Italy’s ORI Martin posts impressive financial results for 2018

Wednesday, 17 July 2019 16:19:10 (GMT+3)   |   Brescia

Product quality and verticalization are the two levers on which Brescia-based Italian steel group ORI Martin has decided to act in recent years and which have enabled the group to obtain excellent results for the fiscal year 2018, ORI Martin has stated, announcing its results for last year. In 2018, its sales increased by 23.8 percent year on year to €574.7 million. Its net profit amounted to €36.9 million, up from €14.12 milion in 2017. EBITDA amounted to €83.8 million, equal to 14.6 percent of turnover, while cash flow rose to €84.4 million, equal to 14.7 percent of revenues. These are "exceptional and not easily repeatable" results, which were helped by a particularly favorable economic situation, commented group president Uggero De Miranda, who presented the results together with managing director Andrea Agnelli and other group officials. The increase in turnover was largely determined by the increase in prices, but also by very strong demand, which even exceeded supply. The company has benefited above all from the strong demand from the automotive sector, its main outlet market, but also from the agricultural sector, alternative energy sources (such as wind power, especially in Germany), mechanics and stamping.

In 2018, the group invested around €24 million. The main interventions concerned the improvement of product quality, technological plant modernization in line with industry 4.0, and the installation of new plants dedicated to the production of new types of products. Meanwhile, ORI Martin continued its verticalization policy by acquiring a majority stake in Ferrosider Spa, a company based in Ospitaletto, Brescia, which is specialized in the production of merchant bar. As in the case of Novacciai (another company that was acquired by ORI Martin in 2016), "We have chosen to avoid adding new production capacity in the market, entering sectors that do not put us in competition with our customers," explained Andrea Agnelli. ORI Martin immediately started investing in the Ospitaletto-based company: a few months ago it closed a contract with Bendotti Industrial Ovens for the supply of a new heating furnace, while since last year it has focused on improving internal water recycling, following the example of its parent company ORI Martin Spa. "We invest not to produce more, to produce better, and more efficiently," stressed Giovanni Marinoni, vice president of ORI Martin. At group level, investments in the environment and safety represented around 20 percent of total investments in 2018, remaining in line with previous years.

With regard to 2019, ORI Martin's objective is to achieve results halfway between those of 2017 (net profit of €14.12 million) and those of 2018. In the first half of the year, turnover fell by almost 10 percent compared to the same period of 2018. The group believes it will be difficult to obtain the excellent performance of last year, due to a decline in margins and a significant reduction in demand, linked to the slowdown of the European automotive sector. However, it will continue to invest around €100 million over the next three years (2019-2021), with the aim of "further increasing production and productivity", underlined board member Roberto De Miranda. Furthermore, ORI Martin will pursue its verticalization strategy: a new acquisition will be finalized by the end of this year and will concern the production of automotive steels. In general, ORI Martin does not exclude acquisitions abroad, as long as they are in countries not too far from the Brescia production site. "Transportation costs are a major obstacle, which is why it is difficult to verticalize in distant countries such as China," explained managing director Andrea Agnelli. Nevertheless, exports directly represent 50 percent of the group's turnover.

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