Corporate | 10 August 2016 06:58

Grammer Group with sharp rise in revenue and profit in the first half of the year. Full-year guidance raised

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

2016-08-10 / 06:58
The issuer is solely responsible for the content of this announcement.

Grammer Group with sharp rise in revenue and profit in the first half of the year. Full-year guidance raised

Operating EBIT of EUR 35.8 million, doubling the previous year
21 percent increase in Group revenue to EUR 861 million
Full-year guidance for 2016 raised

Amberg, August 10, 2016 – The Grammer Group, a global supplier of interior components for passenger vehicles and seats for commercial vehicles impressively continued on its successful growth trajectory in the first half of 2016, recording a strong 21.2 percent increase in revenue to EUR 860.6 million (2015: 710.2). Both of the group’s divisions contributed to this positive business development. This performance in the first six months of the year forms a strong basis for the rest of 2016, prompting the company to increase its full-year guidance.

With an increase of 30.4 percent to EUR 628.1 million (2015: 481.7), the domestic EMEA market (Europe-Africa-Middle East) was the fastest-growing region thanks to the successful integration of the Reum Group and the company’s ongoing good performance in its core European markets. Despite the more muted economic conditions in China and Japan, revenue in Asia-Pacific (APAC) grew by 13.0 percent to EUR 116.2 million (2015: 102.8). It was only in the Americas that revenue was lower due to the persistently difficult market conditions in Brazil, dropping slightly to EUR 116.3 million (2015: 125.7).

Operating EBIT almost doubled in the first half of the year
The increase of almost 100 percent in operating EBIT to EUR 35.8 million (2015: 18.0) reflects Grammer’s successful operating performance in both divisions as well as the positive effects arising from the efficient implementation of the cost and process optimization measures. As a result, the operating EBIT margin widened significantly by 1.7 percentage points to 4.2 percent (2015: 2.5 percent).

Group earnings before interest and taxes (EBIT) also climbed sharply by almost 50 percent to EUR 36.4 million (2015: 24.6) despite the fact that the previous year’s figure had been influenced positively by strong exchange rate effects. The EBIT margin rose by 0.7 percentage points over the previous year to 4.2 percent (2015: 3.5 percent).

At the same time, net profit increased very sharply by almost 60 percent to EUR 21.3 million (2015: 13.6).
“Despite the still challenging conditions in some core markets, Grammer achieved an encouragingly strong increase in revenue and profit in the first half of the year. In particular, the very significant increase in operating EBIT confirms that the efforts to enhance the efficiency of our operations are showing the expected effect and that we are implementing our strategy for profitable growth successfully and in line with our plans. This places us firmly in our target corridor for further growth and an higher enterprise value of Grammer Group over the next months and years,” said Hartmut Müller, Chief Executive Officer of Grammer AG.

Continued strong growth in the Automotive Division
The Automotive Division remained the main revenue driver in the first half of 2016. High revenue growth of 28.3 percent to EUR 635.0 million (2015: 494.9) was recorded thanks to the first-time consolidation of the Reum Group, new series start-ups and continued demand in the premium segment.

Earnings before interest and taxes (EBIT) rose substantially by 43.8 percent to EUR 20.7 million (2015: 14.4), with the EBIT margin widening from 2.9 percent to 3.3 percent in the first half of the year. Operating EBIT grew even more quickly, rising by more than 90 percent to EUR 21.4 million (2015: 11.0). This reflects the preliminary positive effects of the optimization measures implemented in the previous years and the planned reduction in globalization costs.

Higher revenue in the Seating Systems Division despite challenging market conditions in Brazil and China
Grammer’s Seating Systems Division also achieved a 7.5 percent increase in revenue to EUR 250.5 million (2015: 233.1) despite the persistent weakness of the Brazilian market. This was primarily due to higher revenue in Europe, which more than compensated the contraction in Brazilian business. With demand still very weak in Brazil and the absence of economic impetus for a swift market recovery, further capacity adjustments have been made to Grammer’s local production facility.

Despite these factors, earnings before interest and taxes (EBIT) rose by 25 percent in the period under review to EUR 20.0 million (2015: 16.0) thanks to improved business in profitable core markets, accompanied by an increase in the EBIT margin to 8.0 percent (2015: 6.9). At EUR 18.6 million (2015: 13.2), operating EBIT increased by more than 40 percent.

Investments in expansion of global business activities
At EUR 19.9 million (2015: 15.9), total capital spending by the Grammer Group in the first six months was up on the previous year. A large part of this was for the set-up and expansion of international facilities and production capacities as well as the optimization of existing locations and processes. Whereas capital spending in the Automotive Division was particularly related to the integration of the Reum Group, the Seating Systems Division primarily invested in its facilities in China and the United States.

Increased guidance for 2016
Despite the still difficult and volatile environment, the Grammer Group’s business is expected to remain very strong in the second half of 2016. However, the pace of growth will be slightly slower than in the first half of 2016 due to seasonal effects, reduced project revenue and weaker economic momentum.

At the Group level (including the Reum Group), Grammer forecasts an increase in revenue of more than 15 percent over the previous year to roughly EUR 1.66 billion in 2016.

At over EUR 60 million, Group EBIT in 2016 will also be very substantially up on the previous year.

Company profile
Domiciled in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspension driver and passenger seats for onroad and offroad vehicles.

In the Automotive Division, we supply headrests, armrests, center console systems and high-quality interior components and operating systems to premium automakers and automotive system suppliers. The Seating Systems Division comprises seats for the truck and offroad seat segments (tractors, construction machinery, forklifts) as well as train and bus seats.

With over 12,000 employees, Grammer operates in 20 countries around the world. Grammer shares are listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra.

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

2016-08-10 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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Language:	English
Company:	Grammer AG
	Georg-Grammer-Str. 2
	92224 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, Tradegate Exchange

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