In 2022, SIT returned:
- Consolidated revenues of Euro 393.3 million (+3.4% on 2021);
- Heating Division sales of Euro 315.3 million (+5.7% on 2021);
- Metering Division sales of Euro 72.5 million (-5.7% on 2021), including Smart Gas Metering sales of Euro 48.4 million (-15.4%) and Water Metering sales of Euro 24.2 million (+22.2%);
- Consolidated Adjusted EBITDA of Euro 47.1 million (-8.0% on the previous year), a 12.0% revenue margin;
- Adjusted consolidated net profit of Euro 10.9 million (2.8% margin), compared to Euro 16.3 million in 2021 (4.3% margin);
- Operating cash flow of Euro -13.1 million, after investments of Euro 26.9 million;
- Net financial position of Euro 130.5 million (Euro 106.7 million at end of 2021).
The Q4 2022 results report:
- Consolidated revenues of Euro 102.9 million (+9.1% on Q4 2021);
- Heating Division Sales of Euro 80.5 million (+4.1% on Q4 2021);
- Metering Division Sales of Euro 21.1 million (+41.7% on Q4 2021), including Smart Gas Metering sales of Euro 15.4 million (+47.2%) and Water Metering sales of Euro 5.8 million (+28.7%);
- Consolidated adjusted EBITDA of Euro 11.5 million (+24.2% on 2021) 11.2% revenue margin (9.8% in Q4 2021).
Shareholders’ Meeting called for May 3, 2023.
***
Padua, March 21, 2023 – The Board of Directors of SIT S.p.A., listed on the Euronext Milan segment of the Italian Stock Exchange, in a meeting today presided over by Federico de’ Stefani, the Chairperson and Chief Executive Officer, approved the 2022 consolidated results.
Federico de Stefani, Chairperson and Chief Executive Officer of SIT stated:
“We are today very pleased to approve the better-than-expected results for 2022, a year which featured major geopolitical events and significant changes to the global economic and financial environment, such as re-emerging inflation, component shortages, energy market uncertainties and the sudden rise in interest rates. All these events have led to a focus among enterprises on their global supply chain structures and operating risk management policies.
In such a challenging 2022, SIT further committed to its sustainable growth strategies, balancing short-term volatility with its innovation goals and supporting customers seeking energy efficiency and emission-cutting solutions. Major investment has therefore been deployed in R&D and for new laboratories, while we have sought to establish high-value partnerships and synergies in areas such as new smart water meters and controlled mechanical ventilation applications.
2023 also began amid a cloud of uncertainty and to which we bring the same vision and ability to adapt to changing scenarios, confident of the leading role that SIT will play in managing the energy transition towards sustainable development”.
KEY FINANCIALS
| (Euro.000) | FY 22 | % | FY 21 | % | change % |
| Revenues from contracts with customers | 393,305 | 100.0% | 380,521 | 100.0% | 3.4% |
| Adjusted EBITDA | 47,099 | 12.0% | 51,215 | 13.5% | -8.0% |
| EBITDA | 38,209 | 9.7% | 51,215 | 13.5% | -25.4% |
| Adjusted EBIT | 19,447 | 4.9% | 24,330 | 6.4% | -20.1% |
| EBIT | 10,557 | 2.7% | 24,330 | 6.4% | -56.6% |
| Result before taxes (EBT) | 13,568 | 3.4% | 11,706 | 3.1% | 15.9% |
| Net Profit | 11,213 | 2.9% | 8,243 | 2.2% | 36.0% |
| Adjusted Net Profit | 10,898 | 2.8% | 16,311 | 4.3% | -33.2% |
| Cash flow from operating activities | (13,145) | 27,198 |
| (Euro.000) | 31/12/2022 | 31/12/2021 | |
| Net financial debt | 130,501 | 106,729 | |
| Net trade working capital | 73,752 | 45,423 | |
| Net trade working capital/Revenues | 18.8% | 11.9% |
Sales performance
Consolidated Revenues by Division
| (Euro.000) | 2022 | % | 2021 | % | diff | diff % |
| Heating | 315,338 | 80.2% | 298,251 | 78.4% | 17,087 | 5.7% |
| Metering | 72,516 | 18.4% | 76,913 | 20.2% | (4,397) | (5.7%) |
| Total sales | 387,854 | 98.6% | 375,164 | 98.6% | 12,689 | 3.4% |
| Other revenues | 5,451 | 1.4% | 5,357 | 1.4% | 94 | 1.8% |
| Total sales | 393,305 | 100% | 380,521 | 100% | 12,784 | 3.4% |
Consolidated Revenues by Geographic Area
| (Euro.000) | 2022 | % | 2021 | % | diff | change % |
| Italy | 99,452 | 25.3% | 106,992 | 28.1% | (7,540) | (7.1%) |
| Europe (excluding Italy) | 169,396 | 43.1% | 167,497 | 44.0% | 1,899 | 1.2% |
| The Americas | 85,481 | 21.7% | 74,241 | 19.5% | 11,240 | 15.1% |
| Asia/Pacific | 38,976 | 9.9% | 31,791 | 8.4% | 7,185 | 22.6% |
| Total sales | 393,305 | 100% | 380,521 | 100% | 12,784 | 3.4% |
2022 consolidated revenues were Euro 393.3 million, up 3.4% on 2021 (Euro 380.5 million). In the fourth quarter of 2022, consolidated revenues totalled Euro 102.9 million, up 9.1% on the same period of the previous year (Euro 94.3 million).
Heating Division
Heating Division sales in 2022 amounted to Euro 315.3 million, +5.7% compared to Euro 298.3 million in 2021 (+2.4% at like-for-like exchange rates). In the fourth quarter, the division’s core sales rose 4.1% to Euro 80.5 million, compared with Euro 77.4 million in the same period of 2021.
The following table presents Heating Division core sales by region according to management criteria:
| (Euro.000) | 2022 | % | 2021 | % | diff | change % |
| Italy | 56,116 | 17.8% | 55,682 | 18.7% | 434 | 0.8% |
| Europe (excluding Italy) | 138,022 | 43.8% | 140,078 | 47.0% | (2,056) | (1.5%) |
| The Americas | 82,839 | 26.3% | 72,025 | 24.1% | 10,814 | 15.0% |
| Asia/Pacific | 38,361 | 12.2% | 30,467 | 10.2% | 7,894 | 25.9% |
| Total sales | 315,338 | 100% | 298,251 | 100% | 17,087 | 5.7% |
Italian sales were substantially in line with 2021 at Euro 56.1 million (Euro 55.7 million in the previous year). The Catering segment performed strongly with growth of Euro 1.4 million, (+34.7%), while Direct Heating sales rose Euro 0.6 million (+8.1%), thanks particularly to Space Heaters; Central Heating saw a contraction of Euro 1.8 million (-5.3%), particularly due to the contraction of Integrated Systems (Euro -1.9 million, -45.1%) and electronics (Euro -0.6 million); Fans grew Euro 1.0 million overall (+12.1%), recovering the delays suffered in the initial months of the year due to component shortages.
Sales in Europe (excluding Italy) in 2022 decreased Euro 2.1 million (-1.5%) on the previous year. The Central Heating segment in Turkey, the top shipping market with 12.1% of division sales, grew 7.9% on 2021, particularly in the Central Heating segment, while the UK, accounting for 6.4% of division sales, contracted 9.5% in the Central Heating segment, mainly due to the family of Flues products. Central European remains strong, thanks to the introduction of new products, up Euro 3.9 million on 2021 (+8.1%).
Sales in the Americas rose 15.0% (+3.6% at like-for-like exchange rates), thanks to fireplaces growth of Euro 5.9 million (+15.6%) and the Central Heating electronics performance, which reported growth of Euro 5.1 million (+50%) on 2021; the Storage Water Heating applications contracted 12.3% (Euro 2.7 million).
Asia/Pacific sales were up 25.9% (+20.0% at like-for-like exchange rates) to Euro 38.4 million (Euro 30.5 million in 2021). Growth was reported in China (7.6% of the division), up 22.7% (+Euro 4.4 million) as a result of the Central Heating retail market recovery, and in Australia – improving Euro 1.1 million (+15.7%).
Metering Division
Metering Division sales were Euro 72.5 million (Euro 76.9 million, reducing 5.7% on the previous year).
In 2022, sales in the Smart Gas Metering sector totalled Euro 48.4 million, reducing 15.4% on 2021. This performance reflects the curve for the initial installation of smart meters on the Italian market, of which more than 80% have now been replaced. Sales in Italy accounted for 92.5% of the total, while overseas sales accounted for 7.5% (from Greece, Central Europe, the UK and India).
Water Metering sales totalled Euro 24.2 million, up 22.2% on 2021. Portugal accounts for 24.6% of sales, Spain for 30.0%, the rest of Europe for 32.5% and America and Asia respectively for 7.0% and 6.0%.
Operating performance
2022 consolidated revenues were Euro 393.3 million, increasing 3.4% on 2021 (Euro 380.5 million).
Non-recurring costs of Euro 8.9 million were provisioned in 2022, mainly referred to the out-of-court settlement agreed in the initial months of 2023 with a customer with regards to a dispute concerning our supplier.
2022 Consolidated Adjusted EBITDA was Euro 47.1 million (12.0% revenue margin), decreasing 8.0% on Euro 51.2 million (13.5% margin) in 2021.
The impact of volumes is negative for Euro 8.5 million, while the net contribution of prices is positive for Euro 9.4 million, as the increased cost of components and raw materials (and partly of processing costs) was transferred to the market. Operating costs increased Euro 5.9 million, particularly due to the impact of logistics and transport costs (increasing by approx. Euro 3.0 million) and higher R&D and production costs. EBITDA benefitted from exchange gains of Euro 1.6 million.
2022 EBIT totalled Euro 10.6 million (2.7% margin), after amortisation, depreciation and write-downs of Euro 27.8 million, with Adjusted EBIT of Euro 19.4 million (4.9% margin). EBIT in 2021 was Euro 24.3 million (6.4% margin).
Net financial income of Euro 4.5 million was reported in 2022, due to the positive effect from the change in the fair value of the SIT warrants, settled in Q3, with a positive impact of Euro 8.7 million. Adjusted net financial charges amount to Euro 4.2 million (1.1% of revenues), compared to Euro 3.7 million in the previous year (1.0% of revenues).
The pre-tax profit was Euro 13.6 million (3.4% revenue margin), compared to Euro 11.7 million (3.1% margin) in 2021.
The net profit was Euro 11.2 million (2.9% margin), compared to Euro 8.2 million in 2021, which included the positive impact of the extraordinary tax income of Euro 1.8 million relating to the Patent Box.
Net of non-recurring charges and income, the adjusted net profit in 2022 was Euro 10.9 million, compared to Euro 16.3 million in the previous year (2.8% and 4.3% margin respectively).
Cash Flow performance
The net financial debt at December 31, 2022 was Euro 130.5 million, compared to Euro 106.7 million at December 31, 2021.
The movements in the net financial position are reported below:
| (Euro.000) | FY 22 | FY 21 |
| Cash flow from current activities (A) | 46,372 | 52,177 |
| Change in inventories | (19,730) | (13,036) |
| Change in trade receivables | (6,715) | 9,910 |
| Change in trade payables | (675) | 7,890 |
| Change in other current assets and liabilities and for taxes | (5,514) | (3,685) |
| Cash flow from changes in Working Capital (B) | (32,634) | 1,079 |
| CASH FLOW FROM OPERATING ACTIVITIES (A + B) | 13,738 | 53,256 |
| Cash flow from investing activities (C) | (26,883) | (26,058) |
| CASH FLOW FROM OPERATING & INVESTING ACTIVITIES (A + B + C) | (13,145) | 27,198 |
| Interest | (3,327) | (3,666) |
| Dividends | (7,299) | (6,890) |
| Acquisition of treasury shares | (599) | (3,912) |
| Equity changes | 857 | 44 |
| FV derivative changes | 2,062 | 562 |
| IFRS 16 | (1,963) | (2,991) |
| Other | (360) | (1,053) |
| Change in net financial position | (23,774) | 9,292 |
| Opening net financial position | 106,729 | 116,021 |
| Closing net financial position | 130,503 | 106,729 |
Cash flows from operating activities of Euro 46.4 million were generated in the year, with an absorption as a result of the increase in working capital of Euro 32.6 million, of which Euro 19.7 million due to increased inventories on the basis of the electronic component procurement policy to offset the impact of shortages and maintain service to customers. Change in trade receivables, equal to Euro -6.7 million, reflects the increase of revenues in the Q4 2022, especially in the Smart Gas Metering Division.
Investing activities absorbed cash of Euro 26.9 million, compared to Euro 26.1 million in the previous year. Major investments include the construction of the company’s new laboratories and headquarters in Padua.
Cash flows from operating activities after investments of Euro 13.1 million were therefore absorbed, compared to a generation of Euro 27.2 million in 2021.
Financing activity cash flows in the year included interest of Euro 3.3 million and dividends of Euro 7.3 million, in addition to the purchase of treasury shares for Euro 0.6 million; the IFRS 16 impact was Euro 2.0 million, while the fair value of hedging derivatives improved Euro 2.1 million.
The net financial position at December 31, 2022 was Euro 130.5 million, increasing Euro 23.8 million on December 31, 2021 (Euro 106.7 million).
Allocation of profit of the year
The Board of Directors of SIT S.p.A. resolved to propose to the Shareholders’ Meeting to allocate part of the profit for the year, equal to Euro 14.385.360,24 to the extraordinary reserve, to reclassify the reserve for unrealized foreign exchange gains, equal to Euro 496.578,91, to extraordinary reserve and to release the reserve for the first application of IAS/IFRS equal to Euro 31.680,93 and reclassify this amount to the extraordinary reserve.
Subsequent events
There were no significant events subsequent to the fourth quarter of 2022.
Outlook
The first months of 2023 confirm the impact of external factors that are affecting the possibility of making reliable forecasts of yearly sales trends
The safety procurement strategies occurred in 2022 in the Heating market supply chains resulted in high inventory levels, whose destocking timing cannot be predicted at the moment
Geographically, expectations in some areas are positive while uncertainty remains in the markets directly and indirectly affected by the Russia/Ukraine conflict
During the year, the planned production footprint will become fully operational from which an improvement in performances are expected, with greater contribution of the Tunisian plant
SIT fundamentals are positive given the proactive role in the opportunities provided by the energy transition
***
Declaration of the manager responsible for the preparation of the Company’s accounts
The manager responsible for the preparation of the Company’s accounts, Paul Fogolin, hereby declares, as per article 154-bis, paragraph 2, of the “Testo Unico della Finanza”, that all information related to the Company’s accounts contained in this press release are fairly representing the accounts and the books of the Company. This press release and the results presentation for the year are available on the website www.sitcorporate.it in the Investor Relations section.
Today at 4PM CET, SIT management will hold a conference call to present to the financial community and the press the 2022 consolidated results. You may participate in the conference call by connecting to the following link: https://meet.google.com/aeq-rcrw-fsu
The support documentation shall be published in the “Investor Relations” section on the company website (www.sitcorporate.it) before the conference call.
***
Annex 1
BALANCE SHEET
| (Euro.000) | 31/12/2022 | 31/12/2021 |
| Goodwill | 87.946 | 87.946 |
| Other intangible assets | 55.276 | 61.611 |
| Property, plant & equipment | 106.103 | 98.039 |
| Investments in other companies | 630 | 325 |
| Non-current financial assets | 5.186 | 2.139 |
| Deferred tax assets | 10.492 | 7.897 |
| Non-current assets | 265.633 | 257.957 |
| Inventories | 91.352 | 70.123 |
| Trade receivables | 63.800 | 56.052 |
| Other current assets | 12.597 | 15.745 |
| Tax receivables | 2.281 | 2.965 |
| Other current financial assets | 6.269 | 527 |
| Cash and cash equivalents | 23.535 | 46.667 |
| Current assets | 199.833 | 192.079 |
| Total assets | 465.466 | 450.036 |
| Share capital | 96.162 | 96.162 |
| Total Reserves | 58.120 | 49.271 |
| Net profit/(loss) | 11.213 | 8.243 |
| Minority interest net equity | – | – |
| Shareholders’ Equity | 165.495 | 153.676 |
| Medium/long-term loans and borrowings | 77.968 | 74.540 |
| Other non-current financial liabilities and derivative financial instruments | 53.553 | 54.625 |
| Provisions for risks and charges | 13.844 | 4.941 |
| Post-employment benefit provision | 5.093 | 5.762 |
| Other non-current liabilities | 4 | 61 |
| Deferred tax liabilities | 15.005 | 15.743 |
| Non-current liabilities | 165.467 | 155.672 |
| Short-term loans and borrowings | 23.551 | 19.770 |
| Other current financial liabilities and derivative financial instruments | 5.235 | 4.988 |
| Trade payables | 81.400 | 80.752 |
| Other current liabilities | 23.113 | 23.163 |
| Financial instruments for Warrants | 0 | 8.748 |
| Tax payables | 1.205 | 3.267 |
| Current liabilities | 134.504 | 140.688 |
| Total Liabilities | 299.971 | 296.360 |
| Total Shareholders’ Equity and Liabilities | 465.466 | 450.036 |
Annex 2
INCOME STATEMENT
| (Euro.000) | 2022 | 2021 |
| Revenues from sales and services | 393.305 | 380.521 |
| Raw materials, ancillaries, consumables and goods | 233.573 | 210.685 |
| Change in inventories | (19.886) | (11.286) |
| Service costs | 52.301 | 48.424 |
| Personnel expense | 80.182 | 81.990 |
| Depreciation, amortisation and write-downs | 27.771 | 26.897 |
| Provisions | 8.722 | (83) |
| Other charges (income) | 85 | (436) |
| EBIT | 10.557 | 24.330 |
| Investment income/(charges) | (166) | 31 |
| Financial income | 9.263 | 395 |
| Financial charges | (4.760) | (14.074) |
| Net exchange gains (losses) | (1.326) | 1.024 |
| Impairments on financial assets | – | – |
| Profit/(loss) before taxes | 13.568 | 11.706 |
| Income taxes | (2.355) | (3.462) |
| Net profit/(loss) for the period | 11.213 | 8.243 |
| Minority interest result | – | – |
| Group net profit/(loss) | 11.213 | 8.243 |
Annex 3
CASH FLOW STATEMENT
| (Euro.000) | 2022 | 2021 |
| Net profit/(loss) | 11.213 | 8.243 |
| Amortisation & depreciation | 27.652 | 26.885 |
| Non-cash adjustments | 9.669 | (59) |
| Income taxes | 2.356 | 3.462 |
| Net financial charges/(income) | (4.518) | 13.646 |
| CASH FLOW FROM CURRENT ACTIVITIES (A) | 46.372 | 52.177 |
| Changes in assets and liabilities: | ||
| Inventories | (19.730) | (13.036) |
| Trade receivables | (6.715) | 9.910 |
| Trade payables | (675) | 7.890 |
| Other assets and liabilities | 1.185 | 2.790 |
| Income taxes paid | (6.699) | (6.475) |
| CASH FLOW GENERATED (ABSORBED) FROM CHANGES IN WORKING CAPITAL (B) | (32.634) | 1.079 |
| CASH FLOW FROM OPERATING ACTIVITIES (A + B) | 13.738 | 53.256 |
| Investing activities: | ||
| Investments in property, plant & equipment | (24.823) | (22.701) |
| Other changes in property, plant & equipment | 335 | 340 |
| Investments in intangible assets | (1.986) | (4.225) |
| Other changes in financial assets | 0 | 9 |
| Investments in financial assets | (409) | 0 |
| Other changes in financial assets | 0 | (35) |
| Other changes in current financial assets | (3.450) | 626 |
| Acquisition of a subsidiary, net of cash acquired | 0 | (72) |
| CASH FLOW FROM INVESTING ACTIVITIES (C) | (30.333) | (26.058) |
| CASH FLOW FROM OPERATING & INVESTING ACTIVITIES (A + B + C) | (16.595) | 27.198 |
| Financing activities: | ||
| Interest paid | (3.275) | (3.566) |
| Repayment of non-current financial payables | (21.000) | (139.060) |
| Increase (decrease) current financial payables | 2.756 | (198) |
| Increase (decrease) other financial payables | (2.977) | (2.759) |
| New financing | 25.000 | 133.482 |
| Dividend payments | (7.299) | (6.890) |
| Capital increase | 0 | 10 |
| Own shares | (599) | (3.922) |
| CASH FLOW FROM FINANCING ACTIVITIES (D) | (7.394) | (22.903) |
| Change in translation reserve | 857 | 44 |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (A + B + C + D) | (23.132) | 4.339 |
| Cash & cash equivalents at beginning of the year | 46.667 | 42.328 |
| Increase/(decrease) in cash and cash equivalents | (23.132) | 4.339 |
| Cash & cash equivalents at end of the year | 23.535 | 46.667 |
