Earnings Release • Aug 5, 2022
Earnings Release
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| Informazione Regolamentata n. 1155-24-2022 |
Data/Ora Ricezione 05 Agosto 2022 13:03:07 |
Euronext Star Milan | ||
|---|---|---|---|---|
| Societa' | : | TESMEC | ||
| Identificativo Informazione Regolamentata |
: | 165930 | ||
| Nome utilizzatore | : | TESMECN03 - Turani | ||
| Tipologia | : | 1.2 | ||
| Data/Ora Ricezione | : | 05 Agosto 2022 13:03:07 | ||
| Data/Ora Inizio Diffusione presunta |
: | 05 Agosto 2022 13:03:09 | ||
| Oggetto | : | Tesmec S.p.A. - The Board of Directors approved First Half 2022 results |
||
| Testo del comunicato |
Vedi allegato.
TESMEC S.P.A.: THE BOARD OF DIRECTORS APPROVED THE INTERIM CONSOLIDATED FINANCIAL REPORT AS AT 30 JUNE 2022, THAT RECORDED A STRONG IMPROVEMENT IN THE TURNOVER, OPERATING RESULTS AND PROFITS, WITH AN INCREASE IN THE NET FINANCIAL DEBT DUE TO THE INCREASE IN WORKING CAPITAL. CONFIRMED THE GROWTH TREND OF THE FULL YEAR
1 The EBITDA is represented by the operating income gross of amortization/depreciation. The EBITDA thus defined represents a measurement used by Company management to monitor and assess the company's operating performance. EBITDA is not recognized as a measure of performance by the IFRS and therefore is not to be considered an alternative measurement for assessing the performance of the Group's operating income. As the composition of EBITDA is not governed by the reference accounting standards, the criterion for determination applied by the Group may not be in line with the criterion adopted by others and is therefore not comparable.
2 The net financial indebtedness is calculated as the sum of cash and cash equivalents, current financial assets including available–for–sale securities, current and non-current financial liabilities, including leasing liabilities and IFRS 16, fair value of hedging instruments and excluding non-current trade and other payables.
Grassobbio (Bergamo - Italy), 5 August 2022 – The Board of Directors of Tesmec S.p.A. (EURONEXT STAR MILAN STAR: TES) ("Tesmec" or the "Company"), at the head of a group leader in the market of technologies for infrastructures (overhead, underground and railway networks) related to the transport of energy, data and materials (oil and derivatives, gas and water), and of technologies in surface mining, convened today and chaired by Ambrogio Caccia Dominioni, examined and approved the Interim consolidated financial report as at 30 June 2022, which records the best half-yearly results in its history, confirming the growth trend and consolidation trend of all the main economic and financial indicators, due to the contribution of the Railway and Energy sectors and the recovery of the American market for Trencher sector. Although the general context of uncertainty, due to inflationary pressures, both in relation to the cost of purchasing materials and the energy component, the margin recorded an increase. To handle with these changes, Tesmec has already taken the necessary actions, working on efficiency, innovation, and adjustment of price lists, and starting negotiations with the competent contracting authorities in the event of medium-long term supply contracts. The change in net financial debt compared to the end of the previous reporting period is due to the increase in net working capital to cope with the critical issues arising on the procurement market and in the context of logistics flows and freight rates.
The Chairman and CEO Ambrogio Caccia Dominioni commented as follows: "Tesmec recorded the best semester in its history with an improvement in all the relevant economic and financial indicators, despite a still uncertain international scenario due to the tensions associated with the conflict in Ukraine, to the increase of the raw material and energy prices, and to the difficulties related to the supply chain. The increase in the net financial position in the period is linked to the change in net working capital to deal with logistical and supply problems. The Trencher segment achieved good performances on the American and Middle Eastern markets. The Railway sector confirmed the trend of strengthening the business at an international level and the Energy sector is registering interesting prospects thanks to new technological products. Today, the Group's business is increasingly oriented towards sustainable innovation with a special focus on the electrification of equipment to minimize environmental impact and diagnostics and digitization to increase infrastructure security. Sustainability is a challenge, but also a great opportunity, and this is the reason why our strategy aims to integrate ESG principles into medium to long-term actions. Actions are planned to measure the Group's externalities with the aim to take actions to reduce our carbon footprint. We confirm the forecasts for the year 2022 and the guidelines of the 2020-2023 Business Plan, with positive expectations regarding the net result. In the second half of the year, we are also confident in a reduction in net financial debt."
Tesmec Group revenues amounted to Euro 113.3 million as at 30 June 2022, with an increase compared to Euro 96.9 million as at 30 June 2021. This variation is mainly due to the confirmation of the performance of the Railway and Trencher sector. In particular, as at 30 June 2022, revenues from sales of products amounted to Euro 70.9 million, with an increase compared to Euro 62.3 million as at 30 June 2021, and revenues from services and charges in work in progress amounted to Euro 42.4 million, with an increase compared to Euro 34.6 million at 30 June 2021.Volumes have recovered mainly in the Trencher and Rail sectors. The Energy sector remains stable but with a better mix.
| Results at 30 June 2022 | Revenues from sales and services | ||
|---|---|---|---|
| (Euro in thousands) | 2022 | 2021 | Change 22 vs 21 |
| Trencher | 66,577 | 58,879 | +13.1% |
| Effect on Consolidated Revenues | 58.8% | 60.7% | |
| Railway | 23,048 | 14,506 | +58.9% |
| Effect on Consolidated Revenues | 20.3% | 15.0% | |
| Energy | 23,629 | 23,517 | +0.5% |
| Effect on Consolidated Revenues | 20.9% | 24.3% | |
| Consolidate | 113,254 | 96,902 | +16.9% |
The revenues of the Trencher sector as at 30 June 2022 amounted to Euro 66.6 million with an increase compared to Euro 58.9 million as at 30 June 2021, thanks to the American market recovery, and more in general to the launch of development and recovery plans in the countries where the Group operates and in spite of an economic scenario characterized by difficulties in finding materials and a rise in purchase prices. As at 30 June 2022, the Trencher segment's order backlog was Euro 75.3 million (compared to Euro 82 million at 30 June 2021).
The Railway sector recorder Revenues as at 30 June 2022 of Euro 23.0 million, with an increase compared to Euro 14.5 million as at 30 June 2021. The growth confirms the strengthening of the business generated by higher value-added projects related to diagnostic products and by the projects generated outside of national boundaries. In the rail sector, the confirmed order backlog amounted to Euro 100.7 million as at 30 June 2022 (with a decrease compared to Euro 107.1 million as at 30 June 2021).
With reference to the Energy sector, Revenues as at 30 June 2022 were Euro 23.6 million, in line compared to Euro 23.5 million as at 30 June 2021. In particular, the Stringing segment recorded revenues of Euro 16.1 million, in line compared to Euro 16.1 million as at 30 June 2021, while the Energy Automation segment recorded revenues of Euro 7.6 million, with a slight improvement compared to Euro 7.4 million as at 30 June 2021, despite the difficulties in finding electronic components and semiconductors from the Far East. The commercial activities recorded a strong acceleration and in fact the order backlog amounted to Euro 109.2 million (compared to Euro 81.1 million as at 30 June 2021), of which Euro 86.6 million in the Energy Automation segment, and Euro 22.6 million in the Stringing segment.
In geographic terms, Tesmec Group recorded a better contribution of sales in Italy driven by the Railway and Energy sectors and confirms the predominant role of the American and European market. The Middle East area improves its performance in the period and confirms a further strengthening in the coming quarters.
The EBITDA amounted to Euro 18.7 million, with an increase compared to the Euro 13.7 million as at 30 June 2021. In particular, the Trencher sector contributes to generate margin through the performance of markets in the Middle East, the United States and New Zealand; the Rail sector participates in the formation of the margin thanks to the best mix generated by projects with higher added value and geographical diversification, while the Energy sector, despite being the sector that has suffered most from the critical
issues related to the supply chain, maintains margins through a better mix of products and sales generated in higher value-added regions like Australia and the U.S.
The EBIT of Tesmec Group amounted to Euro 8.0 million, with an improvement compared the Euro 2.9 million at 30 June 2021.
The Net Financial Income of the Tesmec Group were Euro 3.4 million as at 30 June 2022, compared to a negative value of Euro 1.1 million as at 30 June 2021. During the period, the Group recorded foreign exchange gains of approximately Euro 5.3 million, mainly unrealized, generated by the strengthening of the dollar and linked currencies.
The Net result as at 30 June 2022 was Euro 7.9 million, with an increase compared to Euro 1.0 million as at 30 June 2021.
The Net financial indebtedness was Euro 133.1 million as at 30 June 2022, with an increase compared to Euro 121.0 million as at 31 December 2021 and compared to Euro 119.4 million as at 31 March 2022 due to the increase in net working capital as consequence of the uncertainties in the procurement of materials and components and in the shipments of finished products. This value included Euro 24.9 million of financial liabilities relating to rights of use (IFRS 16), mainly related to the Grassobbio premises and to the Trencher rental fleet.
The Total Order Backlog of the Tesmec Group as at 30 June 2022 amounted to Euro 285.2 million – Euro 100.7 million of which referring to the Railway segment, Euro 75.3 million to the Trencher segment and Euro 109.2 million to the Energy segment (of which Euro 86.6 million related the Energy-Automation segment and Euro 22.6 million related to the Stringing segment) – with an increase both compared to Euro 284.2 million as at 31 December 2021, and to Euro 270.2 million as at 30 June 2021. The order backlog confirms the strong presence of the Group in strategic sectors with high potential related to the energy, digital and green transition processes driven by the Recovery Plans introduced by the Governments of the countries in which Tesmec operates.
Summary of financial data are reported below:
| (Euro in million) | Actual 2022.1H |
Actual 2021.1H |
Change 22 vs 21 |
|---|---|---|---|
| Revenues | 113.3 | 96.9 | 16.9% |
| Ebitda | 18.7 | 13.7 | 36.5% |
| Ebitda Margin | 16.5% | 14.2% | |
| Ebit | 8.0 | 2.9 | 2x |
| Net result | 7.9 | 1.0 | 7x |
| Net financial indebtedness | 133.1 | 118.5 | 9.8% |
The first half of 2022 saw a recovery in economic activities and at the same time a constant and significant increase in the inflation rate, the latter mainly due to the difficulties in the supply chains, the Russian-Ukrainian conflict and the increases recorded in the energy and raw material. Major central banks, including the Federal Reserve, have planned and/or implemented restrictive monetary policies by reducing liquidity injections into the economic and financial system and periodically increasing interest rates in order to contain inflation. Given the current macro-economic context and monetary policies, the growth expectations of the global economy have been revised downwards, but always recovering given the pursuit of national plans to support the development of infrastructure projects, energy transition and digitalization.
In the light of the above and on the basis of the consolidation of the reference businesses and the results recorded in the first half, the Tesmec Group confirms the forecasts for the year 2022, already provided to the market on 10 May: consolidated turnover exceeding Euro 240 million, EBITDA percentage higher than 16% and reduction of Net Financial Debt. The Trencher sector continues its strengthening on the American and Middle Eastern market, taking advantage of the trend generated by the reference industrial sectors and in the second half of the year, it expects the resumption of mining activities in the African countries in which it operates. The Rail sector continues its process of geographic diversification and proposition of technologies with higher added value, while the Energy sector confirms its path of strengthening in geographic areas with a higher technological content and with a range of integrated solutions with higher margins.
Tesmec Group confirms its guidelines for the 2020-2023 Plan supported by the performance of the first half and by the current activities. Tesmec is active in sectors that are benefiting from new investments and development policies aimed at strengthening the key infrastructures of the main countries. The Group's business is concentrated in strategic sectors that are extremely lively and have significant growth prospects. In details, huge investments are planned in the Trencher segment to strengthen telecommunications networks and digitalization in addition to strong development in the mining sector. The Rail segment is benefiting from a significant increase in investments to reduce traffic congestion of road vehicles and increase sustainable mobility, as well as for the maintenance of lines with the aim of ensuring the safety of rail transport. In the Energy segment, the transition to the use of renewable energy sources is confirmed, with the power lines being adapted to the new requirements.
The above objectives were developed according to the logic that there is no worsening of the macroeconomic conditions or a drift in the Russian-Ukrainian conflict.
The challenge of sustainability is one of the strategic priorities of the Group, which has undertaken a path aimed at integrating ESG principles into its business model.
Tesmec has been confirmed as the leader in Sustainability: the Group is in the list of the 200 most sustainable Italian companies, published in May in Il Sole 24 Ore in collaboration with Statista.
Tesmec sustainability strategy is in line with the United Nations SDGs (Sustainable Development Goals) and has defined the Group's ESG priorities. In particular, the guidelines of the sustainability plan aim at the design of a sustainability governance, encourage the increase of the share of green & digital technical solutions, pay particular attention to climate issues and favor the strengthening of the relationship with the territory and the welfare of human resources.
Actions will also be intensified to measure the Group's externalities with the aim of reducing the carbon footprint.
Tesmec S.p.A. also announces the further strengthening of its Top Management with the appointment of Marco Paredi as Director of the Trencher Business Unit, of Ruggero Gambini as Chief Financial Officer and Manager responsible for the preparation of the corporate accounting documents, replacing Marco Paredi, and of Caterina Caccia Dominioni as General Counsel of the Group.
As regards the new position as Director of the Trencher Business Unit, Marco Paredi, in Tesmec since 2015, will play a key role in defining the Group's strategy and will lead the development of the main Business Unit of Tesmec.
"Marco will have a very important task at a time of great transformations in the sector." - commented the Chairman and CEO Ambrogio Caccia Dominioni. - "We believe that he will be able to drive the change, fully seizing all the opportunities of a constantly evolving market, guaranteeing efficient and punctual management". "I am proud to have this new role, challenging and at the same time very stimulating." said Marco Paredi. "After having gained significant managerial experience in the administrative-financial field, being able to express my managerial skills in the main Business Unit of the Group is certainly very satisfying. My commitment is aimed at promoting continuous and sustainable innovation and, thanks to the support of my team, I am sure that we will be able to achieve important growth goals. "
Following the appointment of Marco Paredi as Director of the Trencher Business Unit, Ruggero Gambini was then appointed as the new Chief Finance Officer and Manager responsible for the preparation of the corporate accounting documents. Ruggero Gambini after an initial experience, between 2000 and 2022, as Business Process Re-engineering in A2A, worked in lsagro, an Italian chemical-pharmaceutical group, in Management Control, Planning, Finance and Investor Relations areas, up to holding the position of CFO starting from 2012.
As part of the further strengthening of Tesmec Top Management, the role of Group General Counsel was established, assigned to the lawyer Caterina Caccia Dominioni, who has worked for Tesmec since 2009. Caterina Caccia Dominioni will be responsible of a Group Legal Department made up of 4 professionals, very experienced in the business sectors in which the Group operates.
The Tesmec Group, as part of its consolidated offer of products and services, invested and developed specific solutions and technologies for the territory but with a limited contribution to consolidated turnover in the last period (around 2%). In fact, Tesmec S.p.A. owns 100% of the Russian company O.O.O. Tesmec RUS, based in Moscow, which, over the years, has developed a commercial presence and offer of services mainly for the Energy sector. With regard to recent events and the related sanctions and restrictions on trade with Russia, the Tesmec management team is constantly monitoring the situation in order to be able to make assessments in full compliance with EU and international rules about the future operations of the Russian subsidiary.
On 21 April 2022, the Shareholders' Meeting of Tesmec S.p.A., in ordinary session, on single call, approved the Financial Statements as at 31 December 2021 and the allocation of net result. During the Shareholders' meeting, the Group's Consolidated Financial Statements as at 31 December 2021 including the Non-Financial Statement 2021 were also presented. The Shareholders' Meeting also appointed the new Board of Directors of Tesmec S.p.A., confirming Ambrogio Caccia Dominioni as Chairman, elected the new Board of Statutory Auditors, confirming Simone Cavalli as Chairman, and also resolved in favor of the First Section of the Report on Remuneration Policy and remuneration paid pursuant to Article 123-ter of Italian Legislative Decree 58/1998 and Article 84-quater of the Issuers' Regulation no. 11971/1999 and authorized the Board of Directors to purchase Tesmec ordinary shares.
Also on 21 April 2022, the new Board of Directors reappointed Ambrogio Caccia Dominioni, already Chairman and Chief Execution Officer of Tesmec S.p.A.. Furthermore, the Board of Directors assigned proxies and powers, and confirmed Gianluca Bolelli as Vice Chairman. The Board of Directors also renewed the Internal Committees.
On 30 May 2022 Tesmec, announced that Cerved Rating Agency, the Italian rating agency specialized in the credit rating assessment of non-financial businesses, confirmed the solicited rating "B1.2" of the Company.
On 16 June 2022 the Board of Directors of the Company resolved to change the composition of the Remuneration and Appointments Committee in order to ensure maximum compliance with the recommendations of the Corporate Governance Code of Borsa Italiana S.p.A. the Remuneration and Appointments Committee is composed as follows: Emanuela Teresa Basso Petrino, as Chairman, Antongiulio Marti e Simone Andrea Crolla.
On 29 June 2022 Tesmec announced to officially joins the special register of historical brands of national interest established by the Italian Ministry of Economic Development.
On 28 July 2022 Tesmec signed a loan agreement for Euro 10 million with Ver Capital. The loan has a duration of 6 years with a pre-amortization period of 3 years.
At the time of this press release, the Company holds 4,711,879 treasury shares, equal to 0.777% of the Share Capital. The amount is unchanged compared to 31 March 2022.
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At 2:30 PM (CET), Friday 5 August 2022, Ambrogio Caccia Dominioni, Chairman and CEO of Tesmec S.p.A., and the Top Management of the Company will present the consolidated results for the half 2022 to the financial community during a conference call.
To participate, you are kindly requested to call this number:
| +39 02 36213011 |
|---|
| +44 121 281 8003 |
| +49 69 17415713 |
| +33 170918703 |
| +41 225954727 |
| +1 718 7058794 |
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The manager responsible for the preparation of the corporate accounting documents, Marco Paredi, declares, pursuant to article 154-bis, paragraph 2, of Legislative Decree No. 58/1998 ("Consolidated Law on Finance") that the information contained in this press release corresponds to the document results, books and accounting records.
Note that in this press release, in addition to financial indicators required by IFRS, there are also some alternative performance indicators (e.g. EBITDA) in order to allow a better understanding of the economic and financial management. These indicators are calculated according to the usual market practice.
The Interim Consolidated Report on Operations as at 30 June 2022 will be available to the public at the administrative office, in Grassobbio (Bergamo) Italy, Via Zanica n. 17/O, through the system eMarket-Storage, at , through publication on the company website www.tesmec.com, according to law.
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Tesmec S.p.A. Marco Paredi Investor Relations Manager Tel: +39 035 4232840 – Fax: +39 035 3844606 E-mail: [email protected]
Image Building - Media Relations Alfredo Mele, Carlo Musa Tel: +39 02 89011300 E-mail: [email protected]
This press release is available in the Investors section of the website: http://investor.tesmec.com/en/Investors/PressReleases
Tesmec Group is active in the design, production and marketing of systems and integrated solutions for the construction, maintenance and diagnostics of infrastructures (overhead, underground and railway networks) for the transport of energy, data and materials (oil and derivatives, gas and water), as well as technologies for quarries and surface mining. The Group operates in the following sectors: - Energy. Tesmec Group designs, manufactures and markets machines and integrated systems for the construction and maintenance of overhead and underground power lines, fibre optic networks (Stringing segment), as well as advanced equipment and systems for the automation, efficiency, management and monitoring of high, medium and low voltage electrical networks and substations (Energy Automation Segment); - Trencher. Tesmec Group carries out the design, production, sale and rental of trencher machines functional to four types of activities (excavation and mines, excavations for the installation of pipelines, for the construction of telecommunication and optical fibre infrastructures, excavations for the construction of underground power networks), as well as the provision of specialized excavation services. The trencher machines are rented by the Group both with the operator (hot rental or wet rental) and without the operator (cold rental or dry rental); - Railway. The Group designs, manufactures and markets machines and integrated systems for the installation and maintenance of the railway catenary, devices for the diagnostics of the railway catenary and track, as well as customized machines for special operations on the line.
Born in Italy in 1951 and led by the Chairman and CEO Ambrogio Caccia Dominioni, the Group counts on more than 900 employees and has its production sites in Grassobbio (Bergamo), Endine Gaiano (Bergamo), Sirone (Lecco), Monopoli (Bari) and Bitetto (Bari) in Italy, Alvarado (Texas) in the USA and Durtal in France. It relies on three research and development units in Fidenza (Parma), Padua and Patrica (Frosinone). Listed on the Milan Euronext STAR segment of the MTA Market of the Italian Stock Exchange, the Group boasts a global commercial presence through foreign subsidiaries and sales offices in the USA, in South Africa, West Africa, Australia, New Zealand, Russia, Qatar and China.
In its development strategy, the Group intends to consolidate its position as a solution provider in the three abovementioned business areas, by exploiting the trends of energy transition, digitalization, and sustainability.
Below are the reclassified statements of balance sheet, income statement, statement of cash flows and the prospectus of sources and uses of the Tesmec Group as at 30 June 2022.
| Income statement | As at 30 June | |
|---|---|---|
| (€ in thousands) | 2022 | 2021 |
| Revenues from sales and services | 113,254 | 96,902 |
| Total operating costs | (105,229) | (94,039) |
| Operating income | 8,025 | 2,863 |
| Financial (income) / expenses | (2,000) | (2,323) |
| Foreign exchange gains/losses | 5,310 | 1,138 |
| Share of profit / (loss) of associates and joint ventures | ||
| 48 | 78 | |
| Pre-tax profit | 11,383 | 1,756 |
| Net profit for the period | 7,882 | 1,013 |
| EBITDA | 18,727 | 13,724 |
|---|---|---|
| EBITDA (% on revenues) | 16.5% | 14.2% |
| Balance sheet | ||
|---|---|---|
| 30 June 2022 | 31 December 2021 | |
| (€ in thousands) | ||
| Total non-current assets | 130,925 | 128,643 |
| Total current assets | 247,326 | 229,489 |
| Total assets | 378,251 | 358,132 |
| Total non-current liabilities | 119,464 | 133,749 |
| Total current liabilities | 175,330 | 151,741 |
| Total liabilities | 294,794 | 285,490 |
| Total shareholders' equity | 83,457 | 72,642 |
| Total shareholders' equity and liabilities | 378,251 | 358,132 |
| Summary of the cash flow statement | As at 30 June | |
|---|---|---|
| (€ in thousands) | 2022 | 2021 |
| Net cash flow generated by (used in) operating activities (A) |
(3,058) | (1,620) |
| Net cash flow generated by (used in) investing activities (B) |
(10,051) | (13,032) |
| Net cash flow generated by financing activities (C) |
(4,446) | (16,249) |
| Total cash flow for the period (D=A+B+C) |
(17,555) | (30,901) |
| Cash and cash equivalents at the beginning of the period (F) | 50,189 | 70,426 |
| Effect of exchange-rate changes on cash and cash equivalents (E) |
771 | 160 |
| Cash and cash equivalents at the end of the period (G=D+E+F) | 33,405 | 39,685 |
| ((€ in thousands) | As at 30 June 2022 | As at 31 December 2021 |
|---|---|---|
| Net working capital 3 | 98,135 | 76,536 |
| Fixed assets Other long-term assets and liabilities Net invested capital 4 |
103,868 14,561 216,564 |
102,946 14,172 193,654 |
| Net financial indebtedness 5 | 133,107 | 121,012 |
| Shareholders' equity Total sources of funding |
83,457 216,654 |
72,642 193,654 |
3 The net working capital is calculated as current assets net of current liabilities excluding financial assets and financial liabilities. Net working capital is not recognized as a measure of performance by the IFRS. The valuation criteria applied by the Company may not necessarily be the same as those adopted by other groups and therefore the balance obtained by the Company may not necessarily be comparable therewith.
4 The net invested capital is calculated as net working capital plus fixed assets and other non-current assets less non-current liabilities. The net invested capital is not recognized as a measure of performance under IFRS. The valuation criteria applied by the Company may not necessarily be the same as those adopted by other groups and therefore the balance obtained by the Company may not necessarily be comparable therewith.
5 The net financial indebtedness is calculated as the sum of cash and cash equivalents, current financial assets including available–for–sale securities, non-current financial liabilities, fair value of hedging instruments and other non-current financial assets.
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