Quarterly Report • May 14, 2021
Quarterly Report
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| Informazione Regolamentata n. 0533-46-2021 |
Data/Ora Ricezione 14 Maggio 2021 14:08:10 |
MTA - Star | ||
|---|---|---|---|---|
| Societa' | : | ESPRINET | ||
| Identificativo Informazione Regolamentata |
: | 147226 | ||
| Nome utilizzatore | : | ESPRINETN05 - Perfetti | ||
| Tipologia | : | REGEM | ||
| Data/Ora Ricezione | : | 14 Maggio 2021 14:08:10 | ||
| Data/Ora Inizio Diffusione presunta |
: | 14 Maggio 2021 14:08:12 | ||
| Oggetto | : | RESULTS OF THE FIRST QUARTER OF 2021 REWARD THE GROUP'S STRATEGY: SALES +28%, ADJ. EBITDA +70%, NET INCOME +159%, GROWTH IN MARKET SHARE |
||
| Testo del comunicato |
Vedi allegato.
Q1 2021
Sales: Euro 1.166 million, +28% (Q1 20: Euro 914 million) Adj. EBITDA: Euro 20.3 million, +70% (Q1 20: Euro 11.9 million) Net income: Euro 10.2 million, +159% (Q1 20: Euro 3.9 million) Cash Conversion Cycle: 5 days (Q1 20: 20 days) ROCE: 19.7% (Q1 20: 8.6%) Net Financial Position: negative for Euro 71.6 million (Q1 20: negative for Euro 127.1 million)
Sales: > Euro 5.0 billion Adj. EBITDA: > Euro 80 million
Vimercate (Monza Brianza), 14 May 2021 - The Board of Directors of ESPRINET (PRT:IM), a leader in southern Europe in the distribution of IT, Consumer Electronics and Advanced Solutions, today approved the Interim Management Statement as at 31 March 2021.
Alessandro Cattani, Chief Executive Officer of ESPRINET: "We closed the first quarter of 2021 with significant growth in all economic-financial indicators, registering a further acceleration in the ROCE driven strategy that has been the cornerstone of our decisions for two years. Profitability registered double-digit growth, with a EBITDA Adjusted/Sales ratio up by 33% compared to the previous year. The rigorous and constant commitment to improving the customer satisfaction indexes, to ensure customers and suppliers with a first-rate service, especially in view of the persistent difficulties connected with the pandemic, is rewarding all business lines with improved margins. The first quarter also recorded a contribution of Euro 2.1 million in terms of Adjusted EBITDA deriving from the acquisitions of GTI Software Y Networking S.A. in Spain, leader in the Cloud segment, and of Dacom S.p.A. and idMAINT S.r.l. in Italy, leaders in the Automatic Identification and Data Capture and related services segment. The sales of other high profit margin business lines belonging to the Advanced Solutions segment also provided a big boost to profitability, despite a market still in difficulty due to companies' lower propensity to invest in infrastructures. On the strength of further consolidated market shares in all product and customer segments in the countries of southern Europe in which we operate, we look at the current year in a positive light, albeit not forgetting the framework of persistent uncertainty tied to the pandemic. The first half of 2021 should confirm a favourable comparison with the previous year; by contrast, the second half opens up a number of scenarios relating, in particular, to the trend in consumer demand and the hoped-for recovery in corporate demand. Based on these premises, our guidance for 2021 forecasts sales exceeding Euro 5.0 billion and Adjusted EBITDA of more than Euro 80 million".
There were even better results for ESPRINET, which in the first quarter of 2021, recorded Sales of Euro 1,166.0 million, +28% compared to Euro 913.8 million in Q1 20. Contributions to this result were provided by both organic growth (+23%) and the Euro 42.8 million deriving from the activities of Gruppo GTI in Spain acquired in the fourth quarter of 2020, and Dacom S.p.A. and idMAINT S.r.l. in Italy, acquired at the beginning of Q1 2021.
Gross Profit, amounting to Euro 56.1 million, shows an increase of 33% over Q1 20 (Euro 42.3 million), due to both higher sales and the improvement in the percentage margin, which stands at 4.81% (compared to 4.63% in Q1 20), despite the weight of sales of PCs and smartphones having risen further.
Adjusted EBITDA, which coincides with EBITDA given that no non-recurring costs were recorded, amounted to Euro 20.3 million, marking an increase of +70% compared to Euro 11.9 million in Q1 20, also due to a lower incidence of costs. Excluding the positive contribution of Euro 2.1 million deriving from the acquisitions cited above, the figure sits at Euro 18.2 million (+52% compared to Q1 20). The incidence on sales rose to 1.74% compared to 1.31% in Q1 20.
EBIT came to Euro 16.5 million, marking significant growth (+98%) compared to Euro 8.3 million in Q1 20. The incidence on sales rose to 1.42% compared to 0.91% in Q1 20.
Profit before income taxes amounted to Euro 14.1 million, up considerably compared to Euro 5.9 million in Q1 20.
Net income, up by 159%, amounted to Euro 10.2 million (Euro 3.9 million in Q1 20).
In the first three months of 2021, all reference markets recorded robust growth: according to Context data, Italy is worth Euro 2.4 billion (+21% compared to Q1 20), Spain Euro 1.6 billion (+20%) and Portugal Euro 374 million (+13%). ESPRINET outperformed the market in all the countries in which it operates, consolidating its shares and recording the best result in the last few years.
The constant commitment to improving the customer satisfaction indexes rewarded the Group in both customer segments. In the first three months of 2021, the market recorded growth of +18% in the Business Segment (IT Reseller) and +23% in the Consumer Segment (Retailer, E-tailer). Group sales recorded above-market growth in both the Business Segment (+39%) and the Consumer Segment (+25%).
In the first three months of 2021, the IT Clients market 1 in southern Europe recorded growth of +36%, still driven by the significant increase in demand for PCs that, despite the persistence of problems of product availability linked to the shortage of components and logistics issues, rose by +49%, thanks to the sales in the mobile segment (laptops and tablets), in Italy and Spain fuelled by the purchases by the Public Administration in the educational area, as well as purchases by families to meet remote learning needs. Printing started to grow again (+6%), due in particular to the results obtained by sales of consumer products.
In the Consumer Electronics market, all categories recorded double-digit growth: Smartphones +23%, Domestic appliances +35% and Gaming +59%, other CE products +16%.
Advanced Solutions confirmed a challenging period (-4%), due to companies' lower propensity to invest in infrastructures. The +2% increase in the Hardware products category did not offset the decline in Software, Services and Cloud (-8%).
With sales at Euro 1,166.0 million, growth of +28% compared to Q1 20, the Group recorded a major acceleration in Advanced Solutions (+48%), also thanks to the contribution from the acquisitions of
1 Source: Context.
the GTI Group in Spain, leader in the Cloud segment, and of Dacom and idMAINT, leaders in the Automatic Identification and Data Capture segment, in Italy. In IT Clients, the Group registered notable increases in all categories: PCs +41%, Printing +6% and other IT products +54%. Also in the Consumer Electronics area, sales were up in all categories: Smartphones +23%, White Goods +29%, Gaming +8% and other CE products +17%.
The Cash Conversion Cycle 2 recorded the best performance ever, closing at 5 days (-3 days compared to Q4 20 and -15 days compared to the Q1 20). In particular, the following trends were recorded:
The Net Financial Position, influenced by technical factors such as the seasonal nature of the business and the trend in customer and supplier behavioural models in the different periods of the year which do not, therefore, make it representative of the average levels of net financial debt observed in the first 3 months of 2021, is a negative Euro 71.6 million, down compared to 31 December 2020 (positive for Euro 302.8 million) and an improvement compared to 31 March 2020 (negative for Euro 127.1 million). It is strictly influenced by the management of Working Capital (equal to Euro 235.1 million compared to Euro -121.0 million as at 31 December 2020 and Euro 285.5 million as at 31 March 2020), whose result depends on the degree of use of factoring, securitisation and the technical forms of advance collection of receivables with similar effects - i.e. "confirming" -, plans that generated an overall impact on the level of consolidated net financial debts amounting to roughly Euro 353.6 million, a reduction of Euro 47.9 million compared to Euro 401.5 million as at 31 March 2020.
The ROCE stood at 19.7%, compared to 8.6% in Q1 20. The main changes related to this trend can be summarised as follows:
| (€/millions) | Q1 2021 | Q1 2020 | FY 2020 |
|---|---|---|---|
| LTM operating profit (Adj. EBIT)3 | 61.2 | 40.7 | 52.9 |
| NOPAT4 | 45.9 | 30.1 | 39.7 |
| Average Net Invested Capital5 | 233.4 | 350.7 | 158.1 |
| ROCE6 | 19.7% | 8.6% | 25.1% |
2 Equal to the average of the last 4 quarters of days of turnover of Operating Net Working Capital calculated as the sum of trade receivables, inventories and trade payables.
3 Equal to the sum of Adj. EBITs - excluding the effects of IFRS 16 - in the last 4 quarters.
4 LTM operating profit (Adj. EBIT), as defined above, net of taxes calculated at the actual tax rate of the last set of annual consolidated financial statements published.
5 Equal to the average of closing date of the period and at the four previous quarterly closing dates (excluding the equity effects of IFRS 16).
6 Equal to the ratio between (a) NOPAT, as defined above, and (b) the Average Net Invested Capital as defined above.
Also on the basis of the results achieved in the first three months of 2021 in terms of profitability and consolidated market shares, the ESPRINET GROUP views the current year in a positive light. The first half of 2021 should confirm a favourable comparison with the previous year; by contrast, the second half opens up a number of scenarios, given the persistence of a framework of uncertainty tied to the pandemic. Although, on the one hand, the demand for consumer products could slow because partially replaced by the purchase of goods and services still compromised by the restrictions that will gradually be removed, on the other, demand related to the strengthening of digital infrastructures could also accelerate given that it is sustained by national investment plans as part of the Next Generation EU programme. In order to assist customers and suppliers in the digital transformation, the Group's strategic guidelines will be developed further in terms of the Consumption model (Cloud, DaaS and MPS) and Outsourcing of logistics and digital services (Digital Servitization).
Based on these premises, certain of the growing centrality of the IT distribution industry in the current global context, and with the expectation of greater visibility of the trend in consumer demand in the final part of the year, the guidance for the year 2021 forecasts sales exceeding Euro 5.0 billion and an Adjusted EBITDA of more than Euro 80 million.
Between 20 April 2021 and 12 May 2021, as per the authorisation of the Shareholders' Meeting of 7 April 2021, Esprinet S.p.A. purchased 1,464,369 ordinary Esprinet S.p.A. shares, corresponding to 2.88% of the share capital, at an average unit price of Euro 13.56 per share.
The shares acquired will partly go towards fulfilling the obligations stemming from the "Long Term Incentive Plan 2021-2023" and partly aimed at reducing the number of shares outstanding.
Due to these purchases, as at 14 May 2021, Esprinet S.p.A. held 1,528,024 own shares, equal to 3.00% of share capital.
The officer charged with the drawing up of the accounting documents of the Company, Pietro Aglianò, declares that, in compliance with the provisions of paragraph 2 of art. 154-bis of Legislative Decree No. 58/1998 (T.U.F. - Consolidated Law on Finance), the financial data shown in this press release corresponds to the findings resulting from accounting documents, books and accounting records.
Esprinet (PRT:IM – ISIN IT0003850929), with around 1,600 employees and 4.5 billion euro in turnover in 2020, is the leading company in Southern Europe (Italy, Spain and Portugal) in the distribution of Information Technology and Consumer Electronics to IT resellers, VAR, System Integrators, specialised stores, retailers and e-commerce portals, as well as the fourth largest distributor in Europe and in the top 10 at global level. The Group's vision is to simplify life for people and organisations, by expanding and facilitating the distribution and use of technology. Enabling your tech experience is the payoff that synthesises the evolution of the company into a genuine technology services hub that enables the use of technology.
The Group supplies roughly 130,000 products (PCs, printers, accessories, software, cloud, data centres & cybersecurity, smartphones, audio-video, TV, gaming, household appliances and electric mobility) of more than 650 manufacturers to 31,000 business and consumer resellers through multiple sales models, both self-service (best-in-class e-commerce platform and Cash & Carry stores) and assisted (tele-sales and systems engineers in the field).
In addition to providing traditional wholesaling services (bulk breaking and credit), Esprinet fulfils the role of simplifier of the use of technology. The Group offers, for example, a turnkey e-commerce platform to hundreds
of resellers, in-shop management for thousands of retail sales points, and specialised payment and financing solutions for the resellers community, by also offering the generation of demand by end users and big data analysis to the main technology manufacturers and resellers which outsource marketing activities increasingly more frequently.
Cloud services, collaboration software, video-conference systems, advanced IT infrastructures and specialised consumer electronics solutions such as connected household appliances or gaming platforms are the new areas of growth with added value which fuel further future growth in revenues for the sector, while logistics and financial services, as well as the "pay-per-use" sales model, offer increased opportunities for margin growth.
The widespread use of technology and the need for quicker and simpler methods to make increasingly more complex and diversified technologies available for people and companies pave the way for further improvements in the scenarios of the technological distribution industry.
Press release available on www.esprinet.com and on .
For more information:
Tel. +39 02 404961 Giulia Perfetti [email protected]
Tel. +39 02 45473884 Maria Antonietta Pireddu [email protected] Federico Nasta [email protected]
Paola Bramati Tel. +39 02 404961; Mobile +39 346 6290054 [email protected]
| €/millions | Q1 2021 | Q1 2020 | Var. % |
|---|---|---|---|
| PC (notebook, tablet, desktop, monitor) | 458.0 | 325.2 | 41% |
| Printing devices and supplies | 110.9 | 105.1 | 6% |
| Other IT products | 86.7 | 56.3 | 54% |
| Total IT Clients | 655.6 | 486.6 | 35% |
| Smartphones | 291.9 | 237.0 | 23% |
| White goods | 12.9 | 10.0 | 29% |
| Gaming hardware and software | 4.0 | 3.7 | 8% |
| Other consumer electronics products | 33.9 | 28.9 | 17% |
| Total Consumer Electronics | 342.7 | 279.6 | 23% |
| Hardware (networking, storage, server & others) | 125.9 | 95.1 | 32% |
| Software, Services, Cloud | 81.6 | 44.8 | 82% |
| Total Advanced Solutions | 207.5 | 139.9 | 48% |
| Adjustments | (39.8) | 7.7 | -617% |
| Sales from contracts with customers | 1,166.0 | 913.8 | 28% |
| €/millions | Q1 2021 | Q1 2020 | Var.% |
|---|---|---|---|
| Italy | 732.6 | 596.4 | 23% |
| Spain | 405.5 | 298.3 | 36% |
| Portugal | 17.0 | 11.3 | 50% |
| UE | 6.8 | 5.1 | 33% |
| Extra-UE | 4.1 | 2.7 | 52% |
| Sales from contracts with customers | 1,166.0 | 913.8 | 28% |
| €/millions | Q1 2021 | Q1 2020 | Var. % |
|---|---|---|---|
| Retailer/e-tailer | 481.1 | 384.4 | 25% |
| IT Reseller | 724.7 | 521.7 | 39% |
| Adjustments | (39.8) | 7.7 | -617% |
| Sales from contracts with customers | 1,166.0 | 913.8 | 28% |
| Q1 2021 | Q1 2020 | Var. % | |
|---|---|---|---|
| Sales from contracts with customers | 1,166,038 | 913,762 | 28% |
| Cost of goods sold excl. factoring/securitisation | 1,108,970 | 870,698 | 27% |
| Financial cost of factoring/securisation(1) | 934 | 780 | 20% |
| Gross Profit(2) | 56,134 | 42,284 | 33% |
| Gross Profit % | 4.81% | 4.63% | |
| Personnel costs | 20,862 | 16,884 | 24% |
| Other operating costs | 14,974 | 13,472 | 11% |
| EBITDA adjusted | 20,298 | 11,928 | 70% |
| EBITDA adjusted % | 1.74% | 1.31% | |
| Depreciation e amortisation | 1,136 | 1,121 | 1% |
| IFRS 16 Right of Use depreciation | 2,616 | 2,464 | 6% |
| Goodwill impairment | - | - | n/s |
| EBIT adjusted | 16,546 | 8,343 | 98% |
| EBIT adjusted % | 1.42% | 0.91% | |
| Non recurring costs | - | - | n/s |
| EBIT | 16,546 | 8,343 | 98% |
| EBIT % | 1.42% | 0.91% | |
| IFRS 16 interest expenses on leases | 791 | 848 | -7% |
| Other financial (income) expenses | 593 | 418 | 42% |
| Foreign exchange (gains) losses | 1,074 | 1,211 | -11% |
| Profit before income taxes | 14,088 | 5,866 | >100% |
| Income taxes | 3,880 | 1,929 | >100% |
| Net income | 10,208 | 3,937 | >100% |
NOTE
(1) Cash discounts for 'non-recourse' advances of trade receivables as part of revolving factoring and securitization programs.
(2) Gross of amortization/depreciation that, by destination, would be included in the cost of sales.
| (€/000) | Q1 2021 | non - recurring |
Q1 2020 | non - recurring |
|---|---|---|---|---|
| Sales from contracts with customers | 1,166,038 | - | 913,762 | - |
| Cost of sales | (1,110,145) | - | (871,669) | - |
| Gross profit | 55,893 | - | 42,093 | - |
| Sales and marketing costs | (16,092) | - | (13,085) | - |
| Overheads and administrative costs | (23,235) | - | (20,233) | - |
| Impairment loss/reversal of financial assets | (20) | - | (432) | - |
| Operating income (EBIT) | 16,546 | - | 8,343 | - |
| Finance costs - net | (2,458) | - | (2,477) | - |
| Profit before income taxes | 14,088 | - | 5,866 | - |
| Income tax expenses | (3,880) | - | (1,929) | - |
| Net income | 10,208 | - | 3,937 | - |
| - of which attributable to non-controlling interests | (25) | (60) | ||
| - of which attributable to Group | 10,233 | - | 3,997 | - |
| Earnings per share - basic (euro) | 0.21 | 0.08 | ||
| Earnings per share - diluted (euro) | 0.20 | 0.08 |
| (€/000) | Q1 2021 | Q1 2020 |
|---|---|---|
| Net income (A) | 10,208 | 3,937 |
| Other comprehensive income: | ||
| - Changes in translation adjustment reserve | 16 | - |
| Other comprehensive income not be reclassified in the separate income statement: |
||
| - Changes in 'TFR' equity reserve | 177 | 283 |
| - Taxes on changes in 'TFR' equity reserve | (42) | (79) |
| Other comprehensive income (B): | 151 | 204 |
| Total comprehensive income (C=A+B) | 10,359 | 4,141 |
| - of which attributable to Group | 10,379 | 4,188 |
| - of which attributable to non-controlling interests | (20) | (47) |
| (€/000) | 31/03/2021 | 31/12/2020 |
|---|---|---|
| Fixed assets | 252,266 | 236,965 |
| Operating net working capital | 235,062 | (121,034) |
| Other current assets/liabilities | 4,238 | (9,887) |
| Other non-current assets/liabilities | (20,821) | (19,858) |
| Total uses | 470,745 | 86,186 |
| Short-term financial liabilities | 95,759 | 56,049 |
| Lease liabilities | 9,567 | 8,867 |
| Current financial (assets)/liabilities for derivatives | (15) | (27) |
| Financial receivables from factoring companies | (16,669) | (147) |
| Current debts for investments in subsidiaries | 2,109 | 220 |
| Other financial receivables | (9,898) | (9,617) |
| Cash and cash equivalents | (219,720) | (558,928) |
| Net current financial debt | (138,867) | (503,583) |
| Borrowings | 100,657 | 107,069 |
| Lease liabilities | 108,088 | 93,999 |
| Non-current debts for investments in subsidiaries | 1,730 | 230 |
| Other financial receivables | - | (492) |
| Net Financial debt | 71,608 | (302,777) |
| Net equity | 399,137 | 388,963 |
| Total sources of funds | 470,745 | 86,186 |
| (€/000) | 31/03/2021 | 31/12/2020 |
|---|---|---|
| ASSETS | ||
| Non - current assets | ||
| Property, plant and equipment | 12,932 | 12,498 |
| Right of use assets | 114,247 | 99,928 |
| Goodwill | 108,555 | 108,442 |
| Intangibles assets | 819 | 722 |
| Deferred income tax assets | 13,236 | 12,950 |
| Receivables and other non - current assets | 2,477 | 2,917 |
| 252,266 | 237,457 | |
| Current assets | ||
| Inventory | 512,077 | 402,755 |
| Trade receivables | 534,867 | 584,037 |
| Income tax assets | 284 | 410 |
| Other assets | 80,129 | 40,186 |
| Derivative financial assets | 15 | 27 |
| Cash and cash equivalents | 219,720 | 558,928 |
| 1,347,092 | 1,586,343 | |
| Total assets | 1,599,358 | 1,823,800 |
| EQUITY | ||
| Share capital | 7,861 | 7,861 |
| Reserves | 379,415 | 347,602 |
| Group net income | 10,233 | 31,405 |
| Group net equity | 397,509 | 386,868 |
| Non - controlling interest | 1,628 | 2,095 |
| Total equity | 399,137 | 388,963 |
| LIABILITIES | ||
| Non - current liabilities | ||
| Borrowings | 100,657 | 107,069 |
| Lease liabilities | 108,088 | 93,999 |
| Deferred income tax liabilities | 11,920 | 11,309 |
| Retirement benefit obligations | 5,557 | 4,847 |
| Debts for investments in subsidiaries | 1,730 | 230 |
| Provisions and other liabilities | 3,344 | 3,702 |
| 231,296 | 221,156 | |
| Current liabilities | ||
| Trade payables | 811,882 | 1,107,826 |
| Short-term financial liabilities | 95,759 | 56,049 |
| Lease liabilities | 9,567 | 8,867 |
| Income tax liabilities | 3,271 | 224 |
| Debts for investments in subsidiaries | 2,109 | 220 |
| Provisions and other liabilities | 46,337 | 40,495 |
| 968,925 | 1,213,681 | |
| Total liabilities | 1,200,221 | 1,434,837 |
| Total equity and liabilities | 1,599,358 | 1,823,800 |
| (euro/000) | Q1 2021 | Q1 2020 |
|---|---|---|
| Cash flow provided by (used in) operating activities (D=A+B+C) | (331,767) | (396,202) |
| Cash flow generated from operations (A) | 19,761 | 12,561 |
| Operating income (EBIT) Income from business combinations Depreciation, amortisation and other fixed assets write-downs Net changes in provisions for risks and charges Net changes in retirement benefit obligations |
16,546 (168) 3,752 (439) (178) |
8,343 - 3,585 289 35 |
| Stock option/grant costs | 248 | 309 |
| Cash flow provided by (used in) changes in working capital (B) Inventory Trade receivables Other current assets Trade payables Other current liabilities |
(350,162) (92,701) 74,181 (22,283) (313,892) 4,533 |
(406,993) 45,009 62,040 (1,306) (513,667) 931 |
| Other cash flow provided by (used in) operating activities (C) | (1,366) | (1,770) |
| Interests paid Received interests Foreign exchange (losses)/gains Income taxes paid |
(622) 20 (698) (66) |
(666) 27 (1,131) - |
| Cash flow provided by (used in) investing activities (E) | (27,781) | (927) |
| Net investments in property, plant and equipment Net investments in intangible assets Changes in other non current assets and liabilities Dacom business combination idMAINT business combination |
(18,149) (150) (16) (8,981) (485) |
(659) (283) 15 - - |
| Cash flow provided by (used in) financing activities (F) | 20,340 | 49,919 |
| Medium/long term borrowing Repayment/renegotiation of medium/long-term borrowings Leasing liabilities remboursement Net change in financial liabilities Net change in financial assets and derivative instruments Dividend payments Own shares acquisition |
750 (6,031) 14,516 27,855 (16,303) (447) - |
- (4,301) (2,405) 61,989 (3,708) - (1,656) |
| Net increase/(decrease) in cash and cash equivalents (G=D+E+F) | (339,208) | (347,210) |
| Cash and cash equivalents at year-beginning Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at year-end |
558,928 (339,208) 219,720 |
463,777 (347,210) 116,567 |
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