ElringKlinger records organic growth of 5.4% in first quarter
- First-quarter revenue down 0.6% year on year in 2018 at EUR 431 million due to currency effects but up 5.4% in organic terms
- EBIT margin of 8.9% before purchase price allocation
- Earnings figures include gain on disposal of Hug Group, which was deconsolidated effective from March 1, 2018
- Guidance for 2018 confirmed
Dettingen/Erms (Germany), May 14, 2018 +++ ElringKlinger AG matched its prior-year performance with regard to both revenue and earnings in the first quarter of 2018. At EUR 430.7 million, revenue was slightly lower than in the same quarter a year ago. However, this was influenced to some extent by the absence of revenue from the Hug Group in March 2018, an entity that was deconsolidated effective from March 1, 2018. As regards the scope of consolidation, revenue contributions from the subsidiary hofer powertrain products GmbH, included in the consolidated group for the first time in February 2017, also have to be taken into consideration. In total, the effects on revenue from changes to the scope of consolidation were equivalent to EUR -4.2 million.
Additionally, the direction taken by foreign exchange rates had a dilutive effect on revenue, primarily in respect of the US dollar, the Swiss franc, and the Brazilian real. Calculated on the basis of stable exchange rates and taking into account the above-mentioned changes in the scope of consolidation, the Group saw revenue grow by 5.4% or EUR 23.2 million. On the basis of organic revenue growth, therefore, ElringKlinger significantly outperformed the automotive industry in terms of global vehicle production, which trended sideways to slightly lower year on year.
"The Group's strong revenue growth again illustrates how innovative and marketable our products are," concludes Dr. Stefan Wolf, CEO of ElringKlinger AG. "The same applies to our order book situation, taking currency effects into account: our order intake has grown yet again. Our order backlog is actually up by as much as 8.9% compared to the first quarter of 2017, and at more than EUR 1 billion it has reached a new all-time high."
Quarterly earnings reported by ElringKlinger also include a EUR 21.1 million gain on disposal of the Hug Group. This positive effect on profit was offset to some extent by several internal and external influencing factors: the rise in prices for key commodities such as aluminum and steel had a dilutive effect on earnings, as did the follow-on costs associated with unexpectedly high volumes ordered by customers in the NAFTA region as part of their production scheduling. In Switzerland, meanwhile, operational relocations largely progressed as planned. While finance costs rose to EUR 5.3 million, influenced to some extent by currency effects, net income for the period (after non-controlling interests) and earnings per share were both slightly up on the prior-year figures at EUR 25.7 (25.1) million and EUR 0.41 (0.40) respectively.
Given its solid order intake and backlog, the Group remains confident that it can outpace the expansion in global automobile production by 2 to 4 percentage points in terms of organic revenue growth. Turning to earnings, the first quarter of 2018 has seen no improvement in regard to exogenous factors influencing the current financial year. Commodity prices continue to rise and will again exert downward pressure on Group earnings in the current financial year. Additionally, it is impossible to rule out higher costs attributable to the introduction of tariffs. At the same time, the Group is committed to implementing optimization measures at its Swiss site as planned and streamlining cost structures associated with the sizeable volumes ordered by customers in the NAFTA region as part of their production scheduling. Taking these factors into consideration, too, the Group at present continues to anticipate that it will achieve an EBIT margin (before purchase price allocation) of around 9% in the current financial year, despite the fact that general conditions as a whole remain challenging.
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* Incl. gain from sale of Hug subgroup
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