INDUS: Burden on Automotive Technology segment’s income to decline noticeably with immediate effect

• After several years of restructuring efforts, series supplier SMA has applied for the initiation of self-administration proceedings to continue restructuring
• One-time non-cash expenses of around EUR 61 million
• Burden on operating income reduced noticeably with immediate effect and improvement in future cash flow in Automotive Technology segment
• Strategic focus on growth projects

Bergisch Gladbach, 24 October 2022 – On 24 October 2022, S.M.A. Metalltechnik GmbH & Co. KG, Backnang (“SMA”), an INDUS portfolio company, filed for the opening of self-administration proceedings with the aim of restructuring the company. This will result in one-time non-cash expenses of around EUR 61 million for INDUS. At the same time, this will significantly reduce the burdens on the Automotive Technology segment’s operating income with immediate effect. In the financial year to date, SMA has accounted for more than half of the losses of the Automotive Technology segment. The operating losses of approx. EUR 7 million projected to be incurred by SMA in November and December 2022 will cease to apply.

The series supplier to the automotive industry had conducted intensive negotiations with major customers to adjust the existing supply contracts. Unfortunately, SMA did not succeed in achieving the necessary adjustments, making a continuation under the given conditions impossible. “In keeping with our business model, we provide all possible support whenever a portfolio company is in difficulty – and we do so longer than is common practice in the market because we feel responsible for employees,” says Dr. Johannes Schmidt, Chairman of the INDUS Board of Management. “At the same time, however, we are responsible for the performance of the Group as a whole and want to make sure that our remaining 47 portfolio companies have the room for maneuver they need for their successful further development.”

In view of the one-time expenses, the forecast dated 3 August 2022 has been adjusted from earnings before interest and taxes (EBIT) of between EUR 100 and 115 million to an EBIT of between EUR 46 and 61 million. This does not yet take into account possible non-cash impairments, mainly of the goodwill of other portfolio companies, which could result from the significant increase in the cost of capital in recent weeks and the corporate plans for 2023 and subsequent years. The necessity and, if applicable, the extent of such potential non-cash impairments are being analyzed as part of the current planning round. The revenue forecast for the 2022 financial year of between EUR 1.90 billion and EUR 2.00 billion remains unchanged.

As SMA is deconsolidated, series suppliers will account for a much smaller share of INDUS’ Automotive Technology segment than before. Most recently, the WIESAUPLAST Group was divested at the end of 2021. “Our core task is to continue pursuing our PARKOUR strategy with great determination,” says Johannes Schmidt. “We want to use the funds generated for investments in growth projects as well as for acquisitions in growth industries, thus achieving a sustainable increase in the value of the Group.”

About INDUS Holding AG:
Established in 1989 and headquartered in Bergisch Gladbach, INDUS Holding AG is a leading specialist for sustainable corporate investment and development in the German-speaking SME sector. The industry focus is on construction and infrastructure, automotive technology, mechanical and plant engineering, medical engineering and life sciences as well as metals technology. As a growth-oriented financial investor with a long-term focus, INDUS currently supports 48 portfolio companies in their corporate development. Since 1995, INDUS Holding AG has been listed in the Prime Standard of the Frankfurt Stock Exchange (DE0006200108); in 2021, the Group generated sales of around 1.74 billion euros. For more information on INDUS, visit www.indus.de.

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