B&C Speakers

Earnings Release • Nov 16, 2015

Informazione Regolamentata n. 0931-32-2015		Data/Ora Ricezione 16 Novembre 2015 09:26:44	MTA - Star
Societa'	:	B&C SPEAKERS
Identificativo Informazione Regolamentata	:	65876
Nome utilizzatore	:	BCSPEAKERSN01 - Pratesi
Tipologia	:	IRAG 03
Data/Ora Ricezione	:	16 Novembre 2015 09:26:44
Data/Ora Inizio Diffusione presunta	:	16 Novembre 2015 09:41:44
Oggetto	:	report September 30th 2015	B&C Speakers - errata corrige - financial
Testo del comunicato

this press release is the correct one

PRESS RELEASE

B&C Speakers S.p.A.

The Board of Directors approves the Interim Report on Operations at 30 September 2015

• Consolidated revenues of Euro 27.20 million (+13% compared with Euro 24.07 million for the corresponding period in 2014)
• Consolidated EBITDA of Euro 6.46 million (+15.7% compared with Euro 5.58 million for the corresponding period in 2014)
• Group net profit equal to Euro 3.52 million (+6.4% compared with Euro 3.28 million for the corresponding period of 2014);
• Group net financial position of Euro 0.8 million (a positive Euro 2.0 million at year-end 2014)
• The Parent Company's order book was Euro 7.7 million at the end of third quarter period (at 30 September 2014 it was Euro 9.4 million).

Bagno a Ripoli (Fi), 13 November 2015 – The Board of Directors of B&C Speakers S.p.A., one of the foremost international players in the design, manufacture, distribution and marketing of professional electro-acoustic transducers (loudspeakers), approved the Interim Report on Operations of the group for the first nine months of 2015, prepared in accordance with IFRS international accounting standards.

Consolidated Revenues

Consolidated revenues in the first nine months of 2015 amounted to Euro 27.20 million, and grew strongly, by +13%, compared to the same period of 2014 when they amounted to Euro 24.07 million.

The turnover achieved in the period considered represents a new record level in the company's history and testifies the continuation of the growth trend already noted in the first half of the year.

During the period the Group increased its presence on the Asian market (+61% with sales of 7.2 million euro) and achieved an excellent performance on the South American market (+5% with sales of 2 million euro) and the North American market (+5% with sales of 4.2 million euro). Also on the Italian market the results achieved were up compared with the first nine months of 2014 (+8% with sales of 2.6 million euro). Revenues earned on the European market (still the most important market for

the Group) were broadly in line with those achieved in the first nine months of the previous year (-1% on sales of 10.8 million euro).

As at 30 September 2015, the parent company's order book amounted to Euro 7.7 million, while at the end of the third quarter of 2014 the figure was Euro 9.4 million. The decrease of the order backlog is mainly due to the significant volume of sales made during the period which brought delivery times to the customer more into line.

Cost of Sales

This category includes raw materials (purchasing, processing by third parties and changes in inventories), the cost of personnel directly involved in the production process, transport costs and the costs for commissions payable, customs duties and other direct costs of lesser importance.

During the first nine months of 2015 The proportion of the cost of sales to revenues increased slightly compared to the same period of 2014, rising from 57.36% to 58.42%. This change was due essentially to (i) a slight increase in the costs of purchases of components made in the dollar area and (ii) direct labour costs which increased slightly more than the growth in revenues. The other components of selling costs (transport costs, commissions, transportation and other costs) have substantially maintained the same proportion of revenues.

Indirect personnel

This category refers to costs for staff, executives and workers not directly associated with the production process.

Over the first nine months of 2015 indirect personnel costs increased broadly in line with the increase in turnover, slightly increasing their proportion of revenues (5% in the first nine months of 2015 against 4.7% in the same period last year).

Commercial expenses

This category refers to costs for commercial consultancy, advertising and marketing, travel and subsistence and other minor charges relating to the commercial sector. Commercial expenses showed no significant changes compared to the first nine months of the previous year. Therefore their proportion of revenues decreased slightly, from 3.1% in the first nine months of 2014 to 2.7% in the first nine months of 2015.

Administrative and General

This category refers to the costs for maintenance and utilities, provision of services not directly linked to the production process, purchases of goods not directly associated with the production process, remuneration for directors, professionals, consultants and supervisory bodies, property rent, hire costs and other indirect costs of lesser importance.

General and administrative costs showed no significant changes compared to the first nine months of the previous year. Therefore their proportion of revenues positively decreased from 11.9% in the first nine months of 2014 to 10.4% in the first nine months of 2015.

EBITDA and EBITDA margin

As a result of the trends illustrated above, EBITDA of the first nine months of 2015 amounted to 6.46 million euro, with an increase of 15.73% compared with the same period of 2014 (in which EBITDA amounted to 5.58 million euro).

The EBITDA margin for the first nine months of 2015 was then equal to 23.76% of revenues, and represented 23.20% thereof during the same period in 2014; this increase is mainly due to higher manufacturing volumes.

EBIT and EBIT margin

EBIT at 30 September 2015 amounted to 5.87 million euro, an increase of 19.21% compared with the same period of 2014 (when the figure was 4.92 million euro). The EBIT margin was 21.57% of revenues (20.44% in the same period of 2014).

Group Net Result and Net Financial Position

The Group's net profit at the end of the first three quarters of 2015 amounted to Euro 3.52 million and represents 13% of consolidated revenues (also up, by 7.4%, compared with the Euro 3.28 million of the corresponding period of 2014).

The Group's financial stability remains very strong, coming out, even after the investments in working capital made to support the growth of production, at (a negative) Euro 0.8 million.

The Group's reclassified Income Statement for the first nine months of 2015 is shown in the table below

Economic trends - Group B&C Speakers

(€ thousands)	III Quarter	Incidence		Incidence
	2015 YTD		2014 YTD
Revenues	27,200	100.00%	24,074	100.0%
Cost of sales	(15,890)	-58.42%	(13,808)	-57.4%
Gross margin	11,310	41.58%	10,266	42.6%
Other revenues	85	0.31%	68	0.3%
Cost of indirect labour	(1,361)	-5.00%	(1,144)	-4.8%
Commercial expenses	(733)	-2.70%	(728)	-3.0%
General and administrative expenses	(2,838)	-10.43%	(2,878)	-12.0%
Ebitda	6,463	23.76%	5,584	23.2%
Depreciation of tangible assets	(543)	-2.00%	(550)	-2.3%
Amortization of intangible assets	(53)	-0.19%	(83)	-0.3%
Writedowns	0	0.00%	(30)	-0.1%
Earning before interest and taxes (Ebit)	5,867	21.57%	4,921	20.4%
Financial costs	(599)	-2.20%	(205)	-0.9%
Financial income	340	1.25%	288	1.2%
Earning before taxes (Ebt)	5,608	20.62%	5,004	20.8%
Income taxes	(2,083)	-7.66%	(1,723)	-7.2%
Profit for the year	3,524	12.96%	3,280	13.6%
Minority interest	0	0.00%	0	0.0%
Group Net Result	3,524	12.96%	3,280	13.6%
Other comprehensive result	(17)	-0.06%	(96)	-0.4%
Total Comprehensive result	3,508	12.90%	3,184	13.2%

It should be noted that the Group management decided to adopt, beginning with this interim report, an arrangement for the Statement of Comprehensive Income with classification by destination rather than by nature. Therefore, starting from 30 September 2015, the statement of comprehensive income shows a different classification of costs together with the identification of intermediate results in terms of EBITDA, EBIT, EBT and net profit. This approach was adopted with the double aim of (i) aligning the periodic financial disclosure with management reporting used internally by management for decision-making and control purposes and (ii) improving the readability and effectiveness of information in annual and interim reporting towards third parties.

The statement of comprehensive income for the first nine months of 2014 was consequently also reclassified to allow a uniform comparison of magnitudes and economic results. It should be noted that, following the reclassification of costs by destination, EBITDA and EBIT restated in the first nine months of 2014 increased by 23 thousand euro, related to bank charge costs classified in financial charges rather than General and administrative costs.

Significant events during the first nine months of 2015

During the first nine months of 2015, the following significant events, in addition to what already communicated, occurred:

• The collection of new orders was again good and growing compared with the same period of 2014. Orders received by the parent company B&C Speakers S.p.A. during the first nine months of 2015 amounted to Euro 26.7 million (Euro 25.49 million in the first nine months of 2014). The Group management believes that the increasing recovery in order flows is an important indicator of future growth and stability;

• The bullet loan of 5.0 million at 12 months granted by Banca Intesa – CRF was converted into a 4-year loan at fixed rate, with repayment by monthly instalments; the difference was covered by the company's liquidity.

Significant events occurring after 30 September 2015

After the end of the third quarter of 2015 and up to the date of preparation of the Consolidated Interim Report, a significant flow of orders was received by the parent company. The cash flow was considerable in the period and this made it possible to have, already at the end of October, a positive net financial position.

Outlook for the entire year 2015

As regards developments in the entire year 2015, the management of the Parent Company believes that, given the dynamic demand and the production capacity, it is possible to foresee a year-end with revenue volumes significantly up compared with the previous one.

The Brazilian subsidiary achieved results well below expectations owing to the country's continually deteriorating political and economic situation. The Group's management is committed to careful monitoring of both the general economic situation of Brazil and the specific situation of the subsidiary so as to identify in good time signs of impairment.

The Financial Reporting Manager of B&C Speakers S.p.A., Francesco Spapperi, hereby certifies, pursuant to Art. 154-bis, paragraph 2 of Italian Legislative Decree No. 58/1998, that the accounting disclosures presented in this press release are consistent with company's accounting documents, books and records.

In accordance with the Regulation approved with CONSOB Resolution 11971/1999, as subsequently amended, we can note that Consolidated Interim Financial Report at 30 June 2015, is available to anyone who requests it at the company's Registered Office and at the "BIT MARKET di Borsa Italiana S.p.A." storage site. The said documentation can also be consulted on the company's website http://www.bcspeakers.com/investors/it/dati-finanziari/ in the Investor Center section.

B&C Speakers S.p.A.

B&C Speakers S.p.A. is an international leader in the design, production, distribution and marketing of professional electro-acoustic transducers (the main components in acoustic speakers for music, commonly referred to as loudspeakers), supplied mainly to professional audio system manufacturers (OEM). With 120 employees and approximately 10% of staff assigned to its Research and Development Department, B&C Speakers carries out all design, production, marketing and control activities at its headquarters in Florence. Most of its products are developed according to its key customers' specifications. B&C Speakers also operates in the US and Brazil through two subsidiaries carrying out commercial activities.

B&C Speakers S.p.A.

Simone Pratesi (Investor Relator), Tel.: +39 055/65721 Email: spratesi@bcspeakers.com

Consolidated Statement of Financial Position at 30 September 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Values in Euro)		30 September 2015	31 December 2014
ASSETS
Fixed assets
Tangible assets		3,164,698	3,402,208
Goodwill		1,393,789	1,393,789
Other intangible assets		99,208	136,249
Deferred tax assets		272,551	325,052
Other non current assets		152,577	219,334
	related parties	88,950	88,950
Other assets (TFM insurance)		303,405	254,012
Total non current assets		5,386,228	5,730,644
Currents assets
Inventory		10,061,966	8,018,696
Trade receivables		8,044,311	6,828,276
Tax assets		573,210	1,069,532
Other current assets		4,212,890	5,265,368
Cash and cash equivalents		451,607	4,082,370
Total current assets		23,343,984	25,264,242
Total assets		28,730,212	30,994,886
		30 September	31 December
		2015	2014
LIABILITIES
Equity
Share capital		1,074,850	1,086,030
Other reserves		3,541,839	4,201,715
Retained Earnings		8,866,109	7,926,561
Fair value reserve		(159,596)	(136,836)
Profit/(loss) for the year		3,507,579	4,355,103
Total equity attributable to shareholders of the parent		16,830,781	17,432,573
Minority interest		-	-
Total equity		16,830,781	17,432,573
Non current equity
Long-term borrowings		3,211,004	358,331
Severance Indemnities		647,843	641,535
Provisions for risk and charges		82,596	82,596
Deferred tax liabilities		43,533	43,533
Total non current liabilities		3,984,976	1,125,995
Current liabilities
Short-term borrowings		2,050,648	6,686,669
Trade liabilities		3,269,345	4,391,910
	related parties	8,707	13,896
Tax liabilities		1,583,348	548,453
Other current liabilities		1,011,114	809,286
Total current liabilities		7,914,455	12,436,318
Total Liabilities		28,730,212	30,994,886

Consolidated Statement of Comprehensive Income for the first nine months of 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME		III Quarter	III Quarter
(Values in Euro)		2015 YTD	2014 YTD
Revenues		27,199,582	24,073,814
Cost of sales		(15,889,915)	(13,807,548)
Gross Margin		11,309,667	10,266,266
Other revenues		84,970	68,292
Cost of indirect labour		(1,361,332)	(1,144,283)
Commercial expenses		(733,210)	(728,364)
General and administrative expenses		(2,837,585)	(2,877,756)
	related parties	694,938	691,616
Ebitda		6,462,511	5,584,155
Depreciation of tangible assets		(542,971)	(550,032)
Amortization of intangible assets		(52,987)	(82,756)
Writedowns		0	(30,000)
Earning before interest and taxes		5,866,553	4,921,367
Financial costs		(599,045)	(205,322)
Financial income		340,231	287,655
Earning before taxes		5,607,740	5,003,701
Income taxes		(2,083,449)	(1,723,354)
Profit for the year (A)		3,524,291	3,280,348
Other comprehensive income/(losses) for the year that will not be
reclassified in icome statement:
Exchange differences on translating foreign operations		(26,262)	(75,162)
Actuarial gain/(losses) on DBO (net of tax)		9,550	(20,841)
Total other comprehensive income/(losses) for the year (B)		(16,712)	(96,004)
Total comprehensive income (A) + (B)		3,507,579	3,184,344
Profit attributable to:
Owners of the parent		3,524,291	3,280,348
Minority interest		-	-
Total comprehensive income atributable to:
Owners of the parent		3,507,579	3,184,344
Minority interest		-	-