revenue grows 25.0 percent to € 52.5 million in HY 2013 / EBIT improves by 26.4 percent € to 2.3 million / growth by acquisition, core business flat despite of economic environment / full project pipeline ‚New Markets‘
The technotrans Group generated revenue of € 52.5 million over the first six months of 2013. This represents growth of 25.0 percent compared with the prior-year period (€ 42.0 million). This rise was driven first and foremost by the acquisition of KLH Kältetechnik GmbH and its Asian sister companies at the start of 2013. Revenue for the second quarter of 2013 amounted to € 26.2 million, matching the first-quarter figure and representing a rise of 21.2 percent on the prior-year quarter (€ 21.6 million). Earnings for the first half thus came to € 2.3 million (prior year € 1.8 million), this represents an EBIT margin of 4.3 percent. Second-quarter EBIT showed a 30.1 percent improvement to € 1.2 million compared with the same period of 2012 (€ 0.9 million). Net income for the six-month period came to € 1.4 million (prior year € 1.0 million). Earnings per share, for shares outstanding, are therefore € 0.21 (prior year € 0.16) after six months.
“Business during the first half of 2013 reflects the subdued economic environment as seen with many other companies“, says Henry Brickenkamp, Speaker of the Board of Management of technotrans AG. “Still we have identified a whole range of opportunities for the second half so that we stick to our goals for the full year.” The targets for 2013 are revenues of € 110 million – give or take 5 percent, and an EBIT margin of between 6 and 7 percent.
The number of employees in the group climbed from 662 at the end of 2012 to 769 on June 30, 2013. This increase for the first half is likewise attributable to the acquisitions.
The segments
Of the total revenue of € 52.5 million for the first half of 2013, the amount of € 33.4 million (prior year € 24.3 million, +37.3 percent) was attributable to the Technology segment. Because the two halves of the previous financial year yielded very different results due to the drupa, there is only limited value in drawing a direct comparison with the first half of 2012; it makes more sense to use an average half-year for 2012 as the benchmark (€ 26.8 million, +24.6 percent). Second-quarter revenue reached € 16.5 million, compared with € 12.8 million in the previous year (+29.0 percent). The increase in the current financial year is largely attributable to business expansion following the takeover of KLH Kältetechnik GmbH. On the other hand the other business areas remained more or less on the level of the previous year in the absence of the expected economic recovery mid-way through 2013.
Earnings for the Technology segment were again slightly negative at € -0.4 million (€ -0.5 million) in the second quarter of 2013. Overall, the loss for the first half thus amounted to € -0.9 million (previous year € -1.1 million). The EBIT margin reached -2.4 percent in the second quarter and -2.7 percent in the first half. The result for the segment continues to be diminished by the margins in laser business, which could not yet be improved across the board over the year to date, and by the need for investment (first and foremost manpower) to achieve the goals for growth in operations beyond the printing industry.
The Services segment maintained its growth in the second quarter and brought in € 9.7 million (previous year € 8.8 million, +9.9 percent). Revenue for the first half of 2013 thus came to € 19.1 million (previous year € 17.6 million), a rise of 8.1 percent. In all, the segment now brings in 36.3 percent of total revenue. There was also a positive impact from the acquisition of a majority interest in Sprachenwelt GmbH, through which gds AG has been adding translations to its portfolio of services since the second half of 2012.
The financial performance in the Services segment again proved to be stable. The good results of recent quarters were matched, at € 1.6 million (previous year € 1.4 million). After six months the result for the segment thus came to € 3.2 million (previous year € 2.9 million) and the EBIT margin was virtually unchanged at 16.6 percent.
Financial position
The equity ratio at June 30, 2013 was once again 55.8 percent. The group’s net debt was € 64 thousand; gearing is consequently likewise zero.
Based on net income of € 1.4 million for the first six months, the cash flow from operating activities before changes in working capital totaled € 4.0 million (€ 3.6 million). Changes on the liabilities side relate primarily to the balance sheet date, first and foremost because KLH reduced their financial liabilities during the first six months of 2013. Over the same period of the previous year, cash of € 0.8 million was released through changes in working capital.
After deduction of interest and income tax payments, the net cash from operating activities for the period under review was again close to zero (previous year € 3.6 million).
The cash sum of € 5.1 million used for investing activities comprises the customary maintenance investments as well as the cash outflow for the acquisition of the interest in KLH Kältetechnik GmbH and its Asian sister companies (€ 3.3 million net), plus a conditional purchase price component for the acquisition of Termotek AG (€ 0.8 million).
At the six-month mark the free cash flow therefore remained negative at € -5.0 million (€ 3.2 million).
Credit facilities agreed were used to finance the acquisition of the interest at the start of the financial year, while scheduled repayments amounting to € 2.0 million were made in the course of the first half. A payment of € 0.8 million by way of a dividend for the 2012 financial year was made to the shareholders. The net cash employed for financing activities therefore came to € 2.7 million (€ -1.3 million) after six months. Since the balance sheet date of December 31, 2012 cash and cash equivalents have fallen by 12.7 percent to € 16.3 million. In conjunction with available credit facilities approved and promised, the current financial position still offers ample leeway for financing current business and also for potential acquisitions.
Outlook
The business performance over the first six months initially fell a little short of expectations for the current financial year due to the economic environment. The technotrans Group’s first-half growth of +25 percent to € 52.5 million was by and large only achieved thanks to the acquisition of KLH. The other divisions, which are more or less involved in the mechanical engineering sector, merely operated at the average level for the previous year.
Nevertheless the Management has identified a whole range of opportunities for the second half. “We are confident that we can increase our market share in the print area yet further”, says Brickenkamp. “In addition the Japanese printing press manufacturer Komori reported good sales figures at the China Print show in May. We believe there are good prospects of tapping into this stream of orders.” Besides meanwhile technotrans is receiving orders from the Chinese printing press manufacturer Hans Gronhi on a fairly regular basis and is now in contact with a large number of manufacturers of digital printing systems worldwide, for everything from development projects and prototypes to initial deliveries of production models.
„In the new markets area for example we are enjoying considerable success with our spray lubrication system for stamping and forming technology. The latest installations have confirmed our (and our customers’) expectations that our systems offer scope for realising significant savings”, Brickenkamp adds, “and the same applies in principle to the battery cooling area, where we are already handling projects in partnership with Siemens, Saft, Actia and Vantage. Even if the unit totals here are still small, we are convinced that this will develop into a highly interesting new market for us in the long term because e-mobility is an area that is bound to become much more important over the next few years.”
The takeover of Termotek AG (2011) and KLH Kältetechnik GmbH (2013) has given the technotrans Group a particular focus on the laser industry. While on the one hand the product lines are being consolidated in order to maximise efficiency and realise economies of scale, at the same time technotrans is increasing the market presence in specific areas and is taking on extra sales personnel at the international subsidiaries.
“We adhere to our view that an EBIT margin of 6 to 7 percent is realistic based on the targeted revenue level, assuming that the pattern of business mirrors our experience of the second half of 2012,” Dirk Engel, CFO of technotrans AG, confirms. “But if the economy’s recovery is delayed any further, our results could potentially come in only at the bottom end of the target range.” The management therefore does not yet see any reason to revise to its full-year forecast.