Sit — Investor Presentation 2022

Aug 4, 2022

Informazione Regolamentata n. 20105-72-2022		Data/Ora Ricezione 04 Agosto 2022 16:05:16	Euronext Milan
Societa'	:	SIT
Identificativo Informazione Regolamentata	:	165849
Nome utilizzatore	:	SITN06 - Nicoletto
Tipologia	:	REGEM
Data/Ora Ricezione	:	04 Agosto 2022 16:05:16
Data/Ora Inizio Diffusione presunta	:	04 Agosto 2022 16:05:18
Oggetto	:		SIT S.p.a. H1 2022 – results presentation
Testo del comunicato

Vedi allegato.

H1 2022 – Results presentation

August 4, 2022

Highlights

• Q2 consolidated revenues are €100,9m, +3,4% vs Q2 2021
• Q2 Divisional sales:
• Heating accounts €81,8m, +10,2% vs PY
• Metering at €17,6m is -19,7%, with Gas metering at -32,2% and Water metering at +21,1% vs PY
• H1 consolidated revenues are €194,7m, +2,3% vs H1 2021
• Consolidated Q2 EBITDA of €9,2m, minus 33,8% vs €13,8m of PY
• Consolidated H1 EBITDA of €23,8m, 12,2% vs €28,9m, 15,2% of PY
• H1 Net income of €14,2m at 7,3% of revenues vs €9,5m, 5,0% of PY
• Net debt at €122,6m vs €120,9m of PY

Key financial results

€m, unless otherwise stated	H1 22	%	H1 21	%	Chg . YoY
Revenues	194	100	190	100	2
	7	0%	3	0%	3%
	,	,	,	,	,
EBITDA	23	12	28	15	(17
	8	2%	9	2%	5%)
	,	,	,	,	,
EBIT	10	5	16	8	(35
	5	4%	2	5%	2%)
	,	,	,	,	,
EBT	16	8	11	6	47
	8	6%	4	0%	6%
	,	,	,	,	,
Net income	14 2 ,	7 3% ,	9 5 ,	5 0% ,	49 4% ,
Income	6	3	10	5%	(41
adjusted	2	2%	5	5	2%)
Net	,	,	,	,	,
Cash flow from operations	(9 9) ,		6 2 ,
NTWC	62 8 ,		63 6 ,
financial debt Net	122 6 ,		120 9 ,

unless otherwise stated €m,	Q2 22	%	Q2 21	%	Chg . YoY
Revenues	100	100	97	100	3
	9	0%	6	0%	4%
	,	,	,	,	,
EBITDA	9	9	13	14	(33
	2	1%	8	2%	8%)
	,	,	,	,	,
EBIT	2	2	7	7	(66
	5	5%	3	5%	0%)
	,	,	,	,	,
EBT	2	2	0	1%	(31
	7	7%	4	4	8%)
	,	,	,	,	,
Net income	1 8 ,	1 8% ,	1 8 ,	1 8% ,	3 8% ,
Net	0	0	3	3	(72
Income	9	9%	3	4%	3%)
adjusted	,	,	,	,	,

• H1 consolidated revenues account 2,3% growth
• Divisional trends:
• Heating: H1 +9,1%, Q2 +10,2%
• Metering: H1 -20,9% , Q2 -19,7%
• EBITDA at €23,8m vs €28,9m of PY
• EBIT at €10,5m (5,4% of revenues) vs €16,2m (8,5%)
• Net income of €14,2m vs €9,5m includes FV accounting effect of Warrant for +€8,1m
• Net income adjusted at €6,2m, 3,2% of revenues vs 5,5%
• Cash flow from operations is minus €9,9m after capex for €11,7m and increase in NTWC for €16,3m
• NTWC of €62,8m (16,0% of revenues) in line with previous year
• Net financial debt stands at €122,6m vs 2021-year end of €106,7m vs €120,9 at PY

Breakdown by Division

, unless otherwise stated €m	H1 22	%	H1 21	%	Chg . YoY
Heating	157 8 ,	81 1% ,	144 7 ,	76 1% ,	9 1% ,
Metering	34 1 ,	5% 17 ,	43 2 ,	7% 22 ,	(20 9%) ,
Total business sales	192,0	98,6%	187,9	98,8%	2,2%
Other revenues	2 7 ,	1 4% ,	2 4 ,	1 2% ,	16 3% ,
Total revenues	194,7	100,0%	190,3	100,0%	2,3%

Breakdown by geography

, unless otherwise stated €m	H1 22	%	H1 21	%	Chg . YoY
Italy	50	26	59	31	(13
	7	1%	0	0%	9%)
	,	,	,	,	,
(excuding	82	42	82	43	(0
Italy)	4	3%	6	4%	3%)
Europe	,	,	,	,	,
America	43	3%	33	7%	5%
	4	22	8	17	28
	,	,	,	,	,
Asia/Pacific	18	9	9	8%	22
	2	3%	14	7	1%
	,	,	,	,	,
Total revenues	194,7	100,0%	190,3	100,0%	2,3%

Consolidated revenue bridge (€m)

Breakdown by Division

, unless otherwise stated €m	Q2 22	%	Q2 21	%	Chg . YoY
Heating	81 8 ,	81 0% ,	74 2 ,	76 1% ,	10 2% ,
Metering	17 6 ,	4% 17 ,	21 9 ,	5% 22 ,	(19 7%) ,
Total business sales	99,4	98,5%	96,1	98,5%	3,4%
Other revenues	1 5 ,	1 5% ,	1 4 ,	1 5% ,	7 8% ,
Total revenues	100,9	100,0%	97,6	100,0%	3,4%

Breakdown by geography

€m , unless otherwise stated	Q2 22	%	Q2 21	%	Chg . YoY
Italy	26	25	30	30	(12
	2	9%	0	8%	9%)
	,	,	,	,	,
(excuding	41	40	43	44	(4
Italy)	0	6%	1	1%	8%)
Europe	,	,	,	,	,
America	23	23	15	16	51
	9	7%	7	1%	8%
	,	,	,	,	,
Asia/Pacific	9	9	8	8	13
	9	8%	7	9%	1%
	,	,	,	,	,
Total revenues	100,9	100,0%	97,6	100,0%	3,4%

Consolidated revenue bridge (€m)

Q2 Heating sales by geography • Divisional sales:

, unless otherwise €m stated	Q2 22	%	Q2 21	%	Chg . YoY
Italy	15	18	14	19	4
	0	4%	5	5%	0%
	,	,	,	,	,
(excuding	33	40	35	48	(7
Italy)	3	7%	8	3%	0%)
Europe	,	,	,	,	,
America	23	28	15	20	49
	0	1%	4	8%	0%
	,	,	,	,	,
Asia/Pacific	10	8%	8	5%	6%
	4	12	5	11	22
	,	,	,	,	,
Total business sales	81,8	100,0%	74,2	100,0%	10,2%

H1 Heating sales by geography

, unless otherwise stated €m	H1 22	%	H1 21	%	Chg . YoY
Italy	29	19	28	19	4
	9	0%	7	9%	2%
	,	,	,	,	,
(excuding	67	9%	68	4%	(1
Italy)	7	42	6	47	4%)
Europe	,	,	,	,	,
America	42	26	32	22	27
	0	6%	8	7%	7%
	,	,	,	,	,
Asia/Pacific	18	11	14	10	25
	3	6%	5	0%	9%
	,	,	,	,	,
Total business sales	157,8	100,0%	144,7	100,0%	9,1%

• • Q2 +10,2%, +6,3% at same forex
• H1 +9,1%, +6,1% at same forex
• Italy. H1 accounts +4,2%, €1,2m increase vs PY. Catering segment is up €1,5m, +80%, and Direct Heating applications (Pellet Stoves and Space Heaters) also grow (€+0,5m, +15%); Central Heating down €0,7m, -3,6%
• Europe. H1 down €1,0m, -1,4% vs PY. Turkey (9,7% of Divisional sales) is down €1,5m, -8,7%, due to OEM demand in Central Heating; UK, (6,0% of Divisional sales) is down 22% in Flues (- 27%) and Mechanical controls (-15%); Central Europe markets grow €3,8m, +15%
• America. H1 sales are up €9,2m, +27,7%, +17,4% at same forex. Fireplaces increase €4,1m, +25%, Central Heating up €2,8m, +60% and Storage Water Heating up €1,5m, +14,2%
• Asia/Pacific. H1 accounts increase for €3,8m, +25,9%, +20,5% at same forex vs PY; China, 6,9% of divisional sales, accounts +€1,5m, +15,9%; Australia +€0,7, +18,9%

Metering sales

Q2 Smart Gas Metering Q2 Water Metering

Residential	9 ,5	83 ,1%	15,3	91 ,4%	(38 3%) ,
Commercial Industrial &	1,9	16 3% ,	1,3	7,9%	38 9% ,
Other	0 ,1	0 ,7%	0 ,1	0 ,7%	(36 8%) ,
Total business sales	11,4	100,0%	16,8	100,0%	(32 ,2%)

€m, unless otherwise stated	Q2 22	%	Q2 21	%	Chg . YoY
finished Water meters,	2 8 ,	44 ,7%	2 ,5	49 ,7%	9 1% ,
Water meter parts	3 0 ,	47 ,5%	2 3 ,	45 ,5%	26 6% ,
Other	0 ,5	7,7%	0 2 ,	4 8% ,	93 3% ,
Total business sales	6,2	100,0%	5,1	100,0%	21,1%

H1 Smart Gas Metering H1 Water Metering

	Q2
Residential	9 ,5	,1% 83	15,3	,4% 91	(38 3%) ,
Commercial & Industrial	1,9	3% 16 ,	1,3	7,9%	9% 38 ,
Other	0 ,1	,7% 0	0 ,1	,7% 0	(36 8%) ,
Total business sales	11,4	100,0%	16,8	100,0%	(32 ,2%)
H1 Smart Gas Metering						H1 Water Metering
€m, unless otherwise stated	H1 22	%	H1 21	%	Chg . YoY
Residential	9 17 ,	82 ,7%	30 3 ,	91 2% ,	(40 9%) ,
Commercial & Industrial	3 6 ,	16 ,5%	2 ,7	8 2% ,	31 8% ,
Other	0 2 ,	0 8% ,	0 2 ,	0 6% ,	(8 6%) ,

unless otherwise stated €m,	H1 22	%	H1 21	%	Chg . YoY
finished	5	45	5	50	11
Water	7	4%	1	8%	9%
meters,	,	,	,	,	,
Water	9	6%	3	43	37
meter	5	47	4	3%	7%
parts	,	,	,	,	,
Other	0	7	0	5	47
	9	0%	6	9%	7%
	,	,	,	,	,
Total business sales	12,5	100,0%	9,9	100,0%	25,2%

H1 2022 geography breakdown: Portugal 23,9%, Spain 28,4%, Rest of Europe

EBITDA bridge – H1

Euro millions

E-MARKET SDIR
CERTIFIED

€m , unless otherwise stated	H1 22	of % sales	H1 21	of % sales	Chg YoY
EBITDA	23 8 ,	12 2% ,	28 9 ,	15 2% ,	(17 5%) ,
D&A impairment of assets ,	13 3 ,		12 7 ,
EBIT	10 5 ,	5 4% ,	16 2 ,	8 5% ,	(35 2%) ,
(charges)/income financial Net	6 3 ,		(4 9) ,
(charges)/income forex Net	0 0 ,		0 1 ,
EBT	16 8 ,	8 6% ,	11 4 ,	6 0% ,	47 6% ,
Taxes	(2 6) ,		(1 9) ,
Net income	14 2 ,	7 3% ,	9 5 ,	5 0% ,	49 4% ,
(charges)/income financial adjusted Net	(1 8) ,	(0 9%) ,	(2 2) ,	(1 1%) ,	(17 6%) ,
income adjusted Net	6 2 ,	3 2% ,	10 5 ,	5% 5 ,	(41 2%) ,

• D&A for €13,3m, 6,8% of revenues vs €12,7m, 6,7%
• EBIT of €10,5m at 5,4% of revenues
• Net financial (charges)/income account changes in FV of Warrants for income of €8,1m that will be consolidated till EoY
• EBT includes impact of FV accounting of Warrants (net income of €8,1m in H122, net charge of €2,8m in H121)
• H1 21 taxes includes one off revenue for Patent Box ruling for €1,8m, net
• Net income of €14,2m at 7,3% of revenues vs 5,0% of previous year
• Net financial charges adjusted reflect improved funding conditions on new facilities
• Net income adjusted is equal to €6,2m

Net trade working capital

unless otherwise stated €m,	2022.06	2021.12	H1 22 Change	2021.06	2020.12	H1 21 Change	YoY change
Inventory	98 0 ,	70 1 ,	27 8 ,	67 5 ,	56 5 ,	11 0 ,	30 5 ,
Accounts receivables	63 8 ,	56 1 ,	7 7 ,	73 5 ,	65 4 ,	8 2 ,	(9 8) ,
payables Accounts	(98 9) ,	(80 8) ,	(18 2) ,	(77 4) ,	(72 2) ,	(5 2) ,	(21 5) ,
Trade Working Capital Net	62,8	45,4	17,4	63,6	49,6	14,0	-0,8
NTWC/Revenues	16,0%	11,9%	4,1%	16,6%	15,5%	1,1%	-0,6%

Accounts receivables adjusted 73,3 70,4 2,9 79,7 75,0 4,7 -6,4 Reported 2022 NTWC

AR adjusted/Revenues 18,7% 18,5% 0,2% 20,8% 23,4% -2,6% -2,1% • YTD Inventory trend increase (+€27,8) reflects Heating seasonality, procurement strategy to address shortage issues and maintain customer service levels

Change in net debt

, unless otherwise stated €m	H1 22	H1 21
cash flow Current	24 5 ,	29 2 ,
Change in NTWC	(16 3) ,	(13 8) ,
Inventory	(26 3) ,	(10 7) ,
Receivables Accounts	(6 5) ,	(7 9) ,
Payables Accounts	16 5 ,	4 8 ,
Other working capital	(6 3) ,	(1 2) ,
Capex , net	(11 7) ,	(8 0) ,
Cash flow from operations	(9 9) ,	6 2 ,
Financial charges	(1 4) ,	(1 8) ,
Dividends paid	(7 3) ,	(6 9) ,
IFRS 16 - Leases	(0 6) ,	(1 6) ,
Other	3 4 ,	(0 7) ,
Change debt in net	(15 9) ,	(4 8) ,
Net debt - BoP	106 7 ,	116 0 ,
debt Net - EoP	122 6 ,	120 9 ,

• Current cash flow of €24,5m vs €29,2m of PY
• NTWC absorbs €16,3m due to increase in Inventory for €26,3m that reflects seasonality in Heating business and procurementstrategy to manage shortage issues
• Capex of €11,7m in line with forecasted project pipeline of which New HQ and Labs
• Dividends paid in H1 2022 amount to €7,3m

Net financial position

€m, unless otherwise stated	30/06/2022	31/12/2021	30/06/2021
(Cash cash equivalents) &	(43 1) ,	(46 7) ,	(56 1) ,
debt Current , net	20 5 ,	20 1 ,	117 8 ,
Non debt current	127 7 ,	114 0 ,	39 6 ,
derivatives & M&A debt MTM	2 4 ,	3 4 ,	4 1 ,
IFRS 16 - Leases	15 1 ,	15 9 ,	15 7 ,
debt Net - EoP	122,6	106,7	120,9

• Net Debt/EBITDA: 2,66x vs 2,10x vs 2,07x of previous year

Final comments and outlook

• Q2 2022 results realized in a more volatile market
• Backlog positive but visibility is limited due to worsening of macroeconomic and geopolitical scenario
• In H2 SIT will continue to :
• address global production footprint and supply chain issues according to market demand and availability
• adjust pricing policies transferring partially the increase in materials and energy costs
• participate to domestic and international tenders for the roll out of new smart meters
• In this more challenging context we expect consolidated sales growing in a range of 3% and 5% and EBITDA margin between 12% and 13%

ANNEXES

Regulatory statement

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 presentation are fairly representing the accounts and the books of the company.

Paul Fogolin Chief Financial Officer paul.fogolin@sitgroup.it

Investor Relations Mara Di Giorgio +39 335 773 7417 investorrelations@sitgroup.it

Disclaimer

This presentation has been prepared by SIT S.p.A. only for information purposes and for the presentation of the Group's results and strategies.

For further details on the SIT Group, reference should be made to publicly available information.

Since at the moment there is no existing reliable market research which provide the required level of detail, nor any official data, the statements of key information, the assessments concerning the positioning of SIT Group and the assessments regarding the market and the market segments of the reference market are based exclusively on assessments carried out by SIT's management, in accordance to its own knowledge of the market and its analysis of the data gathered. For such reason, these statements and assessments may not be updated and/or may also be quite approximate. Due to the lack of reliable and standardized data and of market data provided by third parties, these assessments are necessarily subjective and are provided, unless otherwise specified, by SIT on the basis of the analysis of the data it, as a company, has gathered. These evaluations and the performance of the industries in which SIT operates could prove to be different from those assumed due to the known and unknown risks, the uncertainties and other causes.

Statements contained in this presentation, particularly those regarding any SIT Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties.

Any reference to past performance of the SIT Group shall not be taken as an indication of future performance.

This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

By attending or reading this presentation you agree to be bound by the foregoing terms.