Revenue up 16.6 percent to EUR 151.3 million / EBIT up 20.4 percent to EUR 15.7 million / net income for the period EUR 10.0 million or EUR1.48 per share / Shareholders' Meeting to approve dividend of EUR 0.70 per share / target for 2007: further growth
The revenue of the technotrans Group reached a new record level of EUR151.3 (previous year 129.8) million in the 2006 financial year. This growth of 16.6 percent easily exceeded the original targets (plus 8 percent to around EUR 140 million). Both segments contributed towards this satisfying development: the Technology segment grew from EUR 99.9 to EUR 115.7 million, equivalent to a rise of 15.9 percent. Growth in the Services segment even touched 18.8 percent. The 2006 financial year yet again demonstrated that technotrans was not only able to profit from the positive climate, but also that its proven growth strategy – more technotrans per printing press and an expanded international network – has born fruit.
Profitability, too, developed positively, mirroring revenue in exceeding our expectations (net income EUR 10 million instead of the targeted EUR 8.5 to 9 million). Thanks to the healthy business progress, the two one-off effects (merger of the two American locations and write-down of goodwill in the CD/DVD sector) did not threaten attainment of the earnings target.
Gross profit (revenue less cost of sales) rose by 13.6 percent in 2006 to EUR 50.4 (44.4) million. The gross margin reached a satisfactory level of 33.3 percent at year end.
Earnings before interest and tax (EBIT) rose by 20.4 percent, and therefore more steeply than revenue, to EUR 15.7 (13.0) million. The EBIT margin (ratio of EBIT to revenue) showed an overall improvement to 10.4 (10.0) percent in 2006 despite the one-off effects, and is consequently within the target range of more than 10 percent.
technotrans generated an accounting profit of EUR 14.9 (12.3) million in the 2006 financial year, representing a rise of 21.1 percent.
Income tax expense in 2006 was dominated by positive effects, including capitalisation of the corporation tax credit balance of EUR 0.6 million from previous years, and therefore ultimately only remained on a par with the previous year at EUR 4.9 (EUR 4.8) million despite the higher earnings. This corresponds to an effective tax rate (ratio of income tax expense to profit before tax) of only 32.9 percent (previous year 38.7 percent).
technotrans' net income for the 2006 financial year reached almost EUR10.0 (7.5) million. This represents a 32.7 percent increase and is above the original targets (EUR 8.5 to 9 million) for the year as a whole. The net rate of return, representing net profit as a ratio of revenue, amounted to 6.6 percent, compared with 5.8 percent in the previous year. Basic earnings per share according to IFRS likewise improved, to EUR 1.48 (1.13). An increase in the dividend to EUR 0.70 per share (previous year EUR 0.55) will therefore be proposed to the Shareholders' Meeting on May 11, 2007.
At the reporting date of December 31, 2006 the group employed a total of 752 persons, 58 or 8.4 percent more than at the corresponding point of the previous year (694).
The segments
The Technology segment boosted its revenue for the financial year from EUR 99.9 to EUR 115.7 million, a rise of 15.9 percent. This segment consequently generated 76.5 percent of total revenue. As well as the positive mood within the industry, technotrans benefited from the rising sales volumes of new product lines that have only recently made their market debut. These include filtration systems for a wide range of applications.
The result for the Technology segment (EBIT) showed a rise of 28.2 percent at year-end, to EUR10.2 (8.0) million. The rate of return for the segment, representing the result for the segment in proportion to revenue for the segment, reached 8.8 percent (previous year 8.0 percent). Despite the one-off effects, profitability improved thanks to volume growth and efficiency gains.
The Services segment increased its revenues by 18.8 percent in 2006 to EUR 35.5 (29.9) million, thus growing faster than in previous years. This progress stems on the one hand from the steady rise in the number of devices and systems in the market, and on the other hand from the ongoing expansion of the international network.
While the rate of return for the segment was initially diminished by the expansion of service structures, it recovered in the course of the year. The result for the Services segment thus rose to EUR 5.0 (4.8) million, a gain of 4.0 percent. The overall margin reached 14.0 percent (previous year 15.9 percent) and offers further potential for improvement.
An overall cash flow from operating activities of EUR 12.3 (14.8) million was realised in 2006, down 17.1 percent on the previous year. Compared with the rise in revenue of 16.6 percent, the current assets changed only minimally in the year under review, diminishing cash flow by EUR 1.9 million. The prepayments received were moreover around EUR 2.9 million lower compared with the previous year. Cash at the end of the period amounted to EUR 15.0 (12.8) million, representing a rise of EUR 2.3 million or 17.8 percent compared with the previous year.
Outlook
Experts anticipate that the global economy will continue to expand in the 2007 financial year. This, combined with the well-filled order books of major printing press manufacturers at the start of the new year, points to a favourable environment for technotrans, with business not expected to slacken off at least in the first half of the year. "Mirroring the progress of our customers, we in fact believe that the whole of 2007 is likely to be a good year for the printing industry," declared Heinz Harling, technotrans AG Chairman of the Board of Management. As many printing press manufacturers already equip their presses with technotrans devices and systems ex works, the number of printing presses built and the number of printing units are in direct relation to technotrans' core business.
In addition, the company has tapped vital potential for growth in the short and medium term by entering the market for cleaning systems. "The acquisition of rotoclean now gives us control over an outstanding technology that will represent a major advance for us in gaining wider access to this market," explained Harling. On the other hand, the company has decided to terminate the sales partnership with IST Metz GmbH, for which technotrans had acted as exclusive distribution partner for UV dryers on the North American market for several years, The move means that technotrans will be forgoing trade revenue in the high single-digit millions from 2007, though this will have a positive impact on profitability because the margins for this business were unsatisfactory. "We of course remain fundamentally interested in the product area of dryers," stressed Harling.
Finance Director Dirk Engel added: "Taking into account the combined effect of the factors described, we currently expect revenue for the 2007 financial year to rise to EUR 160 to EUR 165 million, with net income for the year reaching EUR 10.5 to EUR 11 million.“ As 2008 will see the next drupa – the world's largest trade exhibition for the graphic arts industry – the Board of Management is also confident about the following year. Engel continued: "While not allowing ourselves to be carried away by optimism, we will ensure that technotrans benefits to an above average degree from the positive environment, in terms of both revenue growth and a permanent boost to earnings.Key Data 01-12/2006 Dates: Publication of the figures for the first quarter of 2007 is scheduled for May 8, 2007. Securities: technotrans AG - ISIN DE0007449001 - German Securities Identification No. WKN 744 900 Download the complete Press Release.
