Annual Report 2015

Anticipated development of the technotrans group

In the 2016 financial year technotrans will again focus its activities increasingly on organic growth for the existing portfolio and its expansion through acquisitions. The further business development of the technotrans Group in 2016 will to a large degree depend on the world economy and on various project launches involving existing and new customers.

The Board of Management rates the outlook for the 2016 financial year cautiously optimistic. technotrans has set itself the goal of growing faster than the market. The GDP forecast for 2016 (ifo economic forecast and IfW Institute for the World Economy) is 1.7 percent. Overall, the Board of Management expects the technotrans Group to achieve revenue of € 126 to € 132 million for the 2016 financial year, assuming a steady development in the world economy. The EBIT margin for 2016 should be in the range of 7.5 to 8.0 percent. For planning purposes EBIT therefore needs to be between € 9.5 and € 10.5 million. The revenue volume and the time required to get the new projects off the ground will in turn materially influence the earnings position. In an effort to see that the many customer projects currently getting under way are completed successfully, we continue to invest in the necessary resources.

Group targets and the segments

  target figure 2015 forecast 2016
Revenue € million 122.8 126 -132
Technology € million 81.4 84 - 88
% 66
Servicess € million 41.4 42 - 44
  % 34  
EBIT € million 9.0 9.5 - 10.5
  % 7.3 7.5 - 8.0
Technology € million 2.1
% 2.6 > 3
Services € million 6.9
% 16.5 stable margin
Free Cashflow € million 8.5 >5

The revenue and earnings planning does not reflect possible acquisitions. On the procurement side we do not expect to see any major price changes; in the personnel arena we will however see a rise in personnel expenses. Alongside a slightly higher employee total at the turn of 2015/2016, an average pay increase of 3 percent is expected. The effective tax rate for the group is expected to be in the region of 30 percent.

Given the prevailing economic environment, the Board of Management expects technotrans AG (separate financial statements) to achieve slight revenue growth in the order of 3 to 4 percent in the 2016 financial year. As matters stand we also anticipate an improved financial performance from the higher revenue level. Our goal is to achieve an EBIT margin of 6.5 percent for technotrans AG.

In the Technology segment we again plan to maintain organic growth for 2016. We assume here that the markets we already serve will continue to develop positively in the 2016 financial year. technotrans expects robust demand for digital and flexographic printing presses, while business for offset printing will stabilise at least at the prior-year level. The laser and mechanical engineering markets, stamping and forming technology, energy storage technology as well as medical and scanner technology will remain the segment’s growth drivers. We have successfully stepped up our activities in these growth areas in recent years.

The Services segment generates a relatively high proportion of the technotrans Group’s overall revenue and therefore plays an important part in keeping our business stable. We anticipate that revenue for the Services segment will again grow slightly in 2016 thanks to increased use of our worldwide service network by the group’s new companies. We expect the financial performance to remain on an even keel with an unchanged EBIT margin. For 2016, the Board of Management expects a positive operating cash flow thanks to steady income and earnings, so technotrans should again be in a position to finance business operations and the maintenance investments it envisages in property, plant and equipment and intangible assets (excluding acquisitions) from cash flow. After interest and capital repayments, the current view is that there should again be a positive free cash flow.

On the financial side, based on the planned business performance the Board of Management expects borrowings to come down yet further as a result of scheduled repayments (around € 2.0 million). technotrans had cash and cash equivalents amounting to € 20.0 million at the reporting date of December 31, 2015. This is ample for financing ongoing business in all group companies. technotrans also has unutilised borrowing facilities which, together with the surplus financial resources, provide considerable flexibility for following up strategic options where appropriate. As before, the Board of Management views acquisitions as an appropriate way of strategically adding to corporate growth and accessing additional future industries. It is continually scouting for and analysing suitable options. For technotrans – in the role of strategic investor – suitable acquisition targets must not only fit in with its market and growth-led expansion strategy, but also offer the prospect of unlocking appropriate synergy potential. In addition, technologies that would specifically broaden its core skills are fundamentally of great interest. It is the declared intention of the Board of Management to accelerate the company’s growth through further acquisitions. Depending on the size of the acquisition targets, the use of both external funding and equity instruments would be considered. Our banks have expressed an interest in supporting us as required. On the other hand, in the absence of specific takeover targets at the reporting date there are as yet no firm commitments. technotrans intends broadly to maintain the current structure of the balance sheet. Depending on the financial commitment necessitated by any acquisitions, there could be a slight temporary dip in the equity ratio.

The prospects for the distribution of a dividend for the 2016 financial year are good: the company has a sound balance sheet structure and the profitability trend is positive. As matters stand we would however make a distribution of dividend dependent on plans for any major investment projects that would have a priority claim on financial resources, e.g. a major acquisition, at the time that decision needs to be reached. Given these conditions, we stand by our dividend declaration that we once more intend to distribute half of our consolidated net profit in the future.