Kardex AG: Kardex completes its strategic realignment

13 March 2014, Company News

Kardex AG  / Key word(s): Final Results

13.03.2014 06:00

Release of an ad hoc announcement pursuant to Art. 53 KR

Media information 

Zürich, 13. März 2014

Kardex Group

Financial year 2013: Kardex completes its strategic realignment and is
ready to grow organically

In the 2013 financial year, the Kardex Group completed the restructuring
process begun in 2011, as well as its strategic realignment. Kardex is now
well positioned to achieve organic growth in its two divisions, Kardex
Remstar and Kardex Mlog. During the year under review, the Kardex Stow
Division was sold, Kardex Mlog was successfully turned around, and further
investment was made in the future growth of Kardex Remstar. Despite the
divestment of Kardex Stow as of 31 July 2013, the Group was able to exceed
the previous year's operating result. The Board of Directors will propose
to the Annual General Meeting that an ordinary dividend of CHF 1.25 per
share should be paid, together with the entire book gain from the sale of
Kardex Stow based on the consolidated group result, which corresponds to a
dividend of CHF 1.40 per share.

The consolidated annual result of the Kardex Group is not comparable with
the figure for the previous year, since the results for Kardex Stow are
included only until the end of July 2013. The Kardex Group reported
bookings of EUR 410.7 million in the year under review, and net revenues
came to EUR 399.3 million. EBIT of EUR 37.8 million includes a book gain of
EUR 8.8 million from the sale of the Stow Division. The net result was EUR
31.5 million. This represents earnings per share of CHF 4.95.

Taking into account the pro forma accounting for the continuing operations
(see segment reports in the Annual Report 2013), i.e. excluding the Stow
results, the figures are comparable to those for the previous year.
Bookings for both divisions thus picked up again after a weaker second half
of 2012 to reach EUR 301.5 million, which is nearly the same as the
previous year (EUR 305.2 million). At the end of 2013, the order backlog of
EUR 105.2 million was also similar to the previous year's (EUR 106.3
million). Net revenues of EUR 302.1 million were down 1.9% compared with
the strong sales recorded in the previous year, but the year-on-year
shortfall of 6.1% that existed on 30 June 2013 was almost eliminated in the
second half of the year. The operating result (EBIT) of EUR 24.2 million
corresponds to an EBIT margin of 8.0%, up 30.8% on the previous year (EUR
18.5 million). This big improvement is due in particular to the turnaround
of Kardex Mlog (+EUR 4.2 million), as well as to a further increase in the
profitability of Kardex Remstar (EBIT margin 10.2%). The return on capital
employed (ROCE) stood at 28.7% (previous year: 21.2%).

Kardex Remstar profits from efficiency improvements 

The 2013 financial year began rather sluggishly for Kardex Remstar. This
was owing to a cautious attitude to ordering in most industrial markets
from mid-2012 onwards. Bookings and revenue growth started to recover in
spring, and the shortfall in the first half was nearly compensated by the
end of the year. Revenues of EUR 235.4 million in the Kardex Remstar
Division were slightly below the figure for the previous year (EUR 236.7
million), but at the end of the year the order backlog of EUR 75.1 million
was up by 8.2%. Overall, bookings rose by 3.3% to EUR 241.4 million. In
2013 the service business generated 28.6% of revenues (previous year:
27.9%). The operating result of EUR 24.0 million for Kardex Remstar is up
3.9% on the previous year and represents an EBIT margin of 10.2%, resulting
in particular from further efficiency improvements along the entire value

In 2013 Kardex Remstar invested significantly in its future growth. The
sales department took on more staff and was restructured in Asia/Pacific.
At the same time, a new vertical carousel for smaller loads was
successfully launched on the market, thus further expanding this product
family. In addition, further steps on the way to changing Kardex Remstar
from a product manufacturer into a solutions provider were demonstrated at
a variety of trade fairs and customer events. In July 2013, the spare parts
centre for Europe came into operation at the Bellheim site. This will
enable the Group to make further efficiency improvements and provide
enhanced customer service.

Turnaround achieved at Kardex Mlog

Kardex Mlog reported 6.0% lower revenues than in the previous year at EUR
67.0 million. At EUR 60.6 million, bookings were also 16.1% below the
previous year's figure. This development was due not so much to market
conditions as to the company's efforts to improve its strategic product mix
and, above all, the risk management. The gross profit for greenfield
installations and modernization business was therefore significantly higher
than in the same period of the previous year. The service business also
grew as planned, to 17.6% of revenues (previous year: 15.7%), up 5.8% on
the previous year. At EUR 1.2 million (previous year: EUR -3.0 million),
operating profit was positive - although only to a modest extent - for the
first time since the company was purchased in 2010. Thanks to the
provisions made in the previous year, it was possible in the year under
review to settle almost all the issues still outstanding from the problem
projects of previous years. Collaboration with Kardex Remstar was
intensified thanks to the successful integration of the Remstar order
picking software into stand-alone systems of Mlog (M-Dynamic product

Kardex Stow sold on 31 July 2013

The Kardex Stow Division, part of the Kardex Group only until 31 July 2013,
contributed net revenues of EUR 98.0 million and an operating result of EUR
4.8 million. Sales were thus slightly lower than in the corresponding
previous year period, while the EBIT margin was unchanged at 4.9%.

As has already been reported, the Board of Directors of Kardex AG reviewed
all the strategic options for Kardex Stow in the previous year. The sale of
this division to the French-based Averys Group, as announced on 8 May 2013
and completed on 31 July 2013, opens up new prospects for the Stow
business. The two companies are a good fit both geographically and

The Kardex Group gained a cash inflow of EUR 76.9 million gross from the
sale, including the repayment of the intercompany debt, and a book gain of
EUR 8.8 million. This divestment gain is obtained after adjusting for
goodwill of EUR 23.1 million already written off in accordance with Swiss
GAAP FER. At an extraordinary general meeting held on 25 September 2013,
the distribution of a special dividend of CHF 4.00 per share from capital
contributions was approved. This is roughly equivalent to the capital
generated by the capital increase in September 2011, which is thus being
returned to the shareholders. Furthermore, the Group's remaining bank debts
of EUR 10 million was repaid.

Completion of the strategic realignment

The divestment of Kardex Stow also completed the strategic realignment of
the Kardex Group that began in 2012. The focus on automatic storage systems
and material flow solutions by the two entrepreneurially managed divisions
Kardex Remstar and Kardex Mlog, together with the associated service
business, is helping to achieve strong customer retention and attractive
returns on capital employed. Kardex intends to invest its unappropriated
funds in a careful and focused manner in order to continue expanding its
already strong market position in this attractive and growing industry.

Further improvements in capital management

The strong balance sheet and further progress in capital management provide
room for manoeuvre and increased flexibility. The accounts receivable and
inventories of Kardex Remstar and Kardex Mlog fell by a further EUR 3.2
million (4.0%). On the liabilities side, accelerated payments of suppliers
invoices resulted in an additional income of EUR 1.2 million from early
payment discounts.

Despite the distribution of the ordinary dividend of EUR 7.5 million in
April 2013 and the special dividend of EUR 25.2 million in October 2013,
the net cash position rose to EUR 77.0 million at the end of the year. This
was owing to net cash inflow of EUR 36.3 million from operations and in
addition the net cash inflow of EUR 63.9 million from the sale of Stow. The
Group's equity ratio stood at solid 55.9% as at 31 December 2013 (31
December 2012: 36.2%).

Proposals to the Annual General Meeting

The Board of Directors of the Kardex AG has reviewed its dividend policy in
view of the results achieved and the further increase in the balance sheet
total following the sale of Kardex Stow. It is adhering to the current
payout ratio of a maximum of 35% of operating profit, and will therefore
propose to the Annual General Meeting to declare a dividend of CHF 1.25 per
share, which will be paid out from the capital contribution reserve and is
therefore tax free for Swiss individuals. Furthermore, the Board of
Directors is proposing to pay out the entire book gain of EUR 8.8 million,
or CHF 1.40 per share, from the sale of the Kardex Stow Division to the
shareholders (also from the capital contribution reserve).

Cautiously optimistic outlook 

Thanks to the healthy order backlog and the groundwork already completed,
the Board of Directors and Executive Committee are cautiously optimistic
about the 2014 financial year. Kardex Remstar should be able to grow again
while holding its gross margin at the previous year's level. Kardex Mlog
needs to reinforce the turnaround and demonstrate the sustainability of its
business model for 2014.

Edwin van der Geest
Investor Relations
Tel. +41 79 330 55 22

24 April 2014     Annual General Meeting SIX Swiss Exchange, Zurich
21 August 2014    Interim Report 2014
12 March 2015     2014 Media and analysts' conference year-end closing 2014
                  Publication Annual Report 2014
23 April 2015     Annual General Meeting SIX Swiss Exchange, Zurich
13 August 2015    Interim Report 2014

Kardex Group - Corporate Profile The Kardex Group is a global industry partner for intra-logistic solutions and a leading supplier of automated storage solutions and material handling systems. The Group consists of two entrepreneurially managed divisions, Kardex Remstar and Kardex Mlog. Kardex Remstar develops, produces and maintains shuttles and dynamic storage and retrieval systems and Kardex Mlog offers integrated materials handling systems and automated high-bay warehouses. The two divisions are partners for their customers over the entire life cycle of a product or solution. This begins with the assessment of customer requirements and continues through planning, realization and maintenance of customer-specific systems. It ensures a high level of availability combined with low total cost of ownership and operation. Around 1 500 employees in over 30 countries work for 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       2013       (%)      2012       (%)      +/-%

Bookings                      410.7    102.9%     489.7    101.1%    -16.1%
Order backlog (31
December)                     105.2     26.3%     154.9     32.0%    -32.1%
Net revenues                  399.3    100.0%     484.4    100.0%    -17.6%
Gross Profit                  113.7     28.5%     118.4     24.4%     -4.0%
OPEX                           84.7     21.2%      90.8     18.7%     -6.7%
Gain of sale of the
Kardex Stow Division            8.8      2.2%       0.0      0.0%     n. a.
Operating result (EBIT)        37.8      9.5%      27.6      5.7%     37.0%
EBITDA                         46.1     11.5%      37.7      7.8%     22.3%
Result for the period          31.5      7.9%      21.4      4.4%     47.2%
Earnings per share (EUR)       4.08                2.77               47.3%
Free cash flow                 93.9                28.4              230.6%
ROCE (continued
operations)                   28.7%               21.2%               35.4%

                           31.12.13            31.12.12               +/- %
Net working capital            54.4                72.1              -24.5%
Net cash                       77.0                12.4              521.0%
Equity / Equity ratio         106.9     55.9%      85.4     36.2%     25.2%
Employees (full-time
equivalents)                  1 447               2 062              -29.8%

+++++ Additional features: Document: http://n.equitystory.com/c/fncls.ssp?u=EATUEDFQOD Document title: Media information YEC 2013 13.03.2014 News transmitted by EQS Schweiz 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 Valor: A0RMWK Listed: Freiverkehr in Berlin, München, Stuttgart; Frankfurt in Open Market ; SIX End of Announcement EQS Group News-Service ---------------------------------------------------------------------------