Quarterly Report • May 12, 2017
Quarterly Report
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Interim Report as of March 31, 2017 (unaudited)
| The Market for Production | |
|---|---|
| Machines for Solar Cells | 03 |
| Optical Disc Segment | 05 |
| Semiconductor Segment | 05 |
| Order Intake and Order Backlog |
06 |
| Sales and Earnings | 06 |
| Balance Sheet and Liquidity | 07 |
| Shareholders' Equity | 07 |
| Cash Flow | 07 |
| Risk Report | 08 |
| Development of costs and prices |
08 |
| Research and Development | 08 |
| Employees | 08 |
| Stock | 08 |
| Corporate bond | 08 |
| Outlook for the Business Year 2017 |
09 |
| Balance Sheet | 10 |
|---|---|
| Income Statement | 12 |
| Statement of Comprehensive Income |
13 |
| Statement of Changes in Equity |
13 |
| Statement of Cash Flows | 14 |
| Annotations to the | |
| Interim Report | 16 |
| Affirmation of the | |
| Legal Representatives | 19 |
Sales within the SINGULUS TECHNOLOGIES Group (SINGULUS TECHNOLOGIES) amounted to € 26.1 million in the 1st quarter of 2017 and were thus significantly higher than the prior-year level of € 14.1 million. The operating result before interest and taxes (EBIT) of € 1.4 million was positive following a loss of € - 5.8 million in the same period one year ago. In this line, the EBITDA
of € 1.9 million also improved compared with a prior-year loss in the amount of € -5.2 million.
The high order backlog of € 92.9 million (March 31, 2016: € 22.9 million) mainly includes the delivery of machines for the production of CIGS solar modules for a subsidiary of the Chinese state-owned enterprise China National Building Materials (CNBM).
At the beginning of 2017, SINGULUS TECHNOLOGIES was able to sign a contract with another customer for the delivery of CIGS production equipment with a volume of more than € 20 million. Here, the company expects the first prepayment in due course.
Excluding this delivery contract the order intake in the quarter under review thus only came to € 9.1 million (previous year: € 10.4 million).
With an improved course of business activities the profit margin was increased substantially. In the first three months of the business year 2017, a gross margin in the amount of 30.1 % (previous year: 16.5 %) was achieved.
The headcount within the SINGULUS TECHNOLOGIES Group remained at a constant level of 315 employees as of March 31, 2017 (December 31, 2016: 318 employees).
In the coming years, SINGULUS TECHNOLOGIES will focus on the specialized markets for thinfilm based solar modules (i.e. CIGS) and the new crystalline, high-performance solar cells (i.e. heterojunction solar cells PERC, PERT).
According to research by Solar-Power Europe, Brussels, China, Japan, the US as well as India will remain the largest national markets.
Other countries in Asia, South America and also Africa will contribute to this growth trend. On part of the Chinese government and large Chinese state-owned enterprises, substantial expansion plans for production capacities were published in the past couple of months, which are referring to CIGS-based thin-film modules. SINGULUS TECHNOLOGIES' customer CNBM alone intends to increase its production capacity for CIGS solar modules to 3,000 MW in the medium-term according to its own statements. But also other regions, such as in Africa and countries in the Middle East, announced expansion plans for production sites for thin-film solar modules.
SINGULUS TECHNOLOGIES' core competence: CISARIS selenization furnace for CIGS solar modules
The development in the market for crystalline solar cells moves towards high-performance cells based on technologies such as heterojunction and PERC. With its wet-chemical processing machines and the new developments in the area of vacuum coating, SINGULUS TECHNOLOGIES intends to benefit from this growth.
At the world's largest solar trade fair SNEC 2017, Shanghai, China, SINGULUS TECHNOLOGIES presented its new machines for its delivery program for CIGS production machines as well as heterojunction technology, amongst others.
The interest on part of the customers for the newly presented production machines was high. For the market of machines for the production of heterojunction solar cells SINGULUS TECHNOLOGIES presented a new vacuum coating machine (cathode sputtering and sputtering machine) in Shanghai under the brand name GENERIS PVD. The new machine concept is based on an inline machine, which is able to vacuum coat up to 5,200 solar wafers per hour. With its flexibility and performance, the modularly built machine is directly targeting the requirements of the solar industry. For wet-chemical
applications, SINGULUS TECHNOLOGIES has introduced the new inline processing machine LINEX for the cleaning and texturing of wafers. With its newly developed transport system, the machine guarantees a particularly careful treatment of solar wafers during the cleaning process.
In the past couple of years, SINGULUS TECHNOLOGIES focused on considerable resources on the development and the market launch of new production technologies for the manufacturing of new cell concepts for crystalline and thin-film solar technologies and pursues a focused growth strategy.
SINGULUS TECHNOLOGIES' core competence: GENERIS PVD vacuum coating system for Heterojunction solar cells
SINGULUS TECHNOLOGIES expects that in the future in addition to replacement and expansion investments for CD, DVD and Blu-ray lines, there will only be investments in production machines of the BLULINE III type for Ultra HD Blu-ray Discs. Overall, the market for BLULINE III will remain a niche market from SINGULUS TECHNOLOGIES' perspective. Therefore, we only expect a low level of order intake for production machines in this segment.
With its machine families of TIMARIS and ROTARIS next to MRAM applications, SINGULUS TECHNOLOGIES still focuses on new potential applications of vacuum coating technologies such as in the area of sensory technologies and integrated high-voltage control.
Currently, there is a rapid technologic progress in the area of flexible and portable consumer electronics. Flexible magnetic storage solutions form an integral part of the flexible
and portable electronic consumer devices for storing and processing data. Accordingly, from SINGULUS TECHNOLOGIES' view the further development and importance of MRAM as a potential storage technology of the future is still uncertain.
The company is currently in serious project talks with international semiconductor manufacturers, so that order intake could result in the coming months.
SINGULUS TECHNOLOGIES' core competence: LINEX wet-chemical process system for high performance solar cells
Sales in the 1st quarter came to € 9.1 million (previous year: € 10.4 million). At the beginning of 2017, SINGULUS TECHNOLOGIES was able to sign a contract with another customer for the delivery of CIGS production equipment with a volume of more than € 20 million. Here, the company expects the first prepayment in due course. Accordingly, the delivery contract will be booked as order intake after the receipt of the prepayment.
The order backlog amounted to € 92.9 million as of March 31, 2017 (previous year: € 22.9 million).
Sales of € 26.1 million in the 1st quarter 2017 were significantly higher than the € 14.1 million achieved in the previous year. This increase is mainly due to higher sales in connection with the finishing of the major order for CIGS thin-film solar modules. Sales are split into € 20.8 million in the Solar segment (previous year: € 8.2 million), Optical Disc at € 4.3 million (previous year: 4.9 million) and Semiconductors at € 1.0 million (previous year: € 1.0 million).
The regional percentage breakdown of sales in the 1st quarter 2017 was as follows:
In the first three months of the business year 2017 a gross margin in the amount of 30.1 % (previous year: 16.5 %) was achieved. With the improved course of business activities the profit margin was increased substantially. The gross profit from sales amounted to € 7.8 million in the quarter under review (previous year: € 2.3 million).
| Segment Reporting from January 1 to March 31, |
Segment Solar | Segment Optical Disc | Segment Semiconductor |
SINGULUS TECHNOLOGIES Group |
||||
|---|---|---|---|---|---|---|---|---|
| 2017 and 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 |
| million € | million € | million € | million € | million € | million € | million € | million € | |
| Sales (gross) | 20.8 | 8.2 | 4.3 | 4.9 | 1.0 | 1.0 | 26.1 | 14.1 |
| Sales deduction and individual selling expenses | 0.0 | 0.0 | -0.2 | -0.2 | 0.0 | 0.0 | -0.2 | -0.2 |
| Sales (net) | 20.8 | 8.2 | 4.0 | 4.7 | 1.0 | 1.0 | 25.9 | 13.9 |
| Result of restructuring | 0.0 | -0.7 | 0.0 | -0.4 | 0.0 | -0.1 | 0.0 | -1.2 |
| Write-offs and amortization | -0.4 | -0.5 | -0.1 | -0.1 | 0.0 | 0.0 | -0.5 | -0.6 |
| Operating result (EBIT) | 1.7 | -4.5 | 0.0 | -1.4 | -0.3 | 0.1 | 1.4 | -5.8 |
| Financial result | -0.5 | -1.3 | ||||||
| Earnings before taxes | 0.9 | -7.1 |
The total of the operating expenses amounted to € 6.4 million during the period under review (previous year: € 8.1 million). The earnings from restructurings of the previous year included extraordinary expenses in the amount of € 1.2 million. These expenses mainly included legal and consulting expenses as well as the expenses for the bondholders' meeting and the extraordinary general meeting in the course of the restructuring of the corporate bond. Adjusted for these effects € 0.5 million lower operating expenses resulted compared with the prior year (€ 6.9 million).
Overall, in the first quarter 2017 earnings before interest and taxes (EBIT) in the amount of € 1.4 million around the prior-year level were realized (previous year: € -5.8 million).
Current assets declined by € 8.3 million to € 71.8 million during the period under review. The main reason is the decline in restricted funds by € 6.3 million to € 14.7 million. This includes financial assets, which mainly serve as guarantees for pledges for prepayments received.
Furthermore, the accounts receivables decreased by € 3.2 million to € 4.6 million. In contrast, receivables from production orders increased by € 2.0 million to € 4.2 million.
The long-term assets amounted to € 16.2 million as of March 31, 2017, around the level of the prior period (December 31, 2016: € 16.1 million).
Compared with the year-end 2016 the short-term debt declined by € 8.7 million and amounted to € 45.4 million as of March 31, 2017. In this context the liabilities from production orders declined by € 16.3 million to € 14.1 million due to higher production activities in connection with the finishing of our major order for CIGS thin-film solar modules. Due to the raising of a senior-ranked, secured loan with a nominal volume of € 4.0 million in March 2017 liabilities in the amount of € 3.8 million were incurred from the issuance of the loan during the quarter under review. Furthermore, accounts payable rose by € 3.7 million to € 13.8 million due to higher production activities.
The long-term assets amounted to € 29.8 million as of March 31, 2017, similar to the level of the prior period (December 31, 2016: € 30.0 million).
Due to the positive net result the shareholders' equity in the Group increased by € 0.7 million in the quarter under review and stood at € 12.8 million as of March 31, 2017 (December 31, 2016: € 12.1 million). Equity in the amount of € 12.1 million is attributable to the shareholders of the parent company and € 0.7 million to minorities.
In the 1st quarter of 2017 the operating cash flow of the Group of € -8.4 million was slightly below the previous year's level of € -7.0 million. The cash flow from investing activities came to € -0.6 million (previous year: € -0.2 million). The cash flow from financing activities amounted to € 9.9 million in the period under review (previous year: € 1.1 million) and resulted primarily from the change of restricted financial funds (€ 6.3 million) as well as the borrowing from a senior-ranked, secured loan (€ 3.8 million). Overall, the amount of cash and cash equivalents increased by 0.9 million in the 1st quarter of 2017.
Amongst the depicted financial risks described in the combined status report in the annual report for the year 2016 under the chapters "Risk Report" and "Outlook for the Business Years 2017 and 2018" are the transfer of cover of guarantee pledges to reduce the cash collateral as well as the receipt of further prepayments in connection with the major order from CNBM. Up to now, neither a transfer of cover of the guarantee pledges nor an additional prepayment from the customers has been received. For this reason we still rate the liquidity risk unchanged with a relevance score of 5. However, the probability of occurrence is no longer assessed as being low as at the end of the business year 2016, but as medium in the meantime.
In the course of the first three months of the business year 2017, there were no additional changes of the relevance of the risks depicted in the combined status report for the year 2016 under the chapters "Risk Report" and "Outlook for the Business Years 2017 and 2018".
From our perspective the selling prices developed as planned in the 1st quarter of the business year. Material and personnel expenses also developed according to our budgets. However, the price situation in the Solar segment strongly depends on the future developments of demand in this market.
At € 2.1 million in total the expenditures for research and development in the first three months of 2017 were below the prior-year level (previous year: € 2.7 million).
The headcount within the SINGULUS TECHNOLOGIES Group remained at a constant level of 315 employees as of March 31, 2017 (December 31, 2016: 318 employees).
The share price started at € 4.74 in January 2017 and rose very sharply in the first three months. On March 31, 2017 the stock traded at € 7.24. At the print deadline on May 10, 2017 the shares traded at € 7.86, a gain of more than 50 % compared with yearend 2016.
The new bond of the SINGULUS TECHNOLOGIES AG with a nominal value of € 12 million is trading at the Open Market of Deutsche Boerse AG at the Frankfurt Stock Exchange since July 2016 under the security identification number WKN A2AA5H (ISIN DE000A2AA5H5 ticker symbol SNGB). The bond is collateralized, has a term to maturity of five years and provides for annually increasing interest payments. The initial interest amounts to 3.0 % and increases to 10.0 % p.a. subject to early repayment. Primarily cash, receivables, inventories, fixed assets and intangible assets of the SINGULUS TECHNOLOGIES AG serve as collateral for the new bond. As of the print deadline, the price of the bond stood at 93.0 % on May 10, 2017.
For the current business year SINGULUS TECHNOLOGIES forecasts a doubling of sales pursuant to IFRS compared with the previous year. The operating result (EBIT) should come in at a low single-digit million level for the Group.
In the current business year in the Solar division, sales are generated from the construction and commissioning of production machines, which are primarily based on a few major project orders. This holds particularly true for the orders for investments in production lines for thin-film solar modules on the basis of CIGS. Moreover, orders for production machines for crystalline high-performance cells (e.g. heterojunction cells) are expected.
The forecast for the annual targets for 2017 mainly rests on the assumption that the solar market will develop favorably in both the CIGS segment as well as the wet-chemical division.
Furthermore, we expect the prepayment by our customer CNBM during the first half of 2017 for the second of the two factory sites as well as the prepayment for the CIGS delivery contract signed with another customer in March 2017.
If the order intake in the business year 2017 and 2018 should fall short of expectations compared with the forecasts, this would jeopardize the continuation of the company. In addition, safeguarding the short- and mediumterm liquidity is essential for the continuation of the company. In this connection the company concluded a contract on March 10, 2017 for a "Super Senior Loan" with a nominal volume of € 4.0 million. In addition, in the short-term the reduction of the cash collateral of the guarantee pledge and the receipt of the prepayment of the customer CNBM for the second of the two factory sites is projected for the first half of 2017. If these events do not materialize as expected and alternative financing is not available to the company, the
continuation of the company would already be jeopardized in the short-term in 2017 due to the then strained liquidity situation.
On the basis of current talks with potential partners, the Executive Board currently expects that the cash collateralization for the guarantee pledge should be reduced significantly. On the basis of information from our customer CNBM the Executive Board still expects the customer to fulfill its legal obligations and therefore the Board expects the receipt of the prepayment for the second factory site in the course of the second half of 2017.
Best regards,
The Executive Board
SINGULUS TECHNOLOGIES AG
| Assets | 03/31/2017 | 12/31/2016 |
|---|---|---|
| [million €] | [million €] | |
| Cash and cash equivalents | 19.4 | 18.5 |
| Restricted cash | 14.7 | 21.0 |
| Trade receivables | 4.6 | 7.8 |
| Receivables from construction contracts | 4.2 | 2.2 |
| Other receivables and other assets | 6.5 | 8.6 |
| Total receivables and other assets | 15.3 | 18.6 |
| Raw materials, consumables and supplies | 9.0 | 7.8 |
| Work in process | 13.4 | 14.2 |
| Total inventories | 22.4 | 22.0 |
| Total current assets | 71.8 | 80.1 |
| Property, plant and equipment | 4.7 | 4.8 |
| Capitalized development costs | 3.5 | 3.3 |
| Goodwill | 6.7 | 6.7 |
| Other intangible assets | 0.2 | 0.2 |
| Deferred tax assets | 1.1 | 1.1 |
| Total non-current assets | 16.2 | 16.1 |
| Total assets | 88.0 | 96.2 |
|---|---|---|
| equity and liabilities |
03/31/2017 | 12/31/2016 | |
|---|---|---|---|
| [million €] | [million €] | ||
| Trade payables | 13.8 | 10.1 | |
| Prepayments received | 1.2 | 1.4 | |
| Liabilities from construction contracts | 14.1 | 30.4 | |
| Financing liabilities from the issuance of loans | 3.8 | 0.0 | |
| Financing liabilities from the issuance of bonds | 0.5 | 0.4 | |
| Other current liabilities | 8.8 | 8.5 | |
| Provisions for restructuring measures | 1.5 | 1.6 | |
| Other provisions | 1.7 | 1.7 | |
| Total current liabilities | 45.4 | 54.1 | |
| Financing liabilities from the issuance of bonds | 12.0 | 12.0 | |
| Provisions for restructuring measures | 4.0 | 4.2 | |
| Pension provisions | 13.8 | 13.8 | |
| Total non-current liabilities | 29.8 | 30.0 | |
| Total liabilities | 75.2 | 84.1 | |
| Subscribed capital | 8.1 | 8.1 | |
| Capital reserves | 10.4 | 10.4 | |
| Reserves | 4.0 | 4.1 | |
| Loss carryforward | -10.4 | -11.3 | |
| Equity attributable to owners of the parent | 12.1 | 11.3 | |
| Non-controlling interests | 0.7 | 0.8 | |
| Total equity | 12.8 | 12.1 | |
| Total equity and liabilities | 88.0 | 96.2 |
| 01/01 - 03/31 | ||||
|---|---|---|---|---|
| 2017 | 2016 | |||
| [million €] | [%] | [million €] | [%] | |
| Revenue (gross) | 26.1 | 100.8 | 14.1 | 101.4 |
| Sales deductions and direct selling costs | -0.2 | -0.8 | -0.2 | -1.4 |
| Revenue (net) | 25.9 | 100.0 | 13.9 | 100.0 |
| Cost of sales | -18.1 | -69.9 | -11.6 | -83.5 |
| Gross profit on sales | 7.8 | 30.1 | 2.3 | 16.5 |
| Research and development | -1.3 | -5.0 | -1.9 | -13.7 |
| Sales and customer service | -2.9 | -11.2 | -2.8 | -20.1 |
| General administration | -2.3 | -8.9 | -2.3 | -16.5 |
| Other operating expenses | -0.3 | -1.2 | -0.3 | -2.2 |
| Other operating income | 0.4 | 1.5 | 0.4 | 2.9 |
| Result of restructuring expenses | 0.0 | 0.0 | -1.2 | -8.6 |
| Total operating expenses | -6.4 | -24.7 | -8.1 | -58.3 |
| Operating result (EBIT) | 1.4 | 5.4 | -5.8 | -41.7 |
| Finance income | 0.0 | 0.0 | 0.1 | 0.7 |
| Finance costs | -0.5 | -1.9 | -1.4 | -10.1 |
| EBT | 0.9 | 3.5 | -7.1 | -51.1 |
| Tax income | 0.0 | 0.0 | 0.0 | 0.0 |
| Profit or loss for the period | 0.9 | 3.5 | -7.1 | -51.1 |
| Thereof attributable to: | ||||
| Owners of the parent | 0.9 | -7.1 | ||
| Non-controlling interests | 0.0 | 0.0 | ||
| [€] | [€] | |||
| Basic earnings per share based on the profit for the period (in EUR) attributable to owners of the parent |
0.11 | -23.22 | ||
| Diluted earnings per share based on the profit for the period (in EUR) attributable to owners of the parent |
0.11 | -23.22 | ||
| Basic number of shares, pieces | 8,087,752 | 305,814 | ||
| Diluted number of shares, pieces | 8,087,752 | 305,814 |
| 01/01 - 03/31 | ||||
|---|---|---|---|---|
| 2017 | 2016 | |||
| [million €] | [million €] | |||
| Profit or loss for the period | 0.9 | -7.1 | ||
| Items that may be reclassified to profit and loss: |
||||
| Derivative financial instruments | 0.0 | 0.4 | ||
| Exchange differences in the fiscal year | -0.2 | -0.4 | ||
| Total income and expense recognized directly in other comprehensive income |
-0.2 | 0.0 | ||
| Total comprehensive income | 0.7 | -7.1 | ||
| Thereof attributable to: | ||||
| Owners of the parent | 0.8 | -7.1 | ||
| Non-controlling interests | -0.1 | 0.0 |
as of March 31, 2017 and 2016
| Equity attributable to owners | Non controlling interests |
Equity | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Subscribed capital |
Capital reserves |
Reserves | Loss carryforward | Total | |||||
| [million €] | [million €] | Currency translation reserves [million €] |
Hedge accounting reserves [million €] |
Actuarial gains and losses from pension commitments [million €] |
Other revenue reserves [million €] |
[million €] | [million €] | [million €] | |
| As of January 1, 2016 | 48.9 | 2.1 | 4.0 | 0.0 | -4.2 | -73.2 | -22.4 | 0.9 | -21.5 |
| Profit or loss for the period | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -7.1 | -7.1 | 0.0 | -7.1 |
| Other comprehensive income | 0.0 | 0.0 | -0.4 | 0.4 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total comprehensive income | 0.0 | 0.0 | -0.4 | 0.4 | 0.0 | -7.1 | -7.1 | 0.0 | -7.1 |
| As of March 31, 2016 | 48.9 | 2.1 | 3.6 | 0.4 | -4.2 | -80.3 | -29.5 | 0.9 | -28.6 |
| As of January 1, 2017 | 8.1 | 10.4 | 4.1 | 0.0 | -5.7 | -5.6 | 11.3 | 0.8 | 12.1 |
| Profit or loss for the period | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.9 | 0.9 | 0.0 | 0.9 |
| Other comprehensive income | 0.0 | 0.0 | -0.1 | 0.0 | 0.0 | 0.0 | -0.1 | -0.1 | -0.2 |
| Total comprehensive income | 0.0 | 0.0 | -0.1 | 0.0 | 0.0 | 0.9 | 0.8 | -0.1 | 0.7 |
| As of March 31, 2017 | 8.1 | 10.4 | 4.0 | 0.0 | -5.7 | -4.7 | 12.1 | 0.7 | 12.8 |
| 01/01 - 03/31 | |||
|---|---|---|---|
| 2017 | 2016 | ||
| [million €] | [million €] | ||
| Cash flows from operating activities | |||
| Profit or loss for the period | 0.9 | -7.1 | |
| Adjustment to reconcile profit or loss for the period to net cash flow | |||
| Amortization, depreciation and impairment of non-current assets | 0.5 | 0.6 | |
| Other non-cash expenses/income | 0.2 | 0.6 | |
| Net finance costs | 0.5 | 1.3 | |
| Net tax expense | 0.0 | 0.0 | |
| Change in trade receivables | 3.0 | -0.6 | |
| Change in construction contracts | -18.2 | -0.3 | |
| Change in other receivables and other assets | 1.9 | 2.2 | |
| Change in inventories | -0.3 | 0.9 | |
| Change in trade payables | 3.6 | -4.1 | |
| Change in other liabilities | 0.1 | 0.0 | |
| Change in prepayments | -0.2 | 1.1 | |
| Change in provisions from restructuring measures | -0.2 | -1.4 | |
| Change in further provisions | -0.1 | -0.1 | |
| Interest paid | -0.1 | -0.1 | |
| Interest received | 0.0 | 0.1 | |
| Income tax paid | 0.0 | -0.1 | |
| -9.3 | 0.1 | ||
| Net cash from/used in operating activities | -8.4 | -7.0 |
| 01/01 - 03/31 | |||
|---|---|---|---|
| 2017 | 2016 | ||
| [million €] | [million €] | ||
| Cash flows from investing activities | |||
| Cash paid for investments in development projects | -0.5 | -0.1 | |
| Cash paid for investments in other intangible assets and property, plant and equipment |
-0.1 | -0.1 | |
| Net cash from/used in investing activities | -0.6 | -0.2 | |
| Cash flows from financing activities | |||
| Bond interest payments | -0.2 | 0.0 | |
| Cash received/used on the issuance of loans | 3.8 | 0.0 | |
| Cash received/used on financial assets subject to restrictions on disposal | 6.3 | 1.1 | |
| Net cash from/used in financing activities | 9.9 | 1.1 | |
| Cash and cash equivalents at the beginning of the reporting period | 0.9 | -6.1 | |
| Effect of exchange rate changes | 0.0 | -0.1 | |
| Cash and cash equivalents at the beginning of the reporting period | 18.5 | 19.0 | |
| Cash and cash equivalents at the end of the reporting period | 19.4 | 12.8 |
The SINGULUS TECHNOLOGIES Aktiengesellschaft (hereinafter also "SINGULUS" or the "Company") is an exchange-listed stock corporation domiciled in Germany. The consolidated financial accounts presented for the interim reporting of the SINGULUS TECHNOLOGIES AG and its subsidiaries (the "Group") for the first three months of the business year 2017 were approved for publication by decision of the Executive Board as of May 11, 2017.
The consolidated financial accounts were drawn up in Euro (€). If not stated otherwise, all figures are in millions of Euro (million €). Due to statements in million € differences in rounding may occur.
The preparation of the abbreviated consolidated interim results for the period from January 1 to March 31, 2017 was made pursuant to IAS 34 "Interim Financial Reporting". The abbreviated consolidated interim results do not include all of the notes and information required for the reporting for the full business year and should be read in conjunction with the consolidated financial accounts as of December 31, 2016. The interim financial accounts were neither audited nor reviewed by auditors.
The preparation of the interim results pursuant to IAS 34 requires estimates and assumptions by the management, affecting the level of the reported assets, liabilities, income, expenses as well as contingent liabilities. These assumptions and estimates mainly affect the Groupconsistent determination of useful life expectancy,
the write-offs of assets, the valuation of provisions, the recoverability of receivables, the determination of realizable terminal values in the area of inventories as well as the realizability of future tax relieves. The actual values can differ from the assumptions and estimates made on a case by case basis. Changes are recognized affecting earnings at the time of the knowledge gained. The accounting and valuation methods applied in the consolidated accounts for the interim reporting correspond to those applied for the most recent consolidated financial report as of the end of the business year 2016. For a detailed description of the accounting principles please refer to the notes of the consolidated financial statements of our Annual Report 2016.
"The interim report is drawn up under the going-concern assumption. The SINGULUS TECHNOLOGIES AG is convinced that it will be successful in meeting all of its due payment liabilities within the next twelve months. The SINGULUS TECHNOLOGIES AG assumes with a high probability that in particular the payments from the delivery contracts of the major order will be made as planned. For further information, please refer to the "Risk Report" of this interim report."
In addition to the SINGULUS TECHNOLOGIES AG, the consolidated financial statements include all companies, which are legally or factually controlled by the company. In the interim report as of March 31, 2017, in addition to the SINGULUS TECHNOLOGIES AG in total two domestic and twelve foreign subsidiaries were included. No companies have been added or excluded from the scope of consolidation in the period under review.
The accounts receivable and production receivables as of March 31, 2017 are split as follows:
| March 31, 2017 | Dec. 31, 2016 | |
|---|---|---|
| in million € | in million € | |
| Accounts receivable - short-term | 6.0 | 9.3 |
| Receivables from production orders | 4.2 | 2.2 |
| Less write-offs | -1.4 | -1.5 |
| 8.8 | 10.0 |
| Geographic information as |
Germany | Rest of Europe |
North and South America |
Asia | Africa and Australia |
|---|---|---|---|---|---|
| of March 2017 | in million € | in million € | in million € | in million € | in million € |
| Sales by country of origin |
23.4 | 0.2 | 2.2 | 0.3 | 0.0 |
| by country of destination |
1.7 | 1.8 | 3.3 | 19.2 | 0.1 |
| Geographic | Germany | Rest of Europe |
North and South America |
Asia | Africa and Australia |
| information as of March 2016 |
in million € | in million € | in million € | in million € | in million € |
| Sales by country of origin |
10.2 | 0.1 | 3.0 | 0.8 | 0.0 |
Capitalized development expenses, goodwill, customer bases as well as concessions, intellectual property rights and other intangibles are included under intangible assets. As of March 31, 2017, the capitalized development expenses amounted to € 3.5 million (December 31, 2016: € 3.3 million). In the first three months of 2017, the investments in developments for our products totaled € 0.5 million (previous year: € 0.1 million).
In the first three months of the business year 2017, € 0.1 million were invested in property, plant & equipment (previous year: € 0.1 million). During the same period scheduled depreciation amounted to € 0.2 million (previous year: € 0.2 million).
At the end of the quarter under review the contingent liabilities and other financial obligations not included in the consolidated accounts amount to € 14.1 million (December 31, 2016: € 13.4 million) and mainly include rent and leasing obligations (€ 13.0 million). The Executive Board does not have knowledge about facts that could have a materially adverse impact on the business operations, the financial situation or the business results of the company.
The sales reductions include cash discounts granted. The individual selling expenses are mainly composed of expenses for packaging, freight and commissions.
The administrative expenses include the expenses for the management, personnel expenses, the finance and accounting departments as well as the corresponding expenses for rent and company cars. Furthermore, they include the ongoing IT expenses, legal and consulting fees, expenses for investor relations activities, the ordinary Annual General Meeting as well as the annual financial statements.
In addition to the research and non-capitalizable development expenses, the research and development expenses in the 1st quarter of 2017 also include the scheduled amortization of capitalized development expenses in the amount of € 0.3 million (previous year: € 0.3 million).
In the prior-year period these expenses mainly included legal and consulting expenses as well as the expenses for the bondholders' meeting and the extraordinary general meeting in the course of the restructuring of the corporate bond.
The following table displays the book values and the corresponding time values of all financial instruments included in the consolidated financial statement by class.
| Book value | Attributable time value | ||||
|---|---|---|---|---|---|
| Valuation | March 31, 2017 | Dec. 31, 2016 | March 31, 2017 | Dec. 31, 2016 | |
| category | in million € | in million € | in million € | in million € | |
| Financial assets | |||||
| Cash and cash equivalents ** | L&R | 19.4 | 18.5 | 19.4 | 18.5 |
| Restricted financial assets ** | L&R | 14.7 | 21.0 | 14.7 | 21.0 |
| Accounts receivable ** | L&R | 4.6 | 7.8 | 4.6 | 7.8 |
| Receivables from production orders ** | L&R | 4.2 | 2.2 | 4.2 | 2.2 |
| Financial liabilities | |||||
| Financing liabilities from the issuance of bonds * | FLAC | 12.5 | 12.4 | 11.1 | 9.6 |
| Liabilities from the issuance of loans ** | FLAC | 3.8 | - | 3.8 | - |
| Accounts payable ** | FLAC | 13.8 | 10.1 | 13.8 | 10.1 |
| Total | L&R | 42.9 | 49.5 | 42.9 | 49.5 |
| Total | FLAC | 30.1 | 22.5 | 28.7 | 19.7 |
* The valuation at attributable time value was accounted for as Level 1 attributable time value, based on the input factors of the applied valuation procedures.
** The valuations at attributable time value were accounted for as Level 2 attributable time value, based on the input factors of the applied valuation procedures.
L&R: Loans and Receivables
Cash and cash equivalents as well as accounts payable regularly have a short term to maturity. The balance sheet values are approximately the attributable time values. The same holds true for short-term accounts receivables and other assets. The attributable time values of long-term accounts receivable correspond to the present values corresponding to the payments of the assets subject to the relevant interest rate parameters.
As a valuation price for the foreign exchange forwards concluded, for cash rates the ECB reference prices and for forward rates the relevant forward rate prices of the relevant commercial banks are used. The attributable time value of the exchange-listed bonds corresponds to the exchange price at the balance sheet date plus the book value of the accrued interest liabilities as of the balance sheet date. The maximum credit risk is reflected by the book values of the financial assets and liabilities.
The Group applies the following hierarchy for the calculation and reporting of the corresponding time values of financial instruments as per valuation method:
Level 1: listed (unadjusted) prices on active markets for similar assets or liabilities,
Level 2: methods, in which all input parameters which have a material impact on the calculated attributable time value, can be observed directly or indirectly,
Level 3: methods, which use input parameters, which have a material impact on the calculated attributable time value and which are not based on observable market data.
The interest income/ expenses are composed as follows:
| March 31, 2017 in million € |
March 31, 2016 in million € |
|
|---|---|---|
| Interest income from long-term customer claims |
0.0 | 0.1 |
| Financing expenses from issuance of bond | -0.3 | -1.2 |
| Interest expenses from the discounting of pension provisions |
-0.1 | 0.0 |
| Other financing expenses | -0.1 | -0.2 |
| -0.5 | -1.3 |
For the calculation of the undiluted earnings per share, the earnings attributable to the bearers of the common shares of the parent company are divided by the weighted average number of shares in circulation during the period under review.
For the calculation of the diluted earnings per share, the earnings attributable to the bearers of the common shares of the parent company are divided by the weighted average number of common shares in circulation during the period under review in addition to the weighted average number of shares resulting from the conversion of all potential common shares with dilution effect into common shares. Dilution effects were neither recorded in the quarter under review nor in the same period one year ago. In the period from the balance sheet date until the drawing up of the consolidated financial statements there were no transactions of common shares or potential common shares.
In March 2017, the company has taken a loan in the amount of € 4.0 million from a shareholder and bondholder. The loan is in context of the bond provisions Art. 8 (a) (iv) in connection with Art. 3 (e). Accordingly, the company is able to enter financial liabilities in form of a loan of up to € 4.0 million. In this context, the bond collateral is also used for securing the loan. This is senior ranking compared with the bondholders. The maturity of the loan is one year; the effective interest rate is 9.23 % per year.
There were no events with material impact after the completion of the quarter under review.
As of the balance sheet date, the members of the Executive and Supervisory Boards of the SINGULUS TECHNOLOGIES AG held the following number of shares, convertible bonds and stock options: The Chairman of the Supervisory Board, Dr.-Ing. Leichnitz, held 245 shares of the company in total as of March 31, 2017.
Furthermore, at the end of the quarter under review members of the Executive Board had themselves purchased the following number of shares of the SINGULUS TECHNOLOGIES AG:
| March 31, 2017 | |
|---|---|
| shares | |
| Dr.-Ing. Stefan Rinck, CEO | 122 |
| Markus Ehret, CFO | 43 |
| 165 |
"We assert to our best knowledge and belief that pursuant to the applicable accounting principles for the interim financial reporting the consolidated financial statements reflect the true situation of the asset, financial and earnings situation of the Group. The consolidated interim status report depicts the course of business including the financial results and the situation of the Group in a way reflecting the true situation and describing the material opportunities and risks of the foreseeable developments of the Group during the remainder of the business year."
Kahl am Main, in May 2017
The Executive Board
Consolidated Key Figures for the 1st Quarter
| 2015 | 2016 | 2017 | ||
|---|---|---|---|---|
| Revenue (gross) | million € | 12.6 | 14.1 | 26.1 |
| Order intake | million € | 62.8 | 10.4 | 9.1 |
| Order backlog (03/31) | million € | 64.2 | 22.9 | 92.9 |
| EBIT | million € | -5.9 | -5.8 | 1.4 |
| EBITDA | million € | -5.0 | -5.2 | 1.9 |
| Earnings before taxes | million € | -7.0 | -7.1 | 0.9 |
| Profit/loss for the period | million € | -6.9 | -7.1 | 0.9 |
| Operating cash flow | million € | 5.7 | -7.0 | -8.4 |
| Shareholders' equity | million € | 13.5 | -28.6 | 12.8 |
| Balance sheet total | million € | 133.7 | 82.2 | 88.0 |
| Research & development expenditures |
million € | 2.6 | 2.7 | 2.1 |
| Employees (03/31) | 345 | 336 | 315 | |
| Weighted number of shares, basic |
305,814 | 305,814 | 8,087,752 | |
| Earnings per share, basic |
€ | -22.56 | -23.22 | 0.11 |
| May 2017 |
May 12 | Q1/2017 Report |
|---|---|---|
| June 2017 | June 20 | Ordinary Annual Shareholders Meeting, 10:30 am, Building of the DVFA Deutsche Vereinigung für Finanzanalyse und Asset Management GmbH, Mainzer Landstraße 37, 60329 Frankfurt am Main |
| August 2017 | August 11 | Half Year Report 2017 |
| November 2017 | November 9 | Q3/2017 Report |
This report contains future-oriented statements based on the current expectations, assessments and forecasts of the Executive Board as well as on the currently available information to them. Known as well as unknown risks, uncertainties and impacts could cause the actual results, the financial situation or the development to differ from the statements made in this report. We assume no obligation to update the futureoriented statements made in this report.
Hanauer Landstrasse 103 D-63796 Kahl am Main Phone +49 6188 440-0 Fax +49 6188 440-110 Internet: www.singulus.de
Maren Schuster Phone +49 6188 440-612 Fax +49 6188 440-110 [email protected]
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