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JD Neuhaus

BAUER AG starts off the Financial Year with a slight Drop in Sales and increased Order Backlog

The BAUER Group closes the first quarter with a decline in EBIT but very high order backlog. The total Group revenues decreased by 5.0% from EUR 410.9 million to EUR 390.2 million, compared to the same period of the previous year. Sales revenues also dropped by 2.3%, from EUR 341.9 million to EUR 334.0 million. EBIT fell from EUR 10.5 million in the previous year to EUR 6.3 million. Earnings after taxfor the Group were EUR -5.0 million, compared to EUR -5.1 million in the previous year.

 

The order backlog in the Group was EUR 1,092.7 million, significantly higher than the previous year at EUR 1,022.6 million and the end of 2019 at EUR 1,027.6 million, which was mainly due to the Construction segment. The order intake increased by 8.4%, from EUR 419.8 million to EUR 455.2 million.

Business segments

With its three segments – Construction, Equipment and Resources – and its broadly diversified business model, the Group operates in more than 110 subsidiaries in some 70 countries around the world.

At EUR 177.1 million, total Group revenues in the Construction segment were up by 4.1% compared to the previous year at EUR 170.2 million. EBIT decreased slightly compared to the previous year to EUR -0.5 million. The order backlog in the Construction segment saw a significant increase of 18.9%, from EUR 545.8 million to EUR 649.1 million. Compared with EUR 638.6 million at the end of 2019, however, there was virtually no change. The order intake rose by 11.2% to EUR 187.6 million, compared to EUR 168.7 million in the previous year.

In the first three months of the year, total Group revenues in the Equipment segment fell by 11.9%, from EUR 185.8 million to EUR 163.8 million, when compared to the same period of the previous year. Sales revenues also dropped by 12.3%, from EUR 125.3 million to EUR 110.0 million. EBIT decreased compared to the previous year, from EUR 8.2 million to EUR 4.8 million. The previous year included a non-operating charge of EUR 4.5 million that was attributable to the earnings-affecting restructuring of a subsidiary, which was transferred from the Resources segment to the Equipment segment. Without this effect, the decrease would have been even more significant. Order backlog in the Equipment segment decreased by 12.8%, from EUR 149.9 million in the previous year to EUR 130.7 million. With EUR 186.2 million, order intake remained at the previous year’s level of EUR 185.8 million.

With EUR 70.7 million, total Group revenues in the Resources segment were slightly higher at the end of the first quarter than the previous year’s EUR 69.1 million, marking an increase of 2.2%. EBIT fell from EUR 2.7 million to EUR 1.5 million. However, the previous year already included the described positive non-operating contribution of EUR 4.5 million. Without this effect, EBIT would have improved by EUR 3.3 million compared to the previous year. In the first three months of the year, the order backlog decreased by 4.3% from EUR 326.9 million to EUR 312.8 million. The order intake rose significantly by 29.2%, from EUR 79.6 million to EUR 102.8 million.

Financing

Due to the loss at the end of 2019, the Group was unable to keep to its covenants agreed with the banks. At the end of April, the company reached an amicable solution concerning financing with the financing partners for the syndicated loan agreements. This is now being discussed with the other financing partners involved to the same extent.

Outlook

"Overall, the key figures for the first quarter in the Construction and Resources segments were not yet heavily affected by the coronavirus pandemic. However, in the Equipment segment we are seeing restraint among customers. There is a glimmer of hope with the sales situation in China, which is noticeably picking up again," remarks Michael Stomberg, Chairman of the Management Board of BAUER AG. "The worldwide effects and potential consequences for business fundamentally entail a significant amount of uncertainty for the current financial year and outlook."

Due to the uncertainties in global equipment sales and the partially disrupted construction operations, the Group reacted with short-time work for some companies in Germany and also initiated corresponding measures in other countries. Short-time work primarily applies to the Schrobenhausen machine production location, but also many areas of construction operations and administration functions.

Although the general situation involves considerable uncertainty, on the basis of the weak business figures for 2019 the Group currently still expects to achieve a slight increase in total Group revenues, a significant increase in EBIT and a significant increase in earnings after tax in the positive area for the 2020 financial year.

Source: Bauer

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