Quarterly Report • Nov 14, 2018
Quarterly Report
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3MONATSZWISCHENBERICHT 2017 Q3/9-MONTH INTERIM REPORT 2018
OHB SE is a European aerospace and technology Group and one of the most important independent forces in the European space 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 many 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 manufacturing of low-orbiting and geostationary satellites for navigation, science, communications, earth and weather observation and reconnaissance including scientific payloads. Reconnaissance satellites and broadband wireless transmission of image data form core technologies for security and reconnaissance. The exploration segment works on studies and models for exploring our solar system, primarily the Moon, asteroids and Mars. Its human space flight activities chiefly entail projects for the payloads and operations of the International Space Station ISS.
The 'Aerospace + Industrial Products' business unit is primarily responsible for manufacturing aviation and space products as well as engaging in 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 supplier of components for the Ariane programme and an established producer of structural elements for satellites. In addition, OHB is an experienced provider 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.
This year, the International Astronautical Congress (IAC), the world's largest annual space congress held in changing cities, took place during the first week of October at the Bremen Exhibition Centre. The conference has set a new audience record this year: More than 6,400 experts visited the trade fair, on the public day more than 13,000 visitors were counted. This figure shows the great interest of the population in space. This is a very positive development for the industry as a whole, which is derived from the relevance of space applications in everyday life. Today, the majority of the population is a consumer of services made possible by space systems. Employees from OHB SE's subsidiaries took part in organising the conference by giving presentations, participating in discussion rounds and moderating panels at the conference. Representatives from various disciplines presented their fields at the company 's booth. Various contracts with subcontractors were also signed here. The most important contract for OHB, however, was signed at the ESA booth – this was the first time that OHB System had signed a contract as prime contractor for a science mission. The mission, called PLATO, has a contract value of EUR 288 million and aims to search and explore planets outside our solar system. This international meeting of the space industry was also used to intensify existing contacts, with OHB SE signing an agreement with the US company Blue Origin on future cooperation.
In the week following the IAC, our Italian subsidiary OHB Italia was able to report a major success by concluding an agreement with the Luxembourg government: The Ministry of Foreign and European Affairs, Directorate of Defence in Luxembourg has commissioned the company with the realisation of an Earth observation satellite. The contract is worth EUR 168 million and includes the supply of a high-resolution optical satellite. This satellite, which will weigh approximately 600 kg and provide worldwide coverage, is expected to be launched with a Vega-C rocket in 2022.
The EDRS-C telecommunications satellite, which OHB System AG developed and manufactured for Airbus Defence + Space, is currently on IABG's test site for a test campaign lasting several months. The satellite has already successfully passed the first important tests. EDRS-C will remain at the test facility until the end of April 2019, with the planned launch date in the second quarter of 2019.
At the end of the quarter, the consolidated order backlog of OHB SE companies stood at EUR 2,408 million, slightly increased from the previous quarter (EUR 2,369 million).
Based on the high order backlog and the positive business development after the first nine months of the current financial year, we assume that the financial position and net assets will continue to develop well and confirm the outlook given at the beginning of the year for the 2018 financial year.
Bremen, 13 November 2018
The Management Board
Strong fluctuations characterised the development of the German benchmark index DAX in the first half of 2018: a friendly start and the achievement of a new all-time high of 13,597 points on 23 January were followed by a rapid slide in the first quarter to the low of 11,727 points on 26 March – a decline of around 14 per cent compared with the peak. The upward trend in the direction of 13,200 points until mid-May was again followed by a reset to below 12,200 points at the end of June, in order to target the 12,500 point mark again in the first days of July. The reasons for this volatile stock market performance were increasing political and economic uncertainty, led by the escalating trade conflicts between the USA, Europe and China. In addition, the expectation of rising capital market interest rates, particularly in the USA, also had a negative impact on the stock markets. Volatility also continued in the third quarter: the index performed well until the end of July, but fell to below 12,000 points by mid-September. After a brief upward movement, the DAX last fell to below 11,500 points at the day of the editorial deadline.
OHB stock also benefited from the so-called January rally on the stock market, reaching its all-time high of EUR 49.75 on January 9, 2018 and closing at EUR 46.35 at the end of January. At the end of the quarter on March 29, 2018, the share price slumped to EUR 35.20, almost in parallel with the indices, before bottoming out at this year's low of EUR 27.55 at the end of June on June 29 and closing the first half of the year at EUR 28.00 on June 29, 2018. From the beginning of the third quarter, the share performed positively and reached a daily high of EUR 36.80 on September 5 for this period.
At 17,726 shares (Xetra + floor), the average daily trading volume of OHB stock in the period under review was higher than the figure of 15,348 shares per day for the same period of the previous year.
As of September 30 of this year, OHB SE held 67,996 treasury shares, equivalent to 0.39% of its share capital.
| September 30, 2018 | Shares | Change in Q3 |
|---|---|---|
| Christa Fuchs, member 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. Lutz Bertling, member of the Management Board |
14,500 | – |
At the Annual General Meeting held in Bremen on May 24, 2018, OHB SE's shareholders voted by a large majority in favor of the Bremenhaven-based entrepreneur and President of the Federal Association of German Employers' Associations (BDA), Ingo Kramer, as fourth member of the Supervisory Board. OHB SE's shareholders also resolved once again to pay a dividend of EUR 0.40 per share.
| Bank | Date | Target price in EUR |
Recommen dation |
|---|---|---|---|
| Bankhaus Lampe | 9/11/18 | 50.00 | Buy |
| Commerzbank | 9/11/18 | 30.00 | Hold |
| DZ Bank | 28/8/18 | 42.00 | Buy |
| equinet Bank | 16/8/18 | 40.00 | Buy |
| HSBC Trinkaus & Burkhardt |
27/4/18 | 34.00 | Hold |
As usual , OHB SE 's Management Board gave an initial outlook for the current financial year during the Capital Market Day (CMD), which took place this year on February 7 in the new hall of MT Aerospace in Bremen, where the upper stage tanks for the European launcher Ariane 6 are welded. This production hall is located directly next to the ArianeGroup integration halls, so that the participants could combine the CMD with a visit there. Members of OHB's Management Board and directors informed analysts and investors, bankers and financial journalists on the status of current projects and new market developments.
The Company published its consolidated financial statements for the 2017 financial year on March 21, 2018, the date on which it first held a financial press conference in Bremen, followed by a discussion of its results at an analysts' conference in Frankfurt. To date, OHB has participated in capital market conferences in Paris, Baden-Baden, Frankfurt and Munich. In addition, investors visited us at our locations in Bremen and Oberpfaffenhofen.
| in EUR | 9M/2018 | 9M/2017 |
|---|---|---|
| High, Xetra | 49.75 | 40.89 |
| Low, Xetra | 27.55 | 18.27 |
| Closing price, Xetra (final trading day of the period) |
33.30 | 40.89 |
| Average daily trading volumes (XETRA + floor) |
17,726 | 15,348 |
| Market capitalisation, Xetra (final trading day of the period) |
582 million | 714 million |
| Number of shares | 17,468,096 | 17,468,096 |
1 Signing ceremony PLATO contract (fltr: Kurt Melching, CFO of OHB SE, Heike Rauer, Principal Investigator and Head of the PLATO Mission Consortium, DLR, Marco Fuchs, CEO of OHB SE, Jan Wörner, ESA Director General, Donato Amoroso, Deputy CEO of Thales Alenia Space 2 Galileo team after receiving the Wernher-von-Braun Award (presented by the DGLR) 3 Panel discussion on the topic of asteroids 4 Hans Steininger, CEO of MT Aerospace AG, in conversation with members of the Indian space agency ISRO.
5 OHB SE booth before the start of the fair 6 Pupils learn about space programmes at the OHB booth 7 fltr: Stéphane Israël, CEO Arianespace with Marco Fuchs, right in the picture: Andreas Mattfeldt, M.D.B.
6 9 T H I N T E R N AT I O N A L A ST R O N A U T I C A L CO N G R E SS B R E M E N | 1 T O 5 O C T O B E R 2 0 1 8
TEAM GERMANY
8 NASA administrator James Bridenstine during a visit at OHB with Marco Fuchs 9 Elżbieta Bieńkowska (centre), Commissioner of the European Commission for the Internal Market, Industry, Entrepreneurship and Small and Medium-sized Enterprises with Martin Günthner, Senator for Economics, Labor and Ports of the City of Bremen and Marco Fuchs at OHB 10 Chairman of the Indian space agency ISRO Dr. Kailasavadivoo Sivan (fourth from left) and a delegation during a visit to the fair with representatives of MT Aerospace AG
OHB SE and its subsidiaries support a variety of cultural and social events and organisations. In 2018, these projects were among them:
• 29th Bremen Children's Day: During this event, numerous associations and initiatives present offers to visitors that make children strong and can support parents.
• Cultural commitment with the support of the music festival in Bremen: Many programmes and artist constellations can be experienced throughout Germany exclusively at the Musikfest Bremen.
• The Singverein Emden, which celebrated its 200th anniversary in 2005, is a lay choir with around 80 active singers of different ages dedicated to the performance of oratorios. Under the title I STILL HAVE A DREAM, OHB supported a large-scale cross-over project at Stephani church in Bremen on June 16 to commemorate MARTIN LUTHER KING jr., his assassination 50 years ago and his historic speech at the march on Washington "I have a dream" 55 years ago.
• Support of the team Hyperpodx of the University Oldenburg and the University Emden/Leer at the competition Hyper-loop in California.
• Financial support for the youth work of the Berliner Erlebniszentrum orbitall (FEZ): The FEZ-Berlin is Europe's largest non-profit children's, youth and family centre. It offers creative game, fun and recreation and combines in its programme adventure, education and fun. OHB's donation will be used to expand and deepen the experimental possibilities offered by orbitall.
At EUR 498.6 million, the unconsolidated total revenues of the Space Systems division significantly exceeded the figure of EUR 404.0 million reported for the first nine months of the previous year. The increased total revenues resulted in an equally significantly higher operating result (EBITDA) of EUR 31.4 million (previous year: EUR 24.4 million).
At EUR 23.1 million, EBIT for the segment was also up on the previous year's figure of EUR 18.5 million despite higher depreciation and amortisation. The EBIT margin in relation to unconsolidated total revenues stabilised at the previous year's level and reached 4.6%.
Illustration "gateway configuration" 11
The International Space Station (ISS), with its many years of operation in near-earth space, has gained valuable insights for human space flight, paving the way for ambitious missions. The international ISS partners Europe, the USA, Russia, Japan and Canada are looking to the future and are currently planning the next major milestone in human space flight: a lunar, orbital base as the starting point for astronautical missions to the Moon or Mars. The working title is currently Lunar Orbital Platform Gateway.
On September 28, OHB System AG was selected to participate in one of two parallel studies for the planning of the European module known as ESPRIT (European System Providing Refuelling, Infrastructure and Telecommunications). As a subcontractor for the French space Group Thales Alenia Space, OHB is working on important development projects worth EUR 1.7 million. ESPRIT is a project commissioned by the European Space Agency ESA and has a total contract value of EUR 5 million for the first development phase (A /B1).
ESPRIT is the communication and connectivity module of the new gateway, which will move around the Moon in a highly elliptical polar orbit. OHB is responsible for the conceptual work for the structure of the module and its thermal system as well as for refuelling with xenon.
OHB System AG is the prime contractor for the development and construction of the EDRS-C satellite for the European Data Relay System (EDRS) of Airbus Defence and Space. The telecommunications satellite is currently being tested at IABG's Space Test Centre in Ottobrunn. There it has to undergo a test campaign lasting several months to qualify it for space flight. The satellite has already successfully passed the first tests. The space simulation test , also called "thermal /vacuum test", took place in a 12 metre long chamber, which was specially designed for such strains and has an inside diametre of 6 metres. The test simulates what environment awaits the satellite at it's designated orbit. It must not only be able to survive this, but must also be able to fulfil its purpose - data transmission. And that's over 15 years, because that's how long his expected tenure is. EDRS-C also survived the subsequent vibration test, which shows the conditions of a rocket launch, unscathed. The acoustic test was also carried out successfully.
The satellite will remain in the test house until about April 2019. Around five weeks before the planned launch date in the second quarter of 2019, shipment to the Kourou launch site in French Guyana will begin. An Ariane 5 rocket is to launch EDRS-C into space.
EDRS-C telecommunications satellite at IABG's test centre in Ottobrunn, Germany
On 25 July, the last four Galileo FOC satellites from Batch 2 were launched from the Spaceport Kourou in French Guyana with an Ariane 5 launcher. This means that there are currently 26 Galileo satellites in space, 22 of which were developed, built and tested by OHB. In view of the additional Galileo satellites (Batch 3) still to be produced, OHB System AG has entered into an agreement with the British company Surrey Satellite Technology Ltd. (SSTL) and the European Space Agency (ESA). The parties have reached a preventive agreement which minimises the possible impact of the current Brexit negotiations and their consequences on the satellite project. In this project, SSTL supplies the navigation payloads for the satellites. The parties involved have been exchanging views on the potential impact of the brexit on the project and mitigation opportunities for over a year. With the mitigation plan that has now been adopted, well-founded solutions have been found to minimise possible effects. The major part of the services to be provided by SSTL in the Galileo project is not affected by the planned withdrawal of the United Kingdom from the European Union. The agreement can be implemented without affecting the original project schedule.
On August 13, the System Qualification Review in the PRISMA project was successfully completed with the customer ASI (Italian Space Agency). Only a few days later, the Integration Readiness Review system was started, which marked the beginning of the formal authorisation to integrate the payload on the satellite and the launch of the corresponding test campaign was approved. Following completion of the full functional tests, the satellite left the OHB integration facility in Tortona on September 9 and was transported to the Intespace test centre in Toulouse, France. Here the environmental test campaign will be carried out, which is expected to be completed in December. In the first half of next year, the satellite will be launched with a Vega rocket from Kourou, French Guiana.
The satellite at the test centre in Toulouse during the environmental test campaign
The AIT phase (assembly, integration and test) for MATS, the first satellite in the Swedish InnoSat programme, was started in September. The assembly and subsequent tests are expected to be completed in the spring of next year. The satellite is expected to be launched in the second half of 2019. The MATS scientific mission, initiated by the Department of Meteorology (MISU) of Stockholm University, will use optical measurement techniques to study the mesosphere. By collecting these data over a period of two years, MATS will make it possible to answer a wide range of scientific questions about this remote part of the atmosphere. OHB Sweden is the prime contractor for the development of the InnoSat platform, the first flight model for MATS and the launch and operation of the satellite. OHB Sweden cooperates with ÅAC Microtec at MATS, which is responsible for the on-board computer and the power subsystem.
On September 18, OHB System AG won the second place in the infrastructure category of Deutsche Bahn (DB) at the world's leading trade fair for transportation technology, InnoTrans in Berlin, Germany. For around 45 years, the Process Control Systems (PCS) division at OHB has been successfully ensuring the smooth and reliable monitoring and control of the electrical traction power supply for trains on the entire Deutsche Bahn network. Thanks to automation and digitisation, OHB has been able to steadily improve the reliability of its supplies in recent years. This is because the availability of the closemeshed overhead line network is subject to ever increasing demands due to the high frequency of trains. Process control technology at OHB specialises in the automation of traction power supplies.
Bavarian Transport Minister Ilse Aigner visits the OHB booth at InnoTrans.
At EUR 140.6 million (previous year: EUR 145.2 million), the unconsolidated total revenues of the business segment Aerospace + Industrial Products in the first nine months of fiscal year 2018 almost reached the level of the previous year. The cost of materials and purchased services in the reporting period, which fell by around 14%, amounted to EUR 58.4 million, compared with EUR 67.8 million in the previous year. Overall, the operating result (EBITDA) declined slightly to EUR 15.6 million (previous year: EUR 17.2 million).
The segment's EBIT of EUR 11.3 million was correspondingly lower (previous year: EUR 13.3 million). The EBIT margin in relation to unconsolidated total revenues reached 8.1% after 9.1 % in the previous year.
On October 2, OHB SE signed a Letter of Intent (LOI) with the U.S. space company Blue Origin. The document was signed by Dr. Lutz Bertling and Kurt Melching, members of the Management Board of OHB SE, Hans J. Steininger, CEO of MT Aerospace and Bob Smith, CEO of Blue Origin, during a meeting at the International Space Congress IAC in Bremen.
The aim is to explore the extent to which OHB, MT Aerospace and Blue Origin can work together across the Atlantic. The companies have joined forces for a future Blue Moon mission to the Moon - Blue Moon is Blue Origin's moon landing device that can carry several tons of cargo to the moon. The companies also plan to cooperate on a payload on board Blue Origin's reusable New Glenn orbital rocket. The use of these systems and ways of working together will be the subject of in-depth discussions in this transatlantic dialogue.
In ESA's FLPP programme, an important development project was awarded to MT Aerospace in the third quarter. The SCOUT project involves the development and construction of a sandwich common bulkhead tank system for a rocket upper stage in which cost-effective manufacturing processes are tested under operational conditions that are as realistic as possible. The contract has a term of three years and a value of EUR 9.9 million.
LOI signing on 2 October 2018
MT Aerospace AG received the "Space Flight Awareness Award" on October 2 for its outstanding work on the heavy-duty rocket system SLS of the U.S. space agency NASA. The award was presented on the recommendation of "The Boeing Company" at the International Space Congress IAC in Bremen.
Boeing is building the core and upper stages as well as the avionics for the SLS missile system. NASA wants to use it to send the most powerful heavy-duty rocket for manned and unmanned missions to the moon, Mars and into the depths of space. MT Aerospace supplies the so-called "Gore Panels", which form part of the massive fuel tanks. These are wedge-shaped parts made of an aluminium alloy which Boeing welds into domes for the liquid hydrogen and liquid oxygen tanks.
Dr. Michael Haidinger (President Boeing Germany), Markus Staudt, Carsten Landmann, Günther Schulerer all MT Aeospace AG
ESA Space Ministers held a successful Intermediate Ministerial Meeting (IMM18) on 25 October. This interim meeting was a milestone on the way to ESA's next Ministerial Council meeting, Space19+, scheduled for November 2019 in Seville.
From left to right: Javier Ponce Martínez, Director General of the CDTI; Walther Pelzer, Member of the DLR Executive Board; Thomas Jarzombek, Coordinator of the German government for Aerospace; Pedro Duque, Spanish Minister for Science, Innovation and Universities; Jan Wörner, ESA Director General; Giancarlo Giorgetti, State Secretary in the Office of the Italian Prime Minister and Stefano Gualandris, Special Advisor to the State Secretary; Jean-Yves Le Gall, President of CNES; Roberto Battiston, President of ASI
The OHB Group's total revenues are heavily dependent on performance milestones and delivery dates in the respective projects and are therefore non-linear as planned. After nine months, the ratio amounted to EUR 633.7 million, an improvement of a good 17% over the same period last year (previous year: EUR 541.0 million). The operating result (EBITDA) increased to EUR 47.1 million (previous year: EUR 41.6 million). After nine months, the operating EBITDA margin stabilised at 7.4% (previous year: 7.7%). Despite the higher depreciation of EUR 12.7 million in the current fiscal year after EUR 9.9 million in the previous year, EBIT rose to EUR 34.4 million after EUR 31.7 million in the previous year. By contrast, the corresponding EBIT margin of 5.4% was down on the previous year (5.9%). The result from ordinary activities after the first nine months of 2018 increased to EUR 31.7 million (previous year: EUR 29.6 million). Increased income taxes of EUR 10.8 million (previous year: EUR 8.9 million) in the 2018 reporting period resulted in a slightly improved consolidated net profit for the period of EUR 21.0 million (previous year: EUR 20.6 million).
After the first nine months of the financial year, cash flow from operating activities showed only a slight increase in cash outflow of EUR 35.1 million compared with the same period last year (EUR 33.1 million). The cash flow from investing activities of EUR – 13.7 million improved compared to the same period of the previous year (EUR –19.8 million) due to the scheduled decline in investments in fixed assets. The cash flow from financing activities in the amount of EUR 55.1 million was higher than in the same period of the previous year due to the planned increase in borrowings, but at the same time cash and cash equivalents increased by EUR 20.9 million to EUR 66.0 million after EUR 45.1 million in the same period of the previous year.
After nine months of the 2018 financial year, the Group's firm order backlog stood at EUR 2,408 million, compared with EUR 2,049 million in the same period of the previous year. OHB System AG accounted for a good 77% of this total (EUR 1,857 million).
At EUR 756.4 million as of September 30, 2018, the OHB Group's total assets were EUR 36.7 million, around 5% higher than the previous year's figure of EUR 756.4 million at December 31, 2017 (EUR 719.7 million). The main drivers of this difference were increased property, plant and equipment, other intangible assets, inventories, and cash and cash equivalents. In total, financial liabilities increased by a good EUR 64 million are offset by trade payables reduced by around EUR 48 million and amounts due to customers from production orders on the liabilities side. Group equity increased by EUR 15.8 million to EUR 199.4 million. At the beginning of 2018, equity had been revalued through a one-time-effect due to the replacement of the previous accounting standards IAS 11 (Construction Contracts) and IAS 18 (Revenue) by the new provisions of IFRS 15 (Revenue from Contracts with Customers). As a result of the increase from operating activities, the equity ratio increased again to 26.4% as of September 30, 2018.
| Q3/2018 | Q3/2017 | 9M/2018 | 9M/2017 |
|---|---|---|---|
| 229,289 | 175,368 | 613,373 | 508,077 |
| 229,244 | 186,823 | 633,705 | 540,976 |
| 18,794 | 15,781 | 47,107 | 41,577 |
| 13,419 | 12,458 | 34,448 | 31,712 |
| 12,699 | 11,737 | 31,722 | 29,557 |
| 8,180 | 8,493 | 20,965 | 20,639 |
| 0,41 | 0,43 | 1,06 | 1,04 |
| 756,361 | 757,052 | 756,361 | 757,052 |
| 199,446 | 199,682 | 199,446 | 199,682 |
| 5,588 | 43,439 | – 36,105 | – 33,052 |
| 5,938 | 3,411 | 14,315 | 21,250 |
| 2,630 | 2,392 | 2,630 | 2,392 |
| EUR 000s | 9M/2018 | 9M/2017 |
|---|---|---|
| Space industry | 587,936 | 487,831 |
| Aviation | 6,984 | 4,088 |
| Antenna | 10,325 | 6,820 |
| Others | 8,128 | 9,338 |
| Total | 613,373 | 508,077 |
| EUR 000s | 9M/2018 | 9M/2017 |
|---|---|---|
| Germany | 223,447 | 150,078 |
| Rest of Europe | 380,507 | 355,663 |
| Rest of World | 9,419 | 2,336 |
| Total | 613,373 | 508,077 |
Research and development expenses decreased to EUR 17.9 million in the first nine months of 2018, down from EUR 25.7 million in the prior-year period.
At EUR 14.2 million, capital expenditure on fixed assets in the first nine months of 2018 was well below the previous year's figure of EUR 21.3 million, which included investments in production facilities to prepare for Ariane 6 production at MT Aerospace in Augsburg.
As of September 30, 2018, the OHB Group had 2,630 employees, an increase compared to the 2,420 at December 31, 2017, the balance sheet date. The number of employees for "Other World" is made up of 43 in Chile and 65 in French Guiana.
In the annual report for 2017, the opportunities and risks report contains detailed information on opportunities and risks that could influence business success. There were no significant changes in the OHB Group's risk and opportunity profile in the current reporting period.
The Management Board expects the OHB Group's consolidated total revenues to reach EUR 1,000 million in the fiscal year 2018. EBITDA and EBIT are expected to reach EUR 65 million and EUR 47 million respectively in 2018. Based on the high order backlog and the positive outlook for the current financial year, we assume that the financial position and asset situation will continue to develop well.
At the IAC in Bremen, ESA Director General Johann-Dietrich Wörner and OHB System Management Board members Marco Fuchs and Kurt Melching signed the contract for the next science mission PLATO (Planetary Transits and Oscillations of Stars) on October 4. OHB System AG is thus the main contractor for this mission with a contract value of EUR 288 million. The European Space Agency ESA plans to launch the PLATO space observatory in 2026 in order to detect exoplanets in the orbit of other solar systems and investigate their properties.
One of the methods for detecting exoplanets is to look for the decrease in brightness they cause, when they pass in front of their parent's star. Such a celestial orientation is called planetary transit.
Managing Director of OHB Czechspace Ariane Wyen
In November, the subsidiary OHB Czechspace s.r.o. commenced operations at its new premises in Brno, Czech Republic. The company will set up an engineering team at its Brno site, initially focusing on structural analysis and design services, systems engineering and procurement of structural hardware. OHB engineer Ariane Wyen has been appointed Managing Director of OHB Czechspace. The first step is the establishment of a qualified engineering team for all essential fields of systemic space.
OHB SE is also examining which production and assembly capabilities are to be developed for the entire Group in the Czech Republic. In a second step, OHB Czechspace intends to set up an operating facility for this purpose at its founding location in Klatovy. The company will cooperate closely with Aerotech Czech in Klatovy, in which OHB holds an interest. This company is responsible for the Czech share in the Ariane 6 rocket.
On October 10, representatives of OHB Italia SpA signed a EUR 168.2 million contract with the Luxembourg government – Ministry of Foreign and European Affairs, Directorate of Defense – for a total volume of EUR 168.2 million. Under the terms of this contract, OHB Italia will realise a high-resolution optical satellite which, with its worldwide coverage, will be able to deliver over 100 images per day. The 600kg satellite will be designed for a lifetime of 7 years and is expected to be launched with a Vega-C rocket from Kourou, French Guiana in 2022. OHB Italia also concluded a corresponding contract with the launch service provider Arianespace in October.
Artistic Impression of the Earth Observation Satellite
On October 24, OHB System AG signed a contract with the German Federal Office for Equipment, Information Technology and Utilisation of the Armed Forces (BAAINBw) in Koblenz for the development and manufacture of the French SARah Partner Ground Segment (F-SPGS). The F-SPGS is a ground segment connected to the German SARah radar satellite system. SARah will replace the German SAR-Lupe radar satellite system, also developed and operated by OHB. The F-SPGS gives France access to radar images of the SARah system currently being implemented for Germany.
OHB may also be commissioned to operate the F-SPGS system via two five-year options that have already been negotiated. In return, Germany will be given the opportunity to submit image orders to the French CSO optical system via its own ground segment.
OHB Management Board members Dr. Ingo Engeln (4th from left) and Kurt Melching (6th from left) in Koblenz with the Kornelia Lehnigk-Emden, Director and Executive Officer of the Federal Office for Equipment, Information Technology and Exploitation of the Federal Armed Forces (BAAINBw).
| EUR 000s | Q3/2018 | Q3/2017 | 9M/2018 | 9M/2017 |
|---|---|---|---|---|
| Sales | 229,289 | 175,368 | 613,373 | 508,077 |
| Changes in inventories of finished goods | ||||
| and work in progress | – 6,406 | 1,814 | 2,319 | 9,441 |
| Other own work capitalised | 5,291 | 4,252 | 12,323 | 15,758 |
| Other operating income | 1,070 | 5,389 | 5,690 | 7,700 |
| Total revenues | 229,244 | 186,823 | 633,705 | 540,976 |
| Cost of materials | 138,736 | 109,208 | 378,222 | 312,675 |
| Staff costs | 61,096 | 47,756 | 164,893 | 143,730 |
| Depreciation/amortisation of intangible assets and property, plant and equipment |
4,375 | 3,323 | 12,659 | 9,865 |
| Other operating expenses | 11,618 | 14,078 | 43,483 | 42,994 |
| Earnings before interest and taxes (EBIT) | 13,419 | 12,458 | 34,448 | 31,712 |
| Other interest and similar income | 888 | 706 | 1,679 | 1,704 |
| Other financial expenses | 1,370 | 1,530 | 4,035 | 4,061 |
| Currency translation gains/losses | – 238 | 107 | – 370 | 202 |
| Investment income | 0 | – 4 | 0 | 0 |
| Net finance expense | – 720 | – 721 | – 2,726 | – 2,155 |
| Earnings before taxes | 12,699 | 11,737 | 31,722 | 29,557 |
| Income taxes | 4,519 | 3,244 | 10,757 | 8,918 |
| Consolidated net profit for the period | 8,180 | 8,493 | 20,965 | 20,639 |
| Share of OHB SE shareholders in net profit for the period | 7,165 | 7,543 | 18,440 | 18,109 |
| Minority interests | 1,015 | 950 | 2,525 | 2,530 |
| Number of shares excl. own shares | 17,400,100 | 17,387,600 | 17,392,924 | 17,387,600 |
| Earnings per share (basic in EUR) | 0.41 | 0.43 | 1.06 | 1.04 |
| Earnings per share (diluted in EUR) | 0.41 | 0.43 | 1.06 | 1.04 |
| Q3/2018 | Q3/2017 | 9M/2018 | 9M/2017 |
|---|---|---|---|
| 8,180 | 8,493 | 20,965 | 20,639 |
| 0 | 0 | 0 | 0 |
| 0 | 0 | 0 | 0 |
| 4,672 | – 2,265 | 1,886 | 2,242 |
| 4,672 | – 2,265 | 1,886 | 2,242 |
| 40 | 39 | – 150 | 0 |
| 0 | 0 | 0 | 0 |
| 18 | 36 | – 270 | 274 |
| 0 | 0 | 0 | 0 |
| 58 | 75 | – 420 | 274 |
| 4,730 | – 2,190 | 1,466 | 2,516 |
| 12,910 | 6,303 | 22,431 | 23,155 |
| 11,890 | 5,342 | 19,987 | 20,543 |
| 1,020 | 961 | 2,444 | 2,612 |
| Remeasurement of defined benefit plans of associated companies |
| EUR 000s | 9M/2018 | 9M/2017 |
|---|---|---|
| Earnings before interest and taxes (EBIT) | 34,448 | 31,712 |
| Income taxes paid | – 5,808 | – 8,521 |
| Other non-cash expenses (+)/income (–) | 85 | 0 |
| Depreciation/amortisation of intangible assets and property, plant and equipment | 12,659 | 9,866 |
| Changes in pension provisions | – 2,573 | – 1,798 |
| Profit (-)/loss (+) from the disposal of assets | 276 | 11 |
| Gross cash flow | 39,087 | 31,270 |
| Increase (–)/decrease (+) in own work capitalised | – 12,323 | – 14,983 |
| Increase (–)/decrease (+) in inventories | – 10,603 | – 8,330 |
| Increase (–)/decrease (+) in receivables and other assets including deferred items | – 28,436 | – 48,404 |
| Increase (+)/decrease (–) in liabilities and current provisions | 32,077 | 16,547 |
| Increase (+)/decrease (–) in prepayments received | – 54,934 | – 9,151 |
| Cash outflow for operating activities | – 35,132 | – 33,051 |
| Payments made for investments in non-current assets | – 15,288 | – 21,250 |
| Payments received from disposals of non-current assets | 350 | 31 |
| Interest and other investment income | 1,287 | 1,443 |
| Cash outflow for investing activities | – 13,651 | – 19,776 |
| Dividends distributed | – 6,955 | – 6,955 |
| Payments made for the settlement of financial liabilities | – 3,501 | – 11 |
| Payments received from raising borrowings | 67,848 | 51,489 |
| Minority interests | 0 | – 109 |
| Interest and other finance expense | – 2,338 | – 3,211 |
| Cash inflow from financing activities | 55,054 | 41,203 |
| Cash changes to cash and cash equivalents | 6,271 | – 11,624 |
| Scope-of-consolidation-related changes to cash and cash equivalents | 1,585 | 0 |
| Currency-translation-related changes to cash and cash equivalents | – 468 | 201 |
| Cash and cash equivalents at the beginning of the period | 58,578 | 56,567 |
| Cash and cash equivalents at the end of the period | 65,966 | 45,144 |
| ASSETS Goodwill 7,131 Other intangible assets 110,171 Property, plant and equipment 84,463 Shares carried at equity 2,388 Other financial assets 35,192 Other long-term receivables and assets 2,163 Securities 219 Deferred taxes 17,160 Long-term assets 258,887 Inventories 59,440 Trade receivables 99,336 Contract assets 226,211 Tax receivables 3,794 Other non-financial assets 42,502 Securities 225 Cash and cash equivalents 65,966 Current assets 497,474 Total assets 756,361 SHAREHOLDERS' EQUITY AND LIABILITIES Subscribed capital 17,468 Additional paid-in capital 14,923 Retained earnings 521 Unrealised gains and loss recognised under equity – 913 Treasury stock – 696 Consolidated profit 145,993 Shareholders' equity excluding minority interests 177,296 Minority interests 22,150 Shareholders' equity 199,446 Provisions for pensions and similar obligations 97,208 Non-current other provisions 1,312 Non-current financial liabilities 30,312 Non-current advance payments received on orders 19,221 Deferred income tax liabilities 36,770 Non-current liabilities and provisions 184,823 Current provisions 46,095 Current financial liabilities 128,335 Trade payables 100,544 Contract liabilities 68,189 Current advance payments received on orders 5,736 |
EUR 000s | 30/9/2018 | 31/12/2017 |
|---|---|---|---|
| 7,131 | |||
| 103,217 | |||
| 77,698 | |||
| 2,388 | |||
| 32,610 | |||
| 2,152 | |||
| 219 | |||
| 14,134 | |||
| 239,549 | |||
| 48,837 | |||
| 70,613 | |||
| 257,634 | |||
| 3,396 | |||
| 40,630 | |||
| 461 | |||
| 58,578 | |||
| 480,149 | |||
| 719,698 | |||
| 17,468 | |||
| 14,923 | |||
| 521 | |||
| – 2,099 | |||
| – 781 | |||
| 157,599 | |||
| 187,631 | |||
| 19,649 | |||
| 207,280 | |||
| 96,587 | |||
| 1,891 | |||
| 30,414 | |||
| 8,291 | |||
| 36,505 | |||
| 173,688 | |||
| 27,977 | |||
| 63,886 | |||
| 83,141 | |||
| 133,978 | |||
| 5,811 | |||
| Income tax liabilities | 3,528 | 2,711 | |
| Other financial and non-financial liabilities 19,665 |
21,226 | ||
| Current liabilities 372,092 |
338,730 | ||
| Total equity and liabilities 756,361 |
719,698 |
| EUR 000 | Sub scribed capital |
Share premium |
Retained earnings |
Unrealised gains and losses recog nised under equity |
Consoli dated profit |
Treasury stock |
Share holders' equity excluding minority interests |
Minority interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| Balance on January 1, 2017 |
17,468 | 14,923 | 521 | – 4,682 | 141,199 | – 781 | 168,648 | 14,942 | 183,590 |
| Dividend payment | 0 | 0 | 0 | 0 | – 6,955 | 0 | – 6,955 | 0 | – 6,955 |
| Comprehensive income |
0 | 0 | 0 | 2,517 | 18,109 | 0 | 20,626 | 2,421 | 23,047 |
| Other changes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance on September 30, 2017 |
17,468 | 14,923 | 521 | – 2,165 | 152,353 | – 781 | 182,319 | 17,363 | 199,682 |
| Balance on January 1, 2018* |
17,468 | 14,923 | 521 | – 2,099 | 157,599 | – 781 | 187,631 | 19,649 | 207,280 |
| Changes in accounting standards |
0 | 0 | 0 | 0 | – 23,585 | 0 | – 23,585 | 0 | – 23,585 |
| Balance on January 1, 2018 |
17,468 | 14,923 | 521 | – 2,099 | 134,014 | – 781 | 164,046 | 19,649 | 183,695 |
| Dividend payment | 0 | 0 | 0 | 0 | – 6,955 | 0 | – 6,955 | 0 | – 6,955 |
| Comprehensive income |
0 | 0 | 0 | 1,547 | 18,440 | 0 | 19,987 | 2,444 | 22,431 |
| Change in scope of consolidation |
0 | 0 | 0 | – 361 | 494 | 0 | 133 | 57 | 190 |
| Other changes | 0 | 0 | 0 | 0 | 0 | 85 | 85 | 0 | 85 |
| Balance on September 30, 2018 |
17,468 | 14,923 | 521 | – 913 | 145,993 | – 696 | 177,296 | 22,150 | 199,446 |
*as reported
| Space Systems |
Aerospace + Industrial Products |
Holding | Consoli dation |
Total | |
|---|---|---|---|---|---|
| EUR 000s | 2018 | 2018 | 2018 | 2018 | 2018 |
| Sales | 482,668 | 136,595 | 0 | – 5,890 | 613,373 |
| of which internal sales | 149 | 5,741 | 0 | – 5,890 | 0 |
| Total revenues | 498,605 | 140,637 | 6,861 | – 12,398 | 633,705 |
| Cost of materials and services purchased | 325,243 | 58,391 | 0 | – 5,412 | 378,222 |
| EBITDA | 31,440 | 15,587 | 80 | 0 | 47,107 |
| Depreciation/amortisation | 8,377 | 4,262 | 20 | 0 | 12,659 |
| EBIT | 23,063 | 11,325 | 60 | 0 | 34,448 |
| EBIT margin | 4.6% | 8.1% | 5.4% | ||
| Own value creation | 216,861 | 123,882 | 340,743 | ||
| EBIT margin on own value creation | 10.6% | 9.1% | 10.1% |
| 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% |
OHB SE is a listed corporation domiciled in Germany. These consolidated financial statements on the interim report of OHB SE and its subsidiaries ("Group") for the first nine months of fiscal year 2018 were released for publication by resolution of the Management Board on November 13, 2018.
MT Management Service GmbH was included in the scope of consolidation for the first time as of January 1, 2018 on the basis of an updated materiality valuation. MT Management Service GmbH is a 100% subsidiary of MT Aerospace Holding and was founded in 2013. The initial consolidation did not result in any goodwill. The company was included retrospectively and the business success up to the time of first consolidation was recorded in the profit carried forward.
The interim consolidated financial statements of OHB SE include the following fully consolidated companies:
The results of affiliated companies not fully consolidated are not taken into account during the year.
The accompanying 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 financial reporting as adopted by the European Union and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB. Accordingly, these interim financial statements do not include all the information and disclosures required by IFRSs for consolidated financial statements at the end of the financial year.
In the opinion of the Management Board, the accompanying unaudited consolidated financial statements include all adjustments required to present fairly the results of operations for the interim period. Results for the period ended September 30, 2018 are not necessarily indicative of future results.
As part of the preparation of consolidated financial statements for interim reporting in accordance with IAS 34 "Interim Financial Reporting", the Management Board is required to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses for the Group. Actual amounts may differ from these estimates.
Income taxes are based on a tax rate of approx. 32%. No material changes have been made to the basis of estimates since the 2017 Annual Report. A detailed description of the accounting principles is published in the notes to the consolidated financial statements of the Annual Report 2017.
The accounting and valuation methods applied in the interim consolidated financial statements correspond to those applied in the last consolidated financial statements at the end of the financial year, with the exception of the following changes: From 2018, the previous standards IAS 11 (Construction Contracts) and IAS 18 (Revenue) will be replaced by the new provisions of IFRS 15 (Revenue from Contracts with Customers). OHB performed an analysis of the application of the new IFRS 15 regulations for all customer contracts not yet terminated as of December 31, 2017 and made the necessary revenue recognition adjustments. OHB applies the modified retrospective method for the introduction, whereby the effect on the 2017 annual financial statements is recognised directly in equity in the form of a change in retained earnings. In individual cases, the timing of sales revenues from long-term development and production contracts changes as a result of the introduction. Until 2017, in the "Space Systems" segment under IAS 11, individual contracts that are objectively related to each other were regarded as an economic unit and revenue recognition was measured using a uniform approach. This measurement is not applicable under IFRS 15, so each of these contracts must be measured separately. This results in a retrospective reduction in profit shares already realised in previous periods due to a reduction in proportionate sales revenues.
OHB will apply IFRS 9 (Financial Instruments) for the first time in fiscal 2018. There were no material effects on the balance sheet and income statement.
The effects at the beginning of 2018 are shown in the table below.
| Adjustments | |||
|---|---|---|---|
| EUR 000s | 31/12/2017 | IFRS 9 and IFRS 15 |
1/1/2018 |
| Non-current assets | 239,549 | 239,549 | |
| Inventories | 48,837 | 48,837 | |
| Trade receivables | 70,613 | 70,613 | |
| Contract assets | 257,634 | – 30,439 | 227,195 |
| Cash and cash equivalents | 58,578 | 58,578 | |
| Other current assets | 44,487 | 44,487 | |
| Total assets | 719,698 | – 30,439 | 689,259 |
| Shareholders' equity | 207,280 | – 23,585 | 183,695 |
| Provisions | 126,455 | 126,455 | |
| Financial liabilities | 94,300 | 94,300 | |
| Deferred income tax liabilities | 36,505 | – 6,854 | 29,651 |
| Trade payables | 83,141 | 83,141 | |
| Contract liabilities | 133,978 | 133,978 | |
| Other liabilities | 38,039 | 38,039 | |
| Total equity and liabilities | 719,698 | – 30,439 | 689,259 |
The original measurement categories and carrying amounts of financial assets and liabilities under IAS 39 and the new measurement categories and carrying amounts of these financial assets and liabilities under IFRS 9 are shown in the table below.
| EUR 000s | Valuation categories according to IAS 39 |
Valuation categories according to IFRS 9 |
Book values in accor dance with IAS 39 as of 31/12/2017 |
Book values in accor dance with IFRS 9 as of 01/01/2018 |
|---|---|---|---|---|
| Financial assets | ||||
| Trade receivables | Loans and receivables |
Valued at acquisition costs |
70,613 | 70,613 |
| Securities | Loans and receivables |
Valued at acquisition costs |
219 | 219 |
| Other financial assets | Loans and receivables |
Valued at acquisition costs |
31,624 | 31,624 |
| Cash and cash equivalents | Loans and receivables |
Valued at acquisition costs |
58,578 | 58,578 |
| Securities | Financial assets held for trading |
Financial assets at fair value through profit or loss |
461 | 461 |
| Equity interests measured at fair value through other comprehensive income |
Classified as available-for-sale instruments |
Financial assets at fair value through other compre hensive income |
32,610 | 32,610 |
| 194,105 | 194,105 | |||
| Financial liabilities Trade payables |
Valued at acquisition costs |
Valued at acquisition costs |
83,141 | 83,141 |
| Financial liabilities | Valued at acquisition costs |
Valued at acquisition costs |
94,300 | 94,300 |
| Other financial liabilities | Valued at acquisition costs |
Valued at acquisition costs |
4,261 | 4,261 |
| 181,702 | 181,702 |
The following table shows the reconciliation of the carrying amounts of financial assets and liabilities in accordance with IAS 39 as of December 31, 2017 to the carrying amounts in accordance with IFRS 9 as of January 1, 2018.
This interim report has not been audited orreviewed by a statutory auditor in accordance with Section 317 of the German Commercial Code.
| Book value according to IAS 39 at |
Reclassification | Valuation | Book value according to IFRS 9 at |
|
|---|---|---|---|---|
| EUR 000s | 31/12/2017 | effect | effect | 1/1/2018 |
| Financial instruments valued at acquisition cost |
||||
| Trade receivables | 70,613 | 0 | 0 | 70,613 |
| Securities | 219 | 0 | 0 | 219 |
| Other financial assets | 31,624 | 0 | 0 | 31,624 |
| Cash and cash equivalents | 58,578 | 0 | 0 | 58,578 |
| Total financial instruments valued at acquisition cost |
161,034 | 0 | 0 | 161,034 |
| Financial assets available for sale | ||||
| Equity interests measured at fair value | 32,610 | – 32,610 | 0 | 0 |
| Total financial assets available for sale | 32,610 | – 32,610 | 0 | 0 |
| Financial assets held for trading | ||||
| Securities | 461 | – 461 | 0 | 0 |
| Total financial assets held for trading | 461 | – 461 | 0 | 0 |
| Financial assets at fair value through other comprehensive income (FVOCI) |
||||
| Equity shares | 0 | 32,610 | 0 | 32,610 |
| Total financial assets at fair value through other comprehensive income (FVOCI) |
0 | 32,610 | 0 | 32,610 |
| Financial assets at fair value through profit or loss (FVPL) |
||||
| Securities | 0 | 461 | 0 | 461 |
| Total financial assets at fair value through profit or loss (FVPL) |
0 | 461 | 0 | 461 |
"To the best of our knowledge, and in accordance with the principles of proper accounting, the 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 development of the Group for the remaining months of the financial year."
Bremen, 13 November 2018 The Management Board
Q3/9M INTERIM REPORT Analyst conference call
GERMAN EQUITY CAPITAL MARKET FORUM Analyst and Investor Conference, Frankfurt/Main
CAPITAL MARKET DAY 2019 Oberpfaffenhofen
CONSOLIDATED FINANCIAL STATEMENTS 2018 Annual press conference, Bremen 08.30 am Analyst conference (DVFA), Frankfurt /Main 01.00 pm
MAY 9, 2019 Q1/3M INTERIM REPORT Analyst conference call
MAY 24, 2019 ANNUAL GENERAL MEET ING Bremen
AUGUST 13, 2019 Q2/6M INTERIM REPORT Analyst conference call
Q3/9M INTERIM REPORT Analyst conference call
to Werder Bremen
32
Copy and content: OHB SE, Bremen, Germany
PvF Investor Relations, Oberursel, Germany
Ligaturas – Reportdesign, Kleinmachnow, Germany
BAAINBw PIZ AIN, Bernd Lehmen, CC BY-SA, CNA /FOTAC Wolf-Georg Kirst, ESA /ATG medialab, Fotoetage, JM GUILLON, MT Aerospace, NASA, Nikolai Wolff, OHB Italia, OHB System AG
Karl-Ferdinand-Braun-Str. 8 28359 Bremen, Germany
Phone: +49(0)421 2020-8 FAX: +49(0)421 2020-613 [email protected]
www.ohb.de
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