 Bertrandt AGEhningenBertrandt AG: Halbjahresbericht 2019/2020Q2 Fiscal 2019/2020
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| IFRS | 01/10/2019-31/03/2020 | Changes in % | 01/10/2018-31/03/2019 |
| Income statement | |||
| Total revenues (EUR million) | 508.240 | -3.2 | 524.971 |
| EBIT (EUR million) | 21.238 | -40.7 | 35.822 |
| Profit from ordinary activity (EUR million) | 18.566 | -46.1 | 34.415 |
| Earnings after income tax (EUR million) | 11.959 | -48.8 | 23.368 |
| Cash flow statement | |||
| Cash flow from operating activities (EUR million) | 50.635 | 10.0 | 46.049 |
| Cash flow from investing activities (EUR million) | -26.927 | -29.7 | -38.328 |
| Free cash flow (EUR million) | 23.708 | 207.1 | 7.721 |
| Capital spending (EUR million) | 27.140 | -31.3 | 39.491 |
| Balance sheet | |||
| Equity (EUR million) | 413.367 | 2.7 | 402.612 |
| Equity ratio (%) | 46.9% | -10.1 | 52.2 |
| Total assets (EUR million) | 881.187 | 14.2 | 771.458 |
| Share | |||
| Earnings per share (EUR) | 1.18 | -48.9 | 2.31 |
| Share price on 31 March (EUR)1 | 31.45 | -50.2 | 63.15 |
| Share price, high (EUR)2 | 57.10 | -29.2 | 80.65 |
| Share price, low (EUR)2 | 25.00 | -57.9 | 59.40 |
| Shares outstanding on 31 March (number) | 10,143.240 | - | 10,143.240 |
| Market capitalisation on 31 March (EUR million) | 319.0 | -50.2 | 640.5 |
| Employees | |||
| Number of employees at Bertrandt Group | |||
| on 31 March | 13,256 | -1.1 | 13,400 |
1
Closing price in Xetra trading.
2
In Xetra trading.
Overview
The new coronavirus presents entirely new challenges for the world. As early as at
the beginning of the first half of 2020, novel COVID-19 was spreading in China and
as a globally operating company, Bertrandt was affected by this development. To contain
new infections, governments have taken far-reaching measures, prohibiting social gatherings
and partly even imposing lockdowns. Almost all industries are compelled to temporarily
reduce their business activity or completely interrupt it. The wide availability of
mobile workplace solutions, high-performance IT infrastructure and high digital security
standards (Bertrandt has obtained the TISAX certification) have enabled us to continue
to work for our customers while at the same time protecting our employees. Nonetheless,
projects were delayed or cancelled already in the first half of the financial year.
It is not yet clear how the virus pandemic and the shutdown will affect the German
and global economies in the long run. Only in the coming months we will be able to
assess the impact of the crisis.
Apart from the dramatic disruptions caused by the virus, the automotive industry
is still in the midst of the transformation process. While the sector has to cope
with challenges such as a growing diversity of electric vehicle models and variants
as well as leaps in technology in the fields of new drive systems and connected and
autonomous driving, the resulting breadth and depth of topics offers sizeable potential
for engineering service providers. As a reliable technology partner providing comprehensive
solutions in all the disciplines for which there is demand, Bertrandt is taking on
more and more responsibility in the development process. There is a growing need for
interface management between new and established partners and for controlling and
project management competence. Bertrandt's response to this dynamic environment is
to set course for the future by investing in infrastructure and know-how and by producing
innovative solutions and taking on greater project responsibility.
In the economic environment described above, the Company's key performance indicators
developed as follows in the first six months of fiscal 2019/2020:
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Total revenues declined by 3.2% to EUR 508.240 million (previous year EUR 524.971 million). |
| ― |
EBIT came to EUR 21.238 million (previous year EUR 35.822 million), which corresponds to a margin of 4.2% (previous year 6.8%). |
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The workforce has decreased year on year by 144 to 13,256 people (13,400 employees as at 31 March 2019). |
| ― |
Capital expenditure amounted to EUR 27.140 million (previous year EUR 39.491 million). |
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Free cash flow was EUR 23.708 million (previous year EUR 7.721 million). |
During the half year under review, the entire automotive industry and also the Bertrandt
Group were faced with unique challenges. The economic shutdown imposed by governments,
and the restrictions on our personal interaction had a tangible negative effect on
our activity as a customer-focused engineering service provider. The duration of these
impacts remains unclear and cannot be quantified at the present juncture. In this
context, Bertrandt's Management Board withdrew its forecast for the business performance
in fiscal 2019/2020 on 20 March 2020 and has not provided any new predictions. The
Management Board took measures at an early stage to confront the challenges quickly
and with determination. Employees' and customers' safety and maintaining operational
capacity are our highest priorities. Benefiting from a solid capital structure and
liquidity situation, the Bertrandt Group is placed in a strong position to cope with
the difficult situation.
#wekeepgoing
The coronavirus has the world firmly in its grip and, at present, nothing is quite
as it was. The current situation presents entirely new challenges for all of us. The
impact on the global economy is already enormous and we at Bertrandt are just as much
affected as our customers and partners.
In these unprecedented circumstances we bear a special responsibility for our over
13,000 employees and for society as a whole. For this reason, we are doing everything
we can to protect the people at Bertrandt, to minimise as far as possible the risk
of our colleagues catching and spreading the virus.
In recent weeks we have put a great deal of work into maintaining the output of the
entire Bertrandt Group. Pandemic plans have been rolled out and a crisis management
body is working night and day. These colleagues have been working to and almost beyond
the limit of their abilities. We would like to thank the entire workforce for pulling
together and for the extraordinary commitment everyone has made together in this difficult
situation.
It goes without saying that we are continuing to work on ongoing and new orders placed
by our customers. Our employees have switched to mobile working where this is possible
and the work situation allows. We are doing everything in our power to manage the
crisis and to complete all projects to Bertrandt's usual standards of quality. We
keep going.
Stay healthy and take care of each other.
Yours,
the Bertrandt Management Board
| HANS-GERD CLAUS | MICHAEL LÜCKE | MARKUS RUF |
Group Management Report
THE GROUP - GENERAL INFORMATION
Business model and strategy
As one of Europe's leading engineering partners, Bertrandt has been devising specific
and tailored solutions with customers at 56 locations in Europe, Asia and the United
States for over 45 years now. Our services for the automotive and aerospace industries
include all process steps in the project phases of conceptual design, CAD, development,
design modelling, tool production, vehicle construction and production planning right
through to start of production and production support. In addition, the individual
development steps are validated by simulation, prototype building and testing. This
means that we implement collaborative projects of different sizes at our technology
centres in the immediate vicinity of our customers. The technology centres provide
dedicated design studios, electronics labs as well as testing facilities. Our customer
base comprises nearly all European manufacturers as well as a large number of system
suppliers.
We also provide technological services outside the mobility industry in such forward-looking
sectors as energy, medical technology, electrical engineering as well as machinery
and plant engineering throughout Germany. Throughout consistency, reliability and
investing in infrastructure and technical equipment all contribute to growing customer
relationships. These are key success factors for Bertrandt.
56
locations worldwide belong to the Bertrandt Group.
Foreign operations
With its 16 non-domestic branches in Europe, the United States and Asia, Bertrandt
pursues a strategy of ensuring the sharpest possible focus on the customer by diversifying
its locations on a project-specific basis. In close organisational interaction with
its German branches, Bertrandt is able to offer its customers the complete range of
its services at all locations and thereby to devise solutions rapidly and efficiently
at a global level.
REPORT ON ECONOMIC POSITION
Economic development
After the first cases of coronavirus were detected as early as in late December 2019,
the pandemic started to spread globally in February and has continued ever since to
unfold worldwide. In Europe, new cases strongly increased in March and April. The
authorities therefore imposed far-reaching measures already in March to curb the virus
outbreak, which have severely slowed down all business activity. Even now, the impacts
on the global economy are enormous. In the period under review, economic output first
started to weaken in China. This was followed by a noticeable slowdown of the US economy
between January and March 2020. Especially in Europe including Germany, growth rates
were negative until the end of the period under review. According to the Joint Economic
Forecast, the duration and extent of the global contraction depends on how the pandemic
develops and how long the measures taken to slow down the virus' spread will be in
place. In this general setting, the Joint Economic Forecast experts anticipate the
world output to shrink by at least 2.5% on average in 2020.
Sector trends
According to the German Association of the Automotive Industry (VDA), automotive
sales and production are particularly affected by the coronavirus pandemic.
As the VDA reports, the number of newly registered passenger cars in Europe was 853,100
in total in April, which means a -53% decrease compared to the previous month. Italy
suffered the steepest drop in sales with a -85% decline. In France and Spain, new
registrations decreased by -72% and -69% respectively, corresponding to a decline
by three-quarters. Germany reported a 38% decrease in new car registrations. Overall,
the European passenger car market was down by 26% in the first quarter of 2020 compared
to the same quarter in the previous year. According to the VDA, sales volumes in the
USA dropped by 38% in March down to 992,400 light vehicles. This means that the US
market is in the red after the first three months of 2020 as sales volumes have plunged
by 13%.
The Chinese market volume declined by 8% in March to 1.0 million new cars. With 2.8
million vehicles delivered, the first quarter of 2020 has therefore been the weakest
in terms of sales since 2011.
The Indian passenger car market also suffered a decline in March with units sold
down by -51% to 143,000 cars. Moreover, according to the VDA the automotive industry
is in a special situation as it has to cope with the extremely challenging transformation
process in addition to the coronavirus pandemic.
The automobile sector is still in the midst of a fundamental transformation which
is mainly influenced by alternative drives and digitalisation. The industry pushes
the development of electromobility with great commitment as new drive solutions are
needed to respond to climate change and growing mobility needs. At the same time,
technologies are advanced to enable automated driving at different levels with a view
to further increasing safety and comfort.
According to the German Aerospace Industries Association (BDLI), the German aerospace
industry is hit by the coronavirus pandemic. The BDLI expects that the volume of air
traffic as it was in 2019 will only be reached again in late 2022 or early 2023. Airbus
anticipates the coronavirus crisis to bring about a major change in air traffic. According
to an assessment given by the Airbus CEO, environmental protection and reduction in
CO2 emissions will become even more important now. The industry is therefore likely to
invest in new technologies and products that relate to the development of the next
generation of aircraft. An equally important aspect in doing so is the implementation
of Industry 4.0 and digitalisation in development, production and services.
The key industries in which Bertrandt operates apart from the automotive and aerospace
sectors also feel the impact of the coronavirus pandemic. According to the VDMA, the
mechanical engineering industry suffers from the consequences of the pandemic. As
at the end of March, 84% of the VDMA membership companies surveyed reported a downturn
in order books or cancellations, and the share of companies affected has already increased
to 89% in mid-April.
The global repercussions of COVID-19 remain a source of uncertainty for businesses.
This is also reflected in the business climate index published by the ifo Institute,
which plunged to 74.3 points in April 2020 from 85.9 points in the previous month.
Business expectations fell to 69.4 points in April 2020 from 79.5 points in the previous
month. According to the ifo Institute, these are the lowest values ever recorded.
BUSINESS PERFORMANCE
Development of the first half of fiscal 2019/2020
As expected, Bertrandt's start into the period under review was influenced by a heterogeneous
background. The continuing transformation process in the automotive industry influenced
the external sourcing strategies of automotive manufacturers and some development
contracts were awarded to engineering service providers with delays. The pressure
on prices remained tangible in some disciplines.
The period under review continued with our business being affected by the global
spread of coronavirus and governments' countermeasures. Many industries and service
providers were compelled to significantly reduce or even discontinue their economic
activity to comply with public shutdown regulations. The unprecedented challenges
posed by the corona pandemic also hit Bertrandt AG in the period under review. Temporary
delays and interruptions in projects and development contracts had a negative impact
on the business of engineering service providers. As a group, Bertrandt immediately
responded to the changed economic environment and implemented countermeasures. A pandemic
committee was set up in early March, and this task force coordinates all aspects related
to the coronavirus. Since mid-March, all personal contacts have been reduced to a
minimum while at the same time the number of mobile workplaces was speedily increased
to 7,500. This has enabled the Group to maintain its operational capacity. In addition
to reduced outsourcing of contracts, Bertrandt is also using the instrument of short-time
working in many European countries. All expenses and capital expenditure decisions
are under scrutiny. This is to generate sustainable potential for optimisation and
at the same time drive the Group's prospects in a targeted manner.
In view of the uncertainties regarding the development, duration and actual impact
of the coronavirus pandemic on overall global economic development, the Management
Board of Bertrandt AG withdrew its published forecast for fiscal 2019/2020 on 20 March
2020. Given the current dynamic situation, the Management Board refrains from providing
a new forecast for the financial year 2019/2020. At this time, it is impossible to
give a meaningful assessment of the potential impacts of the pandemic.
In fiscal 2019/2020, Bertrandt AG applies for the first time the new accounting standard
IFRS 16 for its lease accounting. According to the standard, lessees do not distinguish
between finance and operating leases, but are required to recognise a right-of-use
asset and a lease liability in the balance sheet for all leases. This results in material
changes in items in the income statement, balance sheet and cash flow statement. Explanations
are given as appropriate, as well as in the Notes.
508.240
EUR million were the total revenues generated in the first half of FY 2019/2020.
Total revenues
In the economic environment described above the Company generated total revenues
in the period under review of EUR 508.240 million (previous year EUR 524.971 million),
including capitalised internally generated assets of EUR 0.556 million (previous year
EUR 0.394 million).
→ CHART 02
Key expenditure figures
Expenses in the first half of fiscal 2019/2020 were as follows: Project-related cost
of materials slightly fell as a result of procurements from external service suppliers
to EUR 44.028 million compared to the previous year's level (EUR 45.495 million).
Personnel expenses were EUR 378.391 million and thus broadly at the previous year's
level (EUR 377.035 million). A decrease in the workforce from 13,400 (31 March 2019)
to 13,256 people as at the end of the period under review is offset by a general increase
in wages. The measures imposed by the authorities in January to curb the pandemic,
and the resulting initial project interruptions had a negative effect on capacity
utilisation and revenue generation. This is reflected in a higher staff cost ratio
of 74.5% (previous year 71.8%). The adoption of IFRS 16 caused depreciation/amortisation
expense to increase to EUR 25.944 million (previous year EUR 16.223 million). Other
operating expenses decreased to EUR 42.754 million (previous year EUR 54.918 million),
also due to IFRS 16, and owing to initial successes from adhering to strict cost discipline.
EBIT
The Bertrandt Group's EBIT in the first half of the fiscal year 2019/2020 came to
EUR 21.238 million (previous year EUR 35.822 million), which is equivalent to a margin
of 4.2% (previous year 6.8%). As expected, this development was influenced by temporary
delays in the award of projects by some customers, pressure on prices in some disciplines
of our range of services and start-up costs for new areas of business activity. In
the further course of the period under review, the Group's earnings were affected
by the global spread of coronavirus and the restrictions imposed by governments requiring
economic activity to be reduced or brought to a halt. Net finance income was EUR -2.672
million (previous year EUR -1.407 million). This is essentially attributable to the
recognition of EUR 0.943 million in interest expense on lease liabilities due to the
adoption of IFRS 16. Profit from ordinary activities in the period under review was
EUR 18.566 million (previous year EUR 34.415 million). Based on a tax rate of 28.8%
(previous year 28.6%), the Company generated post-tax earnings of EUR 11.959 million
(previous year EUR 23.368 million).
→ CHART 03
Financial and assets position
Total assets increased by EUR 72.525 million to EUR 881.187 million as at 31 March
2020 (EUR 808.662 million as at 30 September 2019), of which EUR 86.555 million are
attributable to the adoption of IFRS 16. As a result of the adoption of the new standard,
some balance sheet items were reclassified, thereby increasing total assets and changing
the balance sheet structure.
Non-current assets increased to EUR 436.031 million as at the reporting date (EUR
340.563 million as at 30 September 2019). This is almost exclusively due to the first-time
recognition of right-of-use assets from leases with more than EUR 77.550 million for
property, plant and equipment and the deferred taxes of EUR 9.005 million associated
with the application of IFRS 16. Current assets were EUR 445.156 million (EUR 468.099
million as at 30 September 2019). While contract assets declined by EUR 11.669 million
to EUR 113.646 million (EUR 125.315 million as at 30 September 2019) and trade receivables
decreased by EUR 40.437 million to EUR 185.570 million (EUR 226.007 million as at
30 September 2019), cash and cash equivalents increased by EUR 21.659 million to EUR
113.150 million (EUR 91.491 million as at 30 September 2019).
Current liabilities were EUR 165.382 million (EUR 152.725 million as at 30 September
2019). The increase is essentially the result of maturity-related reclassifications
from non-current to current borrowings in the amount of EUR 30.000 million. In addition,
the current other financial liabilities grew by EUR 13.527 million, of which EUR 16.583
million are attributable to IFRS 16 matters, which, also resulted in an increase in
non-current other financial liabilities by EUR 61.390 million. The increase in non-current
liabilities by EUR 63.193 million to EUR 302.438 million (EUR 239.245 million as at
30 September 2019) is the result of the aspects stated above and also of a partial
disbursement of a subsidised loan for an investment project.
The positive net result combined with dividends in the amount of EUR 16.152 million
paid out to the shareholders had the effect of slightly reducing equity in the first
six months of the fiscal year 2019/2020 to EUR 413.367 million (EUR 416.692 million
as at 30 September 2019). The IFRS 16-related increase in total assets has a negative
impact on the equity ratio, causing it to fall by 4.6 percentage points to 46.9% (51.5%
as at 30 September 2019).
→ CHART 04
Bertrandt's cash flow from operating activities in the first half of the current
fiscal year was EUR 50.635 million (previous year EUR 46.049 million). The optimisation
of working capital had a positive influence. Cash flow used in investing activities
declined to EUR -26.927 million (previous year EUR -38.328 million). This resulted
in free cash flow of EUR 23.708 million as at the end of the first half year (previous
year EUR 7.721 million). In the first six months of the current fiscal year, EUR 27.115
million was invested in buildings, technical equipment and intangible assets to meet
needs (previous year EUR 39.264 million). The main focus of investment was on test
facilities for powertrain systems. Construction of the two so-called Powertrain Solution
Centers is currently in progress. This planned capital expenditure is the basis for
tailoring our range of services to suit our customers' needs.
→ CHART 05
→ CHART 06
13,256
employees worked for Bertrandt on the reporting date.
Human resources
The Company employed 13,256 people in the Group on 31 March 2020. Compared to the
prior periods, the workforce decreased by 144 and 408 people (13,400 employees as
at 31 March 2019 and 13,664 as at 30 September 2019) as a response to the heterogeneous
market conditions. The latest information on human resources management can be found
in the "Careers" section of Bertrandt's website at www.bertrandt.com.
→ CHART 07
Risc report
As an engineering service provider operating on an international scale, Bertrandt
is exposed to a wide variety of risks. The pertinent facts were comprehensively reported
in the fiscal 2018/2019 annual report, which states that the ongoing developments
in the automotive sector will also shape the 2019/2020 financial year. The ultimate
outcomes of these developments cannot be wholly predicted at the present juncture.
Depending on the turn the influencing factors described in the report take, they may
result in opportunities or risks for the Bertrandt Group in the next fiscal year.
Overall, uncertainty about the macroeconomic conditions and customer-specific challenges
has noticeably increased in the first half 2019/2020. Britain's exit from the EU has
become a reality. Furthermore, no far-reaching agreement has been reached yet in the
trade conflict between the US and China and/or the EU.
Coronavirus and the countermeasures imposed by governments have led to economic disruptions
such as a strong global recession and high unemployment rates. Thus, the coronavirus
represents a new material risk in the period under review. The pandemic caused by
the virus is likely to adversely affect global trade and logistics chains and the
entire real economy. There is also a potential risk to the health of our employees.
The official measures imposed to curb the virus and the resulting reduction or discontinuation
of the economic activity of a large number of customer groups could increase the risk
of delays in launches of new products and/or passenger car models. This also means
a higher risk of significantly adverse effects on the business of engineering service
providers like Bertrandt. According to the ifo Institute, sentiment in German businesses
is considerably dampened. In April 2020, the business climate index published by the
ifo Institute plummeted to 74.3 points, which is the lowest value ever measured, after
it had been at 85.9 points in March 2020. The duration and extent of the restrictions
caused by the virus pandemic remain unclear at the present juncture. Overall, it is
difficult to foresee how this will impact the global economy and the external sourcing
strategies of automotive OEMs. The first project interruptions and delays became evident
as early as in the first half of fiscal 2019/2020.
Depending on how long and severe the sales crisis in the passenger car market will
turn out, our customers may decide to further adjust their model strategies and development
project sourcing strategies.
Bertrandt responded to this development at an early stage and implemented a pandemic
committee in early March 2020 to coordinate recommendations and measures regarding
all aspects of the coronavirus crisis. The committee works across disciplines and
is chaired by a member of the Management Board. The members have key functions in
the Group and the committee directly reports to the Management Board. Comprehensive
information regarding the protection of our employees was communicated and published
on our intranet in a timely manner. To protect our workforce, travelling has been
largely suspended, mobile working or working in shifts has been introduced, direct
contacts have been reduced, social rooms or canteens have been closed. Instructions
on the proper use of hygiene standards (including face masks) have been provided.
Our high-performance IT infrastructure and high digital security standards have enabled
us to increase the number of mobile workplaces to 7,500 stations on short notice.
Thus, we can offer the best possible protection to our employees while at the same
time maintaining operational capacity to the benefit of our customers. Bertrandt is
certified according to the TISAX standard. This means that the Group meets the high
requirements for information security in the automotive industry.
The pandemic committee continuously evaluates changes regarding the spread of the
virus and the responses by public institutions (tightening or easing of lockdown restrictions)
to be able to recommend Group decisions and reassess the risk situation.
The risks referred to in the annual report 2018/2019, which have partly materialised,
and the current situation and the impact of coronavirus adversely affected total revenues
and earnings in the period under review and will also have a negative effect on future
business performance, despite the countermeasures implemented by the Group. At this
time, it is not possible to quantify these potential developments.
The broad strategic alignment of the Group, the high demand for innovative solutions
catering for the automotive megatrends of digitalisation, automated driving, connectivity
and electrification, and the Group's solid financial base will continue to provide
a stable foundation for Bertrandt's business growth.
Potentials
The ongoing technology trends of autonomous driving, connectivity, e-mobility and
digitalisation result in a great breadth and depth of topics for Bertrandt. Mobility
and the world of digital data are becoming increasingly intertwined and new business
fields and market shares are emerging, putting Bertrandt to test both as an all-rounder
and a specialist. As a solutions-focused engineering business the Group is geared
to market and customer requirements and consequently also invests in infrastructure
and the competences of its employees. With all these developments new topics, services
and cooperative opportunities are also emerging alongside established fields of business
which Bertrandt is increasingly exploiting to develop the best solutions for its customers.
Bertrandt is a technology company which provides skilled support as a partner to its
customers. The Company's objective is to manage its business sustainably, to position
itself successfully on the market and to further build a leading position with a broad
and integrated range of services. Bertrandt consciously serves a rather diverse customer
base. The Company assumes the role of an expert consultant to the automotive and aerospace
industries while embracing the development of technological future trends with a can-do
attitude. Moreover, there are promising opportunities for the Company to establish
a market position and to bring its expertise to bear in sectors beyond the mobility
industry, such as the energy and electrical engineering and medical technology industries
as well as the electronics sector or machinery and plant engineering industries. Thanks
to our decentralised structure, we are a trusted partner in the immediate vicinity
of our customers. Thus, we can take on board their wishes immediately and implement
them in projects worldwide. Moreover, in this context Bertrandt also uses agile startup-type
units and focuses on industries and customers in the fields of medical technology,
virtual and augmented reality, cloud solutions, machine learning or big data.
Forecast and outlook
As a result of the coronavirus crisis, the International Monetary Fund (IMF) has
cut within a few months its estimates for the global economy more severely than ever
before. The IMF experts expect the global economy to shrink by -3.0% in the full year
2020. According to the IMF, the swift and comprehensive rescue programmes arranged
by many governments should lead to a gradual recovery the second half of 2020, which
may be expected to trigger global economic growth of 5.8% in 2021.
For the USA, the largest economy worldwide, the IMF expects a minus of 5.9% in the
year 2020. In the eurozone, the economy is anticipated to contract by 7.0% in 2020.
The situation in Italy and Spain, both particularly hit by the pandemic, will be especially
severe. According to the IMF, the economy in these countries will shrink by 9.1% and
8.0% respectively in the full year 2020.
According to the ifo Institute, the sentiment in German businesses has extremely
deteriorated because of the coronavirus pandemic. The business climate index plunged
to 74.3 points in April 2020 from 85.9 points (seasonally adjusted) in March 2020.
According to the experts at the ifo Institute, the German economy is in shock. Especially
the business expectations clouded over to an unprecedented degree in April. The same
applies to the assessments of the current situation. With drastic measures implemented
by public authorities, the ifo Joint Economic Forecast experts anticipate gross domestic
product in 2020 as a whole to shrink by 4.2%. Other institutes such as M.M.Warburg
& CO expect the German economy to contract by 7% in 2020. The forecasts cover a broad
spectrum which is explained by the dynamic situation and the need to continuously
adjust economic expectations, sometimes at weekly intervals. Provided that the economy
gradually recovers after the shutdown, the experts of this study fore cast an increase
in gross domestic product by 5.8% in 2021. However, there is overall agreement that
a severe recession must be expected in Germany after the pandemic. How manufacturers
will catch up on the backlog created by production stoppages in the subsequent quarters
cannot be predicted at the present juncture.
On the development side, a recent study analysing the situation in the German automotive
industry conducted by the VDA in cooperation with consulting firm Oliver Wyman concluded
that the automobile itself is in the midst of a historic transformation. According
to the study, digital connectivity and globalisation are continuously driving the
global innovation and technology race. The need for mobility is growing on all continents
and is manifested in demand for sustainable and environmentally-friendly vehicle concepts.
As a result, experts expect the trend for contracting out engineering services in
the automotive industry to continue - an important factor for Bertrandt's business
performance.
According to the BDLI, the coronavirus pandemic paralyses the entire aerospace industry
which also includes German aviation suppliers. A study conducted in early April by
consulting firm h&z Unternehmensberatung in cooperation with the BDLI showed that
the civil aviation supply industry is particularly hit by the crisis. Even firms which
have been financially sound to date are now encountering liquidity problems and need
help. Eighty-nine percent of the businesses surveyed expect that the coronavirus crisis
will have far-reaching implications for them and in some cases businesses fear that
their existence is at stake. Moreover, civil aviation suppliers expect air traffic
to reach the 2019 volumes only in late 2022 or early 2023. With the strong decline
in passenger numbers the existence of some airlines is threatened and even the large
and well-established companies require government aid.
According to a survey conducted by the German Engineering Association (VDMA), more
than three thirds of the companies questioned believe that supply chains will continue
to be interrupted in the next three months, and 28% even expect the situation to deteriorate.
The Power Engineering division of the German Electrical and Electronic Manufacturers
Association (ZVEI) reported that the business climate in the German electrical and
electronic industry considerably worsened in March. Overall business expectations
deteriorated by -35 points compared to the previous month.
The German Hightech Industry Association SPEC-TARIS reports that, except regarding
the production of respirators and intensive care beds, the medical technology sector
is also affected by the crisis. In a recent survey conducted by the medical technology
section of SPECTARIS and Medical Mountains GmbH, 61% of businesses stated that demand
for medical products had decreased significantly, 47% complained about logistics bottlenecks
and 42% about a lack of supply products.
Apart from the omnipresent coronavirus crisis, the key market trends promoting Bertrandt's
business success are environmentally friendly individual mobility, connected and automated
driving, and the increasing variety of electronic models and variants. These trends
are intact and offer business opportunities for the future. According to major OEMs,
the R&D and real investment ratios will exceed the previous year's ratios in the full
year 2020.
As a result, Bertrandt will continue to focus its investment activities in building
up and expanding its infrastructure with the aim of consistently optimising its range
of services bearing in mind that the technological developments of tomorrow will require
state-of-the-art technology. A solid balance sheet enables Bertrandt AG to invest
in strengthening its competitiveness even under the present circumstances.
31,45
was the closing price of the Bertrandt share on the last day of Xetra trading.
In view of the uncertainties regarding the development and duration of the coronavirus
pandemic and its actual repercussions for the overall global economic development,
the Management Board of Bertrandt AG withdrew its published forecast for fiscal 2019/2020
on 20 March 2020. Given the current dynamic situation, the Management Board refrains
from providing a new forecast for the financial year 2019/2020. At this time, it is
still impossible to make a meaningful assessment of the potential impacts of the pandemic.
The Bertrandt share
The DAX started the first half of Bertrandt's fiscal 2019/2020 year on 1 October
2019 opening at 12,469.67 points. For the following months it was volatile due to
the coronavirus pandemic. On 31 March 2020, the DAX closed with 9,935.84 points. The
SDAX started the period at 10,971.79 points, closing at 9248.01 points as at the end
of the period. The Prime Automobile Performance Index oscillated between 1,279.47
and 848.88 points.
The Bertrandt share started the first half of the 2019/2020 financial year by closing
in Xetra trading at EUR 40.85. The highest share price in the period under review
was EUR 57.10 on 3 January 2020. The share reached its low for the period on 23 March
2020 when it closed at EUR 25.00. At the end of the period under review, the share
price was EUR 31.45. The average daily trading volume in the first six months of the
2019/2020 financial year was 11,905 shares (6,423 shares in the same period in the
previous year).
Analysts' ratings of the Bertrandt share and information on our Company can be found
at www.bertrandt.com under Investor Relations.
#we keep going
What we are doing to combat the virus.
RISK ASSESSMENT COMMITTEE
Since March 2020 nothing has been quite as it once was. Bertrandt responded to the
new situation very quickly and by 3 March had already set up a Risk Assessment Committee.
The Committee evaluates the situation as it develops and works closely with the Board
to implement measures designed to get our employees and the company safely through
the crisis.
PANDEMIC PLAN
All these measures are based on the pandemic plan, which has been drawn up in three
stages for the entire Group. All recommendations and measures are in line with the
regulations and measures issued by the government and by the Robert Koch Institute
(RKI) as well as the advice of our company doctors.
Up to 7,500 mobile Bertrandt workplaces
One of the first things our IT did was to facilitate mobile working for as many employees
as possible. This enables us to have far fewer people present on site. Our IT colleagues
very quickly managed to equip as many as 7,500 employees with digital RAS access.
Above all, they succeeded in securing the relevant services and increasing network
capacity.
More than 12,500 Skype conferences with 40,000 participants a week
Despite so few employees being present on location, Bertrandt is still able to guarantee
that work and communication continues efficiently throughout the crisis. In the four
week period beginning in March/April more than 50,000 conferences with around 150,000
participants were held.
Short-time working provides financial stability
Very importantly, arrangements were also made to secure Bertrandt's financial stability.
The well-known short-time working scheme was introduced at all Bertrandt's German
and international locations in order to minimise the financial impact of the crisis.
Hygiene is the best protection
Hygiene measures have been intensified and stepped up in all buildings. Considerable
thought has been put into how colleagues can be best protected, including those who
are still working with customers on site, on test drives or in workshops. The main
means of protection are physical distancing and the use of disinfectants and additional
equipment.
Current information on Intranet
Communication is extremely important during times of crisis and the Committee has
been set up with its own intranet site containing further up-to-date information for
precisely this reason.
Interim Consolidated Financial Statements
CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME TABLE 09
| EUR million | Q2 | Q2 | Q1 + Q2 | Q1 + Q2 |
| 01/10 to 31/03 | 2019/2020 | 2018/2019 | 2019/2020 | 2018/2019 |
| I. Income statement | ||||
| Revenues | 244.697 | 262.505 | 507.684 | 524.577 |
| Other internally generated assets | 0.222 | 0.207 | 0.556 | 0.394 |
| Total revenues | 244.919 | 262.712 | 508.240 | 524.971 |
| Other operating income | 2.110 | 2.234 | 4.115 | 4.522 |
| Raw materials and consumables used | -18.783 | -20.993 | -44.028 | -45.495 |
| Personnel expenses | -187.929 | -190.700 | -378.391 | -377.035 |
| Depreciation | -13.103 | -8.212 | -25.944 | -16.223 |
| Other operating expenses | -20.264 | -27.550 | -42.754 | -54.918 |
| EBIT | 6.950 | 17.491 | 21.238 | 35.822 |
| Share of profit in associates | 0.170 | 0.124 | 0.287 | 0.252 |
| Interest income | 0.024 | 0.072 | 0.051 | 0.116 |
| Financial expenses | -1.502 | -0.841 | -2.950 | -1.780 |
| Other financial result | -0.038 | 0.005 | -0.060 | 0.005 |
| Net finance income | -1.346 | -0.640 | -2.672 | -1.407 |
| Profit from ordinary activities | 5.604 | 16.851 | 18.566 | 34.415 |
| Other taxes | -0.976 | -0.884 | -1.761 | -1.707 |
| Earnings before tax | 4.628 | 15.967 | 16.805 | 32.708 |
| Income taxes | -1.380 | -4.525 | -4.846 | -9.340 |
| Post-tax earnings | 3.248 | 11.442 | 11.959 | 23.368 |
| Attributable to shareholders of Bertrandt AG | 3.248 | 11.442 | 11.959 | 23.368 |
| Number of shares (million) - diluted/basic, average weighting | 10.095 | 10.095 | 10.095 | 10.095 |
| Earnings per share (EUR) - diluted/basic | 0.32 | 1.13 | 1.18 | 2.31 |
| II. Statement of comprehensive income | ||||
| Post-tax earnings | 3.248 | 11.442 | 11.959 | 23.368 |
| Exchange rate differences1 | 0.026 | 0.345 | -0.074 | 0.445 |
| Revaluation of pension obligations | 1.337 | -0.030 | 1.337 | -0.060 |
| Tax effects of revaluation of pension obligations | -0.395 | 0.009 | -0.395 | 0.018 |
| Other comprehensive income after taxes | 0.968 | 0.324 | 0.868 | 0.403 |
| Total comprehensive income | 4.216 | 11.766 | 12.827 | 23.771 |
| Attributable to shareholders of Bertrandt AG | 4.216 | 11.766 | 12.827 | 23.771 |
CONSOLIDATED BALANCE SHEET TABLE 10
Assets
| EUR million | 31/03/2020 | 30/09/2019 |
| Intangible assets | 15.213 | 14.017 |
| Property, plant and equipment | 389.037 | 302.855 |
| Investment properties | 1.310 | 1.342 |
| Investments accounted for using the equity method | 6.740 | 6.453 |
| Financial receivables | 1.380 | 1.412 |
| Other financial assets | 2.697 | 2.581 |
| Other assets | 7.700 | 8.831 |
| Deferred taxes | 11.954 | 3.072 |
| Non-current assets | 436.031 | 340.563 |
| Inventories | 2.395 | 0.993 |
| Contract assets | 113.646 | 125.315 |
| Trade receivables | 185.570 | 226.007 |
| Financial receivables | 0.495 | 0.558 |
| Other financial assets | 2.035 | 2.873 |
| Other assets | 22.068 | 15.664 |
| Income tax assets | 5.797 | 5.198 |
| Cash and cash equivalents | 113.150 | 91.491 |
| Current assets | 445.156 | 468.099 |
| Total assets | 881.187 | 808.662 |
Equity and liabilities
| 31/03/2020 | 30/09/2019 | |
| Issued capital | 10.143 | 10.143 |
| Capital reserves | 29.714 | 29.714 |
| Retained earnings | 346.136 | 346.136 |
| Other reserves | -4.197 | -5.065 |
| Consolidated distributable profit | 31.571 | 35.764 |
| Equity | 413.367 | 416.692 |
| Borrowings | 208.545 | 212.419 |
| Other financial liabilities | 61.390 | 0 |
| Other liabilities | 1.593 | 1.747 |
| Provisions | 11.158 | 12.445 |
| Deferred taxes | 19.752 | 12.634 |
| Non-current liabilities | 302.438 | 239.245 |
| Borrowings | 32.331 | 3.498 |
| Contract liabilities | 4.505 | 4.520 |
| Trade payables | 15.638 | 15.751 |
| Other financial liabilities | 35.969 | 22.442 |
| Other liabilities | 58.040 | 72.562 |
| Other provisions | 17.612 | 33.185 |
| Tax provisions | 1.287 | 0.767 |
| Current liabilities | 165.382 | 152.725 |
| Total equity and liabilities | 881.187 | 808.662 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TABLE 11
| EUR million | Issued capital | Capital reserves | Retained earnings | Other reserves | ||
| Currency translation reserve | Revaluation of pension obligations | Total | ||||
| Value on 01/10/2019 | 10.143 | 29.714 | 346.136 | -1.290 | -3.775 | -5.065 |
| Post-tax earnings | ||||||
| Other comprehensive income after taxes | -0.0741 | 0.942 | 0.868 | |||
| Total comprehensive income | -0.074 | 0.942 | 0.868 | |||
| Dividend payment | ||||||
| Value on 31/03/2020 | 10.143 | 29.714 | 346.136 | -1.364 | - 2.833 | -4.197 |
| Previous year | ||||||
| Value on 30/09/2018 | 10.143 | 29.713 | 323.161 | -1.893 | -2.012 | -3.905 |
| Value adjustment according to IFRS 9 | 0.155 | |||||
| Value on 01/10/2018 | 10.143 | 29.713 | 323.316 | -1.893 | -2.012 | -3.905 |
| Post-tax earnings | ||||||
| Other comprehensive income after taxes | 0.4451 | -0.042 | 0.403 | |||
| Total comprehensive income | 0.445 | -0.042 | 0.403 | |||
| Dividend payment | ||||||
| Value on 31/03/2019 | 10.143 | 29.713 | 323.316 | -1.448 | -2.054 | -3.502 |
| EUR million | Distributable profit | Total |
| Value on 01/10/2019 | 35.764 | 416.692 |
| Post-tax earnings | 11.959 | 11.959 |
| Other comprehensive income after taxes | 0.868 | |
| Total comprehensive income | 11.959 | 12.827 |
| Dividend payment | -16.152 | -16.152 |
| Value on 31/03/2020 | 31.571 | 413.367 |
| Previous year | ||
| Value on 30/09/2018 | 39.764 | 398.876 |
| Value adjustment according to IFRS 9 | 0.155 | |
| Value on 01/10/2018 | 39.764 | 399.031 |
| Post-tax earnings | 23.368 | 23.368 |
| Other comprehensive income after taxes | 0.403 | |
| Total comprehensive income | 23.368 | 23.771 |
| Dividend payment | -20.190 | -20.190 |
| Value on 31/03/2019 | 42.942 | 402.612 |
CONSOLIDATED CASH FLOW STATEMENT TABLE 12
| EUR million 01/10 to 31/03 |
2019/2020 | 2018/2019 | |
| 1. | Post-tax earnings | 11.959 | 23.368 |
| 2. | Income taxes | 4.846 | 9.340 |
| 3. | Share of profit in associates | -0.287 | -0.252 |
| 4. | Interest income | -0.051 | -0.116 |
| 5. | Financial expenses | 2.950 | 1.780 |
| 6. | Other financial result | 0.060 | -0.005 |
| 7. | Depreciation of non-current assets | 25.944 | 16.223 |
| 8. | Increase/decrease in provisions | -16.860 | -14.923 |
| 9. | Other non-cash income/expense | 0.861 | -0.124 |
| 10. | Profit/loss from disposal of non-current assets | -0.033 | -0.070 |
| 11. | Increase/decrease in inventories, trade receivables as well as other assets not assigned to investing or financing activities | 34.570 | 52.487 |
| 12. | Increase/decrease in contract assets | 11.669 | -18.634 |
| 13. | Increase/decrease in trade payables and other liabilities not assigned to investing or financing activities | -17.857 | -7.288 |
| 14. | Income tax paid | -10.824 | -12.392 |
| 15. | Income tax received | 3.953 | 0 |
| 16. | Interest paid1 | -0.316 | -3.444 |
| 17. | Interest received1 | 0.051 | 0.099 |
| 18. | Cash flows from operating activities (1.-17.) | 50.635 | 46.049 |
| 19. | Payments received from disposal of property, plant and equipment | 0.213 | 0.866 |
| 20. | Payments received from the disposal of financial assets2 | 0 | 0.297 |
| 21. | Payments made for investments in property, plant and equipment | -24.665 | -37.919 |
| 22. | Payments made for investments in intangible assets | -2.450 | -1.345 |
| 23. | Payments made for investments accounted for using the equity method (previous year including financial assets)2 | 0 | -0.227 |
| 24. | Payments made to acquire consolidated and other businesses | -0.025 | 0 |
| 25. | Cash flows from investing activities (19.-24.) | -26.927 | -38.328 |
| 26. | Dividend payment | -16.152 | -20.190 |
| 27. | Financial receivables - payments received2 | 0.143 | 0 |
| 28. | Financial receivables - payments made2 | -0.157 | 0 |
| 29. | Payments received from issue of debt instruments and raising of loans | 26.834 | 0 |
| 30. | Payments made for discharging debt instruments and repaying loans3 | -8.850 | -0.968 |
| 31. | Interest paid1 | -3.759 | 0 |
| 32. | Cash flows from financing activities (26.-31.) | -1.941 | -21.158 |
| 33. | Changes in cash and cash equivalents (18.+25.+32.) | 21.767 | -13.437 |
| 34. | Effect of exchange rate changes on cash and cash equivalents | -0.108 | 0.187 |
| 35. | Cash and cash equivalents at beginning of period | 91.491 | 88.405 |
| 36. | Cash and cash equivalents at end of period (33.-35.) | 113.150 | 75.155 |
1
For information regarding the disclosure of interest paid within the cash flow statement,
see the explanations about the presentation of the interim consolidated financial
statements in the notes.
2
Refer to note [1] in the annual report 2018/2019 for explanations about the presentation
of financial statements.
3
For explanations about IFRS 16 see the management report and the notes.
CONSOLIDATED SEGMENT REPORT TABLE 13
| 01/10 to 31/03 | 2019/2020 | 2018/2019 | 2019/2020 | 2018/2019 | 2019/2020 | 2018/2019 |
| Revenues | 296.650 | 317.777 | 112.267 | 113.967 | 125.825 | 114.817 |
| Transfer between segments | 13.897 | 12.475 | 8.316 | 4.478 | 4.845 | 5.031 |
| Consolidated revenues | 282.753 | 305.302 | 103.951 | 109.489 | 120.980 | 109.786 |
| Other internally generated assets | 0.081 | 0.138 | 0.182 | 0.194 | 0.293 | 0.062 |
| Consolidated total revenues | 282.834 | 305.440 | 104.133 | 109.683 | 121.273 | 109.848 |
| EBIT | 4.415 | 17.268 | 7.700 | 8.017 | 9.123 | 10.537 |
| 01/01 to 31/03 | 2019/2020 | 2018/2019 | 2019/2020 | 2018/2019 | 2019/2020 | 2018/2019 |
| Revenues | 142.580 | 160.492 | 51.672 | 53.010 | 61.807 | 58.083 |
| Transfer between segments | 5.877 | 5.714 | 4.395 | 1.771 | 1.090 | 1.595 |
| Consolidated revenues | 136.703 | 154.778 | 47.277 | 51.239 | 60.717 | 56.488 |
| Other internally generated assets | 0.032 | 0.025 | 0.073 | 0.138 | 0.117 | 0.044 |
| Consolidated total revenues | 136.735 | 154.803 | 47.350 | 51.377 | 60.834 | 56.532 |
| EBIT | -0.214 | 7.909 | 3.577 | 4.228 | 3.587 | 5.354 |
| EUR million | Digital Engineering | Physical Engineering | Electrical Systems/Electronics | |||
| 01/10 to 31/03 | 2019/2020 | 2018/2019 |
| Revenues | 534.742 | 546.561 |
| Transfer between segments | 27.058 | 21.984 |
| Consolidated revenues | 507.684 | 524.577 |
| Other internally generated assets | 0.556 | 0.394 |
| Consolidated total revenues | 508.240 | 524.971 |
| EBIT | 21.238 | 35.822 |
| 01/01 to 31/03 | 2019/2020 | 2018/2019 |
| Revenues | 256.059 | 271.585 |
| Transfer between segments | 11.362 | 9.080 |
| Consolidated revenues | 244.697 | 262.505 |
| Other internally generated assets | 0.222 | 0.207 |
| Consolidated total revenues | 244.919 | 262.712 |
| EBIT | 6.950 | 17.491 |
| EUR million | Total of all divisions | |
SHARES OWNED BY MEMBERS OF THE MANAGEMENT AND SUPERVISORY BOARDS TABLE 14
| number | Shares | Shares |
| Balance at 31/03/2020 | Balance at 30/09/2019 | |
| Members of the Management and Supervisory Boards owning shares | ||
| Dietmar Bichler (Member of the Supervisory Board) | 400,000 | 400,000 |
| Total | 400,000 | 400,000 |
Options are not disclosed here as there is currently no option programme.
Bertrandt produces protective masks for employees.
Beginning in early April 2020, we began producing reusable face and nose masks throughout
Europe to provide the best possible protection for our employees.
Initially, just 300 handmade masks a day were being produced by the professional
sewing teams who usually work on small runs of exclusive seat covers for vehicles
or leather upholstery for yachts. "We realised that our extensive Bertrandt know-how
could also be used in this exceptional situation. It was obvious to us that we could
use the qualifications of our colleagues to help protect our employees. Our quality
assurance expertise is also being applied in this field. We test the fabrics and other
processed materials and are continuously optimising the masks. It is wonderful how
much commitment our workforce is showing," says Michael Lücke, Board Member for Sales
at Bertrandt.
Instructions on how to use masks are provided with every single one to ensure that
people wear them in the most effective way. The instructions show how to wear masks
properly, for instance, and what is the best temperature to wash them at.
The existing production line was reorganised to ensure masks are made in strict compliance
with current hygiene rules. This means, for example, that minimum physical distances
are maintained and that colleagues are separated from each other by plexiglass partitions.
Processes are also being constantly modified to meet series production requirements.
All employees will receive at least two masks to protect them against coronavirus.
These can be worn both at the workplace and when employees are not at work. Only when
all employees have been equipped will the Company be able to think about producing
masks for the general public as well.
Condensed Consolidated Notes
BASIC INFORMATION
The consolidated financial statements of Bertrandt Aktiengesellschaft, registered
at Birkensee 1, 71139 Ehningen, Germany (register number HRB 245259, commercial register
of the local court of Stuttgart), for the year ending 30 September 2019 were prepared
using the International Financial Reporting Standards (IFRS) effective at the reporting
date and as endorsed by the European Union (EU).
In principle, the presented unaudited half-year consolidated financial statements
as at 31 March 2020 have been prepared based on International Accounting Standard
(IAS) 34 Interim Financial Reporting, applying the same reporting methods as in the
consolidated financial statements for fiscal 2018/2019, with the exception of the
new IFRS 16 which is applicable for the first time in this financial year. The effects
of IFRS 16 are referred to under "Standards and Interpretations that are mandatorily
effective from this financial year". These interim consolidated financial statements
comply with the additional requirements of German commercial law pursuant to Section
315e (1) of the German Commercial Code (HGB). They also comply with all Standards
and Interpretations of the International Financial Reporting Interpretations Committee
(IFRIC) which are mandatorily effective for the financial year 2019/2020, and with
the German Corporate Governance Code.
A detailed description of these methods is published in the Notes to the Consolidated
Financial Statements of the Annual Report for fiscal 2018/2019. The Annual Report
is also accessible on the internet at www.bertrandt.com.
These interim consolidated financial statements were compiled in euros. Unless stated
otherwise, all amounts are shown in millions of euros (EUR million). Where percentage
values and figures are given, differences may occur due to rounding.
International Financial Reporting Standards and Interpretations that are subject to mandatory application as of fiscal 2019/2020
The following table sets out the International Financial Reporting Standards and
Interpretations that are subject to mandatory application as of fiscal 2019/2020.
TABLE 15
| Standard/Interpretation | Compulsory application1 | Expected effects | |
| IFRS 9 | Amendments to IFRS 9: Prepayment features with negative compensation | 01/01/2019 | None |
| IFRS 16 | Leases | 01/01/2019 | Accounting |
| IAS 19 | Amendments to IAS 19: Plan amendment, curtailment or settlement | 01/01/2019 | None |
| IAS 28 | Amendments to IAS 28: Long-term interests in associates and joint ventures | 01/01/2019 | None |
| IFRIC 23 | Uncertainty over income tax treatments | 01/01/2019 | None |
| Improvement to IFRS | Adoption of annual improvements to IFRS cycle 2015-2017 | 01/01/2019 | Single-case audit |
1
Fiscal years beginning on or after the specified date.
IFRS 16 - Leases
The Company adopted IFRS 16 using the simplified retrospective method.
For detailed explanations about the general changes required by IFRS 16 see page
87 in the 2018/2019 Annual Report.
The Bertrandt Group uses the following transition options and practical expedients:
| ― |
The capitalised right-of-use assets are allocated to those items in the balance sheet under which the underlying assets of the lease would be reported if they were owned by the Bertrandt Group. The right-of-use assets are mainly recognised as non-current assets, in property, plant and equipment. |
| ― |
The lease liabilities are shown in current and non-current liabilities respectively, depending on their maturities. |
| ― |
When the standard was applied for the first time, the initial direct costs were not taken into account in the measurement of the right-of-use assets. The lease liabilities and right-of-use assets were stated at the same amount. |
| ― |
The Company exercises transition reliefs regarding current (term less than 12 months) leases and leases for which the underlying asset is of low value (less than EUR 5,000). |
The first recognition of the right-of-use assets and lease liabilities in the balance
sheet has had the following effects as of 1 October 2019:
| ― |
Recognition of right-of-use assets and lease liabilities of EUR 81.267 million in the balance sheet |
| ― |
There were no effects on equity. |
In the period from 1 October 2019 to 31 March 2020, the initial application of IFRS
16 had the following effects on the consolidated income statement and the consolidated
balance sheet as at 31 March 2020:
EFFECTS OF IFRS 16 ON THE CONSOLIDATED INCOME STATEMENT TABLE 16
| EUR million 01/10 to 31/03 |
2019/2020 |
| Raw materials and consumables used | 0.059 |
| Depreciation | -8.664 |
| Other operating expenses (Operating lease expenses) | 9.126 |
| EBIT | 0.521 |
| Interest expense from lease liabilities | -0.943 |
| Net finance income | -0.943 |
| Profit from ordinary activities / Earnings before tax | -0.422 |
| Income taxes | 0.121 |
| Post-tax earnings | -0.301 |
EFFECTS OF IFRS 16 ON THE CONSOLIDATED BALANCE SHEET STATEMENT TABLE 17
| EUR million | 31/03/2020 (including IFRS 16) |
Impact of IFRS 16 | 31/03/2020 (excluding IFRS 16) |
| Assets | |||
| Non-current assets | 436.031 | -86.555 | 349.476 |
| - of which right-of-use assets | 389.037 | -77.550 | 311.487 |
| - of which deferred taxes | 11.954 | -9.005 | 2.949 |
| Current assets | 445.156 | 0 | 445.156 |
| Total assets | 881.187 | -86.555 | 794.632 |
| Equity and liabilities | |||
| Equity | 413.367 | 0.301 | 413.668 |
| - of which consolidated distributable profit | 31.571 | 0.301 | 31.872 |
| Equity ratio | 46.9% | 5.2% | 52.1% |
| Non-current liabilities | 302.438 | -70.273 | 232.165 |
| - of which other financial liabilities | 61.390 | -61.390 | 0 |
| - of which deferred taxes | 19.752 | -8.883 | 10.869 |
| Current liabilities | 165.382 | -16.583 | 148.799 |
| - of which other financial liabilities | 35.969 | -16.583 | 19.386 |
| Total equity and liabilities | 881.187 | -86.555 | 794.632 |
International Financial Reporting Standards and Interpretations that have been published but are not yet mandatory
The following standards and interpretations have already been adopted by the International
Accounting Standards Board (IASB) and to some degree approved by the EU but they were
not yet mandatory in fiscal 2019/2020. Bertrandt will apply them for the accounting
period for which they become effective.
TABLE 18
| Standard/Interpretation | Mandatory application1 | Expected effect | |
| IFRS 32 | Amendments to IFRS 3: Business combinations | 01/01/2020 | None |
| IFRS 7, IFRS 9 and IAS 39 | Amendments to IFRS 7, IFRS 9 and IAS 39: Interest rate benchmark reform | 01/01/2020 | None |
| IFRS 172 | Insurance contracts | 01/01/2021 | None |
| IAS 1 and IAS 82 | Amendments to IAS 1 and IAS 8: Definition of material | 01/01/2020 | Currently under examination |
| Improvements to IFRS | Changes on the conceptual framework of the IFRS regulations2 | 01/01/2020 | Single-case audit |
1
Fiscal years beginning on or after the specified date.
2
Not yet endorsed by the EU.
Presentation of interim financial statements
As a result of the both the adoption of IFRS 16 and additional subsidised loans,
the Company will, as from the current financial year, classify the interest paid as
financing cash flows. In addition, to improve the presentation of the information,
previous interest payments are also shown under cash flows from financing activities.
KONSOLIDIERUNGSKREIS
The group of consolidated companies includes all operating subsidiaries under the
legal and constructive control of Bertrandt AG.
Associates, i.e. entities which are not controlled by Bertrandt but over which the
Company has significant influence, and joint ventures, i.e. entities of which Bertrandt
has joint control, either directly or indirectly, are accounted for in the consolidated
financial statements using the equity method.
The following table shows the entities of the Bertrandt Group:
GROUP OF CONSOLIDATED COMPANIES TABLE 19
| 01/10 to 31/03 | 2019/2020 |
| Bertrandt AG and consolidated subsidiaries | 52 |
| Germany | 42 |
| Abroad | 10 |
| Associates and joint ventures | 19 |
| Germany | 19 |
| Abroad | 0 |
| Total | 71 |
FOREIGN CURRENCY TRANSLATION
The interim consolidated financial statements of subsidiaries using a functional
currency other than the euro are translated according to IAS 21. The subsidiaries
carry out their business independently for financial, commercial and organisational
purposes. The functional currency is therefore identical to the currency of the country
in which they are based.
Accordingly, for the interim financial statements these companies' assets and liabilities
were translated at the mean closing rate at the date of the statement of financial
position, and income and expenses were translated at the average exchange rate for
the period. All resulting exchange differences including differences resulting from
the translation of amounts brought forward from the previous year are recognised directly
in equity.
Foreign currency transactions are recorded by translating the foreign currency amount
into the functional currency amount at the exchange rate prevailing on the date of
the transaction. Gains and losses arising from the settlement of such transactions
as well as from the translation at the reporting date of monetary assets and liabilities
held in foreign currencies are recognised in profit or loss.
The parities of the key currencies relative to one euro were as follows:
FOREIGN CURRENCY TRANSLATION TABLE 20
| relative to one euro | Average rate on balance sheet date | Average rate first half | |||
| 31/03/2020 | 31/03/2019 | 2019/2020 | 2018/2019 | ||
| China | CNY | 7.7575 | 7.5618 | 7.7379 | 7.7781 |
| United Kingdom | GBP | 0.8862 | 0.8570 | 0.8606 | 0.8802 |
| Romania | RON | 4.8268 | 4.7628 | 4.7818 | 4.6972 |
| Turkey | TRY | 7.1938 | 6.3496 | 6.5744 | 6.1976 |
| Hungary | CZK | 27.3100 | 25.8220 | 25.5920 | 25.7740 |
| United States | USD | 1.0949 | 1.2323 | 1.1050 | 1.1389 |
RELATED PARTY DISCLOSURES
On 2 July 2014, Dr. Ing. h.c. F. Porsche AG, Stuttgart, increased its shareholding
in Bertrandt AG by nearly four percentage points. After the share purchase, Volkswagen
now indirectly holds around 29 percent of voting shares in Bertrandt. As in the past
it is not the intention of Volkswagen to exercise influence on the Supervisory Board
or the Management Board. From the date of the purchase of the shares, Bertrandt AG
will be accounted for as an associate in the consolidated financial statements of
the Volkswagen group under the equity method. Accordingly, the Volkswagen group has
to be classified as a related party pursuant to IAS 24. All supplier relationships
between Bertrandt AG and the Volkswagen group were based on arm's length prices. The
revenues arising from transactions with all Volkswagen group companies amounted to
EUR 176.472 million in the period under review (previous year EUR 162.541 million).
As of the balance sheet date, receivables amounted to EUR 79.752 million (previous
year EUR 66.176 million).
FAIR VALUE DISCLOSURES
The principles and methods used for fair value measurement have remained unchanged
compared to fiscal 2018/2019.
Based on the short maturities of the current financial assets and liabilities, it
is assumed that their fair values are nearly equal to their carrying amounts. The
fair values of non-current borrowings were EUR 215.873 million as of 31 March 2020
(previous year EUR 209.573 million) as a result of the development of interest rates.
The financial assets and financial liabilities at fair value through profit or loss
generally comprise derivatives to hedge foreign exchange and interest risks.
The derivatives' fair values are determined with generally accepted methods of financial
mathematics, using mid-market pricing. All derivatives with a positive fair value
are disclosed as derivative assets, while all derivatives with a negative fair value
are disclosed as derivative liabilities.
As at 31 March 2020 the fair value of all balance sheet items valued at their fair
value was EUR 0 million (EUR 0 million as at 30 September 2019). In the period under
review, no foreign exchange forward contract or interest rate hedging contract was
outstanding.
The fair value hierarchy established by IFRS 13 defines three levels of inputs to
valuation techniques which depend on the availability of observable market prices
in an active market. Level one input is input available for financial instruments
that are measured at quoted prices in active markets for identical assets or liabilities.
Financial instruments that are measured using Level two inputs are measured on the
basis of inputs other than quoted prices included within Level one, which are observable
either directly or indirectly. Level three input refers to market data for the measurement
of financial instruments that are unobservable. Interest rate derivatives and foreign
exchange forward contracts are categorised as Level two, other derivatives as Level
three. Non-current financial liabilities are categorised as Level two. As in the previous
year, there were no transfers between the three levels of the fair value hierarchy.
A sensitivity analysis is performed every year, analysing and evaluating internal
and external information and conditions for their probability of occurrence and the
resulting financial burdens. As in the previous year, the sensitivity analysis carried
out in the first quarter of fiscal 2019/2020 for derivatives measured according to
Level three of the fair value hierarchy did not lead to any change in the carrying
amount.
MATERIAL EVENTS AFTER THE REPORTING PERIOD
There were no material events after the reporting period of 1 October 2019 to 31
March 2020.
GERMAN CORPORATE GOVERNANCE CODE
The declarations of compliance with the German Corporate Governance Code pursuant
to Section 161 of the German Stock Corporation Act (AktG) by the Management and Supervisory
Boards of Bertrandt AG are accessible on the internet at www.bertrandt.com
RESPONSIBILITY STATEMENT IN LINE WITH ARTICLES 117, 115 SECTION 2 NO. 3 GERMAN SECURITIES TRADING COMBINED WITH ARTICLES 264 SECTION 2 SENTENCE 3, 289 SECTION 1 SENTENCE 5 GERMAN COMMERCIAL CODE
To the best of our knowledge, and in accordance with the applicable reporting principles
for interim financial reporting, the condensed consolidated interim financial statements
give a true and fair view of the assets, liabilities, financial position and profit
or loss of the Group and the interim management report of the Group includes a fair
review of the development and performance of the business and the position of the
Group, together with a description of the principal opportunities and risks associated
with the expected development of the Group for the remaining months of the financial
year.
Ehningen, 11 May 2020
The Management Board
| HANS-GERD CLAUS | MICHAEL LÜCKE | MARKUS RUF |
| Member of the Management Board Engineering | Member of the Management Board Sales | Member of the Management Board Finance |
Quarterly Survey
CONSOLIDATED INCOME STATEMENT TABLE 21
| EUR million | Q2 19/20 | Q1 19/20 | Q4 18/19 | Q3 18/19 | Q2 18/19 |
| Revenues | 244.697 | 262.987 | 274.164 | 259.371 | 262.505 |
| Other internally generated assets | 0.222 | 0.334 | 0.827 | 0.537 | 0.207 |
| Total revenues | 244.919 | 263.321 | 274.991 | 259.908 | 262.712 |
| Other operating income | 2.110 | 2.005 | 11.012 | 1.872 | 2.234 |
| Raw materials and consumables used | -18.783 | -25.245 | -39.887 | -23.373 | -20.993 |
| Personnel expenses | -187.929 | -190.462 | -195.274 | -193.077 | -190.700 |
| Depreciation | -13.103 | -12.841 | -8.757 | -8.707 | -8.212 |
| Other operating expenses | -20.264 | -22.490 | -27.892 | -26.316 | -27.550 |
| EBIT | 6.950 | 14.288 | 14.193 | 10.307 | 17.491 |
| Net finance income | -1.346 | -1.326 | -0.770 | -0.668 | -0.640 |
| Profit from ordinary activities | 5.604 | 12.962 | 13.423 | 9.639 | 16.851 |
| Other taxes | -0.976 | -0.785 | -0.744 | -0.806 | -0.884 |
| Earnings before tax | 4.628 | 12.177 | 12.679 | 8.833 | 15.967 |
| Income taxes | -1.380 | -3.466 | -3.976 | -1.890 | -4.525 |
| Post-tax earnings | 3.248 | 8.711 | 8.703 | 6.943 | 11.442 |
| - attributable to shareholders of Bertrandt AG | 3.248 | 8.711 | 8.703 | 6.943 | 11.442 |
| Number of shares (million) - diluted/basic, average weighting | 10.095 | 10.095 | 10.095 | 10.095 | 10.095 |
| Earnings per share (EUR) - diluted/basic | 0.32 | 0.86 | 0.86 | 0.69 | 1.13 |
Financial calendar
Report on the 3rd quarter 2019/2020
10 August 2020
Annual report 2019/2020
Annual press and analysts' conference
10 December 2020
Annual General Meeting
17 February 2021
10:30
City Hall Sindelfingen
Roadshows and Conferences
→ DATES
Credits
Published and edited by
Bertrandt AG
Birkensee 1, 71139 Ehningen
Germany
Telephone +49 7034 656-0
Telefax +49 7034 656-4100
www.bertrandt.com
info@bertrandt.com
HRB 245259
Amtsgericht Stuttgart
Contact
Björn Voss
Head of Investor Relations
Telephone +49 7034 656-4201
Telefax +49 7034 656-4488
bjoern.voss@bertrandt.com
Julia Nonnenmacher
Corporate Communication
Telephone +49 7034 656-4037
Telefax +49 7034 656-4242
julia.nonnenmacher@bertrandt.com
Design, layout and production
SAHARA Werbeagentur, Stuttgart
www.sahara.de
Legal Notice
This report contains inter alia certain foresighted statements about future developments,
which are based on current estimates of management. Such statements are subjected
to certain risks and uncertainties. If one of these factors of uncertainty or other
imponderables should occur or the underlying accepted statements proved to be incorrent,
the actual results could deviate substantially from or implicitly from the expressed
results specified in these statements. We have neither the intetion nor do we accept
the obligation of updating foresighted statements constantly since these proceed exclusively
from the circumstances on the day of their publication.
As far as this report refers to statements of third parties, in particular analyst
estimations, the organisation neither adopts these, nor are these rated or commented
thereby in other ways, nor is the claim laid to completeness in this respect.
Bertrandt AG
Birkensee 1, 71139 Ehningen
Germany
Telephone +49 7034 656-0
Telefax +49 7034 656-4100
www.bertrandt.com info@bertrandt.com