In the first three quarters of 2022, the bottom line was a loss of 21.4 million euros, as the company announced on Tuesday. In the same period of the previous year, a profit of 7.6 million euros had been brought in. A restructuring program is now underway under the new leadership.
The loss per share (EPS) this year between January and September was 3.3 euros. In the prior-year period, a small profit of 10 cents per share had been achieved.
“Changing bottlenecks in the supply of materials and, in some cases, massive increases in the costs of preliminary products and materials also shaped production conditions in Europe and North America in the third quarter,” reported CEO Sebastian Wolf. The missing parts situation has recently improved slightly. “For example, we’re getting more chassis again,” says the new company boss. However, the management does not expect a real relaxation until mid-2023.
“Higher material costs”
“Since the beginning of the month we have been passing on some of the higher material costs to our customers by means of renewed price adjustments for new offers,” explained Wolf.
Between January and September, the sales proceeds of Rosenbauer International AG “despite the difficult supply of materials” at 651.2 million euros were roughly at the level of the same period of the previous year (649.5 million euros), as the group also announced.
The loss before interest and taxes (EBIT) in the nine-month period “as a result of the lower gross profit and increased structural costs – specifically the expenses for sales and administration -” was 30.5 million euros. A year ago, Rosenbauer had posted an operating profit of 14 million euros.
The implementation of the first restructuring measures burdened the EBIT this year with 5.6 million euros. With the change at the top of the group at the beginning of the third quarter – Wolf replaced CEO Dieter Siegel on August 1 – a “reorganization of the group of companies” began. A comprehensive restructuring program includes short and medium-term measures “to secure earnings, reduce manufacturing costs and harden the business model”.
Order situation intact
Cash flow from operating activities was negative at EUR 126.5 million in the first three quarters “because of the larger inventories, higher supplier prices and the increase in receivables since the beginning of the year”, compared to minus EUR 52.3 million in the same period last year. Equity as a percentage of total assets decreased year-on-year from 19.6 to 16.4 percent.
In any case, the order situation is intact. According to the information, incoming orders increased by 6 percent to EUR 825.4 million. The order backlog at the end of September grew year-on-year from around EUR 1.17 billion to EUR 1.36 billion and was “still very solid”.
The order book is full and the situation with missing parts has improved slightly. The Group Board of Management therefore confirmed its outlook for the entire 2022 financial year. Based on a high order backlog – taking into account the continuing tense situation in the procurement of chassis and other components – sales of around EUR 1 billion and a positive EBIT are expected.
Experience has shown that the global firefighting industry follows the general economy at a distance of several months. The order books are “well filled”, the tendering activity is “very active”. At the same time, however, the ongoing supply chain difficulties and the pressure on the energy and raw materials markets caused by the Russian invasion of Ukraine made for “very uncertain production conditions”, which is why the industry is expected to move sideways this year.
As of September 30, 2022, Rosenbauer employed 4,088 people worldwide. On the same date last year, there were 4,004 jobs at the fire engine manufacturer.