Informazione Regolamentata n. 1938-41-2019		Data/Ora Ricezione 26 Agosto 2019 16:51:01
Societa'	:	Aquafil S.P.A.
Identificativo Informazione Regolamentata	:	122044
Nome utilizzatore	:	AQUAFILNSS02 - Tonelli
Tipologia	:	1.2
Data/Ora Ricezione	:	26 Agosto 2019 16:51:01
Data/Ora Inizio Diffusione presunta	:	26 Agosto 2019 16:51:02
Oggetto	:	Results for the First Half of 2019
Testo del comunicato

Vedi allegato.

RESULTS AS AT JUNE 30, 2019

ONGOING GROWTH OF ECONYL® REVENUES, UP 4.5%

US-BASED O'MARA Inc. ACQUIRED ON MAY 31, 2019

Revenues at June 30, 2019: €286.7 million (-1.6% compared to H1 2018);
EBITDA: €39.1 million; (-13.1% compared to H1 2018);
Adjusted EBIT: €22.3 million (-30.0% compared to H1 2018);
Net profit: €10.7 million (-45.7% compared to H1 2018);
Net financial position: €263.7 million, including the effect of the adoption of IFRS16 and the acquisition of O'Mara Incorporated (excluding the effect of the adoption of IFRS16 and the consideration for the acquisition of O'Mara Incorporated, €197,2 million vs €157.3 million at December 31, 2018).

Arco, August 26, 2019 — The Board of Directors of Aquafil S.p.A. [ECNL:IM] approved today the Company's operating and financial results at June 30, 2019.

Giulio Bonazzi, Chairman and Chief Executive Officer, stated:

"In May we finalized the acquisition of the US company O'Mara Incorporated, which marks the beginning of the globalisation process of the textiles business. We think the presence on the US market of our manufacturing unit will foster the development of ECONYL® and DRYARN® products as well.

The first month of operations already showed very interesting margins.

The revenues generated by the sale of ECONYL® branded products grew also in this six-month period, testifying to the ongoing market's interest in a circular economy. Amongst the various collaborations underway, during the six-month period Prada, Burberry and Napapijri launched their collections prominently advertising the use of the ECONYL® ingredient in their products. Particularly, Prada announced its intention to use only ECONYL® branded nylon by 2021.

Regarding our European presence, it continues to be a rather weak outlet market, as a result of the economic cycle trend. Asia and Oceania showed signs of weakness during the second quarter due to the world trade slowdown and the tariff war. By contrast, North America continues to grow, albeit with still modest margins, due to shipping costs and duties resulting from the support by European productions. During the second half of the year, the start of operations of the new production plants in the US will also lead to a margins' recovery and a significant working capital improvement.

The development of the production technology of the Aquafil Carpet Recycling in Phoenix took longer than expected, however, thanks to the latest technical solutions adopted we expect to achieve full operation in Q4 2019."

Main economic indicators - Aquafil Group

Revenues

Revenues amounted to €286.7 million in H1 2019, of which €141.5 million in Q2 2019, with a 1.6% and 5.6% decrease compared to the same periods of the previous year, respectively.

On a like-for-like consolidation basis, thus excluding the acquisition of O'Mara Incorporated occurred on May 31, 2019, the decline in revenues would have been by 2.6% and 8.0% compared to the same periods of the previous year.

Revenues from sales of ECONYL® branded products increased by 4.5% and 1.1% at June 30, 2019 and in Q2 2019, compared to the same periods of the previous years, accounting for 37.3% of total fiber sales.

Sales in percentage terms by Product Line in H1 and Q2 2019 were as follows:

Sales by Product Line compared to the same periods of the previous year were as follows:

Revenues (€/mil) by Product Line	H119	H118	Δ	Δ %	Q219	Q218	Δ	Δ %
BCF (fiber for carpet)	210,4	210,3	0,2	0,1%	104,0	113,1	(9,1)	-8,1%
NTF (fiber for fabrics)	53,4	50,6	2,7	5,4%	26,2	24,2	2,0	8,4%
Polymers	22,9	30,4	(7,5)	-24,7%	11,3	13,2	(1,8)	-14,0%
TOTAL	286,7	291,3	(4,6)	-1,6%	141,5	150,4	(8,9)	-5,9%

The comparison shows that:

(a) revenues from the BCF Product Line (yarn for carpets) were nearly unchanged in H1 2019, whereas they decreased by 8.1% in Q2 2019. Said results are partially attributable to the lower revenues generated by Aquafil Engineering GmbH, a company providing chemical industrial plant engineering, compared to the same periods of the previous year. Excluding this effect, revenues would have increased by 2.5% in H1 2019 and would have declined by 5.1% in Q2 2019. These changes were mainly due to:
- i. increased revenues in North America, where the Group further benefited from the withdrawal of some types of products by a primary competitor;
- ii. a decline in revenues in EMEA, with a marked slowdown in the end market, as a consequence of the economic cycle underway;
- iii. a decline in revenues in Asia and Oceania in Q2 2019 following the emergence of signs of weakness in the end market due to the world trade slowdown and the tariff war;
(b) revenues from the NTF Product Line (yarn for garments) increased by 5.4% in H1 2019 and 8.4% in Q2 2019. On a like-for-like consolidation basis, thus excluding the acquisition of O'Mara Incorporated occurred on May 31, 2019, the decline in revenues would have been by 0.8% in H1 2019 and 4.5% in Q2 2019, due to lower sales generated in EMEA;
(c) revenues from the Polymers Product Line decreased by 24.7% in H1 2019 and by 14.0% in Q2 2019, both due to the decision to allocate the internally manufactured polymers to fiber production and the lower sales generated in EMEA and North America.

Sales in percentage terms by Geographical Area in H1 and Q2 2019 were as follows:

Sales by Geographical Area compared to the same periods of the previous year were as follows:

Revenues (€/mil) by Geographical Area	H119	H118	Δ	Δ %	Q219	Q218	Δ	Δ %
EMEA	176,5	194,8	(18,3)	-9,4%	85,3	94,0	(8,7)	-9,2%
North America	62,0	48,0	14,0	29,2%	31,3	25,7	5,6	21,6%
Asia Oceania	47,6	48,3	(0,7)	-1,5%	24,4	30,6	(6,1)	-20,1%
RoW	0,5	0,2	0,3	165,1%	0,3	0,2	0,1	70,9%
TOTAL	286,7	291,3	(4,6)	-1,6%	141,3	150,5	(9,2)	-6,1%

From the comparison it is evident that:

(a) revenues generated in EMEA declined by 9.4% in H1 2019 and by 9.2% in Q2 2019, due to the lower sales by all Group's Product Lines as a result of the economic cycle currently underway;
(b) revenues generated in North America grew by 29.2% in H1 2019 and by 21.6% in Q2 2019. On a like-for-like consolidation basis, thus excluding the acquisition of O'Mara Incorporated occurred on May 31, 2019, the increase would have been by 22.7% in H1 2019 and 9.5% in Q2 2019. The increases on a like-for-like consolidation basis are almost exclusively attributable to the higher sales from the BCF Product Line;
(c) revenues generated in Asia and Oceania decreased by 1.5% in H1 2019 and by 20.1% in Q2 2019. Said decreases are partially attributable to the lower revenues generated by Aquafil Engineering GmbH, a company providing chemical industrial plant engineering, compared to the same periods of the previous year. Excluding this effect, revenues would have increased by 10.3% in H1 2019 and would have declined by 9.9% in Q2 2019. Said differences were attributable to revenues of the BCF Product Line which rose during H1 2019, also due to the acquisition of Invista's assets, while declining in Q2 2019 following the emergence of signs of weakness of the end market due to the world trade slowdown and the tariff war.

EBITDA amounted to €39.1 million in H1 2019, of which €20.0 million in Q2 2019, with a decline by 13.1% and by 11.9% compared to the same periods of the previous year. Excluding the effect of IFRS16 and the acquisition of the company O'Mara Incorporated, EBITDA for H1 2019 would have been €35.0 million, of which €17.4 million in Q2 2019, with a decrease by 28.4% and by 30.2% compared to the same periods of the previous year.

The EBITDA decline in the reporting period was mainly attributable to:

a) the higher production costs, amounting to approximately €3 million, of ECONYL® caprolactam after Aquafil's Carpet Recycling #1 (ACR#1) plants, dedicated to the recovery of carpets that have reached the end of their useful life, started to operate;
b) the higher shipping costs and costs for import duties, for approximately €2.5 million, arising from productions made in Europe so as to temporarily meet the demand increase on the North American market until the completion of the works for expanding the production capacity on site, expected for the fourth quarter of 2019;
c) the impact, for approximately €2.0 million, of demand slowdown in EMEA, with the ensuing lower use of production plants and the lower absorption of fixed costs for the period.

EBITDA Margin was 13.6% in H1 2019 and 14.1% in Q2 2019. Excluding the effect of IFRS16 and the acquisition of the company O'Mara Incorporated, EBITDA margin would have been 12.3% in H1 2019 and 12.6% in Q2 2019, compared to 15.4% and 15.1% of the same periods of the previous year.

Amortisation, depreciation and write-downs amounted to €16.8 million in H1 2019, of which €8.7 million in Q2 2019, with an increase by €3.7 million and €2.0 million compared to the same periods of the previous year.

This change is mostly attributable to the effects of the application of IFRS16.

Adjusted EBIT amounted to €22.3 million in H1 2019, of which €11.2 million in Q2 2019, with a decline by 30.0% and 29.4% compared to the same periods of the previous year.

EBIT amounted to €17.1 million in H1 2019, of which €8.1 million in Q2 2019, with a decline by 37.7% and 28% compared to the same periods of the previous year.

Net interest expenses amounted to €2.6 million in H1 2019, of which €2.1 million in Q2 2019. Excluding the contribution of a €1.1 million non-recurring income, this item increased by €0.7 million and €0.5 million compared to the same periods of the previous year. This change is entirely attributable to the increase of financial debt.

FX gains and losses: FX losses amounted to €0.2 million in H1 2019 and €1.2 million in Q2 2019, with an increase by €0.7 million and €2.4 million compared to the same periods of the previous year.

Income taxes amounted to €3.6 million in H1 2019, of which €1.8 million in Q2 2019, with a decrease by €1.8 million and €1.0 million compared to the same periods of the previous year. The tax rate, calculated as the ratio of income taxes to the profit before taxes, amounted to 25.4% in H1 2019 and 37.3% in Q2 2019, increasing compared to 21.7% and 22.4% for the same periods of the previous year, respectively.

The change, totally for Q2 2019, was chiefly attributable to a "non-recurring" effect on deferred taxes, as well as to greater provisions for the regional production tax (IRAP) due to a possible transition to another IRAP regime by the Parent company Aquafil S.p.A.

Net profit amounted to €10.7 million in H1 2019, of which €3.0 million in Q2 2019 with a decline by 45.7% and 69.7% compared to the same periods of the previous year.

Main capital and financial indicators - Aquafil Group

Investments for the reporting period amounted to €32.6 million, excluding the effect of the application of IFRS16 and the acquisition of O'Mara Incorporated.

They are chiefly a consequence of: (a) increasing the production capacity of ECONYL® regenerated caprolactam, also through the construction of the two Carpet Recycling plants in Phoenix and Sacramento, (b) expanding the production capacity in the United States, (c) projects to improve the production and industrial efficiency, and (d) interventions to technologically upgrade the existing plants.

The change of Net working capital for the period was €22.8 million, excluding the effect of the acquisition of O'Mara Incorporated.

This change was partially due to the customary increase in receivables from customers for higher revenues generated in Q2 2019 compared to Q4 2018.

However, it was mainly attributable to the North American business which, on the one hand seized occasional opportunities to purchase raw material at interesting prices, and on the other was impacted by the logistical inefficiency due to European productions supporting the increase of the North-American demand.

Net financial position amounted to €263.5 million at June 30, 2019.

Excluding the effect of the adoption of IFRS16 (€29.7 million) and the consideration for the acquisition of O'Mara Incorporated (€36.6 million), Net Financial Position would have been €197.2 million compared to €157.3 million at December 31, 2018, with an increase of €39.9 million.

This increase is mainly attributable to the following cash flows (in euro million):

(a) +33.8 from operation activities;
(b) 32.6 from investments;
(c) 22.8 from change in net working capital;
(d) 12.3 from dividend payment;
(e) 2.4 from interest and taxes paid.

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 1969, Aquafil is one of the main players, in Italy and worldwide, in the production of Polyamide 6 (nylon 6). The Aquafil Group operates in eight countries of three different continents, with over 2,700 employees at the 17 production plants located in Italy, Germany, Scotland, Slovenia, Croatia, Unites States, Thailand and China. For further details: 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 [email protected] mob: +39 348 6022.950

Barabino & Partners IR T: +39 02 72.02.35.35 Stefania Bassi [email protected] mob: +39 335 6282.667 Agota Dozsa [email protected] mob: +39 338 7424.061 Media Contact Barabino & Partners T: +39 02 72.02.35.35 Federico Vercellino [email protected] mob: +39 331 5745.171

Appendix 1 - EBITDA e Adjusted Operating Results

RECONCILIATION FROM NET PROFIT TO EBITDA €/000	Half Year 2019	Half Year 2018	Second Quarter 2019	Second Quarter 2018
Net Profit (Including Portion Attr. to Minority )	10.654	19.614	2.958	9.764
Income Taxes	3.637	5.424	1.757	2.827
Amortisation & Depreciation	16.574	12.364	8.536	6.292
Write-downs & Write-backs of intangible and tangible assets	224	769	189	469
Financial items (*)	4.586	4.455	4.207	1.362
No recurring items (**)	3.396	2.312	2.310	1.946
EBITDA	39.070	44.938	19.957	22.659
Revenue	286.667	291.291	141.339	150.484
EBITDA Margin	13,6%	15,4%	14,1%	15,1%

RECONCILIATION FROM EBITDA TO EBIT ADJUSTED €/000	Half Year 2019	Half Year 2018	Second Quarter 2019	Second Quarter 2018
EBITDA	39.070	44.938	19.957	22.659
Amortisation & Depreciation	16.574	12.364	8.536	6.292
Write-downs & Write-backs of intangible and tangible assets	224	769	189	469
EBIT Adjusted	22.273	31.805	11.232	15.899
Revenue	286.667	291.291	141.339	150.484
EBIT Adjusted Margin	7,8%	10,9%	7,9%	10,6%

(*) The financial items include: (i) non-recurring financial income of Euro 1.1 million in the period ending June 30, 2019 (ii) financial charges of Euro 3.7 million and Euro 3.0 million respectively in the periods ending June 30, 2019 and June 30, 2018, (iii) cash discounts of Euro 1.7 million end Euro 2.0 million respectively in the periods ending June 30, 2019 and June 30, 2018, and (iv) exchange losses of Euro 0.2 million and exchange gains of Euro 0.5 million respectively in the periods ending June 30, 2019 and June 30, 2018.

(**) This includes (i) non-recurring charges related to the expansion of the Aquafil Group and other corporate transactions for Euro 2.3 million and 1,6 million respectively in the periods ending June 30, 2019 and June 30, 2018, (ii) non-recurring industrial charghes of Euro 0.6 million for the period ending June 30, 2019, (iii) costs for restructuring and the regularisation of expatriated personnel for Euro 0.1 million and Euro 0.4 million respectively in the periods ending June 30, 2019 and June 30, 2018 and (iv) other non-recurring charges of Euro 0.4 million and Euro 0.3 million respectively in the periods ending June 30, 2019 and June 30, 2018.

Appendix 2 – Consolidated Balance Sheet

CONSOLIDATED BALANCE SHEET	At June 30,	At December 31,
€/000	2019	2018
Intangible Assets	17.138	15.992
Goodwill	14.040	-
Tangible Assets	252.001	189.661
Financial Assets	750	404
of which related parties	312	79
Other Assets	2.191	2.189
Deferred Tax Assets	6.802	7.841
Total Non-Current Assets	292.922	216.087
Inventories	193.726	189.678
Trade Receivable	42.973	34.046
of which related parties	30	66
Financial Current Assets	1.525	2.878
Current Tax Receivables	1.139	451
Other Current Assets	14.119	14.297
of which related parties	1.644	1.859
Cash and Cash Equivalents	89.032	103.277
Total Current Assets	342.514	344.627
Total Current Assets	635.436	560.714
Share Capital	49.722	49.722
Reserves	81.814	62.969
Group Net Profit for the year	10.981	31.119
Group Shareholders Equity	142.518	143.810
Net Equity attributable to minority interest	1	1
Net Profit for the year attributable to minority interest	-	0
Total Sharholders Equity	142.519	143.811
Employee Benefits	5.713	5.702
Non-Current Financial Liabilities	296.618	224.345
of which related parties	13.495	-
Provisions for Risks and Charges	1.305	1.169
Deferred Tax Liabilities	5.014	3.582
Other Payables	13.599	11.833
Total Non-Current Liabilities	322.249	246.631
Current Financial Liabilities	57.467	39.090
of which related parties	4.075	-
Current Tax Payables	1.669	2.270
Trade Payables	89.377	106.895
of which related parties	181	762
Other Liabilities	22.155	22.017
of which related parties	236	230
Total Current Liabilities	170.669	170.272
Total Equity and Liabilities	635.436	560.714

Appendix 3 –Consolidated Income Statement

CONSOLIDATED INCOME STATEMENT	Half Year	of wich non	Half Year	of wich non	Second Quarter	of wich non	Second Quarter	of wich non
€/000	2019	current	2018	current	2019	current	2018	current
Revenue	286.667		291.291		141.339		150.484
of which related parties	29		188		12		47
Other Revenue	1.181	95	594	143	580	20	593	143
Total Revenue and Other Revenue	287.848	95	291.885	143	141.919	20	151.077	143
Raw Material	(148.225)	(119)	(147.995)	(101)	(71.071)	(19)	(77.483)	(99)
Services	(51.191)	(2.340)	(49.420)	(1.584)	(26.410)	(1.537)	(26.052)	(1.381)
of which related parties	(219)		(1.790)		(116)		(897)
Personel	(54.060)	(739)	(52.847)	(658)	(27.348)	(600)	(27.258)	(516)
Other Operating Costs	(1.311)	(293)	(1.047)	(111)	(717)	(174)	(566)	(92)
of which related parties	(38)		(35)		(20)		(17)
Depreciation and Amorti zation	(16.574)		(12.364)		(8.536)		(6.292)
Provi s ions and Write-downs	(224)		(769)		(189)		(469)
Capitalization of Internal Construction Costs	886		81		415		37
EBIT	17.148	(3.396)	27.524	(2.312)	8.063	(2.310)	12.994	(1.946)
Other Financial Income	1.100	1.082	17		9		1
Interest Expenses	(3.717)		(3.027)		(2.156)		(1.651)
of which related parties	(132)				(66)
FX Gains and Losses	(241)		525		(1.202)		1.247
Profit Before Taxes	14.290	(2.314)	25.038	(2.312)	4.714	(2.310)	12.591	(1.946)
Income Taxes	(3.637)		(5.424)		(1.757)		(2.827)
Net Profit (Including Portion Attr. to Minority )	10.654	(2.314)	19.614	(2.312)	2.958	(2.310)	9.764	(1.946)
Net Profit Attributable to Minority Interest	0		-		0		(23)
Net Profit Attributable to the Group	10.654		19.614		2.958		9.787
Basic earnings per share	0,21		0,39		0,06		0,19
Diluted earnings per share	0,21		0,39		0,06		0,19

Appendix 4 –Consolidated Cash Flow Statement

CASH FLOW STATEMENT	At June 30,	At June 30,
€/000	2019	2018
Operation Activities
Net Profit (Including Portion Attr. to Minority )	10.654	19.614
of which related parties	-360	-1.637
Income Taxes	3.637	4.975
Other Financial Income	-1.100	-17
Interest Expenses	3.717	3.027
of which related parties	132	0
FX (Gains) and Losses	241	-525
(Gain)/Loss on non - current asset Disposals	-148	-133
Provisions & write-downs	224	769
Amortisation, depreciation & write-downs	16.572	12.364
Cash Flow from Operating Activities Before Changes in NWC	33.796	40.075
Change in Inventories	1.313	-8.919
Change in Trade and Other Receivables	-19.584	-1.562
of which related parties	-611	0
Change in Trade and Other Payables	-4.966	-19.038
of which related parties	36	-62
Change in Other Assets/Liabilities	402	1.828
of which related parties	681	1.282
Net Interest Expenses paid	-1.593	-2.586
Income Taxes paid	-713	-1.769
Change in Provisions for Risks and Charges	-58	-308
Cash Flow from Operating Activities (A)	8.597	7.721

Investing activities
Investment in Tangible Assets	-30.421	-22.295
Disposal of Tangible Assets	183	860
Investment in Intangible Assets	-2.319	-8.334
Disposal of Intangible Assets	7	13
Investment in Right of Use	-2.976	0
Business Purchases Aquafil O'Mara	-35.618	0
of which Asset	-15.060	0
of which Goodwill	-14.040	0
of which cash	112	0
of which other assets and liabilities	-6.630	0
Disposal of Financial Assets	0	-166
Cash Flow used in Investing Activities (B)	-71.144	-29.923
Financing Activities
Increase in no current Loan and borrowing	73.000	55.000
Decrease in no current Loan and borrowing	-11.320	-28.364
Net variation in current fiancial Assets and Liability	-1.105	744
of which related parties	2.030	0
Dividends Distribution	-12.273	-12.241
of which related parties	-7.316	-7.369
Increase (decrease) Share Capital	0	42
Cash Flow from Financing Activities ( C)	48.301	15.181
Net Cash Flow of the Year (A)+(B)+(C)	-14.245	-7.021

Appendix 5 – Net Financial Debt

NET FINANCIAL DEBT	At June 30,	At December 31,
€/000	2019	2018
A. Cash	89.032	103.277
B. Other cash equivalents	-	-
C. Securities held-for-trading	-	-
D. Liquidity ( A + B + C)	89.032	103.277
E. Current financial receivables	1.525	2.878
F. Current bank loans and borrowing	(132)	(96)
G. Current portion of non-current loans and borrowing	(47.223)	(35.496)
H. Other current loans and borrowing	(10.113)	(3.498)
I. Current financial debt ( F + G + H )	(57.467)	(39.090)
J. Net current financial debt (I + E+ D)	33.090	67.066
K. Non-current bank loans and borrowing	(170.153)	(159.492)
L. Bonds issued	(93.182)	(53.578)
M. Other non-current loans and borrowing	(33.277)	(11.274)
N. Non-current financial debt ( K + L + M )	(296.612)	(224.344)
O. Net financial debt (J+N)	(263.522)	(157.279)

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Aquafil Interim / Quarterly Report 2019

4252_ir_2019-08-26_2ac1b709-c8a3-4b11-8eaf-34074c3fec20.pdf

RESULTS AS AT JUNE 30, 2019

ONGOING GROWTH OF ECONYL® REVENUES, UP 4.5%

US-BASED O'MARA Inc. ACQUIRED ON MAY 31, 2019