Troax Group: Year-end Report 2018
Hillerstorp 13th of February 2019, 12.30 CET
OCTOBER – DECEMBER
- Order intake increased by 9 per cent to 41,7 (38,4) MEUR. Adjusted for currency the increase was 9 per cent.
- Sales increased by 6 per cent to 43,5 (41,0) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 8 per cent.
- Operating profit increased to 10,1 (8,3) MEUR.
- Operating margin increased to 23,2 (20,2) per cent.
- Financial net was -0,1 (-0,3) MEUR.
- Profit after tax increased to 7,9 (4,1) MEUR.
- Earnings per share after dilution increased to 0,39 (0,21) EUR.
JANUARY - DECEMBER
- Order intake increased by 9 per cent to 165,0 (152,0) MEUR. Adjusted for currency the increase was 11 per cent.
- Sales increased by 6 per cent to 161,0 (152,1) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 8 per cent.
- Operating profit increased to 32,8 (30,6) MEUR.
- Operating margin increased to 20,4 (20,1) per cent.
- Financial net was -0,8 (-5,2) MEUR of which -2,3 MEUR is related to a one-time cost related to the redemption of the bond.
- Profit after tax increased to 24,4 (17,0) MEUR.
- Earnings per share after dilution increased to 1,22 (0,85) EUR.
- The board suggest a dividend of 5,00 (4,25) SEK (Swedish Krona) per share.
CEO COMMENTS
The Group’s development has been positive also during the fourth quarter. The fourth quarter orders showed an organic growth of around 9 per cent excluding currency impact. During the fourth quarter we have again received several important orders from customers within automation, warehouse and property, and have also during this quarter, similar to the past quarter, experienced lower activity within the automotive sector. In terms of order intake, this can mostly be seen in the North American operations which during the fourth quarter had significantly lower orders from automotive. Reduced activity in the automotive sector during the recent years has resulted in this area now accounting for only 10-12 per cent of our sales. Despite this fact we have still managed rather good growth. We have especially received important orders in our operation in the UK which shows strong growth figures for the quarter.
We have continued to devote a great deal of time and effort to the integration and improvement of our Folding Guard entity in Chicago. We can conclude that it takes longer time than expected to change culture and attitude to customer requirements, but the changes are now starting to come and we can concentrate more on increasing the efforts in marketing and sales. The market conditions in the US have during the fourth quarter been good and we can find a good development for the Troax brand. Steel prices have been stable during the quarter.
Our assessment for this quarter is that the market has grown approximately as expected. The indication is still that the order books of our customers are well filled and their investment in our solutions is high but that the market growth now has levelled out on a continued high level. The development for the Group has been positive in most markets and our assessment is that we are continuing to take market share on many regions. The orderbook at the end of the quarter is on a satisfying level and to some extent higher than what we usually have at the end of a year.
During the fourth quarter of 2018, production of Troax products commenced in our Chicago factory. This results in shorter lead times and better service levels to US customers This also results in an improved environmental performance as our emissions of CO2 are reduced by this change. We have also invested in a completely new production line for panel manufacturing in the Group’s main unit in Hillerstorp. This plant is now operating in test mode and is expected to reach full production speed during the first half of 2019.
Sales increased in the quarter by 6 per cent compared with the same period last year (including currency the increase is 8 per cent). The progress has been positive especially in the continental Europe, UK and New markets.
With this volume increase, the result for the quarter is better than last year. We have a continued good apacity utilisation in our facilities in Hillerstorp, Sweden and Calco, Italy. The operating result for the quarter was 10,1 (8,3) MEUR, which corresponds to a profit margin of 23,2 per cent to be compared with 20,2 per cent last year. The consolidation of Folding Guard still decreases the margin in percentage terms. We do however see clear possibilities to increase the margin also for Folding Guard long term. The Net result amounts to 7,9 MEUR for the quarter compared to 4,1 MEUR last year. The increase is mainly due to the higher EBIT and a lower tax expense. Earnings per diluted share for the fourth quarter is 0,39 EUR to be compared with 0,21 EUR in the same quarter of 2017.
Working Capital is on an expected level where accounts receivables have increased somewhat due to the increase in sales whereas inventory is on a continued desired level. Cash flow from operations is higher than the same period last year. The investments was 2,7 MEUR for the quarter and 8,9 MEUR for the full year.The key figure of our net debt in comparison with the 12-month rolling EBITDA is now 1,3 which clearly is below our target for the Group. As a result of the good sales development, the Group has decided to expand its machine capacity in our operations in Italy. This will happen during 2019-2020 and the size of the investment is approximately 4-5 MEUR.
Thomas Widstrand, President and CEO
PHONE CONFERENCE
Invitation to presentation of the fourth quarter result:
Thomas Widstrand, CEO presents the result on a phone conference on the 13th of February 2019 at 16:00 CET. The conference will be held in English. For more information, please refer to https://www.troax.com/en/news.
This information is information that Troax Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 12:30 CET on 13th of February 2019.
For additional information, please contact:
Thomas Widstrand
President and CEO
Troax Group AB
Box 89
335 04 Hillerstorp
Sweden
Tel 46 (0)370-82831
thomas.widstrand@troax.com
About Troax
Troax is the leading global supplier of indoor perimeter protection (“metal-based mesh panel solutions”) for the market segments: Machine guarding, Warehouse partitioning and Property Protection. Troax develops high quality and innovative safety solutions to protect people, property and processes.
Troax Group AB (publ), Reg. No. 556916-4030, has a global organisation with a strong sales force and efficient logistics setup, enabling local presence and short delivery times in 42 countries.
In 2018 Troax net sales amounted to 161 MEUR and the number of employees amounted to about 700 persons. The Company’s head office is located in Hillerstorp, Sweden.
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