EANS-Adhoc: ElringKlinger posts revenue growth of 31% in third quarter of 2011 - Operating result boosted by 71% due to non-recurring income
-------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 9-month report 10.11.2011 Dettingen/Erms (Germany), November 10, 2011 +++ The ElringKlinger Group increased its revenue by 30.2% to EUR 763.2 (586.2) million in the first nine months of 2011. The year-on-year surge in revenue was driven by continued buoyancy in the demand for cars within the majority of sales regions around the globe as well as new product start-ups in the Original Equipment segment and first-time revenue contributions from the acquisitions made over the course of 2011. The recently acquired flat metal gaskets business of the Freudenberg Group and the Swiss exhaust treatment specialist Hug contributed EUR 58.9 million to Group revenue in the first nine months of 2011. ElringKlinger generated non-recurring other operating income of EUR 22.7 million in the third quarter from the disposal of its Ludwigsburg industrial park, which is not part of the Group's core business. Consequently, the Group's operating result increased to EUR 124.0 (91.6) million in the period from January to September 2011. After taxes and minority interests, net income was propelled upward to EUR 80.6 (53.9) million. In the third quarter of 2011, the ElringKlinger Group saw its revenue grow by 30.6% to EUR 264.4 (202.5) million. Its operating result for this period stood at EUR 58.0 (34.0) million. Despite the gradual slowdown in global vehicle production over the course of the year, ElringKlinger maintained its forward momentum also in the third quarter, expanding revenue by EUR 10.0 million quarter on quarter to EUR 264.4 million. Growth was driven not only by the continued upturn in business throughout Asia but also by strong domestic demand. Many domestic customers curtailed their factory breaks during the summer vacation period. Revenue generated within the Group's most buoyant segment in terms of sales, Original Equipment, rose by 36.1% to EUR 209.2 (153.7) million. Excluding the contributions made by recent acquisitions, segment revenue increased by 20.6%, well beyond the growth rate achieved by the global car markets. Integration of recently acquired Freudenberg and Hug entities The flat gaskets business acquired from the Freudenberg Group contributed EUR 13.0 million to Group revenue in the third quarter of 2011. The earnings performance of the former Freudenberg companies, which have been included in the scope of consolidation since January 1, 2011, continued to improve when compared to the previous quarters. However, earnings before taxes - including the negative effect of the purchase price allocation equivalent to EUR 0.1 million - were still just within negative territory at minus EUR 0.1 million. The operating margins achieved by both the German and the Italian production site in the third quarter were already well above par. The Hug Group, Switzerland, in which ElringKlinger acquired a majority interest, was included within the Group's scope of consolidation effective from May 1, 2011. The Swiss exhaust treatment specialist contributed EUR 10.8 million to Group revenue in the third quarter of 2011. The strength of the Swiss franc had an adverse effect on earnings at an operating level. This was compounded by the negative effect of the purchase price allocation, equivalent to minus EUR 0.6 million. Regardless of these factors, earnings before taxes posted by Hug were just within positive territory. In addition to automating existing production processes, ElringKlinger is currently focusing in particular on optimizing cost structures within the Hug Group in response to currency risk. Non-recurring income from sale of Ludwigsburg industrial park In the third quarter of 2011, ElringKlinger recorded a non-recurring gain of EUR 22.7 million on the disposal of its Ludwigsburg industrial park; this gain was accounted for in other operating income. Adjusted EBIT totals EUR 37.5 million in Q3 The gross profit margin achieved within the first nine months of 2011 stood at 27.6% (30.7%). The acquisitions, whose profit margins as yet are significantly lower, had a dilutive effect on the Group's profit margin, equivalent to approx. 1.3 percentage points. Furthermore, ElringKlinger incurred substantial start-up costs for the expansion of the new E-Mobility division. In the second and third quarters, several domestic customers increased at short notice the just-in-time volumes of components required as part of their production scheduling, as a result of which ElringKlinger was forced to introduce overtime and extra shifts. This, in turn, contributed to higher costs at production level. Despite this situation, the ElringKlinger Group managed to strengthen its operating result by 35.4% to EUR 124.0 (91.6) million in the first nine months of 2011. In the third quarter of 2011, ElringKlinger recorded an operating result of EUR 58.0 (34.0) million. Adjusted for one-off income from the sale of the Ludwigsburg industrial park, the operating result stood at EUR 35.3 million in the third quarter. Thus, the third-quarter figure was higher than that of Q2 2011, which had produced an operating result of EUR 33.3 million. Adjusted for the non-recurring effects outlined above, the operating margin stood at 13.4% (16.8%) in the third quarter, compared to 13.1% in the second quarter of 2011. Eliminating the dilutive effect on earnings associated with the acquisition of Freudenberg and Hug operations, the operating margin of ElringKlinger's core business was 14.8% in the third quarter. Due to foreign exchange losses of EUR 2.3 million, earnings before interest and taxes (EBIT) - this figure includes foreign exchange gains and losses - fell short of the operating result in the first nine months of 2011, rising by 42.0% to EUR 121.7 (85.7) million. Excluding one-off income from the sale of the industrial park, as outlined above, EBIT rose by 15.5% to EUR 99.0 million. The positive foreign exchange effects were equivalent to EUR 2.2 million in the third quarter. Compared to the previous quarters, the CHF-denominated loan with which ElringKlinger AG had financed the purchase consideration payable in connection with the acquisition of the Swiss-based SEVEX Group back in 2008 no longer had an adverse effect on earnings in the third quarter of 2011. Group EBIT amounted to EUR 60.2 (31.7) million. Adjusted for non-recurring income, as discussed earlier, ElringKlinger increased its third-quarter EBIT by 18.3% to EUR 37.5 million. Earnings before taxes up 48% after nine months Net finance costs fell to EUR 11.6 (15.5) million in the first nine months of 2011, supported by less pronounced foreign exchange losses compared to the same period a year ago as well as lower interest costs. In the third quarter of 2011, the direction taken by foreign exchange rates contributed significantly to the reduction in the Group's net finance costs to EUR 0.8 (5.4) million. Against this backdrop, Group earnings before taxes totaled EUR 112.3 (76.1) million after the first nine months of 2011, which corresponds to a year-on- year increase of 47.6%. In the third quarter of 2011, earnings before taxes rose by a total of EUR 28.7 million to EUR 57.2 (28.5) million, buoyed also by income from the divestment of the Ludwigsburg industrial park. Compared to the same period last year, the Group's income tax rate increased slightly to 26.1% (25.9%) in the first nine months of 2011. On this basis, the ElringKlinger Group posted net income after minority interests (profit attributable to shareholders of ElringKlinger AG) of EUR 80.6 (53.9) million. After taxes and minority interests of EUR 1.2 (1.0) million, net income for the third quarter of 2011 was EUR 41.1 (19.7) million. Earnings per share (EPS) totaled EUR 1.27 (0.94) in the first nine months of 2011. For the third quarter of 2011, EPS stood at EUR 0.65 (0.34). Order intake up markedly year on year - Forecast confirmed Although order intake for the third quarter failed to match the record-breaking level achieved in the second quarter of 2011, it nevertheless rose significantly compared to the third quarter of 2010, up 20.1% to EUR 257.8 (214.7) million. Order backlog within the ElringKlinger Group totaled EUR 440.9 (315.3) million at the end of the third quarter. This corresponds to a year-on- year increase of 39.8%. Based on solid order intake and the continued stability of the economy as a whole, the ElringKlinger Group retains its outlook of organic growth in revenue by 12 to 14% for 2011. This will be complemented by revenue contributions of around EUR 80 million in total from the consolidation of the metal flat gaskets business acquired from the Freudenberg Group as well as the Swiss-based Hug Group, as a result of which Group sales revenue for fiscal 2011 is expected to reach EUR 970 to 985 million. The acquisition of the Hummel Group, which came into effect on October 24, 2011, is not expected to contribute significantly to Group revenue and earnings over the remainder of 2011. The Group's operating margin in 2011 will be temporarily diluted primarily due to the operating margins of the recent acquisitions, which are as yet considerably lower than the Group average, as well as the purchase price allocations. Despite the dilutive effects attributable to the acquisitions, significant start-up costs for the new E-Mobility business and much higher commodity prices, Group EBIT for the full year 2011 is expected to rise by 15 to 25%. Additionally, the Group will account for non-recurring other operating income of EUR 22.7 million from the sale of its Ludwigsburg industrial park. The full financial report of ElringKlinger AG for the third quarter and the first nine months of 2011 can be accessed at www.elringklinger.com 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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