Press release in accordance with Consob Regulation n. 11971/99
Esprinet's results as at 30 September 2017 approved by the Board
First nine months 2017 results:
Consolidated sales: € 2,127.6 million (+10% vs € 1,925.8 million of the first nine months 2016) Gross profit: € 115.4 million (+8% vs € 106.6 million)
Operating income (EBIT): € 14.6 million (-14% vs € 17.0 million) Net income: € 8.9 million (-24% vs € 11.8 million)
Net financial position as at 30 September 2017 negative by € 141.9 million
(vs Net financial position positive by € 105.4 million as at 31 December 2016 and negative by €
101.2 million as at 30 September 2016)
Third quarter 2017 results:
Consolidated sales: € 690.8 million (+1% vs € 680.8 million of the third quarter 2016) Gross profit: € 35.7 million (-1% vs € 35.9 million)
Operating income (EBIT): € 4.8 million (+79% vs € 2.7 million) Net income: € 2.7 million (+86% vs € 1.4 million)
Vimercate (Monza Brianza), 13 November 2017 - The Board of Directors of Esprinet S.p.A. (Italian Stock Exchange: PRT) met today under the chairmanship of Francesco Monti to examine and approve Group's financial results for the nine-month period ending 30 September 2017, prepared in accordance to IFRS.
According to the European distribution market data as of September 30th 2017 (provided by Context, October 2017), third quarter sales were up +4%, substantially in line with the first six months.
Italy grew less than the European average despite its +3% of the third quarter being sequentially an improvement versus the zero growth of the first half of the current year. Spain is broadly above the average with +9% in the third quarter, a further sequential improvement compared to the +8% of the first half.
In the Italian market the best performers were smartphone (+12%), SSD (+37%), TV and security software; the worst categories were desktop (-14%), tablet (-18%) and notebook (-3%). In the Spanish market as well smartphones (+31%), notebooks (+4%) and desktops (+10%) registered a significant growth whereas consumables and servers were negative respectively -7% and -11%.
For current year the management confirms targets of sales of € 3.2/3.3 billion and EBIT of € 34-36 million, excluding any extraordinary non-recurring item.
Looking at the financial targets set out in the strategic plan published in October 2016, the management recognizes a stronger than expected difficulty in achieving profitable sales of PCs and smartphones in the consumer segment (so called 'fulfilment consumer'). As a matter of fact, current market competitive dynamics are driving unsatisfactory return on capital employed in some of the deals pertaining to that area which the Group has decided to skip accordingly.
Said the above the cost structure of this area has already been furtherly rationalised while the management will continue to monitor the achievable profitability in the area.
There will be an increased focus on the sales re-mix on higher margin combinations of product/customer, mainly in the segments of datacenter solutions ('IT Value'), accessories and certain specific product categories in peripherals and consumer electronics segments.
Similarly the Group will put more efforts in own-brand sales - namely Nilox and Celly - as well as in the development of services and enabling tools dedicated to the 'business' customer segment.
Furthermore, the Group plans to keep on pushing on the cost structure reduction so as to better exploit growth in gross margins.
In 2018 the Group expects a low-single digit revenue growth thanks to the contribution coming from Italian activities whereas sales in Spain are expected to decrease due to volume reduction in 'fulfilment consumer' area which will be partially compensated by increased sales in other business segments.
EBIT is expected to stand in a range of € 39-41 million.
For the upcoming years, the Group foresees a constant improvement in profitability due to the business remix towards more profitable combinations of product/customer at the expense of 'fulfilment consumer' business unless market competitive dynamics, as well as the on-going process of adjusting operating costs, drive sales recovery also in this segment.
A) Esprinet Group's financial highlights
The Group's main economic, financial and asset results as 30 September 2017 are hereby summarised:
9 mo nth s 9 mo nth s
( eu ro /0 0 0 ) | 20 1 7 | % | 20 1 6 | % | Var. | Var. % |
Sal es | 2, 1 27, 59 7 | 1 0 0 . 0 0 % | 1 , 9 25, 8 1 1 | 1 0 0 . 0 0 % | 20 1 , 786 | 10 % |
Cost of sales | (2,012,167) | -94.57% | (1,819,184) | -94.46% | (192,983) | 11% |
Gro ss pro fi t | 1 15, 430 | 5. 43% | 1 0 6 , 627 | 5. 54% | 8 , 80 3 | 8 % |
Other income | - | 0.00% | 2,677 | 0.14% | (2,677) | -100% |
Sales and marketing costs | (41,196) | -1.94% | (35,680) | -1.85% | (5,516) | 15% |
Overheads and administrative costs | (59,587) | -2.80% | (56,623) | -2.94% | (2,964) | 5% |
Operati ng i nco me ( EBIT ) | 1 4, 6 47 | 0 . 69 % | 1 7, 0 0 1 | 0 . 8 8 % | ( 2, 354) | -14% |
Finance costs - net | (3,016) | -0.14% | (2,144) | -0.11% | (872) | 41% |
Other investments expenses / (incomes) | 36 | 0.00% | 1 | 0.00% | 35 | 3500% |
P ro fi t befo re i nco me taxes | 1 1 , 6 67 | 0 . 55% | 1 4, 858 | 0 . 77% | ( 3, 1 9 1 ) | -21 % |
Income tax expenses | (2,743) | -0.13% | (3,073) | -0.16% | 330 | -11% |
Net i nco me | 8 , 9 24 | 0 . 42% | 1 1 , 785 | 0 . 61 % | ( 2, 8 61 ) | -24% |
Earnings per share - basic (euro) | 0.17 | 0.23 | (0.06) | -26% |
( euro /00 0 ) | Q3 20 17 | % | Q 3 20 16 | % | Var. | Var. % |
Sales | 6 90 , 755 | 10 0 . 0 0 % | 6 80 , 836 | 1 00 . 0 0 % | 9 , 9 19 | 1 % |
Cost of sales | (655,084) | -94.84% | (644,971) | -94.73% | (10,113) | 2% |
Gro ss profi t | 35, 671 | 5. 16 % | 35, 86 5 | 5. 27% | ( 19 4) | -1 % |
Sales and marketing costs | (12,711) | -1.84% | (12,816) | -1.88% | 105 | -1% |
Overheads and administrative costs | (18,143) | -2.63% | (20,359) | -2.99% | 2,216 | -11% |
Operati ng income ( EBIT) | 4, 817 | 0 . 70 % | 2, 6 90 | 0 . 40 % | 2, 127 | 79 % |
Finance costs - net | (1,149) | -0.17% | (1,043) | -0.15% | (106) | 10% |
Other investments expenses / (incomes) | 52 | 0.01% | - | 0.00% | 52 | 100% |
Pro fi t befo re income taxes | 3, 720 | 0 . 54% | 1 , 647 | 0 . 24% | 2, 0 73 | 126 % |
Income tax expenses | (1,063) | -0.15% | (220) | -0.03% | (843) | 383% |
Net i nco me | 2, 6 57 | 0 . 38 % | 1 , 427 | 0 . 21 % | 1 , 230 | 86 % |
Earnings per share - basic (euro) | 0.05 | 0.03 | 0.02 | 67% |
Consolidated Sales, equal to € 2,127.6 million, showed an increase of +10% (€ 201.8 million) compared to
€ 1,925.8 million of the first nine months 2016. The third quarter highlighted an increase of +1% compared to the same period of the previous year (from € 680.8 million to € 690.8 million). With the same consolidation scope, i.e. excluding the 2016 acquired companies contribution in both the fiscal years,
consolidated sales of the first nine months 2017 would have been equal to € 1,721.7 million (€ 1,775.4 million in the same period of 2016);
Consolidated Gross profit, equal to € 115.4 million, showed an increase of +8% (€ 8.8 million) compared to the same period of 2016 as a consequence of higher sales only partially offset by a decrease in the gross profit margin. In the third quarter, gross profit, equal to € 35.7 million, decreased by -1% compared to the same period of the previous year. With the same consolidation scope, i.e. excluding the 2016 acquired companies contribution in both the fiscal years, consolidated gross profit of the first nine months 2017 would have been equal to € 95.1 million, decreased by -3% compared to the same period of 2016 (€ 98.2 million);
Other income, recorded only in the first nine months of 2016, amounted to € 2.7 million and referred entirely to the gain realized from the newly established company EDSlan S.r.l. for the business unit acquisition relating to distribution activities in networking, cabling, VoIP and UCC - unified communication sectors, from the former EDSlan S.p.A..
Operating income (EBIT) in the first nine months of 2017, equal to € 14.6 million, showed a change of -14% compared to the first nine months 2016, with an EBIT margin decreased to 0.69% from 0.88%, mainly due to a reduction in the gross profit margin. In the third quarter EBIT, equal to € 4.8 million, increased by +79% (€ 2.1 million) compared to the third quarter 2016, with an EBIT margin increase from 0.40% to 0.70%. Even net of non-recurring income items, EBIT for the quarter shows an improvement of +12% from 0.66% to 0.73%. With the same consolidation scope, i.e. excluding the 2016 acquired companies contribution in both the fiscal years, EBIT of the first nine months 2017 would have been equal to € 10.7 million compared to € 13.1 million in the same period of 2016;
Consolidated Profit before income taxes, equal to € 11.7 million, showed a reduction of -21% compared to the first nine months of 2016, more pronounced than the EBIT reduction due to greater financial charges as a consequence of the higher level of medium/long term indebtedness as a result of the new loan obtained by the Parent Company on 28 February 2017 and of on-going loans in the subsidiary Vinzeo Technologies S.A.U. acquired on 1° July 2016. In the third quarter profit before income taxes showed a decrease equal to € 2.1 million reaching the amount of € 3.7 million;
Consolidated Net income, equal to € 8.9 million, showed a reduction of -24% (€ -2.9 million) compared to the first nine months of 2016. In the third quarter 2017 consolidated net income amounted to € 2.7 million compared with € 1.4 million of the first nine months of 2016 (+86%);
Basic earnings per ordinary share as at 30 September 2017, equal to € 0.17, showed a decrease of -26% compared to the first nine months of 2016 (€ 0.23). In the third quarter basic earnings per ordinary share was equal to € 0.05, compared with € 0.03 of the corresponding quarter of 2016 (+67%).
( eu ro /0 0 0 ) 30 /0 9 /20 1 7 % 31 /1 2/20 1 6 % Var. Var. %
Fixed assets
124,146
26.83%
124,516
58.59%
(370)
0%
Operating net working capital
357,708
77.29%
102,046
48.01%
255,662
251%
Other current assets/liabilities
(4,347)
-0.94%
276
0.13%
(4,622)
-1676%
Other non-current assets/liabilities
(14,711)
-3.18%
(14,305)
-6.73%
(406)
3%
T o tal u ses
462, 79 6
1 0 0 . 0 0 %
21 2, 533
1 0 0 . 0 0 %
250 , 26 3
118 %
Short-term financial liabilities
61,439
13.28%
151,885
71.46%
(90,446)
-60%
Current financial (assets)/liabilities for derivatives
488
0.11%
483
0.23%
5
1%
Financial receivables from factoring companies
(7,813)
-1.69%
(1,492)
-0.70%
(6,321)
424%
Current debts for investments in subsidiaries
5,086
1.10%
4,719
2.22%
367
8%
Other current financial receivables
(486)
-0.10%
(5,596)
-2.63%
5,111
-91%
Cash and cash equivalents
(44,353)
-9.58%
(285,933)
-134.54%
241,580
-84%
Net current financial debt
14,361
3.10%
(135,934)
-63.96%
150,296
-111%
Borrowings
125,344
27.08%
28,833
13.57%
96,511
335%
Non - current debts for investments in subsidiaries
3,939
0.85%
3,941
1.85%
(2)
0%
Non-current financial (assets)/liab. for derivatives
111
0.02%
28
0.01%
83
296%
Other non - current financial receivables
(1,870)
-0.40%
(2,292)
-1.08%
422
-18%
Net financial debt (A)
141,885
30.66%
(105,424)
-49.60%
247,309
-235%
Net equity (B)
320,911
69.34%
317,957
149.60%
2,954
1%
T o tal so u rces o f fu nds ( C= A+ B)
462, 79 6
1 0 0 . 0 0 %
21 2, 533
1 0 0 . 0 0 %
250 , 26 3
118 %
Consolidated net working capital as at 30 September 2017 was equal to € 357.7 million compared with
€ 102.0 million at 31 December 2016. With the same consolidation scope, i.e. excluding the 2016 acquired companies contribution from the results as at 30 September 2017, consolidated net working capital as at 30 September 2017 would have been equal to € 239.2 million;
Net financial position as at 30 September 2017, negative by € 141.9 million, compared with a cash surplus equal to € 105.4 million at 31 December 2016. With the same consolidation scope, i.e. excluding the 2016 acquired companies contribution from the results as at 30 September 2017, net financial position as at 30 September 2017 would have been equal to € 20.5 million.
Reduction of net cash surplus was due to the performance of consolidated net working capital as at 30 September 2017 which in turn is influenced by technical events often not related to the average level of working capital and by the level of utilisation of both 'without - recourse' factoring programs referring to the trade receivables and of the corresponding securization program.
This program is aimed at transferring risks and rewards to the buyer, thus receivables sold are eliminated from balance sheet according to IAS 39.
Taking into account other technical forms of cash advances other than 'without-recourse assignment', but showing the same effects - such as 'confirming' used in Spain -, the overall impact on financial debt at 30 September 2017 was approx. € 189 million (approx. € 400 million as at 31 December 2016);
Consolidated net equity as at 30 September 2017, equal to € 320.9 million, showed an increase of € 3.0 million compared to € 318.0 million as at 31 December 2016.
Esprinet S.p.A. published this content on 13 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 13 November 2017 18:53:08 UTC.
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