Sabaf

Earnings Release • Aug 4, 2016

Informazione Regolamentata n. 0226-100-2016		Data/Ora Ricezione 04 Agosto 2016 12:46:45	MTA - Star
Societa'	:	SABAF
Identificativo Informazione Regolamentata	:	77951
Nome utilizzatore	:	SABAFN03 - Beschi
Tipologia	:	IRAG 02
Data/Ora Ricezione	:	04 Agosto 2016 12:46:45
Data/Ora Inizio Diffusione presunta	:	04 Agosto 2016 13:01:46
Oggetto	:	First-half 2016 results approved
Testo del comunicato

Vedi allegato.

Press Release Ospitaletto (BS), 4 August 2016

SABAF APPROVES RESULTS FOR FIRST HALF OF 2016

• In H1 2016, Sabaf booked revenue of 64.9 million (-10.6%), EBITDA of €12.4 million (-13.9%), EBIT of €6 million (-28%) and net profit of €3.9 million (-27.9%)
• In Q2 2016, revenue was €34 million (-2.9%), EBITDA was €6.8 million (+1.8%), EBIT was €3.6 million (-2%) and net profit was €2.4 million (+1.6%)
• Forecasts confirmed for a modest downturn in sales and profitability for whole of 2016 versus 2015

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The Board of Directors of Sabaf S.p.A. met today in Ospitaletto to approve the Half-Year Report at 30 June 2016.

Consolidated results for H1 2016

The Sabaf Group reported revenue of €64.9 million in the first half of 2016, a decrease of 10.6% versus the figure of €72.5 million in the corresponding period of the previous year.

The decline in sales is mainly attributable to the economic downturn in some of the main markets in which the group operates, such as Egypt and Brazil. Sales in Italy, which have been associated with customers with a strong focus on exports – mainly in North Africa and the Middle East – have also been affected by the difficult economic and socio-political scenario of this geographical area.

Average sale prices for the period were down by 1.6% versus the first half of 2015.

The analysis per product family shows a more marked decrease of brass valves and thermostats, products intended mainly for the North African and Middle East markets.

During the first half of the year, the Group has benefited, apart from the reduction in the costs of acquisition of raw materials (estimated at 1% of sales) and the favourable exchange rate development (estimated at 0.8% of sales), from the improvement in efficiency of the production processes following further technical and organisational measures.

Therefore, the profitability of the period, although affected by the low sales volumes, stood at satisfactory levels: EBITDA of the first half of 2016 came in at €12.4 million (19.1% of sales and down 13.9% on the same period of 2015, when it was 19.8% of sales) and EBIT was €6 million (9.3% of sales, down by 28% on the figure of €8.4 million for the first half of 2015). Pretax profit amounted to €5.9 million in H1 2016 (€8.2 million in H1 2015), and net profit was €3.9 million (€5.5 million in H1 2015, a drop of 27.9%).

At 30 June 2016 the equity situation shows consolidated shareholders' equity owned by the Group of €108.2 million and net financial debt of €34.3 million (€111 million and €25.9 million respectively at 31 December 2015), after the distribution of dividends of €5.5 million and acquisition of the controlling interest of A.R.C. s.r.l. for €4.8 million, leader in Italy in the manufacture of burners for professional cooking.

Investments in H1 2016 were €7 million (€7.9 million in H1 2015); the largest investments were for increasing production capacity in Turkey and in Brazil, where the production of triple crown burners for the local market got under way.

Net working capital is €51.2 million at 30 June 2016, versus €48.2 million at the end of 2015. The increase is attributable to the seasonal trend and the first-time consolidation of A.R.C.'s financial data.

Consolidated results for Q2 2016

Sales in the second quarter of 2016 amounted to €34 million, a drop of 2.9% compared to €35 million in the same period of 2015. In the period there was a more regular development of demand, and some signs of recovery have been noticed in the markets that suffered most at the start of the year, such as Egypt and Turkey.

Second-quarter EBITDA was €6.8 million, equivalent to 20% of sales (+1.8% versus €6.7 million in Q2 2015, when it was 19% of sales), and EBIT was €3.6 million, equivalent to 10.5% of sales (-2% versus €3.7 million in Q2 2015, when it was 10.4% of sales). Net profit for the period was €2.4 million, versus €2.3 million for Q2 2015 (+1.6%).

Forecasts for the rest of the year

Sales and orders for July and August show a substantial stability versus the same period of 2015. The Group confirms the forecasts of a modest decline in sales and profitability for the full year 2016.

These forecasts assume a macroeconomic scenario not affected by unpredictable events. If the economic situation were to change significantly, actual figures might diverge from the forecasts.

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The results will be presented to the financial community at 14.30 today, 4 August 2016, during a conference call (call 02 805 88 11 a few minutes before the scheduled start).

The Half-Year Report at 30 June 2016 will be made available to the public in accordance with the law on 5 August 2016. On the same day it will be published on Company's 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.

The consolidated financial statements are attached.

For more information:

Investor Relations	Press Office
Gianluca Beschi	Power Emprise - tel. +39 02 39400100
tel. +39 030 6843236	Cosimo Pastore – +39 335 213305
gianluca.beschi@sabaf.it	cosimopastore@poweremprise.com
www.sabaf.it	Erminia Cannistrà - +39 340 8684279
	erminiacannistra@poweremprise.com
	Arnaldo Ragozzino - + 39 335 6978581
	aragozzino@twistergroup.it

Founded in the early 1950s, SABAF has grown consistently over the years to become the key manufacturer in Italy – and one of the leading in the world – of components for kitchens and domestic gas cooking appliances.

There are four main production lines: 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 700 employees. It operates through its direct parent company Sabaf S.p.A. and the subsidiaries Faringosi Hinges (leader in the production of oven and dishwasher hinges), and Sabaf do Brasil, Sabaf Turkey and Sabaf China, which are active in production of burners for their regional markets

Consolidated Balance Sheet and Financial Position

(€/000)	30.06.2016	31.12.2015
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	74,802	73,037
Real estate investment	6,491	6,712
Intangible assets	9,598	7,525
Investments	311	204
Non-current receivables	708	432
Deferred tax assets	4,764	4,887
Total non-current assets	96,674	92,797
CURRENT ASSETS
Inventories	34,643	31,009
Trade receivables	43,629	40,425
Tax receivables	2,616	2,489
Other current receivables	1,450	1,447
Current financial assets	75	69
Cash and cash equivalents	5,105	3,991
Total current assets	87,518	79,430
ASSETS HELD FOR SALE	0	0
TOTAL ASSETS	184,192	172,227
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	11,533	11,533
Retained earnings, other reserves	92,764	90,509
Net profit (loss) for period	3.935	8.998
Total equity interest of the Parent Company	108.232	111.040
Minority interests	1.210	0
Total shareholders' equity	109,442	111,040
NON-CURRENT LIABILITIES
Loans	8,956	6,388
Other financial payables	1,822	0
Post-employment benefit and retirement reserves	3,130	2,914
Reserves for risks and contingencies	329	395
Deferred tax	762	772
Total non-current liabilities	14,999	10,469
CURRENT LIABILITIES
Loans	28,578	23,480
Other financial payables	28	31
Trade payables	21,975	19,450
Tax payables	1,586	1,219
Other liabilities	7,584	6,538
Total current liabilities	59,751	50,718
LIABILITIES HELD FOR SALE TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	0 184,192	0 172,227

Consolidated Income Statement

	Q2 2016	Q2 2015	H1 2016	H1 2015
(€/000)
OPERATING REVENUE AND INCOME
Revenues	33,993	35,008	64,853	72,509
Other income	739	916	1,350	1,979
Total operating revenue and income	34,732	35,924	66,203	74,488
OPERATING COSTS
Materials	(13,922)	(13,591)	(25,370)	(28,853)
Change in inventories	1,874	(135)	2,496	1,877
Services	(7,420)	(7,327)	(14,368)	(15,963)
Payroll costs	(8,460)	(8,405)	(16,577)	(17,060)
Other operating costs	(234)	(158)	(451)	(752)
Costs for capitalised in-house work	213	353	433	627
Total operating costs	(27,949)	(29,263)	(53,837)	(60,124)
OPERATING PROFIT BEFORE DEPRECIATION & AMORTISATION, CAPITAL GAINS/LOSSES, AND WRITE-DOWNS/WRITE-BACKS OF NON
CURRENT ASSETS (EBITDA)	6,783	6,661	12,366	14,364
Depreciation and amortisation	(3,198)	(3,008)	(6,331)	(6,019)
Capital gains/(losses) on disposals of non-current assets	(2)	3	8	45
Write-downs/write-backs of non-current assets	0	0	0	0
OPERATING PROFIT (EBIT)	3,583	3,656	6,043	8,390
Financial income	10	10	32	18
Financial expenses	(150)	(154)	(285)	(305)
Exchange rate gains and losses	129	9	126	120
Profits and losses from equity investments	0	0	0	0
PROFIT BEFORE TAXES	3,572	3,521	5,916	8,223
Income tax	(1,194)	(1,180)	(1,981)	(2,768)
Minority interests	0	0	0	0
NET PROFIT FOR THE PERIOD	2,378	2,341	3,935	5,455

Consolidated cash flow statement

Cash and cash equivalents at beginning of period	H1 2016 3,991	H1 2015 3,675
Net profit/(loss) for the period	3,935	5,455
Adjustments for:
- Depreciation and amortisation for the period	6,331	6,019
- Realised gains/losses	(8)	(45)
- Financial income and expenses	253	287
- Income taxes	1,981	2,768
Change in post-employment benefit reserve	(53)	(84)
Change in risk provisions	(22)	(43)
Change in trade receivables	(1,680)	(3,678)
Change in inventories	(2,743)	(1,458)
Change in trade payables	1,712	4,183
Change in net working capital	(2,711)	(953)
Change in other receivables and payables, deferred tax	775	(305)
Payment of taxes	(1,558)	(769)
Payment of financial expenses	(265)	(281)
Collection of financial income	32	18
Cash flow from operations	8,690	12,067
Investments in non-current assets
- intangible	(438)	(506)
- tangible	(6,574)	(7,605)
- financial	0	(26)
Disposal of non-current assets	52	204
Cash flow from investments	(6,960)	(7,933)
Repayment of loans	(11,083)	(9,501)
New loans	19,046	12,204
Purchase of own shares	(1,132)	0
Payment of dividends	(5,467)	(4,613)
Cash flow from financing activity	1,364	(1,910)
Acquisition of A.R.C.	(2,614)	0
Foreign exchange differences	634	(611)
Net financial flows for the period	1,114	1,613
Cash and cash equivalents at end of period	5,105	5,288
Current financial debt	28,606	24,305
Non-current financial debt	10,778	8,289
Net financial debt	34,279	27,306

(amounts in €'000)	Q2 2016 (*)	Q2 2015 (*)	% change	H1 2016	H1 2015	% change	FY 2015
Italy	10,123	11,152	-9.2%	20,966	22,662	-7.5%	41,244
Western Europe	1,865	1,643	+13.5%	3,551	3,968	-10.5%	7,438
Eastern Europe	9,304	9,520	-2.3%	17,088	18,947	-9.8%	35,125
Middle East and Africa	2,772	4,206	-34.1%	4,910	9,002	-45.5%	16,759
Asia and Oceania	1,664	1,428	+16.5%	3,101	3,151	-1.6%	7,019
South America	5,275	4,834	+9.1%	9,761	10,421	-6.3%	20,815
North America and Mexico	2,990	2,225	+34.4%	5,476	4,358	+25.7%	9,603
Total	33,993	35,008	-2.9%	64,853	72,509	-10.6%	138,003

Sales by geographical area

Sales by product line

(amounts in €'000)	Q2 2016	Q2 2015	% change	H1 2016	H1 2015	% change	FY 2015
Brass valves	2,509	3,397	-26.1%	4,540	7,038	-35.5%	12,689
Light alloy valves	8,980	8,723	3.0%	17,133	18,115	-5.4%	33,784
Thermostats	2,486	2,760	-9.9%	4,426	5,871	-24.6%	10,596
Standard burners	9,369	9,335	0.4%	18,160	19,229	-5.6%	37,789
Special burners	5,126	5,342	-4.0%	9,903	11,125	-11.0%	21,622
Accessories	3,296	3,459	-4.7%	6,432	7,174	-10.3%	13,577
Total gas parts	31,766	33,016	-3.8%	60,594	68,552	-11.6%	130,057
Hinges	2,227	1,992	+11.8%	4,259	3,957	+7,6	7,946
Total	33,993	35,008	-2.9%	64,853	72,509	-10.6%	138,003