Consumables

technotrans gains ground with increased revenue and profit from non-print activities

Tuesday 26. August 2014 - First-half revenue up 3.5 percent to € 54.3 million / EBIT improves by 31.4 percent to € 3.0 million / expectations for 2014 once again confirmed

The business performance of the technotrans Group in the first half of the 2014 financial year was positive and in line with the targets for the full year. Overall, revenue rose by 3.5 percent to € 54.3 million, up from € 52.5 million in the prioryear period. Revenue growth was driven exclusively by technotrans business outside the printing industry, which brought in 35 percent of revenue in Q2. Revenue for the second quarter of 2014 amounted to € 27.2 million, matching the first-quarter figure and representing a rise of 3.9 percent on the prior-year quarter (€ 26.2 million). Earnings before interest and taxes (EBIT) improved by 31.4 percent in the first half of 2014 to € 3.0 million (previous year: € 2.3 million). The EBIT margin is 5.5 percent (previous year: 4.3 percent). Compared with the same period of the previous year (€ 1.2 million) EBIT for Q2 rose by 32.9 percent to € 1.6 million. The net income for the first six months was € 1.9 million (previous year: € 1.4 million), equivalent to earnings per share of € 0.28 (previous year: € 0.22).
“The overall and industry-specific environment provided a mixed picture in the second quarter of 2014. While business in the mechanical and plant engineering sector generally continued to make positive progress, the printing industry again saw the volume of business fall in the second quarter. The main reason for this development was that Asian customers held back with their purchases,” explained Henry Brickenkamp, Spokesman of the Board of technotrans AG. “Amid this challenging environment, the development of technotrans was in line with our expectations. Thanks to our activities outside the printing industry, we thus succeeded in defying its negative trend for the third time in succession.”
The companies of the technotrans Group had an average of 770 (previous year: 772) employees in the first half of 2014.
The Segments
The Technology segment generates just under two-thirds of consolidated revenue. Of the total revenue of € 54.3 million, this segment brought in € 35.2 million in the first half of 2014 (previous year: € 33.4 million). The increase of around € 1.8 million or 5.3 percent compared with the prior-year period is exclusively attributable to the successful expansion of business in the non-print area. Here, the segment profited both from accelerating business in the laser industry and from a growing revenue share for the self-developed technologies for temperature control, filtration, cooling lubricant preparation and spray lubrication. In the offset and flexographic printing area, increased market shares and launches of new production models served to stabilise the revenue performance. Second-quarter revenue for the segment reached € 17.5 million, compared with € 16.5 million in the previous year (+6.0 percent). Against a backdrop of a further general downturn in business for the printing industry, this provides further evidence that our activities in the new markets have created welcome growth.
Earnings for the Technology segment at June 30, 2014 improved from € -0.9 million in the previous year to € -0.2 million. As expected, the rate of return for the segment thus developed positively compared with 2013. The result for the segment yielded a still slightly negative rate of return of -0.6 percent for the second quarter and of -0.7 for the first half of 2014 overall.
The Services segment achieved slightly higher second-quarter revenue of € 9.7 million (previous year: € 9.7 million) than in the first quarter of the current financial year (€ 9.4 million). Revenue overall for the first half of 2014 remained on a par with the same period of the previous year, at € 19.1 million.
The financial performance in the Services segment remained stable in the period under review and the healthy level of recent quarters was maintained. Following on from € 1.5 million in the first quarter, revenue was increased slightly to € 1.7 million in the second quarter. At the end of the first half of 2014, the result for the segment of € 3.2 million is almost unchanged compared with the prior-year level, and the rate of return for the segment is thus 16.8 percent (previous year: 16.6 percent).
Financial Position
technotrans is again able to present a strong balance sheet at June 30, 2014: equity rose 1.4 percent to € 44.4 million in the period under review, taking the equity ratio at June 30, 2014 to 58.7 percent. net liquidity for the group remained positive at € 0.8 million.
Based on net income of € 1.9 million (previous year: € 1.4 million) for the six-month period, the operating cash flow in 2014 showed a significant improvement on the first half of 2013. At € 4.4 million, cash flow was € 3.4 million higher than one year earlier (€ 1.0 million). Despite a substantial increase in inventories and trade receivables, the effect from the change in working capital remained only marginally negative. Payments for interest and taxes in the period under review were slightly higher, so net cash from operating activities totalled € 3.1 million (previous year: € 0.1 million). The cash outflow from investing activities showed a year-on-year fall as expected, amounting to € -1.9 million (previous year: € -5.1 million, as a result of the acquisition of KLH) and is made up of maintenance investments (€ -1.0 million) along with the final conditional purchase price component for the acquisition of Termotek AG (€ -0.9 million). The free cash flow at the end of the first half of 2014 was consequently again in positive territory at € 1.2 million.
The cash flow from financing activities of € -2.0 million (previous year: +2.7 million) comprises the scheduled repayment and the raising of short-term bank loans as well as the dividend distribution to technotrans shareholders.
Outlook
Economic development remains in line with the original expectations for the current financial year and therefore for the business of the entire technotrans Group. technotrans has good prospects of making the current financial year a success under its own momentum. “By systematically continuing to pursue our growth strategy, we will achieve a further slight increase in revenue assuming business goes according to plan in 2014. As before, our plans envisage revenue for the technotrans Group of € 110 million (plus/minus 5 percent). For the coming quarters, too, we anticipate that revenue from outside the printing industry will enable us to more than make up for the fall in volume of print business,” declared Henry Brickenkamp.
The anticipated revenue growth and ongoing optimisation processes should help to produce a further improvement in the financial performance in the 2014 financial year, resulting in an EBIT margin of between 4 and 6 percent. “We continue to view this target as realistic,” added Henry Brickenkamp. The revenue volume and the timescale for launches of new customer projects will substantially influence the earnings situation. Over the coming quarters we are also expecting energy storage technology and scanner technology to make additional contributions to revenue. “All things considered, we remain on track and are generally confident about the remainder of the current financial year,” added the CEO.