• In the first nine months of 2020 SICIT’s products were distributed in 71 countries
  • Commercial networks opened for the first time in Canada, Singapore, Indonesia, the Philippines and Angola
  • Partnerships with leading agrochemical operators have made it possible to introduce new solutions in China, India and France
  • In Brazil and China the process of developing and launching new products is at an advanced stage

SICIT Group announces that in the first nine months of 2020 the Company’s growth and commercial development continued despite the Covid-19 pandemic.

During this period, SICIT products were distributed in 71 countries and, for the first time, entered Canada, Singapore, Indonesia, the Philippines and Angola’s markets. Expansion is also taking place thanks to new commercial relations in countries where the company was already present and, above all, through collaboration with large multinational players in the agrochemical sector which, overcoming the obstacles posed by the pandemic, have continued to implement launch plans into new markets.

Thanks to partnerships with leading agrochemical players, new solutions have also been introduced in China, India and France, while in Brazil and China the process of developing and launching of new products is at an advanced stage. This will lay the foundations for further strengthening SICIT positioning in markets with strong demand and excellent growth prospects over the next 5 years, although the current year has been very challenging.

Alessandro Paterniani, Chief Commercial Officer at SICIT Group, commented: “2020 will be remembered as the year of Covid-19, which generated a disruptive and unthinkable impact that we are all still facing. Also SICIT has faced new and unforeseen challenges to ensure the highest safety standards for its employees, while guaranteeing the production and commercial continuity necessary to serve its customers. But we have succeeded in the difficult task of pursuing seemingly incompatible goals: in the commercial area, despite the limitations imposed by containment measures (first and foremost, the impossibility of travelling, even for our sales representatives), we have expanded our distribution network, giving greater coverage to our international presence. Finally, even more importantly, during the year we laid the foundations to enter strategic countries with strong growth potential, strengthening our positioning“.

On September 12th, 2020, Massimo Neresini, CEO of SICIT Group, attended the panel Operating Excellence as a competitive factor, held on the occasion of the 2020 edition of Vicenza Città Impresa -Festival of the Champion Companies, promoted by Italy Post and L’Economia del Corriere della Sera.

He was then interviewed by Gaspare Civiero, Founder and Director of Delivera. During the conversation, Massimo Neresini talked about various topics, including circular economy, SICIT’s differential competitive advantages, Coronavirus’ impact, company’s growth path and future strategies.

  • Consolidated revenues of approx. € 35.5 million (approx. € 32.5 million in the first half of 2019, +9.4%)
  • Adjusted consolidated EBITDA of approx. € 13.2 million and equal to 37.2% of revenues (€ 12.1 million in the first half of 2019, +9.5%)
  • Adjusted consolidated net profit of approx. € 8.2 million (€ 7.2 million in the first half of 2019, +14.5%)
  • Consolidated NFP/available funds at 30 June 2020 of approx. € 19.8 million (€ 29.3 million at December 31st, 2019)

SICIT Group’s Board of Directors approved today the Consolidated Interim Financial Report at 30 June 2020.

Massimo Neresini, CEO of SICIT, said: “The first half of 2020 was characterized by two major challenges for the Group: at the beginning of the year the activities for the translisting to the MTA, which took place successfully and very quickly; from the second quarter the COVID-19 pandemic spread in many geographical areas where the Group operates. SICIT continued its production and business activities even in the periods of greatest crisis in Italy, being one of the essential activities, but the restrictions on mobility, transport and production in the upstream and downstream have inevitably affected some of our reference sectors, in particular due to the temporary closure of some clients operating in the construction sector and many suppliers of raw materials. In spite of all this, we have continued our production and distribution activities, in full compliance with regulations, positioning ourselves as a reference point for employees and partners. SICIT has demonstrated over the years its ability to adapt and, thanks to the availability and skills of its operating staff, has been able to react promptly even to the difficult situations that we experienced in this first half of the year. Our products and services remain fundamental for the growth and development of both the local industrial environment in which we produce and the global markets in which we sell our products, in particular biostimulants for agriculture. We therefore look to the future with confidence, despite the greater uncertainty that the COVID-19 has brought with it“.

Consolidated Revenues
SICIT Group’s consolidated revenues for the first half of 2020 amounted to € 35.5 million, up by € 3 million or +9.4% on the same period of the previous year (€ 32.5 million). The exchange rate effect, slightly positive, was approximately + € 0.1 million (0.2%).

This increase was mainly generated by the growth in agricultural products (+ € 3.5 million, +19.4%) partially offset by the slight decrease in revenues in other sectors, including collection services. In particular, plaster products were affected, especially in the second quarter, by the temporary closure of some clients (plaster plants). Revenues from the fat and collection services sector, on the other hand, were affected by the temporary closure of the main tanneries in the Vicenza district in March-April and the consequent slowdown in the transfer of animal by-products.

The growth affected almost all geographical areas: from Europe (including Italy, +3.2%; of which Italy +1.3% and other countries in Europe +4.6%) to APAC (+16.4%) and Americas (+42.3%). The only area in countertrend was the Rest of the World (Middle East and Africa, -2.8%). The growth of Europe, APAC and Latam was mainly driven by agricultural products, partially offset by the decline in plaster retardants. North American growth is entirely attributable to retardant products.

Adjusted consolidated EBITDA
Adjusted consolidated EBITDA amounted to € 13.2 million in the first half of 2020 (37.2% of revenues), up by € 1.1 million (+9.5%) compared to the first half of 2019 (€ 12.1 million, 37.2% of revenues).

The increase in absolute value was mainly due to the growth in revenues and the related industrial margin, partially offset by higher fixed costs linked to the translisting to the MTA (Italian Equities Market) and the adjustment of the post-listing governance structure, as well as higher production costs (employees and amortisations) partly incurred to ensure continuity of operations for clients even during the lockdown. Adjusted EBITDA remains stable as a percentage of revenues compared to the first half of 2019 (37.2%) mainly due to lower revenues from the contribution of materials and the slight increase in some costs mentioned above.

Adjusted EBITDA does not include non-recurring costs of € 1.8 million in the first half of 2020 for non-recurring taxes for the translisting from the AIM Italia to the MTA, STAR segment (€ 1.1 million, of which € 0.9 million for advice services and € 0.2 million for non-recurring bonuses to employees and directors), sanitization and safety costs following the health crisis linked to COVID-19 (€ 0.1 million) and non-recurring donations to health facilities linked to COVID-19 (€ 0.6 million). In the first half of 2019 non-recurring costs amounted to € 10.8 million, of which € 0.6 million for non-recurring advice services for the merger of SICIT 2000 S.p.A. into SprintItaly S.p.A. and listing at AIM Italia, and € 10.2 million as listing cost from the record of the merger of SICIT 2000 S.p.A. into SprintItaly S.p.A. as a “reverse acquisition” operation, in compliance with IFRS 2 (non-monetary costs and not relevant for tax purposes).

Adjusted consolidated net profit
The adjusted consolidated net profit grew substantially in line with adjusted EBITDA (+ € 1 million, +14.5%) and amounted to € 8.2 million in the first half of 2020 (€ 7.2 million in the first half of 2019).

Consolidated NFP/available funds
Consolidated NFP/available funds at 30 June 2020 amounted to € 19.8 million (€ 29.3 million at 31 December 2019). Operating cash flow, in the first half of 2020, was positive for € 8.7 million before outflows for net investments for € 5.1 million, income tax of € 3.8 million – of which € 3.7 million from the substitute tax on the greater carrying amount allocated to the Plastretard trademark and goodwill arising from the merger deficit following the merger by incorporation of Sicit 2000 S.p.A. into SprintItaly S.p.A. Moreover, in the first half of 2020, SICIT paid dividends worth about € 8.8 million and purchased treasury shares for a total value of about € 0.5 million.

Investments
Similarly to previous years, in the first half of 2020, SICIT Group continued its investing activities in order to improve processes and products and expand production capacity. The main investments related to:

  • Expanding the agronomic, chemical and quality control laboratories at the Arzignano site, to improve and strengthen the research and development of new products, and quality control together with its customers
  • Expanding the storage tanks and the new warehouses at the Arzignano site, to ensure greater flexibility and effectiveness in responding to growing customer demand
  • Completing the plant for the production of protein hydrolysate from animal hair treatment
  • Launching the investment in the new animal fat refining and re-esterification plant, to obtain high-quality biofuel
  • Consolidated revenues in the first half of 2020 reached € 35.5 million (vs. € 32.5 million in the first half of 2019, +9.4%)
    In particular, there was significant growth in the biostimulants business to € 21.7 million (vs. € 18.2 million in 1H 2019, +19.4%); a slight contraction in the retardants business (to € 8.5 million – vs. € 8.7 million in 1H 2019, -2.1%) and the animal fat business (to € 3.38 million – vs. € 3.41 million in 1H 2019, -1.0%), both slowed down by the Covid emergency, especially in the second quarter
    All the main geographical areas grew significantly: Europe (including Italy) at € 19.5 million (vs. € 18.9 million in 1H 2019, +3.2%); Asia-Pacific at € 9.2 million (vs. € 7.9 million in 1H 2019, +16.4%); Americas at € 4.3 million (vs. € 3.0 million in 1H 2019, +42.3%). Only the Middle East and African market bucked the trend, at € 0.87 million (vs. € 0.9 million in 1H 2019, -2.9%)

SICIT Group‘s Board of Directors today today took note of the consolidated revenues for the period January 1 – June 30, 2020 which, if compared to the same period of 2019, recorded an overall increase of about € 3 million (+9.4%).

The growth result concerns almost all geographical areas: from Europe (including Italy, +3.2%; of which Italy +1.2% and other countries in Europe +4.6%), to APAC (+16.4%) and Americas (+42.3%). The only geography in countertrend is the Rest of the World (Middle East and Africa, -2.9%).

This result benefited from the growth in the biostimulant business for agriculture (+19.4%), which continues to achieve sustained demand; while both retardants for the plaster industry (-2.1%) and animal fat for biofuel production (-1.0%) decline slightly, as did revenues from withdrawals of animal by-products and tanning waste, essentially due to the more severe effects of the Covid emergency.

In fact, after a very good first quarter in which the Company recorded a strong increase in sales, also due to an advance on purchases in order to prevent a possible “shortage effect” from Covid, the second quarter was characterized: with regard to retardants, by the temporary closure of some plants of client companies for the production of plasterboard, as well as by a general slowdown in the construction industry; with regard to animal fat, by a reduction in residues withdrawn from Vicenza tanneries, due to lockdown, between the end of March and that of April, followed by a slow restart of all tanning activity, which is still ongoing.

Massimo Neresini, CEO of SICIT Group, said: “In light of the health emergency, we can only be satisfied. Confident that we have left the worst phase of the emergency behind us, we enter the second half of the year with a 9.4% increase in the first half: a particularly brilliant result, considering the times we are living. The level of appeal of our products remains generally very good, especially with regard to biostimulants. Our industrial investment plan is proceeding as planned, towards very promising objectives. Although the general economic environment remains unfavourable, the feedback we receive on a daily basis support us about the possibility of continuing the growth path we have undertaken“.

SICIT has been included in the portfolio of Italian Corporates for Sustainability (mid/small selection) in the latest report dedicated to Corporate Social Responsibility published by Equita SIM.

The portfolio selection includes those companies combining appealing fundamentals with the highest contribution to the achievement of the United Nations’ Sustainable Development Goals.

According to the report, SICIT is exposed to government’s initiatives aimed at fostering precision farming (UN SDG #2: end hunger, achieve food security and improved nutrition and promote sustainable agriculture) as 55% of its revenues stem from biostimulants produced through the recycling of waste from the tanning industry.

 

 

  • As expected, the innovative production process developed by the Company will improve Arzignano’s plant overall capacity by 33%, equal to an increase in production of 4,000 tons/year of animal by-products protein hydrolysate, bringing the total to approx. 16,000 tons/year, compared to approx. 12,000 tons/year in 2019
  • The operation will increase the characteristic value of biostimulants organic nitrogen, further qualifying SICIT’s offer on world agricultural markets
  • The recent plant will contribute to the evolution of plaster retardant’s offer, further expanding the markets covered by the Company

SICIT has completed the production of animal hair protein hydrolysate, remaining from the Vicenza tanning business, at the Arzignano plant.

Animal hair is a product rich in keratin, an important protein suitable for producing agriculture biostimulants.

The innovative production process, developed internally by the Company, guarantees the complete safety of the operations and the possibility to obtain different types of final hydrolysate. A special system of reactors and grinding mixers (an exclusive SICIT’s technology) guarantees the complete hydrolysis of keratin, following the necessary hydrolysis treatment, as required by Regulation (EC) no 1069/2009, allowing to obtain an extremely safe and proven-effective product.
All keratin-based products have largely passed the tests: both in vitro, under controlled laboratory conditions, and according to randomized protocols in open field, allowing to assist clients with essential information to use these new formulations in the most effective way possible.

The production capacity of the new plant is approx. 40 – 60 tons/day of processed hair, for a total of over 10,000 tons/year, as originally planned. This will result in an additional production of about 4,000 tons/year of protein hydrolysates, bringing the total produced by SICIT Group at the Arzignano plant to approx. 16,000 tons/year, compared to 12,000 tons/year in 2019. Overall, therefore, the process innovation will increase the production capacity of animal by-products protein hydrolysate by 33%.

Moreover, thanks to this initiative, the Company expects: i) an increase in the characteristic value of organic nitrogen in biostimulants, which will further qualify SICIT Group’s offer on world agricultural markets; and ii) the evolution of plaster retardant industrial products, making SICIT Group’s technical offer even more performing and competitive.

Massimo Neresini, CEO of SICIT Group, said: “The circular economy has always led SICIT’s action: this plant makes it possible to implement a further recovery of a residue from the tanning industry, providing a fundamental service for an extremely-important area for the economy of our country. SICIT is constantly working to guarantee high standards of agronomic performance in all the protein hydrolysates it produces, using the most advanced screening techniques“.

Trading began today on the Mercato Telematico Azionario (MTA – STAR Segment) of Borsa Italiana for SICIT Group’s ordinary shares and warrants which, at the same time, were excluded from AIM Italia.

Massimo Neresini, CEO of SICIT Group, said: “The translisting on the MTA is an important showcase to reach a wider audience of investors and accelerate the path of growth and internationalization undertaken, in a medium-long term perspective. Granting the STAR qualification by Borsa Italiana is a further recognition of the quality and the resilience of SICIT which, even in a complicated period, has never stopped, consolidating its leadership in the circular economy“.

Ordinary shares and warrants maintain the same ISIN code: IT0005372344 and IT0005275034.

Also effective from today are the new articles of association of SICIT, which comply with the regulations for companies with shares listed on regulated markets; and some amendments aimed at strengthening the Company’s governance, in line with the regulations applicable to listed companies and the Code of Conduct of Borsa Italiana.

  • Consolidated revenues of approx. € 19.7 million (vs. € 15.7 million in the first quarter of 2019, +25.6%)
  • Adjusted consolidated EBITDA of approx. € 8.0 million and equal to 40.4% of revenues (compared to € 5.4 million in Q1 2019)
  • Consolidated net cash available at 31 March 2019 of approx. € 29.6 million (€ 29.3 million at 31 December 2019)
  • Further resolutions taken for the listing on the MTA, STAR segment
The Board of Directors of SICIT Group approved the operating results as at 31 March 2020.

 

The Group’s consolidated revenues in the first quarter of 2020 amounted to € 19.7 million, up by € 4.0 million compared to the first quarter of 2019 (equal to € 15.7 million, +25.6%).

 

The growth concerned all the Group’s main areas of business: from biostimulants for agriculture (+29.9%), to retardants for the plaster industry (+19.6%), to animal fat for the production of biofuels (+27.3%).

 

Similarly, growth concerned almost all geographical areas: from Europe (including Italy, +25.1%, of which Italy +3.5% and other European countries +41%), to APAC (40.2%) and Americas (+13.9%). The only areas in countertrend are the Middle East and Africa (-8.1%).

 

Adjusted consolidated EBITDA at 31 March 2020 amounted to approximately € 8.0 million (+ € 2.6 million, +47.3% compared to Q1 2019).

 

This increase is mainly due to (i) higher revenues in the first quarter of 2020, as well as stable structural costs, and (ii) the consolidation of SICIT Chemitech S.p.A. which contributed with € 0.6 million in Q1 2020 (the subsidiary was not included in the scope of consolidation in Q1 2019).

 

The consolidated EBITDA margin adjusted (the ratio of adjusted consolidated EBITDA and consolidated revenues) increased from 34.4% in Q1 2019 to 40.4% in Q1 2020 mainly due to improved operating leverage and the consolidation of SICIT Chemitech S.p.A..

 

Non-recurring costs (excluded from adjusted consolidated EBITDA) amounted to approx. € 0.4 million in Q1 2020, mainly for advisory services related to the listing process on the MTA market, STAR segment, and approx. € 0.3 million in Q1 2019, mainly for advisory services related to the Business Combination between SICIT 2000 S.p.A. and SprintItaly S.p.A. and the listing on the AIM market.

 

Consolidated net cash available at 31 March 2020 amounted to € 29.6 million (€ 29.3 million at 31 December 2019). The cash generated during the period was also enough to finance investments and net working capital for the quarter.

 

With reference to the emergency linked to the COVID-19 pandemic, the Company, following what had already been communicated on 23 March 2020, specifies that, starting from the middle of last April, an increasing number of Vicenza tanneries – as provided by the Decree of the Presidency of the Council of Ministers (so-called “DPCM” by the Italian Prime Minister) of 22 March and 10 April 2020 – with a communication to the Prefect of Vicenza, have started to collect fresh bovine leather again and operate the so-called first tanning process, in order to prevent the interruption of the fundamental beef slaughtering chain. As a result, SICIT, in turn, has also started to collect animal by-products again. Subsequently, starting from the end of April 2020, some tanning production started again with the production of shavings and trimmings, following the first tanning processing and, therefore, the Company’s collecting of the waste already tanned. Finally, pursuant to the DPCM of 26 April 2020, tanneries were also authorised to operate as part of the activities listed in Annex 3 (sub-code ATECO 15 “manufacture of leather and similar articles”) of the same decree, so from 4 May 2020 it is permitted to carry out the activities. All flows of raw materials to SICIT must therefore be understood as re-established and continuous, even if for reduced volumes compared to the volumes recorded during the periods prior to the emergency.

 

Further resolutions of the Board functional to the listing on the MTA (Italian Equities Market):

 

  • Appointment of the Head of Internal Audit: in compliance with the Corporate Governance Code of Borsa Italiana, appointed Massimiliano Rigo (partner of Key Advisory S.r.l.) as Head of the Company’s internal audit function, to whom this function has been outsourced.
  • 2020-2022 Incentive Plan: executive resolutions of the Company’s “2020-2022 Incentive Plan”, also based on financial instruments and approved by the Shareholders’ Meeting held on 20 April 2020, including the adoption of the related Regulations and the identification of the related beneficiaries, including the Chief Executive Officer.
  • Consolidated revenues in the first quarter reached € 19.7 million (vs. € 15.7 million in Q1 2019, +25.6%)
  • All of the company’s main businesses are showing significant growth: biostimulants up to € 12.1 million (vs. € 9.3 million in Q1 2019, +29.9%); retardants up to € 4.3 million (vs. € 3.6 million in Q1 2019, +19.6%); animal fat up to € 2.1 million (vs. €1.7 million in Q1 2019, +27.3%)
  • All the main geographical areas grew significantly: Europe (including Italy) up to € 12.1 million (vs. € 9.7 million in Q1 2019, +25.1%); Asia-Pacific up to € 4.5 million (vs. € 3.2 million in Q1 2019, +40.2%); Americas up to € 1.7 million (vs. € 1.5 million in Q1 2019, +13.9%)

SICIT Group announces that consolidated revenues in Q1 2020, compared to the same period of 2019, recorded an overall increase of over € 4 million (+25.6%). This growth result concerned all the main areas of business: from biostimulants for agriculture (+29.9%) to retardants for the plaster industry (+19.6%), to animal fat for the production of biofuels (+27.3%).

Similarly, growth concerned almost all geographical areas: from Europe (including Italy, +25.1%, of which Italy +3.5% and other European countries +41%) to APAC (40.2%) and Americas (+13.9%). The only area in countertrend is the Rest of the World (i.e., Middle East and Africa, -8.1%).

Alessandro Paterniani, Chief Commercial Officer of SICIT Group, commented: “we are very satisfied. Although part of the increase can be reasonably attributed to an advance on purchases to prevent a possible ‘shortage effect’ from COVID-19, we believe that the level of interest in our products is still in a substantially positive trend, especially with regard to biostimulants. Despite the uncertainty of the economic environment, our client’s feedback comforts us on the possibility of achieving the economic and financial targets set for 2020“.

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