Consumables

Growth for technotrans through applications outside printing industry

Thursday 15. May 2014 - Revenue up 3.1 percent to € 27.1 million in Q1 2014 / EBIT improves by 29.8 percent to € 1.4 million / free cash flow positive again / outlook for 2014 confirmed

The business performance of the technotrans Group in the first three months of the 2014 financial year is in line with the targets for the full year. Overall, revenue increased from € 26.3 million in the previous year to € 27.1 million in the current financial year (up 3.1 percent). Revenue shares from outside the printing industry were again the primary contributors to this growth. Earnings before interest and taxes (EBIT) improved by around 30 percent in the first quarter of 2014 to € 1.4 million (previous year: € 1.1 million). With an EBIT margin of 5.2 percent (previous year: 4.1 percent), the rate of return is within the target corridor of 4 to 6 percent for 2014 overall. The net income for the first three months was € 0.9 million (previous year: € 0.6 million), equivalent to earnings per share of € 0.14 (previous year: € 0.10).
“The implementation of our strategy is increasingly bearing fruit, not just through the acquisitions but also through the internal and external projects that seek to open up applications for our own core skills outside the printing press industry,”
explained Henry Brickenkamp, Spokesman of the Board of Management of technotrans AG. “While revenue in the printing industry was slightly down overall, for the first time activities outside the print area more than compensated for the decrease and made a satisfying contribution to growth.”
The number of employees in the technotrans Group remained virtually unchanged at 770 at March 31, 2014. On average, the group employed 773 employees over the past twelve months.
The segments
Of the total revenue for the first three months of the 2014 financial year, the Technology segment brought in € 17.7 million (previous year: € 16.9 million). The segment benefited both from accelerating business in the laser industry and from a rising revenue share for the self-developed technologies for temperature control, filtration and coolant lubrication preparation, as well as spray lubrication. In the offset and flexographic printing area, increased market shares and launches of new production versions served to stabilise the revenue performance. Business with customers from the printing industry continues to be dominated by the general economic fortunes of that sector; judging by the current announcements by clients in the offset printing area, no rise in the market volume can be expected any time soon. The result for the Technology segment showed an improvement on the prior-year quarter from € -0.5 million to € -0.1 million. This rate of return for the segment on the one hand reflects the improved operating profitability thanks to the higher revenue volume. On the other hand – as expected – it was possible to realise further positive effects from the integration of the new business areas, especially in the laser industry and in the new markets.
The Services segment achieved revenue of € 9.4 million in the period under review (previous year: € 9.4 million) and was therefore overall on a par with the prior-year period. Earnings for the Services segment were maintained at the healthy level of recent quarters, reaching € 1.5 million (previous year: € 1.6 million). The margin was thus 16.3 percent (previous year: 16.9 percent).
Financial Position
technotrans is able to present a strong balance sheet at the reporting date: Equity rose by 2.1 % in the period under review, to € 44.7 million. The group’s equity ratio reached 59.2 percent, cash and cash equivalents came to € 17.5 million and net liquidity for the group, in other words interest-bearing liabilities less cash and cash equivalents, stayed positive at € 2.4 million.
Cash and cash equivalents generated by operating activities in the first quarter of 2014 came to € 3.0 million (previous year: € 0.0 million). The change in working capital since the end of December 2013 produced a cash inflow of € 1.3 million (cash outflow of € 1.8 million). In absolute terms the cash flow from investing activities of € -1.5 million was well down than the previous year’s total of € -4.5 million, which had been higher than usual because of the takeover of KLH. Investing activities in 2014 comprised the usual maintenance investment, as well as the final conditional purchase price component for the acquisition of Termotek AG (€ -0.9 million). The free cash flow after the first three months of the current financial year developed according to plan and was once again in positive territory at € 1.5 million (previous year: € -4.5 million).
Outlook
The overall economic and industry-specific environment has on the whole provided a positive impetus to the business development of the technotrans Group and supported a good start to the 2014 financial year. According to the latest findings of the leading research institutes, the further improvement in the mood indicators is reflected in an upward revision in the economic forecast for 2014 overall (up 1.9 percent in Germany). Economic development is broadly in line with the original expectations for the current financial year.
technotrans has good prospects of making the current financial year a success through its own efforts.
“The recent business results have confirmed our resolve to press ahead with addressing new customers in different markets. We intend to see technotrans grow both organically through actively developing new products, and non-organically through further targeted acquisitions,” remarked Henry Brickenkamp.
Overall, the Board of Management stands by its forecast that the technotrans Group will achieve consolidated revenue of € 110 million (plus/minus 5 percent) in the 2014 financial year.
In the Technology segment, the Board of Management expects the share of revenue from customers in the printing industry to remain more or less stable. On a conservative scenario it assumes that demand for offset presses worldwide in the 2014 financial year will remain roughly in a par with 2013. On the other hand it expects robust demand for digital and flexographic printing presses. technotrans has successfully expanded its activities in these growth areas. As well as its most recent acquisitions – KLH and Termotek – technotrans’ own development projects for the new markets will produce a substantial revenue contribution in this financial year. “The integration of KLH into the technotrans Group is progressing entirely according to schedule. In the opening months of the financial year our products for the laser industry, for stamping and forming technology and for the machine tool industry in particular made a notable contribution to growth. We also increasingly expect to see a further rise in revenue from other markets and new applications, such as scanner and medical technology, and energy storage technology,” added Brickenkamp.
In the 2014 financial year the anticipated revenue growth and the continuing optimisation processes should contribute to a further improvement in the financial performance and deliver an EBIT margin of between 4 and 6 percent. The Board of Management stands by its assessment that such a goal is realistic. The revenue volume and the time required to get the new customer projects off the ground will in turn materially influence the earnings position.