SALES REVENUES
Revenues from the sale of goods and services
The Sogefi Group recorded net revenues for the amount of Euro 1,158,385 thousand during the period, compared with Euro 924,713 thousand in the previous year. Net of Euro 135,708 thousand realised by the Systèmes Moteurs Group, revenues would amount to Euro 1,022,677 thousand (+10.6% compared to 2010). Exchange rates being equal (at the average exchange rates of the previous year), corresponding revenues would amount to Euro 1,033,706 thousand (+11.8%).
Revenues from the sale of goods and services break down as follows:
By business sector:
(in thousands of Euro) | 2011 | 2010 | ||
---|---|---|---|---|
Amount | % | Amount | % | |
Engine systems | 611,505 | 52.8 | 465,133 | 50.3 |
Suspension components | 547,725 | 47.3 | 461,632 | 49.9 |
Intercompany eliminations | (845) | (0.1) | (2,052) | (0.2) |
TOTAL | 1,158,385 | 100 | 924,713 | 100 |
By geographical area of “destination”:
(in thousands of Euro) | 2011 | 2010 | ||
---|---|---|---|---|
Amount | % | Amount | % | |
France | 246,932 | 21.3 | 207,377 | 22.4 |
Germany | 158,304 | 13.7 | 119,873 | 13 |
Great Britain | 97,060 | 8.4 | 79,043 | 8.5 |
Italy | 79,400 | 6.9 | 71,562 | 7.7 |
Benelux | 59,919 | 5.2 | 47,445 | 5.1 |
Spain | 47,861 | 4.1 | 36,473 | 3.9 |
Russia | 4,544 | 0.4 | 3,306 | 0.4 |
Other European Conturies | 110,910 | 9.5 | 94,276 | 10.3 |
Mercosur | 240,511 | 20.8 | 219,367 | 23.7 |
United States | 53,971 | 4.7 | 18,616 | 2 |
China | 17,246 | 1.5 | 12,639 | 1.4 |
India | 13,325 | 1.2 | 9,685 | 1 |
Mexico | 10,300 | 0.8 | 1,182 | 0.1 |
Canada | 8,243 | 0.7 | 11 | 0 |
Rest of the World | 9,859 | 0.8 | 3,858 | 0.5 |
TOTAL | 1,158,385 | 100 | 924,713 | 100 |
Sogefi continued to pursue its strategy of strengthening its presence in non-European markets, with activity growing significantly in Mercosur (+9.6%), North America (+266.1% including the strong contribution from Systèmes Moteurs S.A.S.; on a like-for-like basis, the increase would have been by 46.1%), China (+36.4%) and India (+37.6%).
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Materials | 577,325 | 425,766 |
Direct labour cost | 104,663 | 92,652 |
Energy costs | 33,883 | 29,169 |
Sub-contracted work | 26,999 | 20,217 |
Ancillary materials | 18,415 | 16,599 |
Variable sales and distribution costs | 39,900 | 35,512 |
Royalties paid to third parties on sales | 3,888 | 4,191 |
Other variable costs | 825 | (1,143) |
TOTAL | 805,898 | 622,963 |
The inclusion of Systèmes Moteurs Group in the scope of consolidation caused a change in “Variable cost of sales” for the amount of Euro 102,092 thousand.
The percentage on revenues of “Variable cost of sales” rose to 69.6% from 67.4% in 2010. Such growth is nearly entirely accounted for by “Materials”, and their percentage on revenues rose from 46% al 49.8%. The increase is mostly due to the product mix of the Systèmes Moteurs group, on which materials have a greater impact than other factors, and to an increase in steel price, in spite of extra costs being nearly totally passed on to sales prices.
The percentage of “Direct labour costs” fell from 10% to 9% due to lower expenses linked to the use of welfare support provisions, an improvement in production efficiency following the increase in volumes, the different product mix of the Systèmes Moteurs group mentioned above, and to the wider use of temporary staff, whose cost is included in “Sub-contracted work”.
“Other variable costs” represent the effect generated by direct labour cost and fixed cost following the reduction (in 2011) or the increase (in 2010) of the inventory of finished goods or semi-finished products.
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Labour cost | 84,115 | 70,895 |
Materials, maintenance and repairs | 23,515 | 19,807 |
Rental and hire charges | 6,739 | 5,193 |
Personnel services | 7,477 | 7,443 |
Technical consulting | 3,733 | 2,786 |
Sub-contracted work | 1,900 | 1,200 |
Insurance | 3,156 | 1,728 |
Utilities | 1,352 | 1,396 |
Capitalisation of internal construction costs | (18,376) | (12,507) |
Other | 1,372 | 645 |
TOTAL | 114,983 | 98,586 |
“Manufacturing and R&D overheads” show an increase of Euro 16,397 thousand, Euro 13,200 thousand of which incurred by the Systèmes Moteurs Group. On a like-for-like basis, an increase of Euro 3,197 thousand (+3.2%) is observed compared to the previous year (+ Euro 4,022 thousand if the effect of exchange rates is excluded).
- “Labour cost”, which grew by Euro 1,423 thousand mainly due to the lower use of welfare support provisions in Europe, higher workforce in China and India, and inflation trends in South America. The increase was partly offset by a significant reduction in labour cost at subsidiary Sogefi Filtration Ltd as a result of the restructuring plan implemented during the year;
- “Materials, maintenance and repairs”, up by Euro 1,928 thousand overall as a result to larger production volumes;
- “Technical consulting”, which grew by Euro 507 thousand due to a more extensive use of them in the development of new products in subsidiary Allevard Rejna Autosuspensions S.A.;
- “Insurance”, which increased by Euro 1,258 thousand, basically due to a more accurate distribution between “ Manufacturing and R&D overheads” and “Administrative and general expenses” (as a consequence these costs are lower in the latter item).
DEPRECIATION AND AMORTISATION
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Depreciation of tangible fixed assets | 36,252 | 34,673 |
of which: assets under finance leases | 1,010 | 1,041 |
Amortisation of intangible assets | 12,517 | 10,251 |
TOTAL | 48,769 | 44,924 |
If the Systèmes Moteurs Group is excluded, “Depreciation and Amortisation” amount to Euro 43,834 thousand, compared to Euro 44,924 thousand in the same period of the previous year. The decrease is mostly originated from subsidiaries Filtrauto S.A., Allevard Rejna Autosuspensions S.A. and LPDN GmbH. Conversely, an uptrend is observed in all areas where the Group has been growing significantly (China, India, United States).
DISTRIBUTION AND SALES FIXED EXPENSES
This item is made up of the following main components:
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Labour cost | 21,204 | 19,318 |
Sub-contracted work | 4,482 | 3,400 |
Advertising, publicity and promotion | 3,771 | 4,081 |
Personnel services | 2,920 | 2,596 |
Rental and hire charges | 1,420 | 1,738 |
Consulting | 838 | 665 |
Other | 634 | 569 |
TOTAL | 35,269 | 32,367 |
The trend of “Distribution and sales fixed expenses” reflects increased sales volumes; on a like-for-like basis, these costs turn out to have increased by Euro 568 thousand (+1.8%) overall compared with the previous year.
- the increase in “Labour cost” and “Personnel services” – by Euro 499 thousand overall – is mainly due to the increased volumes of the Suspension Components Division;
- “Sub-contracted work” and “Rental and hire charges” did not increase significantly overall, but reflect the new logistical approach focused on outsourcing management in the aftermarket segment of the Engine Systems Division;
- the savings on “Advertising, publicity and promotion” are to be traced back to the centralisation of this function which is now a responsibility of the aftermarket segment of the Engine Systems Division.
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Labour cost | 30,490 | 27,764 |
Personnel services | 3,918 | 3,486 |
Maintenance and repairs | 3,721 | 3,501 |
Cleaning and security | 3,558 | 3,490 |
Consulting | 4,547 | 5,101 |
Utilities | 2,767 | 2,810 |
Rental and hire charges | 3,743 | 3,455 |
Insurance | 1,319 | 2,131 |
Participation des salaries | 976 | 79 |
Administrative, financial and tax-related services provided by Parent Company | 1,820 | 1,860 |
Audit fees | 1,365 | 1,157 |
Directors' and statutory auditors' remuneration | 1,368 | 1,653 |
Sub-contracted work | 648 | 665 |
Other | 4,156 | 1,194 |
TOTAL | 64,396 | 58,346 |
“Administrative and general expenses” rise to Euro 60,287 thousand on a like-for-like basis, recording an increase of Euro 1,941 thousand (+3.3%).
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Indirect taxes | 6,972 | 6,249 |
Other fiscal charges | 2,996 | 2,702 |
Imputed cost of stock option and stock grant plans | 611 | 540 |
Other non-operating expenses (income) | 9,257 | 4,530 |
TOTAL | 19,836 | 14,021 |
“Indirect taxes” include tax charges such as property tax, taxes on sales revenues (French companies), non-deductible VAT and taxes on professional training.
- costs for the amount of Euro 4,395 thousand reflecting the fees of consultants who assisted the Holding Company Sogefi S.p.A. with the legal, financial and tax due diligence for the acquisition of the Systèmes Moteurs Group;
- write-downs of assets for the amount of Euro 3,412 thousand relating to subsidiary Sogefi Filtration Ltd for the restructuring process under way;
- costs for the amount of Euro 803 thousand relating to the recognition of the margin on finished products, semi-finished products and work in progress (the so-called “inventory step-up”) to income statement, recognised when the fair value of acquired Systèmes Moteurs Group's assets on change of control date was determined;
- provisions for legal disputes with employees and third parties mainly in the subsidiaries Sogefi Filtration do Brasil Ltda and Allevard Rejna Autosuspensions S.A. for a total of Euro 748 thousand;
- pension costs for employees no longer on the books of Allevard Federn GmbH for the amount of Euro 148 thousand;
- net actuarial gains for the amount of Euro 328 thousand originated from pension fund valuation;
- other recurring costs for the amount of Euro 79 thousand.
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Interest on amounts due to banks | 8,669 | 5,027 |
Financial charges under lease contracts | 449 | 476 |
Financial component of pension funds and termination indemnities | - | 43 |
Loss on interest-bearing hedging instruments | 1,302 | 2,446 |
Other interest and commissions | 4,654 | 3,007 |
TOTAL FINANCIAL EXPENSES | 15,074 | 10,999 |
Financial income is detailed as follows:
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Gain on interest-bearing hedging instruments | 47 | 28 |
Interest on amounts given to banks | 1,589 | 1,241 |
Financial component of pension funds and termination indemnities | 541 | - |
Other interest and commissions | 217 | 176 |
TOTAL FINANCIAL INCOME | 2,394 | 1,445 |
TOTAL FINANCIAL EXPENSES (INCOME), NET | 12,680 | 9,554 |
Financial expenses, net show an increase of Euro 3,126 thousand basically due to the higher net financial indebtedness as a result of the acquisition of the Systèmes Moteurs Group and to rising interest rates.
As of December 31, 2011, this item amounts to zero.
INCOME TAXES
(in thousands of Euro) | 2011 | 2010 |
---|---|---|
Current taxes | 18,667 | 13,665 |
Deferred tax liabilities (assets) | (115) | (2,312) |
Income (expenses) from Group tax filing system | 389 | 217 |
TOTAL | 18,941 | 11,570 |
The year 2011 recorded a tax rate of 40.4% compared to 35.7% in the previous year.
(in thousands of Euro) | 2011 | 2010 | ||
---|---|---|---|---|
Tax rate % |
Tax rate % |
|||
Result before taxes | 46,833 | 0 | 32,419 | 27.50% |
Theoretical income taxes | 12,879 | 8,915 | ||
Effect of increases (decreases) with respect to the standard rate: | ||||
Statutory amortisation of goodwill | (249) | 0 | (257) | (0.80%) |
Non-deductible costs, net | 6 | 0 | 346 | 1.10% |
Use of deferred tax assets not recognised in previous years | (487) | 0 | - | 0.00% |
Deferred tax assets on losses for the year not recognised in the financial statements | 2,171 | 4.60% | 576 | 1.80% |
Taxed portion of dividends | 1,008 | 2.20% | 819 | 2.50% |
Other permanent differences and tax rate differentials | 3,614 | 7.60% | 1,171 | 3.60% |
Income taxes in the consolidated income statement | 18,941 | 40.40% | 11,570 | 35.70% |
“Deferred tax assets on losses for the year not recognised in the financial statements” are mainly attributable to the French subsidiaries of the Suspension Components Division, for which there was no probability at the end of the year that such losses would be recovered.
The Company did not issue any shares other than ordinary shares; treasury shares are always excluded from the dividend.
2011 | 2010 | |
---|---|---|
Net result attributable to the ordinary shareholders (in thousands of Euro) | 24,736 | 18,821 |
Weighted average number of shares outstanding during the year (thousands) | 114,326 | 114,349 |
Basic EPS (Euro) | 0.216 | 0.165 |
Diluted EPS
2011 | 2010 | |
---|---|---|
Net result attributable to the ordinary shareholders (in thousands of Euro) | 24,736 | 18,821 |
Average number of shares outstanding during the year (thousands) | 114,326 | 114,349 |
Weighted average number of shares potentially under option during the year (thousands) | 2,024 | 3,440 |
Number of shares that could have been issued at fair value (thousands) | (1,513) | (3,440) |
Adjusted weighted average number of shares outstanding during the year (thousands) | 114,837 | 114,349 |
Diluted EPS (Euro) | 0.215 | 0.165 |
The “Weighted average number of shares potentially under option during the year” represents the average number of shares that are potentially outstanding under stock option plans (only for potentially dilutive options, i.e. with an exercise price lower than the average annual fair value of the ordinary shares of Sogefi S.p.A.), for which the subscription right has vested but has not yet been exercised at the end of reporting period. These shares have a potentially dilutive effect on Basic EPS and are therefore taken into consideration in the calculation of Diluted EPS.
The “Number of shares that could have been issued at fair value” represents the normalisation factor, being the number of shares that would have been issued dividing the proceeds that would have been received from subscription of the stock options by the average annual fair value of the Sogefi S.p.A. ordinary shares, which in 2011 amounted to Euro 2.4062, compared to Euro 2.1410 in 2010.
Please note that 2,622,535 shares that could dilute Basic EPS in the future were not included in the calculation of Diluted EPS for 2011 because their exercise price is higher than the average annual fair value of the ordinary shares of Sogefi S.p.A. in 2011.