Financial and press releases
INDUS: Rising capital costs weigh on company valuations with simultaneous positive operating development of the Group
Despite an overall positive operating performance in the third quarter of 2022, INDUS Holding AG recognized non-cash impairments of EUR 39.8 million on goodwill and intangible assets in the consolidated financial statements as a result of the annual impairment tests. The reason: the impairments result on the one hand from the significant increase in the capital costs derived from market parameters and used for valuation in the current year. On the other hand, this is partly due to reduced future prospects for the units affected by the impairments as part of the current planning process. Overall, goodwill recognized will thus decrease by 8.4% from EUR 443.0 million (June 30, 2022) to EUR 405.8 million (September 30, 2022).
“The ECB’s current interest rate increases in response to record inflation across Europe have a direct impact on the valuation of our portfolio companies. Leaving aside these non-cash one-off effects, our portfolio continues its overall good operating performance,” says INDUS CEO Dr. Johannes Schmidt. “In the three largest of our five segments, margins before impairments continue to develop well in line with our expectations – despite the difficult macroeconomic environment.”
Based on preliminary financial figures for the first nine months of 2022, the INDUS portfolio companies increased their revenue to around EUR 1.4 billion (previous year: EUR 1,296.4 million). The INDUS Group’s operating income (EBIT) amounted to around EUR 11.2 million (previous year: EUR 78.6 million). Adjusted by expenses from value adjustments in connection with the self-administration proceedings initiated by INDUS portfolio company SMA, by expenses from impairment tests and by further non-operational effects, the portfolio companies achieved an adjusted EBIT of around EUR 92.7 million (previous year: EUR 86.8 million).
In the current planning process, the forecasts for operating profit (EBIT) and revenue for the full year 2022 were also reviewed. Including all described effects, the Board of Management expects an operating result (EBIT) of between EUR 15 and 30 million. As announced, the forecast of October 24, 2022, with EBIT of between EUR 46 and 61 million did not take into account possible non-cash impairments, mainly on goodwill, due to the current planning round. Adjusted by the one-off effects described above, the Board of Management expects adjusted EBIT of between EUR 115 and 130 million for the full year 2022. Revenue is still expected to be in the band between EUR 1.90 billion and EUR 2.00 billion.
The full interim report of INDUS Holding AG will be published on November 10, 2022.