SHW AG: Full year sales and earnings forecast confirmed

DGAP-News: SHW AG / Key word(s): 9-month figures/Interim Report28.10.2014 / 07:06---------------------------------------------------------------------PRESS RELEASESHW 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 percentAalen, 28 October 2014. Today, SHW AG, one of the leading automotivesuppliers of CO2-relevant pumps, engine components and brake discs,published its key financial figures for the first nine months and thirdquarter of 2014.SHW AG's Group sales in the first nine months of 2014 increased by 19.5percent to EUR 321.4 million (1-9/2013: EUR 269.0 million) while in thesame period new passenger car registrations in the European Union onlygained 6.1 percent to 9.57 million vehicles. The strong sales growth wasdue to successful new product launches and a high level of customer callorders. In the period from January to September 2014, incoming orders ofSHW AG rose 15.2 percent to EUR 328.6 million (1-9/2013: EUR 285.3million).The high level of customer call orders during the first nine months of 2014led to noticeable logistical and operational pressures on the existingtechnical capacity at both our suppliers and in the Powder Metallurgydivision at the Aalen-Wasseralfingen site. It also adversely affected theproductivity of the pump production activities at the Bad Schussenriedsite, which is the main customer of the Powder Metallurgy division. Inparticular, an unforeseen rise in customer call orders for a large seriesproduct resulted in significant problems throughout the entire supply chainand to additional charges in the mid single-digit millions.Group earnings before interest, taxes, depreciation and amortisation oftangible and intangible assets (adjusted EBITDA) improved in light of thisfrom EUR 28.1 million to EUR 29.4 million in the period from January toSeptember 2014 compared to the same period in the previous year. Thisrepresents 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 ninemonths given the current circumstances", said CEO Dr. Thomas Buchholz, whois responsible for the Pumps and Engine Components business segment. "Wehave started to implement the three-year investment programme approved byour Supervisory Board and the corresponding action plan so that we returnthe Powder Metallurgy division back to profitable growth in the course ofthe coming year and thus sustainably improve the profitability of theentire Pumps and Engine Components business segment".Working capital ratio shows significant improvementWorking 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 19.5percent.With a working capital ratio of 11.7 percent - that is the ratio of workingcapital to the Group's trailing twelve months sales - we have almostreached our 11 percent target. "The strong rise in working capital inSeptember caused by higher business volumes prevented us from deliveringeven better results", explained Sascha Rosengart, CFO of SHW AG. "We willnot rest on our achievements, but rather work to accomplish furtherimprovements".Pumps and Engine Components business segment: sales at record levelIn the period from January to September 2014, the Pumps and EngineComponents 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 theCompany's history. Sales in the Passenger Car division grew 25.5 percent toEUR 201.4 million (1-9/2013: EUR 160.5 million). This growth wasattributable to a high level of customer call orders, particularly forvariable oil/vacuum pumps (tandem pumps), and to an expansion in capacityof an auxiliary pump for the start-stop function. New product launches inthe Passenger Car division were consistently stable and on schedule. TheTruck & Off-Highway division benefited from sustained high demand fromagricultural and construction machinery manufacturers and generated salesof EUR 23.1 million (1-9/2013:  EUR 21.0 million). The Powder Metallurgydivision was able to close the first nine months of 2014 with sales growthof 19.2 percent to EUR 24.2 million (1-9/2013: EUR 20.3 million) as aresult of new product launches and an increase in customer call orders.The high level of customer call orders during the first nine months of 2014led to noticeable logistical and operational pressures on the existingtechnical capacity at both our suppliers and in the Powder Metallurgydivision at the Aalen-Wasseralfingen site. It also adversely affected theproductivity of the pump production activities at the Bad Schussenriedsite, which is the main customer of the Powder Metallurgy division. Inparticular, an unforeseen rise in customer call orders for a large seriesproduct resulted in significant problems throughout the entire supply chainand to additional charges in the mid single-digit millions. Negotiationswith the customer for suitable compensation payments are currentlyunderway.Under these circumstances, the business segment's earnings before interest,taxes, depreciation and amortisation (adjusted EBITDA) improved from EUR23.1 million to EUR 23.9 million in the first nine months of 2014 comparedto the same period of the previous year. Internationalisation had theexpected impact on segment earnings in the first nine months of 2014. OurBrazilian subsidiary SHW do Brasil Ltda. delivered the first oil pumps to aU.S. automotive manufacturer in mid-July 2014 and already generatedpositive 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 segmentgenerated 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 (adjustedEBITDA) rose from EUR 6.1 million to EUR 6.4 million. The EBITDA margindeclined 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 wereburdened by additional costs for extra shifts and additional externalprocessing as the result of a sustained high level of customer call ordersand the delayed start of a new production line. Third quarter results werealso adversely impacted by a scheduled two-week closure in August of theTuttlingen plant, during which extensive maintenance activities wereperformed.Full year 2014 sales and earnings forecast confirmedBased on the nine-month figures, the Management Board has left its outlookfor 2014 unchanged. Assuming a continued stable order situation, SHW AGcontinues to expect Group sales in fiscal year 2014 to be in the range ofEUR 390 million to EUR 415 million. Additionally planned product launchesand a shift in the product mix towards more complex pumps should lead tosales in the Pumps and Engine Components business segment of between EUR297 million and EUR 320 million. In the Brake Discs business segment, thetarget is to further increase the share of processed brake discs andhigher-value composite brake discs and thus achieve sales in the order ofEUR 93 million to EUR 95 million. The Management Board's focus in the fourth quarter of 2014 will primarilybe on acquiring new orders, further optimising logistical and operationalbusiness processes at all locations, and on establishing and expanding thebusiness in Brazil, China, and North America. With the achievement of thesales growth planned, the Company continues to expect adjusted Groupearnings before interest, taxes, depreciation and amortisation (adjustedEBITDA) in the order of EUR 39 million to EUR 41.5 million in 2014.About SHWThe Company was established in 1365 making it one of the oldest industrialcompanies in Germany. Today, SHW AG is a leading automotive supplierproviding products that make a substantial contribution to reducing fuelconsumption and, consequently, to lowering CO2 emissions. In its Pumps andEngine Components business segment, the SHW Group develops and producespumps for passenger vehicles and so-called truck and off-highwayapplications (e.g., trucks, agricultural and construction vehicles,stationary engines and wind farms) as well as engine components. The BrakeDiscs business segment develops and produces monobloc ventilated brakediscs made of cast iron and composite brake discs made of a combination ofan iron friction ring and an aluminium pot. The SHW Group's customersinclude renowned automotive manufacturers, manufacturers of commercial,agricultural, and construction vehicles as well as other suppliers to theautomotive industry. Currently, the SHW Group has four production sites inGermany. 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.deContact personMichael SchicklingHead of Investor Relations & Corporate CommunicationsSHW AGTelephone: +49 (0)7361 502 462Email: michael.schickling@shw.deFuture-oriented statementsThis press release contains certain future-oriented statements that arebased upon current assumptions and forecasts made by the management of SHWAG. Various known and unknown risks, uncertainties and other factors maylead to the actual results, financial position, development or performanceof the company deviating considerably from the appraisals specified here.The company assumes no obligation to update future-oriented statements ofthis nature or adapt them to future events or developments.NoteThis announcement does not constitute an offer to sell securities in theUnited States of America, Canada, Australia, Japan or any otherjurisdictional territory where offers are subject to statutoryrestrictions. The securities named in this announcement may only be sold oroffered for sale in the United States of America following their priorregistration in accordance with the provisions of the version of the USSecurities Act of 1933 currently in force (the "Securities Act") or,without prior registration, only on the basis of an exemption. Unlessprovided for by certain exceptions within the Securities Act, thesecurities named within this announcement may not be sold or offered forsale in Australia, Canada or Japan, nor may they be sold or offered forsale to or for account of residents of Australia, Canada or Japan. Noregistration of the offer or sale of the securities named in thisannouncement will take place, as stipulated by the relevant statutoryprovisions in Canada, Australia and Japan. There is no public solicitationto buy securities in the United States of America.---------------------------------------------------------------------28.10.2014 Dissemination of a Corporate News, transmitted by DGAP - aservice of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Media archive at www.dgap-medientreff.de and www.dgap.de---------------------------------------------------------------------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  ---------------------------------------------------------------------  293602 28.10.2014