Business News
technotrans posts growth of revenue and earning in third quarter
Wednesday 10. November 2010 - revenue in Q3 up by 13.3% / EBIT margin stabile at 4.2% / moderate growth expected to continue
The revenue of the technotrans Group for the third quarter of the 2010 financial year amounted to slightly more than 21.4 million and was therefore both higher than the level of the second quarter and 13.3% above the figure for the prior-year quarter ( 18.9 million). The recovery – underpinned substantially by the Technology segment – thus continued. Q3 revenue for that segment was 21.0% up on the figure for the prior-year quarter. Revenue for the first nine months of the financial year reached 62.2 million, broadly on a par with the prior-year period ( 62.6 million). Business progress to date has therefore confirmed our expectations of a modest recovery in the current financial year.
With revenue remaining virtually unchanged from the previous year, earnings saw a marked improvement. Gross profit at the nine-month mark was up 13.3% to 20.8 million (previous year 18.4 million), and the gross margin reached 33.4%. The operating result (EBIT) was again positive in the third quarter at 0.9 million (previous year: -4.5 million) and approximately of the same magnitude as in the second quarter, even though positive exchange-rate effects did not have quite such a pronounced impact. From September, there is furthermore no longer any financial relief from short-time. After nine months EBIT was 2.5 million, representing an EBIT margin of 4.0 %. The objective of steering the company back to stable profitability in 2010 was achieved.
The net income for the period was 0.6 million for the third quarter, bringing the total for the first nine months to 1.5 million. That corresponds to earnings per share of 0,23 (previous year -0.99) for shares outstanding.
At the reporting date of September 30, 2010 the technotrans Group employed a total of 625 persons, 41 fewer than at the corresponding point of the previous year. In response to the upturn in business, after 18 months short-time was terminated from September 1, 2010.
The segments
Revenue for the Technology segment again rose in the third quarter, to 13.2 million. Despite the traditional summer break, revenue consequently showed a slight improvement on the second quarter and was 21.0 % up on the prior-year quarter ( 10.9 million). The nine-month revenue total of just under 37.0 million is almost on a par with the previous year ( 37.1 million), the first time no revenue decrease since the outbreak of the crisis.
The result for the segment remains marginally negative at -0.5 million in the third quarter, taking the loss for the financial year to date to -1.6 million (previous year -9.9 million, figure includes non-recurring effects from restructuring).
The Services segment again made a broadly stable contribution to revenue of 8.2 million (previous year 8.0 million, +2.9%). Parts business performed well, while installation volume in connection with major projects is relatively weak.
The Q3 result for the segment was again 1.4 million, equivalent to an EBIT margin of 16.7%. The total for the first nine months is 4.0 million, an increase of 21.2 % on the prior-year period ( 3.3 million).
Financial position and net worth
The balance sheet total has edged up by 2.5% from 69.2 million to 71.0 million since the start of the year. On the back of the slight recovery in business, inventories grew by around 1.6 million to 17.7 million, while cash and cash equivalents simultaneously rose by around 21.5 % to 12.5 million.
The changes since the start of the year on the equity and liabilities side largely concerned the financial liabilities, the maturities of which have shifted towards the medium to long-term as a result of the new financing concept. Current liabilities thus fell by around 6.7 million or 40.9 % since the start of the year, whereas non-current liabilities simultaneously rose by 5.4 million. Because of these changes, working capital (current assets – current liabilities) grew from 9.0 million in the first quarter to 17.0 million in the third quarter. The equity ratio has steadily improved in the course of the year to reach 46.9 % at the end of the third quarter.
The net amount of debt owed, in other words interest-bearing liabilities less cash, fell from 12.4 million to 8.9 million, with a gearing ratio of 26.8 % at the reporting date.
Based on a net profit of 1.5 million for the first nine months of 2010, the cash flow from operating activities before changes in net current assets totalled 4.7 million (previous year -3.9 million). Net cash from operating activities at the nine-month mark reached 4.3 million (previous year 3.0 million). In relation to revenue, this produced a cash flow ratio of 7.0%. The free cash flow at the reporting date again is clearly positive at 3.5 million (previous year 1.7 million).
Outlook
The printing industry is slowly recovering from the dramatic crisis. Printing press manufacturers have been reporting rising levels of orders and revenue for a number of months, and as expected this development has led to an improved business situation at technotrans. For the first time in over two years, the business confidence index for the German printing industry also returned to positive territory in September.
“All in all we are therefore confident of reaching our revenue and earnings targets for the 2010 financial year, even if – as matters stand – revenue is likely to be towards the lower end of the target range of 85 – 90 million”, says Henry Brickenkamp, Spokesperson of the Board of Management. “Operating profitability has stabilised in recent quarters, with the result that we should also complete the year with the anticipated EBIT margin of between three and five percent. Individual months have already shown us that profitability improves significantly along with rising business volume”, adds Dirk Engel, CFO of technotrans.
Management likewise expects to see a further rise in revenue next year, though this rise will be as modest as in the current financial year. Brickenkamp: “Planning certainty is still relatively poor, but the expanding order books of printing press manufacturers strengthen our belief that the market is still on course for recovery. Profitability should also continue to improve along with the higher volume.”
To ensure that technotrans retains long-term growth prospects beyond the printing industry, the company has now for some time been increasingly exploiting the healthy basis provided by its business model to identify and explore new applications away from the printing industry, and therefore tap new potential for growth. “We also expect to see initial revenue streams from activities in applications outside the printing industry next year,” Mr Brickenkamp explains. “They will play a decisive role in the future development of the company by safeguarding growth in the long term.”
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.