Kardex AG: Encouraging year for the Kardex Group
14 March 2013, Company News
Kardex AG / Key word(s): Final Results 14.03.2013 06:00 Release of an ad hoc announcement pursuant to Art. 53 KR --------------------------------------------------------------------------- Media information Zurich, 14 March 2013 Kardex Group Encouraging year for the Kardex Group The Kardex Group has had a good financial year, supported by strong team performances, consolidated market positions and despite some clouds on the horizon, a generally positive economic climate. The measures introduced last year are taking effect and the changes in strategic alignment have been implemented. This has led to progressive improvements in results, both at a revenue and in particular at an income level. The target margins for 2012 were achieved in the two major divisions Kardex Remstar and Kardex Stow, and the foundations for achieving the turnaround were laid in Kardex Mlog. With a much improved equity ratio, with no goodwill or capitalized tax loss carry-forwards included , and a net cash position in the double-digit million range, Kardex had a solid balance sheet at year end. This gives us full business independence and flexibility, and also enables us to pay dividends to shareholders again. The Group's 2012 net revenues of EUR 484.4 million were 5.5% up on 2011. This increase in revenues, coupled with efficiency increases and controlled cost management, have had a distinctly positive effect on the Group result. With an EBITDA of EUR 37.7 million (EUR 21.5 million), an EBIT of EUR 27.6 million (EUR 10.4 million) and a net result of EUR 21.4 million (EUR 3.0 million) or earnings per share of CHF 3.34 (CHF 0.59), the Group generated an encouraging result. The return on capital employed (ROCE) increased to 21.2% (7.6%). At EUR 489.7 million, bookings were up slightly compared with last year's already strong performance (EUR 480.2 million). Despite some levelling off of incoming orders during the year, the order books continue to be well filled at year end, at EUR 154.9 million (EUR 148.5 million). Strategic changes to divisions put in place The positive momentum in the Kardex Group continues. Following the shift in business responsibility to the divisions in summer 2011, the strategic focuses of the Group and the divisions were reviewed and defined. Strategies were then consistently revised and refined at divisional level. The Board of Directors definitively approved the divisions' strategic alignment and the resulting measures in June 2012. The Group Executive Committee has drawn up an investor handbook to improve the understanding of all stakeholders. This handbook can be downloaded from the corporate website (www.kardex.com, Investor Relations section). Common to all divisions is the fact that they are their customers' partner throughout the entire product or solution life cycle. This begins with identifying customer requirements and continues throughout the planning, development and implementation of customer-specific systems, right through to ensuring a high level of availability and low lifecycle costs with the aid of customer-oriented lifecycle management. Development expenditure is being maintained at a high level for this purpose, and customer proximity will be strengthened by increased investment in sales and service organisations. Efforts to expand the service element in all divisions are making good progress. In addition to better and more stable margins, this will lead to a reduction in cyclicality. Kardex Remstar doubles operating result Kardex Remstar's dynamic storage and retrieval systems enjoyed solid demand in the year under review. The division consolidated its market leadership position with the expansion of its service business and a substantial improvement in productivity. The division increased its revenues by 7.9% to EUR 236.7 million (EUR 219.3 million) despite a cyclical weakening of demand in southern Europe and a slowdown in Asia. This increase was specifically the result of the encouraging performance of its service operation, which grew by 12.2% and made a 27.9% (26.9%) contribution to revenues. Operating profit (EBIT) increased by more than 100% from EUR 10.5 million in the previous year to EUR 23.1 million. This equates to a sound EBIT margin of 9.8%, at the top end of our target range. With its realignment in the US completed, its innovative product portfolio and the centralisation of its European spare parts warehousing, Kardex Remstar is well positioned, despite strong competition, to further consolidate the sales and profitability figures it has achieved in 2012. Kardex Stow profits from expanding sales and OEM business Kardex Stow put in a promising performance in the year under review. With revenues of EUR 181.6 million, the division exceeded the previous year's figure by 7.6%. These higher volumes, but also the change in the marketing and sales approach introduced in 2011 in the form of a clearer focus on smaller and more profitable orders, combined with a targeted expansion of its sales organisations in core European markets, has resulted in a sustained improvement in margins. This division is also profiting from the further expansion of its product range and the ongoing expansion of joint initiatives with strong OEM and key account partners. Thanks to these new products, it has also been able to lay the foundations for an own service business. With an EBIT of EUR 9.1 million (EUR 3.6 million) and an EBIT margin of 5.0% (2.1%), Kardex Stow is making good progress and is already at the top end of the anticipated target range. Despite this encouraging progress, the Kardex AG Board of Directors and the management of Kardex Stow have in parallel over the last twelve months been examining all possible ways of giving Kardex Stow even better opportunities for development. A merger has been worked out with an industrial partner that has a geographical profile which complements that of Kardex Stow. The appropriate due diligence work and evaluation had been concluded and defined at the time this Annual Report went to press. The definitive financing of this transaction is still outstanding, and must be secured by the industrial partner. If this does not come about in April 2013, the Board of Directors has stated that the division will remain within the Group. Kardex Mlog: Legacy problems overshadow positive performance on products and services front Whereas the business model for the other two divisions was solid before the strategic realignment took place, and their potential and actual improvement is specifically the result of a more consistent implementation, Kardex Mlog has had to modify its business model extensively, and it is taking longer to implement. At EUR 71.3 million and EUR 72.2 million respectively, sales and bookings in 2012 are slightly down on last year. The main market of Germany accounted for 76% of these figures, and business in surrounding countries showed an encouraging increase, representing 24% of revenues. The increased focus on modernization projects and modular industry solutions as well as end-to-end service offerings have reduced the significance and risks of the systems business. But Kardex Mlog continues to suffer from its legacy problems. In 2012, the division generated a negative EBIT of EUR 3.0 million (EUR -2.4 million). This includes EUR 3.6 million for warranty work and provisions for major project orders in the systems business, most of which were acquired during the years 2010 and 2011. Order quality is showing a significantly improved risk profile for 2013, and is forming the basis for a long-term return to profitability. The standardized solutions for special industrial segments launched in 2012 are being well received by the market and the drive to expand the services business is starting to bear fruit. The proportion of revenues generated by these services rose in the reporting period from 13.8% to 15.7%. High free cash flow strengthens balance sheet and reduces financial expenditure The largely encouraging progress in the divisions is also reflected positively in the Group's key balance sheet figures. Despite higher revenues, net working capital remained stable at EUR 72.1 million (EUR 71.8 million) and free cash flow rose strongly, reaching EUR 28.4 million (EUR -7.8 million). The Group's net debt of EUR 15.6 million at the start of the year has become a net cash position of EUR 12.4 million. This has had a positive impact on net financial expenditure, which fell by more than half to EUR 3.1 million compared with last year (EUR 6.4 million) and will be reduced further. The tax rate remained low at 12.7%, thanks to the use of tax loss carry forwards. Group equity stood at EUR 85.4 million at period end, with the equity ratio rising to 36.2%, up from 25.5% at the end of 2011. The return on equity reached 25.1% (4.7%). Management reorganization proves its worth Following the General Meeting on 24 April 2012, Felix Thöni assumed the office of President of the Executive Committee in his capacity as Executive Member of the Board of Directors, a post he has held since June 2011. After performing the dual role of Executive Chairman of the Board of Directors for a period of one year, Philipp Buhofer has since been concentrating solely on his duties as Board Chairman. Jakob Bleiker and Ulrich Looser were elected as new Board members. The cooperation and division of tasks within the Board of Directors are efficient and encouraging. The Board of Directors will therefore propose to the General Meeting that all current members be re-elected for a further one-year period of office. There were no further changes to the Executive Committee following the 2012 General Meeting. Share price and proposal to pay dividend The good result for the financial year and the solid balance sheet also enable the Board of Directors to propose to the General Meeting that a dividend be paid to shareholders. It will propose that a dividend of CHF 1.20 per share be paid from the reserve from capital contributions. This will be tax-free for shareholders who are private Swiss individuals. The financial community has also been taking note of the Group's operational performance and results during the year under review. Interest in Kardex shares was keen, and the company's market capitalization more than doubled in 2012, reaching CHF 189 million. Outlook The global debt crisis is not passing the industry by unnoticed. In contrast to the US, investment momentum levelled off during the first half of the year in (southern) Europe and in Asia, but has since remained stable. The trend towards efficient and innovative intra-logistics solutions remains unchanged. So from today's perspective, the prospects for all the Group's business areas continue to be rated as good. In the new financial year, the Executive Committee is anticipating business to consolidate at its current high level. But Kardex remains ready to respond promptly to any possible worsening of the economic climate. Contact for media and investors: Edwin van der Geest Investor Relations investor- relations@kardex.com Tel. +41 79 330 55 22 www.kardex.comCalendar of events: 25 April 2013 2013 Annual General Meeting 22 August 2013 2013 Half-year-closing, Publication Interim Report 2013 13 March 2014 2013 Year-end-closing, Publication Annual Report 2013 2014 Media and analysts' conference 24 April 2014 2014 Annual General Meeting2012 Annual Report The full 2012 Annual Report of the Kardex Group is available at: http://www.kardex.com/nc/en/investor-relations/financial-reports/annual-re ports.html Kardex Group - Corporate Profile The Kardex Group is a leading supplier of static and automated storage solutions and materials handling systems. It consists of the three corporate divisions Kardex Remstar, Kardex Stow and Kardex Mlog. Kardex Remstar develops, produces and maintains shuttles and dynamic storage and retrieval systems, Kardex Stow static storage systems, pallet shuttles and automated mobile shelving systems and Kardex Mlog integrated materials handling systems and automated high-bay warehouses. All divisions are partners for their customers over the entire lifecycle of a product or solution. This starts with an assessment of customer requirements and continues via the planning, realization and implementation of customer-specific systems through to ensuring a high level of availability and low lifecycle costs by means of customer-oriented lifecycle management. More than 2 000 employees in over 30 countries worldwide work for the companies of the Kardex Group. Disclaimer This communication contains statements that constitute 'forward-looking statements'. In this communication, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations and business and certain of our strategic plans and objectives. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors which are beyond Kardex's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors detailed in Kardex's past and future filings and reports and in past and future filings, press releases, reports and other information posted on Kardex Group companies' websites. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Kardex disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key FiguresEUR millions 1 January to 31 December 2012 2011 +/-% Bookings 489.7 101.1% 480.2 104.6% 2.0% Order backlog (31 December) 154.9 32.0% 148.5 32.3% 4.3% Net revenues 484.4 100.0% 459.2 100.0% 5.5% Gross Profit 118.4 24.4% 97.9 21.3% 20.9% OPEX 90.8 18.7% 87.5 19.1% 3.8% Operating result (EBIT) 27.6 5.7% 10.4 2.3% 165.4% EBITDA 37.7 7.8% 21.5 4.7% 75.3% Result for the period 21.4 4.4% 3.0 0.7% 613.3% Earnings per share (EUR) 2.77 0.48 477.1% Free cash flow 28.4 -7.8 n.m. Return on capital employed (ROCE) 21.2% 7.6% 178.9% 31.12.2012 31.12.2011 +/- % Net working capital 72.1 71.8 0.4% Net debt -12.4 15.6 n.m. Equity / Equity ratio 85.4 36.2% 64.5 25.5% 32.4% Employees (full-time equivalents) 2'062 2'124 -2.9%14.03.2013 News transmitted by EquityStory AG. The issuer is responsible for the contents of the release. EquityStory publishes regulatory releases, media releases on the capital market and press releases. The EquityStory Group distributes authentic and real-time financial news for over 1'300 listed companies. The Swiss news archive can be found at www.equitystory.ch/news --------------------------------------------------------------------------- Language: English Company: Kardex AG Thurgauerstrasse 40 8050 Zürich Switzerland Phone: +41 (0)44 419 44 79 Fax: E-mail: investor-relations@kardex.com Internet: www.kardex.com ISIN: CH0100837282 Swiss Security Number: A0RMWK Listed: Freiverkehr in Berlin, München, Stuttgart; Frankfurt in Open Market ; SIX End of Announcement EquityStory News-Service ---------------------------------------------------------------------------