Borsa

2018 first nine months results approved

The operating results recorded during the first nine months of 2018 confirm the growth trend already reported in the first two quarters of this year and have to be added to the excellent performance of the last three years.

Financial highlights

  • Consolidated revenue of €208.40 million, up 8.4% compared with the first nine months of 2017 (+10.7% at constant exchange rates);
  • EBITDA equal to €38.28 million (18.4% of revenue for the period), -4.1% compared with the first nine months of 2017;
  • Consolidated adjusted EBITDA equal to €43.64 million (20.9% of revenue for the period), +9.4% compared with the first nine months of 2017;
  • Consolidated net profit equal to €24.80 million (-0.3% compared with the net result for the first nine months of 2017);
  • Adjusted net profit equal to €28.76  million (+15.6% compared with the first nine months of 2017)
  • Consolidated net financial position positive by €14.94 million.

 

Revenue

Revenue totalled €208.40 million compared with €192.19 million as at 30 September 2017, up 8.4% year on year. The performance of several currencies in which the Group operates had a negative effect on this result, in particular the US dollar and the Brazilian real: at constant exchange rates the growth in Group revenue compared with 30 September 2017 would have been 10.7%.
This performance essentially confirms the positive trend already recorded during the first half of the year and derives primarily from a strong growth in the refrigeration sector, equal to approximately 11 million euros (+16.6% compared to the same period of the previous year), driven by Carel's ability to exploit significant business opportunities thanks to innovation and commercial strength. To this is added the important contribution of the HVAC sector, which grew by more than 7 million euros (+6.0% compared to the same period of 2017) in part due to up-selling and cross-selling drivers, also made possible by the Group’s long-term relationship with most of its customers.
From a geographical perspective, at constant exchange rates, an increase has been reported in all areas of reference. Particularly important, in this perspective is the comparison with the first half of the year: in fact the trend reversal in the Asia - Pacific South quadrant, which shifted into positive territory and a growth acceleration in the North America area, is highlighted.
Lastly, note that compared with the same period of the previous financial year, Revenue was positively impacted by a change in the scope of consolidation linked to the full consolidation of Alfaco Polska Sp. z o.o. following the Group taking control on 1 June 2017.

 

EBITDA 

Consolidated EBITDA as at 30 September 2018 stood at €38.28 million, equivalent to 18.4% of revenue for the period, a fall of 4.1% compared with the figure of €39.89 million recorded as at 30 September 2017. This decrease is entirely attributable to the non-recurring costs incurred in the first half of 2018 for Listing on the STAR market of Borsa Italiana S.p.A. (the ‘Listing’), equal to €5.37 million and mainly incurred by the Parent Company.
Excluding these costs, adjusted EBITDA actually stood at €43.64 million (equal to 20.9% of revenue for the period), an increase of 9.4% compared with the same period of the previous year.
This positive performance follows the increase in revenues and is characterised by a significant improvement in efficiency, which offset higher recurring costs mainly linked to the aforementioned Listing, the expansion of the Group's international footprint, together with negative exchange rate effect and the persistent shortage situation in electronic components.

 

Net profit 

The net result of €24.80 million was negatively impacted by the non-recurring effect of the above-mentioned Listing costs. 
Excluding the latter, the (adjusted) net result stood at €28.76 million compared with €24.87 million for the first nine months of the previous year, with an increase of 15.6% for the period (+18.6% at constant exchange rates).

 

Consolidated net financial position

The net financial position was positive by €14.94 million compared with the positive figure of €40.24 million as at 31 December 2017.
This decrease is mainly due to payment of €30 million dividends, partially counterbalanced by significant cash generation. The latter benefited from the growing operating results that covered both greater investments and an increase in net working capital, the latter mainly due to higher inventories linked to the global "shortage" situation of electronic components.

 

Outlook for the management

The performance recorded at 30 September 2018 shows a growth in revenue of 8.4% (10.7% net of the exchange rate impact) substantially in line with expectations, also thanks to the continuous implementation of the strategic guidelines that have historically oriented Group’s actions: innovation, energy saving and Customer care.
This implementation will continue in the last quarter of the year together with the expansion plan for Carel’s industrial footprint through the further development of some production sites, including Croatian, US and Chinese ones.
In the absence of significant changes in the economic and sector scenario, for the 2018 full year, the Group expects to maintain a trend of revenue growth similar to that of the first half of 2018. Excluding non-recurring costs linked to the Listing on the Italian Stock Exchange, profitability (in terms of EBITDA margin) at the end of 2018 is expected to be in line with the one achieved in the previous year. All this should enable cash generation able to confirm the financial soundness of the Group. 

 

Group CEO Statement

Francesco Nalini, Group CEO, stated: “The operating results recorded during the first nine months of 2018 confirm the growth trend already reported in the first two quarters of this year and have to be added to the excellent performance of the last three years. This is  even more important taking into account the Group's ability to increase revenue while maintaining high profitability, measured in terms of EBITDA margin, which, in fact, stands at above 20% (excluding non-recurring costs equal to approximately 5 million euros linked to the listing of the Company on the Italian Stock Exchange in the STAR segment) despite the negative impact due to currency exchange rates, recurring costs arising from the aforementioned listing and some other minor items. The achievement of this result is linked to the pursuit of maximum operating efficiency that, together with constant innovation, energy saving and customer care, constitute Carel's DNA and allow us to look with optimism to the global challenges that await us".


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