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DGAP-News: KAP AG / Key word(s): Annual Report/Annual Results
KAP SHOWS POSITIVE DEVELOPMENT IN THE 2020 FINANCIAL YEAR DESPITE PANDEMIC AND SPEEDS UP THE ACTION PROGRAMME 'ACCELERATE'
Robust business performance during the pandemic
Eckehard Forberich, member and Spokesperson of the KAP AG Management Board: "We owe our robust business performance in these pandemic conditions mostly to our diversified investment approach with companies in leading market positions in niche markets. Additionally, we laid the foundation for returning to a strong concentration on the group's ongoing development with rigorous working capital management and by selling properties in Fulda. We concluded two bolt-on transactions and, moreover, we consolidated strategic improvement initiatives that had already been initiated into a single coordinated transformation programme. With Accelerate, we are creating an environment for profitable internal and external growth with a target of turning the KAP Group into a leading, forward-looking industrial holding company with lasting, improved profitability."
Accelerate - accelerated transformation by end of 2023
Accelerate puts a focus on six key points: boosting sales activity, increasing efficiency, safeguarding attractive opportunities for the future, optimising financial flexibility, increasing revenue and earning power and expanding the portfolio; and strengthening risk management across the group.
The focus on sales will be made stronger for all segments to accelerate organic growth in particular. This will also involve a special focus on ongoing efficiency increases. The future prospects of the business segments are being safeguarded with highly specialised development of applications and investment in existing and new sites. For the group's segments, focusing on the portfolio will mean leaner site and leadership structures as well as targeted mergers and acquisitions for inorganic growth. The KAP Group's overarching KPI and risk management systems will be expanded further and the group's controlling strengthened in order to manage these complex processes. The strategy programme is presented in detail in the 2020 Annual Report published today.
KAP already achieved further important Accelerate milestones during the first quarter of 2021 and executed two attractive transactions in the flexible films segment. The industrial holding company has significantly boosted its expertise and competence in the flexible films segment by acquiring AerO Coated Fabrics B.V., a highly specialised extrusion business and manufacturer of thermoplastic composites, and by increasing its investment in packaging specialist NOW Contec GmbH to 100%. Furthermore, we have increased the KAP Group's financial flexibility by selling our industrial property in Fulda. Given the construction work still required on it, the transaction is expected to close during the fourth quarter of this year.
Marten Julius, Chief Financial Officer of KAP AG: "We have sufficient financial flexibility to take advantage of other acquisition opportunities as part of our strategic alignment. Against a backdrop of ongoing crisis, the market offers us very interesting opportunities which we are carefully assessing. Furthermore, a swift conclusion to the sale of our it/services segment that we have initiated is at the top of our agenda for the 2021 financial year."
Revenue in the engineered products segment fell by a considerable 15.7% to €127.0 million (previous year: €150.7 million) during the 2020 financial year. This decline can be attributed to circumstances such as the temporary shutdown of production at sites in China, India and the United States, and temporary plant closures among customers in the segment's automotive sector. Normalised EBITDA doubled to €4.8 million (previous year: €2.4 million). The restructuring initiatives that were implemented demonstrated a noticeable impact.
The flexible films segment proved itself to be a winner of the crisis and utilised appealing market opportunities in spite of the uncertain market environment. Revenue achieved double-digit growth of 12.2%, coming to €100.1 million (previous year: €89.2 million). New sales opportunities arising during the pandemic included personal protective equipment for healthcare. An increase in swimming pool liner films was also achieved. Normalised EBITDA increased by a substantial 46.5% to €14.8 million (previous year: €10.1 million).
Revenue from the surface technologies segment amounted to €53.5 million (previous year: €64.1 million) during 2020 and was mainly affected by the sharp decline in automotive demand. Normalised EBITDA came in at €10.2 million (previous year: €13.7 million).
In the precision components segment, the pandemic caused revenue to decline by 20.0% to €39.6 million (previous year: €49.5 million). Normalised EBITDA reduced by 44.1% to €1.9 million (previous year: €3.4 million).
The it/services segment, which is held for sale, did not experience much impact from the pandemic apart from a few project delays. The segment's revenue fell slightly by 4.3% to €22.3 million (previous year: €23.3 million) during the reporting period. However, normalised EBITDA improved to €4.1 million (previous year: €3.0 million).
Overall, the data indicates that the pandemic's significant impacts could largely be absorbed thanks to the portfolio's diversified approach.
Strong cash flow and significant reduction of net debt
Positive outlook for 2021
The 2020 Annual Report is available to download at: https://www.kap.de/en/investor-relations/reports/annual-reports.
Kirchhoff Consult AG
About KAP AG
KAP AG is a listed industrial group in the upper midsize market that offers attractive growth opportunities in its respective niche markets. KAP AG focuses on four different business areas: engineered products, flexible films, surface technologies and precision components. Through targeted acquisitions, the company strengthens its existing business areas or exploits new market opportunities. KAP allows its shareholders to participate in its long-term profitable growth through a stable dividend. The group currently has 29 locations and around 2,700 employees in 12 countries. The shares of KAP AG are listed on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard, ISIN DE0006208408).
23.04.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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