at 30 September 2017 and as at 31 December 2016:
| 30 September 2017 | 31 December 2016 | |
|---|---|---|
| (Euro in thousands) | ||
| Revaluation reserve | 86 | 86 |
| Extraordinary reserve | 26,942 | 25,294 |
| Change in the consolidation area | (45) | 125 |
| Severance indemnity valuation reserve | (371) | (479) |
| Network Reserve | 824 | 824 |
| Retained earnings/(losses brought forward) | (3,087) | 2,380 |
| Bills charged directly to shareholders' equity | ||
| on operations with entities under common control | (4,048) | (4,048) |
| Total other reserves | 20,301 | 24,182 |
The revaluation reserve is a reserve in respect of which tax has been deferred, set up in accordance with Italian Law 72/1983.
The value of the difference from translation of financial statements, posted to the Translation reserve, amounted to Euro 3,585 thousand and has a negative impact on Shareholders' Equity of Euro 2,975 thousand as at 30 September 2017.
As a result of the resolution of 28 April 2017, with the approval of the 2016 financial statements, the Shareholders' Meeting of Tesmec S.p.A. decided to allocate the profit of the Parent Company of Euro 1,648 thousand to the extraordinary reserve.
During the first nine months of 2017, medium-long term loans decreased from Euro 39,181 thousand to Euro 32,637 thousand mainly due to the following effects:
The following table provides details of this item as at 30 September 2017 and as at 31 December 2016:
| (Euro in thousands) | 30 September 2017 | 31 December 2016 |
|---|---|---|
| Advances from banks against invoices and bills receivables | 39,365 | 28,011 |
| Other financial payables (short-term leases) | 1,168 | 1,099 |
| Payables due to factoring companies | 5,427 | 2,201 |
| Current account overdrafts | 3,873 | 779 |
| Short-term loans to third parties | 3,274 | 4,896 |
| Current portion of medium/long-term loans | 26,222 | 32,952 |
| Other short-term financial payables | 98 | 72 |
| Total interest-bearing financial payables (current portion) | 79,427 | 70,010 |
The increase in the current portion of medium/long-term loans refers mainly to greater advances on export.
The following table shows a summary of the financial instruments, other than cash and cash equivalents, owned by the Group as at 30 September 2017:
| (Euro in thousands) | Loans and receivables/ financial liabilities measured at amortised cost |
Guarantee deposits |
Cash and cash equivalents |
Available-for sale financial assets |
Fair value recognised in the income statement |
|---|---|---|---|---|---|
| Financial assets: | |||||
| Guarantee deposits | - | 195 | - | - | - |
| Trade receivables | 277 | - | - | - | - |
| Derivative financial instruments | - | - | - | - | 1 |
| Total non-current | 277 | 195 | - | - | 1 |
| Trade receivables | 52,410 | - | - | - | - |
| Financial receivables from related parties | 10,029 | - | - | - | - |
| Financial receivables from third parties | 1,419 | - | - | - | - |
| Other available-for-sale securities | - | - | - | 3 | - |
| Cash and cash equivalents | - | - | 21,994 | - | - |
|---|---|---|---|---|---|
| Total current | 63,858 | - | 21,994 | 3 | - |
| Total | 64,135 | 195 | 21,994 | 3 | 1 |
| Financial liabilities: | |||||
| Loans | 9,938 | - | - | - | - |
| Bond issue | 14,781 | - | - | - | - |
| Non-current portion of finance leases, net | 22,699 | - | - | - | - |
| Derivative financial instruments | - | - | - | - | 103 |
| Trade payables | 2 | - | - | - | - |
| Total non-current | 47,420 | - | - | - | 103 |
| Loans | 26,320 | - | - | - | - |
| Other financial payables (short-term leases) | 1,168 | - | - | - | - |
| Other short-term payables | 51,939 | - | - | - | - |
| Derivative financial instruments | - | - | - | - | 19 |
| Trade payables | 33,199 | - | - | - | - |
| Total current | 112,626 | - | - | - | 19 |
| Total | 160,046 | - | - | - | 122 |
Within its scope of operations, the Group is exposed, to a greater or lesser extent, to certain types of risk that are managed as follows.
The Group does not hold derivatives or similar products for purely speculative purposes.
The Tesmec Group's exposure to interest rate risk is managed by taking overall exposure into consideration: as part of the general policy to optimise financial resources, the Group seeks equilibrium, by using less expensive forms of financing.
With regard to the market risk due to changes in the interest rate, the Group's policy is to hedge the exposure related to the portion of medium to long-term indebtedness. Derivative instruments such as Swaps, Collars and Caps are used to manage this risk.
As at 30 September 2017, there were six positions related to derivative instruments of interest rate swap hedging the risk related to the potential increase in interest bearing financial payables (current portion) due to fluctuating market rates. The notional value of these positions was equal to Euro 13.1 million, with a negative equivalent value of Euro 80 thousand. Moreover, there were four positions related to derivative instruments of Cap interest rate; the notional value of these positions was equal to Euro 9.8 million, with a negative equivalent value of Euro 41 thousand.
A significant portion of the Group's revenues is generated by sales in foreign countries, including developing countries.
The main transaction currencies used for the Group's sales are the Euro and the US Dollar. The Group believes that if the exchange rate fluctuations of these two currencies are low, there is no risk to operating margins, insofar as the sale price could be adapted on each occasion to the exchange rate. However, if the US dollar were to depreciate significantly against the Euro, we cannot exclude negative effects on margins to the extent that a good portion of sales in US dollars concerns the productions of Italian factories that operate with costs in the Eurozone.
With regard to net exposure that is mainly represented by loans in US Dollars of Tesmec S.p.A., the forward buying of the American currency is adopted as the only hedging instrument. However, these hedges are carried out only for one part of the total exposure in that the timing of the inflow of the receipts in dollars is difficult to predict at the level of each sales invoice. Besides, for a good part of the sales in dollars, the Group uses the production of the American factory with costs in US dollars by creating in this way a sort of natural hedging of the currency exposure.
Forward sale instruments for fixing the exchange rate at the moment of the order are mainly used for covering the risk of the dollar exposure deriving from:
i) selling trenchers produced in Italy in Middle-East countries;
ii) selling stringing machines produced in Italy in the USA where purchases are in Euro, and sales in US dollars.
Despite the adoption of the above strategies aimed at reducing the risks arising from fluctuation of exchange rates, the Group cannot exclude that future changes thereof might affect the results of the Group. Fluctuations in exchange rates could also significantly affect the comparability of the results of each financial period.
As at 30 September 2017, there were no forward cover contracts.
For the Group, credit risk is closely linked to the sale of products on the market. In particular, the extent of the risk depends on both technical and commercial factors and the purchaser's solvency.
From a commercial viewpoint, the Group is not exposed to a high credit risk insofar as it has been operating for years in markets where payment on delivery or letter of credit issued by a prime international bank are usually used as payment methods. For customers located in the European region, the Group mainly uses factoring without recourse. The provisions for doubtful accounts are considered to be a good indication of the extent of the overall credit risk.
In general, price risk is linked to the fluctuation of commodity prices.
Specifically, the price risk of the Group is mitigated by the presence of many suppliers of raw materials as well as by the need to be sure on the supply volumes, in order not to affect the warehouse stock.
In reality, this risk seems remote for two fundamental reasons:
the existence and use of alternative suppliers;
the heterogeneity of raw materials and components used in the production of the Tesmec machinery: it is unlikely for all of them to be affected by increasing price tensions at the same time.
In particular, in the current market situation, this risk seems particularly weakened by the situation of oversupply in many markets.
The management of financial requirements and related risks (mainly interest rate risks, liquidity and exchange rate risks) is carried out by the Group on the basis of guidelines defined by the Group General Management and approved by the Chief Executive Officer of the Parent Company.
The main purpose of these guidelines is to guarantee the presence of a liability structure always in equilibrium with the structure of the balance sheet assets, in order to keep a very sound balance sheet structure.
Forms of financing most commonly used are represented by:
The average cost of indebtedness is benchmarked to the trend of the 1/3-month Euribor rates for short-term loans and of the 3/6-month Euribor rates for medium to long-term loans. Some interest rate hedges have been set in place for floating mediumlong term loans. Loan contracts signed with ICCREA-BCC, BNL and Comerica contain certain financial covenant clauses.
The Tesmec Group adopts a supply policy aimed at diversifying the suppliers of components that are characterised by purchased volumes or by high added value. However, the termination for any reason of these supply relations could imply for the Group supply problems of such raw materials, semi-finished and finished goods as for quantity and time suitable for ensuring the continuity of production, or the provisioning could lead to time issues for achieving quality standards already acquired with the old supplier.
In relation to financial instruments measured at fair value, the following table shows the classification of such instruments on the basis of the hierarchy of levels required by IFRS 13, which reflects the significance of the inputs used in measuring the fair value. The levels are broken down as follows:
The following table shows the assets and liabilities that are measured at fair value as at 30 September 2017, divided into the three levels defined above:
| (Euro in thousands) | Book value as at 30 September 2017 |
Level 1 | Level 2 | Level 3 |
|---|---|---|---|---|
| Financial assets: | ||||
| Derivative financial instruments | 1 | - | 1 | - |
| Total non-current | 1 | - | 1 | - |
| Other available-for-sale securities | 3 | - | - | 3 |
| Total current | 3 | - | - | 3 |
| Total | 4 | - | 1 | 3 |
| Financial liabilities: | ||||
| Derivative financial instruments | 103 | - | 103 | - |
| Total non-current | 103 | - | 103 | - |
| Derivative financial instruments | 19 | - | 19 | - |
| Total current | 19 | - | 19 | - |
| Total | 122 | - | 122 | - |
The table below shows the breakdown of Revenues from sales and services as at 30 September 2017 and as at 30 September 2016:
| As at 30 September | |||||
|---|---|---|---|---|---|
| (Euro in thousands) | 2017 | 2016 | |||
| Sales of products | 95,409 | 84,817 | |||
| Services rendered | 30,474 21,572 |
||||
| 125,883 | 106,389 | ||||
| Changes in work in progress | 6,248 | 2,088 | |||
| Total revenues from sales and services | 132,131 | 108,477 |
In the first nine months of 2017, the Group consolidated revenues of Euro 132,131 thousand, marking an increase of Euro 23,654 thousand compared to Euro 108,477 thousand in the same period of the previous year. In percentage terms, this increase represents a positive difference of 23.2%, which is split unevenly between the Group's three business areas. More specifically, an increase of +47.1% was recorded for the Energy segment, +200.7% for the Rail segment and +2.4% for the Trencher segment.
The trend of the three segments is shown below:
The item Operating costs amounted to Euro 118,547 thousand, an increase of 21.2% compared to the previous year, a less than proportional increase with respect to the performance in revenues (21.8%).
For management purposes, the Tesmec Group is organised into strategic business units on the basis of the nature of the goods and services supplied, and presents three operating segments for disclosure purposes:
Energy segment
▪ machines and integrated systems for overhead and underground stringing of power lines and fibre optic cables; integrated solutions for the streamlining, management and monitoring of low, medium and high voltage power lines (smart grid solutions).
▪ Machines and integrated systems for the installation, maintenance and diagnostics of the railway catenary wire system, plus customised machines for special operations on the line.
No operating segment has been aggregated in order to determine the indicated operating segments subject-matter of the reporting.
| As at 30 September | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2017 | 2016 | |||||||
| (Euro in thousands) | Energy | Trencher | Rail | Consolidated | Energy | Trencher | Rail | Consolidated |
| Revenues from sales and services | 44,836 | 76,083 | 11,212 | 132,131 | 30,472 | 74,276 | 3,729 | 108,477 |
| Operating costs net of depreciation and amortisation |
(37,531) | (71,268) | (9,747) | (118,546) | (27,545) | (66,782) | (3,455) | (97,782) |
| EBITDA | 7,305 | 4,815 | 1,465 | 13,585 | 2,927 | 7,494 | 274 | 10,695 |
| Amortisation and depreciation | (3,095) | (5,693) | (1,676) | (10,464) | (2,582) | (5,065) | (1,468) | (9,115) |
| Total operating costs | (40,626) | (76,961) | (11,423) | (129,010) | (30,127) | (71,847) | (4,923) | (106,897) |
| Operating income | 4,210 | (878) | (211) | 3,121 | 345 | 2,429 | (1,194) | 1,580 |
| Net financial income/(expenses) | (6,403) | (3,598) | ||||||
| Pre-tax profit/(loss) | (3,282) | (2,018) | ||||||
| Income tax | 1,467 | 641 | ||||||
| Net profit/(loss) for the period | (1,815) | (1,377) | ||||||
| Profit/(loss) attributable to non controlling interests |
25 | 50 | ||||||
| Group profit/(loss) | (1,840) | (1,427) |
(*) EBITDA is represented by the operating income gross of amortisation/depreciation. The EBITDA thus defined represents a measurement used by Company management to monitor and assess the company's operating performance. EBITDA is not recognised as a measure of performance by the IFRS and therefore is not to be considered an alternative measurement for assessing the performance of the Group's operating income. As the composition of EBITDA is not governed by the reference accounting standards, the criterion for determination applied by the Group may not be in line with the criterion adopted by others and is therefore not comparable.
Management monitors the operating income of its business units separately for the purpose of making decisions on resource allocation and performance assessment. Segment performance is assessed on the basis of operating income. Group financial management (including financial income and charges) and income tax are managed at Group level and are not allocated to the individual operating segments.
The following table shows the consolidated statement of financial position by business segment as at 30 September 2017 and as at 31 December 2016:
| As at 30 September 2017 | As at 31 December 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Euro in thousands) | Energy | Trencher | Rail | Not allocated |
Consolidated | Energy | Trencher | Rail | Not allocated |
Consolidated |
| Intangible assets | 10,723 | 4,214 | 3,224 | - | 18,161 | 10,655 | 3,526 | 4,710 | - | 18,891 |
| Property, plant and equipment | 1,895 | 44,651 | 262 | - | 46,808 | 1,966 | 45,209 | 114 | - | 47,289 |
| Financial assets | 3,141 | 762 | 12 | 27 | 3,942 | 3,289 | 776 | 138 | - | 4,203 |
| Other non-current assets | 1,341 | 3,163 | 86 | 7,298 | 11,888 | 1,169 | 3,113 | 95 | 7,516 | 11,893 |
| Total non-current assets | 17,100 | 52,790 | 3,584 | 7,325 | 80,799 | 17,079 | 52,624 | 5,057 | 7,516 | 82,276 |
| Work in progress contracts | - | - | 4,454 | - | 4,454 | - | - | 1,291 | - | 1,291 |
| Inventories | 16,554 | 43,253 | 1,024 | - | 60,831 | 15,366 | 53,151 | 710 | - | 69,227 |
| Trade receivables | 14,102 | 37,350 | 958 | - | 52,410 | 15,387 | 33,600 | 446 | - | 49,433 |
| Other current assets | 1,247 | 2,813 | 892 | 12,945 | 17,897 | 2,312 | 2,740 | 30 | 8,492 | 13,574 |
| Cash and cash equivalents | 1,145 | 904 | 2,697 | 17,248 | 21,994 | 818 | 487 | 1,425 | 15,771 | 18,501 |
| Total current assets | 33,048 | 84,320 | 10,025 | 30,193 | 157,586 | 33,883 | 89,978 | 3,902 | 24,263 | 152,026 |
| Total assets | 50,148 | 137,110 | 13,609 | 37,518 | 238,385 | 50,962 | 142,602 | 8,959 | 31,779 | 234,302 |
| Shareholders' equity attributable to Parent Company Shareholders |
- | - | - | 43,469 | 43,469 | - | - | - | 48,221 | 48,221 |
| Shareholders' equity attributable to non-controlling interests |
- | - | - | 1,723 | 1,723 | - | - | - | 1,699 | 1,699 |
| Non-current liabilities | 804 | 7,825 | 1,473 | 48,088 | 58,190 | 971 | 10,217 | 1,712 | 52,928 | 65,828 |
| Current financial liabilities | - | - | - | 79,446 | 79,446 | - | - | - | 70,120 | 70,120 |
| Trade payables | 9,601 | 20,202 | 3,396 | - | 33,199 | 10,620 | 18,244 | 2,333 | - | 31,197 |
| Other current liabilities | 1,108 | 7,414 | 600 | 13,236 | 22,358 | 1,557 | 7,609 | 404 | 7,667 | 17,237 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total current liabilities | 10,709 | 27,616 | 3,996 | 92,682 | 135,003 | 12,177 | 25,853 | 2,737 | 77,787 | 118,554 |
| Total liabilities | 11,513 | 35,441 | 5,469 | 140,770 | 193,193 | 13,148 | 36,070 | 4,449 | 130,715 | 184,382 |
| Total shareholders' equity and liabilities |
11,513 | 35,441 | 5,469 | 185,962 | 238,385 | 13,148 | 36,070 | 4,449 | 180,635 | 234,302 |
The following table gives details of economic and equity transactions with related parties. The companies listed below have been identified as related parties as they are linked directly or indirectly to the current shareholders:
| As at 30 September 2017 | As at 30 September 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Euro in thousands) | Revenues | Cost of raw materials |
Costs for services |
Other operating (costs)/ revenues, net |
Financial income and expenses |
Revenues | Cost of raw materials |
Costs for services |
Other operating (costs)/ revenues, net |
Financial income and expenses |
| Associates: | ||||||||||
| Locavert S.A. | 778 | - | - | - | - | 602 | - | - | - | - |
| SEP Semofor 77 | - | - | - | - | - | - | - | - | 4 | - |
| Subtotal | 778 | - | - | - | - | 602 | - | - | 4 | - |
| Joint Ventures: | ||||||||||
| Condux Tesmec Inc. | 1,945 | - | - | 133 | 4 | 1,154 | - | - | 134 | 36 |
| Tesmec Peninsula | - | - | (22) | 53 | 85 | - | - | - | 81 | 61 |
| Subtotal | 1,945 | - | (22) | 186 | 89 | 1,154 | - | - | 215 | 97 |
| Related parties: | ||||||||||
| Ambrosio S.r.l. | - | - | - | (11) | - | - | - | - | (11) | - |
| TTC S.r.l. | - | - | (21) | - | - | - | - | (21) | - | - |
| CBF S.r.l. | - | - | - | - | - | - | - | - | 1 | - |
| Ceresio Tours S.r.l. | - | - | (5) | - | - | - | - | (4) | - | - |
| Dream Immobiliare S.r.l. | - | - | - | (1,684) | - | - | - | - | (244) | (655) |
| CONAI | - | - | - | - | - | - | (2) | - | - | - |
| FI.IND. S.p.A. | - | - | - | 60 | - | - | - | - | - | - |
| Lame Nautica S.r.l. | 11 | - | - | - | - | - | - | - | - | - |
| M.T.S. Officine meccaniche S.p.A. | 5,715 | (1) | 34 | (124) | - | 2,583 | (1) | 3 | 8 | - |
| MTS4SERVICE USA L.L.C | 4,359 | - | - | - | - | - | - | - | - | - |
| Reggiani Macchine S.p.A. | - | - | - | - | - | 78 | (22) | (216) | 214 | - |
| Fintetis SARL | - | - | - | - | - | (30) | - | - | - | - |
| C2D | 1 | - | (185) | - | - | - | - | - | - | - |
| Comatel | 106 | - | - | - | - | - | - | - | - | - |
| Subtotal | 10,192 | (1) | (177) | (1,759) | - | 2,631 | (25) | (238) | (32) | (655) |
| Total | 12,915 | (1) | (199) | (1,573) | 89 | 4,387 | (25) | (238) | 187 | (558) |
| 30 September 2017 | 31 December 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Trade receivables |
Other current |
Current financial |
Current financial |
Trade payables |
Trade receivables |
Other current |
Current financial |
Current financial |
Trade payables |
|
| (Euro in thousands) | assets | receivables | payables | assets | receivables | payables | ||||
| Associates: | ||||||||||
| Locavert S.A. | 515 | - | - | - | - | 78 | - | - | - | - |
| SEP Moselle | - | - | - | 28 | - | - | - | 32 | - | - |
| SEP Semafor 77 | - | - | - | - | - | - | - | - | 20 | - |
| SEP Laison | - | - | - | - | - | - | - | - | 13 | - |
| SEP College | - | - | - | - | - | - | - | 6 | - | - |
| Subtotal | 515 | - | 28 | - | 78 | 38 | 33 | - | ||
| Joint Ventures: | ||||||||||
| Condux Tesmec Inc. | 242 | - | 447 | - | - | 206 | - | 332 | - | - |
| Tesmec Peninsula | 27 | - | 1,961 | - | 8 | 39 | - | 3,508 | - | 34 |
| Marais Tunisie | - | - | 1 | - | - | - | - | 2 | - | - |
| Marais Lucas | - | - | 794 | - | - | - | - | 794 | - | - |
| Subtotal | 269 | - | 3,203 | - | 8 | 245 | - | 4,636 | - | 34 |
| Related parties: | ||||||||||
| Ambrosio S.r.l. | - | - | - | - | 4 | - | - | - | - | 4 |
| Ceresio Tours S.r.l. | - | - | - | - | - | - | - | - | - | 1 |
| Dream Immobiliare S.r.l. | - | - | 2,527 | - | 141 | - | - | 4,270 | - | 212 |
| TTC S.r.l. | - | - | - | - | 25 | - | - | - | - | - |
| Lame Nautica S.r.l. | 11 | - | - | - | - | - | - | - | - | - |
| M.T.S. Officine meccaniche S.p.A. | 2,178 | - | 2,912 | - | 131 | 308 | - | - | - | - |
| MTS4SERVICE USA L.L.C | - | - | 1,387 | - | - | - | - | - | - | - |
| Reggiani Macchine S.p.A. | - | - | - | - | - | 122 | - | - | - | (112) |
| Comatel | 7 | - | - | - | - | - | - | - | - | - |
| C2D | - | 600 | - | - | 16 | - | - | - | - | 14 |
| Subtotal | 2,196 | 600 | 6,826 | - | 317 | 430 | - | 4,270 | - | 119 |
| Total | 2,980 | 600 | 10,029 | 28 | 325 | 753 | - | 8,944 | 33 | 153 |
Significant events occurred after 30 September 2017 include the signing of some arrangements with the related party MTS – Officine Meccaniche di Precisione S.p.A. illustrated in the Information Document published on 2 November 2017.
of the administrative and accounting procedures adopted to prepare the Interim consolidated report on operations as at 30 September 2017.
Grassobbio, 27 October 2017
Ambrogio Caccia Dominioni Andrea Bramani
Chief Executive Officer Manager responsible for preparing the Company's financial statements
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