SOGEFI (GRUPPO CIR): RISULTATI IN CRESCITA NEI PRIMI NOVE MESI 2016

Board of Directors approves results as of September 30 2016

SOGEFI (CIR GROUP): RESULTS HIGHER IN FIRST 9 MONTHS
Revenues up by 4.9% in 9M 2016 to € 1.2bnEBITDA up by 25.4% to € 114.5m
Net result at € 15.8m (€ 7.4m in 9M 2015)
Net debt at € 314.1m (€ 339.7m at 30/9/2015)

Milan, October 24 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 as of September 30 2016.

Laurent Hebenstreit, Sogefi's Chief Executive Officer, made the following statement:
'The third quarter confirms the positive revenue trend of the first half of the year, driven by organic growth in North America and Asia. Higher gross margin and EBITDA encourage us to continue our work aimed at improving the company's profitability and cash flow'.

Revenues up 4.9% in 9M 2016

Automotive production in the first nine months of 2016 rose 4%, experiencing double digit growth in Asia and a positive evolution in Europe and North America (+3.5% and +2.6% respectively). In South America the strong recession already observed during the previous year continued in 2016 too.

In this environment, in the first nine months of 2016, Sogefi reported revenues of € 1,181.5 million, up 4.9% compared to € 1,126.6 million in 9M 2015 (+10.2% at the same exchange rates) with a positive contribution from all geographical areas with the exception of South America.

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

In Europe revenues grew by 1.6% compared to 9M 2015. Business continued to develop vigorously in North America and in Asia showing respectively a 20.7% and a 27.3% revenue increase compared to the first nine months of 2015. In South America, sales in euro declined by 13.2% because of the depreciation of the local currencies and the persisting market crisis. Excluding South America, growth was 7.3%, in line with previous quarters.

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

Sogefi's revenue growth in the first nine months of 2016 came largely from the Air & Cooling segment, which reported an 18.4% increase. Revenues of the Suspensions segment grew by 0.3%, (+3.5% excluding South America); and lastly, revenues of the Filtration segment were down by 0.6% (+2.3% excluding South America).

Operating results and net income

EBITDA in the first nine months of 2016 totalled € 114.5 million, up by 25.4% compared to the figure reported in the same period of 2015 (€ 91.3 million). The increase benefited from revenue growth and from the improvement in profitability which increased to 9.7% from 8.1% in the first nine months of 2015 and from 9.3% in of the first half of 2016.

The increase in profitability is due to a slight improvement in gross margin and to the reduction of the ratio of indirect costs to Group revenues from 20.2% to 19.4%. In particular, the ratio of total labour costs to Group revenues declined to 21.5% from the previous 22.3%. All regions with the exception of South America reported increases in EBITDA.

Regarding the risks resulting from the claims made against the company Sogefi Air & Refroidissement France S.A.S. (formerly Systèmes Moteurs), in the first nine months of 2016 there were no developments in the 'product guarantee' issue that warranted a change in the provision made at December 31 2015. As for the recovery of damages from the company Dayco, the vendor of Sogefi Air & Refroidissement France S.A.S, in May the arbitration process ended with Dayco being sentenced to pay Sogefi € 9.4 million for the claims already settled. During the third quarter, Sogefi received from Dayco the amount of € 5.5 million, representing a portion of the compensation due under the arbitration award. The arbitration decision, however, reduced the amount expected to be recovered by Sogefi by € 4 million, with a negative impact of the same amount on the accounts booked in June 2016 (in fact the company intends to appeal against this decision).

EBIT increased by 35.9%to € 58.7 million compared to the first nine months of 2015.

The result before taxes and minority interests grew to € 39.8 million (€ 19.6 million in the first nine months of 2015), benefiting also from a financial income of € 6 million due to the recovery of tax credits on foreign dividends distributed in previous years.

The net result was a positive€ 15.8 million, versus € 7.4 million in the first nine months of 2015.

Net debt

Net financial debt stood at € 314.1 million at September 30 2016, showing a € 8.2 million decline on December 312015 (€ 322.3 million) and a € 25.6 million decline on September 30 2015 (€ 339.7 million).

Free Cash Flow in the first nine months amounted to a positive € 12.3 million, compared to a negative balance of € 44.3 million in the same period of 2015. The improvement is attributable for approximately € 26.6 million to lower disbursements of a non-ordinary nature for product guarantees, restructuring and fiscal disputes, and for € 33 million to a better performance of operating cash flow.

Shareholders' equity

At September 30 2016 shareholders' equity excluding minority interestsamounted to € 173.7 million
(€ 170.8 million at December 31 2015).

Employees

The Sogefi group had 6,811employees at September 302016 compared to 6,689 at September 30 2015.

Outlook for the year

For the whole of 2016 Sogefi expects revenue growth similar to that of the first nine months of the year. Gross margin and EBITDA are expected to improve versus 2015 in line with what was seen in the first nine months of the year.

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.