-At EUR 454.4 million, revenue again at a very high level
-Operating EBIT of EUR 20.5 million and operating EBIT-margin of 4.5 percent reflect successful operating performance
-Gratifying performance in the Commercial Vehicles Division
-Full-year forecast for 2018 confirmed: Further growth in revenue and profitability
Amberg, May 14, 2018 – As expected, the first quarter of 2018 proved to be more challenging for the Grammer Group after a very successful fourth quarter in 2017. In the first three months of the current year, Group revenue came to EUR 454.4 million despite exchange rate fluctuations, thus reaching the level recorded in the very strong prior-year quarter (2017: 458.0). Both divisions – Automotive and Commercial Vehicles – performed in line with expectations in the first three months of 2018. As in the previous year, the Commercial Vehicles Division posted positive revenue growth and was able to almost completely compensate for the revenue development in the Automotive Division.
Grammer’s operating profitability also remained solid in the first quarter, although the operating EBIT of EUR 20.5 million fell somewhat short of the previous year’s very strong figure of EUR 23.1 million. This translated into an operating EBIT-margin of 4.5 percent (2017: 5.0). During the period under review, there were no exceptional effects and only minor currency translation effects influencing operating earnings.
Gratifying performance in the Commercial Vehicles Division
As in previous quarters, the Commercial Vehicles Division achieved further substantial growth in the first three months of 2018, generating revenue of EUR 153.8 million, thus marking a considerable increase of 14.8 percent over the same period in the previous year with a revenue of EUR 134.0 million. This gratifying performance was particularly underpinned by the continued rise in sales volumes in the agricultural machinery and truck markets as well as the sustained recovery of the Brazilian market. Favorable market conditions in all regions as well as growth in the higher-margin business segments consistently spurred the Division’s good earnings performance. EBIT in the Commercial Vehicles Division rose by 22.4 percent over the same period of the previous year to EUR 15.3 million (2017: 12.5), while the EBIT-margin widened to 9.9 percent (2017: 9.3).
Revenue in the Automotive Division contracted by 6.4 percent to EUR 313.9 million (2017: 335.5) primarily as a result of lower revenues from development projects and the phase-out of existing models together with the ensuing ramp-up of replacement products. EBIT dropped to EUR 9.7 million (2017: 14.0), with the EBIT-margin coming to 3.1 percent (2017: 4.2). In addition to the lower volumes compared with the previous year, the uncovered development, selling and project costs particularly exerted pressure on operating performance in this Division. Moreover, the Automotive Division experienced a large number of model-related new product launches – including with new customers – and the ramp-up of series projects in North America in particular in the first quarter of 2018. As expected, this caused shortfalls in labour productivity and process efficiency in the production area.
“The first quarter lived up to our expectations and overall we are satisfied with our business performance. There is strong worldwide demand for our innovative products in all segments. We were able to continue growing in our domestic EMEA market as well as in Asia (APAC),” says Hartmut Müller, Chief Executive Officer of Grammer AG. “We knew that we would be facing a number of challenges in the Automotive Division in particular at the beginning of the year. Accordingly, we have already taken comprehensive measures to boost productivity and efficiency in order to rectify the shortfalls in the Automotive Division.”
Development of IFRS EBIT
For earnings before interest and taxes (EBIT) the favorable operating performance was influenced only by minor currency-translation effects. IFRS-EBIT thus came to EUR 20.4 million (2017: 22.5), accompanied by an EBIT-margin of 4.5 percent (2017: 4.9). Consolidated net profit after tax with EUR 12.2 million as of March 31, 2018 (2017: 14.0) reached almost the high level of the previous year.
Grammer AG had total assets of EUR 1.1 billion as of March 31, 2018 (2017: 1.2). At EUR 325.8 million, equity was slightly down on the previous year’s figure of EUR 351.0 million, while the equity ratio stood at 30 percent, thus remaining steady at the previous year’s level (2017: 30) and coming close to the figure of 31 percent recorded in consolidated financial statements for 2017. This decline was primarily due to the first-time application of IFRS 15.
Full-year guidance for 2018 confirmed
Group revenue is still expected to rise slightly in the core business activities and for 2018 as a whole, Grammer projects growth in revenue to EUR 1.85 billion. Through the measures to boost productivity and efficiency in the Automotive Division, Grammer will be able to fully offset the current cost burden in the course of the year and achieve a further improvement in operating profitability in excess of the previous year’s level, thus confirming the guidance published in the Annual Report for 2017.
Located in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspension driver and passenger seats for onroad and offroad vehicles.
In the Automotive Division, we supply headrests, armrests, center console systems and high-quality interior components and operating systems to premium automakers and automotive system suppliers. The Commercial Vehicles Division comprises seats for the truck and offroad seat segments (tractors, construction machinery, forklifts) as well as train and bus seats.
With 13,000 employees, Grammer operates in 19 countries around the world.
Grammer shares are listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra.