Interpump Group — Earnings Release 2017

Feb 14, 2018

Informazione Regolamentata n. 0159-6-2018		Data/Ora Ricezione 14 Febbraio 2018 12:01:53	MTA - Star
Societa'	:	INTERPUMP GROUP
Identificativo Informazione Regolamentata	:	99072
Nome utilizzatore	:	INTERPUMPN03 - MIRABELLI
Tipologia	:	REGEM
Data/Ora Ricezione	:	14 Febbraio 2018 12:01:53
Data/Ora Inizio Diffusione presunta	:	14 Febbraio 2018 12:01:53
Oggetto	:	Q4 2017 results & FY 2017 preliminary results
Testo del comunicato

Vedi allegato.

PRESS RELEASE

INTERPUMP GROUP APPROVES Q4 2017 RESULTS & PRELIMINARY FULL-YEAR 2017 DATA

FY 2017 PRELIMINARY RESULTS:

NET SALES: € 1,086.5 million (+17.7% compared to 2016)

EBITDA: € 248.6 million (+25.3%)

EBITDA/SALES: 22.9% (21.5% in 2016)

CONSOLIDATED NET PROFIT: € 135.6 million (+43.5%)

o/w € 5.9 mn due to the reassessment of US deferred tax assets & liabilities

FREE CASH FLOW: € 93.6 million (€ 89.9 million in 2016)

NET DEBT: € 273.5 million (€ 257.3 million at 31/12/2016) after € 89.1 million disbursements for acquisitions and € 22.3 million paid in dividends

Q4 2017 RESULTS:

NET SALES: € 267.8 million (+16.6% compared to Q4 2016)

EBITDA: € 56.8 million (+21.0%)

EBITDA/SALES: 21.2% (20.4% in Q4 2016)

CONSOLIDATED NET PROFIT: € 36.4 million (+74.1%)

o/w € 5.9 mn due to the reassessment of US deferred tax assets & liabilities

Chairman Fulvio Montipò: "Yet another record year has drawn to a close, the healthy underlying trends of organic growth and margin improvement are still going on"

Sant'Ilario d'Enza, 14 February 2018 – The Board of Directors of Interpump Group S.p.A. met today and approved the consolidated results for the fourth quarter and preliminary results for FY 2017.

FY 2017 PRELIMINARY RESULTS

Net Sales in the year totaled 1,086.5 million euro, an increase of 17.7% over the 922.8 million euro registered in 2016.

Sales by business sector and geographical area were as follows:

(€/000)	Italy	Rest of Europe	North America	Pacific Area	Rest of World	Total
2017
Hydraulics	153,133	240,636	163,944	63,339	69,862	690,914
Water-Jetting	37,900	141,490	130,473	52,254	33,516	395,633
Total	191,033	382,126	294,417	115,593	103,378	1,086,547
2016
Hydraulics	124,390	209,640	145,175	46,958	70,648	596,811
Water-Jetting	30,971	90,885	132,996	50,393	20,762	326,007
Total	155,361	300,525	278,171	97,351	91,410	922,818
Change, 2017/2016
Hydraulics	+23.1%	+14.8%	+12.9%	+34.9%	-1.1%	+15.8%
Water-Jetting	+22.4%	+55.7%	-1.9%	+3.7%	+61.4%	+21.4%
Total	+23.0%	+27.2%	+5.8%	+18.7%	+13.1%	+17.7%

The y/y growth in sales at unchanged perimeter was 12.2% for Hydraulics, 2.0% for Water-Jetting, and 8.6% for the whole Group, of which -0.7% due to the currency exchange which negatively impacted the year's sales for 7.1 million euro.

EBITDA amounted to 248.6 million euro (22.9% of sales) compared to 198.5 million euro of 2016 (21.5% of sales), an increase of 25.3%. The following table sets out EBITDA by business sector:

	2017 €/000	% on sales	2016 €/000	% on sales	Change
Hydraulics	144,563	20.9%	115,446	19.3%	+25.2%
Water-Jetting	104,090	26.2%	83,075	25.4%	+25.3%
Other	(5)	n.s.	(19)	n.s.	n.s.
Total	248,648	22.9%	198,502	21.5%	+25.3%

The negative impact of currency exchange on EBITDA was 2.3 million euro in the whole year.

Operating income (EBIT) amounted to 198.9 million euro (18.3% of sales) compared to 153.5 million euro in 2016 (16.6% of sales), an increase of 29.6%.

Consolidated Net Profit for the year was 135.6 million euro (94.5 million euro in 2016), up 43.5%. This figure incorporates the one-off € 5.9 million positive effect of reassessment of deferred tax assets & liabilities in the US, in light of the recent tax reform.

Basic earnings per share rose from 0.884 euro in 2016 to 1.255 euro in 2017.

Net cash flow from operating activities was 173.1 million euro (138.0 million euro in 2016), with a 25.5% increase. Free cash flow amounted to 93.6 million euro (89.9 million euro in 2016), with an increase of 4%.

Net debt at the end of the period was 273.5 million euro (257.3 million euro at 31 December 2016), after 89.1 million euro spent in acquisitions and 22.3 million euro paid in dividends. Additionally, the Group has commitments for the acquisition of stakes in subsidiaries valued at 50.3 million euro (42.8 million euro at 31/12/2016).

Capital employed increased from 977.6 million euro at 31 December 2016 to 1,088.4 million euro at 31 December 2017, mainly due to acquisitions made during the year. ROCE was 18.3% (15.7% in 2016). ROE was 17.7% (13.9% in 2016).

At 31 December 2017 Interpump Group S.p.A. had 1,561,752 treasury shares in its portfolio, representing 1.4344% of total share capital, purchased at an average cost of € 12.4967.

Q4 2017 RESULTS

Net Sales for the fourth quarter of 2017 totaled 267.8 million euro, an increase of 16.6% over the 229.8 million euro in the corresponding period of 2016.

Sales by business sector and geographical area were as follows:

(€/000)	Italy	Rest of Europe	North America	Pacific Area	Rest of World	Total
Q4 2017
Hydraulics	38,198	60,417	38,781	14,939	18,101	170,436
Water-Jetting	9,441	36,923	30,280	12,363	8,405	97,412
Total	47,639	97,340	69,061	27,302	26,506	267,848
Q4 2016
Hydraulics	33,258	48,596	35,050	14,970	18,693	150,567
Water-Jetting	8,512	22,164	29,704	12,894	5,955	79,229
Total	41,770	70,760	64,754	27,864	24,648	229,796
Change, 2017/2016
Hydraulics	+14.9%	+24.3%	+10.6%	-0.2%	-3.2%	+13.2%
Water-Jetting	+10.9%	+66.6%	+1.9%	-4.1%	+41.1%	+22.9%
Total	+14.1%	+37.6%	+6.7%	-2.0%	+7.5%	+16.6%

At unchanged perimeter, sales grew 12.2% in Hydraulics, were down 1% in Water-Jetting, and grew 7.7% in total. These data incorporate a negative currency effect of -3.7% in the quarter, with a negative impact on sales for 8.6 million euro.

EBITDA amounted to 56.8 million euro (21.2% of sales) compared to 46.9 million euro in the fourth quarter of 2016 (20.4% of sales), an increase of 21.0% despite a negative impact of currency exchange worth 2.6 million euro.

Consolidated Net Profit for the fourth quarter was 36.4 million euro (20.9 million euro in Q4 2016), up 74.1%. This figure benefits from the aforementioned one-off effect resulting from US deferred tax assets & liabilities.

Basic earnings per share rose from 0.196 euro in Q4 2016 to 0.337 euro in Q4 2017.

Pursuant to Article 65-bis, paragraph 2 and Article 82 of Consob Deliberation 11971/1999 as modified and supplemented, the Interim Report at 31 December 2017 is available to the public at the Group's registered office and may be also be consulted on the "Financial Statements and Reports" page in the "Investor relations" section of the Group's website www.interpumpgroup.it, as well on the repository.

S. Ilario d'Enza (RE), 14 February 2018 On behalf of the Board of Directors

Fulvio Montipò, Chairman

Carlo Banci, the manager responsible for drafting the company's accounting documents, declares - pursuant to the terms Article 154-bis, paragraph 2 of the Consolidated Financial Services Act - that the accounting disclosures in the present release correspond to the contents of the underlying documents, the accounting books and the accounting entries.

Sant'Ilario d'Enza (RE), 14 February 2018 Carlo Banci

Manager responsible for drafting the company's accounting documents

Media Relations: Investor Relations: Moccagatta Associati Luca Mirabelli Tel. 02 8645.1695 Tel. 0522-904433 segreteria@moccagatta.it lmirabelli@interpumpgroup.it

Consolidated Statement of financial position

(€/000)	31/12/2017	31/12/2016
ASSETS
Current assets
Cash and cash equivalents	144,938	197,891
Trade receivables	236,761	200,018
Inventories	291,701	257,545
Tax receivables	15,290	11,140
Other current assets	8,301	7,686
Total current assets	696,991	674,280
Non-current assets
Property, plant and equipment	321,833	300,921
Goodwill	428,418	390,708
Other intangible assets	38,096	30,039
Other financial assets	1,145	790
Tax receivables	1,704	1,740
Deferred tax assets	24,953	24,108
Other non-current assets	2,582	1,654
Total non-current assets	818,731	749,960
Assets available for sale	785	-
Total assets	1,516,507	1,424,240

(€/000)	31/12/2017	31/12/2016
LIABILITIES
Current liabilities
Trade payables	142,975	109,004
Payables to banks	8,955	2,396
Interest bearing financial payables (current portion)	165,136	124,784
Derivative financial instruments	-	36
Taxes payable	18,291	18,126
Other current liabilities	54,038	49,772
Provisions for risks and charges	3,610	3,620
Total current liabilities	393,005	307,738
Non-current liabilities
Interest bearing financial payables	244,389	327,974
Liabilities for employee benefits	20,044	19,311
Deferred tax liabilities	40,756	47,755
Other non-current liabilities	50,397	41,058
Provisions for risks and charges	3,156	2,866
Total non-current liabilities	358,742	438,964
Liabilities available for sale	200	-
Total liabilities	751,947	746,702
SHAREHOLDERS' EQUITY
Share capital	55,805	55,431
Legal reserve	11,323	11,323
Share premium reserve	121,228	112,386
Reserve for valuation of hedging derivatives
at fair value	-	(24)
Remeasurement reserve for defined benefit plans	(5,722)	(5,022)
Translation reserve	(2,485)	33,497
Other reserves	578,909	466,153
Group shareholders' equity	759,058	673,744
Minority interests	5,502	3,794
Total shareholders' equity	764,560	677,538
Total shareholders' equity and liabilities	1,516,507	1,424,240

FY 2017 Consolidated Income Statement

(€/000)	2017	2016
Net sales	1,086,547	922,818
Cost of goods sold	(672,548)	(584,816)
Gross industrial margin	413,999	338,002
% of net sales	38.1%	36.6%
Other operating income	16,744	14,372
Distribution expenses	(102,726)	(86,425)
General and administrative expenses	(124,534)	(108,973)
Other operating costs	(4,571)	(3,443)
EBIT	198,912	153,533
% of net sales	18.3%	16.6%
Financial income	14,684	7,862
Financial charges	(21,424)	(12,862)
Equity method contribution	(22)	(40)
Profit for the period before taxes	192,150	148,493
Income taxes	(56,600)	(54,020)
Consolidated profit for the period	135,550	94,473
% of net sales	12.5%	10.2%
Attributable to:
Shareholders of Parent	134,270	93,850
Minority shareholders of subsidiaries	1,280	623
Consolidated profit for the period	135,550	94,473
EBITDA	248,648	198,502
% of net sales	22.9%	21.5%
Shareholders' equity	764,560	677,538
Net debt	273,542	257,263
Payables for purchase of shareholdings	50,266	42,761
Capital employed	1,088,368	977,562
Non-annualized ROCE	18.3%	15.7%
Non-annualized ROE	17.7%	13.9%
Basic earnings per share	1.255	0.884

FY 2017 Consolidated statement of comprehensive income

(€/000)	2017	2016
Consolidated profit for the year (A)	135,550	94,473
Other comprehensive income which will subsequently be reclassified to consolidated profit or loss
Cash flow hedge accounting for derivatives hedging interest rate risk: - Gains (losses) on derivatives for the period	-	-
- Less: Adjustment for gains (losses) reclassified to the income statement - Less: Adjustment for the recognition of fair value in equity in the	-	-
previous period Total	-	-
Cash flow hedge accounting for derivatives hedging currency risk:
- Gains (losses) on derivatives for the period - Less: Adjustment for gains (losses) reclassified to the income statement - Less: Adjustment for the recognition of fair value in equity in the	- -	(33) 19
previous period Total	33 33	- (14)
Gains (losses) on translating the financial statements of foreign companies	(36,316)	10,664
Gains (losses) from companies accounted for using the equity method	(2)	(5)
Applicable taxes	(9)	3
Total other consolidated income (losses) which will subsequently be reclassified to consolidated profit for the period, net of the tax effect (B)	(36,294)	10,648
Other comprehensive income which will not subsequently be reclassified to consolidated profit or loss
Gains (losses) on the remeasurement of defined benefit plans	(927)	(1,803)
Applicable taxes	219	262
Total other comprehensive income which will not subsequently be reclassified to consolidated profit or loss (C)	(708)	(1,541)
Consolidated comprehensive income for the year (A)+(B)+(C)	98,548	103,580
Attributable to:
Shareholders of Parent	97,612	103,115
Minority shareholders of subsidiaries	936	465
Consolidated comprehensive income for the year	98,548	103,580

Q4 2017 Consolidated Income Statement

(€/000)	2017	2016
Net sales	267,848	229,796
Cost of goods sold	(167,429)	(146,607)
Gross industrial margin	100,419	83,189
% of net sales	37.5%	36.2%
Other operating income	4,926	3,818
Distribution expenses	(26,621)	(23,017)
General and administrative expenses	(32,287)	(28,311)
Other operating costs	(2,368)	(1,187)
EBIT	44,069	34,492
% of net sales	16.5%	15.0%
Financial income	3,865	2,705
Financial charges	(4,109)	(2,802)
Equity method contribution	164	(44)
Profit for the period before taxes	43,989	34,351
Income taxes	(7,574)	(13,429)
Consolidated profit for the period	36,415	20,922
% of net sales	13.6%	9.1%
Attributable to:
Shareholders of Parent	36,100	20,845
Minority shareholders of subsidiaries	315	77
Consolidated profit for the period	36,415	20,922
EBITDA	56,750	46,904
% of net sales	21.2%	20.4%
Shareholders' equity	764,560	677,538
Net debt	273,542	257,263
Payables for purchase of shareholdings	50,266	42,761
Capital employed	1,088,368	977,562
Non-annualized ROCE	4.0%	3.5%
Non-annualized ROE	4.8%	3.1%
Basic earnings per share	0.337	0.196

Q4 2017 Consolidated statement of comprehensive income

(€/000)	2017	2016
Consolidated profit for the fourth quarter (A)	36,415	20,922
Other comprehensive income which will subsequently be reclassified to consolidated profit or loss
Cash flow hedge accounting for derivatives hedging interest rate risk: - Gains (losses) on derivatives for the period	-	-
- Less: Adjustment for gains (losses) reclassified to the income statement - Less: Adjustment for the recognition of fair value in equity in the	-	-
previous period Total	-	-
Cash flow hedge accounting for derivatives hedging currency risk: - Gains (losses) on derivatives for the period	-	(32)
- Less: Adjustment for gains (losses) reclassified to the income statement - Less: Adjustment for the recognition of fair value in equity in the	-	-
previous period Total	- -	- (32)
Gains (losses) on translating the financial statements of foreign companies	(3,896)	15,349
Gains (losses) from companies accounted for using the equity method	4	22
Applicable taxes	-	9
Total other consolidated income (losses) which will subsequently be reclassified to consolidated profit for the period, net of the tax effect
(B)	(3,892)	15,348
Other comprehensive income which will not subsequently be reclassified to consolidated profit or loss
Gains (losses) on the remeasurement of defined benefit plans	(927)	(1,731)
Applicable taxes	219	242
Total other comprehensive income which will not subsequently be reclassified to consolidated profit or loss (C)	(708)	(1,489)
Consolidated comprehensive income for the fourth quarter (A)+(B)+(C)	31,815	34,781
Attributable to:
Shareholders of Parent	31,477	34,649
Minority shareholders of subsidiaries	338	132
Consolidated comprehensive income for the fourth quarter	31,815	34,781

FY 2017 Consolidated cash flow statement

(€/000)	2017	2016
Cash flows from operating activities
Profit before taxes	192,150	148,493
Adjustments for non-cash items:
Losses (gains) on the sale of fixed assets	(3,257)	(2,099)
Losses (gains) on the sale of business units and equity investments	-	(61)
Amortization and depreciation	47,792	44,044
Costs recognized in the income statement relative to stock options that do not involve monetary outflows for the Group	1,781	1,733
Losses (profits) from investments	22	40
Net change in risk provisions and allocations to employee benefit provisions	(377)	(1,298)
Expenditures for tangible assets to be leased	(6,508)	(10,784)
Proceeds from the disposal of leased tangible assets	7,966	6,494
Net financial charges (revenues)	6,740	5,000
	246,309	191,562
(Increase) decrease in trade receivables and other current assets	(29,558)	(4,614)
(Increase) decrease in inventories	(32,603)	(5,753)
Increase (decrease) in trade payables and other current liabilities	30,661	(1,815)
Interest paid	(3,331)	(4,450)
Realized exchange differences	(3,370)	(653)
Taxes paid	(66,476)	(48,464)
Net cash from operating activities	141,632	125,813
Cash flows from investing activities
Payments for the purchase of investments net of cash received and gross of treasury
shares transferred	(82,014)	(41,302)
Sale of equity investments and business units including cash transferred	-	861
Capital expenditure on property, plant and equipment	(44,533)	(31,954)
Proceeds from the sale of tangible fixed assets	871	566
Proceeds from the sale of available-for-sale assets	2,714	-
Increase in intangible assets	(3,544)	(3,022)
Financial income received	534	496
Other	(608)	149
Net cash (used in) investing activities	(126,580)	(74,206)
Cash flows from financing activities
Disbursements (repayments) of loans	(52,681)	66,464
Dividends paid	(22,310)	(21,138)
Payments for the purchase of treasury shares	-	(43,308)
Disposal of treasury shares to acquire equity investments	3,685	5,516
Proceeds from the sale of treasury shares to stock option beneficiaries	3,376	9,490
Disbursements (repayments) of shareholder loans	(50)	(7)
Change in other financial assets	83	(53)
Payment of finance lease installments (principal)	(2,205)	(3,992)
Net cash generated by (used in) financing activities	(70,102)	12,972
Net increase (decrease) in cash and cash equivalents	(55,050)	64,579

	THE INTERPUMP GROUP
--	--------------------------------------

(€/000)	2017	2016
Net increase (decrease) in cash and cash equivalents	(55,050)	64,579
Translation differences for cash held by non-EU companies	(4,462)	1,361
Opening cash and cash equivalents of companies consolidated on a line-by-line basis for the first time	-	160
Cash and cash equivalents at the beginning of the period	195,495	129,395
Cash and cash equivalents at the end of the period	135,983	195,495
Cash and cash equivalents consist of the following:	31/12/2017 €/000	31/12/2016 €/000
Cash and cash equivalents as per the consolidated statement of financial position Bank payables (overdrafts and subject to collection advances) Cash and cash equivalents as per the consolidated cash flow statement	144,938 (8,955) 135,983	197,891 (2,396) 195,495

Statement of changes in consolidated shareholders' equity

	Share capital	Legal reserve	Share premium reserve	Reserve for valuation of hedging derivatives at fair value	Remeasure ment reserve for defined benefit plans	Translation reserve	Other reserves	Group shareholders' equity	Non controlling interests	Total
At 1 January 2016	56,032	11,323	138,955	(13)	(3,501)	22,657	391,704	617,157	5,471	622,628
Recognition in the income statement of the fair value of stock options granted and exercisable	-	-	1,733	-	-	-	-	1,733	-	1,733
Purchase of treasury shares	(1,772)	-	(43,308)	-	-	-	1,772	(43,308)	-	(43,308)
Sale of treasury shares to stock option beneficiaries	937	-	9,490	-	-	-	(937)	9,490	-	9,490
Transfer of treasury shares as payment for equity investments	234	-	5,516	-	-	-	(234)	5,516	-	5,516
Purchase of residual interests in subsidiaries	-	-	-	-	-	43	52	95	(1,040)	(945)
Dividends distributed	-	-	-	-	-	-	(20,054)	(20,054)	(1,102)	(21,156)
Comprehensive income for 2016	-	-	-	(11)	(1,521)	10,797	93,850	103,115	465	103,580
At 31 December 2016	55,431	11,323	112,386	(24)	(5,022)	33,497	466,153	673,744	3,794	677,538
Recognition in the income statement of the fair value of stock options granted and exercisable	-	-	1,781	-	-	-	-	1,781	-	1,781
Sale of treasury shares to stock option beneficiaries	296	-	3,376	-	-	-	(296)	3,376	-	3,376
Transfer of treasury shares as payment for equity investments	78	-	3,685	-	-	-	(78)	3,685	-	3,685
Purchase of Inoxpa Group	-	-	-	-	-	-	-	-	2,300	2,300
Purchase of residual interests in subsidiaries	-	-	-	-	-	-	216	216	(602)	(386)
Dividends distributed	-	-	-	-	-	-	(21,356)	(21,356)	(926)	(22,282)
Comprehensive income for 2017	-	-	-	24	(700)	(35,982)	134,270	97,612	936	98,548
At 31 December 2017	55,805	11,323	121,228	-	(5,722)	(2,485)	578,909	759,058	5,502	764,560