Sogefi — Earnings Release 2016

Apr 27, 2016

Informazione Regolamentata n. 0246-18-2016		Data/Ora Ricezione 27 Aprile 2016 16:16:10	MTA - Star
Societa'	:	SOGEFI
Identificativo Informazione Regolamentata	:	73162
Nome utilizzatore	:	RODOLFI	SOGEFIN01 - YANN ALBRAND / NIVES
Tipologia	:	IRAG 03
Data/Ora Ricezione	:	27 Aprile 2016 16:16:10
Data/Ora Inizio Diffusione presunta	:	27 Aprile 2016 16:31:11
Oggetto	:	Q1 2016 at 390.1 m	Sogefi (Cir group): revenues up by 4.7% in
Testo del comunicato

Vedi allegato.

PRESS RELEASE

Board of Directors approves results as of March 31 2016

SOGEFI (CIR GROUP):

Revenues up by 4.7% in Q1 2016 at € 390.1m

EBITDA before non-recurring items up by 9% at € 38.5m

Net result at € 2.9m (€ 7.6m in Q1 2015)

Net debt at € 322.6m (€ 322.3m at 31/12/2015)

Highlights from the results of Q1 2016

(in €m)

	Q1 2016	Q1 2015	Δ%
Revenues	390.1	372.5	4.7
EBITDA before non-recurring items	38.5	35.3	9.0
EBITDA	34.6	34.9	-0.7
Net Result	2.9	7.6
Net debt (end of period)	322.6	327.5

Milan, April 27 2016 - The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Interim Financial Report of the group for the first quarter of 2016.

Laurent Hebenstreit, Chief Executive Officer of Sogefi, made the following statement:

"In the first quarter of 2016, EBITDA before non-recurring items rose by 9%, despite the negative impact of the South American market. For the moment the results confirm the commitment of the company to improving profitability and cash flow".

Revenues up by 4.7% in Q1 2016

In the first quarter of 2016, Sogefi reported growth in revenues of 4.7% to € 390.1 million (+10.5% at the same exchange rates).

€m	Q1 2016	Q1 2015	reported change	reference market	like for like change*	weight based on Q1 2016
Europe	245.2	244.9	0.1%	5.1%	0.5%	62.9%
North America	75.3	57.9	30.0%	5.2%	38.2%	19.3%
South America	35.0	45.2	-22.6%	-27.7%	12.3%	9.0%
Asia	33.5	23.0	45.5%	5.0%	51.0%	8.6%
Other	1.1	1.5
Total	390.1	372.5	4.7%		10.5%	100.0%

Revenues by geographical area: strong growth in North America and Asia

* Constant exchange rate Source: Sogefi and IHS data

In Europe revenues remained stable and business continued to develop vigorously in North America (+30%) and in Asia (+45.5%).

In South America, which in first quarter 2016 accounted for less than 10% of total revenues, sales in euro declined by 22.6% because of the devaluation of the local currencies (at like-for-like exchange rates growth was 12.3%).

Revenues by Business Unit: significant increase in the Air & Cooling segment

€m	Q1 2016	Q1 2015	reported change	like for like change*
Suspensions	143.1	141.1	1.4%	7.6%
Filtration	131.1	132.5	-1.0%	5.5%
Air & Cooling	116.6	100.1	16.5%	20.5%
intercompany	-0.7	-1.1
Total	390.1	372.5	4.7%	10.5%

* Constant exchange rate

Growth in the first quarter of 2016 came largely from the Air & Cooling segment, which reported a rise of 16.5% (+20.5% at the same exchange rates); revenues of the Suspensions segment rose by 1.4% (+7.6% at the same exchange rates), while those of Filtration were down by 1% (+5.5% at the same exchange rates).

Operating results and net profit for the first quarter

EBITDA before non-recurring items came to € 38.5 million and was up by 9% on the same period of 2015; profitability increased slightly (from 9.5% in Q1 2015 to 9.9% in Q1 2016), thanks to the gross margin holding up well and to the lower impact of fixed costs.

Once non-recurring charges are considered (€ 3.8 million versus € 0.4 million in Q1 2015), EBITDA, totalling € 34.6 million, was stable on the first quarter of the previous year (€ 34.9 million).

The decline in EBITDA reported in South America was offset by the increases in strongly developing countries, specifically in North America, China and India.

The update in the first quarter of the "product guarantee" risks of the Air & Cooling business unit did not lead to any change in the provision.

EBIT amounted to € 16 million, down from € 19.1 million in the first quarter of 2015; the lower figure was due to higher amortization and fixed assets write-downs.

The net result was positive for € 2.9 million, down from € 7.6 million in Q1 2015 as an effect of higher financial expense, beyond the already mentioned decline in EBIT; financial expense in the first quarter of 2015 had benefited from a positive non-recurring item linked to the fair value measurement of the convertible bond.

Net debt

Net financial debt stood at € 322.6 million at March 31 2016, in line with December 31 2015 and showing a decline of € 5 million on the figure at March 31 2015 (€ 327.5 million). Free Cash Flow in first quarter 2016 amounted to € -0.2 million, compared to € -28.9 million in Q1 2015. This improvement is attributable for approximately € 10 million to lower disbursements of a non-recurring nature for product guarantees and restructuring and, for the remaining part, was due to more factoring and less capex and to a better performance in operating cash flow.

Employees

The Sogefi group had 6,781 employees at March 31 2016 compared to 6,702 at December 31 2015.

Outlook for the year

Sogefi expects the positive trends in North America, China and India to continue. In Europe after the important business expansion seen in 2015, growth could be more limited, while in South America market conditions will remain difficult.

***

The executive responsible for the preparation of the Company's financial statements, Yann Albrand, hereby declares, in compliance with the terms of paragraph 2 Article 154-bis of the Finance Consolidation Act (TUF), that the accounting figures contained in this press release correspond to the results documented in the Company's accounts and general ledger.

***

Contacts: Sogefi Investor Relations Yann Albrand Laura Pennino Email: ir@sogefigroup.com tel.: +39 02 467501 www.sogefigroup.com

CIR Group Communication Department Salvatore Ricco tel.: +39 02 722701 e-mail: infostampa@cirgroup.com www.cirgroup.com

This press release can also be consulted on the website: http://www.sogefigroup.com/it/area-stampa/index.html

***

Attached are the key figures from the Income Statement and the Statement of Financial Position as of March 31 2016 of the Sogefi Group.

Please note that these figures have not been audited by the Firm of Auditors.

SOGEFI GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(in millions of Euro)

ASSETS	03.31.2016	12.31.2015
CURRENT ASSETS
Cash and cash equivalents	122.9	121.9
Other financial assets	5.1	6.3
Working capital
Inventories	159.0	159.7
Trade receivables	177.4	143.5
Other receivables	7.3	7.9
Tax receivables	24.8	26.8
Other assets	4.9	4.0
TOTAL WORKING CAPITAL	373.4	341.9
TOTAL CURRENT ASSETS	501.4	470.1
NON-CURRENT ASSETS
Fixed assets
Land	14.2	14.3
Property, plant and equipment	226.1	232.6
Other tangible fixed assets	5.4	5.3
Of wich: leases	5.2	6.8
Intangible assets	283.2	284.0
TOTAL FIXED ASSETS	528.9	536.2
OTHER NON-CURRENT ASSETS
Investments in joint ventures	-	-
Other financial assets available for sale	0.4	0.4
Non-current trade receivables	-	-
Financial receivables	8.5	13.2
Other receivables	36.1	34.7
Deferred tax assets	64.3	65.3
TOTAL OTHER NON-CURRENT ASSETS	109.3	113.6
TOTAL NON-CURRENT ASSETS	638.2	649.8
TOTAL ASSETS	1,139.6	1,119.9

LIABILITIES	03.31.2016	12.31.2015
CURRENT LIABILITIES
Bank overdrafts and short-term loans	25.3	17.8
Current portion of medium/long-term financial debts and
other loans	101.0	74.4
Of which: leases	1.2	1.3
TOTAL SHORT-TERM FINANCIAL DEBTS	126.3	92.2
Other short-term liabilities for derivative financial instruments	0.3	0.3
TOTAL SHORT-TERM FINANCIAL DEBTS AND DERIVATIVE
FINANCIAL INSTRUMENTS	126.6	92.5
Trade and other payables	350.9	325.4
Tax payables	6.7	6.1
Other current liabilities	9.3	9.7
TOTAL CURRENT LIABILITIES	493.5	433.7
NON-CURRENT LIABILITIES
MEDIUM/LONG TERM FINANCIAL DEBTS AND
DERIVATIVE FINANCIAL INSTRUMENTS
Financial debts to bank	107.6	141.1
Other medium/long-term financial debts	213.7	218.4
Of which: leases	7.4	8.1
TOTAL MEDIUM/LONG-TERM FINANCIAL DEBTS	321.3	359.5
Other medium/long term financial liabilities for derivative financial
instruments	11.1	11.6
TOTAL MEDIUM/LONG-TERM FINANCIAL DEBTS AND DERIVATIVE
FINANCIAL INSTRUMENTS	332.4	371.1
OTHER LONG-TERM LIABILITIES
Long-term provisions	76.1	79.2
Other payables	11.9	9.2
Deferred tax liabilities	36.2	36.3
TOTAL OTHER LONG-TERM LIABILITIES	124.2	124.7
TOTAL NON-CURRENT LIABILITIES	456.6	495.8
SHAREHOLDERS' EQUITY
Share capital	61.7	61.7
Reserves and retained earnings (accumulated losses)	104.2	108.0
Group net result for the period	2.9	1.1
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO THE HOLDING
COMPANY	168.8	170.8
Non-controlling interests	20.7	19.6
TOTAL SHAREHOLDERS' EQUITY	189.5	190.4
TOTAL LIABILITIES AND EQUITY	1,139.6	1,119.9

CONSOLIDATED INCOME STATEMENT FROM 01.01.2016 TO 03.31.2016

(in millions of Euro)

	Period 01.01 – 03.31.2016		Period 01.01 – 03.31.2015		Change
	Amount	%	Amount	%	Amount	%
Sales revenues	390.1	100.0	372.5	100.0	17.6	4.7
Variable cost of sales	280.9	72.0	269.0	72.2	11.9	4.4
CONTRIBUTION MARGIN	109.2	28.0	103.5	27.8	5.7	5.5
Manufacturing and R&D overheads	36.3	9.3	35.6	9.6	0.7	1.9
Depreciation and amortization	16.6	4.3	15.8	4.2	0.8	5.4
Distribution and sales fixed expenses	11.5	2.9	11.4	3.1	0.1	0.4
Administrative and general expenses	18.1	4.7	18.1	4.9	-	0.4
Restructuring costs	1.4	0.4	0.4	0.1	1.0	271.1
Losses (gains) on disposal	-	-	-	-	-	-
Exchange losses (gains)	1.1	0.3	(0.8)	(0.2)	1.9	236.7
Other non-operating expenses (income)	8.2	2.1	3.9	1.0	4.3	106.8
- of which non-recurring	2.4		-		2.4
EBIT	16.0	4.1	19.1	5.1	(3.1)	(16.3)
Financial expenses (income), net	8.5	2.2	6.8	1.9	1.7	24.5
- of which fair value of the embedded derivative	-	-	(1.5)	-	1.5	-
- of which other net financial expenses (income)	8.5		8.3		0.2	2.4
Losses (gains) from equity investments	-		-		-	-
RESULT BEFORE TAXES AND NON
CONTROLLING INTERESTS	7.5	1.9	12.3	3.2	(4.8)	-
Income taxes	3.4	0.9	3.9	1.0	(0.5)	(13.2)
NET RESULT BEFORE NON-CONTROLLING
INTERESTS	4.1	1.0	8.4	2.2	(4.3)	(50.6)
Loss (income) attributable to non-controlling
interests	(1.2)	(0.3)	(0.8)	(0.2)	(0.4)	(48.6)
GROUP NET RESULT	2.9	0.8	7.6	2.0	(4.7)	(61.5)

NET FINANCIAL POSITION

(in millions of Euro)

	03.31.2016	12.31.2015	03.31.2015
A. Cash	122.9	121.9	108.8
B. Other cash at bank and on hand (held to maturity investments)	4.0	4.0	7.0
C. Financial instruments held for trading	-	-	-
D. Liquid funds (A) + (B) + (C)	126.9	125.9	115.8
E. Current financial receivables	1.1	2.3	2.3
F. Current payables to banks	(25.3)	(17.8)	(25.0)
G. Current portion of non-current indebtedness	(101.1)	(74.5)	(96.3)
H. Other current financial debts	(0.3)	(0.3)	(0.2)
I. Current financial indebtedness (F) + (G) + (H)	(126.7)	(92.6)	(121.5)
J. Current financial indebtedness, net (I) + (E) + (D)	1.3	35.6	(3.4)
K. Non-current payables to banks	(107.6)	(141.1)	(102.6)
L. Bonds issued	(205.1)	(208.9)	(207.8)
M. Other non-current financial debts	(19.7)	(21.1)	(22.6)
N. Convertible bond embedded derivative liability	-	-	-
O. Non-current financial indebtedness (K) + (L) + (M) + (N)	(332.4)	(371.1)	(333.0)
P. Net indebtedness (J) + (O)	(331.1)	(335.5)	(336.4)
Non-current financial receivables	8.5	13.2	8.9
Financial indebtedness, net including non-current financial
receivables	(322.6)	(322.3)	(327.5)

CASH FLOW STATEMENT

(in millions of Euro)

	March 31, 2016	December 31, 2015	March 31, 2015
SELF-FINANCING	21.2	53.4	(1.9)
Change in net working capital	(7.0)	(4.2)	(2.4)
Other medium/long-term assets/liabilities	1.9	4.8	(1.5)
CASH FLOW GENERATED BY OPERATIONS	16.1	54.0	(5.8)
Sale of equity investments	-	-	-
Net decrease from sale of fixed assets	-	1.0	0.1
TOTAL SOURCES	16.1	55.0	(5.7)
Increase in intangible assets	7.4	30.4	8.6
Purchase of tangible assets	8.7	51.3	11.1
TOTAL APPLICATION OF FUNDS	16.1	81.7	19.7
Exchange differences on assets/liabilities and equity	(0.2)	1.9	(3.5)
FREE CASH FLOW	(0.2)	(24.8)	(28.9)
Holding Company increases in capital	-	0.1	0.1
Increase in share capital of consolidated subsidiaries	0.1	0.1	-
Dividends paid by subsidiaries to non-controlling interests	-	(4.3)	-
Change in fair value of effective derivative instruments	(0.2)	10.9	5.6
CHANGES IN SHAREHOLDERS' EQUITY	(0.1)	6.8	5.7
Change in net financial position	(0.3)	(18.0)	(23.2)
Opening net financial position	(322.3)	(304.3)	(304.3)
CLOSING NET FINANCIAL POSITION	(322.6)	(322.3)	(327.5)