DGAP-News: VARTA AG / Key word(s): Preliminary Results
Corporate News on the preliminary, unaudited figures for 2020
VARTA AG exceeds guidance, announces first-ever dividend payments
Following a year of record revenue results and the successful integration of the Household Batteries segment, VARTA is today also presenting its new brand identity. With the claim "Empowering Independence", moving forwards the Group is underlining its credentials as a technology company that will shape the future of battery technology to support a more independent life.
Herbert Schein, CEO of VARTA AG: "We recorded growth of 140% in the prior year. Organic growth alone amounted to almost 50% - a historic result! All business segments have significantly surpassed the success of the previous year. Our small lithium-ion "CoinPower" batteries, for which demand on the market continues to be strong, remain growth drivers. Our strategy of capitalising on the brand business with our household batteries has paid off. With our new brand identity, we want to consolidate these historic developments and successful reintegration. The modernised brand strengthens VARTA as we move ahead into the future in which we will continue to grow and above all remain profitable."
Group revenue rose by approximately 140% to around € 870m during fiscal year 2020. Excluding the first-time consolidation of VARTA Consumer, this growth stands at around 47%. By scaling the business model, growth in operating earnings outpaced that of revenue. Adjusted EBITDA increased by around 145% to approximately € 239m. Excluding the first-time consolidation of the Consumer business, this growth amounts to around 90%. The adjusted EBITDA margin stands at around 27.5% (previous year: 26.9%).
Very strong growth for the "Microbatteries & Solutions" segment in fiscal year 2020
Revenue in the Microbatteries & Solutions segment increased very dynamically by 49% to approximately € 508m. By far the strongest revenue growth is again being recorded for rechargeable lithium-ion batteries for high-tech consumer products, particularly Premium True Wireless Stereo Headsets (TWS). This is a consequence of continued high customer demand in a market that is growing in volume by around 30% annually. As a leader in technology and innovation, VARTA AG is growing significantly faster than the market as a whole and has established a highly successful business model.
VARTA has been able to further expand its market position in the rechargeable hearing aid segment. High growth has continued in its business with smart, modular energy solutions (Power Pack Solutions) due to the new customer projects that were initiated over the course of the prior year.
Once again, there was a step-change improvement in adjusted EBITDA, rising on this occasion by 96% to approximately € 187m, comfortably exceeding revenue growth in the process. The adjusted EBITDA margin has markedly improved by approximately 8.9 percentage points and now amounts to 36.9% of revenue.
Household Batteries segment makes further positive contribution to growth
The Household Batteries segment encompasses Consumer Batteries in addition to the energy storage solutions business. In the previous year, only the energy storage solutions business was included in the segment reporting. The revenue share of Consumer Batteries is around 90% and Consumer Batteries has developed better than expected during the reporting period. Profitability has improved during the year by focusing on the brand business, while the energy storage solutions business has seen very dynamic growth that outpaced the market.
As a technology company, VARTA is capitalising on the consequent further development of its logo with the redesign of its brand identity. The distinctive "VARTA beam", a V-shaped ray of light that has always been part of the logo, has been retained as a key element, refined and given elevated status within the new identity. The font has been modernized and reflects VARTA's realignment as a technology company. With its new brand claim "Empowering Independence", VARTA is placing an even greater focus on its customers and partners in addition to underlining its corporate vision: We are defining the future of battery technology to empower more independent lifes" The timing of the new brand identity is deliberate: one year after the successful reintegration of the Household Batteries segment and looking back on a year of historical business development.
Outlook: Further revenue growth and above-average profit increase expected
The Group is anticipating high organic revenue growth and a significant double-digit percentage profit increase for the current fiscal year. Revenue is expected to total around € 940m. Growth is above all expected in the second half of the year. Above-average growth to up to 30% of revenue is anticipated for the relative margin of adjusted operating income. This equates to an increase of up to 2.5 percentage points and underscores the VARTA Group's earning power. The demand for rechargeable VARTA lithium-ion batteries for high-tech consumer products, above all TWS (True Wireless Stereo Headsets), remains very high. As a leader in technology and innovation, VARTA is benefiting from the trend towards ever smaller and more powerful button cell batteries.
VARTA AG has benefitted from a funding commitment totaling around € 300m as part of an Important Common Project of European Interest (ICPEI). The funds are to be put towards research and development in lithium-ion technology and the development of new lithium-ion batteries. In the fourth quarter of the year, VARTA will start operating a pilot line for the automated production of larger battery formats at its Ellwangen site.
The audited financial statements for fiscal year 2020 will be published on March 31, 2021.
Preliminary results can be found at:
About VARTA AG
18.02.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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