Quarterly Report • May 18, 2020
Quarterly Report
Open in ViewerOpens in native device viewer
| in €million | Q1 2020 | Q1 2019 | Change |
|---|---|---|---|
| Consolidated sales | 191.8 | 199.5 | –3.8% |
| of which: Sales, Europe | 122.8 | 123.4 | –0.5% |
| of which: Sales, North America | 44.9 | 40.4 | 11.3% |
| of which: Sales, Asia, Pacific and Africa (APA) | 24.1 | 35.7 | –32.6% |
| Adjusted EBITDA1 | 22.0 | 29.6 | –25.7% |
| Adj. EBITDA margin (%) | 11.5% | 14.9% | –3.4%-points |
| Adjusted EBIT1 | 14.3 | 23.9 | –40.3% |
| Adj. EBIT margin (%) | 7.4% | 12.0% | –4.6%-points |
| Equity ratio (%) | 26.9% | 40.4% | –13.5%-points |
| Net debt2 | 278.2 | 86.8 | 220.6% |
| Leverage9 | 2.45x | 0.86x | 186.2% |
| Capital expenditures4 | 4.1 | 3.3 | 25.7% |
| ROCE (%)5,9 | 12.0% | 18.2% | –6.2%-points |
| Cash Conversion rate (%)6 | 81.4% | 89.0% | –7.6%-points |
| Earnings after taxes | –4.1 | 14.2 | –128.9% |
| Earnings per share (in €) | –0.28 | 0.95 | –129.5% |
| Adjusted earnings after taxes7 | 5.4 | 16.1 | –66.5% |
| Adjusted earnings per share (in €)8 | 0.36 | 1.08 | –66.7% |
1 Adjusted for PPA effects and exceptionals
2 Net debt = interest-bearing capital (without refinancing costs) - liquid assets
3 Leverage = net debt / adjusted EBITDA, last 12 months
4 Gross presentation (capex; without taking into account divestments)
5 LTM adj. EBIT/ interest bearing capital employed; interest bearing capital: equity + financial liabilities (excl. refinancing costs) - liquid assets + provisions for pensions
6 (Adj. EBITDA - Capex) adj. EBITDA
7 Earnings after taxes adjusted for exceptionals in accordance with note 7
8 Adjusted earnings after taxes/14,900,000 (number of shares as of March 31, 2018)
9 LTM figures for comparison purposes also include figures for Ålö before the January 31, 2020 acquisition date
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 quarter of 2020
Coronavirus pandemic triggering global recession in 2020: The economic situation has changed dramatically in the first few months of 2020. At the end of December 2019, the first cases of a new respiratory disease caused by a novel virus in the coronavirus family (SARS-CoV-2 virus) were recorded in the Chinese province of Hubei. The first infections outside of China were already being reported at the end of January. The rapid spread of this novel coronavirus around the world, together with the associated countermeasures introduced to reduce the rate of infection, slowed down the global economy significantly in the first quarter of 2020. While experts were still forecasting economic growth at the start of the year, all economic experts now expect the global economy to contract sharply in 2020.
The International Monetary Fund (IMF) now anticipates a 3.0% decline in economic output in 2020. Global trade is expected to fall by 11.0%, due in particular to dwindling demand for products and services, interruptions in trading activity and disruption to production and supply chains resulting from national quarantines and border controls. According to the IMF, economic output in Europe is likely to drop by 7.5% in 2020 compared to the previous year. The IMF anticipates a 5.9% decline in the USA compared to 2019. Only in China is the economy expected to grow by 1.2%, 4.8 percentage points weaker than forecast as recently as the start of the year. This weak performance of the Chinese economy is expected to determine the economic momentum of the Asian region as a whole. As a result, the IMF anticipates 1.0% year-overyear growth in Asia's emerging and developing markets. According to the IMF's expectations, the effects of the coronavirus pandemic will halt Latin America's economic recovery and reduce the region's gross domestic product by 5.2% compared to the previous year.
Sharp decline expected in global truck market: Even before the outbreak of the pandemic, market experts were predicting that global heavy truck production would decline in 2020. After making substantial investments in previous years, fleet operators in many regions were coming to a natural break in the investment cycle. The deteriorating economic outlook and interruptions to the production and supply chains of many OEMs will exacerbate this negative development further. By the end of the first quarter of 2020, almost all OEMs worldwide had announced production shutdowns lasting up to four weeks.
LMC Automotive currently anticipates a decline in global heavy truck production of 32.0% in 2020 compared to 2019. Truck production in Europe is expected to shrink by 39.6% compared to the previous year. In the USA, the institute anticipates a 53.1% year-over-year reduction. In Asia, Pacific and Africa, the market for heavy trucks is expected to decrease by 24.2% in 2020. In Latin America, the effects of the pandemic will also lead to a 37.4% contraction in the truck market.
Decline in trailer production in 2020 accelerates: After the sharp decline in the trailer market in the 2019 fiscal year, forecasting institute Clear Consulting expected a certain degree of stabilization in fiscal year 2020. However, the spread of the pandemic will leave a significant mark on the trailer market. Clear Consulting currently expects European trailer production figures to fall by around 22% compared to the previous year. Market research firm FTR, which specializes in North America, anticipates a 53% contraction in the North American trailer market in 2020. The trailer market in Asia, Pacific and Africa is also expected to record a double-digit percentage decline as a result of the pandemic and the associated economic impact.
Market for agricultural tractors also expected to shrink: As demand for food is not impacted by the pandemic, the agricultural sector is likely to be significantly less affected by the pandemic than the truck and trailer market. Nevertheless, economic uncertainty is expected to dampen farmers' willingness to invest. In addition, several OEMs in this sector have had to temporarily close their production plants due to quarantine measures and supply chain disruptions. Overall, experts expect the market for agricultural tractors in Europe and North America to record a low double-digit percentage decline compared to the previous year.
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 all significant markets. The company develops, produces and markets its agricultural applications under the internationally renowned brand Quicke. The acquisition will 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 the JOST Group effective February 1, 2020. Comparability with the previous year's key figures is therefore limited.
| Organic | ||||||
|---|---|---|---|---|---|---|
| in € thousands | Q1 2020 | development | FX translation | Takeover effects | yoy change | Q1 2019 |
| Europe | 122,796 | –19.4% | 0.0% | 18.9% | –0.5% | 123,379 |
| North America | 44,923 | –9.0% | 2.7% | 17.6% | 11.3% | 40,372 |
| APA | 24,086 | –32.0% | –1.8% | 1.2% | –32.6% | 35,723 |
| Total | 191,805 | –19.5% | 0.3% | 15.4% | –3.8% | 199,474 |
The outbreak of the coronavirus pandemic had a severe negative impact on JOST's performance in the first quarter of 2020. Demand in Asia, Pacific and Africa particularly suffered, as the first cases of the new virus were recorded in Wuhan, China. As the disease spread and the infection rate and number of deaths rose dramatically, the Chinese government imposed nationwide restrictions on movement that practically brought the Chinese economy to a standstill from the end of January to the end of February. In Wuhan, where most cases of illness were recorded, the restrictions on movement applied until March 11, 2020. As our Chinese production plant is located in Wuhan, the effect of these restrictions on JOST's business was particularly dramatic. The acquisition of the Ålö Group, on the other hand, had a positive impact on business performance.
Consolidated sales fell by 3.8% in the first quarter of 2020 to €191.8m (Q1 2019: €199.5m). This includes a positive effect of 15.4% or €30.8m arising from the acquisition of the Ålö Group, which has been consolidated since February 1, 2020. Organic consolidated sales decreased by 19.5% to €161.0m.
In Europe, sales fell by 0.5% to €122.8m (Q1 2019: €123.4m). Ålö made a positive contribution of 18.9% or €23.3m. Excluding the effects of the acquisition, organic sales in Europe fell by 19.4% to €99.5m. The European truck and trailer markets had already reached the turning point of their growth cycle in 2019 and were expected to decline year-over-year in 2020. The effects of the pandemic have placed an additional strain on already weak demand. Interruptions to the supply chain caused by plant closures in China and the accelerated spread of the virus in Europe in February and March 2020 forced many truck manufacturers to close their European production plants at the end of March. This had an additional adverse impact on demand. By contrast, the trailer market appeared to be slightly more robust, even though the anticipated decline in demand was also apparent here. On the other hand, the strong aftermarket business had a positive impact that helped to soften the downturn in the original equipment business. The agricultural front loader business, which became an important pillar of JOST's business as a result of the acquisition of Ålö Group, was not as heavily affected by the initial impact of the pandemic in the first quarter of 2020 and helped to stabilize European sales.
JOST succeeded in recording growth in North America once again thanks to Ålö. Sales rose by 11.3% in the first quarter of 2020 to €44.9m (Q1 2019: €40.4m). The positive effect of the Ålö acquisition accounted for 17.6% or €7.1m. Organic growth fell by just 9.0% to €37.8m, thus significantly outperforming the truck and trailer market. JOST benefited from gaining additional market share in the region, which led to a sharp rise in the replacement parts business. Furthermore, the pandemic only spread later in North America, which meant that many of the countermeasures aimed at slowing the rate of infection were only introduced at the start of April and thus had no impact on the first quarter.
Our business in Asia, Pacific and Africa (APA) was most strongly affected by the negative impact of the coronavirus pandemic in the first quarter of 2020. The restrictions on movement in China, particularly in Wuhan, led to an almost total loss of sales in this country in February and March. At the same time, demand in many Asian countries was adversely impacted by the situation in China. The exceptionally severe bush fires in Australia also had a negative effect on demand in the Pacific region at the start of 2020. On the whole, sales in APA dropped by 32.6% to €24.1m in the first quarter of 2020 (Q1 2019: €35.7m). As Ålö´s sales presence in APA is not as strong yet, the acquisition made an almost negligible contribution to regional sales of 1.2% or €0.4m.
In the first three months of the year, the cost of sales fell (–3.5%) in line with sales (–3.8%), demonstrating the flexibility of our business model. This development was also supported by the increased share of the replacement parts business. As a result, the gross margin remained stable compared to the prior-year quarter at 25.5% (Q1 2019: 25.7%).
By contrast, factors such as exceptionals relating to the acquisition of Ålö led to a sharp year-over-year rise in operating expenses. In addition, our ability to adjust personnel expenses in administration and sales to reflect falling business volumes was severely limited in APA, as companies in China were required to pay all of their employees' salaries in full during the quarantine period even though they were not working. The great uncertainty in the capital markets also caused significant currency fluctuations that had an additional negative impact on operating expenses. Overall, operating expenses rose by €12.3m yearover-year, causing earnings before interest and taxes (EBIT) to fall by €14.8m to €2.4m (Q1 2019: €17.2m).
EBIT adjusted for exceptionals fell by €9.6m to €14.3m (Q1 2019: €23.9m). The adjusted EBIT margin was 7.4% (Q1 2019: 12.0%).
In the first quarter of 2020, EBIT was adjusted for expenses of €11.8m overall (Q1 2019: €6.7m). EBIT adjustments mainly concerned nonoperating exceptionals arising from purchase price allocation in the amount of €8.2m (Q1 2019: €6.3m). This contains €1.7m from stepups on inventories. The year-over-year increase is exclusively attributable to effects in connection with the purchase price allocation for Ålö. 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. The remaining €1.3m are one-off costs from an optimization project at Ålö, which will be completed by the end of 2020. The following table shows a summary of adjustments made:
| in € thousands | Q1 2020 | Q1 2019 | % yoy |
|---|---|---|---|
| Sales revenues | 191,805 | 199,474 | –3.8% |
| Cost of sales | –142,888 | –148,133 | |
| Gross profit | 48,917 | 51,341 | –4.7% |
| Operating expenses / income | –46,481 | –34,146 | |
| Operating profit (EBIT) | 2,436 | 17,195 | –85.8% |
| Net finance result | –6,765 | –808 | |
| Earnings before taxes | –4,329 | 16,387 | –126.4% |
| Income taxes | 216 | –2,160 | |
| Earnings after taxes | –4,113 | 14,227 | –128.9% |
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| EBIT | 2,436 | 17,195 |
| PPA depreciation | –579 | –555 |
| PPA amortization | –5,962 | –5,722 |
| Other | –5,280 | –404 |
| Adjusted EBIT | 14,257 | 23,876 |
| Depreciation | –6,203 | –5,311 |
| Amortization | –1,573 | –460 |
| Adjusted EBITDA | 22,033 | 29,647 |
The net finance result deteriorated by €6.0m to €–6.8m compared to the previous year (Q1 2019: €–0.8m). The main reason for this negative development was non-cash effects totaling €5.5m from the valuation of foreign currency loans. These unrealized currency losses primarily arose from the weakening of the Swedish krona and British pound against the euro as of the March 31, 2020 reporting date. The increase in interest expenses due to the acquisition only amounted to €0.3m and hardly impacted the net finance result. Total interest expense in the first quarter of 2020 came to €1.4m.
The high finance expenses led to earnings before taxes of €–4.3m (Q1 2019: €16.4m). In the first quarter of 2020, earnings after taxes therefore decreased to €–4.1m (Q1 2019: €14.2m). Earnings per share amounted to EUR –0.28 (Q1 2019: EUR 0.95).
Adjusted for exceptionals, earnings after taxes in the first quarter of 2020 fell to €5.4m (Q1 2019: €16.1m) and earnings per share to €0.36 (Q1 2019: €1.08). No adjustments were made for effects of the coronavirus pandemic.
| Europe | North America | Asia, Pacific and Africa |
Reconciliation | Consolidated financial statements |
|||
|---|---|---|---|---|---|---|---|
| JOST | |||||||
| in € thousands | JOST | (excl. Ålö) | Ålö | ||||
| Sales revenues* | 201,586 | 47,604 | 35,716 | –93,101 | 191,805 | 160,974 | 30,831 |
| thereof: external sales revenues* | 122,796 | 44,923 | 24,086 | 0 | 191,805 | 160,974 | 30,831 |
| thereof: internal sales revenues* | 78,790 | 2,681 | 11,630 | –93,101 | 0 | 0 | 0 |
| Adjusted EBIT*** | 10,083 | 3,282 | 259 | 633 | 14,257 | 11,579 | 2,678 |
| thereof: depreciation and amortization | 5,279 | 1,335 | 1,162 | 0 | 7,776 | 6,328 | 1,448 |
| Adjusted EBIT margin | 8.2% | 7.3% | 1.1% | 7.4% | 7.2% | 8.7% | |
| Adjusted EBITDA*** | 15,362 | 4,617 | 1,421 | 633 | 22,033 | 17,907 | 4,126 |
| Adjusted EBITDA margin | 12.5% | 10.3% | 5.9% | 11.5% | 11.1% | 13.4% |
* Sales by destination in the reporting period:
– Europe: €105,749 thousand
– Americas: €47,550 thousand
– Asia, Pacific and Africa: €38,506 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.
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 203,570 | 40,678 | 45,517 | –90,291 | 199,474 ** |
| thereof: external sales revenues* | 123,379 | 40,372 | 35,723 | 0 | 199,474 |
| thereof: internal sales revenues* | 80,191 | 306 | 9,794 | –90,291 | 0 |
| Adjusted EBIT*** | 14,862 | 3,253 | 4,918 | 843 | 23,876 |
| thereof: depreciation and amortization | 3,902 | 979 | 890 | 0 | 5,771 |
| Adjusted EBIT margin | 12.0% | 8.1% | 13.8% | 12.0% | |
| Adjusted EBITDA*** | 18,764 | 4,232 | 5,808 | 843 | 29,647 |
| Adjusted EBITDA margin | 15.2% | 10.5% | 16.3% | 14.9% |
* Sales by destination in the reporting period:
– Europe: €85,773 thousand
– Americas: €38,853 thousand
– Asia, Pacific and Africa:: €36,348 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 in the European truck and trailer markets was further intensified by the closure of our truck customers' plants at the end of March as a result of the coronavirus pandemic. In Europe, this caused organic sales to drop by 19.4% to €99.5m (Q1 2019: €123.4m). Earnings were impacted by personnel expenses and higher logistics costs in particular. JOST was forced to temporarily rearrange its international supply chain as a result of the pandemic and the associated shutdown of all production activities in China. The Group was forced to accept extra cargo charges and find new suppliers who could only deliver at higher costs.
In contrast, the acquisition of Ålö effective February 1, 2020, had a particularly positive impact on segment earnings in Europe. The market for agricultural front loaders was not as significantly affected by the pandemic as the truck and trailer market in the first quarter of 2020. Ålö reported sales of €23.3m in Europe in February and March 2020 and lifted the operating result considerably.
Overall, JOST's adjusted EBIT in Europe came to €10.1m (Q1 2019: €14.9m) with an adjusted EBIT margin of 8.2% (Q1 2019: 12.0%).
In North America, JOST's sales excluding takeover effects fell by 6.3% to €37.8m (Q1 2019: €40.4m), which was primarily due to the expected cyclical decline in the truck and trailer markets. Due to the market share acquired in recent years, the share of the aftermarket business rose strongly and was able to offset some of the decline in sales from OEM customers. This development led to an improvement in the margin compared to the previous year, as replacement parts margins are comparatively higher.
Ålö generated sales of €7.1m in North America in February and March. However, earnings in this region were impacted to some extent by supply difficulties caused by the temporary closure of the Ålö's production plant in China as a result of the coronavirus quarantine imposed. In addition, the planned production plant relocation from Telford, Tennessee to Simpsonville, South Carolina, also adversely impacted earnings and reduced operating margins for this segment.
Overall, JOST's adjusted EBIT in North America was stable year-overyear at €3.3m (Q1 2019: €3.3m). The adjusted EBIT margin was 7.3% (Q1 2019: 8.1%).
The APA segment was particularly hard hit by the outbreak of the coronavirus pandemic in the first quarter of 2020. JOST was required to close its Chinese production plant in Wuhan, Hubei province, from the end of January to mid-March 2020. All of our Chinese customers were also forced to close their production plants, even though those outside the Hubei province were able to slowly ramp up production again at the end of February. As a result, sales in APA excluding the effects of the Ålö acquisition decreased by 33.8% to €23.7m (Q1 2019: €35.7m).
Adjusting our supply chain at short notice enabled us to serve other countries in the region to ensure that all customers outside China could be supplied and could continue producing. Adjusted EBIT was adversely impacted by the plant closure in China and additional logistics costs for maintaining the supply chain in the APA region. At the same time, personnel expenses remained high, as the Group was required to continue paying the salaries of all employees in full during quarantine. JOST also had to close its production plants in India and South Africa effective March 23, 2020, due to the quarantine measures ordered by the authorities. We were able to cover our operating costs despite these difficulties.
Ålö's production in Ningbo, China, was also affected by the quarantine measures. However, as the plant is located outside the Hubei province, it was able to restart production as early as the end of February. The plant in Ningbo primarily manufactures products for distribution in North America but also for Europe. At present, Ålö's sales activities in APA are mainly limited to the Pacific region with only relatively low sales. Ålö's sales in this region thus amounted to €0.4m.
Overall, JOST's adjusted EBIT in APA fell to €0.3m in the first quarter of 2020 (Q1 2019: €4.9m) and the adjusted EBIT dropped to 1.1% (Q1 2019: 13.8%).
| in € thousands Noncurrent assets |
03/31/2020 529,548 |
12/31/2019 313,477 |
in € thousands Equity |
03/31/2020 251,879 |
12/31/2019 263,130 |
|---|---|---|---|---|---|
| Current assets | 407,947 | 325,075 | Noncurrent liabilities | 408,512 | 267,851 |
| Current liabilities | 277,104 | 107,571 | |||
| 937,495 | 638,552 | 937,495 | 638,552 |
In the first quarter of 2020, the equity of JOST Werke AG fell by 4 .3% to €251.9m (December 31, 2019: €263.1m). The equity ratio decreased to 26.9% (December 31, 2019: 41.2%). The main reason for this development 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 by €140.7m to €408.5m (December 31, 2019: €267.9m). JOST also drew €110.0m from the available revolving facility as of March 31, 2020. Around €90m of this figure was used to finance the acquisition of Ålö. The remainder was drawn at the end of March as a precaution to counteract potential liquidity shortages as a result of the coronavirus pandemic. JOST repaid the bank liabilities it assumed from Ålö totaling €98.9m on January 31, 2020, also using around €50m in existing liquidity in the process.
The Group's current and noncurrent assets also increased as a result of the acquisition. As part of the purchase price allocation, significant intangible assets such as customer lists (€32.5m) and brand names (€48.8m) 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 financial statements.
The increase in property, plant and equipment by €18.7m to €128.4m (December 31, 2019: €109.7m) is largely due to the initial consolidation of Ålö. Overall, noncurrent assets rose by €216,0m to €529,5m in the first quarter of 2020 (December 31, 2019: €313.5m).
The €44.1m increase in inventories to €152.3m (December 31, 2019: €108.2m) was primarily attributable to the initial consolidation of Ålö and includes a step-up of Ålö's inventories totaling €7.8m resulting from the purchase price allocation. In addition, the short-term disruptions to the supply chain caused by the spread of the pandemic led to an additional rise in inventories. The increase was also 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 €40.3m increase in trade receivables to €130.2m as of March 31, 2020 (December 31, 2019: €89.9m). Trade payables rose by €41.4m to €105.6m (December 31, 2019: €64.2m). As a result, working capital increased by 32.1% to €176.9m in the first quarter of 2020 (December 31, 2019: €133.9m).
By contrast, working capital rose by only 6.7% compared with the prior-year quarter (Q1 2019: €165.8m), mainly due to the consolidation of Ålö. Working capital as a percentage of last-twelve-months sales improved to 20.0% (Q1 2019: 21.7%). To improve comparability, Ålö's sales of the last twelve months have been taken into account in this calculation.
Liquid assets amounted to €102.8m as of March 31, 2020 (December 31, 2019: €104.8m) and remained almost unchanged compared to December 31, 2019, despite the use of cash for the acquisition of Ålö. However, net debt rose to €278.2m (December 31, 2019: €46.3m) due to the acquisition. As a result, the ratio of net debt to adjusted EBITDA (last twelve months) rose to 2.45x as of March 31, 2020 (December 31, 2019: 0.46x).
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Cash flow from operating activities | 22,210 | 2,523 |
| thereof change in net working capital | –5,708 | –23,623 |
| Cash flow from investing activities | –249,427 | –3,160 |
| Cash flow from financing activities | 227,096 | –1,991 |
| Net change in cash and cash equivalents | –121 | –2,628 |
| Change in cash and cash equivalents | ||
| due to exchange rate movements | –1,852 | 1,080 |
| Cash and cash equivalents at January 1 | 104,812 | 66,087 |
| Cash and cash equivalents at March 31 | 102,839 | 64,539 |
Cash flow from operating activities increased to €+22.2m in the first quarter of 2020, driven primarily by the year-over-year improvement in working capital (Q1 2019: €2.5m).
As a result of the acquisition of Ålö effective January 31, 2020, cash flow from investing activities in the first quarter of 2020 was €–249.4m (Q1 2019: €–3.2m). Investments in property, plant and equipment increased only slightly year-over-year to €–3.3m (Q1 2019: €–3.0m).
Cash flow from financing activities 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 (€+110.0m), it rose to €+227.1m in the reporting period (Q1 2019: €–2.0m).
Overall, liquid assets rose to €102.8m at the end of the first quarter of 2020 (Q1 2019: €68.4m).
The risk situation of the JOST Group 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, it is not possible to reliably predict the consequences of the epidemic for the future development of both individual economies and the global economy. Considerable uncertainties are bringing turbulence to the commodity, currency and capital markets that will have a negative impact on our business.
JOST is affected by the consequences of the pandemic in all areas. 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. As a result, the guidance published in the 2019 Annual Report will not be met. Nevertheless, JOST's solid financial position and healthy profitability mean it is very well positioned to manage the current crisis.
Overall, the risks identified do not influence our 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 have reacted by temporarily closing their plants or reducing their production programs. National quarantine measures are putting additional pressures on the production of our customers and suppliers. Several of our sites have also had to close, in part due to national regulations.
The assumptions underlying our forecasts in the 2019 Annual Report no longer apply, as it is currently expected that the spread of the coronavirus pandemic will lead to a significant deterioration in the global economic situation in 2020.
As a result of the pandemic's rapid spread around the world, the associated crisis measures and the their significant impact on the economy, it is not currently possible to provide a reliable assessment of the course of business development for the 2020 fiscal year.
In view of these circumstances, the Management Board has decided to propose to the General Meeting that no dividend be paid in 2020. The originally intended proposal of a EUR 0.80 dividend per share is no longer appropriate given the dramatic deterioration of the economy. The Supervisory Board concurs with the new proposal of the Management Board regarding the appropriation of net retained profit. The General Meeting will vote on the proposal on July 1, 2020.
JOST currently expects the second quarter of 2020 to be most strongly affected by the economic impact of the pandemic and believes that its figures will be well below both those of the previous year and those of the first quarter of 2020. At present, an economic recovery can only be anticipated from the third quarter of 2020 onwards, even though it is unclear whether this will happen at this point. The Management Board will provide a more precise guidance for the entire 2020 fiscal year as soon as it has sufficiently reliable insights into the expected course of business.
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, May 14, 2020
for the three months ended March 31, 2020 Neu-Isenburg, Germany
for the three months ended March 31, 2020 JOST Werke AG
| in € thousands | Notes | Q1 2020 | Q1 2019 |
|---|---|---|---|
| Sales revenues | (6) | 191,805 | 199,474 |
| Cost of sales | –142,888 | –148,133 | |
| Gross profit | 48,917 | 51,341 | |
| Selling expenses | –26,608 | –21,991 | |
| thereof: depreciation and amortization of assets | –7,736 | –6,497 | |
| thereof: depreciation of right-of-use assets from leases | –468 | –529 | |
| Research and development expenses | (7), (12) | –3,689 | –3,188 |
| Administrative expenses | (8) | –16,556 | –10,399 |
| Other income | (8) | 2,513 | 1,440 |
| Other expenses | –2,774 | –851 | |
| Share of profit or loss of equity method investments | 633 | 843 | |
| Operating profit (EBIT) | 2,436 | 17,195 | |
| Financial income | (9) | 464 | 924 |
| Financial expense | (9) | –7,229 | –1,732 |
| Net finance result | –6,765 | –808 | |
| Earnings before tax | –4,329 | 16,387 | |
| Income taxes | (10) | 216 | –2,160 |
| Earnings after taxes | –4,113 | 14,227 | |
| Weighted average number of shares | 14,900,000 | 14,900,000 | |
| Basic and diluted earnings per share (in €) | (11) | –0.28 | 0.95 |
for the three months ended March 31, 2020 JOST Werke AG
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Earnings after taxes | –4,113 | 14,227 |
| Items that may be reclassified to profit or loss | ||
| in subsequent periods | ||
| Exchange differences on translating foreign operations | –12,971 | 4,017 |
| Items that will not be reclassified to profit or loss | ||
| Remeasurements of defined benefit pension plans | 8,333 | –6,229 |
| Deferred taxes relating to other comprehensive income | –2,500 | 1,869 |
| Other comprehensive income | –7,138 | –343 |
| Total comprehensive income | –11,251 | 13,884 |
as of March 31, 2020 JOST Werke AG
| Assets | |||
|---|---|---|---|
| in € thousands | Notes | 03/31/2020 | 12/31/2019 |
| Noncurrent assets | |||
| Goodwill | (3) | 76,699 | 0 |
| Other intangible assets | (3) | 307,987 | 184,233 |
| Property, plant, and equipment | 128,411 | 109,716 | |
| Investments accounted for using the equity method | 9,175 | 10,851 | |
| Deferred tax assets | 5,820 | 7,348 | |
| Other noncurrent financial assets | (13), (14) | 157 | 0 |
| Other noncurrent assets | 1,299 | 1,329 | |
| 529,548 | 313,477 | ||
| Current assets | |||
| Inventories | 152,301 | 108,173 | |
| Trade receivables | (13) | 130,206 | 89,937 |
| Receivables from income taxes | 4,360 | 4,799 | |
| Other current financial assets | (13), (14) | 380 | 628 |
| Other current assets | 17,861 | 16,726 | |
| Cash and cash equivalents | 102,839 | 104,812 | |
| 407,947 | 325,075 | ||
| Total assets | 937,495 | 638,552 |
| in € thousands | Notes | 03/31/2020 | 12/31/2019 |
|---|---|---|---|
| Equity | |||
| Subscribed capital | 14,900 | 14,900 | |
| Capital reserves | 474,653 | 474,653 | |
| Other reserves | –46,676 | –39,538 | |
| Retained earnings | –190,998 | –186,885 | |
| 251,879 | 263,130 | ||
| Noncurrent liabilities | |||
| Pension obligations | (15) | 60,618 | 69,098 |
| Other provisions | 3,166 | 2,405 | |
| Interest-bearing loans and borrowings | (16) | 270,131 | 150,444 |
| Deferred tax liabilities | 45,359 | 16,661 | |
| Other noncurrent financial liabilities | (13) | 24,549 | 25,161 |
| Other noncurrent liabilities | 4,689 | 4,082 | |
| 408,512 | 267,851 | ||
| Current liabilities | |||
| Pension obligations | (15) | 1,897 | 1,897 |
| Other provisions | 10,886 | 7,331 | |
| Interest-bearing loans and borrowings | (16) | 110,309 | 311 |
| Trade payables | 105,571 | 64,223 | |
| Liabilities from income taxes | 5,044 | 3,407 | |
| Contract liabilities | 3,806 | 4,571 | |
| Other current financial liabilities | (13), (17) | 8,569 | 7,419 |
| Other current liabilities | 31,022 | 18,412 | |
| 277,104 | 107,571 | ||
Total equity and liabilities 937,495 638,552
for the three months ended March 31, 2020 JOST Werke AG
14
| in € thousands | Subscribed capital | Capital reserves | Retained earnings | |
|---|---|---|---|---|
| Balance at January 1, 2020 | 14,900 | 474,653 | –186,885 | |
| Earnings after taxes | 0 | 0 | –4,113 | |
| Other comprehensive income | 0 | 0 | 0 | |
| Deferred taxes relating to other comprehensive income | 0 | 0 | 0 | |
| Total comprehensive income | 0 | 0 | –4,113 | |
| Balance as of March 30, 2020 | 14,900 | 474,653 | –190,998 |
Condensed Consolidated Statement of Changes in Equity for the three months ended March 31, 2019
| in € thousands | Subscribed capital | Capital reserves | Retained earnings | |
|---|---|---|---|---|
| Balance at January 1, 2019 | 14,900 | 499,399 | –228,765 | |
| Earnings after taxes | 0 | 0 | 14,227 | |
| Other comprehensive income | 0 | 0 | 0 | |
| Deferred taxes relating to other comprehensive income | 0 | 0 | 0 | |
| Total comprehensive income | 0 | 0 | 14,227 | |
| Balance as of March 30, 2019 | 14,900 | 499,399 | –214,538 | |
| Other reserves | ||||
|---|---|---|---|---|
| Exchange differences | Remeasurements | |||
| on translating | of defined benefit | Total consolidated | ||
| Subscribed capital Capital reserves Retained earnings |
foreign operations | pension plans | Other reserves | equity |
| 14,900 474,653 –186,885 |
–10,025 | –29,410 | –103 | 263,130 |
| 0 0 –4,113 |
0 | 0 | 0 | –4,113 |
| 0 0 0 |
–12,971 | 8,333 | 0 | –4,638 |
| 0 0 0 |
0 | –2,500 | 0 | –2,500 |
| 0 0 –4,113 |
–12,971 | 5,833 | 0 | –11,251 |
| 14,900 474,653 –190,998 |
–22,996 | –23,577 | –103 | 251,879 |
| Other reserves | |||
|---|---|---|---|
| Remeasurements | Exchange differences | ||
| Total consolidated | of defined benefit | on translating | |
| equity | Other reserves | pension plans | foreign operations |
| 251,613 | –103 | –21,289 | –12,529 |
| 14,227 | 0 | 0 | 0 |
| –2,212 | 0 | –6,229 | 4,017 |
| 1,869 | 0 | 1,869 | 0 |
| 13,884 | 0 | –4,360 | 4,017 |
| 265,497 | –103 | –25,649 | –8,512 |
for the three months ended March 31, 2020 JOST Werke AG
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Earnings before tax | –4,329 | 16,387 |
| Depreciation, amortization, impairment losses and | ||
| reversal of impairment on noncurrent assets | 14,317 | 12,048 |
| Other noncash expenses and income | 6,292 | –545 |
| Change in inventories | –9,820 | 186 |
| Change in trade receivables | –16,112 | –18,756 |
| Change in trade payables | 20,224 | –5,053 |
| Change in other assets and liabilities | 11,005 | –301 |
| Income tax payments | 633 | –1,443 |
| Cash flow from operating activities | 22,210 | 2,523 |
| Payments to acquire intangible assets | –809 | –268 |
| Proceeds from sales of property, plant, and equipment | 45 | 33 |
| Payments to acquire property, plant, and equipment | –3,293 | –2,995 |
| Acquisition of subsidiaries, less acquired cash and cash equivalents | –245,419 | 0 |
| Interests received | 49 | 70 |
| Cash flow from investing activities | –249,427 | –3,160 |
| Interest payments | –390 | –294 |
| Proceeds from short-term interest-bearing loans and borrowings | 110,000 | 0 |
| Proceeds from long-term interest-bearing loans and borrowings | 120,000 | 0 |
| Acquisition financing costs | –510 | 0 |
| Repayment of short-term interest-bearing loans and borrowings | –78 | 0 |
| Repayment of lease liabilities | –1,926 | –1,697 |
| Cash flow from financing activities | 227,096 | –1,991 |
| Net change in cash and cash equivalents | –121 | –2,628 |
| Change in cash and cash equivalents due to exchange rate movements | –1,852 | 1,080 |
| Cash and cash equivalents at January 1 | 104,812 | 66,087 |
| Cash and cash equivalents at March 31 | 102,839 | 64,539 |
for the period from January 1 to March 31, 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 March 31, 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 three months ended March 31, 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/.
We have taken extensive measures at our sites to restrict and prevent the spread of the COVID-19 pandemic. These range all the way from the introduction of short-time work for some of our staff in Germany to temporary site shutdowns. 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.
The JOST Werke Group provides its global customers with important services and rapidly supplies them with replacement parts. By doing this, we can ensure that transport is still out on the road during times of crisis, particularly when it comes to carrying medication and food.
The situation at our site in Wuhan has largely returned to normal after a temporary closure. Employees have now gone back to work and the plant start-up is running according to schedule. The plants in India, South Africa and Brazil are also affected by plant closures.
The Management Board approved the condensed consolidated interim financial statements of JOST Werke AG for the period ended March 31, 2020 for issue on May 14, 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.
The Ålö Group reports pro-forma sales revenues of €45.0m and proforma earnings of €–7.1m for the first quarter of 2020.
The following table summarizes the consideration transferred for the acquisition and the preliminary amounts 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 |
| Other assets and liabilities | –49,988 |
| 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 resulted in €273 thousand in depreciation of land, land rights and buildings, including buildings on thirdparty land, and amortization of customer lists and acquired intangible assets. There are also earnings effects from step-ups on inventories amounting to €1,721 thousand.
The costs of business combinations up to now of €2,035 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 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. Should this assessment be proven wrong, the corresponding amounts will be recognized in profit or loss.
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 201,586 | 47,604 | 35,716 | –93,101 | 191,805 ** |
| thereof: external sales revenues* | 122,796 | 44,923 | 24,086 | 0 | 191,805 |
| thereof: internal sales revenues* | 78,790 | 2,681 | 11,630 | –93,101 | 0 |
| Adjusted EBIT*** | 10,083 | 3,282 | 259 | 633 | 14,257 |
| thereof: depreciation and amortization | 5,279 | 1,335 | 1,162 | 0 | 7,776 |
| Adjusted EBIT margin | 8.2% | 7.3% | 1.1% | 7.4% | |
| Adjusted EBITDA*** | 15,362 | 4,617 | 1,421 | 633 | 22,033 |
| Adjusted EBITDA margin | 12.5% | 10.3% | 5.9% | 11.5% | |
* Sales by destination in the reporting period:
– Europe: 105,749 thousand
– Americas: 47,550 thousand
– Asia, Pacific and Africa: 38,506 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.
| Consolidated | |||
|---|---|---|---|
| in € thousands | Ålö | JOST excluding Ålö | financial statements |
| Sales revenues | 30,831 | 160,974 | 191,805 |
| Adjusted EBIT | 2,678 | 11,579 | 14,257 |
| thereof: depreciation and amortization | 1,448 | 6,328 | 7,776 |
| Adjusted EBIT margin | 8.7% | 7.2% | 7.4% |
| Adjusted EBITDA | 4,126 | 17,907 | 22,033 |
| Adjusted EBITDA margin | 13.4% | 11.1% | 11.5% |
| Asia, Pacific | Consolidated | ||||
|---|---|---|---|---|---|
| in € thousands | Europe | North America | and Africa | Reconciliation | financial statements |
| Sales revenues* | 203,570 | 40,678 | 45,517 | –90,291 | 199,474 ** |
| thereof: external sales revenues* | 123,379 | 40,372 | 35,723 | 0 | 199,474 |
| thereof: internal sales revenues* | 80,191 | 306 | 9,794 | –90,291 | 0 |
| Adjusted EBIT*** | 14,862 | 3,253 | 4,918 | 843 | 23,876 |
| thereof: depreciation and amortization | 3,902 | 979 | 890 | 0 | 5,771 |
| Adjusted EBIT margin | 12.0% | 8.1% | 13.8% | 12.0% | |
| Adjusted EBITDA*** | 18,764 | 4,232 | 5,808 | 843 | 29,647 |
| Adjusted EBITDA margin | 15.2% | 10.5% | 16.3% | 14.9% | |
* Sales by destination in the reporting period:
– Europe: €109,346 thousand
– Americas: €42,988 thousand
– Asia, Pacific and Africa: €47,140 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 | Q1 2020 | Q1 2019 |
|---|---|---|
| Earnings after taxes | –4,113 | 14,227 |
| Income taxes | 216 | –2,160 |
| Net finance result | –6,765 | –808 |
| EBIT | 2,436 | 17,195 |
| D&A from PPA | –6,541 | –6,277 |
| Other effects | –5,280 | –404 |
| Adjusted EBIT | 14,257 | 23,876 |
| Depreciation of property, plant | ||
| and equipment | –6,203 | –5,311 |
| Amortization of intangible assets | –1,573 | –460 |
| Adjusted EBITDA | 22,033 | 29,647 |
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Earnings after taxes | 892 | 14,227 |
| Income taxes | 451 | –2,160 |
| Net finance result | –2,618 | –808 |
| EBIT | 3,059 | 17,195 |
| D&A from PPA | –6,268 | –6,277 |
| Other effects | –2,252 | –404 |
| Adjusted EBIT | 11,579 | 23,876 |
| Depreciation of property, plant | ||
| and equipment | –5,644 | –5,311 |
| Amortization of intangible assets | –684 | –460 |
| Adjusted EBITDA | 17,907 | 29,647 |
| in € thousands | Q1 2020 |
|---|---|
| Earnings after taxes | –5,005 |
| Income taxes | –235 |
| Net finance result | –4,147 |
| EBIT | –623 |
| D&A from PPA | –273 |
| Other effects | –3,028 |
| Adjusted EBIT | 2,678 |
| Depreciation of property, plant | |
| and equipment | –559 |
| Amortization of intangible assets | –889 |
| Adjusted EBITDA | 4,126 |
Seasonal effects during the fiscal year can result in variations in sales and resulting profit. The JOST Werke Group 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 decline in sales revenues is mainly attributable to the APA region. By contrast, the North America region recorded an increase in sales.
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 across all regions, primarily as a result of the COVID-19 pandemic.
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 (€3.1m).
For the 2020 reporting period, other income amounted to €2.5m (2019 reporting period: €1.4m) and other expenses amounted to €2.8m (2019 reporting period: €0.9m).
In the 2020 reporting period as well in the 2019 reporting period, other income mainly comprises currency gains and government grants. Other expenses mainly compromise currency losses.
Financial income is composed of the following items:
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Interest income | 58 | 66 |
| Realized currency gains | 0 | 10 |
| Unrealized currency gains | 403 | 839 |
| Other financial income | 3 | 9 |
| Total | 464 | 924 |
Financial expense is composed of the following items:
| in € thousands | Q1 2020 | Q1 2019 |
|---|---|---|
| Interest expenses | –1,412 | –872 |
| thereof: interest expenses from leasing | –225 | –135 |
| Realized currency losses | –3 | –98 |
| Unrealized currency losses | –5,460 | –254 |
| Result from measurement of derivatives | –77 | –504 |
| Other financial expenses | –277 | –4 |
| Total | –7,229 | –1,732 |
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:
| Taxes on income | 216 | –2,160 |
|---|---|---|
| Deferred taxes | 2,614 | 1,303 |
| Current tax | –2,398 | –3,463 |
| in € thousands | Q1 2020 | Q1 2019 |
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 March 31, 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.
| Basic and diluted earnings per share (in €) | –0.28 | 0.95 |
|---|---|---|
| Weighted average number of shares | 14,900,000 | 14,900,000 |
| Earnings after taxes (in € thousand) | –4,113 | 14,227 |
| Q1 2020 | Q1 2019 |
The following explanation of adjusted effects serves to clarify the information in the income statement.
In the 2020 reporting period, expenses amounting to €11,821 thousand (2019: €6,681 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) and other effects in the amount of €7,870 thousand (2019: €6,367 thousand). Furthermore, cost of sales and administrative expenses were adjusted for expenses relating to other effects totaling €3,951 thousand (2019: €314 thousand). The other effects mainly relate to the expenses associated with the acquisition of Ålö Holding AB in the amount of €2,035 thousand and earnings effects from step-ups on inventories in the amount of €1,721 thousand.
In the 2020 reporting period, expenses of €240 thousand (2019: €0 thousand) arising from acquisition financing were adjusted within the net finance result.
Notional income taxes after adjustments were recognized in the amount of €–2,320 thousand in the 2020 reporting period (2019: €–6,920 thousand).
The tables below show the earnings adjusted for these effects:
| in € thousands | January 1 – March 31, 2020 Unadjusted |
D&A from PPA | Other effects | Acquisition financing |
Adjustments, total |
January 1 – March 31, 2020 Adjusted |
|---|---|---|---|---|---|---|
| Sales revenues | 191,805 | 0 | 191,805 | |||
| Cost of sales | –142,888 | 1,720 | 1,720 | –141,168 | ||
| Gross profit | 48,917 | 0 | 1,720 | 0 | 1,720 | 50,637 |
| Selling expenses | –26,608 | 6,541 | 1,329 | 7,870 | –18,738 | |
| Research and development expenses | –3,689 | 0 | –3,689 | |||
| Administrative expenses | –16,556 | 2,231 | 2,231 | –14,325 | ||
| Other income | 2,513 | 0 | 2,513 | |||
| Other expenses | –2,774 | 0 | –2,774 | |||
| Share of profit or loss of equity method investments | 633 | 0 | 633 | |||
| Operating profit (EBIT) | 2,436 | 6,541 | 5,280 | 0 | 11,821 | 14,257 |
| Financial income | 464 | 464 | ||||
| Financial expense | –7,229 | 240 | 240 | –6,989 | ||
| Net finance result | –6,765 | 0 | 0 | 240 | 240 | –6,525 |
| Earnings before tax | –4,329 | 6,541 | 5,280 | 240 | 12,061 | 7,732 |
| Income taxes | 216 | –2,320 | ||||
| Earnings after taxes | –4,113 | 5,412 | ||||
| Weighted average number of shares | 14,900,000 | 14,900,000 | ||||
| Basic and diluted earnings per share (in €) | –0.28 | 0.36 |
| January 1 – | January 1 – | ||||
|---|---|---|---|---|---|
| March 31, 2019 | Adjustments, | March 31, 2019 | |||
| in € thousands | Unadjusted | D&A from PPA | Other effects | total | Adjusted |
| Sales revenues | 199,474 | 0 | 199,474 | ||
| Cost of sales | –148,133 | 132 | 132 | –148,001 | |
| Gross profit | 51,341 | 0 | 132 | 132 | 51,473 |
| Selling expenses | –21,991 | 6,277 | 90 | 6,367 | –15,624 |
| Research and development expenses | –3,188 | 0 | –3,188 | ||
| Administrative expenses | –10,399 | 182 | 182 | –10,217 | |
| Other income | 1,440 | 0 | 1,440 | ||
| Other expenses | –851 | 0 | –851 | ||
| Share of profit or loss of equity method investments | 843 | 0 | 843 | ||
| Operating profit (EBIT) | 17,195 | 6,277 | 404 | 6,681 | 23,876 |
| Financial income | 924 | 0 | 924 | ||
| Financial expense | –1,732 | 0 | –1,732 | ||
| Net finance result | –808 | 0 | 0 | 0 | –808 |
| Earnings before tax | 16,387 | 6,277 | 404 | 6,681 | 23,068 |
| Income taxes | –2,160 | –6,920 | |||
| Earnings after taxes | 14,227 | 16,148 | |||
| Weighted average number of shares | 14,900,000 | 14,900,000 | |||
| Basic and diluted earnings per share (in €) | 0.95 | 1.08 |
The carrying amounts, fair values, categories and classes of financial assets and financial liabilities are as follows:
| Measurement categories in accordance |
Carrying amount |
Fair value | Carrying amount |
Fair value | ||
|---|---|---|---|---|---|---|
| in € thousands | with IFRS 9 | 03/31/2020 | 03/31/2020 | 12/31/2019 | 12/31/2019 | Level |
| Assets | ||||||
| Cash and cash equivalents | FAAC | 102,839 | 102,839 | 104,812 | 104,812 | n/ a |
| Trade receivables | FAAC | 130,206 | 130,206 | 89,937 | 89,937 | n/ a |
| Other financial assets | FAAC | 537 | 537 | 628 | 628 | n/ a |
| Total | 233,582 | 233,582 | 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.
| in € thousands | Measurement categories in accordance with IFRS 9 |
Carrying amount 03/31/2020 |
Fair value 03/31/2020 |
Carrying amount 12/31/2019 |
Fair value 12/31/2019 |
Level |
|---|---|---|---|---|---|---|
| Liabilities | ||||||
| Trade payables | FLAC | 105,571 | 105,571 | 64,223 | 64,223 | n/ a |
| Interest bearing loans and borrowings* | FLAC | 380,997 | 381,317 | 151,076 | 151,396 | 2 |
| Lease liabilities | n/ a** | 30,992 | 30,992 | 30,618 | — | n/a |
| Other financial liabilities | FLAC | 476 | 476 | 389 | 389 | n/a |
| Derivative financial liabilities | FLtPL | 1,650 | 1,650 | 1,573 | 1,573 | 2 |
| Total | 519,686 | 520,006 | 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.
The JOST Werke Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
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 overpayments to suppliers in the amount of €12 thousand (December 31, 2019: €197 thousand) and deposits in the amount of €461 thousand (December 31, 2019: €431 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 at risk of default as of the balance sheet date.
Pension obligations as of March 31, 2020 were €62.5m (December 31, 2019: €71.0m). The following significant actuarial assumptions were made:
| 03/31/2020 | 12/31/2019 | |
|---|---|---|
| Discount rate | 1.5% | 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 March 31, 2020:
| in € thousands | 03/31/2020 | 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 | 110,000 | 0 | |
| Other | 997 | 1,076 | |
| Interest-bearing loans | 380,997 | 151,076 | |
| Accrued financing costs | –557 | –321 | |
| Total | 380,440 | 150,755 |
In order to finance its acquisition of Ålö Holding AB, JOST has 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 €110.0m from the available revolving facility as of March 31, 2020 (2019 reporting period: €0.0m). Interest payments were made in the amount of €151 thousand (2019 reporting period: €159 thousand).
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 March 31, 2020 had a negative fair value of €1,650 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 the JOST Group, including the subsidiaries and the joint venture, as of March 31, 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 offices and the equity interest acquired.
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)
Joachim Dürr Dr. Ralf Eichler Dr. Christian Terlinde
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 significant, reportable events after the reporting date.
REVIEW
This interim report was neither audited according to Section 317 HGB nor reviewed by auditors.
Neu-Isenburg, May 14, 2020
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 http://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
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.