Aquafil

Earnings Release • May 14, 2018

Informazione Regolamentata n. 1938-67-2018		Data/Ora Ricezione 14 Maggio 2018 15:59:34	MTA - Star
Societa'	:	Aquafil S.P.A.
Identificativo Informazione Regolamentata	:	103773
Nome utilizzatore	:	AQUAFILNSS02 - -
Tipologia	:	REGEM
Data/Ora Ricezione	:	14 Maggio 2018 15:59:34
Data/Ora Inizio Diffusione presunta	:	14 Maggio 2018 15:59:35
Oggetto	:	The Board of Directors approved the	operating and financial results for Q1 2018
Testo del comunicato

Vedi allegato.

THE BOARD OF DIRECTORS APPROVED THE OPERATING AND FINANCIAL RESULTS FOR Q1 2018

• Revenues at March 31, 2018: €147.4 million, up by 1.5% compared to €145.2 million for the same period of 2017;
• EBITDA: €22.3 million, +7.4% (€20.7 million in Q1 2017);
• Adjusted EBIT: €15.9 million, +8.5% (€14.7 million in Q1 2017)
• Net profit: €9.8 million, +20.3% (€8.2 million in Q1 2017);
• Net financial position: €135.8 million compared to €112.1 million at December 31, 2017;
• Closing with Invista (April 27 2018) for the acquisition of its activity related to the Polyamide 6 BCF Fiber business in Asia Pacific with a turnover of about 50 million US dollars, an expected margin in line with Aquafil Group's consolidated EBITDA margin after business integration and a total cash commitment between 26.3 \$/mil and 31.3 \$/mil, including the necessary working capital.

Arco (Trento), May 14, 2018 – The Board of Directors of Aquafil S.p.A. (Aquafil or the Company) [ECNL IM] today approved the Company's operating and financial results at March 31, 2018.

Aquafil Group closed the first three months of the year with positive results, improving all its profitability indicators compared to the same period of 2017.

"We are very satisfied with the Group's performance for the first months of 2018," said Giulio Bonazzi, Aquafil's Chairman and Chief Executive Officer. "Our results — calculated on a likefor-like consolidation basis — confirm the soundness of our business model and our outstanding positioning at a global level. In just a few weeks from our listing, we have also completed several major projects, focusing our commitment towards organic and non-organic growth. The most significant event in this very first part of the year was the acquisition of INVISTA's assets related to the Polyamide 6 BCF Fiber business in Asia Pacific, which will allow us to strengthen and expand our presence in this geographical area, achieving an extremely high rate of growth. The acquisition is expected to yield the first economic benefits as soon as from mid-second quarter. In the meantime, the Carpet Recycling ACR#1 plant in Arizona started to operate, the first of a series of new sites aimed at further increasing ECONYL ® production. The short-term goal of this initiative is to achieve a year-after-year increase in the production of fiber through the ECONYL® Regeneration System, a world's one-of-a-kind process that complies with the Circular Economy principles in terms of innovation, efficiency and productivity."

Revenues

Revenues grew by 1.5%, amounting to €147.4 million compared to €145.2 million for Q1 2017, mainly as a result of the increase of product sales volume in the Polymers line.

A breakdown of Q1 2018 sales by geographical area and the three lines of product is given below, with a comparison with the figures for Q1 2017:

Breakdown of sales by geographical area

The following table compares the figures referring to the value and percentage of sales broken down by geographical area for the first quarters of 2018 and 2017:

Sales (€ million) by geographical area	Q1 2018	%	Q1 2017	%
Italy	36.28	24.6%	32.08	22.1%
EMEA	73.03	49.5%	72.58	50.0%
North America	22.26	15.1%	24.46	16.8%
Asia and Oceania	15.79	10.7%	15.95	11.0%
RoW	0.03	0.0%	0.12	0.1%

Sales on the Italian market increased mainly thanks to the Polymers line, whereas North America's decrease was essentially attributable to the exchange rate difference for the two reporting periods.

The breakdown of sales by geographical area reported no significant changes compared to March 31, 2017.

Breakdown of sales by line of product

The following table compares the figures referring to the amount and percentage of sales broken down by line of product for the first quarter of 2018 and the same period of 2017:

Sales (€ million) by Line of product	Q1 2018	%	Q1 2017	%
BCF	97.16	65.9%	102.42	70.5%
NTF	26.45	17.9%	27.68	19.1%
Polymers	23.77	16.1%	15.09	10.4%
TOTAL	147.38	100.0%	145.19	100.0%

The Polymers line's sales increased compared to the same period of 2017, following the decision to decrease the sales of low-margin commodity products of the BCF line, which thus shrank due both to the resultant impact and the effect of the exchange rate difference for sales in the dollar area.

The Group's revenues from sales of ECONYL®-branded products amounted to approximately 38% of fiber sales, up by about 2 percentage points compared to the first quarter of 2017.

Operating Profit and Margins

EBITDA went from €20.7 million to €22.3 million, up by 7.4%.

EBITDA margin improved by nearly one percentage point, growing from 14.3% to 15.1%, also thanks to the increase in the Group's sales of ECONYL®-branded products, which shifted the sales mix towards higher-margin products.

Net profit for the first quarter of 2018 amounted to €9.8 million, up by 20.3% compared to the same period of the previous year (€8.2 million).

Lastly, net financial position grew to €135.8 million, compared to €112.1 million at December 31, 2017.

The increase was mainly attributable to both the investments made during the period, including advance payments to Invista for the acquisition of its assets related to the Polyamide 6 BCF Fiber business in Asia Pacific, and the higher level of Working Capital used, as a result of sales growth for Q1 2018 compared to Q4 2017 and the final settlement of listing-related costs recorded in 2017.

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."

* * *

Founded in 1965, Aquafil is one of the main players, in Italy and worldwide, in the production of synthetic fibers, particularly for Polyamide 6 applications. The Group is present in three continents with a workforce of over 2,700 at production sights in Italy, Germany, Scotland, Slovenia, Croatia, USA, Thailand and China. For further information: www.aquafil.com

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 so as 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 BCF yarn and NTF yarn.

For further information

Investors Contact Media Contact Karim Tonelli Barabino & Partners investor.relations@aquafil.com T: +39 02 72.02.35.35 mob: +39 348 6022.950 Federico Vercellino

Barabino & Partners IR T: +39 02 72.02.35.35 Stefania Bassi s.bassi@barabino.it mob: +39 335 6282.667 Agota Dozsa a.dozsa@barabino.it mob: +39 338 7424.061 f.vercellino@barabino.it mob: +39 331 5745.17

Balance Sheet at March 31, 2018

CONSOLIDATED BALANCE SHEET	Q1 2018	FY17
$\varepsilon$ /000
Intangible Assets	11.754	7.782
Tangible Assets	159.632	153.927
Financial Assets	502	408
of which related parties	79	79
Investments Measured at Equity
Deferred Tax Assets	9.719	11.356
Total Non-Current Assets	181.608	173.472
Inventories	154.027	153.499
Trade Receivable	46.372	34.870
of which related parties	155	116
Financial Current Assets	989	988
of which related parties		÷
Current Tax Receivables	2.276	524
Other Current Assets	13.388	12.517
of which related parties	1.944	1.688
Cash and Cash Equivalents	83.705	99.024
Total Current Assets	300.756	301.422
Total Current Assets	482.364	474.895
Share Capital	49.709	49.673
Reserves	75.344	54.772
Group Net Profit for the year	9.818	20.570
Group Shareholders Equity	134.871	125.014
Net Equity attributable to minority interest	485	386
Net Profit for the year attributable to minority interest	23	99
Total Sharholders Equity	135.379	125,499
Employee Benefits	5.855	5.876
Non-Current Financial Liabilities	171.808	159.973
of which related parties
Provisions for Risks and Charges	1.672	1.516
Deferred Tax Liabilities	3.030	3.533
Other Pavables	8.739	7.858
Total Non-Current Liabilities	191.104	178,755
Current Financial Liabilities	48.709	52.111
Current Tax Payables	4.983	5.134
Trade Payables	80.780	94.477
of which related parties	397	716
Other Liabilities	21.410	18.919
of which related parties	457	457
Total Current Liabilities	155.882	170.641
Total Equity and Liabilities	482.364	474.895

Income Statement at March 31, 2018

CONSOLIDATED INCOME STATEMENT	O1 2018	of which	Q1 2017	of which
€/000		no recurrent		no recurrent
Revenue	147.382		145 188	12
of which related parties	141		300
Other Revenue	1	1
Total Revenue and Other Revenue	147.383	1	145.188	12
Raw Material	(79.687)	(2)	(75.527)
of which related parties			(9)
Services	23.368	(204)	(24.010)
of which related parties	(893)		(837)
Personel	(25.589)	(142)	(25.466)	(93)
of which related parties			(274)
Other Operating Costs	(480)	(19)	(592)	(73)
of which related parties	(17)		(17)
Depreciation and Amorti zation	(6.072)		(5.947)
Provi s ions and Write-downs	(300)		(148)
Capitalization of Internal Construction Costs	2.644		(4)
EBIT	14.531	(366)	13,494	(154)
Income (loss) from Investments			134
Other Financial Income	16		108
of which related parties
Interest Expenses	(1.377)		(1.641)
of which related parties
FX Gains and Losses	722		(642)
Profit Before Taxes	12,448	(366)	11.345	(154)
Income Taxes	2.598		(3.160)
Net Profit (Including Portion Attr. to Minority)	9.850	(366)	8.185	(154)
Net Profit Attributable to Minority Interest	23		24
Net Profit Attributable to the Group	9.827		8.161
Result for shares

Cash Flow Statement at March 31, 2018

CASH FLOW STATEMENT	Q1 18	Q1 17
€/000
Operation Activities
Net Profit (Including Portion Attr. to Minority)	9.850	8.185
of which related parties	(769)	(829)
Income Taxes	2.598	3.160
Income (loss) from Investments	0	0
Other Financial Income	(16)	(134)
of which related parties	0	(108)
Interest Expenses	1.377	1.641
FX Gains and Losses	722	642
Gain/Loss on non - current asset Disposals	(92)	0
Amortisation & Depreciation	300	12
Write-downs & Write-backs of intangible and tangible assets	6.072	5.947
Cash Flow from Operating Activities Before Changes in NWC	20.810	19.453
Change in Inventories	(528)	7.439
Change in Trade and Other Receivables	(13.697)	(7.707)
of which related parties	(319)	603
Change in Trade and Other Payables	(12.225)	(41.904)
of which related parties	39	415
Change in Other Assets/Liabilities	(854)	1.809
of which related parties	658	(1.725)
Net Interest Expenses paid	(666)	(1.431)
Income Taxes paid	o	0
Change in Provisions for Risks and Charges	(165)	0
Cash Flow from Operating Activities (A)	(7.326)	(22.341)
Attività di investimento
Investment in Tangible Assets	(12.277)	(5.373)
Divestment in Tangible Assets	924
Investment in Intangible Assets	(4.474)	(2.954)
Divestment in Intangible Assets	0	0
Investment in Financial Assets	0	0
Divestment in Financial Assets	0	1.100
Cash Flow used in Investing Activities (B)	(15.826)	(7.227)
Financing Activities
Increase in no current Loan and borrowing	30.000	3.000
Decrease in no current Loan and borrowing	(21.576)	(13.643)
Net variation in current fiancial Assets and Liability	(591)	(910)
Cash Flow from Financing Activities (C)	7.833	(11.553)
Net Cash Flow of the Year $(A)+(B)+(C)$	(15.319)	(41.121)

Adjusted EBITDA and EBIT at March 31, 2018

EBITDA and EBIT Adjusted	Q1 18	Q117
€/000
Net Profit (Including Portion Attr. to Minority)	9.850	8.185
Income Taxes	2.598	3.160
Income (loss) from Investments	0	$\bf{0}$
Amortisation & Depreciation	6.072	5.947
Write-downs & Write-backs of intangible and tangible assets	300	148
Financial items (*)	3.093	3.157
No recurring items (**)	(366)	(154)
EBITDA	22.279	20.751
Amortisation & Depreciation	6.072	5.947
Write-downs & Write-backs of intangible and tangible assets	300	148
EBIT Adjusted	15.907	14.656
Revenue	147.382	145.188
EBITDA Margin	15,12%	14,29%
EBIT Adjusted Margin	10,79%	10.09%

(*) It includes: (i) financial income amounting to €16 thousand at March 31, 2018 and €134 thousand at March 31, 2017; (ii) interest expenses of €1,377 thousand at March 31, 2018 and €1,641 thousand at March 31, 2017; (iii) FX losses amounting to €722 thousand at March 31, 2018 and €642 thousand at March 31, 2017; (iv) cash discounts to customers for €1,011 thousand for the reporting period at March 31, 2018 and €1,008 thousand at March 31, 2017. (**) It includes: (i) non-recurring charges related to the expansion of the Aquafil Group for €220 thousand at March 31, 2018; (ii) mobility and incentive charges for €93 thousand at March 31, 2017; and (ii) other non-recurring costs and income for €146 thousand at March 31, 2018 and €61 thousand at March 31, 2017.

Net Financial Position at March 31, 2018

NET FINANCIAL DEBT	Q1 2018	FY17
€/000
A. Cash	83.705	99.024
B. Other cash equivalents
C. Securities held-for-trading
D. Liquidity $(A + B + C)$	83.705	99.024
E. Current financial receivables	989	988
F. Current bank loans and borrowing	(41)	(72)
G. Current portion of non-current loans and borrowing	(46.818)	(50.199)
H. Other current loans and borrowing	(1.850)	(1.840)
I. Current financial debt ( $F + G + H$ )	(48.709)	(52.111)
J. Net current financial debt $(I + E + D)$	35.985	47.901
K. Non-current bank loans and borrowing	(104.245)	(91.597)
L. Bonds issued	(53.489)	(53.820)
M. Other non-current loans and borrowing	(14.074)	14.556)
N. Non-current financial debt ( $K + L + M$ )	(171.808)	(159.973)
O. Net financial debt $(I+N)$	(135.823)	(112.071)