Sogefi (CIR Group): strong growth in results in Q1 2017

SOGEFI (CIR GROUP): STRONG GROWTH IN RESULTS IN Q1 2017
Revenues up by 12.6% to € 439.1m
Sales higher in all geographical areas and Business Units
EBITDA at € 45.1m, up by 30.2%
Net income at € 11.6m (€ 2.9m in Q1 2016)Net debt reduced to € 291.4m (€ 322.6m as of end March 2016)

Milan, April 26 2017 - 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 for the first quarter of 2017.

Laurent Hebenstreit, Chief Executive Officer of Sogefi, made the following statement:
'Results of the first quarter of 2017 confirm the effect of the turnaround actions aimed at increasing profitability and cash generation'.

Revenues up by 12.6%

In the first quarter of 2017 the global automotive market reported an increase in production of 5.8%, with steady growth in Asia (+6.8%) and in Europe (+4.2%), a more modest increase in North America (+2.5%) and a rebound in South America (+19.1%).

In this environment, Sogefi reported revenues of € 439.1 million,up 12.6% compared to € 390.1 million of the first quarter of 2016 (+11% at constant exchange rates).

Sogefi: outperformed reference market including in Europe

All geographical areas contributed to the significant growth in sales in the quarter.
In Europe, revenues increased 8.2%, outperforming the reference market (+4.2%).

Business continued to develop vigorously in North America (+15.4%) and in Asia (+26.4%) which together now represent 27.5% of total revenues.
In South America, sales increased by 30.6%, reflecting the market rebound and the positive exchange rates (+14.1% at constant exchange rates).

Positive performance for the three Business Units

In the first quarter, all three Business Units reported significant growth: Air & Cooling +17.8% (+15.7% at constant exchange rates), Filtration +13.8% (+12.1% at constant exchange rates) and Suspensions +7.1% (+6% at constant exchange rates).

Operating results and net income

EBITDA, at € 45.1 million,increased 30.2% compared to € 34.6 million for the same period of 2016. The increase benefitted from the revenue growth and from the improvement in profitability, which increased from 8.9% to 10.3%.
The increase in profitability was due to a further improvement in the contribution margin and to the reduced impact of indirect costs. In particular, the ratio of total labour costs to revenues declined from 21.7% in first quarter 2016 to 20.5% in the same period of 2017.
EBIT,at € 26.8 million, increased by 67.5% compared to the first quarter of 2016 (€ 16 million) and represents 6.1% of total sales.

The result before taxes and non-controlling interests was € 20.4 million (€ 7.5 million in the first quarter of 2016), after financial expense of € 6.4 million, lower than the € 8.5 million in the same period of 2016.

The net result was € 11.6 million (€ 2.9 million in the first quarter of 2016).

Regarding the risks resulting from the claims made against Sogefi Air & Cooling S.A.S. (formerly Systèmes Moteurs S.A.S.), in the first quarter of 2017 there were no developments.

Net debt

Free Cash Flow in first quarter of 2017 amounted to a positive € 6.9 million, compared to a cash flow breakeven in the same period of 2016 (€ -0.2 million). The improvement is attributable to a better operating performance of the Group.

Net financial debt at March 31 2017 stood at € 291.4 million, showing an improvement of € 7.6 million versus December 312016 (€ 299 million) and of € 31.2 million versus March 31 2016 (€ 322.6 million).

Shareholders' equity
At March 31 2017 shareholders' equity excluding minority interestsamounted to € 186.5 million (€ 172.9million at December 31 2016).

Employees

The Sogefi group had 6,815employees at March 31 2017 compared to 6,801 at December 31 2016.

Outlook for the year

For the automotive market, after a first quarter of sustained growth, the outlook for 2017 shows a positive trend, albeit at a slower pace.

Concerning Sogefi, the positive performance recorded in the first quarter confirms the projected improvement in profitability for 2017.

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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.

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