EANS-Information of Significance: Binder+Co: New markets and customer segments penetrated as planned

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annual report

06.03.2014

Binder+Co: New markets and customer segments penetrated as planned

- 2013 sales revenues 6.7% higher at EUR 93 million - 2013 EBIT down
on the preceding year, but solid at EUR 5.4 million - Packaging
Technology raises its sales revenues by 84.3 % - New Chinese
subsidiary assembles 23 screening machines in its first year of
operation - New markets and customer segments penetrated

Karl Grabner, from the Binder+Co Management Board: “For us, 2013 was
characterized by medium- and long-term group growth. And by growth we do not
simply mean becoming ever larger and achieving annual rises in all our key
indicators. Instead, for us growth also involves the targeted adaptation of our
structural basis in step with the opening up of new markets and customer
segments. Accordingly, against a background of solid, ongoing business
development, our focus was on capacity expansion through the start of operations
at our new location in China, the enlargement of the Gleisdorf plant and the
supplementation of our product portfolio. As a result, although market
conditions continued to be difficult, we were again able to tap into important
new branches and markets.

An increasingly challenging market environment

In 2013, the economic environment for Binder+Co’s mechanical engineering
business became steadily more difficult. The marked weakening in demand in the
EU resulted in a deterioration in result margins, which was particularly evident
in the system and plant area. From a Binder+Co perspective, as far as investment
decisions were concerned, the construction and construction supply industries
were extremely reticent and orders from the iron and steel industry during 2013
also failed to live up to expectations. Furthermore, while the recycling branch
demonstrated positive demand levels, competition in this segment intensified,
which led to increased pressure on prices.

Successful penetration of new markets

Nonetheless, in the course of the targeted expansion and spread of
its activities during 2013 Binder+Co was able to tap into interesting
new markets and customer segments. Successful entry into the Chinese
coal mining industry via screening technology products and an
increase in Canadian orders for potassium chloride (potash) drying
plants provide clear evidence of the growth potential in both
sectors. The past year also showed a continuation of the very strong
demand in Asia for high-performance packaging technology products.

Chinese subsidiary already very active in its first business year

In January 2013, the fully owned subsidiary Binder+Co Machinery
(Tianjin) Ltd. received a business licence from the Chinese
authorities and in May operations commenced at the sales, production
and services location in Wuqing. The first business year closed with
notable successes, 23 screening machines having been assembled at the
new plant and Binder+Co sales in China doubling as a consequence.
Initially, the Wuqing operation is to concentrate on the production
of screening machines for the Chinese coal mining industry.
Subsequently, activities in the Chinese recycling industry are to be
stepped up gradually.

Further sales revenue growth, EBIT down on 2012

In spite of demanding conditions, in 2013 Binder+Co raised its sales
volumes over the previous year by 6.7% to EUR 93.04 million. A
decisive factor in this increase was the steady growth of single
machine, services and spare part business. By contrast, a revival in
large-volume system and plant orders only commenced in the final
quarter of the year. EBIT for the period under report remained solid
at EUR 5.39 million, but was 35.9% down on the EUR 8.41 million of
the preceding year. In addition to strong competitive pressure in the
markets and branches served in Europe, this fall was due primarily to
the anticipated initial losses at the subsidiaries currently in the
development phase.

As the strongest segment in terms of sales revenues, Processing
Technology business in 2013 was characterized by systems orders,
which were obtained under price pressure and therefore contributed to
a marked reduction in result quality. In addition, the anticipated
start-up losses at the Comec-Binder S.r.l., Bublon GmbH and Binder+Co
Machinery (Tianjin) Ltd. subsidiaries had a negative effect on the
segment result. Nevertheless, segment sales amounted to EUR 38.6
million (2012: EUR 42.08 million) and thus constituted 41.5% of total
sales revenues. In spite of strong single machine business results,
segment EBIT was negative at EUR –2.01 million (2012: EUR 3.09
million). Total order intake in the Processing Technology Segment
stood at EUR 55.15 million in the period under review and was
therefore notably higher than the figure of the preceding year (2012:
EUR 42.12 million).

Demand for Environmental Technology Segment products during 2013
remained good, but there was a sharp increase in competitive
pressure. Consequently, although numerous orders were again obtained
in the single machine area, order intake was well down on the EUR
28.26 million achieved in 2012 at EUR 17.89 million. With sales of
EUR 26.19 million (2012: EUR 29.75 million) the segment provided
28.1% of total revenues. Solid single machine business ensured an
EBIT contribution of EUR 3.05 million (2012: EUR 3.52 million).

Following exceptionally high order intake in 2012, the Packaging
Technology know-how concentrated in the independent subsidiary Statec
Binder GmbH again provided solid order intake in 2013 with contracts
worth a total of EUR 16.49 million (2012: EUR 28.15 million). Owing
to the excellent order backlog at the beginning of the year, segment
sales revenues rose to EUR 28.25 million (2012: EUR 15.33 million),
while EBIT totalled EUR 4.35 million (2012: EUR 1.80 million) and
thus represented a major contribution to total EBIT.

Export business continues to be of major significance

Consolidated international sales during the period under review
provided 92.2% (2012: 91.1%) of total revenues, thus again confirming
the primary importance of export business. With a share of sales
revenues of 41.7%, Western Europe (excluding Austria) was again the
largest sales market, followed by Asia and Australia with 31.1%, the
Americas with 8.6%, Central and Eastern Europe (CEE and CIS) with
7.0% and Africa with 3.8%.

Demand remains low-key

Thanks to an order backlog of EUR 40.16 million, Binder+Co started
the 2013 financial year with a sizeable cushion. By contrast, order
intake during the first nine months of the year under report remained
at a low level of around EUR 18 million per quarter. Only the fourth
quarter stood out with EUR 35.45 million, indicating the dispersal of
the investment backlog, which had developed in the initial three
quarters of 2013. All in all, order intake in 2013 amounted to EUR
89.53 million, which was EUR 9.00 million or 9.1% lower than the
value for the preceding year (2012: EUR 98.53 million). As at
December 31, 2013, Binder+Co had secured an order backlog of EUR
36.59 million for 2014 and subsequent years.

Binder+Co share price development

During the period under review, the price of the Binder+Co share
showed a marked fall, although this followed considerable rises in
past years. Starting from a level of EUR 27.50 at the beginning of
2013, during the year the share price fell by 22.2% before closing at
a solid EUR 21.40. It was therefore still 214.0% above the value of
the initial quotation on December 27, 2006.

Outlook 2014

In view of the fact that, from a Binder+Co perspective, a short-term
recovery in the EU cannot be expected, the intensification of
overseas market activities, which the company has been pursuing for a
number of years, represents an important measure for the securing of
sustained, positive group development. With an order backlog of EUR
36.59 million at the beginning of the year, in 2014 the company
should be able to continue its growth course on the basis of a
secured position.

The Binder+Co Group

Binder+Co is a specialist in the field of processing, environmental
and packaging technology and the world market leader in the screening
and glass recycling segments. The company was listed on the Vienna
Stock Exchange at the end of 2006 and is now part of the Third Market
in the mid market segment. The Binder+Co Group consists of Binder+Co
AG, the three fully owned subsidiaries Comec-Binder S.r.l., Bublon
GmbH and Binder+Co Machinery (Tianjin) Ltd., as well as the Statec
Binder GmbH joint venture (50.7%). In 2010, Binder+Co was awarded the
Austrian National Innovation Prize for its successful implementation
of inventive capacity. Moreover, in 2011 it received both the
Austrian National Prize for Work Safety for its introduction of
special safety measures for apprentices, and the Best Open Innovator
Award of the Zeppelin University Friedrichshafen as the top SME in
the D-A-CH region. In 2012, the company was also presented with the
TRIGOS Styria in the Ecology category for its efforts in the resource
conservation area.

Further inquiry note:
Karl Grabner, Member of the Management Board
Phone: +43/3112/800-363

end of announcement euro adhoc
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issuer: Binder+Co Aktiengesellschaft
Grazerstraße 19-25
A-8200 Gleisdorf
phone: +43 3112 800-363
FAX: +43 3112 800-320
mail: karl.grabner@binder-co.at
WWW: www.binder-co.com
sector: Machine Manufacturing
ISIN: AT000BINDER3
indexes: mid market
stockmarkets: Third Market: Wien
language: English