- 9M 2018 revenue: EUR 37.1 million compared with EUR 34.6 million in 9M 2017 (+7%)
- EBITDA 9M 2018: EUR 2.1 million compared with EUR 6.1 million in 9M 2017 (-65%)
- Significant infrastructure investments for future growth completed
- Strategic expansion of international presence further advanced
- “Power 20+” performance program launched
va-Q-tec AG (ISIN DE0006636681 / WKN 663668), a technologically leading supplier of highly efficient products and solutions in the thermal insulation and cold chain logistics area, today publishes its quarterly report on the first nine months of 2018. Revenue growth continued to be driven by a strong Products business, where the cost of materials intensity – along with growth investments – affected earnings before interest, tax, depreciation and amortisation (EBITDA). In order to counteract this development, the Management Board has identified potential optimisations in existing business processes and launched a package of efficiency-enhancing measures.
Revenue during the first nine months of 2018 was up by 7% to EUR 37.1 million (previous year: EUR 34.6 million). Total income amounted to EUR 46.4 million, representing a 9% year-on-year increase (previous year: EUR 42.4 million). A strong Products business made a particular contribution of 42% to consolidated revenue, amounting to EUR 15.5 million (previous year: EUR 12.9 million). The business with Systems remained stable, contributing approximately 22% to consolidated revenue, or EUR 8.1 million (previous year: EUR 8.1 million). The attractive Services business, contributing around 33% to consolidated revenue (EUR 12.8 million), presented a mixed picture. While revenue over the entire reporting period was down slightly, by 3% year-on-year (previous year: EUR 13.2 million), progress was made in the third quarter with process optimisation, customer loyalty, the acquisition and qualification of new customers, as well as with broadening the customer base. The revenue trend in the third quarter of 2018 is starting to show that va-Q-tec is on the right path with these measures: compared with the third quarter of 2017, revenue increased by 5%, and compared with the first quarter of 2018 by 24%.
Earnings before interest, tax, depreciation and amortisation (EBITDA) reported a marked reduction to EUR 2.1 million (previous year: EUR 6.1 million). The EBITDA margin measured in terms of total income consequently stood at 5% in the reporting period, compared with 14% in the prior-year period. Along with the shift in the product mix, results were also burdened by the growth investments in additional personnel and capacities. Moreover, va-Q-tec is further advancing its international expansion: along with this year’s openings of branch operations and of the fulfilment centre in North and Latin America, international activities at headquarters and in other regions were also expanded.
The 2018 results definitely fall short of the Management Board’s expectations. The 2018 year is a year of transition for va-Q-tec, during which enormous establishment and expansion work has been performed, albeit without the anticipated results. Based on the preconditions that have now been created, the Management and Supervisory boards have launched a “Power 20+” performance program. These measures aim to significantly re-accelerate sales revenue growth, especially in the attractive Services business, and further improve sales processes in this segment. At the same time, costs and investments are to be managed more closely and reduced overall, in order to boost profitability. Specifically, the steps are aimed at a sustained improvement in the EBITDA margin and more dynamic revenue growth from the subsequent financial year onward. Along with sales measures, the package also includes efficiency enhancements in production and close intermeshing between va-Q-tec’s sub-areas, in order to leverage synergies.
Stefan Döhmen, CFO of va-Q-tec AG comments: “Our Services business is a central sales revenue and earnings driver, but has clearly lagged our expectations during 2018 to date. EBITDA was also quite significantly affected by the investments we have realised to create the preconditions for our next growth steps. Since the IPO two years ago, we have implemented approximately 90% of the investments and measures for our business expansion and internationalisation. We have now completed this buildup phase and can focus on leveraging the potentials in our international markets. Here we aim to return to sustained profitability by implementing the optimisation measures we have approved together with the Supervisory Board. Our focus in the future will be quite clearly on operative efficiency and profitable growth.”