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Connect Group reports annual results 2013

ANNUAL RESULTS

Sales of EUR 125 million compared with EUR 142 million in 2012.
Profit of kEUR 81 on continuing operations compared with kEUR 168 in 2012 (net of impairment charges).
The total order book at end-2013 of EUR 84 million (EUR 77 million at end-2012).
Total financial debt improved from EUR 19.9 million at end-2012 to EUR 17.7 million at end-2013.

Fall in operating result from continuing operations (before goodwill impairment) from kEUR 1,458 in 2012 to kEUR 671 in 2013.

The net result of 2012 had been positively influenced by, on the one hand, the one-off income of kEUR 4,500 from discontinued operations with the final settlement of the sale of the Automation activity in late 2009 and, on the other hand, by a goodwill impairment of kEUR 1,633.

(in 000 EUR) 2012 2013
Sales 141,638 124,988
Operating result continuing operations before goodwill impairment 1,458 671
Profit / (loss) continuing operations before goodwill impairment 168 81
Goodwill impairment ‐1,633 0
Income discontinued operations 4,500 0
Profit / (loss) of the group 3,034 81

RESULTS 2ND HALF:

Sales of EUR 61.9 million compared with EUR 61.7 million in 2012.
Profit of kEUR 243 compared to a loss of kEUR 1,705 in 2012 (on comparable basis).

Operating result of kEUR 541 compared to kEUR -1,289 (before goodwill impairment) in H2 2012.
The net result of H2 2012 had been significantly influenced by the goodwill impairment of kEUR 1,633, giving a net operating result from continuing operations in H2 of kEUR -2,922 and by the one-off income from discontinued operations of kEUR 4,500 with the final settlement of the sale of the Automation activity in late 2009.

Management discussion and analysis of the results

Luc Switten (CEO) : After the sharp economic downturn in the 2nd half of 2012, the market stagnated during 2013.  We see this clearly in the evolution of our sales figures of the past two years:

H1 2012 H2 2012 H1 2013 H2 2013
79.9 million 61.7 million 63.0 million 61.9 million

After the sharp fall in H2 2012, sales volumes in 2013 stabilized at the level of H2 2012. A key task for Connect Group in 2013 was to restore the group's profitability in the light of this decline.  Our success in this becomes clear when we analyse the Group's operating results on a comparable basis.

H1 2012 H2 2012 H1 2013 H2 2013
+2,746 k -1,288 k +130 k +541 k

On comparable sales, we have succeeded during the last three reporting periods in turning a loss of k EUR 1,288 into a profit of EUR 541 k. 

We believe that 2014 can produce a further improvement for several reasons:

  • The group's overheads have been reduced so as to produce positive results from sales of EUR 125 million upwards.
  • We have won several new customers to end the year with a strong order book of over EUR 84 million. Despite market/customer fickleness with regard to delivery dates, we believe that we can return to growth in 2014.
  • The introduction of our TiaS® (Technology is a Service) programme into the market has been very positively received by our customers. Customers are keen to obtain more technology from us. We see a strong demand for this service and have already logged a number of successes with certain customers that strengthen customer loyalty. We also observe that new customers view this service as an additional argument to order from us.
  • Our focus on specific target markets like Railway and Healthcare is producing clear results. Long-term agreements with a number of customers in these sectors have secured revenue streams for several years out.  This is new for our company. In the past we had at best annual contracts and orders. Today we have contracts running over several years. For the sake of clarity, the order book figure contains only the portion of the contracts to be delivered within the next 12 months.
  • Following the marked improvement in 2012, the balance sheet again strengthened in 2013. Inventories and accounts receivable were under control and financial liabilities have decreased from over EUR 31 million at end-2011 and 19.9 million at end-2012 to 17.7 million at end-2013.

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