B&C Speakers — Earnings Release 2021

Sep 10, 2021

Informazione Regolamentata n. 0931-32-2021		Data/Ora Ricezione 10 Settembre 2021 12:22:54	MTA - Star
Societa'	:	B&C SPEAKERS
Identificativo Informazione Regolamentata	:	151697
Nome utilizzatore	:	BCSPEAKERSN02 - spapperi
Tipologia	:	1.2
Data/Ora Ricezione	:	10 Settembre 2021 12:22:54
Data/Ora Inizio Diffusione presunta	:	10 Settembre 2021 12:22:55
Oggetto	:	B&C Speakers First Half 2021 Press Release
Testo del comunicato

Vedi allegato.

COMUNICATO STAMPA

B&C Speakers S.p.A.:

The Board of Directors approves the Interim Report on Operations as at 30 June 2021

• Consolidated revenues equal to Euro 19.58 million (rising by 15.6% compared to the Euro 16.94 million of the first half of 2020);
• Consolidated EBITDA equal to Euro 3.55 million (up by 23.3% compared to Euro 2.88 million of the first half of 2020);
• Overall Group profit equal to Euro 2.10 million (considerably increased compared to Euro 0.88 million in the first half of 2020);
• Group Net financial position equal to Euro 1.5 million (it was positive and equal to Euro 0.6 million at the end of the 2020 financial year, while at the end of the first half of 2020 it was negative and equal to Euro 3.6 million);

Bagno a Ripoli (prov. Florence), Italy, September 10, 2021 – The Board of Directors of B&C Speakers S.p.A., one of the foremost international players in designing, manufacturing, distributing and marketing professional electro-acoustic transducers, approved the Group's Interim Report for the first six months of 2021 in accordance with International Financial Reporting Standards (IFRS).

The managing director of the B&C Speakers Group, Lorenzo Coppini, commented: the first half of 2021 was characterized by a gradual and significant recovery in demand, as proved by the value of the order book, recently exceeding Euro 20 million. This important restart makes us believe that we can soon return to pre-covid levels, despite the difficulty in supplying semi-finished products and components caused by the international transport crisis and by the tension on raw materials costs.

Revenues

The reference market of the Group showed significant signs of recovery during the first half of 2021, when turnover was equal to Euro 19.6 million, an increase of 15.5% compared to the first half of 2020 (at the end of which it was equal to Euro 16.94 million).

It should be noted that, as confirmation of the recovery trend, the collection of new orders during the half year was extremely significant, increasing the order book (related to the Parent Company) up to the record level of Euro 14.4 million at June 30, 2021 (it was equal to Euro 3.6 million at December 31, 2020).

The increase in the Group's turnover, compared to the first six months of 2020, was mainly focused on the Asian market, the first one to be restarted, which showed an increase of Euro 2.8 million (equal to + 113%) compared to the first half of 2020.

Also noteworthy are the data relating to the turnover achieved in Latin America, whose growth compared to 2020 is mainly guaranteed by the positive performance of the Central American and Mexican distributors.

Below is the complete breakdown by geographical area for the first half of 2021 compared with the same period of 2020 (amounts in Euro):

Geographical Area	1st half 2021	%	1st half 2020	%	Change	Change %
Latin America	1,235,623	6.3%	828,329	4.9%	407,294	49%
Europe	7,035,977	35.9%	7,558,944	44.6%	(522,967)	-7%
Italy	1,474,388	7.5%	1,336,308	7.9%	138,080	10%
North America	4,353,205	22.2%	4,522,205	26.7%	(169,000)	-4%
Middle East & Africa	247,963	1.3%	241,792	1.4%	6,171	3%
Asia & Pacific	5,231,690	26.7%	2,456,902	14.5%	2,774,788	113%
Total	19,578,845	100.0%	16,944,480	100.0%	2,634,365	15.55%

Cost of Sales

The cost of sales during the first six months of 2021 was constant in terms of incidence on revenues compared to the same period of 2020, going from 64.03% to 64.45%; this trend proves that, despite the higher costs for logistics and the higher procurement costs of all categories of raw materials purchased, the Group was able to improve in terms of production efficiency as well as to apply a correct pricing policy.

Other Revenues

The significant increase in other revenues is due to obtaining a non-refundable grant of Euro 320 thousand as part of a loan for internationalization for a total of Euro 800 thousand, provided by SACE-Simest and aimed at supporting companies operating internationally.

Indirect Personnel

The cost for indirect personnel, while showing a slight increase compared to the first six months of 2020, because less use was made of the redundancy fund for work needs, decreased its incidence on turnover from 9.21% to 8.27%. The decrease in the incidence on revenues is due to the increase in production and sales volumes achieved in the half year.

Commercial Expenses

Commercial expenses remain basically unchanged compared to the first half of 2020, since the sector trade shows have not restarted yet and the cost containment policies implemented by the Group's Management are still in place, in addition to the travel restrictions, still partially existing.

Administrative and General

Although general and administrative costs increased by 26.8% compared to the first six months of 2020, they slightly increased their incidence on turnover, which went from 9.13% to 10.02%. The increase in general and administrative costs was affected, for approximately Euro 150 thousand, by non-recurring costs associated with interventions on the personnel structure and costs relating to sanitization, equal to Euro 54 thousand, which became necessary following the spread of the pandemic.

EBITDA and EBITDA Margin

As a result of the dynamics illustrated above, EBITDA for the first six months of 2021 is equal to Euro 3.55 million, with an increase of Euro 0.6 million (+ 23.29%) compared to the same period of 2020.

The EBITDA margin for the first six months of 2021 is equal to 18.14% of revenues (17.00% in the first six months of the previous year).

Depreciation

The depreciation of tangible and intangible fixed assets and rights of use are basically consistent with the first half of the previous year and amounts to Euro 1,006 thousand (Euro 1,105 thousand in the corresponding period of 2020).

EBIT and EBIT margin

BIT for the first six months of 2021 amounts to Euro 2.51 million, an increase of 41.53% compared to the same period of 2020 (when it was equal to Euro 1.77 million). The EBIT margin is equal to 12.84% of revenues (10.48% in the corresponding period of 2020).

Group Net Profit

Group Net Profit
The Group's net profit at the end of the first six months of 2021 amounts to Euro 1.99 million, representing a percentage of 10.19% of consolidated revenues with an overall increase of 92.89% compared to the corresponding period of 2020.
The overall Net Financial Position is (negative and) equal to Euro 1.5 million against a positive value of Euro 0.5 million at the end of 2020. The Net Financial Position has been mainly affected by the distribution of the dividend, which took place in May 2021, equal to Euro 2.9 million.
(in thousands of Euro)
	30 June	31 December
	2021 (a)	2020 (a)	Change %
A. Cash	11,171	13,415	-17%
C. Other current financial assets	10,909	8,044	36%
D. Cash and cash equivalent (A+C)	22,080	21,460	3%
E. Current financial indebtness	(0)	0
F. Current portion of non current borrowings	(9,738)	(7,848)	24%
G. Current borrowingse (E+F)	(9,738)	(7,848)	24%
H. Current net financial indebtness (G+D)	12,342	13,612	-9%
I. Non current financial indebtness	(13,859)	(13,022)	6%
L. Non current financial indebtness	(13,859)	(13,022)	6%
M. Total financial indebteness (H+L)	(1,517)	590	-357%
(a) Informazioni estratte e/o calcolate dal bilancio predisposto in conformità agli IFRS adottati dalla Unione Europea.
Cash generation deriving from operating activities in the half year was positive and equal
to Euro 3.3 million, an increase compared to the corresponding half of 2020, when it was

Cash generation deriving from operating activities in the half year was positive and equal to Euro 3.3 million, an increase compared to the corresponding half of 2020, when it was equal to Euro 2.9 million.

The following chart shows the reclassified Group Income Statement relating to the first half of 2021 compared with the corresponding half of 2020:

Economic trends - Group B&C Speakers

(€ thousands)	1 half 2021	Incidence	1 half 2020	Incidence
Revenues	19,579	100.00%	16,944	100.0%
Cost of sales	(12,619)	-64.45%	(10,849)	-64.0%
Gross margin	6,960	35.55%	6,095	36.0%
Other revenues	432	2.21%	141	0.8%
Cost of indirect labour	(1,618)	-8.27%	(1,561)	-9.2%
Commercial expenses	(259)	-1.32%	(248)	-1.5%
General and administrative expenses	(1,962)	-10.02%	(1,546)	-9.1%
Ebitda	3,552	18.14%	2,881	17.0%
Depreciation of tangible assets	(936)	-4.78%	(1,031)	-6.1%
Amortization of intangible assets	(70)	-0.36%	(74)	-0.4%
Writedowns	(33)	-0.17%	-	0.0%
Earning before interest and taxes (Ebit)	2,513	12.84%	1,776	10.5%
Writedown of investments in non controlled associates	(19)	-0.10%	-	0.0%
Financial costs	(203)	-1.03%	(687)	-4.1%
Financial income	365	1.87%	120	0.7%
Earning before taxes (Ebt)	2,656	13.57%	1,208	7.1%
Income taxes	(662)	-3.38%	(174)	-1.0%
Profit for the year	1,994	10.19%	1,034	6.1%
Minority interest	-	0.00%	-	0.0%
Group Net Result	1,994	10.19%	1,034	6.1%
Other comprehensive result	105	0.54%	(151)	-0.9%
Total Comprehensive result	2,099	10.72%	882	5.2%

Events after June 30, 2021

The order collection, even after the end of the first half, confirmed its brilliant growth trend including, in addition to China, also the main European and American manufacturers and which brought the Group's portfolio to Euro 21.6 million at the end of the month of August. At the same time, the component procurement processes have become complicated due to the persistence of the logistics crisis and the repeated lockdowns occurred in various Southeast Asian countries where important Group suppliers are based.

Starting from July, the corrections imposed on the sales lists became effective, corrections required to limit the negative effects of the increasing costs of raw materials.

Business Outlook

Without prejudice to the dynamics and the ongoing problems, as well as the now clear recovery in demand, it stands to reason that the 2021 year will close with a consistent growth compared to the previous year.

Below are the Consolidated Balance Sheet and Income Statement relating to June 30, 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION	30 June	31 December
(Values in Euro)	2021	2020
ASSETS
Fixed assets
Tangible assets	2,575,226	2,768,007
Right of use	5,471,120	3,111,501
Goodwill	2,318,181	2,318,181
Other intangible assets	256,913	303,453
Investments in non controlled associates	-	50,000
Deferred tax assets	834,459	760,716
Other non current assets	466,016	655,222
	related parties 6,700	6,700
Total non current assets	11,921,915	9,967,080
Currents assets
Inventory	12,169,616	12,253,639
Trade receivables	9,941,674	7,084,606
Tax assets	1,625,687	1,739,974
Other current assets	11,400,623	8,502,546
Cash and cash equivalents	11,170,642	13,415,179
Total current assets	46,308,242	42,995,944
Total assets	58,230,157	52,963,024
LIABILITIES
Equity
Share capital	1,090,672	1,088,495
Other reserves	4,510,610	4,745,482
Foreign exchange reserve	397,805	296,495
Retained earnings	19,685,985	20,080,251
Total equity attributable to shareholders of the parent	25,685,071	26,210,723
Minority interest	-	-
Total equity	25,685,071	26,210,723
Non current liabilities
Long-term borrowings	9,412,273	10,754,968
Long-term lease liabilities	4,446,593	2,267,054
	related parties 3,934,177	1,694,474
Severance Indemnities	763,940	935,531
Provisions for risk and charges Total non current liabilities	39,271 14,662,077	39,271 13,996,824
Current liabilities
Short-term borrowings	8,606,411	6,904,309
Short-term lease liabilities	1,131,228	943,509
	related parties 861,193	596,026
Trade liabilities	5,879,930	2,956,786
	related parties 78,691	47,976
Tax liabilities	272,874	366,811
Other current liabilities	1,992,566	1,584,061
Total current liabilities	17,883,009	12,755,477
Total Liabilities	58,230,157	52,963,024

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Values in Euro) 1 half 2021 1 half 2020 Revenues 19,578,845 16,944,480

Cost of sales (12,619,143) (10,849,376) Other revenues 431,900 141,219 Cost of indirect labour (1,618,461) (1,561,313) Commercial expenses (259,237) (247,805) General and administrative expenses (1,962,041) (1,546,295) Depreciation and amortization (1,005,793) (1,105,361) Writedowns (33,122) 0 Earning before interest and taxes 2,512,948 1,775,549 Writedown of investments in non controlled associates (19,182) - Financial costs (202,525) (687,421) related parties (33,055) (38,065) Financial income 365,235 120,094 Earning before taxes 2,656,476 1,208,221 Income taxes (662,133) (174,303) Profit for the year (A) 1,994,343 1,033,918 Other comprehensive income/(losses) for the year that will not be reclassified in icome statement: Actuarial gain/(losses) on DBO (net of tax) 3,438 (124) Other comprehensive income/(losses) for the year that will be reclassified in icome statement: Exchange differences on translating foreign operations 101,309 (151,324) Total other comprehensive income/(losses) for the year (B) 104,747 (151,448) Total comprehensive income (A) + (B) 2,099,091 882,470 Profit attributable to: Owners of the parent 1,994,343 1,033,918 Minority interest - - Total comprehensive income atributable to: Owners of the parent 2,099,091 882,470 Minority interest - - Basic earning per share 0.18 0.09 Diluted earning per share 0.18 0.09

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

B&C Speakers S.p.A. Lorenzo Coppini (Investor Relator), Email: investors@bcspeakers.com

B&C Speakers S.p.A. is an international leader in the design, production, distribution and commercialization 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). Counting roughly 120 employees, with approximately 10% of staff assigned to its Research and Development Department, the Company – under the brands of the Group: B&C SPEAKERS, 18SOUND and CIARE carries out all design, production, commercialization and control activities at its facility in Florence and Reggio Emilia, Italy. 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.