Dettingen/Erms (Germany), March 29, 2012 +++ In 2011, the ElringKlinger Group yet again outpaced global vehicle production in terms of percentage growth. The Group saw its sales revenue expand by 29.8% to EUR 1,032.8 (795.7) million. Earnings before interest and taxes exceeded the previous year's figure by 39.4%, rising to EUR 148.7 (106.7) million. Net income after minority interests increased at a more pronounced rate, up 44.7% to EUR 94.9 (65.6) million.
Strongest growth in Original Equipment segment
Benefiting from the rise in global car production by around 4% in 2011 and the introduction of a number of new products, the Original Equipment segment recorded revenue growth of 36.3%, taking sales to EUR 827.2 (606.9) million. The buoyant growth in sales was also fueled by acquisitions transacted in 2011, whose business activities were almost entirely attributable to the Original Equipment segment. The Aftermarket segment generated forward momentum mainly within the international markets, thereby lifting sales revenue by 5.4% to EUR 112.9 (107.1) million.
Financial year dominated by acquisitions and sale of industrial park
In total, first-time inclusion of the metal flat gaskets business acquired from the Freudenberg Group, the Swiss exhaust treatment specialist Hug Engineering AG and the Hummel-Formen Group contributed EUR 83.7 million to Group revenue. At minus EUR 5.0 million, earnings before taxes contributed by the acquired entities were as yet in negative territory. This figure included EUR 2.2 million relating to purchase price allocations. The non-recurring negative purchase price allocation attributable to Hummel in the fourth quarter amounted to EUR 0.5 million.
In August 2011, ElringKlinger AG disposed of its Ludwigsburg industrial park, as it no longer formed an integral part of the automotive supplier's core business. The sale resulted in a one-time gain of EUR 22.7 million for the Group, which was accounted for in other operating income.
Significant R&D costs for new products in core business and E-Mobility
ElringKlinger expended EUR 49.9 (40.6) million on research and development, a significant increase compared to the previous financial year. Within this context, the E-Mobility division, newly established in 2010, underwent considerable expansion. Over the course of the year ElringKlinger secured a number of additional development contracts from several vehicle and battery manufacturers for the company's cell contact systems used in lithium-ion batteries. The first systems for hybrid vehicles went into serial production in mid-2011.
Whereas general and administrative expenses as well as selling expenses rose at a slower rate, other operating expenses surged by 107.1% to EUR 11.6 (5.6) million. Of this total, an amount of EUR 9.1 million alone was attributable to the fourth quarter.
One-time write-downs in fourth quarter
Driven in particular by significant investments within the Group, depreciation, amortization and write-downs rose to EUR 96.8 (82.2) million. Additionally, depreciation and write-downs of property, plant and equipment included a one-time impairment loss of EUR 1.5 million recognized in the fourth quarter in respect of merger surpluses. This was attributable to the first-time inclusion of Elring Klinger GmbH in the consolidated financial statements of the former parent company ZWL Grundbesitz- und Beteiligungs-AG completed back in the year 1998. Additionally, losses on the disposal of assets and write-downs attributable to receivables accounted for a total of EUR 4.1 million in the fourth quarter.
As part of the extension of Management Board contracts finalized in December 2011, pension provisions were adjusted in the fourth quarter. As a result, general and administrative expenses increased by a one-time amount of EUR 0.8 million. More extensive flexitime accounts as a result of higher capacity utilization necessitated an increase in provisions in the fourth quarter.
The Group's operating result for the full year rose by EUR 35.1 million year on year to EUR 151.1 (116.0) million, despite the effects of noticeably higher commodity prices. This figure included the above-mentioned income from the sale of the industrial park. Without this item, the operating result would have been EUR 128.4 million. This figure includes a charge of EUR 2.2 million relating to the purchase price allocation for the acquisitions.
Adjusted EBIT at EUR 126.0 million
Earnings before interest and taxes (EBIT), which in contrast to the operating result takes account of foreign exchange gains and losses, were adversely affected by net foreign exchange losses of EUR 2.4 million in 2011. Thus, EBIT rose by 39.4% to EUR 148.7 (106.7) million. Adjusted for the one-time gain, Group EBIT rose by 18.1% to EUR 126.0 million. Adjusted EBIT before purchase price allocation stood at EUR 128.2 million.
Despite net foreign exchange losses of EUR 2.4 million, net finance costs fell to EUR 14.5 (22.1) million. As a result, earnings before taxes for the ElringKlinger Group amounted to EUR 136.6 (94.0) million. Compared to the previous financial year, this represents an increase of 45.3%. The tax rate rose to 28.6% (27.0%).
Net income after minority interests grows by 44.7%
Net income rose by 42.3% year on year to EUR 97.6 (68.6) million. As a result of the purchase of minority interests by ElringKlinger AG in 2011, profit attributable to non-controlling interests was scaled back. Therefore, net income after minority interests (i.e. profit attributable to the shareholders of ElringKlinger AG) increased by a slightly more pronounced rate, rising by 44.7% to EUR 94.9 (65.6) million. Correspondingly, earnings per share stood at EUR 1.50 (1.11) in 2011; this was based on a figure of 63,359,990 shares outstanding, which was higher than in the previous year as a result of the seasoned equity offering of October 2010.
Dividend with special bonus
As a result of the one-time gain from the sale of the Ludwigsburg industrial park in August 2011, net income for the ElringKlinger Group as a whole was boosted by an additional EUR 16.5 million in 2011, having accounted for deferred taxes. Beyond the proposed regular dividend of EUR 0.40 (0.35) per share for the financial year 2011, shareholders are also to benefit from the aforementioned one-time gain. This is to be implemented in the form of an additional special bonus of EUR 0.18 per share. On this basis, the Management Board and the Supervisory Board will propose to the Annual General Meeting resolving on the 2011 financial year a total dividend of EUR 0.58 (0.35) per share, which represents a year-on-year increase of 65.7%. Compared with the previous year, the total dividend to be distributed will rise by EUR 14.5 million to EUR 36.7 (22.2) million.
Double-digit growth in order intake repeated in fourth quarter
Business for the ElringKlinger Group remains solid in terms of orders in hand. Order intake rose by 22.8% to EUR 1,089.0 (886.6) million in 2011. At EUR 272.6 (227.3) million, order intake for the fourth quarter of 2011 was again up on the figure recorded in the buoyant final quarter of 2010. Order backlog for the ElringKlinger Group totaled EUR 448.4 (333.1) million as at December 31, 2011. This represents an increase of 34.6% on the previous year's figure.
Revenue and EBIT, before one-time effects, to expand further in 2012
The ElringKlinger Group anticipates that global vehicle production will expand slightly in 2012. Against this backdrop, the Group plans to raise sales revenue by 5 to 7% in 2012 in terms of organic growth. Within this context, it should be noted that the level of revenue growth achieved in fiscal 2011 was significantly higher than originally forecast. An additional revenue contribution of around EUR 20 million is expected from the consolidation of recently acquired Hug Engineering AG and Hummel-Formen Group, which for the very first time will be included in the consolidated group for a full annual period in 2012. The consolidated entities acquired will see an improvement in their overall earnings situation in 2012, having as yet contributed negative aggregate earnings in the 2011 financial year. However, the EBIT margin of the Group's core business will be diluted to some extent as a result of the as yet weaker margins recorded by the acquired entities and the purchase price allocations associated with these acquisitions as well as the lead costs incurred in the field of battery technology. Despite these effects, ElringKlinger anticipates that EBIT, adjusted for non-recurring items, will grow faster than sales revenue in percentage terms. Group EBIT adjusted for non-recurring items is expected to be in a range of EUR 145 to 150 million (EUR 126.0 million in fiscal 2011) in 2012.