WashTec AG — Earnings Release 2010

Nov 4, 2010

News Details

Corporate | 4 November 2010 07:17

WashTec AG: Significant earnings growth for the full year 2010 despite difficult environment

WashTec AG / Key word(s): Quarter Results

04.11.2010 / 07:17

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Press Release

Significant earnings growth for the full year 2010 despite difficult environment:

– Slight revenue increase to EUR 190.3m in the first three quarters, comparable third quarter slightly lower than last year

– After nine months, EBIT climbs 65.3% to EUR 11.9m; EBIT margin improves from 3.9% to 6.3%

– Increase in order backlog compared to prior year results in revenue growth above prior year level despite continuing investment restraints; slight increase in revenues and a jump in earnings expected for the full year 2010

– Confidence for 2011 due to the North American region, no sustained market recovery in Europe currently in sight

Augsburg, November 04, 2010 – WashTec AG – the leading supplier of innovative solutions for the carwash business worldwide – is able to report a slight increase in revenues and a jump in earnings for the first three quarters of 2010 despite a still challenging environment. Revenues increased in the reporting period by 2.1% to EUR 190.3m. WashTec was able to generate revenues above prior year’s level in all product categories. Since the new-equipment business did not enjoy a general market recovery in the third quarter as well, the growth in revenues came exclusively from the continuous strengthening of the company’s market position. The revenue growth was generated both by the expansion in business activities in North America, where service and chemical sales had been increased significantly in Canada since August of this year, and by the acquisition in Australia, where revenues stabilized following the acquisition of a former dealer. Adjusted to account for the net revenue effect from the acquisitions, the business in the core markets of Europe was stable over the entire year and was, to the largest extent, at last year’s level. The adjusted revenue in the third quarter was slightly below the prior year. WashTec was able, however, to improve its market position by, for example, strengthening market share in Southern Europe and by increasing chemical sales in various markets. The most recent acquisition in the chemicals sector in Scandinavia will start to have a favorable effect on business in 2011. Although the company is currently reporting a significantly higher order backlog than last year, the increase is attributable primarily to acquisitions and the penetration of new markets.

Operating result increased by 65.3%

Measures for reducing costs and improving efficiency that were implemented by WashTec also led in the third quarter to an increase in EBIT. Thus, after three quarters, earnings increased by 65.3% to EUR 11.9m (prior year: EUR 7.2m). EBT was almost doubled, from EUR 5.3m to EUR 10.4m. Consolidated net income rose from EUR 1.8m to EUR 5.2m. Accordingly, earnings per share rose from EUR 0.13 to EUR 0.37.

Balance sheet continually improving

Due to the positive development in earnings, the most important balance sheet ratios improved considerably. Thus, for example, the company succeeded in the period since the end of 2009 in improving its equity ratio from 42.8% to 43.7%. The basis for this improvement was that equity capital increased by 3.6% to EUR 88.7m, while the balance sheet total rose only slightly to EUR 202.9. Because the net finance debt declined by 12.7% from EUR 37.0m to EUR 32.3m, the company has a gearing – defined as the ratio of net finance debt to equity capital – of 0.36 (December 31, 2009: 0.43) and can therefore post a relatively low figure. After three quarters, WashTec can also report a favorable development in cash flow. Due to the improved working capital management in the first half of the year, the net operating cash flow rose by EUR 5.7m to EUR 18.6m (prior year: EUR 12.9m), which was largely in step with the results.

Outlook: Confidence thanks to leading position in technology and the market

Even though investment restraint still prevails in many markets, the company expects for the fourth quarter of 2010 an increase in revenue due to its strengthened market position. Together with the measures implemented to improve efficiency and the cost structures, this should result in higher annual revenues and a disproportionately high increase in earnings in 2010 compared to 2009. WashTec’s market position, specifically as a result of acquisitions and market penetration, has further improved.

The international expansion of the sales and service network, the most recent product innovations in Europe and the United States, and the ongoing measures to reduce costs and improve efficiency underscore and solidify WashTec’s position as market leader in the car wash industry.

After the financial and economic crisis caused a significant reduction in revenues in most markets starting at the end of 2008, markets have now begun to stabilize. To date, however, there have been no signs of a general recovery of the markets. WashTec does not expect a substantial recovery for 2011. Therefore, from today’s perspective, for the coming fiscal year the company expects – if no substantial changes occur – a slight increase in revenues in Europe and a significant growth in revenues and earnings in the North American region based specifically on the Shell tender. Overall, an above average increase in revenues and an improvement in the EBIT margin to 8-9% are projected for 2011. In the absence of a substantial market recovery in Europe, the EBIT margin is expected to be 8-10% in the mid- and long-term. Given a recovery of the European markets, the Company continues to hold to its previous forecast that in the mid- and long-term, the revenue growth will be between 4-7% and the EBIT margin may exceed 12%.

As in 2010, WashTec will remain selective in searching out growth opportunities which serve, on the one hand, to improve the Group’s regional presence and, on the other hand, propel the value added chain into high-margin business activities. From today’s perspective, the financial resources required for this endeavor can be generated from the Group’s own internal cash flow.

Key figures:

EURm, IFRS	Q1 – Q3 2010	Q1 – Q3 2009	Change
Revenues	190.3	186.4	+2%
EBITDA	19.0	14.0	+36%
EBIT	11.9	7.2	+65%
EBIT-margin	6.3%	3.9%
Adjusted EBIT	12.6	8.4	+50%
EBT	10.4	5.3	+96%
Consolidated net income	5.2	1.8	+189%
Earnings per share*	0.37	0.13	+185%
Net cash flow	18.6	12.9	+44%

EURm, IFRS	Sep 30, 2010	Dec 31, 2009	Change
Balance sheet total	202.9	199.9	+2%
Equity	88.7	85.6	+4%
Equity ratio	43.7%	42.8%
Net finance debt	32.3	37.0	-13%
Gearing**	0.36	0.43
Net working capital***	63.3	64.2
Employees	1,642	1,564

*: Base: unchanged number of shares: 13,976,970

**: net liabilities to banks plus long-term and short-term financial lease liabilities

***: Trade receivables + Inventories – trade payables

The full interim report may be downloaded at www.washtec.de.

Contact:

WashTec AG

Argonstrasse 7

86153 Augsburg

Tel.: +49 (0)821 – 55 84 – 0

Fax: +49 (0)821 – 55 84 – 1135

End of Corporate News

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Language:	English
Company:	WashTec AG
	Argonstraße 7
	86153 Augsburg
	Germany
Phone:	+49 (0)821 55 84-0
Fax:	+49 (0)821 55 84-1135
E-mail:	washtec@washtec.de
Internet:	www.washtec.de
ISIN:	DE0007507501
WKN:	750750
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart

End of News	DGAP News-Service

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