ARQUES Industries AG / Quarter Results
21.08.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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ARQUES improves balance sheet structure and cash flow
- Consolidated revenues as of June 30 quadrupled to more than EUR 2.63
billion
- EBITDA in the second quarter up 67% to EUR 29.9 million
- Free cash flow increased to EUR 39.1 million
- Financial liabilities reduced by EUR 68.5 million
- Negative one offs from Schöps divestment
- Earnings forecast for 2008 adjusted owing to market situation
Starnberg, August 21, 2008 - ARQUES Industries AG (ISIN DE0005156004)
considerably increased sales and EBITDA in the second quarter of 2008.
Consolidated sales jumped by 284% to EUR 1.28 billion. It was possible to
increase the EBITDA in the second quarter by 67% to EUR 29.9 million as a
result of improved operating results on the part of the subsidiaries and
the successful exits from Oxiris and Jahnel-Kestermann. As of mid-year,
ARQUES reports a 318% improvement in sales to EUR 2.63 billion. At EUR
45.2 million, the EBITDA was lower than the previous years value of EUR
50.8 million owing to the weaker first quarter. A good indicator for the
improved earnings quality, however, is the fact that in the first half of
2007, 'bargain purchase' proceeds of EUR 48.3 million were realized
compared to only EUR 10.1 million in this reporting period.
ARQUES is focusing intensely in 2008 on improving balance sheet structure
and the cash flow. In this context, it has succeeded in reducing the
financial liabilities in the first 6 months of the current fiscal year from
EUR 339.5 million by around 20% to EUR 271.0 million. The free cash flow
increased from EUR -18.3 million to EUR 39.1 million and thus improved by
EUR 57.4 million. The main focus of acquisition activities was clearly on
the acquisition of SHC from Siemens. This major acquisition is expected to
be consolidated beginning with the fourth quarter.
In light of the general conditions, which remain difficult, ARQUES is
adjusting its annual targets for the entire year 2008. Consolidated
revenues are still expected to be more than EUR 6 billion. The earnings
target (EBITDA) is reduced from EUR 275 million to EUR 200 million, so the
high previous year´s level will be achieved. In addition, debt should
continue to be reduced and the free cash flow further increased.
'In light of the difficult general conditions, ARQUES is focusing intensely
in 2008 on improving balance sheet structure and the cash flow. In this
context, we have already made good progress in the first half of the year.
In addition, of course we conduct many promising discussions with some
acquisition and exit candidates', said Dr. Michael Schumann, CEO of ARQUES
Industries AG.
Non-recurring effects impact results below the EBITDA
Most of the strong increase in revenues was based on the acquisitions made
in the past twelve months. The acquisition of the IT distributor Actebis
alone provided more than EUR 1.7 billion in additional revenues volume as
of mid-year. The main reason for the worsening of the key earnings figures
below the EBITDA was debits totaling EUR 24.6 million for impairments to
the goodwill, brand name, and assets of the subsidiary Schöps, which was
sold in the middle of August. In accordance with IFRS, the impairments had
to be recognized already in the second quarter. Therefore, and owing to
considerably increased acquisition-related normal operating depreciation
and amortization, the quarterly EBIT fell from EUR 9.2 million to EUR -15.6
million. Adjustment for these effects would have resulted in EUR 9.0
million in the second quarter. Profit before and after taxes slipped below
zero as a result of the impairments.
Balance sheet structure and free cash flow significantly improved
Above all the improved operating results and the subsidiary purchases have
resulted in a significant improvement in cash flow and reduction in debt.
Thus, a significant improvement from EUR -15.8 million to EUR 57.1 million
(plus EUR 72.9 million) was achieved in operating cash flow. The turnaround
also succeeded with free cash flow, which increased from EUR -18.3 million
to plus EUR 39.1 million. With EUR 81.9 million as of June 30, 2008, ARQUES
has EUR 3.8 million more liquidity at its disposal than at the end of the
first quarter of 2008 (03/31/2008: EUR 78.1 million). The increase in
liquidity as a result of the sale of the Actebis property in the amount of
EUR 32 million is not included in this figure, because it was first
realized on July 9. In addition, financial debt was significantly reduced
by around 20% from EUR 339.5 million to EUR 271.0 million, while net debt
was reduced from EUR 255.0 million by around 25% to EUR 189.1 million. The
shareholder equity ratio increased from 21.8% to 22.1%. The net asset value
of the existing portfolio increased slightly to EUR 545.7 million (March
2008: EUR 540.3 million).
Earnings guidance for 2008 adjusted, continued focus on reducing debt
So far, the third quarter of 2008 has been clearly characterized by the
takeover of 80.2% of Siemens Home and Office Communication Devices (SHC)
from Siemens AG. ARQUES acquired the subsidiary (key figures 2006/07:
sales, EUR 792 million; EBIT, EUR 13 million) under highly favorable
conditions. The balance sheet ratios in the ARQUES Group will improve as a
result of the transaction. Consolidation is expected to occur after the
closing beginning with the fourth quarter of 2008.
Although a greater contribution to operating results for the entire year
compared to the previous year is expected, ARQUES lowered its earnings
guidance for 2008 in light of continued difficult general conditions.
Whereas consolidated revenues are still expected to be more than EUR 6
billion, the EBITDA is now expected to on previous year´s level of EUR 200
million following the previous announcement of EUR 275 million, whereby
above all the bargain purchase proceeds will no longer reach the
extraordinarily high amount of the previous year (EUR 214.7 million). The
exit proceeds are also not expected to reach the previous years level (EUR
51.0 million). Profits before and after taxes will be impacted by
non-recurring effects occurring in the first half of the year, higher
amortization and depreciation, and greater negative financial results. The
exact amount of sales and earnings will, however, depend greatly on the
number of company purchases and acquisitions to be realized and the timing
of the consolidation of SHC. For the sale of Actebis, all options continue
to be examined. Owing to the difficult situation in the M&A market and the
fact that ARQUES has only examined purchases of companies with revenues in
excess of EUR 30 million since the beginning of the fiscal year, ARQUES is
reducing its previous expectation of 10-15 company purchases in the current
fiscal year to 7-10 whereas it is still expecting to sell 5-7 subsidiaries.
ARQUES is expecting a significant reduction in debt and a considerable
improvement in cash flow in 2008. These key figures will be further
improved in the third quarter, among other things, as a result of the
already completed sale of property.
You can find the report for the first half of 2008 at the webpage
www.arques.de.
About ARQUES
ARQUES Industries AG, Starnberg (www.arques.de), is a partner for major
corporations in corporate spin-offs and a turnaround specialist
concentrating on the acquisition and active restructuring of companies in
crisis situations in order to turn them into competitive and profitable
companies with a dedicated team and their own efforts. ARQUES revitalizes
its subsidiaries potential for adding value for the benefit of all of
their stakeholders under consideration of the associated social
responsibility. The shares of ARQUES Industries AG are traded on the
Frankfurt Stock Exchanges Regulated Market (Prime Standard) under the
symbol 'AQU' (ISIN: DE0005156004) and have been listed in the MDAX since
October 1, 2007.
Contact:
ARQUES Industries AG
Investor Relations & Corporate Communication
Anke Lüdemann, CEFA/CIIA
Email: luedemann@arques.de
Public Relations
Christian Schneider
Email: schneider@arques.de
Tel.: +49 (0) 8151/ 651 0
DGAP 21.08.2008
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Language: English
Issuer: ARQUES Industries AG
Münchner Str. 15a
82319 Starnberg
Deutschland
Phone: +49 (0)8151 651-0
Fax: +49 (0)8151 651- 500
E-mail: luedemann@arques.de
Internet: www.arques.de
ISIN: DE0005156004
WKN: 515600
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hamburg, Düsseldorf, München, Stuttgart
End of News DGAP News-Service
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DGAP-News: ARQUES improves balance sheet structure and cash flow
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