Schaltbau Holding AG closes first half-year with slight sales increase and stable profitability despite COVID-19 effects

- Group revenues increase by 2.6% to EUR 239.3 (January - June 2019 like-for-like: EUR 233.2 million)

- EBIT margin of 4.0% at prior-year level (like-for-like)

- Overall, only a slight COVID-19 influence on the order intake of the Schaltbau Group of EUR 270.4 million (January - June 2019 like-for-like: 276.4 million euros)

- Forecast for 2020 under the influence of the COVID-19 pandemic confirmed: Group revenue between EUR 460 million and EUR 500 million, Group EBIT margin around 4%

Munich, 30 July 2020 - Today, the Executive Board of Schaltbau Holding AG [ISIN: DE000A2NBTL2] published its figures for the first half-year of 2020 and confirmed its outlook for the financial year 2020.

Accordingly, business development in the four segments continued to be uneven in the first half of the year and, as expected, influenced by the COVID-19 pandemic. Order intake fell by EUR 6.0 million to EUR 270.4 million (previous year like-for-like: EUR 276.4 million). Nevertheless, the book-to-bill ratio remained high at 1.1 (previous year: 1.2). At the same time, the order backlog rose by 5.0% to EUR 517.1 million at the end of the second quarter (previous year like-for-like: EUR 492.2 million).

"We also felt the economic impact of the COVID-19 pandemic in the second quarter," said Dr Albrecht Köhler, CEO of Schaltbau Holding AG. "However, with our countermeasures in the Schaltbau and Bode segments concerned, we were able to keep the overall earnings position stable. With the continued positive development in the Pintsch and SBRS segments, we achieved our milestone for the year as a whole."

In the first half of the year, business performance varied across the four segments and, as expected, was impacted by the COVID-19 pandemic. Although order intake (adjusted for Schaltbau Sepsa and Alte, which were both deconsolidated in the previous year) fell by EUR 6.0 million to EUR 270.4 million, the book-to-bill ratio recorded was nevertheless at a high level of 1.1 (January - June 2019: 1.2).

With a 16.0 % decline in order intake to EUR 135.3 million, the Bode segment was mainly responsible for this development (January - June 2019: EUR 161.1 million). On a like-for-like basis, the decrease was 8.6 % (January - June 2019: EUR 148.1 million), mainly attributable to the Bus and Automotive product groups in the wake of the COVID-19 pandemic due to lower order volumes from major bus and car manufacturers caused by temporary plant closures as well as negative market developments in the commercial vehicle and passenger bus sectors. However, order intake in the Rail line of business remained stable. Segment revenue was 9.2 % down at EUR 124.7 million (January - June 2019: EUR 137.3 million). On a like-for-like basis, however, revenue went up by 8.0 % (January - June 2019: EUR 115.5 million). It should be noted that in the previous year, provisions for outstanding guarantees of EUR 6.7 million were recorded as a reduction in sales. The increase is mainly reflecting strong growth in Rail business, which more than offset significant decreases in Automotive business. In the same period one year earlier, revenue had been severely impacted by production interruptions at the Schaltbau Group's Kassel plant due to flooding. Segment EBIT increased to EUR 0.2 million (January - June 2019: negative EUR 1.1 million; like-for-like: negative EUR 0.2 million), equivalent to an EBIT margin of 0.2 % (January - June 2019: negative 0.8 %; like-for-like: negative 0.2 %). A significantly poorer product mix and lower productivity due to the adverse effects of COVID-19 had a significant impact on earnings development.

Order intake for the Schaltbau segment was also down by 18.5 % to EUR 72.1 million (January - June 2019: EUR 88.5 million). The sharp year-on-year drop was primarily attributable to the far lower volume of orders placed by all customers operating in markets affected by lockdowns. In addition to lower business volumes with OEMs and rail market operators, industrial customers were also severely affected by the lockdowns as well as by restrictions on the travel necessary to install and commission their products. In the second quarter 2020, above all at Schaltbau GmbH, the lower volumes also made themselves felt through delayed call-ups of existing orders and therefore lower revenue. At EUR 68.1 million, segment revenue was 14.1 % down for the six-month period (January - June 2019: EUR 79.3 million), in part also due to plant closures. In line with the decline in revenue, segment EBIT fell by EUR 2.4 million to EUR 11.9 million (January - June 2019: EUR 14.3 million), resulting in an adjusted EBIT margin of 17.3 % (January - June 2019: 17.9 %).

In the Pintsch segment, order intake rose sharply by 37.0 % to EUR 42.2 million (January - June 2019: EUR 30.8 million), with growth coming mainly from the segment's level crossing, axle counting and signalling technology product groups. Segment revenue also rose at an above-average rate of 18.0 % to EUR 34.8 million (January - June 2019: EUR 29.5 million), primarily due to the increased sale of level crossing and axle counting systems to customers in China. Segment EBIT slipped by EUR 0.3 million to EUR 2.1 million (January - June 2019: EUR 2.4 million). In the first half of the previous fiscal year, segment EBIT was positively impacted by the billing of completed railway stations relating to the Platform Screen Doors project in Brazil as well as for other completed projects and subsequent deliveries for level crossing systems. The EBIT margin for the first six months of 2020 therefore came in at 6.1 % (January - June 2019: 8.0 %).

With growth of 129.7 % to EUR 20.9 million, order intake for the SBRS segment was by far the most dynamic (January - June 2019: EUR 9.1 million), largely driven by E-Mobility business. Segment revenue rose by 32.6 % to EUR 11.8 million (January - June 2019: EUR 8.9 million) during the period under report and was also attributable to E-Mobility business. Segment EBIT went up by EUR 0.5 million to EUR 1.3 million (January - June 2019: EUR 0.8 million), giving an EBIT margin of 10.5 % (January - June 2019: 8.3 %).

Reported Group revenue fell by 6.2 % to EUR 239.3 million during the reporting period, largely due to the deconsolidation of Alte and the Sepsa Group in the first half of 2019 (January - June 2019: EUR 255.0 million; like-for-like: EUR 233.2 million). Total output also decreased accordingly to EUR 250.1 million (January - June 2019: EUR 260.9 million; like-for-like: EUR 239.5 million). With other operating income significantly lower at EUR 6.9 million, partially in connection with the reversal of provisions (January - June 2019: EUR 12.3 million; like-for-like: EUR 10.8 million) and a 2.1 % drop in the cost of materials to EUR 131.8 million (January - June 2019: EUR 134.7 million; like-for-like: EUR 123.7 million), gross profit fell by 9.6 % to EUR 125.2 million (January - June 2019: EUR 138.5 million; like-for-like: EUR 126.5 million). Personnel expense for the six-month period decreased by EUR 4.1 million from EUR 89.6 million to EUR 85.5 million. Adjusted for Sepsa and Alte, which were both deconsolidated in 2019, personnel expense went up by 5.4 % or EUR 4.4 million. Other operating expenses decreased by 33.2 % to EUR 21.9 million (January - June 2019: EUR 32.7 million) due to some reduced costs in light of the COVID-19 pandemic and restructuring expenses recognised in the previous year. Taking into account the 3.5 % rise in depreciation and amortisation to EUR 7.9 million (January - June 2019: EUR 7.6 million), profit before financial result and taxes (EBIT) amounted to EUR 9.6 million (January - June 2019: EUR 8.5 million). After deduction of the improved financial result of negative EUR 3.0 million (January - June 2019: negative EUR 3.6 million) and income taxes of EUR 3.0 million (January - June 2019: EUR 1.1 million), the Schaltbau Group generated a net profit for the period of EUR 4.0 million (January - June 2019: EUR 4.6 million). Of this amount, EUR 1.5 million was attributable to minority interests (January - June 2019: EUR 2.1 million) and EUR 2.5 million to the shareholders of Schaltbau Holding AG (January - June 2019: EUR 2.5 million). Diluted and undiluted earnings per share were unchanged at EUR 0.29.

Total assets rose by EUR 7.4 million to EUR 408.6 million (31 December 2019: EUR 401.2 million) during the six-month period under report. Non-current assets decreased slightly to EUR 161.2 million (31 December 2019: EUR 164.2 million), primarily due to reductions in intangible assets to EUR 48.7 million, financial assets to EUR 2.1 million (31 December 2019: EUR 3.6 million) and deferred tax assets to EUR 12.3 million (31 December 2019: EUR 13.4 million). At EUR 247.3 million, current assets were EUR 10.3 million higher than at the end of the previous year (31 December 2019: EUR 237.0 million). Whereas inventories increased to EUR 127.1 million (31 December 2019: EUR 109.7 million), trade accounts receivable remained practically unchanged at EUR 83.4 million (31 December 2019: EUR 83.6 million). Furthermore, cash and cash equivalents decreased to EUR 15.6 million (31 December 2019: EUR 25.2 million).

Group equity totalled EUR 94.4 million at the end of the reporting period (31 December 2019: EUR 97.4 million). Non-current liabilities rose slightly to EUR 148.0 million (31 December 2019: EUR 146.5 million), primarily due to the increase in financial liabilities to EUR 96.3 million (31 December 2019: EUR 92.7 million) as a consequence of higher cash requirements for operations. By contrast, pension provisions decreased to EUR 38.3 million (31 December 2019: EUR 39.0 million), other non-current provisions to EUR 1.3 million (31 December 2019: EUR 2.2 million) and non-current personnel provisions to EUR 4.9 million (31 December 2019: EUR 5.5 million). Current liabilities went up by EUR 8.8 million or 5.6 % to EUR 166.1 million (31 December 2019: EUR 157.3 million). This development was primarily due to increases in trade accounts payable to EUR 58.7 million (31 December 2019: EUR 50.4 million) and in other contract liabilities to EUR 22.5 million, whereas current financial liabilities decreased to EUR 11.2 million (31 December 2019: EUR 14.7 million) and current personnel provisions to EUR 10.7 million.

As a result of the COVID-19 pandemic, the Syndicated Credit Agreement originally concluded in 2019 under the lead management of Commerzbank AG and UniCredit Bank AG was increased by EUR 60 million to EUR 172 million on 19 June 2020 by using the Special Credit Programme 855 ("Direct Participation for Syndicated Financing") provided by the KfW Group. The existing six financing partners were supplemented by the KfW Group as consortium bank.

Drawdowns thereon are reported as non-current liabilities.

Cash flows from operating activities totalled EUR 3.8 million in the reporting period (January - June 2019: negative EUR 8.8 million). While the profit before financial result and taxes of EUR 9.6 million (January - June 2019: EUR 8.5 million), the lesser increase in current assets amounting to EUR 21.1 million (January - June 2019: increase of EUR 37.3 million) and the greater increase in liabilities to EUR 16.1 million (January - June 2019: EUR 1.0 million) all had a positive impact compared to the previous year, the EUR 5.7 million decrease in provisions (January - June 2019: increase of EUR 14.4 million) had a negative impact.

Cash flows from investing activities decreased slightly to negative EUR 6.8 million (January - June 2019: negative EUR 6.7 million). Higher payments for investments in intangible assets and property, plant and equipment were offset by lower proceeds from the disposal of companies.

Free cash flow during the period ended 30 June 2020 was negative EUR 3.0 million (January - June 2019: negative EUR 15.4 million).

The negative change in total cash flows from financing activities from positive EUR 6.5 million to negative EUR 6.8 million was mainly attributable to the repayment of promissory notes on the one hand and proceeds from the utilisation of the overdraft facility under the terms of the Syndicated Credit Agreement on the other.

"At the end of the first half of the year, we confirm our forecast for the current fiscal year, which we have already explained in detail in the Group Management Report 2019 under the influence of the COVID 19 pandemic," said Thomas Dippold, CFO of Schaltbau Holding AG. "We are thus sticking to our original assessment of the economic course of this crisis."

Therefore, in view of the ongoing COVID-19 pandemic, the Executive Board continues to predict Group revenue of between EUR 460 million and EUR 500 million and a Group EBIT margin in the region of 4% for the fiscal year 2020 against the background of a changed segment and product mix.

It also expects order intake to be within the range of EUR 520 million to EUR 540 million.

The unaudited condensed interim consolidated financial statements for the first half-year 2020 of the company are available to download from the website at: https://ir.schaltbaugroup.com.

About the Schaltbau Group
Schaltbau Holding AG (ISIN: DE000A2NBTL2) is listed in the Prime Standard segment of the regulated market of Deutsche Börse AG in Frankfurt am Main. With annual Group revenue in the region of EUR 500 million and around 3,000 employees, Schaltbau is an internationally leading supplier of systems and components in the field of transportation technology and the capital goods industry. With Schaltbau, Bode, Pintsch and SBRS as their core brands, Schaltbau Group companies develop a wide range of high-quality technologies and customer-specific technological solutions for rolling stock, rail infrastructure, road vehicles and commercial vehicles. As one of the few specialists for smart DC energy concepts, the Schaltbau Group is also a driver of innovation for the fast-growing markets of tomorrow such as new mobility, new energy and new industry. To find out more about the Schaltbau Group, go to: https://schaltbaugroup.com