Sabaf

Earnings Release • Mar 26, 2018

Informazione Regolamentata n. 0226-30-2018		Data/Ora Ricezione 26 Marzo 2018 12:45:42	MTA - Star
Societa'	:	SABAF
Identificativo Informazione Regolamentata	:	100905
Nome utilizzatore	:	SABAFN03 - Beschi
Tipologia	:	REGEM; 3.1; 1.1
Data/Ora Ricezione	:	26 Marzo 2018 12:45:42
Data/Ora Inizio Diffusione presunta	:	26 Marzo 2018 12:45:43
Oggetto	:	Sabaf: results at 31 December 2017 approved
Testo del comunicato

Vedi allegato.

Press release Ospitaletto (BS), 26 March 2018

SABAF: RESULTS AT 31 DECEMBER 2017 APPROVED

• Consolidated results for 2017: revenue was € 150.2 million (+14.7%); EBITDA was € 31 million (+22%); EBIT was € 18.1 million (+44.9%) and net profit was € 14.8 million (+64.9%)
• Sabaf S.p.A. 2017 results: revenue was € 116 million (+14%); EBITDA was 17.5 million (+29.2%), EBIT was € 8.1 million (+97.8%), net profit was € 8 million (+225.2%)
• BoD resolved to propose to the Shareholders' Meeting a dividend of € 0.55 per share
• BoD resolved to propose to the Shareholders' Meeting a Stock grant plan for directors and key employees

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The Board of Directors of Sabaf S.p.A. met today in Ospitaletto (BS) and approved the consolidated results for 2017 and the draft financial statements of the parent company, as well as the Report on corporate governance and ownership structure requested by Article 123-bis of the Consolidated Finance Act (TUF), the Consolidated non-financial statement pursuant to Italian legislative decree no. 254/2016 and the 2017 Report on remuneration prepared pursuant to Article 123-ter of the TUF. The Board of Directors also approved the Policy on the composition of corporate bodies pursuant to Article 123-bis, paragraph 2, let. d-bis) of TUF.

Group consolidated results

In 2017, the Sabaf Group reported sales revenues of € 150.2 million, up 14.7% on the € 131 million of the previous year; taking into consideration the same area of consolidation, sales increased by 12.9%. In 2017, all markets recorded double-digit growth rates; Italy, where sales remained stable after years of decline due to the sharp reduction in the production of domestic appliances, is an exception. Very positive sales growth rates have been recorded in other European markets, where Sabaf is consolidating its leadership. The Middle East market showed a strong recovery compared to 2016; Asia, North and South America confirmed a positive underlying trend. Average sales prices in 2017 were 0.8% lower compared to 2016.

In 2017, the increase in sales was accompanied by a more than proportional improvement in profitability: 2017 EBITDA amounted to € 31 million, equivalent to 20.6% of sales, compared to € 25.4 million (19.4% of sales) in 2016, EBIT reached € 18.1 million, equivalent to 12.1% of sales, compared to € 12.5 million (9.5%) in 2016. Net profit of 2017, equal to € 14.8 million (9.9% of sales), is 64.9% higher than the € 9 million of 2016.

In 2017, the Sabaf Group made net investments of € 13.9 million. The main investments in the financial year were aimed at automation of the assembly lines for light alloy valves and at the interconnection of production plants with management systems (Industry 4.0). The formerly rented building in Campodarsego (PD), where A.R.C. operates, was acquired. In Brazil, the factory was expanded, against increased production volumes; while in Turkey all the die-casting machines were robotised.

In 2017, the Sabaf Group paid dividends for a total amount of € 5.4 million and purchased treasury shares for a total amount of € 2.1 million; at 31 December 2017, net financial debt was € 25.5 million, compared to € 23.5 million of 31 December 2016, whereas shareholders' equity totalled € 115.1 million; the ratio between the net financial debt and the shareholders' equity was 0.22 versus 0.21 in 2016.

Parent Company Sabaf S.p.A. results

The Parent Company Sabaf S.p.A.'s sales revenue for 2017 totalled € 115.7 million (compared to € 101.5 million reported in 2016, +14%), EBITDA was € 17.5 million, up 29.2 % from € 13.5 million in 2016), EBIT was € 8.1 million, up 97.8 % from € 4.1 million in the previous year and net profit was € 8 million, up 225.2% from € 2.5 million in 2016.

Dividend proposal

The Board of Directors will propose to the shareholders the distribution of a gross ordinary dividend of € 0.55 per share (a dividend of € 0.48 was paid in 2017) for shares outstanding on 29 May 2018 (the record date), excluding, therefore, treasury shares on that date. The ex-date is scheduled for 28 May and the payment date will be 30 May.

Stock grant plan

The Board of Directors also resolved to propose to the Shareholders' Meeting the approval of a free allocation plan of shares in favour of directors and employees of the Company and its subsidiaries ("the Plan") by granting to the Board of Directors the necessary powers for the management, administration and revision of the Plan.

The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the Business Plan. A part of the Beneficiaries has already been identified, while the remaining part will be identified by the Board of Directors in the respect of the timing defined by the Plan.

The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 370,000 (three hundred and seventy thousand) Rights, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the Plan, number 1 Sabaf S.p.A. Share.

The Plan aims to promote and pursue the involvement of the beneficiaries whose activities are considered relevant for the implementation of the contents and the achievement of the objectives set out in the Business Plan, foster loyalty development and motivation of managers, by increasing their entrepreneurial approach as well as align the interests of management with those of the Company's shareholders more closely, with a view to encouraging the achievement of significant results in the economic and asset growth of the Company.

Convocation of the Ordinary Shareholders' Meeting

The Ordinary Shareholders' Meeting will be convened (single call) on 8 May 2018 at 10.30 am at the company's registered office in Ospitaletto (BS) and will also be called upon:

• to resolve on the appointment of the Board of Directors and the Board of Statutory Auditors for the three-year period from 2018 to 2020;
• to resolve on the appointment of the independent auditors for the period from 2018 to 2026;
• to renew the authorisation to the Board of Directors to purchase and sell treasury shares.

Participation in the Star Conference in Milan and presentation of the 2018-2022 Business Plan

On 27 and 28 March, Sabaf will be present at the Star Conference in Milan, the annual event dedicated to meeting investors from all over the world. At the same meeting, CEO Pietro Iotti and CFO Gianluca Beschi will illustrate the guidelines for the 2018-2022 Business Plan. As from 5.30 pm today, 26 March, a presentation to the financial community and a press release highlighting the main features of the Business Plan will be available to the public and on the website www.sabaf.it

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The Annual Financial Report at 31 December 2017, the Independent Auditors' Report and the Board of Statutory Auditors' Report, the Report on Corporate Governance and Ownership Structure, the consolidated Non-Financial Statement and the 2017 Report on Remuneration will be published on the website www.sabaf.it and on the centralised storage system "eMarket Storage", available on the website , no later than 17 April 2018.

The information document related to the Stock Grant Plan will be published on the website www.sabaf.it and on the centralised storage system "eMarket Storage", available on the website , no later than 29 March 2018.

Pursuant to Article 154-bis, paragraph 2 of the Italian Consolidated Finance Act (Testo Unico della Finanza), the company's Financial Reporting Officer Gianluca Beschi declares that the financial disclosure contained in this press release corresponds to the company's records, books and accounting entries.

Annexes: consolidated and Sabaf S.p.A. financial statements. Figures not yet audited.

For more information:

Investor Relations	Media relations
Gianluca Beschi	Talia Godino - +39 348 3499793
Tel: +39 030 6843236	tgodino@twistergroup.it
gianluca.beschi@sabaf.it	Maria Giardini - +39 340 5104775
www.sabaf.it	mgiardini@twistergroup.it
	Arnaldo Ragozzino - + 39 335 6978581
	aragozzino@twistergroup.it

Founded in the early fifties, SABAF has grown consistently over the years to become the key manufacturer in Italy – and one of the leading producers in the world – of components for kitchens and domestic gas cooking appliances.

There are four main lines of production: valves, thermostats and burners for gas cooking appliances and hinges for ovens, washing machines and dishwashers.

Technological expertise, manufacturing flexibility, and the ability to offer a vast range of components – tailor-made to meet the requirements of individual manufacturers of cookers and built-in hobs and ovens and in line with the specific characteristics of its core markets – are Sabaf's key strengths in a sector featuring major specialisation, constantly evolving demand and an ever-increasing orientation towards products assuring total reliability and safety.

The Sabaf Group has more than 800 employees. It operates through its parent company SABAF S.p.A. and the subsidiaries Sabaf do Brasil, Sabaf Turkey and Sabaf China, active in the production of domestic burners, A.R.C., which produces burners for professional cooking, and Faringosi Hinges, leader in the production of oven hinges.

Sabaf Group - Consolidated statement of financial position

(€/000)	31/12/2017	31/12/2016(*)
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	73,069	73,445
Investment property	5,697	6,270
Intangible assets	9,283	9,077
Equity investments	281	306
Non-current financial assets	180	0
Non-current receivables	196	262
Deferred tax assets	5,096	4,781
Total non-current assets	93,802	94,141
CURRENT ASSETS
Inventories	32,929	31,484
Trade receivables	42,263	36,842
Tax receivables	3,065	3,163
Other current receivables	1,057	1,419
Current financial assets	67	0
Cash and cash equivalents	11,533	12,143
Total current assets	90,914	85,051
ASSETS HELD FOR SALE	0	0
TOTAL ASSETS	184,716	179,192
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	11,533	11,533
Retained earnings, other reserves	87,227	90,471
Profit for the year	14,835	8,994
Total equity interest of the Parent Company	113,595	110,998
Minority interests	1,460	1,379
Total shareholders' equity	115,055	112,377
NON-CURRENT LIABILITIES
Loans	17,760	18,892
Other financial liabilities	1,943	1,762
Post-employment benefit and retirement reserves	2,845	3,086
Provisions for risks and charges	385	434
Deferred tax liabilities	804	870
Total non-current liabilities	23,737	25,044
CURRENT LIABILITIES
Loans	17,288	14,612
Other financial liabilities	75	335
Trade payables	19,975	18,977
Tax payables	1,095	1,190
Other payables	7,491	6,657
Total current liabilities	45,924	41,771
LIABILITIES HELD FOR SALE	0	0
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	184,716	179,192

(*) figures recalculated pursuant to IFRS 3, in order to retrospectively take into account the effects resulting from the fair value measurement of A.R.C's assets and liabilities, at the acquisition date previously considered provisional.

Sabaf Group - Consolidated Income Statement

(€/000)	2017	2016(*)
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue	150,223	130,978
Other income	3,361	2,819
Total operating revenue and income	153,584	133,797
OPERATING COSTS
Materials	(59,794)	(47,346)
Change in inventories	2,380	(754)
Services	(30,227)	(27,983)
Payroll costs	(35,328)	(32,112)
Other operating costs	(1,134)	(1,078)
Costs for capitalised in-house work	1,474	841
Total operating costs	(122,629)	(108,432)
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTISATION, CAPITAL GAINS/LOSSES, AND
WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT
ASSETS	30,955	25,365
Depreciations and amortisation	(12,826)	(12,882)
Capital gains on disposals of non-current assets	(12)	18
EBIT	18,117	12,501
Financial income	214	101
Financial expenses	(804)	(620)
Exchange rate gains and losses	274	435
Profits and losses from equity investments	3	0
PROFIT BEFORE TAXES	17,804	12,417
Income tax	(2,888)	(3,342)
PROFIT FOR THE YEAR	14,916	9,075
of which:
Minority interests	81	81
PROFIT ATTRIBUTABLE TO THE GROUP	14,835	8,994
EARNINGS PER SHARE (EPS) Base	€ 1.323	€ 0.791
	€ 1.323	€ 0.791
Diluted

(*) figures recalculated pursuant to IFRS 3, in order to retrospectively take into account the effects resulting from the fair value measurement of A.R.C's assets and liabilities, at the acquisition date previously considered provisional.

Sabaf S.p.A. - Statement of Financial Position

(in €)	31/12/2017	31/12/2016
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	31,610,510	31,092,204
Investment property Intangible assets	1,453,564 3,370,260	1,645,412 3,095,000
Equity investments	49,451,811	50,098,459
Non-current financial assets	1,847,639	2,137,353
- of which from related parties Non-current receivables	1,667,639 19,871	1,897,353 11,621
Deferred tax assets	3,455,483	3,315,263
Total non-current assets	91,209,138	91,395,312
CURRENT ASSETS
Inventories	24,768,927	23,492,840
Trade receivables	31,154,012	27,465,436
- of which from related parties	1,208,883	1,191,581
Tax receivables	2,229,708	2,477,294
- of which from related parties	1,083,666	1,083,666
Other current receivables	721,529	1,039,324
Current financial assets	1,067,429	1,060,000
- of which from related parties	1,000,000	1,000,000
Cash and cash equivalents	2,696,664	1,796,980
Total current assets	62,638,269	57,331,874
ASSETS HELD FOR SALE	0	0
TOTAL ASSETS	153,847,407	148,727,186
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital	11,533,450	11,533,450
Retained earnings, other reserves	72,552,367	77,530,764
Profit for the year	8,001,327	2,459,688
Total shareholders' equity	92,087,144	91,523,902
NON-CURRENT LIABILITIES
Loans	16,297,969	17,281,379
Other financial liabilities	180,000	240,000
Post-employment benefit and retirement reserves	2,199,523	2,435,538
Provisions for risks and charges	369,482	322,979
Deferred tax liabilities	67,983	129,289
Total non-current liabilities	19,114,957	20,409,185
CURRENT LIABILITIES
Loans	18,927,558	14,054,604
- of which to related parties	2,100,000	0
Other financial liabilities	74,849	298,161
Trade payables	16,569,390	16,010,381
- of which to related parties	509,631	104,142
Tax payables	623,013	641,944
Other payables Total current liabilities	6,450,496 42,645,306	5,789,009 36,794,099
LIABILITIES HELD FOR SALE	0	0

Sabaf S.p.A. – Income Statement

(in €)	2017	2016
INCOME STATEMENT COMPONENTS
OPERATING REVENUE AND INCOME
Revenue	115,687,029	101,523,407
- of which from related parties	10,238,606	6,680,209
Other income	2,647,542	2,278,649
Total operating revenue and income	118,334,571	103,802,056
OPERATING COSTS
Materials	(46,554,625)	(36,875,454)
Change in inventories	1,276,087	(1,182,000)
Services	(27,603,637)	(26,031,824)
- of which by related parties	(3,966,399)	(4,151,074)
Payroll costs	(28,734,310)	(26,382,450)
Other operating costs	(715,296)	(647,178)
Costs for capitalised in-house work	1,474,322	841,526
Total operating costs	(100,857,459)	(90,277,380)
OPERATING PROFIT BEFORE DEPRECIATION AND
AMORTISATION,
CAPITAL GAINS/LOSSES, WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT ASSETS	17,477,112	13,524,676
Depreciations and amortisation	(8,843,617)	(9,020,829)
Capital gains/(losses) on disposals of non-current assets	97,873	87,113
Write-downs/write-backs of non-current assets	(681,628)	(521,021)
- of which by related parties	(681,628)	(521,021)
EBIT	8,049,740	4,069,939
Financial income	88,754	84,559
Financial expenses	(482,136)	(512,872)
Exchange rate gains and losses	(88,145)	(48,356)
Profits and losses from equity investments	1,503,354	0
PROFIT BEFORE TAXES	9,071,567	3,593,270
Income tax	(1,070,240)	(1,133,582)
PROFIT FOR THE YEAR	8,001,327	2,459,688