- Group sales and profitability in line with the forecast for 2014
- Sales growth of 6.3% to around EUR 346 million
- Improvement in profitability to an EBITDA margin of 6.1%
- At EUR 11.4 million, effects from the correction of errors in accordance with IAS 8 lower than the initially expected amount of EUR 15 million
- New strategic direction “Enabling the Internet of things”
euromicron AG achieved its operational goals for fiscal year 2014. Consolidated revenue increased by 6.3% to EUR 346.3 million (previous year: EUR 325.7 million). Earnings before interest, taxes, amortization and depreciation (EBITDA) rose significantly to EUR 21.1 million (previous year: EUR 8.7 million). The Group EBITDA margin of 6.1% was thus within the projected range of between 6% and 8%. New orders amounted to around EUR 340.1 million in 2014 and thus rose compared to the previous year (EUR 327.7 million). Net income amounted to EUR 2.8 million (previous year: EUR -6.4 million). This equates to earnings per share of EUR 0.36 (previous year: EUR -0.91).
The errors that the company discovered while preparing its 2014 consolidated financial statements that relate to projects realized in 2012 and 2013 added up to EUR 11.4 million in total. This effect is thus lower than the EUR 15 million figure that was initially expected. These errors were corrected in accordance with the requirements of IAS 8 (International Accounting Standard 8) in the 2014 consolidated financial statements by reducing equity. This resulted in a reduction in equity of 2.2 percentage points. As of December 31, 2014, the euromicron Group had a solid equity ratio of 38.4% (previous year: 35.1%).
In light of the technological changes in the market such as “the Internet of Things,” “Industry 4.0” and “Smart Buildings,” the new Executive Board members Bettina Meyer and Jürgen Hansjosten who took office at the end of March 2015 will be strategically realigning the euromicron Group.
The markets that euromicron Group serves are impacted by increasing digitalization of their processes, a trend that gained significant momentum in 2014 and affects euromicron’s customers in all industries. Process digitalization calls for sophisticated holistic solutions that allow for the mainly self-sufficient technologies and infrastructures to interact with one another.
As Bettina Meyer puts it, “Supported by our strong basic business, we will place our strategic focus on this precise trend in the future: holistic solutions for medium-sized companies and larger customers in the growth market the ‘Internet of Things.’ Here, euromicron will focus mainly on the areas “Smart Buildings,” and “Critical Infrastructures.” Both are already core markets for the company. Jürgen Hansjosten, member of the Executive Board of euromicron AG, adds, “In contrast to our previously sales-oriented strategy, our approach is now clearly cash- and earnings-oriented. We plan to extend our technology and solution portfolio to include complementary skills. The goal is to improve our competitiveness even further by focusing on the market demands of the IoT market,” Hansjosten explains.
The Board plans to align euromicron AG’s investment portfolio to suit the new strategic direction and thus further develop synergies between the manufacturing operations and system integrators by the end of 2015. In connection with these efforts, the company also plans to look into whether euromicron will need to dispose of shareholdings that are of lesser importance to the future direction. “Through these measures, we also want to increase the power of innovation inside euromicron AG. By offering innovative complete solutions in addition to individual network components and services, we will be able to clearly differentiate ourselves from the competition over the long term. This means we will ultimately be withdrawing from the commodity category. We expect to be able to generate attractive margins in the years to come by offering sophisticated comprehensive solutions,” says Bettina Meyer.
For fiscal year 2015, the Board expects roughly the same volume of sales as in 2014 of between EUR 340 million and EUR 360 million. A stable EBITDA margin of between 6% and 8% is planned for the operational business in 2015. At the same time, the forward-looking reorganization measures will put pressure on the EBITDA margin and lower it by about one percentage point. The projected EBITDA margin that takes these effects into consideration is therefore expected to be between 5% and 7%.
The Executive Board of euromicron AG is also optimistic beyond 2015. As Jürgen Hansjosten notes, “I am convinced that we will be able to continue in the right direction with the steps planned and put euromicron back on a profitable growth course. After completing the structural measures, our profitability will most likely improve significantly starting in 2016 and result in an EBITDA margin of between 8% and 11% in the medium-term future.”
The complete 2014 Annual Report is available as of today on the company's website under euromicron.de in the section entitled “Investor Relations/Financial Publications.” The company will most likely publish its report on the first quarter of 2015 in mid-June 2015.
About euromicron
euromicron AG (www.euromicron.de) is an all-round solution provider for communications, transport, data and security. 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 and 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 fast growing, highly profitable group that is listed on the stock market, has a medium-sized character and focuses on operational growth, integration, further market penetration, internationalization and expansion.