PESARO, ITALY - The Board of Directors of Biesse S.p.A. – the multinational company based in Pesaro which operates in the wood, glass and marble processing machinery sector and which is listed in the STAR segment of the Italian Stock Exchange – at today’s meeting approved the Consolidated Interim Report for the six month period 1.1.2014 – 30.6.2014:

· Consolidated revenues € 201.1 million (+11.6% compared with the same period of 2013)
· Value Added € 79.8 million (+15.1% compared with the same period of 2013) representing a margin on revenues of 39.7% (38.5% in the first half 2013)
· EBITDA of € 16.9 million (+46.5% compared with the same period of 2013) representing a margin on revenues of 8.4% (6.4% in the same period of 2013)
· EBIT of € 9.7 million (+88.4% compared with the same period of 2013) representing a margin on revenues of 4.8% (2.9% in the same period of 2013)
· Pre-tax Profit of € 8.5 million (+124.7% compared with the same period of 2013) representing a margin on revenues of 4.2% (2.1% in the same period of 2013)
· Net Profit of € 3.9 million (+238.8% compared with the same period of 2013) representing a margin on revenues of 2.0% (0.6% in the same period of 2013)

Even with an increased weighting of taxes (2.3% of revenues – a tax rate of 53.7%) the net profit rose 238.8% compared with the same period of 2013.
Financial Position
At 30 June 2014, Group net debt was € 28.6 million, a decrease achieved despite the dividend distribution (€ 4.8 million in May 2014):
· down € 4.6 million compared to 31 March 2014 (-13.8%)
· down € 22.7 million compared to 30 June 2013 (-44.3%)
· down € 38.2 million compared to 30 June 2012 (-57.2%)
Gearing fell to 0.25 (0.47 at 30 June 2013) and the net debt profile was strengthened by obtaining further committed credit lines of durations of between 36 and 60 months at a lower average cost than in the recent past.
· Group net equity of € 112.1 million (€ 110.1 million at 30 June 2013)
· Group net invested capital of € 140.7 million (€ 161.3 million at 30 June 2013)
The solid cash flow generation was attributable not only to the increase in profitability but also to the positive trend in Net Operating Working Capital which fell by € 19.4 million compared to the figure at 30 June 2013 and by € 5.4 million compared to the figure at 31 March 2014.
The focus paid to financial flows and the growing reliability of Biesse products meant the expected decline in average days payable outstanding was compensated by the almost unchanged figure for average days sales outstanding (DPO at 30 June 2014: 118 - DSO at 30 June 2014: 66). Of the three components of NWC there was a slight increase in total inventories (+ € 1.3 million compared to 30 June 2013), a strong decline in trade receivables (- € 11.4 million compared to 30 June 2013) and an increase in trade payables (+ € 9.3 million compared to 30 June 2013).
Given the results achieved and the trend in operating NWC, the forecast for net debt at year-end 2014 is for a further improvement compared to the forecast given in the Three-Year Business Plan approved in February.
Group order inflow – geographical breakdown of revenues

Consolidated order inflow in the first six months of the current year rose substantially (>20%) compared to the same period of 2013 and was particularly significant as it outperformed the figures reported by the relevant trade associations such as UCIMU (Italian machine tools trade association) ACIMALL (Italian woodworking machinery trade association) and VDMA (German engineering machinery association). The Biesse results were achieved against an international background that remains marked by uncertainty and instability caused by political and economic unrest the effects of which have not been compensated by domestic demand (Italy was 10.3% of consolidated revenues compared to 10.8% at 31 March 2014 and 12% at 30 June 2013) where clients are awaiting the incentives proposed by the Government.

The Group’s production backlog at 30 June 2014 was € 107.7 million (€ 85.9 million at 30 June 2013 and € 77.7 million at 31 December 2013).

The geographical breakdown of consolidated revenues shows a slight decrease in revenues from Western Europe compared to the figure in March 2014 (40.0% compared to 41%) but an increase in revenues from Eastern Europe (21.2% compared to 19.3%) and Asia-Pacific (19.1% compared to 17.7%).

North America accounted for 13.2% of revenues (compared to 13.6% at 30 June 2013 and 15.1% at 31 March 2014), but the positive order intake from the US and Canadian subsidiaries on the eve of the important exhibition, IWF in Atlanta to be held on 20-23 August, testifies to the growth phase of this geographic region.

The BRIC countries accounted for 14.5% of consolidated revenues at 30 June 2014 (14.2% at 31 March 2014 and 20% at 30 June 2013) with the greatest contributions from China and Russia.

“This is just the start but it is fair to say that things are going reasonably well”, commented the Chief Executive Officer, Mr Stefano Porcellini, “better than the business plan and better than the targets for the key indicators: growth, profitability and cash flow generation. It is important to stress this as many markets remain weak and the results are therefore a reflection of the quality of our products and our personnel. The investments made in innovation, the commercial network and marketing are gradually providing the expected results but we still believe that the best is yet to come”.