- Adjusted FY 2018 revenue and earnings guidance hit
- 2018 revenue: EUR 50.7 million compared with EUR 46.9 million in 2017 (+8%)
- 2018 EBITDA: EUR 3.0 million compared with EUR 7.2 million in 2017
- Services business reports intra-year upturn and strong Q4 after unusually weak start to 2018; +32% growth in Q4
- Major investments for next growth steps completed in 2018
- At year-end, available liquidity of EUR 16.7 million at a comfortable level for the company’s further development and growth
- “Power 20+” performance program launched
Würzburg, 7 March 2019. Based on preliminary results, va-Q-tec AG (ISIN DE0006636681 / WKN 663668), a technologically leading supplier of highly efficient products and solutions in the thermal insulation and TempChain logistics area, reached the lower end of its adjusted 2018 revenue and earnings guidance with an improvement in the EBITDA margin in the second half of the year. Having grown by an average of 25% per year over the past five years, the company fell short of its initial expectations in 2018. At the same time, its investments and initiatives for growth and structures planned as part of the IPO were completed ahead of schedule. Since September 2016, the Group has invested around EUR 70 million in its business expansion and internationalisation. This framework lays the foundation for the Group’s next steps.
Stefan Döhmen, CFO of va-Q-tec AG: “Even though business trends in 2018 fell short of our expectations, the outlook at the end of the year brightened considerably. We have completed all of our major growth investments, we have achieved important progress with projects for major customers, and our high-margin Services business – the company’s main value driver – is picking up again. Together with our Power 20+ performance program, we see ourselves back on track for further growth and rising profitability after a challenging 2018.”
Revenue in the 2018 financial year was up by 8% to EUR 50.7 million (previous year EUR 46.9 million). Total income amounted to EUR 61.2 million, reflecting 7% year-on-year growth (previous year EUR 57.4 million). The Products business (sale of VIPs and PCMs) – which reported continued strength – contributed 40% to Group revenue with EUR 20.1 million (previous year EUR 18.0 million, +12%). The Systems area (thermal packaging) was stable, generating around 22% of consolidated revenue at EUR 11.3 million (previous year EUR 10.8 million, +5%). The high-margin Services business (serviced rental of containers and boxes) generated EUR 18.4 million or around 36% of Group revenue (previous year EUR 17.4 million), corresponding to 6% growth. The following table shows the quarterly revenue trends:
Quarterly revenue trends (in EUR million)
| 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | 2018 |
Products | 18.0 | 4.9 | 5.7 | 4.9 | 4.6 | 20.1 |
y/y | 59% | 26% | 24% | 12% | -9% | 12% |
Systems | 10.8 | 3.2 | 2.4 | 2.5 | 3.2 | 11.3 |
y/y | 4% | 4% | 35% | -21% | 18% | 5% |
Services | 17.4 | 3.7 | 4.5 | 4.6 | 5.6 | 18.4 |
y/y | 32% | -12% | -2% | 5% | 32% | 6% |
Total | 46.9 | 12.0 | 12.9 | 12.2 | 13.6 | 50.7 |
y/y | 32% | 6% | 16% | 1% | 11% | 8% |
Earnings before interest, tax, depreciation and amortisation (EBITDA) reported a marked reduction to EUR 3.0 million (previous year EUR 7.2 million, -58%). The EBITDA margin measured in terms of total income consequently stood at 5% in the reporting period, compared with 13% in the previous year. In addition to the high share of revenue accounted for by the lower-margin Products business, EBITDA was also negatively impacted by advance investments in additional personnel and internationalisation as well as one-time relocation and double costs incurred in connection with the expansion of locations.
In the strategically important Services business, va-Q-tec recorded a significant upswing during the course of 2018 after an unusually weak start and achieved its highest quarterly revenue to date in the fourth quarter at EUR 5.6 million. A significantly broadened customer base is the reason for this recovery. While service revenues generated with a major pharmaceutical customer decreased by almost one half year-on-year due to the customer’s own reduction in business, the revenue contribution generated by all other customers grew significantly by 32% in 2018.
The Group largely completed the most important investments for its further growth towards revenue of EUR 100 million already in 2018. Given this, va-Q-tec had comfortable liquidity as of 31 December 2018 with bank balances plus open credit lines totalling EUR 16.7 million.
With its Power 20+ program, va-Q-tec is combining a forward-looking attitude in order to implement its growth strategy over the coming years, based on the investments it has realised and its technology platform. The Power 20+ program has two clear strategic priorities:
- Focus on profitable revenue growth, e.g. by optimising sales processes in the Services business, inter alia with a new CRM system
- Focus on continuous cost efficiency, e.g. in purchasing, network management and production
“For each of the two strategic priorities, we already have numerous specific projects. Not all of the projects will prove to be great successes in equal measure. We are aware of this. Our focus for 2019 is quite clearly on improving our EBITDA margin and on dynamic revenue growth. The Power 20+ program will help us achieve this,” comments Dr. Joachim Kuhn, CEO and founder of va-Q-tec AG.
The complete Annual Report 2018 and guidance for FY 2019 will be published on 29 March 2019.
Read more about va-Q-tec investor relations here: https://ir.va-q-tec.com/websites/vaqtec/English/1/va-q-tec-investor-relations.html