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Manz AG — Interim / Quarterly Report 2009
Aug 11, 2009
273_10-q_2009-08-11_86603a57-319b-4739-8f41-0fbce4a24d5d.pdf
Interim / Quarterly Report
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Semi-Annual Report 2009
Overview of Group Results
| in EUR million | First half of 2009 | First half of 2008 |
|---|---|---|
| Revenues | 28.28 | 101.60 |
| Total operating revenues | 38.11 | 102.44 |
| EBIT | –12.56 | 12.02 |
| EBIT margin [in %] | – | 11.80 |
| EBT | –12.11 | 11.38 |
| Consolidated operating profit | –9.82 | 8.82 |
| Earnings per share | –2.08 | 2.41 |
| Operating cash flow | –2.89 | –1.23 |
| Equity ratio [in %] | 77.20 | 57.54 |
| Net debt | – 44.96 | 33.74 |
to our shareholders
| Letter to the Shareholders
| Manz Automation AG Shares
Group Interim Report
- | Business Report
- | Events After the Balance Sheet Date
- | Risk analysis and forecast
Consolidated Interim Financial Statements & Notes
- | Consolidated Interim Financial Statements
- | notes to the consolidated interim financial statements
- | REVIEW REPORT
Letter to the shareholders
Dear Shareholders,
The first half of 2009 was characterized by a difficult market environment. In particular, the photovoltaic industry was severely affected by the financial crisis. Due to a lack of financing from banks, only a small number of new solar parks are currently being built, and consumers are also hesitant to make investments in new equipment. This reduction in demand led to manufacturers cutting back their production capacities. At the same time, their stock of unsold solar modules has increased considerably, partly as a result of the cap in Spain, which caused demand in what used to be the largest photovoltaic market to decrease significantly. The end result of these overcapacities in the market was a strong reduction in solar module prices, which has had the effect of further accelerating the incipient consolidation of the photovoltaic industry. Experts are not expecting any noticeable improvements during 2009, and are cautiously optimistic for 2010. Based on this prognosis, we do not anticipate that the financial crisis and the reduction in demand will be overcome before the middle of next year. This recovery over the medium term will most likely be triggered by the prices for solar modules, which have grown considerably more attractive, and the resulting increase in returns for investors.
In light of this situation and the resulting significant reduction in new and replacement investments in solar factories, the drastic slump in our financial figures is understandable. Thus, in the first six months of the year, we generated revenues of 28.28 million euros after achieving 101.6 million euros in the same period last year, which is equal to a decline of –72.17%. With regard to earnings before interest and taxes [EBIT], we recorded a loss of 12.56 million euros after generating an operating profit of 12.02 million euros last year. Therefore, our Group result for the period totaled –9.82 million euros [previous year: 8.82 million euros].
It is important to bear in mind, however, that we are not dealing with a structural crisis endemic to the solar industry, but primarily the result of banks putting significant restrictions on lending. Furthermore, solar technology can benefit from the current situation. We anticipate that the rapid decline in the price of solar cells and modules will cause solar technology to become considerably more attractive. As a result, grid parity may be reached as early as next year in countries with many hours of sunlight and high electricity prices. This has caused photovoltaic industry experts to forecast significant growth in the coming years, and this growth will give photovoltaic power the boost it needs to become an important part of the energy mix of the future. Lower prices will bring about a rapid recovery in the industry over the medium term as well as open up enormous growth potential for solar cell manufacturers and equipment suppliers like Manz Automation.
After introducing reduced working hours for our German locations in Reutlingen and, from September, in Tübingen, we plan on extending them until at least the end of the year. In addition, should we continue to receive a low number of new orders, we plan on further reducing working hours from their current level of 80%. We have already taken steps to adjust the personnel levels at our production facilities in Taiwan and China in order to reduce costs. Since we were able to react quickly to the changed market situation, we feel confident, as things now stand, that Manz Automation will overcome the economic crisis. Moreover, our equity ratio of approx. 77%, liquid assets valued at 58.9 million euros, and extensive, unused lines of credit give us ample room to maneuver. Our current strategy is to establish the basis from which we will once again drive innovation as a provider of leading automation and system solutions for the solar industry once the crisis is over.
With that in mind, we are now using this period to systematically invest in research and development. Our goal is to offer our clients solutions which further increase the efficiency of solar cells and modules, enhance product quality, and make the production process more efficient and affordable. This allows our clients to counteract the current decline in margins and meet the changed market requirements. To be precise, this means: system solutions from Manz make higher throughput speeds possible, while at the same time improving module efficiency. In addition to using less materials and energy, we are using thinner wafers while simultaneously lowering breakage rates. As a high-tech equipment manufacturer, Manz Automation strives to be the technological leader in the solar industry. All solar cell manufacturers will have to make new investments at least once the crisis is over [at the latest], since it will not be possible to produce solar cells at the future price level using existing machines. Manz is concentrated on solving this problem for manufacturers, and will take part in the boom period after the crisis with the most state-of-the-art and highest-performance equipment. Furthermore, we are not only focusing our R&D activities on the solar industry, but are also using our knowledge to establish our newest area of business, "lithium-ion batteries", as a third source of significant revenues.
Manz Automation is already benefiting from the extensive research and development expertise gained and the synergies which resulted from our acquisitions in fiscal year 2008. In July 2009, the company became an industry partner for the development of batteries for hybrid and electric cars. This once again demonstrates our company's flexibility and ability to adapt to changes rapidly. As we have done in the past, we are using existing knowledge to enter new markets during times of crisis. The industry partnership resulted from a successful collaboration with our client Li-Tec Battery GmbH. The goal of this research project is to explore new manufacturing technologies and apply them to the demands of mass production. As an industry partner in this research project, which also involves Evonik Industries, the Deutsche Accumotive and Daimler, Manz will contribute expertise for a series of production stages which are to be developed. In this context, Manz Automation has received an order valued at around 6.3 million euros for the research and development services which we will provide. Manz can apply this technological competence in the coming years to establish a new business segment with a market volume in the hundreds of millions of euros. In doing so, we are acting as a first mover and are striving to achieve a market share in the high double digits.
Now more than ever, we would like to thank our shareholders, clients, and employees for their confidence during this difficult economic period. Together we can optimistically look toward a green future! We would also especially like to thank our long-term member of the Managing Board, Mr. Otto Angerhofer, who is retiring from his position on July 31, 2009. With his numerous ideas, he played a decisive role in our company's growth and success, and made many valuable contributions to Manz Automation's progress.
The Managing Board
Dieter Manz Martin Hipp Volker Renz Otto Angerhofer Chairman of the Managing Board
Martin Hipp Volker Renz Dieter Manz Otto Angerhofer
Manz automation AG shares
2009 /2010 Financial Calendar
| Date | |
|---|---|
| Nov. 09, 2009 | Publication of Q3 2009 figures |
| Nov. 09–11, 2009 | German Equity Forum 2009 |
| Mar. 30, 2010 | Publication of Annual report 2009 |
| May 12, 2010 | Publication of Q1 2010 figures |
| Jun. 2010 | Annual General Meeting |
>> Overview
Manz Automation shares were able to withstand the effects of the difficult market environment over the course of the previous months, and the share price improved parallel to the TecDAX, although it did fluctuate more than the index itself. Manz shares performed significantly better than the Prime IG Renewable Energies Index [ISIN DE0007237810], particularly near the end of the second quarter. Despite reaching a low of EUR 22.26 on March 3, 2009, the continuing period of poor performance which began in the summer of 2008 has been overcome. The share price reached its highest point this year, EUR 48.65, on June 11, 2009, which is equal to an increase of almost 120 % from its low.
On June 30, 2009, the company's market capitalization totaled 181.4 million euros, but it has since increased to 210 million euros after the reporting date as the result of a slight improvement in the capital markets.
shareholder structure as of june 30, 2009
>> shareholder structure
Currently at 47.46%, Manz Automation has a high number of shares in free float and a wide shareholder base. In addition, the founder and chairman of the Managing Board, Mr. Dieter Manz, held 44.49% of shares on the reporting date June 30, 2009. Besides member of the Managing Board [until July 31, 2009], Mr. Otto Angerhofer, who holds 3.35% of shares, Mrs. Ulrike Manz also holds 4.70% of Manz Automation AG shares.
Key Data
| German Securities Code Number | A0JQ5U |
|---|---|
| ISIN/symbol | DE000A0JQ5U3/M5Z |
| Stock market segment/stock exchange | Prime Standard/Frankfurt |
| Stock category | No-par-value bearer shares each with a proportionate interest of 1.00 euros in the share capital |
| Share capital | 4,480,054 euros |
| Number of shares in circulation | 4,480,054 |
>> Investor Relations
In these difficult economic times, open and transparent communication has become more important than ever before. That is why the company has continued to engage analysts, investors, and financial journalists in active dialog during the first half of 2009. Switching into the Prime Standard segment has already required Manz Automation to comply with the highest transparency standards. However, the company plans to continue going above and beyond these standards, and wants to stay in regular contact with the financial community. With this goal in mind, numerous measures were implemented during the first half of the year to ensure a continuous and transparent flow of information.
In addition to the legal requirements, Manz Automation carried out the following IR activities, among other things:
-
Participated in nine capital market conferences
-
Participated in five road shows, both in Germany and abroad
-
Regularly issued press releases
-
Posted comprehensive reports on the company Web site
Analysts' interest in the company also continues to gain steam: currently Manz Automation AG is being covered by a total of ten analysts. These include Barclays, Berenberg Bank, Bankhaus Lampe, CA Cheuvreux, Commerzbank, Credit Suisse, Goldman Sachs, HSBC, LBBW, Normura, and WestLB.
business report
Market Environment AND COMPANY POSITION
>> Market and Competitive Environment >>> Economic Environment
The German economy has been shrinking since the summer of 2008, and experts anticipate the largest global decline in total economic development since 1945. The World Bank predicts that Eastern Asia will be particularly affected, seeing a significant downturn after having gone through a period of above-average growth rates.
Governments across the globe have reacted to this situation by passing economic stimulus packages and other measures to save the crippled financial world. The German federal government and independent economic experts confirm that some of these measures have already begun to have an effect. They assume that the German economy only shrank slightly in the second quarter of 2009, or even remained stable.
By May, the German economy had already seen the level of new orders grow by 4.4% compared to the previous month, which was the largest increase in almost two years. For this reason, the researchers at the Kiel Institute for the World Economy [lfW] expect a positive surprise in the form of a stagnating economy. The German Institute for Economic Research [DIW] also expects slightly higher growth than initially anticipated, and sees the first signs of a bottoming out after the crash around the end of last year. On the other hand, the German Engineering Federation [VDMA] does not believe the bottom has been reached. In the second quarter [April to June 2009], the federation recorded a 51% decline in new orders compared to the same period last year. In this context, the 53% decline in international orders is still significantly higher than the 47% decline in domestic orders. A constant decline has been recorded since the beginning of the year. Back in April, VDMA representatives anticipated the turnaround to come during the summer, resulting from both the reduced inventories and the positive effects of the global economic stimulus packages. According to the Ifo Institute in Munich,
however, companies will hold off on making investments in equipment until next year. Experts expect the number of investments made in all of 2009 to decline by 20%, reducing the number of investments made to its 2004 level. They are also anticipating a decline of between 7% and 8% for the first half of 2010. Various associations place the blame for the general lack of willingness to make investments on the banks' strict lending practices. In addition, many fear an intensified credit crunch when the effects of the recession are reflected in the 2009 company financial statements.
At the same time, the International Monetary Fund [IMF] has corrected its forecast for Germany and is now significantly more pessimistic, anticipating a 6.2% decline for the year. In April the IMF was still predicting a decline of only 5.6%. Despite the current upbeat economic data, a sustained recovery is still not in sight. Both the expected job cuts and weak international demand are going to have an effect on the economic situation. However, the institute is only anticipating a slight 0.6% decline in GDP in 2010. In contrast, the German government anticipates slight economic growth in the coming year.
In its newest forecast, the IMF predicts growth of 2.5% globally in 2010. The actions taken by the world's governments have been given some of the credit for significantly accelerating the economic recovery, without which the global recession would have almost certainly continued for a considerably longer period of time.
Derivation of Projected Module Prices
[Source: LBBW Institutional Equity Research]
Thin-film products Thin film module price [Euro per Watt, scale on left] Technology-weighted module price [Euro per Watt, scale on left] Crystalline module products Crystalline module price [Euro per Watt, scale on left]
>>>systems.solar division
The significantly slowed growth in the photovoltaics industry in 2009 had already become apparent to industry experts toward the end of 2008. Brought on by the global crisis in the financial markets, the banks' lack of willingness to finance investments led to the current situation in the photovoltaics market. Currently, barely any investments are being made in new factories, since only a few new solar parks are being built and consumers are also hesitant to invest in private photovoltaic equipment due to the general uncertainty brought on by the recession. [Source: BSW – Background paper for Intersolar 2009]
At the moment, the market is characterized by the credit crunch currently being experienced by solar cell manufacturers and solar park operators, an oversupply of solar cells, and the resulting growing cost pressure felt by manufacturers as well as more intense competition. Analysts have calculated the oversupply to total approximately 2 GW, and the resulting decline in prices for solar modules to reach up to 24% in 2009. The short-term growth perspectives for solar equipment manufacturers have become considerably worse as a result of the financing restrictions and overcapacities on the consumer side caused by the current economic crisis. [Source: LBBW – Photovoltaics 2009]
In order to counteract this trend, solar companies must take steps to cut costs. This means personnel and material costs must be reduced and, at the same time, the efficiency of modules and uptime hours must be increased. This will be possible primarily through the use of more efficient, fully automated equipment, and the simultaneous expansion of manufacturing capacities in order to utilize economies of scale. As a supplier of highly innovative solutions, Manz can benefit over the medium term from this need for investment.
[Source: Germany Trade & Invest – A noticeable reduction in growth anticipated for the global photovoltaic market in 2009, 2008]
18 | GROUP Interim REPORT | business REPORT | Market Environment AND COMPANY POSITION >> Market and Competitive Environment >>> Systems.solar division
1 43% Spain 2 26% Germany 3 6% Japan 4 5% USA 5 5% Italy 6 2% South Korea 7 1% China 8 1% France 9 1% India 10 10% Other regions 1 5% Spain 2 21% Germany 3 11% Japan 4 16% USA 5 4% Italy 6 5% South Korea 7 6% China 8 5% France 9 3% India 10 24% Other regions 4 10 1 2 3 5 6 7-9 1 2 3 5 4 6 7 10 World market 2008 World market 9 2012 8
The Most Important Markets for Solar Power Plants
[Source: EuPD Research]
Based on the views of the solar specialists at the Swiss bank Sarasin, the long-term prospects for renewable energies are particularly positive. An increase in demand as a result of the economic stimulus packages taking effect, combined with a stronger level of commitment from energy providers, will revitalize the market. In addition, experts are sure that the manufacture of renewable energy components will shift regionally to China and the USA. This statement is supported by the extremely ambitious political goals announced by US president Obama regarding climate control, as well as by subsidy programs in China. [Source: Bank Sarasin & Cie AG – Sustainability Research]
According to these goals, Obama plans to expand the percentage of energy used in the USA that comes from renewable sources from its current level of 9% to 25%. To achieve this goal, 150 billion dollars will be invested over the next ten years in new technologies with increased energy efficiency. For example, the power supply system in the USA must be improved and expanded. The solar industry can also benefit from these planned investments in infrastructure. As part of his plans to achieve these goals, the US president signed the "American Recovery and Reinvestment Act of 2009," on February 17, 2009, which includes a 30% subsidy for renewable energy. Thus, the analysts from Piper Jaffray predict that the US solar market could double this year to between 600 and 700 MW, and reach the size of the German market with 1.5 to 2 GW as early as 2010. An example of this growth is the 48-megawatt solar power plant being built outside of Las Vegas to be completed by 2010, making it the largest of its kind in North America.
As a result of the growing Chinese economy and the decline in fossil fuel reserves, China also soon wants to play an important role in the advancement of renewable energies. Thus, in the future solar plants with a capacity of more than 50 KW will be subsidized with USD 2.93 per watt. This plan will primarily benefit the Chinese solar industry. Manz Automation will
Photovoltaic module price experience curve since 1976 [USD/W]
[Source: EU Joint Research Centre - EIA - National Renewable Energy Laboratory - A.T. Kearney analysis]
participate in this subsidy program, since the important Chinese solar manufacturers Yingli Green Energy and Suntech are both clients of our company. Furthermore, with our own manufacturing and sales facilities in China and Taiwan, Manz Automation is positioned extremely well in the Asian market. In addition, the Chinese government has set the goal of installing solar equipment on the rooftops of schools, hospitals, and government buildings. Moreover, the Chinese authorities plan to expand the percentage of energy used that comes from renewable sources to 23% by 2020. This corresponds to an average yearly increase of 6% to 7%.
Fueled by the financial crisis and its effects, the prices for producing solar electricity are falling faster than ever. This has put the primary goal of all market participants – to reach grid parity [the point at which the price of photovoltaic electricity is equal to or cheaper than conventional methods of electricity] – just within reach. Particularly in regions with many hours of sunshine, high electricity prices, and a large number of peak hours [Time when significant amounts of energy are needed] [as a result of the use of air-conditioning units, for example] such as California, USA, or Italy, this is expected to occur as early as 2010. This will give the industry an additional growth spurt. In Germany, the percentage of energy used from solar electricity totaled 1% in 2009 and will total 7% in 2020. The price for solar electricity plants is currently at an all-time low, costing only 3,620 euros per KWp [plants < 100 KWp]. The subsidy set forth in the German Renewable Energy Law [EEG], which is currently still extremely attractive, makes annual returns of up to 6% attainable. [Source: May 2009 – Background Paper for Intersolar 2009 – Bundesverband Solarwirtschaft e.V.]
The diagram above emphasizes the changes in module price. It shows how the prices have moved along a cost degression line [including subsidies to reduce costs as a result of the EEG]. In the recent past, prices sank as a result of the boom less rapidly than necessary and as was already technologically possible.
20 | GROUP Interim REPORT | business REPORT | Market Environment AND COMPANY POSITION
Market and Competitive Environment >>> Systems.solar division
Market Share of Various Photovoltaic Technologies
[Source: EuPD Research]
*organic solar cells, dye-sensitized solar cells, etc.
This led to the high margins of solar cell manufacturers. As a result, the diagram on page 19 illustrates and emphasizes that the current market situation is not a structural crisis, but rather an expected market trend.
The experts at Sarasin only expect an increase in new photovoltaic installations of 17% in 2009. In fact, they are anticipating a slight decline in Europe, since particularly the outlook in Spain, which is the secondlargest European market [after Germany], has become significantly worse.
In the context of achieving grid parity, advancements made to thin-film solar modules must be particularly highlighted, since this technology is rapidly gaining market share. It is characterized by its economical use of the raw material silicon and, as a result, its lower purchase costs. Experts forecast an increase in market share of thin-film technology from its current level of 12% to 23% by 2012. With regard to the entire global market, the Sarasin bank anticipates growth of 48% by 2020, resulting in 125 GW of power from new installations. [Source: Bank Sarasin & Cie AG – Study: "Solarindustrie erwartet stürmische Zeiten," 2008]
Manz Automation has positioned itself on the market as a leading supplier of high-quality technological solutions. By successfully combining long-term experience in system solutions for wet chemistry, in the field of LCD production, and with applications for the production of thin-film solar modules, the Manz Group will gain further market share in the future and expand its leading position as an equipment supplier known throughout the world. The Manz Group is
Global annual PV market until 2013
already a worldwide leader in the field of laser structuring equipment, with a 60% market share. The company is the only supplier outside of Asia with long-term experience in safely handling large glass substrates in cleanroom conditions.
Using quality-control and automation systems from the Manz Group, production quality and efficiency is significantly increased, which means a significant increase in value to the client. Manz has had success in setting internationally accepted standards precisely in this segment. Our company offers solar cell manufacturers worldwide the ability to counteract the price pressure and benefit from the growing global demand for photovoltaic equipment. Manz was able to enter into trendsetting strategic partnerships with Optomec, Rofin-Sinar, Masdar, and Roth & Rau, and in the future these partnerships will set the stage for increases in efficiency in existing equipment and significant potential savings.
22 | GROUP Interim REPORT | business REPORT | Market Environment AND COMPANY POSITION >> Market and Competitive Environment >>> Systems.lcd division
225 200 175 150 125 100 75 50 2007 2008 2009 2010 2011 2012 2013 79 105 127 149 170 188 203
LCD TV Unit Forecast Revision [in Million Units]
>>>systems.lcd division
LCD market trends are primarily driven by the sale of modern, LCD flatscreens. This means declining prices boost the sale of products. Up until now, the experts at DisplaySearch had been forecasting a decline in growth in the LCD market as a result of the financial market crisis. However, LCD technology is increasingly being chosen over plasma technology for business applications that require a screen size of more than 26 inches. The research institute reports growth rates of close to 70% compared to last year [Q1/2009]. This means the LCD market is continuing to grow seemingly unaffected by the current recession.
Analysts have increased their previous forecast of 120 million large LCD televisions sold in 2009 to 127 million units. Accordingly, the expected level of industry-wide revenue generated from consumer products has also increased from 66 billion dollars to 76 billion dollars. The People's Republic of China is one of the factors driving growth in this segment. Through subsidy programs for the rural population and a newly developed incentive program for urban citizens which encourages the purchase of LCD televisions over conventional CRT televisions, the market has grown remarkably. As a result, a 25% increase is being forecast for the Chinese market, equal to 23.6 million television units sold.
The advancements to LCD televisions, the spread of HDTV [high-definition television], as well as declining prices for larger units are currently the important factors driving the market as a whole. Experts are seeing a clear trend towards increasingly larger units. For this reason, manufacturers must invest in state-of-the-art manufacturing equipment. As a leading global supplier of equipment for the handling of glass substrates and wet chemical cleaning, Manz Automation can benefit from the trends in the LCD market.
Worldwide LCD and PDP Share of 26"+ Large-Format FPDs for Commercial Public Display Applications for Leading Brands
>>> systems.aico division
In the systems.aico division, our focus is on the use of synergies and economies of scale. Its business objective is the sale of components and systems that have either been developed for the LCD and solar divisions or purchased additionally as components. Using higher purchasing volumes, the company achieves purchasing benefits while simultaneously increasing the return on proprietary developments. In addition, we will also serve a number of different sub-segments such as the packaging industry, laboratory automation, or tool manufacturers. Although growth in these sub-segments is influenced by the economic trends and the varying investment cycles in these industries, the extensive range of products the systems.aico division possesses has a stabilizing effect. In the future, we expect slight revenue and earnings growth in this division, which as a result nicely round out our business model.
In addition to the aforementioned objectives, the systems.aico division serves as a breeding ground for new technologies, and ultimately, new business units. This was true for our new area of operation, lithium ion batteries [li-ion batteries] for electric-powered mobility. In this field, Manz is working on developing manufacturing technologies for these batteries which will fulfill the needs of mass production, since experts forecast one million electric-powered vehicles in Europe by 2015 alone, and optimistic estimates even predict nine million units by 2020. At the same time, the market for hybrid vehicles, as a first step for automobile manufacturers on the way to an electric future, will grow significantly faster, and based on forecasts, there will be demand for 29 million units a year by 2020. [Source: Our own estimates, based on a study by Roland Berger Strategy Consultants as well as under consideration of a reduction of 30% of the amount forecast [a conservative approach]].
In the future, other drive technologies will be available in addition to the internal combustion engine, such as mild and full hybrid, plug-in solutions [for the charging socket], and also battery-powered vehicles with range extenders [A small internal combustion engine which charges the battery in the vehicle. This motor runs in the optimal speed range and is therefore significantly more efficient than when used conventionally.]. In electric vehicles [powered only by an electric motor], based on the current state of technology, about 100 battery cells are used. The are designed extremely flat, which allows them to be built into the vehicles in various ways. With an engine efficiency of up to 90%, electric motors are significantly more efficient than their gas and diesel powered equivalents [30% and 40%, respectively]. Furthermore, pollution is reduced when the electricity is generated from renewable energy sources such as solar, wind, or water power. This demonstrates the enormous significance of the relationship between alternative engines and renewable energies. The resulting market potential for Manz Automation is remarkable, since our company is once again one of the first movers, and competition in this area has yet to be established. From today's perspective, the cumulative market volume of the equipment sector over the next few years will be in three-digit millions. Manz wants to achieve a share of this market in the upper double-digits. Beyond that, high performance batteries can be used as a storage medium in decentralized photovoltaic plants. In a nutshell, our company views the Li-Ion battery segment as an extremely interesting growth area which Manz can participate in over the medium term as a result of our comprehensive research and development expertise.
>> Group Structure
Reutlingen-based Manz Automation AG is one of the world's leading providers of technological systems and components in the fields of automation, quality assurance, and laser processing technology for the photovoltaics industry. In addition, our company offers system solutions in the fields of automation and wet chemistry for the LCD and printed circuit board industries. Our technological market leadership is both secured and expanded through ongoing research and development activities as well as by bundling the Manz Group's expertise.
Our company is divided into the following divisions: photovoltaic [systems.solar], LCD [systems.lcd], components and OEM systems [systems.aico] for automation in various industry sectors, as well as a "miscellaneous" division which was established as a result of our new acquisitions.
In this context, the Reutlingen-based parent company Manz Automation AG focuses primarily on the final assembly of systems and their technological advancement, as well as the administrative management of the entire Group. The strength of the Manz Group in carrying out research and development activities is particularly noteworthy. Our company was able to reach a number of milestones in recent years because of our technological advancements. Laser-scribing equipment for the production of thin-film solar modules and, more recently, our entry into the field of manufacturing equipment to produce lithium-ion batteries are just two examples of our company's many successes.
Our Center for Product Development is located at the headquarters in Reutlingen, since this division plays an important role in our company's performance. As the Group's parent company, on the reporting date Manz Automation AG held a 100% interest in six international subsidiaries, two domestic subsidiaries located in Tübingen, and three second-tier subsidiaries in Taiwan, China, and Hungary. Two of these subsidiaries are based in Hungary, and one subsidiary each is located in the United States, Spain, India, and Hong Kong. All of the subsidiaries are reflected in Manz Automation's consolidated financial statements and are therefore fully consolidated. Furthermore, Manz holds a 90% interest in a Slovakian subsidiary headquartered in Nove Mesto nad Vahom. In order to further internationalize the company, a branch office was established in Spain in October of 2008.
Currently, our subsidiary Manz Automation Tübingen GmbH employs almost 119 workers, with more than 87 employees manufacturing machines and bringing them into service. Situated approximately ten km away from our headquarters in Reutlingen, warehouses and assembly halls as well as an office building are located here, all on a site which covers a total area of 5,200 sq m. The focus here is on the manufacture
| 100% [Tübingen, Germany] Manz Automation Tübingen GmbH |
100% tungsgesellschaft mbH Helmut Majer Verwal [Tübingen, Germany] |
100% | Ltd. [Hong Kong, China] Manz Automation Asia |
100% Manz Automation Spain S.L. [Madrid, Spain] |
100% | [Debrecen, Hungary] MVG Hungary Kft. |
100% | Manz Automation Hungary Kft.[Debrecen, Hungary] |
100% | [North Kingstown, USA] Manz Automation Inc. |
90% | Manz Automation Slovakia s.r.o. [Nove Mesto nad Vahom, Slovakia] |
24% | [Petach-Tikva, Israel] Axystems Ltd. |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 100% [Shanghai] Co. Ltd. Manz Automation [Shanghai, China] |
100% | Manz Automation Taiwan Ltd. [Hsinchu, Taiwan] |
75% Manz Automation India [New Delhi, India] Private Limited |
75.6% | Co. Ltd. [Chungli, Taiwan] Manz Intech Machines |
100% | Manz Immo Hungary Kft. [Debrecen, Hungary] |
|||||||
| 75.6% British Virgin Islands] Intech Enterprises [B.V.I.] Co. Ltd. [Road Town, |
75.6% Intech Machines |
British Virgin Islands] [B.V.I.] Co. Ltd. [Road Town, |
75.6% | [Suzhou] Co. Ltd. Intech Machines [Suzhou, China] |
75.6% | [Qinhuangdao, China] Qinhuangdao Intech Machines Ltd. |
75.6% | [Shenzhen] Co. Ltd. [Shenzhen, China] Intech Technical |
Manz Automation AG
of components and machines for Manz Automation, but also on machines for the processing of paper, film, and packaging materials. The skills named last stem from the expertise acquired from the former Christian Majer GmbH & Co. KG, and are now being used in the industry partnership to develop batteries for hybrid and electric automobiles. The systems.aico division has been located in Tübingen since April 2008.
Manz Automation Slovakia s.r.o. is headquartered in Nove Mesto nad Vahom in Slovakia. At this location, our company manufactures complete plants for the photovoltaics industry under cost-efficient conditions, which improves our competitive ability. This includes the manufacture and processing of entire production series including sourcing components and bringing the equipment into service. The entire back end for the production of crystalline solar cells is now being manufactured in Slovakia. The company currently employs 202 workers on a site of 11,400 sq m, which contains both production and storage facilities.
Through Manz Automation Asia Ltd., the Manz Group holds a 75.6% interest in Intech Machines Co. Ltd., a publicly traded company located in Taiwan. The core business of Intech Machines Co. Ltd. is the construction of wet chemical processing equipment for the LCD and PCB industries. Manz Automation integrated these technologies and existing capacities for the manufacture of wet chemical cleaning equipment into the Group, and has already generated its first sales. In the future, this expertise will play an important role in the production process of both thin-film solar modules and crystalline solar cells. In fact, the first wet chemical processing equipment has already been shipped to Asian clients. Manz Automation thereby increases its supply share, as measured by the entire investment amount needed for one production line, to approx. 20% for thin-film solar module equipment and, in the future, to approx. 70% of crystalline solar cell production lines. The focus of the business area of systems.lcd is focused on Taiwan, in order to profit from the close proximity to LCD manufacturers. In the future, therefore, delivery times and costs will be reduced and the ability to directly interact with clients will be improved.
The new company Manz India is a promising project due to the current energy-supply system in India and its favorable geographic location. In a country with many hours of sunlight, an enormous demand for energy, and a decentralized energy-supply system, photovoltaic power can play an important role in the future. Up to 3,200 hours of sun per year form a sufficient basis for an effective use of solar energy. Our partner in India is the AKC Group, which owns Amity University, the largest private university in India which has 12 locations and over 60,000 students.
>> Employees
As of June 30, 2009, a total of 1,347 employees worked for the company both in Germany and abroad, 360 of which were employed at our company's headquarters in Reutlingen. In addition, Manz Automation is responsible for teaching 16 trainees in the areas of mechatronic engineering, industrial mechanics, and electronics, among others.
Based on the number of employees, the largest company in the Manz Group is Manz Intech Machines Co. Ltd. in Taiwan, with 512 employees, followed by Manz Automation Slovakia s.r.o. with 202 employees, and then Manz Tübingen GmbH with 119 employees.
>> products of the Division systems.solar >>> Crystalline solar cells segment [c-Si]
In the future, photovoltaic power will become an integral part of the global energy mix used to secure the supply of energy. In addition, in contrast to fossil fuels, the use of solar technology supports the reduction of the harmful greenhouse gas carbon dioxide. By directly converting sunlight into electrical energy, a larger portion of the global energy demand can be met in the future using regenerative energy sources. The conversion of sunlight into electrical energy takes place in solar cells, the core component of photovoltaic equipment. Two factors, in particular, play a significant role in the cost-effectiveness of solar cells as compared to traditional energy sources – low costs and, at the same time, a high level of output from the solar cells. Using systems from Manz Automation, our clients – leading global manufacturers of solar cells – can fulfill precisely these requirements.
Crystalline solar modules [c-Si] are manufactured in a multi-stage process. In this process, the value chain is usually divided into five stages:
Within this value-added chain, Manz system solutions particularly concentrate on the crucial third stage – the manufacture of crystalline solar cells. In turn, this production process is subdivided into ten central production stages, from the receipt of silicon wafers [the raw material for solar cells] through to checking the finished solar cells and packaging. The system solutions from Manz are used to efficiently link the individual production stages, for example, loading and unloading the various machines used in the production process. These solutions are based on the company's long-term core skills – powerful, leading global automation technology. The company also provides solutions for important production stages such as printing, laser-edge isolation, or quality control.
crystalline solar cells Process staGes
Solar cell manufacturers must invest between 12 and 18 million euros in the construction of a fully automated and thus cost-efficient production line with an annual production output of 60 MW. Manz Automation can currently cover a share of around 60% of this order volume and offer a wide range of services. Over the medium term, Manz Automation will further increase its coverage of the value chain up to 70% by integrating further processing stages [texturing and PSG etching]. The other stages of production will be covered by our strategic partner Roth & Rau. Through intensive collaboration, together we can offer turnkey systems from one source.
>>> Thin-film Solar Module Segment
What characterizes thin-film technology is the particularly favorable cost-benefit ratio. This is due to thinfilm solar cells being manufactured by vapor depositing ultra-thin layers of conductive and semi-conductive materials on glass substrates. This technique enables manufacturers to significantly reduce raw material costs, since high-cost crystalline silicon wafers are not required. It is true that thin-film technology is less efficient and requires more space for installing the solar equipment. However, this technology has the lowest cost per watt, making it significantly less expensive to manufacture and subsequently quite attractive to those operating solar power plants. The manufacturing process of thin-film solar modules is mainly made up of a multi-stage process to coat the glass substrates as well as a subsequent process where the substrates are laser-scribed or mechanically scribed. In addition to linking the production stages, Manz Automation also currently focuses on developing and manufacturing systems for laser scribing, mechanical scribing, and laser-edge ablation. Manz Automation is the global market leader in the field of laser scribing, with an estimated market share of approx. 60%.
At present, Manz Automation AG can currently provide approx. 20% of the total volume of a fully automated production line for thin-film solar modules. Manz Automation's percentage of the value chain may be lower in comparison to the production process for crystalline solar cells, yet the installation of these production lines is linked to a much higher investment volume for the manufacturers. At the present time, an end-to-end production line for thin-film solar modules with an annual production capacity of 40 MW costs between 50 and 80 million euros. For this reason, Manz's absolute share with regard to the installed service is already higher in the thin-film segment than it is in the crystalline segment, and it will continue to rise due to the newly developed products in the wet chemistry segment.
>> Products of the division systems.lcd
Manz Automation has been supplying innovative automation systems for handling glass substrates for more than 15 years. These products are used in the manufacture of LCD flatscreens. LCD flatscreens must be produced under extreme cleanroom conditions, and the automation systems used must also fulfill these requirements. The majority of the Manz systems which are installed are used to load and unload the in-line sputter systems [vacuum coating systems for glass substrates]. In recent years, automated handling has become significantly more important. For example, the current generation of glass substrates with a size of approx. 6 sq m [2,200 mm x 2,600 mm] and a thickness of 0.7 mm can only be moved using an automated system. In this process, the highest demands are placed on break resistance during handling, since the airborne particles resulting from the breakage of a glass substrate would contaminate the cleanroom for a longer period of time, making a stoppage of production inevitable. In addition to low breakage rates, the throughput speed is also a key factor for LCD manufacturers in order to keep production costs as low as possible.
The aforementioned extremely sterile cleanroom conditions are required in order to manufacture LCD flatscreens. The cleanroom suitability of Manz's robotic system for handling glass substrates has been certified by the Fraunhofer IPA Institute. A further key component of safe and gentle handling of the glass substrates is the innovative "air-cushion" technology. This allows a virtually contact-free transport of the substrates, reliably preventing impurities and damage.
In addition to automation systems for substrate handling, automation systems for laser-cutting equipment and systems for transport and handling used in in-line inspection systems round out our product portfolio.
Through the formation of Manz Intech Machines Co. Ltd. in Taiwan, the Manz Group has expanded its product portfolio to include wet chemical processing equipment for the LCD industry. This includes processes such as etching, stripping, and cleaning for the manufacture of LCD displays. But our expertise also includes the process of recycling defective glass substrates known as rework processing. In addition, Intech manufactures systems for the PCB [printed circuit board] industry at another location in China. Besides the aforementioned processes, products for deburring and electroless deposition are also offered. These machines are used to produce circuit boards for electronic equipment.
>> Products of the division systems.aico
In the systems.aico division [automation intelligence components], our company sells systems and components which were developed predominantly for the systems.solar and systems.lcd divisions or are used primarily in those divisions. With the sale of OEM systems and components, the quantities of basic components – for example, robots – can be significantly increased. As a result, Manz Automation can utilize economies of scale and the resulting cost benefits.
In addition to the OEM systems, the systems.aico products also include a wide range of robotic equipment which is used in the manufacture of hard metal tools, sinter tools, and electronic products. Furthermore, testing and packaging equipment for disposable inserts are also part of this division's product portfolio. The main focus, however, lies in the handling of carbide reversing plates for metal, stone, and wood processing.
With regard to components, Manz Automation offers a product portfolio which allows a variety of automation solutions to be created, including industrial robotics, grippers, industrial computers, control software, and image-processing systems. The use of optical position recognition instead of mechanical centering and positioning units, for example, makes it possible to manufacture even the smallest batches economically.
Life-science products comprise a further field where the systems.aico division is active, and this includes all areas that deal directly or indirectly with human health. For example, products include lab-automation equipment for handling extremely small objects [vials and plate systems] as well as client-specific solutions. In manufacturing these products, Manz Automation sets new standards for the process safety and reliability of the developed systems.
In the future, this division's products will also include machines for the industrial mass production of lithiumion batteries. These batteries will mainly be used in electric and hybrid vehicles, which will be an attractive growth market in the coming years. In addition to the machines themselves, Manz will spur on the development of automation solutions and solutions for system integration, as well as manufacturing process planning for the battery manufacturers.
>> Products in the miscellaneous division
The miscellaneous division is the home for all products that have become an additional part of the Manz Group's product portfolio as a result of the acquisitions. Generally speaking, Manz Automation plans to retain these products as well as to continue business relationships with the clients of the respective companies. However, the margins which can be achieved in the market will have an impact on the scope of the product portfolio over the medium term.
With the acquisition of Intech Machines Co. Ltd., Manz Automation gained access to wet chemical processing equipment for the PCB industry, and this technology can also be applied to the systems.solar and systems.lcd divisions. At Manz Automation Slovakia, equipment for the semiconductor industry as well as equipment for manufacturing CDs and DVDs is manufactured on contract. Furthermore, at Manz Automation Tübingen GmbH [formerly: Christian Majer GmbH & Co. KG], machines are manufactured for processing paper, film, and packaging.
>> Research & Development
In the current fiscal year, we are concentrating heavily on research and development, because only the equipment suppliers who offer the most efficient machines will be successful in the markets of the future. Time and time again, Manz Automation has successfully proven its claim to technological leadership, and in the future we will continue to pursue the same approach. For this purpose, we have entered into important partnerships with Optomec, Rofin-Sinar Laser, and Masdar PV. As a result, innovative technologies from our partners were integrated into existing equipment as well as developed jointly, which led to improvements in the efficiency of solar cells and modules. In the future, the company will continue to intensify its work on increasing output through improved cell efficiency, higher product quality, and shorter setup times. In addition, a reduction in the use of materials and energy through the use of thinner wafers while, at the same time, improving breakage rates is also a goal that Manz Automation's developers shall pursue.
At the 24th European Photovoltaic Solar Energy Conference and Exhibition in Hamburg this September, Manz will design its trade show stand together with strategic partner Roth & Rau. At this exhibition, both companies will for the first time present themselves as a joint supplier of turnkey equipment for the manufacture of crystalline solar cells. In this context, a prototype of the new equipment for the wet chemical treatment of solar cells will be unveiled – the in-line phosphosilicate glass [PSG] etching system [oxide etching]. Using this technology, the layer which forms on the surface of the wafer during phosphorus diffusion and acts as an isolator can be removed. This newly developed system distinguishes itself particularly as a result of its low breakage rates and its economical use of chemicals in comparison to systems currently on the market. In addition, Manz will present the corresponding automation system at the exhibition, one of the company's long-term skills.
In the thin-film area, Manz was able to bring the TCO etching system, a product of Manz Intech, Taiwan, to product maturity. The first tests have already been completed successfully. By texturing the TCO layer, a significant increase in efficiency is possible. A further new development is the laser-edge ablation system for large substrates [of the 8.5 – 5.7 sq m generation], which has also already been delivered to the first client. In addition, in this segment the next generation of laser-structuring equipment with active groove control to achieve significantly higher accuracy and, therefore, improved efficiency is currently in development.
In the field of crystalline solar cells, we are currently undertaking research towards developing a laser diffusion process to generate selective emitters on the solar cells, which will achieve a significantly increased level of efficiency. But our R&D activities are also focused on developing a new aerosol jet printer for high throughput lines. This is the result of our partnership with Optomec, and is close to being delivered to a pilot client. The aforementioned projects all demonstrate the innovative ability and speed Manz possesses, both of which we are using this year to actively move forward with these new products. This will allow Manz Automation to be well equipped for the next cycle of innovation stemming from solar cell manufacturers, allowing us to benefit substantially from the recovery.
Our activities in the field of lithium-ion batteries comprise another new area of research. In this field, Manz will work in an "innovation alliance" with Li-Tec Battery to develop machines for the industrial manufacture of batteries. The goal of this research project is to explore new manufacturing technologies, and apply them to the demands of mass production. Manz Automation will contribute its expertise to a series of production stages which are to be developed and, at the same time, will also be responsible for the automation solutions used to manufacture the batteries.
In total, Manz Automation AG had a ratio of research costs to sales of 13.8%. If we only consider capitalized development costs, the research cost ratio totals 7.1%.
Notes to the results and analysis of the financial situation
Revenue Structure by Division – 6 Months 2009
Revenue Structure by Regions – 6 Months 2009
>> Earnings Position
The company's profit and loss statement is organized according to the total cost method.
In the first half of 2009, revenues decreased significantly from 101.6 million euros in the previous year to 28.3 million euros. This considerable decline is primarily the result of numerous orders being postponed due to the current market environment. These effects can be ascribed to the global recession as well as an unwillingness on behalf of the banks to invest in solar projects brought on by the financial crisis.
Compared to the same period last year, Manz Automation recorded significant declines in revenue in almost all segments as a result of the economic downturn. Thus, in the systems.solar division, the Manz Group generated revenues in the first six months of 2009 totaling 11.0 million euros, equal to 39.0% of total revenues [previous year: 59.1 million euros]. The thin-film segment was hit particularly hard, contributing only 1.5 million euros in revenues [previous year: 30.6 million euros]. This decline can be traced back to the comparatively high investment costs for a thinfilm solar module production line and the financing difficulties manufacturers of thin-film solar modules are currently facing.
The systems.lcd division accounted for 24.9% of the Manz Group's total revenues. This corresponds to segment revenues of approximately 7.0 million euros, down from 17.5 million euros last year.
In the systems.aico division, which is bundled into the subsidiary company Manz Automation Tübingen GmbH, the group generated 11.5% of total revenues, equal to 3.3 million euros [previous year: 5.8 million euros].
The new miscellaneous division, which was created as a result of the acquisitions carried out in 2008, accounted for a significant portion of total revenues, contributing 7.0 million euros or approx. 24.6% of total revenues, as compared to 19.2 million euros in the same period last year. Products from Intech Machines Co. Ltd. in Taiwan were responsible for the lion's share of revenues in this division, among them wet chemical processing equipment for the PCB industry.
The geographical revenues make it clear that all regions were significantly affected by the global economic and financial crisis. In Germany, the company generated revenues of 9.0 million euros after generating 29.4 million euros in the previous year [31.8% of total
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systems. lcd |
systems. aico |
others | |
| –7.8 | –3.2 | –0.8 | –0.7 |
ebit contributions by division 2009 in million euros
revenues]. At 50% of total revenues, Manz generated the largest share of revenues in Asia, with a total of 14.1 million euros. Manz posted revenues of 48.8 million euros in Asia during the same period last year. In the USA, revenues of approximately 0.3 million euros were achieved [previous year: 7.2 million euros]. Manz did not generate any revenues in the first half of 2009 in all other regions [previous year: 1.0 million euros].
Together with the changes in inventory of finished goods as well as the internally produced and capitalized assets within the scope of increased R&D investments, Manz Automation AG's total operating revenues total 38.1 million euros. This is equal to a decline of 62.8% compared to the same period last year [102.4 million euros].
As a result of our decline in revenues, material expenditures decreased to 21.6 million euros after totaling 61.1 million euros in the same period last year. Our cost of materials ratio also decreased to 56.6% [previous year: 59.6%]. This decline can be attributed to a reduction in the use of temporary workers. Consequently, our gross profit decreased in the reporting period from 43.4 million euros to 20.7 million euros. This includes other operating income totaling 4.1 million euros [previous year: 2.0 million euros], which is primarily the result of hedging transactions.
On the reporting date June 30, 2009, Manz had a total of 1,347 employees. In the course of reducing costs, the capacities at our international locations have already been adjusted [December 31, 2008: 1,513 employees]. The company plans on retaining the current level of personnel in order to fully satisfy the expected increased demand once the current crisis ends. Compared to the same period last year, personnel expenses increased from 18.3 million euros to 19.4 million euros. This is mainly due to the added employees Manz gained as a result of the acquisitions which were carried out yet only partly consolidated last year. In conjunction with our decline in revenues, the personnel costs ratio increased from 17.8% in the same period last year to 51.0%. In the first six months of the year, we carried out write-downs totaling 3.5 million euros [previous year: 1.8 million euros]. This figure primarily contains write-downs on fixed assets as well as internally produced and capitalized assets. The effects of our cost-cutting measures are beginning to be reflected in the other operating expenses. This comprise marketing and sales costs, particularly logistics costs, rental fees, costs for administration, as well as consulting costs, among other things. As a result, other operating expenses in the first half of the year decreased from 11.3 million euros last year to 10.3 million euros.
At 12.6 million euros, earnings before interest and taxes [EBIT] was negative in the first half of 2009 as a result of the existing cost structures and current overcapacities [previous year: 12.0 million euros].
Upon examining the individual divisions, the EBIT of the systems.solar division declined from 9.9 million euros to –7.8 million euros. The systems.lcd division recorded an EBIT of –3.2 million euros after 1.5 million euros in the same period last year. Earnings before interest and taxes in the systems.aico division totaled –0.8 million euros after 0.5 million euros last year. And in the new miscellaneous division, division EBIT equaled –0.7 million euros [previous year: 41,000 euros].
Interest-bearing financial liabilities, some of which are non-current, are held by the subsidiary companies. However, these interest expenditures are offset by current investments. In the first half of the year, income from financial assets totaled 444 thousand euros. Thus, earnings before taxes [EBT] also decreased from 11.4 million euros in the same period last year to –12.1 million euros this year.
After taxes and minority shares, the Group's earnings for the period totaled – 9.8 million euros. Based on an average of 4,478,145 shares outstanding, this corresponds to earnings per share of –2.08 euros [previous year: 2.41 euros per share, based on 3,603,161 shares].
>> Asset Position
As of the reporting date, total assets decreased during the first half of fiscal year 2009. On the reporting date June 30, 2009, they totaled 238.8 million euros, down from 266.5 million euros on December 31, 2008. At the same time, shareholder's equity on the balance sheet decreased as a result of the loss in the period from 191.2 million euros to 184.3 million euros. Nevertheless, as a result of the disproportionate reduction in liabilities, the equity ratio on the reporting date increased to 77.2%, up from 71.8% on December 31, 2008.
Non-current liabilities totaled 13.3 million euros at the end of the reporting period, compared to 18.3 million euros at the end of 2008. In addition to a reduction in deferred taxes, the reduction in noncurrent financial liabilities of the subsidiary Manz Intech Machines Co. Ltd. also played a significant role in this decrease. These liabilities now total 2.3 million euros, down from 4.8 million euros on December 31, 2008. Furthermore, pension reserves from Manz Automation Tübingen GmbH also decreased slightly as scheduled.
At the end of the first six months, current liabilities totaled 41.2 million euros, significantly lower than their total of 57.0 million euros on December 31, 2008. This was primarily the result of a decrease in accounts payable from 24.0 million euros to 15.0 million euros. The advance payments received also continued to decrease as a result of our current number of orders on hand, and totaled approximately 4.3 million euros on the reporting date [previous year: 3.3 million euros]. In addition, other liabilities decreased to 2.4 million euros [previous year: 6.5 million euros], particularly due to the payment of value-added tax liabilities in the reporting period. Current financial liabilities decreased from 13.0 million euros to 11.7 million euros, primarily as a result of a reduction in overdraft credit for Manz Intech Machines Co. Ltd. and Manz Automation Slovakia s.r.o.
On the asset side, non-current fixed assets increased slightly from 60.6 million euros to 62.3 million euros. At the same time, the deferred taxes on the asset side increased from 1.1 million euros to 1.8 million euros, caused in particular by the loss in the period.
On the other hand, current assets decreased from 205.9 million euros at the end of the 2008 fiscal year to 176.4 million euros. At the same time, inventories increased from 33.0 million euros in the previous year to 46.0 million euros, due to the assembly of semi-finished goods and standard assemblies. This increase should enable Manz to deliver goods quickly once the economic environment improves. Because of the slump in operations in the first half of 2009, accounts receivable also decreased from 101.4 million euros to 67.0 million euros. Liquid assets decreased from 33.9 million euros to 25.2 million euros due to Manz repaying a loan as well as increasing inventory on hand. Under consideration of the increased number of current securities held, the Group's net debt totaled – 45 million euros on June 20, 2009. Thus, Manz Automation has a sufficient amount of capital to carry out the investments planned for the reporting period and simultaneously absorb the operating losses.
>> Liquidity Position
Manz Automation AG generated a cash flow in a narrower sense [annual net income plus write-downs on fixed assets as well as an increase/decrease in longterm pension provisions] in the first six months of –6.4 million euros [previous year: 11.4 million euros], primarily caused by the losses in the period. At the same time, operating cash flow decreased by 1.7 million euros compared to the previous year, down to –2.9 million euros. This occurred as a result of a reduction in receivables and a simultaneous reduction in liabilities.
In the reporting period, cash flow from investment activities increased from –39.8 million euros last year to –2.0 million euros. This figure included a payment of 34.5 million euros for the purchase of a 70% majority interest in Intech Machines Co. Ltd. in Taiwan. Through the introduction of SAP systems in the first half year of 2009, the payments made for investments in intangible fixed assets: this figure rose from 2.2 million euros last year to 3.8 million euros this year.
Cash flow from financing activities decreased toward the end of the reporting period to –3.9 million euros from 36.9 million euros in the same period last year. As a result, cash and cash equivalents decreased from 33.9 million euros at the end of fiscal year 2008 to its current level of 25.2 million euros.
EVENTS AFTER THE BALANCE SHEET DATE
Manz Automation is expanding its commitment to the industrial manufacture of lithium-ion batteries. For example, on July 9, 2009, our company announced its participation in an industrial partnership within an "innovation alliance" to carry out "manufacturing research on high-performance lithium-ion batteries for electric mobility." Through our participation in this research project, Manz Automation has garnered an outstanding position from which we can establish ourselves as a long-term leading system supplier, even in this dynamic growth market.
The goal of this research project is to explore new manufacturing technologies and apply them to the demands of mass production. The electric mobility market can only succeed if high-quality lithiumion cells, batteries, and battery components can be consistently manufactured industrially, as well as if a sustained supply can be guaranteed. Within the scope of this project, both new industrial manufacturing technologies and automation solutions will be pursued and solutions for system integration and production process planning for battery cell manufacturers will be developed. As an industry partner in this research project, Manz Automation will contribute expertise for a series of production stages, which are to be developed. In this "innovation alliance," Manz also has the particular task of developing solutions for the manufacture of a lithium-ion battery cell stack and the testing of a finished cell. In this context, Manz Automation received an order valued at around 6.3 million euros for the research and development services that we will provide. At the same time, our company is responsible for automation solutions for manufacturing.
On July 31, 2009, our company announced the decision of the Supervisory Board to extend the employment contracts of CFO Martin Hipp [until February 28, 2013] and COO Volker Renz [until April 30, 2013], as well as the retirement of Otto Angerhofer, Head of the systems.aico division. The employment contracts were each extended for another three years ahead of schedule. Although retiring, Otto Angerhofer will continue to support the company as a consultant in order to ensure that our company handles this transition smoothly. We currently have no plans of filling the position that Mr. Angerhofer is vacating. In the future, the CEO Mr. Dieter Manz will assume the duties carried out by Mr. Otto Angerhofer.
Risk analysis and forecast
GROUP Interim REPORT | Risk analysis and forecast | 47
Manz Automation's opportunities and risks
There have been no significant changes to the opportunities and risks presented in the 2008 annual report and the quarterly report for Q1 2009.
Outlook
Outlook The current market environment is still characterized by the continuing economic crisis. As a result of the ongoing credit crunch and the feeling of insecurity which continues to plague consumer markets, an extremely low number of new and replacement investments are currently being made, especially in the solar industry. Nevertheless, there are growing indications that an economic low has been reached, and that companies and consumers are again ramping up investments. It remains to be seen whether this is only a brief rebound or the beginning of a sustained recovery.
The strong decline in the prices for solar cells and modules in the current year will soon require manufacturers to invest in new, modern production equipment. Old systems must be replaced, since they will no longer be able to produce at prices that are economically viable. In addition, as a result of technological advancements, grid parity is just within reach. Furthermore, the positive political environment, which sees subsidy programs for solar power in the USA, China, and Europe, is having a positive impact on the market's development. These factors form the basis for a new
growth spurt which will allow the photovoltaics industry to match the growth rates of the past. As one of the leading global equipment suppliers, Manz Automation can benefit from both of these developments.
However, it is hard to predict exactly when the true recovery will begin. Consequently, we have been confronted with a number of clients postponing orders, although we have not had many clients cancel orders outright. If our clients do follow through on the orders that we currently have logged for this year, our previously stated goal of achieving an even EBIT for fiscal year 2009 is still realistic. However, this will require a strong recovery in the solar industry in the second half of 2009, and the chances of this occurring have worsened in recent weeks. If this recovery fails to materialize, achieving an even EBIT for the fiscal year will no longer be a realistic goal.
To counteract this situation, we are beginning to see the measures that we have taken to reduce costs – such as implementing reduced working hours, compensatory time, and adjusting capacities – start to take effect. However, Manz Automation still wants to be well prepared for the future growth we described. For this reason, the manufacturing and personnel capacities we have created will, for the most part, be maintained. Because our expertise lies in the hands of our employees, and we will need this expertise once the economy recovers. That's why we are actually hiring highly qualified employees during this period to work on our research and development activities, in order to advance them more rapidly than before. Furthermore, having our production facilities in Eastern Europe and Asia means that Manz Automation AG has extremely economical manufacturing facilities at its disposal, which will continue to give us a competitive advantage with regard to costs, even after the crisis has ended. With an equity ratio of 77% and liquid assets totaling approximately 59.0 million euros, our company is well equipped to continue pursuing our long-term strategy, even in the current market phase.
The first positive effects are reaching us from Asia, where the outlook for the LCD segment has improved considerably. This is the result of the economic stimulus programs initiated by the Chinese government as well as the subsidization of LCD televisions. As a result, during the second half of the year, our manufacturing facilities in Asia will be operating at full capacity for the most part.
Our new commitment to the "innovation alliance" for the industrial manufacture of lithium-ion batteries highlights Manz Automation's research and development skills. Through our participation in this research project, Manz Automation has garnered an outstanding position from which we can establish ourselves as a long-term leading system supplier, even in this dynamic growth market. As a result of the considerable size of the market for this technology, Manz is creating a basis from which to generate further sustained revenues for the company in addition to those already coming from the LCD and solar industries. Thus, we calculate the market volume for equipment for the manufacture of lithium-ion batteries to total several million euros in the next five years. By entering this market, we are diversifying our operations to include another fast-growing clean-tech segment.
To summarize, Manz Automation will continue to systematically pursue its long-term strategy. The Managing Board looks toward the coming fiscal years with confidence, and believes our company is in a position to come out of the current crisis even stronger. Powered by an outstanding level of expertise, technological market leadership in many fields, and a solid capital structure, Manz Automation has an excellent foundation for a successful future.
Consolidated interim financial statements & notes
CONSOLIDATED Interim FINANCIAL STATEMENTs & NOTES | 55
Consolidated interim financial statements
| First half of 2009 |
First half of 2008 |
2nd Quarter 2009 |
2nd Quarter 2008 |
|
|---|---|---|---|---|
| Revenues | 28,276 | 101,600 | 11,789 | 62,993 |
| Changes in inventory | 7,836 | –537 | 3,783 | 1,319 |
| Internally produced and capitalized assets | 1,999 | 1,378 | 1,238 | 1,053 |
| Total operating revenues | 38,111 | 102,441 | 16,810 | 65,365 |
| Other operating income | 4,144 | 2,040 | 2,611 | 1,358 |
| Material expenditures | –21,557 | –61,101 | –11,625 | –40,797 |
| Gross profit/loss | 20,698 | 43,380 | 7,796 | 25,926 |
| Personnel expenses Amortization and depreciation |
–19,441 –3,547 |
–18,266 –1,771 |
–9,282 –1,825 |
–11,042 –1,143 |
| Other operating expenses | –10,268 | –11,320 | –4,284 | –7,300 |
| Earnings before interest and taxes [ EBIT ] | –12,558 | 12,023 | –7,595 | 6,441 |
| Result from equity-accounted financial investments | 1 | 5 | 6 | –5 |
| Financial income | 775 | 430 | 468 | 169 |
| Financial expenses | –332 | –1,082 | –126 | –811 |
| Earnings before taxes [ EBT ] | –12,114 | 11,376 | –7,247 | 5,794 |
| Taxes on income | 2,296 | –2,560 | 2,114 | –1,219 |
| Consolidated operating profit | –9,818 | 8,816 | –5,133 | 4,575 |
| Portion of earnings from minority interests | –483 | 143 | –80 | 167 |
| Portion of earnings from shareholders | ||||
| M anz Automation AG |
–9,335 | 8,673 | –5,053 | 4,408 |
| Earnings per share | ||||
| E arnings per share [undiluted ] in EUR per share |
–2,08 | 2,41 | –1,13 | 1,22 |
| E arnings per share [diluted ] in EUR per share |
–2,08 | 2,41 | –1,13 | 1,22 |
Consolidated Statement of Income in EUR tsd
Statement of comprehensive income in EUR tsd
| Consolidated comprehensive income after taxes | –9,818 | 8,816 | –5,133 | 4,575 |
|---|---|---|---|---|
| Other comprehensive income | ||||
| D ifference as a result of currency conversion |
530 | 467 | 522 | 729 |
| Changes to the fair value of securities | 3,382 | 33 | 3,652 | 109 |
| Changes to the fair value of cash flow hedges | –1,510 | –179 | 413 | –4 |
| D eferred financing costs |
0 | –3,863 | 0 | –3,863 |
| Changes to the valuation of share-based compensation | 60 | 0 | 30 | 0 |
| T ax effects from other comprehensive income |
260 | 1,126 | –315 | 993 |
| Other comprehensive income | 2,722 | –2,416 | 4,302 | –2,036 |
| Comprehensive income after taxes | –7,096 | 6,400 | –831 | 2,539 |
| Attributed to minority interests | –272 | 143 | –108 | 167 |
| Attributed to Manz Automation shareholders | –6,824 | 6,257 | –723 | 2,372 |
Consolidated balance sheet [ IFRS] in EUR tsd
| 06.30.2009 | 12.31.2008 | |
|---|---|---|
| Assets | ||
| Non-current assets | 62,319 | 60,562 |
| I ntangible assets |
43,798 | 42,858 |
| T angible assets |
16,221 | 16,147 |
| E quity-accounted financial investments |
314 | 313 |
| D eferred taxes |
1,826 | 1,055 |
| O ther non-current assets |
160 | 189 |
| Current assets | 176,434 | 205,941 |
| I nventories |
45,927 | 33,034 |
| Accounts receivable | 66,971 | 101,352 |
| I ncome tax receivables |
395 | 53 |
| D erivative financial instruments |
986 | 2,685 |
| O ther current receivables |
3,234 | 2,934 |
| Securities | 33,749 | 31,945 |
| L iquid assets |
25,172 | 33,938 |
| Total ass ets |
238,753 | 266,503 |
| Equity and Liab ilities |
||
| Equity | 184,335 | 191,228 |
| Share capital | 4,480 | 4,480 |
| Capital reserves | 144,182 | 144,122 |
| T reasury shares |
0 | –203 |
| Revenue reserves | 25,431 | 32,634 |
| Currency conversion | 933 | 614 |
| M anz Automation AG shareholders |
175,026 | 181,647 |
| M inority interests |
9,309 | 9,581 |
| Non-current liabilities | 13,265 | 18,261 |
| N on-current financial liabilities |
2,248 | 4,820 |
| N on-current deferred investment subsidies |
274 | 68 |
| F inancial liabilities from leases |
28 | 29 |
| P rovisions for pensions |
3,689 | 3,720 |
| O ther non-current provisions |
1,939 | 2,105 |
| D eferred taxes |
5,087 | 7,519 |
| Current liabilities | 41,153 | 57,014 |
| Current financial liabilities | 11,655 | 13,002 |
| Accounts payable | 15,014 | 24,038 |
| Advance payments received | 4,260 | 3,320 |
| I ncome tax liabilities |
3,067 | 3,529 |
| O ther current provisions |
4,785 | 6,379 |
| D erivative financial instruments |
0 | 188 |
| O ther liabilities |
2,338 | 6,512 |
| F inancial liabilities from leases |
34 | 46 |
| Total liab ilities |
238,753 | 266,503 |
consolidated cash flow statement in EUR tsd
| First half of 2009 | First half of 2008 | |
|---|---|---|
| Cash flow from operations | ||
| Annual profit or loss | –9,818 | 8,816 |
| Amortization/depreciation of non-current assets | 3,547 | 1,771 |
| Loss [+] / Profit [−] from at equity-accounted investments | –1 | –5 |
| Increase [+] / Decrease [−] in provisions for pensions and other non-current provisions |
–197 | 798 |
| Other non-cash income [−] and expenses [+] | 60 | 0 |
| Cash flow | –6,409 | 11,380 |
| Profit [−]/ Loss[+] from disposal of assets | –8 | –47 |
| Increase [−]/Decrease [+] in inventories, accounts receivable, and other assets |
19,302 | –19,748 |
| Increase [+]/Decrease [−] in accounts payable and other liabilities |
–15,777 | 7,207 |
| Cash flow from operations | –2,892 | –1,208 |
| Cash flow from investments | ||
| Incoming payments from the sale of non-current assets | 11 | 47 |
| Payments for investments in intangible assets and property, plant, and equipment | –3,778 | –2,207 |
| Payments for the acquisition of consolidated companies, minus liquid assets received |
0 | –39,570 |
| Incoming payments from the sale of securities | 11,465 | 6,162 |
| Payments for the purchase of securities | –9,656 | –4,264 |
| Cash flow from investments | –1,958 | –39,832 |
| Cash flow from financing activities | ||
| Proceeds from additions to epuity | 0 | 129 |
| Capital procurement costs [ pre-tax ] | 0 | –3,863 |
| Payments toward the repayment of finance lease agreements | –12 | –20 |
| Payments toward the repayment of non-current loans | –4,942 | –813 |
| Change in overdraft loans | 1,023 | 41,500 |
| Cash flow from financing activities | –3,931 | 36,933 |
| Cash and cash equivalents at the end of the period | ||
| Change in cash and cash equivalents affecting cash flow [ Subtotal 1 –3 ] | –8,781 | –4,107 |
| Change in cash and cash equivalents as a result of currency conversions | 15 | –8 |
| Cash and cash equivalents held on Jan. 1 | 33,938 | 18,888 |
| Cash and cash equivalents held on June 30 | 25,172 | 14,773 |
| Composition of cash and cash equivalents | ||
| Liquid assets | 25,172 | 14,773 |
| Cash and cash equivalents held on June 30 | 25,172 | 14,773 |
Statement of changes in consolidated equity for the interim financial statements as of June 30, 2009 in EUR tsd
| Share capital | reserves Capital |
Treasury shares | Revenue reserves |
conversion Currency |
Manz Automa shareholders tion AG |
Minority interests |
equity Total |
|||
|---|---|---|---|---|---|---|---|---|---|---|
| Aggregate earnings |
Market valuation Securities |
Cash flow hedges |
||||||||
| As of Jan. 1, 2009 | 4,480 | 144,122 | – 203 | 33,483 | – 2,650 | 1,801 | 614 | 181,647 | 9,581 | 191,228 |
| Total comprehensive income for the period | 60 | –9,335 | 3,218 | –1,086 | 319 | –6,824 | –272 | –7,096 | ||
| Sale of treasury shares | 203 | 203 | 203 | |||||||
| As of June 30, 2009 | 4,480 | 144,182 | 0 | 24,148 | 568 | 715 | 933 | 175,026 | 9,309 | 184,335 |
| As of Jan. 1, 2008 | 3,583 | 35,555 | 0 | 13,103 | 70 | 323 | 13 | 52,647 | 0 | 52,647 |
| Total comprehensive income for the period | –2,778 | 8,673 | 24 | –129 | 467 | 6,257 | 143 | 6,400 | ||
| Issue of subscribed capital | 897 | 111,425 | 112,322 | 112,322 | ||||||
| Minority interests from business combinations |
0 | 7,999 | 7,999 | |||||||
| As of June 30, 2008 | 4,480 | 144,202 | 0 | 21,776 | 94 | 194 | 480 | 171,226 | 8,142 | 179,368 |
Segment reporting for divisions as of June 30, 2009, in EUR tsd
| systems.solar | systems.Icd | systems.aico | Administration / | Consolidation | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Other | Other | Group | ||||||||||||
| Through Q2 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| Revenues from third parties |
11,023 | 59,045 | 7,035 | 17,524 | 3,257 | 5,824 | 6,961 | 19,207 | 0 | 0 | 28,276 101,600 | |||
| Revenues with other segments |
6,810 | 5,220 | – 6,810 – 5,220 | |||||||||||
| EBIT [ before allocat ing costs to adminis trative duties ] |
3,329 | 24,108 – 2,450 | 5,127 | – 332 | 834 | 233 | 1,879 –13,338 – 19,925 | – 12,558 | 12,023 | |||||
| EBIT [after allocating costs to administrative duties] |
– 7,839 | 9,942 – 3,177 | 1,531 | – 799 | 509 | – 743 | 41 | – 12,558 | 12,023 | |||||
| Segment assets | 131,587 | 72,748 | 41,290 | 48,762 | 10,789 | 11,056 | 12,859 | 26,654 | 42,228 | 152,533 | 238,753 311,753 | |||
| Segment liabilities | 6,956 | 27,070 | 8,168 | 7,524 | 1,125 | 1,657 | 2,512 | 6,496 | 35,657 | 89,639 | 54,418 132,386 | |||
| Net assets | 124,631 | 45,678 | 33,122 | 41,238 | 9,664 | 9,399 | 10,347 | 20,158 | 6,571 | 62,894 | 184,335 179,367 | |||
| Capital additions | 2,786 | 15,509 | 182 | 10,901 | 240 | 3,218 | 28 | 3,394 | 542 | 336 | 3,778 | 33,358 | ||
| Write-downs | 1,658 | 718 | 574 | 328 | 414 | 324 | 416 | 269 | 485 | 132 | 3,547 | 1,771 | ||
| Employees [ annual average ] |
258 | 184 | 292 | 240 | 119 | 72 | 407 | 394 | 311 | 257 | 1,387 | 1,147 |
Segment reporting for regions as of June 30, 2009, in EUR tsd
| Germany | Rest of Europe | Asia | America | regions Other |
Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Through Q2 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
| 8,981 | 29,390 | 4,856 | 15,225 | 14,125 | 48,790 | 314 | 7168 | 0 | 1,027 | 28,276 101,600 | ||
notes to the consolidated interim financial statements
62 | CONSOLIDATED Interim FINANCIAL STATEMENTs & NOTES | Notes to the consolidated interim financial statements
I. BASIC PRINCIPLES >>
The Manz Automation AG ["Manz AG"] headquarters are located in Steigaeckerstrasse 5 in 72768 Reutlingen, Germany. The business operations of Manz Automation AG and its subsidiary companies ["Manz Group" or "Manz"] consist of developing and manufacturing systems and components for automation and quality control. The systems are primarily used for the manufacture of solar cells and LCD flat screens. Shares in Manz Automation AG are traded in the Prime Standard segment of the Frankfurt Stock Exchange.
These consolidated interim financial statements dated June 30, 2009, were prepared according to the International Financial Reporting Standards [IFRS] established by the International Accounting Board [IASB] as approved for use in Europe by the EU. The consolidated interim financial statements were subjected to an auditor's review.
There were no changes to the accounting and valuation methods as compared to the annual financial statements dated December 31, 2008. A detailed description of these methods was published in the Notes to the 2008 Consolidated Financial Statements.
The following standards were first applied in fiscal year 2009:
IAS 1 "Presentation of Financial Statements" requires a statement of comprehensive income which includes the income and expenses previously recorded directly to equity and not affecting net income [other comprehensive income]. In the course of exercising our option in accordance with IAS 1.81, Manz AG has chosen to present all income and expense items in a period in two statements: a separate income statement and a transition from consolidated earnings to a comprehensive result which includes those parts of the result for the period which do not affect income [statement of comprehensive income]. In this context, we adjusted our presentation of the statement of changes in equity and the respective comparison periods.
IFRS 8 "Operating Segments" requires that the disclosure of information regarding the Group's operating segments be carried out in accordance with the "management approach," and replaces the requirement to use primary [operating segments] and secondary [geographic segments] segment reporting formats for the group. The evaluation of the requirements set forth in IFRS 8 resulted in no changes to the identified operating segments compared to fiscal year 2008.
The consolidated interim financial statements were prepared in euros. If not otherwise noted, all amounts are shown in thousands of euros.
64 | CONSOLIDATED Interim FINANCIAL STATEMENTs & NOTES | Notes to the consolidated interim financial statements | II. BASIS OF CONSOLIDATION | III. KEY EVENTS IN THE PERIOD UNDER REVIEW
II. BASIS OF CONSOLIDATION >>
Manz Automation AG's consolidated financial statements include all of the companies for which Manz AG can either directly or indirectly determine the financial and operational policy ["controlling" relationship]. In addition to Manz Automation AG, the group of consolidated companies includes the following subsidiaries:
| Fully consolidated companies | ||||
|---|---|---|---|---|
| Manz Automation Tübingen GmbH | Tuebingen/Germany | 100.0 | ||
| Helmut Majer Verwaltungsgesellschaft mbH | Tuebingen/Germany | 100.0 | ||
| Manz Automation Inc. | North Kingstown/USA | 100.0 | ||
| Manz Automation Hungary Kft. | Debrecen/Hungary | 100.0 | ||
| MVG Hungary Kft. | Debrecen/Hungary | 100.0 | ||
| anz Immo Hungary Kft. 1] M |
Debrecen/Hungary | 100.0 | ||
| Manz Automation Slovakia s.r.o. | Nove Mesto nad Vahom/Slovakia | 90.0 | ||
| Manz Automation Spain S.L. | Madrid/Spain | 100.0 | ||
| Manz Automation Asia Ltd. | Hong Kong | 100.0 | ||
| anz Automation Taiwan Ltd. 2] M |
Hsinchu/Taiwan | 100.0 | ||
| anz Automation [Shanghai] Co. Ltd. 2] M |
Shanghai/China | 100.0 | ||
| anz Automation India Private Limited 2] M |
New Delhi/India | 75.0 | ||
| anz Intech Machines Co. Ltd. 2] M |
Chungli/Taiwan | 75.6 | ||
| ntech Enterprises [B.V.I.] Co. Ltd. 3] I |
Road Town/British Virgin Islands | 75.6 | ||
| ntech Machines [B.V.I.] Co. Ltd. 3] I |
Road Town/British Virgin Islands | 75.6 | ||
| ntech Machines [Suzhou] Co. Ltd. 4] I |
Suzhou/China | 75.6 | ||
| Qinhuangdao Intech Machines Ltd. 4] | Qinhuangdao/China | 75.6 | ||
| ntech Technical [Shenzhen] Co. Ltd. 4] I |
Shenzhen/China | 75.6 | ||
| Consolidation at equity | ||||
| Axystems Ltd. | Petach-Tikva/Israel | 24.0 |
1] via MVG Hungary Kft. [as of December 31, 2008: via Manz Automation Hungary Kft.] 2] via Manz Automation Asia Ltd. 3] via Manz Intech Machines Co. Ltd. 4] via Intech Machines (B.V.I.) Co. Ltd.
III. KEY EVENTS IN THE PERIOD UNDER REVIEW >>
In the first six months of fiscal year 2009, the Manz Group's revenues decreased by 72% from 101.6 million euros in the same period last year to 28.3 million euros. Total operating revenues declined by 63% to 38.1 million euros.
Earnings before interest and taxes [EBIT] declined from 12.0 million euros in the same period last year to –12.6 million euros.
IV. NOTES TO THE INDIVIDUAL ITEMS IN THE INCOME STATEMENT >>
Other operating income
| 06.30.2009 | 06.30.2008 | |
|---|---|---|
| EUR tsd | EUR tsd | |
| Capital gains | 2,956 | 1,355 |
| Income from the liquidation of reserves | 268 | 105 |
| Income from the sale of investments | 9 | 55 |
| Subsidies | 232 | 88 |
| Changes to the revaluation of accounts receivable | 224 | 0 |
| Other | 455 | 437 |
| 4,144 | 2,040 |
Material expenditures
| 06.30.2009 EUR tsd |
06.30.2008 EUR tsd |
|
|---|---|---|
| Cost of raw materials and supplies and purchased goods | 18,710 | 45,502 |
| Expenditures for third-party services | 2,847 | 15,599 |
| 21,557 | 61,101 |
Other operating expenses
| 06.30.2009 EUR tsd |
06.30.2008 EUR tsd |
|
|---|---|---|
| Advertising and travel expenses | 1,426 | 2,090 |
| Outgoing freight, packaging | 720 | 1,405 |
| Rent and leasing | 1,814 | 1,150 |
| Commissions | 392 | 940 |
| Legal and consulting costs | 391 | 741 |
| Insurance | 320 | 331 |
| Capital losses | 657 | 489 |
| Changes to the revaluation of accounts receivable | 1,022 | 0 |
| Other | 3,526 | 4,174 |
| 10,268 | 11,320 |
Taxes on income
Income taxes include both actual and deferred income taxes from temporary differences and existing tax loss carryforwards.
Income taxes are composed of the following items:
| 06.30.2009 EUR tsd |
06.30.2008 EUR tsd |
|
|---|---|---|
| Deferred tax liabilities/income [−] | –466 | 237 |
| Deferred tax liabilities/income [−] | –1,830 | 2,323 |
| –2,296 | 2,560 |
66 | CONSOLIDATED Interim FINANCIAL STATEMENTs & NOTES | Notes to the consolidated interim financial statements | V. NOTES TO THE INDIVIDUAL ITEMS IN THE INCOME STATEMENT
V. NOTES TO THE INDIVIDUAL ITEMS IN THE INCOME STATEMENT >>
Intangible assets
| 06.30.2009 EUR tsd |
12.31.2008 EUR tsd |
|
|---|---|---|
| Licenses, software and similar rights, and assets | 14,491 | 11,531 |
| Capitalized development costs | 7,412 | 6,573 |
| Goodwill | 21,895 | 21,913 |
| Advance payments made | 0 | 2,841 |
| 43,798 | 42,858 |
Tangible assets
| 06.30.2009 EUR tsd |
12.31.2008 EUR tsd |
|
|---|---|---|
| Properties and buildings including buildings on third-party properties | 8,129 | 7,785 |
| Technical equipment and machinery | 3,525 | 4,499 |
| Other equipment, furniture, and office equipment | 4,360 | 3,620 |
| Advance payments made | 207 | 243 |
| 16,221 | 16,147 |
Inventories
| 06.30.2009 EUR tsd |
12.31.2008 EUR tsd |
|
|---|---|---|
| Raw materials and supplies | 15,949 | 13,602 |
| Goods in process, work in progress | 23,578 | 12,165 |
| Finished goods, products | 770 | 4,518 |
| Advance payments made | 5,630 | 2,749 |
| 45,927 | 33,034 |
Accounts receivable
| 06.30.2009 EUR tsd |
12.31.2008 EUR tsd |
|
|---|---|---|
| Future receivables from non-current construction contracts | 33,413 | 29,658 |
| Accounts receivable | 33,558 | 71,694 |
| 66,971 | 101,352 |
Future receivables from non-current construction orders, accounted for according to their percentage of completion, are determined as follows:
| Manufacturing costs including outcome of the contract for non-current construction contracts | 53,491 | 50,462 |
|---|---|---|
| minus advance payments received | –20,078 | –20,804 |
| 33,413 | 29,658 |
Other current receivables
| 06.30.2009 | 12.31.2008 EUR tsd |
|
|---|---|---|
| EUR tsd | ||
| Tax receivables [not income taxes] | 1,442 | 854 |
| Receivables – personnel | 80 | 119 |
| Accrued interest | 433 | 483 |
| Other accruals and deferrals [primarily from insurance] | 474 | 458 |
| Other | 805 | 1,020 |
| 3,234 | 2,934 |
Equity
Changes to the Group's individual equity items are detailed separately in the "Consolidated Statement of Changes to Equity."
Share capital
Share capital totals 4,480,054 euros [December 31, 2008: 4,480,054 euros] and is divided into 4,480,054 registered, common, no-par shares. The face value of a no-par share equals 1.00 euro.
There were no changes in share capital in the first half of 2009.
Capital reserves
The capital reserves primarily contain payments from shareholders pursuant to Article 272, Paragraph 2, No. 1 of the German Commercial Code, minus financing costs after taxes.
The increase in the first half of 2009 totaling 60,000 euros pertains to the allocation of funds from share-based compensation [Manz-Performance-Plan 2008].
Treasury shares
All treasury shares were distributed in the reporting period within the scope of the Manz Performance Plan 2008.
68 | CONSOLIDATED Interim FINANCIAL STATEMENTs & NOTES | Notes to the consolidated interim financial statements | VI. KEY EVENTS OF PARTICULAR IMPORTANCE OCCURRING AFTER THE END OF THE REPORTING PERIOD | VII. Further Information
VI. KEY EVENTS OF PARTICULAR IMPORTANCE OCCURRING AFTER THE END OF THE REPORTING PERIOD >>
On July 9, 2009, Manz Automation AG announced its participation in an industrial partnership within an "innovation alliance" to carry out "manufacturing research on high-performance lithium-ion batteries for electric mobility." Through our participation in this research project, our company has garnered an outstanding position from which we can establish ourselves as a long-term leading system supplier, even in this dynamic growth market.
Otherwise, no further events occured after the reporting date which could have an impact on our company's financial position and results of operations.
VII. Further Information >>
Employees
In the first half of 2009, the Manz Group had an average of 1,387 employees [June 30, 2008: 1,147 employees].
Managing Board
Dieter Manz, Dipl. Ing. [FH], CEO Martin Hipp, Dipl.-Kaufmann, CFO Volker Renz, Dipl. Ing. [FH], COO Otto Angerhofer, Dipl. Ing. [FH]
Supervisory Board
Dr. Jan Wittig [Chairman], Attorney-at-law Partner at Dr. Schaudt und Kollegen, Stuttgart, Germany
Prof. Dr. Heiko Aurenz, Dipl. oec. [Deputy Chairman], Managing Partner of Ebner Stolz Mönning Bachem Unternehmensberatung GmbH, Stuttgart, Germany
Prof. Dr.-Ing. Dr. h.c. mult. Rolf D. Schraft
RESPONSIBILITY STATEMENT
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the shortened interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected performance of the Group for the remainder of the fiscal year.
Reutlingen, August 10, 2009
The Managing Board of Manz Automation AG
Dieter Manz Martin Hipp Volker Renz Otto Angerhofer Chairman of the Managing Board
REVIEW REPORT
To Manz Automation AG, Reutlingen:
We have reviewed the condensed consolidated interim financial statements – comprising the balance sheet, condensed income statement, cash flow statement, statement of recognised income and expense and selected explanatory notes – and the interim group management report of Manz Automation AG, Reutlingen, for the period from January 1st, 2009 to June 30, 2009 which are part of the half-year financial report pursuant to § [Article] 37w WpHG ["Wertpapierhandelsgesetz": German Securities Trading Act]. The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Managing Directors. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] [IDW]. Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Reutlingen, August 10, 2009
alltax gmbh Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft
Klaiber Aigner Wirtschaftsprüfer Wirtschaftsprüfer
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Manz Automation AG
Steigaeckerstrasse 5 D-72768 Reutlingen Fon +49 [0] 7121 9000-0 Fax +49 [0] 7121 9000-99 [email protected]