DGAP-IRE: SCHULER AG: Interim announcement within first

SCHULER AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act] 06.05.2014 07:30 Interim report according to Article 37x of the WpHG, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- BUSINESS DEVELOPMENT The Annual General Meeting of Schuler AG resolved on April 18, 2013, to change the company's fiscal year to the calendar year. 2014 will be the first full calendar fiscal year of Schuler AG. The reporting period of this interim report therefore comprises the period from January 1, 2014, to March 31, 2014. The same period last year (January 1, 2013, to March 31, 2013) is the best compar­able period and has therefore been used in our analysis. NEW ORDERS UP 20% Schuler was involved in numerous project bids during the first quarter of 2014 and generated strong growth in new orders. Whereas orders in Europe remained stable at a satisfactory level, there were several major orders in Asia, South America and the Gulf region. New orders in the first quarter of 2014 (January 1 - March 31, 2014) rose from EUR 267.0 million to EUR 319.8 million. Compared to the same period last year, this represents growth of 19.8%. Orders from the American market were very encouraging: In the first three months of fiscal year 2014, they doubled from EUR 30.7 million to EUR 66.6 million. This figure also includes a major order for a European car manufacturer in Brazil. In Europe, new orders fell by 15.8% to EUR 135.5 million. The proportion of total new orders remained at 42.3%. New orders in Europe include the largest service contract which Schuler has ever received. We recorded growth in Asia: New orders rose by 37.4% to EUR 99.6 million in the first three months. Asia is still our second largest sales market after Europe, accounting for 31.1% of total orders. In other regions, new orders rose from EUR 3.0 million to EUR 18.1 million. <pre> TABLE 01 NEW ORDERS IN EUR MILLION 01/01/ - 03/31/2014 01/01/ - 03/31/2013 Europe 135.5 160.9 Americas 66.6 30.7 Asia 99.6 72.5 Other regions 18.1 3.0 New orders 319.8 267.0 </pre> ORDER BACKLOG REMAINS HIGH AT EUR 1.1 BILLION Order backlog as of March 31, 2014, amounted to EUR 1,100.6 million. Compared to March 31, 2013 (EUR 1,125.9 million), there was a slight decline of 2.3%. In Europe, the order backlog as of March 31, 2014, was down 12.7% to EUR 570.2 million. This region accounts for almost half of our order backlog. In the Americas, there was strong growth of 31.7% to reach an order backlog of EUR 157.2 million. The order backlog in Asia declined by 13.6% to EUR 305.3 million. In other regions, the order backlog amounted to EUR 67.9 million. <pre> TABLE 02 ORDER BACKLOG IN EUR MILLION 03/31/2014 03/31/2013 Europe 570.2 649.2 Americas 157.2 119.3 Asia 305.3 353.6 Other regions 67.9 3.9 Order backlog 1,100.6 1,125.9 </pre> YEAR-ON-YEAR DECLINE IN CONSOLIDATED SALES In the first quarter of fiscal year 2014, consolidated sales of the Schuler Group were down 16.0% on the comparative prior-year figure (EUR 307.0 million) at EUR 258.0 million. There were declines in almost all regions, whereby quarterly fluctuations are normal in the plant construction sector. In Europe, sales fell by 17.6% to EUR 143.6 million. In the Americas, there was a decrease in revenue of 9.0% to EUR 44.5 million and in Asia of 30.4% to EUR 58.3 million. In the other regions, sales rose from EUR 0.1 million to EUR 11.6 million. <pre> TABLE 03 SALES IN EUR MILLION 01/01 - 03/31/2014 01/01 - 03/31/2013 Europe 143.6 174.2 Americas 44.5 48.9 Asia 58.3 83.8 Other regions 11.6 0.1 Sales 258.0 307.0 </pre> EARNINGS POSITION EARNINGS REMAIN STRONG In the first three months of fiscal year 2014, the Schuler Group generated sales of EUR 258.0 million and thus reached the same level as the short fiscal year 2013 (EUR 258.8 million) but fell short of the very successful prior-year figure for January 2013 to March 2013 (EUR 307.0 million). Compared to the same period last year, total performance fell by 15.1% from EUR 311.5 million to EUR 264.5 million. In the first quarter of fiscal year 2014, the consolidated cost of materials amounted to EUR 106.8 million and was thus below the corresponding figure for the previous year (EUR 137.1 million). A lower proportion of major orders from the automotive industry - which have an above-average cost of materials ratio - was mainly responsible for the year-on-year decline in the cost of materials ratio from 44.0% to 40.4%. Due in particular to wage increases, personnel expenses in the first quarter of 2014 increased to EUR 97.1 million (prior year: EUR 94.8 million) or 36.7% (prior year: 30.4%) of total performance. The decline in total performance had a negative impact on earnings. EBITA of EUR 17.5 million in the first quarter of 2014 (EBITA margin: 6.8%) fell short of the corresponding figure for the previous year (prior year: EUR 26.4 million, EBITA margin: 8.6%). EBITA adjusted for intangible writedowns on company acquisitions stood at EUR 17.0 million (prior year: EUR 25.7 million). An increase in interest income and decrease in interest expense led to a year-on-year improvement in the interest result of EUR 1.4 million to EUR -0.7 million. After deduction of income taxes, which were heavily affected in the previous year by quota effects from non-recognizable loss carryforwards, the consolidated profit for the first quarter of fiscal year 2014 amounted to EUR 11.3 million (prior year: 10.7 million). <pre> TABLE 04 CONDENSED INCOME STATEMENT IN EUR MILLION 01/01/ - 01/01/ - 03/31/ 03/31/ 2014 2013 Sales 258.0 307.0 EBITDA 22.3 32.9 Depreciation/write-ups on non-current assets, interests in affiliates and ­participations, as well as loans 4.8 6.5 EBITA 17.5 26.4 Amortization 0.5 0.7 EBIT 17.0 25.7 Interest result -0.7 -2.1 EBT 16.3 23.5 Income taxes 5.0 12.8 Group profit or loss 11.3 10.7 </pre> FINANCIAL POSITION STRONG IMPROVEMENT IN FINANCIAL STATUS <pre> TABLE 05 CONDENSED STATEMENT OF CASH FLOWS IN EUR MILLION 01/01/ - 01/01/ - 03/31/ 03/31/ 2014 2013 Profit or loss for the period 11.3 10.7 Depreciation/write-ups on non-current assets, interests in affiliates and ­participations, as well as loans 5.3 7.2 Changes Net working capital 15.7 -62.0 Provisions / other 2.5 4.6 Cash flow from operating activities 34.8 -39.5 Capital expenditures -3.4 -6.8 Other 0.1 0.9 Cash flow from investing activities -3.3 -6.0 Increase/redemption of financial liabilities 3.6 17.1 Other 0.0 0.6 Cash flow from financing activities 3.6 17.7 Change in cash and cash equivalents 35.0 -27.8 +/- Change in cash and cash equivalents due to exchange rate fluctuations 1.2 1.5 Net change in cash and cash equivalents 36.3 -26.2 </pre> In the first quarter of fiscal year 2014, the Schuler Group generated net cash flow from operating activities of EUR 34.8 million, compared to EUR -39.5 million in the same period of the calendar year 2013. This increase was almost entirely due to a stronger reduction in net working capital. Provisions formed for corporate restructuring in the short fiscal year 2013 have only become payable to a small extent so far. Cash flow from investing activities amounted to EUR -3.3 million (prior year: EUR -6.0 million) and resulted mainly from capital expenditures. In the first three months of fiscal year 2014, cash flow from financing activities amounted to EUR 3.6 million (prior year: EUR 17.7 million). The decline in net cash inflows of EUR 13.5 million resulted mainly from the reduced increase in financial liabilities of our Brazilian subsidiary for the financing of customer orders. All in all, there was a change in cash and cash equivalents of EUR 35.0 million (prior year: EUR -27.8 million). After accounting for changes due to currency fluctuations, cash and cash equivalents increased from EUR 349.3 million as of December 31, 2013, to EUR 385.6 million as of March 31, 2014. In the same period, the net financial status improved from EUR 276.7 million to EUR 307.8 million. ASSETS POSITION ASSET PROFILE REMAINS STABLE <pre> TABLE 06 CONDENSED STATEMENT OF FINANCIAL POSITIONS IN EUR MILLION 03/31/ 12/31/ 2014 2013 ASSETS 1,033.3 1,012.6 A. Non-current assets 271.7 277.5 of which intangible assets, property, plant and equipment, interests in affiliates and participations 239.2 241.4 B. Current assets 761.7 735.1 of which inventories 129.5 123.1 of which trade receivables and future receivables from long-term ­construction contracts 190.6 219.2 of which cash and cash equivalents 385.6 349.3 LIABILITIES 1,033.3 1,012.6 A. Equity 286.3 274.7 B. Non-current liabilities 185.5 167.3 of which financial liabilities 54.2 36.2 of which pension provisions 102.7 100.9 of which other provisions 20.1 20.2 C. Current liabilities 561.5 570.7 of which financial liabilities 23.6 36.5 of which trade payables 70.5 61.0 of which other current liabilities 314.1 320.8 of which other provisions 138.0 137.3 </pre> Compared to the beginning of the fiscal year, the total statement of financial positions ­increased by EUR 20.7 million, from EUR 1,012.6 million to EUR 1,033.3 million. On the asset side, the decrease in trade accounts receivable of EUR 19.7 million and receivables from long-term construction contracts of EUR 8.9 million was more than compensated for by the increase in cash and cash equivalents of EUR 36.3 million, in inventories of EUR 6.4 million and in payments on account received of EUR 6.5 million. In the reporting period, equity rose by EUR 11.7 million or 4.2% to EUR 286.3 million. Due to the disproportionately slower increase in the total statement of financial positions, the equity ratio increased slightly from 27.1% to 27.7%. On the liabilities side, non-current financial liabilities rose from EUR 167.3 million to EUR 185.5 million in the first quarter of fiscal year 2014. This rise resulted mainly from the increase in bank liabilities of our Brazilian subsidiary for the financing of customer orders. By contrast, there was a decline in current financial liabilities from EUR 570.7 million to EUR 561.5 million. This fall of EUR 9.2 million was primarily due to the repayment of short-term bank liabilities of EUR 12.9 million. The decrease in other current liabilities of EUR 6.6 million to EUR 314.1 million (prior year: EUR 320.8 million) was caused by a decline in non-nettable payments on account received for construction contracts. The total amount of other provisions - which include the current portion of provisions formed for corporate restructuring - remained virtually unchanged. PERSONNEL As of March 31, 2014, the Schuler Group employed 5,494 people around the world. Compared to the end of the fiscal year, this represents a moderate decline in headcount of around 1% in the reporting period (December 31, 2013: 5,570). Whereas headcount in Germany and the Americas fell slightly, the number of staff in other European countries and in Asia remained largely unchanged. The decline in Germany of 63 persons resulted mainly from retirement. In the Americas, there were adjustments to staffing levels in particular at our Brazilian plant in São Paulo. In the reporting period, 16 persons were affected. <pre> TABLE 07 EMPLOYEES 03/31/2014 12/31/2013 Germany 4,255 4,318 Europe, excl. Germany 87 86 Americas 824 842 Asia 328 324 Schuler Group, total 5,494 5,570 </pre> SUBSEQUENT EVENTS MERGERS WITH SCHULER PRESSEN GMBH COMPLETED Under the heading 'From 10 to 1', we began streamlining our complex corporate structure in 2013 in order to raise efficiency. The nine companies of the Schuler Cartec and Schuler SMG groups were merged with Schuler Pressen GmbH retrospectively as of October 1, 2013. The merger agreements of the companies concerned were notarized on December 16, 2013, and January 27, 2014. The mergers have now all been entered in the Commercial Register. INGENIEURBÜRO ATIS TO BE MERGED WITH SCHULER PRESSEN GMBH In early 2013, we acquired Ingenieurbüro ATIS - an engineering firm specializing in large pipe projects based in Deggenhausertal, near Lake Constance, Germany. In order to simplify the Group's structure, we have decided to also merge Ingenieurbüro ATIS with Schuler Pressen GmbH. OUTLOOK With new orders of EUR 319.8 million, we made a good start to our fiscal year 2014. The high order backlog of around EUR 1.1 billion provides a solid base for our sales and earnings guidance for the full year 2014. We are therefore upholding our targets first announced in December 2013. Sales revenue in 2014 is expected to reach around EUR 1.1 billion with an EBITA margin of 6% to 7%. We hope to achieve the targeted EBITA margin of 8.5% again in the medium term. 06.05.2014 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: SCHULER AG Bahnhofstraße 41 73033 Göppingen Germany Internet: www.schulergroup.com End of Announcement DGAP News-Service ---------------------------------------------------------------------------