A rePort: How is a head- liner actually produced? friedrich ... - polytec

48
Key Figures on the Group’s Balance Sheet
UNIT 31.12.06 31.12.05 31.12.04
Asset ratio
(Long term assets/
balance sheet)
Equity ratio
% 38.9 41.1 43.2
(Equity/balance sheet) % 45.7 33.8 33.0
Net working capital
Net working capital
in % of group sales
EUR mill. 41.7 51.4 39.0
(NWC/sales) % 7.9 10.2 9.9
The Group’s asset ratio decreased slightly in the fi nancial year,
despite the fact that investments amounting to EUR 21.3 million
exceeded depreciations by approx. EUR 3.5 million. Therefore,
this decline was caused by the balance sheet total increase resulting
from the increase of liquid funds.
The signifi cant rise of the equity ratio is, of course, a result of the
capital increase in connection with the IPO of POLYTEC HOLDING
AG, in addition to the earnings generated during the fi nancial year.
As a “healthy” balance sheet is an increasingly important argument
for order acquisition, especially in view of the manifold economic
problems currently faced by automobile supply industry, the management
strives for achieving an appropriate equity ratio.
Net working capital (both in absolute fi gures and in relation to
sales) fell signifi cantly in comparison to the previous year resulting
mainly from the declining inventories after the billing of the tools
for the BMW 3 series.
Key Figures on the Group’s Financial Position
UNIT 2006 2005 2004
Net debt
Net debt
EUR mill. 4.2 53.7 45.4
to EBITDA
Gearing
0.09 1.28 1.14
(Net debt/equity) 0.03 0.61 0.56
The decrease in net debt was caused by the capital increase in
the course of the IPO resulting in an infl ow of funds of EUR 23.3
million (after deduction of costs arising for such IPO) on the one
hand and by the operative cash fl ow amounting to EUR 48.4
million in 2006 (after EUR 16.8 million in the previous year) on
the other hand. The operative cash fl ow faces a cash fl ow from
investment activities of EUR -20.7 million which means a free
cash fl ow of EUR 27.7 million.
Based on the fact that the group is practically free of fi nancial
debts as of the balance sheet of December 31, 2006, the key
fi gures net debts to EBITDA and Gearing have little practical
POLYTEC
ANNUAL REPORT 2006
MANAGEMENT
REPORT
meaning. It is the management’s objective that Gearing does not
exceed a factor of 0.7, such may only temporarily be exceeded in
case of major acquisitions.
4. Outlook 2007
After the sales increase in the fi nancial year 2006, characterised
also by one-time earnings connected with tooling sales mainly in
the Automotive Systems Division, it is, from today’s point of view,
not probable that the sales fi gures of 2006 can be achieved in
2007. Another factor that will contribute to this fact is that the
sales decrease from the orders with Opel Corsa door panels and
Range Rover door panels which ended in the third quarter of 2006
will only have its full effect on sales in 2007.
In the fi nancial year 2006, the Group was very successful in the
acquisition of new orders mainly in the Automotive Systems Division.
This division was able to acquire orders with an annual sales
volume of EUR 68.5 million (after EUR 53.9 million in the previous
year). However, on account of the pre-development time, such
new orders will have their effect on sales only in 2008 and fully
in 2009 so that the lack of sales cannot be compensated in the
meantime.
And in view of the sales decline to be expected in 2007, the Group
must assume a decrease of earnings as well. However, the management
is committed to not let the EBITDA margin fall below the
target value of 8.5%.
5. Non-Financial Performance Indicators
Environmental Protection
The careful use of natural resources is a major issue in POLYTEC
GROUP’s business activities. As a Group whose business focuses
mainly on plastic processing, the prevention of waste is an important
aspect for us. Therefore, the plants working mainly with injection
moulding technology strive for a regranulation of waste as far
as such is possible to reuse it in the production process.
The Group mainly uses the working material EMPEFLEX, a fl ax
fi bre reinforced polypropylene for the car interior door panels.
EMPEFLEX is based on the fl ax plant, a generative raw material
which hardly requires fertilizer and pesticides and thus is environmentally-friendly
in its production. EMPEFLEX combines the following
advantages: it is lightweight, does not splinter and break,
provides sound insulation and is recyclable in addition. At the end
of the useful life of vehicles, EMPEFLEX is extracted from the car
bodies and may be reused as a raw material or it can be used for
energy recovery.
Therefore, POLYTEC is a pioneer in the development of recyclable
materials used in automobile manufacturing. Furthermore, the
production of these materials is largely independent of raw oil.
The Car Styling Division made further advantages in the use of