TROAX GROUP: INTERIM REPORT JANUARY - JUNE 2018
Hillerstorp 15th of August 2018, 12:30 CET
APRIL - JUNE
- Order intake increased by 8 per cent to 42,9 (39,8) MEUR. Adjusted for currency the increase was 10 per cent.
- Sales increased by 4 per cent to 41,1 (39,6) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 5 per cent.
- Operating profit decreased to 7,7 (8,2) MEUR.
- Operating margin decreased to 18,7 (20,7) per cent.
- Financial net was -0,2 (-3,4) 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 5,6 (3,7) MEUR.
- Earnings per share increased to 0,28 (0,19) EUR.
JANUARY - JUNE
- Order intake increased by 6 per cent to 83,2 (78,3) MEUR. Adjusted for currency the increase was 9 per cent.
- Sales increased by 3 per cent to 77,8 (75,9) MEUR. Adjusted for currency and the IFRS 15 adjustment the increase was 6 per cent.
- Operating profit decreased to 14,1 (14,8) MEUR.
- Operating margin decreased to 18,1 (19,5) per cent.
- Financial net was -0,4 (-4,6) 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 10,2 (7,7) MEUR.
- Earnings per share increased to 0,51 (0,39) EUR.
CEO COMMENTS
The Group’s development during the second quarter 2018 continued in the same way as the first quarter. Second quarter orders showed an organic growth of around 10% excluding currency impact. During the second 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. The integration of the US based company Folding Guard that was acquired in late 2016 is generally following their plans. The market conditions in the US have during the second quarter been good but somewhat chaotic mainly due to raw material price increases. We have implemented price increases to the customers to reflect the higher cost for purchased steel but a certain lag can be noted in the numbers for the second quarter. Steel prices have generally gone up but the impact is most apparent in the US where the domestic vendors have increased prices on tube and steel significantly which is a natural effect following the implementation of tariffs on import.
Our assessment for this quarter is that the market has grown approximately as expected. The indication is that the order books of our customers are well filled and their investment in our solutions has continued on a 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 markets. The development in the UK has during the quarter been clearly positive compared to the weaker development we have seen during many of the past quarters. The orderbook at the end of the quarter is on a satisfying level.
The integration work of the company Folding Guard is progressing. Most of the organisational changes that were planned have now been made. The focus to realize the growth synergies from the acquisition remains strong but is not expected to deliver positive effects until the later part of the year. We see continued good opportunities to take market share for both brands in the important market of North America. During the third quarter of 2018 we will start-up the production of Troax products in our Chicago factory.
Sales increased in the quarter by 5 per cent compared with the same period last year (including currency the increase is 4 per cent). The progress has been positive especially in the UK and the US.
The result for the quarter is slightly below the previous year's level. The decrease can be attributed mainly to the following reasons: the lag in customer price increases in the US, market investments in new markets / new customers, some price pressure on the low engineered products in Europe and increased production costs due to very high capacity utilization at our main factory in Hillerstorp. The operating result was 7,7 (8,2) MEUR, which corresponds to a profit margin of 18,7 per cent to be compared with 20,7 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 5,6 MEUR for the quarter compared to 3,7 MEUR last year. The increase is mainly due to lower interest costs related to a one-time cost related to the redemption of the bond.
Earnings per share for the second quarter are 0,28 EUR to be compared with 0,19 EUR in the same quarter of 2017.
Working Capital is on expected level where accounts receivables have increased somewhat due to the increase in sales whereas inventory is on a low level. Cash flow from operations is higher than the same period last year. The key figure of our net debt in comparison with EBITDA is now 1,8 which clearly is below our target for the Group. The production capacity in our main factory in Hillerstorp will be increased at the end of the year through an investment of approximately 5 MEUR where most of this investment will impact the cash flow in 2018. Approximately half of this investment has impacted cash flow during the first half of 2018.
Thomas Widstrand, President and CEO
PHONE CONFERENCE
Invitation to presentation of the second quarter result.
Thomas Widstrand, CEO presents the result on a phone conference on the 15th of August 2018 at 16:00 CET.
The conference will be held in English. For more information, please refer to https://www.troax.com/en/news.
Thomas Widstrand
President and CEO
Troax Group AB
Box 89
330 33 Hillerstorp
Tel: +46 (0)370 828 31
http://www.troax.com
thomas.widstrand@troax.com
This information is information that Troax Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014 and the Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person set out above, at 12:30 CET on the
15th of August 2018.
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 36 countries.
In 2017 Troax net sales amounted to around 152 MEUR and the number of employees amounted to abtou 670 persons. The Company’s head office is located in Hillerstorp, Sweden.
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