ok interno gb 2009 - interpump group · 2014. 8. 8. · during 2009 the group purchased 2,164,222...
TRANSCRIPT
R E S U L T Shttp :// www.interpumpgroup.it
RE
SU
LTS
20
09
RESULTS 2009
IND
EX 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Corporate Bodies
Letter to the Shareholders
Interpump Group’s Structure
Financial highlights
Consolidated balance sheets
Consolidated income statements
Comprehensive consolidatedincome statements
Consolidated cash flow statements
Changes in shareholders’ equity
Directors’ remarks onperformance in 2009
Companies in the Group
Business sector information
Independent Auditor’s report
Annex 1
Pag. 5
Pag. 6
Pag. 9
Pag.11
Pag.15
Pag.17
Pag.19
Pag.20
Pag.22
Pag.25
Pag.32
Pag.35
Pag.44
Pag.47
3
INDEX
Chairman
Deputy Chairmanand Executive Director
Executive Director
Independent Director
Independent Director
Non-executive Director
Non-executive Director
Non-executive Director
Independent Director
Non-executive Director
Giovanni Cavallini
Fulvio Montipò
Paolo Marinsek
Salvatore Bragantini
Sergio Erede
Giuseppe Ferrero
Marco Reboa (a), (b)
Giovanni Tamburi (b)
Chairman
Statutory Auditor
Statutory Auditor
Enrico Cervellera
Achille Delmonte
Alfredo Malguzzi
(a) Member of the Audit Committee(b) Member of the Remuneration Committee
PricewaterhouseCoopers S.p.A.
Franco Cattaneo (a), (b)
Giancarlo Mocchi (a)
Interpump Group S.p.A.Head Office: 42049 Sant’Ilario d’Enza (RE) - Via E. Fermi, 25Share Capital: Euro 50,318,322.08 wholly paid upCourt of Reggio Emilia - Companies Register R.E.Tax Code 11666900151 - VAT Number IT 01682900350
5
Corporate Bodies
Board of Directors
Board of Statutory Auditors
Independent Auditors
1 .
RESULTS 2009
The year just past was characterized by an international economic and financial crisis the dimensions of which have never been experiencedin the modern economic era. In par ticular, the machine building sector has been among the most stricken, as shown also by the t radeassociations with a drop in many cases of more than 30%, with points even of 60/70%.
Dear Shareholders,
Against this wider economic backdrop, the Interpump Group achieved the following results:- net revenues were 342.9 million euros (-19.2% compared to 2008 and -28.3% on an equal consolidation basis);- EBITDA totalled 46.9 million euros or 13.7% of sales (-46.1% compared to 2008 when it was 87.0 million euros, which accounted for
20.5% of sales). The fall was significant, but cost containment actions allowed us to reach an EBITDA of 13.7% of sales, which is a satisfyingresult on account of the strong contraction in the reference markets;
- Free cash flow was 63.1 million euros, compared to the 22.1 million in 2008;- net earnings totalled 14.0 million euros (4.1% of sales), compared to the 40.2 million euros realised in 2008.
Financial managementIn a year characterized by a strong contraction in the markets and the financial resources made available by the credit system, priority hasbeen given to f inancial management, in addit ion to actions aimed at containing costs and shown hereinafter .
We have already seen that free cash flow generated, after the change in working capital and investments, reached 63.1 million euros, almostthree times that realized in 2008.
This result was reached thanks to a policy targeted to containing working capital, a containment well above the physiological d ownturn dueto the contraction in sales. Liquidity generated by the reduction in commercial working capital was 44.7 million euros, 36.3 mi llion of whichwas due to the reduction in warehouse stocks. In this respect it is useful to note that against a downturn in sales of 28.3%, o n an equalconsol idat ion basis purchases were down by 44.4%, with the aim of opt imiz ing the f inancia l management.
The same attention was given to credit management. This facilitated a non-substantial change in the average number of days for collectingcredits, still on an equal consolidation basis, with a positive impact on the generation of liquidity (+29.0 million euros).
With the same way of thinking a tight control on investments was made, carr ying out only those necessar y for production purposes; thismeasure had no impact on the Group's production ef ficiency, since our business does not call for very high levels of investment in plant andmachinery. Investments totalled 8.3 million euros against 14.4 million during 2008.
On 4 November 2009 the Board of Directors, on a resolution of the Meeting on 26 August, decided to increase the share capital, againstpayment and in divisible fashion, for a maximum nominal value of 10.4 million euros, in addition to a premium of 39.4 million euros, by issuinga maximum no. 19,915,680 shares, to be offered in option to shareholders in the ratio of 40 Shares for each 147 shares held, at an offeringprice per share of € 2.50, of which € 1.98 by way of a premium. The Board also established:
(1) the maximum number of warrants to be combined with the Shares at 19,915,680, and the relative free combination ratio of 1 Warrantfor 1 Share;
(2) that, without prejudice to the contents of the Warrants Regulatory Code concerning any additional exercise periods and/or periods of suspension of the exercise right, the Warrants can be exercised on all trading days in the month of October in 2010, 2011 and 2012;
(3) the subscription price of each Conversion Share as:
a. € 4.50, of which a € 3.98 premium, for Warrants exercised on all trading days in the month of October 2010;b. € 4.80, of which a € 4.28 premium, for Warrants exercised on all trading days in the month of October 2011;c. € 5.10, of which a € 4.58 premium, for Warrants exercised on all trading days in the month of October 2012;
(4) the maximum number of Conversion Shares at 12,239,845, and the relative exercise ratio as 59 Conversion Shares for each 96 Warrantsexercised.
The increase in share capital was concluded with the subscription of 19,915,160 shares (99.99% of shares of fered as option) for a valueof 49,787,900 euros inclusive of the premium. The share capital after the increase in capital is made up of 96,766,004 ordinar y shareswith a nominal value of 0.52 euro, for an overall value of 50,318,322.08 euros.
The increase in capital and the increase to serve the warrants will undoubtedly allow a strengthening in the capital solidity of the Group, withpositive effects on the rating. The increases will allow for possession of the financial means required to sustain the Group's process ofconsolidation and development.
With the capital increase operation and the generation of cash on hand during the year, the Group reimbursed in December 2009 and January2010 66.6 million euros of loans falling due, without resor ting to replacement loans. On 31 December 2009 the Group claimed ava ilablefunds of 85.4 million euros (33.3 million of which were used in Januar y 2010 to repay due loans) and 193.4 million euros of unu sed linesof credit. As an indication of the trust enjoyed by the Group with the credit system, during the early months of 2010 another t wo mediumterm loans were obtained for a total of 50 million euros.
It is therefore believed that the Group will have suf ficient financial resources not only to reimburse loans falling due, but a lso to support theGroup's growth both internal and along external lines.
For the second year in succession the Group has decided not to distribute a dividend. Whereas in 2009 the decision had been taken mainlybecause of the exceptional and uncertain nature of the economic situation, in 2010 motives of consistency with the increase in capital justconcluded have prevailed.
Net financial indebtedness decreased from 206.4 million euros at 31 December 2008 to 185.5 million euros at 31 December 2009, throughgeneration of free cash flow of 63.1 million euros, the increase in capital of 49.9 million euros, partially counterbalanced by outlays relatingto the acquisitions of the Cylinder Division companies (81.8 million euros) and through the acquisitions of treasury shares (6.7 million euros).
The Group also has contractual commitments for the purchase of residual shareholdings in subsidiaries totalling € 16.4 million (€ 21.9 millionat 31/12/2008).
Yours sincereleySant Ilario d Enza (RE), 16 march 2010
Giovanni Cavallini Chairman
The manager responsible for drafting company accounting documents, Carlo Banci declares, pursuant to the terms of section 2 ar ticle 154(2) of the FinancialServices Act, that the accounting disclosures in the present document correspond to the contents of documents, the account books and the accounting entries.
Sant Ilario d Enza (RE), 16 March 2010Carlo Banci
Manager responsible for draftingcompany accounting documents
60,274High-pressure pumps
2,623
7,809
172,409
-18.8%
Very high-pressure systems
Sheet metal drawing, blanking, and pressing
Cleaning machinery
Total
101,703 -20.0%
-28.3%
-31.6%
-20.3%
2009/000
2008/000
Growth/Contraction
74,200
3,656
11,411
216,353
127,086
Letter to the Shareholders2 .Performance by sectorFaced by the fall in sales and shrinkage of the order por tfolio, since the end of 2008 the Group has been responding with actions aimed ascutting costs and restricting the level of working capital and expenditure.
Firstly, many terms with suppliers were renegotiated; labour costs were also reduced by means of eliminating over time, clearing residualholidays and recourse to lay of fs, as well as, for the foreign companies, to other agreements that provide for a reduction in w orking hoursand the number of employees.From 1 May 2009 certain Group companies benefited from solidarity contracts aimed at further limiting payroll costs. Outsourced work hasbeen reduced by bringing internally those processes that earlier had been carried out externally to integrate production capaci ty; costs fortemporary staff were also cut as the Group preferred to use its permanent employees.Strict control over commercial and general costs was also maintained.Following these operations, the Group has been able to maintain a satisfactor y profitability, given the gravity of the economic crisis.
Turnover in the Industrial Sector was down by 20.3% at € 172.4 million. The following table gives a breakdown of Industrial Sector sales byproduct type:
EBITDA of the Industrial Sector was 32.9 million euros (19.0% of sales), a drop of 38.3% compared to 2008, when it was 53.2 mil lion(24.6% of sales).
Sales in the Hydraulic Sector were down by 13.3% (-35.6 % on an equal consolidation basis). Net of the Cylinders Division, sales by Europeancompanies were down by 43.1% with respect to the figure for 2008. Sales by our US subsidiar y Muncie dropped by 26.1% in dollar -on-dollar terms; after conversion into euro the downturn was 22.0%. The Cylinders division companies were down by 51.2% with respe ct to2008, on an equal consolidation basis.
EBITDA of the Hydraulic Sector was 15.0 million euros (10.0% of sales), a downturn of 55.2% compared to 2008 when it was 33.4 millioneuros (19.4% of sales).
Sales of electric motors were recorded at € 20.8 million (-41.3% compared to 2008). EBITDA was –1.1 million euros (+0.3 million in 2008).
Treasury stockDuring 2009 the Group purchased 2,164,222 treasury shares at an average unit cost of € 3.09.In the framework of the acquisitions of the newly-constituted Cylinder Hub 3,399,285 treasury stock were sold for a value of 13,553 € /000(average unit cost of 3.99 euros).
The residuary treasury stock in the por tfolio at 31/12/2009, amounting to 3,660,720, correspond to 3.78% of the capital and areearmarked for ser ving the stock option plans or for swapping in the framework of acquisitions of equity holdings.
Strategy for 2010 and coming years
After a 2009 in which no signs of a recovery were indicated, except in the second half and only for high pressure pumps, 2010 is also showingsigns of uncertainty, especially in the Hydraulic Sector which was particularly hit by the crisis. In the current year, even with the present marketand economic uncer tainties, the Group anyway predicts a growth in turnover and profitabil ity compared to 2009.The aim of Interpump Group in this world economic recession is to maintain or, wherever possible, improve its competitive posit ions and torestrict costs and invested capital as far as possible. The Group is confident that it has managed to maintain, and in some instances actuallyincrease, its market shares over the past few months.
Actions directed at containing costs and optimizing financial management, which have already shown their effects during 2009, will continue.For future years the Interpump Group considers that is well placed to resume its path of growth, as far as compatible with a pr ocess ofrecovery of world markets. Future development will be underpinned by Interpump Group's strongly competitive positions in the Hydraulic Sectorand in the field of high- and very high-pressure pumps, and the new initiatives that the Group currently has in the emerging countries: India,China and S. America. A return to the turnover of 2008 will probably take place in the coming years, but with a dif ferent make-up. About5% of our sales in 2008 were made in the Emerging Countries, but the Group has set itself a target in the coming years of incre asing thisto 20/25%.The rationalization of the Cylinder Hub companies is also linked to this goal, by specializing the individual companies and int egrating theirfunctions, and exploiting the synergies with the other Group companies. The projects for producing cylinders in India and China should benoted, in companies already existing within the Group, and in South America, not so much with the goal of delocalizing producti on, but topenetrate the local markets.
The generation of net liquidity will naturally be very important for the future, both by means of containing costs and through the managementof working capital.I would like to thank you for the trust you have placed in Interpump Group, and confirm the efforts of all our personnel and my own personalcommitment to ensure the Group continues to release further resources for growth and increase Group value for our Shareholders
GENERALPUMP Inc.
100 %
GENERALPUMP CHINA Inc.*
100 %
SIT S.p.A.65 %
GENERALTECHNOLOGY S.r.l.
100 %
HAMMELMANNS.L.
100 %
HAMMELMANNCORPORATION Inc.
100 %
HAMMELMANNMASCHINENFABRIK
GmbH100 %
HAMMELMANNAUSTRALIA
Pty Ltd100 %
HAMMELMANNPUMPS SYSTEMS
Co. Ltd90 %
UNIELECTRIC S.p.A.70 %
INTERPUMPENGINEERING
S.r.l.100 %
INTERPUMPHYDRAULICS
S.p.A.100 %
MUNCIE Inc.100 %
HYDROMETAL S.r.l.100 %
HYDROVEN S.r.l.100 %
INTERPUMPHYDRAULICS
FRANCE S.a.r.l.99,77 %
MEGAPacific Pty Ltd*
5%
HYDROCARROMA S.r.l.
70 %
AVI S.r.l.51 %
HYDROCARCHILE S.a.
60 %
INTERPUMPHYDRAULICS
International S.p.A.70,61 %
SYSCAM GESTIÓNINTEGRADA S.a.*
60 %
INTERPUMPHYDRAULICS
INDIA Ltd 100 %
INDUSTRIALSECTOR
ELECTRICMOTORSSECTOR
RESEARCH ANDDEVELOPMENT
SECTOR(OTHER SECTOR)
HYDRAULICSECTOR
* Non consolidated companies
NLBCorporation Inc.
93,3 %
INTERPUMPGROUP S.p.A.
WUXIINTERPUMP WEIFU
HYDRAULICSCompany Ltd
65 %
WUXI WEIFUCHINA-ITALY
Company Ltd*20 %
OLEODINAMICAPANNI S.r.l.
100 %
MODENFLEXHYDRAULICS S.r.l.
100 %
IKOHYDRAULICS S.r.l.
(winding-up)100 %
COVER S.r.l.100 %
CONTARINILEOPOLDO S.r.l.
100 %
TEKNOVA S.r.l.(winding-up)
100%
H.S. PENTAAFRICA Pty Ltd*
52 %
COPMA 2000S.p.A.*
23,15 %
UNIDROCONTARINI Sarl
90 %
GOLFHYDROSYSTEM
Odd90 %
OTHER SECTOR
COPAHYDROSYSTEM
Odd90 %
H.S. PENTA S.p.A.100 %
INTERPUMP Group’s Structure
9
3.
2009 was characterised by a severe credit crisis on a scalehitherto never experienced in the modern economic world.The mechanical engineering sector has been one of themost affected, as reported also by trade associations, witha fall in sales of 30/40% peaking at more than 60%.
In a year that was characterised by a situation of significantshrinkage of markets and financial resources available fromthe banking industry, priority was necessarily awarded tofinancial management. Free cash flow generated after thechange in working capital and expenditure was € 63.1million, almost three times the figure recorded in 2008.
This result has been achieved thanks to a policy aimed atlimiting working capital, in addition to the natural fall due tothe downturn in sales. Net liquidity generated by the reductionof working capital was € 44.7 million, € 36.3 million ofwhich due to the reduction of stock inventories. It shouldfurther be noted that, against a 28.3% fall in sales, purchasesdecreased by 44.4% on an equal consolidation basis. Thefact that this reduction was far superior to the shrinkageof sales is explained by the need to optimise financialmanagement.
A similar level of attention was awarded to the managementof receivables, resisting the temptation to grant longerpayment terms to customers in order to boost sales, in theconviction that the drop in sales reflected a physiologicalmarket situation that could not and should not be contrastedby promotional actions that would only lead to a lowering ofthe overall profitability of the Group. Simultaneously , theutmost efforts were directed towards collecting amountsdue in the agreed times. The two actions together made itpossible to keep average collection days substantiallyunchanged, on an equal consolidation basis, with a positiveimpact on the generation of liquidity (+29.0 million euro).
The same philosophy was applied in the application ofstringent controls over expenditure, allowing only the spendingconsidered strictly necessary for production activities; thismeasure had no impact on the Group's production potential,since our business does not call for high outlays and, anyway,for contingent reasons we had followed a policy of higherthan average expenditure over the past two years. Capitalexpenditure was € 8.1 million compared to the € 14.4million recorded in 2008.
Faced by the fall in sales and shrinkage of the order portfolio,since the end of 2008 the Group has been responding withactions aimed as cutting costs and restricting the level ofworking capital and expenditure.
Firstly, terms with suppliers were renegotiated; subsequently,labour costs were reduced by means of a reduction in thenumber of employees and the elimination of over time, theuse of residual staf f holidays and recourse to the state-subsidised CIG redundancy fund and, for foreign companies,to other agreements involving a reduction in working hours.From 1 May 2009 certain Group companies benefited fromsolidarity contracts aimed at further limiting payroll costs.Costs of outsourced work were also reduced by re-integratingvarious processes that had been contracted out previouslysolely with the aim of boosting production capacity , whilecosts for temporar y staf f were also cut as the Groupincreasingly opted for the services of its full time employees.Commercial and general expenses were also carefullycontrolled.Following these initiatives, the Group managed to maintaina high level of profitability despite the severity of the economicdownturn.
Against this wider economic backdrop, the Interpump Groupachieved the following results:- net revenues were € 342.9 million (-19.2% with respectto 2008 and -28.3% on an equal consolidation basis);
- EBITDA totalled € 46.9 million or 13.7% of sales (- 46.1%with respect to 2008 when this parameter totalled € 87.0million or 20.5% of sales); the reduction was significant,although cost curbing actions made it possible to achieveEBITDA totalling 13.7% of sales, which can be consideredto be a positive result against the background of the radicalcontraction of the reference markets;
- free cash flow was € 63.1 million, compared to € 22.1 million in 2008;
- net earnings totalled € 14.0 million (4.1% of sales), compared to the € 40.2 million realised in 2008.
On 4 November 2009 the Board of Directors, delegatedfor this purpose by the Shareholders' Meeting on 26 August2009, decided to increase the share capital, with asubscription issue and divisibly , for a maximum nominalamount of € 10.4 million, in addition to € 39.4 million byway of a premium, through the issue of a maximum of19,915,680 shares, to be offered in option to shareholdersin the ratio of 40 shares for every 147 shares held, at anoffering price per share of € 2.50, of which € 1.98 by wayof a premium. The Board also established:
(1) the maximum number of warrants to be combined withthe Shares at 19,915,680, and the relative free combination ratio of 1 Warrant for 1 Share;
(2) that, without prejudice to the contents of the WarrantsRegulatory Code concerning any additional exercise periods and/or periods of suspension of the exercise right, the Warrants can be exercised on all trading daysin the month of October in 2010, 2011 and 2012;
(3) the maximum number of Conversion Shares at 12,239,845, and the relative exercise ratio as 59 Conversion Shares for each 96 Warrants exercised.
(4) the subscription price of each Conversion Share as:a. € 4.50, of which € 3.98 by way of a premium, for
Warrants exercised on all trading days in the monthof October 2010;
b. € 4.80, of which € 4.28 by way of a premium, for Warrants exercised on all trading days in the monthof October 2011;
c. € 5.10, of which € 4.58 by way of a premium, for Warrants exercised on all trading days in the monthof October 2012;
The increase in share capital was concluded with thesubscription of 19,915,160 shares (99.99%) for€ 49,787,900 including the premium.
Following the increase in capital the share capital isrepresented by 96,766,004 ordinary shares with a nominalvalue of € 0.52, for a total amount of € 50,318,322.08.
11
Financial highl ights of the Interpump Group
Main events occurring in the year
4.
Consolidated net revenues
Foreign sales
EBITDA (Earnings before interest, tax,depreciation and amortization)
Consolidated operating profit
Operating profit %
Consolidated net profit
Cash flow from operations
Net debt
Consolidated shareholders' equity
Debt/Equity ratio
Net expenditure for the year in tangibleand intangible fixed assets
Average number of employees
ROE
EPS -
Dividend per share -
ROCE
The results illustrated in the table above arebased on the consolidated accounts preparedin accordance with international accountingstandards (IFRS) for the years ending31/12/2004 up to and including31/12/2009, whilst figures for the otheryears are based on consolidated accountsprepared according to Italian accountingstandards.
EBITDA %
The Information Prospectus is published on the website at www.interpumpgroup.it.The increase in share capital and the increase in capitalserving the warrants were carried out with the specific aimof rapidly providing the necessar y financial resources tosupport the Group's process of consolidation and development.Financial resources generated by these increases will helpto strengthen the economic solidity of the Group, with apositive impact on our rating.
12
ROE: (Net profit + amor tization, depreciation and write-downs of goodwill +minority interests) / Consolidated net equity. Adjustments to net profit weremade to statements prepared in accordance with Italian accounting standardsonly. For ROE measurement purposes, the net profit value for 2005 is net ofcapital gains on discontinued operations.
ROCE: Operating profit / (Consolidated shareholder's equity +Financialindebtedness - Treasury stock). In 2007 the denominators also included thepayment of an extraordinar y dividend for €/000 16,594. Adjustments oftreasury stock were only made to financial statements prepared in accordancewith Italian accounting standards.
EPS: (Earnings per share adjusted for the amor tization and write-down ofgoodwill). Adjustments to amortization, depreciation and write-downs of goodwillwere only made to financial statements prepared in accordance with Italianaccounting standards.Dividends refer to the year of formation of the distributed profit.* 0.200 of which extraordinary** 0.690 of which extraordinary*** 0.230 of which extraordinary(a) Including the debt for the acquisition of equity investments for € 16.4 million
in 2009 (€ 21.9 million in 2008) - see note on page 29
31/12/2005 /000
continuingoperations
331,608
74%
67,985
156,679
0.82
8,100
1,589
17.3%
20.2%
0.363
** 0.84
57,384
27,074
31,705
127,701
17.3%
60,488
11.4%
19,726
17,493
211,633
179,855
1.18
18,008
2,360
11.0%
15.4%
0.322
0.130
531,745
77,329
76%
501,721
79%
75,267
59,181
11.8%
14,253
35,474
205,616
173,797
1.18
19,527
2,363
15.7%
17.1%
0.315
0.120
411,673
72%
79,811
67,156
16.3%
19,016
59,289
177,087
162,007
1.09
18,714
2,198
20.4%
21.3%
0.366
0.087
67,552
15.9%
21,433
43,639
176,429
182,782
0.97
24,280
2,213
20.0%
20.3%
0.401
0.100
426,075
81,314
72%
492,939
76%
84,524
193,362
0.91
34,359
2,468
18.4%
20.4%
0.398
* 0.310
69,208
21,085
51,563
175,408
14.0%
31/12/2007 /000
432,195
79%
94,255
147,131
1.38
13,831
1,882
29.2%
23.5%
0.567
*** 0.430
82,231
42,913
44,698
186,173
19.0%
20.5% 14.5% 15.0% 19.4%19.1%17.1%21.8%
31/12/2006 /000
364,876
76%
79,144
155,888
0.88
13,066
1,617
26.6%
23.8%
0.542
0.180
69,715
41,592
37,876
137,464
19.1%
21.7%
31/12/2004/000
31/12/2003/000
31/12/2002/000
31/12/2001/000
31/12/2000/000
424,513
80%
86,986
177,951
1.28
18,793
2,036
22.6%
18.6%
0.545
75,666
40,161
38,921
(a) 228,264
17.8 %
20.5%
-
31/12/2008 /000
342,924
79%
46,856
242,796
0.83
12,484
2,427
5.8%
6.6%
0.187
29,194
13,980
69,872
(a) 201,833
8.5 %
13.7%
-
31/12/2009 /000
13
Financial highl ights of the Interpump Group4.
EBITDA (Euro /milions)Net revenues (Euro/milions)
Cash Flow from operations (Euro /milions) Dividends (Euro)
The graphic shows only the ordinary dividends.In addiction the compny has distributed special dividends:0.439 Euro in 1999, 0.200 Euro in 2002,0.690 Euro in 2005 and 0.230 Euro in 2007.
‘00 ‘01 ‘02 ‘03 ‘04 ‘0579
.8
81.3 84
.5
75.3
77.3
68.0
‘00 ‘01 ‘02 ‘03 ‘04 ‘05
411.
7 426.
1
492.
9
501.
7
531.
7
331.
6
‘06
79.1
‘06
364.
9
‘00 ‘01 ‘02 ‘03 ‘04 ‘05
59.3
43.6 51
.6
35.5
17.5 31
.7
‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05
0.07
7
0.08
7
0.10
0 0.11
0
0.12
0
0.13
0
0.15
0
‘06
0.18
0
‘06
37.9
* *
*
* Continuing operations
* Continuing operations * Continuing operations
‘07
432.
2
‘07
44.7
‘07
94.3
‘07
0.20
0
‘08
424.
5
‘08
87.0
‘08
38.9
‘09
342.
9
‘09
46.9
‘09
70.0
14
RESULTS 2009
( /000)
ASSETS
Current assetsCash and cash equivalentsTrade receivablesInventoriesTax receivablesDerivative financial instrumentsAssets held for saleOther current assetsTotal current assets
LIABILITIESCurrent liabilitiesTrade payablesPayables to banksInterest-bearing financial payables (current portion)Derivative financial instrumentsTaxes payableOther current liabilitiesProvisions for risks and chargesTotal current liabilities
Non-current liabilitiesInterest-bearing financial payablesLiabilities for employee benefits
Deferred tax liabilitiesOther non-current liabilitiesProvisions for risks and chargesTotal non-current liabilities
Taxes payable
Total liabilities
SHAREHOLDERS’ EQUITYShare capitalLegal reserveShare premium reserveReserve for valuation of hedging derivatives at fair valueTranslation provisionOther reservesShareholders’ equity for the GroupMinority interestsTotale shareholders’ equityTotal shareholders’ equity and liabilities
Non-current assetsProperty, plant and equipmentGoodwillOther intangible assetsOther financial assetsTax receivablesDeferred tax assetsOther non-current assetsTotal non-current assetsTotal assets
31/12/2009
85,36176,731
100,7845,541
1024,5563,999
277,074
41,4759,569
169,3731,6235,329
19,8692,563
249,801
91,8929,955
9118,26911,8721,783
48,4148,747
65,548(1,122)
(20,171)135,332236,748
6,048
133,862383,663
242,796626,459
107,055
349,385
195,96925,6402,8733,270
14,153425
626,459
31/12/2008
49,72784,353
120,0318,279
3714,5564,117
271,434
54,23411,54793,891
3844,433
18,8982,028
185,415
150,6549,094
27313,52419,1011,556
37,4178,747
19,364230
(17,002)121,176169,932
8,019
194,202379,617
177,951557,568
72,491
286,134
174,61324,4023,584
58510,039
420
557,568
15
Consolidated balance sheets5 .
Net salesCost of salesGross industrial margin
Other net revenues
Distribution costsGeneral and administrative expenses
Other operating costs
Impairment of assets
Financial income
Financial chargesAdjustment of value of investments to the net equity methodProfit for the period before taxes
Income taxes
Consolidated profit for the period
Due to:
Parent company shareholdersSubsidiaries' minority shareholders
Consolidated profit for the period
Basic earnings per share (euro)
Diluted earnings per share (euro)
Ordinary profit before financial charges
342,924
(230,181)112,743
6,324
(35,383)
(53,174)(1,316)
-
2,986
(12,019)
(53)
20,108(6,128)
13,980
13,903
7713,980
0.187
0.185
29,194
( /000)
424,513
(265,957)158,556
6,025
(38,292)
(49,445)(1,178)
(1,692)
7,117
(20,307)
8
60,792(20,631)
40,161
39,228
93340,161
0.545
0.545
73,974
2009
Consolidated income statements
17
6.
2008
Consolidated profit (A)
Profit (Loss) on derivative financial instruments for the period
Minus: Adjustment for reclassification of profits (losses) to theincome statement
Minus: Adjustment for recognition of fair value to reservesin the prior year
Total
Profit (Loss) on derivative financial instruments for the period
Minus: Adjustment for reclassification of profits (losses) to theincome statementMinus: Adjustment for recognition of fair value to reservesin the prior year
Total
Profits (losses) recorded directly in equity (B)
Duet to:
Parent company shareholdersSubsidiaries' minority shareholders
Comprehensive consolidated profit
13,980
-
-
(24)
(221)
-
(245)
(4,700)
9,072
2089,280
( /000)
40,161
-
35
35
221
(80)
-
141
5,930
45,240
85146,091
Accounting of derivative financial instruments usedto hedge the interest rate risk recorded in accordancewith the cash flow hedging method:
Accounting of derivative financial instruments used tohedge the exchange rate risk recorded with the cashflow hedging method:
Profits (Losses) arising from the conversion to euro of the financial statements of foreign companies
Related taxes
(3,005)
677
5,790
(57)
Capital increase ancillary expenses
Profits (Losses) of companies valued according to the equity method (39) 21
Comprehensive consolidated profit (A) + (B) 9,280 46,091
(1,525) -
(1,525)
-(563)
2009
Comprehensive consolidated income statements
19
7.
2008
( /000)
Cash flow from operating activities
Pre-tax profit
Adjustments for non-cash items:Capital losses (Capital gains) from the saleof fixed assets
Amortization, depreciation and write-downsof tangible and intangible fixed assets
(Profit) losses from investments
Net liquidity generated by operating activities
Incorporation of the associated company Wuxi WeifuChina-Italy Company Ltd
Capital gains from sales of investments
Impairment of assets
Costs ascribed to the income statement relative to stockoptions that do not involve monetary outflows for the Group
Net change of risks provisions and allocations toliabilities for employee benefits
Net financial charges
Other
(Increase) decrease in trade receivablesand other current assets
(Increase) decrease in inventoriesIncrease (decrease) in trade payables andother current liabilities
Interest paid
Currency exchange gains realised
Income taxes paid
Cash flows from investment activitiesOutlay for the acquisition of 13.33% in NLB
Outlay for the acquisition of the Cylinders division companies,net of cash received and gross of treasury stock assigned
Proceeds from the sale of investments
Proceeds from sales of tangible fixed assets,net of income from leased assets
Received financial income
20,108
17,024
-
85353
(1,176)
9,033
(17)
44,078
32,717
36,336
(24,703)
(10,004)349
(9,179)
69,594
-
-
(1,522)
-
(9,974)
Outlay in cash for the acquisition of additionalshares in Hydroven S.r.l.
Increase in intangible fixed assets (1,996)
Portion of the capital increase paid by thesubsidiary minority shareholderCapital expenditure in property, plant and equipment,net of assets held for hire
(3,730)-
3,020
650
-
Outlays for tangible fixed assets held for hire (2,367)
Proceeds from hire of tangible fixed assets 2,089
Other 701
Net liquidity generated (used) by investing activities (82,716)
60,792
10,942
1,692
806(8)
(1,156)
13,190
82
84,439
7,575
(5,959)
(5,367)
(12,727)(211)
(29,662)
38,088
(9,232)
1,225
(121)
(947)
(14,196)
(2,679)
(300)
(282)
298
1,617
147
(1,756)
923
767
(35,705)
(71,387) (13,070)
20
2009 2008
( /000)
Cash flow offinancing activitiesOutlays for purchase of treasury stock
Disposal of treasury stock to support the acquisitionof equity investments in the Cylinders division
Disbursal (repayment) of shareholder loans
Loans granted/repaid to/bynon-consolidated subsidiary
Net liquidity obtained through (utilised in)financing activitiesNet increase (decrease) of cashand cash equivalents
Cash and cash equivalents of companies consolidatedfor the first time in the period
Disbursal (repayment) of loans
Exchange differences from the translationof the liquidity of companies in areas outside the EU
Cash and cash equivalents at the beginning of the period
13,553
(200)
-
50,704
37,582
(251)
281
75,792Cash and cash equivalents at the end of the period
Payment of financial leasing instalments (principal portion) (1,724)
Dividends paid (195)
(6,679)
(4,015)
38,180
Increase in share capital 49,9646,715
(155)
(158)
(27,162)
(24,779)
418
256
38,180
(296)
(31,408)
(8,371)
6,511
62,285
-
Consolidated cash f low statements
21
2009
8.
2008
( /000)
Balances as at 1 January 2008
Recording in the income statement of the fairvalue of the stock options assigned and exercisable
Portions relative to companies consolidated for the first time
Acquisition of an additional 12% of Hydroven S.r.l.
Disposal of investment in Refin S.r.l.
Balances at 31 December 2008
Distribution of dividends
Transfer of treasury stock to support the acquisitionsof Cylinders division companies
Balances at 31 December 2009
Purchase of treasury stock
Transfer of treasury stock to support the acquisition of Contarini Leopoldo S.r.l.
Purchase of treasury stock
Recording in the income statement of the fairvalue of the stock options assigned and exercisable
Comprehensive Profit (loss) for 2009
Minority shares of the newly acquired equity investments
Purchase of treasury stock
Capital increase in subsidiary
Comprehensive Profit (loss) for 2008
Distribution of dividends
Acquisition of minority shares(Hydroven and Oleodinamica Panni)
Capital increase, including non-opted rights sold and gross ofancillary expenses recorded in the comprehensive profit
22
ShareCapital
Legalreserve
Sharepremiumreserve
Otherreserves
Shareholders’equity forthe Group
Minorityinterests
Total
147,131
Translationprovision
Reserve forvaluationof hedgingderivatesat fair value
806
(119)
6,715
177,951
(6,679)
853
13,553
(197)
(3,854)
1,872
9,280
242,796
7,208
-
-
-
8,019
-
-
-
6,048
139,923
806
-
6,715
169,932
(6,679)
853
-
-
-
135,332
101,728
-
-
-
121,176
-
-
-
-
-
-
236,748
(22,889)
-
-
-
-
-
(17,002)
-
-
-
-
-
-
(20,171)
14,766
-
-
-
19,364
-
-
65,548
53
-
-
-
-
-
230
-
-
-
-
-
-
(1,122)
8,747
-
-
-
-
-
-
8,747
-
-
-
-
-
-
-
8,747
37,518
-
-
37,417
-
-
-
-
-
48,414
--- -
(315)
-
-
-
-
-
177
-
-
-
-
-
- -
- -
-
-
-
-
(3,298)
-
-
-
(14,381)
-
-
45,240
-
(433) (14,814)
685
(596)
423
46,091
-
13,553
50,017
208
- 50,017
- -
(585)
799
(1,125)
1,767
10,355
806
(2,124)
5,916
(5,554)
853
11,786
39,662
(563) (1,352)
5,887
(3,169)
39,176
14,156
(3,613)
(14,381)
(2,049) (4,758)
-
9,072
685
(596)
(119)
423
851
(197)
(3,854)
1,872
(3,613)
(4,758)
-
Changes in shareholders’ equity
23
9.
With respect to 2008, the Cylinders division following companies were consolidated: Oleodinamica Panni S.r.l., Cover S.r.l.,HS Penta S.p.A. (this latter for six months), all of which acquired in 2009. Contarini Leopoldo S.r .l. and subsidiaries areconsolidated for the full twelve months of 2009, while in 2008 they were consolidated for two months only . ModenflexHydraulics S.r.l. was consolidated in 2009 for the full period, while on 31 December 2008 it had been consolidated foronly five months because it had been acquired on 30 July 2008. IKO Hydraulics S.r .l. is consolidated for the full twelvemonths of 2009, while in 2008 it was consolidated for only one and a half months.
NET SALES
Net sales for 2009 amounted to € 342.9 million, down by 19.2% with respect to 2008, when the figure was € 424.5million (- 28.3% net of consolidation differences).
The breakdown of sales by business sector and geographical area is as follows:
-1.8% -20.1%Hydraulic Sector
-58.0%
-9.2%
-13.3%+3.5% -13.0%
-37.6%
-29.6%
-41.6%
-16.7%
-24.1%
Industrial Sector
Electric Motors Sector
Total
-34.0%
-24.9%
-10.7%
-
-16.1%
-1.3% -28.8%
+101.7%
-22.9%
-20.3%
-41.3%
-19.2%
2009/2008percentage change
PacificArea
TotalRest of the World
Italy Rest of Europe
North America
3,685 24,342Hydraulic Sector
1,875
29,386
149,69842,342 41,288
11,695
53,203
7,128
70,702
38,041Industrial Sector
Electric Motors Sector
Total
16,665
101,619
67,509
-
105,550
23,826 11,206
119
35,667
172,409
20,817
342,924
2009
Sales in the Hydraulic Sector were down by 13.3% (- 35.6 % on an equal consolidation basis). Net of the Cylinders Division,sales by European companies were down by 43.1% with respect to the figure for 2008. Sales by our US subsidiary Munciedropped by 26.1% in dollar -on-dollar terms; after conversion into euro the downturn was 22.0%. The Cylinders divisioncompanies were down by 51.2% with respect to 2008.On an equal consolidation basis , changes in the Hydraulic Sector and consolidated total were as follows:
Hydraulic Sector
Industrial Sector
Electric Motors Sector
Total
20083,751 30,453
4,459
32,358
172,69940,908 47,453
18,745
75,602
12,198
84,919
50,134
25,266
135,253
75,599
-
125,733
24,148 15,738
59
46,250
216,353
35,461
424,513
-23.2% -32.8%Hydraulic Sector
-11.7%
-35.6%-38.1% -48.0%
-36.8%
-24.4%
Total -37.2% -16.2% -31.3% -28.3%
2009/2008percentage change
PacificArea
TotalRest ofthe World
Italy Rest of Europe
North America
Directors’ remarks on performance in 2009
25
10.
PROFITABILITY
The cost of sales accounted for 67.1% of turnover (62.6% in 2008). Production costs, which totalled € 78.9 million (€83.2million in 2008, when the Cylinders Division company were only marginally included), accounted for 23.0% of sales (19.6%in 2008), while the purchase cost of raw materials and components sourced on the market, including changes in inventories,was €136.5 million on an equal consolidation basis, down by 25.3% with respect to the €182.7 million in 2008. On anequal consolidation basis, the incidence of purchase costs, including changes in inventories, was 44.8% compared to the43.0% of 2008. It should fur ther be noted that, in terms of absolute value, purchases decreased by 44.4% on an equalconsolidation basis - a reduction that was far superior to the shrinkage of sales due to the above-mentioned stock reductionpolicy aimed at optimising finance management. Production costs were down by 23.7% on an equal consolidation basis,against a background of a 28.3% shrinkage of sales.
On an equal consolidation basis, distribution costs decreased by 17.4% with respect to 2008, while the relative incidenceon sales rose by 1.4 percentage points.
General and administrative expenses fell by 8.5% with respect to 2008,on a like for like basis, while the relative incidenceon sales rose by 3.3 percentage points.
60,274High-pressure pumps
2,623
7,809
172,409
-18.8%Very high-pressure systems
Sheet metal drawing, blanking, and pressing
Cleaning machinery
Total
101,703 -20.0%
-28.3%
-31.6%
-20.3%
Sales of electric motors were recorded at € 20.8 million (- 41.3% compared to 2008).BRIC countries (Brazil, Russia, India and China) displayed a downturn of 41.7%.
The following table shows a breakdown of sales of the main product types in the four quar ters of 2009 compared to thefigures for the equivalent periods in 2008.
2009/000
2008/000
Growth/ Contraction
Turnover in the Industrial Sector was down by 20.3% at € 172.4 million. The following table gives a breakdown of IndustrialSector sales by product type:
74,200
3,656
11,411
216,353
127,086
Interpump Hydraulics (excluding Muncie and the Cylinders Division)
Muncie (in dollars)
Cylinders Division
Total Hydraulic sector*
Consolidated total*
1stquarter
2ndquarter
3rdquarter
4thquarter
High-pressure pumps
Very high-pressure systems
Total Industrial sectorElectric Motors Sector
-49.8%
-22.0%
-47.8%
-15.0%-27.6%
-11.9%
-20.3%
-35.9%
-19.6%
-53.7%
-34.4%
-55.3%
-25.1%-26.9%
-23.1%
-25.3%
-46.8%
-27.1%
-44.4%
-31.2%
-55.9%
-13.2%-14.4%
-24.5%
-21.7%
-44.5%
-20.0%
-13.9%
-13.3%
-44.9%
+2.8%-0.9%
-20.1%
-12.7%
-38.6%
-8.4%
26
* = Exclusively for the above data, the comparison is in relation to a non-uniform scope of consolidation, while all other comparis ons are uniform.
Analysis of the table leads to the following considerations:
- the fourth quarter shows a general improvement, although this is influenced to some extend by the comparison with thefourth quarter of 2008, which was already showing signs of a slowdown;
- Interpump Hydraulics (excluding Muncie and the Cylinders Division) continues to show a downturn, although to a lesser extent in the fourth quarter with respect to the first three quarters of the year;
- the cylinders division is the one that displays the most significant decline;
- in the third quarter of 2009, and even more so in the fourth quarter, high pressure pumps showed signs of recovery, especially in the US; this trend is confirmed also for Januar y 2010, when the recovery is appearing to gather strength;
- in contrast, ver y high-pressure systems showed signs of the crisis later than the other sectors.
Hydraulic Sector -55.2%14,992
32,867
(1,070)
67
Industrial Sector
Electric Motors Sector
Other Revenues Sector
Total 46,856
-38.3%
n.s.
n.s.
-46.1%
10.0%
19.0%
-4.9%
n.s.
13.7%
% ontotal
sales*
n.s. = not significant* = Total sales also include sales to other group companies, while the sales analysed previously are exclusively those external to the Group .Therefore, for the purposes of comparability the percentage is calculated on total sales rather than the sales shown earlier .
% ontotal
sales*
The cost of labour was € 86.6 million (€ 87.4 million in 2008) for an average of 2,427 employees (2,036 employees in2008). The increase in the average number of employees is due, in the number of 455, to consolidation of the CylindersDivision companies, which were not consolidated in 2008. In this figure the employees of HS Penta are counted only forthe six months for which the company was consolidated and hence by half. The headcount at 31 December 2009 was2,482, of whom 560 employed in the Cylinders Division. Payroll costs were down by 14.1% on an equal consolidation basis,due both to a decrease of 65 in the average number of employees (-3.2%) and a reduction in the average per capita cost,which fell by 11.3%. The change in the number of employees is composed as follows: -33 in Europe, -54 in the US and +23 in the Rest of the World (China, India and Chile). The fall in per capita costs is mainly due, for Italian companies, to theelimination of overtime, use of the redundancy fund (CIG) and residual staf f holidays for 200,772 hours, use of solidaritycontracts for 140,933 hours, and, for foreign companies, to other agreements involving a reduction in working hours. Thisresulted in a total saving of approximately € 9.8 million in the cost of labour , which increases to € 15.6 million whenconsidering also companies that were not yet consolidated in 2008 for the entire twelve months of 2009. The reductionin payroll costs in the Group's Italian companies was 17.3% on an equal consolidation basis. Payroll costs in other Europeancompanies decreased by 14.1%, due entirely to a decrease in per capita costs, while US companies recorded a dollar -on-dollar reduction in payroll costs of 14.9% (-10.3% after conversion into euro).
EBIT totalled € 29.2 million or 8.5% of sales, compared to the € 75.7 million in 2008 (17.8% of sales), reflecting a decreaseof 61.4%. On an equal consolidation basis EBIT was € 32.0 million (10.5% of sales) with a decrease of 57.8%. 2009 EBITbenefited from a capital gain of € 1.3 million, recorded under Other revenues and income and generated by the sale of abuilding of the Hydraulic Sector, while a capital gain of € 0.9 million was recorded in 2008 relative to the disposal of aninvestment. Adjusting 2009 and 2008 values for these non-recurring events, EBIT would have dropped by 59.0% on anequal consolidation basis. The Cylinders Division recorded a € 2.8 million operating loss.
EBITDA totalled € 46.9 million, or 13.7% of sales, compared to the € 87.0 million in 2008, equivalent to 20.5% of sales(-46.1% and -49.4% on an equal consolidation basis and net of the non-recurring events mentioned above). The CylindersDivision recorded EBITDA of € 2.0 million (5.2% of sales). The following table shows EBITDA for each business sector:
2009/000
2008/000
Growth/Contraction
33,436
53,226
262
62
86,986
19.4%
24.6%
0.7%
n.s.
20.5%
Hydraulic Sector EBITDA totalled € 13.0 million on an equal consolidation basis, (11.7% of sales), down by 61.2 % withrespect to 2008.
At € 7.8 million, net financial charges were 36.7% lower than the € 12.3 million recorded in 2008, due to the ef fect ofthe reduction in interest rates.
The tax rate was 30.5%, thanks to recording of deferred tax assets for € 4.1 million, to be offset against the € 0.3 millionincrease in taxes for the period due to accounting of substitute tax. The recognition of deferred tax assets is due to therevaluation of several buildings carried out in the individual financial statements drafted in compliance with Italian accountingstandards, said revaluation being omitted in the consolidated financial statements prepared in accordance with internationalaccounting standards (IFRS). Moreover, 2009 taxes reflect the € 1.7 million of derecognised deferred tax assets (€ 0.7million), and unrecognised deferred taxes on fiscal losses of three companies (€ 1.0 million). Net of these two non-recurringevents the tax rate would have been 40.8%. In 2008 the tax rate was 33.9% including the € 1.5 million tax saving, net ofsubstitute tax, due to the release of several prior deductions applied exclusively in the statement of income. Net of this non-recurring event the tax rate for 2008 would have been 36.4%. The increase recorded in 2009 is mainly due to an increasein IRAP (regional production tax) due to the higher incidence on operating profit of personnel costs and financial charges,which are undeductible from IRAP tax liabilities.
2009 closes with net profit of €/000 13,980 or 4.1% of sales (net profit for 2008 was €/000 40,161), reflectingdownturn of 65.2%. Basic earnings per share were € 0.187 (€ 0.545 in 2008). In 2009 no atypical and/or unusualtransactions were carried out, excluding the previously mentioned acquisition of companies of the Cylinders Division, thecapital gain realised by the sale of a building, and recognition of deferred tax assets following the elimination of the revaluationdescribed above.
27
Directors’ remarks on performance in 200910.
The change in net debt can be broken down as follows:
(206,365)
233
Opening net financial position
Net opening financial position of newly consolidated companies
Capital expenditure in tangible fixed assets
Proceeds from sales of tangible fixed assets
Received financial income
(9,974)
3,020
(1,996)
650
Other
Free cash flow
Acquisition of further shares in NLB
Outlays for acquisition of minority shares in subsidiaries
Incorporation of an associated company
Outlays for the purchase of the Cylinder Division inclusive ofnet debt received and net of treasury stock assignedProceeds from the disposal of the investment in Refin includingtransferred loansPayment to hedge the loss due to the sale of RP-ITCO
Transfer of treasury stock to settle the loan granted by IKO Hydraulics S.r.l. shareholders.
(3,730)
-
-
(140)
(6,679)
163
Capital expenditure in development costsand other intangible fixed assets
Outlays for purchase of treasury stock
Portion of the capital increase paid by the minority shareholder ofa subsidiary -
Loans granted/repaid to/by non-consolidated subsidiaries
Capital increase, net of ancillary expenses paidand including rights sold
-
49,964Dividends paid
Cash flow generated (used)
Exchange rate differences
20,709
(50)
Net financial position at end of period (185,473)
2009/000
2008/000
1,842
63,136
-
(81,810)
Cash and cash equivalents
Payables to banks
Interest-bearing financial payables (current portion)
Interest-bearing financial payables (non-current portion)
Total
85,361
(9,569)
(169,373)
(91,892)
(185,473)
The net cash position is composed as follows:
(206,132)
(195)
25,244Cash flow from operations
44,687Liquidity generated (absorbed) by commercial working capital
(337)Liquidity generated (absorbed) by other current assets and liabilities
Net liquidity generated by operating activities 69,594
(174,956)
388
(14,196)
298
(2,679)
1,617
(300)
(282)
3,833
-
(8,371)
-
147
(158)
-
(31,927)
130
(206,365)
(996)
22,132
(9,232)
(8,288)
(174,568)
(31,408)
41,839
(831)
(2,920)
38,088
31/12/2009 /000
31/12/2008 /000
01/01/2008 /000
70,695
(8,410)
(64,617)
(172,624)
(174,956)
49,727
(11,547)
(93,904)
(150,641)
(206,365)
CASH FLOW
28
The net liquidity generated by operating activities totalled € 69.9 million (€ 38.9 million in 2008) hence with an increaseof 179%, thanks to the reduction of working capital, which generated liquidity of € 44.7 million (working capital absorbedliquidity of € 0.8 million in 2008). Free cash flow was € 63.1 million, almost three times higher than the € 22.1 millionof 2008.
Net financial indebtedness decreased from € 206.4 million at 31 December 2008 to € 185.5 million at 31 December2009, due to the generation of € 61.3 million of free cash flow, a capital increase of € 50.0 million, partially offset by capitalexpenditure relative to the acquisition of companies forming par t of the Cylinders Division, and the acquisition of treasur ystock.
The Group also has contractual commitments for the purchase of residual shareholdings in subsidiaries totalling €16.4million (€ 21.9 million at 31/12/2008). In target company acquisition processes it is Group strategy to purchase majoritypackages, signing purchase commitments for the residual stakes, the price of which is set in accordance with the resultsthat the company is able to achieve in the subsequent years, thus on the one hand guaranteeing the continuation in thecompany of the historic management and on the other hand maximising the goal of increasing profitability .
The situation was as follows on 31 December:
The debt for the acquisition of the residual stake in NLB will be paid within the first half of 2010. The decrease of payableswith respect to 31 December 2008 is due to worsening of NLB's results, on which the sale price is based.
In April 2008 a commitment was entered into for the acquisition of an additional 12% in Hydroven S.r.l., to be paid partlyin cash and par tly with an extended payment in fixed instalments. The final por tion will be paid in 2012.
Debts for deferred payables of the Cylinders Division refer to the deferred payment of a por tion of the price for HS Penta.Of these amounts, €/000 3,001, in addition to the relative interest calculated at the 1 month Euribor rate, must be paidbefore 31/12/2010 in cash or by the transfer of Interpump Group treasur y shares, in accordance with the preferredcourse of action of Interpump Group S.p.A. The remaining € 120 thousand, relative to debts due to acquisitions made byHS Penta in companies merged by incorporation into the holding company , must be paid before the end of May 2010.
Commitments for the acquisition of stakes in Interpump Hydraulics International S.p.A. refer to the value of the put optionawarded to Contarini, Oleodinamica Panni, Cover and HS Penta shareholders. In line with contractual agreements, on 30July the shareholders of Contarini, Panni, Cover and HS Penta transferred the remaining stakes they hold in the companiesto Interpump Hydraulics International S.r.l. (subsequently transformed into a joint stock company) receiving shares in thislatter company in exchange. From April 2012 the new shareholders of Interpump Hydraulics International S.p.A. will bepermitted to sell their shares to Interpump Hydraulics S.p.A. for a price established in accordance with Interpump HydraulicsInternational’s results of the two previous years. We therefore assessed this commitment on the basis of a business planand the stakes that ex Contarini, Panni, Cover and HS Penta shareholders purchased in Interpump Hydraulics InternationalS.p.A. on 30 July 2009. We also hypothesised, merely for calculation purposes, the situation wherein ex Contarini, Panni,Cover and HS Penta shareholders exercise their options in the f irst possible year of exercise.
Debts for the acquisition of investments were discounted to current value taking into account the time factor. The decreasewith respect to 31 December 2008 is due to worsening of the results of the business plans underpinning the determinationof the options price.
Further to the radical drop in volumes which led to the near halving of EBITDA, the Net financial indebtedness / EBITDAcovenant was exceeded in relation to loans utilised in the total amount of € 92.7 million and not yet utilised for € 69 million,and in the amount of $3.5 million and $6.5 million not yet utilised. Said failure to comply with the covenant constitutes justcause for the termination of the contracts, triggering the obligation to repay the loans received. Negotiations are currentlyunder way with the banks to revise the terms of the loans in question. The Group considers that the ef fect of said re-negotiation will result solely in an increase in financial expenses.
At 31 December 2009 the Group had cash on hand of € 85.4 million (of which € 33.3 million used in Januar y 2010 torepay maturing loans) and € 193.4 million relative to unutilised lines of credit. Confirming the Group's high credit ratingwithin the banking industr y, in the initial months of 2010 a fur ther two loans were obtained for a total of € 50 million.
Commitments for the purchase of residual stakes in NLB
Debt for acquisition of residual stakes in Hydroven
Debts for deferred payables of Cylinder division companies
Commitment to exercise the options to sell on the stakesin Interpump Hydraulics International S.p.A.
Total
2,845
595
3,128
9,792
16,360
31/12/2009 /000
31/12/2008 /000
4,217
774
3,795
13,113
21,899
29
Directors’ remarks on performance in 200910.
76,731
100,784
14,198
Trade receivables
Net inventories
Other current assets
Accounts payable to suppliers (41,475)
Short-term tax payables
Short-term portion for provisions for risks and charges
Net working capital
(5,329)
(2,563)
(15,310)
127,036
GROUP SITUATION OF ASSETS AND LIABILITIES
The following is a reclassified balance sheet in relation to cash flows obtained/used:
Net intangible and tangible fixed assets
Goodwill
Other financial fixed assets
Other non-current assets
Liabilities for employee benefits
Medium/long-term portion for provisions for risks and chargesOther medium/long-term liabilities
Total net fixed assets
Financed by:
Shareholders' equity for the Group
Minority interests
17,848
(9,955)
(20,054)
317,593
444,629
236,748
6,048
Other short-term liabilities
Total capital employed
Total shareholders' equity
Cash and cash equivalents
242,796
(85,361)
Payables to banks
Short-term interest-bearing financial payables
9,569
169,373
Short-term payable for purchase of investments 6,182
Total short-term financial payables
Medium/long-term interest-bearing financial payables
99,763
91,892
Medium/long-term payable for purchase of investments
Total medium/long-term financial payables10,178
102,070
Total sources of financing 444,629
132,695
195,969
2,873
(1,783)
%
28.6
71.4
100.0
54.6
22.4
100.0
23.0
The equity structure of Interpump Group is balanced with a leverage index of 0.83 (1.28 at 31 December 2008).The leverage index is calculated as the ratio between the shor t/medium/long-term financial payables and shareholders'equity inclusive of minority interests.
Capital employed increased from € 406.2 million at 31 December 2008 to € 444.6 million at 31 December 2009.The increase is essentially due to the previously illustrated acquisitions.
ROCE stood at 6.6% (18.6% in 2008).
ROE stood at 5.8% (22.6% in 2008).
/00031/12/2009
/00031/12/2008%
35.9
64.1
100.0
43.8
14.7
100.0
41.5
84,353
120,031
17,323
(54,234)
(4,433)
(2,028)
(15,277)
145,735
11,044
(9,094)
(15,004)
260,480
406,215
169,932
8,019
177,951
(49,727)
11,547
93,891
4,005
59,716
150,654
17,894
168,548
406,215
96,893
174,613
3,584
(1,556)
30
Milan, 16 March 2010
For the Board of DirectorsMr. Giovanni CavalliniChairman
CAPITAL EXPENDITURE
Capital expenditure in property, plant and equipment totalled € 10.5 million (€ 16.2 million in 2008). Note that the companiesbelonging to the very-high pressure systems segment classify machinery manufactured and hired out to customers undertangible fixed assets (€ 2.4 million at 31/12/2009 and € 1.8 million at 31/12/2008). Net of these latter amounts,capital expenditure stood at € 8.1 million in 2009 (€ 14.4 million at 31/12/2008) and mainly refers to the normal renewaland modernisation of plant, machinery and equipment. We draw your attention to the fact that in 2008 the building in whichMuncie Power Products Inc. has its registered of fice was purchased for a total of € 2.3 million. The reduction of capitalexpenditure with respect to 2008 is due to the strategy aimed at restricting spending in order to optimise financialmanagement at a time of considerable uncertainty. The difference with respect to the expenditure recorded in the cash flowstatement is due to the dynamics of payments..
RESEARCH AND DEVELOPMENT
The Research Centre (Interpump Engineering S.r.l.), set up to centralise design and development of new products in thehigh pressure, hydraulic pumps and hydraulic components division, completed six new versions of high pressure pumps,three versions of hydraulic pumps, and new accessories in 2009. A number of projects are currently under way to designnew high and very high pressure pumps and hydraulic pumps.
Furthermore, Interpump Hydraulics carried our research and development in the Hydraulic Sector, Hammelmann and NLBconducted research into very high pressure pumps and systems, while in the electric motors sector research and developmentactivities were carried out by Unielectric.
Group strategy over the next few years will be focused on continuing with significant levels of investment in research anddevelopment in order to assure renewed impetus to well structured growth. Research costs have been capitalized inaccordance with their multi-annual usefulness. The development costs capitalised in 2009 amount to €/000 1,603 (€/0002,010 at 31/12/2008), while costs ascribed to the income statement amount to €/000 5,965 (€/000 6,171 at31/12/2008).
31
Directors’ remarks on performance in 200910.
At 31 December 2009 the Interpump Group is made up of a structure headed by Interpump Group S.p.A., which has directand indirect controlling stakes in the capital of 36 companies operating in the three business sectors (Hydraulic, Industrialand Electric Motors). The Parent company, with registered offices in Sant'Ilario d'Enza, produces high and very-high-pressureplunger pumps for water and high-pressure washers, both of which are classified under the Industrial Sector. The main dataof the consolidated subsidiaries is presented in the table below , whereas for the Parent Company this can be taken fromthe financial statements attached hereto.Relations with subsidiaries are conducted on arm's length terms and are describedin detail above; likewise for relations with related par ties, which are described in the notes to the consolidated financialstatements.
100%Muncie Power Products Inc. 784 Muncie - USA
Controllinginterest Registered Office
General Pump Companies Inc.
Hammelmann Maschinenfabrik GmbH
Unielectric S.p.A.
Hydroven S.r.l.
Hydrometal S.r.l.
Hammelmann Australia Pty Ltd
A.V.I. S.r.l.
Sit S.p.A.
Wuxi Interpump Weifu Hydraulics Company Limited
Hydrocar Chile S.A.
Interpump Hydraulics France S.a.r.l.
Contarini Leopoldo S.r.l.
Interpump Hydraulics International S.p.A.
Hammelmann S.L.
General Technology S.r.l.
Unidro S.a.r.l.
Interpump Engineering S.r.l.
25
1,456
1,854
200
130
472
10
37
2,095
105
76
14,162
46.8
1,038
100
76
8
100%
70%
100%
100%
100%
100%
51%
60%
65%
65%
99.77%
70.61%
70.61%
100%
100%
100%
63.55%
Minneapolis - USA
Oelde - Germany
Sant’Ilario d’Enza (RE)
Tezze sul Brenta (VI)
Sorbara di Bomporto (MO)
Melbourne - Australia
Varedo (MI)
Sant’Ilario d’Enza (RE)
Wuxi - China
Santiago - Chile
Peltre-Metz - France
Lugo - (RA)
Nonantola - (MO)
Zaragoza - Spain
Reggio Emilia
Reggio Emilia
Barby - France
* = two months turnover in 2008 - purchased on 30/10/2008 - **= five months turnover in 2008 - purchased on 31/07/2008
100%Interpump Hydraulics S.p.A. 2,632 Nonantola (MO)
Hammelmann Corporation Inc. 39 100% Dayton - USA
Interpump Hydraulics India Private Ltd 34 100% Hosur - India
Fully consolidated companies
Hydrocar Roma S.r.l. 10 70% Modena
NLB Corporation Inc. 12 93.3% Detroit - USA
Hammelmann Pump System Co.Ltd 871 90% Tianjin - China
Copa Hydrosystem Odd 2.5 63.55% Trojan - Bulgaria
Modenflex Hydraulics S.r.l. 10 70.61% Modena
IKO Hydraulics S.r.l. (winding up) 10 70.61% Forlì
Teknova S.r.l. (winding up) 362 100% Reggio Emilia
Companies not fully consolidated
Syscam Gestiòn Integrada S.A.
HS Penta Africa Pty Ltd 351
27
36.7%
36%
Johannesburg - South Africa
Conchalì - Chile
General Pump China Inc. 111 100% Ningbo - China
Wuxi Weifu China-Italy Company Ltd 1,409 13% Wuxi - China
ShareCapital
/000
HS Penta S.p.A.**** 4,244 70.61% Faenza - (RA)
Cover S.r.l. 41 70.61% Gazzo Veronese - (VR)
Oleodinamica Panni S.r.l. 2,000 70.61% Tezze sul Brenta - (VI)
Golf Hydrosystem Odd 2.5 63.55% Sofia - Bulgaria
Copma 2000 S.p.A. 2,600 16% Castel Bolognese - (RA)
The controlling interest is composed, for the 1st level subsidiaries, of the percentage of shares and, for the 2nd level subsidiaries,of the result of the 1st level subsidiary controlling interest multiplied by the 2nd level subsidiary controlling interest.32
271
Averagenumber ofemployees
2009
280
146
59
40
24
11
17
40
60
29
25
-
117
5
23
16
8
43.6
53.2
21.7
24.1
8.3
6.5
7.2
5.4
4.3
4.6
2.9
5.0
-
15.2
1.4
4.2
2.7
2.5
Power take-offs and hydraulic pumps (Hydraulic Sector)
Main activity
Distributor of high pressure pumps (Industrial Sector)
Very high pressure systems and pumps (Industrial Sector)
Windings and electric motors (Electric Motors Sector)
Sales of complementary products for industrial vehicles, hydraulic pumpsand power takeoffs (Hydraulic Sector)Sales of complementary products for industrial vehicles, hydraulic pumpsand power takeoffs (Hydraulic Sector)
Sale of very high pressure systems and pumps (Industrial Sector)Sales of complementary products for industrial vehicles, hydraulic pumpsand power takeoffs (Hydraulic Sector)
Sheet metal drawing, blanking, and pressing (Industrial Sector)
Sales of hydraulic pumps and power takeoffs (Hydraulic Sector)
Sales of hydraulic pumps and power takeoffs and valves (Hydraulic Sector)
Sales of hydraulic pumps and power takeoffs (Hydraulic Sector)
Production and sale of hydraulic cylinders (Hydraulic Sector)
Cylinders Pole Holdings (Hydraulic Sector)
Sales of very high pressure systems and pumps (Industrial Sector)
Accessories for high-pressure pumps and high-pressure washers (Industrial Sector)
Research and development (Other Revenues Sector)
Production and sale of hydraulic cylinders (Hydraulic Sector)
***= one and a half months turnover in 2008 - purchased on 12/11/2008 - ****= six months turnover in 2009 - purchased on 07/07/2009
30536.3Power take-offs and hydraulic pumps (Hydraulic Sector)
217.7Sale of very high pressure systems and pumps (Industrial Sector)
Production and sales of power take offs andhydraulic pumps (Hydraulic Sector) 192.0
31.6Sales of hydraulic pumps and power takeoffs (Hydraulic Sector)
18039.3Very high pressure systems and pumps (Industrial Sector)
131.9Sales of very high pressure systems and pumps (Industrial Sector)
430.8Production and sale of hydraulic cylinders (Hydraulic Sector)
315.3Production and sale of hydraulic cylinders (Hydraulic Sector)
91.1Production and sale of hydraulic cylinders (Hydraulic Sector)
--Not operative (Other Revenues Sector)
Production and sale of hydraulic cylinders (Hydraulic Sector)
Sales of hydraulic pumps and power takeoffs (Hydraulic Sector)
Sales of components (Industrial Sector)
Production of gears for hydraulic pumps and power take-offs (Hydraulic Sector)
Sales/millions
31/12/2009
Sales/millions
31/12/2008
Averagenumber ofemployees
2008
1647.6Production and sale of hydraulic cylinders (Hydraulic Sector)
566.6Production and sale of hydraulic cylinders (Hydraulic Sector)
1199.2Production and sale of hydraulic cylinders (Hydraulic Sector)
350.3Production and sale of hydraulic cylinders (Hydraulic Sector)
Production and sale of hydraulic cranes (Hydraulic Sector)
288
281
152
65
40
26
11
18
32
51
29
27
-
118
6
25
16
9
308
23
14
3
192
13
44
32
13
-
-
-
-
-
56.1
69.7
37.3
27.1
12.3
10.6
7.4
8.2
7.3
6.5
4.1
7.1
-
*3.7
2.3
5.4
2.7
*0.4
73.0
7.9
3.2
2.2
48.2
1.3
*0.3
**2.4
***0.1
-
-
-
-
-
Companies in the Group
33
11.
The business sectors are identified as "primar y sectors", while the geographical sectors are defined as "secondar y".Information on business sectors reflects the Group internal reporting structure.
The value of components and products transferred between sectors is generally the ef fective sales price between Groupcompanies and corresponds to the best customer sale prices.
Sector information includes directly attributable costs and costs allocated on the basis of reasonable estimates.
Business Sectors - Primary
The Group is composed of the following business sectors:
Hydraulic Sector
Mainly composed of high and very high-pressure pumps and pumping systems used in a wide range of industrial sectorsfor the conveyance of fluids. High-pressure plunger pumps are the main component of professional high-pressure washers.These pumps are also utilised for a broad range of industrial applications including car wash installations, forced lubricationsystems for machine tools, and inverse osmosis systems for water desalination plants. Very high-pressure pumps andsystems are used for cleaning surfaces, ships, various types of pipes, and also for removing machining burr, cutting andremoving cement, asphalt, and paint coatings from stone, cement and metal surfaces, and for cutting solid materials.Marginally, this sector also includes operations of drawing, shearing and pressing sheet metal and the manufacture andsale of cleaning machinery.
Composed of the manufacture and sale of electric motors and windings mainly used as components of high-pressurewashers, compressors, and by the building industry for gate openers.
Industrial Sector
Electric Motors Sector
Includes the production and sale of power take-offs and other hydraulic components. Power take-offs are devices designedto transmit the engine power of an industrial vehicle to other hydraulic components, and are installed on the vehicles'gearbox. Hydraulic cylinders are components of the industrial vehicles hydraulic system and utilised in a wide range ofapplications depending on the type. Front-end and underbody cylinders are utilised mainly on industrial vehicles in theconstruction sector, telescopic cylinders are utilised by urban waste compactor vehicles, while other cylinder types are usedin the drilling industry, on truck cranes, and in the marine, earthmoving and agricultural sectors. Other hydraulic productsare composed of the various components responsible for allowing the execution of special functions, such as lifting of dumpertruck bodies, operating truck-mounted cranes and cement mixers, and so forth. The other hydraulic components are mainlycomposed of hydraulic pumps, hydraulic power units, and valves.
35
Business sector information12.
Net sales external to the Group
Sales between sectors
Total net sales
% on net sales
Cost of sales
Gross industrial margin
Other net revenues
Distribution costs
Impairment of assets
Other operating costs
Ordinary profit before financial charges
% on net sales
Financial income
Dividends
Adjustment of investments carried at equity
Profit for the period before taxes
Income taxes
Consolidated profit for the periodDue to:
Parent company shareholders
Subsidiaries minority shareholders
Consolidated profit for the period
General and administrative expenses
172,409
339
172,748
(108,084)
64,664
37.4%
2,804
(18,173)
-
(386)
25,177
(37)
28,773
14.6%
(23,732)
149,698
149,699
(102,480)
47,219
31.5%
3,662
(16,563)
(27,940)
(907)
5,471
(16)
2,836
3.7%
-
Hydraulic
2009 2008
Industrial
2009 2008
Financial charges
Further information required by IFRS 8
Amortization, depreciation and write-downs
Other non-monetary costs
216,353
392
216,745
(127,388)
89,357
41.2%
4,072
(21,208)
(613)
(492)
46,104
(39)
52,303
21.3%
(25,012)
172,699
-
172,699
(106,323)
66,376
38.4%
1,978
(16,141)
(22,434)
(636)
28,064
47
26,998
16.3%
(1,079)
1
1,030
(3,649)
-
3,150
(4,263)
-
2,098
(8,465)
10,000
3,960
(15,840)
18,118
882
3,718
3,153
565
3,718
9,327
1,621
(9,843)
17,155
16,343
812
17,155
5,200
947
(6,606)
22,167
22,227
(60)
22,167
7,247
1,339
(10,727)
41,576
41,481
95
41,576
6,917
1,133
See note in the Board of Director's Report concerning non-recurring events.
In 2009 other non recurring revenues totalled €/000 1,305 and are entirely referred to the Hydraulic Sector .
In 2008 other non-recurring revenues amount to €/000 947 and refer entirely to the Industrial Sector .
36
Interpump Group business sector information(amounts shown in €/000)
342,924
(230,181)
112,743
32.9%
6,324
(35,383)
-
(1,316)
29,194
(53)
8.5%
2,986
-
20,108
(6,128)
13,980
13,903
77
13,980
(53,174)
(3,934)
(3,934)
2,787
(1,147)
(343)
-
-
-
-
-
1,490
-
2,701
2,701
(1,610)
1,091
n.s.
20
-
-
46
-
39
n.s.
(1,063)
20,817
893
21,710
(20,794)
916
4.2%
181
(645)
-
(23)
(1,500)
-
(1,540)
-6.9%
(1,929)
2009 2008
Electric Motors
2009 2008
Other Revenues
2009 2008
Elimination entries
2009 2008
Interpump Group
(12,019)
17,024
3,344
424,513
(265,957)
158,556
37.4%
6,025
(38,292)
(1,692)
(1,178)
73,974
8
17.4%
7,117
-
60,792
(20,631)
40,161
39,228
933
40,161
(49,445)
(20,307)
12,634
2,181
(4,956)
(4,956)
4,111
(845)
(343)
-
-
-
-
-
1,188
-
2,685
2,685
(1,778)
907
n.s.
25
-
-
-
34
-
38
n.s.
(898)
35,461
1,879
37,340
(34,579)
2,761
7.4%
293
(943)
-
(50)
(228)
-
(429)
-0.6%
(2,289)
65
(105)
-
59
(260)
-
3
(10)
-
15
(11)
-
(210)
210
(10,000)
(67)
67
(18,118)
(171)
(1,711)
(1,283)
(428)
(1,711)
429
274
82
(347)
(373)
26
(347)
489
101
(233)
(194)
(194)
-
(194)
21
110
(143)
(105)
(105)
-
(105)
28
-
-
(10,000)
(10,000)
-
(10,000)
-
-
-
(18,118)
(18,118)
-
(18,118)
-
-
(2)
(10,000) (18,118)
37
Business sector information12.
( /000)
Assets by sectorAssets held for sale
Cash and cash equivalents
Liabilities of the sector (B)
Total assets
Payables to banks
Total liabilities
Interest-bearing financial payables
283,7212,123
43,859
268,936-
72,070
Payables for payment of investments
Subtotal of assets of the sector (A) 285,844
Total assets, net (A-B)
268,936
196,866 241,985
Hydraulic
2009 2008
Industrial
2009 2008
Further information required by IFRS 8Investments valued according to the equity method
Non current assets other than financialassets and deferred tax assets
414
153,860
-
176,878
293,2212,123
44,782
295,344
250,562
-
178,935
202,694-
57,134
202,694
145,560
370
91,405
Total net salesCost of salesGross industrial margin
Distribution costsGeneral and administrative expenses
Financial charges
Other net revenues
Financial income
Adjustment of value of investments according to the equity method
Profit for the period before taxes
Other operating costs
Ordinary profit before financial charges
% on net sales8,351
(3,735)(7,922)
57(1,008)
(3,789)
(362)
(2,763)
(30,127)
905
(75)
38,478
21.7%
% on net sales -7.2%
Income taxes (82)Profit for the period (3,871)Due to:
SubsidiariesParent company shareholders (3,941)
70
Consolidated profit for the period (3,871)
Total liabilitiesTotal assets
(67,956)
167,438
Total assets, net 99,482
38
Balance sheet(amounts shown in €/000)
The Hydraulic sector also includes, in 2009, the Cylinders Division companies acquired in thesecond quarter of 2008 and in 2009. For a more accurate comparison, data describing thecontribution of the Cylinders Division relative to 2009.
Year2009
Net sales in the table above are given net of sales to other group companies. The percentages of gross industrial marginand ordinary profit before financial charges on sales refer to the contribution from the Cylinders Division to the consolidatedfinancial statements. The income statement presented does not therefore constitute the stand-alone income statementof the Cylinders Division.
31/12/09
85,361
626,459
96,469
9,569
383,663261,265
4,556536,542
-(28,328)1,531
2,433
1,766
10,682-
7,102
16,360
541,0983,96410,682
444,6293,580 2,198
(28,328)
(28,328)
2009 2008
Electric Motors
2009 2008
Other Revenues
2009 2008
Elimination entries
2009 2008
Interpump Group
-
1,489
-
223
49,727
557,568
101,626
11,547
379,617244,545
4,556503,285
21,899
507,841
406,215
-(12,526)
(12,526)
(12,526)
1,3502,433
1,367
3,783
2,416
-
339
18,546-
10,869
18,546
7,677
-
1,832
39
Business sector information12.
Cash flows by business sector are as follows:
Cash flowsfrom:Operatingactivities
Total
Investingactivities
Financingactivities
Total
37,582
69,594
50,704
(82,716)
HydraulicSector
9,449
33,432
54,128
(78,111)
IndustrialSector
24,985
33,037
(3,625)
(4,427)
Electric MotorsSectors
2,835
2,975
(9)
(131)
Other RevenuesSector
313
150
(47)
2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
(24,779)
38,088
(27,162)
(35,705)
(107)
(72)
-
(35)
2,775
17,860
7,421
(22,506)
(27,174)
19,781
(34,338)
(12,617)
(273)
519
(245)
(547)
210
41
The cash flows relative to investing activities of the Hydraulic Sector in 2009 include expenditure for the acquisitions ofOleodinamica Panni S.r.l., Cover S.r.l. and HS Penta S.p.A., and also for the price adjustment for the Contarini group, for atotal amount of €/000 71,087. Cash flows deriving from investing activities in the Hydraulic Sector in 2008 include theoutlay for the acquisition of lines of business by Modenflex Hydraulics S.r .l. and by IKO Hydraulics S.r.l. and the outlay forthe acquisition of the Contarini group for €/000 13,050. The outlays are inclusive of bank debts received. Cash flows ofinvesting activities in the Industrial Sector in 2008 included the outlay of €/000 9,213 for the acquisition of the additionalstake in NLB and the income of €/000 1,225 for the sale of the investment in Refin S.r.l.Cash flows of the Industrial Sector in 2009 include outlays for the purchase of treasury stock by the Parent Company, whichoperates in this sector, in the amount of €/000 6,679 (€/000 8,371 in 2008) and notional receipts arising from thetransfer of treasury stock in the amount of €/000 13,553 (€/000 6,715 in 2008); in addition, the cash flows of financingactivities in the Industrial Sector in 2009 include the proceeds of the capital increase for a total amount of €/000 49,964,while in 2008 they included outlays for distribution of the extraordinary dividend for €/000 16,594, plus the ordinary dividendfor €/000 14,381 (there was no expenditure for the distribution of dividends to Parent Company shareholders in 2009).
Business sector information12.
Data by geographical sectors on the basis of the location of activities are as follows:
The geographical areas to which operations are assigned depend on the nationality of the company per formingthem. There are no companies with operations in more than one area.
Assets
402,906
89,225
118,016
Total
11,114
626,459
5,198
Increases during the periodin tangible and intangiblefixed assets
5,660
1,633
3,831
709
12,484
651
Geographical sectors - Secondary
Although they are managed globally, the Group’s operations by sectors are divided into five geographical areas.
Details of sales per geographical area are provided below:
70,702
101,619
105,550
Italy
Rest of Europe
North America
-36.8%
-37.2%
-16.2%
Pacific Area
Total
29,386
342,924
-11.7%
-28.3%
21
30
31
8
100
Rest of the World 35,667 -31.3%10
9,107
1,953
6,995
475
18,793
263
327,582
94,609
121,282
9,329
557,568
4,766
2009/000 %
2008/000 %
Contraction onequal cons.basis
84,919
135,253
125,733
32,358
424,513
20
32
30
8
100
46,250 10
-16.7%
-24.9%
-16.1%
-9.2%
-19.2%
-22.9%
Contraction
31/12/2009 /000
31/12/2008 /000
2009/000
2008/000
Italy
Rest of Europe
North America
Pacific Area
Rest of the World
43
Business sector information12.
44
45
Independent Auditor’s Report13.
1. The undersigned Paolo Marinsek and Carlo Banci, respectively Executive Director and Manager responsible for the drafting of company accounting documents of Interpump Group S.p.A., attest to, taking account also of the provisions of art. 154-(2), subsections3 and 4 of decree D.Lgs 24 February 1998 no. 58:– the adequacy in relation to the characteristics of the business and– the effective application,of the administrative and accounting procedures for the formation of the consolidated financial statements during 2009.
2. In addition, it is confirmed that consolidated financial statements of Interpump Group S.p.A. and its subsidiaries for the year ended 31 December 2009, which show consolidatedtotal assets of € 626,459 thousand, consolidated net profit of € 13,980 thousand and consolidated shareholder's equity of € 242,796 thousand:
a) correspond to the results of the company books and accounting entries;b) were prepared in compliance with the international accounting standards approved
by the European Commission further to the enforcement of Ruling (CE) no. 1606/2002of the European Parliament and the European Council of 19 July 2002, and the provisions issued in implementation of art. 9 of Decree Dlgs. no.38/2005 and the contents are suitable for providing a truthful and fair representation of the equity, economic and financial situation of the company and the group of companies includedin the scope of consolidation;
c) the Board of Directors' report contains a fair and truthful analysis of performance andresults and the situation of the issuer and the companies included in the consolidationtogether with a description of the main risks and uncertainties to which they are exposed.
Attestation of the consolidated financial statements pursuant toart. 81-(3) of Consob regulation no. 11971 (which refers to art. 154-(2)par. 5, TUF - Financial Services Act) of 14 May 1999 as amended
Milan, 16 March 2010
Mr. Paolo Marinsek Mr. Carlo BanciExecutive Director Manager responsible for drafting
company accounting documents
47
Annex 1
The information herein reportedhave been extracted from theAnnual Report which can be
downloaded from the website www.interpumpgroup.it
or requested toInterpump Group S.p.A.
Via E.Fermi, 25 - 42049 Sant’Ilario d’Enza - REFax: +39 0522 904444
e-mail: [email protected]
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R E S U L T Shttp :// www.interpumpgroup.it
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LTS
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