ATB Austria Antriebstechnik AG: Result for the first six months of 2014

Vienna (pta020/14.08.2014/15:00 UTC+2) - New orders increased by 6.5%, order backlog even up by 10.9%
- Small rise in sales revenue of 1.6%
- Key earnings figures below expectations
- Capital expenditure increased again by 6.5%

Vienna, 14 August 2014. In the first half of 2014, ATB Austria Antriebstechnik AG once again achieved a slight increase in sales revenue amounting to 1.6%. At the same time, the globalisation of the business is proving successful, as evidenced by a 6.5% rise in new orders. The fact that a number of major orders were won by the ATB Schorch site in Germany has been an important contributing factor to this good result. The order backlog rose by a considerable 10.9% to TEUR 137,867; this also sets the ATB Group up well for the remaining two quarters of the current year. Many key earnings figures have however declined quite significantly. This situation is attributable to a number of factors: the anticipated recovery in the mining segment still failed to materialise which necessitated optimisation measures at the ATB Morley site that were in part cost-intensive. At the same time, in the last six months the ATB Group provided for the future by recruiting product development and sales staff. The first six months of the current year were also impacted by higher depreciation and amortisation as a result of revaluations in the 2013 financial year. Lastly, the situation in the global and European economies, which are only recovering slowly, once again contributed to the fact that the ATB Group lagged behind its earnings targets.

Significant increase in new orders

This year, the ATB Group was once again able to achieve a level of new orders which was significantly higher than the industry average. New orders throughout the Group increased markedly compared to the first half of the previous year by 6.5% to TEUR 194,024 (first half of 2013: TEUR 182,164). At the 30 June 2014 reporting date, the order backlog at TEUR 137,867 was 10.9%, and thus clearly above the 2013 amount (TEUR 124,331). An important contribution was made by a number of major orders for the German site, ATB Schorch. Other positive contributing factors were the opening up of new areas of business and the introduction of new products.

Half-year figures in year-on-year comparison

While there was only a slight economic recovery in relevant markets, the ATB Group was still able to generate sales revenue of TEUR 171,430 in the first six months of the current year (first half of 2013: TEUR 168,809). This corresponds to an increase of 1.6%.

Compared to the first six months of 2013, EBITDA declined this year by 31.1% to TEUR 9,123 (first half of 2013: TEUR 13,233). Although the ATB Sever site, after optimisation measures, contributed to improving EBITDA by TEUR 550, ATB Morley suffered a further fall in profitability of TEUR 2,993 due to the lack of recovery in the mining segment. A small number of other sites also suffered declines in profitability as a result of a slight rise in material costs and increased personnel costs.

Personnel expenses rose in the first half of 2014 compared to the first six months of the previous year, from TEUR 62,111 to TEUR 66,230. This increase is attributable to the newly consolidated ATB Wuhan joint venture as well as to new appointments at individual sites. Depreciation and amortisation rose in the first half of 2014 compared to the 2013 comparative period from TEUR 4,595 to TEUR 5,697.

In view of these developments, EBIT for the ATB Group declined in the first six months of the current year to TEUR 3,426, after TEUR 8,638 in the first half of 2013. Correspondingly, the EBIT margin decreased to 2.0% after 5.1% in the first half of the previous year.

EBT fell in the same period from TEUR 5,254 to TEUR 204. At the same time, profit/loss for the period declined compared to the prior-year reporting period from TEUR 4,375 in 2013 to TEUR 412 in 2014. The change in profit/loss for the period is attributable to the fall in earnings at ATB Morley, ATB Tamel and ATB Nordenham. The remaining companies only recorded minor changes in earnings.

Diluted and basic earnings per share of the shareholders of the parent company as at the reporting date of 30 June 2014 amounted to EUR 0.01 (30 June 2013: EUR 0.34).

Financial Position

The increase in total assets at the reporting date of 30 June 2014 to TEUR 351,155, compared with TEUR 326,658 at the 2013 year end, resulted from changes in non-current assets due to continuing investments, a rise in intangible assets after the technology transfer with ATB Wuhan, own work capitalised due to capitalisation during the year at ATB Welzheim, an increase in construction contract receivables, as well as a rise in bank liabilities on the equity and liabilities side of the balance sheet.

The equity ratio as at 30 June 2014 declined slightly compared to the 2013 year end position, from 35.1% to 34.5%. This is explained by the higher level of total assets and the rise in net debt. The ATB Group's net debt as at 30 June 2014 amounted to TEUR 89,800 (31 December 2013: TEUR 72,219). The increase arose as a result of the drawdown of a loan of TEUR 16,500 in the first half of 2014 which was offset by a repayment of TEUR 10,500.

Capital expenditure

In the last four years, the ATB Group has continued to increase its investing activities by a rate of up to 61.9%. Similarly, in the past financial year, the Group again made acquisitions at all sites amounting to TEUR 19,697. And in the first six months of the current year, the Group once again increased its capital expenditure compared with the previous year. Capital expenditure in the period from January to June 2014 totalled TEUR 9,195 and was thus 5.4% above the prior-year comparative (first half of 2013: TEUR 8,726). Total capital expenditure therefore equated to 5.4% of sales revenue.

Personnel

At the 30 June 2014 reporting date, the ATB Group had a total of 3,775 employees. This equates to an increase in employees of 6.8% compared with the prior-year reporting date and can, apart from minor adjustments within the Group, be explained in its entirety by the integration of employees at the new ATB Wuhan site.

Outlook

The ATB Group currently has a sound order backlog across the Group. In particular, the ATB Schorch and ATB Sever sites are commencing the second half of the year with a very satisfactory order position. The Group will be able to make good use of this advantage. Potential new orders and contracts currently under negotiation with Russian firms are, however, being impacted by a certain degree of uncertainty due to the current situation in the Ukraine.

In product development, the innovation teams have been working on a new complete series of transnorm motors (size 355 - 710) which will be launched in the third quarter of this year. As a result of the internally-developed design, the ATB Group is expecting significant advantages over the competition in terms of compactness and material utilisation. First orders are also coming in for the ISI motor with integrated inverter which was launched in the past year; this is why the ATB Group will continue to intensify its efforts on power electronics and will gradually become more heavily involved in this area.

On taking over the management of the new ATB Wuhan site, there too, comprehensive changes were set in motion: new processes were established, the infrastructure was improved, personnel was provided with further training and comprehensive training measures were put in place. As a result of these activities, the ATB Group is expecting the site to have a strong upward trend in the Chinese market at the latest from 2015 onwards.

The ATB Group's main focus in the second half of 2014 will, however, above all be on improving the key earnings figures. Appropriate measures have already been implemented at a number of sites. The Group will, among other things, concentrate heavily on managing personnel costs. Although new employees have been recruited in technology and sales at some sites as a result of the good order position and thus a significant investment has been made in the future, personnel cost structures must continue to be optimised further and designed to be more flexible if there are fluctuations in orders.

ATB Austria Antriebstechnik AG - selected key figures

in TEUR	04-06/2014	04-06/2013	% Change	01-06/2014	01-06/2013	% Change
Sales revenue	85,905	84,568	1.6%	171,430	168,809	1.6%
EBITDA	3,607	6,579	-45.2%	9,123	13,233	-31.1%
Operating profit (EBIT)	742	4,141	-82.1%	3,426	8,638	-60.3%
EBIT margin	0.9%	4.9%	-82.4%	2.0%	5.1%	-60.9%
Profit/loss before tax (EBT)	-783	2,226	-135.2%	204	5,254	-96.1%
Profit/loss for the period	-695	1,765	-139.4%	412	4,375	-90.6%
New orders	88,992	91,558	-2.8%	194,024	182,164	6.5%
Order backlog as at 30 June				137,867	124,331	10.9%
Capital expenditure	4,920	4,832	1.8%	9,195	8,726	5.4%
Employees as at 30 June				3,775	3,536	6.8%

The report on the first six months of 2014 can be downloaded from www.atb-motors.com.

Note
This disclosure includes statements about possible future events. These statements have been prepared based on information currently available. They reflect the Managing Board's current assessment of future events and should not be taken as guarantees of future performance; they include risks and uncertainties which are difficult to predict. A wide variety of reasons could cause actual results or circumstances to differ fundamentally from the assumptions made in the statements.

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