Interim Report 1st six months 2004 GILDEMEISTER records 15% increase in orders
Bielefeld. World-wide demand for machine tools has continued to rise. This is reflected in the course of business at GILDEMEISTER, which developed vigorously. The pick-up in business noted during the first quarter continued over the second quarter of 2004. By the end of the first six months of 2004, sales revenues rose to Euro 490.5 million, thereby exceeding the comparable value for the previous year by 4%. GILDEMEISTER showed a noticeable increase (+15%) in its order intake; by the middle of the year it had increased to Euro 542.4 million. The company's profitability continued to improve. EBITDA reached Euro 31.9 million (previous year: Euro 28.0 million). EBIT rose by 55% to Euro 17.0 million (previous year: Euro 11.0 million) and, at Euro 5.0 million (previous year: Euro -1.5 million) EBT also showed a profit. As of 30 June, the group recorded another annual net profit after tax of Euro 0.7 million (previous year: Euro -5.1 million).
GILDEMEISTER expects this revival to continue over the second half of the year. Fresh stimulus is particularly expected from our newly developed machines and the industry's four major autumn trade fairs. We are now planning for a 7% increase in order intake for the reporting year. Based on the considerable increase in the order backlog and the expected new orders, we are now aiming for an increase in sales revenues of more than 5%. To further reinforce our earning power, our efficiency increase and cost-cutting measures already initiated will be continued. For the financial year 2004 we continue to aim for a considerable improvement in the result (EBT) and a profit for the year. We continue to work towards the distribution of another dividend. However, at this point in time, we consider a more detailed statement on the matter to be premature.
In the second quarter, sales revenues amounting to Euro 267.8 million (+20%) exceeded the figures for the first three months (Euro 222.7 million) as planned. In the first six months sales revenues reached Euro 490.5 million; this is a 4% increase against the corresponding period of the previous year (Euro 470.8 million). Domestic sales revenues increased by 2% to Euro 237.6 million. International sales revenues rose by 6% to Euro 252.9 million. The export share was 52% (previous year period: 51%).
In the second quarter, the order intake amounting to Euro 301.4 million was 25% above the first quarter. In all, the order intake totalled Euro 542.4 million in the first six months. It thereby exceeded the preceding year's benchmark figure by 15% or Euro 70.7 million. Domestic orders reached Euro 247.4 million (+14%). International orders amounted to Euro 295.0 million (+16%). The export share remained unchanged at 54%.
On 30 June 2004, the order backlog amounted to Euro 311.3 million.
Performance development went according to plan during the second quarter and improved considerably compared to both the first quarter and the benchmark figures of the previous year. By the end of the first six months EBITDA had reached Euro 31.9 million (previous year: Euro 28.0 million) and EBIT Euro 17.0 million (previous year: Euro 11.0 million). At Euro 5.0 million EBT has improved noticeably since the previous year (Euro -1.5 million). As of 30 June, the group recorded another annual net profit after tax of Euro 0.7 million (previous year: Euro -5.1 million).
In the second quarter GILDEMEISTER increased its share capital to strengthen the financial basis. Following the issuing of 14,423,076 new individual share certificates the number of shares rose to 43,302,503 and the company's share capital from Euro 75,086,510.20 to Euro 112,586,507.80. Subscription rights were exercised to 99% by existing and new GILDEMEISTER shareholders. In addition, GILDEMEISTER almost concluded the preparatory measures to further improve the company's financial structure by issuing a long-term corporate bond with a volume of Euro 175 million, and renewing a syndicated loan to the value of Euro 141 million until June 2007. In July the corporate bond was successfully placed and the syndicated loan renewed. The proceeds of the corporate bond will be used to refinance the majority of the company’s short term financing.
Following the publication of the increase in capital, the GILDEMEISTER share was traded at Euro 5.83 Euro (12 May 2004). On 2 June 2004 the trading of the subscription rights began, and the share was quoted ex-rights at Euro 5.39. Following the conclusion of the capital increase, our security recovered quickly; by the end of the second quarter, its market price had risen by 10% to Euro 5.93 (30 June 2004). The share is currently quoted at Euro 6.33 (4 August 2004).
On 30 June 2004, the company had 5,076 employees, 175 of whom were trainees (30 June 2003: 5,070). The number of staff is therefore at the preceding year's level. The personnel costs amounted to Euro 139.7 million compared to Euro 136.4 in the corresponding period of the previous year.
Forecast 2004: GILDEMEISTER expects the revival to continue over the second half of the year. With its innovative products and word-wide sales and service organisations, the company intends to utilise the opportunities emerging through the international recovery of the market. Our planning is based on a customer-orientated product development, the further optimisation of our market presence, intensified marketing measures as well as a steady consumption in machine tools in Asia, noticeable upward trends in America and initial signs of market recovery in both Europe and the domestic market.
As regards the order intake, we expect the recovery of demand to continue throughout the year. Due to the customers' wait-and-see attitude in the run-up to the major autumn trade fairs we expect a more moderate order intake for the third quarter at about the same level of the first quarter. With an increased number of project enquiries and a revival in demand, we expect a noticeable increase in orders in the fourth quarter. From today's perspective we expect an increase in order intake of more than 7% for the entire financial year.
As regards sales revenues we expect a considerable increase in the third quarter compared to the preceding year's third quarter, despite the holiday season at our German suppliers. In line with industry trends, we anticipate higher figures for the fourth quarter. Based on the increase in the order backlog and the new orders expected in the current financial year, we are now planning for an increase in sales revenues of more than 5% in the reporting year.
Due to the anticipated higher sales revenues and based on our measures initiated for the further strengthening of our earning power, our plans for a considerable improvement in performance (EBT) and for an annual net profit in the financial year 2004 remain unchanged.
The Executive Board
Please note: The complete Interim Report for the first six months of 2004 can be obtained on request.
Disclaimer, Forward-looking statement
Statements relating to the future:
This press release contains forward-looking statements, which are based on current estimates of the management of future developments. Such statements are based on the management's current expectations and specific assumptions. They are subject to risks, uncertainties and other factors, which could lead to the actual future circumstances, including the assets, liabilities, financial position and profit or loss of GILDEMEISTER, differing materially from or being more negative than those expressly or implicitly assumed or described in these statements. The business activities of GILDEMEISTER are subject to a series of risks and uncertainties, which may result in forward-looking statements, estimates or forecasts becoming inaccurate. Should one of these factors of uncertainty or other unforeseeable event occur, or should the assumptions on which these statements are based prove incorrect, the actual results may differ materially from the results stated, expected, anticipated, intended, planned, aimed at, estimated or projected in these statements. Forward-looking statements must not be understood as a guarantee or assurance of the future developments or events contained therein.