Business figures for the first six months of 2023: Company confirms half-year result

• Sales: Euro 116.1 million (previous year: Euro 130.8 million, -11 %)
• Incoming orders: Euro 94.0 million (previous year: Euro 159.3 million, -41 %)
• 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, confirms its business 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 hardly 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 S/4 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 159.3 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. In the first half of the year, Basler AG generated sales of Euro 43.8 million in the EMEA region (previous year: Euro 32.3 million), an increase of 35 %.

These market developments are also reflected in the statistics of the German Engineering Federation (VDMA) for German manufacturers of machine vision components. Accumulated for January through June, they still report a nominal increase in sales of 1 %, while new orders in the industry fell by -13 % in the same period. The reason why Basler AG is lagging behind the German machine vision components industry is due to its sales profile, which is more heavily weighted towards Asia.

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. Contrary to this, the organization was significantly expanded in the last two years and designed for further growth. Against the background of this development and the outlook for the coming quarters, the supervisory board and the management board recently decided on a restructuring program to return Basler AG to solid profitability as early as next year. 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 has already begun, so that the company can start the 2024 financial year in a solid position.

As a result of the expected lower sales revenues in the second half of the year and due to the one-time expenses associated with the restructuring, the company recently significantly adjusted its sales and earnings forecast for 2023. From now on, a sales corridor of between Euro 200 million to Euro 215 million is expected for the current fiscal year. Based on current planning, this sales corridor results in a pre-tax loss of between Euro 12 million – Euro 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 the third quarter of 2023 and will be further detailed in the Q3 reporting.

The full quarterly report can be viewed on the company’s website at (www.baslerweb.com).