Kapsch TrafficCom strengthens the position despite a mediocre 2013/14 fiscal year.
- Market growth absent in the toll collection area – revenue comparable to previous year
- Toll systems in South Africa and Belarus successfully put into operation
- Significant improvement in operating results – EBIT increased by 23 %
- Profit for the period down by 83 % – no dividend planned
- Position for the future strengthened by stable revenue base and adapted strategy
|1. April – 31. March||2012/13||+/- %||2013/14|
|Revenues (in million EUR)||488,9||0%||487,0|
|EBIT (in million EUR)||16,5||+23%||20,3|
|Profit for the period (in million EUR)||16,8||-83%||2,9|
Vienna, June 11, 2014 – Kapsch TrafficCom AG (ISIN AT000KAPSCH9), listed on the Vienna Stock Exchange in the prime market segment, reports a mediocre 2013/14 fiscal year in which the forecast growth in the area of electronic toll collection did not materialize. The reporting period was characterized by postponements and cancellations of expected projects; in addition, Kapsch TrafficCom suffered a negative one-time effect in connection with the project in South Africa. Nevertheless, the group successfully continued its strategic development and finds itself in a more solid position than one year ago and well prepared for the future.
One key milestone was the commissioning of the electronic toll collection system in the South African province of Gauteng, which was delayed for more than one-and-a-half years and has up to now been the main cause of the mediocre company results. In Belarus, Kapsch TrafficCom put the first sections of the national electronic toll collection system according to plan into operation, a system that will be continuously expanded in the coming years. Additional system starts as well as new orders were achieved by Kapsch TrafficCom in the U.S.A., in Australia, Chile, Russia, Kazakhstan and Europe.
The result was a significant further expansion in the enduring revenue mainstays of the global on-board unit business and ongoing system operation. Furthermore, Kapsch TrafficCom was able to expand on its competence beyond the area of toll collection systems in the market for intelligent transportation systems (ITS), and strengthen its position with the acquisition of the major ITS provider Transdyn in the U.S.A.
Revenue and earnings.
The revenue in the 2013/14 fiscal year was EUR 487.0 million, which is in line with the previous year’s level of EUR 488.9 million. As in the previous year, major installation projects – other than the Belorussian project – were absent, and the most recently commissioned systems in South Africa and Belarus are not yet reflected to their full extent in the revenue and earnings for the reporting period.
The investments that were made for the predicted market growth were downsized as far as possible in the reporting period, while at the same time existing structures were adapted for new operation projects as well as resources and know-how were maintained for future large projects. In the third quarter, Kapsch TrafficCom was once again forced to record a negative one-time effect in connection with the project in South Africa in the amount of EUR 8.5 million. The operating result nevertheless improved significantly in the 2013/14 fiscal year due to progress in and expansions of installation projects. At EUR 20.3 million, the EBIT is 22.9 % above the previous year’s value of EUR 16.5 million. The EBIT margin of 4.2 % reflects this improvement, even if it remains far below the medium-term goal of a two-digit margin.
The financial result recorded an enormous decline, due primarily to largely unrealized currency losses – above all in the South Africa rand. The profit before tax decreased as a result to EUR 5.5 million, and the profit for the period fell from EUR 16.8 million in the previous year to EUR 2.9 million in the reporting period.
The executive board will propose to the annual shareholders´ meeting on 1 September 2014 that no dividend be paid out for the 2013/14 fiscal year in order to avoid limiting options for further growth.
The segment Road Solution Projects (RSP) recorded revenue of EUR 132.0 million after EUR 128.3 million in the previous fiscal year, an increase of 2.9 %. The largest single contribution to income came from the installation project in Belarus. The project in France, the progress in the managed lane system project in Texas, U.S.A., which should be expanded with a traffic management system, and the M5 Motorway project in Sydney, Australia, also contributed to the increase in revenue. The EBIT of the segment RSP was improved from EUR -51.7 million in the previous year to EUR -34.6 million, thanks in part to the realization of cost savings. However, it was still not possible to cover the regular costs associated with this segment.
In the segment Services, System Extensions and Components Sales (SEC), revenue decreased by 3.1 % from EUR 342.3 million to EUR 331.8 million. While positive revenue contributions came in particular from the operation project in Poland with ongoing expansions and the project in Belarus, which went into operation as of the second quarter, lower income from the South African project brought about the overall decrease in revenue. The number of on-board units sold was nearly at the same level as the previous year at 9.2 million units. The EBIT of the segment SEC declined from EUR 67.3 million to EUR 53.8 million, reflecting the negative one-time effect of the project in South Africa, which resulted from differences of perspective in connection with the reimbursement of costs for maintaining the system readiness until December 2013. The EBIT margin of 16.2 % was upheld primarily by the stable earnings contributions of the other operation projects.
Financial position and cash flows.
The balance sheet figures of the Kapsch TrafficCom Group as on the key date of 31 March 2014 reflect the current progress as well as the financing agreement for the installation and operation project in Belarus. The net debt increased from EUR 40.5 million to EUR 93.4 million as on 31 March 2014, while the capital employed declined by 2.3 % to EUR 369.2 million. The net working capital of EUR 205.4 million was nevertheless below the previous year’s value. Cash and cash equivalents amounted to EUR 57.7 million at the end of the reporting year compared with EUR 79.0 million in the previous year. The free cash flow, which was EUR 48.3 million in the comparison period, was negative in the 2013/14 fiscal year at EUR -24.7 million due to project-related factors.
Kapsch TrafficCom has invested in the future during recent years and prepared its internal structures for the predicted market growth. The company is also ready for the changes to arise from increasing ITS convergence. With the adapted strategy, the executive board considers the company’s position for the future to be stronger than ever. Details concerning the developments on the market and within the Kapsch TrafficCom Group will be published in the 2013/14 annual report.
Concerted work will continue on existing projects in the 2014/15 fiscal year. The major project in Belarus will be expanded further, and Kapsch TrafficCom also expects expansions to the operation project in Poland. Now that the toll system in South Africa has been in operation since December 2013, the company plans to work with its customer to further improve the revenue from the project. The result of the invitation to tender for the nationwide toll collection system in Russia is expected soon.
Kapsch TrafficCom also expects that some of the postponed projects as well as others will materialize in the current fiscal year. In parallel to this, the company continues to actively contact potentially interested parties for toll systems, an approach that has already proved successful in Belarus.
An overview of the fiscal year 2013/14 (key aspects and figures) can be found at www.kapsch.net/ktc/ir/downloadcenter
Kapsch TrafficCom is a provider of intelligent transportation systems (ITS) in the application fields of road user charging, urban access and parking, road safety enforcement, commercial vehicle operations, electronic vehicle registration, traffic management and V2X cooperative systems. Kapsch TrafficCom covers with end-to-end solutions the entire value creation chain of its customers as a one-stop shop, from components and design to the installation and operation of systems. The solutions of Kapsch TrafficCom help to finance infrastructure, to increase traffic safety, to optimize traffic flow, and to reduce environmental pollution from traffic. The core business is to design, build and operate electronic toll collection systems for multi-lane free-flow traffic. References in 44 countries on all continents make Kapsch TrafficCom a recognized supplier of electronic toll collection worldwide. As part of the Kapsch Group, a family-owned Austrian technology group founded in 1892, Kapsch TrafficCom, headquartered in Vienna, Austria, has subsidiaries and representative offices in 33 countries, has been listed on the Vienna Stock Exchange (KTCG) since 2007, and generated with more than 3,300 employees revenues of EUR 487.0 million in fiscal year 2013/14.