Earnings Release • Sep 10, 2020
Earnings Release
Open in ViewerOpens in native device viewer
| Informazione Regolamentata n. 0481-70-2020 |
Data/Ora Ricezione 10 Settembre 2020 16:34:24 |
MTA - Star | ||
|---|---|---|---|---|
| Societa' | : | El.En. | ||
| Identificativo Informazione Regolamentata |
: | 136793 | ||
| Nome utilizzatore | : | ELENN01 - Romagnoli | ||
| Tipologia | : | REGEM; 3.1; 1.2; 2.2 | ||
| Data/Ora Ricezione | : | 10 Settembre 2020 16:34:24 | ||
| Data/Ora Inizio Diffusione presunta |
: | 10 Settembre 2020 16:34:26 | ||
| Oggetto | : | The Bod of El.En. releases the consolidated 2020 six months financial report |
||
| Testo del comunicato |
Vedi allegato.
3.1 2.2. 1.2 REGEM
Press release
Firenze, September 10th , 2020 – The Board of Directors of El.En. S.p.A., leader on the laser market and listed on the STAR Segment of the Italian Stock Exchange, met today and approved the six months financial report as of June 30, 2019.
In the most challenging situation ever faced, the six month results testify the solidity of the Group has in its technical, financial and operational structures. We proved over the years the ability to brilliantly grow, the ability to resist with determination to adverse conditions without sacrificing the potential for future growth surfaced in recent months. The results show a decrease compared to those recorded in the first half of 2019 and to our growth plans, for reasons entirely attributable to the effects of Covid 19.
The pandemic, with the escalation of preventive and restrictive measures, first in China and Italy, then in all Western countries, which were also forced to adopt measures of the same standard as the Chinese ones, significantly impacted the activities of the Group. To keep the production structures running, all safety and prevention measures to protect the health of workers were promptly adopted, also limiting where possible the physical presence of workers in the companies by allowing them to work remotely.
Gabriele Clementi, President of El.En. S.p.A. said: "Covid-19 with the interruption of business activities first in China and then in the rest of the world determined a socio-economic scenario of significant contraction from which we have not yet completely emerged. To date, the gradual recovery of the volumes of demand and financial results can be confirmed, also to a satisfactory extent given the circumstances. The recovery has not yet brought us back to the levels of last year, still uncertain and unstable due to the limitations still in place and the unpredictability of contagion developments in the various countries and its effects on the economy. Despite this difficult scenario, the results obtained by the Group once again confirm the solidity of our business model. Our market leadership and immediate ability to react allowed us to absorb the hit of a lockdown period that lasted months, managing to mitigate the negative effects as much as possible thanks to product diversification and geographical presence. We remain focused on our strategy of focusing on the key success factors on our markets, ensuring the safety of our employees and taking all the necessary actions to seize the expected recovery in the most effective way".
The first half of 2020 closed with consolidated revenues for 162,5 million euros vs. 188.5 million euros in HY 2019 with a -13,8% change; EBITDA was 14,5 million euros recording a variation of -29,7% and an impact on sales equal to approximately 8.9%, compared to the 20.6 million euros of the same period of 2019 which showed a 10,9%.
EBIT was 9,3 million euros, down compared to 16,7 million euros in the same period of 2019 with a -44,4% change. Net Income for the Group amounted to 6,4 euro million with a 37,4% decrease compared to the 10,2 million of euro in H1 2019.
During the lockdowns and even today, in order to actively maintain our relationships with customers, the marketing and sales functions used, with great creativity and excellent results, virtual media on the web, even creating events for the launch of new products. In the same period, the research and development activity was intense and very effective, both the technical one, aimed at preparing new innovative systems to be launched on the market, and the documentary and clinical one for obtaining the certifications required for the sale of medical systems all over the world. The conditions were thus created to best reap the benefits of the expected market demand recovery. In these two vital areas, as in the other corporate functions, the quality and determination of the human resources of the group emerged, allowing to achieve significant results even in conditions of objective difficulty and with a limitation of the available time due for recourse to payroll protection programs ("cassa ingterazione").
In the last months of the semester and the following months, we experienced a progressive improvement in the general conditions of demand on the markets on which the Group operates. Production was restarted, in some cases with good production rates, even higher than short-term expectations. Commercial promotion activities continues to be hampered by the inability to travel to many countries and by the almost total elimination of trade fair and congress activities. Although gradually recovering, the overall volume of demand remained weak, particularly in the medical sector where the main markets of the Group were strongly affected by the spread of the pandemic.
The medical sector in the first quarter was only marginally hurt by the effects of the pandemic, due to the lockdowns hitting Italy and China, only. The spread of the pandemic then led to measures to limit activities and circulation throughout the world and in particular in areas most relevant to the Group's activities, such as the United States of America, Russia, the Middle Eastern countries, Brazil and other European countries. The difficult market conditions in the second quarter therefore resulted in an approximately 10.5% decline in sales in the medical and aesthetic systems sector on a half-year basis compared to the corresponding period of 2019, slowing down compared to the growth of 7.4% registered in the first quarter of 2020.
The lower impact recorded in the aesthetic and service segments (decreasing by 7,7% and 6,7% respectively) stems from the positive trend in Japan, one of the most important markets in which the Group operates with its own branches since almost twenty years, a country that compared to others was only marginally affected by the pandemic and which, even in the most critical periods, did not adopt a full lockdown or imposed the closure of all beauty centers. Therefore, thanks also to some uniqueness of our offer of services and products for the Japanese market in the period, the first half of 2020 of the Japanese companies was particularly positive.
The surgery segment, where demand derives from the treatment of diseases independent of economic cycles, also suffered the impact of the downturn due to the sudden focus of all hospital activities on Covid patients and facilities, showed revenues for 19,9 million euro compared to the 23,3 million euro of the same period of 2019 with a -14.4% change. Only the easing of Covid tension in hospitals will allow a return to normal market dynamics.
The therapy segment recorded a turnover of 3,3 million euros compared to 5,4 million euros in the same period last year.
In the industrial applications sector, on a six-months basis the decline in turnover was approximately 18,5%, a strong recovery compared to the overall 43% decline recorded in the first quarter, benefiting in particular from the recovery in turnover in China in the sheet metal cutting segment. After the lockdown interruptions, the segment closed the half year with a turnover of 49
million euros compared to the 58,5 million euros of the same period of 2019, with a -16,3% change. In this segment, the Italian business of Cutlite Penta benefited from a high level of demand, with the Covid effect limited to the sheer period of forced closure following the Prime Ministerial Decree of 20 March 2020. Cutlite Penta then managed to record an increase in turnover for the six months. The sheet metal laser cutting sector is experiencing a rapid growth phase and, also due to the operational structures and variety of products, Cutlite Penta and our Chinese companies are well set to seize the growth opportunities offered by this specific market.
The marking sector underwent a trend similar to sheet metal cutting but in which the decline was wider in the second quarter, also showed a decrease in turnover in H1 2020 with a 17,7% change with sales of about 7,6 million euros compared to 9,2 million euros of 2019. Similarly to the other industrial segments, the laser sources segment was also penalized, but the period of forced slowdown in activity was put to good use with the completion of some products and the improvement of their performance and with the completion of the production area dedicated in Calenzano to the development and manufacture of mid power CO2 laser sources.
The segment of conservation of artistic heritage recorded an upward trend in the half year. Among the masterpieces returned to better use thanks to our lasers in recent months we mention the statue of San Marco in Orsanmichele in Florence, an early work by Donatello.
At a geographical level, in the first six months of 2020 the decline in turnover was rather uniform in the various areas of the world. In the Rest of the World, the first half of 2020 showed a turnover of 104,9 million euros compared to 119,6 million euros in the same period of 2019, with a 12.2% since the loss of turnover on the Chinese market was partially balanced by the excellent performance of the Japanese and American markets.
The most pronounced decline was recorded in Europe, down by 18% to 30,1 million euros in sales compared to 36,8 million euros in the first six months of 2019. In Italy, the freezing of activities in the medical and professional beauty sectors medical weighed heavily and recorded a contraction of 14,5% with a turnover of 27,4 million euros compared to 32,1 million euros in H1 2019.
Gross Margin in H1 2020 was 59,877 thousand euros, showing a decrease of 19,5% compared to the 74,385 thousand euros of June 30, 2019, primarily due to the decrease in turnover. Gross margin on sales ratio decreased from 39,5% at 30 June 2019 to 36,8% at 30 June 2020. The decrease was due to a decrease of margins that the crisis has induced on both the medical and industrial sectors, more incisive in the industrial sector where the return to high volumes of production and sales was also accompanied by greater competitive pressure.
EBITDA was 14,5 million euros, down by 29,7% compared to 20,6 million euros in H1 2019, was affected by the lower turnover but also benefited from substantial cost reductions, both in commercial expenses given the blocking of international travel and trade fair and congress activities, as well as in personnel expenses where payroll protection programs (cassa integrazione) were used in Italy, France and Germany.
EBIT marked a positive balance of 9,3 million euros, down from the 16,7 million euros of June 30, 2019, with a 5,7% EBIT margin in H1 2020 compared to 8,9% in the same period of 2019.
Pre-tax profit showed a positive balance of 8,9 million of euro (16,9 million in 1H 2019). The tax burden for the period showed a total charge of 2,1 million and a tax rate of approximately 24%.
The Group's net profit amounted to 6,4 million euros, down by 37,4% compared to 10,2 million euros in H1 2019.
The net financial position of the Group remains positive and in the period decreased by approximately 33,5 million of euro, settling at approximately 27,9 million compared to 61,4 million at 31 December 2019 and slightly recovering on the 27,5 million of euro at March 31, 2020. The
cash absorption in the period was due to various factors. About 20 million were employed in the purchase of an important minority stake in Penta Laser Wenzhou, which became the parent company of the Group's activities in China in the industrial sector. The increase in net working capital involved an absorption of liquidity of approximately 20 million, mainly due to the increase in the value of inventories, in the presence of a large order book for which the needed purchases had been prepared timely manufacture according to the schedules that were disrupted by the pandemic. The investments in fixed assets amounted to approximately 4 million, down compared to the first half of 2019. The investments in the expansion of the production facilities were in fact lower than in previous years since most of the new structures have been completed or nearing completion.
In recent years, Chinese activities in the industrial sector underwent an extensive investment plan aimed at expanding production capacity and product development, for which demand is expected to grow. The group has great confidence in the medium-term prospects of this business unit, in the belief that the difficulties caused by the pandemic will be overcome, although not necessarily in a very short time.
On September 4th 2020 Cutlite Penta Srl entered into a preliminary contract for the purchase of a building adjacent to the company's premises located in Prato. The approximately 3.600 square meters plant will be purchased in 2021 for an amount of 4,6 million of euro. The larger area is essential to support the rapid growth recorded in the period, despite Covid.
The spread of the Covid-19 pandemic and the persistence of its effects on daily life and economy still remain very uncertain. After the period of acute crisis marked by the lockdowns, the gradual return to normality throughout the world brought a recovery in demand, in some cases with the consistency of a strong rebound. However, the overall situation of the markets on which the Group is active remains weak: it will not be possible to fill the gap with the 2019 results. We expect sales volumes and operating results to improve in the second half compared to the first half, but still at lower levels than those recorded in 2019. In the presence of current market conditions, trusting that there will be no further repercussions and new restrictions, we aim for the full 2020 year to contain within 10% the decrease in turnover compared to 2019, improving in the second half compared to the first the EBIT margin on sales.
The manager in charge of preparing the corporate accounting records, Enrico Romagnoli, declares, pursuant to paragraph 2, article 154-bis of the Consolidated Finance Law, that the accounting disclosures provided in this document correspond to the accounting records, books and entries.
As required by Consob, the Half yearly report as of June 30th , 2020 will be available for the public at our premises in Calenzano, at Borsa Italiana S.p.A., on our website www.elengroup.com ("Investor Relations / Documenti Finanziari / Relazioni e Bilanci / 2020") from September 10th , 2020 and on authorized storage website .
CONFERENCE CALL
On September 11, 2020 at 15:00 CET (14:00 GMT) (9:00 EST), EL.EN. Spa will hold a conference call with the financial community, to discuss the financial results of the Group. You can dial the following numbers: from Italy +39 02 8058811, +44 121 2818003 from the UK, the USA +1 718 7058794. Before the conference call, you can download the presentation slides from the Investor Relations page of the El.En. website: http://www.elengroup.com/it/investor-relations/presentazioni
El.En., an Italian company, is the parent of a high-.tech industrial group operating in the optoelectronics sector. Based on proprietary technology and multidisciplinary know-how, the El.En Group manufactures laser sources (gas, semiconductor, solid-state and liquid) and innovative laser systems for medical and industrial applications. The El.En. Group is the laser market leader in Italy and among the top operators in Europe. It designs, manufactures and sells worldwide:
- Medical laser equipment used in dermatology, cosmetics, physiotherapy, dentistry and gynecology;
- Industrial laser systems for applications ranging from cutting, marking and welding metals, wood, plastic and glass to decorating leather and textiles and restoring/conserving artwork;
- Laser systems for scientific research
EL.EN. has been listed on the Star (MTA) of Borsa Italiana. Its market capitalization amounts to Euro 432 million.
Cod. ISIN: IT0005188336 Code: ELN Listed on MTA Mkt cap.: 432 million of euro Cod. Reuters: ELN.MI Cod. Bloomberg: ELN IM
For further information:
El.En S.p.A. Investor Relator Enrico ROMAGNOLI - [email protected] Tel. +39 055 8826807
Financial Communication, IR and Press Office Bianca FERSINI MASTELLONI - [email protected] Paolo SANTAGOSTINO - [email protected] Silvia MARONGIU - [email protected] Tel. +39 06-69923324
| Income Statement | 30/06/2020 | Inc % | 30/06/2019 | Inc % | Var. % |
|---|---|---|---|---|---|
| Revenues | 162.521 | 100,0% | 188.450 | 100,0% | -13,76% |
| Change in inventory of finished goods and WIP | 11.417 | 7,0% | 4.985 | 2,6% | 129,01% |
| Other revenues and income | 1.971 | 1,2% | 1.119 | 0,6% | 76,07% |
| Value of production | 175.909 | 108,2% | 194.555 | 103,2% | -9,58% |
| Purchase of raw materials | 107.324 | 66,0% | 108.597 | 57,6% | -1,17% |
| Change in inventory of raw material | (4.579) | -2,8% | (4.722) | -2,5% | -3,03% |
| Other direct services | 13.287 | 8,2% | 16.295 | 8,6% | -18,46% |
| Gross margin | 59.877 | 36,8% | 74.385 | 39,5% | -19,50% |
| Other operating services and charges | 16.058 | 9,9% | 21.515 | 11,4% | -25,37% |
| Added value | 43.820 | 27,0% | 52.869 | 28,1% | -17,12% |
| Staff cost | 29.334 | 18,0% | 32.266 | 17,1% | -9,09% |
| EBITDA | 14.485 | 8,9% | 20.604 | 10,9% | -29,70% |
| Depreciation, amortization and other accruals | 5.197 | 3,2% | 3.891 | 2,1% | 33,57% |
| EBIT | 9.288 | 5,7% | 16.713 | 8,9% | -44,42% |
| Net financial income (charges) | (219) | -0,1% | 267 | 0,1% | |
| Share of profit of associated companies | (126) | -0,1% | (86) | 0,0% | 47,44% |
| Other non-operating income (charges) | 0 | 0,0% | 0 | 0,0% | |
| Income (loss) before taxes | 8.943 | 5,5% | 16.894 | 9,0% | -47,07% |
| Income taxes | 2.139 | 1,3% | 4.675 | 2,5% | -54,25% |
| Income (loss) for the financial period | 6.804 | 4,2% | 12.219 | 6,5% | -44,32% |
| Net profit (loss) of minority interest | 403 | 0,2% | 1.996 | 1,1% | -79,82% |
| Net income (loss) | 6.401 | 3,9% | 10.223 | 5,4% | -37,39% |
| Statement of financial position | 30/06/2020 | 31/12/2019 | Variation |
|---|---|---|---|
| Intangible assets | 4.728 | 4.834 | -106 |
| Tangible assets | 82.682 | 81.813 | 870 |
| Equity investments | 2.279 | 2.403 | -124 |
| Deferred tax assets | 7.545 | 6.641 | 904 |
| Other non-current assets | 15.359 | 15.276 | 83 |
| Total non current assets | 112.593 | 110.966 | 1.627 |
| Inventories | 112.346 | 97.037 | 15.309 |
| Accounts receivable | 85.401 | 92.026 | -6.625 |
| Tax receivables | 13.516 | 12.689 | 828 |
| Other receivables | 13.421 | 13.453 | -32 |
| Financial instruments | 0 | 2.127 | -2.127 |
| Cash and cash equivalents | 83.466 | 97.031 | -13.565 |
| Total current assets | 308.151 | 314.362 | -6.211 |
| Total Assets | 420.744 | 425.328 | -4.585 |
| Share capital | 2.548 | 2.538 | 10 |
| Additional paid in capital | 42.366 | 41.431 | 935 |
| Other reserves | 93.759 | 88.105 | 5.653 |
| Retained earnings / (accumulated deficit) | 65.805 | 64.337 | 1.469 |
| Net income / (loss) | 6.401 | 26.017 | -19.616 |
| Group shareholders' equity | 210.878 | 222.427 | -11.549 |
| Minority interest | 12.330 | 18.206 | -5.877 |
| Total shareholders' equity | 223.208 | 240.633 | -17.426 |
| Severance indemnity | 4.723 | 4.738 | -14 |
| Deferred tax liabilities | 1.985 | 2.032 | -47 |
| Reserve for risks and charges | 4.704 | 4.528 | 176 |
| Financial debts and liabilities | 31.157 | 21.116 | 10.041 |
| Other non current liabilities | 5.000 | 0 | 5.000 |
| Total non current liabilities | 47.569 | 32.413 | 15.156 |
| Financial liabilities | 24.395 | 16.706 | 7.689 |
| Accounts payable | 68.812 | 78.391 | -9.579 |
| Income tax payables | 2.314 | 3.507 | -1.193 |
| Other current payables | 54.447 | 53.677 | 769 |
| Total current liabilities | 149.967 | 152.282 | -2.315 |
| Total Liabilities and Shareholders' equity | 420.744 | 425.328 | -4.585 |
| Cash flow statement | 30/06/20 | 30/06/19 |
|---|---|---|
| Operating activity | ||
| Income (loss) for the financial period | 6.804 | 12.219 |
| Depreciations | 3.861 | 3.172 |
| Share of profit of associated companies | 126 | 86 |
| Stock Options | 124 | 356 |
| Severance indemnity | (52) | (20) |
| Reserve for risks and charges | 176 | 433 |
| Bad debt reserve | 955 | (432) |
| Deferred tax assets | (895) | (139) |
| Deferred tax liabilities | (47) | 57 |
| Inventories | (15.309) | (9.646) |
| Accounts receivable | 5.669 | (9.925) |
| Tax receivables | (828) | (568) |
| Other receivables | (39) | (414) |
| Accounts payable | (9.579) | 13.756 |
| Income tax payables | (1.193) | 1.250 |
| Other debts | 5.769 | 5.597 |
| Cash flow generated by operating activity | (4.457) | 15.782 |
| Investment activity | ||
| Tangible assets | (3.908) | (11.014) |
| Intangible assets | (205) | (246) |
| Equity investments, securities and other financial assets | 2.041 | (181) |
| Financial receivables | 70 | (229) |
| Cash flow generated by investment activity | (2.001) | (11.670) |
| Financing activity | ||
| Non current financial liabilities | 9.526 | 4.710 |
| Current financial liabilities | 7.692 | 1.497 |
| Capital increases | 945 | |
| Dividends paid | (114) | (8.692) |
| Acquisition of minority shares | (25.130) | |
| Cash flow generated by financing activity | (7.081) | (2.485) |
| Change in cumulative translation adjustment reserve and other no monetary changes | (26) | 337 |
| Increase/(decrease) in cash and cash equivalents | (13.565) | 1.965 |
| 97.031 | 80.966 | |
| Cash and cash equivalents at the beginning of the financial period | ||
| Cash and cash equivalents at the end of the financial period | 83.466 | 82.931 |
The El.En. Group uses some alternative performance indicators that are not identified as IFRS accounting measures, in order to better assess the Group's performance. Therefore criteria of determination applied by the group may not be homogeneous with that adopted by other groups and the value obtained may not be comparable.
These alternative performance indicators, determined in accordance with the Guidelines on Alternative Performance Indicators issued by ESMA / 2015/1415 and adopted by CONSOB with communication no. 92543 of December 3, 2015, refer only to the performance of the accounting period covered by this release and the periods to be compared.
The Group uses the following alternative performance indicators to evaluate the financial performance:
The Group uses as alternative performance indicators to evaluate their ability to cope with financial obligations:
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.