Corprate News: Slight decline in sales; growth in core German market

  • Sales down slightly by 1 per cent to EUR 47.6 million in the nine-month period
  • Continuing growth in core German market with 14 per cent EBIT margin
  • Fall in operating income to EUR 4.2million
  • Net income EUR 3.0 million
  • Outlook for 2019: sales at the previous year’s level overall, with positive business performance in Germany contrasting with a decline in international business; operating EBIT margin of 8 to 9 per cent expected

The SYZYGY Group generated sales of EUR 47.6 million in the first nine months of 2019, representing a slight decline of 1 per cent compared with the same period in the previous year. The core German market again delivered solid growth, with sales of EUR 36.3 million, resulting in an EBIT margin of 14 per cent. Operating income (EBIT) decreased by 8 per cent to EUR 4.2 million, with the EBIT margin declining slightly from 9.5 per cent to 8.7 per cent.

Earnings before tax stood at EUR 4.0 million, while net income was EUR 3.0 million. Earnings per share amounted to EUR 0.22 overall and EUR 0.06 in the third quarter.

Liquid funds and securities declined from EUR 17.7 million to EUR 7.2 million in the nine-month period. This figure includes the dividend of EUR 5.4 million paid on June 12, 2019.

Multiple new client wins in the German market suggest that performance and growth in the core market will remain strong.

  Q3-2019 Q3-2018 Change 9M-2019 9M-2018 Change
Sales in kEUR 16,065 15,839 1% 47,631 48,062 -1%
EBIT in kEUR 1,355 1,751 -23% 4,163 4,545 -8%
EBIT margin 8.4% 11.1% -2.6pp 8,7% 9.5% -0,7pp
Financial income in kEUR -102 100 n.a -121 335 n.a
Earnings before tax in kEUR 1,253 1,851 -32% 4,042 4,880 -17%
Net income in kEUR 915 1,369 -33% 3,007 3,693 -19%
Earnings per share in EUR 0.06 0.10 -40% 0.22 0.27 -19%
Operatiing cash folw in kEUR -65 4,314 n.a -6,294 9,205 n.a

The positive sales trend in the core German market was unable to offset the weaker than expected performance of the international companies. Overall, the softer economy, especially in the UK market, is having an adverse impact on the SYZYGY Group’s order book. Accordingly, SYZYGY AG expects sales to remain at the prior-year level in the current financial year. Restructuring charges from international operations will be somewhat higher, with the result that an operating EBIT margin of 8 to 9 per cent is expected.

The full quarterly report will be available at here from November 7, 2019.