EANS-Adhoc: ElringKlinger posts revenue growth of 31% in third quarter of 2011 -
Operating result boosted by 71% due to non-recurring income
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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.
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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
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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