The following data refer to the results for the year 2010 of the three operating segments of the PRIMA INDUSTRIE Group (inclusive of intersectorial items).
Amounts in thousands of Euros REVENUES EBITDA % o f
R e v e nue s EBIT % o f
R e v e nue s REVENUES EBITDA % o f R e v e nue s EBIT % o f R e v e nue s LASER SYSTEMS 105.508 3.267 3,1% 1.293 1,2% 91.123 1.484 1,6% 39 0,0% ELECTRONICS 31.573 3.882 12,3% 2.871 9,1% 28.218 2.129 7,5% 1.127 4,0% PLATE PROCESSING MACHINERY 137.666 3.781 2,7% (3.259) -2,4% 127.104 2.831 2,2% (4.836) -3,8% ELIMINATIONS (24.740) (561) 2,3% (553) 2,2% (14.559) (201) 1,4% (193) 1,3%
CONSOLIDATION 250.007 10.369 4,1% 352 0,1% 231.886 6.243 2,7% (3.863) -1,7%
December 31, 2010 December 31, 2009
During 2010, the Group gained a new organization structure, based on the concentration of its activities into two divisions: the Laser Equipment division for sheet metal processing (MACHINERY) and the opto-electronic components division (COMPONENTS).
The MACHINERY division, in turn, has been structured into two main functional units, Operations and Sales Marketing & Service.
This new structure is designed to enable the Group to focus each business more on its own reference market with adequate resources for the volumes and margins that distinguish them, and thereby generate greater efficiency, also in terms of the necessary circulating capital invested.
As of January 1, 2011, the PRIMA INDUSTRIE Group is thus active in two sectors of business: MACHINERY
COMPONENTS
For more details on the subject reference is made to the "INTRODUCTION" section, in the paragraph entitled “PROFILE OF THE PRIMA INDUSTRIE GROUP”.
In any case, for reasons of coherence and greater clarity, in this chapter relative to the year 2010, we report information relative to the three business segments (Laser Systems, Sheet Metal Processing Machines and Electronics) into which the Group was structured until 31/12/2010.
` LASER SYSTEMS
Company
Amounts in thousands of Euros REVENUES EBITDA EBIT REVENUES EBITDA EBIT
PRIMA INDUSTRIE SpA 75.454 3.920 2.337 63.243 1.040 (122)
PRIMA NORTH AMERICA 28.712 1.062 743 27.904 (384) (604)
PRIMA FINN-POWER GmbH 18.642 (1.379) (1.435) 9.641 (685) (731)
PRIMA FINN-POWER UK 3.653 227 222 3.260 61 57
PRIMA FINN-POWER C.EUROPE 1.442 25 22 658 (21) (30)
PRIMA FINN-POWER SWEDEN 1.269 263 261 1.805 (95) (98)
PRIMA INDUSTRIE BEIJING 513 50 49 542 193 193
OOO PRIMA INDUSTRIE 359 (52) (58) - - -
Eliminations (24.536) (849) (848) (15.930) 1.375 1.374
LASER SYSTEMS 105.508 3.267 1.293 91.123 1.484 39
December 31, 2010 December 31, 2009
The LASER SYSTEMS segment had an increase in sales in 2010 for 14,385 thousand euro (16%). EBITDA for 2010 was 3,267 thousand euro (up by 1,783 thousand euro compared with 2009) and EBIT stood at 1,293 thousand euro (up by 1,250 thousand euro compared with 2009). In 2010 the LASER SYSTEMS segment benefited from net non-recurrent income on the EBITDA for 1,707 thousand euro (of which 1,368 thousand euro was relative to the parent company) compared with a net deficit of 266 thousand in 2009.
34
PRIMA INDUSTRIE
We set out in detail the operating results for 2010 of the parent company PRIMA INDUSTRIE SpA, from which a strong recovery can be seen, in comparison with the previous year.
Performance indicators
thousands of euro % thousands of euro %
REVENUES 75.454 100,0 63.243 100,0 EBITDA 3.920 5,2 1.040 1,6 EBIT 2.337 3,1 (122) (0,2) EBT 3.891 5,2 (3.444) (5,5) NET RESULT 3.437 4,6 (2.554) (4,0) Year 2010 Year 2009
The parent company’s sales turnover in 2010 reflected the improvement of the markets for capital goods, and in particular, for 3D laser systems. Turnover thus totalled 75,454 thousand euro up by about 19% from 63,243 thousand euro in 2009. This increase was caused mainly by the increase in the number of machines sold. PRIMA INDUSTRIE SpA continued its actions to reduce costs. It should be noted that, thanks to the increased productivity level of the company, PRIMA INDUSTRIE SpA was able to avoid resorting to the Ordinary Redundancy Find.
With all of these cost containment and reduction measures, as well as the recovery of sales, EBITDA was 3,920 thousand euro or 5,2% of turnover. EBIT stood at over 2.3 million euro, rising sharply with respect to the previous year, when it was negative for 122 thousand euro. The financial management of PRIMA INDUSTRIE SpA was positive for 1,554 thousand euro (including the net result of foreign currency transactions). It was burdened by the financial costs of the FINPOLAR loan, but these costs were offset by the generally positive effect deriving from the valuations of the equity investments made at the time of the year-end closure, for a positive amount of 6,346 thousand euro. Taxes for 2010 are negative for 455 thousand euro, discounting an IRAP of 556 thousand euro. It should be noted PRIMA INDUSTRIE SpA participated with FINN-POWER ITALIA and PRIMA ELECTRONIC in national consolidated taxation. For further details on the subject of the parent company, reference is made to the separate financial statements included later in this document.
OTHER COMPANIES IN THE LASER SYSTEMS SEGMENT
As can be seen from the summary table of the LASER SYSTEMS segment, almost all the other companies in the PRIMA INDUSTRIE Group achieved positive operating results, certainly better, in general, than the previous year.
PRIMA NORTH AMERICA achieved a growth in profitability despite substantially stable sales. This result was achieved by improving the marginality and reducing the cost structure, as well as accounting non-recurrent income for US$199 thousand.
The German subsidiary showed strong growth of its sales thanks to the merger of PRIMA GmbH with FINN-POWER GmbH and consequent creation of PRIMA FINN-POWER GmbH. Despite the increased sales, however, the company's EBITDA was worse. This persistence of the losses of the German branch induced PRIMA INDUSTRIE SpA to write down the equity investment in full and also to set up a risk fund. For more details on this subject, see Note 11.3 - "Equity investments in subsidiaries".
35 The other companies in the LASER SYSTEMS segment totalled revenues for 7,236 thousand euro, up by 971 thousand euro from the previous year (6,265 thousand euro in 2009). The improvement of PRIMA FINN-POWER CENTRAL EUROPE was particularly significant: it doubled its turnover with respect to 2009; the incorporation of the Russian branch in the 3rd quarter 2010 was also an important event. The total EBITDA of these companies was positive for 513 thousand euro, up by 375 thousand euro from the previous year (138 thousand euro in 2009). This result was due, beyond the good performance of the British and Polish subsidiaries, to the non-recurrent income from the Swedish branch (now in liquidation) of 271 thousand euro; this income came from the sale of a company division to the local dealer (for more information on this subject see the paragraph entitled “SIGNIFICANT EVENTS IN 2010”).
` ELECTRONICS
Company
Values in thousands of Euros REVENUES EBITDA EBIT REVENUES EBITDA EBIT
PRIMA ELECTRONICS SpA 30.493 3.891 2.913 27.113 2.576 1.612
OSAI UK 1.045 26 3 979 (11) (29) OSAI USA 1.286 (193) (201) 705 (445) (465) OSAI GmbH - - - - (1) (1) Eliminations (1.251) 158 156 (579) 10 10 ELECTRONICS 31.573 3.882 2.871 28.218 2.129 1.127 December 31, 2010 December 31, 2009
The ELECTRONICS segment had a 12% increase in sales in 2010.
In a market that is still highly unstable, characterized by very volatile demand and considerable difficulty in procurement of electronic components, the ELECTRONICS segment, thanks also to the structural actions of cost reduction implemented in 2009, obtained an EBITDA of 3,882 thousand euro equivalent to 12.3% of turnover, and an EBIT of 2,871 thousand euro, equivalent to 9.1% of turnover, compared with 2,129 thousand euro (7.5%) and 1,127 thousand euro (4.0%), respectively, in 2009.
In 2010 the ELECTRONICS segment benefited from net non-recurrent income of 341 thousand euro against net non-recurrent costs of 649 thousand euro in 2009.
In 2010, with a view to increasing overall efficiency, a project was undertaken to rationalize the activities performed in the two Italian plants owned by PRIMA ELECTRONICS (Moncalieri and Barone C.se, both located in the province of Turin). The project concerned, on the one hand, a series of actions on the buildings, to use them for new functions and at the same time improve their image. On the other hand, 80 employees had to be transferred between the two plants in order to concentrate all the functions in one plant. When the project is completed (it is expected to be completed in the first half of 2011) the headquarters, administration, marketing and sales, engineering, the purchase office and the new production department for electronic circuit boards including assembly of the traditional parts currently outsourced, will be located in Moncalieri. The Barone C.se plant will be completely devoted to the production of systems (finished products) and to the repair center, functional to the service activities.
There was also an improvement in overall results of the foreign subsidiaries (OSAI UK and OSAI USA) in terms of both revenues and profitability.
Among the important events of the year it is important to note the following, relative to PRIMA ELECTRONICS:
on 31/12/2010 is acquired from PRIMA INDUSTRIE the American company PRIMA NORTH AMERICA (for further details see the paragraph entitled “TRANSACTIONS WITH RELATED PARTIES” in the MANAGEMENT REPORT) and
it undertook the process of incorporation of a company in China (100% owned) for marketing OSAI products; the start of its activity is planned for spring 2011.
36 This is part of the process of reorganization of the Group's activities, which began on 1/1/2011 in the Machinery and Components divisions.