Letter to the Shareholders

Dear Shareholders,

2018 marks the ninth consecutive fiscal year of growth for our consolidated sales.

Thanks to this increase, and to the ongoing optimization work of the Group’s activities, historic records were reached also by EBITDA and Net Income.

All application sectors and geographical areas, in both Water-Jetting and Hydraulics divisions, registered positive trends well beyond the initial expectations; our results for the year further amplified this trend thanks to Interpump Group’s production flexibility, both in terms of product mix, and in terms of tuning and fast expansion of capacity.

As planned, the early 2018 acquisitions underwent immediate industrial and commercial restructurings which required an extraordinary effort but are already showing positive effects at a few months’ distance. This approach to acquisitions should be seen as integrating, and certainly not replacing, our trademark strategy: the Group is busy as always looking for successful companies that can enrich the consolidated results right from the day they are acquired. This search already brought some fruits at the end of the year and in early 2019.

We are pleased to remind you the following results achieved during the year:
- Sales were up 17.7% compared to the FY2017 (thanks to organic growth of +13.7%, despite currency exchange effect of -2.6%, and with a further +6.6% due to acquisitions). Hydraulics sector was up 22.2%, and Water-Jetting up 9.9% (respectively +15.6% and +10.4% at unchanged perimeter and exchange rates);

- EBITDA reached €288.5 million, or 22.6% of sales, with a growth of 16.0% in absolute terms (of which +17.4% organic, -3.0% currency exchange, and +1.6% due to acquisitions). At unchanged perimeter both sectors registered a profitability record, with EBITDA margins of 21.6% in Hydraulics and 26.9% in Water-Jetting;

- Free cash flow was €82.2 million compared to €93.6 million in the previous year, reflecting an increase in investments (net capex) of more than €20 million;

- Consolidated Net Income was €173.9 million, with a growth of 28.1%. Net of one-off items for both years, the increase was 25%.

During the year, the Group has spent €21.1 million in acquisitions, €54.2 million in purchase of own shares, and €68.2 million in capital expenditure to increase production capacity and keep up to speed with technology. However, the increase in net debt was limited to €13.8 million (from 273.5 to 287.3), as proof of the Group’s cash generation capability. Financial leverage, expressed as Net Debt / EBITDA, was less than 1x at the end of the year – a level below our historic average, leaving ample space for additional resources should they be required by future acquisition opportunities.

External growth

Three acquisitions were made during 2018.

In April we closed the acquisition of the manufacturing unit and most international subsidiaries of Finland-based GS-Hydro, a world leader in design, execution and maintenance of piping systems in the industrial, marine and offshore sectors. The acquisition of these companies, along with their brand’s decade-long leadership in non-welded pipe assembly technologies, significantly enhanced the magnitude and international footprint of our hoses/fittings business; as to the profit margins, a deep and far-reaching restructuring process was immediately started, to ward off the negative effects of the bankruptcy of the seller. The acquired companies entirely sustained the costs for their own restructuring with profits generated during the year, with no impact on the Group’s finances, and even providing cross-selling opportunities for our subsidiaries in rubber hoses (Hydraulics sector) and high-pressure pumps (Water-Jetting sector). Naturally, GS-Hydro will give a positive contribution to the Group’s EBITDA starting from 2019.

August saw the acquisition of Ricci Engineering, a promising start-up which designs, builds and installs plants for breweries and winemakers. The company mainly operates in the promising business of micro-brewery plants, a new and fast-expanding market, and will soon be absorbed by Interpump Group S.p.A.

In December it was the turn of the Spanish company Fluinox. This Valencia-based company designs, manufactures and installs systems and components for the cosmetics, food, pharma and chemical industries; their specific experience in the treatment of powders and pastes represents an ideal integration for the skills and product range of Inoxpa, in which it will be absorbed by the end of the current year.

Strategies for 2019 and future years

The results of the 2018 FY have demonstrated once again the sustainability and value of our management and growth strategy. We will keep employing all resources generated – after shareholders’ remuneration – for growth, both organic and through acquisitions, possibly increasing the already high level of diversification among markets and applications, while at the same time maintaining a very lean organizational structure that allows for flexibility and quick decision-making.

As usual, the combination of strong cash flow, prudent leverage and stringent cost control will grant the highest degree of operational freedom in industrial management.


The Board of Directors has proposed that the shareholders' meeting distribute a dividend of 22 euro cents per share (21 euro cents in the previous year).

If approved, the dividend will be payable on May 22, with May 20 as the ex-dividend date (record date May 21).

I wish to thank you for the trust you have put in Interpump Group S.p.A. and would like to guarantee my own commitment, along with that of all our personnel, in pursuing consistent and reasonable growh of our business and – as a consequence – of the value of your investment.


Cordially yours,

Sant’Ilario d’Enza (RE), April 2019



Fulvio Montipò
Chairman and CEO

The manager responsible for preparing company accounting documents, Carlo Banci, declares, pursuant to the terms of section 2 article 154-(2) of the Italian Consolidated Finance Act, that the accounting disclosures in this document correspond to the documentary evidence, the company books and the accounting entries.

Sant’Ilario d’Enza (RE), April 2019  


Carlo Banci
Manager in charge of drafting the company’s accounting documents