Homag Group AG — Earnings Release 2009

Aug 14, 2009

News Details

Corporate | 14 August 2009 10:21

Correction: Cost cutting at HOMAG takes effect

Homag Group AG / Half Year Results

Release of a Corporate News, transmitted by DGAP - a company of EquityStory
AG.
The issuer / publisher is solely responsible for the content of this announcement.

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Correction of the announcement from August 14, 2009, 07:45 am
negative signs deleted by system

* Order situation picks up in the second quarter of 2009
* Operating EBITDA already positive again
* Implementation of cost-cutting measures goes to plan

Schopfloch, August 14, 2009. Compared to the first three months of 2009,
the business development of HOMAG Group AG improved slightly again in the
second quarter. The volume of business is, however, still a far cry from
the same quarter of the prior year, although admittedly the situation was
completely different at that time. The global leader for plant and
machinery for the woodworking industry, which is listed on the SDAX, saw
order intake increase in the second quarter of 2009 by 35 percent from EUR
75 million to EUR 101 million (prior year: EUR 169 million). CEO, Dr.
Joachim Brenk, attributes the improved order situation above all 'to the
success of the Ligna, the industry's leading trade fair, in May at which
our new developments attracted a great deal of attention'. The order
backlog also recovered somewhat, reaching EUR 161 million as of June 30,
2009 and thus almost the level of year-end 2008 (EUR 164 million) (June 30,
2008: EUR 276 million). Sales revenue in the second quarter of 2009
amounted to EUR 122 million compared to EUR 119 million in the first
quarter of 2009 and EUR 223 million between April and June 2008.

According to the management board, the implementation of the measures to
cut costs and adjust capacities initiated by the company as soon as the
first signs of the crisis became apparent are progressing as planned. The
costs for personnel, contract workers and other operating expenses were
reduced by a further EUR 32 million in the second quarter, bringing the
total reduction in costs in the first half of 2009 (including the costs in
proportion to sales revenue) to more than EUR 56 million. Between April and
June 2009, headcount dropped by around 250 employees and since September
30, 2008 by around 500 to 4,905 employees as of June 30, 2009 excluding
BENZ GmbH Werkzeugsysteme in which a majority shareholding was acquired at
the beginning of 2009 or 5,136 employees including them. Since September
2008, around 330 contract workers have been laid off in addition to that.
The extraordinary expense for these restructuring measures/non-recurring
effects amounted to EUR 7.3 million in the second quarter.

The success of this cost-cutting drive is already reflected in the positive
EBITDA recorded in the second quarter of EUR 4.9 million (prior year: EUR
22.5 million) before this extraordinary expense and after employee
participation. After extraordinary expense and before employee
participation, EBITDA amounts to EUR -4.1 million (prior year: EUR 25.2
million). EBT before extraordinary expense and after employee participation
amounts to EUR -3.3 million (prior year: EUR 14.7 million). The net profit
for the period after minority interests comes to EUR -7.7 million (prior
year: EUR 8.8 million), and earnings per share of EUR -0.50 (prior year:
EUR 0.56).

First half of 2009
The half-year comparison clearly shows just how dramatically the market
situation has changed since the first half year of 2008 when there was
still no sign of the economic crisis in the mechanical engineering
industry. The HOMAG Group's sales revenue in the first half year 2009 stood
at EUR 241 million (prior year: EUR 450 million) while order intake stood
at EUR 176 million (prior year: EUR 401 million). EBITDA before the
extraordinary expense and after employee participation amounted to EUR 2.9
million (prior year: EUR 48.0 million), while it comes to EUR -8.5 million
(prior year: EUR 53.0 million) after extraordinary expense and before
employee participation. EBT before extraordinary expense and after employee
participation amounts to EUR -14.2 million (prior year: EUR 31.8 million).
The net profit for the period after minority interests dropped to EUR -18.8
million (prior year: EUR 20.1 million), and leads to earnings per share of
EUR -1.20 (prior year: EUR 1.28).

Outlook
As the difficult market situation persists, the management board of the
HOMAG Group still expects 2009 to be a weak fiscal year and anticipates a
drop in sales of up to 40 percent. Thanks to huge cost savings, the
management board assumes that EBIT before extraordinary expenses will be
positive for the second half of 2009. Due to the slow start to the year,
the EBIT for the whole year is however expected to be slightly negative.

According to CEO Brenk, the main goal of the Group in 2009 is to calibrate
capacity to the changed market and order situation. 'Having initiated
measures at an early stage, by early 2010 we will have reduced personnel
capacity including contract workers and subsidized temporary layoffs by
around 1,400 jobs compared to the peak headcount in the third quarter 2008.
We are therefore very well prepared to cater for the volume of business
anticipated for the future.'

Background information
With its 16 production companies worldwide, 22 group-owned sales and
service companies and approximately 60 exclusive sales partners, HOMAG
Group AG's market position is excellent and its portfolio as a
comprehensive system supplier and technology partner makes it unique.
Backed by a workforce of some 5,000 employees, the Company sees itself as
the leading global manufacturer for plant and machinery for the woodworking
industry for the production of furniture and construction elements as well
as prefabricated houses. The group also offers its customers a wide range
of services in related areas for production machines and equipment. HOMAG
Group AG shares have been trading on the Prime Standard of the Frankfurt
Stock Exchange since July 13, 2007 and were listed on the SDAX of the
German Stock Exchange on October 2007.

Disclaimers
This press release contains certain statements relating to the future.
Future-oriented statements are all those statements that do not pertain to
historical facts and events or expressions pertaining to the future such as
'believes', 'estimates', 'assumes', 'forecasts', 'intend', 'may', 'will',
'should' or similar expressions. Such future-oriented statements are
subject to risks and uncertainty since they relate to future events and are
based on current assumptions of the Company, which may not occur in the
future or may not occur in the anticipated form. The Company points out
that such future-oriented statements do not guarantee the future; actual
results including the financial position and the profitability of the HOMAG
Group as well as the development of economic and regulatory framework
conditions may deviate significantly (and prove unfavorable) from what is
expressly or implicitly assumed or described in these statements. Even if
the actual results of the HOMAG Group including the financial position and
profitability as well as the economic and regulatory framework conditions
should coincide with the future-oriented statements in this press release,
it cannot be guaranteed that the same will hold true in the future.

Information:

HOMAG Group AG

Investor Relations
Simone Mueller
Phone: +49 7443 13-2034
simone.mueller@homag-group.com
www.homag-group.com

14.08.2009 Financial News transmitted by DGAP

Language: English
Issuer: Homag Group AG
Homagstr. 3-5
72296 Schopfloch
Deutschland
Phone: +49 (0)7443 / 13 - 0
Fax: +49 (0)7443 / 13 - 2300
E-mail: info@homag-group.de
Internet: www.homag-group.de
ISIN: DE0005297204
WKN: 529720
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Hannover, Düsseldorf, Stuttgart, Hamburg

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