Immsi Group: 2019 draft financial statements

IMMSI GROUP: 2019 DRAFT FINANCIAL STATEMENTS1    Consolidated net sales 1,590.7 million euro, up 8.6% (1,464.5 €/mln in 2018)   Adjusted Ebitda2 228 million euro, up 6.9% (Ebitda3 222.6 €/mln, the best Ebitda since 2003) (213.3 €/mln in 2018). Adjusted Ebitda margin 14.3% Adjusted (Ebit)2 108 million euro, up 7.4% (Ebit3 95.3 €/mln)(100.6 €/mln in 2018). Adjusted Ebit margin 6.8%   Adjusted profit before tax2 67.5 million euro, up 15.2%(Profit before tax3 53.4 €/mln) (58.6 €/mln in 2018)   Adjusted net profit including minority interests2 32.9 million euro, up 29.5% (non-adjusted result3 23 €/mln)(25.4 €/mln in 2018)   Adjusted consolidated net profit2 17.6 million euro, up 36.4%(consolidated net profit3 7.9 €/mln)(12.9 €/mln in 2018)   Net financial position -796.4 €/mln, an improvement of 55.6 €/mln from -852 €/mln at 31.12.2018   Capital expenditure 143.6 million euro, up 21.9% (117.8 €/mln in 2018)   * * *   Authorisation for the purchase and disposal of own shares   Mantua, 25 March 2020 – At a meeting today chaired by Roberto Colaninno, the Board of Directors of Immsi S.p.A.(IMS.MI) examined and approved the 2019 draft financial statements.   Immsi Group financial and business performance at 31 December 2019    The Immsi Group is maintaining its strategic focus on geographical expansion consistent with product strategies and with world macro-economic trends. This management model significantly reduces the risks of an excessive concentration of production and sources of income in a single country, and enables the Group to maximise returns in countries with the highest economic growth rates. At the same time, on-going analysis of the latest international trade policies and current socio-political developments confirms that geographical diversification enables the Group to meet the growing demand for quality among all the customers of its subsidiaries without increasing production costs, while simultaneously improving time to market. Consolidated net sales for the year ended 31 December 2019 totalled 1,590.7 million euro, up by 8.6% from 1,464.5 million euro in 2018.   Immsi Group adjusted consolidated Ebitda4 was 228 million euro (14.3% of net sales), up 6.9%.   Consolidated Ebitda5 amounted to 222.6 million euro, the best figure since 2003, with an increase of 4.4% from 213.3 million euro in 2018. The Ebitda margin was 14% (14.6% at 31 December 2018).   Adjusted consolidated Ebit4 was 108 million euro (6.8% of net sales), up 7.4%.   Consolidated Ebit5was 95.3 million euro (100.6 million euro at 31 December 2018). The Ebit margin was 6% (6.9% at 31 December 2018).   Adjusted profit before tax4 was 67.5 million euro, up 15.2%. Profit before tax5was 53.4 million euro (58.6 million euro at 31 December 2018).   Adjusted net profit including minority interests4 was 32.9 million euro, up 29.5%.  Net profit including minority interests5was 23 million euro (25.4 million euro at 31 December 2018).   Adjusted consolidated net profit4was 17.6 million euro, up 36.4%. Consolidated net profit5 was 7.9 million euro (12.9 million euro at 31 December 2018).   Immsi Group net financial debt at 31 December 2019 (including the negative effects of 23.1 million euro from application of IFRS16, and 9.8 million euro from the interim dividend distributed by Piaggio & C. S.p.A.),was 796.4 million euro, an improvement of 55.6 million euro from 852 million euro at 31 December 2018, mainly as a result of the sale by Immsi S.p.A. of the property in via Abruzzi, Rome (see press release dated 20/12/2019). Adjusted net financial debt excluding the above effects stood at 826 million euro, an improvement of 26 million euro from 852 million euro at 31 December 2018.   In 2019, Immsi Group capital expenditure amounted to 143.6 million euro, an increase of 21.9% from 117.8 million euro in 2018.   The Group's operations present seasonal variations in sales over the course of the year, especially in the industrial sector.   Performance of the Immsi Group businesses at 31 December 2019     Industrial Sector: Piaggio Group   In 2019, the Piaggio Group reported a significant improvement in performance from the previous year, with progress on all the main earnings indicators, an increase in net profit, higher capital expenditure and a reduction in debt.   At 31 December 2019, Piaggio Group consolidated net sales totalled 1,521.3 million euro (+9.5%); consolidated Ebitda was 227.8 million euro (+12.9%), with an Ebitda margin of 15%, the best result since 2006, when the Group was admitted for trading; Ebit was 104.5 million euro (+12.7%), with an Ebit margin of 6.9%; net profit rose by 29.6% to 46.7 million euro. Piaggio Group adjusted net financial debt6 at 31 December 2019 was 389.7 million euro, an improvement of 39.5 million euro from debt of 429.2 million euro at 31 December 2018. During 2019, the Piaggio Group sold 611,300 vehicles worldwide, an increase of 1.3%.   Naval Sector: Intermarine S.p.A.    In the naval sector, at 31 December 2019 Intermarine S.p.A. reported consolidated net sales of 64.6 million euro, Ebitda of 12.3 million euro (Ebitda margin of 19%); Ebit of 8.8 million euro (Ebit margin 13.6%) and net profit of 4.8 million euro. Specifically, net sales consisted of 54 million euro in the Military Sector and 10.6 million euro in the Fast Ferries and Yacht division, relating largely to operations at the Messina shipyard and the Marine Systems division.   Real Estate and Holding sector  The Real Estate and Holding sector had net sales of 4.8 million euro at 31 December 2019.   The subsidiary Is Molas S.p.A., which manages the Is Molas Golf Resort project in the province of Cagliari, completed four showhomes and took the remaining 11 villas in the first batch to an advanced unfinished stage, to enable potential clients to select floorings and internal finishes. The company examined the possibility of leasing the showhomes in order to enable end customers, including investors, to become familiar with the product and related services on offer. Commercial operations are underway to identify possible national/international purchasers.   * * *  Immsi S.p.A. parent company   The parent Immsi S.p.A. posted a net profit for the year of approximately 9 million euro (6.7 million euro at 31 December 2018). Excluding the effects of IFRS 16 and non-recurring expenses relating to the sale of the property in Via Abruzzi, Rome, net profit would have been 18.5 million euro. The increase from the previous year was largely due to the higher dividends distributed by Piaggio net of value adjustments on equity investments in portfolio. The net financial position of the parent Immsi S.p.A. at 31 December 2019 reflected cash of 12.5 million euro, an increase of 77.5 million euro from net financial debt at 31 December 2018 (65 million euro); the increase was largely due to the proceeds collected on the sale of the property in Rome and collection of larger dividends from Piaggio.   The Board of Directors will ask the Shareholders’ Meeting (to be held on 14 May 2020 on first call and, if required, on 28 May 2020 on second call) to not distribute a dividend for financial year 2019 (a similar proposal was approved for financial year 2018).   * * * Significant events in and after 31 December 2019     Supplementing the information published above or at the time of approval of the 2019 third-quarter results (directors’ meeting of 13 November 2019), this section illustrates key events in and after 2019.   On 18 December 2019, in New Delhi, the Piaggio Group presented the new Ape E-City, the full-electric version of the Piaggio three-wheeler, which marks the Group’s entry into the Indian electric commercial vehicle market. The Ape E-City features battery-swap technology, enabling a depleted battery to be replaced in minutes with a charged battery at automated service stations.   As announced on 20 December 2019, Immsi S.p.A. completed the sale of the property located in Rome between via Abruzzi 25 and via Sardegna 38/40 for a price of 62.5 million euro.   On 24 January 2020, the Piaggio Group announced the start-up of the production in India of three-wheel vehicles compliant with the new Bharat Stage VI emissions norms, making Piaggio the first three-wheeler maker in the country to have upgraded its entire range to the new standards.   At the international Auto Expo 2020 tradeshow in Delhi, on 10 February 2020 the new Aprilia SXR 160 scooter for the Indian market, was presented. The new model broadens the offer and numeric potential of the range of high-end products, previously represented in India by Vespa and Aprilia SR 150.   On 3 March 2020, Intermarine effected the administrative handover to the Italian Navy of the Tullio Tedeschi high-speed multipurpose patrol boat (UNPAV – Cabrini Class). The boat, which was delivered on schedule, is the second of two UNPAVs commissioned from Intermarine by the Italian Navy in October 2016 for a total of 40 million euro, and was constructed in compliance with the highest quality standards.   In response to the international Covid-19 health emergency, the Piaggio Group immediately took action to implement the limitations decreed by the Italian Government, and also introduced additional limitations in agreement with the unions. Apart from a short interruption so that new sanitary precautions could be implemented in order to safeguard worker safety, production at the Piaggio Group’s Italian factories continued until Friday 20 March. The Italian Government Decree of 22 March ordered the closure of non-strategic operations and consequently since Monday 23 March the Group's Italian factories (Pontedera, Mandello del Lario, Noale and Scorzè) are temporarily on stoppage, until 3 April.     * * * Outlook    In the Industrial Sector, despite an impact on the world economy from the Covid-19 virus at least in the first part of the year, the Piaggio Group is managing the effects on its supply chain without any particular impacts on its production facilities (located in Italy, India and Vietnam), and will continue to take action to strengthen its positioning on the global markets.   Furthermore, considering the product portfolio and its diversified international production and commercial presence, which will enable it to mitigate any negative effects, the Group is committed to:   confirming its leadership position on the European two-wheeler market, taking full advantage of the expected recovery by further strengthening its scooter and motorcycle range;maintaining its current positions on the European commercial vehicles market by strengthening the sales network;consolidating its presence in Asia Pacific, by exploring new opportunities in countries in the region, with a particular focus on the premium segment of the market;increasing sales on the Indian scooter market thanks to the Vespa and Aprilia offers;growing the penetration of commercial vehicles in India, in part through the introduction of new engine displacements.   From the technological viewpoint, the Piaggio Group will continue research on new solutions to current and future mobility problems, through the work of Piaggio Fast Forward (Boston) and new advances in design at the PADc (Piaggio Advanced Design Center) in Pasadena.   More generally, the Group maintains the commitment that has always characterised its operations to grow productivity once again in 2020, with close attention to cost and investment efficiency, and will carefully monitor the situation in order to take any necessary action to guarantee the satisfaction of all Group stakeholders.   In the Naval Sector (Intermarine S.p.A.), 2020 will see advances in production work on contracts, in order to strengthen the financial consolidation of recent years. In the Defence sector, the company is presenting minesweeper and patrol-boat projects to a number of foreign Navies, and is also monitoring the fleet modernisation requirements of the Italian Navy. The aim is to win new orders that would expand the order book and consequently optimise production capacity over the coming years.   In the Real Estate and Holding Sector, the Is Molas S.p.A. subsidiary is proceeding with commercial activities to identify possible purchasers, in Italy and abroad.   * * * Non-Financial Disclosure   At today’s meeting, the Board of Directors approved the Immsi S.p.A. consolidated Non-Financial Disclosure drawn up pursuant to legislative decree 254/2016, included in the Directors’ Report on Operations as at and for the year ended 31 December 2019.   * * *   Authorisation for the purchase and sale of own shares   At today’s meeting, the Board of Directors also agreed to ask the ordinary session of the shareholders' meeting to renew the authorisation for the purchase and disposal of Immsi own shares granted by the AGM of 14 May 2019, which is due to expire during 2020. The proposal aims to provide the company with a useful strategic investment opportunity for all purposes allowed under current regulations, including the purposes contemplated in art. 5 of EU Regulation 596/2014 (Market Abuse Regulation, hereinafter “MAR”) and in the practices allowed under art. 13 MAR, including purchases of own shares for subsequent cancellation, on the terms and conditions that will be approved by the relevant governance bodies. All information relating to the terms and procedures of the authorisation will be set out in the Report on the purchase and disposal of own shares, which will be made available to shareholders as required by law.   * * *   The manager in charge of preparing the company accounts and documents, Andrea Paroli, certifies, pursuant to paragraph 2 of art. 154-bis of the Consolidated Law on Financial Intermediation, that the accounting disclosures in this statement correspond to the accounting documents, ledgers and entries.   This press release may contain forward-looking statements relating to future events and Immsi Group business and financial results. By their nature, these statements are subject to inherent risks and uncertainties, since they relate to events and depend on circumstances that may or may not occur or exist in the future. Actual results may differ materially from those expressed in such statements as a result of a variety of factors.   This press release contains a number of indicators that, though not yet contemplated by the IFRS (“Non-GAAP Measures”), are based on financial measures envisaged by the IFRS. These indicators – presented in order to assist assessment of the Group’s business performance – should not be considered as alternatives to those envisaged by the IFRS and are consistent with those in the Immsi Group 2018 Annual Report and quarterly and half-year reports. Furthermore, since determination of such indicators is not specifically regulated by the IFRS, the methods used may not coincide with those adopted by other companies/groups, and consequently the indicators in question may not be comparable. Specifically, the following alternative performance indicators are used:   EBITDA: earnings before amortisation and impairment losses on property, plant and equipment and intangible assets, as reflected in the income statement;Net financial debt: this reflects financial liabilities (current and non-current), less cash and cash equivalents, and other financial receivables (current and non-current). Determination of net financial debt does not include other financial assets and liabilities arising from measurement at fair value of derivatives designated as hedges, fair value adjustments of the related hedged items, related accruals, interest accrued on loans and financial liabilities relating to discontinued operations. The schedules in the Annual Report as at and for the year ended 31 December 2019 include a table illustrating the composition of net financial debt. In this regard, in compliance with CESR recommendation of 10 February 2005 “Recommendation for uniform enactment of the European Commission regulation on disclosures”, attention is drawn to the fact that the indicator determined as described represents the amount as monitored by Group management and differs with respect to Consob Communication no. 6064293 of 28 July 2006, since it also includes non-current financial receivables.  In preparing the Annual Report as at and for the year ended 31 December 2019, the Immsi Group applied the accounting policies used in preparing the 2018 Annual Report with the exception of adoption as from 1 January 2019 of IFRS 16 governing recognition of operating leases.   Immsi S.p.A. said that the Annual Report as at and for the year ended 31 December 2019 will be available to the public at the company head office, in the “eMarket STORAGE” authorised storage mechanism at www.emarketstorage.com and on the issuer’s website www.immsi.it (section “Governance/GeneralMeeting/Archive/2020”and section “Investors/FinancialReports/2020”) as required by law.   The Immsi Group consolidated statement of financial position, consolidated income statement and consolidated statement of cash flows, and the Immsi S.p.A. statement of financial position, income statement and statement of cash flows are set out below. At the time of publication of this press release, the audit of the Immsi Group consolidated financial statements, the Immsi S.p.A. separate financial statements and the non-financial disclosure ex 254/2016 at 31 December 2019 had not been completed. 1The results of operations, equity and financial figures for the year to 31.12.2019 reflect the effects of IFRS 16 on the accounting treatment of operating leases and some non-recurring operations. For the purposes of an uniform comparison with figures at 31.12.2018, which has not been restated in accordance with the new reporting standard, the most significant effects of the standard and of non-recurring operations are highlighted in the comments on the individual items affected.2Amount net of the effects of IFRS 16 and non-recurring operations.3Amount including the effects of IFRS 16 and non-recurring operations.4Amount net of the effects of IFRS 16 and non-recurring operations.5Amount including the effects of IFRS 16 and non-recurring operations.6Adjusted net financial position: Net financial position of the Piaggio Group at 31 December 2019 net of 19 €/mln from application of IFRS 16 as from 1 January 2019 and net of 19.7 €/mln as a result of a change in the dividend distribution policy introduced in July 2019.