Kardex Holding AG: Kardex records decline in bookings, net revenues and earnings
30 July 2020, Ad Hoc
Kardex Holding AG / Key word(s): Half Year Results
Media information - Half-Year Results 2020
Zurich, 30 July 2020
Kardex records decline in bookings, net revenues and earnings
The first half of 2020 at Kardex was also dominated by the corona pandemic. This affected in particular the bookings of Kardex Remstar and, to a lesser extent, its net revenues and profitability. Although Kardex Remstar expects the bookings situation to gradually recover, a further decline in net revenues and profitability is expected for the second half of the year. Kardex Mlog, on the other hand, recorded a strong recovery in bookings and is looking forward to the second half of the year with confidence. Despite the currently uncertain trends, Kardex will continue its strategic investment program in the supply chain and digitalization based on the confidence in its market position and the growth potential of intralogistics.
In the first half of 2020, Kardex' bookings were 16.6% below the same period of the previous year. This decline is attributable to the development at Kardex Remstar, whose bookings are 26.2% below previous year. Bookings had already weakened due to the economic slowdown in Europe before the outbreak of the corona crisis, but now reflects a high level of uncertainty in all markets. Since the end of May, the important US market has also cooled down significantly. Although interest in Remstar solutions remains high, many customers are holding back on investment decisions. By contrast, bookings at Kardex Mlog are 54.9% higher than in the weak prior-year period. Kardex Mlog benefited in particular from the fact that some of the orders expected for 2019 materialized in the first half of 2020. At EUR 210.9 million, the Group's order backlog at the end of the period was 3.2% lower than at the end of 2019.
Kardex Remstar and Kardex Mlog have always been able to deliver in recent months, despite the COVID-19 challenges. In some cases, however, access restrictions at customer sites meant that deliveries, installations and service work on site were not possible and had to be postponed. This led to delayed revenue recognition and partial short-time work in the organization. In combination with the weaker bookings, the first six months of the year show a decline of 9.5% in net revenues compared to the previous year. The achieved gross profit margin of 34.6% was only slightly below the prior-year period (34.9%). In absolute terms, however, the gross profit of EUR 71.8 million was 10.4% lower than in the previous year. Thanks to immediate measures, operating costs were reduced by 7.5% compared to the previous year period and thus adjusted to the declining net revenues development. The operating result (EBIT) amounted to EUR 24.0 million, 15.5% below the same period of the previous year with a corresponding EBIT margin of 11.5% (12.4%). Net profit amounted to EUR 17.1 million (EUR 20.2 million) for the first half of the year. The number of employees decreased by 0.4% to 1 906 full-time equivalents compared to the beginning of the year.
Global weakening of demand at Kardex Remstar
Net revenues fell by 8.4% to EUR 173.2 million in the first six months. Thanks to efficiency gains in the supply chain, a better revenue mix and rigid cost management, the gross profit margin in the first half of the year increased slightly compared to the previous year. The operating result decreased by 8.8% to EUR 25.0 million due to the lower volume with an EBIT margin of 14.4% which is close to the same level as in the previous year period (14.5%).
Kardex Remstar is able to cope with the decrease in orders to date with measures already initiated without any significant structural adjustments. However, if the expected rebounce does not materialize in the third quarter and the global economy continues to deteriorate, adjustments will be made to structures and capacities.
The strategic investments in the supply chain and digitalization will continue as planned. However, the start-up of the new plant in the USA will be postponed to the first half of 2021 due to current travel restrictions.
Strong recovery in bookings at Kardex Mlog
Kardex Mlog's net revenues of EUR 34.5 million were 15.0% down compared to the previous year period as a result of the low order backlog at the beginning of the year and the interruptions caused by corona. The otherwise solid profitability of the division was adversely affected by a one-off revaluation of inventories, which reduced EBIT by a low single-digit EUR million amount. As a result, the operating result fell to EUR 0.2 million (EUR 2.4 million) and the EBIT margin to 0.6% (5.9%). Kardex Mlog expects to return to the profitability level previously achieved from the second half of the year onwards.
Healthy balance sheet and high equity ratio
Today, 30 July 2020 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 Edwin van der Geest to discuss the half-year results. The conference call will be held in English. The corresponding presentation is available on http://www.kardex.com/presentation.
Kardex - Corporate Profile
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File: Kardex_Half-Year Results 2020
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