EANS-News: Rosenbauer International AG / 2017 revenues satisfactoryat € 847.6 million / Moderate dividend of € 1.0 per share proposed
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* 2017 revenues satisfactory at EUR 847.6 million
* Slump in demand in MENA area pushes EBIT down with further extraordinary effects
* Moderate dividend of EUR 1.0 per share proposed
* Incoming orders achieve historic high at EUR 970 million, very good capacity utilization expected in 2018
|GROUP KEY FIGURES | | 2016| 2017|
|Revenues | EUR million | 870.8| 847.6|
|Net profit for the | EUR million | 34.6| 18.5|
|Cash flow from | | | |
|operating | EUR million | 83.4| 28.4|
|Equity in % of | | 37.2%| 38.2%|
|Dividend (Proposal | EUR/share | 1.2| 1.0|
|Number of employees| | 3,375| 3,405|
|Order backlog as of| EUR million | 739.7| 882.6|
The Rosenbauer Group closed the past 2017 financial year with revenues of EUR 847.6 million. Thus, this was at approximately the same level again as the previous year (2016: EUR 870.8 million). The low oil price at the beginning of the year and political turmoil resulted in a substantial drop in demand in the MENA area, which was partially compensated for by deliveries to some Asian, African and European countries. As a result, EBIT amounted to EUR 21.1 million (2016: EUR 47.0 million) despite cost-cutting measures and fell short of expectations. In 2017, incoming orders achieved a historic record high again at EUR 970 million (2016: EUR 816.8 million), which is expected to result in a very good capacity utilization for all Group companies in the current year.
Revenues and result of operations
Unlike the global economy, the global firefighting industry only recorded slight growth in 2017. The strongest sales regions included Europe, North America and Asia, the biggest single markets were the US, China and Germany. In countries highly dependent on the price of oil, the demand showed initial recovery in 2017, with the significant increase in oil prices in the second half of the year also resulting in an improvement in incoming orders.
In this difficult environment, the Rosenbauer Group generated a satisfactory level of revenues at EUR 847.6 million (2016: EUR 870.6 million). Income was reduced somewhat on account of deliveries to the Arab world remaining at a relatively low level the whole year. The NISA (Northern Europe, Iberia, South America and Africa) and APAC (Asia-Pacific) areas performed better, with revenues up by 7% for both of them.
In 2017, EBIT was significantly down on the previous year at EUR 21.1 million (2016: EUR 47.0 million). This sharp decline in earnings is due mainly to the decreased delivery volume in 2017 as a result of the low price of oil and ongoing conflicts in various parts of the world, leading to weak capacity utilization in some manufacturing areas. The trend was counteracted from the middle of the year by measures to cut costs.
EBIT was also squeezed by the composition of the production program, which was partially transitioned from profitable large-volume orders to individual orders with more complex processing. Exchange rate effects and higher start-up costs at the platform manufacturer Rosenbauer Rovereto likewise compressed earnings. The reorganization of the staff structure in Austria, the amortization of intangible assets at Rosenbauer Rovereto, and the discontinuation of a software project also led to additional expenses
Furthermore, irregularities were detected in the annual financial statements of Rosenbauer Deutschland. Based on the findings obtained to date in the ongoing investigations, write-downs on individual receivables of EUR 1.2 million and a provision for other identified risks of EUR 3.4 million were recognized in the consolidated financial statements.
The Rosenbauer Group reported record incoming orders of EUR 970 million in the past financial (2016: EUR 816.8 million). The largest contribution to growth was made by the NISA area (Northern Europe, Iberia, South America and Africa) with incoming orders from Holland and England. Including others, an order from the airport operator Royal Schiphol Group for the delivery of 18 ARFF vehicles worth around EUR 22 million was secured. US vehicles were still in high demand with an increase of 10%. The CEEU area (Central and Eastern Europe) – which includes the German market – is also still performing successfully with growth of 7%. Here Rosenbauer secured an order to deliver 108 vehicles for the Federal Office of Civil Protection and Disaster Assistance. There is also an option for the delivery of a further 198 vehicles between 2018 and 2020.
Financial and asset situation
For reasons specific to the industry, the structure of the statement of financial position as of the end of the year is characterized by high working capital. This generally results from the comparatively long turnaround times for custom-built firefighting vehicles. The financial situation of the Group remains solid even in times of a difficult market situation. Total assets declined as against the previous year by 4% and amounted to EUR 625.4 million as of December 31, 2017 (2016: EUR 650.6 million).
Working capital amounted to EUR 189.7 million as of the end of the year (2016:
EUR 189.6 million). Cash was down from EUR 30.2 million to EUR 20.0 million as of the end of the year on account systematic asset management.
Inventories decreased to EUR 191.2 million as of the end of the year (2016: EUR 199.1 million). Construction contracts were up by 12% on the previous year at EUR 75.6 million (2016: EUR 67.7 million) on account of high capacity utilization towards year-end 2017. Current interest-bearing liabilities rose from EUR 102.4 million to EUR 105.1 million.
Equity increased to EUR 239.2 million as of the end of the year (2016: EUR 242.0 million). As a result of the lower total assets, the equity ratio rose to 38.2% (2016: 37.2%) and thus was above the long-term target of more than 35%. In 2017, net debt increased to EUR 184.1 million (2016: EUR 171.3 million) due to lower cash and higher liabilities. Thus, the gearing ratio climbed to 77.0% (2016:
The net cash flow from operating activities fell to EUR 28.4 million in 2017 (2016: EUR 83.4 million). This development is due to lower earnings and lower trade payables compared to the previous year.
Rosenbauer follows a growth-oriented and sustainable dividend policy that is consistent with the company’s performance. Given the lower EBIT compared to 2016, the Executive Board and the Supervisory Board are therefore proposing a divided of EUR 1.0 per share (2016: EUR 1.2) to the Annual General Meeting. Accordingly, the distribution volume for 6.8 million no-par-value shares will be EUR 6.8 million (2016: EUR 8.2 million). Based on the closing price of EUR 52.6, this corresponds to a dividend yield of 1.9% (2016: 2.2%).
The firefighting industry follows economic developments at a delay of several months. Demand is defined largely by countries with steady procurement. However, elevated security awareness following natural or terrorist disasters also leads to increased investment in firefighting technology and equipment.
A further increase in demand for fire trucks is expected on the North American market in 2018, which should raise the procurement volume to well above the long-term average of around 4,000 vehicles. A requirement for this is that the tax reform passed at the beginning of the year actually stimulates investment in the country.
The European firefighting market is likewise set to continue its growth in 2018. Demand has recently increased both in the D-A-CH region (Germany, Austria, Switzerland) and in some Western European countries. New opportunities could arise if political plans to invest more in disaster prevention in southern and eastern Europe go ahead.
Demand for firefighting technology rallied again slightly in the countries of the Middle East in recent months, hence a slight recovery in procurement volume is predicted for the year as a whole.
Rosenbauer is optimally positioned worldwide with innovative products and services. Time and again, it is successfully tapping new markets and expanding its market position. One example of this is the HEROS-titan fire service helmet, sales of which doubled over the last five years. Intensified global market cultivation will also stimulate growth in equipment in 2018. The successful launch of the ET series can be expected to raise prospects for additional sales opportunities, especially on markets with high cost pressure. The launch of the new top PANTHER 8×8 model was a complete success, confirmed by high incoming orders and a strong order backlog. Furthermore, Rosenbauer is still investing in its sales organization and product development in order to exploit every growth opportunity on the world’s firefighting markets.
end of announcement euro adhoc
issuer: Rosenbauer International AG
phone: +43(0)732 6794 568
FAX: +43(0)732 6794 89
stockmarkets: Wien, Berlin, Stuttgart
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Rosenbauer International AG
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