R. STAHL publishes results for fiscal year 2014

R. Stahl AG / Key word(s): Final Results 2015-04-14 / 08:31 R. STAHL publishes results for fiscal year 2014- Order intake and backlog at all-time high- Earnings burdened by takeover attempt and investment programme- Persistently low oil prices lead to cautious outlookWaldenburg, 14 April 2015 - R.

R. Stahl AG / Key word(s): Final Results

2015-04-14 / 08:31

R. STAHL publishes results for fiscal year 2014

- Order intake and backlog at all-time high

- Earnings burdened by takeover attempt and investment programme

- Persistently low oil prices lead to cautious outlook

Waldenburg, 14 April 2015 - R. STAHL, leading supplier of products and systems for explosion protection, today published its audited results for fiscal year 2014 and confirmed the preliminary figures already published:

- Record order intake of EUR 335.2 million (previous year: EUR 304.1 million)

- Sales up to EUR 308.5 million (previous year: EUR 304.4 million)

- Earnings before interest and taxes (EBIT) reach EUR 18.3 million (previous year: EUR 24.9 million), EBIT margin of 5.9% (previous year: 8.2%)

- Net profit of EUR 9.8 million (previous year: EUR 15.4 million), corresponding to earnings per share of EUR 1.67 (previous year: EUR 2.59)

- Executive Board and Supervisory Board propose a dividend of EUR 0.80 (previous year: EUR 1.00) per share

- External factors make guidance more uncertain

Martin Schomaker, CEO of R. STAHL AG, commented as follows on the company's results: "2014 was an exceptional and eventful year for R. STAHL. We began the year with very high order intake in the first quarter. Orders expected in the previous year were finally awarded in early 2014. We were then knocked off course by a hostile takeover bid. Management capacities were diverted from our operating business in order to fend off the takeover attempt and planned market launches had to be postponed. This affected earnings in particular. For the year as a whole, we achieved a significant increase in order intake and set a new company record - exceeding the healthy prior-year figure by 10%. This strong demand confirms our decision to invest in the expansion of global capacities."

Compared to the dynamic trend in order intake, there was only slight growth in sales of 1.4% to EUR 308.5 million (previous year: EUR 304.4 million). The key growth driver for sales in the reporting period was the Asia-Pacific region, where revenues rose by 13.2% to EUR 56.4 million (previous year: EUR 49.8 million). There was also a positive trend on the American market with sales growth of 4.2% to EUR 52.8 million (previous year: EUR 50.6 million). Whereas the South American market remains challenging, there was encouraging success in the USA. Business in Germany continued to benefit from the strong demand of the previous year with sales up 2.8% to EUR 66.8 million (previous year: EUR 65.0 million). The weakest trend was reported by the Central region (without Germany), where sales fell by 4.6% to EUR 132.5 million (previous year: EUR 139.0 million). In addition to the ongoing economic problems of southern Europe, developments in this region were further hampered by the Ukraine crisis. At 78.4%, the proportion of foreign sales was virtually unchanged from the previous year (78.7%).

CFO Bernd Marx explains: "We regard the development of our business in the Americas and Asia as a result of our expansion strategy. As sales in India grow, economies of scale at our new production plant in Chennai become more apparent. With our in-depth local knowledge, we are attracting customers and establishing ourselves as a top-quality partner in the region. One example of this was the order we received to supply new LED lights for a large refinery and petrochemicals complex on India's north-west coast. In 2014, we also completed the expansion of our facility in Kuala Lumpur and transformed our Malaysian subsidiary into a hub for Southeast Asia." The expansion of the company's site in Houston/Texas also helped it win additional orders. With the aid of an optimized sales concept, the US subsidiary focused more on OEM providers with a resulting positive impact on sales in the USA. Just one year after the US Coast Guard announced its intention to accept the IECEx standard for mobile platforms under foreign flag, R. STAHL received its first order for an IECEx-certified FPSO in the Gulf of Mexico.

From the point of view of R. STAHL's client industries, 2014 was marked by major upheavals on the commodity markets. In countries with high production costs, such as Norway and the USA, low oil prices have reduced the propensity to invest in new equipment. At the same time, however, customers in other sectors - such as the chemical and pharmaceutical industries - are benefiting from lower commodity prices. The effects of the low oil price will translate to a lower demand for R. STAHL's explosion protected products and systems with a delay of certain months.

Earnings affected by expansion programme and hostile takeover bid
At EUR 18.3 million, the EBIT result was down on the previous year (EUR 24.9 million) with an EBIT margin of 5.9% (8.2%). Pre-tax earnings (EBT) amounted to EUR 14.7 million (previous year: EUR 21.3 million). Earnings in 2014 were affected by two major factors: the investment programme and the hostile takeover attempt. Increased fixed costs, in the form of higher rental and ancillary costs, additional depreciation and higher headcount were not yet completely covered by revenue growth in the early phase of expansion. Personnel expenses were up by 9.0% and depreciation by 6.6% year on year. The takeover bid led to both direct and indirect costs, such as expenses for external consultants. By contrast, currency effects had a positive impact on earnings in 2014. Following the negative contributions of the previous year, targeted currency management helped produce net gains once again in the reporting period.

Due to the high order backlog and large number of long-term project orders, the volume of finished and unfinished goods increased and led to a rise in working capital in 2014. At the end of the reporting period, trade receivables had also grown to a high level as a result of revenue growth in the fourth quarter. As a result, cash flow from operating activities fell from EUR 27.4 million to EUR 3.1 million. Cash flow from investing activities amounted to EUR 18.6 million in 2014 (previous year: EUR 24.2 million). The year-on-year decline indicates that the majority of expansion projects have now been implemented. In Waldenburg, the extension of the new research and development centre was completed on budget. In August 2014, construction work began on the joint production and development centre for the two subsidiaries R. STAHL HMI Systems GmbH and R. STAHL Camera Systems GmbH in Cologne. It is expected to be completed in 2015.

Cash and cash equivalents fell from EUR 25.0 million in the previous year to EUR 15.8 million as of 31 December 2014. The increase in the present value of pension obligations reduced equity capital. The reason is a decline in the underlying interest rate in Germany from 3.7% in the previous year to 2.0% as of 31 December 2014. Equity was also reduced by the buyback of shares representing 2% of share capital in the first half of 2014. As a result, the equity ratio fell from 37.1% to 27.3%.

RAG-Stiftung becomes long-term investor
On 11 December 2014, R. STAHL AG concluded a contract with RAG-Stiftung Beteiligungsgesellschaft mbH regarding the sale of 644,000 R. STAHL shares - and thus 10% of share capital. As the shares were not transferred until 20 January 2015 on payment of the purchase price, the positive effects of the transaction are not recognized on the 2014 balance sheet. In January 2015, R. STAHL received liquid funds of EUR 24.5 million raising the equity ratio to around 36%.

Dividend of EUR 0.80 per share proposed
At the Annual General Meeting in Neuenstein on 22 May 2015, the Executive Board and Supervisory Board of R. STAHL AG will propose a dividend of EUR 0.80 per dividend-bearing, no-par value share. With a payout ratio of around 58% of the distributable balance sheet profit, R. STAHL AG is continuing its shareholder-friendly and results-oriented dividend policy.

Outlook - reduced guidance certainty due to economic and political instabilities
With regard to the company's strategic targets, Martin Schomaker made the following statement: "We want to expand our market share and enhance earnings by launching new high-margin products."

"We will complete our investment programme in 2015 and improve returns as capacity utilization increases," commented Bernd Marx. The focus will be on exploiting economies of scale.

With its strong market standing and high order backlog, the company is well prepared for the current year. Internal measures to increase profitability are being overshadowed, however, by the development of external factors. As a result, only a cautious outlook is possible. Due to persistently low oil prices, the company faces falling demand from its most important client industry. Margins will also suffer as the oil industry puts further pressure on prices. For the fiscal year 2015, order intake and sales revenues of between EUR 320 million and EUR 330 million are expected. The forecast range for EBIT is between EUR 16 million and EUR 20 million. As the external factors, which influence business, can change very quickly, these forecasts are subject to a high degree of uncertainty.


Key figures of R. STAHL Group according to IFRS

in EUR million
in EUR million
in %
Revenues308.5304.4+ 1.4
Germany66.865.0+ 2.8
Europe excluding Germany132.5139.0- 4.6
Americas52.850.6+ 4.2
Asia Pacific56.449.8+ 13.2
Order intake335.2304.1+ 10.2
Order backlog90.566.0+ 37.1
EBIT (Earnings before interest and tax)18.324.9- 26.5
EBIT-margin (%)5.9%8.2% 
EBT (Earnings before tax)14.7 21.3- 31.0
EBT-margin (%)4.8%7.0% 
Net Earnings9.815.4- 36.2
Earnings per share (EUR)1.672.59- 35.5
Investments in intangible assets and property, plant and equipment18.724.7- 24.3
Depreciation and amortization of intangible assets and property, plant and equipment12.812.0+ 6.6
Cashflow from operations3.127.4- 88.5
Cash and equivalents15.825.0- 36.6
Equity ratio (%)27.3%37.1% 
Dividend per share (EUR)0.80*1.00- 20.0
Employees as of 31.12. (excl. apprentices)1,9421,853+ 4.8

* Dividend proposal for AGM to be held on 22 May 2015.

The full report for the fiscal year 2014 will be available for download from 14 April 2015 at the company's website under www.r-stahl.com/investor-relations/financial-reports.html.


Balance presentation
Management of R. STAHL AG will present the fiscal year 2014 results at 10:30 a.m. (CET) in German language today at the premises ofBerenberg Bank, Bockenheimer Landstraße 25 in Frankfurt am Main.

The conference can be joined via telephone under +49 69 247503443. In parallel presentation slides will be displayed on the internet at eventmanager.meetyoo.de (PIN: 86802645).

An audio cast of the call will be available thereafter on the company's website:

Financial calendar 2015

7 May Q1 report
22 May Annual General Meeting in Neuenstein
6 August H1 report
5 November Q3 report


About R. STAHL
R. STAHL is one of the world's leading suppliers of electrical and electronic products and systems for explosion protection. These products and systems prevent explosions in hazardous areas and contribute to the safety of people, machines and the environment. The portfolio ranges from products used in switching/distributing, installing, operating/monitoring, lighting and signalling/alarming, up to automation. Typical customers operate in industries, such as the oil & gas industry, the chemical and pharmaceutical industry and the food industry. In 2014, global sales amounting to EUR 308.5 million were generated with about 1,942 employees. The shares of R. STAHL AG are traded on the Regulated Market/Prime Standard of Deutsche Boerse (ISIN DE000A1PHBB5).

Am Bahnhof 30, 74638 Waldenburg (Württ.)

Bernd Marx (CFO)
Phone: +49 7942 943 1271

Nathalie Dirian (Investor Relations)
Phone: +49 7942 943 1395

Frank Schwarz (Investor Relations)
Phone: +49 611 5802 9290

E-mail: [email protected]

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343715  2015-04-14