LU-VE GROUP consolidated financial report as at 31 December 2021

LU-VE S.p.A. Board of Directors, at their meeting today, reviewed and approved the consolidated financial report as at 31 December 2021.

“The year 2021, the 35th year of LU-VE Group activity, was very positive, characterized by an active demand, despite a sharp increase in the prices of materials and supply difficulties. - declared Iginio Liberali, President of LU-VE Group - We have achieved a turnover of € 492 million, we have grown by 22.6% on the previous year and our net income has more than doubled. The 2021 turnover was 50 times that of our first year of activity. It is the result of constant growth, organically and through acquisitions, based on the professional values of an international working community that unites cultures in a blending process, guided towards the innovation of products and business processes. Thanks to the entire LU-VE team who made all this possible”.

The 2021 financial year saw LU-VE Group experience organic growth in product turnover (+23.0%), more than double the average of the last five years, and at the same time growth in the order book at levels never recorded in the history of the Group (€ 180.2 million, +134% compared to December 2020).

The very strong trend in orders starting from the second quarter of 2021 is attributable to the general post-pandemic recovery scenario and is the result of investments in previous years, both in research and development aimed at developing new heat exchangers for the use of natural “green” fluids with low environmental impact, and in new production lines dedicated to these innovative heat exchangers that have made it possible to intercept a rapidly growing demand. Thanks to these activities, therefore, the Group has managed to increase its reputation, but above all its market share in the segments that are most innovative and sensitive to issues of energy efficiency and low environmental impact solutions. 2021 was a very complex year on the supply chain front, not only due to the huge increases in the prices of raw materials, components, logistics services and energy, but above all due to the constant need to face and monitor shortage risks in the availability of critical materials and components, for the correct supply of production processes.

This situation, combined with an occasional impossible demand, has forced the Group and the world of production companies in general to review their storage solutions inspired by rigorous compliance with the “just in time” principles. Furthermore, the new waves and the spiking of the spread of the pandemic in different areas of the world (with different temporal trends and containment measures) have further aggravated the
logistics crisis, especially for goods from Pacific Asian countries, generating production inefficiencies due to the high, and sometimes sudden, increases in workers’ absence rates in the Group’s plants.

In this difficult scenario, good supply to production sites and adequate levels of customer service were guaranteed by the strategy of widening and differentiating supply sources, which had been implemented for some time, and by growing organizational flexibility.

The European Union, with € 373.8 million in turnover and an impact of 77.4% on total sales, remains the most important geographical area for the Group.

By virtue of the very strong growth in sales achieved in Italy in 2021 (+39%, equal to € 90.8 million), the percentage of exports dropped slightly to just over 81%.

Among the countries that recorded the greatest increases in 2021, we note in particular France, Poland, the Czech Republic, Germany, China and the USA. The performance in Denmark was very negative, after the exploits of previous years; Finland and Turkey also fell significantly, due to some specific projects.

In 2011, the “Components SBU” achieved a turnover of € 275.6 million, with a growth of 38.6% in all application segments. Performance was mainly driven by heat exchangers applied to refrigerated display cabinets for supermarkets, heat pumps, refrigerated transport and energy-efficient dryers.

The “Cooling Systems SBU”, on the other hand, grew by 7.1% with a turnover of € 207.5 million, by virtue of an uneven trend in the various application segments.

Commercial and industrial refrigeration (once again the result of the growing presence in highly energy efficient natural fluid applications) and data centre applications recorded growths of +20% and +17% respectively.

There was a sharp slowdown in “district heating” projects (linked to the lack of incentives in a very specific market).

The “industrial cooling” segment, after a bad start due to the dragging of the negative effects of the pandemic (-18% at the end of the first half), then showed a good recovery in the second half of the year, reducing the decrease to -7%, but with an order book (at the end of 2021) back in line with historical averages, thanks to the unblocking of some large projects that had been subject to continuous postponements since spring of 2020.
On the sales side, the extraordinary supply conditions led for the first time in the history of the Group to increase sales price of ventilated products three times during the calendar year and again at the beginning of 2022.

The “Components SBU” applies an automatic sales price adjustment mechanism which proved its validity during the year, but was started, together with customers a process of revision of some rules and operating parameters, to take into consideration the changed market conditions.

During 2021, the rationalization program continued for the range of ventilated appliances for commercial and industrial refrigeration, with the launch of new “indoor” product lines and with the creation of a shared platform for “outdoor” appliances that use natural fluids. In the United States, construction of the first lot of the new plant was completed in March. In May, in full compliance with the schedule, the production of exchangers was started for which a multi-year agreement with an important customer had been signed in the previous months. At the same time, in the early months of the year, in view of the delay caused by the pandemic in the development of growth plans in the country, the Board of Directors decided to reschedule the timing of the next steps for the expansion of the new factory by negotiating an extension of the lease on the original site on which the subsidiary Zyklus operates.

Starting from August, Spirotech’s Indian plant progressively launched the production capacity back-up plan to support the European of the “Components SBU” factories. The program envisages the transfer of some customers/product lines, in order to dedicate the factories in Europe to products with higher added value, with higher levels of customization and with medium-small production batches.

Read the full report