DGAP-News: SHW AG / Key word(s): Preliminary Results/Final Results

2016-02-24 / 07:01
The issuer is solely responsible for the content of this announcement.


PRESS RELEASE

SHW AG: Result within target range - operating margin stabilises at previous year's level

- Group sales in the fiscal year 2015 up by 8 per cent to EUR 463.5 million

- EBITDA (adjusted) improves by 7 per cent to EUR 43.5 million

- Stabilised dividend of EUR 1.00 per share

Aalen, 24 February 2016. SHW AG, one of the leading automotive suppliers of CO2-relevant pumps and engine components as well as composite brake discs, published its preliminary, unaudited key performance indicators for the fiscal year 2015 today.

"We achieved major progress in the final stage of the fiscal year," says Dr Frank Boshoff, Chief Executive Officer of SHW. "We reduced the tailbacks further in the Powder Metallurgy at our Aalen-Wasseralfingen plant and in the pump assembly at our Bad Schussenried plant. I am positive that the measures to enhance capacity at our Aalen-Wasseralfingen plant will be implemented by the end of the first quarter 2016 as scheduled, thereby sustainably enhancing our profitability in the Pumps and Engine Components business segment."

Due to the lasting high level of customer call-offs - particularly in the Pumps and Engine Components business segment - in the fiscal year 2015, SHW was once again able to disconnect itself from the general market trend and boost its Group sales by 8 per cent to EUR 463.5 million (previous year: EUR 430.0 million). Incoming orders at the Group's domestic companies totalled EUR 445.0 million, almost reaching the previous year's record amount of EUR 453.5 million.

Adjusted consolidated earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) improved by 7 per cent from EUR 40.6 million to EUR 43.5 million and was therefore within the target range of EUR 42 million to EUR 46 million publicized last September. The corresponding margin of 9.4 per cent was at the previous year's level. The reported net income for the year was EUR 14.4 million, an increase of 34 per cent on the previous year's figure of EUR 10.7 million. Earnings per share came to EUR 2.26 (previous year: EUR 1.83).

Because of the stable business performance and the solid balance sheet structure, it is intended to propose an unchanged dividend of EUR 1.00 per share to the Annual General Meeting in Heidenheim on 10 May 2016.

Net liquidity position due to consequent cash management and capital increase

The Group had net liquidity of EUR 12.3 million as at 31 December 2015. This was an enhancement of EUR 26.7 million on the previous year.

In addition to the capital increase, the improvement in free cash flow from operating activities to EUR 18.1 million (previous year: EUR -5.4 million) helped to strengthen the cash base. Another progress was that working capital rose by just 5 per cent to EUR 32.5 million, which was less than the corresponding increase in sales. As a result, the working capital ratio - the ratio of working capital to Group sales in the last twelve months - fell once again from 7.2 per cent to 7.0 per cent."We employed our capital more productively and advanced our operating excellence at all of our plants. We now need to stabilise this performance, in particular with regard to generating free cash flow," says Sascha Rosengart, Chief Financial Officer of SHW.

Efficiency programmes in powder metallurgy and pump assembly deliver initial successes

The Pumps and Engine Components business segment recorded an increase in sales of 9 per cent to EUR 365.2 million in the fiscal year 2015 (previous year: EUR 333.6 million). Sales in its Passenger Car division grew by 13 per cent to EUR 306.6 million (previous year: EUR 272.0 million) due to strong customer demand for variable oil/vacuum pumps, electrical auxiliary pumps for the start-stop function and camshaft phasers. The Industry division contributed EUR 27.7 million to sales (previous year: EUR 29.8 million). The Powder Metallurgy division boosted its total sales (including internal sales) in the fiscal year 2015 by 8 per cent from EUR 53.1 million to EUR 57.5 million.

The business segment's earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) increased from EUR 33.1 million to EUR 35.2 million in the full year. The corresponding EBITDA margin lessened from 9.9 per cent to 9.6 per cent.

The still slight decrease in the margin was primarily due to the fact that efficiency measures to tackle operational and logistical tailbacks in the Powder Metallurgy at the Aalen-Wasseralfingen plant and in the pump assembly at the Bad Schussenried plant were not implemented on time.

The performance of the Pumps and Engine Components business segment at the Company's foreign locations varied in the fiscal year 2015. Due to a three-week plant closure of a major automobile manufacturer, the sales and earnings trend for the Group's Brazilian subsidiary SHW do Brasil Ltda. fell short of expectations. However, overall the Brazilian plant nonetheless generated a slight positive earnings contribution. The progress of the Group's new locations in Canada and China was in line with expectations.

Brake Discs business segment: EBITDA target margin of 10 per cent realised

The Brake Discs business segment recorded sales of EUR 98.3 million in the fiscal year 2015 (previous year: EUR 96.5 million). The number of brake discs sold in the full year was 4.24 million units, which was a slight drop on the previous year, while the number of higher-value composite brake discs rose by 48 per cent to 0.38 million units.

The business segment's earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) rose by 8 per cent year-on-year to EUR 9.8 million (previous year: EUR 9.1 million). The EBITDA margin of 10.0 per cent reached the expected target value.

SHW Group aims for further enhancement in profitability

This year and next, SHW will lay the foundations for sustainably profitable and capital efficient growth for the period after 2018. The focus here will be on further improving its operational excellence, expanding its international presence and strengthening its position as a technology and innovation leader.

Sales and incoming orders were higher than predicted in the Pumps and Engine Components business segment in January 2016, while they were lower than anticipated in the Brake Discs business segment. For the fiscal year 2016, the Group is expecting sales of between EUR 440 million and EUR 460 million, assuming that both the order situation and the operating environment remain stable. It is predicting sales of approximately EUR 340 million to EUR 360 million in its Pumps and Engine Components business segment and sales around previous year's level in its Brake Discs business segment, with a further upturn anticipated in the percentage of higher-value composite brake discs in 2016.

Despite its prediction of a slight fall in sales, the Group is expecting its consolidated earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) to be between EUR 43 million and EUR 47 million. The impacts of the operative excellence program in both business segments should have a positive effect on the predicted earnings.

The full 2015 consolidated financial statement and management report will be published with the Annual Report on 24 March 2016.


About SHW

The Company was established in 1365 making it one of the oldest industrial companies in Germany. Today, SHW AG is a leading automotive supplier providing products that make a substantial contribution to reducing fuel consumption and, consequently, to lowering CO2 emissions. In its Pumps and Engine Components business segment, the SHW Group develops and produces pumps for passenger vehicles and industry applications (e.g., trucks, agricultural and construction vehicles, stationary engines and wind farms) as well as engine components. The Brake Discs business segment develops and produces monobloc ventilated brake discs made of cast iron and composite brake discs made of a combination of an iron friction ring and an aluminium pot. The SHW Group's customers include renowned automotive manufacturers, manufacturers of commercial, agricultural, and construction vehicles as well as other suppliers to the automotive industry. Currently, the SHW Group has four production sites in Germany located in Bad Schussenried, Aalen-Wasseralfingen, Tuttlingen-Ludwigstal and Neuhausen ob Eck, one site in Brazil (Sao Paulo) and a sales and development centre in Toronto, Canada. Besides, SHW Automotive GmbH also holds a 51 per cent interest in the joint venture SHW Longji Brake Discs (LongKou) Co., Ltd., in LongKou, China. With just over 1,250 employees, the Company generated Group sales in fiscal year 2015 of EUR 463 million. Further information is available at: www.shw.de

Contact person

Michael Schickling
Head of Investor Relations & Corporate Communications
SHW AG
Telephone: +49 (0) 7361 502 462
Email: michael.schickling@shw.de

Future-oriented statements

This press release contains certain future-oriented statements that are based on current assumptions and forecasts made by the management of SHW AG. Various known and unknown risks, uncertainties and other factors may lead to the actual results, financial position, development or performance of the company deviating considerably from the appraisals specified here. The company assumes no obligation to update future-oriented statements of this nature or adapt them to future events or developments.

Note

This announcement is for information purposes only and does neither constitute an offer to sell, purchase, exchange or transfer any securities nor a solicitation of any offer to sell, purchase, exchange or transfer any securities.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. SHW AG does not intend to register any securities referred to herein under the Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States in connection with this announcement.



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