Sit — Investor Presentation 2024

Aug 2, 2024

Informazione Regolamentata n. 20105-38-2024		Data/Ora Inizio Diffusione 2 Agosto 2024 12:55:15	Euronext Milan
Societa'	:	SIT
Identificativo Informazione Regolamentata	:	194252
Utenza - Referente	:	SITN05 - Giulia Maso
Tipologia	:	REGEM
Data/Ora Ricezione	:	2 Agosto 2024 12:55:15
Data/Ora Inizio Diffusione	:	2 Agosto 2024 12:55:14
Oggetto	:	SIT H1 2024 - Results presentation
Testo del comunicato

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H1 2024 – Results presentation

Highlights

• Q2 consolidated revenues are €81,8, -1,8% vs Q2 2023
• Q2 Divisional sales:
  • Heating accounts €55,6, -8,4% vs PY
  • Metering at €25,2 is +14,5%, with both Gas metering and Water metering performing +14,5% vs PY
• In Heating & Ventilation Europe is still significantly down (-20% vs Q2 PY) while other markets account improvement in the quarterly trend
• H1 consolidated revenues are €150,9, -9,6% vs H1 2023
• H1 EBITDA of €13,5 (9,0% of revenues) vs €13,2 (7,9%) of PY
• H1 Net income adjusted of minus €3,1 vs €1,6 of PY
• Net debt at €160,8 vs € 146,4 of PY

€ millions, unless otherwise stated

Key financial results

€M , unless otherwise stated	H1 24	of % sales	H1 23	of % sales	Chg YoY
Revenues	150 9 ,	100 0% ,	166 9 ,	100 0% ,	(9 6%) ,
EBITDA	13 5 ,	9 0% ,	13 2 ,	7 9% ,	2 4% ,
of D&A impairment assets ,	13 7 ,		33 2 ,
EBIT	(0 1) ,	-0 1% ,	(20 0) ,	-12 0% ,	(99 4%) ,
(charges)/income financial Net	(7 2) ,		(3 1) ,
forex (charges)/income Net	(0 1) ,		0 3 ,
EBT	(7 4) ,	-4 9% ,	(22 8) ,	-13 7% ,	(67 3%) ,
Taxes	1 3 ,		4 7 ,
income Net	(6 1) ,	-4 1% ,	(18 2) ,	-10 9% ,	(66 2%) ,
Cash flow from operations	(2 1) ,		(12 5) ,
NTWC	83 6 ,		74 9 ,
financial debt Net	160 9 ,		146 4 ,

• H1 consolidated revenues account 9,6% decrease
• EBITDA at €13,5M vs €13,2M of PY
• EBIT at -€0,1M vs -€20,0M of PY (which included impairment of assets for €19,5M)
• Net financial charges include one off charge of €3,9M as amortized cost of amended banking contracts
• Tax revenue for €1,3M due to deferred tax asset
• Net income adjusted at -€3,1M vs €1,6M of PY
• Cash flow from operations is minus €2,1M after capex for €9,4M
• NTWC of €83,6M (27,6% of revenues) vs €74,9M (22,3%) of PY
• Net financial debt stands at €160,9M vs 2023-year end of €153,7M vs €146,4 of PY

Consolidated revenues – H1

Breakdown by Division

€M , unless otherwise stated	24 H1	%	23 H1	%	Chg . YoY
Heating & Ventilation	103 5 ,	68 6% ,	123 4 ,	73 9% ,	(16 1%) ,
Metering	45 8 ,	30 4% ,	42 3 ,	25 4% ,	8 2% ,
Total business sales	149,3	98,9%	165,7	99,3%	(9 ,9%)
Other revenues	1 6 ,	1 1% ,	1 2 ,	0 7% ,	36 8% ,
Total revenues	150,9	100,0%	166,9	100,0%	(9 ,6%)

Breakdown by geography

€M , unless otherwise stated	24 H1	%	23 H1	%	Chg . YoY
Italy	51	33	50	30	0
	0	8%	9	5%	2%
	,	,	,	,	,
(excuding	62	41	78	46	(20
Italy)	3	3%	1	8%	2%)
Europe	,	,	,	,	,
America	22	14	23	14	(6
	4	9%	9	3%	0%)
	,	,	,	,	,
Asia/Pacific	15	10	14	8	7
	1	0%	0	4%	9%
	,	,	,	,	,
Total revenues	150,9	100,0%	166,9	100,0%	(9 ,6%)

Consolidated revenue bridge (€M)

Consolidated revenues – Q2

Breakdown by Division

€M , unless otherwise stated	Q2 24	%	Q2 23	%	Chg . YoY
Heating & Ventilation	55 6 ,	67 9% ,	60 7 ,	72 8% ,	(8 4%) ,
Metering	25 2 ,	30 7% ,	22 0 ,	26 4% ,	14 5% ,
Total business sales	80,8	98,7%	82,7	99,2%	(2 ,3%)
Other revenues	1 1 ,	1 3% ,	0 7 ,	0 8% ,	66 2% ,
Total revenues	81,8	100,0%	83,3	100,0%	(1 ,8%)

€M , unless otherwise stated	Q2 24	%	Q2 23	%	Chg . YoY
Italy	27	33	25	31	7
	7	9%	9	0%	2%
	,	,	,	,	,
(excuding	32	39	37	45	(14
Italy)	4	6%	9	5%	5%)
Europe	,	,	,	,	,
America	12	14	11	14	2
	2	9%	9	3%	6%
	,	,	,	,	,
Asia/Pacific	9	11	7	9	23
	5	6%	6	2%	8%
	,	,	,	,	,
Total revenues	81,8	100,0%	83,3	100,0%	(1 ,8%)

Consolidated revenue bridge (€M)

Heating & Ventilation sales

Q2 sales by geography

€M , unless otherwise stated	Q2 24	%	Q2 23	%	Chg . YoY
Italy	10	9%	9	9%	3
	0	17	7	15	0%
	,	,	,	,	,
(excuding	24	43	31	51	(21
Italy)	4	9%	2	4%	6%)
Europe	,	,	,	,	,
America	11	19	11	18	(1
	0	7%	1	3%	2%)
	,	,	,	,	,
Asia/Pacific	10	18	8	14	17
	2	4%	7	4%	0%
	,	,	,	,	,
Total business sales	55,6	100,0%	60,7	100,0%	(8 ,4%)

H1 sales by geography

€M , unless otherwise stated	H1 24	%	H1 23	%	Chg . YoY
Italy	19	18	21	17	(11
	2	5%	6	5%	3%)
	,	,	,	,	,
(excuding	47	45	64	52	(26
Italy)	3	7%	1	0%	2%)
Europe	,	,	,	,	,
America	20	20	22	18	(9
	8	1%	8	5%	0%)
	,	,	,	,	,
Asia/Pacific	16	15	14	12	9
	2	7%	8	0%	6%
	,	,	,	,	,
Total business sales	103,5	100,0%	123,4	100,0%	(16 ,1%)

• Divisional sales
  • Q2 -8,4%, H1 -16,1%, forex impact not material
• Overall H1 sales performance vs PY reflects Q1 impact (-24% vs 23). Q2 performance in line with expectations
• Italy, Q2 is up €0,3M , 3,0% vs PY. Increase is accounted in Central Heating (€0,8M), Catering (€0,2M) and Cooker Hoods (€0,1M) while Direct Heating is down €0,6M (mainly Pellet stoves and Space heaters).
• Europe. Q2 down €6,7M, -21,6% vs PY. Turkey accounts 50% of the decrease (€3,3M, -28,5%) due to fans and mechanical controls in Central Heating; Central Europe markets are down €2,1M (-20,5%) in Central Heating with Heat Recovery Units (-60%) impacted by general trend in the sector.
• America. Q2 sales in line with PY. Fireplaces are up €2,0M, +50% vs PY; SWH is up €0,2M, +10%; Central Heating, mainly electronics accounts reduction of 36,6%
• Asia/Pacific Q2 accounts +€1,5M, +17,0%, due to China +€1,6M, +29,1%, in Central Heating; decrease in Australia for €0,2M, -10,6%

Metering sales

Q2 Smart Gas Metering

, unless otherwise stated €M	Q2 24	%	Q2 23	%	Chg . YoY
Residential	12 0 ,	5% 66 ,	12 8 ,	7% 80 ,	(5 7%) ,
Commercial & Industrial	3 5 ,	19 2% ,	3 0 ,	19 1% ,	1% 15 ,
Other	2 6 ,	14 4% ,	0 0 ,	0 3% ,	-
Total business sales	18,1	100,0%	15,8	100,0%	14,5%

H1 Smart Gas Metering

H1 Smart Gas Metering

€M , unless otherwise stated	H1 24	%	H1 23	%	Chg . YoY
Residential	23 0 ,	73 1% ,	24 0 ,	81 3% ,	(4 1%) ,
Commercial Industrial &	5 8 ,	18 5% ,	5 4 ,	18 4% ,	7 3% ,
Other	2 6 ,	8 4% ,	0 1 ,	0 3% ,	-
Total business sales	31,5	100,0%	29,5	100,0%	6,6%

H1 24 Smart Gas Metering are 97% in Italy vs 94% of PY

Metering sales

Q2 Water Metering

€M, unless otherwise stated	Q2 24	%	Q2 23	%	Chg. YoY
Water meters, finished	3,0	43,4%	2,1	34,5%	44,2%
Water meter parts	3,6	50,7%	3,5	56,5%	2,8%
Other	0,4	6,0%	0,6	9,0%	(23,9%)
Total business sales	7,0	100,0%	6,1	100,0%	14,6%

H1 Water Metering by geography

H1 Water Metering

€M, unless otherwise stated	H1 24	%	H1 23	%	Chg. YoY
Water meters, finished	5,9	41,1%	4,7	36,9%	24,3%
Water meter parts	7,6	53,1%	7,0	54,6%	8,5%
Other	0,8	5,9%	1,1	8,4%	(22,5%)
Total business sales	14,3	100,0%	12,8	100,0%	11,7%

Net trade working capital

€M , unless otherwise stated	2024 06	2023 12	H1 24 Change	2023 06	2022 12	H1 23 Change	YoY change
Inventory	91 8 ,	83 3 ,	8 5 ,	98 9 ,	91 4 ,	7 6 ,	(7 1) ,
Accounts receivables	72 0 ,	63 5 ,	8 5 ,	52 5 ,	63 8 ,	(11 3) ,	19 5 ,
payables Accounts	(80 2) ,	(66 9) ,	(13 3) ,	(76 5) ,	(81 4) ,	9 4 ,	(3 7) ,
Trade Working Capital Net	83 6 ,	79 9 ,	3 7 ,	74 9 ,	73 8 ,	1 2 ,	8 6 ,
NTWC/Revenues	27 6% ,	24 5% ,	3 1% ,	22 3% ,	18 8% ,	3 5% ,	5 3% ,

Non recourse factoring 4,9 5,2 (0,3) 14,6 13,3 1,3 (9,7) Accounts receivables adjusted 76,8 68,6 8,2 67,1 77,1 -10,0 9,8 YTD reported H1 24 NTWC: +€3,7

AR adjusted/Revenues 25,4% 21,0% 4,4% 19,9% 19,6% 0,3% 5,5% • Inventory increase (+€8,5) reflects seasonality in H&V and order book in the Metering business

Capex account payables (3,8) (6,6) 2,8 (4,4) (4,8) 0,5 0,5

NTWC adjusted/Revenues 30,5% 28,1% 2,4% 27,9% 23,4% 4,5% 2,6%

• Account Receivables and Account payables are in line with volume effect

Accounts payables adjusted (76,4) (60,3) (16,1) (72,2) (76,6) 4,4 (4,3) AP adjusted/Revenues 25,3% 18,5% 6,8% 21,4% 19,5% 2,0% 3,8% YOY change in NTWC: +€8,6)

• Inventory decrease (-€7,1) and destocking impact on purchasing (+€3,7)
• Net Trade Working Capital adjusted 92,3 91,6 0,6 93,9 91,9 2,0 -1,6 • Change in factoring policy

Cash flow and Net debt

Change in net debt

€M , unless otherwise stated	24 H1	23 H1
cash flow Current	10 0 ,	15 2 ,
Change in NTWC	(4 1) ,	0 5 ,
Inventory	(9 0) ,	(5 9) ,
Receivables Accounts	(8 6) ,	12 3 ,
Payables Accounts	13 6 ,	(5 8) ,
Other working capital	1 4 ,	(17 0) ,
Capex , net	(9 4) ,	(11 3) ,
Cash flow from operations	(2 1) ,	(12 5) ,
Financial charges	(4 4) ,	(3 2) ,
IFRS 16 - Leases	(0 4) ,	(0 5) ,
Other	(0 3) ,	0 3 ,
Change in debt net	(7 2) ,	(15 9) ,
debt Net - BoP	153 7 ,	130 5 ,
debt Net - EoP	160 9 ,	146 4 ,

• Current cash flow of €10,0M vs €15,2M of PY
• YTD change in NTWC mostly due to inventory seasonality
• Other working capital in H1 23 (-€17,0M) includes dispute settlement with customer
• Capex for €9,4M vs €11,3M of PY

Net financial position

€M , unless otherwise stated	30/06/2024	31/12/2023	30/06/2023
(Cash & cash equivalents)	(7 2) ,	(8 7) ,	(23 8) ,
Current debt , net	28 6 ,	50 9 ,	3 47 ,
debt Non current	127 1 ,	97 8 ,	109 1 ,
derivatives & M&A debt MTM	0 0 ,	0 2 ,	0 0 ,
IFRS 16 - Leases	12 3 ,	13 5 ,	13 8 ,
Net debt - EoP	160 9 ,	153 ,7	146 4 ,

• Net Debt/EBITDA LTM: 6,2x vs 5,3x vs 3,9x of previous year

Update on new ventures and projects

• Hybitat, the JV for the development and production of a new hydrogen generation and long-term storage system for residential use, will book first sale already in 2024
• Partnership with Panasonic for the launch of a range of new fans for residential Heat Pumps ready to start sales in 2025
• SIT - MBT, the JV dedicated to the design and production of fans for kitchen hoods and induction hobs, has acquired first new customer
• SmartIO, the new smart water meter for residential use based on ultrasonic technology developed in a joint venture with GWF, a Swiss technological partner, has received orders for start of production in Q4 2024

Final comments and outlook

Market scenario described in previous reporting seasons is confirmed:

• There is no single relevant segment in the Heating & Ventilation market that is expected to structurally recover in the second half of the year
• Regulators, market players and end users are on hold: after a period of volatility and market disruption there is no clear trend in the short-term, therefore postponing decision making and spending

To cope with this environment SIT is transitioning towards a sustainable, proactive and flexible organization:

• Structural cost reductions and manufacturing footprint redesign deployed on time
• Evolution of a new management culture based on agile methodologies in the development of electrical components to complete SIT product range

FY 2024 outlook

• Metering business top line affected by UK postponement will bring FY sales in line with PY
• Heating & Ventilation FY performance is expected in line with Q2 change vs PY
• Consolidated EBITDA margin expected to improve between 100 e 200 bps
• Capex planned in the range of €20M
• Net debt expected between €145 €150M

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.

Fine Comunicato n.20105-38-2024	Numero di Pagine: 16
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