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Bergisch Gladbach, 14 May 2024

INDUS generates sales of EUR 410 million and EBIT of EUR 26.7 million in first quarter of 2024

- Weak economy dampens development, as expected
- Guidance confirmed
- Portfolio strengthened through three complementary acquisitions

As expected, sales and income of stock exchange listed INDUS Holding AG remained below the prior year level in the first quarter of 2024. The portfolio companies generated sales of EUR 410.1 million in the first three months of 2024 (previous year: EUR 450.8 million). The decline is due to customers’ current reluctance to buy and spend as a result of the weak economy. Adjusted EBITA, i.e. earnings before interest and taxes plus PPA amortization and impairment, amounted to EUR 31.5 million (previous year: EUR 49.5 million). While personnel expenses increased due to significantly higher wages and salaries, the portfolio companies were able to reduce their material costs disproportionately. Operating income (EBIT) amounted to EUR 26.7 million (previous year: EUR 44.8 million). The EBIT margin was 6.5% (previous year: 9.9%). Earnings after taxes amounted to EUR 10.3 million (previous year: EUR 16.0 million).

“As projected by us, the difficult macroeconomic conditions were reflected in the performance of our Group at the beginning of the year,” says Dr. Johannes Schmidt, Chairman of the Board of Management of INDUS Holding AG. “These economic challenges had already been taken into account in our planning. We therefore maintain our guidance for the full year.” The INDUS Board of Management projects sales of between EUR 1.85 and 1.95 billion and operating income (EBIT) of between EUR 145 and 165 million for the financial year 2024.

Well-filled M&A pipeline

INDUS is planning to make acquisitions totalling EUR 70 million in 2024. In the first quarter, the SME Group had acquired the remaining shares in Hauff-Technik GRIDCOM, a specialist in passive components for the fiber-optic infrastructure, and in the US company TECALEMIT Inc., a specialist in fueling and workshop technology. In March 2024, INDUS signed the contracts to acquire the British company COLSON X-Cel, a manufacturer of industrial valves for measurement and control engineering, also with a view to strengthening the existing portfolio. Also in March 2024, GESTALT AUTOMATION, an AI specialist for industrial applications, was added to the INDUS portfolio. “Our acquisition pipeline is well-filled and prices have declined noticeably in the meantime,” says Schmidt. “Having successfully completed several complementary acquisitions earlier this year, we are currently in negotiations to acquire additional attractive targets.”

Operating cash flow up considerably, seasonal increase in working capital below previous year’s level

At EUR 12.1 million, operating cash flow in the first three months was well above the level of the previous year (EUR 1.5 million). As a result of lower procurement prices, the stabilization of the supply chains and measures to reduce inventories, working capital, which usually increases at the beginning of the year, did not increase as much as in the previous year. Free cash flow amounted to EUR 6.1 million. The previous year’s figure (EUR 7.5 million) included a one-time effect from the sale of a property amounting to EUR 14.4 million. The free cash flow forecast for the full year remains unchanged at EUR 110 million.

At 37.0%, the equity ratio on 31 March 2024 was almost at the level of the previous year (37.3%) in spite of the share buyback program. In March 2024, INDUS successfully completed a share buyback program for 1.1 million shares. INDUS now holds 4.09% of the share capital as treasury shares, which can be used, among other things, for the acquisition of new companies.

Infrastructure segment increases EBIT margin despite lower sales

While sales in the Infrastructure segment declined to EUR 131.9 million (previous year: EUR 141.5 million), operating income (EBIT) rose to EUR 11.4 million (previous year: EUR 10.7 million). The measures taken to control costs had a positive effect, with the EBIT margin rising to 8.6% (previous year: 7.6%). GRIDCOM, which was fully consolidated in March 2024, already made a positive contribution to sales and earnings. INDUS continues to project an EBIT margin of 10–12% for the full year.

Sales in the Engineering segment totaled EUR 129.4 million in the first three months of 2024 (previous year: EUR 142.1 million). Operating income (EBIT) amounted to EUR 7.3 million (previous year: EUR 15.6 million). The EBIT margin was 5.6% (previous year: 11.0%). Business was not quite as strong as in the previous year particularly in the sorting systems and packaging technology segment. The portfolio companies expect sales contributions and average margins to pick up again in the course of the year. The forecast range for the EBIT margin remains unchanged at 8–10%. The new acquisition GESTALT AUTOMATION is allocated to the Engineering segment.

Business activity in the Materials segment picked up at the beginning of the year, but remained below the good level of the first quarter of 2023. The portfolio companies generated sales of EUR 148.6 million (previous year: EUR 166.8 million). The metal processing segment is feeling the effects of the reluctance of customers in the agricultural machinery industry in particular. Moreover, the segment companies are exposed to increased price pressure. Operating income (EBIT) amounted to EUR 11.8 million (previous year: EUR 20.1 million). The EBIT margin was 7.9% (previous year: 12.1%). For the full year, INDUS continues to expect an EBIT margin of between 7% and 9%.

“Our portfolio companies are expecting a cyclical recovery in the second half of the year, when business should be much stronger,” says Schmidt. “We continue to project an EBIT margin of between 7.5% and 8.5% for the full year 2024.”

The complete interim report is available here. An overview of the key performance indicators is available here.

Note:

This press release contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of INDUS Holding AG and comprise known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. INDUS Holding AG assumes no obligation to updated forward-looking statements.

Axel Meyer

COO Engineering
Axel Meyer (German citizen, born 1968) has been a member of the INDUS Board of Management since October 2017.

Until joining INDUS, he held various management positions at Schuler AG, most recently as Managing Director of Schuler Pressen and Head of the Service Division of the Schuler Group, Goeppingen, Germany.

Previously, Axel Meyer worked as a member of the Board of Management of the international management consultancy IMAGIN Prof. Bochmann AG, Eppstein im Taunus, Germany. He started his professional career in the Schuler Group's Solid Forming Division, initially in global sales and later as Division Manager.

Axel Meyer studied industrial engineering in Germany and the USA and earned a Master of Mergers & Acquisitions (LL.M.) at the Frankfurt School of Finance & Management while working. 

Gudrun Degenhart

COO Materials Solutions
Gudrun Degenhart (German citizen, born 1970) has been a member of the Board of Management of INDUS since October 2023.

She has more than 20 years of experience in the management and development of portfolio companies in Europe, USA and the Asia-Pacific regions.

Before joining INDUS, Gudrun Degenhart was CEO for the German portfolio companies of the international service group ISS. She previously worked for the thyssenkrupp Group, including as CEO of the international business unit for special lifts and as CEO of Materials Western Europe and Asia-Pacific. She gained experience in medium-sized companies as a board member of the construction technology company Schöck.

A graduate in business administration, she began her career by building up the Central and Eastern European activities of the construction specialist Lindner Group. 

Dr. Jörn Großmann

COO Infrastructure
Dr. Jörn Großmann (German citizen, born 1968) has been a member of the INDUS Board of Management since January 2019.

Up until joining INDUS, he worked for the Dutch group Aalberts Industries, with his last position being the sole managing director of Impreglon, Lüneburg, Germany.

He previously held various positions at the Georgsmarienhütte Group, initially becoming managing director of Mannstaedt, Troisdorf, Germany and later managing director of GMH Edelstahl Service Center Burg and GMH Engineering. Before Dr. Großmann became the managing director of Buderus Feinguss, Moers, Germany, he worked as a development engineer and as a technical director for Doncasters Precision Castings, Bochum, Germany.

He studied material sciences and earned a doctorate in the field of natural sciences.

Dr. -Ing. Johannes Schmidt

CEO
Dr. -Ing. Johannes Schmidt (German citizen, born 1961) has been a member of the Board of Management of INDUS since January 2006. He has assumed the position of CEO since July 2018.

Dr. -Ing. Schmidt was previously the sole managing director of ebm-papst Landshut, Germany, a manufacturer of ventilation motors and fans. During his tenure there, his main achievements included advancing the development of new product platforms and the internationalization of production sites.

Dr. -Ing. Schmidt began his career at Richard Bergner, a manufacturer of electrical instruments from Schwabach, Germany. He initially led product development before rising to the position of managing director during his 12 years at the company.

Schmidt, who studied mathematics, gained an engineering doctorate in mechanics from the Technical University of Darmstadt. 

Rudolf Weichert

CFO
Rudolf Weichert (German citizen, born 1963) is the CFO of INDUS.

Before joining the INDUS Board of Management in June 2012, he was a Partner at KPMG for nine years. He spent three of these years in Detroit, Michigan, United States, where he worked mainly with companies in the engineering, and materials trading industries.

Mr. Weichert, who holds a masters degree in business administration, worked for KPMG for about 20 years, primarily in the firm’s Duesseldorf office, where he worked mainly with multinational manufacturing corporations.