BERTRANDT AG 2O24 Report on the 1st half
1 October 2023 until 31 March 2024
2O23/
2O24
The first half year at glance
INCOME STATEMENT, CASH FLOW STATEMENT, BALANCE SHEET, SHARE, EMPLOYEES
18 Interim Consolidated Financial Statements
24 Condensed Consolidated Notes for the First Half of Fiscal 2023/2024
- Quarterly Survey
- Financial calendar
- Roadshows and Conferences
- Credits
IFRS
Income statement
Total revenues (EUR million)
EBIT (EUR million)
Profit from ordinary activities (EUR million)
Post-tax earnings (EUR million)
Cash flow statement
Cash flow from operating activities (EUR million)
Cash flow from investing activities (EUR million)
Free cash flow (EUR million)
Capital spending (EUR million)
Balance sheet
Equity (EUR million)
Equity ratio (%)
Total assets (EUR million)
Share
Earnings per share (EUR)
Share price on 31 March (EUR)1
Share price, high (EUR)2
Share price, low (EUR)2
Shares outstanding on 31 March (number)
Market capitalisation on 31 March (EUR million)
Employees
Number of employees at Bertrandt Group on 31/03
01/10/2023-
31/03/2024
626.890
21.959
17.902
12.222
52.917
-10.055
42.862
-10.247
453.969
48.7%
931.899
1.21
45.65
54.70
41.40
10,143,240
463.0
14,526
Changes in %
9.4
-8.5
-13.5
-12.5
128.2
-
322.3
-
-0.1
2.5
-2.5
-12.5
-8.7
6.4
46.8
-
-8.7
5.9
Changes absolut
53.755
-2.040
-2.802
-1.741
29.732
2.981
32.712
3.514
-658
-
-24.221
-0.17
-4.35
3.30
13.20
-
-44
811
01/10/2022-
31/03/2023
573.135
23.999
20.704
13.963
23.185
-13.036
10.150
-13.761
454.627
47.5%
956.120
1.38
50.00
51.40
28.20
10,143,240
507.2
13,715
1Closing price in Xetra trading.
2In Xetra trading.
02 Bertrandt Report on the 1st half
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Contents
2O24 Report on the 1st half
1 October 2023 until 31 March 2024
02 The first half year at glance
18 Interim Consolidated Financial Statements
24 Condensed Consolidated Notes for the First Half of Fiscal 2023/2024 29 Quarterly Survey
30 Financial Calendar
30 Roadshows and Conferences
30 Credits
03 Bertrandt Report on the 1st half
Overview | ||||||
Bertrandt's business performance in the first half of fiscal 2023/2024 | ||||||
was determined by very heterogeneous market conditions. The | ||||||
market environment for research and development (R&D) services | ||||||
was encouraging in the first quarter and we benefited from an in- | ||||||
crease in project awards and successful project acquisition efforts. | ||||||
However, the Company has been faced with temporarily changed | ||||||
conditions since the beginning of the second quarter. With the | ||||||
sudden termination of the subsidies promoting the sale of elec- | ||||||
trically powered vehicles - the so-called environmental bonus | ||||||
18 | Interim Consolidated Financial Statements | - in Germany as per the end of December 2023, sales of electric | ||||
24 | Condensed Consolidated Notes for the | vehicles have been declining noticeably in Bertrandt's domestic | ||||
First Half of Fiscal 2023/2024 | market. In addition, the planned ban on combustion engines from | |||||
29 | Quarterly Survey | 2035 has begun to be questioned in political discussions throug- | ||||
30 | Financial calendar | hout Europe. In China, the market for hybrid vehicles has been | ||||
30 | Roadshows and Conferences | growing noticeably faster than the market for battery-only electric | ||||
30 | Credits | cars since 2023, while the market share of electrified vehicles in the | ||||
USA has stagnated at below 20%. |
Based on this changed market situation, decisions regarding future research and development projects were temporarily postponed. As a result, we have seen a reduction in capacity demand from our customers since the beginning of the second quarter of 2023/2024 and consequently a temporarily lower-than-expected capacity utilisation in the Group.
At the same time, European car manufacturers, other companies in our customer industries and associations such as the VDA are emphasising that their R&D investment needs will be high in the medium and long term as research and development will be required to foster the transformation process in their sectors, ensure the competitiveness of their products, and to meet regulatory require- ments, such as stricter emission limits.
Bertrandt's business performance in the period under review must be assessed against this backdrop. The Company was able to increase total revenues by 9% to EUR 626.890 million (H1 2022/2023: EUR 573.135 million) in the first half of fiscal 2023/2024 thanks to a more favourable market environment in the first quarter. Howe-
ver, at the same time the Company's EBIT of EUR 21.959 million (H1 2022/2023: EUR 23.999 million) was affected by a decline in capacity utilisation starting in the second quarter of 2023/2024.
In addition, there were one-off effects in the cumulative amount of EUR -3.3 million in the second quarter: a loss allowance was required in connection with the deteriorated solvency of a customer, and an obligation previously classified as a contingent liability was utilised.
The number of employees reached another record level in Ber- trandt's history with 14,526 employees as at 31 March 2024 (31 March 2023: 13,715). However, headcount growth slowed noticeably in the second quarter compared to the first quarter of fiscal 2023/2024 due to the recent changes in customer requirements. In the second quarter of the fiscal year, organic employee growth as at 31 March 2024 was 35 people compared to the figure at the end of the first quarter on 31 December 2023 (previous year +299 people).
Bertrandt's balance sheet was further strengthened in the period under review. At the end of March 2024, the Company's equity was EUR 453.969 million (31 March 2023: EUR 437.581 million) and the equity ratio was 48.7% (31 March 2023: 47.7%).
We are responding to the temporary market changes with consistent and effective measures such as cost reductions and a capacity management in Germany that is adapted to market requirements. Nonetheless, we expect demand for capacity to return to normal over the course of the 2023/2024 fiscal. In addition, the second half of 2023/2024 has a total of two more working days than the same period in the previous year. In particular, the fourth quarter of 2023/2024 will have a seasonal effect as it has 65 working days whereas the three previous quarters have an average of around 61 working days. Based on the development in the first half of fiscal 2023/2024 and in view of the expectations for the further course of the year, Bertrandt confirms the forecast for the 2023/2024 fiscal year, which was last published on 14 February 2024 as a summarised statement on page 4 of the report on the first
04 Bertrandt Report on the 1st half
02 The first half year at glance
18 Interim Consolidated Financial Statements
24 Condensed Consolidated Notes for the First Half of Fiscal 2023/2024
- Quarterly Survey
- Financial calendar
- Roadshows and Conferences
- Credits
quarter of 2023/2024. The detailed forecast report for the | of our customer industries, the Bertrandt Group reported the fol- | |
2023/2024 fiscal year was published with the | 2022/2023 Annual | lowing key figures in the first half and the second quarter of fiscal |
Report on 14 December 2023 (pages 118 to | 121). Against the | 2023/2024: |
macroeconomic backdrop described above and the environment
TOTAL REVENUES | EARNINGS BEFORE INTEREST AND TAXES (EBIT) | ||
H1 2023/2024: | Q2 2023/2024: | H1 2023/2024: | Q2 2023/2024: |
626.890 | 318.491 | 21.959 | 8.503 |
EUR million | EUR million | EUR million | EUR million |
(H1 2022/2023: 573.135 EUR million) | (Q2 2022/2023: 292.665 EUR million) | (H1 2022/2023: 23.999 EUR million) | (Q2 2022/2023: 12.502 EUR million) |
CASH FLOW FROM OPERATING ACTIVITIES | INVESTMENTS IN PROPERTY, PLANT AND EQUIPMENT |
H1 2023/2024: | H1 2023/2024: |
52.917 | 9.445 |
EUR million | EUR million |
(H1 2022/2023: 23.185 EUR million) | (H1 2022/2023: 13.103 EUR million) |
EMPLOYEES
The headcount as at the end of the first half of fiscal 2023/2024 was
14,526 People
(31. March 2023: 13,715. 31. December 2023: 14,401)
05 Bertrandt Report on the 1st half
Group Management Report
THE GROUP - GENERAL INFORMATION
02 The first half year at glance
Business model and strategy | ||||||
We are Bertrandt - an independent and international group offe- | ||||||
ring many years of automotive and know-how that is sought-after | ||||||
also in other industries. With our comprehensive understanding of | ||||||
systems and products we enable the creation of tailor-made solu- | ||||||
tions along the entire product engineering process, from the initial | ||||||
18 | Interim Consolidated Financial Statements | design idea through to support during start of production, and | ||||
24 | Condensed Consolidated Notes for the | system automation. | ||||
First Half of Fiscal 2023/2024 | ||||||
29 | Quarterly Survey | Our company accumulates 50 years of experience and the exten- | ||||
30 | Financial calendar | sive expertise of over 14,500 employees at more than 50 main | ||||
30 | Roadshows and Conferences | locations in Europe, the USA, Africa and China. This is how we are | ||||
30 | Credits | helping to accelerate technological progress in the trending areas | ||||
of e-mobility, autonomous systems, digitalisation and connectivi- | ||||||
ty. In addition to the automotive industry, we focus primarily on | ||||||
the aerospace and electrical industries, the machinery and plant | ||||||
engineering, medical technology and energy sectors as well as on | ||||||
HR services. |
In 2024, Bertrandt celebrates
50
years of business.
We support our customers throughout all phases of their product development from the initial idea through to series production. We take on conceptual design, development and simulation and provide start-of-production and in-series support. Throughout all development steps we continuously validate projects by simulation and comprehensive testing in both the virtual and the physical environments.
Innovative and sustainable mobility is more than just a business concern for us. Sustainable corporate governance that encompasses non-financial, sustainability aspects is an integral part of our business model. We offer our customers the best possible engineering services from interdisciplinary expert teams that collaborate across our multiple sites. Together with our customers we shape future-relevant topics and tailor our range of services to their needs and requirements and the changes in the market. Our aspiration is to devise the solutions for tomorrow's trends today.
REPORT ON THE ECONOMIC POSITION
Economic development
Our fiscal year 2023/2024 started in October 2023 in a challenging global economic environment affected by geopolitical tensions and persistently high inflation rates. According to the Kiel Institute for the World Economy (IfW), the global economy lost momentum in the final quarter of 2023, i.e. in the first quarter of our fiscal year 2023/2024. According to the economists at M.M.Warburg & CO, economic activity in early 2024 - the beginning of the second quarter of our reporting period - was also slow to take off.
The International Monetary Fund (IMF) reports that the global economy grew by a comparatively low 3.2% overall in 2023.
06 Bertrandt Report on the 1st half
According to M.M.Warburg & CO, the US economy achieved eco- | ||||||
nomic growth of 2.5% overall for 2023 as a whole after a surpri- | ||||||
singly positive second half of the year. The IMF's original forecast | ||||||
was only 2.1% growth. Positive impetus is coming from the labour | ||||||
market and, in particular, from wage trends and falling inflation | ||||||
rates. | ||||||
Unlike during previous global economic downturns, when China | ||||||
generated demand and supported the global economy through | ||||||
trade, China is currently providing little impetus for global activity | ||||||
according to the IfW. A sharp rise in corporate and household debt | ||||||
and considerable overcapacity in the building sector resulting in | ||||||
the insolvency of major real estate developers are slowing down | ||||||
18 | Interim Consolidated Financial Statements | activity and unsettling private households. According to the Joint | ||||
24 | Condensed Consolidated Notes for the | Economic Forecast, China's economy expanded by 5.2% in 2023 | ||||
First Half of Fiscal 2023/2024 | and the production increase thus was below the pre-pandemic | |||||
29 | Quarterly Survey | growth trend. The strong upturn expected after the restrictions | ||||
30 | Financial calendar | due to the pandemic had been lifted therefore failed to materialise. |
30 Roadshows and Conferences
30 | Credits | According to IMF estimates, gross domestic product in the eu- |
rozone only grew by a mere 0.4% in 2023. Growth was very he- |
terogeneous in the member states: while countries such as Spain achieved noticeable economic growth of 2.5%, Germany was the only developed economy in the world to fall into recession with a GDP decline of -0.3%. The reasons for this weak development are manifold and, according to the IfW, primarily of a structural nature.
SECTOR TRENDS
Automotive industry
According to the German Association of the Automotive Industry (VDA), the major international automobile markets recorded an increase in new registrations in 2023 because vehicle availability improved significantly compared to the previous year, which had been characterised by supply shortages. The VDA is forecasting a sales volume of 75.6 million units (+10%) for the global passenger car market in 2023. Nevertheless, the business environment for the automotive industry remains challenging according to the VDA, as geopolitical and macroeconomic uncertainties have dampened overall economic demand recently and thus caused economic growth to slow.
+10%
growth in car sales
in 2023.
The VDA sees a dynamic development in the US market with an increase of 12% to 15.5 million vehicles in 2023. In China, around 25.8 million vehicles were sold in 2023, which corresponds to an increase of 11%. In Europe, too, passenger car sales recovered to around 12.8 million vehicles (+14%) in 2023 as a whole. In Germany, 2.8 million vehicles cars were registered in 2023, i.e. 7% more than in 2022.
The VDA reports that the year 2024 started with a positive first quarter for the majority of international automotive markets. For instance, passenger car sales in the USA were up 5% in the first quarter of 2024 with a total of around 3.7 million vehicles sold. In China, the challenging macroeconomic situation has not yet had a negative impact on car sales: passenger car sales rose to 4.8 million new vehicles sold in the first quarter, an increase of 13%. In the European market around 3.4 million new vehicles were registered in the first quarter of2024. This is almost 5% more than in the first quarter of the previous year. At +4%, car sales in Germany were at a level similar to that of Europe as a whole.
While passenger car markets show a generally upward trend, the macroeconomic environment seems to have changed for the automotive sector. With the sudden termination of the subsidies promoting the sale of electrically powered vehicles - the so-called environmental bonus - in Germany as per the end of December 2023, sales of electric vehicles have been declining noticeably in Bertrandt's domestic market. Since early 2024, political discussions have been ongoing throughout Europe regarding a revised schedule or a potential general departure from the previously planned ban on combustion engines from 2035. Market data for China have shown since 2023 that sales of plug-in hybrid electric cars have been growing faster than sales of battery-only electric cars. Accor-
07 Bertrandt Report on the 1st half
ding to an analysis conducted by the International Energy Agency | ||||||
(IEA), sales of plug-in hybrid electric cars in China rose by around | ||||||
75% year-on-year in the first quarter of 2024, while sales of bat- | ||||||
tery-powered electric cars only increased by 15%. And although | ||||||
demand for electrified vehicles is growing in the USA, fully electric | ||||||
vehicles are not yet a mass product as their market share was only | ||||||
7% in 2023 according to Strategy&. | ||||||
Aerospace Industry | ||||||
The global aerospace industry has largely made up for the con- | ||||||
sequences of the coronavirus pandemic in 2023 and continues to | ||||||
recover. According to the International Air Transport Association | ||||||
18 | Interim Consolidated Financial Statements | (IATA), air traffic in 2023 already exceeded the 2019 volume by | ||||
24 | Condensed Consolidated Notes for the | more than 2%. However, a major European manufacturer of com- | ||||
First Half of Fiscal 2023/2024 | mercial aircraft reports that the supply chain remains under pres- | |||||
29 | Quarterly Survey | sure. Nevertheless, this manufacturer, for example, increased its | ||||
30 | Financial calendar | research and development spending by 8.8% to EUR 743 million | ||||
30 | Roadshows and Conferences | in the first quarter of 2024. |
30 Credits
Other industries
The President of the Federation of German Industries (BDI) emphasises that the industry sector in Germany has not yet recovered from the cost and demand shocks, temporarily high energy prices and inflation. Against this backdrop, the association expects growth in Germany to increase by only 0.3% in 2024.
The German Engineering Federation (VDMA) reports that the eco- nomy's weak phase in the second half of 2023 has been carried over into the new year and that incoming orders are still at low levels in early 2024. However, the VDMA sees exports to China as a silver lining as they increased by over 14% in the first two months of 2024. Despite initial positive signals, the German electrical and digital industry is still facing a challenging year.
BUSINESS PERFORMANCE
Development in the first half of fiscal 2023/2024
In the economic environment described above, the first two quarters of the 2023/2024 fiscal year developed heterogeneously. The market environment for research and development (R&D) services was encouraging in the first quarter and Bertrandt benefited from an increase in project awards and successful project acquisition efforts. We have seen a reduction in capacity demand from our customers since the beginning of the second quarter of 2023/2024 and consequently a temporarily lower-than-expected capacity utilisation in the Group.
Total revenues
Total revenues grew by EUR 53.755 million in the reporting period to EUR 626.890 million (H1 2022/2023: EUR 573.135 milli- on), which translates into growth of 9.4% (previous year 17.6%). Growth in the first quarter of 2023/2024 came to 10.0% with total revenues attaining EUR 308.398 million (previous year EUR 280.469 million). In the second quarter of the fiscal year, total revenues continued to benefit from the effects of the more favourable market conditions in the first quarter. Together with inorganic growth effects, this caused total revenues to rise by 8.8% to EUR 318.491 million (previous year EUR 292.665 million). Organic growth in the second quarter was 5.6% compared to the same quarter of the previous year.
626.890
EUR million in total revenues were generated by the Bertrandt Group in the first half of fiscal year 2023/2024.
08 Bertrandt Report on the 1st half
02 The first half year at glance
18 Interim Consolidated Financial Statements
24 Condensed Consolidated Notes for the First Half of Fiscal 2023/2024
- Quarterly Survey
- Financial calendar
- Roadshows and Conferences
- Credits
TOTAL REVENUES (1ST HALF) | |||||
EUR million | |||||
700.000 | 573.135 | 626.890 | |||
600.000 | 508.240 | ||||
487.251 | |||||
500.000 | |||||
416.795 | |||||
400.000 | |||||
300.000 | |||||
200.000 | |||||
100.000 | |||||
0 | |||||
2019/2020 | 2020/2021 | 2021/2022 | 2022/2023 | 2023/2024 |
Total revenues rose to EUR 626.890 million in the first half of fiscal 2023/2024.
The development of total revenues in the first half of 2023/2024 was characterised in particular by a dynamically growing international business. The non-domestic subsidiaries increased their total revenues by 39%, recording sales of EUR 136.733 million in the reporting period (previous year EUR 98.209 million). This means that around 22% of the Group's total revenues were generated by the foreign subsidiaries (previous year 17%). The first half of 2023/2024 had around two fewer working days than the same period in the previous year.
The Group's headcount came to 14,526 employees on 31 March 2024, an increase by 811 compared to the previous year's figure of 13,715 employees on 31 March 2023. In comparison with the end of the first quarter of 2023/2024 (14,401 employees), there was only a slight increase by 125, of which 90 people belong to the newly acquired subsidiaries which were consolidated for the first time. In purely organic terms, the number of employees increased by 35 compared to the previous quarter.
Key expenditure figures
The increase in cost of materials correlates with the growth in total revenues. The cost of materials ratio increased on a project-related basis to 12.8% in the first half of 2023/2024, from 11.7% in the same period of the previous year. The increase in personnel expenses correlates with year-on-year employee growth, salary developments and the normalisation of capacity utilisation in non-domestic subsidiaries. The latter had been lower especially in the first quarter of the previous year. The staff cost ratio was71.2% in the reporting period, i.e. slightly below that of the same period in the previous year (71.8%). Depreciation and amortisation increased to EUR 29.364 million in the first half of 2023/2024 (H1 2022/2023: EUR 27.223 million) due to the commissioning of the new test cen- tres. Other operating expenses rose to EUR 51.572 million in the first half of 2023/2024 (previous year EUR 46.550 million). The rise in other operating expenses is attributable to the higher business volume and is, among others, related to sales initiatives, insurances or foreign currency valuation effects.
09 Bertrandt Report on the 1st half
02 The first half year at glance
18 Interim Consolidated Financial Statements
24 Condensed Consolidated Notes for the First Half of Fiscal 2023/2024
- Quarterly Survey
- Financial calendar
EBIT (1ST HALF) | |||||
EUR million | |||||
40.000 | |||||
30.000 | 21.238 | 20.846 | 23.999 | 21.959 | |
20.000 | 11.084 | ||||
10.000 | |||||
0 | |||||
2019/2020 | 2020/2021 | 2021/2022 | 2022/2023 | 2023/2024 |
EBIT came to EUR 21.959 million in the first half of the fiscal year.
- Roadshows and Conferences
- Credits
In addition, as a result of the negative outcome of pending administrative appeal and court proceedings brought against a non-domestic tax authority, an obligation previously classified as a contingent liability was utilised. The resulting expenses of EUR 2.688 million are also recognised in other operating expenses. A further one-off effect resulted from a loss allowance in connection with the deteriorated solvency of a customer.
EBIT
The Bertrandt Group's EBIT was EUR 21.959 million in the first half of fiscal 2023/2024 (previous year EUR 23.999 million). Unlike total revenues, EBIT failed to grow in the reporting period. The operating margin decreased to 3.5% from 4.2% in the same period of the previous year. While the operating margin was still at 4.4% in the first quarter of 2023/2024 (previous year 4.1%), it fell to 2.7% in the second quarter (previous year 4.3%). This reflects in particular the weaker-than-expected capacity utilisation due to a temporary decline in the market's demand for capacity in the second quarter of 2023/2024. Furthermore, the one-off effects described above had a negative impact on earnings performance in the second quarter in the cumulative amount of EUR -3.288 million. The first half of 2023/2024 also had fewer working days than the same period in the previous year. Moreover, losses were incurred in the Physical Engineering segment, especially in connection with the new
test centres. To compensate for these negative effects on earnings, cost-cutting measures with a short-term effect, such as personnel capacity adjustments in Germany, were introduced. In addition, all expenditure is checked for absolute necessity.
At EUR -4.057 million, net finance income in the first half of 2023/2024 was more negative than in the same period of the previous year (EUR -3.294 million). The increase in interest rates compared to the previous period is reflected in both interest income and finance expense.
Profit from ordinary activities after closure of the reporting period of the first half of 2023/2024 was EUR 17.902 million (previous year EUR 20.704 million). With an income tax rate of 26.3% in the first half of 2023/2024 (H1 2022/2023: 28.4%), post-tax earnings came to EUR 12.222 million in the reporting period (H1 2022/2023: EUR 13.963 million).
10 Bertrandt Report on the 1st half
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Bertrandt AG published this content on 15 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 04:27:01 UTC.
