Tognum reports strong first half-year

• Order intake up 18.8% to €1,651.0 million
• Revenues increase 23.3% to €1,338.9 million
• Adjusted EBIT margin of 11.8% (H1 2010: 8.9%)
• Forecast for the full year confirmed

Friedrichshafen, 4 August 2011. The specialist for propulsion and power solutions Tognum continues its positive performance in the first half-year: the company achieved significant increases in order intake, revenues and adjusted EBIT. At the end of this strong first half-year, Tognum confirmed its forecast for the year that had been specified in May 2011. The company continues to expect revenues of around €2.9 billion for the full year and an adjusted EBIT of around €300 million.

“Tognum has again been able to benefit fully from the economic upswing in the second quarter,” explained Volker Heuer, CEO of Tognum AG. “As a broadly diversified system provider, we will continue to enjoy above-average benefit from the positive overall economic situation in a large number of markets. For 2011, we are very confident that we will meet our forecast for the year.”

Significant increase in order intake and revenues

The order intake was up 18.8% in the first six months of the year compared with the same period last year to €1,651.0 million (H1 2010: €1,389.5 million). In the case of revenues, Tognum reported an increase of no less than 23.3% to €1,338.9 million (H1 2010: €1,086.0 million). All three reporting segments contributed to this growth.

Strong increase in the adjusted EBIT, high adjusted EBIT margin

The adjusted EBIT was up significantly in the reporting period, increasing by 63.1% to €158.2 million (H1 2010: €97.0 million). This rise was due primarily to the increase in revenues, the improved capacity utilisation, increased efficiency levels, an improved revenue mix and a favourable development in terms of prices compared with costs. The adjusted EBIT margin rose to 11.8% in the first half-year (H1 2010: 8.9%).

Adjusted earnings per share more than doubled

An increase in adjusted gross profit of around 30% to €420.5 million in the reporting period (H1 2010: €313.0 million) resulted in an improved adjusted gross profit margin of 31.4% (H1 2010: 28.8%). The adjusted group net income was up 105.3% to €108.4 million (H1 2010: €52.8 million). As a result, the adjusted earnings per share more than doubled in the first half-year and amounted to €0.82 (H1 2010: €0.40).

Increased equity ratio

The equity ratio increased slightly and at the end of the first half-year amounted to 27.6% (31.12.2010: 26.8%). Free cash flow¹ at the end of the first six months is at €25.4 million (H1 2010: €85.6 million). Net financial debt nevertheless increased slightly to €82.2 million (31.12.2010: €57.2 million), since this had been offset by the dividend payment in May of €65.7 million.

Improved performance in all segments

All three reporting segments – Engines, Onsite Energy & Components (OE&C) and Distribution – improved their performance in the first six months of the year.²

Half-year revenues in the Engines segment amounted to €924.4 million and were thus 17.8% above the level reported for the same period last year (H1 2010: €784.9 million). Oil & Gas business enjoyed a disproportionate increase in revenues. This was mainly due to the increased investing activities resulting from the increase in raw material prices. Marine business, however, also contributed to this growth – primarily yacht business – as did the Industrial business with strong sales in rail and mining applications. Revenues in the Defence business were down, as a result of several projects coming to an end on schedule and no new projects of any significance currently ready for completion. After Sales continues to remain at a high level. The adjusted segment EBIT improved significantly in the course of the first six months by 32.4% compared with the same period last year to €133.2 million (H1 2010: €100.6 million).

The OE&C segment with €430.5 million in the first half-year reported 32.9% higher revenues than in the same period last year (H1 2010: €324.0 million). A strong driver of revenues in the OE Gas Power Systems application area was the gas systems business, where revenues more than doubled. In the OE Diesel Systems & Engines application area, business in both diesel systems and the supply business with OEM customers developed positively. The After Sales/Other application area once again saw a high level of increase. The adjusted segment EBIT was up 177.4% to €40.5 million (H1 2010: €14.6 million).

The revenue volume of the Distribution segment was up 89.3% in the reporting period compared with the same period last year to €241.0 million (H1 2010: €127.3 million). The adjusted segment EBIT rose 72.8% to €14.0 million (H1 2010: €8.1 million).

The interim report for the first half of 2011 is available for download at www.tognum.com under “Investors”.

Key figures for the Tognum Group

In € million (except*)	H1 2010	H1 2011	Change	Q2 2010	Q2 2011	Change
Order intake	1,389.5	1,651.0	18.8%	693.0	833.1	20.2%
Revenues	1,086.0	1,338.9	23.3%	576.6	677.5	17.5%
Gross profit margin (adj.)	28.8%	31.4%	2.6pp	28.9%	32.9%	4.0pp
EBIT (adj.)	97.0	158.2	63.1%	54.2	86.3	59.2%
EBIT margin (adj.)	8.9%	11.8%	2.9pp	9.4%	12.7%	3.3pp
Net profit (adj.)	52.8	108.4	105.3%	30.5	57.5	88.5%
Earnings per share (adj.) in €3	0.40	0.82	105.0%	0.23	0.44	91.3%
Equity ratio4	26.9%	27.6%	0.7pp	26.9%	27.6%	0.7pp
Free cash flow5	85.6	25.4	-70.3%	-38.3	-41.0	-7.0%
Net financial debt	57.26	82.2	43.7%	57.27	82.2	43.7%
Employees*8	8,818	9,450	7.2%	8,818	9,450	7.2%

  

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