Quarterly Report • Oct 28, 2016
Quarterly Report
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January 1 – September 30, 2016
› Based on the adjusted result, the technotrans Group was thus within its forecast range for the 2016 year overall.
› Net profit after nine months showed a slight improvement: earnings per share reached € 0.71 with an average of 6.5 million shares. After stripping out nonrecurring effects, earnings per share came to € 0.80 (previous year: € 0.69).
"The dominant event in the third quarter was the takeover accomplished in August," remarked Henry Brickenkamp, Chief Executive Officer of technotrans AG. He added that with the acquisition of the majority interest in gwk Gesellschaft Wärme Kältetechnik mbH, technotrans had stepped up its activities in the area of plastics engineering. The group had also taken this opportunity to significantly strengthen its position in the market for cooling and temperature control solutions. One particular benefit of the takeover was that the group had already achieved the goal of significantly reducing its dependence on the traditional target market of the printing industry."
"But the consolidation of gwk Gesellschaft Wärme Kältetechnik mbH with effect from September 1, 2016 also means non-recurring and one-off effects from the acquisition will impact costs and profit," added Brickenkamp. After elimination of these effects the technotrans Group was however fully in line with expectations for the 2016 financial year at the nine-month mark and consequently achieved its organic growth targets."
Following dynamic growth in the print area in the first half of 2016, business outside the printing industry continued to develop especially well in the third quarter.
Consolidated revenue for the first nine months of the 2016 financial year climbed to € 103.3 million overall
› The completion of the transaction was confirmed on September 9, 2016. gwk Gesellschaft Wärme Kältetechnik mbH, Meinerzhagen, is included in the consolidated financial statements for the first time with effect from September 1, 2016. gwk's share of consolidated revenue at September 30, 2016 is € 5 million and its share of the net profit for the period amounts to € 0.3 million. The allocation of the purchase price had not yet been completed at the time of preparation of the Quarterly Communication.
(previous year: € 91.6 million, +12.7 percent). The revenue which stemmed from the aforementioned changes in consolidation totalled € 6.1 million.
The Technology segment can look back on an extremely successful third quarter of 2016 and improved further on the result already achieved in the previous quarters. After nine months, the revenue for the segment was up € 7.6 million (+12.5 percent) at € 68.7 million. The revenue total included € 3.6 million for gwk, which has been consolidated since September 1, 2016. While the revenue and orders level in the printing industry remained satisfyingly stable, there was a noticeable jump in revenue in the remaining technology markets.
The Services segment put in a successful business performance in the first nine months of 2016. Revenue came in at € 34.6 million, 13.2 percent up on the previous
The operating result (EBIT) for the first nine months of € 6.5 million was down 3.7 percent on the previous year (€ 6.8 million). The EBIT margin consequently merely reached 6.3 percent, compared with 7.4 percent in the previous year. Operating costs were above the previous year's level due to non-recurring and consolidation effects. They largely comprise costs for the acquisition and integration of the companies purchased, as well as
year (previous year: € 30.6 million). Within the segment, the increase was driven both by follow-on business in the technology markets and by pleasing revenue growth from technical documentation business. The increased scope of consolidation produced a revenue contribution amounting to € 2.5 million. Organic revenue growth for the group after this effect is stripped out rose by around 5 percent.
Compared with the previous year all segments and markets have shown a highly satisfactory revenue performance and are in line with the expectations of technotrans AG.
expenditure associated with the consolidation process. After elimination of non-recurring and consolidation effects, the operating result for the technotrans Group came to € 7.3 million. This represents an (adjusted) EBIT margin of 7.5 percent. This also includes year-on-year higher expenditure for shows in connection with the drupa (€ 0.4 million), as well as negative exchange rate effects (€ 0.2 million).
| Q1-Q3 2016 | Q1-Q3 2015 | change in % | ||
|---|---|---|---|---|
| revenue | in € mill | 103.3 | 91.6 | 12.7 |
| Technology | in € mill | 68.7 | 61.0 | 12.5 |
| Service | in € mill | 34.6 | 30.6 | 13.2 |
| operative costs | in € mill | 96.7 | 84.8 | 14.1 |
| EBIT EBIT margin |
in € mill in % |
6.5 6.3 |
6.8 7.4 |
–3.7 |
| earnings per share | in € | 0.71 | 0.69 | 2.9 |
| Q1-Q3 2016 | Q1-Q3 2015 | change in % | ||
|---|---|---|---|---|
| revenue | in € mill | 97.2 | 91.6 | 6.1 |
| Technology | in € mill | 65.0 | 61.0 | 6.6 |
| Service | in € mill | 32.1 | 30.6 | 5.1 |
| operative costs | in € mill | 89.9 | 84.8 | 5.9 |
| EBIT EBIT margin |
in € mill in % |
7.3 7.5 |
6.8 7.4 |
7.8 |
| earnings per share | in € | 0.80 | 0.69 | 15.9 |
The operating result (EBIT adjusted) for Q3/2016 delivered a rate of return in excess of 8 percent. The comparable EBIT margin to the previous year is thus in line with expectations to date for the 2016 financial year (forecast: 7.5 to 8.0 percent).
The operating result (EBIT reported) in the Technology segment of € 1.7 million was slightly down on the previous year (€ 1.8 million) at the nine-month mark. The rate of return for the segment consequently came to 2.4 percent, compared with 2.9 percent in 2015. As well as the revenue mix, the pro rata cost burdens from the acquisitions and the increased expenditure for shows significantly impacted the segment's earnings situation in the period under review.
Overall, the Services segment confirmed its healthy financial performance. After nine months, the result for the segment was € 4.8 million and was therefore slightly down on the prior-year level (previous year: € 5.0 million). This figure includes pro rata additional costs in connection with the acquisitions of Ovidius GmbH and gwk GmbH. The rate of return for the segment in the reporting period therefore came to 14.0 percent, compared with 16.4 percent in the previous year.
EBITDA (earnings before interest, taxes, depreciation and amortisation) at September 30, 2016 came to € 9.1
Net debt as recognised on the balance sheet – after netting of cash and cash equivalents with interest-bearing borrowings – changed significantly in the course of the third quarter. At September 30, 2016 net debt amounted to € 16.5 million (previous year: net liquidity € 9.2 million). The corporate acquisition in September 2016 led to an outflow of liquidity of around € 22 million. A bridging loan of € 16.8 million was raised by way of financing. This bridging loan will be rescheduled with the core banks of technotrans AG in the course of the fourth quarter of 2016. The balance of the amount paid for the acquisition was taken from cash and cash equivalents available within technotrans AG. The short-term credit lines granted (€ 13.5 million) were not used.
million, unchanged from the previous year (€ 9.1 million). Depreciation and amortisation rose to € 2.5 million (previous year: € 2.3 million). The financial result as per the end of September of € 0.2 million (interest expense) remained still largely unaffected by the new financing raised in connection with the acquisition.
Earnings per share outstanding after nine months were € 0.71 (previous year: € 0.69). The consolidated result after tax for the period under review came to € 4.6 million (previous year: € 4.5 million). The return on sales was 4.5 percent (previous year: 5.0 percent).
Bank borrowings at the end of September 2016 totalled € 29.2 million. The newly consolidated companies account for around € 5.9 million of this sum.
The cash flow (net cash from operating activities) amounted to € 4.9 million in the period under review, compared with € 7.6 million in the previous year. As expected, the cash flow from investing activities rose sharply compared to 2015 as a result of the interests acquired. The free cash flow deteriorated correspondingly to € -16.7 million (previous year: € +6.5 million).
On October 20, 2016 technotrans AG increased its shareholdings in each of the companies KLH Kältetechnik GmbH (Bad Doberan), KLH Cooling International Pte. Ltd. (Singapore) and Taicang KLH Cooling Systems Co. Ltd. (PR China) by 35 %, bringing them all up to 100 %. These companies have already been included in consolidation by technotrans AG since the 2013 financial year on the basis of its participating interests to date.
The complete takeover of the shares in the KLH companies follows the successful integration of the business into the laser cooling area, and the Taicang location moreover offers technotrans scope for the strategically important expansion of China business for the entire technotrans Group.
The economic environment for 2016 is still broadly stable. The current economic development continues to reflect our expectations for the current financial year. The Board of Management rates business outlook for the technotrans Group for the 2016 financial year as positive overall. technotrans has set itself the goal of growing faster than the market.
After adjustment for the latest acquisitions, technotrans has achieved substantial growth in revenue and profit in the current financial year compared with the previous year. After nine months, organic growth is fully in line with our expectations. Taking account of the widening of the scope of consolidation in the course of 2016 and the additional one-off costs arising in that connection, the result is a correction to expectations for the full year. Despite various global uncertainties, we reassert the expectation that we will be able to maintain the positive business development in the coming quarters, too.
As matters stand, based on the extended scope of consolidation we expect consolidated revenue for 2016 to reach the order of € 150 million and EBIT to lie within the range of € 9.5 to € 10.5 million. We had previously envisaged revenue for 2016 in the region of € 126 to € 132 million, along with EBIT of between € 9.5 and € 10.5 million. This is the basis for an EBIT margin forecast of 6.3 to 7.0 percent (previously 7.5 to 8.0 percent).
The downgraded margin is a result of the non-recurring and one-off effects on the cost side in connection with the recent acquisitions. However as matters stand we anticipate that from 2017 the EBIT margin will stabilise and progress at a higher level, once synergy effects have been realised above all in the areas of purchasing and sales.
On the financial side, credit agreements for a total volume of € 20 million will be concluded with the existing group of banks by the end of 2016. From the present perspective the Board of Management does not anticipate any significant credit expansion above and beyond that. The new external financing structure of technotrans AG will assure medium to long-term liquidity and provide potential leeway for action.
The Board of Management stands by its medium-term goals of taking revenue for the technotrans Group beyond € 200 million. The revenue growth, the economies of scale that will result from this, along with a disciplined approach to costs and higher margins from growing technology and service business, should increase the value of the company in the medium term. We will provide guidance on revenue and earnings targets for 2017 with the publication of the 2016 Annual Report on March 14, 2017.
| Δ previous year |
1/1/– 30/9/2016 |
1/1/– 30/9/2015 |
2015 | 2014 | |
|---|---|---|---|---|---|
€ 000 | €000 |
€ 000 | €000 |
||||
| Earnings | 12.7% | 103,269 | 91,600 | 122,838 | 112,371 |
| of which Technology | 12.5% | 68,668 | 61,036 | 81,457 | 73,758 |
| of which Services | 13.2% | 34,601 | 30,564 | 41,381 | 38,613 |
| EBITDA | –0.7% | 9,059 | 9,121 | 12,187 | 9,873 |
| EBITDA margin (%) | 8.8 | 10.0 | 9.9 | 8.8 | |
| EBIT | –3.7% | 6,525 | 6,779 | 8,952 | 6,830 |
| EBIT margin (%) | 6.3 | 7.4 | 7.3 | 6.1 | |
| Net profitd for the period1 | 2.8% | 4,628 | 4,503 | 6,262 | 4,381 |
| as percent of the revenue | 4.5 | 4.9 | 5.1 | 3.9 | |
| Net profit per share (€) | 2.9% | 0.71 | 0.69 | 0.96 | 0.67 |
| Balance sheet | 51.3%* | 115,057 | 78,666 | 76,043 | 74,534 |
| Equity | 3.4%* | 53,469 | 50,066 | 51,725 | 47,470 |
| Equity ratio (%) | 46.5 | 63.6 | 68.0 | 63.7 | |
| Net debt2 | 16,489 | –9,220 | –11,575 | –4,763 | |
| Free cash flow3 | –16,676 | 6,498 | 8,542 | 4,821 | |
| Employees (average) | 11.0% | 890 | 802 | 810 | 771 |
| Personnel expenses | 14.1% | 35,724 | 31,320 | 42,160 | 39,808 |
| as percent of revenue | 34.6 | 34.2 | 34.3 | 35.4 | |
| Revenue per employee | 1.6% | 116 | 114 | 152 | 146 |
| Number of shares in circulation at end of period | 6,532,750 | 6,518,621 | 6,530,588 | 6,516,434 | |
| share price max (€) | 23.70 | 18.40 | 19.90 | 9.56 | |
| share price min (€) | 15.75 | 9.21 | 9.21 | 7.41 |
*Changes compared to 31/12/2015
Net profit of the period = profit attributable to technotrans AG shareholders
1
2Net debt = financial liabilities – cash and cash equivalents
3Free cash flow = Net cash from operating activities
Our website provides a comprehensive IR service. In addition to corporate reports (online Annual Report), analyst estimates, financial presentations and information on the Annual General Meeting, you will also find our factsheet and financial communications there.
http://www.technotrans.com/en/investor-relations.html
With the German Transparency Directive Implementation Act coming into force in autumn 2015, the obligation to prepare and publish comprehensive Q1 and Q3 Consolidated Quarterly Reports was removed. technotrans – in common with many other listed companies – would like to use this opportunity to adjust its reporting and focus on key topics. In future, we will therefore publish an Interim Statement/Quarterly Communication (in German and English) instead of a Quarterly Financial Report. The Second Quarter Report/Interim Financial Report on the financial year will continue to be published in the established form.
This Quarterly Communication contains statements on the future development of the technotrans Group. These reflect the present views of the management of technotrans AG and are based on the corresponding plans, estimates and expectations. We point out that the statements are subject to certain risks and uncertainties which could mean that the actual results differ considerably from those expected. The figures and percentages contained in this communication may lead to differences due to rounding. The Quarterly Communication of technotrans AG at September 30, 2016 has been prepared in accordance with Section 51a of the stock exchange rules for the Frankfurt Stock Exchange (FSE).
| Publications | Date |
|---|---|
| Annual report 2016 | March 14, 2017 |
| Quartlery communication Q1/2017 | May 5, 2017 |
| Annual general meeting 2017 | May 12, 2017 |
Member of the technotrans group
technotrans AG Robert-Linnemann-Str. 17 48336 Sassenberg
Germany
Tel +49 (0)2583 301-1000 Fax +49 (0)2583 301-1030 [email protected] www.technotrans.com
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