Picanol Group increases turnover by 11% in the first half of 2017
Well-filled order book for second half-year
The Weaving Machines division again experienced a strong first half in 2017, having ended 2016 with a well-filled order book. Increasing demand for technology and quality brought strong sales, especially in Asia, with market share increases in many markets.
As a result, Picanol placed a record number of weaving machines on the market in H1 2017. The Industries division also had a strong first half-year thanks to the increased demand from Weaving Machines and projects at other customers, which allowed Proferro (foundry and mechanical finishing activities) and PsiControl (controllers) to realize strong revenue growth.
These activities resulted in the first half of 2017 in a net profit of 52.2 million euros compared to 48.1 million euros in the same period in 2016. In addition, Tessenderlo Group nv contributed 5.8 million euros to the net result in the first half of 2017 (compared to 12.3 million euros in the same period last year). The Picanol Group closed the first half of 2017 with a net profit of 58.1 million euros, compared to 60.4 million euros in the first half of 2016.
The Picanol Group expects a slight increase in turnover over the full 2017 financial year compared to 2016 – the best year in the history of the group – but is taking into account a limited impact of rising commodity prices.
The Picanol Group has currently some 40 vacancies at its headquarters in Ypres. The vacancies are published on the website www.picanolgroup.com.
During the first half of 2017, the Picanol Group realized a consolidated turnover of 364.7 million euros, a 11% increase in comparison to 329.7 million euros in the first half of 2016.
Both divisions saw their turnover increase based on the higher volumes in the first half of 2017.
Gross profit in the first half of 2017 amounted to 90.3 million euros compared to 85.8 million euros in the first six months of 2016 with a gross margin percentage of 25%. The operating result (EBIT) amounted to 71.2 million euros compared to 66.9 million euros last year, or an EBIT-margin of +19.5% versus +20.3% in the first half of last year. Income taxes amounted to -20.1 million euros compared to -19.3 million euros last year, or an effective tax rate of 27.8% versus 28.6% last year.
The share of the results of Tessenderlo Group nv for the first half of 2017 is 5.8 million euros.
The result of Tessenderlo Group for the period is 17.6 million euros. A fair value adjustment was made of -1.7 million euros (depreciation of revalued fixed assets after tax). The average participation rate over the first half year amounted to 36.6%, as a result of which the share in the result of Tessenderlo Group amounts to 5.8 million euros. For further information on the interim consolidated financial statements of Tessenderlo Group, we refer to the press release of the half-yearly information of Tessenderlo Group on www.tessenderlo.com.
The Picanol Group closed the first half of 2017 with a net result of 58.1 million euros, compared to 60.4 million euros in the same period in 2016.
Notes to the income statement per segment
In accordance with the organizational structure and the internal reporting process, the two divisions - Weaving Machines and Industries - form the primary segmentation basis of the group. The supporting Finance, IT, HR and Corporate activities were allocated to the business segments on the basis of various factors (activity, contribution to turnover %, etc.), in accordance with the management reporting.
The turnover of the Weaving Machines division amounted to 316.3 million euros, an increase of 10% compared to 288.8 million euros in the same period last year. As expected and as previously announced, the Weaving Machines division experienced a strong first half in 2017, having ended 2016 with a well-filled order book. Increased demand for technology and quality (mainly from Asia), which was partly due to the success of new weaving machines such as the GTMax-i rapier weaving machine, resulted in strong sales and increased market share in many markets. As a result, Picanol placed a record number of weaving machines on the market in H1 2017. Sales of parts and accessories have followed the positive trend of the weaving machines. The operating result of the Weaving Machines division amounted to 62.3 million euros versus 57.9 million euros last year.
The order book for the second half of 2017 is well-filled. The Picanol Group expects a slight increase in turnover over the full 2017 financial year compared to 2016 – the best result in the history of the group – but is taking into account a limited impact of rising commodity prices.
The Picanol Group remains cautious, as it is active as an export-oriented company in a volatile world economy. Due to the cyclical nature of the textile market, strict cost-control remains of the essence. Picanol Group’s reliance on the cyclic textile market has been considerably reduced, as a result of the strong Industries growth and the contribution of Tessenderlo Group to the results.
Statement by the Management
Mr. Stefaan Haspeslagh (Chairman) and Mr. Luc Tack (Managing Director) declare, on behalf and for the account of the Picanol Group, that, in as far as they know,
- the abbreviated financial overviews dated 30 June 2017 have been drawn up according to IFRS, and that they provide a true and fair view of the assets, the financial status and the results of Picanol and the companies included in the consolidation;
- the interim (half-yearly) report provides a fair and true view of the notable events and main transactions with affiliated companies that occurred during the first six months of the financial year and of their impact on the abbreviated financial statements, as well as a description of the most significant risks and uncertainties for the remaining months of the financial year.