Rosenbauer International AG:
Rosenbauer Group Closes 2018 with Record Highs for Revenues and Orders
- * Consolidated revenues rise to Eur 909.4 million, incoming orders reach Eur 1,107.7 million
* Five of the six segments expanded their business volume
* Profitability back at normal level with EBIT margin of 5.4%
* Dividend proposal of Eur 1.25 per share intended to validate investors' trust
|GROUP KEY FIGURES||2017||2018|
|Net profit for the period||Eur million||18.5||34.7|
|Cash flow from operating activities||Eur million||28.4||-13.6|
|Equity in % of total assets|| ||38.2%||30.3 %*|
|Earnings per share||Eur||1.1||3.7|
|Dividend (proposal to AGM)||Eur per share||1.0||1.25|
|Number of employees as of December 31|| ||3405||3621|
|Order backlog as of December 31||Eur million||882.6||1052.3|
*) Equity in % of total assets (without IFRS 15): 34.7%
The Rosenbauer Group closed the 2018 financial year with some all-time highs, as revenues of Eur 909.4 million (2017: Eur 847.6 million) and incoming orders of Eur 1,107.7 million (2017: Eur 970 million) both marked new records. At the same time, the last three months of the financial year also represented the strongest quarter in the company's history, with revenues of Eur 357.4 million. The business growth was particularly attributable to Western Europe and the Middle East, with Stationary Fire Protection, Germany and Austria also posting increases. Profitability improved, as targeted, with EBIT of Eur 48.8 million (2017: Eur 21.1 million) and an EBIT margin of 5.4%.Revenues and result of operations
The global firefighting industry benefited from a generally positive economic environment in 2018, performing very robustly. The strongest sales regions were Europe, North America and Asia, the biggest single markets the US, China and Germany. In some cases, the markets showed signs of a recovery in countries highly dependent on the price of oil. Nonetheless, procurement volumes still fell significantly short of past levels.
Against this backdrop, the Rosenbauer Group resumed its growth trajectory and generated revenues of Eur 909.4 million (2017: Eur 847.6 million). The strongest growth was posted by the NISA area (Northern Europe, Iberia, South America, Africa) and the MENA area (Middle East, North Africa) at 28% each, followed by Stationary Fire Protection with a 4% increase. The APAC area (Asia-Pacific) was the only region where, due to uncertainties on the Chinese market, revenues were lower than the comparative figure from 2017.
EBIT was well above the previous year's level at Eur 48.8 million in 2018 (2017: Eur 21.1 million). The significant increase in earnings is mainly due to a strong production output resulting from the very good order situation, and an advantageous production mix. EBIT in 2017 had also been impacted by a number of non-recurring effects. Due to losses in the carrying amount from currency hedging relating to the reporting date, higher US interest rates and the increased interest expense for increasingly demanding financing requirements, finance costs deteriorated year-on-year to Eur -4.6 million in 2018 (2017: Eur -0.2 million).
In the past financial year, the Rosenbauer Group applied the new accounting standard IFRS 15 for the first time and therefore switched from recognition of revenues over time to recognition at a specific point in time. The effects of this transition leveled off in step with the business cycle by the end of the year, ultimately having an impact of Eur 16.7 million on revenues and of Eur 0.1 million on EBIT. As a result of IFRS 15, total assets increased by Eur 47.2 million.
Incoming orders reached another all-time high of Eur 1,107.7 million in 2018 (2017: Eur 970 million). The biggest contribution to this growth came from the MENA area, which won a tender by the General Department of Civil Defense in Kuwait. This major order with a volume of around Eur 35 million comprises 55 vehicles, including seven aerial ladders and five PANTER 6x6. There were also substantial increases in incoming orders in the APAC area and in Stationary Fire Protection. As of December 31, 2018, the order backlog amounted to Eur 1,052.3 million, up 19% on the previous year's figure (2017: Eur 882.6 million).Financial and net assets position
The Rosenbauer Group's total assets increased significantly to Eur 782.3 million in 2018 (2017: Eur 625.4 million). This was due to the high delivery volume to the end of the year and very good order situation, as reflected in increased receivables and inventories. On the other hand, current interest-bearing liabilities also increased to Eur 165.4 million after Eur 105.1 million.
Equity amounted to Eur 237.1 million as of the end of the year (2017: Eur 239.2 million). Given the increase in total assets, the equity ratio fell to 30.3% (2017: 38.2%) and was thus below the benchmark of 40%.
The financial structure of the Rosenbauer Group remains solid. The high working capital due to contract manufacturing improved to Eur 181.3 million as of the end of the year (2017: Eur 189.7 million). Due to strong customer business and the resulting higher interim financing requirements, net debt rose to Eur 231.5 million (2017: Eur 184.1 million). The gearing ratio climbed to 97.6% (2017: 77%).
The net cash flow from operating activities was negative at Eur -13.6 million in 2018 (2017: Eur 28.4 million). This was primarily due to the significant increase in inventories and customer receivables.Dividend
The Rosenbauer Group follows a growth-oriented and sustainable dividend policy that is consistent with the company's performance. In response to the positive annual results for 2018, the Executive Board and the Supervisory Board will propose a dividend of Eur 1.25 (2017: Eur 1.00) per share at the Annual General Meeting to validate the investors' trust. Accordingly, the distribution volume for 6.8 million no-par-value shares will be Eur 8.5 million (2017: Eur 6.8 million). Based on the closing price of Eur 33.3, this corresponds to a dividend yield of 3.8% (2017: 1.9%).Outlook
The global firefighting industry still appears robust in 2019 and, not least thanks to full order books, is holding its ground despite the weakening global economy. A consistently dynamic international project landscape should also support further market growth and prolong the positive development of the sector.
Further strong demand for fire trucks is expected on the North American market in 2019, which could once again raise the procurement volume to above the long-term average of around 4,000 vehicles.
The European firefighting market is likewise set to continue its growth. Demand was recently very strong, particularly in Austria, Germany, France and the UK.
The countries of the Middle East started 2019 with sound demand. Despite new geopolitical uncertainties and a lower oil price, further recovery in procurement volume is predicted for the year as a whole.
Rosenbauer closely monitors developments on the different fire equipment markets in order to exploit sales opportunities early on. Sales activities are then stepped up in the countries or regions where greater procurement volumes have been identified.