KPS box

Since July 2021, the Metra Group, based in Rodengo Saiano (BS), has been part of the KPS Capital Partners private equity fund based in New York (USA). The KPS fund manages a total portfolio of approximately 14 billion dollars invested in 20 companies with more than 230 plants employing more than 53,000 employees in 27 different countries. The partners of KPS Capital Partners have been operating on the market for more than 30 years with an approach characterized by a family culture oriented towards teamwork and cooperation.
The control of the Metra group takes place through the Dutch holding company Fengari (see below) which also controls the American company Profile Custom Extrusion Inc. based in Rome, Georgia, active in the extrusion and finishing of aluminum profiles for the North American market. The management and operational and strategic coordination of the Fengari group as a whole are entrusted to the management of the Metra group to which the personnel report via a matrix-type organizational model. The Metra/Fengari group has approximately 1,150 employees in Italy, Canada and the United States.

Fengari Balance Sheet 2022

The performance of the aluminum extrusion market in 2022 was characterized by two very different semesters. In the first period of the year, the Russia-Ukraine conflict created a strong concern about the lack of raw materials on the European market resulting in a rapid rise in their values on the London Metal Exchange (also favoured by energy shocks). This phenomenon has strongly conditioned the purchasing dynamics of extrusions both in Italy and in Europe where the majority of customers wanted to secure themselves by buying more material than in previous years, both for a de-risking policy and for an effective incremental demand of their markets. Consequently, the extrusion sector in general recorded a very positive first half with some end markets growing by double digits compared to 2021, while the second part of the year saw a sharp slowdown in orders and a repositioning of prices which, however it did not affect the overall results for the year.
The 2022 financial year ended for the Fengari group (Metra +Profile) as a whole with a total turnover of 596 million euros, a net result of 19 million euros and an EBITDA margin of 60 million euros equal to 10 % of turnover. The Group’s net financial position improved during the year, going from 107 million euros at 31 December 2021 to 84 million euros at 31 December 2022. The financial leverage (ratio between the Net Financial Position and EBITDA) underwent a significant improvement, going from 2.96 in 2021 to 1.68 in 2022.

 

Metra Balance sheet 2022

At the level of the Metra Group alone (therefore without considering the American company Profile) it closed the year with approximately 66,806 tons of aluminum sold, an increase of 8% compared to last year. Turnover in Euros recorded a significant increase (+50%) going from 328 million euros in 2021 to 493 million euros in 2022. The change is due to the higher volumes delivered but also to the increase in prices of sales linked to the generalized cost of all production factors, primarily raw materials and energy, but also a significant increase in personnel costs due to the use of night and holiday shifts on all plants (during 2022 they worked at full capacity for most of the year).
The energy component (electricity and gas) underwent an increase of +73% measured as cost per ton sold), lower than the market growth because it was mitigated by hedging operations carried out before the outbreak of the energy crisis (consumption was covered on average at 50 % with peaks of up to 80%) and thanks to the tax credits available on the basis of the various legislative provisions that have followed one after the other (approximately 3.5 million euros of contributions were accounted for during the year).
The 2022 financial year for the Metra perimeter closed with a net consolidated profit of 19.2 million euros (2021 profit: 8.7 million euros). Consolidated Gross Operating Margin (EBITDA) amounted to EUR 49 million, an increase of 52% compared to the previous year (EBITDA 2021: EUR 33 million). The final data of the consolidated financial statements of the Metra Group for the year that has just ended are better than the industrial plan approved by the Board of Directors (turnover: +14% – EBITDA: + 29% – Net Profit: + 55%).

Improvement projects and investments

In 2022, a “continuous improvement” plan was implemented at an industrial level from a Lean Manufacturing perspective of performance in the production sector with a particular focus on reducing costs and increasing product quality thanks to flow optimization and inventory reduction of warehouse. As part of the activities to improve the governance and risk control system, the organizational models compliant with the provisions of Legislative Decree 231/01 were implemented at all the Italian companies of the Metra Group and at the Canadian subsidiary Metra Aluminium where steps were taken to adopt the group code of ethics and conduct and to develop specific procedures on anti-corruption, antitrust, export control and conflicts of interest.
On the Information Technology front, a significant effort was made to increase Cyber Security also thanks to a mandatory training plan for personnel on the subject in collaboration with Fasternet, the implementation of the Salesforce system for the management of commercial activities (CRM) and the new payroll and attendance management platform was activated with the provider Intelco. With regard to the activities related to the application of technologies in the industry 4.0 field, projects continued to connect the main plants to the SCADA (Supervisory Control and Data Acquisition) and Stain data collection tools for the collection of production data, the analysis of OEE (Overall Equipment Efficiency) and preventive maintenance. During the year, the Metra Group undertook the certification process aimed at qualifying the environmental impact of the secondary aluminum billets of its own production with the use of recycled aluminum (ISO 14067 (CFP – Carbon Foot Print – to certify the low impact of CO2 emissions per ton of aluminum produced) and EN 15804 (EPD – Environmental Product Declaration – to certify the Life Cycle Assessment of billets). In the Canadian plant of Laval of Metra Aluminium, the preheating furnace and the cutting plant of the 9″ press were replaced and again in Canada at the Alma (Quebec) plant, the 3,000-ton press restoration activities continued. Again, in Canada, the negotiations for the three-year renewal of the work contract concluded positively at the end of 2022. The total value of the investments completed in 2022 at group level Fengari consolidated was 19.6 MEuro.

Markets and main orders acquired in 2022

The Metra Group’s strategy of operating with two highly specialized divisions was consolidated and strengthened also in 2022, with the aim of responding even more effectively to the specific needs of the markets for industrial applications and construction.
Metra Industry is the business unit dedicated to extruded, machined and welded aluminum profiles in the industrial sector for the following markets: railways, mechanics, automobile, pneumatics, furniture and lighting. METRA Building, on the other hand, specializes in integrated aluminum systems for the construction of residential and commercial projects and buildings designed by the most prestigious architects. It is made up of two main areas: Systems, dedicated to integrated products and systems catalogue, and Architectural Solutions, specialized in large custom projects for the world of architecture.

70% of the 2022 turnover was achieved by the Industry division and the remaining 30% by the Building division; overall, 45% of the turnover was achieved in Italy, 36% in the USA and Canada and the remaining 19% in the rest of Europe.

The railway sector accounted for about 20% of the orders acquired in 2022 thanks to ambitious projects with the main European train manufacturers such as HITACHI, ALSTOM, SIEMENS, TITAGRAH.

For this sector, sub-assemblies such as roofs or complete carriage floors are mainly supplied, welded and mechanically machined at the Rodengo Saiano and Montale (PT) plants. In the automobile field, the project for the battery pack of the Maserati Grecale Folgore and the supplies of extruded body in white components that are mounted on Ferrari, JLR and Aston Martin should be mentioned. About 30% of Metra Industry’s turnover is instead destined for the mechanical end market, with custom-made special components for the leading companies in the sector present in Italy, Europe and many of which are excellences of Lombardy.

METRA Building, on the other hand, through its two divisions, has guaranteed and confirmed the excellence and quality of its integrated aluminum systems which have found application in projects on a global scale.
The Building Systems division has developed a complete range of products aimed at the premium residential market; among these, the Minimal line stands out, which guarantees maximum thermal and acoustic insulation performance in perfect coherence with contemporary design trends. Proposed in both casement windows and large panoramic sliding windows, the Minimal line allows the creation of solutions of great aesthetic value, which lend themselves to the construction of modern and innovative architectural complexes. Among the most interesting creations developed with Systems products we want to point out the creation of the glass cube within the historical context of the monumental complex of the Rocca di Lonato del Garda (see photo).
Alongside the Systems division we find the Architectural Solutions division with some of the most recognized and iconic achievements on a global level: from the Vertical Forest to the Louvre Pyramid, from the great buildings of London to those of New York, including the new Rolex headquarters on 5th Ave.

Activity performance Q1 2023
The first months of 2023 got off to a positive start as regards the saturation of the production capacities of the larger presses and the related sales volumes, while they proved to be weaker with reference to the smaller presses where the competition is more crowded and urgent. In general, the Group is maintaining good margins and cash generation capacity thanks also to the aforementioned efficiency improvement projects and the ability to transfer the inflationary effects of costs to the market.
In the general framework characterized by the aforementioned elements of strong uncertainty, the Metra Group is continuing to work to meet commitments and objectives, maintaining a constant focus on the efficient management of its economic and financial structure in order to respond effectively to the challenges of 2023, for which the investment plan of 26 M euro has been confirmed, an increase of 33% compared to 2022.