Corporate | 4 November 2015 06:48

Grammer AG with substantial revenue growth in the third quarter

DGAP-News: Grammer AG / Key word(s): Quarter Results

2015-11-04 / 06:48

Grammer AG with substantial revenue growth in the third quarter

Group revenue up 6 percent, rising to EUR 1.06 billion in the first nine months

Full-year guidance for 2015 confirmed

Amberg, November 4, 2015 – Grammer AG’s report on the first nine months of 2015 shows a further substantial increase of 6.3 percent in Group revenue to EUR 1.06 billion (2014: 993.8 million). Once again, this top-line growth was driven by the Automotive Division, which continued to grow dynamically, whereas revenues in the Seating Systems Division remained under pressure from the persistent weakness of key regional markets.

Grammer generated an operating profit (EBIT) of EUR 29.7 million in the period from January through September 2015 (2014: 43.1). Throughout the year as a whole, Group EBIT has been influenced by slower business in the Seating Systems Division caused by the contraction of key submarkets as well as costs for global structural optimization and expansion measures in the Automotive Division in particular. The EBIT margin for the Group came to 2.8 percent (2014: 4.3). Net profit for the first nine months of 2015 came to EUR 16.7 million (2014: 25.8) and was thus also down on the previous year.

Third quarter revenue and EBIT in line with expectations
In the third quarter of 2015, the Grammer Group posted revenues of EUR 345.8 million, thus exceeding the previous year by a substantial 6.7 percent (2014: 324.2) due to the growth achieved in the Automotive Division. EBIT came to EUR 5.1 million in the third quarter (2014: 12.2) and therefore matched expectations for the development in the second half of 2015. As in the year to date, the lower EBIT compared with the previous year was due to market weakness in the Seating Systems Division, the sustained costs of new product start-ups as well as optimization and expansion measures. In addition, the seasonal summer shout-down days of automotive OEMs impacted earnings in July and August in particular.

Revenue in the Automotive Division up more than 15 percent
The Automotive Division posted revenues of EUR 740.9 million in the first nine months of 2015 (2014: 642.1). Accordingly, it continued to grow at a strong dynamic rate of 15.4 percent over the previous year, in particular driven by the launch of new models in all regions and the continued generally positive conditions in the automotive sector. However, as expected, these strong top-line gains did not yet feed through to operating margins due to the ramp-up costs customary in the automotive industry for new projects. The relocation and optimization activities at individual facilities, which continued in the course of the year and form key elements of Grammer’s growth strategy, also left traces on operating profit. Accordingly, EBIT in the Automotive Division came to EUR 17.5 million (2014: 21.4), translating into an EBIT margin for the division of 2.4 percent (2014: 3.3).

Division revenue reached EUR 246.0 million in the third quarter (2014: 214.2), accompanied by EBIT of EUR 3.1 million (2014: 6.3).

Seating Systems still impacted by weak markets
Revenues in the Seating Systems Division came to EUR 343.4 million in the first nine months of 2015 and were thus 6.9 percent down on the previous year (2014: 369.0). Business in this Division continued to be impacted by the persistent market weakness in key regions. In particular, global sales of agricultural machinery, the Brazilian truck market and the Chinese commercial vehicle market experienced drastic declines. The sharp reduction in vehicle production in some cases compared with the previous year resulted in correspondingly lower orders for Grammer seats, particularly in the high-end segment, which is characterized by higher margins. At EUR 19.5 million, segment EBIT thus fell short of the previous year (2014: 30.0). The EBIT margin came to 5.7 percent (2014: 8.1).

Revenues in the Seating Systems Division equaled EUR 110.3 million in the third quarter of 2015 (2014: 116.0). At EUR 3.5 million (2014: 8.2), EBIT was influences by the aforementioned factors as well as additionally planned capacity adjustment expenses in the core regions, thus matching the business performance forecasts for the second half of the year.

Capital spending adjusted in the light of market developments
As of September 30, 2015, the Grammer Group’s capital spending came to EUR 25.0 million, i.e. EUR 7.2 million or 22 percent down on the previous year (2014: 32.2). In the Automotive Division, capital spending totaled EUR 17.4 million and was mainly related to the expansion of production capacity ahead of planned product launches. At EUR 6.3 million, capital spending in the Seating Systems Division was adjusted in the light of market contraction and was lower than in the previous year.

Equity ratio and gearing slightly higher compared with the previous year
Grammer’s consolidated equity rose from EUR 234.8 million to EUR 243.8 million year over year. The equity ratio was unchanged at 29 percent as of September 30, 2015.
At the end of the third quarter, the Group’s net financial liabilities stood at EUR 136.3 million (2014: 120.6). Accordingly, gearing rose to 56 percent (2014: 51).

Full-year revenue and EBIT guidance for 2015 confirmed
Business performance in the third quarter as well as the forecasts for the fourth quarter are still in line with the current full-year projections for 2015. Looking forward over the rest of the current year, the Automotive Division will be characterized by new product launches and projects. Revenue in the Seating Systems Division will continue to weaken in the further course of the year due to the persistent market weakness.

Against this backdrop, Grammer confirms the current sales and EBIT forecast for 2015. Grammer expects a full-year EBIT of around EUR 42 million. Despite the substantially weaker business in the Seating Systems Division, Grammer still projects an appreciable increase in revenue over the previous year to more than EUR 1.4 billion thanks to the project startups in the Automotive Division.

Company Profile
GRAMMER AG, Amberg, Germany, specializes in the development and production of components and systems for automotive interiors as well as driver and passenger seats for utility and offroad vehicles. In the Automotive Division, we supply headrests, armrests and center console systems to premium automakers and automotive system suppliers. The Seating Systems Division comprises the truck and offroad seat segments as well as train and bus seats.

Grammer is represented in 20 countries worldwide with a workforce of over 11,300 employees across its 30 subsidiaries.

The GRAMMER share is listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra as well as in over-the-counter trading at the Stuttgart, Berlin and Hamburg stock exchanges.

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

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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:	Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Stuttgart

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408475  2015-11-04