The Frauenthal Group in the first half of 2016: One-time effects reflected in lower earnings
- Revenue up by EUR 7.1m
- Integration costs at Frauenthal Trade
- Positive trading environment for Frauenthal Automotive
- Outlook for 2016: plans for acquisition-led growth
In the first half of 2016, the steady rise in sales volumes at Frauenthal Trade, growth in the European vehicle market and new business in the automotive segment combined to produce revenue gains of EUR 7.1m compared with the same period a year earlier, with Group revenue reaching EUR 381.6m. The Frauenthal Trade Division accounted for around 72.5% of the total, and Frauenthal Automotive for about 27.5%.
However, earnings were affected by exceptional factors in the shape of restructuring and integration costs: earnings before interest, tax, depreciation and amortisation (EBITDA) were EUR 7.6m, down from EUR 12.6m a year earlier. The majority of this decline was attributable to deconsolidation expense of EUR 4.1m in relation to Frauenthal Automotive Azambuja and SHT Slovensko, which both had performed below expectations under current market conditions. Earnings also fell as a result of integration costs in connection with the Frauenthal Trade Division’s logistics operations. Earnings before interest and tax (EBIT)dropped from EUR 5.8m in the first half of last year to zero in the first six months of 2016.
Annual results for 2015
Frauenthal Holding AG
- Annual results for 2015
- Martin Sailer’s tenure as Executive Board member extended until 2021
- New five-year stock option plan proposed with maximum allocation of 250,000 share options
Annual results for 2015
Due to the disposal of the heavy steel springs and stabilisers business (finalised on 23 December 2014), profit for the comparative period is broken down into continuing operations (the Frauenthal Trade Division and the remainder of the Frauenthal Automotive Division) and discontinued operations (steel springs and stabilisers).
- The total revenue posted by Frauenthal Automotive and Frauenthal Trade rose by EUR 153.3 million (m) or 24.1% year on year, to EUR 790.7m. Revenue at Frauenthal Automotive grew by 8%, and at Frauenthal Trade by 31%. This increase was attributable to organic growth in both divisions and the inclusion of Frauenthal Handel AG (formerly ÖAG AG, which was acquired on 30 June 2014 and contributed EUR 125.6m in the period from January to June 2014) in consolidation for the first full year.
- At EUR 31.8m, Group earnings before interest, tax, depreciation and amortisation (EBITDA) represented an improvement of EUR 4.9m on the same period a year earlier. The previous year’s figure of EUR 26.9m was adjusted for non-recurring effects amounting to EUR 8.2m (chiefly negative goodwill relating to Frauenthal Handel AG). Before adjustment, EBITDA was down EUR 3.3m on the previous year.
- Divisional earnings before interest and tax (EBIT) at Frauenthal Automotive improved by EUR 1.5m, from EUR 13.8m to EUR 15.2m. This increase was attributable to a greater contribution to earnings from the Gnotec Group and the airtanks business, driven by the rise in revenues. These results were tempered by restructuring costs of EUR 1.9m relating to the light springs business.
- In spite of the sluggish trading environment, Frauenthal Trade posted EBITDA of EUR 18.6m. The previous year’s total of EUR 24.1m reflected the reversal of negative goodwill of EUR 8.9m relating to the acquisition of Frauenthal Handel AG and inventory writedowns of EUR 1.3m. Based on adjusted EBITDA of EUR 16.5m, the Division reported a EUR 2.1m increase in earnings, with the full-year contribution by Frauenthal Handel AG a major factor behind this growth. Better procurement practices had a positive effect during the year, while additional costs were also recognised as planned due to the integration of the logistics activities of SHT Haustechnik and Frauenthal Handel AG. The unfavourable market conditions in Slovakia and rationalisation measures introduced at SHT Slovensko had a slightly negative impact on earnings.
- Equity increased by EUR 9.7m to EUR 95.3m (31 December 2014: EUR 85.6m) primarily as a result of the profit for the year of EUR 8.8m. The equity ratio advanced from 22.9% as at year-end 2014 to 23.8% as at 31 December 2015.
Stock exchange announcement pursuant to section 48d(1) Stock Exchange Act
Third quarter of 2015
Due to the disposal of the heavy steel springs and stabilisers business (finalised on 23 December 2014), profit for the period is broken down into continuing operations (the Frauenthal Trade Division and the remainder of the Frauenthal Automotive Division) and discontinued operations (steel springs and stabilisers).
The analysis below refers to the continuing operations.
- The total revenue of Frauenthal Automotive and Frauenthal Trade rose by EUR 142.3 million (m) or 31.9% year on year, to EUR 589.1m. Revenue grew by 5.8% at Frauenthal Automotive and by 44.1% at Frauenthal Trade. This increase was attributable to the acquisition of Frauenthal Handel AG, which contributed EUR 131.1m in the period from January to September (ÖAG was included in the prior year’s results from July 2014).
- At EUR 22.9m, Group earnings before interest, tax, depreciation and amortisation (EBITDA) for the third quarter of 2015 represented an improvement of EUR 2.3m** on the same period a year earlier. Although earnings were EUR 1.4m lower year on year at Frauenthal Automotive, the Frauenthal Trade Division reported an increase of EUR 2.8m, while Frauenthal Holding saw cost savings of EUR 0.9m. The drop in Frauenthal Automotive’s earnings reflects the unusually strong results in the same period a year earlier, which was attributable to an atypical product mix for the Gnotec Group and the recognition of one-time restructuring expenses of EUR 1.4m relating to the lightweight springs business in the third quarter of 2015. The growth in earnings at Frauenthal Trade was due to the acquisition of Frauenthal Handel AG.
- As a result of the profit for 2014, equity increased by EUR 7.7m to EUR 93.3 at the end of the reporting period, up from EUR 85.6m as at 31 December 2014. The equity ratio fell from 22.9% as at year-end 2014 to 20.7% as at 30 September 2015, as a result of the rise in total assets stemming from an increased working capital requirement, in line with seasonal patterns.
Gnotec takes new big order in China
Gnotec bags a delightful new order with an annual value of EUR 8 million to its plant in Kunshan, China.
The order consists of pressed and welded body components for passenger cars developed by the Chinese automobile manufacturer Geely in collaboration with Volvo Cars. Production in China is set to start in 2017.
Stefan Ottosson, CEO of Gnotec, comments the order: "This order is a great achievement and an important step forward for our Chinese plant. There will be more cars built on the same platform. Chances are therefore good that our business will expand both in China and in Europe."
Gnotec followed its European customers and started manufacturing in China in 2014. The plant in Kunshan near Shanghai is specialised in automated pressing and welding.