The 2010 annual report is available for download at www.tognum.com. The annual press conference will be held today at 10:30 am, followed by the analyst call at 2:00 pm.
Friedrichshafen/Stuttgart, 10 March 2011. The specialist for propulsion and power solutions Tognum in 2010 has grown significantly again, in terms of both revenues and the adjusted EBIT margin. The company is therefore proposing an increased dividend payout of €0.50 per share (previous year: €0.35 per share). For 2011, Tognum expects a further increase in revenues and margins.
“Tognum closed 2010, a year of transition, with an impressive record,” explained Volker Heuer, CEO of Tognum AG. “In the second half of 2010 in particular, we picked up speed and met our forecast for the full year, and even exceeded the forecast in the case of the margin. We have emerged from the crisis in a strong position and are now looking ahead to the current financial year with confidence. For 2011, we expect to see an increase in revenues of at least 10% with an adjusted EBIT margin of around 10%.”
High order intake and significant increase in revenues in core business – revenue forecast met in full
The order intake in the company’s core business – excluding the Rotorion activities – was up 27.5% in the 2010 financial year to €2,830.5 million (previous year: €2,330.4 million). Taking the Rotorion activities into account, the increase amounts to 21.5%. Revenues in the core business – here again, excluding the Rotorion activities – were up 6.0% to €2,563.6 million (previous year: €2,529.4 million). Tognum has thus met in full the revenue forecast it had raised in November 2010. With Rotorion activities included, this has resulted in an increase in revenues of 1.4%. The export ratio was up once again in the reporting period to 81.3% (previous year: 80.9%). As in the previous year, an increasingly large share of the company´s revenues is attributable to Asia.
Profit target exceeded: adjusted EBIT margin increases to 9.4%
The adjusted EBIT increased significantly in 2010 by 21.9% to €242.1 million (previous year: €198.6 million). The main reasons for this increase were primarily improved capacity utilisation, the increased efficiency and a moderate increase in costs. Expenditure for research and development increased in 2010 – not including effects related to the exit from the activities in fuel cell technology – as planned by 15.3% to €164.5 million (previous year: €142.7 million). Taking these effects into account, R&D expenditure increased to €186.9 million. With these investments in the future, Tognum intends to further increase its technological edge with new engines and systems. The adjusted EBIT margin increased to 9.4% (previous year: 7.9%). This means that Tognum exceeded the margin target for the full year that had been revised upwards in November 2010.
Significant increase in adjusted gross profit margin and adjusted net profit
With an adjusted gross profit of €704.2 million (previous year: €624.3 million), a significant increase in adjusted gross profit margin of 27.5% results for 2010 (previous year: 24.7%). The adjusted consolidated net profit also saw a strong increase of 31.2% to €159.2 million (previous year: €121.3 million). This results in adjusted earnings per share of €1.21 (previous year: €0.92). Tognum continues to pursue the dividend policy that was laid down at the IPO of paying out 30 to 50 per cent of the adjusted net profit. The supervisory board and the executive board will therefore propose at the annual general meeting to be held on 11 May 2011 that the dividend of €0.35 per share for the previous year will be increased to €0.50 per share for 2010.
Stable equity ratio and reduced net financial debt
Tognum has sufficient financial strength available to pursue its strategic goals with vigour. Due to the high cash flow from operating activities, net financial debt was significantly reduced to €57.2 million (previous year: €192.2 million). Free cash flow1 was down 10.8% to €199.4 million (previous year: €223.6 million). The equity base developed positively in the course of the 2010 financial year. The equity ratio was 26.8% (31 December 2009: 27.6%).
All three segments continued to grow
All three reporting segments – Engines, Onsite Energy & Components (OE&C) and Distribution – improved their performance in the 2010 financial year2.
The Engines segment increased its revenues by 4.6% to €1,758.1 million (previous year: €1,680.5 million). While declines in revenues in the Marine application area were reported in the yacht and commercial marine business, government business was stable. In the Industrial application area, all subsegments performed positively. As a result of increased investment activities and the rise in raw material prices, there was a disproportionately high increase in revenues in the Oil & Gas application area. Revenues were down in the Defense business, as projects came to an end as scheduled and there were no new projects of any significance ready for completion in 2010. After Sales/Other business continued to make a major contribution to growth. The adjusted segment EBIT margin increased significantly in the 2010 financial year to 10.6% (previous year: 8.1%).
The OE&C segment reported a significant increase in revenues in its core business – excluding the Rotorion activities – of 22.0% to €742.6 million in the reporting period (previous year: €719.1 million). Taking Rotorion into account, there is an increase in revenues of 3.3%. In the OE Diesel Systems & Engines application area, the supply business with OEM customers in all regions was very positive, while business in diesel systems was stable. The adjusted segment EBIT margin increased to 4.4% (previous year: 3.8%).
The revenue volume of the Distribution segment in 2010 was up 13.4% to €594.2 million (previous year: €524.1 million). The adjusted segment EBIT margin remained constant at 9.5% (previous year: 9.5%).
Increase in number of employees
At the end of 2010, the Tognum Group employed 9,046 people. Of the 7,375 employed in Germany, 6,013 alone are at the Friedrichshafen location. In 2010, Tognum increased the size of its workforce by a total of 532 new employees.
Continuation of the successful strategy focusing on sustainable growth
“At Tognum, all signs show we’re going for growth,” CEO Heuer emphasises. “With our balanced business portfolio and our proven growth strategy, we will benefit strongly in the current year from the recovery of our markets.” Tognum will continue to implement its five strategic growth initiatives, which focus on the optimisation of its product portfolio, system expertise in propulsion systems and in distributed energy systems, the enhancement of its after sales portfolio and decentralisation through regional expansion. The company’s stated goals include the strengthening of its innovation power. To this end, Tognum intends to maintain research and development expenditure in 2011 close to the level of the previous year at 6 to 7% of revenues.
In the year just ended, Tognum had already continually invested in the internationalisation of its production capacity, opening a new engine plant in Aiken, South Carolina/USA, for example, and a new genset plant in Datong/China. In addition, work at the new development centre in Pune/India has already begun.
“In 2012, we again expect to see a positive performance in our end markets, stimulated by rising raw material prices and an increasing demand for transport, in addition to a growing structural demand for distributed energy systems,” says Heuer. “In view of these trends, we intend to grow faster than the market, while achieving an adjusted EBIT margin in excess of 10%.”
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Tognum’s latest annual report, including a letter from the CEO to shareholders, customers and business partners, plus the consolidated and individual financial statements for the 2010 financial year is available for download on the company’s website at www.tognum.com under “Investors”.
Key figures for the Tognum Group
(€ million as of 31 December | 2009 | 2010 | Change |
if not otherwise indicated) |
|
|
|
Order intake | 2,330.4 | 2,830.5 | 21.5% |
Revenues | 2,529.4 | 2,563.6 | 1.4% |
EBIT (adjusted) | 198.6 | 242.1 | 21.9% |
EBIT margin (adjusted) | 7.9% | 9.4% | 1.5 pp |
Net profit (adjusted) | 121.3 | 159.2 | 31.2% |
Earnings per share (adjusted)3 | €0.92 | €1.21 | 31.5% |
Dividend4 | €0.35 | €0.50 | 42.9% |
Balance sheet total | 2,469.3 | 2,745.7 | 11.2% |
Equity | 680.5 | 735.8 | 8.1% |
Equity ratio5 | 27.6% | 26.8% | -0.8 pp |
Net financial debt | 192.2 | 57.2 | -70.2% |
Free cash flow6 | 223.6 | 199.4 | -10.8% |
Employees | 8,726 | 9,046 | 3.7% |
1 Free cash flow = cash flow from operating activities and cash flow from investing activities
2 All segment data including intersegment relations, i.e. transactions between the segments
3 Earnings per share calculated on the basis of net profit divided by the weighted number of shares: 131,375,000 in 2009 and 2010
4 Subject to the approval of the annual shareholders’ meeting on 11 May 2011
5 Shareholders’ equity as a proportion of total assets
6 Free cash flow = cash flow from operating activities and cash flow from investing activities
Presentation Annual Press Conference 2011 1.4 MPress Kit Annual Press Conference 2011 2.5 M