Quarterly Report • Jun 4, 2020
Quarterly Report
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| GROUP STRUCTURE | page 3 |
|---|---|
| COMPOSITION OF CORPORATE BODIES | page 4 |
| REPORT ON OPERATIONS | page 5 |
| CONSOLIDATED FINANCIAL STATEMENTS | page 17 |
| Consolidated Statement of Financial Position - Assets | |
| Consolidated Statement of Financial Position - Liabilities | |
| Consolidated Income Statement | |
| Consolidated Statement of Comprehensive Income | |
| Consolidated Statement of Cash Flow | |
| Changes in Consolidated Shareholders' Equity | |
| EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | page 24 |
| Information on the Statement of Financial Position | |
| Information on the Income Statement | |
| ANNEXES |
This document includes forward-looking statements, related to future events and Group operating, economic and financial results. These statements include risk and uncertainty elements as they depend on the occurrence of events and future developments. The actual results may deviate, even to a significant extent, from the expected outcome due to multiple factors, most of which are beyond the Group's control.
Datalogic Confidential Internal
Salvatore Fiorenza Chairman Elena Lancellotti Statutory Auditor Roberto Santagostino Statutory Auditor
Ines Gandini Alternate Statutory Auditor Eugenio Burani Alternate Statutory Auditor Patrizia Cornale Alternate Statutory Auditor
Angelo Manaresi Chairman Chiara Giovannucci Orlandi Independent Director Filippo Maria Volta Non-executive Director
Independent Auditor (4) Deloitte & Touche S.p.A.
(1) The Board of Directors will remain in office until the Shareholders' Meeting held for the approval of the financial statements as at 31 December 2020.
(2) Legal representative as regards third parties.
(3) The Board of Statutory Auditors will remain in office until the Shareholders' Meeting held for the approval of the financial statements as at 31 December 2021.
(4) Deloitte & Touche S.p.A. was appointed Independent Auditor for the nine-year period from 2019 to 2027 by the Shareholders' Meeting held on 30 April 2019 and will remain in office until the Shareholders' Meeting held for the approval of the financial statements as at 31 December 2027.
Report on Operations
This Interim Report as at 31 March 2020 was drawn up pursuant to Art. 154 ter of T.U.F. and was prepared in compliance with the international accounting standards (IAS/IFRS) endorsed by the European Union.
The amounts reported in the tables of the Report on Operations are expressed in thousands of Euro. The notes to the accounts are expressed in millions of Euro.
Datalogic S.p.A. and its subsidiaries ("Group" or "Datalogic Group") is the global technological leader in the markets of automatic data capture and process automation. The Group is specialised in the design and production of bar code readers, mobile computers, detection, measurement and security sensors, vision and laser marking systems and RFID. Its pioneering solutions contribute to increase efficiency and quality of processes along the entire value chain, in the Retail, Manufacturing, Transportation & Logistics and Healthcare sectors.
The following table summarises the Datalogic Group's key operating and financial results as at 31 March 2020 in comparison with the same period a year earlier:
| Quarter ended | |||||||
|---|---|---|---|---|---|---|---|
| 31.03.2020 | % on | 31.03.2019 | % on | Change | % | % ch. | |
| Revenues | Revenues | Change | net FX | ||||
| Revenues | 124,168 | 100.0% | 144,647 | 100.0% | (20,479) | -14.2% | -15.0% |
| Adjusted EBITDA | 7,330 | 5.9% | 21,647 | 15.0% | (14,317) | -66.1% | -63.4% |
| Operating result (EBIT) | (1,197) | -1.0% | 14,822 | 10.2% | (16,019) | n.a. | n.a. |
| Net Profit/(Loss) for the period | (4,265) | -3.4% | 12,567 | 8.7% | (16,832) | n.a. | n.a. |
| Net financial position (NFP) | (21,004) | (3,925) | (17,079) |
In the first quarter of 2020, revenues came to €124.2 million, showing a decline of 14.2% on the same period of 2019, Adjusted EBITDA decreased to €7.3 million, taking the Adjusted EBITDA margin to 5.9% (15.0% as at 31 March 2019).
All reference geographical areas reported a decrease, for the first quarter of 2020. EMEAI reported a drop of -14.8%, mitigated by +3.5% growth in Italy, -13.7% in the Americas and 11.7% in APAC.
The net loss for the quarter amounted to €4.3 million (profit of €12.6 million in the same period of 2019).
As at 31 March 2020, the Net Financial Position was negative for €21.0 million, with a decrease of respectively €17.1 million compared to 31 March 2019 (negative by €3.9 million) and €34.4 million compared to 31 December 2019 (positive for €13.4 million).
To allow for a better valuation of the Group's performance, management adopted certain alternative performance indicators that are not identified as accounting measures within IFRS (NON-GAAP measures). The measurement criteria applied by the Group might not be consistent with those adopted by other groups and the indicators might not be comparable with indicators calculated by the latter. These performance indicators, determined according to provisions set out by Guidelines on Performance Indicators, issued by ESMA/2015/1415 and adopted by Consob with communication no. 92543 of 3 December 2015, refer only to the performance of the accounting period related to this Interim Report and the compared periods.
The performance indicators must be considered as supplementary and do not supersede information given pursuant to IFRS standards. The description of the main indicators adopted is given hereunder.
The following table shows the main income statement items of the current period, compared with the same period in the previous year:
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | % Change |
|||
| Revenues | 124,168 | 100.0% | 144,647 | 100.0% | (20,479) | -14.2% |
| Cost of goods sold | (66,189) | -53.3% | (74,496) | -51.5% | 8,307 | -11.2% |
| Gross Operating Margin | 57,979 | 46.7% | 70,151 | 48.5% | (12,172) | -17.4% |
| Research and Development expenses | (16,927) | -13.6% | (14,304) | -9.9% | (2,623) | 18.3% |
| Distribution expenses | (28,795) | -23.2% | (29,102) | -20.1% | 307 | -1.1% |
| General and Administrative expenses | (11,594) | -9.3% | (11,107) | -7.7% | (487) | 4.4% |
| Other operating income/(expenses) | 601 | 0.5% | 580 | 0.4% | 21 | 3.6% |
| Total Operating expenses and others | (56,715) | -45.7% | (53,933) | -37.3% | (2,782) | 5.2% |
| Non-recurring costs/revenues and write-downs | (1,228) | -1.0% | (199) | -0.1% | (1,029) | 517.1% |
| Amortisation and depreciation from acquisitions | (1,233) | -1.0% | (1,197) | -0.8% | (36) | 3.0% |
| Operating result (EBIT) | (1,197) | -1.0% | 14,822 | 10.2% | (16,019) | n.a. |
| Financial Income/(Expenses) | (2,269) | -1.8% | (215) | -0.1% | (2,054) | 955.3% |
| Foreign exchange gains/(losses) | (3,023) | -2.4% | 1,504 | 1.0% | (4,527) | n.a. |
| Profit/(Loss) before taxes (EBT) | (6,489) | -5.2% | 16,111 | 11.1% | (22,600) | n.a. |
| Taxes | 2,224 | 1.8% | (3,544) | -2.5% | 5,768 | n.a. |
| Net Profit/(Loss) for the period | (4,265) | -3.4% | 12,567 | 8.7% | (16,832) | n.a. |
| Non-recurring costs/revenues and write-downs | (1,228) | -1.0% | (199) | -0.1% | (1,029) | 517.1% |
| Depreciation of tangible assets | (4,488) | -3.6% | (4,158) | -2.9% | (330) | 7.9% |
| Amortisation of intangible assets | (2,811) | -2.3% | (2,468) | -1.7% | (343) | 13.9% |
| Adjusted EBITDA | 7,330 | 5.9% | 21,647 | 15.0% | (14,317) | -66.1% |
Consolidated revenues were €124.2 million, down by 14.2% compared to €144.7 million in the same period of the previous year.
The following table shows the breakdown by geographical area of Group revenues achieved in the first quarter of 2020, compared with the same period of the previous year:
| Quarter ended | |||||||
|---|---|---|---|---|---|---|---|
| 31.03.2020 | % Change | 31.03.2019 (Restated)1 |
% Change | Change | % Change | % ch. net FX |
|
| Italy | 11,750 | 9.5% | 11,353 | 7.8% | 397 | 3.5% | 3.5% |
| EMEAI (excluding Italy) | 59,493 | 47.9% | 72,304 | 50.0% | (12,811) | -17.7% | -18.0% |
| Total EMEAI | 71,243 | 57.4% | 83,657 | 57.8% | (12,414) | -14.8% | -15.1% |
| Americas | 39,781 | 32.0% | 46,100 | 31.9% | (6,318) | -13.7% | -15.5% |
| APAC | 13,143 | 10.6% | 14,890 | 10.3% | (1,747) | -11.7% | -12.4% |
| Total Revenues | 124,168 | 100.0% | 144,647 | 100.0% | (20,480) | -14.2% | -15.0% |
1 Comparison data as at 31 March 2019 were restated to reflect the new allocations of Group revenues to geographical areas and business segments, as they were redefined by the Management. Reference should be made to Annex 4 for more details.
All reference geographical areas reported a decrease, for the first quarter of 2020. EMEAI reported a drop of -14.8%, mitigated by +3.5% growth in Italy, -13.7% in the Americas and -11.7% in APAC. The trend of the period was affected by an expected weakness in the markets, which had already emerged at the end of 2019, when investment decisions were postponed and was affected by an unfavorable comparison with the same period of 2019 due to the roll-outs of fixed retail scanners in the main retail chains and the completion of important multi-year projects in the Transportation & Logistics segment. The restrictive measures adopted first in APAC and subsequently in Europe and North America further led to a more pronounced contraction in volumes, both due to the slowdown in the supply chain and to the demand of end customers and distributors.
Gross Operating Margin was €58.0 million, down by 17.4% from €70.2 million reported in the first quarter of the previous year. As a percentage of revenues, it decreased by 1.8 percentage points compared to the same period in 2019, going from 48.5% in the first quarter of 2019 to 46.7% in the first quarter of 2020. Net of exchange rate effect, the impact of Gross Operating Margin on revenues decreased by 1.3 percentage points, compared to the same period in the previous year, mainly volumes decrease and to some extent to price effect.
Operating expenses and others, were €56.7 million, increased by 5.2% compared to €53.9 million in the same period of 2019, and by 8.4 as a percentage of turnover, from 37.3% to 45.7%, mainly due to investments in R&D and lower volumes.
A 18.3% increase in Research and Development expenses, which amounted at €16.9 million, (13.6% of revenues) compared to 9.9% reported in the first quarter of 2019 (€14.3 million).
In the first quarter of 2020, Research and Development spending, including investments, increased from €14.0 million to €18.8 million. The percentage of turnover is around 15.1%, compared to 9.7% reported in the first quarter of 2019, with an increase of 5.4 percentage points.
Distribution expenses, equal to €28.8 million, resulted slightly lower than the previous period (€29.1 million in the first period of 2019), with a percentage of 23.2% on revenues, compared to 20.1% recorded in 2019. Net of the one off effect of the first quarter of 2019 for the bad debt release on a project of Solution Net Systems Inc. division resolved positively for €1.8 million, distribution expenses decrease in the first quarter of 2020 by 6.8% thanks to efficiencies gained in APAC, EMEAI and marketing.
Adjusted EBITDA was €7.3 million (€21.6 million in the first quarter of 2019) and showed 9.1% decrease as percentage on revenue (8.5% decrease at constant exchange rate), equal to 5.9% compared to 15.0% recorded in the first quarter of 2019. Margin trend recorded over the period reflected the decrease in volumes and the price effects, mainly due to the Covid-19 scenario, as well as the increase in R&D investments, deemed strategic for the Group growth over the medium-long term.
EBIT is negative at €1.2 million, compared to positive €14.8 million reported in the same period of the previous year, primarily due to the effects of the Covid-19 scenario.
| Quarter ended | ||||
|---|---|---|---|---|
| 31.03.2010 | 31.03.2019 | Change | ||
| Financial Income/(Expenses) | (503) | (625) | 122 | |
| Fair Value | (1,567) | 742 | (2,309) | |
| Foreign exchange gains/losses | (3,023) | 1,504 | (4,527) | |
| Bank expenses | (220) | (302) | 82 | |
| Others | 21 | (29) | 50 | |
| Total Financial Income/(Expenses) | (5,292) | 1,290 | (6,582) |
Net Financial Income/(Expenses), negative by €5.3 million, worsened by €6.6 million, mainly due to the unfavourable performance of foreign exchange differences, negative by €3.0 million (positive by €1.5 million as at 31 March 2019) and to the negative fair value of cash equivalents investments (€-1.6 million in the first quarter 2020, compared to positive €0.7 million reported in the same quarter of 2019) driven by the downturn of financial markets at quarter end.
Net loss amounted to €4.3 million (profit of €12.6 million as at 31 March 2019).
Operating segments are identified based on the management reporting used by senior management to allocate resources and evaluate results. Consistently with the previous year, the operating segments were included in the following divisions:
The following tables show the comparison between the divisional Revenues and Adjusted EBITDA achieved in the first quarter of 2020 and those achieved in the same period of 2019:
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| 31.03.2020 | % on revenues | 31.03.2019 | % on revenues | Change | % | |
| Datalogic | 115,252 | 92.8% | 135,647 | 93.8% | (20,395) | -15.0% |
| Solution Net Systems | 5,522 | 4.4% | 5,465 | 3.8% | 57 | 1.0% |
| Informatics | 4,187 | 3.4% | 4,292 | 3.0% | (105) | -2.4% |
| Adjustments | (793) | -0.6% | (757) | (0.5%) | (36) | |
| Total Revenues | 124,168 | 100.0% | 144,647 | 100.0% | (20,479) | -14.2% |
| Quarter ended | ||||||
|---|---|---|---|---|---|---|
| 31.03.2020 | % on revenues | 31.03.2019 | % on revenues | Change | % | |
| Datalogic | 6,972 | 6.0% | 20,694 | 15.3% | (13,722) | -66.3% |
| Solution Net Systems | 110 | 2.0% | 985 | 18.0% | (875) | -88.8% |
| Informatics | 218 | 5.2% | (73) | (1.7%) | 291 | n.a. |
| Adjustments | 30 | -3.8% | 41 | (5.4%) | (11) | |
| Total Adjusted EBITDA | 7,330 | 5.9% | 21,647 | 15.0% | (14,317) | -66.1% |
In the first quarter of 2020, the Datalogic Division reported a turnover of €115.3 million, down (-15.0%) compared to the same period of 2019, with a drop in all geographical areas, especially EMEAI and Americas.
Divisional Adjusted EBITDA amounted to €7.0 million, decreasing with respect to the same period of 2019, with an Adjusted EBITDA margin of 6.0% (15.3% as at 31 March 2019). Net of exchange rate effect, Adjusted EBITDA margin of the division was 6.6%.
Below is the breakdown by industry of the Datalogic Division's revenues:
| Quarter ended | |||||||
|---|---|---|---|---|---|---|---|
| 31.03.2020 | % | 31.03.2019 (Restated)2 |
% | Change | % | % ch. net FX |
|
| Retail | 47,273 | 41.0% | 51,650 | 38.1% | (4,377) | -8.5% | -9.6% |
| Manufacturing | 25,935 | 22.5% | 28,544 | 21.0% | (2,609) | -9.1% | -9.7% |
| Transportation & Logistics | 8,513 | 7.4% | 14,085 | 10.4% | (5,571) | -39.6% | -40.2% |
| Healthcare | 4,076 | 3.5% | 4,951 | 3.6% | (875) | -17.7% | -18.9% |
| OEM | 472 | 0.4% | 224 | 0.2% | 248 | 110.4% | 104.2% |
| Channel | 28,982 | 25.1% | 36,194 | 26.7% | (7,212) | -19.9% | -20.1% |
| Total Revenues | 115,252 | 100% | 135,647 | 100.0% | (20,395) | -15.0% | -15.8% |
The Retail sector decreased by 8.5% compared to the same period of the previous year, with a slowdown in APAC (- 14.7%) and EMEAI (-18.3%) areas, the latter penalized by the conclusion of the roll outs in the fixed retail scanner segment of the main retail chains, mitigated by a double-digit growth recorded in the Americas (+14.2%).
The Manufacturing sector decreased by 9.1%, compared to the same period of the previous year, due to the persistent economic slowdown in the automotive sector, especially in EMEAI and North America, while APAC remained substantially unchanged.
The Transportation & Logistics sector reported a decrease, equal to 39.6%, compared to the same period of 2019, driven by a negative performance in all geographical areas, especially North America, where an unfavorable comparison basis is recorded compared to the first quarter of 2019 following the conclusion of some multi-year projects.
Datalogic Confidential Internal
2 Comparison data as at 31 March 2019 were restated to reflect the new allocations of Group revenues to geographical areas and business segments, as they were redefined by the Management. Reference should be made to Annex 4 for more details.
The Healthcare sector recorded 17.7% decrease, compared to the same quarter of 2019, especially in EMEAI and APAC, albeit a slight growth was recorded in North America.
The OEM sector reported a very positive performance in all geographical areas, despite its still marginal contribution to Group revenues.
The sales through distribution channel to small and medium-sized customers reported a 19.9% decrease, compared to the same quarter of 2019.
In the first quarter of 2020, the Solution Net Systems Division recorded revenues amounting to €5.5 million, in line with the same period of 2019. Divisional Adjusted EBITDA amounted to €0.1 million, down compared to the same period of 2019, due to the different mix and the stage of completion of ongoing projects.
In the first quarter of 2020, the Informatics Division recorded a turnover of €4.2 million (€4.3 million in the same period of 2019). Divisional Adjusted EBITDA was positive by €0.2 million (up by €0.3 million compared to the same period of 2019), it improved thanks to the increased sales of services and shift to the new business model "Software as a Service".
The following table shows the main financial and equity items for the Datalogic Group as at 31 March 2020, compared with 31 December 2019.
| 31.03.2020 | 31.12.2019 | Change | % Change | |
|---|---|---|---|---|
| Intangible assets | 52,433 | 50,471 | 1,962 | 3.9% |
| Goodwill | 190,557 | 186,126 | 4,431 | 2.4% |
| Tangible assets | 102,223 | 99,355 | 2,868 | 2.9% |
| Financial assets and equity investments in associates | 6,916 | 10,241 | (3,325) | -32.5% |
| Other non-current assets | 49,451 | 44,906 | 4,545 | 10.1% |
| Total Fixed Assets | 401,580 | 391,099 | 10,481 | 2.7% |
| Trade receivables | 74,363 | 78,203 | (3,840) | -4.9% |
| Trade payables | (84,591) | (106,029) | 21,438 | -20.2% |
| Inventories | 103,312 | 102,921 | 391 | 0.4% |
| Net Trade Working Capital | 93,084 | 75,095 | 17,989 | 24.0% |
| Other current assets | 50,553 | 49,345 | 1,208 | 2.4% |
| Other current liabilities and Provisions for risks, | ||||
| current | (77,571) | (78,219) | 648 | -0.8% |
| Net Working Capital | 66,066 | 46,221 | 19,845 | 42.9% |
| Other non-current liabilities | (34,139) | (34,571) | 432 | -1.2% |
| Employee severance indemnity | (6,987) | (7,026) | 39 | -0.6% |
| Provisions for risks, non-current | (4,923) | (4,916) | (7) | 0.1% |
| Net Invested Capital | 421,597 | 390,807 | 30,790 | 7.9% |
| Shareholders' Equity | (400,593) | (404,171) | 3,578 | -0.9% |
| Net financial position (NFP) | (21,004) | 13,364 | (34,368) | -257.2% |
As at 31 March 2020, Net Trade Working Capital was €93.1 million (15.7% of revenues), increasing by €18.0 million compared to 31 December 2019 (equal to €75.1 million), following the lower commercial exposure to suppliers due to costs and volumes reduction.
Net Invested Capital, reached €421.6 million (€390.8 million as at 31 December 2019), increased by €30.8 million compared to the previous year, of which €6.1 million due to exchange rate effect. The increase is due to net working capital, in the amount of €19.8 million, as well as to fixed assets, amounting to €10.5 (of which €5.4 million due to exchange rate effect), following investments in R&D and in production facilities.
As at 31 March 2020, the Net Financial Position was negative for €21.0 million, with a decrease of respectively €17.1 million compared to 31 March 2019 (negative by €3.9 million) and €34.4 million compared to 31 December 2019.
Negative Free cash flow of €27.0 million in the first quarter of 2020 (negative by €12.0 million in the same period of 2019), due to cash absorption of operations within the Covid scenario and higher investments in R&D, strategic for the medium-term growth of the Group. Net financial negative by €3.2 million, reported a worsening, compared to the first quarter of 2019, due to the unfavourable performance of exchange rates and fair value of cash equivalents investments. They were however offset by a lower cash absorption of other operating assets and liabilities.
Cash flows, which brought about the change in Consolidated Net Financial Position as at 31 March 2020, are summarised as follows:
| 31.03.2020 | 31.03.2019 | Change | |
|---|---|---|---|
| Net Financial Position/(Net Financial Debt) at the beginning of the period | 13,365 | 23,843 | (10,478) |
| Adjusted EBITDA | 7,330 | 21,647 | (14,317) |
| Change in net trade working capital | (17,989) | (18,264) | 275 |
| Net investments | (8,676) | (6,082) | (2,594) |
| Change in taxes | (4,426) | (4,504) | 78 |
| Financial Incomes/(Expenses) | (3,207) | 1,289 | (4,496) |
| Dividend distribution | - | - | - |
| Treasury shares | (2,470) | (2,497) | 27 |
| Other changes | (1,621) | (5,247) | 3,626 |
| Change in Net financial position (NFP) before IFRS 16 | (31,059) | (13,658) | (17,401) |
| IFRS 16 | (3,311) | (14,110) | 10,799 |
| Change in Net financial position | (34,370) | (27,768) | (6,602) |
| Net Financial Position/(Net Financial Debt) at the end of the period | (21,005) | (3,925) | (17,080) |
As at 31 March 2020, the Net Financial Debt/(Net Financial Position) is broken down as follows:
| 31.03.2020 | 31.12.2019 | |
|---|---|---|
| A. Cash and bank deposits | 121,948 | 151,829 |
| B. Other cash equivalents | 12 | 12 |
| b1. restricted cash | 12 | 12 |
| C. Securities held for trading | - | - |
| c1. short-term | - | - |
| c2. long-term | - | - |
| D. Cash and cash equivalents (A) + (B) + (C) | 121,960 | 151,841 |
| E. Current financial receivables | 29,633 | 31,200 |
| e1. other current financial receivables | 29,633 | 31,200 |
| F. Bank overdrafts | 205 | 221 |
| G. Current portion of non-current debt | 49,187 | 47,421 |
| H. Other current financial liabilities | 6,411 | 6,457 |
| h1. hedging instruments | - | - |
| h2. leasing payables | 5,172 | 4,589 |
| h3. current financial liabilities | 1,239 | 1,868 |
| I. Current financial debt (F) + (G) + (H) | 55,803 | 54,099 |
| J. Current net financial debt/(Current net financial position) (I) - (E) - (D) | (95,790) | (128,942) |
| K. Non-current bank borrowing | 110,025 | 110,106 |
| L. Bonds | - | - |
| M. Other non-current liabilities | 6,769 | 5,472 |
| m1. hedging instruments | - | - |
| m2. leasing payables | 6,769 | 5,472 |
| m3. non-current financial liabilities | - | - |
| N. Non-current financial debt (K) + (L) + (M) | 116,794 | 115,578 |
| O. Net financial debt/(Net financial position) (J) + (N) | 21,004 | (13,364) |
As at 31 March 2020, the Group has credit lines in place amounting to €338.4 million, of which €177.8 million unused including €100.0 million long-term subscribed during the month of March 2020, aimed at supporting investments, and €77.8 million short-term.
The Reconciliation between Equity and Net Profit of Datalogic S.p.A. and the corresponding consolidated values as at 31 March 2020 and 31 December 2019, as envisaged in Consob Communication no. DEM/6064293 of 28 July 2006, are disclosed here below.
| 31 March 2020 | 31 December 2019 | |||
|---|---|---|---|---|
| Shareholders' Equity |
Profit/loss for the period |
Shareholders' Equity |
Profit/loss for the period |
|
| Parent Company's equity and profit | 350,773 | (359) | 353,548 | 105,040 |
| Shareholders' equity and profit/(loss) of consolidated companies |
103,160 | (5,348) | 105,404 | 56,671 |
| Elimination of dividends | (114,470) | |||
| Amortisation of intangible assets - Business Combination | (5,827) | (5,827) | ||
| Business Combination under common control | (31,733) | (31,733) | ||
| Elimination of capital gain on sale of business branch | (17,067) | (17,067) | ||
| Elimination of intercompany transactions | (7,452) | 2,033 | (9,485) | 2,792 |
| Adjustment of write-downs and capital gains on equity investments |
5,517 | 5,517 | ||
| Goodwill impairment | (1,395) | (1,395) | ||
| Others | 238 | (377) | 616 | (218) |
| Tax effect | 4,380 | (214) | 4,594 | 466 |
| Consolidated's equity and profit | 400,593 | (4,265) | 404,171 | 50,281 |
In the first quarter of 2020, a reorganization of the commercial structure was launched in order strengthen the endusers and partners' markets oversee in the respective geographies.
The first quarter of 2020, as previously outlined, was significantly affected by the spread of the Covid pandemic, for which the Group implemented all the necessary measures to protect the safety of its employees, through the activation of smart-working, sanitization of the work environments, the implementation of health and safety devices, to manage the business in the lockdown phase, as well as the phase of progressive restart, in the best possible way without interruption.
During the month of March 2020, the Group subscribed additional credit lines for an amount of €100 million, which has not been used at the date of this document, aimed at supporting the Group's growth and investments.
On 30 March 2020, the Company postponed from 30 April 2020 to 4 June 2020 the Shareholders' Meeting that will be called, inter alia, to examine the Financial Statements as at 31 December 2019, in view of the health emergency related to Covid-19 (Coronavirus) and the regulations issued by Decree Law no. 18 of 17 March 2020 (so-called Decree Law "Cura Italia").
The Board of Directors also confirmed that it will propose to the aforesaid Shareholders' Meeting the distribution of an ordinary unit dividend, gross of legal withholdings, equal to 30 Euro cents per share, for a maximum total amount of €17,533,947, with coupon detachment on 15 June 2020 (record date 16 June 2020) and payment as from 17 June 2020
After the end of the quarter, the Covid-19 emergency continued and stricter measures were adopted by the various Government authorities. This led to an extension of the lockdown, in April and partly in May, in Europe and its gradual activation in the United States, the Group's main markets.
In response to this situation, the Company had adopted an action plan aimed at mitigating the impact of Covid-19 already in March, managing the emergency by focusing on the safety of its own resources first and foremost, but at the same time ensuring business continuity in order to protect the Group's economic and financial performance and equity soundness. These measures, which at the date of the hereby document are still partially being defined in light of recent regulatory developments, are and will be implemented through careful financial planning to be executed through cost and investment reduction plans not strictly necessary, as well as through the use of social safety nets.
Given the current uncertainty about the duration and intensity of the health and socio-economic emergency related to Covid-19, as well as the timing of a possible return to normal life, the Group deems that it is not yet possible to estimate the overall impact that this epidemic will have over the year.
The economic and financial performance recorded in the first quarter of 2020 reflects the impact of the spread, first in China and then in the rest of the world, of the pandemic and the resulting restrictive measures adopted by local Governments and implemented by the Datalogic Group to protect the health of its employees, and which, while designed to ensure business continuity, have nevertheless led to a reduction, even significant, in business activities.
To date, the elements underlying the development of forecasts for the year remain very uncertain. The evolution of the pandemic, the resolutions of the Authorities on the recovery of economic activities, which are still partially in lockdown today, as well as the reaction of the markets, in a context of recession that could emerge in several regions of the world, have resulted in negative growth forecasts for the first half of the year and potentially for the remainder of 2020.
Despite the expected short-term negative performance, the Group believes that, once the current emergency eases, the sound economic and financial fundamentals will lead Datalogic to grow again in the medium term.
The Parent Company has no secondary locations.
The Chairman of the Board of Directors
(Mr. Romano Volta)
Consolidated Financial Statements
| ASSETS (€/000) | Note | 31.03.2020 | 31.12.2019 |
|---|---|---|---|
| A) Non-current assets (1+2+3+4+5+6+7+8) | 401,580 | 391,099 | |
| 1) Tangible assets | 90,638 | 89,602 | |
| Land | 1 | 8,773 | 8,778 |
| Buildings | 1 | 31,413 | 31,820 |
| Other assets | 1 | 34,160 | 35,418 |
| Assets in progress and payments on account | 1 | 16,292 | 13,586 |
| 2) Intangible assets | 242,990 | 236,597 | |
| Goodwill | 2 | 190,557 | 186,126 |
| Development costs | 2 | 9,637 | 9,927 |
| Other | 2 | 27,391 | 28,430 |
| Assets in progress and payments on account | 2 | 15,405 | 12,114 |
| 3) Right-of-use assets | 3 | 11,585 | 9,753 |
| 4) Equity investments in affiliates | 4 | 776 | 776 |
| 5) Financial assets | 6,140 | 9,465 | |
| Equity investments | 6 | 6,140 | 9,465 |
| Securities | 6 | 0 | 0 |
| 6) Non-current financial receivables | 0 | 0 | |
| 7) Trade and other receivables | 7 | 1,554 | 1,334 |
| 8) Deferred tax assets | 13 | 47,897 | 43,572 |
| B) Current assets (9+10+11+12+13+14+15) | 379,821 | 413,510 | |
| 9) Inventories | 103,312 | 102,921 | |
| Raw and ancillary materials and consumables | 8 | 47,081 | 41,754 |
| Work in progress and semi-finished products | 8 | 20,315 | 23,582 |
| Finished products and goods | 8 | 35,916 | 37,585 |
| 10) Trade and other receivables | 99,259 | 103,127 | |
| Trade receivables | 7 | 74,363 | 78,203 |
| of which from associates | 7 | 846 | 895 |
| of which from related parties | 7 | 0 | 0 |
| Other receivables, accrued income and prepaid expenses | 7 | 24,896 | 24,924 |
| of which from associates | 5 | 0 | |
| of which from related parties | 77 | 77 | |
| 11) Tax receivables | 9 | 25,657 | 24,421 |
| of which from parent company | 12,742 | 12,742 | |
| 12) Financial assets | 29,633 | 31,200 | |
| Securities | 6 | 0 | 0 |
| Other | 6 | 29,633 | 31,200 |
| 13) Current financial receivables | 0 | 0 | |
| 14) Financial assets - Derivative instruments | 6 | 0 | 0 |
| 15) Cash and cash equivalents | 121,960 | 151,841 | |
| C) Held-for-sale assets | 0 | 0 | |
| Total Assets (A+B+C) | 781,401 | 804,609 |
| LIABILITIES (€/000) | Note | 31.03.2020 | 31.12.2019 |
|---|---|---|---|
| A) Total Shareholders' Equity (1+2+3+4+5+6) | 10 | 400,593 | 404,171 |
| 1) Share capital | 10 | 30,392 | 30,392 |
| 2) Reserves | 10 | 129,660 | 128,972 |
| 3) Retained earnings | 10 | 243,003 | 192,885 |
| 4) Profit/(Loss) for the period | 10 | (4,204) | 50,069 |
| 5) Group Shareholders' Equity | 10 | 398,852 | 402,318 |
| 6) Profit/(Loss) for the period - Minorities | 10 | (61) | 212 |
| 6) Minority share capital | 10 | 1,803 | 1,641 |
| 6) Minority interests | 1,742 | 1,853 | |
| B) Non-current liabilities (7+8+9+10+11+12+13) | 162,843 | 162,091 | |
| 7) Non-current financial payables | 11 | 116,794 | 115,578 |
| 8) Non-current financial liabilities | 0 | 0 | |
| 9) Tax payables | 67 | 68 | |
| 10) Deferred tax liabilities | 12 | 18,275 | 17,819 |
| 11) Post-employment benefits | 13 | 6,987 | 7,026 |
| 12) Provisions for risks and charges, non-current | 14 | 4,923 | 4,916 |
| 13) Other liabilities | 15 | 15,797 | 16,684 |
| C) Current liabilities (14+15+16+17+18) | 217,965 | 238,347 | |
| 14) Trade and other payables | 133,068 | 154,153 | |
| Trade payables | 15 | 84,591 | 106,029 |
| of which to associates | 15 | 63 | 55 |
| of which to related parties | 112 | 133 | |
| Other payables, accrued liabilities and deferred income | 15 | 48,477 | 48,124 |
| 15) Tax payables | 9 | 24,778 | 25,822 |
| of which to parent company | 15,913 | 15,913 | |
| 16) Provisions for risks and charges, current | 14 | 4,316 | 4,273 |
| 17) Current financial liabilities | 0 | 0 | |
| 18) Current financial payables | 11 | 55,803 | 54,099 |
| Total Liabilities (A+B+C) | 781,401 | 804,609 |
| (€/000) | Note | 31.03.2020 | 31.03.2019 |
|---|---|---|---|
| 1) Revenues | 16 | 124,168 | 144,647 |
| Revenues from sale of products | 114,994 | 135,995 | |
| Revenues from services | 9,174 | 8,652 | |
| of which from related parties and associates | 1,166 | 1,067 | |
| 2) Cost of goods sold | 17 | 66,568 | 74,496 |
| of which to related parties and associates | 126 | 229 | |
| Gross Operating Margin (1-2) | 57,600 | 70,151 | |
| 3) Other operating revenues | 18 | 1,165 | 1,127 |
| 4) Research and development expenses | 17 | 17,056 | 14,330 |
| of which to related parties and associates | 143 | 155 | |
| 5) Distribution expenses | 17 | 29,200 | 29,106 |
| of which to related parties and associates | 6 | 17 | - |
| 6) General and administrative expenses | 17 | 13,142 | 12,473 |
| of which to related parties and associates | 51 | 173 | |
| 7) Other operating expenses | 17 | 564 | 547 |
| Total operating costs | 59,962 | 56,456 | |
| Operating result | (1,197) | 14,822 | |
| 8) Financial income | 19 | 8,540 | 10,834 |
| 9) Financial expenses | 19 | 13,832 | 9,545 |
| Financial Income/(Expenses) (8-9) | (5,292) | 1,289 | |
| 10) Profits from associates | - | - | |
| Profit/(Loss) before taxes from continuing operations | (6,489) | 16,111 | |
| Income taxes | 20 | (2,224) | 3,544 |
| Profit/(loss) for the period | (4,265) | 12,567 | |
| Basic earnings/(loss) per share (Euro) | 21 | (0.07) | 0.22 |
| Diluted earnings/(loss) per share (Euro) | 21 | (0.07) | 0.22 |
| Attributable to: | |||
| Shareholders of the Parent Company | (4,204) | 12,567 | |
| Minority interests | (61) |
| (€/000) | Note | 31.03.2020 | 31.03.2019 |
|---|---|---|---|
| Profit/(loss) for the period | (4,265) | 12,567 | |
| Other components of the statement of comprehensive income: | |||
| Other components of the statement of comprehensive income which will be | |||
| subsequently reclassified to profit/(loss) for the period: | - | - | |
| Profit/(Loss) on derivative financial instruments (cash flow hedge) | 10 | 54 | 69 |
| Profit/(Loss) due to translation of the accounts of foreign companies | 10 | 6,429 | 2,486 |
| Profit/(Loss) from financial assets at FVOCI | 10 | (3,325) | 2,053 |
| of which tax effect | 39 | (549) | |
| Total other components of the statement of comprehensive income which | 3,158 | 4,608 | |
| will be subsequently reclassified to profit/(loss) for the period | |||
| Other components of the statement of comprehensive income which will | |||
| not be subsequently reclassified to profit/(loss) for the period | |||
| Actuarial gains (losses) on defined-benefit plans | |||
| of which tax effect | |||
| Total other components of the statement of comprehensive income which | - | - | |
| will not be subsequently reclassified to profit/(loss) for the period | |||
| Total profit/(loss) of Comprehensive Income Statement | 3,158 | 4,608 | |
| Total comprehensive profit/(loss) for the period | (1,107) | 17,175 | |
| Attributable to: | |||
| Shareholders of the Parent Company | (1,046) | 17,175 | |
| Minority interests | (61) | - |
| (€/000) | Note | 31.03.2020 | 31.03.2019 |
|---|---|---|---|
| Profit/(loss) before taxes | (6,489) | 16,111 | |
| Depreciation of tangible assets and write-downs | 1, 2 | 3,105 | 4,166 |
| Amortisation of intangible assets and write-downs | 1, 2 | 2,812 | 2,471 |
| Depreciation of right-of-use assets | 3 | 1,382 | 1,303 |
| Losses (Gains) from sale of fixed assets | 18, 19 | (9) | 15 |
| Change in provisions for risks and charges | 15 | 52 | (761) |
| Change in bad debt provisions | 18 | 96 | (1,755) |
| Change in employee benefits reserve | 14 | (39) | 99 |
| Other non-monetary changes | 5,346 | (1,893) | |
| Cash flow generated (absorbed) from operations before changes in working capital |
6,256 | 19,756 | |
| Change in trade receivables | 7 | 3,744 | 13,358 |
| Change in final inventories | 8 | (391) | (11,909) |
| Change in trade payables | 16 | (21,438) | (17,958) |
| Change in other current assets | 7 | 28 | (11) |
| Change in other current liabilities | 16 | 353 | (7,768) |
| Change in other non-current assets | 7 | (220) | 3,497 |
| Change in other non-current liabilities | 16 | (887) | 534 |
| Cash flow generated (absorbed) from operations after changes in working capital |
(12,555) | (501) | |
| Change in taxes | (4,426) | (4,504) | |
| Interest paid | (745) | (840) | |
| Interest collected | 107 | 147 | |
| Cash flow generated (absorbed) from operations (A) | (17,619) | (5,698) | |
| Increase in intangible assets | 2 | (4,294) | (1,626) |
| Decrease in intangible assets | 2 | (9) | |
| Increase in tangible assets | 1 | (4,399) | (4,508) |
| Decrease in tangible assets | 1 | 17 | 61 |
| Increase in right-of-use assets | (3,311) | ||
| Change in consolidation area | |||
| Change in non-current financial assets | 5 | ||
| Cash flow generated (absorbed) from investments (B) | (11,987) | (6,082) | |
| Change in financial receivables | 5 | 743 | |
| Change in financial payables | 12, 6 | 1,040 | (1,187) |
| Repayment of lease financial payables | 2,018 | (1,368) | |
| (Purchase)/sale of treasury shares | 11 | (2,470) | (2,497) |
| Dividend payment | 11 | ||
| Effect of change in cash and cash equivalents | (1,002) | 673 | |
| Other changes | 139 | (231) | |
| Cash flow generated (absorbed) from financial activity (C) | (275) | (3,868) | |
| Net increase (decrease) in available cash (A+B+C) | 10 | (29,881) | (15,648) |
| Net cash and cash equivalents at beginning of period | 10 | 151,841 | 181,430 |
| Net cash and cash equivalents at end of period | 10 | 121,960 | 165,782 |
| Description | Share capital |
Share premium reserve |
Treasury shares |
Translation reserve |
Other Reserves |
Retained earnings |
Group Profit (Loss) |
Group Shareholders' Equity |
Profit (Loss) of Minority interests |
Shareholders' Equity of Min. interests |
Profit (Loss) |
Shareholders' Equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 01.01.2020 | 30,392 | 111,779 | (15,113) | 26,530 | 5,776 | 192,885 | 50,069 | 402,318 | 212 | 1,853 | 50,281 | 404,170 |
| Allocation of earnings | 50,069 | (50,069) | (212) | 212 | (50,281) | |||||||
| Dividends | ||||||||||||
| Treasury shares | (2,470) | (2,470) | (2,470) | |||||||||
| Stock Grant | ||||||||||||
| Other changes | (11) | (11) | (50) | |||||||||
| Profit/(loss) for the period |
(4,204) | (4,204) | (61) | (4,265) | (4,265) | |||||||
| Other components of | ||||||||||||
| the statement of | 6,429 | (3,271) | 3,158 | 3,158 | ||||||||
| comprehensive income | ||||||||||||
| Comprehensive profit (loss) |
6,429 | (3,271) | (4,204) | (1,046) | (61) | (61) | (4,265) | (1,107) | ||||
| 31.03.2020 | 30,392 | 111,779 | (17,583) | 32,948 | 2,505 | 242,954 | (4,204) | 398,791 | (61) | 1,803 | (4,265) | 400,593 |
| Description | Share capital |
Share premium reserve |
Treasury shares |
Translation reserve |
Other Reserves |
Retained earnings |
Group Profit (Loss) |
Group Shareholders' Equity |
Profit (Loss) of Minority interests |
Shareholders' Equity of Min. interests |
Profit (Loss) |
Shareholders' Equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 01.01.2019 | 30,392 | 111,779 | (10,811) | 20,401 | 2,545 | 159,292 | 62,210 | 375,809 | 62,210 | 375,809 | ||
| Allocation of earnings | 62,210 | (62,210) | (62,210) | |||||||||
| Dividends | ||||||||||||
| Treasury shares | (2,566) | (2,566) | (2,566) | |||||||||
| Stock Grant | 69 | 69 | 69 | |||||||||
| Other changes | ||||||||||||
| Profit/(loss) for the period |
12,567 | 12,567 | 12,567 | 12,567 | ||||||||
| Other components of | ||||||||||||
| the statement of | 4,341 | 267 | (2) | 4,606 | 4,606 | |||||||
| comprehensive income | ||||||||||||
| Comprehensive profit (loss) |
4,341 | 267 | (2) | 12,567 | 17,173 | 12,567 | 17,173 | |||||
| 31.03.2019 | 30,392 | 111,779 | (13,377) | 24,742 | 2,881 | 221,500 | 12,567 | 390,485 | 12,567 | 390,485 |
Explanatory Notes to the Consolidated Financial Statements
The Datalogic Group is the global leader in the markets of automatic data capture and process automation. The Group is specialised in the design and production of bar code readers, mobile computers, detection, measurement and security sensors, vision and laser marking systems and RFID.
Its pioneering solutions contribute to increase efficiency and quality of processes in the areas of Retail, Manufacturing, Transportation & Logistics, and Healthcare, along the entire value chain.
Datalogic S.p.A. (hereinafter "Datalogic", the "Parent Company" or the "Company") is a company listed in the STAR segment of the Italian Stock Exchange managed by Borsa Italiana S.p.A., with its registered office in Italy. The address of the registered office is Via Candini, 2 - Lippo di Calderara (BO).
This Consolidated Interim Report as at 31 March 2020 includes the figures of the Parent Company and its subsidiaries (defined hereinafter as the "Group"), as well as its minority interests in associates.
The publication of the Consolidated Interim Report as at 31 March 2020 of the Datalogic Group was authorised by resolution of the Board of Directors dated 14 May 2020.
This Consolidated Interim Report was drawn up pursuant to Art. 154-ter of Legislative Decree no. 58 (TUF) of 24 February 1998 and following amendments and supplements, as well as to the Consob's Issuer Regulation. This Consolidated Interim Report complies with IAS 34 "Interim Financial Reporting" providing the abbreviated notes required by this international accounting standard, supplemented to provide additional information, as necessary.
Therefore, this Consolidated Interim Report must be read together with the Consolidated Financial Statements and the Explanatory Notes as at 31 December 2019, which have been prepared in accordance with IFRS accounting standards endorsed by the European Union, approved at the Shareholders' Meeting held on 19 March 2020 and available in the section Investor Relations at www.Datalogic.com.
This Consolidated Interim Report is drawn up in thousands of Euro, which is the Group's "functional" and "presentation" currency.
The financial statements adopted are compliant with those required by IAS 1 and which were used in the Consolidated Financial Statements for the year ended 31 December 2019, in particular:
current and non-current assets, as well as current and non-current liabilities are disclosed separately in the Statement of Financial Position. Current assets, which include cash and cash equivalents, are those set to be realised, sold or used during the Group's normal operational cycle; current liabilities are those whose extinction is envisaged during the Group's normal operating cycle or in the 12 months after the reporting date;
with regard to the Income Statement, cost and revenue items are disclosed based on grouping by function, as this classification was deemed more meaningful for comprehension of the Group's business result;
Furthermore, as required by Consob resolution no. 15519 of 27 July 2006, with regard to the consolidated income statement, costs and revenues from non-recurring operations have been specifically identified and the related effects on the major interim levels have been indicated separately. Non-recurring events and transactions are mainly identified according to the nature of the transactions. In particular, items which, given their nature, do not occur on an ongoing basis during normal operations are included among non-recurring costs/revenues (these include, for example: income/expenses from business combinations and income/expenses from corporate reorganisation processes).
No new accounting standards or interpretations and amendments were adopted in this Consolidated Interim Report.
At the reporting date of this Consolidated Interim Report, some accounting criteria were issued but are not yet applicable, as described in the Group Consolidated Financial Statements as at 31 December 2019, to which reference is made. The Group intends to adopt these standards and interpretations, if applicable, when they will enter into force.
The preparation of the IFRS-compliant Consolidated Interim Report requires directors to apply accounting standards and methodologies that, in some cases, are based on valuations and estimates, which in turn refer to historic experience and assumptions based on specific circumstances at any given time. The application of such estimates and assumptions affects the amounts related to revenues, costs, assets and liabilities, as well as contingent liabilities disclosed and any relevant information. The actual amounts of accounting items, for which these estimates and assumptions have been used, might be different from those reported due to the uncertainty characterising the assumptions and conditions on which estimates are based.
The economic result of the period is disclosed net of taxes recognised based on the best estimate of the weighted average rate expected for the year.
Transition to IFRS 16 introduces some elements of professional judgement, which involve the definition of some accounting policies and the use of assumptions and estimates in relation to the lease term and the incremental borrowing rate.
During the first three months of 2020, no changes occurred in the consolidation area.
The exchange rates used to determine the countervalue in Euro of financial statements expressed in foreign currency of subsidiaries (currency for 1 Euro) are shown hereunder:
| Currency (ISO Code) | Quantity of currency/1 Euro | |||
|---|---|---|---|---|
| March 2020 | March 2020 | December 2019 | March 2019 | |
| Final exchange rate |
Average exchange rate for the period |
Final exchange rate |
Average exchange rate for the period |
|
| US Dollar (USD) | 1.0956 | 1.1027 | 1.1234 | 1.1358 |
| British Pound Sterling (GBP) | 0.8864 | 0.8623 | 0.8508 | 0.8725 |
| Swedish Krona (SEK) | 11.0613 | 10.6689 | 10.4468 | 10.4187 |
| Singapore Dollar (SGD) | 1.5633 | 1.5281 | 1.5111 | 1.5388 |
| Japanese Yen (JPY) | 118.9000 | 120.0973 | 121.9400 | 125.0835 |
| Australian Dollar (AUD) | 1.7967 | 1.6791 | 1.5595 | 1.5944 |
| Hong Kong Dollar (HKD) | 8.4945 | 8.5686 | 8.7473 | 8.9116 |
| Chinese Renminbi (CNY) | 7.7784 | 7.6956 | 7.8205 | 7.6635 |
| Real (BRL) | 5.7001 | 4.9167 | 4.5157 | 4.2775 |
| Mexican Pesos (MXN) | 26.1772 | 22.0918 | 21.2202 | 21.8057 |
| Hungarian Forint (HUF) | 360.0200 | 339.1370 | 330.5300 | 317.9075 |
Operating segments are identified based on the management reporting used by senior management to allocate resources and evaluate results.
For 2020, the operating segments were included in the following divisions:
Sales transactions amongst the operating segments indicated hereunder are executed at arm's length conditions, based on the Group transfer pricing policies.
The income statement information related to operating segments as at 31 March 2020 and 31 March 2019 are as follows (€/000):
| Segment economic position | Datalogic Business |
Solution Net System |
Informatics Adjustments | Total Group 31.03.2020 |
|
|---|---|---|---|---|---|
| Revenues | 115,252 | 5,522 | 4,187 | (793) | 124,168 |
| Adjusted EBITDA | 6,972 | 110 | 218 | 30 | 7,330 |
| % Revenues | 6.00% | 1.99% | 5.21% | 5.9% | |
| EBIT | (1,415) | 97 | 91 | 30 | (1,197) |
| Segment economic position | Datalogic Business |
Solution Net System |
Informatics Adjustments | Total Group 31.03.2019 |
|
|---|---|---|---|---|---|
| Revenues | 135,647 | 5,465 | 4,292 | (757) | 144,647 |
| Adjusted EBITDA | 20,694 | 985 | (73) | 41 | 21,647 |
| % Revenues | 15.26% | 18.02% | -1.70% | 14.97% | |
| EBIT | 14,120 | 963 | (302) | 41 | 14,822 |
The balance-sheet information related to operating segments as at 31 March 2020 and 31 March 2019 are as follows (€/000):
| Segment financial position | Datalogic Business |
Solution Net System |
Informatics Adjustments | Total Group 31.03.2020 |
|
|---|---|---|---|---|---|
| Total Assets | 779,970 | 13,206 | 20,927 | (32,702) | 781,401 |
| Total Liabilities | 368,753 | 7,294 | 5,175 | (414) | 380,808 |
| Shareholders' Equity | 411,217 | 5,912 | 15,752 | (32,288) | 400,593 |
| Segment financial position | Datalogic Business |
Solution Net System |
Informatics Adjustments | Total Group 31.03.2019 |
|
|---|---|---|---|---|---|
| Total Assets | 831,678 | 16,411 | 20,585 | (23,386) | 845,288 |
| Total Liabilities | 429,453 | 7,276 | 5,949 | 12,125 | 454,803 |
| Shareholders' Equity | 402,225 | 9,135 | 14,636 | (35,511) | 390,485 |
Over the period, recognised net investments amounted to €4,382 thousand, and depreciation amounted to €3,105 thousand, while the exchange rates were negative by €241 thousand. Tangible assets are broken down as at 31 March 2020 and 31 December 2019 as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Land | 8,773 | 8,778 | (5) |
| Buildings | 31,413 | 31,820 | (407) |
| Other assets | 34,160 | 35,418 | (1,258) |
| Assets in progress and payments on account | 16,292 | 13,586 | 2,706 |
| Total | 90,638 | 89,602 | 1,036 |
The "Other assets" item as at 31 March 2020 includes the following categories: Plant and machinery (€11,240 thousand), Industrial equipment and moulds (€10,419 thousand), Office furniture and machines (€9,586 thousand), General plants related to buildings (€1,396 thousand), Commercial equipment and demo room (€818 thousand), Maintenance on thirdparty assets (€560 thousand), and Motor vehicles (€66 thousand).
The balance of item "Assets in progress and payments on account", equal to €16,292 thousand, is mainly composed of the following: €12,456 thousand for investments made for the building and enlargement of Group plants, €3,261 thousand for moulds under construction, €454 thousand for self-manufactured equipment and production lines. The increase for the period is due primarily to the construction of Buildings in Germany (€702 thousand) and in the United States (€1,267 thousand), in addition to moulds under construction (€1,180 thousand).
Over the period, recognised net investments amounted to €4,294 thousand, and amortisation amounted to €2,812 thousand, while the exchange rates amounted to €4,911 thousand. Intangible assets are broken down as at 31 March 2020 and 31 December 2019 as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Goodwill | 190,557 | 186,126 | 4,431 |
| Development costs | 9,637 | 9,927 | (290) |
| Other intangible assets | 27,391 | 28,430 | (1,039) |
| Assets in progress and payments on account | 15,405 | 12,114 | 3,291 |
| Total | 242,990 | 236,597 | 6,393 |
"Goodwill", totalling €190,557 thousand, consisted of the following items:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| CGU Datalogic | 176,802 | 172,642 | 4,159 |
| CGU Informatics | 13,755 | 13,483 | 272 |
| Total | 190,557 | 186,126 | 4,431 |
The change in "Goodwill", compared to 31 December 2019, is mainly attributable to translation differences. This Goodwill has been allocated to the CGUs (Cash Generating Units) corresponding to the individual companies and/or sub-groups to which they pertain.
As at 31 March 2020, the Directors deemed that assumptions underlying the impairment tests and related sensitivity tests undergone for the aforesaid CGUs as at 31 December 2019 and the related Business plans were still valid. Therefore, no impairment indicators were reported with reference to recognised goodwill. In this evaluation, Directors took account of results achieved as at 31 March 2020 and estimated for the entire year 2020.
The "Development costs" item, amounting to €9,637 thousand, is composed of specific product development projects. The "Other" item, amounting to €27,391 thousand, consists primarily of intangible assets acquired through business combinations carried out by the Group. Details are shown in the following table:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Patents | 13,480 | 14,184 | (704) |
| Know-how | 2,843 | 3,066 | (223) |
| Licence agreement | 2,884 | 2,943 | (59) |
| Software | 8,148 | 8,098 | 50 |
| Others | 36 | 138 | (102) |
| Total | 27,391 | 28,430 | (1,039) |
The "Assets in progress and payments on account" item, equal to €15,405 thousand, is attributable, in the amount of €12,803 thousand, to the capitalisation of costs relating to Research and Development projects that are currently underway, as well as, in the amount of €2,602 thousand, to software implementations that are not yet completed.
Over the period, recognised net investments amounted to €3,313 thousand, and depreciation amounted to €1,382 thousand, while the exchange rates were negative by €99 thousand. Right-of-use assets are broken down as at 31 March 2020 and 31 December 2019 as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Buildings | 9,037 | 7,560 | 1,477 |
| Vehicles | 2,417 | 2,041 | 376 |
| Office equipment | 131 | 152 | (21) |
| Total | 11,585 | 9,753 | 1,832 |
Equity investments owned by the Group as at 31 March 2020 remained unchanged compared to the previous year and they are broken down as follows:
| 31.12.2019 | Increases | Decreases | Transfers | 31.03.2020 | |
|---|---|---|---|---|---|
| CAEN RFID Srl | 550 | 550 | |||
| R4I | 150 | 150 | |||
| Datalogic Automation AB | 2 | 2 | |||
| Specialvideo Srl | 29 | 29 | |||
| Datasensor GMBH | 45 | 45 | |||
| Total | 776 | - | - | - | 776 |
The following table shows the breakdown of "Financial assets and liabilities", according to provisions set out by IFRS 9:
| Financial assets at amortised cost |
Financial assets at FV through profit or loss |
Financial assets at FV through OCI |
31.03.2020 | |
|---|---|---|---|---|
| Non-current financial assets | 1,554 | 6,140 | 7,694 | |
| Financial assets - Equity investments | 6,140 | 6,140 | ||
| Financial assets - Securities | ||||
| Financial assets - Loans | ||||
| Financial assets - Other | ||||
| Other receivables | 1,554 | 1,554 | ||
| Current financial assets | 221,219 | 29,633 | 250,852 | |
| Trade receivables | 74,363 | 74,363 | ||
| Other receivables | 24,896 | 24,896 | ||
| Financial assets - Other | 29,633 | 29,633 | ||
| Financial assets - Securities | ||||
| Cash and cash equivalents | 121,960 | 121,960 | ||
| Total | 222,773 | 29,633 | 6,140 | 258,546 |
| Derivatives | Financial liabilities at amortised cost |
31.03.2020 | |
|---|---|---|---|
| Non-current financial liabilities | 132,591 | 132,591 | |
| Financial payables | 116,794 | 116,794 | |
| Financial liabilities - Derivative instruments | |||
| Other payables | 15,797 | 15,797 | |
| Current financial liabilities | 188,696 | 188,696 | |
| Trade payables | 84,416 | 84,416 | |
| Other payables | 48,477 | 48,477 | |
| Financial liabilities - Derivative instruments | 0 | ||
| Short-term financial payables | 55,803 | 55,803 | |
| Total | 321,287 | 321,287 |
Fair value of financial assets and liabilities is determined based on methods that can be classified under the various hierarchy levels of fair value, as set forth by IFRS 13. In particular, the Group has adopted internal valuation models that are generally used in finance and based on prices supplied by market operators, or prices taken from active markets.
All the financial instruments measured at fair value are classified in the three categories defined below:
Level 1: market prices;
Level 2: valuation techniques (based on observable market data);
Level 3: valuation techniques (not based on observable market data).
| Level 1 | Level 2 | Level 3 | 31.03.2020 | |
|---|---|---|---|---|
| Assets measured at fair value | ||||
| Financial assets - Equity investments | 5,535 | 605 | 6,140 | |
| Financial assets - Non-current securities | ||||
| Financial assets - Other non-current financial assets | ||||
| Financial assets - Other | 18,590 | 11,043 | 29,633 | |
| Financial assets - Loans | ||||
| Financial assets - Derivative instruments | ||||
| Total Assets measured at fair value | 24,125 | 11,043 | 605 | 35,773 |
The financial assets include the following:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Non-current financial assets | 6,140 | 9,465 | (3,325) |
| Current financial assets | 29,633 | 31,200 | (1,567) |
| Total | 35,773 | 40,665 | (4,892) |
The "Current financial assets" item consists of investments in corporate cash, represented by insurance policies and mutual investment funds. The change refers to the measurement at fair value for the period.
The "Non-current financial assets" item is composed of equity investments in other companies held by the Group, and is broken down as follows:
| 31.12.2019 | Fair value Adj. | Transaltion Effects | 31.03.2020 | |
|---|---|---|---|---|
| Listed equity investments | 8,860 | (3,463) | 138 | 5,535 |
| Unlisted equity investments | 605 | 605 | ||
| Total | 9,465 | (3,463) | 138 | 6,140 |
The amount of the "Listed equity investments" item is represented by the 1.2% investment in the share capital of the Japanese company Idec Corporation listed on the Tokyo Stock Exchange.
Details of trade and other receivables item as at 31 March 2020 and 31 December 2019 are as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Trade receivables | 71,943 | 73,164 | (1,220) |
| Contract assets | 3,744 | 5,361 | (1,618) |
| Bad debt provision | (1,324) | (1,217) | (107) |
| Trade receivables | 73,363 | 77,308 | (2,945) |
| Receivables from associates | 846 | 895 | (49) |
| Total Trade receivables | 74,363 | 78,203 | (3,840) |
| Other receivables - current accrued income and prepaid expenses | 24,896 | 24,924 | (28) |
| Other receivables - non-current accrued income and prepaid expenses | 1,554 | 1,334 | 220 |
| Total Other receivables - accrued income and prepaid expenses | 26,450 | 26,258 | 192 |
| Trade and other receivables - Non-current | 1,554 | 1,334 | 220 |
| Trade and other receivables - current | 99,259 | 103,127 | (3,868) |
The "Trade receivables" item as at 31 March 2020, gross of bad debt provisions, amounted to €74,363 thousand, representing a decrease of 4.9%. As at 31 March 2020, factored trade receivables amounted to €26,483 thousand (compared to €36,566 thousand at the end of 2019). Trade receivables from associates arise from commercial transactions carried out at arm's length conditions.
The detail of the "Other receivables - accrued income and prepaid expenses" item is shown below:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Other short-term receivables | 2,706 | 2,311 | 395 |
| Other long-term receivables | 1,554 | 1,334 | 220 |
| VAT receivables | 17,514 | 18,534 | (1,020) |
| Accrued income and prepaid expenses | 4,676 | 4,079 | 597 |
| Total | 26,450 | 26,258 | 192 |
The "Accrued income and prepaid expenses" item is mainly composed of insurance, as well as hardware and software fees.
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Raw and ancillary materials and consumables | 47,081 | 41,754 | 5,327 |
| Work in progress and semi-finished products | 20,315 | 23,582 | (3,267) |
| Finished products and goods | 35,916 | 37,585 | (1,669) |
| Total | 103,312 | 102,921 | 391 |
Inventories are disclosed net of an obsolescence provision totalling €10,238 thousand as at 31 March 2020 (€10,121 thousand as at 31 December 2019) and are substantially in line with the previous year.
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Tax receivables | 25,657 | 24,421 | 1,236 |
| of which from parent company | 12,742 | 12,742 | - |
| Tax payables | (24,778) | (25,822) | 1,044 |
| of which to parent company | (15,913) | (15,913) | - |
| Total | 879 | (1,401) | 2,280 |
As at 31 March 2020, the "Tax receivables" item amounted to €25,657 thousand, up €1,236 thousand compared to the end of 2019 (€24,421 thousand as at 31 December 2019). The receivables for IRES tax from the parent company Hydra S.p.A., equal to €12,742 thousand (€12,742 thousand as at 31 December 2019 are classified under this item.
The "Tax payables" item amounted to €24,778 thousand as at 31 March 2020, down €1,044 thousand (€25,822 thousand as at 31 December 2019). The payables for IRES tax to the parent company Hydra S.p.A., generated within the tax consolidation regime and equal to €15,913 thousand (€15,913 thousand as at 31 December 2019) are classified under this item.
The detail of equity accounts is shown below, while changes in shareholders' equity are reported in the specific statement:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Share capital | 30,392 | 30,392 | |
| Share premium reserve | 111,779 | 111,779 | |
| Treasury shares held in portfolio | (17,583) | (15,113) | (2,470) |
| Share capital and capital reserves | 124,588 | 127,058 | (2,470) |
| Translation reserve | 32,959 | 26,530 | 6,429 |
| Other reserves | 2,505 | 5,777 | (3,272) |
| Retained earnings | 244,806 | 194,527 | 50,279 |
| Profit/(loss) for the period | (4,265) | 50,279 | (54,544) |
| Total consolidated Shareholders' Equity | 400,593 | 404,171 | (3,578) |
As at 31 March 2020, the share capital amounted to €30,392 thousand, representing the share capital, entirely subscribed and paid by the Parent Company Datalogic S.p.A.. The share capital comprises a total number of ordinary shares of 58,446,491, including 1,370,337 held as treasury shares, for a counter-value of €17,583 thousand, making the number of outstanding shares at that date 57,076,154. The shares have a nominal unit value of €0.52.
As at 31 March 2020, changes in other reserves are broken down as follows:
Financial payables are broken down as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Non-current financial payables | 116,794 | 115,578 | 1,216 |
| Current financial payables | 55,803 | 54,099 | 1,704 |
| Total | 172,597 | 169,677 | 2,920 |
The breakdown of this item is detailed below:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Borrowings from Bank | 157,715 | 157,527 | 188 |
| Others | 1,497 | 1,497 | |
| Financial payables IFRS 16 | 11,941 | 10,061 | 1,880 |
| Payables to factoring companies | 1,239 | 1,868 | (629) |
| Bank overdrafts | 205 | 221 | (16) |
| Total | 172,597 | 169,677 | 2,920 |
Some borrowing contracts envisage the compliance, by the Group, with some financial covenants, measured every six months as at 30 June and as at 31 December, as summarised in the following table:
| Bank | Company | Covenants | Frequency | Reference statements |
|
|---|---|---|---|---|---|
| Club Deal | Datalogic SpA | NFP/EBITDA | 2.75 | Semi-annual | Consolidated |
| E.I.B. | Datalogic SpA | NFP/EBITDA | 2.75 | Semi-annual | Consolidated |
Deferred tax assets and liabilities result both from positive items already recognised in the income statement and subject to deferred taxation under current tax regulations and temporary differences between recorded assets and liabilities and their relevant taxable value.
Deferred tax assets are accounted for based on assumptions of the future recoverability of the temporary differences that originated them, that is based on economic and fiscal strategic plans.
Temporary differences that generate deferred tax assets are mainly tax losses and taxes paid abroad, provisions for risk and charges and foreign exchange rate translation. Deferred tax liabilities are mainly due to temporary differences for adjustments to exchange rates and statutory and fiscal differences of amortisation/depreciation plans related to tangible and intangible assets.
The total of net deferred taxes is broken down as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Deferred tax assets | 47,897 | 43,572 | 4,325 |
| Deferred tax liabilities | (18,275) | (17,819) | (456) |
| Net deferred taxes | 29,622 | 25,753 | 3,869 |
Change in deferred taxes is mainly due to the release of deferred taxes recognised on incomes become taxable over the year, represented by gains on exchange rates and dividends from investee companies, as well as by recognition of deferred tax assets over tax losses of Italian companies.
The breakdown of changes in the "Post-employment benefits" item as at 31 March 2020 and 31 March 2019 is shown below:
| 2020 | 2019 | |
|---|---|---|
| 1 January | 7,026 | 6,541 |
| Accrual | 445 | 571 |
| Payments | (361) | (163) |
| Other movements | 6 | |
| Social security receivables for post-employment benefits | (123) | (315) |
| 31 March | 6,987 | 6,640 |
The breakdown of the "Provisions for risks and charges" item is as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Provisions for risks and charges, current | 4,316 | 4,273 | 43 |
| Provisions for risks and charges, non-current | 4,923 | 4,916 | 7 |
| Total | 9,239 | 9,189 | 50 |
The detailed breakdown of and changes in this item are presented below:
| 31.12.2019 | Increases | Foreign exchange | 31.03.2020 | |
|---|---|---|---|---|
| gains/losses | ||||
| Product warranty provision | 8,305 | 2 | 8,307 | |
| Others | 885 | 48 | 933 | |
| Total | 9,189 | 48 | 2 | 9,239 |
The "Product warranty provision" item covers the estimated cost of repairing products sold up to 31 March 2020 and covered by a warranty period. It amounts to €8,307 thousand (of which €4,633 thousand long-term) and is considered sufficient in relation to the specific risk it covers.
The "Others" item includes primarily allocations made by possible tax liabilities, labour disputes and Agents' severance indemnity. Some irrelevant disputes related to the Group are currently in place. Their risk is assessed by experts and no allocations were made in relation to them, as provided for by IAS 37.
The breakdown of trade and other payables is summarised in the following table:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Trade payables | 83,506 | 104,193 | (20,687) |
| Contract liabilities - customer advances | 910 | 1,648 | (738) |
| Trade payables | 84,416 | 105,841 | (21,451) |
| Payables to associates | 63 | 55 | 8 |
| Payables to related parties | 112 | 133 | (21) |
| Total Trade payables | 84,591 | 106,029 | (21,438) |
| Other payables - current accrued liabilities and deferred income | 48,477 | 48,124 | 353 |
| Other payables - non-current accrued liabilities and deferred income | 15,797 | 16,684 | (887) |
| Total Other payables - accrued liabilities and deferred income | 64,274 | 64,808 | (534) |
| Less: non-current portion | 15,797 | 16,684 | (887) |
| Current portion | 133,068 | 154,153 | (21,085) |
Trade payables amounted to €84,591 thousand, down by €21,250 thousand compared to the previous year.
The detailed breakdown of this item is as follows:
| 31.03.2020 | 31.12.2019 | Change | |
|---|---|---|---|
| Non-current accrued liabilities and deferred income | 15,797 | 16,684 | (887) |
| Other short-term payables: | 28,605 | 27,134 | 1,471 |
| Payables to employees | 20,739 | 17,883 | 2,856 |
| Payables to pension and social security agencies | 5,886 | 6,382 | (496) |
| Other payables | 1,980 | 2,869 | (889) |
| VAT payables | 2,721 | 3,673 | (952) |
| Current accrued liabilities and deferred income | 17,151 | 17,317 | (166) |
| Total | 64,274 | 64,808 | (534) |
Payables to employees represents the amount due for salaries and vacations accrued by employees as at 31 March 2020. The item "Accrued liabilities and deferred income" is mainly composed of deferred income related to multi-annual maintenance contracts.
Revenues divided by type are shown in the following table:
| Quarter ended | |||
|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | |
| Revenues from sale of products | 114,994 | 135,564 | (20,570) |
| Revenues from services | 9,174 | 9,083 | 91 |
| Total Revenues | 124,168 | 144,647 | (20,479) |
In the first quarter of 2020, consolidated net revenues amounted to €124,168 thousand, down by 14.2% compared to €144,647 thousand in the same period of 2019.
In the first quarter of 2020, the Datalogic division reported revenues amounting to €115,252 thousand, with a negative performance in all geographical areas. The business segments that contribute the most as regards revenues over the period are Retail, Manufacturing and Channel. The segments that reported the best performances in terms of growth are OEM and GCO.
The Group's revenues, divided by recognition method and business segment, are broken down as follows:
| Datalogic | Solution Net | Informatics | Adjustments | 31.03.2020 | |
|---|---|---|---|---|---|
| System | |||||
| Revenues broken down by recognition | |||||
| method | |||||
| Revenues from the sale of goods and services - | |||||
| point in time | 104,359 | 955 | 3,195 | (793) | 107,716 |
| Revenues from the sale of goods and services - | |||||
| over the time | 10,893 | 4,567 | 992 | 16,452 | |
| Total | 115,252 | 5,522 | 4,187 | (793) | 124,168 |
| Datalogic | Solution Net System |
Informatics | Adjustments | 31.03.2019 | |
|---|---|---|---|---|---|
| Revenues broken down by recognition method |
|||||
| Revenues from the sale of goods and services - point in time |
123,491 | 379 | 3,628 | (757) | 126,741 |
| Revenues from the sale of goods and services - over the time |
12,156 | 5,086 | 664 | 17,906 | |
| Total | 135,647 | 5,465 | 4,292 | (757) | 144,647 |
The Group recognises revenues from the sale of goods and services in a specific moment, when the control of the assets has been transferred to the customer, generally upon delivery of the good or the rendering of the service.
Conversely, revenues are generally recognised over time, based on the stage of completion of contract performance obligations. This item includes revenues resulting from contracts and postponement contracts related to a multi-annual warranty.
| Datalogic | Solution Net System |
Informatics | Adjustments | 31.03.2020 | |
|---|---|---|---|---|---|
| Revenues broken down by type | |||||
| Sale of goods | 107,514 | 5,176 | 3,001 | (697) | 114,994 |
| Sale of services | 7,738 | 346 | 1,186 | (96) | 9,174 |
| Total | 115,252 | 5,522 | 4,187 | (793) | 124,168 |
| Datalogic | Solution Net System |
Informatics | Adjustments | 31.03.2019 | |
|---|---|---|---|---|---|
| Revenues broken down by type | |||||
| Sale of goods | 127,959 | 4,829 | 3,964 | (757) | 135,995 |
| Sale of services | 7,688 | 636 | 328 | 8,652 | |
| Total | 135,647 | 5,465 | 4,292 | (757) | 144,647 |
| Quarter ended | ||||
|---|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | ||
| Cost of goods sold | 66,568 | 74,496 | (7,928) | |
| Operating costs | 59,962 | 56,456 | 3,507 | |
| Research and Development expenses | 17,056 | 14,330 | 2,726 | |
| Distribution expenses | 29,200 | 29,106 | 94 | |
| General and Administrative expenses | 13,142 | 12,473 | 670 | |
| Other operating expenses | 564 | 547 | 17 | |
| Total | 126,530 | 130,952 | (4,421) |
This item amounted to €66,568 thousand, down by 10.6% compared to the same period of 2019. The percentage on revenues increased by 2.1% and amounted to 53.6% (51.5% in the same period of 2019).
Operating costs increased by 6.2%, from €56,456 thousand to €59,962 thousand. The percentage on turnover increased from 39.0% to 48.3%, reporting a 9.3% worsening. In particular:
The breakdown of "Other operating expenses" is as follows:
| Quarter ended | |||||
|---|---|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | |||
| Non-income taxes | 493 | 250 | 243 | ||
| Provision risk accrual | 6 | 6 | 0 | ||
| Accrual/(Releases) for doubtful accounts | 0 | 5 | (5) | ||
| Cost charge-backs | 60 | 247 | (187) | ||
| Loss on disposal of fixed assets | 1 | 39 | (38) | ||
| Others | 4 | 0 | 4 | ||
| Total | 564 | 547 | 17 |
The following table provides the details of total costs (cost of goods sold and total operating costs) by type:
| Quarter ended | |||
|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | |
| Purchases | 47,746 | 65,707 | (17,962) |
| Change in inventories | (661) | (10,561) | 9,901 |
| Labour cost | 44,876 | 46,429 | (1,553) |
| Amortisation, depreciation and write-downs | 7,299 | 6,625 | 674 |
| Goods receipt and shipment expenses | 3,741 | 4,605 | (864) |
| Travel and meetings expenses | 2,298 | 3,509 | (1,211) |
| Technical, legal and tax advisory consultancies | 2,837 | 1,746 | 1,091 |
| Subcontracted work | 2,598 | 1,455 | 1,143 |
| Quality certification expenses | 2,543 | 539 | 2,004 |
| Consumables and R&D material | 2,061 | 1,965 | 96 |
| EDP expenses | 1,540 | 1,108 | 432 |
| Marketing expenses | 1,352 | 1,969 | (617) |
| Repairs and warranty provision accrual | 1,233 | 351 | 882 |
| Building expenses | 872 | 570 | 302 |
| Royalties | 641 | 708 | (67) |
| Utilities | 572 | 599 | (27) |
| Directors' remuneration | 551 | 550 | 1 |
| Telephone expenses | 545 | 462 | 83 |
| Sundry service costs | 381 | 540 | (159) |
| Expenses for plant and machinery and other assets | 354 | 349 | 5 |
| Entertainment expenses | 310 | 200 | 110 |
| Vehicle expenses | 305 | 327 | (22) |
| Insurances | 273 | 188 | 85 |
| Commissions | 262 | 302 | (40) |
| Others | 2,002 | 710 | 1,292 |
| Total Cost of goods sold and operating costs | 126,530 | 130,952 | (4,422) |
Costs for purchases and change in inventories decreased by €8,061 thousand (-14.6%), compared to the same period of 2019, and remained unchanged in terms of percentage on total revenues.
Labour cost amounted to €44,876 thousand (€46,429 thousand in the same period of 2019) and reported a decrease of €1,553 thousand compared to the previous year (-3.3%). The change, compared to 31 March 2019, is due to the decrease in the average number of employees on a payroll during the period, mainly in Europe. The detailed breakdown of labour cost is as follows:
| Quarter ended | ||||
|---|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | ||
| Wages and salaries | 34,819 | 35,231 | (412) | |
| Social security charges | 7,056 | 7,699 | (643) | |
| Employee severance indemnities | 620 | 708 | (88) | |
| Retirement and similar benefits | 404 | 394 | 10 | |
| Other labour costs | 1,977 | 2,397 | (420) | |
| Total | 44,876 | 46,429 | (1,553) |
The increase of €674 thousand in the "Amortisation, depreciation and write-downs" is mainly due to higher investments both on production plants and on product development.
The "Goods receipt and shipment expenses" item, amounting to €3,741 thousand, recorded a 18.8% decrease, with a better percentage on turnover compared with the previous period (-0.2%).
Costs related to "Subcontracted work" amounted to €2,598 thousand and refer primarily to orders in the Solution Net Systems division. They increased compared to the same period of the previous year according to the progress of some projects.
Expenses related to "Technical, legal and tax advisory consultancies", amounting to €2,837 thousand, increased by €1,091 thousand compared to the same period of 2019. In particular, they are related to technical consultancies in R&D.
"Quality certification expenses", amounting to 2,543 thousand, increased by €2,004 thousand compared to the same period of 2019, following the certification of new products.
Pursuant to provisions as per Law no. 124/2017, art. 1, par. 125-129, it is noted that grants to research and development expenses are due primarily to the portion pertaining to the year of grants received on the following projects:
| Quarter ended | ||||
|---|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | ||
| Grants to research and development expenses | 626 | 0 | 626 | |
| Miscellaneous income and revenues | 492 | 1,092 | (600) | |
| Rents | 24 | 24 | 0 | |
| Income on disposal of fixed assets | 10 | 24 | (14) | |
| Contingent assets | 0 | 2 | (2) | |
| Others | 13 | (15) | 28 | |
| Total | 1,165 | 1,127 | 38 |
The "Grants to research and development expenses" item includes the tax receivables for R&D activities (€500 thousand).
| Quarter ended | |||
|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | |
| Financial Income/(Expenses) | (2,070) | 117 | (2,187) |
| Foreign exchange gains/losses | (3,023) | 1,504 | (4,527) |
| Bank expenses | (220) | (302) | 82 |
| Others | 21 | (29) | 50 |
| Total Financial Income/(Expenses) | (5,292) | 1,290 | (6,582) |
Due to the unfavourable trend of exchange rates and the negative result from cash investments, the Net Financial Income/(Expenses) item was negative for €5,292 thousand, a worsening of €6,582 thousand compared to a positive result of €1,290 thousand reported in the same period of 2019, mainly due to the unfavourable performance of foreign exchange differences and to the negative fair value of cash equivalents.
| Quarter ended | |||
|---|---|---|---|
| 31.03.2020 | 31.03.2019 | Change | |
| Profit/(Loss) before taxes from continuing operations | (6,489) | 16,111 | (22,600) |
| Income taxes | 1,002 | 3,001 | (1,999) |
| Deferred taxes | (3,226) | 543 | (3,769) |
| Total | (2,224) | 3,544 | (5,768) |
| Tax Rate | 34.3% | 22.0% | 12.3% |
The average tax rate came to 34.3% in the first quarter 2020 (22.0% as at 31 March 2019). The tax rate in the first quarter is positive due to the recognition of deferred tax assets over tax losses of Italian companies.
As required by IAS 33, information on data used to calculate the earning/loss per share is provided below. Basic EPS is calculated by dividing the profit and/or loss for the period, attributable to the shareholders of the Parent Company, by the weighted average number of ordinary shares outstanding during the reference period. For purposes of calculating diluted EPS, the weighted average number of outstanding shares is determined assuming translation of all potential shares with a dilutive effect (stock grant attributions), and the Group's net profit is adjusted for the post-tax effects of translation.
| Quarter ended | ||
|---|---|---|
| 31.03.2020 | 31.03.2019 | |
| Group profit/(loss) for the period | (4,265) | 12,567 |
| Average number of shares (thousands) | 58,025 | 57,469 |
| Basic earnings/(loss) per share | (0.07) | 0.22 |
| Group profit/(loss) for the period | (4,265) | 12,567 |
| Average number of shares (thousands) - Diluted effect | 57,851 | 57,477 |
| Diluted earnings/(loss) per share | (0.07) | 0.22 |
For the definition of "Related parties", see both IAS 24, approved by EC Regulation no. 1725/2003, and the Procedure for Transactions with Related Parties approved by the Board of Directors on 4 November 2010 (most recently amended on 24 July 2015), available on the Company's website www.datalogic.com.
The parent company of the Datalogic Group is Hydra S.p.A.
Intercompany transactions are executed as part of the ordinary operations and at arm's length conditions. Furthermore, there are other relationships with related parties, always carried out as part of ordinary operations and at arm's length conditions, of an immaterial amount and in accordance with the "OPC Procedure", chiefly with Hydra S.p.A. or entities under joint control (with Datalogic S.p.A.), or with individuals that carry out the coordination and management of Datalogic S.p.A. (including entities controlled by the same and close relatives).
Related-party transactions refer chiefly to commercial and real estate transactions (instrumental and non-instrumental premises for the Group under lease or leased) and advisory activities as well as to companies joining the scope of tax consolidation. None of these assumes particular economic or strategic importance for the Group since receivables, payables, revenues and costs referred to the related parties are not a significant proportion of the total amount of the financial statements.
Pursuant to Art. 5, par. 8, of the Consob Regulations, it should be noted that, over the period 01/01/2020 - 31/03/2020, the Company's Board of Directors did not approve any relevant transaction, as set out by Art. 3, par. 1, lett. b) of the Consob Regulations, or any transaction with minority related parties that had a significant impact on the Group's equity position or profit/(loss).
| Parent Company |
Company controlled by Chairman of BoD |
Not consolidated companies on a line by-line basis |
31.03.2020 | |
|---|---|---|---|---|
| Equity investments | - | - | 776 | 776 |
| Held-for-sale assets | - | - | - | - |
| Other trade receivables - accrued income and | - | 77 | 851 | 928 |
| prepaid expenses | ||||
| Receivables pursuant to tax consolidation | 12,742 | - | - | 12,742 |
| Financial receivables | - | - | - | - |
| Payables pursuant to tax consolidation | 15,913 | - | - | 15,913 |
| Trade payables | - | 112 | 80 | 192 |
| Financial payables | - | - | - | - |
| Operating expenses | - | 290 | 47 | 337 |
| Trade and other revenues | - | - | 1,168 | 1,168 |
| Financial income | - | - | - | - |
| Profits/(losses) from associates | - | - | - | - |
| 31.03.2020 | 31.03.2019 | Change | |
|---|---|---|---|
| Datalogic | 2,901 | 3,017 | (116) |
| Solution Net Systems | 36 | 42 | (6) |
| Informatics | 75 | 84 | (9) |
| Total | 3,012 | 3,143 | (131) |
The Chairman of the Board of Directors (Mr. Romano Volta)
Annexes
The undersigned Ms. Laura Bernardelli, as Manager in charge of drawing up the Datalogic S.p.A. 's accounting statements, hereby certify that, pursuant to provisions set out by paragraph 2 of Article 154 bis, of Legislative Decree no. 58 of 24 February 1998, the Consolidated Interim Report as at 31 March 2020 is consistent with the accounting records.
Datalogic Confidential Internal
Lippo di Calderara di Reno (BO), 14 May 2020
Datalogic S.p.A.
Manager in charge of drawing up the accounting statements Laura Bernardelli
The Consolidated Financial Statements include interim reports of the Parent Company and the companies that are directly and/or indirectly controlled by the Parent Company or on which the latter has a significant influence. Reports of subsidiaries were duly adjusted, as necessary, to render them consistent with the accounting criteria of the Parent Company. The companies included in the scope of consolidation as at 31 March 2020, consolidated on a line-by-line basis, are disclosed hereunder:
| Company | Registered office | Share capital | Total Shareholders' Equity (€/000) |
Profit/loss for the period (€/000) |
% Ownership |
|
|---|---|---|---|---|---|---|
| Datalogic S.p.A. | Bologna – Italy | Euro | 30,392,175 | 350,773 | (359) | |
| Datalogic Real Estate France Sas | Paris – France | Euro | 2,227,500 | 3,726 | 25 | 100% |
| Datalogic Real Estate UK Ltd. | Redbourn - England | GBP | 3,500,000 | 5,457 | 44 | 100% |
| Datalogic IP Tech S.r.l. | Bologna – Italy | Euro | 65,677 | 22,761 | 163 | 100% |
| Informatics Holdings, Inc. | Plano, Texas - USA | USD | 1,568 | 15,521 | 7 | 100% |
| Wasp Barcode Technologies Ltd | Redbourn - England | GBP | 0 | 231 | 9 | 100% |
| Datalogic (Shenzhen) Industrial Automation Co. Ltd. |
Shenzhen - China | CNY | 2,136,696 | 2,898 | (13) | 100% |
| Datalogic Hungary Kft | Fonyod - Hungary | HUF | 3,000,000 | 4,845 | 266 | 100% |
| Solution Net Systems, Inc. | Quakertown, PA - USA | USD | 5,912 | (141) | 100% | |
| Datalogic S.r.l. | Bologna – Italy | Euro | 10,000,000 | 147,514 | (9,457) | 100% |
| Datalogic Slovakia S.r.o. | Trnava - Slovakia | Euro | 66,388 | 7,887 | 1,459 | 100% |
| Datalogic USA Inc. | Eugene, OR - USA | USD | 100 | 230,907 | 1,048 | 100% |
| Datalogic do Brazil Comercio de Equipamentos e Automacao Ltda. |
Sao Paulo - Brazil | BRL | 20,257,000 | 580 | 211 | 100% |
| Datalogic Technologia de Mexico S.r.l. | Colonia Cuauhtemoc - Mexico |
MXN | 0 | (283) | (69) | 100% |
| Datalogic Scanning Eastern Europe GmbH | Darmstadt - Germany | Euro | 25,000 | 3,800 | 10 | 100% |
| Datalogic Australia Pty Ltd | Mount Waverley (Melbourne) - Australia |
AUD | 3,188,120 | 866 | 26 | 100% |
| Datalogic Vietnam LLC | Vietnam | USD | 3,000,000 | 28,066 | 910 | 100% |
| Datalogic Singapore Asia Pacific Pte Ltd. | Singapore | SGD | 3 | 3,418 | 279 | 100% |
| Suzhou Mobydata Smart System Co. Ltd | Suzhou, JiangSu - China | CNY | 161,224 | 3,679 | (125) | 51% |
| Company | Registered office | Share capital |
Total Shareholders' Equity (€/000) |
Profit/loss for the period (€/000) |
% Ownership |
|
|---|---|---|---|---|---|---|
| Specialvideo S.r.l. (*) | Imola - Italy | Euro | 10,000 | 840 | 205 | 40% |
| Datasensor Gmbh (*) | Otterfing - Germany | Euro | 150,000 | 29 | 29 | 30% |
| CAEN RFID S.r.l. (*) | Viareggio (LU) - Italy | Euro | 150,000 | 1,233 | 49 | 20% |
| R4I S.r.l. (*) | Benevento | Euro | 131,250 | 403 | (43) | 20% |
| Datalogic Automation AB (**) | Malmö, Sweden | SEK | 100,000 | 807 | 368 | 20% |
(*) data as at 31 December 2018
(**) data as at 30 June 2018
As envisaged by the International Accounting Standards regarding segment disclosure, in the case of reorganisation of business segments, comparative periods are restated to allow for a uniform comparison. Below are the restated results for the first quarter of 2019 following the reorganisation of the commercial function launched in 2020, in which some revenue allocation logics to geographical areas and business segments have been partially redefined with the aim of ensuring the supervision of the different types of end-user customers and partners alongside the geographical one of the Country.
| 31.03.2019 Reported |
Restatement | 31.03.2019 Restated |
|
|---|---|---|---|
| Italy | 11,765 | (412) | 11,353 |
| EMEAI (excluding Italy) | 71,850 | 454 | 72,304 |
| Total EMEAI | 83,615 | 42 | 83,657 |
| Americas | 46,272 | (172) | 46,100 |
| APAC | 14,760 | 130 | 14,890 |
| Total Revenues | 144,647 | - | 144,647 |
| 31.03.2019 Reported |
Restatement | 31.03.2019 Restated |
|
|---|---|---|---|
| Retail | 63,565 | (11,915) | 51,650 |
| Manufacturing | 38,885 | (10,341) | 28,544 |
| Transportation & Logistics | 14,744 | (659) | 14,085 |
| Healthcare | 5,427 | (476) | 4,951 |
| OEM | 224 | 224 | |
| Channel | 13,026 | 23,168 | 36,194 |
| Total Revenues | 135,647 | - | 135,647 |
Within the reorganization of the commercial function, the revenue allocation criteria were partially modified, by reallocating to the Channel segment a portion of the sales made to "partner" customers and previously classified under the industries according to a turnover prevalence criterion, as communicated by the distribution network. This category includes revenues not directly attributable to the other identified segments.
The new approach allows for an even more accurate measurement of the performance of individual segments, to which only revenues from direct sales to end customers are attributed according to the segment to which they belong. The rationale of the change in approach is based on the desire to make the measurement of market trends in individual sectors more accurate and timelier, in order to strengthen the effectiveness and timeliness of strategic go to market decisions.
The following table shows the reconciliation between EBITDA and Adjusted EBITDA as at 31 March 2020, compared with 31 March 2019.
| 31.03.2020 | 31.03.2019 | Change | % Change |
|||
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 7,330 | 5.9% | 21,647 | 15.0% | (14,317) | -66.1% |
| Cost of goods sold | 379 | 0.3% | 0 | 0.0% | 379 | n.a. |
| Research and development expenses | 102 | 0.1% | 0 | 0.0% | 102 | n.a. |
| Distribution expenses | 405 | 0.3% | 4 | 0.0% | 401 | n.a. |
| General and administrative expenses | 342 | 0.3% | 195 | 0.1% | 147 | 75.4% |
| Other operating income/(expenses) | 0 | 0.0% | 0 | 0.0% | 0 | n.a. |
| Non-recurring costs/revenues and write downs |
1,228 | 1.0% | 199 | 0.1% | 1,029 | 517.1% |
| EBITDA | 6,102 | 4.9% | 21,448 | 14.8% | (15,346) | -71.5% |
Non-recurring costs and revenues refer to income and charges recognised and borne mainly due to corporate and segment reorganisations started in 2019, in addition to costs related to the Covid-19 emergency. The latter refer primarily to higher lockdown-related procurement and distribution costs, as well as costs of sanitation and purchase of workplace safety devices, penalties for cancellation of trade fairs and events and internal personnel costs for the handling of emergency.
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