Quarterly Report • Nov 14, 2017
Quarterly Report
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TOTAL REVENUES INCREASED TO EUR 541 MILLION (+7%) EBITDA INCREASED TO EUR 41.6 MILLION (+11%) EBIT INCREASED TO EUR 31.7 MILLION (+11%) NET PROFIT INCREASED TO EUR 20.6 MILLION (+19%)
OPTION EXERCISED: ESA/EU ORDERING A FURTHER FOUR GALILEO SATELLITES
FEDERAL REPUBLIC OF GERMANY AWARDED A CONTRACT FOR ELECTRO-OPTICAL RECONNAISSANCE SATELLITES
LUXSPACE DEVELOPING TRITON-X MICRO-SATELLITE PLATFORM
MT AEROSPACE: NEW TYPE OF CFRP BOOSTER CASING FOR ARIANE 6 SUCCEEDED IN BURSTING TEST
OHB SE is a European space flight and technology Group and one of the most important independent forces in European aviation/aerospace industry. With more than 35 years of experience in developing and executing innovative space technology systems and projects and its range of specific aviation/aerospace and telematics products, the OHB Group is superbly positioned to face international competition.
Over the last few years, it has broadened its geographic footprint within Europe and now has facilities in important ESA member countries. These strategic decisions on locations allow the Group to participate in numerous European programmes and missions. The two "Space Systems" and "Aerospace + Industrial Products" business units reflect the convergence of these activities and the focus on specific core skills.
The "Space Systems" business unit focuses on developing and executing space projects. In particular, it is responsible for developing and fabricating low-orbiting and geostationary small satellites for navigation, research, communications and earth observation including scientific payloads. Its manned space flight activities chiefly entail the assembly and operation of the International Space Station ISS. The exploration segment works on studies and models for exploring our solar system, primarily the Moon and Mars. In addition, efficient reconnaissance satellites and broadband wireless transmission of image data form core technologies for security and reconnaissance.
The "Aerospace + Industrial Products" business unit is primarily responsible for fabricating aviation and space products as well as other industrial activities. In this area, OHB has established itself as a leading supplier of aerospace structures for the aviation and space industry; among other things, it is the largest German vendor of components for the Ariane 5 programme. In addition, OHB is an experienced vendor of mechatronic systems for antennas and telescopes and is involved in several major radio telescope projects. OHB telematics systems serve the logistics industry around the world by offering efficient transport management and consignment tracking facilities.
The third quarter of the current year was again characterized by sustained momentum across the OHB Group as well as a high number of new orders. On June 22 of this year, ESA and the European Commission awarded OHB System AG a contract for the assembly of a further eight Galileo navigation satellites for around EUR 324 million. This was followed on October 5 by a further contract for an additional four Galileo satellites worth around EUR 158 million. This brings to 34 the total number of Galileo FOC* satellites supplied by OHB and testifies once more to the high quality of the navigation satellites already delivered.
On a particularly encouraging note, the responsible office of the Federal Republic of Germany awarded a contract to OHB System AG on November 8 for the installation of a satellite system for global electro-optical reconnaissance. The contract has a budget of up to EUR 400 million. What makes this contract award so special is that it shows that OHB is now a competent technology partner for the Federal Republic of Germany in both radar-based and electro-optical reconnaissance.
Further promising order receipts, especially for studies, the provision of services and the execution of development services – such as the innovative Triton-X microsatellite platform – demonstrate the technological skills and future-oriented research and development activities of the OHB Group. We are driven by scientific curiosity and the will to view disruptive developments as opportunities and to convert them into business models. In doing so, we are aided by our expertise and our management's long-standing experience. We want to encourage school students, undergraduates and start-ups to explore new trends and developments. On the one hand, we see ourselves as an incubator of innovative space technologies while, on the other, we produce and operate proven and high-quality leading-edge technologies for our customers. Logically enough, this is increasingly also generating service business with our customers in different areas via various subsidiaries. Pooling and consolidating these services will be a challenge for the coming year.
For the first time, we arranged for a detailed identification of our institutional and private investors in the quarter under review. The summarised results of this report can be found on the pages 4 and 5.
At the end of the quarter on September 30, 2017, OHB SE companies had consolidated order books worth EUR 2,049 million, equivalent to a substantial increase over the end of 2016 (EUR 1,560 million).
Given the high order backlog and the given upbeat business performance at the end of the first nine months, we assume that the Group's net assets and financial condition will remain strong and reaffirm our full-year guidance for 2017.
Bremen, November 14, 2017
The Management Board
The benchmark German equity index DAX entered 2017 at 11,598 points. It passed 12,000 points for the first time in its history in the first quarter before going on to capture the 13,000-point mark on October 12 and reaching a historical high of 13,525 points on November 7, 2017. This marks an increase of just under 17% since the beginning of the year.
OHB stock rose from EUR 18.49 at the beginning of January to EUR 40.89 at the end of September. With gains of more than 120 %, it outperformed the TecDAX as well as the DA X . The stock hit a histor ical high of EUR 47.48 on October 16 of this year.
In the reporting period, average daily trading volumes came to 15,348 shares (Xetra plus floor trading), substantially above the previous year's figure of 4,634.
At the annual general meeting held on May 16, 2017, the shareholders passed a resolution to authorise the distribution of a dividend of EUR 0.40 per dividend-entitled share. This amount was unchanged over the previous year.
As of September 30 of this year, OHB AG's treasury stock comprised a total of 80,496 shares, equivalent to 0.46 % of its issued capital.
| September 30, 2017 | Shares | Change in Q3 |
|---|---|---|
| Christa Fuchs, chairwoman of the Supervisory Board |
1,401,940 | – |
| Prof. Heinz Stoewer, member of the Supervisory Board |
1,000 | – |
| Marco R. Fuchs, chairman of the Management Board |
6,046,610 | – |
| Dr. Fritz Merkle, member of the Management Board |
1,000 | – |
In addition, Volpaia Beteiligungs-GmbH held 3,730,170 shares as of September 30, 2017. Christa Fuchs held 20% and Marco R. Fuchs 60% of the capital of Volpaia Beteiligungsgesellschaft as of the reporting date.
| in EUR | 9M/2017 | 9M/2016 |
|---|---|---|
| High, Xetra | 40.89 | 20.78 |
| Low, Xetra | 18.27 | 17.02 |
| Closing price, Xetra (final trading day of the period) |
40.89 | 18.35 |
| Average daily trading volumes (XETRA + floor) |
15,348 | 4,634 |
| Market capitalization, Xetra (final trading day of the period) |
714 million | 321 million |
| Number of shares | 17,468,096 | 17,468,096 |
For the first time, we arranged for a detailed identification of our institutional and private investors in the quarter under review in order to intensif y efforts to attract new investors and to achieve closer relations with existing ones.
All told, it was possible to identify just under 96% of all shareholders and shareholder groups:
| 69.72% held by the Fuchs family pool |
|---|
| 12.96% held by institutional investors |
| 11.74% held by private investors |
| (11.50% in Germany) |
| 1.05% held by banks for trading |
| 0.46% held by OHB SE as treasury stock |
A detailed regional analysis of the institutional investors shows that these are mainly based in North America, continental Europe, the United Kingdom and Ireland as well as Germany.
As usual, the Management Board of OHB SE provided preliminary guidance for the current year during the capital market day held at the Group's head office in Bremen on February 15. The members of the Management Board and the directors of the individual segments briefed analysts, investors, banks and business journalists on the status of current projects and recent market trends. This was followed by a tour of the integration halls, during which the guests were able to view the clean rooms in which work is performed on satellites in various projects.
The Company published its consolidated financial statements for 2016 on March 21, 2017, holding a press conference in Bremen followed by an analyst conference in Frankfurt am Main on the same day.
OHB SE attended capital market conferences in Lyon (France), Baden-Baden, Frankfurt and Düsseldorf in 2017. In addition, further road shows in Frankfurt and Düsseldorf provided investors with an insight into the current projects and developments at OHB SE.
On August 16, 2017, OHB SE received a letter from Wyser-Pratte-Management Company (WPMC). Written by the company's owner Guy P. Wyser-Pratte, the letter was forwarded to a number of media in the form of a press release on the follow ing day. OHB SE responded to the issues raised in the letter concerning its structure, governance and strategy in a reply dated August 24, 2017, which was published on OHB SE's website to simultaneously inform all OHB SE's shareholders about this. In the ensuing weeks, OHB SE received a further three letters from WPMC, which raised additional questions mainly pertaining to the issues already addressed in the first letter. The Management Board of OHB SE replied to each of these letters in writing.
FROM JANUARY 1 THROUGH OCTOBER 30, 2017 (INDEX-TIED)
| Bank | Date | Target Price | Recommendation |
|---|---|---|---|
| Bankhaus Lampe | November 10, 2017 | 50.00 | Buy |
| equinet Bank | November 10, 2017 | 32.00 | Neutral |
| Commerzbank | November 7, 2017 | 31.00 | Reduce |
| DZ Bank | November 6, 2017 | 52.00 | Buy |
| HSBC Trinkaus & Burkhardt | October 26, 2017 | 36.00 | Sell |
Ulrich Schulz left OHB SE's Management Board effective July 31, 2017 for age reasons. As a pioneer and man of the first hour – and definitely OHB's very first engineer – he joined OHB Hydraulik Bremen (OHB), which Christa Fuchs had acquired in December 1981, in 1982 as employee number six. Still a young aviation engineer, he developed a hydraulic drive for a ship at a time when preliminary ideas for space projects were already emerging. In 1985, OHB received its first contract from ESA as a supplier for the Spacelab space laboratory after prevailing over established competitors.
In 2000, Schulz was appointed to the Management Board of OHB Teledata AG, which was floated on the stock exchange in March 2001. As a member of the holding company's Management Board from 2002, he has overseen OHB's ascent to become a successful space technology company. The Management Board and the Supervisory Board as well as all contemporaries and staff members thank Ulrich Schulz for his contribution and decades of loyal and successful commitment to the Group. In the future, Ulrich Schulz will be assisting OHB SE with selected project in an advisory capacity.
On September 14, 2017, the Bremen City University of Applied Sciences presented Christa Fuchs with the 15th AMW award in recognition of her "outstanding career achievements and her social and honorary activities" in the Hanseatic City of Bremen. Roughly 100 guests joined Christa Fuchs for a reception in OHB's Luna Hall.
The AMW award is bestowed by the Management and Business Promotion Taskforce at the Bremen City University of Applied Sciences and does not involve any endowment. It was awarded to Christa Fuchs in recognition of her contribution to OHB SE as well as her honorary activities.
The following workshop dealt with the relations between "space, OHB and Kazakhstan". Speeches were given by the ambassador of the Republic of Kazakhstan in Germany S.E. Bolat Nussupov, the Bremen Senator of Economics Martin Günthner and the Vice-Chancellor of the university Prof. Karin Luckey. The tribute to Christa Fuchs was held by Prof. Bernd-Artin Wessels, the recipient of the AMW Award in 2012. The emotional lecture was held by Prof. Indulis Kalnins of the Bremen City University of Applied Sciences, a former employee of OHB System AG.
On September 14, 2017, the Bremen City University of Applied Sciences presented Christa Fuchs, chairwoman of the Supervisory Board of OHB SE, with the AMW award in recognition of her "outstanding career achievements and her social and honorary activities" in the Hanseatic City of Bremen.
"Intensive sharing across our industry particularly on future issues and technologies will help us to determine where we as a Group can make a contribution and what key skills will be required in the future," said OHB SE Management Board member Dr. Fritz Merkle, describing the beneficial opportunities for dialogue at this year's IAC Congress.
With around 4,000 participants, the International Astronautical Congress (IAC) is the largest annual space congress in the world. Devoted to providing a platform for intensive discussion between space agencies, the space industry and research institutes on future trends and technologies in space, this year's congress was held from September 25–29, 2017 in the South-Australian Metropolis Adelaide.
Management Board members and experts from nearly all OHB Group companies held more than 20 presentations on current projects as well as future developments such as the planned Ariane 6 launch vehicle, further development of the SmallGEO satellite platform, solutions for space debris, scientific missions to explore space, the Moon and Mars as well as basic physics. They were accompanied by a preview of future earth observation systems and new approaches in telecommunications, navigation and services as well as "new space", a topic of major interest in Australia on which OHB was able to report thanks to projects which it had completed.
IAC will be coming to Bremen, the "City of Space", from October 1–5 in 2018. Together with ZARM and the State of Bremen, the German Aerospace center (DLR), OHB System AG, MT Aerospace, Airbus Defence and Space and ArianeGroup will be joining forces for IAC 2018 to form Team Germany in order to highlight the crucial importance that space has for Bremen as an economic hub and for the rest of Germany.
OHB was one of the sponsors of the "MoreSpace" conference held on October 23, 2017 at the Park Hotel in Bremen by regional newspaper Weser Kurier. The purpose of the congress was to additionally strengthen Bremen's status as a leading hub in the German and European space industry. The German Federal Minister of Economics and Technology, Brigitte Zypries, the Chairman of the Senate of the Free Hanseatic City of Bremen, Dr. Carsten Sieling, Senator for Economics of the Free Hanseatic City of Bremen, Martin Günthner, as well as numerous space experts attended the congress. OHB was represented by CEO Marco Fuchs and Management Board member Dr. Fritz Merkle.
The OHB Group had a stand of its own at the largest European space technology fair "Space Tech Expo Europe" in Bremen. Taking place on October 24–26 at the Bremen fair grounds, it is Europe's leading B2B space technology event for space vehicles, satellites, launchers and related technologies. Experts from OHB were sought-after speakers and participants in numerous discussions. OHB Management Board member Dr. Fritz Merkle held a key-note speech on the development of space to open the exhibition. On the first day of the exhibition, several hundred guests attended a joint reception organised by OHB and the City of Bremen under the motto "City of Space".
65 students, young professionals and people interested in space and mobility issues formed cross-disciplinary and international teams at the cross-roads of space, automotive engineering and logistics to develop new business ideas for addressing current and future challenges. At the first INNOspace® Weekend on September 15–17, 2017 in Cologne, ten teams were given 60 hours to present their ideas. After this, they had to convince a jury of experts. The teams were advised by more than 30 mentors and specialists from the international space and mobility community.
Two winning teams now have an opportunity of pitching their business idea to OHB Venture Capital GmbH to assess its viability as a start-up.
Team "Crop Spy"
The six-strong "Crop Spy" team is offering farmers in developing countries an app for smartphones and notebooks which interprets earth observation data for agricultural purposes and offers farmers specific recommendations.
The eight-strong "Take me home" team presented an idea for an autonomous mobile vehicle for elderly and in their mobility handicapped people that can transport shopping or be used as a walker or support /seat and knows its own way home.
The Space Administration of the German Aerospace Center (DLR) launched the INNOspace® initiative in 2013 to leverage innovation potential and synergistic effects from cross-sector technologies more effectively and systematically. Since 2014, INNOspace® has been part of the German Federal Government's high-tech strategy as a measure defined in the National Space and Innovation Programme organised by the Federal Ministry for Economic Affairs and Energy.
Team "Take me home"
secondary mission, they were required to demonstrate their creativity as well as
their understanding of physics and engineering by implementing complex missions in the confined space of a can.
Individual components: The CanSat is no larger than a beverage can and weighs around 350 grammes. It is placed in a sleeve and then integrated in the launcher. A parachute is used to slow the payload, allowing it to land softly and safely so that it can then be recovered.
Ten groups of school students from all over Germany met in Bremen, the City of Space, for the fourth time on September 25–29, 2017 to launch their own research satellites. Supported by the German Space Agency DLR), numerous sponsors and patrons as well as OHB, the school students were given seven months to independently develop, build and exhaustively test their mini-satellites.
The highlight of the competition was the launch on Wednesday, September 27, at the Rothenburg (Wümme) airfield. The ten teams launched their home-made satellites, which resembled an ordinary beverage can in terms of their size and shape, on board a rocket. It wasn't exactly outer space, but the satellites did at least reach an altitude of just under one kilometre, after which they glided to the ground with parachutes. They had two missions to complete: first, the school students were asked to measure the temperature and air pressure during the flight phase and send the data back to the ground station. In the
The CanSat competition offers school students aged 14 years or over an insight into the complexity of large-scale space projects, while also giving them a unique experience. Together with technical expertise, the ability to work in a team is also required for success in the CanSat competition. Everyone can contribute their own specific
strengths and knowledge and just maybe some of the participants may feel inclined as a result of the German CanSat competition to pursue a career in space later on.
CanSat launcher
At EUR 404.0 million, non-consolidated total revenues in the Space Systems business unit were up on the first nine months of the previous year (EUR 387.2 million). The increase in total revenues resulted in operating earnings (EBITDA) of EUR 24.4 million, i.e. on a par with the previous year (EUR 24.7 million).
Segment EBIT came to EUR 18.5 million, thus coming close to the previous year's figure of EUR 19.2 million, reflecting the slight increase in depreciation and amortisation expense. The EBIT margin relative to the segment's non-consolidated total revenues contracted slightly to 4.6% (previous year: 4.9%).
Artist impression satellite Heinrich Hertz
At the beginning of September, LuxSpace entered into a contract with the European Space Agency ESA for the development of a completely new, inexpensive and versatile micro-satellite platform. The Luxembourg OHB subsidiary is developing a new platform for micro -satell ites under the name "Triton-X". Triton-X will be widening the OHB Group's existing range and opening up new possibilities for commercial applications. The micro-satellites will weigh around 80 kilos and transport a payload of up to 30 kilos to a low orbit around the earth (altitude of 250– 700 kilometres).
The Triton-X microsatellite platform is relatively inexpensive, available quickly and versatile. It can be used for commercial applications such as satellite communications, earth observation and the testing of new technologies in space. The compact platform is also ideal for assembling constellations of multiple satellites for joint missions. With Triton-X it will also be possible to make use of inexpensive piggy-back solutions in conjunction with other larger missions.
In Phase 1, which is now commencing, the entire system architecture will be defined. At the same time, suitable partners for the core industrial team will be selected in conjunction with ESA. The platform will be developed and prototypes built during Phase 2. The maiden flight of a Triton-X satellite platform is scheduled for Phase 3 from the end of 2019.
Under a contract entered into by OHB Italia on behalf of the Italian space agency ASI on June 20 , 20 17, PRISM A (PRecur sor e IperSpettrale della Missione Applicativa) is to be transported into space on board a Vega launcher, which will be lifting of from the European space center Kourou in French-Guyana in 2018.
PRISMA is an earth observation satellite fitted with an innovative electro-optical instrument in which a hyperspectral sensor is connected to a medium-resolution panchromatic camera. This combination instrument offers the advantages of conventional earth observation by recognizing the geometric characteristics of a landscape but is additionally able to determine the chemical and physical properties of objects in the landscape through the use of hyperspectral sensors.
Researchers and other users will benefit from these capabilities in different applications including environmental monitoring, resource management, the identification and classification of crops, measures to prevent environmental harm and possibly also security applications.
PRISMA is being assembled by OHB Italia with a payload supplied by Leonardo Airborne and Space Systems and is to be placed in a sun-synchronous orbit at an altitude of 615 kilometres. It has a launch mass of around 900 kilogrammes.
Triton-X Components of the PRISMA satellite
Construction has started in Milan for the new clean room of OHB Italia. The facility, located within the premises of the existing offices, will consist of a 190sqm ISO-7 integration room and a 210sqm ISO-8 production room plus storage, airlocks and support rooms. The clean room will be completed in time to host the integration of the Microwave Imaging Radiometer (MWI) for ESA MetOp Second Generation meteorological satellites.
Animated exterior view of the clean room facilities in Milan
The earth observation satellite OPTSAT-3000 was successfully launched on board a VEGA V V 10 , which l if ted of f f r om Kour ou , French-Guyana on August 2, 2017. OHB Italia provided the launch services for the VEGA, handling the related technical tasks and thus making a key contribution to the success of the launch. These tasks included the transportation of the launcher and necessary ground systems to the launching pad and the provision of interface rings for affixing the satellite to the launcher. These interface rings are also required to release the satellite from the launcher in space and for numerous tests of the satellite. One particular focus was on harmonising the entire sequence of loads arising during the launch phase and on making sure that the satellite was released from the launcher without any problems. OHB Italia also contributed to the design of the separation system for ensuring proper release of the satellite. In the final phases of the launch, the OHB Italia programme manager also acted as the satellite mission director, thus creating the formal interface with the launcher provider Arianespace.
OPTSAT-3000 is an earth observation programme for the Italian ministry of defense. It is composed of a high-resolution optical satellite and a ground segment for in-orbit controlling, mission planning and the collection and process of the image data. OPT-SAT-3000 will allow the Italian armed forces to create and utilise high-resolution images of any part of the earth.
Vega lifting off from the European space center Kourou with the OPTSAT-3000 and Venus satellites on board
In the first nine months of 2017, non-consolidated total revenues in the Aerospace + Industrial Products business unit climbed by around 18% over the year-ago period to EUR 145.2 million (previous year: EUR 123.3 million). The cost of materials and services purchased rose by around 24% from EUR 54.8 million in the year-ago period to EUR 67.8 million in the reporting period. Despite this, operating earnings (EBITDA) increased by 31% to EUR 17.2 million, up from EUR 13.1 million in the previous year.
The increase of more than one third in segment EBIT of EUR 13.3 million (previous year: EUR 9.8 million) additionally benefited from an only slight increase in depreciation and amortisation expense. The EBIT margin relative to non-consolidated total revenues came to 9.1%, compared with 7.9% in the previous year.
Artist impression launch vehicle Ariane 64
MT Aerospace has been working since summer 2013 on the development of state-of-theart production technology for carbonfiber processing together with the DLR Center for Lightweight Production Technology (DLR-ZLP) on behalf of the European Space Agency ESA (FORC project) and the Bavarian government (DLR-ZLP KOFFER project). Featuring infusion technology, the newly developed pr ocess achieves substantially lower costs compared with conventional wet-winding processes, thus helping to substantially enhance the competitiveness of the new European Ariane 6 launch vehicle.
Wet-winding process at DLR-ZLP, Augsburg
On July 19, MT Aerospace successfully tested a new technology for carbon-reinforced booster casings (CFRP booster). The test marks an important step in the development of the Ariane 6 launch vehicle. W i th a diamet r e of 3.5 metres and a length of 6 metres, the booster was tested at the Materials Testing Institute (MPA) in Stuttgart to determine whether it meets launch requirements. To this end, pressure loads of over 125 bar were simulated. In practical use, which lasts only around two minutes, the booster casing will be subject to pressure of around 100 bar. During the final bursting test, the container was exposed to pressure of up to 212 bar before finally failing, thus demonstrating the safety buffer, which will now be forming the basis for product development. Accordingly, the booster casing passed all tests successfully. The CFRP booster for the new European launch vehicle Ariane 6 will replace the previous steel versions fitted to Ariane 5.
Component after the successful bursting test at MPA in Stuttgart
MT Aerospace will be supplying almost all of the tank and structural components for the new ARIANE 6 launcher. Work on completing the upper stage tanks commenced at the MT assembly hall at Bremen airport. With a floor area of 4,000 square metres, the hall has been specially built for this purpose. Welding of Ariane tanks commenced successfully on the new welding machinery parc. This will be joined in early 2018 by further production capacity at the main plant in Augsburg in likewise newly constructed assembly halls.
The future Ariane 62 launch vehicle with two boosters will be transporting the four 750 kilogramme satellites from the third batch of the Galileo navigation system to their orbits at an altitude of around 23,000 kilometres.
ARIANE 6 programme: First FSW weld at tank supply succeeded
Artist's impression of an Ariane 62 launcher with two boosters.
| EUR 000s | Q3/2017 | Q3/2016 | 9M/2017 | 9M/2016 |
|---|---|---|---|---|
| Total revenues | 186,823 | 190,718 | 540,976 | 507,079 |
| EBITDA | 15,781 | 13,456 | 41,577 | 37,454 |
| EBIT | 12,458 | 10,301 | 31,712 | 28,556 |
| EBT | 11,737 | 9,705 | 29,557 | 25,422 |
| Consolidated net profit for the period | 8,493 | 6,817 | 20,639 | 17,326 |
| Earnings per share (EUR) | 0,43 | 0,37 | 1,04 | 0,89 |
| Total assets as of September 30 | 757,052 | 724,142 | 757,052 | 724,142 |
| Equity capital as of September 30 | 199,682 | 183,744 | 199,682 | 183,744 |
| Cash flow used in operating activities | 43,439 | 34,185 | – 33,052 | – 32,827 |
| Capital spending | 3,411 | 3,831 | 21,250 | 11,394 |
| Headcount as of September 30 | 2,392 | 2,275 | 2,392 | 2,275 |
The OHB Group's total revenues are heavily dependent on the achievement of milestones and delivery dates for the individual projects and are therefore not linear in nature. At the end of the first nine months, they came to EUR 541.0 million, increasing over the same period of the previous year by just under 7% (previous year: EUR 507.1 million).
At EUR 320.6 million, the Group's internal added value was roughly the same as in the previous year (EUR 321.1 million). The increase of just under 5 % in the cost of materials reflects the successful progress being made on the development projects. Operating earnings (EBITDA) rose to EUR 41.6 million (previous year: EUR 37.5 million). The operating EBITDA margin improved to 7.7% at the end of the first nine months of 2017, compared with 7.4% in the comparable prior -year period. Despite the slightly higher depreciation and amortisation expense of EUR 9.9 million in the reporting period (previous year: EUR 8.9 million), EBIT climbed to EUR 31.7 million, up from EUR 28.6 million in the previous year. The EBIT margin came to 5.9%, up from 5.6% in the previous year. The substantial decline in net finance expense from EUR 3.1 million in the previous year to EUR 2.2 million in the period under review primarily reflects increased interest income. Profit from ordinary business activities rose by 16% to EUR 29.6 million at the end of the first nine months of 2017 (previous year: EUR 25.4 million), thus outpacing the growth in the Group's internal added value. With income tax rising slightly to EUR 8.9 million in the reporting period (previous year: EUR 8.1 million), consolidated net profit for the period rose by 19% to EUR 20.6 million (previous year: EUR 17.3 million).
At the end of the first nine months of the year, cash flow from operating activities came to EUR 33.1 million and was substantially lower than at the end of the first half of the year but on a par with the previous year (EUR 33.8 million). The net cash outflow of EUR 19.8 million from investing activities was dominated by spending of EUR 21.3 million on property, plant and equipment. Net cash inflow from financing activities of EUR 41.2 million, which was also substantially down on the end of the first half of the year, neutralised the net cash outflow from operating and investing activities and chiefly reflects the smaller volume of new loans raised of EUR 51.5 million compared with the previous year (EUR 58.2 million). The reduced volume of new loans was planned. At EUR 45.1 million at the end of the period under review, cash and cash equivalents (net of securities) thus fell short of the previous year (EUR 61.5 million).
The firm orders held by the Group at the end of the first nine months of 2017 were valued at EUR 2,049 million, up from EUR 1,601 million in the previous year. Of this, OHB System AG accounted for EUR 1,524 million or a good 74%.
The OHB Group's total assets increased by EUR 74.1 million or around 11% over the end of the previous year to EUR 757.1 million as of September 30, 2017 (December 31, 2016: EUR 682.9 million). This was materially driven by increased propert y, plant and equipment and other assets as well as substantially higher trade receivables. The increase of a good EUR 51 million in financial liabilities covered the increase of just under EUR 52 million in trade receivables. Consolidated equity expanded by EUR 16.1 million to EUR 199.7 million. Accordingly, the equity ratio came to 26.4% as of September 30, 2017 and was thus virtually unchanged over December 31, 2016 (26.9%).
At EUR 25.7 million in the first nine months of 2017, research and development expense was up on the year-ago figure of EUR 22.6 million.
Capital spending in the first nine months of 2017 came to EUR 21.3 million, well up from the year-ago figure of EUR 11.4 million, as a result of spending on tooling in preparation for Ariane 6 production at MT Aerospace, Augsburg.
The risk report included in the annual report for 2016 described in detail the risks and opportunities liable to impact the Company's business performance. There were no material changes in the OHB Group's opportunity and risk profile in the reporting period.
At 2,392 on September 30, 2017, the OHB Group's headcount was up on December 31, 2016 (2,298 employees). The employees shown for the "Rest of the World" comprise 53 people employed in Chile and 58 in French-Guiana.
NUMBER OF EMPLOYEES BY REGIONS
371 Europe without Germany 111 Rest of the World 1,910 Germany AS OF SEPTEMBER 30, 2017
TOTAL personnel: 2,392
The Management Board expects consolidated total revenues of EUR 800 million for 2017, accompanied by EBITDA of EUR 60 million and EBIT of 44 million in 2017. Given the greater order backlog and upbeat outlook for the current year, we assume that the Group's net assets and financial condition will also remain strong.
On November 8, the responsible office of the Federal Republic of Germany awarded a contract to OHB System AG for the installation of a satellite system for global electro-optical reconnaissance. The contract has a budget of up to EUR 400 million.
LuxSpace awarded contract on October 12, 2017 to conduct research into new and innovative approaches to aircraft positioning and monitoring based on the ADS-B (Automatic Dependent Suveillance-Broadcast) process for the European Space Agency ESA . The study is being conducted with the support of the ESA-ARTES Business Applications Programme. Other partners alongside LuxSpace include the German Aerospace Center (DLR), Tekever (United Kingdom) and ANA (Air Navigation Administration) Luxembourg.
Known as "AirTracks", the nine-month study will be developing new services for monitoring manned and unmanned aircraft. They will be used by small and mid-size airports, air traffic controllers and ground staff, allowing them to monitor flight movements more effectively. The purpose is to achieve more effective and, hence, safer use of air space. ADS-B is a key technology for providing a wide range of traffic monitoring and management services. The study is to be followed by a demonstration project to develop the most promising ADS-B-based approaches for commercial use in conjunction with potential customers. With the ADS-B process, aircraft are able to determine their position by using the Global Navigation Satellite System (GNSS) and transmitting this data regularly to ground stations and other aircraft. OHB is leveraging its long-standing experience in managing ship position data in this project for monitoring airspace.
The "AirTracks" project is giving OHB an opportunity of developing new business models and offering new value-added services. This marks an important step towards the strategic goal of expanding service business within the Group.
Air traffic management and operations simulation
Four Galilean Satellites at final assembly on top of the launch vehicle
On October 5, 2017, the European Commission decided to exercise one of its contractual options for the European Galileo navigation system, ordering a further four satellites from OHB System AG. The European Commission and ESA have signed a delegation agreement under which ESA acts as design and procurement agent on behalf of the EU, which is the owner of Galileo.
This additional contract has a value of EUR 157.75 million. Assembly and testing of the additional navigation satellites will commence immediately after the completion of the Batch 3 satellites currently under production.
Including the four satellites ordered under this option, OHB System AG has received contracts for a total of 34 Galileo satellites to date. Of these, 14 are already in orbit.
| EUR 000s | Q3/2017 | Q3/2016 | 9M/2017 | 9M/2016 |
|---|---|---|---|---|
| Sales | 175,368 | 181,206 | 508,077 | 472,525 |
| Changes in inventories of finished goods | ||||
| and work in progress | 1,814 | 4,257 | 9,441 | 11,915 |
| Other own work capitalised | 4,252 | 3,770 | 15,758 | 16,827 |
| Other operating income | 5,389 | 1,485 | 7,700 | 5,812 |
| Total revenues | 186,823 | 190,718 | 540,976 | 507,079 |
| Cost of materials | 109,208 | 119,040 | 312,675 | 298,651 |
| Staff costs | 47,756 | 44,862 | 143,730 | 130,669 |
| Depreciation/amortisation | 3,323 | 3,155 | 9,865 | 8,898 |
| Other operating expenses | 14,078 | 13,360 | 42,994 | 40,305 |
| Earnings before interest and taxes (EBIT) | 12,458 | 10,301 | 31,712 | 28,556 |
| Other interest and similar income | 706 | 285 | 1,704 | 1,097 |
| Other financial expenses | 1,530 | 842 | 4,061 | 4,294 |
| Currency translation gains/losses | 107 | – 39 | 202 | 63 |
| Net profit/loss from shares carried at equity | 0 | 0 | 0 | 0 |
| Investment income | – 4 | 0 | 0 | 0 |
| Net finance expense | – 721 | – 596 | – 2,155 | – 3,134 |
| Earnings before taxes | 11,737 | 9,705 | 29,557 | 25,422 |
| Income taxes | 3,244 | 2,888 | 8,918 | 8,096 |
| Consolidated net profit for the period | 8,493 | 6,817 | 20,639 | 17,326 |
| Minority interests | 950 | 458 | 2,530 | 1,905 |
| Consolidated net profit after minority interests | 7,543 | 6,359 | 18,109 | 15,421 |
| Number of shares excl. own shares | 17,387,600 | 17,387,600 | 17,387,600 | 17,387,600 |
| Earnings per share (basic in EUR) | 0.43 | 0.37 | 1.04 | 0.89 |
| Earnings per share (diluted in EUR) | 0.43 | 0.37 | 1.04 | 0.89 |
| EUR 000s | Q3/2017 | Q3/2016 | 9M/2017 | 9M/2016 |
|---|---|---|---|---|
| Consolidated net profit for the period | 8,493 | 6,817 | 20,639 | 17,326 |
| Remeasurement of defined benefit pension plans | 0 | 0 | 0 | 0 |
| Items that will not be reclassified to profit and loss | 0 | 0 | 0 | 0 |
| Exchange differences on translation foreign operations | 39 | – 74 | 0 | – 154 |
| Net gains/losses from the measurement of financial assets recorded under equity |
– 2,265 | 344 | 2,242 | 5,475 |
| Income/expenses arising during the year | 36 | 0 | 274 | 48 |
| Items which may be subsequently reclassified to profit and loss |
– 2,190 | 270 | 2,516 | 5,369 |
| Other comprehensive income after tax | – 2,190 | 270 | 2,516 | 5,369 |
| Comprehensive income | 6,303 | 7,087 | 23,155 | 22,695 |
| Of which attributable to | ||||
| equity holders of OHB SE | 5,342 | 6,629 | 20,543 | 20,756 |
| other equity holders | 961 | 458 | 2,612 | 1,939 |
| EUR 000s | 9M/2017 | 9M/2016 |
|---|---|---|
| Earnings before interest and taxes (EBIT) | 31,712 | 28,556 |
| Income taxes paid | – 8,521 | – 6,019 |
| Other non-cash expenses (+)/income (–) | 0 | – 88 |
| Depreciation/amortisation | 9,866 | 8,898 |
| Changes in pension provisions | – 1,798 | – 799 |
| Profit (-)/loss (+) from the disposal of assets | 11 | 10 |
| Gross cash flow | 31,270 | 30,558 |
| Increase (–)/decrease (+) in own work capitalised | – 14,983 | – 16,306 |
| Increase (–)/decrease (+) in inventories | – 8,330 | – 14,764 |
| Increase (–)/decrease (+) in receivables and other assets including deferred items | – 48,404 | – 43,829 |
| Increase (+)/decrease (–) in liabilities and current provisions | 16,547 | – 14,291 |
| Increase (+)/decrease (–) in prepayments received | – 9,151 | 24,805 |
| Cash outflow for operating activities | – 33,051 | – 33,827 |
| Payments made for investments in non-current assets | – 21,250 | – 11,394 |
| Payments received from disposals of non-current assets | 31 | 53 |
| Interest and other investment income | 1,443 | 998 |
| Cash outflow for investing activities | – 19,776 | – 10,343 |
| Dividends distributed | – 6,955 | – 6,955 |
| Payments made for the settlement of financial liabilities | – 11 | – 465 |
| Payments received from raising borrowings | 51,489 | 58,175 |
| Minority interests | – 109 | – 754 |
| Interest and other finance expense | – 3,211 | – 4,294 |
| Cash inflow from financing activities | 41,203 | 45,707 |
| Cash changes to cash and cash equivalents | – 11,624 | 1,537 |
| Currency-translation-related changes to cash and cash equivalents | 201 | – 17 |
| Cash and cash equivalents at the beginning of the period | 56,567 | 59,949 |
| Cash and cash equivalents at the end of the period | 45,144 | 61,469 |
| EUR 000s | 30/9/2017 | 31/12/2016 |
|---|---|---|
| ASSETS | ||
| Goodwill | 7,488 | 7,488 |
| Other intangible assets | 101,565 | 89,967 |
| Property, plant and equipment | 75,207 | 60,640 |
| Shares carried at equity | 558 | 558 |
| Other financial assets | 33,417 | 30,979 |
| Other long-term receivables and assets | 2,223 | 2,491 |
| Securities | 632 | 632 |
| Deferred taxes | 17,145 | 18,615 |
| Long-term assets | 238,235 | 211,370 |
| Inventories | 58,545 | 50,215 |
| Trade receivables | 377,964 | 326,336 |
| Tax receivables | 1,569 | 328 |
| Other non-financial assets | 35,146 | 37,713 |
| Securities | 449 | 385 |
| Cash and cash equivalents | 45,144 | 56,567 |
| Current assets | 518,817 | 471,544 |
| Total assets | 757,052 | 682,914 |
| EUR 000s | 30/9/2017 | 31/12/2016 |
|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Subscribed capital | 17,468 | 17,468 |
| Additional paid-in capital | 14,923 | 14,923 |
| Retained earnings | 521 | 521 |
| Unrealised gains and loss recognised under equity | – 2,165 | – 4,682 |
| Treasury stock | – 781 | – 781 |
| Consolidated profit | 152,353 | 141,199 |
| Shareholders' equity excluding minority interests | 182,319 | 168,648 |
| Minority interests | 17,363 | 14,942 |
| Shareholders' equity | 199,682 | 183,590 |
| Provisions for pensions and similar obligations | 99,285 | 100,437 |
| Non-current other provisions | 874 | 1,432 |
| Non-current financial liabilities | 31,122 | 349 |
| Non-current advance payments received on orders | 47,153 | 37,398 |
| Deferred income tax liabilities | 36,473 | 31,775 |
| Non-current liabilities and provisions | 214,907 | 171,391 |
| Current provisions | 45,118 | 28,160 |
| Current financial liabilities | 113,813 | 93,108 |
| Trade payables | 75,724 | 67,308 |
| Current advance payments received on orders | 83,483 | 102,389 |
| Income tax liabilities | 3,608 | 7,981 |
| Other financial and non-financial liabilities | 20,717 | 28,987 |
| Current liabilities | 342,463 | 327,933 |
| Total equity and liabilities | 757,052 | 682,914 |
| Balance on September 30, 2017 |
17,468 | 14,923 | 521 | – 2,165 | 152,353 | – 781 | 182,319 | 17,363 | 199,682 |
|---|---|---|---|---|---|---|---|---|---|
| Other changes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Comprehensive income |
0 | 0 | 0 | 2,517 | 18,109 | 0 | 20,626 | 2,421 | 23,047 |
| Dividend payment | 0 | 0 | 0 | 0 | – 6,955 | 0 | – 6,955 | 0 | – 6,955 |
| Balance on January 1, 2017 |
17,468 | 14,923 | 521 | – 4,682 | 141,199 | – 781 | 168,648 | 14,942 | 183,590 |
| Balance on September 30, 2016 |
17,468 | 14,923 | 521 | 2,654 | 134,408 | – 781 | 169,193 | 14,551 | 183,744 |
| Other changes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Comprehensive income |
0 | 0 | 0 | 5,375 | 15,421 | 0 | 20,796 | 1,152 | 21,948 |
| Dividend payment | 0 | 0 | 0 | 0 | – 6,955 | 0 | – 6,955 | 0 | – 6,955 |
| Balance on January 1, 2016 |
17,468 | 14,923 | 521 | – 2,721 | 125,942 | – 781 | 155,352 | 13,399 | 168,751 |
| in TEUR | Sub scribed capital |
Additional paid-in capital |
Retained earnings |
Other compre hensive income |
Consoli dated profit |
Treasury stock |
Share holders' equity excluding minority interests |
Minority interests |
Share holders' equity |
| Space Systems |
Aerospace + Industrial Products |
Holding | Consoli dation |
Total | |
|---|---|---|---|---|---|
| EUR 000s | 2017 | 2017 | 2017 | 2017 | 2017 |
| Sales | 385,275 | 134,010 | 0 | – 11,207 | 508,078 |
| of which internal sales | 209 | 7,999 | 0 | – 8,208 | 0 |
| Total revenues | 404,021 | 145,235 | 5,265 | – 13,545 | 540,976 |
| Cost of materials and services purchased | 251,770 | 67,816 | 0 | – 6,910 | 312,676 |
| EBITDA | 24,424 | 17,202 | – 49 | 0 | 41,577 |
| Depreciation/amortisation | 5,953 | 3,914 | 19 | – 21 | 9,865 |
| EBIT | 18,471 | 13,288 | – 68 | 21 | 31,712 |
| EBIT margin | 4.6% | 9.1% | 5.9% | ||
| Own value creation | 189,926 | 130,651 | 320,577 | ||
| EBIT margin on own value creation | 9.7% | 10.2% | 9.9% |
| Space Systems |
Aerospace + Industrial Products |
Holding | Consoli dation |
Total | |
|---|---|---|---|---|---|
| EUR 000s | 2016 | 2016 | 2016 | 2016 | 2016 |
| Sales | 366,566 | 109,506 | 0 | – 3,547 | 472,525 |
| of which internal sales | 168 | 3,379 | 0 | – 3,547 | 0 |
| Total revenues | 387,182 | 123,299 | 4,828 | – 8,230 | 507,079 |
| Cost of materials and services purchased | 246,448 | 54,763 | 0 | – 2,560 | 298,651 |
| EBITDA | 24,705 | 13,141 | –392 | 0 | 37,454 |
| Depreciation/amortisation | 5,544 | 3,372 | 20 | – 38 | 8,898 |
| EBIT | 19,161 | 9,769 | – 412 | 38 | 28,556 |
| EBIT margin | 4.9% | 7.9% | 5.6% | ||
| Own value creation | 208,637 | 112,494 | 321,131 | ||
| EBIT margin on own value creation | 9.2% | 8.7% | 8.9% |
OHB SE is a listed stock corporation domiciled in Germany. The consolidated financial statements for the interim report on OHB SE and its subsidiaries (the "Group") for the first nine months of 2017 were approved for publication in a resolution passed by the Management Board on November 14, 2017.
OHB SE's interim consolidated financial statements include the following companies:
The results of the non-consolidated affiliated companies are not included in the interim reports.
These unaudited interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the related interpretations of the International Accounting Standards Board (IASB) applicable to interim reporting as endorsed by the European Union and the additional provisions of commercial law to be applied in accordance with Section 315 a (1) of the German Commercial Code. Accordingly, this interim report does not include all the information or notes required by IFRS for the consolidated financial statements to be prepared for a full year.
The Management Board takes the view that these unaudited interim consolidated financial statements contain all adjustments needed to provide a true and fair view of the Company's results of operations, financial position and net assets. The results reported in the period ending September 30, 2017 are not necessarily a guide to the Company's future performance.
In connection with the preparation of the interim consolidated financial statements in accordance with IAS 34 "Interim Financial Reporting", the Management Board is required to make certain assessments and estimates as well as assumptions influencing the application of the accounting principles within the Group and the recognition of assets and liabilities as well as income and expenses. The actual amounts may vary from such estimates and adjustments.
The recognition and measurement methods used in the interim consolidated financial statements match those applied to the consolidated financial statements as of the end of the last financial year.
Income taxes are calculated on the basis of a tax rate of around 32%.
There have been no material changes in he basis underlying the estimates applied since the annual report for 2016. A detailed description of the accounting principles can be found in the notes to the consolidated financial statements included in the annual report for 2016.
This interim report has not been audited or reviewed by a statutory auditor in accordance with Section 317 of the German Commercial Code.
"To the best of our knowledge, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group in accordance with the generally accepted principles of proper accounting, 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 development of the Group for the remaining months of the financial year."
Bremen, November 14, 2017 The Management Board
PvF Investor Relations, Oberursel, Germany
Ligaturas – Reportdesign, Berlin, Germany
Cover: istockphoto.com Page 7: OHBSystem AG Page 8: OHB SE Page 9: OHB SE Page 10: Weser Kurier, Frank Thomas Koch Page 11: OHB System AG Page 12: INNOspace® Page 13: CANSAT Germany Page 14: OHB System AG Page 15: left: LuxSpace, right: OHB Italia Page 16: OHB Italia Page 17: ArianeGroup Page 18: above: MT Aerospace AG, below: MTA Stuttgart Page 19: left and below: MT Aerospace AG, right: ArianeGroup Page 22: DLR Page 23: ESA, S. Corvaja
* European global satellite-based navigation system. The FOC (full operational capability) phase of the Galileo programme is being funded by the European Union. The European Commission and the European Space Agency ESA have signed a contract under which ESA acts as the development and sourcing agency on behalf of the Commission. The views expressed here do not necessarily constitute the positions of the European Union and ESA. "Galileo" is a registered trademark owned by the EU and ESA under the HABM application number 002742237.
| Q3/9M INTERIM REPORT / Analyst conference call |
NOVEMBER 14, 2017 |
|---|---|
| GERMAN EQUITY CAPITAL MARKET FORUM Analyst and investor conference, Frankfurt/Main |
NOVEMBER 27–29, 2017 |
| CAPITAL MARKET DAY 2018 | FEBRUAR 7, 2018 |
| CONSOLIDATED FINANCIAL STATEMENTS FOR 2017 Annual press conference, Bremen Analyst conference (DVFA), Frankfurt /Main |
MARCH 21, 2018 8:30 A .M. 2:00 P.M. |
| Q1/3M INTERIM REPORT Analyst conference call |
MAY 9, 2018 |
| ANNUAL GENERAL MEETING Bremen |
MAY 24, 2018 |
| Q2/6M INTERIM REPORT Analyst conference call |
AUGUST 9, 2018 |
| Q3/9M INTERIM REPORT Analyst conference call |
NOVEMBER 13, 2018 |
OHB SE
Karl-Ferdinand-Braun-Str. 8 28359 Bremen, Germany
Phone: +49(0)421 2020-8 FAX: +49(0)421 2020-613 [email protected]
OHB – Official partner to Werder Bremen
www.ohb.de
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