Strategic focus on sustainability obtaining a Gold rating from EcoVadis thanks to a 14-point improvement on 2023.
In the first quarter of 2024, SIT achieved:
- Consolidated revenues of Euro 69.0 million (-17.4% compared to the same period in 2023);
- Heating & Ventilation Division sales: Euro 47.9 million (-23.6% compared to the same period in 2023);
- Metering Division sales of Euro 20.7 million (+1.4% compared to the same period in 2023), of which Smart Gas Metering sales Euro 13.4 million (-2.4%) and Water Metering Euro 7.3 million (+9.1%);
- Consolidated EBITDA of Euro 6.4 million (-23.4% compared to the same period in 2023);
- Consolidated net result reports a loss of Euro 1.8 million (net profit of Euro 1.3 million in first quarter 2023);
- Operating cash flow of the first quarter 2024 of Euro -7.6 million, after capex for Euro 4.4 million;
- Net financial position of Euro 161.1 million against Euro 153.7 million at December 31, 2023.
Sustainability: SIT achieved EcoVadis Gold rating with an overall score of 77/100, marking a 14-point improvement over the previous year and placing SIT in the top 2% of most sustainable companies.
***
Padua, May 09, 2024 – 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 of SIT, approved the first quarter of 2024 consolidated results.
Federico de’ Stefani, Chairperson and Chief Executive Officer of SIT stated:
“In line with what we communicated a few days ago when approving the 2023 draft Annual Report, the first quarter of 2024 sees the results of the Heating & Ventilation Division declining, even if slightly better than the internal expectations for the first three months of the year. Regarding the group’s goals for 2024, we confirm the focus on growing margins and improving the financial position. The fundamentals of the Metering Division, both for water and gas, are positive.
I would like to emphasize the company’s great commitment towards sustainability, which has remained unchanged despite the many challenges posed to us by the external context. The recent Gold rating awarded to us by EcoVadis is a recognition of our outstanding achievements in the ESG area.”
KEY FINANCIALS
| (Euro.000) | Q1 24 | % | Q1 23 | % | diff% |
| Revenues from contracts with customers | 69.045 | 100.0% | 83.552 | 100.0% | -17.4% |
| EBITDA | 6.352 | 9.2% | 8.293 | 9.9% | -23.4% |
| Operating income (EBIT) | (493) | -0.7% | 1.597 | 1.9% | -130.9% |
| Earnings before taxes (EBT) | (2.051) | -3.0% | 172 | 0.2% | – |
| Net income | (1.846) | -2.7% | 1.338 | 1.6% | -237.9% |
| Cash flow from operations | (7.567) | (10.330) |
| (Euro.000) | 31/03/2024 | 31/12/2023 | 31/03/2023 |
| Net financial debt | 161.058 | 153.691 | 143.086 |
| Net trade working capital | 86.461 | 79.858 | 77.846 |
| Net trade working capital/Revenues | 31.2% | 24.5% | 23.0% |
Sales Performance
Consolidated Revenues by Division
| (Euro.000) | Q1 24 | % | Q1 23 | % | diff | diff % |
| Heating & Ventilation | 47.877 | 69.3% | 62.659 | 75.0% | (14.782) | (23.6%) |
| Metering | 20.662 | 29.9% | 20.382 | 24.4% | 280 | 1.4% |
| Total sales | 68.539 | 99.3% | 83.041 | 99.4% | (14.502) | (17.5%) |
| Other revenues | 506 | 0.7% | 510 | 0.6% | (4) | (0.8%) |
| Total revenue | 69.045 | 100% | 83.552 | 100% | (14.507) | (17.4%) |
Consolidated Revenues by Geographic Area
| (Euro.000) | Q1 24 | % | Q1 23 | % | diff | diff % |
| Italy | 23.275 | 33.7% | 25.044 | 30.0% | (1.769) | (7.1%) |
| Europe (excluding Italy) | 29.888 | 43.3% | 40.168 | 48.1% | (10.280) | (25.6%) |
| America | 10.218 | 14.8% | 11.957 | 14.3% | (1.739) | (14.5%) |
| Asia/Pacific | 5.664 | 8.2% | 6.383 | 7.6% | (719) | (11.3%) |
| Total revenues | 69.045 | 100% | 83.552 | 100% | (14.507) | (17.4%) |
Consolidated revenues in the first quarter of 2024 amounted to Euro 69.0 million registering a decrease of 17.4% from the first quarter of 2023 (Euro 83.6 million).
Heating & Ventilation Division
Heating & Ventilation Division sales in the first quarter of 2024 accounted Euro 47.9 million, -23.6% against 62.7 million in the same period 2023 (exchange rate impact not material).
The following table shows sales by geographical area of the Heating & Ventilation Division:
| (Euro.000) | Q1 24 | % | Q1 23 | % | diff | diff % |
| Italy | 9.191 | 19.2% | 11.911 | 19.0% | (2.720) | (22.8%) |
| Europe (excluding Italy) | 22.869 | 47.8% | 32.956 | 52.6% | (10.087) | (30.6%) |
| America | 9.788 | 20.4% | 11.698 | 18.7% | (1.910) | (16.3%) |
| Asia/Pacific | 6.028 | 12.6% | 6.094 | 9.7% | (66) | (1.1%) |
| Total sales | 47.877 | 100% | 62.659 | 100% | (14.782) | (23.6%) |
Sales in Italy decreased 22.8% compared to the same period in 2023. This trend affected all major products with a greater impact in the Direct Heating segment due to applications for Pellet Stoves and Space Heaters.
As for Europe, excluding Italy, there is a reduction in sales in the first quarter of 2024 of Euro 10.1 million, 30.6% compared with the first quarter of the previous year. Turkey, the top shipping market with 13.9% of divisional sales, shows a higher-than-average reduction vs the division especially for Fans and Mechanical Controls for Central Heating applications.
Sales in America marked a decrease of 16.3%. The reduction particularly affected Central Heating applications, due to concentrated delays in some customers, and to a lesser extent the Direct Heating segment in fireplaces. There was a slight improvement in Storage Water Heating.
Asia/Pacific sales were broadly in line with the first quarter of the previous year. Regarding China, 8.2% of divisional sales, sales for the quarter recorded growth of 9.0%, 14.9% at same exchange rates, thanks to local producers. Australia records a sharp reduction in the first quarter of 2024 (-41.7%) due to the market slowdown.
Metering Division
Metering Division sales in the first quarter of 2024 amounted to Euro 20.7 million, broadly in line with the same period in 2023.
Sales in the Smart Gas Metering sector totaled Euro 13.4 million compared with Euro 13.7 million in the first quarter of 2023. The performance is substantially in line with sales in the same period and are realized entirely in the Italian market, where the group enjoys a strong competitive position and is an proactive participant in new developments and replacement projects launched by major customers in the market.
Water Metering sales sector totaled Euro 7.3 million, up 9.1% over the same period in 2023. Sales were made in Spain for 51.8%, in Portugal for 11.8%, in the rest of Europe for 17.3% and in America and Asia respectively for 16.5% and 2.6%.
Operating performance
Consolidated revenues for the first quarter of 2024 amounted to Euro 69.0 million with a reduction of 17.4% compared to the same period 2023 (Euro 83.6 million).
EBITDA, amounting to Euro 6.4 million, was down 23.4% compared to the first quarter of the previous year (Euro 8,3 million) and was impacted by volumes, particularly in the Heating & Ventilation division which was only partially offset by the Metering division and efficiency and cost containment actions.
Purchase costs of raw materials and consumables, including changes in inventories, amounted to Euro 34.9 million (50.5% of revenues, compared to 49.1% in the same period 2023).
Service costs amounted to Euro 11.0 million, compared to Euro 13.2 million in the first quarter 2023 (respectively 16.0% and 15.8% of revenues).
Personnel expense is equal to Euro 19.1 million against Euro 20.7 million with a revenue share of 27.6%, up from 24.8% in the same period last year.
Depreciation and amortization, amounting to Euro 7.0 million, are up slightly from the first quarter of 2023 because of new investments made during the year and the new signing of operating leases accounted for under IFRS16.
EBIT amounted to Euro -0.5 million against Euro 1.6 million in the first quarter 2023.
Net financial charges for the first quarter of 2024 amounted to Euro 1.8 million against Euro 1.7 million in the same period 2023.
Taxes for the period are positive in the amount of Euro 0.2 million and reflect deferred tax assets revenues.
Net result for the period was a loss of Euro 1.8 million against a net profit of Euro 1.3 million in the first quarter 2023.
Cash Flow performance
As of March 31, 2024, net financial debt was Euro 161.1 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 quarter of 2024 compared to the same period 2023.
| (Euro.000) | Q1 2024 | Q1 2023 |
| Cash flow from current activities (A) | 4.028 | 9.092 |
| Change in inventories | (6.983) | (9.228) |
| Change in trade receivables | 435 | 13.137 |
| Change in trade payables | 541 | (7.117) |
| Change in other current assets and liabilities and for taxes | (1.149) | (11.213) |
| Cash flow from changes in Working Capital (B) | (7.156) | (14.421) |
| CASH FLOW FROM OPERATING ACTIVITIES (A + B) | (3.128) | (5.329) |
| Cash flow from investing activities (C) | (4.439) | (5.001) |
| CASH FLOW FROM OPERATING & INVESTING ACTIVITIES (A + B + C) | (7.567) | (10.330) |
| Changes for interest | (2.305) | (1.979) |
| Changes MTM derivatives and amortised cost | 487 | 314 |
| Changes in translation reserve | (185) | (589) |
| Changes to financial assets | 2.272 | – |
| IFRS 16 | (70) | – |
| Change in net financial position | (7.368) | (12.584) |
| Opening net financial position | 153.690 | 130.503 |
| Closing net financial position | 161.058 | 143.087 |
Cash flows for the first quarter of 2024 show the generation of cash flows from current operations in the amount of Euro 4.0 million against Euro 9.1 million of the same period 2023, difference due to economic performance in the two periods.
In the first quarter of 2024, the absorption of working capital was Euro 7.2 million against an absorption of Euro 14.4 million of the same period 2023.
Inventories absorbed Euro 7.0 million in the first quarter of 2024 while in the same period 2023 it absorbed Euro 9.2 million – a trend that reflects the seasonality of the Heating & Ventilation business and the level of the order backlog in the Smart Gas Metering business. In the first quarter of 2024, trade receivables and trade payables maintained essentially the same level as at the beginning of the year. The amount of trade receivables in the first quarter of 2024 reflects a different factoring policy compared to the same period in the previous year.
For other items in current assets, it should be noted that in the first quarter of 2023, cash settlement with a customer dispute occurred as part of the agreement reached in the third quarter of 2022.
The investment flows amount to Euro 4.4 million against Euro 5.0 million in the first quarter of 2023.
Cash flows from operations after capital expenditures amounted to Euro -7.6 million against Euro -10.3 million in the first quarter of 2023.
Cash flows from financial operations in the first quarter of 2024 included interest of Euro 2.3 million against Euro 2.0 million in the first quarter of 2023.
Subsequent events
SIT-MBT S.r.l., SIT’s company in the cooker hood fan business, started operations on April 1, 2024.
On April 22 and April 23, 2024, agreements amending the relevant loan agreements were signed with the Company’s main medium-term lenders, as disclosed in the press release of April 24, 2024, pertaining to the approval of the draft 2023 Financial Statements.
Outlook
During the first months of 2024, the Metering business showed a positive performance, with an expected high single digit growth for the entire year. This positive performance is boosted by the awarding of major tenders in recent months, the progress of ongoing projects with primary customers, and substantial investments made by utilities.
The Heating & Ventilation business unit is expected to recover over the course of the year, with the second quarter expected to be a single-digit reduction from the previous year. Visibility on the second half of the year indicates potential improvement compared to the first six months.
The group’s focus for 2024 will be on improving margins (EBITDA) by reducing fixed costs by about Euro 2 million and reorganizing the production set-up by Euro 2.5 million. At the consolidated level, the expected increase in EBITDA margin is expected to be between 100 and 200 basis points.
Planned investments, which will amount to approximately Euro 20-25 million, will be focused mainly on the R&D area and the completion of the Company’s new headquarters. Net financial debt is expected to be between Euro 140 and 147 million, a reduction from 2023 and the figure reported as of March 31, 2024.
***
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 16:00 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/lrIJY
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) | 31/03/2024 | 31/12/2023 | |
| Goodwill | 70.946 | 70.946 | |
| Other intangible assets | 49.752 | 50.781 | |
| Property, plants and equipment | 103.758 | 105.270 | |
| Investments | 657 | 657 | |
| Non-current financial assets | 3.768 | 2.533 | |
| Deferred tax assets | 19.386 | 18.874 | |
| Non-current assets | 248.267 | 249.061 | |
| Inventories | 90.852 | 83.315 | |
| Trade receivables | 63.300 | 63.458 | |
| Other current assets | 13.664 | 14.264 | |
| Tax receivables | 3.577 | 3.752 | |
| DOther current assets | 7.241 | 6.630 | |
| Cash and Cash Equivalents | 6.271 | 8.700 | |
| Current assets | 184.904 | 180.119 | |
| Total assets | 434.059 | 429.181 | |
| Share capital | 96.162 | 96.162 | |
| Total Reserves | 48.231 | 70.350 | |
| Net Profit | (1.846) | (23.388) | |
| Minority interests net equity | – | – | |
| Shareholders’ Equity | 143.435 | 143.124 | |
| Medium/long-term loans and borrowings | 58.861 | 58.182 | |
| Other non-current financial liabilities and derivative financial instruments | 50.814 | 51.434 | |
| Provisions for risks and charges | 11.027 | 10.513 | |
| Post-employment benefit provision | 4.819 | 5.096 | |
| Other non-current liabilities | 6 | 6 | |
| Deferred tax liabilities | 11.735 | 12.094 | |
| Non-current liabilities | 137.262 | 137.325 | |
| Short-term bank loans | 51.500 | 50.809 | |
| Other current financial liabilities and derivative financial instruments | 13.397 | 8.596 | |
| Trade payables | 67.691 | 66.915 | |
| Other current liabilities | 19.556 | 20.768 | |
| Tax payables | 1.218 | 1.645 | |
| Current liabilities | 153.362 | 148.733 | |
| Total Liabilities | 290.624 | 286.057 | |
| Total Shareholders’ Equity and Liabilities | 434.059 | 429.181 |
Annex 2
INCOME STATEMENT
| (Euro.000) | 1Q 2024 | 1Q 2023 |
| Revenues from sales and services | 69.045 | 83.552 |
| Raw materials, ancillaries, consumables and goods | 41.924 | 51.309 |
| Change in inventories | (7.030) | (10.246) |
| Services | 11.033 | 13.169 |
| Personnel expense | 19.068 | 20.699 |
| Depreciation, amortisation and write-downs | 7.021 | 6.712 |
| Provisions | 159 | 126 |
| Other charges (income) | (2.637) | 188 |
| EBIT | (493) | 1.597 |
| Investment income/(charges) | – | – |
| Financial income | 128 | 539 |
| Financial charges | (1.885) | (2.215) |
| Net exchange gains (losses) | 199 | 251 |
| Impairments on financial assets | – | – |
| Profit before taxes | (2.051) | 172 |
| Income taxes | 206 | 1.166 |
| Net profit for the year | (1.846) | 1.338 |
| Minority interest result | – | – |
| Group net profit | (1.846) | 1.338 |
Annex 3
CASH FLOW STATEMENT
