AUGSBURG, Germany, April 5, 2006 (PRIMEZONE) -- With sales above EUR 460 million and results of more than EUR 17.5 million BOWE SYSTEC Group was able to meet its own prognosis. As the Management Board reported at today's press briefing on annual results, the company achieved consolidated sales of EUR 461.9 million. The net result reached EUR 19.0 million. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS).
In the past few years, the BOWE SYSTEC Group has developed from the European market leader for high-performance inserting systems to a one-stop provider for the automated mailroom with operations throughout the world. One of the key steps in the further development of the BOWE SYSTEC Group in the fiscal year just past, was the full consolidation of BOWE BELL + HOWELL Holdings Inc., USA, during the course of the planned acquisition of the majority stake in the company. The full consolidation had significant effects on the asset, financial and earnings situation of the BOWE SYSTEC Group in the consolidated financial statements.
Sales correspond to own expectations
In fiscal year 2005 the BOWE SYSTEC Group posted sales in the sum of EUR 461.9 million, compared with EUR 307.8 million in the previous year. The increase in the sum of EUR 154.1 million, or 50.1%, compared with the previous year, was primarily the result of the initial full consolidation of BOWE BELL + HOWELL. A rise of EUR 11.8 million or 2.6% was achieved over the comparable sales for the previous year, in other words including BOWE BELL + HOWELL in full. A breakdown into regional segments shows that the full consolidation produced the strongest growth in sales to non-Group companies in the USA (EUR 307.8 million compared with EUR 152.4 million). Europe also succeeded in recording an increase (EUR 92.2 million compared with EUR 81.6 million) whilst the figures for Germany (EUR 44.3 million compared with EUR 48.4 million) and the rest of the world (RoW) (EUR 17.6 million compared with EUR 25.4 million) showed a decrease by comparison with the previous year.
Earnings situation
For the comparison period the application of the International Financial Reporting Standards (IFRS) for the very first time led to differences between the consolidated balance sheet, consolidated income statement as well as the consolidated surplus shown in accordance with IFRS and the corresponding figures for this period shown in accordance with HGB. Fiscal year 2005 at BOWE SYSTEC was characterized by the acquisition of the majority stake in and subsequent full consolidation of BOWE BELL + HOWELL Holdings Inc., USA. As a result of the first full consolidation the figures for fiscal year 2005 provide only for limited comparison with those of the previous year (previous year 50% quota consolidation).
Result after tax reaches new record
The consolidated net surplus for the year reached EUR 19.0 million or 4.1% of sales. The comparable figures for the previous year totaled EUR 10.9 million representing 3.5% of sales. The increase in the consolidated net surplus for the year is attributable in particular to the first-time full consolidation of BOWE BELL + HOWELL. Earnings per share, with a weighted average of 6.6 million shares in fiscal year 2005, came to EUR 2.88 as against EUR 1.66 in the previous year.
At EUR 36.1 million, earnings before interest and taxes (EBIT) posted a rise of EUR 6.8 million compared with EUR 29.3 million in the previous year. In this context, the EBIT return on sales fell to 7.8% compared with 9.5% in the previous year. This reduction in the return can be explained by the initial full consolidation of the USA segment which had previously performed below average in profit terms and by a simultaneous fall in the margin in this segment from 8.8% to 6.1% in 2005. The EBIT for the USA reached EUR 19.1 million (previous year EUR 13.4 million). In the regional segment of Germany the EBIT was increased to EUR 21.1 million (previous year 14.6 million). The return on sales reached 19.9% (previous year 12.9%). In Europe the EBIT came in at EUR 4.4 million (previous year EUR 4.5 million) and the return on sales at 4.7% (previous year 5.5%). In the rest of the world (ROW) an EBIT of EUR 0.3 million was achieved as in the previous year. The contribution to earnings from investments was EUR 1.0 million compared with EUR 1.8 million in the previous year and in 2005 was derived entirely from Lasermax Roll Systems. The balance of interest income and expenses resulted in an expense of EUR 11.1 million compared with EUR 5.7 million in the previous year. This increase is attributable to the marked rise in financial liabilities incurred as a result of the acquisition of additional shares in BOWE BELL + HOWELL and its full consolidation within the Group.
Tax expenses in the fiscal year 2005, at EUR 7.0 million, were markedly lower than in the previous year (EUR 14.5 million). The tax share consequently fell from around 57% to 27%.
Dividends increase to EUR 1.35
Supervisory Board and Management Board of BOWE SYSTEC AG will propose at the Annual General Meeting to be held on June 1, 2006 an increase of the dividend payment by EUR 0.05 to EUR 1.35 per share. The total amount distributed will be EUR 8.9 million. Number of employees increased As at the end of fiscal year 2005 the BOWE SYSTEC Group employed 3,652 personnel, 944 of whom worked in Germany. At the end of the previous year the number of employees was 2,589, a figure which only included 50% of the workforce of BOWE BELL + HOWELL. 926 personnel were employed in Germany.
The number of employees as at the year end increased by 49 on a comparable basis. The increase can be fully explained by the strengthening of the activities in Postal Sorting Systems in Germany and the USA.
Order backlog on record high
In the year 2005 Group order intakes totaled EUR 471.8 million. Compared with the previous year's figure of EUR 326.4 million this represents an increase of EUR 145.4 million or 44.5%. As with sales, the increase is primarily attributable to the initial full consolidation of the US company. The increase, after adjustment for this effect, totaled EUR 2.0 million.
The order backlogs as at the qualifying date December 31, 2005 hold out the promise of a marked improvement in the starting situation for the 2006 fiscal year. Whilst the order backlog as at the end of the 2004 fiscal year was in the total sum of EUR 57.4 million, the order backlog as at the end of the 2005 business year was EUR 95.6 million, consequently showing an increase of 66.5% over the previous year. On the basis of comparable figures the rise compared with the previous year was 11.6%. As a result of the development in the order intake the USA and Germany also accounted for the largest share of the growth in the order backlog. As in previous years, the after-sales service contracts, which are concluded for a longer period of time, were not included in the order backlog. At EUR 216.2 million, they accounted for 46.8% of group sales in fiscal 2005.
Further growth in 2006
BOWE SYSTEC is positioning itself as a total provider of products and services for the automated mailroom. With more and more customers demanding complete mailroom solutions from a single source, BOWE SYSTEC is increasingly reaping the benefits of its wide range of products and services. In collaboration with its partners in the printer industry, BOWE SYSTEC covers the entire product spectrum and all the related services of the automated mailroom.
The sector association, the VDMA, forecasts an improvement in the business climate for the print and paper technology sector for 2006. The positive development of business is likely to primarily be driven by exports. Market observers also anticipate a further increase in mail traffic volumes. The sector also expects to see a marked increase in the demand for postal sorting machines. There are increasing signs of this in the deregulation of the postal markets which is proceeding apace in the European markets. There is also expected to be further, significantly rising demand for postal sorting systems over the coming years. Thanks to the measures taken in recent years to reduce costs, in many areas the BOWE SYSTEC Group has an advantageous starting platform for the current year. As a result of the increase in financial liabilities as a consequence of the expansion of the investment in BOWE BELL + HOWELL, financing costs will show a rising trend.
Taking into account the current market position, current exchange rates and the sharp increase in the order backlog at the beginning of the year by comparison with the previous year, the plan for the 2006 fiscal year forecasts sales of approx. EUR 490 million. The Management Board anticipates an increase in the consolidated net surplus for the year by comparison with the 2005 fiscal year. BOWE SYSTEC Group figures:
BOWE SYSTEC Group figures:
Figures in EUR million 2005 2004 D in %
Sales 461.9 307.8 +50.1
thereof service in % 46.8 48.1 -
Order intake 471.8 326.4 +44.5
Order backlog 95.6 57.4 +66.5
Investments, total 26.1 23.5 +11.1
EBITDA 55.8 42.9 +30.1
Depreciation 19.7 13.7 +43.8
EBIT 36.1 29.3 +23.2
Result from ordinary activities 26.0 25.4 +2.4
Net income 19.0 10.9 +74.3
Cash Flow from ordinary activities 17.8 41.4 -57.0
Equity 143.5 109.1 +31.5
Earnings per share (EUR) 2.88 1.66 +73.5
Dividend per share (EUR) 1.35 1.30 +3.8
Employees (number, annual average) 3,578 2,621 +36.5
Financial Calendar 2006:
Apr 5 Analysts' conference, Frankfurt am Main
Apr 06 Road show in London and Frankfurt
Apr 11 Road show in Paris
May 16 Interim report as of March 31, 2006
Jun 1 Annual Shareholders' Meeting, Augsburg
Jun 2 Dividend payment
Aug 10 Interim report as of June 30, 2006
Nov 14 Interim report as of September 30, 2006
To view the full release visit the following link: http://hugin.info/130395/R/1043307/170391.pdf
BOWE SYSTEC AG
The Management Board