March 28, 2017

Press release

Group results 2016

  • Revenues up slightly at € 870.8 million thanks to growth in Europe and US 
  • EBIT impacted by political instability and extraordinary effects 
  • Dividend of € 1.2 per share takes account of investments for the future 
  • Lower capacity utilization at beginning of 2017 for project-related reasons
  • Management anticipates revenues and earnings in 2017 similar to 2016
Revenuesin € million865.4870.8
EBITin € million50.647.0
Net profit for the periodin € million36.834.6
Cash flow from operating activitiesin € million6.583.4
Equity in % of total assets37.0%37.2%
Earnings per share3.33.5
Dividend (Proposal to AGM)€/share1.51.2
Employees as of December 313,0863,375
Order backlog as of December 31in € million797.5739.7

Like the global economy, the world firefighting industry saw little growth momentum in 2016. There was a significant decline in procurement volumes in countries with a strong dependence on the price of oil in 2016, as this decline now also impacted government fire department budgets. However, the development of the markets in Southeast Asia and the D-A-CH-region (Germany, Austria and Switzerland) was stable, with demand declining slightly in North America. 

Revenue and income situation
The Rosenbauer Group closed 2016 with break-even revenues and earnings down only slightly despite substantial market slumps in the MENA region. The key pillars of its sustainable development are its systematic international orientation and the Group’s innovation.

The Rosenbauer Group’s revenues amounted to € 870.8 million in the 2016 financial year (2015: € 865.4 million) and remained satisfactory in spite of the downturn in demand on major markets due to political unrest and the low price of oil. The regional declines in revenues were compensated by a further expansion of business on the developed markets, such as North America and Europe, and in the equipment sector.

EBIT for the 2016 financial year was below the previous year’s level at € 47.0 million (2015: € 50.6 million). The operating result was influenced mainly by the change in the product mix with lower volumes of specialty vehicles and the fierce competition in Europe. As a result of the increase in revenues, the German locations are benefiting from better coverage of fixed costs, though margin pressure has risen further due to the high competitive intensity. Area NOMA’s contribution to earnings has also been defined by declining export deliveries, which were partially offset by an increase in local single-vehicle business, though this involves more complex handling.

In addition, this result also includes extraordinary effects of around € 3.5 million relating to the start-up phase of the newly founded company Rosenbauer Rovereto, a provision for staff measures and an increase in expenses in connection with recent acquisitions.

Financial position, net assets and capital structure
For reasons specific to the industry, the structure of the statement of financial position as of the end of the year is characterized by high working capital. This results from the comparatively long turnaround times for firefighting vehicles, which are always custom-built. The financial situation of the Rosenbauer Group remains solid even in times of a difficult market situation. Total assets rose by 6% as against the previous year, mainly as a result of acquisitions, and amounted to € 650.6 million as of December 31, 2016 (2015: € 611.8 million).

Working capital amounted to € 189.6 million as of the end of the year (2015: € 178.3 million). The increase as of the end of the year is due predominantly to higher trade receivables in the Arab and Asian regions as the average figure for dayssales outstanding was higher, and the delivery volume was at a very high level as of the end of the year. Cash was up from € 17.9 million to € 30.2 million as of the end of the year due to incoming payments.

Inventories increased to € 199.1 million as of the end of the year (2015: € 190.2 million). Construction contracts were down by 22% on the previous year at € 67.7 million (2015: € 87.3 million) on account of the lower capacity utilization in the first quarter of 2017. Current interest-bearing liabilities fell from € 135.2 million to € 102.4 million as a result of the changed financing structure.

In the past financial year, equity rose again by 7% to € 242.0 million (2015: € 226.6 million). Despite the acquisitions and the resulting increase in total assets, the equity ratio amounted to 37.2% (2015: 37.0%) and was therefore up on the long-term goal of more than 35%. The Group’s net debt improved to € 171.3 million in the past year on account of trade working capital (2015: € 191.3 million). The gearing ratio decreased to 70.8% (2015: 84.4%).

The net cash flow from operating activities improved to € 83.4 million in the past year (2015: € 6.5 million). This positive development is due to higher advance payments received, the decline in construction contracts and the lower rise in receivables as against the previous year.

Considering the negative effects in the future in view of growing political instability on the international markets and investments in pioneering firefighting vehicles the Executive Board and Supervisory Board will propose a dividend of € 1.2 (2015: €1.5) per share at the Annual General Meeting. Accordingly, the distribution volume for 6.8 million no-par-value shares will be € 8.2 million (2015: € 10.2 million). Based on the closing price of € 54.2, this corresponds to a dividend yield of 2.2% (2015: 2.3%).

A similar development to 2016 is expected on the global firefighting markets in 2017. Above all demand is currently being driven by countries with continuous procurement or elevated security requirements following natural or terrorist disasters.

The markets of Western Europe should grow slightly again in 2017, while the largest single market, Germany, will continue its positive development. There are no signs of change at this time in Southern and Eastern Europe – demand is still low and the financing of firefighting technology is difficult even though procurement requirements are rising.

The market in North America recovered in the first months of the current year and an increase in the procurement volume is expected again in 2017. How strong this proves to be or whether the trend is reversed will depend on whether the announced stimulation of the US economy will be successful and will also benefit fire departments. On the other hand, there is little prospect of an improvement in the market situation in the countries with a strong dependence on the price of oil, as the low price is still affecting government budgets.

Rosenbauer is the leading manufacturer for the international firefighting industry with annual revenues of € 870.8 million. In order to secure and expand this market position, the company is constantly working to be more agile and more efficient in a dynamic environment. Fresh growth was ensured in 2016 primarily by new product launches.

Above all, the new HEROS-titan helmet is being well received by fire departments and more than several thousand units have already been sold. New equipment sector products will stimulate growth in 2017 as well, in particular the new HEROS-titan Pro, the only European fire service helmet to be certified for NFPA markets.

Additional international sales stimulus is also expected from the new ET series. It has been honed for efficiency in all aspects and can therefore be offered at market-specific prices. And the launch of the new top PANTHER 8x8 model this year is also set to generate new business, especially as the vehicle will once again set the benchmark for technology and de sign in the airport segment.

The uncertainty regarding the development of the firefighting markets has increased tangibly in recent months. Geopolitical tension and the low price of oil could affect growth on certain markets in 2017 as well. Overall, however, stable development in global demand for firefighting technology is assumed.

With a strong market presence, geographically balanced business, its broad portfolio, technology leadership and financial strength, Rosenbauer is well placed to take advantage of these opportunities for profitable, long-term growth. In order for the targeted growth to take place on a sound financial basis, there is a continued focus on increasing efficiency and reducing costs. Despite the lower capacity utilization at the beginning of the year for project-related reasons and the continuing pressure on margins in developed markets, as well as the factors above, the management anticipates to keep revenues and earnings at the previous year’s level.

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