DGAP-News: R. Stahl AG / Key word(s): Quarterly / Interim Statement/9 Month figures
R. STAHL's business performance in Q3 2020 impacted by weak global economy - yet specified earnings guidance slightly above market expectations
- Sales in Q3 2020 of €59.6 million down 16.4% compared to the strong prior year (Q3 2019: €71.3 million), but on par with prior quarter - weak global economy still weighed on daily business and projects
- EBITDA pre declines to €5.0 million (Q3 2019: €10.4 million) - selective cost adjustments noticeably cushion the impact of lower sales
- Reduction of working capital lowers net debt excluding lease liabilities sequentially to €8.6 million (Q2 2020: €10.3 million)
- Order backlog of €74.2 million at the end of the quarter continues to be solid and above prior year's quarterly levels
- Guidance corridor for 2020 further specified: sales to reach between €242 million and €248 million due to persisting market weakness, EBITDA pre to come in between €15 million and €18 million slightly above market expectations
Though statements of a slow recovery can increasingly be heard from a range of customer industries, demand for explosion-protected products unexpectedly remained very moderate in the quarter under review. While sales in Germany were roughly on par with the prior year thanks to more deliveries for expansion investments in the chemical industry, all other regions saw double-digit percentage declines due to their high exposure to the oil and gas sector. This was driven by postponements of orders for replacement and upgrade investments and in a corresponding purchase reticence in the daily business for components and systems. In addition, a number of major global projects are still frozen at the moment.
"As the COVID-19 pandemic continues, it is becoming clear that its economic effects hit our markets harder than we expected in the first half of the year. In the past quarter, again, we responded to the weak sales development with selective cost reductions which noticeably dampened the earnings decline. Today, R. STAHL is much better positioned to deal with economic downturns compared to some years ago", said Dr Mathias Hallmann, Chief Executive Officer of R. STAHL. "Although we will not be able to reach the sales level that we have communicated until recently, we expect EBITDA pre to slightly exceed market expectations", Dr Hallmann continued.
Measures aiming at safeguarding liquidity, including a lower build-up of receivables, decreased working capital in the reporting period by €2.9 million (Q3 2019: increase of €1.0 million). Despite softer earnings, this led to an increase of cash flow from operating activities by €1.2 million to €7.3 million in the quarter under review (Q3 2019: €6.1 million), resulting in a reduction of net debt (excluding pension provisions and excluding lease liabilities) to €8.6 million as of 30 September 2020 (30 June 2020: €10.3 million).
At the end of the period under review, the order backlog declined to €74.2 million (30 June 2020: €79.7 million), but continued to remain at a solid level above the quarterly average of the previous year.
On the basis of the business development in the first ten months of this year, the current situation suggests that it will no longer be possible to achieve the sales target of at least €260 million for 2020 that we have communicated until recently. Consequently, the Executive Board now adapts the sales outlook for 2020 to a range between €242 million and €248 million. However, based on the achievements we made to improve our cost position, we reiterate our earnings outlook 2020 to reach an EBITDA pre exceptionals in the low double-digit million Euro range and further specify it to a corridor between €15 million and €18 million, slightly above current market expectations of around €14 million. We also continue to anticipate a positive free cash flow for 2020. In light of the considerable increase in pension provisions as a result of a lower interest rate, we now foresee an equity ratio of about 20% as of the end of the year under review, down from 22.5% that we have anticipated until recently.
1) Africa and Europe excl. Germany
2) Exceptionals: restructuring charges, non-scheduled depreciation and amortization, charges for design and implementation of IT-projects, M&A costs as well as profit and loss from the disposal of non-current assets no longer required for business operations
3) excl. pension provision and excluding lease liabilities
4) excl. apprentices
Percentages and figures in this report may include rounding differences. The signs used to indicate rates of change are based on economic aspects: improvements are indicated by a "+" sign, deteriorations by a "-" sign. Rates of change >+100% are shown as >+100%, rates of change <-100% as "n/a" (not applicable).
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R. STAHL AG
Dr. Thomas Kornek
Senior Vice President Investor Relations & Corporate Communications
Am Bahnhof 30
74638 Waldenburg (Württ.)
Tel. +49 7942 943-1395
|Company:||R. Stahl AG|
|Am Bahnhof 30|
|Phone:||+49 (7942) 943-0|
|Fax:||+49 (7942) 943-4333|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Tradegate Exchange|
|EQS News ID:||1147450|
|End of News||DGAP News Service|