HY revenue growth of 18.5 percent to € 48.3 million / earnings (EBIT) improved by 72.9 percent to € 2.7 million / growth driver is outside the printing industry
Revenue for the technotrans Group rose to € 24.2 million in the second quarter, representing growth of 15.3 percent compared with the prior-year quarter (€ 21.0 million). Revenue reached an overall € 48.3 million for the first half of 2011, an increase of 18.5 percent on the same period of the previous year (€ 40.8 million). Slightly more than half of this rise is attributable to the acquisition of Termotek AG at the start of the year, but a further revival in the printing industry also contributed. Revenue for the Technology segment therefore climbed 30.9 percent, but the Services segment likewise enjoyed slight growth. The operating result (EBIT) for the second quarter amounted to € 1.5 million (previous year € 0.9 million, +56.2 percent). This brought total earnings for the first half of 2011 to € 2.7 million (previous year € 1.6 million), an increase of 72.9 percent. The EBIT margin of 6.0 percent for the second quarter therefore already lay within the target corridor for the full year of six to seven percent.
“These figures show that the technotrans Group is once again performing better than the printing industry in general,” says Henry Brickenkamp, Spokesman of the Board of Management of technotrans AG. “The explanation is to be found in the activities beyond the printing industry that are creating extra potential for us to grow.“
Net income for the six-month period was € 1.3 million (previous year € 0.8 million, +57.7 percent). This corresponds to earnings per share of € 0.20 (previous year € 0.13) for shares outstanding.
The takeover of Termotek AG has meant that the number of employees in the technotrans Group has risen for the first time since the crisis, by 56 employees. At the June 30 reporting date the group employed 665 persons (previous year 609), comprising 502 (previous year 446) in Germany and an unchanged 163 abroad.
The segments
Revenue for the Technology segment rose from € 12.5 million in the previous year to € 15.4 million in 2011, and therefore reached an overall € 31.1 million for the first half, compared with € 23.7 million in the prior-year period. This increase of 30.9 percent is substantially attributable to the acquisition of Termotek, a specialist supplier of laser cooling systems. It is expected that Termotek AG will contribute approaching € 10 million in revenue in its first year as part of the technotrans Group. The continuing modest recovery in the printing industry, and especially in standard equipment for the sheet-fed offset sector, likewise aided revenue growth.
In the second quarter, the result for the segment moreover managed to reach the break-even point for the first time in a long while. After € -1.1 million in the previous year (this figure includes the savings from short-time), EBIT for the first half is now just € -0.2 million. Termotek likewise contributed to this positive development.
Revenue in the Services segment again made steady progress in the second quarter of 2011, as expected. Revenue reached € 8.8 million, compared with € 8.5 million both in the same period of the previous year and in the preceding quarter. It continues to suffer from a lack of momentum from project business, while the other areas are making largely satisfactory progress.
The result for the segment was likewise kept pleasingly constant at this level of revenue. Second-quarter EBIT reached € 1.5 million, up from € 1.4 million in the previous year; the margin was 16.8 percent. Earnings thus totalled € 2.9 million for the first half of 2011, equivalent to 8.8 percent growth on the prior-year period and a stable margin of more than 16 percent.
Financial position
Based on a net income of € 1.3 million for the first half of 2011, the cash flow from operating activities before changes in working capital totalled € 4.6 million (previous year € 2.9 million).
In the first half of the current financial year, the changes in working capital were also influenced by the rising volume of business, but also by the consolidation of the acquisition of Termotek AG. Cash from operating activities amounted to € 1.1 million (previous year € 2.8 million). Working capital in particular is expected to show substantial improvements in the second half.
After deduction of actual interest and income tax payments, the latter being influenced in 2010 by a tax rebate and in 2011 by a tax arrears payment following a tax office investigation, the net cash from operating activities for the period under review amounted to only € 59 thousand (previous year € 3.6 million). The cash employed for investing activities amounting to € 1.5 million in the period under review (previous year € 0.5 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). The free cash flow remained negative at € -1.4 million at the end of the first half (previous year: positive, € 3.2 million).
Cash and cash equivalents at the end of the first half were down € 3.2 million at just under € 10 million (31.12.2010: € 13.1 million).
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 € 9.8 million (after the acquisition of the interest); the gearing ratio at the reporting date was 28.0 percent.
Outlook
As matters stand Management expects to be able to achieve the planned revenue total of around € 100 million (previous year € 85.9 million) if the printing industry’s moderate growth does not ease off significantly in the second half. In order to identify and access additional long-term growth prospects for technotrans, a number of projects had been kicked off. “Our entry into laser cooling has already revealed within a very short period of time what a positive contribution these activities make, and we expect that these effects will increase even further as time goes by”, says Brickenkamp. “As a technology business, we are well equipped to spread ourselves across a broad basis and play a significant role in many different sales markets, generating increased revenue as a result and, through our growth story, thus attracting the attention that is needed to drive up the share price significantly.”
“The progress made in the first half therefore constitutes a sound basis for achieving our targets for the full year”, Dirk Engel, CFO of technotrans, confirms. “According to our estimates, a revenue shortfall of € 1 to 2 million will not have any palpable effect on achieving our target of an EBIT margin of between 6 and 7 percent in 2011.”
For 2012 Management again expect to see dynamic growth that will significantly bolster the proportion of revenue coming from outside the printing industry. This should go hand in hand with a further improvement in profitability, taking it roughly back up to the level of previous years. “Our strategy, which we intend to pursue concertedly, focuses on sustained, profitability-oriented growth”, 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 from the internet on www.technotrans.com, under Investor Relations - Reports.
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.