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Annual Report 2016

Anticipated development of the technotrans group

technotrans reached another important milestone in the year under review and expects further progress with the implementation of its strategic development in the financial year of 2017 that is now under way. The basis for the outlook regarding the development of the individual segments and the group comprises the plans for the individual companies of the technotrans Group.

The 2017 financial year will see technotrans increasingly focus its attention on maintaining or improving its performance in the individual markets. The prospects for success depend to a very great extent on the uncertain economic environment and also on how the integration of the acquisitions progresses. The Board of Management is therefore cautiously optimistic in its outlook for the financial year. For 2017, too, technotrans sets itself the goal of growing faster than the market. The aim is for the portfolio to continue growing organically, with GDP growth in Germany remaining the benchmark. The GDP forecast for 2017 (ifo economic forecast and IfW Institute for the World Economy) is 1.5 percent.

Overall, the Board of Management expects the technotrans Group to achieve revenue of € 185 to € 195 million for the 2017 financial year, assuming a steady development in the world economy. The revenue and earnings planning does not reflect new acquisitions. The operating result should be within a range of € 12.0 to 14.0 million. The EBIT margin for 2017 is expected to be in the range of 6.5 to 7.2 percent. The group plans area also based on a substantial improvement in earnings quality for the acquired companies. The revenue volume and the time required to get the new projects off the ground will in turn materially influence the earnings position. In an effort to see that the many customer projects currently getting under way are completed successfully, we continue to invest in the necessary resources.

Group targets and the segments

  Fiscal year
Forecast 2017
Revenue € million 151.8 185 -195
Technology € million 103.6 131 - 137
% 68%
Services € million 48.2 54 - 58
  % 32%
EBIT € million 9.7 12.0 - 14.0
  % 6.4% 6.5% - 7.2%
Technology € million 2.9
% 2.8% >3.5%
Services € million 6.8
% 14.2% > 14%
Free cash flow € million -12.6 positive

The level of orders at the end of 2016 endorses this planning. In the procurement sphere, technotrans expects the increased purchasing volume from GWK to have a positive impact on the cost of purchased materials ratio, despite rising raw material prices. However there will be a rise in expenditure for personnel. Alongside a higher employee total at the turn of 2016/2017, a pay increase averaging 3 percent is expected.

Given the prevailing economic environment, the Board of Management expects technotrans AG (separate financial statements) to achieve slight revenue growth in the order of 3 to 5 percent in the 2017 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 6.5 percent for technotrans AG.

In the Technology segment we again plan to maintain organic growth for 2017. This assumption is based on a continuing positive development in the markets that technotrans serves. technotrans expects robust demand for digital and flexographic printing presses, while business for offset printing will stabilise at least at the prior-year level. Laser, stamping and forming technology, energy storage technology as well as medical and scanner technology will remain the segment’s growth drivers. We have successfully stepped up our activities in these growth areas in recent years. Additional growth is planned for the segment involving business in the plastics processing industry. The group company GWK will make its first full contribution to the business success of the technotrans Group in 2017. 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 keeping our business stable. We anticipate that revenue for the Services segment will grow further in 2017 thanks to increased use of our worldwide service network by the new group companies. This goes hand in hand with expectations of an improved financial performance.

For 2017, 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 € 10.0 million in 2017 (excluding acquisitions). Around € 7.2 million of this amount will go on the acquisition of the property at GWK’s production location in Meinerzhagen. This capital investment is directly connected to the interest acquired in the past financial year. technotrans also anticipates further new and replacement investment measures amounting to between € 2.5 and € 3.0 million at the German production locations.

These real investments as well as the scheduled repayment of the bank liabilities and the dividend payout are to be financed from current cash flow or from available liquidity of around € million. technotrans also has unutilised borrowing facilities which, together with the surplus financial resources, provide adequate flexibility for being able to finance current business. The plan for 2017 is to keep the equity ratio steady at above 50 percent. Our aim is to achieve a positive free cash flow once more in the 2017 financial year.

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 2017 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.