Letter to the Shareholders

Dear Shareholders,

Yet again, in the fiscal year 2017 Interpump Group posted record results. Net sales reached €1,086.5 million, after eight years of uninterrupted growth. Therefore the commitment made in 2014 – to reach one billion in sales by the end of 2017 – was thus more than fully honored.

EBITDA rose to €248.6 million. The most flattering result is a further increase in the EBITDA/Sales ratio, mainly as a consequence of our ongoing effort to optimize the structure of the Group and the organization of production.

Among the factors that made these results possible, we can also register a sound upswing in the hydraulic component market, which was caught by companies in the Interpump Group better and sooner than many of their competitors. We are pleased to note that our management model, which brought good results in difficult market scenarios, allows to maximize performances in much better times.

With the acquisitions of 2017, the Water-Jetting division extended its activity to the manufacturing of flow-handling components for the Food, Cosmetics and Pharmaceutical industry, complementary to our Bertoli-branded homogenizers. This choice introduces new, strong sales synergies; moreover, thanks to the international branches of Inoxpa – one of the companies acquired – Bertoli homogenizers and Mariotti&Pecini magnetic transmission agitators can now count on a worldwide distribution platform.

These sectors represent a further, significant diversification of our business, and are renowned for their very low cyclicality.

We are pleased to report that the following results achieved during the year:
- Sales were up 17.7% compared to the FY2016 (thanks to organic growth of +9.3%, currency exchange effect of -0.7%, and a further +9.1% due to acquisitions). Hydraulics sector was up 15.8%, and Water-Jetting up 21.4%;

- EBITDA reached €248.6 million, or 22.9% of sales, with a growth of 25.3% in absolute terms (of which +16.0% organic, -1.2% currency exchange, and +10.5% due to acquisitions). Both sectors registered a profitability record, with EBITDA margins of 20.9% in Hydraulics and 26.2% in Water-Jetting;

- Free cash flow was €93.6 million compared to €89.9 million in the previous year;

- Consolidated Net Income was €135.7 million, with a growth of 43.7%

During the year, the Group has spent €89.1 million in acquisitions and €47.8 million in capital expenditure to increase production capacity and keep up to speed with technology. The increase in net debt was limited to €16 million (from 257.3 to 273.5), as proof of the Group’s cash generation capability. Financial leverage, expressed as Net Debt / EBITDA, was 1.1x at the end of the year – a very reassuring level no matter what the expectations on interest rates may be.

External growth

Three acquisitions were made in the course 2017.

Inoxpa is a manufacturer and seller of process equipment and flow handling systems for the food, cosmetics and pharmaceutical industries, with a brand well known all over the world. The acquisition significantly widens and integrates the products of the Water-Jetting division, which is now able to supply – besides Bertoli-branded homogenizers, a wide range of pumps, valves, mixers, processing systems and accessories. All products are manufactured in stainless steel and compliant with the strict requirements of the food industry. Headquarter is near Girona, in Spain, with international subsidiaries in 16 more countries.

Price paid was €90 million; at the time of acquisition, the company had registered sales for € 60 million and € 14 million of net liquidity.

Mariotti & Pecini is the Italian specialist in manufacturing of agitators (industrial mixers), also suitable for special applications in the presence of pressure/temperature constraints or dangerous fluids; thanks to the Magna-Safe® magnetic drive technology, they can be employed in production processes requiring complete isolation from the environment of the fluid being handled.
60% of the company was acquired, for a consideration of €8.9 million (partly paid for in Interpump shares). The company, headquartered near Florence and now a part of Water-Jetting division, had yearly sales of ca. € 8 million and an EBITDA margin of 33%, with € 1.1 million of net liquidity.

Fluid System 80 strengthens Interpump’s positioning in the hydraulic power pack market, where the Group is present since 2001 with the Hydroven brand. Products of Fluid System, headquartered near Udine in Italy, are employed in various industries: mechanical, iron & steel, construction machinery. The price paid was € 0.9 million, with annual sales of about € 6 million.

Moreover, in the last days of the year, Interpump announced the signing of a binding agreement for the purchase 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 was finalized in the first months of 2018, brought to Interpump the historical leading brand in non-welded pipe assembly technologies, and enhances the magnitude and international footprint of our hoses/fittings business; thanks to synergies with many other companies in the Group, GS-Hydro’s profitability is expected to improve already in the first year.

Strategies for 2018 and future years

Interpump Group plans to keep growing with no change in strategy. All resources generated after shareholders’ remuneration will be employed for growth, both organic and through acquisitions, with the goal of increasing the already high level of diversification among markets and applications, keeping at the same time a very lean organizational structure that allows for flexibility and quick decision-making.

The availability of financial resources is guaranteed by the high level of liquidity, low financial leverage, and strong generation of free cash flow, maximized – as usual – by stringent cost control and prudent finance management.


The Board of Directors has proposed that the shareholders' meeting distribute a dividend of 21 euro cents per share (20 euro cents in the prior year).

If approved, the dividend will be payable on May 23, with May 21 as the ex-dividend date (record date May 22).

Thank you for the trust you have put in Interpump Group S.p.A. Through the efforts of all our personnel and my own personal commitment, it is my conviction that the Group will continue to generate adequate resources the growth of its business, and the performance of your investment.


Cordially yours,

Sant’Ilario d’Enza (RE), April 2018



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 2018  


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