- At EUR 801.9 million, revenue reached a new peak
- Once again, double-digit operating profitability, with EBITn margin of 10.4 per cent
- High level of incoming orders indicates continuation of satisfactory performance throughout 2018
| Revenue (EUR million)
| EBITDAn1) (EUR million)
| EBITDAn margin1) in %
| EBITn1) (EUR million)
| EBITn margin1) in %
| EBIT (EUR million)
| Consolidated net result for the period (EUR million)
Bergheim, 30 July 2018
The PALFINGER Group continued to post growth in the first half of 2018. The global environment remained heterogeneous; the positive development reflected primarily the ongoing expansion of business in Europe and Russia, which for the most part was organic. The restructuring measures in North America and in the marine business, which had been initiated in 2016, still had a detrimental effect on earnings, but the large restructuring measures in North America were completed in the first half of 2018. Nevertheless, PALFINGER achieved double-digit operating profitability in the reporting period. However, the consolidated net result for the period fell short of expectations; one-off effects reflected in the tax result and in the net financial result as well as the increase in earnings attributable to non-controlling shareholders were the main causes for this development.
The PALFINGER Group’s revenue rose by 6.4 per cent year on year from EUR 753.8 million to EUR 801.9 million, reaching a new peak for a first-half reporting period. EBITDA normalized by restructuring costs (EBITDAn) increased to EUR 110.0 million.
“Thanks to strong demand, we were able to continue our profitable growth,” commented Andreas Klauser, who has been the CEO of PALFINGER AG since 1 June 2018, on the performance in the first six months. His outlook for the second half of the year is optimistic: “For 2018 as a whole, we again expect an increase in revenue and operating profitability, as well as a higher consolidated net result than in 2017.”
Performance of the LAND segment
In the first half of 2018, the revenue of the LAND segment rose by 10.0 per cent from EUR 624.6 million in the first half of 2017 to EUR 687.0 million. This growth was due to the expansion of business in the EMEA and CIS business areas.
The segment’s normalized EBITDA (EBITDAn) grew by 10.5 per cent from EUR 106.5 million to EUR 117.7 million. At 17.1 per cent, the segment’s EBITDAn margin in the first half of 2018 was slightly higher than in the same period of the previous year, when it came to 17.0 per cent. The restructuring costs allocated to this segment amounted to EUR 5.8 million in the reporting period, as compared to EUR 7.5 million in the first half of 2017.
Performance of the SEA segment
In the first half of 2018, the SEA segment’s revenue decreased to EUR 114.9 million, corresponding to a decline of 11.0 per cent from the previous year’s figure of EUR 129.2 million. The contribution of the segment to PALFINGER’s consolidated revenue thus shrank from 17.1 per cent to 14.3 per cent.
The segment’s normalized EBITDA (EBITDAn) decreased from EUR 5.9 million in the first half of 2017 to EUR 2.8 million; the EBITDAn margin came to 2.5 per cent, as compared to 4.6 per cent in the first half of 2017. The restructuring costs incurred by this segment were EUR 6.3 million, as compared to EUR 2.5 million in the same period of the previous year.
As market performance was distinctly weaker than originally expected, the restructuring of this segment was continued intensively. In addition to solely cost-cutting measures, evaluations have been and will be made regarding site restructurings, efficiency enhancements and portfolio adjustments, as well as leveraging of additional potential for growth and enhanced utilization of synergies. Some of these measures have already been implemented.
Development of key financials
EBITDAn (EBITDA normalized by restructuring costs) increased by 4.3 per cent from EUR 105.5 million in the first half of 2017 to EUR 110.0 million in the first half of 2018. The EBITDAn margin thus came to 13.7 per cent, as compared to 14.0 per cent in the previous year. EBITn grew from EUR 77.1 million to EUR 83.5 million, resulting in a double-digit EBITn margin of 10.4 per cent, which is slightly higher than in the previous year.
Performance over the individual quarters of 2018 shows the increases in revenue (Q1: EUR 394.2 million; Q2: EUR 407.6 million), EBITDAn (Q1: EUR 54.0 million; Q2: EUR 56.0 million) and EBITn (Q1: EUR 39.9 million; Q2: EUR 43.5 million) achieved by PALFINGER.
In the reporting period, restructuring costs amounted to EUR 12.4 million, as compared to EUR 10.2 million in the first half of 2017, and were incurred primarily as a result of the initiatives taken in North America and in the marine business.
The operating result (EBIT) increased by 6.3 per cent year on year from EUR 66.8 million to EUR 71.0 million. Due to the lower financial result, a higher tax rate and the increase in earnings attributable to non-controlling shareholders, the consolidated net result of EUR 35.2 million for the first half of 2018 was 8.8 per cent lower than the previous year’s figure of EUR 38.6 million. Earnings per share amounted to EUR 0.94, as compared to EUR 1.03 in the first half of 2017.
In the first half of 2018, the PALFINGER Group again recorded an increase in incoming orders, which indicates that for the 2018 financial year business performance will continue to be satisfactory overall, albeit heterogeneous. It is expected that due to continuing bottlenecks in supply, PALFINGER will not be able to catch up on a substantial part of the order backlog by the end of the year. Orders not realized in 2018 can therefore only be reflected in the figures for 2019.
The restructuring measures in North America were largely completed in the first half of 2018, but the ongoing restructuring measures in the marine business will continue to depress earnings in 2019. From today’s point of view, the restructuring costs in the second half of 2018 will reach a similar level as in the first half. Any portfolio or site optimization could also lead to higher restructuring costs in the second half of 2018.
The management foresees an increase in revenue and operating profitability for 2018. The consolidated net result in 2018 will likely be higher than in 2017; however, as a result of the higher tax rate, the lower net financial result, further restructuring measures and an increase in non-controlling interests, it is not expected to reach the record levels of 2015 and 2016.