INDUS achieves positive operating result
High liquidity forms solid foundation and opens up growth opportunities
Bergisch Gladbach, May 27, 2009 - The global economic downturn left its marks on the performance of INDUS Holding AG in the first three months of 2009. “Our portfolio companies performed relatively well in spite of the recessionary environment,” CEO Helmut Ruwisch commented on the quarterly result with a view to the poor overall performance of the manufacturing sector. “We benefited from the diversification in our portfolio. INDUS is feeling the effects of the economic crisis, but only on a minor scale.”
Consolidated sales were down by 17.3% on the first quarter of 2008 to EUR 178.4 million (previous year: EUR 215.6 million). By comparison, the sales volume in the manufacturing sector declined by a much higher rate in Q1 2009; according to the Federal Statistical Office, it was 21.9% below the previous year’s level (adjusted for the number of working days). INDUS’s automotive segment was hit particularly hard by the drop in demand, whereas the other three core segments – construction, mechanical engineering and consumer goods - showed a relatively robust performance. International sales accounted for 42.2% of total sales, up from 39.6% in the previous year.
On the cost side, the cost of materials declined at a disproportionately high rate of 23.6% to EUR 80.8 million (previous year: EUR 105.8 million) due to the drop in commodity and energy prices. As a result, the cost of materials as a percentage of sales decreased from 49.1% to 45.3%. Personnel expenses declined by 4.4% to EUR 55.9 million (previous year: EUR 58.5 million). The positive effect of the measures initiated by the company in autumn 2008 to adjust its capacity to the changed economic activity - some of which have already been completed - will be felt even more strongly with a certain delay in the following months. Besides the timely adjustment of capacities and costs, greater flexibility is a key objective for the future.
In spite of the swift adjustment measures initiated by the company, the effects of the above-mentioned decline in sales could not be offset. As a result, earnings before interest and taxes (EBIT) declined to EUR 8.9 million (previous year: EUR 22.8 million). Net income for the period after minority interests amounted to EUR 0.1 million (previous year: EUR 8.4 million).
“We achieved a respectable result in what was an extremely challenging first quarter,” Ruwisch emphasised. “We will continue to cut costs aggressively and take comprehensive measures to strengthen our Group for the future." These measures include the ongoing flexibilisation of personnel capacities and a more restrictive investment policy. In addition, the company is confident that effective restructuring programmes will clearly cut costs at some of its portfolio companies. Stricter working capital management and the planned retention of EUR 7.1 million with the help of a reduced dividend will also help to guarantee continued high liquidity.
The economic situation in Germany and the main output markets continues to be marked by high uncertainty. Against this background, the Management Board of INDUS Holding AG expects sales and earnings to remain clearly below the previous year’s levels. At present, it is impossible to issue a reliable forecast for the further course of the year. “We believe, however, that a bottom may be found in the second quarter, with a modest turnaround possible towards mid-year,” said a moderately optimistic Helmut Ruwisch.
Liquid funds in excess of EUR 80 million represent a comfortable financial basis and a solid foundation for INDUS Holding AG; in addition, they will open up opportunities for expanding the investment portfolio against the background of declining valuation standards.
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