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Cavotec SA - 4Q14 Report and full year 2014 summary

13:00 / 26 February 2015 Cavotec Press release

Cavotec SA - 4Q14 Report and full year 2014 summary

This is a summary of the 4Q14 report and full year 2014 summary published
today. The complete 4Q14 report and full year summary with tables is available
at Investors should not rely on
summaries only, but should review the complete reports with tables. 

  -- Revenues amounted to EUR 72,209 thousands in 4Q14 an increase of 30.8%
     (4Q13: 55,220).
  -- Adjusted operating result (EBIT) amounted to EUR 9,336 thousands in the
     quarter compared to EUR 937 thousands in 4Q13.
  -- Order Intake amounted to EUR 49,340 thousands in 4Q14, a decrease of 23.7%
     (4Q13: 64,645).
  -- Order Book ended at EUR 100,967 thousands, a decrease of 12.7% compared to
     last year (FY13: 115,713).
  -- Book to bill ratio was 0.95x in FY14 compared to 1.08x in FY13.
  -- The Board of Directors proposes a dividend of CHF 0.05 per share

A comment from our CEO

Cavotec’s 4Q14 performance underlines the strength and potential of the
Company, with revenues for the quarter amounting to a record EUR 72 million, an
increase of 30.8% compared to the same period in the previous year. 4Q14
adjusted operating result (EBIT) amounted to EUR 9 million, compared to EUR 937
thousands in 4Q13. 

The quarter was also characterised by an unprecedented increase in
manufacturing volumes, primarily due to the relatively high percentage of
larger projects. Our manufacturing units were, however, able to meet these
exceptional demands and in doing so, keep delivery schedules and service
standards to our customers. 

The excellent 4Q14 result brings us fully into line with our 2014 guidance,
with FY14 revenues increasing 2.2% to EUR 233 million, (EUR 228 million), and
an adjusted EBIT of 7.6%. Our order book remains strong at EUR 101 million,
comprising a balanced mix of day-to-day business and larger projects. 

Although these results are very encouraging, we will continue to focus on
internal programmes to improve profitability throughout the coming year. Our
profit improvement plan, announced in 3Q14, will continue to play an important
role in re-dimensioning cost structures across the Group. 

Operational highlights

Operational highlights for the quarter included successes for our Airports,
Ports & Maritime and General Industry Market Units (MU). 

In the US, we were awarded a significant project for aircraft manufacturer
Airbus, for the supply of a complete 400Hz power system for the aircraft
manufacturer’s new production facility in Mobile, Alabama. Other major orders
in the quarter included assembly line pit systems for Chinese aircraft
manufacturer Shaanxi, utility pit systems for Hainan Airlines, 400Hz power
supply units for Chicago O’Hare Airport’s new Terminal 5, and hydrant pit
systems for the first phase of a new development at Moscow Domodedovo Airport. 

The uptick in the Airports MU continued with the recently announced order for
the supply of our innovative Sub-freezing DX-Boost Pre-conditioned Air (PCA)
technology for cooling aircraft at the Presidential Flight Hangar at Abu Dhabi
International Airport and at the Oman Air MRO (Maintenance, Repair & Overhaul)
facility at Muscat International Airport. 

Ports & Maritime also registered a strong quarter with several orders for our
new Automatic Plug-in System (APS), which automates the connection of equipment
such as cranes and ships to electrical power. These orders – for applications
in Portugal and Turkey – illustrate the considerable potential APS has in the
Ports & Maritime sector. The unit also won an order to supply MoorMaster™
automated mooring units to a container berth at the Port of Salalah in Oman, as
well as orders for our Panzerbelt container crane power system with a project
for a port in Mexico. 

Our General Industry MU achieved some significant progress in India where we
won our first order in that country from industrial conglomerate ThyssenKrupp
for our innovative cable chain systems. Elsewhere, we received orders from a
variety of customers around the world including in Finland, where we won an
order to supply Radio Remote Control (RRC) units for use with drilling rigs;
and in Argentina we secured a project with a major mining group for the supply
of winder reels, also for drilling machines. 

Looking ahead

Innovation remains an integral part of Cavotec’s capacity to grow in the
future, and we remain committed to developing new technologies that meet our
customers’ needs and supports the expansion of new markets. Growing interest in
both our established and newer innovations, such as MoorMaster™ automated
mooring and Human Operator Interface technologies, underlines the value of our
continuing investment strategy in new technologies. 

Effective financial management plays an important part in bringing Cavotec to
the next level and I’m delighted that Kristiina Leppänen has been appointed as
our new Group CFO, bringing the necessary experience and skills to support
Cavotec’s growth in the years ahead. Kristiina will assume her position on 1
May 2015, taking over from interim CFO Leena Essén. I would like to take this
opportunity to thank Leena for the excellent work she has done, and continues
to do, during her term as interim CFO. 

For 2015, I expect moderate growth in revenues coupled with a strengthening
EBIT margin towards the second half of the year. We also stand ready to resume
our M&A activities once we have fully completed the INET integration, which I
believe will happen by the end of this year. Looking ahead at the coming period
and our longer-term financial targets, I am confident to reiterate our
financial goals of organic growth of 10% CAGR and an EBIT margin of 12% over
the coming years. 

The regions

The Americas recorded a gross operating loss of EUR 682 thousands in the
quarter compared to a loss of EUR 4,468 thousand in 4Q13. This improvement was
mainly thanks to revenues increasing 55.2% to EUR 17,188 thousands. Order
intake increased by 5.1% to EUR 12,696 thousands compared to EUR 12,077
thousands in 4Q13. 

Europe doubled its gross operating result in 4Q14 to EUR 5,878 thousands,
compared to 2,931 thousands in 4Q13. Quarterly revenues increased by 26.7% to
EUR 52,361 thousands (EUR 41,758). Order intake improved slightly with 1.9% to
EUR 45,449 thousands compared to EUR 44,619 thousands in 4Q13. 

The Middle East, Africa & India region recorded a 4Q14 gross operating loss of
EUR 208 thousands, compared to a loss of EUR 27 thousands in 4Q13. This was due
to lower quarterly revenues of EUR 6,816 thousands (EUR 7,754). The region
recorded the strongest increase in order intake across the Group, up 42% to EUR
13,815 thousands. 

Far East & South East Asia region recorded a gross operating result amounting
to EUR 1,548 thousands, compared to a loss in 4Q13. Quarterly revenues
increased by 23.6% to EUR 16,930 (EUR 13,693). Order intake decreased by 50.3%
to EUR 10,565 thousands, with the difference mainly due to a large order for
the Airports MU in 4Q13. 

Oceania recorded a gross operating result of EUR 1,179 thousands, a decrease of
6.3% from EUR 1,258 thousands in 4Q13. Quarterly revenues increased by 11.4% to
EUR 4,189 thousands (EUR 3,760). Order intake also increased, up 4.8% to EUR
4,570 thousands. 

Revenues, earnings and profitability

Quarterly results

4Q14 adjusted operating result, after excluding restructuring and litigation
costs, amounted to EUR 9,336 thousands compared to EUR 937 thousands in 4Q13.
The adjusted operating margin reached 12.9%. This significant improvement is
mainly due to positive volume and pricing development. Profit before income tax
amounted to EUR 8,234 thousands compared to a loss of EUR 436 thousands in
4Q13, thanks to strong invoicing and favourable currency exchange differences.
Net profit amounted to EUR 3,688 thousands compared to EUR 2,497 thousands. 

Full year results

Adjusted operating result, after excluding non-recurring restructuring and
litigation costs of EUR 5,195 thousands (2,003 thousands), amounted to EUR
17,756 thousands in FY14 compared to EUR 12,509 thousands in FY13, an increase
of 41.9%. Revenue from sales had an organic growth of 3.9%, which was partly
offset by negative exchange fluctuations (-1.7%). Operating expenses, excluding
restructuring and litigation cost, increased by 3.6%, mostly due to cost of

Profit before income tax amounted to EUR 16,218 thousands, an increase of 81.4%
compared to EUR 8,940 thousands in FY13. This was mainly due to the positive
currency exchange differences offsetting increasing interest expenses. Net
profit amounted to EUR 10,230 thousands compared to EUR 10,453 thousands in

Cash flow

Operating cash flow in 4Q14 amounted to EUR 896 thousands, compared to EUR
3,543 thousands in 4Q13. Financial activities amounted to EUR 3,753 thousands,
mainly due to the repayment on the credit facility, while in 4Q13 the Group
increased the loans with EUR 562 thousands. Concurrently the Group made several
smaller investments, mostly in land and buildings, with the total investing
activities amounting to EUR 609 thousands in 4Q14 compared to EUR 3,043
thousands in 4Q13. 

Net debt

Net debt amounted to EUR 20,002 thousands in FY14 compared to EUR 36,070
thousands in FY13, mainly due to the positive effects following the capital
increase in 3Q14. 

As a consequence of the increase in profitability and the effects of the
capital increase the leverage ratio improved significantly ending at 1.2x
compared to 2.4x in FY13. Net debt/equity ratio changed to 14.5% from 33.2%. 


On 31 December 2014, Cavotec employed 1,019 full time equivalent employees, an
increase of two employees in the quarter. 

For the full 4Q14 Report and full year 2014 summary please go to: 


For further details please contact:

Michael Scheepers

Group Director, IR & Corporate Communications

+41795024010 or

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