Tognum expects strong H2 2007
Posted on August 16, 2007
Friedrichshafen, Germany – In the first half year and quarterly report following the July 2nd 2007 IPO, Tognum AG (FSE:TGM; ISIN DE000A0N4P43; WKN A0N4P4) reports a significant improvement in order intake, revenues, operating results, group profit and other financial indicators. Based on this information, the company is looking forward with great confidence to developments in H2/07.
- H1/07 EUR 1.6bn order intake supports forecast of revenue growth of over 9% for 2007 vs. 2006 (on a pro-forma basis*)
- H1/07 adj. EBIT of EUR 207m represents a 15.5% margin on revenues of EUR 1.3bn
- EBIT growth of 21-25% expected for 2007 vs. 2006 (on pro-forma basis*)
- H1/07 adj. group net profit of EUR 104m; prospect of dividend payment of over 30% of parent company’s annual net profit
- Number of employees up by around 10% to 7,854 since start of year
- IPO increases equity ratio to 18%
- Net financial debt reduced to below EUR 400m following IPO; new credit line broadens scope for investment spending
In the first half year and quarterly report following the July 2nd 2007 IPO, Tognum AG (FSE:TGM; ISIN DE000A0N4P43; WKN A0N4P4) reports a significant improvement in order intake, revenues, operating results, group profit and other financial indicators. Based on this information, the company is looking forward with great confidence to developments in H2/07.
Tognum achieved revenues of EUR 1.34bn in the first half of the financial year. Calculated on a comparable basis*, that is an improvement of 12.7% versus the same period last year (H1/06: EUR 1.19bn on a pro-forma basis). The company achieved an adjusted EBIT (Earnings before Interest and Tax) of EUR 207m in the first half. This represents an operating margin of 15.5%.
“In the second half of the year we will also grow faster than the market and anticipate revenue growth on a comparable basis of more than 9% for the year as a whole, as well as a substantial increase of between 21%-25% in operating profit,” says Tognum’s CEO Volker Heuer on the occasion of the presentation of the H1 report. “In addition, as previously announced, we have restructured our balance sheet. The successful Equity Story in the context of the IPO led to a further increase in our equity to an already solid level of 18%.”
Solid balance sheet structure and massively reduced net financial debt
Tognum CFO Joachim Coers says: “By means of the planned inflow from the capital increase of EUR 268m, we have significantly reduced the net financial debt to below EUR 400m.” The refinancing (a syndicated multicurrency credit facility), which was concluded as part of the IPO, benefited from a bank credit rating equivalent to investment grade and thus greatly reduced the costs of Tognum’s financing. “Compared to the rest of the sector, we now have a very robust balance sheet and financial ratios,” adds Coers. “By the end of 2007 we want to again increase our equity ratio from our own resources. Tognum is now well positioned for further investments and acquisitions.” In the first half, capital expenditure amounted to EUR 76m and research & development costs were equal to 6.2% of revenues.
Jobs up 9.8% to 7,854
“Thanks to our successful and growing range of products and the acquisition of the US company Katolight, we were able to expand our workforce by more than 700 employees to more than 7,800 globally in the first half of the year. On the basis of the group’s adjusted net profit of EUR 104m in the first half and a positive outlook for the second half, we will propose a dividend of over 30% of the annual net profit of Tognum AG (parent company) in our first year as an incorporated company.”
Both Tognum divisions increase revenues, profits and order intake
Tognum’s largest division, mtu Engines (high speed diesel engines plus spare parts and service) recorded segment revenues of around EUR 1.15bn in H1 2007. This represents an increase of around 12% compared to the volume of business in the same period the previous year, calculated on a comparable basis*. The adjusted EBIT (Earnings before Interest and Taxes) amounted to EUR 188m, representing an operating margin of 16.4%. With a high order intake of just under EUR 1.4bn right across the range of products in the first half year, mtu Engines began the second half with an excellent order backlog.
The second business division, Tognum Onsite Energy Systems & Components, achieved segment revenues of EUR 235m in the first half year. On a comparable basis*, this is equivalent to growth of around 28% compared to the previous year. The adjusted EBIT amounted to EUR 17m, the operating margin to 7.2%. In the coming months, this Tognum group division will also profit from a strong order intake of EUR 249m in H1. The order intake was driven by good order intake for decentralised power plants and for fuel injection systems but is also due to the acquisition of the US company Katolight.
* Comparisons between profitability in H1 2007 and the same period last year are possible only to an extremely limited extent. This is because Tognum AG was only constituted in its present form in April 2006. This means in particular that operating results of the DaimlerChrysler Off-Highway activities, including the MTU Friedrichshafen Group, were only included from Q2 onward. In order to allow a comparison of company development in the first half, at least at the revenue level, pro-forma accounts have been drawn up, based on the hypothetical assumption that the MTU Friedrichshafen Group in particular was already integrated into the Tognum Group on January 1st 2006.