Vimi fasteners S p a : 2020.09.30 - Approval of the Consolidated Financial Report as at 30 June 2020

Approval of the Consolidated Financial Report as at 30 June 2020

1. Consolidated revenues of EUR 18.9 million (-22.8% compared to EUR 23.5 million as at 30 June 2019);
2. Consolidated EBITDA of EUR 1.8 million, corresponding to 9.3% of revenues (EUR 2.0 million, or 8.4% of revenues, as at 30 June 2019);

3. Consolidated loss for the year of EUR 0.4 million, corresponding to -2.2% of revenues, (EUR -0.2 million in 2019, or -0.8% of revenues);

4. Consolidated NFP of EUR 21.8 million (EUR 21.4 million as at 30 June 2019 and EUR 19.6 million as at 31 December 2019);

Novellara, 30 September 2020

Today, the Board of Directors of Vimi Fasteners S.p.A. reviewed and approved the Financial Report for the period ending 30 June 2020 referring to the Group's consolidated results, drafted in accordance with the international accounting standards (IAS/IFRS).

MAIN CONSOLIDATED ECONOMIC AND FINANCIAL DATA AS AT 30 JUNE 2020

REVENUES

Revenues for the period amounted to EUR 18.9 million, with a reduction of 22.8% compared to the previous year, following the decline in all sectors in which the Group operates due to the spread of Covid-19.

While the first two months of the year were in alignment with 2019, March, April and May showed a significant reduction in turnover, which then returned in June and July to the levels seen at the beginning of the year.

In particular, the automotive sector, which represents approximately 45% of the Group's turnover, was affected by the general drop in vehicle registrations globally. In fact, sales declined by 46% in the Italian market and by 39.5% in the European market in the first half of 2020 compared to the same period of 2019. Currently, there is a gradual increase in sales due to government incentives approved by the various countries. As at 30 June 2020, the order book showed a significant reduction due to the lockdown that affected businesses around the world; however, in recent months the level of orders has increased, confirming a market demand that is in the process of returning to normal.

EBITDA

EBITDA for the period was slightly lower than the previous year, EUR 1.8 million compared to EUR 2 million as at 30 June 2019. On the other hand, EBITDA as a percentage of revenues improved to 9.29% compared to 8.39% in the previous year.

Faced with a decline in sales volumes, the Companies have implemented a series of containment measures for both direct costs and overhead costs. The ordinary redundancy fund was also used to handle the reduction in production volumes.

NOT FOR DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR IN ANY OTHER JURISDICTION WHERE THIS RELEASE IS NOT ALLOWED.

NET INCOME

The loss for the period was EUR 0.4 million, equal to -2.2% of revenues, compared to a loss of EUR 0.2 million in the previous year, equal to -0.77% of revenues. The latter figure reflects the substantial value of depreciation/amortisation (equal to 11.5% of revenues) relating to production investments made in previous years.

NET FINANCIAL POSITION

The net financial position was negative for EUR 21.8 million, compared to EUR 19.6 million at the end of 2019. This includes IFRS 16 capitalisation costs equal to EUR 4.5 million and an earn-out of EUR 3.8 million for the acquisition of the MF Inox subsidiary.

The temporary increase compared to the end of 2019 is due to the increase in net working capital, which reflects the sudden decline in turnover, the increase in warehouse stock and the reduction in payables to suppliers. In the coming months, net working capital is expected to decline significantly, coinciding with the recovery of business activities, which will bring NFP back in line with the values at the end of 2019.

BUSINESS OUTLOOK

The Covid-19 pandemic, which is still spreading throughout the world, makes it difficult to develop forecasts for the medium-long term.

However, limiting the outlook to the next six months, results are expected to improve, both in terms of order collection and sales. Rationalisation and efficiency initiatives will continue to improve the operating result. Sales in 2020 will decrease compared to the previous year, in relation to the duration and extent of restrictive measures adopted in the main countries in which the Group's products are sold.

While waiting for the health emergency to be resolved, the management will continue with the approaches that were undertaken in the first half, aimed at reducing inventories, improving production efficiency and prudent liquidity management.

SIGNIFICANT EVENTS FOLLOWING THE END OF THE PERIOD

Vimi Fasteners has begun to supply components to a leading European car manufacturer for the production of full electric supercars, and it is expected a significant growth in volumes in the coming years.

Intensive partnerships have also commenced for a new project to develop an Italian supercar that envisages the use of light alloys for high-performance fasteners.

With reference to the industrial sector, Vimi Fasteners has started a long-term partnership with a global leader to supply components used in the production and maintenance of turbochargers for large diesel engines.

Furthermore, a valuable supply contract is being finalised with a leading distributor in the aerospace industry to supply fasteners made with light and highly resistant alloys.

Vimi Fasteners Inc. signed an agency agreement in July with an American distribution company, which is a leader in the supply of fasteners to the largest manufacturing sectors in the US.

At the end of September, an important customer announced that it had begun bankruptcy proceedings. Subsequently, the Group, as a strategic supplier, received a letter ensuring that the outstanding receivable would be collected and business activities would continue in an essentially normal manner.

NOT FOR DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR IN ANY OTHER JURISDICTION WHERE THIS RELEASE IS NOT ALLOWED.

Financial statements

The following schedules are provided below:

• the financial statements of the Consolidated Financial Report as at 30 June 2020 approved today and drafted in accordance with the international accounting standards (IAS/IFRS).

For the other financial statements, please refer to the Consolidated Financial Report as at 30 June 2020, which will be made available on the company's website and has been subject to a limited review by the auditors Deloitte & Touche S.p.A., which issued its report on 30 September 2020.

Consolidated Income Statement as at 30 June 2020

NOT FOR DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR IN ANY OTHER JURISDICTION WHERE THIS RELEASE IS NOT ALLOWED.

Consolidated Statement of Financial Position as at 30 June 2020

NOT FOR DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR IN ANY OTHER JURISDICTION WHERE THIS RELEASE IS NOT ALLOWED.

This is an excerpt of the original content. To continue reading it, access the original document here.