B&C Speakers

Earnings Release • Mar 22, 2021

Informazione Regolamentata n. 0931-13-2021		Data/Ora Ricezione 22 Marzo 2021 14:24:43	MTA - Star
Societa'	:	B&C SPEAKERS
Identificativo Informazione Regolamentata	:	143962
Nome utilizzatore	:	BCSPEAKERSN02 - spapperi
Tipologia	:	1.1
Data/Ora Ricezione	:	22 Marzo 2021 14:24:43
Data/Ora Inizio Diffusione presunta	:	22 Marzo 2021 17:30:04
Oggetto	:	Statement	BC- Board approves Draft 2020 Financial
Testo del comunicato

Vedi allegato.

PRESS RELEASE

B&C Speakers S.p.A.:

The Board of Directors approves the Draft Financial Statement for the year 2020

• Consolidated revenues amounted to € 31.98 million (a decrease compared to the € 56,29 million in 2019);
• Consolidated EBITDA equal to € 5.12 million (a decrease compared to the € 10.90 in 2019);
• Group net profit amounted to € 1.65 million, down compared to € 8.67 million in 2019);
• Group net financial position positive and equal to € 0.6 million (it was negative and amounted to € 5.01 million at year-end 2019);
• Continuation of the actions already taken at the beginning of the pandemic to mitigate the financial and economic effects linked to Covid19.
• Proposed distribution to shareholders of an ordinary dividend equal to Euro 0.26 for each share held with ex-dividend date at May 4, 2020

Bagno a Ripoli (Florence - Italy), March 22, 2021 – The Board of Directors of B&C Speakers S.p.A., one of the foremost international players in the design, manufacture, distribution and marketing of professional electro-acoustic transducers approved the Draft Financial Statement for the year 2020, drawn up in accordance with IFRS international accounting standards.

CEO Lorenzo Coppini commented: "after this disastrous year for social relations and aggregation, launching large-scale vaccination operations is bringing renewed optimism. Especially in countries where a strong regression of the pandemic has already been achieved, such as the USA, China and the UK, the entertainment and live music market is resuming with enthusiasm, confirming that public can't wait to have fun again by participating to a ritual, be it the opera at the Theater or the Heavy Metal concert in the mud, which no virtual experience can ever replace. Therefore we're expecting an accelerating year and a gradual exit from the current situation of drastic contraction in demand, waiting for Europe to move too".

Revenues As we all know, the Group's reference market suffered the negative effects of the pandemic throughout the year, which actually prohibited any event involving social aggregation and led to the interruption or cancellation of all live music events that would have generated an important business opportunity for B&C Speakers.

The effect of these decisions resulted in a significant decrease in the Group's turnover, equal to Euro 31.98 million for the year 2020, while it was equal to Euro 56.28 million at the end of 2019.

The decrease in the Group's turnover compared to 2019 occurred, albeit with different timing and methods, on all the reference markets, as summarized in the chart below:

Geographical Area	2020 %
Latin America Europe	2.037.630 12.233.506
Italy	2.413.606
North America	8.825.250
Middle East & Africa	368.524
Asia & Pacific Total revenues	6.096.739 31.975.254

It should be noted that the Asian market, and China in particular, during the quarter just ended, confirmed the signs of a gradual recovery in demand made possible by the good results achieved in that area in containing the virus. The geographical area that, at Group level, has best reacted to such crisis, is in any case the North American one, thanks to the success achieved in the sale of car transducers and in the sale to end-customers through an effective network of retailers, traditional and non-traditional, which they partly offset the loss in turnover suffered by manufacturers.

Cost of sales

As a result of the significant drop in turnover, the cost of sales showed a slight worsening in its incidence on revenues in 2020 compared to the same period of 2019, going from 61.42% to 63.79%; this worsening is attributable to the contraction in sales not entirely balanced by the direct labor cost containment policies that the company has put in place, including the use of the Covid Redundancy fund.

Indirect Personnel

The cost for indirect personnel, although decreasing by 24.4% compared to 2019, increased its incidence on turnover from 6.92% to 9.20%; this is explained by the fact that, despite the use of social safety nets, the cost of labor cannot be treated as a variable cost; within the category in question, it should be also emphasized that R&D activities did not suffer any slowdown throughout the year.

Commercial Expenses

This category refers to costs for commercial consultancy, advertising and marketing expenses, travel and business trips and other minor charges relating to the commercial sector.

Commercial expenses show a sharp decrease in absolute value compared to the previous year and a consequent reduction in the impact on turnover, this contraction is also explained by the cancellation of all trade fairs scheduled during the year.

Administrative and General

General and administrative costs showed a substantial decrease of 16.77% compared to 2019, this decrease was not proportional to the decrease in turnover so the incidence of this category of costs (on revenues) reached 10.9% from 7.4% at the end of 2019.

EBITDA and EBITDA Margin

Mainly due to the dynamics illustrated above, EBITDA of 2020 was equal to Euro 5.12 million, down 59,3% compared to the same period of 2019.

The EBITDA margin therefore goes from 22.35% of revenues at the end of 2019 to 16.02% at the end of 2020.

Depreciation

Depreciation of tangible and intangible fixed assets and rights of use amounted to Euro 1.99 million (same value for the whole 2019).

EBIT

EBIT for 2020 amounts to Euro 2.89 million, another sharp decrease compared to the same period of 2019.

Group Net Profit

The Group's net profit at the end of 2020 amounts to Euro 1.92 million representing a percentage of 5.9% of consolidated revenues with an overall decrease of 77.74% compared to the corresponding period of 2019.

It should be noted that the Group's net profit is also affected by the presumed losses from the exchange of currency surpluses (bank deposits and trade receivables), which has been affected by the depreciation of the US Dollar against Euro occurred during the second half of 2020.

On the other hand, it is a positive thing to point out that the management of the securities held in the portfolio has guaranteed full recovery of the losses reported at the beginning of the year. The 2020 financial year closed with a positive net result equal to Euro 1.65 million (the same management in 2019 guaranteed, at its full potential, a net profit of Euro 8.67 million)

The overall Net Financial Position of the Group (including the securities in portfolio held for use of liquidity) is back to an upward trend and equal to Euro 0.6 million against a (negative) value of Euro 5.01 million at the end of 2019.

The reason for this improvement was the ability of operational management to generate cash, despite the contraction in volumes.

(values in Euro thousands)	31 december	31 december
	2020 (a)	2019 (a)	Variazione
A. Cash	13.415	5.277	154%
C. Securities held for trading	8.044	7.916	2%
D. Cash and cash equivalent (A+C)	21.460	13.194	63%
F. Bank overdrafts	(0)	(314)	-100%
G. Current portion of non current borrowings	(6.904)	(6.686)	3%
H. Current lease liabilities	(944)	(1.138)
I. Current borrowingse (F+G)	(7.848)	(8.138)	-4%
J. Current net financial position (D+I)	13.612	5.056	169%
K. Non current borrowings	(10.755)	(6.958)	55%
M. Non current lease liabilities	(2.267)	(3.104)
N. Non current borrowings	(13.022)	(10.062)	29%
O. Total net financial position (J+N)	590	(5.006)	-112%
(a) Informations extracted and / or calculated from the financial statements prepared in accordance with IFRS as adopted by the
European Union.

Provided here below the Group's reclassified Income Statement for 2020 compared with the previous year:

Economic trends - Group B&C Speakers

(€ thousands)	2020	Incidence	2019	Incidence
Revenues	31.975	100,00%	56.287	100,0%
Cost of sales	(20.397)	-63,79%	(34.574)	-61,4%
Gross margin	11.578	36,21%	21.714	38,6%
Other revenues	541	1,69%	232	0,4%
Cost of indirect labour	(2.943)	-9,20%	(3.895)	-6,9%
Commercial expenses	(579)	-1,81%	(1.297)	-2,3%
General and administrative expenses	(3.474)	-10,86%	(4.174)	-7,4%
Ebitda	5.123	16,02%	12.580	22,3%
Depreciation of tangible assets	(1.989)	-6,22%	(1.990)	-3,5%
Amortization of intangible assets	(194)	-0,61%	(302)	-0,5%
Writedowns	(51)	-0,16%	(1)	0,0%
Earning before interest and taxes (Ebit)	2.889	9,04%	10.286	18,3%
Financial costs	(983)	-3,07%	(568)	-1,0%
Financial income	378	1,18%	932	1,7%
Earning before taxes (Ebt)	2.284	7,14%	10.650	18,9%
Income taxes	(367)	-1,15%	(2.039)	-3,6%
Profit for the year	1.917	5,99%	8.612	15,3%
Minority interest	0	0,00%	0	0,0%
Group Net Result	1.917	5,99%	8.612	15,3%
Other comprehensive result	(269)	-0,84%	55	0,1%
Total Comprehensive result	1.647	5,15%	8.667	15,4%

Significant events after December 31, 2020

The months following the closing of 2020 were characterized by the presence of some positive signals originated from the areas that are best fighting the Covid-19 pandemic; this confirms that a gradual and progressive return to normality will depend on the effective distribution of vaccines in various areas of the world.

Supported by these positive signals, the Management is working in order to ensure that the Group is ready in terms of positioning and commercial strength by the time signs of economic recovery are accentuated.

Other Resolutions adopted by the BoD

The Board of Directors has also called the Shareholders' Meeting, on single call, to be held on April 29, 2021 with the following Agenda:

- in ordinary session

1) Statutory and consolidated financial statements as at December 31, 2020. Related and consequent resolutions;

2) Report on Remuneration pursuant to art. 123-ter of Legislative Decree 58/98. Related and consequent resolutions;

3) Authorization for the purchase and sale of own shares. Related and consequent resolutions.

In consideration of the non-payment of the bonus with reference to the 2019 financial year and in view of recognizing a bonus to the shareholding structure, the board of directors proposes to the Issuer's meeting to approve a distribution of ordinary dividends for a total of Euro 0.26 for each

outstanding share; it should be noted that the dividend distributed is higher than the profit for the year 2020.

The ex-dividend date is scheduled on May 3, 2020 - in accordance with the provisions issued by Borsa Italiana S.p.A. - with record date on May 4, 2020 and the consequent payment ("payment date") on May 5, 2020.

Below are the Consolidated Balance Sheet and Income Statement schemes relating to the year 2020

CONSOLIDATED STATEMENT OF FINANCIAL POSITION		31 December	31 December
(Values in Euro)		2020	2019
ASSETS
Fixed assets
Tangible assets		2.768.007	3.252.228
Right of use		3.111.501	4.179.283
Goodwill		2.318.181	2.318.181
Other intangible assets		303.453	351.582
Investments in non controlled associates		50.000	50.000
Deferred tax assets		760.716	612.160
Other non current assets		655.222	665.646
	related parties	6.700	68.392
Total non current assets		9.967.080	11.429.080
Currents assets
Inventory		12.253.639	13.492.428
Trade receivables		7.084.606	12.842.205
Tax assets		1.739.974	843.794
Other current assets		8.502.546	8.396.516
Cash and cash equivalents		13.415.179	5.277.278
Total current assets		42.995.944	40.852.221
Total assets		52.963.024	52.281.301
LIABILITIES
Equity
Share capital		1.088.495	1.097.829
Other reserves		4.745.482	5.043.360
Foreign exchange reserve		296.495	560.962
Retained earnings		20.080.251	18.910.616
Total equity attributable to shareholders of the parent		26.210.723	25.612.766
Minority interest		-	-
Total equity		26.210.723	25.612.766
Non current liabilities
Long-term borrowings		10.754.968	6.957.599
Long-term lease liabilities		2.267.054	3.104.267
	related parties	1.694.474	2.290.500
Severance Indemnities		935.531	891.965
Provisions for risk and charges		39.271	38.238
Total non current liabilities		13.996.824	10.992.069
Current liabilities
Short-term borrowings		6.904.309	6.999.955
Short-term lease liabilities		943.509	1.138.075
	related parties	596.026	867.957
Trade liabilities		2.956.786	4.959.909
	related parties	47.976	4.377
Tax liabilities		366.811	720.077
Other current liabilities		1.584.062	1.858.449
Total current liabilities		12.755.477	15.676.465
Total Liabilities		52.963.024	52.281.301

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Values in Euro)	2020	2019
Revenues	31.975.254	56.287.240
Cost of sales	(20.396.953)	(34.573.611)
Other revenues	541.058	231.830
Cost of indirect labour	(2.942.757)	(3.894.779)
Commercial expenses	(579.475)	(1.297.027)
General and administrative expenses	(3.473.916)	(4.174.074)
related parties Depreciation and amortization	0 (2.183.381)	0 (2.292.241)
Writedowns	(50.659)	(996)
Earning before interest and taxes	2.889.172	10.286.343
Financial costs	(983.111)	(568.298)
related parties	(71.839)	(88.766)
Financial income	377.869	932.439
Earning before taxes	2.283.929	10.650.484
Income taxes	(367.380)	(2.038.929)
Profit for the year (A)	1.916.549	8.611.555
Other comprehensive income/(losses) for the year that will not be reclassified in icome statement:
Actuarial gain/(losses) on DBO (net of tax)	(4.826)	(5.720)
Other comprehensive income/(losses) for the year that will be reclassified in
icome statement:
Exchange differences on translating foreign operations	(264.466)	60.739
Total other comprehensive income/(losses) for the year (B)	(269.292)	55.019
Total comprehensive income (A) + (B)	1.647.257	8.666.575
Profit attributable to:
Owners of the parent	1.916.549	8.611.555
Minority interest	-	-
Total comprehensive income atributable to:

Owners of the parent	1.916.549	8.611.555
Minority interest	-	-
Total comprehensive income atributable to:
Owners of the parent	1.647.257	8.666.575
Minority interest	-	-
Basic earning per share	0,18	0,78
Diluted earning per share	0,18	0,78

The B&C Speakers S.p.A. Financial Reporting Manager, Francesco Spapperi, confirms—in accordance with Art. 154-bis, paragraph 2 of Italian Legislative Decree No. 58/1998—that the accounting disclosures contained in this press release are consistent with the company's accounting documents, books and records.

B&C Speakers S.p.A. Simone Pratesi (Investor Relator), Tel: 055/6572 303 Email: spratesi@bcspeakers.com B&C Speakers S.p.A.

B&C Speakers S.p.A. is an international leader in the design, production, distribution and marketing of professional electro-acoustic transducers (the main components in acoustic speakers for music, commonly referred to as loudspeakers), supplied mainly to professional audio-system manufacturers (OEM).

With around 130 employees, approximately 10% of which are assigned to its Research and Development Department, B&C Speakers carries out all design, production, marketing and control activities at its offices in Florence and Reggio Emilia for the brands of the Group: B&C, 18SOUND and CIARE. Most of its products are developed according to its key customers' specifications. B&C Speakers also operates in the US and Brazil through two subsidiaries carrying out commercial activities.