SHW AG: Full year sales and earnings forecast confirmed
28.10.2014
DGAP-News: SHW AG / Key word(s): 9-month figures/Interim Report
28.10.2014 / 07:06
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PRESS RELEASE
SHW AG: Full year sales and earnings forecast confirmed
- Sales in the first nine months of 2014 increase 19.5 percent to EUR
321.4 million
- EBITDA advances to EUR 29.4 million
- Working capital ratio at 11.7 percent
Aalen, 28 October 2014. Today, SHW AG, one of the leading automotive
suppliers of CO2-relevant pumps, engine components and brake discs,
published its key financial figures for the first nine months and third
quarter of 2014.
SHW AG's Group sales in the first nine months of 2014 increased by 19.5
percent to EUR 321.4 million (1-9/2013: EUR 269.0 million) while in the
same period new passenger car registrations in the European Union only
gained 6.1 percent to 9.57 million vehicles. The strong sales growth was
due to successful new product launches and a high level of customer call
orders. In the period from January to September 2014, incoming orders of
SHW AG rose 15.2 percent to EUR 328.6 million (1-9/2013: EUR 285.3
million).
The high level of customer call orders during the first nine months of 2014
led to noticeable logistical and operational pressures on the existing
technical capacity at both our suppliers and in the Powder Metallurgy
division at the Aalen-Wasseralfingen site. It also adversely affected the
productivity of the pump production activities at the Bad Schussenried
site, which is the main customer of the Powder Metallurgy division. In
particular, an unforeseen rise in customer call orders for a large series
product resulted in significant problems throughout the entire supply chain
and to additional charges in the mid single-digit millions.
Group earnings before interest, taxes, depreciation and amortisation of
tangible and intangible assets (adjusted EBITDA) improved in light of this
from EUR 28.1 million to EUR 29.4 million in the period from January to
September 2014 compared to the same period in the previous year. This
represents an EBITDA margin of 9.1 percent (1-9/2013: 10.5 percent).
"Overall, we can be satisfied with the results achieved in the first nine
months given the current circumstances", said CEO Dr. Thomas Buchholz, who
is responsible for the Pumps and Engine Components business segment. "We
have started to implement the three-year investment programme approved by
our Supervisory Board and the corresponding action plan so that we return
the Powder Metallurgy division back to profitable growth in the course of
the coming year and thus sustainably improve the profitability of the
entire Pumps and Engine Components business segment".
Working capital ratio shows significant improvement
Working capital declined by 11.0 percent year-on-year to EUR 48.8 million
(1-9/2013: EUR 54.8 million) with a simultaneous rise in sales of 19.5
percent.
With a working capital ratio of 11.7 percent - that is the ratio of working
capital to the Group's trailing twelve months sales - we have almost
reached our 11 percent target. "The strong rise in working capital in
September caused by higher business volumes prevented us from delivering
even better results", explained Sascha Rosengart, CFO of SHW AG. "We will
not rest on our achievements, but rather work to accomplish further
improvements".
Pumps and Engine Components business segment: sales at record level
In the period from January to September 2014, the Pumps and Engine
Components business segment achieved sales of EUR 248.7 million (1-9/2013:
EUR 201.8 million) which is the highest nine-month sales level in the
Company's history. Sales in the Passenger Car division grew 25.5 percent to
EUR 201.4 million (1-9/2013: EUR 160.5 million). This growth was
attributable to a high level of customer call orders, particularly for
variable oil/vacuum pumps (tandem pumps), and to an expansion in capacity
of an auxiliary pump for the start-stop function. New product launches in
the Passenger Car division were consistently stable and on schedule. The
Truck & Off-Highway division benefited from sustained high demand from
agricultural and construction machinery manufacturers and generated sales
of EUR 23.1 million (1-9/2013: EUR 21.0 million). The Powder Metallurgy
division was able to close the first nine months of 2014 with sales growth
of 19.2 percent to EUR 24.2 million (1-9/2013: EUR 20.3 million) as a
result of new product launches and an increase in customer call orders.
The high level of customer call orders during the first nine months of 2014
led to noticeable logistical and operational pressures on the existing
technical capacity at both our suppliers and in the Powder Metallurgy
division at the Aalen-Wasseralfingen site. It also adversely affected the
productivity of the pump production activities at the Bad Schussenried
site, which is the main customer of the Powder Metallurgy division. In
particular, an unforeseen rise in customer call orders for a large series
product resulted in significant problems throughout the entire supply chain
and to additional charges in the mid single-digit millions. Negotiations
with the customer for suitable compensation payments are currently
underway.
Under these circumstances, the business segment's earnings before interest,
taxes, depreciation and amortisation (adjusted EBITDA) improved from EUR
23.1 million to EUR 23.9 million in the first nine months of 2014 compared
to the same period of the previous year. Internationalisation had the
expected impact on segment earnings in the first nine months of 2014. Our
Brazilian subsidiary SHW do Brasil Ltda. delivered the first oil pumps to a
U.S. automotive manufacturer in mid-July 2014 and already generated
positive earnings in the third quarter of 2014.
Brake Discs business segment: EBITDA exceeds previous year's level
On the back of increasing sales figures, the Brake Discs business segment
generated sales growth of 8.2 percent in the first nine months of 2014,
achieving sales of EUR 72.7 million (1-9/2013: EUR 67.2 million).
Earnings before interest, taxes, depreciation and amortisation (adjusted
EBITDA) rose from EUR 6.1 million to EUR 6.4 million. The EBITDA margin
declined to 8.8 percent after 9.0 percent in the first nine months of 2013.
Here, it is important to note that the first quarter's earnings were
burdened by additional costs for extra shifts and additional external
processing as the result of a sustained high level of customer call orders
and the delayed start of a new production line. Third quarter results were
also adversely impacted by a scheduled two-week closure in August of the
Tuttlingen plant, during which extensive maintenance activities were
performed.
Full year 2014 sales and earnings forecast confirmed
Based on the nine-month figures, the Management Board has left its outlook
for 2014 unchanged. Assuming a continued stable order situation, SHW AG
continues to expect Group sales in fiscal year 2014 to be in the range of
EUR 390 million to EUR 415 million. Additionally planned product launches
and a shift in the product mix towards more complex pumps should lead to
sales in the Pumps and Engine Components business segment of between EUR
297 million and EUR 320 million. In the Brake Discs business segment, the
target is to further increase the share of processed brake discs and
higher-value composite brake discs and thus achieve sales in the order of
EUR 93 million to EUR 95 million.
The Management Board's focus in the fourth quarter of 2014 will primarily
be on acquiring new orders, further optimising logistical and operational
business processes at all locations, and on establishing and expanding the
business in Brazil, China, and North America. With the achievement of the
sales growth planned, the Company continues to expect adjusted Group
earnings before interest, taxes, depreciation and amortisation (adjusted
EBITDA) in the order of EUR 39 million to EUR 41.5 million in 2014.
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 so-called truck and off-highway
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. These are located in Bad Schussenried, Aalen-Wasseralfingen,
Tuttlingen-Ludwigstal and Neuhausen ob Eck. With just over 1,000 employees,
the Company generated Group sales in fiscal year 2013 of EUR 366 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 upon 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 does not constitute an offer to sell securities in the
United States of America, Canada, Australia, Japan or any other
jurisdictional territory where offers are subject to statutory
restrictions. The securities named in this announcement may only be sold or
offered for sale in the United States of America following their prior
registration in accordance with the provisions of the version of the US
Securities Act of 1933 currently in force (the "Securities Act") or,
without prior registration, only on the basis of an exemption. Unless
provided for by certain exceptions within the Securities Act, the
securities named within this announcement may not be sold or offered for
sale in Australia, Canada or Japan, nor may they be sold or offered for
sale to or for account of residents of Australia, Canada or Japan. No
registration of the offer or sale of the securities named in this
announcement will take place, as stipulated by the relevant statutory
provisions in Canada, Australia and Japan. There is no public solicitation
to buy securities in the United States of America.
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28.10.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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Language: English
Company: SHW AG
Wilhelmstrasse 67
73433 Aalen-Wasseralfingen
Germany
Phone: +49 7361 502-1
Fax: +49 7361 502-674
E-mail: ir@shw.de
Internet: www.shw.de
ISIN: DE000A1JBPV9
WKN: A1JBPV
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Stuttgart
End of News DGAP News-Service
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