- WKN: 785602
- ISIN: DE0007856023
- Land: Deutschland
Nachricht vom 30.03.2020 | 09:39
ElringKlinger records strong operating free cash flow in FY 2019
DGAP-News: ElringKlinger AG
/ Key word(s): Annual Results
ElringKlinger records strong operating free cash flow in FY 2019
- Revenue up by 1.6% to EUR 1,727 million in 2019 contrary to market trend
- EBIT before purchase price allocation at EUR 63.2 million; steady improvement over course of the year
- Measures aimed at raising efficiency levels lead to marked improvement in operating free cash flow; net debt scaled back
- Dividend suspended to strengthen internal financing
- Group refrains from giving outlook at present for the current year due to the strong dynamics of the coronavirus pandemic
Dettingen/Erms (Germany), March 30, 2020 +++ Market conditions within the automotive industry were far from favorable even before the coronavirus pandemic. Global automobile production contracted by 5.6% in the 2019 financial year. Operating against this challenging backdrop, the ElringKlinger Group managed to expand its revenue by 1.6% to EUR 1,727 million in total (2018: EUR 1,699 million). Without the effects of currencies and acquisitions, revenue was up by 0.5%. Thus, the Group clearly achieved its goal of outperforming the market by 2 to 4 percentage points in terms of organic growth. This was driven primarily by the region comprising North America, which saw revenue expand by 25.1%. Revenue generated from sales in the Asia-Pacific region, by contrast, was down just slightly year on year at -1.4%. However, this market as a whole was significantly weaker at -8.2%. In Germany and the Rest of Europe revenue was also lower at -7.8% and -4.2% respectively.
As Dr. Stefan Wolf, CEO of ElringKlinger AG, points out, "Market conditions as a whole were not favorable in 2019, but we continued to grow with the help of our innovative products. At the same time, we implemented a package of measures to raise efficiency levels, which led to a noticeable improvement in our key financial indicators. Thanks in particular to the substantial increase in cash flow, we were able to significantly reduce net financial debt and strengthen the Group for the future.
Implementation of measures to raise efficiency levels
The program aimed at delivering efficiency gains also began to show its first positive effects with regard to earnings. Additional charges attributable to elevated commodity prices, US anti-dumping and countervailing duties, and higher staff costs were counteracted by the Group with the help of cost savings made from the beginning of 2019 onward. In addition to reductions in non-personnel costs, management focused on optimization at the sites in North America, which had recorded particularly high levels of capacity utilization. As a result, earnings margins were gradually increased over the course of the year from 1.6% in the first quarter to 5.9% in the fourth quarter of 2019. This includes the sale of an industrial park in Hungary, which resulted in other operating income of EUR 8.6 million in the fourth quarter.
In total, EBIT before purchase price allocation amounted to EUR 63.2 million (2018: EUR 100.2 million), while the margin stood at 3.7% (2018: 5.9%), which was at the lower end of the target range of around 4 to 5%. In this context, however, the prior-year figure had included proceeds from the sale of two subsidiaries. Due to the reduction in the net finance result by EUR 5 million, earnings before taxes fell to EUR 41.7 million (2018: EUR 81.4 million). In conjunction with slightly higher taxes on income, net income declined to EUR 5.0 million (2018: EUR 47.9 million). Net income attributable to shareholders amounted to EUR 4.1 million in total (2018: EUR 43.8 million). Correspondingly, earnings per share were down sharply year on year at EUR 0.06 (2018: EUR 0.69).
Suspension of dividend
Robust financial position
Outlook for 2020
As Dr. Wolf explains: "The coronavirus has Germany, Europe, and the world fully in its grip and continues to spread dramatically. The protection of our employees and their families is our top priority. We drew up comprehensive preventive measures at an early stage. Employee protection also includes job security. With customers closing many of their plants around the globe, we have been forced to take the same approach and adapt our production in line with demand. Our goal remains to cushion the economic impact as far as possible."
The duration of plant closures by automobile manufacturers cannot be predicted at present. The same applies to potentially more extensive measures in the ensuing weeks - also from a political perspective. In view of these considerable uncertainties and significant dynamics, the economic effects on ElringKlinger cannot currently be determined with sufficient reliability and accuracy. Therefore, the Group is temporarily refraining from issuing specific revenue and earnings guidance for the 2020 financial year.
Unlocking potential for the future
The annual report for 2019 is available online at: https://www.elringklinger.de/investor/2019-gb-en.pdf
About ElringKlinger AG
|Phone:||071 23 / 724-0|
|Fax:||071 23 / 724-9006|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Tradegate Exchange|
|EQS News ID:||1010039|
|End of News||DGAP News Service|
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