Hansen Transmissions – Interim Management Statement for the First Quarter of Financial Year 2010

Hansen Transmissions International NV (“Hansen”, “the Group” or “the Company”) yesterday announced its Interim management statement for the 3 months ended 30 June 2009.

Highlights Q1 2010

  • Revenue €136 million compared to €139 million for the same period in the previous year
  • Underutilised capacity has brought EBITDA margin down to 5.2 % compared to 15.5% for the same period in the previous year
  • Several cost containment measures are being implemented to maintain flexibility, align the cost structure and support EBITDA margin and cash flow
  • First success in China with order for domestic wind turbine manufacturer
  • Adjustment of current year’s guidance – from previously low to moderate revenue growth – to flat revenue for the full financial year 2010
  • The Company remains confident about the long term dynamics of the wind industry

Ivan Brems, CEO of Hansen Transmissions commented: “In this first quarter, we experienced the dual effect of the current credit environment on our business: first, customers in the wind industry reviewed their requirements for gearboxes as a result of lower turbine orders; secondly, customers reduced their inventory levels in order to manage their working capital situation.

“At current output levels Hansen is faced with idle capacity for the first time in recent years, and this inevitably has had an impact on our profitability. While operating conditions are likely to remain challenging, we are actively pursuing cost containment measures in order to align our cost structure to the current environment and support EBITDA margin and cash flow.

“Although the current market conditions do not support the efficient utilisation of the recently added manufacturing capacity, we expect this situation to ease in the second half of this financial year as a result of improved market dynamics, and we will be able to ramp up production rapidly thereby benefiting from the recent expansion of our capacity. We remain confident about the long term dynamics for the wind industry. As one of the most efficient and high quality manufacturers of one of the key components for that industry we are well positioned for the future.”

Summary

The Group’s results for the first quarter of the financial year 2010 were significantly impacted by lower than expected volumes. It should however be noted that since the start of the previous financial year, in line with the strategy outlined at the IPO, Hansen has added manufacturing capacity both in India and China, resulting in a higher overall cost base.

Outlook

The Company remains confident in the projected medium and long term growth prospects of the international wind power market. Hansen’s strong product offering and the quality of its customer base ensure that the Company remains well positioned in this market.

Given the continued impact of the adverse credit environment on the wind turbine industry the Company has adjusted its financial year’s guidance – from previously low to moderate revenue growth – to flat revenue for the full financial year 2010.

The current market conditions do not support the efficient utilisation of the manufacturing capacity, and the Company expects these conditions to continue during the second quarter. The Company anticipates that this situation will ease in the second half of this financial year as a result of improved market dynamics.

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