In the 2012 financial year, PALFINGER recorded the highest revenue in the group’s 80-year history. Revenue increased by 10.6 percent, from EUR 845.7 in the previous year to EUR 935.2 million. This increase was supported primarily by the business areas North America, South America, CIS, and the globally operating marine business area. A positive trend was observed in the other non-European regions as well. In Europe, the high revenue level achieved in the previous year was maintained.
“Business development in Europe was marked by rising uncertainty and a decrease in enterprises’ preparedness to invest,” says Herbert Ortner, CEO of Palfinger AG. “We generated our growth in the area units segment, with a 42 percent increase in revenue and, for the first time, a clearly positive result. In the European units segment, the strong performance of the globally operating marine business area made it possible to maintain constant development, at least. The stability of the Group’s result, even though resources were stepped up outside Europe, was due to the measures taken to increase flexibility and cut costs,”
Financial position, cash flows and result of operations
EBIT for the 2012 financial year came to EUR 68.5 million ($91.4 million US), after EUR 67.9 million ($90.6 million US) in the previous year, which corresponds to an increase of 0.8 percent. However, the EBIT margin decreased from 8.0 per cent in 2011 to 7.3 per cent. The reasons for this development included primarily the regional shift in revenue and the lower margins in the non-European areas, which are still at the development stage. The shift in product mix in Europe—from large cranes with a high contribution to earnings to smaller systems—also contributed to the margin becoming lower. The expansion of contract manufacturing brought about a boost in productivity, while at the same time increasing financial flexibility.
The performance of the individual quarters shows the (partly seasonal) fluctuations of revenue (Q1: EUR 223.9 million ($299 million US) ; Q2: EUR 241.2 million ($322 million US); Q3: EUR 223.1 million ($297.8 million US); Q4: EUR 247.0 million ($329.7 million US) and earnings (Q1: EUR 17.7 million [$23.6 million US]; Q2: EUR 19.5 million [$26 million US]; Q3: EUR 14.8 million [$19.8 million US]; Q4: EUR 16.5 million [$22 million US]).
In line with PALFINGER’s dividend policy, which provides that approximately one third of the annual profit is to be distributed to shareholders, the management board has proposed that a dividend of EUR 0.38 (0.50 US) per share be distributed this year (previous year: EUR 0.38 per share).
In the 2012 financial year, cash flows from operating activities amounted to EUR 55.4 million ($74 million US), compared to EUR 37.7 million ($50.3 million US) in the previous year. This change was caused to a large extent by the fact that the rise in net working capital compared to the increase in revenue was lower than in the previous year. Cash outflows for investing activities came to EUR 70.6 million ($94.2 million US), which means that the previous year’s figure of EUR 34.6 million ($46.2 million) was more than doubled. Apart from the payment of the outstanding purchase price from the acquisition of the marine unit of Palfinger systems GmbH, the increase in shares held in Palfinger Russland GmbH and the acquisition of the Dreggen Group in Norway, investments were also made for the purpose of stepping up resources in Europe and the United States. As a consequence, free cash flows were reduced from EUR 11.7 million in the previous year to –EUR 3.1 million ($4.1 million US) in 2012.
Due to the fact that total assets increased, the equity ratio, at 44.8 percent, was lower than in the previous year, when it was 47.7 percent. The issue of a promissory note loan in October 2012 in the amount of EUR 77.5 million contributed to higher net debt. Consequently, the gearing ratio rose to 59.6 percent, as compared to 47.3 per cent on the 2011 reporting date.
Outlook
Palfinger Group’s global orientation enabled the growth recorded in 2012. Management considers this a confirmation of its strategic decision to grow not only in North America but also towards the BRIC countries. PALFINGER’s consistent strategy of internationalization, especially outside Europe, is therefore being continued.
The Chinese joint venture with the Sany Group, which started operations in the third quarter of 2012, will have a positive effect on future business performance. The foundation for a successful entry into the Chinese market was thus laid in time to celebrate the 80th anniversary of the Palfinger Group in 2012, and it is assumed that the group’s leading position worldwide has been sustainably safeguarded through this step.
2013 will also be marked by the new brand architecture. Palfinger regards its strong brand as a major factor for success, alongside the development and manufacture of its premium products. The more precise positioning that has now been defined is intended to guarantee the brand’s value for the future and generate further synergies from its market operations.
Against the backdrop of the uncertain development of the economy and of demand, the visibility of the business was reduced in 2012. Under the current economic conditions, management expects a moderate increase in revenue, coming primarily from the business areas outside Europe and the Marine business area, for the 2013 financial year.
