Consumables
technotrans starts into 2011 with boost of revenue and earnings
Tuesday 10. May 2011 - First quarter revenue up by 21.8 percent / EBIT doubles to 1.2 million / successful return to growth path
The start to the new financial year was extremely promising for the technotrans Group: Revenue reached 24.1 million overall, representing a rise of 21.8 percent on the previous year ( 19.8 million). Both the continuing moderate recovery in the printing industry and the acquisition of Termotek AG at the start of the year contributed to this development. Revenue for the Technology segment therefore climbed 39.6 percent. The rising revenue and the raft of measures to improve profitability clearly had an impact during the first quarter of 2011. The operating result (EBIT) doubled in the first quarter and climbed to 1.2 million (previous year 0.6 million, + 97.8 percent). At 5.1 percent, the EBIT margin was also well above the previous years level (3.2 percent).
“We have made good progress towards our target of reviving technotrans profile as a growth company”, says Henry Brickenkamp, Spokesperson of the Board of Management. “The business performance is fully in line with the expectations for 2011 as a whole.”
Because of certain tax effects net income after the first quarter was only 0.5 million (previous year 0.3 million), equivalent to earnings per share of 0.08, based on shares outstanding (previous year: 0.05).
Following the takeover of Termotek AG the number of employees in the technotrans Group has risen for the first time since the crisis. At the reporting date the group employed 678 persons (previous year 616), comprising 517 (previous year 450) in Germany and 161 (previous year 166) abroad.
The segments
Whereas the first quarter of the previous year was still very much dominated by the crisis (revenue 11.2 million), the Technology segment took a major step forward in the first quarter of 2011. Revenue rose by 39.6 percent to 15.6 million. This development was driven to a large extent by the recovery in the printing industry, especially for serial business and above all in the sheet-fed offset sector, but also of course thanks to the acquisition of Termotek AG, which was included in this Quarterly Reports figures for the first time.
Termotek, a specialist supplier of laser cooling systems, performed entirely in line with expectations in the first quarter. Over the full year, the company is expected to contribute almost 10 million to the technotrans Groups revenue.
The result for the segment only narrowly missed breaking even in the first quarter. At -0.2 million, the loss compared with the prior-year quarter ( -0.7 million) was nevertheless significantly reduced. The expectation is that this development will continue in the course of the year and that the segment will once again make a positive contribution to earnings.
Revenue for the Services segment of 8.5 million almost reached the previous years level ( 8.6 million) and therefore once again made a reliable contribution. The volume of installation business for major projects remains low. On the other hand a tentative recovery in retrofit business can be seen.
The result for the segment improved by 10.5 percent on Q1 2010, from 1.3 to million 1.4 million. The rate of return for the segment was 16.6 percent, compared with 14.6 percent in the first quarter of the previous year.
Financial position
Based on a net income of 510 thousand for the first three months of 2011, the cash flow from operating activities before changes in working capital totalled 2.3 million (previous year 1.4 million). In the first quarter of the current financial year, the changes in working capital were also influenced by the first time consolidation of Termotek AG. Cash from operating activities amounted to 0.7 million (previous year 0.9 million). After deduction of actual interest and income tax payments of 0.2 million, the net cash from operating activities for the first quarter amounted to 0.5 million (previous year 2.1 million).
The cash employed for investing activities amounting to 1.3 million in the period under review comprises a still very modest component for generally restrained investment activity ( 0.3 million) and the cash outflow for the purchase price component paid for the acquisition of an interest ( 1.0 million). The free cash flow remained negative at -0.9 million at the end of the first quarter (previous year: positive, 1.8 million).
Cash and cash equivalents fell by 6 percent in the first quarter, to 12.3 million (December 31, 2010: 13.1 million).
The net debt, in other words interest-bearing liabilities less cash, rose from 5.9 million at the end of 2010 (prior to the acquisition) to 9.2 million (after the acquisition); the gearing ratio at the reporting date was 26.6 %.
Outlook
Management plans for revenue in the order of 100 million for the 2011 financial year (previous year 85.9 million) and are aiming for an overall EBIT margin of between 6 and 7 percent (previous year 3.5 percent). “The first-quarter performance is in line with our expectations and we are therefore confident about achieving that target”, says Henry Brickenkamp.
technotrans current range of products for the printing industry focuses more strongly on the sheet-fed offset market, management is confident that the company will continue to benefit from this sectors positive trend. It is also expect that the entry into growth markets such as the laser industry will continue to make good progress. “We have taken initial steps in recent months to familiarise our international sales team with the new products supplied by Termotek AG. As expected, these products have been very well received and we will ensure that the ambitious targets are achieved by our sales and service network”, says Brickenkamp.
In order to identify and access additional long-term growth prospects for technotrans, some time ago a number of projects with the aim of finding additional applications in other industries for the core skills in liquid technology had been kicked off. These internal efforts have throughout been flanked by the search for suitable venture partners or, as in the case of Termotek, acquisition targets as a means of accelerating the process of tapping fresh growth potential.
In the meantime these efforts are bearing fruit as demonstrated by the contacts to Bio Circle and Sauer. Following intensive testing, Bio-Circle Surface Technology GmbH has decided to offer technotrans dosing systems complementing their own product range in Europe. The cooperation with SAUER GmbH, a company belonging to the GILDEMEISTER Group, is also developing successfully. Sauer offers machines to produce all dental indications in all materials. Following the successful completion of tests at the SAUER showroom, the first “toolsmart”, a technotrans device for cooling and filtering the cooling lubricant used during machining, will now be installed at customers.
Both products will not yet generate any significant volume of revenue in 2011, but they serve to illustrate how broad the spectrum of possible uses of technotrans technologies is; numerous other projects are currently at various stages of development.
New member to the Board
The Supervisory Board intends to appoint Dr Christof Soest (46) to the Board of Management with effect from June 1, 2011 at its meeting on May 11, 2011. Dr Soest was Managing Director of Gebr. Becker GmbH, Wuppertal, before joining technotrans AG in January 2011 as Technical Director. He is well-versed in handling innovation processes and will now be able to use this expertise to good effect in the management of technotrans. This move furthermore suitably increases the management capacity available for accommodating the long-term growth that the technotrans Group is planning.
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.