Funkwerk AG undergoes complete restructuring in fiscal 2011
Focus on core areas; synergy potential identified
- Consolidated sales of continued segments at EUR 164.6m
- Operating result before restructuring and impairment costs of EUR -3.2m
- Rigorous continuation of initiated strategy change in 2012; balanced operating result and stable group sales expected
The 2011 financial year proved to be a year of radical changes for Funkwerk AG. Embarking on a strategic reorientation, the company set the course for the future, defined appropriate measures, and successfully implemented the first crucial objectives. Fiscal 2012 will see measures rigorously continued and implemented in operations to further improve the group's competitive strength and maintain its earning power. The forecast for the current financial year presented today at the press conference on the financial statements predicts stable group sales and a balanced operating result.
In the context of its restructuring, Funkwerk was able specifically to finalise its planned focusing measures in large parts selling several of its subsidiaries. In its three strategic business segments Traffic & Control Communication (TCC), Security Communication (SC) and Automotive Communication (AC), Funkwerk will now primarily concentrate on growth fields with a strong margin. As a further objective, the group plans to intensify its efforts in utilising synergy potential. As a result operations were divided into redefined business units at fiscal year change, while cross-divisional functions such as production, purchasing and administration will gradually be centralised.
The measures already implemented, but also significant advance payments for new projects placed a burden on earnings in the downsized Funkwerk group, which closed the 2011 financial year with an operating result (without impairment and restructuring costs) of EUR -3.2m (2010: EUR -1.7m). The EBIT of the continued segments totalled EUR -13.1m (2010: EUR -14.9m), while net earnings improved to EUR -18.9m (2010: EUR -22.7m). The sales volume in the group reduced marginally by 2.4 per cent to EUR 164.6m (2010: EUR 168.6m).
The financial position of Funkwerk AG stabilised after the successful sale of companies injecting liquid funds to the amount of around EUR 18m by early 2012, but also on grounds of a syndicated financing agreement which the company concluded in 2011. Free cash flow totalled EUR -6.4m, after EUR -8.2m in the previous year. The group's equity ratio stood at 30.8 per cent at year-end; adjusted for the liabilities held for sale, it came to 34.2 per cent.
The full annual financial statements are available on the Internet at www.funkwerk.com an April 05, 2012.
Funkwerk AG will continue to face significant challenges in fiscal 2012. Focus will be given to the rigorous implementation of centralisation measures, the optimisation of its supply chain management, the streamlining of the product portfolio, and to further internationalisation for systematically wider marketing. The new business units will also help Funkwerk direct attention specifically to products promising strong margins and unique selling points. The company expects the cyclical trend to continue on a cautious note in its key markets along with a situation marked by budget cuts in the public sector. On the whole, Funkwerk anticipates consolidated sales in 2012 to remain at prior-year level. Cost savings as a result of the restructuring measures should increasingly have a positive effect on earnings so that the operating result is forecast to be balanced.