Interpump Group — Earnings Release 2020

May 13, 2020

Informazione Regolamentata n. 0159-37-2020		Data/Ora Ricezione 13 Maggio 2020 11:36:55	MTA - Star
Societa'	:	INTERPUMP GROUP
Identificativo Informazione Regolamentata	:	132302
Nome utilizzatore	:	INTERPUMPN03 - MIRABELLI
Tipologia	:	REGEM
Data/Ora Ricezione	:	13 Maggio 2020 11:36:55
Data/Ora Inizio Diffusione presunta	:	13 Maggio 2020 11:36:56
Oggetto	:	Consolidated results at 31/03/2020
Testo del comunicato

Vedi allegato.

PRESS RELEASE

INTERPUMP GROUP APPROVES THE CONSOLIDATED RESULTS FOR THE FIRST QUARTER OF 2020

Chairman Fulvio Montipò: "In the quarter, the perimeter extension compensated for the impact of the Covid-19 pandemic; we hope in a fast recovery so we can go back to our usual pace"

NET SALES: € 344.0 million (+0.1% compared to Q1 2019)

EBITDA: € 74.3 million (-5.5% compared to Q1 2019)

EBITDA/SALES: 21.6% (22.9% in Q1 2019)

CONSOLIDATED NET PROFIT: € 33.3 million

(-26.4% compared to Q1 2019)

NET DEBT: € 384.9 million (€ 370.8 million at 31/12/2019)

(after € 37.7 mn disbursement for acquisitions and € 16.6 mn in purchases of treasury shares)

S. Ilario d'Enza, 13 May 2020 – The Board of Directors of Interpump Group met today and approved the consolidated results for the first quarter of 2020.

Net Sales for the period totaled 344.0 million euro, an increase of 0.1% over the 343.6 million euro in the corresponding period of 2019.

Sales by business sector and geographical area were as follows:

(€/000)		Rest of	North	Pacific	Rest of the
Q1 2020	Italy	Europe	America	Area	World	Total
Hydraulics	44,161	83,252	63,403	23,431	20,701	234,948
Water-Jetting	9,566	39,689	35,116	15,069	9,583	109,023
Total	53,727	122,941	98,519	38,500	30,284	343,971
Q1 2019
Hydraulics	49,568	85,265	52,896	20,477	24,750	232,956
Water-Jetting	9,265	42,219	34,112	14,565	10,493	110,654
Total	58,833	127,484	87,008	35,042	35,243	343,610
Change, 2020/2019
Hydraulics	-10.9%	-2.4%	+19.9%	+14.4%	-16.4%	+0.9%
Water-Jetting	+3.2%	-6.0%	+2.9%	+3.5%	-8.7%	-1.5%
Total	-8.7%	-3.6%	+13.2%	+9.9%	-14.1%	+0.1%

Organic growth, at unchanged perimeter and before the currency exchange, was -15.3% in Hydraulics, -2.6% in Water-Jetting, and -11.2% in total sales.

EBITDA amounted to 74.4 million euro (21.6% of sales) compared to 78.6 million euro in the first quarter of 2019 (22.9% of sales). At unchanged perimeter, EBITDA margin was 22.0%.

The following table sets out EBITDA by business sector:

	Q1 2020 €/000	% on sales	Q1 2019 €/000	% on sales	Change
Hydraulics Water-Jetting	46,085 28,261	19.6% 25.8%	49,937 28,703	21.4% 25.8%	-7.7% -1.5%
Total	74,346	21.6%	78,640	22.9%	-5.5%

Operating income (EBIT) amounted to 50.2 million euro compared to 62.4 million euro in the first quarter of 2019.

Net Profit for the first quarter of 2020 was 33.3 million euro (45.3 million euro in Q1 2019). It was affected by foreign exchange losses due to the weakness of some foreign currencies at the very end of the quarter, and a provision related to the termination of office allowance assigned to the Chairman, recently reconfirmed by the Shareholders' Meeting.

Basic earnings per share went from 0.426 euro in the first quarter of 2019 to 0.310 euro in the first quarter of 2020.

Net cash flow from operating activities was 66.5 million euro (72.3 million euro in Q1 2019). Free cash flow in the first quarter of 2020 amounted to 39.0 million euro (it was 2.7 million euro in the same period last year).

Net debt was 384.9 million euro (370.8 million euro at 31 December 2019). During the quarter, 16.6 million euro were spent in treasury shares, while the change related to acquisitions (Transtecno plus the final balance for Reggiana Riduttori, previously included in commitment for acquisitions) was 37.7 million Additionally, at the end of March the Group had commitments for the acquisition of stakes in subsidiaries worth in total 61.5 million euro (54.3 million euro at 31/12/2019).

Capital employed rose from 1,480.2 million euro at 31 December 2019 to 1,533.6 million euro at 31 March 2020, mostly because of the Transtecno acquisition. Non-annualized ROCE was 3.3% (compared to 4.6% in Q1 2019). Non-annualized ROE was 3.1% (vs. 4.9% in Q1 2019).

As at 31 March 2020 Interpump Group S.p.A. had 2,298,506 treasury shares in its portfolio, representing 2.11% of total share capital, purchased at an average cost of € 25.138.

UPDATE ON COVID-19 PANDEMIC

In Italy, in the month of April saw a worsening of the consequences of Covid-19, following the law provisions imposing an almost complete shutdown of production plants starting from March 23 and until May 3. The diffusion of the disease brought to similar provisions being adopted, in different forms, in several other countries where Interpump has established production and sales, forcing many suppliers and customers to suspend their activity.

Around the world, all Group companies complied to the restrictions imposed by the health authorities, with the goal of protecting the workers' health and slow down the diffusion of the virus. This entailed the adoption of personal protection devices and procedures, a reorganization of times, places and ways of work, and limitations of production. In any case, Interpump ensured continuity of service everywhere to industries and trades recognized as essential.

Under these circumstances, the Interpump Group demonstrated yet again its solidity. Activity restarted in the month of May and a return to normal is in progress, still conditioned by the provisions of govenrments and authorities.

This enormous effort was successful: no severe or fatal cases of Covid-19 were reported among the 7,400+ employees of the Goup.

* * *

Pursuant to Article 65-bis, paragraph 2 of Consob Deliberation 11971/1999 as modified and supplemented, the Interim Report at 31 March 2020 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), 13 May 2020 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), 13 May 2020 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)	31/03/2020	31/12/2019
ASSETS
Current assets
Cash and cash equivalents	205,818	233,784
Trade receivables	289,400	284,842
Inventories	413,290	408,443
Tax receivables	22,467	24,337
Other current assets	12,590	9,077
Total current assets	943,565	960,483
Non-current assets
Property, plant and equipment	492,661	484,358
Goodwill	550,935	508,670
Other intangible assets	31,931	32,527
Other financial assets	1,910	4,226
Tax receivables	1,673	1,590
Deferred tax assets	35,640	34,679
Other non-current assets	2,095	2,150
Total non-current assets	1,116,845	1,068,200
Total assets	2,060,410	2,028,683

(€/000)	31/03/2020	31/12/2019
LIABILITIES
Current liabilities
Trade payables	153,990	157,413
Payables to banks	20,260	22,076
Interest bearing financial payables (current portion)	180,353	195,110
Taxes payable	18,278	14,965
Other current liabilities	74,858	90,230
Provisions for risks and charges	4,068	4,055
Total current liabilities	451,807	483,849
Non-current liabilities
Interest-bearing financial payables	390,086	387,412
Liabilities for employee benefits	22,719	21,402
Deferred tax liabilities	41,977	42,154
Taxes payable	151	125
Other non-current liabilities	58,234	35,610
Provisions for risks and charges	8,059	3,057
Total non-current liabilities	521,226	489,760
Total liabilities	973,033	973,609
SHAREHOLDERS' EQUITY
Share capital	55,422	55,460
Legal reserve	11,323	11,323
Share premium reserve	95,642	96,733
Remeasurement reserve for defined benefit plans	(7,358)	(7,358)
Translation reserve	4,307	7,735
Other reserves	918,582	885,446
Group shareholders' equity	1,077,918	1,049,339
Minority interests	9,459	5,735
Total shareholders' equity	1,087,377	1,055,074
Total shareholders' equity and liabilities	2,060,410	2,028,683

Consolidated income statement for the first quarter

(€/000)	2020	2019
Net sales	343,971	343,610
Cost of sales	(221,314)	(218,886)
Gross industrial margin	122,657	124,724
% of net sales	35.7%	36.3%
Other operating income	4,766	4,952
Distribution expenses	(31,649)	(30,697)
General and administrative expenses	(39,612)	(35,717)
Other operating costs	(5,972)	(846)
EBIT	50,190	62,416
% of net sales	14.6%	18.2%
Financial income	4,710	3,827
Financial charges	(8,719)	(3,525)
Equity method contribution	63	75
Profit for the period before taxes	46,244	62,793
Income taxes	(12,948)	(17,526)
Consolidated profit for the period	33,296	45,267
% of net sales	9.7%	13.2%
Attributable to:
Shareholders of Parent	33,136	44,894
Minority shareholders of subsidiaries	160	373
Consolidated profit for the period	33,296	45,267
EBITDA % of net sales	74,346 21.6%	78,640 22.9%
Shareholders' equity	1,087,377	921,098
Net debt	384,881	381,585
Payables for purchase of shareholdings	61,536	49,763
Capital employed	1,533,614	1,352,446
Non-annualized ROCE	3.3%	4.6%
Non-annualized ROE	3.1%	4.9%
Basic earnings per share	0.310	0.426

Consolidated statement of comprehensive income for the first quarter

(€/000)	2020	2019
Consolidated profit for the first quarter (A)	33,296	45,267
Other comprehensive income which will subsequently be reclassified to consolidated profit or loss
Gains (losses) on translating the financial statements of foreign companies	(3,603)	8,090
Gains (losses) from companies accounted for using the equity method	(58)	28
Applicable taxes	-	-
Total other consolidated income (losses) which will subsequently be reclassified to consolidated profit for the period, net of the tax effect
(B)	(3,661)	8,118
Consolidated comprehensive income for the quarter (A)+(B)	29,635	53,385
Attributable to:
Shareholders of Parent	29,708	52,775
Minority shareholders of subsidiaries	(73)	610
Consolidated comprehensive income for the first quarter	29,635	53,385

Consolidated cash flow statement for the first quarter

(€/000)	2020	2019
Cash flows from operating activities
Profit before taxes	46,244	62,793
Adjustments for non-cash items:
Losses (gains) on the sale of fixed assets	(692)	(782)
Amortization and depreciation	19,031	16,093
Costs recognized in the income statement relative to stock options that do not involve monetary outflows for the Group	831	422
Expenditures for tangible assets to be leased	(2,119)	(1,251)
Proceeds from the disposal of leased tangible assets	1,162	1,716
Losses (profits) from investments	(63)	(75)
Net change in risk provisions and allocations to employee benefit provisions	4,863	(137)
Net financial charges (revenues)	4,009	(302)
	73,266	78,477
(Increase) decrease in trade receivables and other current assets	2,311	(31,165)
(Increase) decrease in inventories	4,924	(18,289)
Increase (decrease) in trade payables and other current liabilities	(13,792)	(3,189)
Interest paid	(1,269)	(1,312)
Realized exchange differences	(68)	245
Taxes paid	(5,466)	(5,104)
Net cash from operating activities	59,906	19,663
Cash flows from investing activities	2,311	(31,165)
Payments for the purchase of investments net of cash received	(29,639)	(15,961)
Capital expenditure on property, plant and equipment	(16,169)	(13,238)
Proceeds from the sale of tangible fixed assets	477	377
Increase in intangible assets	(766)	(614)
Financial income received	471	84
Other	(111)	(62)
Net cash (used in) investing activities	(45,737)	(29,414)
Cash flows from financing activities
Disbursements for purchase of treasury shares	(16,624)	(1,307)
Disbursements (repayments) of loans	(17,840)	(3,848)
Proceeds from the sale of treasury shares to stock option beneficiaries	614	240
Dividends paid	(169)	-
Change in other financial assets	(466)	(9)
Payment of finance lease installments (principal)	(4,857)	(3,881)
Net cash generated by (used in) financing activities	(39,342)	(8,805)
Net increase (decrease) in cash and cash equivalents	(25,173)	(18,556)

(€/000)	2020	2019
Net increase (decrease) in cash and cash equivalents	(25,173)	(18,556)
Translation differences for cash held by non-EU companies	(1,025)	969
Opening cash and cash equivalents of companies consolidated on a line-by-line basis for the first time	48	-
Effect of IFRS16 on opening cash and cash equivalents	-	(10)
Cash and cash equivalents at the beginning of the period	211,708	96,736
Cash and cash equivalents at the end of the period	185,558	79,139
Cash and cash equivalents consist of the following:	31/03/2020	31/12/2019

Cash and cash equivalents as per the consolidated statement of financial position	205.818	233.784
Bank payables (overdrafts and subject to collection advances)	(20.260)	(22.076)
Cash and cash equivalents as per the consolidated cash flow statement	185.558	211.708

Consolidated statement of changes in shareholders' equity

	Share capital	Legal reserve	Share premium reserve	Remeasure ment reserve for defined benefit plans	Translation reserve	Other reserves	Group shareholders' equity	Non controlling interests	Total
At 1 January 2019	54,842	11,323	71,229	(5,965)	3,142	729,373	863,944	4,961	868,905
Purchase of treasury shares	(26)	-	(1,281)	-	-	-	(1,307)	-	(1,307)
Recognition in income statement of fair value of stock options granted and exercisable	-	-	422	-	-	-	422	-	422
Transfer of treasury shares to stock option beneficiaries	21	-	219	-	-	-	240	-	240
Dividends distributed to third parties	-	-	-	-	-	-	-	(547)	(547)
Comprehensive income (loss) for first quarter of 2019	-	-	-	-	7,881	44,894	52,775	610	53,385
At 31 March 2019	54,837	11,323	70,589	(5,965)	11,023	774,267	916,074	5,024	921,098
Purchase of treasury shares	(1,503)	-	(76,183)	-	-	-	(77,686)	-	(77,686)
Recognition in income statement of fair value of stock options granted and exercisable	-	-	2,163	-	-	-	2,163	-	2,163
Transfer of treasury shares to stock option beneficiaries	150	-	3,433	-	-	-	3,583	-	3,583
Transfer of treasury shares for Reggiana Riduttori acquisition	1,976	-	96,731	-	-	-	98,707	-	98,707
Reggiana Riduttori minorities	-	-	-	-	-	-	-	175	175
Acquisition of minorities in subsidiaries	-	-	-	-	-	103	103	(153)	(50)
Dividends distributed	-	-	-	-	-	(23,200)	(23,200)	(128)	(23,328)
Dividends resolved to third parties	-	-	-	-	-	-	-	(99)	(99)
Comprehensive income (loss) for April-December 2019	-	-	-	(1,393)	(3,288)	134,276	129,595	916	130,511
At 31 December 2019	55,460	11,323	96,733	(7,358)	7,735	885,446	1,049,339	5,735	1,055,074
Purchase of treasury shares	(317)	-	(16,307)	-	-	-	(16,624)	-	(16,624)
Recognition in income statement of fair value of stock options granted and exercisable	-	-	831	-	-	-	831	-	831
Transfer of treasury shares to stock option beneficiaries	25	-	590	-	-	-	615	-	615
Transfer of treasury shares as payment for acquisitions	254	-	13,795	-	-	-	14,049	-	14,049
Transtecno minorities	-	-	-	-	-	-	-	4,380	4,380
Dividends resolved to third parties	-	-	-	-	-	-	-	(583)	(583)
Comprehensive income (loss) for first quarter of 2020	-	-	-	-	(3,428)	33,136	29,708	(73)	29,635
At 31 March 2020	55,422	11,323	95,642	(7,358)	4,307	918,582	1,077,918	9,459	1,087,377