Tognum AG  / Key word(s): Quarter Results

03.11.2010 07:30

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Tognum after 9 months: 2010 revenue forecast raised * Order intake at EUR2,039.5 million is around 20% above revenues of EUR1,698.2 million
* Adjusted EBIT margin increases from 6.6% to 9.0% * Full year 2010: revenue forecast raised, margin forecast refined upwards
Key figures for the Tognum Group

In EUR million (except *) 9M 2009 9M 2010 Change Q3 2009 Q3 2010 Change Order intake 1,764.1 2,039.5 15.6% 488.2 650.0 33.1% Revenues 1,765.2 1,698.2 -3.8% 526.0 612.2 16.4% EBIT (adjusted) 115.9 153.2 32.2% 32.9 56.2 70.8% EBIT margin (adjusted)* 6.6% 9.0% 2.4pp 6.3% 9.2% 2.9pp Net profit (adjusted) 67.4 86.7 28.6% 16.5 33.9 105.5% Earnings per share* 0.51 0.66 29.4% 0.13 0.26 100.0% Free cash flow 143.7 103.7 -27.8% 78.5 18.0 -77.1% Equity ratio* 26.3% 27.6% 1.3pp 26.3% 27.6% 1.3pp Gross profit margin 24.2% 28.3% 4.1pp 23.6% 27.4% 3.8pp (adjusted) *
Employees*(end of period) 9,018 8,998 -0.2% 9,018 8,998 -0.2%
Friedrichshafen, 3 November 2010. The specialist for propulsion and power solutions Tognum reports a continued positive development of the business situation at the end of the first nine months of 2010. Order intake is around 20% above revenues, and the adjusted EBIT margin has increased significantly compared with the same period last year. In its core business - not including the Rotorion activities that were sold in October 2009 - Tognum reported a slight increase in revenues; taking Rotorion into account, this results in a marginal decline in revenues.
The company has raised its revenue forecast for the full year and refined its margin forecast upwards. Tognum now anticipates revenues of around EUR2,550 million for 2010 as a whole. The earnings now expected, based on the adjusted EBIT margin, will be within the upper range of the previously forecast corridor of 7.5 to 9%.
'Demand in the first nine months of the year has developed more positively than we had expected at the beginning of the year', explains Volker Heuer, CEO of Tognum AG. 'As we see 2010 as a year of transition for us, we are looking ahead to 2011 with confidence based on further stable economic development.'

High order intake and increasing revenues in core business The order intake in the company's core business - not including the Rotorion activities - were up 22.4% in the first nine months of the year to EUR2,039.5 million (Q1-Q3 2009: EUR1,764.1 million). Taking Rotorion into account, the increase amounts to 15.6%. The growth is due primarily to the positive performance reported in the Onsite Energy & Components segment, particularly in the supply business with OEM customers. Revenues in the core business - not including the Rotorion activities - were up 1.9% to EUR1,698.2 million. Taking Rotorion into account, there is a slight decline in revenues of 3.8%.

Significant increase in adjusted EBIT and adjusted EBIT margin The adjusted EBIT increased significantly in the reporting period by 32.2% to EUR153.2 million (Q1-Q3 2009: EUR115.9 million). The main reason for this increase was the improved capacity utilisation. Expenditure for research and development increased as planned in the first nine months of the year by 14.8% to EUR117.3 million (Q1-Q3 2009: EUR102.2 million). With these investments in the future, the company intends to further increase its technological edge with new engines and systems. The adjusted EBIT margin increased to 9.0% (Q1-Q3 2009: 6.6%).

High gross profit margin and increase in adjusted group earnings An adjusted gross profit of EUR481.0 million (Q1-Q3 2009: EUR427.5 million) results in an adjusted gross profit margin in the reporting period of 28.3% (Q1-Q3 2009: 24.2%). Adjusted group earnings were up 28.6% to EUR86.7 million (Q1-Q3 2009: EUR67.4 million). The adjusted earnings per share amount to EUR0.66 (Q1-Q3 2009: EUR0.51).

 
Stable equity ratio and reduced net financial debt The equity ratio at the end of the first nine months remains unchanged at 27.6% (31 December 2009: 27.6 %). Net financial debt was down 21.5% compared with the level of last year's balance sheet date to EUR150.8 million (31 December 2009: EUR192.2 million). Free cash flow in the first nine months was down 27.8% to EUR103.7 million compared with the same period last year (Q1-Q3 2009: EUR143.7 million).

Improved performance in all reporting segments
All three reporting segments - Engines, Onsite Energy & Components (OE&C) and Distribution - improved their performance in the first nine months of the year.

Revenues in the Engines segment in the reporting period amounted to EUR1,158.1 million and were thus 0.4% above the level reported for the same period last year (Q1-Q3 2009: EUR1,153.9 million). While declines in revenues in the Marine application area were reported in the yacht and commercial marine business, government business performed positively. In the Oil & Gas application area, as a result of increased investment activities and the rise in raw material prices, there was a disproportionately high increase in revenues. Revenues were down in the Defense business, as projects have come to an end and there are no new projects of any significance ready for completion in the current year. After Sales/Other business continued to make a major contribution to growth. The adjusted segment EBIT saw a sharp increase of 67.5% to EUR130.0 million in the first nine months (Q1-Q3 2009: EUR77.6 million).
The OE&C segment- not including the Rotorion activities - reported a significant increase in revenues in its core business of 20.4% to EUR525.9 million in the reporting period. Taking Rotorion into account, there is a slight decline in revenues of 1.7%. In the OE Diesel Systems & Engines application area, the supply business with OEM customers was extremely positive, whereas business in diesel systems, due to the weak North American market, remained restrained. The adjusted segment EBIT was up 6.5% to EUR26.4 million (Q1-Q3 2009: EUR24.8 million).

The revenue volume of the Distribution segment in the first nine months of the year increased by 12.8% to EUR364.4 million (Q1-Q3 2009: EUR323.1 million). The adjusted segment EBIT saw a slight increase of 3.4% to EUR30.2 million (Q1-Q3 2009: EUR29.2 million).

Forecast for 2010
Tognum has raised its revenue forecast for 2010 as a whole and has refined its margin forecast upwards. This is based on the positive development of the order intake to date and more detailed information available for the remaining quarter.

For 2010 as a whole, the company now anticipates revenues of around EUR2,550 million. This is due primarily to current orders with delivery dates in the fourth quarter of 2010 and in particular on the high demand in the application areas of decentralised power distribution, in addition to agricultural and industrial equipment.

Tognum expects the adjusted EBIT margin to be within the upper range of the previously forecast corridor of 7.5 to 9%. This is due to the improved capacity utilisation and the application mix combined with increasing R&D expenditure. With a tax rate of around 30 to 32%, the company forecasts very positive adjusted earnings per share. Tognum continues to expect revenues to outperform market growth in the medium term.
The interim report for the first nine months of 2010 is available for download at www.tognum.com under Investors.
 

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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, propulsion systems and 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, stationary fuel cells up to 345 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, fuel cells and gas turbines that generate both power and heat.
In 2009, Tognum generated revenue of EUR2.5 billion and employs more than 8,700 people. Tognum has a global manufacturing, distribution and service structure with 27 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 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




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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
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