• 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.

  • Consolidated revenues in the first nine months of 2020 reach € 48.2million (vs. € 43.2mn in the first nine months of 2019, +11.5%)
  • In particular, there was significant growth in the biostimulants business to € 29.3mn (vs. € 23.4mn, +25.0%) and in the animal fat business to € 5.0mn (vs. € 4.6mn, +8.4%); on the other hand, confirmed the contraction of the retardants business to € 11.1mn (vs. € 12.3mn, -8.8%), slowed down by the Covid emergency, especially in the third quarter
  • All the main geographical areas grew significantly: Europe (including Italy) at € 24.9mn (vs. € 23.7mn, +5.1%); Asia-Pacific at € 13.8mn (vs. € 11.4mn, +21.6%); Americas at € 5.7mn (vs. € 4.6mn, +25.6%). The Middle East and African market also recovered the decrease recorded in the first half, at € 1.4mn (vs. € 1.3mn, +8.3%)

SICIT Group announces that consolidated revenues in the period 1 January – 30 September 2020, if compared to the same period of 2019, recorded an overall increase of about € 5.0 million, reaching € 48.2 million (+11.5%).

The growth result concerns 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%); from the Americas (+25.6%) to the Rest of the World (Middle East and Africa, +8.3%).

This result benefited, in particular, from the growth in the biostimulants business for agriculture (+25.0%) which continues to record sustained demand; and animal fat for biofuel production (+8.4%) which more than recovered the slight drop (-1.0%) recorded in the first half of the year; while retardants for the plaster industry (-8.8%) continued to slow down, mainly due to the effects of the Covid emergency on the world construction market. Finally, revenues from withdrawals of animal by-products and tanning waste (+0.1%) recovered the delay recorded in the first half of the year (-7.4%), due to the lockdown of tanneries during last spring.

Foreseeable revenues trend also in view 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 and the seriousness of the consequences it will have on the world’s major economies is still high. A possible renewal or extension of the restrictive measures against Italian tanneries could have negative effects on the supply of its raw material inputs and, consequently, on its production capacity and commercial activity. Similarly, any renewal or extension of the lockdown in countries where the Company markets its products could weaken demand for the Company’s products, particularly in the construction sector, to which retardants are addressed to (agriculture, on the other hand, seems to be much less affected by emergency dynamics).

Said so, however, the Company remains confident – also thanks to the initiatives undertaken, such as, among others, the increase in sales prices to meet the extraordinary costs link to the management of the pandemic and an August of increased operations and production – that it will continue to grow and that it will be able, if not to achieve the budget targets, at least to minimize any deviations.

Massimo Neresini, CEO of SICIT Group, commented: “In light of the health emergency, which seems to be hitting the world economy again, we are satisfied. We enter the last quarter of the year with a double-digit growth performance in the first nine months (+11.5%), further improved, thanks to the sustained demand for biostimulants and the complete recovery of animal fat production for biofuels and revenues from tanning waste withdrawing services; and despite the foreseeable decline in retardants for construction. In these times, it is a particularly valuable result, despite the fact that our sales team has not been able to travel; and always guaranteeing, on the one hand, the productive and commercial continuity necessary to serve our customers in the best way and, on the other hand, the highest safety standards to our collaborators. Moreover, our industrial investment plan has recovered the delay in the building works, due to the spring lockdown; as well as the development of new products has continued, creating tailor-made products, able to meet the different needs of agricultural (biostimulants) and industrial (retardants) companies. Although the Covid pandemic, these results support us about the possibility, even in a very difficult economic context, to pursue the targets set for the current year”.

  • The independent operator based in New York suggests a fair market value between €  252.8mn and € 326.7mn, equal to a fair share value (fully diluted) between € 15.02 and € 16.23.
  • The target price would correspond to an increase in the value of the stock from 41% to 52%
  • Resilience of SICIT in the face of COVID-19, development of new product formations and set up of a new plant in China the factors behind the view

SICIT Group (the “Company”) announces that Arrowhead Business and Investment Decisions (“Arrowhead”), appointed by the Company, initiated coverage of the SICIT Group’s security.

Arrowhead is a New York-based, independent research and advisory firm which engages with select companies to profile and connect them to its investor network. Arrowhead will provide SICIT Group with investor relations and marketing services to communicate and participate in non-deal roadshows with interested international investors, expanding the company’s investor footprint into North America and other global capital markets.

The Arrowhead coverage initiates with a fair share value (fully diluted) between € 15.02 and € 16.03. This value is based on a fair market value between € 258.2mn and € 326.7mn*. Compared to the share price on October 15, 2020, the target price would correspond to an increase in value of 41-52%. According to the Due Diligence and Valuation Report, the reasons behind the view are to be found mainly in three factors.

First, the resilience of SICIT to the impact of the COVID-19 pandemic in the first half of 2020. In the period, in fact, the Company’s business did not suffer any significant impact, as shown by consolidated revenue up 9.4% YoY to € 35.5mn (vs € 32.5mn), adjusted consolidated EBITDA increased by 9.5% YoY to € 13.2mn (vs € 12.1mn) and an adjusted consolidated net profit increased by 14.5% to € 8.2 million (vs € 7.2 million). These results were in line with management expectations, although restrictions on mobility, transport and production, both upstream and downstream, inevitably affected some of the Company’s reference sectors**.

The second element is the development of two new product formations – granules and tabs – which will allow SICIT to enter new markets. These could represent a new sources of revenue, as the Company could also sell these products to new consumers, avoiding competition within its existing business and customer base.

The last factor is the identification of an opportunity to set up a new plant in China, which would enable SICIT to expand its manufacturing base close to other tanning industry districts. The new plant would be dedicated to the completion of finished products, using (as semi-finished product) hydrolized proteins that would be produced only in the production sites in Arzignano and Chiampo, Italy.

The full initiation report is available to download by clicking here. Future updates to Arrowhead’s research and other SICIT news can be accessed by subscribing to SICIT Group’s profile page on ABID’s proprietary platform at www.abid.co/BIT.SICT.

 

*Coverage initiated on October 16, 2020. The share price was € 10.65 on October 15, 2020, for a market capitalization of € 217.3mn.

**Although the biostimulant area grew by 19.4% YoY to € 21.7mn in H1 2020, retardants fell by 2.1% YoY to € 8.5mn and fat by 1% YoY to € 3.38mn.

  • 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.

Here the link to the second part (https://bit.ly/2HdFxrh) and to the third part (https://bit.ly/36K2kDG).

  • 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

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