RACING FORCE S.P.A. THE BOARD OF DIRECTORS OF RACING FORCE S.P.A. APPROVED THE DRAFT FINANCIAL STATEMENTS AS OF DECEMBER 31st, 2022 AND THE CONSOLIDATED FINANCIAL STATEMENTS 2022
- Revenues: €58.9 million (+26.1% vs. 2021)
- EBITDA Adj.1 : €11.7 million (19.8% EBITDA margin and +30.5% vs. 2021)
- Adj. Net Income: €7.6 million (12.9% on Revenues and +53.6% vs. 2021)
- Operating Cash Flow: €3.2 million (€4.5 million in 2021)
- Net debt: €4.4 million (€0.7million in 2021)
Proposed dividend: €2.3 million (DPS €0.09 vs. €0.07 in 2021)
Ronco Scrivia (Genoa, Italy) March 29th, 2023 - The Board of Directors of Racing Force S.p.A., parent company of Racing Force Group, which is specialized in the development, production and marketing of safety components for motor racing worldwide, as well as listed on the Euronext Growth Milan (RFG) and Paris (ALRFG) segments, met today and approved the draft financial statements as of December 31st, 2022, as well as the consolidated financial statements for 2022, drafted in compliance with the Euronext Growth Milan Issuers' Regulations.
Paolo Delprato, President and CEO of Racing Force Group, remarked: "Fiscal year 2022 demonstrated once again how resilient our Group is in a market environment characterized by great uncertainty. The persistence of geopolitical tensions and strong inflationary and supply chain tensions have significantly increased the pressure on management. In this difficult scenario, the Group closed 2022 with highly positive results, driven by substantial growth and increasing marginality, as well as by a strong capital and financial structure, further strengthened by the share capital increase successfully completed in January 2023. The investment plan already launched, also thanks to the aforementioned capital increase to support
1 Adjusted figures are reported net of non-recurring costs and revenues relating to the listing on EG Milan and EG Paris recognized in the profit & loss during the fiscal year for Euro 30 thousand (Euro 1,054 thousand in 2021).
the Group's growth and diversification program, combined with the proven effectiveness of our management strategies, enable us to target significant growth for the coming years.
Once again I want to share the successful results achieved in the last fiscal year with all the women and men who work in our Group and who represent the real driving force behind our success”.
Summary of Group Results as of December 31st, 2022
- Group Revenues amounted to €58.9 million, with a significant increase compared to FY 2021 (+26.1%). With this result, average revenue growth rate over the last three years (CAGR 2019-2022) stands at 17.2%, on a like-for-like basis.
The increase characterized all geographic areas in which Racing Force operates, with strong increases in all major product categories.
- Adjusted EBITDA was €11.7 million (EBITDA margin 19.8%), a significant increase from the previous year, where it stood at €9.0 million (EBITDA margin 19.2%). This increase is mainly due to higher Contribution Margin (+35.2% compared to 2021), driven by the increase in sales of helmets, communication systems and racewear, which are characterized by a higher average marginality compared to other products offered by the Group, net of the price increases recorded during the year, both in terms of costs related to some raw materials and, particularly, in terms of logistics costs.
- Adjusted EBIT was €8.8 million (15.0% EBIT margin), increasing from 2021 (€6.6 million, 14.1% EBIT margin).
- Adjusted Net Income was €7.6 million (12.9% of Revenues), growing by +53.6% compared to the previous year (€4.9 million, 10.6% of Revenues).
- During the year, the Group generated a Cash Flow from Operations of €3.2 million, compared to the figure of €4.5 in 2021. In fact, during 2022, a non-recurring strategy of advance procurement was implemented, resulting in a significant increase in inventories and a consequent cash absorption, with the aim of i) reducing risks related to raw material availability and price fluctuation and ii) bringing inventories to a level considered adequate to support sales growth and further increase the quality of customer service.
- The Group's Net Financial Position passed from a net debt of €0.7 million at the end of 2021 to a net debt of €4.4 million at the end of 2022. Cash flow generated from operating activities for €3.2 million was used to meet the cash requirements of operations carried out during the fiscal year and, in particular, contributed to finance the investments in fixed assets amounting to €4.3 million and the payment of dividends to shareholders for €1.7 million.
Management Analysis
Economic figures in 2022, once again particularly positive, are due to the contribution in terms of sales and margins of all the Group's companies. Growth is due to the increasing integration and synergies among the Group's brands, while the increase in percentage margins is mainly related to a different composition of the sales mix and, particularly, to the increase in sales of
% of % of VarianceRevenueRevenueRevenue58,872,869 46,674,333 12,198,536 Gross profit36,781,921 62.5%27,203,485 58.3%9,578,436 EBITDA11,655,647 19.8%7,900,679 16.9%3,754,967 Costs/revenues incurred for IPO EG Milan & Paris29,518 0.1%1,053,586 2.3%(1,024,068) Adjusted EBITDA11,685,165 19.8%8,954,265 19.2%2,730,899 Bad Debt and write offs141,268 0.2%138,111 0.3%3,157 Depreciation2,700,862 4.6%2,251,467 4.8%449,394 EBIT8,813,517 15.0%5,511,101 11.8%3,302,416 Adjusted EBIT8,843,035 15.0%6,564,687 14.1%2,278,348 Finance income/(loss)(100,029) 0.2%(276,040) 0.6%176,011 Taxes1,164,425 2.0%1,067,392 2.3%97,033 Net result7,549,063 12.8%4,167,669 8.9%3,381,394 Adjusted net result7,570,345 12.9%4,927,304 10.6%2,643,041 Cash flow from operations3,156,686 5.4%4,455,075 9.5%(1,298,389) Adjusted cash flow from operations3,186,204 5.4%5,508,661 11.8%(2,322,457)
2022202112.31.202212.31.2021VarianceDebts with banks (A)- Short term5,744,100 7,894,319 (2,150,219)- Long term8,574,373 10,874,527 (2,300,154)Cash and cash equivalents (B)9,838,378 17,752,959 (7,914,581)Finance active loans (C)Short term loan to Racing Spirit Llc- 265,000 (265,000)Long term loan to KJK Protective Technologies LLC60,000 80,000 (20,000)Net Financial Position: A) - B) -C)4,420,095 670,887 3,749,208
helmets, communication systems and racewear, which are characterized by higher average marginality than other products offered by the Group, net of the increases recorded in logistics, commercial and structural costs.
Balance sheet figures are influenced by the change in the strategy of advance procurement for all the Group's companies, aimed at achieving a significant increase in the quality of service and a reduction of the risks related to the supply chain.
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Current Trading
In January 2023 Racing Force Group successfully completed a capital increase of €10 million through an ABB (Accelerated Book Building) procedure. This increase is aimed at further strengthening the Group's capital structure in view of the implementation of the investment plan, which has already started, with the target to increase the production and logistics capacity of the main operating hubs of the Group, in order to support the expected further growth and the implementation of the diversification projects, the first results of which will start to be delivered as early as 2023 and, to a more significant extent, from 2024 onwards.
The continuation of the war between Russia and Ukraine has kept the global geo-political risk high, coupled with very strong economic and financial tensions in the markets. Regardless of how the current crisis is resolved, the consequences could be long-term and adversely affect markets. In this context of great uncertainty, the strong capital structure of the Group and the effectiveness of the management strategies allow us to look forward to the near future confidently, albeit with the need to constantly monitor the ever-changing scenario.
In the first two months of 2023, the Group maintained a double-digit growth in terms of sales, hitting a new all-time high. In terms of product margins, measures taken on price lists and careful planning of purchases have, to date, made it possible to contain the effect of fluctuations in the cost of raw materials.
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Allocation of net result
The Board of Directors of Racing Force S.p.A. has proposed to the Shareholders' Meeting to allocate the net profit for fiscal year 2022, amounting to 2,955,976 euros, as follows:
- €39,835 euros to the legal reserve, in order to reach one-fifth of the share capital;
- €2,312,928 to dividends to be distributed, amounting to €0.09 per share, before withholding tax, with an ex-dividend date of May 15th, 2023, in accordance with the 2022 Euronext Growth Milan calendar, an entitlement date of May 16th, 2023 and a dividend payment date of May 17th, 2023;
- The residual part, equal to € 603,213, to retained earnings.
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Calling of the Ordinary Meeting of Shareholders
The Board of Directors resolved to convene the Company's Ordinary General Meeting of Shareholders on April 28th, 2023, in a single call, to approve the financial statements of Racing Force S.p.A. for the year ended December 31st, 2022, including the Board of Directors' report on operations, the Board of Statutory Auditors' report, and the independent auditors' report.
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Filing of Documentation
The notice of call and the related documentation prescribed by applicable regulations, including the draft financial statements as of December 31st, 2022, the management report, the directors' reports on the items on the agenda of the Shareholders' Meeting, the report of the Board of Statutory Auditors and the independent auditors' report, will be available to the public, within the terms of the law, at the registered office located at Via E. Bazzano 5, 16019 Ronco Scrivia (GE - Italy) as well as by publication on the institutional website www.racingforce.com, Investor Relations section and on the authorized storage mechanism www.emarketsdirstorage.it.
It should be noted that the audit of the draft financial statements has not yet been finalized and that the auditors' report will therefore be made available within the legal deadlines.
This press release is available in the Investor Relations section of the website www.racingforce.com.
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Presentation of the results
The results for the year ended December 31st, 2022 will be presented to analysts and investors on March 30th, 2023 at 10:00 a.m. (CET), through Microsoft Teams platform, using the following link:
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The presentation supporting the conference call will be made available on the Company's website www.racingforce.com in the Investor Relations section of the website to the following link: https://ir.racingforce.com/en/presentations.
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