PALFINGER highly satisfied with results of first quarter of 2013

May 12, 2013 Warehousing Ireland Materials Handling 0

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• Revenue and EBIT slightly higher than in 2012
• All business units positive in Europe despite weak economy
• Growth outside Europe and in the Marine business area
• Moderate increase expected for the 2013 financial year;
  by 2017, PALFINGER plans to double its annual revenue to approx. 
  EUR 1.8 billion

In the first quarter of the 2013 financial year, the performance of the PALFINGER Group was highly pleasing, given the continuing difficult economic environment. The Group’s revenue was kept at the previous year’s level, and earnings increased slightly. “Actually we are more than satisfied, first of all because we have managed to continue PALFINGER’s growth, and secondly because this confirms the success of our strategy. Without our consistent internationalization outside Europe and without the new Marine business area, our business performance would not be this good,” comments Herbert Ortner, CEO of PALFINGER AG.

The revenue generated in the first quarter of 2013 came to EUR 225.8 million, which is slightly above the revenue of EUR 223.9 million reported for the first quarter of 2012. Whereas in Europe declines were recorded due to the difficult environment, the positive developments in North and South America as well as in Russia made it possible to maintain this high revenue level. In the Marine business area, the acquisition of Palfinger Dreggen, concluded at the end of 2012, contributed to the Group’s revenue growth.

In the first three months of 2013, PALFINGER generated EBIT of EUR 18.1 million. In comparison with the operating result recorded in the first quarter of 2012, EUR 17.7 million, this represents a 1.9 per cent increase, primarily facilitated by the regions outside Europe and the Marine business area. Thus, in comparison with 2012, the EBIT margin was slightly raised to 8.0 per cent. At EUR 11.0 million, the consolidated net result for the period under review was above the previous year’s level of EUR 10.7 million.

The restructuring of previously weak business units and the enhancement of flexibility in all areas made it possible for PALFINGER to record this increase in earnings despite the shift in revenue.

In Europe, the first quarter of 2013 saw a further decline in demand. North America’s development has been positive for two years in a row; in South America, the good level was maintained after the increases in previous quarters. Business performance in Asia showed an upward trend in the period under review. Moreover, the Chinese joint venture with Sany is going to have a positive effect on business.

In the period under review, PALFINGER consistently pursued its strategic projects. The Group will continue to concentrate on its internationalization efforts, and flexibility will be further enhanced, particularly in administration. Processes and products are increasingly being improved through innovations, as PALFINGER was able to demonstrate quite impressively at bauma, a major trade fair held in April.

In February 2013, PALFINGER’s Marine business area obtained two orders for offshore cranes totalling approx. EUR 90 million – an unprecedented magnitude for PALFINGER. This success is owed to Palfinger Dreggen, a company acquired in the fourth quarter of 2012.

In the same month, PALFINGER established a joint venture in Italy specializing in the development, production and distribution of access platforms. Palfinger Platforms Italy S.r.l. will expand the existing product portfolio of PALFINGER access platforms through the manufacture of reasonably priced truck bodies with easy-to-use technology. This step is expected to open up the high-volume market segment for trucks weighing up to 3.5 tonnes. The first platforms were already sold at the bauma trade fair.

Financial position, cash flows and result of operations
On 6 March 2013, the Annual General Meeting of PALFINGER AG resolved that a dividend of EUR 0.38 per share would be distributed for the 2012 financial year; this dividend was paid out on 12 March 2013.

As at quarter end, the equity ratio of the PALFINGER Group was 43.1 per cent, which is still at a high level. The main reasons for the year-on-year rise in net debt were the issue of a promissory note loan with a volume of EUR 77.5 million in October 2012 and the refinancing of maturing loans. As a consequence, the gearing ratio rose to 62.4 per cent on the reporting date from 56.6 per cent at 31 March 2012.

Net working capital increased primarily in connection with the necessity of building up inventories in the growth markets outside Europe and also as a result of the acquisitions made. The average capital employed rose by EUR 57.0 million to EUR 587.8 million. Targeted Group-wide capital employed management is being applied in order to achieve further optimization.

Cash flows from operating activities increased to EUR 18.0 million in the first quarter of 2013, up from EUR 7.5 million in the first three months of 2012. Free cash flows amounted to EUR 10.9 million in comparison with –EUR 5.5 million in the first quarter of 2012, highlighting PALFINGER’s financing power.

Outlook
The three strategic pillars of the PALFINGER Group – internationalization, innovation and flexibility – have gained importance in recent years in connection with the change in market conditions. They are still being pursued consistently in order to generate sustainable, profitable growth in the future as well. PALFINGER’s internationalization strategy will be intensified primarily in China, Brazil, Russia and in the Marine business area. The establishment of the joint venture in China is also expected to show first successes in the course of 2013.

The visibility of PALFINGER’s business and hence reliability of planning continue to be limited due to prevailing market uncertainty; however, trend monitoring still suggests ongoing positive development. As a consequence, the management expects a continued moderate increase in revenue, coming primarily from the business areas outside Europe and the Marine business area, for the 2013 financial year. In addition, it is estimated that these areas will make even more substantial contributions to earnings.

PALFINGER sees the potential of doubling annual revenue to approx. EUR 1.8 billion by 2017. The Company intends to reach this goal primarily by boosting the introduction of the entire product portfolio in the BRIC markets. The Marine business area harbours great potential as well. The management plans to reach this long-term revenue target through organic as well as inorganic growth.

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