Earnings Release • Nov 22, 2007
Earnings Release
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Corporate | 22 November 2007 07:35
ARQUES shows dynamic increase in earnings in third quarter
ARQUES Industries AG / Quarter Results
Release of a Corporate News, transmitted by DGAP - a company of EquityStory
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The issuer / publisher is solely responsible for the content of this announcement.
ARQUES shows dynamic increase in earnings in third quarter
Starnberg, November 22, 2007 - ARQUES Industries AG (ISIN DE0005156004)
increased its revenues in the first nine months of the financial year 2007
compared to the same period last year by 86% to EUR 931 million and the
earnings (EBITDA) by 76% to EUR 149 million. The earnings per share
increased by 48% to EUR 3.95. The strong growth of the ARQUES group has
continued to accelerate in the third quarter.
In the current financial year ARQUES has already taken over 15 companies
with annualised revenues totalling approximately EUR 4.5 billion. In
addition, more and more companies are seeking a business partner regarding
spin-offs of problematic subsidiaries or non-core activities, which leads
to stronger business dynamics at ARQUES. ARQUES profits from the sellers’
positive experiences with ARQUES, from the improved reputation through the
admission in the MDAX, and the related increased visibility of the business
model. In the fourth quarter 2007 ARQUES has also continued its strong
expansion and took over the telecommunications distributor, NT plus, as
well as the Northern European activities of the IT distributor, Actebis,
with revenues totalling more than EUR 950 million. With these transactions,
the annualised ARQUES group revenues reached a new record high of more than
EUR 5 billion. In addition, further transactions are expected on the
purchase side by the end of the year and, depending on the speed of the
contract negotiations, possibly on the exit side as well.
Results up by 188% in third quarter
As predicted exit proceeds increasingly contribute to profit, although only
part of the payments from the transactions can be shown as profit. Thus the
sales of the shareholdings in SKW Stahl-Metallurgie, SKS Stakusit and
teutonia contributed approximately EUR 60 million to the operational profit
although these sales brought in EUR 111 million. This is due to the fact
that ARQUES typically acquires loan receivables against the subsidiaries
when purchasing the company. When selling a company these loans are first
erased and not booked as proceeds from company sales. Furthermore the
proceeds from the initial consolidation (so-called bargain purchase yields)
booked at the time of the acquisition are subtracted from the profit when
selling the company.
In the third quarter group revenues increased by around 70% to EUR 302
million. The EBITDA increased by 188% to more than EUR 98 million among
other things owing to the sales of the remaining shareholdings in SKW and
SKS. The EBIT improved from EUR 68 million to EUR 121 million. After taxes
and third party shares, earnings increased by approximately two thirds to
approximately EUR 106 million.
'The course of the third quarter has shown that the ARQUES business model
is as sound as a bell. All signs indicate that 2008 will be another record
year since all three pillars of the business (acquisition, operations and
exit) are running well', said Dr. Martin Vorderwülbecke, chairman of the
ARQUES Industries AG executive board. ARQUES sees no problems particularly
for exits due to the present weakness of the private equity industry since
ARQUES has never sold a company to private equity and the business model is
designed for sales to strategists.
Cash flow and balance sheet structure show strong growth and exit successes
The balance sheet structure as well as the cash flow development are
affected by the increased number of subsidiaries, the dividend payment, the
capital increase executed in June, as well as the exit activities during
the year. Due to the numerous new acquisitions the balance sheet total thus
rose by 111% to EUR 1,406 million after nine months compared to EUR 665
million at the end of 2006. Shareholders’ equity rose by almost EUR 100
million whereby the equity ratio now stands at 26.5% due to the strongly
risen total assets (year end 2006: 41.3%). The total of the company values
of all subsidiaries ('Net Asset Values') rose from EUR 310.5 million at the
end of 2006 to EUR 705.4 million. The net cash flow of EUR -62.3 million is
significantly affected by investments in the working capital of the
subsidiaries. The free cash flow at EUR 13.2 million is significantly above
that of the previous year (EUR -6.0 million). Regarding earnings, the cash
and cash equivalents in the group increased by EUR 100 million to EUR 192
million compared to the year end 2006.
Increase in guidance for 2008
Due to the positive development after three quarters, ARQUES Industries AG
affirms its prognosis for the current financial year as increased in August
(revenues: EUR 2 billion, EBITDA: EUR 200 million) and raises the expected
revenues for 2008 by a further one billion Euro. ARQUES is expecting group
revenues of EUR 6.1 billion for 2008 and earnings before interest, taxes,
depreciation and amortisation (EBITDA) of EUR 275 million.
In accordance with the business model, ARQUES’ core expertise lies in the
safe execution of difficult company split-offs and in the sustained
restructuring of reorganisation cases; accordingly ARQUES is the leading
European turnaround specialist and not a financial holding. Through the
consistent implementation of this business concept, ARQUES further reduced
its shareholding in the stock exchange listed companies, SKW Stahl
Metallurgie and ARQUANA International Print & Media AG. In the third
quarter the remaining SKW shares were sold whereby ARQUES is no longer a
shareholder in SKW. The shareholding in the paper and printing segments was
either sold outright (Salto Paper) or strongly reduced (ARQUANA). ARQUES
retains the well running companies, Farbendruck Weber and Wanfried Druck
Kalden. As a precaution, bad debt provisions were made in the third quarter
for the receivables on the part of ARQUANA. Divesting of these activities
debited the earnings by more than EUR 30 million in the reporting period.
On the balance sheet, the takeover of the computer distributor, Actebis,
was executed by the end of the third quarter. The revenues from this
segment are to be booked as of the fourth quarter. The purchases supported
by the Actebis management were realised faster than expected in the fourth
quarter, whereby the IT segment will be completely realigned as of January
2008 both regionally (Germany, France, Austria, the Netherlands and the
Scandinavian countries) as well as regarding the product range (by
inclusion of telecommunications products). This segment is free from debt,
growing and profitable from the outset. Owing to the takeover of NT plus
and the Northern European Actebis national subsidiaries in the fourth
quarter, trade revenues from IT and telecommunications products increased
to an annualised total of significantly more than EUR 3.5 billion.
Preparations for the initial public offer planned for 2008 are going
according to plan.
You can find the complete quarterly report under www.arques.de
About ARQUES
ARQUES Industries AG, Starnberg, (www.arques.de), is a business partner of
conglomerates regarding company spin-offs and a turnaround specialist who
focuses on the acquisition and the active restructuring of companies in
transitional situations, in order to develop these, with its own team and
own resources, to competitive enterprises with a positive yield. ARQUES
revitalises its subsidiaries' potential for creating value for the benefit
of all its stakeholders, taking on the relevant social responsibility. The
shares of ARQUES Industries AG are traded in the regulated market (Prime
Standard) of the Frankfurt Stock Exchange under the symbol 'AQU' (ISIN:
DE0005156004) and are listed in the MDAX as of October 1, 2007.
Contact
ARQUES Industries AG
Investor Relations & Corporate Communication
Anke Lüdemann, CEFA/CIIA
Email: [email protected]
Christian Schneider
Email: [email protected]
Tel.: +49 (0) 8151 /651 0
22.11.2007 Financial News transmitted by DGAP
Language: English
Issuer: ARQUES Industries AG
Münchner Str. 15a
82319 Starnberg
Deutschland
Phone: +49 (0)8151 651-0
Fax: +49 (0)8151 651- 500
E-mail: [email protected]
Internet: www.arques.de
ISIN: DE0005156004
WKN: 515600
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hamburg, Düsseldorf, München, Stuttgart
End of News DGAP News-Service
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