B&C Speakers S p A : 2020-11-13 Il Consiglio di Amministrazione approva il Resoconto Intermedio di gestione al 30 settembre 2020

COMUNICATO STAMPA

B&C Speakers S.p.A.:

The Board of Directors approves the Interim Report on Operations as at

September 30, 2020

• • Consolidated revenues amounted to € 24.84 79 million (a decrease of 42.2%

  compared to the € 42,95 million for the same period in 2019);

• • Consolidated EBITDA equal to € 4.44 million (a decrease of 55.9% compared to the

  10,1 million for the same period in 2019);

• • Consolidated EBITDA margin of 17.9%, while it was of 23.5% at September 30,

  2019;

• • Group net profit amounted to € 1.78 million, down by 74.5% compared to € 7.00

  million in the same period of 2019);

• • Group net financial position equal to € 1.64 million (it amounted to € 5.00 million

  at year-end 2019);

• • Continuation of the actions already taken at the beginning of the pandemic to mitigate the financial and economic effects linked to Covid19.

Bagno a Ripoli (prov. Florence), Italy, November 13, 2020 - The Board of Directors of B&C Speakers S.p.A., one of the foremost international players in the design, manufacture, distribution and marketing of professional electro-acoustic transducers, approved the abbreviated Group's Interim Report as at September 30, 2020 for the first nine months of 2020, in accordance with IFRS international accounting standards.

Revenues

Even during the summer, the Group's reference market continued to significantly suffer from the consequences of the ongoing pandemic that led to a significant decrease in the Group's turnover, which amounted to Euro 24.8 million at the end of the first nine months in 2020 and down by 42.16% compared to the same period of 2019.

In addition to this, it should be noted that the health provisions that have made possible the resumption of production activities, determine a loss of production efficiency that can be measured in about 20% of normal capacity, as a result of the provisions on interpersonal distancing and sanitation of production facilities.

The decrease in the Group's turnover compared to the first half of 2019 occurred, albeit with different timescales and methods, on all the reference markets as summarized in the chart here below.

Revenues per geographic area	III Q 2020	%	III Q 2019	%	Difference	Difference %
(values in Euro/thausand)	YTD	YTD
Latin America	1,783	7%	3,110	7%	(1,327)	-43%
Europe	9,846	40%	20,116	47%	(10,270)	-51%
Italy	1,867	8%	2,981	7%	(1,114)	-37%
North America	6,855	28%	8,452	20%	(1,597)	-19%
Middle East & Africa	337	1%	273	1%	64	23%
Asia & Pacific	4,157	17%	8,022	19%	(3,865)	-48%
Total	24,844	100%	42,954	100%	(18,110)	-42%

It should be noted that the Asian market, and China in particular, in the course of the quarter just passed, gave clear signs of a gradual recovery in demand, made possible by the ability to block the spread of the virus, allowing the resumption of all social aggregation activities. The geographic area that, at Group level, is best reacting to this crisis, is North America, thanks to the success achieved in the sale of car transducers and in selling to end customers, through an effective network of traditional and non-traditional resellers, which have partly balanced the loss in turnover suffered by manufacturers (OEMs).

Cost of sales

The cost of sales showed a slight worsening in its incidence on revenues in the first nine months of 2020 compared to the same period of 2019, going from 61.00% to 63.18%; this worsening is attributable to the contraction in turnover not fully balanced by the cost containment policies that the Company has put in place, including the use of the Covid redundancy fund.

Indirect Personnel

The cost for indirect personnel, although decreasing by 24.5% compared to the first nine months of 2019, has increased its incidence on turnover from 6.70% to 8.75%; this is explained by the fact that, despite the use of social safety nets, it was not possible to adjust the cost of labor to the decline in business volumes.

Commercial expenses

This category refers to costs for commercial consultancy, advertising and marketing expenses, travels and business trips and other minor charges relating to the commercial sector.

Commercial expenses show a sharp decrease in absolute value compared to the first nine months of the previous year and a significant reduction in the incidence on turnover going from 2.05% to 1.51%; this contraction is mainly explained by the cancellation of all trade shows scheduled during the year.

Administrative and General

General and administrative costs showed a significant decrease (-23% compared to the first nine months of 2019) and slightly increased their incidence on turnover, which went from

7.08% to 9.42%. In this category of costs, the cost containment measures implemented by the Company management, which will be explained in detail in a subsequent paragraph, were particularly effective.

EBITDA and EBITDA Margin

Mainly due to the dynamics shown above, EBITDA for the first nine months of 2020 was equal to Euro 4.44 million, down by 55.9% compared to the same period of 2019.

L'EBITDA margin or the first nine months of 2020 is equal to 17.87% of revenues while it amounted to 23.47% in the same period of the previous year.

Depreciation

Depreciation of tangible and intangible fixed assets and rights of use amounted to Euro 1.65 million (Euro 1.72 million in the first nine month of 2019).

Provisions

Provisions made during the period are zero, as there was no need for provisions, taking into account the risk of bad debt of trade receivables, despite the crisis triggered by the ongoing epidemic. Currently there are no situations of bad debt on the part of the Group's customers.Even the stocks do not show critical situations that require value adjustments.

EBIT

EBIT for the first nine months of 2020 amounts to Euro 2.79 million, also in sharp decline compared to the same period of 2019.

Utile Netto di Gruppo

The Group's net profit at the end of the first nine months of 2020 amounts to Euro 1.78 million, representing a percentage of 7.18% of consolidated revenues, with an overall decrease of 74.5% compared to the corresponding period of 2019.

It should be noted that the Group's net profit is also affected by the alleged valuation losses of the securities held in the portfolio, which, although constantly decreasing, amount to Euro 0.26 million at the end of the first nine months of 2020. The securities portfolio itself showed a loss of Euro 0.37 million at the end of the first half and amounted to 0.96 at the end of the first quarter.

Therefore, the securities portfolio at issue has already recovered a significant part of the loss and, given the quality of the securities that comprise it, it can be assumed it will continue towards a complete recovery by the end of the year.

The Net Financial Position at the end of the first nine months of 2020 was equal to Euro 1.64 million against a value of 5.00 at the end of the 2019 financial year.

30 September	31 December
Values in Euro Thousands	2020	2019	Change %
A. Cash	13,167	5,277	149%
C. Securities held for trading	7,651	7,916	-3%
D. Cash and cash equivalent (A+C)	20,818	13,194	58%
F. Bank overdrafts	(0)	(314)	-100%
G. Current portion of non current borrowings	(6,660)	(6,686)	0%
H. Other current financial debts	(961)	(1,212)
I. Current borrowings (F+G)	(7,621)	(8,211)	-7%
J. Current net financial position (D+I)	13,197	4,982	165%
K. Non current borrowings	(12,414)	(6,958)	78%
M. Other non current financial debts	(2,423)	(3,031)
N. Non current borrowings	(14,837)	(9,989)	49%
O. Total net financial position (J+N)	(1,640)	(5,006)	-67%

The improvement of the Net Financial Position was mainly affected by the decision of the Shareholders' Meeting not to proceed with the distribution of the dividend initially proposed, in order to prudently maintain the balance sheet unchanged, besides a cash generation deriving from operating activities for 5,076 thousands of Euro which, despite the decrease in turnover, remained at excellent levels.

It is also recalled that the Parent Company has taken out new loans for 7.5 million (of whom 5 million are related to two loans of 2.5 million, each of whom have been guaranteed by Medio Credito Centrale SpA, pursuant to Legislative Decree 23 / 2020, art.13, paragraph 1.),

reimbursable starting from 2021