Sabaf

Earnings Release • Mar 20, 2017

Informazione Regolamentata n. 0226-33-2017		Data/Ora Ricezione 20 Marzo 2017 12:20:52	MTA - Star
Societa'	:	SABAF
Identificativo Informazione Regolamentata	:	86509
Nome utilizzatore	:	SABAFN03 - Beschi
Tipologia	:	IRAG 01
Data/Ora Ricezione	:	20 Marzo 2017 12:20:52
Data/Ora Inizio Diffusione presunta	:	20 Marzo 2017 12:35:53
Oggetto	:		Results at 31 December 2016 approved
Testo del comunicato

Vedi allegato.

Press release Ospitaletto, 20 March 2017

SABAF: RESULTS AT 31 DECEMBER 2016 APPROVED

• Consolidated results for 2016: revenue was €131 million (-5.1%); EBITDA was €25.4 million (-3.1%); EBIT was €12.5 million (-11.1%) and net profit was €9 million (+0.1%)
• Sabaf S.p.A. 2016 results: revenue was €102 million (-10.9%); EBITDA was 13.5 million (-16.1%), EBIT was €4.1 million (-54%), net profit was €2.5 million (-56.4%)
• A dividend of €0.48 per share will be proposed to the Shareholders' Meeting, that will be convened on 27 April 2017

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The Board of Directors of Sabaf S.p.A. met today in Ospitaletto (BS) and approved the consolidated results for 2016 and the draft financial statements of the parent company, as well as the Report on corporate governance and ownership structure requested by Article 123-bis of the Consolidated Finance Act (TUF) and the 2016 Report on remuneration prepared pursuant to Article 123-ter of the TUF.

Group consolidated results

In 2016, the Sabaf Group booked a 5.1% drop in sales; taking into consideration the same scope of consolidation, sales decreased by 6.7%. The crisis in the Middle Eastern and African markets (mainly Egypt), related exclusively to external factors (such as low oil price and shortage of strong currency), resulted in a drop in direct sales of more than €5 million and also affected the sales of the Group in Italy, since Italian customers are strong exporters to the Middle East. The positive trend of the other international markets, most notably the steady growth in North America, only partially offset the decline in sales in the Middle East, Africa and Italy. Average sales prices in 2016 were around 1.5% lower compared with 2015.

Despite the drop in sales volumes, the Group managed to maintain satisfactory income-related performances and to achieve a % EBITDA better than 2015: 2016 EBITDA was €25.4 million, equal to 19.4% of sales, compared with €26.2 million (19% of sales) in 2015, whereas, due to the greater impact of amortisation/depreciation, EBIT stood at €12.5 million (9.6% of sales) compared with €14.1 million (10.2% of sales) in 2015. Net profit of 2016, equal to €9 million, was mainly unchanged in absolute terms, whereas in percentage terms it reached 6.9% of sales (6.5% in 2015).

In 2016, the Sabaf Group made net investments of €11.8 million. The main investments in the financial year were aimed at increasing production capacity in Turkey and Brazil and the further automation of production of light alloy valves. The controlling share of A.R.C. s.r.l., leading company in the production of burners for professional cooking, was acquired by investing €4.8 million (€2.6 million net of the financial position of the acquired company).

At 31 December 2016, net financial debt was €23.5 million, compared with €25.9 million of 31 December 2015, whereas shareholders' equity totalled €112.3 million; the ratio between the net

financial debt and the shareholders' equity was 0.21, versus 0.23 in 2015.

Parent Company Sabaf S.p.A. results

The Parent Company Sabaf S.p.A.'s sales revenue for 2016 totalled €101.5 million (compared to €114 million reported in 2015, -10.9%), EBITDA was €13.5 million, down 16.1% from €16.1 million in 2015), EBIT was €4.1 million, down 54% from €8.8 million in the previous year and net profit was €2.5 million, down 56.4% from €5.6 million in 2015.

Call of Shareholders' Meeting and proposed dividend

The Board of Directors will propose to the Shareholders' Meeting – which will be held at 10.30 am on 27 April 2017 (single call) at the company's registered office in Ospitaletto (BS) – the distribution of a gross ordinary dividend of €0.48 per share (unchanged compared with 2016) for shares outstanding on 30 May 2017 (the record date), excluding, therefore, treasury shares on that date. The ex-date is scheduled for 29 May and the payment date will be 31 May.

The shareholders' meeting will also be asked to renew the authorisation to the Board of Directors for the purchase and sale of treasury shares and to appoint a new director to supplement the Board of Directors.

Fees following the termination of the office of the chief executive officer, Alberto Bartoli

In relation to the resignation of Alberto Bartoli from the office of director and chief executive officer, notified last 23 January, effective as from the date of the Shareholders' Meeting for the approval of the 2016 financial statements, scheduled for 27 April:

• Bartoli has a non-competition agreement with Sabaf S.p.A. with a duration of two years starting from the date of termination of office, against a total consideration of €290,000, which will paid after the termination in three annual tranches;
• Bartoli is not the beneficiary of any incentive plan based on financial instruments or of other fees, indemnities and/or benefits for the termination of office for any reason and/or in any form.

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The Annual Financial Report at 31 December 2016, the Independent Auditors' Report and the Board of Statutory Auditors' Report, the Report on Corporate Governance and Ownership Structure and the 2016 Report on Remuneration will be published on the website www.sabaf.it and on the centralised storage system "eMarket Storage", available on the website , on 6 April 2017.

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.

Annexes: consolidated and Sabaf S.p.A. financial statements. Figures not yet audited.

For further information:

Investor Relations	Press Office
Gianluca Beschi	Power Emprise - tel. +39 02 438114200
Tel: +39 030 6843236	Cosimo Pastore - +39 335 213305
gianluca.beschi@sabaf.it	cosimopastore@poweremprise.com
www.sabaf.it	Jenny Giuliani - +39 349 2408123
	jennygiuliani@poweremprise.com
	Erminia Cannistrà - +39 340 8684279
	erminiacannistra@poweremprise.com
	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 everincreasing 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

(€/000)	31/12/2016	31/12/2015
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	73,064	73,037
Real estate investment	6,270	6,712
Intangible assets	9,284	7,525
Equity investments	306	204
Non-current receivables	262	432
Deferred tax assets Total non-current assets	4,781 93,967	4,887 92,797
CURRENT ASSETS
Inventories	31,484	31,009
Trade receivables	36,842	40,425
Tax receivables	3,163	2,489
Other current receivables	1,419	1,447
Current financial assets	0	69
Cash and cash equivalents	12,143	3,991
Total current assets	85,051	79,430
ASSETS HELD FOR SALE	0	0
TOTAL ASSETS	179,018	172,227
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	11,533	11,533
Retained earnings, other reserves	90,471	90,509
Net profit for the year	9,009 111,013	8,998 111,040
Total equity interest of the Parent Company Minority interests	1,296	0
Total shareholders' equity	112,309	111,040
NON-CURRENT LIABILITIES
Loans	18,892	6,388
Other financial liabilities	1,762	0
Post-employment benefit and retirement reserves	3,086	2,914
Provisions for risks and charges	434	395
Deferred tax liabilities	764	772
Total non-current liabilities	24,938	10,469
CURRENT LIABILITIES
Loans	14,612	23,480
Other financial liabilities	335	31
Trade payables	18,977	19,450
Tax payables	1,190	1,219
Other payables	6,657	6,538
Total current liabilities	41,771	50,718
LIABILITIES HELD FOR SALE	0	0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	179,018	172,227

Consolidated Income Statement

(€/000) INCOME STATEMENT COMPONENTS OPERATING REVENUE AND INCOME Revenue 130,978 138,003 Other income 2,819 3,758 Total operating revenue and income 133,797 141,761 OPERATING COSTS Materials (47,346) (54,366) Change in inventories (754) 1,025 Services (27,983) (29,759) Payroll costs (32,112) (32,526) Other operating costs (1,078) (1,193) Costs for capitalised in-house work 841 1,230
Total operating costs (108,432) (115,589)
OPERATING PROFIT BEFORE DEPRECIATION
& AMORTISATION, CAPITAL GAINS/LOSSES,
AND WRITE-DOWNS/WRITE-BACKS OF NON
CURRENT ASSETS (EBITDA) 25,365 26,172
Depreciation & amortisation (12,853) (12,185)
Capital gains on disposals of non-current assets 18 104
OPERATING PROFIT (EBIT) 12,530 14,091
Financial income 101 67
Financial expenses (620) (596)
Exchange rate gains and losses 435 (89)
PROFIT BEFORE TAXES 12,446 13,473
Income tax (3,350) (4,475)
Minority interests (87) 0
NET PROFIT FOR THE YEAR 9,009 8,998
EARNINGS PER SHARE (EPS)
€0.792 €0.781 Base
€0.792 €0.781 Diluted

SABAF SpA - Statement of financial position

NON-CURRENT ASSETS Property, plant and equipment 31,092,204 31,939,736 Real estate investment 1,645,412 1,837,259 Intangible assets 3,095,000 3,197,864 Equity investments 50,098,459 45,819,480 Non-current financial assets 2,137,353 1,837,054 - of which to related parties 1,897,353 1,837,054 Non-current receivables 11,621 9,183 Deferred tax assets 3,315,263 3,284,696 Total non-current assets 91,395,312 87,925,272 CURRENT ASSETS Inventories 23,492,840 24,674,840 Trade receivables 27,465,436 32,870,713 - of which to related parties 1,191,581 2,008,185 Tax receivables 2,477,294 1,749,451 - of which to related parties 1,083,666 1,113,702 Other current receivables 1,039,324 1,197,919 Current financial assets 1,060,000 1,069,431 - of which to related parties 1,000,000 1,000,000 Cash and cash equivalents 1,796,980 1,089,671 Total current assets 57,331,874 62,652,025 ASSETS HELD FOR SALE 0 0 TOTAL ASSETS 148,727,186 150,577,297 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Share capital 11,533,450 11,533,450 Retained earnings, other reserves 77,530,764 79,058,252 Net profit for the year 2,459,688 5,642,123 Total shareholders' equity 91,523,902 96,233,825 NON-CURRENT LIABILITIES Loans 17,281,379 4,631,730 Other financial liabilities 240,000 0 Post-employment benefit and retirement reserves 2,435,538 2,527,275 Provisions for risks and charges 322,979 326,140 Deferred tax liabilities 129,289 150,017 Total non-current liabilities 20,409,185 7,635,162 CURRENT LIABILITIES Loans 14,054,604 21,762,487 Other financial liabilities 298,161 13,610 Trade payables 16,010,381 18,202,899 - of which to related parties 104,142 852,935 Tax payables 641,944 787,676 Other payables 5,789,009 5,941,638 Total current liabilities 36,794,099 46,708,310 LIABILITIES HELD FOR SALE 0 0	(in euro)	31/12/2016	31/12/2015
	ASSETS
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 148,727,186 150,577,297

SABAF SpA – Income Statement

(in euro)	2016	2015
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue	101,523,407	113,962,039
- of which to related parties	6,680,209	7,274,762
Other income	2,278,649	2,733,344
Total operating revenue and income	103,802,056	116,695,383
OPERATING COSTS
Materials	(36,875,454)	(43,860,895)
Change in inventories	(1,182,000)	(402,180)
Services	(26,031,824)	(28,750,556)
- of which from related parties	(4,151,074)	(4,162,137)
Payroll costs	(26,382,450)	(27,967,750)
Other operating costs	(647,178)	(821,303)
Costs for capitalised in-house work	841,526	1,230,058
Total operating costs	(90,277,380)	(100,572,626)
OPERATING PROFIT BEFORE DEPRECIATION AND AMORTISATION, CAPITAL GAINS/LOSSES, WRITE
DOWNS/WRITE-BACKS OF NON-CURRENT ASSETS
(EBITDA)	13,524,676	16,122,757
Depreciation & amortisation	(9,020,829)	(8,736,191)
Capital gains/(losses) on disposal of non-current assets	87,113	157,965
Write-downs/write-backs of non-current assets	(521,021)	1,302,841
- of which from related parties	(521,021)	1,302,841
OPERATING PROFIT (EBIT)	4,069,939	8,847,372
Financial income	84,559	73,091
Financial expenses	(512,872)	(500,483)
Exchange rate gains and losses	(48,356)	(260,920)
PROFIT BEFORE TAXES	3,593,270	8,159,060
Income tax	(1,133,582)	(2,516,937)
NET PROFIT FOR THE YEAR	2,459,688	5,642,123