Schaltbau Holding AG finishes 2020 at upper end of forecast, Strategy 2023 presented, capital measure secured

Munich, 1 March 2021 - Today, the Executive Board of Schaltbau Holding AG [ISIN: DE000A2NBTL2] published its preliminary results for the fiscal year 2020.

Order intake for the fiscal year 2020 totalled EUR 538.3 million, equivalent to 1.1% growth on a like-for-like basis. Schaltbau achieved Group revenue of EUR 502.3 million. Excluding the corporate entities Alte and the Sepsa Group, which were divested in 2019, revenue grew organically by 2.1%, despite the COVID-19 pandemic. The EBIT margin came in at 4.3%. Order intake, Group revenue and the EBIT margin are therefore all at the upper end of the recently announced forecast for the fiscal year 2020.

"With our targeted countermeasures we came through the COVID-19 pandemic crisis year very well," said Dr Jürgen Brandes, CEO of Schaltbau Holding AG. "The Schaltbau Group's current portfolio structure proved particularly robust throughout the crisis. All our units continue to work vigorously on the measures we have adopted in order to bring about a sustainable increase in the Group's profitability while maintaining moderate growth."

Pintsch: "Digital interlocking" project from the Corona Economic Stimulus Package Fast Track Programme reflected in order intake

Current developments in the Pintsch segment are highly positive. Order intake rose sharply by 48.3% to EUR 112.1 million, resulting in a very healthy book-to-bill ratio of 1.5. The substantial rise in order intake is due in particular to a major order received from DB Netz AG in the fourth quarter to pilot a digital interlocking system. Segment revenue went up by 4.6% to EUR 75.8 million, partially driven by brisk demand for level crossing systems, axle counting systems and products related to digital interlocking technology. Segment EBIT of EUR 3.9 million (2019: EUR 2.4 million) achieved in the fiscal year 2020 was driven by the higher level of revenue and a positive one-off effect from the deconsolidation of Pintsch Brasil. The EBIT margin came in at 5.2% (2019: 3.3%) for the reporting period.

Bode: Growth despite weak demand in Bus and Automotive business

Order intake totalled EUR 250.9 million, 8.7% down on the previous year on a like-for-like basis).

Adjusted for Alte and the Sepsa Group, both of which were deconsolidated in 2019, revenue generated by the Bode segment rose by 3.6% to EUR 257.3 million. Segment EBIT decreased to EUR 4.2 million in 2020 (2019: EUR 6.9 million on a like-for-like basis). The EBIT margin for the segment therefore stood at 1.6% (2019: 2.8% on a like-for-like basis). The main reasons were the product and customer mix in the Bus and Automotive lines of business as well as temporary drops in productivity due to the COVID-19 pandemic. Moreover, the previous year's figures included a significant insurance sum paid out to the German company Bode to compensate for flood damage.

Schaltbau: Results adjusted for one-off effects robust despite COVID-19 pandemic

Order intake totalled EUR 139.3 million, 12.9% down year-on-year. The book-to-bill ratio stood at a solid 1.0 for the period under report.

Revenue for the Schaltbau segment decreased by 9.7% to EUR 139.5 million, strongly affected by a worldwide slump in demand across all product groups and in all relevant markets on account of the COVID-19 pandemic. The development led to a drop in order intake from OEMs and rail market customers, particularly in China and the USA as well as on European markets. In line with the lower level of revenue, segment EBIT decreased to EUR 19.7 million (2019: EUR 24.2 million). In 2020, the segment EBIT margin again came in at an above-average level of 14.0% (2019: 15.6%) on the back of targeted cost-cutting measures introduced to mitigate the impact of the COVID-19 pandemic. The impairment loss recognised in 2020 on goodwill relating to SPII S.p.A. totalling EUR 5.1 million was the main reason for the drop in earnings.

SBRS: Highly dynamic growth with charging infrastructure for electric buses and e-mobility

Order intake also developed very positively in the year under report. Order intake totalled EUR 36.0 million, equivalent to growth of 60.0% year-on-year (book-to-bill ratio of 1.2), primarily driven by new projects awarded in the e-mobility and refurbishment lines of business.

Revenue for the SBRS segment again grew extremely dynamically by 79.5% to EUR 29.8 million, partially due to the implementation of sizeable projects previously awarded in 2019. Segment EBIT increased to EUR 2.7 million (2019: EUR 1.3 million) due to various projects successfully completed in the segment's two lines of business, resulting in an EBIT margin of 8.8% (2019: 7.9%) for the full year under report.

Higher return on capital employed, debt ratio reduced, positive free cash flow despite investments

At EUR 269.5 million, capital employed was practically identical to the figure recorded one year earlier. The return on capital employed (ROCE), which indicates the ratio of EBIT to the average amount of capital employed, rose to 8.1% in the fiscal year 2020, compared with 6.4% in 2019. The improved return, despite capital employed remaining practically unchanged, was attributable to improved profitability compared to 2019. The Schaltbau Group intends to focus more keenly on increasing its return on capital employed going forward.

Net financial liabilities (current and non-current financial liabilities less cash funds, excluding guarantees) amounted to EUR 79.8 million at the end of the reporting period (31 December 2019: EUR 82.2 million). The debt ratio improved to 1.9 compared to 2.5 in the previous year.

Group equity fell by EUR 6.7 million to EUR 90.7 million compared with one year earlier. The equity ratio stood at 22.0% on 31 December 2020 (31 December 2019: 24.3%).

Despite higher capital expenditure, free cash flow totalled EUR 13.7 million in the fiscal year 2020.

Forecast 2021: Revenue of EUR 520-540 million, EBIT margin approx. 5%

The Schaltbau Group expects the positive order situation in the current fiscal year to continue and the influence of COVID-19 to be temporary and predicts Group order intake within the range of EUR 550 to 580 million for the fiscal year 2021. Moreover, based on these assumptions, the Schaltbau Group is aiming for revenue in the range of EUR 520 million to EUR 540 million. Based on higher revenue, continued productivity improvements and savings in both direct and indirect materials, the Executive Board is targeting a Group EBIT margin of around 5%.

Strategy 2023: Improved financial performance, profitable growth in core business and development of new, attractive end markets, especially for components business

Changes at Executive Board level with Dr Jürgen Brandes as new CEO since 1 January 2021 and Steffen Munz as newly appointed CFO since 1 March 2021 have enabled Schaltbau Holding to additionally enhance and specify its corporate strategy. Accordingly, the enterprise will focus on four key strategic directions. The foremost priority is to improve the financial performance of the entire Schaltbau Group, particularly in the currently lower-margin segments. Secondly, profitable growth in the Group's core rail business is to be additionally promoted. Special emphasis will also be placed on the service sector: the aftersales business and services such as refurbishment and retrofitting are to be expanded. As its fourth strategic goal, Schaltbau Holding intends to leverage the technological knowledge of DC components and applications gained from the Group's core rail business to enter new markets via new energy storage applications, especially in the New Energy, New Industry and E-Mobility sectors. With this strategy, the Group aims to generate annual revenue of between EUR 750 and 800 million by 2026, with a high single-digit EBIT margin for the enterprise as a whole.

"Our Strategy 2023 focuses on a sustainable increase in the value of the Schaltbau Group. Improving financial performance has the highest priority. We are strengthening our close customer relationships in the core business rail by providing professional service and refurbishment expertise. As experts for reliability and safety, we also see numerous new uses for our components and applications business in the field of state-of-the-art energy storage systems. We work with numerous, well-known customers in the fields of New Energy, New Industry and E-Mobility on projects at an advanced stage. Our new, modern production plant enables us to enter these attractive growth markets."

Capital measure to finance further corporate growth secured

In order to finance the further growth of the Group in the four strategic directions, Schaltbau Holding AG plans to offer mandatory convertible bonds with a volume of EUR 60 million for subscription in the period from 1 to 16 April 2021. The complete bond placement process is already fully secured via an agreement concluded with the investors of the AiC-Group under the leadership of Luxempart, Active Ownership Group, Shareholder Value Management, and Teslin Capital Management (manager of the Midlin and Gerlin funds). The initial price at which the holders of Mandatory Convertible Bonds may convert them into Schaltbau shares will be EUR 29.00. The Mandatory Convertible Bonds will be issued at a nominal value of 100% with a denomination of EUR 1,000.00 each. They will bear interest at a nominal rate of 0.5% p.a. and mature on 30 September 2022.

"The complete securing of the convertible bonds by way of a pre-placement at attractive arm's-length conditions is proof of the great confidence our investors have in the Company and our Strategy 2023," said Steffen Munz, CFO of Schaltbau Holding AG.

The complete, audited consolidated financial statements for 2020 will be published with the Company's Annual Report on 25 March 2021 and made available to download from the Schaltbau website at: /de/.

About the Schaltbau Group
Schaltbau Holding AG (ISIN: DE000A2NBTL2) is listed in the Prime Standard segment of the regulated market of Deutsche Börse AG in Frankfurt am Main. With annual Group revenue in the region of EUR 500 million and around 3,000 employees, Schaltbau is an internationally leading supplier of systems and components in the field of transportation technology and the capital goods industry. With Schaltbau, Bode, Pintsch and SBRS as their core brands, Schaltbau Group companies develop a wide range of high-quality technologies and customer-specific technological solutions for rolling stock, rail infrastructure, passenger vehicles and commercial vehicles. As one of the few specialists for smart DC energy concepts, the Schaltbau Group is also a driver of innovation for the fast-growing markets of tomorrow such as new mobility, new energy and new industry.
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