EUR million HY1 2012 % HY1 2011 HY1 2010
Revenue 465.1 + 12.3 % 414.3 297.4
EBITDA 52.2 + 4.0 % 50.1 24.9
EBIT 37.2 + 3.3 % 36.0 14.5
EBIT margin 8.0 % – 8.7 % 4.9 %
In the first half of 2012, despite the prevailing difficult economic situation, especially in Europe, the PALFINGER Group managed to continue its positive performance of previous quarters. Year on year, the Group continued to record a two-digit growth rate in revenue. This was based, on the one hand, on stable demand primarily in the core markets; on the other hand, the growth achieved in the areas North America, South America and CIS and in the globally operating business unit Marine Systems was a major contributor to this positive development. Earnings also increased slightly compared to the already satisfactory level achieved in the previous year.
Herbert Ortner, CEO of PALFINGER AG, sums up the position held by the Group as follows: “We have perceived an increasingly cautious mood in Europe, and the uncertainty of the markets has had a noticeable effect on demand. In the present situation, PALFINGER benefits in particular from its long-standing strategy of internationalization. In the growth markets of Brazil, Russia and India, we have been well-positioned for quite some time now. In the first half of 2012, we achieved this milestone for China as well. We have entered into a partnership with the Chinese Sany Group that is going to open this promising market for us.”
The revenue generated in the first half of 2012 reached another record figure, namely EUR 465.1 million, which is 12.3 per cent above the revenue of EUR 414.3 million reported for the first half of 2011. In the first six months of 2012, EBIT came to EUR 37.2 million; after EUR 36.0 million in the first half of 2011, this corresponds to an increase of 3.3 per cent. In the second quarter of 2012, both revenue and EBIT were above the levels recorded in the first quarter (revenue Q1: EUR 223.9 million; Q2: EUR 241.2 million; EBIT Q1: EUR 17.7 million; Q2: EUR 19.5 million).
The increasingly challenging situation on the European markets was more than compensated by the excellent growth in earnings achieved in the AREA UNITS segment. In the first half of 2012 the EBIT margin was kept at a stable level of 8.0 per cent as compared to the previous quarters, despite the necessity of stepping up resources in connection with the growth achieved in the areas outside Europe. At EUR 23.9 million, the consolidated net result for the period under review was higher than the EUR 22.6 million recorded in the first half of 2011.
All in all, business development in Europe in the first half of 2012 was a little weaker than in the previous year, but the individual countries showed a mixed picture. While Germany and France, the countries accounting for the largest revenue contributions, still recorded growth, Spain, Portugal, Greece and Italy remained at extremely low levels.
The development of demand in North America, South America and CIS has been positive for several quarters now, which is highly satisfactory. In comparison with the first half of 2011, revenue generated by the AREA UNITS segment thus rose by 55.1 per cent to EUR 149.0 million, which means that areas outside Europe now account for 32.0 per cent of consolidated revenue. Consequently, PALFINGER has also recorded a positive EBIT in the segment of the areas that are still being developed.
Business performance in Asia remained below expectations in the period under review. However, PALFINGER managed to score a huge success for the future. With the signing of joint venture agreements with Sany Heavy Industry, the foundation was laid for additional growth in these markets.
The strategic projects launched in recent years were continued in the period under review, with the aim of facilitating the implementation of further investment projects in support of the planned growth. The Group’s strategy will also continue to focus on internationalization, in order to obtain long-term balanced diversification in geographical terms.
Financial position, cash flows and result of operations
At 45.2 per cent, the equity ratio was still at a high level at the end of the first half of 2012 and slightly above the figure reported in the first quarter of 2012. The gearing ratio sank from 56.6 per cent to 53.9 per cent compared to the first quarter.
The average net working capital and the capital employed increased compared to 31 March 2012. This was, among other things, related to the stepping up of inventories that became necessary in the areas boasting positive development and in the growing business unit Marine Systems, which also caused cash flows from operating activities to decrease from EUR 15.1 million in the first half of 2011 to EUR 11.8 million. As a consequence of the investments made, free cash flows were negative in the reporting period, namely –EUR 8.1 million.
In the first half of 2012, the expansion of the debt crisis in Europe had a weakening effect on the real economy in some of the European markets that are of importance to PALFINGER. The Group’s global orientation was one of the factors that enabled PALFINGER to record further growth nevertheless.
The two joint ventures with Sany Heavy Industry, one of China’s industrial giants, will probably start operations before the end of the third quarter of 2012, after the approval of the competent authorities has been obtained. The foundation for a successful entry into the Chinese market has thus been laid in time to celebrate the 80th anniversary of the PALFINGER Group in 2012, and it is assumed that the Group’s leading position worldwide has been sustainably safeguarded through this step.
Despite the uncertain development of the economy and of demand, particularly in Europe, the management expects a moderate increase in revenue, coming from the areas outside Europe, for the 2012 financial year. In addition, it is estimated that the areas outside Europe will make even more substantial contributions to earnings.
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