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Landi Renzo
Earnings Release • Nov 30, 2022
4295_10-q_2022-11-30_a946f296-0f40-4f30-a8fb-eccb22cdae63.pdf
Earnings Release
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| Informazione Regolamentata n. 0915-69-2022 |
Data/Ora Ricezione 30 Novembre 2022 21:24:24 |
Euronext Star Milan | |
|---|---|---|---|
| Societa' | : | LANDI RENZO | |
| Identificativo Informazione Regolamentata |
: | 170025 | |
| Nome utilizzatore | : | LANDIN03 - Cilloni | |
| Tipologia | : | REGEM | |
| Data/Ora Ricezione | : | 30 Novembre 2022 21:24:24 | |
| Data/Ora Inizio Diffusione presunta |
: | 30 Novembre 2022 21:24:25 | |
| Oggetto | : | PR - Financial Results 30 09 2022 | |
| Testo del comunicato |
Vedi allegato.
Landi Renzo: Board of Directors approves results as of September 30, 2022
- Consolidated revenues of €216.4 million, up (+33.1%) from €162.6 million as of September 30, 2021. On a like-for-like basis, consolidated revenues are up 11.4% compared to the same period in 2021.
- Adjusted EBITDA was equal to €8.7 million (+15.2%), corresponding to 4% of revenues, compared to €7.6 million as of September 30, 2021.
- EBITDA amounted to €7.1 million, increased by €1.1 million and equal to 3.3% of revenues (€6 million as of September 30, 2021).
- Net Result was negative for €9.9 million, compared to a loss of €1.1 million as of September 30, 2021, including €8.8 million capital gain from the consolidation of SAFE&CEC in May 2021.
- Net Financial Position was negative and amounted to €100.3 million (negative and equal to €133.5 million as of December 31, 2021). Adjusted Net Financial Position as of September 30, 2022 was €85.4 million, including €19 million related to the Clean Tech Solutions segment and €66.4 million related to the Green Transportation segment.
- The Group's management structure has been strongly strengthened. By appointing our Chief Financial Officer and Financial Reporting Manager in charge of drawing the Company's financial statements, Chief Operations Officer and Head of Strategy and Business Development, the Group improves and speeds up on streamlining operations and achieving the plan's targets.
- Hydrogen developments are progressing both in the Clean Tech Solutions segment, with a significant order book and several negotiations already in place, and in the Green Transportation field, with a substantial number of initiatives underway.
Cavriago (RE), November 30th, 2022 - The Board of Directors of Landi Renzo, chaired by Stefano Landi, gathered today and approved the quarterly financial report as of September 30, 2022.
Energy transition and sustainable mobility are once again at the core of governments' strategies, as they engage in a global commitment to reduce climate change's effects through the development of new energy model propelled by renewable energies, such as the REPowerEU plan and the Us Inflation Act, highlighting, among other things, the key role of hydrogen and biomethan. In this context, Landi Renzo Group's positioning is strengthened as it is involved along the value chains of both the distribution of natural gas, biomethane and hydrogen ("Clean Tech Solutions" sector) and the so-called Green Mobility, along with a rising number of Group's biomethane and hydrogen-based projects.
"This quarter, characterized by a backdrop filled with many turbulent elements impacting many sectors, including the automotive one, was marked by the successful closing of a major capital increase, involving a long-term investor such as Itaca Equity Holding joining Landi Renzo to support the Group's growth in both the compression and automotive segments. This operation will allow Landi Renzo to secure the necessary funding to strengthen its position in global energy transition trends, also by means of an effective investment plan," Stefano Landi, Chairman of Landi Renzo S.p.A., said.
Cristiano Musi, Chief Executive Officer at Landi Renzo S.p.A., added, "The third quarter showed a consistent resilience of Landi Renzo's presence in the sectors in which it operates. The Group succeeded in maintaining, and in some segments improving, its market share, reflecting a sound strategy. However, the quarter was impacted by cost dynamics and some components shortages, which produced an impact on margins and led to an increase in inventory and semi-finished goods. Therefore, we have implemented several tangible measures to recover extra costs and to quickly achieve a more effective management of the working capital, whose implementation, however, was initially slowed down as a result of the cyberattack experienced by the Group. The most important step along this path was the significant strengthening of the Group's management structure, with the appointment of the new CFO, Vittorio Tavanti, of the new Group COO, Corrado Belicchi, and the new Head of Strategy and Business Development, Giorgio Maria Nero. We are sure that the experience and expertise that these professionals will bring to the Group will contribute greatly to our development project."
Results highlights as of September 30, 2022
As a result of the shift in the scope of consolidation, due to the full consolidation as of May 2021 of SAFE&CEC Group's results, as of August 2021 of Metatron Group's results, and the consolidation of Idro Meccanica S.r.l. as of January 2022, the consolidated financial results, as of September 30, 2022, are not directly comparable with those of the same period of the previous year.
Consolidated revenues in the first nine months of 2022 amounted to €216,351 thousand, up by €53,793 thousand (+33.1%) compared to the same period last year. On a like-for-like basis, the consolidated revenue rise is up 11.4% compared to the first nine months of 2021.
Group's adjusted EBITDA in the first nine months of 2022 was equal to €8,704 thousand, or 4% of revenues, compared to €7,555 thousand (4.6% of revenues) in the same period last year.
Group's EBITDA amounted to €7,070 thousand (€5,952 thousand as of September 30, 2021), and it included non-recurring costs amounting to €1,634 thousand (€1,603 thousand as of September 30, 2021).
Group's EBIT was negative at €5,995 thousand (negative and amounting to €5,437 thousand as of September 30, 2021), after accounting amortizations and depreciations of €13,065 thousand (€11,389 thousand as of September 30, 2021), including €2,626 thousand due to the application of IFRS 16 - Leases (€2,123 thousand as of September 30, 2021).
Total financial expenses (interest income, interest expense, and exchange rates effects) amounted to €3,368 thousand (€3,621 thousand as of September 30, 2021) and included positive exchange rate effects amounting to €1,128 thousand (negative and amounting to €690 thousand as of September 30, 2021).
Group's EBT was negative and amounted to €8,873 thousand in the first nine months of the year. As of September 30, 2021, Earnings Before Taxes (EBT) was negative and amounted to €71 thousand, including an aggregation gain of €8,783 thousand, resulting from the line-by-line consolidation as of April 2021 of the SAFE&CEC Group, which was previously consolidated using the equity method.
Group and third-party's Net Result for the reporting period as of September 30, 2022 reported a €9,892 thousand loss, considering Group and third-party's loss of €1,067 thousand as of September 30, 2021, including the proceeds of aggregation of € 8,783 thousand shown above.
Net Financial Position as of September 30, 2022 amounted to €100,270 thousand (€133,493 thousand as of December 31, 2021), of which €15,657 thousand was due to the application of IFRS 16 - Leases, positive €1,422 thousand was due to the fair value of derivative financial instruments, and a total of €640 thousand was due to the outstanding debt for the acquisition of Idro Meccanica S.r.l. (this amount is classified under Other current liabilities in the consolidated statement of financial position). Without taking into account the effects of applying this accounting standard, the fair value of derivative financial instruments, and the outstanding debt for acquisition of equity investments, Adjusted Net Financial Position as of September 30, 2022 would have been €85,395 thousand, of which €66,401 thousand is attributable to the Green Transportation segment and €18,994 thousand is attributable to the Clean Tech Solutions segment.
Performance of the "Green Transportation" operating segment (Automotive)
Green Transportation segment' sales, as of September 30, 2022, amounted to €141,235 thousand (including €10,412 thousand related to Metatron Group) and grew by €21,404 thousand (up 17,9%) thanks to the After Market recovery in Latam and Europe, as well as rising orders from a leading OEM customer.
Persisting challenges in the logistics sector, raw material shortages (mainly semiconductors) and rising energy costs, as well as the uncertainty stemming from the lingering Russia-Ukraine conflict, all continue to affect component manufacturers' results throughout the supply chain. This market situation keeps leading to material price increases and struggles to meet existing orders.
The Group's sales in the OEM channel, including the input of the Metatron Group, amounted to €74.1 million, up 32.1% compared to September 30, 2021, as a result, in addition to the change in the scope of consolidation, of substantial orders from a leading OEM customer targeting LPG bifuel engines to develop its "green" offering and Mid&Heavy Duty revenue growth in the US.
Sales on the After Market channel, amounting to €67.1 million (up 5% over September 30, 2021), are related to orders from authorized distributors and installers, both domestic and foreign, and are increasing mainly as a result of Latam and Europe upturn. Following the ongoing update of sales lists in the After Market channel, margins remained steady compared to the previous year.
On the other hand, on the OEM channel margins are down mainly due to the challenge of adjusting price lists to rising costs of components and raw materials for costumers, only partly offset by better margins from Mid-Heavy Duty component sales. However, negotiations are ongoing with major OEM customers to adjust sales price lists and some extra-costs recovery.
As for the sales distribution by geographical area in the Green Transportation sector:
- In Italy, Group sales are up compared to the same period in the previous year (+24.2%), bucking the trend of new vehicle registrations (down 15.9% according to UNRAE data - Unione Nazionale Rappresentanti Autoveicoli Esteri), mainly due to the upturn in demand in the After Market channel. The sharp increase in methane prices at the pump negatively affected methane passenger car registrations, offset by the increase in LPG passenger cars registrations. Overall, in the first half of 2022, registrations of new vehicles (OEM) powered by gas engines (methane and LPG) account for about 9% of the total registered.
- The rest of Europe accounts for 48.9% of total sales (53.1% in the nine months of 2021) and it is up 8.6%, thanks both to significant orders from a leading OEM customer, which has focused on LPG bifuel engines for the development of its "green" offering, and to the recovery of the After Market.
- Sales achieved in the first nine months of 2022 on the American continent, amounting to €22,227 thousand (€15,127 thousand as of September 30, 2021), recorded a 46.9% increase due to the positive performance of the Latam area, on the After Market channel, and the United States for OEM Mid&Heavy Duty components.
- Markets in Asia and the Rest of the World, accounting for 22.1% of total sales (21.7% in the first nine months of 2021), are up 20% thanks to the positive performance of the Asian and North African markets.
In the first nine months of 2022, the adjusted EBITDA of the Green Transportation segment, net of nonrecurring costs amounting to €1,410 thousand, was a positive €4,422 thousand, or 3.1% of revenues, up from the same period last year (€2,801 thousand, or 2.3% of revenues and net of nonrecurring costs amounting to €1,333 thousand). The third quarter of 2022 registered an economic results drop compared to the previous quarter due to a changed sales mix, with a higher proportion of sales in the OEM channel, in addition to the rise of raw material prices.
Adjusted EBITDA for the Green Transportation segment includes nonrecurring allocations of €454 thousand for write-downs of receivables due from Russian and Ukrainian customers, as well as allocations of fines for late deliveries that are not directly attributable to Landi Renzo in the amount of €323 thousand.
Performance of the "Clean Tech Solutions" operating segment
As a result of the full consolidation of SAFE&CEC Group starting from May 2021 and the consolidation of
Idro Meccanica S.r.l. starting from January 2022, figures for the Clean Tech Solutions segment are not directly comparable with the same period for the previous fiscal year.
In the first nine months of 2022, the Clean Tech Solutions segment revenues amounted to €71,437 thousand (adjusted to Idro Meccanica S.r.l. revenues of €3,679 thousand), up 7.8% compared to the same "pro forma" period last year (€66,295 thousand), including the non-consolidated months of 2021, reflecting the growing interest in gas mobility from several countries, currently strengthening their distribution networks. This figure is significantly interesting when taking into account the challenges faced during the period in sourcing the parts required for advancement and completion of orders. In fact, SAFE&CEC Group continues to show growing results and an order backlog that can cover the first half of 2023.
Pro forma adjusted EBITDA amounted to €4,322 thousand (or 6.1% of revenues), down 19.5% from the first nine months of 2021 (pro forma). This decline is mainly attributable to the significant increase in material and logistics costs which were not passed on to customers as they were related to bids carried out during 2022, yet whose prices were agreed and contractualized with customers during 2021. New offerings in the pipeline were updated according to new market prices.
Pro forma EBIT amounted to €1,966 thousand, or 2.8% of revenues, compared to 4.1% in the first nine months of 2021.
Major events after the end of the first 9M 2022 period
In October, Landi Renzo S.p.A. suffered an IT attack that made some company servers temporarily and partially unavailable. The Company promptly activated a task force of experts carrying out careful and indepth analyses on the attack's dynamics, highlighting the back-up systems' full integrity and intervening with a set of coordinated actions to fully restore all priority business activities by localizing their potential impact. The Group immediately notified all relevant institutional bodies about the event and took the necessary steps to protect the company's interest by implementing the required actions to rectify the IT breach, protect its customers, suppliers, employees and collaborators data, and also to prevent similar events from recurring in the future. Since the week following the attack, routine activity has been gradually reactivated, reaching full capacity in the first week of November. The temporary unavailability of the ERP system resulted in a slowdown not only of production activities, but also logistics, order management and administrative activities, while also causing the postponement of the publication of Interim Management Report as of September 30, 2022.
Foreseeable management development
Building on the evidence of recovery signs in some key markets such as Europe and Asia, as well as SAFE&CEC's order backlog, the Group's management believes that the Group's consolidated earnings targets for fiscal year 2022, projected to be up from fiscal year 2021, are confirmed.
Strengthening of the management structure: appointment of our Chief Financial Officer and Financial Reporting Manager in charge of drawing the Company's financial statements, as well as strengthening the management structure.
The Board of Directors has approved the appointment of Vittorio Tavanti, starting from December 1st , 2022 as the new Chief Financial Officer and Investor Relator.
Corrado Belicchi and Giorgio Maria Nero have also joined the Group respectively as Chief Operating Officer and as Head of Strategy and Business Development. Paolo Cilloni will continue to serve in another key strategic role within the Group, as Chief Financial Officer of SAFE&CEC Group (Clean Tech Solutions segment).
Vittorio Tavanti has extensive international experience in senior roles in finance and control, built up in renowned blue chips with global presence, including Schneider Electric, General Electrics, Siemens, and Baker Hughes.
Besides his role as Chief Financial Officer, Dr. Tavanti will also serve as the Company's Financial Reporting Manager in charge of drawing the Company's financial statements. The Board of Directors, having assessed the requirements of professionalism and honorability of the executive and acquired the favorable opinion of the Board of Statutory Auditors, voted to appoint Vittorio Tavanti as Financial Reporting Manager in charge of drawing the Company's financial statements
Corrado Belicchi joins Landi Renzo Group from AlixPartners, where he served as Director of the Automotive and Industrial practice. Previously, he held senior roles in Italian and global companies such as Sun Microsystems, Eds, Kearney, and Ernst & Young Consultants; Giorgio Maria Nero joins the Group from Kearney, and previously held roles in RFI - Rete Ferroviaria Italiana, Studio Speri, and SATPI.
Pursuant to Article 154-bis, paragraph 2, of Italian Legislative Decree No. 58 of February 24, 1998, the Financial Reporting Manager in charge of drawing the Company's financial statements, Paolo Cilloni, declares that the accounting information contained in this press release corresponds to the documented results, books and accounting records. This press release is also available on the corporate website www.landirenzogroup.com
This press release is a translation. The Italian version prevails
Landi Renzo is the global leader in the natural gas, biomethane and hydrogen sustainable mobility and infrastructure sector. The Group stands out for its extensive presence at global level in over 50 countries, generating nearly 90% of its revenues abroad. Landi Renzo S.p.A. has been listed on the Euronext STAR Milan segment of Borsa Italiana since June 2007.
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Media Contacts: Community
Paolo Cilloni CFO and Investor Relator [email protected]
Roberto Patriarca – 335 6509568 Silvia Tavola – 338 6561460 Lucia Fava – 366 5613441
Press Release
November 30, 2022
[email protected]
| (thousands of Euro) | ||
|---|---|---|
| CONSOLIDATED INCOME STATEMENT | 30/09/2022 | 30/09/2021 Restated |
| Revenues from sales and services | 216,351 | 162,558 |
| Other revenues and income | 582 | 1,568 |
| Cost of raw materials, consumables and goods and change in inventories | -134,846 | -101,648 |
| Costs for services and use of third-party assets | -39,455 | -29,879 |
| Personnel costs | -32,368 | -24,473 |
| Allocations, write downs and other operating expenses | -3,194 | -2,174 |
| Gross Operating Profit | 7,070 | 5,952 |
| Amortization, depreciation and impairment | -13,065 | -11,389 |
| Net Operating Profit | -5,995 | -5,437 |
| Financial income | 988 | 150 |
| Financial expenses | -5,484 | -3,081 |
| Exchange gains (losses) | 1,128 | -690 |
| Income (expenses) from equity investments | -288 | 8,768 |
| Income (expenses) from joint venture measured using the equity method | 778 | 219 |
| Profit (Loss) before tax | -8,873 | -71 |
| Taxes | -1,019 | -996 |
| Net profit (loss) for the Group and minority interests, including: | -9,892 | -1,067 |
| Minority interests | 223 | 829 |
| Net profit (loss) for the Group | -10,115 | -1,896 |
| Basic earnings (loss) per share | -0.0450 | -0.0167 |
| Diluted earnings (loss) per share | -0.0450 | -0.0167 |
The comparative figure as at 30 September 2021 has been restated following the completion of the "purchase price allocation" process of the Metatron Group, fully consolidated starting from August 2021.
Press Release
November 30, 2022
| (thousands of Euro) | ||
|---|---|---|
| ASSETS | 30/09/2022 | 31/12/2021 restated |
| Non-current assets | ||
| Land, property, plant, machinery and other equipment | 13,763 | 14,977 |
| Development expenditure | 11,047 | 12,222 |
| Goodwill | 80,707 | 73,256 |
| Other intangible assets with finite useful lives | 17,957 | 19,543 |
| Right-of-use assets | 14,756 | 11,991 |
| Equity investments measured using the equity method | 2,806 | 2,028 |
| Other non-current financial assets | 807 | 882 |
| Other non-current assets | 1,710 | 2,556 |
| Deferred tax assets | 12,303 | 12,694 |
| Total non-current assets | 155,856 | 150,149 |
| Current assets | ||
| Trade receivables | 61,552 | 66,048 |
| Inventories | 81,719 | 68,896 |
| Contract work in progress | 28,750 | 15,653 |
| Other receivables and current assets | 18,454 | 14,443 |
| Current assets for derivative financial instruments | 1,422 | 0 |
| Cash and cash equivalents | 59,268 | 28,039 |
| Total current assets | 251,165 | 193,079 |
| TOTAL ASSETS | 407,021 | 343,228 |
| (thousands of Euro) | ||
|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | 30/09/2022 | 31/12/2021 restated |
| Shareholders' Equity | ||
| Share capital | 22,500 | 11,250 |
| Other reserves | 91,802 | 44,615 |
| Profit (loss) for the period | -10,115 | -1,020 |
| Total Shareholders' Equity of the Group | 104,187 | 54,845 |
| Minority interests | 6,524 | 5,738 |
| TOTAL SHAREHOLDERS' EQUITY | 110,711 | 60,583 |
| Non-current liabilities | ||
| Non-current bank loans | 80,062 | 10,174 |
| Other non-current financial liabilities | 27,887 | 9,320 |
| Non-current liabilities for right-of-use | 12,405 | 10,197 |
| Provisions for risks and charges | 5,206 | 4,535 |
| Defined benefit plans for employees | 3,776 | 3,977 |
| Deferred tax liabilities | 1,204 | 1,452 |
| Liabilities for derivative financial instruments | 0 | 99 |
| Total non-current liabilities | 130,540 | 39,754 |
| Current liabilities | ||
| Bank financing and short-term loans | 34,279 | 103,408 |
| Other current financial liabilities | 2,435 | 274 |
| Current liabilities for right-of-use | 3,252 | 2,624 |
| Trade payables | 90,045 | 82,886 |
| Tax liabilities | 4,411 | 3,758 |
| Other current liabilities | 31,348 | 49,941 |
| Total current liabilities | 165,770 | 242,891 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 407,021 | 343,228 |
The comparative dataas at 31 December 2021 have been restated following the completion
of the "purchase price allocation" process of the Metatron Group, fully consolidated starting from August 2021.
Press Release
November 30, 2022
| (thousands of Euro) | ||
|---|---|---|
| CONSOLIDATED CASH FLOWS STATEMENT | 30/09/2022 | 30/09/2021 Restated |
| Financial flows deriving from operating activities | ||
| Pre-tax profit (loss) for the period | -8,873 | -71 |
| Adjustments for: | ||
| Depreciation of property, plant and machinery | 3,154 | 3,226 |
| Amortisation of intangible assets | 7,285 | 6,040 |
| Depreciation of right-of-use assets | 2,626 | 2,123 |
| Loss (profit) from disposal of tangible and intangible assets | -121 | 247 |
| Share-based incentive plans | 0 | 132 |
| Impairment loss on receivables | 710 | 560 |
| Net financial charges | 3,368 | 3,621 |
| Net expenses (income) form equity investments measured using the equity method | -778 | -219 |
| Net expenses (income) form equity investments | 288 | -8,768 |
| Changes in: | 7,659 | 6,891 |
| Inventories and work in progress | -23,086 | -8,281 |
| Trade receivables and other receivables | 1,597 | -650 |
| Trade payables and other payables | 12,073 | 3,938 |
| Provisions and employee benefits | 4 | -58 |
| Cash generated from operation | -1,753 | 1,840 |
| Interest paid | -3,202 | -1,434 |
| Interest received | 25 | 161 |
| Taxes paid | -1,378 | -653 |
| Net cash generated (absorbed) from operating activities | -6,308 | -86 |
| Financial flows from investment | ||
| Proceeds from sale of property, plant and machinery | 121 | 446 |
| Purchase of property, plant and machinery | -1,850 | -2,386 |
| Purchase of intangible assets | -436 | -194 |
| Development expenditure | -4,095 | -3,612 |
| Variation in consolidation area | -30,683 | 3,575 |
| Net cash absorbed by investment activities | -36,943 | -2,171 |
| Free Cash Flow | -43,251 | -2,257 |
| Financial flows from financing activities | ||
| Disbursements (reimbursement) of medium/long-term loans | 16,707 | -3,915 |
| Change in short-term bank debts | 1,342 | 8,652 |
| Capital increase (*) | 58,598 | 0 |
| Repayment of leases IFRS 16 | -2,782 | -2,302 |
| Net cash generated (absorbed) by financing activities | 73,865 | 2,435 |
| Net increase (decrease) in cash and cash equivalents | 30,614 | 178 |
| Cash and cash equivalents as at 1 January | 28,039 | 21,914 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 615 | -2,588 |
| Cash and cash equivalents at the end of the period | 59,268 | 19,504 |
The comparative figure as at 30 September 2021 has been restated following the completion of the purchase price allocation process of the Metatron Group, fully consolidated starting from August 2021.
(*) net of expenses incurred