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
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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.com
Calendar 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 Meeting
2012 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 Figures
EUR 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%
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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
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