Grammer successfully starting into the new business year
21 percent increase in Group revenue to EUR 425.9 million / Improved operating performance in both Divisions / Substantial increase in operating EBIT to EUR 17.3 million
As planned, the operating performance of both Divisions improved, with Group operating EBIT rising substantially to EUR 17.3 million (2015: 6.8). At 4.1%, the operating EBIT margin was therefore well up on the same quarter of the previous year. Group earnings before interest and taxes (EBIT) came to EUR 14.8 million (2015: 16.5) and were only slightly down on the previous year despite the high positive currency-translation effects in first quarter of 2015.
Revenue in the Automotive Division up almost 30 percent
Once again, the Automotive Division was the main revenue driver in the first quarter of 2016, recording an increase of 28.9 percent in revenue to EUR 316.1 million (2015: 245.3). Generally dynamic market growth accompanied by above-average gains in console business together with the first-time inclusion of the Reum Group generated a sharp increase.
Operating EBIT in the Division rose substantially, doubling to EUR 10.6 million (2015: 5.0). Consequently, the operating EBIT margin widened to 3.4 percent (2015: 2.0). Thus, as planned, the favorable operating performance achieved by the Automotive Division reflects the preliminary success of the optimization measures implemented last year together with lower up-front costs. At EUR 8.6 million in the first quarter of 2016, segment earnings before interest and taxes (EBIT) fell short of the previous year (2015: 11.0), which had been heavily influenced by the aforementioned currency-translation effects.
Substantially improved earnings in the Seating Systems Division
Despite the further sharp market-related decline in Brazilian business, revenue in the Seating Systems Division also grew solidly by 4.6 percent over the previous year to EUR 122.0 million (2015: 116.6). Specifically, revenue in the truck segment dropped only marginally despite the persistently weak market conditions in Brazil and the slower Chinese economy. However, these effects were more than offset by growth in the other segments. Thus, European offroad business stabilized in the first quarter particularly in the agricultural machinery segment.
Driven by the stabilization of important and profitable core markets in Europe in particular, Grammer achieved significantly greater profitability in the Seating Systems Division despite the continued sharp contraction of the Brazilian commercial vehicle market. Operating EBIT in the Seating Systems Division came to EUR 9.4 million and was thus significantly higher than in the previous year (2015: 5.3 million), accompanied by an operating EBIT margin of 7.7 percent (2015: 4.5). At EUR 9.2 million in the first quarter of 2016, Division earnings before interest and taxes (EBIT) were also up on the previous year (2015: 8.5).
Capital spending ratio further optimized
At EUR 9.0 million, capital spending by the Grammer Group remained at the previous year’s level (2015: 8.8). Most of the capital spending in both Divisions was for the establishment and expansion of international facilities and production capacities as well as the optimization of existing locations and processes.
Full-year guidance for 2016 confirmed
As the year continues, Grammer expects the volatile and challenging market conditions to continue, particularly in the relevant commercial vehicle markets. Even so, it is confident of being able to successfully address these challenges over the coming months thanks to its global footprint and further improvements in its processes.
All told, it expects the revenue generated by the Group’s core business including the Reum Group to increase to over EUR 1.6 billion compared with the previous year. In addition, it forecasts substantial EBIT and a slight growth of the EBIT margin over the previous year.
Grammer AG, Amberg, Germany, specializes in the development and production of components and systems for automotive interiors as well as driver and passenger seats for utility and offroad vehicles. In the Automotive Division, we supply headrests, armrests and center console systems to premium automakers and automotive system suppliers. The Seating Systems Division comprises the truck and offroad seat segments as well as train and bus seats.
Grammer is represented in 20 countries worldwide with a workforce of over 12,000 employees across its 32 subsidiaries.
The Grammer share is listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra as well as in over-the-counter trading at the Stuttgart, Berlin and Hamburg stock exchanges.