PRESS RELEASE
Turin, 1 August 2014 - The Board of Directors of Pininfarina S.p.A., chaired by Paolo Pininfarina, met today and approved the Group's interim financial report for the first half of 2014. The key financial figures of the Pininfarina Group as at and the first six months of 2014 and 2013 are as follows:
(€'million) | FIRST HALF 2014 | FIRST HALF 2013 | 31/12/2013 | Variation * |
Value of production | 40.0 | 40.0 | - | |
EBITDA | -0.5 | -2.1 | 1.6 | |
EBIT | -2.1 | -2.8 | 0.7 | |
Loss for the period | -4.5 | -6.3 | 1.8 | |
Net financial debt | -51.6 | -41.8 | -36.4 | -15.2 |
Equity | 25.0 | 33.4 | 29.4 | -4.4 |
* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2013.
EBITDA is the operating profit or loss gross of amortisation, depreciation and provisions. EBIT is the operating profit or loss.
Pursuant to article 154-bis.2 of the Consolidated finance act, the manager in charge of financial reporting, Gianfranco Albertini, states that the financial disclosures provided in this press release are consistent with the relevant documentation, ledgers and accounting records.
The most significant issues that arise from an analysis of the consolidated figures for the first six months of 2014 are summarised below:
- the value of production (revenue) is in line with the corresponding figures for the first half of
2013;
- EBITDA and EBIT are negative, but show a considerable improvement compared to the corresponding period of the previous year, with EBITDA approximating break-even;
- compared to the first six months of 2013, the Group's Italian automotive operations reduced significantly their loss, the German subsidiaries' profit margins are slightly smaller, while profitability improved in China. The turnover of industrial design activities is good and their profitability increased;
- the loss for the period decreased by roughly 29% thanks to smaller operating losses and a reduction in net financial expense for the period;
- the Group's financial position at 30 June 2014 deteriorated compared to 31 December
2013, as a result of the loss for the period and the reduction in liquidity due to net working capital trends and the outlays required by several tax disputes.
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PRESS RELEASE
Specifically, value of production came to €40 million for the reporting period, substantially in line with the corresponding period of the previous year (€39.5 million).
EBITDA is a negative €0.5 million, showing a sharp improvement on the €2.1 million loss of the first half of 2013, including as a result of gains on the sale of assets of €0.7 million. EBITdecreased by roughly €0.7 million from €2.8 million to €2.1 million.
Net financial expense decreased to €2.2 million, down by €0.9 million on the corresponding period of the previous year. The improvement is mainly due to the decrease in interest expense (realised and unrealised) calculated on a smaller amount of loans and borrowings due to the
repayments made compared to the first half of 2013 and fair value gains on securities in portfolio. The loss before taxes amounts to €4.3 million, compared to €6.0 million for the six months ended
30 June 2013. The loss for the period (net of taxes of €154 thousand) totals €4.5 million, down by
€1.8 million on the €6.3 million loss for the first half of 2013.
30 June 2013). The €15.2 million increase in net financial debt is caused by the advances due for a number of tax disputes (€6.6 million), with the difference (€8.6 million) mainly due to net working capital trends.
Equity attributable to the owners of the parent decreased from €29.4 million at 31 December
2013 to €25 million (€33.4 million at 30 June 2013) as a result of the loss for the period.
The headcount decreased by 18.4% from 817 at 30 June 2013 to 667. The figure at 30 June 2013 included 31 employees of Pininfarina Maroc, which was sold at the end of 2013. Moreover, the redundancy programme due to discontinuation of production activities launched in October 2011 and involving 87 employees terminated in May 2014.
In addition to the sale of spare parts for cars manufactured in previous years and business lease income, this segment includes the costs of the support and property management functions of the parent, Pininfarina S.p.A.. Value of production decreased by 25.5% from €4.7 million for the first half of 2013 to €3.5 million.
Segment EBIT worsened by €0.6 million, or 15.4%, to a negative €4.5 million from a negative €3.9 million in the corresponding period of the previous year. The decrease in turnover and rise in the
operating loss are mainly attributable to a reduction in sales of spare parts and smaller business
lease income for the Bairo Canavese facility, which were partly offset by gains on the sale of assets of approximately €0.7 million.
This segment, comprising the design and engineering businesses, recognised value of production of €36.5 million, up by €4.9% compared to the first half of 2013 (€34.8 million).
Segment EBIT amounted to a positive €2.4 million, an increase from the €1.0 million for the six months ended 30 June 2013, thanks to an improvement in profitability recorded by most of the
group companies.
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PRESS RELEASE
Information required by Consob (the Italian Commission for listed companies and the stock exchange) pursuant to article 114.5 of Legislative decree no. 58/98
1) The tables showing the net financial debt of the Pininfarina Group and Pininfarina S.p.A., with separate classification of current and non-current items, are attached hereto.
2) The Group has no past-due liabilities (of a commercial, financial, tax or social security nature). No actions against the Group have been filed by creditors.
3) The tables showing the parent's and Group's related party transactions are attached hereto.
4) Compliance with the financial covenants in force for the current reporting year will be checked when the annual consolidated financial statements at 31 December 2014 are approved. At present, the Group is expected to comply with such covenants.
5) The parent's debt restructuring plan is proceeding in accordance with the current agreements.
6) The business plan's implementation progress is unchanged with respect to that described in the directors' report on the 2013 annual financial statements.
The key financial figures of the parent, Pininfarina S.p.A., are summarised below.:
(€'million) | FIRST HALF 2014 | FIRST HALF 2013 | 31/12/2013 | Variation * |
Value of production | 23.8 | 23.6 | 0.2 | |
EBITDA | -1.9 | -3.1 | 1.2 | |
EBIT | -3.2 | -3.4 | 0.2 | |
Loss for the period | -4.3 | -5.9 | 1.6 | |
Net financial debt | -52.6 | -42.2 | -39.2 | -13.4 |
Equity | 27.9 | 38.0 | 32.1 | -4.2 |
* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2013.
EBITDA is the operating profit or loss gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of provisions. EBIT is the operating profit or loss.
Events after the reporting period
On 30 May 2014, the tax authorities notified Pincar S.r.l., the parent of Pininfarina S.p.A., of 14 orders for payment of taxes and decisions to impose penalties ("Orders"), for a total amount of
€1,217,250.40, including interest accrued up to the Order issue date. With such Orders, the tax authorities allege that Pincar failed to pay the registration tax on certain agreements signed by
Pincar and the lending institutions in Lugano (Switzerland) in 2009.The ultimate parent appealed against the Orders in July 2014. The lending institutions were notified of similar orders for payment
of their pro rata portion of tax, penalties and interest. Under the Rescheduling Agreement, Pininfarina agreed to directly pay or reimburse "any and all costs, taxes and related legal costs
incurred by the lending institutions in connection with the drafting, negotiation, signing, execution and implementation of the financial documentation". Based on this obligation and in order to avoid any additional outlays, the Board of Directors of Pininfarina S.p.A. resolved to grant a loan of
€603,000 to the ultimate parent, which did not have the funds necessary to make the advance payment required by the law for appeals. The loan accrues annual interest at market rates and has
a term of ten years. It can be used only for the tax purposes mentioned above and bears an acceleration clause. Pininfarina S.p.A. had already granted a €964,000 loan to Pincar S.r.l. in February 2014, with the same terms and for the same reasons as above (alleged failure to pay the
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PRESS RELEASE
registration tax on the agreements signed by Pincar and the lending institutions in Lugano
(Switzerland) on 31 December 2008.
There are no other significant events that occurred after the reporting date.
Consolidated value of production for 2014 is expected to be in line with the 2013 figure and the
EBIT is forecast to be positive.
The net financial debt at the end of 2014 is expected to worsen compared to 31 December 2013, mainly due to a decrease in liquidity as a result of net working capital trends, the outlays required by several tax disputes and the accumulated unrealised losses resulting from the measurement of financial liabilities at amortised cost.
Contacts: Pininfarina:
Gianfranco Albertini, CFO and Investor Relators, tel. +39.011.9438367
Francesco Fiordelisi, Corporate and Product Communication Manager, tel. +39.011.9438105/335.7262530
Studio Mailander:Carolina Mailander, tel. +39.011.5527311/335.6555651
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RECLASSIFIED FINANCIAL STATEMENTS (*)PRESS RELEASE
(*) The reclassified financial statements group the figures presented in the legally-required statements to improve their understanding, without however changing their presentation logic.
The term "EBIT" used in the reclassified income statement corresponds to the "Operating profit (loss)"
presented in the IFRS-compliant financial statements.
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PININFARINA GROUP RECLASSIFIED INCOME STATEMENT(€'000)
PRESS RELEASE
First half
2014 %
First half
2013 % Variation 2013
Revenue from sales and services 36,372 90.87 30,808 77.99 5,564 69,064
Change in inventories and contract work in progress 1,307 3.26 4,581 11.60 (3,274) 3,325
Other revenue and income 2,346 5.87 4,115 10.41 (1,769) 7,369
Value of production 40,025 100.00 39,504 100.00 521 79,758
Net gains on the sale of non-current assets 705 1.76 2 0.01 703 1
Materials and services (*) (15,736) (39.32) (16,506) (41.78) 770 (35,295) Change in raw materials (556) (1.38) (58) (0.15) (498) 494
Value added 24,438 61.06 22,942 58.08 1,496 44,958
Labour cost (**) (24,899) (62.21) (24,998) (63.28) 98 (47,535) EBITDA (461) (1.15) (2,056) (5.20) 1,595 (2,577) Amortisation and depreciation (1,678) (4.19) (1,697) (4.29) 19 (3,392)
(Additions to)/utilisation of provisions and impairment losses 17 0.04 922 2.32 (905) 2,634
EBIT (2,122) (5.30) (2,831) (7.17) 709 (3,335)
Net financial expense (2,192) (5.47) (3,133) (7.93) 941 (5,776) Share of profit (loss) of equity-accounted investees 5 0.01 5 0.0116 0 (3)
Loss before taxes (4,309) (10.76) (5,959) (15.09) 1,650 (9,114) Income taxes (154) (0.39) (231) (0.58) 77 (112) Loss from continuing operations (4,463) (11.15) (6,190) (15.67) 1,727 (9,226) Loss from discontinued operations - - (89) (0.23) 89 (1,161)
Loss for the period (4,463) (11.15) (6,279) (15.90) 1,816 (10,387)
(*) Materials and services are net of utilisations of the provisions for product warranty and risks (€277 thousand and €44 thousand for the first six months of 2013 and 2014, respectively).
(**) Labour cost is net of utilisations of the restructuring and other provisions (€769 thousand and €1,647 thousand for the first six
months of 2013 and 2014, respectively).
As required by Consob resolution no. DEM/6064293 of 28 July 2006, a reconciliation of the data in the condensed interim consolidated financial statements with those in the reclassified schedules is provided below:
- Materials and services include raw materials and components, other variable production costs, external variable engineering services, exchange rate gains and losses
and other expenses.
- Amortisation and depreciation comprise amortisation of intangible assets and depreciation of property, plant and equipment and investment property.
- (Additions to)/utilisation of provisions and impairment losses include additions to/utilisation of provisions, impairment losses and inventory write-downs.
- Net financial expense comprises net financial expense and dividends.
Following the sale of the investment in the subsidiary Pininfarina Maroc SAS, effective as from 1 December 2013, the 2013 half year figures have been restated in accordance with IFRS 5 to separate the results of discontinued operations.
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PININFARINA GROUPPRESS RELEASE
RECLASSIFIED STATEMENT OF FINANCIAL POSITIONNet non-curre nt asse ts (A)
30.06.2014 31.12.2013 Variation 30.06.2013
Net intangible assets 2,698 2,772 (74) 3,066
Net property, plant and equipment and investment
property 61,951 63,008 (1,057) 63,915
Equity investments 307 303 4 361
Tota l A 64,956 66,083 (1,127) 67,342
Working ca pital (B)
Inventories 7,337 6,587 750 7,290
Net trade receivables and other assets 33,457 23,175 10,282 31,174
Assets held for sale - - - -
Deferred tax assets 1,015 947 68 934
Trade payables (14,335) (15,211) 876 (12,054) Provisions for risks and charges (977) (2,698) 1,721 (4,890) Other liabilities (*) (9,611) (5,911) (3,700) (7,335) Tota l B 16,886 6,889 9,997 15,119
Net invested capita l (C=A+B) 81,842 72,972 8,870 82,461
Post-employment be nefits (D) 5,239 7,146 (1,907) 7,225
Net capital requirements (E=C-D) 76,603 65,826 10,777 75,236
Equity (F) 24,955 29,419 (4,464) 33,431
Net financial debt (G)
Non-current loans and borrowings 81,052 7,442 73,610 90,940
Net current financial debt (29,404) 28,965 (58,369) (49,135)
Tota l G 51,648 36,407 15,241 41,805
Tota l as in E (H=F+G) 76,603 65,826 10,777 75,236
(*) Other liabilities include the following items: deferred tax liabilities, other financial liabilities, current tax liabilities and other liabilities.
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PININFARINA GROUP NET FINANCIAL DEBT(€'000)
PRESS RELEASE
30.06.2014 31.12.2013 Va riation 30.06.2013
Cash and cash equivalents 13,175 18,394 (5,219) 31,768
Current assets held for trading 30,711 41,952 (11,241) 52,312
Current loans and receivables - - - - Loan assets - related parties and joint ventures - - - - Current bank overdrafts - - - - Current financial lease liabilities (5,827) (51,992) 46,165 (16,898) Current portion of bank loans and borrowings (8,655) (37,319) 28,664 (18,047) Net current financial position (debt) 29,404 (28,965) 58,369 49,135
Non-current loans and receivables - third parties - - - - Non-current loans and receivables - related parties and
joint ventures 1,119 80 1,039 51
Non-current held-to-maturity investments - - - - Non-current finance lease liabilities (47,731) - (47,731) (49,942) Non-current bank loans and borrowings (34,440) (7,522) (26,918) (41,049) Non-current loans and borrow ings (81,052) (7,442) (73,610) (90,940)
NET FINANCIAL DEBT (51,648) (36,407) (15,241) (41,805)
Cash and cash equivalents include a restricted account of €5,000,000. Reference should be made to note 12 for further details. Current assets held for trading include restricted assets of €2,402,065. Reference should be made to note 7 for further details.
Following the lending institutions' waiver of their rights arising from the group's failure to comply with the 2013 consolidated EBITDA
covenant on 2 April 2014, liabilities have been reclassified in line with the due dates provided for by the Rescheduling Agreement.
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PININFARINA S.p.A. RECLASSIFIED INCOME STATEMENT(€'000)
PRESS RELEASE
First half | First half | ||||
2014 | % | 2013 | % | Variation | 2013 |
Revenue from sales and services 21,235 89.24 16,641 70.37 4,594 38,155
Change in inventories and contract work in progress 600 2.52 3,529 14.92 (2,929) 3,469
Other revenue and income 1,961 8.24 3,479 14.71 (1,518) 6,423
Value of production 23,796 100.00 23,649 100.00 147 48,047
Net gains on the sale of non-current assets 705 2.96 2 0.01 703 ( 769) Materials and services (*) (13,122) (55.14) (13,393) (56.62) 271 (29,153) Change in raw materials (556) (2.34) (58) (0.25) (498) 494
Value added 10,823 45.48 10,200 43.14 623 18,619
Labour cost (**) (12,757) (53.61) (13,299) (56.23) 542 (24,592)
EBITDA (1,934) (8.13) (3,099) (13.09) 1,165 (5,973)
Amortisation and depreciation (1,275) (5.36) (1,287) (5.44) 12 (2,562) (Additions to)/utilisation of provisions and impairment losses 30 0.13 981 4.15 (951) 1,257
EBIT (3,179) (13.36) (3,405) (14.38) 226 (7,278) Net financial expense (1,207) (5.07) ( 2,498) (10.56) 1,291 (5,109) Loss before taxes (4,386) (18.43) (5,903) (24.94) 1,517 (12,387) Income taxes 118 0.50 (16) ( 0.07) 134 463
Loss for the period (4,268) (17.94) (5,919) (25.01) 1,651 (11,924)
(*) Materials and services are net of utilisations of the provisions for product warranty and risks (€277 thousand and €44 thousand for the first six months of 2013 and 2014, respectively).
(**) Labour cost is net of utilisations of the restructuring and other provisions (€567 thousand and €1,647 thousand for the first six months of 2013 and 2014, respectively).
As required by Consob resolution no. DEM/6064293 of 28 July 2006, a reconciliation of the data in the interim separate financial statements with those in the reclassified schedules is provided below:
- Materials and services include raw materials and components, other variable production costs, external variable engineering services, exchange rate gains and losses
and other expenses.
- Amortisation and depreciation comprise amortisation of intangible assets and depreciation of property, plant and equipment and investment property.
- (Additions to)/utilisation of provisions and impairment losses include additions to/utilisation of provisions, impairment losses and inventory write-downs.
- Net financial expense comprises net financial expense and dividends.
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PININFARINA S.p.A.PRESS RELEASE
RECLASSIFIED STATEMENT OF FINANCIAL POSITION(€'000)
Net non-current assets (A)
30.06.2014 31.12.2013 Variation 30.06.2013
Net intangible assets 1,059 1,028 31 959
Net property, plant and equipment and investment
property 52,565 53,457 (892) 54,108
Equity investments 21,578 21,578 - 22,848
Total A 75,202 76,063 (861) 77,915
Working capital (B)
Inventories 6,315 6,271 44 5,778
Net trade receivables and other assets 24,988 16,254 8,734 23,564
Trade payables (13,234) (14,260) 1,026 (10,577) Provisions for risks and charges (977) (2,698) 1,721 (4,845) Other liabilities (7,118) (3,653) (3,465) (4,856) Total B 9,974 (1,914) 8,060 9,064
Net invested capital (C=A+B) 85,176 77,977 7,199 86,979
Post-employment benefits (D) 4,685 6,629 (1,944) 6,722
Net capital requirements (E=C-D) 80,491 71,348 9,143 80,257
Equity (F) 27,858 32,121 (4,263) 38,033
Net financial debt (G)
Non-current loans and borrowings 77,987 4,003 73,984 85,885
Net current financial debt (25,354) 35,224 (60,578) (43,661)
Total G 52,633 39,227 13,406 42,224
Total as in E (H=F+G) 80,491 71,348 9,143 80,257
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PININFARINA S.p.A. NET FINANCIAL DEBT(€'000)
PRESS RELEASE
30.06.2014 31.12.2013 Variation 30.06.2013
Cash and cash equivalents 9,389 12,398 (3,009) 27,112
Current assets held for trading 30,711 41,952 (11,241) 51,742
Current loans and receivables - - - - Loan assets - related parties and joint ventures - - - - Current bank overdrafts - - - - Current financial lease liabilities (5,827) (51,991) 46,164 (16,898) Loans and borrowings - related parties and joint
ventures (264) (264) - (248) Current portion of bank loans and borrowings (8,655) (37,319) 28,664 (18,047) Net current financial position (debt) 25,354 (35,224) 60,578 43,661
Non-current loans and receivables - third parties - - - -
Non-current loans and receivables - related parties
and joint ventures 3,884 3,019 865 4,606
Non-current held-to-maturity investments - - - - Non-current finance lease liabilities (47,731) - (47,731) (49,942) Non-current bank loans and borrowings (34,140) (7,022) (27,118) (40,549) Non-current loans and borrow ings (77,987) (4,003) (73,984) (85,885)
NET FINANCIAL DEBT (52,633) (39,227) (13,406) (42,224)
Cash and cash equivalents include a restricted account of €5,000,000. Current assets held for trading include restricted assets of €2,402,065.
Following the lending institutions' waiver of their rights arising from the group's failure to comply with the 2013 consolidated EBITDA
covenant on 2 April 2014, liabilities have been reclassified in line with the due dates provided for by the Rescheduling Agreement.
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Related party transactions - Pininfarina GroupPRESS RELEASE
The table below, which is presented pursuant to Consob communication no. DEM/6064293 of 28 July 2006, summarises related party transactions, including intragroup transactions. These transactions were carried out at market conditions, consistent with the nature of the goods exchanged or services provided. They were neither atypical nor unusual for the purposes of the above-mentioned communication.
Commercia l Financial Operating Financia l
Assets Liabilities Assets Liabilitie s Re ve nue Expe nse Income Expense
Pincar S.r.l. - - 987,323 - - - 23,323 -
Goodmind S.r.l. - - 131,841 - 12,000 - 1,841 -
Tota l - - 1,119,164 - 12,000 - 25,164 -
Related party transactions - Pininfarina S.p.A.Commercial Financial Operating Financial
Assets Liabilities Assets Liabilities Revenue Expense Income Expense
Pincar S.r.l. | - - 987,323 | - - | - 23,323 | - | |||
Pininfarina Extra S.r.l. | 61,367 255,900 339,446 | 263,560 184,707 | 255,641 1,001,040 | - | |||
Goodmind S.r.l. | - - - | - 12,000 | - - | - | |||
Pininfarina Deutschland GmbH | - - 304,279 | - - | - 2,103 | - |
mpx Entwicklung GmbH Monaco - 768,931 2,252,677 - - 1,677,898 16,210 - Pininfarina Automotive Engineering (Shanghai) Co Ltd 408,026 71,811 - - 65,450 119,391 - -
Total 469,393 1,096,642 3,883,725 263,560 262,157 2,052,930 1,042,676 -
The financial assets and liabilities with Pininfarina Extra S.r.l. relate to the domestic tax consolidation agreement.
In addition to the above figures, Studio Professionale Pavesio e Associati, related to the director Carlo Pavesio, provided legal assistance to the parent for total fees of €259,311 and Pantheon Italia S.r.l., related to the director Roberto Testore, provided commercial assistance for total fees of €30,470.
Fees to directors, statutory auditors and key management personnelFees to the parent's directors and statutory auditors for their respective duties are as follows:
(€'000)
First half 2014 First half 2013
Directors 306 346
Statutory auditors 51 51
Total 357 397
The total fees to Pininfarina S.p.A.'s key management personnel approximate €0.8 million for the first six months of 2014.
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