The turnover in the first half of 2022 increased by € 173.9 million (+24.0%) to a record level of € 899.7 million. Price effects had an upward impact of 7.0% on turnover, while exchange rates had an upward impact of 1.3%. On balance, TKH recorded a 15.7% organic increase in turnover. Geopolitical situation, supply chain imbalances and lockdowns in China had a limited negative impact on turnover of approximately € 10 million, mainly in the second quarter.
The gross margin decreased to 47.0% (H1 2021: 48.2%) due to a shift in the product mix with a smaller share for Smart Vision systems, combined with increased raw material and component prices. Although price increases had a negative effect, we were able to minimize this, as we pass on most price increases.
Operating expenses increased by 15.8%, of which 1.5% was related to foreign exchange rates. Selling expenses were almost back to pre-COVID-19 levels, partly due to the increase of travel and outgoing freight costs. As a percentage of added value, operational costs decreased from 75.9% in H1 2021 to 72.7% in H1 2022 due to economies of scale. Depreciation came in at € 23.5 million, € 1.4 million above the level in the first half of 2021, mainly due to investments in our production capacity during recent years.
The operating result before amortization of purchase price allocations (intangible assets) and one-off income and expenses (EBITA) increased by 37.0% to € 115.6 million in H1 2022, from € 84.4 million in H1 2021. All technology segments positively contributed to the increase in EBITA: Smart Vision systems (+10.7%), Smart Manufacturing systems (+92.7%), and Smart Connectivity systems (+26.8%).
ROS increased to 12.8% in the first half of 2022 (H1 2021: 11.6%) due to the turnover growth and a lower relative cost level. The strongest ROS increase was noted in Smart Manufacturing systems.
One-off income of € 9.3 million was realized from the divestment of two properties that were held for sale.
Amortization increased by 6.1% due to higher amortization of capitalized R&D, as a result of increasing investment levels during prior years, whereas the amortization on PPAs from acquisitions is declining.
The financial result was stable at € 3.5 million expense. The improved result from associates was offset by foreign exchange losses in H1 2022.
The normalized effective tax rate decreased to 26.3% in the first half of 2022, from 28.4% in the first half of 2021, primarily due to relatively higher profits at companies benefitting from R&D tax facilities.
Net profit before amortization and one-off income and expenses attributable to shareholders increased significantly by 42.7% to € 70.5 million (H1 2021: € 49.4 million). Total net profit amounted to € 70.0 million, showing an increase of 74.2% compared to the same period a year earlier (H1 2021: € 40.2 million).
Net debt, calculated in accordance with the bank covenants, increased compared to year-end 2021 by € 196.3 million to € 401.8 million. The increase is mainly related to the dividends paid, combined with higher working capital. On June 30, 2022, working capital as a percentage of turnover stood at 20.4%, substantially higher than on June 30, 2021 (11.5%). This was mainly due to a higher activity level, the (temporary) buildup of inventories to secure supply chains, the higher price level of most inventory items, and higher contract assets due to higher production volumes. Working capital was also impacted by the delays in the completion of projects related to the shortage of essential components. In comparison, working capital was lowered last year due to temporary deferrals of VAT and wage tax payments.
The net-debt/EBITDA ratio stood at 1.6 as at June 30, 2022, well within the financial ratio agreed with the banks. Solvency amounted to 38.5% (H1 2021: 40.3%).
The number of permanent employees (FTEs) grew to 6,028 as at June 30, 2022 (end of 2021: 5,784 FTEs). In addition, TKH had 462 temporary employees as at June 30, 2022 (end of 2021: 376).