IBU tec advanced materials AG (DE:IBU) beat its EBIT margin target for H117 despite bearing the increased costs associated with a new logistics facility and selective investment in engineering and sales personnel. Sales benefitted from diversification into the fast growing battery energy storage market. Management is pushing ahead to acquire a third site where it can manufacture more complicated materials by 2018 at the latest.
Benefit of diversification
H117 revenues grew by 3% year-on-year to €9.4m, ahead of management’s target. The demand for battery materials for e-mobility and stationary energy storage continued to grow very strongly, but this was partly offset by a reduction in sales of catalytically active powders for the automotive industry. Stripping out the costs of the IPO in March, EBIT margin dropped by 7pp to 20%, slightly ahead of management’s short-term target of 19%. The decrease was the result of selective investment in sales and engineering capability, the new logistics site and the ongoing costs of a listing. Pre-tax profit (adjusted for IPO costs) reduced by 22% to €1.9m. Following the IPO, which raised €16.5m (gross) at €16.5/share, the group moved from €2.0m net debt at end FY16 to €13.3m net cash.
Good progress on execution of strategy
The new logistics facility improves service levels for customers and frees up space for a new rotary kiln that can manufacture larger batches of materials more quickly for customers. Investment in engineering personnel is intended to accelerate the development of new materials and drive efficiency gains, while the increase in sales people is intended to expand the customer base internationally. The Placing provides funding to purchase an additional site where more complex and hazardous materials can be processed. Management expect to complete this by FY18 at the latest.
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