Aquafil

Earnings Release • Mar 23, 2018

Informazione Regolamentata n. 1938-40-2018		Data/Ora Ricezione 23 Marzo 2018 MTA - Star 17:31:45
Societa'	:	Aquafil S.P.A.
Identificativo Informazione Regolamentata	:	100820
Nome utilizzatore	:	AQUAFILNSS02 - -
Tipologia	:	1.1
Data/Ora Ricezione	:	23 Marzo 2018 17:31:45
Data/Ora Inizio Diffusione presunta	:	23 Marzo 2018 17:31:46
Oggetto	:	The Board of Directors approved the Consolidated Financial Statements for 2017	Company's draft Financial Statements and
Testo del comunicato

Vedi allegato.

THE BOARD OF DIRECTORS APPROVED THE COMPANY'S DRAFT FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS FOR 2017

ALL AQUAFIL FINANCIAL INDICATORS ON THE RISE

• Consolidated revenues: €549.4 million at December 31, 2017, up by 14.0% compared to the previous year (€482.0 million);
• EBITDA: €72.6 million, up 11.5% from €65.1 million;
• Adj. EBIT: €47.2 million, up by 17.1% from €40.3 million;
• Net profit: €25.2 million, up by 25.3% from €20.1 million;
• Net financial position: €112.1 million compared to €118 million at December 31, 2016;
• Dividend proposal equal to euro 0,24 per share.

Arco (Trento), March 23, 2018 – The Board of Directors of Aquafil S.p.A. (Aquafil or the Company) [ECNL IM] today approved the Company's draft Financial Statements and Consolidated Financial Statements for the year ended December 31, 2017.

Aquafil Group reported positive results in 2017, improving all its profitability indicators compared to the previous year.

The sales volumes generated by the three product lines rose overall compared to 2016, thanks to both the significantly increasing volumes, especially regarding the Polymers' and BCF lines (Bulk Continuous Filaments — synthetic fibers primarily used in textile floorings), above all on the U.S. and Asia Pacific markets and to the price growth of raw material reflected also on sales price.

"We are very proud to have achieved excellent results in such an important year, as a newly listed company on the STAR segment of the Italian Stock Exchange. The goal that we set for ourselves was to create value for our shareholders in a sustainable manner by continuing to implement our growth strategy, including through the implementation of projects such as the ECONYL® Regeneration System," said Giulio Bonazzi, Aquafil's Chairman and Chief Executive Officer. "This industrial system is one of the most efficient in the world for the complete regeneration of raw materials, and it allows us not only to regenerate waste that would otherwise end up in a dump or in the oceans, but also a real and significant reduction in the consumption of natural fossil resources, while also creats high barriers to entry for any new competitor. This enables us to expand our client portfolio and to seek to increase Aquafil's market share even further."

Revenues

Consolidated revenues increased by 14.0% to €549.3 million, compared to the €482.0 million at December 31, 2016.

This growth was due in part to the volume increase as for the Polymers line and for the BCF line (bulk continuous filament, synthetic fibers used mostly in textile floorings), particularly for the latter in the Asia Pacific and the USA, and to the increase of raw material prices, which was reflected then in sales prices. In addition, the product mix had a positive impact on sales prices, as well.

Moreover, in 2017 there was a significant increase in the costs of raw materials, ancillaries and consumables (equal to €289.2 million, +20.2%), driven mostly by the increase in volumes and by the price/unit increase of the Group's main raw material (caprolactam) effected by the increase in oil prices.

Revenues from sales of the Econyl® brand accounted for approximately 37% of the total fiber sales in 2017.

Breakdown of sales by geographical area

The breakdown of sales by geographical area was largely unchanged compared to the previous year. In terms of composition, the area Europe (ex. Italy), Middle East and Africa accounted for 49.0% of total sales, North America for 16.0%, and Asia and Oceania for 12.8%.

Sales on the Italian market are primarily attributed to the Polymers' product line and that of NTF (Nylon Textile Filaments, primarily intended for the clothing industry) to domestic customers that export most of these products.

Breakdown of sales by line of product

In comparison with 2016, the breakdown of sales by line of product shows an increase in revenues for all product lines. In particular, the BCF and NTF lines grew by approximately 6%, whereas the Polymers line more than doubled its sales compared to the previous year, accounting for approximately 13% of total revenues by the end of 2017 (up from 7% in 2016). BCF and NTF accounted for 69.5% and 17.2% of total revenues, respectively.

Operating Profit and Margins

EBITDA grew by 11.5% from €65.1 million to €72.6 million. The slight decrease in the EBITDA margin (from 13.5% to 13.2%) was due to a merely mathematical effect of the increased revenues and the respective raw material price growth.

Adjusted EBIT grew by 17%, going from €40.3 million to €47.2 million, more than the provisional data stated in Prospectus.

The increase of both indicators was due not only to the higher production volumes, but due to the greater weight of Econyl® products.

Net profit for 2017 amounted to €25.2 million, increasing by 25.3% compared to the previous year (€20.1 million) and slightly improving also compared to the provisional data indicated in the Prospectus (€24.7 million).

Lastly, net financial position declined to €112.1 million compared to €118 million at December 31, 2016 and is also lower than the provisional data expressed in the Prospectus (€122 million as of December 31, 2017), mostly thanks to the better management of the working capital. The comparison to data as of June 30, 2017 (€152,5 million) is of little significance as it perceives the effects deriving from the transactions related to the Business Combination in the second half of 2017 and the dividend payment that occurred in the first half of 2017.

Dividend Proposal

The Board of Directors proposed to the General SHareholder's Meeting the distribution of a dividend equal to €0,24 per share as for ordinary shares and shares of category B, while category C shares for their specific characteristics do not entitle their holders to receive dividends. As for the dividend date, it has been set to May 7, 2018, the record date to May 8, 2018 and the dividend is payable May 9, 2018.

Post Balance Sheet Events

On February 5, 2018, Aquafil entered into a binding agreement to acquire certain tangible and intangible assets related to Invista's nylon 6 business activity in Asia Pacific. Invista is among the world's leading manufacturers of chemical intermediates, polymers and fibers and is a part of the U.S.-based Koch Industries, Inc. Group. The assets to be acquired consist of a part of the business developed by Invista in the Asia Pacific region that generates annual sales of approximately \$50 million and is expected to achieve margins comparable to those recorded by the Aquafil Group at the consolidated level following the merger.

Declaration of the appointed manager

The manager responsible for preparing the company's financial reports, Dr Sergio Calliari, states in accordance with Paragraph 2 of Article 154-bis of the Consolidated Finance Act, that the accounting information contained in this press release corresponds to the company's records, ledgers and accounting entries.

* * *

Founded in 1969, Aquafil is one of the main players, in Italy and worldwide, in the production of Polyamide 6 (Nylon 6). The Group is present in eight countries and three continents, with a workforce of over 2,700 in over 15 production plants in Italy, Germany, Scotland, Slovenia, Croatia, United States, 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

Karim Tonelli investor.relations@aquafil.com mob: +39 348 6022.950

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 Media Contact Barabino & Partners T: +39 02 72.02.35.35 Federico Vercellino f.vercellino@barabino.it mob: +39 331 5745.171

Consolidated Balance sheet

		FY17	PY16
0000	Note
Intanzible Assets	81	7.782	5.639
Tangible Assets	82	153.927	147.324
Firencial Assets	яs	408	2.017
of which related parties		79	79
Investments Measured at Equity	84		1.100
Deferred Tax Assets	85	11.356	8.924
Total Non-Current Assets		173.472	165,004
Inventories	86	153.499	151.999
Trade Receivable	87	34.870	34.735
of which related parties		116	з
Fire noial Current Assets	83	988	38.509
of which related parties			37.492
Quirent Tax Receivables	8.8	524	428
Other Current Assets	89	12.517	9.947
of which related parties		1.688
Cash and Cash Equivalents	8.10	99.024	80.545
Total Current Assets		301.422	316.163
Total Current Assets		474.895	481167
Share Capital	8.11	49.673	19.686
Reserves	811	54.772	76.229
Group Net Profit for the year	8.11	20.569	19.700
Group Shareholders Equity		125,014	115615
Net Equity attributable to minority interest	8.11	386	286
Net Profit for the year attributable to minority interest	8.11	99	100
Total Sharholders Equity		125,499	116001
Employee Benefits	8.12	5.876	6.549
Non-Current Financial Liabilities	8.13	159.973	187.471
of which related parties
Provisions for Risks and Charges	8.14	1.516	1.572
Deferred Tax Liabilities	85	3.533	5.345
Other Payables	8.15	7.858	9.461
Total Non-Current Liabilities		178,755	210398
Qurrent Financial Liabilities	8.13	52.111	49.622
Qurrent Tax Payables	8.17	5.134	٥
Trade Payables	8.16	94.477	84.994
of which related parties		716	882
Other liabilities	8.15	18.919	20.152
of which related parties		457	2.904
Total Current Liabilities		170.641	154,768
Total Equity and Liabilities		474.895	481167

Consolidated income statement

	Note	FY17	of which	FY16	of which
€/000			norecurrent		no recurrent
Revenue	9.1	549.331	(0)	481.996	ο
of which related parties		297		881
Other Revenue	9.2	260	260	339	339
Total Revenue and Other Revenue		549.591	260	482.335	339
Raw Material	9.3	289.169)	(1.131)	(240.616)	(1.626)
of which related parties		(0)
Services	9.4	94.096)	(2.840)	87.445)	(425)
of which related parties		(3.668)		(2.493)
Personel	9.5	101.304)	(1.975)	93.799)	(440)
of which related parties		(797)		(929)
Other Operating Costs	9.6	(2.575)	(102)	(2.145)	(204)
of which related parties		(70)
Depreciation and Amorti zation	9.7	24.229)		24.071)
Provils ions and Write-downs	9.8	(1.103)		(718)
Capitalization of Internal Construction Costs	9.9	533		874
EBIT		37.647	(5.788)	34.415	(2.356)
Income (loss) from Investments	9.10	50		1.167
Other Financial Income	9.11	219		718
of which related parties		144		450
Interest Expenses	9.12	(6.276)		(7.067)
of which related parties
FX Gains and Losses	9.13	4,800)		220
Profit Before Taxes		26.841		27.119
Income Taxes	9.14	(1.625)	2.721	6.990)
Net Profit (Including Portion Attr. to Minority)		25.216	(3.067)	20.129	(2.356)
Net Profit Attributable to Minority Interest		99		106
Net Profit Attributable to the Group		25.117		20.023
Result for shares	9.15	0.55		0.44

Consolidated cash flow statement

	FY17	FY16
€/000
Operation Activities
Net Profit (Including Portion Attr. to Minority)	25.216	20.129
of which related parties	(4.094)	(2.081)
Income Taxes	1.625	6.990
Income (loss) from Investments	(50)	1.167
Other Financial Income	(219)	(718)
of which related parties	(144)	(460)
Interest Expenses	6.276	7.067
FX Gains and Losses	4.800	(220)
Gain/Loss on non - current asset Disposals	86	22
Amortisation & Depreciation	1.103	718
Write-downs & Write-backs of intangible and tangible assets	24.229	24.071
Cash Flow from Operating Activities Before Changes in NWC	63.064	59.226
Change in Inventories	(1.500)	749
Change in Trade and Other Receivables	9.483	4.681
of which related parties	(166)	444
Change in Trade and Other Payables	(695)	(4.559)
of which related parties	(113)	4
Change in Other Assets/Liabilities	(7.967)	7.395
of which related parties	(4.135)	(5.060)
Net Interest Expenses paid	(5.886)	(6.335)
Income Taxes paid	(5.212)	(8.890)
Change in Provisions for Risks and Charges	(1.547)	(340)
Cash Flow from Operating Activities (A)	49.740	51.927
Attività di investimento
Investment in Tangible Assets	(34.356)	(28.724)
Divestment in Tangible Assets	1.839	1.066
Investment in Intangible Assets	(4.720)	(1.899)
Divestment in Intangible Assets	198	o
Investment in Financial Assets	0	(752)
Divestment in Financial Assets	2.710
Disinvestiment of Aquaspace SpA partecipation		3.883
of which related parties		3.883
Investment in Assets "Tintoria" from Aquaspace SpA		(736)
of which related parties		(736)
Cash Flow used in Investing Activities (B)	34.329	27.162
Financing Activities
Increase in no current Loan and borrowing	65,000	67.200
Decrease in no current Loan and borrowing	(88.119)	(50.520)
Net variation in current fiancial Assets and Liability	(1.864)	(4.040)
of which related parties		15
Dividends Distribution	(13.819)	(3.170)
of which related parties	(13.819)	(3.170)
Cash from Business Combination	41.869
Cash Flow from Financing Activities (C)	3.067	9.470
Net Cash Flow of the Year (A)+(B)+(C)	18.479	34.235
Cash and Cash Equivalents net of Bank Overdrafts at beginning of the year Cash and Cash Equivalents net of Bank Overdrafts at end of the year.	80.545 99.024	46.310 80.545

Consolidated net financial debt

	FY17	FY16
€/000
A. Cash	99.024	80.545
E. Other cash equivalents
C. Securities held-for-trading	٠	۰
D. Liquidity $(A + B + C)$	99.024	80.545
E. Current financial receivables	988	38,509
F. Current bank loans and borrowing	(72)	(521)
G. Current portion of non-current loans and berrowing	(50.199)	(47.257)
H. Other current loans and borrowing	(1.840)	(1.844)
I. Current financial debt ( $F + G + H$ )	(52.111)	49.624)
J. Net current financial debt (I + E+ D)	47,901	69.432
K. Non-current bank loans and borrowing	(91.597)	(116.695)
L. Bonds issued	(53.820)	(54.413)
M. Other non-current loans and borrowing	(14.556)	(16.363)
N. Non-current financial debt $(K + L + M)$	(159.973)	(187.471)
O. Net financial debt (J+N)	(112.071)	(118.041)

Reclassified consolidated income statement

	FY17	FY16
€/000
Net Profit (Including Portion Attr. to Minority)	25.216	20.129
Income Taxes	1.625	6.990
Income (loss) from Investments	(50)	1.167
Amerikation & Depreciation	24 229	24.071
Write-downs & Write-backs of intangible and tangible assets	1.103	718
Financial items (1)	14.670	9.642
No recurring items (**)	(5.788)	(2.357)
EBITDA	72,580	65.074
Amerikation & Depreciation	24.229	24.071
Write-downs & Write-backs of intangible and tangible assets	1.103	718
EBIT Adjusted	47.248	40.285
Revenue	549.331	481.996
EBITDA Margin	13,21%	15,50%
EBIT Adjusted Margin	8.60%	8.36%

(*) Include: (i) financial income for €0,2m and €0,7m respectively in FY17 and in FY16, (ii) Interest expenses for €6,3m and €7,1m respectively in FY17 and in FY16, (iii) cash discount for €3,8m and €3,5m respectively in FY17 and in FY16 and (iv) FX Gain for €3,4m and €0,2m respectively in FY17 and in FY16 and FX Losses for €8,2m in FY2017.

(**) Include (i) cost of listing for €2,3m in FY17, (ii) staff restructuring cost for €1,6m and €0,3m respectively in FY17 and in FY16 and (iii) no recurring items related with the Group expansion and other no recurring costs for €1,6 and €1,8m respectively in FY17 and in FY16 and and (iv) other no recurring cost and revenues for €0,3m and €0,2m respectively in FY17 and in FY16.

Aquafil S.p.A. - Balance sheet

		FY17	FY16
6/000	Note
Intangible Assets	81	6.085	٠
Tangible Assets	87	31.050
Firencial Assets	83	212.679
of which related parties		32.834
Deferred Tax Assets	8.4	5.739
Total Non-Current Assets		255.553	۰
Inventories	85	44.036
Trade Receivable	86	94,100
of which related parties		79.085
Firencial Current Assets	83	9.150
of which related parties		9.150
Current Tax Receivables	87	339
Other Current Assets	88	8,615
of which related parties		2.641
Cash and Cash Equivalents	89	59.475	50
Total Current Assets		215,715	50
Total Current Assets		471 267	50
Share Capital	8.10	49.673	50
Reserves	8.10	71.223	з
Group Net Profit for the year	$8.10 -$	2,689	18
Total Sharholders Equity		118.207	29
Employee Benefits	8.11	2.819
Non-Current Financial Liabilities	8.12	157.250
of which related parties		4882
Provisions for Risks and Charges	8.13	535
Deferred Tax Liabilities	84	564
Other Payables	8.14	7.857
Total Non-Current Liabilities		169.025	٠
Current Financial Liabilities	8.12	48.798
Current Tax Payables	8.16	4.244
Trade Payables	8.15	119.539	21
of which related parties		61.100
Other Liabilities	8.14	11.455	٠
Total Current Liabilities	0	184.036	21
Total Equity and Liabilities	O	471.267	50

Aquafil S.p.A. - Income statement

	Note	FY17	of which	FY16	of which
€/000			norecurrent		no recurrent
Revenue	91	37.765
of which related parties		20.850
Total Revenue and Other Revenue		37.765
Row Material	9.2	30.910)
of which related parties		(20.310)
Services	93	5.893)	(2926)
of which related parties		(307)
Rensonal	94	2.830
Other Operating Costs	9.5	(149)	(33)	(18)
of which related parties		(0)
Depredation and Amorti zation	9.6	(1.006)
Provi sions and Write-downs	9.7	18
EBIT		(3.005)	(2.959)	(18)
Income (loss) from Investments	9.8	(3490)
Other Financial Income	99	637
of which related parties		150
Interest Expenses	9.10	(386)
of which related parties		5) ι
FX Gains and Losses	9.11	332)
Profit Before Taxes		(6.777)	2.959)	(18)
Income Taxes	9.12	4.086	2721
Net Profit		(2.690)	(238)	(18)