Neodecortech S p A : 7.09.2021 Approval of Neodecortech S.p.A. Consolidated Financial Report at 30 June 2021 Download

PRESS RELEASE

Approval of Neodecortech S.p.A. Consolidated Financial Report at 30 June 2021

• Turnover € 82.4 million, up by 24.2% versus first half 2019 (€ 66.4 million, period of comparable market activity) and up by 51.2% also versus first half 2020 (€ 54.5 million, financial year significantly affected by the shut-down of production sites due to the pandemic);
• EBITDA € 9.8 million, up by 74.4% versus 30 June 2020 (€ 5.6 million) and by 39.1% versus 30 June 2019 (€ 7.1 million); EBITDA margin at 30 June 2021 equal to 11.9% of revenue;
• EBIT € 5.3 million (€ 1.2 million at 30 June 2020 and € 2.9 million at 30 June 2019), equal to 6.5% of revenue;
• Consolidated net profit € 3.1 million (€ 0.2 million at 30 June 2020 and € 1.1 million at 30 June 2019);
• Net Financial Debt approximately € 41 million at 30 June 2021, down sharply versus € 48.2 million at 30 June 2020 and in line versus € 39.9 million at 31 December 2020, after capital expenditure of € 4.7 million.

Filago, 7 September 2021

Neodecortech S.p.A. ("NDT" or the "Company"), one of Europe's top players in the production of decorative papers for laminated panels and flooring used in interior design, listed on the STAR segment of the MTA (electronic stock market) organized and managed by Borsa Italiana S.p.A., announces that the Board of Directors met today and approved the Consolidated Financial Report at 30 June 2021, which will be published within the time limits set forth by the relevant laws, together with the results of the audit currently underway.

In the words of CEO Luigi Cologni: "The Group's operating and financial results for first half 2021, approved today by the Board of Directors, prove that the figures are no longer impacted by the ongoing pandemic, unlike those recorded at June 2020.

The revenue growth trend we saw in both second half 2020 and first quarter 2021 still continues. The unprecedented results achieved by the Neodecortech Group were driven not only by the good market performance, but also by the gradual and increasing contribution of sales from the new product lines of Neodecortech S.p.A. All this regardless of the spike in the prices of raw materials (pulp, titanium dioxide, resins, pvc) and, in some cases, of their shortage.

Specifically, revenue, EBITDA and net profit for first half 2021 were on a strong rise not only versus the same period of 2020, which was greatly impacted by the COVID-19 pandemic, but also versus first half 2019, a normal period of operations; these results prove that the Group has managed to come out of the pandemic-related context, and has performed even better than in first half 2019, considered a six-month period of an ordinary year. The levels of growth seen, while corroborated by the trend in orders and figures for the first two months of the third quarter of the current year, continue to be a reflection of the upbeat mood of our industry, but should be read, however, also as a likely anticipation of the growth envisaged in the 2021-2023 Business Plan.

Neodecortech S.p.A.	tel [phone]	C.F. e R.I. 00725270151	www.neodecortech.it
Via Provinciale, 2	fax [phone]	P.IVA IT 02833670165	[e-mail]
24040 Filago, Bergamo	Capitale Sociale Euro 17.398.687,37 i.v.	R.E.A. BG - 193331

The challenge for the next 18-24 months will therefore be to consolidate and preserve the levels of turnover and profitability achieved thanks to the full implementation of the ambitious investment plan envisaged in the Business Plan, while keeping a watchful eye on the NFP trend".

CONSOLIDATED OPERATING AND FINANCIAL HIGHLIGHTS AT 30 JUNE 2021

Consolidated net revenue at 30 June 2021 increased by 51.2% versus first half 2020 (from € 54.5 million to € 82.4 million), a period severely impacted by production plant closures due to the COVID-19 pandemic, but also versus first half 2019, a period instead of normal operations, by 24.2% (€ 66.4 million).

More specifically, sales in the Printed Decorative Paper Division increased by 75%, sales in the Decorative Paper Division grew by 67.5%, while sales in the Energy Division were down slightly by 1.1% versus the same period of the prior year.

Geographically speaking, the different areas showed a constant upward performance. The following changes were therefore recorded, excluding the Energy division: in Italy sales rose by 82.4%, in Europe by 52.2%, in Asia and the Middle East by over 200% and in America by 84.8% versus the same period of the prior year.

Other revenue includes, for the most part, approximately € 200 thousand in capital gains from the sale of tangible fixed assets by the parent company. At 30 June 2020, the item had included non-recurring items:

• 1,204 thousand from the release of 40% of the Stock Grant plan related to the non-achievement of the MTA listing target by March 2020, € 350 thousand from an insurance reimbursement acknowledged to the subsidiary Cartiere di Guarcino, and € 2,840 thousand from an insurance indemnity received by the subsidiary Bio Energia Guarcino.

In first half 2021, the cost of sales and other net operating costs amounted to € 61.8 million, making for 75% of revenue, down in terms of percentage versus € 44.5 million in the same period of the prior year (81.5% of revenue).

Personnel expense amounted to € 11.2 million, or 13.6% of revenue, down versus the same period of the prior year (16.7% of revenue), despite the increase in absolute terms of € 2.1 million, due to the hires resulting from the above general trend and the full entry into production of the new products of the Parent Company, which began in second half 2020, but came into full operation in first half 2021. The number of employees at 30 June 2021 was 408 versus 385 at 31 December 2020.

EBITDA amounted to € 9.8 million (11.9% margin), up by 74.4% versus 30 June 2020 (€ 5.6 million or 10.3% margin on revenue), but also up by 39.1% versus € 7.1 million in first half 2019 (10.6% margin on revenue).

EBIT came to € 5.3 million (6.5% of revenue) versus € 1.2 million (2.3% of revenue) in first half 2020 and € 2.9 million at 30 June 2019 (4.4% of revenue).

Net financial expense amounted to € 0.7 million in the six months versus € 0.8 million in first half 2020, proof of the ongoing strategy to optimize and reduce the cost of debt.

Profit before tax amounted to € 4.7 million (3.8% of revenue) versus € 0.5 million (0.9% of revenue) in first half 2020 and € 1.9 million at 30 June 2019 (2.9% of revenue).

The first six months close with a net profit of € 3.1 million (3.8% of revenue), up sharply from € 0.2 million in first 2020 (or 0.4% of revenue), and also up from € 1.1 million in first half 2019 (1.7% of revenue).

The net financial position at 30 June 2021 stands at € 41 million, down by € 7.2 million versus 30 June

Neodecortech S.p.A.	tel [phone]	C.F. e R.I. 00725270151	www.neodecortech.it
Via Provinciale, 2	fax [phone]	P.IVA IT 02833670165	[e-mail]
24040 Filago, Bergamo	Capitale Sociale Euro 17.398.687,37 i.v.	R.E.A. BG - 193331

2020 (€ 48.2 million) and in line with € 39.9 million at 31 December 2020, after capital expenditure of € 4.7 million and dividend payouts of € 1.2 million.

Lastly, it should be noted that the Group has no longer any loan agreements in place containing covenants tied to compliance with certain financial ratios, having fully paid the last loan that included such covenants during the first half of the year.

(Euro millions)	June 2021	%	June 2020	%	Var. %	June 2019	%	Var. %
Revenues	82,4	100,0%	54,5	100,0%	51,2%	66,4	100,0%	24,2%
EBITDA	9,8	11,9%	5,6	10,3%	74,4%	7,1	10,6%	39,1%
EBIT	5,3	6,4%	1,2	2,3%	330,2%	2,9	4,4%	83,7%
Net Income	3,1	3,8%	0,2	0,4%	1508,2%	1,1	1,7%	183,9%
(Euro millions)	Giu 2021	Giu 2020	Var.	Giu 2019	Var.
Net Financial Position	41,0		48,2		-7,2	39,9		1,1

Despite the persisting pandemic, with regard to the period from 1 January 2021 to 30 June 2021, revenue, margins and the Net Financial Position are in line with the estimates contained in the 2021-2023 Business Plan ("the 2021-2023 Business Plan") approved by the Board of Directors on 10 February 2021.

Therefore, based also on the trend in orders and the figures for the first two months of the third quarter of the current year, the Group believes it can maintain a positive view on the end of the year in line with the results achieved during the first six months.

COVID-19 containment measures

In light of the above, it appears clear that the Group's consolidated operating and financial figures at 30 June 2021 were unaffected by the COVID-19 pandemic. The upward trend in turnover and order backlog already reported in second half 2020 continued in first quarter 2021. The Group continued to comply with national pandemic containment rules and adopt the safety protocols on the health of workers and third parties, also managing a small number of non-severe COVID cases among employees. For part of the period, use of smart working continued for non-production staff. As from April 2021, the standstill agreed upon last year with SelmaBipiemme Leasing S.p.A. regarding the lease in place with Bio Energia Guarcino S.r.l. was terminated, with the resumption of the normal payment of lease instalments.

EVENTS AFTER THE REPORTING PERIOD

The impact from the shortage of resins in July 2021 for the parent company Neodecortech S.p.A. led to reduced operations of the plants for the production of impregnated paper and the need for related personnel to take early leave. The estimated loss of turnover in the third quarter will be around a few hundred thousand euro. However, this revenue shortfall is expected not to impact much on the ongoing strong growth trend versus the estimates made in the 2021 Budget.

Neodecortech S.p.A.	tel [phone]	C.F. e R.I. 00725270151	www.neodecortech.it
Via Provinciale, 2	fax [phone]	P.IVA IT 02833670165	[e-mail]
24040 Filago, Bergamo	Capitale Sociale Euro 17.398.687,37 i.v.	R.E.A. BG - 193331

OUTLOOK FOR THE YEAR

The second half of the year kicked off with July and August showing the same upward trend seen in recent months. To date, the entire production chain in which Neodecortech and Cartiere di Guarcino operate is working at full capacity, with an order book significantly higher than normal. This mood is shared by all the sales areas (90% Europe) in which the companies mainly operate.

All this despite a third round of raw material price increases in July 2021 - the transfer to customers of which will be completed in September 2021 - and a partial lack of certain raw materials such as resins for Neodecortech.

The Group continues to pursue its policy of containing financial costs, optimizing short and medium/long- term lines of credit and reducing its net financial position.

***

ALTERNATIVE PERFORMANCE MEASURES

The definition of the main APMs used by the Neodecortech Group is given below:

• EBITDA and EBIT: alternative performance measures not defined by IFRS but used by Group Management to monitor and measure its performance, as they are not affected by volatility, due to the effects of the range of criteria for determining taxable income, the amount and characteristics of the capital employed and - for EBITDA - the amortization/depreciation policies. These measures are also commonly used by analysts and investors to assess company performance;
• OPERATING WORKING CAPITAL, NET WORKING CAPITAL, FIXED ASSETS and NET INVESTED CAPITAL: allow a better assessment of both the ability to meet short-term trade commitments through current trade assets and the consistency of the structure of loans and sources of financing in terms of time;
• NET FINANCIAL DEBT: the figure shown is in line with the value of net financial debt determined in accordance with the recommendations of the CESR (Committee of European Securities Regulators) of 10 February 2005 and referred to by CONSOB. This measure allows a better assessment of the overall level of debt, capital strength and debt repayability.

The Financial Reporting Manager, Fabio Zanobini, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Finance Law, that the accounting information contained herein is consistent with the underlying accounting documents, books and records.

The Consolidated Financial Report of the Neodecortech Group at 30 June 2021, approved by the Board of Directors today, will be published, in accordance with current regulations, at the Company's registered office and can be consulted on the Company's website at the following address www.neodecortech.it, as well as at the authorized storage mechanism www.1info.it, within the time limits set forth by the relevant laws, together with the results of the audit currently underway.

Attached herein, the Income Statement, the Statement of Financial Position and the Statement of Cash Flows, the audit of which is still underway.

Neodecortech S.p.A.	tel [phone]	C.F. e R.I. 00725270151	www.neodecortech.it
Via Provinciale, 2	fax [phone]	P.IVA IT 02833670165	[e-mail]
24040 Filago, Bergamo	Capitale Sociale Euro 17.398.687,37 i.v.	R.E.A. BG - 193331

CONSOLIDATED INCOME STATEMENT AT 30 JUNE 2021

(Euro thousands)	Notes	30 JUNE 2021	%	30 JUNE 2020	%	Chg.	% change
Revenue from sales and services	1	82.434	100,0%	54.530	100,0%	27.904	51,2%
Changes in w ork in progress, semi-finished and finished products 2	(486)	(0,6%)	86	0,2%	(572)	(665,1%)
Other revenue	3	903	1,1%	4.598	8,4%	(3.695)	(80,4%)
Raw and ancillary materials and consumables	4	(49.561)	(60,1%)	(34.133)	(62,6%)	(15.428)	45,2%
Other operating expense	5	(12.235)	(14,8%)	(10.319)	(18,9%)	(1.916)	18,6%
Personnel expense	6	(11.229)	(13,6%)	(9.129)	(16,7%)	(2.100)	23,0%
Amortization and depreciation	7	(4.322)	(5,2%)	(4.170)	(7,6%)	(152)	3,6%
Allocations	8	(192)	(0,2%)	(229)	(0,4%)	37	(16,2%)
EBIT		5.313	6,5%	1.235	2,3%	4.078	330,2%
Financial expense	9	(682)	(0,8%)	(779)	(1,4%)	97	(12,5%)
Financial income	10	112	0,1%	19	0,0%	93	489,5%
Pre-tax profit/(loss)		4.743	5,8%	475	0,9%	4.268	898,5%
Income tax	11	(1.623)	(2,0%)	(281)	(0,5%)	(1.342)	477,6%
Profit/(loss) for the period		3.120	3,8%	194	0,4%	2.926	1508,2%

Neodecortech S.p.A.	tel [phone]	C.F. e R.I. 00725270151	www.neodecortech.it
Via Provinciale, 2	fax [phone]	P.IVA IT 02833670165	[e-mail]
24040 Filago, Bergamo	Capitale Sociale Euro 17.398.687,37 i.v.	R.E.A. BG - 193331