TREVISO, Italy – The Board of Directors of De’Longhi S.p.A. has approved today the consolidated results of the first nine months of 2017: growth was accelerating, supported by United States, China and East Europe.
Revenues were up by +8.4% to € 1,256.4 million (+5% on a like-for-like basis (1)) in the 9 months and by +10.7% in the third quarter (+8.4% like-for-like).
Net Industrial Margin was growing by 5.3% to € 601.8 million. Investments in advertisement and promotions were increased by ca. € 11 million in the 9 months.
Ebitda before non recurring items(2) was improving to € 159.1 million in the 9 months and to € 53.8 million in the quarter. Net Income pertaining to the Group was up by 24.2% to € 89.5 million in the 9 months. Net Financial Position was positive by € 75.6 million.
In light of the positive performance of the quarter, the guidance for 2017 (revenues’ organic growth at a mid-single-digit rate and an increase of Ebitda in absolute terms) is confirmed.
Revenues were growing to € 1,254.6 million in the 9 months, up by a nominal 8.4% and by 5% on a like-for-like basis. A significant contribution to this result came from the third quarter, whose revenues were accelerating, up by 10.7% (to € 428.8 million) and by 8.4% LFL.
All categories of coffee makers were steadily growing, with full automatic machines leading and capsule systems of Nespresso showing a pronounced recovery.
In the third quarter operating margins were under pressure, due to the evolution of both COGS and costs of new product development and advertisement and promotions aimed at supporting the sales’ growth (increased by € 11.1 million in the 9 months). In addition, in the quarter, margins were affected by imputed costs for the Stock Option Plan amounting to ca. € 1 million (€ 2.8 million in the 9 months) and higher D&A of ca. € 3 million (€ 6.3 million in the 9 months), resulting in Ebit declining by € 2.5 million in the quarter and by € 6 million in the 9 months.
This notwithstanding, the Company recorded a significant increase of Net Income (+24.2% in the 9 months), thanks also to non recurring net profits of € 15.3 million and to taxes decreasing by € 6.7 million (by € 8.5 million in the quarter) by effect also of the new “patent box” regulation.
- Net Industrial Margin amounted to € 601.8 million, up by 5.3% (+8.2% in the quarter), but declining as a percentage of revenues from 49.3% to 47.9%; at constant perimeter, the margin would have been 48.8% in the 9 months (vs. 49.3% in 2016) and 48.7% in the quarter (vs. 49% in 2016);
- Ebitda before non recurring items, amounting at € 159.1 million, was roughly flat vs. the 9 months of 2016, but was increasing by 4.2% to € 53.8 million in the quarter;
- Ebitda was marking a slight improvement (from € 154.5 to € 154.8 million), thanks to the positive contribution of the third quarter (€ 51.3 million, or € +0.6 million vs. the third quarter of 2016);
- Ebit declined from € 117.7 million to € 111.7 million (€ 35.4 in the quarter);
- net financial charges were improving from € 20.4 to € 19.1 million in the 9 months;
- the Company recorded non recurring net profits amounting to € 15.3 million (€ 5.4 million in the quarter), including also the writing-off of the earn-out liability due in relation to the acquisition of the perpetual licence of Braun brand;
- Net Income was significantly increasing from € 72.1 to € 89.5 million in the 9 months (from € 22.6 to € 33.4 million in the quarter), thanks to a reduction of taxes of € 6.7 million as a consequence of the decrease of the corporate Italian tax rate and of the benefits granted by the “patent box” regulation.
As for the balance sheet, Net Financial Position was positive by € 75.6 million and the bank net position was positive by € 89.9 million.
The change vs. the figure at 2016 year end (€ 307.6 million) is negative by € 232.1 million, being affected not only by the absorption of financial resources which characterizes the financial cycle of the working capital in the third quarter, supporting the growth trend, but also by investments in fixed assets (equalling € 71.1 million in the 9 months, up by € 38.6 million vs. nine months of 2016), dividends (amounting to € 119.6 months, equal to a pay-out-ratio increased from 44% to 71.4% and to a cash out higher by € 53.8 million), the acquisition of a 40% stake in the Swiss company Eversys (€ 19 million) and the consolidation effect of NPE (amounting to € 5.5 million in the 9 months).
Net working capital increased by € 99 million in the nine months of 2017 and by € 89.6 million in the twelve months, as a consequence mainly of absorption of financial resources of the supply chain in view of the strong growth trend of coffee machines and of the forecasted sales of the last months of the year.
The ratio of NWC with 12 months rolling revenues, which was increasing from 14.3% to 18.2% in the 12 months, is related to the current and expected growth.
(1) “Like-for-like” (or “LFL”) stands for at constant perimeter and excluding exchange rates and derivatives effects.
(2) Non recurrring items are including, among others, imputed costs of the Stock Option Plan amounting to € 2.8 million.