ANNUAL REPORT 2014

ANNUAL
REPORT
2014
www.manulirubber.com
www.manuli-hydraulics.com
www.fluiconnecto.com
PEOPLE DON'T CARE
HOW MUCH YOU KNOW
UNTIL THEY KNOW
HOW MUCH YOU CARE
- THEODORE ROOSEVELT -
3
SUMMARY
06 Message from the President
08 Corporate Mission & Values
10 2014 Financial Highlights
12 Board of Directors, Statutory & Independent
Auditors and Corporate Governance
14 Corporate Citizenship
16 Quality, Environment, Health & Safety
18 MRI Group Overview
20 MRI Group Organization
22 Research & Innovation
24 Fluiconnecto by Manuli
26 Manuli Hydraulics
28 Oil & Marine Division
30 2014 Financial Statements
5
MESSAGE FROM THE
PRESIDENT
Dardanio Manuli - Chairman and Chief Executive Officer
Regardless of which definition one may choose - we very much
like Larry Summer’s “Secular Stagnation” - it seems that the world
economy has entered into a “new normal” in which both
industrialized countries and emerging markets, with few
exceptions, fail to deliver meaningful growth.
Margins were under pressure, from both lower volumes
and negative exchange rate consolidation effects,
resulting in EBITDA of Euros 46.5 millions (14.2% of sales).
On the contrary both Net Profit (Euro 15.1 millions) and NFP (Euro -85.0 millions) improved
markedly, allowing the company to maintain healthy financial ratios.
Consistently with this scenario, the year 2014 came, just like its
predecessors, with high expectations, which were dashed
as time went by, in a familiar pattern that has been repeating
itself since at least 2011.
Under these circumstances the Group focused strongly on improving the internal operations
through both capex and organizational changes.
For the Manuli Hydraulics Division this has meant a particular focus on upgrading
the manufacturing plants quality standards, completing the implementation
of Q1 (ISO TS 29001), while the Fluiconnecto Division has continued to invest in human capital
at its headquarters, recently established in Rotterdam (Netherlands).
The headwinds have been felt strongly across most markets.
Europe has stagnated while China experienced a significant
slow down, the construction industry being hit particularly
hard, this subsequently caused a slide in commodity prices
that ultimately negatively affected the Emerging Markets’
economies in a domino effect.
The energy sector, a rare bright spot at the beginning
of the year, joined the downturn in the second part,
which saw strong price declines for both oil and gas.
The US economy was the only one to show real growth potential.
This was reflected in the USD-EURO exchange rate,
with a beneficial (from a European perspective) strengthening
of the US currency beginning in the last quarter only.
Against this backdrop Manuli Rubber Industries
consolidated sales amounted to Euros 327 millions,
a 2% decrease versus the record sales of the previous year.
6
Innovation, a traditional strong point of our Group, has also continued to be a major focus,
this has resulted in significant range extensions and product upgrades for all market segments
and for extreme working conditions. Furthermore, through the Fluiconnecto Division,
the Group has initiated several activities aimed at innovating and enlarging the range of services
it provides with along the tradition product offer.
Our commitment to growth outside of our home markets, despite the current turmoil,
was reflected in a new venture in Peru, one of the most promising Latin American countries,
where Fluiconnecto acquired control of Talleres Hydraulicos, a leading provider of products
and services to the mining industry.
Looking ahead, the continued weakness of demand in China and the anemic growth in Europe
do not bode well for capital investments across the natural resources and construction industries.
Our Group will therefore have to confront the challenge of stagnating demand by putting
customer centrality at the core of everything that we do. The management team is therefore
fully committed to improve the operations and to provide the customer with a broader
and better choice of products and services.
7
CORPORATE MISSION
& VALUES
CORPORATE MISSION
MANULI RUBBER INDUSTRIES
(MRI), ESTABLISHED IN 1935, IS A
MULTINATIONAL CORPORATION
WITH TWO DISTINCT GLOBAL
ORGANIZATIONS:
MANULI HYDRAULICS,
focused on achieving excellence
in the design, manufacture and
sale of machines and fluid conveying
rubber/metal components for high
pressure hydraulics and oil
& marine applications.
FLUICONNECTO BY MANULI,
is a leading international service
organization, focused on high
pressure fluid connectors, providing
products and application knowledge,
as well as maintenance services,
to all market segments through
a global network tailored to local
conditions.
Manuli Rubber Industries is
committed to deliver sustainable
value to its stakeholders, through
excellence in innovation,
quality and service.
8
CORPORATE VALUES
CUSTOMER CENTRALITY
Manuli Rubber Industries’ basic values are expressed
in five guiding principles
The Customer is at the center of all our improvement targets.
Consequently, the attitude and behavior of each and every
member of our staff must lead to its attainment.
OPEN & TRANSPARENT
INFORMATION
BUSINESS ETHICS
DRIVING FORCE
TOTAL QUALITY
CORPORATE
VALUES
ENVIRONMENTALLY
COMPATIBILITY
SUSTAINABLE VALUE
TOTAL QUALITY
CUSTOMER
CENTRALITY
ATTITUDE
& BEHAVIOR
HUMAN RESOURCES
CENTRALITY
INVESTMENT
The total quality of the Company’s processes
is an essential virtue steadily pursued.
This value is the driving force for the whole company’s
relationships with the external context and the market.
SUSTAINABLE VALUE
The Group pursues sustainable development through the creation
of wealth, which must be environmentally compatible.
BUSINESS ETHICS
Actions and behaviors are inspired by ethics and morally-based
criteria, adopting a policy based on open and ‘transparent’
information and communication channels.
HUMAN RESOURCES CENTRALITY
Knowledge, skills, competences of personnel at the different levels of hierarchy
and responsibility, represent the fundamental strategic lever for the achievement
of business development and profit objectives.
Therefore, investing on human resources is a strategic business priority.
9
2014 FINANCIAL
HIGHLIGHTS
37%
2014 NET SALES
BY BUSINESS AREA,
IN PERCENTAGE
CONSOLIDATED
GROUP FIGURES
57%
Millions of Euros
2010
2011
2012
2013
2014
NET SALES
Growth rate %
269.4
32%
320.1
19%
314.7
-2%
335.0
6%
327.2
-2%
EBITDA
% on net sales
48.4
18%
53.9
17%
45.0
14%
51.4
15%
46.5
14%
EBIT
% on net sales (ROS)
29.7
11%
30.9
10%
21.9
7%
30.2
9%
29.1
9%
Net Result
% on net sales
20.2
7%
18.8
6%
8.7
3%
13.0
4%
15.1
5%
Cash flow (self financing)
39.7
43.2
31.7
28.4
32.1
Net capital employed
200.5
214.3
237.3
246.2
241.0
Net financial position
(90.9)
(94.6)
(112.8)
(107.2)
(85.0)
Group Shareholders’
equity
108.6
118.9
123.7
125.1
141.7
Average workforce
(employees + temporary
workers)
Capital expenditure
2,324
2,588
2,651
3,069
3.150
6%
AMERICAS
18%
MIDDLE EAST
& AFRICA
15%
EUROPE
49%
ASIA PACIFIC
18%
400
NET SALES
TREND
320,1
314,7
2011
2012
335,0
327,2
2013
2014
269,4
250
200
150
100
11.9
18.1
12.8
13.2
8.7
50
0
10
Millions of Euros
350
300
2014 NET SALES
BY GEOGRAPHICAL
AREA, IN
PERCENTAGE
2010
11
BOARD OF DIRECTORS, STATUTORY
AUDITORS, INDEPENDENT AUDITORS & CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
In office for the three-year period
Dardanio Manuli
Mario Manuli
Matteo Marchisio
Luca Coccioli
Maurizio Cossalter
Alessandra Manuli
Antonella Manuli
Sandro Manuli
John Munro
Giuseppe Pirola
Salvatore Vicari
2014-2016
Chairman & CEO
Managing Director
Managing Director
Director
Director
Director
Director
Director
Director
* Director
Director
* Replaced by Elisabetta Manuli
BOARD OF
STATUTORY
AUDITORS
In office for the three-year period
2014-2016
from Sept. 24, 2015, further to
his resignations.
Carlo Ticozzi Valerio
Giovanni Borgini
Nicolino Cavalluzzo
Giorgio Ferrante
Tiziana Stracquadanio
Chairman
Auditor
Auditor
Auditor
Auditor
INDEPENDENT AUDITORS
In office for the three-year period
In accordance with its mission and with the aim of assuring the utmost transparency of the actions
of company management, Manuli Rubber Industries has defined an articulated system of rules
of conduct concerning both its organizational structure and relations with stakeholders,
such rules being in compliance with the highest standards of corporate governance.
More specifically, the Company adopts the traditional system of administration and control,
with its corporate bodies being the Shareholders’ meeting, the Board of Directors and the Board
of Statutory Auditors.
Manuli Rubber Industries’ Corporate Governance system is based on the following: (i) the central
function of the Board of Directors, responsible for the strategic guidance and supervision of the
Company’s overall business activities; (ii) an effective internal control system, starting from the
functions allocated to the Board of Statutory Auditors and to a specific Internal Audit Committee;
(iii) a remuneration system, in general, and an incentive system, in particular, associated with medium
and long-term economic targets in order to align the management’s interests with the shareholders’
interests, as established by a dedicated Remuneration Committee.
The governance system is formally defined in the Company Bylaws, in the Code of Ethical Conduct,
in the Anti-Corruption Code and in a series of principles and procedures which are updated
periodically to assure best practices.
The system states roles, duties and competencies of each organizational structure of the Group,
as well as compensation systems, procedures and policies for the internal auditing and all employees,
designed to reduce inefficiencies and to monitor the conduct of the management and the Group.
The Code of Ethical Conduct’s and the Anti-Corruption Code’s main objective is to instill correctness,
equity, integrity, loyalty and professional rigor into operations, conduct and relationships inside
and outside the Group while focusing on legal compliance and regulations within the countries where
the Group is active. This ethical approach is a prerequisite for consolidating the Group’s credibility
and transforming the knowledge and the application of the Group’s codes into a competitive edge.
Updated documents are available through the pages of www.manulirubber.com web site.
2012-2014
Deloitte & Touche S.p.A. Via Tortona, 25 - 20144 Milano, Italy
12
On April 16,2015 the general shareholders meeting appointed KPMG,
Via Vittor Pisani n. 27, 20124 Milano (Italy) as independent Auditors
for the three-years period 2015-2017.
13
CORPORATE
CITIZENSHIP
MANULI RUBBER INDUSTRIES
HAS ALWAYS EXPRESSED
AN INTEREST IN THE
SOCIAL-SERVICE SECTOR AND
HAS BEEN ACTIVE MAINLY
THROUGH THE SUPPORT OF
SELECTED NON-PROFIT
ORGANIZATIONS COMMITTED
TO VALUABLE INITIATIVES IN
THE CULTURAL AND HUMAN
HEALTH FIELDS.
The Manuli Foundation - Onlus, a non-profit organization, established
in 1992 based on the desire of the Manuli Rubber Industries Founder,
Engineer Dardanio Manuli, to give support to families with a member
affected by Alzheimer’s disease. In order to adequately respond to the
local geographic area’s needs in this vitally important field, the Manuli
Foundation has since 1994 made available more than 250,000 hours
of free assistance at home, through the use of professional volunteers
and workers with geriatric specialization.
http://www.fo ndazione-manuli.org
During the course of 2014, Manuli Rubber Industries continued to
contribute to the not-for-profit trust FAI - Fondo per l’Ambiente Italiano
(Italian National Trust), set up in 1975 and has since gone on to save,
restore and open to the public numerous fine examples of Italy's artistic and natural heritage.
FAI is aimed at promoting a tangible culture of respect for Italy's natural heritage, art, history
and traditions. On the other, it is focused to protect a legacy that forms a fundamental part
of the roots and identity of the Italian people. http://www.fondoambiente.it
In the most-specialized field of research, Manuli Rubber Industries has continued to support
the IEO - European Institute of Oncology - established in 1987 with the aim of creating a
“comprehensive cancer centre” with research laboratories and clinical services. The first activities
commenced in 1991 and in 1994 the current site was officially opened and clinical work started.
It has been a private non-profit IRCCS since 1996. IEO has three core activity areas:
• Clinical work Research
• Training
• Education
IEO is one of Italy’s 47 research hospitals and treatment centres (IRCCS) dealing with specific
disease sectors, and is part of Italy’s National Healthcare Service.
http://www.ieo.it
With the acquisition of Hyspec Mining Services we are
honoured to report their 13 years of commitment in West Ghana
to Adullam Orphanage.
Packages of clothes and toys, donated by many families from a school in Perth (Australia)
are collected and shipped to Ghana for the direct delivery, done by Hyspec Ghana employees.
Adullam Orphanage is a residential children’s home based in Obuasi in the Ashanti Region of Ghana,
West Africa. It was founded in 1996 by Australian born Pastor Louise and Drew Timothy.
Adullam is registered as a non-governmental organization.
Adullam is the only orphanage in Obuasi, and is only one of four registered orphanages in the
country of Ghana, the other three being run by the government.
http://www.adullamorphanage.org
14
15
QUALITY, ENVIRONMENT,
HEALTH & SAFETY
QUALITY
DURING 2014,
THE CONTINUOUS IMPROVEMENT
ACTIVITY MANAGED BY
ANY PLANT OF THE GROUP
FURTHER INCREASED
THE PRODUCT QUALITY LEVEL,
REDUCING THE FIELD
COMPLAINT RATE WITH THE
SINGLE TARGET OF CUSTOMERS
SATISFACTION.
ENVIRONMENT, HEALTH AND SAFETY
Thanks to the Quality Help Desk web platform, Manuli Hydraulics
can provide consistent and reliable data to identify and monitor
appropriate Key Performance Indicators.
The trend is confirming a positive impact of management actions,
such as:
• new technologies for process robustness and on line defects
detectability
• best practices standardization among plants
• increased end of line Quality checks for an immediate problem
solving activity
• more effective training programs of personnel
The positive renewal of various type approvals (ABS, BV, DNV, LR,
RINA, GL, KRS, Polish-B-MARK) can be mentioned as the proof
of a state of the art performance and quality of MH products.
Manuli Hydraulics connectors plants achieved the API 5L approval,
which sets them apart in machining technology for the
Oil & Gas industry.
MRI CORPORATION PURSUED ITS SUSTAINABLE
DEVELOPMENT MODEL THROUGH THE ENGINEERING
OF PRODUCTS AND OPERATIONAL METHODS WITH LOW
IMPACT ON THE ENVIRONMENT AND PEOPLE’S HEALTH,
MAINTAINING AND DEVELOPING THE EXISTING
CERTIFICATIONS.
ISO 14001: 2004 certified plants
Manuli Rubber Industries – Italy - Hydraulic Hoses
Manuli Rubber Industries – Italy - Oil & Marine Hoses
Manuli Hydraulics (Suzhou) – P.R.C. - Hydraulic Hoses
Manuli Hydraulics (Suzhou) – P.R.C. - Hose assemblies
Manuli Hydraulics Polska – Poland - HY Connectors, Refri & A/C systems
Manuli Hydraulics UK – United Kingdom - Hose assemblies
Manuli Hydraulics Europe – Czech Rep. - Hose assemblies
Manuli Hydraulics Korea – Korea - Hose assemblies
Manuli Hydraulics India - India - Hose assemblies
OHSAS 18001:2007 certified plants
Manuli Hydraulics (Suzhou) – PRC, Hydraulic Hoses
Manuli Hydraulics (Suzhou) – PRC, Hose assemblies
Fluiconnecto by Manuli – South Africa
7K-0309
MANULI HYDRAULICS (SUZHOU) CO., LTD.
No. 85, Xingling Street
Suzhou Industrial Park
Suzhou, Jiangsu Province
People's Republic of China
API Spec 7K
7K-0309
The scope of this license includes the following product: High Pressure Mud and Cement Hoses - FSL 1
QMS Exclusions: No Exclusions Identified as Applicable
16
Effective Date: AUGUST 8, 2012
Expiration Date: AUGUST 8, 2015
17
MRI GROUP
OVERVIEW
MANULI RUBBER INDUSTRIES
IS A GLOBAL ORGANIZATION
COMMITTED TO DELIVER
EXCELLENCE IN INNOVATION,
QUALITY AND SERVICE.
18
FLUICONNECTO
BY MANULI
MANULI
HYDRAULICS
RESEARCH
& INNOVATION
Argentina, Australia, Belgium, Botswana, Burkina Faso,
China, Czech Republic, DR Congo, France, Ghana,
Guinea, Hungary, Indonesia, Ivory Coast, Lithuania,
Mali, Oman, Peru, Poland, Sierra Leone, Singapore,
South Africa, Tanzania, The Netherlands,
United Arab Emirates, Zambia.
Brazil
USA
China, Czech Republic, France, Germany,
India, Italy, Mexico, Poland, Russia,
Singapore, South Korea, UK, USA.
China, France, India,
Italy, Poland and UK.
19
MRI GROUP
ORGANIZATION
FLUICONNECTO
HYDRAULICS, DRILLING & REFRIGERATION
MARKETS
• Agriculture
• Cleaning blasting
• Construction & public works
• Energy
• Forestry
• Industrial application
• Material handling & logistics
• Mining open pit & underground
• Oil & Gas
• Refrigeration & A/C
• Transport
PRODUCTS
• Wire braid and spiral reinforced rubber hoses
• Textile braid reinforces rubber hoses
• Rotary hoses for drilling
• Hose fittings
• Quick coupling
• Staple-lock adaptors and fittings
• Other fluid connectors
• Assembling machines
• Hose assemblies for high and very high pressure
• Hose assemblies for water cleaning & water
blasting applications
KEY STRENGTHS
• Certified products
• Hose management
• HSEQ compliance
• Immediate product availability
• Large product offering
• Market tailored solution providing
• Problem solving
• Service providing
PRODUCTS & SERVICES
• Accessories
• Adaptors
• Assembling machines
• Bite-ring fittings
• BOP hoses
• Grease injection
• High pressure hydraulic hoses
& assemblies
20
• High pressure water hoses & assemblies
• Hose fittings
• Industrial hoses and Hydraulic valves
• Lubrication & Fuelling
• Motion compensation hoses
• Pipes & clamps
• Pressure gauges
• Protection & safety accessories
• Quick release couplings
• Refrigeration connectors
• Refrigeration hoses & assemblies
• Rotary/Vibrator hoses
• Sealing products
• Staple lock fittings
• Transfer hoses
• Hose cleaning and inspection
• Hose identification/tagging
• Kitting
• Maintenance services
• Off-site maintenance
• On-site maintenance
• Preventive maintenance
• Testing & Flushing
• Tube bending
• Vendor managed inventory
INTERNATIONAL NETWORK
• 26 countries
• 24/7 services availability operated by a
fleet of more than 40 Service On-Site vans
• Presence at our customers doorstep through
more than 100 On-Site Workshops
• Over 130 HydroShops in Europe, Africa &
the Middle East, Asia – Pacific, Australia
and South America
APPLICATIONS
• Hydraulics systems for industrial machinery
• Hydraulics systems for off-highway vehicles
• Hydraulics systems for underground mining
equipment
• Hydraulics system for Oil & Gas industry
• Rotary systems for drilling platforms
• Mobile refrigeration systems and air
conditioning systems for off-highway vehicles
MANUFACTURING FACILITIES
• Hoses: China, Italy & Poland
• Connectors: Poland
• Assembling machines:
France, Poland
• Assembling units: China, Czech
Republic, France, India, South Korea,
United Kingdom
• OEM Alliance Partner facilities:
Americas
GLOBAL SALES NETWORK
The Wholesale market is served by
a dedicated sales & support network
throughout 4 continents.
OIL & MARINE
PRODUCTS
• Single Carcass Floating and Submarine hoses
• Double Carcass Floating and Submarine hoses
• Single Carcass Helix Free Floating and
Submarine hoses
• Double Carcass Helix Free Floating and
Submarine hoses
• Long-length (up to 300m) elastomeric conduit
• Dock hoses
• LPG (Liquefied Petroleum Gas) hoses
• Design and project management of marine
systems for conveying fluids
APPLICATIONS
• Monobuoys
• Pipelines Terminals
• FPSO & FSO
• Ship To Shore
• Offshore Oilrigs • Ship to Ship
FACILITIES
• 1 manufacturing facility in Italy serving
the whole international market
• 1 commercial office located in
Vimodrone (Milan), Italy
21
RESERCH &
INNOVATION
DURING 2014 MANULI
HYDRAULICS CONTINUED TO
ENHANCE ITS STATE OF THE ART
PRODUCT RANGE, WITH A
SPECIFIC FOCUS ON TECHNICALLY
CHALLENGING APPLICATIONS.
THE NEW MODERN ISOBARIC
HOSE RANGE FOR GENERAL
HYDRAULICS HAS BEEN FURTHER
EXPANDED WITH ADDITIONAL
DIAMETERS AND PRESSURE
LINES IN ORDER TO COVER ALL
POSSIBLE APPLICATION NEEDS.
IN PARTICULAR CUSTOMERS
CAN NOW BENEFIT FROM:
•The new GoldeniSO/14, a cost
effective low pressure hose for pilot
and return lines
•The completion up to 2” of
GoldeniSO/35 Xtraflex
•The new GondeniSO/35 LongLife
(first size Dn06 released), a wire
braid hose with high temperature
rating (121 °C) and large
oil compatibility
•The extention to Dn38 of GoldeniSO/42 Xtraflex
The Manuli Hydraulics DRILLING RANGE has been enlarged with the
release of 2” cementing hose, that received a formal API-7K FSL0
approval. New NO-skive crimping solutions were added to the
range; we highlight in particular:
• The new M03300 ferrule, smaller than the M03400 to better
couple compact 1 and 2 wire braided hose in small sizes,
is now available for a wide hose range
• The new ferrule M03500 for light duty spiral hose at 280 bar
has just been released in the central sizes, ¾” and 1”,
in combination with Multifit, to offer the most functional
and competitive solution for these kind of applications.
The fitting range has been enhanced with the enlargement
of robust termination ends and an innovative push-to-connect
termination end developed to offer a quick and foolproof assembly
on hydraulic machines, removing the need for nut tightening.
The new solution, named FastFIT, is highly cost effective due to the
absence of push-to disconnect function, that can also offer an
intrinsic protection against involuntary disconnection.
This connection will be available in a wide range of port connection, including BSP,
Metric, NPTF, SAE ORB.
For the MINING SECTOR, a big improvement has
been introduced on SH (Super staple-lock)
and SHF (Flush Fit) fittings, by introducing the new
SUPA-Seal gaskets.
Thanks to the use of high tensile thermoplastic
material and an appropriate shaped design,
these new seals have
dramatically increased
the pressure resistance
and the service life
of the products.
Manuli Hydraulics has progressively designed and industrialized
a broad range of stainless steel connectors, including Interlock Plus,
Spiralfit and Quick couplings items. The range was recently
enlarged with a basic offer of Multifit inserts
and ferrules; it now includes more than 300 SKU’s
and it is good enough to satisfy the most
recurrent needs of these kind of products
in any aggressive environment.
Manuli Hydraulics can thus guarantee to its customers
the advantages of the integrated package also when
an outstanding corrosion resistance is required.
The assembly machines range has been improved as well.
The OEM crimping line has been enlarged with the new
MS280L, an innovative solution able to join the cost
effectiveness of the bell housing construction with the
ergonomics and the power of a standing machine.
The unique Safe Crimp System has been further enhanced
with additional features, making the tool more user friendly.
The Manuli Hydraulics Innovation Centre
is more committed than ever to meet
and exceed customers expectations.
22
23
FLUICONNECTO
24
MISSION
OVERVIEW
FLUICONNECTO BY MANULI
IS A LEADING INTERNATIONAL
SERVICE ORGANIZATION,
FOCUSED ON HIGH PRESSURE
FLUID CONNECTORS, PROVIDING
PRODUCTS AND APPLICATION
KNOWLEDGE, AS WELL AS
MAINTENANCE SERVICES,
TO ALL MARKET SEGMENTS
THROUGH A GLOBAL NETWORK
TAILORED TO LOCAL
CONDITIONS.
FLUICONNECTO’S SERVICES
ARE MADE AVAILABLE AT THE
CUSTOMERS’ DOORSTEP IN 26
COUNTRIES, THROUGH AN
EVER-GROWING NETWORK
OF HYDROSHOPS, ON-SITE
WORKSHOPS AND SERVICE
ON-SITE VANS.
Freefalling commodities and oil prices, unfavorable exchange
rates and political turmoil in Africa and East Europe have
characterized 2014. Despite such unfavorable market conditions sales did not lose ground compared to 2013, thanks to
the continuous growth in our global customer base, that has
reached over 12,000 active customers and our geographical
expansion in South America, with the acquisition of Talleres
Hidraulicos, Peru’s leading supplier to the mining industry.
In Europe, Fluiconnecto has consolidated its presence in its
historical market segments that include construction,
shipping, industry and agriculture. It has also expanded its
market share by specializing its services in airport ground
support equipment and in the sewer cleaning and water
treatment sector.
Despite unfavorable market conditions in Sub-Saharan Africa,
intensified by both the Ebola outbreak and by unrest in Mali
and Burkina Faso, Fluiconnecto maintained service excellence
under these adverse business conditions. Furthermore we have
invested in 2 new countries, the Ivory Coast and DRC, where we
have secured new mining contracts.
In Botswana the company was awarded the prestigious PPADB certificate establishing
Fluiconnecto in the top ranking position with regard to government tenders.
The positive performance in the Middle East has continued. Sales in the UAE grew by more
than 20%, thanks to a very skilled and dedicated sales team.
In Asia Pacific Fluiconnecto remained committed to its long-term investment strategy.
This includes the ability to manufacture and deliver large bore hydraulic, industrial and rotary
drilling hose assemblies to customers throughout the region. Together with a large range of
products to support mobile services and a dedicated Oil & Gas services team.
With an ever growing organization of certified technicians and a continually broadening range
of products, Fluiconnecto is the natural answer to hydraulic maintenance services, both in
mature markets, as well as in remote and severe environments, such as mine sites and offshore
drilling platforms. The benefits of full integration with the manufacturer puts Fluiconnecto and
its customers in direct contact with Manuli Hydraulics’ highly skilled technicians and engineers,
who operate from six global Innovation Centers focused on the continuous development of
new technologies and integrated solutions.
25
MANULI HYDRAULICS
26
MISSION
OVERVIEW
MANULI HYDRAULICS IS ACTIVE
IN THE DESIGN, MANUFACTURE
AND SALE OF A WIDE RANGE
OF HOSES, CONNECTORS AND
MACHINES FOR CONVEYING
POWER IN HIGH/VERY HIGH
PRESSURE HYDRAULIC CIRCUITS
AND FLUIDS IN REFRIGERATION
UNITS.
THE SOLUTIONS OFFERED
BY MANULI HYDRAULICS ARE:
• HYDRAULIC HOSE & CONNECTORS
FOR OFF HIGHWAY, AGRICULTURAL
& MATERIAL HANDLING EQUIPMENT
VEHICLES
• HYDRAULIC HOSE & CONNECTORS
FOR INDUSTRIAL MACHINERY
• HYDRAULIC HOSE & CONNECTORS
FOR UNDERGROUND MINING
EQUIPMENT
• HOSE & CONNECTORS FOR
OFFSHORE AND ONSHORE
• DRILLING APPLICATIONS
AIR CONDITIONING HOSE LINES
FOR OFF-HIGHWAY VEHICLES
AND MOBILE REFRIGERATION
During 2014 the net sales of Manuli Hydraulics Division (including
sales to Fluiconnecto) totaled 214.4m Euros, -5.3% lower than the
previous year (226.5m Euros). Wholesale activity remained
reasonably strong in Europe and North America – both markets
that value an integrated product approach - and resilient in Latin
America despite the overall downward trend of economic activity.
In Asia, China continued to remain a challenging market, both in
Wholesale and OEM activity, equally the geo-political conflicts in
CIS countries and the Middle East have negatively impacted
activity levels in these areas.
Sales of assembling machines remained buoyant consolidating
the integrated approach in key markets providing direct
customers and end users the benefit of “original equipment
quality standard” hose assemblies.
Overall global OEM activity was quite strong in the first half
2014 - with the exception of China, as already mentioned - but fell
away during the second half of the year with all key customers
lowering build programs. Nevertheless the OEM Division was able
to renew supply agreements retaining preferred supplier status
with several key OEM’s.
Manuli Hydraulics is a world leader in the supply of staple-lock, super staple-lock & flushfit
adaptors, staple ball valves and hydraulic hose assemblies used in underground coal mining.
The mining Business Unit based in Birmingham (UK), achieved record sales in 2014 this despite the
challenges of falling energy prices. Key success factor is the integrated mining program covering
the Manuli range of mining hoses (SHIELDMASTER MINE, ROCKMASTER, ETERNITY and
DIAMONSPIR), staple hose fittings, XXL flanges and rotary staple couplings. Modern mining
hydraulic systems require unique technology for high power applications.
To meet increasing hydraulic demands Manuli Hydraulics have introduced a full line range of One
Piece High Performance Seals designed for the most extreme conditions. All products are fully
tested and approved to International standards and have been successfully utilised in countries
with significant soft rock mining activity.
Despite the prevailing issue of volatile energy prices, the Drilling Division continues to make
progress into the BOP & rotary/ vibrator drilling hoses market; now with a further enhanced
product offering following the release of an API approved 3 1/2” Grade E (7,500 psi) Rotary hose
and 2” (10,000 psi) Cement hose. Additionally a new drilling hose
assembly production line has been established in the UK.
Already operational for non API monogrammed assemblies,
this line is expected to be fully API 7K approved within next year.
27
MANULI HYDRAULICS
OIL & MARINE DIVISION
MISSION
OVERVIEW
MANULI HYDRAULICS OIL &
MARINE DIVISION IS ACTIVE IN
THE DESIGN, PRODUCTION AND
ASSISTANCE FOR THE
INSTALLATION OF OIL AND LONG
LENGTH HOSES FOR OFFSHORE
AND ONSHORE APPLICATIONS,
FOR THE TRANSFER OF OIL,
CHEMICAL AND GAS PRODUCTS.
In 2014, the net sales of the Manuli Hydraulics Oil & Marine division
reached an all time record €19.5 million, increasing by €1.6 million
compared to the year 2013. The increase of sales was achieved
thanks to both consolidated Customers and new ones coming
from Africa, the Middle East and Asia.
However the performance of the Oil & Marine division is extremely
cyclical, depending on the successful bidding for large customized
orders, we assume that in 2015 the turnover will be negatively
affected by low oil prices.
Following the market demand for lighter textile reinforced hoses Manuli Hydraulics Oil & Marine
Division completed the GMPHOM 2009 approval of the complete range of single carcass textile
reinforced hoses, in all sizes and all pressure ratings (15, 19, 21 bar). The new product, branded
Nautilus, is an alternative solution to the already existing Poseidon steel cord reinforced hoses
that had been already successfully approved to GMPHOM 2009 requirements, for both single and
double carcass solutions.
Manuli Hydraulics Oil & Marine Division, as a completion to the GMPHOM approval, has obtained
the approval for Transit/Storage Pallets to be used for the transportation and storage of the
marine hoses. The pallets designed with a Safe Working Load of 12 tonnes were approved and
tested by a third party based on calculations and a proof test at 2.5 x SWL.
The Manuli Long Length bonded elastomeric conduit for dynamic riser, jumper, flowline has
successfully served the industry for decades in military and commercial fuel transfer applications.
Following a constant demand for the same type of hoses but with higher working pressure and for
more aggressive conveyed fluids, the product range has been upgraded.
The new upgraded steel reinforced Long Length hoses, branded Saturn, are now capable to
withstand fluids having higher temperature (up to 120°C), higher H2S content (up to 5%) and
higher aromatic content (up to 80%). At the same time the hoses have been upgraded from a
structural point of view by increasing the Rated Working Pressures to 100, 125 and 175 bar
respectively for the 8”, 6”, 4” ID hoses (Heavy Duty solution).
FLOATING HOSES IN SERVICE
UPGRADED LONG LENGTH HOSES BRANDED SATURN
28
29
2014 FINANCIAL
STATEMENTS
FIGURES ARE TAKEN FROM THE
MANULI RUBBER INDUSTRIES’S GROUP
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 2014.
SUCH FINANCIAL STATEMENTS
HAVE BEEN AUDITED BY DELOITTE & TOUCHE,
WHICH ISSUED ITS REPORT WITH
NO EXCEPTIONS.
THE FINANCIAL STATEMENTS
AND RELATED REPORTS ARE DEPOSITED
WITHIN THE COMPANY.
CONSOLIDATED INCOME STATEMENTS
For the year ended
DECEMBER 2014
(Amounts in thousand of euros)
Net Sales
%
2013
%
334,989
327,240
CHANGE
%
(7,749)
-2.3%
8,801
2.7%
5,996
1.8%
2,805
46.8%
(6,035)
-1.8%
2,234
0.7%
(8,269)
-370.1%
330,006
100.8%
343,219
102.5%
(13,213)
-3.8%
(137,437)
-42.0%
(137,619)
-41.1%
182
-0.1%
2,756
0.8%
(5,446)
-1.6%
8,202
-150.6%
Services
(45,967)
-14.0%
(48,928)
-14.6%
2,961
-6.1%
Other costs
(20,451)
-6.2%
(19,191)
-5.7%
(1,260)
6.6%
Added Value
128,907
39.4%
132,035
39.4%
(3,128)
-2.4%
Labour costs
(82,360)
-25.2%
(80,675)
-24.1%
(1,685)
2.1%
46,547
14.2%
51,360
15.3%
(4,813)
-9.4%
Amortisation & Depreciation
(13,818)
-4.2%
(15,598)
-4.7%
1,780
-11.4%
Other provisions/accruals
(3,580)
-1.1%
(5,589)
-1.7%
2,009
-35.9%
29,149
8.9%
30,173
9.0%
(1,024)
-3.4%
Net financial income and losses
(4,646)
-1.4%
(4,385)
-1.3%
(261)
6.0%
Net exchange rate gain/(losses)
249
0.1%
(4,182)
-1.2%
4,431
-106.0%
(188)
-0.1%
405
0.1%
(593)
-146.4%
-
(422)
-0.1%
422
-100.0%
Other revenue and income
Change in inventory of finished products and wip
Value of production
Purchase of materials
Change in inventory of raw materials
Gross Operating Profit (EBITDA)
Operating Profit (EBIT)
Impairment losses on equity investments
Impairment
-
Profit before taxation
24,564
7.5%
21,589
6.4%
2,975
13.8%
Current Income taxes for the period
(8,525)
-2.6%
(8,201)
-2.4%
(324)
4.0%
(905)
-0.3%
(369)
-0.1%
(536)
145.3%
15,134
4.6%
13,019
3.9%
2,115
16.2%
(495)
-0.2%
(1,683)
-0.5%
1,188
-70.6%
14,639
4.5%
11,336
3.4%
3,303
29.1%
Deferred Income taxes for the period
Profit for the period
Profit attributable to non-controlling interests
PROFIT ATTRIBUTABLE TO THE GROUP
30
2014
31
CONSOLIDATED BALANCE SHEET
For the year ended
CONSOLIDATED CASH FLOW
For the year ended
DECEMBER 31, 2014
(Amounts in thousand of euros)
31/12/2014 31/12/2013
CHANGE
%
Current assets:
Profit (Loss) for the period attributable to Group
63,091
63,939
(848)
-1.3%
Not affecting liquidity items:
Inventories
81,293
84,626
(3.333)
-3.9%
Depreciation and amortisation
1,164
1,717
(553)
-32.2%
Mark-to-Market
7,439
8,729
(1,290)
-14.8%
Impairment
152,987
159,011
(6,024)
-3.8%
Trade payables
45,063
39,099
5,964
15.3%
Other payables
15,111
17,465
(2,354)
-13.5%
Accrued expenses and deferred income
1,950
2,133
(183)
-8.6%
Tax liabilities
5,081
5,235
(154)
-2.9%
Provisions for risks and charges
3,540
6,032
(2,492)
-41.3%
Total Current liabilities
70,745
69,964
781
1.1%
WORKING CAPITAL
82,242
89,047
(6,805)
-7.6%
Non current assets:
Property, plant and equipment
83,477
85,741
(2,264)
-2.6%
Intangible assets
63,078
59,208
3,870
6.5%
4,922
4,328
594
13.7%
14,779
14,760
19
0.1%
Other non-current liabilities
(3,642)
(3,465)
(177)
5.1%
Provisions for risks and charges
(1,864)
(1,540)
(324)
21.0%
Total non-current assets and liabilities
160,750
159,032
1,718
1.1%
INVESTED CAPITAL NET OF CURRENT LIABILITIES
242,992
248,079
(5,087)
-2.1%
1,951
1,877
74
3.9%
241,041
246,202
(5,161)
-2.1%
5,018
5,018
-
0.1%
22,234
22,234
-
0.1%
Legal reserve
1,004
1,004
-
0.1%
Other reserves
44,317
37,617
6,700
17.8%
Retained earnings
54,500
47,854
6,646
13.9%
Other current assets
Total current assets
Current liabilities:
Investments and securities
Other non-current assets
POST-EMPLOYMENT BENEFITS
NET INVESTED CAPITAL
FINANCED BY:
Share capital
Share premium reserve
Profit for the period
14,639
11,336
3,303
29.1%
EQUITY ATTRIBUTABLE TO THE GROUP
141,712
125,063
16,649
13.3%
NON-CONTROLLING INTERESTS
14,377
13,900
477
3.4%
TOTAL EQUITY
156,089
138,963
17,126
12.32%
Non-current loans and borrowings
(98,218)
(62,301)
(35,917)
57.7%
Non-current financial assets
Non-current financial liabilities for options on non-controlling interests
Net Non-current liabilities
Current financial assets
Other current financial assets
Current portion of M/L loans and other current liabilities
Current financial liabilities for options on non-controlling interests
Net current financial assets (liabilities)
NET FINANCIAL POSITION
32
(Amounts in thousand of euros)
Trade receivables
Accrued income and prepaid expenses
TOTAL SOURCES OF FUNDS
DECEMBER 31, 2014
1,328
-
1,328
2014
2013
14,524
8,388
13,777
15,058
(109)
(911)
-
422
Post-employment and retirement benefits accrued during the period
1,270
1,213
Allocation to provisions for risks and charges
2,469
4,241
188
(9)
TOTAL NOT AFFECTING LIQUIDITY ITEMS
17,595
20,014
SELF-FINANCING
32,119
28,402
Trade receivables
1,033
(3,449)
Inventories
4,792
6,175
574
273
Other current assets
1,319
(1,099)
TOTAL CURRENT ASSETS
7,718
1,900
Impairment losses on equity investments and goodwill
Current assets:
Accrued income and deferred expenses
Current liabilities:
5,471
6,739
(2,419)
4,232
Accrued expenses and deferred income
(183)
(533)
Tax liabilities
(154)
(394)
TOTAL CURRENT LIABILITIES
2,715
10,044
Suppliers
Other payables
CHANGES IN CURRENT ASSETS AND LIABILITIES
10,433
11,944
Use of provisions for risks and charges
(4,637)
(9,415)
Post-employment and retirement benefits paid during the period
TOTAL UTILISATION OF PROVISIONS AFFECTING LIQUIDITY
(887)
(1,016)
(5,524)
(10,431)
CASH FLOWS FROM OPERATING ACTIVITIES
37,028
29,915
Purchases of property, plant and equipment
(8,587)
(11,632)
452
(876)
Changes in suppliers of property, plant and equip. and intangible assets
279
233
(892)
(938)
CASH FLOWS FROM INVESTING ACTIVITIES
(8,748)
(13,213)
Dividends distributed
(4,516)
(3,011)
Translation differences and other changes
2,121
(15,883)
(Increase) Decrease in non-current assets/liabilities
(823)
11,427
477
(61)
CASH FLOWS FROM FINANCING ACTIVITIES
(2,741)
(7,528)
Acquisition Talleres Hidraulicos S.A.C.
(3,252)
Proceeds from sale of non-current assets
Increases in intangible assets
Changes in equity attributable to non-controlling interests
(1,103)
(1,135)
32
-2.8%
(97,993)
(63,436)
(34,557)
54.5%
46,310
29,548
16,762
56.7%
Acquisition Hyspec Mining Services Pty Ltd.
-
4,372
Acquisition Mercia International Products Ltd.
-
(7,198)
-55.2%
Exclusion Manuli Hydraulics Manufacturing Bel JLLC
-
100
(32,851)
(518)
(73,351)
-
100
40,500
(518)
13,041
(43,803)
56,844
-129.8%
(84,952)
(107,239)
22,287
-20.8%
241,041
246,202
(5,161)
-2.1%
-
(761)
CHANGES IN SCOPE OF CONSOLIDATION
(3,252)
(3,587)
CHANGES IN NET FINANCIAL POSITION
22,287
5,587
(107,239)
(84,952)
(112,826)
(107,239)
OPENING NET FINANCIAL POSITION
CLOSING NET FINANCIAL POSITION
33
1935
1973
1993
2013
35