InTiCa Systems AG: Interim report for 9M 2022 published – Third quarter stronger than in the previous year

• Group sales amounted to EUR 71.2 million (9M 2021: EUR 75.5 million)
• EBIT margin of 3.0% in line with expectations (9M 2021: 3.9%)
• Orders on hand remain high; outlook confirmed

InTiCa Systems AG (Prime Standard, ISIN DE0005874846, ticker IS7) today published the interim report for the first nine months of 2022. While sales in the first six months were below the prior-year period, which was dominated by catch-up effects and and economic recovery, in the third quarter InTiCa registered a slight rise in sales. Since the product mix in demand was again favourable, the margin also improved slightly. Overall, recording Group sales of EUR 71.2 million (9M 2021: EUR 75.5 million), an EBIT margin of 3.0% (9M 2021: 3.9%) and an operating cash flow of EUR 3.8 million (9M 2021: minus 2.2 million), InTiCa’s performance in the first nine months was fully in line with expectations.

Dr. Gregor Wasle, CEO of InTiCa Systems AG comments as follows on the business development: “While our focus at the half-year stage was still mainly on costs, business gained momentum after a weak July. As planned, our current product developments have generated initial orders for stators and actuators for e-mobility and in the Industry & Infrastructure segment for power electronics for stationary charging infrastructure. InTiCa’s robust business performance highlights our good market position for end-to-end electrification, digitalization and automation of the automotive sector, industry and infrastructure.”

Earnings, asset and financial position

Group sales declined by 5.8% year-on-year to EUR 71.2 million in the first nine months of 2022 (9M 2021: EUR 75.5 million). In the Automotive segment, sales dropped 4.7% year-on-year to EUR 54.6 million (9M 2021: EUR 57.3 million) while sales in the Industry & Infrastructure segment decreased by 9.1% to EUR 16.6 million (9M 2021: EUR 18.2 million).

The ratio of material costs to total output remained relatively high in the reporting period at 63.2% but was slightly lower than in the prior-year period (9M 2021: 64.1%) despite the substantial rises in the price of raw materials and industrial starting products. By contrast, the personnel expense ratio (including agency staff) increased slightly from 21.3% to 22.2% due to wage rises. At the same time, other expenses decreased from EUR 10.7 million in the prior-year period to EUR 9.0 million. This was principally because expenses for agency staff, which are included in other operating expenses, dropped to EUR 2.9 million (9M 2021: EUR 4.8 million).

EBITDA (earnings before interest, taxes, depreciation and amortization) decreased to EUR 6.6 million year-on-year (9M 2021: EUR 7.2 million). The EBITDA margin, however, was only slightly below the previous year’s level at 9.3% (9M 2021: 9.6%). EBIT (earnings before interest and taxes) was also clearly positive again at EUR 2.1 million (9M 2021: EUR 2.9 million) and the EBIT margin of 3.0% was in line with expectations (9M 2021: 3.9%). At segment level, Automotive reported EBIT of EUR 1.8 million in the first nine months of 2022 (9M 2021: EUR 1.9 million) and the Industry & Infrastructure segment reported EBIT of EUR 0.3 million (9M 2021: EUR 1.0 million).

The financial result was minus EUR 0.4 million in the reporting period (9M 2021: minus EUR 0.4 million) and tax income was EUR 0.5 million (9M 2021: EUR 0.6 million). Group net income therefore amounted to EUR 1.2 million in the first three quarters (9M 2021: EUR 1.9 million). Earnings per share were EUR 0.28 (9M 2021: EUR 0.44).

The operating cash flow improved considerably in the third quarter to a total of EUR 3.8 million in the reporting period (9M 2021: minus EUR 2.2 million). The main reason for this was the deliberate reduction in inventories in response to volatile call-off patterns and the altered situation on the procurement market. To finance the planned increase in capital expenditure, two project-related loans were drawn. This resulted in a total cash outflow of EUR 1.2 million in the reporting period (9M 2021: outflow of EUR 7.6 million). The equity ratio remained solid at 33.2% (December 31, 2021: 33.7%).

Outlook

The business environment is currently dominated by exceptional challenges due to the still smoldering pandemic and the ongoing war in Ukraine. The leading economic research institutes predict that the associated effects on supply chains, the availability of energy, inflation and interest rates will lead to an appreciable economic slowdown around the world. Germany is particularly badly affected because of its high dependence on gas. At InTiCa, the additional costs caused by higher electricity and gas prices have been kept in check by existing contracts and a relatively low energy intensity.

Though short-term risks remain high, opportunities dominate in the mid-term. Electrification with end-to-end coupling of the climate-relevant sectors – energy, industry, buildings and mobility – is essential to meet the ambitious climate targets. That entails a need for high investment in infrastructure and smart technologies. In addition to new projects for assemblies and EMC filters in the Automotive segment, the charging infrastructure in particular is a growing area of focus for InTiCa. An increase in inquiries can also be observed for inverter technology for photovoltaic systems. As of September 30, 2022, orders on hand, which reflect customers’ requirements for a period of 18 months, amounted to EUR 107 million (September 30, 2021: EUR 117 million). 82% of orders were for the Automotive segment (9M 2021: 78%).

„Although order offtake by customers remains volatile, overall it is considerably more reliable than it seemed three months ago. Therefore short-time working in Passau, which was introduced in August as a precaution, ended after just one month and personnel at the site in the Czech Republic was increased slightly. Since the fourth quarter has started positively as well and order books are full, we are very much on track to meet our full-year targets. What is more, we are pleased, that the planned production of wage-intensive products in Ukraine is expected to start in the coming months at least on small-scale”, says Günther Kneidinger of the Board of Directors.

At present, the Board of Directors therefore still assumes that, taking into account the particular challenges of 2022 and the currently available customer data, Group sales will be between EUR 85.0 million and EUR 100.0 million, while the EBIT margin will be between 2.5% and 3.5%. However, unforeseeable negative effects could affect suppliers, have a direct impact on InTiCa Systems, or affect its customers, resulting in an inability to meet expectations.

The complete interim report for 9M 2022 is available for download from the Investor Relations section of InTiCa Systems’ website at www.intica-systems.com. Regarding the process made following the decision to change the legal status to a European stock corporation (SE), this will probably be the last financial report published as InTiCa Systems AG. Currently, a codetermination agreement to guarantee the rights of employees to participate in corporate decision-making is being negotiated. The next step will be entry in the commercial register.

Forward-looking statements and predictions

This press release contains statements and forecasts referring to the future development of InTiCa Systems AG which are based on current assumptions and estimates by the management that are made using information currently available to them. If the underlying assumptions do not materialize, the actual figures may differ substantially from such estimates. Future developments and results are in fact dependent on a large number of factors; they contain different risks and imponderables and are based on assumptions that may not be accurate. We neither intend nor assume any obligation to update forward-looking statements on an ongoing basis as these are based exclusively on the circumstances prevailing on the date of publication.