Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Bertrandt AG Interim / Quarterly Report 2017

Aug 30, 2017

59_10-q_2017-08-30_a3de278b-d848-4efa-9171-6d7bd88da076.pdf

Interim / Quarterly Report

Open in viewer

Opens in your device viewer

FISCAL 2016/2017

REPORT ON THE 3RD QUARTER 1 OCTOBER 2016 UNTIL 30 JUNE 2017

Bertrandt AG Birkensee 1, 71139 Ehningen Germany Telephone +49 7034 656-0 Telefax +49 7034 656-4100 www.bertrandt.com [email protected]

CI-1257-07.17-A

IFRS
01/10/2016–
30/06/2017
Changes
in %
01/10/2015–
30/06/2016
Income statement
Revenues (EUR million) 734.767 0.9 727.911
Operating profit (EUR million) 39.822 -36.0 62.246
Profit from ordinary activity (EUR million) 38.198 -37.4 60.984
Earnings after income tax (EUR million) 27.818 -33.5 41.842
Cash flow statement
Cash flow from operating activities (EUR million) 10.589 -77.6 47.232
Cash flow from investing activities (EUR million) -26.804 -55.3 -59.937
Free cash flow (EUR million) -16.215 -27.6 -12.705
Capital spending (EUR million) 28.979 -54.0 63.065
Balance sheet
Equity (EUR million) 359.540 6.4 337.864
Equity ratio (%) 47.0 -0.2 47.1
Total assets (EUR million) 764.903 6.5 717.980
Share
Earnings per share (EUR) 2.76 -33.3 4.14
Share price on 30 June (EUR)1 87.76 -0.3 88.00
Share price, high (EUR)2 98.41 -5.9 104.60
Share price, low (EUR)2 79.60 -6.4 85.00
Shares outstanding on 30 June (number) 10,143,240 10,143,240
Market capitalisation on 30 June (EUR million) 890.2 -0.3 892.6
Employees
Number of employees at Bertrandt Group
on 30 June
12,966 2.3 12,669

1Closing price in Xetra trading. 2In Xetra trading.

THE FIRST THREE QUARTER AT A GLANCE

Income statement, Cash flow statement, Balance sheet, Share, Employees

_____ TABLE 01

OVERVIEW

With key technology trends continuing undiminished, the substantial drivers of Bertrandt's business performance remain valid. An increasing variety of models and variants, environmentally friendly individual mobility and connected and automated driving offer perspectives for the automotive sector in the future. Industry 4.0 opens up additional opportunities in key industries, such as the energy and electrical engineering industry, medical technology as well as the machinery and plant engineering sectors. Management believes that the currently challenging economic environment with temporary fluctuations in the demand for capacity and continuing price pressure has a temporarily adverse effect on the development of the Bertrandt Group.

The Company's key performance indicators developed as follows in the first three quarters of fiscal 2016/2017:

  • Revenues rose by 0.9 percent year on year to EUR 734.767 million (previous year EUR 727.911million).
  • In the period under review, Bertrandt generated an operating profit of EUR 39.822 million (previous year EUR 62.246 million). The margin amounted to 5.4 percent (previous year 8.6 percent).
  • Post-tax earnings were EUR 27.818 million (previous year EUR 41.842 million). This works out to earnings per share of EUR 2.76 (previous year EUR 4.14).
  • The workforce increased by 297 over the previous year to 12,966 employees (12,669 employees on 30 June 2016).
  • Capital expenditure amounted to EUR 28.979 million (previous year EUR 63.065 million and EUR 83.404 million as at 30 September 2016).
  • With an equity ratio of 47.0 percent (previous year 47.1 percent), Bertrandt is one of the solid companies in the automotive sector.
  • Total assets were EUR 764.903 million (EUR 763.314 million as at 30 September 2016)
  • Free cash flow totalled EUR -16.215 million (previous year EUR -12.705 million).

As one of Europe's leading engineering specialists, Bertrandt is a reliable partner for current and future projects across all fields of research and development. The Company provides each customer with a comprehensive range of services with customised and all-in solutions along the entire product engineering process. The customer has the benefit of the expertise of the entire Company, which is available to customers through their local Bertrandt subsidiary because Bertrandt's Competence Centre structure is replicated throughout the Group.

QUARTERLY REPORT

EUR MILLION REVENUE GROWTH COMPARED TO THE SAME PERIOD LAST YEAR.

BERTRANDT CONTINUES TO GROW DESPITE difficult conditions in the first nine months of FY 2016/2017.

7

THE GROUP – GENERAL INFORMATION ____

Business model and strategy

As one of Europe's leading engineering partners, Bertrandt has been devising specific and tailored solutions with customers at 54 locations in Europe, Asia and the United States for over 40 years now. Our services for the automotive and aerospace industries include all process steps in the project phases of conceptual design, CAD, development, design modelling, tool production, vehicle construction and production planning right through to start of production and production support. Furthermore, the individual development steps are validated by simulation, prototype building and testing. At our technology centres in the immediate vicinity of our customers, we manage projects of different sizes in cooperation with our customers.

The technology centres are equipped with dedicated design studios, electronics labs as well as testing facilities. Our customer base comprises nearly all European manufacturers as well as important system suppliers. We also provide technological services outside the mobility industry in such forward-looking sectors as energy, medical technology, electrical engineering as well as machinery and plant engineering throughout Germany. Consistency, reliability and capital expenditure on infrastructure and technical equipment enable our customer relationships to thrive. They continue to be key factors for Bertrandt's success. We consider ourselves an active contributor to the development of the future of mobility, and are therefore constantly adapting our range of services to customer needs as well as to changing market conditions. Bertrandt's particular strength lies in the linking up and further development of know-how In a recent study on the situation of the German automobile industry the German Association of the Automotive Industry (VDA) stated that the automobile is undergoing the most radical change in its history. According to the study digital connectivity and globalisation are continuously driving the global innovation and technology race. Mobility needs increase in all continents; sustainable and environmentally friendly vehicle concepts are in demand everywhere. As a result, spending on research and development in the automotive industry is further increasing an important trend for Bertrandt's business performance. On a worldwide basis, German automotive OEMs and suppliers are currently investing more than EUR 39 billion per year in research and development more than twice as much as ten years ago.

The civil aviation business, like in previous years, is mainly driven by global economic growth, environmental regulation at the national level and the decline in fuel prices. The two big aerospace groups, Boeing and Airbus, report an unbroken global growth trend in civil aviation. In view of the development in the first half of 2017, the German Aerospace Industries Association (BDLI) expects that the industry will maintain the high growth level achieved in the previous year throughout 2017.

In the four key industries in which Bertrandt operates apart from the automotive and aerospace sectors, the economic upturn has continued. Thus the business climate index produced by the ifo Institute (Leibniz Institute for Economic Research) at the University of Munich a key index for the energy, medical technology, electrical engineering as

GROUP MANAGEMENT REPORT

and this makes us one of the leading European partners on the market for engineering services. The engineering expertise Bertrandt has built up over many years of activity in the mobility industries provides a firm foundation upon which the Company can realise and take forward customised development solutions in new sectors.

Foreign operations

With its 13 non-domestic branches in Europe, the United States and Asia, Bertrandt pursues a strategy of ensuring a sharp focus on the customer by diversifying its locations on a project-specific basis. The close organisational link-up with its branches in Germany enables Bertrandt to offer its customers the complete range of its services. The Company will continue to invest in building up and expanding its presence abroad so as to be able to devise engineering solutions rapidly and efficiently.

REPORT ON ECONOMIC POSITION __________

Economic development

The results of the ifo World Economic Survey conducted by the ifo Institute (Leibniz Institute for Economic Research at the University of Munich) for the second quarter of 2017 showed a marked improvement of the world economic climate. The positive impulse has mainly been provided by the industrial nations where decreasing unemployment continues to boost private household consumption. In addition, businesses use the ongoing low interest rates to step up their investment activity. Given the positive economic environment in the industrial nations, the increasing commodity consumption stimulates economic activity in the newly industrialising countries.

Sector trends

New car sales worldwide developed positively in the first six months of 2017, according to the German Association of the Automotive Industry (VDA). While the US market has more or less maintained the high level of the previous year with more than 8.4 million units sold (-2.2 percent year-on-year), the Chinese passenger car market has continued to grow with new registrations nearly hitting the 11 million mark (+2.7 percent year on year). In Europe, the market continues to recover. In total, almost 8.5 million new cars were sold, which corresponds to 4.6 percent growth over the same period in the previous year.

well as machinery and plant engineering sectors rose to a new record level of 116 points in June. The companies' satisfaction with their current situation was even more pronounced than before. This assessment is also reflected in a current survey conducted by Reuters News Agency where 17 bank economists expressed their expectations about ongoing economic growth in Germany. Ultimately, the experts expect the economy to grow by 0.6 percent in the second quarter, which would be equivalent to the growth rate at the beginning of the year. In April, expectations were lower with a plus of only 0.4 percent. The German economy is thus able to maintain the high momentum it

gained in early 2017

Business performance

The challenging economic environment the Bertrandt Group was faced with is reflected in the Company's business performance in 2016/2017. Especially the exhaust gas scandal and the transformation process affect the automotive industry and lead to postponements of projects and/or temporary fluctuations in the demand for capacity as well as increasing price pressure.

54

locations worldwide belong to the Bertrandt Group.

_____ CHART 02

In the period under review Bertrandt reported an increase in revenues of 0.9 percent.

734.767

EUR million in revenues were generated in the Bertrandt Group in the first nine months of fiscal 2016/2017.

_____ CHART 05

Free cash flow was affected by temporarily increased funds tied up in current assets.

_____ CHART 04

With an equity ratio of 47.0 percent, Bertrandt is a financially strong company in the industry.

Free cash flow (Q1–Q3) EUR million 20.000 10.000 0 -10.000 -20.000 -30.000 -40.000 -50.000 -60.000 12/13 13/14 10.100 17.748

_____ CHART 06

After capex above average in the last years, the Company made necessary investments in buildings and technical equipment on a lower level.

Total revenues

In the period under review, Bertrandt generated revenues of EUR 734.767 million (previous year EUR 727.911 million), equivalent to a margin of 0.9 percent. The Digital Engineering, Physical Engineering and Electrical Systems/Electronics segments performed differently due to the heterogeneous economic conditions. Total revenues increased by EUR 7.363 million on the previous year to EUR 735.688 million.

_____ CHART 02

Key expenditure figures

Owing to the greater volume of business, expenses in the first nine months of fiscal 2016/2017 increased, breaking down as follows: The cost of materials increased to EUR 77.957 million (previous year EUR 72.502 million), with the material input depending on the individual projects. Personnel expenses also increased and attained EUR 528.006 million in the period under review (previous year EUR 514.059 million). The staff cost ratio was 71.8 percent (previous year 70.6 percent). The investment in infrastructure caused other operating expenses to rise to EUR 71.051 million (previous year EUR 67.611 million).

Operating profit

In the first nine months of the current fiscal year Bertrandt's operating profit was EUR 39.822 million (previous year EUR 62.246 million), equal to a margin of 5.4 percent (previous year 8.6 percent). Net finance income was EUR -1.624 million (previous year EUR -1.262 million). Profit from ordinary activities in the period under review amounted EUR 38.198 million (previous year EUR 60.984 million). Based on a tax rate of 24.1 percent (previous year 29.9 percent), the Company generated post-tax earnings of EUR 27.818 million (previous year EUR 41.842 million).

_____ CHART 03

Financial position

Bertrandt's balance sheet as at 30 June 2017 was as follows: Total assets increased by EUR 1.589 million to EUR 764.903 million (EUR 763.314 million as at 30 September 2016). Non-current assets were EUR 298.604 million as at the balance sheet date (EUR 271.790 million as at 30 September 2016). Current assets amounted to EUR 466.299 million (EUR 491.524 million as at 30 September 2016). The Company's equity as at 30 June 2017 was EUR 359.540 million (EUR 357.936 million as at 30 September 2016). Current liabilities decreased to EUR 155.580 million (EUR 167.594 million as at 30 September 2016). With an equity ratio of 47.0 percent (46.9 percent as at 30 September 2016), Bertrandt remains one of the solid companies in the automotive sector.

_____ CHART 04

Bertrandt's cash flow from operating activities in the period under review was EUR 10.589 million (previous year EUR 47.232 million) as a result of the operating profit and the temporarily increased funds tied up in current assets. Net cash outflow from investing activities decreased year on year, amounting to EUR -59.937 million (previous year EUR -26.804 million). Free cash flow totaled EUR -16.215 million (previous year EUR -12.705 million).

_____ CHART 05

In the first nine months of the fiscal year 2016/2017 the Company made the necessary investments in buildings and technical equipment, spending EUR 28.979 million (previous year EUR 63.065 million). Bertrandt continues its focus on building up and expanding its infrastructure, thus continually optimising its range of services.

_____ CHART 06

_____ CHART 03

The operating profit was influendced by ongoing temporary fluctuations in the demand for capacity and continuing price pressure.

Operating profit (Q1–Q3)

_____ CHART 07

Compared to the previous

year the workforce expanded by 297.

Human resources

In the period under review the Bertrandt Group continued its policy of building up staff. As of 30 June 2017 the number of employees had risen by 54 compared to 30 September 2016. At the end of the first nine months of fiscal 2016/2017 the Group had 12,966 employees (12,912 employees as at 30 September 2016). This is equal to an increase of 297 on the same period last year (12,669 employees as at 30 June 2016). The latest information on human resources management can be found in the "Careers" section of Bertrandt's website at www. bertrandt.com.

_____ CHART 07

Risk report

As an engineering service provider operating on an international scale, the Bertrandt Group is exposed to a wide variety of risks. The pertinent facts were comprehensively reported in the fiscal 2015/2016 annual report. The developments already anticipated there for fiscal 2016/2017 reflects numerous developments, the results of which cannot be wholly predicted at the present juncture.

OEMs and system suppliers alike are redoubling their efforts to develop electromobility applications, in line with the strategic change currently taking place in the field of drive technologies. These technological developments are decisive for our customers' future market position and have a long-term impact on their business processes and the allocation of their engineering budgets. In addition, the ongoing consolidation among OEMs also affects current and announced projects because responsibilities in the different corporate units are undergoing a restructuring process. The increasing price pressure is felt, too.

A new aspect is added to the picture as the ultimate outcome of the pending antitrust investigations affecting some OEMs cannot be predicted.

12,966

employees worked for Bertrandt on

the reporting date.

It is also difficult to forecast ongoing geopolitical developments, for example the progress of the Brexit negotiations and the economic repercussions of policies of the present government in the United States. Both countries are important production and sales markets for our customers, and trade barriers, if they are erected, could adversely affect their business performance.

Bertrandt is closely observing these developments. The risks identified in the fiscal 2015/2016 annual report have partly materialised for Bertrandt in the first nine months of fiscal 2016/2017, with an impact on revenue and earnings performance. Management anticipates that these factors will also have a bearing on the fourth quarter of the current fiscal year. Accordingly, the short-term outlook for the current financial year has been adjusted to account for the temporarily prevailing economic environment as has already been communicated in Bertrandt's Ad hoc disclosure of 10 May 2017. The medium-term prospects of the core industries of the Bertrandt Group and the technology trends on which they depend still offer potential for the Company. Its broad strategic focus and solid financial position will provide a firm financial foundation for Bertrandt's business performance also in the future.

Potentials

The major influencing factors, i.e. the increasing variety of models and variants, environmentally friendly individual mobility and connected and automated driving, are still relevant. Further growth opportunities are provided by Industry 4.0. Bertrandt is therefore confident that there is potential for the Company to continue to secure and enhance its market position as an engineering service provider and technology group in the years to come. This is also reflected in actual and planned capital expenditure on expertise, infrastructure and technical equipment.

Forecast and outlook

According to the experts of the German Institute for Economic Research (DIW) global economic output is likely to rise by 3.6 percent this year and by an even higher rate next year. The main drivers for this development are still the decreasing unemployment rate in the industrial nations and higher private consumption. In addition, there is an increase in the investment activities of companies in the United States and Europe. In Germany, production has been increasing for the fourth consecutive year, a trend which is predicted to continue throughout 2017. For the current year the DIW expects a plus of 1.5 percent. This means that the growth rate will be lower than in the previous year, which, however, is merely the effect of fewer working days in the current year. The DIW institute also forecasts a sustained pace of growth of the German economy in the next year with a growth

rate of 1.7 percent.

For the year 2017 as a whole, new car sales are expected to increase worldwide over the previous year. For the year overall, the VDA experts anticipate the number of units sold in the US market to reach about 17.5 million, which would more or less correspond to the high level of the previous year. In China, the market is anticipated to grow further after two-digit growth last year, resulting in 24.1 million newly registered cars. With 15.4 million new cars, Europe is expected to slightly exceed the previous year's value.

The market trends that drive Bertrandt's performance, i.e. environmentally friendly individual mobility, safety, connected and automated driving as well as an ever greater variety of models and variants, continue undiminished. The VDA forecasts as well that by 2020 German OEMs will invest around EUR 40 billion in the development of alternative drive technologies alone especially e-mobility. During this period the German automotive manufacturers will more than treble their range

1.5

percent: the GDP growth rate for Germany in 2017 forecast by the DIW.

of e-cars – from the current 30 models to nearly

49 percent (previous year 45 percent). The industry players also continue to invest in sustainable solutions for connected and automated driving. The German automotive industry already accounts for 58 percent of worldwide patents on connected and automated driving. According to the VDA experts, OEMs and suppliers will invest another EUR 16 to 18 billion in digitisation technologies in the next three to four years. Owing to the ever greater diversity of drive technologies, the number of model derivatives is likely to grow as well. Market research institute Frost & Sullivan anticipates the number of globally available passenger car models to further increase over the next five years.

In the field of aircraft construction for civil aviation long-term prospects are equally positive. A recent long-term forecast by Boeing group anticipates worldwide demand for new aircraft for civil aviation rising to up to 41,030 units between 2016 and 2035. This is equal to a present market value of almost EUR 6.1 trillion. Airbus expects a slightly lower volume of new aircraft demand in its forecast for the same period and predicts 33,070 new units by 2035. According to Airbus, the market value corresponds to some EUR 4.6 trillion.

Bertrandt's key industries apart from the mobility sector, i.e. the energy, medical technology, electrical engineering as well as machinery and plant engineering sectors, are benefitting from the thriving global economy. The German Engineering Federation (VDMA), for example, raised its growth forecast in June 2017 from one to three percent real growth. The German Electrical and Electronic Manufacturers Association (ZVEI) expects its industry to grow four percent globally. Especially in the field of medical engineering, the ZVEI anticipates global market growth of six percent for 2017 and 2018. For the energy engineering industry, the ZVEI forecasts global market growth of three percent in 2017, to increase to four percent in the

100 models. Internationally, German carmakers are therefore leading global providers of electromobility solutions, strongly expanding their European market share of newly registered electric vehicles, which in the first five months of this year rose to 40

coming year.

Assuming that underlying economic conditions do not deteriorate, that OEMs make sustained investments in research and development for new technologies and models, engineering work continues to be contracted out and qualified human resources are available, Bertrandt expects its business to develop positively in fiscal 2016/2017. The Management Board expects an increase in revenues of up to EUR 30 million over the previous year. According to today's assessment, operating profit relative to revenues will be between six and eight percent.

The market continues to offer business opportunities in 2017. As a result, Bertrandt will continue to focus its investment activities in building up and expanding its expertise, infrastructure and technical equipment with the aim of continually optimising its range of services across the different geographical regions. However, the Company expects a lower volume of capital spending in fiscal 2016/2017 than in the previous year. A positive cash flow from operating activities is therefore anticipated for the year as a whole, which will, however, shrink by a corresponding amount compared to fiscal 2015/2016 since no significant positive or negative special effects of the kind that occurred in fiscal 2014/2015 and 2015/2016 are expected.

However, the most important opportunities are offed by the current technology trends. Against this backdrop, the Management Board considers a medium-term annual revenue growth of EUR 20 to 50 million and an operating profit relative to revenues of between seven and nine percent as realistic.

EUR billion will German OEMs invest in the development of alternative drive technologies according to the VDA.

The Bertrandt share

The DAX started the third quarter of the fiscal year 2016/2017 on 3 April 2017 opening at 12,369 points and closing at 12,325 points as of the last day of trading. The SDAX started the period at 10,113 points and climbed to 10,847 points as of the end of the period. The Prime Automobile Performance Index oscillated between 1,469 and 1,563 points.

The Bertrandt share started the third quarter of the fiscal year 2016/2017 by opening in Xetra trading at EUR 91.50. On 31 May 2017 the share hit a low for the period under review of EUR 79.60. It reached its high for the period of EUR 98.41 on 9 May 2017 and closed at EUR 87.76 in Xetra trading on the last day of trading. The average daily trading volume in the third quarter of fiscal 2016/2017 was 39,499 shares. Analysts' ratings of the Bertrandt share and information on our Company can be found at www.bertrandt.com under Investor Relations.

87.76

EUR was the price at which the Bertrandt share closed in Xetra trading on 30 June 2017.

%

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement and statement of comprehensive income
EUR million
01/10 to 30/06
I. Income statement
Revenues
Other internally generated assets
Total revenues
Other operating income
Raw materials and consumables used
Personnel expenses
Depreciation
Other operating expenses
Operating profit
Income from investments accounted for using the equity method
Interest income/expense
Attributable to minority interests
Other financial result
Net finance income
Profit from ordinary activities
Other taxes
Earnings after income tax
Income taxes
Earnings after income tax
– attributable to minority interest
– attributable to shareholders of Bertrandt AG
Number of shares (million) – diluted/basic, average weighting
Earnings per share (EUR) – diluted/basic
II. Statement of comprehensive income
Earnings after income tax
Exchange differences1
Revaluation of pension obligations
Tax effects of revaluation of pension obligations
Other earnings after taxes

Total comprehensive income – attributable to minority interest

– attributable to shareholders of Bertrandt AG

1Components of Other earnings after taxes which will be recycled in the Income statements of the future quarterly and annual reports.

Q3 Q3 Q1–Q3 Q1–Q3
2016/2017 2015/2016 2016/2017 2015/2016
237.541 243.119 734.767 727.911
0.519 0.159 0.921 0.414
238.060 243.278 735.688 728.325
1.623 3.416 6.451 10.141
-26.352 -23.970 -77.957 -72.502
-177.371 -172.624 -528.006 -514.059
-8.502 -7.702 -25.303 -22.048
-23.251 -22.358 -71.051 -67.611
4.207 20.040 39.822 62.246
0.063 -0.004 0.316 0.015
-1.069 -0.665 -3.033 -1.618
-0.011 0 -0.080 0
0.211 0.084 1.173 0.341
-0.806 -0.585 -1.624 -1.262
3.401 19.455 38.198 60.984
-0.404 -0.504 -1.522 -1.273
2.997 18.951 36.676 59.711
-0.158 -5.968 -8.858 -17.869
2.839 12.983 27.818 41.842
0 0.012 0 0.054
2.839 12.971 27.818 41.788
10.091 10.091 10.091 10.091
0.28 1.28 2.76 4.14
2.839 12.983 27.818 41.842
-0.637 0.010 -0.367 -0.338
-0.295 -0.010 -0.884 -0.030
0.088 0.003 0.265 0.009
-844 0.003 -986 -359
1.995 12.986 26.832 41.483
0 0.012 0 0.054
1.995 12.974 26.832 41.429

_____ TABLE 09

BERTRANDT LOCATIONS WORLDWIDE.

CONSOLIDATED BALANCE SHEET

Consolidated balance sheet
EUR million
30/06/2017 30/09/2016
Assets
Intangible assets 15.969 17.480
Property, plant and equipment 262.914 235.800
Investment properties 1.491 1.540
Investments accounted for using the equity method 5.393 5.077
Other financial assets 1.922 2.729
Receivables and other assets 7.561 6.691
Deferred taxes 3.354 2.473
Non-current assets 298.604 271.790
Inventories 1.161 0.889
Future receivables from construction contracts 141.992 114.130
Receivables and other assets 200.453 214.851
Income tax assets 5.396 1.833
Cash and cash equivalents 117.297 159.821
Current assets 466.299 491.524
Total assets 764.903 763.314
Equity and liabilities
Issued capital 10.143 10.143
Capital reserve 29.374 29.374
Retained earnings and other comprehensive income 278.039 279.025
Consolidated distributable profit 41.984 39.394
Equity 359.540 357.936
Provisions 12.520 16.927
Borrowings 216.373 199.701
Other liabilities 0.223 0.246
Deferred taxes 20.667 20.910
Non-current liabilities 249.783 237.784
Tax provisions 5.520 7.548
Other provisions 25.083 46.586
Borrowings 4.292 2.367
Trade payables 12.711 15.066
Other liabilities 107.974 96.027
Current liabilities 155.580 167.594
Total equity and liabilities 764.903 763.314

_____ TABLE 10

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1Components of Other earnings after taxes which will be recycled in the Income statements of the future quarterly and annual reports.

_____ TABLE 11

EUR million
Issued
capital
Capital
reserve
Retained earnings and
other comprehensive income
Consoli
dated
distri
butable
profit
Equity
attribut
able
to share
holders
of
Bertrandt
AG
Minority
interests
Total
Non-dis
tributed
earnings
Currency
trans
lation
reserve
Revalu
ation of
pension
obliga
tions
Total
Value on 01/10/2016 10.143 29.374 282.737 -1.096 -2.616 279.025 39.394 357.936 0 357.936
Earnings after income tax 27.818 27.818 0 27.818
Other earnings -0.3671 -0.619 -0.986 -0.986 -0.986
Total comprehensive income -0.367 -0.619 -0.986 27.818 26.832 0 26.832
Dividend payment -25.229 -25.229 -25.229
Value on 30/06/2017 10.143 29.374 282.737 -1.463 -3.235 278.039 41.983 359.539 0 359.539
Previous year
Value on 01/10/2015 10.143 28.595 249.144 -0.554 -1.791 246.799 34.083 319.620 0.686 320.306
Earnings after income tax 41.788 41.788 0.054 41.842
Other earnings -0.3381 -0.021 -0.359 -0.359 -0.359
Total comprehensive income -0.338 -0.021 -0.359 41.788 41.429 0.054 41.483
Dividend payment -24.704 -24.704 -24.704
Changes in treasury shares 0.779 0.779 0.779
Value on 30/06/2016 10.143 29.374 249.144 -0.892 -1.812 246.440 51.167 337.124 0.740 337.864

CONSOLIDATED CASH FLOW STATEMENT

Net profit for the period (including minority interests) before exceptionals Income taxes Interest income/expense Other net financial result Income from investments accounted for using the equity method Depreciation of non-current assets Increase/decrease in provisions Other non-cash income/expense Profit/loss from disposal of non-current assets Increase/decrease in inventories, future receivables from construction contracts, receivables and other assets as well as other assets not assigned to investing or financing activities Increase/decrease in trade payables and other liabilities not assigned to investing or financing activities Income tax received/paid Interest paid Interest received Cash flows from operating activities (1.–14.) Payments received from disposal of property, plant and equipment Payments received from the disposal of financial assets Payments made for capital expenditure on property, plant and equipment Payments made for investments in intangible assets Payments made for investments in financial assets Payments made to acquire consolidated companies and other businesses Cash flows from investing activities (16.–21.) Payment received from the sale of treasury shares Payments made to shareholders and minority shareholders Payments received from issue of debt instruments and raising of loans Payments made for discharging debt instruments and repaying loans Cash flows from financing activities (23.–26.) Changes in cash and cash equivalents (15. + 22. + 27.) Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (28.–30.) 01/10 to 30/06 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. EUR million Q1–Q3 2015/2016 41.842 17.869 1.618 -0.341 -0.015 22.048 -26.874 -0.039 -0.218 10.370 0.599 -19.867 -0.071 0.311 47.232 1.673 1.455 -57.045 -4.701 -1.319 0 -59.937 0.779 -24.704 199.600 -39.642 136.033 123.328 -0.153 13.068 136.243 Consolidated cash flow statement Q1–Q3 2016/2017 27.818 8.858 3.113 -1.173 -0.316 25.303 -28.618 -1.117 -0.196 -12.936 9.680 -17.517 -3.718 1.408 10.589 1.122 1.053 -25.637 -3.056 -0.257 -0.029 -26.804 0 -25.229 0 -0.967 -26.196 -42.411 -0.113 159.821 117.297

_____ TABLE 12

_____ TABLE 13

Total of all divisions
2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016
449.159 431.265 160.959 160.230 161.735 152.853 771.853 744.348
16.591 6.485 12.437 6.981 8.058 2.971 37.086 16.437
432.568 424.780 148.522 153.249 153.677 149.882 734.767 727.911
62.246
2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016
250.120
7.001
142.078 140.905 44.901 50.260 50.562 51.954 237.541 243.119
20.040
17.642
147.604
5.526
1.090
Digital Engineering
33.263
144.349
3.444
9.608
9.788
50.986
6.085
1.003
Physical Engineering
13.867
52.796
2.536
5.149
12.392
53.404
2.842
2.114
Electrical Systems/
Electronics
15.116
52.975
1.021
5.283
39.822
251.994
14.453
4.207
Shares owned by members of the Management and Supervisory Boards
number
Shares Shares
Balance at 30/06/2017 Balance at 30/09/2016
Management Board
Dietmar Bichler 400,000 400,000
Hans-Gerd Claus 0 0
Michael Lücke 0 0
Markus Ruf 0 0
Supervisory Board
Dr Klaus Bleyer 0 0
Maximilian Wölfle 0 0
Horst Binnig 0 0
Prof. Dr-Ing. Wilfried Sihn 0 0
Stefanie Blumenauer 0 0
Astrid Fleischer 98 98
Total 400,098 400,098

_____ TABLE 14

Options are not disclosed here as there is currently no option programme.

BASIC INFORMATION __________________________________________________________________________

The consolidated financial statements of Bertrandt Aktiengesellschaft, registered at Birkensee 1, 71139 Ehningen, Germany (register number HRB 245259, commercial register of the local court of Stuttgart), for the year ending 30 September 2016 were prepared using the International Financial Reporting Standards (IFRS) effective at the reporting date and as endorsed by the European Union (EU).

The presented consolidated interim financial statements as at 30 June 2017 were prepared based on International Accounting Standard (IAS) 34 Interim Financial Reporting, in principle applying the same reporting methods as in the consolidated financial statements for fiscal 2015/2016. The provisions of Section 315a (1) German Commercial Code (HGB) as well as all the standards and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC), which are subject to mandatory application in fiscal 2016/2017, have been considered.

A detailed description of these methods is published in the Notes to the Consolidated Financial Statements of the Annual Report for fiscal 2015/2016. The Annual Report is also accessible on the internet at www.bertrandt.com.

These interim consolidated financial statements were compiled in euros. Unless stated otherwise, all amounts are shown in millions of euros (EUR million).

International Financial Reporting Standards and Interpretations that are subject to mandatory application as of fiscal 2016/2017

The following table sets out the International Financial Reporting Standards and Interpretations that are subject to mandatory application as of fiscal 2016/2017.

International Financial Reporting Standards and Interpretations that have been published but are not yet mandatory

The following standards and interpretations have already been adopted by the International Accounting Standards Board (IASB) and to some degree approved by the EU but they were not yet mandatory in fiscal 2016/2017. Bertrandt will apply them for the accounting period for which they become mandatory.

CONDENSED CONSOLIDATED NOTES

Standard/
Interpretation
Compulsory
application1
Expected effects
IFRS 22 Classification and Measurement of Share-based Payment Transactions 01/01/2018 None
IFRS 42 Amendments to IFRS 4: Insurance Contracts – Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts
01/01/2018 Currently under
examination
IFRS 9 Financial Instruments 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 10 and IAS 283 Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
not specified None
IFRS 154 Revenue from Contracts with Customers 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 152,4 Amendments to IFRS 15 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 162 Leasing 01/01/2019 Lessee is required
to recognise a
right-of-use asset
and a lease liability
in the balance
sheet for all leases.
More detailed
disclosures in the
Notes
IFRS 172 Insurance Contracts 01/01/2021 Currently under
examination
IAS 72 Amendments to IAS 7: Statement of Cash Flows – Disclosure Initiative 01/01/2017 None
IAS 122 Amendments to IAS 12: Income Taxes – Recognition of Deferred Tax Assets for
Unrealised Losses
01/01/2017 None
IAS 402 Amendments to IAS 40: Transfers of Investment Property 01/01/2018 Currently under
examination
Improvements of IFRS Adoption of Annual Improvements to IFRS Cycle 2014-2016 01/01/2017/
01/01/2018
Single-case audit
IFRIC 222 IFRIC Interpretation 22: Foreign Currency Transactions and Advance Considerations 01/01/2018 Currently under
examination
IFRIC 232 IFRIC Interpretation 23: Uncertainty over Income Tax Treatments 01/01/2019 Currently under
examination
Standard/
Interpretation
Compulsory
application1
Expected effects
IFRS 22 Classification and Measurement of Share-based Payment Transactions 01/01/2018 None
IFRS 42 Amendments to IFRS 4: Insurance Contracts – Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts
01/01/2018 Currently under
examination
IFRS 9 Financial Instruments 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 10 and IAS 283 Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
not specified None
IFRS 154 Revenue from Contracts with Customers 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 152,4 Amendments to IFRS 15 01/01/2018 No substantial
effects, more
detailed disclosures
in the Notes
IFRS 162 Leasing 01/01/2019 Lessee is required
to recognise a
right-of-use asset
and a lease liability
in the balance
sheet for all leases.
More detailed
disclosures in the
Notes
IFRS 172 Insurance Contracts 01/01/2021 Currently under
examination
IAS 72 Amendments to IAS 7: Statement of Cash Flows – Disclosure Initiative 01/01/2017 None
IAS 122 Amendments to IAS 12: Income Taxes – Recognition of Deferred Tax Assets for
Unrealised Losses
01/01/2017 None
IAS 402 Amendments to IAS 40: Transfers of Investment Property 01/01/2018 Currently under
examination
Improvements of IFRS Adoption of Annual Improvements to IFRS Cycle 2014-2016 01/01/2017/
01/01/2018
Single-case audit
IFRIC 222 IFRIC Interpretation 22: Foreign Currency Transactions and Advance Considerations 01/01/2018 Currently under
examination
IFRIC 232 IFRIC Interpretation 23: Uncertainty over Income Tax Treatments 01/01/2019 Currently under
examination

1Fiscal years beginning on or after the specified date.

2Not yet endorsed by the EU.

3Postponed to a date to be determined by the IASB.

4A group-wide, centrally managed project was set up in early 2016; a final evaluation is planned for the upcoming financial year.

_____ TABLE 16

Standard/
Interpretation
Compulsory
application1
Expected
effects
IFRS 11 Amendments to IFRS 11: Joint Arrangements – Accounting for Acquisitions
of Interests in Joint Operations
01/01/2016 None
IFRS 10, IFRS 12
and IAS 28
Amendments to IFRS 10, IFRS 12 and IAS 28 – Investment Entities:
Applying the Consolidation Exception
01/01/2016 None
IAS 1 Amendments to IAS 1: Presentation of Financial Statements – Disclosure Initiative 01/01/2016 None
IAS 16 and IAS 38 Amendments to IAS 16 and IAS 38 – Clarification of Acceptable Methods
of Depreciation and Amortisation
01/01/2016 None
IAS 16 and IAS 41 Amendments to IAS 16 and IAS 41 – Agriculture: Bearer Plants 01/01/2016 None
IAS 27 Amendments to IAS 27: Separate Financial Statements – Equity Method in
Separate Financial Statements
01/01/2016 None
Improvements of IFRS Adoption of Annual Improvements to IFRS Cycle 2012-2014 01/01/2016 Single-case audit

1Financial years beginning on or after the specified date.

_____ TABLE 15
----------------

GROUP OF CONSOLIDATED COMPANIES ______________________________________________________

The group of consolidated companies includes all operating subsidiaries under the legal and constructive control of Bertrandt AG. This specifically entails the following German companies: Bertrandt Ingenieurbüro GmbHs in Gaimersheim, Ginsheim-Gustavsburg, Hamburg, Cologne, Munich, Neckarsulm and Tappenbeck as well as Bertrandt Fahrerprobung Süd GmbH in Nufringen, Bertrandt Projektgesellschaft mbH, Bertrandt Services GmbH, Bertrandt Technikum GmbH in Ehningen and Bertrandt Technologie GmbHs in Immendingen, Mönsheim and Sassenburg, Bertrandt Ehningen GmbH in Ehningen, Bertrandt GmbH in Hamburg, Bertrandt Verwaltungs GmbH in Mönsheim, Bertrandt Automotive GmbH & Co. KG, Bertrandt Immobilien GmbH & Co. KG and Bertrandt Grundbesitz GmbH & Co. KG, each located in Pullach i. Isartal, as well as Bertrandt Energie GmbH in Mönsheim, Bertrandt Munich GmbH in Munich and Bertrandt Tappenbeck GmbH in Tappenbeck. In addition, Fariba GmbH & Co. KG (formerly Appalusa Grundstücksverwaltungsgesellschaft mbH) in Mainz and the entities newly incorporated in the year under review, Bertrandt Beteiligungen GmbH and Bertrandt Solutions GmbH, each located in Ehningen, as well as Bertrandt Grundstücks GmbH in Nufringen, and b.professional GmbH in Mannheim were included for the first time in the consolidated financial statements.

The consolidated companies additionally include the foreign entities Bertrandt Engineering Shanghai Co., Ltd. in Shanghai, Bertrandt Engineering Technologies Romania SRL in Sibiu, Bertrandt France S.A., Bertrandt S.A.S. each located in Paris/Vélizy-Villacoublay, Bertrandt Otomotiv Mühendislik Hizmetleri Ticaret Limited Sirketi in Istanbul, Bertrandt Technologie GmbH in Steyr, Bertrandt UK Limited in Dunton, and Bertrandt US Inc. in Detroit.

Associates, i.e. entities which are not controlled by Bertrandt but over which the Company has significant influence are accounted for in the interim financial statements using the equity method. The following companies are associates: aucip. automotive cluster investment platform GmbH & Co. KG, Bertrandt Entwicklungen AG & Co. OHG, each located in Pullach i. Isartal, as well as indirect investments in aucip. automotive cluster investment platform Beteiligungs GmbH, MOLLIS automotive GmbH, NAMENU tool GmbH, and, for the first time MCIP tool GmbH, all of them located in Pullach i. Isartal. In addition, Bertrandt Campus GmbH, Ehningen and, for the first time, the indirect investment in Bertrandt Campus Grundbesitz GmbH, Ehningen, two joint ventures of which Bertrandt has joint control, are also accounted for in the consolidated financial statements under the equity method.

_____ TABLE 17

Currency translation
relative to one euro
30/06/2017
China CNY 7.7247
United Kingdom GBP 0.8787
Romania RON 4.5539
Turkey TRY 4.0098
Hungary HUF 309.3000
United States USD 1.1403
Average rate on
balance sheet date
Average rate Q1–Q3
30/06/2016 2016/2017 2015/2016
7.7247 7.3893 7.4114 7.1890
0.8787 0.8262 0.8621 0.7595
4.5539 4.5210 4.5247 4.4828
4.0098 3.2129 3.8036 3.2346
309.3000 316.9000 309.4680 312.6000
1.1403 1.1143 1.0814 1.1092

FOREIGN CURRENCY TRANSLATION __________________________________________________________

The interim consolidated financial statements of subsidiaries using a functional currency other than the euro are translated according to IAS 21. The subsidiaries carry out their business independently for financial, commercial and organisational purposes. The functional currency is therefore identical to the currency of the country in which they are based.

Accordingly, for the interim financial statements these companies' assets and liabilities were translated at the mean closing rate at the date of the statement of financial position, and income and expenses were translated at the average exchange rate for the period. All resulting exchange differences including differences resulting from the translation of amounts brought forward from the previous year are recognised directly in equity.

Foreign currency transactions are recorded by translating the foreign currency amount into the functional currency amount at the exchange rate prevailing on the date of the transaction. Gains and losses arising from the settlement of such transactions as well as from the translation at the reporting date of monetary assets and liabilities held in foreign currencies are recognised in profit or loss.

The parities of the key currencies relative to one euro were as follows:

RELATED PARTY DISCLOSURES _______________________________________________________________

On 2 July 2014 Dr. Ing. h.c. F. Porsche AG, Stuttgart, increased its shareholding in Bertrandt AG by nearly four percentage points. After the share purchase, Volkswagen now indirectly holds around 29 percent of voting shares in Bertrandt. As in the past it is not the intention of Volkswagen to exercise influence on the Supervisory Board or the Management Board. From the date of the purchase of the shares, Bertrandt AG will be accounted for as an associate in the consolidated financial statements of the Volkswagen group under the equity method. Accordingly, the Volkswagen group has to be classified as a related party pursuant to IAS 24. All supplier relationships between Bertrandt AG and the Volkswagen group were based on arm's length prices. The revenues arising from transactions with all Volkswagen group companies amounted to EUR 256.046 million in the period under review (previous year EUR 290.744 million). As of the balance sheet date, receivables amounted to EUR 68.566 million (previous year EUR 60.005 million).

Earnings per share (EUR) – diluted/basic

Consolidated income statement
EUR million
Revenues
Other internally generated assets
Total revenues
Other operating income
Raw materials and consumables used
Personnel expenses
Depreciation
Other operating expenses
Operating profit
Net finance income
Profit from ordinary activities
Other taxes
Earnings before tax
Income taxes
Earnings after income tax
– attributable to minority interest
– attributable to shareholders of Bertrandt AG
Number of shares (million) –
diluted/basic, average weighting
Q3 16/17 Q2 16/17 Q1 16/17 Q4 15/16 Q3 15/16
237.541 251.389 245.837 264.110 243.119
0.519 0.229 0.173 0.258 0.159
238.060 251.618 246.010 264.368 243.278
1.623 2.339 2.489 1.330 3.416
-26.352 -25.465 -26.140 -25.595 -23.970
-177.371 -179.714 -170.921 -181.622 -172.624
-8.502 -8.435 -8.366 -7.677 -7.702
-23.251 -22.351 -25.449 -20.185 -22.358
4.207 17.992 17.623 30.619 20.040
-0.806 -0.249 -0.569 -0.116 -0.585
3.401 17.743 17.054 30.503 19.455
-0.404 -0.638 -0.480 -0.401 -0.504
2.997 17.105 16.574 30.102 18.951
-0.158 -3.726 -4.974 -8.336 -5.968
2.839 13.379 11.600 21.766 12.983
0 0 0 0 0.012
2.839 13.379 11.600 21.766 12.971
10.091 10.091 10.091 10.091 10.091
0.28 1.33 1.15 2.16 1.28

QUARTERLY SURVEY

_____ TABLE 18

FAIR VALUE DISCLOSURES ____________________________________________________________________

The principles and methods used for fair value measurement have remained unchanged compared to fiscal 2015/2016.

Because of the short maturities of the Company's financial assets and financial liabilities, it is assumed that their fair value is equal to their carrying amount. The fair values of the non-current financial liabilities amount to EUR 227.462 million (previous year EUR 210.238 million) on account of the movement in interest rates in the reporting period up to 30 June 2017.

The financial assets and financial liabilities at fair value through profit or loss generally comprise derivatives to hedge foreign exchange and interest risks.

The derivatives' fair values are determined with generally accepted methods of financial mathematics, using mid-market pricing. All derivatives with a positive fair value are disclosed as derivative assets, while all derivatives with a negative fair value are disclosed as derivative liabilities.

As at 30 June 2017 the fair value of all balance sheet items valued at their fair value was EUR 0 million (EUR 0 million as at 30 September 2016). In the period under review, no foreign exchange forward contract or interest rate hedging contract was outstanding.

The fair value hierarchy established by IFRS 13 defines three levels of inputs to valuation techniques which depend on the availability of observable market prices in an active market. Level one input is input available for financial instruments that are measured at quoted prices in active markets for identical assets or liabilities. Financial instruments that are measured using Level two inputs are measured on the basis of inputs other than quoted prices included within Level one, which are observable either directly or indirectly. Level three input refers to market data for the measurement of financial instruments that are unobservable. Interest rate derivatives and foreign exchange forward contracts are categorised as Level two, other derivatives as Level three. Non-current financial liabilities are categorised as Level two. As in the previous year, there were no transfers between the three levels of the fair value hierarchy. A sensitivity analysis is performed every year, analysing and evaluating internal and external information and conditions for their probability of occurrence and the resulting financial burdens. As in the previous year, the sensitivity analysis carried out in the first quarter of fiscal 2015/2016 for derivatives measured according to Level three of the fair value hierarchy did not lead to any change in the carrying amount.

MATERIAL EVENTS AFTER THE REPORTING PERIOD _________________________________________

There were no material events after the reporting period of 1 October 2016 to 30 June 2017.

GERMAN CORPORATE GOVERNANCE CODE __________________________________________________

The declarations of compliance with the German Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act (AktG) by the Management and Supervisory Boards of Bertrandt AG are accessible on the internet at www.bertrandt.com.

ROADSHOWS AND CONFERENCES

Annual report 2016/2017 Annual press and analysts' conference 14 December 2017

Annual General Meeting 21 February 2018 10:30 City Hall Sindelfingen

Report on the 1st quarter 2017/2018 February 2018

FINANCIAL CALENDAR

Published and edited by Bertrandt AG Birkensee 1, 71139 Ehningen

Germany Telephone +49 7034 656-0 Telefax +49 7034 656-4100 www.bertrandt.com [email protected]

HRB 245259 Amtsgericht Stuttgart

Contact Dr Markus Götzl Investor Relations Telephone +49 7034 656-4201 Telefax +49 7034 656-4488 [email protected]

Design, layout and production SAHARA Werbeagentur, Stuttgart www.sahara.de

Photos Andreas Körner, Stuttgart

CREDITS

Dates

ROADSHOWS AND

CONFERENCES

Legal Notice

This report contains inter alia certain foresighted statements about future developments, which are based on current estimates of management. Such statements are subjected to certain risks and uncertainties. If one of these factors of uncertainty or other imponderables should occur or the underlying accepted statements proved to be incorrent, the actual results could deviate substantially from or implicitly from the expressed results specified in these statements. We have neither the intetion nor do we accept the obligation of updating foresighted statements constantly since these proceed exclusively from the circumstances on the day of their publication.

As far as this report refers to statements of third parties, in particular analyst estimations, the organisation neither adopts these, nor are these rated or commented thereby in other ways, nor is the claim laid to completeness in this respect.