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DGAP-News: Tognum AG: Tognum 2010: company's performance better than expected


Tognum AG / Key word(s): Final Results

10.03.2011 / 07:30

Tognum 2010: company's performance better than expected
The 2010 annual report is available for download at www.tognum.com. The annual press conference will be held today at 10:30 am, followed by the analyst call at 2:00 pm.

* Revenue forecast of EUR2,563.6 million met in full - 6.0% increase in core business
* Adjusted EBIT margin up from 7.9 to 9.4% - exceeded margin forecast * Dividend proposal: EUR0.50 per share (2009: EUR0.35 per share) * Forecast 2011: increase in revenues of at least 10% and adjusted EBIT margin of around 10% expected

Friedrichshafen/Stuttgart, 10 March 2011. The specialist for propulsion and power solutions Tognum in 2010 has grown significantly again, in terms of both revenues and the adjusted EBIT margin. The company is therefore proposing an increased dividend payout of EUR0.50 per share (previous year: EUR0.35 per share). For 2011, Tognum expects a further increase in revenues and margins.

'Tognum closed 2010, a year of transition, with an impressive record,' explained Volker Heuer, CEO of Tognum AG. 'In the second half of 2010 in particular, we picked up speed and met our forecast for the full year, and even exceeded the forecast in the case of the margin. We have emerged from the crisis in a strong position and are now looking ahead to the current financial year with confidence. For 2011, we expect to see an increase in revenues of at least 10% with an adjusted EBIT margin of around 10%.'
High order intake and significant increase in revenues in core business - revenue forecast met in full
The order intake in the company's core business - excluding the Rotorion activities - was up 27.5% in the 2010 financial year to EUR2,830.5 million (previous year: EUR2,330.4 million). Taking the Rotorion activities into account, the increase amounts to 21.5%. Revenues in the core business - here again, excluding the Rotorion activities - were up 6.0% to EUR2,563.6 million (previous year: EUR2,529.4 million). Tognum has thus met in full the revenue forecast it had raised in November 2010. With Rotorion activities included, this has resulted in an increase in revenues of 1.4%. The export ratio was up once again in the reporting period to 81.3% (previous year: 80.9%). As in the previous year, an increasingly large share of the company's revenues is attributable to Asia.
Profit target exceeded: adjusted EBIT margin increases to 9.4% The adjusted EBIT increased significantly in 2010 by 21.9% to EUR242.1 million (previous year: EUR198.6 million). The main reasons for this increase were primarily improved capacity utilisation, the increased efficiency and a moderate increase in costs. Expenditure for research and development increased in 2010 - not including effects related to the exit from the activities in fuel cell technology - as planned by 15.3% to EUR164.5 million (previous year: EUR142.7 million). Taking these effects into account, R&D expenditure increased to EUR186.9 million. With these investments in the future, Tognum intends to further increase its technological edge with new engines and systems. The adjusted EBIT margin increased to 9.4% (previous year: 7.9%). This means that Tognum exceeded the margin target for the full year that had been revised upwards in November 2010.

Significant increase in adjusted gross profit margin and adjusted net profit
With an adjusted gross profit of EUR704.2 million (previous year: EUR624.3 million), a significant increase in adjusted gross profit margin of 27.5% results for 2010 (previous year: 24.7%). The adjusted consolidated net profit also saw a strong increase of 31.2% to EUR159.2 million (previous year: EUR121.3 million). This results in adjusted earnings per share of EUR1.21 (previous year: EUR0.92). Tognum continues to pursue the dividend policy that was laid down at the IPO of paying out 30 to 50 per cent of the adjusted net profit. The supervisory board and the executive board will therefore propose at the annual general meeting to be held on 11 May 2011 that the dividend of EUR0.35 per share for the previous year will be increased to EUR0.50 per share for 2010.

Stable equity ratio and reduced net financial debt Tognum has sufficient financial strength available to pursue its strategic goals with vigour. Due to the high cash flow from operating activities, net financial debt was significantly reduced to EUR57.2 million (previous year: EUR192.2 million). Free cash flow was down 10.8% to EUR199.4 million (previous year: EUR223.6 million). The equity base developed positively in the course of the 2010 financial year. The equity ratio was 26.8% (31 December 2009: 27.6%).

All three segments continued to grow
All three reporting segments - Engines, Onsite Energy & Components (OE&C) and Distribution - improved their performance in the 2010 financial year.
The Engines segment increased its revenues by 4.6% to EUR1,758.1 million (previous year: EUR1,680.5 million). While declines in revenues in the Marine application area were reported in the yacht and commercial marine business, government business was stable. In the Industrial application area, all subsegments performed positively. As a result of increased investment activities and the rise in raw material prices, there was a disproportionately high increase in revenues in the Oil & Gas application area. Revenues were down in the Defense business, as projects came to an end as scheduled and there were no new projects of any significance ready for completion in 2010. After Sales/Other business continued to make a major contribution to growth. The adjusted segment EBIT margin increased significantly in the 2010 financial year to 10.6% (previous year: 8.1%).
The OE&C segment reported a significant increase in revenues in its core business - excluding the Rotorion activities - of 22.0% to EUR742.6 million in the reporting period (previous year: EUR719.1 million). Taking Rotorion into account, there is an increase in revenues of 3.3%. In the OE Diesel Systems & Engines application area, the supply business with OEM customers in all regions was very positive, while business in diesel systems was stable. The adjusted segment EBIT margin increased to 4.4% (previous year: 3.8%).

The revenue volume of the Distribution segment in 2010 was up 13.4% to EUR594.2 million (previous year: EUR524.1 million). The adjusted segment EBIT margin remained constant at 9.5% (previous year: 9.5%).
Increase in number of employees
At the end of 2010, the Tognum Group employed 9,046 people. Of the 7,375 employed in Germany, 6,013 alone are at the Friedrichshafen location. In 2010, Tognum increased the size of its workforce by a total of 532 new employees.

Continuation of the successful strategy focusing on sustainable growth 'At Tognum, all signs show we're going for growth,' CEO Heuer emphasises. 'With our balanced business portfolio and our proven growth strategy, we will benefit strongly in the current year from the recovery of our markets.' Tognum will continue to implement its five strategic growth initiatives, which focus on the optimisation of its product portfolio, system expertise in propulsion systems and in distributed energy systems, the enhancement of its after sales portfolio and decentralisation through regional expansion. The company's stated goals include the strengthening of its innovation power. To this end, Tognum intends to maintain research and development expenditure in 2011 close to the level of the previous year at 6 to 7% of revenues.

In the year just ended, Tognum had already continually invested in the internationalisation of its production capacity, opening a new engine plant in Aiken, South Carolina/USA, for example, and a new genset plant in Datong/China. In addition, work at the new development centre in Pune/India has already begun.

'In 2012, we again expect to see a positive performance in our end markets, stimulated by rising raw material prices and an increasing demand for transport, in addition to a growing structural demand for distributed energy systems,' says Heuer. 'In view of these trends, we intend to grow faster than the market, while achieving an adjusted EBIT margin in excess of 10%.'

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Tognum's latest annual report, including a letter from the CEO to shareholders, customers and business partners, plus the consolidated and individual financial statements for the 2010 financial year is available for download on the company's website at www.tognum.com under 'Investors'.
 
Key figures for the Tognum Group 
(EUR million as of 31 December 
if not otherwise indicated) 2009 2010 Change Order intake 2,330.4 2,830.5 21.5% Revenues 2,529.4 2,563.6 1.4% EBIT (adjusted) 198.6 242.1 21.9% EBIT margin (adjusted) 7.9% 9.4% 1.5 pp Net profit (adjusted) 121.3 159.2 31.2% Earnings per share (adjusted) EUR0.92 EUR1.21 31.5% Dividend EUR0.35 EUR0.50 42.9% Balance sheet total 2,469.3 2,745.7 11.2% Equity 680.5 735.8 8.1% Equity ratio 27.6% 26.8% -0.8 pp Net financial debt 192.2 57.2 -70.2% Free cash flow 223.6 199.4 -10.8% Employees 8,726 9,046 3.7%

- End -

Press photos can be downloaded from the Tognum website at www.tognum.com/press

Tognum
With its two business units, Engines and Onsite Energy & Components, the Tognum Group is one of the world's leading suppliers of engines and propulsion systems for off-highway applications and of distributed energy systems. These products are based on diesel engines with up to 9,100 kilowatts (kW) power output, gas engines up to 2,150 kW and gas turbines up to 45,000 kW.
The product portfolio of the Engines business unit comprises MTU engines and propulsion systems for ships, for heavy land, rail and defense vehicles and for the oil and gas industry. The portfolio of the Onsite Energy & Components business unit includes distributed energy systems of the brand MTU Onsite Energy and fuel-injection systems from L'Orange. The energy systems comprise diesel engines for emergency standby power, prime power and continuous power, as well as cogeneration power plants based on gas engines and gas turbines that generate both power and heat. In 2010, Tognum generated revenue of around EUR2.56 billion and employs more than 9,000 people. Tognum has a global manufacturing, distribution and service structure with 25 fully consolidated companies, more than 140 sales partners and over 500 authorized dealerships at approximately 1,200 locations. The shares of Tognum AG (ISIN: DE000A0N4P43) have been stock-exchange listed since 2007 and are included in the MDAX.


Disclaimer
Forward-looking statements 
This release contains forward-looking statements based on assumptions, forecasts and estimates made by Tognum's executive board of management. Although we assume that the assumptions, forecasts and estimates forming the basis for these forward-looking statements are realistic, we cannot guarantee that they will prove to be correct in the future. Assumptions, forecasts and estimates may entail risks and uncertainties which may cause actual results to differ considerably from those included in forward-looking statements. Factors which may result in such discrepancies include, among other things, changes in the economic and business environment, fluctuations in exchange and interest rates, the introduction of competing products, lack of acceptance for new products or services and changes in corporate strategy. Tognum undertakes no obligation to update and/or to correct and/or to confirm forward-looking statements or to release publicly any updates or corrections to any forward-looking statements in order to reflect events or circumstances which occur after the date of this release.

Contact:
Contact for the media:
Julia Löffelsend
Phone / E-mail: +49 7541 90-3989 / pr@tognum.com

Contact for analysts and investors:
IR Team
Phone / E-mail: +49 7541 90-3318 / ir@tognum.com


End of Corporate News

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10.03.2011 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
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Language: English Company: Tognum AG Maybachplatz 1 88045 Friedrichshafen Deutschland Phone: +49 (0)7541 90 3318 Fax: +49 (0)7541 90 90 3318 E-mail: ir@tognum.com Internet: http://www.tognum.de ISIN: DE000A0N4P43 WKN: A0N4P4 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart  
 
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