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Bertrandt AG Interim / Quarterly Report 2017

May 31, 2017

59_10-q_2017-05-31_216c6902-a999-4cd9-8d5c-5f8d29ad51b7.pdf

Interim / Quarterly Report

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FISCAL 2016/2017

REPORT ON THE 1ST HALF 1 OCTOBER 2016 TO 31 MARCH 2017

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

CI-1231-05.17-A

Income statement
Revenues (EUR million)
Operating profit (EUR million)
01/10/16–
31/03/17
Changes
in %
01/10/15–
31/03/16
497.226 2.6 484.792
35.615 -15.6 42.206
Profit from ordinary activity (EUR million) 34.797 -16.2 41.529
Earnings after income tax (EUR million) 24.979 -13.4 28.859
Cash flow statement
Cash flow from operating activities (EUR million) 39.672 -36.5 62.456
Cash flow from investing activities (EUR million) -18.107 -56.6 -41.681
Free cash flow (EUR million) 21.565 3.8 20.775
Capital spending (EUR million) 19.573 -55.9 44.302
Balance sheet
Equity (EUR million) 357.544 10.3 324.099
Equity ratio (%) 46.7 2.4 45.6
Total assets (EUR million) 765.582 7.8 710.437
Share
Earnings per share (EUR) 2.48 -13.3 2.86
Share price on 31 March (EUR)1 91.13 -9.6 100.85
Share price, high (EUR)2 98.00 -12.4 111.85
Share price, low (EUR)2 84.24 -8.9 92.50
Shares outstanding on 31 March (number) 10,143,240 10,143,240
Market capitalisation on 31 March (EUR million) 924.4 -9.6 1,022.9
Employees
Number of employees at Bertrandt Group
on 31 March
13,098 3.4 12,663

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

THE FIRST HALF YEAR AT A GLANCE

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

_____ TABLE 01

OVERVIEW

With key technology trends continuing undiminished, the main drivers of Bertrandt's business performance are unchanged. An increasing variety of models and variants, environmentally friendly individual mobility and connected and automated driving continue to offer business opportunities 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. The present delay in the awarding of external development contracts casts no doubt on Management's assessment that the medium-term economic conditions are positive for the Company's business model.

Faced with a challenging environment, the Bertrandt Group developed as follows in the first half of fiscal 2016/2017:

  • Total revenues in the first six months of fiscal 2016/2017 rose by 2.6 percent year on year to EUR 497.628 million (previous year EUR 485.047 million).
  • Operating profit in the first half amounted to EUR 35.615 million (previous year EUR 42.206 million), equal to a margin of 7.2 percent (previous year 8.7 percent).
  • Post-tax earnings generated in the period under review were EUR 24.979 million (previous year EUR 28.859 million).
  • Earnings per share were EUR 2.48 in the first six months of fiscal 2016/2017 (previous year EUR 2.86).
  • The workforce increased by 186 over the end of fiscal 2015/2016 to 13,098 employees (12,912 employees on 30 September 2016).
  • Capital expenditure amounted to EUR 19.544 million (previous year EUR 44.302 million and EUR 83.404 million as at 30 September 2016).
  • The Company had free cash flow of EUR 21.565 million (previous year EUR 20.775 million).
  • With an equity ratio of 46.7 percent (46.9 percent as at 30 September 2016), Bertrandt remains one of the solid companies in the automotive sector.
  • Total assets increased compared to the end of fiscal 2015/2016 to EUR 765.582 million (EUR 763.314 million as at 30 September 2016).

Bertrandt's comprehensive range of services provides each customer with customised and all-in solutions along the entire product engineering process. As one of Europe's leading engineering specialists, Bertrandt is a reliable partner when it comes to meeting current and future challenges across all engineering project stages. All the expertise of the entire Bertrandt Group is available to customers through their local Bertrandt subsidiary, because Bertrandt's Competence Centre structure is replicated throughout the Group.

27

QUARTERLY REPORT

MILLION EUROS FOR TECHNOLOGIES, INFRASTRUCTURE AND SPECIALIST KNOW-HOW

WE EXPANDED AND DEEPENED OUR EXPERTISE in automotive trends in the last fiscal year by investing in new technologies and infrastructure.

19.573

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 maintain dedicated design studios, electronics labs as well as testing facilities where projects of different sizes are managed in cooperation with our customers. 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 and are key success factors for Bertrandt.

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, and this makes us one of the leading European partners on the market for engineering services. The engineering expertise Bertrandt has 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. In addition, numerous automotive manufacturers confirmed in the past weeks that they intend to increase spending on research and development, which is important for Bertrandt.

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. A recent longterm forecast by Boeing group anticipates worldwide demand for new aircraft for civil aviation rising to 39,620 units between 2016 and 2035. This is equal to a present market value of almost EUR 5.3 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.

In the four key industries in which Bertrandt operates apart from the automotive and aerospace sectors, German companies have become more optimistic about their current business situation. 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 well as machinery and plant engineering sectors, rose to 112.4 points in March. This is higher than at any time since June 2011. Companies also increasingly expect the positive business situation to continue.

GROUP MANAGEMENT REPORT

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 the sharpest possible 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

According to the expert members of the Joint Economic Forecast Project Group the global economy is expanding strongly in spring 2017. The US economy has gained momentum since the summer of 2016 and the eurozone has also been experiencing a moderate upturn for some time now. The pace of growth in the Chinese economy has picked up over the last year, mainly due to government economic stimulus programmes. The project group's experts consequently anticipate global economic growth of three percent this year, compared to 2.6 percent in the previous year. In their new Spring Economic Forecast, the institutes have slightly raised the estimates regarding the development of economic activity, which they produced in their last autumn report. For 2017, the experts anticipate potential economic growth of 1.5 percent over the previous year's figure of 1.9 percent. However, the lower growth rate this year is explained by the fact that 2017 has three fewer working days than the previous year.

Sector trends

New car sales remained high in the first three months of 2017, according to the German Association of the Automotive Industry (VDA). Decreasing by 1.4 percent from January to March, the light vehicle market in the US was almost at the previous year's level. The volume of new registrations in Europe rose by almost 8.4 percent during the same period. In China, the number of newly registered cars increased 5.7 percent year on year.

Business performance

The Bertrandt Group's business performance in the first three months of fiscal 2016/2017 was less dynamic than expected by Management. This was mainly due to temporary fluctuations in the demand for capacity and the continuing price pressure, which has slowed down the pace of business

development.

Total revenues

In the period under review, Bertrandt generated revenues of EUR 497.226 million (previous year EUR 484.792 million), equivalent to a margin of 2.6 percent. All of the Group's divisions – Digital Engineering, Physical Engineering and Electrical Systems/Electronics – achieved growth over the previous year. Total revenues increased by EUR 12.581 million on the previous year to EUR 497.628 million. _____ CHART 02

54

locations worldwide belong to the Bertrandt Group.

_____ CHART 02 Bertrandt generated

a year-on-year increase in its revenues in the period under review.

2.6

percent above the previous year: the amount by which Bertrandt increased its revenues in the first half of fiscal 2016/2017.

_____ CHART 05

Free cash flow has remained at the level of the previous year as a result of lower total investment and despite a lower cash flow from operating activities.

_____ CHART 04

The equity ratio remains at a high level.

_____ CHART 06

Capital expenditure was adjusted to account for the current business situation.

Capital spending (1st half) EUR million 60.000 50.000 40.000 30.000 20.000 10.000 0 21.593 14.677

Key expenditure figures

Owing to the greater volume of business, expenses in the first half of fiscal 2016/2017 increased, breaking down as follows: The cost of materials increased to EUR 51.605 million (previous year EUR 48.532 million). Total personnel expenses in the period under review were EUR 350.635 million (previous year EUR 341.435 million). The staff cost ratio was 70.5 percent (previous year 70.4 percent). Growth caused other operating expenses to rise to EUR 47.800 million (previous year EUR 45.253 million).

Operating profit

In the first six months of the current fiscal year Bertrandt's operating profit was EUR 35.615 million (previous year EUR 42.206 million), equal to a margin of 7.2 percent (previous year 8.7 percent). Net finance income was EUR -0.818 million (previous year EUR -0.677 million). Profit from ordinary activities in the period under review was EUR 34.797 million (previous year EUR 41.529 million). Based on a tax rate of 25.8 percent, the Company generated post-tax earnings of EUR 24.979 million (previous year EUR 28.859 million).

_____ CHART 03

Financial position

Bertrandt's balance sheet as at 31 March 2017 was as follows: Total assets increased by EUR 2.268 million to EUR 765.582 million (EUR 763.314 million as at 30 September 2016). Non-current assets were EUR 296.403 million as at the balance sheet date (EUR 271.790 million as at 30 September 2016). Current assets amounted to EUR 469.179 million (EUR 491.524 million as at 30 September 2016).

Equity remained nearly unchanged in the first half of fiscal 2016/2017, despite a dividend payment of EUR 25.228 million in total (previous year EUR 24.704 million), and was EUR 357.544 million as at the balance sheet date (EUR 357.936 million as at 30 September 2016). Current liabilities amounted to EUR 157.108 million (EUR 167.594 million as at 30 September 2016). With an equity ratio of 46.7 percent (46.9 percent as at 30 September 2016), Bertrandt is one of the financially strong companies in the automotive sector.

_____ CHART 04

In the first six months of the current fiscal year Bertrandt's cash flow from operating activities was EUR 39.672 million (previous year EUR 62.456 million). Cash flow declined because a non-recurring item ceased to apply in the past year, with a normalising effect on current assets. The decrease in capital expenditure compared to the first half of fiscal 2015/2016 meant that also net cash outflow from investing activities decreased year on year, amounting to EUR -41.681 million (previous year EUR -18.107 million). Free cash flow at the end of the first half of fiscal 2016/2017 was EUR 21.565 million (previous year EUR 20.775 million). _____ CHART 05

In the first six months of the current fiscal year the Company made the necessary investment in buildings and technical equipment, investing EUR 19.544 million (previous year EUR 44.302 million). Bertrandt thus intends to continue to focus its investment activities in building up and expanding its infrastructure with the aim of continually optimising its range of services.

_____ CHART 06

Operating profit decreased compared to the previous year, due to underutilization of capacity in certain areas and continuing price pressure.

Operating profit (1st half)

EUR million 50.000 40.000 30.000 20.000 10.000 0

12/13 13/14 14/15

43.796 41.059

37.165 35.615

42.206

15/16 16/17

_____ CHART 07

The number of employees rose by 435 over the same period last year.

Employees (on 31 March) number 15,000 12,500 10,000 7,500 5,000 2,500 0 12/13 13/14 14/15 11,859 11,195 10,260 13,098 12,663 15/16 16/17

Human resources

The Bertrandt group continued building up staff in the first half of fiscal year 2016/2017. As of 31 March 2017 the number of employees had risen by 186 compared to 30 September 2016. At the end of the first half of fiscal 2016/2017 the Group had 13,098 employees (13,061 employees as at 31 December 2016 and 12,912 employees as at 30 September 2016). This is equal to an increase of 435 on the same period last year (12,663 employees as at 31 March 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 reflect the numerous changes in the automotive sector, the development 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. Making these important decisions requires considerable time, which leads to delays in project awards. The ongoing consolidation process among OEMs and the resulting restructuring of responsibilities in the different corporate units also affect current and announced projects. The price pressure, which has been increasing since the first quarter of the past fiscal year, is still continuing.

13,098

employees worked for Bertrandt on the reporting date.

It is also difficult to predict ongoing geopolitical developments, for example the progress of the Brexit negotiations and the economic repercussions of policies of the new 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 six 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 remaining quarters of the current fiscal year. Accordingly, the short-term outlook for the current financial year has been adjusted to account for the currently prevailing economic environment. However, the medium-term prospects of Bertrandt's core industries and the technology trends on which they are based are still intact. A broad strategic alignment and a solid financial base will continue to provide a stable foundation for the business growth of the Bertrandt Group in the future.

Potentials

The three major influencing factors, i.e. the increasing variety of models and variants, environmentally friendly individual mobility and connected and automated driving, are still relevant. Bertrandt is therefore confident that there is further potential for the Company 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

In their spring reports, leading German economic research institutes forecast continued global economic growth. The pace of growth is expected to maintain the dynamism observed of late. On an annual average, an increase in global economic growth from 2.6 in the past year to 3.0 percent in 2017 and 2.9 percent in the following year is pos-

sible.

According to the VDA, the number of different electric vehicle models offered by German OEMs will more than triple by 2020 from currently 30 to almost 100 models. As early as 2019, electric drives will be built into more or less all series, either as plug-in hybrids or battery-powered electric drives. Up to 2020, German OEMs will invest more than EUR 40 billion in the development of alternative drive technologies. Besides working on e-mobility, carmakers are optimising conventional engines. The VDA expects these optimised drives to reduce fuel consumption by 10 to 15 percent. For the passenger car market growth to 91 million new cars by 2020 is anticipated.

A survey of 46 German trade associations conducted by the Cologne Institute for Economic Research (IW) showed that 28 associations expect their sector to produce more in 2017 than in the previous year. Most of these were associations in the key industries in which Bertrandt operates. However, uncertainty remains, bearing in mind German industry's strong focus on exports, the uncertain outcome of the Brexit negotiations and the new US administration in particular.

percent: the growth rate for global economic output in 2017 expected by the Spring Economic Forecast.

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. However, considering Bertrandt's course of business in the first six months of the fiscal year and the development in the automotive industry, the Management Board of Bertrandt AG decided to adjust its assessment of the development of fiscal 2016/2017 as a whole to reflect the currently challenging economic environment. Thus, 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. For the next year overall, Bertrandt therefore anticipates positive cash flow from operating activities, which will however fall by a corresponding amount compared to fiscal 2015/2016 given that no significant positive or negative special effects of the kind that occurred in fiscal 2014/2015 and 2015/2016 are expected.

The three major influencing factors, i.e. the increasing variety of models and variants, environmentally friendly individual mobility and connected and automated driving, are intact and continue to offer business opportunities. 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.

Since the Management Board believes that the effects on business performance are of a temporary nature, it intends to maintain the absolute amount of the dividend of EUR 2.50 for the current fiscal year 2016/2017 and to deviate from its 40 percent dividend policy in this fiscal year to the benefit of the shareholders.

The Bertrandt share

The DAX started the second quarter of fiscal 2016/2017 on 2 January 2017 opening at 11,426 points and climbing to 12,313 points as of the last day of trading. The SDAX started the period at 9,520 points and climbed to 10,093 points as of the end of the period. The Prime Automobile Performance Index oscillated between 1,499 and 1,547 points.

The Bertrandt share started the second quarter of the fiscal year 2016/2017 by opening in Xetra trading at EUR 96.30. On 22 March 2017 the share hit a low for the period under review of EUR 84.24. It reached its high for the period of EUR 98.00 on 4 January 2017 and closed at EUR 91.13 in Xetra trading on the last day of trading. The average daily trading volume in the second quarter of fiscal 2016/2017 was 26,464 shares.

Analysts' ratings of the Bertrandt share and information on our Company can be found at www.bertrandt.com under Investor Relations.

91.13

euro was the price at which the Bertrandt share closed in Xetra trading on 31 March 2017.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Consolidated income statement and statement of comprehensive income
EUR million
01/10 to 31/03
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.

Q2 Q2 Q1 + Q2 Q1 + Q2
2016/2017 2015/2016 2016/2017 2015/2016
251.389 241.623 497.226 484.792
0.229 0.149 0.402 0.255
251.618 241.772 497.628 485.047
2.339 4.091 4.828 6.725
-25.465 -23.217 -51.605 -48.532
-179.714 -175.609 -350.635 -341.435
-8.435 -7.408 -16.801 -14.346
-22.351 -21.544 -47.800 -45.253
17.992 18.085 35.615 42.206
0.156 0.028 0.253 0.019
-1.229 -0.622 -1.964 -0.953
-0.050 0 -0.069 0
0.874 0.164 0.962 0.257
-0.249 -0.430 -0.818 -0.677
17.743 17.655 34.797 41.529
-0.638 -0.344 -1.118 -0.769
17.105 17.311 33.679 40.760
-3.726 -4.986 -8.700 -11.901
13.379 12.325 24.979 28.859
0 0.013 0 0.042
13.379 12.312 24.979 28.817
10.091 10.083 10.091 10.083
1.33 1.22 2.48 2.86
13.379 12.325 24.979 28.859
-0.144 -0.209 0.270 -0.348
-0.295 -0.010 -0.589 -0.020
0.089 0.003 0.177 0.006
-0.350 -0.216 -0.142 -0.362
13.029 12.109 24.837 28.497
0 0.013 0 0.042
13.029 12.096 24.837 28.455

_____ TABLE 09

BERTRANDT LOCATIONS WORLDWIDE.

ALWAYS IN CLOSE PROXIMITY TO OUR CUSTOMERS,always in dialogue – these two principles are reflected in Bertrandt›s decentralised organisation. We are present internationally with extensive design and testing areas to support our customers on site.

54

CONSOLIDATED BALANCE SHEET

Consolidated balance sheet
EUR million
31/03/2017 30/09/2016
Assets
Intangible assets 16.377 17.480
Property, plant and equipment 261.197 235.800
Investment properties 1.507 1.540
Investments accounted for using the equity method 5.330 5.077
Other financial assets 2.033 2.729
Receivables and other assets 7.084 6.691
Deferred taxes 2.875 2.473
Non-current assets 296.403 271.790
Inventories 1.061 0.889
Future receivables from construction contracts 134.806 114.130
Receivables and other assets 174.459 241.851
Income tax assets 2.968 1.833
Cash and cash equivalents 155.885 159.821
Current assets 469.179 491.524
Total assets 765.582 763.314
Equity and liabilities
Issued capital 10.143 10.143
Capital reserve 29.374 29.374
Retained earnings and other comprehensive income 278.883 279.025
Consolidated distributable profit 39.144 39.394
Equity 357.544 357.936
Provisions 13.000 16.927
Borrowings 217.009 199.701
Other liabilities 0.231 0.246
Deferred taxes 20.690 20.910
Non-current liabilities 250.930 237.784
Tax provisions 7.424 7.548
Other provisions 26.620 46.586
Borrowings 3.559 2.367
Trade payables 15.203 15.066
Other liabilities 104.302 96.027
Current liabilities 157.108 167.594
Total equity and liabilities 765.582 763.314

_____ 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 24.979 24.979 0 24.979
Other earnings 0.2701 -0.412 -0.142 -0.142 -0.142
Total comprehensive income 0.270 -0.412 -0.142 24.979 24.837 0 24.837
Dividend payment -25.229 -25.229 -25.229
Value on 31/03/2017 10.143 29.374 282.737 -0.826 -3.028 278.883 39.144 357.544 0 357.544
Previous year
Value on 01/10/2015 10.143 28.595 249.144 -0.554 -1.791 246.799 34.083 319.620 686 320.306
Earnings after income tax 28.817 28.817 0.042 28.859
Other earnings -0.3481 -0.014 -0.362 -0.362 -0.362
Total comprehensive income -0.348 -0.014 -0.362 28.817 28.455 0.042 28.497
Dividend payment -24.704 -24.704 -24.704
Value on 31/03/2016 10.143 28.595 249.144 -0.902 -1.805 246.437 38.196 323.371 0.728 324.099

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 (22.–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 (27.–30.) 01/10 bis 31/03 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 + Q2 2015/2016 28.859 11.901 0.953 -0.257 -0.019 14.346 -21.411 -0.028 -0.093 40.374 -1.916 -10.394 -0.071 0.212 62.456 1.337 1.284 -39.419 -3.634 -1.249 0 -41.681 0 -24.704 199.600 -39.642 135.254 156.029 -0.145 13.068 168.952 Consolidated cash flow statement Q1 + Q2 2016/2017 24.979 8.700 2.033 -0.962 -0.253 16.801 -25.447 -0.651 -0.147 18.561 8.444 -10.447 -3.316 1.377 39.672 0.528 0.938 -17.220 -2.073 -0.251 -0.029 -18.107 0 -25.229 0 -483 -25.712 -4.147 0.211 159.821 155.885

_____ TABLE 12

_____ TABLE 13

Consolidated segment report
EUR million
Digital Engineering Physical Engineering Electrical Systems/
Electronics
Total of all divisions
01/10 to 31/03 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016
Revenues 301.555 286.916 109.973 107.434 108.331 99.878 519.859 494.228
Transfer between segments 11.065 3.041 6.352 4.445 5.216 1.950 22.633 9.436
Consolidated revenues 290.490 283.875 103.621 102.989 103.115 97.928 497.226 484.792
Operating profit 16.552 23.655 8.785 8.718 10.278 9.833 35.615 42.206
01/01 bis 31/03 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016 2016/2017 2015/2016
Revenues 151.337 143.640 54.385 55.210 55.254 48.601 260.976 247.451
Transfer between segments 3.783 1.706 3.276 3.154 2.528 0.968 9.587 5.828
Consolidated revenues 147.554 141.934 51.109 52.056 52.726 47.633 251.389 241.623
Operating profit 8.146 10.672 4.375 3.327 5.471 4.086 17.992 18.085
number
Shares Shares
Balance at 31/03/2017 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 unaudited half-year consolidated financial statements as at 31 March 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.

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
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 22 IFRIC Interpretation 22: Foreign Currency Transactions and Advance Considerations 01/01/2018 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
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 22 IFRIC Interpretation 22: Foreign Currency Transactions and Advance Considerations 01/01/2018 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

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.

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, 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, a joint venture of which Bertrandt has joint control, is also accounted for in the consolidated financial statements under the equity method.

With effect from 1 January 2017 Bertrandt Grundstücks GmbH, Nufringen acquired 94.8 percent of the shares in Appalusa Grundstücksverwaltungsgesellschaft mbH, Mainz for EUR 0.029 million. As at the date of purchase the company had EUR 20.725 million in property, plant and equipment, EUR 0.085 million in other assets, EUR 0.490 million in deferred tax assets, EUR 20.644 million in financial liabilities, EUR 0.06 million in provisions and EUR 0.566 million in deferred tax liabilities. Minority interests as at the date of purchase amounted to EUR 0.001 million and were measured according to the corresponding share in the equity of the purchased company. In the present half-year consolidated financial statements, Appalusa Grundstücksverwaltungsgesellschaft mbH accounts only for intragroup income in the amount of EUR 0.679 million and post-tax earnings of EUR 0.437 million.

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 164.840 million in the period under review (previous year EUR 198.039 million). As of the balance sheet date, receivables amounted to EUR 47.428 million (previous year EUR 52.944 million).

_____ TABLE 17
relative to one euro
Average rate on
balance sheet date
Average rate first half
31/03/2017 31/03/2016 2016/2017 2015/2016
China CNY 7.3693 7.3514 7.3474 7.0993
United Kingdom GBP 0.8576 0.7898 0.8631 0.7459
Romania RON 4.5515 4.4740 4.5116 4.4750
Turkey TRY 3.8893 3.2137 3.7375 3.2155
Hungary HUF 308.1500 314.0000 309.2890 312.2000
United States USD 1.0681 1.1378 1.0723 1.0993

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 230.713 million (previous year EUR 199.673 million) on account of the movement in interest rates in the reporting period up to 31 March 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 31 March 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 31 March 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.

RESPONSIBILITY STATEMENT IN LINE WITH ARTICLE 37Y AND ARTICLE 37W SECTION 2 NUMBER 3 GERMAN SECURITIES TRADING ACT __________________________________________

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Ehningen, 18 May 2017

The Management Board

Dietmar Bichler Hans-Gerd Claus

Chairman of the Management Board Member of the Management Board Engineering

Michael Lücke Markus Ruf

Member of the Management Board Sales Member of the Management Board Finance

12th Capital Market Day 31 May 2017

Report on the 3rd quarter 2016/2017 30 August 2017

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

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

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]

Konzeption,

Gestaltung und Produktion SAHARA Werbeagentur, Stuttgart www.sahara.de

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

Photos Andreas Körner, Stuttgart

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

Q2 15/16

241.623 0.149

241.772 4.091 -23.217 -175.609 -7.408 -21.544

18.085

Q3 15/16

243.119 0.159

CREDITS ROADSHOWS AND CONFERENCES

243.278 3.416 -23.970 -172.624 -7.702 -22.358

20.040

Profit from ordinary activities 17.743 17.054 30.503 19.455 17.655
Other taxes -0.638 -0.480 -0.401 -0.504 -0.344
Earnings before tax 17.105 16.574 30.102 18.951 17.311
Income taxes -3.726 -4.974 -8.336 -5.968 -4.986
Earnings after income tax 13.379 11.600 21.766 12.983 12.325
– attributable to minority interest 0 0 0 0.012 0.013
– attributable to shareholders of Bertrandt AG 13.379 11.600 21.766 12.971 12.312
Number of shares (million) –
diluted/basic, average weighting
10.091 10.091 10.091 10.091 10.083
Earnings per share (EUR) – diluted/basic 1.33 1.15 2.16 1.28 1.22

Q4 15/16

-0.430 17.655 -0.344 17.311 -0.585 19.455 -0.504 18.951 -0.116 30.503 -0.401 30.102 -0.569

264.110 0.258

264.368 1.330 -25.595 -181.622 -7.677 -20.185

30.619

Q1 16/17

245.837 0.173

246.010 2.489 -26.140 -170.921 -8.366 -25.449

17.623

QUARTERLY SURVEY

Consolidated income statement

_____ TABLE 18

Q2 16/17

251.389 0.229

251.618 2.339 -25.465 -179.714 -8.435 -22.351

17.992

-0.249

Dates

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.