Kardex AG: Continued good business at Kardex

Media information - Half Year Results 2019

Zurich, 30 July 2019

Continued good business at Kardex

The Kardex Group is once again looking back on a positive first half with increased revenues and a further improvement in operating income. The largely stable market conditions and strong position in the intralogistics market led to a continuation of a good level of bookings at Kardex Remstar, thus ensuring full order books. At Kardex Mlog, bookings in the period under review were low, but revenues also show double-digit growth with good margins due to the processing of the high order backlog.

At EUR 239.9 million, bookings for Kardex Group were 2.5% down from previous year's level
(EUR 246.0 million). Group revenues in the first half of the year amounted to EUR 229.6 million
(EUR 195.1 million), an increase of 17.7%. New business revenues grew by 19.5% to EUR 165.2 million (EUR 138.3 million). Life Cycle Service also increased its revenues by 13.4%, accounting for 28.0% of total revenues (29.1%). The Group's order backlog at the end of the period was 11.1% up on the already strong prior-year period and has increased by 7.3% since the beginning of this year. The number of employees increased by 4.0% to 1 880 full-time equivalents since the beginning of the year.

Strong increase in operating income and net profit
Gross profit at Group level increased by 14.9% to EUR 80.1 million, but due to the higher share of new business revenue the gross profit margin was slightly reduced to 34.9% (35.7%). Operating expenses increased primarily in IT and R&D, but at a lower rate than revenues. This resulted in a strongly increased (+20.3%) operating income of EUR 28.4 million with an EBIT margin of 12.4% (12.1%). Financial result and taxes combined are slightly higher than in the previous year leading to a net profit increase of 18.8% to EUR 20.2 million (EUR 17.0 million). This corresponds to a net profit margin of 8.8% (8.7%) and a ROCE of 54.0% (51.4%).

Kardex Remstar with a further increase in bookings
Despite more selective sales activity, Kardex Remstar achieved an increase in bookings in almost all markets. Europe and North America were the main drivers, while Asia developed in a satisfactory way. The Middle East and Africa region showed little revival. Bookings increased by a total of 7.5% to EUR 211.6 million (EUR 196.8 million).

The order backlog of EUR 185.9 million (EUR 160.1 million) at the end of the period provides an extended visibility with regards to the revenue development in the second half of the year.

Investments in the supply chain are beginning to take effect and delivery times could be slightly reduced. New business revenues increased by 22.0% and Life Cycle Service business grew by 12.6%, not least due to the market's good acceptance of the continuously expanded services. Overall, the division's revenue grew by 19.1% year-on-year to EUR 189.1 million (EUR 158.8 million). Operating income rose by 19.1% to EUR 27.4 million, which corresponds to the same good EBIT margin of 14.5%.

As North America in particular continues to develop in a promising way, the division will open an own production site in the USA approximately mid-2020. The corresponding planning processes are already well advanced. In addition, the recruitment of qualified personnel in all functions and markets remains a major challenge for the organization. 

Kardex Mlog with solid development despite weak bookings
Kardex Mlog recorded a 42.5% decline in bookings to EUR 28.4 million (EUR 49.4 million) in the first half of the year. On the one hand, the decline can be attributed to normal cyclicality in the project business, but on the other hand it also reflects a certain hesitance in the market to decide for major investments. Nevertheless, the offer funnel for the second half of 2019 is well filled. Revenues of EUR 40.6 million were 11.8% higher than previous year, with Life Cycle Service grew overproportional by 21.2%. As operating costs developed slightly underproportional to revenue, EBIT increased by 33.3% to EUR 2.4 million. The EBIT margin thus increased significantly to 5.9% (5.0%). The order backlog fell only slightly from EUR 62.1 million in the previous year to EUR 61.0 million and thus continues to form a good basis for the second half of the year.

Balance sheet remains solid
The distribution to shareholders in the amount of EUR 27.5 million took the form of a normal dividend in the reporting period, while the distribution in 2018 took place in July as a reduction in nominal value. As a result, the equity ratio reported for the first half of the year is slightly lower than previous year. Kardex Group's balance sheet remains very robust and shows total assets of EUR 265.3 million at the end of the period (31.12.2018: EUR 264.9 million). The company is debt-free and has a net cash of EUR 119.9 million. At EUR 17.7 million, the free cash flow generated in the first half of the year was significantly higher than in the same period last year (EUR 15.6 million) despite higher investments.

Outlook
At Kardex Remstar, there are currently only few signs of a change in the current positive market environment. For Kardex Mlog we are somewhat more cautious due to the prolongued project award periods. The Board of Directors and the Group Management are confident about the second half of the year due to the full order books. The divisions are well positioned and have a strong position in the still growing intralogistics market.

Today, 30 July 2019 at 2:00 p.m. (CET), an analyst and media conference call will be held with CEO Jens Fankhänel, CFO Thomas Reist as well as Investor Relations Contact Officer Alexandre Müller to discuss the half-year results. The conference call will be held in English. The corresponding presentation is available on Resuluts and Presentations.

Please dial in approx. 5 minutes prior to the conference and kindly hold the presentation ready.
Dial-in details:
Switzerland / Europe +41 (0) 58 310 50 00
United Kingdom +44 (0) 207 107 06 13
United States +1 (1) 631 570 56 13

Interim Report
The Interim Report is available on our website at Results and Presentations.

Contact
Alexandre Müller, investor-relations@kardex.com
Phone +41 (0)44 419 44 79 / Mobile +41 (0)79 635 64 13

Key Figures
EUR millions

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. Over 1 800 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.

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