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Kapsch TrafficCom AG
Interim / Quarterly Report • Nov 16, 2022
747_ir_2022-11-16_f95d2528-e345-4bf5-9dfc-75cfd1e6f97b.pdf
Interim / Quarterly Report
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Kapsch TrafficCom
Half-year financial report pursuant to Sec. 125 Austrian Stock Exchange Act (BörseG) 2018.
Selected key data.
2022/23 and 2021/22: refers to the respective financial year (April 1 until March 31) H1: first half of a financial year (April 1 until September 30) PP: percentage points
Unless otherwise stated, all values in EUR million.
| Earnings data | 2021/22 | H1 2021/22 | H1 2022/23 | +/- |
|---|---|---|---|---|
| Revenues | 519.8 | 255.2 | 264.8 | 3.8% |
| Share of tolling segment | 71.2% | 70.9% | 73.8% | 2.8 PP |
| Share of traffic management segment | 28.8% | 29.1% | 26.2% | -2.8 PP |
| EBITDA 1) | 32.7 | 21.4 | 15.0 | -30.0% |
| EBITDA margin | 6.3% | 8.4% | 5.7% | -2.7 PP |
| EBIT | 11.0 | 10.6 | 4.7 | -55.6% |
| EBIT margin | 2.1% | 4.2% | 1.8% | -2.4 PP |
| Result before income tax | 5.3 | 7.7 | 2.9 | -62.4% |
| Result for the period | -6.2 | 5.4 | 1.8 | -67.2% |
| Result for the period attributable to equity holders | -9.3 | 3.0 | 0.3 | -90.1% |
| Earnings per share in EUR | -0.72 | 0.23 | 0.02 | -90.1% |
| Business segments | 2021/22 | H1 2021/22 | H1 2022/23 | +/- |
| Tolling | ||||
| Revenues | 369.9 | 181.0 | 195.3 | 7.9% |
| EBIT | 3.3 | 1.3 | 2.5 | 84.7% |
| EBIT margin | 0.9% | 0.7% | 1.3% | 0.5 PP |
| Traffic management | ||||
| Revenues | 149.9 | 74.1 | 69.4 | -6.3% |
| EBIT | 7.7 | 9.3 | 2.3 | -75.7% |
| EBIT margin | 5.1% | 12.6% | 3.3% | -9.3 PP |
| Revenues by region | 2021/22 | H1 2021/22 | H1 2022/23 | +/- |
| EMEA | 54.2% | 56.8% | 47.5% | -9.3 PP |
| Americas | 40.8% | 38.9% | 46.6% | 7.7 PP |
| APAC | 5.0% | 4.3% | 5.9% | 1.6 PP |
| Balance sheet data | March 31, 2022 | Sept. 30, 2022 | +/- | |
| Total assets | 512.1 | 511.9 | -0.0% | |
| Total equity 2) | 77.9 | 63.1 | -19.0% | |
| Equity ratio 2) | 15.2% | 12.3% | -2.9 PP | |
| Net debt 3) | 158.3 | 190.3 | 20.3% | |
| Gearing 4) | 203.2% | 301.6% | 98.4 PP | |
| Net working capital 5) | 71.0 | 79.4 | 11.9% | |
| Cash flow | 2021/22 | H1 2021/22 | H1 2022/23 | +/- |
| Net CAPEX 6) | 5.3 | 0.2 | 1.6 | > 500% |
| Free cash flow 7) | 16.8 | -1.2 | -11.4 | > -100% |
| Other information | 2021/22 | H1 2021/22 | H1 2022/23 | +/- |
| Employees, end of period | 4,220 | 4,526 | 4,195 | -7.3% |
| On-board units, in million units | 10.38 | 4.48 | 5.44 | 21.4% |
1) Operating result before amortization, depreciation and impairment
2) Including non-controlling interests
3) Cash and cash equivalents + other current financial assets - financial liabilities - lease liabilities
4) Net debt/equity
5) Inventories + trade receivables and other current assets + current contract assets + current tax receivables – trade payables – current contract liabilities – current tax liabilities – current provisions – current other liabilities and deferred income
6) Capital expenditure and proceeds from the disposal of property, plant and equipment and intangible assets
7) Cash flow from operating activities + cash flow from investing activities
Headlines H1 2022/23.
EUR 264.8 million +3.8%
EUR 4.7 million -55.6%
Revenues H1 EBIT H1 Earnings per share H1
EUR 0.02 -90.1%
Revenues 3.8% above previous year.
- Increases in tolling segment, mainly from implementation projects and components business.
- Considerable growth in the Americas region in both segments.
- Significant increase in the APAC region.
Turnaround confirmed in H1.
- EBIT burdened in particular by increase in personnel costs.
- Nevertheless, both segments remained positive.
Financial position remains in focus.
- Repayment of financial liabilities.
- Gearing increased to 302% due to lower cash and cash equivalents.
- Equity ratio at 12%.
Outlook for financial year 2022/23 confirmed.
- Stable revenue level and significantly improved profitability expected.
- Macroeconomic environment, projects in South Africa and Belarus harbor uncertainties.
- Execution of Strategy 2027.
Resolutions of the Annual General Meeting.
- No dividend payment.
- Discharge of the members of the Executive Board and Supervisory Board for the financial year 2021/22.
- PwC Wirtschaftsprüfung GmbH appointed as auditors of the (consolidated) financial statements for the financial year 2022/23.
- Resolution on the Remuneration Report for the Executive Board and Supervisory Board.
- Sabine Kauper re-elected to the Supervisory Board.
Letter from the CEO.
Dear Shareholders,
This report on the first half of 2022/23 of Kapsch TrafficCom proves that we are on the right track with the measures taken for our profitability and future growth. In an unchanged very challenging environment, we were able to slightly increase revenues consistently over the past six months and confirm the turnaround. First half of 2022/23:
Revenues: EUR 265 million (+3.8%) EBIT: EUR 5 million (-55.6%)
The economic environment continued to be characterized by numerous uncertainties. After business momentum had been weak and the supply
chain severely impaired for some time as a result of the COVID-19 pandemic, the conflict in Ukraine, which has been ongoing since February, exacerbated the situation. The effects are reflected in particular in increased costs, as well as very high inflation rates and interest rate hikes.
In this environment, Kapsch TrafficCom succeeded in increasing revenues to EUR 265 million in the first two quarters of the financial year 2022/23. At just under EUR 5 million, the operating result (EBIT) was positive, yet significantly below the previous year's result. While the exchange rate development against the US dollar had a positive effect, the decline reflects the increase in personnel costs already seen in the first quarter, particularly in North America.
Growth in H1 2022/23 was driven by the tolling segment, with the implementation business at 41% substantially above the previous year and the components business also rising. The tolling segment therefore generated 74% of total revenue in the reporting period, with the traffic management segment accounting for 26%. In regional terms, we recorded strong growth in the Americas region, while business in the EMEA region was more moderate.
Our results have been affected by increased costs, and the situation in our supply chain has remained tense. Over the summer, we had to reduce production capacity, although demand for components increased again.
Our cost base has already been drastically lowered as part of the restructuring process. In the short term, we could have further reduced personnel costs as well. On the one hand, however, we needed more personnel to work on projects – especially in the USA – and on the other hand, in line with our long-term strategy and the success of Kapsch TrafficCom, we have decided to deliberately retain personnel for new business and to selectively recruit qualified personnel. Lack of internal resources should not prevent us from growing in the future. Nevertheless, we will closely monitor the development of these costs.
Free cash flow was considerably negative in H1 2022/23 at EUR -11 million. In this context, net debt increased to EUR 190 million and
Focus on cost and liquidity management remains important.
gearing to 302%. The equity ratio declined to 12%. Although we again repaid debt in the reporting period, these key figures show that our financial situation remains unsatisfactory. Cash and cash equivalents decreased in the past six months in connection with repayments and the increased financing of working capital. We therefore manage our liquidity carefully and in close coordination with our financing banks.
On the project side, there were some relevant developments in our existing projects in the first half of 2022/23: In North America we were able to continue working through projects and reduce past problems. We therefore believe we are on the right path to freeing up resources for new projects and will plan new growth carefully.
In South Africa, our existing contract for the toll system in the Gauteng province was extended until the beginning of December 2022. It is currently uncertain how the decision to no longer collect tolls in Gauteng will affect us in the medium term.
In the past quarter, we won three significant new projects: In Sweden, we were commissioned to implement a new multi-lane free-flow system in Gothenburg. The system covers a complex city area and ranks among the largest urban congestion charging projects in the world in terms of the number of tolling stations and charging points. In Peru, we were commissioned together with a partner to provide the mobility and safety management systems for the Smart City Platform in the city of Lima. They provide the necessary information for intelligent and proactive mobility management to the city authorities. And in the United Arab Emirates, we were selected to work with the capital of the Emirate of Sharjah to develop the next stage of intelligent traffic management. This centralized control system will be able to improve traffic flow and control it in a coordinated manner via a traffic control center.
These three new projects have one thing in common: They involve urban traffic management systems. We are convinced that it is becoming increasingly important for cities to provide fluent mobility that also supports environmental goals. Mobility patterns need to be guided and sustainable transport solutions implemented. The projects we have won support our strategic goal of growing in the urban sector.
We reached a milestone in the components business: In June, the 100 millionth transponder was manufactured at our production facility in Canada. The transponders allow automatic toll payment without the need to stop at a toll plaza. Our 100 million transponders have thus saved drivers many hours and helped reduce emissions.
Outlook.
In the second half of the current financial year, we will continue to focus on new business as well as on cost discipline and liquidity management. We are on the right track; however, we still have a number of tasks ahead of us to achieve the desired results. The environment in which we operate is currently not making it easy for us.
In South Africa, we expect the province of Gauteng to announce soon how it intends to proceed with the toll system. Likewise, special attention is being paid to our project in Belarus, which continues to run according to plan. Finally, we are closely monitoring macroeconomic developments and are prepared to respond with agility.
In terms of new business, we are beginning to see a recovery in the market from the impact of the COVID-19 pandemic, and we expect repeat orders and new projects throughout 2023.
After we agreed on the sale of the Spanish public transport business in August, the transaction should be closed shortly and bring a positive effect on earnings.
Outlook 2022/23: Stable revenues. EBIT improvement expected.
On this basis, we continue to expect a stable level of revenue and, compared to the previous financial year, significantly improved profitability for the financial year 2022/23. This will include the special effect from the sale of the Spanish business. However, the development of the aforementioned factors is subject to uncertainties and may impact our results accordingly.
We are working to execute our Strategy 2027 despite the challenges we are facing right now and with strict cost control. The successes in the first half of the year, including in urban areas, inspire us to keep moving forward.
Sincerely,
Georg Kapsch Chief Executive Officer
Annual General Meeting 2022.
The Annual General Meeting of Kapsch TrafficCom AG took place on September 7, 2022. After two years of virtual general meetings, we were able to hold it physically on site again. The following resolutions were adopted:
- No dividend payout for the financial year 2021/22; retained profits were carried forward to new account. Number of shares for which valid votes were cast: 8,911,303 (68.55% of a total of 13,000,000 shares) Approved by: 8,911,063 votes (votes against: 240, no abstentions)
- Discharge of the members of the Executive Board for the 2021/22 financial year. Valid votes: 8,891,303 (68.39%) Approved by: 8,891,303 votes (no votes against, abstentions: 20,000 votes)
- Discharge of Sabine Kauper as member of the Supervisory Board for the 2021/22 financial year. Valid votes: 8,890,028 (68.38%) Approved by: 8,890,027 votes (votes against: 1, abstentions: 20,853 votes)
- Discharge of the remaining members of the Supervisory Board for the 2021/22 financial year. Valid votes: 8,908,848 (68.53%) Approved by: 8,908,848 votes (no votes against, abstentions: 2,033 votes)
- Appointment of PwC Wirtschaftsprüfung GmbH, Vienna, as the auditor and Group auditor for the 2022/23 financial year.
Valid votes: 8,910,881 (68.55%) Approved by: 8,910,881 votes (no votes against, no abstentions)
- Remuneration Report. Valid votes: 8,889,528 (68.38%) Approved by: 8,889,061 votes (votes against: 467, abstentions: 21,353 votes)
- Re-election of Sabine Kauper to the Supervisory Board. Term of office until the end of the Annual General Meeting that votes on the discharge for the financial year 2022/23. Valid votes: 8,890,737 (68.39%) Approved by: 8,890,056 votes (votes against: 681, abstentions: 20,144 votes)
Capital markets.
Share price development.
Price development in the first half of 2022/23.
The closing prices of the Kapsch TrafficCom share in the first half of the financial year 2022/23 fluctuated within a range of EUR 14.36 to EUR 10.90 with a continuous downward trend in line with the international stock market environment.
The share opened at EUR 14.10 on April 1, 2022, and registered a decline in share price of around 10% in the first two months. In June, the share price recovered slightly and was back at EUR 13.80 on the day after the publication of the annual results. From then on, the downward trend continued, especially towards the end of the half-year.
The (intraday) high of EUR 14.40 on April 4, 2022 was offset by an (intraday) low of EUR 10.80 at the end of the half-year. The Kapsch TrafficCom share closed on September 30, 2022 at a price of EUR 10.90, the lowest Market cap at the end of H1 2022/23: EUR 141.7 million
closing price in the reporting period. It therefore lost 23.8% of its value in the first half of financial year 2022/23. The benchmark index ATX Prime showed similar development and lost 18.3% during this period.
Development of Kapsch TrafficCom share and ATX Prime.
Stock data.
| In EUR, unless otherwise stated | H1 2021/22 | H1 2022/23 |
|---|---|---|
| Earnings per share | 0.23 | 0.02 |
| High (intraday) | 16.00 | 14.40 |
| Low (intraday) | 14.02 | 10.80 |
| Closing price on September 30 | 14.84 | 10.90 |
| Share performance | -0.4% | -23.8% |
| Ø trading volume (shares, double counting) | 16,230 | 6,535 |
Analysts and liquidity providers.
Analysts.
In the last twelve months, the following financial institutions published reports on the share (in alphabetical order):
- Erste Group Bank
- ODDO BHF/Frankfurt Main Research (FMR)
- Raiffeisen Bank International
Liquidity providers.
As of May 2022, the Vienna Stock Exchange launched the new Best Bid and Offer model. Within this framework, HRTEU Limited and XTX Markets SAS act as MiFID Market Makers for the Kapsch TrafficCom share. Additionally, the market makers are (as of September 30, 2022):
- Erste Group Bank
- ODDO BHF Corporates & Markets
- Raiffeisen Centrobank AG
Investor Relations activities in the first half of 2022/23.
Kapsch TrafficCom continued to be available for investor inquiries in the first half of the financial year and actively took opportunities to intensify contact with capital market participants. Due to COVID-19, the events were held virtually:
- Virtual investor conference Raiffeisen Bank International
- Virtual investor conference Erste Group Bank
- Numerous direct telephone calls and e-mails
Dividend.
Due to the negative results in the financial year 2021/22, the Executive Board proposed to the Annual General Meeting 2022 that no dividend be paid. The Annual General Meeting followed this proposal. A dividend payment in the following year also appears unlikely given the planned investments as part of the execution of Strategy 2027.
History of dividend payments.
| Year | Dividend per share |
Earnings per share (reference year) |
Payout ratio |
|---|---|---|---|
| 2018 | EUR 1.50 | EUR 2.21 | 68.0% |
| 2019 | EUR 1.50 | EUR 3.68 | 40.8% |
| 2020 | EUR 0.00 | EUR -3.70 | 0.0% |
| 2021 | EUR 0.00 | EUR -7.91 | 0.0% |
| 2022 | EUR 0.00 | EUR -0.72 | 0.0% |
Contact for investors.
| Investor Relations team | Marcus Handl, Valerie Riegler |
|---|---|
| Shareholders' telephone line | +43 50 811 1122 |
| [email protected] | |
| Website | www.kapsch.net |
Management Report H1 2022/23.
1. Economic conditions impacting the Group.
Kapsch TrafficCom is a globally recognized provider of transportation solutions for sustainable mobility. Innovative solutions in the application areas of tolling and tolling services as well as traffic management and demand management contribute to a healthier world without congestion.
Vision and mission.
Kapsch TrafficCom is a globally recognized provider of transportation solutions for sustainable mobility.
Kapsch TrafficCom's mission is to develop innovative transportation solutions for sustainable mobility. Road users should be able to arrive at their
destination conveniently, safely, efficiently, and on time with a minimal amount of environmental pollution. Kapsch TrafficCom's vision is to redefine the limits of mobility to benefit a healthy world without congestion.
Target markets.
In this context, Kapsch TrafficCom addresses the market for Intelligent Transportation Systems (ITS). These support and optimize traffic (including infrastructure, vehicles, users and industry). They use information and communication technologies for this purpose. Within the ITS market, Kapsch TrafficCom focuses on tolling and tolling services as well as traffic management and demand management. Core regions of business activity are North, Central and South America as well as Europe and Oceania (Australia and New Zealand).
Addressable markets.
The addressable market for the company in 2020 had a volume of EUR 4.6 billion. It is expected that the market will grow annually by an average of 6.7% to EUR 7.2 billion in 2027.
Market drivers.
Kapsch TrafficCom has identified the following market drivers:
- Environmental protection
- Need for transportation infrastructure and its maintenance
- Urbanization
- New means of transportation and services
- Connected mobility
- Data and artificial intelligence
- Data security
Further information can be found in the Consolidated Management Report 2021/22.
Fundamental changes in the business environment of Kapsch TrafficCom.
The previously mentioned market drivers have already sparked the following trends:
- While the ITS industry relied heavily on hardware in the past, it is increasingly shifting towards software platforms. More and more, module solutions and cloud applications are playing a role.
- Offered services put the focus on the user and are integrated into platforms and devices preferred by them.
- Payment solutions are integrated into vehicle technology, and new payment technologies are being launched on the market.
- Intelligent transportation infrastructure can be achieved with more affordable sensors, modules, and connection technologies. Specific domain knowledge and the need for customer-specific solutions will remain important, however.
- New solutions can be rolled out quickly on a global scale.
2. Financial performance indicators.
2.1 Result of operations.
Revenues of Kapsch TrafficCom reached EUR 264.8 million in the first half of the current financial year, up by 3.8% on the same period of the previous year. Geographically, the breakdown of revenues was as follows:
- EMEA region (Europe, Middle East, Africa): -13.2% to EUR 125.8 million
- Americas region (North, Central and South America): +24.4% to EUR 123.4 million
- APAC region (Asia-Pacific): +41.3% to EUR 15.6 million
EBITDA and EBIT. The earnings before depreciation and amortization (EBITDA) amounted to EUR 15.0 million (previous year: EUR 21.4 million). The operating result (earnings before interest and taxes, EBIT) was again positive at EUR 4.7 million (previous year: EUR 10.6 million). The EBIT margin was thus 1.8% (previous year: 4.2%).
In the first half of 2022/23 EBITDA and EBIT were impacted by the following one-time effects:
■ Increased personnel costs compared to the previous year (EUR +10.6 million) influenced by unfavorable exchange rate developments as well as salary indexations in different countries due to inflation adjustments and change in the variable compensation model.
The operating currency effects (net) resulted in EUR 9.2 million in the first half of the current financial year (previous year: EUR 2.9 million). This is mainly attributable to the exchange rates in the US dollar relative to the Euro.
In the previous year, special effects amounted to EUR -3.9 million. They included the termination of a customer project in the USA (EUR -4.0 million) and the increase in license and patent expenses due to the settlement of a patent dispute (EUR -3.0 million). There was a positive effect from the early termination of a lease agreement for office space with an impact of EUR 3.1 million.
The financial result in the first half of 2022/23 amounted to EUR -1.2 million (previous year: EUR -2.8 million). This already considers a positive effect from exchange rate changes on internal financing, which had a positive impact of EUR 1.9 million (previous year: EUR +1.0 million). The gains are mainly unrealized.
For the calculation of income taxes, the Group applied a theoretical income tax rate of 25% in the first half of 2022/23 (unchanged from the previous year). The basis for the calculation was the consolidated result before income tax, without factoring in the (already taxed) proportional result from associated companies and joint ventures. This resulted in income tax expenses of EUR 1.1 million (previous year: EUR 2.3 million).
The result for the period in the first half of the financial year was EUR 1.8 million (previous year: EUR 5.4 million).
2.2 Result of operations by segment.
Tolling.
Revenues in the tolling segment increased by 7.9% to EUR 195.3 million and contributed 73.8% (previous year: 70.9%) to total revenues.
The Americas region overtook EMEA in the first half of 2022/23, recording the largest revenues of EUR 94.2 million (+32.6%). The increase resulted mainly from the USA in all business types of implementation, operations and components. Other countries in Latin America such as Chile, Puerto Rico, Costa Rica and Argentina also contributed to the increase in revenues. The largest negative deviation came from Mexico, where implementation projects were included in the previous year but did not contribute to revenues in the current year due to the finalization of the projects.
Tolling revenues per region.
The EMEA region, which was the strongest in the tolling segment in the last financial year, saw a decline in revenue by EUR 13.3 million to EUR 88.0 million. The main reason for this is the termination of the nationwide tolling project in Poland at the end of 2021, but also a decline in revenue in Belarus and France. Revenue increases in South Africa, Spain and Austria could not compensate for the negative effects in the first half of 2022/23.
The APAC region recorded the highest relative growth of 45.8% (EUR +4.1 million). Following the difficult phase of the Corona pandemic, implementation projects have started up again, which is reflected in an increase particularly in Australia and New Zealand. Component revenues in the region remained at the level of the previous year in the first half of 2022/23.
In the first half of 2022/23, 5.44 million on-board units were sold (previous year: 4.48 million units). Increases were reported in the USA, Canada, Australia and South Africa while sales figures declined in France and Spain. The termination of the national toll project in Poland, the sanctions in Russia as well as supply constraints caused by component shortages had an additional negative impact on the components revenues.
Segment tolling by business type.
| in EUR million | H1 2021/22 | H1 2022/23 | +/- |
|---|---|---|---|
| Revenues | 181.0 | 195.3 | 7.9% |
| Implementation | 38.5 | 54.2 | 40.6% |
| Operations | 111.1 | 102.0 | -8.2% |
| Components | 31.4 | 39.2 | 24.8% |
| EBIT | 1.3 | 2.5 | 84.7% |
EBIT. The operating result (EBIT) in the tolling segment was positive at EUR 2.5 million (previous year: EUR 1.3 million). The profitability of operations and components businesses decreased compared to the previous year, but
positive effects from the implementation projects compensated for these negative variances. Adjustments for project margins and expenses due to termination of a project by the customer amounting to
Tolling EBIT: EUR 2.5 million (+84.7%)
EUR -7.0 million were included in the previous year, which led to a positive variance in the current year. Cost of materials and other production services increased by 10.5%. Personnel expenses increased by 8.3% in the first half of 2022/23 due to unfavorable currency developments, salary indexation in various countries and changes in the variable compensation model. The operating currency translation result amounted to EUR +8.0 million (previous year: EUR +2.5 million).
Traffic management.
Revenues in the traffic management (TM) segment decreased by 6.3% to EUR 69.4 million and contributed 26.2% (previous year: 29.1%) to total revenues.
The developments in all regions were as follows:
- EMEA region: -14.1%
- Americas region: +3.7%
- APAC region: +22.0%
In the EMEA region, projects in the Netherlands, the UK, and Ireland in particular contributed to the negative development. In the Americas region, the increase is attributable to implementation projects in Chile and Colombia and operations projects in Argentina. In the APAC region, too, construction and operating sales increased, especially in New Zealand, so that total sales in this region rose from EUR 2.0 million to EUR 2.5 million.
TM revenues by region.
Segment traffic management by business type.
| in EUR million | H1 2021/22 | H1 2022/23 | +/- |
|---|---|---|---|
| Revenues | 74.1 | 69.4 | -6.3% |
| Implementation | 30.6 | 20.5 | -33.2% |
| Operations | 40.6 | 46.5 | 14.3% |
| Components | 2.9 | 2.5 | -12.2% |
| EBIT | 9.3 | 2.3 | -75.7% |
EBIT. The operating result (EBIT) in the traffic management segment totaled EUR 2.3 million in the first half of 2022/23 (previous year: EUR 9.3 million). Cost of materials and other production services increased by EUR 5.2 million. Personnel expenses also rose by 9.5% due to inflation and negative
TM EBIT: EUR 2.3 million (-75.7%)
2.3 Net assets position.
exchange rate developments.
The balance sheet total as of September 30, 2022 amounted to EUR 511.9 million (March 31, 2022: EUR 512.1 million).
Assets.
Non-current assets increased to EUR 203.5 million as of September 30, 2022 (March 31, 2022: EUR 195.6 million). The increase mainly resulted from the addition of rights-of-use assets in property, plant and equipment due to the extension of the lease agreement until 2032 for the office building of the headquarters in Vienna.
Current assets decreased by EUR 8.1 million to EUR 308.4 million (March 31, 2022: EUR 316.5 million). The largest changes related to cash and cash equivalents with a decrease of EUR -28.9 million, mainly due to the scheduled repayments of financial liabilities and the financing of working capital. Inventories increased significantly by EUR 12.2 million to EUR 47.7 million compared to March 31, 2022, as did trade receivables and other current assets (EUR +8.1 million).
Liabilities and equity.
Non-current financial liabilities decreased by a total of EUR 71.4 million in the first half of 2022/23, mainly because of the reclassification to current financial liabilities in line with the scheduled repayments and maturities (EUR -73.0 million) and new borrowings of EUR 1.6 million.
Non-current lease liabilities increased by EUR 9.0 million, mainly due to the extension of the lease agreement for the office building of the headquarters in Vienna.
Current financial liabilities increased by a total of EUR 66.4 million. The main changes resulted from reclassifications due to maturities (EUR +73.0 million), repayments of EUR 16.7 million and additions of EUR 4.5 million (see note 10).
Equity amounted to EUR 63.1 million as of September 30, 2022. The decrease of EUR 14.8 million compared to the balance sheet date March 31, 2022, mainly reflects the negative other comprehensive income from currency translation differences (EUR -16.3 million) in the first half of 2022/23. The equity ratio as of September 30, 2022 was 12.3% (March 31, 2022: 15.2%).
2.4 Financial position.
Cash flow.
Cash flow from operating activities was negative in the first half of the current financial year at EUR -9.0 million (previous year: EUR -0.3 million). The change in net working capital in the first half of 2022/23 was EUR -8.2 million (previous year: EUR -3.2 million). The following effects were critical for this: "inventories" increased by EUR 12.2 million (previous year: decrease of EUR 3.5 million) as well as "trade receivables and other current assets" and "contract assets" by EUR 6.7 million (previous year: EUR 5.0 million). The total of "trade payables and other current liabilities" and "contract liabilities from customer contracts" increased by EUR 14.8 million (previous year: increase of EUR 11.1 million). The current provisions went down by EUR 4.1 million (previous year: decrease of EUR 12.8 million), and this also had a negative impact on the cash flow from operating activities.
Cash flow from investing activities amounted to EUR -2.4 million in the first half of 2022/23 (previous year: EUR -0.9 million) and mainly comprises the purchase of property, plant and equipment (EUR -1.7 million) and the purchase of intangible assets (EUR -0.5 million).
The free cash flow is the sum of cash flow from operating activities and cash flow from investing activities and amounted to EUR -11.4 million in the first half of 2022/23 and was significantly lower than in the same period of the previous year (EUR -1.2 million).
Cash flow from financing activities amounted to EUR -17.4 million in the first half of the year (previous year: EUR -39.4 million). The change is primarily attributable to the repayment of current financial liabilities in the amount of EUR -16.7 million, the raising of new financing in the amount of EUR 6.1 million, and the ongoing repayment of lease liabilities (EUR -6.5 million).
Cash and cash equivalents as of September 30, 2022, totaled EUR 30.8 million (March 31, 2022: EUR 59.8 million).
Key figures as of September 30, 2022.
Net debt reached EUR 190.3 million (March 31, 2022: EUR 158.3 million), which corresponded to a gearing of 301.6% (March 31, 2022: 203.2%). The increase in net debt was mainly due to the lower level of cash and cash equivalents (EUR -28.9 million), the change in financial liabilities (EUR +5.0 million) and the increase in lease liabilities (EUR -8.6 million).
3. Information on major transactions with related parties and changes in the Group structure.
Apart from the details included in the consolidated financial statements 2021/22 and the information included in note 13, there were no other transactions with related parties that had a significant impact on the financial position or operating result during the first half of the financial year.
4. Significant events occurring after balance sheet date.
There were no significant events after September 30, 2022.
5. Risk reporting.
Enterprise Risk Management (ERM), which is part of Group Risk & Internal Audit, aims to identify, evaluate and control risks at an early stage that have a significant impact on the company's success in achieving its strategic and operational objectives. However, the primary objective is not risk avoidance, but rather the controlled and conscious handling of risks as well as the timely identification and realization of opportunities. Thus, ERM makes a valuable contribution to corporate management. As part of ERM, major risks are identified, quantified, and globally aggregated on a quarterly basis. The risk report derived from this enables the concise assessment and monitoring of the major business risks. The report is sent to the Executive Board and the Audit Committee of the Supervisory Board.
Project-oriented risk management includes customer projects as well as internal development projects. All relevant risks and opportunities are analyzed during the preparation of the offer on the basis of institutionalized processes. Decisions and the timely planning and implementation of control measures is thereby ensured due to the measures already mentioned.
The material risks of Kapsch TrafficCom are as follows:
- Industry-specific risks: volatility of new orders, risks of project execution, risks due to non-negotiable, disadvantageous terms and conditions of long-term contracts with public agencies.
- Strategic risks: ability to innovate, acquisition and integration of companies as part of the Group's growth, country risk.
- Financial risks: foreign exchange risk, interest rate risk, liquidity risk, credit risk.
- Personnel risk.
- Legal risk.
- IT risks.
The major risks faced by the Group are addressed in Section 2.2 of the Consolidated Management Report 2021/22.
The COVID-19 pandemic and the associated economic crisis as well as the outbreak of the conflict in Ukraine and the related sanctions against Russia continue to be felt by Kapsch TrafficCom. The Group has faced supply chain bottlenecks in component sales. With respect to new business, visibility was comparatively low. The management expects that the above mentioned risks for the Group will remain in place in the second half of 2022/23 but will slowly decrease.
An internal control system (ICS) exists within the Group to document the internal control processes implemented in the accounting context. Responsibility for the implementation, design and monitoring of the ICS with a view to ensuring compliance with group-wide guidelines and regulations is incumbent upon the competent local management bodies in each case. Detailed Information of the internal control system is presented in section 2.3 of the Group Management Report 2021/22.
6. Outlook for the second half of the current financial year.
In the second half of the current financial year, Kapsch TrafficCom continues to focus on new business, cost discipline and liquidity management. In South Africa, the announcement of the Gauteng province on how it intends to proceed with the toll system is expected. Likewise, special attention is being paid to the project in Belarus, which continues to run according to plan. Finally, the Executive Board is closely monitoring the macroeconomic developments and is prepared to react with agility.
In terms of new business, Kapsch TrafficCom is slowly seeing a market recovery from the impact of the COVID-19 pandemic and repeat orders and new projects are expected throughout 2023. After the sale of the Spanish public transport business was agreed in August, the transaction should be closed shortly and bring a positive effect on earnings.
On this basis, the Executive Board continues to expect a stable level of revenue and, compared to the previous financial year, significantly improved profitability for the financial year 2022/23. This will include the special effect from the sale of the Spanish business. However, the development of the aforementioned factors is subject to uncertainties and may impact the results accordingly.
Vienna, November 15, 2022
The Executive Board
Georg Kapsch Chief Executive Officer
Andreas Hämmerle Executive Board Member
Alfredo Escribá Gallego Executive Board Member
Statement of all Members of the Executive Board.
Pursuant to § 125 subsection 1 Stock Exchange Act 2018.
We confirm to the best of our knowledge that the condensed consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as required by the applicable accounting standards and that the Group management report gives a true and fair view of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated interim financial statements and of the principal risks and uncertainties for the remaining six months of the financial year.
Vienna, November 15, 2022
The Executive Board
Georg Kapsch Chief Executive Officer
Andreas Hämmerle Executive Board Member
Alfredo Escribá Gallego Executive Board Member
Condensed Consolidated Interim Financial Information
as of September 30, 2022.*)
Kapsch TrafficCom – Consolidated statement of comprehensive income.
| in k EUR | Note | H1 2021/22 | H1 2022/23 |
|---|---|---|---|
| Revenues | (2) | 255,169 | 264,752 |
| Other operating income | (3) | 10,883 | 15,419 |
| Changes in finished and unfinished goods | -1,064 | 915 | |
| Cost of materials and other production services | -90,097 | -104,005 | |
| Personnel expenses | (4) | -114,989 | -125,610 |
| Other operating expenses | (5) | -37,173 | -35,515 |
| Proportional result of associates and joint ventures | (8) | -1,333 | -979 |
| Operating result before amortization, depreciation and impairment (EBITDA) | 21,395 | 14,978 | |
| Amortization and depreciation | -10,855 | -10,246 | |
| Impairment charge and write-up from impairments | 107 | 0 | |
| Operating result (EBIT) | 10,647 | 4,732 | |
| Finance income | 2,791 | 2,940 | |
| Finance costs | -5,600 | -4,168 | |
| Financial result | -2,809 | -1,228 | |
| Proportional results from associates and joint ventures from financial investments | -167 | -620 | |
| Result before income taxes | 7,671 | 2,884 | |
| Income tax | (6) | -2,293 | -1,121 |
| Result for the period | 5,378 | 1,763 | |
| Equity holders of the company | 2,991 | 295 | |
| Non-controlling interests | 2,387 | 1,468 | |
| Earnings per share from the result for the period attributable to the equity holders of the company (in EUR) 1) |
0.23 | 0.02 | |
| Other comprehensive income for the period | |||
| Currency translation differences | -3,738 | -21,725 | |
| Currency translation differences from net investments in foreign operations | 610 | 7,268 | |
| Income tax relating to items subsequently to be reclassified to the result for the period | -153 | -1,817 | |
| Total items subsequently to be reclassified to the result for the period | -3,280 | -16,275 | |
| Total items subsequently not to be reclassified to the result for the period | 0 | -0 | |
| Other comprehensive income for the period net of tax | -3,280 | -16,275 | |
| Total comprehensive income for the period | 2,098 | -14,511 | |
| Equity holders of the company | 1,524 | -13,693 | |
| Non-controlling interests | 574 | -818 |
1) Earnings per share diluted = undiluted and relating to 13.0 million shares.
*) The condensed consolidated interim financial information has neither been audited nor been reviewed by an auditor.
Kapsch TrafficCom – Consolidated balance sheet.
| in k EUR | Note | March 31, 2022 | Sept. 30, 2022 |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | (7) | 48,993 | 57,301 |
| Intangible assets | (7) | 35,748 | 34,369 |
| Interests in associates and joint ventures | (8) | 27,832 | 26,178 |
| Other non-current financial assets and investments | (9) | 14,984 | 16,518 |
| Non-current contract assets | 3,703 | 5,563 | |
| Other non-current assets 1) | (9) | 4,101 | 3,979 |
| Deferred tax assets | 60,223 | 59,599 | |
| Non-current assets | 195,584 | 203,507 | |
| Inventories | 35,556 | 47,727 | |
| Trade receivables and other current assets 1) | (9) | 131,449 | 135,160 |
| Current contract assets | (9) | 83,787 | 86,745 |
| Current tax receivables | 4,392 | 5,860 | |
| Other current financial assets | (9) | 1,580 | 2,082 |
| Cash and cash equivalents | (9) | 59,751 | 30,833 |
| Current assets | 316,515 | 308,407 | |
| TOTAL ASSETS | 512,100 | 511,914 | |
| EQUITY | |||
| Share capital | 13,000 | 13,000 | |
| Capital reserve | 117,509 | 117,509 | |
| Retained earnings and other reserves | -47,313 | -61,006 | |
| Capital and reserves attributable to equity holders of the company | 83,196 | 69,503 | |
| Non-controlling interests | -5,294 | -6,382 | |
| TOTAL EQUITY | 77,902 | 63,121 | |
| LIABILITIES | |||
| Non-current financial liabilities | (9,10) | 136,051 | 64,652 |
| Non-current lease liabilities | (9) | 27,604 | 36,651 |
| Liabilities from post-employment benefits to employees | 24,198 | 23,018 | |
| Non-current provisions | (11) | 1,685 | 1,510 |
| Non-current contract liabilities | 1,207 | 653 | |
| Other non-current liabilities | (9) | 425 | 360 |
| Deferred tax liabilities | 2,859 | 3,887 | |
| Non-current liabilities | 194,029 | 130,730 | |
| Current financial liabilities | (9,10) | 44,013 | 110,453 |
| Current lease liabilities | (9) | 11,940 | 11,502 |
| Trade payables | (9) | 71,476 | 76,557 |
| Current contract liabilities | 35,678 | 39,618 | |
| Current provisions | (11) | 28,630 | 24,542 |
| Current tax liabilities | 2,314 | 3,501 | |
| Other liabilities and deferred income | (9) | 46,118 | 51,888 |
| Current liabilities | 240,169 | 318,063 | |
| TOTAL LIABILITIES | 434,198 | 448,793 | |
| TOTAL EQUITY AND LIABILITIES | 512,100 | 511,914 |
1) Non-current and current lease receivables were reclassified and are not shown separately anymore due to immateriality but are included in other non-current assets and trade receivables and other current assets.
Kapsch TrafficCom – Consolidated statement of changes in equity.
| in k EUR | Share capital |
Capital reserve |
Other reserves |
Consoli dated retained earnings |
Attributable to equity holders of the company |
Non controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|
| Carrying amount as of March 31, 2022 | 13,000 | 117,509 | -42,994 | -4,319 | 83,196 | -5,294 | 77,902 |
| Dividend | 0 | 0 | -270 | -270 | |||
| Result for the period | 295 | 295 | 1,468 | 1,763 | |||
| Other comprehensive income for the period: | 0 | ||||||
| Currency translation differences | -13,988 | -13,988 | -2,286 | -16,275 | |||
| Carrying amount as of | |||||||
| September 30, 2022 | 13,000 | 117,509 | -56,982 | -4,024 | 69,503 | -6,382 | 63,121 |
| Carrying amount as of March 31, 2021 | 13,000 | 117,509 | -44,171 | 4,903 | 91,241 | -6,480 | 84,761 |
| Dividend | 0 | 0 | -67 | -67 | |||
| Result for the period | 2,991 | 2,991 | 2,387 | 5,378 | |||
| Other comprehensive income for the period: | |||||||
| Currency translation differences | -1,467 | -1,467 | -1,813 | -3,280 | |||
| Remeasurements of liabilities from post-employment benefits |
-90 | 90 | 0 | 0 | |||
| Carrying amount as of | |||||||
| September 30, 2021 | 13,000 | 117,509 | -45,728 | 7,984 | 92,765 | -5,973 | 86,792 |
The registered share capital of Kapsch TrafficCom AG amounts to EUR 13,000,000. The share capital is fully paid in. The total number of ordinary shares issued is 13,000,000. The shares are ordinary bearer shares and have no par value. Each share entitles the holder to one vote. At the reporting date of September 30, 2022 Kapsch TrafficCom AG does not hold any treasury shares.
Kapsch TrafficCom – Consolidated cash flow statement.
| in k EUR | Note | H1 2021/22 | H1 2022/23 |
|---|---|---|---|
| Operating result | 10,647 | 4,732 | |
| Scheduled depreciation and amortization | 10,855 | 10,246 | |
| Impairment charge and reversals | -107 | 0 | |
| Change in obligations for post-employment benefits | -872 | -1,180 | |
| Change in non-current receivables, non-current contract assets and other non-current assets | -712 | -1,757 | |
| Change in non-current trade payables, non-current contract liabilities and | |||
| other non-current liabilities and provisions | -9,649 | -800 | |
| Net payments of income taxes | -1,792 | 249 | |
| Interest received | 199 | 492 | |
| Interest payments | -2,145 | -3,028 | |
| Other (net) | -3,439 | -9,801 | |
| Cash flow from earnings | 2,985 | -848 | |
| Change in net working capital: | |||
| Change in trade receivables, current contract assets and other current assets | -5,032 | -6,720 | |
| Change in inventories | 3,481 | -12,171 | |
| Change in trade payables, current contract liabilities and other current payables | 11,082 | 14,792 | |
| Change in current provisions | -12,766 | -4,088 | |
| Change in net working capital | -3,235 | -8,187 | |
| Cash flow from operating activities | -251 | -9,035 | |
| Purchase of property, plant and equipment | (7) | -810 | -1,706 |
| Purchase of intangible assets | (7) | -42 | -509 |
| Purchase of securities, investments and other non-current financial assets | -1,878 | -903 | |
| Proceeds from the disposal of shares in subsidiaries | 843 | 0 | |
| Proceeds from the disposal of property, plant and equipment | 694 | 365 | |
| Proceeds from the disposal of intangible assets | 0 | 206 | |
| Proceeds from the disposal of securities and other financial assets | 281 | 177 | |
| Cash flow from investing activities | -911 | -2,370 | |
| Free cash flow 1) | -1,162 | -11,405 | |
| Dividends paid to non-controlling interests | -67 | -270 | |
| Increase in non-current financial liabilities | (10) | 18,537 | 1,600 |
| Increase in current financial liabilities | (10) | 8,937 | 4,484 |
| Decrease in current financial liabilities | (10) | -58,073 | -16,728 |
| Lease payments | -8,770 | -6,469 | |
| Cash flow from financing activities | -39,436 | -17,383 | |
| Cash and cash equivalents at beginning of year | 102,010 | 59,751 | |
| Changes in cash and cash equivalents 2) | -40,598 | -28,788 | |
| Exchange gains/losses | -316 | -130 | |
| Cash and cash equivalents at end of year | 61,096 | 30,833 |
1) Cash flow from operating activities + cash flow from investing activities
2) Free cash flow + cash flow from financing activities
Selected notes to the condensed consolidated interim financial information.
Outline.
| General information | 22–23 |
|---|---|
| 1 – General information | 22 |
| Consolidated statement of comprehensive income | 23–24 |
| 2 – Segment information 3 – Other operating income 4 – Personnel expenses 5 – Other operating expenses 6 – Income tax |
23 23 23 24 24 |
| Consolidated balance sheet | 25–29 |
| 7 – Property, plant and equipment and intangible assets 8 – Interests in associates and joint ventures 9 – Financial instruments by category 10 – Financial liabilities 11 – Provisions 12 – Contingent liabilities and other commitments |
25 25 26 27 28 29 |
| Other information | 29–31 |
| 13 – Related party transactions 14 – Risk and capital management 15 – New and amended standards and interpretations 16 – Significant events after September 30, 2022 |
29 31 31 31 |
1 General information.
Kapsch TrafficCom is a global supplier of superior technologies, solutions and services in the ITS market (Intelligent Transportation Systems). Intelligent Transportation Systems support and optimize the traffic, so they use information and communication solutions.
Kapsch TrafficCom operates in two segments: tolling and traffic management.
Tolling.
This segment comprises activities relating to the implementation and the technical and commercial operation of toll collection systems. Projects are generally awarded by public agencies or private concessionaires as part of tender procedures. Toll collection systems may comprise both individual road sections and nation-wide road networks. The manufacture and procurement of components both for the expansion and adaptation of the systems installed by Kapsch TrafficCom and on behalf of third parties complete the portfolio of Kapsch TrafficCom; toll services for business customers and private customers further complete it.
Traffic management.
This segment primarily comprises activities relating to the implementation and operation of systems and solutions for controlling traffic and mobility behavior, as well as the relating components business. The strategic focus is on the areas of traffic optimization, decision intelligence (analysis, simulation and prediction of traffic) and the operation of mobility platforms and services. One basis for this is the use of increasing amounts of data for analysis, simulation and intelligent control of traffic flows and mobility behavior. Customers in the traffic management segment are mainly public authorities but also private companies.
1.1 Group structure and consolidated group.
The parent company (reporting entity) of this group is Kapsch TrafficCom AG. The company is a joint stock corporation incorporated and domiciled in Vienna, Austria. The address of its registered office is 1120 Vienna, Am Europlatz 2.
On August 29, 2022, Kapsch TrafficCom agreed to sell the group company "Arce Mobility Solutions" to the technology company Kontron (signing) in order to exit the Spanish public transportation sector, which is not directly related to its strategic core business. Subject to regulatory approvals, the deal is anticipated to have a favorable impact on earnings during the third quarter.
Further information on the Group structure and the scope of consolidation can be found in the consolidated financial statements as of March 31, 2022.
1.2 Basis of preparation.
This condensed interim financial information for the first half of the financial year ended September 30, 2022 has been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the IASB, as adopted by the EU, in accordance with IAS 34 Interim Financial Statements, and should only be read in conjunction with the annual financial statements for the year ended March 31, 2022.
The condensed interim financial information was neither subject to an audit nor to a review by an auditor.
For ease of presentation, amounts have been rounded off and, unless indicated otherwise, are presented in thousands of Euro (EUR k). However, calculations are done using exact amounts, including the digits not shown, which may lead to rounding differences.
The accounting and valuation principles used in this condensed interim financial information for the first half of the financial year ended September 30, 2022 in general are consistent with those applied in the consolidated financial statements as of March 31, 2022 (see note 35). An exemption is the new or amended IFRS and IFRIC disclosed in note 15.
1.3 Material accounting estimates and assumptions.
The Group makes judgments, estimates, and assumptions regarding the application of accounting principles and the reported quantities of assets, liabilities, income, and expenses to prepare the condensed consolidated interim financial statements. These predictions may not match the final results. All estimates and judgments are continually re-evaluated and are based on historical experience and other factors, including expectations as to future events which are believed to be reasonable under the given circumstances.
The estimates and assumptions made by the Management are in line with those adopted in the consolidated financial statements for the year ended March 31, 2022 (note 1.4) and described therein. These have also been applied to the financial statements for the first half of 2022/23.
2 Segment information.
The segment results by business type, which also correspond to performance obligations pursuant to IFRS 15, are as follows:
| H1 2021/22 | H1 2022/23 | ||||||
|---|---|---|---|---|---|---|---|
| Tolling | Traffic management |
Total | Tolling | Traffic management |
Total | ||
| Revenues | 181,041 | 74,128 | 255,169 | 195,320 | 69,432 | 264,752 | |
| Implementation | 38,522 | 30,627 | 69,149 | 54,154 | 20,460 | 74,613 | |
| Operations | 111,113 | 40,649 | 151,762 | 101,979 | 46,469 | 148,448 | |
| Components | 31,406 | 2,852 | 34,258 | 39,187 | 2,503 | 41,690 | |
| Operating result | 1,335 | 9,312 | 10,647 | 2,466 | 2,266 | 4,732 | |
| EBIT margin | 0.7% | 12.6% | 4.2% | 1.3% | 3.3% | 1.8% |
There was no customer who contributed more than 10% of revenues in the first half of 2022/23, as in the previous year.
3 Other operating income.
| H1 2021/22 | H1 2022/23 | |
|---|---|---|
| Exchange rate gains from operating activities | 4,055 | 13,316 |
| Gains from early termination of a leasing contract | 3,143 | 0 |
| Sundry operating income | 3,685 | 2,103 |
| Total | 10,883 | 15,419 |
The operating foreign currency gains in the first half of 2022/23 were mainly based on exchange rate fluctuations in the US dollar (USD) against the Euro (EUR) and the Canadian dollar (CAD), the majority of which is unrealized. The income from the early termination of a lease in the first half of the previous year amounting to EUR 3,143 k related to a lease in the USA. Despite a termination payment of EUR 1,867 k, the early termination and the associated reversal of the lease liability resulted in income, as the right of use had already been impaired in the previous period.
4 Personnel expenses.
Personnel expenses increased by 9.2% to EUR 125,610 k in the first half of 2022/23, mainly due to unfavorable currency developments, salary indexation in different countries and changes in the variable compensation model. The number of employees as of September 30, 2022 was 4,195, 7.1% lower than the comparable figure for the previous year (September 30, 2021: 4,526).
5 Other operating expenses.
| H1 2021/22 | H1 2022/23 | |
|---|---|---|
| Communication and IT expenses | 7,584 | 7,272 |
| Legal and consulting fees | 6,865 | 5,395 |
| Exchange rate losses from operating activities | 1,162 | 4,137 |
| Maintenance | 2,414 | 3,646 |
| Travel expenses | 1,323 | 2,799 |
| Automobile expenses | 1,800 | 2,355 |
| Rental and other building expenses | 1,690 | 1,817 |
| License and patent expenses | 4,612 | 1,623 |
| Marketing and advertising expenses | 1,858 | 1,573 |
| Insurance costs | 1,737 | 1,508 |
| Office expenses | 1,163 | 1,192 |
| Other | 4,966 | 2,198 |
| Total | 37,173 | 35,515 |
License and patent expenses decreased by EUR 2,989k after one-off effects for the settlement of a patent dispute in the amount of EUR 2,988k were included in the first half of the previous year. Consequently, legal and consulting expenses also decreased by EUR 1,470k in the first half of 2022/23 compared to the prior period. Operating foreign currency losses increased by EUR 2,975k in the first half of 2022/23, mainly related to the US dollar (USD) versus the Euro (EUR). Travel expenses also increased by EUR 1,476k compared to the previous period to pre-crisis levels, reflecting the elimination of most travel restrictions due to COVID-19. Other operating expenses include various expense items, each smaller than EUR 1 million in the current reporting period and in the comparable period of the previous year.
6 Income tax.
Income tax relate to current taxes and to deferred tax assets and liabilities. The effective tax expense is not determined until the end of the financial year. During the financial year, Kapsch TrafficCom uses a theoretical tax rate. This rate is applied to Group earnings before taxes adjusted for the already taxed proportional results from associates and joint ventures and before impairment of goodwill. At year-end, the effective tax rate may differ from the (theoretical) tax rate during the year. This may result from differences in taxation in the various countries, the recognition or impairment of tax loss carry-forwards, tax allowances and permanent tax differences.
In the first half of 2022/23 as in the previous year a theoretical tax rate of 25% was applied to the Group's pre-tax result. This tax rate is based on a revenue-weighted analysis of the nominal tax rates of the individual countries in which Kapsch TrafficCom operates.
7 Property, plant and equipment and intangible assets.
| H1 2021/22 | H1 2022/23 | |
|---|---|---|
| Carrying amount as of March 31 of financial year | 91,400 | 84,741 |
| Additions | 3,723 | 2,215 |
| Additions of right-of-use assets from leases | 7,049 | 15,598 |
| Disposals | -405 | -506 |
| Disposals of right-of-use assets from leases | -582 | -2,549 |
| Disposals relating to deconsolidation of subsidiaries | -458 | 0 |
| Write-up from impairments of right-of-use assets | 107 | 0 |
| Depreciation, amortization and other movements | -4,564 | -4,412 |
| Depreciation on right-of-use assets from leases | -6,291 | -5,834 |
| Currency translation differences | 110 | 2,416 |
| Carrying amount as of September 30 of financial year | 90,089 | 91,670 |
The additions to rights of use from leases in the first half of 2022/23 mainly relate to the extension of the lease for the office building of the headquarters in Vienna until 2032.
As of September 30, 2022 property, plant and equipment included right-of-use assets from leases in the amount of EUR 45,572k (March 31, 2022: EUR 36,576k).
8 Interests in associates and joint ventures.
Details of associates and joint ventures are shown in the consolidated financial statements of 2021/22.
| H1 2021/22 | H1 2022/23 | |
|---|---|---|
| Carrying amount as of March 31 of financial year | 29,751 | 27,832 |
| Proportional result of the period from core business | -1,333 | -979 |
| Proportional result of the period from financial investments | -167 | -620 |
| Currency translation differences | -15 | -56 |
| Carrying amount as of September 30 of financial year | 28,236 | 26,178 |
| thereof interests in associates | 8,900 | 7,924 |
| thereof interests in joint ventures | 19,336 | 18,253 |
As of September 30, 2022, as well as of September 30, 2021, and March 31, 2022, shares in associates related to Traffic Technology Services Inc., USA.
The interests in joint ventures as of September 30, 2022, as well as of September 30, 2021, and March 31, 2022, mainly related to the joint venture autoTicket GmbH, Germany.
Proportional results from associates and joint ventures are split in the presentation in the income statement and are individually valued. Results from associates and joint ventures whose activities and strategic directions are part of the core business of Kapsch TrafficCom are reported in the operating result. Results from other associates and joint ventures are reported in the result before income tax.
9 Financial instruments by category.
| Financial instruments by category at carrying amount | March 31, 2022 | Sept. 30, 2022 |
|---|---|---|
| Trade receivables and other current and non-current assets | 135,550 | 139,139 |
| At amortized cost | 98,023 | 104,534 |
| Trade receivables (current and non-current) | 98,023 | 104,534 |
| At fair value through profit or loss | 1,545 | 1,434 |
| Derivative financial instruments (Fair value level 2) | 1,545 | 1,434 |
| Other non-financial assets 1) | 35,982 | 33,171 |
| Contract assets (non-current and current) at amortized cost | 87,490 | 92,308 |
| Other financial assets and investments (non-current and current) | 16,564 | 18,600 |
| At fair value through profit or loss | 3,807 | 3,631 |
| Securities (Fair value level 1) | 3,700 | 3,524 |
| Investments (Fair value level 3) | 107 | 107 |
| At amortized cost | 12,757 | 14,969 |
| Other financial assets and loans (non-current) | 11,177 | 12,887 |
| Other financial assets and loans (current) | 1,580 | 2,082 |
| Cash and cash equivalents at amortized cost | 59,751 | 30,833 |
| Financial liabilities (non-current and current) at amortized cost | 180,065 | 175,105 |
| Promissory note bond (Fair value level 2) | 31,479 | 31,484 |
| Project financing (Fair value level 2) | 33,226 | 30,763 |
| Operating loans (Fair value level 2) | 99,626 | 94,479 |
| Other financial liabilities (Fair value level 2) | 15,734 | 18,379 |
| Lease liabilities (non-current and current) at amortized cost | 39,544 | 48,153 |
| Lease liabilities (non-current and current) 2) | 39,544 | 48,153 |
| Trade payables at amortized cost | 71,476 | 76,557 |
| Other liabilities and deferred income (non-current and current) | 46,543 | 52,248 |
| At amortized cost | 425 | 360 |
| Other financial liabilities | 425 | 360 |
| At fair value through profit or loss | 74 | 74 |
| Derivative financial instruments (Fair value level 2) | 74 | 74 |
| Other non-financial liabilities 1) | 46,044 | 51,814 |
1) Non-financial receivables and liabilities are only included for reconciliation with the respective balance sheet item.
2) Lease liabilities belong to financial liabilities, but do not underly the disclosure requirements of IFRS 7.
Fair Value.
Details on the fair value-hierarchies can be found in the consolidated financial statements of 2021/22. No reclassifications between fair value hierarchy levels have been made since then.
The carrying amount of the following positions, which are valued at amortized cost, is a reasonable approximation of the fair value in accordance with IFRS 7.29: "trade receivables and other current assets", "contract assets", "other current financial assets and loans", "cash and cash equivalents", "trade payables" and "other liabilities and deferred income".
As of September 30, 2022, the fair value of non-current and current financial liabilities amounted to EUR 31,245 k for the promissory note bond (March 31, 2022: EUR 31,478k), EUR 30,166 k for the project financing (March 31, 2022: EUR 33,236k), EUR 93,652k for the non-current and current operating loans (March 31, 2022: EUR 99,229k) and EUR 18,363k for other financial liabilities (March 31, 2022: EUR 15,692k).
Impairment on trade receivables and contract assets.
Impairment on "trade receivables" increased by EUR 120k in the first half of 2022/23 (first half of 2021/22: EUR-186k). The impairment on "contract assets" decreased by EUR1.123k (first half of 2021/22: EUR +12k). Both effects were recognized through profit or loss in the statement of comprehensive income.
There were no adjustments for investments measured according to Level 3 in the first half of 2022/23.
10 Financial liabilities.
| March 31, 2021 | Sept. 30, 2021 | March 31, 2022 | Sept. 30, 2022 | |
|---|---|---|---|---|
| Non-current financial liabilities | 120,895 | 146,846 | 136,051 | 64,652 |
| Current financial liabilities | 102,362 | 45,649 | 44,013 | 110,453 |
| 223,257 | 192,495 | 180,065 | 175,105 |
Movements in financial liabilities are as follows:
| H1 2021/22 | H1 2022/23 | ||||||
|---|---|---|---|---|---|---|---|
| Non current |
Current | Total | Non current |
Current | Total | ||
| Carrying amount as of | |||||||
| March 31 of financial year | 120,895 | 102,362 | 223,257 | 136,051 | 44,013 | 180,065 | |
| Reclassification | 7,374 | -7,374 | -0 | -73,982 | 73,982 | -0 | |
| Additions | 18,537 | 8,937 | 27,474 | 1,600 | 4,484 | 6,084 | |
| Repayments | 0 | -58,073 | -58,073 | 0 | -16,728 | -16,728 | |
| Currency translation differences | |||||||
| and other non-cash movements | 40 | -205 | -164 | 982 | 4,702 | 5,684 | |
| Carrying amount as of | |||||||
| September 30 of financial year | 146,846 | 45,649 | 192,495 | 64,652 | 110,453 | 175,105 |
Additions and repayments are cash effective. Reclassifications between non-current and current financial liabilities are non-cash movements and relate to reclassifications due to repayment scheduled and remaining maturities.
The fair values and gross cash flows (including interest) of financial liabilities are as follows:
| Sept. 30, 2021 | Sept. 30, 2022 | |
|---|---|---|
| In the next 6 months | 42,540 | 20,793 |
| In the next 7 to 12 months | 6,830 | 92,478 |
| Gross cash flows up to one year | 49,370 | 113,272 |
| Between 1 and 2 years | 71,285 | 22,599 |
| Between 2 and 3 years | 32,952 | 18,550 |
| Between 3 and 4 years | 10,836 | 10,030 |
| Between 4 and 5 years | 19,004 | 5,017 |
| Gross cash flows 2-5 years | 134,077 | 56,197 |
| Gross cash flows more than 5 years | 17,621 | 9,100 |
| Total | 201,068 | 178,569 |
11 Provisions.
| March 31, 2021 | Sept. 30, 2021 | March 31, 2022 | Sept. 30, 2022 | |
|---|---|---|---|---|
| Non-current provisions | 3,349 | 2,557 | 1,685 | 1,510 |
| Current provisions | 42,472 | 29,705 | 28,630 | 24,542 |
| 45,820 | 32,263 | 30,315 | 26,053 |
| March 31, 2022 |
Addition and accu mulation |
Utilization | Disposal | Reclas sification |
Currency translation differences |
Sept. 30, 2022 |
|
|---|---|---|---|---|---|---|---|
| Warranties | 512 | 0 | 0 | 0 | -127 | 0 | 386 |
| Projects (excl. impending losses) | 75 | 0 | 0 | 0 | -25 | 0 | 50 |
| Provision for restructuring costs | 22 | 0 | -20 | 0 | 2 | ||
| Other non-current provisions | 1,076 | 0 | 0 | -15 | 0 | 11 | 1,072 |
| Non-current provisions, total | 1,685 | 0 | 0 | -15 | -172 | 11 | 1,510 |
| 0 | |||||||
| Warranties | 1,772 | 0 | 0 | -195 | 127 | 27 | 1,730 |
| Provision for losses from | |||||||
| onerous contracts | 20,976 | 727 | -653 | -6,376 | 0 | 1,996 | 16,670 |
| Projects (excl. impending losses) | 4,457 | 0 | -25 | 0 | 25 | -2 | 4,455 |
| Legal fees, costs of litigation and contract risks |
305 | 0 | -63 | -37 | 0 | 8 | 213 |
| Provision for restructuring costs | 155 | 0 | -85 | 0 | 20 | -2 | 87 |
| Other current provisions | 965 | 1,632 | -292 | -856 | 0 | -62 | 1,387 |
| Current provisions, total | 28,630 | 2,359 | -1,118 | -7,465 | 172 | 1,965 | 24,542 |
| Total | 30,315 | 2,359 | -1,118 | -7,480 | 0 | 1,976 | 26,053 |
Provision for losses from onerous contracts as of September 30, 2022 as well as of March 31, 2022 mainly relates to implementation projects of an American subsidiary that cannot be completed with a profit.
| March 31, 2021 |
Addition and accu mulation |
Utilization | Disposal | Reclas sification |
Currency translation differences |
Sept. 30, 2022 |
|
|---|---|---|---|---|---|---|---|
| Warranties | 1,177 | 0 | 0 | 0 | -57 | 0 | 1,120 |
| Projects (excl. impending losses) | 194 | 0 | 0 | 0 | -119 | 0 | 75 |
| Provision for restructuring costs | 556 | 0 | -556 | 0 | 0 | ||
| Other non-current provisions | 1,422 | 16 | 0 | -23 | -103 | 50 | 1,362 |
| Non-current provisions, total | 3,349 | 16 | 0 | -23 | -834 | 50 | 2,557 |
| 0 | |||||||
| Warranties | 1,011 | 0 | 0 | -13 | 57 | 8 | 1,063 |
| Provision for losses from | |||||||
| onerous contracts | 19,611 | 4,782 | -9,174 | -3 | 0 | 175 | 15,391 |
| Projects (excl. impending losses) | 7,685 | 3 | -25 | -12 | 119 | 16 | 7,784 |
| Legal fees, costs of litigation | |||||||
| and contract risks | 9,650 | 104 | -6,785 | 0 | 0 | -69 | 2,901 |
| Provision for restructuring costs | 3,361 | 0 | -2,461 | -397 | 534 | 1 | 1,038 |
| Other current provisions | 1,153 | 1,286 | -112 | -921 | 125 | -4 | 1,528 |
| Current provisions, total | 42,472 | 6,175 | -18,557 | -1,346 | 834 | 127 | 29,705 |
| Total | 45,820 | 6,191 | -18,557 | -1,368 | 0 | 177 | 32,263 |
12 Contingent liabilities and other commitments.
The contingent liabilities primarily result from large-scale projects. Major projects frequently call for the issuance of bid bonds or performance bonds, which are issued by financial institutions and insurance firms. There is the possibility of a claim, which could lead to a right of recourse on the part of the financial institution or insurance company against the Group, if the contractual duties cannot be met.
The contingent liabilities and other commitments solely comprise obligations owed to third parties and are in line with standard industry practice. They detail as follows:
| Contract, warranty, performance and bid bonds | March 31, 2022 | Sept. 30, 2022 |
|---|---|---|
| North America (toll collection systems) | 27,363 | 28,856 |
| Australia (toll collection systems) | 15,919 | 15,324 |
| 43,281 | 44,180 |
Further performance and bid bonds from financial institutes or insurance companies, where an outflow of resources is deemed unlikely, amount to EUR 305,590 k (March 31, 2022: EUR 267,417 k) and are not included in the balance sheet or in the contingent liabilities.
The disclosures concerning the joint venture autoTicket GmbH, Germany, did not change compared to the consolidated financial statements and can be reviewed in note 29 in the consolidated financial statements as of March 31, 2021.
13 Related party transactions.
The related entities and persons of Kapsch TrafficCom include, in particular, Kapsch Group companies, including their subsidiaries, joint ventures and associated companies, their executive bodies (Executive Board and Supervisory Board, if present) as well as close members of the bodies' families and companies over which they have control or significant influence.
The direct parent company of the reporting entity is KAPSCH-Group Beteiligungs GmbH, Vienna. This company is a 100%-subsidiary of DATAX HandelsgmbH, Vienna, which is the controlling entity of Kapsch TrafficCom AG and the ultimate parent of Kapsch Group. Subsidiaries of KAPSCH Group are referred to as affiliated companies if they are not part of the Kapsch TrafficCom Group. Kapsch BusinessCom Group was still presented as an affiliated company in the first half of 2021/22, but left KAPSCH Group in October 2021.
The following tables provide an overview of revenues and expenses as well as receivables and liabilities for related parties.
| H1 2021/22 | H1 2022/23 | |
|---|---|---|
| Parent company | ||
| Revenues | 0 | 30 |
| Expenses | -564 | -39 |
| Income (+) / Expense (-) from tax allocation | 581 | 0 |
| Affiliated companies | ||
| Revenues | 342 | 69 |
| Expenses | -5,691 | -2,970 |
| Associated companies | ||
| Revenues | 0 | 0 |
| Expenses | 0 | 0 |
| Joint ventures | ||
| Revenues | 82 | 76 |
| Expenses | -2,081 | -1,554 |
| Other related parties | ||
| Revenues | 0 | 0 |
| Expenses | -3,414 | -28 |
| March 31, 2022 | Sept. 30, 2022 | |
| Parent company | ||
| Trade receivables and other assets | 42 | 36 |
| Trade payables and other payables (-) | -310 | -349 |
| Affiliated companies | ||
| Trade receivables and other non-current and current assets | 88 | 36 |
| Trade payables and other payables (-) | -3,518 | -6,185 |
| Associated companies | ||
| Trade receivables and other non-current and current assets | 875 | 1,505 |
| Trade payables and other payables (-) | 0 | 0 |
| Joint ventures | ||
| Trade receivables and other non-current and current assets | 9,317 | 10,403 |
| Trade payables and other payables (-) | -558 | -1,477 |
| Other related parties | ||
| Trade receivables and other non-current and current assets | 0 | 7 |
| Trade payables and other payables including pension benefits (-) | -10,482 | -9,500 |
Trade receivables and other non-current and current assets with joint ventures relate mainly to a loan to autoTicket GmbH, Germany.
Individual members of the Kapsch TrafficCom AG Executive and Supervisory Boards have management positions or are Supervisory Board members for the KAPSCH Group and/or its subsidiaries. Please refer to the consolidated Corporate Governance Report 2021/22 in this regard. Additionally, as of October 7, 2021, Andreas Hämmerle, Kapsch Traffic Com's CFO, assumed the role of managing director of KAPSCH-Group Beteiligungs GmbH.
A comprehensive presentation of the relationships with related parties is shown in note 32 of the consolidated financial statements 2021/22.
14 Risk and capital management.
The financial risks to which Kapsch TrafficCom is exposed are described in the consolidated financial statements for the year ended March 31, 2022 (note 33) as well as the management report on the first half of 2022/23.
15 New and amended standards and interpretations.
| New/amended IFRS | Published by the IASB and adopted by the EU |
Applicable to financial years beginning on or after |
Material impact on Group's consolidated financial statement |
|
|---|---|---|---|---|
| IAS 16 | Proceeds before Intended Use | May 2020 | January 1, 2022 | None |
| IFRS 3 | References to the Conceptual Framework | May 2020 | January 1, 2022 | None |
| IAS 37 | Onerous Contracts – Cost of Fulfilling a Contract |
May 2020 | January 1, 2022 | None |
| AIP 2018- 2020 |
Annual Improvements to IFRS Standards 2018-2020 Cycle |
May 2020 | January 1, 2022 | None |
The application of new and amended standards and interpretations does not cause a material change in the condensed interim financial information.
16 Significant events occurring after September 30, 2022.
There were no significant events after September 30, 2022.
Vienna, November 15, 2022
The Executive Board
Georg Kapsch Chief Executive Officer
Andreas Hämmerle Executive Board Member
Alfredo Escribá Gallego Executive Board Member
Financial calendar.
| February 22, 2023 | Results Q1–Q3 2022/23 |
|---|---|
| June 14, 2023 | Results FY 2022/23 |
| August 17, 2023 | Results Q1 2023/24 |
| August 27, 2023 | Record date: Annual General Meeting |
| September 6, 2023 | Annual General Meeting |
| November 15, 2023 | Results H1 2023/24 |
| February 21, 2024 | Results Q1–Q3 2023/24 |
Contact for investors.
| Investor Relations team | Marcus Handl, Valerie Riegler |
|---|---|
| Shareholders' telephone line | +43 50 811 1122 |
| [email protected] | |
| Website | www.kapsch.net |
Disclaimer.
Certain statements in this report are forward-looking statements. They contain the words "believe," "intend," "expect," "plan," "assume," and terms of a similar meaning. Forward-looking statements reflect the beliefs and expectations of the company. Actual events can deviate significantly from the expected developments, due to a range of factors. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. Kapsch TrafficCom AG disclaims any obligation to update forward-looking statements made herein.
This report was created with care and all data has been checked conscientiously. Nevertheless, the possibility of layout and printing errors cannot be excluded. The English translation is for convenience; only the German version is authentic.
When referring to people, the authors strive to use both the male and female forms as far as possible (for example: he or she). For readability reasons, occasionally only the masculine form is used. However, it always refers to people of all gender categories.
This report does not constitute a recommendation or invitation to purchase or sell securities of Kapsch TrafficCom.
Imprint.
Media owner and publisher: Kapsch TrafficCom AG Place of publishing: Vienna, Austria Editorial deadline: November 15, 2022
Kapsch TrafficCom
Kapsch TrafficCom is a globally renowned provider of transportation solutions for sustainable mobility with successful projects in more than 50 countries. Innovative solutions in the application fields of tolling, tolling services, traffic management and demand management contribute to a healthy world without congestion.
With one-stop-shop solutions, the company covers the entire value chain of customers, from components to design and implementation to the operation of systems.
Kapsch TrafficCom, headquartered in Vienna, has subsidiaries and branches in more than 25 countries and is listed in the Prime Market segment of the Vienna Stock Exchange (ticker symbol: KTCG). In its 2021/22 financial year, 4,220 employees generated revenues of about EUR 520 million.