Informazione Regolamentata n. 1938-45-2020		Data/Ora Ricezione 13 Novembre 2020 17:36:44	MTA - Star
Societa'	:	Aquafil S.P.A.
Identificativo Informazione Regolamentata	:	139283
Nome utilizzatore	:	AQUAFILNSS02 - Tonelli
Tipologia	:	3.1
Data/Ora Ricezione	:	13 Novembre 2020 17:36:44
Data/Ora Inizio Diffusione presunta	:	13 Novembre 2020 17:36:45
Oggetto	:	the Company's operating and financial results at September 30, 2020	The Board of Directors of Aquafil approved
Testo del comunicato

Vedi allegato.

REVENUES AND EBITDA RECOVERED IN Q3 2020

THE BENEFITS OF ACTIONS AIMED TO SAFEGUARD PROFITABILITY CONTINUED

NFP EVOLUTION IN LINE WITH EXPECTATIONS

MOST RECENT TRENDS IN LINE WITH 2020 ESTIMATES DESPITE A CONTEXT OF ONGOING UNCERTAINTY AND REDUCED VISIBILITY

MAIN INDICATORS AT SEPTEMBER 30, 2020:

Revenues: €327.9 million (-21.8%) in the first nine months of the year
EBITDA¹ : the benefits of the activities undertaken by the Group to protect profitability continued and EBITDA reached € 40.1 million, - 27% in the first 9 months of the year.
Net result: from €9.5 million in 2019 to (€2.9) million in 2020 due to the impact on profitability of revenue decrease and higher depreciation and amortization
Net financial position: €246.8 million at September 30, essentially in line with €249.6 million at December 31, 2019

Arco, November 13, 2020 — The Board of Directors of Aquafil S.p.A. [ECNL:IM] approved the Company's operating and financial results at September 30, 2020.

Giulio Bonazzi, Chairman and Chief Executive Officer, stated:

"For the Group, 2020 continues to represent one of the most challenging years that it has ever faced, with constantly evolving trends that differ extensively between the various areas in which it operates. Within this scenario, the Group's reaction has been once again extremely swift and flexible, as it has pursued a policy of safeguarding profitability and cash flows in the regions in which the effects of the pandemic have been felt the longest, while also taking advantage of the signs of recovery seen in areas where demand has recovered sooner.

The results for the nine months and the trend in the following weeks are consistent with the 2020 estimates presented, albeit within a scenario of renewed uncertainty and reduced visibility due to the new restrictive measures introduced in several countries. For this reason, the Group confirms its commitment to the implementation of the efficiency plans launched in 2019 and is evaluating the strengthening to promote new measures to protect profitability in the coming months."

¹EBITDA and Adjusted EBIT are calculated as per the table in Appendix 1 to this press release.

Operating results for the first nine months of 2020

Revenues

The evolution of the Group's revenues from one reporting period to another may also be significantly influenced by the performance of raw materials prices, which is reflected in final sales prices through predefined contractual mechanisms. In particular, compared to the first half of the year, the sales results in the third quarter of 2020 reflected the reduction in raw material prices recorded in the second quarter, resulting in significant discrepancies between changes in revenues and volumes sold. Accordingly, to ensure a proper understanding of its results, the Group has also decided to present its revenue performance in terms of "volumes sold" in reference to "first choice revenues". ²

At September 2020, Group's revenues amounted to €327.9 million, down 21.8% on an overall basis and 24.4% on a like-for-like consolidation basis³ : after a second quarter highly marked by the outbreak of the pandemic emergency, the July-September period witnessed a recovery, with revenues decreasing by 20.7% to €105.2 million.

In terms of "volumes sold", the Q3 decline was slightly under 10%, thus bringing the decrease in the 9-month period at around 15%.

				BCF (fibre for carpet)				NTF (fiber for fabrics)				Polymers				TOTALE
	Q3 YTD 2020	Q3 YTD 2019	Δ		Δ% Q3 YTD 2020	Q3 YTD 2019	Δ		Δ% Q3 YTD 2020	Q3 YTD 2019	Δ		Δ% Q3 YTD 2020	Q3 YTD 2019	Δ	Δ%
EMEA	115,8	155,3	(39,5)	(25,4)%	51,3	68,4	(17,0)	(24,9)%	19,6	27,2	(7,5)	(27,8)%	186,7	250,8	(64,1)	(25,5)%
North America	62,6	82,5	(20,0)	(24,2)%	18,3	10,0	8,3	83,1 %	4,4	4,7	(0,4)	(7,8)%	85,2	97,3	(12,0)	(12,4)%
Asia & Oceania	52,6	68,4	(15,8)	(23,1)%	2,0	1,6	0,4	26,7 %	0,0	0,4	(0,3)	(87,2)%	54,7	70,4	(15,7)	(22,3)%
RoW	0,4	0,1	0,2	N.A.	0,9	0,9	(0,0)	(3,8)%	0,0	0,0	(0,0)	N.A.	1,2	1,0	0,2	17,6 %
TOTAL	231,4	306,4	(75,0)	(24,5)%	72,5	80,9	(8,4)	(10,3)%	24,1	32,3	(8,2)	(25,5)%	327,9	419,5	(91,6)	(21,8)%

EMEA is the region where the Group is facing the greatest criticalities due to the weakness of the demand in all product lines: revenues in Q3 2020 amounted to €53.5 million, down 27.9%, bringing the decrease in cumulative revenues at 30 September - equal to € 186.7 million - to

² It bears recalling that "first choice" revenues are revenues generated by the sale of fibers and polymers, gross of any adjustments (e.g., discounts and allowances), but excluding revenues generated by "non -first choice products", revenues generated by Aquafil Engineering GmbH and "other revenues".

³ Excluding the effects arising from the acquisition of O'Mara Incorporated occurred on May 31, 2019 and consolidated as of June 1, 2019.

25.5%.. In terms of "volumes sold" alone, the Q3 decline of about 15% is reflected in the approximately 20% decrease at period-end.

An analysis by product line shows that:

i. the BCF line (yarn for carpets) fell by 25.4% at period-end, due to a Q3 reduction of 28.4% mainly attributable to the automotive and contract sectors of application;
ii. the NTF line (fiber for fabrics) fell by 28.9% in Q3 and by 24.9% overall;
iii. the Polymers line decreased by 22.5% in Q3 and by 27.8% overall.

In North America, Q3 revenues declined by 16.2%, from €35.3 million to €29.5 million, leading to a 12.4% decrease to €85.2 million at the end of September 2020 (-23.4% on like-for-like consolidation basis). Analyzing specifically the trend of "volumes sold", the Q3 decline was about 6%, with an 8% decrease at the period-end.

In detail, the different product lines showed the following performances:

i. the BCF line (yarn for carpets) fell by 22.9% in Q3 and by 24.2% at September 30;
ii. the NTF line (fiber for fabrics), which benefited from the acquisition of O'Mara, grew by 10.2% in Q3, rising by 83.1% at period-end;
iii. the Polymers line decreased by 21.2% in Q3 and by 7.8% at period-end.

In Asia and Oceania, where the Group markets exclusively BCF products, revenues declined by 5.2% in Q3, from €22.3 million to €21.2 million, and by 22.3% overall. The easing of the particularly strict pandemic containment measures in Oceania and the swift economic recovery in China led to a significant improvement, chiefly driven by the residential and automotive sectors. In terms of "volumes sold", the increase was nearly 10% in Q3, which led to a reduction of about 15% at the end of September.

With regard to revenues from sales of ECONYL® branded products, Q3 showed a 31.3% decline and was fully impacted by the pandemic effects, which had hit the related sectors of application only in the latter part of the first half of the year: the ratio to the Group's total revenues thus went from 37.3% to 32%. At September 30, revenues declined by 19.9%, with a ratio to sales going from 37.4% to 38.1%.

EBITDA

Thanks to a lower revenue decline and the continuation of the activities undertaken to protect the Group's profitability, EBITDA amounted to €13.2 million in Q3, down 16.7% in absolute terms, but with margins going from 11.9% to 12.5%.

As a result, the Group's EBITDA at September 30, 2020 was €40.1 million, down 27.0% on an overall basis and 29.2% on a like-for-like consolidation basis; the ratio to revenues went from 13.1% to 12.2% on an overall basis and from 12.9% to 12% on a like-for-like consolidation basis. In detail, the impact on profitability of the revenue decline — €34.8 million — was offset by both the benefits arising from the efficiency-building activities launched in 2019 — €9.1

million — and the countermeasures implemented by the Group for a more efficient management of fixed costs — €10.8 million. ⁴

EBIT

EBIT amounted to €0.2 million compared to €17 million at September 30, 2019. Despite benefiting from lower non-recurring charges⁵ , this result was attributable to both the marked EBITDA reduction (€14.8 million) and the increase in amortization, depreciation and writedowns (€7.8 million, of which €1.2 million relating to the consolidation of O'Mara Incorporated).

Net financial charges

At September 30, 2020, net financial charges amounted to €(3.1) million compared to €(3.7) million for the same period of 2019, which had benefited from a €1 million non-recurring income⁶ .

Net interest expenses rose slightly from €(5.1) million to €(5.9) million as a result of the Group's choice to rely on higher liquidity. The management of the currency component positively contributed to the result thanks to a €2.6 million net income.

Income taxes

At September 30, 2020, income taxes amounted to €0.1 million, significantly decreasing compared to €3.7 million for the same period of the previous year: the decline was attributable — with regard to both the current and deferred component — to lower profit before taxes.

Net profit

In the first nine months of 2020, net loss was €2.9 million compared to a net profit of €9.5 million for the same period of the previous year, mainly as a result of the decline in margins due to the outbreak of the pandemic and higher amortization and depreciation.

Consolidated capital and financial highlights at September 30, 2020

Investments

Following the conclusion of the intensive program implemented in the 2018-2019 period and the Group's decision to allocate its resources almost exclusively in investments instrumental to the Company's operations or to stepping up the efficiency of production facilities, net investments decreased markedly, amounting to €23.7 million at September 30, 2020 compared to €46.7 million for the same period of the previous year. Nearly 90% of the said amount was allocated to the aforementioned types of investment.

Net working capital

At September 30, 2020, net working capital declined slightly by €1.7 million. This item's main changes were chiefly attributable, on the one hand, to the significant reduction of inventories

⁴ With regard to the supporting measures promoted by the US Government known as "Paycheck Protection Program" (the so-called PPP Loan), it should be noted that the Group has initiated all procedures to transform the USD 5.5 million (€4.8 million) loan into an outright grant and is currently awaiting the US authorities' approval.

⁵ At September 30, 2020, the Group's result benefited from lower recurring charges for €5.3 million; the same period of the previous year had been impacted by €9.3 million non-recurring charges, of which €4 tied to the reorganization of the BCF production activities in EMEA.

⁶ It should be noted that said non-recurring income related to the recalculation of interest expenses on the property lease contract of Aquafil S.p.A. Net of this income, net financial charges at September 30, 2019 would have been €(4.8) million.

thanks to the decline in raw material prices and the efficient inventory management, and on the other, to the decline in trade payables due to the alignment of sales policies to the demand decline.

Net financial position

At September 30, 2020, net financial position amounted to €246.8 million, virtually in line with €249.6 million at December 31, 2019.

The €32.5 million cash flows generated by the Group — of which €34.1 million from operating activities and €1.7 million from net working capital absorbed — offset investments amounting to €23.7 million and the payment of interests and taxes totaling €5.8 and €0.3 million, respectively.

The activities launched by the Group in response to the impact of the pandemic situation continued in the third quarter. Two medium-/long-term financing transactions totaling €25 million were entered into: the first with BNL, amounting to €20 million; the latter with Credito Valtellinese, amounting to €5 million. These resources were allocated to increase liquidity, which rose from €90.4 million at December 31, 2019 to €150.9 million at September 30, 2020.

Outlook

In disclosing its results at June 30, 2020, the Group — assuming that there would be no additional waves of the pandemic, and thus no restrictive measures, in the autumn period had announced its estimates for the full year 2020 in terms of revenues, margins and net financial position:7-8

revenues and margins: down approximately 20%;
net financial position: up about 10%.

The October performance, with a decline in "first choice revenues" of 15%-20%, and the ongoing operating trends in all geographical areas confirmed the estimates for 2020, whereas the recent, less restrictive partial measures implemented by governments to combat the pandemic have yet to generate their considerable effects.

On the basis of the information available, the Group believes that the existing estimates for the year 2020 are still valid, albeit in a context characterized by renewed uncertainty and reduced visibility. Accordingly, on a prudential basis, the Group, in addition to its extremely close monitoring of the situation in the areas in which it operates, and in particular in several European countries, continues to implement the efficiency-building activities launched in the previous year, while also assessing the need to reinforce the measures already adopted to improve profitability.

⁷ Percentage changes in revenues, EBITDA and net financial position are determined by applying 2019 average Euro/Dollar exchange rates, equal to 1.12 and 7.73 respectively, to the Group's estimates for full year 2020.

* * *

Declaration of the appointed manager

"The Manager responsible for preparing the Company's financial reports, Sergio Calliari, declares, pursuant to Paragraph 2 of Article 154-bis of the Consolidated Finance Law, that the accounting information contained in this press release corresponds to the company's records, ledgers and accounting entries."

* * *

Aquafil is a pioneer in the circular economy also thanks to the ECONYL® regeneration system, an innovative and sustainable process able to create new products from waste and give life to an endless cycle. The nylon waste is collected in locations all over the world and includes industrial waste but also products – such as fishing nets and rugs – that have reached the end of their useful life. Such waste is processed to obtain a raw material – caprolactam – with the same chemical and performance characteristics as those from fossil sources. The polymers produced from ECONYL® caprolactam are distributed to the Group's production plants, where they are transformed into yarn for rugs carpet flooring and for clothing. Founded in 1965, Aquafil is one of the main producers of nylon in Italy and worldwide. The Group is present in seven countries and in three different continents, with over 2,800 employees at 16 production sites located in Italy, Scotland, Slovenia, Croatia, Unites States, Thailand and China.

For further information

Investors Contact

Karim Tonelli [email protected] mob: +39 348 6022.950

Barabino & Partners IR T: +39 02 72.02.35.35 Stefania Bassi [email protected] mob: +39 335 6282.667 Agota Dozsa [email protected] mob: +39 338 7424.061 Media Contact Barabino & Partners T: +39 02 72.02.35.35 Federico Vercellino [email protected] mob: +39 331 5745.171

Appendix 1 - EBITDA e Adjusted Operating Results

RECONCILIATION FROM NET PROFIT TO EBITDA €/000	September 2020	September 2019	Third Quarter 2020	Third Quarter 2019
Net Profit (Including Portion Attr. to Minority )	(2.899)	9.533	(964)	(1.120)
Income Taxes	(68)	3.714	(439)	77
Amortisation & Depreciation	32.506	25.972	10.752	9.398
Write-downs & Write-backs of intangible and tangible assets	1.548	236	461	12
Financial items (*)	4.953	6.191	2.105	1.605
No recurring items (**)	4.035	9.265	1.284	5.869
EBITDA	40.075	54.911	13.199	15.841
Revenue	327.930	419.537	105.197	132.870
EBITDA Margin	12,2%	13,1%	12,5%	11,9%

RECONCILIATION FROM EBITDA TO EBIT ADJUSTED €/000	September 2020	September 2019	Third Quarter 2020	Third Quarter 2019
EBITDA	40.075	54.911	13.199	15.841
Amortisation & Depreciation	32.506	25.972	10.752	9.398
Write-downs & Write-backs of intangible and tangible assets	1.548	236	461	12
EBIT Adjusted	6.021	28.703	1.986	6.431
Revenue	327.930	419.537	105.197	132.870
EBIT Adjusted Margin	1,8%	6,8%	1,9%	4,8%

(*) The financial items include: (i) financial income of Euro 0.4 million and Euro 1.1 million respectively in the periods ending September 30, 2020 and September 30, 2019 (ii) financial charges of Euro 6.1 million and Euro 6.2 million respectively in the periods ending September 30, 2020 and September 30, 2019, (iii) cash discounts of Euro 1.8 million end Euro 2.5 million respectively in the periods ending September 30, 2020 and September 30, 2019, and (iv) exchange gains of Euro 2.6 million and Euro 1.4 million respectively in the periods ending September 30, 2020 and September 30, 2019.

(**) This includes (i) non-recurring charges related to the expansion of the Aquafil Group and other corporate transactions for Euro 2.3 million and 3.7 million respectively in the periods ending September 30, 2020 and September 30, 2019, (ii) non-recurring industrial charghes of Euro 1.0 million for the period ending September 30, 2019, (iii) costs for restructuring for Euro 1.1 million and Euro 4.1 million respectively in the periods ending September 30, 2020 and September 30, 2019 and (iv) other non-recurring charges of Euro 0.6 million and Euro 0.5 million respectively in the periods ending September 30, 2020 and September 30, 2019.

Appendix 2 – Consolidated Balance Sheet

CONSOLIDATED BALANCE SHEET	At September 30,	At December 31,
€/000	2020	2019
Intangible Assets	22.551	21.101
Goodwill	12.502	13.029
Tangible Assets	237.559	251.492
Financial Assets	630	765
of which related parties	318	313
Other Assets	1.336	2.189
Deferred Tax Assets	11.538	13.636
Total Non-Current Assets	286.115	302.212
Inventories	157.565	184.931
Trade Receivable	25.889	24.960
of which related parties	109	69
Financial Current Assets	844	1.637
Current Tax Receivables	1.871	1.639
Other Current Assets	12.510	12.126
of which related parties	2.527	2.231
Cash and Cash Equivalents	150.921	90.400
Asset held for sales	-	428
Total Current Assets	349.600	316.120
Total Current Assets	635.715	618.332
Share Capital	49.722	49.722
Reserves	92.391	81.813
Group Net Profit for the year	(12.678)	10.799
Group Shareholders Equity	129.435	142.335
Net Equity attributable to minority interest	1	1
Net Profit for the year attributable to minority interest	0	-
Total Sharholders Equity	129.436	142.336
Employee Benefits	5.638	5.721
Non-Current Financial Liabilities	353.505	286.970
of which related parties	6.284	9.624
Provisions for Risks and Charges	1.979	1.508
Deferred Tax Liabilities	8.837	10.915
Other Payables	12.175	15.383
Total Non-Current Liabilities	382.135	320.497
Current Financial Liabilities	45.075	54.733
of which related parties	3.525	3.572
Current Tax Payables	1.072	1.127
Trade Payables	56.314	76.089
of which related parties	590	127
Other Liabilities	21.683	23.551
of which related parties	230	236
Total Current Liabilities	124.145	155.499
Total Equity and Liabilities	635.715	618.332

Appendix 3 –Consolidated Income Statement

CONSOLIDATED INCOME STATEMENT	September	of wich non	September	of wich non	Third	of wich non	Third	of wich non
€/000	2020	current	2019	current	Quarter 2020	current	Quarter 2020	current
Revenue	327.930	287	419.537		105.197	120	132.870
of which related parties	80		29		53		-
Other Revenue	4.322	82	1.592	112	951	22	411	17
Total Revenue and Other Revenue	332.252	368	421.129	112	106.148	142	133.281	17
Raw Material	(159.480)	(64)	(217.206)	(116)	(50.003)	(6)	(68.981)	3
Services	(63.509)	(1.693)	(75.587)	(3.383)	(21.213)	(658)	(24.396)	(1.043)
of which related parties	(319)		(343)		(108)	-	(124)
Personel	(75.764)	(1.856)	(84.741)	(5.146)	(24.129)	(688)	(30.680)	(4.407)
Other Operating Costs	(3.382)	(790)	(2.703)	(733)	(800)	(74)	(1.392)	(440)
of which related parties	(52)		(38)	-	(17)	-	-	-
Depreciation and Amorti zation	(32.506)		(25.972)	-	(10.752)	-	(9.398)
Doubtful debt prevision	(1.094)		(118)	-	(10)	-	(12)	-
Provisions for risks and charges	(454)		(118)	-	(451)	-	-	-
Capitalization of Internal Construction Costs	4.099		2.283	-	1.433	-	1.398	-
EBIT	161	(4.035)	16.966	(9.265)	223	(1.284)	(182)	(5.869)
Other Financial Income	353		1.120	1.082	156	-	20
Interest Expenses	(6.137)		(6.236)	-	(1.896)	-	(2.518)
of which related parties	(177)		(132)	-	(54)	-	-
FX Gains and Losses	2.656		1.396	-	115	-	1.636	-
Profit Before Taxes	(2.966)	(4.035)	13.248	(8.183)	(1.403)	(1.284)	(1.043)	(5.869)
Income Taxes	68	-	(3.714)	-	439	-	(77)	-
Net Profit (Including Portion Attr. to Minority )	(2.899)	(4.035)	9.533	(8.183)	(964)	(1.284)	(1.120)	(5.869)
Net Profit Attributable to Minority Interest	0		0		-		-
Net Profit Attributable to the Group	(2.899)		9.533		(964)		(1.120)

Appendix 4 – Consolidated Cash Flow Statement

CASH FLOW STATEMENT	At September 30,	At September 30,
€/000	2020	2019
Operation Activities
Net Profit (Including Portion Attr. to Minority )	-2.899	9.533
of which related parties	-468	-484
Income Taxes	-68	3.714
Income (loss) from Investments	-353	-1.120
of which related parties
Other Financial Income	6.137	6.236
of which related parties	-177	-132
FX (Gains) and Losses	-2.656	-1.396
(Gain)/Loss on non - current asset Disposals	-86	-192
Provisions & write-downs	1.094	118
Amortisation, depreciation & write-downs	454	118
Net variation non-monetary increase IFRS16	32.516	25.963
Non-monetary decrease IFRS 16	-2.119	-4.614
Cash Flow from Operating Activities Before Changes in NWC	32.019	38.359
Change in Inventories	27.366	-1.531
Change in Trade and Other Receivables	-19.774	-34.222
of which related parties	463	-524
Change in Trade and Other Payables	-1.383	4.710
of which related parties	-40	20
Change in Other Assets/Liabilities	-7.105	5.594
of which related parties	-302	200
Net Interest Expenses paid	-5.784	-4.166
Income Taxes paid	-271	-821
Change in Provisions for Risks and Charges	-773	-473
Cash Flow from Operating Activities (A)	24.294	7.451
Investing activities
Investment in Tangible Assets	-18.398	-38.963
Disposal of Tangible Assets	762	277
Investment in Intangible Assets	-4.019	-3.421
Disposal of Intangible Assets	80	9
Business Purchases Aquafil O'Mara	0	-37.225
of which Asset	0	-15.715
of which Goodwill	0	-14.673
of which cash	0	150
of which other assets and liabilities	0	-6.988
Disposal of Financial Assets	-5	0
Cash Flow used in Investing Activities (B)	(21.581)	(79.324)

Financing Activities Increase in no current Loan and borrowing	69.956	103.000
Decrease in no current Loan and borrowing	-8.161	-31.255
	-3.986	-1.367
Net variation in current fiancial Assets and Liability
of which related parties	-3.392	3.184
Dividends Distribution	0	-12.273
of which related parties	0	-7.316
Cash Flow from Financing Activities ( C)	57.808	58.104
Net Cash Flow of the Year (A)+(B)+(C)	60.521	(13.769)

Appendix 5 – Net Financial Debt

NET FINANCIAL DEBT	At September 30,	At December 31,
€/000	2020	2019
A. Cash	150.921	90.400
B. Other cash equivalents		-
C. Securities held-for-trading		-
D. Liquidity ( A + B + C)	150.921	90.400
E. Current financial receivables	844	1.637
F. Current bank loans and borrowing	(32)	(129)
G. Current portion of non-current loans and borrowing	(36.711)	(46.056)
H. Other current loans and borrowing	(8.332)	(8.547)
I. Current financial debt ( F + G + H )	(45.075)	(54.733)
J. Net current financial debt (I + E+ D)	106.689	37.304
K. Non-current bank loans and borrowing	(240.567)	(169.796)
L. Bonds issued	(90.419)	(90.458)
M. Other non-current loans and borrowing	(22.520)	(26.619)
N. Non-current financial debt ( K + L + M )	(353.505)	(286.874)
O. Net financial debt (J+N)	(246.816)	(249.570)

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