Ad-Hoc Announcement pursuant to Section 15 of the German Securities Trading Act (WpHG):
INDUS publishes preliminary figures for 2006 financial year:
- Positive sales and operating earnings performance
- Reassessment of financial assets
- Dividend policy to be maintained
Bergisch Gladbach, January 31, 2007 - INDUS Holding AG (ISIN DE0006200108) expects to post a positive operating performance for 2006 once again. Sales and EBITDA will exceed the figures reported for the previous year.
In addition to the 2006 results, the Board of Management and Supervisory Board of INDUS have also held extensive discussions concerning the company’s strategy and its implications for the valuation of the company’s financial assets. Particularly in view of the weak performance in the automotive industry segment, the management bodies of INDUS have decided to reassess the financial assets. This is expected to result in extraordinary write-downs of financial assets amounting to more than Euro 80 million at the holding company (AG). This step will enable INDUS to account for current risks, as well as for valuation risks relating to the coming years. The charge resulting from the write-downs is to be partly offset by withdrawals from revenue reserves to enable the company to maintain its consistent dividend policy.
In terms of its strategy, INDUS will maintain its broad diversification of investments in order to offset risks between the various industries and segments in its operating business. The capital is employed with the objective of achieving long-term earnings stability for the overall portfolio.
INDUS has increased its investment in the construction industry in recent years, while investment in traditional automotive suppliers has reduced on account of the increasing pressure on margins. This cautious assessment is fully confirmed by current market developments. No sustainable improvement in the earnings situation of this segment is currently to be expected.
This capital management strategy nevertheless means that the values of the companies in the various segments have shown different developments. Account also has to be taken of these developments, and especially of future expectations, in the form of adjustments to balance sheet disclosures. The reduction in the amounts stated in the 2006 balance sheet is offset by a considerable increase in company values resulting from the improved earnings power of other segments. In contrast to previous years, however, the German Commercial Code (HGB) no longer allows this to be factored into the adjustments to the balance sheet figures.
Based on initial calculations, the consolidated sales of INDUS for the 2006 financial year rose by over 10 % from Euro 735 million to more than Euro 820 million. The Group’s EBITDA also surpassed the previous year’s figure of Euro 121.9 million. The extraordinary write-downs on goodwill at the Group will be considerably lower than those at the holding company (AG). This lower level of amortization is principally due to the conservative valuation of goodwill in previous years upon the consolidation in accordance with IFRS. Consolidated net income is therefore expected to exceed Euro 20 million (previous year: Euro 26.9 million).
Following the implementation of these measures, INDUS still has a high equity ratio of more than 50 % at the holding company (AG) and liquidity of Euro 87 million at the Group as of 12.31.2006. This means that INDUS continues to report healthy balance sheet ratios and has a very comfortable financial cushion, enabling it to successfully maintain its existing corporate strategy.
Given that the liquidity and operating earnings performance are not affected by the adjustments to the balance sheet, the Board of Management and Supervisory Board intend to maintain their consistent, earnings-based dividend policy. For the 2007 financial year, INDUS expects to achieve sales growth and a further improvement in its earnings performance.
INDUS Holding AG, Kölner Str. 32, 51429 Bergisch Gladbach, ISIN: DE0006200108
Listed: Geregelter Markt in Düsseldorf and Frankfurt (Prime Standard); Freiverkehr in Berlin-Bremen, Hamburg, München and Stuttgart
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