EANS-Adhoc: Preliminary results: ElringKlinger sales up 27% in second quarter of 2011 - Operating result down slightly due to acquisitions
-------------------------------------------------------------------------------- ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is solely responsible for the content of this announcement. -------------------------------------------------------------------------------- Preliminary results second quarter 2011 26.07.2011 Dettingen/Erms, July 26, 2011 +++ Supported by buoyant demand for cars and the rollout of new products, sales revenue generated by the ElringKlinger Group in the first half of 2011 rose by 30.0% to EUR 498.9 (383.7) million according to preliminary results. In the second quarter, the Group saw sales revenue increase by 26.6% to EUR 254.4 (201.0) million. The flat gaskets business acquired from the Freudenberg Group and the first-time consolidation of Swiss-based exhaust treatment specialist Hug Engineering AG contributed EUR 20.7 million to sales revenue in the second quarter. Operating result rose by 14.6% in the first six months, reaching EUR 66.0 (57.6) million. At EUR 33.3 (34.3) million, the Group's operating result in Q2 2011 declined by 2.9% compared to the buoyant second quarter of 2010, primarily as a result of the lower margins currently generated by the newly acquired entities. ElringKlinger's net income after minority interests stood at EUR 18.8 (20.6) million for the period under review. Although global car production contracted slightly in the second quarter compared to the first three months of 2011, the ElringKlinger Group managed to generate further quarter-on- quarter growth in sales revenue in the second quarter, driven by the introduction of new products in the Original Equipment segment. The surge in demand for parts was particularly noticeable within the German market, as well as in Asia and South America. Adjusted for the contribution made by acquisitions, sales revenue increased by 16.3%. On this basis, the percentage growth in sales revenue achieved by ElringKlinger was again palpably higher than the rate of expansion in global vehicle production. First-time contribution by newly acquired Hug Engineering AG Effective from May 1, 2011, Swiss-based exhaust treatment specialist and manufacturer of diesel particulate filters Hug Engineering AG, in which ElringKlinger holds a majority interest, was included fully in the scope of consolidation of the ElringKlinger Group for the first time. Hug contributed EUR 6.7 million to Group sales in the second quarter of 2011. Owing to the purchase price allocation of EUR 0.3 million and negative foreign exchange effects, its contribution to earnings before taxes was minus EUR 0.8 million. The former flat gaskets business of the Freudenberg Group contributed EUR 14.0 million to sales revenue in the second quarter of 2011 and minus EUR 0.6 million to earnings before taxes. This figure includes the purchase price allocation of EUR 0.1 million as well as EUR 0.4 million attributable to non- recurrent staff costs incurred as a result of the partial relocation of production in Germany to the manufacturing site in France, which is located in closer proximity to customers. In order to bring the efficiency of the acquired businesses up to Group level, ElringKlinger is undertaking comprehensive integration measures. Especially with Hug there is substantial cross selling potential to be realized. Slight decline in operating result The significantly lower gross margins currently generated by the new acquisitions exerted downward pressure on the Group's gross margin, equivalent to approx. 1.5 percentage points. Furthermore, the substantial cost of materials, as well as the introduction of special shifts in several areas of production, prompted a year-on-year increase in costs. In parallel, the lower proportion of revenue generated through aftermarket sales had a dampening effect. Compared with the first quarter of 2011 (27.3%), however, the Group's gross margin rose to 27.9% in the second quarter. Selling expenses as well as general and administrative expenses increased at a faster rate than sales revenue in the second quarter, partly as a result of the acquisitions. Committed to expanding the area of E-Mobility, the ElringKlinger Group increased the overall costs associated with research and development by 16.2% to EUR 12.2 (10.5) million. Government grants received by ElringKlinger in the second quarter amounted to EUR 0.6 (1.4) million. At EUR 33.3 (34.3) million, the Group's operating result in the second quarter of 2011 was 2.9% down on last year's result for the same period. The operating margin was 13.1% (17.0%). Adjusted for the dilutive effect on earnings associated with the acquisition of Freudenberg and Hug operations, the operating margin of ElringKlinger's core business was 14.6%. Earnings before interest and taxes (EBIT) - this includes foreign exchange gains and losses - were adversely affected by negative foreign exchange effects equivalent to EUR 3.8 million and thus totaled EUR 29.6 (31.6) million. On this basis, the EBIT margin for the second quarter of 2011 stood at 11.6%; adjusted for the dilutive effects of the newly consolidated acquisitions, the EBIT margin was 13.1%. Negative foreign currency effects were a key factor in driving up net finance costs to EUR 7.0 (5.6) million in the second quarter. Earnings before taxes thus amounted to EUR 26.3 (28.6) million in the period under review. After taxes and minority interests of EUR 0.6 (1.0) million, net income for the second quarter of 2011 totaled EUR 18.8 (20.6) million. Earnings per share stood at EUR 0.30 (0.36). Order intake remains dynamic Order intake continued to show signs of dynamic growth and again came in noticeably higher than revenue in the second quarter of 2011, up 22.1% to EUR 298.1 (244.1) million. As at June 30, 2011, order backlog (excluding Hug) stood at EUR 412.7 (303.1) million, which was 36.2% up on the same quarter last year. Based on the record levels achieved in order intake, the continued stability in terms of economic performance and the rate of expansion predicted within the automotive markets, the ElringKlinger Group currently expects to generate organic revenue growth of 12 to 14% (previously 5 to 7%) in 2011. This will be complemented by a revenue contribution of around EUR 50 million from the consolidation of the metal flat gaskets business acquired from the Freudenberg Group as well as a revenue contribution of approx. EUR 30 million from the Swiss- based Hug Group. As a result, Group sales revenue for fiscal 2011 is expected to reach EUR 970 to 985 million. The Group's operating margin in 2011 will be diluted temporarily. This is due primarily to the operating margins generated by the recent acquisitions, which are as yet considerably lower than the Group average, and the purchase price allocation. Despite the temporary dilutive effects attributable to the acquisitions, start-up costs for the expanding E-Mobility unit and higher commodity prices, Group EBIT is expected to rise by 15 to 25% (previously 15 to 25%). The announcement of the preliminary results for the first half and second quarter of 2011 will be accompanied by a conference call on July 26, at 10:00 a.m. (CEST). The detailed results and financial report for the second quarter of 2011 will be published on August 4, 2011. Results 2nd Quarter 2011 and 1st Half 2011 |in EUR millions |Q2 |H1 | | |2011 |2010 |Change |2011 |2010 |Change | | | | |in % | | |in % | | | | | | | | | |Sales revenue |254.4 |201.0 |26.6 |498.9 |383.7 |30.0 | | | | | | | | | |Gross profit |71.1 |62.6 |13.6 |137.9 |116.4 |18.5 | | | | | | | | | |Selling expenses |16.7 |12.9 |29.5 |31.5 |26.2 |20.2 | | | | | | | | | |General and |9.5 |6.9 |37.7 |17.9 |13.8 |29.7 | |administrative | | | | | | | |expenses | | | | | | | | | | | | | | | |Research and |12.2 |10.5 |16.2 |24.2 |21.4 |13.1 | |development costs| | | | | | | | | | | | | | | |Other operating |1.6 |4.1 |-61.0 |3.5 |5.5 |-36.4 | |income | | | | | | | | | | | | | | | |Other operating |0.9 |2.1 |-57.1 |1.7 |2.9 |-41.4 | |expenses | | | | | | | | | | | | | | | |Operating result |33.3 |34.3 |-2.9 |66.0 |57.6 |14.6 | | | | | | | | | |Net finance costs|-7.0 |-5.6 |25.0 |-10.8 |-10.1 |6.9 | | | | | | | | | |Earnings before |26.3 |28.6 |-8.0 |55.2 |47.6 |16.0 | |taxes | | | | | | | | | | | | | | | |Net income |19.4 |21.6 |-10.2 |40.8 |35.7 |14.3 | | | | | | | | | |Profit |18.8 |20.6 |-8.7 |39.5 |34.2 |15.5 | |attributable to | | | | | | | |shareholders of | | | | | | | |ElringKlinger AG | | | | | | | | | | | | | | | |Earnings per |0.30 |0.36 |-16.7 |0.62 |0.59 |5.1 | |share | | | | | | | |(in EUR) | | | | | | | | | | | | | | | |EBITDA |52.1 |52.6 |-1.0 |105.4 |94.3 |11.8 | |EBIT |29.6 |31.6 |-6.3 |61.5 |53.9 |14.1 | Further inquiry note: ElringKlinger AG Investor Relations / Corporate Communications Stephan Haas Max-Eyth-Straße 2 72581 Dettingen Fon: +49 (0)7123-724-137 E-Mail:stephan.haas@elringklinger.com end of announcement euro adhoc -------------------------------------------------------------------------------- issuer: ElringKlinger AG Max-Eyth-Straße 2 D-72581 Dettingen/Erms phone: +49(0)7123 724-0 FAX: +49(0)7123-7249000 mail: info@elringklinger.com WWW: http://www.elringklinger.com sector: Automotive Equipment ISIN: DE0007856023 indexes: MDAX, CDAX, Classic All Share, Prime All Share stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin, Düsseldorf, München, regulated dealing: Stuttgart language: English
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