The Frauenthal Group in 2016                                          Further progress in implementing growth strategy

Vienna, 27 April 2017

  • Revenue up 3% to EUR 754.4m  
  •  Earnings affected by extraordinary expenses
  • Integration expenses at Frauenthal Trade
  • Earnings growth in all of Frauenthal Automotive’s businesses
  • Outlook for 2017: growth driven by powertrain acquisition

 “2016 was a very satisfactory year for the Frauenthal Group: both the Frauenthal Automotive and Frauenthal Trade divisions reported improvements in profitability as a result of the Group restructuring implemented in 2014,” explained Frauenthal Holding Executive Board Director Martin Sailer.

Favourable market conditions played a decisive role in the revenue growth in both divisions: revenue increased by EUR 22.3m year on year, to EUR 754.4m. Revenue adjustments totalling EUR 21.1m (2015: EUR 58.6m) were recognised for the disposals of Frauenthal Automotive Azambuja SA and its sales subsidiaries and SHT Slovensko s.r.o. The Frauenthal Trade Division accounted for around 75.6% of total revenue, and Frauenthal Automotive for about 24.4%. Non-recurring effects had an impact on profit for the year: Frauenthal Trade recognised extraordinary expenses of EUR 3.5m in connection with the integration of logistics and IT systems, while deconsolidation expense in relation to the disposals of Frauenthal Automotive Azambuja and SHT Slovensko amounted to EUR 4.2m. Adjusted for this expense, the Frauenthal Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) reached EUR 33.4m in 2016, a year-on-year increase of EUR 1.5m. Frauenthal Trade contributed EUR 17.3m of the total, and Frauenthal Automotive EUR 18.1m. Earnings before interest and tax (EBIT) climbed from EUR 17.4m in 2015 to EUR 18.2m.

 

Frauenthal Trade: foundations in place for earnings growth

In spite of difficult conditions in the construction market, Frauenthal Trade reported an increase in adjusted revenue of EUR 13.0m, to EUR 584.2m. This was primarily due to the improved performance of the ÖAG brand. Earnings were affected by extraordinary expenses related to the integration of logistics processes. EBITDA was EUR 17.3m, compared with EUR 18.5 a year earlier. “This investment in integration will have a sustained positive effect in the next few years. We made exceptionally good progress in 2016 and laid the foundations for the continued success of our strong brands,” commented Wolfgang Knezek, Frauenthal Holding Executive Board member responsible for Frauenthal Trade.

 

Favourable market conditions for Frauenthal Automotive

An upbeat climate and additional orders from both existing and new customers resulted in increased revenue at Frauenthal Automotive. Adjusted divisional revenue advanced by EUR 9.3m in 2016, to EUR 170.1m. All of the division’s businesses reported earnings growth, and EBITDA climbed from EUR 15.2m to EUR 18.1m. All product groups also succeeded in winning new business for subsequent years, and there was an increase in orders from passenger vehicle manufacturers and non-automotive customers, which has reduced dependence on the volatile commercial vehicle sector. 

 

Outlook for 2017

In 2017, the domestic plumbing and heating market is expected to grow slightly thanks to the contract business, although the strong pressure on margins is likely to persist. As a result, Frauenthal Trade anticipates moderate revenue growth at best. Earnings should improve in 2017 after the integration of IT and logistics is complete. The European commercial vehicle market is continuing to perform well, as well as passenger vehicle market, which is important for Frauenthal Automotive. The acquisition of Mahle Motorkomponenten GmbH – now renamed Frauenthal Powertrain – was concluded on 31 March 2017. Mahle’s annual revenue of EUR 125m will result in significant growth at Frauenthal Automotive. The ongoing expansion of the Frauenthal Automotive Division, which is aimed at creating a key strategic player in the European commodity business, will be driven forward by means of further acquisitions.

 

About the Frauenthal Group

The Vienna-listed Frauenthal Group is a diversified group consisting of two business divisions: Frauenthal Automotive and Frauenthal Trade. Frauenthal Automotive is the market and technology leader in the European commercial and passenger vehicle industry, as well as a leading development partner. It produces stamped and welded metal parts (Gnotec), airtanks and U-bolts, as well as connecting rods and camshafts (Frauenthal Powertrain), and has ten plants in five European countries and one in China. Frauenthal Trade, a leader in its home market, comprises Austrian plumbing supplies wholesalers SHT and ÖAG, civil engineering and industrial specialist Kontinentale, and service company Frauenthal Service. The Frauenthal Group employed an average of around 3,000 people in 2016.

 

 

Contacts

Balloon Communications                                Frauenthal Group

Sabine Essl                                                     Erika Hochrieser

Tel: +43 (0)664 4337978                                 Tel: +43 (0)1 5054206-35

E-mail: s.essl@balloon.co.at                           E-mail: e.hochrieser@frauenthal.at

 

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