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De'Longhi
Earnings Release • May 12, 2022
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Earnings Release
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Treviso, May 12, 2022 PRESS RELEASE
The Board of Directors of De' Longhi SpA approved today the consolidated results of the first quarter of 2022:
- revenues up 8.4% to € 735.5 million (+ 5.5% on a like-for-like basis1);
- an adjusted2 Ebitda of € 100.1 million, equal to 13.6% of revenues, comparing with 18.9% of Q1-2021 (but improving vs. the 10.7% of 2020);
- an Ebit of € 69.1 million, equal to 9.4% of revenues compared to 14.9% of the previous year 3;
- a net profit of € 50.6 million, equal to 6.9% of revenues;
- a positive net financial position of € 274.6 million, resulting from the contribution of the 12 months free cash flow (before dividends and acquisitions) of € 170.7 million.
" commented Massimo Garavaglia, Group CEO
1 The results for the first quarter of 2022 include the change of perimeter consisting of the consolidation of Eversys group, which was consolidated starting from 1st April 2021. As a result, in some cases "like-for-like" values, being comparable with the first quarter of 2021, i.e. excluding Eversys from the scope of consolidation, may be presented
2 "Adjusted" stands for excluding non-recurring income / charges and the notional cost of stock option plans.
3 The comparative data as at March 31, 2021 have been restated in accordance with IFRS 3, as a result of the definitive accounting of the business combination relating to Capital Brands.
| (Eur million unless otherwise specified |
Q1-2022 | Q1-2021 | change | change % |
|---|---|---|---|---|
| Revenues | 735.5 | 678.7 | 56.8 | 8.4% |
| net ind. margin | 375.6 | 355.1 | 20.5 | 5.8% |
| % of revenues | 51.1% | 52.3% | ||
| adjusted Ebitda | 100.1 | 128.6 | -28.6 | -22.2% |
| % of revenues | 13.6% | 18.9% | ||
| Ebitda | 93.5 | 121.7 | -28.2 | -23.2% |
| % of revenues | 12.7% | 17.9% | ||
| Ebit | 69.1 | 100.9 | -31.8 | -31.5% |
| % of revenues | 9.4% | 14.9% | ||
| Net Income | 50.6 | 75.4 | -24.7 | -32.8% |
| % of revenues | 6.9% | 11.1% |
In the last two years, the change in consumer habits, with a prevalence of "stay at home", and the consolidation of some trends already in place in the market, have favored the expansion of the small domestic appliance business globally.
In this first quarter of 2022, the De' Longhi Group was able to continue on its development path, despite the difficult comparison with the previous year, which had seen a first quarter up by almost 60% (on a like-for-like basis ), thanks in particular to the favorable evolution of the espresso coffee segment.
At the beginning of the year, however, the Group found itself facing some criticalities, arising globally, especially in the supply chain, which required an extraordinary effort in order to give continuity to the production and distribution of its own products in the reference markets.
In particular, in order to cope with the growing inflation dynamics affecting production and distribution costs in the last 12 months, the Group has implemented various mitigation measures, including production efficiency actions and a selective price increase strategy, with the aim of preserving the industrial margin from the negative impacts of these dynamics.
Finally, a further element of complication and concern, due to the effects it could have on consumption dynamics, is represented by the conflict between Russia and Ukraine, which led the Group to review the valuation of some assets relating to the Ukrainian market and to suspend all investments and the distribution of new supplies to Russia.
In the first quarter of 2022, revenues grew by 8.4%, reaching € 735.5 million. On a like-for-like basis, growth stood at 5.5%, with a contribution from currencies equal to 2.5 percentage points of growth.
The main geographic areas - with the exception of North-Eastern Europe - closed the quarter in positive territory.
| EUR million | Q1 - 2022 | var. % | var. % at constant FX |
|---|---|---|---|
| South West Europe | 284.5 | 3.9% | 3.5% |
| North East Europe EUROPE |
170.0 454.5 |
-7.1% -0.5% |
-6.9% -0.7% |
| Americas | 132.9 | 32.3% | 24.2% |
| MEIA (MiddleEast/India/Africa) | 59.4 | 13.8% | 6.9% |
| Asia-Pacific | 88.8 | 27.7% | 20.1% |
| TOTAL REVENUES | 735.5 | 8.4% | 5.7% |
At the reported level:
- South-western Europe grew by 3.9% in the period, thanks to the expansion of Germany at a double digit growth rate and a high single digit expansion of the Iberian region and Austria;
- North-eastern Europe recorded a negative performance, both due to the difficult geopolitical situation, which affected consumer sentiment in some countries, and due to the challenging basis of comparison with last year (as an example, the UK market which had recorded revenues up by + 93% on a like-for-like basis in the first quarter of 2021);
- the MEIA region closed the period with double-digit positive growth, thanks to the expansion of the main markets;
- the America region has accelerated the path of expansion, achieving significant double-digit growth thanks to the development of the coffee business and an early sales season of portable air conditioners;
- finally, in the Asia Pacific region, the double-digit growth was driven by the strong dynamics of Greater China as well as by a significant expansion of the other main markets in the area (Australia and New Zealand, Japan, South Korea).
- As regards the evolution of product segments, in the first quarter of 2022 the double digit growth of the coffee sector drove the expansion of the Group, accompanied by an increase in comfort and a decrease in food preparation.
More specifically, the coffee segment confirmed the solid growth trend highlighted in recent years, with a strong boost from the main countries of the Euro area, USA and Asia. Core products grew at a double-digit rate, despite the high level of turnover achieved in 2021, also supported by the launches of new products and the success of the global communication campaign that sees Brad Pitt as Ambassador of the De' Longhi brand.
A more diversified scenario for food preparation, which, though suffering from the challenging comparison with 2021, remains largely positive compared to the values achieved in the years 2020 and 2019. In this context, some categories such as food processors or deep-fryers maintained a positive trend compared to last year, while the kitchen machines family showed a decline compared to the important levels reached in 2021 (while remaining higher than the 2020 and 2019 values).
The contribution of the comfort segment (portable air conditioning and heating) was positive, thanks to an early sales season of portable air conditioners.
Finally, home care is negative with opposite trends for the two product families of cleaning (negative) and Braun branded ironing (positive).
Looking now at the evolution of margins in the first quarter:
- the net industrial margin, equal to € 375.6 million, stood at 51.1% of revenues compared to 52.3% last year. However, at constant exchange rates the margin improved slightly (to 52.6%). In particular, in the quarter, the impacts of cost inflation on raw materials and freight were only partially offset by the positive effect of price-mix;
- adjusted Ebitda amounted to € 100.1 million, equal to 13.6% of revenues (compared to 18.9% in 2021 and 10.7% in 2020 reported), down due to investments in communication and media (which accounted for 12.1% of revenues in the new perimeter compared to 10.5% of the previous year), higher operating and overhead costs and a negative exchange rate effect of € 8.4 million;
- EBITDA was € 93.5 million, or 12.7% of revenues, including a negative impact of € 6.6 million relating to non-recurring charges and the notional cost of the stock option plan;
- EBIT amounted to € 69.1 million, equal to 9.4% of revenues;
- finally, net income was € 50.6 million, with an incidence of 6.9% on revenues.
- Non-recurring expenses included a review, in relation to the recent geopolitical crisis in Ukraine, of the valuation of some current assets of the working capital held at the balance sheet date, for a negative amount of approximately € 5.1 million, in addition to the donation of € 1 million in favor of non-governmental organizations in support of the populations affected by the conflict in Ukraine.
- As to the balance sheet, the quarter was characterized by a dragging of the dynamics of increase in inventories seen in 2021 and by an increase in industrial investments linked to the new Romanian plant, all factors which led to a
temporary cash absorption and not representative of the overall trend. expected for the year.
At the end of the quarter, the Net Financial Position was positive for € 274.6 million, compared to € 425.1 million at the end of 2021 and to € 314.1 million at the end of March 2021.
The net position with banks and other lenders was positive for € 356.7 million (compared to € 505.9 million at the end of 2021).
| EUR million | 31.3.2022 | 31.12.2021 | change 3 months |
31.3.2021 | change 12 months |
|---|---|---|---|---|---|
| operating NWC | 334,7 | 199,7 | 135,0 | 253,1 | 81,6 |
| Net Equity | 1.632,3 | 1.570,6 | 61,7 | 1.372,8 | 259,5 |
| Net Financial Position | 274,6 | 425,1 | -150,5 | 314,1 | -39,5 |
| Net Bank Position | 356,7 | 505,9 | -149,1 | 386,9 | -30,2 |
| operating NWC / Revenues | 6,5% | 10,5% | -4,0% | 10,5% | -14,5% |
| EUR million | 3 months 2022 |
3 months 2021 | 12 months 2022 |
|---|---|---|---|
| Net Cash Flow | -150,5 | 86,2 | -39,5 |
| Dividends paid | 0,0 | 0,0 | -80,8 |
| Cash Flow from acquisitions | 0,0 | 0,0 | -129,4 |
| Free Cash Flow before dividends and acquisitions |
-150,5 | 86,2 | 170,7 |
However, having said the above, excluding the disbursements relating to dividends (€ 80.8 million) and acquisitions (€ 129.4 million), the 12-month Free Cash Flow was solid, equal to € 170.7 million.
More in detail, in the first quarter:
- capex amounted to € 56.8 million (an increase of € 36.9 million compared to the same quarter of 2021), including the disbursement of € 21 million for the acquisition of a new plant in Romania;
- the ratio of operating net working capital to 12 month rolling revenues stood at 10.2%, compared to 6.2% at the end of 2021 and 9.6% at the end of Q1-2021.
During today's meeting, the Board of Directors also acknowledged of the assessment by the Board of Statutory Auditors of the existence of independence requisites for all the Statutory Auditors, as required by art. 148, paragraph 3, of the TUF and the Corporate Governance Code.
There are no other significant events occurred after the end of the quarter.
In the words of Massimo Garavaglia, CEO:
"
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. It should be noted that the audit of the Group 2021 consolidated financial statements is still ongoing.
Investor Relations: Fabrizio Micheli, Samuele Chiodetto T: +39 0422 4131 e-mail: [email protected]
Media relations: Mattia Rosati T: +39 0422 4131 e-mail: [email protected]
www.delonghigroup.com
| Euro million | 31.03.2022 | % of revenues |
31.03.2022 at constant perimeter |
% of revenues |
31.03.2021 | % of revenues |
|---|---|---|---|---|---|---|
| Net revenues | 735.5 | 100.0% | 716.0 | 100.0% | 678.7 | 100.0% |
| change | 56.8 | 8.4% | 37.3 | 5.5% | ||
| Materials consumed and other production costs (services and production payroll costs) |
(359.9) | (48.9%) | (350.4) | (48.9%) | (323.6) | (47.7%) |
| Net industrial margin | 375.6 | 51.1% | 365.6 | 51.1% | 355.1 | 52.3% |
| Costs for services and other operating costs |
(210.7) | (28.6%) | (209.1) | (29.2%) | (170.1) | (25.1%) |
| Labour cost (non industrial) | (64.8) | (8.8%) | (61.8) | (8.6%) | (56.3) | (8.3%) |
| EBITDA before non recurring items and stock option plan (Adjusted Ebitda) |
100.1 | 13.6% | 94.7 | 13.2% | 128.6 | 18.9% |
| Change | (28.6) | (22.2%) | (33.9) | (26.4%) | ||
| Other non recurring items / stock option plan |
(6.6) | (0.9%) | (6.6) | (0.9%) | (6.9) | (1.0%) |
| EBITDA | 93.5 | 12.7% | 88.1 | 12.3% | 121.7 | 17.9% |
| Amortization | (24.4) | (3.3%) | (23.1) | (3.2%) | (20.8) | (3.1%) |
| EBIT | 69.1 | 9.4% | 65.0 | 9.1% | 100.9 | 14.9% |
| Change | (31.8) | (31.5%) | (35.8) | (35.5%) | ||
| Net Financial Charges | (2.6) | (0.4%) | (2.5) | (0.4%) | (3.6) | (0.5%) |
| Profit before taxes | 66.5 | 9.0% | 62.5 | 8.7% | 97.3 | 14.3% |
| Taxes | (15.7) | (2.1%) | (17.1) | (2.4%) | (21.9) | (3.2%) |
| Net Income | 50.8 | 6.9% | 45.4 | 6.3% | 75.4 | 11.1% |
| Net profit / (loss) pertaining to minorities | 0.2 | 0.0% | - | 0.0% | - | 0.0% |
| Net profit / (loss) pertaining to the Group |
50.6 | 6.9% | 45.4 | 6.3% | 75.4 | 11.1% |
| Euro million | 1 st quarter 2022 |
% | 1 st quarter 2022 |
% | 1 st quarter 2021 |
% | change | change % | organic change % |
|---|---|---|---|---|---|---|---|---|---|
| at constant perimeter |
at constant perimeter |
at constant perimeter |
at constant perimeter |
||||||
| Europe | 454.5 | 61.8% | 445.4 | 62.2% | 456.6 | 67.3% | (11.3) | (2.5%) | (2.4%) |
| America | 132.9 | 18.1% | 125.6 | 17.5% | 100.4 | 14.8% | 25.2 | 25.1% | 16.5% |
| Asia Pacific | 88.8 | 12.1% | 86.3 | 12.1% | 69.5 | 10.2% | 16.8 | 24.2% | 17.0% |
| MEIA | 59.4 | 8.0% | 58.7 | 8.2% | 52.2 | 7.7% | 6.6 | 12.6% | 5.8% |
| Total revenues | 735.5 | 100.0% | 716.0 | 100.0% | 678.7 | 100.0% | 37.3 | 5.5% | 3.0% |
| Euro million | 31.03.2022 | 31.03.2021 | 31.12.2021 |
|---|---|---|---|
| - Intangible assets | 875.7 | 702.1 | 867.9 |
| - Tangible assets | 423.6 | 328.0 | 389.5 |
| - Financial assets | 12.3 | 33.7 | 11.9 |
| - Deferred tax assets | 74.7 | 66.9 | 74.3 |
| Fixed assets | 1,386.4 | 1,130.8 | 1,343.6 |
| - Inventories | 912.4 | 546.8 | 769.3 |
| - Trade receivables | 280.2 | 316.1 | 366.7 |
| - Trade payables | (857.9) | (609.8) | (936.2) |
| - Other net current assets / (liabilities) | (172.3) | (150.9) | (208.3) |
| Net working capital | 162.3 | 102.3 | (8.6) |
| Non current liabilities | (191.0) | (174.4) | (189.5) |
| Net capital employed | 1,357.7 | 1,058.7 | 1,145.5 |
| Net debt / (cash) | (274.6) | (314.1) | (425.1) |
| Total shareholders' equity | 1,632.3 | 1,372.8 | 1,570.6 |
| Total net debt/(cash) and shareholders' equity | 1,357.7 | 1,058.7 | 1,145.5 |
| Euro million | 31.03.2022 | 31.03.2021 | 31.12.2021 |
|---|---|---|---|
| Cash and cash equivalents | 893.8 | 805.7 | 1.026.1 |
| Other financial receivables | 301.3 | 232.9 | 302.1 |
| Current financial debt | (324.6) | (255.6) | (292.6) |
| Current net financial assets / (debt) | 870.4 | 783.0 | 1.035.6 |
| Non current net financial assets Non current net financial debt Non current net financial assets /(debt) |
71.8 (667.6) (595.8) |
75.0 (543.9) (468.8) |
70.5 (681.0) (610.5) |
| Total Net Financial Position | 274.6 | 314.1 | 425.1 |
| of which: | |||
| - Net financial position versus banks and other lenders | 356.7 | 386.9 | 505.9 |
| - lease related debt | (75.0) | (65.4) | (75.9) |
| - Net assets /(liabilities) other than bank debt (fair value of derivatives, financial liabilitiesfor business combinations and financial payables connected to pension funds) |
(7.2) | (7.3) | (4.9) |
| Euro million | 31.03.2022 | 31.03.2021 | 31.12.2021 |
|---|---|---|---|
| 3 months | 3 months | 12 months | |
| Cash flow from operations | 99.3 | 122.7 | 496.9 |
| Cash flow from changes in working capital | (203.1) | (27.0) | 5.8 |
| Cash flow from investments | (56.8) | (19.8) | (132.3) |
| Operating cash flow | (160.6) | 75.9 | 370.3 |
| Acquisitions | - | - | (129.4) |
| Dividends distributed | - | - | (80.8) |
| Cash Flow from stock option exercise | - | 0.2 | 7.1 |
| Cash Flow from other changes in the Net Equity | 10.1 | 10.1 | 30.0 |
| Cash flow from changes in the net equity | 10.1 | 10.3 | (43.7) |
| Net Cash Flow | (150.5) | 86.2 | 197.1 |
| Opening Net Financial Position | 425.1 | 228.0 | 228.0 |
| Closing Net Financial Position | 274.6 | 314.1 | 425.1 |
