Letter from the Board of Management

Dear Shareholders,

We can look back on the most successful financial year in the history of technotrans. 2017 delivered further emphatic proof that our company’s chosen course is the right one. We have demonstrated both renewed and fresh strength over the past few years. We hope you will continue to accompany us throughout this success story – an aspiration that is also clearly voiced in the motto we have chosen for this year’s Annual Report: “Going strong.”

We can be proud of what we have achieved so far. But that is no reason to rest on our laurels – it is an incentive actively to make further moves. For example, we aim to deepen the synergies with our subsidiaries and make the leap from declarations of intent to meaningful revenues in our new markets. Medium-term, we are targeting annual revenue of EUR 300 million. All accompanied by increased internationalisation that is fittingly expressed in the change in our company’s legal form to a Societas Europaea.

But allow us first to take a look back: the past financial year saw technotrans profit from its highly successful positioning in the key markets it addresses, but also from the generally very positive development in the global economy. In 2017 the German economy experienced a broad-based upturn that was driven not just by worldwide demand, but also by domestic consumption. Capacities at our customers were well utilised across the board and employment in Germany hit a record level. Meanwhile consumer prices remained broadly stable. All in all, the German economy achieved its strongest growth since 2011: price-adjusted gross domestic product was up 2.5 percent.

The business development of the technotrans Group was no less pleasing. We again accomplished growth in all relevant markets in 2017. This growth was manifested most clearly in revenue, where we achieved a significant rise from EUR 152 million in 2016 to EUR 205 million last year. Around 12 percent of this increase stemmed from organic growth and 20 percent was non-organic in origin.

Business with the manufacturers of offset, digital and flexographic printing presses actually developed slightly better in the 2017 financial year than in the previous year, when there had been the drupa boost from the world’s biggest industry exhibition. The printing press market has thus been enjoying mild growth since 2014.
technotrans was again able to edge out the competition in profiling itself as the development partner of choice in virtually every field of business related to the print area, further extending its market position in certain sub-areas. In addition to classic business with dampening solution circulators and filtration systems, our system solutions in the areas of LED UV cooling, ink and varnish supply and the segment of cooling systems for digital and flexographic printing performed especially well. The result: with revenue growth of more than 2 percent, our performance was again better than that of the printing press market as a whole.

In the area of laser, machine tool and forming technology, we achieved conspicuously strong growth in 2017. Business with laser system manufacturers merits particular note because it exceeded our expectations. Our organic revenue growth in that area came to more than 33 percent, in a turnaround from the 2016 financial year that had failed to reach our benchmark.

As a system partner to the laser industry, our areas of application span classic laser applications in metal working, medical equipment, semiconductor technology and the machining of new materials, such as 3D printing. The German mechanical and plant engineering sector was likewise in rude health in 2017. Demand for both filtration systems and classic machine cooling grew markedly thanks to strong portfolio business and new customers. Our business with the manufacturers of die-cutting and pressing equipment, which we supply mainly with spray lubrication systems and cooling units, likewise continued to develop. Having previously commissioned the first large-scale spray lubrication system in 2016, in 2017 we presented our first five-metre system for the automotive industry to our customers at the Blech Expo.

In the plastics engineering area, we have now completed our first full year of business following the takeover of gwk in Meinerzhagen in 2016. gwk develops and manufactures temperature control and cooling plants specifically for this market. With gwk having had to contend with a challenging environment in recent years, our combined efforts increased its revenue by 12 percent in 2017. The key factors behind this dynamic revenue growth were generally high demand along with business expansion aided by the international technotrans group of companies.

Of our growth markets, the battery cooling sector achieved the most promising progress. Following a deluge of new projects in the storage media cooling area, we positioned ourselves in the past financial year as one of the leading manufacturers of cooling solutions for quick-charging stations. Within a very short period we succeeded in winning over the leading manufacturers of charging stations on the basis of our technology and performance. Against the backdrop of the political debate concerning air pollution, and in response to growing market pressure, the development of the infrastructure is now a defining issue worldwide. The rapid acceleration in orders from our customers in the fourth quarter gives us cause to be hugely optimistic about this area’s future development. With revenue growth of around 30 percent, we remain on track for success in this market segment.

As well as out-and-out production, we offer our customers and in turn their customers worldwide precisely the service they need. Compared to our often smaller competitors, we are excellently placed to retain our customers over the long term. That safeguards both our competitive position and our profitability. The Services area also includes our Technical Documentation activities. Here, we compile user manuals, operating instructions and handbooks on behalf of customers. We also offer our customers translation services and the corresponding software management systems for document administration. With revenue growth in excess of 10 percent, we more than consolidated our dominant position worldwide in the past financial year.

Ladies and Gentlemen, 2017 – as I have already outlined – was the best year in the history of technotrans. And we would like you to participate in this success. You do so on the one hand through the outstanding performance of technotrans shares, which gained 93 percent in the past year alone. On the other hand – almost 20 years to the day after the initial listing on the New Market – we will propose the distribution of a dividend of EUR 0.88.

On behalf of the Board of Management, I would like to take this opportunity to thank you, our shareholders, as well as our employees! We are proud of all that we have achieved, and hungry for more. Today, we have a presence in many promising markets and are well-equipped to extend our position.

We have the team, the expertise and the spirit that we will need to continue growing. We look forward to that venture and hope that you will continue to accompany us along that path.

On that note I and my colleagues on the board wish you an enjoyable read with this Annual Report.

On behalf of the Board of Management

Henry Brickenkamp