12.09.2023 17:40 - The BoD of Piovan SpA approves the Consolidated Half - Year Financial Report as of 30 06 2023

Press Release

THE BOD OF PIOVAN S.P.A. APPROVES THE CONSOLIDATED HALF-YEAR FINANCIAL REPORT

AS OF JUNE 30, 2023

RECORD PERFORMANCE FOR PIOVAN GROUP IN THE FIRST HALF OF 2023 WITH TOTAL REVENUE AND OTHER INCOME REACHING € 290.1 MILLION, UP 21.9% ON THE PREVIOUS YEAR (+15.0% ON AN ORGANIC BASIS) AND AN ADJUSTED EBITDA EQUAL TO € 37.7 MILLION (13.0% OF REVENUE AND OTHER INCOME), INCREASING BY 37.9% ON THE SAME PERIOD OF 2022 (+32.6% ON AN ORGANIC BASIS).

• Consolidated revenue and other income of € 290.1 million, growing by 21.9% on June 30, 2022 (+15.0% on a like-for-like consolidation basis);
• Consolidated Adjusted EBITDA of € 37.7 million (13.0% margin), increasing by 37.9% on June 30, 2022 (+32.6% on a like-for-likeconsolidation basis and excluding the impact of certain non- recurring items);
• Consolidated Operating Profit (EBIT) of € 32.5 million (11.2% margin) excluding the effects of IPEG Purchase Price Allocation ("PPA"), increasing by € 10.8 million (+49.7%) on June 30, 2022;
• Consolidated Net Profit of € 21.8 million (7.5% margin), increasing by € 6.9 million (+45.7%) on June 30, 2022;
• Consolidated Net Financial Position is negative for € 102.6 million. Excluding the effects of the application of IFRS 16, the consolidated net financial position as of June 30, 2023 would amount to negative € 84.7 million.

Santa Maria di Sala (Venice), September 12, 2023 - The Board of Directors of Piovan S.p.A. ("Piovan" or the "Company") today reviewed and approved the Consolidated Half-Year Financial Report as of June 30, 2023.

"The growth in revenues and - above all - the marked improvement in profitability achieved in the first half of 2023 can mainly be attributed to the good balance of our business portfolio, both in terms of end-markets and geographies, to the implementation of our strategy always focused on the needs of our customers, and to the first positive results deriving from the integration of the Group in North America" declares Nicola Piovan, Executive Chairman of Piovan S.p.A.

"The Group also confirms its ability to seize the opportunities arising from the ecological transition, both by contributing to the circular economy in the packaging sector and the development of technological solutions that enable the reduction of fossil fuels in electric mobility. Solutions that require an increasingly innovation- oriented approach, which has always been part of our DNA" adds Filippo Zuppichin, Chief Executive Officer of Piovan S.p.A.

The consolidated key financial highlights of the 2023 first half follow:

				Economic performance indicators				Changes
	(amounts in €'000)		First half-year			% on total			First half-year			% on total			2023 vs
				revenues and					revenues and					%
			2023					2022 (1)					2022
					other income					other income
	Revenue	285,437			98.4%		231,995		97.5%	53,442		23.0%
	Other revenue and income	4,695			1.6%		6,058		2.5%	(1,363)		(22.5%)
	TOTAL REVENUE AND OTHER	290,132			100.0%		238,052		100.0%	52,080		21.9%
	INCOME
Adjusted EBITDA	37,677			13.0%		27,323		11.5%	10,354		37.9%
	EBITDA	37,458			12.9%		26,710		11.2%	10,748		40.2%
OPERATING PROFIT	30,572			10.5%		18,582		7.8%	11,990		64.5%
PROFIT BEFORE TAXES	31,544			10.9%		21,481		9.0%	10,063		46.8%
Income taxes	9,703			3.3%		6,494		2.7%	3,209		49.4%
NET PROFIT	21,840			7.5%		14,987		6.3%	6,853		45.7%
Attributable to:
Owners of the parent	22,610			7.8%		14,848		6.2%
Non-controlling interests	(769)			(0.3%)		139		0.1%
Basic earnings per share	0.44					0.30
Diluted earnings per share	0.44					0.29

1. For the purposes of comparison, the statement of profit and loss figures for H1 2022 have been restated compared to the Half-Year Financial Report at June 30, 2022, following the definitive purchase price allocation for the IPEG group. Income taxes and the Net profit were restated.

Revenue analysis

Revenue

In the first half of 2023, Piovan Group revenue totaled € 285.4 million, with a strong growth on € 232.0 million in the first half of 2022, increasing by +23%.

Recognizing the effect of the acquisition of IPEG group retroactively to January 1, 2022, Piovan Group revenue in the first half of 2022 would have been equal to € 245.6 million, increasing by +16.2% in 2023.

Revenue calculated on a like-for-like basis (i.e. average exchange rate in the first half of 2022) would have decreased by € 1.1 million at € 284.3 million and showing a growth of 22.5% compared to the first half of 2022. The exchange effect on revenue was mainly due to the trends of the US dollar against the Euro and, to a lesser extent, to trends in the Renminbi.

Revenue by Business Segment

	€/000		H1 2023			%			H1 2022 (*)			%			H1 2023 vs H1			%
										2022
Technical Polymers	223,531			78.3%		175,533		75.7%	47,998	27.3%
Food & Industrial Applications	18,599			6.5%		23,230		10.0%	(4,631)	(19.9%)
Services	43,307			15.2%		33,232		14.3%	10,075	30.3%
Revenue	285,437			100.0%		231,995	100.0%	53,442	23.0%

1. H1 2022 includes IPEG group for just 5 months. Furthermore, it should be noted that, in order to better reflect the current configuration of products sold and services provided by Piovan Group, also following the acquisition of IPEG group, the nomenclatures of the reference markets have been redefined compared to previous financial communications.

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For what concerns the dynamic of revenue by Business Segment in the first half of 2023, it should be noted that:

• Technical Polymers Systems revenue increased by 27.3%, driven by good performances in all the geographical areas. In particular, the increase is attributable to (i) the increased use of recycled materials in rigid packaging, a sector in which the Group is a leader, (ii) the good performance of the Automotive sector, whereby the transition to electric models requires a significant transformation of metal components into technical polymers; and to (iii) investments in new pipelines, and more generally in high technical content components;
• Food & Industrial Applications Systems revenue decreased compared to the first half of 2022 due to the timing of development of a number of projects, mainly in the North American market, that are to be completed in the second half of 2023, and to the collection of orders for powder processing systems in the Technical Polymers market, which took some production capacity away from food powder processing systems in the Food & Industrial Applications market;
• the Services market reported revenue growth of 30.3% on the same period of the previous year, confirming the development expectations of the Group, which is also focusing on growth in this market.

Revenue by region

	€/000		H1 2023			%			H1 2022 (*)			%			H1 2023 vs H1			%
										2022
	EMEA	94,127			33.0%		88,021	37.9%		6,106	6.9%
	ASIA	32,637			11.4%		19,823	8.5%		12,814	64.6%
	NORTH AMERICA	148,814			52.1%		116,871	50.4%		31,943	27.3%
	SOUTH AMERICA	9,859			3.5%		7,280	3.1%		2,579	35.4%
	Revenue	285,437			100.0%		231,995	100.0%		53,442	23.0%

1. H1 2022 includes IPEG group for just 5 months.

Revenue in North America mainly grew as a result of the increased market shares, the good performances of the subsidiary Pelletron US and of the food area, and in part also driven by the positive impact of the EUR/USD exchange rate.

Growth in Asia, up by 64.6%, shows signs of recovery in the Asian market, also thanks to the winning of some major orders at the end of 2022 and early 2023, which had seen a slowdown in the first part of 2022 following the lockdowns in the first part of the year related to the re-emergence of COVID outbreaks.

Performance in Europe, while positive, reflects the fact that major projects underway in the food area had a final destination of North America and are developed in Europe. Finally, South America continued to perform well, with growth of 35.4%.

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Other revenues and income

Other revenues and income decreased by 22.5% on the first half of 2022. This aggregate included a number of operating grants in 2022. Recognizing the effect of the acquisition of IPEG group retroactively to January 1, 2022, Other revenue and income for Piovan Group in 2022 would have been equal to € 6.8 million (-30.6%).

Total revenues and other income

In the first half of 2023, therefore, Total revenues and other income of Piovan Group amounted to € 290.1 million, growing strongly compared to € 238.1 million in the first half of 2022 (+21.9%). Recognizing the effect of the acquisition of IPEG group retroactively to January 1, 2022, the amount of revenues and other income of Piovan Group in 2022 would have been equal to € 252.3 million, increasing by 15.0% in 2023.

Analysis of Group economic results

EBITDA

In the first half of 2023, EBITDA totaled € 37.5 million, an increase of 40.2% compared to € 26.7 million in the first half of 2022 (12.9% margin on total revenues and other income vs. 11.2% in the first half of 2022).

Recognizing the effect of the acquisition of IPEG group retroactively to January 1, 2022, EBITDA in the first half of 2022 would have been equal to € 27.8 million, increasing by 34.7% in 2023.

The growth in EBITDA reflects certain non-recurring costs incurred for activities related to the integration of IPEG group and certain additional costs related to a contract in the food market for a subsidiary.

Adjusted EBITDA

In the first half of 2023, Adjusted EBITDA totaled € 37.7 million (excluding certain non-recurring components or non-core activities), for a margin on total revenues and other income of 13.0%, increasing by 37.9% compared to Adj. EBITDA in the first half of 2022.

Recognizing the effect of the acquisition of IPEG group retroactively to January 1, 2022, Piovan Group Adj. EBITDA in the first half of 2022 would have been equal to € 28.4 million, increasing +32.6% in 2023.

EBIT

In the first half of 2023, EBIT totaled € 30.6 million, up from € 18.6 million in the first half of 2022.

EBIT, therefore, reflects the effects of the PPA of IPEG, which alone included the recognition of amortization of intangible assets of € 2.0 million in the first half of 2023 (€ 3.1 million in the first half of 2022).

The EBIT margin on total revenues and other income is equal to 10.5%, improving with respect to the previous year (7.8%). Excluding the effects of the PPA as described above, EBIT would have been equal to € 32.5

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million, for a margin on total revenues and other income of 11.2% (€ 21.7 million in the first half of 2022, for a margin of 9.1% on total revenues and other income).

As described above, the growth in EBIT reflects certain non-recurring costs incurred in the period for activities related to the integration of IPEG group and certain additional costs related to an order of a subsidiary.

Net Profit

The Net Profit in the first half of 2023 was equal to € 21.8 million, increasing on € 15.0 million for the same period of the previous year. The margin on total revenue and other income was equal to 7.5% (6.3% in the first half of 2022).

Net profit in the first half of 2023 benefited from the gain on the transfer of control of Toba PNC. As of the date on which the sale was finalized, the deconsolidated company had negative equity of € 2.6 million (of which € 1.3 million related to minority interests).

Excluding the amortization of the PPA of IPEG, equal to € 2.0 million (€ 3.1 million in the first half of 2022), its related fiscal effect equal to € 0.4 million (€ 0.6 million in the first half of 2022) and the gain on the sale of Toba PNC, net profit would have been equal to € 22.0 million (€ 17.5 million in the first half of 2022), for a margin on revenues and other income of 7.6% (7.3% in the first half of 2022). It is also reminded that the net profit in the first half of 2022 benefited from a positive effect of € 3.3 million due to the favorable trend of the dollar against the euro.

Earnings per share

Earnings per share was equal to € 0.44 as of June 30, 2023, compared to € 0.30 as of June 30, 2022.

Group Balance Sheet items overview

Consolidated Net Financial Position

The consolidated net financial position at June 30, 2023 was negative and equal to € 102.6 million, improving if compared to June 30, 2022 - when it was negative and equal to € 117.6 million - and decreasing if compared to a negative one equal to € 88.1 million at December 31, 2022, absorbing net cash in the amount of € 14.5 million, which was mainly attributable to the dividends resolved and paid by the Parent Company in May 2023 (about € 10.2 million) and the investments made in the semester (about € 4.5 million).

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