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    RABA   HU0000073457

RÁBA JÁRMÛIPARI HOLDING NYRT.

(RABA)
  Report
End-of-day quote. End-of-day quote Budapest Stock Exchange - 10/25
1450 HUF   0.00%
09/13RÁBA JÁRMÛIPARI : Modification of the shareholder's submission
PU
09/09RÁBA JÁRMÛIPARI : Supplement to the Notice of the General Meeting
PU
08/25RÁBA JÁRMÛIPARI : 2021. h1
PU
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Rába Jármûipari : 2021. H1

08/25/2021 | 11:41am EDT

Report on the Results of Rába Plc. in H1 of 2021

Unaudited, consolidated half-year report

according to the International Financial Reporting Standards (IFRS)

Company:

RÁBA Automotive Holding Plc.

Company address:

H-9027 Győr. Martin u. 1.

Sector:

Machine industry

Period:

H1 of 2021

E-mail:

adam.steszli@raba.hu

Investor's contact person:

Ádám Steszli

MANAGEMENT REPORT

MAIN RESULTS OF THE COMPANY

  • H1 of 2021 marked the recovery period from the pandemic and as such was of key importance in terms of strengthening market positions and securing competitiveness sustainable in the long run. Meeting the increased demand for sales in a flexible manner and overcoming the difficulties in the supply chain both meant a substantial challenge for the Company. The series of strategic actions implemented in the second half of 2020 provides a good basis for the flexible adjustment, with the focus on digitisation and technological development, as well as on restructuring and cost optimisation. Bottlenecks in production capacities manifest across the board resulted in increased lead times and purchase prices, which highlight the importance of integrity and flexi- bility, in the interest of maintaining profitability.
  • Q2 of 2021 was characterised by continued significant economic activity on the global market, as a result of which all major markets of Rába show ed a significant increase in demand. An exception to this is the Russian bus market and theproject-typeoff-highway segment, where sales in H1 of 2021 remained below the level of the base period in 2020. It should be borne in mind, for the evaluation of both the quarter and the first 6-month period, that the negative effects of the COVID-19 pandemic severely impacted the base period. The sales trends of the Rába Group in H1 of 2021 and their regional distribution duly represent global trends in demand. Group-level sales reached HUF 23.7 billion upon an increase by 23.4 per cent in H1 and HUF 12.3 billion upon an increase by 67.6 per cent in Q2. The Axle and the Components business units contributed a 42.2 and a 41.8 per cent growth respectively, while the Vehicle business unit contributed a decline by 60.7 per cent. The sales figures of the Vehicle business unit were fun- damentally influenced by the fact, that as a result of the crisis management measures introduced in 2020, the production of steel structures for civilian applications was transferred from the Ve- hicle business unit to the Axle business unit. In terms of the exchange rate environment, in the exchange rates of the USD representing a lesser portion in the company's foreign exchange turnover, there was a decline by 5.2 per cent, and in the EUR, representing a more substantial portion of FX sales, there was an increase by 3.7 per cent compared to the levels of the previous year.
  • Base material supply linked to the stable increase in demand within the heavy vehicle sector was secured through a substantial increase in delivery lead times and upon continuously in- creasing steel prices. The relaunch of steel manufacturing capacities operated only partially for variouscompany-specific reasons or withdrawn from production during the COVID-19 pan- demic, is done in a phased fashion only. The situation was further deteriorated by the funda- mental changes in supply and demand relations on the global market and in the Chinese trading position.
    As a result of the above, the steel market was, from November 2020 until the end of the first 6 months of this year, characterised by steadily growing prices, triggering various degrees, 50- 100 % (30 June, 2021) of base material price increase on the world market, which is reflected in metal products to a varying extent, depending on their complexity. Based on procurement information to date for the second half of the year, in the case of products with a lower level of

RÁBA Plc.'s consolidated report for H1 of 2021 in accor dance with the IFRS

complexity, further price increase is felt, whereas in higher-complexity product segments a market consolidation can be observed, attributable to the summer closures.

The above substantial increase in costs is passed on by the Rába Group to its trading partners as per the terms of the existing agreements and as a result of negotiations, with a quarterly delay in the case of the majority of the products and with a 6-month delay for more complete products and for products with orders fixed in the longer-term. These two factors, namely that until June of 2021, base material prices have shown a steadily increasing tendency and that the cost increase can be passed on to the customers with a time lag only, have a negative impact on the profit positions and margins of the group of companies in both Q1 and Q2 of 2021.

It is Rába's firm objective to neutralise these neg ative impacts following the stabilisation of world market prices through the enforcement in sales prices of the increase of purchase costs.

  • As a result of the increase in sales volume, capacity utilisation improved and at the same time there was significantly increasing price pressure exerted on the production activity in the case of all major cost elements. The Rába Group reacted to the volatility of external markets by in- creasing integrity and flexible adjustment based on the earlier crisis measures. As a result, gross margins reached 20.3 per cent in H1 of 2021 and 20.7 per cent in Q2 of 2021, significantly exceeding the value for the base period. The amount of gross profit generated atgroup-level is a tangible indication of the recovery after the crisis, achieved with increasing profitability: the gross profit of HUF 4,806 million, achieved in H1 of 2021, is 41.2 per cent, i.e. 1,403 million more than the value for the base period, whereas the increase in sales volume (23.4 per cent) and the increasing cost burden would have predicted less of an increase.
  • The balance of other revenues and expenditures amounted to HUF 888 million in profit during the review period, against the loss of HUF 450 million during the same period of the previous year. The profit of other activities during the base period included a real estate transaction car- ried out during Q2, with an impact on profits of HUF 815 million. The result of other activity during the base period included aone-off, unplanned write-off in the amount of HUF 296 million due to the unsustainability in accounting terms of the Ministry of Defence capacities.
  • To improve operating profitability, in addition to increasing the efficiency and flexibility of the manufacturing activity, the Company implemented controls of the general and overhead costs. The indirect costs declining by HUF 96 million on a year/year basis, upon increasing sales, made a substantial contribution to the outstanding operating profit of HUF 1,804 million. All business units made a positive contribution through profitable operation to thegroup-level operating profit. The operating profit of the Axle business unit was HUF 645 million in H1 of 2021, upon an efficiency of 5.6 per cent in Q2. The operating profit of the Components business unit was HUF 532 million in H1, upon an efficiency of 7.7 per cent in Q2. The production of civilian applications of the Vehicle business unit was successfully integrated into the Axle business unit, the role and position of the Vehicle business unit within the new structure seem to be stabilised. Accordingly, their operating activity was profitable both on a quarterly and 6-month basis, albeit at a different level. A real estate sale concluded in Q2 also contributed to the operating profit. This can be considered as a one-off, adjustment item: the impact of the transaction was HUF 815 million.
  • In terms of cash generating efficiency, an outstanding result has been achieved apart from theone-off, adjustment items as well. The EBITDA margin in both Q2 and H1 of 2021 exceeded the 9.0 per cent value, considered the industry benchmark. The group-level EBITDA without the one-off items in Q2 of 2021, amounted to 9.6 per cent and to 9.3 per cent in H1. As a result of the outstanding cash-generating efficiency, substantial increase in production volume and the one-off items, the group-level EBITDA exceeded HUF 3 billion, amounting to a total of HUF 3,009 million. The considerable cash generating efficiency was manifest in the case of both of the two key production business units as well: the Axle business unit achieved a 10.6 per cent EBITDA on sales, whereas the Components business unit reached 10.4 per cent in Q2 of 2021. The Vehicle business unit contributed to the group-level EBITDA with positive cash generating efficiency, albeit to a lesser extent.
  • The financial result in H1 of 2021 amounted to HUF 260 million, compared to the loss of HUF 651 million generated during the same period of the previous year. The financial performance was influenced by the realised exchange rate gain by HUF 290 million and the net interest bur- den of HUF 23 million.

2

RÁBA Plc.'s consolidated report for H1 of 2021 in accor dance with the IFRS

  • The total aggregate income and profit for H1 of 2021 amounted to HUF 1,826 million.
  • In H1 of 2021, the financial situation of the Rába group was characterised by a stable liquidity position in spite of theCOVID-19 pandemic period and the challenges of the recovery period that followed. The net borrowings amounted to HUF 7.5 billion at the end of the review period and declined by HUF 3.2 billion compared to the same period of 2020, however increased by HUF 1.0 billion compared to the situation at the end of the previous year. Of the factors influ- encing the level of net borrowings, the profitable operating activity, the increase in working cap- ital as a result of increasing production volumes, capital expenditures and the profit of the one- off real estate sale are noteworthy. The revaluation, due to exchange rate fluctuation, of loans, worth HUF 287 million, not involving cash movements, also contributed to the change in net borrowings.
  • The shareholder's equity increased by 12.6 per cent compared to the same period of the previ- ous year. The shareholder's equity per share reached HUF 1.612/share.

thousand HUF

H1 2020

H1 2021

Change

Q2 2020

Q2 2021

Change

Sales revenue

19 213 992

23 707 013

23.4%

7 357 953

12 330 277

67.6%

Gross profit

3 402 304

4 805 675

41.2%

935 803

2 555 364

173.1%

Gross margin

17.7%

20.3%

2.6%p

12.7%

20.7%

8%p

EBITDA

49 085

3 008 529

6029.2%

-400 493

1 995 459

598.3%

EBITDA level

0.3%

12.7%

12.4%p

-5.4%

16.2%

21.6%p

Operating profit

-1 102 069

1 804 113

263.7%

-982 432

1 405 535

243.1%

Net financial profit/loss

-651 315

260 119

139.9%

-15 844

193 934

1324.0%

Profit after tax for the current year

-1 901 286

1 826 064

196.0%

-1 048 345

1 462 356

239.5%

Total comprehensive income

-1 901 286

1 826 064

196.0%

-1 048 345

1 462 356

239.5%

GOAL AND STRATEGY OF THE BUSINESS

"The first six months of this year saw significant recovery in our most important markets, and Rába could take advantage of it with flexible and efficient production, based on its strategic partnerships. Owing to this we closed a very successful half-year, and our expectations are positive for the rest of the year as well. Our successful adaptation to the difficulties caused by the crisis was based on cost optimization and technological development, thus, once again, it has been proven that in order to increase our competitiveness and keep our key customers, we need the most modern infrastructure and machinery, which means continuous improvement. To this end, we will replace the current stabilization strategy - that has proven to be effective - with a modernization strategy, which focuses on modernizing our technology, equipment and real estate and strengthening our international technology partnerships. Our vision is a 21st century manufacturing company with the product portfolio, operation and efficiency required by our markets." - said Béla Hetzmann, Chairman-CEO of RÁBA Automotive Holding Plc.

BUSINESS ENVIRONMENT OF THE BUSINESS

  • Q2 of 2021 continued to be characterised by considerable sales activity, as a result of which there was considerable shipping demand for industrial raw materials and commercial goods. The high shipping volume leads to the increase in vehicle purchase prices and shipping tariffs, which suggest further positive outlooks on the market of vehicle manufacturers regarding the demand during the coming period. Accordingly, market conditions were favourable on all of Rába' princi- pal markets in H1 of 2021. Sales activities improved compared to the levels of a year earlier, impacted by the economic effects of theCOVID-19 pandemic. The only exception to this is the Russian bus market, where sales in H1 of 2021 did not reach the level of the base period in 2020.
  • In H1 of 2021, the European truck market exceeded the level of a year earlier, fundamentally impacted by the economic effects of theCOVID-19 pandemic, by 39 per cent. Market outlooks remain positive for the second half of the year, thus the high level of demand is likely to remain sustained in the European segment. The North American truck market expanded by 33 per cent

3

RÁBA Plc.'s consolidated report for H1 of 2021 in accor dance with the IFRS

compared to the base period in 2020. There was a significant growth in demand for Rába's agricultural products in Q2, which led to a 29 per cent increase in sales for H1 compared to the level of the previous year. Sales on the Russian truck market were in line with international trends, market growth reached 38 per cent in H1 of 2021. Contrarily, the Russian market of new buses is still below the H1 2020 level, the sales volume is some 2 per cent below the level of the previous year. The market of European passenger vehicles is characterised by increasing demand in H1 of 2021, new car registrations were 27 per cent higher than during the base period a year earlier.

  • Capacity shortages resulting from increased demands have led to increasing purchase prices upon uncertain supply conditions. The considerable increase in steel prices, by 14.6 per cent on a year/year basis experienced in Q1 of 2021 further increased in Q2 and reached 29 per cent compared to the same quarter of 2020. All this has led to 21.7 per cent higher purchase prices for steel purchases in H1 of 2021.
  • The increase in human resource expenses continued in Q2 of 2021 as well, the increase in wages continues to exert considerable pressure on operating activities. Improving operating ef- ficiency, to cover the continuously increasing wage costs is increasingly challenging for the Com- pany.
  • The third key cost item, energy costs have also started increasing significantly during Q2 of 2021. Annual price increase in Q3 amounted to 9.6 per cent, while energy price increase in H1 reached 6.9 per cent. All this led to the highest energy purchase prices of the past decade, having a negative impact on the profitability of production.
  • With regard to the exchange rate environment, a decrease by 5.2 per cent occurred in the case of the USD, representing a lesser proportion in the FX turnover of the company, whereas for the EUR, representing more substantial weight in the FX turnover, an increase by 3.7 per cent was seen in H1 of 2021 compared to the levels of the previous year.1

H1 2020

H1 2021

Change

Q2 2020

Q2 2021

Change

EURHUF - average

345.2

357.9

3.7%

351.5

354.8

0.9%

EURHUF - end of period

356.6

351.9

-1.3%

356.6

351.9

-1.3%

USDHUF - average

313.3

297.0

-5.2%

319.4

294.3

-7.9%

USDHUF - end of period

317.8

296.0

-6.9%

317.8

296.0

-6.9%

Changes in raw material prices*

107%

130%

21.7%

106%

136%

29.0%

Wage level**

390.0

426.6

9.4%

399.5

436.1

9.2%

Changes in energy prices**

198%

212%

6.9%

205%

225%

9.6%

*Rába indices - own calculation - base: 2007. Q1; a verage values for the period

**KSH (Central Statistical Office) national gross average wage (thousand HUF/month) -based on 05. 01 2021. data

***Rába indices - own calculation - base: Dec. 2004 .; average values for the period

SUMMARY OF RESULTS DURING THE REVIEW PERIOD

Rába Axle Ltd.

The sales revenue of Rába Axle Ltd. in H1 of 2021 a mounted to HUF 15.3 billion compared to HUF

10.7 billion achieved during the base period of 2020. This corresponds to an increase of 42.2 per

cent.

On the American marketthe sales revenue in the reporting period was USD 3.0 million, compared to the USD 5.5 million in H1 of 2020. This corresponds to a decrease of 45.4 per cent.

On the EU marketRába Axle Ltd.'s sales figures in HUF terms increas ed by 68.1 per cent, amounting to HUF 12.1 billion, compared to HUF 7.2 billion during the base period.

European exportsin H1 of 2021 exceeded the level of the base period by 82.9 per cent, amounting

1The average exchange rates were calculated based on the official FX exchange rates of the MNB. Source: http://www.mnb.hu/arfolyam-lekerdezes

4

RÁBA Plc.'s consolidated report for H1 of 2021 in accor dance with the IFRS

to EUR 26.7 million, against EUR 14.6 million in H1 of 2020. Sales figures are fundamentally influenced by the reorganisation of the civilian applications of the Vehicle business unit to the activities of the Axle business unit as a result of the crisis management measures of 2020.

Domestic salesbefore consolidation amounted to HUF 2,511 million, which represents an increase by 16.5 per cent compared to the HUF 2,155 million of the base period.

On the CIS andEast-Europeanmarkets the export sales revenues achieved by Rába Axle Ltd. in H1 of 2021 were 75.8 per cent lower than the base period in 2020, decreasing from EUR 3.3 million in the base period to EUR 0.8 million.

In the other markets, the sales revenue during the reporting period amounted to EUR 5.6 million, which was 180.0 per cent higher than the EUR 2.0 million turnover of the 2020 base period.

The operating result of the Company in H1 of 2021 was a profit of HUF 645 million, compared to HUF 313 million in losses during the same period of the previous year.

At EBITDA level, the operating profit of the Axle business unit was HUF 1,468 million compared to HUF 293 million registered a year earlier.

million HUF

H1 2020

H1 2021

Change

Q2 2020

Q2 2021

Change

America

1 731

896

-48.2%

716

591

-17.5%

EU - export

5 019

9 545

90.2%

1 824

5 014

174.9%

EU - domestic

2 155

2 511

16.5%

1 025

1 274

24.3%

CIS

1 139

302

-73.5%

331

156

-52.9%

Other

688

2 001

190.8%

244

1 043

327.5%

Total sales revenue

10 732

15 256

42.2%

4 140

8 079

95.1%

EBITDA

293

1 468

401.0%

-118

853

822.9%

Operating profit

-313

645

306.1%

-429

450

204.9%

Rába Automotive Components Ltd.

The sales revenue of Rába Automotive Components Ltd . amounted to HUF 8.0 billion in H1 of 2021, which is a 41.8 per cent increase compared to the base period.

Rába Automotive Components Ltd. generates a conside rable portion of its sales on the European market.

European exportsduring H1 of 2021 amounted to EUR 10.5 million, which represents an increase of 29.6 per cent compared to the EUR 8.1 million of the base period of 2020.

Domestic salesbefore consolidation amounted to HUF 4,252 million during the reporting period, which corresponds to an increase by 48.9 per cent compared to the sales revenue of HUF 2,856 million during H1 of 2020.

The Company generated a profit of HUF 532 million at operating level during the reporting period compared to a profit of HUF 380 million in H1 of 2020.

On the level of EBITDA, the profit of the Components business unit was HUF 749 million during the period, compared to the loss of HUF 143 million of the previous year.

million HUF

H1 2020

H1 2021

Change

Q2 2020

Q2 2021

Change

EU - export

2 795

3 775

35.1%

1 005

1 940

93.0%

EU - domestic

2 856

4 252

48.9%

896

2 000

123.2%

Other

14

7

-50.0%

3

5

66.7%

Total sales revenue

5 665

8 034

41.8%

1 903

3 945

107.3%

EBITDA

-143

749

623.8%

-343

412

220.1%

Operating profit

-380

532

240.0%

-462

303

165.6%

Rába Vehicle Ltd.

The sales revenue of Rába Vehicle Ltd. in H1 of 202 1 was below the figure of the base period by

5

Attachments

Disclaimer

RÁBA Jarmuipari Holding Nyrt. published this content on 25 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2021 15:40:01 UTC.


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Financials
Sales 2020 38 754 M 123 M 123 M
Net income 2020 -1 030 M -3,27 M -3,27 M
Net Debt 2020 6 663 M 21,2 M 21,2 M
P/E ratio 2020 -19,4x
Yield 2020 -
Capitalization 19 362 M 61,5 M 61,5 M
EV / Sales 2019 0,47x
EV / Sales 2020 0,69x
Nbr of Employees 1 235
Free-Float 24,8%
Chart RÁBA JÁRMÛIPARI HOLDING NYRT.
Duration : Period :
Rába Jármûipari Holding Nyrt. Technical Analysis Chart | RABA | HU0000073457 | MarketScreener
Income Statement Evolution
Managers and Directors
Bela Hetzmann Chief Executive Officer
Zoltan Varadi Chief Financial Officer
Istvan Lepsenyi Chairman-Supervisory Board
Zsolt Harmath Member-Supervisory Board
Sandor Jozsef Szabo Member-Supervisory Board