EDAG Engineering Group AG: EDAG meets adjusted annual targets 2019

Press release


EDAG Engineering Group AG:
EDAG meets adjusted annual targets 2019

- Sales and earnings development in line with expectations

- Vehicle Engineering and Electrics/Electronics show positive development

- Restructuring at Production Solutions segment weighs on profit

- Reduction in net financial debt at year-end

- Suspension of dividend payment proposed due to Corona pandemic

Arbon, 02 April 2020 EDAG, a leading independent engineering services provider to the global automotive industry, has published its figures for the fiscal year 2019, today. At EUR 781.3 million, revenues were slightly below the previous year's level of EUR 792.3 million. While segments Vehicle Engineering and Electrics/Electronics were able to increase revenue by 2.5 and 11.1 percent respectively, the smallest segment Production Solutions, recorded a 28.1 percent decline in revenue. At EUR 33.0 million, adjusted EBIT was consequently down on the previous year's figure of EUR 53.5 million. This corresponds to an adjusted EBIT margin of 4.2 percent (previous year: 6.8 percent). Earnings after taxes fell to EUR 7.0 million (previous year: EUR 23.7 million) as they were burdened by the development of Production Solutions and the expenses for restructuring measures. Free cash flow increased significantly in the fourth quarter and amounted to EUR 55.1 million for the year (previous year: EUR 69.6 million). Net financial debt (w/o leasing) was reduced to EUR 71.0 million at the end of the year (previous year: EUR 79.2 million). On 31 December 2019, EDAG had 8,488 employees, an increase of about 2.8 percent compared to previous year (8,641 employees).

"For EDAG, the 2019 fiscal year was very heterogeneous. Positive developments were in the two largest segments. In particular, Electrics/Electronics has developed positively thanks to our international expertise and a high degree of digital innovation, and has been able to increase revenues significantly. However, challenges arose in segment Production Solutions and made restructuring measures necessary. We have acted consistently in this phase of upheaval and have further aligned our company to the requirements of the future.
With the outbreak of SARS-CoV 2, the year 2020 will present us with completely new challenges. In the current situation, the protection of our employees and our business partners as well as the safeguarding of our operating business is our top priority. We are working closely and in a spirit of trust with our customers on measures to minimize the economic impact. The aim of all our activities is to guide EDAG safely through the challenges ahead and to emerge from them with strengthened structures", comments Cosimo De Carlo, CEO of the EDAG Group.

The market for engineering services continues to be highly dynamic. With a growing focus on CO2 reduction, the development of alternative drive systems is being massively accelerated. Trend topics such as highly automated driving and databased business models are making completely new vehicle architectures necessary. The multitude of drive variants will make flexible and networked smart factories indispensable. All these developments are driving the demand for development services and lead to considerable opportunities in the medium and long term.
On the other hand, global trade disputes, sharply declining sales figures and above all now the consequences of the SARS-CoV-2 pandemic are leading to massive negative effects on the automotive market.

Against this background, a decline in sales and earnings is expected in the 2020 financial year compared to the previous year, which in the worst case can have a significant impact on the earnings situation. The main value drivers in EDAG's business model are customer-specific development projects and services, the maintenance of which - irrespective of production stoppages at customers - has a significant impact on value creation and total output.
The Management continually monitors possible effects on the business and takes comprehensive measures to ensure the protection of employees and the continuation of business operations in the group companies.

In view of the current challenges, the Board of Directors will propose to the Annual General Meeting on 24 June a suspension of dividend payment for the year 2019.

Selected key financial figures

About EDAG

EDAG is an independent engineering services provider to the global automotive industry. The company serves leading domestic and international vehicle OEMs and sophisticated automotive suppliers through a global network of about 60 sites in major automotive centres of the world.

EDAG offers complementary engineering services across its Vehicle Engineering, Electrics/Electronics and Production Solutions businesses. Based on these extensive capabilities, EDAG can support clients across the entire value chain from the original design idea to product development and prototype construction all the way to the delivery of turnkey production systems. As a technology and innovation leader, EDAG also operates established centres of excellence that design landmark technologies for future applications in the automotive industry: lightweight construction, electric mobility, digitalization, integral safety, cyber security and new production technologies.

In financial year 2019, the company generated revenues of EUR 781 million and an adjusted EBIT of EUR 33.0 million. As at 31 December 2019, 8,488 employees (including apprentices) worked for EDAG all over the world.
 

Press contacts:

Public Relations
Christoph Horvath
Press Officer EDAG Group
Phone: +49 (0) 661- 6000 570
Mail: [email protected]
www.edag.com
 

Investor Relations
Sebastian Lehmann
Head of Investor Relations
Phone: +49 (0) 611- 7375 168
Mail: [email protected]
www.edag.com

Forward-looking statements

This release contains forward-looking statements. These statements are based on current estimates and projections of EDAG Executive Board and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not be accurate. Many factors could cause the actual results, performance or achievements of EDAG to be materially different from those that may be expressed or implied by such statements. EDAG does not assume any obligation to update the forward-looking statements contained in this release.