Earnings Release • May 9, 2018
Earnings Release
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va-Q-tec is a leading supplier of high-performance products and solutions in thermal insulation and cold chain logistics. The company develops, produces and markets innovative vacuum insulation panels (VIPs) as well as phase change materials (PCMs) for the reliable and energy-efficient controlling and insulation of temperature. In addition, va-Q-tec produces passive thermal packaging systems (containers and boxes) through optimally integrating VIPs and PCMs, which can maintain constant temperatures, depending on type, between 24 and more than 200 hours, without external energy input. To implement temperature-sensitive logistics chains, va-Q-tec – within a global partner network – operates a fleet of rental containers and boxes meeting demanding thermal protection standards. Along with Healthcare & Logistics, va-Q-tec serves the following markets: Appliance & Food, Technics & Industry, Building and Mobility. The high-growth company, which was founded in 2001, is based in Würzburg, Germany.
Further information is available at: www.va-q-tec.com
The company's positive sales revenue trend – at a weaker level, as expected – advanced further during the first quarter of 2018. Overall, va-Q-tec continued to make progress in the first quarter of 2018, expanded relationships with existing customers and acquired new customers. The innovative insulation solutions of va-Q-tec are encountering growing interest in the areas of Appliance & Food (refrigerators and industrial cooling) as well as Technics & Industry (heat storage), promising further growth for 2018. New customers were gained for the "Serviced Rental" of containers and boxes in the Services business, which aims to address the challenges of the cold chain in the global pharmaceuticals industry. In this context, the fleet of rental containers for global "Serviced Rental" was expanded further in Q1 2018.
In the temperature-controlled air freight transportation area, va-Q-tec successfully launched a project in January 2018 with a leading supplier of systems for the semiconductor industry. This enabled a reference customer exerting a great impact on the entire industry to be acquired. These extremely complex production machines play an important role in microchips manufacturing. The customer utilises the va-Q-tec service to transport temperature-sensitive optical and mechanical systems more securely and considerably more cost-efficiently between production sites in Europe and Asia than previously. The va-Q-tec technology ensures the stability of these temperature-sensitive supply chains, including in extreme temperature conditions.
With the opening of a new branch operation in the USA in January 2018, va-Q-tec reached an important milestone in its internationalisation overall and the expansion of its business in North America in particular. Especially the production of small thermal boxes and sales operations are to occur locally from the USA in the future. The new fulfilment centre in Langhorne, Pennsylvania, forms a central element of the va-Q-tec growth strategy, as its location adjacent to Philadelphia, New York and Boston and their renowned biotechnology, healthcare and pharmaceutical hubs provides ideal infrastructures. This close proximity enables the company to offer its customers even faster and more reliable service. The company sees high demand for high-performance thermal transport boxes in the USA and, with its new fulfilment centre, is becoming a full-service provider in the temperature-controlled transportation of high-quality products in North America. Furthermore, the new head office in the USA comprises a network station for container rental, which will serve as the basis to supply customers with pre-cooled containers. Based on these potentials, the North American business is to be further expanded.
In the first quarter, the aggregation of the meanwhile three Würzburg sub-locations into one technology and logistics headquarters was further progressed. This step serves to boost operating efficiency, expand capacities for production and logistics, and bundle technological competencies. Considerable previous rental and transport costs are thereby eliminated in the future. The full move into the new headquarters is planned for the second quarter of 2018.
EBITDA was down 73% compared with the strong previous year's quarter due to continued strong demand comprising a higher proportion generated by the Products business, which is more intensive in terms of cost of materials, as well as hiring, reflecting future growth.
While the sales revenue trend in Q1 2018 was approximately in line with expectations, EBITDA fell short of the original assumptions due to the later-than-expected ramp-up of projects in the Services business, accompanied at the same time by a continued strong Products business. Significant potential for improvement is nevertheless in sight.
The following overview presents the main items of the income statement of the va-Q-tec Group in each case in comparison with the previous year's quarter.
| kEUR unless stated otherwise |
Q1 2018 (IFRS) | Q1 2017 (IFRS) | Δ |
|---|---|---|---|
| Revenues | 12,037 | 11,382 | +6% |
| Total income | 14,662 | 13,320 | +10% |
| Cost of materials and services | -6,888 | -5,310 | +30% |
| Gross profit | 7,774 | 8,010 | -3% |
| 53% | 60% | ||
| Personnel expenses | -4,692 | -3,466 | +35% |
| Other operating expenses | -2,431 | -2,168 | +12% |
| EBITDA | 651 | 2,376 | -73% |
| EBITDA margin | 4% | 18% | |
| Depreciation, amortisation and impairment losses |
-2,268 | -1,667 | +36% |
| EBIT | -1,617 | 709 | |
| Result from equity accounted investments |
-30 | -37 | +23% |
| Net financial result | -202 | -221 | +9% |
| EBT | -1,849 | 451 | |
| Number of employees | 411 | 311 | +32% |
In Q1 2018, va-Q-tec grew its revenue by 6% year-on-year to kEUR 12,037. This sales revenue growth was driven mainly by the Products division (sale of vacuum insulation panels).
| kEUR | Q1 2018 | Q1 2017 | Δ |
|---|---|---|---|
| Products | 4,928 | 3,905 | +26% |
| Systems | 3,190 | 3,081 | +4% |
| Services | 3,710 | 4,223 | -12% |
In Q1 2018, the Products business (sale of vacuum insulation panels) was up by kEUR 1,023, from kEUR 3,905 to kEUR 4,928 (+26%). In the Systems area (sale of thermal packaging), revenue reported a slight increase of kEUR 109 (+4%) to kEUR 3,190, compared with the previous year's very strong quarter at kEUR 3,081. The Group generated sales revenues of kEUR 3,710 with Services ("Serviced Rental" of thermal packaging), compared with kEUR 4,223 million in the prior-year period (-12%; kEUR -513). As processes on the customer side are proving more timeconsuming than expected, sub-projects in the "Serviced Rental" area still contributed little to revenue and results during the first quarter of 2018. The UK reporting segment fell short of expectations for this reason.
Total income grew at a slightly faster rate than consolidated revenue, increasing by 10% to kEUR 14,662 (previous year: kEUR 13,320), thanks mainly to a higher level of work performed by the company and capitalised in relation to the construction of self-utilised containers and boxes.
The cost of materials from was up by 30% from kEUR 5,310 to kEUR 6,888. This increase is chiefly attributable to the above-average growth of the Products business, which proved more intensive in terms of cost of materials compared with the previous year's quarter. Expenditures for warehousing, logistics and fulfilment services at partner companies also rose.
Personnel expenses in the first quarter of 2018 were up by kEUR 1,227 compared with the prior-year period, from kEUR 3,466 to kEUR 4,692 (+35%). Besides standard wage and salary increases, this rise is mainly due to the hiring of new staff for the planned international growth. The number of staff grew by 32% compared with the first quarter of 2017.
Other operating expenses rose by EUR 263, from kEUR 2,168 in the previous year's period to kEUR 2,431 in the first quarter of 2018 (+12%). Reasons for this increase include rising rental expenses for additional administrative and logistics buildings (e.g. in the USA), as well as a greater level of IT, marketing and patent costs incurred as part of expanding the business. This raised the ratio of other operating expenses to total income from 16% to 17% in Q1 2018.
As a consequence of the aforementioned cost increases, earnings before interest, tax, depreciation and amortisation (EBITDA) were down by kEUR 1,724, from kEUR 2,376 to kEUR 651. This corresponds to a 4% EBITDA margin in the first quarter of the current financial year, compared with 18% in Q1 2017.
Depreciation, amortisation and impairment charges reported a marked increase to kEUR 2,268 (previous year: kEUR 1,668). This reflects the high level of investments in containers and boxes, both of which have short depreciation periods.
The operating result (EBIT) reduced to kEUR -1,617 in the first quarter of 2018 (previous year: kEUR 709).
The net financial result improved from kEUR -221 in the prior-year period to kEUR -202 in Q1 2018, thanks to improved refinancing terms.
The company reports a result before tax (EBIT) of kEUR -1,849 for Q1 2018 (previous year: kEUR 451).
The reporting segments performed as follows in Q1 2018:
| kEUR unless stated otherwise |
Q1 2018 | Q1 2017 | Δ |
|---|---|---|---|
| Revenues | 12,363 | 10,590 | +17% |
| EBITDA | 1,103 | 1,903 | -42% |
| Number of employees | 361 | 279 | +29% |
In the German reporting segment (va-Q-tec AG), revenue grew from kEUR 10,590 in the previous year to kEUR 12,363 in Q1 2018 (+17%). The sales revenue growth is mainly attributable to the rental of thermal packages, as well as additional revenues from the sale of VIPs to manufacturers of refrigerators and boilers. Other operating expenses and personnel expenses recorded marked increases in line with the expansion of business and with internationalisation. EBITDA was down by 42% to kEUR 1,103 in Q1 2018 (previous year: kEUR 1,903), especially as a consequence of the marked increase in personal expenses as well as the lower-margin Products business. The number of employees rose by 82 to 361 (previous year: 279).
| kEUR unless stated otherwise |
Q1 2018 | Q1 2017 | Δ |
|---|---|---|---|
| Revenues | 3,266 | 3,876 | -16% |
| EBITDA | 512 | 1,416 | -64% |
| Number of employees | 39 | 27 | 44% |
The UK reporting segment comprises mainly the rental of temperature-managed containers for the global pharmaceuticals industry. Revenue generated in this segment decreased from kEUR 3,876 in the previous year to kEUR 3,266 in Q1 2018. Here, the absolute number of rentals remained constant compared with the previous year´s quarter. In some cases, however, the rental durations shortened, including due to faster application of customs tariffs to va-Q-tainers, which are becoming increasingly familiar worldwide. Furthermore, in the first quarter of 2018, some processes to acquire tradelanes within the rental network for va-Q-tainers proved more time-consuming on the customer side than originally expected. This relates to projects with both new and existing customers. Moreover, existing customers optimised their logistics processes. This segment thereby continued to fall short of expectations in the reporting period. EBITDA in this segment reduced from kEUR 1,416 in Q1 2017 to kEUR 512 in Q1 2018, reflecting higher logistics costs for the container fleet as well as an increase in personnel expenses. The number of employees rose by 12 to 39 (previous year: 27).
| kEUR unless stated otherwise |
Q1 2018 | Q1 2017 | Δ |
|---|---|---|---|
| Revenues | 515 | 284 | +72% |
| EBITDA | 40 | -17 | |
| Number of employees | 11 | 5 | +56% |
The subsidiaries in Korea, Switzerland and the USA, which together comprise the Other reporting segment, reported higher revenue overall, driven by an increase in sales commissions and purchasing commissions as well as the inclusion of the Japanese and Swiss subsidiaries. EBITDA amounted to kEUR 40 (previous year: kEUR -17). The number of staff amounted to 11 (previous year: 5).
Property, plant and equipment increased by 6% to kEUR 58,761 as of 31 March 2018, compared with kEUR 55,402 as of 31 December 2017. The main reasons for the rise include the expansion of the container fleet for the global container rental business as well as continued investments in the headquarters in Würzburg and in the main production site in Kölleda (Thuringia).
Current assets decreased by kEUR 8,316 due to the temporary financing of the high level of investment from the company's equity.
Consolidated equity reduced by kEUR 1,751 to kEUR 51,240, thereby remaining almost unchanged at 56% of total assets as of 31 March 2018.
Non-current bank borrowings decreased to kEUR 10,882, reflecting scheduled repayments, while current bank borrowings reported a slight increase of kEUR 45, from kEUR 2,958 to kEUR 3,003.
Current liabilities and provisions stood at kEUR 19,372 in the Q1 2018, representing 21% of total equity and liabilities (previous year: kEUR 18,927; 20%). Consolidated non-current liabilities amounted to kEUR 20,355 million in Q1 2018, equivalent to 22% of total equity and liabilities (previous year: kEUR 23,572, 25%). Trade payables totalled kEUR 3,745, compared with kEUR 5,244 as of 31 December 2017.
Net cash flow from operating activities amounted to kEUR -1,846 in Q1 2018, kEUR 2,773 below the adjusted level of kEUR 927 in the prior-year quarter. This reduction is attributable to a significantly greater level of funds employed in working capital, reflecting the higher level of inventories, and at the same time a reduction in trade payables.
Cash flow from investing activities changed from kEUR -4,438 to kEUR 3,331. The rise in the level of outgoing payments to purchase property, plant and equipment was more than offset by payments received from the release of short-term deposits. The kEUR 895 reduction in cash flow from financing activities, from kEUR -274 to kEUR -1,169, reflects the repayment of finance lease liabilities and bank borrowings without the new drawing down of loans in Q1 2018.
| kEUR | Q1 2018 | Q1 2017 |
|---|---|---|
| Revenues | 12,037 | 11,382 |
| Changes in inventories | 238 | -96 |
| Work performed by the company and capitalised | 1,603 | 1,346 |
| Other operating income | 784 | 688 |
| Total income | 14,662 | 13,320 |
| Cost of materials and services | -6,888 | -5,310 |
| Gross profit | 7,774 | 8,010 |
| Personnel expenses | -4,692 | -3,466 |
| Other operating expenses | -2,431 | -2,168 |
| EBITDA | 651 | 2,376 |
| Depreciation, amortisation and impairment losses | -2,268 | -1,667 |
| Profit/loss before interest and tax (EBIT) | -1,617 | 709 |
| Results from equity accounted investments | -30 | -37 |
| Financial income | 7 | 10 |
| Financial expenses | -209 | -231 |
| Net financial result | -202 | -221 |
| Profit/loss before tax (EBT) | -1,849 | 451 |
| Income tax | 75 | -172 |
| Consolidated net profit or loss | -1,774 | 279 |
| Consolidated net profit or loss attributable to owners of va-Q-tec AG | -1,774 | 279 |
| Consolidated net profit or loss attributable to non-controlling interests | - | - |
| Consolidated earnings per share – basic/undiluted | -0.14 | 0.02 |
| Consolidated earnings per share – diluted | - | 0.02 |
| kEUR | Q1 2018 | Q1 2017 |
|---|---|---|
| Consolidated net profit or loss | -1,774 | 279 |
| Consolidated other comprehensive income | ||
| Currency translation differences | -1 | 7 |
| Total other comprehensive income that will be reclassified to profit or loss | -1 | 7 |
| Consolidated total comprehensive income | -1,775 | 286 |
| Consolidated total comprehensive income attributable to owners of va-Q-tec AG |
-1,775 | 286 |
| Consolidated total comprehensive income attributable to non-controlling interests |
- | - |
| kEUR | 31/03/2018 | 31/12/2017 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 953 | 885 |
| Property, plant and equipment | 58,761 | 55,402 |
| Investment property | 1,614 | 1,614 |
| Equity accounted investments | 327 | 357 |
| Financial assets | 582 | 283 |
| Other non-financial assets | 635 | 634 |
| Deferred tax assets | 2,952 | 2,880 |
| Total non-current assets | 65,824 | 62,055 |
| Current assets | ||
| Inventories | 10,288 | 8,942 |
| Trade receivables | 7,411 | 8,005 |
| Other financial assets - of which term deposits (6-12 months): 0 (previous year: 9,000) |
287 | 9,117 |
| Tax assets | 85 | 67 |
| Other non-financial assets | 1,512 | 2,104 |
| Cash and cash equivalents | 5,537 | 5,201 |
| Total current assets | 25,120 | 33,436 |
| Total assets | 90,944 | 95,491 |
Equity and liabilities
| in TEUR | 31/03/2018 | 31/12/2017 |
|---|---|---|
| Equity | ||
| Issued share capital | 13,090 | 13,090 |
| Treasury shares | -54 | -54 |
| Additional paid-in capital | 46,158 | 46,158 |
| Cumulative other comprehensive income | -28 | -28 |
| Retained earnings | -7,949 | -6,174 |
| Total equity | 51,217 | 52,992 |
| Non-current liabilities and provisions | ||
| Provisions | 40 | 39 |
| Bank borrowings | 10,882 | 11,146 |
| Other financial liabilities | 3,873 | 3,949 |
| Other non-financial liabilities | 5,560 | 8,438 |
| Total non-current liabilities and provisions | 20,355 | 23,572 |
| Current liabilities and provisions | ||
| Provisions | 28 | 38 |
| Bank borrowings | 3,003 | 2,958 |
| Other financial liabilities | 5,785 | 6,507 |
| Trade payables | 3,745 | 5,244 |
| Tax liabilities | 20 | 15 |
| Other non-financial liabilities | 6,791 | 4,165 |
| Total current liabilities and provisions | 19,372 | 18,927 |
| Total assets | 90,944 | 95,491 |
| kEUR | Q1 2018 | Q1 2017 |
|---|---|---|
| Cash flow from operating activities | ||
| Consolidated net profit or loss | -1,774 | 279 |
| Net finance costs recognised in income statement | 202 | 220 |
| Interest received | 2 | - |
| Interest paid | -175 | -79 |
| Non-cash losses from equity accounted investments | 30 | 37 |
| Depreciation, amortisation and impairment losses | 2,268 | 1,668 |
| Gain/loss from disposal of non-current assets | -19 | -4 |
| Change in other assets | 159 | -517 |
| Change in other liabilities | 577 | -295 |
| Change in provisions | -8 | 88 |
| Other non-cash expenses or income | -692 | -402 |
| Cash flow from operating activities before working capital changes | 570 | 995 |
| Change in inventories | -1,509 | -909 |
| Change in trade accounts receivable | 593 | -135 |
| Change in trade accounts payable | -1,500 | 976 |
| Net cash flow from operating activities | -1,846 | 927 |
| Cash flow from investing activities | ||
| Payments for investments in intangible assets | -128 | -4 |
| Proceeds from disposals of property, plant and equipment | 25 | 4 |
| Payments for investments in property, plant and equipment | -5,566 | -4,438 |
| Proceeds from liquidating short-term deposits | 9,000 | - |
| Net cash flow from investing activities | 3,331 | -4,438 |
| in TEUR | Q1 2018 | Q1 2017 |
|---|---|---|
| Cash flow from financing activities | ||
| Proceeds from equity increases | - | -92 |
| Payments (previous year: proceeds) from bank loans | -9 | 707 |
| Repayments of bank loans | -210 | -130 |
| Proceeds from sale and finance leaseback transactions | - | 572 |
| Payments for finance lease liabilities | -950 | -1,331 |
| Net cash flow from financing activities | -1,169 | -274 |
| Net cash flows before exchange rate effects | 316 | -3,785 |
| Effect of exchange rate changes on cash and cash equivalents | 18 | - |
| Net change in cash and cash equivalents | 336 | -3,785 |
| Cash and cash equivalents at start of period | 5,201 | 4,600 |
| Cash and cash equivalents at end of period | 5,537 | 815 |
va-Q-tec AG
Alfred-Nobel-Straße 33 97080 Würzburg Germany
Tel.: +49 (0)931 35 94 2-0 Fax: +49 (0)931 35 94 2-10
E-mail: [email protected] www.va-q-tec.com
va-Q-tec AG Felix Rau
Tel.: +49 (0)931 35 94 2-1616 E-mail: [email protected]
Unter den Eichen 7 65195 Wiesbaden Germany
Tel.: +49 (0)611 20 58 55-0 Fax: +49 (0)611 20 85 55-66
E-mail: [email protected] www.cometis.de
Alfred-Nobel-Straße 33 97080 Würzburg Germany
Tel.: +49 (0)931 35 942 0 Fax: +49 (0)931 35 942 10
E-mail: [email protected] www.va-q-tec.com
va-Q-tec AG
| 28/06/2018 | AGM |
|---|---|
| 22/08/2018 | Publication of half-year financial report |
| 14/11/2018 | Publication quarterly financial report (call-date Q3) |
This report can include forward-looking statements based on current assumptions and forecasts of the management of va-Q-tec AG. Such statements are subject to risks and uncertainties. These and other factors can lead the company's actual results, financial position, development or performance to differ significantly from the estimates provided here. The company assumes no obligation of any kind to update such forward-looking statements and adjust them to future events or developments.
Alfred-Nobel-Straße 33 97080 Würzburg
Tel.: +49 (0)931 35 942 0 Fax: +49 (0)931 35 942 10
E-mail: [email protected] www.va-q-tec.com
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