Rosenbauer International AG: Rosenbauer Group generates revenues of € 429.7 million in the first half of 2022

Leonding (pta005/12.08.2022/07:00 UTC+2)

• Ongoing production disruptions caused by material bottlenecks, deliveries in decline
• Standardized stock fire trucks for most pressing fire service needs
• EBIT of € -23.2 million in the second quarter despite recovery process
• Latest price adjustment in May replicates changed manufacturing costs
• Strong incoming orders of € 581.4 million significantly higher than in the previous year
• Management adjusts guidance for financial year: revenues of approximately € 1 billion, positive EBIT (previously: EBIT margin between 1% and 3%)

The Rosenbauer Group generated revenues of € 429.7 million in the first half of 2022 (1–6/2021: € 448.1 million). This meant that business volumes were 4.1% lower than in the previous year despite a stronger second quarter. Persistent supply chain issues and price rises for intermediary products and energy are creating highly uncertain production conditions and shifts in revenues throughout the Group. To better satisfy the most pressing fire service needs in the current circumstances, Rosenbauer will for the first time in its history manufacture a limited number of largely standardized vehicles kept in stock in Europe that will be available to emergency services at very short notice. Furthermore Rosenbauer Group has adjusted its prices for new tenders in May. Lower gross profit and higher structural costs resulted in EBIT of € -23.2 million (1–6/2021: € 11.8 million). At the same time, incoming orders were much higher than in the corresponding period of the previous year at € 581.4 million (1–6/2021: € 488.2 million). In light of the tough general conditions, provided order books remain full, the Executive Board of the Rosenbauer Group anticipates revenues of around € 1 billion and positive EBIT in the current year.

"The Rosenbauer Group's operating result improved in the second quarter, in line with revenue development. Excluding the costs for the industry's leading trade show, Interschutz, where we once again clearly positioned ourselves as a leader in innovation with our line-up of electric vehicles, it would even have been balanced. However, this should not obscure the fact that we need to step up our efficiency efforts," says Sebastian Wolf, CEO of Rosenbauer International AG.

Revenues and result of operations

The tentative economic recovery in 2021 has been followed by increasingly gloomy developments over the past few months. The world economy, already weakened by the COVID-19 pandemic, is being hit by several shocks at once: higher-than-expected inflation triggering tighter financial conditions, a worse-than-anticipated slowdown in China and negative spillovers from the war in Ukraine.

This prompted the International Monetary Fund (IMF) to lower its forecast for global economic growth again in July, by 0.4 percentage points compared with April, to 3.2% in 2022. Growth of 6.1% was forecast last year. The global inflation forecast, however, has been revised up due to rising food and energy prices as well as lingering supply-demand imbalances, to 6.6% in advanced economies and 9.5% in emerging markets and developing economies.

Meanwhile, the order books of the global firefighting industry are well-filled. However, the development of the industry will be decisively impacted by how long the current disruptions to international supply chains persist and how much they affect regular production operations.

The Rosenbauer Group generated revenues of € 429.7 million in the first half of 2022 (1–6/2021: € 448.1 million). The CEEU and NOMA areas delivered slightly more vehicles and equipment, despite the short supply of materials. The Preventive Fire Protection segment expanded its revenues significantly. Consolidated revenues are currently divided across the sales areas as follows[1]: CEEU area 37%, NISA area 9%, MENA area 9%, APAC area 10%, NOMA area 31% and Preventive Fire Protection segment 4%.

EBIT was negative after the first six months of 2022 at € -23.2 million (1–6/2021: € 11.8 million). Consolidated EBT amounted to € -26.0 million at the end of the reporting period (1–6/2021: € 9.2 million). The comparatively better net result can be attributed to a positive tax effect from the acquisition of US minority interests and capitalized loss carryforwards.

Incoming orders from January to June of this year were much higher than in the corresponding period of the previous year at € 581.4 million (1–6/2021: € 488.2 million). This increase is being driven by the CEEU and NOMA areas and the Preventive Fire Protection segment, which all experienced very strong growth. The order backlog has also increased and amounted to € 1,334.2 million as of June 30, 2022 (June 30, 2021: € 1,092.0 million).

Financial position and net assets

Total assets increased year-on-year to € 1,014.0 million (June 30, 2021: € 962.2 million). Inventories went up to € 486.4 million (June 30, 2021: € 454.1 million) while receivables and other assets were way down on the previous year at € 226.6 million (June 30, 2021: € 250.8 million).

The biggest change was in non-current interest-bearing liabilities, which were higher than in the previous year at € 200.8 million (June 30, 2021: € 135.4 million) and impacted net debt. This therefore reduced the callable non-controlling interests through acquisition of the remaining 50% stake in Rosenbauer America.

The Group's net debt (the net amount of interest-bearing liabilities less cash and cash equivalents and securities) increased year-on-year to € 428.9 million (June 30, 2021: € 345.3 million).

"The acquisition of the US minority interests in Rosenbauer America is an important investment in the future of the Rosenbauer Group. After all, North America is the world's largest firefighting market, with a procurement volume of over 6,000 vehicles in the previous year. The completed acquisition of Rosenbauer America offers us a strategic opportunity to strengthen the integration of the US subgroup, make better use of synergies, and expand our business in the long term. The North American business also has very strong cash flow, so we are expecting a rapid return of funds," says Wolf.

Fewer deliveries and the substantial increase in inventories since the turn of the year put cash flow from operating activities at € -121.8 million at the end of the first half of 2022 (1–6/2021: € -27.7 million).

Outlook

The IMF revised its economic forecast downward in July. It now anticipates that the global economy will grow by just 3.2% instead of 3.6% in 2022. The forecast in 2023 is for growth of 2.9% due to various factors, not least anti-inflationary policy.

The risks to the outlook are overwhelmingly tilted to the downside. The war in Ukraine could lead to a sudden stop of European gas imports from Russia, inflation could be harder to bring down if labor markets are tighter than expected and inflation fears become overblown, tighter financial conditions could induce new debt crises and an escalation of the Chinese property sector crisis might further suppress Chinese growth.

Past experience has shown that the global firefighting industry follows general economic trends at a delay of several months. The industry's order books are well-filled and there are very strong levels of tendering activity. But at the same time, the persistent supply chain issues and the pressure on energy and commodity markets as a result of the Russian invasion of Ukraine are creating extremely uncertain production conditions, which is why the industry is expected to hold steady this year.

Based on the continued difficulties in procuring chassis and other components, provided the order backlog remains high, the Executive Board anticipates revenues of around € 1 billion and positive EBIT.

[1]CEEU area: Central and Eastern Europe; NISA area: Northern Europe, Iberia, South America and Africa; MENA area: Middle East and North Africa; APAC area: Asia-Pacific; NOMA area: North and Middle America; PFP: Preventive Fire Protection

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Emitter:	Rosenbauer International AG Paschinger Straße 90 4060 Leonding Austria
Contact Person:	Tiemon Kiesenhofer, MBA
Phone:	+43 732 6794-568
E-Mail:	tiemon.kiesenhofer@rosenbauer.com
Website:	www.rosenbauer.com
ISIN(s):	AT0000922554 (Share)
Stock Exchange(s):	Vienna Stock Exchange (Official Trade); Free Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate