INDUS holds its ground in difficult environment

Bergisch Gladbach, April 27, 2009 – In the fiscal year 2008, SDAX-listed INDUS Holding AG successfully held its ground in a difficult environment. Commenting on the economic turmoil at today’s annual accounts press conference, CEO Helmut Ruwisch said: “The quickly accelerating recession made the second half of the year a particularly challenging period also for our company.”

The EBIT margin, one of the Group’s key performance indicators, reached 9.4%, which was only just below the target range of 10% to 12%. According to the CEO, the main tasks in 2009 will be to master the crisis and to seize opportunities for acquisitions. “In view of our comfortable cash position, we see good opportunities for further growth and acquisitions in 2009 and 2010,” said a confident Helmut Ruwisch. In October 2008, INDUS already acquired the KÖSTER Group, a medium-sized systems supplier of connecting elements based in Ennepetal.

2008 a good fiscal year against the background of the crisis
Consolidated sales of the medium-sized Group rose by 1.5% to EUR 928.4 million in fiscal 2008 (previous year: EUR 915.0 million). This was primarily attributable to the rise in foreign sales, which climbed to EUR 378.8 million. As a result, foreign sales now account for an increased share of 40.8% of total Group sales.

At EUR 134.2 million, earnings before interest, taxes, depreciation and amortisation (EBITDA) were just below the previous year’s level of EUR 143.1 million. In spite of the fact that commodity and energy prices stayed at a high level until well into the second half of the year, the portfolio companies managed to improve material efficiency in their production processes through optimisation measures. As a result, the cost of materials as a percentage of sales increased only moderately to 47.8% (previous year: 47.3%). Personnel expenses as a percentage of sales also rose moderately to 26.4% (previous year: 25.9%) due to high collective pay rises.

Earnings before interest and taxes (EBIT) declined by 14.9% to EUR 87.1 million (previous year: EUR 102.4 million), primarily due to amortisation for impairment as a result of the mandatory impairment tests. At EUR 6.8 million (previous year: EUR 0.0 million), these amortisations mainly related to the automotive industry and the mechanical engineering sector. Net interest income rose to EUR 30.5 million (previous year: EUR 25.0 million) – mainly due to the fair value measurement of derivatives – which resulted in earnings before taxes of EUR 56.7 million (previous year: EUR 77.4 million). Net income for the year declined to EUR 27.9 million (previous year: EUR 49.9 million) based on a much higher tax ratio of 46.2%.

Dividend of EUR 0.80 planned
The Management Board and the Supervisory Board proposed to distribute a dividend of EUR 0.80 (previous year: EUR 1.20) from the holding company’s consolidated net income of EUR 30.1 million. INDUS thus maintains its profit retention policy. “Our target is an average payout ratio of approx. 40%,” said Helmut Ruwisch. In 2008, it stands at 49%. In view of the high uncertainty about the future economic trend and the company’s aim to expand its investment portfolio anti-cyclically, the proposed profit retention will give the Group greater financial scope.

2009 will focus on anti-cyclical action and crisis management
“We have taken swift and comprehensive action in the past months and adjusted capacities to the changed order situation by taking advantage of all available means,” Ruwisch said with regard to the present situation. “Economic activity will remain weak in 2009, but while we must take the necessary short-term measures, we should not forget our strategic-long-term goals.” In the coming months, the comfortable cash position of approx. EUR 95 million will increasingly be used to seize opportunities that arise in the equity investment market.

Outlook on 2009
Against the background of huge uncertainty about the future economic situation in Germany and the company’s key international output markets, a reliable quantitative forecast is not possible at present. Overall, the Management Board believes that INDUS will benefit from its broad diversification and not come to feel the full effects of the weak economy. “We expect to operate in an extremely challenging environment. It remains to be seen if and to what extent the economy recovers in the second half of 2009. At this stage, we assume that sales and earnings will be noticeably below the level of the past two boom years,” said Helmut Ruwisch.



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