DGAP-News: SMARTRAC reports fiscal year 2011 results: Satisfactory business development under the given circumstances
(firmenpresse) - DGAP-News: SMARTRAC N.V. / Key word(s): Final Results
SMARTRAC reports fiscal year 2011 results: Satisfactory business
development under the given circumstances
28.03.2012 / 08:47
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SMARTRAC reports fiscal year 2011 results: Satisfactory business
development under the given circumstances
- Business development in fiscal year 2011 characterized by mixed market
conditions and affected by the consequences of the severe flood in
Thailand
- Sales 2011: EUR 168 million, representing a decrease of 7 percent
compared with EUR 180 million reported in 2010
- EBITDA 2011: EUR 15 million compared with EUR 20 million in 2010,
profitability at 9 percent EBITDA margin
- Acquisitions conducted at the end of 2011 to accelerate further growth
of SMARTRAC in the coming years. Customers to benefit from broader
product, technology, and IP range combined with global R&D, sales, and
production network
- Balance sheet 2011: Equity decreased by 14 percent to EUR 139 million
compared to EUR 162 million in 2010, equity ratio at 53 percent (2010:
65 percent)
- Outlook 2012: Group sales expected to grow to some EUR 250 million in
2012, improvement of EBITDA profitability targeted
- Dr. Christian Fischer, CEO: 'The severe flood in Thailand was a great
challenge for our company, the local team, and our customers. We are
very pleased that we have managed this challenge successfully. This
incident has shown us more than anything else that this company is
truly one team standing together and fighting for the success of this
company and the benefit of our customers.'
Amsterdam, March 28, 2012 - SMARTRAC N.V., a leading developer,
manufacturer and supplier of RFID transponders and inlays, today announces
financial figures for the fiscal year 2011. SMARTRAC considers the business
development in 2011 as satisfactory under the given circumstances. In 2011,
SMARTRAC experienced mixed market conditions, continued working on the
setup and optimization of structures and processes within the Group, had to
cope with the most severe flood in Thailand for decades, and conducted
several acquisitions. Each individual factor posed challenges to the
organization which the company in total managed successfully. Key topics of
the 2011 business development:
Experiencing Mixed Market Conditions:
SMARTRAC started the year with the clear knowledge that the exceptionally
strong market upturn of 2010 would diminish to a certain extent. In the
first half of 2011, market growth and order entry returned to a more
moderate level than in the preceding year, yet still showed positive
development. The slowdown of growth particularly in the card inlay related
business segments continued over the course of the second half-year and
came off deeper than anticipated which led to a temporary underutilization
of the company's card inlay production capacities. A very positive business
development in 2011 was achieved in the Tickets&Labels Business Unit.
Sales in the Tickets&Labels Business Unit increased by 80 percent in 2011
compared with 2010 based on the positive development in established markets
as well as from new project wins and the vast demand in the retail and
apparel application field. Order entry in the eID and Industry&Logistics
business units developed positively but moderately.
The overall business development in 2011 was, however, significantly
burdened by the severe flood in Thailand with its adverse effects on
overall production capacity. Due to the effects of the flood and the weaker
demand in certain business segments over the course of the year which could
not counterbalance the negative effects of the flood, SMARTRAC was not able
to achieve the sales target set for the full year 2011. Revenue declined by
7 percent from EUR 180 million in fiscal year 2010 to EUR 168 million in
2011. All in all, the business development of SMARTRAC in 2011 was
satisfactory under the given circumstances.
Improving Excellence:
Based on the stable but moderate demand in the worldwide RFID industry
which SMARTRAC experienced during the first months of 2011, the company
returned to a much steadier pace of operations than in 2010. Therefore, the
Management was able to focus its attention on strategic projects and again
turn its attention to the excellence project that was launched in 2009 and
focusses on improving structures and processes in order to leverage
untapped efficiency potentials. This project was put on hold in 2010 due to
the exceptional market dynamics which challenged the organization in terms
of keeping pace with the huge order entry and steadily and significantly
expanding the manufacturing capacity. In 2011, the project was revived and
the company continued working on the optimization of structures and
processes. A restructuring program at the core production facilities in
Thailand was started and the initiated measures achieved very encouraging
initial successes in August and September 2011. These successes were,
however, abruptly disrupted by the flood disaster which ravaged Thailand in
October 2011.
Coping with the Flood Disaster in Thailand:
On October 6, 2011, SMARTRAC was forced to evacuate employees and
production equipment due to the most severe flood the region had seen in 70
years. Whereas it initially looked like the flooding would spare the
Hi-Tech industry park and the company's production facilities, SMARTRAC
finally had to cope with the fact that the main floors of the company's
production facilities were flooded up to approximately 2.5 meters at the
peak. The upper floors however remained waterless.
SMARTRAC maintains appropriate insurance coverage for damages to buildings,
machinery, stock, and business interruption in Thailand and has already
received initial payments from all insurance companies.
The force majeure event was and still is a great challenge for the company,
its employees, and customers. From an overall perspective, the company is
of the opinion that it managed the flood disaster much better than most of
the companies in the region. Only two months after the flood, SMARTRAC
restarted production in Thailand on December 9, 2011. In addition, the
competent management of the preventive measures, the evacuation, and the
recovery measures, also increased customers' trust in the company.
Despite this severe incident, SMARTRAC's commitment to the production
location Thailand remains unchanged. The company has used the force majeure
event in Thailand to revise its disaster recovery plans and set the
prerequisites to be even better prepared for future challenges whenever and
wherever they may occur.
Materializing the Company's Growth Strategy:
Over the past years, it has been the Management's declared strategy to grow
both organically and via select acquisitions. In 2011, SMARTRAC was able to
acquire some of the leading players in their respective fields.
On December 8, 2011, SMARTRAC signed an agreement with Tenedora de Empresas
S.A. de C.V. (Tenedora), regarding the acquisition of Neology, Inc., a
leader in electronic vehicle registration (EVR), and electronic toll
collection and public safety markets. Under the agreement, Tenedora will
continue to be a shareholder of Neology and Neology will continue its
business under their existing company name and brand.
On December 14, 2011, SMARTRAC acquired former KSW Microtec AG (KSW), a
manufacturer of RFID inlays, pre-laminates, and components for the access
control, e-payment, e-Ticketing, and asset management application fields as
well as for high-security products for government identification documents
based in Dresden, Germany. As part of the integration into the SMARTRAC
Group, KSW changed its company name to SMARTRAC TECHNOLOGY Dresden GmbH.
On December 22, 2011, SMARTRAC reached an agreement with UPM-Kymmene
Corporation (UPM) under which SMARTRAC will take over UPM's RFID business
while UPM-Kymmene Corporation will become an indirect stockholder of
SMARTRAC. UPM RFID is a leading supplier of passive RFID products,
specializing in the development and high-volume production of HF, NFC, and
UHF RFID tags and inlays for use in a broad range of RFID applications. The
transaction is still subject to certain customary closing conditions,
including regulatory approvals, and is expected to be completed within the
first quarter of 2012.
The SMARTRAC Management is fully convinced that the acquisitions will prove
beneficial for employees, customers, business partners, and other
stakeholders of the company and that SMARTRAC will be a much stronger
company after completion of the transactions and integration projects. The
acquisitions will not only strengthen the company's product portfolio,
manufacturing capacity, research&development capabilities, technology
base, Intellectual Property (IP), patent portfolio, global sales force, and
global footprint, they are also considered as an opportunity to build up
the best team in the RFID-industry based on the unique 'SMARTRAC spirit'.
Financial year 2011:
The severe flood disaster in Thailand had significant adverse effects on
overall production capacity of the company in the fourth quarter of 2011.
Despite the growth in the first nine months of 2011, SMARTRAC reported a
decrease of 7 percent and achieved Group sales of EUR 168 million in the
2011 fiscal year compared to EUR 180 million in 2010.
Sales in the Security Segment decreased by 14 percent and amounted to EUR
117 million in 2011 compared to EUR 136 million in 2010. Sales in the
Industry segment accounted for EUR 50 million in 2011 representing an
increase of 17 percent compared to sales of EUR 43 million in 2010. Growth
resulted from the stable demand in the automotive business, additional
projects in the non-automotive business as well as the significant increase
of sales in the tickets and labels business.
EBITDA for 2011, as per definition, excludes extraordinary costs for the
restructuring program in Thailand implemented in July and August 2011,
extraordinary costs related to the flood in Thailand, as well as
extraordinary acquisition costs. In total, Group EBITDA decreased by 23
percent to EUR 15 million, compared with EUR 20 million in 2010. Facing
severe capacity reduction in the fourth quarter of 2011, the EBITDA margin
amounted to 9 percent in 2011, compared with 11 percent a year ago.
Key Financial Consolidated 12 months Consolidated 12 months Cha-In the 2011 fiscal year, the Security Segment reported EBITDA of EUR 13
Figures
in Thousands ended December 2011 ended December 2010 nge
of EUR
Consolidated Income
Statement
Revenues 167,604 180,111 (12,
507)
EBITDA 15,213 19,725 (4,5
12)
Net Profit after Tax (41,554) 6,073 (47,
627)
Financial position and
liquidity
Cash Flow from 6,326 1,940 4,386
Operating Activities
Working Capital 27,629 43,722 (16,
093)
Capital Expenditure 19,105 18,207 898
Total Assets 264,080 248,457 15,6
23
Operating Figures
Basic Earnings per (2.54) 0.41 (2.9
Share (EUR) 5)
Operating Cash Flow 0.39 0.13 0.26
per Share (EUR)
Equity Ratio (%) 52.6 65.0 (12.
4)
Headcount (at month's 3,676 3,488 188
end)
million compared to EBITDA of EUR 17 million achieved in 2010. This
represents a decrease of 22 percent. The EBITDA margin of 11 percent (2010:
12 percent) was mainly burdened by the lower production capacity and sales
caused by the flood disaster in Thailand.
The Industry Segment accounted for EBITDA of EUR 3 million and thus further
increased compared to EBITDA of EUR 2 million reported in 2010. The EBITDA
margin of 5 percent (2010: 5 percent) is still below the potential of this
segment. With the continued growth of the segment and the resulting
economies of scale, the SMARTRAC Management is confident that the
profitability of the Industry segment will increase further.
Loss for the period, including non-controlling interests, amounted to EUR
42 million, compared with profit for the period of EUR 6 million in 2010.
This development mainly results from the extraordinary depreciation and
amortization on property, plant and equipment as well as on inventory from
the flood disaster in Thailand amounting to EUR 31 million, subsequent
profitability effects from temporarily lost production capacity as well as
from negative effects triggered by the financial result.
Whereas the effects from the flood significantly affected the company's net
profit in 2011, payments from insurance coverage will have a reverse
positive effect on the net profit of SMARTRAC in 2012.
Balance Sheet:
As of December 31, 2011, total assets on the consolidated balance sheet
amounted to EUR 264 million, representing an increase of 6 percent compared
to the previous year's figure of EUR 248 million. This increase mainly
resulted from the net effect of the increase in intangible assets and
property, plant and equipment related to the acquisitions conducted at the
end of 2011 and the adverse effects from the flood in Thailand.
The decrease of 14 percent in total equity to a total of EUR 139 million
(2010: EUR 162 million) primarily resulted from the loss incurred in 2011.
Consequently, the retained earnings decreased from EUR 55 million in 2010
to EUR 13 million in 2011. As of December 31, 2011, SMARTRAC held no
treasury stock. The equity ratio decreased from 65 percent at the end of
2010 to 53 percent as of the 2011 reporting date.
Cash Flow Statement:
Due to the effects of the flood disaster, the cash flow statement of 2011
cannot really be compared to the cash flow statement in 2010. Net cash
provided by operating activities amounted to EUR 6 million in 2011,
compared to EUR 2 million in the previous year, despite a net loss of EUR
42 million in 2011. Impairments on property, plant and equipment as well as
on inventory at an amount of EUR 27 million did not impact the cash
position of SMARTRAC in 2011.
As a result of the acquisitions conducted in 2011, net cash used in
investing activities increased from EUR 19 million in 2010 to EUR 59
million in 2011. In particular, net cash outflow on business combinations
increased from EUR 2 million in 2010 to EUR 40 million in 2011. Net cash
provided by financing activities amounted to EUR 25 million in 2011
compared to net cash provided of EUR 28 million in 2010. The main financing
was provided by shareholders through an equity contribution of EUR 15
million in 2011.
In total, cash and cash equivalents and bank overdrafts decreased by 56
percent to EUR 22 million (2010: EUR 49 million) as of December 31, 2011,
and related mainly to the net cash used in investing activities.
As of December 31, 2011, SMARTRAC employed a total workforce of 3,676
people comparedto 3,488 employees at the end of 2010.
Business Outlook:
Despite the weaker demand in certain application fields experienced in
2011, the RFID industry is and will continue to be a market with strong
growth potential. Therefore, the SMARTRAC Management Board is committed to
steady and robust growth of the company and to create value for employees,
shareholders, customers, business partners, and the company itself.
For the 2012 fiscal year, the SMARTRAC Management Board is confident to be
able to achieve growth and an improvement in the company's profitability.
SMARTRAC Group sales are expected to grow to some EUR 250 million in 2012.
In terms of profitability, the SMARTRAC Management will work hard to move
on from the adverse effects of the flood disaster in Thailand and to
achieve Group EBITDA margins which come close to past levels in the second
half of 2012.
'In 2011, we have successfully overcome the severe flood disaster in
Thailand while at the same time laying the foundation for future growth
through select acquisitions,' said Dr. Christian Fischer. 'Each individual
factor poses challenges to organizations and employees. Successfully
managing the coincidence of all of them is a clear sign of the strength of
this company and our global team. Therefore, we are looking forward to a
continued positive business development with growth in terms of sales and
market share.'
The SMARTRAC 2011 Annual Report has been published today and is available
for download on the company's website at www.smartrac-group.com. The 2011
financial statements will be presented to the Annual General Meeting of
Shareholders in Amsterdam on June 19, 2012 for adoption. KPMG ACCOUNTANTS
N.V. issued an unqualified auditor's report in relation to the financial
statements 2011.
About SMARTRAC:
SMARTRAC is a leading developer, manufacturer, and supplier of RFID
components for a broad bandwidth of applications in all current frequency
standards. The company produces ready-made as well as customized
transponders and inlays for public transport, access control, RFID-based
car immobilizers, animal identification, libraries, industry, and
logistics.
SMARTRAC is the global market leader in high-quality RFID inlays for
electronic passports (e-Passports) and contactless credit cards (e-Payment)
as well as for RFID transponders for public transport applications.
SMARTRAC was founded in 2000, went public in July 2006, and trades as a
stock corporation under Dutch law with its registered headquarters in
Amsterdam. The company currently employs approximately 3,600 employees and
maintains a global research and development, production, and sales network.
If you have any questions, please contact:
Tanja Moehler
Head of Corporate Communications&Marketing
SMARTRAC N.V.
Phone: +31 20 30 50 157
Email: tanja.moehler(at)smartrac-group.com
Internet: www.smartrac-group.com
Twitter: www.twitter.com/SMARTRAC_NV
Forward-looking statements:
To the extent that this press release contains forward-looking statements,
such statements are based on assumptions, planning and forecasts at the
time of publication of this press release. Forward-looking statements
always involve uncertainties. Business and economic risks and developments,
the conduct of competitors, political decisions and other factors may cause
the actual results to be materially different from the assumptions,
planning and forecasts at the time of publication of this press release.
Therefore, SMARTRAC N.V. does not assume any responsibility relating to
forward-looking statements contained in this press release. Furthermore,
SMARTRAC N.V. does not assume any obligation to update the forward-looking
statements contained in this press release.
End of Corporate News
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Language: English
Company: SMARTRAC N.V.
Strawinskylaan 851
1077 XX Amsterdam
Netherlands
Phone: +31 20 30 50 157
Fax: +31 20 30 50 155
E-mail: investor.relations(at)smartrac-group.com
Internet: www.smartrac-group.com
ISIN: NL0000186633
WKN: A0JEHN
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, München, Stuttgart
End of News DGAP News-Service
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