PALFINGER continued the expansion of its business in Q1–Q3 and is taking internal measures for further profitable growth

• In the first three quarters of 2018, revenue rose by 8.2 per cent to EUR 1,182.6 million
• Exceptionally high increase in EBITn; EBITn margin at 9.8 per cent
• AFREP review: Need for impairment of Marine goodwill as at 31 December 2017
• SANY repurchases 2.5 per cent of its shares: Funds inflow of EUR 28.6 million
• Higher revenue and operating profitability expected for the 2018 financial year
• Implementation of a global PALFINGER organizational structure 

  Q1–Q3
2016 
Q1–Q3
2017 
Q1–Q3
2018 
% 
 Revenue (EUR million) 996.6 1,093.1 1,182.6 +8.2%
 EBITDAn1) (EUR million) 131.1 147.6 157.1 +6.5%
 EBITDAn margin1) 13.2% 13.5% 13.3% – 
 EBITn1) (EUR million) 96.9  105.3 116.4 +10.5%
 EBITn margin1) 9.7%  9.6% 9.8%
 EBIT (EUR million) 86.4 91.9 101.7 +10.7%
 Consolidated net result for the period (EUR million) 49.7 50.5 48.3 –4.4%
 Employees2) 9,981 10,119 10,678

1) These figures were normalized (n) by restructuring costs.
2) Starting in 2018, balance-sheet-date figures of consolidated group companies excluding equity shareholdings and excluding contract workers are being presented; the previous years’ figures are average figures.

Bergheim, am 29 October 2018

The PALFINGER Group continued to record strong organic growth in the first three quarters of 2018, primarily a result of the good performance in Europe, North America and Russia. As expected, the restructuring measures in North America and in the marine business continued to have a detrimental effect on earnings; however, in North America all relevant one-time effects were already recorded in the first half of 2018.

“The level of incoming orders was again higher than in the previous year and clearly surpassed our expectations. We are also satisfied with the earnings generated to date: Despite the ongoing restructuring, operating profitability has almost reached the 10 per cent threshold. At present, we are not seeing any slowdown in demand,” commented Andreas Klauser, CEO of PALFINGER AG.

In the first three quarters of 2018, the PALFINGER Group’s revenue increased by 8.2 per cent from EUR 1,093.1 million to EUR 1,182.6 million. EBITDAn (EBITDA normalized by restructuring costs) went up from EUR 147.6 million to EUR 157.1 million. EBITn grew from EUR 105.3 million to EUR 116.4 million, and the EBITn margin rose from 9.6 per cent in the previous year to 9.8 per cent.

Performance of revenue (Q1: EUR 394.2 million; Q2: EUR 407.6 million; Q3: EUR 380.8 million), EBITDAn (Q1: EUR 54.0 million; Q2: EUR 56.0 million; Q3: EUR 47.1 million) and EBITn (Q1: EUR 39.9 million; Q2: EUR 43.5 million; Q3: EUR 32.9 million) over the individual quarters shows that also in 2018, for seasonal reasons, performance in the third quarter was weaker than in the first two quarters.

In the reporting period, restructuring costs amounted to EUR 14.7 million (Q1–Q3 2017: EUR 13.5 million). The operating result (EBIT) thus increased by 10.7 per cent year on year from EUR 91.9 million to EUR 101.7 million. The consolidated net result for the first three quarters of 2018 came to EUR 49.5 million, which is 1.9 per cent lower than the previous year’s figure of EUR 50.5 million, primarily as a result of a higher tax rate and the increase in earnings attributable to non-controlling shareholders. Earnings per share amounted to EUR 1.32, as compared to EUR 1.34 in the first three quarters of 2017.

To optimize its financing structure, PALFINGER raised several promissory note loans, featuring maturities between five and ten years and a volume of EUR 80 million and USD 25 million at the end of October.

In recent months, the Austrian Financial Reporting Enforcement Panel (AFREP) carried out a review of PALFINGER AG. On 25 October 2018, PALFINGER was notified of a material need for impairment of the goodwill of the business area Marine cash-generating unit (CGU) as at 31 December 2017. The Management Board estimates that the extent of the potential restatement may amount to approximately half of the goodwill recorded (EUR 156.5 million as at 31 December 2017). Therefore, the impairment will substantially reduce the Group’s equity and equity ratio and will additionally lead to a retrospective reduction of the 2017 results. PALFINGER AG expects to receive the final review report in the next couple of weeks and will perform and publish all necessary corrections on the basis of said report.

On 25 October 2018, PALFINGER and SANY signed an agreement for the repurchase of shares held by PALFINGER in Sany Lifting Solutions. In the course of a cross-shareholding, PALFINGER acquired 10 per cent in Sany Lifting Solutions in 2014, of which 2.5 per cent will now be repurchased by SANY. This corresponds to a funds inflow of EUR 28.6 million. Following this transaction, PALFINGER will have a 7.5 per cent shareholding in Sany Lifting Solutions, SANY will continue to hold 7.5 per cent of PALFINGER’s shares. The cooperation between the two companies is to be further intensified.

Performance by segment

In the first three quarters of 2018, revenue in the LAND segment increased by 11.9 per cent year on year from EUR 908.8 million to EUR 1,017.3 million. The segment’s normalized EBITDA (EBITDAn) rose from EUR 153.8 million to EUR 168.6 million, an increase of 9.6 per cent. The restructuring costs allocated to this segment amounted to EUR 6.0 million in the reporting period, as compared to EUR 8.9 million in the first three quarters of 2017.

In the EMEA business area, PALFINGER once again recorded higher incoming orders than in the previous year. The bottlenecks which had existed in this connection since the end of 2017 were alleviated in the third quarter. In North America, following a two-year restructuring phase, all larger one-time effects were recorded by the end of the first half of 2018.

In the first three quarters of 2018, the SEA segment generated revenue of EUR 165.3 million, corresponding to a decline of 10.3 per cent from the previous year’s figure of EUR 184.3 million. This development reflects the extremely difficult business environment. The segment’s normalized EBITDA (EBITDAn) decreased year on year from EUR 5.8 million to EUR 4.0 million. The restructuring costs incurred by this segment were EUR 8.5 million, as compared to EUR 4.1 million in the same period of the previous year. As market performance was distinctly weaker than originally expected, the restructuring of this segment has been continued intensively.

Outlook

In September 2018, PALFINGER began implementing a new global organizational structure. By the beginning of 2019, the new GLOBAL PALFINGER ORGANIZATION (GPO) will have been fully implemented and help reduce the complexity of the Group, which has grown in size considerably, and utilize additional internal synergies. The existing group-wide initiatives will be consolidated and additional ones developed. The objective of this more streamlined organizational structure is to support the Group’s profitable growth.

In the first three quarters of 2018, the PALFINGER Group again recorded an increase in incoming orders, which indicates that for the remaining 2018 financial year business performance will continue to be satisfactory overall. Moreover, the remaining backlog is expected to be, for the most part, resolved by the end of 2018.

The restructuring measures in North America were largely implemented in the first half of 2018, but the ongoing restructuring measures in the marine business will continue to depress earnings in the first half of 2019. From today’s point of view, the restructuring costs in 2018 will reach a slightly higher level than in the previous year.

The adjustment of the 2017 financial statements on the basis of the AFREP review will not have any effect on the 2018 results, but will reduce the Group’s equity and equity ratio accordingly.

The management continues to foresee an increase in revenue and operating profitability for 2018. As a result of the further restructuring measures, the higher tax rate and the increase in earnings attributable to non-controlling shareholders the consolidated net result for 2018 is not expected to reach the record levels of 2015 and 2016.

About PALFINGER AG

For many years PALFINGER has been one of the world’s leading manufacturers of innovative lifting solutions for use on commercial vehicles and in the maritime field. As a multinational group headquartered in Bergheim, Austria, the PALFINGER Group, which has approx. 10,212 employees, generated total revenue of approx. EUR 1,471.1 million in 2017.

The Group has manufacturing and assembly facilities in Europe, CIS, North and South America, as well as Asia. The pillars of its corporate strategy are innovation, further internationalization, enhanced flexibility of products, services and processes, and PALFINGER 21st (the development of smart solutions and innovative, data-based business models). PALFINGER is regarded not only as the market leader, but also the technology leader, in the global market for hydraulic loader cranes. PALFINGER is always in proximity to its customers due to its over 5,000 sales and service centres located in over 130 countries across all continents.

For further information please contact:
Hannes Roither, PALFINGER AG
Company Spokesperson
Phone +43 662 2281 81100 
h.roither@palfinger.com