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Laser specialist LPKF, which has been no stranger to success in the past, has come through a difficult financial year. A low volume of incoming orders in the Electronics Production Equipment segment coupled with the postponement of a major LDS project resulted in revenue of EUR 120 million, corresponding to a year-on-year decline of 8%. While EBIT fell by 45% to EUR 13 million, the company nonetheless achieved an impressive EBIT margin of no less than 11%. Despite a very strong fourth quarter revenue of EUR 40 million and an EBIT margin of 13%, LPKF just managed to achieve the reduced forecast for 2014 announced in October.
LPKF CEO Dr. Ingo Bretthauer: "This is clearly an unsatisfactory result for LPKF. We had originally planned to achieve a lot more during 2014, but weak incoming orders in two of our six product groups simply turned these plans upside down." Economic difficulties affecting end customers in South Korea and a lack of bulk orders for PCB Production Equipment were the main reasons for the decline in revenue.
In the Other Production Equipment segment, revenue rose by 31% and profit by 48%. Here, the phenomenal strength of the solar system business was more than able to compensate for the weaker performance in Welding Equipment. Revenue with plastic welding systems remaining on par compared to the previous year and did not meet the expectations.
The Electronics Development Equipment segment easily exceeded expectations, however, with revenue up by 20%. The expansion of the product portfolio to include new laser-driven systems for electronic development boosted revenue while also significantly improving profits and ensuring an EBIT margin of 11%.
Overall, however, these successes were unable to compensate for the decline in the laser direct structuring (LDS) business in 2014, thus forcing the company to accept its first drop in revenue for 11 years. Despite the weaker business performance in 2014 Ingo Bretthauer and his fellow Management Board members now look confidently to the future. “Our growth drivers in the markets are intact, our company continues to be very profitable, and we are developing highly attractive new technologies,” says Bretthauer.
In 2015, LPKF will launch no less than three entirely new laser-based methods intended to stimulate growth from 2016 onwards. Extending the underlying LDS technology, these include a coating process to enable the application of heavy-duty metal layers to plastic substrates, a digital laser printing method for functional pastes and a laser-driven ultra-fine glass drilling process for use by chip makers.
Growth is also expected in LDS itself, however. LPKF is working hard on reducing the cost of the entire process to make it even more cost effective for customers. The company sees the wearables and LED markets as offering particular potential.
A return to growth is expected in 2015, albeit at a more moderate tempo. Assuming a stable economic environment, LPKF expects to achieve revenue of EUR 128 to 136 million and an EBIT margin of 12% to 15% in 2015. Given the current situation with orders and projects, this is considered an ambitious plan. "We see 2015 as a transition year – and one offering its own unique challenges," says Bretthauer.
In the years to come, LPKF plans to return to its usual path of continuous growth, boosting average earnings by at least 10% while achieving an EBIT margin of 15% to 17%.
In light of the modest outlook for the current financial year, the Management and Supervisory Boards recommend that the Annual General Meeting to be held in Hannover on 28 May 2015 adopts a dividend of EUR 0.12 per share (previous year: EUR 0.25).