Quarterly Report • Nov 14, 2017
Quarterly Report
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employees support the processes and products of AlzChem with their know-how on a daily basis*
~ € 41 mn adjusted EBITDA* AlzChem achieved from January to September 2017
*As of September 30, 2017 *Adjusted for non-recurring costs in connection with the IPO
AlzChem products are sold worldwide
~ € 25 mn was the cash flow from operating activities after the first nine months of 2017
Production of chemical intermediates for direct sale or refinement as specialty chemicals products
CONTRIBUTION TO SALES IN THE NINE-MONTH PERIOD 2017
Production and distribution of highquality chemical products
Other activities, mainly services related to the chemical parks Trostberg and Hart
FINE CHEMISTRY AGRICULTURE METALLURGY FOOD RENEWABLE ENERGIES
Quarterly financial report of SOFTMATIC AG
Consolidated financial statemnet of SOFTMATIC AG
Global demand for specialty chemicals is consistently high. As a vertically integrated specialty chemicals provider, we have developed a leading position in select niche markets in recent years. This has been reflected in the positive operating performance of the first nine months of 2017. All three segments have experienced sales growth. At the same time, we have also improved our earnings power. As of the reporting date, September 30, 2017, AlzChem recorded sales revenues of around EUR 272.7 million at Group level, nearly 9 % more than in the same period of the previous year (EUR 250.5 million). Adjusted EBITDA amounted to EUR 40.5 million. Compared with the previous year (EUR 35.9 million), this represents an increase of 13.0 %, whereby both figures are adjusted for one-time charges for the IPO. The adjusted EBITDA margin is 14.9 % after the first nine months. We are satisfied with this business performance.
Fiscal year 2017 to this point has reinforced our choice of a promising future strategy for AlzChem. We are positioning ourselves as a fully integrated chemical company with its growth plan clearly focused on the Specialty Chemicals business segment. Some specialty chemicals have managed to exceed our expectations. In recent months, we have set the course for continued positive development in this important segment. Our feed additive CreAMINO® exemplifies this. CreAMINO®'s approval for American chicken production in November 2016 was a significant step into another attractive market. We intend to continue expanding our position there in the coming months. At the same time, the Management Board and Supervisory Board have jointly decided to invest around EUR 50 million in a new CreAMINO® production facility at our Trostberg site. This is the largest investment in AlzChem's history, which we're managing with borrowed capital and internal resources. Groundbreaking is scheduled for the spring of 2018. The expected tripling of CreAMINO® production capacities from 7,000 to 21,000 metric tons per year will position us to sustainably anticipate the expected increase in demand. At present, we are using existing production facilities as well as future-oriented inventories for our global customer delivery. We manage this with close cooperation with our longstanding sales partner Evonik.
Demand for the other specialty chemicals such as the food supplement Creapure® and the plant growth regulator Dormex® has also developed positively.
AlzChem achieved a further milestone in its strategic corporate development with its successful move to the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange on October 9, 2017. This was made possible by AlzChem AG's contribution in kind to the listed AlzChem Group AG (formerly Softmatic AG). Access to the capital market adds yet more potential to our existing growth financing options.
The demand for our agro products is characterized by a certain seasonality. Spring in the
Northern Hemisphere typically results in a strong second quarter, whereas demand in the final quarter of the year is usually comparatively low. At Group level, we continue to expect a slight to medium increase in sales for the full year 2017 in the mid to high single-digit percentage range. In terms of adjusted EBITDA, we continue to expect a slight increase in the low single-digit percentage range, following the high increases in the previous year. The reason for the disproportionately lower earnings growth compared to sales is the sharp increase in raw material costs in the second half of 2017 and the strong euro against the US dollar. In summary, we expect overall positive business development for 2017 as a whole.
We are constantly developing AlzChem so that we can continue to make the most of the growth opportunities offered to us. Special thanks goes to our employees, whose daily efforts have enabled AlzChem's successes to this point, and who form the foundation of sustainable company success. We are delighted to have you forge ahead with AlzChem on this exciting path to a successful future
Kind regards, AlzChem AG/AlzChem Group AG Management Board
Ulli Seibel, CEO Andreas Niedermaier, CFO Klaus Englmaier, COO
Ulli Seibel Andreas Niedermaier Klaus Englmaier
AlzChem Group AG is a vertically integrated, internationally active manufacturer of various chemical products based on the NCN chain. These products have typical nitrogencarbon-nitrogen bonding used in a variety of industries. These primarily include the food industry, fine chemicals, agriculture, metallurgy and renewable energies.
AlzChem Group AG's operative business can be divided into three segments along the entire value chain. The Specialty Chemicals segment, the largest segment that accounts for more than 50% of sales, comprises the production and distribution of high-quality chemical products. The Basics & Intermediates segment combines the production of chemical intermediates based on the starting materials calcium carbide and calcium cyanamide. These intermediates are either sold directly to third parties or further processed into specialty chemicals. The third operating segment Other & Holding encompasses all other activities. These largely entail services related to the chemical parks operated by AlzChem (also for third parties) in Trostberg and Hart.
| 2014 | 2015 | 2016 9M/16 9M/17 | |||
|---|---|---|---|---|---|
| Net sales (EUR mn) | 290.7 | 322.6 | 327.2 | 250.5 | 272.7 |
| EBITDA (EUR mn) | 32.4 | 33.2 | 38.6 | 29.6 | 38.2 |
| Adjusted EBITDA (EUR mn)* |
- | - | 44.9 | 35.9 | 40.5 |
| EBITDA margin | 11.1% | 10.3% | 11.8% | 11.8% | 14.0% |
| Adjusted EBITDA margin* |
- | - | 13.7% | 14.3% | 14.9% |
| Cash flow from operating activities (EUR mn) |
17.9 | 28.2 | 33.1 | 28.3 | 24.6 |
*Adjusted for non-recurring costs in connection with the IPO
GERMANY: Trostberg, Hart, Schalchen, Waldkraiburg SWEDEN: Sundsvall
USA: Atlanta, GA CHINA: Shanghai
A key feature of the AlzChem Group is its vertical integration along the calcium carbide / calcium cyanamide chain (NCN chain). This means that most of the company's products are based on the same starting materials: lime and coal. AlzChem performs many processing steps itself and is increasingly starting with material refinement.
The operation of this integrated production system is only possible due to its four historically grown sites in the Bavarian Chemical Triangle which enjoy such close proximity.
Integrated production allows AlzChem to react flexibly to changes in demand as many products from the Basics & Intermediates segment are also raw materials for the Specialty Chemicals segment. Synergies also exist in the production process as well as research and development. As a result of integrated production, the company is also less dependent on external suppliers.
GROWTH DRIVER
In 1900, around 1.7 billion people lived on our planet. By the year 2000, this figure had increased to more than 6.1 billion. Only 17 years later, in 2017, the world population amounted to around 7.6 billion. The United Nations expects a realistic increase by the year 2030 to over 8.6 billion people.1 At the same time, agricultural areas are limited worldwide. Against this backdrop, efficient processes are necessary to provide the growing population with food for the future as well as possible. The AlzChem Group's products meet these requirements and can be used in increasingly optimized agricultural production.
Under the brand CreAMINO®2 , AlzChem distributes a feed additive for efficient agricultural production processes. CreAMINO® is a guanidinoacetic acid (GAA) and is further processed into the body's own substance creatine once absorbed in the body of the animal. This process improves feed utilization, meaning nutrients in the feed can be better absorbed. Increased feed utilization also stimulates natural muscle growth. This in turn leads to a reduction in the total feed quantity required as well as a smaller holding time for animals. Using CreAMINO® can thus lead to cost savings for users. CreAMINO® is approved in important markets such as the EU and the US, mainly in the poultry sector. AlzChem also wants to address more animal species going forward.
The AlzChem product Dormex®3 is a growth regulator (so-called dormancy breaker) for cultivated plants such as table grapes, cherries and blueberries. With the help of Dormex®, farmers in permanently warm climates can control the budding of their plants in order to coordinate harvests at need. In addition, using Dormex® increases the number of buds per plant, which in turn leads to an increase in crop yield. The properties of Dormex® contribute to ensuring a continuous supply of fruit and vegetables from the most diverse regions of the world to the end consumer throughout the whole year.
United Nations (UN)
GROWTH DRIVER
The world population, especially in western industrial nations, is constantly aging. The average global life expectancy in 2000 was around 66.4 years.4 Already by the year 2015, humans lived an average of about 71.4 years.5 Scientists expect life expectancy to rise significantly in the coming years.6 Medical progress is a key factor in the prevention and treatment of diseases. So-called civilization diseases and age-related diseases are no exceptions, however. At the same time, awareness of health and nutrition is gaining in importance, so older people in particular are increasingly active in sports and consciously paying attention to a healthy diet. With its products, the AlzChem Group wants to support these developments in the pharmaceutical, cosmetics and healthcare sectors.
AlzChem, under the brand name Creapure®, provides a dietary supplement consisting of the body's own creatine, which is mainly used for muscle building and physical activity. Due to these characteristics, Creapure® addresses the sports / fitness industry as well as the age group of over 55-year-olds. Natural decrease in muscle mass tends to start around this age. In order to reduce an age-related decline in muscle strength, older people can proactively react with the daily intake of Creapure® in combination with regular strength training. The European Food Safety Authority (EFSA) officially confirmed the positive effect of creatine in 2017.
With BioSELECT®, AlzChem produces high-purity guanidine salts such as guanidine hydrochloride or guanidinium thiocyanate. These products are used, for example, in the biotechnological production of pharmaceutical drugs as well as in DNA diagnostics. The decisive factor here is the consistently high quality of the products, which AlzChem can reliably deliver thanks to its integrated production.
4 World Health Organisation (WHO) 5 Ebenda 6 Lancet Medical Journal
GROWTH DRIVER
Energy efficiency and renewable energy are gaining in importance worldwide. This is on the one hand due to legal and regulatory requirements; on the other hand, many technologies are now at a stage where the economic benefit is attractive. Accordingly, the demand for photovoltaic and wind power plants is increasing. Globally installed wind and solar power systems increased from about 80 GW in 2006 to more than 762 GW in 2016, which corresponds to average annual growth of more than 25 %.7 This growth trend is expected to continue in the future. AlzChem sees itself well positioned to participate in this development.
Under the Silzot® brand, AlzChem is launching silicon nitride powders that open up various application possibilities. Silzot® can be used as a release agent for the production of photovoltaic cells. Using Silzot® protects cells from contamination from the mold. Silzot® thus improves the purity of solar modules in the production process. Silzot® is also used in the ceramics industry for parts that must withstand extreme mechanical and thermal influences. These include ball bearings used in windmills.
DYHARD® is a brand for a variety of different thermosetting epoxy curing and accelerating systems. Such systems are used with almost all modern composite materials such as fiber glass-reinforced plastics or carbon components. DYHARD® products can be found in a variety of end products. These are used both in the production of rotor blades for windmills, CNG pressure cylinder containers, automotive and sports articles as well as in aircraft construction.
International Renewable Energy Agency (IRENA): Renewable Capacity Statistics 2017
Since October 9, 2017, 101,763,355 ordinary shares of AlzChem Group AG have been listed in the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange. AlzChem AG successfully transformed into the listed AlzChem Group AG (formerly Softmatic AG) through a combined cash and non-cash capital increase, raising AlzChem Group AG's share capital from EUR 310,000.00 to EUR 101,763,355.00. The non-cash capital increase was recorded in the commercial register on October 2, 2017.
Thanks to the successful contribution, AlzChem Group AG now serves as the parent company of the AlzChem Group. The company is headquartered in Norderstedt, Germany.
On November 10, 2017, AlzChem Group AG's market capitalization was EUR 391.8 million.
| ISIN/WKN | DE000A0AHT46 /A0AHT4 | ||
|---|---|---|---|
| Ticker symbol | SFP1 | ||
| Type and number of shares | 101,763,355 no-par-value bearer shares |
||
| Trading segment | Regulated Market (Prime Standard) | ||
| Designated sponsor | Baader Bank AG | ||
| Market capitalization on November 10, 2017 * |
EUR 391.8 million |
* Xetra closing price as of November 10, 2017
| SHAREHOLDERS | % |
|---|---|
| LIVIA Corporate Development SE | 47.70 |
| HDI Preminger GmbH | 26.38 |
| Edelweiß Holding GmbH | 19.79 |
| Jan Ulli Seibel | 4.93 |
| Free float | 1.19 |
NORDERSTEDT (since October 2, 2017 AlzChem Group AG)
At the Annual General Meeting of Softmatic AG held on August 4, 2017, capital increases against contributions in kind and in cash were resolved. The capital increases against contributions in kind and cash capital increases were carried out on September 26, 2017. The entry in the commercial register was still pending on the balance sheet date of September 30, 2017, and took effect on October 2, 2017. Upon registration of the completion of the capital increases in the commercial register, the company will be renamed "AlzChem Group AG" and become the parent company of the AlzChem Group. The business activities of AlzChem AG and its subsidiaries (together the "AlzChem Group" or "AlzChem") will then become the company's business.
The change in business activity will have a significant impact on the future net assets, financial position and results of operations of the company. The statements about the future business development of the company correspond to the statements about the future business development of AlzChem AG. For a better assessment of the future business development and future net assets, financial position and earnings position, this quarterly financial report contains the following reports:
BALANCE SHEET AS OF SEPTEMBER 30, 2017
| in EUR | 09/30/2016 | 12/31/2016 | 09/30/2017 |
|---|---|---|---|
| A. FIXED ASSETS | |||
| Financial assets | |||
| Shares in affiliated companies | 0.00 | 0.00 | 230,743,679.70 |
| B. CURRENT ASSETS | |||
| I. Accounts receivable and other assets | 9,971.50 | 9,731.81 | 2,114,531.00 |
| II. Cash and cash equivalents, federal bank deposits, cash at banks and checks |
2,256.31 | 2,014.17 | 1,154,618.00 |
| C. PREPAID EXPENSES | |||
| Active accruals | 0.00 | 913.00 | 0.00 |
| D. DEFICIT NOT COVERED BY EQUITY | 38,327.93 | 51,730.24 | 0.00 |
| TOTAL ASSETS | 50,555.74 | 64,389.22 | 234,012,828.70 |
| in EUR | 09/30/2016 | 12/31/2016 | 09/30/2017 |
|---|---|---|---|
| A. EQUITY | |||
| I. Subscribed capital | 310,000.00 | 310,000.00 | 310,000.00 |
| II. Capital reserve | 41,493,948.82 | 51,000.00 | 51,000.00 |
| III. Loss carried forward | -41,826,926.73 | -383,977.91 | -412,730.24 |
| IV. Net loss for the year | -15,350.02 | -28,752.33 | -235,222.39 |
| Of which not covered | 38,327.93 | 51,730.24 | 0.00 |
| V. Payments made to carry out the resolved capital increase | 0.00 | 0.00 | 233,342,806.50 |
| Of which subscribed capital | 0.00 | 0.00 | 101,453,355.00 |
| BOOK VALUE OF EQUITY | 0.00 | 0.00 | 233,055,853.87 |
| B. PROVISIONS | 1,500.00 | 10,200.00 | 622,606.04 |
| C. LIABILITIES | |||
| 1. Trade liabilities, of which with a remaining term of up to one year EUR 259,950.83 (prior year: EUR 0.00) |
0.00 | 0.00 | 259,860.83 |
| 2. Liabilities to affiliated companies | 48,805.74 | 54,189.22 | 74,507.96 |
| 3. Other liabilities | 250.00 | 0.00 | 0.00 |
| TOTAL ASSETS | 50,555.74 | 64,389.22 | 234,012,828.70 |
| in EUR | 01/01/2016 – 09/30/2016 |
01/01/2017 – 09/30/2017 |
|---|---|---|
| 1. Other operating income | 0.00 | 921,755.25 |
| 2. Other operating expenses | -15,350.02 | -1,156,658.90 |
| 3. Other interest and similar earnings | 0.00 | 0.00 |
| 4. Interest and similar expenses - of which from affiliated companies EUR 318.74 |
0.00 | -318.74 |
| 5. Taxes on income | 0.00 | 0.00 |
| 6. EARNINGS AFTER TAXES | -15,350.02 | -235,222.39 |
| 7. NET LOSS | -15,350.02 | -235,222.39 |
For the quarterly statement as of September 30, 2017, the same accounting policies have been applied as in the last annual financial statements:
The valuation of assets and liabilities takes into account all identifiable risks according to prudent business judgment.
The valuation of assets and liabilities is carried out without following the going concern premise.
The receivables, other assets and debts are valued at amortized acquisition and production costs.
Provisions are recognized at the settlement amount required by reasonable commercial judgment.
Provisions with a term of more than one year were discounted in accordance with Section 253 (2) sentence 1 HGB.
The provision for retention has a remaining term of more than one year. For reasons of materiality, discounting of the provision for safekeeping was dispensed with.
Pursuant to Section 274 HGB, deferred taxes are formed for temporary differences between the accounting and tax-related carrying amounts insofar as these differences are expected to reverse in future fiscal years and the deferred taxation pursuant to Section 274 (1) HGB must be made mandatory.
No deferred taxes are recognized for deferred tax assets due to temporary differences and existing tax loss carryforwards, if applicable, in accordance with the option under Section 274 (2) HGB.
There were no changes in the composition of the scope of consolidation; there are still no companies that need to be included / consolidated.
Capital increases against contributions in kind and cash were resolved at the Annual General Meeting held on August 4, 2017. The capital increases against contributions in kind and cash increases were carried out on September 26, 2017, and the entry in the commercial register was still outstanding as of the balance sheet date of September 30, 2017, and took effect on October 2, 2017. As of the balance sheet date, the company already has beneficial ownership of the assets from the cash and capital increase in kind. Therefore, the assets are accounted for as of September 30, 2017. Since the capital increase became legally effective only with entry in the commercial register on October 2, 2017, the counterpart in equity as of the balance sheet date is "Deposits made to carry out the resolved capital increase."
By way of the capital increase against contributions in kind, the share capital of the company was increased by EUR 100,323,339.00 to EUR 100,633,339.00 and the capital reserve by EUR 130,420,340.70 against the contribution of all shares of AlzChem AG based in Trostberg valued at EUR 310,000.00. As part of the cash capital increase, the share capital of the company was increased by an additional EUR 1,130,016.00 to EUR 101,763,355.00 and the capital reserve by EUR 1,469,020.80. As part of the capital increases against non-cash and cash contributions, a total of 101,453,355 new no-par-value shares were issued with a pro rata amount of the share capital of EUR 1.00 per share and a full dividend right from January 1, 2017. The gross proceeds from the capital increase against cash contributions amount to EUR 2,599,036.80. The net issue proceeds ensure the full repayment of existing loans and the financing of the company's ongoing administrative costs. The shares in AlzChem AG amounting to EUR 230,743,679.70 are reported under financial assets.
With the cash capital increase on September 26, 2017, the company has already received cash of EUR 1,130,016.00 corresponding to the nominal capital increase. As a result, bank balances increased significantly compared to December 31, 2016. The remaining amount from the cash capital increase was not paid until after entry in the commercial register, but it had already been recognized in the amount of EUR 1,469,020.80 under the item "Receivables and other assets" as of September 30, 2017.
Various expenses were incurred in preparing for the capital increases, which account for the increase in other operating expenses, trade payables and provisions. In a cooperation agreement, AlzChem AG has undertaken to bear all costs in connection with the capital increase in kind and cash capital increase and the listing of all shares in the company. Insofar as the expenses were incurred by Softmatic AG, they were charged to AlzChem AG. The income from the recharging is shown under other operating income and explains the increase compared to the same period of the previous year.
The company continued to have no business activity of its own during the reporting period. Upon registration of the completion of the capital increases in the commercial register, the company will change its name to "AlzChem Group AG" and become the parent company of the AlzChem Group. The business activities of AlzChem AG and its subsidiaries (together the "AlzChem Group" or "AlzChem") will then become the company's business. At the same time, the members of the Management Board of AlzChem AG, Ulli Seibel, Andreas Niedermaier and Klaus Englmaier, will also serve as members of the Management Board of AlzChem Group AG.
The change in business activity will have a significant impact on the company's future net assets, financial position and earnings position. The statements on the company's future business development correspond to the statements on the future business development of AlzChem AG. For a better assessment of the future business development and future asset, financial and earnings positions, the company's quarterly financial report includes the following additional voluntary reports to which reference is made here:
Norderstedt, October 31, 2017
The Management Board
Ulli Seibel, CEO Andreas Niedermaier, CFO Klaus Englmaier, COO
INTERIM GROUP FINANCIAL REPORT AS OF SEPTEMBER 30, 2017
The companies of the AlzChem AG Group develop, produce and market chemical products of all kinds and provide services, also as a chemical park operator. AlzChem's networked production structure "der Verbund" creates a powerful value-added chain that can be used for basic products such as metallurgical additives or fertilizers, but also for special products for a variety of different markets.
AlzChem produces at four locations in the Bavarian Chemical Triangle and in Sundsvall, Sweden. Furthermore, AlzChem has sales companies in the strategically important US and Chinese markets.
As of December 31, 2016, AlzChem prepared segment reporting in accordance with IFRS 8 for the first time. IFRS 8 requires segmentation into operating segments in accordance with the internal organizational and reporting structure. Based on the internal reporting structure, AlzChem's business model was divided into the three operational reportable business segments "Specialty Chemicals", "Basics & Intermediates" and "Other & Holding" for fiscal year 2016. The previous year's figures were also determined according to these three segments.
The "Specialty Chemicals" segment focuses on the production and distribution of high-quality growth products that contain specialty chemicals such as CreAMINO®, Creapure®, BioSelect®, Silzot®, DYHARD® and Dormex®.
The "Basics & Intermediates" segment covers the production of basic and intermediate products. On the one hand, these can be marketed as independent products, for example in steelmaking, farming and in the automotive sector; on the other hand, these basic and intermediate products also serve as raw materials for the production of specialty chemicals.
The "Other & Holding" segment comprises all other activities that cannot be assigned to the other segments. The segment offers infrastructure and energy services at our sites for the two main segments and for external customers.
As of the balance sheet date of September 30, 2017, the following companies were included in the scope of consolidation of the AlzChem Group:
| Company | Seat | Consolidation |
|---|---|---|
| AlzChem AG | Trostberg, Germany | Parent company |
| AlzChem International GmbH | Trostberg, Germany | Fully consolidated |
| AlzChem Stahltechnik GmbH | Trostberg, Germany | Fully consolidated |
| AlzChem Nutrition GmbH | Trostberg, Germany | Fully consolidated since July 2, 2015; operationally active since 2016. |
| Nigu Chemie GmbH | Waldkraiburg, Germany | Fully consolidated |
| AlzChem Shanghai Co. Ltd. | Shanghai, China | Fully consolidated |
| AlzChem LLC | Atlanta, USA | Fully consolidated |
| Dormex Company LLC | Atlanta, USA | Fully consolidated |
| Nordic Carbide AB Sundsvall, Sweden | Sundsvall, Sweden | Fully consolidated |
The International Monetary Fund (IMF) expects global economic output to increase by 3.6% this year and by 3.7% next year. The global economy grew by 3.2% in 2016, the lowest increase since the financial crisis in 2008. Industrialized countries can thus grow by 2.2% (2017) and 2.0% (2018), slightly more than had been assumed in July 2017. Growth in developing and emerging countries is significantly higher at 4.6% (2017) and 4.9% (2018).1
According to the IMF, the economy in the eurozone will grow by an average of 2.1% (2017) and 1.9% (2018).2
The German economy is experiencing a steady and broadly based upswing with a solid domestic foundation. Capacities are well utilized, employment continues to rise and consumer prices are stable. In its fall forecast, the German federal government expects the gross domestic product to rise by 2.0% after adjustments for the current year. An increase of 1.9% is expected for 2018.3
The production of the chemical-pharmaceutical industry has continuously increased in recent months. Cumulatively for the first eight months of 2017, the production of chemicals and pharmaceuticals is now 2.6% above the same period of the previous year.4
If we look exclusively at the foreign trade of the chemical industry, imports of chemical and pharmaceutical products in 2017 are about 8% above the previous year. Exports exceeded the previous year's level by 7.7%. Exports to Europe and the NAFTA region were particularly dynamic. Extremely strong import increases can be reported from Asia, Africa and Latin America.5
The global development of AlzChem's end-user industries varied in the first nine months of 2017. There were regional differences as well as different developments within the industries. Demand from the area of nutrition (feed and nutritional supplements) continued to show strong momentum and was able to seamlessly follow the pleasing trend of the previous year. The increase in capacity utilization in crude steel production6 largely translated into higher sales of metallurgical products.
The global agricultural chemicals7 market developed relatively heterogeneously. This was also reflected in AlzChem's business, so that the company perceived significant regional and product-related differences in this sector. Particularly in South America, gains were recorded in terms of direct marketing and the extension of the areas of application. Likewise, contrary to the general trend,8 stable quantities of specialty fertilizers were sold in the domestic market. In contrast, intermediate production developed in a much more subdued manner. Deliveries to the pharmaceutical industry were below the levels of the previous year, contrary to the macroeconomic trend.9
2 http://www.handelsblatt.com/politik/international/iwf-prognose-im-schatten-von-brexit-und-trump/20437140.html
1 http://www.dw.com/de/iwf-weltwirtschaft-bleibt-auf-moderatem-wachstumskurs/a-40893103
3 https://www.bmwi.de/Redaktion/DE/Dossier/wirtschaftliche-entwicklung.html
4 Chemie – Barometer VCI as of October 20, 2017
5 Chemie – Barometer VCI as of October 20, 2017
6 http://www.stahl-online.de/index.php/statistiken/#konjunkturlage
7 http://www.chemanager-online.com/news-opinions/grafiken/agrarchemiemarkt-spuert-klimaeffekte
8 http://www.chemanager-online.com/news-opinions/grafiken/agrarchemiemarkt-spuert-klimaeffekte
9 https://www.vci.de/die-branche/wirtschaftliche-lage/vci-chemie-barometer-chemiekonjunktur.jsp
Total revenue after the first nine months of 2017 increased by EUR 22,261 thousand (8.7%) to EUR 272,723 thousand compared to the first nine months of the previous year. With largely stable prices, the increase in sales was primarily achieved by increasing the volumes sold. Positive sales development was achieved across all three segments, whereby the absolute highest increase was achieved in the Specialty Chemicals segment.
EBITDA and EBIT also improved compared to the previous year, although this increase was disproportionately low compared to sales. At Group level, adjusted10 EBITDA increased by EUR 4,672 thousand (13.0%) to EUR 40,525 thousand and adjusted EBIT by EUR 3,893 thousand (14.8%) to EUR 30,218 thousand. The Specialty Chemicals segment was the largest absolute contributor to the increase in EBITDA and EBIT. The significant and sustained increases in raw material prices, in Q3 2017 in particular, increasingly burdened the Group's profitability.
As of January 1, 2016, AlzChem AG concluded a new investment and site development agreement. This agreement calls for the AlzChem Group to grant a bonus to the employees of AlzChem AG and NIGU Chemie GmbH under this contract in the event that AlzChem AG concludes a successful IPO or is sold to a third party. Depending on the length of service, the bonus comprises a maximum of one month's salary and must be paid out in the month following the IPO or sale.
In the financial statements for the third quarter of the previous year, the expense and an associated provision, taking deferred taxes into account, were already fully taken into account in the estimated employee bonus. The amount due in the next twelve months was calculated by forecasting the number of employees in the company at the estimated date of the IPO, taking into account any potential salary changes up to that date. An amount of EUR 6,256 thousand, including deferred taxes of EUR 1,752 thousand, was recognized.
| Key figure in EUR thousand | 09/30/2016 | Key figure in EUR thousand | 09/30/2016 |
|---|---|---|---|
| EBIT | 20,069 | EBITDA | 29,597 |
| IPO bonus | 6,256 | IPO bonus | 6,256 |
| Adjusted EBIT | 26,325 | Adjusted EBITDA | 35,853 |
Scheduled depreciation at Group level increased by EUR 779 thousand (8.2%) to EUR 10,307 thousand compared to the nine-month figures for 2016. The continued negative financial result at Group level improved by EUR 1,895 thousand (50.1%) in 2017 to EUR -1,884 thousand compared to the same period in 2016. This improvement is mainly attributable to a lower interest rate component for pension provisions.
In summary, it can be said that AlzChem successfully asserted itself on the sales markets despite a continuously competitive market environment, significantly increased its sales overall, strengthened the market position of its established products and continuously expanded the positioning of its new products.
10 In a company agreement, a bonus was agreed for the employees of the AlzChem AG Group subject to this agreement in the event of a successful IPO. In the quarterly financial statements for Q3 2016, the expense for this bonus was calculated and an associated provision was made, taking deferred taxes into account. The provision amounted to EUR 6,256 thousand, including deferred taxes of EUR 1,752 thousand. For better comparability of the periods, therefore, adjusted EBITDA is used. Adjusted EBITDA = EBITDA excluding the employee bonus for a successful IPO (EUR 6,256 thousand) and the one-off project costs (EUR 2,278 thousand) for the IPO
The most important financial performance indicators developed as follows during the reporting period:
| Figure | Calculation | 12/31/2016 | 09/30/2017 | Delta |
|---|---|---|---|---|
| Equity ratio in% | equity total assets |
20.3 | 21.2 | +0.9% points |
| Inventory assets in EUR thousand | Absolute stock | 64,052 | 62,787 | -1,265 |
The operating performance in the first three quarters of 2017 was quite positive for the AlzChem AG Group.
The key profitability indicators of the AlzChem AG Group developed as follows:
| Figure | Calculation | 09/30/2016 | 09/30/2017 | Delta |
|---|---|---|---|---|
| Adjusted EBITDA in EUR thousand |
Earnings before interest, income taxes and depreciation |
35,853 | 40,525 | +4,672 |
| Adjusted EBIT in EUR thousand |
Earnings before interest and income taxes |
26,325 | 30,218 | +3,893 |
| Adjusted EBITDA margin in% | EBITDA Sales revenues |
14.3 | 14.9 | +0.6% -Punkte |
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| External sales | 128,007 | 141,594 | 13,587 |
| EBITDA | 29,905 | 32,045 | 2,140 |
| Depreciation | 3,671 | 3,769 | 98 |
| EBIT | 26,234 | 28,276 | 2,042 |
| Inventories | 35,613 | 39,724 | 4,111 |
The sustained growth in the Specialty Chemicals segment continued with sales growth of +11%. Sales in the first nine months that ended on September 30, 2017, amounted to EUR 141,594 thousand.
The nutrition sector (food and nutritional supplements) with the brands CreAMINO® and Creapure® was the main source of growth. In addition, the positioning of the Dormex® brand was expanded even further. Shipments of Dyhard® to the wind energy sector11 were slightly down on the previous year, although demand12 clearly picked up, in the third quarter of 2017 in particular. AlzChem expects to be able to participate more in the expected positive market development with new solutions in the future.
As planned, inventories of CreAMINO® were increased. The expected market growth can therefore be accompanied longer from the existing production plant. A new production facility for CreAMINO® is scheduled to go into operation in 2019. A corresponding investment decision has already been made. The capacity for CreAMINO® production would then triple from about 7,000 tons annually to about 21,000 tons.
11 https://www.wind-energie.de/presse/pressemitteilungen/2017/ausbauzahlen-fuer-das-erste-halbjahr-2017-deutschland-windenergie
12 http://windmonitor.iwes.fraunhofer.de/windmonitor_de/1_wind-im-strommix/1_energiewende-in-deutschland/5_Ausbau_der_Windenergie/
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| External sales | 104,259 | 110,540 | 6,281 |
| EBITDA | 4,769 | 6,494 | 1,725 |
| Depreciation | 2,779 | 3,134 | 355 |
| EBIT | 1,990 | 3,360 | 1,370 |
| Inventories | 20,464 | 21,047 | 583 |
In the Basics & Intermediates segment, sales increased by 6.0% or EUR 6,281 thousand to EUR 110,540 thousand.
Despite sharply rising raw material prices, AlzChem achieved significant earnings growth. Above all, the expansion of the delivery volume in the automotive sector contributed significantly to the positive business development.
The metallurgical business largely followed the general market trend and also benefited from continued volume growth of the new product CalciPro®, albeit at a still low level.
AlzChem also generated growth in the NITRALZ® brand, whereby the optimized market position in Asia contributed significantly to this growth.
The slight increase in inventories in the segment reflected higher than planned sales.
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| External sales | 18,207 | 20,632 | 2,425 |
| EBITDA | 489 | -729 | -1,218 |
| Depreciation | 2,996 | 3,312 | 316 |
| EBIT | -2,507 | -4,041 | -1,534 |
| Inventories | 1,651 | 3,659 | 2,008 |
The volume of business from the chemical parks in Trostberg and Hart recorded a significant increase in sales of EUR 2,425 thousand (13.3%) to EUR 20,632 thousand. This was mainly due to the increased demand for the site services power generation, warehousing and logistics services as well as disposal services. The decline in EBITDA and EBIT compared to the prior year period is mainly due to one-time project costs prior to the planned contribution of AlzChem AG to Softmatic AG, which took place in October 2017.
The increase in segment inventories by EUR 2,008 thousand to EUR 3,659 thousand is due in part to a temporary increase in supplies.
On February 7, 2017, AlzChem AG postponed its initial listing on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange scheduled for February 10, 2017. However, the original target of an initial listing for the company during the course of fiscal year 2017 was retained.
In April 2017, AlzChem AG was informed that its shareholders LIVIA Corporate Development SE, HDI Preminger GmbH, Edelweiss Holding GmbH and Mr. Jan Ulli Seibel were considering contributing the shares in the company as part of a combined capital increase against contributions in kind and cash into Softmatic AG. Softmatic AG is a listed company without operational activities, which would be activated by AlzChem's contribution.
The Management Board of AlzChem AG fully supported this endeavor. Both the shareholders of AlzChem AG and Softmatic AG approved of the activation of Softmatic AG at the respective general meetings by contributing AlzChem AG as part of a combined capital increase against contributions in kind and cash.
The transactions were entered in the commercial register on October 2, 2017. Furthermore, the Annual General Meeting of Softmatic AG held on August 4, 2017, approved various amendments to the Articles of Association that are required as part of the planned activation of the company and the associated reorientation of business operations. Essentially, the object of the company, the company (new: AlzChem Group AG) and the composition of the Supervisory Board were changed
| Company | Seat | Consolidation |
|---|---|---|
| AlzChem Group AG | Norderstedt (in the future Trostberg), Germany |
Parent company |
| AlzChem AG | Trostberg, Germany | Fully consolidated |
| AlzChem International GmbH | Trostberg, Germany | Fully consolidated |
| AlzChem Stahltechnik GmbH | Trostberg, Germany | Fully consolidated |
| AlzChem Nutrition GmbH | Trostberg, Germany | Fully consolidated since July 2, 2015; operationally active since 2016. |
| Nigu Chemie GmbH | Waldkraiburg, Germany | Fully consolidated |
| AlzChem Shanghai Co. Ltd. | Shanghai, China | Fully consolidated |
| AlzChem LLC | Atlanta, USA | Fully consolidated |
| Dormex Company LLC | Atlanta, USA | Fully consolidated |
| Nordic Carbide AB Sundsvall, Sweden | Sundsvall, Sweden | Fully consolidated |
The scope of consolidation of the AlzChem Group AG Group includes from October 2017 on:
| in EUR thousand | 12/31/2016 | 09/30/2017 |
|---|---|---|
| ASSETS | ||
| Intangible assets | 807 | 822 |
| Fixed assets | 104,827 | 106,399 |
| Non-current financial assets | 20 | 20 |
| Other receivables and assets | 270 | 358 |
| Deferred tax assets | 28,361 | 25,704 |
| Non-current assets | 134,285 | 133,303 |
| Inventories | 64,052 | 62,787 |
| Trade receivables | 35,444 | 47,322 |
| Current financial assets | 0 | 36 |
| Other receivables and assets | 17,962 | 16,619 |
| Tax assets | 42 | 47 |
| Cash and cash equivalents | 12,089 | 12,742 |
| Current assets | 129,589 | 139,552 |
| Assets | 263,874 | 272,855 |
| CAPITAL | ||
| Equity | 53,487 | 57,901 |
| Non-current foreign capital | 149,323 | 141,743 |
| Current foreign capital | 61,065 | 73,210 |
| Total assets | 263,874 | 272,855 |
The Group equity ratio has remained largely stable since December 31, 2016, (20.3%) at 21.2%. In the reporting period, this key figure was positively influenced by the strong operating performance and the decline in pension provisions due to the higher level of interest rates. Due to the distributed cash dividend in almost the same amount, this effect was counteracted.
Inventories amounted to EUR 62,787 thousand as of September 30, 2017, which is EUR 1,265 thousand (2.0%) lower than the year-end 2016 figure due to the high volumes, mainly within the Basics & Intermediates segment.
Trade receivables showed a strong increase compared to December 31, 2016. This was mainly due to the very strong increase in sales in 2017 in areas with payment terms of more than 45 days.
The decline in deferred tax assets mainly resulted from the interest-related decrease in pension provisions compared to December 31, 2016.
The reduction in non-current foreign capital is mainly due to the decrease in pension provisions and the scheduled repayment of loan liabilities.
Current foreign capital increased significantly by EUR 12,145 thousand (19.9%) to EUR 73,210 thousand. The main reason for this is the use of short-term financing lines in the amount of EUR 9,240 thousand, which were not available as of December 31, 2016.
Investments totaling EUR 12,187 thousand were made in the first nine months of fiscal year 2017. As a result, investments were EUR 89 thousand below the prior-year period. Investments were made mainly in the areas of production and infrastructure. The investment objectives mainly included conservation, expansion, modernization and rationalization.
The change in cash and cash equivalents is as follows:
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 |
|---|---|---|
| Cash and cash equivalents on January 1 | 10,273 | 12,089 |
| Cash inflow from operating activities (Net cash flow) | 28,312 | 24,602 |
| Cash outflow from investing activities | -12,181 | -12,124 |
| Cash outflow from financing activities | -11,383 | -11,737 |
| Exchange rate-related changes in cash and cash equivalents | -47 | -88 |
| Cash and cash equivalents on September 30 | 14,973 | 12,742 |
| Net decrease (-) / increase (+) in cash and cash equivalents | 4,747 | 741 |
Cash and cash equivalents amounted to EUR 12,742 thousand compared to EUR 12,089 thousand on December 31, 2016.
The cash outflow from financing activities included a cash dividend of EUR 17,775 thousand, which was thus EUR 9,775 thousand higher than in the same period of the previous year. The repayments of non-current loans decreased by EUR 129 thousand. The utilization of current financing lines increased by EUR 9,240 thousand to EUR 9,240 thousand compared to the same period of the previous year.
3.3.1. Earnings position
The result for the first nine months of 2017 is calculated as follows:
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| Sales revenue | 250,462 | 272,723 | 22,261 |
| Changes in finished goods and work in progress | -2,261 | -961 | 1,300 |
| Other operating earnings | 8,672 | 7,570 | -1,102 |
| Costs of materials | -95,007 | -105,364 | -10,357 |
| Operating personnel expenses | -77,602 | -81,823 | -4,221 |
| Employee bonus for the successful IPO | -6,256 | 0 | 6,256 |
| Other operating expenses | -48,412 | -53,898 | -5,486 |
| EBITDA | 29,597 | 38,247 | 8,650 |
| Depreciation | -9,528 | -10,307 | -779 |
| EBIT | 20,069 | 27,939 | 7,870 |
| Other interest and similar earnings | 274 | 434 | 160 |
| Interest and similar expenses | -4,053 | -2,318 | 1,735 |
| Financial result | -3,779 | -1,884 | 1,895 |
| Result from ordinary business activities | 16,290 | 26,055 | 9,765 |
| Taxes on income and profit | -4,447 | -7,048 | -2,601 |
| Consolidated result | 11,843 | 19,008 | 7,165 |
| Of which non-controlling shareholdings in the consolidated result | -57 | 168 | 225 |
| Of which shareholdings of the shareholders of AlzChem AG in the consolidated result |
11,900 | 18,840 | 6,940 |
| Earnings per share in EUR (undiluted and diluted)13 | 1.08 | 1.71 | 0.63 |
The operating result for 01 – 09/2016 (excluding the IPO bonus) is as follows compared to the nine-month period of the current fiscal year 2017:
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| Sales revenues | 250,462 | 272,723 | 22,261 |
| Changes in finished goods and work in progress | -2,261 | -961 | 1,300 |
| Other operating earnings | 8,672 | 7,570 | -1,102 |
| Costs of materials | -95,007 | -105,364 | -10,357 |
| Operating personnel expenses | -77,602 | -81,823 | -4,221 |
| Other operating expenses14 | -48,412 | -51,620 | -3,208 |
| Adjusted EBITDA | 35,853 | 40,525 | 4,672 |
| Depreciation | -9,528 | -10,307 | -779 |
| Adjusted EBIT | 26,325 | 30,218 | 3,893 |
| Other interest and similar earnings | 274 | 434 | 160 |
| Interest and similar expenses | -4,053 | -2,318 | 1,735 |
| Financial result | -3,779 | -1,884 | 1,895 |
| Result from ordinary operating activities | 22,546 | 28,334 | 5,788 |
Compared to the same period of the previous year, sales increased by EUR 22,261 thousand (8.9%) to EUR 272,723 thousand. The product groups CreAMINO® and the products of the brand NITRALZ® in particular contributed significantly and sustainably to the increase in sales. Despite a difficult market environment for European agriculture, the volumes of the fertilizer Perlka® sold could be increased in this market as well.
Other operating income decreased by EUR 1,102 thousand (12.7%) to EUR 7,570 thousand compared to the previous year. This was due in particular to lower income from currency translation of EUR 425 thousand and EUR 966 thousand lower income from the reversal of provisions and liabilities.
The cost of materials increased by EUR 10,357 thousand (10.9%) to EUR 105,364 thousand due to higher sales. The cost of materials ratio – the ratio of cost of materials to sales – increased by 0.7 percentage points to 38.6% after nine months (previous year: 37.7%). The rising raw material costs were the main reason for this development.
Operating15 personnel expenses increased in the nine-month period by EUR 4,221 thousand (5.4%) to EUR 81,823 thousand compared to the same period of the previous year. The wage increase at the German sites was 2.0%. Wages and salaries at foreign sites rose by between 2% and 7%. The personnel expense ratio as a ratio of operating personnel expenses to sales fell from 31.0% in the previous year to 30.0%. This includes an increase of 1.75% in the regular wage increase applicable at the German sites and an additional increase of 0.25% based on an EBIT margin of > 9.5% in fiscal year 2016.
On September 30, 2017, the AlzChem AG Group had a total of 1,523 employees and increased its headcount significantly compared to the previous year's reporting date (September 30, 2016: 1,490 employees). The buildup was essentially due to increasing production volumes.
14 Excluding project costs for the IPO in amount of EUR 2,278 thousand
15 Excluding the employee bonus for the successful IPO
Other operating expenses increased by EUR 3,208 thousand (6.6%) to EUR 51,620 thousand. There was a substantial increase in third-party services and maintenance expenses. On the one hand, this was due to the slight increase in the chemical park business, and on the other hand to the partly higher capacity utilization and correspondingly increased maintenance requirements. As a further consequence of the increased production volumes, external environmental and disposal costs also increased. Furthermore, project costs for the contribution of AlzChem AG to AlzChem Group AG are also reflected. These non-operating one-off costs amounted to EUR 2,278 thousand.
Research and development expenses included in other operating expenses are only external research and development costs. In total, research and development costs of EUR 6,869 thousand (previous year: EUR 6,379 thousand) were expensed in the period.
| in EUR thousand | 01 – 09/2016 | 01 – 09/2017 | Delta |
|---|---|---|---|
| Research and development expenses | 6,379 | 6,869 | +490 |
| In relation to sales | 2.5% | 2.5% | -% points |
Scheduled depreciation for intangible assets and property, plant and equipment increased by EUR 779 thousand to EUR 10,307 thousand compared to the same period in 2016. The increase in the depreciation is attributable to the Group's extensive investment activity in previous years.
The financial result improved by EUR 1,895 thousand (50.1%) to EUR -1,884 thousand. For the most part, this was due to significantly lower interest on long-term provisions (mainly pension and landfill provisions) than in the prior-year period.
Tax expenses rose to EUR 7,048 thousand due to the nearly stable tax rate as a result of earnings.
The resulting net profit for the year (including the employee bonus for the successful IPO) improved significantly by EUR 7,165 thousand (60.5%) to EUR 19,008 thousand. The share of profit attributable to non-controlling interests increased due to the fact that 6% of the shares in AlzChem International GmbH were distributed to shareholders by way of a non-cash dividend and the earnings contribution of this Group company is now recognized proportionately in the result of non-controlling interests.
The increase in the consolidated annual result also led to an increase in earnings per share of EUR 0.63 to EUR 1.71 per share, based on a total of 11,000,000 shares in AlzChem AG as of the reporting date of September 30, 2017.
Due to its own planning as well as external market analyses and estimates for the full year 2017, the Management Board of the AlzChem AG Group continues to expect a competitive, but fundamentally stable, market environment. No significant changes are expected with regard to the intensity and aggressiveness of competitors, especially from the Indian and Asian regions.
The Management Board of the AlzChem AG Group continues to expect organic growth in the Specialty Chemicals segment in 2017. The forecast for significantly higher sales in the management report as of December 31, 2016, still applies. Although shifts will occur within the segment, the targeted profitability targets will be met or exceeded. The volumes in the industrial chemicals business and the agricultural chemicals market remain under pressure, but can be more than offset by rising demand from the food and renewable energy sectors. The development of customer-specific specialty chemical solutions is also looking very positive.
Despite a continuing burden on the market environment16 in the steel industry, AlzChem expects a solid volume development and thus a slight increase in sales in the Basics & Intermediates segment. In particular, the new and innovative products such as CalciPro® and new developments in the Nitralz® range can have a compensatory effect in terms of the rise in raw material prices and the increasing price and quantity pressure of metallurgical applications.
For the chemical park business in the Other & Holding segment, AlzChem expects a slight increase in sales in 2017 as a whole. At the beginning of the year, AlzChem had anticipated a slight decline in sales.
Taking into account the anticipated segment developments, the Management Board confirms its full-year forecast for Grouplevel sales (slight to medium increase) communicated in the 2016 Group Management Report.
The Board of Management sticks to the forecast for the development of the key figures EBITDA and EBIT at Group level. At the segment level, Specialty Chemicals will continue to grow strongly in terms of EBITDA and EBIT. For Basics & Intermediates, a stable development of EBITDA and EBIT is expected, with clear signs of developments in the commodity markets.17 In the Other & Holding segment, the one-time costs for the contribution of AlzChem AG to AlzChem Group AG as well as the necessary technical reorganization measures put a strain on the result, so that the stable development of EBITDA and EBIT are no longer fully confirmed. The Management Board expects a slight decline in both key figures in this segment.
With regard to the key performance indicator inventories, the Management Board assumes that the absolute value will develop slightly below the forecast given in the 2016 annual financial statements.
The strong operating result and the increase in interest rates for the calculation of pension provisions led to a largely stable development of the equity ratio despite a high dividend, so that a slight increase in the equity ratio can still be expected.
In the Group Management Report as of December 31, 2016, the Management Board anticipated the possibility of a significant improvement in the equity ratio against the background of a successful IPO including a capital increase. Since the IPO was not carried out in its originally planned form, this situation has not materialized.
Nevertheless, in order to be able to support the growth, which is mainly due to the expansion of production capacities for CreAMINO® under the changed conditions, the company is already engaged in promising financing negotiations. Based on the planned form of financing, there will be an increase in the debt capital ratio in the Group.
Future-oriented statements are based, among other aspects, on unchanged regulatory framework conditions, such as the continuation of the Renewable Energy Sources Act (EEG), Section 19 (2) StromNEV, electricity price compensation or product approvals. It also contains forward-looking statements based on the management's current estimates and currently available information.
Such statements are subject to risks and uncertainties beyond AlzChem's ability to control or accurately estimate, such as the future market environment and economic conditions, the behavior of other market participants, the successful integration of acquisitions and realization of expected synergies, and governmental actions. Should any of these uncertainties or other uncertainties materialize, or should the assumptions on which these statements are based prove to be incorrect, the actual results could differ materially from those expressed or implied by such statements.
16 Media information: Steel industry welcomes new EU anti-dumping rules - practical test still pending (Economic Association Steel) 17 COKE & ANTHRACITE MARKET REPORT September 25, 2017
As an internationally operating Group with a broad product portfolio, the AlzChem AG Group is subject to numerous opportunities and risks. The individual opportunities and risks were defined in detail in the Risk and Opportunity Report of the Group Management Report as of December 31, 2016, and an assessment of the significance for the AlzChem AG Group was made. The risk situation of the AlzChem AG Group has changed marginally compared to the end of 2016 to some extent. Nevertheless, the current valuation continues to show that none of the reported risks threaten the existence of the company. Furthermore, there are still no signs of interdependencies that could threaten the survival of the company.
Due to the diversified product portfolio, the know-how and market expertise as well as the sustained innovative strength, the Management Board of the company is convinced that the opportunities arising from its entrepreneurial activities can be realized and the challenges arising from the risks mentioned in the 2016 Group Management Report successfully met.
In September 2017, the shareholders of AlzChem AG contributed their shares in AlzChem AG to Softmatic AG by way of a contribution in kind in exchange for new shares (capital increase in kind).
At the Annual General Meeting of Softmatic AG on August 4, 2017, a cash capital increase was approved in addition to the capital increase in kind. The capital increase in kind and cash capital increases were carried out on September 26, 2017, while the entry in the commercial register was still pending on the balance sheet date of September 30, 2017, and took place on October 2, 2017.
At the Annual General Meeting on August 4, 2017, it was also resolved to change the Articles of Association and the name of Softmatic AG to AlzChem Group AG, which also became effective upon entry in the commercial register on October 2, 2017.
By way of the capital increase in kind, the share capital of Softmatic AG will be increased by EUR 100,323,339.00 from EUR 310,000.00 to EUR 100,633,339.00 in return for the contribution of all shares in AlzChem AG. As part of the cash capital increase, the share capital of the company will be increased by another EUR 1,130,016.00 to EUR 101,763,355.00. As part of the capital increases against contributions in kind and cash, a total of 101,453,355 new no-par-value shares with a pro rata amount of the share capital of EUR 1.00 per share and a full dividend right will be issued from January 1, 2017, on. The gross proceeds from the capital increase against cash contributions amounted to EUR 2,599,036.80.
The transaction will not become legally effective until it has been entered in the commercial register and will therefore only be accounted for as of the reporting date of October 2, 2017.
As of the reporting date of the capital increase in kind in the commercial register, in other words as of October 2, 2017, the members of the Management Board of AlzChem AG, Ulli Seibel, Andreas Niedermaier and Klaus Englmaier were also appointed members of the Management Board of AlzChem Group AG.
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JANUARY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 01/01 - 09/30/2016 | 01/01 - 09/30/2017 |
|---|---|---|
| Sales revenue | 250,462 | 272,723 |
| Changes to the inventory of finished goods and work in progress | -2,261 | -961 |
| Other operating income | 8,672 | 7,570 |
| Costs of materials | -95,007 | -105,364 |
| Operative personnel expenses | -77,602 | -81,823 |
| Employee bonus for the successful IPO | -6,256 | 0 |
| Other operating expenses | -48,412 | -53,898 |
| EBITDA | 29,597 | 38,247 |
| Depreciation | -9,528 | -10,307 |
| EBIT | 20,069 | 27,939 |
| Other interest and similar earnings | 274 | 434 |
| Interest and similar expenses | -4,053 | -2,318 |
| Financial result | -3,779 | -1,884 |
| Result from ordinary business activities | 16,290 | 26,055 |
| Income taxes | -4,447 | -7,048 |
| Consolidated result/net income | 11,843 | 19,008 |
| Of which non-controlling interests in the consolidated result | -57 | 168 |
| Of which shares of shareholders in AlzChem AG in the consolidated result | 11,900 | 18,840 |
| Earnings per share in EUR (undiluted and diluted) | 1.08 | 1.71 |
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JULY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 07/01/ -09/30/2016 | 07/01/ -09/30/2017 |
|---|---|---|
| Sales revenue | 76,969 | 89,909 |
| Changes to the inventory of finished goods and work in progress | 723 | -2,498 |
| Other operating income | 2,974 | 2,336 |
| Cost of materials | -30,284 | -36,441 |
| Operative personnel expenses | -24,753 | -25,625 |
| Employee bonus for the successful IPO | -6,256 | 0 |
| Other operating expenses | -14,094 | -17,358 |
| EBITDA | 5,278 | 10,322 |
| Depreciation | -3,260 | -3,483 |
| EBIT | 2,019 | 6,839 |
| Other interest and similar earnings | 57 | 119 |
| Interest and similar expenses | -1,348 | -962 |
| Financial result | -1,291 | -844 |
| Result from ordinary business activities | 727 | 5,996 |
| Income taxes | -224 | -1,635 |
| Consolidated result/net income | 504 | 4,360 |
| Of which non-controlling interests in the consolidated result | -37 | 23 |
| Of which shareholdings of shareholders in AlzChem AG in the consolidated result | 541 | 4,337 |
| Earnings per share in EUR (undiluted and diluted) | 0.05 | 0.39 |
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JANUARY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 01/01 - 09/30/2016 | 01/01 - 09/30/2017 |
|---|---|---|
| Consolidated result | 11,843 | 19,008 |
| Other earnings | ||
| Items that are not reclassified to the income statement: | ||
| Result from the revaluation of defined benefit plans | -25,464 | 5,667 |
| Deferred taxes on items that are not reclassified to the income statement | 7,133 | -1,587 |
| Total items that are not reclassified to the income statement | -18,331 | 4,080 |
| Items that are reclassified to the income statement: | ||
| Market valuation of derivatives in hedging relationships | 0 | 0 |
| Differences arising from currency translation | -153 | -901 |
| Deferred taxes on items that are reclassified to the income statement | 0 | 0 |
| Total items that are reclassified to the income statement | -153 | -901 |
| Other comprehensive income | -18,483 | 3,179 |
| Of which non-controlling interests in other comprehensive income | -5 | -16 |
| Of which shareholdings of shareholders in AlzChem AG in other comprehensive income |
-18,479 | 3,195 |
| Total comprehensive income /loss | -6,640 | 22,187 |
| Of which non-controlling interests in total comprehensive income /loss | -61 | 152 |
| Of which shareholdings of shareholders of AlzChem AG in total comprehensive income /loss |
-6,579 | 22,035 |
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JULY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 07/01/ -09/30/2016 | 07/01/ -09/30/2017 |
|---|---|---|
| Consolidated result | 504 | 4,360 |
| Other earnings | ||
| Items that are not reclassified to the income statement: | ||
| Result from the revaluation of defined benefit plans | 71 | -29 |
| Deferred taxes on items that are not reclassified to the income statement | -20 | 8 |
| Total items that are not reclassified to the income statement | 51 | -21 |
| Items that are reclassified to the income statement: | ||
| Market valuation of derivatives in hedging relationships | 0 | 0 |
| Differences arising from currency translation | 30 | -287 |
| Deferred taxes on items that are reclassified to the income statement | 0 | 0 |
| Total items that are reclassified to the income statement | 30 | -287 |
| Other comprehensive income | 81 | -308 |
| Of which non-controlling interests in other comprehensive income | -1 | -3 |
| Of which shareholdings of shareholders in AlzChem AG in other comprehensive income |
82 | -305 |
| Total comprehensive income /loss | 585 | 4,052 |
| Of which non-controlling interests in total comprehensive income /loss | -38 | 20 |
| Of which shareholdings of shareholders of AlzChem AG in total comprehensive income /loss |
622 | 4,032 |
OF ALZCHEM AG, TROSTBERG, AS OF SEPTEMBER 30, 2017
| in EUR thousand | 12/31/2016 | 09/30/2017 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 807 | 822 |
| Fixed assets | 104,827 | 106,399 |
| Financial assets | 20 | 20 |
| Other receivables and assets | 270 | 358 |
| Deferred tax claims | 28,361 | 25,704 |
| Total non-current assets | 134,285 | 133,303 |
| Current assets | ||
| Inventories | 64,052 | 62,787 |
| Trade receivables | 35,444 | 47,322 |
| Financial assets | 0 | 36 |
| Other receivables and assets | 17,962 | 16,619 |
| Income tax claims | 42 | 47 |
| Cash and cash equivalents | 12,089 | 12,742 |
| Total current assets | 129,589 | 139,552 |
| Total Assets | 263,874 | 272,855 |
| in EUR thousand | 12/31/2016 | 09/30/2017 |
|---|---|---|
| EQUITY | ||
| Capital and reserves | ||
| Subscribed capital | 11,000 | 11,000 |
| Capital reserve | 24,981 | 24,981 |
| Other cumulative equity | -30,984 | -27,788 |
| Net profit | 48,353 | 47,493 |
| 53,350 | 55,687 | |
| Non-controlling interests | 137 | 2,215 |
| Total equity | 53,487 | 57,901 |
| DEBT | ||
| Non-current debt | ||
| Pension provisions and similar commitments | 104,904 | 101,054 |
| Other provisions | 17,051 | 17,716 |
| Loan liabilities to credit institutes | 24,805 | 20,604 |
| Financing lease liabilities | 223 | 223 |
| Other liabilities | 0 | 10 |
| Deferred tax liabilities | 2,340 | 2,137 |
| Total non-current debt | 149,322 | 141,743 |
| Total debt | ||
| Other provisions | 7,183 | 7,315 |
| Loan liabilities to credit institutes | 5,601 | 15,942 |
| Financial liabilities | 142 | 0 |
| Accounts payable trade | 21,701 | 22,449 |
| Other liabilities | 23,425 | 24,735 |
| Income tax liabilities | 3,011 | 2,769 |
| Total other debt | 61,065 | 73,210 |
| Total debt | 210,388 | 214,955 |
| Total equity and debt | 263,874 | 272,855 |
OF ALZCHEM AG, TROSTBERG FOR THE PERIOD FROM JANUARY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | Subscribed capital | Capital reserve |
|---|---|---|
| Status as of 01/01/2016 | 1,000 | 24,981 |
| Capital increase from own equity | 10,000 | 0 |
| Dividend | 0 | 0 |
| Payment to non-controlling interests | 0 | 0 |
| Total transactions with shareholders | 10,000 | 0 |
| Consolidated result | 0 | 0 |
| Other result | 0 | 0 |
| Total consolidated result | 0 | 0 |
| Status as of 09/30/2016 | 11,000 | 24,981 |
| Status as of 01/01/2017 | 11,000 | 24,981 |
| Cash dividend | 0 | 0 |
| Non-cash dividend | 0 | 0 |
| Payment to non-controlling interests | 0 | 0 |
| Total transactions with shareholders | 0 | 0 |
| Consolidated result | 0 | 0 |
| Other result | 0 | 0 |
| Total consolidated result | 0 | 0 |
| Status as of 09/30/2017 | 11,000 | 24,981 |
| Total equity | Non-controlling interests | Shareholdings of the shareholders in AlzChem AG |
Net profit | Other cumulative equity |
|---|---|---|---|---|
| 57,104 | 200 | 56,904 | 51,075 | -20,152 |
| 0 | 0 | 0 | -10,000 | 0 |
| -8,000 | 0 | -8,000 | -8,000 | 0 |
| -52 | -52 | 0 | 0 | 0 |
| -8,052 | -52 | -8,000 | -18,000 | 0 |
| 11,843 | -57 | 11,900 | 11,900 | 0 |
| -18,483 | -5 | -18,479 | 0 | -18.,479 |
| -6,640 | -61 | -6,579 | 11,900 | -18,479 |
| 42,412 | 87 | 42,325 | 44,975 | -38,631 |
| 53,487 | 137 | 53,350 | 48,353 | -30,984 |
| -17,775 | 0 | -17,775 | -17,775 | 0 |
| 1,925 | -1,925 | -1,925 | 0 | |
| 0 | 0 | 0 | 0 | |
| -17,775 | 1,925 | -19,700 | -19,700 | 0 |
| 19,008 | 168 | 18,840 | 18,840 | 0 |
| 3,179 | -16 | 3,195 | 0 | 3,195 |
| 22,187 | 152 | 22,035 | 18,840 | 3,195 |
| 57,901 | 2,215 | 55,687 | 47,493 | -27,788 |
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JANUARY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 01/01/ -09/30/2016 | 01/01/ -09/30/2017 |
|---|---|---|
| Consolidated earnings before taxes | 16,290 | 26,055 |
| (+) Depreciation on fixed and intangible assets | 9,528 | 10,307 |
| Increase / decrease in pension provisions | -419 | -471 |
| Profit (-) from the sale of non-current assets | -11 | -62 |
| Addition employee bonus for the IPO | 6,256 | 0 |
| Other non-cash income (-) and expenses (+) | 1,349 | 3,831 |
| Financial result | 3,779 | 1,884 |
| Interest received | 239 | 215 |
| Interest paid | -605 | -473 |
| Income taxes paid | -3,982 | -6,886 |
| Decrease in inventories | 2,519 | 61 |
| Increase in account receivables | -7,111 | -10,607 |
| Decrease in liabilities arising from trade payables, other liabilities and other provisions | 455 | 1,074 |
| Increase in other balance sheet items | 24 | -326 |
| Cash inflow from ongoing operations (Net cash flow) | 28,312 | 24,602 |
| Cash outflows for investments in fixed assets | -12,276 | -12,187 |
| Cash inflows from the sale of fixed assets | 95 | 63 |
| Cash outflow from investing activity | -12,181 | -12,124 |
| Free cash flow | 16,130 | 12,478 |
| Deposits/ disbursements from short-term financing lines | 0 | 9,240 |
| Repayment of bank loans | -3,331 | -3,202 |
| Dividend payments | -8,000 | -17,775 |
| Dividend payments to non-controlling interests | -52 | 0 |
| Cash outflow from financing activity | -11,383 | -11,737 |
| Net increase in cash and cash equivalents | 4,747 | 741 |
| Cash and cash equivalents at the beginning of the period (as of the reporting date of the previous year) |
10,273 | 12,089 |
| Changes due to changes in exchange rates | -47 | -88 |
| Cash and cash equivalents at the end of the period | 14,973 | 12,742 |
| Net increase in cash and cash equivalents | 4,747 | 741 |
OF ALZCHEM AG, TROSTBERG, FOR THE PERIOD FROM JULY 1 TO SEPTEMBER 30, 2017
| in EUR thousand | 07/01/ -09/30/2016 | 07/01/ -09/30/2017 |
|---|---|---|
| Consolidated earnings before taxes | 727 | 5,996 |
| (+) Depreciation on fixed and intangible assets | 3,260 | 3,483 |
| Increase / decrease in pension provisions | -140 | -158 |
| Profit (-) from the sale of non-current assets | 0 | -2 |
| Addition employee bonus for the IPO | 6,256 | 0 |
| Other non-cash income (-) and expenses (+) | 611 | -486 |
| Financial result | 1,291 | 844 |
| Interest received | 36 | 115 |
| Interest paid | -105 | -129 |
| Income taxes paid | -1,519 | -1,686 |
| Increase in inventories | -2,143 | 6,050 |
| Increase in trade payables and other payables | 7,237 | -3,544 |
| Decrease in liabilities arising from trade payables, other liabilities and other provisions | -355 | 184 |
| Increase in other balance sheet items | 170 | -87 |
| Cash inflow from ongoing operations (Net cash flow) | 15,326 | 10,579 |
| Cash outflows for investments in fixed assets | -5,376 | -4,691 |
| Cash inflows from the sale of fixed assets | 80 | 2 |
| Cash outflow from investing activity | -5,296 | -4,689 |
| Free cash flow | 10,030 | 5,890 |
| Deposits/ disbursements from short-term financing lines | -2,500 | -4,795 |
| Repayment of bank loans | -1,400 | -402 |
| Cash outflow from financing activity | -3,900 | -5,197 |
| Net increase in cash and cash equivalents | 6,130 | 693 |
| Cash and cash equivalents at the beginning of the period (as of the reporting date of the previous year) |
8,855 | 12,070 |
| Changes due to changes in exchange rates | -13 | -21 |
| Cash and cash equivalents at the end of the period | 14,972 | 12,742 |
| Net increase in cash and cash equivalents | 6,130 | 693 |
Segment reporting by operative segments for the period from January 1 to September 30, 2017:
| -43 272,723 |
|
|---|---|
| 437 38,247 |
|
| -92 -10,307 |
|
| 345 27,940 |
|
| 434 | |
| -2,318 | |
| -1,884 | |
| 26,055 | |
| 62,787 | |
| -1,643 |
Segment reporting by operative segments for the period from January 1 to September 30, 2016:
| Employee | ||||||
|---|---|---|---|---|---|---|
| in EUR thousand | Specialty Chemicals |
Basics & Intermediates |
Other & Holding |
bonus for the successful IPO |
Consoli dation |
Group |
| External sales | 128,007 | 104,259 | 18,207 | 0 | -11 | 250,462 |
| EBITDA | 29,905 | 4,769 | 489 | -6,256 | 690 | 29,597 |
| Depreciation | -3,671 | -2,779 | -2,996 | 0 | -82 | -9,528 |
| EBIT | 26,234 | 1,990 | -2,507 | -6,256 | 608 | 20,069 |
| Other interest and similar income | ||||||
| Interest and similar expenses | -4,053 | |||||
| Financial result | -3,779 | |||||
| Result of ordinary operating activities | 16,290 | |||||
| Inventories as of 09/30/2016: | 35,613 | 20,464 | 1,651 | 0 | -1,119 | 56,610 |
| in EUR thousand | Specialty Chemicals |
Basics & Intermediates |
Other & Holding |
Employee bonus for the successful IPO |
Consoli dation |
Group |
|---|---|---|---|---|---|---|
| External sales | 45,083 | 37,849 | 7,037 | 0 | -60 | 89,909 |
| EBITDA | 9,094 | 1,740 | 149 | 0 | -661 | 10,322 |
| Depreciation | -1,273 | -1,061 | -1,119 | 0 | -30 | -3,483 |
| EBIT | 7,821 | 679 | -970 | 0 | -691 | 6,839 |
| Other interest and similar income | 119 | |||||
| Interest and similar expenses | -962 | |||||
| Financial result | -844 | |||||
| Result of ordinary operating activities | 5,996 |
Segment reporting by operative segments for the period from July 1 to September 30, 2017:
Segment reporting by operative segments for the period from July 1 to September 30, 2016:
| in EUR thousand | Specialty Chemicals |
Basics & Intermediates |
Other & Holding |
Employee bonus for the successful IPO |
Consoli dation |
Group |
|---|---|---|---|---|---|---|
| External sales | 35,732 | 35,473 | 5,786 | 0 | -22 | 76,969 |
| EBITDA | 8,108 | 2,994 | 318 | -6,256 | 114 | 5,278 |
| Depreciation | -1,239 | -961 | -1,035 | 0 | -25 | -3,260 |
| EBIT | 6,869 | 2,033 | -717 | -6,256 | 90 | 2,019 |
| Other interest and similar income | 57 | |||||
| Interest and similar expenses | -1,348 | |||||
| Financial result | -1,291 | |||||
| Result of ordinary operating activities | 727 |
Segment reporting by regions:
| in EUR thousand | Domestic | Foreign | Group |
|---|---|---|---|
| External sales from 01 / 01 – 09 / 30 / 2017: | 118,814 | 153,909 | 272,723 |
| External sales from 07 / 01 – 09 / 30 / 2017: | 42,030 | 47,879 | 89,909 |
| External sales from 01 / 01 – 09 / 30 / 2016: | 102,077 | 148,385 | 250,462 |
| External sales from 07 / 01 – 09 / 30 / 2016: | 34,742 | 42,227 | 76,969 |
| Non-current assets as of 09 / 30 / 2017: | 104,779 | 2,442 | 107,221 |
| Non-current assets as of 09 / 30 / 2016: | 100,378 | 2,599 | 102,977 |
The consolidated interim financial statements include AlzChem AG, a corporation under German law domiciled in Dr.-Albert-Frank-Str. 32, Trostberg, Germany, and its subsidiaries. The competent registry court is located in Traunstein. AlzChem AG is the parent company of the AlzChem Group and prepares these condensed IFRS interim consolidated financial statements as of September 30, 2017.
The companies of the AlzChem Group develop, produce and market chemical products of all kinds and provide services, as a chemical park operator, for example. The basic raw materials coal, lime and electricity are used in further production steps at the sites in Trostberg, Schalchen, Hart, Waldkraiburg and Sundsvall (Sweden) to produce highly versatile products with typical nitrogen-carbon-nitrogen compounds in very high quality. Furthermore, smaller sales units are located in Atlanta (USA) and Shanghai (China).
The condensed consolidated interim financial statements of AlzChem AG as of September 30, 2017, have been prepared in accordance with the International Accounting Standards Board (IASB), London, in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The interpretations of the IFRS Interpretations Committee (formerly IFRIC and SIC) have been applied. Accordingly, these interim consolidated financial statements have been prepared in accordance with the requirements of IAS 34 "Interim Financial Reporting".
The interim consolidated financial statements are presented in euros (EUR), the functional currency of the parent company AlzChem AG. For reasons of clarity, the figures in the interim consolidated financial statements are stated in thousand euros (EUR thousand) unless stated otherwise. All values have been rounded up or down to EUR thousand in accordance with commercial rounding so that individual figures do not add up exactly to the stated sum.
The provisions of the International Financial Reporting Standards (IFRS) were applied which had to be applied by the balance sheet date of September 30, 2017. Early adoption of the standards was not required as of September 30, 2017.
The explanations in the Notes to the Consolidated Financial Statements for 2016 apply in particular with regard to the significant accounting policies. The interim consolidated financial statements are prepared on the premise of the going concern.
Starting with fiscal year 2017, the amendments to IAS 12 Income Taxes and IAS 7 Cash Flow Statements would have to be applied for the first time. However, the changes have not yet been adopted by the EU Commission and have thus not yet been applied in these interim consolidated financial statements. Further information on published but not yet applied standards, interpretations and changes, as well as details on the recognition and measurement of balance sheet items as well as discretionary decisions and estimation uncertainties can be found in the chapter "Accounting principles" of the Notes to the Consolidated Financial Statements as of December 31, 2016.
In the reporting period, a dividend in kind of 6% of the shares in AlzChem International GmbH was distributed to the shareholders of AlzChem AG. As a result of the dividend in kind, the ownership interest of AlzChem AG in AlzChem International GmbH fell to 94%. Furthermore, there were no changes in the scope of consolidation.
| in EUR thousand | 01/01/ -09/30/2016 | 01/01/ -09/30/2017 |
|---|---|---|
| Own work capitalized | 3,697 | 3,744 |
| Income from currency conversion | 1,691 | 1,164 |
| Income from services to third parties | 642 | 589 |
| Income from the reversal of provisions and liabilities | 1,665 | 700 |
| Income from subsidies | 159 | 318 |
| Income from energy tax refunds | 81 | 80 |
| Other income | 737 | 975 |
| 8,672 | 7,570 |
Other miscellaneous income includes EUR 179 thousand (previous year: EUR 77 thousand) in income from positive changes in value of derivative currency hedges that were not recognized in other comprehensive income as part of hedge accounting.
| in EUR thousand | 01/01/ -09/30/2016 | 01/01/ -09/30/2017 |
|---|---|---|
| Cost of sales | 11,843 | 11,538 |
| Other third-party services | 7,426 | 8,045 |
| Maintenance | 5,519 | 6,937 |
| Environmental/ disposal costs | 4,663 | 5,407 |
| Consulting, research and development costs | 2,557 | 2,919 |
| Expenses from currency translation | 3,030 | 3,235 |
| Insurance | 1,652 | 1,734 |
| Other fees and costs | 1,244 | 1,354 |
| IT costs | 1,489 | 1,623 |
| Rent, lease and leasing | 1,239 | 1,559 |
| Other taxes | 1,086 | 1,325 |
| Travel expenses | 831 | 798 |
| Marketing | 826 | 936 |
| Auditing expenses | 706 | 1,206 |
| Other expenses | 4,301 | 5,282 |
| 48,412 | 53,898 |
Other expenses include EUR 0 thousand (previous year: EUR 704 thousand) in expenses for negative changes in value of
derivative currency hedges that were not recognized in other comprehensive income as part of hedge accounting.
The financial result for the reporting period includes interest expense from the addition to pension provisions in the amount of EUR 1,373 thousand (previous year: EUR 1,619 thousand).
The share capital of AlzChem AG, Trostberg, amounts to EUR 11,000 thousand (December 31, 2016: EUR 11,000 thousand) as of the reporting date and is divided into 11,000,000 (December 31, 2016: 11,000,000) bearer shares with a notional par value of EUR 1.00 each.
In the reporting period, a dividend of EUR 19,122 thousand (previous year: EUR 8,000 thousand) was distributed to the shareholders of AlzChem AG. The dividend in the current fiscal year was distributed in the amount of EUR 17,775 thousand as a cash dividend and a non-cash dividend. The non-cash dividend consisted of 6% of the shares in AlzChem International GmbH. As a result of the non-controlling interests that have now been granted, the items of equity of AlzChem International GmbH previously reported under controlling interests were reclassified pro rata to non-controlling interests in the amount of EUR 1,925 thousand.
Provisions for pensions and similar obligations decreased by EUR 3,851 thousand to EUR 101,054 thousand as of September 30, 2017, compared to December 31, 2016. The decrease includes an amount of EUR 5,667 thousand, which was recognized directly in equity in other comprehensive income. The reason for the decrease in the provision for pensions is the increase in the discount rate from 1.75% as of December 31, 2016, to 2.00% as of September 30, 2017. The associated deferred tax assets, the change of which was also recognized in other comprehensive income, decreased from EUR 1,587 thousand to EUR 11,120 thousand as of September 30, 2017.
The fair value of a financial instrument is the amount for which an asset is exchanged, or a liability is settled, between knowledgeable, willing parties in an arm's length transaction. The following table presents the carrying amounts and fair values of financial assets per measurement category in accordance with IAS 39:
| At amortized costs | At fair value | |||||
|---|---|---|---|---|---|---|
| in EUR thousand | Assets available for sale |
Loans and receivables |
Assets held for trading purposes |
Derivates in hedge accounting |
Total amount | |
| Balance sheet item | Carrying amount |
Carrying amount |
Carrying amount |
Carrying amount |
Carrying amount |
Fair value |
| 12/31/2016 | ||||||
| Financial assets | 20 | – | – | – | 20 | 20 |
| Other receivables and assets | – | 15,798 | – | – | 15,798 | 15,798 |
| Trade receivables | – | 35,444 | – | – | 35,444 | 35,444 |
| Cash and cash equivalents | – | 12,089 | – | – | 12,089 | 12,089 |
| Total financial assets | 20 | 63,331 | – | – | 63,351 | 63,351 |
| 09/30/2017 | ||||||
| Financial assets | 20 | – | 36 | – | 56 | 56 |
| Other receivables and assets | – | 14,459 | – | – | 14,459 | 14,459 |
| Trade receivables | – | 47,322 | – | – | 47,322 | 47,322 |
| Cash and cash equivalents | – | 12,742 | – | – | 12,742 | 12,742 |
| Total financial assets | 20 | 74,523 | 36 | – | 74,579 | 74,579 |
The following table presents the carrying amounts and fair values of financial liabilities per measurement category in accordance with IAS 39:
| At amortized costs | At fair value | ||||
|---|---|---|---|---|---|
| in EUR thousand | Other liabilities | Liabilities held for trading purposes |
Valuation according to IAS 17 |
Total amount | |
| Balance sheet item | Carrying amount |
Carrying amount |
Carrying amount |
Carrying amount |
Fair value |
| 12/31/2016 | |||||
| Loan liabilities to credit institutes |
30,406 | – | – | 30,406 | 32,299 |
| Liabilities from finance leasing | – | – | 223 | 223 | 266 |
| Trade liabilities | 21,701 | – | – | 21,701 | 21,701 |
| Financial liabilities | – | 142 | – | 142 | 142 |
| Other liabilities | 5,795 | – | – | 5,795 | 5,795 |
| Total financial liabilities | 57,902 | 142 | 223 | 58,267 | 60,203 |
| 09/30/2017 | |||||
| Loan liabilities to credit institutes |
36,546 | – | – | 36,546 | 37,930 |
| Liabilities from finance leasing | – | – | 223 | 223 | 265 |
| Trade liabilities | 22,449 | – | – | 22,449 | 22,449 |
| Financial liabilities | – | – | – | – | – |
| Other liabilities | 7,518 | – | – | 7,518 | 7,518 |
| Total financial liabilities | 66,513 | – | 223 | 66,736 | 68,162 |
The fair values of the financial instruments were determined on the basis of the market information available on the balance sheet date and using the methods and premises described below.
Due to the short-term maturities of trade receivables, other financial assets in the category loans and receivables and cash and cash equivalents, it is assumed that the fair values correspond approximately to the book values.
The balance sheet items trade accounts payable and other liabilities generally include liabilities with regularly short maturities, so that, as assumed, the fair values approximately correspond to the carrying amounts shown.
The fair values of the derivative financial instruments in the balance sheet items financial liabilities were calculated using present value and option price models. The relevant market prices and interest rates, which were obtained from recognized external sources, were used as input parameters for these models to the extent possible. This approach corresponds to level 2 in the hierarchy level of IFRS 13.
Loan liabilities to banks and finance lease liabilities include current and non-current financial liabilities. The fair values of liabilities with residual terms of more than one year are calculated by discounting the cash flows associated with the liabilities, taking into account the current interest rate parameters observable on the market. The individual credit ratings of the Group are taken into account in the form of customary creditworthiness and liquidity spreads in the present value determination. This approach corresponds to level 2 in the hierarchy level of IFRS 13.
The following table shows the assets and liabilities recognized at fair value during the reporting period and their allocation to the valuation hierarchy in accordance with IFRS 13:
| in EUR thousand Level 2 |
Total |
|---|---|
| ASSETS | |
| Financial assets held for trading purposes | |
| Forward exchange transactions 0 |
0 |
| Derivatives in hedge accounting | |
| Forward exchange transactions 0 |
0 |
| Total assets 0 |
0 |
| LIABILITIES | |
| Financial liabilities held for trading purposes | |
| Forward exchange transactions 142 |
142 |
| Derivatives in hedge accounting | |
| Forward exchange transactions 0 |
0 |
| Total liabilities 142 |
142 |
| in EUR thousand | Level 2 | Total |
|---|---|---|
| ASSETS | ||
| Financial assets held for trading purposes | ||
| Forward exchange transactions | 36 | 36 |
| Derivatives in hedge accounting | ||
| Forward exchange transactions | 0 | 0 |
| Total assets | 36 | 36 |
| LIABILITIES | ||
| Financial liabilities held for trading purposes | ||
| Forward exchange transactions | 0 | 0 |
| Derivatives in hedge accounting | ||
| Forward exchange transactions | 0 | 0 |
| Total liabilities | 0 | 0 |
There were no reclassifications between the individual fair value hierarchies during the reporting period.
As of the balance sheet date of September 30, 2017, foreign currency derivatives existed to hedge future sales in JPY with a total nominal volume of EUR 938 thousand (December 31, 2016: EUR 3,751 thousand).
The requirements for hedge accounting were not met during the reporting period. Changes in the fair value of open forward foreign exchange contracts were recognized in profit or loss through the income statement.
The presentation of the key figures in the segment reporting follows the internal management reporting.
One customer (one customer in the previous year's reporting period) contributed at least 10% of total Group sales in the reporting period. This customer's revenue is as follows and is included in the Specialty Chemicals, Basic & Intermediates and Other & Holding segments:
| in EUR thousand | 01/01/ -09/30/2016 | 01/01/ -09/30/2017 |
|---|---|---|
| Customer | 31,262 | 44,254 |
| 31,262 | 44,254 |
Related persons include key persons in the AlzChem Group. These are the member of the Management Board of AlzChem AG.
The companies controlled by the major shareholders LIVIA Corporate Development SE, HDI Preminger GmbH and Edelweiss Holding GmbH (all Munich) and their shareholders or legal representatives are regarded as related parties of the AlzChem Group.
AlzChem AG was preparing for an IPO up until February 2017 that did not take place in the planned structure, however. The shareholders of AlzChem AG had committed themselves to bear the costs incurred by the preparation of the IPO, but were not directly attributable to the company's planned capital increase. The receivable from this as of December 31, 2016, amounted to EUR 1,024 thousand and was settled in the current fiscal year. The accrued receivable of EUR 1,829 thousand as of the balance sheet date was offset against the dividend payment.
In September 2017, the shareholders of AlzChem AG contributed their shares in AlzChem AG to Softmatic AG due to a contribution in kind in exchange for new shares. The entry in the commercial register was still pending on the balance sheet date of September 30, 2017. Softmatic AG is a listed company and was without any operational activity until the day of the contribution. AlzChem shareholder LIVIA Corporate Development SE already held a 72.40% stake in Softmatic AG prior to the transaction, which is why Softmatic AG was one of the related companies of AlzChem AG during the reporting period. In addition to the capital increase in kind, all shareholders of Softmatic AG, with the exception of LIVIA Corporate Development SE, were granted the right to receive a number of new shares corresponding to their stake in Softmatic AG in return for a cash contribution corresponding to the contribution in kind. In a cooperation agreement, AlzChem AG has undertaken to bear all costs in connection with the capital increase in kind and the cash capital increase, as well as the listing of all shares in the company. If the costs were incurred by Softmatic AG, they will be charged to AlzChem AG. In the reporting period, a total of EUR 300 thousand was recognized as an expense in AlzChem AG. As of the balance sheet date, there are no receivables or liabilities to Softmatic AG.
AlzChem Group's business is partly subject to seasonal influences. In particular, the delivery cycles for agrochemical products lead to a slight increase in sales and therefore EBITDA in the first half of a fiscal year compared to the second half of the year.
In September 2017, the shareholders of AlzChem AG contributed their shares in AlzChem AG to Softmatic AG by way of a contribution in kind against granting of new shares (capital increase in kind).
At the Annual General Meeting of Softmatic AG on August 4, 2017, a cash capital increase was approved in addition to the capital increase in kind. The capital increase in kind and cash capital increases were carried out on September 26, 2017, while the entry in the commercial register was still pending on the balance sheet date of September 30, 2017, and took place on October 2, 2017.
By way of the capital increase in kind, the share capital of Softmatic AG will be increased by EUR 100,323,339.00 from EUR 310,000.00 to EUR 100,633,339.00 in return for the contribution of all shares in AlzChem AG. As part of the cash capital increase, the share capital of the company will be increased by another EUR 1,130,016.00 to EUR 101,763,355.00. As part of the capital increases against non-cash and cash contributions, a total of 101,453,355 new no-par-value shares with a pro rata amount of the share capital of EUR 1.00 per no-par-value share and full profit participation rights will be issued from January 1, 2017. The gross issue proceeds from the capital increase against cash contributions amount to EUR 2,599,036.80.
The transaction does not become legally effective until it has been entered in the commercial register and consequently only recognized from that date on. The requirements for accounting for the transaction in accordance with IFRS mean that the balance sheet values from the consolidated financial statements of AlzChem AG are to be updated and supplemented by the balance sheet items of Softmatic AG.
Trostberg, October 31, 2017 AlzChem AG
The Management Board
Ulli Seibel, CEO Andreas Niedermaier, CFO Klaus Englmaier, COO
We assure to the best of our knowledge that the consolidated interim financial statements in accordance with the applicable accounting principles for interim financial reporting give a true and fair view of the Group's net assets, financial position and earnings position, and that the course of business, including the business results and the position of the Group, are presented in the Interim Group Management Report such that they accurately describe the actual situation and the main opportunities and risks of the expected development of the Group in the remaining fiscal year.
Trostberg, October 31, 2017 AlzChem AG
Ulli Seibel, CEO Andreas Niedermaier, CFO Klaus Englmaier, COO
NORDERSTEDT (since October 2, 2017 AlzChem Group AG)
In September 2017, the shareholders of AlzChem AG contributed their shares in AlzChem AG to Softmatic AG by way of a contribution in kind.
At the Annual General Meeting of Softmatic AG held on August 4, 2017, a cash capital increase was approved in addition to the capital increase in kind. The capital increase in kind and cash capital increases were carried out on September 26, 2017, while the entry in the commercial register was still pending on the balance sheet date of September 30, 2017, and took effect on October 2, 2017.
By way of the capital increase in kind, the share capital of Softmatic AG is being increased by EUR 100,323,339.00 from EUR 310,000.00 to EUR 100,633,339.00 in return for the contribution of all shares in AlzChem AG. As part of the cash capital increase, the share capital of the company is being increased by another EUR 1,130,016.00 to EUR 101,763,355.00. As part of the capital increases against contributions in kind and cash, a total of 101,453,355 new no-par-value shares with a pro rata amount of the share capital of EUR 1.00 per share and a full dividend right are being issued from January 1, 2017, on. The gross issue proceeds from the capital increase against cash contributions amount to EUR 2,599,036.80.
The transaction will not become legally effective until it has been entered in the commercial register and consequently only be recognized from that date on. To better understand the effects of the transaction on the assets, financial position and earnings position of AlzChem AG, we present below the IFRS consolidated balance sheet of AlzChem AG based on the assumption that the transaction was already legally executed and included all cash flows on September 30, 2017 , The following accounting rules were applied:
Basically, the contribution of AlzChem AG by way of a capital increase in kind to Softmatic AG is a company acquisition in accordance with the regulations of IFRS 3 Business Combinations. In this particular case, it is a reverse acquisition because the former shareholders of AlzChem AG also exercise control over the new Group after the capital increase in kind. Furthermore, Softmatic AG does not constitute a business operation in accordance with IFRS 3. As a result, the application of IFRS 3 is generally ruled out, however, with certain exceptions, the rules for mapping an inverse business combination must be applied accordingly.
Due to the capital increase in kind, Softmatic AG is obliged to publish consolidated financial statements. Nevertheless, assuming that the capital increase in kind and the cash capital increase have already been fully executed, the IFRS consolidated financial statements of Softmatic AG as of September 30, 2017, constitute a continuation of the consolidated financial statements of AlzChem AG in this special constellation:
The consolidated financial information of Softmatic AG as of September 30, 2017, according to IFRS, assuming that the capital increase in kind and cash capital increase have already been executed, is based on the explanations given above and is supplemented by the following adjustments:
• The inflow from the cash capital increase in the amount of EUR 2,599 thousand increases the cash and cash equivalents on the assets side and accordingly the subscribed capital by EUR 1,130 thousand and the capital reserve by EUR 1,469 thousand on the liability side.
| in EUR thousand | 09 /30 /2017 |
|---|---|
| Non-current assets | |
| Intangible assets | 822 |
| Fixed assets | 106,399 |
| Financial assets | 20 |
| Other claims and assets | 358 |
| Deferred tax assets | 25,704 |
| Total non-current assets | 133,303 |
| Current assets | |
| Inventories | 62,787 |
| Trade receivables | 47,322 |
| Financial assets | 36 |
| Other receivables and assets | 16,644 |
| Income tax claims | 47 |
| Cash and cash equivalents | 15,365 |
| Total current assets | 142,200 |
| Total ASSETS | 275,503 |
| in EUR thousand | 09/30/2017 |
|---|---|
| EQUITY | |
| Capital and reserves | |
| Subscribed capital | 101,763 |
| Capital reserve adjustment items from reverse acquisition | -89,629 |
| Capital reserve | 26,450 |
| Other cumulative equity | -27,788 |
| Net profit | 47,202 |
| 57,998 | |
| Non-controlling interests | 2,215 |
| Total equity | 60,213 |
| DEBT | |
| Non-current debt | |
| Pension provisions and similar commitments | 101,054 |
| Other provisions | 17,716 |
| Loan liabilities to credit institutes | 20,604 |
| Finance lease liabilities | 223 |
| Other liabilities | 10 |
| Deferred tax debt | 2,137 |
| Total non-current debt | 141,743 |
| Current debt | |
| Other provisions | 7,315 |
| Loan liabilities to credit institutes | 15,942 |
| Trade liabilities | 22,710 |
| Other liabilities | 24,810 |
| Income tax liabilities | 2,769 |
| Total current debt | 73,546 |
| Total debt | 215,290 |
| Total EQUITY and DEBT | 275,503 |
| AB | Aktiebolag |
|---|---|
| € / EUR | Euro |
| AG | Aktiengesellschaft |
| CNY | Renminbi Yuan |
| DBO | Defined Benefit Obligation |
| EBIT | Earnings before interest and taxes |
| EBITDA | Earnings before interest, taxes, depreciation and amortization |
| EFRAG | European Financial Reporting Advisory Group |
| EU | European Union |
| GmbH | Gesellschaft mit beschränkter Haftung |
| HGB | Handelsgesetzbuch |
| IAS | International Accounting Standard |
| IASB | International Accounting Standards Board |
| IFRIC | International Financial Reporting Interpretations Committee |
| IFRS | International Financial Reporting Standards |
| IPO | Initial Public Offering |
| JPY | Yen |
| LLC | Limited Liability Company |
| Ltd. | Limited |
| Mio. | Millions |
| Nr. | Number |
| OCI | Other Comprehensive Income |
| p. a. | per anno |
| S. à.r. l. | société à responsabilité limitée |
| SEK | Swedish crown |
| SIC | Standing Interpretations Committee |
| USA | United States of America (Vereinigte Staaten von Amerika) |
| USD | United States Dollar |
AlzChem Group AG Chemiepark Trostberg Dr.-Albert-Frank-Str. 32 83308 Trostberg T +49 86 21 86 – 0 F +49 86 21 86 – 2911 [email protected] www.alzchem.com
Sabine Sieber T +49 86 21 86 – 2888 F +49 86 21 86 – 502888 [email protected]
cometis AG
| December 31, 2017 | End of fiscal year |
|---|---|
| March 2018 | Full Year 2017 Report and analyst conference |
| May 2018 | Q1 Financial Report 2018 |
| May 2018 | Annual General Meeting 2018 |
| September 2018 | Half Year Report 2018 |
| November 2018 | Q3 Financial Report 2018 |
This report may contain forward-looking statements based on current assumptions and forecasts made by the management of AlzChem AG/AlzChem Group AG. Such statements are subject to risks and uncertainties. These and other factors may cause actual results, financial position, development or performance of the Company to differ materially from the estimates made here. The company assumes no liability whatsoever to update such forward-looking statements or to conform them to future events or developments.
CHEMIEPARK TROSTBERG Dr.-Albert-Frank-Str. 32 83308 Trostberg
T +49 8621 86-0
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