Business News

Ad hoc: Dramatic Revenue Downturn Leaves Marks on Earnings

Tuesday 05. May 2009 - The technotrans Group posted revenue of only € 23.2 million in the first quarter of 2009. This represents an overall fall of 37.7 percent (previous year € 37.3 million).

As latterly expected, revenue for the Technology segment was virtually halved compared with the previous year (minus 49.2 percent from € 28.0 million to € 14.2 million). These figures reflect the order books of printing press manufacturers worldwide, but the ongoing reduction in inventories by OEMs is a further burden.

For the first three months an operating loss (EBIT) of € 0.9 million was posed (previous year profit of € 3.0 million). Nevertheless, the result was already balanced at this level in the final month of the quarter, and the break-even point therefore was brought down relatively swiftly in line with the lower level of revenue, as was intended.

After interest (€ 0.3 million) and taxes, a net loss for the period of € 1.2 million is reported. This corresponds to earnings per outstanding shares of € -0.19 (previous year € 0.26).

At March 31, the technotrans Group employed a total of 729 persons (March 31, 2008: 823). Taking account of the temporary workers that technotrans was employing in the first few months of the past financial year, the goal of reducing personnel capacity worldwide initially by up to 15 was therefore achieved ahead of schedule.

Cash flow developed satisfyingly since the start of the financial year. The changes in working capital had a positive effect, with the result that the net cash from operating activities already reached € 5.5 million in the first quarter of the new financial year (previous year € -2.5 million). Bearing in mind that the investment volume was much lower than in the previous year and other financing activities were scaled back, cash outflows in the first quarter were much lower than in the prior-year reference period. Free cash flow therefore reached € 5.1 million in the first quarter, whereas it had been negative at € -4.6 million at the corresponding point of the previous year. On balance, liquidity at the end of the period improved to € 10.7 million, an increase of 44.7 percent on the prior-year quarter (€ 7.4 million).

Outlook

Management believes that the development of the industry is still too volatile to make any sensible forecasts for the current financial year. Nevertheless, from where technotrans currently stands it appears possible that revenue for 2009 could be in the order of € 85 to 95 million; this would be € 50 to 60 million down on the previous year. There are still no signs of a recovery but there are certain signs that the company might be able to maintain the volume at the current level over the coming months. Still it is too early to exclude a further downturn in revenue as the year progresses.

As well as the package of measures launched last year to safeguard and optimise profitability, management has identified a number of other projects to streamline group structures; the combined effect is that technotrans is using every possible means of adjusting appropriately to market changes. The positive effects will be felt also in 2010, irrespective of whether there are signs of an upturn in economic activity by then.