Q3 & 9M 2021

AN EXCELLENT QUARTER PAVING THE WAY FOR A RECORD YEAR

REVENUES AT CONSTANT EXCHANGE RATES INCREASING VS. THIRD QUARTER 2019 BY 21% EXCLUDING ELITE1 CURRENTLY IN WIND-DOWN, AND BY ~20% CONSOLIDATING ELITE

EXCELLENT PROFITABILITY WITH RECURRING EBITDA MARGIN INCREASING VS. THIRD QUARTER 2019 BY 180 BASIS POINTS EXCLUDING ELITE1, AND BY 110 BASIS POINTS CONSOLIDATING ELITE

STRONG CASH GENERATION WITH FREE CASH FLOW OF 160.9 MILLION EUROS IN THE FIRST NINE MONTHS OF THE YEAR AND IMPROVEMENT IN THE NET FINANCIAL POSITION OVER DECEMBER 2020 AND JUNE 2021

GROUP'S KEY STRATEGIC INITIATIVES ONGOING

  • CLOSING OF THE BAY AUDIO ACQUISITION IN AUSTRALIA WHICH WILL BE CONSOLIDATED AS FROM THE FOURTH QUARTER OF 2021
  • BOLT-ONACQUISITIONS IN FRANCE, GERMANY, THE UNITED STATES AND CHINA IN THE THIRD QUARTER
  • LAUNCH OF THE AMPLIFON PRODUCT EXPERIENCE IN SPAIN
  • OPENING OF THE FIRST AMPLIFON STORE IN SHANGHAI
  • WIND-DOWNOF ELITE IN THE US EXPECTED TO BE COMPLETED BY THE FOURTH QUARTER OF 2021

SIGNING OF THE FIRST "SUSTAINABILITY-LINKED" REVOLVING CREDIT FACILITY FOR 100 MILLION EUROS

AMPLIFON INCLUDED IN THE MIB ESG INDEX, THE FIRST ESG INDEX DEDICATED TO ITALIAN BLUE CHIPS

MAIN RESULTS FOR THE FIRST NINE MONTHS OF 20212

  • Consolidated revenues of 1,418.6 million euros, an increase at constant exchange rates of 17.7% compared to the first nine months of 2019 (not impacted by the Covid-19 pandemic) and 37.0% compared to the first nine months of 2020. Excluding the contribution of Elite in the first nine months of 2021 and in the comparison periods1, revenues were 1,379.9 million euros, an increase at constant exchange rates of 19.4% compared to the same period of 2019 and 38.1% to the same period of 2020.
  • Recurring EBITDA was 326.9 million euros, 24.5% higher than in the first nine months of 2019 and 43.1% higher than in the first nine months of 2020. Excluding the contribution of Elite1, recurring EBITDA amounted to 326.2 million euros, with the margin rising 190 basis points compared to the same period of 2019 to 23.6% thanks to greater operating efficiency, even after significant investments in the business.
  • Recurring net profit was 106.0 million euros, 40.1% higher than in the first nine months of 2019 and 157.9% higher than in the first nine months of 2020.
  • Excellent free cash flow of 160.9 million euros, an increase of 134.5% compared to the first nine months of 2019 and of 26.6% compared to the first nine months of 2020.
  • Net financial debt was 616.8 million euros, lower than the 633.7 million euros posted at December 31st, 2020, after net cash-out for M&A of 63.5 million euros, dividend payment of 49.4 million euros and the buyback program of 31.1 million euros, with financial leverage down to 1.25x at September 30th, 2021.
  1. In light of the decision to exit the Elite business, which will be discontinued in the fourth quarter of 2021, the income statement figures are also shown net of Elite's contribution and the comments are also based on these figures.
  2. Unless stated otherwise, the comments in this press release refer to the recurring income statement figures. Also, in light of the significant impact of the Covid-19 outbreak on the financial results for FY 2020 and for the sake of greater comparability, the main income statement figures for the same period of 2019 are also provided.

MAIN RESULTS FOR THE THIRD QUARTER OF 20213

  • Consolidated revenues of 459.1 million euros, an increase at constant exchange rates of 19.0% compared to the third quarter of 2019 and of 6.8% compared to the third quarter of 2020. Excluding the contribution of Elite in the third quarter of 2021 and in the comparison periods4, revenues were 448.1 million euros, an increase at constant exchange rates of 21.2% compared to the third quarter of 2019 and 8.0% compared to the third quarter of 2020.
  • Recurring EBITDA was 94.2 million euros, 23.8% higher than in the third quarter of 2019 and 3.0% lower than in the third quarter of 2020 which benefitted from extraordinary income related to the Covid-19 emergency. Excluding the contribution of Elite4, recurring EBITDA was 95.5 million euros, up 30.1% compared to the third quarter of 2019, with the margin rising 180 basis points compared to the same period of 2019 to 21.3% thanks to greater operating efficiency, even after significant investments in the business.
  • Recurring net profit was 25.7 million euros, 57.3% higher than in the third quarter of 2019 and 10.0% lower than in the third quarter of 2020 which benefitted from significant extraordinary income related to the Covid-19 emergency.

Milan, October 27th, 2021 - Today the Board of Directors of Amplifon S.p.A. (MTA; Bloomberg ticker: AMP:IM), global leader in hearing solutions and services, approved the Interim Financial Report as at September 30th, 2021 during a meeting chaired by Susan Carol Holland.

ENRICO VITA, CEO

"We are extremely satisfied with the outstanding results of the third quarter, characterized by excellent growth in revenues, despite the extremely challenging comparison base, and continuous improvement in profitability compared to 2019, which was not affected by the pandemic. We are also very enthusiastic about the different strategic initiatives we have undertaken and, above all, the opportunities stemming from the Bay Audio integration in Australia and the launch of the Amplifon Product Experience in the core Spanish market. The results achieved in the first nine months allow us to look ahead to closing another year with record results."

Given the significant impact of the Covid-19 outbreak on the financial results for FY 2020 and in order to allow for greater comparability, the income statement data for 9M and Q3 2019 are also provided in the tables below. In addition, in light of the Board of Directors' resolution to exit the Elite business, the income statement figures are also shown excluding the contribution of Elite for the reporting and comparison periods. The financial figures including Elite reflect the wind-down currently underway and, therefore, are not very significant. Therefore, unless stated otherwise, the following comments refer primarily to the pro-forma figures without Elite.

  1. Unless stated otherwise, the comments in this press release refer to the recurring income statement figures. Also, in light of the significant impact of the Covid-19 outbreak on the financial results for FY 2020 and for the sake of greater comparability, the main income statement figures for the same period of 2019 are also provided.
  2. In light of the decision to exit the Elite business, which will be discontinued in the fourth quarter of 2021, the income statement figures are also shown net of Elite's contribution and the comments are also based on these figures.

2

THIRD QUARTER 2021 ECONOMIC RESULTS

(Euro millions)

Q3 2021

Q3 2020

Q3 2019

Recurring

%

Recurring

%

Change vs

Recurring

%

Change

2020

vs 2019

Net revenues

459.1

100.0%

428.2

100.0%

7.2%

392.7

100.0%

16.9%

EBITDA

94.2

20.5%

97.1

22.7%

-3.0%

76.0

19.4%

23.8%

EBIT

41.6

9.1%

48.1

11.2%

-13.5%

29.3

7.5%

41.9%

Net income

25.7

5.6%

28.5

6.7%

-10.0%

16.3

4.2%

57.3%

EPS adjusted

0.147

0.160

-8.1%

0.103

42.7%

(*, in Euro)

THIRD QUARTER 2021 ECONOMIC RESULTS PRO-FORMA WITHOUT ELITE

(Euro millions)

Q3 2021

Q3 2020

Q3 2019

Recurring

%

Recurring

%

Change vs

Recurring

%

Change vs

2020

2019

Net revenues

448.1

100.0%

413.4

100.0%

8.4%

375.9

100.0%

19.2%

EBITDA

95.5

21.3%

95.3

23.1%

0.1%

73.4

19.5%

30.1%

EBIT

42.9

9.6%

46.4

11.2%

-7.6%

26.7

7.1%

60.9%

  1. EPS adjusted (adjusted net earnings per share) for non-recurring expenses and the amortization of the intangible assets as per the Purchase Price Allocation accounting treatment.

Consolidated revenues amounted to 459.1 million euros in the third quarter of 2021, an increase at constant exchange rates of 19.0% compared to the third quarter of 2019 and of 6.8% compared to the third quarter of 2020. Excluding the contribution of Elite in the quarter and in the comparison periods, revenues were 448.1 million euros, an increase at constant exchange rates of 21.2% compared to the third quarter of 2019 and 8.0% compared to third quarter of 2020 despite the extremely challenging comparison base for both periods. In particular, the third quarter of 2020 benefited from the easing of the severe lockdown measures adopted in the second quarter of 2020. The outstanding performance with respect to 2019, which was not impacted by the pandemic, was driven by a 13.8% organic growth, well above the reference market, while acquisitions contributed for 7.4%. The foreign exchange effect was negative for 2.0% explained by the strengthening of the Euro against the US dollar and the Latin American currencies.

The performance was positive across all regions, despite the extremely challenging comparison base primarily in EMEA which posted a solid performance, driven by a strong organic growth recorded mainly in France, Spain and Italy; in the AMERICAS, the United States reported once again an excellent, well above market, organic growth, which was combined with the significant contribution of the PJC Hearing acquisition, as well as the outstanding performances in Canada and Latin America; APAC recorded a solid, above-market performance, despite the localized lockdowns in Australia and New Zealand.

Recurring EBITDA was 94.2 million euros, 23.8% higher than in the third quarter of 2019 and 3.0% lower than in the third quarter of 2020, which benefitted from significant extraordinary income related to the Covid-19 emergency. EBITDA as reported came to 93.0 million euros after non-recurring expenses of 1.2 million euros attributable mainly to the GAES integration and the project for the redefinition of Amplifon S.p.A.'s corporate structure. Excluding the contribution of Elite in the third quarter of 2021 and in the comparison periods, recurring EBITDA amounted to 95.5 million euros, an increase of 30.1% over the third quarter of 2019, with the margin rising 180 basis points against the same period of 2019 to 21.3% even after significant investments in the business. This sizeable improvement in profitability is attributable mainly to the greater operating efficiency stemming from the actions taken in 2020 to face the Covid-19 emergency and was achieved, moreover, after significant investments in the business, including in marketing and the continuation of important strategic initiatives.

Recurring EBIT reached 41.6 million euros, 41.9% higher than in the third quarter of 2019 and 13.5% lower than in the third quarter of 2020, which benefitted from significant extraordinary income related to the Covid-19 emergency. EBIT as reported was 38.8 million euros. Excluding the contribution of Elite in the quarter and in the comparison periods, EBIT came to 42.9 million euros, showing an increase of 60.9% over the 26.7 million euros recorded in the same period of 2019. The margin on revenues came to 9.6% compared to 7.1% in the third quarter of 2019.

3

Recurring net profit was 25.7 million euros, 57.3% higher than the 16.3 million euros posted in the third quarter of 2019, thanks to greater operating leverage, and 10.0% lower than in the third quarter of 2020 which benefitted from significant extraordinary income related to the Covid-19 emergency.

ECONOMIC RESULTS FOR THE FIRST NINE MONTHS OF 2021

(Euro millions)

9M 2021

9M 2020

9M 2019

Recurring

%

Recurring

%

Change vs

Recurring

%

Change vs

2020

2019

Net revenues

1,418.6

100.0%

1,042.1

100.0%

36.1%

1,224.7

100.0%

15.8%

EBITDA

326.9

23.0%

228.4

21.9%

43.1%

262.6

21.4%

24.5%

EBIT

167.5

11.8%

79.7

7.6%

110.2%

124.7

10.2%

34.3%

Net income

106.0

7.5%

41.1

3.9%

157.9%

75.7

6.2%

40.1%

EPS adjusted

0.574

0.281

104.6%

0.432

32.8%

(*, in Euro)

ECONOMIC RESULTS FOR THE FIRST NINE MONTHS OF 2021 PRO-FORMA WITHOUT ELITE

(Euro millions)

9M 2021

9M 2020

9M 2019

Recurring

%

Recurring

%

Change vs

Recurring

%

Change vs

2020

2019

Net revenues

1,379.9

100.0%

1,004.0

100.0%

37.4%

1,173.6

100.0%

17.6%

EBITDA

326.2

23.6%

224.0

22.3%

45.6%

254.7

21.7%

28.1%

EBIT

166.8

12.1%

75.3

7.5%

121.5%

116.8

10.0%

42.8%

  1. EPS adjusted (adjusted net earnings per share) for non-recurring expenses and the amortization of the intangible assets as per the Purchase Price Allocation accounting treatment.

Consolidated revenues amounted to 1,418.6 million euros in the first nine months of 2021, an increase at constant exchange rates of 17.7% compared to the first nine months of 2019 and of 37.0% compared to the first nine months of 2020. Excluding the contribution of Elite in the first nine months of 2021 and in the comparison periods, revenues amounted to 1,379.9 million euros, an increase at constant exchange rates of 19.4% compared to the same period of 2019 (thanks to a strong organic growth of 13.3%) and 38.1% compared the same period of 2020. Acquisitions contributed for 6.1% compared to 2019 and for 4.9% compared to the same period of 2020, while the foreign exchange effect was negative due once again to the strengthening of the Euro against the US dollar and the Latin American currencies.

Recurring EBITDA was 326.9 million euros, an increase of 24.5% compared to the first nine months of 2019 and of 43.1% compared to the first nine months of 2020. EBITDA as reported came to 321.4 million euros after non-recurring expenses of 5.4 million euros attributable mainly to the GAES integration process and the project for the redefinition of Amplifon S.p.A.'s corporate structure. Excluding the contribution of Elite in the first nine months of 2021 and in the comparison periods, recurring EBITDA was 326.2 million euros, showing an increase of 28.1% over the first nine months of 2019, with the margin rising 190 basis points compared to the same period of 2019 to 23.6%.

Recurring EBIT reached 167.5 million euros, an increase of 34.3% compared to the first nine months of 2019 and of 110.2% compared to the first nine months of 2020. EBIT as reported was 160.3 million euros. Excluding the contribution of Elite, EBIT came to 166.8 million euros, an increase of 42.8% compared to the first nine months of 2019. The margin on revenues came to 12.1% compared to 10.0% in the 2019 comparison period.

Recurring net profit was 106.0 million euros, an increase of 40.1% compared to the first nine months of 2019 and of 157.9% with respect to the first nine months of 2020. This outstanding result is attributable to greater operating leverage. Net profit as reported, which reflects the non-recurring charges of 5.3 million euros, reached 100.7 million euros. The tax rate came to 28.0%, lower than the 28.5% recorded in the 2019 comparison period. The adjusted earnings per share (EPS adjusted) came in at 57.4 euro cents, 32.8% higher than the 43.2 euro cents reported in the same period of 2019 and 104.6% higher than the 28.1 euro cents posted in the first nine months of 2020.

4

EMEA: Strong top-line performance, despite very challenging comparison base, and outstanding profitability

(Euro millions)

Q3 2021

Q3 2020

Q3 2019

% 21/20

% 21/19

Revenues

310.2

303.2

270.7

+2.3%

+14.6%

Organic growth

+0.0%

+11.3%

Acquisitions

+2.1%

+3.2%

FX

+0.2%

+0.1%

EBITDA recurring

79.1

76.8

58.1

+3.0%

+36.1%

Margin %

25.5%

25.3%

21.5%

+20 bps

+400 bps

In the third quarter EMEA posted a strong performance with revenues increasing at constant exchange rates of 14.5% compared the third quarter of 2019 and 2.1% compared to the third quarter of 2020, despite the extremely challenging comparison base for the same period of both 2019 and 2020, which were characterized by exceptional organic growth of more than 11%. Organic growth in the third quarter 2021 was particularly strong in France, Spain and Italy.

The region posted excellent profitability with the EBITDA margin rising an impressive 400 basis points compared to the same period of 2019 to 25.5%, thanks to greater efficiency post-Covid, improved profitability in Spain and scale reach in core countries.

AMERICAS: Impressive revenue growth continues, boosted by ~+40% well above-market organic growth compared to the third quarter of 2019 and by PJC Hearing acquisition

(Euro millions)

Q3 2021

Q3 2020

Q3 2019

% 21/20

% 21/19

Revenues

90.7

69.6

71.5

+30.4%

+26.8%

Organic growth

+13.3%

+22.1%

Acquisitions

+17.3%

+17.4%

FX

-0.2%

-12.7%

EBITDA recurring

18.8

16.0

15.6

+17.5%

+20.2%

Margin %

20.7%

23.0%

21.9%

-230 bps

-120 bps

Pro-forma figures without Elite

(Euro millions)

Q3 2021

Q3 2020

Q3 2019

% 21/20

% 21/19

Revenues

79.7

54.8

54.7

+45.4%

+45.7%

Organic growth

+24.1%

+38.4%

+22.0%

+22.8%

Acquisitions

-0.7%

-15.5%

FX

EBITDA recurring

20.1

14.3

13.0

+40.2%

+55.1%

Margin %

25.2%

26.2%

23.7%

-100 bps

+150 bps

The United States recorded once again an extraordinary revenue performance, driven by an organic growth of around 40% compared to the third quarter of 2019 (more than twice the reference market) mainly thanks to Miracle- Ear and the contribution of the PJC Hearing acquisition, which also posted strong organic growth in the period (reported in M&A). The performance posted in Canada was strong and that posted by Latin America was excellent.

5

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Amplifon S.p.A. published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2021 11:07:16 UTC.