My Annual Report
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My Annual Report
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Anticipated development of the technotrans group
In line with the strategic objectives, technotrans will adhere to the course successfully pursued in recent years. The Board of Management takes the fundamental goals for organic and non-organic growth as its terms of reference here. It hopes to capitalise on fresh openings for new industries and applications, the spread of internationalisation and the appearance of technological innovations.
The Board of Management is generally optimistic in its outlook for the financial year. For 2018, too, technotrans sets itself the goal of growing faster than the market. For Germany, the ifo Institute expects real gross domestic product to grow by 2.6 percent in 2018 (ifo economic forecast and IfW Institute for the World Economy). As before, this growth indicator serves as the benchmark for our activities.
Overall, the Board of Management expects the technotrans Group to grow yet again, assuming steady development in the world economy. The Board of Management is targeting revenue of € 212 to 220 million for the 2018 financial year. The operating result should be within a range of € 18.0 to 20.0 million. The EBIT margin for 2018 is expected to be in the range of 8.5 to 9.0 percent. The overall solid position of the individual group companies provides a stable basis for achieving this growth target.
The 2018 financial year will see technotrans increasingly focus its attention on maintaining or improving its performance in the individual markets. For the planning year, the group management expects that technotrans will again achieve strong growth in the Technology segment, participating especially in the growing dynamism of the electric mobility area and the semiconductor industry.
As before, the Board of Management views acquisitions as an appropriate means of forcefully bolstering the company’s future growth. The revenue and earnings planning does not reflect new acquisitions for 2018. The basis of the outlook for the group is the plans for the individual companies of the technotrans Group. The level of orders at the end of 2017 and the quotation activities endorses this planning.
Group targets and the segments
|Fiscal year 2017||Forecast 2018|
|Revenue||€ million||205.1||212 - 220|
|Technology||€ million||147.6||153 - 159|
|Service||€ million||57.5||59 - 61|
|EBIT||€ million||17.4||18 - 20|
|%||8.5%||8.5% - 9.0%|
|Free cash flow||€ million||0.2||positive|
In the procurement area, the Board of Management expects prices on commodity and energy markets to rise moderately, with the result that the gross profit margin may decline in the course of the year. Depending on the prevailing market situation, it is not always possible to pass on the resulting effects to customers promptly and comprehensively.
In view of its recent double-digit revenue growth in virtually all markets, technotrans have conduct demand-based recruitment of extra personnel in the operating units. Further expansion in the workforce is envisaged for 2018. The pay increase averaging 3 percent will equally push up personnel costs over the year.
The Board of Management expects the forthcoming activities required to become a European SE to lead to non-recurring effects impacting earnings in the order of up to € 0.5 million in the 2018 financial year. In addition, the forecast for the year does not incorporate any effects from exchange rate movements. With regard to the remaining items of the Consolidated Income Statement, the Board of Management believes changes will be merely on the customary scale.
Achieving an overall EBIT margin of 10 percent remains the target benchmark for our medium-term development. If market requirements should necessitate added investment to achieve this, the Board of Management will act accordingly.
For the Technology segment, the Board of Management expects that the group will again benefit from a healthy business cycle in the various markets and thus achieve organic growth in the high single-digit percentage range.
For the printing industry, the Board of Management is tending towards a cautious outlook. While demand for digital and flexographic printing presses continues to offer growth potential, overall business in the offset area will at best reach the previous year’s healthy level. The group companies again expect to enjoy an improved starting position in the markets of the laser and machine tool industry as well as for stamping and forming technology, yielding higher revenue overall and improved margins for the financial year in progress. For business in the plastics processing industry, too, the outlook for the sector reveals a fundamentally upward tendency. technotrans is planning moderate growth here, with the goal of repeating the outstanding margin of the previous year. Compared to standard business, revenue and profits from project business in the plastics industry show more marked fluctuation. The markets for electric mobility, semiconductors as well as medical and scanner technology are where technotrans continues to target the highest growth rates. The industry environment for such a performance remains positive. The commitment to zero-emissions mobility continues to be an important driver of our strategic decisions for the future.
The Board of Management on the whole expects a positive development in the operating result for the segment.
The Services segment generates a relatively high proportion of the technotrans Group’s overall revenue and therefore plays an important part in its stability. The Board of Management expects revenue in the Services segment to continue rising at a moderate rate thanks to the established installed base and greater use of the worldwide service network. For the Technical Documentation business area, the Board of Management expects revenue growth at least on a par with the 2017 level. This goes hand in hand with the expectation of higher overall earnings for the Services segment, fundamentally enabling the rate of return for the segment to match its 2017 level.
For 2018, the Board of Management expects a healthy operating cash flow thanks to steady income and earnings. Capital spending on property plant and equipment and intangible assets is set to total around € 11.5 million in 2018 (excluding acquisitions). Of this, around € 8.6 million will be spent on the new building for our production location at Termotek GmbH in Baden-Baden. For financing this investment, the Board of Management aims to use the currently positive market window for raising long-term credit in the single-digit millions. technotrans also anticipates further new and replacement investment measures amounting to between € 2.5 and 3.0 million at the German production locations. Our aim is to achieve a positive free cash flow in the 2018 financial year.
The scheduled repayment of the bank liabilities and the dividend payout are to be financed from current cash flow or from available liquidity. technotrans also has unutilised borrowing facilities which, together with the surplus financial resources, provide adequate flexibility for being able to finance current business. As in recent years, the plan for 2018 is to keep the equity ratio steady at above 50 percent.
As before, the Board of Management views acquisitions as an appropriate way of strategically adding to corporate growth and accessing additional future industries. It is continually analysing suitable options.
The prospects for the distribution of a dividend for the 2018 financial year are good: the company has a sound balance sheet structure and the profitability trend is positive. As matters stand the Board of Management would however make a distribution of dividend dependent on plans for any major investment projects that would have a priority claim on financial resources, e.g. a major acquisition, at the time that decision needs to be reached. Given these conditions, we stand by our dividend declaration that we once more intend to distribute half of our consolidated net profit in the future.
For technotrans AG (separate financial statements), the Board of Management expects slight revenue growth in the order of 3 to 5 percent for the 2018 financial year. As matters stand the Board of Management also anticipates an improved financial performance from the higher revenue level. Our goal is to achieve an EBIT margin of 5.5 to 6.0 percent for technotrans AG.