DGAP-News: SHW AG achieves pleasing quarterly result
(firmenpresse) - DGAP-News: SHW AG / Key word(s): Interim Report/Half Year Results
SHW AG achieves pleasing quarterly result
06.08.2013 / 07:08
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PRESS RELEASE
SHW AG achieves pleasing quarterly result
- Group sales [1] outperform the market: +7.3 percent to EUR 91.8 million
- Group EBITDA margin [2] up to a pleasing 12.0 percent
Aalen, 06 August 2013. Today, SHW AG, one of the leading suppliers of
CO2-relevant pumps and engine components, as well as brake discs, published
its half-year report, including figures for the second quarter and first
half-year of 2013.
As a result of SHW's broad product portfolio of highly efficient components
for engine and gearbox applications, the company was also able to uncouple
from the continued negative market trend in the second quarter of 2013 -
new car registrations in the EU were down by 3.5 percent - and remains on
its growth track.
The increase in Group sales of 7.3 percent from EUR 85.6 million to 91.8
million is mainly the result of a newly-launched oil-/vacuum pump for a
well-known European automotive manufacturer as well as the high demand for
electrical gearbox oil pumps for start-stop and high-quality composite
brake discs.
At EUR 11.0 million, Group earnings before interest, tax, depreciation of
tangible assets and amortisation of intangible assets (adjusted EBITDA) for
the period April to June 2013 were 17.1 percent higher than the comparable
amount of EUR 9.4 million in the previous year. The EBITDA margin was up
from 11.0 percent to 12.0 percent.
'We're pleased that the second quarter has been so successful', stated Dr.
Thomas Buchholz, new CEO of SHW AG since 01 August 2013 and responsible for
the Pumps and Engine Components business segment. 'Our innovative product
and process solutions have been rewarded with new orders again in the first
half, and provide a sound basis for further profitable growth over the next
few years.'
Pumps and Engine Components: EBITDA above previous year level
Based on new product launches and a significant rise in demand, sales in
the Pumps and Engine Components business segment were up by 9.2 percent to
EUR 68.8 million in the second quarter of 2013 (previous year: EUR 62.8
million). The Passenger Car division benefited from high demand for
variable oil pumps and electrical gearbox oil pumps, and achieved a 13.7
percent rise in sales to EUR 54.8 million (previous year: EUR 48.2
million). The Truck&Off-Highway division continued to suffer from the
difficult market environment for commercial vehicles, recording sales of
EUR 6.7 million (previous year: EUR 7.3 million). At EUR 7.1 million, the
Powder Metallurgy division was not quite able to achieve the previous
year's sales figures of EUR 7.3 million due to reduced demand from Truck&Off-Highway customers.
The Pumps and Engine Components business segment achieved segment earnings
before interest, tax, depreciation and amortisation (adjusted EBITDA) of
EUR 8.8 million (previous year: EUR 8.3 million) in the second quarter of
2013, putting it back on track for success. The EBITDA margin of 12.8
percent is roughly on par with last year's figure of 13.2 percent.
Brake Discs: EBITDA margin up from 7.7 percent to 11.1 percent
Sales in the Brake Discs business segment rose by 2.1 percent in the second
quarter of 2013 to EUR 23.2 million (2012: EUR 22.7 million) as a result of
a significant increasein sales of composite brake discs compared to the
same period in the previous year.
In the second quarter of 2013, the number of composite brake discs sold
rose by 34.8 percent to approximately 54,600 (previous year: 40,500 units).
The sales figures for monobloc brake discs remained almost at the previous
year level, down to 968,200 units from 977,000 units. The total number of
brake discs sold rose by 0.5 percent to 1.02 million units.
A combination of factors including an improved product mix, high-end brake
discs, increased productivity and lower quality control costs led to a rise
in segment earnings before interest, tax, depreciation and amortisation
(adjusted EBITDA) in the second quarter of 2013 of 48.4 percent, from EUR
1.7 million to EUR 2.6 million. The EBITDA margin was up from 7.7 percent
to 11.1 percent.
Weaker first quarter puts strain on half-year results
Group sales were up by 3.2 percent to EUR 176.4 million in the first
half-year of 2013, compared to EUR 171.0 million for the same period in the
previous year. The adjusted EBITDA is EUR 17.5 million, equivalent to a 7.6
percent decline. This drop in earnings is attributable to the weaker first
quarter 2013, which was adversely affected by temporary performance losses
(SAP launch related operating costs for consultants, special shipments, and
third-party processing orders), product mix shifts, higher start-up costs
and IT expenditures as well as inventory differences.
Turnaround of free cash flow despite more than doubling capital
expenditures
At EUR 11.2 million, SHW considerably improved its cash flow from operating
activities from continued and discontinued operations in the second quarter
of 2013, both compared to the previous quarter (EUR -10.9 million) and
compared to the same quarter of the previous year (EUR 7.1 million). Cash
flow from investment activities increased - particularly in conjunction
with numerous new product launches in the Pumps and Engine Components
business segment - up by 125.3 percent to EUR -9.0 million in the period
from April to June 2013 (previous year: EUR -4.0 million). Despite these
extensive investments in growth, free cash flow experienced a considerable
turnaround when compared to the previous quarter - from EUR -19.1 million
to EUR 2.2 million. 'Measures introduced to improve the free cash flow are
beginning to show results', said Sascha Rosengart, CFO at SHW AG since 06
May 2013. 'Based on the above, we will be putting a particular focus on
reducing working capital over the coming months. '
Management team further strengthened
Besides the appointment of Dr Thomas Buchholz as the new CEO, SHW has
managed to further strengthen the management team of the Pumps and Engine
Components business segment. The company was able to hire Mr. Erwin
Gößwein, the new Head of Passenger Cars as of 01 July 2013 from ixetic
GmbH, a subsidiary of Magna Powertrain, one of SHW's major competitors in
the market. Mr. Peter Klomann, another former ixetic manager joined the
company as Head of Quality Management for the Pumps and Engine Components
business segment as of 01 June 2013.
Good start into the third quarter: slight increase in expected sales
SHW had a good start into the third quarter of 2013. At EUR 29.9 million,
Group sales in July 2013 were only slightly down on last year's high figure
of EUR 30.2 million. The Pumps and Engine Components business segment was
able to maintain the positive trend in the sale of fuel saving pumps,
achieving sales of EUR 22.5 million (previous year: EUR 22.9 million). The
Brake Discs business segment was even able to increase sales slightly
compared to the previous year, up from EUR 7.3 million to 7.4 million.
Assuming that order intake continues to develop steadily, SHW AG now
expects Group sales of between EUR 330 million and EUR 345 million
(previously: EUR 325 to EUR 340 million). Due to further new product
launches - in particular two more oil-/vacuum pump which are used in new
3-cylinder engines of two well-known European automotive manufacturers -
and a shift in the productmix towards more complex pumps, sales in the
Pumps and Engine Components business segment is now expected to reach
between EUR 240 and EUR 255 million (previously: EUR 235 to EUR 250
million). In the Brake Discs business segment, SHW is aiming to further
increase the proportion of ready-to-install brake discs and high-end
composite brake discs in order to achieve sales of around EUR 90 million.
'Besides product innovations, we will be focussing mainly on optimising our
operational performance and business processes during the second half of
the year', emphasised Dr. Thomas Buchholz. Despite the weaker first
quarter, the company still anticipates that if it achieves the planned
growth in sales, Group earnings before interest, tax, depreciation and
amortisation (adjusted EBITDA) will also be better in fiscal year 2013 than
last year.
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[1] STT Technologies Inc., which until the end of October 2012 had been
included in the consolidation on a pro-rata basis, has now, further to its
sale, been classified as a 'discontinued operation' within the meaning of
IFRS 5. Sales, expenses and earnings for the second quarter and first six
month of 2012 were adjusted accordingly.
[2] Adjusted for special effects, Q2/2013: EUR 0.7 million costs in
conjunction with changes in the Management Board; adjustments pursuant IAS
8.41; see comment in this press release on page 5 as well as the half year
report on page 24.
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Adjustments pursuant IAS 8.41
As part of the half year financial statements as at 30 June 2013, special
effects ascertained were corrected in the first quarter of 2013 in
accordance with IAS 8.41 (see half-year report on p. 24). The reason for
this includes the insufficient SAP launch in the first quarter of 2013 as
well as the inadequate training level of the staff at the time that SAP was
rolled out which led to errors in material posting . In addition, for the
first time in several years full inventories were carried out at both
plants in Bad Schussenried and Aalen-Wasseralfingen in the second quarter
of 2013, which led to inventory corrections.
The correction of cost of sales of EUR 0.9 million is largely due to
inventory differences attributable to previous periods. Further adjustments
concern the allocation of R&D expenses and selling expenses on an accrual
basis. A correction of the Consolidated Financial Statements as at 31
December 2012 was waived on account of the fact that the materiality limits
were not met.
About SHW
The enterprise was established in 1365, making it one of the oldest
industrial enterprises in Germany. Today, SHW AG is a leading automotive
supplier with products that contribute substantially to a reduction of fuel
consumption and consequently CO2 emissions. In its Pumps and Engine
Components business segment, the SHW Group develops and produces pumps for
passenger cars and truck and off-highway applications, e.g. trucks,
agricultural and construction vehicles, stationary motors and wind power
stations. The Brake Discs business segment develops and produces monobloc
ventilated brake discs made of cast iron and lightweight brake discs made
from a combination of an iron friction ring and an aluminium pot. Customers
of the SHW Group include leading automobile manufacturers, manufacturers of
commercial, construction and agricultural vehicles and other automotive
suppliers. The SHW Group currently has four manufacturing sites in Germany.
These are located in Bad Schussenried, Aalen-Wasseralfingen,
Tuttlingen-Ludwigstal and Neuhausen ob Eck. With slightly more than 1,000
employees, the SHW Group generated sales from continuing operations in 2012
of EUR 325 million. Further information is available at: www.shw.de
Contact person
Michael Schickling
Head of Investor Relations&Corporate Communications
SHW AG
Telephone: +49 (0) 7361 502 462
Email: michael.schickling(at)shw.de
Future-oriented statements
This press release contains certain future-oriented statements that are
based upon current assumptions and forecasts made by the management of SHW
AG. Various known and unknown risks,uncertainties and other factors may
lead to the actual results, financial position, development or performance
of the company deviating considerably from the appraisals specified here.
The company assumes no obligation to update future-oriented statements of
this nature or adapt them to future events or developments.
Note
This announcement does not constitute an offer to sell securities in the
United States of America, Canada, Australia, Japan or any other
jurisdictional territory where offers are subject to statutory
restrictions. The securities named in this announcement may only be sold or
offered for sale in the United States of America following their prior
registration in accordance with the provisions of the version of the US
Securities Act of 1933 currently in force (the 'Securities Act') or,
without prior registration, only on the basis of an exemption. Unless
provided for by certain exceptions within the Securities Act, the
securities named within this announcement may not be sold or offered for
sale in Australia, Canada or Japan, nor may they be sold or offered for
sale to or for account of residents of Australia, Canada or Japan. No
registration of the offer or sale of the securities named in this
announcement will take place, as stipulated by the relevant statutory
provisions in Canada, Australia and Japan. There is no public solicitation
to buy securities in the United States of America.
End of Corporate News
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06.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
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Language: English
Company: SHW AG
Wilhelmstrasse 67
73433 Aalen-Wasseralfingen
Germany
Phone: +49 7361 502-1
Fax: +49 7361 502-674
E-mail: ir(at)shw.de
Internet: www.shw.de
ISIN: DE000A1JBPV9
WKN: A1JBPV
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Stuttgart
End of News DGAP News-Service
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