Annual financial statements 2018 published

Kölleda, 29 April 2019 - The Funkwerk Group, one of the leading technology providers of innovative communication, information and security systems, fully achieved or exceeded its revenue and earnings targets in the 2018 financial year. Consolidated sales increased by 6.5 % year-on-year to € 82.7 million (previous year: € 77.6 million) and were therefore within the forecast range of € 80 million to € 85 million, which was raised in August 2018.

The Group's operating result grew even more strongly: from EUR 7.2 million in the previous year to EUR 11.4 million. This was due in particular to higher underlying business, a high-margin product mix and high capacity utilisation. In addition, the elimination of extraordinary expenses recognised in the previous year in connection with proceedings pending in Algeria contributed to the increase in earnings. Consolidated net profit increased by % 69.3 in the 2018 financial year to EUR 7.4 million (previous year: EUR 4.4 million).

The Executive Board and Supervisory Board will propose to the Annual General Meeting that a dividend of €0.30 (previous year: €0.25) per share be paid from the net retained profits of the parent company Funkwerk AG, which amount to around €2.5 million. This would correspond to a total dividend payout of EUR 2.4 million (previous year: EUR 2.0 million).

The Funkwerk Group's net assets and financial position were further stabilised thanks to the good earnings performance: The equity ratio rose from % 43.4 to % 46.8, while cash and cash equivalents totalled EUR 28.2 million at the end of 2018 (previous year: EUR 16.6 million). Cash flow from operating activities totalled EUR 14.9 million (previous year: EUR 8.0 million). The basis for 2019 is also positive: the Group's incoming orders increased from EUR 85.2 million in the previous year to EUR 94.0 million, while the order backlog as at 31 December 2018 rose to EUR 70.0 million (31 December 2017: EUR 58.1 million).

In the 2019 financial year, Funkwerk anticipates sales growth of at least 6 %, to which all divisions are expected to contribute, taking into account the positive industry trend. From today's perspective, the operating result will amount to around €10 million. The main reasons for the slight reduction compared to the very good 2018 earnings level are the margin mix resulting from the orders to be delivered in the respective financial year as well as expenses for the market launch of two new management systems.

In the train radio division, Funkwerk continues to focus on the profitable software business and the service offering. In development, the focus is on further successor technologies for the GSM-R standard as well as radio data systems for the fast-growing ETCS (European Train Control System) market. In the Passenger Information division, improving the market position for complex management software in national and international business continues to be a priority. In the Video Systems division, Funkwerk aims in particular to improve profit margins and drive forward the internationalisation of its activities by opening up new distribution channels. The distribution of the new management systems „posa palleon“ and „optisafe“ will play a central role in this.

In addition, IoT applications are continuously being integrated into Funkwerk systems in all three divisions. This enhancement of products with intelligent functions that offer customers added value and enable significantly more efficient resource management creates expansion opportunities for Funkwerk in the context of increasing digitalisation.