- Consolidated sales of around €80.1 million
- Consolidated EBITDA margin within the planned target corridor at 6.1%
- Record order books of around €145.1 million
- New orders increase by almost 20% to €98.7 million
On the back of record order books, euromicron continued the Agenda 500 as planned in the first quarter of 2014 and at the same time began to press ahead with expanding and enhancing the Group’s structures, processes and financial and human resources as the basis for further growth. The company is thereby creating the conditions for successful completion of the integration phase by the end of the year and subsequent transitioning of the Agenda 500 measures to a continuous improvement process.
Order situation at the Group
The deferred orders from 2013 are already being reflected in far higher order books in the first quarter of 2014 and resulting in high capacity utilization in the Group’s manufacturing operations. Investment tends to be restrained in system house business, with a result that a large part of the projects on the company’s order books since 2013 is still only being called off hesitantly. This trend at the beginning of the year is also reflected in the company’s order books: The euromicron Group recorded record order books totaling some €145.1 million, an increase of around 10% over the previous year (€132.4 million), which mainly comes from system house business. Order books from all areas of the Group for the first three months of 2014 were €98.7 million, almost 20% up on the previous year (€82.4 million).
Consolidated sales and earnings
The costs of the extensive integration measures that were initiated in the second half of 2013 and reached their maximum volume in the fourth quarter of 2013 continued to impact earnings in the first quarter of 2014 as planned, despite a decline in the integration measures. On the back of an increase in sales of 3.5% to €80.1 million (same quarter of the previous year: €77.3 million), that resulted in earnings before interest and taxes (EBIT) of just over €2.3 million in the first three months of 2014 compared with €4.1 million in the first quarter of 2013, which was not so heavily burdened by integration costs. As expected, EBITDA is at a level of around €4.9 million (previous year: €6.2 million). That corresponds to an EBITDA margin of approximately 6.1%, i.e. within the envisaged target corridor for the year.
Balance sheet structure
The euromicron Group’s total assets were €312.9 million at March 31, 2014, a drop of €16.0 million over the figure at December 31, 2013 (€328.9 million).
Personnel
Personnel costs were €24.6 million (previous year: €22.5 million). This is due in particular to the increase in the headcount, which rose from 1,705 to 1,772 employees, or by 3.9% over March 31, 2013, mainly as a result of changes to the consolidated companies. In addition, the personnel costs reflect the fact that integration costs were higher than in the first quarter of 2013.
Equity
Equity at March 31, 2014, was €123.5 million, €0.9 million above the level at December 31, 2013. Following the decline in total assets, the equity ratio is thus back around 40% again compared with 37% at December 31, 2013.
euromicron’s share
In a stock market climate marked by uncertainty, euromicron’s share performed solidly and in line with the index in the first quarter of 2014. Due to the fact that the targets in the adjusted guidance issued in December 2013 were met and the measures as part of the Agenda 500 were continued rigorously, the majority of analysts still rated euromicron’s share a “buy” in the first quarter of 2014 and regard it as having an upside target of up to €19. A total of 1.3 million shares were traded in the first quarter.
Due to the earnings performance of euromicron AG in the core year of integration, the Executive Board and Supervisory Board will propose to the General Meeting on May 14, 2014, not to retransfer any reserves, but to refrain from paying a dividend for 2013. euromicron AG’s fundamental value-oriented dividend policy will not change as a result of this recommendation to the General Meeting, which is solely a reflection of the current situation.
Outlook
In the first half of 2014, the Executive Board of euromicron AG plans to largely complete the toughest and most cost-intensive phase of consolidation and restructuring, reorganization and expansion in all areas of the Group and, on an optimized foundation, press ahead more vigorously with enhancing the company’s structures, processes and financial and human resources in the second half of 2014. “That primarily means we have to keep on rigorously implementing the Agenda 500 projects that have been initiated and quickly lead them to a successful conclusion or transition them to a continuous improvement process. As part of that, we will mainly make further investments in optimizing structures and processes in our system house business and encouraging innovativeness in our manufacturing operations,” says Dr. Willibald Späth, Chairman of the Executive Board.
In addition, the company aims to further optimize shared service and Competence Center structures, professionalize its sales team and harmonize service structures and processes. It is also planned in the current fiscal year to round out the company in terms of technology, footprint, resources and expertise by acquiring know-how and skills.
“Thanks to these long-planned strategic steps in the company’s development and associated phases of integration, we will create the conditions for our Group’s further organic growth, smooth acquisition and integration of a largish company in 2015 or 2016 and so preliminary completion of the corporate strategy, which was launched in 2000 and has a 15-year time frame,” explains the Chairman of the Executive Board.
On the market side, the company does not at the moment see any restraining factors and is sticking to its overall guidance for 2014, which anticipates sales growing to €340 to €360 million and the EBITDA margin increasing again to 6% to 8%. “We believe that, with its corporate strategy geared to sustainable growth, solid business model, secure basis for financing and strong equity ratio, our company has the stability and strength required to achieve that,” sums up Dr. Späth.
You can find the Q1/2014 Interim Report as of May 9, 2014, on our homepage at http://www.euromicron.de/en/financial-reports.
euromicron AG (www.euromicron.de) is an all-round solution provider for communications, transport, data and security. euromicron’s network infrastructures integrate voice, video and data transport wirelessly, via copper cable and by means of fiber-optic technologies. euromicron builds leading applications, such as security, control, healthcare or surveillance systems, on the basis of these cutting-edge network infrastructures.
Founded on its expertise as a developer and producer of fiber-optic components, euromicron AG is a strongly growing, highly profitable group that is listed on the stock market, has a medium-sized character and focuses on operational growth, integration and further market penetration, internationalization and expansion.