Earnings Release • Aug 20, 2014
Earnings Release
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| Earnings Data | 2014/15 Q1 | 2013/14 Q1 | +/- | 2013/14 | ||||
|---|---|---|---|---|---|---|---|---|
| Revenues | in million EUR | 118.0 | 121.4 | -3% | 487.0 | |||
| EBITDA | in million EUR | 4.8 | 7.7 | -38% | 36.9 | |||
| EBITDA margin | in % | 4.0 | 6.3 | 7.6 | ||||
| EBIT | in million EUR | 0.6 | 3.7 | -83% | 20.3 | |||
| EBIT margin | in % | 0.5 | 3.1 | 4.2 | ||||
| Profit before tax | in million EUR | 2.7 | -1.5 | — | 5.5 | |||
| Profit for the period | in million EUR | 0.3 | -1.0 | — | 2.9 | |||
| Earnings per share 1 | in EUR | -0.06 | -0.23 | 74% | -0.33 | |||
| Free cash flow 2 | in million EUR | 32.4 | -37.2 | — | -24.7 | |||
| Capital expenditure 3 | in million EUR | 1.1 | 4.5 | -76% | 15.7 | |||
| Employees 4 | 3,336 | 3,094 | 8% | 3,308 | ||||
| On-board units delivered | in million EUR | 1.57 | 2.33 | -33% | 9.22 | |||
| Business Segments | 2014/15 Q1 | 2013/14 Q1 | +/- | 2013/14 | ||||
| Road Solution Projects (RSP) | ||||||||
| Revenues (share in revenues) | in million EUR | 24.4 | (21%) | 36.5 | (30%) | -33% | 132.0 | (27%) |
| EBIT (EBIT margin) | in million EUR | -12.4 | (-50.9%) | -1.6 | (-4.3%) | <-500% | -34.6 | (-26.2%) |
| Services, System Extensions, Components Sales (SEC) | ||||||||
| Revenues (share in revenues) | in million EUR | 87.0 | (74%) | 80.8 | (67%) | 8% | 331.8 | (68%) |
| EBIT (EBIT margin) | in million EUR | 12.9 | (14.9%) | 5.1 | (6.4%) | 152% | 53.8 | (16.2%) |
| Others (OTH) | ||||||||
| Revenues (share in revenues) | in million EUR | 6.6 | (6%) | 4.1 | (3%) | 62% | 23.1 | (5%) |
| EBIT (EBIT margin) | in million EUR | 0.1 | (1.5%) | 0.1 | (3.4%) | -30% | 1.1 | (4.7%) |
| Regions | 2014/15 Q1 | 2013/14 Q1 | +/- | 2013/14 | ||||
| Austria 5 | in million EUR | 8.8 | (7%) | 7.3 | (6%) | 20% | 32.9 | (7%) |
| Europe 5 | in million EUR | 62.4 | (53%) | 74.0 | (61%) | -16% | 300.1 | (62%) |
| Americas 5 | in million EUR | 23.3 | (20%) | 15.8 | (13%) | 48% | 87.0 | (18%) |
| Rest of World5 | in million EUR | 23.5 | (20%) | 24.3 | (20%) | -3% | 67.0 | (14%) |
| Balance Sheet Data | 30 June 2014 | 30 June 2013 | +/- | 31 March 2014 | ||||
| Total assets | in million EUR | 554.2 | 567.4 | -2% | 566.8 | |||
| Total equity 6 | in million EUR | 205.7 | 217.1 | -5% | 213.1 | |||
| Equity ratio6 | in % | 37.1 | 38.3 | 37.6 | ||||
| Net debt | in million EUR | -67.2 | -85.3 | 21% | -93.4 | |||
| Capital employed | in million EUR | 355.4 | 368.1 | -3% | 369.2 | |||
| Net working capital | in million EUR | 179.4 | 274.8 | -35% | 205.4 | |||
| Stock Exchange Data | 2014/15 Q1 | 2013/14 Q1 | +/- | 2013/14 | ||||
| Number of shares 7 | in million EUR | 13.0 | 13.0 | 0% | 13.0 | |||
| Free float 7 | in % | 38.1 | 38.1 | 38.1 | ||||
| Ø daily trading volume 8 | in shares | 10,741 | 25,380 | -58% | 25,812 | |||
| Closing price 7 | in EUR | 33.90 | 36.98 | -8% | 39.99 | |||
| Market capitalization 7 | in million EUR | 440.70 | 480.74 | -8% | 519.87 |
Share performance in % -15.2 -0.11 8.0
1 Earnings per share relate to 13.0 million shares, calculated from the result for the
period attributable to the equity holders of the company 2 Operating cash flow minus capital expenditure from operations (excl.payments for
acquisition of companies and purchases of securities and investments) plus proceeds from the disposal of property, plant and equipment and intangible assets
3 Capital expenditure from operations (excl. payments for acquisition of companies and purchases of securities and investments)
4 Each Q1 as of 30 June, 2013/14 as of 31 March 2014
5 Revenues (share on total revenues in %); Europe excl. Austria
6 Incl. non-controlling interests
7 Each Q1 as of 30 June, 2013/14 as of 31 March 2014; please find additional information of shares at page 5
8 Average daily trading volume (double counting)
In the first quarter of fiscal year 2014/15, the Kapsch TrafficCom Group achieved good progress in its current installation projects and the revenue and earnings of our operation projects continued to remain largely stable. However, our overall earnings are still well below our expectations. In line with recent market developments, no invitations to tender for major toll projects are in the immediate vicinity, especially in Europe. During the period under report, we therefore began implementing a set of measures intended to adapt our organization to this change by reducing costs.
Projects and markets. Kapsch TrafficCom continued to enjoy positive developments in our projects during the first quarter of 2014/15. In North America, progress was made in installation of the toll system in Texas, the first own system we have integrated in this region. In July, we received a second system order in the U.S.A. for an electronic toll collection system on the New York State Thruway. This is the first system order that
Kapsch TrafficCom has received from a toll agency of the E-ZPass Group, and we therefore believe it represents great potential for the future.
The first expansion stage of the nationwide electronic toll collection system in Belarus has now been in operation for one year. At the beginning of August 2014, it was further increased to 1,189 km. The continued expansion will also lead to another rise in registered vehicles, which currently number 190,000.
The nationwide toll collection system in Poland has now been in operation for three years. With 2,653 kilometers of toll roads and 1.6 million on-board units (OBUs), it is now our largest toll collection system. By the year 2018, it should be expanded to 7,000km.
Our toll collection system in the South African Gauteng province went into operation at the beginning of December 2013. The payment rate remains very low but the system operation has reached the break-even
point in the meantime. However, the project in its entirety is still negative for Kapsch TrafficCom. We plan to work with the customer to improve the profitability.
The invitation to tender for the toll collection system in Russia has been postponed several times, most recently until 22 September. The realization of the project currently appears uncertain. Nevertheless, we cannot explain the decline in the share price in this context since the future of Kapsch TrafficCom does not depend on this project.
Asset, financial and earnings situation. Against this backdrop, Kapsch TrafficCom Group brought in revenue of EUR 118.0 million during the first quarter of fiscal year 2014/15, which represents a 3% decline compared with the same quarter of the previous year. The operating result (EBIT) fell from EUR 3.7 million to EUR 0.6 million. This weak result reflects the lack of additional installation projects. At the same time, we are investing in continued development and are sustaining high costs from the maintenance of international structures and resources. We will now significantly reduce these structures and resources while taking care not to endanger our project and technology potential. A view of the operation projects in isolation clearly shows positive development by the Kapsch TrafficCom Group.
We are pleased by the change in the profit for the period, which is again positive at EUR 0.3 million. The ongoing repayments from the financing agreement for the project in Belarus also led to a visible improvement in key financial figures. Accordingly, the net working capital and net debt decreased. The free cash flow is again positive at EUR 32.4 million following EUR -37.2 million in the previous year.
Strategy. We continue to expect that the market for intelligent transportation systems (ITS), in which we have established ourselves, will gain momentum. Nevertheless, the figures for the first quarter show that this predicted growth has not yet set in.
Kapsch TrafficCom can report positive results. In order to continue our growth strategy, however, we are targeting a two-digit EBIT margin, and we have long remained far from achieving this goal. We will hold to our strategy, but we believe that now is the time to significantly reduce our costs associated with maintaining complex structures and resources by means of a comprehensive series of measures.
We successfully realized cost savings already in the previous year, and we must now intensify this course. Our broad ITS portfolio and increasingly global orientation are key pillars of our strategy. The costs that have arisen from this growth will be reduced. We will also consider how many resources we can maintain for potential projects and which investments are actually necessary. We currently invest roughly EUR 40 million per year in our own customerindependent development projects and potential future projects.
At the same time, we feel it is important to develop our strategic path "from the highway into the city", our contribution to the future of smart cities, as well as to address the automotive industry with regard to future solutions.
The toll market is currently developing more slowly than expected. Hardly any major projects are pending despite the fact that these would be required for infrastructure development. We continue to expect that the market structure and composition will change.
From an operational perspective, we will concertedly continue our existing projects and we also expect expansions in existing systems as well as some new projects. We eagerly await the outcome of the invitation to tender in Russia. At the same time, we are actively contacting parties potentially interested in toll collection systems and expect this approach to also bear fruit.
Sincerely,
Georg Kapsch Chief Executive Officer
The Kapsch TrafficCom shares are listed on the Vienna Stock Exchange and included in the ATX Prime Index, the Austrian sustainability index VÖNIX and, since May 2013, in the new ATX Global Players index as well.
After the share price experienced high volatility in the previous fiscal year with an upward trend in the second half of the year, it has declined again in the first quarter of the 2014/15 fiscal year. On 30 June 2014, the Kapsch TrafficCom shares closed at EUR 33.90, 15% below the previous year's final price. With this performance, the shares deviated from broader
market developments; the comparison index ATX Prime lost only 2% during this quarter, while slight growth of 2% was seen internationally.
The number of shares remains unchanged at 13 million. KAPSCH-Group Beteiligungs GmbH holds 61.9% of the shares. Roughly 38.1% are in free float, of which according to the company's knowledge approximately 4.0% are held in managed funds by Schroders plc, its subsidiaries and affiliated companies. Based on the closing share price of EUR 33.90 on 30 June 2014, the market capitalization of Kapsch TrafficCom was EUR 440.7 million.
Share price development in the first quarter of fiscal year 2014/15 (Kapsch TrafficCom and ATX Prime Index)
The final price of the Kapsch TrafficCom shares and final value of the ATX Prime Index on 31 March 2014, both indexed to 100.
| Information on the Shares | Investor Relations Officer | Marcus Handl | |||
|---|---|---|---|---|---|
| Shareholders' Telephone | +43 50 811 1120 | ||||
| [email protected] | |||||
| Website | www.kapschtraffic.com | ||||
| Stock Exchange | Vienna, Prime Market | ||||
| ISIN | AT000KAPSCH9 | ||||
| Trading Symbol | KTCG | ||||
| Reuters | KTCG.VI | ||||
| Bloomberg | KTCG AV | ||||
| Financial Calendar | 01 September 2014 | Ordinary Shareholders' Meeting for Fiscal Year 2013/14 | |||
| 08 September 2014 | Deduction of dividends for Fiscal Year 2013/14 (ex-day) | ||||
| 15 September 2014 | First day of payment for Fiscal Year 2013/14 dividends | ||||
| 26 November 2014 | Interim financial report Fiscal Year 2014/15 Q2 | ||||
| 25 February 2015 | Interim financial report Fiscal Year 2014/15 Q3 | ||||
| 24 June 2015 | Results Fiscal Year 2014/15 |
In the first quarter of the current fiscal year 2014/15, the Kapsch TrafficCom Group took in revenue of EUR 118.0 million, which is 2.8% below the comparison value of the previous year (2013/14 Q1: EUR 121.4 million). While revenue in the segment Road Solution Projects (RSP) declined, increasing revenue was seen in the segment Services, System Extensions, Components Sales (SEC).
Revenues by segment in the first three months were as follows:
The number of on-board units sold was 1.57 million units (2013/14 Q1: 2.33 million). The decline resulted primarily from the initial delivery for the nationwide toll project in Belarus, which took place in the same period of the previous year. Lower sales figures were also observed in North America, although this is due only to postponements. Australia, in particular, saw an increase in the quantities sold.
¾ In the segment Others (OTH), revenue rose by 61.9% to reach EUR 6.6 million in the first quarter of 2014/15 (2013/14 Q1: EUR 4.1 million). This increase resulted from the production and deliveries for the GSM-R project of Kapsch CarrierCom. The revenue of the company KTC USA Inc. (formerly Transdyn, Inc.) also contributed positively to revenue development in this segment.
Overall, the Kapsch TrafficCom Group achieved an operating result (EBIT) of EUR 0.6 million in the first three months of the current fiscal year (2013/14 Q1: EUR 3.7 million). Operating results by segment were as follows:
The financial result improved from EUR -5.3 million in the comparison period of the previous year to EUR 1.9 million. The finance income increased as a result of higher as yet unrealized foreign exchange gains. With respect to the finance costs, there was a decline in the as yet unrealized foreign exchange losses.
The balance sheet total on 30 June 2014 of EUR 554.2 million was below the total at the end of the 2013/14 fiscal year (31 March 2014: EUR 566.8 million). The total equity of EUR 205.7 million was EUR 7.4 million below the comparison value of EUR 213.1 million. As a result, the equity ratio of the Kapsch TrafficCom Group declined from 37.6% on 31 March 2014 to 37.1% on 30 June 2014.
The most significant changes in assets involved the trade receivables and other current assets. These decreased by EUR 19.4 million due to payments received in the project business, resulting in an increase in cash and cash equivalents amounting to EUR 19.7 million to reach EUR 77.4 million. The other non-current assets also declined by EUR 5.0 million, largely due to the non-current portion of the receivables from the Belorussian installation project.
On the liabilities side of the balance sheet, the largest change occurred in the non-current financial liabilities with a decline of EUR 5.2 million. This is associated with the ongoing repayment of the financing for the installation of the nationwide electronic toll collection system in Belarus.
The net cash flow from operating activities was EUR 33.3 million after EUR -33.3 million in the comparison period of the previous year. This development was most heavily influenced by the decrease in the current and non-current receivables and assets. The cash flow from investment activities was determined in the first quarter by the purchase of physical assets and securities. The free cash flow was positive at EUR 32.4 million. The decrease in the current and non-current financial liabilities primarily due to project financing and the dividends paid out to minority shareholders of group companies led to a negative net cash flow from financing activities of EUR -13.3 million.
The cash and cash equivalents increased from EUR 57.7 million on 31 March 2014 to EUR 77.4 million on 30 June 2014. The decrease in the non-current financial liabilities and the increase in cash and cash equivalents reduced the net debt from EUR 93.4 million on 31 March 2014 to EUR 67.2 million on 30 June 2014.
Kapsch TrafficCom Condensed consolidated interim financial information as of 30 June 2014.*)
| All amounts in TEUR | Notes | 2014/15 Q1 | 2013/14 Q1 |
|---|---|---|---|
| Revenues | (4) | 117,970 | 121,384 |
| Other operating income | 3,068 | 3,903 | |
| Changes in finished and unfinished goods and work in progress | 2,218 | 7,014 | |
| Cost of materials and other production services | -58,593 | -66,591 | |
| Staff costs | -36,554 | -34,824 | |
| Amortization of intangible assets and depreciation of property, plant and equipment | -4,108 | -3,955 | |
| Other operating expenses | -23,357 | -23,213 | |
| Operating result | (4) | 643 | 3,718 |
| Finance income | 3,441 | 976 | |
| Finance costs | -1,535 | -6,248 | |
| Financial result | 1,906 | -5,272 | |
| Results from associates | 137 | 35 | |
| Result before income tax | 2,686 | -1,519 | |
| Income taxes | (12) | -2,404 | 527 |
| Result for the period | 282 | -992 | |
| Result attributable to: | |||
| Equity holders of the company | -755 | -2,976 | |
| Non-controlling interests | 1,037 | 1,985 | |
| 282 | -992 | ||
| Earnings per share from the result for the period attributable | |||
| to the equity holders of the company (in EUR) | -0.06 | -0.23 | |
| Other comprehensive income for the period: | |||
| Items subsequently reclassified to the result for the period: | |||
| Currency translation differences | -263 | -2,347 | |
| Currency translation differences from net investments in foreign operations | 298 | 0 | |
| Available-for-sale financial assets | -889 | -9,986 | |
| Income tax relating to items subsequently reclassified to the result for the period | -118 | -11 | |
| Total items subsequently reclassified to the result for the period | -972 | -12,344 | |
| Items subsequently not reclassified to the result for the period: | |||
| Remeasurements of liabilities from post-employment benefits | 0 | 0 | |
| Income tax relating to items subsequently not reclassified to the result for the period | 0 | 0 | |
| Total items subsequently not reclassified to the result for the period | 0 | 0 | |
| Other comprehensive income for the period net of tax | (13) | -972 | -12,344 |
| Total comprehensive income for the period | -691 | -13,336 | |
| Total comprehensive income attributable to: | |||
| Equity holders of the company | -1,740 | -14,596 | |
| Non-controlling interests | 1,050 | 1,261 | |
| -691 | -13,336 |
Earnings per share relate to 13.0 million shares.
The notes on the following pages form an integral part of this condensed interim financial information.
*) The condensed consolidated interim report has neither been audited nor been reviewed by an auditor.
| All amounts in TEUR | Notes | 30 June 2014 | 31 March 2014 |
|---|---|---|---|
| ASSE TS |
|||
| Non-current assets | |||
| Property, plant and equipment | (5) | 21,769 | 23,447 |
| Intangible assets | (5) | 88,406 | 89,567 |
| Interests in associates | (6) | 1,806 | 1,596 |
| Other non-current financial assets and investments | (7) | 27,709 | 28,506 |
| Other non-current assets | 66,065 | 71,113 | |
| Deferred tax assets | 20,717 | 22,110 | |
| 226,473 | 236,339 | ||
| Current assets | |||
| Inventories | 54,951 | 58,108 | |
| Trade receivables and other current assets | 190,304 | 209,721 | |
| Other current financial assets | (7) | 5,050 | 4,924 |
| Cash and cash equivalents | 77,417 | 57,731 | |
| 327,722 | 330,484 | ||
| Total assets | 554,194 | 566,823 | |
| EQUI TY |
|||
| Capital and reserves attributable to equity holders of the company | |||
| Share capital | (8) | 13,000 | 13,000 |
| Capital reserve | 117,509 | 117,509 | |
| Retained earnings and other reserves | 70,551 | 72,291 | |
| 201,060 | 202,800 | ||
| Non-controlling interests | 4,610 | 10,310 | |
| Total equity | 205,670 | 213,110 | |
| LIA BILITIES |
|||
| Non-current liabilities | |||
| Non-current financial liabilities | (9) | 104,276 | 109,494 |
| Liabilities from post-employment benefits to employees | (10) | 22,079 | 22,153 |
| Non-current provisions | (11) | 1,322 | 1,303 |
| Other non-current liabilities | 3,217 | 3,660 | |
| Deferred income tax liabilities | 10,111 | 10,778 | |
| 141,006 | 147,387 | ||
| Current liabilities | |||
| Trade payables | 70,909 | 67,388 | |
| Other liabilities and deferred income | 62,000 | 62,810 | |
| Current tax payables | 756 | 1,191 | |
| Current financial liabilities | (9) | 45,407 | 46,560 |
| Current provisions | (11) | 28,445 | 28,378 |
| 207,519 | 206,326 | ||
| Total liabilities | 348,525 | 353,713 | |
| Total equity and liabilities | 554,194 | 566,823 |
The notes on the following pages form an integral part of this interim financial information.
| Non | ||||||
|---|---|---|---|---|---|---|
| controlling | Total | |||||
| Attributable to equity holders of the company | interests | equity | ||||
| Consolidated | ||||||
| Share | Capital | Other | retained | |||
| capital | reserve | reserves | earnings | |||
| Carrying amount as of 31 March 2013 | 13,000 | 117,509 | -1,424 | 95,503 | 12,115 | 236,703 |
| Dividend for 2012/13 | 0 | -6,305 | -6,305 | |||
| Result for the period | -2,976 | 1,985 | -992 | |||
| Other comprehensive income for the period: | ||||||
| Currency translation differences | -1,623 | -724 | -2,347 | |||
| Fair value gains/losses on available-for-sale | ||||||
| financial assets | -9,997 | 0 | -9,997 | |||
| Carrying amount as of 30 June 2013 | 13,000 | 117,509 | -13,044 | 92,527 | 7,071 | 217,063 |
| Carrying amount as of 31 March 2014 | 13,000 | 117,509 | -13,713 | 86,004 | 10,310 | 213,110 |
| Dividend for 2013/14 | 0 | -6,750 | -6,750 | |||
| Result for the period | -755 | 1,037 | 282 | |||
| Other comprehensive income for the period: | ||||||
| Currency translation differences | -52 | 13 | -39 | |||
| Fair value gains/losses on available-for-sale | ||||||
| financial assets | -933 | 0 | -933 | |||
| Carrying amount as of 30 June 2014 | 13,000 | 117,509 | -14,698 | 85,249 | 4,610 | 205,670 |
The notes on the following pages form an integral part of this interim financial information.
| All amounts in TEUR | 2014/15 Q1 | 2013/14 Q1 |
|---|---|---|
| Cash flow from operating activities | ||
| Operating result | 643 | 3,718 |
| Adjustments for non-cash items and other reconciliations: | ||
| Depreciation and amortization | 4,108 | 3,955 |
| Increase/decrease in obligations for post-employment benefits | -73 | -76 |
| Increase/decrease in other non-current liabilities and provisions | -160 | -208 |
| Increase/decrease in other non-current receivables and assets | -1,578 | -13,418 |
| Increase/decrease in trade receivables (non-current) | 8,248 | -1,175 |
| Increase/decrease in trade payables (non-current) | -328 | -87 |
| Other (net) | 49 | -3,913 |
| 10,910 | -11,205 | |
| Changes in net current assets: | ||
| Increase/decrease in trade receivables and other assets | 19,745 | -18,917 |
| Increase/decrease in inventories | 3,157 | 2,676 |
| Increase/decrease in trade payables and other current payables | 1,700 | 648 |
| Increase/decrease in current provisions | 67 | -1,058 |
| 24,670 | -16,652 | |
| Cash flow from operations | 35,580 | -27,857 |
| Interest received | 445 | 393 |
| Interest payments | -1,207 | -1,600 |
| Net payments of income taxes | -1,473 | -4,208 |
| Net cash flow from operating activities | 33,345 | -33,271 |
| Cash flow from investing activities | ||
| Purchase of property, plant and equipment | -1,011 | -3,786 |
| Purchase of intangible assets | -57 | -750 |
| Purchase of securities and investments | -208 | 0 |
| Proceeds from the disposal of property, plant and equipment and intangible assets | 131 | 628 |
| Net cash flow from investing activities | -1,144 | -3,908 |
| Cash flow from financing activities | ||
| Dividends paid to minority shareholders of group companies | -6,750 | -6,305 |
| Increase in non-current financial liabilities | 45 | 23,876 |
| Decrease in non-current financial liabilities | -5,263 | 0 |
| Increase in current financial liabilities | 1,299 | 3,543 |
| Decrease in current financial liabilities | -2,600 | -347 |
| Net cash flow from financing activities | -13,269 | 20,768 |
| Net increase/decrease in cash and cash equivalents | 18,932 | -16,411 |
| Change in cash and cash equivalents | ||
| Cash and cash equivalents at beginning of period | 57,731 | 79,022 |
| Net increase/decrease in cash and cash equivalents | 18,932 | -16,411 |
| Exchange gains/losses on cash and cash equivalents | 307 | -1,474 |
| Cash and cash equivalents at end of period | 77,417 | 61,137 |
The notes on the following pages form an integral part of this interim financial information.
Kapsch TrafficCom Group is a provider of intelligent transportation systems (ITS).
The business activities of the Kapsch TrafficCom Group are subdivided into the following three segments: ¾Road Solution Projects (RSP)
The segment Road Solution Projects relates to the installation of ITS solutions.
The segment Services, System Extensions, Components Sales relates to the sale of services (maintenance and operation) and components in the area of ITS solutions.
The segment Others relates to non-core business activities conducted by Kapsch Components GmbH & Co KG. In this segment, engineering solutions, electronic manufacturing and logistics services are rendered to affiliated entities and third parties. Furthermore, the business of KTC USA Inc. (former Transdyn, Inc.) that is not relevant to the ITS business are allocated to this segment, including solutions, systems and services for operational monitoring of public transportation and environmental infrastructure.
This condensed interim financial information for the first quarter of the current fiscal year 2014/15 ended 30 June 2014 has been prepared in accordance with IAS 34 "Interim financial reporting". The interim condensed financial report should be read in conjunction with the annual financial statemtents for the year ended 31 March 2014.
For ease of presentation, amounts have been rounded and, unless indicated otherwise, are presented in thousand Euro (TEUR). However, calculations are done using exact amounts, including the digits not shown, which may lead to rounding differences.
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2014, as described in the annual financial statements for the year ended 31 March 2014.
In the condensed interim financial information for the first quarter of the current fiscal year 2014/15 the following new or amended IFRS and IFRIC have been adopted.
| Applicable to financial years beginning on or after |
|---|
| 1 January 2014 |
| 1 January 2014 |
| 1 January 2014 |
| 1 January 2014 |
| 1 January 2014 |
| 1 January 2014 |
| 1 January 2014 |
| Services, | ||||
|---|---|---|---|---|
| 2014/15 Q1 | Road Solution | System Extensions, | Consolidated | |
| All amounts in TEUR | Projects | Components Sales | Others | group |
| Revenues | 24,371 | 86,988 | 6,611 | 117,970 |
| Operating result | -12,394 | 12,939 | 98 | 643 |
| Services, | ||||
| 2013/14 Q1 | Road Solution | System Extensions, | Consolidated | |
| All amounts in TEUR | Projects | Components Sales | Others | group |
| Revenues | 36,508 | 80,792 | 4,084 | 121,384 |
| Operating result | -1,557 | 5,136 | 139 | 3,718 |
The following table contains all single external customers which contributed more than 10% to the total revenues of the period and additionally shows the information of the contributed operating segment.
| All amounts in TEUR | 2014/15 Q1 | 2013/14 Q1 | ||||
|---|---|---|---|---|---|---|
| Services, | Services, | |||||
| Road Solution | System Extensions, | Road Solution | System Extensions, | |||
| Revenues | Projects | Components Sales | Revenues | Projects | Components Sales | |
| Customer 1 | 19,426 | x | 22,669 | x | ||
| Customer 2 | 14,665 | x | 17,670 | x | ||
| Customer 3 | 14,568 | x | x | 17,256 | x | |
| Customer 4 | 9,538 | x | x | 17,161 | x | x |
| All amounts in TEUR | 30 June 2014 | 30 June 2013 |
|---|---|---|
| Carrying amount as of 31 March of prior year | 113,014 | 103,846 |
| Additions | 1,067 | 4,536 |
| Disposals | -129 | -626 |
| Depreciation, amortization, impairments and other movements | -4,108 | -3,955 |
| Currency translation differences | 331 | -971 |
| Carrying amount as of 30 June of fiscal year | 110,175 | 102,830 |
| All amounts in TEUR | 30 June 2014 | 30 June 2013 |
|---|---|---|
| Carrying amount as of 31 March of prior year | 1,596 | 1,694 |
| Currency translation differences | 73 | -87 |
| Additions from foundations and acquisitions | 0 | 0 |
| Disposals | 0 | 0 |
| Share in result | 137 | 35 |
| Carrying amount as of 30 June of fiscal year | 1,806 | 1,643 |
On 31 July 2012 the group acquired 33% of the shares in SIMEX, Integración de Sistemas, S.A.P.I. de C.V., Mexico. Taking potential voting rights into account (options for purchase of the remaining shares) the group has the majority of the shares. As the potential voting rights are not assessed to be substantial the presumption of control was rebutted. As significant influence over the financial and business policies exists, the investment is accounted for using the equity method.
| 30 June 2014 | 31 March 2014 | 30 June 2013 | 31 March 2013 | |
|---|---|---|---|---|
| Other non-current financial assets and investments | 27,709 | 28,506 | 25,693 | 38,085 |
| Other current financial assets | 5,050 | 4,924 | 4,575 | 4,505 |
| 32,759 | 33,430 | 30,268 | 42,590 | |
| Available | Available | Other | ||
| Other non-current financial assets and investments | for-sale | for-sale | non-current | |
| 2014/15 Q1 | securities | investments | financial assets | Total |
| Carrying amount as of 31 March 2014 | 3,655 | 23,758 | 1,093 | 28,506 |
| Currency translation differences | 0 | 0 | 10 | 10 |
| Additions | 0 | 208 | 0 | 208 |
| Disposals | 0 | 0 | 0 | 0 |
| Change in fair value | 49 | -1,064 | 0 | -1,015 |
| Carrying amount as of 30 June 2014 | 3,704 | 22,902 | 1,103 | 27,709 |
| Available | Available | Other | ||
| Other non-current financial assets and investments | for-sale | for-sale | non-current | |
| 2013/14 Q1 | securities | investments | financial assets | Total |
| Carrying amount as of 31 March 2013 | 3,684 | 32,008 | 2,394 | 38,085 |
| Currency translation differences | 0 | 0 | -60 | -60 |
| Additions | 0 | 0 | 0 | 0 |
| Disposals | 0 | 0 | -2,277 | -2,277 |
| Available | |||
|---|---|---|---|
| Other current financial assets | for-sale | Other current | |
| 2014/15 Q1 | securities | financial assets | Total |
| Carrying amount as of 31 March 2014 | 4,924 | 0 | 4,924 |
| Currency translation differences | 0 | 0 | 0 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 126 | 0 | 126 |
| Carrying amount as of 30 June 2014 | 5,050 | 0 | 5,050 |
Change in fair value -27 -10,029 0 -10,056 Carrying amount as of 30 June 2013 3,657 21,979 57 25,693
| Available | |||
|---|---|---|---|
| Other current financial assets | for-sale | Other current | |
| 2013/14 Q1 | securities | financial assets | Total |
| Carrying amount as of 31 March 2013 | 4,505 | 0 | 4,505 |
| Currency translation differences | 0 | 0 | 0 |
| Additions | 0 | 0 | 0 |
| Disposals | 0 | 0 | 0 |
| Change in fair value | 70 | 0 | 70 |
| Carrying amount as of 30 June 2013 | 4,575 | 0 | 4,575 |
As of 30 June 2014, available-for-sale securities relate to government and bank bonds as well as shares in investment funds. As of 30 June 2014, investments classified as available-for-sale mainly relate to a 19.70% investment in the listed company Q-Free ASA, Trondheim, Norway.
Unrealized gains and losses are recognized in other comprehensive income of the period (see note 13).
Other non-current financial assets relate to a loan from SIMEX, Integración de Sistemas, S.A.P.I. de C.V., Mexico, to the group in the first quarter of fiscal year 2014/15 (2013/14 Q1: TEUR 0). In the first quarter of fiscal year 2013/14 the other non-current financial assets related to a fixed-term investment.
Financial assets and liabilities have to be classified in one of the three following fair value-hierarchies:
Level 1. There are quoted prices in active markets for identical assets and liabilities. In the group, the investment in Q-Free ASA, Trondheim, Norway, as well as listed equity instruments are attributed to Level 1.
Level 2. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques based on observable direct or indirect market data. This category comprises availablefor-sale securities, such as government and other bonds, which are quoted, however not regularly traded on a stock market.
Level 3. Financial instruments are included in level 3 if the valuation information is not based on observable market data.
The classification of current and non-current financial assets is as follows:
| Level 3 | ||||
|---|---|---|---|---|
| Level 2 | Not based on | |||
| Level 1 | Observable | observable | ||
| Quoted prices | market data | market data | 2014/15 Q1 | |
| Non-current financial assets | ||||
| Available-for-sale securities | 2,958 | 746 | 0 | 3,704 |
| Available-for-sale investments | 22,897 | 0 | 0 | 22,897 |
| 25,855 | 746 | 0 | 26,601 | |
| Current financial assets | ||||
| Available-for-sale securities | 5,050 | 0 | 0 | 5,050 |
| 5,050 | 0 | 0 | 5,050 | |
| Total | 30,905 | 746 | 0 | 31,651 |
As of 30 June 2014, other non-current financial assets amounting to TEUR 1,108 are recognized at amortized cost.
| Level 3 | ||||
|---|---|---|---|---|
| Level 2 | Not based on | |||
| Level 1 | Observable | observable | ||
| Quoted prices | market data | market data | 2013/14 Q1 | |
| Non-current financial assets | ||||
| Available-for-sale securities | 2,911 | 746 | 0 | 3,657 |
| Available-for-sale investments | 21,974 | 0 | 0 | 21,974 |
| 24,885 | 746 | 0 | 25,631 | |
| Current financial assets | ||||
| Available-for-sale securities | 4,575 | 0 | 0 | 4,575 |
| 4,575 | 0 | 0 | 4,575 | |
| Total | 29,460 | 746 | 0 | 30,206 |
As of 30 June 2013, other non-current financial assets amounting to TEUR 62 are recognized at amortized cost.
The registered share capital of the company amounts to EUR 13,000,000. The share capital is fully paid in. The total number of ordinary shares issued is 13,000,000. The shares are ordinary bearer shares and have no par value.
| All amounts in TEUR | 30 June 2014 | 31 March 2014 | 30 June 2013 | 31 March 2013 |
|---|---|---|---|---|
| Non-current financial liabilities | 104,276 | 109,494 | 125,332 | 104,372 |
| Current financial liabilities | 45,407 | 46,560 | 25,720 | 19,658 |
| Total | 149,683 | 156,054 | 151,052 | 124,030 |
Movements in borrowings are analyzed as follows:
| Non-current | Current | ||
|---|---|---|---|
| financial | financial | ||
| All amounts in TEUR | liabilities | liabilities | Total |
| Carrying amount as of 31 March 2014 | 109,494 | 46,560 | 156,054 |
| Additions | 45 | 1,299 | 1,344 |
| Repayments of borrowings | -5,263 | -2,600 | -7,863 |
| Reclassification | 0 | 0 | 0 |
| Currency translation differences | 0 | 149 | 149 |
| Carrying amount as of 30 June 2014 | 104,276 | 45,407 | 149,683 |
| Non-current | Current |
| financial | financial | ||
|---|---|---|---|
| All amounts in TEUR | liabilities | liabilities | Total |
| Carrying amount as of 31 March 2013 | 104,372 | 19,658 | 124,030 |
| Additions | 23,876 | 3,543 | 27,419 |
| Repayments of borrowings | 0 | -347 | -347 |
| Reclassification | -2,917 | 2,917 | 0 |
| Currency translation differences | 0 | -50 | -50 |
| Carrying amount as of 30 June 2013 | 125,332 | 25,720 | 151,052 |
The fair values and the gross cash flows (including interests) of current and non-current financial liabilities are as follows:
| 30 June 2014 | 30 June 2013 | |
|---|---|---|
| Carrying amount | 149,683 | 151,052 |
| Fair value | 155,703 | 154,211 |
| Gross cash flows: | ||
| Up to 1 year | 47,037 | 27,449 |
| Between 1 and 3 years | 31,536 | 38,891 |
| Between 3 and 5 years | 74,346 | 88,880 |
| 152,919 | 155,220 |
| Level 2: Observable | Level 3: Not based on | |||
|---|---|---|---|---|
| Level 1: Quoted prices | market data | observable market data | 2014/15 Q1 | |
| Corporate bond | 79,388 | 0 | 0 | 79,388 |
| Other financial liabilities | 0 | 76,315 | 0 | 76,315 |
| Total | 79,388 | 76,315 | 0 | 155,703 |
| Level 2 Observable | Level 3 Not based on | |||
|---|---|---|---|---|
| Level 1: Quoted prices | market data | observable market data | 2013/14 Q1 | |
| Corporate bond | 77,700 | 0 | 0 | 77,700 |
| Other financial liabilities | 0 | 76,511 | 0 | 76,511 |
| Total | 77,700 | 76,511 | 0 | 154,211 |
The fair value of the other financial liabilities (level 2) was derived through discounting the gross cash flows over the contracted term at a risk-adjusted interest rate.
| All amounts in TEUR | 30 June 2014 | 31 March 2014 | 30 June 2013 | 31 March 2013 |
|---|---|---|---|---|
| Termination benefits | 8,742 | 8,790 | 9,175 | 9,064 |
| Pension benefits | 13,337 | 13,363 | 13,350 | 13,537 |
| Total | 22,079 | 22,153 | 22,526 | 22,602 |
Termination benefits include legal and contractual entitlements to one-off payments to employees of the group which result from events such as dismissal by the employer, amicable termination of the employment, retirement or death of the employee. For termination benefits the group bears the risk of inflation due to compensation increases. The obligations from termination benefits mainly result from the Austrian entities of the group.
Liabilities for retirement benefits recognized at the balance sheet date relate to retirees only. All pension agreements are based on the final salary, are granted as fixed monthly pension payments and are not covered by external plan assets (funds). In addition, contributions are paid to an external pension fund for employees of the group. For retirement benefits the group bears the risk of longevity and inflation due to pension increases.
| All amounts in TEUR | 30 June 2014 | 31 March 2014 | 30 June 2013 | 31 March 2013 |
|---|---|---|---|---|
| Non-current provisions | 1,322 | 1,303 | 1,357 | 1,370 |
| Current provisions | 28,445 | 28,378 | 27,175 | 28,233 |
| Total | 29,767 | 29,680 | 28,532 | 29,603 |
| Currency | ||||||
|---|---|---|---|---|---|---|
| 2014/15 Q1 | translation | |||||
| All amounts in TEUR | 31 March 2014 | Addition | Utilization | Disposal | differences | 30 June 2014 |
| Obligations from anniversary bonuses | 1,120 | 19 | 0 | -7 | 0 | 1,132 |
| Other | 183 | 10 | 0 | 0 | -2 | 190 |
| Non-current provisions, total | 1,303 | 29 | 0 | -7 | -2 | 1,322 |
| Warranties | 1,637 | 6 | -29 | 0 | -8 | 1,606 |
| Losses from pending transactions and rework | 16,201 | 0 | 0 | 0 | 59 | 16,260 |
| Legal fees, costs of litigation and contract risks | 4,071 | 17 | -50 | 0 | 14 | 4,051 |
| Other | 6,468 | 924 | -883 | -2 | 21 | 6,528 |
| Current provisions, total | 28,378 | 946 | -961 | -2 | 85 | 28,445 |
| Total | 29,680 | 975 | -961 | -10 | 83 | 29,767 |
| Currency | ||||||
|---|---|---|---|---|---|---|
| 2013/14 Q1 | translation | |||||
| All amounts in TEUR | 31 March 2013 | Addition | Utilization | Disposal | differences | 30 June 2013 |
| Obligations from anniversary bonuses | 1,182 | 4 | 0 | -8 | 0 | 1,178 |
| Other | 188 | 0 | 0 | 0 | -10 | 179 |
| Non-current provisions, total | 1,370 | 4 | 0 | -8 | -10 | 1,357 |
| Warranties | 1,910 | 90 | 0 | -1 | -62 | 1,937 |
| Losses from pending transactions and rework | 18,514 | 0 | 0 | 0 | -670 | 17,844 |
| Legal fees, costs of litigation and contract risks | 2,524 | 46 | -70 | -2 | -81 | 2,417 |
| Other | 5,286 | 618 | -712 | -77 | -139 | 4,977 |
| Current provisions, total | 28,233 | 755 | -782 | -80 | -951 | 27,175 |
| Total | 29,603 | 759 | -782 | -88 | -961 | 28,532 |
Income taxes relate to current taxes and to deferred tax assets and deferred tax liabilities. Applying the Austrian corporate tax rate of 25% to the Group's pre-tax result gives rise to the theoretical value for the tax expense/ income. The effective tax expense/income differs from the above due to, among others, different tax regimes in the various countries, the treatment of tax losses, tax allowances and permanent differences.
| 2014/15 Q1 | Tax expense/ | |||
|---|---|---|---|---|
| All amounts in TEUR | Before taxes | income | After taxes | |
| Fair value gains/losses on available-for-sale financial assets: | ||||
| Unrealized gains/losses in the current period | -889 | -44 | -933 | |
| Currency translation differences | -263 | -263 | ||
| Currency translation differences from net investments | ||||
| in foreign operations | 298 | -74 | 223 | |
| Fair value changes recognized in equity | -854 | -118 | -972 |
The fair value gains/losses not realized amounting to TEUR -1,064 relate to the investment in Q-Free ASA, Norway (2013/14 Q1: TEUR -10,029).
| 2013/14 Q1 | Tax expense/ | ||
|---|---|---|---|
| All amounts in TEUR | Before taxes | income | After taxes |
| Fair value gains/losses on available-for-sale financial assets: | |||
| Unrealized gains/losses in the current period | -9,986 | -11 | -9,997 |
| Currency translation differences | -2,347 | -2,347 | |
| Fair value changes recognized in equity | -12,333 | -11 | -12,344 |
The group's contingent liabilities primarily result from large-scale projects. Other commitments mainly relate to contract and warranty bonds, bank guarantees, performance and bid bonds and sureties.
Details for contingent liabilities and other commitments are as follows:
| All amounts in TEUR | 30 June 2014 | 31 March 2014 |
|---|---|---|
| Contract, warranty, performance and bid bonds | ||
| Toll collection system South Africa, Gauteng | 79,573 | 79,161 |
| Toll collection system North America | 59,599 | 62,284 |
| Truck toll collection system Austria | 8,500 | 8,500 |
| Toll collection system Poland | 7,111 | 7,115 |
| City Highway Sydney and Melbourne | 6,521 | 6,439 |
| Truck toll collection system Czech Republic | 1,689 | 1,448 |
| Toll collection system Portugal | 573 | 573 |
| Other | 1,871 | 2,009 |
| 165,438 | 167,530 | |
| Bank guarantees | 1,522 | 1,774 |
| Sureties | 62 | 62 |
| Total | 167,021 | 169,365 |
The following transactions were performed with related parties:
| All amounts in TEUR | 2014/15 Q1 | 2013/14 Q1 |
|---|---|---|
| Affiliated companies outside the Kapsch TrafficCom Group | ||
| Revenues | 5,045 | 3,423 |
| Expenses | 6,389 | 5,834 |
| Other related parties | ||
| Revenues | 0 | 37 |
| Expenses | 239 | 304 |
| All amounts in TEUR | 30 June 2014 | 30 June 2013 |
| Affiliated companies outside the Kapsch TrafficCom Group | ||
| Trade receivables and other current assets | 5,381 | 3,226 |
| Trade payables and other liabilities | 12,054 | 8,312 |
| Other related parties | ||
| Trade receivables and other current assets | 127 | 108 |
| Trade payables and other liabilities | 11,794 | 11,450 |
The members of the executive and supervisory boards have management functions or are members in supervisory boards of other companies of the Kapsch Group.
No material events have occurred after balance sheet date.
Vienna, 20 August 2014
The Managing Board
Georg Kapsch Chief Executive Officer
André Laux Executive board member
Disclaimer. Certain statements contained in this report constitute "forward-looking statements." These statements, which contain the words "believe", "intend", "expect" and words of similar meaning, reflect management's beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. As a result, readers are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to publicly announce the result of any revisions to the forward-looking statements made herein, except where it would be required to do so under applicable law. Slight differences in calculations may arise due to the rounding of individual items and percentages. The English translation is for convenience; only the German text is binding.
Kapsch TrafficCom is a provider of intelligent transportation systems (ITS) in the application fields of road user charging, urban access and parking, road safety enforcement, commercial vehicle operations, electronic vehicle registration, traffic management and V2X cooperative systems. Kapsch TrafficCom covers with end-to-end solutions the entire value creation chain of its customers as a one-stop shop, from components and design to the installation and operation of systems. The solutions of Kapsch TrafficCom help to finance infrastructure, to increase traffic safety, to optimize traffic flow, and to reduce environmental pollution from traffic. The core business is to design, build and operate electronic toll collection systems for multi-lane free flow traffic. References in 44 countries on all continents make Kapsch TrafficCom a recognized supplier of electronic toll collection worldwide. As part of the Kapsch Group, a family-owned Austrian technology group founded in 1892, Kapsch TrafficCom, headquartered in Vienna, Austria, has subsidiaries and representative offices in 33 countries, has been listed on the Vienna Stock Exchange (KTCG) since 2007, and generated with more than 3,300 employees revenues of EUR 487.0 million in fiscal year 2013/14. For additional information: www.kapsch.net and www.kapschtraffic.com
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