Quarterly Report • Nov 12, 2020
Quarterly Report
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| in €million | 9M 2020 | 9M 2019 | Change | Q3 2020 | Q3 2019 | Change |
|---|---|---|---|---|---|---|
| Consolidated sales | 563.6 | 579.1 | –2.7% | 196.9 | 177.8 | 10.7% |
| thereof sales Europe | 343.8 | 343.0 | 0.2% | 116.9 | 102.6 | 13.9% |
| thereof sales North America | 123.0 | 129.3 | –4.9% | 41.5 | 43.3 | –4.2% |
| thereof sales Asia, Pacific and Africa (APA) | 96.8 | 106.8 | –9.3% | 38.5 | 31.9 | 20.8% |
| Adjusted EBITDA1 | 67.3 | 83.2 | –19.0% | 27.3 | 24.9 | 9.7% |
| Adjusted EBITDA margin (%) | 11.9% | 14.4% | –2.5%-points | 13.9% | 14.0% | –0.1%-points |
| Adjusted EBIT 1 | 46.1 | 65.5 | –29.6% | 20.3 | 19.0 | 7.0% |
| Adjusted EBIT margin (%) | 8.2% | 11.3% | –3.1%-points | 10.3% | 10.7% | –0.4%-points |
| Equity ratio (%) | 27.1% | 40.9% | –13.8%-points | |||
| Net debt2 | 241.0 | 59.6 | 304.6% | |||
| Leverage3,9 | 2.65x | 0.57x | 363.7% | |||
| Capex 4 | 12.2 | 11.1 | 10.4% | 4.6 | 4.1 | 13.1% |
| ROCE (%) 5, 9 | 9.6% | 19.2% | –9.6%-points | |||
| Cash conversion rate (%) 6 | 81.9% | 86.7% | –4.8%-points | 83.0% | 83.5% | –0.5%-points |
| Profit / loss after taxes | 5.3 | 34.4 | –84.7% | 4.6 | 11.1 | –58.9% |
| Earnings per share (in €) | 0.35 | 2.31 | –84.8% | 0.30 | 0.75 | –60.0% |
| Adjusted profit /loss after taxes 7 | 27.4 | 42.7 | –35.9% | 11.8 | 12.8 | –7.6% |
| Adjusted earnings per share (in €) 8 | 1.84 | 2.87 | –35.9% | 0.79 | 0.86 | –8.1% |
1 Adjustments for PPA effects and exceptionals
2 Interest bearing loans (excl. accrued financing costs) – liquid assets
3 Net debt / adj. EBITDA, last 12 months
4 Gross presentation (capex; without taking into account divestments)
5 LTM adj. EBIT/ interest-bearing capital employed; interest-bearing capital:
shareholders' equity + financial liabilities (except for refinancing costs) – liquid assets + provisions for pensions 6 (Adj. EBITDA – capex) / adj. EBITDA
7 Profit after taxes adjusted for exceptionals in accordance with note 12
JOST is a leading global producer and supplier of safetycritical systems for the commercial vehicle industry under the JOST, ROCKINGER, TRIDEC, Edbro and Quicke brands.
JOST's global leadership position is driven by the strength of its brands, by its long-standing client relationships serviced through its global distribution network as well as by its efficient and asset-light business model. With its sales and production facilities in more than 20 countries across five continents, JOST has direct access to all major manufacturers of trucks, trailers and agricultural tractors and relevant end customers in the commercial vehicle industry.
JOST currently employs over 3,500 staff worldwide and has been listed on the Frankfurt Stock Exchange since 20 July 2017.
for the first nine months of 2020
JOST delivered a strong performance in the third quarter of 2020. Especially, the excellent growth in Asia, Pacific and Africa (APA) boosted sales and earnings. Overall, JOST increased consolidated sales by 10.7% year-over-year to €196.9m and adjusted EBIT by 7.0% year-over-year to €20.3m in the third quarter of 2020, despite the coronavirus pandemic. Ålö's acquired agricultural front loader business contributed €43.8m to sales and generated adjusted EBIT of €3.9m in the same period.
Even when adjusted for the effects of the acquisition, JOST achieved strong organic performance compared to the market in the third quarter of 2020. Organic consolidated sales decreased by just –13.8% to €153.2m. Despite this, the high degree of flexibility within JOST's business model enabled the group to generate adjusted EBIT (excluding Ålö) of €22.1m. As a result, JOST (excluding Ålö) achieved the previous year's strong adjusted EBIT margin of 10.7% in the third quarter of 2020.
JOST also improved its operating free cash flow (operating cash flow less capital expenditure) to €+31.6m compared to the previous year. The group used its high level of cash generation to reduce its financial liabilities and was thus able to lower its net debt to €241.0m compared to the previous quarter (Q2 2020: €268.0m). Combined with its strong operating performance in the third quarter of 2020, JOST managed to reduce its leverage ratio to 2.65x compared to the previous quarter, further strengthening the group's financial position (Q2 2020 leverage: 2.84x).
The economic impact of the coronavirus pandemic is lessening faster than expected: The global economy did not contract as much as originally anticipated during the third quarter of 2020. Despite the continued worldwide spread of the novel coronavirus (SARS-CoV-2 virus) and associated countermeasures aimed at reducing the rate of infection, many economies were showing the first signs of recovery in the third quarter.
Demand for products and services rose significantly in many countries compared to the previous quarter due to the easing of quarantine measures and national lockdowns. The current outlook for the fourth quarter of 2020 is also more positive than originally anticipated. As a result, the International Monetary Fund (IMF) lifted its dramatic economic expectations from June 2020 slightly in its latest study published in October 2020. Nevertheless, the economic situation is still subject to many uncertainties, particularly due to the current sharp rise in infection rates in most countries.
The IMF currently anticipates a –4.4% decline in global economic output for 2020 (previously: –4.9%). Global trade is expected to fall by –10.4% in 2020 (previously: –11.9%). In Europe, the IMF believes that the economy will contract by –8.3% in the 2020 fiscal year (previously: –10.2%), while the US economy is only expected to decline by –4.3% (previously: –8.0%). Only in China is the economic recovery that began in the second quarter continuing unabated. The IMF currently expects the country's economy to grow by 1.9% in 2020 (previously: +1.0%). By contrast, there has been a further deterioration in economic expectations for India, where the IMF now anticipates a –10.3% decline in economic output for 2020 (previously: –4.5%). India's poor performance is the main reason why the economy in Asia's emerging and developing markets is predicted to contract by –1.7% compared to 2019 despite China's positive influence (previously: –0.9%). The Latin American economy is expected to improve slightly and is now likely to decline by –8.1% in the 2020 fiscal year (previous year: –9.4%).
Global truck market stabilizing: Global demand for heavy trucks stabilized during the third quarter after pandemic-related production shutdowns in the first half of 2020. Another positive factor was strong growth in the truck market in China, which rose sharply again compared to the same quarter last year. This led to improved global expectations for heavy truck production in 2020. In its latest study from October 2020, forecasting institute LMC Automotive expects global production of heavy trucks to fall by just –8.1% year-over-year in 2020 (July 2020 expectation: –24.3%). However, global truck production excluding China is predicted to contract by –36.6% compared to 2019.
China's favorable market development has also significantly raised expectations for the Asia-Pacific-Africa (APA) region, where LMC is now expecting the truck market to grow by +7.9% in 2020 (July 2020 expectation: –11.5%). According to the latest estimates, truck production in Europe is likely to contract by –27.8% in 2020 (July 2020 expectation: –34.7%). The outlook in North America has also improved. Market research firm FTR, which specializes in North America, anticipates a –44.3% contraction in truck production in the region in 2020 (FTR expectation in July 2020: –54.2%). In Latin America, LMC Automotive now expects truck production to decline by –28.5% year-over-year in 2020 (July 2020 expectation: –30.5%).
Given the sharp market decline in the first half of 2020, current expectations point to a stabilization in the market during the fourth quarter of 2020. Nevertheless, significant uncertainty remains due to the renewed rise in infection figures.
Trailer production remains subdued in 2020: The effects of the pandemic on the real economy have also left their mark on the trailer market. However, this market did not collapse as dramatically as the truck market during the first half of 2020. As a result, we are seeing a somewhat more subdued recovery here.
In Europe, Clear Consulting still expects the trailer market to fall by around –25% during 2020 compared to 2019. In Asia, Pacific and Africa, Clear anticipates a decline of just –11% compared to the previous year, which only represents a slight improvement on previous expectations. This improvement is driven by China's recovery. However, the bigger-than-expected slump in the Indian market offset this effect. The trailer market is also recovering slowly in North America. After making an adjustment in July 2020, the FTR Institute left its expectations for the North American trailer market unchanged at –41.7% year-over-year in its latest study from October 2020.
Agricultural tractor market recovers: As demand for food is not impacted by the pandemic, the agricultural sector is less affected than the truck and trailer market. Although economic uncertainty curbed farmers' willingness to invest in the first half of 2020, sentiment improved in the course of the third quarter. Rising crop prices and strong grain exports to China boosted demand for agricultural tractors. Experts are currently predicting that in 2020 the tractor market in North America could grow by up to 5% year-over-year, whereas at the end of the second quarter of 2020 they were expecting a slight decline. The outlook has also improved in Europe. Overall, the European market is expected to contract by only –5% in 2020 compared to 2019. Previously a reduction in the low double-digit percentage range was expected.
In January 2020, the relevant antitrust authority approved JOST's acquisition of Ålö Holding AB ("Ålö") without conditions. This enabled JOST to complete the planned transaction on January 31, 2020 and acquire 100% of the shares in Ålö.
The Ålö Group is headquartered in Umeå, Sweden, with production sites in Sweden, China, the USA and France as well as sales offices in other significant markets worldwide. The company develops, produces and markets its systems for agricultural applications under the internationally renowned Quicke brand. The acquisition can transform JOST's existing business with commercial vehicle components for the agricultural industry into another cornerstone of the group.
JOST acquired a total of 14,207,973 shares with a notional value of SEK 10 per share. The enterprise value was €245.4m. Ålö had liquid assets of €12.3m at the acquisition date. The existing bank liabilities in the amount of €98.9m were repaid by JOST on January 31, 2020.
Ålö was included in the basis of consolidation of JOST effective February 1, 2020. Accordingly, the comparability of key financials with those of the previous year is limited.
| Organic | Takeover | |||||
|---|---|---|---|---|---|---|
| in € thousands | 9M 2020 | sales trend | FX effects | effects | Change | 9M 2019 |
| Europe | 343,775 | –24.8% | –0.4% | 25.4% | +0.2% | 343,021 |
| North America | 122,981 | –30.1% | 0% | 25.2% | –4.9% | 129,285 |
| Asia-Pacific-Africa (APA) | 96,845 | –6.8% | –3.7% | 1.2% | –9.3% | 106,777 |
| Total | 563,601 | –22.6% | –1.0% | 20.9% | –2.7% | 579,083 |
| Organic | Takeover | ||||||
|---|---|---|---|---|---|---|---|
| in € thousands | Q3 2020 | sales trend | FX effects | effects | Change | Q3 2019 | |
| Europe | 116,922 | –16.0% | –0.8% | 30.7% | +13.9% | 102,646 | |
| North America | 41,475 | –28.0% | –3.4% | 27.2% | –4.2% | 43,315 | |
| Asia-Pacific-Africa (APA) | 38,530 | +25.6% | –5.9% | 1.1% | +20.8% | 31,886 | |
| Total | 196,927 | –11.4% | –2.5% | 24.6% | +10.7% | 177,847 |
In the third quarter, JOST increased sales year-over-year for the first time in the 2020 fiscal year. Although the ongoing pandemic still had a significant impact on JOST's business, the company was able to profit considerably from the recovery in the market. Overall, consolidated sales rose by 10.7% in the third quarter of 2020 to €196.9m (Q3 2019: €177.8m). This includes a positive effect of €43.7m arising from the acquisition of Ålö. Sales excluding takeover effects fell by just –13.8% to €153.2m in the third quarter of 2020, which reflected the recovery in the truck and trailer markets, particularly in China but also in Europe and North America.
As more and more countries eased national measures aimed at containing the coronavirus pandemic and restrictions on public life were reduced, the economic situation improved worldwide and with it demand for heavy trucks and trailers. JOST's strong position in China made a particularly significant contribution to growth in the third quarter of 2020. All of the company's production plants were in operation during the third quarter and were no longer affected by closures triggered by official quarantine measures.
Although growth in the third quarter partially offset the pandemicrelated decline in sales in the first half of the year, it was not enough to completely compensate for this negative effect. As a result, consolidated sales for the first nine months of the year were –2.7% below the prior-year figure at €563.6m (9M 2019: €579.1m). This includes takeover effects of €121.0m from the consolidation of Ålö effective February 1, 2020.
European sales rose by 13.9% in the third quarter of 2020 to €116.9m (Q3 2019: €102.6m). Ålö's contribution was €31.5m. When adjusted for takeover effects, JOST's European sales fell by only –16.8% year-overyear to €85.4m in the third quarter. This performance primarily reflects the recovery in both the truck and trailer markets. Sales of agricultural products were positively impacted by postponed sales from the second quarter, which meant that the typical seasonality of the business was not as pronounced as usual.
In the first nine months of 2020 sales in Europe rose by 0.2% to €343.8m (9M 2019: €343.0m). The sales revenues generated by Ålö since February 1, 2020, amounted to €87.1m. Excluding takeover effects, sales in Europe in the first nine months of 2020 fell by –25.2% to €256.6m due to the negative effects of the pandemic.
After a very weak start to the third quarter, the North American truck and trailer market steadily recovered over the course of the quarter. Although demand for heavy trucks remained –40.4% below the prior-year quarter according to FTR, it was up significantly on the extremely weak second quarter of 2020. By contrast, the trailer market remained weak according to FTR, down –47.3% on the prior-year quarter.
The acquired agricultural front loader business generated €11.8m in sales in North America during the third quarter. In this environment, JOST's sales in North America only fell slightly by –4.2% to €41.5m in the third quarter of 2020 (Q3 2019: €43.3m). When adjusted for takeover and currency exchange effects, JOST's sales in the region decreased by –28.0% to €29.7m in the same period. This means that JOST once again outperformed the truck and trailer market, which was largely due to gaining market share in the growing aftermarket business.
Sales in the region dropped by –4.9% to €123.0m in the first nine months of 2020 (9M 2019: €129.3m). This includes sales of €32.6m generated by Ålö. Excluding the effects of the acquisition, JOST's sales in North America fell by –30.1% to €90.4m during that period.
JOST's performance in the APA region was dominated by strong growth in China in the third quarter of 2020. Other countries in the region such as South Africa and Australia also showed a positive trend. Only the Indian market remained at a record low. Another positive aspect was the fact that all of JOST's production plants in the region were able to continue producing without interruption despite the pandemic.
As a result, JOST increased sales in APA by 20.8% year-over-year to €38.5m in the third quarter (Q3 2019: €31.9m). The contribution made by the acquisition of Ålö was almost negligible at €0.3m. Headwinds from currency exchange reduced sales by –5.9%. Cumulative sales in the first nine months of 2020 fell by –9.3% to €96.8m due to the strong impact of the pandemic on the APA region in the first half of 2020 (9M 2019: €106.8m). This includes an amount of €1.3m contributed by Ålö.
| in € thousands | 9M 2020 | 9M 2019 | % yoy |
|---|---|---|---|
| Sales revenues | 563,601 | 579,083 | –2.7% |
| Cost of sales | –411,685 | –428,425 | |
| Gross profit | 151,916 | 150,658 | +0.8% |
| Gross margin | 27.0% | 26.0% | +1%-points |
| Operating expenses / income | –140,200 | –105,018 | |
| Operating profit (EBIT) | 11,716 | 45,640 | –74.3% |
| Net finance result | –7,226 | –4,463 | |
| Income taxes | 790 | –6,772 | |
| Earnings after taxes | 5,280 | 34,405 |
| in € thousands | Q3 2020 | Q3 2019 | % yoy |
|---|---|---|---|
| Sales revenues | 196,927 | 177,847 | +10.7% |
| Cost of sales | –137,985 | –131,694 | |
| Gross profit | 58,942 | 46,153 | +27.7% |
| Gross margin | 29.9% | 26.0% | +3.9%-points |
| Operating expenses /income | –50,608 | –33,787 | |
| Operating profit (EBIT) | 8,334 | 12,366 | –32.6% |
| Net finance result | –3,379 | –671 | |
| Income taxes | –397 | –594 | |
| Earnings after taxes | 4,558 | 11,101 | |
JOST increased its gross margin by 3.9 percentage points year-overyear to 29.9% in the third quarter of 2020 (Q3 2019: 26.0%). The group introduced numerous cost cutting measures worldwide during the pandemic that are now causing an improvement in gross margin as the markets slowly recover. Strong growth in Asia, Pacific and Africa (APA), a more favorable product mix and the increased share of the aftermarket business have all reinforced this development.
By contrast, factors such as exceptionals relating to the acquisition of Ålö continue to lead to a sharp year-over-year rise in operating expenses. Research and development expenses were also on a par with the previous year, as JOST continues to push ahead with the enhancement of its product portfolio. These activities were focused on the final stages of development for the KKS 2 automatic coupling system, which was introduced to the market at the end of the third quarter of 2020. The rise in administrative expenses compared to the previous year is primarily attributable to the initial consolidation of Ålö. In the third quarter of 2020, earnings before interest and taxes (EBIT) decreased to €8.3m (Q3 2019: €12.4m). Consolidated EBIT totaled €11.7m in the first nine months of 2020 (9M 2019: €45.6m).
Adjusted for exceptionals, adjusted EBIT rose by 7.0% to €20.3m in the third quarter of 2020 (Q3 2019: €19.0m). JOST managed to generate an adjusted EBIT margin in the double-digit percentage range despite the pandemic. At 10.3%, the adjusted EBIT margin was just –0.4 percentage points below the strong prior-year quarter (Q3 2019: 10.7%). This represents an improvement of 3.3 percentage points compared to the previous quarter (Q2 2020: 7.0%).
Despite the seasonal weakness typically experienced by the agricultural sector in the third quarter, the Ålö Group managed to generate adjusted EBIT of €3.9m and an adjusted EBIT margin of 8.8%. JOST was able to quickly convert the recovery in the truck market into new business. As a result, JOST (excluding Ålö) generated adjusted EBIT of €16.4m in the third quarter of 2020 and was able to achieve an adjusted EBIT margin on a par with the previous year at 10.7% for the first time in the 2020 fiscal year.
Consolidated EBIT in the first nine months of 2020 came to €46.1m (9M 2019: €65.5m) with a lower adjusted EBIT margin of 8.2% (9M 2019: 11.3%). This figure includes the adjusted EBIT of Ålö, which came to €13.0m in the first nine months of 2020. The adjusted EBIT margin of Ålö was 10.7%. In the same period, JOST (excluding Ålö) generated adjusted EBIT of €33.2m and an adjusted EBIT margin of 7.5%. These results were impacted primarily by the weak first half of 2020 caused by the pandemic.
In the first nine months of 2020, JOST adjusted expenses by €34.4m overall (9M 2019: €19.9m). EBIT adjustments mainly concerned nonoperating exceptionals arising from depreciation and amortization in connection with purchase price allocation (D&A from PPA) in the amount of €21.7m (9M 2019: €18.8m). The year-over-year increase of €2.9m is exclusively attributable to the acquisition of Ålö. There was also a €6.9m adjustment from the use of step-ups on Ålö's inventories in the first nine months of the year. JOST also adjusted administrative expenses by €2.2m, a substantial portion of which was triggered by consulting costs in connection with the acquisition of Ålö. An additional €2.4m concern one-off costs from an optimization project at Ålö, which is expected to be completed by the end of 2020. The following tables show a summary of adjustments made:
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| EBIT | 11,716 | 45,640 |
| D&A from PPA | –21,713 | –18,827 |
| Other effects | –12,682 | –1,061 |
| Adjusted EBIT | 46,111 | 65,528 |
| Depreciation | –18,752 | –16,168 |
| Amortization | –2,457 | –1,465 |
| Adjusted EBITDA | 67,320 | 83,161 |
Adjustments totaled €11.9m in the third quarter of 2020 (Q3 2019: €6.6m). This included non-operating exceptionals from PPA depreciation and amortization amounting to €7.3m (Q3 2019: €6.3m) and an additional €2.6m from the use of step-ups on Ålö inventories. In addition, exceptionals in the amount of €1.2m were incurred in the third quarter of 2020 in connection with the optimization project at Ålö.
| in € thousands | Q3 2020 | Q3 2019 |
|---|---|---|
| EBIT | 8,334 | 12,366 |
| D&A from PPA | –7,347 | –6,277 |
| Other effects | –4,601 | –313 |
| Adjusted EBIT | 20,282 | 18,956 |
| Depreciation | –6,059 | –5,431 |
| Amortization | –964 | –512 |
| Adjusted EBITDA | 27,305 | 24,899 |
The net finance result amounted to €–3.4m in the third quarter of 2020 (Q3 2019: €–0.7m). The increase in financial expense is to some extent due to the increase in interest payments made in connection with the new loans taken out in early 2020 to finance the Ålö acquisition. In addition, unrealized currency losses triggered by non-cash effects from the measurement of foreign currency loans rose to €–1.9m in the third quarter (Q3 2019: €–0.3m). The net finance result amounted to €–7.2m in the first nine months of 2020 (9M 2019: €–3.8m).
Profit after taxes in the third quarter of 2020 reached €4.6m (Q3 2019: €11.1m). Earnings per share came to €0.30 in the third quarter (Q3 2019: €0.75). In the first nine months of 2020, JOST generated a profit of €5.3m (9M 2019: €34.4m) and earnings per share of €0.35 (9M 2019: €2.31) due to the negative impact of the pandemic.
Adjusted for exceptionals, earnings after taxes in the third quarter of 2020 came to €11.8m (Q3 2019: €12.8m) and earnings per share to €0.79 (Q3 2019: €0.86). In the first nine months of 2020, adjusted earnings after taxes amounted to €27.4m (9M 2019: €42.7m) and adjusted earnings per share to €1.84 (9M 2019: €2.87).
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 546,317 | 132,362 | 152,783 | –267,861 | 563,601** |
| thereof: external sales revenues* | 343,775 | 122,981 | 96,845 | 0 | 563,601 |
| thereof: internal sales revenues* | 202,542 | 9,381 | 55,938 | –267,861 | 0 |
| Adjusted EBIT*** | 22,830 | 7,794 | 13,525 | 1,962 | 46,111 |
| thereof: depreciation and amortization | 13,873 | 3,711 | 3,625 | 0 | 21,209 |
| Adjusted EBIT margin | 6.6% | 6.3% | 14.0% | 8.2% | |
| Adjusted EBITDA*** | 36,703 | 11,505 | 17,150 | 1,962 | 67,320 |
| Adjusted EBITDA margin | 10.7% | 9.4% | 17.7% | 11.9% |
* Sales by destination in the reporting period:
– Europe: €288,946 thousand
– Americas: €133,276 thousand
– Asia, Pacific and Africa: €141,379 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/ EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
To improve comparability with the previous year's figures, the following table shows the key figures of the former JOST before the acquisition of the Ålö Group and of the acquired Ålö Group separately for the first nine months of 2020:
| Consolidated | ||||
|---|---|---|---|---|
| in € thousands | Ålö Group | JOST (excl. Ålö) | financial statements | |
| Sales revenues | 121,005 | 442,596 | 563,601 | |
| Adjusted EBIT | 12,952 | 33,159 | 46,111 | |
| thereof: depreciation and amortization | 3,552 | 17,657 | 21,209 | |
| Adjusted EBIT margin | 10.7% | 7.5% | 8.2% | |
| Adjusted EBITDA | 16,504 | 50,816 | 67,320 | |
| Adjusted EBITDA margin | 13.6% | 11.5% | 11.9% |
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 557,151 | 130,168 | 134,835 | –243,071 | 579,083** |
| thereof: external sales revenues* | 343,021 | 129,285 | 106,777 | 0 | 579,083 |
| thereof: internal sales revenues* | 214,130 | 883 | 28,058 | –243,071 | 0 |
| Adjusted EBIT*** | 35,522 | 12,141 | 15,179 | 2,686 | 65,528 |
| thereof: depreciation and amortization | 11,874 | 3,010 | 2,749 | 0 | 17,633 |
| Adjusted EBIT margin | 10.4% | 9.4% | 14.2% | 11.3% | |
| Adjusted EBITDA*** | 47,396 | 15,151 | 17,928 | 2,686 | 83,161 |
| Adjusted EBITDA margin | 13.8% | 11.7% | 16.8% | 14.4% | |
* Sales by destination in the reporting period:
– Europe: €299,518 thousand
– Americas: €135,457 thousand
– Asia, Pacific and Africa: €144,108 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/ EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
The decline in demand caused by the pandemic had a significantly adverse impact on JOST's European earnings in the first nine months of 2020. The market slowly began to recover in the course of the third quarter, although the effects of the pandemic were still being felt. JOST succeeded in tackling the significant market slump with measures such as short-time work, renegotiations with suppliers and service providers and very strict and consistent cost controls across all European sites.
JOST generated an operating profit in Europe in the first nine months of 2020 despite the dramatic impact of the pandemic on the course of business: Adjusted EBIT in the first nine months of 2020 came to €22.8m (9M 2019: €35.5m) with an adjusted EBIT margin of 6.6% (9M 2019: 10.4%), an improvement on the 6.0% margin recorded in the first half of 2020. The acquisition of Ålö effective February 1, 2020, had a particularly positive impact on earnings in Europe. However, the group's administrative expenses, which are allocated to the Europe region, resulted in a comparatively higher proportion of fixed costs.
Due to the market shares acquired in recent years, JOST was able to grow the aftermarket business in North America and could thus partially offset the sharp decline in sales from OEM customers. The cost reduction measures introduced in the second quarter quickly took effect, leading to a significant reduction in the region's cost of sales and administrative expenses. Ålö's business performance in North America, however, was adversely impacted by the US production plant relocation from Telford, Tennessee to Simpsonville, South Carolina, which affected the overall operating result in North America.
Despite the sharp decline in the North American market triggered by the pandemic, JOST recorded adjusted EBIT of €7.8m in the first nine months of 2020 (9M 2019: €12.1m) and an adjusted EBIT margin of 6.3% (9M 2019: 9.4%).
The APA segment was particularly hard hit by the outbreak of the coronavirus pandemic in the first half of 2020. JOST was forced to close its Chinese production plant in Wuhan, Hubei province, from the end of January to mid-March 2020. The plants in India and South Africa also had to be closed from the end of March to mid-May 2020 due to the pandemic. But the economic situation improved in most countries in APA during the third quarter, with India being the exception.
JOST's robust positioning in China enabled the group to profit from the strong growth in this market. Thus, JOST could recover a large part of the sales missing from the first quarter over the course of the year. Due to high capacity utilization at the plant in China, a beneficial product mix and the cost reduction measures introduced, JOST generated adjusted EBIT of €13.5m in the first nine months of 2020 despite the sharp drop in sales (9M 2019: €15.2m). As a result, the adjusted EBIT margin in APA was at a similar level to the previous year at 14.0% (9M 2019: 14.2%). This represents a significant improvement in profitability compared to the first half of 2020 (adjusted EBIT margin in H1 2020: 10.2%).
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 181,265 | 44,692 | 62,249 | –91,279 | 196,927** |
| thereof: external sales revenues* | 116,922 | 41,475 | 38,530 | 0 | 196,927 |
| thereof: internal sales revenues* | 64,343 | 3,217 | 23,719 | –91,279 | 0 |
| Adjusted EBIT*** | 9,326 | 2,545 | 7,596 | 815 | 20,282 |
| thereof: depreciation and amortization | 4,875 | 961 | 1,187 | 0 | 7,023 |
| Adjusted EBIT margin | 8.0% | 6.1% | 19.7% | 10.3% | |
| Adjusted EBITDA*** | 14,201 | 3,506 | 8,783 | 815 | 27,305 |
| Adjusted EBITDA margin | 12.1% | 8.5% | 22.8% | 13.9% |
* Sales by destination in the reporting period:
– Europe: €97,354 thousand
– Americas: €44,804 thousand
– Asia, Pacific and Africa: €54,769 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/ EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
To improve comparability with the previous year's figures, the following table shows the key figures of the former JOST before the acquisition of the Ålö Group and of the acquired Ålö Group separately for the third quarter of 2020:
| Consolidated | |||
|---|---|---|---|
| in € thousands | Ålö Group | JOST (excl. Ålö) | financial statements |
| Sales revenues | 43,689 | 153,238 | 196,927 |
| Adjusted EBIT | 3,865 | 16,417 | 20,282 |
| thereof: depreciation and amortization | 1,352 | 5,671 | 7,023 |
| Adjusted EBIT margin | 8.8% | 10.7% | 10.3% |
| Adjusted EBITDA | 5,217 | 22,088 | 27,305 |
| Adjusted EBITDA margin | 11.9% | 14.4% | 13.9% |
| in € thousands | Europe | North America | Asia, Pacific and Africa |
Reconciliation | Consolidated financial statements |
|---|---|---|---|---|---|
| Sales revenues* | 166,186 | 43,376 | 40,699 | –72,414 | 177,847** |
| thereof: external sales revenues* | 102,646 | 43,315 | 31,886 | 0 | 177,847 |
| thereof: internal sales revenues* | 63,540 | 61 | 8,813 | –72,414 | 0 |
| Adjusted EBIT*** | 9,046 | 4,316 | 4,657 | 937 | 18,956 |
| thereof: depreciation and amortization | 3,953 | 1,036 | 954 | 0 | 5,943 |
| Adjusted EBIT margin | 8.8% | 10.0% | 14.6% | 10.7% | |
| Adjusted EBITDA*** | 12,999 | 5,352 | 5,611 | 937 | 24,899 |
| Adjusted EBITDA margin | 12.7% | 12.4% | 17.6% | 14.0% | |
* Sales by destination in the reporting period:
– Europe: €88,018 thousand
– Americas: €44,837 thousand
– Asia, Pacific and Africa: €44,992 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
The economic situation in Europe continued to stabilize in the third quarter. Despite the typical summer break, demand for heavy trucks and trailers rose substantially compared to the previous quarter. Performance in the agricultural sector was weaker than in the second quarter, which reflects the market's usual seasonality. Nevertheless, the acquired agricultural front loader business made an important contribution to the region's operating result.
JOST increased its adjusted EBIT in Europe by 3.1% year-over-year to €9.3m in the third quarter of 2020 (Q3 2019: €9.0m) and generated an adjusted EBIT margin of 8.0% (Q3 2019: 8.8%). This means that JOST was able to improve the adjusted EBIT margin in Europe by +5.2 percentage points compared to the previous quarter (Q2 2020: 2.8%).
After an extremely weak second quarter of 2020 caused by the pandemic, the North American market slowly recovered at the end of the third quarter. Demand for heavy trucks in particular rose sharply in the region compared to the previous quarter, even though it remained below the record high of the same quarter last year. The robust aftermarket business boosted JOST's operating result despite declining sales. By contrast, additional costs incurred as a result of the relocation of Ålö's US production plant from Telford, Tennessee, to Simpsonville, South Carolina, put the operating result in North America under pressure.
As a result, adjusted EBIT in the region amounted to €2.5m in the third quarter of 2020 (Q3 2019: €4.3m) while the adjusted EBIT margin was 6.1% (Q3 2019: 10.0%). JOST succeeded in increasing its adjusted EBIT margin in North America as well compared to the previous quarter (Q2 2020: 5.4%).
In APA, JOST was able to take advantage of the rapid growth in China during the third quarter of 2020. Other countries such as Australia, New Zealand and South Africa also recovered during the quarter and were able to substantially improve earnings in the region. The situation only remains critical in India. However, the cost reduction measures successfully introduced here in the previous quarters limited the negative impact the slump of the Indian market had on earnings.
As a result, JOST achieved sales growth of 20.8% in APA in the third quarter and increased adjusted EBIT by 63.1% year-over-year to €7.6m (Q3 2019: €4.7m). This meant that the adjusted EBIT margin reached a new high of 19.7% (Q3 2019: 14.6%).
| Assets | Equity and Liabilities | |
|---|---|---|
| in € thousands | 09/30/2020 | 12/31/2019 | in € thousands | 09/30/2020 | 12/31/2019 |
|---|---|---|---|---|---|
| Noncurrent assets | 521,866 | 313,477 | Equity | 246,316 | 263,130 |
| Current assets | 388,604 | 325,075 | Noncurrent liabilities | 413,665 | 267,851 |
| Current liabilities | 250,489 | 107,571 | |||
| 910,470 | 638,552 | 910,470 | 638,552 |
In the first nine months of 2020, the equity of JOST Werke AG fell by –6.4% to €246.3m (December 31, 2019: €263.1m). This development is mainly due to non-cash exchange differences of foreign companies. The equity ratio decreased to 27.1% as of September 30, 2020 (December 31, 2019: 41.2%). Alongside the decline in equity, the main reason for the reduced equity ratio was the increase in noncurrent and current liabilities following the acquisition of the Ålö Group.
To finance its acquisition of Ålö, JOST entered into a financing arrangement with a consortium of banks for an amount of €120.0m and a term of 5 years. This was the primary reason for the increase in noncurrent liabilities to €413.7m (December 31, 2019: €267.9m). JOST also used liquid assets during the third quarter to repay €42.5m of the additional revolving credit line drawn down in connection with the takeover. As a result, the drawdown decreased to just €67.5m as of September 30, 2020.
The group's current and noncurrent assets increased as well due to the initial consolidation of the Ålö Group. As part of the purchase price allocation, significant step-ups on intangible assets (€81.3m) such as customer lists and brand names were identified and measured. As a result of the Ålö Group's strong market position and high profitability, as well as the expected synergies, goodwill of €79.7m was also recognized in intangible assets. A detailed overview of the assets identified in the acquisition can be found in note 3 of the Notes.
The increase in property, plant and equipment by €14.4m to €124.1m (December 31, 2019: €109.7m) is largely due to the acquisition of Ålö. Overall, noncurrent assets rose by €208.4m to €521.9m as of September 30, 2020 (December 31, 2019: €313.5m).
Some of the €30.0m increase in inventories to €138.1m (December 31, 2019: €108.2m) was also attributable to the initial consolidation of Ålö and as of September 30, 2020, still included a write-up of Ålö's inventories totaling €2.6m associated with the purchase price allocation. The increase in inventories compared with December 31, 2019, was further bolstered by seasonal effects as inventories and receivables are generally lower at the end of the year. In addition to the initial consolidation of Ålö, this was the main reason for the €42.9m increase in trade receivables to €132.9m as of September 30, 2020, compared to yearend (December 31, 2019: €89.9m). Trade payables rose analogously by €43.5m to €107.7m (December 31, 2019: €64.2m). As a result, working capital increased by 21.9% to €163.2m in the first nine months of 2020 (December 31, 2019: €133.9m). Working capital rose by only 9.1% yearover-year (9M 2019: €149.6m), mainly due to the consolidation of Ålö.
Working capital as a percentage of sales rose to 21.1% in the last twelve months (9M 2019: 19.5%). The main reason for this development is the sharp year-over-year decline in sales in the first nine months of 2020 triggered by the pandemic-related slump seen particularly in the commercial vehicle market in the first half of 2020. To avoid a continued distortion of key figures, Ålö's sales of the last twelve months have been taken into account.
Due to JOST's high cash generation, the company kept its liquid assets stable at a high level of €97.3m as of September 30, 2020 (December 31, 2019: €104.8m), although the company utilized around €50m of available liquidity to finance the Ålö acquisition in the first quarter of 2020 and used additional liquid assets of €42.5m to repay financial liabilities in the third quarter of 2020. Of this figure, €20m was drawn from the revolving credit facility in the first half of 2020 to bridge possible liquidity bottlenecks in the wake of the coronavirus pandemic. However, these funds were not needed and were therefore repaid in July 2020. JOST generated the remaining €22.5m in its operating business and used it to reduce financial liabilities.
As a result, net debt fell to €241.0m compared to the previous quarter (June 30, 2020: €268.0m), while the leverage ratio (ratio of debt to adjusted EBITDA for the last twelve months) improved to 2.65x (June 30, 2020: 2.84x). However, these figures have risen compared to December 31, 2019, due to the acquisition of Ålö. As of December 31, 2019, net debt amounted to €46.3m and the leverage ratio was 0.46x.
The significant improvement compared to the previous quarter underlines JOST's strong operating performance and shows that the company is rapidly approaching its target of a leverage ratio below 2.0x.
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| Cash flow from operating activities | 74,098 | 56,378 |
| thereof change in net working capital | 8,014 | –7,661 |
| Cash flow from investing activities | –255,020 | –7,566 |
| Cash flow from financing activities | 176,400 | –24,031 |
| Net change in cash and cash equivalents | –4,522 | 24,781 |
| Change in cash and cash equivalents due | ||
| to exchange rate movements | –2,989 | 714 |
| Cash and cash equivalents at January 1 | 104,812 | 66,087 |
| Cash and cash equivalents at September 30 | 97,301 | 91,582 |
| in € thousands | Q3 2020 | Q3 2019 |
|---|---|---|
| Cash flow from operating activities | 36,267 | 34,021 |
| thereof change in net working capital | 13,312 | 9,227 |
| Cash flow from investing activities | –4,324 | –2,330 |
| Cash flow from financing activities | –45,836 | –3,554 |
| Net change in cash and cash equivalents | –13,893 | 28,137 |
| Change in cash and cash equivalents due | ||
| to exchange rate movements | –1,694 | 209 |
| Cash and cash equivalents at April 1 | 112,888 | 63,236 |
| Cash and cash equivalents at September 30 | 97,301 | 91,582 |
Cash flow from operating activities increased to €+74.1m in the first nine months of 2020, driven primarily by the improvement in working capital (9M 2019: €+56.4m). Cash flow from operating activities in the third quarter of 2020 at €+36.3m was also higher year-over-year (Q3 2019: €+34.0m).
As a result of the acquisition of Ålö effective January 31, 2020, cash flow from investing activities in the first nine months of 2020 was €–255.0m (9M 2019: €–7.6m). Investments in property, plant and equipment decreased year-over-year to €–8.3m (9M 2019: €–10.2m). Cash flow from investing activities in the third quarter of 2020 was €–4.3m (Q3 2019: €–2.3m), with investments in property, plant and equipment amounting to €–3.2m (Q3 2019: €–3.7m).
Cash flow from financing activities in the first nine months of 2020 was also significantly impacted by the acquisition of Ålö. As a result of cash inflows from long-term loans (€+120.0m) and short-term loans (€+67.5m), it rose to €+176.4m in the reporting period (9M 2019: €–24.0m). The €42.5m repayment of borrowings reduced cash flow from financing activities in the third quarter of 2020 to €–45.8m (Q3 2019: €–3.6m).
Despite the repayment, liquid assets at the end of the third quarter of 2020 rose to €+97.3m year-over-year (Q3 2019: €+91.6m).
The risk situation of JOST has changed significantly since the preparation of our 2019 Annual Report. The global spread of the SARS-CoV-2 coronavirus is having a major negative impact on the company and the economy. As the duration and severity of measures to contain the epidemic differ significantly from one country to the next and are subject to dynamic changes, it is not possible to reliably predict its consequences for the future development of both individual economies and the global economy.
JOST is affected by the consequences of the pandemic in all stages of the value chain. Particular risks arise from persistently low demand and possible production and supply chain interruptions caused by the pandemic as well as the quarantine measures imposed to contain the pandemic. Competition may also continue to intensify as a result of decreasing demand worldwide. There are also other challenges associated with protecting the health of our workforce. JOST has introduced additional hygiene and protective measures in all production plants to protect the health of its employees and ensure operations.
JOST's Management Board currently expects negative impacts on the operating business worldwide. Overall, the risks identified do not influence the group's net assets, financial position and results of operations in a way that represents a risk to the group as a going concern and are considered by the Management Board to be manageable from today's perspective.
Since the Annual Report was prepared on March 13, 2020, the effects of the coronavirus pandemic have intensified significantly worldwide. In most countries, OEM customers reacted by temporarily closing their plants or reducing their production programs in the first half of 2020. National quarantine measures put additional pressures on the production of customers and suppliers in the first half of 2020. Some of JOST's sites have also had to close, in part due to national regulations. But in the third quarter of 2020, all JOST plants were operational again.
Therefore, the assumptions underlying the forecasts made in the 2019 Annual Report no longer apply. Due to the significant negative impact of the pandemic on the commercial vehicle market, JOST now anticipates a year-over-year decline in sales in the single-digit percentage range for the 2020 fiscal year (2019 sales: €736.7m). This merely slight decline is primarily due to the positive effect of the initial consolidation of the Ålö Group.
The group's adjusted EBIT will fall more sharply than consolidated sales in 2020 due to the negative impact of pandemic-related plant closures in the first half of 2020 and associated fixed cost effects (2019 adjusted EBIT: €76.8m). As a result, the adjusted EBIT margin will also be significantly lower in 2020 than in the previous year (2019 adjusted EBIT margin: 10.4%). However, JOST anticipates an improvement in the adjusted EBIT margin during the second half of 2020, which means it will be higher for the full fiscal year than it was in the first half of 2020 (H1 2020 adjusted EBIT margin: 7.0%).
Consolidated adjusted EBITDA is likely to perform slightly better than adjusted EBIT in 2020, although it will also shrink compared to the previous year (2019 adjusted EBITDA: €100.8m). Similarly, although the adjusted EBITDA margin for 2020 will decrease year-over-year, it will still remain in double digits (2019 adjusted EBITDA margin: 13.7%).
This forecast is based on the assumption that there will be no further pandemic-related plant closures at JOST or important JOST customers for the rest of the 2020 fiscal year. It is also contingent on government measures to contain the pandemic being implemented only on a regional basis and no further national lockdowns being introduced.
JOST is working hard to swiftly adapt its costs, structures and processes to the rapidly changing situation. The Management Board is confident that JOST is well positioned to deal with the latest challenges in a successful and results-driven manner and that the group will emerge stronger from the current crisis.
The Management Board of JOST Werke AG
Neu-Isenburg, November 12, 2020
for the nine months ended September 30, 2020 Neu-Isenburg, Deutschland
14
for the nine months ended September 30, 2020 JOST Werke AG
| in € thousands | Notes | 9M 2020 | 9M 2019 | Q3 2020 | Q3 2019 |
|---|---|---|---|---|---|
| Sales revenues | (6) | 563,601 | 579,083 | 196,927 | 177,847 |
| Cost of sales | –411,685 | –428,425 | –137,985 | –131,694 | |
| Gross profit | 151,916 | 150,658 | 58,942 | 46,153 | |
| Selling expenses | –87,463 | –66,772 | –36,348 | –21,579 | |
| thereof: depreciation and amortization of assets | –24,251 | –21,095 | –7,691 | –7,042 | |
| thereof: depreciation of right-of-use assets from leases | –2,066 | –1,629 | –862 | –553 | |
| Research and development expenses | –10,143 | –10,310 | –3,016 | –3,421 | |
| Administrative expenses | (7, 12) | –45,348 | –31,268 | –13,382 | –10,090 |
| Other income | (8) | 7,401 | 3,634 | 2,843 | 1,324 |
| Other expenses | (8) | –6,609 | –2,988 | –1,520 | –958 |
| Share of profit or loss of equity method investments | 1,962 | 2,686 | 815 | 937 | |
| Operating profit (EBIT) | 11,716 | 45,640 | 8,334 | 12,366 | |
| Financial income | (9) | 1,716 | 1,739 | 591 | 934 |
| Financial expense | (9) | –8,942 | –6,202 | –3,970 | –1,605 |
| Net finance result | –7,226 | –4,463 | –3,379 | –671 | |
| Profit/loss before tax | 4,490 | 41,177 | 4,955 | 11,695 | |
| Income taxes | (10) | 790 | –6,772 | –397 | –594 |
| Profit/loss after taxes | 5,280 | 34,405 | 4,558 | 11,101 | |
| Weighted average number of shares | 14,900,000 | 14,900,000 | 14,900,000 | 14,900,000 | |
| Basic and diluted earnings per share (in €) | (11) | 0.35 | 2.31 | 0.30 | 0.75 |
for the nine months ended September 30, 2020 JOST Werke AG
| in € thousands | 9M 2020 | 9M 2019 | Q3 2020 | Q3 2019 |
|---|---|---|---|---|
| Profit/loss after taxes | 5,280 | 34,405 | 4,558 | 11,101 |
| Items that may be reclassified to profit | ||||
| or loss in subsequent periods | ||||
| Exchange differences on translating foreign operations | –20,068 | 3,719 | –11,697 | 868 |
| Items that will not be reclassified to profit or loss | ||||
| Remeasurements of defined benefit pension plans | –2,895 | –12,614 | –1,042 | –3,440 |
| Deferred taxes relating to other comprehensive income | 869 | 3,784 | 313 | 1,032 |
| Other comprehensive income | –22,094 | –5,111 | –12,426 | –1,540 |
| Total comprehensive income | –16,814 | 29,294 | –7,868 | 9,561 |
as of September 30, 2020 JOST Werke AG
16
| in € thousands Notes 30/09/2020 Noncurrent assets Goodwill (3) 78,045 Other intangible assets (3) 300,310 Property, plant, and equipment 124,138 Investments accounted for using the equity method 8,968 Deferred tax assets 9,390 Other noncurrent assets 1,015 521,866 Current assets Inventories 138,124 Trade receivables (13) 132,858 Receivables from income taxes 4,208 Other current financial assets (13), (14) 746 Other current assets 15,367 Cash and cash equivalents 97,301 388,604 Total assets 910,470 |
Assets | ||
|---|---|---|---|
| 31/12/2019 | |||
| 0 | |||
| 184,233 | |||
| 109,716 | |||
| 10,851 | |||
| 7,348 | |||
| 1,329 | |||
| 313,477 | |||
| 108,173 | |||
| 89,937 | |||
| 4,799 | |||
| 628 | |||
| 16,726 | |||
| 104,812 | |||
| 325,075 | |||
| 638,552 |
| in € thousands | Notes | 30/09/2020 | 31/12/2019 |
|---|---|---|---|
| Equity | |||
| Subscribed capital | 14,900 | 14,900 | |
| Capital reserves | 474,653 | 474,653 | |
| Other reserves | –61,632 | –39,538 | |
| Retained earnings | –181,605 | –186,885 | |
| 246,316 | 263,130 | ||
| Noncurrent liabilities | |||
| Pension obligations | (15) | 71,179 | 69,098 |
| Other provisions | 3,321 | 2,405 | |
| Interest-bearing loans and borrowings | (16) | 270,049 | 150,444 |
| Deferred tax liabilities | 39,250 | 16,661 | |
| Other noncurrent financial liabilities | (13) | 25,157 | 25,161 |
| Other noncurrent liabilities | 4,709 | 4,082 | |
| 413,665 | 267,851 | ||
| Current liabilities | |||
| Pension obligations | (15) | 1,897 | 1,897 |
| Other provisions | 19,165 | 7,331 | |
| Interest-bearing loans and borrowings | (16) | 67,808 | 311 |
| Trade payables | 107,749 | 64,223 | |
| Liabilities from income taxes | 5,565 | 3,407 | |
| Contract liabilities | 3,914 | 4,571 | |
| Other current financial liabilities | (13), (17) | 9,094 | 7,419 |
| Other current liabilities | 35,297 | 18,412 | |
| 250,489 | 107,571 | ||
| Total equity and liabilities | 910,470 | 638,552 |
Equity and liabilities
for the nine months ended September 30, 2020 JOST Werke AG
| Exchange differences on translating |
||||
|---|---|---|---|---|
| in € thousands | Subscribed capital | Capital reserves | foreign operations | |
| Balance at January 1, 2020 | 14,900 | 474,653 | –10,025 | |
| Earnings after taxes | 0 | 0 | 0 | |
| Other comprehensive income | 0 | 0 | –20,068 | |
| Deferred taxes relating to other comprehensive income | 0 | 0 | 0 | |
| Total comprehensive income | 0 | 0 | –20,068 | |
| Balance as of September 30, 2020 | 14,900 | 474,653 | –30,093 | |
| Exchange differences on translating |
||||
|---|---|---|---|---|
| in € thousands | Subscribed capital | Capital reserves | foreign operations | |
| Balance at January 1, 2019 | 14,900 | 499,399 | –12,529 | |
| Profit /loss after taxes | 0 | 0 | 0 | |
| Other comprehensive income | 0 | 0 | 3,719 | |
| Deferred taxes relating to other comprehensive income | 0 | 0 | 0 | |
| Total comprehensive income | 0 | 0 | 3,719 | |
| Dividends paid | 0 | 0 | 0 | |
| Balance as of September 30, 2019 | 14,900 | 499,399 | –8,810 | |
| Other reserves | ||
|---|---|---|
| Exchange differences Remeasurements |
||
| on translating of defined benefit |
Total consolidated | |
| in € thousands Subscribed capital Capital reserves foreign operations pension plans Other reserves Retained earnings |
equity | |
| Balance at January 1, 2020 14,900 474,653 –10,025 –29,410 –103 |
–186,885 | 263,130 |
| Earnings after taxes 0 0 0 0 0 |
5,280 | 5,280 |
| Other comprehensive income 0 0 –20,068 –2,895 0 |
0 | –22,963 |
| Deferred taxes relating to other comprehensive income 0 0 0 869 0 |
0 | 869 |
| Total comprehensive income 0 0 –20,068 –2,026 0 |
5,280 | –16,814 |
| Balance as of September 30, 2020 14,900 474,653 –30,093 –31,436 –103 |
–181,605 | 246,316 |
| Other reserves | |||
|---|---|---|---|
| Remeasurements | |||
| Total consolidated | of defined benefit | ||
| equity | Retained earnings | Other reserves | pension plans |
| 251,613 | –228,765 | –103 | –21,289 |
| 34,405 | 34,405 | 0 | 0 |
| 0 –8,895 |
0 | –12,614 | |
| 0 3,784 |
0 | 3,784 | |
| 29,294 | 34,405 | 0 | –8,830 |
| –16,390 | –16,390 | 0 | 0 |
| 264,517 | –210,750 | –103 | –30,119 |
for the nine months ended September 30, 2020 JOST Werke AG
| Profit/loss before tax 4,490 41,177 4,955 11,695 Depreciation, amortization, impairment losses and reversal of impairment on noncurrent assets 42,922 36,460 14,370 12,220 Other noncash expenses –194 386 779 –495 Change in inventories 4,546 –2,738 4,030 –2,025 Change in trade receivables –19,453 313 –10,915 16,566 Change in trade payables 22,921 –5,236 20,197 –5,314 Change in other assets and liabilities 25,851 –4,921 7,477 4,767 Income tax payments –6,985 –9,063 –4,626 –3,393 Cash flow from operating activities 74,098 56,378 36,267 34,021 Payments to acquire intangible assets –3,905 –888 –1,442 –374 Proceeds from sales of property, plant, and equipment 2,332 122 101 –8 Payments to acquire property, plant, and equipment –8,305 –10,167 –3,196 –3,726 Acquisition of subsidiaries, less acquired cash and cash equivalents –245,419 0 0 0 Dividends received 0 2,813 0 1,730 Interests received 277 554 213 48 Cash flow from investing activities –255,020 –7,566 –4,324 –2,330 Interest payments –4,223 –2,192 –1,389 –1,110 Proceeds from short-term interest-bearing loans and borrowings 110,000 0 0 0 Proceeds from long-term interest-bearing loans and borrowings 120,000 0 0 0 Refinancing costs –510 0 0 0 Repayment of short-term interest-bearing loans and borrowings –42,729 –150 –42,572 –75 Dividends paid to the shareholders of the company 0 –16,390 0 0 Repayment of lease liabilities –6,138 –5,299 –1,875 –2,369 Cash flow from financing activities 176,400 –24,031 –45,836 –3,554 Net change in cash and cash equivalents –4,522 24,781 –13,893 28,137 Change in cash and cash equivalents due to exchange rate movements –2,989 714 –1,694 209 Cash and cash equivalents at January 1 / July 1 104,812 66,087 112,888 63,236 Cash and cash equivalents at September 30 97,301 91,582 97,301 91,582 |
in € thousands | 9M 2020 | 9M 2019 | Q3 2020 | Q3 2019 |
|---|---|---|---|---|---|
for the period from January 1 to September 30, 2020 JOST Werke AG
JOST is a leading global producer and supplier of safety-critical systems for the commercial vehicle industry.
The registered office of JOST Werke AG is at 2, Siemensstraße in 63263 Neu-Isenburg, Germany. The company is registered in the Commercial Register of Offenbach am Main under section B, number 50149.
As of July 20, 2017, the shares of JOST Werke AG (hereinafter also "JOST", the "group," the "company," or the "JOST Werke Group") were traded for the first time on the Frankfurt Stock Exchange. As of September 30, 2020, the majority of JOST shares were held by institutional investors.
The condensed consolidated interim financial statements of JOST Werke AG were prepared based on the going concern principle.
The condensed consolidated interim financial statements (hereinafter also "interim financial statements") as of and for the nine months ended September 30, 2020 (hereinafter also "2020 reporting period") comprise JOST Werke AG, its subsidiaries and the joint venture. These interim financial statements were prepared in accordance with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), London, that are effective as of the reporting date, and the Interpretations issued by the International Financial Reporting Interpretations Committee (IFRS IC), as adopted by the European Union (EU).
The interim financial statements were prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the group's net assets, financial position and results of operations since the last annual consolidated financial statements as of and for the fiscal year ended December 31, 2019. The interim financial statements should be read in conjunction with the annual consolidated financial statements as of and for the fiscal year ended December 31, 2019, which can be downloaded at http://ir.jost-world.com/. The new and amended International Financial Reporting Standards and Interpretations that are effective for fiscal years beginning on or after January 1, 2020 (Amendments to IAS 1 and IAS 8 - Definition of "Material"; Amendments to IFRS 3 – Definition of a Business; Revised Conceptual Framework of IFRSs; and Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform), had no effect on the reporting period or earlier periods and will probably not have a material effect on future periods.
Extensive measures have been taken at our sites to restrict and prevent the spread of the COVID-19 pandemic. These include measures to ensure social distancing, regulations for staff working from home and the introduction of short-time work in Germany. By doing this, we are complying with the recommendations and regulations issued by international, national and local authorities. The health and safety of our employees and customers is our number one priority. Infection control precautions have been taken wherever work is being carried out.
JOST provides its customers with important services and rapidly supplies them with replacement parts worldwide. By doing this, we can help to ensure that transport is still out on the road during times of crisis, particularly when it comes to carrying medication and food.
JOST Werke AG | Interim Report Q3 2020
The situation at our sites in China, South Africa, Brazil and India, which had to be closed for several weeks in Q1 and Q2, has largely returned to normal. Employees have now gone back to work and production has been resumed according to schedule. All JOST plants worldwide are currently operational and the availability of all our products is guaranteed. JOST was able to get through the first wave of the pandemic and the subsequent ramp-up of production without major incidents.
Looking ahead to the fourth quarter 2020, the Covid-19 pandemic is expected to have further economic consequences – such as those caused by lockdowns – that will influence the international trade in goods and therefore affect JOST as well. Our focus for the remainder of the year will be on maintaining the ability to supply our products and all services to our customers worldwide in this difficult environment.
The Management Board approved the condensed consolidated interim financial statements of JOST Werke AG for the period ending on September 30, 2020 for issue on November 12, 2020.
On January 31, 2020 the subsidiary Jost-Werke International Beteiligungsverwaltung GmbH acquired a 100% interest in Ålö Holding AB, a leading international manufacturer of agricultural front loaders marketed under the Quicke brand, for a purchase price of €159.2m. This acquisition concerned 14,207,973 shares with a notional value of SEK 10 per share. The main reason for the acquisition is that JOST intends to use the takeover to expand its successful business and sales model, and its industrial expertise as a producer and supplier of systems and components in the agricultural sector.
If the Ålö Group had already been included in the basis of consolidation as of January 1, 2020, the condensed consolidated income statement would have shown additional sales revenues of €14.5m. The sales revenues attributable to Ålö for the period from January 1 to September 30, 2020 would be €135.5m. For the period from January 1 to September 30, the Ålö Group would have contributed a total of €0.2m to consolidated earnings instead of €2.3m for the period from February 1 to September 30, 2020.
The following table summarizes the consideration transferred for the acquisition and the fair values of the assets identified and liabilities assumed at the acquisition date:
in € thousands
| Consideration transferred | |
|---|---|
| Payment made in cash | 159,160 |
| Contingent consideration | 0 |
| Total | 159,160 |
| in € thousands | ||
|---|---|---|
| Intangible assets | 137,809 |
|---|---|
| Property, plant, and equipment | 25,464 |
| Inventories | 49,250 |
| Trade receivables | 26,676 |
| Cash and cash equivalents | 12,318 |
| Trade payables | –23,142 |
| Interest-bearing loans and borrowings | –98,904 |
| Deferred tax liabilities | –32,037 |
| Other assets and liabilities | –17,951 |
| Net identifiable assets acquired | 79,483 |
| Plus: goodwill | 79,677 |
| Net assets acquired | 159,160 |
Significant step-ups (fair value adjustments) on intangible assets such as customer lists (€32.5m) and brand names (€48.8m) as well as tangible assets such as inventories (€9.5m) and property, plant and equipment (€2.6m) were identified and measured as part of the purchase price allocation. The acquired goodwill of €79.7m is attributable to the strong market position and high profitability of the Ålö Group and the expected synergies. This goodwill is not deductible for tax purposes.
The bank liabilities assumed in the amount of €99m were repaid by JOST on January 31, 2020.
The purchase price allocation in 2020 resulted in €3,034 thousand in depreciation of land, land rights and buildings, including buildings on third-party land, and amortization of customer lists and acquired intangible assets. There are also negative earnings effects from step-ups on inventories amounting to €6,943 thousand.
The costs of business combinations of €2,244 thousand (2019: €2,482 thousand) are presented in administrative expenses within the income statement. For further details on exceptionals, see note 12.
Should the gross margin of Ålö Holding AB exceed a certain absolute figure in fiscal year 2020, the group is obliged to pay the former owners of Ålö Holding AB up to €25m.
The group's potential payment obligations under this agreement are between €1 and €25m and will become due and payable in 2021 if this company's gross margin exceeds a certain figure.
Based on the assessment at the acquisition date, a value of zero was recognized for the contingent consideration. As of the reporting date, the assessment has not changed.
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 546,317 | 132,362 | 152,783 | –267,861 | 563,601** |
| thereof: external sales revenues* | 343,775 | 122,981 | 96,845 | 0 | 563,601 |
| thereof: internal sales revenues* | 202,542 | 9,381 | 55,938 | –267,861 | 0 |
| Adjusted EBIT*** | 22,830 | 7,794 | 13,525 | 1,962 | 46,111 |
| thereof: depreciation and amortization | 13,873 | 3,711 | 3,625 | 0 | 21,209 |
| Adjusted EBIT margin | 6.6% | 6.3% | 14.0% | 8.2% | |
| Adjusted EBITDA*** | 36,703 | 11,505 | 17,150 | 1,962 | 67,320 |
| Adjusted EBITDA margin | 10.7% | 9.4% | 17.7% | 11.9% |
* Sales by destination in the reporting period:
– Europe: €288,946 thousand
– Americas: €133,276 thousand
– Asia, Pacific and Africa: €141,379 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/ EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
To improve comparability with the previous year's figures of JOST, the following table shows the key figures of the former JOST and the acquired Ålö Group for the period up to September 30, 2020.
| Consolidated | |||
|---|---|---|---|
| in € thousands | Ålö Group | JOST (excl. Ålö) | financial statements |
| Sales revenues | 121,005 | 442,596 | 563,601 |
| Adjusted EBIT | 12,952 | 33,159 | 46,111 |
| thereof: depreciation and amortization | 3,552 | 17,657 | 21,209 |
| Adjusted EBIT margin | 10.7% | 7.5% | 8.2% |
| Adjusted EBITDA | 16,504 | 50,816 | 67,320 |
| Adjusted EBITDA margin | 13.6% | 11.5% | 11.9% |
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 557,151 | 130,168 | 134,835 | –243,071 | 579,083** |
| thereof: external sales revenues* | 343,021 | 129,285 | 106,777 | 0 | 579,083 |
| thereof: internal sales revenues* | 214,130 | 883 | 28,058 | –243,071 | 0 |
| Adjusted EBIT*** | 35,522 | 12,141 | 15,179 | 2,686 | 65,528 |
| thereof: depreciation and amortization | 11,874 | 3,010 | 2,749 | 0 | 17,633 |
| Adjusted EBIT margin | 10.4% | 9.4% | 14.2% | 11.3% | |
| Adjusted EBITDA*** | 47,396 | 15,151 | 17,928 | 2,686 | 83,161 |
| Adjusted EBITDA margin | 13.8% | 11.7% | 16.8% | 14.4% |
* Sales by destination in the reporting period:
– Europe: €299,518 thousand
– Americas: €135,457 thousand
– Asia, Pacific and Africa: €144,108 thousand
** Sales revenues in the segments show the sales revenues by origin.
*** Adjusted EBIT/ EBITDA includes share of profit or loss of investment accounted for using the equity method that is not allocated to a segment and therefore included in the reconciliation column.
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| Profit/loss after taxes | 5,280 | 34,405 |
| Income taxes | 790 | –6,772 |
| Net finance result | –7,226 | –4,463 |
| EBIT | 11,716 | 45,640 |
| D&A from PPA | –21,713 | –18,827 |
| Other effects | –12,682 | –1,061 |
| Adjusted EBIT | 46,111 | 65,528 |
| Depreciation of property, | ||
| plant and equipment | –18,752 | –16,168 |
| Amortization of intangible assets | –2,457 | –1,465 |
| Adjusted EBITDA | 67,320 | 83,161 |
The other effects are explained in more detail in note 12.
Seasonal effects during the fiscal year can result in variations in sales and resulting profit. JOST usually has higher sales and earnings in the first half-year due to the fact that major customers close their manufacturing plants for summer break at the start of the second half-year. It cannot be ruled out that the coronavirus pandemic may also trigger seasonal shifts.
The sales revenues gained as part of the acquisition of the Ålö Group are shown in note 4. When adjusted for Ålö Group sales revenues, sales revenues declined significantly across all regions, which is primarily a result of the COVID-19 pandemic but is also connected with the slowing of the commercial vehicle markets expected for 2020.
For information on the effects of the COVID-19 pandemic, please refer to the explanations in note 2.
The rise in administrative expenses compared to the previous year is associated with expenses from the acquisition of Ålö Group (€2.2m; see note 12) as well as the administrative expenses of the Ålö Group itself (€8.6m).
For the 2020 reporting period, other income amounted to €7.4m (2019 reporting period: €3.6m) and other expenses amounted to €6.6m (2019 reporting period: €3.0m).
In the 2020 reporting period as well in the 2019 reporting period, other income mainly comprises currency gains (2020 reporting period: €4.3m; 2019 reporting period€2.0m) and government grants (2020 reporting period: €0.3m; 2019 reporting period: €0.6m). The figure for the 2020 reporting period also includes income from asset disposals of €1.5m (2019 reporting period: €0.1m). Other expenses mainly compromise currency losses.
Financial income is composed of the following items:
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| Interest income | 283 | 173 |
| Realized currency gains | 3 | 79 |
| Unrealized currency gains | 1,390 | 1,456 |
| Result from measurement of derivatives | 28 | 0 |
| Other financial income | 12 | 31 |
| Total | 1,716 | 1,739 |
Financial expense is composed of the following items:
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| Interest expenses | –5,271 | –2,688 |
| thereof: interest expenses from leasing | –669 | –425 |
| Realized currency losses | –195 | –104 |
| Unrealized currency losses | –2,970 | –1,977 |
| Result from measurement of derivatives | 0 | –1,034 |
| Other financial expenses | –506 | –399 |
| Total | –8,942 | –6,202 |
Expenses of €0.3m recognized in other financial expense resulted from the additional financing agreement dated December 19, 2019 for financing the acquisition of Ålö Holding AB.
The following table shows a breakdown of income taxes:
| in € thousands | 9M 2020 | 9M 2019 |
|---|---|---|
| Current tax | –9,125 | –10,467 |
| Deferred taxes | 9,915 | 3,695 |
| Taxes on income | 790 | –6,772 |
Tax expenses are calculated based on management's best estimate of the weighted average annual income tax rate expected for the full fiscal year multiplied by the pre-tax income of the interim reporting period.
As of September 30, 2020, the number of no-par value shares (bearer shares) remained unchanged at 14,900,000.
The diluted earnings per share (in €) correspond to basic earnings per share.
| 9M 2020 | 9M 2019 | |
|---|---|---|
| Earnings after taxes (in € thousand) | 5,280 | 34,405 |
| Weighted average number of shares | 14,900,000 | 14,900,000 |
| Basic and diluted earnings per share (in €) | 0.35 | 2.31 |
The following explanation of adjusted effects serves to clarify the information in the income statement.
In the 2020 reporting period, expenses amounting to €34,395 thousand (2019: €19,888 thousand) were adjusted within earnings before interest and taxes (EBIT).
The items adjusted within EBIT relate to selling expenses arising from the purchase price allocations (PPA depreciation and amortization) in the amount of €21,713 thousand (2019: €18,827 thousand). Furthermore, cost of sales, selling expenses, research and development expenses and administrative expenses, and other income were adjusted for expenses relating to other effects totaling €12,682 thousand (2019: €1,061 thousand). The other effects mainly relate to the expenses associated with the acquisition of Ålö Holding AB in the amount of €2,244 thousand, earnings effects from the use of step-ups on inventories in the amount of €6,943 thousand as well as expenses of €2,399 thousand for an optimization project at Ålö that is expected to be completed by the end of 2020.
In the 2020 reporting period, expenses of €240 thousand (2019: €0 thousand) arising from entering into the acquisition financing agreement were adjusted within the net finance result.
Notional income taxes after adjustments were recognized in the amount of €11,738 thousand in the 2020 reporting period (2019: €18,320 thousand).
The tables below show the earnings adjusted for these effects:
| January 1 – | January 1 – | ||||
|---|---|---|---|---|---|
| September 30, | September 30, | ||||
| 2020 | Adjustments, | 2020 | |||
| in € thousands | Unadjusted | D&A from PPA | Other effects | total | Adjusted |
| Sales revenues | 563,601 | 0 | 563,601 | ||
| Cost of sales | –411,685 | 7,928 | 7,928 | –403,757 | |
| Gross profit | 151,916 | 0 | 7,928 | 7,928 | 159,844 |
| Selling expenses | –87,463 | 21,713 | 1,191 | 22,904 | –64,559 |
| Research and development expenses | –10,143 | 61 | 61 | –10,082 | |
| Administrative expenses | –45,348 | 4,956 | 4,956 | –40,392 | |
| Other income | 7,401 | –1,454 | –1,454 | 5,947 | |
| Other expenses | –6,609 | 0 | –6,609 | ||
| Share of profit or loss of equity method investments | 1,962 | 0 | 1,962 | ||
| Operating profit (EBIT) | 11,716 | 21,713 | 12,682 | 34,395 | 46,111 |
| Financial income | 1,716 | 0 | 1,716 | ||
| Financial expense | –8,942 | 240 | 240 | –8,702 | |
| Net finance result | –7,226 | 0 | 240 | 240 | –6,986 |
| Earnings before tax | 4,490 | 21,713 | 12,922 | 34,635 | 39,125 |
| Income taxes | 790 | –11,738 | |||
| Earnings after taxes | 5,280 | 27,387 | |||
| Weighted average number of shares | 14,900,000 | 14,900,000 | |||
| Basic and diluted earnings per share (in €) | 0.35 | 1.84 |
| January 1 – | January 1 – | ||||
|---|---|---|---|---|---|
| September 30, | September 30, | ||||
| 2019 | Adjustments, | 2019 | |||
| in € thousands | Unadjusted | D&A from PPA | Other effects | total | Adjusted |
| Sales revenues | 579,083 | 0 | 579,083 | ||
| Cost of sales | –428,425 | 238 | 238 | –428,187 | |
| Gross profit | 150,658 | 0 | 238 | 238 | 150,896 |
| Selling expenses | –66,772 | 18,827 | 159 | 18,986 | –47,786 |
| Research and development expenses | –10,310 | 0 | –10,310 | ||
| Administrative expenses | –31,268 | 596 | 596 | –30,672 | |
| Other income | 3,634 | 0 | 3,634 | ||
| Other expenses | –2,988 | 68 | 68 | –2,920 | |
| Share of profit or loss of equity method investments | 2,686 | 0 | 2,686 | ||
| Operating profit (EBIT) | 45,640 | 18,827 | 1,061 | 19,888 | 65,528 |
| Financial income | 1,739 | 0 | 1,739 | ||
| Financial expense | –6,202 | 0 | –6,202 | ||
| Net finance result | –4,463 | 0 | 0 | 0 | –4,463 |
| Earnings before tax | 41,177 | 18,827 | 1,061 | 19,888 | 61,065 |
| Income taxes | –6,772 | –18,320 | |||
| Earnings after taxes | 34,405 | 42,746 | |||
| Weighted average number of shares | 14,900,000 | 14,900,000 | |||
| Basic and diluted earnings per share (in €) | 2.31 | 2.87 |
The carrying amounts, fair values, categories and classes of financial assets and financial liabilities are as follows:
| in € thousands | Measurement categories in accordance with IFRS 9 |
Carrying amount 09/30/2020 |
Fair value 09/30/2020 |
Carrying amount 12/31/2019 |
Fair value 12/31/2019 |
Level |
|---|---|---|---|---|---|---|
| Assets | ||||||
| Cash and cash equivalents | FAAC | 97,301 | 97,301 | 104,812 | 104,812 | n/a |
| Trade receivables | FAAC | 132,858 | 132,858 | 89,937 | 89,937 | n/a |
| Other financial assets | FAAC | 746 | 746 | 628 | 628 | n/a |
| Total | 230,905 | 230,905 | 195,377 | 195,377 |
Cash and cash equivalents, trade receivables, and other financial assets are generally of a current nature. The fair value therefore roughly corresponds to the carrying amount. As of the reporting date, all other financial assets are measured at amortized cost (FAAC); the same applied to December 31, 2019.
| Measurement categories in accordance |
Carrying amount |
Fair value | Carrying amount |
Fair value | ||
|---|---|---|---|---|---|---|
| in € thousands | with IFRS 9 | 09/30/2020 | 09/30/2020 | 12/31/2019 | 12/31/2019 | Level |
| Liabilities | ||||||
| Trade payables | FLAC | 107,749 | 107,749 | 64,223 | 64,223 | n/a |
| Interest bearing loans and borrowings* | FLAC | 380,765 | 381,085 | 151,076 | 151,396 | 2 |
| Lease liabilities | n/ a** | 31,849 | 31,849 | 30,618 | — | n/a |
| Other financial liabilities | FLAC | 857 | 857 | 389 | 389 | n/a |
| Derivative financial liabilities | FLtPL | 1,545 | 1,545 | 1,573 | 1,573 | 2 |
| Total | 522,765 | 523,085 | 247,879 | 217,581 |
* excluding accrued financing costs (see note 16)
** within the scope of IFRS 16
Since trade payables and other liabilities have short maturities, their carrying amounts do not differ from their fair values. With the exception of derivative financial liabilities, all financial liabilities listed in the table are measured at amortized cost (FLAC). Derivative financial liabilities are measured at fair value through profit or loss (FLtPL).
Lease liabilities fall within the scope of IFRS 16 and are therefore not allocated to any of the measurement categories established under IFRS 9.
JOST uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for the assets or liabilities that are not based on observable market data (that is, unobservable inputs).
There were no transfers between the levels of the fair value hierarchy during 2020 and 2019.
The fair value of the interest-bearing loans and borrowings is determined in 2020 and 2019 considering actual interest curves and classified as level 2 of the fair value hierarchy.
The measurement of derivatives is described in note 17.
Other financial assets primarily include deposits in the amount of €611 thousand (December 31, 2019: €431 thousand) and overpayments to suppliers in the amount of €126 thousand (December 31, 2019: €197 thousand). There were no credit-impaired financial assets as of the balance sheet date. The gross carrying amount corresponds to the maximum default risk. No financial assets were known to be at risk of default as of the balance sheet date.
Pension obligations as of September 30, 2020 were €73.1m (December 31, 2019: €71.0m). The following significant actuarial assumptions were made:
| 09/30/2020 | 12/31/2019 | |
|---|---|---|
| Discount rate | 0.6% | 0.8% |
| Inflation rate/future pension increases | 2.0% | 2.0% |
| Future salary increases | 2.0% | 2.0% |
The following table shows the group's loan liabilities as of September 30, 2020:
| in € thousands | 09/30/2020 | 12/31/2019 | |
|---|---|---|---|
| Promissory note loans | 5 years, fixed | 29,000 | 29,000 |
| 5 years, variable | 86,500 | 86,500 | |
| 7 years, fixed | 20,000 | 20,000 | |
| 7 years, variable | 14,500 | 14,500 | |
| 150,000 | 150,000 | ||
| Loan | 5 years, variable | 120,000 | 0 |
| Revolving credit facility | 67,500 | 0 | |
| Other | 841 | 1,076 | |
| Interest-bearing loans | 338,341 | 151,076 | |
| Accrued financing costs | –484 | –321 | |
| Total | 337,857 | 150,755 |
In order to finance its acquisition of Ålö Holding AB, JOST in December 2019 entered into a new financing arrangement with a consortium of banks for an amount of €120m and over a term of 5 years.
JOST drew €67.5m from the available revolving facility as of September 30, 2020 (December 31, 2019: €0m). Interest payments were made in the amount of €3,391 thousand (2019 reporting period: €1,756 thousand).
The revolving credit facility has a short-term maturity and is therefore reported under current liabilities. It carries a variable interest rate depending on the EURIBOR and the group-wide leverage of JOST.
To the extent that they can be accrued, the costs incurred under the previous financing agreement are spread on a pro rata basis until mid-2025 in accordance with the effective interest method, and those incurred under the additional financing agreement dated December 19, 2019 are spread until the end of 2024.
The future interest rate volatility from the variable interest tranches of the promissory note loan is hedged via four interest rate swaps. Overall, the interest rate swaps as of September 30, 2020 had a negative fair value of €1,545 thousand (December 31, 2019: €1,573 thousand) (mark-to-market valuation), which is shown in the balance sheet under other noncurrent financial liabilities. For details regarding the maturities of loans see note 16.
As in the previous year, the group did not apply hedge accounting in accordance with IFRS 9 in the reporting period.
IAS 24 defines related parties as those persons and companies that have control or a significant influence over the other party.
The structure of JOST, including the subsidiaries and the joint venture, as of September 30, 2020, has changed compared to December 31, 2019 as a result of the acquisition of Ålö Holding AB and its subsidiaries. The following entities were acquired in this context. The list includes information on their registered office and the equity interest acquired.
Alo France S.A.S., Blanzac-Les-Matha, France, was merged with Agroma S.A.S., Blanzac-Les-Matha, France, effective June 1, 2020.
The Management Board comprises the following members, who are all related parties within the meaning of IAS 24:
Joachim Dürr, Diplom-Ingenieur, Dachau Chairman of the Management Board Chief Executive Officer
Dr.-Ing. Ralf Eichler, Diplom-Ingenieur, Dreieich Chief Operating Officer
Dr. Christian Terlinde, Diplom-Kaufmann, Dinslaken Chief Financial Officer
The Supervisory Board consists of the following persons:
Manfred Wennemer (Chair)
Prof. Dr. Bernd Gottschalk (Deputy Chair)
Natalie Hayday
Rolf Lutz
Jürgen Schaubel
Klaus Sulzbach
There were no other material changes to existing transactions or new transactions with related parties during the 2020 reporting period.
There were no material, reportable events after the reporting date.
This interim report was neither audited according to Section 317 HGB nor reviewed by auditors.
Neu-Isenburg, November 12, 2020
Joachim Dürr Dr. Ralf Eichler Dr. Christian Terlinde
This document contains forward-looking statements. These statements reflect the current views, expectations and assumptions of the management, and are based on information currently available to the management. Forward-looking statements do not guarantee the occurrence of future results and developments and are subject to known and unknown risks and uncertainties. Therefore, actual future results and developments may deviate materially from the expectations and assumptions expressed in this document due to various factors. These factors primarily include changes in the general economic and competitive environment. Furthermore, developments on financial markets and changes in currency exchange rates as well as changes in national and international laws, in particular in respect of fiscal regulation, and other factors influence the company's future results and developments. Neither the company nor any of its affiliates undertakes to update the statements contained in this notification.
This interim report has been translated into English. Both language versions are available for download on the Internet at https://ir.jost-world.com/. In case of any conflicts, the German version of the interim report shall prevail over the English translation.
JOST Werke AG Siemensstraße 2 63263 Neu-Isenburg Germany Phone: 0049-6102-295-0 Fax: 0049-6102-295-661 www.jost-world.com
Romy Acosta Investor Relations Phone: 0049-6102-295-379 Fax: 0049-6102-295-661 [email protected]
Silvester Group www.silvestergroup.com
JOST Werke AG SIEMENSSTRASSE 2 63263 NEU-ISENBURG GERMANY
PHONE: 0049-6102-295-0 FAX: 0049-6102-295-661
WWW.JOST-WORLD.COM
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