Quarterly Report • Aug 21, 2012
Quarterly Report
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| H1 2012 | H1 2011 | % change | 2011 | |
|---|---|---|---|---|
| Summary income statement (EUR m)* | ||||
| Revenue | 248.6 | 249.7 | -0.4 % | 514.2 |
| EBITDA | 6.6 | 11.4 | -42.4 % | 24.7 |
| ROS (EBITDA/revenue) | 2.6 % | 4.6 % | -42.2 % | 4.8 % |
| EBIT | 1.8 | 6.5 | -72.5 % | 14.5 |
| Profit from ordinary activities (EBT) | -1.0 | 4.0 | -126.1 % | 8.6 |
| Loss/profit for the period from continuing operations | -1.9 | 2.5 | -176.1 % | 6.1 |
| Loss/profit for the period from discontinued operations | 37.3 | 3.6 | 936.7 % | 7.6 |
| Loss/profit for the period | 35.4 | 6.1 | 485.0 % | 13.7 |
| Operating profit before working capital changes | 3.8 | 12.7 | -70.5 % | 31.1 |
| whereof discontinued operations | 2.3 | 4.3 | -45.7 % | 9.5 |
| Summary statement of financial position (EUR m) | ||||
| Non-current assets (IFRS) | 116.6 | 136.4 | -14.5 % | 142.8 |
| Current assets (IFRS) | 242.2 | 235.7 | 2.8% | 221.8 |
| Total assets | 358.8 | 372.1 | -3.6 % | 364.6 |
| Borrowings | 227.1 | 278.6 | -18.5 % | 265.8 |
| Equity | 131.7 | 93.5 | 40.9 % | 98.9 |
| Equity ratio in % | 36.7 % | 25.1 % | 11.6 % | 27.1 % |
| Investment (additions to non-current assets) | 11.2 | 7.5 | 50.1 % | 21.6 |
| as % of revenue 2) | 2.9 % | 2.5 % | 0.4 % | 2.7 % |
| Average head count | 2,399 | 2,710 | -11.5 % | 2,689 |
| Per employee ratios (EUR '000) | ||||
| Revenue 2) | 103.6 | 104.3 | -0.6 % | 217.1 |
| EBIT 2) | 0.7 | 2.7 | -72.6 % | 6.1 |
| Operating profit before working capital changes | 1.6 | 4.7 | -66.7 % | 11.6 |
| Number of shares issued | 9,434,990 | 9,434,990 | - | 9,434,990 |
| Own shares | -272,456 | -282,456 | 3.5 % | -272,456 |
| Shares in circulation | 9,162,534 | 9,152,534 | 0.1 % | 9,162,534 |
| Per share ratios (EUR) | ||||
| EBITDA | 0.7 | 1.2 | -42.4 % | 2.7 |
| EBITDA | 0.7 | 1.2 | -42.4 % | 2.7 |
|---|---|---|---|---|
| EBIT | 0.2 | 0.7 | -72.5 % | 1.6 |
| Loss/profit for the period from continuing operations | -0.2 | 0.3 | -176.0 % | 0.7 |
| Profit for the period from discontinued operations | 4.1 | 0.4 | 935.6 % | 0.8 |
| Profit for the period | 3.9 | 0.7 | 484.3 % | 1.5 |
| Operating profit before working capital changes | 0.4 | 1.4 | -70.5 % | 3.4 |
| Equity | 14.4 | 10.2 | 40.7 % | 10.8 |
| Share price | ||||
| Year end | 8.52 | 11.25 | -24.3 % | 9.40 |
| High | 11.00 | 13.35 | -17.6 % | 13.52 |
| Low | 8.20 | 9.49 | -13.6 % | 8.10 |
| Dividend and bonus 1) | 0.3 |
1) Distribution proposed to Annual General Meeting 2) Continuing operations
* The disposal of the Industrial Honeycombs Division was completed on 1 June 2012. The gains on disposal and the profit up to the time of the disposal are included in the profit from discontinued operations in accordance with IFRS 5. The previous year's figures have been adjusted accordingly.
| Operating review for the first half of 2012 |
3 |
|---|---|
| DECLARATION BY THE EXECUTIVE BOARD PURSUANT TO SECTION 87(1) AUSTRIAN STOCK EXCHANGE ACT | 15 |
| SHORTENED FINANCIAL STATEMENTS | 16 |
The main features of the first half of 2012 for the Frauenthal Group were:
The effects of the disposal of the Industrial Honeycombs Division are presented under the "Profit for the period from discontinued operations" item. Discussion of the Group's operational performance relates to the continuing operations, namely, the Frauenthal Automotive and Wholesale Plumbing Supplies divisions.
n Net debt has shrunk to EUR 62.6m.
n Group revenue was down by only EUR 1.1m (0.4%), to EUR 248.6m.
n A social plan for the closure of the shaped parts and welded components manufacturing operation in Ahlen, Germany (Frauenthal Automotive Westphalia GmbH, formerly Linnemann-Schnetzer Formparts GmbH) has been agreed with the works council and the unions. Some of the 70 affected employees will be taken on by the steel air reservoir production plant in Ahlen. Provisions of EUR 1.8m have been recognised for the closure costs. Production will cease at year end. Frauenthal Automotive Ahlen GmbH (air reservoirs), which is located at the same site, is unaffected by the decision.
n The strong revenue performance of the Wholesale Plumbing Supplies Division kept the decline in Group revenue down to just 0.4%.The Frauenthal Automotive and Wholesale Plumbing Supplies divisions invested EUR 7.8m in the first half. Liquidity needs rose by EUR 26.5m as compared to year-end 2011, lifted by the normal seasonal pattern in SHT's business and the cessation of use of an ABS finance facility by the Frauenthal Automotive Division – a move that made it possible to put some of the Group's liquidity to work and reduce the size of the balance sheet. As at the end of the reporting period the Frauenthal Group held EUR 61.7m in cash and cash equivalents, of which EUR 35m consisted of long-term investments in money market instruments issued by leading Austrian banks. The Group also has access to adequate bank credit lines.
Group EBIT was down by EUR 4.7m or 72.5% to EUR 1.8m, impacted by lower revenue, cost increases and restructuring charges in the Frauenthal Automotive Division, which made a negative EBIT of EUR 1.0m. The Wholesale Plumbing Supplies Division posted EBIT growth of EUR 0.2m to EUR 1.8m on the back of revenue growth, as well as a slight improvement in margins despite a volume driven increase in operating costs. Group net finance costs increased by EUR 0.3m, due to the cost of the EUR 100m bond issue (settlement date 20 May 2011). The issuing expenses comprise the transaction costs and negative interest arbitrage. The latter stems from the fact that the returns on investing the surplus liquidity up to the maturity of the bond that fell due in June 2012 were lower than the coupon on the bond issued in May 2011.
Highlights of divisional trading performance
The automotive component market is currently experiencing a high degree of volatility. Commercial vehicle manufacturers responded to the uncertain economic environment in the fourth quarter of 2011 and the first quarter of 2012, and the threat of a second massive financial crisis, by reining back production. Some even temporarily shut down plants as memories of the situation in 2008/09 resurfaced. Fears of a slump in demand were not borne out, and the market stabilised in the first half of 2012. However, regional market trends diverged widely across the EU: while the French and German markets held up well, demand for all types of commercial vehicles unravelled in Spain and Italy. In the heavy truck segment – a key market for the division – the United Kingdom stood out, with a 12.7% jump in demand. By contrast the German market, the EU's largest, contracted by 3.0%. The massive reverses in this segment in Italy and Spain, where demand plunged by 28.9% and 21.4%, respectively, are a clear reflection of these countries' economic woes. The 7.7% fall in divisional revenue correlates with the 6.1% drop in registrations of heavy trucks in the EU. Overall, the EU truck market shrank by 10.8%. Growing exports to non-EU countries – particularly Russia – are a stabilising factor. Shifts in market shares between manufacturers are driven by differing model policies and regional exposures. As the division serves all the OEMs, changes in individual customers' relative performance do not have a significant impact on overall sales. Continued moderate fluctuations in demand can be countered by relatively painless adjustments to capacity such as laying off agency staff. In contrast to the 2009 crisis there are no signs of an overhang of unsold new or used vehicles at our customers, so we do not expect demand to disintegrate in the second half even in the event of adverse economic conditions. Divisional capacity is currently geared towards considerably higher demand than that projected for 2012 as a whole. Efforts to increase our share of the market for components for the new Euro 6 compliant truck models by developing improved products have begun to pay off. New business includes orders for technically advanced front axle springs. A large part of Frauenthal Automotive's volume is now locked in by new long-term supply contracts and extensions to existing ones. The division's long-term prospects are also underpinned by the award of a number of development contracts from customers.
In the third quarter of 2012 all of the remaining operations at Frauenthal Automotive Ravne d.o.o. (formerly
Styria Vzmeti d.o.o.) will be halted. The complete closure of the plant will affect 14 employees. Investments at a number of locations maintained the impetus of the division's growth strategy. During the first half of the year some EUR 4.3m was spent on improving product quality and expanding capacity.
Given the current unstable market situation, the division's overall performance was positive, despite the unsatisfactory earnings situation. EBIT declined by EUR 5.0m to EUR 1.0m. Alongside a decline in revenue of EUR 10.0m or 7.7%, the main reasons for the downturn in earnings were an unfavourable product mix, price reductions, increased material costs which could not be passed on in full to customers, delays in the commissioning of efficiency enhancing plant and equipment, and higher energy and transport costs. Earnings were also depressed by restructuring costs of EUR 0.8 arising from the decision to discontinue formed parts and welded component manufacturing in Ahlen. There were no significant restructuring costs in the first half of 2011. A cost reduction programme under way at all sites will kick in this year, and should drive an improved earnings trend.
Construction activity in Austria in 2012 was buoyed by the commercial new build and renovation segments. In constant decline since 2008, the commercial market is expected to grow by about 1.5% in 2012. While the growth of the private renovation segment is slowing sharply, output is still expected to expand this year. Divisional revenue growth is slightly outperforming the market. Gains in market shares are chiefly being driven by SHT's increased presence in the west of Austria (Innsbruck outlet). SHT successfully defended its high market shares in the east of the country. The division's rapid growth is also being fuelled by the integration of Slovak wholesale plumbing supplier Technopoint Sanitrends, s.r.o., Bratislava. The acquisition marks SHT's first step in the direction of international expansion. Increased procurement power, integration with the SHT logistics network and a wider product range should give this business good prospects of profitable growth, and its performance during the initial period after the acquisition has borne out this expectation. Another Bäderparadies bathroom showroom was opened in Ansfelden, Upper Austria in June. SHT's outstanding logistics earned it a VNL (Association for Network Logistics) award in the "Biggest financial performance improvement delivered by a logistics tool" category. The award – a coveted honour in the logistics industry – was for the introduction of a Y-LOG automated small parts order picking system. Work on the extension to the logistics centre in Perchtoldsdorf is continuing apace. This additional capacity in the east of Austria is needed to safeguard supplies to the Slovak market.
The Frauenthal Group sets out to grow shareholder value by establishing, developing and optimising business divisions that are already market leaders or are capable of achieving market leadership. The sale of one of the Group's three divisions enabled us to realise part of the shareholder value that has been created. This opened the way for a management decision, taken in consultation with the Supervisory Board, to go ahead with our strategy of growth by acquisition. The main focus will be on growing the existing Frauenthal Automotive and Wholesale Plumbing Supplies (SHT) divisions. In the Frauenthal Automotive Division we will be looking to broaden the product range. The main areas offering potential synergies are sales, technology, procurement and administration. In the Wholesale Plumbing Supplies Division expansion into neighbouring countries is the prime objective. The first step in this direction was the acquisition of a Slovak plumbing supplies wholesaler.
Our strategic goals also include buying into a new line of business (third division), but the feasibility of such a step is far harder to gauge than that of bolt-on acquisitions.
In order to execute this strategy Frauenthal Holding is devoting additional resources to business development. At the time of writing, a number of potential acquisition targets were being examined, but no binding agreements or definite decisions had yet been reached.
The Group's liquidity position and the situation on financial markets make investments in profitable industrial activities the cardinal medium-term objective. Since acquisitions are very risky, and the Group must husband its limited financial resources and management capacity carefully, we must not allow time pressures to push us into precipitate decisions. All our takeover targets are looked at very closely to determine whether they are a good strategic fit, and subjected to the requisite due diligence investigations. Because of this it is impossible to predict when a major acquisition will take place.
The sale of the Industrial Honeycombs Division led to a cash inflow of EUR 80.7m, made up of the EUR 51.3m purchase price and the repayment of EUR 29.4m owed by the divested division to Frauenthal Holding AG. In all, the disposal of the division reduced the Group's borrowings by EUR 83m, as the acquirer also assumed responsibility for EUR 6.5m in local liabilities. This amount is net of local holdings of cash and cash equivalents, and of the transaction costs. The continuing operations delivered a firsthalf operating profit before working capital changes of EUR 3.7m. Operational liquidity needs during the period totalled EUR 26.5m, of which EUR 22.6m related to the increase in working capital and EUR 7.8m to investment by the continuing operations. The increase in working capital was largely due to seasonal factors. In the Frauenthal Automotive Division, the winding down of most of the ABS finance resulted in higher trade receivables.
At EUR 88m the Group's unused credit lines are adequate to cope with faster-than-expected growth or fund acquisitions.
Due to the large holdings of cash and cash equivalents, at EUR 61.7m, despite the repayment of almost all of the Group's short-term borrowings and part of its long-term bank borrowings, investment decisions must be taken. Owing to the current market situation the early redemption of the EUR 100m bond maturing in 2016 is not possible, at least on acceptable terms. After carefully weighing the potential returns and the risks involved, management has opted for investments in money market instruments issued by several leading Austrian banks.
In light of the latest production forecasts from customers, the Frauenthal Automotive Division expects demand a light decrease compared to the current levels. When a number of new orders secured during the reporting period are factored in, this implies that full-year revenue is likely to be 10–15% down on 2011. As always, this forecast is subject to considerable uncertainties because the commercial vehicle market is extremely sensitive to shifts in economic conditions. A sharp downturn in demand in the fourth quarter cannot be excluded if business in the autumn is hit by economic problems triggered by the euro crisis. At the time of writing there were no firm indications that this will be the case. High priorities for the second half of the year will be the roll-out of cost reduction programmes and the finalisation of investment plans currently under review.
We expect the Wholesale Plumbing Supplies Division (SHT) to record moderate full-year revenue growth whilst slightly raising its market shares and improving its profitability. Despite the pick-up in contract business we see the price wars in this market segment persisting. We are working to extend the division's lead in terms of service quality.
The key strategic decision to focus on the Frauenthal Automotive and Wholesale Plumbing Supplies divisions to some extent marks a retreat from our "strength through diversity" philosophy. However, given the economic situation and the competitive factors affecting the former Industrial Honeycombs Division, as well as the outcome of our search for a buyer, we are convinced that our decision to sell will serve to maximise shareholder value, open up attractive new prospects for the business and its workforce, and generate growth opportunities for the Group's remaining operations.
Due to the seasonal variations that affect our business it is not possible to extrapolate full-year performance from the latest interim results.
Both the remaining divisions have opportunities to grow organically, by gaining market shares, and entering new product and geographical markets, as well as by acquisition. They will now be able to pursue their growth strategies still more energetically, as the Group's liquidity and earnings situation has been significantly improved. Our staff and management development programmes play a pivotal role in our overall business development policies, and are making a major contribution to the Group's success. We will therefore be intensifying our efforts in this area.
After a highly eventful start to 2012 the Frauenthal Group is now ideally placed to exploit the opportunities open to it.
Vienna, August 2012 The Executive Board Frauenthal Holding AG
The interim report of Frauenthal Holding AG (Frauenthal Group) for the half year ended 30 June 2012 was drawn up in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. This report has neither been audited nor has it been reviewed by an independent auditor.
The scope of consolidation was determined in accordance with paragraph 12 IAS 27. The number of companies included in consolidation has declined by two since 31 December 2011. The Industrial Honeycombs Division was sold to Japanese technology group IBIDEN on 1 June 2012. The division encompassed Porzellanfabrik Frauenthal GmbH, Vienna, CERAM Frauenthal Korea Co., Ltd., Seoul, and CERAM Environmental Inc. Leawood, Kansas – all wholly owned subsidiaries. At the start of April 2012 SHT Slovakia s.r.o., Bratislava, acquired a 95% interest in Technopoint Sanitrends, s.r.o., Bratislava, and SHT Haustechnik AG, Perchtoldsdorf purchased the remaining 5% of the acquiree. The consolidated statements thus comprise the results of the parent, Frauenthal Holding AG, and 24 subsidiaries which are under the common control of Frauenthal Holding AG, and in which the latter or one of its subsidiaries holds a majority of the voting rights.
The accounting policies used to prepare the financial statements for the year ended 31 December 2011 were applied without change to the interim report for the first half of 2012. The main differences between these policies and the provisions of the UGB (Austrian Business Code) lie in the use of the percentage of completion (PoC) method to value long-term construction contracts, in the treatment of deferred tax and goodwill amortisation, and in the calculation of employee benefit obligations.
The consolidated income statement is presented using the nature of expense method. Due to the disposal of the Industrial Honeycombs Division, profit for the period is broken down into continuing operations (the Frauenthal Automotive and Wholesale Plumbing Supplies divisions) and discontinued operations (the Industrial Honeycombs Division). Management's analysis below relates to the continuing operations. The results for the comparative periods – H1 2011 and full year 2011 – are likewise divided into continuing and discontinued operations.
The Frauenthal Group returned cumulative consolidated IFRS revenue of EUR 248.6m for the first half – down by EUR 1.1m or 0.4% year on year. The Frauenthal Automotive Division fell short of its excellent performance in the comparative period, but revenue in the Wholesale Plumbing Supplies Division grew by 6.8%.
The commercial vehicle manufacturers began scaling back their production plans at the start of the year because of the uncertain economic climate, and some plants were temporarily shut down. This resulted in a EUR 9.6m or 7.7% year-on-year decline in revenue in the Automotive Components Division to EUR 114.1m (H1 2011: 123.6m).
Despite a subdued trading environment the Wholesale Plumbing Supplies Division posted revenue growth of EUR 8.6m or 6.8%, driven by increased market shares owing to its stronger presence in western Austria, the Slovak acquisition, efficient logistics, good service and the addition of innovative new products to the range. Newly acquired Technopoint Sanitrends, s.r.o., Bratislava accounted for EUR 2.3m of the revenue total. First-half divisional revenue was up from EUR 126.0m to EUR 134.6m.
Group EBITDA for the first half of 2012 was EUR 6.6m – down EUR 4.8m or 42.4% year on year. The fall was exclusively due to lower revenue in the Frauenthal Automotive Division.
Due to the decline in revenue the division's EBITDA contribution decreased by EUR 5.1m or 56.5% to EUR 4.0m. A restructuring provision for the impending closure of the shaped parts and welded components manufacturing operations at the Ahlen site weighed on first-half earnings. Higher revenue in the Wholesale Plumbing Supplies
Division translated into improved earnings, and divisional EBITDA was up by EUR 3.4m or 5.3% on the like period of 2011.
Group EBIT fell by EUR 4.7m or 72.5% year on year – compared to an outstanding performance in the first half of 2011 – to EUR 1.8m (H1 2011: 6.5m). The Frauenthal Automotive Division returned EBIT of EUR 1.0m. Besides lower revenue, earnings were depressed by an unfavourable product mix, price reductions and higher material prices. The Wholesale Plumbing Supplies Division delivered an earnings contribution of EUR 1.8m.
There was a loss for the period from continuing operations (the Frauenthal Automotive and Wholesale Plumbing Supplies divisions, and Frauenthal Holding AG) of EUR 1.9m. This represented a deterioration of EUR 4.4m. The profit for the period from discontinued operations of EUR 37.3m is made up of the EUR 1.3m profit recorded by the Industrial Honeycombs Division for the January–May 2012 period and a EUR 36m deconsolidation effect. The latter is net of the EUR 10m income tax burden incurred as a result of the divestment of the Industrial Honeycombs Division. The tax burden is composed of EUR 7.5m in deferred tax (utilisation of tax loss carryforwards in the Austrian tax group) and EUR 2.5m in income tax expense.
The total Group profit for the period (net profit) was EUR 35.4m (a profit for the period from discontinued operations of EUR 37.3m less a loss for the period from continuing operations of EUR 1.9m) – a gain of EUR 29.3m year on year.
The basic and diluted loss per share from continuing operations, with a weighted average of 9,162,534 shares in circulation (H1 2011: 9,152,534), was EUR 0.20 (H1 2011: earnings per share EUR 0.27). On the basis of the profit attributable to owners of the parent and a weighted average of 9,162,534 shares in circulation (H1 2011: 9,152,534), basic and diluted earnings per share from continuing and discontinued operations were EUR 3.87 (H1 2011: EUR 0.66).
The average number of diluted shares outstanding in the first half was 9,162,919 (H1 2011: 9,152,534); the change was too small to affect diluted earnings per share. As revenue and earnings in both divisions are subject to seasonal fluctuations, extrapolations from first-half results do not yield reliable forecasts for the year as a whole.
The income statement of the discontinued Industrial Honeycombs Division is as follows:
The Industrial Honeycombs Division, which belonged to the Frauenthal Group until 31 May 2012, registered a EUR 5.9m or 15.5% fall in revenue over the January-May 2012 period. Capacity was fully utilised, but the downward pressure on diesel catalyst prices depressed earnings. Meanwhile a shift in the product mix towards diesel catalysts led to a loss of capacity, since plant had to be switched from power station to diesel catalyst production. Productivity was lower as the equipment concerned was not ideal for this purpose.
| EUR '000 | 5M 2012 | H1 2011 | |
|---|---|---|---|
| Income statement from discontinued operations | |||
| Sales revenue | 31,948 | 37,801 | |
| Total revenue | 37,016 | 37,930 | |
| Raw material and others | -19,203 | -19,623 | |
| Staff costs | -9,106 | -9,446 | |
| Other operating expenses | -4,837 | -3,576 | |
| EBITDA from discontinued operations | 3,870 | 5,285 | |
| Depreciation and amortisation expense, and impairment | -1,513 | -1,609 | |
| Profit from discontinued operations (EBIT) | 2,357 | 3,676 | |
| Net finance costs from discontinued operations | -416 | -79 | |
| Disposal result | 46,029 | 0 | |
| Profit before tax from discontinued operations | 47,970 | 3,597 | |
| Income tax expense from operating result | -740 | 0 | |
| Income tax expense from disposal result | -2,500 | 0 | |
| Change in deferred tax from operating result | 59 | 0 | |
| Change in deferred tax from disposal result | -7,500 | 0 | |
| Profit for the period from discontinued operations | 37,289 | 3,597 |
| EUR '000 | 30 June 2012 | 31 Dec. 2011 | |
|---|---|---|---|
| Balance sheet from discontinued operations | |||
| Non-current assets | 23,149 | 15,774 | |
| Current assets | 43,432 | 25,985 | |
| Inventories | 22,660 | 10,325 | |
| Trade receivables | 16,460 | 3,320 | |
| Other assets | 2,408 | 606 | |
| Cash and cash equivalent | 1,903 | 1,733 | |
| Total ASSETS | 66,581 | 41,759 | |
| Equity | 9,161 | 11,647 | |
| Provisions | 4,737 | 4,582 | |
| Liabilities | 52,683 | 25,530 | |
| Bank borrowings | 6,984 | 8,119 | |
| Trade payables | 7,262 | 5,129 | |
| Finance lease liabilities | 3,654 | 1,070 | |
| Liabilities to Group companies | 29,542 | 8,496 | |
| Other liabilities | 5,241 | 2,716 | |
| Total EQUITY AND LIABILITIES | 66,581 | 41,759 |
The Frauenthal Group's total assets contracted by EUR 5.8m or 1.6% as compared to the position at year-end 2011, to stand at EUR 358.8m (31 December 2011: EUR 364.6m). Significant changes in the balance sheet arose from the redemption of the outstanding EUR 30.3m including interest due on the bond issued in 2005 (EUR 43m were repaid early in 2011), as well as the disposal of the Industrial Honeycombs Division, and the increase in cash and cash equivalents.
Non-current assets were EUR 116.6m as at 30 June 2012 – a reduction of EUR 26.3m compared to year-end 2011. The change is largely accounted for by the disposal of property, plant and equipment worth EUR 20.7m in the Industrial Honeycombs Division. The sale of the division also resulted in the disposal of the 50% interest in Ceram Liegenschaftsverwaltung GmbH, worth EUR 739m (carried under investments in associates). The change of EUR 7.0m in deferred tax assets resulted from the utilisation of the tax loss carryforwards in the Austrian tax group due to the divestment of the Industrial Honeycombs Division. As at 30 June 2012 current assets were EUR 242.2m – EUR 20.4m up on year-end 2011.
The change reflects the following factors:
scaled back. ABS finance decreased from EUR 15.5m as at year-end 2011 to EUR 6.7m as at 30 June 2012, and the facility expired at the start of August 2012. Trade receivables in the Wholesale Plumbing Supplies Division rose by EUR 8.3m due to seasonal factors.
Equity jumped by EUR 32.9m to EUR 131.7m (31 December 2011: EUR 98.9m) as a result of the lift to the profit for the period given by the disposal of the Industrial Honeycombs Division. The equity ratio climbs from 27.1% as at end-2011 to 36.7% as at 30 June 2012.
Non-current liabilities were down by EUR 8.5m on yearend 2011, at EUR 129.0m. The change is largely explained by the disposal of EUR 10.0m in long-term liabilities held by the Industrial Honeycombs Division.
Current liabilities fell by EUR 30.2m as compared to yearend 2011. This largely reflected the redemption of the remaining EUR 30.3m due on the old bond, including the interest. A further reduction of EUR 17.6m came from the disposal of the current liabilities of the divested division. In the Frauenthal Automotive and Wholesale Plumbing Supplies divisions, short-term bank borrowings rose as compared to year-end 2011 (EUR 17.7m).
Operating profit before working capital changes was EUR 9.0m lower year on year at EUR 3.8m, due to the deterioration in first-half results from the Frauenthal Automotive Division. Profit for the period before non-controlling interests includes the proceeds of the sale of the Industrial Honeycombs Division. "Gains on deconsolidation of subsidiaries" are deducted in order to strip the effects of the disposal of the Industrial Honeycombs Division out of the presentation of operating profit before working capital changes. The discontinued operations were responsible for EUR 2.3m of the operating profit before working capital changes (H1 2011: EUR 4.3m).
The changes in working capital resulted in net cash used in operating activities of EUR 18.8m (H1 2011: EUR 19.1m). The discontinued operations contributed negative cash flows from operating activities of EUR 2.8m (H1 2011: EUR 0.5m).
Net cash from/used in investing activities was positive by EUR 62.6m (H1 2011: EUR -7.3m). The improvement was due to the "Net cash inflow due to changes in the scope of consolidation" of EUR 73.7m, comprising EUR 74.4m from the sale of the Industrial Honeycombs Division less a cash outflow of EUR 0.7m due to the acquisition of Technopoint Sanitrends, s.r.o., Bratislava. The breakdown of the net cash inflow due to the disposal was as follows: purchase price EUR 51.3m; financial liabilities assumed by the acquirer EUR 29.4m; cash holdings disposed of together with the Industrial Honeycombs Division EUR -1.9m; transaction costs EUR -2.4m; reduction in current taxes EUR -2.5m; disposal of a pledged passbook EUR 0.4m; other outstanding liabilities assumed EUR 0.1m.
Investment in non-current assets includes EUR 4.0m in spending by the Industrial Honeycombs Division during the January-May 2012 period. The Frauenthal Automotive Division invested EUR 4.4m in improving quality and expanding capacity, and the Wholesale Plumbing Supplies Division EUR 2.6m in enhancing its logistics capabilities and end-user services.
Net cash used in financing activities reflects the EUR 2.7m in dividends paid and the EUR 27.3m paid to redeem the old bond.
In the first half of 2012 the Frauenthal Group employed an average of 2,399 people (H1 2011: 2,394 excluding, and 2,710 including staff with the Industrial Honeycombs Division). The divestment of the Industrial Honeycombs Division reduced the head count by 321. The largest employer in the Group was the Frauenthal Automotive Division, at 1,607 (H1 2011: 1,687). The head count in this division fell by 80 year on year. During the first six months of the year the Wholesale Plumbing Supplies Division had an average of 778 people on the payroll (H1 2011: 694) – an increase of 84.
SFrauenthal has been listed on the Vienna Stock Exchange prime market since 23 July 2007. After emerging from 2011 at EUR 9.40, Frauenthal's share price drifted down to reach its low for the first quarter on 17 January. A rapid run-up from mid-April onwards propelled the price to a high of EUR 11 on 2 May 2012, after which it lost ground to end the reporting period on EUR 8.52. The price at the close of trading at end-HI 2012 also marked the low for the first half. Market capitalisation as at 29 June 2012 was EUR 80.3m (30 December 2011: EUR 88.7m); this included 1,900,000 unlisted registered shares.
For more information on our share price performance and ownership structure, visit our website: www.frauenthal.at
The disposal of the Industrial Honeycombs Division and the increased importance of the activities of the Business Development Department made it necessary to reassign the responsibilities of the Executive Board members with effect from 1 July 2012. Hans-Peter Moser took charge of the expanded Business Development Department and continues to head up the Wholesale Plumbing Supplies Department. In addition to his role as Group CFO Martin Sailer is responsible for the Frauenthal Automotive Division.
Martin Sailer's employment contract, which was due to run until June 2013, was prematurely extended until June 2016.
The Executive Board hereby declares that to the best of its knowledge the 2012 half-yearly financial report of the Frauenthal Group, prepared in accordance with International Financial Reporting Standards (IFRS), to the maximum extent possible gives a true and fair view of the assets, finances and earnings of the companies included in consolidation. The operating review likewise as far as possible gives a true and fair view of the assets, finances and earnings of the Frauenthal Group, and provides information on the course of business, and the potential impact of existing and future risks on the Group's business activities.
Vienna, August 2012
The Executive Board
Mag. Hans-Peter Moser Member of the Executive Board
Dr. Martin Sailer Member of the Executive Board
| EUR '000 | H1 2012 | H1 2011 * | |
|---|---|---|---|
| Revenue | 248,648 | 249,654 | |
| Changes in inventories of finished goods and work in progress | 1,350 | 3,314 | |
| ork performed by the entity and capitalised | 0 | 63 | |
| Other operating income | 3,916 | 3,912 | |
| Raw material and consumables used | -171,751 | -173,283 | |
| Staff costs | -51,509 | -49,638 | |
| Depreciation and amortisation expense, and impairment | -4,803 | -4,950 | |
| Other operating expenses | -24,070 | -22,592 | |
| Profit from operations | 1,781 | 6,480 | |
| Interest income | ,568 | ,249 | |
| Interest expense | -3,384 | -2,770 | |
| Net finance costs | -2,816 | -2,521 | |
| Loss/profit before tax | -1,035 | 3,959 | |
| Income tax expense | -466 | -623 | |
| Change in deferred tax | -370 | -878 | |
| Loss/profit for the period from continuing operations | -1,871 | 2,458 | |
| Profit before tax from discontinued operations | 47,970 | 3,597 | |
| Income tax expense | -3,240 | ||
| Change in deferred tax | -7,441 | ||
| Profit for the period from discontinued operations | 37,289 | 3,597 | |
| Profit for the period | 35,418 | 6,055 | |
| Loss/profit attributable to non-controlling interests | -131 | 349 | |
| Profit attributable to owners of the parent (consolidated profit for the period) | 35,549 | 5,706 | |
| Loss per share from continuing operations | |||
| basic | -0.20 | 0.27 | |
| diluted | -0.20 | 0.27 | |
| Earnings per share from continuing and discontinued operations | |||
| basic | 3.87 | 0.66 | |
| diluted | 3.87 | 0.66 |
* The disposal of the Industrial Honeycombs Division was completed on 1 June 2012. The gains on disposal and the profit up to the time of the disposal are included in the profit from discontinued operations in accordance with IFRS 5. The previous year's figures have been adjusted accordingly.
| EUR '000 | H1 2012 | H1 2011 * | |
|---|---|---|---|
| Cons olidated state ment of comprehensi ve inc ome |
| Loss/profit for the period from continuing operations | -1,871 | 2,458 |
|---|---|---|
| Gains/losses on currency translation | 189 | -12 |
| Gains on changes in non-controlling interests | 0 | 770 |
| Other comprehensive income from continuing operations | 189 | 758 |
| Total comprehensive income from continuing operations | -1,682 | 3,216 |
| Profit for the period from discontinued operations | 37,289 | 3,597 |
| Gains/losses on currency translation discontinued operations | 0 | -60 |
| Total comprehensive income from discontinued operations | 37,289 | 3,537 |
| Total comprehensive income | 35,607 | 6,753 |
| Total comprehensive income attributable to non-controlling interests | -151 | 1,121 |
| Total comprehensive income attributable to owners of the parent | 35,758 | 5,632 |
* The disposal of the Industrial Honeycombs Division was completed on 1 June 2012. The gains on disposal and the profit up to the time of the disposal are included in the profit from discontinued operations in accordance with IFRS 5. The previous year's figures have been adjusted accordingly.
| EUR '000 30 June 2012 |
31 Dec. 2011 | |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 38,235 | 38,501 |
| Property, plant and equipment | 64,053 | 82,301 |
| Investments in associates | 0 | 739 |
| Other financial assets | 977 | 977 |
| Deferred tax assets | 13,319 | 20,319 |
| 116,584 | 142,837 | |
| Current assets | ||
| Inventories | 84,245 | 94,154 |
| Trade receivables | 74,916 | 73,210 |
| Other assets | 21,346 | 14,118 |
| Cash and cash equivalents | 61,697 | 40,329 |
| 242,204 | 221,811 | |
| Total ASSET | 358,788 | 364,648 |
| EUR '000 30 June 2012 |
31 Dec. 2011 | |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share capital | 9,435 | 9,435 |
| Capital reserves | 21,093 | 21,093 |
| Retained earnings | 64,768 | 53,935 |
| Translation reserves | -2,476 | -2,601 |
| Other reserves | 29 | 29 |
| Own shares | -532 | -532 |
| Non-controlling interests | 3,872 | 4,023 |
| Profit/loss for the period | 35,549 | 13,486 |
| 131,738 | 98,868 | |
| Non-current liabilities | ||
| Bond | 99,311 | 99,229 |
| Bank borrowings | 7,061 | 11,989 |
| Other liabilities | 809 | 1,253 |
| Provisions for termination benefits | 8,532 | 10,175 |
| Provisions for pensions | 6,719 | 6,654 |
| Deferred tax | 3,083 | 3,098 |
| Other long-term provisions | 3,500 | 5,148 |
| 129,015 | 137,546 | |
| Current liabilities | ||
| Bond | 561 | 30,839 |
| Bank borrowings | 17,406 | 10,684 |
| Trade payables | 50,725 | 60,170 |
| Liabilities to Group companies | 0 | 418 |
| Other liabilities | 23,702 | 23,712 |
| Tax provisions | 3,205 | 665 |
| Other short-term provisions | 2,436 | 1,746 |
| 98,035 | 128,234 | |
| Total EQUITY AND LIABILITIES | 358,788 | 364,648 |
| EUR '000 | H1 2012 | H2 2011 | |
|---|---|---|---|
| Profit for the period before non-controlling interests | 35,418 | 6,055 | |
| Gains on deconsolidation of subsidiaries | -36,029 | 0 | |
| Interest income and expense | 3,231 | 2,600 | |
| Depreciation and amortisation of non-current assets | ,6,317 | 6,558 | |
| Gains on disposal of non-current assets | -149 | -5 | |
| Losses on disposal of non-current assets | 0 | 6 | |
| Change in deferred tax assets | -505 | 553 | |
| Change in long-term provisions | 707 | 412 | |
| Interest paid | -6,396 | -3,604 | |
| Interest received | 1,068 | 170 | |
| Other non-cash expenses | 96 | 0 | |
| Operating profit before working capital changes | 3,758 | 12,745 | |
| whereof discontinued operations | 2,311 | 4,253 | |
| Change in inventories | -10,594 | -17,090 | |
| Change in trade receivables | -17,329 | -18,886 | |
| Change in other receivables | -2,612 | -370 | |
| Change in short-term provisions | 4,017 | -643 | |
| Change in trade payables | 112 | 4,294 | |
| Change in liabilities to Group companies | 0, -418 | 66 | |
| Change in other liabilities | 4,192 | 824 | |
| Translation related changes | 82 | -76 | |
| Net cash used in operating activitiest | -18,792 | -19,136 | |
| whereof discontinued operations | -2,829 | -525 | |
| Investments in non-current assets | -11,223 | -7,476 | |
| Proceeds from sale of non-current assets | ,587 | 45 | |
| Proceeds from investment grants | -434 | 106 | |
| Net cash inflow due to changes in the scope of consolidation | 73,678 | 0 | |
| Net cash from/used in investing activities | 62,608 | -7,325 | |
| whereof discontinued operations | 70,470 | -1,266 | |
| Dividends paid | -2,749 | -2,746 | |
| 2011 Bond issue | 0 | 100,000 | |
| Redemption of the 2005 bond | -27,295 | -38,426 | |
| Change in non-controlling interests | 0 | 770 | |
| Change in borrowings | 7,975 | 11,191 | |
| Net cash used in/from financing activities | -22,069 | 70,969 | |
| whereof discontinued operations | 6,885 | 2,017 | |
| Change in cash and cash equivalents | 21,747 | 44,508 | |
| Cash and cash equivalents at beginning of period | 39,950 | 3,037 | |
| Equity | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR '000 | Share capital | Capital reserve |
Retained earnings |
Translation reserve |
Fair value reserve |
Own shares | to owners of attributable the parent |
Non-control ling interests |
Total equity | ||
| At 1 Jan. 2011 | 9,435 | 21,093 | 58,115 | -1,901 | 37 | -552 | 86,227 | 3,275 | 89,502 | ||
| Dividends | -2,746 | -2,746 | -2,746 | ||||||||
| Acquisition of non-controlling interests | -1,845 | -1,845 | 770 | -1,075 | |||||||
| Disposal of own shares | 20 | 20 | 20 | ||||||||
| Share options | 152 | 152 | 152 | ||||||||
| Total comprehensive income for 2011 | 13,745 | -700 | -8 | 13,037 | -22 | 13,015 | |||||
| At 31 Dec. 2011/1 Jan. 2012 | 9,435 | 21,093 | 67,421 | -2,601 | 29 | -532 | 94,845 | 4,023 | 98,868 | ||
| Dividends | -2,749 | -2,749 | -2,749 | ||||||||
| Share options | 96 | 96 | 96 | ||||||||
| Recycling of the currency reserve | |||||||||||
| of the discontinued operations | -84 | -84 | -84 | ||||||||
| Total comprehensive income for H1 2012 | 35,549 | 209 | 35,758 | -151 | 35,607 | ||||||
| At 30 June 2012 | 9,435 | 21,093 | 100,317 | -2,476 | 29 | -532 | 127,866 | 3,872 | 131,738 | ||
| Frauenthal Automotive | Wholesale Plumbing Supplies | Holding companies and others | Intragroup eliminations | Frauenthal Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR '000 | H1 2012 | H1 2011 | H1 2012 | H1 2011 | H1 2012 | H1 2011 | H1 2012 | H1 2011 | H1 2012 | H1 2011 * | |
| Strategic business units | |||||||||||
| Revenues from external customers | 114,058 | 123,630 | 134,580 | 126,012 | 10 | 12 | 0 | 0 | 248,648 | 249,654 | |
| Intersegment revenues | 140 | 622 | 0 | 0 | 1,314 | 1,327 | -1,454 | -1,949 | 0 | 0 | |
| Total revenues | 114,198 | 124,252 | 134,580 | 126,012 | 1,324 | 1,339 | -1,454 | -1,949 | 248,648 | 249,654 | |
| EBITDA | 3,962 | 9,111 | 3,429 | 3,258 | -890 | -540 | 83 | -398 | 6,584 | 11,430 | |
| Operating profit (EBIT) | 945 | 5,906 | 1,780 | 1,623 | -1,027 | -650 | 83 | -398 | 1,781 | 6,480 | |
| Employees | 1,607 | 1,687 | 778 | 694 | 14 | 13 | 0 | 0 | 2,399 | 2,394 | |
*The disposal of the Industrial Honeycombs Division was completed on 1 June 2012. The gains on disposal and the profit up to the time of the disposal are included in the profit from discontinued operations in accordance with IFRS 5. The previous year's figures have been adjusted accordingly.
State
ment o
f changes in
e quit y
Status as of 01.06.2012
status as from 01.07.2012
| 29 March 2012 | Publication of annual results 2011 |
|---|---|
| 21 May 2012 | Publication of the interim report on the first quarter of 1 / 2012 |
| 27 May 2012 | Record date |
| 06 June 2012 | 23nd Annual General Meeting |
| 11 June 2012 | Publication of results of votes on resolutions |
| 12 June 2012 | Ex-dividend date |
| 15 June 2012 | Dividend payment day |
| 21 August 2012 | Publication of the interim report on the first half of 2012 |
| 21 November 2012 | Publication of the interim report on the third quarter of 2012 |
Investor Relations Officer: Mag. Erika Hochrieser
Investors' hotline:: +43 (1) 505 42 06
E-Mail: [email protected]
Website: www.frauenthal.at
Vienna Stock Exchange: Prime Market
Symbol: FKA
ISIN: AT 0000762406 (Aktien)
Bloomberg-code: FKA AV
Reuters-code: FKAV.V1
Market capitalisation: EUR 80,3m incl. 1,900,000 unlisted registered shares (as at 29 June 2012)
Vienna Stock Exchange: Listing on the Vienna Stock Exchange official market
Wertpapier-Kürzel: FKA
ISIN: AT 0000492749 (Anleihe 2005)
Symbol: FKA
ISIN: AT 0000A0PG75 (2011 Bond)
In addition to detailed information on Group companies, our website offers downloads of quarterly reports, AGM documents, press releases, stock exchange announcements, product photographs, and the latest annual report in German and English.
Rooseveltplatz 10, A-1090 Wien, Tel.: +43 (1) 505 42 06, Fax: +43 (1) 505 42 06-33, e-mail: [email protected], www.frauenthal.at
jumptomorrow design gmbh, Schottenfeldgasse 60 / 33L, A-1070 Wien Tel.: +43 (1) 524 84 24, Fax: +43 (1) 524 84 24-25, e-mail: [email protected], www.jumptomorrow.com
Printed by: Grasl Druck&Neue Medien GmbH
Cover photo: Wolfgang Saerbeck (63), employee in the phosphatizing process, surface coating, Frauenthal Automotive Divison
Editorial changes have been made to this report in the interests of readability (including the colour scheme and lay-out). The original can be inspected at the Company's headquarters.
The Editorial deadline for the Interim Report 2012 was 14 August 2012
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