WashTec AG — Earnings Release 2012

Nov 5, 2012

News Details

Corporate | 5 November 2012 07:26

WashTec AG: WashTec reports stable revenues in challenging environment

WashTec AG / Key word(s): Quarter Results

05.11.2012 / 07:26

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Press Release

WashTec reports stable revenues in challenging environment

– Revenues (adjusted for foreign currency effects) after three quarters at prior year level, order backlog significantly above prior year level

– EBIT declines to EUR 7.0m due to increasing operating costs and non-recurring effects

– Sound balance sheet: financial debt reduced still further, equity ratio at 41.1%

– Free cash flow significantly improved from EUR 6.4m to EUR 12.0m

Augsburg, November 5, 2012 – The WashTec Group – the leading supplier of innovative solutions for the car wash business worldwide – was able to maintain its revenues (adjusted for foreign exchange effects) at EUR 212.7m during the first three quarters of 2012, thereby matching last year's level, despite persistently difficult economic conditions. After factoring in the positive foreign exchange effects, revenues increased by 2.1% from EUR 212.7m to EUR 217.1m. The Group thereby reported 3% revenue growth in the third quarter. The weak incoming orders reported at the beginning of the year have increased also in Europe during the third quarter so that the Group's order backlog at the end of the third quarter – contrary to the trend in the machine construction industry – was substantially higher than it was in the same period last year.

With respect to the segments, the market weaknesses in Core Europe – above all in Southern Europe, the Benelux countries and Great Britain – have yielded declining revenues and a significant drop in earnings. In contrast, the divisions in North America and Emerging Europe greatly increased revenues. In the North American business, this has led – together with the implemented restructuring measures – to a significant improvement in earnings, whereas Emerging Europe has reported lower contributions to earnings because of the higher investments that were made in expanding the sales structures. In a 12-month comparison on the costs side, the cost savings only partially offset the increases in scaled wages and raw materials as well as the rise in other procurement costs at the Group level. Moreover, major expenses were incurred specifically because of the costs of exhibiting at the biennial automechanika trade fair and the one-time payments relating to the changes on the management board, which were implemented at the end of July. Thus, EBIT (earnings before interest and taxes) came in at EUR 7.0m, which was below the prior year level of EUR 10.6m. After adjusting for non-recurring and foreign currency effects, this figure equaled EUR 8.6m and was therefore EUR 3.5m below the prior year level (EUR 12.1m). When making comparisons to the prior year period, it should be noted that a correction to earnings had to be carried out in the third quarter pursuant to IAS 8 because of the prior year's accounting errors in North America and that therefore EBIT had to be corrected downward from EUR 11.7m to EUR 10.6m. The declining trend is also reflected in the after-tax profits (EUR 2.4m, instead of EUR 4.6m) and in the earnings per share (EUR 0.17, instead of EUR 0.33), which are significantly below the prior year figures.

In addressing the current development, Management Board Member, Michael Busch, commented: ' Even though overall revenues in the first nine months were slightly higher and therefore met expectations, we are not satisfied with the earnings. In view of the higher costs and the still difficult economic conditions, we will continue to pursue the strategic prepositioning. In this regard, the positive trend in North America is encouraging. We have a very good market and technology position, our balance sheet is healthy, and we are generating high cash flows. We will need to utilize these strengths more aggressively in order to reclaim our old profitability '.

North American business further improved

The positive business growth of the previous two quarters continued in North America. The restructuring is on schedule and has already led to significant improvements in results. In Canada, the basis has been created for further improving the earnings situation in the future. Due to the global customer relations and the positive outlook, WashTec has decided to retain its presence in North America. The prospects for strategic cooperation remain under review.

Sound balance sheet and cash flow generation

Due to an improved capital management, net cash flow through the end of September rose from EUR 13.5m to EUR 15.6m, and free cash flow climbed from EUR 6.4m to EUR 12.0m. The net financial debt declined from EUR 24.4m at the end of 2011 to EUR 15.0m. The equity ratio continued to climb, from 38.6% to 41.1%. The gearing ratio therefore fell from 0.32 to 0.19.

Outlook 2012: Slight revenue growth and proportional increase in adjusted earnings

After the end of the first three quarters, WashTec is seeking for the entire Group in fiscal year 2012 a slight revenue growth of 1 – 2% (adjusted for exchange rate effects) with a proportional increase in adjusted earnings. In this regard, the increasingly volatile market environment and concomitant business development in Core Europe must be taken into account.

The report on the first nine months of 2012 and additional information about the Company can be found on its website: www.washtec.de .

Information on WashTec:

The WashTec Group has its registered offices in Augsburg, Germany, and is the leading supplier of innovative solutions for the car wash business worldwide. WashTec employs more than 1,600 persons and has its own subsidiaries in the core markets of Europe, the United States and Canada as well as in China and Australia. WashTec also has independent sales partners in roughly 60 countries.

Contact:

Corporate Communications

WashTec AG

Argonstraße 7

86153 Augsburg

Tel.: +49 (0)821 – 55 84 – 0

Key financial information for the Group for the first nine months of the year:

EURm, IFRS	9M 2012	9M 2011*	Q3 2012	Q3 2011*
Revenues	217.1	212.7	74.5	72.3
EBITDA	14.4	18.3	4.3	7.3
EBIT	7.0	10.6	1.9	4.6
EBIT prior to correction pursuant to IAS 8	–	11.7	–	4.3
EBIT (adjusted)	8.6	12.1	3.4	5.5
EBIT margin (adjusted)	4.0%	5.7%	4.6%	7.6%
EBT	5.4	9.4	1.1	4.2
Net income	2.4	4.6	0.0	1.8
Earnings per share ** (in EUR)	0.17	0.33	0.00	0.13
Net cash flow	15.6	13.5
Free cash flow	12.0	6.4
EURm, IFRS	Sep 30, 2012	Dec 31, 2011
Balance sheet total	187.7	195.0
Equity	77.1	75.2
Equity ratio	41.1 %	38.6 %
Net finance debt	15.0	24.4
Gearing ratio***	0.19	0.32
Net current assets****	73.3	76.3
Employees	1,663	1,668

* Comparative figures adjusted pursuant to IAS 8

**: Basis: average number of shares: 2012 = 13,971,515, 2011 = 13,976,970

***: Net finance debt divided by equity

****: Trade receivables + inventories – trade payables

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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