• First quarter consolidated revenues reach € 22 mn (vs. € 19.7mn in Q1 2020, +11.9%)
  • Significant growth in: biostimulants to € 14.1mn (vs. € 12.1mn in Q1 2020, +17%); animal fat to € 2.7mn (vs. € 2.1mn in Q1 2020, +29.4%); services for the collection of tanning residues to € 1.1mn (vs. € 1mn in Q1 2020, +13.3%)
  • Construction retardants still slowing down to € 3.9mn (vs. € 4.3mn in Q1 2020, -10.1%); although less than company forecasts
  • Significant growth in all major areas: Europe (including Italy) at € 12.6mn (vs. € 12.1mn in Q1 2020, +3.8%); Asia-Pacific at € 5.7mn (vs. € 4.5mn in Q1 2020, +28.9%); Americas at € 1.74mn (vs. € 1.69mn in Q1 2020, +2.9%); the smaller Middle East and Africa market at € 0.9mn (vs. € 0.4mn in Q1 2020, +92.5%)

SICIT Group, listed on the Italian Equities Market (MTA – STAR segment), announces that consolidated revenues in the period 1 January – 31 March 2021, if compared to the same period of 2020, recorded an overall increase of over € 2.3 million, reaching € 22 million (+11.5%).

This growth concerned both biostimulants for agriculture (+17%) and animal fat for the production of biofuels (+29.4%), as well as revenues from services for the collection of tanning residues (+13.3%). On the other hand, retardants for the plaster industry (-10.1%) continued to slow down, due to the continuing effects of the Covid emergency on the world construction market. Although, in this respect, sales of retardants had been exceptionally strong in Q1 2020 (+19.6% compared to Q1 2019), having benefited from a stockpile effect by customers, in view of foreseeable lockdowns. As such, sales of retardants in Q1 2021, when compared to Q1 2019 (€3.6mn – last year pre-pandemic), would register a significant +7.6%.
Similarly, growth affected almost all geographical areas: from Europe (including Italy, +3.8% of which Italy +17.8% and other countries in Europe -3.8%), to APAC (+28.9%), Americas (+2.8%) and the Rest of the World (Middle East and Africa, +92.5%).

Massimo Neresini, CEO of SICIT Group, commented: “2021 has started very well, in continuity with an excellent year, such as the previous one, despite the ongoing pandemic. All business areas are growing, with the exception of construction retardants – which perform better than our forecasts and are even up, compared to the first quarter of 2019 (the last pre-pandemic year) – and almost all geographical areas are growing. Among the most significant facts, three factors are worth mentioning: the ever-increasing demand for biostimulants, in which new and important customers are being added, in what is a key business area for us; the availability, for sale, of a purified and de-acidified animal fat of excellent quality, whose sale price is significantly higher than the average prices historically recorded by SICIT and whose impact on revenues will be increasingly seen in the months to come; the excellent availability of delivered tanning residues (which exceeded 40k tonnes, compared to 32k tonnes in the first quarter of 2020), at constant prices compared to 2020, but processing a much more diversified input-residue”.

  • Consolidated revenues of approx. € 63.2 million (approx. € 56.7 million in 2019, +11.5%)
  • Adjusted consolidated EBITDA of approx. € 24.1 million and equal to 38.1% of revenues (€ 21.1 million in 2019, +14%)
  • Adjusted consolidated net profit of approx. € 14.6 million (€ 12.6 million in 2019, +16.0%)
  • Consolidated NFP/available funds at 31 December 2020 of approx. € 20.5 million (€ 29.3 million at 31 December 2019)
  • Dividend proposal of € 0.55 per share

SICIT Group, listed on the Italian Equities Market (MTA – STAR segment), announces that the Board of Directors, which met today, reviewed and approved the consolidated financial report at 31 December 2020.

Massimo Neresini, CEO of SICIT Group, said: “The double-digit growth in revenues, EBITDA and net profit, in a year marked by the global pandemic, makes us extremely proud. On the one hand, it confirms the Company’s resilience and, on the other, the solidity of the path undertaken to accelerate the development and the international expansion. These exceptional results are the fruit of the work of all the people part of the Group, who have reacted promptly to the many challenges that have characterised twelve unique months, managing just fine the 60th year of the Company’s history. SICIT is a healthy, profitable company with excellent margins that is increasingly focused on the creation of value as a whole: shareholders, stakeholders, but also and above all the territory and the community of which it is part. In 2020 we were able to achieve extraordinary results and translisting to the MTA (STAR segment), continuing our important investment plan, making progress towards setting up our first production plant in China and strengthening our commitment to sustainability. Despite the many unknowns, the long-term choices we have made allow us to look forward to 2021 with great confidence“.

Consolidated revenues
In 2019, SICIT’s revenues reached € 63.2 million, an increase of € 6.5 million (+11.5%) compared to 2019 (€ 56.7 million). The slightly negative exchange rate effect amounted to approx. € -0.1 million (-0.1%).

This increase was mainly due by the growth of products for agriculture (+ € 7.3 million, +23.6%), which continues to show a strong demand, and animal fat for the production of biofuels (+8.8%). Retardants for the plaster industry confirmed a slowdown (- € 1.3 million, -8.3%), mainly due to the effects of the COVID-19 emergency on the global construction market and the temporary closure of some customers (gypsum industries) especially in APAC. Finally, revenues from the withdrawals of animal by-product and tanning waste services, compared to 2019 (+3.6%), marked an increase, due to the different mix of products processed (animal hair was substantially not processed in 2019), partially offset by the decrease in average prices charged for the treatment of other waste.

Growth concerned almost all geographical areas: from Europe (including Italy, +7.6%; of which Italy +14.4%, and other countries in Europe +3.0%), to APAC (+19.4%) and LATAM (+39.9%). North America (mainly represented by plaster retardants, -1.6%) and the Rest of the World (Middle East and Africa, -1.9%) bucked the trend slightly.
Growth in Europe and APAC was mainly driven by agricultural products, partially offset by the drop in retardants for plaster. In LATAM, results were positive both for biostimulant products and, in countertrend to other geographical areas, also for retardant products.

Adjusted consolidated EBITDA
Adjusted consolidated EBITDA amounted to € 24.1 million at 31 December 2020 (38.1% of revenues), up of € 3 million (+14.0%) compared to FY 2019 (€ 21.1 million, 37.3% of revenues).

The increase in absolute terms is mainly due to the growth in revenues and the related industrial margin, partially offset by higher fixed costs related to the STAR translisting and the adjustment of the post-listing governance structure, as well as by higher production costs (employees and amortisations) partly incurred to ensure business continuity to customers even during the lockdown, as well as by a less favourable product mix, partially offset by the positive price effect in the fat business.

Adjusted EBITDA increased as a percentage of revenue (38.1%) compared to FY 2019 (37.3%), mainly due to higher sales volumes that allowed better absorption of fixed costs and to production efficiency activities (continued also in 2020) that allowed to offset the slight increase in some costs mentioned above.

The slight decrease in adjusted EBITDA as a % of revenue compared to the third quarter of 2020 (38.7%) is mainly due to

  • higher maintenance, overtime and extra costs in the fourth quarter of 2020 to address higher volumes of materials processed; and
  • the recording of higher performance bonuses for 2020 compared to the estimates made in the third quarter, following the targets exceeding set by the incentive remuneration plans.

Adjusted EBITDA does not include non-recurring costs of € 2.1 million at 31 December 2020, mainly due to non-recurring taxes for the translisting from the AIM Italia to the STAR (€ 1.2 million, of which € 1.0 million for advice services and € 0.2 million for non-recurring bonuses to employees and directors), sanitation and safety costs following the COVID-19-related health crisis (€ 0.1 million) and non-recurring donations to health facilities linked to COVID-19 (€ 0.6 million). In 2019, non-recurring costs amounted to € 11 million, of which € 0.8 million for non-recurring advice services for the merger of SICIT 2000 S.p.A. into SprintItaly S.p.A. and listing on AIM Italia, and € 10.2 million as listing costs 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 imputed costs and not relevant for tax purposes).

Adjusted consolidated net profit
Adjusted consolidated net profit increased substantially in line with adjusted EBITDA (+ € 2 million, +16.0%) and amounted to € 14.6 million at 31 December 2020 (€ 12.6 million in FY 2019).

Adjusted net profit does not include, in addition to the tax effects related to non-recurring costs of € 2.1 million described in the previous paragraph, certain tax benefits recorded in fiscal year 2020 and related to:

  • net proceeds of € 2.8 million of exemption of the merger deficit following the merger by incorporation with SprintItaly S.p.A and
  • proceeds of € 3.8 million for the “Patent Box” tax benefit with reference to the fiscal years 2015-2019.

With regard to the goodwill arising from the merger deficit, in the interim financial report at 30 June 2020 and in the additional periodic information at 30 September 2020, among the three alternative ways of recording provided by the document “Accounting treatment of the substitute tax for exemption of goodwill, pursuant to Decree-Law No. 185 of 29 November 2008, Art. 15, par. 10 (converted into Law No. 2 of 28 January 2009) for entities that prepare their financial statements in accordance with IAS/IFRS”, issued by the Organismo Italiano di Contabilità (February 2009), the accounting alternative was chosen, which suspended both the cost of the substitute tax paid and the overall tax benefit, postponing the net positive financial effect of € 2.8 million (approx. €0.6 million per year) to the following five years.

For the purposes of preparing the annual financial statements at 31 December 2020, further technical investigations were carried out, at the end of which it was decided to apply the interpretation most in line with IAS 12 “Income Taxes”, which provides for the recognition in the income statement of the net tax benefit for the year of exemption.

In both financial statements and consolidated financial report at 31 December 2020, the substitute tax paid of € 3.7 million (among current taxes) and the expected tax benefit of € 6.5 million (among deferred tax assets) were recorded in the Income Statement, with a net positive economic effect of € 2.8 million. The deferred tax assets recorded at 31 December 2020 will be reversed in the next five years from 2021 to 2025, consistently with the tax benefit arising from the higher tax-deductible amortisations in those years.

Consolidated NFP/available funds
Consolidated NFP/available funds amounted to € 20.5 million at 31 December 2020 (€ 29.3 million at 31 December 2019). Operating cash flows in the 2020 financial year were positive for € 22.7 million before outflows for net investments of € 13.8 million (€ 15.9 million of investments net of the change in investment payables of € 2.1 million), non-recurring costs of € 2.1 million and income tax for € 5.2 million – of which € 3.7 million for 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.. SICIT also paid dividends worth about € 8.8 million and purchased treasury shares for a total value of about € 1.6 million.

Investments
Similarly to previous years, in FY 2020, the Group continued its investment 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
  • The construction of a new warehouse at the Arzignano site
  • Completing the plant for the production of protein hydrolysate from animal hair treatment
  • Completing the new animal fat refining and re-esterification plant, to obtain high-quality biofuel
  • The start of construction of the new plant for the production of biostimulants in granules

COVID-19 update
The first half of 2020 was characterized by the spread of the health emergency situation linked to the COVID-19 pandemic (so-called Coronavirus) and the implementation by Governments and Authorities of restrictive measures to deal with it.

During this period SICIT Group and its subsidiary SICIT Chemitech continued to operate as their respective activities were not among those covered by the restrictive measures. The companies also implemented protocols and measures to protect workers from the risk of infection at their production plants, in line with regulatory guidelines, as well as recourse to work from home for non-essential functions.

As far as the supply of raw materials is concerned, in the period between the end of March and the beginning of May 2020, the tanning companies in the Vicenza district (the main suppliers of raw input material for the Group) initially stopped the supply of leather processing residues. From mid-April 2020 onwards, at the same time as the gradual resumption of leather processing, the disposal of raw input materials has gradually resumed, albeit for reduced volumes compared to those recorded during the periods prior to the COVID-19 emergency.

In order to meet the need for input raw materials suitable to meet the growing demand of clients, the Company implemented the following strategies during the period: (i) recourse to new suppliers, including foreign ones, (ii) recourse to alternative types of input raw materials at the Chiampo plant, even if economically less advantageous, and (iii) increase in the production of protein hydrolysate from animal hair at the Arzignano plant compared to what was originally planned.

As far as production is concerned, the Group’s production activities continued also thanks to the adaptation of its production procedures to the new safety protocols introduced from time to time by government decrees. However, the temporary interruptions in the supply of raw materials led to the temporary interruption of production of basic semi-finished products (protein hydrolysates). Thanks to the use of semi-finished products’ stocks, SICIT has continued the production of finished products (biostimulants and retardants) thus ensuring full operation and supply capacity to its clients.

On the revenue side, there were no cancellations of orders by clients, requests to shift deliveries or delivery difficulties that negatively affected revenues from products for agriculture. However, the temporary closure of some gypsum factories in the second quarter had an impact on revenues from plaster retardants, while the drop in input raw material volumes collected from tanneries in Q2 2020 had a negative impact both on fat production volumes and related revenues.

The Group did not resort to payroll subsidies (so called “Cassa Integrazione Guadagni Ordinaria” or “Cassa Integrazione Guadagni in deroga”) and all employees remained fully operational.

With regard to the outlook for 2021, sustained demand is expected for biostimulants, due to the increasing focus on the sustainability of production systems and, similarly to 2020, COVID-19 could have localised and, overall, minor impacts, especially on the distribution chain of technical means.
In the plaster retardants sector, demand could remain volatile, especially in the first half of the year, due to the impact of COVID-19 on construction activities and production facilities; in this market context, characterised by weak demand, an increase in competitive pressure can be observed. A growth trend was seen in the renovation building sector and in particular in the bricolage/DIY sector, where the Company, however, has a marginal presence as its retardant products are used more in construction than in renovation. However, it is positive that the construction sector, and therefore the Company’s customers, are benefiting from a growth trend in the DIY sector that compensates, at least in part, for the difficulties met in heavy building construction.

Dividend proposal
While approving the Consolidated Financial Report at 31 December 2020, the Board of Directors also approved to propose to the Shareholders’ Meeting a gross dividend of a total of € 0.55 per share, through a full distribution of the profit for the year, within the limits of the law, and for the exceeding part using the Company’s available reserves.

It should be noted that, compatibly with the timing of the Company’s Shareholders’ Meeting (as described below), this dividend is expected to have 10 May 2021 as Detachment Date of the third coupon, 11 May 2021 as Record Date and 12 May 2021 as Payment Date.

 

  • Thanks to a 27.8 ESG Risk Rating score, SICIT ranks in the world’s top 8% of agricultural chemicals companies
  • Sustainalytics assesses SICIT’s ESG Risk Management as “strong” and aligned with “best practice”
  • For most areas the risk is “low” (emissions, effluents and waste; occupational health and safety; human capital; community relations) or “negligible” (customer responsibility, environmental and social risks of products, business ethics)
  • There are no events that may negatively impact stakeholders, the environment or the Company’s operations
  • 90% of the current risk is manageable and, therefore, highly reducible with suitable policies

SICIT Group announces that Sustainalytics assigned the ESG Risk Rating to the Company, related to Environmental, Social and Governance issues, with particular reference to the 2019 Sustainability Report.

This rating represents an independent assessment that measure the degree of adherence to the most rigorous institutional and international voluntary guidelines on sustainability (and related governance aspects).

In Sustainalytics’ comparative ESG Risk Ratings, SICIT Group ranks in the top 18% of the best companies within the global chemical industry and in the top 8% of peers within the agricultural chemicals segment, achieving a score of 27.8.

Given SICIT’s business, which is related to the processing of animal waste and residues, Sustainalytics rates the company’s ESG Risk Exposure potentially “high”, but ESG Risk Management is “strong”, as “follows best practice, signalling strong accountability to investors and the public”.

The “medium” risk areas include only carbon-own operations and corporate governance. For all other categories, the risk is rated as “low” (emissions, effluents and waste; occupational health and safety; human capital; community relations) or even “negligible” (product governance; E&S impact of product and services; business ethics). Furthermore, there are no events that may negatively impact stakeholders, the environment or the Company’s operations. Finally, the “manageable risk factor” is equal to 90% and therefore, in perspective, strongly reducible with suitable policies, programmes and initiatives.

Aware of its role as a market leader and the resulting responsibilities, since 2019 the Company has undertaken a solid and formalised path to strengthen its approach to sustainability, implementing projects in each of the three ESG areas, including:

  • Environment: green and sustainable products, minimisation of waste and emissions, certifications, increased use of renewable energy;
  • Social: emphasis on transparency, legality and proper relations with all stakeholders;
  • Governance: full compliance with all applicable Regulations, Codes and best practices.

Massimo Neresini, CEO of SICIT Group, commented: “The rating assigned by Sustainalytics certifies the consistency of the path undertaken, ranking us in the top positions at global level among agricultural chemicals companies. This result is even more important because it is mainly based on our first Sustainability Report, which did not yet clearly show the results achieved, thanks to the improvement of company policies and best practices. SICIT is an essential part of the circular economy of the tanning industry, and environmental sustainability has always been a central theme. In recent years, we have started a journey to integrate ESG principles in their entirety, so that they will guide all future development of the Group”.

The Sustainalytics rating is available here: https://www.sicitgroup.com/en/esg-rating/.

Sustainalytics is a leading global provider of ESG ratings, ESG research and corporate governance for investors. Specifically, it assesses a company’s ESG risks through a two-dimensional materiality framework: the first dimension, Exposure, measures the degree of Company’s exposure to ESG risks, while the second, Management, measures the management’s degree of ESG risks. The areas carefully investigated are: corporate governance; data privacy and security; resource use; human capital; business ethics; environment & social; E&S impact of product and services.
For further details on the sustainability rating methodology see www.sustainalytics.com.

On Friday, 5 February 2021, Bloomberg amended its charts regarding the historical value of SICIT Group’s share prior to the business combination between SICIT 2000 and SprintItaly that led, at the same time, to the constitution of the Company and its listing on Borsa Italiana (AIM Italia) on 20 May 2019.

Bloomberg’s amendment follows a notification by SICIT. In fact, the Company’s stock had never reached the price of € 11 until May 2019, but in Bloomberg’s terminals, App and website it was reported at a value between € 13 – € 14 between the end of 2017 and May 2019. In addition, Bloomberg incorrectly reported a peak in the share value at € 15.67 immediately before the business combination and a subsequent sharp fall, just above € 10, in the following days.

SICIT Group announces the appointment of Tony Zou as the new Biostimulants Sales Manager of SICIT China, the Company’s subsidiary for distribution in the Asian markets.

Born in Jingzhou, Hubei Province, 40 years old, Zou has 13 years of experience in the professional agricultural equipment industry, working with leading local and multinational companies in technical and sales roles.

Tony Zou, Biostimulants Sales Manager – SICIT China.

After graduating from the Agriculture University and Chinese Academy of Agriculture Sciences in Gansu, Zou took the first steps of his career with Palm Agro Trading as Technical/Sales Rep for the Hubei province. In 2009, foreseeing the excellent opportunities for future development, he moved his professional growth career towards the biostimulants market, becoming Biostimulants Product Manager, first for China Agritech and then for Sipcam China. At this stage of his career, Zou successfully faces the challenges of a multinational reality and the results obtained open the doors to UPL, Indian multinational agrochemical company, which in 2017 entrusts him with the responsibility of its biostimulants business for the entire Asia – Pacific region.

In his career path, Zou has effectively managed businesses of increasing complexity, gained deep technical expertise on biostimulants and deepened his knowledge of Asian markets, while demonstrating strategic vision and pragmatism.

Alessandro Paterniani, Chief Commercial Officer of SICIT Group, said: “Tony is a true specialist in our sector, in his career he has shown that he is absolutely able to deal with both the technical and commercial dimensions of our products. I believe that his professional skills, combined with the cultural competence required to establish quality relationships with local players, are the best prerequisites for creating new opportunities and growing in such an important market“.

  • Consolidated revenues for 2020 reach € 63.2 million (vs. € 56.7mn in 2019; +11.5%)
  • This result exceeds the budget targets set at the beginning of 2020
  • Significant growth, in particular, for the biostimulants business, to € 38.3mn (vs. € 31.0mn in 2019; +23.6%) and for the animal fat business, to € 7.1mn (vs. € 6.5mn in 2019; +8.8%); on the other hand, the contraction in the construction retardants business, to € 14.1mn (vs. € 15.3mn in 2019; -8.3%), was confirmed, slowed down by the Covid emergency. Finally, revenues from withdrawals of animal by-products and tanning waste services grew to € 3.1mn (vs. € 3.0mn in 2019; +3.6%)
  • Significant growth in all the main geographical areas: Europe (including Italy) at € 32.6mn (vs. € 30.3mn in 2019; +7.6%); Asia-Pacific at € 18.7mn (vs. € 15.6mn in 2019; +19.4%); Americas at € 6.9mn (vs. € 5.8mn in 2019; +18.9%)

SICIT Group, listed on the Italian Equities Market (MTA – STAR segment), announces that consolidated revenues from 1 January 2020 to 31 December 2020, compared to the same period of the 2019, recorded an overall increase of about € 6.5 million, for a total of € 63.2 million (+11.5%).

This result benefited, in particular, from the growth of the business of biostimulants for agriculture (+23.6% to € 38.3 million), which continues to record a sustained demand; as well as animal fat for the production of biofuels (+8.8% to € 7.1 million), which more than recovered the slight drop recorded in the first half of the year. On the other hand, retardants for the plaster industry (-8.3% to € 14.1 million) continued to slow down, mainly due to the effects of the Covid emergency on the global construction market. Finally, revenues from the withdrawals of animal by-products and tanning waste services (+3.6% to € 3.1 million) fully recovered the delay recorded in the first half of the year, due to the lockdown of the tanneries last spring.

Growth concerned almost all geographical areas: from Europe (including Italy, +7.6%; of which Italy +14.4% and other countries in Europe +3.0%), to APAC (+19.4%) and the Americas (+18.9%). The minor Middle East and Africa market fell slightly (-1.9%).

Massimo Neresini, CEO of SICIT Group, commented: “We are very satisfied for the excellent results of 2020, which were achieved thanks to the sustained demand of biostimulants and the full recovery of animal fat production for biofuels. At the same time, we remain extremely confident for 2021. Thanks to the investments we have already made, this year we will be able to market a purified fat for bio-fuels that is much more efficient, both from an ecological and economic point of view; as well as new products, developed together with our customers, to meet the future needs of agriculture (biostimulants) and industry (retardants). I would like to point out also the great commitment that SICIT has made by starting up the recovery and treatment plant for animal hair, thus expanding its withdrawing service of tanning waste, which have returned to pre-pandemic levels. On the other hand, we believe that the downturn in construction retardants can be recovered as soon as the world will leave Covid behind. These are clearly particularly positive results at this historic time, and the entire Group should be proud of them”.

Consideration of the Covid emergency
With reference to the Covid emergency and its potential impact in the coming months, the Company is well aware that the uncertainty about the timing of the end of the pandemic emergency is still high, as well as the depth of the consequences that it could have on world’s major economies. Any renewal or extension of the restrictive measures against Italian tanneries could have negative effects on the supply of input raw materials and, consequently, on production capacity and commercial activity. Similarly, any renewal or extension of the lockdown in the countries where the Company markets its products could weaken the demand for the Company’s products, particularly in the construction sector.

That said, however, the Company remains confident – also thanks to the initiatives undertaken, as well as the launch of the vaccination campaign – that it will be able to pursue its important path of significant growth.

SICIT Group appoints Joshua Ryan Keller as the new Country Manager of SICIT USA Inc., the Company’s subsidiary for distribution in the North American markets.

Mr. Keller has over a decade of experience in the agribusiness sector, where he has worked with major players, dealing with crop protection and nutrition. A 32-year-old Kentucky native, he joins from Compass Minerals, where he held roles of increasing responsibility until being appointed Senior Business Manager – Eastern U.S. and Canada in 2017.

Joshua Ryan Keller

After graduating as an agronomist from the University of Kentucky, he joined Dow AgroSciences where, for 6 years, he was able to develop his talents by successfully managing various technical and commercial roles. The results achieved did not go unnoticed and, in 2016, he joined Compass Minerals, which entrusted him with the responsibility of managing its Key Accounts. Thanks to his excellent performance and the development of managerial skills, he was promoted to Business Manager in 2017. In his career path, Ryan has gained a deep understanding of agribusiness in North America, developing quality relationships with leading agricultural equipment distributors. In all of his roles, he has proven talent, initiative, leadership and an exceptional ability to achieve results.

Alessandro Paterniani, Chief Commercial Officer of SICIT Group, said: “Ryan will bring the enthusiasm, expertise and pragmatism needed to expand the biostimulants market in North America. His work will significantly enhance our ability to dialogue with local partners, as well as finding opportunities of mutual interest. At the same time, his managerial skills will allow us to consolidate our presence in the plaster retardants market, adequately overseeing our leading position in the sector. I am confident that Ryan will make a great contribution to the implementation of our growth strategy in North America“.

SICIT Group accelerates on the energy sustainability front. Thanks to the partnership with Enel X, the company will install a 192 kWp (peak kilowatt) photovoltaic system capable of producing approximately 226,000 kWh of electricity each year, which will be used entirely to power the Arzignano (VI) plant, guaranteeing savings of over 83 tons of CO2 each year.

At the same time SICIT has decided to submit its production cycle to the analysis of the Enel X Circular Economy Report, a tool able to identify the circular maturity level of the company and provide a road-map with possible solutions to improve it. SICIT thus aims to intervene in its production cycles in order to further reduce its environmental footprint and ensure a sustainable future for the company, the supply chain and the territory.

The commitment to the environment and energy sustainability is part of the important ‘2022 investment plan’ approved by SICIT and is shown by various energy efficiency measures that, at the beginning of 2019, involved both the Arzignano plant (cogeneration plant) and the Chiampo plant, where the post-combustion plant for environmental improvement is fully operational and guarantees a 98% reduction in pollutants emitted into the atmosphere.

Thanks to the measures taken in the past and the green photovoltaic plant – which will also be used to power the company’s electric cars – SICIT’s Arzignano plant will reach the highest level of energy efficiency.

Massimo Neresini and Giampaolo Simionati, respectively CEO and CFO of SICIT Group, were interviewed by Italia Informa during the Virtual STAR Conference Fall Edition 2020 (Oct. 7th), organized by Borsa Italiana.

During the first part of the interview they talk about how the company has coped with the Coronavirus, managing to achieve positive performance – thanks to the storage of raw material and an automated heating system – without ever making use of temporary benefit schemes, as well as of the outlook until the end of the year.

In the second part (https://bit.ly/3pI23cY) they talk about short and long term investments to strengthen the plants (including the opening of a production plant in China) and laboratories; acceleration of the development and internationalization plan, following the listing on the Stock Exchange; innovative biostimulant products in the launch phase, as well as possible acquisitions or partnerships with companies and universities.

 

  • Consolidated revenues of approx. € 48.2 million (approx. € 43.2 million in the first nine months of 2019, +11.5%)
  • Adjusted consolidated EBITDA of approx. € 18.7mn and 38.7% of revenues (€ 16.1mn in 9M 2019, +16.2%)
  • Adjusted consolidated net profit of approx. € 11.4mn (€ 9.4mn in 9M 2019, +22.5%)
  • Consolidated NFP/available funds at 30 September 2020 approx. € 21.2mn (€ 29.3mn at 31 December 2019)

SICIT Group‘s BoD approved the additional consolidated periodic financial information at 30 September 2020.

Massimo Neresini, CEO of SICIT, commented: “In the first nine months of the year we recorded double-digit growth in revenues, EBITDA and net profit. Very satisfactory results, in light of the health emergency that began in the first half of the year and strongly re-emerged in the third quarter. The data tells us that the construction industry, and consequently our plaster retardants, are suffering the impact of the Coronavirus. At the moment, this decline is more than offset by our main business area, related to biostimulants for agriculture, which continues to show robust (current and expected) growth trends. The other two areas, related to animal fat for biofuels and tanning waste collection services, have fully recovered from the previously recorded declines. The resilience of SICIT is also confirmed by a growth in revenues in almost all geographical areas. We have set a solid path, as proved by the production and commercial continuity; the continuation of the industrial investment plan and the expansion of the laboratories; we are continuing to develop innovative, efficient and tailor-made solutions. The worsening of the pandemic and the restrictive measures makes it very difficult to make any predictions for the current year, but the efforts made and the results achieved so far comfort us regarding the possibility of essentially achieving the 2020 economic-financial goals“.

Consolidated Revenues
In the first nine months of 2020 SICIT generated revenues of € 48.2 million, an increase of € 5 million (+11.5%) compared to the first nine months of 2019 (€ 43.2 million). The exchange rate effect was not significant.

This increase was mainly generated by the growth in products for agriculture (+ € 5.8 million, +25%), which continues to record sustained demand, and by animal fat for the production of biofuels (+8.4%), which recovered the slight decrease recorded in the first half of 2020 (-1%), caused by the slowdown in the supply of raw materials. Plaster retardants confirmed their slowdown (- € 1.1 million, -8.8%) mainly due to the effects of the Covid emergency on the world construction market and the temporary closure of some customers (plaster factories). Finally, revenues from the collection of animal by-products and tanning waste (+0.1%) recovered the delay recorded in the first half of 2020 (-6.8%), due to the lock-down of tanneries last spring.

Growth affected almost all geographical areas: from Europe (including Italy, +5.1%; of which Italy +8.6% and other countries in Europe +2.7%), to APAC (+21.6%), North America (+2%) and Latam (+50.2%), and Rest of the World (Middle East and Africa, +8.3%). 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 € 18.7 million as at 30 September 2020 (38.7% of revenues), up by € 2.6 million (+16.2%) compared to the first nine months of 2019 (€ 16.1 million, 37.1% of revenues).
The increase in absolute value is mainly due to the growth in revenues and the related industrial margin, partially offset by the higher fixed costs linked to the translisting to the STAR (on the 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 business continuity to customers even during the lock-down. Adjusted EBITDA increased as a percentage of revenues (38.7%) compared to the first nine months of 2019 (37.1%), mainly due to higher sales volumes, which allowed a better absorption of fixed costs and to the activities for production efficiency (which continued in 2020) which offset the slight increase in some of the above costs.

Adjusted EBITDA as a % of revenues also increased significantly compared to the first half of 2020 (37.2%). This increase is due, in addition to higher sales volumes, also to:

  • higher production volumes which, in the third quarter of 2020, substantially offset the drastic drop recorded in the second quarter of the year, when problems related to COVID-19 had affected SICIT’s suppliers and interruptions in the supply of raw materials had led to the temporary interruption of production of semi-finished base products (hydrolyzed proteins); and
  • greater efficiencies in production processes that allowed the optimization of production costs.

Adjusted EBITDA does not include non-recurring costs of € 1.9 million in the first nine months of 2020 for non-recurring taxes for the translisting from the AIM Italia to the STAR (€ 1.2 million, of which € 1.0 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 nine months of 2019 non-recurring costs amounted to € 10.8 million, of which € 0.6 million for non-recurring advice 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 imputed costs and not relevant for tax purposes).

Adjusted consolidated net result
The adjusted consolidated net profit grew substantially in line with adjusted EBITDA (+ € 2.1 million, +22.5%) and amounted to € 11.4 million at 30 September 2020 (€ 9.3 million in the first nine months of 2019).

Consolidated NFP/available funds
Consolidated NFP/available funds at 30 September 2020 amounted to € 21.2 million (€ 29.3 million at 31 December 2019). Operating cash flow, in the first nine months of 2020, was positive for € 14.2 million before outflows for net investments of € 8.6 million (€ 11.1 million investments net of the change in payables for investments for € 2.5 million), income tax of € 4, 2 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. in SprintItaly S.p.A. SICIT also paid dividends worth about € 8.8 million and purchased treasury shares for a total value of about € 0.9 million.

Investments
Similarly with previous years, during the first nine months of 2020, SICIT continued its investment 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;
  • The new plant for refining and re-esterification of animal fat in order to obtain a high quality biofuel;
  • The start-up, during the third quarter of 2020, of the investment for the new plant for the production of granules and tablets solutions.

Foreseeable evolution of the management
The seriousness of the current scenario linked to the economic and social effects of COVID-19 and the uncertainty about future developments in Italy and in the countries where the Group operates make it difficult to forecast the impact of the pandemic on the 2020 financial year.

Despite the recent deterioration of the operating scenario due to the new wave of the pandemic, the feedback received from customers supports SICIT on the possibility of essentially achieving the 2020 economic and financial targets, as the management believes that the level of interest in SICIT’s products has shown a positive trend during the period, especially with regard to biostimulants for agriculture.

However, the management is well aware that the uncertainty about the timing of the end of the pandemic emergency and the seriousness of the related consequences on the major world economies is still high. A possible renewal or extension of the restrictive measures applicable to Italian tanneries could trigger negative effects on the supply of input raw materials and, consequently, on their production capacity and commercial activity. Similarly, any tightening of the lock-down in the countries where the Group sells its products could weaken demand, particularly in the construction sector, in which retardants are used (agriculture, on the other hand, seems to be much less affected by emergency dynamics).

Notwithstanding the foregoing with regard to the uncertainties linked to the impact of COVID-19, the performance recorded by the Group as at 30 September 2020 shows a growth in revenues of 11.5% (compared to the first nine months of 2019), substantially in line with expectations, albeit with a different mix of agricultural/industrial/fat sectors.

The results recorded are significantly positive considering the continuing difficulties and uncertainties that remain in the main world economies in deep recession due to the continuing difficulties linked to COVID-19.

The Company will continue its investment plan in the fourth quarter of 2020 with the progress of activities aimed at completing the industrial and technical expansion in Arzignano and in particular the new warehouse, the storage tanks, the new laboratories, the plant for fat re-esterification and the plant for granules and tablets.

The Group confirms its intention to accelerate the growth process by investing, in the short term, in strengthening the commercial structure dedicated to foreign markets, and in the medium term, with (i) the strengthening, both quantitative and qualitative, of production capacity at the Arzignano and Chiampo sites; and (ii) the opening of a production plant in China, to be even closer to its international customers. However, considering that there have been slowdowns in the planning of this new production plant due to the health crisis, the planning and/or implementation of this plant could be further delayed, in case of further restrictive measures should be adopted in the future and/or a further worsening of the health emergency situation.

In order to pursue this development policy, the Group may turn to potential external acquisitions or partnerships with other industrial groups.

The Group will also continue its strategy of developing new products in close collaboration with its customers, in order to respond adequately to the different needs of the agricultural and industrial sectors.

Approval of the 2019 Sustainability Report
The Company informs that today’s Board of Directors approved the “Sustainability Report of SICIT Group as at December 31, 2019” (the “Sustainability Report”). The Sustainability Report has been prepared in accordance with the “GRI Standards”, on a voluntary basis, considering the interest and attention of the Group, since its foundation, to issues related to sustainability.
Moreover, in order to increase the degree of transparency and reliability of the information contained in the non-financial reporting, the Sustainability Report is currently being reviewed by Deloitte & Touche S.p.A., an independent third party specifically appointed for this purpose.

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