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MarketScreener Homepage  >  Equities  >  Euronext Amsterdam  >  Kendrion N.V.    KENDR   NL0000852531


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09:22aKENDRION N.V. : There is still some upside potential
2020KENDRION N.V. : Crossing thresholds
2020KENDRION N : Third quarter results 2020
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Kendrion N : Annual results 2019

02/18/2020 | 05:50am EST

18 February 2020

Annual results 2019 Kendrion posts strong cash flow and adds significantly to order book in tough market that affects Q4 and full-year results
  • Full-year revenue of EUR 412.4 million, down 8% compared with 2018 (EUR 448.6 million)
  • Normalised 2019 EBITDA decreased by 26% to EUR 43.4 million (2018: EUR 58.5 million); EBITDA margin of 10.5% (2018: 13.0%)
  • Normalised EBITDA for Q4 2019, 28% lower at EUR 7.2 million (Q4 2018: EUR 9.9 million); EBITDA margin of 7.8% (Q4 2018: 9.8%)
  • Net profit (normalised) of EUR 10.6 million in 2019 (FY 2018: 22.6 million)
  • Strong normalised free cash flow of EUR 25.5 million (2018: EUR 10.5 million)
  • Nominated lifetime revenues in Automotive of EUR 320 million (2018: EUR 340 million), book-to-bill of 1.25
  • Year-on-year revenue growth in China of 29%
  • Acquisition of INTORQ completed on 8 January 2020
  • Proposed dividend of EUR 0.25 per share; pay-out ratio 35% of normalised full-year net profit
Key figures
Reported (in EUR million) Q4 2019 Q4 2018 Delta FY 2019 FY 2018 Delta
Revenue 92.3 101.9 -9% 412.4 448.6 -8%
EBITDA 3.8 7.6 -50% 37.7 49.7 -24%
EBITA (2.2) 1.9 -216% 13.7 26.6 -48%
Net profit (3.0) (1.8) -67% 7.9 13.8 -43%
EBITDA as a % of revenue 4.1% 7.5% 9.1% 11.1%
EBITA as a % of revenue -2.4% 1.9% 3.3% 5.9%
Return on invested capital (12 months rolling) 5.1% 9.6%
Normalised (in EUR million) Q4 2019 Q4 2018 Delta FY 2019 FY 2018 Delta
Revenue 92.3 101.9 -9% 412.4 448.6 -8%
EBITDA 7.2 9.9 -28% 43.4 58.5 -26%
EBITA 1.2 4.2 -72% 19.4 35.4 -45%
Net profit (0.3) 2.2 -113% 10.6 22.6 -53%
EBITDA as % of revenue 7.8% 9.8% 10.5% 13.0%
EBITA as % of revenue 1.3% 4.2% 4.7% 7.9%
Return on invested capital (12 months rolling) 7.1% 12.4%
Normalised items (after tax) 2.7 4.0 2.7 8.8

Normalised in Q4 2019: EUR 2.2 million (EUR 1.6 million after tax) restructuring costs, EUR 1.2 million (EUR 0.9 million after tax) acquisition costs and EUR 0.2 million interest and income tax expense related to tax audit.

Normalised in Q4 2018: EUR 2.3 million (EUR 1.7 million after tax) restructuring costs and EUR 2.3 million interest and income tax expense related to tax audit.

Normalised in FY 2019: Total EUR 5.7 million (EUR 2.7 million after tax) existing of EUR 1.6 million (EUR 1.2 million after tax) claim settlement, EUR 2.0 million positive release from currency translation reserve, EUR 0.5 million interest and tax expense related to tax audit, EUR 2.9 million (EUR 2.1 million after tax) restructuring costs and EUR 1.2 million (EUR 0.9 million after tax) acquisition costs.

Normalised in FY 2018: EUR 8.8 million (EUR 6.5 million after tax) restructuring costs and EUR 2.3 million interest and income tax expense related to tax audit.

Joep van Beurden, Kendrion CEO:
'As trade tensions and their broader impact on consumer confidence persisted, our markets continued to be weak. In Automotive, global vehicle production was 89 million in 2019, 6% lower than in 2018, and the German Manufacturing Purchase Managers Index (PMI) hit a 10-year low in September 2019. This affected our 2019 revenue, which at EUR 412.4 million came in 8% lower than in 2018.

The revenue decline has put our results under pressure, and in response we have continued to streamline our organisation. As previously announced, we have realised further efficiency improvements of EUR 5.0 million on a yearly basis as of the start of 2020. We have also reduced our working capital, limited investments only to those projects driving future growth and generated a record normalised free cash flow of EUR 25.5 million.

Despite the difficult trading environment, we continue to invest in our focus areas of Automotive, IndustrialBrakes and China, as we firmly believe in the longer-term prospects of our business. In Automotive, we added EUR 320 million of lifetime revenues to our order book on top of the EUR 340 million we added in 2018. Our healthy project pipeline is a strong leading indicator of future growth. In China, several projects in our pipeline started mass production in 2019, leading to year-on-year revenue growth of 29%.

In Industrial Brakes the acquisition of INTORQ GmbH & Co. KG, a global market leader in spring-applied brakes was completed on 8 January 2020. With this acquisition Kendrion now offers a complete product offering of permanent magnet brakes and spring-applied brakes to customers in Europe, the USA, China and India. The acquisition changes the nature of the Kendrion Group. We now have approximately 55% of our revenues in Automotive, and 45% in Industrial segments. About 80% of our revenue is in segments in which we invest for organic growth, and 20% in markets more focused on cash generation. We have started the integration of INTORQ and expect to present a strategic and financial update of the enlarged Kendrion organisation on 18 August 2020 as we announce our first-half 2020 results. This will include updated medium-term financial targets, fully reflecting the INTORQ acquisition.

Looking ahead, we see our markets stabilising albeit at a lower level than in early 2019. The effects of the COVID-19 corona virus on our business are limited to date. However, the impact on the global economy is uncertain and has the potential to be severe.

We are confident in our ability to grow both our revenue and profitability in a sustainable way, with our simplified, leaner organisation, our improved balance between Automotive and Industrial, our pipeline momentum, strong financial position and underlying business fundamentals.'

Progress on strategy

Kendrion has built a robust and lean organisation with a strong financial position, maintaining a focus on operational effectiveness and cost levels. In the fourth quarter, additional savings in indirect staff costs were realised, yielding about EUR 5.0 million per year as of January 2020. We have identified a further EUR 0.5 million in savings, to be implemented in the first half of 2020. Total corresponding one-off costs are expected to be EUR 3.5 million, of which EUR 2.9 million were recorded in 2019. This brings the total annualised savings since the start of our simplification programme in 2016 to about EUR 25 million.

We continue to invest in our three focus areas: Automotive, Industrial Brakes and China, and we took significant steps forward in each.

In Automotive, we made progress with our five 'Lighthouse' platforms. These platforms include highly innovative new automotive actuators, designed to help enable Autonomous, Connected, Electric and Shared mobility (ACES). On the back of these innovations and other products, we added EUR 320 million (2018: EUR 340 million) in nominations to our Automotive order book, which is a book-to-bill ratio of 1.25 (2018: 1.2). Of these nominations, 65% is independent of combustion engines.

In Industrial Brakes, our recent acquisition of INTORQ was completed on 8 January 2020. We expect the acquisition to strengthen our position in this important growth market in Europe, the USA, China and India. The integration process has started and is going according to plan. As of 1 April 2020, INTORQ and Industrial Drive Systems will be combined into one 'Industrial Brakes' business unit.

As of 1 January 2020, we have merged Industrial Magnetic Systems (IMS) and Industrial Control Systems (ICS) into one combined business unit named Industrial Actuators and Controls (IAC). As a result, the Kendrion Group will be organised into three business units: The Automotive Group (AG), Industrial Brakes (IB) and Industrial Actuators and Controls (IAC).

In China, where all our business units are active, our performance was strong. Our revenue grew by 29% year-over-year, despite headwinds in the Chinese economy. Based on our pipeline we expect organic growth to be somewhat lower in 2020, with continued strong growth as from 2021 when two large new automotive projects will start production. We continue to invest in production lines, our local supply chain and workforce to build and train our Chinese team to accommodate this growth.

With INTORQ now part of the Kendrion Group, our revenue mix has changed. The Automotive Group represents about 55% of Group revenue, Industrial Brakes around 25% and Industrial Actuators and Controls around 20%. AG and IB focus on organic growth, IAC on profitability and cash generation.

Financial review


Fourth quarter of 2019
Revenue in the fourth quarter of 2019 came in at EUR 92.3 million, a decrease of 9% compared with Q4 2019 (10% at constant exchange rates), which was the result of a decrease of 6% in Automotive and a decrease of 16% in Industrial compared with Q4 last year. The pace of decline in Automotive activities slowed down somewhat, as the year-on-year comparables eased. In Industrial, the global economic slowdown was felt with lower industrial manufacturing activity combined with destocking, especially towards the end of 2019.

Full-year 2019
Compared with full-year 2018, revenue decreased by 8% (9% at constant exchange rates) to EUR 412.4 million, with the Automotive activities declining by 9% (10% at constant exchange rates) and Industrial activities by 7% (7% at constant exchange rates). Revenue in our Chinese operations increased by 29% compared with 2018, while revenue in our European and US activities decreased by 10% and 12%, respectively.


Fourth quarter of 2019
Fourth-quarter results were affected by the sharp decline in revenue in the Automotive and Industrial activities. The operating costs before depreciation decreased by 6% (EUR 2.1 million) compared with Q4 2018 due to cost measures implemented in 2018 and strict cost control. The reduced cost base did not fully offset the impact from lower revenues and, as a result, normalised EBITDA fell by 28% to EUR 7.2 million (Q4 2018: EUR 9.9 million). Normalised EBITDA as a percentage of revenue decreased from 9.8% in Q4 2018 to 7.8% in Q4 2019. Normalised EBITA amounted to EUR 1.2 million (2018: EUR 4.2 million).

Normalised EBITA was adjusted for EUR 3.4 million operating expenses (2018: EUR 2.3 million) which included EUR 1.2 million in transaction costs related to the acquisition of INTORQ and EUR 2.2 million in one-off costs related to the EUR 5.0 million cost-saving programme.

Full-year 2019
Normalised EBITDA for the full-year 2019 decreased 26% to EUR 43.4 million (2018: EUR 58.5 million). The normalised EBITDA margin decreased from 13.0% in 2018 to 10.5% in 2019. Normalised EBITA for the year ended up at EUR 19.4 million (2018: EUR 35.4 million). Full-year normalised EBITA was adjusted for EUR 5.7 million operating expenses (2018: EUR 8.8 million), which included an out-of-court settlement with a US supplier of EUR 1.6 million in the second quarter and EUR 0.7 million one-off costs related to the cost-saving programme incurred in the third quarter.

Normalised net finance costs decreased to EUR 2.5 million (2018: EUR 2.8 million) due to lower average credit spreads applicable to Kendrion's credit facility. Reported finance expenses were EUR 0.6 million and include a one-off currency translation gain of EUR 2.0 million.

The normalised income tax expense amounted to EUR 3.8 million (2018: EUR 7.6 million). The normalised effective income tax rate for 2019 was 26.2% (2018: 25.0%). The reported tax rate in 2019 was 25.0% compared with 34.6% in 2018. The reported effective tax rate in 2018 was affected by the estimated impact of the tax audits in Germany. The reported tax expenses in 2019 include a EUR 0.4 million increase in the tax liability related to the expected outcome of the German tax audits and EUR 1.5 million tax impact of one-off costs and income that have been normalised in the results.

Normalised net profit in 2019 decreased to EUR 10.6 million (2018: EUR 22.6 million). Normalised basic earnings per share amounted to EUR 0.79 (2018: EUR 1.69). Reported net profit was EUR 7.9 million and included the EUR 2.7 million net of tax impact of the one-off cost items and income adjusted in the normalised results.

Financial position

Normalised free cash flow, before payments related to one-off items that have been normalised in the results, amounted to EUR 25.5 million in 2019 (2018: EUR 10.5 million). Reported free cash flow was EUR 21.0 million (2018: EUR 2.7 million). The positive cash flow is the result of relentless focus during the year and was carried by improvements in all elements of our working capital. Total investments were EUR 19.8 million, EUR 4.2 million below depreciation. Investments in Automotive were 6% above depreciation, while the Industrial activities could reduce investment levels compared with the high investment programmes in the past two years.

On 21 November 2019, Kendrion raised EUR 31.1 million through an accelerated bookbuild offering of ordinary shares intended to help finance the acquisition of INTORQ. The net proceeds of the equity offering were EUR 30.5 million and reduced the debt position per 31 December 2019. Normalised free cash flow reduced net debt by EUR 25.5 million, which was largely offset by payments for dividend, share repurchase programmes and payments related to one-off costs that have been normalised in the results. In total, the net debt position decreased by EUR 33.1 million to EUR 47.4 million at year-end 2019.

Kendrion's financial position remains strong with a solvency ratio of 56.8% at the end of 2019 (year-end 2018: 48.5%).

The pro forma solvency at year-end, including the financial impact of INTORQ, is approximately 44%. The pro forma net debt, including INTORQ, at year-end is EUR 127.4 million. The pro forma availability under Kendrion's credit lines at year-end was EUR 65 million, including a EUR 20 million temporary bridge financing facility that matures in June 2020.

Number of employees

The number of employees (in FTEs) decreased by 73 in the fourth quarter to 2,316 at year-end (including 63 temporary employees). This represents a decrease of 149 FTEs relative to year-end 2018 (2,465 FTEs, including 65 temporary employees). In China, our workforce amounts 190 employees, up from 160 a year ago, to facilitate the substantial growth in our Suzhou factory.

Operational performance

Industrial activities

In 2019, the Industrial activities consisted of Industrial Magnetic Systems (IMS), Industrial Control Systems (ICS) and Industrial Drive Systems (IDS). INTORQ will be consolidated in the Group as of 8 January 2020 and will be integrated with IDS and become the business unit 'Industrial Brakes' (IB) on 1 April 2020. On 1 January 2020, IMS and ICS were merged into 'Industrial Actuators and Controls' (IAC).

Industrial activities, which accounted for 37% of Kendrion's revenue, experienced a 7% decrease in revenue to EUR 153.6 million compared with EUR 164.7 million in 2018.

Industrial manufacturing activity in our main markets was somewhat resilient in the first six months of 2019, compared with 2018, but decreased markedly in the second half of the year and especially during Q4 of 2019. Germany, which is the most important market for Kendrion's industrial activities, was affected by a reduction in industrial manufacturing activity levels. The German Manufacturing Purchase Managers Index reached a level of 41.7 in September 2019, a 10-year low. All three Industrial business units felt the weaker market. Revenues exposed to the German machine-building market were especially affected, with revenue in other market segments, such as medical, aviation and infrastructure, more stable.

Towards the end of 2019, we also experienced destocking at many of our industrial customers. Revenue in Industrial Magnetic Systems decreased 7% (2018: 4.0%), in Industrial Control Systems 9% (2018: 12% increase) and 5% in Industrial Drive Systems (2018: 1% increase).

Operating costs decreased by EUR 1 million in 2019, as our cost reduction measures more than offset the annual salary increases. Overall, the normalised EBITA margin for Kendrion's Industrial activities decreased to 7.8%, compared with 11.8% in 2018. The 2018 EBITA margin has been restated for comparability reasons.

Automotive activities

As of 1 January 2019, the former business units Passenger Cars and Commercial Vehicles and the central corporate function were combined into a centralised functional Automotive organisation, reporting to Kendrion's Executive Board.

Revenue for the Automotive activities - which account for 63% of Kendrion's revenue - amounted to EUR 258.8 million in 2019 (2018: 283.9 million). General market conditions for Automotive, which deteriorated from the second half of 2018, remained challenging throughout 2019. Market analysts estimate that the total number of cars produced in 2019 was about 6% less than in 2018, with especially reduced car production in China and Germany. The weakening truck market in the USA and Europe also had an impact on revenue, especially in the fourth quarter of 2019.

We continued to invest in new customer projects, with capital expenditure including production lines for a particle filter valve line in China, the finalisation of the piston cooling valve line in Germany and the finalisation of a production line for a new active damping project in Austria.

Total operating costs, including depreciation, decreased EUR 5.1 million in 2019, as our cost reduction measures more than offset the annual salary increases and a EUR 0.9 million negative currency impact mainly because of the stronger US dollar.

Overall, the normalised EBITA margin for Kendrion's Automotive organisation decreased to 2.9%, compared with 5.6% in 2018. The 2018 EBITA margin has been restated for comparability reasons.


Kendrion aims to deliver an attractive return for its shareholders while simultaneously considering the company's medium and long-term strategy. The company strives to distribute an annual dividend of between 35% and 50% of its net profit. Considering the INTORQ acquisition during 2019, Kendrion proposes a dividend of 35% of the normalised net profit of EUR 10.6 million, equivalent to EUR 0.25 per share.

Kendrion offers shareholders an opportunity to opt for dividend in cash and/or in shares. The conversion price for the calculation of the stock dividend will be determined on 28 April 2020 (before the start of trading) on the basis of the weighted average share price on 21, 22, 23, 24 and 27 April 2020, for which purposes the value of the shares to be distributed will be virtually equal to the cash dividend. The dividend will be made payable on 30 April 2020.


Looking ahead, we see our markets stabilising, albeit still at a lower level than in early 2019. The effects of the COVID-19 corona virus on our business are limited to date. However, its impact on the global economy is uncertain and has the potential to be severe. We continue to see ample growth opportunities in our focus areas of Automotive, Industrial Brakes and China in the medium to longer term. We remain positive about our business fundamentals, with our main objective being to deliver sustainable profitable growth.

We expect 2020 investments to be in line with depreciation as we continue to focus on cash flow and prioritise investments that contribute to future growth, especially in the three areas of focus.

We expect to present a strategic and financial update of the enlarged Kendrion, including INTORQ, on 18 August 2020 as we announce the first-half 2020 results. This will include updated medium-term financial targets, fully reflecting the INTORQ acquisition.

Audio webcast Q4 and full-year results 2019

Kendrion CEO Joep van Beurden and CFO Jeroen Hemmen will present the Q4 and full-year results on Tuesday, 18 February 2020, at 11:00 a.m. CET. A live audio webcast will be available via the company website www.kendrion.com with playback facilities.

Capital Markets Day

Kendrion intends to organise a Capital Markets Day for analysts and investors on Tuesday, 18 August 2020, the publication date of the half-year results, in Amsterdam. More details and an official invitation will follow in due course.

Profile Kendrion N.V.

Kendrion develops, manufactures and markets high-quality electromagnetic systems and components for industrial and automotive applications. For more than a century, we have been engineering precision parts for the world's leading innovators in passenger cars, commercial vehicles and industrial applications. As a leading technology pioneer, Kendrion invents, designs and manufactures complex components and customised systems as well as local solutions on demand.

We are committed to the engineering challenges of tomorrow, and taking responsibility for how we source, manufacture and conduct business is embedded into our culture of innovation. Rooted in Germany, headquartered in the Netherlands and listed on the Amsterdam stock exchange, Kendrion's expertise extends across Europe, to the Americas and Asia. Created with passion and engineered with precision.

Amsterdam, 18 February 2020

The Executive Board


For annexes we refer to the attached pdf document.

1. Consolidated statement of comprehensive income
2. Condensed statement of financial position
3. Consolidated statement of changes in equity
4. Consolidated statement of cash flows
5. Information about reportable segments
6. Reconciliation of normalised to reported 2019 figures
6. Financial calendar 2020-2021

The 2019 financial information included in the Annexes from Consolidated Financial Statements attached to this press release are derived from the Annual Integrated Report 2019, which has been authorised for issue. The Annual Integrated Report has not yet been published by law and still has to be adopted by the Annual General Meeting on 6 April 2020.

^For moreinformation
Joep van Beurden


Kendrion N.V.
Group Services
Vesta Building 5th floor - Herikerbergweg 213
1101 CN Amsterdam
The Netherlands

Phone: +31 85 073 1500
  • > Email


Kendrion NV published this content on 18 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 February 2020 10:49:08 UTC

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Sales 2020 386 M 469 M 469 M
Net income 2020 1,00 M 1,22 M 1,22 M
Net Debt 2020 119 M 145 M 145 M
P/E ratio 2020 66,6x
Yield 2020 -
Capitalization 285 M 347 M 347 M
EV / Sales 2020 1,05x
EV / Sales 2021 0,94x
Nbr of Employees 2 428
Free-Float 93,8%
Duration : Period :
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Technical analysis trends KENDRION N.V.
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Income Statement Evolution
Mean consensus HOLD
Number of Analysts 3
Average target price 14,75 €
Last Close Price 19,30 €
Spread / Highest target -9,33%
Spread / Average Target -23,6%
Spread / Lowest Target -37,8%
EPS Revisions
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Joep A. J. van Beurden Chief Executive Officer
Henk ten Hove Chairman-Supervisory Board
Jeroen Hemmen Chief Financial Officer
Marion J. G. Mestrom Independent Member-Supervisory Board
Jabine T. M. van der Meijs Independent Member-Supervisory Board
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