DGAP-News: INDUS Holding AG: Construction/Infrastructure segment remains strong; Metals Technology segment remains stable; three segments affected by coronavirus pandemic

Construction/Infrastructure segment remains strong; Metals Technology segment remains stable; three segments affected by coronavirus pandemic

• EBIT margin of over 16 percent in Construction/Infrastructure segment
• Automotive Technology segment posts noticeable loss
• Diversified portfolio and high liquidity ensure stability
• Forecast of limited reliability

Bergisch Gladbach, 14 May 2020 - The coronavirus pandemic is having serious consequences, with the German economy in a downturn since March. This is also reflected in the performance of INDUS Holding AG in the first quarter of 2020, when consolidated sales revenues declined by 8.3% to EUR 401.2 million (3M previous year: EUR 437.6 million). Earnings before interest and taxes (EBIT) dropped to EUR 16.0 million (3M previous year: EUR 33.6 million). The EBIT margin stood at 4.0% (3M previous year: 7.7%). The stability of the INDUS Group is ensured by its high liquidity of EUR 163.8 million at the end of the first quarter and a diversified portfolio spanning five industrial sectors.

The Construction/Infrastructure segment made an exceptionally high positive contribution, as it benefited from the mild winter, which led to seasonally unusually high revenues as of the beginning of January. Sales revenues were up by 8.0% on the previous year to EUR 93.5 million (3M previous year: EUR 86.6 million). Earnings before interest and taxes (EBIT) even grew by a disproportionate 55.0% to EUR 15.5 million. The segment's EBIT margin climbed to 16.6%.

All companies in the Automotive Technology segment recorded significant declines in revenues in the first quarter compared to the same period of the previous year. This is due, on the one hand, to a noticeable weakness in demand in Europe and the USA and, on the other hand, to the consequences of the coronavirus pandemic in China. The segment's sales revenues fell by 15.0% to EUR 78.9 million (3M previous year: EUR 92.8 million). At a negative EUR -12.0 million, earnings before interest and taxes (EBIT) were clearly below the previous year's EUR 0.2 million. The EBIT margin dropped to -15.2%.

Many of the companies in the Engineering segment felt the effects of a general market slowdown in the first quarter. Moreover, the direct effects of the coronavirus pandemic were already clearly noticeable, especially in China. Segment revenues dropped by 22.9% to EUR 84.3 million in the first three months (3M previous year: EUR 109.3 million). Earnings before interest and taxes (EBIT) declined to EUR 2.6 million (3M previous year: EUR 12.8 million). The EBIT margin stood at 3.1%.

With the exception of one company, all companies in the Medical Engineering/Life Science segment recorded slight declines in sales revenues in the first quarter. Business in the medical supply stores has slowed down noticeably. Most operations in the hospitals cleared for COVID-19 patients have been postponed. Segment revenues were down by 5.4% on the previous year to EUR 38.7 million (3M previous year: EUR 40.9 million). Earnings before interest and taxes (EBIT) dropped to EUR 3.1 million (3M previous year: EUR 3.8 million). This is equivalent to an EBIT margin of 8.0%.

The Metals Technology segment remained stable in the first quarter. Although revenues declined slightly, the portfolio companies were able to slightly improve their results. Sales revenues fell by 2.0% to EUR 106.1 million (3M previous year: EUR 108.3 million). Earnings before interest and taxes (EBIT) rose to EUR 9.0 million (3M previous year: EUR 8.6 million). The EBIT margin stood at 8.5%.

At EUR 2.6 million, operating cash flow for the first quarter was EUR 17.8 million higher than in the previous year. The Group's cash position of EUR 163.8 million provides high stability. This amount includes credit lines totaling EUR 42.0 million, which were drawn in March as a precautionary measure. "INDUS' supply with cash is currently secured," says Dr. Johannes Schmidt, Chairman of the Board of Management of the INDUS Group. "Important financing partners have already bilaterally committed new loan tranches, which is why we will not resort to government aid for the time being."

In January 2020, INDUS acquired the remaining 14.5% stake in m+p international Mess- und Rechnertechnik GmbH from one of the company founders after the latter's planned departure from the Board. INDUS now holds approx. 91.0% of the shares in the Hanover-based manufacturer of software and hardware for vibration control and measurement.

Because of the high level of uncertainty in the global economy with regard to future developments, the companies' ability to make reliable forecasts has become even more limited. Against this background, the INDUS Group, too, is currently unable to provide the capital market with a reliable forecast for the full year 2020. "We are running on sight and have therefore withdrawn our March 2020 forecast," says Dr. Johannes Schmidt. "We will update it as soon as the overall economic situation has stabilized to such an extent that it is possible to make a reliable forecast again."

Schmidt added: "Generally speaking, we consider ourselves to be well positioned, also for the time after the crisis. Besides the risks, we also see opportunities. This is why we are continuing our focus from the PARKOUR strategy program with the same intensity. We are driving innovation, strengthening our activities to improve our sustainability performance, pursuing M&A projects and working to increase operational excellence."

The full interim report of INDUS Holding AG for the period ended 31 March 2020 is available for download at www.indus.de.