Stemmer Imaging revenue down 10%, but expects 2020 to pick up

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Stemmer Imaging has seen revenue decline by 10.3 per cent to €52.2m in the first half of 2020, because of difficult market conditions during the Covid-19 pandemic.

The company said that shifts in demand, particularly in the areas of sports and entertainment, infrastructure and automotive, had a negative impact.

But that medical and life sciences, pharmaceutical, food, logistics and packaging all showed stable to growing order patterns.

'Due to shifts on the demand side in the second quarter, the Covid-19 pandemic has also left a clear mark on our business,' commented Arne Dehn, CEO of Stemmer Imaging. 'However, we are convinced that Stemmer Imaging will emerge stronger from this crisis. We have used this period of change to review our strategic focus on the emerging post-Covid-19 trends and further sharpen our priorities in line with our growth strategy. At the same time, we have been able to cushion the temporary downturn in business with intelligent cost management and will align our organisation even more clearly to our future goals with a dedicated programme in the second half of the year.'

Stemmer Imaging's gross profit margin fell slightly in the first half of the current fiscal year from (normalised) 36.8 per cent in the same period of the previous year to 36.5 per cent, due to the shift in the regional distribution of sales.

The operating result (EBITDA) in the first half of 2020 was €2.3m (EBITDA margin: 4.4 per cent), significantly below the previous year's level of (normalised) €6.0m (EBITDA margin normalised: 10.3 per cent). Here, the organic decline in sales and, in addition, the massively increasing currency effects from March onwards (net €0.8m) had a negative impact on earnings.

Stemmer Imaging had positive operating cash flow of €3.0m in the second quarter.

The future prospects for the business of the Infaimon Group – Stemmer Imaging acquired the firm in 2019 – particularly in Latin America, are considered to have deteriorated significantly in view of the ongoing Covid-19 pandemic and its economic impact. This leads to a value adjustment of €4.3m on the goodwill of the Infaimon Group in the consolidated financial statements for the first half of the year.

Stemmer Imaging said that while supply chain bottlenecks were well balanced in the first half of the year, demand in the second quarter was characterised by cautious demand planning and liquidity management on the part of the company's customers. This shift in demand had a significant impact on order intake.

Stemmer Imaging assumes that there will be a certain catch-up effect from the second quarter of 2020 on incoming orders in the further course of the year, which will be reflected in increasing revenue recognition in the second half of 2020.

The company expects continued positive development in the medical and life science, pharmaceutical, food, logistics and packaging sectors in the second half of 2020. The outlook for the automotive sector, on the other hand, predicts a continued weak development in demand.

For the sports and entertainment segment, the company expects to be able to make up for the loss of sales in the first half of the year in the second half on the basis of the order backlog. Overall, the company expects a slight delay in the resumption of incoming orders.

Stemmer Imaging expects revenues to be in the range of €105.0m to €120.0m for 2020, and earnings before interest, taxes, depreciation and amortisation (EBITDA) of €3.0m to €7.0m.

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