29.03.2017
Grammer AG DE0005895403
DGAP-News: Record levels in revenue and profitability since the founding of the company underscoring Grammer's successful strategy
DGAP-News: Grammer AG / Key word(s): Final Results
Record levels in revenue and profitability since the founding of the company
underscoring Grammer's successful strategy
29.03.2017 / 06:53
The issuer is solely responsible for the content of this announcement.
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Record levels in revenue and profitability since the founding of the company
underscoring Grammer's successful strategy
High revenue growth to a new record of EUR 1.7 billion
71 percent increase in EBIT to EUR 73.0 million
Record dividend of EUR 1.30 per share proposed
Outlook for 2017: Further growth accompanied by rising profitability
Grammer asks shareholders to attend the annual general meeting
Amberg, March 29, 2017 - The Grammer Group, a leading international supplier
of interior components for passenger cars and seats for commercial vehicles,
has today published its annual financial statements for 2016. The Grammer
Group achieved record revenue and profit of its corporate history, thereby
underscoring the success of its global growth and innovation strategy. For
the sixth consecutive year, it posted record revenue of EUR 1.696 billion
(2015: 1.426), an increase of 18.9 percent. This strong top-line growth was
particularly underpinned by the integration of Grammer Interior Components
(the former Reum companies) and the sustained strong growth and expansion of
the Group's global presence in center console business in particular. The
Seating Systems Division also posted a slight increase in revenue despite
the persistent market weakness in Brazil and in agricultural machinery
business. Earnings before interest and taxes (EBIT) rose by a
disproportionately strong 71 percent to EUR 73.0 million (2015: 42.7
million) thanks to the positive effects from the systematic implementation
of cost- and process-optimization measures. Consequently, profitability
improved substantially, with the EBIT margin reaching 4.3 percent (2015:
3.0). Consolidated net profit after tax almost doubled to EUR 45.2 million
(2015: 23.8). As a result, earnings per share also climbed significantly to
EUR 4.01 (2015: EUR 2.10).
Increased dividend of EUR 1.30 per share proposed
On the strength of the Group's very favorable performance last year, the
Executive Board and the Supervisory Board of Grammer AG will be proposing at
the annual general meeting on May 24, 2017 a dividend of EUR 1.30 per share,
which is substantially higher than in earlier years. This means that Grammer
AG will be paying a record dividend of EUR 14.6 million to its shareholders,
equivalent to a distribution ratio of over 32 percent of consolidated net
profit after tax. With this record dividend, Grammer is sending out a clear
signal highlighting its strong financial and strategic basis and the upbeat
outlook for future business.
"2016 was a very good year for us. We were able to continue growing
substantially all over the world and further improve our competitive
position despite the ongoing challenges in a number of markets. On a
particularly gratifying note, we significantly improved the Grammer Group's
profitability as expected. We are now reaping the benefits of the focused
implementation of the international growth strategy of the past years,"
explains Hartmut Müller, Chief Executive Officer of Grammer AG. "We want to
continue on this trajectory in the interests of our shareholders, our more
than 12,000 employees and also our customers. Over the last few years, the
Grammer Group has very successfully evolved into a real global player in the
supplier industry in strategic, operating and also organizational terms and,
looking forward, we plan to continue on this course."
Growth in all regions
Grammer posted higher revenue in all regions in 2016. The greatest growth
was again achieved in EMEA region (Europe, Middle East, Africa), where
revenue reached EUR 1,197.9 million (2015: 971.7), an increase of 23.3
percent. This growth was primarily due to the first-time full consolidation
of the GRAMMER Interior Components companies as well as the persistently
strong growth in console business. Seating Systems revenue also rose by 4.1
percent in Europe despite the still muted demand in the important
agricultural machinery segment.
Grammer registered an increase of 19.5 percent in APAC (Asia and Pacific)
revenue to EUR 251.0 million (2015: 210.1) despite the slower economic
growth in China and Japan. The Automotive Division in particular expanded
considerably in all segments in this region thanks to strong order intake in
the premium segment and further market share gains.
Despite the persistent economic crisis afflicting Brazil, Grammer recorded
slight revenue growth in the Americas region to EUR 246.6 million (2015:
243.9 million). The strong Automotive Division was able to more than make up
for the decline in revenue sustained by the Seating Systems Division thanks
to new products for models made by international and local passenger vehicle
OEMs.
Dynamic growth and improved profitability in the Automotive Division
The Automotive Division was once again the GRAMMER Group's strongest growth
driver in 2016. The first-time consolidation of the GRAMMER Interior
Components companies, the sustained strong growth in console business as
well as the superb international presence caused revenue to climb by 26.1
percent to EUR 1.27 billion (2015: 1.01).
Underpinned by the positive effects of the efficiency-boosting measures, the
planned reduction in upfront costs for the expansion of the Group's
international position and the first-time consolidation of Grammer Interior
Components, EBIT climbed very sharply by 78.6 percent to EUR 42.5 million
(2015: 23.8). Although the EBIT margin continued to be influenced by
trailing costs in connection with the implementation of the global growth
strategy, it improved substantially, widening to 3.3 percent (2015: 2.4).
Moderate growth in the Seating Systems Division together with substantially
improved profitability despite still challenging market conditions
Last year, the Seating Systems Division was faced with continued difficult
market conditions and contraction in the Brazilian truck market as well as
the agricultural machinery business in particular. Even so, revenue rose by
3.3 percent over the previous year to EUR 473.6 million (2015: 458.4).
Despite still muted demand in important core markets of Grammer, the
division EBIT rose substantially to EUR 39.1 million (2015: 27.8) thanks to
systematic cost optimization at the Brazilian plant in particular. As a
result, the EBIT margin widened sharply to 8.3 percent (2015: 6.1).
Further capital spending on global growth strategy
Under its international growth strategy, Grammer increased capital spending
to EUR 56.2 million in 2016 (2015: 47.9) including the first-time inclusion
of Grammer Interior Components. Of this, EUR 42.8 million was spent in the
Automotive Division and EUR 9.3 million in the Seating Systems Division.
Capital spending primarily focused on plant expansion particularly outside
Germany as well as innovation and process optimization projects and
activities.
Equity strengthened
As of December 31, 2016, the GRAMMER Group had total assets of EUR 1,050.6
million. This marks an increase of 5.9 percent over the previous year (2015:
992.1), reflecting the increased business as well as plant development and
expansion activities. As of the reporting date, consolidated equity stood at
EUR 271.2 million (2015: 253.4), while the equity ratio improved slightly to
25.8 percent (2015: 25.5). Net financial liabilities dropped substantially
to EUR 139.1 million as of December 31, 2016 (2015: 155.5) thanks to the
positive cash flow development.
Outlook for 2017: Moderate revenue growth and continued improvement in
profitability expected
Grammer assumes that the economic and political environment will remain
challenging this year, with the relevant markets exhibiting disparate
conditions.
Looking forward to 2017, it projects moderate growth in its core business
and, provided that exchange rates remain stable, is expecting revenues of
more than EUR 1.75 billion. Operating EBIT in 2017 should exceed the figure
for 2016, with the EBIT margin set to rise again to around 5 percent. At
this stage, it is not possible for the Company to assess possible
consequences arising from potential changes in Grammer AG's supervisory and
management bodies. Accordingly, these are not factored into the current
outlook for 2017.
Planned continuation of the successful corporate strategy endangered by
Cascade International's intentions
In December 2016, Cascade International Investment GmbH served on Grammer a
request to convene an extraordinary shareholder meeting, subsequently
lodging a corresponding petition with the court. In doing so, Cascade sought
to have five of the six Supervisory Board members of the shareholder
representatives dismissed and new members elected as well as a vote of
no-confidence in Chief Executive Officer Hartmut Müller. The petition was
rejected by the local court of Amberg at the beginning of March 2017 on the
grounds that it constituted an abuse of law and was therefore
unsubstantiated. Cascade International Investment GmbH has since announced
that it will be pursuing its goals at the Annual General Meeting on May 24,
2017.
The Grammer Group is on an outstanding strategic course and has earned an
excellent reputation as a reliable and global partner to the automotive
industry. The changes being sought by Cascade International Investment GmbH
to Grammer AG's Supervisory Board and Executive Board could have an adverse
effect on these customer relations and therefore pose an existential risk to
future order intake. Together with the Supervisory Board, the Executive
Board of Grammer AG therefore urges all shareholders to take part in the
Annual General Meeting on May 24, 2017 and asks for their continued support
for the successful course of the last few years by rejecting the motions
announced by Cascade International Investment AG.
Company profile
Located in Amberg, Germany, Grammer AG specializes in the development and
production of components and systems for automotive interiors as well as
suspension driver and passenger seats for onroad and offroad vehicles.
In the Automotive Division, we supply headrests, armrests, center console
systems and high-quality interior components and operating systems to
premium automakers and automotive system suppliers. The Seating Systems
Division comprises seats for the truck and offroad seat segments (tractors,
construction machinery, forklifts) as well as train and bus seats.
Grammer is represented in 19 countries worldwide with a workforce of over
12,000 employees across its 32 subsidiaries.
Grammer shares are listed in the SDAX and traded on the Frankfurt and Munich
stock exchanges via the electronic trading system Xetra.
Contact:
GRAMMER AG
Ralf Hoppe
Phone: 0049 9621 66 2200
[email protected]
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29.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Grammer AG
Georg-Grammer-Str. 2
92224 Amberg
Germany
Phone: +49 (0)9621 66-0
Fax: +49 (0)9621 66-1000
E-mail: [email protected]
Internet: www.grammer.com
ISIN: DE0005895403, DE0005895403
WKN: 589540, 589540
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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