The business metering growth continues with +14.5% in the quarter
Highlights
In the first half of 2024, SIT achieved:
- Consolidated revenues of Euro 150.9 million (-9.6% compared to the first half of 2023);
- Heating&Ventilation Division sales of Euro 103.5 million (-16.1% compared to the first half of 2023);
- Metering Division sales of Euro 45.8 million (+8.2% compared to the same period of 2023), of which Smart Gas Metering sales of Euro 31.5 million (+6.6%) and Water Metering of Euro 14.3 million (+11.7%);
- Consolidated EBITDA of Euro 13.5 million vs Euro 13.2 million compared to the same period of 2023;
- Consolidated net income adjusted of Euro -3.1 million, 2.1% of revenues vs Euro 1.6 million of the first half 2023, 1.0% of revenues;
- Consolidated net income of Euro -6.1 million, 4.1% of revenues vs Euro -18.1 million of the first half 2023, 10.9% of revenues;
- Cash flow from operations for Euro -2.1 million after capex for Euro 9.4 million;
- Net financial debt at Euro 160.9 million (Euro 146.4 million at 30 June 2023).
In the second quarter of 2024, the results are:
- Consolidated revenues of Euro 81.8 million, -1.8% compared to the second quarter of 2023;
- Metering Division sales of Euro 25.2 million, +14.5% compared to the second quarter of 2023, of which Smart Gas Metering sales of Euro 18.1 million (+14.5%) and Water Metering of Euro 7.0 million (+14.6%).
***
Padua, 2 August 2024 – The Board of Directors of SIT S.p.A., a company listed on the Euronext Milan segment of the Italian Stock Exchange, at today’s meeting chaired by Federico de’ Stefani, Chairman and Chief Executive Officer of SIT, approved the consolidated results for the first half of 2024.
Federico de’ Stefani, Chairman and Chief Executive Officer of SIT stated:
“The market scenario represented in the previous reporting moments has remained unchanged and is affected by a prolonged weakness which, associated with the persistence of the destocking effect, translates into limited business visibility for the short to medium term. Currently, there is no significant segment of the Heating & Ventilation market that is showing structural recovery. Regulators, market participants and consumers, after a period of high volatility and market disruption, do not show a definitive and clear trend, which therefore leads to delays in decision making and investments.
To address this context, SIT is transitioning towards a more sustainable, flexible organization ready to seize new opportunities. We have implemented structural cost reductions and reviewed our international manufacturing presence. In addition, we are promoting a new managerial culture based on “agile” methodology and open collaboration with partners of primary standing. The goal remains to complete the range of products for a constantly evolving market”.
KEY FINANCIALS
| (Euro.000) | H1 2024 | % | H1 2023 | % | Diff% |
| Revenues from contracts with customers | 150,892 | 100.0% | 166,875 | 100.0% | -9.6% |
| EBITDA | 13,548 | 9.0% | 13,232 | 7.9% | 2.4% |
| Operating income (EBIT) | (125) | -0.1% | (19,957) | -12.0% | -99.4% |
| Net income | (6,133) | -4.1% | (18,150) | -10.9% | -66.2% |
| Net income adjusted | (3,139) | -2.1% | 1,644 | 1.0% | – |
| Cash flow from operations | (2,051) | (12,531) |
| (Euro.000) | 30/06/2024 | 31/12/2023 | 30/06/2023 |
| Net financial debt | (160,858) | (153,690) | (146,446) |
| Net trade working capital | 83,554 | 79,858 | 74,932 |
| Net trade working capital/Revenues | 27.5% | 24.5% | 22.3% |
Sales performance
Consolidated revenues by Division
| (Euro.000) | 2024.06 | % | 2023.06 | % | diff | diff % |
| Heating & Ventilation | 103,479 | 68.6% | 123,359 | 73.9% | (19,880) | (16.1%) |
| Metering | 45,817 | 30.4% | 42,350 | 25.4% | 3,468 | 8.2% |
| Total sales | 149,297 | 98.9% | 165,709 | 99.3% | (16,412) | (9.9%) |
| Other revenues | 1,595 | 1.1% | 1,166 | 0.7% | 430 | 36.8% |
| Total revenues | 150,892 | 100% | 166,874 | 100% | (15,983) | (9.6%) |
| (Euro,000) | 2024.Q2 | % | 2023.Q2 | % | diff | diff % |
| Heating & Ventilation | 55,602 | 67.9% | 60,700 | 72.8% | (5,098) | (8.4%) |
| Metering | 25,156 | 30.7% | 21,968 | 26.4% | 3,188 | 14.5% |
| Total sales | 80,758 | 98.7% | 82,668 | 99.2% | (1,910) | (2.3%) |
| Altri ricavi | 1,089 | 1.3% | 655 | 0.8% | 434 | 66.2% |
| Total revenues | 81,847 | 100% | 83,323 | 100% | (1,476) | (1.8%) |
Consolidated revenues by geography
| (Euro,000) | 2024.06 | % | 2023.06 | % | diff | diff % |
| Italy | 50,999 | 33.8% | 50,895 | 30.5% | 104 | 0.2% |
| Europe (excluded Italy) | 62,326 | 41.3% | 78,090 | 46.8% | (15,765) | (20.2%) |
| America | 22,442 | 14.9% | 23,868 | 14.3% | (1,425) | (6.0%) |
| Asia/Pacific | 15,125 | 10.0% | 14,022 | 8.4% | 1,103 | 7.9% |
| Total revenues | 150,892 | 100% | 166,875 | 100% | (15,983) | (9.6%) |
| (Euro,000) | 2024.Q2 | % | 2023.Q2 | % | diff | diff % |
| Italy | 27,724 | 33.9% | 25,850 | 31.0% | 1,873 | 7.2% |
| Europe (excluded Italy) | 32,438 | 39.6% | 37,922 | 45.5% | (5,485) | (14.5%) |
| America | 12,224 | 14.9% | 11,911 | 14.3% | 313 | 2.6% |
| Asia/Pacific | 9,461 | 11.6% | 7,639 | 9.2% | 1,822 | 23.8% |
| Total revenues | 81,847 | 100% | 83,323 | 100% | (1,476) | (1.8%) |
Consolidated revenues for the first half of 2024 amounted to Euro 150.9 million, recording a decrease of 9.6% compared to the same period of 2023 (Euro 166.9 million).
Consolidated revenues for the second quarter of 2024 amounted to Euro 81.8 million, a decrease of 1.8% compared to the same period of 2023 (Euro 83.3 million).
Sales of the Heating & Ventilation Division in the first half of 2024 amounted to €103.5 million, -16.1% compared to €123.4 million in the same period of 2023.
The following table shows the business sales by geography of the Heating & Ventilation Division according to management data:
| (Euro,000) | 2024.06 | % | 2023.06 | % | diff | diff % |
| Italy | 19,163 | 18.5% | 21,593 | 17.5% | (2,429) | (11.3%) |
| Europe (excluded Italy) | 47,303 | 45.7% | 64,130 | 52.0% | (16,826) | (26.2%) |
| America | 20,764 | 20.1% | 22,805 | 18.5% | (2,041) | (9.0%) |
| Asia/Pacific | 16,250 | 15.7% | 14,832 | 12.0% | 1,417 | 9.6% |
| Total sales | 103,479 | 100% | 123,359 | 100% | (19,880) | (16.1%) |
It should be noted that the performance of the period was affected by the impact of the Q1 2024, which compared to the same period of 2023 had marked a reduction of 23.6%, while the second quarter of 2024, as shown in the table below, marks a reduction of 8.4%, an improvement compared to forecasts.
| (Euro,000) | 2024.Q2 | % | 2023.Q2 | % | diff | diff % |
| Italy | 9,972 | 17.9% | 9,681 | 15.9% | 290 | 3.0% |
| Europe (excluded Italy) | 24,434 | 43.9% | 31,174 | 51.4% | (6,740) | (21.6%) |
| America | 10,976 | 19.7% | 11,107 | 18.3% | (131) | (1.2%) |
| Asia/Pacific | 10,221 | 18.4% | 8,738 | 14.4% | 1,483 | 17.0% |
| Total sales | 55,602 | 100% | 60,700 | 100% | (5,098) | (8.4%) |
Sales in Italy in the second quarter increased by 3.0% compared to the same period of 2023, particularly affecting Central Heating, Catering and Cooker Hoods, while the Direct Heating segment continues to record a reduction especially for Pellet Stoves and Space Heaters.
As regards Europe, excluding Italy, in the second quarter of 2024 there was a reduction in sales of Euro 6.7 million or 21.6% compared to the same period of the previous year. Turkey, which accounts for 14.3% of divisional sales, recorded an above-average reduction of the division especially for Fans and Mechanical Controls for Central Heating applications. Sales in Central Europe also recorded a reduction (-20.5%) in Central Heating, mainly due to the impact of Heat Recovery Units, impacted by the performance of the electric heating appliances sector.
Sales in America in the second quarter show a trend substantially in line with the same period of 2023. However, this trend is the result of growth (Euro 2 million, +50.0%) in fireplaces and Storage Water Heating (Euro 0.2 million, +10.0%) offset by a reduction in Central Heating applications due to delays concentrated on a few names.
In the second quarter of 2024, sales in the Asia/Pacific area grew by 17.0%, 18.9% on a like-for-like exchange rate basis, mainly thanks to the performance of China, which increased by 29.1% to Euro 1.6 million. Australia is still down by Euro 0.2 million, or 10.6%.
Metering Division
Sales of the Metering Division in the first half of 2024 amounted to Euro 45.8 million compared to Euro 42.3 million in the first half of the previous year, up 8.2%. As for the second quarter, the division achieved sales of Euro 25.2 million compared to Euro 22.0 million in the second quarter of 2023, with a growth of 14.5%.
In the first half of 2024, sales of smart gas meters amounted to Euro 31.5 million, up 6.6% compared to the first half of 2023. In the second quarter, sales of Euro 18.1 million were achieved, up 14.5% compared to Euro 15.8 million in the same period of 2023. The performance is due to the group’s good positioning in the Italian market and the new development and replacement projects launched by the main customers.
Sales of water meters in the first half of the year amounted to Euro 14.3 million, up 11.7% compared to the first half of 2023. In the second quarter, sales of Euro 7.0 million were achieved, up 14.6% compared to Euro 6.1 million in the same period of 2023.
Sales in the second quarter were made in Portugal for 16.6%, Spain for 43.4%, rest of Europe for 27.6% and in America and Asia for 9.5% and 2.8% respectively.
New markets
Continuing a diversification path started in 2023, the Group continued in the first half of 2024 the development and evolution of the product portfolio related to the energy transition. The main initiatives and their progress are recalled below.
Generation and long-term storage of hydrogen for residential use, with Hybitat, a joint venture between E-Novia and SIT. Solution based on the use of renewable energy, a growing response to the energy demand of households linked to domestic needs and new mobility. First sale expected as early as 2024.
A partnership has been launched with Panasonic for the launch of a new fan for residential heat pumps with the aim of developing a range of products for the European market adapted to the specific needs of each heat pump manufacturer to ensure the best performance, minimised noise and low consumption. Sales are expected to start in 2025.
Enhancement in the water metering sector through the launch of Smartio, the new smart water meter for residential use based on ultrasonic technology, developed with GWF swiss technology partner. Orders already collected for the start of production in the fourth quarter of 2024.
The strategic development path in electrification has been strengthened with a company dedicated to the kitchen hood market – SIT MBT S.r.l. a company with which the Group wants to position itself as a European leader through the development of innovative energy-efficient products and their customization to the specific needs of customers. Acquired the first important new customer.
Economic performance
Consolidated revenues for the first half of 2024 amounted to Euro 150.9 million, a reduction of 9.6% compared to the first half of 2023 (Euro 166.9 million).
The purchase cost of raw materials and consumables, including changes in inventories, was Euro 77.3 million equal to 51.2% on revenues compared to 52.9% in the first half of 2023.
Service costs in the first half amounted to Euro 23.0 million, compared to Euro 24.0 million in the same period of the previous year (respectively equal to 15.3% and 14.4% of revenues).
Personnel costs amounted to Euro 39.4 million (Euro -1.1 million), with an EBITDA margin of 26.1%, an increase compared to 24.2% in the same period of the previous year.
Depreciation, amortization and impairment losses, amounting to Euro 13.7 million, equal to 9.1% of revenues for the period and compared to Euro 33.4 million in the first half of 2023, influenced by the impairment of goodwill recorded for Euro 17.0 million following the impairment test carried out on the invested capital of the Heating&Ventilation CGU.
Other expenses amounted to a net income of Euro 2.5 million deriving from certain transactions for the sale of assets carried out as part of the optimization of the invested capital of the Heating & Ventilation division.
The operating result amounted to Euro -0.1 million (0.1% of revenues) against an operating loss of Euro 20.0 million (12.0% of revenues) in the first half of 2023.
Net financial expenses for the first half of 2024 amounted to Euro 7.2 million compared to Euro 3.1 million in the same period of the previous year. It should be noted that in the period under review it was necessary to record the cost deriving from the renegotiation concluded with the banks during the first half of 2024 according to the amortised cost method pursuant to IFRS 9. This resulted in a financial cost of Euro 3.9 million.
Adjusted net financial expenses, net of the aforementioned non-recurring items, in the first half of 2024 amounted to Euro 3.3 million, compared to Euro 3.1 million in the same period of the previous year.
Income taxes for the period were positive for Euro 1.3 million and reflect the allocation of deferred tax assets deriving mainly from recoverable tax losses accrued by the Parent Company.
The net result for the period amounted to a loss of Euro 6.1 million compared to a loss of Euro 18.2 million in the same period of 2023.
Adjusted net profit, net of the adjustments and valuations described above, amounted to a loss of Euro 3.1 million (2.1% of revenues) compared to a profit of Euro 1.6 million (1.0%) in the same period of 2023.
Financial performance
As of June 30, 2024, net financial debt was Euro 160,9 million compared to Euro 153.7 million as of December 31, 2023. The evolution of the net financial position is shown in the table below and is influenced by the different factoring policy adopted in the first half of 2024 compared to the same period 2023.
| (Euro.000) | H1 2024 | H1 2023 |
| Cash flow from current activities (A) | 9,972 | 15,175 |
| Change in inventories | (9,001) | (5,892) |
| Change in trade receivables | (8,619) | 12,285 |
| Change in trade payables | 13,558 | (5,845) |
| Change in other current assets and liabilities and for taxes | 1,419 | (16,950) |
| Cash flow from changes in Working Capital (B) | (2,644) | (16,402) |
| CASH FLOW FROM OPERATING ACTIVITIES (A + B) | 7,329 | (1,227) |
| Cash flow from investing activities (C) | (9,380) | (11,304) |
| CASH FLOW FROM OPERATING & INVESTING ACTIVITIES (A + B + C) | (2,051) | (12,531) |
| Changes for interest | (4,428) | (3,206) |
| Changes MTM derivatives and amortised cost | (3,021) | 446 |
| Changes in translation reserve and other equity items | 533 | (1,083) |
| Changes to financial assets | 2,183 | 891 |
| IFRS 16 | (384) | (458) |
| Change in net debt | (7,168) | (15,941) |
| Initial net debt | 153,690 | 130,503 |
| Final net debt | 160,858 | 146,444 |
Cash flows for the first half of 2024 show the generation of cash flows from current operations of Euro 10.0 million compared to Euro 15.2 million in the same period of 2023.
In the first half of 2024, the absorption of working capital amounted to Euro 2.6 million compared to Euro 16.4 million in the same period of 2023. We would like to point out that in the first half of 2023, the disbursement due to a transaction concluded with a customer following a commercial dispute in previous years was recorded in this line.
As regards trade working capital, in the first half of 2024 there was an increase in inventories due to the seasonality of the Heating & Ventilation sector and the order book in Smart Gas Metering. The value of trade receivables and payables is consistent with the trend in business volumes for the period.
Investment flows amounted to Euro 9.4 million compared to Euro 11.3 million in the first half of 2023.
Cash flows from operations after investments are therefore equal to Euro -2.1 million compared to Euro -12.5 million in the previous period.
Financial cash flows include interest of Euro 4.4 million during the period and changes in MTM and amortised cost for a total of Euro 3.0 million, mainly due to the recognition of the cost of the bank renegotiation in accordance with the criteria set in IFRS 9.
Significant events occurring after the end of the period
No significant events occurred after the end of the reporting period.
Outlook
Overall, in 2024FY the Metering business is expected to achieve sales in line with the previous year. In the face of solid fundamentals linked to utilities’ investments in the Water Metering sector, which will allow annual growth in line with the rate recorded in the first half of the year, delays in the international development of Gas Metering will lead to a slight reduction in turnover compared to what was initially disclosed.
The Heating & Ventilation business unit is expected to achieve higher sales in the second half of 2024 compared to the previous year, resulting in annual revenues in line with the performance achieved during the second quarter.
At the consolidated level, the expected increase in EBITDA margin is expected to be between 100 and 200 basis points. Selective investments remain in place, now expected to amount to around 20 million Euros dedicated in particular to the research and development area as well as to the completion of the new headquarters. Net financial debt is expected to be between 145 and 150 million Euros.
***
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 period are available on the website www.sitcorporate.it in the Investor Relations section.
Today at 14:30 CEST, SIT management will hold a conference call to present to the financial community and press the results for the period. You may participate through the following link: https://shorturl.at/r0vVQ
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) | 30/06/2024 | 31/12/2023 | |
| Goodwill | 70.946 | 70.946 | |
| Other intangible assets | 49.116 | 50.781 | |
| Property, plants and equipment | 101.992 | 105.270 | |
| Investments | 657 | 657 | |
| Non-current financial assets | 4.141 | 2.533 | |
| Deferred tax assets | 20.903 | 18.874 | |
| Non-current assets | 247.755 | 249.061 | |
| Inventories | 91.830 | 83.315 | |
| Trade receivables | 71.969 | 63.458 | |
| Other current assets | 12.509 | 14.264 | |
| Tax receivables | 3.516 | 3.752 | |
| DOther current assets | 6.588 | 6.630 | |
| Cash and Cash Equivalents | 7.249 | 8.700 | |
| Current assets | 193.660 | 180.119 | |
| Total assets | 441.415 | 429.181 | |
| Share capital | 96.162 | 96.162 | |
| Total Reserves | 40.022 | 70.350 | |
| Net Profit | (6.133) | (23.388) | |
| Minority interests net equity | 806 | – | |
| Shareholders’ Equity | 130.858 | 143.124 | |
| Medium/long-term loans and borrowings | 82.119 | 58.182 | |
| Other non-current financial liabilities and derivative financial instruments | 55.688 | 51.434 | |
| Provisions for risks and charges | 8.599 | 10.513 | |
| Post-employment benefit provision | 4.746 | 5.096 | |
| Other non-current liabilities | 5.126 | 6 | |
| Deferred tax liabilities | 12.420 | 12.094 | |
| Non-current liabilities | 168.698 | 137.325 | |
| Short-term bank loans | 23.093 | 50.809 | |
| Other current financial liabilities and derivative financial instruments | 13.793 | 8.596 | |
| Trade payables | 80.245 | 66.915 | |
| Other current liabilities | 23.518 | 20.768 | |
| Tax payables | 1.211 | 1.645 | |
| Current liabilities | 141.860 | 148.733 | |
| Total Liabilities | 310.557 | 286.057 | |
| Total Shareholders’ Equity and Liabilities | 441.415 | 429.181 |
Annex 2
INCOME STATEMENT
| (Euro.000) | 1H 2024 | 1H 2023 |
| Revenues from sales and services | 150.892 | 166.875 |
| Raw materials, ancillaries, consumables and goods | 86.189 | 94.974 |
| Change in inventories | (8.882) | (6.679) |
| Services | 23.019 | 24.002 |
| Personnel expense | 39.354 | 40.463 |
| Depreciation, amortisation and write-downs | 13.676 | 33.405 |
| Provisions | 169 | 442 |
| Other charges (income) | (2.509) | 225 |
| EBIT | (125) | (19.957) |
| Investment income/(charges) | – | – |
| Gains/(Losses) from valuations of minority option liabilities | – | – |
| Financial income | 238 | 326 |
| Financial charges | (7.455) | (3.456) |
| Net exchange gains (losses) | (105) | 286 |
| Impairments on financial assets | – | – |
| Profit before taxes | (7.447) | (22.801) |
| Income taxes | 1.314 | 4.651 |
| Net profit for the year | (6.133) | (18.150) |
| Minority interest result | (11) | – |
| Group net profit | (6.122) | (18.150) |
Annex 3
CASH FLOW STATEMENT
