DELFINGEN INDUSTRY: DELFINGEN INDUSTRY: Results for the 1st half of 2022 – 09/02/2022 at 17:45

Strong organic growth and outperformance of the automotive market

Current Operating Income (ROC) of 5.4% of sales

Net income negatively impacted by the sale of activities in Russia

Sales

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half of 2022 amounted to €203.9 million, up 3.2% compared to the first half of 2021 at constant exchange rates and perimeter (+5.3% in published data).

Mobility division sales were up 2.7% at the end of June 2022 at constant scope and exchange rates (+6.5% in published data).

Global automotive production was down 1.8% in the first half in a still difficult context with tensions over electronic components, the Russian-Ukrainian crisis and health restrictions in China (two months of confinement in April and May).

DELFINGEN Industry outperformed the market by 4.5 points and by 7.6 points excluding the geographic mix effect of its sales. Indeed, the fall in automobile production is particularly marked in Europe/Africa (-10%) where the group achieves 51% of its sales.

At constant exchange rates and perimeter, the main activities evolved as follows:

• The “Protection systems” business posted a 1.9% drop, affected by the decline in global automotive production, particularly in Europe/Africa.

• The “Fluid transfer” business grew by 21.1%, driven by an automotive market up 3.9% in the Americas region.

Industrial Market sales were up 7.3% at constant scope and exchange rates (-1.2% as reported), with a negative impact (-14.8%) due to the change in scope following the sale of the “Technical straps and belts” business in June 2021:

• Drossbach North America sales increased by 5.5% (+16.2% in published data);

• The “Electrical and thermal insulation” activity increased by 16.8% (+26.4% in published data).

The effect of exchange rates on sales is €9.7 million, or 5%.

Gross margin

Gross margin amounted to €96.1 million, or 47.1% of revenue (€101.6 million at June 30, 2021), down 5.3 points due to the continued rise in the price of raw materials, shifted to customers.

Results

Current operating income amounted to €11.0 million in the first half of 2022 (i.e. 5.4% of revenue), it was mainly impacted by:

• Gross margin down 5.3 points;

• Increase in the weight of other purchases and external charges by 0.9 points (energy and transport) and reduction in payroll by 1.9 points.

Other operating expenses include a loss of €2.7 million corresponding to the sale of the DELFINGEN RU-Volga subsidiary.

The financial result is -€1.0m compared to -€1.6m in the 1st half of 2021.

Net income group share is €3.3m, compared to €12.7m in the first half of 2021.

Financial structure

Net financial debt amounted to €106.3 million as of June 30, 2022, compared to €101.6 million as of June 30, 2021, including €6.1 million from the increase in IFRS 16 debt. Investments amounted to 6, 5 M€, the working capital requirement increased by 8.9 M€ under the combined effect of higher activity in the 2nd quarter and the increase in the value of raw materials in stock. The Gearing is 73% compared to 78% as of June 30, 2021, the leverage ratio is 2.88 compared to 1.79 as of June 30, 2021.

Outlook

Uncertainty weighs on the markets with multiple factors such as the rise in production costs or the disruption of supply chains.

According to estimates from S&P Global Mobility (ex-IHS Markit) published in July 2022, global automotive production should stand at 81.1 million units in 2022, up 5% compared to 2021.

DELFINGEN Industry remains very cautious on market expectations. However, given its strategic positioning in vehicle electrical wiring protection solutions, its leadership and its global presence, DELFINGEN Industry anticipates a market outperformance of 2 to 3 points.

DELFINGEN Industry is adapting to these extreme economic conditions while seizing growth opportunities linked to the transformation of the market towards cleaner and responsible mobility.

Under these conditions, DELFINGEN Industry anticipates a performance in the second half of 2022 lower than that of the first half. Subject to a more unfavorable market context, 2022 revenue is expected to exceed €380 million with an operating margin of around 5%.

The development of hybrid and electric engines, as well as car connectivity, make electrical wiring the true nervous system of the vehicle. DELFINGEN’s mission: to protect it by providing ever more innovative solutions with greater added value.

Safe Harbor Statement

Although DELFINGEN’s management considers these forward-looking statements to be reasonable as of the date of publication of this document, investors are warned that these forward-looking statements are subject to numerous elements, risks and uncertainties, which are difficult to predict and generally outside the scope of control of DELFINGEN, which may imply that the results and events actually achieved differ materially from those expressed or anticipated in the forward-looking statements.

DELFINGEN, a world leader in protection solutions

and routing of on-board electrical and fluid networks

WWW.DELFINGEN.COM

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