Financial and press releases
INDUS Group clearly grows its sales and earnings
- 9.8% growth in sales in the first half of 2021
- increase in EBIT to EUR 56.3 million
- Forecast for the 2021 financial year adjusted
The portfolio companies of the INDUS Group were able to continue the positive trend of the beginning of the year and continued to grow their sales in the second quarter of 2021. In the first six months of the year, sales revenues increased by 9.8% to EUR 850.3 million (H1 2020: EUR 774.2 million). At EUR 56.3 million, earnings before interest and taxes (EBIT) were EUR 74.6 million higher than the EBIT of the prior-year period (H1 2020: EUR -18.3 million) – which were impacted by the COVID-19 pandemic; before impairment, EBIT increased by EUR 36.7 million. This is not least attributable to the measures implemented in 2020 in the context of the INTERIM SPRINT program. The EBIT margin climbed from -2.4% to 6.6%. Earnings per share amounted to EUR 1.10, up from EUR -1.63 in the previous year.
Cash flow from operating activities was EUR 22.8 million in the first six months (H1 2020: EUR 29.0 million). As had been expected, working capital picked up as result of the increased business activity. Moreover, portfolio companies are hedging against the current rise in commodity prices and material shortages with increased inventories. While the INDUS Group had deliberately pursued a more restrictive investment policy in the COVID year 2020, the portfolio companies invested EUR 30.2 million in property, plant and equipment and intangible assets in the first half of the year, which was almost twice as much as in the same period of the previous year (H1 2020: EUR 16.1 million). Cash and cash equivalents amounted to EUR 163.2 million at the end of the quarter – a comfortable starting position for further acquisitions. At 40.2%, the equity ratio was above the target of 40%.
Growing sales in all segments – organic growth through acquisitions
All segments of the INDUS portfolio grew their sales noticeably in the first half of 2021. Overall, the shortfall in sales revenues due to sales and closures implemented in the context of the INTERIM SPRINT could be compensated. The companies in the Engineering segment achieved particularly strong sales growth of almost 20%. The latest acquisitions of JST and WIRUS also contributed to the INDUS Group’s sales growth, with inorganic growth in the INDUS Group at 1.7 % in the first six months of the year. Moreover, in July 2021, FLACO, a specialist in fluid management, was acquired as a complementary addition to HORNGROUP.
Increase in EBIT and EBIT margin in four of five segments
The Construction/Infrastructure segment remains highly profitable. The EBIT margin stayed at a high level of 16.5% in the first half of the year (H1 2020: 18.2%). Despite rising material prices and increasing material shortages, the Board of Management now projects a considerable year-on-year increase in sales and a slight increase in EBIT for this segment.
In the Automotive Technology segment, the INTERIM SPRINT set of measures implemented in 2020 is having a positive impact on the operating result. While the EBIT margin improved from -47.4% to -13.6%, it remains negative, as budgeted. Two series production suppliers are still in the restructuring process. Uncertainty in the market with regard to the full year 2021 is caused by the chip shortage and the reduced sales forecasts of the OEMs.
After the COVID-19-related shortfalls in 2020, the Engineering segment again recorded noticeable growth. The EBIT margin increased to 10.0% (H1 2020: 2.5%). For the full year, the Board of Management projects a significant increase in segment sales compared to the previous year and now a strong increase in EBIT.
The companies in the Medical Engineering and Life Science segment have now largely overcome the effects of the COVID-19 crisis – which were clearly felt until into the first quarter – and increased their EBIT margin to 7.9% (H1 2020: 5.8%). For the financial year 2021, the portfolio companies expect a cautiously positive trend, depending on further COVID-19 restrictions.
The Metals Technology segment increased its EBIT margin from 2.3% to 9.0% compared with the prior-year period. Here, too, the measures from the INTERIM SPRINT program had a positive effect on operating results. The Board of Management is optimistic about the development in the second half of the year.
Diversification paying off – forecast raised despite uncertainties in the automotive technology market and material shortages
Overall, the macroeconomic conditions for the second half of 2021 point to a further recovery. However, the spread of the Delta variant, supply bottlenecks and rising material prices represent risk factors to the German economy. “Uncertainties are intensifying, especially in the automotive market environment,” says Dr. Johannes Schmidt, Chairman of the INDUS Board of Management. “The current reduced sales forecasts of the OEMs are likely to have a knock-on effect on suppliers. We nevertheless project continued noticeable growth for the INDUS Group for the full year 2021. Our latest acquisitions, JST and WIRUS, and the complementary addition FLACO will also contribute to this growth.”
The Board of Management has therefore raised the sales forecast for the financial year 2021 from between EUR 1.55 billion and EUR 1.7 billion to between EUR 1.6 billion and EUR 1.75 billion. Earnings before interest and taxes (EBIT) of the INDUS Group should come in at between EUR 100 million and EUR 115 million, compared to the previous plans of EUR 95 million to EUR 110 million. The full interim report is available on the INDUS website. An overview of the key performance indicators is available here.