Kapsch TrafficCom : Rekordumsatz im Wirtschaftsjahr 2017/18, Währungseffekte belasteten die Profitabilität, Dividende soll konstant bleiben.

Highlights

• Revenue increase of 6.9% to EUR 693.3 million
• EBIT under pressure, but positive after adjustment for extraordinary effects
• Free cash flow of EUR 33.1 million
• Net credit of EUR 16.2 million
• More than 5,200 employees

'Kapsch TrafficCom is pursuing a growth-oriented strategy and I am therefore pleased to be able to report an increase in revenues for the third year in a row. I am convinced that we can continue this trend', said Georg Kapsch, CEO of Kapsch TrafficCom.

Vienna, June 18, 2018 - Kapsch TrafficCom was able to increase revenues by 6.9% to EUR 693.3 million in the fiscal year 2017/18. This was due to the tolling segment (ETC segment), which grew by 11.4%. The revenues of the 'Intelligent Mobility Solutions' segment (IMS segment) decreased by 4.7%.

The EBIT of EUR 50.1 million was EUR 10.0 million (16.7%) lower than the previous year's figure, but special effects must be taken into account here: EBIT 2016/17 included a positive one-off effect of EUR 3.0 million and the operating currency result (which can only be influenced to a limited extent) of EUR 4.7 million was EUR 9.9 million higher than in fiscal year 2017/18. Adjusted for these two effects, Kapsch TrafficCom achieved EBIT growth in the ordinary course of business in the past fiscal year.

The financial result deteriorated in the current fiscal year from EUR 0.4 million in the previous year to EUR -5.2 million. The main reason was a decline in currency gains of EUR 4.6 million, primarily in connection with the US dollar (USD) and the South African rand (ZAR).

The profit for the period fell by around one third year-on-year to EUR 28.0 million (2016/17: EUR 42.7 million) and the earnings per share to EUR 2.21 (2016/17: EUR 3.35). This development was largely caused by currency losses so that a sustainable weakening of the results should not be expected. Therefore, the Executive Board will propose a dividend of again EUR 1.50 per share to the Annual General Meeting for the 2017/18 fiscal year.

Segment results.

In fiscal year 2017/18, 75.2% of the revenues fell to the ETC segment and 24.8% to the IMS segment.

The EBIT in 2016/17 included a positive one-time effect of EUR 0.9 million.

The revenues in the ETC segment increased by 11.4% to EUR 521.6 million, while segment EBIT fell by 18.3% to EUR 53.5 million. This was mainly due to higher operating currency losses in this segment and lower margins from the projects in the Czech Republic and Austria. Kapsch TrafficCom reduced prices for both projects in the course of a contract extension/new contract award in 2016.

The EBIT in 2016/17 included a positive one-time effect of EUR 2.1 million.

Revenues in the IMS segment decreased by 4.7% to EUR 171.6 million. A major reason for this was the expiration of projects outside the core business, which were taken on as part of the acquisition of the transportation business from Schneider Electric in 2016. At the same time, Kapsch TrafficCom succeeded in significantly reducing losses in this segment. The IMS EBIT amounted to EUR 3.4 million, while the EUR -5.4 million of the previous year even included a positive one-time effect of EUR 2.1 million.

Free cash flow and balance sheet.

While the free cash flow was still negative midway through the year, the payment of receivables, in particular from Austria, Belarus, and Sweden, in the second half of the fiscal year led to a positive value of EUR 33.1 million. As a result, Kapsch TrafficCom can report a net credit of EUR 16.2 million at the end of the fiscal year, despite various acquisitions and the dividend payment of EUR 19.5 million.

The equity ratio as of March 31, 2018 was 37.0% and thus above the value as of March 31, 2017 (35.0%). In the third quarter, Kapsch TrafficCom repaid the 4.25% corporate bond issued in 2010. This led to a sharp increase in the equity ratio as of December 31, 2017 due to the associated balance sheet contraction. In January 2018, the company took advantage of the attractive interest rate level and took out a EUR 50.0 million bank loan with a term of six years and an interest rate of 0.8%. The equity ratio fell again as a result of the extending impact on the balance sheet. The balance sheet total as of March 31, 2018 amounted to EUR 621.1 million (March 31, 2017: EUR 648.8 million).

New business opportunities.

Kapsch TrafficCom worked intensively on the development of a series of potential new projects in the 2017/18 fiscal year and in the first weeks of the new fiscal year. The company sees a large number of potential low-volume projects in all sales regions. The North American market is very dynamic, especially in the area of medium-volume and small-volume orders. There were also more opportunities than normal in the EMEA region - relatively often these were major projects. Some of them Kapsch TrafficCom would approach in a consortium, i.e., it is not mandatory that all upcoming projects will be fully consolidated.

Strategically, the company is pushing ahead with its activities in the future growth areas of 'Smart Urban Mobility' and 'Connected Vehicles.' In the short term, no significant contribution to sales and, in general, a negative EBIT contribution is expected. However, the management is convinced that these two areas address key issues for future traffic management. In order to play a role here in the long term, it is necessary to get involved today in order to occupy the market and actively shape its development.

Outlook.

Revenues should grow by around 10% in 2018/19, whereas business dynamics should increase as the year progresses. Positive factors include the establishment of the nation-wide toll system in Bulgaria, dynamic business in the USA and revenues in connection with the new joint venture in Zambia.

In terms of profitability, the company expects also the EBIT to increase by around 10% in 2017/18.

Medium-term, Kapsch TrafficCom plans to grow in both segments. At the same time, the company aims to raise the Group's EBIT margin to a sustainable level of over 10%. To this end, EBIT in the ETC business is to be maintained well above 10% and EBIT in the IMS business is to be continuously improved. In a good environment, an IMS EBIT of up to 8% appears feasible from today's perspective.

You can find the fiscal year 2017/18 report at: www.kapsch.net/ktc/ir