Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sit Earnings Release 2022

Nov 3, 2022

4054_10-q_2022-11-03_4ced7043-c1f0-4a10-b23d-26f64352ee96.pdf

Earnings Release

Open in viewer

Opens in your device viewer

{# SEO P0-1: filing HTML is rendered server-side so Googlebot sees the full text without executing JS or following an iframe to a Disallow'd CDN path. The content has already been sanitized through filings.seo.sanitize_filing_html. #}

Informazione
Regolamentata n.
20105-86-2022
Data/Ora Ricezione
03 Novembre 2022
14:12:02
Euronext Milan
Societa' : SIT
Identificativo
Informazione
Regolamentata
: 168871
Nome utilizzatore : SITN06 - Nicoletto
Tipologia : REGEM
Data/Ora Ricezione : 03 Novembre 2022 14:12:02
Data/Ora Inizio
Diffusione presunta
: 03 Novembre 2022 14:12:03
Oggetto : SIT: Board of Directors approved financial
results for the 9 months 2022
Testo del comunicato

Vedi allegato.

PRESS RELEASE

SIT: Board of Directors approved financial results for the 9 months 2022

SIT reports for 9M 2022:

  • Consolidated revenues of Euro 290.4 million (+1.5% on 9M 2021);
  • Heating Division sales of Euro 234.8 million (+6.3% on 9M 2021);
  • Metering Division sales of Euro 51.4 million (-17.1% on 9M 2021);
  • Consolidated Net Profit of Euro 10.5 million (+15.2% on 9M 2021);
  • Net financial position at September 30, 2022 of Euro 138.7 million (Euro 123.6 million at September 30, 2021).

Q3 2022 reports:

  • Consolidated revenues of Euro 95.7 million (in line with Q3 2021);
  • Heating Division sales of Euro 77.0 million (+1.0% on Q3 2021);
  • Metering Division sales of Euro 17.3 million (-8.4% on Q3 2021);

***

Padua, November 3, 2022

The Board of Directors of SIT S.p.A., listed on the Euronext Milan segment of the Italian Stock Exchange, in a meeting today presided over by Federico de' Stefani, the Chairman and Chief Executive Officer, approved the consolidated 9M 2022 results.

"The nine month figures reflect the slowdown on our markets across a large part of Europe" stated Federico de' Stefani, Chairman and CEO of SIT, who continues "We - the market leaders - have certainly suffered while demand volatility has lowered our expected results. In preparation of the winter season, we have implemented a procurement policy that allows us to respond quickly to increasingly unstable demand, while guaranteeing service to our customers. We continue to be focused on offering innovative, efficient, safe and high quality solutions.

We expect that inflation in 2023 may have a significant impact on both our costs and revenues. We have seen exciting developments in the water metering sector and generally expect to participate in new major tenders on both the domestic and international markets. We also expect next year to benefit from the broader product portfolio brought on stream through R&D and consequently greater market share".

KEY FINANCIALS

(Euro.000) 9M 22 % 9M 21 % change change
%
Revenues from contracts with customers 290,384 100.0% 286,203 100.0% 4,181 1.5%
Adjusted EBITDA 35,594 12.3% 41,954 14.7% -6,360 -15.2%
EBITDA 26,769 9.2% 41,954 14.7% -15,185 -36.2%
Adjusted EBIT 15,370 5.3% 23,059 8.1% -7,689 -33.3%
EBIT 6,545 2.3% 23,059 8.1% -16,514 -71.6%
Result before taxes (EBT) 11,440 3.9% 12,030 4.2% -590 -4.9%
Net result 10,479 3.6% 9,100 3.2% 1,379 15.2%
Net Profit/(loss) for the period adjusted 8,246 2.8% 15,768 5.5% -7,522 -47.7%
Cash flow from operating activities -28,281 6,999
(Euro.000) 30/09/2022 31/12/2021 30/09/2021

Net financial debt 138,686 106,729 123,602 Net trade working capital 81,026 45,423 61,927 Net trade working capital/Revenues 20.9% 11.9% 16.2%

Operating performance

Consolidated Revenues by Division

(Euro.000) 9M 22 % 9M 21 % diff diff %
Heating 234,798 80.9% 220,887 77.2% 13,912 6.3%
Metering 51,400 17.7% 62,006 21.7% (10,606) (17.1%)
Total sales 286,198 98.6% 282,893 98.8% 3,305 1.2%
Other revenues 4,186 1.4% 3,310 1.2% 876 26.5%
Total revenues 290,384 100% 286,203 100% 4,181 1.5%

Consolidated Revenues by Geographic Area

(Euro.000) 9M 22 % 9M 21 % diff change
Italy 66,913 23.0% 89,676 31.3% (22,763) (25.4%) %
Europe (excluding Italy) 132,180 45.5% 120,349 42.1% 11,831 9.8%
The Americas 62,604 21.6% 52,559 18.4% 10,044 19.1%
Asia/Pacific 28,687 9.9% 23,619 8.3% 5,068 21.5%
Total revenues 290,384 100% 286,203 100% 4,181 1.5%

9M 2022 consolidated revenues were Euro 290.4 million, increasing 1.5% on the same period of 2021 (Euro 286.2 million).

Heating Division sales for first nine months of 2022 amounted to Euro 234.8 million, +6.3% on Euro 220.9 million in the same period of 2021 (+2.9% at like-for-like exchange rates). In the third quarter of 2022, core division sales totalled Euro 77.0 million, up 1% on Q3 2021.

The following table presents Heating Division core sales by region according to management criteria:

(Euro.000) 9M 22 % 9M 21 % diff change
%
Italy 45,092 19.2% 43,032 19.5% 2,060 4.8%
Europe (excluding Italy) 101,046 43.0% 104,705 47.4% (3,658) (3.5%)
The Americas 59,846 25.5% 51,046 23.1% 8,800 17.2%
Asia/Pacific 28,814 12.3% 22,105 10.0% 6,710 30.4%
Total sales 234,798 100% 220,887 100% 13,912 6.3%

Sales in Italy rose 4.8% on 9M 2021, thanks to strong demand in the Catering sector (Euro 1.7 million, +57.6%) and for Direct Heating, which rose Euro 0.7 million (+12.1%), on the basis of pellet stoves and space heaters. Central Heating reported a contraction of Euro 1.2 million (-4.4%), mainly due to flue systems.

Sales in Europe (excluding Italy) in the first nine months of 2022 decreased Euro 3.7 million (-3.5%) on the same period of the previous year. Turkey, the top shipping market with 10.7% of division sales, contracted 5.5% on 2021 and particularly the Central Heating segment due to the effect of OEM demand influenced by the market, while the UK, 6.0% of division sales, saw a 14.3% decrease for Central Heating - Flues and Mechanical controls - improving on the previous quarter due to the normalisation of the supply chain. Central Europe remains strong, thanks to the introduction of new products, up 12.8% on Q1 2021 (Euro 4.7 million).

Sales in the Americas rose 17.2% (+5.2% at like-for-like exchange rates), thanks to fireplaces growth of Euro 6.1 million (+22.5%). Storage Water Heating applications in 9M 2022 decreased 6.5% (Euro 1.0 million). Central Heating applications grew Euro 4.2 million (+56.5%), particularly in electronics.

Asia/Pacific sales were up 30.4% to Euro 28.8 million (Euro 22.1 million in 9M 2021). Growth was reported in China (7.4% of the division), up 22.9%, with a Euro 3.2 million improvement in the retail market of the Central Heating segment and in Australia with an increase of Euro 1.2 million (+22.2%).

Among the main product families, Mechanical controls sales were up (+32.9%, Euro 13.1 million), as were Fans (+7.2%, Euro 2.0 million). Supply chain operating conditions improved for these categories; at the application segment level, Central Heating accounted for 58.8% of division sales, increasing 4.3%, while Direct Heating (20.1% of the division sales) rose 11.5% due to the strong fireplaces market in the USA and for applications sold in Italy.

Metering Division sales were Euro 51.4 million (Euro 62.0 million, reducing 17.1% on the same period of the previous year).

In 9M 2022, Smart Gas Metering sector sales totalled Euro 33.0 million, reducing 29.3% on 9M 2021. Sales in Italy accounted for 92.3% of the total, while overseas sales accounted for 7.7% (from Greece, Central Europe, the UK and India).

Water Metering sales totalled Euro 18.4 million, up 20.3% on 9M 2021. Portugal accounts for 23.6% of sales, Spain for 30.3%, the rest of Europe for 33.3% and America and Asia respectively for 6.7% and 6.1%.

In the third quarter of 2022 we have accrued Euro 8.8 million as a best estimate for settlement costs (including legal expenses) with a customer regarding a dispute concerning a supply.

Consolidated 9M 2022 Adjusted EBITDA was Euro 35.6 million (12.3% revenue margin), decreasing 15.2% on Euro 42.0 million (14.7% margin) in the first nine months of 2021.

The impact of volumes is negative for Euro 7.8 million, while the net contribution of prices is positive for Euro 4.5 million, as the increased cost of components and raw materials in the period, and partly those of processing costs, was transferred to the market. Operating costs increased Euro 6.0 million, particularly due to the impact of logistics and transport costs (increasing by approx. Euro 3.5 million) and increased R&D and production costs. EBITDA benefitted from exchange gains of Euro 2.7 million.

EBIT in 9M 2022 totalled Euro 6.5 million (2.3% margin), after amortisation, depreciation and writedowns of Euro 20.4 million, with Adjusted EBIT of Euro 15.4 million (5.3% margin). EBIT in 9M 2021 was Euro 23.1 million (8.1% margin).

Net financial income of Euro 6.5 million was reported in 9M 2022, due to the positive effect from the change in the fair value of the SIT warrants, settled in Q3, with a positive impact of Euro 8.7 million. Adjusted net financial charges totalled Euro 2.2 million (0.8% of revenues), reducing on the same period of the previous year (Euro 2.9 million, 1.0% of revenues).

Pre-tax profit was Euro 11.4 million (3.9% revenue margin), compared to Euro 12.0 million (4.2% margin) in the same period of 2021.

The net profit for the period was Euro 10.5 million (3.6% margin), compared to Euro 9.1 million in 9M 2021, which included the positive impact of the extraordinary tax income of Euro 1.8 million relating to the Patent Box.

Net of non-recurring charges and income, the adjusted net profit in 9M 2022 was Euro 8.2 million, compared to Euro 15.8 million in the same period of the previous year (2.8% and 5.5% of revenues respectively).

Cash Flow performance

The net financial debt at September 30, 2022 was Euro 138.7 million, compared to Euro 123.6 million at September 30, 2021.

The movements in the net financial position are reported below:

(Euro.000) 9M 22 9M 21
Cash flow from current activities (A) 33,880 42,768
Change in inventories (28,790) (12,624)
Change in trade receivables (4,224) (1,022)
Change in trade payables (954) 1,460
Change in other current assets and liabilities and for taxes (7,104) (3,971)
Cash flow from changes in working capital (B) (41,072) (16,158)
Cash flow from operating activities (A + B) (7,192) 26,610
Cash flow from investing activities (C) (21,089) (19,611)
Cash flow from operating activities after investing activities (A + B
+ C)
(28,281) 6,999
Interest (2,297) (3,188)
Dividends (7,299) (6,890)
Acquisition of treasury shares (537) (2,173)
Equity changes 1,752 105
FV derivative changes 2,189 495
IFRS 16 (655) (1,546)
Other 3,171 (1,385)
Change in net financial position (31,957) (7,581)
Opening net financial position 106,729 116,021
Closing net financial position 138,686 123,602

Cash flows from operating activities of Euro 33.9 million were generated in the first nine months of the year, with an absorption as a result of the increase in working capital of Euro 41.1 million, of which Euro 28.8 million due to increased inventories on the basis of the electronic component procurement policy to offset the impact of shortages and guarantee service to customers.

Investing activities absorbed cash of Euro 21.1 million, compared to Euro 19.6 million in the same period of the previous year.

Cash flows from operating activities after investments of Euro 28.3 million were therefore absorbed in the period, compared to a generation of Euro 7.0 million in 9M 2021.

Financing activity cash flows in the period included interest of Euro 2.3 million and dividends of Euro 7.3 million, in addition to the purchase of treasury shares for Euro 0.5 million; the IFRS 16 impact was Euro 0.7 million, while the fair value of hedging derivatives improved Euro 2.2 million.

The net financial position at September 30, 2022 was Euro 138.7 million, increasing Euro 32.0 million on December 31, 2021 (Euro 106.7 million).

Subsequent events to the end of the period

There were no significant events subsequent to the end of third quarter.

Outlook

The performance in the third quarter confirmed the considerable market volatility, with a slowdown on the sales market, particularly in Europe. The backlog remains at high levels, but given the uncertainty, customers may delay orders and shipments planned for FY2022.

Therefore, forecast consolidated revenues for the present year may be at last year's levels, with an expected margin of slightly under 12% (Adjusted EBITDA).

***

Declaration of the manager responsible for the preparation of the Company's accounts

The manager responsible for the preparation of the Company's accounts, Paul Fogolin, hereby declares, as per article 154-bis, paragraph 2, of the "Testo Unico della Finanza", that all information related to the Company's accounts contained in this press release are fairly representing the accounts and the books of the Company. This press release and the results presentation for the period are available on the website www.sitcorporate.it in the Investor Relations section and will be presented to the market today at 3PM (CET). You can participate by clicking the following link: meet.google.com/obd-rngn-ncz

SIT, through its two divisions Heating and Metering, creates intelligent solutions for the control of environmental conditions and consumption measurement for a more sustainable world. A market-leading multinational company and listed on the Euronext Milan segment, SIT aims to be the number one sustainable partner for energy and climate control solutions for its customers, focusing on experimentation and the use of alternative gases with low environmental profiles. The Group has production sites in Italy, Mexico, the Netherlands, Romania, China, Tunisia and Portugal, in addition to a commercial structure covering all global markets. SIT is also a member of the European Heating Industry and of the European Clean Hydrogen Alliance, in addition to the Community Valore Acqua per l'Italia ("Value Water for Italy Community") - www.sitcorporate.it

***

Paul Fogolin E. [email protected] T. +39 049 829 3111

Mara Di Giorgio E. [email protected] M +39 335 7737417

Investor Relations SIT Media Relations

Stefano Campolo E. [email protected] M. +39 329 0894649

Tommaso Pesa E. [email protected] M. +39 347 0735670

Alessandra Capuzzo E. [email protected] M. +39 333 5461162

Annex 1

BALANCE SHEET

(Euro.000) 30/09/2022 31/12/2021
Goodwill 87,946 87,946
Other intangible assets 56,208 61,611
Property, plant and equipment 103,027 98,039
Equity investments 325 325
Non-current financial assets 5,360 2,139
Deferred tax assets 10,687 7,897
Non-current assets 263,553 257,957
Inventories 101,703 70,123
Trade receivables 61,684 56,052
Other current assets 14,490 15,745
Tax receivables 3,417 2,965
Other current financial assets 5,609 527
Cash and cash equivalents 24,533 46,667
Current assets 211,436 192,079
Total assets 474,989 450,036
Share capital 96,162 96,162
Total Reserves 59,007 49,271
Net Profit 10,479 8,243
Minority interest net equity - -
Shareholders' Equity 165,648 153,676
Medium/long-term loans and borrowings 88,298 74,540
Other non-current financial liabilities and derivative financial instruments 53,073 54,625
Provisions for risks and charges 13,403 4,941
Post-employment benefit provision 6,056 5,762
Other non-current liabilities 5 61
Deferred tax liabilities 15,182 15,743
Non-current liabilities 176,017 155,672
Short-term loans and borrowings 22,669 19,770
Other current financial liabilities and derivative financial instruments 4,789 4,988
Trade payables 82,361 80,752
Other current liabilities 20,121 23,163
Financial instruments for Warrants - 8,748
Tax payables 3,385 3,267
Current liabilities 133,324 140,688
Total Liabilities 309,341 296,360
Total Shareholders' Equity and Liabilities 474,989 450,036

Annex 2

INCOME STATEMENT

(Euro.000) 9M 2022 9M 2021
Revenues from sales and services 290,384 286,203
Raw materials, ancillaries, consumables and goods 183,510 160,459
Change in inventories (29,289) (12,576)
Service costs 40,228 35,681
Personnel expense 59,963 59,787
Depreciation, amortisation and write-downs 20,396 18,908
Provisions for risks 8,381 367
Other charges (income) 650 518
EBIT 6,545 23,059
Investment income/(charges) - -
Financial income 9,274 216
Financial charges (2,764) (11,710)
Net exchange gains (losses) (1,615) 465
Impairments on financial assets - -
Profit before taxes 11,440 12,030
Income taxes (961) (2,930)
Net Profit for the period 10,479 9,100
Minority interest result - -
Group net profit 10,479 9,100

Annex 3 CASH FLOW STATEMENT

(Euro.000) 9M 2022 9M 2021
Net profit for the period 10,479 9,100
Amortisation & depreciation 20,223 18,895
Non-cash adjustments 8,730 346
Income taxes 960 2,932
Net financial charges/(income) (6,512) 11,496
CASH FLOW FROM CURRENT ACTIVITIES (A) 33,880 42,769
Changes in assets and liabilities:
Inventories (28,790) (12,624)
Trade receivables (4,224) (1,022)
Trade payables (954) 1,460
Other assets and liabilities (4,441) (918)
Income taxes paid (2,663) (3,054)
CASH FLOW GENERATED (ABSORBED) FROM CHANGES IN WORKING CAPITAL
(B)
(41,072) (16,158)
CASH FLOW FROM OPERATING ACTIVITIES (A + B) (7,192) 26,611
CASH FLOW FROM INVESTING ACTIVITIES (C) (21,089) (19,612)
CASH FLOW FROM OPERATING & INVESTING ACTIVITIES (A + B + C) (28,281) 6,999
Financing activities:
Interest paid
Repayment of non-current financial payables
(1,617)
(11,248)
(2,647)
(127,205)
Increase (decrease) current financial payables 2,153 (594)
Increase (decrease) other financial payables (2,058) (1,777)
New financing 25,000 133,562
Dividend payments (7,297) (6,890)
Treasury shares (537) (2,173)
CASH FLOW FROM FINANCING ACTIVITIES (D) 4,395 (7,724)
Change in translation reserve 1,752 105
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (A + B + C + D) (22,134) (620)
Cash & cash equivalents at beginning of the period
46,667 42,328
Increase (decrease) in cash and cash equivalents
Cash & cash equivalents at end of the period
(22,134)
24,533
(620)
41,708