ElringKlinger AG

  • WKN: 785602
  • ISIN: DE0007856023
  • Land: Deutschland

Nachricht vom 19.02.2019 | 18:00

ElringKlinger announces preliminary results for fiscal 2018: visible revenue growth in challenging market environment; earnings affected by internal and external factors

DGAP-News: ElringKlinger AG / Key word(s): Preliminary Results/Dividend

19.02.2019 / 18:00
The issuer is solely responsible for the content of this announcement.

ElringKlinger announces preliminary results for fiscal 2018:
visible revenue growth in challenging market environment; earnings affected by internal and external factors

- Revenue up by 2.0 % to EUR 1,697 million, organically by 7.3 %

- EBIT before purchase price allocation (PPA) at EUR 100.4 million, EBIT margin before PPA at 5.9 %

- Q4 2018: Revenue up by 2.5 %, organically by 7.1 %; EBIT of EUR 11.9 million before PPA, corresponding to margin of 2.8 %

- Management Board proposes suspension of dividend payment

- Guidance for 2019: organic revenue growth of 2 to 4 percentage points above global market growth, EBIT margin before PPA of 4 to 5%

Dettingen/Erms (Germany), February 19, 2019 +++ Based on preliminary, unaudited figures, the ElringKlinger Group saw a significant improvement in revenue during the financial year just ended. At EUR 1,697.0 million, revenue increased by EUR 33.0 million or 2.0 % in 2018, despite the dilutive effects of currency translation equivalent to EUR 44.0 million or 2.6 %. Additionally, the Group was faced with changes to the scope of consolidation as a result of M&A transactions (primarily the sale of Hug) totaling EUR 45.5 million or minus 2.7 %. Eliminating the effects of currencies and consolidation, the Group saw revenue expand by EUR 121.8 million or 7.3 % organically. Calculated on the basis of global automobile production, which declined by 0.4% in 2018, the Group saw its revenue outpace the market as a whole by 7.7 percentage points. Thus, the company has exceeded its target of outperforming market growth organically by 2 to 4 percentage points.

Group EBIT before purchase price allocation amounted to EUR 100.4 million, which corresponds to a margin of 5.9 %. The Group had originally anticipated an EBIT margin of around 7%. In the fourth quarter, too, several factors contributed to the lower-than-expected EBIT margin: in the NAFTA region, commodity prices were again impacted by tariffs on steel and aluminum, while prices for plastic granules remained high worldwide. The picture with regard to optimization measures implemented in the NAFTA region was mixed. Although the Group succeeded in further implementing improvement measures, these efforts have not yet produced the anticipated effects on earnings. In total, revenue generated in the fourth quarter of 2018 amounted to EUR 429.8 (419.3) million (+2.5 %, organically +7.1 %); EBIT before purchase price allocation stood at EUR 11.9 (30.7) million, which corresponds to a margin of 2.8 % (7.3 %).

Based on the Group's preliminary figures, the Management Board will put forward a proposal for a dividend suspension in respect of the 2018 financial year, the aim being to further strengthen internal financing for the Group's transformation process. Viewed in conjunction with the successful conclusion of a syndicated loan agreement for EUR 350 million, the Management Board is confident that this will pave the way for a visible improvement in the Group's financing structure in the short term.

As Dr. Stefan Wolf, CEO of ElringKlinger AG, explained: "Our goal remains to significantly strengthen the Group's earnings performance in the medium term in order to improve operating free cash flow in conjunction with measures planned in respect of working capital and the continued disciplined investment approach. In going forward, we will manage growth in our well-established areas of business in order to unlock the potential associated with strategic fields of the future."

The Group will take significant steps in this direction as early at the current financial year. Efforts aimed at cost streamlining in Switzerland will be completed in 2019 and measures implemented in the NAFTA region are expected to advance significantly. By contrast, the challenging economic climate, e.g., difficult market conditions in many regions of the world, political and economic volatility, and, in particular, the uncertain repercussions of increasingly severe trade disputes - especially with regard to commodity prices and vehicle-specific tariffs - may limit the earnings effect of the aforementioned measures.

As Dr. Wolf puts it, "Overall, global economic conditions have become more complex and uncertain compared to previous years. Forecasting has become increasingly difficult due to the range of influencing factors, which also applies to the current financial year."

Overall, the Group remains confident that, in 2019, it can outpace global automobile production by a significant margin calculated on the basis of revenue growth. ElringKlinger anticipates that it will outperform the market as a whole by 2 to 4 percentage points in terms of organic revenue growth. At present, global automobile production is expected to expand by 0 to +1 %. Despite the improvements in earnings, however, it is unlikely that the proceeds from the sale of Hug, which contributed to earnings in 2018, can be fully compensated for in fiscal 2019. Therefore, the Group is expecting to achieve an EBIT margin, before purchase price allocation, of 4 to 5 % for the 2019 financial year. Based on the range of measures implemented, the Group also anticipates that its cash flow situation can be decisively improved as early as 2019 - with the prospect of positive operating free cash flow. The Group has confirmed its medium-term targets.

ElringKlinger will publish its full and definitive results for the 2018 financial year on March 27, 2019.

For further information, please contact:
ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms (Germany)
Phone: +49 7123 724-88335
Fax: +49 7123 724-85 8335
E-mail: jens.winter@elringklinger.com

About ElringKlinger AG
As an automotive supplier, ElringKlinger has become a trusted partner to its customers - with a firm commitment to shaping the future of mobility. Be it optimized combustion engines, high-performance hybrids, or environmentally-friendly battery and fuel cell technology, ElringKlinger provides innovative solutions for all types of drive systems. ElringKlinger's lightweighting concepts help to reduce the overall weight of vehicles. As a result, vehicles powered by combustion engines consume less fuel and emit less CO2, while those equipped with alternative propulsion systems benefit from an extended range. In response to increasingly complex combustion engine technology, the Group also continues to make refinements with regard to gaskets in order to meet the highest possible standards. This is complemented by solutions centered around thermal and acoustic shielding technology. Additionally, the Group's portfolio includes products made of the high-performance plastic PTFE which are also marketed to industries beyond the automotive sector. These efforts are supported by a dedicated workforce of more than 10,000 employees at 45 ElringKlinger Group locations around the globe.

This release contains forward-looking statements. These statements are based on expectations, market evaluations and forecasts by the Management Board and on information currently available to them. In particular, the forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialize. Whilst the Management Board is confident that the statements as well as the opinions and expectations on which they are based are realistic, the aforementioned statements rely on assumptions that may conceivably prove to be incorrect. Future results and circumstances depend on a multitude of factors, risks and imponderables that can alter the expectations and judgments that have been expressed. These factors include, for example, changes to the general economic and business situation, variations of exchange rates and interest rates, poor acceptance of new products and services, and changes to business strategy.

19.02.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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