Earnings Release • Nov 10, 2020
Earnings Release
Open in ViewerOpens in native device viewer
The Board of Directors of De 'Longhi SpA today approved the results for the nine months of 2020 1
In the nine months the Group achieved:
In the third quarter, the Group achieved:
In the first 9 months of the year the company generated cash for € 173.7 million, increasing its net financial position at 30 September to € 451.5 million (from € 277.8 million at 31 December 2019). In the rolling 12 months, cash generation was € 350 million.
The CEO Massimo Garavaglia commented:"We have always been convinced of the strength of our brands and the potential of our products: beyond the contingent conditions of the market, we believe in the superiority of iconic products supported by investment campaigns that accompany their development in the medium term. Therefore we will continue to invest in innovation, marketing and communication and the current results confirm the correctness of our strategy. Looking at the shorter term, we still recognize many elements of uncertainty, which make reading the social and economic context still very difficult. With these results
1 ) The 2020 and 2019 figures are prepared in line with the application of the accounting standard IFRS 16. Furthermore, for comparative purposes, we may present so called "normalized" values, that is, comparable with those of the previous year, excluding the effects deriving from the reclassification of financial discounts (previously classified among financial charges and now included among commercial premiums and therefore netting the revenues).
2 ) "organic" stands for at constant exchange rates and excluding the derivative effect.
3 ) "adjusted" stands for gross of non-recurring expenses / income and of the notional cost of the stock option plan.
behind us, we revise our end-of-year guidance upwards and we are confident that we will be able to close 2020 with organic growth in revenues at a high single digit rate and an adjusted Ebitda increasing both in value and as a percentage of revenues. In the longer term, we remain focused on the execution of our strategy, according to the value creation model that has guided us so far".
The Board of Directors also, in light of the good performance of the Company and the De' Longhi Group in the current year, proposed the distribution of a dividend of € 0.54 per share drawn from the extraordinary reserve also formed with 2019 profits.
Finally, as part of the strategy of extending the average effective duration of the Group's debt portfolio and to take advantage of the good market conditions, the Board of Directors mandated the Chief Executive Officer to proceed with the preparatory activities for the issue of a second tranche of a non-convertible, unlisted and unrated bond loan for an amount equal to Euro 150 million with a duration of twenty years and maturity to 2041 which will be subscribed by leading US investors.
| 9 months (Jan. 1st - Sept. 30) | 3rd quarter (July 1st - Sept. 30) | |||||
|---|---|---|---|---|---|---|
| (Eur million unless otherwise specified |
9 months 2020 |
2020 "normalized" |
2019 | 2020 "normalized" |
2019 | |
| Revenues | 1473,2 | 1484,6 | 1303,7 | 580,9 | 458,2 | |
| change % | 13,0% | 13,9% | 26,8% | |||
| organic ch. % | 14,8% | 29,8% | ||||
| net ind. margin | 721,6 | 733,0 | 615,9 | 289,7 | 216,4 | |
| % of revenues | 49,0% | 49,4% | 47,2% | 49,9% | 47,2% | |
| adjusted Ebitda | 208,7 | 220,0 | 157,9 | 101,2 | 60,1 | |
| % of revenues | 14,2% | 14,8% | 12,1% | 17,4% | 13,1% | |
| Ebitda | 200,4 | 211,8 | 153,3 | 99,2 | 57,9 | |
| % of revenues | 13,6% | 14,3% | 11,8% | 17,1% | 12,6% | |
| Ebit | 142,5 | 153,9 | 96,2 | 79,9 | 38,2 | |
| % of revenues | 9,7% | 10,4% | 7,4% | 13,8% | 8,3% | |
| Net Income | 104,0 | 104,0 | 71,8 | 60,9 | 29,0 | |
| % of revenues | 7,1% | 7,0% | 5,5% | 10,5% | 6,3% | |
| adjusted Net Income | 110,4 | 110,4 | 75,5 | 62,7 | 30,8 | |
| % of revenues | 7,5% | 7,4% | 5,8% | 10,8% | 6,7% |
general outlook The third quarter of 2020 did not bring a substantial change in the social and macroeconomic climate compared to the first half: the uncertainty and tensions related to the spread of the Covid-19 epidemic continued to affect the markets and the behavior of consumers, producers and distributors.
At the same time, however, the increased attention of consumers towards the domestic sector has driven sales of household products, in particular related to food: the segments of coffee and food preparation and cooking have shown growth rates beyond expectations, amplified by the positive effects deriving from the support offered by the strength of brands and products and a careful long-term investment strategy in marketing and communication.
As to our organizational, the Group continued to implement all the prevention measures adopted in the previous months, in the peak phase of the pandemic, in order to protect the health of its employees and collaborators in the best possible way.
| NORMALIZED FIGURES - EUR million | 9 months 2020 |
chg. % | organic chg. % |
Q3-2020 | chg. % | organic chg. % |
|---|---|---|---|---|---|---|
| South West Europe North East Europe |
614,4 406,8 |
20,3% 13,0% |
20,0% 15,2% |
239,7 169,4 |
35,9% 26,4% |
35,6% 31,6% |
| EUROPE | 1.021,2 | 17,3% | 18,0% | 409,1 | 31,8% | 33,9% |
| MEIA (MiddleEast/India/Africa) | 78,5 | -16,2% | -14,9% | 33,6 | 3,0% | 7,7% |
| APA (Asia/Pacific/Americas) | 385,0 | 13,4% | 14,8% | 138,2 | 20,0% | 25,0% |
| TOTAL REVENUES | 1.484,6 | 13,9% | 14,8% | 580,9 | 26,8% | 29,8% |
On a normalized basis:
previous quarters, which were negative and still affecting the results of the 9 months (down -14.9% organic);
In the cooking and food preparation segment, not only was the great moment of kitchen machines confirmed - in high double-digit growth in the quarter and in the nine months - but in the quarter all the main product families grew, including those which had not yet shown a recovery in the previous quarters.
As for the remaining segments (comfort and home care), the nine months closed with growth, with the exception, however, as anticipated, of portable heating (due to unfavorable weather conditions) and ironing (the latter experiencing a strong recovery in the third quarter).
operating margins Moving on to margins, in normalized terms, a generalized improvement was confirmed in the nine months:
• the net industrial margin went from 47.2% to 49.4%, thanks to savings in the cost of the product and the contribution of the price-mix component;
• adjusted EBITDA amounted to € 220 million, up 39.3%; as a percentage of revenues, there was an improvement of 2.7 percentage points on revenues, from 12.1% to 14.8%, despite an increase in investments in media and communication to 11.6% of revenues in the third quarter (+0.8 percentage points compared to the third quarter of 2019);
In the third quarter, the increase in margins was even more marked, equal to +33.8% for the net industrial margin (€ 289.7 million), + 68.3% for the adjusted Ebitda (€ 101.2 million) and + 110% for net income (€ 60.9 million).
the balance sheet The aforementioned income development was at the origin of a particularly strong cash generation, equal to € 350 million in the 12 months, from September '19 to September 2020, and to € 173.7 million in the first nine months of this year, despite a significant and slightly increasing capital investment flow (€ 58.7 million against € 55.5 million in the nine months of 2019).
Net working capital decreased by € 96.7 million from the beginning of the year, mainly due to the trend of collections from customers and the increase in payables to suppliers. In relation to rolling revenues, net working capital decreased to 9.8% from 15.2% at the end of 2019 and from 18.6% at the end of September 2019.
The dynamics described led to a marked strengthening of the net financial position which stood at € 451.5 million at 30 September, with a positive net position towards banks and lenders of € 516.7 million.
| at 30.09.2020 | at 31.12.2019 | at 30.09.2019 | ||||||
|---|---|---|---|---|---|---|---|---|
| EUR million | EUR million | EUR million | ||||||
| 451,5 | 277,8 | 101,5 | ||||||
| 173,7 | ||||||||
| 350,0 | ||||||||
| 516,7 | 357,4 | 180,9 | ||||||
| 159,3 | ||||||||
| 335,8 | ||||||||
| We recall that in the current year, in consideration of the growing difficulties of the country and the territory in the face of the spread of the pandemic, the Shareholders' Meeting resolved not to distribute dividends (which had been distributed for € 55.3 million in the previous year) and at the same time the Group provided financial support of € 3.1 million in favor of the local sanitary structures involved in the fight against the outbreak. Finally, in the nine months, the Company completed a buy-back of treasury shares for a total of € 14.5 million, in relation to the existing stock option plan. Other resolutions of the B.o.D. |
||||||||
| and to | ||||||||
| change in the 9 months change in the 12 months change in the 9 months change in the 12 months |
Prudential Group). The closing of the transaction is expected in April 2021. | As part of the strategy of extending the effective average duration of the Group's debt portfolio take advantage of the good market conditions, the Board of Directors mandated the Chief Executive Officer to proceed with the preparatory activities for the issue of a second tranche of a non-convertible, an amount equal to Euro 150 million with a duration of twenty years. The new issue, approved pursuant to Articles 2410 et seq. of the Italian Civil Code and with an expected nominal amount of Euro 150 million, will be subscribed by leading US institutional investors (part of the The BoD, in light of the good performance of the Company and the De 'Longhi Group in the current |
to renew the proposal to the Shareholders' Meeting for the distribution of a dividend of the same amount as that proposed at the time of approval of the financial statements at 31 December 2019 (equal to € 0.54 gross of withholding taxes for each share in circulation and excluding treasury shares in the Company's portfolio at detachment of the coupon, following the repurchases made on the market), since the reasons for caution at the basis of the non-distribution, at that time, of the accrued dividends, no longer exist.
Taking into account that as of today the De 'Longhi shares in circulation are equal to no. 150,537,956 and the Company holds no. 895,350 treasury shares, the total amount of the dividend is currently equal to Euro 80,807,007.24.
The dividend will be drawn from the extraordinary reserve also formed with 2019 profits.
The next Shareholders' Meeting will be held on December 15, 2020 and with dividend payable starting from 23 December 2020, with detachment of coupon no.20, on 21 December 2020 and with the socalled record date pursuant to art. 83-terdecies of Legislative Decree no. 58/98 on 22 December 2020.
No significant events occurred after the end of the third quarter.
Massimo Garavaglia, Group C.E.O. commented: "We have always been convinced of the strength of our brands and the potential of our products: beyond the contingent conditions of the market, we believe in the superiority of iconic products supported by investment campaigns that accompany their development in the medium term. Therefore we will continue to invest in innovation, marketing and communication and the current results confirm the correctness of our strategy. Looking at the shorter term, we still recognize many elements of uncertainty, which make reading the social and economic context still very difficult. With these results behind us, we revise our end-of-year guidance upwards and we are confident that we will be able to close 2020 with organic growth in revenues at a high single digit rate and an adjusted Ebitda increasing both in value and as a percentage of revenues. In the longer term, we remain focused on the execution of our strategy, according to the value creation model that has guided us so far."
The manager responsible for the preparation of the company's accounts, Stefano Biella, hereby declares, as per article 154 bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the company's accounts contained in this press release are fairly representing the accounts and the books of the company.
| for analysts, investors and the press |
Investor Relations: Fabrizio Micheli, Samuele Chiodetto T: +39 0422 4131 e-mail: [email protected] |
|---|---|
| on the web | http://www.delonghigroup.com/en/investor_relations |
| Euro million | 30.09.2020 | % on revenues |
30.09.2020 normalized |
% on revenues |
30.09.2019 | % on revenues |
|---|---|---|---|---|---|---|
| Net Revenues | 1,473.2 | 100.0% | 1,484.6 | 100.0% | 1,303.7 | 100.0% |
| chnage | 169.5 | 13.0% | 180.9 | 13.9% | ||
| Materials consumed and other production costs (services and production payroll costs) |
(751.6) | (51.0%) | (751.6) | (50.6%) | (687.8) | (52.8%) |
| Net industrial margin | 721.6 | 49.0% | 733.0 | 49.4% | 615.9 | 47.2% |
| Costs for services and other operating costs Labour cost (non industrial) |
(369.1) (143.9) |
(25.1%) (9.8%) |
(369.1) (143.9) |
(24.9%) (9.7%) |
(322.3) (135.7) |
(24.7%) (10.4%) |
| Ebitda before non recurring items | ||||||
| and stock option plan (adjusted | 208.7 | 14.2% | 220.0 | 14.8% | 157.9 | 12.1% |
| Ebitda) | ||||||
| Change | 50.7 | 32.1% | 62.1 | 39.3% | ||
| Other non recurring items / stock option plan |
(8.2) | (0.6%) | (8.2) | (0.6%) | (4.6) | (0.4%) |
| EBITDA | 200.4 | 13.6% | 211.8 | 14.3% | 153.3 | 11.8% |
| Amortization | (57.9) | (3.9%) | (57.9) | (3.9%) | (57.2) | (4.4%) |
| EBIT | 142.5 | 9.7% | 153.9 | 10.4% | 96.2 | 7.4% |
| Change | 46.3 | 48.2% | 57.7 | 60.0% | ||
| Net financial charges | (3.1) | (0.2%) | (14.5) | (1.0%) | (10.3) | (0.8%) |
| Profit before taxes | 139.4 | 9.5% | 139.4 | 9.4% | 85.9 | 6.6% |
| Taxes | (35.5) | (2.4%) | (35.5) | (2.4%) | (14.0) | (1.1%) |
| Net profit pertaining to the Group |
104.0 | 7.1% | 104.0 | 7.0% | 71.8 | 5.5% |
| Euro million | Q3 2020 (3 months) |
% | Q3 2020 normalized (3 months) |
% | Q3 2019 (3 months) |
% | normalized change |
nornalized change % |
normalized organic change |
|---|---|---|---|---|---|---|---|---|---|
| EUROPE | 405.0 | 70.2% | 409.1 | 70.4% | 310.4 | 67.8% | 98.7 | 31.8% | 33.9% |
| APA | 138.1 | 24.0% | 138.2 | 23.8% | 115.2 | 25.1% | 23.1 | 20.0% | 25.0% |
| MEIA | 33.5 | 5.8% | 33.6 | 5.8% | 32.6 | 7.1% | 1.0 | 3.0% | 7.7% |
| Total revenues | 576.6 | 100.0% | 580.9 | 100.0% | 458.2 | 100.0% | 122.7 | 26.8% | 29.8% |
| Euro million | 30.09.2020 (9 month) |
% | 30.09.2020 normalized (9 months) |
% | 30.09.2019 (9 months) |
% | normalized change |
nornalized change % |
normalized organic change |
|---|---|---|---|---|---|---|---|---|---|
| EUROPE | 1,010.2 | 68.6% | 1,021.2 | 68.8% | 870.6 | 66.8% | 150.6 | 17.3% | 18.0% |
| APA | 384.7 | 26.1% | 385.0 | 25.9% | 339.5 | 26.0% | 45.5 | 13.4% | 14.8% |
| MEIA | 78.3 | 5.3% | 78.5 | 5.3% | 93.6 | 7.2% | (15.2) | (16.2%) | (14.9%) |
| Total revenues | 1,473.2 | 100.0% | 1,484.6 | 100.0% | 1,303.7 | 100.0% | 180.9 | 13.9% | 14.8% |
| Euro million | 30.09.2020 | 30.09.2019 | 31.12.2019 |
|---|---|---|---|
| - intangible assets | 313.2 | 316.5 | 314.8 |
| - tangible assets | 311.3 | 314.8 | 315.1 |
| - financial assets | 32.8 | 31.3 | 30.2 |
| - deferred tax assets | 53.3 | 60.3 | 47.3 |
| Fixed assets | 710.7 | 722.9 | 707.4 |
| - inventories | 483.7 | 515.7 | 343.5 |
| - trade receivables | 244.2 | 251.6 | 437.4 |
| - trade payables | (411.4) | (307.0) | (365.8) |
| - other net current assets / (liabilities) | (94.3) | (72.5) | (96.3) |
| Net working capital | 222.1 | 387.8 | 318.8 |
| Non current liabilities | (119.0) | (108.6) | (113.5) |
| Net capital employed | 813.8 | 1.002.1 | 912.6 |
| Net debt / (cash) | (451.5) | (101.5) | (277.8) |
| Total shareholders' Equity | 1,265.3 | 1,103.5 | 1,190.5 |
| Total net debt /(cash) and shareholders' equity | 813.8 | 1.002.1 | 912.6 |
| Euro million | 30.09.2020 | 30.09.2019 | 31.12.2019 |
|---|---|---|---|
| Cash and cash equivalents | 912.2 | 464.5 | 731.5 |
| Other financial receivables | 171.1 | 54.4 | 102.4 |
| Current financial debt | (153.9) | (141.4) | (138.2) |
| Current net financial assets / (debt) | 929.4 | 377.5 | 695.7 |
| Non current net financial assets Non current net financial debt |
70.1 (547.9) |
- (276.0) |
10.7 (428.6) |
| Non current net financial assets / (debt) | (477.9) | (276.0) | (417.9) |
| Total Net Financial Position of which: |
451.5 | 101.5 | 277.8 |
| - Net financial position versus banks and other lenders | 516.7 | 180.9 | 357.4 |
| - lease related debt | (66.0) | (76.0) | (74.0) |
| - Net assets /(liabilities) other than bank debt (fair value of derivatives. financial liabilitiesfor business combinations and financial payables connected to pension funds) |
0.8 | (3.5) | (5.5) |
| Euro million | 30.09.2020 (9 months) |
30.09.2019 (9 months) |
31.12.2019 (12 months) |
|---|---|---|---|
| Cash flow from operations | 205.5 | 145.8 | 277.3 |
| Cash flow from working capital | 24.9 | (85.7) | (22.3) |
| Cash flow from investments | (58.7) | (55.5) | (75.8) |
| Normalized Operating cash flow | 171.6 | 4.6 | 179.1 |
| Cash flow from application of IFRS 16 | - | (77.0) | (77.0) |
| Operating cash flow | 171.6 | (72.4) | 102.2 |
| Dividends distributed | - | (55.3) | (55.3) |
| Cash flow from changes in Fair value and Cash flow hedge reserves | 0.4 | (3.1) | (1.7) |
| Cash Flow from shares buy back | (14.5) | - | - |
| Cash Flow from stock option exercise | 19.4 | - | - |
| Cash flow from other changes in the Net Equity | (3.2) | 4.1 | 4.5 |
| Cash flow from changes in the Net Equity | 2.1 | (54.3) | (52.5) |
| Net Cash Flow | 173.7 | (126.6) | 49.7 |
| Opening Net Financial Position | 277.8 | 228.1 | 228.1 |
| Closing Net Financial Position | 451.5 | 101.5 | 277.8 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.