Egm under the X-ray: Misitano&Stracuzzi's essences show a 48.4% increase in profits

Ebitda jumped by 35.7% to EUR 8.4 million, ebit by 39.4% to EUR 7.7 million, and net profit by 48.4% to EUR 5.1 million. This was mainly due to a cost of sales that fell by 2.4% to EUR 20.8 million, depreciation and amortisation that rose only slightly (from EUR 643,000 to EUR 672,000), and a tax rate that fell from 30.8% to 27.9%. Net financial expenses increased from €403,000 to around €693,000, in the presence of a net financial debt of €25.2m, compared to €15.1m at the end of 2023, due to the increase in working capital from €16.3m to €26.1m, as well as the aforementioned investments in production facilities, but also to the distribution of a €5.2m dividend in April (pre-listing), which corresponds to a 73.4% pay-out on the €7.08m net profit achieved in 2023. No specific dividend policy has been indicated for the future.

As at 30/6/2024 the Debt/Equity ratio was 1.79 times, thus relatively high, but of course not yet including the IPO proceeds. Which, given also the major investments planned for the two new plants, are particularly strategic. And precisely on the subject of strategy, at the beginning of August the new Strategic Advisory Board was set up, consisting of experts from outside the company, and the first two members were appointed (the third will be announced by the end of 2024): Bhavesh Shah (with experience at Procter & Gamble and Firmenich) and Alain Frix (formerly at Symrise), thus coming from some of Misitano & Stracuzzi's main customers.

The Sicilian company is facing quite fierce competition, mostly from Sicilian and Calabrian companies, none of which are listed and mostly smaller in size (with the exception of Capua 1880 Srl and Agrumaria Reggina Srl in Calabria). It will therefore have to leverage on production and commercial expansion, on the high level of internationalisation already achieved (but the aim is to enter new markets such as India and the Gulf countries) and on the consolidated 'loyalty' of its main customers, who have been using Misitano & Stracuzzi products for over 25 years.

With reference to the ESG aspects, a sustainability report is not yet drawn up (however, the calculation of direct and indirect CO2 emissions has been started in 2023), but ISO 14001 certification has been obtained on the environmental management system and citrus fruits are only purchased from local farms that practise sustainable agriculture; furthermore, 80% of the citrus fruits processed come from Global A.P./GRASP certified suppliers, an international standard that certifies both the sustainability of the production cycle and the food safety of the products. Particularly interesting is the fact that the processing waste (35-40% of the pulp is used to produce juices and the peel for essences) is not disposed of as waste but put on the market for the production of biofuels, for pet food and for the extraction of pectin. And a study has been launched with the University of Messina for the potential use of such waste as a complement to or replacement for cotton, paper and plastic.

The market has welcomed the company (the share price remains well above the IPO price of EUR 2.92 per share). Now Misitano & Stracuzzi's first 'goal' is to achieve an ebitda of at least EUR 15.1 million in the current financial year (a value that is undoubtedly within reach given the first-half figure), in which case the 3.6 million Price Adjustment Shares will be converted into the same number of ordinary shares. As is the case, however, with most of the companies on Euronext Growth Milan, the free float is decidedly low at 14.8% of the share capital. But it is still a start. Misitano & Stracuzzi has opened itself up to investors, unlike its three compatriots who landed in Elite in 2019, including a well-known name to the public such as Condorelli.