revenue rises 19 percent to € 74.1 million after nine months / earnings (EBIT) up 87.4 percent to € 4.6 million / growth driver for 2012 shall remain outside the printing industry
The technotrans Group maintained the recent trend in generating slightly more revenue in the third quarter of the financial year than in the two preceding quarters. Revenue rose by 20.1 percent to € 25.8 million (prior-year quarter € 21.4 million). After nine months, revenue therefore reached € 74.1 million, a gain of 19.0 percent. The acquisition of Termotek AG once more accounted for slightly more than half of growth, but core business in the printing industry and services also progressed well.
Despite adverse exchange rate movements the operating result (EBIT) reached € 1.9 million for Q3 2011 (prior-year quarter € 0.9 million), an increase of 112.3 percent. This represents an EBIT margin of 7.5 percent as against 4.2 percent in the prior-year quarter and 6.0 percent in the preceding quarter. EBIT at the nine-month mark amounted to € 4.6 million (previous year € 2.5 million, including benefits from short-time, +87.4 percent).
“Business performance was slightly atypical in that the summer quarter is usually somewhat weaker due to the factory shutdowns at major customers”, said Henry Brickenkamp, Spokesman of the Board of Management of technotrans AG. “Besides the pleasing increase in revenue the development in profitability over the last 12 months and especially the EBIT margin of 7.5 percent in the current quarter demonstrates that the company is successfully on track to regain its former levels of profitability.”
The effective tax rate remained virtually unchanged at 40.8 percent for the three quarters because the profit contributions of certain international subsidiaries were low. Net income for the first nine months reached € 2.4 million (previous year € 1.5 million, +60.9 percent). This corresponds to earnings per share of € 0.37 (previous year € 0.23) for shares outstanding.
Following the takeover of Termotek AG, the 2011 number of employees in the technotrans Group rose for the first time since the start of the crisis. At the September 30 reporting date the group employed 660 persons (previous year 625), comprising 507 (previous year 463) in Germany and 153 abroad (previous year 162).
Third-quarter revenue for the Technology segment rose from € 13.2 million in the previous year to € 16.3 million in 2011. Overall, revenue of € 47.3 million was generated in the first nine months of the financial year (previous year € 37.0 million, +28.1 percent). Around two-thirds of growth is attributable to the Termotek acquisition at the start of 2011, but core business in the printing industry also made pleasing progress.
Volume growth coupled with a systematic focus on profitable product areas ultimately produced a positive result for the segment in Q3 2011 for the first time since the start of the crisis (€ 357 thousand, prior-year quarter € -465 thousand). At € 160 thousand (previous year € -1.6 million), the result for the segment for the first nine months of the year is consequently now in the black.
Revenue for the Services segment grew to € 9.5 million compared with a stable trend in the first two quarters of the year (prior-year quarter € 8.2 million, +15.4 percent). All areas of the Services segment contributed towards this growth, including gds AG (Technical Documentation). Overall, the segment therefore generated revenue of € 26.8 million in the course of the first nine months of 2011 (previous year € 25.3 million, +5.8 percent).
The EBIT margin was again kept pleasingly steady in the quarter under review. Earnings amounted to € 1.6 million (prior-year quarter € 1.4 million), equivalent to a margin of 16.6 percent. Cumulative earnings for the first three quarters came to € 4.5 million, representing growth of 10.8 percent (previous year € 4.0 million).
Based on a net income of € 2.4 million for the first nine months of the 2011 financial year, the cash flow from operating activities before changes in working capital totalled just under € 7.3 million (previous year € 4.7 million).
The changes in working capital in the period under review (€ 3.1 million) were influenced by the growing volume of business, the increased scope of consolidation following the acquisition of Termotek AG and the rise in trade receivables due to reporting date effects (€ 1.9 million). Cash from operating activities amounted to € 4.1 million (previous year € 3.7 million).
After deduction of interest and income tax payments, the net cash from operating activities for the period under review amounted to € 2.7 million (previous year € 4.3 million). In relation to revenue, this produced a cash flow ratio of 3.7 percent (previous year 7.0 percent). Within taxes, there were the non-recurring effects of a tax rebate in 2010 and a tax payment in 2011 for previous years following a tax office investigation.
The cash employed for investing activities amounting to € 1.7 million (previous year € 0.8 million) comprises a still very modest component for generally restrained investment activity and the cash outflow for the purchase price component paid for the acquisition of an interest (around € 1.0 million). After nine months, the free cash flow was once again positive at € 1.0 million (previous year € 3.5 million).
Borrowings amounting to € 2.9 net were repaid during the first nine months of the current financial year (previous year € 1.4 million). Cash and cash equivalents at the end of the first nine months were down € 1.9 million at € 11.2 million. In conjunction with credit facilities available, cash and cash equivalents therefore continue to provide ample financial leeway for current business operations.
The net amount of debt owed, in other words interest-bearing liabilities less cash, rose from € 5.9 million at the end of 2010 (prior to the acquisition of the interest) to € 7.4 million (after the acquisition of the interest); the gearing ratio at the reporting date was 20.2 percent.
As matters stand the Board of Management expects that the targets for the 2011 financial year will be met: with revenue nearing € 100 million, the EBIT margin should be 6 to 7 percent.
Revenue for the Technology segment is slightly below expectations after nine months. This development is attributable to the print area, which has staged a slightly weaker recovery than expected as the year has progressed. “Bearing in mind the business climate in the printing industry, it is unlikely that the shortfall will be made up in the remaining months of the year – if anything we expect a slight downturn in business for the next two quarters” says Brickenkamp. “Our activities outside the printing industry are helping to compensate for the anticipated temporary slowdown in demand.”
Dirk Engel, CFO, adds: “The Technology segment’s earnings were back in the black after three quarters of 2011. This development has been facilitated also by our decision to withdraw product groups that are ultimately unable to make a positive contribution to profitability. We will continue to work on optimising our profitability.”
The Board of Management intends to advance the company along its course of growth in the coming 2012 financial year. Along with seizing opportunities in its core business, the printing industry, it aims specifically to tap the potential in other markets in order to put technotrans’ business model on a wider scale and thus to lay the foundations of a successful future. Focus is on the growth market for laser technology, which technotrans will be able to share in through the subsidiary Termotek and ideally increase the presence in that market in the future. A second emphasis is placed on the machine tool industry. “The positive response both from the producers of the machines and from their customers confirms our belief that we have a benefit to offer in this market with our systems expertise. We will continue to tap this potential systematically”, says Brickenkamp.
Note: Statements made in this report relating to future developments are based on our cautious estimate of future events. The actual performance of the company may differ substantially from that planned, as it depends on a large number of market-related and economic factors, some of which are beyond the company’s control.
Download: The full Interim Report can be downloaded under Investor Relations - Reports.
Dates: The 2011 Annual Report is scheduled for publication on March 13, 2012.
Securities: technotrans AG – ISIN DE000A0XYGA7 – German Securities Identification No. WKN A0XYGA
These press releases contain forward-looking statements which are based on assumptions and estimations by the management board of technotrans AG. Even though the management board is of the opinion, that those assumptions and estimations are realistic the future development and the projected results may deviate substantially from the forward-looking statements. Those deviations can be due to several factors including but not limited to changes in the macro-economic situation, in the exchange rates, in the interest rates and in the graphic arts industry. technotrans AG gives no warranty and does not assume the liability for any damages in case the future development and the projected results do not correspond with the forward looking statements.