Main results for the first nine months of 20201:

  • Consolidated revenues of 1,042.1 million euros, decreasing 14.4% at constant exchange rates and 14.9% at current exchange rates compared to the first nine months of 2019 due to the Covid- 19 outbreak
  • EBITDA amounted to 228.4 million euros, with the margin at 21.9%, 50 bps higher despite the impact of the pandemic and thanks to the decisive and timely actions on costs
  • Net profit came to 41.1 million euros compared to 75.7 million euros on a recurring basis in the first nine months of 2019
  • Net financial debt was 712.6 million euros, improving versus both the 786.7 million euros recorded at December 31st, 2019 and the 765.3 million euros posted at June 30th, 2020, with financial leverage down to 1.89x
  • Free cash flow reached 127.1 million euros, an increase of 58.4 million euros or 85.2% compared to the first nine months of 2019, thanks to the effective measures implemented

Milan, October 28th, 2020 - Today the Board of Directors of Amplifon S.p.A. (MTA; Bloomberg ticker: AMP:IM), global leader in hearing solutions and services, approved the Interim Financial Report as at September 30th, 2020 during a meeting chaired by Susan Carol Holland.

1 Unless stated otherwise, the comments in this press release refer to the recurring income statement figures for Q3 and 9M 2019.

MAIN CONSOLIDATED ECONOMICAL AND FINANCIAL FIGURES - FIRST NINE MONTHS 2020

(Euro millions)

First nine months 2020

First nine months 2019

Recurring

Non-

Total

% on

Recurring

Non-

Total

% on

Change % on

recurring

recurring

recurring

recurring

recurring

Net revenues

1,042.1

-

1,042.1

100.0%

1,224.7

-

1,224.7

100.0%

-14.9%

EBITDA

228.4

-

228.4

21.9%

262.6

(18.4)

244.2

21.4%

-13.0%

EBIT

79.7

-

79.7

7.6%

124.7

(18.7)

106.0

10.2%

-36.1%

Net income

41.1

-

41.1

3.9%

75.7

(14.0)

61.7

6.2%

-45.7%

EPS adjusted (*, in Euro)

0.281

0.432

Free cash flow

127.1

68.6

09/30/2020

12/31/2019

Change %

Net Financial Position

712.6

786.7

-9.4%

(*) EPS adjusted for the non-recurring items and for the amortization of the intangible assets as per the Purchase Price Allocation accounting treatment.

MAIN CONSOLIDATED ECONOMICAL AND FINANCIAL FIGURES - THIRD QUARTER 2020

(Euro millions)

Q3 2020

Q3 2019

Recurring

Non-

Total

% on

Recurring

Non-

Total

% on Change % on

recurring

recurring

recurring

recurring

recurring

Net revenues

428.2

-

428.2

100.0%

392.7

-

392.7

100.0%

9.0%

EBITDA

97.1

-

97.1

22.7%

76.0

(12.6)

63.5

19.4%

27.6%

EBIT

48.1

-

48.1

11.2%

29.3

(12.9)

16.5

7.5%

64.1%

Net income

28.5

-

28.5

6.7%

16.3

(9.1)

7.2

4.2%

74.8%

EPS adjusted (*, in Euro)

0.160

0.103

(*) EPS adjusted for the non-recurring items and for the amortization of the intangible assets as per the Purchase Price Allocation accounting treatment.

"We are very satisfied with the excellent results achieved in the third quarter despite what continues to be a challenging environment due to the effects of the ongoing pandemic. The strong growth in revenues, which far outpaced the reference market, in fact, confirms the resiliency of our business and the strength of our competitive positioning, while the significant improvement in profitability and the maximization of cash generation testify to the effectiveness of the measures undertaken since the very inception of the crisis triggered by COVID-19", said Enrico Vita, Amplifon's Chief Executive Officer. "While we remain cautious in light of possible future developments of the pandemic worldwide, we continue to be positive about the future, reassured by the recent performance of the business in all our core markets and the unchanged fundamentals of our industry."

2

Overview

The performance in the first nine months of the year was characterized by very different trends over the reporting period depending on the impact of the COVID-19 outbreak and the restrictive measures adopted to contain its spread. After a very positive beginning of the year, the Group's performance was, in fact, severely impacted by the pandemic and the adoption of restrictive measures in the period March-June. Strong growth was, however, recorded since the beginning of July. The third quarter of 2020 was witness not only to a recovery that was stronger and faster than initially expected, but also to Amplifon's excellent capabilities in limiting the impact of the pandemic on its economic and financial results.

Consolidated revenues came to 428.2 million euros in the third quarter of 2020, an increase of 10.4% at constant exchange rates and 9.0% at current exchange rates compared to the third quarter of 2019. This performance, significantly above market, reflects an organic growth of 8.2%, along with the 2.2% contribution of acquisitions and a negative foreign exchange effect of 1.4%. Organic growth benefitted from both the decision to keep the network operative during the lockdown months and to quickly resume investments in business growth as soon as external conditions allowed it. EBITDA was 27.6% higher compared to the third quarter of 2019, coming in at 97.1 million euros, with a margin that rose 330 basis points to 22.7%. In addition to the strong increase in revenues, this significant improvement in profitability is attributable to the greater operating efficiency and the increased productivity stemming from the actions on costs implemented in the second quarter and, partially, to the limited use of social schemes to offset the impact of the pandemic, as well as an income of around 2 million euros due to the renegotiation of the lease agreements for the distribution network2. This strong increase in profitability was achieved despite the sizeable investments made in the business such as marketing investments, which were higher than in the third quarter of 2019, and the restart of key Corporate growth projects. Net profit amounted to 28.5 million euros, an increase of 74.8% compared to the third quarter of 2019.

Revenues amounted to 1,042.1 million euros in the first nine months of 2020, down 14.4% at constant exchange rates and 14.9% at current exchange rates due to the restrictive measures adopted mainly in the period March-June in all the Group's core markets to contain the spread of the pandemic. EBITDA, however, came to 228.4 million euros with the margin at 21.9%, 50 basis points higher than in the first nine months of 2019, thanks to the excellent results of the swift action plan implemented on costs. Net profit was 41.1 million euros compared to a recurring net profit of 75.7 million euros in the first nine months of 2019. Adjusted earnings per share (adjusted EPS)3 came in at 28.1 euro cents compared to 43.2 euro cents in the first nine months of 2019.

The balance sheet and financial indicators continue to confirm the Group's solidity, even in this unprecedented period: more in detail, thanks to the significant actions taken and their results in terms of cash generation and safeguarding the net financial position, the Company generated free cash flow of

127.1 million euros compared to 68.6 million euros in the first nine months of 2019 (+85.2%) and net financial debt came to 712.6 million euros, improving versus both December 2019 and June 2020, with financial leverage at the end of the period down to 1.89x.

  1. On May 28th, 2020, IASB issued an amendment to IFRS 16 which was endorsed by the European Union on October 9th, 2020. The amendment introduces a practical expedient based on which any reductions in rent owed through June 30th, 2021 obtained as a result of Covid-19 lease renegotiations are not considered lease changes and are recognized as variable rent which has a positive on the income statement.
  2. Net earnings per share adjusted (adjusted EPS) for non-recurring expenses and amortization linked to acquisitions in accordance with the Purchase Price Allocation accounting treatment.

3

Economic results for the first nine months of 2020

Consolidated revenues came to 1,042.1 million euros in the first nine months of 2020, down 14.4% at constant exchange rates and 14.9% at current exchange rates compared to the first nine months of the prior year, impacted by the restrictive measures implemented to contain the spread of the pandemic mainly in the spring. This performance reflects a negative organic performance for 16.3% and the positive contribution of acquisitions for +1.9%. The foreign exchange effect was negative for 0.5%.

The trend in the different geographic areas varied according to the duration and intensity of the restrictive measures adopted, as well as the speed of the recovery: in EMEA, initially the most affected area by the lockdown measures, the recovery was very quick since the end of April, with a performance above the prior year already in July; in the AMERICAS, North America reported strong recovery beginning in early May, returning to good organic growth in the third quarter, while Latin America continues to be severely impacted by the pandemic which struck at the end of March; all APAC countries, with the exception of India, recorded an improvement in the period, with a return to growth in the third quarter.

EBITDA amounted to 228.4 million euros with the margin at 21.9%, 50 basis points higher than in the first nine months of 2019, thanks to the timely and decisive actions on costs which allowed the Company to significantly limit the impact on profitability in the second quarter, as well as improve efficiency and productivity, as shown by the noticeable profitability expansion recorded in the third quarter. The Company also benefitted from an income of around 9 million euros due to the renegotiation of lease agreements for the distribution network4. EBIT amounted to 79.7 million euros, or 7.6% of revenues, compared to a recurring EBIT of 124.7 million euros in the first nine months of 2019.

Net profit (NP) was 41.1 million euros, compared to a recurring net profit of 75.7 million euros in the first nine months of 2019. This result is attributable mainly to the decrease in revenues caused by the pandemic and the slight increase in D&A and financial expenses. The tax rate came to 28.7%. Adjusted earnings per share (adjusted EPS)5 came in at 28.1 euro cents, compared to 43.2 euro cents in the first nine months of 2019.

Performance by geographic area

EMEA: strong recovery with an excellent third quarter performance both on top line and profitability

Revenues in Europe, the Middle East and Africa (EMEA) reached 740.7 million euros in the first nine months of 2020, down 15.6% at current exchange rates and 15.8% in local currency. The organic performance was negative for 17.2%, while acquisitions contributed by +1.4%. The foreign exchange effect was positive for 0.2%.

Europe was impacted by the severe restrictive measures adopted to contain the spread of Covid-19 from March, but began to recover already at the end of April and was back to growth since July.

More in detail, in the third quarter of 2020 revenues were 12.0% higher than in the third quarter of 2019, coming in at 303.2 million euros. This result was driven for 10.8% by organic growth, thanks to the strong performance recorded in all the core markets (particularly in Italy, France and Spain) and for 1.2% by acquisitions.

EBITDA amounted to 179.7 million euros in the first nine months of 2020, with the margin on revenues at 24.3%, 90 basis points higher than in the same period of 2019. In the third quarter, EBITDA came to

76.8 million euros, an increase of 32.2% against the comparison period, with the margin on revenues rising 390 basis points to 25.3% thanks to strong revenue growth, as well as greater efficiency and productivity.

  1. Amendment to IFRS 16 published by the International Accounting Standards Board (IASB) on May 28th, 2020 and endorsed by the European Union on October 9th 2020
  2. Net earnings per share adjusted (adjusted EPS) for non-recurring expenses and amortization linked to acquisitions in accordance with the Purchase Price Allocation accounting treatment.

4

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Amplifon S.p.A. published this content on 28 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2020 12:04:12 UTC