Interim / Quarterly Report • Nov 4, 2015
Interim / Quarterly Report
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NINE-MONTH REPORT
| in € m* | 01/01/ - 09/30/2014 |
01/01/ - 09/30/2015 |
Changes to previous year |
07/01/ - 09/30/2014 |
07/01/ - 09/30/2015 |
Changes to previous year |
|---|---|---|---|---|---|---|
| Sales revenues | 60.7 | 66.3 | 9 % | 21.7 | 22.1 | 2 % |
| Incoming orders | 61.0 | 62.0 | 2 % | 20.1 | 20.4 | 1 % |
| Gross results | 31.1 | 32.2 | 4 % | 11.0 | 10.8 | -2 % |
| Gross profit margin | 51.2 % | 48.6 % | -3 Pp. | 50.7 % | 48.9 % | -2 Pp. |
| Full costs for research and development |
8.1 | 9.3 | 15 % | 2.6 | 3.1 | 19 % |
| Research and development ratio |
13.3 % | 14.0 % | 1 Pp. | 12.0 % | 14.0 % | 2 Pp. |
| EBITDA | 15.0 | 13.1 | -13 % | 5.5 | 4.8 | -13 % |
| EBIT | 11.0 | 9.1 | -17 % | 4.3 | 3.4 | -21 % |
| EBT | 9.8 | 8.5 | -13 % | 3.9 | 3.2 | -18 % |
| Net income | 7.4 | 6 | -19 % | 3.0 | 1.9 | -37 % |
| Weighted average number of shares |
3,228,052 | 3,199,664 | -1 % | 3,216,680 | 3,235,195 | 1 % |
| Result per share (€) | 2.30 | 1.89 | -18 % | 0.92 | 0.59 | -36 % |
| Cash flow from operating activities |
10.7 | 7.7 | -28 % | 5.3 | 5.0 | -6 % |
| Cash flow from investing activities |
-5.6 | -7.2 | 29 % | -1.9 | -2.0 | 5 % |
| Free Cash flow | 5.1 | 0.5 | -90 % | 3.4 | 3.0 | -12 % |
| in € m* | 12/31/2013 | 12/31/2014 | 09/30/15 | Changes to previous year |
|---|---|---|---|---|
| Total assets | 63.3 | 72.3 | 76.6 | 6 % |
| Long-term assets | 35.6 | 38.8 | 42.0 | 8 % |
| Equity | 32.5 | 37.3 | 44.9 | 20 % |
| Liabilities | 30.8 | 35.0 | 31.7 | -9 % |
| Equity ratio | 51.3 % | 51.6 % | 58.6 % | 7 Pp. |
| Net cash | 3.7 | 4.5 | 4.2 | -7 % |
| Working Capital | 13.7 | 17.1 | 19.5 | 14 % |
| Number of employees for the financial year (full time equivalents) |
325 | 375 | 445 | 19 % |
| Share price (XETRA) in € |
29.00 | 38.66 | 43.00 | 11 % |
| Number of shares in circulation |
3,238,184 | 3,181,136 | 3,241,363 | 2 % |
| Market capitalization | 93.9 | 123.0 | 139.4 | 13 % |
* unless otherwise stated
In the first nine months of 2015, Basler AG achieved, as planned, a pre-tax result of € 8.5 million at a pretax return rate of 13 %. Despite the turbulent economic environment, incoming orders and sales were above the previous year's figures in the same period. Reliable comparative data of European manufacturers of the machine vision and components industry will again be provided by the German Engineering Federation (Verband Deutscher Maschinen- und Anlagenbau, VDMA) at the end of the year.
Basler AG continues to make good progress towards its mid-term sales goal of € 120 million. In the course of the financial year 2015, Basler AG strengthened its position in the market for digital industrial cameras and further expanded it along the previously disclosed growth plans. The figures for the first nine months of the financial year 2015 are therefore according to plan. For the remainder of the financial year, the market situation is expected to be stable. In consideration of a seasonally weak fourth quarter, the management board confirms its guidance for 2015 and continues to expect sales revenues within a corridor of € 81 – 84 million and a pre-tax return rate of 9 – 10 %.
The group's incoming orders amounted to € 62.0 million in the first nine months (previous year: € 61.0 million, +2 %). The group's sales revenues amounted to € 66.3 million in the first nine months (previous year: € 60.7 million, +9 %). The sales growth was strongly spurred by the Asian sales markets. The positive effect of a stronger US dollar was dampened by effects resulting from currency hedges, shifts in the product mix, material devaluations, as well as an increasing price pressure on the markets with the effect of decreasing the gross profit margin to 48.6 % (previous year: 51.2 %). This trend became noticeable at the beginning of the year and is already being actively attended to. Compared to the second quarter, the 3rd quarter margin was increased by 1.2 percentage points to 48.9 %. The management aims at stabilizing the gross profit margin on a level of approximately 50 % continuing to powerfully pursue the volume strategy.
In the first nine months, the expenses for sales and marketing amounted to € 12.0 million and were thus above the previous year's figure of € 9.9 million, which was mainly due to the expansion of the sales organization for developing future growth. The general administrative costs amounted to € 8.3 million (previous year: € 7.6 million). The increase of the administrative costs is strongly affected by currency losses due to forward exchange transactions (currency hedging) in an amount of approximately € 1.0 million. This contrasts with currency gains amounting to € 1.2 million which, however, are shown as other operating income. The full costs for research and development amounted to € 9.3 million, corresponding to an increase by 15 % compared to the previous year figure of € 8.1 million. Basler AG pursues the strategy to invest approximately 15 % of sales in research and development. These expenses include the ongoing product maintenance as well as for product portfolio extension for existing and new markets.
In the first nine months of 2015, the company generated group's earnings before interest and taxes (EBIT) of € 9.1 million (previous year: € 11.0 million, -17 %). This corresponds to an EBIT-margin of 14 % (previous year: 18 %). The earnings before taxes (EBT) amounted to € 8.5 million. This result is 13 % below the EBT of € 9.8 million generated in the comparison period of the previous year.
The pre-tax return margin amounted to 13 % (previous year: 16 %) and therefore was above the corridor of 9 – 10 % predicted for fiscal year 2015 and above the planned strategic path of an EBT-margin of 10 %. Due to a seasonally weak fourth quarter, the company assumes the EBT-margin to be within the planned corridor at the end of the year.
In the reporting period, the operating cash flow amounted to € 7.7 million (previous year: € 10.7 million). It is worth mentioning with regard to operating cash flow that it was significantly affected by the payment of bonus obligations resulting from fiscal year 2014 to the management board, executives, and employees. Cash flow from investing activities increased to € -7.2 million (previous year: € -5.6 million), thus the free cash flow (calculated as operating cash flow less the cash flow from investing activities) summed up to € 0.5 million (previous year: € 5.1 million). The increased investment level is particularly due to the expansion investment in the circuit board assembly, reconstruction measures at the building, and investments in R&D. Despite the high investment level, a strongly positive free cash flow amounting to € 3.0 million was generated in the third quarter.
Already in the second quarter, the dividend in an amount of € 2.2 million was paid to the shareholders of the company whereas an income of € 3.8 million was generated due to the sale of treasury shares.
At the end of the reporting period, liquid assets amounted to € 11.9 million and were thus 7 % below the amount of € 12.8 million as at the end of fiscal year 2014.
Equity increased to € 44.9 million at the end of the reporting period (December 31, 2014: € 37.3 million, + 20 %). The net cash position, representing the sum of cash in bank less bank liabilities, amounted to € 4.2 million on the reporting date (December 31, 2014: € 4.5 million, -7 %).
With growth in sales of 9 %, Basler AG consistently continued its growth path in the first nine months of 2015.
Due to Basler AG's strategic focus on the mainstream and entry level segments of the industrial camera market, the delivered camera units again increased disproportionately compared to sales. The increases in units and sales are again mainly due to industrial cameras with Gigabit Ethernet interface (GigE vision), but the product lines with USB3.0 interfaces also grew considerably in the first nine months.
In the first nine months of the current fiscal year, incoming orders were slightly above the level of the same period of the previous year (+ 2 %). Compared to the previous year, however, major block orders were absent in the current fiscal year, as expected. Also for the remaining quarter, no extraordinarily large incoming orders are expected. Since the yearly planning does not provide for these, the company is also on target in this respect.
The product line Basler pulse, recently launched for the entry level, entered series production in the third quarter. It is regarded as a versatile camera that can be integrated in varied applications; for example in the markets for medical & life sciences, ITS, retail, and numerous microscopy applications.
Furthermore, the demand for cameras with USB3.0 interface considerably increased in the third quarter of financial year 2015. The ace models with USB3.0 interface as well as the Basler dart are particularly worth mentioning. Also the demand for the recently launched Basler lenses is steadily growing.
Also in the third quarter, the growth was driven by the Asian markets. For a better local service of the Asian markets, Basler AG benefits from the production facility in Singapore that was established last year and is now operating very smoothly.
The number of full time equivalent (FTE) employees for the Basler group on the reporting date was 446 (previous year: 385; +16 %). The regional allocation is as follows:
Basler AG concluded the first nine months of 2015 successfully in line with the forecast. We were able to take the scheduled steps for our planned growth. Given the solid results of the current fiscal year 2015, the moderate increase in incoming orders, and a seasonally weaker fourth quarter, we maintain our 2015 plans for sales of the group within a corridor of € 81 – 84 million at a pre-tax margin of 9 – 10 %. Given this background and good liquidity, we will decisively push forward with our growth strategy until the end of the year.
The Basler share opened at a price of € 53.45 in the beginning of the third quarter of 2015. Until the end of July, the share price moved horizontally. At the beginning of August, prior to the reporting date for the second quarter, the share price increased to more than € 55.00, after that the share lost ground closing the quarter at € 43.00. The average daily trade volume in the first nine months of 2015 was almost 3,253 units (previous year: 2,750 units, + 18 %). The analysts of Matelan Research, Oddo Seydler as well as of Warburg Research currently valuate the Basler share with a target path between € 46.10 and € 55.00.
The market capitalization of Basler AG amounted to € 139.4 million at the end of the third quarter of 2015 (December 31, 2014: € 123.0 million, + 13 %).
At the reporting date of September 30, 2015, the number of 258,637 own shares was in the possession of Basler AG, corresponding to 7.4 %. These were purchased at an average share price of almost € 19.00.
With the supervisory board's approval, the management board is authorized to use the own shares, obtained on the basis of the latter or previously granted authorizations, for all legally permissible purposes. In particular, the management board may divest own shares by other ways than via the stock exchange or offers to the shareholders if the divestment occurs against a cash benefit at the time of sale not substantially falling below the stock exchange price of company shares of the same class or against a non-cash benefit of any kind, specifically towards the acquisition of companies, parts thereof, company participations, receivables or other goods related to the business purpose of the corporation, at a value not deemed unreasonably low in an overall assessment (always considered less acquisition costs).
As of September 30, 2015, the management board and the supervisory board held the following stocks of shares:
| 09/30/2015 Number of shares |
09/30/2014 Number of shares |
|
|---|---|---|
| Management Board | ||
| Dr. Dietmar Ley | 144,794 | 144,358 |
| John P. Jennings | 5,500 | 5,500 |
| Arndt Bake | 700 | 700 |
| Hardy Mehl | 450 | 321 |
| Supervisory Board | ||
| Norbert Basler | ||
| (Basler Verwaltungs-GmbH/Basler | ||
| Beteiligungs-GmbH & Co. KG) | 1,828,000 | 1,816,891 |
| Prof. Dr. Eckart Kottkamp | - | - |
| Horst W. Garbrecht | - | - |
The management board and the supervisory board declare that in the already ended fiscal year 2014 Basler AG complied with the recommendations for conduct by the "Government Commission of the German Corporate Governance Code" (hereinafter called "code") as amended on May 13, 2013 and June 24, 2014, with the following exceptions:
Clause 3.8, paragraph 3, of the code sets forth that an appropriate deductible should be stipulated when the company takes out a D&O insurance policy for the supervisory board. The D&O insurance coverage for the management board comprises a deductible according to statutory provisions. However, the insurance policy does not provide for a deductible for the members of the supervisory board. The management board and the supervisory board are convinced that responsible action is a self-evident obligation for all members of the company's executive bodies. Therefore, a deductible for the members of the supervisory board is not necessary.
Please see no. 28.3 in the notes of the annual report 2014.
The supervisory board does not establish any committees. The supervisory board of Basler AG comprises three persons. This configuration ensures efficient work in all matters of the supervisory board, especially as the generally accepted minimum size for a committee is a membership of three.
For nominations to the general meeting, the supervisory board will also in the future continue to align itself to all necessary legal requirements and will emphasize the candidates' professional and personal qualifications independent of gender. Consideration will also be given to the international activities of the company, to potential conflicts of interest, and to diversity. Basler AG does not state specific pertinent goals in these areas.
With regard to the share ownership, the management board and the supervisory board declare pursuant to clause 6.3: The total share ownership of all members of the management board and the supervisory board exceeds 1 % of the total of shares issued by the company. You will find a detailed overview in this report under "The Basler share".
The declaration of compliance with the code and the constantly updated related compliance can be accessed on the Basler website's Investors area
(www.baslerweb.com/investors). If you have any questions regarding the corporate governance code please contact the compliance officer of Basler AG Dr. Dietmar Ley (CEO), Tel. +49 4102 - 463 100, [email protected]
We affirm to the best of our knowledge that the interim consolidated financial statements, in accordance with the accounting principles applicable to interim reporting, provide a true and fair view of the group's asset, financial, and earnings situation and that the group's interim annual report represents a true and fair picture of the course of business, including the operating result, and the group's financial situation as well as describing the essential opportunities and risks concomitant with the expected development of the group during the remainder of the fiscal year.
The management board
Dr. Dietmar Ley John P. Jennings
(CEO) (CCO)
Arndt Bake Hardy Mehl
(CMO) (CFO/COO)
Group´s annual balance sheet according to IFRS for the fiscal year from January 1, 2015 to September 30, 2015
| in € k | 01/01/ - 09/30/2015 |
01/01/ - 09/30/2014 |
07/01/ - 09/30/2015 |
07/01/ - 09/30/2014 |
|---|---|---|---|---|
| Sales revenues | 66,265 | 60,701 | 22,062 | 21,703 |
| Cost of sales | -34,069 | -29,593 | -11,220 | -10,655 |
| - of which depreciations on capitalized developments | -2,189 | -2,501 | -798 | -709 |
| Gross profit on sales | 32,196 | 31,108 | 10,842 | 11,048 |
| Other operating income | 2,142 | 1,663 | 750 | 756 |
| Sales and marketing costs | -11,959 | -9,940 | -4,086 | -3,597 |
| General administration costs | -8,287 | -7,595 | -2,619 | -2,476 |
| Research and development | -4,608 | -3,806 | -1,317 | -1,244 |
| Other expenses | -431 | -472 | -156 | -192 |
| Operating result | 9,053 | 10,958 | 3,414 | 4,295 |
| Financial income | 289 | 21 | 15 | 5 |
| Financial expenses | -875 | -1,167 | -276 | -356 |
| Financial result | -586 | -1,146 | -261 | -351 |
| Earnings before tax | 8,467 | 9,812 | 3,153 | 3,944 |
| Income tax | -2,418 | -2,393 | -1,255 | -982 |
| Group´s period surplus | 6,049 | 7,419 | 1,898 | 2,962 |
| of which are allocated to | ||||
| shareholders of the parent company | 6,049 | 7,419 | 1,898 | 2,962 |
| non-controlling shareholders | 0 | 0 | 0 | 0 |
| Average number of shares | 3,199,664 | 3,228,052 | 3,235,195 | 3,216,680 |
| Earnings per share diluted / undiluted (€) | 1.89 | 2.30 | 0.59 | 0.92 |
| in € k | 01/01/ - 09/30/2015 |
01/01/ - 09/30/2014 |
|---|---|---|
| Group's period surplus | 6,049 | 7,419 |
| Result from differences due to currency conversion, directly recorded in equity | 265 | 235 |
| Surplus/ Net loss from cash flow hedges | 0 | 0 |
| Total result, through profit or loss | 265 | 235 |
| Total result | 6,314 | 7,654 |
| of which are allocated to | ||
| shareholders of the parent company | 6,314 | 7,654 |
| non-controlling shareholders | 0 | 0 |
| in € k | 01/01/ - 09/30/2015 |
01/01/ - 09/30/2014 |
07/01/ - 09/30/2015 |
07/01/ - 09/30/2014 |
|---|---|---|---|---|
| Operating activities | ||||
| Group's period surplus | 6,049 | 7,419 | 1,898 | 2,962 |
| Increase (+) / decrease (-) in deferred taxes | 1,002 | 1,361 | 635 | 548 |
| Payout/ incoming payments for interest | 1,018 | 1,144 | 327 | 364 |
| Depreciation of fixed assets | 4,088 | 4,046 | 1,444 | 1,220 |
| Change in capital resources without affecting payment | 265 | 235 | -36 | 210 |
| Increase (+) / decrease (-) in accruals | -1,496 | 1,103 | 40 | 786 |
| Profit (-) / loss (+) from asset disposals | 0 | -12 | 0 | 0 |
| Increase (-) / decrease (+) in reserves | 560 | -3,683 | 452 | -1,293 |
| Increase (+) / decrease (-) in advances from demand | -175 | -183 | -59 | -87 |
| Increase (-) / decrease (+) in accounts receivable | -2,461 | -3,031 | 1,236 | -15 |
| Increase (-) / decrease (+) in other assets | -177 | 294 | 77 | 157 |
| Increase (+) / decrease (-) in accounts payable | -407 | 1,890 | -793 | 418 |
| Increase (+) / decrease (-) in other liabilities | -578 | 113 | -220 | 79 |
| Net cash provided by operating activities | 7,688 | 10,696 | 5,001 | 5,349 |
| Investing activities | ||||
| Payout for investments in fixed assets | -7,359 | -5,727 | -2,085 | -1,943 |
| Incoming payments for asset disposals | 143 | 171 | 80 | 2 |
| Net cash provided by investing activities | -7,216 | -5,556 | -2,005 | -1,941 |
| Financing activities | ||||
| Payout for amortisation of bank loans | -666 | -300 | -222 | -100 |
| Payout for amortisation of finance lease | -1,052 | -987 | -354 | -332 |
| Incoming payment for borrowings from banks | 0 | 2,533 | 0 | 0 |
| Interest payout | -1,018 | -1,145 | -327 | -365 |
| Incoming payment for sale of own shares | 3,773 | 0 | 705 | 0 |
| Payout for own shares | -247 | -1,120 | 0 | -905 |
| Dividends paid | -2,223 | -1,519 | -1 | 0 |
| Net cash provided by financing activities | -1,433 | -2,538 | -199 | -1,702 |
| Change in liquid funds | -961 | 2,602 | 2,797 | 1,706 |
| Funds at the beginning of the period | 12,812 | 9,665 | 9,054 | 10,561 |
| Funds at the end of the period | 11,851 | 12,267 | 11,851 | 12,267 |
| Composition of liquid funds at the end of the period | ||||
| Cash in bank and cash in hand | 11,851 | 12,267 | 11,851 | 12,267 |
| Payout for taxes | 1,660 | 266 | 612 | -8 |
| in € k | 09/30/2015 | 12/31/2014 |
|---|---|---|
| Assets | ||
| A. Long-term assets | ||
| I. Intangible assets | 20,061 | 17,380 |
| II. Fixed assets | 6,338 | 5,365 |
| III. Buildings and land in finance lease | 15,489 | 16,008 |
| IV. Other financial assets | 5 | 5 |
| V. Deferred tax assets | 99 | 58 |
| 41,992 | 38,816 | |
| B. Short-term assets | ||
| I. Inventories | 11,990 | 12,550 |
| II. Receivables from deliveries and services and from production orders | 9,424 | 6,963 |
| III. Other short-term financial assets | 465 | 351 |
| IV. Other short-term assets | 552 | 507 |
| V. Claim for tax refunds | 355 | 342 |
| VI. Cash in bank and cash in hand | 11,851 | 12,812 |
| 34,637 | 33,525 | |
| 76,629 | 72,341 |
| in € k | 09/30/2015 | 12/31/2014 |
|---|---|---|
| Liabilities | ||
| A. Equity | ||
| I. Subscribed capital | 3,241 | 3,181 |
| II. Capital reserves | 0 | 0 |
| III. Retained earnings including group's earnings | 41,223 | 33,931 |
| IV. Other components of equity | 460 | 195 |
| 44,924 | 37,307 | |
| B. Long-term debt | ||
| I. Long-term liabilities | ||
| 1. Long-term liabilities to banks | 6,947 | 7,413 |
| 2. Other financial liabilities | 0 | 0 |
| 3. Liabilities from finance lease | 10,478 | 11,531 |
| II. Non-current provisions | 796 | 796 |
| III. Deferred tax liabilities | 3,690 | 2,647 |
| 21,911 | 22,387 | |
| C. Short-term debt | ||
| I. Other financial liabilities | 1,791 | 2,286 |
| II. Short-term provisions | 2,518 | 3,861 |
| III. Short-term other liabilities | ||
| 1. Liabilities from deliveries and services | 1,870 | 2,277 |
| 2. Other short-term financial liabilities | 912 | 1,369 |
| 3. Liabilities from finance lease | 2,155 | 2,154 |
| IV. Current tax liabilities | 548 | 700 |
| 9,794 | 12,647 | |
| 76,629 | 72,341 |
Group´s annual balance sheet according to IFRS for the fiscal year from January 1, 2015 to September 30, 2015
| Other components of equity | |||||||
|---|---|---|---|---|---|---|---|
| Subscribed | Capital | Retained earnings incl. group's |
Differences due to currency |
Reserves for cash flow |
Sum of other components of |
||
| in € k | capital | reserve | earnings | conversion | hedges | equity | Total |
| Shareholders´ equity as of 01/01/2014 |
3,238 | 0 | 29,376 | -154 | 0 | -154 | 32,460 |
| Total result | 7,419 | 235 | 0 | 235 | 7,654 | ||
| Share buyback | -30 | 0 | -1,090 | 0 | -1,120 | ||
| Dividend outpayment* |
0 | -1,519 | 0 | -1,519 | |||
| Shareholders´equity as of 09/30/2014 |
3,208 | 0 | 34,186 | 81 | 0 | 81 | 37,475 |
| Total result | 759 | 114 | 0 | 114 | 873 | ||
| Share buyback | -27 | 0 | -1,014 | 0 | -1,041 | ||
| Shareholders´equity | |||||||
| as of 12/31/2014 | 3,181 | 0 | 33,931 | 195 | 0 | 195 | 37,307 |
| Total result | 6,049 | 265 | 0 | 265 | 6,314 | ||
| Share sale | 66 | 0 | 3,707 | 0 | 3,773 | ||
| Share buyback | -6 | 0 | -241 | 0 | -247 | ||
| Dividend outpayment** |
0 | 0 | -2,223 | 0 | -2,223 | ||
| Shareholders´equity as of 09/30/2015 |
3,241 | 0 | 41,223 | 460 | 0 | 460 | 44,924 |
* € 0,47 per no-par value bearer share
** € 0,70 per no-par value bearer share
| Date | Venue | |
|---|---|---|
| 11/23-24/2015 | Deutsches Eigenkapitalforum (German equity forum) |
Frankfurt, Germany |
| Date | Venue | |
|---|---|---|
| 11/03-07/2015 | China International Industry Fair | Shanghai, China |
| 11/18-19/2015 | All-over-IP Expo 2015 | Moskau, Russland |
| 11/18-21/2015 | Metalex Thailand | Bangkok, Thailand |
| 12/02-04/2015 | International Technical Exhibition on Image Technology and Equipment Japan |
Yokohama, Japan |
BASLER AG An der Strusbek 60-62 22926 Ahrensburg Tel. +49 4102 463 0 Fax +49 4102 463 109
BASLER, INC. 855 Springdale Drive, Suite 203 Exton, PA 19341 Tel. +1 610 280 0171 Fax +1 610 280 7608
BASLER ASIA PTE. LTD. 35 Marsiling Industrial Estate Road 3 Singapore 739257 Tel. +65 6367 1355 Fax +65 6367 1255 [email protected]
TAIWAN INC. Hsinchu County 30268 Taiwan/R.O.C. Fax +886 3 5583956
BASLER KOREA REPRESENTATIVE OFFICE Tel. +82 707 1363 114 Fax +82 707 0162 705
BASLER CHINA (SHANGHAI) REPRESENTATIVE OFFICE Tel. +86 21 6230 2160
BASLER CHINA (SHENZHEN)
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