Consent to the authorized capital 93.79% / to conversion to registered shares 99.56% / to buying back treasury shares 80.79%
euromicron AG, a leading provider of network and fiber optic technology, recorded the most successful fiscal year in its history in 2010. Sales increased in the past fiscal year by 13 percent to €203.6 million, while consolidated earnings before interest and taxes grew in 2010 by around 23 percent to €20.1 million. The Group’s EBIT margin was 9.9 percent and earnings per share rose from €2.17 to €2.38.
The General Meeting on June 9, 2011, gave overwhelming backing to the policies and strategy of euromicron AG and its management bodies. The Executive Board and Supervisory Board were granted discharge by a big majority, while the Supervisory Board was reelected with just under 96% and 99% of the votes and so will embark on its second term of office. The vote in favor of approving the authorized capital was 93.79%, while that for the buyback of treasury shares was 80.79% and for conversion to registered shares 99.56%. PricewaterhouseCoopers (PWC) was appointed as the independent auditor for 2011.
Excellent outlook for 2011
The company has made an extremely positive start to 2011. The euromicron Group generated sales of €57.5 million in the first quarter of 2011, a rise of 27% year-on-year. Its total operating performance increased over the same period from €47.8 million to €58.4 million. The Group’s order books also indicated excellent prospects: They were around €130 million in the first five months of 2011 – the highest level in the company’s history. As Dr. Willibald Späth, Chairman of the Executive Board, noted “contracts have already been signed for a large part of the sales that will bring euromicron closer to achieving its target of €300 million for the year as a whole.”
Successful share
In addition, the capital market is also increasingly rewarding the company’s growth and earnings strength – as well as the continuity in its strategy. Despite the turbulent crisis-ridden 2009, euromicron’s share bucked the market trend sharply right at the start of 2010, euromicron’s share has clearly outperformed the SDAX and TecDAX indexes and has risen by more than 38 percent since the beginning of the year. It has benefited not only from the company’s good numbers, but also from the change in shareholder structure: The free float increased to more than 80 percent, thus reducing the uncertainty that recently weighed on the share. 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 up to 50 percent of the operational part of the earnings per share to shareholders; the General Meeting adopted a resolution to pay a dividend of €1.10 per share for fiscal 2010 – giving a computed dividend yield of around six percent.
As Späth went on to explain, the company had successfully optimized its structure of financing with the goal of ensuring a policy of reasonable outside debt and a stable capital base: In 2010, for example, the company paid an average rate of interest, including the margin, of 1.9 percent for around €50 million in short-term funding thanks to its top rating. Further steps to optimize the capital structure were use of the approved capital in April 2010, which injected around €7.5 million of fresh equity into the company, as well as the successful sale of treasury shares in December 2010. As a result, the equity ratio has risen to 45.5 percent, which will strengthen the capital structure and increase the company’s financial flexibility for the next stage in its development.
Foundation laid for sustainable growth
Integration of competences, personnel, processes, technology and structures at the company was again successfully accomplished in 2010. All in all, the past year was therefore an influential one, not only for the Group’s integration, but also for the company’s future positioning in the market. In line with market requirements, euromicron has constantly reviewed its portfolio of products and services and, for instance, sharply increased its development expenditure. As a result, euromicron already delivers solutions that are required in the markets of tomorrow, such as the energy industry, the healthcare sector or in the field of mobility.
In this connection, euromicron also actively seized opportunities last year to round out its portfolio with strategic acquisitions. Such opportunities arose in Germany with the purchase of the Avalan Group and in the international arena with the acquisition of the former Leoni NBG and Leoni WCS. The Avalan Group enabled euromicron to strengthen its footprint in Saarland and gain access to the Luxembourg market. The takeover of the two Leoni companies has further strengthened euromicron’s commitment in Austria. euromicron thus continues to pursue its strategy of gradual expansion into foreign markets.
Profitable expansion in 2011
In order to underpin the company’s long-term strategy, euromicron is committed not only to integration and development, but highly profitable expansion. Consequently, the objective of its activities in fiscal 2011 is to ensure the Group grows sustainably and profitably, with “our sights firmly set on the €300 million sales mark,” said Späth. Management’s declared goal is to keep euromicron fit not only technologically, but also financially and in terms of its ability to make acquisitions, with an eye to future markets and partnerships.
That means the company’s financing will be geared more strongly to the long term. In the past four weeks, for example, euromicron has placed borrower’s note loans to an amount of approximately €20 million; the response has been great and there are already verbal pledges to subscribe. As a result, according to Späth, the company’s financing “will be long term to a total of around 40 percent in future and will make it more independent from possible deteriorations in the area of short-term financing.”
In addition, the announced acquisition process for a large target was successfully completed with the purchase of telent GmbH Deutschland. The company, a system integrator and technology service provider for telecommunications networks, is an ideal complement to the euromicron Group’s WAN and railway network business. Along with organic growth and national and international partnerships, this acquisition will help the company achieve the €300 million mark for annualized sales.
euromicron AG (www.euromicron.de) is an all-round solution provider for communications, data and security networks. Its 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 now 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.