Technotrans: economic slowdown hampers business development

07.05.2019
Category: technotrans, 2019, Investor Relations

The weakening global economy and continuing geopolitical uncertainty held back the business development of the technotrans Group in Q1 2019 more than expected. Consolidated revenue came in lower than expected, and was down two percent year on year at EUR 53.1 million. Operating profit (EBIT) for the technotrans Group (consolidated EBIT) declined by 26 percent to EUR 3.3 million. technotrans has adjusted expectations for consolidated revenue and consolidated EBIT for the current financial year to reflect the prevailing economic environment. The Board of Management is stepping up the measures kicked off in 2018 to improve profitability.

'The economic slowdown continued in the first quarter and was felt by technotrans particularly in a decline in revenue in the auto-relatedplastics processing industry,' commented Dirk Engel, Chief Executive Officer of technotrans SE. By contrast, the growth markets made a very good start to the financial year. Especially in the area of electric mobility, a large number of new projects were acquired. The growth trajectory also continued in the laser and machine tool industry. Activities in the printing industry as well as service business in the Technical Documentation area developed as expected.

However these positive effects did not yet quite suffice to compensate for investment restraint in the plastics processing industry. Revenue for the Technology segment fell 3.9 percent compared with the prior-year quarter, to EUR 38.1 million. By contrast, the Services segment put in a steady performance with revenue growth of 3.5 percent to EUR 15.0 million in the period under review. Revenue for the technotrans Group as a whole decreased by two percent to EUR 53.1 million.

The cost base that is geared towards further growth and the corresponding capacity levels weighed on profit and profit margins in the first quarter. Consolidated earnings before interest and taxes (EBIT) fell to EUR 3.3 million. The EBIT margin for the Group reached 6.3 percent, compared with 8.4 percent in the previous year. In the Technology segment, the rate of return came to 2.9 percent; the Services segment achieved a figure of 15.0 percent. The technotrans Group's net income fell by 30 percent to EUR 2.2 million.

Forecast adjusted

In view of the continuing slowdown in economic growth and the business performance in the first quarter, the Board of Management of technotrans SE is adjusting its forecast for consolidated revenue and consolidated profit for the financial year in progress.

The management will resolutely adhere to a clear growth strategy and now expects consolidated revenue in the order of EUR 218 to 226 million (previously: EUR 224 to 232 million). The planned range for the consolidated operating profit (EBIT) is EUR 12.0 to 16.0 million (previously: EUR 17.5 to 19.0 million). The expected EBIT margin is in the range of 5.5 to 7.0 percent. As before, the Board of Management expects a positive free cash flow for the current financial year.

'The update to the forecast has been necessitated by the continuing weak development in orders from the plastics processing industry and the unfavourable product mix that has resulted from this,' explained Engel. By contrast, the Board of Management remains confident about the future prospects for the growth markets as well as the laser and machine tool industry. A healthy level of orders as well as fresh revenue potential currently confirm the growth expectations for the current financial year in those areas.

The Board of Management has maintained and broadened the measures it introduced in the past financial year to boost profitability and efficiency. These create a basis on which to return soon to the growth pathway that has been followed successfully in recent years.

The Annual General Meeting of technotrans SE will take place on May 10 in the Münsterland Hall. Among other matters the meeting of shareholders will decide on the new line-up of the Supervisory Board and the distribution of the dividend payment of EUR 0.88.

The full three-month report 2019 is available to download from Investor Relations/Financial Reports section of the company website.

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