Kardex AG: Another successful year for Kardex

5 March 2020, Ad Hoc

Kardex AG / Key word(s): Annual Results

05-March-2020 / 06:30 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.

Media information - Year End Results 2019

Zurich, 5 March 2020

Another successful year for Kardex

- High order backlog supports strong revenue growth to EUR 471.2 million

- Profitability of both divisions reaches the upper end of the target corridors raised in 2019

- Significant investments in the future growth of the Group

- Strong earnings growth enables dividend to be increased by around 13% to CHF 4.50 per share

- Sound balance sheet offers strategic flexibility in corporate development

The Kardex Group looks back on the most successful year in its recent history. The order books remain full, although the high order backlog of the previous year could not quite be maintained. Group revenues again showed double-digit growth and the profitability of both divisions reached new highs at the upper end of the target corridors raised in 2019, despite significant investments in the future. At EUR 63.5 million, the operating result (EBIT) was the highest ever achieved.

The Kardex Group recorded a satisfying bookings level of EUR 452.4 million. Although 6.0% down on the exceptional previous year, they are still around 10% up on 2017. The very high order backlog at the beginning of the year, which led to extended delivery times, was converted into renewed sales growth of 11.3% to EUR 471.2 million despite initial capacity bottlenecks. While new business grew by 12.3%, Life Cycle Service grew by 9.2% and thus achieved a revenue share of 31.9%.

The order backlog at the end of the year was EUR 217.8 million, corresponding to a workload of 5.5 months, which is similar to the good level at the end of 2017. As a result of this encouraging development and significant investments in Kardex's future growth, the number of employees rose by 106 to 1 913 full-time equivalents.

Strong increase in profitability
Gross profit at Group level increased by 12.5% to EUR 171.3 million, with a gross profit margin of 36.4%. This was mainly possible due to the reduction of capacity bottlenecks in the supply chain of Kardex Remstar as well as lower steel prices and good sales pricing. Operating costs rose by 8.9% due to strategic spending on infrastructure, personnel and marketing.

In addition to these effects, further efficiency gains and strict cost management contributed to the Kardex Group's strong operating result. The bottom line was an EBIT of EUR 63.5 million, with an EBIT margin of 13.5% and a further increase of 19.4% over the previous year. After deducting the financial result of minus EUR 3.3 million, this results in a net profit of EUR 44.9 million. This represents a margin of 9.5%, a ROCE of 51.2% and earnings per share of CHF 6.39.

Kardex Remstar achieves excellent result
In a challenging environment with solid investment activity, especially in the USA and parts of Europe, Kardex Remstar achieved the best result in the company's history. Bookings increased by 1.9% to EUR 388.6 million. Growth in the first half of the year was regionally broad-based. New business in the US continued to grow in the second half of the year, whilst at the same time there was a noticeable slow-down in Germany, the UK, Scandinavia and Turkey. Business in China and the Middle East was down on the previous year.

Revenues increased by 12.9% to EUR 392.4 million with a similar revenue mix, benefiting from full order books at the beginning of the year. Despite significant investments in future growth, capabilities and performance, the operating result increased overproportionately again and rose by 20.4% to EUR 61.4 million. Strict cost management, efficiency improvements and the increase in revenues were the main drivers of EBIT margin of 15.6%.

At the end of the year, the order backlog amounted to EUR 159.8 million, the second highest figure ever achieved. This ensures a good start to the current financial year. The slowdown in order intake carries some uncertainty and may point to a weaker second half of 2020.

Kardex Mlog with higher operating result but lower bookings
Bookings declined in a cautious market environment, but returned to normal towards the end of the year. New business and modernization projects contributed significantly less than in the previous year to the total bookings of EUR 64.0 million, while the share of the service business increased overproportionately.

Due to the record high order backlog at the beginning of the year, the revenue development was less affected by the market environment. Revenues increased by 4.2% to EUR 79.1 million with a slightly higher gross profit margin of 22.8%. Efficiency improvements and a generally high cost discipline led to a further improvement in the operating result, which at EUR 5.6 million was around 10% above the previous year. This corresponds to an EBIT margin of 7.1%, which is at the upper end of the EBIT target corridor of 4-8% that was raised a year ago.

The order backlog at the end of the reporting period amounted to EUR 58.0 million, which corresponds to an average workload of nine months. On this basis and despite a market environment characterized by further uncertainty, Kardex Mlog expects results for 2020 roughly in line with those of the previous year.

Solid balance sheet of the Kardex Group with high equity ratio
The Kardex Group's balance sheet remains extremely robust, with total assets of EUR 289.8 million and a high equity ratio of 59.4% (57.9%) at the end of the period. The company is debt-free and has a net cash position of EUR 133.6 million. At EUR 30.8 million, the free cash flow generated during the financial year 2019 is below the high level of the previous year's period due to significant investments in production capacities in the USA and Germany and lower advance payments from projects.

Increased dividend per share
The very good annual result allows the Board of Directors to propose a distribution of CHF 4.50 per share to the Annual General Meeting of Shareholders on 14 April 2020. This is around 13% more than in the previous year and corresponds to a dividend yield of 2.8%.

As already communicated, the Board of Directors will propose to the Annual General Meeting that Dr. Andreas Häberli and Eugen Elmiger be newly elected to the Board. Andreas Häberli, Chief Technology Officer of the dormakaba Group, will contribute extensive technological know-how, particularly expertise in many areas of digitization. Eugen Elmiger, CEO of the globally active Maxon Motor, will further enhance the Kardex Group's international market and industry knowledge. With the exception of Walter T. Vogel, who is leaving the Board after 14 years, the current members will stand for re-election. We would like to take this opportunity to thank
Walter T. Vogel for his many years of commitment and valuable contributions to the Kardex Group.

The Kardex Group is entering the new financial year 2020 from a strong position. The targeted investments in people development, supply chain, internal processes and digitization will be implemented as planned. This will further strengthen the company in order to benefit from the medium-term growth opportunities in the dynamic intralogistics market.

Key Figures
EUR millions

1.1.-31.12. 2019 2018 +/-%
Bookings 452.4 96.0% 481.2 113.7% -6.0%
Order backlog (31.12.) 217.8 46.2% 230.1 54.3% -5.3%
Net revenues 471.2 100.0% 423.4 100.0% 11.3%
Gross profit 171.3 36.4% 152.2 35.9% 12.5%
OPEX 107.8 22.9% 99.0 23.4% 8.9%
EBITDA 70.2 14.9% 59.0 13.9% 19.0%
Operating result (EBIT) 63.5 13.5% 53.2 12.6% 19.4%
Result for the period (net profit) 44.9 9.5% 38.3 9.0% 17.2%
Net cash flow from operating activities 44.8   48.1   -6.9%
Free cash flow 30.8   37.8   -18.5%
ROCE 51.2%   52.1%    
  31.12.2019 31.12.2018 +/-%
Net working capital 77.3   63.9   21.0%
Net cash 133.6   129.2   3.4%
Equity/Equity ratio 172.0 59.4% 153.3 57.9% 12.2%
Employees (FTE) 1 913   1 807   5.9%
  2019 2018 +/-%
Distribution per share (CHF)1   4.50   4.0 12.5%

1 2019: Distribution of a dividend as proposed to the Annual General Meeting to be held on 14/04/2020.

Annual Report
A PDF version of the Annual Report 2019 of the Kardex Group is available on our website.

Contact for media and investors
Edwin van der Geest; investor-relations@kardex.com
Tel. +41 (0)44 419 44 79 / Mobile +41 (0)79 330 55 22

14 April 2020 Annual General Meeting 2020
SIX ConventionPoint, Zurich, Switzerland
30 July 2020 Publication Interim Report 2020
Conference Call for Media and Analysts
4 March 2021 Publication Annual Report 2020
Conference Call for Media and Analysts
15 April 2021 Annual General Meeting 2021
SIX ConventionPoint, Zurich, Switzerland
29 July 2021 Publication Interim Report 2021
Conference Call for Media and Analysts

Kardex Group - Corporate Profile
The Kardex Group is a global industry partner for intralogistic 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 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 lifecycle of a product or solution. This begins 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. Around 1 900 employees in over 30 countries work for the Kardex Group.

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.

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Additional features:

Document: https://eqs-cockpit.com/c/fncls.ssp?u=QGHMUOKOTN
Document title: Kardex_Media Information Year End Result 2019

End of ad hoc announcement


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