The Group also posted record order intake (up by 73.9% to EUR3.6 billion) and order backlog (up by 37.6% to EUR3.3 billion).
Revenue hit an all-time high of EUR3,256.9 million (2007: EUR2,310.1 million) a year-on-year increase of 41.0%. Growth was driven by outstanding revenue performances from the Plant Construction, Machine Tools and Minerals & Metals divisions. The Plant Construction Division contributed around 50% of total revenue, with Minerals & Metals accounting for 27%, and Drive Technology and Machine Tools generating 12% and 11%, respectively.
Record order intake and backlog
Group order intake soared by 73.9% to EUR3,583.7 million, easily surpassing an already-high EUR2,060.4 billion recorded in 2007. The gain was manily due to strong order bookings by the Plant Construction Division (energy and environmental technology). Order backlog at December 31, 2008 amounted to EUR3,263.9 million a 37.6% improvement on the previous year (December 31, 2007: EUR2,371.2 million) giving the group plenty of work in hand for coming months.
Results impacted by harsh economic environment
Earnings were severely affected by the adverse business environment, particularly in the fourth quarter, and therefore do not accurately reflect the Group´s operational strength. Earnings were hit by the collapse in copper prices — from a historic high of USD 8,985 on July 3, 2008 to $2,770 on December 24, 2008 — which resulted in inventory writedowns and knock-on effects. Restructuring expenses and goodwill impairment also weighed on results.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 45.1% to EUR77.3 million (2007: EUR140.7 million). Earnings before interest and tax (EBIT) were EUR19.4 million (2007: 71,0), while profitability (the EBIT margin) slipped to 0.6% (2007: 3.1%). Earnings before tax (EBT) turned negative by EUR12.3 million (2007: EUR+28.9 million).
Sound balance sheet due to further fall in net debt
The group´s total assets declined by 10.7% to EUR2,752.0 million, reflecting the disposal of copper investments (Norddeutsche Affinerie AG and Cumerio S.A.).
Inventories also decreased, mainly as a result of writedowns in the copper business. Most of the proceeds of the disposals went to repaying borrowings, almost halving net debt to EUR288.1 million as at year end 2008 (December 31, 2007: EUR563.3 million). Net gearing, the ratio of net debt to equity improved year on year from 150.2% to 92.5%. The group generated EUR378.7 million in free cash flow, compared with an outflow of EUR372.6 million in 2007.
Outlook for 2009:
In the light of the trading environment and expectations for the various divisions, the A-TEC Group forecasts revenue of around EUR3 billion in 2009. The EBIT margin should be about 3%. If the financial and economic crisis deepens in 2009 and persists into 2010, in all probability additional restructuring expenses will be necessary and these will affect results.
