HOMAG Group with significant growth - Sustainable turnaround in fiscal 2010
- Revenue increase of 37 percent exceeds forecasts
- Headcount up again slightly
In fiscal 2010, HOMAG Group AG made an excellent recovery from the effects of the economic crisis, with order intake and sales revenue rising substantially.
The turnaround is sustainable, as is confirmed by the clearly positive earnings and the dramatically reduced liabilities to banks. CEO Rolf Knoll feels that the HOMAG Group’s global presence and the market leader’s broad portfolio are the decisive factors behind this success: “As a result, our order situation recovered at a very early stage and we have grown faster than the mechanical engineering industry as a whole or indeed our industry segment, allowing us to increase our market share further,” Knoll adds.
Based on preliminary figures, the global leader for plant and machinery for the woodworking industry, which is listed on the SDAX, saw its sales revenue for 2010 climb 37 percent to EUR 718 million (prior year: EUR 524 million). The Group has thus exceeded the sales revenue forecast, which had repeatedly been corrected upwards by the management board as the year progressed. Order intake improved 31 percent to EUR 541 million (prior year: EUR 413 million), mainly on the back of the favorable development of the BRIC countries (particularly China and Brazil), which saw their share in the HOMAG Group’s orders rise from 14 to 23 percent. The management board links the decrease in order backlog to EUR 149 million as of December 31, 2010 (prior year: EUR 171 million) to the large volume of machine deliveries toward the end of the year.
CFO Andreas Hermann believes that the good earnings situation is as much a result of the good development of business in 2010 as it is a reflection of the lower cost basis, which “we achieved thanks to the early implementation of an extensive restructuring program, the sustainability of which is also evident in the fact that we closed each of the four quarters of 2010 with a net profit.” Earnings were again burdened by an extraordinary restructuring expense of EUR 4.4 million (prior year: EUR 12.4 million); some of the restructuring measures concerned were performed ahead of schedule. Before this extraordinary expense and before the result from employee profit participation (EUR -6.9 million; prior year: EUR +2.0 million) EBITDA rose to EUR 65.1 million (prior year: EUR 15.6 million) and EBT on the same basis to EUR 25.6 million (prior year: EUR -19.4 million). EBT after extraordinary expenses and after the result from employee profit participation amounts to EUR 14.4 million (prior year: EUR -29.8 million). According to Mr. Hermann, the high ratio of tax expenses to EBT of 44 percent reflects the interest limitation regulations, losses incurred by some subsidiaries on which it was not possible to recognize deferred tax assets and an expected tax back payment in connection with a tax audit at a foreign subsidiary. Consequently, the net result for the period after non-controlling interests came to EUR 6.7 million (prior year: EUR -20.7 million), resulting in earnings per share of EUR 0.43 (prior year: EUR -1.32).
The HOMAG Group is very satisfied with the development of its liquidity position during the past fiscal year. Indeed, cash flow from operating activities improved to EUR 62.7 million in fiscal 2010 (prior year: EUR 32.5 million), with free cash flow rising to EUR 42.2 million (prior year: EUR -3.7 million). In addition, net liabilities to banks have decreased substantially to EUR 55.8 million as of year-end 2010, down almost EUR 40 million on the figure as of December 31, 2009 (EUR 94.6 million). “Our net liabilities to banks are thus at the lowest level in more than 20 years” CFO Andreas Hermann emphasizes.
In response to the positive business development, the HOMAG Group started hiring employees again in the course of 2010 to fill key strategic positions, particularly abroad. As a result, the headcount as of December 31, 2010 increased again slightly to 5,051 employees (prior year: 4,954 employees).
Although the HOMAG Group has still not reached the pre-crisis revenue and earnings level despite the successful development of fiscal 2010, CEO Knoll is confident that the upward trend will continue. “By adopting targeted growth and earnings measures, we want to return the HOMAG Group to the level of 2007 and 2008 within the medium term, and we therefore want to continue growing in 2011 – notwithstanding the high growth in 2010 – and grow our earnings even faster.”
The results of the fiscal year 2010 of HOMAG Group AG and a forecast for 2011 will be published in greater detail at the press briefing on the annual results scheduled for March 31, 2011 in Stuttgart.
This press release contains certain statements relating to the future. Future-oriented statements are all those statements that do not pertain to historical facts and events or expressions pertaining to the future such as “believes”, “estimates”, “assumes”, “forecasts”, “intend”, “may”, “will”, “should” or similar expressions. Such future-oriented statements are subject to risks and uncertainty since they relate to future events and are based on current assumptions of the company, which may not occur in the future or may not occur in the anticipated form. The company points out that such future-oriented statements do not guarantee the future; actual results including the financial position and the profitability of the HOMAG Group as well as the development of economic and regulatory framework conditions may deviate significantly (and prove unfavorable) from what is expressly or implicitly assumed or described in these statements. Even if the actual results of the HOMAG Group including the financial position and profitability as well as the economic and regulatory framework conditions should coincide with the future-oriented statements in this press release, it cannot be guaranteed that the same will hold true in the future.
SOURCE: Homag Group
Have something to say? Share your thoughts with us in the comments below.