Sabaf

Earnings Release • Feb 13, 2018

Informazione Regolamentata n. 0226-15-2018		Data/Ora Ricezione 13 Febbraio 2018 11:47:16	MTA - Star
Societa'	:	SABAF
Identificativo Informazione Regolamentata	:	99034
Nome utilizzatore	:	SABAFN03 - Beschi
Tipologia	:	REGEM
Data/Ora Ricezione	:	13 Febbraio 2018 11:47:16
Data/Ora Inizio Diffusione presunta	:	13 Febbraio 2018 11:47:17
Oggetto	:	Fourth-quarter 2017 results approved
Testo del comunicato

Vedi allegato.

Press release Ospitaletto (BS), 13 February 2018

SABAF: FOURTH-QUARTER 2017 RESULTS APPROVED

• In the fourth quarter, revenue was €37.4 million (+13.8%); EBITDA was €6.9 million (+6.8%); EBIT was €3.7 million (+17.4%); net profit was €4.6 million (+70.3%)
• For the whole of 2017, revenue was €150.2 million (+14.7%); EBITDA was €31 million (+22%); EBIT was €18.1 million (+44.9%); net profit was €14.8 million (+64.9%)

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The Board of Directors of Sabaf S.p.A. met today in Ospitaletto to approve the Interim Management Statement as at 31 December 2017.

Consolidated results for Q4 2017

In Q4 2017, the Sabaf Group reported revenue of €37.4 million, an increase of 13.8% versus the figure of €32.9 million in the corresponding period of the previous year. Therefore, sales performance confirmed the strong growth already recorded in the first nine months of the year, following the increase of the share of supply to the main customers, the introduction of innovative products and a generally positive tone of reference markets.

EBITDA for the fourth quarter of 2017 was €6.9 million, or 18.3% of sales, up by 6.8% compared to the figure of €6.4 million (19.5% of sales) in the fourth quarter of 2016. Profitability in the quarter was affected by the unfavourable exchange rate trend, which had a negative effect equal to 0.9% of sales, and by the increase in the prices of the main raw materials (negative effect equal to 0.6% of sales).

EBIT was €3.7 million, equivalent to 9.9% of sales, and 17.4% higher than the €3.1 million recorded in the same quarter of 2016 (9.6% of sales), whereas profit before taxes was €3.6 million, up by 9.4% compared to the €3.3 million recorded in Q4 2016.

The net profit for the period was €4.6 million, up by 70.3% compared to the figure of €2.7 million in Q4 2016. In the fourth quarter, the Group recorded the tax benefit relating to the Patent Box for the threeyear period from 2015 to 2017, following the advance agreement signed with the Tax Authorities. Consequently, in the current quarter, income taxes decreased by €1.3 million, of which €0.8 million related to the 2015 and 2016 financial years.

Consolidated results for 2017

The 2017 financial year ended with significantly improved results, both in terms of increased sales and profitability. Revenues amounted to €150.2 million, 14.7% higher than 2016 (taking into consideration the same area of consolidation, revenues increased by 12.9%), EBITDA amounted to €31 million (equivalent to 20.6% of sales), up by 22% compared to the figure of €25.4 million in 2016 (19.4% of sales), EBIT reached €18.1 million (equivalent to 12.1% of sales) up by 44.9% compared to the figure of €12.5 million in 2016 (when it was 9.6% of sales), and the net profit owned by the Group was €14.8 million, up 64.9% on the figure of €9 million in 2016.

Investments and financial position

Quarter investments totalled €3.3 million, bringing total investments for the year to €13.9 million (€11.8 million in 2016).

At 31 December 2017, net financial debt was €25.5 million, compared with €27.7 million at 30 September 2017 and €23.5 million at 31 December 2016.

Outlook

The start of 2018 shows a moderate increase in sales compared to the same period of 2017. After a year characterised by a growth rate that is clearly higher than the average trend of recent years and despite the still challenging competitive scenario, the Group estimates that revenues for the entire financial year 2018 will increase ranging from 3% to 5% compared to 2017. The Group also believes that the adjustment of sales prices and further improvements in operating efficiency will enable it to balance the negative impacts associated with the weakening of the dollar and the rise in commodity prices, and therefore estimates operating profitability (EBITDA%) to be in line with 2017. If the economic situation were to change significantly, actual figures might diverge from forecasts.

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Today at 16.00 p.m. CET there will be a conference call to illustrate the results of the fourth quarter of 2017 to financial analysts and institutional investors (please call the number +02 805 88 11 a few minutes before it begins).

The Interim Management Statement for Q4 2017, which has not been independently audited, is available in the Investor Relations section of the website www.sabaf.it.

Pursuant to article 154-bis, paragraph 2 of the Italian Consolidated Finance Act (Testo Unico della Finanza), the Company's Financial Reporting Officer Gianluca Beschi declares that the financial disclosure contained in this press release corresponds to the Company's records, books and accounting entries.

Attachments include the statement of financial position, income statement, net financial position and cash flow statement.

For more information:

Investor Relations	Press Office
Gianluca Beschi	Power Emprise - tel. +39 02 438114200
Tel: +39 030 6843236	Talia Godino - +39 348 3499793
gianluca.beschi@sabaf.it	tgodino@twistergroup.it
www.sabaf.it	Arnaldo Ragozzino - + 39 335 6978581
	aragozzino@twistergroup.it

Founded in the early fifties, SABAF has grown consistently over the years to become the key manufacturer in Italy – and one of the leading producers in the world – of components for kitchens and domestic gas cooking appliances.

There are four main lines of production: valves, thermostats and burners for gas cooking appliances and hinges for ovens, washing machines and dishwashers.

Technological expertise, manufacturing flexibility, and the ability to offer a vast range of components – tailor-made to meet the requirements of individual manufacturers of cookers and built-in hobs and ovens and in line with the specific characteristics of its core markets – are Sabaf's key strengths in a sector featuring major specialisation, constantly evolving demand and an ever-increasing orientation towards products assuring total reliability and safety.

The Sabaf Group has more than 800 employees. It operates through its parent company SABAF S.p.A. and the subsidiaries Sabaf do Brasil, Sabaf Turkey and Sabaf China, active in the production of domestic burners, A.R.C., which produces burners for professional cooking, and Faringosi Hinges, leader in the production of oven hinges.

Consolidated statement of financial position

	31/12/2017	30/09/2017	31/12/2016
(€/000)
ASSETS
NON-CURRENT ASSETS
Property, plant, and equipment	73,069	73,564	73,445
Investment property	5,697	5,805	6,270
Intangible assets	9,283	9,114	9,077
Equity investments	281	281	306
Financial assets	180	180	0
Non-current receivables	196	324	262
Deferred tax assets	5,096	4,793	4,781
Total non-current assets	93,802	94,061	94,141
CURRENT ASSETS
Inventories	32,929	36,719	31,484
Trade receivables	42,263	44,043	36,842
Tax receivables	3,065	2,316	3,163
Other current receivables	1,057	1,177	1,419
Financial assets	67	178	0
Cash and cash equivalents	11,533	6,348	12,143
Total current assets	90,914	90,781	85,051
ASSETS HELD FOR SALE	0	0	0
TOTAL ASSETS	184,716	184,842	179,192
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	11,533	11,533	11,533
Retained earnings, other reserves	87,227	89,144	90,471
Net profit for the period	14,835	10,229	8,994
Total equity interest of the Parent Company	113,595	110,906	110,998
Minority interests	1,460	1,444	1,379
Total shareholders' equity	115,055	112,350	112,377
NON-CURRENT LIABILITIES
Loans	17,760	15,031	18,892
Other financial liabilities	1,943	1,702	1,762
Post-employment benefit and retirement reserves	2,845	3,011	3,086
Provisions for risks and charges	385	388	434
Deferred tax liabilities	804	798	870
Total non-current liabilities	23,737	20,930	25,044
CURRENT LIABILITIES
Loans	17,288	17,203	14,612
Other financial liabilities	75	80	335
Trade payables	19,975	23,585	18,977
Tax payables	1,095	2,638	1,190
Other payables	7,491	8,056	6,657
Total current liabilities	45,924	51,562	41,771
LIABILITIES HELD FOR SALE TOTAL LIABILITIES AND SHAREHOLDERS'	0	0	0
EQUITY	184,716	184,842	179,192

Consolidated Income Statement

	Q4 2017		Q4 2016		12M 2017		12M 2016
(€/000)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenues	37,446	100.0%	32,919	100.0%	150,223	100.0%	130,978	100.0%
Other income	843	2.3%	863	2.6%	3,361	2.2%	2,819	2.2%
Total operating revenue and
income	38,289	102.3%	33,782	102.6%	153,584	102.2%	133,797	102.2%
OPERATING COSTS
Materials	(12,264)	-32.8%	(10,950)	-33.3%	(59,794)	-39.8%	(47,346)	-36.1%
Change in inventories	(3,580)	-9.6%	(1,392)	-4.2%	2,380	1.6%	(754)	-0.6%
Services	(7,046)	-18.8%	(6,872)	-20.9%	(30,227)	-20.1%	(27,983)	-21.4%
Payroll costs	(8,653)	-23.1%	(7,927)	-24.1%	(35,328)	-23.5%	(32,112)	-24.5%
Other operating costs	(313)	-0.8%	(419)	-1.3%	(1,134)	-0.8%	(1,078)	-0.8%
Costs for capitalised in-house work	422	1.1%	196	0.6%	1,474	1.0%	841	0.6%
Total operating costs	(31,434)	-83.9%	(27,364)	-83.1%	(122,629)		-81.6% (108,432)	-82.8%
OPERATING PROFIT BEFORE DEPRECIATION & AMORTISATION, CAPITAL GAINS/LOSSES, AND WRITE DOWNS/WRITE-BACKS OF NON
CURRENT ASSETS (EBITDA)	6,855	18.3%	6,418	19.5%	30,955	20.6%	25,365	19.4%
Depreciation and amortisation Capital gains/(losses) on disposals of	(3,162)	-8.4%	(3,272)	-9.9%	(12,826)	-8.5%	(12,882)	-9.8%
non-current assets	1	0.0%	0	0.0%	(12)	0.0%	18	0.0%
Write-downs/write-backs of non current assets	0	0.0%	0	0.0%	0	0.0%	0	0.0%
OPERATING PROFIT (EBIT)	3,694	9.9%	3,146	9.6%	18,117	12.1%	12,501	9.5%
Financial income	62	0.2%	52	0.2%	214	0.1%	101	0.1%
Financial expenses	(380)	-1.0%	(176)	-0.5%	(804)	-0.5%	(620)	-0.5%
Exchange rate gains and losses	182	0.5%	231	0.7%	274	0.2%	435	0.3%
Profits and losses from equity
investments	0	0.0%	0	0.0%	3	0.0%	0	0.0%
PROFIT BEFORE TAXES	3,558	9.5%	3,253	9.9%	17,804	11.9%	12,417	9.5%
Income tax	1,064	2.8%	(497)	-1.5%	(2,888)	-1.9%	(3,342)	-2.6%
NET PROFIT FOR THE PERIOD	4,622	12.3%	2,756	8.4%	14,916	9.9%	9,075	6.9%
of which:
Profit attributable to minority interests	16	0.0%	52	0.2%	81	0.1%	81	0.1%
PROFIT ATTRIBUTABLE TO THE GROUP	4,606	12.3%	2,704	8.2%	14,835	9.9%	8,994	6.9%

Consolidated statement of cash flows

(€/000)	Q4 2017	Q4 2016	12M 2017	12M 2016
Cash and cash equivalents at beginning of
period	6,348	6,724	12,143	3,991
Net profit/(loss) for the period	4,622	2,756	14,916	9,075
Adjustments for:
- Depreciation and amortisation for the period	3,162	3,272	12,826	12,882
- Realised gains/losses	(1)	0	12	(18)
- Financial income and expenses	318	124	590	519
- Income tax	(1,064)	501	2,888	3,350
Payment of post-employment benefit reserve	(96)	(109)	(189)	(184)
Change in risk provisions	(3)	103	(49)	39
Change in trade receivables	1,780	2,606	(5,421)	5,107
Change in inventories	3,790	1,222	(1,445)	416
Change in trade payables	(3,610)	1,661	998	(1,286)
Change in net working capital	1,960	5,489	(5,868)	4,237
Change in other receivables and payables,
deferred tax liabilities	(153)	(10)	1,029	1,268
Payment of taxes	(1,714)	(2,451)	(3,058)	(4,762)
Payment of financial expenses	(126)	(162)	(532)	(576)
Collection of financial income	62	52	214	101
Cash flow from operations	6,967	9,565	22,779	25,931
Net investments	(3,350)	(2,388)	(13,944)	(11,762)
Repayment of loans	(5,723)	(15,788)	(16,526)	(33,141)
New loans	8,533	15,075	17,751	37,321
Change in financial assets	111	69	(247)	69
Purchase/sale of treasury shares	(113)	(405)	(2,110)	(1,676)
Payment of dividends	0	0	(5,384)	(5,467)
Cash flow from financing activities	2,808	(1,049)	(6,516)	(2,894)
ARC acquisition	0	0	0	(2,614)
Foreign exchange differences	(1,240)	(709)	(2,929)	(509)
Net financial flows for the period	5,185	5,419	(610)	8,152
Cash and cash equivalents at end of period	11,533	12,143	11,533	12,143
Current financial debt	17,363	14,947	17,363	14,947
Non-current financial debt	19,703	20,654	19,703	20,654
Net financial debt	25,533	23,458	25,533	23,458

Consolidated net financial position

	(€/000)	31/12/2017	30/09/2017	31/12/2016
A.	Cash	14	19	12
B.	Positive balances of unrestricted bank accounts	11,009	5,636	8,376
C.	Other cash equivalents	510	693	3,755
D.	Liquidity (A+B+C)	11,533	6,348	12,143
E.	Current bank payables	11,157	11,635	7,811
F.	Current portion of non-current debt	6,131	5,568	6,801
G.	Other current financial payables	75	80	335
H.	Current financial debt (E+F+G)	17,363	17,283	14,947
I.	Net current financial debt (H-D)	5,830	10,935	2,804
J.	Non-current bank payables	16,298	13,532	17,281
K.	Other non-current financial payables	3,405	3,201	3,373
L.	Non-current financial debt (J+K)	19,703	16,733	20,654
M.	Net financial debt (L+I)	25,533	27,668	23,458