Frankfurt/Main | May 25, 2012
euromicron AG: Shareholders reward record year 2011 at the General Meeting – Executive Board initiates next stage in the corporate strategy
This year’s General Meeting of euromicron AG, a leading provider of network and fiber optic technology, saw an around 30% increase in attendance as a result of growing awareness of the company in the capital market. There was great approval of the work of the Executive Board (99.20 percent) and Supervisory Board (95.77 percent) in the record fiscal year 2011. The company’s dividend policy was explicitly praised by shareholders. They also confirmed their approval of its strategy and planned development in talks and discussions on the fringes of the event.
euromicron AG’s sales rose last year by 50 percent to €305.3 million. This is attributable to the strong organic growth of euromicron’s group companies; in addition, the development and service companies acquired in 2011 contributed some €70.0 million to consolidated sales. Consolidated earnings before interest and taxes rose by around 20.4 percent in 2011 to €24.2 million. The Group’s EBIT margin is just under 8 percent, at the lower end of the company’s target corridor. Despite high non-recurring expenses, earnings per share are stable at €2.33.
Excellent outlook for 2012
The company goes into 2012 with an extremely positive outlook. The euromicron Group generated consolidated sales of some €80.5 million at March 31, 2012, around 40% up year on year. euromicron’s total operating performance rose from €58.4 million to €83.8 million compared with the same period of the previous year. The outstanding prospects are also reflected in the Group’s order books. Following euromicron’s good level of order books of €127.5 million at December 31, 2011, new orders at the beginning of 2012 were around €87.5 million, approximately 36 percent up on the previous year. In view of the current very high order books of around €134 million, the company notes “that contracts have already been signed for a large part of the sales that will bring us closer to achieving our planned operating target of €300 to €345 million,” stated Chairman of the Executive Board Dr. Späth in his speech to the General Meeting.
After a strong start in the 1st quarter of 2011 with a price of more than €23, euromicron’s share displayed its strength relative to the indices in the further course of a year shaped by stock market fluctuations: Whereas the DAX slumped by 25 to 30 percent, euromicron’s share was impacted by just 10 to 15 percent. The share also coped well with the capital increase, stabilizing at €18 after declining to €16 due to the issue at December 31, 2011. This demonstrates that the capital market is increasingly rewarding the continuity in implementation of the company’s corporate strategy and its growth and earnings strength.
After a continuous evolution in its shareholder structure and unbroken demand from potential investors, euromicron’s share was launched on the TecDAX on the basis of a 100% free float in March 2012. The uncertainty that weighed on the share a few years ago due to the stakes held by critical funds has been almost completely dissipated. The share’s liquidity was positively impacted by the capital increase and, with a trading volume totaling around 5.7 million, was almost at the strong level of 2010. Following admission to the TecDAX, 4.2 million of the shares have been traded up to April 2012. Market capitalization rose sharply to some €140 million, likewise as a result of the capital increase and positive share performance. Späth explained that the share was also attractive because of its high dividend yield: As in the past years, the company aimed to ensure continuity and distribute around 50 percent of the operating profit to shareholders; the General Meeting adopted a resolution to pay a dividend of €1.15 per share for fiscal 2011 – giving a computed dividend yield of approximately five percent.
Sustainable capital structure
In order to obtain the financial flexibility required for the next stage of the company’s corporate strategy and fund its sustainable growth, its capital and financial structure was optimized in the past fiscal year, added Späth: In 2011, for example, the company paid an average rate of interest, including the margin, of 1.5 percent for around €40 million in short-term funding thanks to its top rating. Despite additional interest expenses of around €1 million as part of financing of the company’s operating activities, it also successfully placed a borrower’s note loan for €24.5 million in order to meet the wish of many shareholders for the Group to strengthen its medium- to long-term financing. A further significant event impacting the company’s structure of financing was the capital increase, which injected some €24.6 million of fresh equity into the company. As a result of the capital measures, an equity ratio of above 45% was ensured and borrowings were sharply reduced.
Expansion and rounding out of the company’s competence profile
Once again in 2011, the network specialist euromicron not only pursued its established core business, but also positioned itself proactively in markets with a highly promising future, such as healthcare, energy and utilities, the FTTx arena and mobility. To enable that, the company significantly increased its expenditure aimed at developing individual components and product systems into all-round solutions for national and international use.
At the same time, euromicron also actively seized opportunities last year to expand and round out its portfolio with strategic acquisitions. The most important acquisition in the past year was that of the business operations of telent GmbH, with which euromicron has complemented and expanded its expertise a vendor-independent system integrator to include a further segment, above all in the fields of mobile radio, radio relay and complex wide area networks. In addition, the euromicron Group took over the analog mobile radio and radio relay division of Cassidian Communications, a subsidiary of EADS, making it the most important partner to Cassidian Communications’ customer base and the analog radio market in Germany and giving the company the chance to be the preferred partner to customers who are intending to upgrade their networks to digital solutions in the near future. In order to expand the skills and entire range of technology at all its locations and so provide customers with the very best advice and support, euromicron acquired ACE Advanced Engineering GmbH and TeraMile GmbH in the past fiscal year, two companies with excellently qualified personnel, and so expanded its technological expertise in the field of active and IP technology for the whole Group.
As part of its international commitment, euromicron continues to pursue a strategy of gradual and cautious expansion. In Austria, the successful business model from Germany was complemented with euromicron NBG as a manufacturer, euromicron austria as a system house and Qubix austria as a distribution organization, with the result that the company now has a full footprint there with all levels of its expertise.
Optimization of corporate and personnel structures in 2012
The main focus in the year of integration 2012 will be on further optimization of the company’s corporate and personnel structures. That means the continuous improvement process commenced in the previous years will be continued, the qualification structure of employees further enhanced and cost structures optimized, the customer-centric corporate culture that is oriented to the needs of a medium-sized enterprise is to be complemented by the advantageous elements of a group organization, and the company’s regional presence is to be improved by expansion and professionalization of the branch offices and production operations.
Apart from these already ongoing internal topics, the company intends to target and tackle future-oriented projects in key growth markets and occupy high-margin niches in the next phase of its development. The Group’s organic growth will play a major role in this. “However, we will continue to seize worthwhile opportunities to take over qualified teams, technologies and market access or patents from the market and integrate them in our Group – we are currently examining several smallish specialist companies which, if the outcome is positive, we intend to include in our Group and with which we will expand our business model, acquire qualified personnel or tap new locations,” explained Dr. Späth.
All these measures will help stabilize the Group’s target EBIT return at 8 to 11 percent in the coming years as well. After completion of the years of integration in 2013, euromicron’s next goal for the subsequent years up to 2015 will be to attain the €500 million sales mark.
euromicron AG (www.euromicron.de) is an all-round solution provider for communications, transport, data and security networks. euromicron’s network infrastructures integrate voice, video and data transport wirelessly, via copper cable and by means of fiber-optic technologies. euromicron builds leading applications, such as security, control, healthcare or surveillance systems, on the basis of these cutting-edge network infrastructures.
Founded on its expertise as a developer and producer of fiber-optic components, euromicron AG is a strongly growing, highly profitable group that is listed on the stock market, has a medium-sized character and focuses on operational growth, integration and further market penetration, internationalization and expansion.
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