26
Jul 18

PRESS RELEASE – FINANCIAL STATEMENT 2017 - Brescia, 26th July 2018

The Market: Background and Positioning

Global steel production, according to data elaborated by World Steel Association in 2017, totalled 1,691.2 tonnes and registered a significant increase since 2016, with a positive variation equalling +5.3%. The most relevant increase pertains to Asian countries (1,162.5), notably China with its production of 831.7 million tonnes, corresponding to 49.2% of global production; and India, which gradually consolidated its increase, growing by +6.2% and reaching an overall production of 101.4 million tonnes. The European Union produced a total of 168.7 million tonnes of steel (+4.1%); Italy, with 24.0 million tonnes (+4.1%) ranked tenth among global producers. Other European countries also performed better in comparison to the previous year: Germany produced 43.6 million tonnes (+3.5%), France reached 15.0 million tonnes (+7.1%) and Spain, after the critical decline of 2016, increased its production by 6.2% since the previous year, totalling 14.5 million tonnes.

The Ori Martin Group

The ORI Martin Group specializes in the production of quality steels for engineering applications, predominantly for the automotive industry. The Group’s consolidated financial statement includes the financial statement of O.R.I. Martin SpA, the parent company, and the statements of the subsidiary companies, owned by majority by the parent company, adopting the criterion of proportional consolidation.

  • Sales revenues were € 464,2 million, with an increase of +24.8% compared to revenues (372.1) obtained in 2016.
  • Net profit reached € 14.2 millions, after amortization and saving funds for € 36.5 millions, of which € 10.0 millions from a re-evaluation, according to Italian Law 147/2013;
  • Profitability indices were positive: EBITDA was €57.3 million, corresponding to 12.3% of sales volume, and cash flow reached € 58.1 million, equal to 12.5% of turnover.

The Group holds a significant share in the European automotive markets.

The steelwork and rolling mill for the production of hot rolled high-quality steels for engineering applications are located in Brescia; Trafilati Martin, specializing in cold finishing of hot-rolled steels (peeling and mechanical processing) for automotive applications is in Cologne (Brescia). Novacciai Martin, acquired in 2016, in San Pietro Mosezzo (Novara), is active in drawing, peeling and grinding bars for general engineering applications. In the constructions field, we have two companies: Siderurgica Latina Martin, in Ceprano (Frosinone), is in charge of wire drawing and production of strand for prestressed concrete; TTM, in Corbetta (Milan) produces tie-rods for geotechnical applications.

The financial year of 2017 has been impacted by the significantly increased costs of scrap, alloys, electricity, electrodes and refractory materials. Notwithstanding, the Group improved its EBITDA thanks to the greater efficiency and the positive impact produced by vertical integration.

Relevant data of the Consolidated Financial Statement, in thousands of €, are given below:

Dati in €/1.000

2017

%

2016

%

2015

%

SALES REVENUES

464.237

 

372.105

 

403.427

 

EBITDA

57.260

12,3%

51.772

13,9%

53.004

13,1%

EBIT

20.664

4,5%

22.156

5,9%

16.664

4,1%

FINANCIAL COSTS

-746

-0,2%

-1.255

-0,3%

-1.615

-0,4%

CASH FLOW

58.106

12,5%

50.517

13,6%

51.249

12,7%

GROSS PROFIT

21.511

4,6%

20.901

5,6%

15.142

3,8%

TAXES

7.324

1,6%

6.433

1,7%

6.209

1,5%

NET PROFIT

14.187

3,1%

14.468

3,9%

8.933

2,2%

 

 

NET FINANCIAL

NET FINANCIAL SITUATION

1.671

0,6%

16.974

6,2%

46.560

16,1%

NET ASSETS

268.909

99,4%

254.678

93,8%

243.386

83,9%

 

 

PS: a reserve of €7.1 million is lacking, due to its covering a fine imposed by the Italian Competition Law Authority in July 2017, repealed in first instance by the Regional Administrative Court of Latium in June 2018. Therefore, excluding the fine, yearly profit should have been €21.3 million.

The Group’s Investments

 

Throughout 2017, total investments made by the Group were about €18 million and pertained mostly to improving product quality and plant systemic modernization, in line with Industry 4.0 standards.

Environmental investments of 2017 were consistent with previous years, reaching up to 20% of the Group’s total investments.

The Company operates in compliance with regulations on environmental protection, as well as with its internal Environmental Management System, certified by IGC with an ISO 14001 Certificate. Moreover, it subsequently integrated the above compliance mechanisms with a Safety Management System, conforming to regulation BSOHSAS 18001 also certified by IGQ.

 

Relevant events concerning the first semester of 2018

In June 2018, as part of our strategy to increase vertical integration, the Group acquired the majority shares of Ferrosider, based in Ospitaletto (Brescia). Ferrosider has a long and glorious history in the area, where it has operated since 1962, specializing in the production of hot rolled bars, billets and profiles. At present, it employs 112 members of staff and sees an overall turnover of about €120 million. Purpose of the acquisition is strengthening existing production activities, without increasing production capacity on the market.

 

IATF Certification

In early July, the Group obtained a IATF Certification in relation to its production processes connected to the supply to the automotive industry. The Group is the first steelmaking company in Italy and among the first in Europe to obtain this certification.

For the three-year term 2016-2019, O.R.I. Martin’s Board of Directors is formed by: Uggero De Miranda (President); Annamaria Magri Martin (Vice President); Giovanni Marinoni Martin (Vice President); Andrea Agnelli (CEO); Giovanni Comboni (Board Member); Roberto De Miranda (Board Member); Carlo Garavaglia (Board Member).

 

Brescia, 26th July 2018