-6.6 percent increase in quarterly revenue to EUR 352.7 million
-Operating profit (EBIT) of 16.5 million and net profit of EUR 9.8 million up on the previous year
-CFO Volker Walprecht to leave the Company at the end of the Annual General Meeting on May 20, 2015
-Mr. Gérard Cordonnier appointed new CFO of Grammer AG by the Supervisory Board effective June 1, 2015
Amberg, May 6, 2015 – Grammer AG, global supplier of components for automotive interiors and leading producer of seating systems for commercial vehicles, completed the first quarter of 2015 on a successful note with a substantial 6.6 percent increase in revenue to EUR 352.7 million (2014: 330.8). The increased revenue was generated in full by the Automotive Division in the period under review due to a large number of new projects, the continued strong state of the automotive sector and positive currency-translation effects. As expected, the Division Seating Systems reported lower revenue due to weak conditions in key individual markets. Despite this contraction in the Seating Systems Division, which achieves higher margins, and the continued heavy up-front costs for global production expansion and optimization, operating profit (EBIT) came to EUR 16.5 million, an increase of 11.5 percent over the same quarter in the previous year (2014: 14.8). In addition to the aforementioned factors, earnings were also supported by positive currency-translation effects. The EBIT margin increased to 4.7 percent (2014: 4.5). Net profit also rose encouragingly to EUR 9.8 million in the first quarter of 2015 (2014: 8.5).
Automotive: Strong growth driven by new projects and upbeat automotive sector
The Automotive Division remained on the previous year’s dynamic trajectory, achieving a substantial 17.0 percent increase in revenue to EUR 245.3 million (2014: 209.6). Revenue from consoles and armrests in particular was above average, with headrest business also growing significantly in the first quarter. Grammer grew in all three regions in which it is active: In the largest region addressed by the Automotive Division, EMEA (Europe, Middle East and Africa), business expanded by 7.8 percent, with the Group able to further strengthen its market position. Above-average growth rates were also registered in the Americas (formerly Overseas) and APAC (Asia Pacific) of 28.2 percent and 44.6 percent, respectively. The gratifying growth in all three regions was mainly due to positive conditions in the global automotive industry, particularly in the premium segment, and the numerous new projects which Grammer had launched in the previous year. Segment EBIT came to EUR 11.0 million in the first three months of 2015, marking a very substantial increase over the previous year (2014: 7.5). The continued heavy up-front efforts for capacity optimization in Eastern Europe in particular exerted pressure on operating profit as expected. The EBIT margin increased to 4.5 percent (2014: 3.6).
Seating Systems slowed down by strong contraction in individual markets
The Seating Systems Division sustained a substantial 8.1 percent market-induced drop in revenue to EUR 116.6 million compared with the same quarter of the previous year (2014: 126.9). This decline in revenue was even more pronounced than expected as the weak conditions in key individual markets, particularly the agricultural sector, the further slump in the Brazilian truck market and contraction in the Chinese truck market, left deep traces on the Division’s top line in the first quarter of 2015. Moreover, growth in Europe and in other commercial vehicle markets was not sufficient to offset this effect. Consequently, segment EBIT declined to EUR 8.5 million (2014: 10.3). As more profitable business activities were particularly affected by the lower revenue, the EBIT margin declined by 0.8 percentage points to 7.3 percent (2014: 8.1) but remained at an encouragingly high level.
Capital spending focused on expansion
At EUR 8.8 million, the Group’s capital spending was down on the previous year (2014: 10.1). Spending was primarily targeted at expanding production capacity in the Automotive Division in preparation of planned new products.
Equity increased, Gearing stable
The Grammer Group’s equity rose to EUR 238.1 million as of March 31, 2015 (228.1), with the equity ratio coming to around 28 percent, i.e. unchanged over the previous year. Net debt as of March 31, 2015 was recorded at EUR 125.8 million (2014: 120.9), translating into a stable Gearing of 53 percent compared with the previous year.
Increased headcount due to production expansion
As of March 31, 2015, the Grammer Group had a total of 10,693 employees (2014: 10,476). The headcount in the Automotive Division climbed as a result of additions to production capacity particularly in Serbia, the Czech Republic, China and Germany. On the other hand, headcount in the Seating Systems Division dropped slightly primarily as a result of reduced capacity utilization in Brazil.
Full-year guidance confirmed
“Despite the even weaker market situation for seating systems, we expect to be able to achieve an increase in revenue at the Group level in 2015 and thus continue the favorable performance of the last few years,” said Hartmut Müller, Chief Executive Officer of Grammer.
In the course of the year, the Group expects revenue growth to continue in the Automotive Division thanks to firmly planned new product launches and projects. On the other hand, revenue in the Seating Systems Division is likely to be noticeable lower over the previous year due to the weak market for agricultural machinery and the sharp contraction in the truck markets in Brazil and China. All told, Grammer still considers the outlook for the Group to be moderately favorable in 2015. The Group projects an appreciable increase in revenue over the previous year to more than EUR 1.4 billion, while EBIT should hold steady at the previous year’s level.
CFO Volker Walprecht will be leaving the Company at the end of the Annual General Meeting on May 20, 2015.
Mr. Gérard Cordonnier will be new CFO of Grammer AG effective June 1, 2015
CFO Volker Walprecht is stepping down from his position as the Company’s Chief Financial Officer. The Supervisory Board has accepted Mr. Walprecht’s request for early release from his contract at the end of May 2015. Accordingly, Mr. Walprecht will be relinquishing his position on the Executive Board for personal reasons at the end of the upcoming Annual General Meeting on May 20, 2015. Mr. Walprecht’s activities are being terminated in full agreement with the Supervisory Board. The Supervisory Board wishes to thank Mr. Walprecht for his valuable contribution to Grammer AG and wishes him all the best both personally and professionally for the future.
To replace Mr. Walprecht, the Supervisory Board has appointed Mr. Gérard Cordonnier new CFO of Grammer AG effective June 1, 2015. He will be joining Chief Executive Officer Hartmut Müller and Manfred Pretscher on the Company’s Executive Board, which will thus continue to comprise three members.
Mr. Cordonnier studied economics and law at the University of Namur in Belgium as well as at renowned business schools in London (LBS) and Paris (Insead). He started his career with the Continental Group, where apart from a small interruption he spent 30 years before leaving the company. During his long tenure at Continental, Mr. Cordonnier held various positions in executive management as well as on the group’s management board, thus helping to shape the Continental Group in its quest to become one of the world’s largest and most successful automotive suppliers. As the new Chief Financial Officer, Mr. Cordonnier will be able to leverage his long-standing experience as a financial and controlling expert, thus generating new and important impetus for Grammer Group for the continued successful implementation of the global growth strategy.
GRAMMER AG, Amberg, Germany, specializes in the development and production of components and systems for automotive interiors as well as driver and passenger seats for offroad vehicles. In the Automotive Division, we supply headrests, armrests and center console systems to premium automakers and automotive system suppliers. The Seating Systems Division comprises the truck and offroad seat segments as well as train and bus seats
Grammer is represented in 20 countries worldwide with a workforce of over 10,500 employees across its 30 subsidiaries.
The GRAMMER share is listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system, Xetra, as well as in over-the-counter trading at the Stuttgart, Berlin and Hamburg stock exchanges.