technotrans posted consolidated revenue of EUR 141.5 million (approximately Rs 1242 crore) in the first nine months of the 2020 financial year, only 7.8 % down on the prior-year figure of EUR 153.4 million (approximately Rs 1347 crore). This was mainly due to solid business development in the third quarter of 2020. Consolidated earnings before interest and taxes (EBIT) remained positive at EUR 3.9 million (approximately Rs 34 crore) with an EBIT margin of 2.8 %. Adjusted for one-off charges totaling EUR 2.1 million (approximately Rs 18 crore), EBIT reached EUR 6.0 million (approximately Rs 52 crore). The adjusted EBIT margin of 4.2 % was at the previous year’s level. For the 2020 financial year, the board of management expects consolidated revenue of around EUR 185 million (approximately Rs 1624 crore) with an EBIT margin of approximately 2.5 to 3.0%. Adjusted for one-off effects, this is expected to reach the previous year’s level of around 4.0%.
“Business development has exceeded our expectations. Following a solid business performance in the third quarter, consolidated revenue after nine months is only moderately down on the previous year despite ongoing corona-related charges. Despite high additional expenditure on structural adjustments within the technotrans Group, which we have pushed ahead with independently of corona, technotrans remains profitable. Adjusted for one-off effects, we achieved an EBIT margin at the previous year’s level. We are satisfied with this business performance against the background of a very difficult global economic situation,” says Michael Finger, spokesman of the board of management of technotrans.
Adjusted EBIT margin on previous year’s level
The technotrans Group posted consolidated revenue of EUR 141.5 million (approximately Rs 1242 crore) in the first nine months of the 2020 financial year. This was only 7.8 % below the previous year despite corona-related burdens. EBIT remained positive at EUR 3.9 million (approximately Rs 34 crore) with an EBIT margin of 2.8 % (previous year: 4.3 %). EBIT included one-off charges of EUR 2.7 million (approximately Rs 23 crore) from structural and personnel adjustments as well as one-off income of EUR 0.6 million (approximately Rs 5 crore) from the termination of a fine proceeding (Federal Financial Authority BaFin). This resulted in an adjusted EBIT of EUR 6.0 million (approximately Rs 52 crore). At 4.2%, the adjusted EBIT margin remained at the previous year’s level.
The Group’s assets and financial position remained solid. The equity ratio was 50.5 % (December 31, 2019: 51,4 %). The Group had cash and cash equivalents of EUR 26.6 million (approximately Rs 233 crore) on September 30, 2020, and reduced its net debt by more than 11 % to EUR 21.5 million (approximately Rs 188 crore) in the period under review. technotrans generated a positive free cash flow of EUR 3.5 million (approximately Rs 30 crore) in the nine-month period (previous year: EUR 1.0 million, approximately Rs 8 crore) was achieved – despite increased investments due to the new building at the Holzwickede site.
The consequences of the corona pandemic have affected the reporting segments to varying degrees. The technology segment achieved revenue of EUR 102.4 million (approximately Rs 899 crore). The decline compared with the previous year’s figure of EUR 109.1 million (approximately Rs 958 crore) was moderate at 6.1 %. On the other hand, the change in earnings was more pronounced, which was due in part to a comprehensive allocation of one-off structural costs. The segment EBIT thus fell from EUR 0.3 million (approximately Rs 2 crore) to EUR -1.2 million (approximately Rs -10 crore). The return for the segment fell accordingly from 0.3 % to -1.2 %. Adjusted for one-off effects, this was slightly higher than in the previous year at 0.4%.
In the services segment, business development continued to be adversely affected, in particular by corona-related travel restrictions. Segment revenue of EUR 39.1 million (approximately Rs 343 crore) was 11.9 % and thus significantly below the previous year’s figure of EUR 44.4 million (approximately Rs 389 crore). As expected, the segment EBIT was stable at EUR 5.1 million (approximately Rs 44 crore) (previous year: EUR 6.3 million, approximately Rs 55 crore). The return for the segment of 13.1 % (previous year: 14.2 %), adjusted for one-off effects, reached the previous year’s level of 14.3 %.
Growth markets and plastics processing remain stable
The printing industry has stabilized after a recent sharp corona-related downturn but remained well below the previous year’s level. In the machine tool industry, the third quarter saw structural burdens in addition to corona effects. This resulted in a decline in revenue in the laser and machine tool industry, which could not be fully offset by the continued growth of the EUV business. Business in the plastics processing industry developed positively thanks to successful sales activities. The same applies to the growth markets. New business in battery and converter thermal management solutions for rail and special vehicles, eBuses, and eTrucks contributed to the pleasing business trend. The Group also achieved further successes in medical technology. The ramp-up phase for the serial production of the newly developed blood cooling system will be completed in the fourth quarter of 2020.
Outlook: Focus on technological competence
Following a weakening of the pandemic in the summer months, infection rates are currently rising sharply. Many governments have recently tightened up measures to contain the pandemic. Protecting all employees and business partners against infection and ensuring stable business operations with a high level of sales activity remain top priorities for technotrans.
“We are continuously achieving sales successes and further expanding our market positions even under the current difficult conditions. In addition to project orders for promising rail projects, we have acquired a major order for the cooling of eBus charging stations and entered into a development partnership with a technology group in the eTruck sector. In the service business, we are pushing forward digitalization. We are also successful internationally – in China, we have acquired leading medical technology OEMs as new customers,” says Michael Finger.
Based on the business performance in the first nine months of fiscal year 2020, the board of management expects consolidated revenue of around EUR 185 million (approximately Rs 1624 crore) with an EBIT margin of approx. 2.5 to 3.0 % and a positive free cash flow for fiscal year 2020. The EBIT margin adjusted for one-off effects is expected to reach the previous year’s level of 4.0 % despite the decline in revenue. This forecast is subject to the proviso that no corona-related restrictions are imposed in the remaining weeks of 2020 that go beyond the measures initiated by the government at the beginning of November.
“We are counteracting the currently growing challenges posed by the Covid-19 pandemic with a high degree of customer orientation, technological competence, creativity in the development of individual concepts, and strict cost control. Our pipeline is full! We will take advantage of the opportunities that present themselves! In the future, we will position ourselves even more strongly for this purpose. We will present the Strategy 2025 at the end of 2020,” says Michael Finger.
