Financial and press releases
Good start to the year in four out of five INDUS segments
- Sales increase by 11% to EUR 444.8 million
- Automotive Technology still strained
- Forecast confirmed despite difficult overall conditions
The portfolio companies of INDUS Holding AG performed well in the first quarter of 2022 as a whole. Group sales increased to EUR 444.8 million, up 11.1% on the previous year (Q1 2021: EUR 400.4 million). The INDUS Group’s organic growth amounted to 4.5%. The acquisitions of WIRUS, FLACO and TECALEMIT Inc. contributed 6.6% to the increase in sales.
The INDUS Group’s earnings before interest and taxes (EBIT) amounted to EUR 20.7 million (Q1 2021: EUR 25.0 million). The EBIT margin was 4.7% (Q1 2021: 6.2%). EBIT include impairments of EUR 4.6 million at a vehicle series production supplier. In addition, inventories and receivables from direct business with Russia and Ukraine were written down by EUR 1.7 million in the Automotive Technology and Metals Technology segments. EBIT before these effects hence amounted to EUR 27.0 million.
“Since the start of the Russia-Ukraine war, the operational challenges for our portfolio companies have grown once again,” says Dr. Johannes Schmidt, Chairman of the INDUS Board of Management. “Overall, our portfolio companies have coped well with these challenges so far. With the exception of the companies in the Automotive Technology segment, all segments increased or maintained their operating income compared to the previous year. This shows that our diversified business model is working, especially under difficult overall conditions.”
In view of the material price increases and supply chain problems, portfolio companies deliberately built up inventories, with working capital increasing accordingly. As a result of higher business activities, receivables also increased. Accordingly, cash flow from operating activities was EUR -27.5 million in the first quarter (Q1 2021: EUR -15.0 million). At EUR 132.1 million, cash and cash equivalents were at year-end level (31 December 2021: EUR 136.3 million).
Significant EBIT growth in Construction / Infrastructure, Engineering and Metals Technology segments
In the Construction / Infrastructure segment, sales (+29.5% to EUR 124.3 million) and EBIT (+19.6% to EUR 17.7 million) increased significantly year-on-year. The acquisition of WIRUS further strengthens the segment. The increased material prices can largely be passed on to customers. However, material bottlenecks and supply chain problems are increasingly noticeable. The EBIT margin again reached a high level of 14.2% (Q1 2021: 15.4%).
In the Automotive Technology segment, sales were down 17.2% to EUR 57.9 million on the previous year (Q1 2021: EUR 69.9 million). This includes the sales loss of EUR -13.3 million due to the sale of the WIESAUPLAST Group at the end of 2021. Rising material and energy prices as well as higher freight and logistics costs are having an adverse effect on the portfolio companies. At the same time, OEM order releases are declining. Event-driven impairment testing led to impairments of EUR 4.6 million at a series production supplier. Upstream and downstream of series production, portfolio companies are also affected by the chip shortage and direct effects of the Russia-Ukraine war. The segment’s EBIT decreased to EUR -24.0 million (Q1 2021: EUR -9.7 million).
In the Engineering segment, sales (+17.8% to EUR 109.1 million) and EBIT (+73.0% to EUR 15.4 million) rose strongly. The increase is due to the very successful work of the portfolio companies and the acquisitions of FLACO and TECALEMIT Inc. in 2021. The EBIT margin picked up noticeably to 14.1% (Q1 2021: 9.6%).
Sales in the Medical Engineering / Life Science segment increased slightly to EUR 38.7 million (Q1 2021: EUR 35.6 million) and were thus back on the pre-COVID level. At EUR 3.1 million, earnings before interest and taxes (EBIT) remained unchanged from the previous year. Higher material prices and increased logistics costs, which could only partly be passed on to customers, prevented a better EBIT margin. The latter amounted to 8.0% (Q1 2021: 8.7%).
In the Metals Technology segment, sales (+7.6% to EUR 114.7 million) and EBIT (+10.9% to EUR 11.2 million) also increased. The sales loss resulting from the discontinuation of BACHER was hence more than offset. Earnings before interest and taxes (EBIT) include write-downs on inventories and receivables in direct connection with the Russia-Ukraine war in the amount of EUR 1.1 million. The EBIT margin increased to 9.8% (Q1 2021: 9.5%). Here, too, the portfolio companies are increasingly facing rising material and energy prices.
Forecast confirmed, business environment remains uncertain
“In recent weeks, we have seen that the war in Ukraine is also creating new realities for the economy,” says Dr. Johannes Schmidt. “At the same time, the German SME sector is proving resilient. Taking the circumstances into account, INDUS’ portfolio companies have achieved a good Group-wide result. Despite the difficult overall conditions, we see good chances that sales and EBIT will remain within the range forecast by us.”
The forecast published in the 2021 Annual Report was still prepared without taking into account potential effects of the Russia-Ukraine war. In view of the complex overall conditions and high macroeconomic risks, all forecasts for the future economic development remain characterized by uncertainty. Based on current information, the Board of Management continues to expect sales for the full year of EUR 1.80 billion to EUR 1.95 billion and earnings before interest and taxes (EBIT) in the range of EUR 115 million to EUR 130 million.
Schmidt: “We continue to focus consistently on the further development of our portfolio companies and our strategy. INDUS promotes innovation in future technologies and actively supports performance increases and sustainability activities. In addition, we intend to further strengthen our portfolio through acquisitions in industries of the future. We are financially well positioned to take direct advantage of opportunities as they arise.”