Salcef Group — Earnings Release 2022

May 13, 2022

Informazione Regolamentata n. 20176-37-2022		Data/Ora Ricezione 13 Maggio 2022 19:32:08	Euronext Milan
Societa'	:	SALCEF GROUP
Identificativo Informazione Regolamentata	:	162286
Nome utilizzatore	:	SALCEFGROUPN02 - Salciccia
Tipologia	:	3.1
Data/Ora Ricezione	:	13 Maggio 2022 19:32:08
Data/Ora Inizio Diffusione presunta	:	13 Maggio 2022 19:32:09
Oggetto	:	net income	Salcef Group approves the results of the first quarter 2022 with higher revenues and
Testo del comunicato

Vedi allegato.

Investor Relations & Sustainability - Alessio Crosa Email: investor.relations@salcef.com - Ph: +39 06 416281

Press Release

Salcef Group approves the results of the first quarter 2022 with higher revenues and net income

Revenues at € 108 million, with organic growth at 12%, EBITDA at € 22 million and Backlog at € 1.2 billion with book-to-bill at 1x

1Q 2022 key results (vs. 1Q 2021):

• Revenues at € 107.7 million (+15.2%)
• EBITDA at € 21.8 million (+2.6%)
• EBIT at € 13.3 million (-8.4%)
• Net Income at € 5.2 million (+37.5%)
• Adjusted Net Financial Position after M&A positive for € 92.3 million (figure at 31 December 2021 positive for € 114.5 million)

Rome, 13 May 2022 – The Board of Directors of Salcef Group S.p.A., convened today under the chairmanship of Gilberto Salciccia, approved the interim report as at 31 March 2022.

Valeriano Salciccia, Chief Executive Officer of Salcef Group, commented:

"The results of the first quarter confirm the robust evolution trend of the Group, whose revenues continue to be supported by stable organic double-digit growth. The effectiveness of the organization and of the management structure have allowed the Group to maintain a remarkable profitability, despite the external context and the growing inflation. The backlog, whose trend and composition are starting to benefit from the huge investment plans launched in our main markets, is an element of additional solidity for the operations of all the Business Units. We are also pleased with the acquisition of the PSC Group's railway business unit, that became effective on 1 May, and we are already working to develop its potential, thanks to the industrial synergies and the integration of all human resources in our organization."

Salcef Group has been operating for more than 70 years in the development and innovation of sustainable mobility infrastructures. It is a global player in the in the maintenance, renovation, construction and electrification of railway and urban transport infrastructure, as well as in the construction and sale of railway machines and the production of reinforced concrete structures. Maintenance and renewal of railway and urban infrastructure are the core business and account for 71% of volumes. Established in 1949, since 1975 Salcef is controlled by the Salciccia family and it is currently led by the brothers Gilberto and Valeriano Salciccia, in the roles of Chairman and Chief Executive Officer respectively. The Group is organized in 6 Operative Business Units and is present in 4 continents. It employs more than 1,400 highly specialized resources and in 2021 recorded revenues for 440 million euro. Salcef Group is based in Italy and since October 2021 is listed on the STAR segment of the Euronext Milan market of the Italian Stock Exchange (Borsa Italiana: SCF; Reuters: SCFG.MI; Bloomberg: SCF:IM).

1Q 2022 KEY PERFORMANCE INDICATORS

€ million	1Q 2022	1Q 2021	Δ Abs.	Δ %
Revenues	107.7	93.4	14.2	15.2%
EBITDA	21.8	21.2	0.5	2.6%
EBITDA margin	20.2%	22.7%	(2.5 p.p.)	-
EBIT	13.3	14.6	(1.2)	(8.4%)
EBIT margin	12.4%	15.6%	(3.2 p.p.)	-
Adjusted Net Income1	9.2	10.6	(1.5)	(13.7%)
Net Income	5.2	3.8	1.4	37.5%
Adjusted Net Financial Position2	92.3	114.5	22.2	(19.4%)

(1) Net Income adjusted to exclude the impact on financial expenses of the fair value change on financial investments and on the warrant and the tax impact of the reversal of deferred tax assets on revaluations and non-recurring tax expenses

(2) Figure as at 31 March 2022 considers the down payment paid to the PSC Group for the purchase of the railway business unit. Comparative figures and related changes as at 31 December 2021

In the first three months of the year, consolidated Revenues amounted to € 107.7 million, up 15.2% over the same period of 2021 mainly thanks to a robust 12% organic growth, coupled with the contribution from Bahnbau Nord group (€ 3.5 million), which was acquired in May 2021 and therefore not yet consolidated at the first quarter 2021 stage. Energy, Signalling & Telecommunication and Railway Materials Business Units continued in their noteworthy growth, reporting revenues up 33.2% and 40.3% respectively, without any benefit form change in perimeter. From a geographical standpoint, a material increase in the domestic core business led to a rebalancing towards Italy, which reached 85.6% of the total.

Consolidated EBITDA reached € 21.8 million, with a 2.6% increase over 1Q 2021. The EBITDA margin stood at 20.2%, down YoY mainly due to the rise in some direct production costs, including fuel and raw materials, as well as to the different revenue mix.

Consolidated EBIT reached € 13.3 million (-8.4%) and was mainly impacted by higher D&A for € 1.8 million on the back of the entry into operation of new plants and machines resulting from capex made both during 2021 and in the first quarter of 2022.

The Group Adjusted Net Income amounted to € 9.2 million, down 13.7% compared to the € 10.6 million of the first quarter of 2021, mainly due to the lower EBIT. The Net Income at € 5.2 million was € 1.4 million (37,5%) higher than the first quarter of 2021, reflecting the positive effect of the lack of fair value changes of warrant (€ 5.7 million in 2021), partially offset by the fair value changes of financial investments.

The Adjusted Net Financial Position as at 31 March 2022 was positive for € 92.3 million (positive for € 114.5 million at year-end 2021). The reduction is mainly due to the payment of approximately € 23 million in favor of the PSC Group for the acquisition of the railway business unit. Including the financial assets relating to the down payment paid to the PSC Group, the Net Financial Position as at 31 March 2022 would have been positive for € 115.5 million.

The Backlog stood at € 1.2 billion, in line with the figure at the end of 2021, thanks to new orders acquired in the quarter – mainly the ca. € 57 million contract for the construction of a second section of the Verona-Padua High-speed line in Italy and the contract worth ca. \$ 44 million for track renewal in the New York area

– that equaled the value of production. Looking at the geographical distribution, the domestic component is confirmed as the largest one (87.7%), even though slightly below the FY 2021 value due to the mentioned contract in the US. Track & Light Civil Works and Energy Signalling & Telecommunication are confirmed as the most represented Business Units, with 69.1% and 13.8% of the backlog respectively.

Major events after the close of the reporting period

On 29 April 2022 the Shareholders' Meeting approved the financial statements for the year ended 31 December 2021, which reported a net profit of € 33,300,893, and took note of the consolidated financial statements for 2021, which reported a net income attributable to the parent company of € 39,070,532. The Shareholders' Meeting also:

• resolved to distribute a dividend equal to gross € 0.46 per Ordinary Share which will be entitled to it on the record date (i.e. 17 May 2022), with dividend date 16 May 2022 and payment date 18 May 2022;
• appointed, through the slate mechanism, the new Board of Directors of Salcef Group S.p.A., determining the number of its members in 7 and fixing the duration of the relevant mandate in three years, therefore expiring at the date of the Shareholders' Meeting for the approval of the financial statements as at 31 December 2024;
• appointed, through the slate mechanism, the new Board of Statutory Auditors of Salcef Group S.p.A., fixing the duration of the relevant mandate in three years, therefore expiring at the date of the Shareholders' Meeting for the approval of the financial statements as at 31 December 2024;
• authorised the Board of Directors, subject to revocation of the authorisation granted by the Shareholders' Meeting of 29 April 2021 for the part not executed, to purchase and dispose of, pursuant articles 2357 and following of the Italian Civil Code and Art. 132 of the TUF and also in several tranches, ordinary shares of the Company;
• approved the 2022-2025 Stock Grant Plan and the 2022-2023 Performance Shares Plan;
• approved the Company's remuneration policy for the financial year 2022;
• resolved, in extraordinary session, to grant the Board of Directors the power to increase the share capital for cash, in one or more tranches, with or without warrants and also to service the exercise of warrants, for a maximum of € 100 million including share-premium;
• resolved, in extraordinary session, the amendment of the Articles of Association with the aim to include the most recent naming of the Euronext Milan market and the Code of Corporate Governance.

Outlook

For 2022, production volumes are expected to continue their growth also in light of the sizeable governmental investments in the main countries in which the Group operates.

Without any additional and unforeseeable deteriorations of the geopolitical scenario and of the inflationary tensions, the Group profitability for 2022 is expected to remain broadly in line with the one recorded in the first quarter.

It should be also noted that:

• the Group does not currently have any business or operational activities in Russia or in any other country subject to sanctions by the European Union or the United States;
• there are no slowdowns of production activities due to lack of materials or transportation and other services

The manager responsible for the drafting of corporate accounting documents Fabio De Masi declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

This press release is available on the Salcef Group website https://www.salcef.com in the Investor Relations/Price Sensitive Press Releases section.

Management will present the 1Q 2022 results to the financial community on Monday, 16 May at 11:00 CET via webcast and conference call. To join the Audio Webcast/Conference Call, please register at the following link.

The Presentation will be made available before the beginning of the conference on the Investor Relations section of www.salcef.com.

A replay of the webcast will be then available on the Investor Relations section of www.salcef.com.

Consolidated Balance Sheet

ASSETS	31.03.2022	31.12.2021
Non-current Assets
Intangible assets with finite useful lives	8,687,321	7,584,146
Goodwill	42,669,124	41,795,326
Property, plant and equipment	135,010,943	123,798,390
Right-of-use assets	14,733,491	14,197,300
- of which, with related parties	1,242,076	1,324,881
Equity-accounted investments	40,543	40,543
Other non-current assets	14,293,160	20,806,786
Deferred tax assets	19,233,064	19,984,980
Total non-current Assets	234,667,646	228,207,471
Current Assets
Inventories	21,859,399	20,664,592
Contract assets	133,859,188	107,701,357
Trade receivables	72,247,763	89,108,678
- of which, with related parties	282,145	282,145
Current tax assets	3,872,999	4,121,517
Current financial assets	146,986,696	101,588,336
- of which, with related parties	353,465	353,465
Cash and cash equivalents	132,204,198	166,175,877
Other current assets	27,224,509	26,806,619
Total current Assets	538,254,752	516,166,976
TOTAL ASSETS	772,922,398	744,374,447

LIABILITIES	31.03.2022	31.12.2021
Equity attributable to the owners of the Parent
Share capital	141,544,532	141,544,532
Other reserves	278,727,857	238,422,972
Profit for the year	5,416,490	39,070,532
Total equity attributable to the owners of the Parent	425,688,879	419,038,036
Share capital and reserves attributable to non-controlling interests	2,334,832	2,062,943
Profit for the year attributable to non-controlling interests	(195,178)	271,889
TOTAL EQUITY	427,828,533	421,372,868
Non-current liabilities
Non-current financial liabilities	92,852,081	79,849,385
Lease liabilities	6,421,040	5,694,159
- of which, with related parties	985,769	1,070,223
Employee benefits	1,141,534	1,154,868
Provisions for risks and charges	3,819,045	3,818,911
Deferred tax liabilities	2,912,757	3,259,382
Other non-current liabilities	3,824,017	4,194,843
Total non-current liabilities	110,970,474	97,971,548
Current liabilities
Current financial liabilities	59,478,635	62,544,658
Current portion of lease liabilities	4,979,543	5,128,669
- of which, with related parties	332,906	329,658
Current employee benefits	971,286	971,286
Contract liabilities	10,534,421	12,916,604
Trade payables	128,653,711	117,503,520
- of which, with related parties	1,691,673	1,182,922
Tax liabilities	8,898,568	5,019,927
Other liabilities	20,607,227	20,945,367
Total current liabilities	234,123,391	225,030,031
TOTAL LIABILITIES	345,093,865	323,001,579
TOTAL EQUITY AND LIABILITIES	772,922,398	744,374,447

Consolidated Income Statement

	1Q 2022	1Q 2021
Revenues from contracts with customers	106,118,188	92,570,918
Other income	1,531,480	853,869
Total revenues	107,649,668	93,424,787
Raw materials, supplies and goods	(23,288,082)	(19,743,007)
Services	(39,468,201)	(32,532,833)
- di cui verso parti correlate	369,208	0
Personnel expenses	(25,074,523)	(20,933,673)
Depreciation and Amortisation	(8,427,370)	(6,653,456)
Other operating costs	(3,091,703)	(1,958,271)
Internal work capitalised	5,038,377	2,963,913
Total costs	(94,311,502)	(78,857,327)
Operating profit	13,338,166	14,567,460
Financial income (expenses)	(2,936,737)	(5,911,500)
- of which, with related parties	(13,794)	(16,917)
Pre-tax profit	10,401,429	8,655,960
Income taxes	(5,180,117)	(4,857,643)
Profit for the year	5,221,312	3,798,317
Profit for the year attributable to:
Non-controlling interests	(195,178)	132,734
Owners of the Parent	5,416,490	3,665,583