Wittur AG adj.ebitda up 16.1%yoy on back of robust growth in its Asian business

Wittur AG, the German elevator component manufacturer, in its preliminary FY15 earnings release reported a 12.7% YoY increase in top-line to EUR 588. Previously in 9M15, revenues and adjusted EBITDA had increased 16.8% YoY and 16.1% YoY to EUR 455m and EUR 66.4m respectively. Earnings in 9M15 were largely supported by continued growth in its Asian business, which grew 36.9% YoY, contributed EUR 211m or 47.6% to Wittur’s revenue. In August 2015, Wittur had announced its EUR 210m debt backed acquisition of Italian component manufacturer Sematic. The new entity Wittur + Sematic will carry a pro-forma net external debt of EUR 617m vs EUR 408m reported by Wittur in 9M15. Corresponding pro-forma net external leverage is expected to rise to 5.48x vs 4.81x of Wittur. Post-deal the combined entity on a pre-synergy basis, could generate a revenue of EUR 750m and EBITDA greater than EUR 100m in FY15.


For Sematic acquisition, Wittur was in the market on 23 October 2015 allocating its EUR 180m term loan, while the remaining EUR 30m is to be financed with cash on balance sheet and by extending its existing EUR 65m revolving credit facility to EUR 80m. Pro-forma net external debt of Wittur+Sematic is expected to be at EUR 617m as compared to EUR 408m as reported by Wittur in 9M15. Proceeds of debt raised will be used to acquire existing stakes of Carlyle and Zappa family, which currently hold 70% and 30% in Sematic, respectively. Post deal, Carlyle and Zappa family will retain minority stake in the combined business. For 2017, management expects lower capex to aid the deleveraging process, as it targets to reduce leverage below 4.5x.

Net operating cash flow from operating activities declined 20.0% YoY to EUR 38.24m as working capital consumed EUR 9.5m in cash. Following this free cash flow has also declined by 25.4% YoY to EUR 32.1m, as capex spend increased 16.0% YoY.  However pro-forma liquidity of EUR 77.5m coupled with positive free cash flow generation should be enough to pay-off the EUR 17.5m in short term debt.