- Consolidated sales grow by 23% to around €74.2 million (previous year: €60.3 million)
- Consolidated EBIT likewise increases by some 23% to €3.5 million (previous year: €2.8 million)
- EPS of €2 still the target
euromicron (ISIN: DE0005660005) has continued its fine trend from the past fiscal year in the first half of 2008. Sales and earnings increased in line with our expectations and our order books are nicely full. “In euromicron’s markets, we do not perceive any signs of a slackening in the dynamic demand for intelligent and high-speed network infrastructure,” says Dr. Späth, Chairman of the Executive Board.
“Industry and the public sector alike continue to invest highly in powerful networks for transporting voice, data and video.”
Further steps in the Group’s structural realignment were undertaken. Apart from acquisition of the remaining 20% stake in Hartmann GmbH and BCK GmbH and the merger of Hartmann GmbH with euromicron solutions GmbH retroactively per January 1, 2008, Engel & Co. Schwerin GmbH and Telecom Partner in Berlin GmbH were also merged with euromicron systems GmbH effective January 1, 2008.
The buy and build strategy was also continued. Effective June 11, 2008, euromicron was able to acquire 80% of the shares in NetWays Network Consulting GmbH, Ettlingen, a specialist in active network technology. “As a result, we have been able to plug the final gap in our portfolio of products and services in Southern Germany,” says Dr. Bernardi, the board member in charge of Market, Technology and Operations.
Consolidated sales
Consolidated sales increased in the first half of the year to €74.2 million (previous year: €60.3 million), a rise of around 23% over the comparable figure for the previous year. Some 13% of this increase is accounted for by the companies acquired in 2007, whereas the “old” companies generated organic growth of some 10%. The focus of the euromicron Group’s commercial activity remains the German market, with 84% of sales. In the neighboring countries of the Euro zone, the Group posted around 14% of consolidated sales, a year-on-year increase of 77%.
Consolidated income
In the first six months, the euromicron Group posted earnings before interest and taxes of €3.5 million, a rise of some 23% over the comparable figure for the previous year. Operating income of the associated companies was €5.9 million, compared with €5.3 million at the same time a year ago. Earnings per share (undiluted) rose from €0.38 in the previous year to €0.40 at June 30, 2008.
Order situation at the Group
The euromicron Group recorded new orders of €67.4 million in the first six months, versus €63.3 million for the same period in the previous year. Order books at June 30, 2008, were €78.6 million, around 37% up year-on-year. This, together with the sales achieved in the first half, means that we still stick by our forecast for 2008.
Balance sheet structure
The balance sheet at June 30, 2008, shows total assets of €141.1 million, a reduction of 4.7% from December 31, 2007. On the assets side, noncurrent assets rose from 56.2% to 60%, essentially as a result of the increase in goodwill. The ratio of equity and long-term outside capital to assets is still more than 100%. On the liabilities side, the ratios have likewise not changed significantly compared with the balance sheet at December 31, 2007.
Personnel
The euromicron Group employed an average of 881 people in the first half of 2008, an increase of 10% year-on-year. The companies of the euromicron Group currently have 55 trainees, 7 more than in the previous year.
Stockholders’ equity
Due to the dividend of €3.6 million paid for fiscal 2007, stockholders’ equity fell from €70.4 million at the end of fiscal 2007 to €67.1 million at June 30, 2008. The equity ratio was 47.5%, at the level of December 31, 2007.
The share
After starting on January 1, 2008, at a price of €19.00, euromicron’s share fell sharply in the 1st half of the year in the wake of the financial crisis in the USA and associated slides in prices on all stock markets worldwide and the continuing weakness of small-cap companies. A brief recovery in its price in the 2nd quarter did not last long, since pressure on stock markets remains very high. The financial market analysts who accompany us continue to regard the share as undervalued and still rate it a “buy”.
Outlook
The Executive Board expects euromicron’s business to keep on developing well in the second half of the year. Traditionally, the second half is far stronger at the euromicron Group, since the large part of its business with large customers from industry and the public sector is generated in the last six months of a year. The good order situation and high order books confirm this view and underpin our forecasts for 2008 to a large part. No risks for the current fiscal year are actually seen from a weakening in economic dynamism. The results of operations and net cash provided by operating activities will improve significantly in the second half.
The buy and build strategy will be continued in the coming months, as well the group’s structural realignment. Further mergers of Group companies have been initiated. In principle, these integration measures are always geared to market and customer circumstances.
“We are convinced that we have taken the right path with our strategy,” says Chairman of the Executive Board, Dr. Späth, “in order to give customers, the market and investors a high degree of constancy in an increasingly insecure economic environment and to show them perspectives.”
euromicron AG (www.euromicron.de) is one of the leading solution providers of communications systems and security networks and boasts production expertise in the field of fiber optics technology.