GERMANY: ElringKlinger posts 2014 EUR1.3bn sales revenue
Based on preliminary data, the ElringKlinger Group recorded sales revenue of EUR1.32bn (US$1.41bn) in the 2014 financial year.
Organically, that is, eliminating the effects of foreign currency translation and changes in the scope of consolidation, sales revenue increased by 11.2%, despite the malaise afflicting vehicle markets in both Brazil and Russia.
ElringKlinger benefited from strong structural growth in many of its product groups aimed at CO2 reduction and expanded at a percentage rate that was in excess of growth in terms of global vehicle production.
The full consolidation of ElringKlinger Marusan Corporation contributed EUR23.1m to Group revenue in 2014.
- Revenue increases by 15.3% – organically by 11.2% – to EUR 1,325.8 million
- Adjusted EBIT before purchase price allocation (EUR 3.4 million) at EUR 162.3 million
- Outlook for 2015: organic revenue growth of 5 to 7% plus acquisitions; EBIT before purchase price allocation projected at between EUR 170 and 180 million
Based on preliminary data, the ElringKlinger Group recorded sales revenue of EUR 1,325.8 (1,150.1) million in the 2014 financial year. Organically, i.e. eliminating the effects of foreign currency translation and changes in the scope of consolidation, sales revenue increased by 11.2%, despite the malaise afflicting vehicle markets in both Brazil and Russia. ElringKlinger benefited from strong structural growth in many of its product groups aimed at CO2 reduction and expanded at a percentage rate that was well in excess of growth in terms of global vehicle production. The full consolidation of ElringKlinger Marusan Corporation contributed EUR 23.1 million to Group revenue in 2014.*
It should be noted that ElringKlinger had generated a one-time gain of EUR 17.6 million in 2013 following the assumption of control of the 50:50 joint venture ElringKlinger Marusan Corporation effective from December 31, 2013.
The operating result rose to EUR 154.0 million in 2014. Adjusted for the one-time gain of EUR 17.6 million from the assumption of control of Marusan, the comparative prior-year figure was EUR 146.6 million (including one-time gain: EUR 164.2 million).
Group EBIT, adjusted for non-recurring items and before purchase price allocation, stood at EUR 162.3 (149.8) million, up 8.3% on the previous year; this corresponds to a margin of 12.2%. Due to current demand patterns, the new E-Mobility division fell well short of the original target and recorded a loss of EUR 8.1 (loss of 7.3) million. In total, one-off exceptional charges of EUR 4.9 million had a dampening effect: as part of the plant relocation to the newly constructed site in Gumi, the subsidiary ElringKlinger Korea Co., Ltd. had to carry out inventory corrections and adjustments of EUR 2.0 million. A warranty incident attributable to the parent company, ElringKlinger AG, and dating back to 2008 was definitively settled in the reporting period and there are no longer any risks associated with this matter. In this context, a sum of EUR 1.5 million in receivables had to be derecognized, which was accounted for in profit/loss. At the same time, ElringKlinger received cash of EUR 8.5 million as a result of the insurance payment. As part of the amendments to Management Board contracts of service, a one-time amount of EUR 1.4 million had to be allocated to provisions in respect of long-term variable incentive components of compensation (LTI II) that are attributable in economic terms to the two previous years.
Compared to the prior-year figure, adjusted for the one-time gain from the assumption of control of Marusan, earnings before taxes rose by 16.6% to EUR 153.1 million (EUR 131.3 million, including one-time gain: EUR 148.9 million). This was driven largely – primarily as a result of foreign exchange gains – by lower net finance costs of EUR 0.9 (15.3) million.
Order backlog 15.6% up on previous year
ElringKlinger saw its order intake expand by 10.5%, or 8.3% organically, in 2014. In absolute terms, order intake rose to EUR 1,418.6 (1,284.4) million, which was well in excess of sales revenue. As of December 31, 2014, order backlog exceeded the previous year's figure by 15.6%, taking it to EUR 688.2 (595.4) million.
Further revenue and earnings growth planned for 2015
ElringKlinger anticipates that global car production will expand by around 2% in 2015 as a whole. Based on this assumption, the Group is targeting organic revenue growth of 5 to 7%. Additionally, the consolidation of recently acquired M&W Manufacturing Inc., USA (in future "ElringKlinger Automotive Manufacturing Inc.") will contribute around EUR 30 million to Group revenue in the financial year as a whole.
Due to the greater relevance of acquired entities, adjusted EBIT will in future be presented before the effects of purchase price allocation. Adjusted for non-recurring items, EBIT before purchase price allocation is expected to be between EUR 170 and 180 million in 2015. Due to current demand patterns, from today's perspective, the E-Mobility division is not likely to see a fundamental improvement in its earnings performance in 2015.
With regard to the publication of preliminaries for fiscal 2014 a conference call will be held today, March 2, 2015, at 10:00 CET. The full announcement of the definitive, audited results for fiscal 2014 is scheduled for March 31, 2015.
* Due to the necessary retrospective application of IFRS 11 as regards the presentation of comparative prior-year figures (2013), the joint venture ElringKlinger Marusan Corporation was no longer accounted for on a proportionate basis but rather in accordance with the equity method. As a result, the Group revenue figure originally presented for 2013 was retrospectively reduced to EUR 1,150.1 million, the difference being attributable to the entity's revenue contribution (EUR 25.1 million) formerly included at a proportionate rate of 50%. Thus, EBIT presented here was EUR 0.7 million lower retrospectively, while earnings before taxes were EUR 0.3 million lower retrospectively. In the fourth quarter of 2013, Group revenue was thus reduced retrospectively by EUR 5.7 million to EUR 285.4 million.
Original source: http://www.elringklinger.de/en/adhoc-en-020315