Fiscal Year 2012 within the target corridor / revenue down 6.8 percent / EBIT up 11.9 percent / 12 cent dividend per share / 2013 revenue to exceed the 100-million-threshold / share of non-print business to exceed 30 percent
Total revenue for the technotrans Group reached € 90.7 million for the past financial year, representing a drop of 6.8 percent on the previous year (€ 97.3 million), and therefore was only the lower end of the target range (€ 90 to 95 million). As intended, profitability improved in the second half along with the increased volume of business. Overall, EBIT for the 2012 financial year reached € 5.4 million, compared with € 4.8 million in the previous year (+11.9 percent). The EBIT margin was thus 5.9 percent, which was at the upper end of the target corridor of 5 to 6 percent despite the lower business volume.
The negative impact of the general reluctance to invest prior to the drupa was amplified in technotrans’ case by the fact that two customers sought insolvency. “The printing industry’s return to normal in the second half was slightly below par compared with what would be expected in a drupa year, in addition the weak economic data for the final quarter contributed here”, said Henry Brickenkamp, Spokesperson of the Board of Management of technotrans AG. “Nevertheless, technotrans had a generally much better second half, which was sufficient to compensate at least in part for the first half’s fall in business.”
The net profit for the 2012 financial year is € 3.1 million, equivalent to a rate of return of 3.4 percent (previous year 3.1 percent). The earnings per share figure for shares outstanding is therefore € 0.48. The Board of Management and the Supervisory Board will propose to the Shareholders' Meeting in May 2013 that a dividend of € 0.12 per share outstanding be distributed. After a break of four years, technotrans thus resumes its common practice of enabling the shareholders to participate in the company’s success. “Our goal is to return to the pattern of distributing 50 percent of the consolidated net profit, provided no current investment requirements or major acquisitions stand in the way of using financial resources in this way”, says Dirk Engel, Financial Director of technotrans AG.
The number of employees in the technotrans Group increased from 637 to 662 in the course of 2012.
The segments
The fall in revenue for the 2012 financial year affected exclusively the Technology segment. Revenue for the segment came to € 53.7 million (previous year € 61.7 million), a decrease of 12.9 percent. Orders from printing press manufacturers generated by the drupa were sufficient to restore its business volume to almost normal levels in the second half of the year.
The fall in revenue naturally had an impact on the segment’s profitability. Despite appropriate measures such as the introduction of short-time, earnings were negative by around € 1.1 million mid-way through the year. Even though business volume returned to normal as the year progressed, this was not sufficient to make good the shortfall; however the second-half result for the segment was positive for the first time since the crisis in 2008. Overall, earnings before interest and taxes (EBIT) for the Technology segment improved slightly year on year to € – 0.8 million (prior year € – 0.9 million).
The Services segment again made good progress in the 2012 financial year. Revenue rose by 3.8 percent to € 36.9 million (previous year € 35.6 million). The subsidiary gds AG, which provides services and software in the sphere of technical documentation, was a major contributor to this positive development. As well as realising its plans for organic growth, it acquired a majority interest in Sprachenwelt GmbH with effect from September 1, 2012, through which it has now added translations to its portfolio of services.
Earnings for the Services segment again improved on the already very good prior-year figure with an above-average rise of 7.7 percent to € 6.1 million (previous year € 5.7 million). This equates to an EBIT margin of 16.6 percent, compared with 16.0 percent in the previous year.
Financial position
The positive result and the improved cash flow played a part in strengthening technotrans’ balance sheet at the reporting date: the equity ratio rose to 63.2 percent, cash and cash equivalents reached € 18.7 million and net debt was turned around into net liquidity of € 8.5 million. This was not just down to the positive result for the financial year, but also ultimately to the sale of the property in Gersthofen.
On the basis of a net income for the year of € 3.1 million (previous year € 3.0 million), the cash flow from operating activities before changes to working capital totalled € 8.8 million (previous year € 8.1 million). The net cash from operating activities climbed to € 11.0 million (previous year € 5.9 million). This positive operating cash flow was sufficient to cover the financing of both investment spending (€ 1.4 million) and the acquisition. The free cash flow reached € 13.2 million (previous year € 3.6 million). Cash and cash equivalents at year-end rose by 46.2 percent to € 18.7 million (previous year € 12.8 million).
New Markets
The activities outside the printing industry will again deliver substantial growth in 2013, both from organic effects and as a result of acquisitions. The main contributor will be KLH Kältetechnik. KLH generated revenue of more than € 15 million in the past financial year and is expect at least to maintain that level in 2013, even amid an uncertain economic environment. KLH is a supplier of industrial cooling systems for use mainly in the laser industry, but also in the machine tool industry and in medical technology. Now that the various different performance categories have been brought together under one roof (low cooling performance from Termotek, medium cooling performance from technotrans, high cooling performance from KLH) the technotrans Group is a full-liner able to offer its customers the right product for every application.
Also technotrans’ activities in the non-print area are bearing fruit. The company was already appointed serial supplier to Sauer GmbH, part of the Gildemeister Group, for cooling lubricant preparation in the shape of the toolsmart at the start of the year; and this success was followed up by securing a leading supplier of machinery and systems for the manufacture and processing of flexible packaging as a development partner. At the Euroblech, technotrans also gave its self-developed spray lubrication process for forming technology applications its first public showing. A number of installations in the metal processing industry have already impressively demonstrated the system’s superiority to conventional solutions. Last but not least, we have gained a foothold in the area of e-mobility in securing the development contract from Siemens for a cooling system for advanced tram systems. All these highly promising projects will contribute to the company’s growth over the next years and provide sound reasons to believe that technotrans will become less dependent on both the business cycle and on the structural problems being experienced by the printing industry.
Outlook
At the start of 2013 the indications are that the business cycle will be subdued in the first half of the year. Hopes are pinned on a recovery in the second half. Nevertheless the technotrans Group starts the 2013 financial year with bright prospects. “Through the takeover of KLH Kältetechnik GmbH we have significantly extended our base for supplying cooling systems for laser applications and aim to tap further potential in that field, for instance in the markets of the machine tool industry and medical technology”, explains Henry Brickenkamp. “We therefore expect revenue to increase by around 25 percent in 2013, to € 110 million – give or take 5 percent.”
This growth generated by acquisitions will be rounded off by a large number of internal projects that will contribute towards organic growth that could offset a further possible slight contraction in the printing industry.
“We are planning to achieve an overall EBIT margin of 6 to 7 percent for the group on the basis of the anticipated revenue volume. Compared to 2012, this would represent another significant increase in the operating result”, says Dirk Engel. “Earnings will ultimately be determined to a great extent by the volume of revenue, but also by how long it takes us to implement all the measures at KLH that will optimise the company’s profitability.” As previously, the margin will also be under pressure as a result of the substantial resources that technotrans is investing in the future product pipeline. “However we are convinced that we will soon begin to reap rich rewards from this investment in the future growth of the company, and are therefore prepared to bear these costs up front”, Brickenkamp points out.