Sabaf was ready for the demand increase as, with a mix of investments and manufacturing strategy, could assure timely deliveries, ending 2020 with a clear growth.
Despite the difficulties and the unforeseen events that affected all sectors last year, in 2020 Sabaf scored a positive performance under all respects. The company totalled revenues amounting to 184.9 million Euros, achieving the 18.6% growth versus 155.9 million Euros in 2019 (+8.4% with the same consolidation area). Ebitda, accounting for 37.1 million Euros (20.1% of the turnover), registered the 37.2% increment compared to 27 million Euros of the previous year (17.3% of the turnover), while Ebit reached 20.1 million Euros (10.9% of the turnover), with the 68.9% rise versus 11.9 million Euros in 2019. The net result of 2020 financial year amounted to 14 million Euros, scoring the 40.8% growth compared to 9.9 million Euros reached in 2019. “I express great satisfaction with the results that Sabaf Group was able to achieve in a certainly complex year – commented the Managing Director Pietro Iotti -. The efforts lavished in innovation, in the enlargement of the product range and in higher internationalization constitute sound bases that project us towards a future strong sustainable growth. We are going to boost the Group’s expansion also through further takeovers. The search activity of possible M&A targets is unceasing in both our sector and in neighbouring ambits. We are assessing some opportunities and we will communicate them at due time. Concerning industrial projects, we are going on investing in Ospitaletto factory, meanwhile strengthening the activities in Turkey for both Sabaf and for Okida. Moreover, we are implementing a new manufacturing plant in India and prosecuting a project in Mexico. These operations will allow us to be ready for the challenges of next years and to satisfy customers’ requirements on a global scale with more promptness”.
The courage of going on investing
Such a relevant growth was mainly driven by the trend of the second semester of last year when, after a period of great uncertainty caused by the pandemic evolution, consumers started buying again, often allocating their budget to improve the equipment of house and kitchen. Such trend has notably increased the demand for household appliances, urging also component manufacturers, which had to increase their production to keep pace with the demand. To face the sudden rise of orders, Sabaf promptly adopted measures that allowed increasing and exploiting at best the production capacity. Essentially, however, the Group went on investing: in 2020 Q4, Sabaf made investments amounting to 5 million Euros (4.9 millions in the fourth 2019-quarter), rising the total of the year to 17.3 millions (12 millions in 2019). “Our Group –Iotti adds – stands out for very high investment rates in relation to turnover, among the highest in companies listed at the Stock Exchange. As usual, investments were mainly intended for the design and industrialization of new products, for research and development, essential to maintain the gained leadership and to improve and to enlarge production plants, which are already characterized by high automation levels”.
The exponential growth of the fourth quarter
The alternation of high and low consumptions took place worldwide last year but, concerning household appliances, the final months scored a relevant demand increase. “There was no product more demanded than others or a geographical area more growing than others – the Managing Director of Sabaf explains -. 2020 had an anomalous trend: the first two months were characterized by a strong demand followed, until June, as everybody knows, by a drastic reduction of orders caused by the pandemic expansion all over the world. Since June onwards the demand boomed, boosted by two main factors: on one hand the structural growth, the implementation of new projects developed in collaboration with some leader household appliance manufacturers with which Sabaf has worked in the last two years, resulting in an increase of our market shares; on the other hand, consumers’ change of habits as, mandatorily secluded in their houses, they rediscovered the pleasure of cooking, they replaced their old household appliances or bought new ones. This has meant for our Group a generalized demand rise that still persists”. The data of the 2020 Q4 fully mirror this trend: in the last three months of last year, Sabaf revenues, amounting to 59.5 million Euros, exceeded by 46.2% the 40.7 million Euros of the same 2019-period. “It is an unprecedented result in the Group’s history – the company stated – in which significantly shared the start of burner supplies, on a global scale, to strategic customers and the cross-selling between gas and electronics divisions. The latter, in particular, in the fourth 2020-quarter achieved the 77% sale increment”. Ebitda in the considered period reached 14.2 million Euros (23.9% of sales), highlighting the 116% increment versus 6.6 million Euros of the same quarter in the previous year (16.2% of sales). The operating income amounted to 9.9 million Euros (16.6% of the turnover), exceeding by 360.4% the 2.1 million Euros of 2019 Q4 (5.3% of the turnover). The net period outcome, totalling 9.7 million Euros, scored the 211.1% growth versus 3.1 million Euros of the fourth 2019-quarter.
Good prospects for the future, too
According to what Sabaf expects, its business growth will go on, with sales and orders that will presumably maintain the high levels of 2020-yearend for the whole first semester of the current year. The company estimates this trend is likely to continue also in the fourth quarter, driven by supply contracts started in 2020 and by industrial projects in implementation phase. Therefore, for the whole 2021, the company foresees it will reach revenues exceeding 210 million Euros, growing by 8% versus 2020, due to the offer diversification, the favourable evolution of sale prices and the full exploitation of the production capacity, which will succeed in counterbalancing the rise of raw materials’ cost and an eventual unfavourable trend of exchange rates.