Quarterly Report • Nov 13, 2009
Quarterly Report
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| in mill. EUR | Q1-Q3 2009 | Q1-Q3 2008 |
|---|---|---|
| Sales | 167.9 | 203.3 |
| Gross yield | 90.2 | 105.7 |
| Operating result (EBIT) | -15.5 | 2.5 |
| Operational Cash Flow | -10.4 | 4.3 |
| Employees | 1,582 | 1,673 |
| Order volume | 101.3 | 145.1 |
The global economic crisis we are currently experiencing has upset much of what was once believed certain and thrown many budgets out of kilter. After the last three quarters of the current financial year, it has become clear to us that the current crisis will have a longer and more pronounced effect on our business than we could have predicted. The state aid and infrastructure programmes announced have not as yet shown any effect either on our business or on that of our customers.
The economic recovery forecast in the first half of 2009 has still not materialised in the latter half of the year. Instead, we notice that our business partners abroad are now also increasingly forced to review their planning. Our business in the third quarter was thus defined primarily by the postponement, or even cancellation, of many investments and projects.
Since an expected major contract worth around Euro 30m failed to materialise, business in our previously stable Security Communication segment was hit particularly hard. Our largescale project in Algeria, which had begun to take shape and was well under way, needed to be stopped at short notice. In addition, the crisis in the automobile supplier sector continued as a key detrimental factor in the third quarter, along with the investment restraint of transport companies and the industry.
Contrary to previous projections, our revenues and incoming orders declined between July and the end of September and proved rather disappointing. At Euro 54.0m, sales remained behind the prior-year figure (Euro 71.9m) by almost 25 per cent. Revenues generated in the first nine months thus totalled Euro 167.9m (Q3/2008: Euro 203.3m), which corresponds to a decline of 17.4 per cent.
More pronounced still was the decline in incoming orders. In the first nine months, Funkwerk booked new orders worth Euro 164.8m, which is some 27 per cent less than in the previous year (Euro 224.1m). The orders on hand reduced to Euro 101.3 (Q3/2008: Euro 145.1m).
These trends and facts resulted in a correction of our business projections for 2009. All risks considered, we now expect group sales to reduce to around Euro 230m by year-end (2008: Euro 290.2m).
The weak order and sales trends mean further restructuring measures are now absolutely essential. These will burden earnings (EBIT) in fiscal 2009 by around Euro 10m, some Euro 5m of which have already been posted, the remainder will be charged against earnings in the fourth quarter. In this context, we will also be required to include extraordinary depreciations and value adjustments. Taking all risk factors and the restructuring costs into consideration, the group EBIT for the whole financial year is currently estimated to climb up to Euro -19m.
Through implementation of our current restructuring program, however, we hope to achieve permanent cost savings in 2010 and the years following to set the stage again for a positive business and earnings trend.
In addition, Funkwerk has started introducing a comprehensive fitness programme to systematically eliminate sources of loss and concentrate our business activities. Furthermore, we have implemented measures to improve our transparency and thus our risk management and are optimising our early warning system for business risks. This is to be achieved, among other things, by ensuring a more stringent standardisation of our business and controlling processes. The ongoing restructuring measures will result in a reduction of personnel and are meant to increase staff qualification.
We are already beginning to see initial effects: Our strict cost and spending discipline produced a positive operating cash flow in the third quarter. In the fourth quarter, Funkwerk will likely be able to get out of the red in operations – without the restructuring costs.
Our Automotive Communication segment (AC, communication equipment for vehicles) is currently undergoing a fundamental adjustment process necessitated by the slump in automobile markets worldwide. As an OEM supplier of communication equipment for the vehicle industry, AC is directly dependent on the plans and arrangements of vehicle manufacturers. These have at times halted productions altogether and have introduced shorttime work while their projections are based on weak demand expected to last until late 2010. This specifically affects the commercial vehicle sector and models in the upper price range, segments in which Funkwerk products are more widely used than in any other. The situation in the after-sales market and in the avionics product sector also continues to be difficult, while business in telematics is stable and looks set to rise.
While the downturn on the whole thus slowed in the third quarter, segment revenues of Euro 6.8m were down by 45 per cent on the comparative prior-year period. In the first three quarters, sales in AC thus declined by 48 per cent to around Euro 21m (Q3/2008: Euro 40.4m).
The adjustment programme largely implemented as early as in the second quarter, which involves a reduction of capacities, job cuts and personnel measures including short-time work, thus continued. In the third quarter, this once again led to a negative operating result in this segment. As at 30 September 2009, the EBIT of AC amounted to Euro -5.5m (Q3/2008: Euro 0.0m).
In 2010, we expect to see business stabilise slightly with balanced earnings contributions, even if current studies have shown that the global automobile markets will only recover slowly in 2010. This is made possible by the quick action and the countermeasures taken by the management to adjust our capacities and costs and by our diversification years earlier adding avionics and telematics to our portfolio. Moreover, we have increased our competences in key positions in development and sales with focus on the international after-sales market.
The continuing export weakness in the third quarter and the failure of a major project announced in the property protection sector to materialise significantly impaired the previously stable business trend of Security Communication (SC, personal security, video monitoring and property protection). Preparatory efforts for the now cancelled project, exchange losses (Algerian dinar not convertible) in current foreign trade and only the most cautious investments in security systems in Germany despite announcements to the contrary proved to be further exacerbating factors.
The market launch of the new TETRA handsets is unfortunately delayed due to complex approval procedures and will result in direct sales reductions in the current financial year. Consequently, revenues of SC in the first nine months totalled Euro 43.1m and thus remain significantly below the prior-year figure (Euro 55.4m). Contrary to our projections, the operating loss in this segment increased and stood at Euro -8.5m at the end of September (Q3/2008: Euro -1.1m).
SC also saw restructuring measures initiated, which will lead to cost savings of around Euro 3m from 2010 and in the following years. In the medium term, Funkwerk expects this segment return to significant growth, as the need for intelligent solutions for the protection of people, buildings, public places and objects is steadily growing. Funkwerk already has many years of expertise in electronic security and communication systems and is one of the leading specialists here in the international market.
Business in Funkwerk's strongest segment in terms of sales – Traffic & Control Communication (TCC, communication, management and information systems for transport, logistics and industry) – also failed to recover as anticipated in the third quarter. Sales here deteriorated between July and September, down by 8.3 per cent to Euro 27.8m (Q3/2008: Euro 30.3m). After the first nine months of 2009, segment revenues thus totalled Euro 79.2m, which is 7 per cent less than in the previous year (Euro 85.2m).
In addition to the postponement, and even cancellation, of infrastructure investments planned by transport companies, the main reason for the decline was the growing weakness in foreign trade. With financing options deteriorating, at times dramatically, for companies and projects specifically in Eastern Europe and also the Middle East, customers were forced to review their plans. As a consequence, promised or announced orders failed to materialise, ongoing projects experienced delays and credit periods were extended. On the other hand, the competitive pressure is steadily growing for new tenders, which results in drastically reduced margins.
To improve the overall earnings situation of TCC again, both the costs and personnel figures were adjusted, which will mean a one-off burden on the result in the third and fourth quarters but in the long run will have a positive effect. At Euro -3.2m, the segment result as at the end of September was negative (Q3/2008: Euro +6.7m). By the end of the year, however, the operating result of the TCC segment is likely to improve significantly, although this must be seen opposite one-off burdens of around Euro 3m due to further adjustments and the closure of sources of loss. In some sectors such as mobile radio technology for railway companies, the management systems for the energy industry and information systems for Deutsche Bahn, meanwhile, we can see positive signals. This could be further enhanced by the planned state aid programmes for infrastructure investments in European countries.
Enterprise Communication (EC, network and telecommunication solutions for companies) is a segment in which restructuring measures have already been completed successfully and sales are increasing again. While the global economic crisis led to cuts in foreign business even in this segment, revenues of Euro 8.3m remained within our expectations. After the first three quarters of the financial year, EC thus improved its sales figure by over 10 per cent on the previous year, up from Euro 22.2m Euro in 2008 to Euro 24.7m.
Despite the difficult general setting and increasing pricing competition, the segment result remained positive at Euro 1.7m (Q3/2008: Euro -3.1m). By the end of the year, steady sales will mean a positive earnings contribution of EC.
The strategy change initiated in EC as early as in 2008 – away from individual components to focus on solution-oriented communication systems in the enterprise sector – is now showing the first positive effects. This was particularly evident in the framework contract awarded in the third quarter for the
delivery of the access solution for the Associations of Statutory Health Insurance Physicians within the scope of the introduction of the health card.
The failure of orders to materialise and the unexpected slump in export had a negative effect on the earnings position of Funkwerk in the period under review. After the first three quarters of the financial year, group revenues totalled Euro 167.9m to remain 17.4 per cent below the prior-year figure (Q3/2008: Euro 203.3m).
The sales trend proved weaker than projected and thus necessitated restructuring and adjustment measures. This will lead to a burden on earnings (EBIT) in fiscal 2009 of around Euro 10m, with some Euro 5m already entered in the books. Around Euro 3m were due to personnel measures, some Euro 1.4m to extraordinary depreciations of internally produced and capitalised assets, and Euro 0.6m to other operating expenses.
From 2010, however, the restructuring costs in 2009 must be seen opposite permanent cost savings of over Euro 10m p.a.
On the whole, the operating loss in the third quarter increased by Euro -9.6m, from Euro -5.9m to Euro -15.5m, influenced in part by exchange losses (Algerian dinar) of around Euro 1.8m. In the previous year, Funkwerk had still generated an operating profit of Euro 2.5m in the same period. The group loss after the first three quarters of fiscal 2009 thus totalled Euro -12.2m (Q3/2008: Euro +1.3m), which corresponds to earnings per share of Euro -1.52 (Q3/2008: Euro +0.17).
Due to the asymmetrical distribution of sales throughout the year and the preparatory work for major projects in the first half year, the cash flow in the group tends to be negative up until the third quarter. As at June 2009, the operating cash flow thus stood at Euro -23.3m (Q3/2008: Euro 0.9m).
In the third quarter, our rigid cost and spending discipline and a reduction of working capital by around Euro 12m helped to reduce the negative operating cash flow by Euro 12.9m despite the high quarterly losses. As at the end of September, it totalled Euro -10.4m (Q3/2008: Euro +4.3m).
The payments for investments in the reporting period were slightly reduced from Euro 11.6m in the previous year to Euro 11.1m. The investments in tangible and intangible assets thus decreased significantly on the previous year, down by Euro 1.8m to Euro 2.9m as at the end of September. In contrast, the internally produced and capitalised assets increased from Euro 6.9m (end of September 2008) to Euro 8.2m.
Taking into account the inflow of funds from the sale of consolidated shareholdings in the range of Euro 2m, the free cash flow after acquisitions thus aggregated Euro -19.5m as at the end of September (Q3/2008: Euro -7.3m).
The liquid funds increased to Euro 9.8m in the third quarter due to the positive operating cash flow to top the prior-year level (Euro 7.4m). The loans taken out could be reduced by Euro 4.3m to Euro 3.6m in the third quarter, so that net cash and cash equivalents – Euro 6.1m as at 30 September 2009 – was clearly positive again. Since the fourth quarter is traditionally the period reporting the strongest sales gains for Funkwerk, we expect to see an improvement in the cash flow, and thus in our liquidity situation, by the end of the year.
Due to the trend of business, the balance sheet total of Funkwerk as a group continued to reduce in the third quarter of 2009 and now amounts to Euro 196.9m, which is evident primarily in the decrease in accounts receivable (Euro -12.2m).
On account of the loss in the period under review, our equity reduced to Euro 117.7m. At 60 per cent, the equity ratio, however, remained well above average.
At around Euro 79m, the working capital remained virtually the same compared to earlier in the year, but reduced by around Euro 14m on the prior-year period (30 September 2008). Based on the seasonal business development at Funkwerk, the current trend ensues from a year-on-year comparison. The Executive Board will in future focus its attention emphatically on a further reduction of inventories.
The development costs of Funkwerk in the period under review increased slightly on the previous year, up by 4 per cent to Euro 22.7m. This corresponds to over 13 per cent of sales. The lion's share here, almost Euro 15m, were due to customer-financed activities within the scope of projects and contracts.
Our self-financed and capitalised development work in the reporting period totalled Euro 8.2m (2008: Euro 6.9m). This must be seen opposite depreciations of around Euro 5m (Q3/2008: Euro 4.8m). Efforts continued to concentrate on TETRA handsets for security solutions and on electronic interlocking systems (Alister) for regional rail transport. Due to complex approval conditions, the launch of both product lines has unfortunately been delayed. We do, however, firmly expect a gradual launch by the end of 2009 and in early 2010, respectively. This will open up new sales potential of up to Euro 50m. Furthermore, Funkwerk endeavours to keep up with technological advances in all areas and enhance its portfolio by introducing innovative solutions.
Employees
Business in the period under review required an adjustment of capacities and the number of employees in our various business segments. The necessary restructuring in all segments in particular led to job cuts, which particularly affected such functional areas as administration, sales and production.
Report Accounts Notes
As at 30 September, the number of workforce (without trainees) in the Funkwerk group thus reduced by a good 8 per cent on the previous year, to 1,527 (2008: 1,626). On conclusion of the ongoing restructuring programme, the number of staff will likely reduce even further to below 1,400 by the close of the year.
All risks relating to the financial, net worth and earnings positions of Funkwerk along with the risk management system are described in detail in the 2008 annual report of the company.
Even though not much has changed since then, we noticed at the end of the period under review that the burdens particularly of the global economic crisis did not affect business with foreign customers until a little later so that individual risks needed to be reassessed, necessitating appropriate adjustments and a strategic reorientation in our organisation and in controlling.
The opportunities for our business resulting from the various state aid measures introduced to boost the economy and revive the investment activity have not become manifest yet and are not likely to affect sales and earnings until next year.
The continued poor booking of new orders specifically in foreign business shows that the general crisis has now also hit Funkwerk and that a recovery is slow to set in. We expect business to revive by the middle of 2010 and believe that the state-introduced infrastructure programmes will be a contributing factor here.
Against this background, the fourth quarter of 2009 will primarily be defined by the implementation and conclusion of our current restructuring and fitness programme. This will lead to permanent cost savings of over Euro 10m in 2010 and to a stabilisation of our business trend with a turnaround to set the stage for a fresh, growth-oriented forward strategy from 2011.
There were no other events of special significance after the reporting date on 30 September 2009.
Kölleda, November 2009
For the Executive Board
Dr.-Ing. Hans Grundner Chairman of the Board
In the third quarter, the financial markets decoupled themselves increasingly from the real trend of business and the economic prospects. While both the DAX and the TecDAX marked new annual highs, the key economic data do not give rise to hope for an end of the crisis.
At the end of the third quarter, the German stock index, DAX, had gained 17 per cent on the start of the year, with the benchmark of the leading technology and growth shares even up by 48 per cent, although its outperformance was due primarily to the multiplication of the top weighted stock in the TecDAX, Infineon AG.
Initially, the Funkwerk share (ISIN DE0005753149) largely followed the fluctuations of the TecDAX until well into July. In August, however, it broke the Euro 7 barrier so that Funkwerk, if briefly, outperformed the TecDAX. September saw the first profit takings. At Euro 7.29, the Funkwerk share had increased in value by 31.3 per cent in the reporting period.
It subsequently climbed to a new annual high of Euro 8.20 in early October. But when the sales and profit forecasts needed to be revised, the Funkwerk share lost much of its annual profit again.
The five financial institutions and analysts that regularly analyse Funkwerk AG subsequently revised their assessments accordingly, putting the fair value of the share at between Euro 5.50 and Euro 10.
| Segment | Prime Standard | ||||
|---|---|---|---|---|---|
| of Frankfurt Stock Exchange | |||||
| Stock category | No-par bearer shares at a par value of | ||||
| Euro 1 | |||||
| WKN/ISIN DE | 575 314 / DE 0005753149 (code: FEW) | ||||
| Reuters: FEWG.DE | |||||
| Bloomberg: FEW GR | |||||
| Designated | • WestLB | ||||
| sponsors | • Close Brothers Seydler Bank AG | ||||
| Market | Euro 59.1m | ||||
| capitalisation | (as at the end of September 2009) |
Further information on the Funkwerk share along with presentations and reports on the company are available on the Internet at www.funkwerk.com.
Funkwerk was not notified of any major changes in the shareholder structure in the period under review. As at the end of March, the shares in Funkwerk AG are held as follows:
| Total shares | 8,101,241 | 100.00% |
|---|---|---|
| Hörmann Funkwerk Holding GmbH | 4,280,000 | 52.83% |
| Free float | 3,821,241 | 47.17% |
| thereof own shares | 41,579 | 0.51% |
| thereof Executive Board | 500 | 0.01% |
| ASSETS | 30/09/2009 | 31/12/2008 | |
|---|---|---|---|
| EUR k | EUR k | ||
| A. Non-Current Assets | |||
| 1. | Intangible assets | 50,404 | 47,499 |
| thereof goodwill | 19,265 | 19,065 | |
| thereof development costs | 25,633 | 22,089 | |
| 2. | Property, plant and equipment | 17,442 | 19,146 |
| thereof land, leasing rights and buildings including those on third-party land | 7,380 | 7,578 | |
| thereof technical equipment, plant and machinery | 4,891 | 5,883 | |
| thereof other equipment, operational and business equipment | 5,023 | 5,605 | |
| thereof advanced payments and construction in progress | 148 | 79 | |
| 3. | Loans to affiliated companies | 0 | 0 |
| 4. | Other financial assets | 2,325 | 126 |
| 5. | Deferred taxes | 3,142 | 372 |
| 73,313 | 67,143 | ||
| B. Current Assets | |||
| 1. | Inventories | 49,246 | 46,193 |
| thereof raw materials and supplies | 24,193 | 24,486 | |
| thereof work in progress | 11,168 | 7,875 | |
| thereof finished goods and merchandise | 13,152 | 13,240 | |
| thereof advance payments | 733 | 592 | |
| 2. | Trade accounts receivable | 33,074 | 50,702 |
| 3. | Accounts due from projects in process | 22,556 | 18,611 |
| 4. | Accounts due from affiliated companies | 755 | 617 |
| 5. | Other taxes receivable | 4,711 | 4,477 |
| 6. | Other asset value | 3,536 | 4,252 |
| 7. | Securities | 622 | 642 |
| 8. | Cash | 9,133 | 25,365 |
| 9. | Long-term assets received for sale | 0 | 2,100 |
| 123,633 | 152,959 | ||
| 196,946 | 220,102 |
| EQUITY AND LIABILITIES | 30/09/2009 | 31/12/2008 | |
|---|---|---|---|
| EUR k | EUR k | ||
| A. Shareholders' Equity | |||
| 1. | Subscribed capital | 8,101 | 8,101 |
| 2. | Additional paid-in capital | 63,236 | 63,017 |
| 3. | Appropriated retained earnings | 38,211 | 38,211 |
| 4. | Own shares | (1,062) | (1,062) |
| 5. | Consolidated unappropriated retained earnings | 9,425 | 21,657 |
| 6. | Minority interest | (3) | 11 |
| 7. | Foreign currency items | (202) | (379) |
| 117,706 | 129,556 | ||
| B. Accrued Liabilities | |||
| 1. | Pension accrued | 12,488 | 12,640 |
| 2. | Prepaid expenses item for investment subsidies and allowances | 1,274 | 1,358 |
| 3. | Deferred taxes | 0 | 3,008 |
| 4. | Liabilities due to banks | 23 | 33 |
| 13,785 | 17,039 | ||
| C. Current Liabilities | |||
| 1. | Liabilities due to banks | 3,634 | 341 |
| 2. | Trade accounts payable | 23,536 | 33,730 |
| 3. | Advance payments received on orders | 2,943 | 3,844 |
| 4. | Accounts due to affiliated companies | 63 | 73 |
| 5. | Taxes payable | 3,945 | 3,474 |
| 6. | Other accrued liabilities | 9,984 | 10,767 |
| 7. | Prepaid expenses item for investment subsidies and allowances | 159 | 184 |
| 8. | Financial liabilities | 21,191 | 21,094 |
| thereof personnel liabilities | 9,355 | 8,566 | |
| thereof for taxes | 2,079 | 4,016 | |
| thereof for social security | 157 | 641 | |
| 65,455 | 73,507 | ||
| 196,946 | 220,102 |
| Q3 2009 | Q3 2008 | Q1-Q3 2009 | Q1-Q1-Q1-Q3 2008 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 01/07/2009 | 01/07/2008 | 01/01/2009 | 01/01/2008 | ||||||
| to 30/09/2009 | to 30/09/2008 | to 30/09/2009 | to 30/09/2008 | ||||||
| EUR k | % | EUR k | % | EUR k | % | EUR k | % | ||
| 1. | Revenues | 53,969 | 91.6 | 71,919 | 96.5 | 167,913 | 91.1 | 203,327 | 93.8 |
| 2. | Increase in inventories of finished | ||||||||
| goods and work in progress | 796 | 1.4 | (3,514) | 4.7 | 2,938 | 1.6 | (4,309) | 2.0 | |
| 3. | Other own work capitalised | ||||||||
| (development costs) | 2,465 | 4.2 | 2,503 | 3.4 | 8,177 | 4.4 | 6,940 | 3.2 | |
| 4. | Other operating income | 1,672 | 2.8 | 3,598 | 4.8 | 5,228 | 2.8 | 10,802 | 5.0 |
| 5. | Gross income | 58,902 | 100 | 74,506 | 100 | 184,256 | 100 | 216,760 | 100 |
| 6. | Material expenses | (29,802) | 50.6 | (35,119) | 47.1 | (88,781) | 48.2 | (100,182) | 46.2 |
| 7. | Personnel expenses | (25,028) | 42.5 | (23,875) | 32.0 | (73,310) | 39.8 | (72,795) | 33.6 |
| 8. | Depreciation and amortisation | (3,882) | 6.6 | (3,608) | 4.8 | (10,054) | 5.5 | (10,971) | 5.1 |
| thereof development costs | (2,190) | 3.7 | (1,598) | 2.1 | (4,950) | 2.7 | (4,838) | 2.2 | |
| 9. | Other operating expenses | (9,753) | 16.6 | (10,602) | 14.2 | (27,599) | 15.0 | (30,290) | 14.0 |
| 10. Operating expenses | (68,465) | 116.2 (73,204) | 98.3 | (199,744) | 108.4 (214,238) | 98.8 | |||
| 11. Operating profit (EBIT) | (9,563) | (16.2) | 1,302 | 1.7 | (15,488) | (8.4) | 2,522 | 1.2 | |
| 12. Financial income | 1 | 0.0 | 283 | 0.4 | 118 | 0.1 | 544 | 0.3 | |
| 13. | Depreciation/Amortisation | ||||||||
| of financial assets | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | |
| 14. | Financial expenditure | (305) | 0.5 | (357) | 0.5 | (792) | 0.4 | (1,190) | 0.5 |
| 15. Financial income | (304) | (0.5) | (74) | 0.1 | (674) | (0.4) | (646) | 0.2 | |
| 16. Income from ordinary operations | (9,867) | (16.8) | 1,228 | 1.6 | (16,162) | (8.8) | 1,876 | 0.9 | |
| 17. | Deferred taxes | 3,480 | 5.9 | 283 | 0.4 | 5,757 | 3.1 | 806 | 0.4 |
| 18. | Taxes on income and earnings | (877) | 1.5 | (438) | 0.6 | (1,452) | 0.8 | (1,195) | 0.6 |
| 19. | Other taxes | (142) | 0.2 | (139) | 0.2 | (393) | 0.2 | (380) | 0.2 |
| 20. Consolidated net income | (7,406) | (12.6) | 934 | 1.3 | (12,250) | (6.6) | 1,107 | 0.5 | |
| 21. | Minority interests | (17) | 0.0 | 32 | 0.0 | 18 | 0.0 | 242 | 0.1 |
| 22. Shareholders' equity | (7,423) | (12.6) | 966 | 1.3 | (12,232) | (6.6) | 1,349 | 0.6 | |
| 23. | Profit carried forward | 21,657 | 36.8 | 15,473 | 20.8 | 21,657 | 11.8 | 15,473 | 7.1 |
| 24. Donation of surplus reserve | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | 0 | 0.0 | |
| 25. Dividends paid | 0 | 0.0 | (2,014) | 2.7 | 0 | 0.0 | (2,014) | 0.9 | |
| 26. Consolidated unappropriated | |||||||||
| retained earnings | 14,234 | 24.2 | 14,425 | 19.4 | 9,425 | 5.1 | 14,808 | 6.8 | |
| Earnings per share according to IAS 33 | |||||||||
| Consolidated net income EUR k |
(7,423) | 966 | (12,232) | 1,349 | |||||
| Number of shares (undiluted) Shares k |
8,060 | 8,060 | 8,060 | 8,060 | |||||
| Earnings per share (undiluted) EUR |
(0.92) | 0.12 | (1.52) | 0.17 | |||||
| Consolidated net income EUR k |
(7,423) | 966 | (12,232) | 1,349 | |||||
| Number of shares (diluted) Shares k |
8,278 | 8,272 | 8,278 | 8,272 | |||||
| Earnings per share (diluted) EUR |
(0.90) | 0.12 | (1.48) | 0.16 |
| Q3 2009 01/07/2009 to 30/09/2009 |
Q3 2008 01/07/2008 to 30/09/2008 |
Q1-Q3 2009 01/01/2009 to 30/09/2009 |
Q1-Q1-Q1-Q3 2008 01/01/2008 to 30/09/2008 |
|||||
|---|---|---|---|---|---|---|---|---|
| EUR k | % | EUR k | % | EUR k | % | EUR k | % | |
| Consolidated net income | (7,406) | (12.6) | 934 | 1.3 | (12,250) | (6.7) | 1,107 | 0.5 |
| Other comprehensive income | ||||||||
| Foreign currency exchange rate changes | 41 | 0.1 | (139) | -0.2 | 177 | 0.1 | (192) | (0.1) |
| Other comprehensive income for the period |
41 | 0.1 | (139) | -0.2 | 177 | 0.1 | (192) | (0.1) |
| Total comprehensive income | ||||||||
| for the period | (7,365) | (12.5) | 795 | 1.1 | (12,073) | (6.6) | 915 | 0.4 |
| Attributable to shareholders' equity | (7,382) | (12.5) | 827 | 1.1 | (12,055) | (6.6) | 1,157 | 0.5 |
| Attributable to minority interests | 17 | 0.0 | (32) | 0.0 | (18) | 0.0 | (242) | (0.1) |
| Q1-Q3 2009 | Q1-Q3 2008 | ||
|---|---|---|---|
| 01/01/2009 | 01/01/2008 | ||
| to 30/09/2009 | to 30/09/2008 | ||
| EUR k | EUR k | ||
| 1. | Consolidated net income | (12,232) | 1,349 |
| 2. | Depreciation and amortisation | 10,054 | 10,971 |
| 3. | Other non-cash expenditure and income | (2,285) | 0 |
| 4. | Increase/Decrease in the special line item | (109) | (175) |
| 5. | Increase/Decrease in deferred taxes | (5,778) | (837) |
| 6. | Cash flow according to DVFA | (10,350) | 11,308 |
| 7. | Increase/Decrease of accounts receivable and other assets | 11,044 | 4,952 |
| 8. | Increase/Decrease of accounts payable and other equity and liabilities | (11,123) | (11,951) |
| 9. | Net cash from operating activities | (10,429) | 4,309 |
| 10. | Cash paid for investments | (11,078) | (11,619) |
| 11. | Alienation of financial assets | 0 | 0 |
| 12. Net cash used in investing activities | (11,078) | (11,619) | |
| 13. Free Cash Flow before acquisitions | (21,507) | (7,310) | |
| 14. | Cash paid for consolidated and related companies | (247) | 0 |
| 15. | Cash-inflow from disposal of consolidated and related companies | 2,233 | 0 |
| 16. 17. |
Allocation of own shares for the acquisition of associated companies Net cash used in financing activities |
0 1,986 |
0 0 |
| 18. Free Cash Flow incl. acquisitions | (19,521) | (7,310) | |
| 19. | Proceeds from raising of (finance) loans | 3,283 | 49 |
| 20. Payment for repayment of (finance) loans | 0 | (909) | |
| 21. | Capital increase for shareholders' capital | 0 | 0 |
| 22. Allocation in additional paid-in capital | 0 | 0 | |
| 23. | Receipt of payment/Disbursement from claims | ||
| of adjustments to minority interest | (14) | (642) | |
| 24. Dividends paid | 0 | (2,014) | |
| 25. Net cash used in financing activities | 3,269 | (3,516) | |
| 26. Change in cash | (16,252) | (10,826) | |
| 27. | Cash at beginning of period | 26,007 | 18,247 |
| 28. Cash at end of period | 9,755 | 7,421 | |
| Composition of cash at the end of the reporting period | |||
| Cash in hand and deposit at banks | 9,133 | 6,808 | |
| Securities | 622 9,755 |
613 7,421 |
|
| Consolidated | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Additional | unappropri- | Foreign | |||||||
| Subscribed | paid-in Retained ated retained | Own currency | Minority | Total | |||||
| EUR k | Capital | Capital earnings | earnings Shares | items | Total | interests Capital | |||
| December 31, 2007 | 8,101 | 62,560 | 38,211 | 15,473 (1,062) | (85) 123,198 | 628 123,826 | |||
| Distribution | 0 | 0 | 0 | (2,014) | 0 | 0 | (2,014) | 0 | (2,014) |
| Stock options (according to IFRS 2) | 0 | 534 | 0 | 0 | 0 | 0 | 534 | 0 | 534 |
| Minority interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (642) | (642) |
| Profit Q1-Q3 2008 | 0 | 0 | 0 | 1,349 | 0 | 0 | 1,349 | 0 | 1,349 |
| Currency exposure | 0 | 0 | 0 | 0 | 0 | (192) | (192) | 0 | (192) |
| September 30, 2008 | 8,101 | 63,094 | 38,211 | 14,808 (1,062) | (277) 122,875 | (14) 122,861 | |||
| December 31, 2008 | 8,101 | 63,017 | 38,211 | 21,657 (1,062) | (379) 129,545 | 11 129,556 | |||
| Distribution | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock options (according to IFRS 2) | 0 | 219 | 0 | 0 | 0 | 0 | 219 | 0 | 219 |
| Minority interests | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (14) | (14) |
| Profit Q1-Q3 2009 | 0 | 0 | 0 | (12,232) | 0 | 0 (12,232) | 0 (12,232) | ||
| Currency exposure | 0 | 0 | 0 | 0 | 0 | 177 | 177 | 0 | 177 |
| September 30, 2009 | 8,101 | 63,236 | 38,211 | 9,425 (1,062) | (202) 117,709 | (3) 117,706 |
| Executive | Managing | Employees | Total | ||
|---|---|---|---|---|---|
| Board | Director | other | |||
| of affiliated | staff | staff | |||
| companies | |||||
| Opening balance 01/01/2009 | 114,000 | 50,450 | 82,735 | 315,065 | 562,250 |
| + Options rights granted | 0 | 0 | 0 | 0 | 0 |
| - Options rights exercised | 0 | 0 | 0 | 0 | 0 |
| - Options rights forfeited | (48,000) | (21,060) | (24,580) | (118,113) | (211,753) |
| Closing balance 30/09/2009 | 66,000 | 29,390 | 58,155 | 196,952 | 350,497 |
| Year | TCC | AC | EC | SC | Total | |
|---|---|---|---|---|---|---|
| EUR k | EUR k | EUR k | EUR k | EUR k | ||
| 1. Total revenues | 2009 | 79,338 | 21,088 | 25,192 | 49,532 | 175,150 |
| 2008 | 86,361 | 40,415 | 22,261 | 55,484 | 204,521 | |
| 2. Revenues by segment* | 2009 | 133 | 93 | 543 | 6,468 | 7,237 |
| 2008 | 1,119 | 2 | 14 | 59 | 1,194 | |
| 3. Revenues | 2009 | 79,205 | 20,995 | 24,649 | 43,064 | 167,913 |
| 2008 | 85,242 | 40,413 | 22,247 | 55,425 | 203,327 | |
| 4. Increase/Decrease in inventories of | 2009 | 1,329 | 265 | 0 | 1,344 | 2,938 |
| finished goods and work in progress | 2008 | (3,546) | (213) | 0 | (550) | (4,309) |
| 5. Other own work capitalised | 2009 | 2,218 | 2,266 | 1,589 | 2,104 | 8,177 |
| (development costs) | 2008 | 2,091 | 1,750 | 1,251 | 1,848 | 6,940 |
| 6. Other operating income | 2009 | 2,502 | 1,027 | 1,108 | 591 | 5,228 |
| 2008 | 8,839 | 910 | 439 | 614 | 10,802 | |
| 7. Gross income | 2009 | 85,254 | 24,553 | 27,346 | 47,103 | 184,256 |
| 2008 | 92,626 | 42,860 | 23,937 | 57,337 | 216,760 | |
| 8. Material expenses | 2009 | (38,696) | (13,846) | (11,617) | (24,622) | (88,781) |
| 2008 | (34,474) | (24,260) | (10,917) | (30,531) | (100,182) | |
| 9. Personnel expenses | 2009 | (36,545) | (9,783) | (8,003) | (18,979) | (73,310) |
| 2008 | (35,298) | (11,347) | (8,835) | (17,315) | (72,795) | |
| 10. Depreciation of non-current assets | 2009 | (2,139) | (1,213) | (595) | (1,157) | (5,104) |
| 2008 | (2,760) | (1,494) | (730) | (1,149) | (6,133) | |
| 11. Depreciation of development costs | 2009 | (886) | (2,187) | (1,207) | (670) | (4,950) |
| 2008 | (1,245) | (1,500) | (1,284) | (809) | (4,838) | |
| 12. Other operating expenses | 2009 | (10,184) | (3,053) | (4,226) | (10,136) | (27,599) |
| 2008 | (12,125) | (4,286) | (5,271) | (8,608) | (30,290) | |
| 13. Operating profit (EBIT) | 2009 | (3,196) | (5,529) | 1,698 | (8,461) | (15,488) |
| 2008 | 6,724 | (27) | (3,100) | (1,075) | 2,522 |
* Within consolidation revenues with other segments will be eliminated.
The accounts were compiled in Euro in compliance with the International Financial Reporting Standards (IFRS). IFRS 3R "Business Combinations", IAS 27R "Consolidated and Separate Financial Statements" and IAS 1A " Presentation of Financial Statements" were applied early as standards applicable to the period under review. IFRS 8 "Operating Segments" was also applied for the first time. Furthermore the six month accounts are based on the accounting principles and methods applied to the consolidated financial statement for the 2008 financial year.
This interim report has neither been audited under § 317 of the German Commercial Code (HGB) nor reviewed and verified by an auditor.
In addition to the parent company, Funkwerk AG, the following operating companies were included as subsidiaries in the nine month accounts of the company according to the full consolidation method:
| Direct subsidiaries | Registered office | Voting rights in % |
|---|---|---|
| Hörmann-Funkwerk Kölleda GmbH (FWK) | Kölleda, Thuringia | 100 |
| ALPHA Meß-Steuer-Regeltechnik GmbH (Alpha) | Neustadt/Weinstr., Rhineland-Palatinate | 100 |
| Funkwerk Dabendorf GmbH (FWD) | Zossen, Brandenburg | 100 |
| Funkwerk Enterprise Communications GmbH (FEC-new) | Nuremberg, Bavaria | 100 |
| Funkwerk Information Technologies GmbH (FIT) | Kiel, Schleswig-Holstein | 100 |
| Bouyer S.A.S. | Montauban, France | 100 |
| Funkwerk Security Communications GmbH (FSC) | Salzgitter, Lower-Saxony | 100 |
| Indirect subsidiaries | Registered office | Voting rights in % |
| Funkwerk eurotelematik GmbH | Ulm, Baden-Württemberg | 100 |
| Funkwerk Avionics GmbH | Waal, Bavaria | 100 |
| Funkwerk Enterprise Communications Iberia S.L. | Madrid, Spain | 100 |
| Funkwerk Enterprise Communications France S.A.S. | Gradignan Cedex, France | 100 |
| Funkwerk Enterprise Communications Italy S.R.L. | Milan, Italy | 100 |
| Funkwerk Aphona GmbH | Vienna, Austria | 100 |
| Indirect subsidiaries | Registered office | Voting rights in % |
|---|---|---|
| Funkwerk IP-Appliances GmbH | Neu-Ulm, Bavaria | 100 |
| Funkwerk Information Technologies | ||
| Karlsfeld GmbH (FITK) | Karlsfeld, Bavaria | 100 |
| Funkwerk Information Technologies York Limited | York, Great Britain | 100 |
| Funkwerk Information Technologies Malmö AB | Malmö, Sweden | 100 |
| Funkwerk IT Polska Sp. Z.o.o. | Warsaw, Poland | 100 |
| Microsyst Systemelectronic GmbH | Weiden, Bavaria | 100 |
| Funkwerk plettac electronic GmbH | Fürth, Bavaria | 100 |
| Funkwerk Systems Austria GmbH | Vienna, Austria | 100 |
| Funkwerk Ungarn Kft. | Budapest, Hungary | 85 |
| Funkwerk Akademie GmbH | Beichlingen, Thuringia | 100 |
| Funkwerk Electronic Services GmbH | Salzgitter, Lower-Saxony | 100 |
| Funkwerk Engineering GmbH | Kiel, Schleswig-Holstein | 100 |
Seasonal or economic influences exceeding the norm which require reporting or were not already disclosed in the report of the Executive Board did not exist.
Following the preparation of the nine month report, there have been no key events that might have a major influence on our business operations.
The following table shows the actual personnel expenses and the effects on the net income of the period and the earnings per share in compliance with IFRS 2:
| 30/09/2009 | 30/09/2008 | |
|---|---|---|
| Consolidated net income in EUR k | ||
| before the issue of IFRS 2 | (12,013) | 1,883 |
| share-based personnel expenses | (219) | (534) |
| after the issue of IFRS 2 | (12,232) | 1,349 |
| Earnings per share in EUR (undiluted) | ||
| before the issue of IFRS 2 | (1.49) | 0.23 |
| after the issue of IFRS 2 | (1.52) | 0.17 |
| Earnings per share in EUR (undiluted) | ||
| before the issue of IFRS 2 | (1.45) | 0.22 |
| after the issue of IFRS 2 | (1.48) | 0.16 |
The fair value of the options granted in the financial years from 2003 to 2008 which were used for the calculation of the expenses and the prior-year comparative data was determined using the binomial option pricing model. The valuation premises taken into account here are unmodified against the previous periods.
"In compliance with the generally accepted accounting principles for the interim report, we hereby confirm to the best of our knowledge and belief that the consolidated interim financial statements give a true and fair view of the company's assets, liabilities, financial position, and profit and loss, and that the group management report is an accurate representation of the trend of business of the company including operating result and group situation, and appropriately describes the opportunities and risks of the anticipated future development of the group in the remaining financial year."
The Executive Board of Funkwerk AG Kölleda, November 2009
Funkwerk AG Im Funkwerk 5 99625 Kölleda/Thüringen
| Telephone +49-3635-600-0 | |
|---|---|
| Fax | +49-3635-600-507 |
| [email protected] | |
| Internet | www.funkwerk.com |
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