Preliminary business figures for 1st HY 2023: EBT break even in the first half of the year, continued market weakness requires restructuring and a significant forecast adjustment for 2023

• Sales: Euro 116.1 million (previous year: Euro 130.8 million, -11 %)
• Incoming orders: Euro 94.0 million (previous year: Euro 147.9 million, -36 %)
• EBITDA: Euro 10.7 million (previous year: Euro 23.0 million, -53 %)
• Pre-tax result: Euro 0.2 million (previous year: Euro 14.8 million, -99 %)
• Pre-tax return: 0.2 % (previous year: 11.3 %)
• Free cash flow: Euro -9.6 million (previous year: Euro -34.4 million)
• Forecast adjustment 2023: sales Euro 200 – 215 million, pre-tax loss Euro 12 – 20 million

Today, Basler AG, a leading manufacturer of image processing components for computer vision applications, presents its preliminary figures for the first half of 2023.

The Basler group closed the first six months of 2023 with sales of Euro 116.1 million (previous year: Euro 130.8 million, -11 %) as well as a pre-tax result of Euro 0.2 million (previous year: Euro 14.8 million), representing a pre-tax return rate of 0.2 % (previous year: 11.3 %). The cost reduction program initiated at the beginning of the second quarter showed the planned effect and ensured a break-even pre-tax result despite the relatively low sales level, which was at the lower end of the forecast corridor.

The operating cash flow amounted to Euro -1.0 million (previous year: Euro -6.1 million). This is the result of a break even in the first half of the year and a further increase in inventories. The cash flow from investing activities amounted to Euro -8.6 million (previous year: Euro -28.3 million) and was minimal affected by special effects from M&A transactions compared to the previous year. Investments in fixed assets were at an increased level due to the move into the new company building and the ERP system change to SAP S4/Hana. As a result, this led to a free cash flow of Euro -9.6 million (previous year: Euro -34.4 million).

As expected, the strong incoming orders due to the supply chain crisis of Euro 147.9 million in the first half of 2022 could not be reached in the first six months of 2023 and amounted to Euro 94.0 million. In the course of the second quarter, new orders decreased to Euro 39.9 million. The main reasons for the decline were continued weak demand from the consumer electronics, logistics and laboratory automation equipment industries in Asia and North America, as well as the lack of economic recovery in China. In addition, the strong increase in our customers‘ inventory levels as a result of over-ordering during the chip crisis significantly dampened the already low demand for capital goods. The rise in interest rates also had a negative impact on capital spending in our key vertical markets. Demand in Europe, which had been strong until the second quarter 2023, showed the first signs of weakening towards the end of the reporting period.

Due to the continued weak demand in the Asian and American markets and increasing signs of recession in Europe, the management currently does not expect demand to recover before the beginning of 2024. The recovery will also take longer than previously assumed, so the record sales levels of 2022 are unlikely to be reached again until 2024 earliest. Against this background, the supervisory board and the management board have decided on a restructuring program that includes the socially responsible reduction of approximately 200 full-time positions in Germany and abroad, as well as the continuation of restrictive management of operational expenses and investments. However, the company’s strategy of evolving from a camera manufacturer to a full-line supplier in the field of computer vision will continue unchanged. Implementation of the restructuring program will begin immediately so that the company can start the 2024 financial year in a solid position.

As a result of the expected lower sales in the second half of the year and the one-time costs associated with the restructuring, the company significantly adjusts its sales and earnings forecast for 2023. While the management previously expected sales of between Euro 235 to 265 million and an EBT margin of between 5 % and 8 %, the company now expects sales of between Euro 200 to 215 million for the full year. Based on current planning, this sales corridor results in a pre-tax loss of between Euro 12 – 20 million including restructuring-related non-recurring expenses of around Euro 11 -13 million. The majority of the restructuring charges are expected to be incurred in third quarter of 2023 and will be further detailed in the Q3 reporting.

Against the background of the current market weakness, the current medium-term planning of reaching approximately Euro 400 million in 2025 appears to be too ambitious and will have to be revised. This medium-term planning will be updated at the turn of the year, when the duration and intensity of the market weakness can be better assessed.

The publication of the full half-year report is scheduled for August 10, 2023. This will provide further background information on the performance in the first half of the year and on the restructuring program.