DGAP-News: Funkwerk sets course back to growth
(firmenpresse) - Funkwerk AG / Final Results
31.03.2010 07:30
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Funkwerk sets course back to growth
- After restructuring, prospects of growth in sales and return to
positive earnings in 2010
- Endurance test in 2009 used to consolidate and improve competitive
position
- Decline in sales and necessary adjustments result in first loss since
IPO in 2000
- Net cash exceeds EUR20m through stringent working capital management
and positive cash flow
Kölleda, 31. März 2010. Funkwerk AG (ISIN DE0005753149) has set course back
to growth in 2010 aiming for a positive group result. 'By implementing our
'Fit for Future' restructuring programme, we have managed to improve the
competitive position of all our segments. This and the resulting cost
reductions set the stage for a successful turnaround in the current year.
We already observe a more stable, indeed a slightly positive, trend in
demand. In consideration of the remaining detrimental effects of the
financial and economic crisis, we expect business in 2010 to grow in the
upper single-digitpercentage range,' the Executive Board explained on
presenting the financial statements at today's press conference in
Frankfurt.
Specialising in professional information and communication technology,
Funkwerk had reacted to the most serious crisis since World War II by
implementing extensive adjustment measures. The preceding financial year
thus proved an unusually serious endurance test for Funkwerk AG. Expected
export contracts failed to materialise, the crisis in the automobile
supplier industry including after-sales market persisted, and transport
companies as well as the industry wereslow to invest.
As already disclosed on 5 March 2010, sales at Funkwerk reduced by 25% to
EUR218.4m (2008: EUR290.2m). The trend significantly poorer than
anticipated, this resulted in negative earnings from operations (before
restructuring costs and one-off impairment of intangible assets) of
EUR-13.6m (2008: EUR+13.2m). The lion's share of this was due to losses in
an export project handled by company's the Security Communication segment.
Sustainable cost savings create basis for turnaround
The Executive Board made efforts to counteract this decline in orders and
revenues by launching a'Fit for Future' restructuring programme. In the
first phase of the programme, Funkwerk primarily closed unprofitable sites,
reduced its overheads and adjusted the personnel structure. These
restructuring costs produced an additional one-off charge against earnings
of around EUR9m in fiscal 2009. This, however, must be set opposite
sustainable cost reductions and an earnings effect estimated at over EUR10m
in 2010 and beyond.
The second phase of the programme was launched in the current financial
year and focuses on the 'optimisation of processes, productivity and
competitive edge'. 'This will involve more follow-up costs, specifically in
Security Communication. Below the line, however, these measures will
increasingly help turn around our business and earnings situation back to
profitability,' the Executive Board wrote in its report.
Positive cash flow and comfortable capital base
Due to the drop in sales along with adjustments in its product portfolio
and the discontinuation of unprofitable businessactivities, Funkwerk was
forced in 2009 to carry out impairment tests for such intangible assets as
goodwill and internally produced and capitalised assets. This resulted in
one-off impairment charges (writeoffs) at around EUR20m, which, however did
not affect the company's liquidity situation. On the whole, Funkwerk as a
group reported negative consolidated earnings before interest and taxes
(EBIT) of EUR-42.2m (2008: EUR+13.2m). The resulting group loss of
EUR-40.8m (2008: EUR+8.0m) is the first since the IPO of Funkwerk AG in
2000.
Despite the loss, Funkwerk managed through a stringent cost and spending
discipline and improved working capital management to generate a positive
cash flow from operations in 2009. In the fourth quarter alone, the company
saw an inflow of capital of over EUR15m. The cash flow from operations
throughout the year thus totalled EUR7.2m to leave cash and cash
equivalents at year-end of EUR22.1m. Net cash came to over EUR20m. 'This
provides us with a nice cushion to finance our operations and expected
growth all by ourselves,' the Executive Board confirmed. The capital base
of Funkwerk also proved rather comfortable even despite the net loss in
2009. At 53.1%, its equity ratio remained at an above-average level.
Emerging more competitive from the crisis
By implementing the 'Fit for Future' restructuring programme, the Executive
Board is convinced that Funkwerk has set the course in all its segments to
emerge from the crisis stronger and more competitive in the current
financial year. In addition, Funkwerk should benefit in all areas from the
recovering economy. Traffic&Control Communication (communication and
information systems for transport companies and manufacturers of transport
infrastructures), its largest segment with a share of around 50% in group
sales, should be able in 2010 to achieve growth despite increasingly fierce
competitive pressures in new tenders. Growth factors are expected to come
from the launch of the electronic interlocking system, Alister, new DMR
(Digital Mobile Radio) based mobile radio equipment-Standard, and efforts
made worldwide to modernise the railway system.
In its Security Communication segment (video monitoring, personal security
and property protection systems), Funkwerk also expects revenues to
increase at a moderate level in the current financial year. Its Automotive
Communication segment (communication solutions for vehicles, fleet
management and aircraft), on the other hand, was hit quite badly by the
worldwide slump in the automobile industry in 2009, with the result that
sales here are not expected to stabilise more than at a low rate. The
capacity adjustments as part of the restructuring, however, resulted in
sustainable cost savings which are expected to produce a turnaround in this
segment.
The Enterprise Communication segment (TC systems, devices and components
for private data networks and data security) was able to complete its
restructuring process to achieve a moderate increase in its overall
performance in 2009. Further positive effects of the reorientation are
currently visible, though the underlying conditions in this market segment
with intensified price competition remain difficult. The aim here,
therefore, is to ensure steady business in 2010 and push the result back
into the black.
The full annual report of Funkwerk AG is available on the Internet at
www.funkwerk.com and on the website of Deutsche Börse.
For further information contact
Funkwerk AG
Im Funkwerk 5
D-99625 Kölleda
Thüringen
Jörg Reichenbach
Investor Relations
Telefon: 0 36 35/6 00 -3 46
Fax: 036 35/6 00 -5 07
reichenbach(at)funkwerk.com
Sebastian Brunner
communications+consulting
Tel.:0175/5604673
fsbrunner(at)aol.com
31.03.2010 07:30 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
Language: English
Company: Funkwerk AG
Im Funkwerk 5
99625 Kölleda
Deutschland
Phone: +49 (0)3635 600 0
Fax: +49 (0)3635 600 507
E-mail: info(at)funkwerk.com
Internet: www.funkwerk.com
ISIN: DE0005753149
WKN: 575314
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehrin Berlin, Düsseldorf, München, Hamburg, Stuttgart
End of News DGAP News-Service
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