Update of FY 2017 outlook

Order intake unchanged, sales and EBIT pre exceptionals expected to come in softer, first measures implemented to improve earnings situation

As part of the quarterly closing of Q2 2017, the Executive Board of R. STAHL AG also discussed the verification of the outlook for FY 2017.

According to the preliminary figures for Q2 2017, the recovery of the market for explosion protected products that became visual already at the beginning of the year continued. With an order intake of EUR 76.5 million, the already high level of the previous quarter was slightly exceeded (Q1 2017: EUR 75.8 million). The increase in demand becomes even more visible when the past two half-year periods are compared: while order intake in H2 2016 was just at EUR 132.7 million, orders totaling EUR 152.3 million came in during H1 2017, a sequential increase of 14.7 percent. As a result, order backlog grew by EUR 8.6 million to EUR 99.9 million at the end of the second quarter (Q1 2017: EUR 91.3 million), being only slightly below previous year’s high level (Q2 2016: EUR 100.0 million).

Although order intake in the first six months of the year was robust, demand from the oil and gas sector still remained at a comparatively low level. While this sector’s contribution to R. STAHL’s sales is declining since some time, it still contributes around 40 percent to the topline, thus representing the most important industry sector.

The increasing momentum in order intake has not translated into the development of sales yet. Though sales of EUR 66.8 million in Q2 2017 marked a slight improvement compared to the previous quarter (Q1 2017: EUR 65.5 million), this was significantly below growth in order intake. As a consequence, EBIT pre exceptionals came in at EUR -2.7 million, still at the low level of the previous quarter (Q1 2017: EUR -2.3 million).

Placement of orders in the project business – that represents around one third of sales at R. STAHL – is sluggish. Also, technical clarifications that are necessary to start production last longer than in the past. Thus, the average lead time between order intake and shipment of orders has increased compared to previous years. An analysis of the current order backlog shows that around 40 percent of it will translate into sales and earnings only in FY 2018. Based on this, the current order backlog that will translate into sales and earnings already in 2017 together with the additional order volume and sales that are expected to come in during the second half of 2017 will not be sufficient to achieve the previous outlook for FY 2017. Since this outlook was based on assumptions of earlier sales recognition the following update is now necessary:

For FY 2017, the previous outlook of order intake in the range between EUR 295 million and EUR 305 million is confirmed. Sales are now expected to come in between EUR 270 million and EUR 280 million (previously: EUR 285 million and EUR 295 million) and EBIT pre exceptionals is expected between EUR -4 million and EUR 0 million. This corresponds to sales between EUR 138 million and EUR 148 million and an EBIT pre exceptionals between EUR 1 million and EUR 5 million for the second half of 2017.

The updated outlook is based on the assumption of sales recognition according to plan, i. e. that there will be no postponements of orders that are scheduled to be shipped in FY 2017. In addition, it is assumed that there will be no major changes in demand in key customer industries, particularly that there will be no downturn in the oil and gas sector, and that exchange rates of foreign currencies that are most relevant to R. STAHL will also not change significantly.

Following analyses of the organization’s processes and structures, the Executive Board has identified possibilities for cost reductions. First measures are already being implemented.


* exceptionals: non-scheduled depreciation, impairment reversals, proceeds from the sale of non-current assets, restructuring charges, costs from portfolio activities



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Dr. Thomas Kornek
Hear of Investor Relations & Corporate Communications
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