Hansen Transmissions International (Hansen) today announced its interim management statement for the third quarter, which ended on 31 December 2009. The financial information reported in this release is presented in euro and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union.

The accounting policies and methods of computation followed for the nine months (ended 31 December 2009) are the same as those followed in the consolidated annual accounts as per 31 March 2009. The financial information in this release is unaudited; the statutory auditor has conducted a limited review for the period. The interim report is in compliance with IAS 34.

Highlights of Q3 FY 2010

  • Revenue €136.6 million compared to €155.4 million for the same period in the previous year
  • EBITDA¹ margin 9.8%, up from 6.7% in Q2 and from 5.2% in Q1 of the current financial year 2010
  • Challenges in the near-term wind market continue to cause volume and pricing pressure, and this has been reflected in our recent change to guidance
  • In the short term, the company remains focused on building on its successful cost reduction measures to mitigate the impact on profitability resulting from the current operating environment
  • Communication of refocused Hansen’s strategy to drive value in the medium to longer term
  • Free float increased to 74% following the secondary placing of 236 million depositary interests by Suzlon on 19 November 2009

¹EBITDA = earnings before interest, tax, depreciation and amortisation

Ivan Brems, CEO of Hansen commented: “Hansen continues to be confronted with considerable volatility and challenges from the global wind energy market. During the third quarter of financial year 2010, this trend has not changed.”

“While the results over this period were in line with the company’s expectations, we believe that the operating environment for the company will remain challenging for at least the next two quarters.”

“Although the order book has seen significant rescheduling, the ongoing dialogue with our customers continues to suggest some optimism for improving industry investment from the second half of the 2010 calendar year.”


Revenue decreased by 12% in the third quarter of the financial year 2010 compared to the same quarter last year. This revenue decrease was due to a reduction in scheduled deliveries of both industrial and wind turbine gearboxes as Hansen worked with customers to manage their requirements in line with the current operating and credit environment.

EBITDA margin

Improvement to 9.8% EBITDA margin on revenue in Q3, based upon the cost alignment measures starting to have a positive impact.

Measures to reduce the cost base and improve cash flow

In order to maintain flexibility, align its cost structure to the current environment and support its EBITDA margins and cash flow, the company continues to implement several cost containment measures including:

  • Supply chain optimisation
  • Temporary unemployment for blue and white collar employees (under Belgian legislation)
  • A reduction in white collar headcount in Belgium of 6% in September 2009
  • Discontinuing of 120 temporary blue-collar contracts in since October 2009 in Belgium
  • Savings programmes on general expenses
  • Inventory reduction

The effect of these cost containment measures has positively impacted the EBITDA margin of the third quarter of the current financial year and additionally the company will continue to explore and exploit further cost reduction opportunities.

One-time costs

In the third quarter of the financial year 2010, the company incurred one-time costs of €0.7 million relating to the expansion projects. These costs are included in EBITDA and EBIT.

Working capital

Overall net working capital has increased by nine million EUR in the third quarter. This reflects a moderate decrease in inventory levels and accounts receivables balanced by a larger decrease in trade payables as a result of supply chain management efforts.

The absolute level of accounts receivables is partly caused by overdue payments from customers. This is being addressed in the context of normal business practices and contractual arrangements, in light of the current operating environment.

The company’s cash levels remain solid. The reduced sales volumes, the overdue customer payments and the reduction of trade payables have resulted in a higher than expected net debt situation at period end, which is anticipated to reduce over the coming quarters.

Shareholder structure

Hansen noted the announcement made by AE Rotor Holding (AERH), a wholly owned indirect subsidiary of Suzlon Energy (Suzlon), on 19 November 2009 regarding the secondary placing of 236 million depository interests in Hansen (the placing). As a result of the placing, AERH continues to hold 26.1% of the total depository interests in Hansen, down from 61.3%, and Hansen’s free float increased from 38.7% to 73.9%.

“Stronger than wind” – refocusing of Hansen’s strategy

Hansen has assessed its strategic goals and refocused to drive value in the medium to longer term. Hansen reconfirms the target for 14,300MW manufacturing capacity by financial year 2013.

Throughout the organisation, Hansen defined updated key elements of reaching this target with a strategic plan that aims for sustainable, profitable growth with a diversified customer base, state-of-the-art manufacturing facilities in Europe, India and China supported by a global supply chain and a highly motivated and skilled workforce.


Since early 2009, the volatility and challenges impacting the near term wind market have been reflected in Hansen’s financial results, including the recent half year interim results, where we outlined our caution resulting from the operating environment.

This trend has continued and Hansen believes the operating environment will remain challenging for at least the next two quarters, these being the first two quarters of the 2010 calendar year (reporting quarters Q4 2010 and Q1 2011).

As confirmed in Hansen’s trading update published on 20 January 2010, the revenue guidance for financial year 2010 is for a decrease of approximately 15% from the level achieved for the financial year 2009.

While the order book has seen significant rescheduling, our ongoing dialogue with customers continues to suggest some optimism for improving industry investment from the second half of the 2010 calendar year. We continue to be well-positioned with our customers and see the issues as predominantly relating to the wind market as a whole. Our confidence in the medium and longer-term fundamentals of the wind industry remains.