B&C Speakers S p A : 2023-05-12 The Board of Directors approves the Interim Report on Operations as at 31 March 2023

PRESS RELEASE

B&C Speakers S.p.A.:

The Board of Directors approves the Interim Report on Operations as at 31

March 2023

Also in the first three months of 2023, the trend of sharp growth

in revenues, margins and profits is confirmed

• Consolidated revenue of €24.22 million (an increase of 40% compared to the €17.24 million for the first quarter of 2022);
• Consolidated EBITDA of €6.27 million (an increase of 58% compared to the Euro 3.97 million for the first quarter of 2022);
• Total Group profit of €4.03 million (also significantly up compared with the figure of €2.27 million for the first quarter of 2022);
• Group net financial position of €6.2 million (€9.4 million at year-end 2022);

Bagno a Ripoli (prov. Florence), Italy, 12 May 2023 - 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-acoustictransducers, approved the Interim Report on Operations of the Group for the first three months of 2022 prepared in accordance with the IFRS international accounting standards.

Revenue

During the first quarter of 2023, the Group's reference market confirmed a great dynamism in continuity with the best performance of 2022, the consolidated turnover thus reached the value of Euro 24.22 million (up 40% compared to the value for the first quarter of 2022 when it amounted to at Euro 17.24 million).

It was a significant growth in production and sales volumes compared to the same period in 2022 that led this performance; as a result, the order backlog decreased (at 31 March 2023 amounts to Euro 33.5 million, while it amounted to Euro 40 million at the end of the first quarter of 2022).

The growth in turnover was reached thanks to the excellent results achieved within the European market (which represents 44% of the Group's turnover), without forgetting the recovered dynamism of the South American market which has more than doubled compared to the corresponding period of 2022. The domestic market was also particularly brilliant, guaranteeing growth of 76% compared to the first quarter of 2022.

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Below is the complete breakdown by geographical area for the first three months of 2023 compared with the same period of 2022 (amounts in Euros):

Revenues per geographic area	1Q 2023	%	1Q 2022	%	Difference	Difference %
(values in Euro/thausand)	YTD		YTD
Latin America	2.110	9%	948	5%	1.162	122,6%
Europe	11.854	49%	7.542	44%	4.312	57,2%
Italy	1.745	7%	991	6%	753	76,0%
North America	4.094	17%	4.170	24%	(76)	-1,8%
Middle East & Africa	720	3%	834	5%	(113)	-13,6%
Asia & Pacific	3.693	15%	2.751	16%	942	34,3%
Total	24.217	100%	17.236	100%	6.980	40,5%

The increase in turnover was achieved practically in all the Group's primary markets. It is very evident that the increase in turnover is mostly driven by European and North American customers, although good performance in the Asian market is also notable.

Cost of sales

During the first three months of 2023, the cost of sales showed an improvement as a proportion of revenue compared to the same period of 2022, decreasing from 64.91% to 63.03%. This improvement was ensured by greater efficiency of the operating structure along with the return of transportation costs to normal levels.

Indirect Personnel

The cost of indirect personnel fell in terms of proportion of revenue compared to the first quarter of 2022, dropping from 5.87% to 4.80%. In absolute terms, the figure for the first quarter of 2023 slightly increased following the increase in staff compared to the first quarter of the previous year.

Commercial expenses

Commercial expenses remained stable compared to the first quarter of 2022.

Administrative and General

Administrative and general expenses increased compared to the corresponding figure for 2022, while keeping their incidence constant.

EBITDA and EBITDA Margin

As a consequence of the dynamics described above, EBITDA of the first three months of 2023 was €6.67 million, increasing by € 2.30 million (+58%) compared to the same period in 2022.

Also in terms of the EBITDA margin, we can note an improvement, with the figure reaching 25.88% of revenue in the period, compared to the 23.03% of the first quarter of 2022.

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Depreciation and amortisation

Depreciation and amortisation on tangible and intangible fixed assets and rights of use are essentially consistent with the first three months of 2023 and amount to €507 thousand (€490 thousand in the first three months of 2022). Provisions made during this period are zero as there are currently no uncollectible situations from the Group's customers.

Write-downs in the period are zero because, at the moment, there are no situations of uncollectable receivables from the Group's customers.

EBIT and EBIT margin

EBIT for the first three months of 2023 amounts to €5.76 million, up by 65.6% compared to the same period of 2022 (when it amounted to €3.48 million). The EBIT margin is 23.79% of revenue (20.18% in the corresponding period of 2022).

Group Net Profits

The Group's net profits at the end of the first three months of 2023 amounts to €4.05 million, representing a share of 16.73% of consolidated revenue, with an overall increase of 87.8% compared to the corresponding period in 2022.

The Group's overall Net Financial Position is negative and amounts to Euro 6.20 million against a negative value of Euro 9.41 million at the end of 2022. The improvement in the NFP is due to the excellent cash generation in this quarter, which allowed to increase cash and cash equivalents despite the repayment of outstanding loan installments.

	31 march	31 december
(values in Euro thousands)	2023 (a)	2022 (a)	Change
A. Cash	7.296	5.825	25%
C. Other current financial assets	8.594	8.574	0%
D. Cash and cash equivalent (A+C)	15.890	14.399	10%
E. Current financial indebtness	(488)	(476)
F. Current portion of non current borrowings	(10.644)	(11.519)	-8%
G. Current borrowingse (E+F)	(11.133)	(11.994)	-7%
H. Current net financial indebtness (G+D)	4.758	2.405	98%
I. Non current financial indebtness	(10.958)	(11.818)	-7%
L. Non current financial indebtness	(10.958)	(11.818)	-7%
M. Total financial indebteness (H+L)	(6.201)	(9.414)	-34%

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The Group's reclassified Income Statement for the first quarter of 2023 compared to the corresponding period in 2022 is presented below:

Economic trends - Group B&C Speakers

(€ thousands)	1Q 2023	Incidence	1Q 2022	Incidence
Revenues	24.217	100,00%	17.236	100,0%
Cost of sales	(15.265)	-63,03%	(11.188)	-64,9%
Gross margin	8.952	36,97%	6.048	35,1%
Other revenues	54	0,22%	129	0,8%
Cost of indirect labour	(1.162)	-4,80%	(1.012)	-5,9%
Commercial expenses	(185)	-0,77%	(187)	-1,1%
General and administrative expenses	(1.391)	-5,74%	(1.010)	-5,9%
Ebitda	6.268	25,88%	3.969	23,0%
Depreciation and Amortization	(507)	-2,09%	(490)	-2,8%
Writedowns	0	0,00%	0	0,0%
Earning before interest and taxes (Ebit)	5.761	23,79%	3.479	20,2%
Writedown of investments in non controlled associates	0	0,00%	-	0,0%
Financial costs	(734)	-3,03%	(789)	-4,6%
Financial income	553	2,28%	268	1,6%
Earning before taxes (Ebt)	5.580	23,04%	2.957	17,2%
Income taxes	(1.527)	-6,31%	(799)	-4,6%
Profit for the year	4.053	16,73%	2.158	12,5%
Minority interest	0	0,00%	0	0,0%
Group Net Result	4.053	16,73%	2.158	12,5%
Other comprehensive result	(17)	-0,07%	68	0,4%
Total Comprehensive result	4.035	16,66%	2.226	12,9%

Significant events subsequent to 31 March 2023

The Shareholders' Meeting, held on 28 April 2023, approved the financial statements and resolved the issue of an ordinary dividend of €0.6 per ordinary share outstanding at the ex- dividend date (occurring on May 8, 2023, with a record date on May 9, 2023).

Business outlook

The atmosphere within the reference market is highly positive with respect to the current year and suggests that 2023 could close with significantly better production and sales levels than in 2022. The Group's management believes that 2023 can be another year of growth. In terms of margins, we note the continuing upward tensions of some important production factors, while a return to normality of all logistics-related costs is being confirmed.

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The Consolidated Balance Sheet and Income Statement for 31 March 2023 are shown below:

CONSOLIDATED STATEMENT OF FINANCIAL POSITION	31 March	31 December
(Values in Euro)	2023	2022
ASSETS
Fixed assets
Tangible assets	2.570.457	2.513.000
Right of use	4.358.910	4.657.737
Goodwill	2.318.181	2.318.181
Other intangible assets	368.964	400.956
Investments in non controlled associates	-	-
Deferred tax assets	999.455	756.478
Other non current assets	544.794	536.368
related parties	6.700	6.700
Total non current assets	11.160.761	11.182.720
Currents assets
Inventory	27.331.572	26.420.332
Trade receivables	22.375.040	21.592.254
Tax assets	19.767	19.831
Other current assets	15.280.855	14.968.330
Cash and cash equivalents	7.296.400	5.825.350
Total current assets	72.303.634	68.826.097
Total assets	83.464.395	80.008.817
LIABILITIES
Equity
Share capital	1.083.690	1.083.955
Other reserves	3.456.505	3.490.104
Foreign exchange reserve	418.324	442.276
Retained earnings	35.735.710	31.676.850
Total equity attributable to shareholders of the parent	40.694.229	36.693.185
Minority interest	-	-
Total equity	40.694.229	36.693.185
Non current liabilities
Long-term borrowings	7.625.171	8.183.309
Long-term lease liabilities	3.333.008	3.634.895
related parties	2.860.686	3.086.130
Severance Indemnities	774.799	772.315
Provisions for risk and charges	41.487	41.487
Total non current liabilities	11.774.465	12.632.006
Current liabilities
Short-term borrowings	9.950.974	10.819.475
Short-term lease liabilities	1.181.911	1.174.874
related parties	892.112	885.605
Trade liabilities	12.808.616	13.487.204
related parties	85.312	83.175
Tax liabilities	4.218.395	2.445.913
Other current liabilities	2.835.806	2.756.160
Total current liabilities	30.995.702	30.683.626
Total Liabilities	83.464.396	80.008.817

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