technotrans expects stronger second half-year 2012

revenue of € 42.0 million for the first half 2012 / downturn has slowed in the 2nd quarter / earnings (EBIT) stable at € 0.9 million / targets for the full year 2012 confirmed

As expected, business for the technotrans Group was very quiet in the first half of 2012. Revenue of € 42.0 million was generated in the first six months, compared with € 48.3 million in the corresponding prior-year period. With a revenue share amounting to € 21.6 million, the second quarter of 2012 showed an improvement on the first quarter (€ 20.4 million) but was still 10.8 percent down on the revenue total for the second quarter of the previous year (€ 24.2 million). As in the first quarter, the decline was attributable to the fortunes of the printing industry.

The fall in revenue of over € 6.3 million compared with the first half of 2011 is also reflected in earnings. The EBIT margin fell from 5.6 percent in the previous year to 4.3 percent in the first six months of the current financial year. EBIT (earnings before interest and taxes) consequently reached € 1.8 million, compared with € 2.7 million in the prior-year period. EBIT for the second quarter was again € 0.9 million, representing a margin of 4.2 percent (previous year 6.0 percent). As in the first quarter of 2012, the net income for the period in the second quarter was € 0.5 million, bringing the total for the first half to € 1.0 million. This corresponds to overall earnings per share outstanding of € 0.16.

“Because we had based our plans for the financial year on a gradual quarter-by-quarter improvement, the overall performance to date is in line with our expectations”, says Henry Brickenkamp, spokesman of the Board of Management of technotrans AG. Bearing in mind that the 2012 first-half figures include the costs of the four-yearly drupe exhibition, this nevertheless reflects how the cost base has been significantly reduced. Management therefore expects a significant improvement in the second half already from a moderate rise in revenue.

Compared to the previous year, the number of employees within the technotrans Group continued to fall in the first half. The effects of the recent years' consolidation measures continue to show. At the June 30 reporting date the group employed 624 persons (previous year 665), comprising 476 (previous year 502) in Germany and 148 abroad (previous year 163).

The segments

The downturn in revenue expected for the first half was predictably driven exclusively by the Technology segment. Revenue for the segment after six months came to just € 24.3 million (previous year € 31.0 million), a drop of 21.7 percent. However the downward trend slowed somewhat in the second quarter to only -17.1 per cent (previous quarter -26.2 percent). Revenue over this period came to € 12.8 million (previous year € 15.4 million). The weakening of demand since the second half of 2011 was attributable to the general economic environment and the specific conditions prevailing in the printing industry, where structural change was compounded by a characteristic reluctance to invest in the run-up to the drupa industry exhibition.

As a consequence of these circumstances, but also because of expenses for the drupa, the result for the segment remained negative at € 1.1 million in the first half of 2012. The EBIT margin improved slightly to -3.9 percent in the second quarter (Q1: -5.1 percent). The higher volume of business expected in the second half of the year should produce a further steady improvement.

By contrast, revenue for the Services segment was unaffected by the broader environment. In the first half of 2012 it increased by 2.1 percent to € 17.6 million (previous year € 17.3 million). Revenue for the segment also remained stable in the second quarter despite the drupa, where it is normally not possible to pass on the full cost of providing intensive support for the installations on the stands of customers during setting up the show and throughout its duration. On the other hand the segment continued to benefit from growing retrofit business and the trend towards the modernisation of existing facilities as an alternative to investing in new equipment, for instance in newspaper printing.

The result for the segment, too, put in a stable performance and came to € 2.9 million for the first half, as in the previous year; this represented an EBIT margin of 16.2 percent. The continuing high level of capacity utilisation in the Services area in general contributed towards this performance. Meanwhile the recruitment of additional personnel at gds AG, among other things for the new location in South Germany, temporarily weighed on earnings.

Financial position

Based on a net income of € 1.0 million for the first half of the 2012 financial year, the cash flow from operating activities before changes in working capital totaled € 3.6 million (previous year € 4.6 million). Changes in working capital released cash approaching € 0.8 million in the first half of the current financial year. Cash from operating activities therefore reached € 4.3 million after six months (previous year € 1.1 million). After deduction of interest and income tax payments, the net cash from operating activities for the period under review amounted to a healthy € 3.6 million (previous year € 0.1 million).

The cash outflow from investing activities at June 30, 2012 again came to only € 0.5 million. At € 3.2 million, the free cash flow after the first six months of the current financial year was at a healthy level (previous year € -1.4 million).

In the course of the first half of 2012, technotrans took advantage of the satisfactory financial position and the current low interest rates both to repay loans according to plan and to adjust its future financing structure. As a result, the repayment of short-term borrowings amounting to € 3.0 million contrasts with the inflow of funds amounting to € 1.8 million from the raising of long-term borrowings.

Cash and cash equivalents at June 30 climbed to € 14.8 million (previous year € 10.0 million). Together with available credit facilities agreed and promised, the financial position thus provides adequate leeway both to finance current business and for potential acquisitions.

The equity ratio at June 30, 2012 was 56.2 percent. Net debt, in other words interest-bearing liabilities less cash, has fallen to € 1.4 million; the gearing ratio at the reporting date was only 3.7 percent.


At the mid-point of 2012, assumptions about the 2012 financial year appear to be borne out. “After a cautious start, business is now picking up again and laying the foundations for a slightly stronger second half”, says Brickenkamp. “We therefore continue to believe that the original plan envisaging revenue in the region of € 90 to 95 million for 2012 is realistic.”

Management expects demand to return to normal in the wake of the drupa, with the well-filled order books of printing press manufacturers in addition leading to higher capacity utilisation over the coming quarters. This recovery should help revenue for the second half of the year to approach the prior-year level.

The business performance of the newest subsidiary Termotek, too, has been positive in the current financial year, and also the partnership with KLH Kältetechnik GmbH, another company active in the area of laser cooling, has made very promising progress to date. Last but not least, the Services segment will continue to act as a steady source of revenue and profit that can benefit the development of the entire group.

“We expect that the result for the second half will again be lifted by revenue, and should moreover reflect the anticipated positive development by virtue of the absence of the first half's cost factors like the drupe exhibition”, says Finance Director Dirk Engel. “There were already signs of such a trend in June, the highest-revenue month of the year to date. We therefore stand by the target corridor of an EBIT margin of 5 to 6 percent for this financial year.”