DGAP-News: Grammer AG
/ Key word(s): Annual Results
Grammer confirms preliminary figures for 2019 and expects a significant slowdown in 2020
- Positive revenue development in both segments based on a strong first half of 2019
- Group revenue of 2.04 billion euros and operating EBIT totaling 77 million euros
- Production stops at customers in the automotive and commercial vehicle segments requiring capacity adjustments at Grammer plants in the first quarter 2020
- Due to the effects of the global COVID-19 pandemic, the forecast for the financial year 2020 has been suspended
Amberg, March 30, 2020 - The automotive supplier Grammer published its annual report for 2019 today and confirmed the preliminary figures for the year under review. According to the report, revenue grew by 9.5 percent or 177.2 million euros to 2.038 billion euros (2018: 1.861 billion euros). Growth was driven by both segments, whereby the first-time full consolidation of the American automotive supplier TMD, part of the group since October 2018, showed its effects in the Automotive segment.
The operating earnings before interest and taxes (operating EBIT), more significant from a business point of view, were 77.0 million euros, which represents a plus of 1.6 percent compared to the previous year's value of 75.8 million euros. The margin of the operating EBIT totaled 3.8 percent (2018: 4.1 percent). Earnings before interest and taxes (EBIT) amounted to 74.5 million euros, which represents an increase of 25.8 million euros compared to the previous year (2018: 48.7 million euros). Earnings after tax for the year under review amounted to 43.5 million euros, hence a rise of 20.3 million euros compared to the previous year's figure of 23.2 million euros. Undiluted earnings are calculated at 3.56 euros per share (2018: 1.90 euros).
"Despite a progressively weak sector development, the Grammer Group was able to achieve higher revenues in the past fiscal year under review. However, our growth slowed down in the second half of 2019 and the market situation continued to deteriorate at the beginning of this year," explains Thorsten Seehars, CEO of Grammer AG, on the subject of current developments. "The major challenges for our industry and the currently not foreseeable consequences of the global COVID-19 pandemic have already left a very clear mark on our business in the first quarter of 2020."
Automotive segment with growth after TMD Acquisition
The EBIT in the Automotive segment amounted to 51.0 million euros in the 2019 fiscal year and was thus 13.3 million euros or 35.3 percent above the previous year's figure of 37.7 million euros. Adjusted for foreign currency and one-off effects, operating EBIT amounted to 48.9 million euros, which is 12.1 million euros or 32.9 percent higher than the previous year's figure of 36.8 million euros. Despite the tense market situation in the automotive sector, the return on operating EBIT thus rose to 3.3 percent (2018: 2.8 percent).
Stable revenue in Commercial Vehicles in 2019
The segment EBIT fell by 11.4 million euros or 20.5 percent from 55.5 million euros to 44.1 million euros in the 2019 fiscal year. Operating EBIT fell by 10.8 million euros to 42.7 million euros. The return on operating EBIT fell to 7.0 percent (2018: 8.9 percent). The tense situation in the international truck and off-road vehicle markets was particularly noticeable in the second half of 2019. In addition to the demand drop, product mix and special expenses for relocations in China, as well as new product ramp-ups in the US, have had an impact on the return on EBIT.
Different development in the regions
COVID-19 pandemic burdens global economy and automotive industry
As a result of government orders, Grammer had to temporarily close several locations in China for some weeks during the first quarter. However, those plants have been able to resume production at the beginning of March. In the meantime, nearly all manufacturers have decided to temporarily close their production sites in Europe and the US. As a consequence thereof, the Executive Board of Grammer AG has decided to temporarily restrict or completely halt production at its locations as of March 23. At those locations that e.g. continue to supply customers in China, production will be maintained in line with expected demand.
At the end of March, the company, together with the employee representatives, resolved a comprehensive package of measures to adjust capacities, particularly at its automotive locations in Germany and the other European countries, to the declining demand. The package of measures envisages a reduction in production in Germany in line with customer call-offs and to increase the company's financial flexibility with the agreed short time working scheme. Details of the arrangements for the duration of the plant shutdowns are locally agreed due to site-specific differences. Comparable measures have been prepared and are also being implemented at production sites outside of Germany.
The Executive Board of Grammer AG has informed the Supervisory Board during the last meeting about its decision, to waive all its bonus payments for the years 2019 and 2020 in order to make a financial contribution in the current situation.
Intensification of the cooperation with Ningbo Jifeng
No guidance possible for the financial year 2020
The full annual report for the 2019 fiscal year can be found on the company's website at www.grammer.com in the Investor Relations section.
Grammer AG, based in Amberg, Germany, specializes in the development and production of components and systems for car interiors as well as driver and passenger seats with suspension for on- and off-road vehicles.
Phone: 0049 9621 66 2200
30.03.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Phone:||+49 (0)9621 66-0|
|Fax:||+49 (0)9621 66-1000|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Stuttgart, Tradegate Exchange|
|EQS News ID:||1010029|
|End of News||DGAP News Service|