Rosenbauer International : Quarterly results 1/2018

• Decline in revenues of € 162.4 million in the first quarter of 2018; fewer deliveries in Central and Eastern Europe and Asia
• Significant improvement in EBIT thanks to stronger production output compared to the previous year
• Dynamic growth of order intake, management estimates revenues and earnings to be up on the previous year for 2018

As expected, the global economy has carried its momentum into the new year. Correspondingly, the global firefighting industry has also shown steady development in the first three months of 2018. Above all, demand is being driven by countries with continuous procurement or elevated security requirements following natural or terrorist disasters.

Revenues and result of operations
The Rosenbauer Group generated revenues of € 162.4 million in the first quarter of 2018 (1-3/2017: € 181.9 million). While deliveries have declined in some Central and Eastern European and Asian countries, higher volumes were observed particularly in Western Europe and the Middle East. The geographic allocation of revenues to sales areas reads as follows: 28% CEEU area, 12% NISA area, 11% MENA area, 15% APAC area, 31% NOMA area and 3% segment Stationary Fire Protection.

The first three months of the current year once again showed that the first quarter is always significantly weaker in terms of revenues and income. This is partly because the majority of deliveries are usually made in the second half of the year.

Compared to the decreasing consolidated revenues, EBIT was significantly up on the previous year at € 1.1 million (1-3/2017: € -3.1 million) in the first quarter. Increased production output with a higher inventory of finished goods and works in progress and a subsequently better coverage of fixed costs made the main contributions to this. In addition, other expenses fell considerably year-on-year. Consolidated EBT for the reporting period amounted to € 0.9 million (1-3/2017: € -2.8 million).

However, the order intake has grown dynamically over the first three months, amounting to € 236.2 million (1-3 2017: € 207.9 million). Whilst the order intake from countries, which are widely depending on oil and commodity prices and had to shift budget due to persistent conflicts respectively, was declining, other sales areas partly improved significantly.

Financial and net assets position
For reasons specific to the industry, the structure of the statements of financial position during the year is characterized by high working capital. This is due to the turnaround times of several months for vehicles in production. The high intra-year level of total assets of € 673.0 million (March 31, 2017: € 678.5 million) can be attributed in particular to the higher current assets compared to those on balance sheet date December 31, 2017. Current assets were at € 486.5 million (March 31, 2017: € 489.0 million).

Current receivables were down on the previous year's level at € 173.9 million (March 31, 2017: € 183.7 million). The Group's net debt (the net amount of interest-bearing liabilities less cash and cash equivalents and securities) decreased year-on-year to € 211.3 million (March 31, 2017: € 227.4 million).

Owing to the high level of working capital - due to high customer receivables - the intra-year cash flow from operating activities was still negative at € -19.9 million (1-3/ 2017: € -49.7 million).

Outlook
The IMF has recently confirmed its growth forecast for the global economy in 2018 and 2019 with an increase of 3.9%. The greatest uncertainties are growing protectionism and the simmering trade dispute between the USA and China, which could shake market confidence. At the same time, the most stimulating effect for the global economy is the US tax reform.

As shown from past experience, the firefighting industry follows the general economy at a delay of several months and should continue to develop at a stable rate. Rosenbauer closely monitors developments on the different fire equipment markets in order to exploit sales opportunities early on. Sales activities are then stepped up depending on the countries or regions in which greater procurement volumes have been identified. It will continue to focus on efficiency enhancement and cost reduction so that the intended business development has a solid financial basis. Despite the traditionally low capacity utilization at the beginning of the year and the sustained margin pressure in the developed markets, management is aiming to achieve revenues and earnings above the previous year's level.