SAES GETTERS S.P.A. PRESS RELEASE
Milan, November 14, 2017 REVENUES AND NET INCOME SIGNIFICANTLY GROWING COMPARED TO 3Q 2016. STRONG GENERATION OF OPERATING CASH FLOW IN THE CURRENT QUARTER AND SUBSEQUENT IMPROVEMENT OF THE NET FINANCIAL POSITION- Consolidated revenues equal to €52.5 million, up (+26.6%) compared to €41.5 million in 3Q 2016
- Total revenues of the Group equal to €56.3 million, up by 27.9% compared to €44 million in 3Q 2016
- Consolidated gross profit equal to €23 million, up by 18.9% compared to €19.3 million in 3Q 2016
- Consolidated operating income equal to €7.8 million, increased by 25.5% compared to €6.2 million in 3Q 2016
- Consolidated EBITDA equal to €9.8 million, increased by 16% compared to €8.5 million in 3Q 2016
- Consolidated net income equal to €5.9 million, strongly increased (+62%) compared to €3.6 million in 3Q 2016
- Net financial position equal to -€26.3 million, significantly improved compared to that at June 30, 2017
The Board of Directors of SAES Getters S.p.A., gathered today in Lainate (MI), approved the consolidated results of the third quarter of 2017 (July 1 - September 30).
"The results of the quarter are in line with our expectations and show the improvement of all the economic and financial indicators, despite a slight decrease in revenues compared to the previous quarters, that will be widely recovered in the last quarter of the year" - Eng. Massimo della Porta, President of SAES Getters S.p.A. said. "2017 is a year of strong satisfactions and we look at 2018 with the same confidence, despite the recent trend of the euro-dollar exchange rate could affect the results."
In the third quarter of 2017 the SAES® Group achieved consolidated net revenues equal to €52.5 million, up by 26.6% compared to the corresponding period of 2016 (€41.5 million), despite the negative exchange rate effect (equal to
-5.3% and almost exclusively due to the devaluation of the US dollar). The organic growth of the period was equal to
+25.1%, mainly driven by the gas purification sector and by the new productions in the Electronic Devices Business. The change in the scope of consolidation, related to the acquisition of Metalvuoto S.p.A., was equal to +6.8%.
Total revenues of the Group1, including also the share of the revenues of the joint ventures, were equal to €56.3 million, up by 27.9% compared to €44 million in the third quarter of 2016, thanks both to the increase in consolidated revenues (+26.6%) and to the increase in the sales of the joint venture Actuator Solutions (+47.8%). Consolidated gross profit2 was equal to €23 million in the third quarter of 2017, up by 18.9% compared to €19.3 million in the corresponding period of 2016. The growth was mainly due to the increase in revenues, while the gross margin3 (from 46.5% in the third quarter of 2016 to 43.7% in the current period) decreased mainly because of the dilution subsequent to the consolidation of the newly acquired Metalvuoto S.p.A., still currently characterized by a1 Total revenues of the Group are achieved by incorporating with the proportional method, instead of the equity method, the joint ventures of the Group, namely Actuator Solutions (50%), SAES RIAL Vacuum S.r.l. (49%) and Flexterra (33.79%).
2 Calculated as the difference between net sales and industrial costs directly and indirectly attributable to the products sold.
3 Calculated as the ratio between gross profit and consolidated revenues.
different structure of production variable costs compared to that of the traditional perimeter of the Group (a higher incidence of costs of raw materials).
Consolidated operating income amounted to €7.8 million in the quarter, up by 25.5% compared to €6.2 million in the corresponding period of the previous year, thanks to the increase in revenues which more than offset the increase in the G&A expenses (increased costs for variable compensation, linked to the improved results). The operating margin was stable (from 15% to 14.9%), thanks to the lower incidence of the operating expenses on revenues. Consolidated EBITDA4 was equal to €9.8 million in the third quarter of 2017 (18.7% of consolidated revenues), up by 16% compared to €8.5 million (20.5% of consolidated revenues) in the corresponding quarter of 2016, mainly driven by the higher revenues in the Industrial Applications Business Unit. Instead, the decrease in percentage terms was due to the already mentioned dilution effect related to Metalvuoto S.p.A., as well as to the increase in G&A expenses. Consolidated net income amounted to €5.9 million (11.1% of consolidated revenues) in the third quarter of 2017, compared to a consolidated net income of €3.6 million (8.7% of consolidated revenues) in the third quarter of 2016. The consolidated net financial position as at September 30, 2017 was negative for an amount of -€26.3 million, significantly improved when compared to a negative net financial position of -€33.6 million as at June 30, 2017, thanks to the operating cash-flow generation.For further details, please refer to the following sections of this press release.
Relevant events occurred in the third quarter of 2017
On July 14, 2017, the Parent Company signed a new royalty agreement for the integration of the SAES thin film getter technology named PageWafer® in MEMS devices (micro-electromechanical systems) used in thermal infrared sensors. In addition to an initial lump-sum received against the transfer of the technology (of which €0.4 million already accounted for in the third quarter of 2017), the contract provides for the payment of royalties according to a percentage proportional to the volumes of silicon wafers produced using the SAES getter technology.
The transfer of all the manufacturing and sales activities of Memry GmbH into other companies of the Group was completed during the third quarter of 2017. The liquidation process of the German subsidiary began on October 1, 2017 and will be completed by the end of 2018. Finally, please note that on July 17, 2017, the new German branch of the US subsidiary Memry Corporation was established, named Memry Corporation Zweigniederlassung Deutschland and based in Freiburg, in charge of managing all the representation and commercial activities of Memry Corporation in Europe.
Changes in the Business structure organization
Following the acquisition of the control on Metalvuoto S.p.A., a significant player in the advanced packaging field, occurred at the end of 2016, a third Business Unit named "Solutions for Advanced Packaging" was established, in order to ensure a better information transparency.
Finally, please note the new segmentation of the Industrial Applications Business Unit and the re-naming of some already existing operating segments, to better comply with the organizational structure of the Group.
Industrial Applications Business Unit | |
Security & Defense | Getters and metal dispensers for electronic vacuum devices |
Electronic Devices | Getters for microelectronic, micromechanical systems (MEMS) and sensors |
Healthcare Diagnostics | Getters for X-ray tubes used in image diagnostic systems |
Thermal Insulation | Products for thermal insulation |
Getters & Dispensers for Lamps | Getters and metal dispensers used in discharge lamps and fluorescent lamps |
Systems for UH Vacuum | Pumps for vacuum systems |
Sintered Components for Electronic Devices and Lasers | Cathodes and materials for thermal dissipation in electronic tubes and lasers |
4 EBITDA is not deemed as an accounting measure under International Financial Reporting Standards (IFRSs); however, we believe that EBITDA is an important parameter for measuring the Group's performance and therefore it is presented as an alternative indicator. Since its calculation is not regulated by applicable accounting standards, the method applied by the Group may not be homogeneous with the ones adopted by other Groups. EBITDA is calculated as "Earnings before interests, taxes, write-off, depreciation and amortization".
Systems for Gas Purification and Handling | Gas purifier systems for semiconductor industry and other industries |
Shape Memory Alloys (SMA) Business Unit | |
Nitinol for Medical Devices | Nitinol raw material and components for the biomedical sector |
SMAs for Thermal and Electro Mechanical Devices | Shape Memory Alloys actuator devices for the industrial sector (domotics, white goods industry, consumer electronics and automotive sector) |
Solutions for Advanced Packaging | |
Solutions for Advanced Packaging | Advanced plastic films for the food packaging sector |
Business Development Unit | |
Organic Electronics | Materials and components for organic electronics applications |
The figures related to 2016 were reclassified on the basis of the new organizational structure, to allow a homogeneous comparison with the current year.
Industrial Applications Business Unit
Consolidated revenues of the Industrial Applications Business Unit amounted to €31.2 million in the third quarter of 2017, strongly increased (+33.5%) compared to the corresponding quarter of 2016 (€23.4 million). The trend of the euro against the major foreign currencies led to a negative exchange rate effect equal to -5.7%, net of which revenues organically increased by 39.2%.The growth was mainly concentrated in the Systems for Gas Purification & Handling Business (organic increase of +54.1%), thanks to the investments in new semiconductors and displays fabs in Asia. The Electronic Devices Business also recorded a strong increase (organic growth equal to +186.5%), thanks to the new advanced productions for the electronic consumer market in the manufacturing unit of Avezzano, as well as, to a lesser extent, to the recording of part of the lump-sum related to the already mentioned new licensing agreement signed in July, 2017.
These increases were partially offset by the decrease in the Security & Defense Business (organic decrease equal to -11.8%), which reflects the current technological transition from the traditional getter to the miniaturized one. Also the Light Sources Business showed a decrease (organic decrease equal to -29%, now being considered structural), penalized by the technological competition of LEDs towards fluorescent lamps, as well as the Thermal Insulation Business (organic decrease equal to -24.1%), suffering from the weakness in the sales of getters for insulation panels for the refrigeration market and of getters for vacuum bottles in the consumer market.
The table below shows the revenues in the third quarter of 2017 related to the various business areas, with evidence of the exchange rate effect and of the organic change compared to the corresponding period of 2016.
Thousands of euro (except %)
Business | 3rd quarter 2017 | 3rd quarter 2016 | Total difference (% ) | Organic change (% ) | Exchange rate effect (% ) |
Security & Defense | 1,916 | 2,242 | -14.5% | -11.8% | -2.7% |
Electronic Devices | 6,570 | 2,342 | 180.5% | 186.5% | -6.0% |
Healthcare Diagnostics | 936 | 983 | -4.8% | -1.9% | -2.9% |
Getters & Dispensers for Lamps | 1,205 | 1,786 | -32.5% | -29.0% | -3.5% |
Thermal Insulation | 1,060 | 1,500 | -29.3% | -24.1% | -5.2% |
Systems for UH Vacuum | 1,604 | 1,689 | -5.0% | -2.2% | -2.8% |
Sintered Components for Electronic Devices & Lasers | 1,727 | 1,776 | -2.8% | 2.3% | -5.1% |
Systems for Gas Purification & Handling | 16,187 | 11,050 | 46.5% | 54.1% | -7.6% |
Industrial Applications | 31,205 | 23,368 | 33.5% | 39.2% | -5.7% |
Shape Memory Alloys (SMA) Business Unit
Consolidated revenues of the Shape Memory Alloys Business Unit were equal to €18.1 million in the third quarter of 2017, showing an organic growth equal to +6.2% compared to €17.9 million in the corresponding period of 2016. The exchange rate effect was negative and equal to -4.7%.In particular, the increase in revenues was concentrated in the industrial SMAs segment (SMAs for Thermal and Electro Mechanical Devices Business) with an organic growth of +32.4%, thanks to the recovery in the sales of the luxury goods segment, as well as to the good performance of the automotive sales.
The Nitinol for medical applications segment (Nitinol for Medical Devices Business) was penalized by the exchange rate effect (-5%), net of which the organic growth was equal to +2.7%, spread over different product lines and end-user applications.
The table below shows the revenues in the third quarter of 2017 related to the various business areas, with evidence of the exchange rate effect and of the organic change compared to the corresponding period of 2016.
Thousands of euro (except %)
Business | 3rd quarter 2017 | 3rd quarter 2016 | Total difference (% ) | Organic change (% ) | Exchange rate effect (% ) |
Nitinol for Medical Devices | 15,443 | 15,800 | -2.3% | 2.7% | -5.0% |
SMAs for Thermal & Electro Mechanical Devices | 2,691 | 2,062 | 30.5% | 32.4% | -1.9% |
Shape Memory Alloys | 18,134 | 17,862 | 1.5% | 6.2% | -4.7% |
The gross profit of the Shape Memory Alloys Business Unit was equal to €7.1 million (39.2% of consolidated revenues) in the third quarter of 2017, compared to €7.4 million (41.6% of consolidated revenues) in the corresponding period of 2016. The decrease was related to temporary inefficiencies caused by the already mentioned inter-company transfer of the German production lines.
Operating income of the Shape Memory Alloys Business Unit amounted to €4.5 million (24.7% of consolidated revenues), compared to €4.8 million in the third quarter of 2016 (27.1% of consolidated revenues), due to the above mentioned decrease in the gross margin.Solutions for Advanced Packaging Business Unit
The Solutions for Advanced Packaging Business Unit, which mainly comprises the figures of the newly acquired Metalvuoto S.p.A., recorded consolidated revenues equal to € 2.8 million in the third quarter of 2017, affected by the typical decrease in the summer season.
Gross profit of the Solutions for Advanced Packaging Business Unit was equal to €0.3 million in the third quarter of 2017 (10.9% of consolidated revenues) and it mainly comprises the contribution of the newly acquired Metalvuoto S.p.A., whose industrial activity is currently characterized by a different structure of variable production costs compared to that of the traditional perimeter of the Group and that suffered the effect of an extraordinary inventory write-down in the third quarter of 2017.The third quarter of 2017 ended with an operating loss equal to -€0.3 million, related to the already mentioned rationalization of the inventory and to a slowdown in revenues typical of the summer season.
Business Development Unit & Corporate Costs
The Business Development Unit & Corporate Costs includes projects of basic research or in a developing phase, aimed at diversifying into innovative businesses, in addition to corporate costs (costs that cannot be directly attributed or reasonably allocated to any business sector, but that refer to the Group as a whole).
In the third quarter of 2017 consolidated revenues amounted to €0.4 million, up by 49.8% compared to €0.3 million in the corresponding period of 2016. The exchange rate effect was negative and equal to -7.9%, while
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