DGAP-Adhoc: Kardex AG: Kardex completes its strategic realignment
13.03.2014 – 06:06
Kardex AG / Key word(s): Final Results 13.03.2014 06:00 Release of an ad hoc announcement pursuant to Art. 53 KR --------------------------------------------------------------------------- Media information Zürich, 13. März 2014 Kardex Group Financial year 2013: Kardex completes its strategic realignment and is ready to grow organically In the 2013 financial year, the Kardex Group completed the restructuring process begun in 2011, as well as its strategic realignment. Kardex is now well positioned to achieve organic growth in its two divisions, Kardex Remstar and Kardex Mlog. During the year under review, the Kardex Stow Division was sold, Kardex Mlog was successfully turned around, and further investment was made in the future growth of Kardex Remstar. Despite the divestment of Kardex Stow as of 31 July 2013, the Group was able to exceed the previous year's operating result. The Board of Directors will propose to the Annual General Meeting that an ordinary dividend of CHF 1.25 per share should be paid, together with the entire book gain from the sale of Kardex Stow based on the consolidated group result, which corresponds to a dividend of CHF 1.40 per share. The consolidated annual result of the Kardex Group is not comparable with the figure for the previous year, since the results for Kardex Stow are included only until the end of July 2013. The Kardex Group reported bookings of EUR 410.7 million in the year under review, and net revenues came to EUR 399.3 million. EBIT of EUR 37.8 million includes a book gain of EUR 8.8 million from the sale of the Stow Division. The net result was EUR 31.5 million. This represents earnings per share of CHF 4.95. Taking into account the pro forma accounting for the continuing operations (see segment reports in the Annual Report 2013), i.e. excluding the Stow results, the figures are comparable to those for the previous year. Bookings for both divisions thus picked up again after a weaker second half of 2012 to reach EUR 301.5 million, which is nearly the same as the previous year (EUR 305.2 million). At the end of 2013, the order backlog of EUR 105.2 million was also similar to the previous year's (EUR 106.3 million). Net revenues of EUR 302.1 million were down 1.9% compared with the strong sales recorded in the previous year, but the year-on-year shortfall of 6.1% that existed on 30 June 2013 was almost eliminated in the second half of the year. The operating result (EBIT) of EUR 24.2 million corresponds to an EBIT margin of 8.0%, up 30.8% on the previous year (EUR 18.5 million). This big improvement is due in particular to the turnaround of Kardex Mlog (+EUR 4.2 million), as well as to a further increase in the profitability of Kardex Remstar (EBIT margin 10.2%). The return on capital employed (ROCE) stood at 28.7% (previous year: 21.2%). Kardex Remstar profits from efficiency improvements The 2013 financial year began rather sluggishly for Kardex Remstar. This was owing to a cautious attitude to ordering in most industrial markets from mid-2012 onwards. Bookings and revenue growth started to recover in spring, and the shortfall in the first half was nearly compensated by the end of the year. Revenues of EUR 235.4 million in the Kardex Remstar Division were slightly below the figure for the previous year (EUR 236.7 million), but at the end of the year the order backlog of EUR 75.1 million was up by 8.2%. Overall, bookings rose by 3.3% to EUR 241.4 million. In 2013 the service business generated 28.6% of revenues (previous year: 27.9%). The operating result of EUR 24.0 million for Kardex Remstar is up 3.9% on the previous year and represents an EBIT margin of 10.2%, resulting in particular from further efficiency improvements along the entire value chain. In 2013 Kardex Remstar invested significantly in its future growth. The sales department took on more staff and was restructured in Asia/Pacific. At the same time, a new vertical carousel for smaller loads was successfully launched on the market, thus further expanding this product family. In addition, further steps on the way to changing Kardex Remstar from a product manufacturer into a solutions provider were demonstrated at a variety of trade fairs and customer events. In July 2013, the spare parts centre for Europe came into operation at the Bellheim site. This will enable the Group to make further efficiency improvements and provide enhanced customer service. Turnaround achieved at Kardex Mlog Kardex Mlog reported 6.0% lower revenues than in the previous year at EUR 67.0 million. At EUR 60.6 million, bookings were also 16.1% below the previous year's figure. This development was due not so much to market conditions as to the company's efforts to improve its strategic product mix and, above all, the risk management. The gross profit for greenfield installations and modernization business was therefore significantly higher than in the same period of the previous year. The service business also grew as planned, to 17.6% of revenues (previous year: 15.7%), up 5.8% on the previous year. At EUR 1.2 million (previous year: EUR -3.0 million), operating profit was positive - although only to a modest extent - for the first time since the company was purchased in 2010. Thanks to the provisions made in the previous year, it was possible in the year under review to settle almost all the issues still outstanding from the problem projects of previous years. Collaboration with Kardex Remstar was intensified thanks to the successful integration of the Remstar order picking software into stand-alone systems of Mlog (M-Dynamic product family). Kardex Stow sold on 31 July 2013 The Kardex Stow Division, part of the Kardex Group only until 31 July 2013, contributed net revenues of EUR 98.0 million and an operating result of EUR 4.8 million. Sales were thus slightly lower than in the corresponding previous year period, while the EBIT margin was unchanged at 4.9%. As has already been reported, the Board of Directors of Kardex AG reviewed all the strategic options for Kardex Stow in the previous year. The sale of this division to the French-based Averys Group, as announced on 8 May 2013 and completed on 31 July 2013, opens up new prospects for the Stow business. The two companies are a good fit both geographically and product-wise. The Kardex Group gained a cash inflow of EUR 76.9 million gross from the sale, including the repayment of the intercompany debt, and a book gain of EUR 8.8 million. This divestment gain is obtained after adjusting for goodwill of EUR 23.1 million already written off in accordance with Swiss GAAP FER. At an extraordinary general meeting held on 25 September 2013, the distribution of a special dividend of CHF 4.00 per share from capital contributions was approved. This is roughly equivalent to the capital generated by the capital increase in September 2011, which is thus being returned to the shareholders. Furthermore, the Group's remaining bank debts of EUR 10 million was repaid. Completion of the strategic realignment The divestment of Kardex Stow also completed the strategic realignment of the Kardex Group that began in 2012. The focus on automatic storage systems and material flow solutions by the two entrepreneurially managed divisions Kardex Remstar and Kardex Mlog, together with the associated service business, is helping to achieve strong customer retention and attractive returns on capital employed. Kardex intends to invest its unappropriated funds in a careful and focused manner in order to continue expanding its already strong market position in this attractive and growing industry. Further improvements in capital management The strong balance sheet and further progress in capital management provide room for manoeuvre and increased flexibility. The accounts receivable and inventories of Kardex Remstar and Kardex Mlog fell by a further EUR 3.2 million (4.0%). On the liabilities side, accelerated payments of suppliers invoices resulted in an additional income of EUR 1.2 million from early payment discounts. Despite the distribution of the ordinary dividend of EUR 7.5 million in April 2013 and the special dividend of EUR 25.2 million in October 2013, the net cash position rose to EUR 77.0 million at the end of the year. This was owing to net cash inflow of EUR 36.3 million from operations and in addition the net cash inflow of EUR 63.9 million from the sale of Stow. The Group's equity ratio stood at solid 55.9% as at 31 December 2013 (31 December 2012: 36.2%). Proposals to the Annual General Meeting The Board of Directors of the Kardex AG has reviewed its dividend policy in view of the results achieved and the further increase in the balance sheet total following the sale of Kardex Stow. It is adhering to the current payout ratio of a maximum of 35% of operating profit, and will therefore propose to the Annual General Meeting to declare a dividend of CHF 1.25 per share, which will be paid out from the capital contribution reserve and is therefore tax free for Swiss individuals. Furthermore, the Board of Directors is proposing to pay out the entire book gain of EUR 8.8 million, or CHF 1.40 per share, from the sale of the Kardex Stow Division to the shareholders (also from the capital contribution reserve). Cautiously optimistic outlook Thanks to the healthy order backlog and the groundwork already completed, the Board of Directors and Executive Committee are cautiously optimistic about the 2014 financial year. Kardex Remstar should be able to grow again while holding its gross margin at the previous year's level. Kardex Mlog needs to reinforce the turnaround and demonstrate the sustainability of its business model for 2014. Contact: Edwin van der Geest Investor Relations investor-relations@kardex.com Tel. +41 79 330 55 22 www.kardex.com Agenda 24 April 2014 Annual General Meeting SIX Swiss Exchange, Zurich 21 August 2014 Interim Report 2014 12 March 2015 2014 Media and analysts' conference year-end closing 2014 Publication Annual Report 2014 23 April 2015 Annual General Meeting SIX Swiss Exchange, Zurich 13 August 2015 Interim Report 2014 Kardex Group - Corporate Profile The Kardex Group is a global industry partner for intra-logistic solutions and a leading supplier of automated storage solutions and material handling systems. The Group consists of two entrepreneurially managed divisions, Kardex Remstar and Kardex Mlog. Kardex Remstar develops, produces and maintains shuttles and dynamic storage and retrieval systems and Kardex Mlog offers integrated materials handling systems and automated high-bay warehouses. The two divisions are partners for their customers over the entire life cycle of a product or solution. This begins with the assessment of customer requirements and continues through planning, realization and maintenance of customer-specific systems. It ensures a high level of availability combined with low total cost of ownership and operation. Around 1 500 employees in over 30 countries work for the Kardex Group. Disclaimer This communication contains statements that constitute "forward-looking statements". In this communication, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations and business and certain of our strategic plans and objectives. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors which are beyond Kardex's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors detailed in Kardex's past and future filings and reports and in past and future filings, press releases, reports and other information posted on Kardex Group companies' websites. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Kardex disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key figures EUR millions 1 January to 31 December 2013 (%) 2012 (%) +/-% Bookings 410.7 102.9% 489.7 101.1% -16.1% Order backlog (31 December) 105.2 26.3% 154.9 32.0% -32.1% Net revenues 399.3 100.0% 484.4 100.0% -17.6% Gross Profit 113.7 28.5% 118.4 24.4% -4.0% OPEX 84.7 21.2% 90.8 18.7% -6.7% Gain of sale of the Kardex Stow Division 8.8 2.2% 0.0 0.0% n. a. Operating result (EBIT) 37.8 9.5% 27.6 5.7% 37.0% EBITDA 46.1 11.5% 37.7 7.8% 22.3% Result for the period 31.5 7.9% 21.4 4.4% 47.2% Earnings per share (EUR) 4.08 2.77 47.3% Free cash flow 93.9 28.4 230.6% ROCE (continued operations) 28.7% 21.2% 35.4% 31.12.13 31.12.12 +/- % Net working capital 54.4 72.1 -24.5% Net cash 77.0 12.4 521.0% Equity / Equity ratio 106.9 55.9% 85.4 36.2% 25.2% Employees (full-time equivalents) 1 447 2 062 -29.8% +++++ Additional features: Document: http://n.equitystory.com/c/fncls.ssp?u=EATUEDFQOD Document title: Media information YEC 2013 13.03.2014 News transmitted by EQS Schweiz AG. The issuer is responsible for the contents of the release. EquityStory publishes regulatory releases, media releases on the capital market and press releases. The EquityStory Group distributes authentic and real-time financial news for over 1'300 listed companies. The Swiss news archive can be found at www.equitystory.ch/news --------------------------------------------------------------------------- Language: English Company: Kardex AG Thurgauerstrasse 40 8050 Zürich Switzerland Phone: +41 (0)44 419 44 79 Fax: E-mail: investor-relations@kardex.com Internet: www.kardex.com ISIN: CH0100837282 Valor: A0RMWK Listed: Freiverkehr in Berlin, München, Stuttgart; Frankfurt in Open Market ; SIX End of Announcement EQS Group News-Service ---------------------------------------------------------------------------