Corporate | 12 November 2014 06:53

Grammer AG: Grammer reports positive development in revenue and profit in the third quarter. Fourth consecutive revenue record expected for fiscal year 2014.

Grammer AG / Key word(s): Quarter Results

12.11.2014 / 06:53

Grammer reports positive development in revenue and profit in the third quarter. Fourth consecutive revenue record expected for fiscal year 2014.

4 percent increase in revenue to EUR 993.8 million in the first nine months

With EUR 43.1 million EBIT reached previous year’s level

Net profit and earnings per share substantially up on the previous year

Amberg, November 12, 2014 – Grammer AG, a leading global supplier of seating systems for commercial vehicles and automotive interiors, was able to raise its Group revenue by over 4 percent to EUR 993.8 million in the first nine months of 2014 (2013: 952.9). This includes negative currency-translation effects of around EUR 24 million. At EUR 43.1 million, earnings before interest and taxes (EBIT) remained steady despite the continued heavy up-front costs required for implementing the global expansion strategy (2013: 43.3). With revenue higher, the EBIT margin thus contracted slightly to 4.3 percent (2013: 4.5). On a very encouraging note, net profit rose by a disproportionately strong 8 percent to EUR 25.8 million (2013: 23.9). Earnings per share also rose by more than 10 percent over the previous year from EUR 2.15 to EUR 2.37.

After a moderate second quarter, Group revenue picked up again in the third quarter, climbing by 4.4 percent over the previous year to EUR 324.2 million in the period from July to September (2013: 310.4). Influenced by the aforementioned up-front costs, EBIT came to EUR 12.2 million (2013: 13.2) and, as expected, was slightly down on the previous year. On the other hand, net profit rose by a very substantial 14 percent to EUR 7.5 million (2013: 6.6).

“Despite increasingly disparate market conditions, Grammer has remained on an impressive growth trajectory. Even with the continued heavy up-front costs for the global growth strategy and structural optimizations, our operating profit remained at the previous year’s level and net profit even rose substantially,” said Hartmut Müller, CEO of Grammer AG.

Automotive Division spurred by growth impulses
With revenue up by encouraging 5.7 percent to EUR 642.1 million (2013: 607.2), the Automotive Division, which develops and produces center consoles, headrests and armrests, once again grew very dynamically. This favorable performance was particularly supported by sustained strong demand in the premium passenger vehicle segment and further expansion of the group’s market position for consoles in particular. EBIT was again influenced by planned costs in connection with ongoing optimization of production structures in Eastern Europe as well as necessary capacity expansion in all regions. As expected, divisional EBIT declined over the same period of the previous year, totaling EUR 21.4 million at the end of the first nine months (2013: 24.7). The EBIT margin was 3.3 percent (2013: 4.1).

The Automotive Division posted revenue of EUR 214.2 million in the third quarter (2013: 201.1), up 6.5 percent. Reflecting the effects of the up-front costs, EBIT fell slightly to EUR 6.3 million compared with the previous year (2013: 6.9) in line with expectations.

Seating Systems Division boosting profit substantially
In the period under review, revenue in the Seating Systems Division was slightly higher than in the previous year in a still volatile market environment. Reflecting macroeconomic conditions in the main markets, the Division’s business segments again performed disparately. The continued muted conditions in the Brazilian truck market and the now weaker demand for agricultural machinery took their toll on revenue and profit. However, these negative market influences were partially offset by the encouraging performance of materials handling and aftermarket business. Grammer was able to maintain or even slightly expand its good market position in all segments and regions. Overall, revenue in the Seating Systems Division came to EUR 369.0 million in the first nine months, 2.2 percent higher than in the same period of the previous year (2013: 361.1). The Division’s earnings proved to be very encouraging, with EBIT rising significantly by 11.1 percent to EUR 30.0 million (2013: 27.0), translating into an operating margin of 8.1 percent at the end of the first nine months (2013: 7.5).

Despite the sustained market weakness in Brazil, the recent negative momentum in the European truck market and the slowdown of the global agricultural machinery markets, the Seating Systems Division was able to post a small increase in revenue to EUR 116.0 million (2013: 115.0) in the third quarter. On the other hand, EBIT was burdened by the aforementioned market factors in the third quarter, reaching EUR 8.2 million and thus falling slightly short of the previous year (2013: 8.7). The EBIT margin for the quarter came to 7.1 percent (2013: 7.6).

Intensive ongoing expansion and optimization measures
At EUR 32.2 million, capital spending by the Grammer Group in the first nine months of 2014 was higher versus previous year (2013: 31.0). Investments were mainly focused on expanding production capacity in all regions and optimizing production structures in Eastern Europe.

Increased equity and equity ratio
The Grammer Group’s equity rose to EUR 234.8 million as of September 30, 2014 (2013: 225.1), with the equity ratio coming to around 29 percent, unchanged over the previous year (2013: 29). Net debt as of September 30, 2014 was EUR 120.6 million (2013: 110.5) and higher than previous year due to funding of expansion spending and structural enhancements. Accordingly, this translates into gearing of 51 percent (2013: 49).
Increased headcount due to growth
As of September 30, 2014, Grammer had 10,499 employees around the world (2013: 9,580). In the Automotive Division, recruiting particularly focused on the non-German plants. The Division headcount rose to 6,444 (2013: 5,685) as a result of the expansion of production capacities primarily in the Czech Republic and Mexico, additions to internal sewing capacity in Serbia and new product launches. The Seating Systems Division had a total of 3,796 employees as of the reporting date (2013: 3,648).

Full-year guidance for 2014 confirmed
The numerous optimization and expansion measures at the plants in China, North and South America and Eastern Europe are expected to continue influencing operating profit in the Automotive Division in particular in the final quarter of the year. Overall, the Executive Board still considers the outlook for the Grammer Group to be favorable in 2014. Even so, the macroeconomic risks as well as the market risks to which Grammer is exposed have risen over the past few weeks.
The Executive Board still projects an appreciable increase in revenue over the previous year to more than EUR 1.3 billion. Despite planned up-front costs of around EUR 7 – 10 million in 2014 as a whole, the Grammer Group expects operating profit (EBIT) to more or less match the previous year.

Company Profile
Grammer AG, Amberg, Germany, is specialized in the development and production of components and systems for automotive interiors as well as driver and passenger seats for offroad vehicles (tractors, construction machinery, forklifts), trucks, buses and trains. Our Seating Systems division comprises the truck and offroad seat segments as well as train and bus seating. In the Automotive division, we supply headrests, armrests and center console systems to premium automakers and automotive system suppliers.

Grammer is represented in 20 countries worldwide with a workforce of more than 10,000 employees across its 30 subsidiaries.

Grammer shares are listed in the SDAX segment of the German Stock Exchange, and are traded on the Munich and Frankfurt stock exchanges, via the Xetra electronic trading platform and on the OTC markets of the Stuttgart, Berlin and Hamburg stock exchanges.

Contact:
GRAMMER AG
Ralf Hoppe
Phone: 0049 9621 66 2200
investor-relations@grammer.com

12.11.2014 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

Language:	English
Company:	Grammer AG
	Postfach 14 54
	92204 Amberg
	Germany
Phone:	+49 (0)9621 66-0
Fax:	+49 (0)9621 66-1000
E-mail:	investor-relations@grammer.com
Internet:	www.grammer.com
ISIN:	DE0005895403, DE0005895403
WKN:	589540, 589540
Indices:	SDAX
Listed:	Regulierter Markt in Frankfurt (Prime Standard), München; Freiverkehr in Berlin, Düsseldorf, Hamburg, Stuttgart

End of News DGAP News-Service

296613  12.11.2014