.
- Revenue grew by 9.1 per cent to EUR 318.8 million
- EBIT showed extraordinarily strong increase of 28.6 per cent to EUR 30.2 million
- Consolidated net result rose by 29.0 per cent to EUR 18.6 million
- Outlook still marked by growth
Performance of the PALFINGER Group
In the first quarter of 2016, the performance of the PALFINGER Group was marked by revenue growth and an extraordinarily strong increase in earnings. Revenue rose by 9.1 per cent to EUR 318.8 million (Q1 2015: EUR 292.3 million), setting a new record for a first-quarter result. EBIT showed an extraordinarily strong increase of 28.6 per cent from EUR 23.5 million to EUR 30.2 million, which is a new record as well. This, in turn, generated a marked increase in the EBIT margin, which came to 9.5 per cent, as compared to 8.0 per cent in the first quarter of the previous year. The consolidated net result for the first quarter of 2016 was EUR 18.6 million, 29.0 per cent higher than the previous year's figure. Earnings per share came to EUR 0.50, as compared to EUR 0.39 in the previous year.
"We have managed to continue our growth," explains Herbert Ortner, CEO of PALFINGER AG. "The primary reason for the increase in revenue and earnings was that demand in Europe remained strong. Given the present situation, we think chances are good that our growth will continue over the rest of the year."
Performance of the EUROPEAN UNITS segment
In the first quarter of 2016, the EUROPEAN UNITS segment saw a year-on-year increase in revenue of EUR 12.9 per cent from EUR 200.7 million to EUR 226.6 million. The segment's EBIT for the first three months of 2016 grew by 29.9 per cent to EUR 34.0 million, as compared to EUR 26.2 million for the first quarter of 2015. As a consequence, the segment's EBIT margin rose from 13.1 per cent to 15.0 per cent in the first quarter of 2016.
In the field of loader cranes, PALFINGER increased sales and revenue considerably in the first quarter of 2016. Growth, which in some cases was substantial, was recorded primarily in Sweden, Finland, Ireland, the Czech Republic, Poland, Germany, France, Belgium and Austria as well as in Australia. In contrast, revenue declined in South Africa, Denmark and Norway. The development of demand in the southern countries of Europe, where markets had been weak since the financial crisis, was highly positive. In Italy and Spain, PALFINGER was able to increase its revenue by nearly 70 per cent. PALFINGER's hooklift business managed to increase its revenue in the first quarter of 2016 as well.
Once again, sales of timber and recycling cranes increased. On an equally positive note, the railway systems business performed extremely well, nearly doubling revenue compared to the same quarter of the previous year and recording a further increase in incoming orders. Access platforms also saw significant growth in revenue and new orders. The constantly good capacity utilization at the production units during the first quarter of 2016 resulted in a high level of profitability. Manufacturing for third parties was expanded.
The marine business, which is operated on a global scale, was affected by the oil and gas industry's low propensity to invest, which had been caused by the oil price development. As a consequence, revenue in the first quarter of 2016 was 13.6 per cent lower than in the same quarter of 2015. Against this backdrop, a large-scale order for offshore equipment in Norway with a volume of EUR 3 million was particularly welcome.
Performance of the AREA UNITS segment
In the AREA UNITS segment, revenue in the first quarter of 2016 totalled EUR 92.2 million, a slight increase over the previous year's figure of EUR 91.6 million. The contribution of the AREA UNITS segment to PALFINGER's consolidated revenue decreased from 31.4 per cent in the first quarter of 2015 to 28.9 per cent. The segment's EBIT shrank by 63.3 per cent from EUR 1.4 million to EUR 0.5 million. The EBIT margin came to 0.5 per cent, after 1.5 per cent in the first quarter of 2015.
In North America, PALFINGER was able to post a year-on-year increase in revenue of 6.4 per cent. Sales of tail lifts, timber and recycling cranes and hooklifts increased compared to the previous year, in part quite substantially. Given that incoming orders for these products and for loader cranes as well as for access platforms are at a high level, the prospects for business performance in 2016 are positive. In North America, however, the 2016 earnings will be lessened by necessary structural adjustments.
In South America, PALFINGER's business volume contracted by 38.2 per cent due to the weak economy. Particularly in Brazil, were state funding was, for the most part, no longer available, massive declines in sales and revenue were recorded. Immediate measures to improve flexibility contributed to keeping the negative effect on the results relatively small, even though the national currency had depreciated by around 20 per cent. In Russia/CIS, PALFINGER succeeded in keeping the business volume, expressed in the local currency, at the previous year's level. However, due to the weak ruble, the revenue generated showed a decline of 13.6 per cent when converted into euros, the Group's reporting currency.
The performance of the Asia and Pacific market region was marked by PALFINGER's successful cooperation with SANY. But even though business volume was expanded as compared to the same quarter of the previous year, the outlook for the months to come is subdued as economic growth has been slowing down.
VENTURES unit
This unit is currently engaged in an intensive exploration of potential acquisitions or partnerships for the PALFINGER Group. As this involves higher costs, EBIT for the first quarter of 2016 was pushed down to -EUR 4.6 million, as compared to -EUR 3.5 million in the first quarter of 2015.
Outlook
The present level of incoming orders gives reason to expect further positive developments in the second quarter of 2016. In Europe, visibility is still low but has stabilized in recent months. However, estimating the further development of the market regions outside Europe has become somewhat more difficult.
The management continues to expect a growth in revenue of approx. 10 per cent for 2016.
PALFINGER still sees the potential to increase the annual revenue generated by the Group, including the joint venture companies in China and Russia, to approx. EUR 1.8 billion by 2017 and intends to reach this goal through acquisitions and by completing its product portfolio in the market regions outside Europe.
- Revenue grew by 9.1 per cent to EUR 318.8 million
- EBIT showed extraordinarily strong increase of 28.6 per cent to EUR 30.2 million
- Consolidated net result rose by 29.0 per cent to EUR 18.6 million
- Outlook still marked by growth
Performance of the PALFINGER Group
In the first quarter of 2016, the performance of the PALFINGER Group was marked by revenue growth and an extraordinarily strong increase in earnings. Revenue rose by 9.1 per cent to EUR 318.8 million (Q1 2015: EUR 292.3 million), setting a new record for a first-quarter result. EBIT showed an extraordinarily strong increase of 28.6 per cent from EUR 23.5 million to EUR 30.2 million, which is a new record as well. This, in turn, generated a marked increase in the EBIT margin, which came to 9.5 per cent, as compared to 8.0 per cent in the first quarter of the previous year. The consolidated net result for the first quarter of 2016 was EUR 18.6 million, 29.0 per cent higher than the previous year's figure. Earnings per share came to EUR 0.50, as compared to EUR 0.39 in the previous year.
"We have managed to continue our growth," explains Herbert Ortner, CEO of PALFINGER AG. "The primary reason for the increase in revenue and earnings was that demand in Europe remained strong. Given the present situation, we think chances are good that our growth will continue over the rest of the year."
Performance of the EUROPEAN UNITS segment
In the first quarter of 2016, the EUROPEAN UNITS segment saw a year-on-year increase in revenue of EUR 12.9 per cent from EUR 200.7 million to EUR 226.6 million. The segment's EBIT for the first three months of 2016 grew by 29.9 per cent to EUR 34.0 million, as compared to EUR 26.2 million for the first quarter of 2015. As a consequence, the segment's EBIT margin rose from 13.1 per cent to 15.0 per cent in the first quarter of 2016.
In the field of loader cranes, PALFINGER increased sales and revenue considerably in the first quarter of 2016. Growth, which in some cases was substantial, was recorded primarily in Sweden, Finland, Ireland, the Czech Republic, Poland, Germany, France, Belgium and Austria as well as in Australia. In contrast, revenue declined in South Africa, Denmark and Norway. The development of demand in the southern countries of Europe, where markets had been weak since the financial crisis, was highly positive. In Italy and Spain, PALFINGER was able to increase its revenue by nearly 70 per cent. PALFINGER's hooklift business managed to increase its revenue in the first quarter of 2016 as well.
Once again, sales of timber and recycling cranes increased. On an equally positive note, the railway systems business performed extremely well, nearly doubling revenue compared to the same quarter of the previous year and recording a further increase in incoming orders. Access platforms also saw significant growth in revenue and new orders. The constantly good capacity utilization at the production units during the first quarter of 2016 resulted in a high level of profitability. Manufacturing for third parties was expanded.
The marine business, which is operated on a global scale, was affected by the oil and gas industry's low propensity to invest, which had been caused by the oil price development. As a consequence, revenue in the first quarter of 2016 was 13.6 per cent lower than in the same quarter of 2015. Against this backdrop, a large-scale order for offshore equipment in Norway with a volume of EUR 3 million was particularly welcome.
Performance of the AREA UNITS segment
In the AREA UNITS segment, revenue in the first quarter of 2016 totalled EUR 92.2 million, a slight increase over the previous year's figure of EUR 91.6 million. The contribution of the AREA UNITS segment to PALFINGER's consolidated revenue decreased from 31.4 per cent in the first quarter of 2015 to 28.9 per cent. The segment's EBIT shrank by 63.3 per cent from EUR 1.4 million to EUR 0.5 million. The EBIT margin came to 0.5 per cent, after 1.5 per cent in the first quarter of 2015.
In North America, PALFINGER was able to post a year-on-year increase in revenue of 6.4 per cent. Sales of tail lifts, timber and recycling cranes and hooklifts increased compared to the previous year, in part quite substantially. Given that incoming orders for these products and for loader cranes as well as for access platforms are at a high level, the prospects for business performance in 2016 are positive. In North America, however, the 2016 earnings will be lessened by necessary structural adjustments.
In South America, PALFINGER's business volume contracted by 38.2 per cent due to the weak economy. Particularly in Brazil, were state funding was, for the most part, no longer available, massive declines in sales and revenue were recorded. Immediate measures to improve flexibility contributed to keeping the negative effect on the results relatively small, even though the national currency had depreciated by around 20 per cent. In Russia/CIS, PALFINGER succeeded in keeping the business volume, expressed in the local currency, at the previous year's level. However, due to the weak ruble, the revenue generated showed a decline of 13.6 per cent when converted into euros, the Group's reporting currency.
The performance of the Asia and Pacific market region was marked by PALFINGER's successful cooperation with SANY. But even though business volume was expanded as compared to the same quarter of the previous year, the outlook for the months to come is subdued as economic growth has been slowing down.
VENTURES unit
This unit is currently engaged in an intensive exploration of potential acquisitions or partnerships for the PALFINGER Group. As this involves higher costs, EBIT for the first quarter of 2016 was pushed down to -EUR 4.6 million, as compared to -EUR 3.5 million in the first quarter of 2015.
Outlook
The present level of incoming orders gives reason to expect further positive developments in the second quarter of 2016. In Europe, visibility is still low but has stabilized in recent months. However, estimating the further development of the market regions outside Europe has become somewhat more difficult.
The management continues to expect a growth in revenue of approx. 10 per cent for 2016.
PALFINGER still sees the potential to increase the annual revenue generated by the Group, including the joint venture companies in China and Russia, to approx. EUR 1.8 billion by 2017 and intends to reach this goal through acquisitions and by completing its product portfolio in the market regions outside Europe.
