Corporate | 31 March 2011 08:01
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Funkwerk AG / Key word(s): Final Results
PRESS RELEASE Funkwerk sets course for profitable growth – Marginally positive operating result before impairment and restructuring costs, with sales of EUR 211m (2009: EUR 218.4m) – Cost savings of EUR 19m, adjustment of business model initiated – Sales to grow in 2011 generating profit again Kölleda/Frankfurt, 31 March 2011. Funkwerk AG (ISIN DE0005753149) hopes to achieve significant growth in sales and earnings again by 2013. Revenues of the Thuringian communication systems specialist are to rise as early as in the current financial year to generate considerable profit again, as the Executive Board announced today at the press conference on the company’s financial statements. The restructuring programme completed in 2010 led to cost savings of EUR 19m. ‘With the measures implemented and initiated, our company has taken an important step forward and is now back on firm ground. Based on our current planning, Funkwerk will achieve profitable growth again in 2011. This trend should improve further still in 2012 and 2013 with increasing profit margins,’ the Executive Board said in its forecast. Funkwerk had to cope with a triple endurance test in 2009 and 2010. Along with the negative trend of the global economy, the group needed to be put on a new, more efficient platform and undergo a strategic change from equipment provider in a special niche towards a supplier of professional solutions for specific sectors of the industry. To this end, the product portfolio was reduced to essential key components with greater technological value added and a platform strategy developed which enables a better trans-sectoral use of resources. In 2011, the company will continue to push ahead with the optimisation of its business model and its internationalisation through cooperation with international infrastructure manufacturers. Operational turnaround with reduced sales ‘This has effectively increased our profitability and helped us achieve an operational turnaround in 2010,’ the Executive Board said summarising the success of these measures. Through cost savings of around EUR 19m, the operating result (before impairment and restructuring costs) was brought back into the black (EUR +0.6m, 2009: EUR -14.1m), while sales year on year once again fell by a slight margin to EUR 211m (2009: EUR 218.4m) due to various factors. Without the deconsolidation effect of around EUR 7m from the closure of a subsidiary in France and the loss of around EUR 13m due to the politically induced stoppage of business activities in Algeria, Funkwerk could have even achieved a slight gain. In addition, Funkwerk had deliberately given up several product groups and, with it, sales contributions as part of its restructuring measures. On the whole, the trend in the four business segments of Funkwerk lagged behind the general economy. This is due, on the one hand, to the fact that Funkwerk primarily provides information and communication systems as infrastructure for transport operators, companies and public institutions. Economic activity in these sectors follows the general economic trend, but with a certain time lag. On the other, the restrictive fiscal policies in Europe as a result of the Euro crisis curbed the propensity to invest in infrastructure projects. Sales and earnings in 2010 were affected particularly negatively by political events in Algeria, which – as already reported ad hoc – led Funkwerk to an extraordinary writedown of almost its entire commitment in the country in order to exclude further balance sheet risks for 2011. Consequently, the company accounted for impairments of EUR 9.1m for project business in Algeria as early as in the 2010 financial statements. Due to all but completing its capacity adjustments in 2010, the pertinent expenditure reduced from EUR 8.9m in 2009 to EUR 2.2m. At EUR -3.4m, the revaluation of intangible assets required as a result of the decline in sales and the discontinuation of product ranges also proved significantly less in the reporting period than in the previous year (EUR -19.8m). On the whole, this produced a negative operating result of EUR -12.8m in 2010 (2009: EUR -42.8m). Due to a negative financial result and an earnings tax burden of EUR 7.6m, the consolidated annual net loss therefore totalled EUR -24.9m (2009: EUR -40.8m). This corresponds to earnings per share of EUR -3.09 (2009: EUR -5.06). As the working capital had again dropped quite considerably, Funkwerk was able all the same to achieve a positive operating cash flow of EUR 4.4.m for 2010 (2009: EUR 7.2m). On the whole, Funkwerk had a net liquidity of EUR 11.6m on 31 December 2010 (2009: EUR 19.8m). Effectively back to profit from 2011 The Executive Board of Funkwerk provided a positive outlook for 2011 and the years following. ‘The measures which we have completed and the structural changes initiated have considerably improved the starting basis of Funkwerk in the current financial year. Together with the investments in new products and solutions, our strategic focusing and further structural improvements Funkwerk should effectively generate profit again from 2011,’ it says in its management report. For its Traffic & Control Communication segment, Funkwerk expects that demand for communication technology in the railway sector will increase in 2011 and the following years, as rail transport will be advanced to save resources and infrastructure is due for development in the threshold countries. The Security Communication segment is expected to grow significantly in the medium term, in line with the growing demand for intelligent solutions for the protection of people, buildings, public places and objects. Funkwerk is considered a leading specialist in this area and plans to expand business at international level through cooperation with infrastructure suppliers. According to the Executive Board, demand in Automotive Communication will also surge, with significant growth for the sector in the medium term, specifically in the OEM business of vehicle manufacturers. The launch of new products and solutions prepared in 2010 and fully taking effect in 2011 and specific internationalisation are said to give rise to hopes of organic growth in these segments. These are the growth markets on which Funkwerk plans to focus in particular in the future, which includes exercising appropriate strategic options. The Executive Board believes that effective focal points of the company’s expertise will in future include such technology areas as radio communication, data transmission and data processing. Based on this, Funkwerk is to become, in the long run, one of the top 5 companies providing communication, information and security solutions for key components for infrastructures in Europe and an indispensable supplier for vehicle manufacturers and infrastructure suppliers. The full annual financial statements of Funkwerk AG are available on the Internet at www.funkwerk.com and on the website of Deutsche Börse AG. For further information contact
End of Corporate News 31.03.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. DGAP’s 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: | Funkwerk AG | |
| Im Funkwerk 5 | ||
| 99625 Kölleda | ||
| Deutschland | ||
| Phone: | +49 (0)3635 600 0 | |
| Fax: | +49 (0)3635 600 507 | |
| E-mail: | info@funkwerk.com | |
| Internet: | www.funkwerk.com | |
| ISIN: | DE0005753149 | |
| WKN: | 575314 | |
| Listed: | Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart | |
| End of News | DGAP News-Service |
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