Tognum AG / Forecast/Final Results
03.04.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Tognum confirms forecasts for 2008 notwithstanding global financial and
economic environment
Strong and profitable growth in 2007
Further reduction in net debt
Ongoing high level of investment
Strong workforce growth
Positive outlook and forecast for 2008
Friedrichshafen/Germany, 3 April 2008.
Tognum AG today presents its first annual financial statements since last
years initial public offering and in the companys history
(http://investors.tognum.com --> Reports). Initial key figures for the 2007
financial year were already published on 28 February; the complete and
detailed results are available as of today.
Order intake exceeds 3 billion for the first time
In 2007, the company recorded order intake of 3,107 million, which is 12%
higher than in 2006 (pro forma 2006: 2,781 million). The high level of
order intake led to a book-to-bill ratio (order intake to revenue) of 1.1,
implying that a positive future revenue trend can be expected.
Further strong increase in revenue
During the year 2007, the production capacities of manufacturers of
off-highway products were almost fully utilized. Tognum substantially
increased its production capacities as a result of expansionary investment
as well as by means of overtime and Sunday shifts, and was thus able to
participate overproportionally in the market growth. While the market
expanded by a high single-digit percentage, Tognums total revenue
increased in line with order intake in 2007 by 11.8% to 2,835 million (pro
forma 2006: 2,535 million).
Revenue generated in the domestic market accounted for 21% of the total.
The export ratio was therefore 79%. Last year, Tognum increased its sales
in particular in Europe, the Groups biggest market. But sales achieved in
North America also increased significantly. As planned, Tognum continued to
strengthen its position as one of the worlds leading suppliers of diesel
engines, complete propulsion systems for off-highway applications and
onsite energy systems.
Substantial increase in earnings before interest and taxes (EBIT)
Tognum achieved an adjusted EBIT* of 390 million in 2007 (pro forma 2006
adjusted: 309 million). This positive increase in adjusted EBIT resulted
primarily from higher volumes and a high-margin revenue structure
reflecting, among other things, the positive effects of high deliveries of
large engines and an increased proportion of after-sales business.
Continuing efforts to improve efficiency and reduce costs were also
partially responsible for the current earnings trend. Together, these
factors led to a corresponding improvement in the return on sales to 13.8%,
which is 1.6 percentage points above the prior year.
Significant reduction in net debt
Compared with the end of 2006, net debt (interest-bearing debt less cash
and cash equivalents) was reduced significantly by 334 million to 294
million. This was due in particular to cash inflows from the initial public
offering of 264 million and the positive free cash flow of 52 million. As
a result of the IPO, Tognum was able to redeem consortium financing of more
than 1.2 billion and replace it ahead of time with new long-term credit
facilities of 450 million and $260 million. The new facilities, which were
granted without any collateral, have a term of at least five years.
Sharp increase in net profit
The Groups profit for the year after taxes amounted to 212 million (pro
forma 2006: 27 million). The application of an adjusted effective tax rate
of 40% resulted in an adjusted net profit (profit after taxes) of 199
million, compared with an adjusted pro forma net profit for the year 2006
of 138 million. The adjusted earnings per share** for the year 2007 thus
amounted to 1.58 (pro forma 2006: 1.15).
Substantial increase in equity
Equity increased by 471 million compared with the end of 2006 to reach
535 million as of December 31, 2007. This increase reflects above all the
cash inflow from the IPO and the good profit for the period. The equity
ratio was 23% at the end of 2007 (2006: 3%).
Ongoing high investment
Investment in property, plant and equipment and intangible assets totaled
140 million and led, in relation to revenue, to a gross investment ratio
of 5%. Property, plant and equipment were the main area of investment,
accounting for 100 million of the total. The main focus was on the ongoing
modernization and expansion of our production capacities, not least with
the objective of further improving our competitiveness.
Expanded workforce
The workforce of the Tognum Group (consolidated companies) expanded to a
total of 8,179 employees at the end of 2007. This represents an increase of
1,027 employees during the year under review. The main area of recruitment
was engineers (plus 133), mainly in development and sales. Most of the
workforce growth was in Germany (plus 594) and the United States (plus
413), the latter especially due to the acquisition of Katolight Corp., a
manufacturer of power-generator sets in Minnesota.
At the end of the year 2007, Tognum employed 424 apprentices and trainees.
MTU Friedrichshafen GmbH alone recruited 100 apprentices in the reporting
period, the highest number in one year for two decades.
Segment reporting
Segment mtu Engines
The mtu Engines segment recorded order intake of 2,684 million in 2007,
representing an increase of 10% compared with 2006 (pro forma 2006: 2,440
million). The main drivers of the ongoing positive development of the
segments order intake were the application areas of Marine and Defense,
but growth was also achieved in the areas of Industrial and After Sales.
Power Generation was the only application area to record a decrease
compared with the prior year; however, order intake in 2006 was boosted by
a very large one-off order.
The mtu Engines segment generated revenue of 2,416 million in 2007, thus
surpassing the level of 2,195 million achieved in 2006 by approximately
10%. Tognums strategy of a broad-based business orientation once again
proved to be effective. Lower sales in the area of Power Generation were
more than offset by growth in other application areas.
The mtu Engines segments adjusted earnings before interest and taxes
(EBIT) of 373 million for the year 2007 were 28% higher than in 2006 (pro
forma 2006: 292 million). This positive earnings trend was partially due
to the higher revenue volume, but above all also to the increase in the
high-margin applications of Marine, Defense and After Sales. In addition,
the efforts made to improve efficiency and reduce costs also had positive
effects. The recent development of the US dollar exchange rate had an
adverse impact.
Segment Tognum Onsite Energy Systems & Components
The Tognum Onsite Energy Systems & Components (OES&C) segment increased its
order intake by 29% to 539 million in 2007 (pro forma 2006: 418 million).
The segment profited significantly from the acquisition of Katolight Corp.
This company, whose power-generation systems based on diesel and gas
engines are allocated to the Onsite Energy Systems application area,
contributed 111 million to the segments total revenue.
The revenue of the OES&C segment amounted to 527 million in 2007. This
represents an increase of 36% compared with the pro forma figure for 2006
of 388 million. The 2007 figure includes revenue of 88 million from the
newly acquired Katolight Corp. Without Katolight, revenue growth would have
been approximately 13%. The organic growth was primarily achieved through
higher sales of injection systems by the subsidiary LOrange and of
power-generation systems based on gas engines by the subsidiary MDE.
The OES&C segment achieved earnings before interest and taxes (EBIT) of 31
million in 2007 (pro forma 2006: 21 million).
Outlook and forecast confirmed
The Tognum Group is confident that its above-average growth of recent years
will continue in the medium and long term in most of its sectors and
markets.
Current sector and market developments
In the off-highway markets for high-speed diesel engines that are relevant
for Tognum and in its markets for energy systems, after the first two
months of the year, the Group anticipates ongoing growth for almost all
applications and sales regions in full-year 2008. On the assumption that
todays forecasts for economic and exchange-rate developments are accurate,
Tognum expects annual growth (on a euro basis) of 6.5-7.0% for the relevant
diesel-engine market and of 8.0-9.0% for the relevant market for energy
systems. On the basis of banks projections, Tognum now anticipates an
average exchange rate of $1.45 per Euro in 2008.
Tognum
As in the years 2006 and 2007, the Group aims to exceed the growth rates
forecasted for its markets in 2008. Based on the general conditions
described above and on the actual figures for 2007, Tognum continues to
expect revenue growth of 12% in 2008 (+/-1%). Despite the substantial
expenditure and efforts that the anticipated expansion will require in the
medium term, provided that economic and financial conditions do not change
significantly, the Group continues to forecast that it will achieve an
adjusted return on sales of 14% in 2008 (+/-1%). For the year 2008, Tognum
aims, as before, to achieve earnings per share of more than 2.00 and plans
to make another dividend payout of at least 30% of net profit.
* The adjustments are due in particular to the acquisition by Tognum of
DaimlerChryslers off-highway activities in the first half of 2006 and the
related purchase price allocation (in accordance with IFRS), and are also
due to other acquisition-related expenses. There were also effects from
currency translation, primarily from the translation on the balance sheet
date of liabilities to banks denominated in US dollars, and gains on the
sale of assets no longer required for operating activities. Profit in the
year 2007 was also negatively affected by transaction costs that were not
directly charged to equity and by one-time advisory services before the
decision on the initial public offering. The unadjusted EBIT for the year
2007 also included an impairment loss of 10 million recognized on Tognums
strategic minority shareholding in Fuel Cell Energy Inc., a listed company
active in the field of fuel-cell technology.
** Earnings per share are determined on the basis of the weighted average
number of shares (120,025,000 in 2006 and 125,902,123 in 2007)
Disclaimer regarding forward-looking statements et al.:
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This release also contains forward-looking statements based on assumptions
and estimates of Tognums Executive Board of Management. Although we assume
that our assumptions and estimates on which we have based these
forward-looking statements are realistic, we cannot guarantee that they
will in the future prove to be correct. The assumptions and estimates, by
their nature, may harbour risks and uncertainties that may cause the actual
figures to differ considerably from the forward-looking statements. Factors
that may cause such discrepancies include, among other things, changes in
the economic and business environment, variations in exchange and interest
rates, the introduction of competing products, lack of acceptance for new
products or services and changes in corporate strategy. Tognum does not
undertake any obligation to update, to review or to confirm the
forward-looking statements or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the
date of this announcement.
Investors & Analysts contact:
Achim Schneider
ir@tognum.com
+49 (0)7541-90 3318
Media contact:
Stefan Wortmann
stefan.wortmann@tognum.com
+49 (0)7541-90 4350
DGAP 03.04.2008
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Language: English
Issuer: Tognum AG
Maybachplatz 1
88045 Friedrichshafen
Deutschland
Phone: +49 (0)7541 90 3318
Fax: +49 (0)7541 90 90 3318
E-mail: ir@tognum.com
Internet: http://www.tognum.de
ISIN: DE000A0N4P43
WKN: A0N4P4
Indices: MDAX, CDAX, Classic All Share, Prime All Share
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart
End of News DGAP News-Service
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DGAP-News: Tognum releases full FY07 financials and confirms forecasts for 2008
| Source: EQS Group AG