|   Schopfloch

Successful Operations in Fiscal 2011

Business unit of BÜTFERING sold as planned | Restructuring expenses lead to net loss for the year | Changes in the management board | Positive outlook for 2012/2013

EUR million

FY 2011

FY 2010

Change

Order intake

574.8

541.0

+6.2%

Sales revenue

798.7

717.7

+11.3%

Operative EBITDA

70.5

65.1

+8.2%

Extraordinary expenses

21.6

4.4

+394.6%

Net profit/loss (after
non-controlling interest)

‑4.7

6.7

‑170.6%

HOMAG Group AG, the world’s leading manufacturer of plant and machinery for the woodworking industry and cabinet makers, published today at the press briefing on the annual results in Stuttgart the final financial figures for 2011, confirming all preliminary figures published previously.

CEO Dr. Markus Flik, was satisfied with the development of the fiscal year: “In the fiscal year 2011, we developed better than we had expected during the year and generated good operating results. We achieved a lot in 2011. In 2012, we will continue working on the implementation of the actions introduced. This includes the restructuring, which is progressing as planned and with which we want to optimize our group structure and reduce the number of production sites in Germany from eleven to eight,” says Dr. Flik. As already reported, management and employee representatives were able to reach an agreement on a reconciliation of interests and a redundancy/social plan at the subsidiaries BÜTFERING Schleiftechnik GmbH, Beckum, and TORWEGGE Holzbearbeitungsmaschinen GmbH, Löhne.

In the course of this restructuring, the HOMAG Group was able to sell the metal grinding machines business unit of the subsidiary BÜTFERING to LISSMAC Maschinenbau GmbH, Bad Wurzach. It was agreed to maintain secrecy as to the purchase price. As a result, it was possible to save 17 positions.

The Group’s further expansion of its position in the growth markets is also progressing well with the expansion of the production site in China and the build-up of the assembly plant in India. The innovations presented at the lead trade fair, LIGNA, were extremely well received by the market and the large-scale project with the Russian customer, Mekran, is progressing as planned.

Results in the fiscal year 2011
In 2011, order intake rose by just over 6 percent, reaching EUR 574.8 million (prior year: EUR 541.0 million). Sales revenue increased by just over 11 percent to EUR 798.7 million (prior year: EUR 717.7 million) and order backlog came to EUR 158.6 million as of December 31, 2011 (prior year: EUR 149.3 million). Operative EBITDA before employee participation expenses and before extraordinary expenses improved by just over 8 percent to EUR 70.5 million (prior year: EUR 65.1 million).

Primarily owing to the restructuring expenses of EUR 18.9 million for the measures at the subsidiaries BÜTFERING, FRIZ and TORWEGGE, EBT after employee participation expenses and after extraordinary expenses decreased to EUR 6.4 million (prior year: EUR 14.4 million). The restructuring as well as the interest limitation regulations and losses incurred by some subsidiaries on which it was not possible to recognize deferred tax assets result in a high tax expense rate of 151.7 percent (prior year: 43.9 percent). This results in a net loss after non-controlling interests of EUR 4.7 million (prior year: net profit of EUR 6.7 million). This results in earnings per share of EUR ‑0.30 (prior year: EUR 0.43).

As anticipated, net liabilities to banks rose to EUR 80.9 million as of December 31, 2011 after the extremely low level in the prior year (December 31, 2010: EUR 55.8 million). At 29.0 percent as of December 31, 2011, our equity ratio remains at virtually the prior-year level (29.8 percent) on account of the fall in total assets. Due to the increased EBIT before employee participation expenses and before extraordinary expenses and the lower capital employed, ROCE in 2011 improved further to 15.0 percent before taxes (prior year: 12.3 percent) and after taxes (calculated based on a tax rate of 30 percent for both years) to 10.5 percent (prior year: 8.6 percent). “By rigorously raising the productivity of the capital employed we were able to reduce working capital, despite the increase in sales revenue, which allowed an increase in ROCE,” CFO Hans-Dieter Schumacher explains.

As of December 31, 2011, the HOMAG Group had 5,141 employees (prior year: 5,051 employees). To prepare for the future growth, investments were increased. This item came to EUR 33.8 million in 2011 (without leases) (prior year: EUR 23.0 million). The focus was on expanding the production in China, the new assembly plant in India and modernizing plant and machinery in the German production sites.

On account of the net loss incurred in the fiscal year 2011, both the management board and supervisory board of HOMAG Group AG will propose to the annual general meeting on May 24, 2012 not to distribute a dividend for 2011.

Changes in the management board
The management board member in charge of production and materials management to date, Herbert Högemann, will focus on his role as managing director for these functions at HOMAG Holzbearbeitungssysteme GmbH and step down from the Group management board as of September 30, 2012. He will be succeeded by Harald Becker-Ehmck (43) who was appointed by the supervisory board at its meeting of March 22, 2012 as management board member in charge of production, materials management and affiliates effective July 1, 2012. Becker-Ehmck studied mechanical engineering and has many years of experience managing manufacturing facilities and international production networks in the automotive supplies industry including positions at the Dräxlmaier Group, Vilsbiburg, and Behr GmbH & Co. KG, Stuttgart.

“With Mr. Becker-Ehmck we were able to attract a proven expert for production processes as a new colleague who will drive forward the further development of our global value-added network, explained Dr. Markus Flik, CEO of the HOMAG Group AG. We look forward to working closely with Mr. Högemann also in his future position.”

The management board member in charge of research and development to date, Achim Gauß, decided not to extend his contract, which expires at the end of 2012, in order to seek new professional challenges outside the HOMAG Group. The management board members Dr. Markus Flik and Jürgen Köppel will assume his tasks.

“We would like to thank Mr. Gauß for his many years of successful work at the HOMAG Group. He has driven forward key innovations and built up valuable customer relationships and we wish Mr. Gauß all the best in his future career. We are convinced that the future management board team is very well prepared to take our Group forward on the way to profitable growth,” says the chairman of the supervisory board of HOMAG Group AG, Torsten Grede.

Outlook
For the current fiscal year 2012, HOMAG Group AG expects to reach order intake that is roughly at the same level as in 2011. As regards sales revenue, the aim is to reach about EUR 750 million in 2012 and thereby roughly match the level of 2011 – adjusted for the special effect of the large-scale project with Mekran. On this basis, the HOMAG Group anticipates for 2012 an operative EBITDA (before employee participation expenses and before extraordinary expenses) of about EUR 65 million. Owing to significantly reduced extraordinary expenses, the management board anticipates a net profit again in 2012. 

“We are improving our operating performance – step by step,” Dr. Flik emphasized. According to the management board, this includes the rigorous capture of synergies in the Group, the completion of the restructuring in 2012, further improvement of company processes and the optimization of liquidity management. The HOMAG Group is laying the foundations for future growth based on innovations and the expansion of the international presence in the areas of sales, service and production. The objective is to attain or extend the market leadership in all segments.

Once the restructuring is completed in the current fiscal year, a sustained improvement in operative EBITDA (before expenses from employee participation and before extraordinary expenses) is expected to be generated ranging between EUR 6 million and EUR 8 million each year from the fiscal year 2013 onwards compared to the fiscal year 2011. “In 2013 we again anticipate a moderate year-on-year growth in order intake and in sales revenue, and we want to further raise our net profit for the year,” Dr. Flik emphasized.

In the medium term, the Company aims to return to the level of sales revenue seen in the years 2007 and 2008 of approximately EUR 850 million.

 

Disclaimer
This press release contains certain statements relating to the future. Future-oriented statements are all those statements that do not pertain to historical facts and events or expressions pertaining to the future such as “believes”, “estimates”, “assumes”, “forecasts”, “intend”, “may”, “will”, “should” or similar expressions. Such future-oriented statements are subject to risks and uncertainty since they relate to future events and are based on current assumptions of the Company, which may not occur in the future or may not occur in the anticipated form. The Company points out that such future-oriented statements do not guarantee the future; actual results including the financial position and the profitability of the HOMAG Group as well as the development of economic and regulatory framework conditions may deviate significantly (and prove unfavorable) from what is expressly or implicitly assumed or described in these statements. Even if the actual results of the HOMAG Group including the financial position and profitability as well as the economic and regulatory framework conditions should coincide with the future-oriented statements in this announcement, it cannot be guaranteed that the same will hold true in the future.

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