INDUS coping well with the crisis
Positive earnings in the first six months thanks to aggressive countermeasures
Bergisch Gladbach, August 27, 2009 - INDUS Holding AG generated sales revenues of EUR 365.5 million in the first half of 2009 (previous year: EUR 462.1 million). While the Group was unable to isolate itself from the adverse impact of the economic crisis, it generated a clearly positive result, as reflected in earnings before interest and taxes (EBIT) of EUR 20.8 million and an EBIT margin of 5.7%. It should also be noted that the result includes non-recurrent restructuring expenses in an amount of approx. EUR 3 million.
The cost of materials fell from EUR 222.8 million to EUR 161.7 million, not least due to the decline in commodity and energy prices. Personnel expenses dropped from EUR 120.0 million to EUR 113.4 million in spite of extraordinary restructuring expenses.
As at mid-year 2009, INDUS reported a moderately higher operating cash flow of EUR 33.5 million (previous year: EUR 31.5 million) and continued high liquidity of EUR 108.3 million. In spite of a general increase in borrowing costs, operating interest income remained stable at EUR 14.0 million (previous year: EUR 14.1 million). Net debt declined by a moderate EUR 4 million.
Rapid crisis intervention at the beginning of the year helps to stabilise earnings
At the end of the past fiscal year, INDUS already initiated measures to maintain the profitability of the portfolio companies. The restructuring measures primarily affected the automotive industry and mechanical engineering segments. The companies initially cut back the number of temporary workers, did not renew expiring contracts and reduced employees’ overtime and leave accounts. A number of subsidiaries applied for short-time work in order to keep their qualified workforces. At present, some 30% of the INDUS staff is on short-time work, which will continue until 2010 in most cases.
In some companies, staff adjustments were nevertheless inevitable. As a result, the number of the Group’s employees declined by 428 to 5,434 as of June 30, 2009. INDUS expects the order situation to stabilise in the second half of 2009, when the capacity adjustments will largely be completed. The resulting positive effects on costs are expected to be felt in the third and fourth quarter of 2009.
Improved order situation in July indicates turnaround
The figures for the first half of 2009 support the projections of INDUS Holding AG, according to which sales and earnings will remain clearly below the prior year level. CEO Helmut Ruwisch has identified a turnaround: “Should the current recovery stabilise further, INDUS expects business to improve in the second half of the year. We also believe that the comprehensive restructuring measures will be fully reflected in our results from the third quarter 2009 and slow down the decline in Group earnings.” Based on these assumptions, the Management Board expects full-year sales to decline by up to 20% and EBIT to come in between EUR 40 and 50 million. According to Helmut Ruwisch, this is an acceptable result against the background of the uniquely difficult environment.
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