Electronics Production | March 31, 2011

LPKF enjoys continued success

With a boost in earnings of 149%, LPKF produces its best performance to date in the 2010 financial year. The shareholders of the Garbsen-based laser specialist also have a lot to look forward to with a planned year-on-year doubling of the dividend to 40 Euro cents this year.
LPKF boosted revenue in 2010 by 60% to Euro 81 million – to slightly exceed its own forecast of Euro 79 million. The level of incoming orders rose from Euro 56 million (2009) to Euro 79 million. Earnings before interest and tax (EBIT) climbed from Euro 7 million to Euro 17 million – with a corresponding rise in the return on sales from 14% to 21%.

The Group generated revenues of Euro 20 million in the fourth quarter, producing an EBIT of more than Euro 2 million.
The 2010 financial year was characterized by a number of major orders with a total volume of Euro 14 million in the Cutting & Structuring Lasers segment.

“Although business with systems for laser direct structuring again played a major role, almost all the segments played a part in the enormous growth this time,” said CEO Dr. Ingo Bretthauer explaining the background to the business performance at the mechanical engineering company’s balance sheet press conference.

The only exception was the Thin-film Technologies segment that suffered from the general weakness in the solar market in 2010. However, LPKF is expecting a significant improvement in business in this segment as well in 2011. The company has just won a major order worth almost Euro 7 million for systems for the production of solar panels. This order heralds LPKF’s turnaround in the solar business which had slackened in the recent past.

The very robust balance sheet structure the company has enjoyed in the past remained almost unchanged with an equity ratio of 71%. “The investment in property, plant and equipment, and intangible assets doubled from Euro 4 million to Euro 8 million. We were able to finance these projects from our own cash flow,” explained CFO Kai Bentz. The cash flow from operating activities rose from Euro 11 million to Euro 13 million; the free cash flow was Euro 6 million (previous year Euro 8 million) despite the strong rise in investments.

The current situation in Japan naturally also has an impact on a technology company like LPKF. The effects of the disaster are not foreseeable at the present time. However, the emergency in Japan has no acute effect on the LPKF Group in terms of either the earnings situation or material procurement. In the 2010 financial year, the share of revenue attributable to business with Japan was only approx. 2 %. The expansion plans will be continued as soon as the situation in Japan has stabilized.

After the record-breaking 2010 financial year, the Management Board is optimistic about the future. Overall, if the global economy continues to develop positively, the Management Board forecasts that revenue in 2011 for the LPKF Group will be similar to that in the previous year. The internal structures will be significantly enlarged in 2011 in the face of the strong expansion of the company.

This will give rise to a corresponding increase in operating costs. The EBIT margin is therefore expected to lie between 15 and 19% in 2011. Bretthauer also sees opportunities for much stronger growth in business arising from more major orders, which have not yet been incorporated in the current forecasts.

If the economic background remains stable, the Management Board forecasts for the 2012 and 2013 financial years are for an average growth in revenues of around 10% per year, and a slight rise in EBIT margin.
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