The Board of Directors of Gefran approve, under the chairmanship of Maria Chiara Franceschetti, the results as at 30 June 2024. Revenues in the first half of 2024 amounted to 68.5 million Euro, compared to 71.5 million Euro in the same period of 2023, registering a decrease of 4.2%, or 3 million Euro (5.3% in Q1). Excluding the negative effect caused by exchange rates fluctuations, the contraction would decrease to 2.6 million Euro (-3.6%) compared to 30 June 2023.
“It should also be noted that revenues for the first half of 2024 include 0.2 million Euro relating to residual sales of motion control products vs. a total of 0.6 million Euro as at 30 June 2023, partly related to product sales (0.4 million Euro) and partly to the supply of services to the WEG group (0.2 million Euro). Net of these effects, the decrease in revenues in the first half of 2024 compared to the same period in the previous year is more limited (-3%)“, explain the company on its press release.
“In the first six months of 2024, the Group achieved positive results in line with forecasts. Gefran proved to be a resilient company, as confirmed by both its margins and very positive operating cash flows, the latter even improving compared to prior years”, commented Marcello Perini, Chief Executive Officer of the Gefran Group. “Revenue growth in the first half of 2024 was above expectations, despite a slowdown in demand across the geographical regions served by Gefran, partially offset by the positive performance of the Asian markets. These results confirm that market development should remain a priority for the Group.
Despite the lack of signs of a continuous recovery in orders from Europe, we assume for the end of the year revenues in line with the previous year with margins that remain largely positive, guaranteed by the Group’s attitude to exceed the expectations of its customers with increasingly innovative products”.
The breakdown of revenues by geographical region shows revenue growth in Asia (+25%), which was also influenced by the negative effect of foreign currencies developments (in particular the Rupee and the Renmimbi), net of which the increase would be higher (+28.2%). The revenues generated in the other regions mainly served by the Group decreased in the period, in particular Italy (-14.4%), Europe (overall -10.3%) and America (overall -5.4%).
In terms of business areas, compared to the first half of 2023, the revenues generated by the automation components business increased (+1.1%), thanks to the good performance recorded in Asia, Europe and America, which was only partially affected by the decline in domestic market revenues. On the other hand, a 7.6% decrease was recorded for the sensors business (-10.1% in Q1), spread across the main geographical regions served with the exception of the Asian market where, as for the automation components segment, revenues increased compared to the same period in the previous year.
In the first half of 2024, order intake was overall higher than in the same period of 2023 (+5.7%), as a result of an increase in order intake for the sensors business (+8.5%), while it was lower for the automation components business (+0.3%).
Added value in the six-month period amounted to 49.6 million Euro (51 million Euro in the same period in 2023), corresponding to 72,5% of revenues, posting a higher percentage than in the same period of the previous year (+1.1%). The decrease, whose total absolute value is equal to 1.4 million Euro, is due to lower revenues, only partially offset by the better margins from the different mix of products sold compared to the same period of the previous year.
Other operating costs in the first half of 2024 amounted to 11.5 million Euro, a decrease of 0.4 million Euro over the first half of 2023, absorbing 16.7% of revenues (16.6% in the same period of the previous year). The decrease mainly relates to service costs (in particular utilities and various professional consultancies) partly affected by higher costs for external processing and maintenance.
Personnel costs as at 30 June 2024, equal to 24.9 million Euro, were 0.9 million Euro higher than the same previous period (24 million Euro). As a percentage of revenues, the ratio was 36.3% (33.6% in the first half of 2023). It should be noted that in the first six months of 2024 there was an increase in the workforce, partly related to the stabilisation of 31 temporary workers. In addition, starting from June 2023 and subsequently in June 2024, the figure incorporates the salary increase provided for by the CCNL for all employees at the Group’s Italian sites, increased by the application of the safeguard clause defined at the national level and linked to inflation developments.
EBITDA in the first half of 2024 was positive at 13.3 million Euro (15.2 million Euro in the same period of 2023), corresponding to 19.5% of revenues (21.3% of revenues in 2023), down by 1.9 million Euro compared to the same period of the previous year. The decrease in added value in absolute value due to lower sales and the increase in personnel costs are the main dynamics determining the decrease in EBITDA compared to the first half of 2023.
Depreciation, amortisation and impairment as at 30 June 2024 was equal to 4 million Euro, compared with 3.7 million Euro as at 30 June 2023, showing an increase of 0.2 million Euro, which was affected by the high level of investment completed by the Group during 2023.
EBIT as at 30 June 2024 was positive and equal to 9.4 million Euro (13.6% of revenues), down 2.1 million Euro compared to 30 June 2023, when it amounted to 11.5 million Euro (16% of revenues). As with EBITDA, the change results from the decrease in sales, also affected by higher personnel costs and higher depreciation charges than in the same period of the previous year.
Gains from financial assets/liabilities totalled 0.1 million Euro in the first half of 2024 (0.2 million Euro in charges in the same period of 2023). The item includes financial income related to cash management in the amount of 0.6 million Euro (0.2 million Euro as at 30 June 2023) and expenses related to the Group’s debt in the amount of 0.5 million Euro (0.3 million Euro in the first half of 2023).
Taxes were overall negative and amounted to 2.3 million Euro (they were overall negative by 3.7 million Euro in the first half of 2023, when they included the 0.6 million Euro provision for the tax audit concerning the Parent Company relating to 2019 and 2020, which was resolved in Q4 2023).
The result from operating activities as at 30 June 2024 was positive by 7.2 million Euro, down 0.5 million Euro compared to the first half of 2023.
The Group’s net profit as at 30 June 2024 was 7.2 million Euro, compared to 7.4 million Euro as at 30 June 2023.
Working capital as at 30 June 2024 amounted to 16.5 million Euro, up by a total of 0.9 million Euro compared to 15.6 million Euro as at 31 December 2023. The change in working capital was mainly due to the increase in trade receivables (3 million Euro) and inventories (0.3 million Euro), offset by the increase in trade payables (0.6 million Euro). Finally, a part of the increase was offset by the net balance of other assets and liabilities, overall negative by 8.3 million Euro, compared to the negative figure of 6.6 million Euro as at 31 December 2023, and includes, among others, payables to employees and social security institutions, tax receivables and payables.
Shareholders’ equity amounted to 95.3 million Euro as at 30 June 2024, up by 1.4 million Euro from 94 million Euro as at 31 December 2023. The change is mainly due to the recognition of profit for the period (7.2 million Euro) and the positive effects of the changes in the translation reserve (0.3 million Euro), partly absorbed by the payment of dividends on the 2023 profit (6 million Euro) and by the change in the reserves for the measurement of securities and derivatives at fair value (0.1 million Euro).
Investments amounted to 2.7 million Euro in the first half of 2024 (6.1 million Euro in the same period of 2023) and mainly concern the production departments, research and development activities and the renovation of the buildings housing the Group’s factories.
Net financial position as at 30 June 2024 was positive and amounted to 23.6 million Euro, while the figure at the end of 2023 was positive by 22.7 million Euro.
The change in net financial position is mainly due to the positive cash flow from the company’s core business (11.1 million Euro), mitigated by expenditure on technical investments in the first half of the year (2.7 million Euro) and by payment of dividends (6 million Euro), taxes and rental fees (totalling 1.3 million Euro).
The net financial position comprises net short-term cash and cash equivalents totalling 44.9 million Euro, and net medium/long-term debt of 21.4 million Euro.
Business unit reclassified as disposal groups and discontinued
Following the sale of the motion control business and the related assets reclassified, pursuant to IFRS 5, as “Available for sale”, in the first half of 2024 there was no economic activity connected to them. Conversely, the assets recognised in the first half of 2023 related to the January and February operations of the motion control business unit of the subsidiary Gefran India, which was sold to WEG on 1 March 2023. This also includes the effects of the sale of the assets (inventory, other assets and employees) of the motion control business unit within the Chinese subsidiary Gefran Automation Technology (China), sold on 3 January 2023.
Below are the indicators relating to the assets held for sale as at 30 June 2023.
Revenues as at 30 June 2023 amounted to 2.4 million Euro.
EBITDA as at 30 June 2023 was negative and amounted to 0.1 million Euro (-2.7% of revenues).
EBIT as at 30 June 2023 was negative and amounted to 0.1 million Euro (-2.7% of revenues).
In the first half of 2023, the impairment of assets held for sale reflected the adjustment from the initial estimate (negative by 145 thousand Euro) of the net accounting effects expected from the disposal of the business, already recognised in the second half of 2022.
The net loss from assets held for sale in the period to 30 June 2023 totalled 0.2 thousand Euro.