Original-Research: Greiffenberger AG (von GBC AG): unter review

Original-Research: Greiffenberger AG - von GBC AG

Einstufung von GBC AG zu Greiffenberger AG

Unternehmen: Greiffenberger AG

ISIN: DE0005897300

Anlass der Studie: Research Report (Anno)

Empfehlung: unter review

Kursziel: suspended

Letzte Ratingänderung: -

Analyst: Felix Gode, CFA

In the light of business development that is lower than expectations for

the second half of 2015 - particularly in ABM - and the associated

forecasting adjustments in November 2015, Greiffenberger AG had informed

its financial partners that the agreed key financial figures from the

syndicated loan agreement of 31/12/2015 could not in all likelihood be

retained.

As a result, a plan was developed with the financial partners to ensure the

continuation of business activities which would lead to a better earnings

position in particular, as well as an improved liquidity position. Under

this plan, the participating parties agreed to postpone the repayment

instalment due on 31/03/2016 for the syndicated loan and the partial

repayment of the participation right to 31/10/2016. Furthermore, the

interest payments due on the syndicated loan over this period and the

compensation payment for the participation right will be suspended.

The plan to secure liquidity and continue the company developed under this

plan resulted in the necessary restructuring measures requiring additional

funds of EUR10 million, which are not available under Greiffenberger AG's

current financial framework. According to the company's plans,

strengthening the financial structure of individual subsidiaries is sought

after through the involvement of investors. Consequently, Greiffenberger AG

would lose its majority in the company concerned.

In the light of the ongoing restructuring and the associated lack of

predictability regarding the continuation of the company's business

activity, the commissioned audit company did not yet issue an audit

certificate for the 2015 financial statements. On 08/07/2016 the company

will be informed about the final outcome of the audit, however, management

expects the issuance of a disclaimer of opinion. Instead, the auditors

require additional documentation on funding to assess the likelihood of

success for the restructuring plan. More detailed information on this has

not been published to date, because negotiations with investors are still

in process.

Sales and earnings estimates for Greiffenberger AG

To make ABM's activity sustainably profitable again, a comprehensive

restructuring project was launched in early May 2016. This not only

foresees an adjustment to cost structures, but also the restructuring of

processes and the strengthening of the compa-ny's core competences.

As part of the restructuring measures, around 120 posts are to be removed

at the Mark-tredwitz site, which makes up around 20% of all jobs at ABM. At

the same time, the vertical range of production at the German site is to be

reduced, together with an in-crease in the purchase of components to

increase the processing speed. On the other hand, the share of production

is to be increased at the Lublin site. A competitive cost structure will be

re-established with these measures and adequate margins should be achieved.

Finally, they are looking to focus on the company's core skills in the

areas of mobile drive technology (e.g. forklift trucks) and industrial

applications (e.g. lifting and conveying technology) without at the same

time neglecting investment in new future-oriented developments. In

particular, the areas of intra-logistics and warehouse logistics, medical

technology or e-mobility are to be addressed.

On the whole, moderate growth in turnover is being pursued at ABM in 2016.

A signifi-cantly improved EBIT is expected, though it is not expected to

achieve the 2014 level (EUR0.89 million).

It is unclear whether the costs for restructuring have already been

included in this earn-ings forecast for 2016. However, we assume that there

will be negative effects in this respect, e.g. due to staff changes. Costs

in terms of organisational changes and moving business activities from

Marktredwitz to Lublin should also be taken into account. In this respect,

we assume that the ABM result will be further impacted negatively.

In terms of the Group turnover, Greiffenberger AG's Executive Board assumes

that this will again increase moderately in the 2016 financial year

compared with 2015. As already outlined, growth will primarily be driven by

the ABM subgroup, the largest subsidiary.

In terms of the Group's result, Greiffenberger AG's Executive Board expects

to achieve a much better result compared with the 2015 financial year, with

a positive EBIT. However, according to company forecasts it is conceivable

that the 2014 earnings level of EUR2.41 million will not be reached yet

again.

Valuation of GBC AG

At the time the study was established, no new findings in terms of the

future funding of Greiffenberger AG were available. Even with regard to

investor participations in subsidiaries, no new information has been

published. In this respect, it is currently not known in which subsidiary

investors should potentially invest or whether alternative funding options

are being considered.

This is very important for the Greiffenberger group's future sales and

earnings perfor-mance, however, because a potential majority sale of one of

the subsidiaries would lead in certain circumstances to a considerable

reduction in turnover due to the final consolidation. The income

contribution would accordingly be recorded in all probability in future in

the profit and loss account as income from investments accounted for using

the equity method and would also result in considerable balance sheet

changes during final consolidation.

Due to the currently unclear situation regarding the refinancing of group

liabilities and the current open-ended restructuring of the subsidiary ABM,

we are at present unable to make a reliable valuation of Greiffenberger AG.

Instead, a successful refinancing of the debt side will initially open up

the possibility of a sustainable restructuring of the company.

For this reason, we cannot at present determine a target price for

Greiffenberger AG shares and we are therefore suspending the rating. Should

new events arise in terms of financing, we will check once again whether it

is possible to establish a stock price target. We are therefore keeping

Greiffenberger AG under review.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/14021.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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