Annual Report 2017

Control system

The Board of Management of technotrans AG uses first and foremost financial performance indicators to manage the group. Non-financial performance indicators in addition provide an important decision-making basis for corporate management.

The technotrans Group’s internal control system has the purpose of overseeing implementation of the corporate strategy. The control system basically comprises regular strategic discussions within the Board of Management and in-year planning discussions – including investment and personnel planning aspects – with the individual managing directors of the companies, as well as a monthly analysis of their respective business performance. The system seeks to identify deviations as early on as possible so that swift action can be taken as appropriate. Over and above this, the individual managing directors monitor and analyse their respective markets and specific competitive environment and report to the Board of Management on material changes to it, and on the opportunities and risks. The Board of Management submits regular reports to the Supervisory Board.

Financial Performance Indicators

technotrans AG and its group companies are managed first and foremost on the basis of revenue and earnings ratios (EBIT margin). These control parameters are in each case determined, planned and continuously monitored for the group, the reportable segments Technology and Services, as well as for the individual group companies including the parent.

For the management of the group, technotrans in addition refers to other financial indicators such as the equity ratio and gearing ratio, as well as the free cash flow (the cash flow from operating activities less the cash payments from the chash flow for investment activities).

The 2017 financial year was another very successful one for the technotrans Group. Both the targeted growth and the margin targets were achieved, and both operating segments report improved results.

The following table provides an overview of key financial and control indicators for the technotrans Group:

Actual and forecast business development

   2016Forecast 2016 Management Reportadjusted forecast Quarterly Communication Q2-20172017
Revenue € million151.8185 - 195203 - 208205.1
Technology € million103.6131 - 137145 - 148147.6
  in %68%72%
Service € million48.254 - 5858 - 6057.5
  in %32%28%
EBIT € million9.712 - 1416 - 1717.4
  in %6.4%6.5% - 7.2%7.8% - 8.2%8.5%
Technology in %2.8%> 3.5%> 4.5%5.5%
Service in %14.2%> 14%> 15%16.3%
Free Cashflow € million-12.6> 5positive0.2

Overall, the Board of Management of technotrans AG is very satisfied with the development of the Group in the year under review. To summarise, technotrans achieved its upgraded targets from summer 2017. The revenue growth of the technotrans Group amounted to € 53.3 million, representing an increase of 35.1 percent on 2016. At € 205.1 million, the consolidated revenue realised was squarely inside the most recent forecast range of € 203 to 208 million. After stripping out the acquisitions, the group achieved organic revenue growth of around 12 percent and thus exceeded the original forecast for the 2017 financial year.

Operating profit (EBIT) grew in absolute terms by € 7.7 million (equivalent to +79.2 percent) to € 17.4 million. The EBIT margin reached 8.5 percent, compared with 6.4 percent in the previous year. The adjusted forecast range for 2017 of € 16 to 17 million was therefore surpassed.

Non-Financial Performance Indicators

Alongside economic goals, all business units of the technotrans Group also pursue non-financial goals. All material aspects for the year under review of 2017 were summarised for the first time in a non-financial group declaration in accordance with the CSR Directive Implementation Act.

The declaration in accordance with Section 315b of the German Commercial Code represents a separate section in this Combined Management Report (see chapter: Non-Financial Group Declaration). It is also posted on the company’s website at https://www.technotrans.com/en/investor-relations/corporate-governance/corporate-governance-declaration.html.