GVS S p A : - Consolidated H1 2023 Results Approval

Zola Predosa (BO), 05 September 2023 -

PRESS RELEASE

GVS BOARD OF DIRECTORS APPROVES THE CONSOLIDATED H1 2023 RESULTS

-

CONSOLIDATED REVENUE OF 213.4 MILLION EURO, +28.1% COMPARED TO H1 2022

ADJUSTED EBITDA OF 47.1 MILLION EURO, UP 17.9% ON H1 2022, WITH A MARGIN

ON REVENUE OF 22.1%

THIRD CONSECUTIVE QUARTER OF PROFITABILITY GROWTH, WITH ADJUSTED EBITDA

MARGIN REACHING 22.4% IN Q2 2023

NET FINANCIAL DEBT OF 365 MILLION EURO, IMPROVING BY APPROXIMATELY 24

MILLION EURO ON MARCH 2023

2023-2025 FINANCIAL TARGETS UPDATE WILL BE PRESENTED ON 25 SEPTEMBER 2023

The Board of Directors of GVS S.p.A. (the "Company" or the "Group"), a leading provider of advanced filtration solutions for highly critical applications, met today in Zola Pedrosa (BO) and approved the consolidated half-yearly report at 30 June 2023, which have been prepared in accordance with IFRS international accounting standards.

***

ANALYSIS OF THE GROUP'S ECONOMIC PERFORMANCE

During the first half of 2023, GVS achieved consolidated revenues of 213.4 million euro, up 28.1% compared to 166.6 million euro, recorded in the first six months of 2022, thanks to the contribution of the Healthcare & Lifesciences division (which includes the last acquisitions made during the previous year, the STT Group and the Haemotronic Group, which contributed to the revenues of the first half of 2022 from the date of their acquisition on 1 March 2022 and 15 June 2022, respectively) and the Health & Safety division.

The Healthcare & Life Sciences division revenues recorded significant growth in the Healthcare Liquid business (+80.6%), compared to the same period of last year thanks to the acquisitions concluded in 2022 of STT and Haemotronic, showing significant growth on last year, thanks to the excellent commercial performance, which made it possible to absorb the contraction recorded in the

Healthcare Air & Gas business. The Laboratory business showed a stable turnover in the two half-year periods under comparison, settling at around 16.3 million euro, the same as in the previous period.

The Energy & Mobility division recorded a trend with a 12.4% decrease in revenue compared to the same period of the previous year, as a result of the de-stocking by its customers, particularly in the Sport & Utility segment, which recorded sales down 31% on the same period of last year.

The Health & Safety division recorded a 6.7% year-on-year increase in sales, recovering, thanks to a 16.9% growth in Q2 2022, the reduction in sales that had characterised Q1 2023.

Adjusted EBITDA, up 17.9% compared to the first half of 2023, amounted to 47.1 million euro, with a margin on revenue of 22.1%. The period result is influenced by the contribution of acquisitions completed during 2022 and the price increase introduced during the first half of 2023.

The Company also posted its third consecutive quarter of profitability growth, achieving 22.4% adjusted EBITDA as a percentage of sales in Q2 2023, compared to 21.7% as a percentage recorded in Q1 2023, 19.4% in Q4 2022 and 15.9% in Q3 2022.

Adjusted EBIT with a margin on revenue of 15.8% amounted to 33.8 million euro (+17%) compared to

28.9 million euro in the previous year's period and in line with the growth seen at Adjusted EBITDA level.

Net financial expenses (net of foreign exchange losses of 4.6 million euro recorded during the first six months of 2023 and exchange gains of 23.6 million euro in 2022) increased in the period under review, from 1.2 million euro for the period ended 30 June 2023 to 7.3 million euro for the period ended 30 June 2023, mainly due to new borrowings related to the acquisitions completed in 2022 and the increase in market interest rates, to which some of the existing loans are linked.

Profit before tax from recurring activities reached 21.8 million euro in the period under review, a decrease of 29.6 million euro compared to 51.4 million euro in 2022, mainly due to the effect of the foreign exchange gain recorded in 2022 against the effect of the foreign exchange loss recorded in the first half of 2023.

Net financial debt at 30 June 2023 was -365.0 million euro. The decrease compared to 31 December 2022, totalling 10.5 million euro, is mainly due to the contribution of cash generated from operations in the amount of 48.9 million euro, net of cash absorbed by changes in working capital in the amount of 8.6 million euro and cash used for net investments in tangible and intangible assets for the period (12.3 million euro), net financial expenses (10.2 million euro) and tax payments (4.7 million euro).

BUSINESS OUTLOOK

GVS continues on its path of improving its economic and financial performance through the progressive integration of the recently acquired companies.

The positive half-year result confirms the trend of profitability recovery that began in Q4 2022 and was achieved despite the negative impact of de-stocking policies on revenue growth.

Customer de-stocking is expected to continue in the second half of 2023, with the expectation of a potential recovery in sales volumes during 2024. In this regard, the impact that the current

macroeconomic scenario, characterised by an increase in interest rates to counteract high inflationary levels, will have on the real economy will need to be carefully monitored, particularly in relation to the growth expectations of the gross domestic product of the main economies (the United States and the European Union) to which the Group is exposed.

As a result of the results achieved in the first half of 2023 and in consideration of the uncertainty variables described above, with reference to the FY 2023 guidance communicated at the time of approval of the 2022 results (revenues in a range between 440 million euro and 460 million euro, Adjusted EBITDA in a range between 95 million euro and 105 million euro and Net Financial Debt in a range between 340 million euro and 360 million euro), the Company confirms the forecasts for Adjusted EBITDA and net financial debt in line with expectations, while 2023 turnover is expected to fall within a range of between 425 and 430 million euro.

On 25 September 2023, the Company will present an update of 2023-2025 financial targets.

***

DECLARATION PURSUANT TO ARTICLE 154-BIS, PARAGRAPH 2, T.U.F.

The Manager responsible for preparing the company's financial reports, Emanuele Stanco, declares, pursuant to Article 154-bis, second paragraph of Legislative Decree 58/98, that the accounting information contained in this press release corresponds to the results in the Company's documents, books and accounting records.

***

The half-yearly report as at 30 June 2023, approved by the Board of Directors today, will be made available to the public at the Company's registered office and can be consulted on the Company's website at www.gvs.comand on the authorised storage mechanism "eMarket Storage", managed by Teleborsa Srl.

***

CONFERENCE CALL

Financial results for H1 2023 will be presented on Tuesday, 5 September at 16:00 CET during a webinar/conference call held by the Group's Senior Management.

The event can be followed in webinar or telephone mode by registering at the link below:

CLICK HERE TO REGISTER FOR THE CONFERENCE CALL & WEBINAR

The presentation given by the Senior Management will be available before the beginning of the conference call on the authorised storage mechanism eMarket Storage, managed by Teleborsa Srl, as well as on the Company's website www.gvs.com (in the section Investor Relations/Financial Presentations).

***

This press release is available on the regulated information dissemination system eMarket SDIR, managed by Teleborsa Srl, as well as on the Company's website www.gvs.com(in the Investor/Press releases section).

***

Contacts

Investor Relations GVS S.p.A.

Guido Bacchelli, Investor Relations and M&A Director

[e-mail]

DISCLAIMER

This press release contains forward-looking statements concerning future events and operating, economic and financial results of GVS. These forecasts have by their very nature a component of risk and uncertainty, as they depend on the occurrence of future events and developments. Actual results may deviate even significantly from those announced in relation to a multitude of external factors not necessarily under GVS's control.

Consolidated Financial Statements as of 30 June 2023

Consolidated Income Statement

	(In thousands of euro)			Half-year ended 30 June
			2023	2022
	Revenues from contracts with customers	213,372	166,611
	Other revenues and proceeds		2,595	1,551
	Total revenues		215,967	168,162
	Purchases and consumption of raw materials, semi-products and finished products		(70,285)	(52,357)
	Personnel costs		(67,213)	(56,188)
	Service costs		(28,710)	(20,985)
	Other operating costs		(4,139)	(2,102)
	Gross operating profit (EBITDA)		45,620	36,530
	Net write downs of financial assets		(479)	(232)
	Amortisation, depreciation and write downs		(21,403)	(15,553)
	EBIT		23,738	20,745
	Financial proceeds		1,244	23,947
	Financial charges		(15,017)	(2,167)
	Profit (loss) before tax		9,965	42,525
	Income tax		(2,629)	(10,084)
	Net profit		7,336	32,441
	Group's share		7,331	32,437
	Minority share		5	4
	Basic net profit per share (in euro)		0.04	0.19
	Diluted net profit per share (in euro)		0.04	0.19

Analysis of reclassified Income Statement

			Period of 6 months ended 30 June
		of which				of which
		non-	2023			non-	2022
(In thousands of euro)	2023	recurring	Adjusted	%	2022	recurring	Adjusted	%
Revenues from sales and services	213,372		213,372	100.0%	166,611		166,611	100.0%
Other revenues and income	2,595	319	2,276	1.1%	1,551		1,551	0.9%
Total revenue	215,967	319	215,648	101.1%	168,162	-	168,162	100.9%
Raw material purchase costs and
changes in inventories	(70,285)		(70,285)	-32.9%	(52,357)	(996)	(51,361)	-30.8%
Provision of services	(28,710)	(268)	(28,442)	-13.3%	(20,985)	(978)	(20,007)	-12.0%
Other operating expenses	(4,139)	(857)	(3,282)	-1.5%	(2,102)		(2,102)	-1.3%
Added value	112,833	(806)	113,639	53.3%	92,718	(1,974)	94,692	56.8%
Labour cost	(67,213)	(649)	(66,564)	-31.2%	(56,188)	(1,415)	(54,773)	-32.9%
EBITDA	45,620	(1,455)	47,075	22.1%	36,530	(3,389)	39,919	24.0%
Depreciation and amortisation	(21,403)	(8,579)	(12,824)	-6.0%	(15,553)	(4,725)	(10,828)	-6.5%
Provisions and write-downs	(479)		(479)	-0.2%	(232)		(232)	-0.1%
EBIT	23,738	(10,034)	33,772	15.8%	20,745	(8,114)	28,859	17.3%
Financial income and expenses	(13,773)	(1,784)	(11,989)	-5.6%	21,780	(713)	22,493	13.5%
Pre-tax result	9,964	(11,818)	21,783	10.2%	42,525	(8,827)	51,352	30.8%
Income taxes	(2,629)	2,654	(5,283)	-2.5%	(10,084)	1,788	(11,872)	-7.1%
Group and minority net profit	7,336	(9,164)	16,501	7.7%	32,441	(7,039)	39,480	23.7%