Quarterly Report • Nov 17, 2015
Quarterly Report
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| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 692.1 | +5.5% | 655.9 | 241.3 | +13.6% | 212.3 | 858.3 |
| EBITDA | 80.5 | –10.1% | 89.5 | 27.4 | +6.5% | 25.7 | 101.9 |
| EBITDA margin | 11.6% | –2.1 PP | 13.7% | 11.3% | –0.8 PP | 12.1% | 11.9% |
| EBIT | 59.1 | –3.1% | 60.9 | 20.0 | +18.7% | 16.9 | 63.8 |
| EBIT margin | 8.5% | –0.8 PP | 9.3% | 8.3% | +0.4 PP | 7.9% | 7.4% |
| Earnings after tax | 40.1 | +7.9% | 37.1 | 14.7 | +24.0% | 11.9 | 37.8 |
| Earnings per share (EPS)2), in EUR | 1.95 | +7.7% | 1.81 | 0.72 | +23.8% | 0.58 | 1.85 |
| Gross cash flow | 41.0 | –49.3% | 80.9 | 8.3 | –51.7% | 17.1 | 89.9 |
| Return on equity3) | 15.4% | +4.4 PP | 11.0% | 17.0% | +6.5 PP | 10.5% | 8.6% |
| in EUR million | 30.9.2015 | Change | 30.9.2014 restated1) |
30.6.2015 restated |
Change | 30.6.2014 restated1) |
31.12.2014 restated1) |
|---|---|---|---|---|---|---|---|
| Balance sheet total | 911.1 | +9.1% | 834.9 | 928.1 | +17.6% | 789.5 | 826.3 |
| Equity2) | 346.0 | –23.5% | 452.3 | 363.0 | –13.7% | 420.9 | 443.8 |
| Equity ratio | 38.0% | –16.2 PP | 54.2% | 39.1% | –14.2 PP | 53.3% | 53.7% |
| Investments in tangible and intangible assets |
51.5 | +11.8% | 46.1 | 32.3 | +64.4% | 19.6 | 67.4 |
| Employees (at balance sheet date) |
7,303 | +6.2% | 6,875 | 7,311 | +18.4% | 6,175 | 6,888 |
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Medical Sector = Sempermed | |||||||
| Revenue | 296.7 | +1.8% | 291.5 | 105.1 | +14.7% | 91.7 | 380.8 |
| EBITDA | 23.5 | –27.0% | 32.1 | 9.8 | +25.9% | 7.8 | 33.5 |
| EBIT | 14.4 | –27.1% | 19.7 | 6.8 | +54.7% | 4.4 | 17.6 |
| Industrial Sector = Semperflex + Sempertrans + Semperform | |||||||
| Revenue | 395.5 | +8.5% | 364.4 | 136.2 | +12.8% | 120.7 | 477.5 |
| EBITDA | 76.6 | +6.3% | 72.0 | 24.9 | +11.2% | 22.4 | 88.0 |
| EBIT | 64.6 | +15.3% | 56.1 | 20.7 | +21.5% | 17.0 | 66.2 |
| Semperflex | |||||||
| Revenue | 156.2 | +0.1% | 156.0 | 48.3 | –2.0% | 49.3 | 202.1 |
| EBITDA | 38.6 | –0.6% | 38.9 | 11.5 | +1.2% | 11.3 | 48.5 |
| EBIT | 32.7 | +7.6% | 30.4 | 9.5 | +12.9% | 8.4 | 36.8 |
| Sempertrans | |||||||
| Revenue | 121.7 | +13.0% | 107.7 | 43.9 | +19.5% | 36.7 | 146.4 |
| EBITDA | 16.7 | +5.9% | 15.8 | 6.1 | +10.7% | 5.5 | 20.9 |
| EBIT | 14.3 | +12.8% | 12.6 | 5.3 | +17.7% | 4.5 | 16.8 |
| Semperform | |||||||
| Revenue | 117.5 | +16.8% | 100.6 | 44.0 | +26.9% | 34.7 | 129.0 |
| EBITDA | 21.2 | +22.2% | 17.4 | 7.3 | +32.1% | 5.5 | 18.6 |
| EBIT | 17.7 | +35.6% | 13.0 | 5.9 | +43.4% | 4.1 | 12.7 |
1) 2014 values restated (see notes page 24ff. in this report). 2) Attributable to the shareholders of Semperit AG Holding.
3) Based on a full-year projection.
Revenue of the Semperit Group rose from EUR 655.9 million in the first three quarters of 2014 to EUR 692.1 million in the first three quarters of 2015, an increase of 5.5%. The figures and comparisons in the present report (unless otherwise stated) are based on the inclusion of the Siam Sempermed Corp. Ltd. (SSC) in the consolidated financial statements using the equity method since 31 March 2014 (instead of since 31 December 2014, as in the past)1). The figures for the first quarter of 2015 and the first to fourth quarter 2014 accordingly required adjustment, which was performed for the first time in the half-year financial report 2015.
The stated increase in revenue in the first three quarters of 2015 was primarily due to an increase in revenue in the Industrial Sector. A strong sales performance and a good utilisation of capacity compensated for declining price levels caused by reduced raw material prices in comparison with the first three quarters of 2014. In addition, the inclusion of Leeser GmbH & Co. KG (Leeser) in the consolidated financial statements since 1 May 2015 as a fully consolidated subsidiary has had a positive effect.
On a like-for-like basis – that is without the acquisition of Leeser and taking into account the atequity consolidation of Siam Sempermed Corp. Ltd. (SSC) since January 2014 – revenue even shows an organic increase of 6.4%.
The rise in the Medical Sector's revenue resulted from the increase in the amount sold, which overcompensated the lower raw material prices. Revenue in the Semperflex segment was slightly higher year-on-year. The Sempertrans segment boosted its revenue by 13%, while the Semperform segment grew by nearly 17%, partly due to the first-time consolidation of Leeser.
1) 2014 values restated (see notes page 24ff. in this report).
The split of total revenue by segment in the first three quarters of 2015 was as follows: 43% is attributable to Sempermed, 22% to Semperflex, 18% to Sempertrans and 17% to Semperform. Due to the change in the method of consolidation, the share of the Medical Sector declined, while the shares of the Industrial Sector's segments increased in comparison with the first three quarters of 2014.
The regional distribution of revenue for the first three quarters of 2015 shows an increase to 65% in Europe, compared to 64% in the first three quarters of 2014. While revenue shares in North and South America remained unchanged compared to the previous year, Asia recorded a slight decrease from 14% in the previous year to 13% in the first three quarters of 2015.
In the first three quarters of 2015 the change in inventories was positive at EUR 2.6 million (EUR –12.3 million in the first three quarters of 2014). The decline in inventories in the first three quarters of 2014 is largely attributable to the following change: Products acquired from Siam Sempermed Corp. Ltd. by 31 March 2014 are recognised as finished products and their sale as changes in inventories (under the item "Changes in inventories"). Products acquired since 1 April 2014 are shown as goods and materials employed (under the item "Cost of material and purchased services"). This presentation led to a decline in inventories in the first three quarters of 2014.
Other operating income increased from EUR 12.2 million to EUR 32.9 million. An important reason for this increase was the higher foreign currency gains and the income of EUR 3.2 million from the acquisition of Leeser, Germany (purchase price lower than market value).
Cost of materials increased to a higher degree than revenue, growing by 17.1% from EUR 360.2 million to EUR 421.8 million. In addition to the volatile development of the price level for raw material, exchange rate effects led to higher costs of material in the reporting currency Euro. A further effect is the change described above in the value chain from the purchase of gloves from SSC and the resulting carrying value for material costs.
Personnel expenses grew by 8.7% to EUR 123.9 million, in congruence with the increased number of employees and due to increases in salaries in wages.
Other operating expenses increased by 22.0% to EUR 118.9 million compared with the first three quarters of 2014. This increase is mainly resulting from a project for strategic development of the Semperit Group and from expenses for litigation with the joint venture partner. Additionally, this item also shows losses from foreign currency transactions. In total, operational foreign currency hedges resulted in a significant profit.
EBITDA (earnings before interest, tax, depreciation and amortisation) totalled EUR 80.5 million (–10.1%) in the first three quarters of 2015. Higher operating revenue (+8.5%) and higher operating income (> +100.0%) were up against increases in cost of materials (+17.1%) as well as in personnel costs (+8.7%) and other operating expenses (+22.0%). As a result, the EBITDA margin fell from 13.7% to 11.6%.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Q1–3 2014 (Jan.–Sep.) restated1) |
Change | Change in EUR million |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|
| Revenue | 692.1 | 655.9 | +5.5% | +36.2 | 858.3 |
| EBITDA | 80.5 | 89.5 | –10.1% | –9.0 | 101.9 |
| EBITDA margin | 11.6% | 13.7% | –2.1 PP | – | 11.9% |
| EBIT | 59.1 | 60.9 | –3.1% | –1.9 | 63.8 |
| EBIT margin | 8.5% | 9.3% | –0.8 PP | – | 7.4% |
| Earnings after tax | 40.1 | 37.1 | +7.9% | +2.9 | 37.8 |
| Investments in tangible and intangible assets | 51.5 | 46.1 | +11.8% | +5.4 | 67.4 |
| Employees (at balance sheet date) | 7,303 | 6,875 | +6.2% | +427 | 6,888 |
1) 2014 values restated (see notes page 24ff. in this report).
Depreciation decreased by 25.0% to EUR 21.5 million. The reduction results from the change in the method of consolidation of SSC and adjustments of the useful lives.
EBIT declined slightly from EUR 60.9 million to EUR 59.1 million (–3.1%), with the EBIT margin falling too, edging lower from 9.3% to 8.5%.
The negative financial result in the first three quarters of 2015 totalled EUR 10.1 million, and remained almost unchanged compared to the previous year. However, there were shifts within the individual items of the financial results. A lower allocation of the group's profit to redeemable noncontrolling interests resulted from the change in the method of consolidation. On the other hand, the financial expenses increased resulting from higher borrowing and the results (non cash-effective as well as cash effective effects) from financial instruments. The item "Profit/loss attributable to redeemable non-controlling interests", which is mostly related to companies in the Sempermed and Semperflex segments, fell sharply to EUR 4.6 million in the first three quarters of 2015, following EUR 7.3 million in the previous year. Financial expenses increased from EUR 3.7 million to EUR 6.4 million.
Income tax expense decreased by EUR 4.9 million or 35.3% to EUR 8.9 million. The tax ratio as a percentage of earnings before tax and redeemable non-controlling interests fell from 23.7% to 16.6%. Earnings after tax (profit for the period) increased by 7.9% to EUR 40.1 million resulting in earnings per share of EUR 1.95 for the first three quarters of 2015.
Semperit Group performed well in the third quarter of 2015 and increased revenue significantly by 13.6% to EUR 241.3 million compared with the third quarter 2014.
The Medical Sector reported a 14.7% increase in revenue due to a good sales performance. The Industrial Sector increased its revenue by 12.8%. While the Semperflex segment reported a decrease in revenue of 2.0% with sustained high profitability, the Sempertrans segment showed an organic growth of 19.5%. Semperform additionally benefited from the acquisition of Leeser in Germany and reached a revenue growth of 26.9% in a quarter-on-quarter comparison.
As a result of higher revenues and other operating income that are offset by increased expenses for material, purchased services, personnel and other operating expenses, EBITDA increased by 6.5% to EUR 27.4 million. EBIT increased by 18.7% to EUR 20.0 million. The EBITDA margin declined to 11.3% while the EBIT margin increased to 8.3%. Earnings after tax increased by 24.0% to EUR 14.7 million, and earnings per share rose to EUR 0.72.
| in EUR million | Q3 2015 (Jul.–Sep.) |
Q3 2014 (Jul.–Sep.) restated1) |
Change | Change in EUR million |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|
| Revenue | 241.3 | 212.3 | +13.6% | +29.0 | 858.3 |
| EBITDA | 27.4 | 25.7 | 6.5% | +1.7 | 101.9 |
| EBITDA margin | 11.3% | 12.1% | –0.8 PP | – | 11.9% |
| EBIT | 20.0 | 16.9 | 18.7% | +3.1 | 63.8 |
| EBIT margin | 8.3% | 7.9% | +0.4 PP | – | 7.4% |
| Earnings after tax | 14.7 | 11.9 | +24.0% | +2.9 | 37.8 |
| Investments in tangible and intangible assets | 19.2 | 26.4 | –27.3% | –7.2 | 67.4 |
| Employees (at balance sheet date) | 7,303 | 6,875 | +6.2% | +427 | 6,888 |
Compared with the balance as of 31 December 2014, the balance sheet total rose by 10.3% to EUR 911.1 million in the first three quarters of 2015. On the asset side of the balance sheet, the main reason for this increase was a rise in tangible assets caused by expansion investments and the acquisition of Leeser, as well as an increase in trade receivables and inventories. In addition, the item "Investments in joint ventures and associated companies" rose, because it contains the current net profit of the companies accounted for using the equity method. These increases were offset by lower cash and cash equivalents.
On the liabilities side, there were increases in the amounts due to liabilities to banks, trade payables as well as to a lesser extent in liabilities from redeemable non-controlling interests. The currency translation reserves decreased by EUR 15.6 million, primarily due to a devaluation of the Thai baht and the Malaysian ringgit. Revenue reserves decreased by more than EUR 80 million mainly due to the dividend payment to shareholders of the Semperit AG Holding amounting to EUR 123.4 million.
Trade working capital (inventories plus trade receivables minus trade payables) rose from EUR 163.0 million at the end of 2014 to EUR 193.2 million, and therefore constituted 21.6% of the rolling 12-month revenue of EUR 894.5 million (year-end 2014: 19.0%). The increase is mostly attributable to higher trade receivables and an increase in inventories up against a lower increase in trade payables.
In July 2015 the two variable tranches (nominal amounts of EUR 36,500 thousand and EUR 35,500 thousand) of the corporate Schuldschein loan of July 2013 were repaid. Furthermore, in July 2015 the two interest rate swaps, which had been concluded for parts of the variable tranches then, were repaid.
At the same time, low financing costs caused the Semperit AG Holding to issue a new corporate Schuldschein loan amounting to EUR 75,000 thousand in July 2015. This corporate Schuldschein loan comprises three fixed-interest tranches of seven, ten and fifteen years. The average interest rate of the issue is 2.16%. It was placed mainly in Austria and Germany. The cash inflow has been utilised primarily for the repayment of the variable tranches of the corporate Schuldschein loan of July 2013.
Cash and cash equivalents decreased from EUR 115.6 million by the end of 2014 to EUR 103.0 million as of 30 September 2015.
As of 30 September 2015, the Semperit Group's equity (without non-controlling interests) stood at EUR 346.0 million, EUR 97.8 million lower than at the end of 2014 (EUR 443.8 million). The change was due to the distribution of dividends amounting to EUR 123.4 million as well as earnings after tax and the change of the currency translation reserve.
The group's reported equity ratio as of 30 September 2015 amounted to 38.0% (year-end 2014: 53.7%), which is still considerably above the sector average. The capital structure of the Semperit Group therefore remains very solid. The return on equity stood at 15.4%, following 11.0% in the first three quarters of 2014. The return on equity is calculated based on the earnings after tax as extrapolated for the full year in relation to the equity of EUR 346.0 million (each both in respect to the portion attributable to the shareholders of Semperit AG Holding).
Debt is significantly higher at EUR 563.3 million compared with the end of 2014. Liabilities from the corporate Schuldschein loan and to banks total EUR 294.5 million (year-end 2014: EUR 137.5 million). Taking into consideration cash and cash equivalents, this resulted in an overall net debt of EUR 191.5 million (year-end 2014: EUR 22.0 million). The net debt/EBITDA ratio (net debt versus EBITDA of the last four quarters) at the end of September 2015 is therefore 2.06 (year-end 2014: 0.22). The liabilities from redeemable non-controlling interests rose by EUR 5.9 million to EUR 43.2 million primarily due to profit allocation. Provisions including social capital remain unchanged at EUR 78.5 million. Other liabilities including deferred taxes increased by EUR 20.0 million to EUR 147.0 million.
The gross cash flow amounted to EUR 41.0 million, a year-on-year decline of EUR 39.9 million or 49.3%. This change was caused by the item "Dividend received from associated companies", a decline in depreciation and the changes in the items "Share of profit from joint ventures and associated companies" and "Profit/loss attributable to redeemable non-controlling interests".
At EUR 51.5 million, cash-relevant investments in tangible and intangible assets in the first three quarters of 2015 were considerably higher than in the first three quarters of 2014. The group's investment priorities were on expansion and improvement in the segments Sempermed (expansion of the plant in Kamunting, Malaysia), Semperflex (expansion of the plant in Odry, Czech Republic) and Sempertrans (expansion of the plant in Bełchatów, Poland).
As at 30 September 2015 the group's total headcount stood at 7,303 employees, 6.2% above the level at 30 September 2014 (6,875 people). While the number of employees slightly decreased in the Semperflex segment, it rose in the Sempermed segment due to additional personnel for the construction of the new glove factory and due to insourcing of employees for packaging services in Malaysia. The number of employees in the Sempertrans and Semperform segments rose accordingly due to the expansion of the plant in Poland and the acquisition of Leeser in Germany.
The International Monetary Fund (IMF) forecasts a gradual economic recovery in the industrial nations and a decelerated growth in emerging and developing economies in 2015. The global economy is expected to expand by 3.1%, falling short of last year's level by 0.3 percentage points.
At 2.6% growth in the USA is expected to be somewhat weaker than for the global economy. The fore-casts anticipate a growth rate of 6.8% for China, and 7.3% for India in 2015. Due to continuing international sanctions, Russia's economic output is expected to decrease by 3.8% in 2015.
In its 2015 forecast, the European Commission anticipates a further economic recovery in the member states of the European Union. In 2015, an economic growth of 1.9% after 1.4% in the previous year is expected. With GDP rising by 1.6% from 0.9% in 2014, the forecasts for the euro zone are more cautious. Compared to the average of the European Union and the euro zone, the Austrian economy is again weak. Current forecasts expect an economic growth of 0.6% with an inflation rate of 0.9%.
These macroeconomic conditions have different effects on the business sectors of the Semperit Group. While the energy, construction, machine-building and industrial equipment industries, which are relevant for the Semperit Group's Industrial Sector, are more sensitive to the overall economic situation, the market for medical products tends to evolve largely independently of economic cycles.
The sub-markets for raw materials that are important for the rubber industry, such as the market for natural rubber and natural latex as well as the market for synthetic rubber, experienced a decline in prices during the first three quarters of 2015, albeit to varying degrees. The development of these markets in the natural rubber field is influenced by production conditions, while the fields of synthetic rubber and carbon black are impacted by supplier behaviour and costs for basic raw materials, which are again affected by the price of crude oil. Demand is impacted primarily by the main buyers of rubber products, that is the tyre and automobile industry.
In the first months of 2015 prices for natural latex have moved sideways compared with the end of 2014. In May and June 2015 a slight increase was recorded. However, already in early July 2015 prices fell again. The average prices in the first three quarters of 2015 were lower than the average prices in the first three quarters of 2014. While synthetic rubber is manufactured globally, by far the largest share of natural rubber and natural latex is produced in Southeast Asia, above all in Thailand, Indonesia, Vietnam and Malaysia.
In the first three quarters of 2015 the average prices for synthetic rubber and synthetic latex were lower than the average prices in the first three quarters of 2014. In May and June 2015 prices increased slightly, though at the end of June they fell again.
Prices for the filling material carbon black decreased in the first three quarters of 2015 due to the sharp drop in the crude oil price that set in at the end of 2014. In the second quarter of 2015 the prices for carbon black rose temporarily, but decreased again since the beginnings of July. There is strong correlation between the price of carbon black and the price of crude oil. Depending on the type, the prices for wire in the different regions have remained relatively stable with slight declines.
Although the full consolidation of the 50% share in the joint venture Siam Sempermed Corp. Ltd. (SSC), Thailand, was changed to the equity method as at 31 March 2014 and despite lower raw material prices, revenue of the Medical Sector, which consists of the Sempermed segment, increased by 1.8% to EUR 296.7 million in the first three quarters of 2015. In a like-for-like comparison, i.e. after deducting SSC in the first quarter of 2014, revenue even grew 9.2%.
The EBITDA of the Sempermed segment of EUR 23.5 million decreased compared with the prior year, EBIT fell to EUR 14.4 million. This led to an EBITDA margin of 7.9% in the first three quarters of 2015, following 11.0% in the prior year period, and an EBIT margin of 4.8%, down from 6.8%. Both EBITDA and EBIT were affected by the change in the method of consolidation of SSC described above, heavy price competition and increased expenses. Thus personnel expenses increased, because of the technical personnel necessary for construction of the new glove factory in Malaysia, the insourcing of packaging employees in Malaysia, and for sales employees for expanding the market in China and Southeast Asia. The comparison of the third quarters of 2015 and 2014 shows a significant increase in revenue, EBITDA and EBIT.
In the reporting period the production capacity in Malaysia was slightly lower than in the prior year. For increasing the capacity and quality of existing facilities refurbishment work was carried out on individual production lines in the first three quarters of 2015. These modernisation activities were completed in the third quarter and already show some initial success. In addition, necessary adaptions of the infrastructure for the new glove factory were made. Overall, capacity utilisation was high at the production facilities. Therefore further growth is currently only possible by buying in gloves from other manufacturers and the joint venture company SSC; however, the resulting margin is lower than on the sale of the group's own production, which narrows the EBIT margin.
In the examination gloves sector, demand especially for industrial gloves (consumer goods industry) grew strongly, particularly in Europe and Latin America. This development is in line with the strategic focus for sales. Sales in the US were weaker. The segment is currently building up its market presence in Asia. Sales of surgical gloves, which are produced in Wimpassing, Austria, declined in the first three quarters of 2015 compared with the previous year.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 296.7 | +1.8% | 291.5 | 105.1 | +14.7% | 91.7 | 380.8 |
| EBITDA | 23.5 | –27.0% | 32.1 | 9.8 | +25.9% | 7.8 | 33.5 |
| EBITDA margin | 7.9% | –3.1 PP | 11.0% | 9.3% | +0.8 PP | 8.5% | 8.8% |
| EBIT | 14.4 | –27.1% | 19.7 | 6.8 | +54.7% | 4.4 | 17.6 |
| EBIT margin | 4.8% | –2.0 PP | 6.8% | 6.4% | +1.6 PP | 4.8% | 4.6% |
| Investments in tangible and intangible assets |
23.8 | +51.2% | 15.7 | 11.2 | –5.4% | 11.8 | 17.2 |
| Employees (at balance sheet date) |
3,595 | +5.8% | 3,397 | 3,595 | +5.8% | 3,397 | 3,428 |
In order to meet the growing demand and improve productivity, Sempermed is expanding and modernising its production capacity at the manufacturing plant in Kamunting, Malaysia by around 70%, from more than 6 billion units of gloves, to more than 10 billion units. A total of around EUR 50 million are being invested in the construction of a new glove factory.
The Industrial Sector comprises the segments Semperflex, Sempertrans and Semperform. Despite a challenging economic environment the Industrial Sector succeeded in growing its revenue by 8.5% to EUR 395.5 million. The Industrial Sector was able to further increase its good level of profitability. EBITDA rose by EUR 4.5 million or 6.3% to EUR 76.6 million, EBIT increased by EUR 8.6 million or 15.3% to EUR 64.6 million. At 51%, the Semperflex segment contributed the largest share of EBIT, followed by Semperform with 27% and Sempertrans with 22%.
The sector's EBITDA margin in the first three quarters of 2015 was 19.4%, down from 19.8%, the EBIT margin was 16.3%, up from 15.4% in the first three quarters of 2014. Semperflex reported the highest EBIT margin at 20.9%, followed by Semperform with 15.0% and Sempertrans at 11.7%. The EBIT margin rose in the Semperflex and Semperform segments, and remained unchanged in the Sempertrans segment. In the third quarter of 2015, revenue, EBITDA and EBIT rose significantly compared with the same period in the prior year.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 395.5 | +8.5% | 364.4 | 136.2 | +12.8% | 120.7 | 477.5 |
| EBITDA | 76.6 | +6.3% | 72.0 | 24.9 | +11.2% | 22.4 | 88.0 |
| EBITDA margin | 19.4% | –0.4 PP | 19.8% | 18.3% | –0.3 PP | 18.6% | 18.4% |
| EBIT | 64.6 | +15.3% | 56.1 | 20.7 | +21.5% | 17.0 | 66.2 |
| EBIT margin | 16.3% | +0.9 PP | 15.4% | 15.2% | +1.1 PP | 14.1% | 13.9% |
| Investments in tangible and intangible assets |
23.0 | –20.7% | 29.0 | 6.7 | –52.6% | 14.2 | 46.7 |
| Employees (at balance sheet date) |
3,583 | +6.1% | 3,376 | 3,583 | +6.1% | 3,376 | 3,352 |
1) 2014 values restated (see notes page 24ff. in this report).
Of all of the group's segments, the Semperflex segment is particularly exposed to potential economic volatility. Despite an overall market decline, the segment's revenue remained almost unchanged during the first three quarters of 2015 at EUR 156.2 million, thanks to good results in both production and sales. A constant high production volume – particularly of hydraulic hoses – allowed for constant higher returns to scale. In the first three quarters of 2015 the segment's EBITDA declined slightly by 0.6% to EUR 38.6 million, with EBIT rising by 7.6% to EUR 32.7 million, thanks to lower depreciation and amortisation. At 24.7%, the EBITDA margin was only marginally lower year-on-year, whereas the EBIT margin improved to 20.9%, following 19.5% in the previous year. Compared to the same period in the prior year, the third quarter of 2015 saw a decrease in revenue, while EBITDA and EBIT increased.
Demand in the overall market is expected to decrease in 2015 – in Europe somewhat less strongly than in the other regions like Asia or North and South America. The decrease in demand affects primarily construction machinery and the agricultural sector. Overall, the market is shrinking at a high single-digit rate and, depending on the region and the customer category, also at a double-digit rate. The Semperflex segment is addressing this trend with focused sales work, close cooperation with customers and strategic alliances. As a result, market share in terms of supply was gained in all regions and the performance was better than in the overall market.
In order to be able to respond flexibly to customer needs, particularly in Europe, the segment has expanded its capacity at the production site in Odry, Czech Republic. Around EUR 10 million was invested in total in the expansion that was finalised in the first quarter of 2015, with good capacity utilisation from the start. The next expansion phase at Odry is currently being implemented. Around EUR 15 million is reserved for this project in 2015 and 2016.
The Hydraulic Hoses unit generates most of the segment's revenue. During the period under review market share in terms of deliveries in both Europe and (in part) the USA was gained due to close customer-cooperation. The development in Asia is still challenging with demand remaining subdued throughout the region. All in all, sales grew in the high single-digit range.
The Industrial Hoses unit reported good sales, particularly in its European core markets, but also in Asia (excluding China). The situation in Eastern Europe, in particular in Russia and Ukraine, continues to be challenging and is the reason for the overall decrease in sales volume compared with the first three quarters of 2014.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 156.2 | +0.1% | 156.0 | 48.3 | –2.0% | 49.3 | 202.1 |
| EBITDA | 38.6 | –0.6% | 38.9 | 11.5 | +1.2% | 11.3 | 48.5 |
| EBITDA margin | 24.7% | –0.2 PP | 24.9% | 23.8% | +0.8 PP | 23.0% | 24.0% |
| EBIT | 32.7 | +7.6% | 30.4 | 9.5 | +12.9% | 8.4 | 36.8 |
| EBIT margin | 20.9% | +1.4 PP | 19.5% | 19.7% | +2.6 PP | 17.1% | 18.2% |
| Investments in tangible and intangible assets |
11.2 | –2.4% | 11.5 | 3.3 | –36.8% | 5.2 | 18.1 |
| Employees (at balance sheet date) |
1,529 | –1.3% | 1,550 | 1,529 | –1.3% | 1,550 | 1,538 |
1) 2014 values restated (see notes page 24ff. in this report).
The Sempertrans segment was able to record a positive volume development despite a very challenging market environment, in the first three quarters of 2015. This development was possible by winning new customers and by expanding sales activity into new markets and market segments. With regard to sales activities, Sempertrans attaches great importance to intensive customer service and its position as a technical solution provider.
Compared to the first three quarters of 2014, the clear increase in sales volume more than compensated the effect of the year-on-year lower raw materials prices. Thus the overall revenue grew significantly by 13.0% to EUR 121.7 million. Despite the price pressure in the market and higher costs to develop the market and expand capacity at the production facility in Poland, EBITDA rose by 5.9% to EUR 16.7 million, and EBIT was 12.8% higher at EUR 14.3 million. Both EBITDA and the EBIT margins were clearly in double-digit range, at 13.7% and 11.7%, respectively. In a quarter-on-quarter comparison between Q3 2015 and 2014, the segment shows a significant increase in revenue, EBITDA and EBIT.
Due to the lower prices for natural resources, new projects in the mining industry continue to be scrutinised more closely and order decisions are being made more cautiously. Replacement business is satisfactory. The industrial business, which includes sales to companies outside the mining sector, proved to be stable, though without growth impulses. Due to good customer relationships, the expansion of the technical advisory expertise and the development of new markets, the capacity of the Sempertrans segment is well utilised until into the first quarter of 2016 despite this challenging competitive environment.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 121.7 | +13.0% | 107.7 | 43.9 | +19.5% | 36.7 | 146.4 |
| EBITDA | 16.7 | +5.9% | 15.8 | 6.1 | +10.7% | 5.5 | 20.9 |
| EBITDA margin | 13.7% | –0.9 PP | 14.6% | 13.9% | –1.1 PP | 15.0% | 14.3% |
| EBIT | 14.3 | +12.8% | 12.6 | 5.3 | +17.7% | 4.5 | 16.8 |
| EBIT margin | 11.7% | +0.0 PP | 11.7% | 12.0% | –0.2 PP | 12.2% | 11.5% |
| Investments in tangible and intangible assets |
6.4 | –43.1% | 11.2 | 1.1 | –81.5% | 5.9 | 19.8 |
| Employees (at balance sheet date) |
1,076 | +6.6% | 1,010 | 1,076 | +6.6% | 1,010 | 1,027 |
1) 2014 values restated (see notes page 24ff. in this report).
From a geographical perspective, Western Europe has performed particularly well. In this region Sempertrans benefits from a comprehensive sales and distribution network and good market positioning. Sales remain weak in Russia as well as in the Middle East and North Africa. This results in Sempertrans's competitors appear on other markets which again leads to increased competition. Price competition continues to prevail in India and China, as economic growth in these countries remains subdued compared with their previous growth rates. From a global perspective, sales increased, in particular for steel cord reinforced conveyor belts.
Thus the increasing demand led to the decision to expand the production capacities. The first step to increase capacity at the Polish conveyor belt plant in Bełchatów was completed in September 2015. The next expansion steps are currently in progress and further capacities will be available during the course of the year 2016. The first installed conveyor belt press is in the start-up phase and is already booked well for orders. Associated revenues were already recorded in the third quarter.
The Semperform segment recorded an increase in the first three quarters of 2015 of 16.8% to EUR 117.5 million in comparison to the prior year. A growth in volume, however, was up against negative price effects. All in all, in the first three quarters of 2015 the Semperform segment generated EBITDA of EUR 21.2 million in comparison to EUR 17.4 million in the previous year. EBIT amounted to EUR 17.7 million compared with EUR 13.0 million in 2014. These results represent increases of 22.2% and 35.6% respectively. Leeser has been fully consolidated in the consolidated financial statements since 1 May 2015. The EBITDA margin stood at 18.1%, following 17.3% in the first three quarters of 2014, while the EBIT margin increased from 13.0% to 15.0%. A comparison between the third quarter in 2015 and the third quarter in 2014 shows a significant increase in revenue, EBITDA and EBIT.
With its seal profiles for windows and doors, the Profiles unit is the largest unit in the Semperform segment. Leeser has been part of this business since the beginning of May. Therewith the Semperit Group is strengthening the Semperform segment as a full-range supplier on the profiles market and continues to expand its presence in the growth market for building profiles. Integration of Leeser into Semperit is proceeding excellently – with regard to the technical and the commercial collaboration as well as customer service. On this basis, first synergies – for example the coordination of the production at the different locations – have already been achieved.
While business in Western Europe was satisfactory in the first half of 2015, a slight downturn occurred from the middle of the third quarter. The order volume from Russia and Ukraine, which had already been decreasing in the second quarter 2015, continued to decline significantly in the third quarter. This development is caused by the economic circumstances in the region. In addition, the weak Rouble negatively affected both sales and the relative profitability (with a view to discounts to compensate the currency situation) of this business unit. The decline in Russia and Ukraine cannot be offset any more by higher sales in WesternEurope.
| in EUR million | Q1–3 2015 (Jan.–Sep.) |
Change | Q1–3 2014 (Jan.–Sep.) restated1) |
Q3 2015 (Jul.–Sep.) |
Change | Q3 2014 (Jul.–Sep.) restated1) |
2014 (Jan.–Dec.) restated1) |
|---|---|---|---|---|---|---|---|
| Revenue | 117.5 | +16.8% | 100.6 | 44.0 | +26.9% | 34.7 | 129.0 |
| EBITDA | 21.2 | +22.2% | 17.4 | 7.3 | +32.1% | 5.5 | 18.6 |
| EBITDA margin | 18.1% | +0.8 PP | 17.3% | 16.6% | +0.6 PP | 16.0% | 14.5% |
| EBIT | 17.7 | +35.6% | 13.0 | 5.9 | +43.4% | 4.1 | 12.7 |
| EBIT margin | 15.0% | +2.0 PP | 13.0% | 13.3% | +1.5 PP | 11.8% | 9.9% |
| Investments in tangible and intangible assets |
5.5 | –14.0% | 6.4 | 2.4 | –24.6% | 3.2 | 8.8 |
| Employees (at balance sheet date) |
977 | +19.8% | 816 | 977 | +19.8% | 816 | 787 |
Despite the weakening demand in the third quarter, the Industrial Moulded Parts unit performed well and gained market share among both industrial customers and in railway-track superstructures. Nevertheless, demand in railway-track superstructures remained volatile.
Since the third quarter of 2014 the Handrails unit experienced a declining demand for new escalators in the main market of China. However, an uptrend in sales of new escalators (OEM market) has been noticeable since the second quarter of 2015. China, as the most important OEM market, remains characterised by strong competition and high price pressure. As a consequence of the economic development the visibility on the Chinese Market is limited in the following quarters. In addition to the OEM market, the After Sales Market (ASM) contributed to the increase in the sales of handrails especially in Europe.
The smallest business unit, Special Applications (including ski foils and cableway rubber rings), recorded slight sales decreases related to market conditions compared to the first three quarters of 2014.
The Semperit Group continues to have strong order books as a result of intensified sales activities in all segments. This good order development is offset by an unchanged restrained market development in Western Europe and North America. A slight recovery is recognisable in Central and Eastern Europe, with the exception of Russia and Ukraine. The demand situation in Asia is expected to remain difficult in the subsequent months.
The Semperit Group anticipates a satisfactory business performance for the remaining weeks of 2015 despite an ongoing challenging business environment. From today's perspective, revenue and earnings for the year 2015 should be at an attractive level. A strong sales performance, the currently high utilisation of production capacities and successfully implemented projects to increase efficiency and expand capacity, should continue to have a positive impact on earnings in the coming quarters. These positive operating developments are contrasted by the persisting difficult market environment and start-up costs for new production capacities.
Semperit is continuing the expansion of production capacities in both the Medical Sector and the Industrial Sector. Capital expenditure (CAPEX) of approximately EUR 75 million is planned for 2015 (2014: EUR 74 million), of which EUR 50 million relate to growth investments. The additional capacities will gradually be available with corresponding positive effects on the group's revenue.
In the future, Semperit is striving to achieve double-digit growth of sales volumes on average as well as attractive earnings margins. For the time being, the targeted EBITDA margin remains unchanged between 12% and 15% and the EBIT margin between 8% and 11%.
The Medical Sector develops largely independent of the general trend in the economy. The Semperit Group anticipates that demand for examination and protective gloves will grow steadily. In this environment, the Semperit Group is still committed to qualitative and profitable growth in the Medical Sector. The focus is still on efficiency improvements at the individual production sites, the expansion of high-margin customer relationships and the completion of the expansion of capacity in Kamunting, Malaysia.
Despite the weaker market environment, capacity in the Industrial Sector is well booked for the coming months. The Semperit Group is responding to this market weakness with intensive sales and marketing initiatives as well as by expanding its global customer relationships in all industry segments.
In order to continue its long-term growth, the Semperit Group will implement its investment programme in the Industrial Sector as planned. In the Semperflex segment, the expansion of its industrial hose production is proceeding according to plan. In the Sempertrans segment, the production capacity at the manufacturing site in Bełchatów, Poland, put into operation in the third quarter 2015, is already well utilised.
This outlook is based on the assessments of the Management Board as of 13 November 2015 and does not take into account the effects of possible acquisitions, sales or other unforeseeable structural or economic changes during the further course of 2015. These assessments are subject to both known and unknown risks and uncertainties, which may result in actual events and outcomes differing from the outlook stated here.
No significant events requiring disclosure occurred between 30 September 2015, the balance sheet date, and 13 November 2015, the date on which this report was approved for publication.
Vienna, 13 November 2015
The Management Board
Thomas Fahnemann Chairman of the Management Board
Johannes Schmidt-Schultes Chief Financial Officer
Richard Ehrenfeldner Chief Technical Officer
Declan Daly Chief Information Officer
| in EUR thousand | 1.1.- 30.9.2015 |
1.1.- 30.9.2014 restated1) |
1.7.- 30.9.2015 |
1.7.- 30.9.2014 restated1) |
|---|---|---|---|---|
| Revenue | 692,131 | 655,903 | 241,306 | 212,332 |
| Changes in inventories | 2,589 | –12,292 | –366 | 1,592 |
| Own work capitalised | 4,451 | 906 | 1,365 | 246 |
| Operating revenue | 699,171 | 644,517 | 242,305 | 214,171 |
| Other operating income | 32,915 | 12,177 | 13,476 | 2,918 |
| Cost of material and purchased services | –421,765 | –360,159 | –148,438 | –127,709 |
| Personnel expenses | –123,880 | –113,972 | –40,305 | –35,709 |
| Other operating expenses | –118,938 | –97,461 | –45,786 | –30,753 |
| Share of profits from joint ventures and associated companies | 13,027 | 4,432 | 6,126 | 2,795 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 80,531 | 89,534 | 27,378 | 25,713 |
| Depreciation, amortisation and impairment of tangible and intangible assets | –21,456 | –28,594 | –7,363 | –8,847 |
| Earnings before interest and tax (EBIT) | 59,075 | 60,939 | 20,016 | 16,866 |
| Financial income | 848 | 950 | 367 | 286 |
| Financial expenses | –6,376 | –3,710 | –1,670 | –1,252 |
| Profit/loss attributable to redeemable non-controlling interests | –4,612 | –7,293 | –1,826 | –1,572 |
| Financial result | –10,140 | –10,052 | –3,128 | –2,538 |
| Earnings before tax | 48,935 | 50,887 | 16,888 | 14,328 |
| Income taxes | –8,872 | –13,761 | –2,142 | –2,440 |
| Earnings after tax | 40,063 | 37,126 | 14,746 | 11,888 |
| thereof attributable to the shareholders of Semperit AG Holding | 40,071 | 37,207 | 14,741 | 11,911 |
| thereof attributable to non-controlling interests | –8 | –81 | 4 | –23 |
| Earnings per share in EUR (diluted and undiluted)2) | 1.95 | 1.81 | 0.72 | 0.58 |
1) 2014 values restated (see notes page 24ff. in this report). 2) Attributable to the shareholders of Semperit AG Holding
| in EUR thousand | 1.1.- 30.9.2015 |
1.1.- 30.9.2014 restated1) |
1.7.- 30.9.2015 |
1.7.- 30.9.2014 restated1) |
|---|---|---|---|---|
| Earnings after tax according to the consolidated income statement | 40,063 | 37,126 | 14,746 | 11,888 |
| Other comprehensive income Amounts that will potentially be recognised through profit and loss in future periods |
||||
| Available-for-sale financial assets | ||||
| Revaluation gains / losses for the period | 29 | 457 | 235 | 80 |
| Reclassification to profit and loss for the period | 0 | 98 | 0 | 21 |
| 29 | 554 | 235 | 101 | |
| Cash flow Hedge | ||||
| Revaluation gains / losses for the period | 624 | –1,405 | 47 | –255 |
| Reclassification to profit and loss for the period | 831 | 166 | 7 | 123 |
| 1,456 | –1,239 | 55 | –133 | |
| Other comprehensive income from joint ventures | ||||
| Currency translation differences for the period | –984 | 5,959 | –7,688 | 5,436 |
| Currency translation differences | ||||
| Currency translation differences for the period | –14,864 | 18,319 | –24,657 | 14,248 |
| Reclassification to profit and loss for the period | 0 | 4,796 | 0 | 0 |
| –14,864 | 23,115 | –24,657 | 14,248 | |
| Related deferred taxes | –362 | 178 | –65 | 16 |
| Other comprehensive income | –14,726 | 28,567 | –32,120 | 19,668 |
| Total recognised comprehensive income | 25,337 | 65,694 | –17,374 | 31,556 |
| thereof on earnings attributable to the shareholders of Semperit AG | ||||
| Holding | 25,638 | 65,494 | –17,069 | 31,384 |
| thereof on earnings attributable to non-controlling interests | –301 | 200 | –305 | 172 |
| in EUR thousand | 1.1.- 30.9.2015 |
1.1.- 30.9.2014 restated1) |
|---|---|---|
| Earnings before tax | 48,935 | 50,887 |
| Depreciation, amortisation, impairment and write-ups | 21,450 | 28,594 |
| Profit and loss from disposal of assets | ||
| (including current and non-current financial assets) | –35 | 354 |
| Change in non-current provisions | –2,436 | 798 |
| Share of profits from joint ventures and associated companies | –13,027 | –4,432 |
| Dividends received from joint ventures and associated companies | 0 | 11,451 |
| Effects of the change in the method of consolidation | 0 | 564 |
| Badwill arising from company acquisition | –3,221 | 0 |
| Profit/loss attributable to redeemable non-controlling interests | 4,612 | 7,293 |
| Net interest income (including income from securities) | 2,571 | 2,044 |
| Interest paid | –3,881 | –3,587 |
| Interest received | 780 | 1,019 |
| Taxes paid on income | –14,741 | –14,111 |
| Gross cash flow | 41,007 | 80,874 |
| Change in inventories | –7,125 | –9,585 |
| Change in trade receivables | –28,189 | –25,749 |
| Change in other receivables and assets | –11,999 | –3,417 |
| Change in trade payables | 11,318 | 7,021 |
| Change in other liabilities and current provisions | 9,271 | 8,707 |
| Changes in working capital resulting from currency translation adjustments | 8,596 | 3,947 |
| Cash flow from operating activities | 22,879 | 61,800 |
| Proceeds from sale of tangible and intangible assets | 285 | 219 |
| Proceeds from sale of current and non-current financial assets | 0 | 2,000 |
| Investments in tangible and intangible assets | –51,507 | –46,077 |
| Investments in current and non-current financial assets | 0 | –946 |
| Net cash outflow on acquisition of businesses (less cash acquired) | –17,474 | 0 |
| Cash flow from investing activities | –68,697 | –44,804 |
| Cash receipts from current and non-current financing liabilities | 234,020 | 7,728 |
| Repayment of current and non-current financing liabilities | –77,926 | –12,550 |
| Dividend to shareholders of Semperit AG Holding | –123,441 | –24,688 |
| Dividends to non-controlling shareholders of subsidiaries | 0 | –3,539 |
| Acquisition of non-controlling interests | –59 | –351 |
| Cash flow from financing activities | 32,595 | –33,401 |
| Net increase / decrease in cash and cash equivalents | –13,224 | –16,405 |
| Effects resulting from currency translation | 653 | 3,709 |
| Changes in the scope of consolidation | 0 | –40,224 |
| Cash and cash equivalents at the beginning of the period | 115,574 | 182,554 |
| Cash and cash equivalents at the end of the period | 103,003 | 129,634 |
| ASSETS Non-current assets Intangible assets 105,853 112,414 Tangible assets 257,140 220,017 Investments in joint ventures and associated companies 94,879 82,835 Other financial assets 13,574 8,544 Other assets 9,127 4,274 Deferred taxes 14,992 18,426 495,565 446,511 Current assets Inventories 140,287 130,889 Trade receivables 144,506 112,965 Other financial assets 3,098 3,469 Other assets 14,136 11,624 Current tax receivables 10,550 5,269 Cash and cash equivalents 103,003 115,574 415,580 379,789 ASSETS 911,144 826,300 EQUITY AND LIABILITIES Equity Share capital 21,359 21,359 Capital reserves 21,503 21,503 Revenue reserves 311,449 393,690 Currency translation reserve –8,345 7,211 Equity attributable to the shareholders of Semperit AG Holding 345,966 443,762 Non-controlling interests 1,844 2,211 347,811 445,973 Non-current provisions and liabilities Provisions for pension and severance payments 43,159 43,939 Other provisions 13,381 15,051 Liabilities from redeemable non-controlling interests 43,239 37,303 Corporate Schuldschein loan 132,600 126,615 Liabilities to banks 153,000 0 Other financial liabilities 970 2,138 Other liabilities 629 704 Deferred taxes 12,200 9,998 399,177 235,748 Current provisions and liabilities Provisions for pension and severance payments 2,677 2,676 Other provisions 19,326 16,835 Corporate Schuldschein loan 619 1,335 Liabilities to banks 8,317 9,581 Trade payables 91,590 80,829 Other financial liabilities 17,241 15,944 Other liabilities 19,840 12,955 Current tax liabilities 4,548 4,424 164,156 144,579 EQUITY AND LIABILITIES 911,144 826,300 |
in EUR thousand | 30.9.2015 | 31.12.2014 restated1) |
|---|---|---|---|
| Revenue reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| in EUR thousand | Share capital |
Capital reserves |
Re valuation reserves |
Other revenue reserves |
Total revenue reserves |
Currency translation reserve |
Total equity attributable to the share holders of Semperit AG Holding |
Non controlling interests |
Total equity |
| As at 1.1.2014 | 21,359 | 21,503 | –115 | 385,907 | 385,793 | –17,204 | 411,451 | 2,702 | 414,153 |
| Earnings after tax | 0 | 0 | 0 | 37,207 | 37,207 | 0 | 37,207 | –81 | 37,126 |
| Other comprehensive income |
0 | 0 | –507 | 0 | –507 | 28,794 | 28,287 | 280 | 28,567 |
| Total recognised comprehensive income |
0 | 0 | –507 | 37,207 | 36,700 | 28,794 | 65,494 | 200 | 65,694 |
| Dividend | 0 | 0 | 0 | –24,688 | –24,688 | 0 | –24,688 | 0 | –24,688 |
| Acquisition of non controlling interests |
0 | 0 | 0 | 19 | 19 | 0 | 19 | –370 | –351 |
| As at 30.9.2014 restated1) |
21,359 | 21,503 | –621 | 398,445 | 397,824 | 11,590 | 452,276 | 2,531 | 454,807 |
| As at 1.1.2015 restated1) |
21,359 | 21,503 | 284 | 393,405 | 393,690 | 7,211 | 443,762 | 2,211 | 445,973 |
| Earnings after tax | 0 | 0 | 0 | 40,071 | 40,071 | 0 | 40,071 | –8 | 40,063 |
| Other comprehensive income |
0 | 0 | 22 | 1,101 | 1,122 | –15,556 | –14,433 | –293 | –14,726 |
| Total recognised comprehensive income |
0 | 0 | 22 | 41,172 | 41,194 | –15,556 | 25,638 | –301 | 25,337 |
| Dividend | 0 | 0 | 0 | –123,441 | –123,441 | 0 | –123,441 | 0 | –123,441 |
| Acquisition of non |
controlling interests 0 0 0 6 6 0 6 –65 –59 As at 30.9.2015 21,359 21,503 306 311,143 311,449 –8,345 345,966 1,844 347,811
The interim consolidated financial statements as at 30 September 2015 have been prepared in accordance with the principles of International Financial Reporting Standards (IFRS) and the rules stipulated by IAS 34 Interim Financial Reporting.
The change in the method of consolidation of Siam Sempermed Corp. Ltd. (SSC) has been retroactively restated from 31 December 2014 to 31 March 2014. Please see the relevant statements on page 24ff. of this report.
Due to technological developments, improved quality and increased usability of equipment as well as longer product life cycles, the group revised its estimates for the useful lives of tangible assets effective as of 1 January 2015. In accordance with IAS 8.32, this adjustment was made prospectively; a retrospective change of previous reporting periods has therefore not been made. Due to this change in accounting estimate, depreciation in the first three quarters of 2015 declined by EUR 8,217 thousand. EUR 6,170 thousand of this amount is attributable to technical equipment and machinery, EUR 1,368 thousand to land and buildings, and EUR 678 thousand to other equipment, office furniture and equipment. The restatement of the useful lives will lead to a reduction of the depreciation of approximately EUR 8,722 thousand for the financial year 2016 and to a reduction of EUR 16,248 thousand in total for the four subsequent financial years.
Furthermore, no material changes have been made to the accounting and valuation methods used. For more information on accounting and valuation methods, please see the consolidated financial statements as at 31 December 2014, which in this regard form the basis for these interim financial statements.
The reporting currency is the euro, in which case figures are rounded off to thousands of euros unless specified otherwise. Rounding differences in the totalling of rounded amounts and percentages may arise from the automatic processing of data.
These interim financial statements of the Semperit Group have not been audited or reviewed by the group's auditor.
As of 31 December 2014 the method of consolidation of Siam Sempermed Corp. Ltd. (SSC) was changed from full consolidation under IFRS 10 Consolidated Financial Statements to the equity method in accordance with IFRS 11 Joint Arrangements.
The date was set due to increasing problems with the execution of the controlling influence and the assessment of the duration of legal procedures between the Semperit Group and the Thai Shareholder Sri Trang Agro-Industry Public Co Ltd. (Sri Trang). Furthermore, the development of the legal disputes in January and February 2015 and the mediation procedure between representatives of the group and Sri Trang, which was terminated without result on 13 February 2015, affected this decision. At that time, it was clearly recognisable to the Semperit management that Sri Trang would not end its unlawful conduct in the near future. Based on this understanding, the management had assessed that they would currently not be able to execute its controlling influence on SSC by 31 December 2014 and therefore decided to consolidate SSC as a joint venture in the consolidated financial statements.
In the course of the review of the consolidated financial statements as of 31 December 2013 and the interim consolidated financial statements as of 30 June 2014, the Austrian Financial Market Authority (Finanzmarktaufsicht – FMA) came to the conclusion by decision of 30 July 2014 that SSC should not have been fully consolidated in the interim consolidated financial statements as of 30 June 2014 for the following reasons:
The Semperit Aktiengesellschaft Holding fully consolidated the SSC in its interim consolidated financial statements as of 30 June 2014. This violates IFRS 10.6 in connection with IFRS 10.7 and IFRS 10.2(b) and (c) stating that a parent company may only consolidate another company by means of a full consolidation in the consolidated financial statements, when it has full control of the associated company. Major barriers for this execution of controlling influence already arose during the first half of 2014, triggered by the conduct of Thai Shareholder.
Due to the identification of this error, the management assessed for the interim consolidated financial statements as of 30 June 2015 the effect of the above-mentioned barriers in the course of the first half of 2014. The above-mentioned change of the method of consolidation for SSC (from full consolidation to the equity method) as of 31 December 2014 was restated retrospectively to 31 March 2014 in the present interim consolidated financial statements.
All necessary information pursuant to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors are reported in the following section.
At the end of August 2015, Semperit AG Holding filed an appeal with the Federal Administrative Court against the aforementioned notice. Following the negative preliminary decision issued by the FMA, Semperit AG Holding has filed a respective motion for decision with the Federal Administrative Court at the beginning of November 2015.
In the consolidated balance sheet as of 31 December 2014 the following positions have changed due to the retrospective restatement in the method of consolidation:
| in EUR thousand | 31.12.2014 | Restatement | 31.12.2014 restated |
|---|---|---|---|
| Investments in joint ventures and associated companies | 91,043 | –8,208 | 82,835 |
| Deferred taxes | 19,526 | –1,100 | 18,426 |
| Other non-current assets | 345,249 | 0 | 345,249 |
| Non-current assets | 455,818 | –9,307 | 446,511 |
| Inventories | 127,196 | 3,693 | 130,889 |
| Other current assets | 248,901 | 0 | 248,901 |
| Current assets | 376,096 | 3,693 | 379,789 |
| ASSETS | 831,914 | –5,614 | 826,300 |
| Revenue reserves | 405,509 | –11,820 | 393,690 |
| Currency translation reserve | 1,005 | 6,205 | 7,211 |
| Other equity and liabilities | 425,400 | 0 | 425,400 |
| EQUITY AND LIABILITIES | 831,914 | –5,614 | 826,300 |
In the consolidated income statement as of 31 December 2014 the following positions have changed due to the retrospective restatement in the method of consolidation:
| 1.1.- | |||
|---|---|---|---|
| in EUR thousand | 1.1.- 31.12.2014 |
Restatement | 31.12.2014 restated |
| Revenue | 930,350 | –72,096 | 858,255 |
| Changes in inventories | 383 | –15,690 | –15,307 |
| Own work capitalised | 3,303 | 0 | 3,303 |
| Operating revenue | 934,036 | –87,785 | 846,250 |
| Other operating income | 34,766 | –16,242 | 18,524 |
| Cost of material and purchased services | –513,733 | 26,082 | –487,651 |
| Personnel expenses | –167,351 | 16,384 | –150,967 |
| Other operating expenses | –152,089 | 19,780 | –132,309 |
| Share of profits from joint ventures and associated companies | 425 | 7,632 | 8,057 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) |
136,054 | –34,149 | 101,905 |
| Depreciation, amortisation and impairment of tangible and intangible assets |
–47,526 | 9,390 | –38,136 |
| Earnings before interest and tax (EBIT) | 88,528 | –24,759 | 63,769 |
| Financial income | 1,799 | –374 | 1,426 |
| Financial expenses | –5,040 | 1 | –5,040 |
| Profit/loss attributable to redeemable non-controlling interests | –16,860 | 9,015 | –7,845 |
| Financial result | –20,101 | 8,642 | –11,460 |
| Earnings before tax | 68,426 | –16,117 | 52,309 |
| Income taxes | –18,730 | 4,245 | –14,485 |
| Earnings after tax | 49,697 | –11,872 | 37,824 |
| thereof attributable to the shareholders of Semperit AG Holding |
49,859 | –11,872 | 37,987 |
| thereof attributable to non-controlling interests | –163 | 0 | –163 |
| Earnings per share in EUR (diluted and undiluted)1) | 2.42 | –0.58 | 1.85 |
1) Attributable to the shareholders of Semperit AG Holding
The restated consolidated balance sheet as of 30 September 2014 is as follows:
| 30.9.2014 | |||
|---|---|---|---|
| in EUR thousand | 30.9.2014 | Restatement | restated |
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 113,638 | –282 | 113,357 |
| Tangible assets | 283,059 | –76,906 | 206,152 |
| Investments in joint ventures and associated companies | 1,571 | 77,045 | 78,616 |
| Other financial assets | 8,534 | –16 | 8,518 |
| Other assets | 3,965 | –67 | 3,898 |
| Deferred taxes | 16,824 | –2,023 | 14,801 |
| 427,590 | –2,248 | 425,342 | |
| Current assets | |||
| Inventories | 156,766 | –24,367 | 132,399 |
| Trade receivables | 138,519 | –10,008 | 128,511 |
| Other financial assets | 3,912 | –159 | 3,753 |
| Other assets | 12,571 | –1,921 | 10,650 |
| Current tax receivables | 4,640 | 0 | 4,640 |
| Cash and cash equivalents | 163,175 | –33,541 | 129,634 |
| 479,583 | –69,995 | 409,588 | |
| ASSETS | 907,173 | –72,243 | 834,930 |
30.9.2014
| in EUR thousand | 30.9.2014 | Restatement | restated |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 21,359 | 0 | 21,359 |
| Capital reserves | 21,503 | 0 | 21,503 |
| Revenue reserves | 400,331 | –2,507 | 397,824 |
| Currency translation reserve | 6,593 | 4,997 | 11,590 |
| Equity attributable to the shareholders of Semperit AG Holding |
449,786 | 2,490 | 452,276 |
| Non-controlling interests | 2,531 | 0 | 2,531 |
| 452,317 | 2,490 | 454,807 | |
| Non-current provisions and liabilities | |||
| Provisions for pension and severance payments | 39,524 | –1,899 | 37,625 |
| Other provisions | 12,850 | 0 | 12,850 |
| Liabilities from redeemable non-controlling interests | 109,632 | –75,393 | 34,239 |
| Corporate Schuldschein loan | 126,632 | 0 | 126,632 |
| Other financial liabilities | 2,835 | 0 | 2,835 |
| Other liabilities | 534 | 0 | 534 |
| Deferred taxes | 6,557 | 3,037 | 9,594 |
| 298,564 | –74,256 | 224,309 | |
| Current provisions and liabilities | |||
| Provisions for pension and severance payments | 2,961 | 0 | 2,961 |
| Other provisions | 20,579 | –2,469 | 18,110 |
| Corporate Schuldschein loan | 539 | 0 | 539 |
| Liabilities to banks | 12,454 | 0 | 12,454 |
| Trade payables | 79,910 | 3,952 | 83,862 |
| Other financial liabilities | 19,341 | –872 | 18,469 |
| Other liabilities | 14,738 | –95 | 14,643 |
| Current tax liabilities | 5,769 | –994 | 4,775 |
| 156,291 | –478 | 155,814 | |
| EQUITY AND LIABILITIES | 907,173 | –72,243 | 834,929 |
The restated consolidated income statement as of 30 September 2014 is as follows:
| 1.1.- | 1.1.- 30.9.2014 |
1.7.- | 1.7.- 30.9.2014 |
|||
|---|---|---|---|---|---|---|
| in EUR thousand | 30.9.2014 | Restatement | restated | 30.9.2014 | Restatement | restated |
| Revenue | 698,308 | –42,404 | 655,903 | 234,013 | –21,681 | 212,332 |
| Changes in inventories | 3,208 | –15,500 | –12,292 | 2,703 | –1,111 | 1,592 |
| Own work capitalised | 906 | 0 | 906 | 246 | 0 | 246 |
| Operating revenue | 702,421 | –57,904 | 644,517 | 236,963 | –22,792 | 214,171 |
| Other operating income | 15,035 | –2,858 | 12,177 | 4,779 | –1,861 | 2,918 |
| Cost of material and purchased services | –382,034 | 21,875 | –360,159 | –130,726 | 3,017 | –127,709 |
| Personnel expenses | –125,042 | 11,070 | –113,972 | –41,246 | 5,537 | –35,709 |
| Other operating expenses | –109,368 | 11,907 | –97,461 | –37,340 | 6,588 | –30,753 |
| Share of profits from joint ventures and associated companies |
314 | 4,118 | 4,432 | 110 | 2,685 | 2,795 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) |
101,326 | –11,792 | 89,534 | 32,540 | –6,827 | 25,713 |
| Depreciation, amortisation and impairment of tangible and intangible assets |
–34,607 | 6,013 | –28,594 | –12,024 | 3,176 | –8,847 |
| Earnings before interest and tax (EBIT) | 66,719 | –5,779 | 60,939 | 20,516 | –3,650 | 16,866 |
| Financial income | 1,149 | –198 | 950 | 393 | –107 | 286 |
| Financial expenses | –3,710 | 0 | –3,710 | –1,251 | 0 | –1,252 |
| Profit/loss attributable to redeemable non controlling interests |
–12,785 | 5,492 | –7,293 | –4,673 | 3,101 | –1,572 |
| Financial result | –15,346 | 5,294 | –10,052 | –5,531 | 2,993 | –2,538 |
| Earnings before tax | 51,373 | –485 | 50,887 | 14,985 | –657 | 14,328 |
| Income taxes | –11,739 | –2,022 | –13,761 | –3,151 | 710 | –2,440 |
| Earnings after tax | 39,633 | –2,507 | 37,126 | 11,834 | 54 | 11,888 |
| thereof attributable to the shareholders of Semperit AG Holding |
39,714 | –2,507 | 37,207 | 11,857 | 54 | 11,911 |
| thereof attributable to non-controlling interests |
–81 | 0 | –81 | –23 | 0 | –23 |
| Earnings per share in EUR (diluted and undiluted)1) |
1.93 | –0.12 | 1.81 | 0.58 | 0.00 | 0.58 |
1) Attributable to the shareholders of Semperit AG Holding
The loss based on the change in the method of consolidation of SSC is shown in the consolidated income statement in other operating expenses. In the consolidated financial statements as if 31 December 2014 the excess resulting from the change of the method of consolidation was recognized in other operating income.
| in EUR thousand | 31.3.2014 restated |
31.12.2014 reported |
|---|---|---|
| Fair value of the investment in joint ventures recognised | 78,257 | 89,361 |
| Derecognised net assets as a result of the change in the method of consolidation |
–74,025 | –77,959 |
| Reclassification of the cumulated currency translation reserve from equity to the consolidated income statement |
–4,796 | 1,787 |
| Result of the change in the method of consolidation (non-cash) | –564 | 13,190 |
The difference compared to the excess resulting from the change in the method of consolidation determined in the consolidated financial statements as of 31 December 2014 results from a change of a parameter (WACC) for the determination of the fair value as of 31 March 2014 and from closing date related change of the currency translation reserve.
The consolidated financial statements include the financial statements of the parent company and the financial statements of the companies under its control, i.e. the subsidiaries of the parent. The group controls a company when it is exposed, or has rights, to variable returns from its involvement with the company and has the ability to affect those returns through its power over the company. The financial statements of subsidiaries are included in the consolidated financial statements from the time at which control begins until the time at which control ends.
On the assessment whether the definition of control within the meaning of IFRS 10 is met where the group's de facto shareholding in subsidiaries is either 50% or 41.43%, please refer to the consolidated financial statements as at 31 December 2014, note 3.1., page 149ff. In the first three quarters of 2015 there have been no material developments that would have led to a revised assessment of control within the meaning of IFRS 10.
The following new or amended standards and interpretations were applicable for the first time in the reporting period from 1 January until 30 September 2015:
| First-time adoption of standards and interpretations | Effective date1) | Endorsement | |
|---|---|---|---|
| New standards and interpretations | |||
| IFRIC 21 | Levies | 17.6.2014 | June 2014 |
| Amended standards and interpretations | |||
| Misc. | Improvements to IFRS 2011 to 2013 | 1.1.2015 | December 2014 |
1) According to the Official Journal of the EU, the standards are obligatory for financial years commencing on or after the effective date.
Both IFRIC 21 Levies and the annual improvements to IFRS (cycle 2011 to 2013) are not of relevance for the Semperit Group or do not have a material effect on the interim or annual consolidated financial statements.
In the third quarter of 2015 the newly established company Shanghai Changning Sempermed Glove Trading Co. Ltd., Shanghai, China, was included in the consolidated financial statements of the Semperit Group for the first time.
In the third quarter of 2015 Semperit Tekniska Produkter Aktiebolag, Skärholmen, Sweden, which has discontinued its business operations in 2014, was sold to a Swedish Liquidator.
In April 2015 the Semperit Group acquired a 100% interest in Leeser GmbH & Co. KG, Hückelhoven, Germany, and in Leeser Verwaltungsgesellschaft mbH, Hückelhoven, Germany (Leeser). Leeser GmbH & Co. KG has a 75% interest in Elastomer Technology Kmenta s.r.o., Husava, Czech Republic. Leeser specialises in foam rubber and co-extruded seals for aluminium windows and façades, and the two companies have been assigned to the Semperform segment.
The purchase price allocation pursuant to IFRS 3.45 has been classified as preliminary because the supplementary tax balance sheet and special balance sheet have not yet been finalised.
The preliminary purchase price allocation based on the fair values determined as at the date of acquisition is as follows:
| in EUR thousand | |
|---|---|
| Purchase price paid in cash | 18,216 |
| Purchase price not yet due | 200 |
| 18,416 | |
| Net assets | 21,621 |
| Badwill | –3,205 |
The preliminary fair values of the assets and liabilities of Leeser as at the date of acquisition are shown below:
| in EUR thousand | Fair value at acquisition date |
|---|---|
| Non-current assets | |
| Intangible assets | 5,697 |
| Tangible assets | 16,299 |
| 21,996 | |
| Current assets | |
| Inventories | 2,273 |
| Trade receivables | 3,252 |
| Other financial assets | 183 |
| Cash and cash equivalents | 742 |
| 6,450 | |
| Non-current provisions and liabilities | |
| Deferred taxes | 1,459 |
| Current provisions and liabilities | |
| Other provisions | 1,002 |
| Liabilities to banks | 2,048 |
| Trade payables | 1,421 |
| Other liabilities | 433 |
| Current tax liabilities | 462 |
| 5,366 | |
| Total net assets at their fair value | 21,621 |
| Badwill | –3,205 |
| Purchase price | 18,416 |
The purchase price was EUR 3,205 thousand below the fair value of the acquired net assets. In accordance with IFRS 3, this amount was recognised as a gain in other operating income.
The fair value of trade receivables, i.e. the expected total payments to be received, amounts to EUR 3,252 thousand, while the gross amount is EUR 3,267 thousand.
The measurement of intangible assets and tangible assets was based on appraisals made by renowned external experts.
The negative goodwill (badwill) that arose from the acquisition results from two factors. First, the purchase price was at the lower end of the valuation ranges, and second, the benefits expected to be capitalised from the technology resulted in the recognition of corresponding intangible assets.
Of the purchase price totalling EUR 18,416 thousand, EUR 18,216 thousand was paid in cash, and the remaining EUR 200 is payable in 2017. Transaction costs of EUR 788 thousand were incurred in connection with the acquisition of the company. These are included under other operating expenses.
Since the date of its acquisition, Leeser has contributed EUR 14.986 thousand to revenue and EUR 890 thousand to earnings before taxes. If the acquisition had taken place at the beginning of 2015, Leeser would have contributed EUR 27.272 thousand to revenue and EUR 1.557 thousand to earnings before tax.
In the first three quarters of 2015, Semperit Group acquired a 0.04% interest in Latexx Partners Berhad for EUR 59 thousand. As of 30 September 2015, the group's interest thus totalled 98.50%, up from 98.46% as of 31 December 2014. In the first three quarters of 2014, a 0.26% interest was acquired for EUR 351 thousand, which increased the group's interest to 98.37% as of 30 September 2014.
The transactions in the first three quarters of 2015 and in the first three quarters of 2014 were accounted for as equity transactions. For further information, please refer to the explanations on the principles and methods of consolidation in the consolidated financial statements as of 31 December 2014.
The investments in joint ventures and associated companies are comprised as follows:
| in EUR thousand | 30.9.2015 | 31.12.2014 restated1) |
|---|---|---|
| Joint ventures | ||
| Siam Sempermed Corp. Ltd., Hat Yai, Thailand | 92,878 | 81,154 |
| Associated companies | ||
| Synergy Health Allershausen GmbH, Allershausen, Germany | 2,001 | 1,682 |
| 94,879 | 82,835 |
1) 2014 values restated (see notes page 24ff. in this report).
The change in the investments in joint ventures and associated companies is as follows:
| 2014 | ||
|---|---|---|
| in EUR thousand | 2015 | restated1) |
| As at 1.1. | 82,835 | 1,419 |
| Addition due to change from the full consolidation approach to the equity | ||
| method | 0 | 78,257 |
| Proportionate period result and intercompany elimination results | 13,027 | 8,057 |
| Dividends | 0 | –11,451 |
| Currency translation | –984 | 6,603 |
| Revaluation of defined benefit obligation | 0 | –50 |
| As at 30.9. / 31.12. | 94,879 | 82,835 |
The consolidated carrying amount of the investment in Siam Sempermed Corp. Ltd. totalled EUR 92,878 thousand as of 30 September 2015 (31 December 2014: EUR 81,154 thousand). As of 30 September 2015, group companies had the following assets and liabilities against the joint venture, and their business relationships resulted in the following income and expenses during the first three quarters of 2015:
| in EUR thousand | 1.1.- 30.9.2015 |
1.1.- 30.9.2014 restated1) |
|---|---|---|
| Revenue | 1,305 | 1,845 |
| Other operating income | 365 | 117 |
| Cost of material and purchased services | 121,764 | 76,498 |
| Other operating expenses | 115 | 109 |
| 30.9.2015 | 31.12.2014 restated1) |
|
| Inventories | 20,463 | 23,513 |
| Trade receivables | 1,271 | 859 |
| Trade payables | 25,742 | 21,451 |
1) 2014 values restated (see notes page 24ff. in this report).
The consolidated carrying amount of the investment in Synergy Health Allershausen GmbH totalled EUR 2,001 thousand as of 30 September 2015 (31 December 2014: EUR 1,682 thousand). As of 30 September 2015, group companies had the following assets and liabilities against the associated company, and their business relationships resulted in the following income and expenses during the first three quarters of 2015:
| in EUR thousand | 1.1.- 30.9.2015 |
1.1.- 30.9.2014 restated1) |
|---|---|---|
| Other operating expenses | 282 | 337 |
| Financial income | 7 | 7 |
| 30.9.2015 | 31.12.2014 restated1) |
|
| Other financial assets | 566 | 566 |
| Trade payables | 35 | 92 |
| in EUR thousand | Sempermed | Semperflex | Sempertrans | Semperform | Corporate Center and Group eliminations |
Group |
|---|---|---|---|---|---|---|
| 1.1.-30.9.2015 | ||||||
| Revenue | 296,675 | 156,206 | 121,729 | 117,520 | 0 | 692,131 |
| EBITDA | 23,452 | 38,642 | 16,687 | 21,238 | –19,489 | 80,531 |
| EBIT = segment result | 14,368 | 32,698 | 14,255 | 17,680 | –19,925 | 59,075 |
| 1.1.-30.9.2014 restated1) |
||||||
| Revenue | 291,549 | 156,028 | 107,737 | 100,589 | 0 | 655,903 |
| EBITDA | 32,117 | 38,890 | 15,754 | 17,374 | –14,601 | 89,534 |
| EBIT = segment result | 19,723 | 30,377 | 12,641 | 13,041 | –14,841 | 60,939 |
1) 2014 values restated (see notes page 24ff. in this report).
The income and expenses of companies involved in production and distribution in more than one segment are subdivided and allocated to the appropriate segments accordingly so that no further eliminations are necessary. The Corporate Center consists of Semperit AG Holding, which is not involved in operating activities, and those portions of a management company in China and a service company in Singapore that are allocated to the Corporate Center. Internal charging and the allocation of Corporate Center costs have already been made to the segments as far as possible.
In the first three quarters of 2015, as in the first three quarters of the previous year, there were no impairments on either tangible or intangible assets.
In the first three quarters of 2015 the Semperit Group made investments in tangible and intangible assets totalling EUR 51,507 thousand (previous year: EUR 46,077 thousand). In contrast, tangible and intangible assets with a net carrying amount of EUR 249 thousand (previous year: EUR 476 thousand) were sold.
As of 30 September 2015 the group has contractual obligations to acquire tangible assets totalling EUR 27,069 thousand (31 December 2014: EUR 32,412 thousand). The decrease compared to the previous year is due to the completion of investment projects to expand production capacity.
The following tables show the carrying amounts of the individual financial assets and liabilities classified in accordance with the valuation categories stipulated in IAS 39.9.
| in EUR thousand | Valuation category IAS 39 | Carrying amount 30.9.2015 |
Carrying amount 31.12.2014 restated1) 112,965 |
|
|---|---|---|---|---|
| Trade receivables | Loans and receivables | 144,506 | ||
| Other financial assets | ||||
| Securities | Available-for-sale | 6,613 | 6,599 | |
| Loans to associated companies | Loans and receivables | 563 | 563 | |
| Other loans | Loans and receivables | 6 | 6 | |
| Derivative financial instruments | Held for trading | 4 | 2 | |
| Derivative financial instruments | Designated as a hedging instrument | 5,421 | 0 | |
| Other financial assets | Loans and receivables | 4,065 | 4,843 | |
| Cash and cash equivalents | ||||
| Cash on hand, cheques and cash deposits in banks | – | 103,003 | 115,574 |
1) 2014 values restated (see notes page 24ff. in this report).
| in EUR thousand | Valuation category IAS 39 | Carrying amount 30.9.2015 |
Carrying amount 31.12.2014 restated1) |
|---|---|---|---|
| Corporate Schuldschein loan | Liabilities at amortised cost | 133,219 | 127,950 |
| Liabilities from redeemable non-controlling interests | Liabilities at amortised cost | 43,239 | 37,303 |
| Trade payables | Liabilities at amortised cost | 91,590 | 80,829 |
| Liabilities to banks | Liabilities at amortised cost | 161,317 | 9,581 |
| Other financial liabilities | |||
| Derivative financial liabilities | Held for trading | 471 | 359 |
| Derivative financial liabilities | Designated as a hedging instrument | 153 | 1,640 |
| Liabilities from finance leases | Liabilities at amortised cost | 106 | 199 |
| Other financial liabilities | Liabilities at amortised cost | 17,482 | 15,884 |
The three levels in the fair value hierarchy are defined as follows:
In the first three quarters of 2015 there were no reclassifications of financial instruments between the above-mentioned levels.
Financial instruments at fair value include securities and derivative financial instruments.
| in EUR thousand | Valuation category IAS 39 | Fair value 30.9.2015 |
Fair value 31.12.2014 |
Level |
|---|---|---|---|---|
| Assets | ||||
| Securities | Available-for-sale | 6,613 | 6,599 | 1 |
| Derivative financial instruments | Held for trading | 4 | 2 | 2 |
| Derivative financial instruments | Designated as a hedging instrument |
5,421 | 0 | 2 |
| Liabilities | ||||
| Derivative financial liabilities | Held for trading | 471 | 359 | 2 |
| Derivative financial liabilities | Designated as a hedging instrument |
153 | 1,640 | 2 |
The fair values of available-for-sale securities are determined using publicly available prices.
The derivative financial instruments held for trading purposes are forward foreign exchange transactions. Their fair values are determined using generally accepted financial valuation models (e.g. determination of the present value of expected future cash flows based on current foreign exchange rates and yield curves).
The derivative financial instruments designated as hedges are interest rate swaps and a cross currency swap. Their fair value is determined using generally accepted financial valuation models, in which future cash flows are simulated using the yield curves published at the balance sheet date. In addition, the carrying amount is adjusted to take into account the credit risk of the respective counterparty. When doing so, positive exposures are measured considering the default risk of the counterparty, while negative exposures are measured considering the group's own default risk.
The fair values of all other financial assets and liabilities, except for the following items and liabilities from redeemable non-controlling interests, correspond to their carrying amount.
| in EUR thousand | Valuation category IAS 39 | Fair value 30.9.2015 |
Fair value 31.12.2014 |
Level |
|---|---|---|---|---|
| Liabilities | ||||
| Corporate Schuldschein loan | Liabilities at amortised cost | 143,721 | 141,227 | 3 |
| Liabilities from finance leases | Liabilities at amortised cost | 127 | 195 | 3 |
The fair value of the corporate Schuldschein loan was determined by discounting the contractual payment streams with current interest rates. The comparable interest rates as at the reporting date were derived from capital market yields with matching maturities and then adjusted for current risk and liquidity costs that are observable on the market. These comparable interest rates were derived based on management's assessment of the rating of the Semperit Group.
For existing fixed-interest finance lease liabilities, current third-party interest rates were queried and then compared with the contractually agreed interest rates. As a result, the difference between the carrying amount and the fair value shows the margin between the contractually agreed historical return and the return currently available on the market. The finance lease liabilities are shown under the item "Other financial liabilities."
For information on the valuation of liabilities from redeemable non-controlling interests, please refer to the explanations in the consolidated financial statements as of 31 December 2014. The calculation of the fair value would require a disproportionally high effort and is thus not disclosed in this report.
In July 2013, Semperit AG Holding issued a corporate Schuldschein loan totalling EUR 125 million. In the second quarter of 2014 and in the first quarter of 2015, additional corporate Schuldschein loans amounting to EUR 5 million with the same conditions as the 10-year fixed-interest tranche of the original corporate Schuldschein loan were issued to "Privatstiftung zur Förderung der Gesundheit von Beschäftigten der Semperit AG Holding" (in English: Private Foundation to Promote the Health of the Employees of Semperit AG Holding). This means that the total notional volume amounted to EUR 130 million. In June 2015 Semperit AG Holding redeemed the variable five- and seven-year tranches of the existing corporate Schuldschein loan. Semperit repaid in July 2015 the two variable tranches (notional volumes of EUR 36,500 thousand and EUR 35,500 thousand) of the corporate Schuldschein loan from 2013. At the same time in July 2015, Semperit AG Holding issued a new corporate Schuldschein loan for a total amount of EUR 75,000 thousand in order to take advantage of the decline in financing costs. This corporate Schuldschein loan has three fixed-interest tranches with durations of seven, ten and fifteen years. The average interest rate of the issue is 2.16%. The loan was placed primarily in Austria and Germany. The cash inflows were primarily used to repay the variable tranches of the corporate Schuldschein loan from July 2013.
In the first three quarters of 2015 the group paid interest totalling EUR 2,890 thousand. As of 30 September 2015, interest of EUR 619 thousand was accrued and reported as a current liability. The difference between the carrying amount (excluding interest (clean price) and the nominal amount is the transaction costs of the issue in July 2013, which are distributed rateably over the term of the corporate Schuldschein loan based on the effective interest method. Two interest rate swaps (hedged notional volume of EUR 30,240 thousand) were concluded as of October 2013 to hedge the variablerate tranches of the corporate Schuldschein loan. This involved converting a portion of the variableinterest tranches into fixed-interest payments. The interest rate swaps are accounted for as cash flow hedges in accordance with IAS 39. Based on the valuation in the first three quarters of 2015 the effective portion of the cash flow hedge totalling EUR 159 thousand (31 December 2014: EUR -1,460 thousand) was recognised in other comprehensive income and EUR 26 thousand were reclassified to the consolidated income statement. When the variable tranches of the corporate Schuldschein loan were redeemed in July 2015, the two interest rate swaps were liquidated as well. The release of the interest swaps led to a reclassification in June 2015 as of EUR 1,000 thousand from the cash flow hedge reserve to the consolidated income statement and the last payment for the two interest rate swaps in July 2015 resulted in a reclassification in the amount of EUR 209 thousand from the cash flow hedge reserve to the consolidated income statement. In total the cash flow hedge reserve resulting from the interest rate swaps changed by EUR 1,395 thousand to EUR 0 (31 December 2014: EUR –1,395 thousand).
In order to hedge Semperit's financing to a subsidiary company issued in Malaysian Ringgit, the Semperit AG Holding entered into a cross currency swap in April 2015. On the one hand the cross currency swap caused the variable refinancing to be converted into fixed interest rates, on the other hand the exchange rate of Euro and Malaysian Ringgit was fixed. According to IAS 39 the cross currency swap is classified as a cash flow hedge (regarding interest rate risk) and as a fair value hedge (regarding the exchange risk) too. In total, the derivative is accounted for as fair value. The initial valuation of the cross currency swap on the balance sheet date resulted in an expense of EUR 711 thousand. Based on the measurement as of 30 September 2015 the effective portion of the cash flow hedge in the amount of EUR 465 thousand was recognised in the first three quarters of 2015 in the other comprehensive income; of that amount EUR 404 thousand was reclassified from the cash flow hedge reserve to the consolidated income statement. As of 30 September 2015 the cash flow hedge reserve from the cross currency swap totals EUR 61 thousand (31 December 2014: EUR 0 thousand).
On 28 April 2015, the Annual General Meeting approved the payment of an increased ordinary dividend of EUR 1.10 per share for the financial year 2014 (previous year: EUR 0.90 per share) and a one-time special dividend of EUR 4.90 per share. A total of EUR 123,441 thousand was distributed on 8 May 2015 (previous year: EUR 24,688 thousand).
Semperit AG Holding has no treasury stock as of 30 September 2015.
There were no material changes in contingent liabilities since the last reporting date as at 31 December 2014.
Outstanding balances and transactions between Semperit AG Holding and its subsidiaries were eliminated in the course of consolidation and are not further discussed here.
B & C Semperit Holding GmbH is the direct majority shareholder of Semperit AG Holding, and B & C Privatstiftung is the dominant legal entity. B & C Holding Österreich GmbH is a shareholder holding an indirect majority stake, which draws up and publishes consolidated financial statements in which the Semperit Group is consolidated. Under IAS 24, B & C Privatstiftung and all its subsidiaries, joint ventures and associated companies are related parties of the Semperit Group.
Related parties of the Semperit Group include the members of the Management and Supervisory Board of Semperit AG Holding, the managing directors and Supervisory Board members of all companies which directly or indirectly hold a majority stake in Semperit AG Holding, and finally the members of the Management Board of B & C Privatstiftung and the close family members of these management and Management and Supervisory Board members and managing directors.
Business to a total value of EUR 569 thousand was conducted with unit-it GmbH (an indirect investment of B & C Industrieholding GmbH) in the first three quarters of 2015 (previous year: EUR 468 thousand). This related to the purchase and maintenance of SAP licences and was conducted at armslength conditions. As of the balance sheet date on 30 September 2015 there are no outstanding liabilities to the company (previous year: EUR 0 thousand).
For further information on business relationships with joint ventures and associated companies, please refer to the section "Investments in joint ventures and associated companies (equity method)" in this report.
The level of transactions remaining with other related parties is low, and they are conducted on normal business terms and conditions.
The fully consolidated company Semperflex Asia Corp. Ltd conducts business with the noncontrolling co-partner of these subsidiary, Sri Trang Agro-Industry Public Co Ltd.
In addition, Sempertrans Best (Shandong) Belting Co. Ltd. conducts business with Wang Chao Coal & Electricity Group, the non-controlling co-partner of this subsidiary.
On 28 April 2015, the Annual General Meeting reappointed Veit Sorger, Ingrid Wesseln and Walter Koppensteiner. In addition, Felix Strohbichler was newly appointed to the Supervisory Board. At the constituent meeting of the Supervisory Board that followed the Annual General Meeting, Veit Sorger was reappointed as the Chairman of the Supervisory Board, and Felix Strohbichler was elected as its new Deputy Chairman.
Among the members of the Supervisory Board appointed by the Works Council, Karl Voitl replaced Andreas Slama in March 2015.
Since 2014, the Semperit Group has been involved in several legal proceedings at Thai domestic courts and at international arbitration tribunals located in Zurich based on the rules of the International Chamber of Commerce (ICC). These litigations relate in particular to the competencies and internal organisation of the Board of Directors (BoD) being the management body of Siam Sempermed Corp. Ltd. (SSC), a joint venture in Thailand. They also involve the business conduct of SSC, SSC's business relationships with the Thai joint venture partner Sri Trang Agro-Industry Public Co Ltd. (Sri Trang) and its affiliates, and the exclusive distribution rights of the Semperit Group.
For further details on these the legal proceedings see the consolidated financial statements as at 31 December 2014, note 9., on page 204f.
At present, most of the legal proceedings are in their middle stages. The arbitration tribunals were constituted, and so called Case management conferences were held. Furthermore, Semperit prepared and submitted the detailed statements of claim and additional statements. In addition, hearings with witness statements have taken place.
Based on the current timetable, one of the arbitral tribunals and interim decisions for the other two proceedings are expected by the first half of 2016.
In January 2015, a director nominated by Sri Trang for the BoD of Sempermed USA Inc. (SUSA) issued a legal claim in Delaware, USA, against a resolution adopted by the BoD of SUSA based on a casting vote decision. The director sought an injunction against this decision. The request for an injunction was not granted by the competent court, and a hearing was ordered to deal with the lawsuit, scheduled for July 2015. In May 2015, the termination of the proceedings was agreed upon and the effectiveness of the right to cast the deciding vote was recognised. The statutes of SUSA were adapted accordingly.
In October 2015, the Austrian Competition Authority (BWB) commenced a claim against Semperit and the Sri Trang companies with the cartel court in Vienna. This claim arose from an application by the Sri Trang companies, who are joint venture partners with Semperit in SSC. The proceeding concerns exclusive distribution rights in Europe. There are several legal proceedings pending in the Thai courts. A director nominated by Sri Trang filed some claims against directors of the SSC nominated by Semperit and SSC itself. Semperit nominated directors have also filed claims against the directors nominated by Sri Trang. In one of these proceedings, a judge dismissed the claim of the Semperit directors in the first instance, an appeal has been filed and accepted by the Thai court of appeals. Semperit nominated directors of SSC commenced legal actions against two Sri Trang nominated directors. During the fourth quarter 2015, hearings will be held for the majority of these proceedings.
The Semperit Group continues to believe that its interpretation of the law will be confirmed in the legal proceedings. The costs for the proceedings initiated by Semperit are being expensed as incurred. Appropriate provisions have been set up for the expected costs of the proceedings in which Semperit is the defendant.
No significant events requiring disclosure occurred between 30 September 2015, the balance sheet date, and 13 November 2015, the date on which this report was approved for publication.
Vienna, 13 November 2015
The Management Board
Thomas Fahnemann Chairman of the Management Board
Johannes Schmidt-Schultes Chief Financial Officer
Richard Ehrenfeldner Chief Technical Officer
Declan Daly Chief Information Officer
We confirm to the best of our knowledge that the condensed interim consolidated financial statements as at 30 September 2015 prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and that the group management report gives a true and fair view of important events that have occurred during the first nine months of the financial year and their impact on the condensed interim financial statements, of the principal risks and uncertainties for the remaining three months of the financial year and of the major related party transactions to be disclosed.
Vienna, 13 November 2015
The Management Board
Thomas Fahnemann Chairman of the Management Board
Johannes Schmidt-Schultes Chief Financial Officer
Richard Ehrenfeldner Chief Technical Officer
Declan Daly Chief Information Officer
The 126th Annual General Meeting took place on 28 April 2015 in Vienna, Austria. All resolutions of this Annual General Meeting can be viewed at www.semperitgroup.com/ir under "annual general meeting". The Annual General Meeting approved the Management Board's proposal to distribute a total dividend of EUR 6.00 per share (increased ordinary dividend of EUR 1.10 plus a one-time special dividend of EUR 4.90). The dividend was paid on 8 May 2015, the ex-dividend day was 5 May 2015.
| Key figures | 1.1. - 30.9.2015 |
Change | 1.1. - 30.9.2014 restated1) |
|
|---|---|---|---|---|
| Share price as at the reporting date | in EUR | 27.13 | –25.7% | 36.50 |
| Lowest price | in EUR | 27.07 | –23.8% | 35.51 |
| Highest price | in EUR | 43.95 | –5.3% | 46.40 |
| Market capitalisation as at the reporting date | in EUR million |
558.2 | –25.7% | 750.9 |
| Number of shares issued | in units | 20.573.434 | – | 20.573.434 |
| Price-to-earnings ratio2) | 10.4 | –31.0% | 15.1 | |
| Earnings per share (EPS)3) | in EUR | 1.95 | +7.7% | 1.81 |
1) 2014 values restated (see notes page 24ff. in this report).
2) Based on a full-year projection
3) Attributable to the shareholders of Semperit AG Holding
Financial Calendar 2015
| 17.11.2015 | Report on the first three quarters of 2015 | ||
|---|---|---|---|
| Semperit AG Holding | |||
| Modecenterstrasse 22 | Financial Calendar 2016 | ||
| 1031 Vienna, Austria Tel.: +43 1 79 777 0 |
17.3.2016 | Publication of 2015 annual financial statements and press conference |
|
| Fax: +43 1 79 777 600 www.semperitgroup.com/en Investor Relations Tel.: +43 1 79 777 210 [email protected] www.semperitgroup.com/en/ir |
26.4.2016 | Annual General Meeting | |
| 2.5.2016 | Last day at which shares can be bought with dividend entitlement |
||
| 3.5.2016 | Ex-dividend day | ||
| 4.5.2016 | Record-Date Dividend (= day, on which settled positions are stuck at CSD Austria at close of business to determine the entitlement) |
||
| 6.5.2016 | Dividend payment day | ||
| 19.5.2016 | Report on the first quarter of 2016 | ||
| 18.8.2016 | Half-year financial report 2016 | ||
| 17.11.2016 | Report on the first three quarters of 2016 |
www.semperitgroup.com/en/contact
Ownership and publisher: Semperit Aktiengesellschaft Holding, Modecenterstrasse 22, 1031 Vienna, Austria Produced in-house with FIRE.sys.
In this report the terms "Semperit" or "Semperit Group" refers to the group; "Semperit AG Holding" or "Semperit Aktiengesellschaft Holding" is used to refer to the parent company (individual company).
This interim report of the Semperit Group has not been audited or reviewed by the group's auditor.
We have prepared this report and verified the information it contains with the greatest possible care. In spite of this, rounding, typesetting and printing errors cannot be ruled out. Rounding of differences in the totalling of rounded amounts and percentages may arise from the automatic processing of data.
The forecasts, plans and forward-looking statements contained in this report are based on the knowledge and information available and the assessments made at the time that this report was prepared (editorial deadline: 13 November 2015). As is true of all forward-looking statements, these statements are subject to risk and uncertainties. As a result, actual events may deviate significantly from these expectations. No liability whatsoever is assumed for the accuracy of projections or for the achievement of planned targets or for any other forward-looking statements.
All references to people are gender neutral.
This report has been produced in German and English. In case of doubt, the German version shall take precedence.
Photos: www.andreas-hofer-fotograf.at
www.semperitgroup.com/en
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