printmgr file - EDAG Engineering GmbH

Transcription

Prospectus
for the public offering
of
8,750,000 bearer shares (Inhaberaktien) with a nominal value of CHF 0.04 each from the
holdings of the shareholder of the Company
and of
holdings of the shareholder of the Company to cover a potential over-allotment
and at the same time
for the admission to trading on the regulated market segment (regulierter Markt) of the
Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the
sub-segment of the regulated market with additional post-admission obligations (Prime
Standard) of the Frankfurt Stock Exchange
of
25,000 thousand bearer shares (Inhaberaktien) with a nominal value of CHF 0.04 each and each
such share with full dividend rights for the fiscal year ending December 31, 2015 and for all
subsequent fiscal years
of
EDAG Engineering Group AG
Arbon, Switzerland
Price Range: €19.00 – €24.00
International Securities Identification Number (ISIN): CH0303692047
German Securities Code (Wertpapier-Kenn-Nummer, WKN): A143NB
Common Code: 132198357
Trading Symbol: ED4
Joint Global Coordinators and Joint Bookrunners
Morgan Stanley
Deutsche Bank
Co-Lead Managers
COMMERZBANK
M.M. Warburg & CO
The date of this prospectus is November 20, 2015.
TABLE OF CONTENTS
PAGE
SUMMARY OF THE PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section A – Introduction and Warnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section B – Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section C – Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section D – Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section E – Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ZUSAMMENFASSUNG DES PROSPEKTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt A – Einleitung und Warnhinweise . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt B – Emittent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt C – Wertpapiere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt D – Risiken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Abschnitt E – Angebot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A.
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Risks Related To Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Regulatory and Legal Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Risks Related To Our Shares And The Offering . . . . . . . . . . . . . . . . . . . .
B.
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Purpose of this Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Sources of Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Documents Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Currency Presentation and Presentation of Figures . . . . . . . . . . . . . . . . .
VII. Enforcement of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Presentation of Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . .
C.
THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Subject Matter of the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Price Range, Offer Period, Offer Price and Allotment . . . . . . . . . . . . . . .
III.
Expected Timetable for the Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Information on the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Foreign Investment and Exchange Control Regulations in Switzerland . .
VII. ISIN/WKN/Common Code/Ticker Symbol . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Transferability of the Shares, Lock-up . . . . . . . . . . . . . . . . . . . . . . . . . . .
IX.
Information on The Existing Shareholder . . . . . . . . . . . . . . . . . . . . . . . . .
X.
Allotment Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XI.
Preferential Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XII. Stabilization Measures, Over-Allotments and Greenshoe Option . . . . . .
XIII. Lock-up Agreement, Limitations on Disposal . . . . . . . . . . . . . . . . . . . . . .
XIV. Admission to the Frankfurt Stock Exchange and Commencement of
Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XV. Designated Sponsors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XVI. Interests of Parties Participating in the Offering . . . . . . . . . . . . . . . . . . .
D.
PROCEEDS OF THE OFFERING AND COSTS OF THE OFFERING AND LISTING . . . .
E.
REASONS FOR THE OFFERING AND LISTING AND USE OF PROCEEDS . . . . . . . . .
F.
DIVIDEND POLICY; RESULTS AND DIVIDENDS PER SHARE; USE OF PROFITS . . . .
I.
General Provisions Relating to Profit Allocation and Dividend Payments
II.
Dividend Policy and Earnings per Share . . . . . . . . . . . . . . . . . . . . . . . . . .
G.
CAPITALIZATION AND INDEBTEDNESS; STATEMENT ON WORKING CAPITAL . .
I.
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Statement on Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Statement Regarding Significant Changes . . . . . . . . . . . . . . . . . . . . . . . .
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PAGE
H.
I.
J.
K.
L.
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SELECTED FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Selected Data from the Consolidated/Combined Statement of
Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Selected Data from the Consolidated/Combined Statement of Financial
Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Selected Data from the Consolidated/Combined Statement of Cash Flow . . .
IV.
Selected Segmental Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Selected Key and Other Performance Indicators . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Factors affecting results of operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Comparability of our results of operations as a result of the complex
financial history of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Discussion of key and other performance indicators . . . . . . . . . . . . . . . . . . . .
V.
Description of key line items from the Consolidated/Combined Statement of
Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Results of operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VII. Selected data from the consolidated/combined statement of financial
position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Liquidity and capital resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IX.
Off-balance sheet arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
X.
Qualitative and quantitative disclosure about market risk . . . . . . . . . . . . . . .
XI.
Critical accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XII. Information from the audited opening statement of financial position as of
November 2, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MARKETS AND COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
The Characteristics of the Automotive Industry and its Effects on the ESP
Market, in Particular with Regard to Germany . . . . . . . . . . . . . . . . . . . . . . . .
III.
Key Benefits of Engaging Engineering Service Providers . . . . . . . . . . . . . . . . .
IV.
Global Megatrends Driving R&D Activities and the Demand for Engineering
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
The Development of the Automotive ESP Market . . . . . . . . . . . . . . . . . . . . . .
VI.
Competitive Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Overview of Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
History and Key Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Our Key Competitive Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Our Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Our Offering and Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VII. Competence Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Marketing and Sales Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IX.
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
X.
Real Property Owned and Leased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XI.
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XII. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XIII. Legal and Arbitration Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
XIV. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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201
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211
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217
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PAGE
M.
N.
O.
P.
Q.
R.
S.
T.
SHAREHOLDER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Current Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Controlling Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GENERAL INFORMATION ON THE COMPANY AND THE GROUP . . . . . . . . . . . . . . . .
I.
Formation and Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Commercial Name and Registered Office . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Fiscal Year and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Corporate Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Group Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VII. Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Announcements, Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF THE COMPANY’S SHARE CAPITAL AND APPLICABLE
REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Provisions Relating to the Share Capital of the Company . . . . . . . . . . . . . . .
II.
Repurchase of Own Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
General Provisions Governing a Liquidation of the Company . . . . . . . . . . . .
IV.
General Provisions Governing a Change in the Share Capital . . . . . . . . . . . .
V.
General Provisions Governing Subscription Rights . . . . . . . . . . . . . . . . . . . . .
VI.
Exclusion of Minority Shareholders (Squeeze-out Merger) . . . . . . . . . . . . . .
VII. Shareholder Notification Requirements; Directors’ Dealings . . . . . . . . . . . . .
CORPORATE BODIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Group Executive Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Remuneration And Other Benefits of the Board of Directors and the Group
Executive Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Certain Information Regarding the Members of the Board of Directors and
the Group Executive Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI.
Shareholders’ Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VII. Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VIII. Independent Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IX.
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS . . . . . . . . . . . . . .
I.
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Relationship with Members of the Board of Directors . . . . . . . . . . . . . . . . . .
III.
Relationship with Members of the Executive Management . . . . . . . . . . . . .
IV.
Other Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Termination/Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Selling Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TAXATION IN GERMANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Taxation of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Inheritance or Gift Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TAXATION IN LUXEMBOURG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
Net Wealth Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV.
Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PAGE
U.
V.
W.
X.
Y.
TAXATION IN SWITZERLAND . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I.
Swiss Withholding Tax on Dividends . . . . . . . . . . . . . . . .
II.
Swiss Income Tax on Dividends . . . . . . . . . . . . . . . . . . . . .
III.
Swiss Income Tax on Capital Gains . . . . . . . . . . . . . . . . . .
IV.
Corporate Tax Reform III (Unternehmenssteuerreform III)
V.
Swiss Wealth Tax and Capital Tax . . . . . . . . . . . . . . . . . . .
VI.
Swiss Federal Stamp Duties . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RECENT DEVELOPMENTS AND OUTLOOK . . . . . . . . . . . . . . . . . .
I.
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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300
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303
F-1
G-1
O-1
O-1
O-2
S-1
SUMMARY OF THE PROSPECTUS
Summaries are made up of disclosure requirements known as elements (“Elements”). These
Elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements
required to be included in a summary for this type of security and issuer. Because some Elements
are not required to be addressed, there may be gaps in the numbering sequence of the
Elements. Even though an Element may be required to be inserted in the summary because of
the type of security and issuer, it is possible that no relevant information can be given regarding
the Element. In such cases, the summary includes a short description of the Element with the
words “not applicable”.
SECTION A – INTRODUCTION AND WARNINGS
A.1
Warnings.
This summary should be read as an introduction to this
prospectus.
The investor should base any decision to invest in the securities at
hand on the review of this prospectus as a whole.
In case a claim relating to the information contained in this
prospectus is brought before a court, the plaintiff investor might,
under the national legislation of the Member States of the
European Economic Area (the “EEA”), have to bear the costs of
translating this prospectus before the legal proceedings are
initiated.
Those persons who have assumed responsibility for the summary
including any translations thereof, or who have caused its
publication (von denen der Erlass ausgeht), can be held liable but
only if this summary is misleading, inaccurate or inconsistent when
read together with the other parts of this prospectus or if it does
not provide, when read together with the other parts of this
prospectus, all necessary key information.
EDAG Engineering Group AG, Arbon, Switzerland (the “Company”),
together with Morgan Stanley & Co. International plc (“Morgan
Stanley”) and Deutsche Bank Aktiengesellschaft (“Deutsche Bank”,
and together with Morgan Stanley the “Joint Global Coordinators”
and “Joint Bookrunners”), COMMERZBANK Aktiengesellschaft
(“COMMERZBANK”) and M.M. Warburg & CO (AG & Co.) KGaA
(“M.M. Warburg & CO”, and together with COMMERZBANK, the
“Co-Lead Managers”), and together with the Joint Global
Coordinators, the “Underwriters”), have assumed responsibility for
the content of this summary and its German translation pursuant to
Section 5 para. 2b No. 4 of the German Securities Prospectus Act
(Wertpapierprospektgesetz).
A.2
Information
regarding the
subsequent use of
the prospectus.
Not applicable. Consent by the Company to the use of this
prospectus for a subsequent resale or final placement of the
Company’s shares by financial intermediaries has not been
granted.
SECTION B – ISSUER
B.1
Legal and
commercial name.
The Company’s legal name is EDAG Engineering Group AG. The
Group (as defined below in B.3) primarily operates under the
commercial name “EDAG”.
1
B.2
Domicile, legal
form, legislation
under which the
issuer operates,
country of
incorporation.
The Company has its registered seat in Arbon and its business address
at Schlossgasse 2, 9320 Arbon, Switzerland, and is registered with the
commercial register (Handelsregister) of the canton of Thurgau (the
“Commercial Register”), under number CHE-294.533.486. The
Company is a Swiss stock corporation (Aktiengesellschaft)
incorporated in Switzerland and governed by Swiss law.
B.3
Current operations
and principal
business activities
and principal
markets in which
the issuer
competes.
The Company was incorporated by its sole shareholder, ATON
GmbH, Munich, Germany (the “Selling Shareholder”) on
November 2, 2015 by way of a capital contribution in cash in the
aggregate amount of CHF 1,000 thousand against issuance of
25,000 thousand bearer shares with a nominal value of CHF 0.04
each. Since its incorporation, the Company has not conducted any
business, acquired any assets or incurred any liabilities other than
as directly related to its incorporation and the Offering (as
defined below in E.3). Concurrently with the determination of the
Offer Price (as defined below in E.3), the Selling Shareholder will
contribute all of the shares in EDAG Engineering Schweiz
Sub-Holding AG to the Company by way of contribution into the
capital reserves of the Company without issuance of new shares or
any other compensation by the Company (the “Contribution”).
EDAG Engineering Schweiz Sub-Holding AG was incorporated on
September 14, 2015 and indirectly, through EDAG Engineering
Holding GmbH, a German intermediate holding company, holds
all of the shares in EDAG Engineering GmbH. EDAG Engineering
GmbH conducts, directly and indirectly, through its subsidiaries
the operating business described in this prospectus. By means of
the Contribution, the Company will, thus, acquire this business.
Accordingly, as of the date of this prospectus, the Company is not
the owner of this business and will only acquire such business
concurrently with the determination of the Offer Price (as defined
below in E.3). No shares in the Company will be sold or delivered
to investors pursuant to the Offering unless the Contribution has
taken effect. Therefore, the Group (as defined below) is
presented in this prospectus as if the Contribution had already
occurred, unless otherwise indicated.
As a consequence, references in this prospectus to “the Company
and its subsidiaries”, “we”, “us”, “our”, “our Group”, “the
Group” or “EDAG” refer to the Company together with EDAG
Engineering Schweiz Sub-Holding AG and its consolidated
subsidiaries as it will exist upon consummation of the Contribution.
The Contribution will occur concurrently with the determination of
the Offer Price (as defined below in E.3) and before any Offer
Shares (as defined below in E.3) are delivered to investors
participating in the Offering (as defined below in E.3). Where we
present historical financial and business information in this
prospectus for the fiscal years ended December 31, 2014, 2013 and
2012 as well as for the nine-month periods ended September 30,
2015 and 2014 “we”, “us”, “our”, “our Group”, “the Group” or
“EDAG” refers to, as applicable, (a) EDAG Engineering Schweiz
Sub-Holding AG and its consolidated subsidiaries for consolidated
financial information as of and for the nine-month period ended
September 30, 2015 or (b) EDAG Engineering GmbH and its
consolidated subsidiaries for consolidated/combined financial
information as of and for the fiscal years ended December 31,
2014, 2013 and 2012 as well as for the nine-month period ended
September 30, 2014.
We are one of the world’s largest independent engineering
service providers (“ESP”) in the automotive industry in terms of
revenues and headcount (source: A.T. Kearney GmbH: Market
assessment Engineering Service Provider Automotive 2020, July
2015 (“A.T. Kearney Report”)). Independence in this context
2
means that no original equipment manufacturer (“OEM”) or
supplier holds any majority or significant minority shareholding in
an ESP. We specialize in the development of automotive
components and modules, derivative car models (“derivatives”),
including, in individual cases, entire cars, as well as production
facilities. We have strong and long-standing relationships with all
major German OEMs in the passenger car and commercial vehicle
industries with particular focus on German premium OEMs.
Furthermore, we have successfully developed other reputable
automotive OEMs as customers in markets outside Germany,
particularly in Europe. To complement our offering, we also work
for systems suppliers in the automotive industry. In order to meet
our customers’ demands we follow their international footprint
and offer our services globally.
Through our global network of 57 locations, located in close
proximity to our customers at important automotive hubs, we
ensure that the expertise of the entire Group is available to our
customers on a local basis. Particularly in Germany, we have a
dense network of facilities in the vicinity of our key customers.
While we have generated 78% of our revenues and on average
employed approximately 77% of our total workforce in the fiscal
year ended December 31, 2014 in Germany, our international
footprint is set up strategically and quality-driven. Our facilities in
low-cost countries mainly carry out intercompany contracts and
enable us to offer best-cost services, while other international
facilities, for instance in China, provide our complete portfolio of
high-end solutions to German OEMs and local automotive
manufacturers that are engaged in joint ventures with German
and other Western OEMs.
We offer complete vehicle competence across the entire product
value chain and vehicle life cycle. Our comprehensive portfolio of
services ranges from design to product development, modelling,
gauge construction, building of prototypes and testing to the
development of turnkey production systems. We believe that we
deliver particular value to our customers given our complementary
production solutions business, which enables us to assist our
customers not only in the development but also the subsequent
production of vehicles. Due to our complete vehicle competence, we
believe we have become a premium ESP in the automotive industry
and are able to benefit from our relationships across different
products and divisions of our customers.
Our special know-how is the guidance and support of customers
from the initial idea to the finished prototype and ultimately the
production. These complete vehicle development capabilities form
part of our business strategy and are key to our success. On
demand from our customers, we are present throughout the entire
life cycle of a product and accompany our customers from research
and advanced development, to concept and design to series
development and finally supervision of series production. In
addition to vehicle engineering services, we carry out many
complimentary tasks along the development chain such as project
management, quality management, supply chain management or
the documentation of entire projects. Furthermore, our
“production-optimized solutions” are developed to ensure the
feasibility of the production process for particular products and
designs.
3
Feynsinn, our consultancy service, provides all-round customer
support from the concept phase to the implementation process
and offers advice on processes, methods and tools to optimize
development and production sequences. Feynsinn also provides
implementation services and training.
In meeting customer demand, we put a particular emphasis on
current key trends and technologies in the automotive industry
such as innovation for CO2 reduction, lightweight design,
e-mobility and car IT(1). In order to meet our customers’
expectations and to contribute to automotive development, we
constantly adapt our portfolio of services to changing customer
needs and varying market conditions. Our subsidiary BFFT
Gesellschaft für Fahrzeugtechnik mbH (“BFFT”), for example, has
specialized technical knowledge in the field of electrical and
electronic development, which is key for the development of
applications such as driver assistance and safety systems, in-car
entertainment and car connectivity. BFFT also provides support
for our customers in the fields of hardware and software
development and alternative drive technologies.
In addition, we maintain a number of electronics laboratories and
testing facilities, most importantly our accredited testing center
in Fulda.
While the high level of expertise and years of experience of our
engineers enable us, as we believe, to deliver premium services in
each individual area of the services we offer, we additionally
founded our Competence Centers “Lightweight Construction”,
“E-Mobility”, “Car-IT” and “New Production Technology”. These
Competence Centers concentrate the combined special
knowledge of our experts in different fields and help further
develop and retain such special knowledge.
With an average workforce of 7,714 employees (including trainees
but excluding employees from discontinued operations) in the ninemonth period ended September 30, 2015 (nine-month period ended
September 30, 2014: 7,450), we believe we have reached a scale that
allows us to continue to succeed and grow as a sought-after ESP for
German OEMs. In particular, we believe that our ability to handle
large-scale projects and to offer the delivery of projects in the form
of work packages instead of employee leasing arrangements, a
service which an increasing number of our customers requests, gives
us a competitive advantage, while our scale also offers us the
flexibility and resources to handle large and complex projects.
The Group’s operations are divided into our three core segments:
Vehicle Engineering, Electrics/Electronics (“E/E”) and Production
Solutions. In the nine-month period ended September 30, 2015,
we recorded sales revenues and changes in inventories of
€534.0 million (in the nine-month period ended
September 30, 2014: €506.3 million). In the fiscal year ended
December 31, 2014, we recorded sales revenues and changes in
inventories of €689.7 million (in the fiscal year ended
December 31, 2013: €632.4 million, in the fiscal year ended
December 31, 2012: €415.2 million). On a segment level, sales
revenues with third parties (i.e. revenues with entities that are
(1) Lünendonk: Lünendonk®-Sonderanalyse 2014. Exklusive Auszüge der
Lünendonk®-Studie, Führende Anbieter von Technologie-Beratung und
Engineering Services in Deutschland, Eine unabhängige Marktanalyse der
Lünendonk GmbH in fachlicher Zusammenarbeit mit ALTEN GmbH, Altran
GmbH & Co. KG, AVENTON GmbH und Randstad Professionals GmbH & Co.
KG, November 2014 (“Lünendonk analysis 2014”).
4
not part of the EDAG Group) in our Vehicle Engineering segment
amounted to €334.3 million in the nine-month period ended
September 30, 2015 and to €307.2 million in the nine-month
period ended September 30, 2014 (in the fiscal year ended
December 31, 2012: €252.3 million). Sales revenues with third
parties in our Production Solutions segment amounted to €82.6
million in the nine-month period ended September 30, 2015 and
to €72.4 million in the nine-month period ended September 30,
2014 (in the fiscal year ended December 31, 2014: €100.8 million,
in the fiscal year ended December 31, 2013: €75.4 million, in the
fiscal year ended December 31, 2012: €67.7 million). Sales
revenues with third parties in our E/E segment amounted to
€117.4 million in the nine-month ended September 30, 2015 and
to €85.6 million in the nine-month period ended September 30,
2014 (in the fiscal year ended December 31, 2014: €123.7 million,
in the fiscal year ended December 31, 2013: €97.8 million, in the
fiscal year ended December 31, 2012: €37.5 million).
The financial information shown above is taken from (i) the
audited consolidated financial statements as of and for the fiscal
year ended December 31, 2014, which includes corresponding
figures for the fiscal years ended December 31, 2013 and
December 31, 2012, of EDAG Engineering GmbH and (ii) the
unaudited condensed consolidated interim financial statements
as of and for the nine-month period ended September 30, 2015
of EDAG Engineering Schweiz Sub-Holding AG with the
corresponding unaudited interim financial information for the
nine-month period ended September 30, 2014 on the level of
EDAG Engineering GmbH.
Our Competitive Strengths
Š
We are active in the growth market for automotive
engineering services and we believe we are well-positioned to
grow above market average.
Š
We are one of the largest independent ESPs worldwide (source:
A.T. Kearney Report) and we believe we have the scale needed
to operate successfully in a market which favors size and
experience.
Š
We believe we are a partner of choice for the automotive
industry and have a blue chip customer base with a focus on
German OEMs.
Š
We believe we stand for leading technology and innovation
based on German engineering excellence and have capabilities
across the entire vehicle value chain.
Š
We have a highly skilled engineering workforce, an
experienced management and offer in-house development
opportunities.
Š
We have a solid financial profile based on strong revenue
growth and attractive financial returns.
5
Our Strategy
B.4a
Most significant
recent trends
affecting the
issuer and the
industry in which
it operates.
Š
Further improving our productivity
Š
Focusing on innovation
Š
Fostering our attractiveness as an employer
Š
Further strengthening our market position
Š
Further increasing profitability
Š
Maintaining operating flexibility
We believe that the development of the automotive ESP market
is positively influenced by global megatrends driving research
and development (“R&D”) needs at the OEM and supplier level,
and thus in turn demand for engineering services. These trends
can be summarized in industry specific and ESP market specific
trends.
Industry specific trends include:
Š
the necessity for OEMs to offer a greater variety of models as
well as more options to individualize models;
Š
rapid advancements in technology as well as increasingly
comprehensive vehicle configuration and upgrade options;
Š
the emergence of e-mobility, including hybrid electric vehicles, and
other environmentally-friendly technologies aimed at lower fuel
consumption and a reduction of CO2 emissions;
Š
a continuous increase in the electronic complexity of cars
(connectivity and autonomous driving);
Š
new mobility concepts (car sharing) and market entrants; and
Š
smart production planning (Industry 4.0).
ESP market specific trends include:
Š
a consolidation trend over the past few years, due to OEMs’
requests for large-scale project capabilities and full vehicle
competence as they outsource engineering projects to ESPs;
Š
OEMs focusing on their core competence, while outsourcing
development tasks that are increasingly complex but not
regarded as strategic;
Š
in Germany, current discussions around legislation on
outsourcing of personnel aim to address and define the rules
that differentiate between genuine work package agreements
(“Werkverträge”) and activities qualifying as “employee
leasing” (“Arbeitnehmerüberlassung”).
6
B.5
Description of the
Group and the
issuer’s position
within the Group.
As of the date of this prospectus, the Company has no subsidiaries
and conducts no operative business. Upon consummation of the
Contribution, the Company will become the parent company of
the Group. The Group’s business is conducted by EDAG
Engineering GmbH, which will be an indirect subsidiary of the
Company upon consummation of the Contribution, and its direct
and indirect subsidiaries.
The following diagram provides a simplified overview of the Group structure and the
Company’s significant subsidiaries, assuming consummation of the Contribution:
100%
EDAG Engineering Schweiz
Sub-Holding AG
100%
EDAG Engineering Holding GmbH
100%
EDAG Engineering GmbH
100% (directly or indirectly)
EDAG Production
Solutions GmbH & Co.
KG
EDAG do Brasil, Ltda.
B.6
Persons who,
directly or
indirectly, have a
(notifiable)
interest in the
issuer’s capital and
voting rights.
Rücker Lypsa, S.L.
BFFT Gesellschaft für
Fahrzeugtechnik
mbH
As of the date of this prospectus, the following persons, directly
or indirectly, have a notifiable interest in the Company’s capital
and voting rights:
Direct
Shareholder(s)
Ultimate Shareholder
Dr. Lutz Mario Helmig1 . . . . . . . . . . . . . . ATON GmbH. . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1)
Beneficial (Indirect)
Ownership of the
Company, in %
Shareholding
(immediately
prior to the
offering)
100.00
100.00
The voting rights held by ATON GmbH are attributed to Dr. Lutz Mario Helmig
pursuant to § 22 paragraph 1 German Securities Trading Act
(Wertpapierhandelsgesetz).
Voting rights.
Each Company’s share carries one vote at the Company’s
shareholders’ meeting. There are no restrictions on voting rights.
All shares have identical voting rights.
Direct or indirect
control over the
issuer and nature
of such control.
As of the date of this prospectus, the Company is directly
controlled by the Selling Shareholder, ATON GmbH, which holds
an interest of 100% in the Company and, resulting therefrom, has
the power to govern the financial and operating policies of the
7
Company. The Selling Shareholder is controlled by Dr. Lutz Mario
Helmig. Upon completion of the Offering (as defined below
in E.3), the Selling Shareholder together with HORUS
Vermögensverwaltungs GbR, a company controlled by Dr. Lutz
Mario Helmig, which might acquire Offer Shares (as defined
below under E.3) in connection with this Offering on a nonpreferential basis (see below under E.4), will hold at least 59.75%
of the Company’s share capital.
The Selling Shareholder has entered into an agreement with the
Company in which the Selling Shareholder has undertaken, for a
period starting on the first day of trading of the shares of the
Company on the Frankfurt Stock Exchange (currently expected to
take place on December 2, 2015) and ending on the day of the
second ordinary shareholders’ meeting of the Company after the
first day of trading, however, at least for a period of 19 months
after the first day of trading and with respect to such number of
shares of the Company directly or indirectly held by the Selling
Shareholder upon completion of the Offering (as defined below
in E.3)
Š
to exercise its voting rights in ordinary shareholders’ meetings
of the Company only with regard to half of the persons that
are eligible as members for the board of directors of the
Company ( the “Board of Directors”);
Š
to exercise its voting rights in extraordinary shareholders’
meetings of the Company regarding the election of additional
members of the Board of Directors only in so far as and to the
extent that, in case of election of such person, the overall
number of members of the Board of Directors that were
elected with the voting rights of the Selling Shareholders does
not constitute the majority;
Š
not to exercise its voting rights in extraordinary shareholders’
meetings of the Company, in which the removal of a member of
the Board of Directors shall be decided, in so far as in case of the
removal of such person the majority of the members of the Board
of Directors would have been elected with the voting rights of the
Selling Shareholder. However, in case of an extraordinary
shareholders’ meeting of the Company held before the first
ordinary shareholders’ meeting after the first day of trading, the
Selling Shareholder would, at any rate, exercise its voting rights
only with regard to a removal of Thomas Eichelmann or Sylvia
Schwing (or their successors); and
Š
to vote, in ordinary or extraordinary shareholders’ meetings,
against the removal of the provision in the Articles of
Association according to which the Chairman of the Board of
Directors has no casting vote.
Furthermore, the Selling Shareholder agreed to procure that any
persons that have control over the Selling Shareholder and own
shares in the Company, will only exercise their voting rights with
regard to shares of the Company in accordance with the above
provisions.
To the extent HORUS Vermögensverwaltungs GbR, a company
controlled by Dr. Lutz Mario Helmig, will acquire any Offer Shares
(as defined below under E.3) in connection with the Offering on
a non-preferential basis (as defined below under E.3 and also see
8
below under E.4), HORUS Vermögensverwaltungs GbR will enter
into a voting rights agreement with the Company substantially
identical with the agreement entered into by the Company and
the Selling Shareholder as described above.
B.7
Selected key
historical financial
information.
We have a complex financial history, which may limit the
comparability of the financial information contained in this
prospectus.
The Company was incorporated on November 2, 2015. Since the
Company, as of the date of this prospectus, has not conducted
any business, acquired any assets or incurred any liabilities other
than as directly related to its incorporation and the Offering (as
defined below in E.3), we do not present any financial
information of the Company in this prospectus except for its
audited opening statement of financial position as of November
2, 2015. The financial information contained in the following
tables is taken from (i) the audited consolidated financial
statements as of and for the fiscal year ended December 31, 2014,
which includes corresponding figures for the fiscal years ended
December 31, 2013 and December 31, 2012, of EDAG Engineering
GmbH and (ii) the unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended
September 30, 2015 of EDAG Engineering Schweiz Sub-Holding
AG with the corresponding unaudited interim financial
information for the nine-month period ended September 30,
2014 on the level of EDAG Engineering GmbH.
The audited consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (“IFRS”) and the
have been prepared in accordance with IFRS on interim financial
reporting (IAS 34). PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, office
Hanover, Germany (“PwC Germany”), has audited the
consolidated financial statements of EDAG Engineering GmbH as
of and for the fiscal year ended December 31, 2014, which
include the corresponding figures for the fiscal year ended
December 31, 2013, the opening statement of financial position
as of January 1, 2013 and, on a combined basis, the
corresponding figures as of and for the fiscal year ended
December 31, 2012 and issued an unqualified auditor’s report
(uneingeschränkter Bestätigungsvermerk) on these consolidated
financial statements as of December 31, 2014. The
aforementioned audited consolidated financial statements and
the auditor’s report thereon are included in the financial section
of this prospectus. Our historical results are not necessarily
indicative of the results that should be expected in the future and
our interim results are not necessarily indicative of the results
that should be expected for the full year of the period.
On September 14, 2015 EDAG Engineering Schweiz Sub-Holding
AG was incorporated by contribution in kind of all outstanding
shares in EDAG Engineering Holding GmbH, the German
intermediate holding company which holds all of the shares in
EDAG Engineering GmbH. Concurrently with the determination
of the Offer Price (as defined below in E.3), the Selling
Shareholder will contribute all shares in EDAG Engineering
9
Schweiz Sub-Holding AG to the Company by way of the
Contribution. Following such Contribution, the Company will
therefore directly hold all shares in EDAG Engineering Schweiz
Sub-Holding AG and will indirectly hold, through EDAG
Engineering Schweiz Sub-Holding AG and EDAG Engineering
Holding GmbH, all shares in EDAG Engineering GmbH. The
Group’s business is conducted by EDAG Engineering GmbH, which
will be an indirect subsidiary of the Company upon
consummation of the Contribution, and its direct and indirect
subsidiaries. Unless otherwise indicated, all historical
consolidated/combined financial information included in this
prospectus are either of EDAG Engineering Schweiz Sub-Holding
AG or EDAG Engineering GmbH.
Between September 14, 2015, the incorporation date of EDAG
Engineering Schweiz Sub-Holding AG, and September 30, 2015,
EDAG Engineering GmbH and EDAG Engineering Holding GmbH
have entered into certain transactions (in particular the
assumption of a loan liability of EDAG Engineering GmbH in an
amount of €107.3 million by EDAG Engineering Holding GmbH as
of September 30, 2015), the effects of which would adversely
affect the comparability between unaudited consolidated interim
financial information for the nine-month period ended
September 30, 2015 prepared on the level of EDAG Engineering
GmbH and the audited consolidated and combined financial
information included in this prospectus for the fiscal years ended
December 31, 2012, 2013 and 2014 prepared on the level of
EDAG Engineering GmbH. In order to provide investors with more
comparable financial information for these periods, we present
the unaudited consolidated interim financial information as of
and for the nine-month period ended September 30, 2015 on the
level of EDAG Engineering Schweiz Sub-Holding AG with the
corresponding unaudited interim financial information for the
nine-month period ended September 30, 2014 on the level of
EDAG Engineering GmbH.
Furthermore, EDAG Engineering GmbH was established in April
2012 and acquired by the Selling Shareholder in July 2012. Until
January 1, 2014, EDAG Engineering GmbH and EDAG GmbH & Co.
KGaA (which was the former parent entity of the EDAG Group)
were sister companies under the Selling Shareholder. With effect
from January 1, 2014, EDAG GmbH & Co. KGaA was merged into
EDAG Engineering GmbH by way of a mixed non-cash
contribution agreement against the assumption of certain
liabilities. As a result, 2014 is the first fiscal year for which we
were able to prepare consolidated financial statements for EDAG
Engineering GmbH and all of its current subsidiaries. The audited
consolidated financial statements as of and for the fiscal year
ended December 31, 2014 of EDAG Engineering GmbH contain
the corresponding period ended December 31, 2013. However,
for the fiscal year ended December 31, 2012, the corresponding
figures are shown on a combined basis and therefore have
limited comparability. In addition, we have executed several
material acquisitions and disposals since 2012, which may further
limit the comparability of the financial information as presented
10
in the audited consolidated financial statements as of and for the
fiscal year ended December 31, 2014 contained in this prospectus.
On September 24, 2012, EDAG Engineering GmbH acquired a
majority of the shares of Rücker AG, a technological design
engineering company focusing (at that time) on the international
automotive, aircraft and aerospace industries. For the purposes of
the audited combined financial information for the fiscal year
ended December 31, 2012, the Rücker Group was first included in
the group of combined entities with effect for accounting
purposes from October 1, 2012. On January 18, 2013, EDAG
Engineering GmbH acquired the BFFT Group, a manufactureindependent engineering service provider for the automotive
industry. For the purposes of the audited consolidated financial
information for the fiscal year ended December 31, 2013, the
BFFT Group was first included in the group of consolidated
entities with effect for accounting purposes from January 1, 2013.
We disposed of several subsidiaries, including the Group’s
aerospace subsidiaries which were acquired as part of the Rücker
Group and had been included in the group of combined entities
with effect for accounting purposes from October 1, 2012 within
the Others segment, these subsidiaries were classified as a
disposal group in accordance with IFRS 5 for the fiscal year ended
December 31, 2013. As a result, these subsidiaries’ results were
included in our audited consolidated statement of comprehensive
income for the fiscal year ended December 31, 2013 and their
assets and liabilities were presented as assets held for sale in our
audited consolidated statement of financial position as of
December 31, 2013. These subsidiaries’ results for the threemonth period ended March 31, 2014 were included in our
audited consolidated statement of comprehensive income for the
fiscal year ended December 31, 2014. With effect from March 31,
2014, the Group disposed of its shares in these aerospace
subsidiaries, following which these subsidiaries ceased to be
included in the consolidated group of entities for the purposes of
the audited consolidated financial information for the fiscal year
ended December 31, 2014. As a result, these subsidiaries’ assets
and liabilities were not included in the audited consolidated
statement of financial position as of December 31, 2014. In
addition, we sold EKS InTec GmbH on May 31, 2014, following
which this subsidiary ceased to be included in the consolidated
group of entities for the purposes of the audited consolidated
financial information for the fiscal year ended December 31,
2014. Because of these effects, the financial information as
presented in our audited consolidated financial statements as of
and for the fiscal year ended December 31, 2014 may not be fully
comparable and investors should take into consideration the
material differences resulting from the factors discussed above.
11
The following table shows selected financial information taken or
TAKEN OR DERIVED derived from the unaudited condensed consolidated interim
statements of comprehensive income of EDAG Engineering
FROM THE
Schweiz Sub-Holding AG for the nine-month periods ended
CONSOLIDATED/
September 30, 2015 and September 30, 2014 as well as from the
COMBINED
audited consolidated statements of comprehensive income for the
fiscal years ended December 31, 2014 and December 31, 2013 and
STATEMENT OF
the audited combined statement of comprehensive income for the
COMPREHENSIVE
fiscal year ended December 31, 2012 of EDAG Engineering GmbH:
INCOME
SELECTED DATA
For the nine-month
period ended
September 30,
2015
(in € thousand)
2014(1)
(unaudited, consolidated)
PROFIT OR LOSS
Continuing operations
Sales revenues and changes
in inventories . . . . . . . . . . .
Sales revenues . . . . . . . . .
Changes in inventories . .
Other income . . . . . . . . . . .
Material expenses . . . . . . . .
Gross profit . . . . . . . . . . . .
Personnel expenses . . . . . .
Depreciation, amortization
and impairment . . . . . . . . .
Other expenses . . . . . . . . . .
.
.
.
.
.
534,035
534,375
ⳮ340
15,324
ⳮ72,877
For the year ended December 31,
2014(1)(2)
2013(2)
(audited
unless otherwise
indicated, consolidated)
2012(3)
(audited
unless otherwise
indicated, combined)
506,286
689,748
632,412
513,954
697,458
620,127
ⳮ7,668
ⳮ7,710
12,285
22,187
58,868
16,326
ⳮ78,719 ⳮ115,823 ⳮ104,943
415,181
415,836
ⳮ655
20,267
ⳮ79,514
.
476,482
449,754
632,793
543,795
. ⳮ332,311 ⳮ314,147 ⳮ417,308 ⳮ386,226
355,934
ⳮ245,664
.
.
ⳮ18,087
ⳮ81,132
ⳮ18,202 ⳮ25,613
ⳮ70,517 ⳮ102,229
ⳮ24,984
ⳮ94,062
ⳮ12,475
ⳮ62,313
Earnings before interest and
taxes (EBIT)(4) . . . . . . . . . . . .
44,952
46,888
87,643
38,523
35,482
44,952
46,888
87,643
38,523
35,482
5,499
5,260
6,965
8,351
1,338
—
ⳮ11,758
ⳮ26,224
—
ⳮ4,777
ⳮ2,177
—
—
—
—
—
30
30
—
—
RECONCILIATION TO ADJUSTED
EARNINGS BEFORE INTEREST
AND TAXES (ADJUSTED EBIT)
taxes (EBIT)(4) . . . . . . . . . . . .
Adjustments:
Expenses (+) from
purchase price
allocation(5) . . . . . . . . . .
Income (ⳮ) / expenses
(+) from
deconsolidations(6) . . . . . .
Income (ⳮ) from the
reversal of
provisions(7) . . . . . . . . . .
Income (ⳮ) / expenses
(+) from initial
consolidations(8) . . . . . . .
Expenses (+) from
additional selling costs
from M&A
transactions(9) . . . . . . . . .
Expenses (+) from
restructuring(10) . . . . . . .
Income (ⳮ) from the sale
of real estate(11) . . . . . . .
Expenses (+) from the sale
of real estate(12) . . . . . . .
Expenses (+) from
impairment of real
estate(13) . . . . . . . . . . . . .
Adjusted earnings before
interest and taxes
(Adjusted EBIT)(4) . . . . . .
71
499
866
—
—
6,329
3,972
4,845
2,791
—
ⳮ250
—
ⳮ18,405
—
—
381
—
1,292
—
—
—
—
865
—
—
54,805
44,891
57,877
49,665
32,043
Adjusted Core EBIT(14)
(unaudited) . . . . . . . . . . . .
55,076
42,616
53,185
42,984
29,566
Adjusted Core EBIT margin
(%)(15)(unaudited) . . . . . . .
10.3%
9.1%
8.4%
7.7%
8.3%
taxes (EBIT)(4) . . . . . . . . . . .
Result from investments
accounted for using the
equity method . . . . . . . . .
Financial income . . . . . . . . . .
Financing expenses . . . . . . . .
44,952
46,888
87,643
38,523
35,482
1,052
1,841
ⳮ8,050
—
518
ⳮ9,142
—
1,035
ⳮ11,752
—
1,487
ⳮ8,301
50
2,997
ⳮ5,938
Financial result . . . . . . . . . . .
ⳮ5,157
ⳮ8,624
ⳮ10,717
ⳮ6,814
ⳮ2,891
Earnings before taxes from
continuing operations . . .
Income taxes . . . . . . . . . . . . .
39,795
ⳮ12,337
38,264
ⳮ9,295
76,926
ⳮ18,688
31,709
ⳮ9,982
32,591
ⳮ7,672
Earnings after taxes from
continuing operations . . .
27,458
28,969
58,238
21,727
24,919
12
For the nine-month
period ended
September 30,
2015
(in € thousand)
2014(1)
2014(1)(2)
2013(2)
(audited,
unless otherwise
indicated consolidated)
2012(3)
(audited,
unless otherwise
indicated combined)
Discontinued operations(16)
discontinued
operations . . . . . . . . . . . . .
—
1,550
1,586
ⳮ1,905
ⳮ767
Profit or loss . . . . . . . . . . . . .
27,458
30,519
59,824
19,822
24,152
27,423
30,573
59,868
18,634
24,277
36
ⳮ54
ⳮ43
1,188
ⳮ125
FROM THE PROFIT OR LOSS
ATTRIBUTABLE TO:
Shareholders of the parent
company . . . . . . . . . . . . . .
Minority shares (noncontrolling interest) . . . . .
(1) Operating results for the various subsidiaries disposed of during the nine-month
period ended September 30, 2014 or year ended December 31, 2014, respectively,
are included only for the periods prior to their respective disposals.
(2) Data for the fiscal years ended December 31, 2014 and December 31, 2013 on a
consolidated basis and each comprising the business of the Rücker Group and the
business of the BFFT Group for the full fiscal year.
(3) Data for the fiscal year ended December 31, 2012 on a combined basis and
comprising the business of the Rücker Group with effect for accounting purposes
from October 1, 2012, the date of the initial inclusion of the Rücker Group in our
combined group of entities for the purposes of our audited combined financial
information. Data excludes the business of the BFFT Group, which was acquired
with effect for accounting purposes from January 1, 2013.
(4) EBIT and Adjusted EBIT are non-IFRS measures. “EBIT” represents earnings before
interest and taxes and “Adjusted EBIT” represents EBIT adjusted for non-recurring
items. While the amounts included in EBIT and Adjusted EBIT have been derived
from our audited consolidated financial statements as of and for the fiscal year
ended December 31, 2014 and our unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended September 30,
2015, as applicable, such measures are not financial measures calculated in
accordance with IFRS. Accordingly, EBIT and Adjusted EBIT should be viewed as
supplemental to, but not as a substitute for, measures presented in our
consolidated or combined statements of comprehensive income or our consolidated
or combined statements of cash flow, which are prepared in accordance with IFRS.
Our management uses EBIT and Adjusted EBIT to assess our operating performance
and as a measure of economic success of our business. In addition, we believe that
EBIT and Adjusted EBIT are measures commonly used by investors. EBIT and
Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly
titled measures reported by other companies due to differences in the way these
measures are calculated.
(5) Expenses from purchase price allocation represents the effects of the amortization
of step-ups due to purchase price allocation attributable to the acquisition of the
Rücker Group, the BFFT Group and iSILOG GmbH in the amount of €4.2 million,
€1.2 million and €0.1 million respectively, for the nine-month period ended
September 30, 2015, to the acquisition of the Rücker Group and the BFFT Group in
an amount of €4.0 million and €1.2 million respectively, for the nine-month period
ended September 30, 2014, to the acquisition of the Rücker Group and the BFFT
Group in an amount of €5.3 million and €1.6 million, respectively, for the fiscal year
ended December 31, 2014 and €5.3 million and €3.0 million, respectively, for the
fiscal year ended December 31, 2013. For the fiscal year ended December 31, 2012,
expenses from purchase price allocation represents the effects of the amortization
of step-ups due to purchase price allocation of €1.3 million attributable to the
acquisition of the Rücker Group.
(6) Income / expenses from deconsolidations for the nine-month period ended
September 30, 2014 represents the disposals of our aerospace subsidiaries (which
had previously been a part of the Rücker Group) (income of €4.0 million) and EKS
InTec GmbH (income of €8.0 million). Income / expenses from deconsolidations for
the fiscal year ended December 31, 2014 represents the disposals of our aerospace
subsidiaries (income of €4.6 million), EKS InTec GmbH (income of €8.0 million) and
“Werkzeug und Karosseriesysteme Eisenach” business division by way of a spin-off
for absorption into EDAG Werkzeug + Karosserie GmbH (income of €14.4 million).
In the fiscal year ended December 31, 2012, income / expenses from
deconsolidations comprises the deconsolidation of Rosata GrundstücksVermietungsgesellschaft mbH & Co. Objekt Fulda-West KG.
(7) Income from the reversal of provisions includes the reversal of provisions relating
to severance pay and brokerage in connection with certain sale-and-lease-back
transactions.
13
(8) Income / expenses from initial consolidations represents the initial consolidation of
our Russian subsidiary EDAG Production Solutions RU OOO (Obschtschestwo s
ogranitschennoi otwetstwennostju).
(9) Expenses from additional selling costs from M&A transactions for the nine-month
period ended September 30, 2015 and for the nine-month period ended
September 30, 2014 represents follow-up costs in connection with the disposal of
certain subsidiaries and costs relating to a merger (EDAG Testing Solutions GmbH)
and for the fiscal year ended December 31, 2014 represents the costs of the
disposals of certain subsidiaries, including the aerospace subsidiaries and
EKS Intec GmbH.
(10) Expenses from restructuring for the nine-month period ended September 30, 2015
and for the nine-month period ended September 30, 2014 represents expenses for
consulting and reengineering (€5.7 million and €1.4 million), respectively, and
severance pay (€0.6 million and €2.6 million), respectively. Expenses from
restructuring represents expenses for consulting and reengineering (€1.6 million)
and severance pay (€3.2 million) for the fiscal year ended December 31, 2014 and
severance pay (€0.7 million) and consulting (€2.1 million) for the fiscal year ended
December 31, 2013.
(11) Income from the sale of real estate for the fiscal year ended December 31, 2014
represents the disposal of real estate (€2.5 million) and income from a sale-andlease-back transaction (€15.9 million).
(12) Expenses from the sale of real estate for the nine-month period ended
September 30, 2015 represents follow-up costs and for the fiscal year ended
December 31, 2014 expenses for consulting (€0.1 million) and sales provisions
(€1.2 million).
(13) Expenses from impairment of real estate for the fiscal year ended December 31,
2014 represents the impairment of the fair value valuation of real estate in a
subsidiary in the Czech Republic.
(14) Adjusted Core EBIT is a non-IFRS measure. The first component of the Adjusted
Core EBIT represents the sum of EBIT for our three core segments (Vehicle
Engineering, Electrics/Electronics and Production Solutions), and excludes our
Others segment. The second component is the purchase price allocation
adjustments on a Group level which are added to the first component. These
purchase price allocation adjustments relate only to the three core segments
(Vehicle Engineering, Electrics/Electronics and Production Solutions). No purchase
price allocation adjustments relate to the Others segment. Our management uses
Adjusted Core EBIT to assess our operating performance and as a measure of
success of our business. While the amounts included in Adjusted Core EBIT have
been derived from our audited consolidated financial statements as of and for the
fiscal year ended December 31, 2014 and our unaudited condensed consolidated
interim financial statements as of and for the nine-month period ended
September 30, 2015, as applicable, this measure is not a financial measure
calculated in accordance with IFRS. Accordingly, Adjusted Core EBIT should be
viewed as supplemental to, but not as a substitute for, measures presented in our
(15) Adjusted Core EBIT margin is a non-IFRS measure. Adjusted Core EBIT margin
represents the ratio of our Adjusted Core EBIT over the sales revenues (including
changes in inventories) with third parties of our three core segments (Vehicle
Engineering, Electrics/Electronics and Production Solutions, excluding our Others
segment). While the amounts included in Adjusted Core EBIT margin have been
derived from our audited consolidated financial statements as of and for the fiscal
year ended December 31, 2014 and our unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended September 30,
2015, as applicable, this measure is not a financial measure calculated in accordance
with IFRS. Accordingly, Adjusted Core EBIT margin should be viewed as
(16) Discontinued operations represents expenses in connection with an indemnity
payment for the nine-month period ended September 30, 2014 and in the fiscal
year ended December 31, 2014, provisions in connection with the sale of the
“Production” business division in the fiscal year ended December 31, 2013 and
assets, liabilities and provisions of the “Production Systems” and “Production”
business divisions in the fiscal year ended December 31, 2012, which were classified
as being held for sale and fully deconsolidated in 2012.
14
SELECTED DATA
FROM THE
CONSOLIDATED/
COMBINED
STATEMENT OF
FINANCIAL
POSITION
The following table shows selected financial information taken
from the unaudited condensed consolidated interim statement of
financial position as of September 30, 2015 of EDAG Engineering
Schweiz Sub-Holding AG as well as from the audited consolidated
statements of financial position as of December 31, 2014 and
December 31, 2013 and the audited combined statement of
financial position as of December 31, 2012 of EDAG Engineering
GmbH:
As of
September 30,
As of
December 31,
2015
2014
(unaudited,
consolidated)
(in € thousand)
(1)
2013
(audited,
consolidated)
(1)
As of
January 1,
2013(2)
(audited,
combined)
ASSETS
Non-current assets . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . .
187,333 183,193 208,920 173,714
311,256 301,364 295,712 209,173
498,589 484,557 504,632 382,887
EQUITY, LIABILITIES AND PROVISIONS
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities and provisions . . . . . .
Current liabilities and provisions . . . . . . . . . .
Total equity, liabilities and provisions . . . . .
146,512
200,382
151,695
498,589
117,411
201,131
166,015
484,557
102,922 113,005
234,543 40,402
167,167 229,480
504,632 382,887
(1) Data as of December 31, 2014 and December 31, 2013 on a consolidated basis and
each comprising the business of the Rücker Group and the business of the BFFT
Group. Furthermore, our aerospace business, which was formerly part of the Rücker
Group, was included in our audited combined financial information as of
December 31, 2012. As of December 31, 2013, our aerospace business was classified
as a “disposal group” under IFRS 5, and it was disposed of on March 31, 2014.
(2) Data as of January 1, 2013 on a combined basis and comprising the business of the
Rücker Group. Data excludes the business of the BFFT Group, which was acquired
SELECTED DATA
FROM THE
CONSOLIDATED/
COMBINED
STATEMENT OF
CASH FLOW
The following table shows selected financial information taken
from the unaudited condensed consolidated interim statement of
cash flow of EDAG Engineering Schweiz Sub-Holding AG for the
nine-month periods ended September 30, 2015 and
September 30, 2014 as well as from the audited consolidated
statements of cash flow for the fiscal years ended December 31,
2014 and December 31, 2013 and the audited combined
statement cash flow for the fiscal year ended December 31, 2012
of EDAG Engineering GmbH:
For the nine-month
period ended
September 30,
2015
2014(1)
(unaudited,
consolidated)
(in € thousand)
Cash inflow/outflow from
operating activities/
operating cash flow . . . . ⳮ16,259
12,152
investing activities/
investing cash flow . . . . ⳮ16,061 ⳮ41,900
financing activities/
financing cash flow . . . .
20,423 ⳮ17,419
Free cash flow (FCF) –
equity approach(4) . . . . . ⳮ32,320 ⳮ29,748
2014(1)(2)
2013(2)
(audited,
consolidated)
56,718
ⳮ32,596
2012(3)
(audited,
combined)
21,029
44,788
ⳮ62,440 ⳮ53,048
ⳮ54,774
75,979
ⳮ6,443
24,122
ⳮ41,411
ⳮ8,260
(1) Data for the various subsidiaries disposed of during the nine-month period ended
September 30, 2014 or year ended December 31, 2014, respectively, are included
only for the periods prior to their respective disposals.
(2) Data for the fiscal years ended December 31, 2014 and December 31, 2013 on a
consolidated basis and each comprising the business of the Rücker Group and the
business of the BFFT Group for the full fiscal year. Furthermore, our aerospace
15
business, which was formerly part of the Rücker Group, was included in our audited
combined financial information for the fiscal year ended December 31, 2012 with
effect for accounting purposes from October 1, 2012, the date of the initial
inclusion of the Rücker Group in our combined group of entities for the purposes
of our audited combined financial information.
(3) Data for the fiscal year ended December 31, 2012 on a combined basis and
comprising the business of the Rücker Group with effect for accounting purposes
from October 1, 2012, the date of the initial inclusion of the Rücker Group in our
combined group of entities for the purposes of our audited combined financial
information. Data excludes the business of the BFFT Group, which was acquired
(4) Free cash flow (FCF) – equity approach is a non-IFRS measure. Free cash flow (FCF) –
equity approach represents operating cash flow less investing cash flow. While the
amounts included in free cash flow (FCF) – equity approach have been derived from
our audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 and our unaudited condensed consolidated interim financial
statements as of and for the nine-month period ended September 30, 2015, as
applicable, such measure is not a financial measure calculated in accordance with
IFRS. Accordingly, free cash flow (FCF) – equity approach should be viewed as
consolidated or combined statements of cash flow, which are prepared in
accordance with IFRS. Free cash flow (FCF) – equity approach, as presented in this
prospectus, may not be comparable to similarly titled measures reported by other
companies due to differences in the way these measures are calculated.
Significant
changes to the
issuer’s financial
condition and
operating results
during and
subsequent to the
period covered by
the historical key
financial
information.
Results of Operations
The following significant changes in our results of operations
occurred in the nine-month period ended September 30, 2015
and in the fiscal years 2014, 2013 and 2012:
Nine-month Periods Ended September 30, 2014 and
September 30, 2015
Our sales revenues and changes in inventories increased by
€27.7 million, or 5.5%, from €506.3 million in the nine-month
period ended September 30, 2014 to €534.0 million in the ninemonth period ended September 30, 2015. These increases were
primarily due to an increase in customer demand for engineering
services and our success in hiring additional employees to increase
our capacities and meet this demand by servicing a greater number
of projects. The increased customer demand, in turn, was largely
due to positive trends in global economic development and the
automotive industry which encouraged OEMs to award larger and
more complex work packages to external engineering service
providers. Besides the positive trends described above, the increase
in our Electrics/Electronics segment was mainly due to a higher
amount of work packages as compared to employee leasing
contracts.
Our earnings before interest and taxes (EBIT) decreased by
€1.9 million, or 4.1%, from €46.9 million in the nine-month
period ended September 30, 2014 to €45.0 million in the ninemonth period ended September 30, 2015. This decrease was
partly due to the absence of income from deconsolidation for the
nine-month period ended September 30, 2015, which had
contributed €11.8 million to EBIT in the nine-month period ended
September 30, 2014, as well as higher expenses from
restructuring. These developments were offset in part by a fixed
cost degression as a result of an increase in sales revenues and
changes in inventories as well as higher margins in connection
with customer projects.
16
Our Adjusted EBIT increased by €9.9 million, or 22.1%, from
€44.9 million in the nine-month period ended September 30,
2014 to €54.8 million in the nine-month period ended September
30, 2015. This was primarily due to a fixed cost degression as a
result of an increase in sales revenues and changes in inventories
as well as higher margins in connection with customer projects.
Our Adjusted Core EBIT, which comprises the Adjusted EBIT of
our three segments Vehicle Engineering, Production Solutions
and Electrics/Electronics and excludes our Others segment,
increased by €12.5 million, or 29.2%, from €42.6 million in the
nine-month period ended September 30, 2014 to €55.1 million in
the nine-month period ended September 30, 2015. Our Adjusted
Core EBIT margin, which is the Adjusted EBIT margin of our three
segments Vehicle Engineering, Production Solutions and Electrics/
Electronics, increased by 1.2 percentage points, from 9.1% in the
nine-month period ended September 30, 2014 to 10.3% in the
nine-month period ended September 30, 2015, primarily due to
the realization of cost and revenue synergies from the Rücker
Group integration.
Fiscal Years 2014 and 2013
€57.3 million, or 9.1%, from €632.4 million in the fiscal year
ended December 31, 2013 to €689.7 million in the fiscal year
ended December 31, 2014. These increases were primarily due to
positive trends in global economic development and the
automotive industry which encouraged OEMs to award larger and
more complex work packages to external engineering service
providers, as well as our hiring of additional engineers, which
allowed us to service a greater number of projects.
Our earnings before interest and taxes (EBIT) increased
significantly, by €49.1 million, or 127.5%, from €38.5 million in
the fiscal year ended December 31, 2013 to €87.6 million in the
fiscal year ended December 31, 2014. Besides higher sales
revenues, which were due to positive trends in the global
economic development and the automotive industry, a greater
number of projects and the completed integration of the Rücker
Group, this significant increase in earnings was partly due to
extraordinary factors from sales of the Rücker aerospace
companies, EKS InTec GmbH and real estate sales. Moreover,
EDAG Engineering GmbH’s business unit “Werkzeug und
Karosseriesysteme Eisenach” was initially spun off into EDAG
Werkzeug + Karosserie GmbH. In this context, FFT
Produktionssysteme GmbH & Co. KG acquired 51% of the shares
in the company in the fiscal year ended December 31, 2014, with
the remaining 49% of the shares being accounted for using the
at-equity method as of December 31, 2014. These positive
extraordinary effects from sales were diminished by restructuring
expenses related to the merger of EDAG Engineering GmbH and
the Rücker Group which was consummated in 2014, the resulting
depreciation and amortization from the purchase price allocation
and impairment relating to a single building that was qualified as
an asset held for sale. After adjustments for these extraordinary
effects the Adjusted EBIT amounted to €57.9 million for the fiscal
year ended December 31, 2014 and was €8.2 million, or 16.5%
above the Adjusted EBIT for the fiscal year ended December 31,
2013.
17
Our Adjusted Core EBIT increased by €10.2 million, or 23.7%, from
€43.0 million in the fiscal year ended December 31, 2013 to
€53.2 million in the fiscal year ended December 31, 2014. Our
Adjusted Core EBIT margin increased by 0.7 percentage points,
from 7.7% in the fiscal year ended December 31, 2013 to 8.4% in
the fiscal year ended December 31, 2014.
Fiscal Years 2013 and 2012
€217.2 million, or 52.3%, from €415.2 million in the fiscal year
ended December 31, 2012 to €632.4 million in the fiscal year
ended December 31, 2013. These increases were primarily due to
the full inclusion of the Rücker Group and BFFT Group in the fiscal
year ended December 31, 2013. The remainder of the increase
across all segments was due to positive trends in global economic
development and the automotive industry which encouraged
OEMs to award larger and more complex work packages to
external engineering service providers and our hiring of
additional engineers which allowed us to service a greater
number of projects.
Our earnings before interest and taxes (EBIT) increased by
€3.0 million, or 8.6%, from €35.5 million in the fiscal year ended
December 31, 2012 to €38.5 million in the fiscal year ended
December 31, 2013. This increase was primarily due to the full
inclusion of the Rücker Group and the BFFT Group in the fiscal
year ended December 31, 2013. The remainder was primarily due
to increases in sales revenues and changes in inventories, offset in
part by a decrease in other income and increases in expenses, as
well as an increase in depreciation, amortization and impairment
by €12.5 million from €12.5 million the fiscal year ended
December 31, 2012 to €25.0 million in the fiscal year ended
December 31, 2013 primarily due to the acquisition of the Rücker
Group and BFFT Group.
Our Adjusted EBIT increased by €17.6 million, or 55.0%, from
€32.0 million in the fiscal year ended December 31, 2012 to
€49.7 million in the fiscal year ended December 31, 2013. This
was primarily due to the full inclusion of the Rücker Group and
the BFFT Group in the fiscal year ended December 31, 2013, as
well as improved market conditions.
Our Adjusted Core EBIT increased by €13.4 million, or 45.4%,
from €29.6 million in the fiscal year ended December 31, 2012 to
€43.0 million in the fiscal year ended December 31, 2013. Our
Adjusted Core EBIT margin decreased by 0.6 percentage points,
from 8.3% in the fiscal year ended December 31, 2012 to 7.7% in
the fiscal year ended December 31, 2013.
Recent Developments
The Company was incorporated by the Selling Shareholder on
November 2, 2015, and was entered into the Commercial Register
on November 3, 2015 as a stock corporation (Aktiengesellschaft)
under Swiss law with a share capital of CHF 1,000 thousand
(corresponding to €920 thousand converted at an exchange rate
of CHF 1.09 as of November 2, 2015 as shown in the audited
opening statement of financial position of the Company as of
November 2, 2015).
The original share capital of CHF 1,000 thousand was procured by
the Selling Shareholder via cash contribution (corresponding to
€920 thousand converted at the CHF exchange rate as of
November 2, 2015).
18
Concurrently with the determination of the Offer Price (as defined
below in E.3), the Selling Shareholder will contribute all shares in
EDAG Engineering Schweiz Sub-Holding AG to the Company by
way of the Contribution. The contribution value of EDAG
Engineering Schweiz Sub-Holding AG will increase the capital
reserves shown on the unconsolidated balance sheet of the
Company. The contribution value of EDAG Engineering Schweiz
Sub-Holding AG at the time of the Contribution will not be based
on a valuation report prepared by a third party but on the market
value of the Company as determined in the Offering (as defined
below in E.3). This method of determining the contribution value
of EDAG Engineering Schweiz Sub-Holding AG assumes that the
market value of the Company determined in the Offering (i.e. the
Offer Price (as defined below in E.3), multiplied by all 25,000
thousand outstanding shares of the Company) represents the sum
of (i) the net asset value of the Company immediately prior to the
Contribution plus (ii) the value of all of the shares in EDAG
Engineering Schweiz Sub-Holding AG. The contribution value of
EDAG Engineering Schweiz Sub-Holding AG is therefore the
market value of the Company determined in the Offering (as
defined below in E.3) minus the net asset value of the Company
immediately prior to the Contribution. Assuming a placement of
the Offer Shares at the mid-point of the Price Range (as defined
below in E.3), the market value of the Company will be €537,500
thousand (Offer Price (as defined below in E.3) of €21.50,
multiplied by 25,000 thousand shares of EDAG Engineering Group
AG). In order to arrive at the contribution value for EDAG
Engineering Schweiz Sub-Holding AG, this number will be reduced
by the net asset value of the Company prior to the Contribution
(approximately €340 thousand, calculated as the share capital of
the Company amounting to €920 thousand as of November 2, 2015
minus costs related to the incorporation of the Company
amounting to €80 thousand, as shown in the audited opening
statement of financial position of the Company as of November 2,
2015, as well as the expected costs related to the Contribution
amounting to approximately €500 thousand). Assuming a
placement of the Offer Shares (as defined below in E.3) at the midpoint of the Price Range (as defined below in E.3), the contribution
value will therefore be approximately €537,160 thousand. No
other valuation will be conducted for the purposes of determining
the contribution value. The contribution value is subject to change
and has not been audited.
Between the date of its incorporation, November 2, 2015, and the
date of this prospectus, no significant change in the Company’s
financial or trading position has occurred. Between September
30, 2015 and the date of this prospectus, no significant change in
the financial and trading position of EDAG Engineering Schweiz
Sub-Holding AG and its consolidated subsidiaries, for which
as of September 30, 2015 are provided in this prospectus, has
occurred.
As of the date of this prospectus, the Company has not acquired
the shares in EDAG Engineering Schweiz Sub-Holding AG and is
hence not yet the owner of the business described in this
prospectus. The Company will acquire all of the shares in EDAG
Engineering Schweiz Sub-Holding AG by way of the Contribution
which will occur concurrently with the determination of the Offer
Price (as defined below in E.3) for the Offer Shares (as defined
below in E.3) as described above in B.3.
19
B.8
Selected key pro
forma financial
information.
Not applicable. No pro forma financial information has been
prepared by the Company.
B.9
Profit forecast or
estimate.
Not applicable. No profit forecast or estimate is being presented
by the Company.
B.10
Qualifications in
the audit report
on the historical
financial
information.
Not applicable. The auditor’s reports on the historical financial
information included in this prospectus have been issued without
qualification.
B.11
Insufficiency of
the issuer’s
working capital
for its present
requirements.
Not applicable. The Company is of the opinion that the Group is
in a position to meet the payment obligations that become due
within at least the next twelve months.
SECTION C – SECURITIES
C.1
Type and class of
the securities
being offered and/
or admitted to
trading.
Bearer shares (Inhaberaktien) with a nominal value of CHF 0.04
each and each such share with full dividend rights for the fiscal
year ending December 31, 2015 and for all subsequent fiscal
years.
Security
identification
number.
German Securities Code (Wertpapier-Kenn-Nummer, WKN):
A143NB
Trading Symbol: ED4
C.2
Currency.
Our shares are denominated in Swiss Franc. Our accounting
currency is the Euro and our shares will be traded in Euro.
C.3
The number of
shares issued and
fully paid.
As of November 2, 2015, the date of incorporation of the
Company, the share capital of the Company amounted to
CHF 1,000 thousand (corresponding to €920 thousand converted
at an exchange rate of CHF 1.09 as of November 2, 2015 as shown
in the audited opening statement of financial position of the
Company as of November 2, 2015) and divided into
25,000 thousand bearer shares (Inhaberaktien) with a nominal
value of CHF 0.04 each. The share capital has been fully paid up.
As of the date of this prospectus, the share capital of the
Company is the same as of November 2, 2015.
The Company’s shares will be represented by a global share
certificate, which will be deposited with Clearstream Banking
Aktiengesellschaft, Mergenthalerallee 61, 65760 Eschborn,
Germany whereupon the Company’s shares will become
intermediated securities (Bucheffekten) within the meaning of
the Swiss Federal Intermediated Securities Act of October 3, 2008
(Bucheffektengesetz).
The par value per
share.
Each Company’s share has a nominal value of CHF 0.04.
20
C.4
A description of
the rights
attached to the
securities.
Each Company’s share carries one vote at the Company’s
shareholders’ meeting. There are no restrictions on voting rights.
The Company’s shares carry full dividend rights for the fiscal year
ending December 31, 2015 and all subsequent fiscal years.
C.5
A description of
any restrictions on
the free
transferability of
the securities.
Not applicable. The Company’s shares as offered and to be
transferred to investors are freely transferable in accordance with
the legal requirements for bearer shares.
C.6
Application for
admission to
trading on a
regulated market
and identity of
regulated markets
where the
securities are to be
traded.
The Company will apply for admission of the Company’s shares to
trading on the regulated market segment (regulierter Markt) of
the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and,
simultaneously, to the sub-segment thereof with additional
post-admission obligations (Prime Standard) on or about
November 23, 2015. The listing approval for the Company’s
shares is expected to be granted on December 1, 2015. Trading in
the Company’s shares on the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) is planned to commence on
December 2, 2015.
C.7
Dividend policy.
Depending on the results of operations of EDAG, the Company
intends to pay dividends in the future targeting a pay-out ratio
of about 50% (defined as the percentage of the consolidated
profits of the respective period).
Any future proposal by the Board of Directors to pay dividends
will be made in accordance with applicable laws, and will depend
upon, among other factors, the Company’s results of operations,
financial condition, contractual restrictions and capital
requirements and is subject to the shareholders’ approval. The
Company’s future ability to pay dividends may be limited by the
terms of any existing and future debt. The Company may pay
dividends in the form of a distribution against capital reserves if
the Company has sufficient distributable profit from previous
years (Bilanzgewinn) or sufficient free reserves. The Board of
Directors, subject to the authority of the shareholders’ meeting
to resolve otherwise, reserves the right to change the dividend
policy and dividend payout ratio at any time, especially, if
unexpected events occur that would change its view as to the
prudent level of cash and capital retention as well as the
Company’s financial goals and strategy. Dividends and other
distributions paid on the shares (subject to certain conditions,
except for distributions against capital reserves or from
reductions of the Company’s nominal share capital) are subject to
Swiss Withholding Tax.
SECTION D – RISKS
D.1
Key risks specific
to the issuer and
its industry.
An investment in the Company’s shares is subject to a number of
risks. Prospective investors should read the entire document and
carefully consider the following risks together with all the other
information contained in this prospectus prior to making any
investment decision regarding the Company’s shares. The
following risks, alone or together with additional risks and
uncertainties not currently known to us, or that we might
21
currently deem immaterial, could materially adversely affect our
business, financial condition and results of operations. The market
price of the Company’s shares could fall if any or all of these risks
were to materialize, in which case prospective investors could lose
all or part of their investment.
The order in which the following risks are presented is not an
indication of the likelihood of these risks actually materializing, or
their likely significance or degree, or the scope of any potential
harm to our business, financial condition, or results of operations
that might result.
Key Risks Related to Our Business
Š
Adverse developments in the economic environment could lead
to cost cutting measures by our customers and reduce their
R&D budget and the volume of vehicle engineering services
outsourced to external service providers like us, which in turn
could have an adverse impact on our business, financial
condition and results of operations.
Š
Sales in the automotive industry are cyclical and depend, inter
alia, on general economic conditions as well as on consumer
spending and consumer preferences. As a consequence,
demand for our vehicle engineering services might also vary
and periodic downturns in the automotive industry could
adversely affect our results of operations.
Š
A substantial portion of our revenues is generated from a
limited number of customers, with our five largest customers
sales divisions contributing approximately two thirds of our
total sales revenues in the fiscal year ended December 31, 2014.
In the same period, more than half of our total sales revenues
were contributed by the Volkswagen and BMW groups, with
the Volkswagen group generating approximately 38% of our
sales revenues. The loss of, or a significant reduction in sales to,
key customers could significantly adversely affect our results.
Š
Our business and its profitability depends on the budget
automotive manufacturers allocate to R&D activities and their
outsourcing volumes of vehicle engineering services. A
reduction in the outsourcing of engineering activities or the
insourcing of activities by our customers could have a material
adverse effect on our profitability.
Š
If our vehicle engineering services capacities exceed the actual
demand for our services, in particular if contracts are delayed
or canceled, we risk underutilization of our personnel
capacities and engineering facilities as well as lower prices for
the vehicle engineering services we offer, which could
adversely affect our results of operations.
Š
We might be adversely affected by cost overruns in complex
projects, if we underestimate the required personnel, time and
other resources, or additional payment obligations in long-term
contracts and turnkey projects, if we do not meet deadlines,
quality specifications or other agreed parameters.
22
Š
We are exposed to risks associated with market trends and
developments that could affect the vehicle mix sold by
automotive manufacturers and automotive OEMs. Should we
not be able to develop appropriate strategies as a response to
new market trends and technical developments, our business,
financial condition and results of operations could be adversely
affected.
Š
The market for vehicle engineering services for the automotive
industry is characterized by intense competition, which could
reduce the sales volume of our services and products or put
continued pressure on our sales prices.
Š
Our capability to increase sales revenues and profitability is
directly correlated to the number of engineers we employ. If
we fail to attract a sufficient number of well-qualified
engineers or if we fail to retain such personnel, our market
position, business, financial condition and results of operations
might be significantly adversely affected.
Š
Malfunctioning of products manufactured and production lines
built according to our development and vehicle engineering
services may result in third party claims against our customers,
product recalls and production downtime for our customers. This
may result in warranty claims against us, which, in turn, could have
a material adverse effect on our business, financial condition and
results of operations.
Š
We may be unable to successfully integrate or achieve the
expected benefits from past or future acquisitions or joint
ventures. In addition, we face the risk of potential guarantee or
liability claims resulting from the disposal of former business
units or joint ventures. The realization of these risks could have a
material adverse effect on our business, financial condition and
Š
We have substantial pension obligations and an increase in the
net present value of our pension obligations, additional
provisioning requirements or a decrease of the value of fund
assets covering our pension commitments might adversely
affect our financial position.
Š
Our consolidated statement of financial position includes
significant intangible assets, which could become impaired and
thereby have a material adverse effect on our business,
financial condition and results of operations.
Š
We are subject to various risks arising from evolving legislation
designed to combat abuses of employee leasing arrangements
and from of false self-employment. These risks include
additional payment obligations, fines and the requirement to
change the basis of our business model, which could have a
material adverse effect on our business, financial condition and
Š
We are subject to court proceedings filed against us following
the squeeze-out of minority shareholders of Rücker AG. If we
are required to make additional compensation payments to
minority shareholders, this could have a material adverse effect
on our business, financial condition and results of operations.
23
D.3
Key risks specific
to the securities.
Key Risks Related to Our Shares and the Offering
Š
Following the offering, our Selling Shareholder will continue to
exercise significant influence on the Company and thereby
have, inter alia, a substantial influence on matters submitted to
a vote of the Company’s shareholders meeting and change of
control matters, and its interest may conflict with those of our
other shareholders.
Š
If any person should acquire control of the Company in the
future, our shareholders may not realize any change-of-control
premium on their shares, as neither German nor Swiss rules
regarding mandatory takeover offers are applicable to us.
Š
Our ability to pay dividends depends, inter alia, on our
Š
Our shares have not previously been publicly traded, and there
is no guarantee that an active and liquid market for our shares
will develop and therefore investors may not be in a position to
sell their shares in the Company quickly or at or above the
Offer Price.
Š
Our share price could fluctuate significantly in response to
numerous factors, including, but not limited to, fluctuations in
actual or projected results of operations and changes in
projected earnings, and if our share price declines, investors
could lose all or part of their investment.
Š
If our Selling Shareholder or other shareholders of the
Company effect a sale of a substantial number of our shares in
the stock market, the market price of our shares could decline.
SECTION E – OFFER
E.1
The total net
proceeds.
The Company will not receive any proceeds of the Offering (as
defined below in E.3) resulting from the sale of the Offer Shares
(as defined below in E.3). The Selling Shareholder will receive all
the net proceeds from the sale of the Base Shares and from a sale
of the Over-Allotment Shares (both as defined below in E.3), if
and to the extent the Greenshoe Option (as defined below in E.3)
in relation to the Over-Allotment Shares is exercised.
Assuming a placement of (i) all of the Base Shares
(8,750,000 shares) (as defined below in E.3) and (ii) all of the
Over-Allotment Shares at the mid-point of the Price Range (as
defined below in E.3) set for the offering of the Offer Shares (as
defined below in E.3) as well as (iii) full exercise of the Greenshoe
Option (as defined below in E.3) in relation to the OverAllotment Shares (as defined below in E.3), the Company
estimates that the aggregate net proceeds to the Selling
Shareholder would amount to approximately €202.06 million
under the above assumptions.
Estimate of the
total expenses of
the offering and
listing, including
estimated
expenses charged
to the investor by
the issuer.
The expenses related to the offering of the Offer Shares (as
defined below in E.3) and listing of the Company’s entire share
capital are expected to total approximately €10.83 million
(excluding underwriting and placement commissions payable to
the Underwriters), of which approximately €3.58 will be borne by
the Company and approximately €7.25 million will be borne by
the Selling Shareholder.
Assuming (i) an Offer Price (as defined below in E.3) at the
mid-point of the Price Range (as defined below in E.3), (ii) that
the maximum number of Base Shares and Over-allotment Shares
24
(as defined below in E.3) is placed, (iii) the full exercise of the
Greenshoe Option in relation to the Over-Allotment Shares (as
defined below in E.3), and (iv) payment in full of the
discretionary fee of up to approximately €1.62 million, the
commissions payable to the Underwriters will amount to
approximately €7.03 million. Such commissions will be borne by
Under the same assumptions, the total expenses of the offering
and listing (including underwriting and placement commissions
payable to the Underwriters) are expected to amount to
approximately €17.86 million, of which approximately
€3.58 million will be borne by the Company and approximately
€14.28 million will be borne by the Selling Shareholder.
Investors will not be charged expenses by the Company or the
Underwriters in connection with their role as underwriters.
Investors may, however, have to bear customary transaction and
handling fees charged by their account-keeping financial
institution.
The Swiss Federal Securities Transfer Stamp Duty (Umsatzabgabe)
on the sale of the Base Shares and the Over-Allotment Shares, if
any, will not be compensated by the Selling Shareholder.
E.2a
Reasons for the
offering.
The Company intends to have the Company’s shares admitted to
trading on the regulated market segment (regulierter Markt) of
the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and,
simultaneously, on the sub-segment thereof with additional
post-admission obligations (Prime Standard) to achieve better
access to the capital markets.
The Selling Shareholder will offer the shares to partially divest its
shareholding in the Company.
E.3
Use of proceeds,
estimated net
amount of the
proceeds.
The Company will not receive any proceeds of this Offering (as
defined below in E.3).
Offer conditions.
The offering relates to the sale of 10,062,500 bearer shares of the
Company (Inhaberaktien) with a nominal value of CHF 0.04 each
and with full dividend rights for the fiscal year ending
December 31, 2015 and all subsequent fiscal years (the
“Offering”), consisting of:
Š
8,750,000 bearer shares (Inhaberaktien) with a nominal value
of CHF 0.04 each (the “Base Shares“) from the holdings of the
Selling Shareholder; and
Š
1,312,500 bearer shares (Inhaberaktien) with a nominal value
of CHF 0.04 each from the holdings of the Selling Shareholder
in connection with a potential over-allotment (the
“Over-Allotment Shares” and, together with the Base Shares,
the “Offer Shares”).
The Offering consists of an initial public offering in the Federal
Republic of Germany (“Germany”) and the Grand Duchy of
Luxembourg (“Luxembourg”) and private placements in certain
jurisdictions outside Germany and Luxembourg. In the United
States of America (the “United States”), the Company’s shares
will be offered and sold only to qualified institutional buyers as
defined in Rule 144A under the United States Securities Act of
1933, as amended (the “Securities Act”). Outside the United
States, the Company’s shares will be offered and sold only in
offshore transactions in reliance on Regulation S under the
Securities Act.
25
Offer Period.
The period during which investors may submit purchase orders
for the Offer Shares is expected to begin on November 23, 2015
and is expected to end on December 1, 2015 (the “Offer Period”).
On the last day of the Offer Period, offers to purchase may be
submitted (i) until 12:00 noon (Central European Time) (“CET”) by
private investors and (ii) until 15:00 (CET) by institutional
investors.
Price range and
Offer Price.
The price range within which purchase orders may be placed is
€19.00 to €24.00 per Offer Share (“Price Range”).
The placement price (the “Offer Price”) and the final number of
Offer Shares to be placed in the Offering have not yet been fixed
as of the date of this prospectus and will be set jointly by the
Company, the Selling Shareholder and the Underwriters on
December 1, 2015 on the basis of the purchase orders submitted
by investors that have been collated in the order book prepared
during a bookbuilding process. The Offer Price and the final
number of Offer Shares placed in the Offering (i.e., the results of
the Offering) are expected to be published on December 1, 2015
by means of an ad-hoc release through an electronic information
dissemination system and on the Company’s website. Particularly
if the placement volume proves insufficient to satisfy all orders
placed at the Offer Price, the Underwriters reserve the right to
reject orders, or to accept them in part only.
Amendments to
the Term of the
Offering.
The Company and the Selling Shareholder reserve the right,
together with the Joint Global Coordinators, to increase or
decrease the total number of Offer Shares, to increase or
decrease the upper limit and/or the lower limit of the Price Range
and/or to extend or shorten the Offer Period. Changes in relation
to the number of Offer Shares, changes to the Price Range or the
extension or shortening of the Offer Period will not invalidate
any offers to purchase that have already been submitted. If such
change requires the publication of a supplement to this
prospectus, investors who submitted purchase orders before the
supplement is published shall have the right, under the German
Securities Prospectus Act (Wertpapierprospektgesetz), to
withdraw these offers to purchase within two business days of
the publication of the supplement. Instead of withdrawing the
offers to purchase placed prior to the publication of the
supplement, investors may change their orders or place new
limited or unlimited offers to purchase within two business days
of the publication of the supplement. To the extent that the
terms of the Offering are changed, such change will be published
by means of electronic media (such as Reuters or Bloomberg) and,
if required by the German Securities Trading Act
(Wertpapierhandelsgesetz) or the German Securities Prospectus
Act (Wertpapierprospektgesetz), as an ad-hoc release via an
electronic information system, on the Company’s website and as a
supplement to this prospectus. Investors who have submitted
offers to purchase will not be notified individually. Under certain
conditions, the Underwriters may terminate the underwriting
agreement regarding the offer and sale of the Offer Shares in
connection with the Offering expected to be entered into with
the Company and the Selling Shareholders on or about
November 20, 2015 (the “Underwriting Agreement”), even after
commencement of trading (Aufnahme des Handels) of the
26
Company’s shares on the regulated market segment (regulierter
Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse).
Preferential
Allocation.
All employees of EDAG Engineering GmbH and its subsidiaries as
well as the members of the group executive management and
Board of Directors of the Company, employed and tax resident in
Germany, will be offered an aggregate amount of up to 4.99% of
the Offer Shares at the Offer Price in connection with the
Offering on a preferential basis.
Delivery and
Payment.
The delivery of the Offer Shares against payment of the Offer
Price and customary security commissions is expected to take
place on December 4, 2015. The Offer Shares will be made
available to the shareholders as book entry securities
(Bucheffekten) pursuant to Swiss law.
Stabilization
Measures,
Over-Allotment
and Greenshoe
Option.
In connection with the placement of the Offer Shares, Deutsche
Bank, acting for the account of the Underwriters, will act as the
stabilization manager (the “Stabilization Manager”) and may, as
Stabilization Manager acting in accordance with legal
requirements (Section 20a para. 3 of the German Securities
Trading Act (Wertpapierhandelsgesetz) in conjunction with
Commission Regulation (EC) No. 2273/2003 of December 22,
2003), make over-allotments and take stabilization measures to
support the market price of the Company’s shares and thereby
counteract any selling pressure.
The Stabilization Manager is under no obligation to take any
stabilization measures. Therefore, no assurance can be provided
that any stabilization measures will be taken. Where stabilization
measures are taken, these may be terminated at any time
without notice. Such measures may be taken from the date the
Company’s shares are listed on the regulated market on the
Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and
must be terminated no later than the thirtieth calendar day after
such date (the “Stabilization Period”).
These measures may result in the market price of the Company’s
shares being higher than would otherwise have been the case.
Moreover, the market price may temporarily be at an
unsustainable level.
Under the potential stabilization measures, investors may, in
addition to the Base Shares, be allocated up to 1,312,500
additional shares in the Company (“Over-Allotment Shares”) as
part of the allocation of the shares to be placed (the “OverAllotment”). For the purpose of a potential Over-Allotment, the
Stabilization Manager, for the account of the Underwriters, will
be provided with up to 1,312,500 shares from the holdings of the
Selling Shareholder in the form of a securities loan; the number
of Over-Allotment Shares will not exceed 15% of the number of
Base Shares. In connection with the securites loan, the Selling
Shareholder will grant the Underwriters an option to acquire a
number of the Company’s shares equal to the number of OverAllotment Shares at the Offer Price less agreed commissions (the
“Greenshoe Option”) in lieu of returning the shares provided
under the securities loan. The Greenshoe Option will terminate
on January 1, 2016.
27
The Stabilization Manager is entitled to exercise the Greenshoe
Option up to the extent Over-Allotments were initially made. The
number of shares for which the Greenshoe Option can be
exercised will be reduced by the number of shares held by the
Stabilization Manager as of the date on which the Greenshoe
Option is exercised and that were acquired by the Stabilization
Manager in the context of stabilization measures.
Once the Stabilization Period has ended, an announcement will
be made within one week in various media outlets distributed
across the entire EEA as to whether stabilization measures were
taken, when price stabilization started and finished, and the Price
Range within which the stabilization measures were taken; the
latter will be made known for each occasion on which price
stabilization measures were taken. Exercise of the Greenshoe
Option, the timing of its exercise and the number and type of
Company’s shares concerned will also be announced promptly in
the same manner.
E.4
Interests material
to the issue/offer
including
conflicting
interests.
There are no conflicting interests material to the Offering.
In connection with the Offering and the admission to trading of
the Company’s shares, the Underwriters have a contractual
relationship with the Company and the Selling Shareholder.
The Underwriters act for the Company and the Selling
Shareholder on the Offering and coordinate the structuring and
execution of the Offering. In addition, the Joint Global
Coordinators have been appointed to act as designated sponsors
for the Company’s shares and Deutsche Bank has been appointed
to act as paying agent. Upon successful implementation of the
Offering, the Underwriters will receive a commission. As a result
of these contractual relationships, the Underwriters have a
financial interest in the success of the Offering.
Furthermore, in connection with the Offering, each of the
Underwriters and any of their respective affiliates, acting as an
investor for their own account, may acquire shares in the
Offering and in that capacity may retain, purchase or sell for its
own account such shares or related investments and may offer or
sell such shares or other investments otherwise than in
connection with the Offering. In addition, certain of the
Underwriters or their affiliates may enter into financing
arrangements (including swaps or contracts for differences) with
investors in connection with which such Underwriters (or their
affiliates) may from time to time acquire, hold or dispose of
shares in the Company. None of the Underwriters intends to
disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory
obligation to do so or as disclosed in this prospectus.
Some of the Underwriters or their affiliates have, and may from
time to time in the future continue to have, business relations
with our Group (including lending activities) or may perform
services for our Group in the ordinary course of business.
In addition, HORUS Vermögensverwaltungs GbR, a company
controlled by Dr. Lutz Mario Helmig, has indicated that it might
place an order to acquire up to 10% of the Offer Shares in the
Offering, subject to allocation on a non-preferential basis. As of
28
the date of this prospectus, no decision has been made by HORUS
Vermögensverwaltungs GbR whether to place an order to acquire
any shares in the Offering and there can be no assurances that
HORUS Vermögensverwaltungs GbR will in fact do so. In case
HORUS Vermögensverwaltungs GbR acquires Offer Shares in the
Offering, it will be subject to the same lock-up restrictions as the
Selling Shareholder (see E.5 “Lock-up agreement: the parties
involved; and indication of the period of the lock-up”).
According to the service contracts of the members of the
management board of EDAG Engineering GmbH, each member
of the management board of EDAG Engineering GmbH will
receive a special bonus in the amount of €500 thousand, either in
cash or in shares or share options, in case the EDAG Group goes
public by December 31, 2016. As a result of these contractual
provisions, the members of the management board of EDAG
Engineering GmbH have a financial interest in the success of the
Offering.
Dr. Philippe Weber is a member of the board of directors of the
Company and managing partner of the law firm Niederer Kraft &
Frey AG, Zurich, which acts as Swiss legal counsel for the
Company in connection with the Offering.
The Selling Shareholder, whose CEO Thomas Eichelmann is at the
same time the chairman of our Board of Directors, will receive
the proceeds of the Base Shares sold in the Offering as well as the
potential sale of Over-Allotment Shares to the extent that the
Greenshoe Option is exercised. Assuming full placement of all
Base Shares and Over-Allotment Shares at the mid-point of the
Price Range and exercise of the Greenshoe Option in full, and
after deducting fees and expenses to be paid by the Selling
Shareholder in connection with the Offering and listing, the net
proceeds to the Selling Shareholder from the Offering would
amount to approximately €202.06 million and thus the Selling
Shareholder and its direct and indirect shareholders have an
interest in the consummation of the Offering.
E.5
Name of the
person or entity
offering to sell the
security.
The Company’s shares are being offered for sale by the
Underwriters.
Lock-up
agreement: the
parties involved;
and indication of
the period of the
lock-up.
In the Underwriting Agreement, the Company will agree with
each Underwriter that the Company and its Board of Directors,
without the prior written consent of the Joint Global
Coordinators for a period beginning on the date of this
prospectus and ending 180 days after settlement, will not:
a)
announce or effect an increase of the share capital of the
Company out of authorized capital, if any; or
b)
submit a proposal for a capital increase to any meeting of
the shareholders for resolution; or
c)
offer, pledge, allot, issue (unless required by applicable law),
sell, contract to sell, sell any option or contract to purchase,
purchase any option to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares in its capital or any securities
convertible into or exercisable or exchangeable for shares in
its capital or enter into any swap or other arrangement that
29
transfers to another, in whole or in part, the economic risk of
ownership of shares in its capital; or
d)
enter into a transaction or perform any action economically
similar to those described in (a) through (c) above.
By way of a separate lock-up agreement, the Selling Shareholder
has undertaken, without the prior written consent of the Joint
Global Coordinators for a period beginning on the date of this
prospectus and ending 180 days after settlement, not to:
a)
offer, pledge, allot, sell, contract to sell, sell any option or
contract to purchase, purchase any option to sell, grant any
option, right or warrant to purchase, or otherwise or dispose
of, directly or indirectly any shares of the Company held by it
or its affiliates (such shares held by the Selling Shareholder
or its affiliates being the “Lock-up Shares”);
b)
enter into any swap or other arrangement that transfers to
another, in whole or in part, the economic risk of ownership
of Lock-up Shares, whether any such transaction described
in (a) above or this (b) is to be settled by delivery of Lock-up
Shares or such other securities, in cash or otherwise;
c)
make any demand for, or exercise any right with respect to,
the registration under U.S. securities laws of any shares of
the Company or any security convertible into or exercisable
or exchangeable for shares of the Company;
d)
propose any increase in the share capital of the Company
(including by requesting the board of directors to convene a
general shareholders’ meeting or otherwise), vote in favor of
any proposed increase of the share capital or otherwise
make, support or vote in favor of any proposal for the
issuance of any securities convertible into shares of the
Company, with option rights for shares of the Company; or
e)
enter into a transaction or perform any action economically
similar to those described in (a) through (d) above.
The foregoing lock-up restrictions for the Selling Shareholder do
not apply to any action taken by the Selling Shareholder for the
purposes of the Offering. (a), (b) and (e) shall not restrict (i) the
off-exchange (außerbörsliche) transfer of Company’s shares by
the Selling Shareholder to any of its affiliates, or (ii) the
distribution of Company’s shares by the Selling Shareholder to its
shareholder(s), through dividend in kind, provided that in each
case the recipient of such transfer assumes, by written
confirmation to the Joint Global Coordinators, the obligations of
the Selling Shareholder for the then remaining term.
controlled by Dr. Lutz Mario Helmig, will acquire any Offer Shares
in connection with the Offering on a non-preferential basis (see
above under E.4), HORUS Vermögensverwaltungs GbR will enter
into a lock-up agreement with the Underwriters substantially
identical with the agreement entered into by the Selling
Shareholder and the Underwriters as described above.
In the Underwriting Agreement, the Selling Shareholder will agree
with the Underwriters that it will not, for a period of three years
from the settlement of the Offering, directly or indirectly and
taking into consideration a transfer of shares by HORUS
Vermögensverwaltungs GbR or any other company controlled by
30
Dr. Lutz Mario Helmig, enter into an agreement with a third party
to sell a position in the Company which, the Selling Shareholder
knows, will result in a controlling interest of the purchaser, unless
such purchaser contractually commits to extend a tender offer to
the other shareholders of the Company offering a purchase price
per share which is at least equal to the price contractually agreed
between the Selling Shareholder and the purchaser. The Selling
Shareholder’s covenant is only valid to the extent that the
purchaser would be under an obligation (and no exemption would
be available from the duty) to extend a mandatory tender offer to
the other shareholders of the Company if German takeover laws
were applicable in case of such a transaction and only for as long
as neither Swiss nor the German takeover laws apply. Subject to
certain conditions, transfers to or amongst affiliates of the Selling
Shareholder are exempt. The Selling Shareholder’s undertaking
does not give rise to any rights of third parties and the Selling
Shareholder is not obliged to ensure that the purchaser actually
adheres to its contractual obligation to extend an offer to other
shareholders of the Company.
controlled by Dr. Lutz Mario Helmig, will acquire any Offer Shares in
connection with the Offering on a non-preferential basis (see above
under E.4), HORUS Vermögensverwaltungs GbR will enter into an
agreement with the Underwriters in order to make a covenant to
the Underwriters with regard to the sale of shares in the Company
which would result – taking into consideration any transfer of shares
by the Selling Shareholder – in a controlling interest of the
purchaser substantially identical with the covenant made by the
Selling Shareholder to the Underwriters as described above.
E.6
Amount and
percentage of
immediate
dilution resulting
from the offering.
For the calculation of the net asset value attributable to the
shareholders of the Company we use the consolidated net asset
value of EDAG Engineering Schweiz Sub-Holding AG as of
September 30, 2015. This value is defined as total assets less total
non-current liabilities and provisions and total current liabilities
and provisions of EDAG Engineering Schweiz Sub-Holding AG as
shown in its unaudited condensed consolidated balance sheet
included in its unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended
September 30, 2015, which amounted to €146.51 million as of
September 30, 2015.
After subtracting the maximum estimated costs of the Offering
and listing to be borne by the Company in the amount of €3.58
million, the net asset value of the Company would have been
€142.93 million as of September 30, 2015, or €5.72 per Company’s
share (based on 25,000 thousand shares). Based on an Offer Price
at the mid-point of the Price Range, that would correspond to a
direct dilution of €15.78, corresponding to 73.4%, per Company’s
share (based on 25,000 thousand shares) for the parties acquiring
the Offer Shares following the completion of the Offering.
E.7
Estimated
expenses charged
to the investor by
the issuer.
Not applicable. Investors will not be charged expenses by the
Company or the Underwriters in connection with their role as
underwriters.
31
ZUSAMMENFASSUNG DES PROSPEKTS
Zusammenfassungen bestehen aus geforderten Angaben, die als Punkte (“Punkte”) bezeichnet
sind. Die Punkte sind in den Abschnitten A – E (A.1 – E.7) fortlaufend nummeriert. Diese
Zusammenfassung enthält alle Punkte, die für die vorliegende Art der Wertpapiere und des
Emittenten in eine Zusammenfassung aufzunehmen sind. Da einige Punkte nicht behandelt
werden müssen, können in der Nummerierungsreihenfolge Lücken auftreten. Selbst wenn ein
Punkt wegen der Art der Wertpapiere und des Emittenten in die Zusammenfassung
aufgenommen werden muss, ist es möglich, dass in Bezug auf diesen Punkt keine relevanten
Informationen gegeben werden können. In diesem Fall enthält die Zusammenfassung eine
kurze Beschreibung des Punkts mit dem Hinweis “Entfällt”.
ABSCHNITT A – EINLEITUNG UND WARNHINWEISE
A.1
Warnhinweise.
Diese Zusammenfassung sollte als Einleitung zu diesem Prospekt
verstanden werden.
Bei jeder Entscheidung zur Anlage in die vorliegenden
Wertpapiere sollte sich der Anleger auf die Prüfung des gesamten
Prospekts stützen.
Für den Fall, dass vor einem Gericht Ansprüche auf Grund der in
diesem Prospekt enthaltenen Informationen geltend gemacht
werden, könnte der als Kläger auftretende Anleger in
Anwendung der einzelstaatlichen Rechtsvorschriften der Staaten
des Europäischen Wirtschaftsraums (“EWR”) die Kosten für die
Übersetzung des Prospekts vor Prozessbeginn zu tragen haben.
Diejenigen Personen, die die Verantwortung für die
Zusammenfassung einschließlich etwaiger Übersetzungen hiervon
übernommen haben oder von denen der Erlass ausgeht, können
haftbar gemacht werden, jedoch nur für den Fall, dass die
Zusammenfassung irreführend, unrichtig oder widersprüchlich ist,
wenn sie zusammen mit den anderen Teilen dieses Prospekts
gelesen wird, oder sie, wenn sie zusammen mit den anderen
Teilen dieses Prospekts gelesen wird, nicht alle erforderlichen
Schlüsselinformationen vermittelt.
Die EDAG Engineering Group AG, Arbon, Schweiz (die
“Gesellschaft”), Morgan Stanley & Co. International plc (“Morgan
Stanley”) und Deutsche Bank Aktiengesellschaft (“Deutsche Bank”
und, zusammen mit Morgan Stanley, die “Joint Global
Coordinators” und “Joint Bookrunners”) COMMERZBANK
Aktiengesellschaft (“COMMERZBANK”) und M.M. Warburg & CO
(AG & Co.) KGaA (“M.M. Warburg & CO” und, zusammen mit
COMMERZBANK die “Co-Lead Managers”) und zusammen mit den
Joint Global Coordinators, die “Konsortialbanken”) haben nach § 5
Abs. 2b Nr. 4 Wertpapierprospektgesetz die Verantwortung für den
Inhalt dieser Zusammenfassung und ihrer Übersetzung ins Deutsche
übernommen.
A.2
Entfällt. Eine Zustimmung zur Verwendung des Prospekts für eine
Verwendung des
spätere Weiterveräußerung oder endgültige Platzierung der
Prospekts durch
Finanzintermediäre. Aktien der Gesellschaft durch Finanzintermediäre wurde nicht
erteilt.
32
ABSCHNITT B – EMITTENT
B.1
Juristische und
kommerzielle
Bezeichnung.
Die juristische Bezeichnung der Gesellschaft lautet EDAG
Engineering Group AG. Die Gruppe (wie in B.3 definiert) operiert
vorrangig unter ihrer kommerziellen Bezeichnung “EDAG”.
B.2
Sitz und
Rechtsform des
Emittenten,
geltendes Recht,
Land der
Gründung.
Die Gesellschaft hat ihren eingetragenen Sitz in Arbon und ihre
Geschäftsanschrift lautet Schlossgasse 2, 9320 Arbon, Schweiz. Sie
ist im Handelsregister des Kantons Thurgau (das
“Handelsregister”) unter der Nummer CHE-294.533.486
eingetragen. Die Gesellschaft ist eine Aktiengesellschaft, die in
der Schweiz gegründet wurde und Schweizerischem Recht
unterliegt.
B.3
Derzeitige
Geschäfts- und
Haupttätigkeiten
des Emittenten
sowie die
Hauptmärkte, auf
denen der
Emittent vertreten
ist.
Die Gesellschaft wurde von ihrem alleinigen Gesellschafter, der
ATON GmbH, München, Deutschland (der “Abgebende Aktionär”),
am 2. November 2015 durch Einbringung einer Barkapitaleinlage in
Höhe von insgesamt CHF 1.000 Tausend gegen Ausgabe von 25.000
Tausend Inhaberaktien mit einem Nennbetrag von je CHF 0,04
gegründet. Seit ihrer Gründung hat die Gesellschaft keine
Geschäftstätigkeit aufgenommen, keine Aktivposten erworben und
ist keine Verbindlichkeiten eingegangen, mit Ausnahme solcher,
die in direktem Zusammenhang mit ihrer Gründung und dem
Angebot (wie in E.3 definiert) stehen. Gleichzeitig mit der
Festlegung des Angebotspreises (wie in E.3 definiert) wird der
Abgebende Aktionär sämtliche Aktien der EDAG Engineering
Schweiz Sub-Holding AG im Wege der Sacheinlage in die
Kapitalrücklage der Gesellschaft einbringen, wobei keine Ausgabe
neuer Aktien erfolgt und auch keine andere Gegenleistung durch
die Gesellschaft erbracht wird (die „Einbringung“). Die EDAG
Engineering Schweiz Sub-Holding AG wurde am 14.
September 2015 gegründet und hält indirekt über die EDAG
Engineering Holding GmbH, eine deutsche
Zwischenholdinggesellschaft, alle Anteile an der EDAG Engineering
GmbH. Die EDAG Engineering GmbH führt die in diesem Prospekt
beschriebene Geschäftstätigkeit direkt oder indirekt über ihre
Tochtergesellschaften aus. Durch die Einbringung wird die
Gesellschaft somit diese Geschäftstätigkeit übernehmen. Zum
Zeitpunkt des Prospekts ist die Gesellschaft daher nicht
Eigentümerin des Geschäfts und wird dieses Geschäft erst
gleichzeitig mit der Festlegung des Angebotspreises (wie in E.3
definiert) erwerben. Es werden keine Aktien der Gesellschaft
verkauft oder gemäß dem Angebot an Investoren geliefert
werden, wenn nicht die Einbringung erfolgt ist. Als Folge wird die
Gruppe (wie unten definiert) in diesem Prospekt, wenn nicht
anders angegeben, so dargestellt, als wäre die Einbringung bereits
erfolgt.
Bezugnahmen auf “die Gesellschaft und ihre
Tochterunternehmen”, „wir“, „uns“, „unser(e)“, „unsere
Gruppe“, „die Gruppe“ oder „EDAG“ beziehen sich folglich auf
die Gesellschaft zusammen mit der EDAG Engineering Schweiz
Sub-Holding AG und ihren konsolidierten Tochtergesellschaften
wie sie zum Zeitpunkt der Durchführung der Einbringung
bestehen wird. Die Einbringung wird gleichzeitig mit der
Festlegung des Angebotspreises (wie in E.3 definiert) und vor der
Lieferung von Angebotsaktien (wie in E.3 definiert) an die
Investoren, die sich an diesem Angebot (wie in E.3 definiert)
beteiligen, stattfinden. Wo wir in diesem Prospekt historische
Finanz- und Geschäftsinformationen für die zum 31. Dezember
2014, 2013 und 2012 endenden Geschäftsjahre sowie für den zum
30. September 2015 endenden Neunmonatszeitraum angeben,
bezieht sich „wir“, „uns“, „unser(e)“, „unsere Gruppe“, „die
33
Gruppe“ oder „EDAG“ entsprechend auf (a) die EDAG
Engineering Schweiz Sub-Holding AG und ihre konsolidierten
Tochtergesellschaften hinsichtlich der konsolidierten
Finanzinformationen für den zum 30. September 2015 endenden
Neunmonatszeitraum oder (b) die EDAG Engineering GmbH und
ihre konsolidierten Tochtergesellschaften hinsichtlich der
konsolidierten/kombinierten Finanzinformationen für die zum
31. Dezember 2014, 2013 und 2012 endenden Geschäftsjahre
sowie den zum 30. September 2014 endenden
Neunmonatszeitraum.
Wir sind gemessen an Umsatzerlösen und Mitarbeiterzahl einer
der weltweit größten unabhängigen Ingenieursdienstleister in der
Automobilindustrie (Quelle: A.T. Kearney GmbH Market
assessment Engineering Service Provider Automotive 2020, July
2015 (“A.T. Kearney Report”)). Unabhängigkeit bedeutet in
diesem Zusammenhang, dass kein Original Equipment
Manufacturer (“OEM”) oder Zulieferer eine Mehrheit oder eine
signifikante Minderheit an Anteilen an einem ESP hält. Wir sind
auf die Entwicklung von Automobilkomponenten und -modulen,
abgeleiteten Fahrzeugmodellen (“Derivaten”) und, in
Einzelfällen, kompletten Fahrzeugen sowie Produktionsanlagen
spezialisiert. Wir verfügen über langjährige enge Beziehungen zu
allen großen deutschen OEMs in der Personenkraftwagen- und
Nutzfahrzeugindustrie mit besonderem Schwerpunkt auf
deutschen Premium-OEMs.
Darüber hinaus haben wir weitere renommierte Automobil-OEMs
als Kunden in Märkten außerhalb Deutschlands, insbesondere in
Europa, gewonnen. In Ergänzung unseres Portfolios sind wir auch
für Systemlieferanten in der Automobilindustrie tätig. Um die
Ansprüche unserer Kunden zu erfüllen, folgen wir deren
internationaler Ausrichtung und bieten unsere Leistungen
weltweit an.
Durch unser globales Netzwerk von 57 Standorten, die nah bei
unseren Kunden an wichtigen Automobil-Zentren liegen, stellen
wir sicher, dass die Kompetenzen der gesamten Gruppe unseren
Kunden vor Ort zur Verfügung stehen. Insbesondere in
Deutschland verfügen wir über ein dichtes Netzwerk von
Standorten in der Nähe unserer wichtigsten Kunden. Zwar haben
wir in dem zum 31. Dezember 2014 endenden Geschäftsjahr 78%
unserer Umsatzerlöse in Deutschland erzielt, wo wir
durchschnittlich auch circa 77% unserer gesamten Mitarbeiter
beschäftigt haben, jedoch richtet sich unsere internationale
Ausrichtung nach strategischen und an der Qualität orientierten
Kriterien. Unsere Standorte in Niedriglohnländern wickeln
hauptsächlich konzerninterne Verträge ab und ermöglichen uns
unsere Leistungen zum Bestpreis anzubieten, während andere
internationale Standorte, beispielsweise in China, unser
vollständiges Portfolio an hochwertigen Lösungen sowohl
deutschen OEMs als auch lokalen Automobilherstellern, die an
Joint-Ventures mit deutschen und anderen westlichen OEMs
beteiligt sind, anbieten.
Wir bieten umfassende Fahrzeugkompetenzen über die gesamte
Produkt-Wertschöpfungskette und den gesamten Lebenszyklus
eines Fahrzeugs. Unser umfassendes Leistungsportfolio reicht vom
Design über Produktentwicklung, Modellierung,
Messkonstruktionen, Prototypenbau und Prüfung bis zur
Entwicklung von schlüsselfertigen Produktionssystemen. Wir
glauben, dass unsere Kompetenzen bei Produktionslösungen in
Verbindung mit unseren Kompetenzen im Bereich der
34
Fahrzeugentwicklung unseren Kunden einen besonderen Wert
bieten. Wir glauben, dass uns unsere umfassenden Kompetenzen
im Fahrzeugbereich zu einem Premium-Ingenieursdienstleister in
der Automobilindustrie machen und dass wir von unseren
Kundenbeziehungen bei verschiedenen Produkten und
Abteilungen unserer Kunden profitieren können.
Unser besonderes Know-how ist die Begleitung und
Unterstützung unserer Kunden von der ursprünglichen Idee bis
hin zum fertigen Prototypen und schließlich der Produktion. Diese
umfassende Fahrzeugkompetenz bei der Entwicklung ist Teil
unserer Geschäftsstrategie und der Schlüssel zu unserem Erfolg.
Auf Wunsch unserer Kunden beteiligen wir uns am gesamten
Lebenszyklus eines Produkts und begleiten unsere Kunden bei
Forschung und Weiterentwicklung über Konzeption und Design
bis hin zur Serienentwicklung und schließlich zur Überwachung
der Serienproduktion. Neben Fahrzeugentwicklungsleistungen
erbringen wir auch zahlreiche Nebenleistungen entlang der
Entwicklungskette wie beispielsweise Projektmanagement,
Qualitätsmanagement, Lieferkettenmanagement und
Dokumentation des Gesamtprojekts. Darüber hinaus sind unsere
“produktionsoptimierten Lösungen” so gestaltet, dass die
Realisierbarkeit des Produktionsprozesses für bestimmte Produkte
und Designs sichergestellt ist.
Feynsinn, unser Beratungsservice, bietet unseren Kunden einen
umfassenden Service an, von der Konzeptionsphase bis zur
Umsetzung, und berät zu Prozessen, Methodiken und Mitteln zur
Optimierung von Entwicklungs- und Produktionssequenzen.
Feynsinn bietet auch Durchführungsleistungen und Trainings an.
Um die Ansprüche unserer Kunden zu erfüllen, legen wir
besonderen Wert auf wichtige aktuelle Trends und Technologien
in der Automobilindustrie, wie etwa Innovationen im Bereich
CO2-Reduktion, Leichtbau, E-Mobilität und Car-IT.(1) Um die
Erwartungen unserer Kunden erfüllen und zur Entwicklung der
Automobilbranche beitragen zu können, passen wir unser
Leistungsportfolio laufend an die sich verändernden
Kundenbedürfnisse und Marktbedingungen an. Unsere
Tochtergesellschaft BFFT Gesellschaft für Fahrzeugtechnik mbH
(“BFFT”) beispielsweise verfügt über spezielle technische
Kenntnisse im Bereich der elektrischen und elektronischen
Entwicklung, die für die Entwicklung von Anwendungen wie
Fahrassistenzsystemen und Sicherheitssystemen, Entertainment im
Auto und Automobil-Konnektivität von entscheidender
Bedeutung sind. BFFT unterstützt unsere Kunden außerdem bei
der Entwicklung von Hardware und Software sowie alternativen
Antriebstechnologien.
Zudem betreiben wir eine Reihe von Elektroniklaboratorien und
Testanlagen, wobei insbesondere unser zertifiziertes Testzentrum
in Fulda hervorzuheben ist.
Aufgrund der hohen Fachkenntnisse und langjährigen Erfahrung
unserer Ingenieure können wir nach unserer Ansicht unsere
Leistungen in jedem einzelnen Bereich mit erstklassiger Qualität
(1) Lünendonk: Lünendonk®-Sonderanalyse 2014. Exklusive Auszüge der
Lünendonk®-Studie, Führende Anbieter von Technologie-Beratung und
Engineering Services in Deutschland, Eine unabhängige Marktanalyse der
Lünendonk GmbH in fachlicher Zusammenarbeit mit ALTEN GmbH, Altran
GmbH & Co. KG, AVENTON GmbH und Randstad Professionals GmbH & Co.
KG, November 2014 (“Lünendonk analysis 2014”).
35
anbieten. Zudem haben wir Kompetenzzentren in den Bereichen
“Leichtbau”, “E-Mobility”, “Car-IT” und “Neue
Produktionstechnologie” aufgebaut. In diesen Kompetenzzentren
wird das Spezialwissen unserer Fachleute aus verschiedenen
Bereichen gebündelt und diese Kompetenzzentren ermöglichen
es uns, das entsprechende Fachwissen weiterzuentwickeln und
beizubehalten.
Mit durchschnittlich 7.714 Mitarbeitern (einschließlich
Auszubildender aber ausschließlich Mitarbeiter aus nicht
fortgeführten Geschäftsbereichen) in dem zum
30. September 2015 endenden Neunmonatszeitraum (in dem zum
30. September 2014 endenden Neunmonatszeitraum: 7.450)
haben wir eine Größe erreicht, die es uns nach unserer Auffassung
erlaubt, als gefragter Ingenieursdienstleister für deutsche OEMs
weiter erfolgreich zu wachsen. Insbesondere unsere Fähigkeit,
Großprojekte abzuwickeln und Projekte in Form von
Werkverträgen anstatt in der Form von Arbeitnehmerüberlassung
anzubieten, was von einer wachsenden Zahl unserer Kunden
nachgefragt wird, verschafft uns nach unserer Ansicht einen
Wettbewerbsvorteil. Gleichzeitig besitzen wir aufgrund unserer
Größe die Flexibilität und die Ressourcen, große und komplexe
Projekte erfolgreich abzuwickeln.
Das Geschäft der Gruppe ist in unsere drei Kern-Segmente
aufgeteilt: Vehicle Engineering, Electrics/Electronics (“E/E”) und
Production Solutions. In dem zum 30. September 2015 endenden
Neunmonatszeitraum betrugen unsere Umsatzerlöse und
Bestandsveränderung der Erzeugnisse € 534,0 Mio. (in dem zum
30. September 2014 endenden Neunmonatszeitraum:
€ 506,3 Mio.) In dem zum 31. Dezember 2014 endenden
Geschäftsjahr verbuchten wir Umsatzerlöse und
Bestandsveränderungen in Höhe von € 689,7 Mio. (in dem zum 31.
Dezember 2013 endenden Geschäftsjahr: € 632,4 Mio., in dem
zum 31. Dezember 2012 endenden Geschäftsjahr: € 415,2 Mio.)
Auf Segmentebene betrugen unsere Umsatzerlöse mit Dritten
(d.h. unsere Umsatzerlöse mit Unternehmen, die nicht Teil der
EDAG Gruppe sind) in unserem Vehicle Engineering Segment
€ 334,3 Mio. in dem zum 30. September 2015 endenden
Neunmonatszeitraum und € 307,2 Mio. in dem zum 30. September
2014 endenden Neunmonatszeitraum (in dem zum 31. Dezember
2014 endenden Geschäftsjahr: € 410,0 Mio., in dem zum
31. Dezember 2013 endenden Geschäftsjahr: € 387,4 Mio., in dem
zum 31. Dezember 2012 endenden Geschäftsjahr: € 252,3 Mio.).
Unsere Umsatzerlöse mit Dritten in unserem Production Solutions
Segment betrugen € 82,6 Mio. in dem zum 30. September 2015
endenden Neunmonatszeitraum und € 72,4 Mio. in dem zum
31. Dezember 2014 endenden Geschäftsjahr: € 100,8 Mio., in dem
zum 31. Dezember 2013 endenden Geschäftsjahr: € 75,4 Mio., in
dem zum 31. Dezember 2012 endenden Geschäftsjahr:
€ 67,7 Mio.). Unsere Umsatzerlöse mit Dritten in unserem E/E
Segment betrugen € 117,4 Mio. in dem zum 30. September 2015
endenden Neunmonatszeitraum und € 85,6 Mio. in dem zum
31. Dezember 2014 endenden Geschäftsjahr: € 123,7 Mio., in dem
zum 31. Dezember 2013 endenden Geschäftsjahr: € 97,8 Mio., in
dem zum 31. Dezember 2012 endenden Geschäftsjahr:
€ 37,5 Mio.).
36
Die oben gezeigten Finanzinformationen sind (i) dem geprüften
Konzernabschluss der EDAG Engineering GmbH für das zum
31. Dezember 2014 endende Geschäftsjahr, der die
Vorjahreszahlen für die zum 31. Dezember 2013 und zum 31.
Dezember 2012 endenden Geschäftsjahre enthält, und (ii) dem
ungeprüften verkürzten Konzernzwischenabschluss der EDAG
Engineering Schweiz Sub-Holding AG für den zum 30. September
2015 endenden Neunmonatszeitraum, der die ungeprüften
Vorjahreszahlen aus dem Konzernzwischenabschluss auf Ebene
der EDAG Engineering GmbH für den zum 30. September 2014
endenden Neunmonatszeitraum enthält, entnommen.
Unsere Wettbewerbsstärken
Š
Wir sind im Wachstumsmarkt für Ingenieursdienstleistungen in
der Automobilindustrie tätig und glauben dass wir gut
aufgestellt sind, um über dem Marktdurchschnitt zu wachsen.
Š
Wir sind weltweit einer der größten unabhängigen
Ingenieursdienstleister in der Automobilindustrie (Quelle: A.T.
Kearney Report) und besitzen nach unserem Erachten die
erforderliche Größe um erfolgreich in einem Markt zu agieren,
auf dem Größe und Erfahrung eine wesentliche Rolle spielte.
Š
Wir denken, dass wir ein ausgewählter Partner für die
Automobilindustrie sind und haben einen aus Bluechip
Unternehmen bestehenden Kundenstamm mit einem Fokus auf
deutsche Premium OEMs.
Š
Wir stehen nach unserer Ansicht für führende Technologie und
Innovation basierend auf deutscher Ingenieurskunst und
decken mit unserem Leistungsangebot die gesamte
Fahrzeugwertschöpfungskette ab.
Š
Wir haben eine gut ausgebildete Belegschaft von Ingenieuren,
ein erfahrenes Management und bieten interne
Entwicklungsmöglichkeiten.
Š
Wir besitzen ein solides Finanzprofil, basierend auf starkem
Umsatzwachstum und attraktiven finanziellen Erträgen.
Unsere Strategie
B.4a
Wichtigste jüngste
Trends, die sich
auf den
Emittenten und
die Branchen, in
denen er tätig ist,
auswirken.
Š
Weitere Verbesserung unserer Produktivität
Š
Fokussierung auf Innovation
Š
Ausbau unserer Attraktivität als Arbeitgeber
Š
Weiterer Ausbau unserer Marktposition
Š
Weitere Anhebung unserer Profitabilität
Š
Beibehaltung operativer Flexibilität
Wir glauben dass die Entwicklung des Markts für
Ingenieursdienstleister in der Automobilindustrie positiv durch
globale Megatrends beeinflusst wird, die insbesondere die
Bedürfnisse von OEMs und Zulieferern hinsichtlich Forschung und
Entwicklung (“F&E”) bestimmen. Folgerichtig hat dies auch
Einfluss auf die Nachfrage nach Ingenieursdienstleistungen. Diese
Trends können in industriespezifische Trends und spezifische
Trends im Markt für Ingenieursdienstleister in der
Automobilindustrie unterteilt werden.
37
Industriespezifische Trends beinhalten:
Š
die Notwendigkeit für OEMs, eine größere Vielzahl an
Modellen sowie mehr Individualisierungsmöglichkeiten
anzubieten;
Š
rapide Fortschritte in der Technologie sowie zunehmend
umfassende Fahrzeugkonfigurations- und
Aufbesserungsmöglichkeiten;
Š
die erhöhte Relevanz von “e-mobility”, z.B. hybride
Elektrofahrzeuge, und anderen umweltfreundlichen
Technologien, die auf einen geringeren Kraftstoffverbrauch
und eine Reduzierung von CO2 Emissionen abzielen;
Š
eine stetige Steigerung der elektronischen Komplexität von
Fahrzeugen (Konnektivität und autonomes Fahren);
Š
neue Mobilitätskonzepte (car sharing) und Wettbewerber; und
Š
intelligente Produktionsanlagen (Industrie 4.0).
Spezifische Trends im Markt für Ingenieursdienstleister in der
Automobilindustrie beinhalten:
B.5
Beschreibung der
Gruppe und der
Stellung des
Emittenten
innerhalb dieser
Gruppe.
Š
einen Konsolidierungstrend in den letzten Jahren aufgrund der
Anforderungen von OEMs an die Fähigkeit von
Ingenieursdienstleistern in der Automobilindustrie im Rahmen
der Auslagerung von Ingenieursprojekten große Projekte
bewältigen zu können und volle Fahrzeugkompetenz
vorzuweisen;
Š
eine Fokussierung der OEMs auf ihre Kernkompetenzen und
eine Auslagerung von zunehmend komplexen
Entwicklungstätigkeiten die nicht als strategisch erachtet
werden;
Š
derzeitige Diskussionen in Deutschland über eine Neuregelung
der Arbeitnehmerüberlassung mit dem Ziel, genauer zwischen
Werkverträgen und Arbeitnehmerüberlassung zu differenzieren.
Zum Datum dieses Prospekts hat die Gesellschaft keine
Tochtergesellschaften und kein operatives Geschäft. Nach
Durchführung der Einbringung wird die Gesellschaft die
Muttergesellschaft der Gruppe werden. Die Geschäftstätigkeit
der Gruppe wird von der EDAG Engineering GmbH, die nach
Durchführung der Einbringung eine indirekte Tochtergesellschaft
der Gesellschaft sein wird, und ihren direkten und indirekten
Tochtergesellschaften ausgeübt.
38
Das folgende Schaubild enthält eine vereinfachte Übersicht über die Organisation der Gruppe
und die wesentlichen Tochtergesellschaften der Gesellschaft unter Annahme der
Durchführung der Einbringung:
100%
Sub-Holding AG
100%
100%
100% (direkt oder indirekt)
EDAG Production
KG
B.6
Personen, die eine
(meldepflichtige)
direkte oder
indirekte
Beteiligung am
Eigenkapital und
den Stimmrechten
des Emittenten
halten.
Rücker Lypsa, S.L.
Fahrzeugtechnik
mbH
Zum Datum dieses Prospekts halten folgende Personen direkt oder
indirekt eine meldepflichtige Beteiligung am Aktienkapital und
den Stimmrechten der Gesellschaft:
Letztlicher Anteilseigner
Direkte(r)
Anteilseigner
Dr. Lutz Mario Helmig1 . . . . . . . . . . . . . . . ATON GmbH. . .
Summe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1)
Wirtschaftliches
(Indirektes)
Eigentum
an der Gesellschaft,
in %
Beteiligung
(unmittelbar vor
dem Angebot)
100,00
100,00
Die von ATON GmbH gehaltenen Stimmrechte werden Dr. Lutz Mario Helmig gemäß
§ 22 Absatz 1 Wertpapierhandelsgesetz zugerechnet.
Stimmrechte.
Jede Aktie der Gesellschaft gewährt in der Generalversammlung
der Gesellschaft eine Stimme. Beschränkungen des Stimmrechts
bestehen nicht. Alle Aktien haben identische Stimmrechte.
Unmittelbare oder
mittelbare
Beherrschung des
Emittenten und
Art der
Beherrschung.
Am Datum dieses Prospekts wird die Gesellschaft unmittelbar
vom Abgebenden Aktionär, der ATON GmbH, die 100% der
Anteile an der Gesellschaft hält, kontrolliert. ATON GmbH ist
daher in der Lage, die finanziellen und operativen Geschicke der
Gesellschaft zu steuern. Der Abgebende Aktionär wird von Dr.
Lutz Mario Helmig kontrolliert. Nach Abschluss des Angebots (wie
in E.3 definiert) wird der Abgebende Aktionär zusammen mit
HORUS Vermögensverwaltungs GbR, eine Gesellschaft die von
Dr. Lutz Mario Helmig kontrolliert wird und die Angebotsaktien
(wie in E.3 definiert) im Zusammenhang mit diesem Angebot
ohne bevorrechtigte Zuteilung erwerben kann (siehe unter E.4),
mindestens 59,75% des Aktienkapitals an der Gesellschaft halten.
39
Der Abgebende Aktionär hat mit der Gesellschaft eine
Vereinbarung geschlossen, in der er sich dazu verpflichtet, für den
Zeitraum vom ersten Handelstag der Aktien der Gesellschaft an
der Frankfurter Börse (derzeit erwartet für den 2. Dezember 2015)
bis zum Tag der zweiten ordentlichen Generalversammlung der
Gesellschaft nach dem ersten Handelstag, mindestens aber für
einen Zeitraum von 19 Monaten ab erstem Handelstag in Bezug
auf jene Anzahl von Aktien der Gesellschaft, die der Abgebende
Aktionär direkt oder indirekt nach dem Abschluss des Angebots
(wie in E.3 definiert) der Gesellschaft hält,
Š
an ordentlichen Generalversammlungen der Gesellschaft sein
Stimmrecht nur bei der Hälfte der zur Wahl in den
Verwaltungsrat der Gesellschaft (der ,,Verwaltungsrat’’)
stehenden Personen auszuüben;
Š
an außerordentlichen Generalversammlungen der Gesellschaft
sein Stimmrecht bei der Zuwahl von Personen in den
Verwaltungsrat nur auszuüben, sofern und soweit im Fall der
Wahl dieser Person die Gesamtzahl der Verwaltungsräte,
welche mit den Stimmen des Abgebenden Aktionärs gewählt
wurden, nicht die Mehrheit beträgt;
Š
an außerordentlichen Generalversammlungen der Gesellschaft,
an denen über die Abwahl eines Mitglieds des
Verwaltungsrates beschlossen werden soll, sein Stimmrecht
nicht auszuüben, soweit im Fall einer Abwahl dieser Person die
Mehrheit der im Verwaltungsrat verbleibenden Mitglieder mit
den Stimmen des Abgebenden Aktionärs gewählt worden
wäre, wobei im Falle einer außerordentlichen
Generalversammlung der Gesellschaft vor der ersten
ordentlichen Generalversammlung nach dem ersten Handelstag
der Abgebende Aktionär in jedem Fall sein Stimmrecht nur
bezüglich einer Abwahl von Thomas Eichelmann oder Sylvia
Schwing (oder deren Nachfolger) ausüben würde; und
Š
an ordentlichen und außerordentlichen Generalversammlungen
der Gesellschaft gegen jede Aufhebung der
Statutenbestimmung, wonach der Präsident des
Verwaltungsrates keinen Stichentscheid hat, zu stimmen.
Der Abgebende Aktionär hat sich ferner dazu verpflichtet dafür
zu sorgen, dass Personen, welche den Abgebenden Aktionär
kontrollieren und welche Aktien der Gesellschaft halten, ihre
Stimmrechte an den Aktien gemäß den vorstehenden Regeln
ausüben.
Soweit HORUS Vermögensverwaltungs GbR, eine Gesellschaft die
von Dr. Lutz Mario Helmig kontrolliert wird, Angebotsaktien (wie
in E.3 definiert) im Zusammenhang mit diesem Angebot (wie in
E.3 definiert und siehe auch E.4) ohne bevorrechtigte Zuteilung
erwirbt, wird HORUS Vermögensverwaltungs GbR Stimmrechtsvereinbarungen mit der Gesellschaft abschließen, die im
Wesentlichen mit der Vereinbarung übereinstimmen, welche die
Gesellschaft und der Abgebende Aktionär, wie oben beschrieben,
abgeschlossen haben.
B.7
Ausgewählte
Wir haben eine komplexe Finanzgeschichte, wodurch sich die in
wesentliche
diesem Prospekt enthaltenen Finanzinformationen unter
historische
Umständen nur begrenzt vergleichen lassen.
Finanzinformationen.
40
Die Gesellschaft wurde am 2. November 2015 gegründet. Da die
Gesellschaft zum Datum dieses Prospekts keine Geschäftstätigkeit
aufgenommen haben wird, keine Unternehmensgegenstände
erworben haben wird oder Verbindlichkeiten eingegangen sein
wird, abgesehen von den Kosten, die in direktem Zusammenhang
mit ihrer Gründung oder dem Angebot (wie in E.3 definiert)
stehen, stellen wir in diesem Prospekt keine Finanzinformationen
der Gesellschaft dar, mit Ausnahme ihrer geprüften
Eröffnungsbilanz zum 2. November 2015. Die in den
nachstehenden Tabellen enthaltenen Finanzinformationen sind
(i) dem geprüften Konzernabschluss der EDAG Engineering GmbH
für das zum 31. Dezember 2014 endende Geschäftsjahr, der die
Vorjahreszahlen für die zum 31. Dezember 2013 und zum 31.
Dezember 2012 endende Geschäftsjahre enthält, und (ii) dem
ungeprüften verkürzten Konzernzwischenabschluss der EDAG
Engineering Schweiz Sub-Holding AG für den zum 30. September
2015 endenden Neunmonatszeitraum, der die ungeprüften
Vorjahreszahlen aus dem Zwischenabschluss auf Ebene der EDAG
Engineering GmbH für den zum 30. September 2014 endenden
Neunmonatszeitraum enthält, entnommen.
Die geprüften Konzernabschlüsse wurden in Übereinstimmung
mit den Internationalen Rechnungslegungsvorschriften (“IFRS”),
wie sie in der Europäischen Union anzuwenden sind, erstellt,
während der ungeprüfte verkürzte Konzernzwischenabschluss
gemäß den IFRS für Zwischenberichterstattung (IAS 34) erstellt
wurde. Der Konzernabschluss der EDAG Engineering GmbH für
das zum 31. Dezember 2014 endende Geschäftsjahr, der die
Vorjahreszahlen für das zum 31. Dezember 2013 endende
Geschäftsjahr, die Eröffnungsbilanz zum 1. Januar 2013 und, auf
kombinierter Grundlage, die Vorjahreszahlen für das zum
31. Dezember 2012 endende Geschäftsjahr enthält, wurde durch
die PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main,
Niederlassung Hannover, Deutschland (“PwC Germany”), geprüft
und mit einem uneingeschränkten Bestätigungsvermerk
versehen. Der vorgenannte geprüfte Konzernabschluss und der
entsprechende Bestätigungsvermerk sind im Finanzteil dieses
Prospekts enthalten. Unsere historischen Ergebnisse lassen nicht
unbedingt auf die künftig zu erwartenden Ergebnisse schließen
und unsere Zwischenergebnisse lassen nicht unbedingt auf die für
das Gesamtjahr zu erwartenden Ergebnisse schließen.
Am 14. September 2015 wurde die EDAG Engineering Schweiz
Sub-Holding AG im Wege einer Sachgründung durch Einbringung
aller ausstehenden Anteile an der EDAG Engineering Holding
GmbH, der deutschen Zwischenholdinggesellschaft, die alle
Anteile an der EDAG Engineering GmbH hält, gegründet.
Gleichzeitig mit der Festlegung des Angebotspreises (wie in
E.3 definiert) wird der Abgebende Aktionär alle Anteile an der
EDAG Engineering Schweiz Sub-Holding AG im Wege der
Einbringung in die Gesellschaft einbringen. Nach der Einbringung
wird die Gesellschaft daher direkt alle Anteile an der EDAG
Engineering Schweiz Sub-Holding AG und indirekt durch die
EDAG Engineering Schweiz Sub-Holding AG und die EDAG
Engineering Holding GmbH alle Anteile an der EDAG Engineering
GmbH halten. Die Geschäftstätigkeit der Gruppe wird von der
EDAG Engineering GmbH, die nach Durchführung der
41
Einbringung eine indirekte Tochtergesellschaft der Gesellschaft
sein wird, und ihren direkten und indirekten
Tochtergesellschaften ausgeübt. Soweit nicht anders angegeben,
stammen alle historischen konsolidierten/kombinierten
Finanzinformationen, die in diesem Prospekt enthalten sind,
entweder von der EDAG Engineering Schweiz Sub-Holding AG
oder der EDAG Engineering GmbH.
Zwischen dem 14. September 2015, dem Gründungsdatum der
EDAG Engineering Schweiz Sub-Holding AG, und dem
30. September 2015 haben zwischen der EDAG Engineering
GmbH und der EDAG Engineering Holding GmbH bestimmte
Transaktionen stattgefunden (insbesondere die Übernahme einer
Darlehensverbindlichkeit der EDAG Engineering GmbH in Höhe
von € 107,3 Mio. zum 30. September 2015 durch die EDAG
Engineering Holding GmbH), deren Effekte die Vergleichbarkeit
der ungeprüften Finanzinformationen aus dem KonzernZwischenabschluss für den zum 30. September 2015 endenden
Neunmonatszeitraum, erstellt auf Ebene der EDAG Engineering
GmbH, und den geprüften konsolidierten und kombinierten
Finanzinformationen, die in diesem Prospekt für die zum
31. Dezember 2012, 2013 und 2014 endenden Geschäftsjahre
enthalten sind und auf Ebene der EDAG Engineering GmbH
erstellt wurden, nachteilig beeinflussen würden. Um den
Investoren besser vergleichbare Finanzinformationen für diese
Berichtszeiträume zur Verfügung zu stellen, legen wir den
ungeprüften Konzern-Zwischenabschluss für den zum
30. September 2015 endenden Neunmonatszeitraum auf Ebene
der EDAG Engineering Schweiz Sub-Holding AG vor, der die
ungeprüften Vorjahreszahlen aus dem KonzernZwischenabschluss für den zum 30. September 2014 endenden
Neunmonatszeitraum auf Ebene der EDAG Engineering GmbH
enthält.
Darüber hinaus wurde die EDAG Engineering GmbH im April 2012
gegründet und im Juli 2012 vom Abgebenden Aktionär
übernommen. Bis zum 1. Januar 2014 waren die EDAG
Engineering GmbH und die EDAG GmbH & Co. KGaA (die
ehemalige Muttergesellschaft der EDAG- Gruppe)
Schwestergesellschaften unter der gemeinsamen
Muttergesellschaft, dem Abgebenden Aktionär. Mit Wirkung ab
dem 1. Januar 2014 wurde die EDAG GmbH & Co. KGaA im Wege
einer gemischten Sacheinlage gegen die Übernahme bestimmter
Finanzverbindlichkeiten auf die EDAG Engineering GmbH
verschmolzen. Aus diesem Grund ist 2014 das erste Geschäftsjahr,
für das wir einen Konzernabschluss für die EDAG Engineering
GmbH und alle ihre aktuellen Tochtergesellschaften aufstellen
konnten. Der geprüfte Konzernabschluss für das zum
31. Dezember 2013 endende Geschäftsjahr der EDAG Engineering
GmbH umfasst den entsprechenden zum 31. Dezember 2013
endenden Zeitraum. Für das zum 31. Dezember 2012 endende
Geschäftsjahr sind die Vorjahreszahlen jedoch kombiniert
ausgewiesen und somit nur begrenzt vergleichbar. Zudem haben
wir seit 2012 mehrere wesentliche Übernahmen und
Veräußerungen vorgenommen, was die Vergleichbarkeit der
Finanzinformationen im geprüften Konzernabschluss für das zum
31. Dezember 2014 endende Geschäftsjahr in diesem Prospekt
weiter einschränken kann. Am 24. September 2012 hat die EDAG
Engineering GmbH eine Mehrheit der Aktien an der Rücker AG,
42
einem technologischen Entwicklungsunternehmen, das (damals)
auf die internationale Automobil-, Luft- und Raumfahrtindustrie
spezialisiert war, erworben. Für die Zwecke der geprüften
kombinierten Finanzinformationen für das zum 31. Dezember
2012 endende Geschäftsjahr wurde die Rücker-Gruppe für
Bilanzierungszwecke mit Wirkung ab dem 1. Oktober 2012
erstmalig in den Kombinierungskreis aufgenommen. Am
18. Januar 2013 hat die EDAG Engineering GmbH die BFFTGruppe, einen herstellerunabhängigen Entwicklungsdienstleister
für die Automobilindustrie übernommen. Für die Zwecke der
geprüften konsolidierten Finanzinformationen für das zum
31. Dezember 2013 endende Geschäftsjahr wurde die BFFTGruppe für Bilanzierungszwecke mit Wirkung ab dem 1. Januar
2013 erstmalig in den Konsolidierungskreis aufgenommen. Wir
haben mehrere Tochtergesellschaften veräußert, einschließlich der
Aerospace-Töchter der Gruppe, die als Teil der Rücker-Gruppe
erworben worden waren und für Bilanzierungszwecke mit
Wirkung ab dem 1. Oktober 2012 in den Kombinierungskreis im
Geschäftssegment Others aufgenommen worden waren; diese
Tochtergesellschaften waren für das zum 31. Dezember 2013
endende Geschäftsjahr als Veräußerungsgruppe gemäß IFRS 5
klassifiziert. Die Ergebnisse dieser Tochtergesellschaften wurden
daher in unserer geprüften Konzern-Gesamtergebnisrechnung für
das zum 31. Dezember 2013 endende Geschäftsjahr ausgewiesen
und deren Aktiva und Passiva wurden als zur Veräußerung
gehaltene Vermögenswerte in unserer Konzern-Bilanz zum
31. Dezember 2013 ausgewiesen. Die Ergebnisse dieser
Tochtergesellschaften in dem zum 31. März 2014 endenden
Dreimonatszeitraum wurden in unsere geprüfte KonzernGesamtergebnisrechnung für das zum 31. Dezember 2014
endende Geschäftsjahr aufgenommen. Mit Wirkung ab dem
31. März 2014 hat die Gruppe ihre Anteile an diesen AerospaceTöchtern veräußert, woraufhin diese Tochtergesellschaften für die
Zwecke der geprüften konsolidierten Finanzinformationen für das
zum 31. Dezember 2014 endende Geschäftsjahr nicht mehr im
Konsolidierungskreis enthalten waren. Folglich waren die Aktiva
und Passiva dieser Tochtergesellschaften nicht in der geprüften
Konzern-Bilanz zum 31. Dezember 2014 enthalten. Zudem haben
wir am 31. Mai 2014 die EKS InTec GmbH verkauft, woraufhin
diese Tochtergesellschaft für die Zwecke der geprüften
konsolidierten Finanzinformationen für das zum 31. Dezember
2014 endende Geschäftsjahr nicht mehr im Konsolidierungskreis
enthalten war. Aufgrund dieser Effekte sind die in unserem
geprüften Konzernabschluss für das zum 31. Dezember 2014
endende Geschäftsjahr dargestellten Finanzinformationen
möglicherweise nicht in vollem Umfang vergleichbar; Anleger
sollten die wesentlichen Unterschiede berücksichtigen, die sich aus
den vorstehend beschriebenen Faktoren ergeben.
43
AUSGEWÄHLTE
DATEN AUS ODER
ABGELEITET AUS
DER KONZERN-/
KOMBINIERTEN
GESAMTERGEBNISRECHNUNG
Die in der folgenden Tabelle dargestellten ausgewählten
Finanzinformationen sind der Konzern-Gesamtergebnisrechnung
aus dem ungeprüften verkürzten Konzern-Zwischenabschluss der
EDAG Engineering Schweiz Sub-Holding AG für die zum 30.
September 2015 und zum 30. September 2014 endenden
Neunmonatszeiträume sowie der geprüften KonzernGesamtergebnisrechnung für die zum 31. Dezember 2014 und
zum 31. Dezember 2013 endenden Geschäftsjahre und der
geprüften kombinierten Gesamtergebnisrechnung für das zum
31. Dezember 2012 endende Geschäftsjahr der EDAG Engineering
GmbH entnommen oder daraus abgeleitet:
Neunmonatszeitraum
zum 30. September
2015
(in TEUR)
2014(1)
(ungeprüft, konsolidiert)
Geschäftsjahr zum 31. Dezember
2014(1)(2)
2013(2)
(geprüft soweit nicht anders
angegeben, konsolidiert)
2012(3)
(geprüft
soweit nicht
anders
angegeben,
kombiniert)
GEWINN ODER VERLUST
Fortzuführende Geschäftsbereiche
Umsatzerlöse und Bestandsveränderung
der Erzeugnisse . . . . . . . . . . . . . . . . . .
Umsatzerlöse . . . . . . . . . . . . . . . . . . . .
Bestandsveränderung der
Erzeugnisse . . . . . . . . . . . . . . . . . . .
Sonstige Erträge . . . . . . . . . . . . . . . . . . .
Materialaufwand . . . . . . . . . . . . . . . . . .
.
ⳮ340 ⳮ7.668 ⳮ7.710
12.285
ⳮ655
.
15.324
22.187
58.868
16.326
20.267
. ⳮ72.877 ⳮ78.719 ⳮ115.823 ⳮ104.943 ⳮ79.514
Rohertrag . . . . . . . . . . . .
Personalaufwand . . . . . .
Abschreibungen . . . . . . .
Sonstige Aufwendungen
. 476.482 449.754 632.793 543.795 355.934
. ⳮ332.311 ⳮ314.147 ⳮ417.308 ⳮ386.226 ⳮ245.664
. ⳮ18.087 ⳮ18.202 ⳮ25.613 ⳮ24.984 ⳮ12.475
. ⳮ81.132 ⳮ70.517 ⳮ102.229 ⳮ94.062 ⳮ62.313
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Ergebnis vor Zinsen und Steuern
(EBIT)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . .
ÜBERLEITUNG AUF DAS BEREINIGTE ERGEBNIS
(BEREINIGTES EBIT)
(EBIT)(4) . . . . . . . . . . . . . . . . . . . . . . . . .
Bereinigungen:
Aufwendungen (+) aus
Kaufpreisallokation(5) . . . . . . . . . . .
Erträge (ⳮ) / Aufwendungen (+) aus
Entkonsolidierungen(6) . . . . . . . . . .
Erträge (ⳮ) aus der Auflösung von
Rückstellungen(7) . . . . . . . . . . . . . .
Erträge (ⳮ) / Aufwendungen (+) aus
Erstkonsolidierungen(8) . . . . . . . . .
Aufwendungen
(+) Verkaufsnebenkosten aus M&ATransaktionen(9) . . . . . . . . . . . . . . .
Aufwendungen
(+) Restrukturierung(10) . . . . . . . . . .
Erträge (ⳮ) aus dem Verkauf von
Immobilien(11) . . . . . . . . . . . . . . . . .
Aufwendungen (+) aus dem Verkauf
von Immobilien(12) . . . . . . . . . . . . .
Aufwendungen (+) aus Impairment
Immobilien(13) . . . . . . . . . . . . . . . . .
Bereinigtes Ergebnis (bereinigtes
EBIT)(4) . . . . . . . . . . . . . . . . . . . . . .
Bereinigtes Kern-EBIT(14) (ungeprüft) . .
Bereinigte Kern-EBIT Marge
(%)(15)(ungeprüft) . . . . . . . . . . . . . . .
(EBIT)(4) . . . . . . . . . . . . . . . . . . .
Ergebnis aus at-equity bewerteten
Beteiligungen . . . . . . . . . . . . . .
Finanzierungserträge . . . . . . . . . .
Finanzierungsaufwendungen . . . .
534.035
534.375
506.286
513.954
689.748
697.458
632.412
620.127
415.181
415.836
44.952
46.888
87.643
38.523
35.482
..
44.952
46.888
87.643
38.523
35.482
..
5.499
5.260
6.965
8.351
1.338
— ⳮ11.758 ⳮ26.224
—
ⳮ4.777
..
ⳮ2.177
—
—
—
—
..
—
30
30
—
—
..
..
71
499
866
—
—
..
6.329
3.972
4.845
2.791
—
..
ⳮ250
— ⳮ18.405
—
—
..
381
—
1.292
—
—
..
—
—
865
—
—
..
..
54.805
55.076
44.891
42.616
57.877
53.185
49.665
42.984
32.043
29.566
..
10,3%
9,1%
8,4%
7,7%
8,3%
46.888
......
44.952
87.643
38.523
35.482
......
......
......
1.052
1.841
ⳮ8.050
—
—
518
1.035
ⳮ9.142 ⳮ11.752
—
1.487
ⳮ8.301
50
2.997
ⳮ5.938
Finanzergebnis . . . . . . . . . . . . . . . . . . . . .
ⳮ5.157
ⳮ8.624 ⳮ10.717
ⳮ6.814
ⳮ2.891
Ergebnis vor Steuern aus fortzuführenden
Geschäftsbereichen . . . . . . . . . . . . . . . .
39.795
Ertragsteuern . . . . . . . . . . . . . . . . . . . . . . ⳮ12.337
38.264
76.926
ⳮ9.295 ⳮ18.688
31.709
ⳮ9.982
32.591
ⳮ7.672
58.238
21.727
24.919
Ergebnis nach Steuern aus
fortzuführenden Geschäftsbereichen . .
Aufgegebene Geschäftsbereiche(16)
Ergebnis nach Steuern aus aufgegebenen
Geschäftsbereichen . . . . . . . . . . . . . . . .
27.458
28.969
—
1.550
1.586
ⳮ1.905
ⳮ767
Gewinn oder Verlust . . . . . . . . . . . . . . . .
27.458
30.519
59.824
19.822
24.152
VON DEM GEWINN ODER VERLUST ENTFALLEN
AUF:
Anteilseigner des Mutterunternehmens . .
Minderheitsanteile (Non-Controlling
Interest) . . . . . . . . . . . . . . . . . . . . . . . . .
27.423
30.573
59.868
18.634
24.277
36
ⳮ54
ⳮ43
1.188
ⳮ125
44
(1) Das operative Ergebnis verschiedener Tochtergesellschaften, die während des zum
30. September 2015 endenden Neunmonatszeitraums oder zum 31. Dezember 2014
endenden Geschäftsjahres veräußert wurden, ist nur für die Zeiträume vor der
jeweiligen Veräußerung dargestellt.
(2) Daten für die zum 31. Dezember 2014 und zum 31. Dezember 2013 endenden
Geschäftsjahre sind konsolidiert dargestellt und umfassen jeweils das Geschäft der
Rücker-Gruppe und das Geschäft der BFFT-Gruppe für das gesamte Geschäftsjahr.
(3) Daten für das zum 31. Dezember 2012 endende Geschäftsjahr sind kombiniert
dargestellt und umfassen das Geschäft der Rücker-Gruppe mit bilanzieller Wirkung
ab dem 1. Oktober 2012, dem Datum der erstmaligen Aufnahme der RückerGruppe in unseren Kombinierungskreis für die Zwecke unserer geprüften
kombinierten Finanzinformationen. Daten enthalten nicht das Geschäft der BFFTGruppe, die mit bilanzieller Wirkung vom 1. Januar 2013 erworben wurde.
(4) EBIT und bereinigtes EBIT sind keine IFRS-Kennzahlen. EBIT bedeutet Ergebnis vor
Zinsen und Steuern, bereinigtes EBIT bedeutet das um Sonderposten bereinigte
EBIT. Während die im EBIT und bereinigtem EBIT dargestellten Beträge aus
unserem geprüften Konzernabschluss für das zum 31. Dezember 2014 endende
Geschäftsjahr bzw. unserem ungeprüften verkürzten Konzernzwischenabschluss für
den zum 30. September 2015 endenden Neunmonatszeitraum abgeleitet sind,
stellen diese Kennzahlen keine gemäß IFRS berechneten Finanzkennzahlen dar.
Dementsprechend sind EBIT und bereinigtes EBIT als Ergänzung zu den Kennzahlen
in unserer Konzern-/kombinierten Gesamtergebnisrechnung oder unserer Konzern-/
kombinierten Kapitalflussrechnung, die gemäß IFRS aufgestellt wurden, zu
verstehen und sind nicht als deren Ersatz zu betrachten. Unsere Geschäftsleitung
verwendet das EBIT und das bereinigte EBIT zur Bewertung unserer operativen
Leistung und als Maßstab für den wirtschaftlichen Erfolg unseres Geschäfts. Zudem
stellen EBIT und bereinigtes EBIT unserer Ansicht nach Kennzahlen dar, die von
Investoren üblicherweise verwendet werden. Das in diesem Prospekt dargestellte
EBIT und das in diesem Prospekt dargestellte bereinigte EBIT sind unter Umständen
nicht mit ähnlich bezeichneten Kennzahlen anderer Unternehmen vergleichbar,
weil diese Kennzahlen möglicherweise unterschiedlich berechnet werden.
(5) Aufwendungen aus Kaufpreisallokation bilden die Effekte der Abschreibung von
Unterschiedsbeträgen aufgrund der den Käufen der Rücker-Gruppe, der BFFTGruppe und iSILOG GmbH zuzurechnenden Kaufpreisallokation in Höhe von
€ 4,2 Mio. bzw. € 1,2 Mio. bzw. € 0,1 Mio. für den zum 30. September 2015
endenden Neunmonatszeitraum, der den Käufen der Rücker-Gruppe und der BFFTGruppe und zuzurechnenden Kaufpreisallokation in Höhe von € 4,0 Mio. bzw.
€ 1,2 Mio. für den zum 30. September 2014 endenden Neunmonatszeitraum, der
den Käufen der Rücker-Gruppe und der BFFT-Gruppe zuzurechnenden
Kaufpreisallokation in Höhe von € 5,3 Mio. bzw. € 1,6 Mio. für das zum
31. Dezember 2014 endende Geschäftsjahr und von € 5,3 Mio. bzw. € 3,0 Mio. für
das zum 31. Dezember 2013 endende Geschäftsjahr ab. Für das zum 31. Dezember
2012 endende Geschäftsjahr bilden Aufwendungen aus Kaufpreisallokation die
Effekte der Abschreibung von Unterschiedsbeträgen aufgrund der dem Kauf der
Rücker-Gruppe zuzurechnenden Kaufpreisallokation in Höhe von € 1,3 Mio. ab.
(6) Erträge/Aufwendungen aus Entkonsolidierungen für den zum 30. September 2014
endenden Neunmonatszeitraum bilden die Veräußerungen unserer AerospaceTochtergesellschaften (die zuvor Teil der Rücker-Gruppe gewesen waren)
(€ 4,0 Mio.) und der EKS InTec GmbH (€ 8,0 Mio.) ab. Erträge/Aufwendungen aus
Entkonsolidierungen für das zum 31. Dezember 2014 endende Geschäftsjahr bilden
die Veräußerungen unserer Aerospace-Tochtergesellschaften (€ 4,6 Mio.), der EKS
InTec GmbH (€ 8,0 Mio.) und des Geschäftsbereichs „Werkzeug und
Karosseriesysteme Eisenach” im Wege einer Abspaltung zur Aufnahme in die EDAG
Werkzeug + Karosserie GmbH (€ 14,4 Mio.) ab. In dem zum 31. Dezember 2012
endenden Geschäftsjahr enthalten Erträge/Aufwendungen aus
Entkonsolidierungen die Entkonsolidierung der Rosata GrundstücksVermietungsgesellschaft mbH & Co. Objekt Fulda-West KG.
(7) Erträge aus der Auflösung von Rückstellungen umfassen die Auflösung von
Rückstellungen hinsichtlich Abfindungszahlungen und Provisionen im
Zusammenhang mit Sale-and-lease-back Transaktionen.
(8) Erträge/Aufwendungen aus Erstkonsolidierungen bilden die Erstkonsolidierung der
russischen Tochtergesellschaft EDAG Production Solutions RU OOO
(Obschtschestwo s ogranitschennoi otwetstwennostju) ab.
(9) Aufwendungen Verkaufsnebenkosten aus M&A-Transaktionen bilden Folgekosten
im Zusammenhang mit der Veräußerung bestimmter Tochtergesellschaften und
Kosten im Zusammenhang mit einer Verschmelzung (EDAG Testing Solutions
GmbH) für die zum 30. September 2015 und zum 30. September 2014 endenden
Neunmonatszeiträume, und Kosten aufgrund der Veräußerung bestimmter
Tochtergesellschaften, einschließlich der Aerospace-Töchter und der EKS Intec
GmbH, das zum 31. Dezember 2014 endende Geschäftsjahr ab.
45
(10) Aufwendungen aus Restrukturierung setzen sich zusammen aus Aufwendungen für
Beratung und Reengineering (€ 5,7 Mio. bzw. € 1,4 Mio.) sowie aus
Abfindungszahlungen (€ 0,6 Mio. bzw. € 2,6 Mio.) für die zum 30. September 2015
und zum 30. September 2014 endenden Neunmonatszeiträume, Aufwendungen für
Beratung und Reengineering (€ 1,6 Mio.) und Abfindungszahlungen (€ 3,2 Mio.)
für das zum 31. Dezember 2014 endende Geschäftsjahr sowie für Abfindungen
(€ 0,7 Mio.) und Beratung (€ 2,1 Mio.) für das zum 31. Dezember 2013 endende
Geschäftsjahr ab.
(11) Erträge aus dem Verkauf von Immobilien für das zum 31. Dezember 2014 endende
Geschäftsjahr bilden die Veräußerung von Immobilien (€ 2,5 Mio.) und die Erträge
aus einer Sale-and-lease-back-Transaktion (€ 15,9 Mio.) ab.
(12) Aufwendungen aus dem Verkauf von Immobilien im Zusammenhang mit einer
Sale-and-Leaseback Transaktion sind Folgekosten im Neunmonatszeitraum zum
30. September 2015 und Aufwendungen für Beratung (€ 0,1 Mio.) und
Verkaufsprovisionen (€ 1,2 Mio.) zum 31. Dezember 2014 endenden Geschäftsjahr.
(13) Aufwendungen aus Impairment Immobilien für das zum 31. Dezember 2014
endende Geschäftsjahr bilden die Minderung des Verkehrswerts von Immobilien
einer Tochtergesellschaft in der Tschechischen Republik ab.
(14) Bereinigtes Kern-EBIT ist keine IFRS-Kennzahl. Die erste Komponente des
bereinigten Kern-EBITs ist die Summe des EBITs unserer drei Kern-Segmente
(Vehicle Engineering, Electrics/Electronics und Production Solutions) unter
Ausschluss unseres Segments Others. Die zweite Komponente bestehend aus der
Anpassung der Konzern-Kaufpreisallokation wird der ersten Komponente
hinzugerechnet. Diese Anpassung der Konzern-Kaufpreisallokation ist
ausschließlich den drei Kernsegmenten (Vehicle Engineering, Electrics/Electronics
und Production Solutions) zuzuordnen. Es entfallen keine Anpassungen der
Konzern-Kaufpreisallokation auf das Segment Other. Unsere Geschäftsleitung
verwendet das bereinigte Kern-EBIT zur Bewertung unserer operativen Leistung
und als Maßstab für den Erfolg unseres Geschäfts. Während die im bereinigten
Kern-EBIT dargestellten Beträge aus unserem geprüften Konzernabschluss für das
zum 31. Dezember 2014 endende Geschäftsjahr bzw. unserem ungeprüften
verkürzten Konzernzwischenabschluss für den zum 30. September 2015 endenden
Neunmonatszeitraum abgeleitet sind, stellt diese Kennzahl keine gemäß IFRS
berechnete Finanzkennzahl dar. Dementsprechend ist das bereinigte Kern-EBIT als
Ergänzung zu den Kennzahlen in unserer Konzern-/kombinierten
Gesamtergebnisrechnung oder unserer Konzern-/kombinierten
Kapitalflussrechnung, die gemäß IFRS aufgestellt wurden, zu verstehen und ist
nicht als deren Ersatz zu betrachten.
(15) Bereinigte Kern-EBIT Marge ist keine IFRS-Kennzahl. Die bereinigte Kern-EBIT
Marge bildet das Verhältnis unseres bereinigten Kern-EBITs zu den Umsatzerlösen
(einschließlich Bestandsveränderung der Erzeugnisse) unserer drei Kern-Segmente
(Vehicle Engineering, Electrics/Electronics und Production Solutions, unter
Ausschluss unseres Segments Others) mit Dritten ab. Während die in der
bereinigten Kern-EBIT Marge dargestellten Beträge aus unserem geprüften
Konzernabschluss für das zum 31. Dezember 2014 endende Geschäftsjahr bzw.
unserem ungeprüften verkürzten Konzernzwischenabschluss für den zum 30.
September 2015 endenden Neunmonatszeitraum abgeleitet sind, stellt diese
Kennzahl keine gemäß IFRS berechnete Finanzkennzahl dar. Deshalb ist die
bereinigte Kern-EBIT Marge als Ergänzung zu den Kennzahlen in unserer Konzern-/
kombinierten Gesamtergebnisrechnung oder unserer Konzern-/kombinierten
Kapitalflussrechnung, die gemäß IFRS aufgestellt wurden, zu verstehen und ist
nicht als deren Ersatz zu betrachten.
(16) Aufgegebene Geschäftsbereiche bildet Aufwendungen im Zusammenhang mit
einer Abstandszahlung in dem zum 30. September 2014 endenden
Neunmonatszeitraum und dem zum 31. Dezember 2014 endenden Geschäftsjahr,
Rückstellungen im Zusammenhang mit der Veräußerung des Geschäftsbereichs
„Production” in dem zum 31. Dezember 2013 endenden Geschäftsjahr sowie die
Aktiva, Passiva und Rückstellungen der Geschäftsbereiche „Production Systems”
und „Production” in dem zum 31. Dezember 2012 endenden Geschäftsjahr, die als
zur Veräußerung gehalten klassifiziert und 2012 vollständig entkonsolidiert
wurden, ab.
46
AUSGEWÄHLTE
DATEN AUS DER
KONZERN-/
KOMBINIERTEN
BILANZ
Finanzinformationen sind der ungeprüften Konzern-Bilanz zum
30. September 2015 der EDAG Engineering Schweiz Sub-Holding
AG sowie der geprüften Konzern-Bilanz zum 31. Dezember 2014
und 31. Dezember 2013 und der geprüften kombinierten Bilanz
zum 31. Dezember 2012 der EDAG Engineering GmbH
entnommen:
Zum 30. September Zum 31. Dezember Zum 1. Januar
2015
(ungeprüft,
konsolidiert)
(in TEUR)
2014(1)
2013(1)
(geprüft,
konsolidiert)
2013(2)
(geprüft,
kombiniert)
AKTIVA
Langfristiges Vermögen . . . . . . . .
Kurzfristiges Vermögen . . . . . . . .
Summe Aktiva . . . . . . . . . . . . . . . .
187.333 183.193 208.920
311.256 301.364 295.712
498.589 484.557 504.632
173.714
209.173
382.887
PASSIVA
Summe Eigenkapital . . . . . . . . . . .
Langfristiges Fremdkapital . . . . . .
Kurzfristiges Fremdkapital . . . . . .
Summe Passiva . . . . . . . . . . . . . . .
146.512
200.382
151.695
498.589
113.005
40.402
229.480
382.887
117.411
201.131
166.015
484.557
102.922
234.543
167.167
504.632
(1) Daten zum 31. Dezember 2014 und zum 31. Dezember 2013 sind konsolidiert
dargestellt und umfassen jeweils das Geschäft der Rücker-Gruppe sowie das
Geschäft der BFFT-Gruppe. Zudem wurde unser Aerospace-Geschäft, das vormals
Teil der Rücker-Gruppe war, in unsere geprüften kombinierten
Finanzinformationen zum 31. Dezember 2012 aufgenommen. Zum 31. Dezember
2013 wurde unser Aerospace-Geschäft als „Veräußerungsgruppe” gemäß IFRS 5
klassifiziert und am 31. März 2014 veräußert.
(2) Daten zum 1. Januar 2013 sind kombiniert dargestellt und umfassen das Geschäft
der Rücker-Gruppe. Daten enthalten nicht das Geschäft der BFFT-Gruppe, die mit
bilanzieller Wirkung ab dem 1. Januar 2013 erworben wurde.
AUSGEWÄHLTE
DATEN AUS DER
KONZERN-/
KOMBINIERTEN
KAPITALFLUSSRECHNUNG
Finanzinformationen der EDAG Engineering Schweiz Sub-Holding
AG sind der ungeprüften Konzern-Kapitalflussrechnung für die
zum 30. September 2015 und zum 30. September 2014 endenden
Neunmonatszeiträume sowie der geprüften KonzernKapitalflussrechnung für die zum 31. Dezember 2014 und
zum 31. Dezember 2013 endenden Geschäftsjahre und der
geprüften kombinierten Konzern-Kapitalflussrechnung für das
zum 31. Dezember 2012 endende Geschäftsjahr der EDAG
Engineering GmbH entnommen:
Neunmonatszeitraum
zum 30. September Geschäftsjahr zum 31. Dezember
2015
2014(1)
(ungeprüft,
konsolidiert)
(in TEUR)
2014(1)(2)
2013(2)
(geprüft,
konsolidiert)
Mittelzufluss-/-abfluss aus
laufender Geschäftstätigkeit/
Operating Cash Flow . . . . . . . . . ⳮ16.259 12.152 56.718 21.029
Mittelzufluss-/-abfluss aus der
Investitionstätigkeit/Investing
Cash Flow . . . . . . . . . . . . . . . . . ⳮ16.061 ⳮ41.900 ⳮ32.596 ⳮ62.440
Mittelzufluss/-abfluss aus der
Finanzierungstätigkeit/
Financing Cash Flow . . . . . . . . . 20.423 ⳮ17.419 ⳮ54.774 75.979
Free Cash Flow (FCF) – Equity
Approach(4) . . . . . . . . . . . . . . . . ⳮ32.320 ⳮ29.748
24.122 ⳮ41.411
2012(3)
(geprüft,
kombiniert)
44.788
ⳮ53.048
ⳮ6.443
ⳮ8.260
(1) Daten der verschiedener Tochtergesellschaften, die während des zum
30. September 2015 endenden Neunmonatszeitraums oder zum 31. Dezember 2014
endenden Geschäftsjahres veräußert wurden, sind nur für die Zeiträume vor der
jeweiligen Veräußerung berücksichtigt.
47
(2) Daten für die zum 31. Dezember 2014 und zum 31. Dezember 2013 endenden
Geschäftsjahre sind konsolidiert dargestellt und umfassen jeweils das Geschäft der
Rücker-Gruppe und das Geschäft der BFFT-Gruppe für das gesamte Geschäftsjahr.
Zudem wurde unser Aerospace-Geschäft, das vormals Teil der Rücker-Gruppe war,
in unsere geprüften kombinierten Finanzinformationen für das zum 31. Dezember
2012 endende Geschäftsjahr mit bilanzieller Wirkung ab dem 1. Oktober 2012, dem
Datum der erstmaligen Aufnahme der Rücker-Gruppe in unseren
Kombinierungskreis für die Zwecke unserer geprüften kombinierten
Finanzinformationen, aufgenommen.
(3) Daten für das zum 31. Dezember 2012 endende Geschäftsjahr sind kombiniert
dargestellt und umfassen das Geschäft der Rücker-Gruppe mit bilanzieller Wirkung
ab dem 1. Oktober 2012, dem Datum der erstmaligen Aufnahme der RückerGruppe in unseren Kombinierungskreis für die Zwecke unserer geprüften
kombinierten Finanzinformationen. Daten enthalten nicht das Geschäft der BFFTGruppe, die mit bilanzieller Wirkung ab dem 1. Januar 2013 erworben wurde.
(4) Free Cash Flow (FCF) – Equity Approach ist keine IFRS-Kennzahlen und bildet den
Operating Cash Flow abzüglich des Investing Cash Flow ab. Während die unter Free
Cash Flow (FCF) – Equity Approach ausgewiesenen Beträge aus unserem geprüften
Konzernabschluss für das zum 31. Dezember 2014 endende Geschäftsjahr bzw.
unserem ungeprüften verkürzten Konzernzwischenabschluss für den zum
30. September 2015 endenden Neunmonatszeitraum abgeleitet wurden, stellt diese
Kennzahl keine gemäß IFRS berechnete Finanzkennzahl dar. Dementsprechend ist
Free Cash Flow (FCF) – Equity Approach als Ergänzung zu den Kennzahlen in
unseren konsolidierten oder kombinierten Kapitalflussrechnungen, die gemäß IFRS
aufgestellt wurden, zu verstehen und ist nicht als deren Ersatz zu betrachten. Der
in diesem Prospekt dargestellte Free Cash Flow (FCF) – Equity Approach ist unter
Umständen nicht mit ähnlich bezeichneten Kennzahlen anderer Unternehmen
vergleichbar, weil diese Kennzahlen möglicherweise unterschiedlich berechnet
werden.
Wesentliche
Änderungen der
Finanzlage und
des Betriebsergebnisses des
Emittenten in dem
oder nach dem
von den
wesentlichen
historischen
Finanzinformationen
abgedeckten
Zeitraum.
Ertragslage
In dem zum 30. September 215 endenden Neunmonatszeitraum
sowie in den Geschäftsjahren 2014, 2013 und 2012 haben sich
folgende wesentliche Änderungen der Ertragslage der Gruppe
ergeben.
Zum 30. September 2014 und zum 30. September 2015 endenden
Neunmonatszeiträume
Unsere Gesamtleistung konnte von € 506,3 Mio. in dem zum
30. September 2014 endenden Neunmonatszeitraum um
€ 27,7 Mio., oder 5,5%, auf € 534,0 Mio. in dem zum
30. September 2015 endenden Neunmonatszeitraum gesteigert
werden. Diese Anstiege sind in erster Linie auf einer Steigerung
der Kundennachfrage für Ingenieursdienstleistungen und unsere
erfolgreiche Rekrutierung von zusätzlichen Mitarbeitern
zurückzuführen, wodurch wir höhere Kapazitäten schaffen
konnten und im Rahmen der gestiegenen Nachfrage eine größere
Anzahl von Projekten annehmen konnten. Die erhöhte
Kundennachfrage war wiederum auf positive Trends in der
globalen Wirtschaftsentwicklung und der Automobilindustrie
zurückzuführen, die OEMs dazu veranlassten, größere und
komplexere Arbeitspakete an externe Entwicklungsdienstleister
zu vergeben. Neben den oben beschriebenen positiven Trends ist
der Anstieg in unserem Electrics/Electronics Segment
hauptsächlich auf einen höheren Umfang von Werkverträgen im
Vergleich zu Arbeitnehmerüberlassungen zurückzuführen.
Unser Ergebnis vor Zinsen und Steuern (EBIT) sank von € 46,9 Mio.
in dem zum 30. September 2014 endenden Neunmonatszeitraum
um € 1,9 Mio., oder 4,1%, auf € 45,0 Mio. in dem zum
30. September 2015 endenden Neunmonatszeitraum. Dieser
48
Ergebnisrückgang ist teilweise zurückzuführen auf geringere
Erlöse aus Dekonsolidierungen in Höhe von € 11,8 Mio. in dem
zum 30. September 2014 endenden Neunmonatszeitraum sowie
höhere Ausgaben für Restrukturierung. Dagegen wirken sich eine
Fixkostendegression aufgrund einer Steigerung der
Gesamtleistung sowie höhere Margen im Zusammenhang mit
Kundenprojekten positiv aus.
Das bereinigte EBIT stieg von € 44,9 Mio. in dem zum
30. September 2014 endenden Neunmonatszeitraum um
€ 9,9 Mio., oder 22,1%, auf € 54,8 Mio. in dem zum 30. September
2015 endenden Neunmonatszeitraum. Dieser Anstieg war
teilweise zurückzuführen auf eine Fixkostendegression aufgrund
einer Steigerung der Gesamtleistung sowie höheren Margen im
Zusammenhang mit Kundenprojekten.
Unser Bereinigtes Kern-EBIT, welches das Bereinigte EBIT unserer
drei Segmente Vehicle Engineering, Production Solutions und
Electrics/Electronics umfasst und unser Others Segment nicht
berücksichtigt, stieg von € 42,6 Mio. in dem zum 30. September
2014 endenden Neunmonatszeitraum um € 12,5 Mio., oder
29,2%, auf € 55,1 Mio. in dem zum 30. September 2015 endenden
Neunmonatszeitraum. Unsere Bereinigte Kern-EBIT Marge, welche
die Bereinigte EBIT Marge für unsere drei Segmente Vehicle
Engineering, Production Solutions und Electrics/Electronics
darstellt, stieg um 1,2 Prozentpunkte, von 9,1% in dem zum
30. September 2014 endenden Neunmonatszeitraum auf 10,3% in
dem zum 30. September 2015 endenden Neunmonatszeitraum,
hauptsächlich aufgrund von Kosten- und Synergieeffekten
aufgrund der Integration der Rücker Gruppe.
Geschäftsjahre 2014 und 2013
Unsere Gesamtleistung konnte von € 632,4 Mio. in dem zum
31. Dezember 2013 endenden Geschäftsjahr um € 57,3 Mio., oder
9,1%, auf € 689,7 Mio. in dem zum 31. Dezember 2014 endenden
Geschäftsjahr gesteigert werden. Diese Anstiege waren in erster
Linie auf die positiven Trends in der globalen
Wirtschaftsentwicklung und der Automobilindustrie
zurückzuführen, die OEMs dazu veranlassten, größere und
zu vergeben, sowie auf die Anstellung weiterer Ingenieure,
wodurch wir eine höhere Anzahl an Projekten bedienen konnten.
Unser Ergebnis vor Zinsen und Steuern (EBIT) stieg erheblich, von
€ 38,5 Mio. in dem zum 31. Dezember 2013 endenden
Geschäftsjahr um € 49,1 Mio., oder 127,5%, auf € 87,6 Mio. in
dem zum 31. Dezember 2014 endenden Geschäftsjahr. Neben
höheren Umsatzerlösen, die auf positiven Trends in der globalen
Wirtschaftsentwicklung und der Automobilindustrie, einer
höheren Anzahl an Projekten und der abgeschlossenen
Integration der Rücker-Gruppe beruhten, war diese deutliche
Ergebnissteigerung teilweise zurückzuführen auf Sondereffekte
durch den Verkauf der Rücker-Aerospace-Gesellschaften, den
Verkauf der EKS InTec GmbH sowie durch Immobilienverkäufe.
Ferner wurde der Teilbetrieb „Werkzeug und Karosseriesysteme
Eisenach” der EDAG Engineering GmbH zunächst in die EDAG
49
Werkzeug + Karosserie GmbH ausgegliedert. In diesem
Zusammenhang erwarb die FFT Produktionssysteme GmbH & Co.
KG 51% der Anteile des Unternehmens in dem zum 31. Dezember
2014 endenden Geschäftsjahr, während die verbleibenden 49%
der Anteile in dem zum 31. Dezember 2014 endenden
Geschäftsjahr mit der Equity-Methode erfasst wurden.
Geschmälert wurden diese positiven Sondereffekte aus Verkäufen
durch Restrukturierungsaufwendungen im Zusammenhang mit
der 2014 umgesetzten Verschmelzung der EDAG Engineering
GmbH und der Rücker-Gruppe, den daraus resultierenden
Abschreibungen aus der Kaufpreisallokation sowie einem
Impairment auf ein Gebäude, das als zur Veräußerung verfügbar
qualifiziert wurde. Bereinigt um diese Sondereffekte betrug das
bereinigte EBIT in dem zum 31. Dezember 2014 endenden
Geschäftsjahr € 57,9 Mio., was einer Steigerung von € 8,2 Mio.
oder 16,5% gegenüber dem bereinigten EBIT für das zum
31. Dezember 2013 endende Geschäftsjahr entspricht.
Unser Bereinigtes Kern-EBIT stieg von € 43,0 Mio. in dem zum
Geschäftsjahr. Unsere Bereinigte Kern-EBIT-Marge stieg um 0,7
Prozentpunkte, von 7,7% in dem zum 31. Dezember 2013
endenden Geschäftsjahr auf 8,4% in dem zum 31. Dezember 2014
endenden Geschäftsjahr.
Geschäftsjahre 2013 und 2012
Unsere Gesamtleistung konnte um € 217,2 Mio., oder 52,3%, von
Geschäftsjahr auf € 632,4 Mio. in dem zum 31. Dezember 2013
endenden Geschäftsjahr gesteigert werden. Diese Steigerungen
waren in erster Linie auf die vollständige Konsolidierung der
Rücker-Gruppe und der BFFT-Gruppe in dem zum 31.
Dezember 2013 endenden Geschäftsjahr zurückzuführen.
Ansonsten lag dieser Anstieg über alle Segmente hinweg an den
positiven Trends in der globalen Wirtschaftsentwicklung und der
Automobilindustrie, die OEMs dazu veranlassten, größere und
zu vergeben, sowie an der Anstellung weiterer Ingenieure,
wodurch wir eine höhere Anzahl an Projekten bedienen konnten.
Unser Ergebnis vor Zinsen und Steuern (EBIT) stieg von € 35,5 Mio.
in dem zum 31. Dezember 2012 endenden Geschäftsjahr um
€ 3,0 Mio., oder 8,6%, auf € 38,5 Mio. in dem zum 31. Dezember
2013 endenden Geschäftsjahr. Dieser Anstieg lag in erster Linie an
der vollständigen Konsolidierung der Rücker-Gruppe und der
BFFT-Gruppe in dem zum 31. Dezember 2013 endenden
Geschäftsjahr. Ansonsten war hierfür vor allem die höhere
Gesamtleistung verantwortlich, die zum Teil durch niedrigere
sonstige Erträge und höhere Aufwendungen sowie durch höhere
Abschreibungen, die vor allem infolge der Übernahme der RückerGruppe und der BFFT-Gruppe von € 12,5 Mio. in dem zum
31. Dezember 2012 endenden Geschäftsjahr um € 12,5 Mio. auf
Geschäftsjahr angestiegen waren, aufgewogen wurde.
50
Unser bereinigtes EBIT stieg von € 32,0 Mio. in dem zum 31.
Dezember 2012 endenden Geschäftsjahr um € 17,6 Mio., oder
Geschäftsjahr. Dieser Anstieg war in erster Linie auf die
vollständige Konsolidierung der Rücker-Gruppe und der BFFTGruppe in dem zum 31. Dezember 2013 endenden Geschäftsjahr
sowie auf günstigere Marktbedingungen zurückzuführen.
Unser Bereinigtes Kern-EBIT stieg von € 29,6 Mio. in dem zum
Geschäftsjahr. Unsere Bereinigte Kern-EBIT-Marge verringerte sich
um 0,6 Prozentpunkte, von 8,3% in dem zum 31. Dezember 2012
endenden Geschäftsjahr auf 7,7% in dem zum 31. Dezember 2013
endenden Geschäftsjahr.
Jüngste Entwicklungen
Die Gesellschaft wurde durch den Abgebenden Aktionär am
2. November 2015 gegründet und am 3. November 2015 im
Handelsregister als Aktiengesellschaft unter Schweizer Recht mit
einem Aktienkapital in Höhe von CHF 1.000 Tausend (entspricht
€ 920 Tausend basierend auf einem Umrechnungskurs von
CHF 1,09 am 2. November 2015 wie in der geprüften
Eröffnungsbilanz der Gesellschaft vom 2. November 2015 gezeigt)
eingetragen.
Das ursprüngliche Aktienkapital von CHF 1.000 Tausend wurde
vom Abgebenden Aktionär im Wege einer Bareinlage eingebracht
(entspricht € 920 Tausend basierend auf einem CHF
Umrechnungskurs am 2. November 2015).
Gleichzeitig mit der Festsetzung des Angebotspreises (wie in
E.3 definiert) wird der Abgebende Aktionär alle Anteile an der
EDAG Engineering Schweiz Sub-Holding AG im Wege der
Einbringung in die Gesellschaft einbringen. Der Einbringungswert
der Anteile der EDAG Engineering Schweiz Sub-Holding AG wird
die Kapitalrücklagen in der Einzelbilanz der Emittentin erhöhen.
Der Einbringungswert der EDAG Engineering Schweiz Sub-Holding
AG zum Zeitpunkt der Einbringung wird nicht auf einem
Bewertungsgutachten, das von einem Dritten erstellt wird,
sondern auf dem Marktwert der Gesellschaft basieren, der im Zuge
des Angebots (wie in E.3 definiert) bestimmt wird. Diese Methode
der Festlegung des Einbringungswertes der EDAG Engineering
Schweiz Sub-Holding AG unterstellt, dass der Marktwert der
Gesellschaft, wie er im Zuge des Angebots bestimmt wird (d.h. der
Angebotspreis (wie in E.3 definiert) multipliziert mit allen 25.000
Tausend ausstehenden Aktien der Gesellschaft), die Summe aus (i)
dem Nettovermögenswert der Gesellschaft unmittelbar vor der
Einbringung und (ii) dem Wert aller Aktien der EDAG Engineering
Schweiz Sub-Holding AG darstellt. Der Einbringungswert der EDAG
Engineering Schweiz Sub-Holding AG ist daher der Marktwert der
Gesellschaft wie er im Zuge des Angebots (wie in E.3 definiert)
ermittelt wird abzüglich des Nettoreinvermögens der Gesellschaft
unmittelbar vor der Einbringung. Unter Annahme einer
Platzierung der Angebotsaktien (wie in E.3 definiert) zum
51
Mittelwert der Preisspanne (wie in E.3 definiert), wird der
Marktwert der Gesellschaft bei € 537.500 Tausend liegen
(Angebotspreis (wie in E.3 definiert) von € 21,50 multipliziert mit
25.000 Tausend Aktien der EDAG Engineering Group AG). Um den
Einbringungswert der EDAG Engineering Schweiz Sub-Holding zu
erhalten, wird dieses Produkt um das Nettoreinvermögen der
Gesellschaft vor der Einbringung reduziert werden (ungefähr € 340
Tausend; dieser Wert errechnet sich aus dem Aktienkapital der
Gesellschaft in Höhe von € 920 Tausend zum 2. November 2015
minus der Gründungskosten der Gesellschaft von € 80 Tausend,
wie in der Eröffnungsbilanz der Gesellschaft vom 2. November
2015 gezeigt, sowie abzüglich der erwarteten Einbringungskosten
in Höhe von ungefähr € 500 Tausend). Unter Annahme einer
Platzierung der Angebotsaktien (wie in E.3 definiert) zum
Mittelwert der Preisspanne (wie in E.3 definiert), wird der
Einbringungswert daher ungefähr € 537.160 Tausend betragen.
Keine andere Wertermittlung wird für Zwecke der Ermittlung des
Einbringungswertes durchgeführt werden. Der Einbringungswert
unterliegt Veränderungen und wurde keiner Prüfung unterzogen.
Zwischen dem Datum ihrer Gründung, dem 2. November 2015,
und dem Datum dieses Prospekts ist keine wesentliche
Veränderung der Finanzlage oder der Handelsposition der
Gesellschaft eingetreten. Zwischen dem 30. September 2015 und
dem Datum dieses Prospekts ist keine wesentliche Veränderung
der Finanzlage oder der Handelsposition der EDAG Engineering
Schweiz Sub-Holding AG und ihrer konsolidierten
Tochtergesellschaften eingetreten. Für die EDAG Engineering
Schweiz Sub-Holding AG ist in diesem Prospekt der ungeprüfte
verkürzte Konzern-Zwischenabschluss aufgenommen.
Zum Datum dieses Prospekts, hat die Gesellschaft noch keine
Anteile an der EDAG Engineering Schweiz Sub-Holding AG
erworben und ist daher noch nicht Eigentümerin des in diesem
Prospekt beschriebenen Geschäfts. Die Gesellschaft wird alle
Anteile an der EDAG Engineering Schweiz Sub-Holding AG im
Wege der Einbringung, welche wie oben in B.3 beschrieben
gleichzeitig mit der Festlegung des Angebotspreises (wie in
E.3 definiert) für die Angebotsaktien (wie in E.3 definiert)
stattfinden wird, erwerben.
B.8
Ausgewählte
wesentliche
Pro-formaFinanzinformationen.
Entfällt. Die Gesellschaft hat keine
Pro-forma-Finanzinformationen erstellt.
B.9
Gewinnprognosen
oder
-schätzungen.
Entfällt. Die Gesellschaft hat keine Gewinnprognosen oder
-schätzungen abgegeben.
B.10
Beschränkungen
im Bestätigungsvermerk zu den
historischen
Finanzinformationen.
Entfällt. Die Bestätigungsvermerke für die in diesem Prospekt
enthaltenen historischen Finanzinformationen wurden jeweils
uneingeschränkt erteilt.
52
B.11
Nichtausreichen
des
Geschäftskapitals
des Emittenten zur
Erfüllung
bestehender
Anforderungen.
Entfällt. Die Gesellschaft ist der Auffassung, dass die Gruppe in
der Lage ist, sämtliche Zahlungsverpflichtungen zu erfüllen, die
in den nächsten mindestens zwölf Monaten fällig werden.
ABSCHNITT C – WERTPAPIERE
C.1
Art und Gattung
der angebotenen
und/oder zum
Handel
zuzulassenden
Wertpapiere.
Auf den Inhaber lautende Aktien (Inhaberaktien) mit einem
Nennbetrag von CHF 0,04 und mit voller
Gewinnanteilberechtigung für das zum 31. Dezember 2015
endende Geschäftsjahr und alle darauffolgenden Geschäftsjahre.
Wertpapierkennung.
Wertpapier-Kenn-Nummer (WKN): A143NB
Börsenkürzel: ED4
C.2
Währung.
Unsere Aktien sind in Schweizer Franken denominiert. Unsere
operative Währung ist der Euro und unsere Aktien werden in
Euro gehandelt werden.
C.3
Zahl der
ausgegebenen
und voll
eingezahlten
Aktien.
Am 2. November 2015, dem Gründungsdatum der Gesellschaft,
betrug das Aktienkapital der Gesellschaft CHF 1.000 Tausend
(entspricht € 920 Tausend basierend auf einem Umrechnungskurs
von CHF 1,09 am 2. November 2015 wie in der geprüften
Eröffnungsbilanz der Gesellschaft vom 2. November 2015
gezeigt), eingeteilt in 25.000 Tausend Inhaberaktien mit einem
Nennbetrag von CHF 0,04. Das Aktienkapital ist vollständig
eingezahlt. Zum Datum dieses Prospekts entspricht das
Aktienkapital dem Tag der Gründung der Gesellschaft.
Die Aktien der Gesellschaft werden in einer Globalurkunde
verbrieft werden, die bei Clearstream hinterlegt werden wird.
Mit Hinterlegung der Globalurkunde und Gutschrift der Aktien
im Clearing-Konto bei Clearstream werden sämtliche Aktien der
Gesellschaft zu Bucheffekten gemäß dem Schweizerischen
Bucheffektengesetz.
C.4
Nennwert der
Aktien.
Jede Aktie der Gesellschaft hat einen Nennwert von CHF 0,04.
Beschreibung der
mit den
Wertpapieren
verbundenen
Rechte.
Jede Aktie der Gesellschaft gewährt in der Generalversammlung
der Gesellschaft eine Stimme. Beschränkungen des Stimmrechts
bestehen nicht. Die Aktien der Gesellschaft sind für das zum
31. Dezember 2015 endende Geschäftsjahr voll
gewinnanteilberechtigt.
53
C.5
Beschreibung aller
etwaigen
Beschränkungen
für die freie
Übertragbarkeit
der Wertpapiere.
Entfällt. Die den Anlegern angebotenen und an diese zu
übertragenden Aktien der Gesellschaft sind in Übereinstimmung
mit den gesetzlichen Anforderungen für auf Inhaber lautende
Aktien frei übertragbar.
C.6
Antrag auf
Zulassung der
Wertpapiere zum
Handel an einem
geregelten Markt
und Nennung der
geregelten
Märkte, an denen
die Wertpapiere
gehandelt werden
sollen.
Die Gesellschaft wird die Zulassung der Aktien der Gesellschaft
zum Handel auf dem regulierten Markt der Frankfurter
Wertpapierbörse mit gleichzeitiger Zulassung zum Teilbereich des
regulierten Marktes mit weiteren Zulassungsfolgepflichten (Prime
Standard) am oder um den 23. November 2015 beantragen. Der
Zulassungsbeschluss für die Aktien der Gesellschaft wird
voraussichtlich am 1. Dezember 2015 erteilt. Der Handel mit den
Aktien der Gesellschaft an der Frankfurter Wertpapierbörse wird
voraussichtlich am 2. Dezember 2015 beginnen.
C.7
Dividendenpolitik.
Derzeit plant die Gesellschaft, in Abhängigkeit von der Ertragsund Finanzlage der EDAG, zukünftig Dividenden in Höhe von ca.
50% des konsolidierten Gewinns der entsprechenden Periode
auszuschütten.
Jeder künftige Beschluss zur Ausschüttung von Dividenden wird in
Übereinstimmung mit geltendem Recht gefasst werden und wird
unter anderem von der Ertrags- und Finanzlage der Gesellschaft,
von vertraglichen Beschränkungen, der Zustimmung der
Aktionäre und vom Kapitalbedarf der Gesellschaft abhängen. Die
künftige Fähigkeit der Gesellschaft zur Zahlung von Dividenden
kann durch die Bedingungen bestehender und zukünftiger
Verbindlichkeiten beschränkt sein. Die Gesellschaft kann
Ausschüttungen in Form von Ausschüttungen aus
Kapitalrücklagen soweit die Gesellschaft über ausreichend
ausschüttungsfähigen Gewinn aus vergangenen Geschäftsjahren
(Bilanzgewinn) oder freie Reserven verfügt. Der Verwaltungsrat
ist, vorbehaltlich des Rechts der Aktionäre anderweitig zu
entscheiden, dazu ermächtigt, die Dividendenpolitik und das
Verhältnis der Dividendenauszahlungen jederzeit zu ändern,
insbesondere, falls unvorhergesehene Ereignisse eintreten, die
seiner Einschätzung nach ein vernünftiges Maß von Liquidität und
Kapitalausstattung sowie unserer finanziellen Ziele und unserer
Strategie beeinträchtigen würden. Dividenden und andere
Ausschüttungen (vorbehaltlich bestimmter Bedingungen, mit
Ausnahme von Ausschüttungen aus Kapitalrücklagen oder von
Kapitalherabsetzungen der Gesellschaft im Nominalwert),
unterliegen einer Verrechnungssteuer in der Schweiz.
ABSCHNITT D – RISIKEN
D.1
Zentrale Risiken,
die dem
Emittenten oder
seiner Branche
eigen sind.
Eine Investition in die Aktien der Gesellschaft ist mit einer Reihe
von Risiken verbunden. Potenzielle Anleger sollten vor der
Entscheidung über eine Investition in Aktien der Gesellschaft die
nachfolgend beschriebenen Risiken sowie alle sonstigen in diesem
Prospekt enthaltenen Informationen sorgfältig prüfen. Die
folgenden Risiken könnten alleine oder zusammen mit
54
zusätzlichen Risiken und Unwägbarkeiten, die uns derzeit nicht
bekannt sind oder die wir derzeit für unwesentlich halten, unser
Geschäft sowie unsere Vermögens-, Finanz- und Ertragslage
wesentlich nachteilig beeinflussen. Im Fall des Eintritts einzelner
oder aller dieser Risiken könnte der Marktpreis der Aktien der
Gesellschaft sinken und potenzielle Anleger könnten ihre
Investition ganz oder teilweise verlieren.
Die Reihenfolge, in der die folgenden Risiken dargestellt sind,
trifft keine Aussage über die Wahrscheinlichkeit, mit der diese
Risiken tatsächlich eintreten, können, oder die Bedeutung oder
Höhe dieser Risiken, und auch nicht darüber, in welchem Maße
sich diese Risiken nachteilig auf unser Geschäft sowie unsere
Vermögens-, Finanz- und Ertragslage auswirken könnten.
Geschäftsbezogene Risiken
Š
Ungünstige Entwicklungen im wirtschaftlichen Umfeld könnten
zu Kostensparmaßnahmen von Seiten unserer Kunden führen
und deren F&E Budget und den Umfang an
Ingenieursdienstleistungen, die an externe Serviceanbieter wie
uns ausgelagert werden, reduzieren, was sich wiederum
nachteilig auf unser Geschäft sowie unsere Vermögens-, Finanzund Ertragslage auswirken.
Š
Verkaufszahlen in der Automobilindustrie sind periodisch und
hängen unter anderem von den allgemeinen wirtschaftlichen
Bedingungen sowie von Kundenausgaben und –vorlieben ab.
Aus diesem Grund könnte die Nachfrage nach unseren
Ingenieursdienstleistungen ebenfalls schwanken und
periodische Abschwünge in der Automobilindustrie könnten
sich nachteilig auf unsere Ertragslage auswirken.
Š
Ein wesentlicher Teil unserer Umsatzerlöse stammt von einer
beschränkten Anzahl an Kunden, wobei unsere fünf größten
Kundenvertriebssparten ungefähr zwei Drittel unserer
Umsatzerlöse in dem zum 31. Dezember 2014 endenden
Geschäftsjahr beitrugen. In der gleichen Periode wurden mehr
als die Hälfte unserer Umsätze durch die Volkswagen und BMW
Gruppen beigesteuert, wobei die Volkswagen Gruppe ca. 38%
unserer Umsätze generierte. Der Verlust der Hauptkunden oder
ein erheblicher Umsatzrückgang bei diesen Kunden könnte
unser Ergebnis erheblich belasten.
Š
Unser Geschäft und unsere Profitabilität hängen von dem
Budget ab, das die Automobilhersteller für F&E Aktivitäten und
für das Auslagern von Ingenieursdienstleistungen zur
Verfügung stellen. Ein Rückgang bei der Auslagerung von
Ingenieurstätigkeiten oder eine Wiedereinlagerung von
Tätigkeiten durch unsere Kunden könnte unsere Profitabilität
erheblich beeinträchtigen.
Š
Wenn unsere Kapazitäten im Bereich
Fahrzeugingenieursdienstleistungen die tatsächliche Nachfrage
nach unseren Leistungen übersteigen und insbesondere
Verträge aufgeschoben oder gekündigt werden, laufen wir
Gefahr, dass unsere Personalkapazitäten und unsere
Betriebsstätten nicht ausgelastet sind und dass die Preise für
die von uns angebotenen Ingenieursdienstleistungen sinken,
was unsere Ertragslage beeinträchtigen könnte.
55
Š
Kostenüberschreitungen bei komplexen Projekten, falls wir die
erforderlichen Personal-, Zeit- und anderen Ressourcen
unterschätzen, oder zusätzliche Zahlungsverpflichtungen aus
langfristigen Verträgen und Gesamtprojekten, falls wir
Termine, Qualitätsanforderungen oder andere vereinbarte
Parameter nicht einhalten, könnten sich nachteilig auf uns
auswirken.
Š
Wir sind Risiken in Verbindung mit den am Markt bestehenden
Trends und Entwicklungen ausgesetzt, die den von
Automobilherstellern und im Automobilbereich tätigen OEMs
verkauften Fahrzeug-Mix beeinflussen könnten. Sollten wir
nicht in der Lage sein, angemessene Strategien zu entwickeln
um auf neue Markttrends und technische Standards
einzugehen, könnte sich dies nachteilig auf unser Geschäft
sowie unsere Vermögens-, Finanz- und Ertragslage auswirken.
Š
Der Markt für Fahrzeugingenieursdienstleistungen in der
Automobilindustrie zeichnet sich durch intensiven Wettbewerb
aus, was das Umsatzvolumen bei unseren Leistungen und
Produkten verringern oder unsere Verkaufspreise anhaltend
unter Druck setzen könnte.
Š
Unsere Fähigkeit, unsere Umsatzerlöse und unsere Profitabilität
zu erhöhen, steht in direktem Verhältnis zu der Anzahl von
Ingenieuren, die wir beschäftigen. Sollten es uns nicht
gelingen, eine ausreichende Anzahl an gut qualifizierten
Ingenieuren für uns zu gewinnen oder solches Personal zu
behalten, könnte sich diese in erheblichem Ausmaß nachteilig
auf unsere Marktstellung sowie unsere Vermögens-, Finanzund Ertragslage auswirken.
Š
Fehlfunktionen bei Produkten und Produktlinien, die
entsprechend unseren Fahrzeugingenieursdienstleistungen
hergestellt wurden, könnten Ansprüche Dritter gegenüber
unseren Kunden, Produktrückrufe und Produktionsausfälle bei
unseren Kunden nach sich ziehen. Dies könnte zu
Gewährleistungsansprüchen gegenüber uns führen, die sich
wiederum nachteilig auf unser Geschäft sowie unsere
Vermögens-, Finanz- und Ertragslage auswirken könnte.
Š
Wir sind unter Umständen nicht in der Lage, frühere oder
künftige Übernahmen oder Joint-Ventures erfolgreich zu
integrieren oder die daraus erwarteten Vorteile zu erzielen.
Zudem sind wir dem Risiko möglicher Gewährleistungs- oder
Haftungsansprüche aus der Veräußerung früherer
Geschäftseinheiten oder Joint-Ventures ausgesetzt. Die
Realisierung dieser Risiken könnte sich nachteilig auf unser
Geschäft sowie unsere Vermögens-, Finanz- und Ertragslage
auswirken.
Š
Wir haben erhebliche Pensionsverpflichtungen und ein Anstieg
im Kapitalwert unserer Pensionsverpflichtungen, zusätzliche
Rückstellungsanforderungen oder eine Wertminderung des
Fondsvermögens, das unsere Pensionsverpflichtungen abdeckt,
könnte unsere Finanzlage beeinträchtigen.
Š
Unsere Konzernbilanz enthält in wesentlichem Umfang
immaterielle Vermögensgegenstände, deren Wert sinken und
sich dadurch nachteilig auf unser Geschäft sowie unsere
56
D.3
Zentrale Risiken,
die den
Wertpapieren
eigen sind.
Š
Wir sind verschiedenen Risiken ausgesetzt, die sich aus neuen
Rechtsvorschriften zur Verhinderung von Missbräuchen bei der
Arbeitnehmerüberlassung und Scheinselbständigkeit ergeben.
Diese Risiken umfassen zusätzliche Zahlungsverpflichtungen,
Strafen und das Erfordernis, die Basis unseres Geschäftsmodell
zu ändern, was sich nachteilig auf unser Geschäft sowie unsere
Š
Es sind gerichtliche Verfahren anhängig, die nach dem
Squeeze-out der Minderheitsaktionäre der Rücker AG gegen
uns angestrengt wurden. Sollten wir dazu verpflichtet werden,
den Minderheitsaktionären eine zusätzliche Abfindung zu
zahlen, könnte sich dies nachteilig auf unser Geschäft sowie
unsere Vermögens-, Finanz- und Ertragslage auswirken.
Aktien- und angebotsbezogene Risiken
Š
Auch nach dem Angebot wird unser Abgebender Aktionär
einen wesentlichen Einfluss auf die Gesellschaft ausüben und
dadurch, unter anderem, erheblichen Einfluss auf
Angelegenheiten haben, die der Generalversammlung der
Gesellschaft zur Abstimmung vorgelegt werden sowie auf
Kontrollwechselangelegenheiten, und seine Interessen decken
sich möglicherweise nicht mit den Interessen unserer übrigen
Aktionäre.
Š
Sollte eine Person künftig die Kontrolle über die Gesellschaft
übernehmen, könnten unsere Aktionäre eine bei einem
Kontrollwechsel auf ihre Aktien anfallende Prämie
möglicherweise nicht realisieren, da weder die deutschen noch
die schweizerischen Regelungen zu Pflichtangeboten auf uns
anwendbar sind .
Š
Unsere Fähigkeit zur Zahlung von Dividenden hängt unter
anderem von unserer Finanz- und Ertragslage ab.
Š
Unsere Aktien wurden bisher nicht an einer Börse notiert, und
es kann nicht gewährleistet werden, dass sich für unsere Aktien
ein aktiver und liquider Markt entwickeln wird. Unter
Umständen sind die Anleger daher nicht in der Lage, ihre
Aktien der Gesellschaft schnell oder über dem Angebotspreis
zu verkaufen.
Š
Unser Aktienkurs könnte als Folge einer Vielzahl von Faktoren,
einschließlich, unter anderem, Schwankungen der tatsächlichen
oder prognostizierten Ertragslage und Änderungen
prognostizierter Einnahmen, erheblich schwanken, und wenn
unser Aktienkurs sinkt, könnten die Anleger ihre Anlage ganz
oder teilweise verlieren.
Š
Wenn unser Abgebender Aktionär oder andere Aktionäre der
Gesellschaft einen Verkauf einer bedeutenden Anzahl unserer
Aktien auf dem Aktienmarkt verkaufen, könnte der Aktienkurs
unserer Aktien sinken.
ABSCHNITT E – ANGEBOT
E.1
Gesamtnettoerlöse. Die Gesellschaft wird keinen Erlös aus dem Angebot (wie in E.3
definiert), der sich aus dem Verkauf der Angebotsaktien (wie in
E.3 definiert) ergibt, erhalten. Der Abgebende Aktionär wird
sämtliche Nettoerlöse aus dem Verkauf der Basisaktien und dem
57
Verkauf der Mehrzuteilungsaktien (beides wie in E.3 definiert),
falls und soweit die Greenshoe-Option (wie in E.3 definiert) im
Zusammenhang mit den Mehrzuteilungsaktien ausgeübt wird,
erhalten.
Unter der Annahme, dass (i) alle Basisaktien (8.750.000 Aktien)
(wie in E.3 definiert) und (ii) alle Mehrzuteilungsaktien zum
Mittelwert der für das Angebot der Angebotsaktien (wie in E.3
definiert) festgesetzten Preisspanne (wie in E.3 definiert) platziert
werden und (iii) hinsichtlich der Mehrzuteilungsaktien (wie in
E.3 definiert) die Greenshoe-Option (wie in E.3 definiert) voll
ausgeübt wird, würde sich der Gesamtnettoerlös des Abgebenden
Aktionärs nach Schätzung der Gesellschaft unter den
vorstehenden Annahmen auf ca. € 202,06 Mio. belaufen.
Geschätzte
Gesamtkosten des
Angebots und der
Börsenzulassung,
einschließlich der
geschätzten
Kosten, die dem
Anleger vom
Emittenten in
Rechnung gestellt
werden.
Die Kosten die für das Angebot der Angebotsaktien (wie in
E.3 definiert) und die Börsenzulassung aller Aktien der
Gesellschaft entstehen, werden sich (ohne an die
Konsortialbanken zahlbare Übernahme- und
Platzierungsprovisionen) voraussichtlich insgesamt auf ca.
€ 10,83 Mio. belaufen. Davon werden ca. € 7,25 Mio. vom
Abgebenden Aktionär und ca. € 3,58 Mio. von der Gesellschaft
getragen.
Unter der Annahme, dass (i) der Angebotspreis
(wie in E.3 definiert) dem Mittelwert der Preisspanne (wie in
E.3 definiert) entspricht, (ii) die maximale Anzahl an Basisaktien
und Mehrzuteilungsaktien (wie in E.3 definiert) platziert wird,
(iii) die Greenshoe-Option hinsichtlich der Mehrzuteilungsaktien
(wie in E.3 definiert) vollumfänglich ausgeübt wird, und (iv) die im
Ermessen stehende Gebühr von bis zu ca. € 1,62 Mio. in voller
Höhe gezahlt wird, werden sich die an die Konsortialbanken
zahlbaren Provisionen auf ca. € 7,03 Mio. belaufen. Diese
Provisionen werden vom Abgebenden Aktionär getragen.
Unter den denselben Annahmen werden sich die Gesamtkosten
des Angebots und der Börsenzulassung, die von der Gesellschaft
und dem Abgebenden Aktionär (inklusive an die
Konsortialbanken zu zahlenden Gebühren) zu tragen sind,
voraussichtlich auf ca. € 17,86 Mio. belaufen. Davon werden ca.
€ 14,28 Mio. vom Abgebenden Aktionär und ca. € 3,58 Mio. von
der Gesellschaft getragen
Den Anlegern werden von der Gesellschaft oder den
Konsortialbanken im Zusammenhang mit deren Rolle als
Konsortialbanken keine Kosten in Rechnung gestellt. Anlegern
werden die üblichen Transaktions- und Abwicklungskosten,
welche ihr kontoverwaltendes Finanzinstitut in Rechnung stellt,
tragen müssen.
Die Schweizer Umsatzabgabe in Bezug auf den Verkauf der
Basisaktien und der Mehrzuteilungsaktien, soweit diese anfällt,
wird nicht vom Abgebenden Aktionär erstattet.
E.2a
Gründe für das
Angebot.
Die Gesellschaft beabsichtigt die Zulassung der Aktien der
Gesellschaft zum Handel an dem regulierten Markt der
Frankfurter Wertpapierbörse und gleichzeitige Zulassung zum
Teilbereich des regulierten Marktes mit weiteren
Zulassungsfolgepflichten (Prime Standard) zu erhalten, um sich
einen besseren Zugang zu den Kapitalmärkten zu verschaffen.
58
Der Abgebende Aktionär bietet die Aktien an, um seine
Beteiligung an der Gesellschaft teilweise zu veräußern.
E.3
Zweckbestimmung
der Erlöse,
geschätzte
Nettoerlöse.
Die Gesellschaft wird keine Erlöse aus diesem Angebot (wie in E.3
definiert) erhalten.
Angebotskonditionen.
Das Angebot bezieht sich auf den Verkauf von 10.062.500
Inhaberaktien der Gesellschaft mit einem Nennbetrag von CHF
0,04 und voller Gewinnanteilberechtigung für das zum
31. Dezember 2015 endende Geschäftsjahr (das „Angebot”),
bestehend aus:
Š
8.750.000 Inhaberaktien mit einem Nennbetrag von CHF 0,04
(die “Basisaktien”) aus den Beteiligungen des Abgebenden
Aktionärs; und
Š
1.312.500 Inhaberaktien mit einem Nennbetrag von CHF 0,04
im Zusammenhang mit einer möglichen Mehrzuteilung (die
“Mehrzuteilungsaktien” und, zusammen mit den Basisaktien,
die “Angebotsaktien”).
Das Angebot besteht aus erstmaligen öffentlichen Angeboten in
der Bundesrepublik Deutschland (“Deutschland”) und im
Großherzogtum Luxemburg (“Luxemburg”) und
Privatplatzierungen in bestimmten Ländern außerhalb von
Deutschland und Luxemburg. In den Vereinigten Staaten von
Amerika (die “Vereinigten Staaten”) werden die Aktien der
Gesellschaft nur qualifizierten institutionellen Käufern (Qualified
Institutional Buyers), wie in Rule 144A des US-amerikanischen
Securities Act von 1933 in der jeweils geltenden Fassung (der
“Securities Act”) definiert, angeboten und verkauft. Außerhalb
der Vereinigten Staaten werden die Aktien der Gesellschaft nur
im Rahmen von Offshore-Transaktionen nach Maßgabe der
Regulation S unter dem Securities Act angeboten und verkauft.
Angebotszeitraum. Der Zeitraum, in dem Anleger ihre Kaufangebote für die
Angebotsaktien abgeben können, beginnt voraussichtlich am
23. November 2015 und endet voraussichtlich am 1. Dezember
2015 (der “Angebotszeitraum”). Am letzten Tag des
Angebotszeitraums können Kaufangebote (i) von Privatanlegern
bis 12:00 Uhr (Mitteleuropäische Zeit) (“MEZ”) bzw. (ii) von
institutionellen Anlegern bis 15:00 Uhr (MEZ) abgegeben werden.
Preisspanne und
Angebotspreis.
Die Preisspanne, innerhalb derer Kaufangebote abgegeben
werden können, liegt zwischen € 19,00 und € 24,00 je
Angebotsaktie (die “Preisspanne”).
Der Platzierungspreis (der “Angebotspreis”) und die endgültige
Anzahl der im Rahmen des Angebots zu platzierenden
Angebotsaktien stehen zum Datum dieses Prospekts noch nicht
fest; sie werden von der Gesellschaft, dem Abgebenden Aktionär
und den Konsortialbanken voraussichtlich am 1. Dezember 2015
auf Grundlage der von Anlegern abgegebenen Kaufangebote, die
in einem im Rahmen eines Bookbuilding-Verfahrens erstellten
Orderbuchs gesammelt werden, gemeinsam festgelegt. Der
Angebotspreis und die endgültige Anzahl der im Rahmen des
59
Angebots platzierten Angebotsaktien (d. h. die Ergebnisse des
Angebots) werden voraussichtlich am 1. Dezember 2015 in einer
Ad-hoc-Mitteilung über ein elektronisches Informationssystem
und auf der Website der Gesellschaft veröffentlicht. Sollte sich das
Platzierungsvolumen als unzureichend zur Erfüllung sämtlicher
Kaufaufträge zum Platzierungspreis erweisen, behalten sich die
Konsortialbanken das Recht zur Ablehnung oder zur nur
teilweisen Annahme von Kaufaufträgen vor.
Änderung der
Angebotskonditionen.
Die Gesellschaft und der Abgebende Aktionär behalten sich das
Recht vor, gemeinsam mit den Joint Global Coordinators die
Gesamtzahl der Angebotsaktien zu erhöhen oder herabzusetzen,
die obere und/oder untere Grenze der Preisspanne zu erhöhen
oder zu senken und/oder den Angebotszeitraum zu verlängern
oder zu verkürzen. Durch Änderungen der Anzahl der
Angebotsaktien, Änderungen der Preisspanne oder die
Verlängerung oder Verkürzung des Angebotszeitraums werden
bereits abgegebene Kaufangebote nicht unwirksam. Falls eine
solche Änderung die Veröffentlichung eines Nachtrags zum
Prospekt erforderlich macht, haben Anleger, die bereits vor der
Veröffentlichung des Nachtrags ein Kaufangebot abgegeben
haben, gemäß dem Wertpapierprospektgesetz das Recht, dieses
Kaufangebot innerhalb von zwei Werktagen nach der
Veröffentlichung des Nachtrags zu widerrufen. Anstelle des
Widerrufs der vor der Veröffentlichung des Nachtrags
abgegebenen Kaufangebote können Anleger innerhalb von zwei
Werktagen nach der Veröffentlichung des Nachtrags ihre
Kaufangebote abändern oder neue limitierte oder unlimitierte
Kaufangebote abgeben. Wenn und soweit die
Angebotskonditionen geändert werden, wird die betreffende
Änderung über elektronische Medien (wie Reuters oder
Bloomberg) und, sofern nach dem Wertpapierhandelsgesetz oder
Wertpapierprospektgesetz erforderlich, als Ad-hoc-Mitteilung
über ein elektronisches Informationssystem, auf der Website der
Gesellschaft und als Nachtrag zum Prospekt veröffentlicht.
Anleger, die Kaufangebote abgegeben haben, werden nicht
einzeln benachrichtigt. Unter bestimmten Umständen können die
Konsortialbanken den Übernahmevertrag in Bezug auf das
Angebot und den Verkauf der Angebotsaktien, den die
Gesellschaft und der Abgebende Aktionär im Zusammenhang mit
dem Angebot voraussichtlich am 20. November 2015 abschließen
werden, (der “Übernahmevertrag”) auch nach Aufnahme des
Handels der Aktien der Gesellschaft am regulierten Markt der
Frankfurter Wertpapierbörse kündigen.
Bevorrechtigte
Zuteilung.
Allen Mitarbeitern der EDAG Engineering GmbH und deren
Tochtergesellschaften sowie Mitgliedern der Geschäftsführung
und des Verwaltungsrats der Gesellschaft, die in Deutschland
beschäftigt und steuerrechtlich angesiedelt sind, werden bis zu
4,99 % der Angebotsaktien zum Angebotspreis im
Zusammenhang mit dem Angebot auf Basis einer bevorrechtigten
Zuteilung angeboten werden.
Lieferung und
Zahlung.
Die Lieferung der Angebotsaktien erfolgt voraussichtlich am
4. Dezember 2015 gegen Zahlung des Angebotspreises und
üblicher Wertpapiergebühren. Die Angebotsaktien werden den
Aktionären als Bucheffekte nach Schweizer Recht zur Verfügung
gestellt.
60
Stabilisierungsmaßnahmen,
Mehrzuteilung
und
Greenshoe-Option.
Im Zusammenhang mit der Platzierung der Angebotsaktien
fungiert die Deutsche Bank, für Rechnung der Konsortialbanken,
als Stabilisierungsmanager (der “Stabilisierungsmanager”) und
kann als solcher in Übereinstimmung mit den rechtlichen
Bestimmungen (§ 20a Abs. 3 Wertpapierhandelsgesetz in
Verbindung mit Verordnung (EG) Nr. 2273/2003 der Kommission
vom 22. Dezember 2003) Mehrzuteilungen vornehmen und
Stabilisierungsmaßnahmen ergreifen, um den Marktpreis der
Aktien der Gesellschaft zu stützen und dadurch einem etwaigen
Verkaufsdruck entgegenzuwirken.
Der Stabilisierungsmanager ist nicht verpflichtet,
Stabilisierungsmaßnahmen zu ergreifen. Daher kann auch keine
Gewähr dafür übernommen werden, dass
Stabilisierungsmaßnahmen ergriffen werden. Soweit
Stabilisierungsmaßnahmen ergriffen werden, können diese
jederzeit ohne Vorankündigung eingestellt werden. Derartige
Stabilisierungsmaßnahmen können ab dem Zeitpunkt der
Aufnahme der Börsennotierung der Aktien der Gesellschaft am
regulierten Markt der Frankfurter Wertpapierbörse ergriffen
werden und müssen spätestens am dreißigsten Kalendertag nach
diesem Zeitpunkt beendet sein (der “Stabilisierungszeitraum”).
Diese Maßnahmen könnten dazu führen, dass der Börsenkurs der
Aktien der Gesellschaft höher ist, als er es ohne diese Maßnahmen
wäre. Darüber hinaus kann sich vorübergehend ein Börsenkurs
auf einem Niveau ergeben, das nicht von Dauer ist.
Bei möglichen Stabilisierungsmaßnahmen können Anlegern als
Teil der Zuteilung der zu platzierenden Aktien zusätzlich zu den
Basisaktien bis zu 1.312.500 zusätzliche Aktien der Gesellschaft
(Mehrzuteilungsaktien) zugeteilt werden (die “Mehrzuteilung”).
Zum Zwecke einer möglichen Mehrzuteilung werden dem
Stabilisierungsmanager für Rechnung der Konsortialbanken bis zu
1.312.500 Aktien aus der Beteiligung des Abgebenden Aktionärs
in Form eines Wertpapierdarlehens zur Verfügung gestellt; die
Anzahl der Mehrzuteilungsaktien wird 15 % der Anzahl der
Basisaktien nicht überschreiten. Im Zusammenhang mit dem
Wertpapierdarlehen wird der Abgebende Aktionär den
Konsortialbanken eine Option zum Erwerb einer der Anzahl der
Mehrzuteilungsaktien entsprechenden Anzahl an Aktien zum
Angebotspreis abzüglich vereinbarter Provisionen einräumen (die
“Greenshoe-Option”) statt die unter dem Wertpapierdarlehen
geliehenen Aktien rückabzuwicklen. Die Greenshoe-Option endet
am 1. Januar 2016.
Der Stabilisierungsmanager hat das Recht, die Greenshoe-Option
bis zu dem Umfang der ursprünglichen Mehrzuteilungen
auszuüben. Dabei ist die Anzahl der Aktien, für welche die
Greenshoe-Option ausgeübt werden kann, um die Anzahl
derjenigen Aktien reduziert, die von dem Stabilisierungsmanager
am Datum der Ausübung der Greenshoe-Option gehalten werden
und von ihm im Zusammenhang mit Stabilisierungsmaßnahmen
erworben wurden.
Nach Ende des Stabilisierungszeitraums wird innerhalb einer
Woche in verschiedenen Medien mit Verbreitung im gesamten
61
EWR bekannt gemacht, ob Stabilisierungsmaßnahmen ergriffen
wurden, wann die Kursstabilisierung begonnen und beendet
wurde sowie innerhalb welcher Kursspanne die
Stabilisierungsmaßnahmen erfolgten. Letzteres wird für jeden
Termin, zu dem Kursstabilisierungsmaßnahmen ergriffen wurden,
bekannt gegeben. Die Ausübung der Greenshoe-Option, der
Zeitpunkt der Ausübung sowie die Anzahl und Art der
betroffenen Aktien der Gesellschaft werden unverzüglich in
derselben Weise bekannt gemacht.
E.4
Wesentliche
Interessen an der
Emission/dem
Angebot,
einschließlich
kollidierender
Interessen.
Es bestehen im Zusammenhang mit dem Angebot keine
wesentlichen Interessenkonflikte.
Im Zusammenhang mit dem Angebot und der Zulassung der
Aktien der Gesellschaft zum Handel sind die Konsortialbanken ein
vertragliches Verhältnis mit der Gesellschaft und dem
Abgebenden Aktionär eingegangen.
Die Konsortialbanken handeln bei dem Angebot im Auftrag der
Gesellschaft und des Abgebenden Aktionärs und koordinieren die
Strukturierung und Durchführung des Angebots. Zudem sind die
Joint Global Coordinators beauftragt, als Designated Sponsors für
die Aktien der Gesellschaft zu handeln, und die Deutsche Bank
wurde als Zahlstelle bestellt. Bei erfolgreicher Durchführung des
Angebots erhalten die Konsortialbanken eine Provision. Aufgrund
dieser vertraglichen Vereinbarungen haben die Konsortialbanken
ein finanzielles Interesse an einer erfolgreichen Durchführung des
Angebots.
Zudem kann im Zusammenhang mit dem Angebot jede der
Konsortialbanken bzw. jedes ihrer verbundenen Unternehmen als
Anleger für eigene Rechnung Aktien im Rahmen des Angebots
erwerben und solche Aktien oder damit verbundene Anlagen in
dieser Eigenschaft für eigene Rechnung halten, kaufen oder
verkaufen und solche Aktien oder damit verbundene Anlagen
auch außerhalb des Angebots anbieten oder verkaufen. Zudem
können bestimmte Konsortialbanken oder ihre verbundenen
Unternehmen Finanzierungsvereinbarungen (einschließlich Swaps
oder Differenzkontrakten) mit Anlegern abschließen, in
Verbindung mit denen solche Konsortialbanken (oder ihre
verbundenen Unternehmen) jeweils Aktien der Gesellschaft
erwerben, halten oder veräußern könnten. Keine der
Konsortialbanken beabsichtigt, solche Anlagen oder
Transaktionen in einem weiteren Umfang offenzulegen als
demjenigen, zu dem sie aufgrund gesetzlicher oder
aufsichtsrechtlicher Vorschriften verpflichtet ist, bzw. in einem
weiteren Umfang als sie in diesem Prospekt offengelegt sind.
Einige der Konsortialbanken oder ihre verbundenen
Unternehmen unterhalten derzeit geschäftliche Beziehungen
(einschließlich Darlehensgeschäfte) zu unserer Gruppe oder
erbringen im Rahmen des gewöhnlichen Geschäftsbetriebs
Leistungen für unsere Gruppe oder können in Zukunft weiterhin
solche Beziehungen unterhalten oder Leistungen erbringen.
Darüber hinaus überlegt HORUS Vermögensverwaltungs GbR,
eine Gesellschaft die von Dr. Lutz Mario Helmig kontrolliert wird,
vorbehaltlich einer Zuteilung auf nicht bevorrechtigter Basis, bis
zu 10% der Angebotsaktien im Rahmen des Angebots zu
erwerben. Zum Datum dieses Prospekts hat HORUS
Vermögensverwaltungs GbR noch keine Entscheidung getroffen,
62
ob sie ein Angebot, Aktien zu erwerben, abgeben wird und es
gibt keine Gewissheit, ob HORUS Vermögensverwaltungs GbR
tatsächlich ein solches Angebot abgeben wird. Soweit HORUS
Vermögensverwaltungs GbR Angebotsaktien im Rahmen des
Angebots erwirbt, wird sie den gleichen Lock-up-Beschränkungen
wie der Abgebende Aktionär unterworfen sein (siehe auch E.5
„Lock-up-Vereinbarungen, beteiligte Parteien und Lock-up-Frist“).
Nach Maßgabe der Anstellungsverträge der Mitglieder der
Geschäftsführung der EDAG Engineering GmbH erhält jedes
Mitglied der Geschäftsführung der EDAG Engineering GmbH
einen Bonus in Höhe von € 500 Tausend, entweder in Bar, Aktien
oder in Aktienoptionen, für den Fall dass die EDAG Gruppe vor
dem 31. Dezember 2016 an die Börse geht. Aufgrund dieser
vertraglichen Vereinbarungen haben die Mitglieder der
Geschäftsführung der EDAG Engineering GmbH ein finanzielles
Interesse an der erfolgreichen Durchführung des Angebots.
Dr. Philippe Weber ist ein Mitglied des Verwaltungsrates der
Gesellschaft und ein Managing Partner der Anwaltskanzlei
Niederer Kraft & Frey AG, Zürich, die die Gesellschaft zu Schweizer
Recht im Zusammenhang mit dem Angebot berät.
Der Abgebende Aktionär, dessen CEO Thomas Eichelmann
zugleich der Vorsitzende unseres Verwaltungsrates ist, erhält die
Erlöse aus den Basisaktien sowie der Mehrzuteilungsaktien, soweit
die Greenhoe-Option ausgeübt wird, die im Rahmen des
Angebots verkauft werden. Unter der Annahme einer
vollständigen Platzierung aller Basisaktien und
Mehrzuteilungsaktien zum Mittelwert der Preisspanne und einer
vollumfänglichen Ausübung der Greenshoe-Option sowie nach
Abzug der Gebühren und Provisionen, die im Zusammenhang mit
dem Angebot und der Börsenzulassung vom Abgebenden
Aktionär zu zahlen sind, würden sich der Gesamtnettoerlös des
Abgebenden Aktionärs aus dem Angebot auf ca. € 202,06 Mio.
belaufen. Daher hat der Abgebende Aktionär und seine mittel
und unmittelbaren Anteilseigner ein Interesse an der
Durchführung des Angebots.
E.5
Name der Person/
des
Unternehmens,
die/das das
Wertpapier zum
Verkauf anbietet.
Die Aktien der Gesellschaft werden von den Konsortialbanken
zum Verkauf angeboten.
Lock-upVereinbarungen,
beteiligte Parteien
und Lock-up-Frist.
In dem Übernahmevertrag wird sich die Gesellschaft gegenüber
jeder Konsortialbank dazu verpflichten, dass die Gesellschaft, ihr
Vorstand und ihr Aufsichtsrat für einen Zeitraum, der zum Datum
dieses Prospekts beginnt und 180 Tage nach Lieferung der
Angebotsaktien und Zahlung des Angebotspreises endet, nicht
ohne die vorherige schriftliche Zustimmung der Joint Global
Coordinators
(a) eine Erhöhung des Aktienkapitals der Gesellschaft aus
genehmigtem Kapital, falls vorhanden, ankündigen oder
durchführen werden; oder
(b) der Generalversammlung einen Vorschlag über eine
Erhöhung des Aktienkapitals der Gesellschaft zur
Beschlussfassung vorlegen; oder
63
(c)
Aktien der Gesellschaft oder Wertpapieren, die in Aktien der
Gesellschaft umgewandelt werden können oder
Optionsrechte auf die Aktien der Gesellschaft gewähren,
direkt oder indirekt anzubieten, zu verpfänden, zuzuteilen, zu
emittieren (außer für den Fall, dass dies gesetzlich erforderlich
ist), zu verkaufen, sich vertraglich zu deren Verkauf zu
verpflichten, auf diese Aktien bezogene Kaufoptionen oder
vertragliche Kaufverpflichtungen zu verkaufen, auf diese
Aktien bezogene Verkaufsoptionen zu erwerben, auf diese
Aktien bezogene Kaufoptionen, Kaufrechte oder
Bezugsrechte einzuräumen oder diese Aktien in sonstiger
Weise zu übertragen oder zu veräußern oder Swap- oder
sonstige Vereinbarungen abzuschließen, mit denen das
wirtschaftliche Risiko des Eigentums an Aktien der
Gesellschaft teilweise oder vollständig auf Dritte übertragen
wird; oder
(d) Transaktionen abschließen oder Handlungen durchführen
werden, die den in vorstehend (a) bis (c) genannten
wirtschaftlich ähnlich sind.
Im Rahmen einer separaten Lock-up-Vereinbarung hat sich der
Abgebende Aktionär für einen Zeitraum, der zum Datum dieses
Prospekts beginnt und 180 Tage nach nach Lieferung der
Angebotsaktien und Zahlung des Angebotspreises endet, dazu
verpflichtet, nicht ohne die vorherige schriftliche Zustimmung der
Joint Global Coordinators
(a) Aktien der Gesellschaft, die vom Abgebenden Aktionär oder
einem verbundenen Unternehmen gehalten werden (solche
Aktien, die vom Abgebenden Aktionär oder seinen
verbundenen Unternehmen gehalten werden, nachfolgend
die „Lock-up Aktien“), direkt oder indirekt anzubieten, zu
verpfänden, zuzuteilen, zu verkaufen, sich vertraglich zu
deren Verkauf zu verpflichten, auf diese Aktien bezogene
Kaufoptionen oder vertragliche Kaufverpflichtungen zu
verkaufen, auf diese Aktien bezogene Verkaufsoptionen zu
erwerben, auf diese Aktien bezogene Kaufoptionen,
Kaufrechte oder Bezugsrechte einzuräumen oder diese
Aktien in sonstiger Weise zu übertragen oder zu veräußern;
(b) Swap- oder sonstige Vereinbarungen abzuschließen, mit
denen das wirtschaftliche Risiko des Eigentums an den Lockup Aktien, teilweise oder vollständig auf Dritte übertragen
wird, unabhängig davon, ob eine solche Transaktion nach
vorstehend (a) oder oder diesem (b) gegen Lieferung von
Aktien der Gesellschaft, gegen Barzahlung oder anderweitig
zu erfüllen ist;
(c) eine Registrierung von Aktien der Gesellschaft oder von
Wertpapieren, die in Aktien der Gesellschaft umgewandelt
werden können oder Optionsrechte auf die Aktien der
Gesellschaft gewähren, nach dem Wertpapierrecht der USA
zu verlangen oder ein solches Recht auszuüben;
(d) eine Erhöhung des Aktienkapitals der Gesellschaft
vorzuschlagen (einschließlich durch Auffordern des
Verwaltungsrats, eine Generalversammlung einzuberufen,
oder in sonstiger Weise) oder für eine solche vorgeschlagene
Kapitalerhöhung zu stimmen oder in sonstiger Weise einen
Vorschlag für eine Ausgabe von Wertpapieren, die in Aktien
64
der Gesellschaft umgewandelt werden können oder die
Optionsrechte auf die Aktien der Gesellschaft gewähren, zu
machen, zu unterstützen oder für diesen zu stimmen;
(e) Transaktionen abzuschließen oder Handlungen
durchzuführen, die den in vorstehend (a) bis (d) genannten
Punkten wirtschaftlich ähnlich sind.
Die vorstehenden Lock-up-Beschränkungen für den Abgebenden
Aktionär sind nicht anwendbar in Bezug auf jeglichen
Handlungen des Abgebenden Aktionärs, welche zum Zweck des
Angebots vorgenommen werden. (a), (b) und (e) beschränken
nicht (i) das Angebot, den Verkauf und die Übertragung der
Aktien der Gesellschaft im Rahmen eines Übernahmeangebots
hinsichtlich der Aktien der Gesellschaft gemäß dem
Wertpapiererwerbs- und Übernahmegesetz, (ii) die außerbörsliche
Übertragung der Aktien der Gesellschaft durch den Abgebenden
Aktionär an eines seiner verbundenen Unternehmen, (iii) die
Verteilung der Aktien der Gesellschaft durch den Abgebenden
Aktionär an seine eigenen Aktionäre durch Ausschüttung als
Sachdividende, vorausgesetzt, der jeweilige
Übertragungsempfänger übernimmt durch schriftliche
Bestätigung gegenüber den Joint Global Coordinators die
Verpflichtungen des Abgebenden Aktionärs für die zu diesem
Zeitpunkt verbleibende Laufzeit der Lock-up-Vereinbarung.
erwirbt, wird HORUS Vermögensverwaltungs GbR Lock-upVereinbarungen mit den Konsortialbanken abschließen, die im
Wesentlichen mit der Vereinbarung übereinstimmen, welche der
Abgebende Aktionär und die Konsortialbanken, wie oben
beschrieben, abgeschlossen haben.
Der Abgebende Aktionär wird sich im Übernahmevertrag
gegenüber den Konsortialbanken dazu verpflichten, für einen
Zeitraum von drei Jahren nach Lieferung der Angebotsaktien und
Zahlung des Angebotspreises der Gesellschaft nicht unmittelbar
oder mittelbar und unter Berücksichtigung eines Verkaufs von
Aktien durch HORUS Vermögensverwaltungs GbR oder andere
Gesellschaften, die von Dr. Lutz Mario Helmig kontrolliert werden,
eine Vereinbarung mit einem Dritten zum Verkauf einer Position
an der Gesellschaft einzugehen, die, wie der Abgebende Aktionär
weiß, zu einer beherrschenden Beteiligung des Käufers führt,
sofern der Käufer sich nicht vertraglich verpflichtet, den übrigen
Aktionären der Gesellschaft ein Übernahmeangebot zu einem
Kaufpreis pro Aktie vorzulegen, der mindestens dem vertraglich
zwischen dem Abgebenden Aktionär und dem Käufer
vereinbarten Preis entspricht. Die vertragliche Verpflichtung des
Abgebenden Aktionärs gilt nur, sofern der Käufer verpflichtet
wäre (und keine Befreiung von dieser Verpflichtung zur
Anwendung käme), gegenüber den übrigen Aktionären der
Gesellschaft ein Pflichtangebot abzugeben, wenn das deutsche
Übernahmerecht bei einem solchen Geschäft anwendbar wäre,
und nur solange weder das Schweizer noch das deutsche
65
Übernahmerecht gilt. Unter gewissen Bedingungen sind
Übertragungen auf oder unter verbundenen Unternehmen des
Abgebenden Aktionärs ausgenommen. Die Verpflichtung des
Abgebenden Aktionärs begründet keine Rechte zugunsten
Dritter, und der Abgebende Aktionär ist nicht verpflichtet
sicherzustellen, dass der Käufer seine vertragliche Verpflichtung
zur Abgabe eines Angebots gegenüber den übrigen Aktionären
der Gesellschaft tatsächlich erfüllt.
erwirbt, wird HORUS Vermögensverwaltungs GbR mit den
Konsortialbanken eine Vereinbarung abschließen, wonach HORUS
Vermögensverwaltungs GbR gegenüber den Konsortialbanken im
Hinblick auf einen Verkauf von Aktien der Gesellschaft, der –
unter Berücksichtigung von Aktienverkäufen durch den
Abgebenden Aktionär – zur Kontrolle des Käufers führen würde,
im Wesentlichen dieselbe Verpflichtung eingeht, welche der
Abgebende Aktionär gegenüber den Konsortialbanken, wie oben
beschrieben, eingegangen ist.
E.6
Betrag und
Prozentsatz der
aus dem Angebot
resultierenden
unmittelbaren
Verwässerung.
Für die Berechnung des Nettobuchwerts der Gesellschaft
verwenden wir den konsolidierten, den Aktionären der EDAG
Engineering Schweiz Sub-Holding AG zuzurechnenden
Nettobuchwert zum 30. September 2015. Dieser Wert ist, definiert
als sämtliche Vermögenswerte abzüglich sämtlicher langfristiger
Schulden und Rückstellungen sowie sämtlicher kurzfristiger
Schulden und Rückstellungen der EDAG Engineering Schweiz SubHolding AG wie in der in dem ungeprüften verkürzten KonzernZwischenabschluss der EDAG Engineering Schweiz Sub-Holding
AG für den zum 30. September 2015 endenden
Neunmonatszeitraum enthaltenden ungeprüften verkürzten
konsolidierten Bilanz gezeigt, der zum 30. September 2015
€ 146,51 Mio. betrug.
Nach Abzug der maximalen geschätzten Kosten des Angebots und
der Börsenzulassung, die durch die Gesellschaft getragen werden, in
Höhe von € 3,58 Mio., hätte der Nettobuchwert der Gesellschaft
€ 142,93 Mio. oder € 5,72 per Aktie (basierend auf 25.000 Tausend
Aktien) zum 30. September 2015 betragen. Die unmittelbare
Verwässerung für Parteien, die im Rahmen des Angebots
Angebotsaktien erwerben, beträgt daher € 15,78, oder 73,4 %, per
Aktie (basierend auf 25.000 Tausend Aktien) der Gesellschaft nach
Durchführung des Angebots basierend auf einem Angebotspreis
zum Mittelwert der Preisspanne.
E.7
Schätzung der
Ausgaben, die
dem Anleger vom
Emittenten in
Rechnung gestellt
werden.
Entfällt. Anlegern werden von der Gesellschaft oder den
Konsortialbanken in ihrer Rolle als Konsortialbanken keine
Ausgaben in Rechnung gestellt.
66
A.
RISK FACTORS
An investment in the shares of EDAG Engineering Group AG (the “Company“) is subject to a
number of risks. Prospective investors should read the entire document and carefully consider the
following risks together with all the other information contained in this prospectus prior to
making any investment decision regarding the Company’s shares. The following risks, alone or
together with additional risks and uncertainties not currently known to us, or that we might
currently deem immaterial, could materially adversely affect our business, financial condition and
results of operations. The market price of the Company’s shares could fall if any or all of these
risks were to materialize, in which case prospective investors could lose all or part of their
investment. References in this prospectus, including in this section “Risk Factors”, to “the
Company and its subsidiaries”, “we”, “us”, “our”, “our Group”, “the Group” or “EDAG” refer to
the Company together with EDAG Engineering Schweiz Sub-Holding AG and its consolidated
subsidiaries as it will exist upon consummation of the Contribution (as defined below in “—I. Risks
related to our business—25. The historical financial information presented in this prospectus may
not be comparable and may not be a liable indicator of our future results.”). The Contribution will
occur concurrently with the determination of the Offer Price and before any Offer Shares are
delivered to investors participating in the Offering. As a consequence, the Group is presented in
this prospectus, including in this Section “Risk Factors”, as if the Contribution had already
occurred, unless otherwise indicated. Where historical financial and business information is
presented in this prospectus for the fiscal years ended December 31, 2014, 2013 and 2012 as well
as for the nine-month periods ended September 30, 2015 and 2014, “we”, “us”, “our”, “our
Group”, “the Group” or “EDAG” refers to, as applicable, (a) EDAG Engineering Schweiz SubHolding AG and its consolidated subsidiaries for consolidated financial information as of and for
the nine-month period ended September 30, 2015 or (b) EDAG Engineering GmbH and its
consolidated subsidiaries for consolidated/combined financial information as of and for the fiscal
years ended December 31, 2014, 2013 and 2012 as well as for the nine-month period ended
September 30, 2014.
Prospective investors should carefully consider whether an investment in the Company’s shares is
suitable for them in light of the risks described below, the other information in this prospectus
and their personal circumstances.
The order in which the following risks are presented is not an indication of the likelihood of
these risks actually materializing, or their likely significance or degree, or the scope of any
potential harm to our business, financial condition, or results of operations that might result.
I.
1.
RISKS RELATED TO OUR BUSINESS
Adverse developments in the economic environment could lead to cost cutting measures
by our customers and reduce their R&D budget and the volume of vehicle engineering
services outsourced to external service providers like us, which in turn could have an
adverse impact on our business, financial condition and results of operations.
Our business depends on global macroeconomic and political conditions, in particular in Europe,
the United States, Asia (in particular China) and South America and we are therefore exposed to
risks associated with the performance of the global economy. We render the vast majority of
our vehicle engineering services, including the development of automotive components and
modules, derivative car models and production facilities to customers in the automotive sector,
in particular to major German original equipment manufacturers (“OEMs”) in the passenger car
and commercial vehicle industries. We generated 90% of our sales revenues in the fiscal year
ended December 31, 2014 and 89% of our sales revenues in the nine-month period ended
September 30, 2015 in the European Union.
Demand for the products of our customers, i.e., passenger cars and commercial vehicles, is
directly related to the strength of the global economy. In 2009, for example, the international
automotive industry was particularly affected by the economic and financial crisis. The economic
67
circumstances during the time of the global financial crisis resulted in decreased consumer
demand, which led automotive OEMs to delay the development of certain car models and
reduce their research and development (“R&D”) budgets. This in turn resulted in lower
outsourcing spending for engineering services. In 2012, the European debt crisis negatively
affected European economies, resulting in significantly reduced demand for automobiles in the
second half of 2012. Furthermore, the crisis in the Ukraine has adversely affected demand for
cars in Russia and any further slowdown in the Chinese economy, which now constitutes the
world’s largest market for passenger cars and commercial vehicles, would adversely affect
demand for such products.
We believe that automotive manufacturers typically do not immediately reduce investments in the
development and manufacture of new cars, derivative car models and the improvement of
existing models in response to economic downturns. However, a significant and prolonged
downturn in the global economy and in particular the economies with high demand for motor
vehicles can lead to cost cutting measures by our customers and reduce their R&D budget and the
volume of vehicle engineering services outsourced to external service providers like us.
Accordingly, a significant deterioration in global economic and/or political conditions, in particular
any economic downturn, recession, political crisis or sustained decrease in consumer demand
caused by other factors could result in a decrease in demand for our vehicle engineering services
that we deliver to customers through our three segments Vehicle Engineering, Electrics/Electronics
and Production Solutions and we may not be able to mitigate the effects of any such downturn,
e.g. by long term work package agreements that we strive to enter into with our customers.
Recently, economic stagnation in certain countries in the Eurozone, including Cyprus, Greece,
Italy, Ireland, Spain and Portugal, in part due to the effects of the sovereign debt crisis and
austerity measures implemented to address the crisis in these markets, has adversely affected
consumer demand in such countries. There continue to be concerns that the Eurozone sovereign
debt crisis could worsen, that it may lead to contagion in other, economically more stable
countries, particularly France and Germany, and that national currencies may be reintroduced in
one or more Eurozone countries. Any of these developments, including the departure or risk of
departure from the euro by one or more Eurozone countries, especially Greece, and/or the
abandonment of the euro as a currency would severely adversely impact the economy in the
European Union. Additionally, current geopolitical risks arising from the continuing crises in the
Ukraine and unrest in the Middle East have the potential to negatively affect the global
economy. In addition, the economic climate in oil-exporting countries such as Russia, Brazil,
those in the Middle East and others may continue to deteriorate, for example in the event of a
continued drop in oil prices. Furthermore, Chinese and other Asian stock markets recently
experienced and might continue to experience significant turmoil, which also affect global stock
markets. A prolonged economic slowdown of the Chinese economy might have significant
adverse effects on the global economy, including the demand for passenger cars and
commercial vehicles.
Furthermore, we may be more affected by deteriorating economic conditions and lower
automotive sales in Europe, and especially in Germany, than some of our competitors and we
might not be able to compensate a significant decline in demand for our vehicle engineering
services in Europe, and in particular in Germany, by an increase in demand in other markets.
Any such adverse developments in the European or global economy could therefore have a
material adverse effect on our business, financial condition and results of operations.
2.
Sales in the automotive industry are cyclical and depend, inter alia, on general economic
conditions as well as on consumer spending and consumer preferences. As a consequence,
demand for our vehicle engineering services might also vary and periodic downturns in the
automotive industry could adversely affect our results of operations.
Sales of products by our customers in the automotive industry are cyclical and depend, inter alia,
on general economic conditions as well as on consumer spending and consumer preferences,
68
which can be affected by a number of factors, including employment rates, consumer
confidence, personal income, energy costs, environmental awareness, regulatory requirements,
government initiatives, especially vehicle purchase incentives, interest rate levels, inflation and
the availability of consumer financing. As the demand for automotive products fluctuates, our
customers might in turn reduce their R&D budget and outsource less vehicle engineering
services to external service providers like us. Therefore, demand for our vehicle engineering
services might vary, in particular if our customers in the passenger OEM industry outsource less
of the development of derivative car models. While market studies expect a growth of the
global automotive ESP market in the following years (A.T. Kearney, for example, forecasts a
market growth at a CAGR of 6.7% from 2014 to 2020 to reach a total size of €22.6 billion by
2020 (source: commissioned study by A.T. Kearney, Market assessment Engineering Service
Provider Automotive 2020, July 2015)), such expectations might prove wrong and a deceleration
in investment dynamics and a lower amount of R&D spending of automotive OEMs might
directly adversely affect our business.
Also, due to the cyclicality of the automotive industry, it is difficult to predict future
developments in the markets we supply. Therefore, estimating our personnel and engineering
capacity requirements accurately may prove to be difficult. See also, “A. Risk Factors—I. Risks
Related to Our Business—5. If our vehicle engineering services capacities exceed the actual
demand for our services, in particular if contracts are delayed or canceled, we risk
underutilization of our personnel capacities and engineering facilities as well as lower prices for
the vehicle engineering services we offer, which could adversely affect our results of
operations”.
In addition, a downturn in demand for cars and commercial vehicles is likely to increase pressure
on the prices which we are able to negotiate with our customers for our vehicle engineering
services and may eventually lead to reduced overall investment by OEMs and a lower volume of
engineering contracts awarded to external service providers such as us.
The realization of any of these risks could have a material adverse effect on our business,
3.
A substantial portion of our revenues is generated from a limited number of customers,
with our five largest customers sales divisions contributing approximately two thirds of
our total sales revenues in the fiscal year ended December 31, 2014. In the same period,
more than half of our total sales revenues were contributed by the Volkswagen and BMW
groups, with the Volkswagen group generating approximately 38% of our sales revenues.
The loss of, or a significant reduction in sales to, key customers could significantly
adversely affect our results.
We generate a substantial portion of our sales revenues from vehicle engineering services from
a limited number of customers, which are predominantly passenger car OEMs based in Germany
and commercial vehicle manufacturers. For example, in the fiscal year ended December 31, 2014,
our five largest customer sales divisions contributed approximately two thirds of our total sales
revenues. In the same period, more than half of our total sales revenues were contributed by
two German corporate groups, namely Volkswagen and BMW, with the Volkswagen group
(Volkswagen, Audi and Porsche) generating approximately 38% of our sales revenues in the
fiscal year ended December 31, 2014. If one or more of our major customers ceases to do
business with us for any reason or materially reduces the volume of vehicle engineering services
purchased from us, this would significantly reduce our sales revenues, the coverage of our fixed
cost base and thereby our earnings. In addition, the investments made by us to provide our
services to any such customer, including the establishment of our own engineering sites near the
locations of our customers (e.g. our new development and technology center currently
constructed in Wolfsburg-Warmenau), could be wholly or partially lost.
Recently, the competent U.S. authorities announced that they had discovered the presence of a
program in the engine software of certain vehicles having diesel engines manufactured by the
69
Volkswagen group. This program, these authorities claimed, violates U.S. environmental
standards by manipulating the exhaust emissions of the affected vehicles during emissions
testing. The Volkswagen group subsequently stated that the affected diesel engine had been
built into approximately 11 million vehicles globally. The Volkswagen group recognized an
initial provision of €6.7 billion in its profit and loss statement for the third quarter of its current
fiscal year, for anticipated costs to repair affected diesel engines, however, this did not address
any legal risks connected to this issue which could not be assessed at that time and may result in
considerable financial charges. Subsequently, the Volkswagen group also announced that
during the course of internal investigations unexplained inconsistencies were found with regard
to type approval CO2 levels, affecting around 800 thousand vehicles with diesel engines as well
as around 98 thousand vehicles with petrol engines from the Volkswagen Group. The
Volkswagen group’s initial estimate for the additional economic risks from these findings
amounts to approximately €2 billion. As a consequence of this situation, which is still subject to
development, the Volkswagen group and the vehicles produced by it have come under scrutiny
by the authorities of several other countries, some of which have deployed preliminary measures
such as sales restrictions. We are currently not able to predict the effects these developments,
including potential substantial fines or other penalties, will have on the Volkswagen group, our
largest customer group, and any other of our major customers. The new management of
Volkswagen group has announced that the group’s R&D program is under review and that
investments not deemed absolutely necessary will be cancelled or delayed. Potential cost savings
measures by the Volkswagen group and/or by our other major customers, including a reduction
of their R&D budgets, or bringing vehicle engineering work in-house that is currently
outsourced to ESPs such as us could however lead to a lower volume of vehicle engineering
services outsourced to us and/or increased pricing pressure, thereby adversely affecting our
business and results of operations.
Furthermore, due to their size, order volumes, and high concentration, our customers in the
automotive industry have a powerful bargaining position and are therefore able to exert
significant pricing pressure on us and/or have the ability to influence the other terms and
conditions of our contracts with them to their benefit. Additionally, as we often pre-finance upfront our vehicle engineering services until the scheduled payment date, in particular in
connection with larger projects, where we generally pre-finance our services up to one month,
we may suffer significant losses in the event that one or more of our larger customers becomes
unable or be unwilling to fulfill its or their contractual obligations vis-à-vis our Group or
becomes insolvent.
4.
Our business and its profitability depends on the budget automotive manufacturers
allocate to R&D activities and their outsourcing volumes of vehicle engineering services. A
reduction in the outsourcing of engineering activities or the insourcing of activities by our
customers could have a material adverse effect on our profitability.
The organic growth of our sales revenues in the fiscal years ended December 31, 2014, 2013 and
2012 has been driven by an increasing trend by automotive manufacturers to outsource vehicle
engineering services for the development of cars, vehicle derivatives, modules and car systems as
well as for manufacturing facilities to third party service providers such as us. Any future growth
of our business and its profitability will depend on the budget automotive manufacturers
allocate to R&D activities and whether they will continue to outsource such vehicle engineering
services and increase their outsourcing volumes. We believe that the extent to which automotive
manufacturers and automotive OEMs outsource vehicle engineering services generally and to us
in particular is influenced by a number of factors, including, but not limited to:
Š
the relative cost of external versus internal engineering;
Š
the number of model derivatives offered by car manufacturers;
70
Š
whether automotive manufacturers/OEMs perceive the engineering solutions for their
products and designs as strategic which may prompt them to keep the relevant engineering
work in-house;
Š
the degree of capacity utilization at internal engineering departments;
Š
the quality and timeliness of our vehicle engineering services, in particular as compared to the
automotive manufacturers’ internal engineering capabilities;
Š
regulation relating to employee leasing agreements and work contracts; and
Š
labor relations among automotive manufacturers/OEMs and their employees and unions, in
particular relating to salary levels at automotive manufacturers/OEMs
A slowdown in the current trend towards outsourcing of vehicle engineering services or a
reversal of such trend resulting in the insourcing of activities by automotive manufacturers and
automotive OEMs could have a material adverse effect on our profitability and thus on our
business, financial condition and results of operations.
In addition, unforeseeable or extraordinary events or circumstances, e.g. the presence of a
program in the engine software of certain cars having diesel engines manufactured by the
Volkswagen group that allegedly violates U.S. environmental standards by manipulating the
exhaust emissions of the affected vehicles during emissions testing (see “A. Risk Factors—I. Risks
related to our business—3. A substantial portion of our revenues is generated from a limited
number of customers, with our five largest customers sales divisions contributing approximately
two thirds of our total sales revenues in the fiscal year ended December 31, 2014. In the same
period more than half of our total sales revenues were contributed by the Volkswagen and
BMW groups, with the Volkswagen group generating approximately 38% of our sales revenues.
The loss of, or a significant reduction in sales to, key customers could significantly adversely
affect our results.”), could lead to cost cutting measures and/or a reduction of the R&D budgets
of our customers or to engineering work being brought in-house that is currently outsourced to
ESPs such as us, leading to a lower volume of vehicle engineering services outsourced to us and/
or increased pricing pressure.
Furthermore, in the current global economic situation, changes in the geographical distribution of
automotive demand could also have a material adverse effect on our business. In particular, we
face risks related to a shift in the demand for passenger cars from mature Western economies such
as Europe to emerging markets in Asia, particularly China. Our main customers, which comprise all
major German OEMs, might decide to move production facilities and development departments to
such emerging economies in order to take advantage of cost reductions and the growth potential
of non-European economies. If our customers should decide to move their development
departments to such economies and if we were not able to follow our customers to such new
locations, the demand for our vehicle engineering services and therefore our business, financial
condition and results of operation might be adversely affected.
5.
If our vehicle engineering services capacities exceed the actual demand for our services, in
particular if contracts are delayed or canceled, we risk underutilization of our personnel
capacities and engineering facilities as well as lower prices for the vehicle engineering
services we offer, which could adversely affect our results of operations.
If engineering projects agreed with our customers are delayed for any reasons or if contracts for the
development of designs, products and production facilities are canceled or postponed or if demand for
our services does not develop as we have anticipated, we risk underutilization of our personnel
capacities and engineering facilities. If we are not able to balance demand for our services with
capacity, for example by agreeing long-term projects with our customers, by reducing our own
subcontracting of services and/or by offering flexible working time and deployment opportunities to
our employees, we might not be able to fully compensate for fluctuations in capacity. This may result
in idle capacity costs, lower prices for the vehicle engineering services we offer and write-offs on fixed
assets. Fluctuations in the rate at which industry capacity grows relative to the growth rate in demand
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for our services and products may in the future put pressure on our pricing and negatively affect our
results of operations. On the other hand, during periods of increased demand, we may not have
sufficient personnel capacity to meet customer orders. The realization of any of these risks could have
a material adverse effect on our business, financial condition and results of operations.
6.
We might be adversely affected by cost overruns in complex projects if we underestimate
the required personnel, time and other resources or additional payment obligations in
long-term contracts and turnkey projects if we do not meet deadlines, quality
specifications or other agreed parameters.
We are typically engaged in complex large-scale projects for our customers involving large and
international teams with different specializations within our Group as well as numerous
interfaces with engineering departments at the customer organisation. Based on the
agreements we have with our customers, we are typically obliged to deliver pre-defined
engineering results, such as ready to manufacture designs for entire cars, derivatives of models
developed by the customer, car components and modules as well as electrical/electronic systems.
For these projects, prices are usually fixed at the outset whereas the precise requirements of the
project often only become apparent while the engineering work is conducted. A considerable
degree of knowledge regarding the customer and its typical requirements is required to
properly estimate the exact allocation of engineering capacity required for the project.
We therefore face the risk of underestimating the personnel, time and other resources required
to fulfil our contractual obligations. This may result in a deterioration of our margins or may
lead to losses being incurred on such projects if the customer is unwilling to compensate us for
additional unanticipated work. Further additional costs may be incurred, particularly in the case
of large-scale projects, if we do not meet deadlines, quality specifications or other agreed
parameters. When we execute numerous large-scale orders in parallel and potentially face
capacity bottlenecks, the realization of this risk exposure becomes more acute.
As a result, we might be obliged to increase our workforce compared to our original
assumptions without receiving additional compensation. Unforeseen developments or technical
difficulties within such projects might result in delays, cost overruns and quality deficiencies
which, in turn, can reduce the profitability of a project and harm our reputation. The realization
of any of these risks could have a material adverse effect on our business, financial condition
and results of operations.
7.
We are exposed to risks associated with market trends and developments that could affect
the vehicle mix sold by automotive manufacturers and automotive OEMs. Should we not
be able to develop appropriate strategies as a response to new market trends and
technical developments, our business, financial condition and results of operations could
be adversely affected.
We see the global production of vehicles and, as a result, our business with automotive
manufacturers and automotive OEM customers currently subject to a number of market trends
and technical developments that may affect the vehicle mix sold by automotive manufacturers
and automotive OEMs:
Š
the necessity for OEMs to offer a greater variety of models as well as more options to
individualize models;
Š
rapid advancements in technology as well as increasingly comprehensive vehicle configuration
and upgrade options;
Š
the emergence of e-mobility, including hybrid electric vehicles, and other environmentallyfriendly technologies aimed at lower fuel consumption and a reduction of CO2 emissions;
Š
a continuous increase in the electronic complexity of cars (connectivity and autonomous
driving);
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Š
new mobility concepts (car sharing) and market entrants; and
Š
smart production planning (Industry 4.0);
As a result of these market trends and technological advances, the vehicle mix sold by our
customers has shifted significantly in recent years and could change further in the future. While
we believe that the trend towards low emission cars and electric drive systems puts particular
demands on the research and development and engineering requirements for automotive
manufacturers and is therefore also an opportunity for our business, any reversal of such trends,
in particular potentially less stringent requirements regarding CO2 emissions, could result in less
demand for our services and would be harmful to our business. In addition, a greater
proliferation of “affordable” car models globally would likely reduce demand for vehicle
engineering services as these cars have much simpler designs, lack many of the complex
components which we assist our customers to implement into their models and have less
derivative models and facelifts which might require our engineering expertise.
Should we not be able to develop appropriate strategies as a response to these or new market
trends and technical developments, the effects of such trends and technical developments could
have a material adverse effect on our revenues and profit margins and therefore our business,
8.
The market for vehicle engineering services for the automotive industry is characterized by
intense competition, which could reduce the sales volume of our services and products or
put continued pressure on our sales prices.
The market for vehicle engineering services for the automotive industry is highly competitive.
We experience intense competition from
Š
integrated larger players comprising of OEM-dependent and other independent vehicle
engineering services suppliers, the latter being vehicle engineering services suppliers without
any significant majority or minority shareholding by any OEM or supplier;
Š
niche players focused on certain market sub-segments;
Š
general ESPs with automotive activities;
Š
ESP businesses of suppliers; and
Š
the internal engineering departments of our customers, some of which are cooperating
among each other on particular projects to save development costs.
In addition, we increasingly see intensified competition as a result of off- and near-shoring of
certain vehicle engineering services to suppliers in lower cost jurisdictions.
As automotive manufacturers and automotive OEMs are themselves increasingly affected by
intense competition and the cost burden of innovation and product development, they exercise
significant pricing pressure on their outsourcing partners both in the initial bidding process and
during the term of the contract. Automotive manufacturers and OEMs often expect lower prices
from suppliers for the same, and in some cases even enhanced services, as well as consistently
high product quality. If we are unable to offset continued price reductions through improved
operating efficiencies and reduced expenditures, the pricing pressure exercised by automotive
manufacturers and OEMs could impact our profit margins.
Furthermore, our competitors, in particular competitors from low cost economies (for example
India), may increasingly attempt to serve the European market, for example by building upon
customer relationships with European OEM customers established in Asian markets. While we
believe that the vehicle engineering services business is characterized by relatively high market
entry barriers due to the requirement for technological know-how and the importance of longstanding customer relationships, some of those competitors have, or may obtain access to
specialized expertise and know-how through acquisitions of, or partnerships with, established
service providers of the automotive industry. Other competitors pursue or may pursue an
aggressive pricing policy and offer conditions to customers that are more favorable than ours.
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As a result, competitive pressure in the European market could increase further with the risk of
falling prices and decreased demand for our vehicle engineering services.
As automotive manufacturers increasingly request strong turnkey and capability suppliers, we
expect that our markets will be increasingly characterized by consolidation which we believe
will result in a fewer number of small and medium sized vehicle engineering services companies
and the emergence of a limited number of large competitors that operate on a global scale.
Increased consolidation among our competitors or between our competitors and any of our
automotive OEM customers could allow competitors to further benefit from economies of scale,
offer more comprehensive product portfolios and increase the size of their serviceable markets.
In addition, our customers might exercise increased pricing pressure in connection with projects
structured in the form of work packages. This could require us to accept considerable reductions
in our profit margins and loss of market share due to pricing pressure.
9.
Our capability to increase sales revenues and profitability is directly correlated to the
number of engineers we employ. If we fail to attract a sufficient number of well-qualified
engineers or if we fail to retain such personnel, our market position, business, financial
condition and results of operations might be significantly adversely affected.
Our ability to continuously hire, retain and properly qualify a large number of well-trained
engineers with particular know-how in the automotive sector is key to our success. We are
competing intensely for engineering talent with our competitors but also with our customers in
the automotive industry, both in Germany where approximately 77% of our workforce was
employed during the fiscal year 2014, and internationally. Our capability to increase sales
revenues and profitability is directly correlated to the number of engineers we employ. If we fail
to attract a sufficient number of well-qualified engineers or if we fail to retain such personnel,
our market position and prospects will be significantly adversely affected. In addition,
unsuitably qualified or a lack of qualified personnel in our development teams might put the
quality of our project work at risk. If we lose key personnel, in particular if we lose entire teams
of employees working together in a certain area of our business, considerable expertise could
be lost or access thereto gained by competitors and customers. Furthermore, a shortage of
qualified personnel might force us to take less orders from our customers or expose us to
additional cost due to higher salaries and/or the need to hire freelancers/subcontractors which
might leave us at short notice, leading to a loss of important know-how, or which might claim
permanent employment even when we do not require their service any longer. In addition, a
high turnover among our employees could cause our customers to question the confidentiality
of their engineering product as employees move from us to our or our customer’s competitors.
In Germany, we hired approximately 1,200 new employees while approximately 730 employees
left our Group during the fiscal year ended December 31, 2014. There is no guarantee that we
will be successful in retaining our employees or in attracting new employees with the
qualifications we seek. We have made a considerable financial investment in the recruitment
and retention of our engineering personnel and competitive pressures for talent may force us to
increase our related spending, thereby potentially decreasing our margins.
10.
Our business could suffer if we are not able to respond to advances in technology or if we
cannot keep pace with the technology competence of our competitors.
Our customers demand increasingly complex and innovative product development services and
product solutions to meet their needs. The ability to anticipate technological trends and
respond to customer needs by developing innovative solutions in a timely manner is crucial to
major parts of our business. The market for automotive vehicles and, as a result, our business
with automotive manufacturers and automotive OEM customers, is currently subject to a
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number of market trends and technical developments, such as electrical drive systems and the
connectivity of cars with external information systems, to which we are required to respond.
In addition, automotive manufacturers have increased the number of vehicle models they bring
to the market and have, at the same time, shortened the average model lifetime cycle to
approximately three years before a facelift or successor model is introduced. We are therefore
required to develop and/or design new product solutions in significantly reduced time periods.
A misjudgement or delayed recognition of these trends and our customer’s requirements could
lead to a loss of reputation and customers.
If we fail to innovate and develop new product development services or if we fail to keep pace
with the technology requirements of our customer’s products, this failure could have a material
adverse effect on our business, financial condition and results of operations.
11.
Malfunctioning of products manufactured and production lines built according to our
development and vehicle engineering services may result in third party claims against our
customers, product recalls and production downtime for our customers. This may result in
warranty claims against us which, in turn, could have a material adverse effect on our
Testing by us and our customers before and during the manufacturing process of the cars,
components, modules and systems we develop for our customers may not prevent their quality
from being impaired by undetected design errors or faults or their noncompliance with
customer specifications and quality requirements. Any such faults or defects may cause such
products to malfunction, may make them unfit for the purpose they were designed for or
damage the property and/or health of the product’s end consumer and others. In addition, such
faults and defects may cause potentially serious serial or consequential losses and damage to
downstream products, and/or breach of contract with consumers and may force our customers
to conduct costly and reputation damaging product recalls to eliminate such problems.
Moreover, the production lines we develop through our Production Solutions segment are vital
components of our customers’ automotive production processes. In the event that the
completion of production lines is delayed or their quality and proper functioning is impaired by
undetected deficiencies in design, our customers may experience loss of revenues and other
damages.
In addition, innovative vehicle engineering services for increasingly complex products and
solutions are particularly exposed to the risk of yet unknown and/or undetected defects and
errors which in turn may expose us to increased risk from warranty and product liability claims,
for example for design flaws. Particularly in connection with the market introduction of
innovative product development services and product solutions, we have experienced, and
continue to experience quality issues. If we are unable to fully remedy such problems, we may
incur significant additional cost, and will not be able to increase revenues through the sale of
innovative vehicle engineering services and product solutions.
Moreover, there can be no assurance that we will not be exposed to liability for breach of
contractual obligations arising out of the agreements we have with our customers resulting
from defects in the quality of our vehicle engineering services or that any such defects will not
impair our overall reputation, thus resulting in potential loss of customers.
Furthermore, we hire subcontractors from time to time to assist us in rendering our vehicle
engineering services to our customers. In case a fault or defect is caused by a subcontractor, we
might not be able to pass on damages from warranty and product liability claims.
It is not possible to insure against some of these risks, and for certain risks and in certain
locations, insurance may not be available or may be available only at costs that are not
economically viable. It is possible that claims will be brought for which we are uncompensated
or undercompensated by insurance. Any potential claim which is not covered by insurance could
result in additional costs and payments for us which, in turn, could, alone or in combination,
have a material adverse effect on our business, financial condition and results of operations.
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12.
We may be unable to successfully integrate or achieve the expected benefits from past or
future acquisitions or joint ventures. In addition, we face the risk of potential guarantee or
liability claims resulting from the disposal of former business units or joint ventures. The
realization of these risks could have a material adverse effect on our business, financial
We have completed a number of significant acquisitions and have established joint ventures in the
past and may continue to pursue selected acquisitions or enter into new joint ventures in the future.
To the extent we are successful in making acquisitions or establishing joint ventures, we may need to
expend substantial amounts of cash, incur additional debt or assume loss-making divisions.
Acquisitions or joint ventures may involve a number of risks, including the loss of key employees;
extraordinary or unexpected legal, regulatory, contractual and other costs; difficulties in integrating
financial, technological and management standards, processes, procedures and controls with those
of our existing operations; challenges in managing the increased scope, geographic diversity and
complexity of our operations; mitigating contingent and/or assumed liabilities; the possible loss of
customers and/or suppliers; and control issues in relation to acquisitions through joint ventures and
other arrangements where we do not exercise sole control.
Furthermore, we may not realize the anticipated cost savings, synergies, future earnings or
other benefits that we plan to achieve from acquisitions or joint ventures. Currently, for
example, we are still in the process of harmonizing employment contracts and social security
benefits across the Group following the acquisitions of Rücker AG (together with its respective
subsidiaries, the “Rücker Group”) and BFFT Gesellschaft für Fahrzeugtechnik mbH and BFFT
Engineering GmbH (together with their respective subsidiaries, the “BFFT Group”), which could
lead to resignations of key personnel and/or lead to an impairment of goodwill. See “A. Risk
Factors—I. Risks Related to Our Business—17. Our consolidated statement of financial position
includes significant intangible assets, which could become impaired and thereby have a material
adverse effect on our business, financial condition and results of operations.”
We cannot guarantee that any future acquisition or joint venture will yield benefits that are
sufficient to justify the expenses we have incurred or will incur in completing such acquisition or
joint venture.
In addition, we could also assume additional risks as a result of acquisitions or joint ventures,
including the risk of potential guarantee or liability claims resulting from the disposal of former
business units or joint ventures. For example, since we refocused on primarily providing vehicle
engineering services for the global automotive industry in 2011, we disposed of numerous noncore activities, including our aerospace business and EKS InTech GmbH. Pursuant to common
standards in sale contracts, we thereby committed to certain representations and warranties
which might materialise in the future.
The realization of any of these risks, alone or in combination, could have a material adverse
effect on our business, financial condition and results of operations.
13.
Due to our dependency on complex information technology, we are subject to a number of
IT risks, such as the loss or theft of data, stoppages and interruptions to the business or
system failures, which could have a material adverse effect on our business, financial
Our reliance on IT systems for the rendering of our vehicle engineering services and the
necessity of their permanent availability impose high demands on the information technology
systems we use. Our IT systems support almost all functions of our Group, including all business
units and geographic locations. An extended outage in a data center or telecommunications
network utilized by our systems, any malfunction, fault or security breach in our IT systems and
software, including possible attacks by outsiders, for instance by criminal hackers or computer
viruses, or any similar event could lead to an extended unanticipated interruption of our systems
or networks or theft of confidential data. Furthermore, our IT systems are potentially exposed to
damage and loss caused by fire, natural hazards or other disturbances.
76
In such a case, we may have to expend substantial amounts of money and resources on the
prevention and remediation of potential or existing security breaches and their consequences,
including, for example, high liability claims and loss of reputation vis-à-vis our customers who
may in turn be forced to suspend their product development projects if we are unable to deliver
our vehicle engineering services on time. The realization of any risks related to our IT system
and network disruptions could have a material adverse effect on our business, financial
14.
We might expand into other geographical markets and such expansion may fail or not
produce the desired results, which could have an adverse impact on our business, financial
Currently, we operate mainly in Germany and the rest of Europe. We may strengthen our global
presence in the future by intensifying sales and creating added value at the local level, especially
in Asia, and in particular in China, and the United States by expanding our sales force and
engineering facilities.
An international expansion is associated with substantial costs and it is possible that we will not
have the requisite financial resources and expertise to implement an expansion. Furthermore,
the overall economic environment in the international markets which are relevant for our Group
are subject to periods of substantial volatility. It is thus possible that any expected growth in
demand for our vehicle engineering services will not transpire as planned or the markets will
develop more slowly than anticipated.
Historically, we have concentrated our activities in Germany and the rest of Europe. While we
have recently established a presence in Asia, some of our major competitors may be more
familiar with the Asian markets, and competing with these providers in Asia could be
significantly more difficult than in Europe. Especially in China there is a risk that domestic
Chinese car manufacturers may tend to select domestic instead of Western service providers due
to reasons unrelated to price and quality. Furthermore, we are not yet fully familiar with the
cultural traditions and customs of the Asian markets. In connection with our Asian
representative office or joint venture, we may not succeed, or succeed only to a limited extent,
in integrating our new partners into our Group structures due to cultural and other differences.
Should we be unable to offer technologically more advanced services than our competitors, or
should we be unable to prepare ourselves adequately to address the specific requirements of
the customers in these markets, demand in these regions could be satisfied by local competitors.
In addition, political or economic influences or the legal framework, could mean that any
planned expansion cannot be pursued or can only be pursued on commercially unattractive
terms. Should any international expansion by our Group not proceed as expected, the associated
substantial investments made by us may not deliver the desired growth in revenue and income.
In addition, due to weaker respect for intellectual property and technical know-how in certain
overseas markets, our intellectual property and technical know-how could be put at greater risk
of misappropriation by our customers, competitors and joint venture partners as a result of an
expansion in these markets.
All of these factors could mean that any expansion in international markets may not be
successful or may not be as successful as planned, which could have a material adverse effect on
our net assets, financial position and results of operations.
15.
We may be adversely affected by fluctuations in exchange rates, which could have a
As a global enterprise, our earnings and costs are exposed to exchange rate fluctuations. In the
fiscal year ended December 31, 2014, we generated about four fifths of our revenue in countries
with the Euro as functional currency. This could lead to the value of our costs not matching the
value of the consideration received in transactions, because income and expenditure arise in
different currencies. Exchange rate fluctuations can affect the levels of proceeds and receivables in
particular. While we hedge our foreign currency exposure through forward exchange contracts
77
and interest rate caps, we may not always be able to adequately hedge against currency risk on
suitable terms in the future. Thus, our hedging strategy may be partly or wholly unsuccessful.
Furthermore, currency effects arise at subsidiaries whose functional currency is not the Euro,
since on the one hand, the foreign currency earnings of these companies are translated at
average rates and recognized in profit or loss, and, on the other hand, the net assets of these
subsidiaries are translated into Euro at spot rates and result in currency-related fluctuations in
the equity of our Group.
There is no assurance that these fluctuations in currency exchange rates can be compensated by
other means. Any uncompensated fluctuations may have a material adverse effect on our
16.
We have substantial pension obligations and an increase in the net present value of our
pension obligations, additional provisioning requirements or a decrease of the value of
fund assets covering our pension commitments might adversely affect our financial
position.
We have made commitments to current and former employees with regard to company pension
payments, both in the form of defined benefit and defined contribution pension plans. Only
part of these pension plan commitments are covered by fund assets. The pension provisions
recognized on our consolidated statement of financial position for the obligations arising from
such pension commitments vis-à-vis employees are determined on an actuarial basis by the
projected unit credit method in accordance with IAS 19. As of December 31, 2014, the vested net
present value of the pension obligation amounted to €46.8 million (calculated under IAS 19). In
determining our pension provisions amounting to €22.4 million as of December 31, 2014, we use
certain actuarial assumptions regarding, for example, mortality rates, discount rates, changes in
salaries and pension levels and staff turnover. If these actuarial assumptions prove to be
inaccurate or need to be revised, for example due to increasing longevity or prolonged periods
of low interest rates, this could lead to a significant increase in the net present value of our
pension obligations and to additional provisioning requirements. Furthermore, in case pension
plan commitments are covered by fund assets, the value of these assets could decrease and thus
lead to additional provision requirements. Further, in Switzerland the company pension is
conducted via a collective pension foundation (Sammelstiftung) that may request additional
contributions from participating employers in the form of so-called recapitalization payments
(Sanierungsgelder) in order to cover any additional funding needs which arise for the entire
scheme. In addition, the legal conditions governing our Group’s pension obligations are subject
to changes in applicable legislation or case law, which may also lead to new or more extensive
pension obligations for our Group, or may impact our Group’s previous calculations of its
pension obligations.
Any of these factors or developments could have a material adverse effect on our business,
financial position and results of operations.
17.
Our consolidated statement of financial position includes significant intangible assets,
which could become impaired and thereby have a material adverse effect on our business,
We carry significant intangible assets on our consolidated statement of financial position. As of
September 30, 2015, the carrying amount of intangible assets on our consolidated statement of
financial position was €106.8 million (December 31, 2014: €109.9 million; December 31, 2013:
€113.4 million), representing 21.4% of our total assets (December 31, 2014: 22.7%;
December 31, 2013: 22.5%). This carrying amount includes €64.2 million in goodwill as of
September 30, 2015 (December 31, 2014: €63.9 million; December 31, 2013: €63.9 million)
resulting from the consolidation of investments in subsidiaries which is carried out according to
the purchase method. In 2014, 2013 and 2012, we recorded no impairments on goodwill.
However, there is no guarantee that impairments will not occur, particularly in the event of a
78
substantial deterioration of our future prospects or general economic conditions. A significant
impairment of intangible assets could have a material adverse effect on our business, financial
18.
Our risk management system might turn out to be partially or entirely ineffective, which
could have a material adverse effect on our business, financial condition and results of
operations.
Although we have established a risk management system, our business might be subject to
unknown or unidentified risks, and the risk management system might turn out to be partially
or in its entirety ineffective or fail and risks to our business might materialise or might not be
identified quickly enough. The realisation of any of these risks could have a material adverse
effect on our business, cash flows, financial condition and results of operations.
19.
We might be unable to effectively manage our own growth or to develop or raise the
resources necessary in order to control or support our growth, which could have a material
We have steadily expanded our business operations and increased the number of employees
over the past years. In particular, we acquired companies like the Rücker Group and the BFFT
Group resulting in an expanded scope of our business. Any further expansion of business
operations will require us to adapt our organization, human resources planning and funding
accordingly and to have sufficient resources available. Expanding business operations tie up
resources, both in management and in technical areas. Qualified personnel must be recruited
and trained. In this context, it cannot be assured that we will be able to make the necessary
adjustments in time and in the required scope. Failure to do so might have a material adverse
effect on our business, cash flows, financial condition and results of operations.
20.
Labor disruptions could materially adversely affect our business, net assets, financial
As of September 30, 2015, our Group had 8,063 employees worldwide, including trainees but
excluding employees from discontinued operations. There are currently no employment-related
issues in the group which affect our business activities. However, these relations could
deteriorate in the future and there is no guarantee that we will be able to enter collective
agreements on terms which are satisfactory to us. While there have been no material work
stoppages at any of our facilities due to labor union activities in recent years, any stoppage or
slowdown at any of these facilities could cause material interruptions, and we cannot be certain
that alternate qualified capacity would be available on a timely basis or at all. This could lead to
a loss in revenue, loss of customers and increase of our operating costs (for example, if we were
required to adopt or negotiate a shop-level collective agreement on a uniform remuneration
system for all categories of employees, including employees operating under an employeeleasing scheme or a collective agreement providing for higher wages than currently applied or
additional benefits or employment protection). As a result, labor disruptions at any of our
facilities could materially adversely affect our business, net assets, financial condition and results
of operations. See also, “A. Risk Factors—II. Regulatory and Legal Risks—2. Risks deriving from
the potential invalidity of the election of the company-wide works council
(“unternehmenseinheitlicher Betriebsrat”) and the collective agreements entered into by that
committee could have a material adverse effect on our business, financial condition and results
of operations.”
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21.
Our leverage and debt-service obligations could limit the cash we have available to grow
our business, for dividend payments and other measures, and a significant increase in our
indebtedness could restrict our access to credit or change the terms on which it is extended
to us. This could have a material adverse effect on our business, financial condition and
As of December 31, 2014, our total non-current and current financial liabilities amounted to
€166.9 million, our total equity amounted to €117.4 million, and our total assets amounted to
€484.6 million. In the fiscal year ended December 31, 2014, our Adjusted EBIT1 amounted to
€57.9 million. To the extent that cash flow from operating activities is dedicated to the payment
of principal and interest on our indebtedness, it reduces the amount of cash we have available
for other purposes, including capital expenditures, the exploitation of business opportunities,
future acquisitions and other general corporate needs, as well as any future dividends.
Furthermore, a significant increase in our net indebtedness could result in changes in the terms
on which banks and suppliers are willing to extend credit to us. Any of these events, if they
occur, could increase our costs of financing, or cause us to become obligated to repay on some
or all of our indebtedness early, either of which could have a material adverse effect on our
22.
Our ability to raise capital in the future could be limited and thus have a material adverse
In the future, we might need or desire to raise capital through public or private financing or
other arrangements, for example to refinance our long-term loans provided by a subsidiary of
ATON GmbH in an aggregate amount of €192.8 million, which will be due for repayment in
November 2018. As of September 30, 2015, the non-current liability to ATON Group Finance
GmbH amounted to €158.8 million. Financing might not be available on acceptable terms, or at
all. Factors that could increase the difficulty of obtaining financing include, but are not
necessarily limited to, a deterioration in general economic conditions globally or in the markets
in which we operate, higher interest rates, a deterioration in our financial results or condition,
insufficient competition among banks or other potential sources of financing, and insufficient
demand for securities in the debt or equity capital markets. Any inability to raise capital as
needed or to refinance existing indebtedness going forward could harm our business, prevent us
from realizing business opportunities, prevent us from growing our business or prevent us from
responding to competitive pressures, and could, thus, have a material adverse effect on our
23.
Political, social or economic conditions and changes in countries in which we and/or our
customers operate could have an adverse impact on our business, financial condition and
In some of the countries in which we and/or our customers operate, the general economic,
political and legal environment is less stable than in Western Europe. Far-reaching changes in
the political, social and economic environment can never be ruled out. Our European and
particularly our international operations and those of our customers are, therefore, exposed to
a number of factors, over which we and our customers have little to no control. These factors
include, but are not limited to, the following:
Š
political, social, economic, financial or market-related instability or volatility;
Š
natural disasters including fires, floods and disease epidemics;
1
Adjusted EBIT is a non-IFRS measures. Adjusted EBIT represents earnings before interest and taxes adjusted for non-recurring
items. While the amounts included in Adjusted EBIT have been derived from our consolidated or combined financial statements,
such measures are not financial measures calculated in accordance with IFRS, Accordingly, Adjusted EBIT should not be
considered as an alternative to gross profit or sales revenue and changes in inventories as an indicator of our performance, or as
an alternative to operating cash flows as a measure of our liquidity. Our management uses Adjusted EBIT to assess our
operating performance and as a measure of economic success of the Company. In addition, we believe that Adjusted EBIT is a
measures commonly used by investors. Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled
measures reported by other companies due to differences in the way these measures are calculated.
80
Š
manmade disasters including acts of war, terrorist attacks and other hostilities;
Š
foreign currency control regulations and other regulations or government interventions or the
negative impacts related to exchange rates, foreign currencies and taxation;
Š
restrictions on capital transfer;
Š
the absence of an independent and experienced judiciary and the inability to enforce
contracts, as well as corruption;
Š
reimbursement rates and services covered by government reimbursement programs;
Š
trade restrictions and sanctions regimes; and
Š
restrictions on the repatriation of earnings.
The factors above, and in particular any material deterioration of the economic situation in one
or more of the countries in which we operate, could, directly or indirectly, have a material
24.
Our management team has limited experience in managing a public company, and publicly
traded company reporting and compliance requirements could divert resources from the
day-to-day management of our business which could have a material adverse effect on our
Our management team has limited experience in managing a publicly-traded company and
complying with the increasingly complex laws pertaining to public companies. Our management
team might not successfully or efficiently manage our transition to being a public company that
is subject to significant regulatory oversight and reporting obligations under applicable laws
and regulations. These new obligations will require substantial attention from our senior
management and could divert their attention away from the day-to-day management of our
business.
As a public company, we will be subject to additional reporting requirements. Compliance with
these rules and regulations will increase our legal and financial compliance costs and may make
some activities more difficult and time-consuming. As a result, management’s attention may be
diverted from other business concerns and we may be required to hire additional employees or
engage outside consultants to comply with these requirements, which would increase our costs
and expenses.
Any of these developments, alone or in combination, could have a material adverse effect on
our business, financial condition and results of operations.
25.
The historical financial information presented in this prospectus may not be comparable
and may not be a reliable indicator of our future results.
We have a complex financial history which may limit the comparability of the financial
statements contained in this prospectus.
The Company was incorporated by its sole shareholder, ATON GmbH, Munich, Germany (the
“Selling Shareholder”) on November 2, 2015 by way of a capital contribution in cash in the
aggregate amount of CHF 1,000 thousand against issuance of 25,000 thousand bearer shares
with a nominal value of CHF 0.04 each. Since its incorporation, the Company has not conducted
any business, acquired any assets or incurred any liabilities other than as directly related to its
incorporation and the offering of its shares pursuant to this prospectus. Concurrently with the
determination of the Offer Price (as defined below in “—III. Risks related to our shares and the
offering—5. Our shares have not previously been publicly traded and there is no guarantee that
an active and liquid market for our shares will develop and therefore investors may not be in a
position to sell their shares in the Company quickly or at or above the Offer Price.”) the Selling
Shareholder will contribute all of the shares in EDAG Engineering Schweiz Sub-Holding AG to
the Company by way of contribution into the capital reserves without issuance of new shares or
any other compensation by the Company (the “Contribution”). EDAG Engineering Schweiz
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Sub-Holding AG was incorporated on September 14, 2015 which, indirectly, through EDAG
Engineering Holding GmbH, a German intermediate holding company, holds all of the shares in
EDAG Engineering GmbH. EDAG Engineering GmbH conducts, directly and indirectly, through its
subsidiaries the operating business described in this prospectus. By means of the Contribution,
the Company will, thus, acquire this business.
As a result, historical financial information included in this prospectus for the fiscal years ended
December 31, 2012, 2013 and 2014 is that of EDAG Engineering GmbH, which will, upon
completion of the Contribution, be the operative parent company of the Group. As of and for
the nine-month period ended September 30, 2015, we present the financial information based
on the consolidated financial information of EDAG Engineering Schweiz Sub-Holding AG, which
will, upon completion of the Contribution, be the direct subsidiary of the Company. EDAG
Engineering Schweiz Sub-Holding AG indirectly holds all shares in EDAG Engineering GmbH
through EDAG Engineering Holding GmbH. Between September 14, 2015, the incorporation
date of EDAG Engineering Schweiz Sub-Holding AG, and September 30, 2015, EDAG Engineering
GmbH and EDAG Engineering Holding GmbH have entered into certain transactions (in
particular the assumption of a loan liability of EDAG Engineering GmbH in an amount of €107.3
million by EDAG Engineering Holding GmbH as of September 30, 2015), the effects of which
would adversely affect the comparability between consolidated financial information for the
nine-month period ended September 30, 2015 prepared on the level of EDAG Engineering
GmbH and the consolidated and combined financial information included in this prospectus for
the fiscal years ended December 31, 2012, 2013 and 2014 prepared on the level of EDAG
Engineering GmbH. In order to provide investors with more comparable financial information
for these periods, we present the consolidated financial information as of and for the ninemonth period ended September 30, 2015 on the level of EDAG Engineering Schweiz SubHolding AG with the corresponding financial information for the nine-month period ended
September 30, 2014 on the level of EDAG Engineering GmbH.
EDAG Engineering GmbH was established in 2012 and initially purchased by the Selling
Shareholder. EDAG Engineering GmbH acquired the Rücker Group with effect from October 1,
2012. In 2013, Rücker AG was merged into EDAG Engineering GmbH, and the non-controlling
interests in Rücker AG were squeezed out. With effect from January 1, 2014, Rücker GmbH, a
100% subsidiary of the former Rücker AG, was merged into EDAG Engineering GmbH. In
January 2013, BFFT Holding GmbH, a 100% subsidiary of EDAG Engineering GmbH, acquired the
BFFT Group.
With effect as of January 1, 2014, our Selling Shareholder contributed its subsidiary EDAG
GmbH & Co. KGaA to EDAG Engineering GmbH. As a result, the activities of EDAG GmbH & Co.
KGaA were combined with the Rücker Group and the BFFT Group in EDAG Engineering GmbH.
No legal group relationship existed between EDAG Engineering GmbH and EDAG GmbH & Co.
KGaA in the fiscal years 2012 and 2013, as they were sister companies and both subsidiaries of
our Selling Shareholder.
As a result, 2014 was the first fiscal year in which it was possible to prepare consolidated
financial statements for EDAG Engineering GmbH. The first IFRS consolidated financial
statements were prepared for the year ended December 31, 2014 and contain the corresponding
period ended December 31, 2013 and the opening statement of financial position is drawn up as
of January 1, 2013.
Furthermore, we disposed of certain subsidiaries between 2012 and 2014, in particular several of
the Group’s aerospace subsidiaries, which were acquired as part of the Rücker Group. They had
been included in the group of combined entities with effect from October 1, 2012 for the
purposes of the audited combined financial information for the fiscal year ended December 31,
2012. For the fiscal year ended December 31, 2013, they were classified as a disposal group in
accordance with IFRS 5. As a disposal group, these subsidiaries’ results were included in our
audited consolidated statement of comprehensive income for the fiscal year ended
December 31, 2013. In addition, their assets and liabilities were presented as a single line item in
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our audited consolidated statement of financial position for the fiscal year ended December 31,
2013. With effect from March 31, 2014, the Group disposed of its shares in these aerospace
subsidiaries, after which time these subsidiaries ceased to be included in the consolidated group
of entities for the purposes of the audited consolidated financial information for the fiscal year
ended December 31, 2014.
In addition, we sold EKS InTec GmbH on May 31, 2014. With effect from this date, this subsidiary
ceased to be included in the consolidated group of entities for the purposes of the audited
consolidated financial information for the fiscal year ended December 31, 2014.
As a result of these acquisitions and disposals, the audited combined financial information for
the fiscal year ended December 31, 2012 only contains three months of data for the Rücker
Group (October 1, 2012 to December 31, 2012), includes no data for the BFFT Group and
includes three months of data for the former aerospace subsidiaries. In contrast, the audited
consolidated financial information for the fiscal year ended December 31, 2013 includes data for
the full year for both the Rücker Group and the BFFT Group and classifies the aerospace
subsidiaries as a disposal group in accordance with IFRS 5. Furthermore, the audited
consolidated financial information for the fiscal year ended December 31, 2014 includes data for
the full year for both the Rücker Group and the BFFT Group, but only includes three months of
data for the aerospace subsidiaries as a disposal group (January 1, 2014 to March 31, 2014).
As a consequence, the comparability of the financial information for the fiscal years ended
December 31, 2012, December 31, 2013 and December 31, 2014 is limited with respect to one
another and the historical financial information as presented in the financial statements
included in this prospectus may not necessarily reflect what our financial position, results of
operations or cash flows would have been absent the aforementioned effects, and may not be
indicative of the financial position, results of operations or cash flows that the we will achieve in
the future.
26.
Our insurance cover could prove inadequate and losses or liabilities which exceed our
maximum cover could have a material adverse effect on our business, financial position
We have taken out insurance to cover various operational risks. However, there is no guarantee
that our current insurance policies will provide appropriate and adequate cover for all potential
losses and liabilities that may arise, or that in the future we will be able to secure adequate
insurance cover on reasonable commercial terms in the future. Losses or liabilities which exceed
our maximum cover could have a material adverse effect on our net assets, financial position
II.
1.
REGULATORY AND LEGAL RISKS
We are subject to risks arising from evolving legislation designed to combat abuses of
employee leasing arrangements and from false self-employment. These risks include
additional payment obligations, fines and the requirement to change the basis of our
business model, which could have a material adverse effect on our business, financial
In the fiscal year ended December 31, 2014, we generated 78% of our revenues in Germany
where, based on the average number of employees in the fiscal year ended December 31, 2014,
approximately 77% of our workforce is employed. In rendering our vehicle engineering services,
our engineers closely collaborate with the engineering units of our automotive OEM and other
customers on the projects which these customers place with us. In order to improve the
efficiency of such collaboration, we often maintain our own facilities in locations on or near the
facilities of our customers. In the vast majority of cases, our customers engage us for pre-defined
engineering projects where we render the agreed engineering product according to parameters
agreed with our customers in advance but where we take responsibility for the planning,
83
execution and cost of the actual engineering work. Under these work package agreements, we
do not take instructions from our customers on how we staff engineering projects and our
employees are not bound by instructions given by our customers.
As a consequence of the increasing trend by automotive OEMs and other producers of automotive
products to outsource engineering tasks to specialized service providers like us, German trade
unions, works council and/or employees may challenge the effectiveness of work package
agreements by alleging that such agreements are “disguised” employee leasing agreements.
Further, German trade unions increasingly express concern that the contractual arrangements
under which vehicle engineering services are rendered to OEMs and other automotive companies
are only structured as work package agreements (Werkverträge) to avoid legal restrictions and
regulations applicable to employee leasing arrangements (Arbeitnehmerüberlassung) in Germany
as well as certain benefits for employees under employee leasing arrangements afforded by
collective bargaining agreements applicable to the automotive industry.
The governing parties CDU, CSU and SPD therefore agreed to “prevent an abuse of work
package agreements and agency work” in the coalition treaty of 2013. Also, in 2013 due to an
initiative of certain Federal States a draft “Act to combat the abuse of work package
agreements” was deferred to the first chamber of the German Parliament but is still pending.
The German government announced in March 2015 that customs authorities shall investigate by
means of intensified inspections under the “Anti-Moonlighting Act”
(Schwarzarbeitsbekämpfungsgesetz) whether work package agreements are abused in practice.
According to press reports, a legislative proposal with the aim to combat sham work package
agreements will be presented in 2015.
While three of our subsidiaries hold employee leasing licenses (Arbeitnehmer
überlassungserlaubnis), currently granted on a temporary basis, and render a limited amount of
our vehicle engineering services to our customers through employee leasing agreements, the
vast majority of our services are structured as work package agreements (Werkverträge). We
take the view that this part of our business cannot be re-qualified as employee leasing
(Arbeitnehmerüberlassung) in general and that we should therefore not be exposed to current
or future regulations of employee leasing. However, there can be no assurance that competent
administrative authorities and/or competent courts do not take a different view of the relevant
legal issues or that no new legislation will be enacted which would subject us to regulation
applicable to employee leasing. Any such development could expose us to certain risks,
including (but not limited to):
Š
the risk that an existing work package agreement is held void if found to be an abusive work
package agreement;
Š
the risk to be obliged to retroactively grant our employees employment terms similar to the
terms and conditions of employment of the respective customer (“equal pay”) including, as
the case may be, a higher salary level as well as additional social security contributions;
Š
the risk of criminal sanctions against key personnel in connection with a failure to deduct
social security contributions related to the equal pay obligation set out above;
Š
the risk that we may lose employees to customers if such employees will be regarded as
employees of our customer (which, according to the recent decision of a regional labor
court may also materialize if an employment lease license had been obtained) or if our
customers become obliged under applicable collective bargaining agreements to make our
employees an employment offer;
Š
the risk of damages to be paid to our customers in the event that they have to take over
employees based on alleged sham work package agreements;
Š
the risk of administrative fines being imposed on us for breaches of employee leasing
regulations;
84
Š
the requirement to change the core of our business model to a licensed employee leasing
agency which is less attractive to our customers and may generate lower revenues or, to avoid
such change of our business model, the requirement to relocate our own engineering facilities
to locations outside our customers’ facilities and/or more remote from our customers’
locations than is currently the case, which may result in significant costs and less efficient
collaboration with our customers;
Š
the requirement to reduce the degree of interaction and coordination on engineering
projects between our own engineering personnel and the personnel of our customers,
which may compromise the quality of our vehicle engineering services, timely delivery of
services and cost efficiency;
Š
the necessity to reduce our workforce in Germany and increase the number of engineers we
employ outside Germany in order to reduce exposure to overly onerous labor law regulations
in Germany which in turn may result in a loss of employees and related know-how, the
necessity to hire qualified personnel outside Germany, and substantial related costs; and
Š
reputational risks.
The realization of any of the above risks may reduce the willingness of our customers in
Germany to engage us for vehicle engineering services projects and/or may reduce, eliminate or
reverse relative cost advantages of using external engineering capacity compared to the internal
engineering departments of OEMs and other producers of automotive products.
In addition, we face certain risks in connection with false self-employment which could
materialize if subcontractors that we hire from time to time are requalified as our employees by
competent administrative authorities and/or competent courts. If subcontractors are requalified
as our own employees, we may incur costs from additional personnel expenses and may be
required to reduce the degree of interaction and coordination with our subcontractors on our
engineering projects, which may compromise the quality of our vehicle engineering services,
timely delivery of services and cost efficiency, or limit the use of subcontractors altogether.
2.
Risks deriving from the potential invalidity of the election of the company-wide works
council (“unternehmenseinheitlicher Betriebsrat”) and the collective agreements entered
into by that committee could have a material adverse effect on our business, financial
At the level of EDAG Engineering GmbH, a company-wide works council has initially been
elected in 2002 by employees of EDAG GmbH & Co KGaA, a predecessor company of EDAG
Engineering GmbH, and has been re-elected every four years since then. EDAG Production
Solutions GmbH & Co KG, EDAG GmbH & Co KGaA and the company-wide works council entered
into a works agreement dated March 31, 2012 according to which the parties agreed, inter alia,
that the companies form a joint operation which is represented by the company-wide works
council. The most recent re-election of the company works council in April 2014 took place with
the participation of employees of EDAG Production Solutions GmbH & Co KG. Since the merger
of Rücker AG into EDAG Engineering GmbH, the Munich works council of Rücker AG exists
beside the company-wide works council at the level of EDAG Engineering GmbH and has formed
an overall joint works council (Gesamtbetriebsrat) with the company-wide works council.
Under the German Works Constitution Act (Betriebsverfassungsgesetz) the formation of a
company-wide works council in the absence of respective collective bargaining agreements is
only possible if no other works council was established at the time of the establishment of the
company-wide works council, the employees have voted for the establishment of such works
council and the formation of works councils is thereby facilitated, or if this combination serves
the worker’s interest.
85
The validity of the most recent re-election of the company-wide works council, which took
place on in April 2014 is currently being challenged before a court by the former Rücker AG
works council in Munich. The works council (inter alia) argues that a company-wide works
council may not be elected by employees of more than one company so that the most recent
election with participation of both the employees of EDAG Production Solutions GmbH & Co
KG and EDAG Engineering GmbH was void. Further, the works council is of the opinion that
also the initial election of the company-works council in 2002 was void as the required
majority had not been reached and that therefore all further elections, including the most
recent one, had also been void.
According to the prevailing view in literature and some jurisdictions of German labor courts, the
consequences of a foundation of a company-wide works council without complying with
applicable law depends on whether or not the violation of law was severe and obvious. If the
court considers the participation of employees of EDAG Production Solutions GmbH & Co KG in
the election of the company-wide works council as a severe and obvious violation of law or
determines any other violation, the re-election of the company-wide works council in April 2014
would likely be considered void with the consequence that all works agreements entered into
by the company-wide works council and/or the overall works council since then would be
invalid. If the court also considers the initial election in 2002 as void, all works agreements ever
entered into by the company-wide works council and the overall works council would likely be
invalid with retroactive effect. To the extent that such void works agreements were beneficial to
us, we would no longer profit from any favorable effects. For example, we may in the event of
an ineffectiveness of a works agreement on short-time work be required to compensate for
savings made on the basis of the works agreement.
To the extent that works agreements beneficial to us are held void by the court, our l business
might be adversely affected and we may be subject to payment obligations, which could have
an adverse effect on our financial condition and results of operations.
3.
We are subject to risks in connection with court proceedings filed against us following the
squeeze-out of minority shareholders of Rücker AG. If we are required to make additional
compensation payments to minority shareholders, this could have a material adverse effect
on our business, financial condition and results of operations.
In 2013, former shareholders of Rücker AG instituted an appraisal proceeding pursuant to the
German Appraisal Proceedings Act (Spruchverfahrensgesetz) against our subsidiary EDAG
Engineering GmbH (formerly ATON Engineering AG) before the Regional Court of Frankfurt am
Main (Landgericht Frankfurt am Main). The proceeding relates to a resolution passed by Rücker
AG’s 2013 general shareholders’ meeting regarding the squeeze-out of Rücker AG’s minority
shareholders in connection with the merger of Rücker AG into EGAG Engineering GmbH
(verschmelzungsrechtlicher Squeeze-out). The minority shareholders held 834,413 shares
equaling 9.96 per cent in Rücker AG at that time. The resolution also provided for cash
compensation of €16.23 per share to those minority shareholders in exchange for their shares
being transferred to EDAG Engineering GmbH pursuant to the merger squeeze-out resolution.
The cash compensation granted to the minority shareholders was equal to the average share
price during the three-months period prior to 3 May 2013 (the date on which the squeeze-out
request was published) while, according to the valuation report prepared by the courtappointed valuation expert (Bewertungsgutachter) in preparation of the shareholders’
resolution, the actual value of shares at the legally relevant valuation date, the date of Rücker
AG’s 2013 general shareholders’ meeting, amounted to €12.46 per share. In their complaint,
Rücker AG’s former minority shareholders claimed that the cash payment did not represent the
actual value of shares of Rücker AG at the relevant valuation date and demanded the court to
determine adequate cash compensation.
In a ruling rendered in February 2015, the Regional Court of Frankfurt am Main rejected the
applications and confirmed that the cash compensation of €16.23 per share was not inadequate
86
and that the compensation payment was not to be increased. Four applicants and the joint
representative of the minority shareholders (Gemeinsamer Vertreter) appealed (Beschwerde) to
the Regional Court of Frankfurt am Main which decided that the complaints should not be
remedied and therefore requested the Higher Regional Court of Frankfurt am Main to give a
ruling thereon. We cannot predict at this stage which view the Higher Regional Court of
Frankfurt am Main will take. We continue to believe that the cash consideration paid was
adequate and will continue to defend ourselves against the actions. However, if the applicants
should prevail in the appraisal proceedings, our subsidiary EDAG Engineering GmbH would be
obliged to make an additional compensation payment to each of the minority shareholders in
an amount to be determined by the competent court. Depending on the valuation of Rücker AG
applied by the court in such case, any such additional payment obligation could have an adverse
effect on our financial condition and results of operations.
4.
We may be unable to protect our intellectual property effectively, which could have a
The quality of our services is highly dependent upon our technological and engineering knowhow and the scope and limitations of any proprietary intellectual property rights therein. We
have obtained or applied for a number of intellectual property rights, such as patents, that are
of considerable importance to our business.
The process of seeking patent protection can be lengthy and expensive. Furthermore, patents
may not be granted on currently pending or future applications or may not be of sufficient
scope or strength to provide us with meaningful protection or commercial advantage. In
addition, while there is a presumption that patents are valid, the granting of a patent does not
necessarily imply that it is effective or that possible patent claims can be enforced to the degree
necessary or desired. Furthermore, the vast majority of our know-how and business secrets are
not patented or cannot be protected through intellectual property rights. Consequently, there is
a risk that certain parts of our know-how and business secrets are transferred to collaboration
partners, customers or suppliers, in particular when any of our employees take up new
employment with any of these parties. This poses a risk that competitors or customers will copy
our know-how without incurring any expenses of their own. In addition, it is the nature of our
engineering agreements with our customers that the results of our engineering work are
provided to the customers for their use. Any innovations that we introduce into our designs of
cars, components, systems and production lines can therefore be used by our customers on other
engineering projects in which we are not involved or in which our competitors may be involved,
and we are therefore under constant pressure to further innovate.
Moreover, we have concluded a number of license, cross-license, and cooperation and
development agreements with our customers and other third parties under which our Group is
granted rights in intellectual property and/or know-how of such third parties. It is possible that
license agreements could be terminated, for example, in the event of the licensing partner’s
insolvency or bankruptcy and/or in the event of a change-of-control in either party, leaving our
Group with reduced access to intellectual property rights to commercialize its own technologies.
5.
There is a risk that we may infringe the intellectual property rights of third parties, which
could have a material adverse effect on our business, financial condition and results of
operations.
There is a risk that we may infringe the intellectual property rights of third parties, since our
competitors, suppliers and customers also submit a large number of inventions for intellectual
property protection. It is not always possible to determine with certainty whether processes,
methods or applications we use are subject to the intellectual property rights of third parties.
Therefore, third parties could assert infringements of intellectual property rights (including
87
illegitimate ones) against our Group. As a result, we could be required to cease using or
marketing the relevant technologies or services in certain countries. In addition, we could be
liable to pay compensation for infringements or could be forced to purchase licenses to make
use of technology from third parties. The realization of any of these risks could have a material
6.
We may not have validly acquired employee inventions or could fail to validly acquire
them in the future, which could have a material adverse effect on our business, financial
There is a risk that we have failed or will fail to properly claim the inventions of our employees.
Present or former employees who made or make employee inventions may continue to be the
owners of the rights to these inventions if we fail to claim the invention in a timely manner. If
this should be the case and we nevertheless registered an employee invention with us as the
owner of a patent or utility model and/or used an employee invention as such, then the
employee who made the invention may have a claim for transfer of the patent/of the utility
model against us, and may be able to assert claims for damages for the unauthorized use of his
or her invention (e.g. disgorgement of profits or notional license fees). In addition, a claim could
be asserted against us to enjoin our use of the invention, or we could be forced to enter into a
license agreement providing for the payment of royalties in order to use the invention in the
future, or we may have to acquire the invention. Furthermore, there is a risk that employees
may have claims for employee invention compensation which have not yet been fully satisfied.
Should we have failed to validly acquire employee inventions or should we potentially fail to
validly acquire them in the future or should employees have claims for employee invention
compensation which have not been fully satisfied, this could have a material adverse effect on
our business, financial condition and results of operations.
7.
We are exposed to the risk of product-related crime and industrial espionage, which could
have a material adverse effect on our business, financial condition and results of
operations.
As a provider of vehicle engineering services to the automotive industry and due to our
knowledge of certain material business secrets of our customers, we face certain crime risks.
These include, among others, theft and misuse of automotive product designs developed by
ourselves or by our customers (including attempts at these crimes). The sophistication and
complexity of product-related crime has increased significantly in recent years. The risk of
material damage cannot easily be estimated, in particular, because, an exact number or cases of
product related crimes is not available. The impact of product related crimes on business
activities differs by case and is influenced by factors specific to regions and products.
Furthermore, there is a risk of loss of sensitive business information, other data or the tangible
and intangible expertise of ourselves or our customers due to an ineffective protection of
confidential information, in particular as a result of any possible form of offence such as
industrial espionage. Our key employees and officers have access to sensitive confidential
information relating to our business as well as the business of our customers such as insights
about strategic developments, business case planning and core technology. We have
implemented various measures to protect such confidential data. However, in the event that
competitors, our customers’ competitors, third parties or the general public gain access to such
confidential information in spite of our protective measures, be it on purpose or by accident,
our market position could be materially weakened and lead to a loss of reputation and,
consequently, of customers. The realization of any of these risks could have a material adverse
88
8.
Governmental regulations could increase our costs and could adversely affect our business
We must observe a large number of different regulatory systems across the world that change
frequently and are continuously evolving and becoming more stringent, in particular with
respect to environmental regulations as well as workers’ health regulations. In addition, for our
sites and operations, we require various permits and we have to comply with the requirements
specified therein. In the past, adjusting to new requirements has required significant
investments and we assume that further significant investments in this regard will be required in
the future. Furthermore, any additional regulation restricting or limiting car traffic with an aim
at reducing carbon emissions could lead to a material decrease in car sales and consequently
adversely affect demand for our vehicle engineering services.
9.
We might be exposed to tax risks resulting from deviating interpretations of applicable tax
laws by the tax authorities or adverse amendments to current legislation, which could
have a material adverse effect on our business, financial condition and results of
operations.
The Company and its subsidiaries are regularly subject to tax audits in Germany and abroad. The
most recent tax audit of most of the German companies of the Group covered the fiscal years
2004-2007. A German tax audit is currently pending for the years 2008-2010. The tax assessment
notices issued for the tax periods not yet audited are not final and are subject to full review and
change by the tax authorities. As a consequence of current or future tax audits in Germany or
abroad, or as a result of divergent interpretations of tax law by the tax authorities or tax courts,
the tax burden of the relevant entities of the Group could be materially higher than what we
currently anticipate or from what is reflected in our financial statements included elsewhere in
this prospectus.
For example, because of the Group’s international activities, it cannot be excluded that a tax
authority successfully claims the existence of a permanent establishment in another jurisdiction
and allocates a certain amount of profits to such permanent establishment. To the extent that
these profits have already been taxed in another jurisdiction such re-allocation may potentially
result in double taxation, if no double taxation relief is available. Moreover, our Group
companies are engaged in numerous intra-group cross-border transactions. Should the tax
authorities demand the adjustment of the Group’s transfer prices this may potentially result in
double taxation, if no double taxation relief is available.
In addition, there are several rules in the German tax laws restricting the tax deductibility of
interest expenses. The tax deductibility of interest expenses depends, among other things, on
the annual tax EBITDA. Should the interest expenses not meet the respective tests and thus not
be tax deductible, this could result in a higher tax burden.
We have recently implemented business reorganizations and transferred certain business units
intra-group at tax book value. Should the tax authorities deny the roll-over relief, this could
result in additional taxes for the transferor company. To the extent the transferee company
cannot obtain tax savings in connection with such restructuring, this could result in additional
taxes and interest. In addition, due to a recent judgment of the German Federal Constitutional
Court, it is expected that the the German legislator will retroactively increase the tax basis for
real estate transfer tax, inter alia, on intra-group restructurings, as the German Federal
Constitutional Court held that the previous simplified assessment procedure
(Bedarfswertverfahren) must be replaced by an assessment procedure resulting in the fair
market value as tax basis for real estate transfer tax. As a result, we might be subject to an
additional amount of approximately € 1.0 million real estate transfer tax. We have not yet made
a provision in our financial statements with regard to such increased real estate transfer tax.
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Furthermore, our business is subject to the general tax environment in the countries in which we
operate. Changes in tax legislation (potentially even with retroactive effect), administrative
practice or case law or treatments of tax facts by the relevant tax authorities which deviate from
our assessments could result in a future tax burden that is materially higher than what we
currently anticipate.
The realization of any of these risks, alone or in combination, may have adverse effects on our
10.
We sell our services internationally and face legal and regulatory risks in the countries into
which we sell our services, which could have a material adverse effect on our business,
We currently sell our services to customers primarily in Germany, and more generally in Europe.
We are already, and expect to become increasingly as we expand our operations outside Europe,
subject to a wide range of laws and regulations, including but not limited to laws and
regulations concerning competition, unfair trading, anti-corruption, advertising, employment,
customs, environmental protection, laws imposing sales and other taxes, and other laws and
regulations that are directly or indirectly related to our business operations in each of these
jurisdictions. Additional laws or regulations or unexpected changes in the regulatory
requirements in any of the countries in which we operate might increase our cost of doing
business, decrease demand for our products and services, restrict our flexibility or prevent us
from doing business at all in any such country. If we violate or are alleged to have violated
applicable, or fail to adapt to amended, laws or regulations, we could become subject to
significant fines, legal fees and related costs, reputational damage and other potential costs or
liabilities. The occurrence of any of these events, alone or in combination, could have a material
11.
We are exposed to compliance risks and might be subject to fines and follow-on claims for
damages in relation to alleged or actual anti-competitive behavior or due to the violation
of anticorruption laws or international sanctions, which could have a material adverse
We are exposed to a large variety of business and compliance risks. Since our domestic and
foreign key employees retain a certain amount of operational and decision-making flexibility,
we cannot guarantee that our domestic and foreign key employees will not take actions, or, in
particular cases, take fraudulent actions against us or third parties, or experience problems or
conflicts of interests that could be detrimental to our business, financial condition and results of
operations. We compete for attractive orders from customers some of which operate in
developing countries with underdeveloped or unstable political, legal and regulatory regimes as
well as inconsistent enforcement of laws and regulations.
In this connection, individual employees of our Group could violate applicable laws, for example in
the areas of antitrust law as well as anticorruption laws. We might become subject of investigations
by competition authorities and might be exposed to fines imposed by such authorities and follow-on
claims for damages raised against us by third parties. The amount of any such fines and follow-on
claims for damages could be substantial. In addition, alleged or actual anti-competitive behavior
might seriously disrupt business relationships with business partners.
Moreover, while we have not engaged in any improper activity in any sanctioned jurisdiction of
which we are aware, a member of the Group currently intends to submit proposals to enter into two
contracts to provide engineering services to an Iranian state-owned entity relating to the design of
components and manufacturing operations lines for the production of automobiles in Iran, which is
a country subject to economic sanctions imposed by United States and the European Union, among
others. The anticipated revenue from these two potential contracts, which are expected to have a
term of several years, would, if awarded, amount to less than 1% of the Group’s total revenues for
the year ended December 31, 2014. No proceeds of the offering would be used by the Company or
any member of the Group to pursue or perform transactions involving Iran, and no U.S. persons or
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currency will be involved. We believe that the proposed activity is currently not targeted under
“secondary sanctions” imposed upon Iran by the United States, including sanctions against activity in
support of Iran’s automotive sector, due to certain temporary suspensions of these sanctions by the
United States. We cannot rule out the possibility that the temporary suspension of sanctions
currently in place will expire in the future without being replaced by comparable sanctions relief,
and thus that our intended activity may become subject to penalties under U.S. law at some point in
the future, especially given the long-term nature of the proposed contracts. In particular, even if the
temporary suspension of U.S. secondary sanctions is replaced by implementation of sanctions relief
under the July 14, 2015 “Joint Comprehensive Plan of Action” accord between Iran, the United
States, China, France, Germany, Russia, the United Kingdom and the European Union, the sanctions
could “snap back” in place at a future date upon a determination that Iran has violated its
commitments under the accord. Renewed sanctions could be accompanied by additional measures
further restricting dealings with Iran. Should that occur and render our activities in Iran subject to
sanctions, we could be subject to the risk of penalties or other economic liabilities at that time.
Moreover, while certain of the U.S. secondary sanctions against Iran directed at the automotive
sector are currently suspended, this suspension does not extend to all activities. While we have taken
steps to ensure that any activities undertaken by the Group in Iran will not be subject to these
sanctions, we cannot assure you that, through inadvertence or otherwise, our activities might cause
a member of the Group to become subject to penalties under U.S. or other sanctions programs.
The realization of any of these risks, alone or in combination, could have a material adverse
12.
Adverse judgments or settlements resulting from legal proceedings could expose us to
monetary damages and limit our ability to operate our business.
We may become involved from time to time in private actions, investigations and various other
legal proceedings by employees, suppliers, competitors, government agencies or others. The
results of any such litigation, investigations and other legal proceedings are inherently
unpredictable. Any claims against us, whether meritorious or not, could be time-consuming,
result in costly litigation, damage our reputation, require significant amounts of management
time and divert significant resources. If any of these legal proceedings were to be determined
adversely to us, or if we were to enter into a settlement arrangement, we could be exposed to
monetary damages or limits on our ability to operate our business, which could have a material
13.
Changes in accounting standards could have a material adverse effect on our financial
condition and result of operations.
Our consolidated financial statements are issued in accordance with International Financial
Reporting Standards as adopted in the European Union (IFRS). New or changed accounting
standards, for example the recently introduced IFRS 15, which entails a change of how revenue
is to be recognized and evaluated, and the amended IFRS 17, which will no longer distinguish
between finance leases and operating leases, may lead to adjustments in the relevant
accounting positions which could have a material adverse effect on our financial condition and
III.
1.
RISKS RELATED TO OUR SHARES AND THE OFFERING
Following the offering, our Selling Shareholder will continue to exercise significant
influence on the Company and thereby have, inter alia, a substantial influence on matters
submitted to a vote of the Company’s shareholders meeting and change of control
matters, and its interest may conflict with those of our other shareholders.
Following the successful completion of this offering and assuming placement of all the Offer
Shares and full exercise of the Greenshoe option, our Selling Shareholder together with HORUS
Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig which might acquire
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Offer Shares in connection with this Offering on a non-preferential basis (see “C. The Offering—
XVI. Interests of Parties Participating in the Offering”), will hold at least 59.75% of the
outstanding share capital of the Company. Therefore, the Selling Shareholder will continue to
exercise substantial control over the Company. In particular, the Selling Shareholder will have a
substantial influence on matters submitted to a vote of the Company’s shareholders meeting, such
as the election and removal of members of the board of directors, declaration of dividends, capital
increases and capital structure, amendments to the articles of association as well as other
important matters. For a period starting on the first day of trading of the shares of the Company
on the Frankfurt Stock Exchange (currently expected to take place on December 2, 2015) and
ending on the day of the second ordinary shareholders’ meeting of the Company after the first
day of trading, however, at least for a period of 19 months after the first day of trading, the
Selling Shareholder has undertaken to exercise its voting rights with respect to such number of
shares of the Company directly or indirectly held by the Selling Shareholder upon settlement of
the offering in a restrictive manner regarding the election and removal of members of the Board
of Directors and the provision in the articles of association that provides for the no casting vote of
the chairman. For the above stated period, the members of the Board of Directors which have
been elected with the voting rights of the Selling Shareholder will therefore not constitute the
majority of the Board of Directors. Furthermore, the Selling Shareholder agreed to procure that
any persons that have control over the Selling Shareholder and own shares in the Company, will
also only exercise their voting rights with regard to shares of the Company in accordance with the
above described voting restrictions.
The Selling Shareholder will also have a substantial influence in change of control matters and,
subject to corporate governance protections afforded by law, may take other actions that might
not be favorable to the shareholders as a whole. The substantial ownership of the Selling
Shareholder generally enables the Selling Shareholder to block the adoption of shareholders
resolutions which it does not support and, in such event, investors generally may not be able to
affect the outcome of any shareholder vote. In addition, through the members of the board of
directors who are related to the Selling Shareholder, the Selling Shareholder may exert
significant influence on the Company.
In addition, the interests of the Selling Shareholder may be different from our interests or those of
other shareholders. The ownership stake of the Selling Shareholder may have the effect of making
certain transactions more difficult or impossible without the support of the Selling Shareholder,
and may have the effect of delaying, postponing or preventing certain major corporate actions,
including a change of control in the Company, and could thus prevent mergers, consolidations,
acquisitions or other forms of combination that might be advantageous for investors.
Furthermore, under its existing financing arrangements which have a term until November 2018,
the Selling Shareholder is subject to restrictions on the incurrence of additional financial
indebtedness measured on a group level (including ourselves) as well as on the level of financial
indebtedness which may be incurred by its subsidiaries (including ourselves). These restrictions may
cause the Selling Shareholder to attempt to limit the amount of financial indebtedness we incur in
order to avoid a breach of such restrictions under its financing arrangements.
The realization of the Selling Shareholder’s interests which are in conflict with those of the
Company or the other shareholders may have a material adverse effect on the value of our
shares and our business, financial condition and results of operations.
2.
If any person should acquire control of the Company in the future, our shareholders may
not realize any change-of-control premium on their shares, as neither German nor Swiss
Takeover law rules are applicable to us.
Because we are incorporated in Switzerland, but our shares will only be admitted to trading on
the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse), neither the provisions of the German Takeover Code (Wertpapiererwerbsund Übernahmegesetz, “WpÜG”), nor the Swiss law rules set forth in the Swiss Stock Exchange
and Securities Dealer Act (“SESTA”) regarding voluntary and obligatory takeover offers will be
applicable to us.
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In the Underwriting Agreement (as defined below), the Selling Shareholder will agree with the
Underwriters (as defined below) that it will not, for a period of three years from the settlement
of the offering of the Company, directly or indirectly, enter into an agreement with a third
party to sell a position in the Company which, the Selling Shareholder knows, will result in a
controlling interest of the purchaser, unless such purchaser contractually commits to extend a
tender offer to the other shareholders of the Company offering a purchase price per share
which is at least equal to the price contractually agreed between the Selling Shareholder and
the purchaser. The Selling Shareholder’s covenant is only valid to the extent that the purchaser
would be under an obligation (and no exemption would be available from the duty) to extend a
mandatory tender offer to the other shareholders of the Company if German takeover laws
were applicable in case of such a transaction and only for as long as neither Swiss nor German
takeover laws apply. Subject to certain conditions, transfers to or amongst affiliates of the
Selling Shareholder are exempt. The Selling Shareholder’s undertaking does not give rise to any
rights of third parties and the Selling Shareholder is not obliged to ensure that the purchaser
actually adheres to its contractual obligation to extend an offer to other shareholders of the
Company.
However, after the expiry of the covenant of the Selling Shareholder as described above, or if a
purchaser does not adhere to its contractual obligation to extend an offer to other shareholders
of the Company, a third party could acquire shares in the Company constituting a controlling
interest within the meaning of either the WpÜG or the SESTA with no requirement for a
concurrent offer to be made to other shareholders to acquire all of the shares held by them.
Furthermore, such an interest could also be acquired by a third party during the term of the
covenant of the Selling shareholder as described above through purchases in the market. In
either case the lack of a requirement to make an obligatory offer to outside shareholders could
prevent such outside shareholders from realizing any change-of-control premium on their
shares. Due to the non-applicability of the relevant rules of the WpÜG and the SESTA regarding
voluntary tender offers for shares, a third party may also launch a tender offer to selected, but
not all shareholders.
3.
The offering may not be completed if the Joint Bookrunners terminate the Underwriting
Agreement or the Company withdraws from the offering.
On November 20, 2015, Morgan Stanley & Co. International plc, London, United Kingdom,
Deutsche Bank Aktiengesellschaft, Frankfurt, Germany, COMMERZBANK Aktiengesellschaft and
M.M. Warburg & CO (AG & Co.) KGaA (the “Underwriters”) entered into an agreement for the
underwriting of 10,062,500 of the Company’s shares in connection with the offering with a view
to offering these shares to investors (the “Underwriting Agreement”). The Underwriting
Agreement can be terminated by the Underwriters under certain circumstances. If the
Underwriting Agreement is terminated, the offering will lapse or the offering will not take
place, in which case any allotments already made to investors will be invalidated and investors
will have no claim for delivery. Claims with respect to subscription fees already paid and costs
incurred by an investor in connection with the subscription will be governed solely by the legal
relationship between the investor and the financial intermediary to which the investor
submitted its purchase order. Investors who engage in short-selling bear the risk of being
unable to satisfy their delivery obligations.
4.
Our ability to pay dividends depends, inter alia, on our financial condition and results of
operations.
The Company is a holding company with no significant assets other than, following the
Contribution, the direct and indirect equity interests in its subsidiaries. The Company’s ability to
pay dividends to its shareholders depends on the availability of sufficient legally distributable
profit, which depends on the performance of its subsidiaries and their ability to distribute funds
to the Company, and/or on the availability of distributable capital reserves at the Company
level. Concurrently with the determination of the Offer Price (as defined in “—III. Risks related
to our shares and the offering—5. Our shares have not previously been publicly traded, and
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there is no guarantee that an active and liquid market for our shares will develop and therefore
investors may not be in a position to sell their shares in the Company quickly or at or above the
Offer Price.”), the Selling Shareholder will contribute all shares in EDAG Engineering Schweiz
Sub-Holding AG to the Company by way of the Contribution. The contribution value of EDAG
Engineering Schweiz Sub-Holding AG will increase the capital reserves shown on the
unconsolidated balance sheet of the Company. The contribution value of EDAG Engineering
Schweiz Sub-Holding AG at the time of the Contribution will not be based on a valuation report
prepared by a third party but on the market value of the Company as determined in the
Offering. This method of determining the contribution value of EDAG Engineering Schweiz SubHolding AG assumes that the market value of the Company determined in the Offering (i.e. the
Offer Price, multiplied by all 25,000 thousand outstanding shares of the Company) represents
the sum of (i) the net asset value of the Company immediately prior to the Contribution plus (ii)
the value of all of the shares in EDAG Engineering Schweiz Sub-Holding AG. The contribution
value of EDAG Engineering Schweiz Sub-Holding AG is therefore the market value of the
Company determined in the Offering minus the net asset value of the Company immediately
prior to the Contribution. Assuming a placement of the Offer Shares at the mid-point of the
Price Range, the market value of the Company will be €537,500 thousand (Offer Price of €21.50,
multiplied by 25,000 thousand shares of EDAG Engineering Group AG). In order to arrive at the
contribution value for EDAG Engineering Schweiz Sub-Holding AG, this number will be reduced
by the net asset value of the Company prior to the Contribution (approximately €340 thousand,
calculated as the share capital of the Company amounting to €920 thousand as of November 2,
2015 minus costs related to the incorporation of the Company amounting to €80 thousand, as
shown in the audited opening statement of financial position of the Company as of November
2, 2015, as well as the expected costs related to the Contribution amounting to approximately
€500 thousand). Assuming a placement of the Offer Shares at the mid-point of the Price Range,
the contribution value will therefore be approximately €537,160 thousand. No other valuation
will be conducted for the purposes of determining the contribution value.
The contribution value has not been audited and may be subject to change in the future. In
connection with the preparation of its unconsolidated annual financial statements, starting with
the financial period ended December 31, 2015, the Company will determine whether the
contribution value will need to be reassessed. If the book value exceeds the net market value of
the contribution or the value determined using a discounted cash flow method in a sustained
manner, the Company may be required to recognize a loss resulting from the impairment of the
book value of the investment in EDAG Engineering Schweiz Sub-Holding AG. If the Company
presents an accumulated loss in the balance sheet and its shareholders approve to offset the
accumulated loss against the capital reserves, this could lead to a reduction of the capital reserves
and reduce the potential of distribution from the capital reserves.
The ability of a subsidiary to disburse dividends to the Company could be affected by a claim or
other action by a third party, including a creditor, or by laws which regulate the payment of
dividends by companies, including, but not limited to, minimum capital requirements applicable
to the Company’s subsidiaries. Our subsidiaries’ ability to distribute funds to the Company
depends on, inter alia, the availability of sufficient legally distributable profit of such
subsidiaries. In addition, certain reserves must be established by law and have to be deducted
when calculating the distributable profit. The Company cannot offer any assurance that legally
distributable profit or capital reserves will be available in any given fiscal year.
Even if there are sufficient legally distributable profit or capital reserves available, the Company
may not pay a dividend or distribution of capital reserves for a variety of reasons. Payment of
future dividends and other distributions will depend on our earnings, strategy, future outlook,
financial condition and other factors, including liquidity requirements, as well as tax and other
legal considerations. In addition, future debt financing arrangements may contain covenants
which impose restrictions on our business and on our ability to pay dividends under certain
circumstances. Any of these factors, individually or in combination, could restrict our ability to
pay dividends.
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5.
Our shares have not previously been publicly traded, and there is no guarantee that an
active and liquid market for our shares will develop and therefore investors may not be in
a position to sell their shares in the Company quickly or at or above the Offer Price.
Prior to this offering, there has been no public trading market for our shares. The placement
price (the “Offer Price”) is being determined by way of a book building process. There is no
guarantee that this Offer Price will correspond to the price at which the Company’s shares will
be traded on the stock exchange after this offering or that, following the listing, an active
trading in our shares will develop or be maintained. The failure to develop or maintain an active
trading may affect the liquidity of our shares and we cannot assure you that the market price of
our shares will not decline below the Offer Price. Consequently, investors may not be in a
position to sell their shares in the Company quickly or at or above the Offer Price.
6.
Our share price could fluctuate significantly in response to numerous factors, including, but
not limited to, fluctuations in actual or projected results of operations and changes in
projected earnings, and if our share price declines, investors could lose all or part of their
investment.
Following this offering, our share price will be affected primarily by the supply and demand for
our shares and could fluctuate significantly in response to numerous factors, many of which are
beyond our control, including, but not limited to, fluctuations in actual or projected results of
operations, changes in projected earnings or failure to meet securities analysts’ earnings
expectations, the absence of analyst coverage on our company, changes in trading volumes in
our shares, changes in macroeconomic conditions, the activities of competitors and suppliers,
changes in the market valuations of similar companies, changes in investor and analyst
perception in our Company or our industry, changes in the statutory framework in which we
operate and other factors, and can therefore be subject to substantial fluctuations. In addition,
general market conditions and fluctuations of share prices and trading volumes could lead to
pricing pressures on our shares, even though there may not be a reason for this based on our
business performance or earnings outlook. If our share price or the trading volume in our shares
decline as a result of the realization of any or all of these events, investors could lose part or all
of their investment in our shares.
7.
Future offerings of debt or equity securities by us could adversely affect the market price
of our shares, and future capitalization measures could substantially dilute the interests of
We may require additional capital in the future to finance our business operations and growth.
We may seek to raise capital through offerings of debt securities (potentially including
convertible debt securities) or additional equity securities. An issuance of additional equity
securities or securities containing a right to convert into equity, such as convertible debentures
and option debentures, could potentially reduce the market price of our shares and would
dilute the economic and voting rights of the Selling Shareholder if made without granting
subscription rights to the Selling Shareholder. Because the timing and nature of any future
offering would depend on market conditions at the time of such an offering, we cannot predict
or estimate the amount, timing or nature of future offerings. In addition, the acquisition of
other companies or investments in companies in exchange for newly issued shares of the
Company, as well as the exercise of stock options by our employees in the context of the
existing and possible future stock option programs or the issuance of the Company’s shares to
employees in the context of possible future employee stock participation programs, could lead
to a dilution of the economic and voting rights of the Selling Shareholder. Our shareholders
thus bear the risk that such future offerings could reduce the market price of our shares and/or
dilute their shareholdings.
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8.
If our Selling Shareholder or other shareholders of the Company effect a sale of a
substantial number of our shares in the stock market, the market price of our shares could
decline.
Sales of a substantial number of our shares in the public market following the successful
completion of this offering or following the expiration of the shareholder lock-up agreement,
or the perception that such sales might occur, could depress the market price of our shares and
could impair our ability to raise capital through the sale of additional equity securities. If, for
example, our Selling Shareholder or one or more other shareholders of the Company effect a
sale or sales of a substantial number of our shares in the stock market, or if the market believes
that such sales might take place, the market price of our shares could decline.
9.
An investment in our shares by an investor whose principal currency is not the Euro may
be affected by exchange rate fluctuations.
Our shares will be quoted and traded in Euro, and any dividends to be paid in respect of them
will be declared in Swiss Francs, but paid out in Euro. An investment in our shares by an investor
whose principal currency is not the Euro exposes the investor to foreign currency exchange rate
risk on the trading price of our shares. Investors whose functional currency is not the Swiss Franc
will bear exchange rate risk with respect to the Swiss Franc. Any depreciation of the Euro or the
Swiss Franc in relation to an investor’s principal currency will reduce the value of the investment
in our shares or any dividends, respectively, in relation to such currency.
10.
Shareholders outside Switzerland may not be able to exercise pre-emptive rights in future
issuances of equity or other securities that are convertible into equity.
Under Swiss law, shareholders may receive certain pre-emptive rights to subscribe on a pro rata
basis for issuances of equity or other securities that are convertible into equity. Due to laws and
regulations in their respective jurisdictions, however, non-Swiss shareholders may not be able to
exercise such rights unless we take action to register or otherwise qualify the rights offering
under the laws of that jurisdiction. There can be no assurance that we would take any such
action and we will have the discretion to decide not to take such action in one or more
jurisdictions, including the European Union and United States. If shareholders in such
jurisdictions were unable to exercise their subscription rights, their ownership interest in the
Company would be diluted.
11.
U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us
or our executive officers.
We are organized under the laws of Switzerland and our jurisdiction of incorporation is Arbon,
Canton of Thurgau, Switzerland. Moreover, none of our directors and executive officers are
residents of the United States, and all or a substantial portion of the assets of such persons are
located outside the United States. As a result, it may not be possible for investors to effect
service of process within the United States upon us or upon such persons or to enforce against
us or them judgments obtained in U.S. courts, including judgments in actions predicated upon
the civil liability provisions of the federal securities laws of the United States. We have been
advised by our Swiss counsel that there is doubt as to the enforceability in Switzerland of
original actions, or in actions for enforcement of judgments of U.S. courts, of civil liabilities to
the extent predicated upon the federal and state securities laws of the United States. Original
actions against persons in Switzerland based solely upon the U.S. federal or state securities laws
are governed, among other things, by the principles set forth in the Swiss Federal Act on
International Private Law of December 18, 1987, as amended (“PILA”). This statute provides that
the application of provisions of non-Swiss law by the courts in Switzerland shall be precluded if
the result is incompatible with Swiss public policy. Also, mandatory provisions of Swiss law may
be applicable regardless of any other law that would otherwise apply.
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Switzerland and the United States do not have a treaty providing for reciprocal recognition and
enforcement of judgments, other than arbitral awards, in civil and commercial matters. The
recognition and enforcement of a judgment of the courts of the United States in Switzerland is
governed by the principles set forth in the PILA. This statute provides in principle that a
judgment rendered by a non-Swiss court may be enforced in Switzerland only if:
Š
the non-Swiss court had jurisdiction pursuant to the PILA;
Š
the judgment of such non-Swiss court has become final and non-appealable;
Š
the judgment does not contravene Swiss public policy;
Š
the court procedures and the service of documents leading to the judgment were in
accordance with the due process of law; and
Š
no proceeding involving the same position and the same subject matter was first brought in
Switzerland, or adjudicated in Switzerland, or was earlier adjudicated in a third state and this
decision is recognizable in Switzerland.
Accordingly, U.S. shareholder and others who may wish to enforce a judgment of a U.S. court or
enforce the securities or other laws of the United States may be unable to enforce such a
judgment against us or our executive officers or obtain a judgment predicated upon U.S. law.
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B.
I.
GENERAL INFORMATION
RESPONSIBILITY STATEMENT
EDAG Engineering Group AG, with its registered seat in Arbon, Switzerland, and its business
address at Schlossgasse 2, 9320 Arbon, Switzerland, a Swiss stock corporation
(Aktiengesellschaft) registered with the commercial register (Handelsregister) of the canton of
Thurgau (the “Commercial Register”), under the number CHE-294.533.486, together with
Morgan Stanley & Co. International plc, London, United Kingdom (“Morgan Stanley”) and
Deutsche Bank Aktiengesellschaft, Frankfurt am Main, Germany (“Deutsche Bank” and together
with Morgan Stanley, the “Joint Global Coordinators” and “Joint Bookrunners”),
COMMERZBANK Aktiengesellschaft (“COMMERZBANK”) and M.M. Warburg & CO (AG & Co.)
KGaA (“M.M. Warburg & CO”, and together with COMMERZBANK the Co-Lead Managers”) and
together with the Joint Global Coordinators, the “Underwriters”), have assumed responsibility
for the contents of this prospectus pursuant to Section 5 para. 4 of the German Securities
Prospectus Act (Wertpapierprospektgesetz), and declare that the information contained in this
prospectus is, to the best of their knowledge, correct and contains no material omissions.
If any claims are asserted before a court of law based on the information contained in this
prospectus, the investor appearing as plaintiff may have to bear the costs of translating this
prospectus prior to the commencement of the court proceedings pursuant to the national
legislation of the Member States of the European Economic Area (the “EEA”).
II.
PURPOSE OF THIS PROSPECTUS
This prospectus relates to the offering of 10,062,500 bearer shares of the Company
(Inhaberaktien) with a nominal value of CHF 0.04 each and each such share with full dividend
rights for the fiscal year ending December 31, 2015 and all subsequent fiscal years, (the
“Offering”) consisting of:
Š
8,750,000 bearer shares (Inhaberaktien) with a nominal value of CHF 0.04 each (the “Base
Shares”) from the holdings of ATON GmbH, Munich, Germany (the “Selling Shareholder”)
(see “M. Shareholder Information—I. Current Shareholder”); and
Š
holdings of the Selling Shareholder in connection with a potential over-allotment (the
“Over-Allotment Shares” and, together with the Base Shares, the “Offer Shares“).
For purposes of admission to trading on the regulated market segment (regulierter Markt) of
the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the
sub-segment of the regulated market with additional post-admission obligations (Prime
Standard) of the Frankfurt Stock Exchange, this prospectus relates to 25,000 thousand bearer
shares (Inhaberaktien) with a nominal value of CHF 0.04 each with full dividend rights for the
fiscal year ending December 31, 2015 and all subsequent fiscal years.
The Offering consists of initial public offerings in the Federal Republic of Germany (“Germany”)
and the Grand Duchy of Luxembourg (“Luxembourg”) and private placements in certain
jurisdictions outside Germany and Luxembourg. In the United States of America (the “United
States”), the Offer Shares will be offered and sold only to qualified institutional buyers
(“Qualified Institutional Buyers” or “QIBs”) as defined in Rule 144A under the United States
Securities Act of 1933, as amended (the “Securities Act”). Outside the United States, the Offer
Shares will be offered and sold only in offshore transactions in reliance on Regulation S under
the Securities Act (“Regulation S”).
III.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. A forward-looking statement is any
statement that does not relate to historical facts or events or to facts or events as of the date of
this prospectus. This applies, in particular, to statements in this prospectus containing
information on our future earnings capacity, plans and expectations regarding our business
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growth and profitability, and the general economic conditions to which we are exposed.
Statements made using words such as “predicts”, “forecasts”, “plans” or “expects” may be an
indication of forward-looking statements.
The forward-looking statements in this prospectus are subject to risks and uncertainties, as they
relate to future events, and are based on estimates and assessments made to the best of the
Company’s present knowledge. These forward-looking statements are based on assumptions,
uncertainties and other factors, the occurrence or non-occurrence of which could cause the
Company’s actual results, including the financial condition and profitability of our Group, to
differ materially from or fail to meet the expectations expressed or implied in the
forward-looking statements. These expressions can be found in several sections in this
prospectus, particularly in the sections entitled A. “Risk Factors”, K. “Markets and Competition”,
L. “Business” and X. “Recent Developments and Outlook”, and wherever information is
contained in this prospectus regarding our intentions, beliefs, or current expectations relating to
its future financial condition and results of operations, plans, liquidity, business outlook,
growth, strategy and profitability, as well as the economic and regulatory environment to which
we are subject.
In light of these uncertainties and assumptions, it is also possible that the future events
mentioned in this prospectus will not occur. In addition, the forward-looking estimates and
forecasts reproduced in this prospectus from third-party reports could prove to be inaccurate
(for more information on the third-party sources used in this prospectus, see “B. General
Information—IV. Sources of Market Data”). Actual results, performance or events may differ
materially from those in such statements due to, among other reasons:
Š
changes in general economic conditions in the markets in which the Group operates, including
changes in the unemployment rate, the level of consumer prices, wage levels etc.;
Š
demographic changes, in particular with respect to Germany;
Š
changes affecting interest rate levels;
Š
changes in the competitive environment and in the competition level;
Š
changes affecting currency exchange rates;
Š
the occurrence of accidents, natural disasters, fire, environmental damage or systemic delivery
failures;
Š
inability to attract and retain qualified personnel;
Š
strikes;
Š
political changes; and
Š
changes in laws and regulations.
Moreover, it should be noted that neither the Company nor any of the Underwriters assumes
any obligation, except as required by law, to update any forward-looking statement or to
conform any such statement to actual events or developments.
See “A. Risk Factors” for a further description of some of the factors that could influence the
Company’s forward-looking statements.
IV.
SOURCES OF MARKET DATA
To the extent not otherwise indicated, the information contained in this prospectus on the
market environment, market developments, growth rates, market trends and competition in the
markets in which the Group operates are based on the Company’s and the Underwriters’
assessments. These assessments, in turn, are based in part on internal observations of the market
and on various market studies.
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The following sources were used in the preparation of this prospectus:
Š
Lünendonk: Lünendonk®-Sonderanalyse 2014. Exklusive Auszüge der Lünendonk®-Studie,
Führende Anbieter von Technologie-Beratung und Engineering Services in Deutschland, Eine
unabhängige Marktanalyse der Lünendonk GmbH in fachlicher Zusammenarbeit mit ALTEN
GmbH, Altran GmbH & Co. KG, AVENTON GmbH und Randstad Professionals GmbH & Co. KG,
November 2014 (“Lünendonk analysis 2014”);
Š
berylls strategy advisors/VDA Verband der Automobilindustrie: Automotive
Entwicklungsdienstleistung, Zukunftsstandort Deutschland, Eine Studie des Verbands der
Automobilindustrie e.V. (VDA) in Zusammenarbeit mit Berylls Strategy Advisors GmbH, March
2015 (“berylls/VDA study, March 2015”);
Š
Roland Berger Strategy Consultants: Engineering Services, Market study, March 2014 (“Roland
Berger study, March 2014”);
Š
A.T. Kearney GmbH (“AT Kearney”): Market assessment Engineering Service Provider
Automotive 2020, July 2015 (“A.T. Kearney Report”)
Š
IMF World Economic Outlook January 2015;
Š
VDA Verband der Automobilindustrie Annual Report 2015; and
Š
IHS/Global Insight database (“IHS Material”).
It should be noted in particular that reference has been made in this prospectus to information
concerning markets and market trends. Such information was obtained from the
above-mentioned market studies, publicly available research and reports, internet articles, press
clippings and statistics. The Company has accurately reproduced such information and, as far as
it is aware and able to ascertain from information published by such third parties, no facts have
been omitted that would render the reproduced information inaccurate or misleading.
Nevertheless, prospective investors are advised to consider this data with caution. For example,
market studies are often based on information or assumptions that may be inaccurate or
inappropriate, and their methodology is inherently predictive and speculative. We
commissioned the A.T. Kearney Report prepared by A.T. Kearney. While we did not verify or
modify any of the market data or other information provided by A.T. Kearney, we delivered,
upon A.T. Kearney’s request, certain factual information contained in the A.T. Kearney Report
and discussed the underlying assumptions with A.T. Kearney. The figures and trends contained
in the A.T. Kearney Report are based on several sources as well as A.T. Kearney’s own analysis.
Irrespective of the assumption of responsibility for the content of this prospectus by the
Company and the Underwriters (see “B. General Information—I. Responsibility Statement”),
neither the Company nor the Underwriters have independently verified the figures, market data
or other information on which third parties, including A.T. Kearney, have based their studies,
publications and financial information on, or the external sources on which the Company’s
estimates are based. Accordingly, the Company and the Underwriters make no representation or
warranty as to the accuracy of any such information from third-party studies, including the A.T.
Kearney Report, included in this prospectus. Prospective investors should note that the
Company’s own estimates and statements of opinion and belief are not always based on studies
of third parties. They may differ from estimates made by our competitors or from future studies
conducted by market research institutes or other independent sources. In addition, we have
been informed by IHS Inc. (“IHS”), that (i) the IHS Materials are the copyrighted property of
IHS and represent data, research, opinions or viewpoints published by IHS, and are not
representations of fact, (ii) the IHS Materials speak as of the original publication date thereof
(and not as of the date of this prospectus), (iii) the information and opinions expressed in the
IHS Materials are subject to change without notice and IHS has no duty or responsibility to
update the IHS Materials and (iv) while the IHS Materials reproduced herein are from sources
considered reliable, the accuracy and completeness thereof are not warranted, nor are the
opinions and analyses which are based upon it. To the extent permitted by law, IHS shall not be
100
liable for any errors or omissions or any loss, damage or expense incurred by reliance on the
IHS Materials or any statement contained herein, or resulting from any omission. No portion of
the IHS Materials may be reproduced, reused, or otherwise distributed in any form without the
prior written consent of IHS. Content reproduced or redistributed with IHS’ permission must
display IHS’ legal notices and attributions of authorship. IHS and the IHS globe design are
trademarks of IHS. Other trademarks appearing in the IHS Materials are the property of IHS or
their respective owners.
Information contained on any website mentioned in this prospectus, including our website, is
not incorporated by reference in this prospectus and is not part of this prospectus.
V.
DOCUMENTS AVAILABLE FOR INSPECTION
For the period during which this prospectus is valid, the following documents will be available
for inspection during regular business hours at the Company’s offices at Schlossgasse 2, 9320
Arbon, Switzerland (tel. +41 71 447 36 12):
Š
the Company’s articles of association (the “Articles of Association”);
Š
the audited opening statement of financial position of the Company as of November 2, 2015
prepared in accordance with with International Financial Reporting Standards as adopted by
the European Union (“IFRS”);
Š
EDAG Engineering GmbH’s audited consolidated financial statements prepared in accordance
with IFRS as of and for the fiscal year ended December 31, 2014;
Š
EDAG Engineering Schweiz Sub-Holding AG’s unaudited condensed consolidated interim
financial statements prepared in accordance with IFRS on interim financial reporting (IAS 34)
as of and for the nine-month period ended September 30, 2015; and
Š
A.T. Kearney GmbH: Market assessment Engineering Service Provider Automotive 2020, July
2015.
The Company’s future consolidated annual and interim financial statements will be available
from the Company on its website and from the paying agent designated in this prospectus (see
“N. General Information on the Company and the Group—VIII. Announcements, Paying Agent”).
The Company’s future consolidated annual and interim financial statements will also be
published in the German Federal Gazette (Bundesanzeiger).
VI.
CURRENCY PRESENTATION AND PRESENTATION OF FIGURES
In this prospectus, “Euro”, “EUR” and “€” refer to the single European currency adopted by
certain participating Member States of the European Union, including Germany, “Swiss Franc”
and “CHF” refer to the official currency of Switzerland, “US dollar”, “USD” and “$” refer to the
official currency of the United States of America and “Brazilian Real” or “BRL” refer to the
official currency of Brazil.
Where financial data in this prospectus is labeled “audited”, this means that it has been taken
from the audited financial statements of EDAG Engineering GmbH and from the opening
statement of financial position of the Company mentioned in section V. above. The label
“unaudited” is used in this prospectus to indicate financial data that has not been taken from
the audited financial statements of EDAG Engineering GmbH but was taken from the unaudited
condensed consolidated interim financial statements of EDAG Engineering Schweiz Sub-Holding
AG or from our internal accounting system, or has been calculated based on financial data from
the above-mentioned sources. All of the financial data presented in this prospectus are shown in
thousands of Euro (in € thousand), except as otherwise stated. Certain financial data (including
percentages) in this prospectus have been rounded according to established commercial
standards, whereby aggregate amounts (sum totals, sub-totals, differences or amounts put in
relation) are calculated based on the underlying unrounded amounts. As a result, the aggregate
amounts in the tables in this prospectus may not correspond in all cases to the corresponding
rounded amounts contained in the tables in this prospectus. Furthermore, in those tables, these
101
rounded figures may not add up exactly to the totals contained in those tables. Financial
information presented which is preceded by a minus sign (“ⳮ”) denotes the negative of such
number presented. With respect to financial data set out in this prospectus, a dash (“-”) signifies
that the relevant figure is not available, while a zero (“0”) signifies that the relevant figure is
available but is or has been rounded to zero.
VII. ENFORCEMENT OF CIVIL LIABILITIES
We are organized under the laws of Switzerland and our jurisdiction of incorporation is Arbon,
Canton of Thurgau, Switzerland. Moreover, none of our directors and executive officers are
residents of the United States, and all or a substantial portion of the assets of such persons are
located outside the United States. As a result, it may not be possible for investors to effect
service of process within the United States upon us or upon such persons or to enforce against
them judgments obtained in U.S. courts, including judgments in actions predicated upon the
civil liability provisions of the federal securities laws of the United States. We have been advised
by our Swiss counsel that there is doubt as to the enforceability in Switzerland of original
actions, or in actions for enforcement of judgments of U.S. courts, of civil liabilities to the extent
predicated upon the federal and state securities laws of the United States. Original actions
against persons in Switzerland based solely upon the U.S. federal or state securities laws are
governed, among other things, by the principles set forth in the PILA. This statute provides that
the application of provisions of non-Swiss law by the courts in Switzerland shall be precluded if
the result is incompatible with Swiss public policy. Also, mandatory provisions of Swiss law may
be applicable regardless of any other law that would otherwise apply.
Switzerland and the United States do not have a treaty providing for reciprocal recognition and
enforcement of judgments in civil and commercial matters. The recognition and enforcement of a
judgment of the courts of the United States in Switzerland is governed by the principles set forth
in the PILA. This statute provides in principle that in the absence of an applicable international
treaty a judgment rendered by a non-Swiss court may be enforced in Switzerland only if:
Š
the non-Swiss court had jurisdiction pursuant to the PILA;
Š
the judgment of such non-Swiss court has become final and non-appealable;
Š
the judgment does not contravene Swiss public policy;
Š
the court procedures and the service of documents leading to the judgment were in
accordance with the due process of law; and
Š
no proceeding involving the same position and the same subject matter was first brought in
Switzerland, or adjudicated in Switzerland, or was earlier adjudicated in a third state and this
decision is recognizable in Switzerland.
VIII. PRESENTATION OF FINANCIAL INFORMATION
1.
Application of IFRS
The opening statement of financial position of the Company as of November 2, 2015 was
prepared in accordance with IFRS. Such opening statement of financial position was audited by
PricewaterhouseCoopers AG, Zurich, Switzerland, (“PwC-CH”), as stated in their auditor’s report
(Prüfungsurteil) thereon. PwC-CH is a member of EXPERTsuisse—Swiss Expert Association for
Audit, Tax and Fiduciary (EXPERTsuisse – Schweizer Expertenverband für Wirtschaftsprüfung,
Steuern und Treuhand).
The consolidated financial statements of EDAG Engineering GmbH as of and for the fiscal year
ended December 31, 2014 were prepared in accordance with IFRS. Such consolidated and annual
financial statements were audited by PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, office Hanover, Germany (“PwC
Germany”), as stated in their auditor’s report (Bestätigungsvermerk) thereon. PwC Germany is a
member of the Chamber of Public Accountants (Wirtschaftsprüferkammer), Berlin, Germany.
102
The unaudited condensed consolidated interim financial statements of EDAG Engineering
Schweiz Sub Holding AG as of and for the nine-month period ended September 30, 2015 were
prepared in accordance with IAS 34 on interim financial reporting.
Accordingly, the audited opening statement of financial position of the Company, the audited
consolidated financial statements of EDAG Engineering GmbH and the unaudited condensed
consolidated interim financial statements of EDAG Engineering Schweiz Sub Holding AG have
been prepared on a basis which differs in certain significant respects from the generally
accepted accounting principles in the United States, or U.S. GAAP.
2.
Non-IFRS Financial Information
This prospectus contains non-IFRS financial measures and ratios, including EBIT, Adjusted EBIT,
Adjusted Core EBIT, EBIT margin, Adjusted EBIT margin, Adjusted Core EBIT margin, Adjusted
EBITDA, Adjusted Cash Flow, Adjusted Cash Flow Conversion and Core Revenue that are not
required by, or presented in accordance with, IFRS. We present non-IFRS financial measures
because they are used by management in monitoring our business and because we believe that
they and similar measures are frequently used by securities analysts, investors and other
interested parties in evaluating companies in our industry. The definitions of the non-IFRS
financial measures may not be comparable to other similarly titled measures of other companies
and have limitations as analytical tools and should not be considered in isolation or as a
substitute for analysis of our operating results as reported under IFRS. Non-IFRS financial
measures and ratios such as Adjusted EBIT are not measurements of our performance or liquidity
under IFRS and should not be considered as alternatives to results for the period or any other
performance measures derived in accordance with IFRS or any other generally accepted
accounting principles or as alternatives to cash flow from operating, investing or financing
activities. For a reconciliation of non-IFRS financial measures and ratios to results or any other
performance measures derived in accordance with IFRS, see “I. Selected Financial and Other
Information”.
103
C.
I.
THE OFFERING
SUBJECT MATTER OF THE OFFERING
The Offering relates to the sale of 10,062,500 bearer shares of the Company (Inhaberaktien)
with a nominal value of CHF 0.04 each and each such share with full dividend rights for the
fiscal year ending December 31, 2015 and all subsequent fiscal years, consisting of:
Š
8,750,000 Base Shares; and
Š
1,312,500 Over-Allotment Shares.
The Offering consists of an initial public offering in Germany and Luxembourg and private
placements in certain jurisdictions outside Germany and Luxembourg. In the United States, the
Company’s shares will be offered and sold only to QIBs under the Securities Act. Outside the
United States, the Company’s shares will be offered and sold only in offshore transactions in
reliance on Regulation S under the Securities Act.
The share capital of the Company represented by the Offer Shares that are the subject of the
Offering, including a potential over-allotment, will total CHF 1,000 thousand (corresponding to
€920 thousand converted at an exchange rate of CHF 1.09 as of November 2, 2015 as shown in
the audited opening statement of financial position of the Company as of November 2, 2015).
Thus, approximately 40.25% of the Company’s shares will be offered (approximately 35.0%
without the Over-Allotment Shares).
Immediately prior to the Offering, all of the Company’s share capital was held by the Selling
Shareholder (see “M. Shareholder Information—I. Current Shareholder”). Following completion
of the Offering and assuming placement of all of the Offer Shares and full exercise of the
Greenshoe Option (as defined below), the Selling Shareholder together with HORUS
Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig which might
acquire Offer Shares in connection with this Offering on a non-preferential basis (see “C. The
Offering—XVI. Interests of Parties Participating in the Offering”), will hold at least 59.75% of
the Company’s share capital. The Selling Shareholder will receive consideration for the sale of
the Base Shares and, from a potential sale of Over-Allotment Shares, if and to the extent the
Greenshoe Option is exercised in each case after deduction of fees and commissions. The
Company will not receive any proceeds of the Offering.
The Company was incorporated by the Selling Shareholder on November 2, 2015. Since its
incorporation, the Company has not conducted any business, acquired any assets or incurred any
liabilities other than as directly related to its incorporation and the Offering. Concurrently with
the determination of the Offer Price (as defined below), the Selling Shareholder will contribute
all of the shares in EDAG Engineering Schweiz Sub-Holding AG to the Company by way of
contribution into the capital reserves of the Company without issuance of new shares or any
other compensation by the Company (the “Contribution”). The contribution value of EDAG
Engineering Schweiz Sub-Holding AG will increase the capital reserves shown on the
unconsolidated balance sheet of the Company. The contribution value of EDAG Engineering
Schweiz Sub-Holding AG at the time of the Contribution will not be based on a valuation report
prepared by a third party but on the market value of the Company as determined in the
Offering. This method of determining the contribution value of EDAG Engineering Schweiz
Sub-Holding AG assumes that the market value of the Company determined in the Offering
(i.e. the Offer Price, multiplied by all 25,000 thousand outstanding shares of the Company)
represents the sum of (i) the net asset value of the Company immediately prior to the
Contribution plus (ii) the value of all of the shares in EDAG Group Sub-Holding AG. The
contribution value of EDAG Engineering Schweiz Sub-Holding AG is therefore the market value
of the Company determined in the Offering minus the net asset value of the Company
immediately prior to the Contribution. Assuming a placement of the Offer Shares at the
mid-point of the Price Range, the market value of the Company will be €537,500 thousand
(Offer Price of €21.50, multiplied by 25,000 thousand shares of EDAG Engineering Group AG). In
104
order to arrive at the contribution value for EDAG Engineering Schweiz Sub-Holding AG, this
number will be reduced by the net asset value of the Company prior to the Contribution
(approximately €340 thousand, calculated as the share capital of the Company amounting to
€920 thousand as of November 2, 2015 minus costs related to the incorporation of the Company
amounting to €80 thousand, as shown in the audited statement of financial position of the
Company as of November 2, 2015, as well as the expected costs related to the Contribution
amounting to approximately €500 thousand). Assuming a placement of the Offer Shares at the
mid-point of the Price Range, the contribution value will therefore be approximately €537,160
thousand. The contribution value is subject to change and has not been audited. Following
consummation of the Contribution, the Company will be the parent company of the Group. No
shares in the Company will be sold or delivered to investors pursuant to the offering described
in this prospectus unless the Contribution has taken effect.
The Underwriters are acting in the following capacities: Morgan Stanley and Deutsche Bank are
acting as the Joint Global Coordinators and Joint Bookrunners, and COMMERZBANK and
M.M. Warburg & CO are acting as Co-Lead Managers.
II.
PRICE RANGE, OFFER PERIOD, OFFER PRICE AND ALLOTMENT
The price range set for the Offering (the “Price Range”) within which purchase orders may be
placed is €19.00 to €24.00 per Offer Share.
The period, during which investors may submit purchase orders for the Offer Shares is expected
to begin on November 23, 2015 and is expected to end on December 1, 2015 (the “Offer
Period”). On the last day of the Offer Period, offers to purchase may be submitted (i) until
12:00 noon (Central European Time) (“CET”) by private investors and (ii) until 15:00 (CET) by
institutional investors. Purchase orders must be for at least 10 shares and be expressed in full
Euro amounts or increments of 25, 50 or 75 Euro cents. Multiple purchase orders are permitted.
Subject to the publication of a supplement to this prospectus, if required, the Company and the
Underwriters reserve the right to increase or decrease the total number of Offer Shares, to
increase or decrease the upper limit and/or the lower limit of the Price Range and/or to extend
or shorten the Offer Period. Changes in the number of Offer Shares, changes to the Price Range
or the extension or shortening of the Offer Period will not invalidate any offers to purchase that
have already been submitted. If any such change requires the publication of a supplement to
this prospectus, investors who submitted purchase orders before the supplement is published
shall have the right, under the German Securities Prospectus Act (Wertpapierprospektgesetz), to
withdraw these offers to purchase within two business days of the publication of the
supplement. Instead of withdrawing the offers to purchase placed prior to the publication of
the supplement, investors may change their orders or place new limited or unlimited offers to
purchase within two business days of the publication of the supplement. To the extent that the
terms of the Offering are changed, such change will be published by means of electronic media
(such as Reuters or Bloomberg) and, if required by the German Securities Trading Act
(Wertpapierhandelsgesetz) or the German Securities Prospectus Act (Wertpapierprospektgesetz),
as an ad-hoc release via an electronic information dissemination system, on the Company’s
website and as a supplement to this prospectus. In such event, investors who have submitted
offers to purchase will not be notified individually. Under certain conditions, the Joint
Bookrunners, on behalf of the Underwriters, may terminate the Underwriting Agreement, even
after commencement of trading (Aufnahme des Handels) of the Company’s shares on the
regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse). Q. “Underwriting—Termination/Indemnification”.
The placement price (the “Offer Price”) and the final number of Offer Shares to be placed in the
Offering will be set jointly by the Company, the Selling Shareholder and the Underwriters. The
price will be set on the basis of the purchase orders submitted by investors during the Offer
Period that have been collated in the order book prepared during a bookbuilding process. These
orders will be evaluated according to the prices offered and the investment horizons of the
105
respective investors. This method of setting the number of shares that will be placed at the
Offer Price is, in principle, aimed at maximizing proceeds. Consideration will also be given to
whether the Offer Price and the number of shares to be placed allow for the reasonable
expectation that the share price will demonstrate steady performance in the secondary market
given the demand for the Company’s shares as reflected in the order book. Attention will be
paid not only to the prices offered by investors and the number of investors wanting shares at a
particular price, but also to the composition of the group of shareholders in the Company that
would result at a given price, and expected investor behavior. The Company and the Selling
Shareholder will not charge any expenses and taxes related to the Offering and listing to
investors.
The Offer Price and the final number of Offer Shares placed in the Offering (i.e., the result of the
Offering) are expected to be set on December 1, 2015. After the Offer Price has been set, the Offer
Shares will be allotted to investors on the basis of the offers to purchase then available. The Offer
Price and the final number of Offer Shares (that is, the result of the Offering) are expected to be
published on or about December 1, 2015 by means of an ad hoc release on an electronic information
dissemination system and on the Company’s website. Investors who have placed orders to purchase
Offer Shares with one of the Underwriters can obtain information from that Underwriter about the
Offer Price and the number of Offer Shares allotted to them on the business day following the
setting of the Offer Price. As commencement of trading (Aufnahme des Handels) of the Company’s
shares on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse) is expected to take place one business day following the setting of
the Offer Price, investors may not have obtained information about the number of Offer Shares
allotted to them at the time of commencement of trading. Book-entry delivery of the allotted Offer
Shares against payment of the Offer Price is expected to take place two business days after
commencement of stock exchange trading. Particularly if the placement volume prove insufficient to
satisfy all orders placed at the placement price, the Underwriters reserve the right to reject orders, or
to accept them in part only.
III.
EXPECTED TIMETABLE FOR THE OFFERING
The following is the expected timetable of the Offering, which may be extended or shortened:
November 20, 2015
Approval of this prospectus by the German Federal Financial
Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht,
“BaFin”)
Publication of the approved prospectus on the Company’s website
(www.ir.edag.ch/websites/edag/German/20/ipo.html)
Notification of the approved prospectus to the Luxembourg
Commission for the Supervision of the Financial Sector (Commission de
Surveillance du Secteur Financier)
November 23, 2015
Commencement of the Offer Period
Application for admission of the Company’s shares to trading on the
regulated market segment (regulierter Markt) of the Frankfurt Stock
Exchange (Frankfurter Wertpapierbörse) and, simultaneously, to the
sub-segment thereof with additional post-admission obligations (Prime
Standard)
December 1, 2015
Close of the Offer Period for private investors (natural persons) at
12:00 noon (CET) and for institutional investors at 15:00 (CET)
Determination of the Offer Price and final number of shares allocated;
Contribution of all shares in EDAG Engineering Schweiz Sub-Holding
AG into the capital reserves of the Company by the Selling Shareholder
106
Publication of the results of the Offering in the form of an ad hoc
release on an electronic information dissemination system and on the
Company’s website (www.ir.edag.ch/websites/edag/German/
20/ipo.html)
December 2, 2015
Commencement of trading in the Company’s shares on the Frankfurt
Stock Exchange (Frankfurter Wertpapierbörse)
December 4, 2015
Book-entry delivery of the Offer Shares against payment of the Offer
Price (settlement and closing)
The prospectus will be published on the Company’s website at www.ir.edag.ch/websites/edag/
German/20/ipo.html. In addition, copies of the printed prospectus and any supplement thereto
will be available upon publication free of charge during regular business hours at the offices of
the paying agent at Taunusanlage 12, 60325 Frankfurt am Main.
IV.
INFORMATION ON THE SHARES
1.
Current Share Capital; Form of the Shares
As of November 2, 2015, the incorporation date of the Company, the share capital of the
Company amounted to CHF 1,000 thousand (corresponding to €920 thousand converted at an
exchange rate of CHF 1.09 as of November 2, 2015 as shown in the audited opening statement
of financial position of the Company as of November 2, 2015) and is divided into
25,000 thousand bearer shares (Inhaberaktien) with a nominal value of CHF 0.04 each. As of the
date of this prospectus, the share capital of the Company is the same as of November 2, 2015.
Concurrently with the determination of the Offer Price, the Selling Shareholder will contribute
all shares in EDAG Engineering Schweiz Sub-Holding AG to the Company by way of the
Contribution. The contribution value of EDAG Engineering Schweiz Sub-Holding AG will
increase the capital reserves shown on the unconsolidated balance sheet of the Company. The
contribution value of EDAG Engineering Schweiz Sub-Holding AG at the time of the
contribution will not be based on a valuation report prepared by a third party but on the
market value of the Company as determined in the Offering. This method of determining the
contribution value of EDAG Engineering Schweiz Sub-Holding AG assumes that the market value
of the Company determined in the Offering (i.e. the Offer Price, multiplied by all 25,000
thousand outstanding shares of the Company) represents the sum of (i) the net asset value of
the Company immediately prior to the Contribution plus (ii) the value of all of the shares in
EDAG Engineering Schweiz Sub-Holding AG. The contribution value of EDAG Engineering
Schweiz Sub-Holding AG is therefore the market value of the Company determined in the
Offering minus the net asset value of the Company immediately prior to the Contribution.
Assuming a placement of the Offer Shares at the mid-point of the Price Range, the market value
of the Company will be €537,500 thousand (Offer Price of €21.50, multiplied by 25,000 thousand
shares of EDAG Engineering Group AG). In order to arrive at the contribution value for EDAG
Engineering Schweiz Sub-Holding AG, this number will be reduced by the net asset value of the
Company prior to the Contribution (approximately €340 thousand, calculated as the share
capital of the Company amounting to €920 thousand as of November 2, 2015 minus costs
related to the incorporation of the Company amounting to €80 thousand, as shown in the
audited opening statement of financial position of the Company as of November 2, 2015, as well
as the expected costs related to the Contribution amounting to approximately €500 thousand).
Assuming a placement of the Offer Shares at the mid-point of the Price Range, the contribution
value will therefore be approximately €537,160 thousand. The contribution value is subject to
change and has not been audited.
2.
Certification of the Shares
As of the date of this prospectus, all of the Company’s shares are bearer shares (Inhaberaktien)
with a nominal value of CHF 0.04 each. The Company’s shares will be represented by a global
share certificate (the “Global Share Certificate”), which will be deposited with Clearstream and
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by virtue of Article 6 para. 1 lit. b of the Swiss Federal Act on Book Entry Securities will
automatically become book-entry securities (Bucheffekten) pursuant to Swiss law upon deposit
of the Global Share Certificate with Clearstream and their booking into a securities account with
Clearstream.
Article 4 paragraph 2 of the Articles of Association excludes the right of the shareholders to
receive share certificates. The Company’s board of directors (the “Board of Directors”)
determines pursuant to Article 4 paragraph 1 of the Articles of Association the form and
content of the share certificates. The Offer Shares provide holders thereof with the same rights
as all of the other shares of the Company and do not provide any additional rights or
advantages.
3.
Voting Rights
Each share in the Company carries one vote at the Company’s shareholders’ meeting. There are
no restrictions on voting rights. Major shareholders do not have different voting rights.
4.
Dividend and Liquidation Rights
The Offer Shares carry full dividend rights for the fiscal year ending December 31, 2015 and all
subsequent fiscal years. In the event of the Company’s liquidation, any proceeds available after
the debt of the dissolved Company is discharged will be distributed to the holders of the
Company’s shares in proportion to their interest in the Company’s share capital.
5.
Delivery and Settlement
The delivery of the Offer Shares against payment of the Offer Price is expected to take place on
December 4, 2015. The Offer Shares will be made available to the shareholders as book-entry
securities (Bucheffekten).
At the shareholder’s option, the Offer Shares purchased in the Offering will be credited either
to a securities deposit account maintained by a German bank with Clearstream Banking
Aktiengesellschaft or to a securities account of a participant in Euroclear Bank S.A./N.V., 1,
Boulevard Roi Albert II, 1120 Brussels, Belgium, as the operator of the Euroclear system, or to
Clearstream Banking S.A., 42 Avenue JF Kennedy, 1855 Luxembourg, Luxembourg, for the
account of such shareholder.
V.
NOTICES
According to Swiss law and the Articles of Association, official publications of the Company are
to be made in the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt) and
the German Federal Gazette (Bundesanzeiger). The Board of Directors may designate further
means for official publications. Notices of the Company to shareholders are to be made by
official publications of the Company.
VI.
FOREIGN INVESTMENT AND EXCHANGE CONTROL REGULATIONS IN SWITZERLAND
Other than in connection with government sanctions imposed on certain persons from the
Republic of Iraq, Iran, the Central African Republic, Lebanon, Liberia, Libya, Ivory Coast, Sudan,
the Democratic Republic of Congo, Myanmar (Burma), Somalia, Syria, Guinea, Guinea-Bissau,
Eritrea, Zimbabwe, Belarus, North Korea, Yemen, persons and organizations with connections to
Osama bin Laden, the “Al-Qaeda” group or the Taliban and certain persons in connection with
the assassination of Rafik Hariri as well as measures to prevent the circumvention of
international sanctions in connection with the situation in the Ukraine, there are currently no
government laws, decrees or regulations in Switzerland to restrict the export or import of
capital, including, but not limited to, Swiss foreign exchange controls on the payment of
dividends, interest or liquidation proceeds, if any, to non-resident holders of the Company’s
shares.
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VII. ISIN/WKN/COMMON CODE/TICKER SYMBOL
International Securities Identification Number (ISIN) . . . . . . . . . . . . . . . . . . . . . . .
CH0303692047
German Securities Code (Wertpapier-Kenn-Nummer, WKN) . . . . . . . . . . . . . . . . .
A143NB
Common Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
132198357
Trading Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ED4
VIII. TRANSFERABILITY OF THE SHARES, LOCK-UP
The Company’s shares are freely transferable in accordance with the legal requirements for
bearer shares, except that the transfer of book-entry securities or the granting of security rights
on book-entry securities by way of assignment is excluded. Apart therefrom and except for the
restrictions set forth in C.XIII. “—Lock-up Agreement, Limitations on Disposal” and S.V.
“Underwriting—Selling Restrictions”, there are no prohibitions on disposals or restrictions with
respect to the transferability of the Company’s shares.
IX.
INFORMATION ON THE EXISTING SHAREHOLDER
Immediately prior to the Offering, the existing shareholder of the Company, the Selling
Shareholder, holds 100% of the Company’s outstanding share capital. The Selling Shareholder is
indirectly controlled by Dr. Lutz Mario Helmig. The Selling Shareholder together with HORUS
Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig which might
acquire Offer Shares in connection with this Offering on a non-preferential basis (see “C. The
the Company’s outstanding share capital upon completion of the Offering (assuming full
exercise of the Greenshoe Option). For further details on the ownership structure of the
Company, see “M. Shareholder Information”.
X.
ALLOTMENT CRITERIA
The allotment of Offer Shares to private investors and institutional investors will be decided by
the Company and the Selling Shareholder after consultation with the Joint Global Coordinators.
The decision ultimately rests with the Company and the Selling Shareholder. Allotments will be
made on the basis of the quality of the individual investors and individual orders and other
important allotment criteria to be determined by the Company and the Selling Shareholder
after consultation with the Joint Global Coordinators. The allocation to private investors will be
in accordance with the “Principles for the Allotment of Share Issues to Private Investors” issued
by the German Commission of Stock Exchange Experts (Börsensachverständigenkommission) on
June 7, 2000. “Qualified Investors” (qualifizierte Anleger) under the German Securities
Prospectus Act, as well as “professional clients” (professionelle Kunden) and “suitable
counterparties” (geeignete Gegenparteien) as defined under the German Securities Trading Act
(Wertpapierhandelsgesetz), are not viewed as “private investors” within the meaning of the
allocation rules. Multiple subscriptions by the same investors are permitted. The details of the
allotment procedure will be stipulated after expiration of the Offer Period and published in
accordance with the above-mentioned allotment principles.
XI.
PREFERENTIAL ALLOCATION
All employees of EDAG Engineering GmbH and its subsidiaries as well as the members of the
Group Executive Management and Board of Directors of the Company, employed and tax
resident in Germany, will be offered an aggregate amount of up to 4.99% of the Offer Shares at
the Offer Price in connection with the Offering on a preferential basis.
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XII. STABILIZATION MEASURES, OVER-ALLOTMENTS AND GREENSHOE OPTION
In connection with the placement of the Offer Shares, Deutsche Bank acting for the account of
the Underwriters, will act as the stabilization manager (the “Stabilization Manager”) and may,
as Stabilization Manager acting in accordance with legal requirements (Section 20a para. 3 of
the German Securities Trading Act (Wertpapierhandelsgesetz) in conjunction with Commission
Regulation (EC) No. 2273/2003 of December 22, 2003), make over-allotments and take
stabilization measures to support the market price of the Company’s shares and thereby
counteract any selling pressure.
The Stabilization Manager is under no obligation to take any stabilization measures. Therefore,
no assurance can be provided that any stabilization measures will be taken. Where stabilization
measures are taken, these may be terminated at any time without notice. Such measures may be
taken from the date the Company’s shares are listed on the regulated market on the Frankfurt
Stock Exchange (Frankfurter Wertpapierbörse) and must be terminated no later than the
thirtieth calendar day after such day (the “Stabilization Period”).
These measures may result in the market price of the Company’s shares being higher than would
otherwise have been the case. Moreover, the market price may temporarily be at an
unsustainable level.
Under the potential stabilization measures, investors may, in addition to the Base Shares, be
allocated up to 1,312,500 additional shares in the Company (Over-Allotment Shares) as part of
the allocation of the shares to be placed (the “Over-Allotment”). For the purpose of a potential
Over-Allotment, the Stabilization Manager, for the account of the Underwriters, will be
provided with 1,312,500 shares from the holdings of the Selling Shareholder in the form of a
securities loan; the number of Over-Allotment Shares will not exceed 15% of the number of
Base Shares. In addition, the Selling Shareholder will grant the Underwriters an option to
acquire a number of Company shares equal to the number of Over-Allotment Shares at the
Offer Price less agreed commissions (the “Greenshoe Option”). The Greenshoe Option will
terminate on January 1, 2016.
The Stabilization Manager is entitled to exercise the Greenshoe Option up to the extent
Over-Allotments were initially made; the number of shares for which the Greenshoe Option is
exercised is to be reduced by the number of shares held by the Stabilization Manager as of the
date on which the Greenshoe Option is exercised and that were acquired by the Stabilization
Manager in the context of stabilization measures.
Once the Stabilization Period has ended, an announcement will be made within one week in
various media outlets distributed across the entire EEA as to whether stabilization measures
were taken, when price stabilization started and finished, and the Price Range within which the
stabilization measures were taken; the latter will be made known for each occasion on which
price stabilization measures were taken. Exercise of the Greenshoe Option, the timing of its
exercise and the number and type of Company’s shares concerned will also be announced
promptly in the same manner.
XIII. LOCK-UP AGREEMENT, LIMITATIONS ON DISPOSAL
On or about November 20, 2015, the Company, the Selling Shareholder and the Underwriters
expect to enter into an underwriting agreement (the “Underwriting Agreement”) regarding the
offer and sale of the Offer Shares in connection with the Offering, pursuant to which the
Company will agree with each Underwriter that the Company or its Board of Directors, without
the prior written consent of the Joint Global Coordinators for a period beginning on the date of
this prospectus and ending 180 days after settlement, will not, and will not agree to:
a)
announce or effect an increase of the share capital of the Company out of authorized
capital, if any; or
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b)
submit a proposal for a capital increase to any meeting of the shareholders for resolution;
or
c)
offer, pledge, allot, issue (unless required by applicable law), sell, contract to sell, sell any
option or contract to purchase, purchase any option to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares in
its capital or any securities convertible into or exercisable or exchangeable for shares in its
capital or enter into any swap or other arrangement that transfers to another, in whole or
in part, the economic risk of ownership of shares in its capital; or
d)
enter into a transaction or perform any action economically similar to those described in
(a) through (c) above.
By way of a lock-up agreement, the Selling Shareholder has undertaken, without the prior
written consent of the Joint Global Coordinators for a period beginning on the date of this
prospectus and ending 180 days after settlement, not to:
a)
offer, pledge, allot, sell, contract to sell, sell any option or contract to purchase, purchase
any option to sell, grant any option, right or warrant to purchase, or otherwise or dispose
of, directly or indirectly any shares of the Company held by it or its affiliates (such shares
held by the Selling Shareholder or its affiliates being the “Lock-up Shares”);
b)
enter into any swap or other arrangement that transfers to another, in whole or in part, the
economic risk of ownership of Lock-up Shares, whether any such transaction described in (a)
above or this (b) is to be settled by delivery of Lock-up Shares or such other securities, in
cash or otherwise;
c)
make any demand for, or exercise any right with respect to, the registration under U.S.
securities laws of any shares of the Company or any security convertible into or exercisable
or exchangeable for shares of the Company;
d)
propose any increase in the share capital of the Company (including by requesting the
board of directors to convene a general shareholders’ meeting or otherwise), vote in favor
of any proposed increase of the share capital or otherwise make, support or vote in favor of
any proposal for the issuance of any securities convertible into shares of the Company, with
option rights for shares of the Company; or; or
e)
enter into a transaction or perform any action economically similar to those described in
(a) through (d) above.
The foregoing lock-up restrictions for the Selling Shareholder do not apply to any action taken
by the Selling Shareholder for the purposes of the Offering. (a), (b) and (e) shall not restrict
(i) the off-exchange (außerbörsliche) transfer of Company’s shares by the Selling Shareholder to
any of its affiliates, or (ii) the distribution of Company’s shares by the Selling Shareholder to its
shareholder(s), through dividend in kind, provided that in each case the recipient of such
transfer assumes, by written confirmation to the Joint Global Coordinators, the obligations of
the Selling Shareholder for the then remaining term.
To the extent HORUS Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario
Helmig, will acquire any Offer Shares in connection with the Offering on a non-preferential basis
(see “C. The Offering—XVI. Interests of Parties Participating in the Offering”), HORUS
Vermögensverwaltungs GbR will enter into a lock-up agreement with the Underwriters
substantially identical with the agreement entered into by the Selling Shareholder and the
Underwriters as described above.
Furthermore, in the Underwriting Agreement the Selling Shareholder will agree with the
Underwriters that it will not, for a period of three years from the settlement of the Offering of
the Company, directly or indirectly and taking into consideration a transfer of shares by HORUS
Vermögensverwaltungs GbR or any other company controlled by Dr. Lutz Mario Helmig, enter
into an agreement with a third party to sell a position in the Company which, the Selling
Shareholder knows, will result in a controlling interest of the purchaser, unless such purchaser
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contractually commits to extend a tender offer to the other shareholders of the Company
offering a purchase price per share which is at least equal to the price contractually agreed
between the Selling Shareholder and the purchaser. The Selling Shareholder’s covenant is only
valid to the extent that the purchaser would be under an obligation (and no exemption would
be available from that duty) to extend a mandatory tender offer to the other shareholders of the
Company if German takeover laws were applicable in case of such a transaction and only for as
long as neither Swiss nor German takeover laws apply. Subject to certain conditions, transfers to
or amongst affiliates of the Selling Shareholder are exempt. The Selling Shareholder’s
undertaking does not give rise to any rights of third parties and the Selling Shareholder is not
obliged to ensure that the purchaser actually adheres to its contractual obligation to extend an
offer to other shareholders of the Company.
To the extent HORUS Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario
Helmig, will acquire any Offer Shares in connection with the Offering on a non-preferential
basis (see “C. The Offering—XVI. Interests of Parties Participating in the Offering”), HORUS
Vermögensverwaltungs GbR will enter into an agreement with the Underwriters in order to
make a covenant to the Underwriters with regard to the sale of shares in the Company which
would result – and taking into consideration any transfer of shares by the Selling Shareholder –
in a controlling interest of the purchaser substantially identical with the covenant made by the
Selling Shareholder to the Underwriters as described above.
XIV. ADMISSION TO THE FRANKFURT STOCK EXCHANGE AND COMMENCEMENT OF TRADING
The Company expects to apply for admission of the Company’s shares to trading on the
regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) and, simultaneously, to the sub-segment thereof with additional
post-admission obligations (Prime Standard) on or about November 23, 2015. The listing
approval for the Company’s shares is expected to be granted and announced December 1, 2015.
The decision on the admission of the Company’s shares to trading will be made solely by the
Frankfurt Stock Exchange at its discretion. Trading in the Company’s shares on the Frankfurt
Stock Exchange is planned to commence on December 2, 2015.
XV. DESIGNATED SPONSORS
The Joint Global Coordinators have agreed to assume the function of a designated sponsor of
the Company’s shares traded on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) for
a period of at least one year. Pursuant to the designated sponsor agreement expected to be
concluded among each of the designated sponsors and the Company, the designated sponsors
will, among other things, place limited buy and sell orders for the Company’s shares in the
electronic trading system of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) during
regular trading hours. This is intended to achieve greater liquidity in the market for the
Company’s shares. The Joint Global Coordinators are entitled to delegate their duties under the
designated sponsors’ agreement to authorized third parties. In accordance with Sections 76 and
77 of the Exchange Rules (Börsenordnung) for the Frankfurt Stock Exchange, the designated
sponsors’ agreement stipulates the duties and responsibilities of the designated sponsors.
Among other things, the designated sponsors shall be available during trading hours and, upon
receipt of a request for a quote, shall promptly supply quotes and enter into transactions on
such basis. In addition, the designated sponsors shall provide quotes throughout the auction.
XVI. INTERESTS OF PARTIES PARTICIPATING IN THE OFFERING
The Underwriters act for the Company on the Offering and coordinate the structuring and
execution of the Offering. In addition, the Joint Global Coordinators have been appointed to
act as designated sponsors for the Company’s shares and Deutsche Bank has been appointed to
act as paying agent. Upon successful implementation of the Offering, the Underwriters will
receive a commission. As a result of these contractual relationships, the Underwriters have a
financial interest in the success of the Offering.
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Furthermore, in connection with the Offering, each of the Underwriters and any of their
respective affiliates, acting as an investor for their own account, may acquire shares in the
Offering and in that capacity may retain, purchase or sell for its own account such shares or
related investments and may offer or sell such shares or other investments otherwise than in
connection with the Offering. In addition, certain of the Underwriters or their affiliates may
enter into financing arrangements (including swaps or contracts for differences) with investors
in connection with which Underwriters (or their affiliates) may from time to time acquire, hold
or dispose of shares in the Company. None of the Underwriters intends to disclose the extent of
any such investments or transactions otherwise than in accordance with any legal or regulatory
obligation to do so or as disclosed in this prospectus.
Some of the Underwriters or their affiliates have, and may from time to time in the future
continue to have, business relations with our Group (including lending activities) or may
perform services for our Group in the ordinary course of business.
In addition, HORUS Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig,
has indicated that it might place an order to acquire up to 10% of the Offer Shares in the Offering,
subject to allocation on a non-preferential basis. As of the date of this prospectus, no decision has
been made by HORUS Vermögensverwaltungs GbR whether to place an order to acquire any shares
in the Offering and there can be no assurances that HORUS Vermögensverwaltungs GbR will in fact
do so. In case HORUS Vermögensverwaltungs GbR acquires Offer Shares in the Offering, it will be
subject to the same lock-up restrictions as the Selling Shareholder (see “C. The Offering—XIII. Lockup Agreement, Limitations on Disposal”).
According to the service contracts of the management of EDAG Engineering GmbH, the three
managing directors of EDAG Engineering GmbH (which are members of the Company’s Group
Executive Management) will receive a special bonus in the amount of €500,000, either in cash or
in shares or share options, in case the EDAG Group goes public by December 31, 2016. As a
result of these contractual provisions, the managing directors of EDAG Engineering GmbH have
a financial interest in the success of the Offering.
Dr. Philippe Weber is a member of the Board of Directors (see “P. Corporate Bodies—II. Board of
Directors—2. Members of the Board of Directors”) and a managing partner of the law firm
Niederer Kraft & Frey AG, Zurich, which acts as Swiss legal counsel for the Company in
connection with the Offering.
The Selling Shareholder, whose CEO Thomas Eichelmann is at the same time the chairman of our
board of directors, will receive the proceeds of the Base Shares and the Over-Allotment Shares
(if any, and to the extent that the Greenshoe Option is exercised) sold in the Offering. Assuming
full placement of all of the Base Shares (8,750,000 shares) and all of the Over-Allotment Shares
(1,312,500 shares) at the mid-point of the Price Range, and after deducting fees and expenses to
be paid by the Selling Shareholder in connection with the Offering and listing the net proceeds
to the Selling Shareholder from the Offering would amount to approximately €202.06 million
(see “D. Proceeds of the Offering and Costs of the Offering and Listing”).
There are no conflicting interests material to the Offering.
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D.
PROCEEDS OF THE OFFERING AND COSTS OF THE
OFFERING AND LISTING
The Company will not receive any proceeds of the Offering resulting from the sale of the Offer
Shares.
The Selling Shareholder will receive the proceeds of the Offering resulting from the sale of the
Base Shares and from the sale of Over-Allotment Shares, if and to the extent that the Greenshoe
Option in relation to the Over-Allotment Shares is exercised. Assuming a placement of (i) all of
the Base Shares (8,750,000 shares) and (ii) all of the Over-Allotment Shares at the mid-point of
the Price Range and (iii) full exercise of the Greenshoe Option in relation to the Over-Allotment
Shares, the Company estimates that the aggregate gross proceeds to the Selling Shareholder
would amount to approximately €216.34 million, and the net proceeds to the Selling
Shareholder would amount to approximately €202.06 million, respectively.
The expenses related to the offering of the Offer Shares and listing of the Company’s entire
share capital are expected to total approximately €10.83 million (excluding underwriting and
placement commissions payable to the Underwriters) of which approximately €3.58 million will
be borne by the Company and approximately €7.25 million will be borne by the Selling
Shareholder. Assuming (i) an Offer Price at the mid-point of the Price Range, (ii) that the
maximum number of Base Shares and Over-allotment Shares is placed, (iii) the full exercise of
the Greenshoe Option in relation to the Over-Allotment Shares and (iv) payment in full of the
discretionary fee of up to approximately €1.62 million, the commissions payable to the
Underwriters will amount to approximately €7.03 million. Such commissions are attributable to
the placement of the Existing and Over-Allotment Shares and will be borne by the Selling
Shareholder.
Under the same assumptions, the total expenses of the offering and listing to be borne by the
Company and the Selling Shareholder (including underwriting and placement commissions
payable to the Underwriters) are expected to amount to approximately €17.86 million, of which
approximately €3.58 million will be borne by the Company and approximately €14.28 million
will be borne by the Selling Shareholder
Investors will not be charged expenses by the Company or the Underwriters in connection with
their role as underwriters. Investors may, however, have to bear customary transaction and
handling fees charged by their account-keeping financial institution.
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E.
REASONS FOR THE OFFERING AND LISTING AND USE OF
PROCEEDS
The Company intends to have the Company’s shares admitted to trading on the regulated
market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter
Wertpapierbörse) and, simultaneously, on the sub-segment thereof with additional
post-admission obligations (Prime Standard) to achieve better access to the capital markets.
The Selling Shareholder will offer the Base Shares and the Over-Allotment Shares to partially
divest its shareholding in the Company.
The Company will not receive any proceeds of the Offering resulting from the sale of the Offer
Shares.
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F.
I.
DIVIDEND POLICY; RESULTS AND DIVIDENDS PER
SHARE; USE OF PROFITS
GENERAL PROVISIONS RELATING TO PROFIT ALLOCATION AND DIVIDEND PAYMENTS
All shares of the Company rank pari passu with respect to dividend rights. Dividends, whether in
cash or in kind, may be paid by the Company only if according to its audited statutory
standalone balance sheet the Company has sufficient distributable profits from previous years
(Bilanzgewinn) or sufficient free reserves to allow the distribution of a dividend or distribution
against capital reserves. The distributable profit and free reserves are calculated based on the
Company’s annual statutory standalone financial statements prepared in accordance with the
requirements of the Swiss Code of Obligations (Obligationenrecht). Accounting regulations
under the Swiss Code of Obligations (Obligationenrecht) materially differ from the IFRS.
For a stock corporation (Aktiengesellschaft) under Swiss law, the distribution of a dividend
(including by way of distribution against reserves from capital contribution) for a given fiscal
year and the amount and payment date thereof, are resolved by the shareholders’ meeting
(Generalversammlung) of the subsequent fiscal year. According to Article 11 of the Articles of
Association, such resolution requires a simple majority of the votes cast. The Company’s auditors
must confirm that the dividend proposal of the Board of Directors to the shareholders meeting
conforms to statutory requirements and the Company’s Articles of Association.
When determining the distributable profit, net income or loss for the fiscal year
(Jahresgewinn/-verlust) must be adjusted for profit/loss carry-forwards
(Gewinn-/Verlustvorträge) from the prior fiscal year and releases of or allocations to reserves.
Certain reserves are required to be set up by law. In accordance with Article 671 of the Swiss
Code of Obligations (Obligationenrecht), the Company retains at least 5% of the annual net
profits as general reserves for so long as these reserves amount to less than 20% of its paid-in
nominal share capital. Amounts mandatorily allocated to these reserves in the given fiscal year
must be deducted when calculating the distributable profit and freely distributable reserves.
In order for the Company to pay dividends to its shareholders in the form of a distribution
against capital reserves, such reserves must be eligible for classification as distributable reserves.
contribution value of EDAG Engineering Schweiz Sub-Holding AG at the time of the
Contribution will not be based on a valuation report prepared by a third party but on the
of the Company determined in the Offering (i.e. the Offer Price, multiplied by all
25,000 thousand outstanding shares of the Company) represents the sum of (i) the net asset
value of the Company immediately prior to the Contribution plus (ii) the value of all of the
shares in EDAG Engineering Schweiz Sub-Holding AG. The contribution value of EDAG
Engineering Schweiz Sub-Holding AG is therefore the market value of the Company determined
in the Offering minus the net asset value of the Company immediately prior to the Contribution.
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value will therefore be approximately €537,160 thousand. No other valuation will be conducted
for the purposes of determining the contribution value. The contribution value is subject to
Dividends resolved by the shareholders’ meeting are usually payable no sooner than three days
after the shareholders’ resolution relating to the allocation of profits and the distribution of the
dividend has been passed by the shareholders’ meeting, unless provided otherwise in the
dividend resolution, in compliance with the rules of the respective clearing system. Clearstream
Frankfurt will transfer the dividends to the shareholders’ custodian banks for crediting to their
accounts and German custodian banks are under an obligation to distribute the funds to their
customers. Shareholders using a custodian bank located outside Germany must inquire at their
respective bank regarding the terms and conditions applicable in their case. Notifications of any
distribution of dividends resolved upon are published in the German Federal Gazette
(Bundesanzeiger) immediately after the shareholders’ meeting. To the extent dividends can be
distributed by the Company in accordance with the Swiss Code of Obligations
(Obligationenrecht) and corresponding decisions are taken, there are no restrictions on
shareholder rights to receive dividends (except for the above described foreign investment
restrictions).
Under Swiss law, the statute of limitations with respect to dividend payments is five years.
Dividends not collected within five years after their due date accrue to the Company and will be
allocated to the Company’s general reserves. Dividends and similar payments by Swiss companies
to certain persons and organisations are currently restricted pursuant to sanctions imposed by
the Swiss government.
Dividends paid on the shares of the Company are subject to Swiss withholding tax. Subject to
the restrictions described above and any changes in tax laws and practice, distributions against
capital reserves can be made to the Company’s shareholders without deducting any Swiss
withholding tax. For further information see, see “S. Taxation in Germany—I. Taxation of
Shareholders—2. Taxation of Dividends” and “T. Taxation in Luxembourg—I. Withholding
Taxes” and “U. Taxation in Switzerland—I. Swiss Withholding Tax on Dividends”.
II.
DIVIDEND POLICY AND EARNINGS PER SHARE
Depending on the results of operations of EDAG, the Company intends to pay dividends in the
future targeting a pay-out ratio of about 50% (defined as the percentage of the consolidated
profits of the respective period). Any future determination to pay dividends will be made in
accordance with applicable laws, and will depend upon, among other factors, our results of
operations, financial condition, contractual restrictions and capital requirements. The Company’s
future ability to pay dividends may be limited by the terms of any existing and future debt. The
Company may pay dividends in the form of a distribution against capital reserves or as dividend
payments. The Board of Directors, subject to shareholder resolutions providing otherwise,
retains authority to change the dividend policy and dividend payout ratio at any time,
especially, if unexpected events occur that would change its view as to the prudent level of cash
and capital conservation as well as our financial goals and strategy. Dividends paid on the shares
of the Company are subject to Swiss withholding tax. Subject to the restrictions described above
and any changes in tax laws and practice, distributions against capital reserves can be made to
the Company’s shareholders without deducting any Swiss withholding tax. For further
information see, see “S. Taxation in Germany—I. Taxation of Shareholders—2. Taxation of
Dividends” and “T. Taxation in Luxembourg—I. Withholding Taxes” and “U. Taxation in
Switzerland—II. Swiss Withholding Tax on Dividends”.
The Company was incorporated on November 2, 2015. Since then, no distributions of profits or
reserves were made (up to the date of this prospectus).
117
The following table presents the consolidated result for each of the periods presented in total
and per share taken from the unaudited condensed consolidated interim statements of
comprehensive income for the nine-month periods ended September 30, 2015 and
September 30, 2014 of EDAG Engineering Schweiz Sub-Holding AG as well as from the audited
consolidated statements of comprehensive income for the fiscal years ended December 31, 2014
and December 31, 2013 and the audited combined statement of comprehensive income for the
fiscal year ended December 31, 2012 of EDAG Engineering GmbH. Profit per share data is based
on 25,000 thousand Company’s shares outstanding at the date of this prospectus. See
“O. Description of the Company’s Share Capital and Applicable Regulations” for additional
information on our share capital and shares.
For the nine-month
period ended
September 30,
2015
2014
2014(1)(2)
2013(2)
2012(3)
(audited, except per share data)
Earnings after taxes from continuing
operations (EUR thousand) . . . . . .
operations per share (EUR) . . . . . . .
Profit (EUR thousand) . . . . . . . . . . . .
Profit per share (EUR) . . . . . . . . . . . .
(consolidated)
(combined)
..
27,458
28,969
58,238 21,727
24,919
..
..
..
1.10
27,458
1.10
1.16
30,519
1.22
2.33
0.87
59,824 19,822
2.39
0.79
1.00
24,152
0.97
(1) Operating results for the various subsidiaries disposed of during the nine-month period ended September 30, 2014 or year
ended December 31, 2014 are included only for the periods prior to their respective disposals. See “J. Management’s
Discussion and Analysis of Financial Condition and Results of Operations—III. Comparability of our results of operations as a
result of the complex financial history of the Group” for a list of our main acquisitions and disposals.
(2) Data for the fiscal years ended December 31, 2014 and December 31, 2013 on a consolidated basis and each comprising the
business of the Rücker Group and the business of the BFFT Group for the full fiscal year.
(3) Data for the fiscal year ended December 31, 2012 on a combined basis and comprising the business of the Rücker Group with
effect for accounting purposes from October 1, 2012, the date of the initial inclusion of the Rücker Group in our combined
group of entities for the purposes of our audited combined financial information. Data excludes the business of the BFFT
Group, which was acquired with effect for accounting purposes from January 1, 2013.
118
G.
CAPITALIZATION AND INDEBTEDNESS; STATEMENT ON
WORKING CAPITAL AND SIGNIFICANT CHANGES
The following tables set forth (i) EDAG Engineering Schweiz Sub-Holding AG’s actual
consolidated capitalization and indebtedness as of September 30, 2015, taken from the
unaudited condensed consolidated interim financial statements as of and for the nine-month
period ended September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG, (ii) the
Company’s actual capitalization and indebtedness on an unconsolidated basis as of
November 2, 2015 taken from the audited opening statement of financial position of the
Company as of November 2, 2015 and (iii) the Group’s adjusted consolidated capitalization and
indebtedness as of September 30, 2015, derived from EDAG Engineering Schweiz Sub-Holding
AG’s actual consolidated capitalization and indebtedness as of September 30, 2015 and the
Company’s actual capitalization and indebtedness on an unconsolidated basis as of
November 2, 2015 and based on the assumption that the incorporation of the Company and the
Contribution had already occurred as of September 30, 2015. For simplification purposes no tax
effects were considered. Investors should read these tables in conjunction with I. “Selected
Financial and Other Information”, J. “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and section “V. Financial Information” of this prospectus
on page F-2 et seqq.
I.
CAPITALIZATION
(i) EDAG Engineering
Schweiz Sub-Holding
AG actual as
of September 30,
2015
(in € thousand)*
(iii) Group as
adjusted as of
September 30,
2015(1)
(audited,
unconsolidated)
(unaudited,
consolidated)
151,695
—
114
151,581
80
—
—
80
152,275
—
114
152,161
200,382
—
—
200,382
—
—
—
—
200,382
—
—
200,382
22,905
41,306
82,301
498,589
920
ⳮ80
—
920
920
41,306
104,626
499,509
(unaudited,
consolidated)
Total current debt(2) . . . . . . . . . . . . . . . . . .
Guaranteed . . . . . . . . . . . . . . . . . . . . . .
Secured(3) . . . . . . . . . . . . . . . . . . . . . . . .
Unguaranteed/unsecured . . . . . . . . . . .
Total non-current debt (excluding current
portion of long-term debt)(4) . . . . . . . . .
Guaranteed . . . . . . . . . . . . . . . . . . . . . .
Secured . . . . . . . . . . . . . . . . . . . . . . . . . .
Unguaranteed/unsecured . . . . . . . . . . .
Shareholder’s equity:
Share capital(5) . . . . . . . . . . . . . . . . . . . .
Legal reserves(6) . . . . . . . . . . . . . . . . . . .
Other reserves(7) . . . . . . . . . . . . . . . . . . .
Total(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
(ii) Company
actual as of
November 2,
2015
Columns may not add up due to rounding.
(1) As adjusted, on a consolidated basis based on the assumption that, by taking into account the opening statement of
financial position of the Company as of November 2, 2015, the incorporation of Company and the Contribution had already
occurred as of September 30, 2015.
(2) Referred to as “Total current liabilities and provisions” in the unaudited condensed consolidated interim financial
statements of EDAG Engineering Schweiz Sub-Holding AG as of and for the nine-month period ended September 30, 2015
and “Total current liabilities” in the unconsolidated opening statement of financial position of the Company, respectively.
As of November 2, 2015, the date of its incorporation, the Company had no indebtedness other than in respect of costs
associated with its incorporation. The Group’s adjusted total current liabilities and provisions include the consolidated total
current liabilities of EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 and the costs related to the
incorporation of the Company amounting to €80 thousand as well as the expected costs related to the Contribution
amounting to approximately €500 thousand mainly for real estate transfer tax (RETT).
119
(3) Relates to land charges on a Spanish property.
(4) Referred to as “Total non-current liabilities and provisions” in the condensed consolidated interim financial statements of
EDAG Engineering Schweiz Sub-Holding AG. As of November 2, 2015, the date of its incorporation, the Company had no
indebtedness other than in respect of costs associated with its incorporation.
(5) Referred to as “Subscribed capital” in the condensed consolidated interim financial statements of EDAG Engineering
Schweiz Sub-Holding AG and “Share capital” in the unconsolidated opening statement of financial position of the Company,
respectively. The Group’s adjusted share capital of €920 thousand represents the share capital of the Company, as the new
holding company of the Group, as of November 2, 2015, the date of its incorporation, and corresponds to the statutory
share capital of the Company of CHF 1,000 thousand converted at the November 2, 2015 exchange rate of CHF 1.09 per euro.
(6) Referred to as “Capital reserves” in the condensed consolidated interim financial statements of EDAG Engineering Schweiz
Sub-Holding AG and “Capital reserve” in the unconsolidated opening statement of financial position of the Company,
respectively. The Group’s adjusted capital reserves reflect the consolidated capital reserves of EDAG Engineering Schweiz
Sub-Holding AG as of September 30, 2015. Due to a common control transaction, the increase in legal reserves of the
Company resulting from the Contribution is not included in the legal reserves of the Group as adjusted.
(7) Sum of “Retained earnings”, “Non-controlling interests”, ”Reserves from profits and losses recognized directly in equity”
and “Currency conversion difference” as referred to in the consolidated financial information of EDAG Engineering Schweiz
Sub-Holding AG. The Group’s adjusted other reserves amounting to €104,626 thousand as of September 30, 2015 include the
costs related to the incorporation of the Company amounting to €80 thousand as well as the expected costs related to the
Contribution amounting to approximately €500 thousand mainly for real estate transfer tax (RETT).
(8) Sum of total current debt, total non-current debt (excluding current portion of long-term debt), share capital, legal reserves
and other reserves in relation to EDAG Engineering Schweiz Sub-Holding AG and the Company, respectively.
II.
INDEBTEDNESS
(i) EDAG
Engineering
Schweiz
Sub-Holding AG
actual as of
September 30,
2015
(unaudited,
consolidated)
(in € thousand)*
A. Cash . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Cash equivalent . . . . . . . . . . . . . . . . .
C. Trading securities(3) . . . . . . . . . . . . . .
D. Liquidity (A) + (B) + (C) . . . . . . . . . . .
E. Current Financial Receivables(4) . . . . .
F. Current bank debt(5) . . . . . . . . . . . . .
G. Current portion of non-current debt
H. Other current financial debt(6) . . . . .
I. Current Financial Debt (F) + (G) + (H) .
J. Net Current Financial Indebtedness
(I) – (E) – (D) . . . . . . . . . . . . . . . . . . . .
K. Non-current bank loans(7) . . . . . . . . .
L. Bonds issued . . . . . . . . . . . . . . . . . . .
M. Other non-current loans(8) . . . . . . . .
N. Non-current Financial Indebtedness
(K) + (L) + (M) . . . . . . . . . . . . . . . . . . .
O. Net Financial Indebtedness (J) + (N) .
*
(ii) Company
actual as of
(iii) Group as
November 2,
adjusted as of
2015(2) September 30, 2015(1)
(audited,
unconsolidated)
(unaudited,
consolidated)
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
26,715
256
188
27,159
39,236
6,138
—
22,591
28,729
920
—
—
920
—
—
—
—
—
27,635
256
188
28,079
39,236
6,138
—
22,591
28,729
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
ⳮ37,666
1,966
—
158,953
ⳮ920
—
—
—
ⳮ38,586
1,966
—
158,953
.....
.....
160,919
123,253
—
ⳮ920
160,919
122,333
Columns may not add up due to rounding.
(1) As adjusted, on a consolidated basis based on the assumption that the incorporation of the Company, by taking into account
the opening statement of financial position of the Company as of November 2, 2015, and the Contribution had already
occurred as of September 30, 2015.
(2) As of November 2, 2015, the date of its incorporation, the Company had no indebtedness. For information on the Company’s
indebtedness based on the assumption that the Company had already been incorporated and that the Contribution had
already occurred as of September 30, 2015, see column (iii) “Group as adjusted as of September 30, 2015”.
(3) Referred to as “Other financial assets” in the condensed consolidated interim financial statements of EDAG Engineering
Schweiz Sub-Holding AG.
120
(4) Comprises in relation to EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 of current financial
receivables from the cash pool towards the Selling Shareholder in an amount of €761 thousand and other current
receivables in an amount of €38,475 thousand from a sale-and-lease-back transaction (see “L. Business—XII. Material
Contracts—3. Agreements relating to real estate—b. Sale-and-lease-back of five properties in Fulda, Cologne, Ingolstadt and
Recklinghausen”.
(5) Comprises in relation to EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 the current portion of
liabilities due to credit institutions.
(6) Comprises in relation to EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 liabilities from loans due to
VKE – Versorgungskasse EDAG-Firmengruppe e.V. (see “L. Business—XII. Material Contracts—1. Financing Agreements—d.
Credit Agreements with VKE – Versorgungskasse EDAG-Firmengruppe e.V.”), liabilities from interest payments in connection
with loans due to ATON Group Finance GmbH (see “L. Business—XII. Material Contracts—1. Financing Agreements—c. Cash
Pooling Agreement” and “L. Business—XII. Material Contracts—1. Financing Agreements—a. EDAG Engineering Holding
GmbH and —b. BFFT Holding GmbH”) as well as liabilities from financing lease and liabilities from loans due to third parties.
Referred to as “Current accounts payable and other liabilities” in the unconsolidated opening statement of financial
position of the Company.
(7) Comprises in relation to EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 the non-current portion of
liabilities due to credit institutions.
(8) Comprises in relation to EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015 loans due to ATON Group
Finance GmbH (see “L. Business—XII. Material Contracts—1. Financing Agreements—a. EDAG Engineering Holding GmbH
and —b. BFFT Holding GmbH”) as well as liabilities from financing leases and liabilities from loans due to third parties.
We did not have any indirect or contingent indebtedness as of September 30, 2015. For
information on contractual obligations and commercial commitments, see “J. Management’s
Discussion and Analysis of Financial Condition and Results of Operation—VII. Selected Data from
the Consolidated/Combined Statement of Financial Position—5. Contractual obligations and
commercial commitments”.
III.
STATEMENT ON WORKING CAPITAL
We are of the opinion that we are in a position to meet the payment obligations that become
due within at least the next twelve months from the date of this prospectus.
IV.
STATEMENT REGARDING SIGNIFICANT CHANGES
Between the date of its incorporation, November 2, 2015, and the date of this prospectus, no
significant change in the Company’s financial or trading position has occurred. Between
September 30, 2015 and the date of this prospectus, no significant change in the financial and
trading position of EDAG Engineering Schweiz Sub-Holding AG and its consolidated subsidiaries,
for which unaudited condensed consolidated interim financial statements as of September 30,
2015 are provided in this prospectus, has occurred.
As of the date of this prospectus, the Company has not acquired the shares in EDAG Engineering
Schweiz Sub-Holding AG and is hence not yet the owner of the business described in this
prospectus. The Company will acquire all of the shares in EDAG Engineering Schweiz SubHolding AG by way of the Contribution which will occur concurrently with the determination of
the Offer Price for the Offer Shares as described above in “C. The Offering—I. Subject Matter of
the Offering”.
For information on current trading and management’s view on future trends, see “X. Recent
Developments and Outlook—I. Recent Developments and—II. Outlook”.
121
H.
DILUTION
For the calculation of the net asset value of the Company we use the consolidated net asset
value of EDAG Engineering Schweiz Sub-Holding AG as of September 30, 2015. This value is
defined as total assets less total non-current liabilities and provisions and total current liabilities
and provisions of EDAG Engineering Schweiz Sub-Holding AG as shown in the unaudited
condensed consolidated statement of financial position included in the unaudited condensed
consolidated interim financial statements of EDAG Engineering Schweiz Sub-Holding AG as of
and for the nine-month period ended September 30, 2015, which amounted to €146.51 million
as of September 30, 2015.
After subtracting the maximum estimated costs of the Offering and listing to be borne by the
Company in the amount of €3.58 million, the net asset value of EDAG Engineering Schweiz SubHolding AG would have been €142.93 million as of September 30, 2015, or €5.72 per Company’s
share (based on 25,000 thousand shares).(1) Based on an Offer Price at the mid-point of the Price
Range, that would correspond to a direct dilution of €15.78, corresponding to 73.4%, per
Company’s share (based on 25,000 thousand shares) for the parties acquiring the Offer Shares
following the completion of the Offering.
The table below illustrates the dilutive effect of the Offering(1):
Offer Price per share (in €; based on 25,000 thousand shares and on the mid-point of the
Price Range) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.50
Net asset value of the Company per share (based on 25,000 thousand shares) as of
September 30, 2015 (in €) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.86
Net asset value of the Company per share (based on 25,000 thousand shares) following
the Offering (in €) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.72
Amount by which the Offer Price per share (based on 25,000 thousand shares) exceeds the
net asset value of the Company per share following the Offering (immediate dilution to
the new shareholders of the Company per share) (in €) . . . . . . . . . . . . . . . . . . . . . . . . . .
15.78
Immediate dilution (in %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73.4
(1)
Effects from the reorganization of the Group by incorporation of the Company on November 2, 2015, i.e. capital
contribution in cash amounting to €920 thousand minus costs related to the incorporation of the Company amounting to
€80 thousand and expected costs related to the Contribution amounting to approximately €500 thousand mainly for real
estate transfer tax (RETT) are not reflected here. Had the Company already been incorporated and the Contribution been
completed as of September 30, 2015, the net asset value of the Company would have been €146.85 million.
122
I.
SELECTED FINANCIAL AND OTHER INFORMATION
We have a complex financial history, which may limit the comparability of the financial
information contained in this prospectus.
The Company was incorporated on November 2, 2015. Since the Company, as of the date of this
prospectus, has not conducted any business, acquired any assets or incurred any liabilities other
than as directly related to its incorporation and the Offering, we do not present any financial
information of the Company in this prospectus except for its audited opening statement of
financial position as of November 2, 2015. The financial information contained in the following
tables is taken or derived from (i) the audited consolidated financial statements as of and for
the fiscal year ended December 31, 2014, which includes corresponding figures for the fiscal
years ended December 31, 2013 and December 31, 2012, of EDAG Engineering GmbH and (ii) the
unaudited condensed consolidated interim financial statements as of and for the nine-month
period ended September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG with the
corresponding unaudited interim financial information for the nine-month period ended
The audited consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (“IFRS”) and the
unaudited condensed consolidated interim financial statements have been prepared in
accordance with IFRS on interim financial reporting (IAS 34). PwC Germany has audited the
consolidated financial statements of EDAG Engineering GmbH as of and for the fiscal year
ended December 31, 2014, which include the corresponding figures for the fiscal year ended
December 31, 2013, the opening statement of financial position as of January 1, 2013 and, on a
combined basis, the corresponding figures as of and for the fiscal year ended December 31, 2012
and issued an unqualified auditor’s report (uneingeschränkter Bestätigungsvermerk) on these
consolidated financial statements as of December 31, 2014. The aforementioned audited
consolidated financial statements and the auditor’s report thereon are included in the financial
section of this prospectus. Our historical results are not necessarily indicative of the results that
should be expected in the future and our interim results are not necessarily indicative of the
results that should be expected for the full year of the period.
On September 14, 2015 EDAG Engineering Schweiz Sub-Holding AG was incorporated by
contribution in kind of all outstanding shares in EDAG Engineering Holding GmbH, the German
intermediate holding company which holds all of the shares in EDAG Engineering GmbH.
Contribution. Following such Contribution, the Company will therefore directly hold all shares in
EDAG Engineering Schweiz Sub-Holding AG and will indirectly hold, through EDAG Engineering
Schweiz Sub-Holding AG and EDAG Engineering Holding GmbH, all shares in EDAG Engineering
GmbH. The Group’s business is conducted by EDAG Engineering GmbH, which will be an indirect
subsidiary of the Company upon consummation of the Contribution, and its direct and indirect
subsidiaries. Unless otherwise indicated, all historical consolidated/combined financial
information included in this prospectus is either of EDAG Engineering Schweiz Sub-Holding AG
or EDAG Engineering GmbH.
Between September 14, 2015, the incorporation date of EDAG Engineering Schweiz Sub-Holding
AG, and September 30, 2015, EDAG Engineering GmbH and EDAG Engineering Holding GmbH
have entered into certain transactions (in particular the assumption of a loan liability of EDAG
Engineering GmbH in an amount of €107.3 million by EDAG Engineering Holding GmbH as of
September 30, 2015), the effects of which would adversely affect the comparability between
unaudited consolidated interim financial information for the nine-month period ended
September 30, 2015 prepared on the level of EDAG Engineering GmbH and the audited
consolidated and combined financial information included in this prospectus for the fiscal years
ended December 31, 2012, 2013 and 2014 prepared on the level of EDAG Engineering GmbH. In
123
order to provide investors with more comparable financial information for these periods, we
present the unaudited consolidated interim financial information as of and for the nine-month
period ended September 30, 2015 on the level of EDAG Engineering Schweiz Sub-Holding AG
with the corresponding unaudited interim financial information for the nine-month period
ended September 30, 2014 on the level of EDAG Engineering GmbH.
EDAG Engineering GmbH was established in April 2012 and acquired by the Selling Shareholder in
July 2012. Until January 1, 2014, EDAG Engineering GmbH and EDAG GmbH & Co. KGaA (which was
the former parent entity of the EDAG Group) were sister companies under the Selling Shareholder.
With effect from January 1, 2014, EDAG GmbH & Co. KGaA was merged into EDAG Engineering
GmbH by way of a mixed non-cash contribution agreement against the assumption of certain
liabilities. As a result, 2014 is the first fiscal year for which we were able to prepare consolidated
financial statements for EDAG Engineering GmbH and all of its current subsidiaries. The audited
consolidated financial statements as of and for the fiscal year ended December 31, 2014 of EDAG
Engineering GmbH contain the corresponding period ended December 31, 2013. However, for the
fiscal year ended December 31, 2012, the corresponding figures are shown on a combined basis and
therefore have limited comparability. In addition, we have executed several material acquisitions
and disposals since 2012, which may further limit the comparability of the financial information as
presented in the audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 contained in this prospectus. On September 24, 2012, EDAG Engineering GmbH
acquired a majority of the shares of Rücker AG, a technological design engineering company
focusing (at that time) on the international automotive, aircraft and aerospace industries. For the
purposes of the audited combined financial information for the fiscal year ended December 31,
2012, the Rücker Group was first included in the group of combined entities with effect for
accounting purposes from October 1, 2012. On January 18, 2013, EDAG Engineering GmbH acquired
the BFFT Group, a manufacture-independent engineering service provider for the automotive
industry. For the purposes of the audited consolidated financial information for the fiscal year
ended December 31, 2013, the BFFT Group was first included in the group of consolidated entities
with effect for accounting purposes from January 1, 2013. We disposed of several subsidiaries,
including the Group’s aerospace subsidiaries which were acquired as part of the Rücker Group and
had been included in the group of combined entities with effect for accounting purposes from
October 1, 2012 within the Others segment, these subsidiaries were classified as a disposal group in
accordance with IFRS 5 for the fiscal year ended December 31, 2013. As a result, these subsidiaries’
results were included in our audited consolidated statement of comprehensive income for the fiscal
year ended December 31, 2013 and their assets and liabilities were presented as assets held for sale
in our audited consolidated statement of financial position as of December 31, 2013. These
subsidiaries’ results for the three-month period ended March 31, 2014 were included in our audited
consolidated statement of comprehensive income for the fiscal year ended December 31, 2014. With
effect from March 31, 2014, the Group disposed of its shares in these aerospace subsidiaries,
following which these subsidiaries ceased to be included in the consolidated group of entities for
the purposes of the audited consolidated financial information for the fiscal year ended
December 31, 2014. As a result, these subsidiaries’ assets and liabilities were not included in the
audited consolidated statement of financial position as of December 31, 2014. In addition, we sold
EKS InTec GmbH on May 31, 2014, following which this subsidiary ceased to be included in the
consolidated group of entities for the purposes of the audited consolidated financial information for
the fiscal year ended December 31, 2014. Because of these effects, the financial information as
presented in our audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 may not be fully comparable and investors should take into consideration the
material differences resulting from the factors discussed above. See “J. Management’s Discussion
and Analysis of Financial Condition and Results of Operations—III. Comparability of our results of
operations as a result of the complex financial history of the Group” for a further description of
these factors, including a more comprehensive list of our acquisitions and disposals.
Where financial data in the following tables is labeled “audited”, this means that it has been
taken from the audited consolidated financial statements of EDAG Engineering GmbH. The label
124
“unaudited” is used in the following tables to indicate financial data that has not been taken
from the audited consolidated financial statements of EDAG Engineering GmbH, but rather was
taken from the unaudited condensed consolidated interim financial statements as of and for the
nine-month period ended September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG or
from our internal accounting system, or has been calculated based on financial data from the
above-mentioned sources. Certain financial data (including percentages) in the following tables
have been rounded according to established commercial standards, whereas aggregate amounts
(sum totals, sub-totals, differences or amounts put in relation) are calculated based on the
underlying unrounded amounts. As a result, the aggregate amounts in the following tables may
not correspond in all cases to the rounded amounts contained in the tables. Furthermore, in
those tables, these rounded figures may not add up exactly to the totals contained in those
tables. Financial information which is preceded by a minus sign (“ⳮ”) denotes the negative of
such number presented. In respect of financial data set out in the following tables, a dash (“ⳮ”)
signifies that the relevant figure is not available, while a zero (“0”) signifies that the relevant
figure is available but has been rounded to or equals zero.
125
I.
SELECTED DATA FROM THE CONSOLIDATED/COMBINED STATEMENT OF COMPREHENSIVE
INCOME
The following table shows selected financial information from the unaudited condensed
consolidated interim statements of comprehensive income of EDAG Engineering Schweiz SubHolding AG for the nine-month periods ended September 30, 2015 and September 30, 2014 as
well as from the audited consolidated statements of comprehensive income for the fiscal years
ended December 31, 2014 and December 31, 2013 and the audited combined statement of
comprehensive income for the fiscal year ended December 31, 2012 of EDAG Engineering
GmbH:
For the nine-month period
ended September 30,
2015
(in € thousand)
PROFIT OR LOSS
Sales revenues and changes in
inventories . . . . . . . . . . . . . . . . .
Sales revenues . . . . . . . . . . . . . .
Changes in inventories . . . . . . . .
Other income . . . . . . . . . . . . . . . . .
Material expenses . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . .
Personnel expenses . . . . . . . . . . . .
Depreciation, amortization and
impairment . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . .
Earnings before interest and taxes
(EBIT)(4) . . . . . . . . . . . . . . . . . . . .
2014(1)
2014(1)(2)
2013(2)
(audited, consolidated)
2012(3)
(audited,
combined)
534,035
534,375
ⳮ340
15,324
ⳮ72,877
506,286
513,954
ⳮ7,668
22,187
ⳮ78,719
689,748
697,458
ⳮ7,710
58,868
ⳮ115,823
632,412 415,181
620,127 415,836
12,285
ⳮ655
16,326
20,267
ⳮ104,943 ⳮ79,514
476,482
ⳮ332,311
449,754
ⳮ314,147
632,793
ⳮ417,308
543,795 355,934
ⳮ386,226 ⳮ245,664
ⳮ18,087
ⳮ81,132
ⳮ18,202
ⳮ70,517
ⳮ25,613
ⳮ102,229
ⳮ24,984 ⳮ12,475
ⳮ94,062 ⳮ62,313
44,952
46,888
87,643
38,523
35,482
44,952
46,888
87,643
38,523
35,482
5,499
5,260
6,965
8,351
1,338
—
ⳮ11,758
ⳮ26,224
—
ⳮ4,777
ⳮ2,177
—
—
—
—
—
30
30
—
—
71
499
866
—
—
6,329
3,972
4,845
2,791
—
ⳮ250
—
ⳮ18,405
—
—
381
—
1,292
—
—
—
—
865
—
—
54,805
44,891
57,877
49,665
32,043
RECONCILIATION TO ADJUSTED
EARNINGS BEFORE INTEREST AND
TAXES (ADJUSTED EBIT)
(EBIT)(4) . . . . . . . . . . . . . . . . . . . .
Adjustments:
Expenses (+) from purchase
price allocation(5) . . . . . . . . . .
Income (ⳮ) / expenses (+) from
deconsolidations(6) . . . . . . . . . .
Income (ⳮ) from reversal of
provisions(7) . . . . . . . . . . . . . . .
Income (ⳮ) / expenses (+) from
initial consolidations(8) . . . . . .
Expenses (+) from additional
selling costs from M&A
transactions(9) . . . . . . . . . . . . .
Expenses (+) from
restructuring(10) . . . . . . . . . . . .
Income (ⳮ) from the sale of real
estate(11) . . . . . . . . . . . . . . . . .
Expenses (+) from the sale of
real estate(12) . . . . . . . . . . . . . .
Expenses (+) from impairment
of real estate(13) . . . . . . . . . . .
Adjusted earnings before
interest and taxes (Adjusted
EBIT)(4) . . . . . . . . . . . . . . . . . . .
126
ended September 30,
2015
(in € thousand)
2014(1)
2014(1)(2)
2013(2)
2012(3)
(audited,
combined)
(EBIT)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Result from investments accounted for
using the equity method . . . . . . . . . . . . .
Financial income . . . . . . . . . . . . . . . . . . . . .
Financing expenses . . . . . . . . . . . . . . . . . . .
44,952
46,888
87,643
38,523
35,482
1,052
1,841
ⳮ8,050
—
518
ⳮ9,142
—
1,035
ⳮ11,752
—
1,487
ⳮ8,301
50
2,997
ⳮ5,938
Financial result . . . . . . . . . . . . . . . . . . . . . .
ⳮ5,157
ⳮ8,624
ⳮ10,717
ⳮ6,814
ⳮ2,891
Earnings before taxes from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . .
39,795
ⳮ12,337
38,264
ⳮ9,295
76,926
ⳮ18,688
31,709
ⳮ9,982
32,591
ⳮ7,672
operations . . . . . . . . . . . . . . . . . . . . . . . .
27,458
28,969
58,238
21,727
24,919
Discontinued operations
Earnings after taxes from discontinued
operations . . . . . . . . . . . . . . . . . . . . . . . .
—
1,550
1,586
ⳮ1,905
ⳮ767
Profit or loss . . . . . . . . . . . . . . . . . . . . . . . .
27,458
30,519
59,824
19,822
24,152
27,423
30,573
59,868
18,634
24,277
36
ⳮ54
ⳮ43
1,188
ⳮ125
(14)
FROM THE PROFIT OR LOSS ATTRIBUTABLE TO:
Shareholders of the parent company . . . . .
Minority shares (non-controlling
interest) . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Operating results for the various subsidiaries disposed of during the the nine-month period ended September 30, 2014 or
year ended December 31, 2014, respectively, are included only for the periods prior to their respective disposals. See “J.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—III. Comparability of our results of
operations as a result of the complex financial history of the Group” for a list of our main acquisitions and disposals.
(4) EBIT and Adjusted EBIT are non-IFRS measures. EBIT represents earnings before interest and taxes and Adjusted EBIT
represents EBIT adjusted for non-recurring items. While the amounts included in EBIT and Adjusted EBIT have been derived
from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014 and our
unaudited condensed consolidated interim financial statements as of and for the nine-month period ended September 30,
2015, as applicable, such measures are not financial measures calculated in accordance with IFRS. Accordingly, EBIT and
Adjusted EBIT should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or
combined statements of comprehensive income or our consolidated or combined statements of cash flow, which are
prepared in accordance with IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating performance and as
a measure of economic success of our business. In addition, we believe that EBIT and Adjusted EBIT are measures commonly
used by investors. EBIT and Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled
(5) Expenses from purchase price allocation represents the effects of the amortization of step-ups due to purchase price
allocation attributable to the acquisition of the Rücker Group, the BFFT Group and iSILOG GmbH in the amount of
€4.2 million, €1.2 million and €0.1 million respectively, for the nine-month period ended September 30, 2015, to the
acquisition of the Rücker Group and the BFFT Group in an amount of €4.0 million and €1.2 million respectively, for the
nine-month period ended September 30, 2014, to the acquisition of the Rücker Group and the BFFT Group in an amount of
€5.3 million and €1.6 million, respectively, for the fiscal year ended December 31, 2014 and €5.3 million and €3.0 million,
respectively, for the fiscal year ended December 31, 2013. For the fiscal year ended December 31, 2012, expenses from
purchase price allocation represents the effects of the amortization of step-ups due to purchase price allocation of
€1.3 million attributable to the acquisition of the Rücker Group.
(6) Income / expenses from deconsolidations for the nine-month period ended September 30, 2014 represents the disposals of
our aerospace subsidiaries (which had previously been a part of the Rücker Group) (income of €4.0 million) and EKS InTec
GmbH (income of €8.0 million). Income / expenses from deconsolidations for the fiscal year ended December 31, 2014
represents the disposals of our aerospace subsidiaries (income of €4.6 million), EKS InTec GmbH (income of €8.0 million) and
‘Werkzeug und Karosseriesysteme Eisenach” business division by way of a spin-off for absorption into EDAG Werkzeug +
Karosserie GmbH (income of €14.4 million). In the fiscal year ended December 31, 2012, income / expenses from
deconsolidations comprises the deconsolidation of Rosata Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt FuldaWest KG.
127
(7) Income (-) from reversal of provisions includes the reversal of provisions relating to severance pay and brokerage in
connection with certain sale and lease-back transactions. (see L. “Business—XII. Material Contracts—3. Agreements relating
to real estate—b. Sale-and-lease-back of five properties in Fulda, Cologne, Ingolstadt and Recklinghausen”).
(8) Income / expenses from initial consolidations represents the initial consolidation of our Russian subsidiary EDAG Production
Solutions RU OOO (Obschtschestwo s ogranitschennoi otwetstwennostju).
(9) Expenses from additional selling costs from M&A transactions for the nine-month period ended September 30, 2015 and for
the nine-month period ended September 30, 2014 represents follow-up costs in connection with the disposal of certain
subsidiaries and costs relating to a merger (EDAG Testing Solutions GmbH) and for the fiscal year ended December 31, 2014
represents the costs of the disposals of certain subsidiaries, including the aerospace subsidiaries and EKS Intec GmbH.
(10) Expenses from restructuring for the nine-month period ended September 30, 2015 and for the nine-month period ended
September 30, 2014 represents expenses for consulting and reengineering (€5.7 million and €1.4 million), respectively, and
severance pay (€0.6 million and €2.6 million), respectively. Expenses from restructuring represents expenses for consulting
and reengineering (€1.6 million) and severance pay (€3.2 million) for the fiscal year ended December 31, 2014 and severance
pay (€0.7 million) and consulting (€2.1 million) for the fiscal year ended December 31, 2013.
(11) Income from the sale of real estate for the fiscal year ended December 31, 2014 represents the disposal of real estate
(€2.5 million) and income from a sale-and-lease-back transaction (see L. “Business—XII. Material Contracts—3. Agreements
relating to real estate—b. Sale-and-lease-back of five properties in Fulda, Cologne, Ingolstadt and Recklinghausen”)
(€15.9 million).
(12) Expenses from the sale of real estate for the nine-month period ended September 30, 2015 represents follow-up costs and
for the fiscal year ended December 31, 2014 represents expenses for consulting (€0.1 million) and sales provisions (€1.2
million).
(13) Expenses from impairment of real estate for the fiscal year ended December 31, 2014 represents the impairment of the fair
value valuation of real estate in a subsidiary in the Czech Republic.
(14) Discontinued operations represents expenses in connection with an indemnity payment for the nine-month period ended
September 30, 2014 and in the fiscal year ended December 31, 2014, provisions in connection with the sale of the
“Production” business division in the fiscal year ended December 31, 2013 and assets, liabilities and provisions of the
“Production Systems” and “Production” business divisions in the fiscal year ended December 31, 2012, which were classified
128
II.
SELECTED DATA FROM THE CONSOLIDATED/COMBINED STATEMENT OF FINANCIAL
POSITION
consolidated interim statement of financial position as of September 30, 2015 of EDAG
Engineering Schweiz Sub-Holding AG as well as from the audited consolidated statements of
financial position as of December 31, 2014 and December 31, 2013 and the audited combined
statement of financial position as of December 31, 2012 of EDAG Engineering GmbH:
As of September 30,
2015
(in € thousand)
ASSETS
Intangible assets . . . . . . . . . . . . . . . .
Of which goodwill . . . . . . . . . . . . .
Property, plant and equipment . . . . .
Investment property . . . . . . . . . . . . .
Financial assets . . . . . . . . . . . . . . . . . .
Investments accounted for using the
equity method . . . . . . . . . . . . . . . .
Non-current accounts receivable and
other receivables . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . .
Total non-current assets . . . . . . . . . .
As of December 31,
2014(1)
2013(1)
As of
January 1,
2013(2)
(audited,
combined)
106,754
64,162
62,073
—
196
109,864
63,903
55,608
—
171
113,393
63,903
87,529
3,004
535
84,346
44,528
82,974
3,105
519
16,585
15,519
—
—
1,219
506
187,333
1,350
681
183,193
1,301
3,158
208,920
1,464
1,306
173,714
1,606
6,884
18,190
3,397
139,332
50,373
37,732
29,150
138,915
197,084
156,055
128,248
761
188
3,494
26,971
5,539
92
6,679
39,502
27,956
109
5,977
68,606
20,209
68
5,017
36,188
750
311,256
750
301,364
9,043
295,712
7,105
209,173
498,589
484,557
504,632
382,887
.
.
.
22,905
41,306
92,279
20,000
40,746
67,756
50
40,000
67,839
50
40,000
70,441
.
.
ⳮ7,935
ⳮ2,134
ⳮ9,592
ⳮ1,568
ⳮ3,061
ⳮ2,059
ⳮ2,976
ⳮ568
.
.
.
146,421
91
146,512
117,342
69
117,411
102,769
153
102,922
106,947
6,058
113,005
Provisions for pensions and similar
obligations . . . . . . . . . . . . . . . . . . .
21,715
22,358
12,018
10,698
Inventories . . . . . . . . . . . . . . . . . . . . .
Future receivables from construction
contracts . . . . . . . . . . . . . . . . . . . . .
Current accounts receivable and
Of which cash receivables from
cash pooling . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . .
Income tax assets . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . .
Assets held for sale / discontinued
operations . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . .
Subscribed capital . . . . . . . . . . . . . .
Capital reserves . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . .
Reserves from profits and losses
recognized directly in equity . . . .
Currency conversion difference . . . .
Equity attributable to shareholders
of the parent company . . . . . . . . .
Non-controlling interests . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . .
129
As of September 30,
2015
(in € thousand)
Other non-current provisions . . . . .
Non-current financial liabilities . . .
Non-current accounts payable and
other liabilities . . . . . . . . . . . . . .
Non-current income tax liabilities .
Deferred tax liabilities . . . . . . . . . .
Total non-current liabilities and
provisions . . . . . . . . . . . . . . . . . .
As of December 31,
2014(1)
2013(1)
As of
January 1,
2013(2)
(audited,
combined)
..
..
4,315
160,919
5,004
162,003
4,399
197,737
6,710
6,001
..
..
..
96
1,460
11,877
151
1,460
10,155
92
1,460
18,837
83
1,335
15,575
..
200,382
201,131
234,543
40,402
Current provisions . . . . . . . . . . . . . . .
Current financial liabilities . . . . . . . . .
Future liabilities from construction
contracts . . . . . . . . . . . . . . . . . . . . .
Current accounts payable and other
liabilities . . . . . . . . . . . . . . . . . . . . .
Income tax liabilities . . . . . . . . . . . . .
Provisions and liabilities in
connection with assets held for sale
/ from discontinued operations . . .
Total current liabilities and
provisions . . . . . . . . . . . . . . . . . . . .
12,173
28,729
12,767
4,858
13,083
35,648
8,384
117,948
36,099
61,618
38,579
27,575
69,368
5,326
73,082
13,690
69,281
5,970
71,839
3,734
—
—
4,606
—
151,695
166,015
167,167
229,480
Total equity, liabilities and
provisions . . . . . . . . . . . . . . . . . . . .
498,589
484,557
504,632
382,887
(1) Data as of December 31, 2014 and December 31, 2013 on a consolidated basis and each comprising the business of the
Rücker Group and the business of the BFFT Group. Furthermore, our aerospace business, which was formerly part of the
Rücker Group, was included in our audited combined financial information as of December 31, 2012. As of December 31,
2013, our aerospace business was classified as a “disposal group” under IFRS 5, and it was disposed of on March 31, 2014.
(2) Data as of January 1, 2013 on a combined basis and comprising the business of the Rücker Group. Data excludes the business
of the BFFT Group, which was acquired with effect for accounting purposes from January 1, 2013.
130
III.
SELECTED DATA FROM THE CONSOLIDATED/COMBINED STATEMENT OF CASH FLOW
consolidated interim statements of cash flow of EDAG Engineering Schweiz Sub-Holding AG for
the nine-month periods ended September 30, 2015 and September 30, 2014 as well as from the
audited consolidated statements of cash flow for the fiscal years ended December 31, 2014 and
December 31, 2013 and the audited combined statement cash flow for the fiscal year ended
December 31, 2012 of EDAG Engineering GmbH:
ended September 30,
2015
(in € thousand)
operations . . . . . . . . . . . . . . . . . . .
discontinued operations . . . . . . . .
Income tax expenses . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . .
Financial result . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . .
Impairment from revaluation at fair
value less costs of disposal . . . . . . .
Depreciation and amortization/
write-ups on tangible and
intangible assets . . . . . . . . . . . . . .
Depreciation on current assets . . . . .
Other non-cash expenses/income . . .
Increase/decrease in non-current
provisions . . . . . . . . . . . . . . . . . . . .
Profit/loss on the disposal of fixed
assets . . . . . . . . . . . . . . . . . . . . . . .
Increase/decrease in inventories . . . .
Increase/decrease in future
receivables from construction
contracts, receivables and other
assets that are not attributable to
investing or financing activities . . .
Increase/decrease in current
provisions . . . . . . . . . . . . . . . . . . . .
Increase/decrease in accounts
payables and other liabilities and
provisions that are not
attributable to investing or
financing activities . . . . . . . . . . . . .
Cash inflow/outflow from operating
activities/operating cash flow . . . .
Deposits from disposals of tangible
fixed assets . . . . . . . . . . . . . . . . . . .
Payments for investments in tangible
fixed assets . . . . . . . . . . . . . . . . . . .
Deposits from disposals of intangible
fixed assets . . . . . . . . . . . . . . . . . . .
Payments for investments in
intangible fixed assets . . . . . . . . . .
Deposits from disposals of financial
assets . . . . . . . . . . . . . . . . . . . . . . .
(1)
2014
2014(1)(2)
2013(2)
2012(3)
(audited,
combined)
27,458
28,969
58,238
21,727
24,919
—
12,336
ⳮ16,326
5,158
563
1,550
9,960
ⳮ10,783
8,623
518
1,586
19,367
ⳮ15,625
10,717
981
ⳮ1,905
9,171
ⳮ10,114
6,814
716
ⳮ767
7,786
ⳮ3,031
3,827
940
—
—
865
—
—
18,087
—
2,054
18,202
—
ⳮ18,402
24,748
—
ⳮ34,664
24,984
—
ⳮ716
13,930
—
ⳮ10,124
ⳮ1,333
8,775
11,364
ⳮ654
6,247
ⳮ106
5,279
52
5,518
ⳮ18,321
5,519
ⳮ151
ⳮ13,964
ⳮ683
ⳮ1,073
ⳮ38,062
ⳮ41,652
ⳮ42,080
ⳮ27,567
18,690
ⳮ567
ⳮ4,735
ⳮ27
4,922
ⳮ1,850
ⳮ30,800
5,557
34,050
7,766
ⳮ14,023
ⳮ16,259
12,152
56,718
21,029
44,788
5,833
793
1,934
1,130
2,320
ⳮ16,703
ⳮ11,402
ⳮ17,469
ⳮ15,924
ⳮ13,545
173
83
81
253
1,013
ⳮ4,252
ⳮ5,754
ⳮ7,691
ⳮ6,485
ⳮ2,895
29
22
604
7,142
44
131
ended September 30,
2015
(in € thousand)
financial assets . . . . . . . . . . . . . . . .
Deposits from disposals in shares of
fully consolidated companies/
divisions . . . . . . . . . . . . . . . . . . . . .
Payments for investments in shares
in fully consolidated companies /
divisions . . . . . . . . . . . . . . . . . . . . .
Cash inflow/outflow from investing
activities/investing cash flow . . . .
Deposits from capital increases and
grants from the shareholders . . . .
Payments for investments in shares
of fully consolidated companies
from NCI . . . . . . . . . . . . . . . . . . . .
Payments to shareholders/partners
(prior year dividend, capital
repayments, other
distributions) . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . .
Borrowing of short-term financial
liabilities . . . . . . . . . . . . . . . . . . . .
Repayment of short-term financial
liabilities . . . . . . . . . . . . . . . . . . . .
Borrowing of medium-term and
long-term financial liabilities . . . . .
Repayment of medium-term and
long-term financial liabilities . . . . .
Repayment of leasing liabilities . . . .
Repayment/investment in financial
receivables . . . . . . . . . . . . . . . . . . .
Cash inflow/outflow from financing
activities/financing cash flow . . . .
Net cash changes in financial
funds . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in currency
exchange rate and other effects
from changes of financial funds . .
Financial funds at the start of
period . . . . . . . . . . . . . . . . . . . . . .
Financial funds at the end of the
period . . . . . . . . . . . . . . . . . . . . . .
of which: cash and cash
equivalents . . . . . . . . . . . . . . . . . .
of which: assets held for sale/
discontinued operations . . . . . . . .
Free cash flow (FCF) – equity
approach(4) . . . . . . . . . . . . . . . . . . .
(1)
2014
2014(1)(2)
2013(2)
2012(3)
(audited,
combined)
ⳮ45
ⳮ35
ⳮ104
ⳮ41
ⳮ203
—
14,388
30,044
—
26,640
ⳮ1,096
ⳮ39,995
ⳮ39,995
ⳮ48,515
ⳮ66,422
ⳮ16,061
ⳮ41,900
ⳮ32,596
ⳮ62,440
ⳮ53,048
—
—
—
—
40,050
—
—
—
ⳮ14,424
ⳮ41,478
ⳮ14
ⳮ5,535
ⳮ30
ⳮ1,146
ⳮ30
ⳮ9,560
ⳮ14,055
ⳮ6,189
ⳮ1
ⳮ3,954
22,142
174
—
102
87,996
ⳮ1,021
ⳮ14,258
ⳮ31,868
ⳮ84,046
ⳮ68,134
—
—
11
192,893
—
—
ⳮ21
ⳮ14,000
ⳮ244
ⳮ35,608
ⳮ260
ⳮ954
ⳮ395
ⳮ338
ⳮ506
4,872
12,085
22,541
3,047
ⳮ20,078
20,423
ⳮ17,419
ⳮ54,774
75,979
ⳮ6,443
ⳮ11,897
ⳮ47,167
ⳮ30,652
34,568
ⳮ14,703
ⳮ634
433
252
ⳮ854
ⳮ185
39,502
69,902
69,902
36,188
51,076
26,971
23,168
39,502
69,902
36,188
26,971
23,168
39,502
68,606
36,188
—
—
—
1,296
—
ⳮ32,320
ⳮ29,748
24,122
ⳮ41,411
ⳮ8,260
132
year ended December 31, 2014, respectively, are included only for the periods prior to their respective disposals. See
“J. Management’s Discussion and Analysis of Financial Condition and Results of Operations—III. Comparability of our results
of operations as a result of the complex financial history of the Group” for a list of our main acquisitions and disposals.
business of the Rücker Group and the business of the BFFT Group for the full fiscal year. Furthermore, our aerospace
business, which was formerly part of the Rücker Group, was included in our audited combined financial information for the
fiscal year ended December 31, 2012 with effect for accounting purposes from October 1, 2012, the date of the initial
inclusion of the Rücker Group in our combined group of entities for the purposes of our audited combined financial
information.
(4) Free cash flow (FCF) – equity approach is a non-IFRS measure. Free cash flow (FCF) – equity approach represents operating
cash flow less investing cash flow. While the amounts included in free cash flow (FCF) – equity approach have been derived
2015, as applicable, such measure is not a financial measure calculated in accordance with IFRS. Accordingly, free cash flow
(FCF) – equity approach should be viewed as supplemental to, but not as a substitute for, measures presented in our
consolidated or combined statements of cash flow, which are prepared in accordance with IFRS. Free cash flow (FCF) – equity
approach, as presented in this prospectus, may not be comparable to similarly titled measures reported by other companies
due to differences in the way these measures are calculated.
133
IV.
SELECTED SEGMENTAL DATA
The following table shows the sales revenues and changes in inventories, Core Revenue, EBIT,
Adjusted EBIT and Adjusted EBIT margin broken down by segment as well as Adjusted Core EBIT
and Adjusted Core EBIT margin derived from the unaudited condensed consolidated interim
statements of comprehensive income of EDAG Engineering Schweiz Sub-Holding AG for the
nine-month periods ended September 30, 2015 and September 30, 2014 as well as from the
audited consolidated statements of comprehensive income for the fiscal years ended
December 31, 2014 and December 31, 2013 and the audited combined statement of
comprehensive income for the fiscal year ended December 31, 2012 for EDAG Engineering
GmbH:
ended September 30,
2015
(in € thousand)
2014(1)
2014(1)(2)
2013(2)
2012(3)
(audited
unless
otherwise
(audited unless otherwise indicated,
indicated, consolidated) combined)
SALES REVENUES AND CHANGES IN INVENTORIES
Vehicle Engineering . . . . . . . . . . . . . . . . . . . . .
Production Solutions . . . . . . . . . . . . . . . . . . . . .
Electrics/Electronics . . . . . . . . . . . . . . . . . . . . . .
Consolidation for the three core segments
(unaudited)(4) . . . . . . . . . . . . . . . . . . . . . . . . .
337,839
87,053
117,492
311,078
74,692
85,588
417,604
106,375
123,834
391,795
77,762
98,004
254,104
71,367
37,579
ⳮ8,484
ⳮ5,575
ⳮ13,131
ⳮ6,970
ⳮ6,266
Core Revenue (including changes in
inventories) (unaudited)(5) . . . . . . . . . . . . . .
Others (after consolidation)(unaudited)(6) . . . .
533,900
135
465,783
40,503
634,682
55,066
560,591
71,821
356,784
58,397
Total Business . . . . . . . . . . . . . . . . . . . . . . . . . .
534,035
506,286
689,748
632,412
415,181
Vehicle Engineering
EBIT(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase price allocation(8) (unaudited) . . . .
30,694
4,166
24,805
4,024
26,027
5,317
19,052
5,341
17,672
1,338
Adjusted EBIT(7) (unaudited) . . . . . . . . . . . . .
Adjusted EBIT margin (%)(9) (unaudited) . .
34,860
10.3%
28,829
9.3%
31,344
7.5%
24,393
6.2%
19,010
7.5%
Production Solutions
EBIT(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,687
121
8,515
—
11,974
—
9,023
—
7,140
—
Electrics/Electronics
EBIT(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,808
12.4%
8,515
11.4%
11,974
11.3%
9,023
11.6%
7,140
10.0%
8,196
1,212
4,036
1,236
8,219
1,648
6,558
3,010
3,416
—
9,408
8.0%
5,272
6.2%
9,867
8.0%
9,568
9.8%
3,416
9.1%
Adjusted Core EBIT(10) (unaudited) . . . . . . . . . .
Adjusted Core EBIT margin (%)(11)
(unaudited) . . . . . . . . . . . . . . . . . . . . . . .
55,076
42,616
53,185
42,984
29,566
10.3%
9.1%
8.4%
7.7%
8.3%
ⳮ5,499
ⳮ5,260
ⳮ6,965
ⳮ8,351
ⳮ1,338
ⳮ4,625
9,532
41,423
3,890
7,254
EBIT / ADJUSTED EBIT
Group purchase price allocation
adjustment(12) . . . . . . . . . . . . . . . . . . . . . . . .
(6)
Others
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13)
.....................
44,952
46,888
87,643
38,523
35,482
(14)
.....................
9,853
ⳮ1,997
ⳮ29,766
11,142
ⳮ3,439
.............
54,805
44,891
57,877
49,665
32,043
Adjusted EBIT margin of the Group (%)(16)
(unaudited) . . . . . . . . . . . . . . . . . . . . . . .
10.3%
8.9%
8.4%
7.9%
7.7%
EBIT of the Group
Total adjustments
Adjusted EBIT of the Group
(15)
year ended December 31, 2014, respectively, are included only for the periods prior to their respective disposals. See “J.
134
(4) Consolidation for the three core segments is a non-IFRS measure. Consolidation for the three core segments represents the
elimination of the sales revenues within the three core segments (Vehicle Engineering, Electrics/Electronics and Production
Solutions) and consists of the sum of “sales revenue with other segments” relating to the three core segments and excludes
“sales revenue with other segments” relating to the Others segment.
(5) Core Revenue (including changes in inventories) is a non-IFRS measure. Core Revenue (including changes in inventories)
represents our sales revenues with third parties (i.e. revenues with entities that are not part of the EDAG Group) and
changes in inventories for our three core segments (Vehicle Engineering, Electrics/Electronics and Production Solutions), and
excludes our Others segment, which contains many of our intra-Group eliminations. Our management uses Core Revenue
(including changes in inventories) to assess our operating performance and as a measure of success of our business.
(6) The Others segment includes Haus Kurfürst GmbH, which provides hotel and restaurant services for EDAG customers and
employees, as well as a small batch production of chassis modules at our location in Eisenach, which we deconsolidated as of
December 31, 2014, EKS InTech GmbH, which was sold on May 31, 2014, and our aerospace subsidiaries, which were sold on
March 31, 2014. The Others segment also included the personnel service provider ED Work GmbH & Co. KG until its
deconsolidation on May 31, 2012. In addition, all of our essential non-operating expenses and income are also reported
here. With regard to sales revenues and changes in inventory, the Others segment represents revenues with third parties and
excludes sales revenues with other segments.
(7) EBIT and Adjusted EBIT are non-IFRS measures. EBIT of a given segment represents earnings before interest and taxes for
that segment. Adjusted EBIT of a given segment represents EBIT for that segment adjusted for purchase price allocation for
that segment. See “J. Management’s Discussion and Analysis of Financial Condition and Results of Operations—II. Factors
affecting results of operations—6. Acquisitions and divestments”. While the amounts included in EBIT and Adjusted EBIT
have been derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014
and our unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
September 30, 2015, as applicable, such measures are not financial measures calculated in accordance with IFRS. Accordingly,
EBIT and Adjusted EBIT should be viewed as supplemental to, but not as a substitute for, measures presented in our
consolidated or combined statements of comprehensive income or our consolidated or combined statements of cash flow,
which are prepared in accordance with IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating
performance and as a measure of economic success of our business. In addition, we believe that EBIT and Adjusted EBIT are
measures commonly used by investors. However, EBIT and Adjusted EBIT, as presented in this prospectus, may not be
comparable to similarly titled measures reported by other companies due to differences in the way these measures are
calculated.
(8) Purchase price allocation represents the effects of the amortization of step-ups due to purchase price allocation attributable
to the acquisition of the Rücker Group, the BFFT Group and iSILOG GmbH in the amount of €4.2 million, €1.2 million and
€0.1 million respectively, for the nine-month period ended September 30, 2015, to the acquisition of the Rücker Group and
the BFFT Group in an amount of €4.0 million and €1.2 million respectively, for the nine-month period ended September 30,
2014, to the acquisition of the Rücker Group and the BFFT Group in an amount of €5.3 million and €1.6 million, respectively,
for the fiscal year ended December 31, 2014 and €5.3 million and €3.0 million, respectively, for the fiscal year ended
December 31, 2013. For the fiscal year ended December 31, 2012, purchase price allocation represents the effects of the
amortization of step-ups due to purchase price allocation of €1.3 million attributable to the acquisition of the Rücker Group.
(9) Adjusted EBIT margin is a non-IFRS measure. Adjusted EBIT margin represents the ratio of the Adjusted EBIT of a given
segment over the sales revenues and changes in inventories for that segment. While the amounts included in Adjusted EBIT
margin have been derived from our audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the nine-month
period ended September 30, 2015, as applicable, this measure is not a financial measure calculated in accordance with IFRS.
Accordingly, Adjusted EBIT margin should be viewed as supplemental to, but not as a substitute for, measures presented in
our consolidated or combined statements of comprehensive income or our consolidated or combined statements of cash
flow, which are prepared in accordance with IFRS.
(10) Adjusted Core EBIT is a non-IFRS measure. The first component of the Adjusted Core EBIT represents the sum of EBIT for our
three core segments (Vehicle Engineering, Electrics/Electronics and Production Solutions), and excludes our Others segment.
The second component is the purchase price allocation adjustments on a Group level which are added to the first
component. These purchase price allocation adjustments relate only to the three core segments (Vehicle Engineering,
Electrics/Electronics and Production Solutions). No purchase price allocation adjustments relate to the Others segment. Our
management uses Adjusted Core EBIT to assess our operating performance and as a measure of success of our business.
While the amounts included in Adjusted Core EBIT have been derived from our audited consolidated financial statements as
of and for the fiscal year ended December 31, 2014 and our unaudited condensed consolidated interim financial statements
as of and for the nine-month period ended September 30, 2015, as applicable, this measure is not a financial measure
calculated in accordance with IFRS. Accordingly, Adjusted Core EBIT should be viewed as supplemental to, but not as a
substitute for, measures presented in our consolidated or combined statements of comprehensive income or our
consolidated or combined statements of cash flow, which are prepared in accordance with IFRS.
(11) Adjusted Core EBIT margin is a non-IFRS measure. Adjusted Core EBIT margin represents the ratio of our Adjusted Core EBIT
over our Core Revenue (including changes in inventories). While the amounts included in Adjusted Core EBIT margin have
been derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014 and
our unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
September 30, 2015, as applicable, this measure is not a financial measure calculated in accordance with IFRS. Accordingly,
135
Adjusted Core EBIT margin should be viewed as supplemental to, but not as a substitute for, measures presented in our
which are prepared in accordance with IFRS.
(12) Group purchase price allocation adjustment comprises the sum of the effects from the amortization of step-ups due to
purchase price allocations with respect to the Vehicle Engineering and Electrics/Electronics segments. Because these
adjustments are also included in total adjustments on a Group level, it is necessary to remove the amount of these purchase
price allocations in order to reconcile the Adjusted Core EBIT with Adjusted EBIT of the Group.
(13) EBIT of the Group is a non-IFRS measure. EBIT of the Group represents the combined EBIT for our four segments. While the
amounts included in Group EBIT have been derived from our audited consolidated financial statements as of and for the
fiscal year ended December 31, 2014, which include corresponding figures for the fiscal years ended December 31, 2013 and
December 31, 2012, and our unaudited condensed consolidated interim financial statements as of and for the nine-month
Accordingly, EBIT of the Group should be viewed as supplemental to, but not as a substitute for, measures presented in our
(14) Total adjustments apply across the entire Group and comprise income/expenses from deconsolidations, income/expenses
from initial consolidations, expenses from additional selling costs from M&A transactions, expenses from restructuring,
income from the sale of real estate, expenses from the sale of real estate, expenses from impairment of real estate and
amortization of step-ups due to purchase price allocation. See Adjustments in the table under “I. Selected Financial and
Other Information—I. Selected Data from the Consolidated/Combined Statement of Comprehensive Income” for more
information these adjustments.
(15) Adjusted EBIT of the Group is a non-IFRS measure. Adjusted EBIT of the Group represents our EBIT of the Group less the total
adjustments mentioned in footnote 13 above. See Adjustments in the table under “I. Selected Financial and Other
Information— I. Selected Data from the Consolidated/Combined Statement of Comprehensive Income” for more information
on these adjustments a reconciliation to EBIT and Gross Profit. While the amounts included in Adjusted EBIT of the Group
have been derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014
and our unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
Adjusted EBIT of the Group should be viewed as supplemental to, but not as a substitute for, measures presented in our
(16) Adjusted EBIT margin of the Group is a non-IFRS measure. Adjusted EBIT margin of the Group represents the ratio of the
Adjusted EBIT of the Group over sales revenues and changes in inventories. While the amounts included in Adjusted EBIT
margin of the Group have been derived from our audited consolidated financial statements as of and for the fiscal year
ended December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the
nine-month period ended September 30, 2015, as applicable, this measure is not a financial measure calculated in
accordance with IFRS. Accordingly, Adjusted EBIT margin of the Group should be viewed as supplemental to, but not as a
136
V.
1.
SELECTED KEY AND OTHER PERFORMANCE INDICATORS
Revenue growth
The following table shows the consolidated or combined sales revenues and changes in
inventories broken down by segment as well as our core revenue (“Core Revenue”), which
represents our sales revenues with third parties (i.e. revenues with entities that are not part of
the EDAG Group) and changes in inventories for our three core segments (Vehicle Engineering,
Electrics/Electronics and Production Solutions), and excludes our Others segment, derived from
the unaudited condensed consolidated interim statements of comprehensive income of EDAG
Engineering Schweiz Sub-Holding AG for the nine-month periods ended September 30, 2015
and September 30, 2014 as well as from the audited consolidated statements of comprehensive
income for the fiscal years ended December 31, 2014 and December 31, 2013, unless otherwise
indicated, and the audited combined statement of comprehensive income for the fiscal year
ended December 31, 2012 of EDAG Engineering GmbH, unless otherwise indicated, as well as
the changes between the periods under review:
ended September 30,
2015
(in € thousand)
(1)
2014
2014(1)(2)
2013(2)
2012(3)
(audited unless otherwise
(audited
unless
otherwise
indicated,
combined)
SALES REVENUES AND CHANGES IN
INVENTORIES
Vehicle Engineering . . . . . . . . . .
Change from previous period
(%)(unaudited) . . . . . . . . . .
Production Solutions . . . . . . . . .
(%)(unaudited) . . . . . . . . . .
Electrics/Electronics . . . . . . . . . .
(%)(unaudited) . . . . . . . . . .
Consolidation for the three core
segments (unaudited)(4) . . . . .
...
337,839
311,078
417,604
391,795
254,104
...
...
8.6%
87,053
—
74,692
6.6%
106,375
54.2%
77,762
—
71,367
...
...
16.5%
117,492
—
85,588
36.8%
123,834
9.0%
98,004
—
37,579
...
37.3%
—
26.4%
160.8%
—
...
ⳮ8,484
ⳮ5,575
ⳮ13,131
ⳮ6,970
ⳮ6,266
533,900
465,783
634,682
560,591
356,784
14.6%
—
13.2%
57.1%
—
135
40,503
55,066
71,821
58,397
ⳮ99.7%
—
ⳮ23.3%
23.0%
—
534,035
506,286
689,748
632,412
415,181
5.5%
—
9.1%
52.3%
—
inventories) (unaudited)(5) . . . . . .
(%)(unaudited) . . . . . . . . . . . . .
Others (after consolidation)
(unaudited)(6) . . . . . . . . . . . . . . . .
(%)(unaudited) . . . . . . . . . . . . .
Total sales revenues and changes in
inventories . . . . . . . . . . . . . . . . . .
(%)(unaudited) . . . . . . . . . . . . .
(1) Revenues for the various subsidiaries disposed of during the the nine-month period ended September 30, 2014 or year
ended December 31, 2014, respectively, are included only for the periods prior to their respective disposals. See “J.
137
Solutions) and consists of the sum of “sales revenue with other segments” relating to the three core segments and excludes
represents our sales revenues with third parties and changes in inventories for our three core segments (Vehicle Engineering,
Electrics/Electronics and Production Solutions), and excludes our Others segment, which contains many of our intra-Group
eliminations. Our management uses Core Revenue (including changes in inventories) to assess our operating performance
and as a measure of success of our business.
(6) The Others segment represents revenues with third parties and includes Haus Kurfürst GmbH, which provides hotel and
restaurant services for EDAG customers and employees, as well as a small batch production of chassis modules at our location
in Eisenach, which we deconsolidated as of December 31, 2014, EKS InTech GmbH, which was sold on May 31, 2014, and our
aerospace subsidiaries, which were sold on March 31, 2014. The Others segment also included the personnel service provider
ED Work GmbH & Co. KG until its deconsolidation on May 31, 2012. In addition, all of our essential non-operating expenses
and income are also reported here.
2.
EBIT / Adjusted EBIT / Adjusted Core EBIT
Management uses earnings before interest and taxes (“EBIT”), adjusted earnings before interest
and taxes (“Adjusted EBIT”) and adjusted core EBIT (“Adjusted Core EBIT”) to assess the
economic success of our business, with Adjusted EBIT being our central control parameter. EBIT
is equal to gross profit less personnel expenses, depreciation, amortization and impairment and
other expenses. Adjusted EBIT is equal to EBIT as adjusted for exceptional income/expenses
which in the fiscal years ended December 31, 2014, 2013 and 2012, as well as in the nine-month
periods ended September 30, 2015 and September 30, 2014, related, as applicable, to expenses
from purchase price allocation, income/expenses from deconsolidations, income/expenses from
initial consolidations, expenses from additional selling costs from M&A transactions, expenses
from restructuring/severance payments, income from the sale of real estate, expenses from the
sale of real estate and expenses from the impairment of real estate. Management believes that
these metrics provide a view of our income that is more accurately indicative of our actual
performance than other metrics. Adjusted Core EBIT represents the sum of the Adjusted EBIT for
our three core segments (Vehicle Engineering, Electrics/Electronics and Production Solutions)
and excludes our Others segment. Adjusted Core EBIT is adjusted for purchase price allocations
on a Group level. These purchase price allocation adjustments relate only to the three core
segments (Vehicle Engineering, Electrics/Electronics and Production Solutions). No purchase price
allocation adjustments relate to the Others segment.
138
The following table shows the consolidated or combined EBIT, Adjusted EBIT and Adjusted EBIT
margin broken down by segment as well as Adjusted Core EBIT and Adjusted Core EBIT margin
derived from the unaudited condensed consolidated interim statements of comprehensive
income of EDAG Engineering Schweiz Sub-Holding AG for the nine-month periods ended
September 30, 2015 and September 30, 2014 as well as from the audited consolidated
statements of comprehensive income for the fiscal years ended December 31, 2014 and
December 31, 2013 and the audited combined statement of comprehensive income for the fiscal
year ended December 31, 2012 of EDAG Engineering GmbH:
ended September 30,
2015
(in € thousand)
2014
2014(1)
2013(1)
2012(2)
(audited
unless
otherwise
indicated,
combined)
EBIT / ADJUSTED EBIT
Vehicle Engineering
EBIT(3) . . . . . . . . . . . . . . . . . . . . .
Purchase price allocation(4)
(unaudited) . . . . . . . . . . . . . . .
30,694
24,805
26,027
19,052
17,672
4,166
4,024
5,317
5,341
1,338
34,860
28,829
31,344
24,393
19,010
10.3%
9.3%
7.5%
6.2%
7.5%
10,687
8,515
11,974
9,023
7,140
121
—
—
—
—
10,808
8,515
11,974
9,023
7,140
12.4%
11.4%
11.3%
11.6%
10.0%
8,196
4,036
8,219
6,558
3,416
1,212
1,236
1,648
3,010
—
9,408
5,272
9,867
9,568
3,416
8.0%
6.2%
8.0%
9.8%
9.1%
55,076
42,616
53,185
42,984
29,566
10.3%
9.1%
8.4%
7.7%
8.3%
Group purchase price allocation
adjustment(8) . . . . . . . . . . . . . . .
ⳮ5,499
ⳮ5,260
ⳮ6,965
ⳮ8,351
ⳮ1,338
Others(9)
EBIT . . . . . . . . . . . . . . . . . . . . . . . .
ⳮ4,625
9,532
41,423
3,890
7,254
44,952
46,888
87,643
38,523
35,482
Total adjustments(11) . . . . . . . . . . .
9,853
ⳮ1,997
ⳮ29,766
11,142
ⳮ3,439
Adjusted EBIT of the Group(12) . . .
54,805
44,891
57,877
49,665
32,043
Adjusted EBIT margin of the
Group (%)(13) (unaudited) . .
10.3%
8.9%
8.4%
7.9%
7.7%
(3)
Adjusted EBIT (unaudited) . . .
Adjusted EBIT margin (%)(5)
(unaudited) . . . . . . . . . . . . .
EBIT(3) . . . . . . . . . . . . . . . . . . . . .
(unaudited) . . . . . . . . . . . . . . .
(3)
(unaudited) . . . . . . . . . . . . .
EBIT(3) . . . . . . . . . . . . . . . . . . . . .
(unaudited) . . . . . . . . . . . . . . .
(3)
(unaudited) . . . . . . . . . . . . .
(6)
Adjusted Core EBIT
(unaudited) . . . . . . . . . . . . . . . .
(%)(7) (unaudited) . . . . . . . .
EBIT of the Group
(10)
...........
139
(3) EBIT and Adjusted EBIT are non-IFRS measures. EBIT of a given segment represents earnings before interest and taxes for that
segment. Adjusted EBIT of a given segment represents EBIT for that segment adjusted for purchase price allocation for that
segment. See “J. Management’s Discussion and Analysis of Financial Condition and Results of Operations—II. Factors affecting
results of operations—6. Acquisitions and divestments”. While the amounts included in EBIT and Adjusted EBIT have been
derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014 and our
unaudited condensed consolidated interim financial statements as of and for the nine-month period ended September 30, 2015,
as applicable, such measures are not financial measures calculated in accordance with IFRS. Accordingly, EBIT and Adjusted EBIT
should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined
statements of comprehensive income or our consolidated or combined statements of cash flow, which are prepared in
accordance with IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating performance and as a measure of
economic success of our business. In addition, we believe that EBIT and Adjusted EBIT are measures commonly used by investors.
However, EBIT and Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled measures reported
by other companies due to differences in the way these measures are calculated.
(4) Purchase price allocation represents the effects of the amortization of step-ups due to purchase price allocation attributable
to the acquisition of the Rücker Group, the BFFT Group and iSILOG GmbH in the amount of €4.2 million, €1.2 million and
€0.1 million respectively, for the nine-month period ended September 30, 2015, to the acquisition of the Rücker Group and
the BFFT Group in an amount of €4.0 million and €1.2 million respectively, for the nine-month period ended
September 30, 2014, to the acquisition of the Rücker Group and the BFFT Group in an amount of €5.3 million and
€1.6 million, respectively, for the fiscal year ended December 31, 2014 and €5.3 million and €3.0 million, respectively, for the
fiscal year ended December 31, 2013. For the fiscal year ended December 31, 2012, purchase price allocation represents the
effects of the amortization of step-ups due to purchase price allocation of €1.3 million attributable to the acquisition of the
Rücker Group.
(5) Adjusted EBIT margin is a non-IFRS measure. Adjusted EBIT margin represents the ratio of the Adjusted EBIT of a given
segment over the sales revenues and changes in inventories for that segment. While the amounts included in Adjusted EBIT
margin have been derived from our audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the nine-month
Accordingly, Adjusted EBIT margin should be viewed as supplemental to, but not as a substitute for, measures presented in
our consolidated or combined statements of comprehensive income or our consolidated or combined statements of cash
(8) Group purchase price allocation adjustment comprises the sum of the effects from the amortization of step-ups due to
purchase price allocations with respect to the Vehicle Engineering and Electrics/Electronics segments. Because these
adjustments are also included in total adjustments on a Group level, it is necessary to remove the amount of these purchase
price allocations in order to reconcile the Adjusted Core EBIT with Adjusted EBIT of the Group.
here.
(10) EBIT of the Group is a non-IFRS measure. EBIT of the Group represents the combined EBIT of the Group for our four
segments. While the amounts included in Group EBIT have been derived from our audited consolidated financial statements
as of and for the fiscal year ended December 31, 2014, which include corresponding figures for the fiscal years ended
December 31, 2013 and December 31, 2012, and our unaudited condensed consolidated interim financial statements as of
and for the nine-month period ended September 30, 2015, as applicable, this measure is not a financial measure calculated
in accordance with IFRS. Accordingly, EBIT of the Group should be viewed as supplemental to, but not as a substitute for,
measures presented in our consolidated or combined statements of comprehensive income or our consolidated or combined
statements of cash flow, which are prepared in accordance with IFRS.
140
(11) Total adjustments apply across the entire Group and comprise income/expenses from deconsolidations, income/expenses
from initial consolidations, expenses from additional selling costs from M&A transactions, expenses from restructuring,
income from the sale of real estate, expenses from the sale of real estate, expenses from impairment of real estate and
amortization of step-ups due to purchase price allocation. See Adjustments in the table under “I. Selected Financial and
Other Information—I. Selected Data from the Consolidated/Combined Statement of Comprehensive Income” for more
information these adjustments.
(12) Adjusted EBIT of the Group is a non-IFRS measure. Adjusted EBIT of the Group represents our EBIT of the Group less the total
adjustments mentioned in footnote 11 above. See Adjustments in the table under “I. Selected Financial and Other
Information— I. Selected Data from the Consolidated/Combined Statement of Comprehensive Income” for more information
these adjustments. While the amounts included in Adjusted EBIT of the Group have been derived from our audited
consolidated financial statements as of and for the fiscal year ended December 31, 2014 and our unaudited condensed
consolidated interim financial statements as of and for the nine-month period ended September 30, 2015, as applicable, this
measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted EBIT of the Group should be
viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined statements of
comprehensive income or our consolidated or combined statements of cash flow, which are prepared in accordance with
IFRS.
(13) Adjusted EBIT margin of the Group is a non-IFRS measure. Adjusted EBIT margin of the Group represents the ratio of the
Adjusted EBIT of the Group over sales revenues and changes in inventories. While the amounts included in Adjusted EBIT
margin of the Group have been derived from our audited consolidated financial statements as of and for the fiscal year
ended December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the
accordance with IFRS. Accordingly, Adjusted EBIT margin of the Group should be viewed as supplemental to, but not as a
3.
Investments
The Group’s investments consist of capital expenditures. The following table sets forth a
summary of the consolidated or combined capital expenditure broken down by type of
expenditure derived from the unaudited condensed consolidated interim financial information
of EDAG Engineering Schweiz Sub-Holding AG for the nine-month periods ended September 30,
2015 and September 30, 2014 as well as the audited consolidated financial information for the
fiscal years ended December 31, 2014 and December 31, 2013 and the audited combined
financial information for the fiscal year ended December 31, 2012 of EDAG Engineering GmbH,
as well as the ratio of capital expenditures over revenues and changes in inventories:
ended September 30,
2015
2014(1)
2013(1)
2012(2)
(audited
unless
indicated
(audited unless indicated otherwise,
(unaudited, consolidated) otherwise, consolidated) combined)
(in € thousand)
Software and other intangible
assets . . . . . . . . . . . . . . . . . . . . . . .
Land and buildings . . . . . . . . . . . . . .
Technical equipment and
machinery . . . . . . . . . . . . . . . . . . .
Other equipment, operating and
office equipment . . . . . . . . . . . . . .
Advance payments and construction
in progress . . . . . . . . . . . . . . . . . . .
2014
.
.
4,228
2,366
5,785
1,150
7,728
1,663
6,401
1,453
2,884
1,383
.
3,745
3,011
5,767
4,956
3,473
.
7,734
6,192
9,353
9,083
7,411
.
2,702
1,120
757
359
1,098
Total Capital expenditures
(unaudited) . . . . . . . . . . . . . . . . . . .
20,775
17,258
25,268
22,252
16,249
Capital expenditures as percentage of
sales revenues and changes in
inventories (unaudited) (%)(3) . . . . .
3.9%
3.4%
3.7%
3.5%
3.9%
141
(3) Capital expenditures as percentage of sales revenues and changes in inventories is a non-IFRS measure. Capital expenditures
as percentage of sales revenues and changes in inventories represents the ratio of our capital expenditures over sales
revenues and changes in inventories. While the amounts included in capital expenditures as percentage of sales revenues
and changes in inventories have been derived from our audited consolidated financial statements as of and for the fiscal
year ended December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the
accordance with IFRS. Accordingly, capital expenditures as percentage of sales revenues and changes in inventories should
be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined statements
of comprehensive income or our consolidated or combined statements of cash flow, which are prepared in accordance with
IFRS.
4.
Number of employees
The following table shows our average number of employees over a given period, broken down
by contractual relationship and segment derived from the unaudited condensed consolidated
interim financial information of EDAG Engineering Schweiz Sub-Holding AG for the nine-month
periods ended September 30, 2015 and September 30, 2014 as well as from the audited
consolidated financial information for the fiscal years ended December 31, 2014 and
December 31, 2013 and the audited combined financial information for the fiscal year ended
ended September 30, For the year ended December 31,
2015
2014
2014(1)(2)
2013(2)
(audited,
consolidated)
2012(3)
(average number of employees over period)
(unaudited,
consolidated)
(audited,
combined)
Breakdown according to contractual
relationships(4)
Salaried employees . . . . . . . . . . . . . . . . .
Apprentices . . . . . . . . . . . . . . . . . . . . . . .
7,216
498
6,956
494
6,978
506
6,569
442
4,259
298
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
7,450
7,484
7,011
4,557
Breakdown into segments(4)
Vehicle Engineering . . . . . . . . . . . . . . . . .
Production Solutions . . . . . . . . . . . . . . . .
Electrics/Electronics . . . . . . . . . . . . . . . . .
4,764
1,291
1,659
4,854
1,082
1,224
4,806
1,120
1,292
4,645
873
1,043
2,644
732
354
Core Employees(5) (unaudited) . . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
—
7,160
290
7,218
266
6,561
450
3,730
827
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
7,450
7,484
7,011
4,557
(1) Adjusted for the several divestitures undertaken in the fiscal year 2014, the number of new hires, including trainees, as of
December 31, 2014 would have been approximately 600 employees, which represents an increase of approximately 8%
compared to the fiscal year ended December 31, 2013.
(4) Employees from discontinued operations are not shown.
(5) Core Employees represents our employees in our three core segments (Vehicle Engineering, Electrics/Electronics and
Production Solutions), and excludes our employees in the Others segment.
here.
142
5.
Trade working capital
The following table sets forth a summary of our trade working capital derived from the
unaudited condensed consolidated interim financial information of EDAG Engineering Schweiz
Sub-Holding AG as of September 30, 2015 as well as from the audited consolidated financial
information as of December 31, 2014 and December 31, 2013 and the audited combined
financial information as of December 31, 2012 of EDAG Engineering GmbH and from EDAG
Engineering Schweiz Sub-Holding AG’s internal accounting system:
As of September 30,
2015
(unaudited,
consolidated)
(in € thousand)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31,
2014(1)
2013(1)
(audited,
consolidated)
As of
January 1,
2013(2)
(audited,
combined)
1,606
6,884
18,190
3,397
.
85,165
134,844
112,875
80,029
.
3,459
1,987
3,420
3,183(4)
.
—
4
4
323(4)
.
.
139,332
227,956
50,373
187,208
37,732
154,031
29,150
112,685(5)
.
15,343
18,421
18,864
21,748
.
.
220
—
246
6
973
136
999
25
.
8,069
12,349
6,130
5,568
.
.
28,030
51,662
49,269
80,291
32,449
58,552
22,007
50,347
Trade working capital (unaudited) (3) . . . .
177,900
113,801
113,669
Current trade receivables due from third
parties . . . . . . . . . . . . . . . . . . . . . . . . . .
Current trade receivables due from
affiliated companies (unaudited) . . . . .
Current receivables due from related
parties (unaudited) . . . . . . . . . . . . . . . .
contracts . . . . . . . . . . . . . . . . . . . . . . . .
Current trade receivables (unaudited) . .
Current trade payables due to third
parties . . . . . . . . . . . . . . . . . . . . . . . . . .
Current trade payables due to affiliated
companies . . . . . . . . . . . . . . . . . . . . . . .
Current payables due to related parties .
Future payables from construction
contracts with a negative balance . . . .
Advance payments received on
construction contracts with a negative
balance . . . . . . . . . . . . . . . . . . . . . . . . .
Current trade payables . . . . . . . . . . . . . .
65,735(5)
(3) Trade working capital is a non-IFRS measure. Trade working capital represents the sum of inventories and current trade
receivables less current trade payables. While trade working capital has been derived from our audited consolidated
financial statements as of and for the fiscal year ended December 31, 2014 and our unaudited condensed consolidated
interim financial statements as of and for the nine-month period ended September 30, 2015 and additionally from the
internal accounting system, as applicable, such measures are not financial measures calculated in accordance with IFRS.
Accordingly, trade working capital should be viewed as supplemental to, but not as a substitute for, measures presented in
our consolidated or combined financial statements, which are prepared in accordance with IFRS.
(4) Data as of December 31, 2012.
(5) Includes data as of December 31, 2012 and as of January 1, 2013.
143
6.
Cash Conversion
The following table sets forth our adjusted cash flow (“Adjusted Cash Flow”) and adjusted cash
conversion (“Adjusted Cash Conversion”) derived from the unaudited condensed consolidated
interim financial information of EDAG Engineering Schweiz Sub-Holding AG for the nine-month
periods ended September 30, 2015 and September 30, 2014 as well as from the audited
consolidated financial information for the fiscal years ended December 31, 2014 and
December 31, 2013 and the audited combined financial information for the fiscal year ended
December 31, 2012 of EDAG Engineering GmbH and from EDAG Engineering Schweiz
Sub-Holding AG’s internal accounting system. Adjusted Cash Flow and Adjusted Cash Conversion
are performance indicators used by our management to assess our operating cash generation
performance.
ended September 30,
2015
(in € million)
Adjusted Cash Flow(3,4) . . . . . .
Adjusted Cash Conversion
(%)(3,5) . . . . . . . . . . . . . . . . .
2014
47
41
69%
70%
2014(1)
2013(1)
2012(2)
(unaudited,
combined)
51
44
27
67%
66%
62%
(3) Adjusted Cash Flow and Adjusted Cash Conversion are non-IFRS measures. While the amounts included in Adjusted Cash
Flow and Adjusted Cash Conversion have been derived from our audited consolidated financial statements as of and for the
fiscal year ended December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for
the nine-month period ended September 30, 2015, as applicable, such measures are not financial measures calculated in
accordance with IFRS. Accordingly, Adjusted Cash Flow and Adjusted Cash Conversion should be viewed as supplemental to,
but not as a substitute for, measures presented in our consolidated or combined statements of comprehensive income or our
(4) Adjusted Cash Flow is defined as Adjusted EBITDA less capital expenditures. Adjusted EBITDA is defined as Adjusted EBIT plus
depreciation and amortization less effects of the amortization of step-ups due to purchase price allocations.
(5) Adjusted Cash Conversion is defined as Adjusted EBITDA less capital expenditures divided by Adjusted EBITDA.
144
J. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results of operations should be read
together with the additional information contained elsewhere in this prospectus, in particular in the
sections on “A. Risk Factors”, “L. Business” and “I. Selected Consolidated Financial Information”, as
well as in the audited opening statement of financial position as of November 2, 2015 of the
Company and the audited consolidated financial statements as of and for the fiscal year ended
December 31, 2014 of EDAG Engineering GmbH and the unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended September 30, 2015 of EDAG
Engineering Schweiz Sub-Holding AG and related notes included elsewhere in this prospectus.
The Company was incorporated on November 2, 2015. Since the Company, as of the date of this
prospectus, has not conducted any business, acquired any assets or incurred any liabilities other
than as directly related to its incorporation and the Offering, we do not present any financial
information of the Company in this prospectus except for its audited opening statement of
financial position as of November 2, 2015. The financial information contained in this section is
taken or derived from (i) the audited consolidated financial statements as of and for the fiscal
year ended December 31, 2014, which includes corresponding figures for the fiscal years ended
December 31, 2013 and December 31, 2012, of EDAG Engineering GmbH and (ii) the unaudited
condensed consolidated interim financial statements as of and for the nine-month period ended
September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG with the corresponding
unaudited interim financial information for the nine-month period ended September 30, 2014
on the level of EDAG Engineering GmbH.
On September 14, 2015 EDAG Engineering Schweiz Sub-Holding AG was incorporated by
contribution in kind of all outstanding shares in EDAG Engineering Holding GmbH, the German
intermediate holding company which holds all of the shares in EDAG Engineering GmbH.
Contribution. Following the Contribution, the Company will therefore directly hold all shares in
EDAG Engineering Schweiz Sub-Holding AG and will indirectly hold, through EDAG Engineering
Schweiz Sub-Holding AG and EDAG Engineering Holding GmbH, all shares in EDAG Engineering
GmbH. The Group’s business is conducted by EDAG Engineering GmbH, which will be an indirect
subsidiary of the Company upon consummation of the Contribution, and its direct and indirect
subsidiaries. Unless otherwise indicated, all historical consolidated/combined financial
information included in this prospectus is either of EDAG Engineering Schweiz Sub-Holding AG
or EDAG Engineering GmbH.
The audited opening statement of financial position as of November 2, 2015 of the Company and
the audited consolidated financial statements have been prepared in accordance with IFRS and
the unaudited condensed consolidated interim financial statements have been prepared in
accordance with IFRS on interim financial reporting (IAS 34). Our historical results are not
necessarily indicative of the results that should be expected in the future and our interim results
are not necessarily indicative of the results that should be expected for the full year of the period.
PwC-CH, has audited the opening statement of financial position of the Company as of
November 2, 2015 and issued an unqualified auditor’s report thereon. PwC Germany has audited
the consolidated financial statements of EDAG Engineering GmbH as of and for the fiscal year
ended December 31, 2014, which includes the corresponding figures for the fiscal year ended
December 31, 2013, the opening statement of financial position as of January 1, 2013 and, on a
combined basis, the corresponding figures as of and for the fiscal year ended December 31, 2012
and issued an unqualified auditor’s report (uneingeschränkter Bestätigungsvermerk) on these
consolidated financial statements as of December 31, 2014. The aforementioned audited
opening statement of financial position and audited consolidated financial statements and the
auditor’s reports thereon are included in the financial section of this prospectus.
145
Where financial data in the following tables is labeled “audited”, this means that it has been
taken from the audited opening statement of financial position as of November 2, 2015 of the
Company or the audited consolidated financial statements of EDAG Engineering GmbH. The
label “unaudited” is used in the following tables to indicate financial data that has not been
taken from the audited opening statement of financial position as of November 2, 2015 of the
Company or the audited consolidated financial statement of EDAG Engineering GmbH but
rather was taken from the unaudited condensed consolidated interim financial statements as of
and for the nine-month period ended September 30, 2015 of EDAG Engineering Schweiz
Sub-Holding AG or from the internal accounting system of EDAG Engineering Schweiz
Sub-Holding AG, or has been calculated based on financial data from the above-mentioned
sources. Certain financial data (including percentages) in the following tables have been
rounded according to established commercial standards, whereas aggregate amounts (sum
totals, sub-totals, differences or amounts put in relation) are calculated based on the underlying
unrounded amounts. As a result, the aggregate amounts in the following tables may not
correspond in all cases to the rounded amounts contained in the tables. Furthermore, in those
tables, these rounded figures may not add up exactly to the totals contained in those tables.
Financial information which is preceded by a minus sign (“ⳮ”) denotes the negative of such
number presented. In respect of financial data set out in the following tables, a dash (“-”)
signifies that the relevant figure is not available, while a zero (“0”) signifies that the relevant
figure is available but has been rounded to or equals zero.
Some of the statements contained below relate to future revenue, costs, capital expenditures,
acquisitions and financial condition and include forward-looking statements. Because such
statements involve inherent uncertainties, actual results may differ materially from the results
expressed in or implied by such forward-looking statements. A discussion of such uncertainties
can be found in “B. General Information—III. Forwardlooking Statements”.
information contained in this prospectus. See “—III. Comparability of our results of operations
as a result of the complex financial history of the Group”.
I.
OVERVIEW
We are one of the world’s largest ESPs in the automotive industry in terms of revenues and
headcount (source: A.T. Kearney Report). Independence in this context means that no OEM or
supplier holds any majority or significant minority shareholding in an ESP. We specialize in the
development of automotive components and modules, derivative car models (“derivatives”),
including, in individual cases, entire cars, as well as production facilities. We have strong and
long-standing relationships with all major German OEMs in the passenger car and commercial
vehicle industries with particular focus on German premium OEMs.
Furthermore, we have successfully developed other reputable automotive OEMs as customers in
markets outside Germany, particularly in Europe. To complement our activities, we also work for
systems suppliers in the automotive industry. In order to meet our customers’ demands we
follow their international footprint and offer our services globally.
Through our global network of 57 locations, located in close proximity to our customers at
important automotive hubs, we ensure that the expertise of the entire Group is available to our
customers on a local basis. Particularly in Germany, we have a dense network of facilities in the
vicinity of our key customers. While we have generated 78% of our revenues and on average
employed approximately 77% of our total workforce in the fiscal year ended December 31, 2014
in Germany, our international footprint is set up strategically and quality-driven. Our facilities in
low-cost countries mainly carry out intercompany contracts and enable us to offer best-cost
services, while other international facilities, for instance in China, provide our complete
portfolio of high-end solutions to German OEMs and local automotive manufacturers that are
engaged in joint ventures with German and other Western OEMs.
146
We offer complete vehicle competence across the entire product value chain and vehicle life
cycle. Our comprehensive portfolio of services ranges from design to product development,
modelling, gauge construction, building of prototypes and testing to the development of
turnkey production systems. We believe that we deliver particular value to our customers given
our complementary production solutions business, which enables us to assist our customers not
only in the development but also the subsequent production of vehicles. Due to our complete
vehicle competence, we believe we have become a premium ESP in the automotive industry and
are able to benefit from our relationships across different products and divisions of our
customers.
Our special know-how is the guidance and support of customers from the initial idea to the
finished prototype and ultimately through production. These complete vehicle development
capabilities form part of our business strategy and are key to our success. On demand from our
customers, we are present throughout the entire life cycle of a product and accompany our
customers from research and advanced development, to concept and design to series
development and finally supervision of series production. In addition to vehicle engineering
services, we carry out many complimentary tasks along the development chain such as project
management, quality management, supply chain management or the documentation of entire
projects. Furthermore, our “production-optimized solutions” are developed to ensure the
feasibility of the production process for particular products and designs.
Feynsinn, our consultancy service, provides all-round customer support from the concept phase
to the implementation process and offers advice on processes, methods and tools to optimize
development and production sequences. Feynsinn also provides implementation services and
training.
In meeting customer demand, we put a particular emphasis on current key trends and
technologies in the automotive industry such as innovation for CO2 reduction, lightweight design,
e-mobility and car IT (source: Lünendonk analysis 2014). In order to meet our customers’
expectations and to contribute to automotive development, we constantly adapt our portfolio of
services to changing customer needs and varying market conditions. Our subsidiary BFFT, for
example, has specialized technical knowledge in the field of electrical and electronic development,
which is key for the development of applications such as driver assistance and safety systems, incar entertainment and car connectivity. BFFT also provides support for our customers in the fields
of hardware and software development and alternative drive technologies.
In addition, we maintain a number of electronics laboratories and testing facilities, most
importantly our accredited testing center in Fulda.
While the high level of expertise and years of experience of our engineers enable us, as we
believe, to deliver premium services in each individual area of the services we offer, we
additionally founded our Competence Centers “Lightweight Construction”, “E-Mobility”,
“Car-IT” and “New Production Technology”. These Competence Centers concentrate the
combined special knowledge of our experts in different fields and help further develop and
retain such special knowledge.
With an average workforce of 7,714 employees (including trainees but excluding employees
from discontinued operations) in the nine-month period ended September 30, 2015 (nine-month
period ended September 30, 2014: 7,450), we believe we have reached a scale that allows us to
continue to succeed and grow as a sought-after ESP for German OEMs. In particular, we believe
our ability to handle large-scale projects and to offer the delivery of projects in the form of
work packages instead of employee leasing arrangements, a service which an increasing number
of our customers requests, gives us a competitive advantage, while our scale also offers us the
flexibility and resources to handle large and complex projects.
The Group’s operations are divided into three segments: Vehicle Engineering, Electrics/
Electronics and Production Solutions. In the nine-month period ended September 30, 2015, we
recorded sales revenues and changes in inventories of €534.0 million (in the nine-month period
147
ended September 30, 2014: €506.3 million) and Adjusted EBIT of €54.8 million (in the ninemonth period ended September 30, 2014: €44.9 million). In the fiscal year ended December 31,
2014, we recorded sales revenues and changes in inventories of €689.7 million (in the fiscal year
ended December 31, 2013: €632.4 million, in the fiscal year ended December 31, 2012:
€415.2 million) and Adjusted EBIT of €57.9 million (in the fiscal year ended December 31, 2013:
€49.7 million, in the fiscal year ended December 31, 2012: €32.0 million).
II.
FACTORS AFFECTING RESULTS OF OPERATIONS
Set forth below are certain key factors that have affected our results of operations in the
nine-month periods ended September 30, 2015 and September 30, 2014 and in the fiscal years
ended December 31, 2014, December 31, 2013 and December 31, 2012, and that may impact our
results of operations in the future.
1.
R&D spending and outsourcing trends in the automotive industry
The growth of our business is directly driven by the R&D needs of automotive OEMs and the
budget they allocate to R&D activities.
There have been several trends in the automotive industry driving the need for expanded R&D
activities. Increasing environmental awareness has led to more stringent emissions and fuel
efficiency regulation, as well as higher consumer demand for environmentally sound cars.
Compliance with these heightened standards requires higher R&D spending for technologies
such as powertrains, electric mobility, lightweight construction and the integration of electronic
components. Vehicle electrification, including increased reliance on software and the demand
for integration of electronic components, has been another driving force for automotive R&D
spending. Furthermore, there has been a trend towards a wider offering of vehicle models and
derivatives by automotive OEMs. This, coupled with demand for the integration of the latest
automotive technologies, has led to shortened development cycles in the automotive industry,
which in turn has required additional engineering services capacity (source: A.T. Kearney
Report). Automotive OEMs determine their budgets on the basis of these trends as well as the
long-term market outlook and allocate additional funding for R&D accordingly. As automotive
technology becomes more complex, there is an increased need for specialist engineering services
to conduct these R&D activities.
Over the last 30 years, there has been a structural shift in the automotive industry, with OEMs
focusing increasingly on their core competencies while outsourcing significant parts of the
production cycle to component suppliers (source: berylls/VDA study, March 2015). With the
increasing need for more intensive, complex R&D, this trend has carried over to the outsourcing of
engineering services as well. As it becomes more complex and costly to comply with environmental
and safety regulations and to meet consumer demands for more advanced technologies, OEMs
have become more dependent on outsourcing engineering functions to third-party specialists,
rather than maintaining costly, permanent in-house capacities. The flexible cost structure that
outsourcing offers to OEMs allows them to react quickly to trends without being exposed to
headcount constraints or over-capacity in their own R&D departments.
Germany presents a particularly strong market for outsourced engineering services, given the
presence of leading premium automotive OEMs. Furthermore, we believe that German
automotive OEMs typically spend more on R&D per unit than automotive OEMs in any other
country. Thus, as a result of increased sales volumes in the automotive market, the volume of
engineering services externally awarded by the automotive OEMs has increased at a CAGR of
6.1% between 2010 and 2014 (source: A.T. Kearney Report). These trends have in turn increased
the demand for our services and allowed us to expand in recent years.
The structure of the outsourcing market is also expected to be impacted by regulation relating
to employee leasing arrangements and work contracts. The German government is currently
considering implementing stricter laws relating to employee leasing arrangements, which would
148
favor large-scale work contracts. Such contracts already represent the vast majority of our
outsourcing arrangements, and we expect that these developments will further increase the use
of work contracts by our customers.
Based on these trends, the global automotive ESP market is expected to grow at a CAGR of 6.7%
from 2014 to 2020 to reach a total size of €22.6 billion by 2020 (source: A.T. Kearney Report).
Over the last several years, growing R&D spending and favorable outsourcing trends in the
automotive industry have contributed significantly to our own growth and we expect any
significant change in the R&D budgets of our customers and any related increase or decrease in
their outsourcing of engineering services to continue to affect our sales revenues and costs of
operations going forward.
2.
General economic conditions and developments in the global automotive market
Our customers are large, international OEMs in the automotive industry, in particular major
German OEMs in the passenger car and commercial vehicle industries. However, demand for our
services, and thus our performance, is not directly linked to the sales performance of OEMs, but
rather to automotive OEMs’ R&D spending. In contrast, automotive OEMs’ R&D budgets are
dependent on developments in the global automotive market, such as automotive sales and
production volumes, and thus these trends have an indirect impact on us. Automotive sales and
production volumes depend on customer demand, which in turn is influenced by a confluence of
macroeconomic and individual factors, including the economic environment, employment,
interest rates (and overall monetary and fiscal policy), fuel prices, government initiatives
(especially vehicle purchase incentives), consumer confidence, changing demographics (growing
population, increase of median age and urbanization), levels of disposable income and the
availability of consumer financing.
In 2014, we benefited from overall stable general economic conditions. As in the previous year,
the world economy grew by 3.3% in 2014. In China, GDP increased by 7.4%. While the Japanese
economy stagnated, India and the United States of America recorded particularly strong growth
rates of 5.8% and 2.4%, respectively. The Eurozone’s growth rate in 2014 was 0.8%, following
negative growth of -0.5% in 2013 (source: IMF World Economic Outlook January 2015). The
German economy grew by 1.5% in 2014, significantly more than in 2013, when growth was only
0.2% (source: IMF World Economic Outlook January 2015).
Economic circumstances during the time of the global financial crisis resulted in decreased
consumer demand, which led automotive OEMs to delay the development of certain car models
and reduce their R&D budgets. This in turn resulted in lower outsourcing spending for
engineering services. However, beginning in 2010, the recovery of the automotive sector has
created increased demand for our services and has allowed us to rapidly expand our service
offering and geographical scope.
3.
Employees
Our success and reputation as a leading vehicle engineering service provider in the automotive
sector is dependent on the skills and capabilities of our employees. Because of our extensive
service portfolio, our personnel must fulfill a variety of functions and job profiles. We believe
that hiring, training and retaining skilled and highly-motivated employees is key to our ability
to provide an attractive service offering to our customers, and thus our ability to generate sales
revenue. Furthermore, personnel expenses are our primary cost, amounting to €417.3 million in
the fiscal year ended December 31, 2014. Greater employee numbers cause our personnel costs
to increase, but also provide us with a greater ability to generate revenues. In addition, material
costs increase to the extent that further projects are taken on requiring additional materials,
and certain costs included in other expenses increase as a result of having more employees, such
as rents and leases, travel expenses, general administrative expenses, miscellaneous ancillary
personnel expenses and personnel training and development expenses. A shortage of qualified
personnel could force us to take less orders from our customers, which could expose us to
149
additional costs as we may need to pay higher salaries if we had to hire freelancers or
subcontractors to balance a shortage of personnel, and which might leave us at short notice.
Given the importance of our employees to our business, employee numbers are one of our key
and other performance indicators, which management uses to assess our growth and revenuegenerating capacity.
In order to ensure that our employees are able to provide the high-quality services we offer to
our customers, we also invest significantly in employee training and education. We invest in
staff development measures, including technical training carried out by both internal and
external trainers, as well as communication, leadership and project management training. As in
previous years, EDAG Engineering GmbH was awarded the “Top Automotive Employer 2014”
prize awarded by the Top Employers Institute for its excellence as an employer. The company
took first place in the disciplines of “development opportunities” and “corporate culture”,
which we believe reflects our focus on training and staff development.
Our employee headcount (as measured as of a single date) has been growing steadily in recent
years. As of September 30, 2015, we employed a total of 8,063 employees, as compared to 7,401
as of December 31, 2014, 7,306 as of December 31, 2013 and approximately 6,100 as of
December 31, 2012, including trainees but excluding employees from discontinued operations in
each period. This growth has coincided with a growth in sales revenues, personnel costs, and
other expenses.
As of December 31, 2014, of our 7,401 employees, approximately 500 were trainees and workstudy students, approximately 5,700 were based in Germany and approximately 1,700 were
based outside of Germany.
Personnel expenses include wages and salaries, social security contributions, expenses on
retirement pension plans and support and wage-related and salary-related taxes. Personnel
expenses increased by €18.2 million from €314.1 million in the nine-month period ended
September 30, 2014 to €332.3 million in the nine-month period ended September 30, 2015,
which was mainly attributable to the increase in employees. Personnel expenses increased by
€31.1 million from €386.2 million in the fiscal year ended December 31, 2013 to €417.3 million in
the fiscal year ended December 31, 2014, although this increase in personnel expenses was more
than offset by the higher revenues and changes in inventories that a greater number of
employees permitted us to generate. Personnel expenses increased by €140.6 million, or 57.2%,
from €245.7 million in the fiscal year ended December 31, 2012 to €386.2 million in the fiscal
year ended December 31, 2013, which was mainly attributable to the full inclusion of the Rücker
Group and the BFFT Group in the fiscal year ended December 31, 2013.
Systematic and target-oriented recruiting is aimed at both young and experienced professionals.
To counteract demographic changes, we increased our recruitment activities for lateral hires and
also hired more new employees directly from universities and other institutions of higher
education in 2014. In 2014, we also launched our social media presence with the intent to
further attract potential new employees. We intend to continue recruitment activities, focusing
primarily on markets that are growing more quickly than our home market of Germany.
Other personnel related cost not included in the line item “personnel expenses” include, inter
alia, costs for company entertainment, professional clothing, cafeterias, meal subsidies, medical
care, recruitment, relocation and traineeships, which were included in “other expenses”.
4.
International expansion
In recent years, we have expanded our operations outside of Germany, establishing operations in
numerous new markets in order to serve our automotive OEM customers locally and directly. In
particular, we have strived to establish a presence in proximity to the international development
and production centers of the major German automotive OEMs, who account for the majority of
our business. While more than 60% of our total new personnel were hired in Germany in 2014,
our new personnel hires in Asia, the rest of Europe (excluding Germany) and the Americas
increased more rapidly, which led to a larger rate of growth in those employee bases.
150
The following table shows our average number of employees, broken down by location based
on the unaudited condensed consolidated interim financial information for the nine-month
periods ended September 30, 2015 and September 30, 2014, the audited consolidated financial
information for the fiscal years ended December 31, 2014 and December 31, 2013 and the
audited combined financial information for the fiscal year ended December 31, 2012:
ended September 30,
2015
(average number of
employees over
period)
2014
2014(1)(2)
2013(2)
2012(3)
(audited, combined)
(4)
Breakdown by location
Germany . . . . . . . . . . .
Rest of Europe . . . . . . .
North America . . . . . . .
South America . . . . . . .
Asia . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
5,947
956
74
347
390
—
5,748
938
130
311
323
—
5,782
941
131
301
329
—
5,490
876
96
268
281
—
3,807
322
113
143
172
—
Total . . . . . . . . . . . . . . . .
7,714
7,450
7,484
7,011
4,557
(1) Adjusted for the several divestitures undertaken in the fiscal year 2014, the number of new hires, including trainees, for the
year ended December 31, 2014 would have been approximately 600 employees, which represents an increase of
approximately 8% compared to the fiscal year ended December 31, 2013.
For the nine-month periods ended September 30, 2015 and September 30, 2014, our average
number of employees located outside of Germany comprised approximately 23% of our average
total employees, approximately 23% for the fiscal year ended December 31, 2014,
approximately 22% for the fiscal year ended December 31, 2013 and approximately 17% for the
fiscal year ended December 31, 2012.
We believe our international expansion efforts have yielded important efficiency gains.
Although it is costly to establish testing facilities, such as our testing center in Mexico,
establishing engineering offices does not generally require significant capital expenditures.
Meanwhile, our expansion outside of Germany has helped us to increase our competitiveness by
expanding our skilled employee base across the world while retaining the ability to allocate
work to different offices depending on capacity at any given time. This has also helped us to
reduce our average hourly rates in work contracts by expanding into best-cost countries, where
employing engineering staff is less costly. Our expansion, especially into Eastern Europe and
Asia, has also helped us counteract the decrease in the number of engineers in Germany by
attracting local engineers, which provides us with sales protection and increases in our skilled
employee base and allows us to scale our service offering in a cost-efficient manner.
We expect a growing proportion of our sales revenues going forward to be generated outside
of our main market Germany. Furthermore, our ability to service clients locally at their
production sites and R&D facilities throughout the world is a key component of our service
offering. We believe this will continue to be a key aspect for German and non-German OEMs
with operations around the world and could therefore contribute positively to our revenue
growth.
151
5.
Impact of public holidays
During the first half of the fiscal year, there are numerous public holidays in Germany and the
rest of Europe, and therefore there are fewer working days. In the fiscal year ended
December 31, 2014, approximately 77% of our employees were based in Germany and 78% of
our sales revenues were generated in Germany. As a result of the concentration of our
operations in Germany, the lower number of workdays during the first half of a fiscal year
results in fewer billable days for our employees dispatched to customers on a temporary basis.
Furthermore, because there are fewer workdays in the first half of a fiscal year, projects
generally do not progress during this time at the same rate as in the second half of a fiscal year.
Consequently, project completion is lower and we are not paid as frequently for work done
under contracts for specified projects. As a result of the foregoing, our sales revenues during the
first half of a fiscal year are generally lower than in the second half of a fiscal year, and our sales
revenues from the first half of the fiscal year are generally lower than those in the second half.
6.
Acquisitions and divestments
We have a track record of successfully executing acquisitions in recent years. In the fiscal year
ended December 31, 2014, acquisitions led to a cost synergy build-up of approximately
€5 million. These acquisitions have increased our overall revenue and asset base, while we also
incurred higher costs immediately following the acquisition. As a result of acquiring other
businesses, our income-generating potential is increased, which leads to greater revenues, as
well as greater personnel costs associated with staffing in the acquired businesses. Furthermore,
in order to finance acquisitions, we generally take on additional debt, which increases our
financing expenses, as well as our non-current liabilities on our statement of financial position.
This has corresponding effects on our statement of cash flow, causing a cash outflow for
investing and financing purposes in order to fund the acquisition, and increasing cash inflow
from operating activities as a result of the additional income generation from the acquired
business. The consummation of acquisitions and divestments also affects the comparability of
our results of operations year-on-year, as acquired entities and assets are consolidated in the
consolidated financial statements in a given year, which magnifies the revenues and costs
attributable to the Group as a whole for that year. See also “—III. Comparability of our results
of operations as a result of the complex financial history of the Group”.
a.
Acquisitions
On September 24, 2012, we acquired 58.86% of the shares in Rücker AG, Wiesbaden which
resulted in acquisition costs of €78.9 million. This involved an actual cash outflow of
€66.4 million in the fiscal year ended December 31, 2012. The remaining shares of Rücker AG,
Wiesbaden were acquired in a squeeze-out in 2012 and 2013, pursuant to which the
derecognized minority interest was offset against equity with no effect on profit or loss. As a
result of the consolidation of Rücker AG, Wiesbaden in the consolidated Group financial
statements, our sales revenues increased by €48.3 million in the fiscal year ended December 31,
2012.
On January 18, 2013, the acquisition costs of the merger of BFFT Gesellschaft für
Fahrzeugtechnik mbH amounted to €49.8 million. We also incurred €0.5 million in incidental
acquisition costs in the fiscal year ended December 31, 2013, which were recorded as expenses in
our operating result. This involved an actual cash outflow of €48.5 million in the fiscal year
ended December 31, 2013. As a result of the company merger, our sales revenues increased by
€50.2 million in the fiscal year ended December 31, 2013.
In 2014, EDAG Engineering GmbH was merged with EDAG GmbH & Co. KGaA as part of a mixed
non-cash contribution agreement. This involved an actual cash outflow of €25.9 million in the
fiscal year ended December 31, 2014. Accounting was carried out within the framework of a
common control transaction. The assets, liabilities and provisions were continued at the carrying
152
values from the consolidated financial statement of the ultimate parent company. For ease of
comparison and for reasons of transparency, the results, assets, liabilities and provisions were
shown in the earliest period represented.
In connection with the acquisition of the Rücker Group and the BFFT Group, the most significant
influence of the purchase price allocation on the statement of financial position and
comprehensive statement of income resulted from the fair value adjustment of the intangible
assets. The related intangible assets include, in particular, existing customer relations, software
licences and orders on hand. The deferred tax liabilities reported relate in particular to the reevaluation of intangible assets. The remaining difference between the purchase price and the
proportionate fair values was reported as goodwill. This consists primarily of non-separable
values for the knowledge of the employees and benefits from the expected synergies with other
companies.
The planned period of amortization for the purchase price allocation of the acquisitions of the
Rücker Group and the BFFT Group extends through 2047. The following table shows the book
value of the purchase price remaining to be allocated, as well as the period over which it is
planned to be allocated, as of December 31, 2014.
ACQUISITION OF THE RÜCKER GROUP
Client list . . . . . . . . . . . . . . . . . .
Buildings on own land & rights .
Software . . . . . . . . . . . . . . . . . .
Technical equipment . . . . . . . . .
Amortization for the
fiscal year ended
December 31, 2014(1)
Book value as of
December 31, 2014(1)
(€ thousand)
(€ thousand)
.
.
.
.
ⳮ3,002
ⳮ216
ⳮ1,703
ⳮ397
21,277
2,009
2,815
1,092
ACQUISITION OF THE BFFT GROUP
Other intangible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Client list . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ⳮ32
ⳮ1,616
—
9,698
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(1) In future reporting periods, the respective carrying amount of the purchase price allocation may be subject to impairment
tests according to IAS 36. As a consequence, these figures may be decreased by impairment charges which are to be
expensed when incurred. In addition, these figures do not include any potential foreign exchange effects.
The assets, liabilities and provisions acquired have been recognized at fair value in the purchase
price allocation, in accordance with IFRS 3.
Furthermore, EDAG Production Solutions RU OOO (Obschtschestwo s ogranitschennoi
otwetstwennostju), Russia, was included in the group of consolidated companies for the first
time in the fiscal year ended December 31, 2014. This resulted in a positive difference in the
amount of €30 thousand, which was recognized through profit or loss in the fiscal year ended
December 31, 2014.
With effect from April 30, 2015, the operative business of iSILOG GmbH, an IT company, was
acquired and fully integrated into the Production Solutions segment, i.e., our subsidiary EDAG
Production Solutions GmbH & Co. KG acquired certain individual assets and took over certain
employees necessary and useful for carrying on the business. The acquisition costs amounted to
€1.4 million, while the actual cash outflow was €1.2 million for the nine-month period ended
September 30, 2015.
b.
Disposals
With effect from March 31, 2014, the EDAG Group disposed of shares in the following fully
consolidated companies:
Š
Rücker Aerospace GmbH, Hamburg
Š
Silver Aerospace B.V., Haarlem, Netherlands
153
Š
Rücker France SARL, Blagnac, France
Š
Rücker-Sier GIE, Blagnac, France
In the fiscal year ended December 31, 2013, these four companies were classified as a disposal
group in accordance with IFRS 5, during which time these subsidiaries’ results were included in
our audited consolidated statement of comprehensive income for the fiscal year ended
December 31, 2013 and their assets and liabilities were presented as a single line item in our
audited consolidated statement of financial position as of December 31, 2013. With effect from
March 31, 2014, the Group disposed of shares in these aerospace subsidiaries, after which time
these subsidiaries ceased to be included in the consolidated group of entities for the purposes of
the audited consolidated financial information for the fiscal year ended December 31, 2014. The
resulting deconsolidation profit amounted to €4.6 million in the fiscal year ended December 31,
2014.
On May 31, 2014, the shares in EKS InTec GmbH, Weingarten were sold. The resulting
deconsolidation profit amounted to €8.0 million in the fiscal year ended December 31, 2014.
As a result of a strategic analysis of our various segments, we decided to dispose our ‘Werkzeug
und Karosseriesysteme Eisenach” business division by way of a spin-off for absorption into EDAG
Werkzeug + Karosserie GmbH (in accordance with §123 section 3 No. 1 UmwG) in the fiscal year
ended December 31, 2014. In this context, FFT Produktionssysteme GmbH & Co. KG acquired
51% of the shares in the company in the fiscal year ended December 31, 2014, with the
remaining 49% of the shares are accounted for using the at-equity method as of December 31,
2014. The deconsolidation profit resulting from the transitional consolidation amounted to
€14.4 million in the fiscal year ended December 31, 2014.
In addition, the two US subsidiaries EDAG Productions LLC and Star Design Inc., as well as EDAG
S.A.R.L., France, were deconsolidated on completion of their liquidation in the fiscal year ended
December 31, 2014 and results in a deconsolidation loss amounted to €0.5 million.
On July 31, 2014, all the shares in Wolfgang Rücker Ges.mbH, Vienna were sold. The resulting
deconsolidation loss amounted to €0.2 million in the fiscal year ended December 31, 2014.
On December 1, 2012, Rosata Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt FuldaWest KG was sold to FFT EDAG Produktionssysteme GmbH & Co. KG, Fulda. The deconsolidation
profit amounted to €1.1 million in the fiscal year ended December 31, 2012.
On June 4, 2012, 100% of the shares in WMU GmbH & Co. KG, along with its subsidiary
Namibian Press and Tools International Prop. Ltd., were sold to Sungwoo Hitech Co. Ltd. The
deconsolidation loss amounted to €0.3 million in the fiscal year ended December 31, 2012.
With economic effect as of January 1, 2012, our shareholding of the limited partner’s shares in
ED Work GmbH & Co. KG amounting to 67% was sold to Kempfer & Kolakovic Personal
Management GmbH. The deconsolidation profit amounted to €3.7 million in the fiscal year
On February 29, 2012, 100% of the shares in EDAG Engineering + Design de Mexico SA de CV,
were sold. The deconsolidation loss amounted to €0.5 million in the fiscal year ended
December 31, 2012. In this context and on the same date, the assets, liabilities and provisions of
the independent “Armouring” division of EDAG GmbH & Co. KGaA (now EDAG Engineering
GmbH) were also sold.
The deconsolidation effect resulting from these disposals is reflected in our statements of
comprehensive income under other income (except the deconsolidation effects for WMU
GmbH & Co. KG, along with its subsidiary Namibian Press and Tools International Prop. Ltd., and
EDAG Engineering + Design de Mexico SA de CV, which were reflected under discontinued
operations), which is subtracted as one of the adjustments to derive Adjusted EBIT from EBIT.
We record the sales revenues and costs of subsidiaries until the loss of our control over them is
effected.
154
See “J. Management’s Discussion and Analysis of Financial Condition and Results of
Operations—III. Comparability of our results of operations as a result of the complex financial
history of the Group”.
III.
COMPARABILITY OF OUR RESULTS OF OPERATIONS AS A RESULT OF THE COMPLEX
FINANCIAL HISTORY OF THE GROUP
statements contained in this prospectus.
The Company was incorporated by the Selling Shareholder on November 2, 2015 by way of a
capital contribution in cash in the aggregate amount of CHF 1,000 thousand against issuance of
25,000 thousand bearer shares with a nominal value of CHF 0.04 each. Since its incorporation,
the Company has not conducted any business, acquired any assets or incurred any liabilities
other than as directly related to its incorporation and the Offering. Concurrently with the
determination of the Offer Price, the Selling Shareholder will contribute all of the shares in
EDAG Engineering Schweiz Sub-Holding AG to the Company by way of the Contribution. EDAG
Engineering Schweiz Sub-Holding AG was incorporated on September 14, 2015 which, indirectly
through EDAG Engineering Holding GmbH, a German intermediate holding company, holds all
of the shares in EDAG Engineering GmbH. EDAG Engineering GmbH conducts, directly and
indirectly, through its subsidiaries the operating business described in this prospectus. By means
of the Contribution, the Company will, thus, acquire this business.
As a result, the historical financial information included in this prospectus for the fiscal years
ended December 31, 2012, 2013 and 2014 is that of EDAG Engineering GmbH, which conducts
directly and indirectly through its subsidiaries the operative business of EDAG. As of and for the
nine-month period ended September 30, 2015, we present the financial information based on
the unaudited consolidated interim financial information of EDAG Engineering Schweiz SubHolding AG, which will, upon completion of the Contribution, be the direct subsidiary of the
Company. EDAG Engineering Schweiz Sub-Holding AG indirectly holds all shares in EDAG
Engineering GmbH through EDAG Engineering Holding GmbH. Between September 14, 2015,
the incorporation date of EDAG Engineering Schweiz Sub-Holding AG, and September 30, 2015,
EDAG Engineering GmbH and EDAG Engineering Holding GmbH have entered into certain
transactions (in particular the assumption of a loan liability of EDAG Engineering GmbH in an
amount of €107.3 million by EDAG Engineering Holding GmbH as of September 30, 2015), the
effects of which would adversely affect the comparability between unaudited consolidated
interim financial information for the nine-month period ended September 30, 2015 prepared on
the level of EDAG Engineering GmbH and the audited combined and consolidated interim
financial information included in this prospectus for the fiscal years ended December 31, 2012,
2013 and 2014 prepared on the level of EDAG Engineering GmbH. In order to provide investors
with more comparable financial information for these periods, we present the unaudited
consolidated interim financial information as of and for the nine-month period ended
September 30, 2015 on the level of EDAG Engineering Schweiz Sub-Holding AG with the
corresponding unaudited interim financial information for the nine-month period ended
EDAG Engineering GmbH was established on April 24, 2012 and purchased by the Selling
Shareholder on July 24, 2012 for the acquisition of the Rücker Group. It acquired the Rücker
Group with effect from October 1, 2012. In 2013, Rücker AG was merged into EDAG Engineering
GmbH, and the non-controlling interests in Rücker AG were squeezed out. With effect from
January 1, 2014, Rücker GmbH, a 100% subsidiary of the former Rücker AG, was merged into
EDAG Engineering GmbH. In January 2013, BFFT Holding GmbH, a 100% subsidiary of EDAG
Engineering GmbH, acquired the BFFT Group.
With effect for accounting purposes from October 1, 2012, the Rücker Group was included in
the combined group of entities for the purposes of our audited combined financial information
for the fiscal year ended December 31, 2012. The Rücker Group was fully included in the audited
155
consolidated financial information for the fiscal year ended December 31, 2013 and from there
onward. The BFFT Group was not included in the combined group of entities for the purposes of
our audited combined financial information for the fiscal year ended December 31, 2012, as it
was not acquired until January 2013. With effect for accounting purposes from January 1, 2013,
the BFFT Group was fully included in the audited consolidated financial information for the
fiscal year ended December 31, 2013 and from there onward.
Furthermore, several of the Group’s aerospace subsidiaries, which were acquired as part of the
Rücker Group and had been included in the group of combined entities with effect for
accounting purposes from October 1, 2012 within the Others segment, these subsidiaries were
classified as a disposal group in accordance with IFRS 5 for the fiscal year ended December 31,
2013. As a result, these subsidiaries’ results were included in the same way as other consolidated
entities in our audited consolidated statement of comprehensive income for the fiscal year
ended December 31, 2013 and their assets and liabilities were presented in a condensed form in
a separate line item as “assets held for sale” and “liabilities held for sale” in our audited
consolidated statement of financial position as of December 31, 2013. These subsidiaries’ results
for the three-month period ended March 31, 2014 were included in our audited consolidated
statement of comprehensive income for the fiscal year ended December 31, 2014. With effect
from March 31, 2014, the Group disposed of its shares in these aerospace subsidiaries, after
which time these subsidiaries ceased to be included in the consolidated group of entities for the
purposes of the audited consolidated financial information for the fiscal year ended
December 31, 2014. As a result, these subsidiaries’ assets and liabilities were not included in the
audited consolidated statement of financial position as of December 31, 2014.
In addition, we sold EKS InTec GmbH on May 31, 2014, after which time this subsidiary ceased to
be included in the consolidated group of entities for the purposes of the audited consolidated
financial information for the fiscal year ended December 31, 2014.
As a result of these acquisitions and disposals, the audited combined financial information as of
and for the fiscal year ended December 31, 2012 only contains three months of data for the
Rücker Group (October 1, 2012 to December 31, 2012) and includes no data for the BFFT Group.
In contrast, the audited consolidated financial information as of and for the fiscal year ended
December 31, 2013 includes data for the full year for both the Rücker Group and the BFFT
Group and classifies the aerospace subsidiaries as a disposal group in accordance with IFRS 5.
Furthermore, the audited consolidated financial information as of and for the fiscal year ended
December 31, 2014 includes data for the full year for both the Rücker Group and the BFFT
Group, but only includes three months of data for the aerospace subsidiaries (January 1, 2014 to
March 31, 2014), and does not include them in the audited consolidated statement of financial
position as of December 31, 2014. As a consequence, the comparability of the financial
information for the fiscal years ended December 31, 2012, December 31, 2013 and December 31,
2014 are limited with respect to one another. In order to increase comparability, we have
included additional information with regard to sales revenues and changes in inventories within
the discussion comparing the fiscal year ended December 31, 2012 and the fiscal year ended
December 31, 2013 (see “—VI. Results of Operations—3. Fiscal year ended December 31, 2012
compared to fiscal year ended December 31, 2013—a. Sales revenues and changes in
inventories”) which annualizes the results of the Rücker Group for the fiscal year ended
December 31, 2012 and removes the results of the BFFT Group from the results for the fiscal year
156
IV.
DISCUSSION OF KEY PERFORMANCE INDICATORS
Management uses several key and other performance indicators to assess our performance and
growth and to inform our decisions regarding our strategy going forward. The key and other
performance indicators used by management are as follows:
1.
Revenue growth
Management uses revenue growth to assess the implementation of our growth strategy.
Revenue growth demonstrates the extent to which our expansions and additional hiring has
been converted to increased revenue, and also provides management with a benchmark for
revenue in coming periods.
The following table shows the consolidated or combined sales revenues and changes in
inventories broken down by segment as well as our Core Revenue, derived from the unaudited
condensed consolidated interim statements of comprehensive income of EDAG Engineering
Schweiz Sub-Holding AG for the nine-month periods ended September 30, 2015 and
September 30, 2014 as well as from the audited consolidated statements of comprehensive
income for the fiscal years ended December 31, 2014 and December 31, 2013 and the audited
combined statement of comprehensive income for the fiscal year ended December 31, 2012 of
EDAG Engineering GmbH, and the changes between the periods under review:
ended September 30,
(1)
2015
(in € thousand)
2014
2014(1)(2)
2013(2)
2012(3)
(audited
unless
otherwise
indicated,
combined)
SALES REVENUES AND CHANGES IN
INVENTORIES
Vehicle Engineering . . . . . . . . .
(%)(unaudited) . . . . . . . . . .
Production Solutions . . . . . . . . .
(%)(unaudited) . . . . . . . . . .
Electrics/Electronics . . . . . . . . . .
(%)(unaudited) . . . . . . . . . .
Consolidation for the three core
segments (unaudited)(4) . . . . .
...
337,839
311,078
417,604
391,795
254,104
...
...
8.6%
87,053
—
74,692
6.6%
106,375
54.2%
77,762
—
71,367
...
...
16.5%
117,492
—
85,588
36.8%
123,834
9.0%
98,004
—
37,579
...
37.3%
—
26.4%
160.8%
—
...
-8,484
-5,575
ⳮ13,131
ⳮ6,970
ⳮ6,266
533,900
465,783
634,682
560,591
356,784
14.6%
—
13.2%
57.1%
—
135
40,503
55,066
71,821
58,397
inventories) (unaudited)(5) . . . . . .
(%)(unaudited) . . . . . . . . . . . . .
Others(6) (after consolidation)
(unaudited) . . . . . . . . . . . . . . . . .
(%)(unaudited) . . . . . . . . . . . . .
Total sales revenues and changes
in inventories . . . . . . . . . . . . . . . .
-99.7%
—
ⳮ23.3%
23.0%
—
534,035
506,286
689,748
632,412
415,181
(%)(unaudited) . . . . . . . . . . . . .
5.5%
—
9.1%
52.3%
—
(1) Revenues for the various subsidiaries disposed of during the the nine-month period ended September 30, 2014 or year
ended December 31, 2014, respectively, are included only for the periods prior to their respective disposals.
See “—III. Comparability of our results of operations as a result of the complex financial history of the Group” for a list of
our main acquisitions and disposals.
157
Solutions) and consists of the sum of “sales revenue with other segments” relating to the three core segments, and excludes
represents our sales revenues with third parties and changes in inventories for our three core segments (Vehicle Engineering,
Electrics/Electronics and Production Solutions), and excludes our Others segment, which contains many of our intra-Group
eliminations. Our management uses Core Revenue (including changes in inventories) to assess our operating performance
and as a measure of success of our business.
Our sales revenues and changes in inventories increased by €27.7 million, or 5.5%, from
€506.3 million in the nine-month period ended September 30, 2014 to €534.0 million in the
nine-month period ended September 30, 2015. This increase was primarily due to an increase in
customer demand for engineering services and our success in hiring additional employees to
increase our capacities and meet this demand by servicing a greater number of projects. The
increased customer demand, in turn, was largely due to positive trends in global economic
development and the automotive industry which encouraged OEMs to award larger and more
complex work packages to external engineering service providers. On a segment level, sales
revenues and changes in inventories in our Vehicle Engineering segment increased by
€26.8 million, or 8.6%, from €311.1 million in the nine-month period ended September 30, 2014
to €337.8 million in the nine-month period ended September 30, 2015. Besides the positive
trends described above, this was mainly due to development of new customers for derivative car
models and overall vehicle development and an increased involvement of our facilities in bestcost countries. Sales revenues and changes in inventories in our Production Solutions segment
increased by €12.4 million, or 16.5%, from €74.7 million in the nine-month period ended
September 30, 2014 to €87.1 million in the nine-month period ended September 30, 2015.
Besides the positive trends described above, this was mainly due to hiring of newly qualified
employees, which allowed us to address a higher number of projects. Sales revenues and
changes in inventories in our Electrics/Electronics segment increased by €31.9 million, or 37.3%,
from €85.6 million in the nine-month period ended September 30, 2014 to €117.5 million in the
nine-month period ended September 30, 2015. Besides the positive trends described above, this
was mainly due to a higher amount of workpackages as compared to employee leasing
contracts in this segment.
€632.4 million in the fiscal year ended December 31, 2013 to €689.7 million in the fiscal year
ended December 31, 2014. This increase was primarily due to positive trends in global economic
development and the automotive industry which encouraged OEMs to award larger and more
complex work packages to external engineering service providers, as well as our hiring of
additional engineers, which allowed us to service a greater number of projects. On a segment
level, sales revenues and changes in inventories in our Vehicle Engineering segment increased by
€25.8 million, or 6.6%, from €391.8 million in the fiscal year ended December 31, 2013 to
€417.6 million in the fiscal year ended December 31, 2014. Besides the positive trends described
above, this was mainly due to development of new customers for derivative and overall vehicle
development and an increased involvement of our facilities in best-cost countries. Sales revenues
and changes in inventories in our Production Solutions segment increased by €28.6 million, or
36.8%, from €77.8 million in the fiscal year ended December 31, 2013 to €106.4 million in the
fiscal year ended December 31, 2014. Besides the positive trends described above, this was
mainly due to hiring of newly qualified employees (apprentices/trainees), which allowed us to
address a higher number of projects. Sales revenues and changes in inventories in our Electrics/
158
Electronic segment increased by €25.8 million, or 26.4%, from €98.0 million in the fiscal year
ended December 31, 2013 to €123.8 million in the fiscal year ended December 31, 2014. Besides
the positive trends described above, this was mainly due to an above average growth at
strategic customer locations and knowledge transfer between domestic and foreign offices.
ended December 31, 2013. This increase was primarily due to the full inclusion of the Rücker
Group and BFFT Group in the fiscal year ended December 31, 2013. On a segment level, sales
revenues and changes in inventories in our Vehicle Engineering segment increased by
€391.8 million in the fiscal year ended December 31, 2013. This was mainly due to the full
inclusion of the Rücker Group. Sales revenues and changes in inventories in our Production
Solutions segment increased by €6.4 million, or 9.0%, from €71.4 million in the fiscal year ended
December 31, 2012 to €77.8 million in the fiscal year ended December 31, 2013. Besides the
positive trends described above, this was mainly due to developing our segment production
solutions internationally by following our customers’ delocalization of production. Sales
revenues and changes in inventories in our Electrics/Electronics segment increased by
€98.0 million in the fiscal year ended December 31, 2013. Besides the positive trends described
above, this was mainly due to the full inclusion of the BFFT Group.
2.
EBIT / Adjusted EBIT / Adjusted Core EBIT
Management uses EBIT, Adjusted EBIT and Adjusted Core to assess the economic success of our
business, with Adjusted EBIT being our central control parameter. Management believes that
these metrics provide a view of our income that is more accurately indicative of our actual
performance than other metrics.
The following table shows the consolidated or combined EBIT, Adjusted EBIT and Adjusted EBIT
margin as well as our Adjusted Core EBIT and Adjusted Core EBIT margin derived from the
unaudited condensed consolidated interim statements of comprehensive income of EDAG
Engineering Schweiz Sub-Holding AG for the nine-month periods ended September 30, 2015
and September 30, 2014 as well as from the audited consolidated statements of comprehensive
income for the fiscal years ended December 31, 2014 and December 31, 2013 and the audited
combined statement of comprehensive income for the fiscal year ended December 31, 2012 for
EDAG Engineering GmbH:
ended September 30,
2015
(in € thousand)
2014
EBIT(3) . . . . . . . . . . . . . . . . . . . . . .
(3)
Adjusted EBIT . . . . . . . . . . . . .
(unaudited) . . . . . . . . . . . .
Adjusted Core EBIT(5)
(unaudited) . . . . . . . . . . . . . .
(%)(6) (unaudited) . . . . . .
2014(1)
2013(1)
2012(2)
(audited
unless
otherwise
indicated,
combined)
44,952
46,888
87,643
38,523
35,482
.
54,805
44,891
57,877
49,665
32,043
.
10.3%
8.9%
8.4%
7.9%
7.7%
.
55,076
42,616
53,185
42,984
29,566
.
10.3%
9.1%
8.4%
7.7%
8.3%
159
from our unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
September 30, 2015 and our audited consolidated financial statements as of and for the fiscal year ended December 31,
2014, as applicable, such measures are not financial measures calculated in accordance with IFRS. Accordingly, EBIT and
Adjusted EBIT should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or
prepared in accordance with IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating performance and as
a measure of economic success of our business. In addition, we believe that EBIT and Adjusted EBIT are measures commonly
used by investors. EBIT and Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled
(4) Adjusted EBIT margin is a non-IFRS measure. Adjusted EBIT margin represents the ratio of the Adjusted EBIT over the sales
revenues and changes in inventories. While the amounts included in Adjusted EBIT margin have been derived from our
audited consolidated financial statements as of and for the fiscal year ended December 31, 2014 and our unaudited
condensed consolidated interim financial statements as of and for the nine-month period ended September 30, 2015, as
applicable, this measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted EBIT margin
should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined
accordance with IFRS.
Our earnings before interest and taxes (EBIT) decreased by €1.9 million, or 4.1%, from €46.9
million in the nine-month period ended September 30, 2014 to €45.0 million in the nine-month
period ended September 30, 2015. This decrease was partially due to the absence of income
from deconsolidation for the nine-month period ended September 30, 2015, which had
contributed €11.8 million to EBIT in the nine-month period ended September 30, 2014, as well
as higher expenses for restructuring. Our Adjusted EBIT increased by €9.9 million, or 22.1%,
from €44.9 million in the nine-month period ended September 30, 2014 to €54.8 million in the
nine-month period ended September 30, 2015. Our Adjusted Core EBIT increased by €12.5
million, or 29.2%, from €42.6 million in the nine-month period ended September 30, 2014 to
€55.1 million in the nine-month period ended September 30, 2015. Our Adjusted Core EBIT
margin increased by 1.2 percentage points, from 9.1% in the nine-month period ended
September 30, 2014 to 10.3% in the nine-month period ended September 30, 2015. These
increases were primarily due to a fixed cost degression as a result of an increase in sales
revenues and changes in inventories as well as higher margins in connection with customer
projects and the realization of cost and revenue synergies from the Rücker Group integration.
Our earnings before interest and taxes (EBIT) increased significantly, by €49.1 million, or
fiscal year ended December 31, 2014. Our Adjusted EBIT increased by €8.2 million, or 16.5%,
from €49.7 million in the fiscal year ended December 31, 2013 to €57.9 million in the fiscal year
ended December 31, 2014. Our Adjusted Core EBIT increased by €10.2 million, or 23.7%, from
€43.0 million in the fiscal year ended December 31, 2013 to €53.2 million in the fiscal year ended
December 31, 2014. Our Adjusted Core EBIT margin increased by 0.7 percentage points, from
7.7% in the fiscal year ended December 31, 2013 to 8.4% in the fiscal year ended December 31,
2014. This development was primarily driven by an increase in sales revenues and changes in
160
inventories of €57.3 million and the impact of the synergy effects of the integration of the
Rücker Group and the BFFT Group, including administrative cost savings, greater market share
and an increase in customer base.
Our earnings before interest and taxes (EBIT) increased by €3.0 million, or 8.6%, from
December 31, 2013. Our Adjusted EBIT increased by €17.6 million, or 55.0%, from €32.0 million
in the fiscal year ended December 31, 2012 to €49.7 million in the fiscal year ended
December 31, 2013. Our Adjusted Core EBIT increased by €13.4 million, or 45.4%, from
December 31, 2013. This development was primarily due to an increase in sales revenues and
changes in inventories of €217.2 million and the full inclusion of the Rücker Group and the BFFT
Group in the fiscal year ended December 31, 2013. Our Adjusted Core EBIT margin decreased by
0.6 percentage points, from 8.3% in the fiscal year ended December 31, 2012 to 7.7% in the
3.
Investments
One of our performance indicators is investments, which consists of the capital expenditures
deployed by the Group in a given period. The total capital expenditures are broken down by the
type of expenditure. We believe that our capital expenditures are indicative of our growth in
various segments and reflect the success of our implementation of our growth strategy.
The following table sets forth a summary of our capital expenditures broken down by type of
expenditure derived from the unaudited condensed consolidated interim financial information
of EDAG Engineering Schweiz Sub-Holding AG for the nine-month periods ended September 30,
2015 and September 30, 2014 as well as from the audited consolidated financial information for
the fiscal years ended December 31, 2014 and December 31, 2013 and the audited combined
financial information for the fiscal year ended December 31, 2012 of EDAG Engineering GmbH:
ended September 30,
2015
(in € thousand)
Software and other intangible
assets . . . . . . . . . . . . . . . . . . . .
Land and buildings . . . . . . . . . . .
Technical equipment and
machinery . . . . . . . . . . . . . . . .
Other equipment, operating and
office equipment . . . . . . . . . . .
Advance payments and
construction in progress . . . . .
2014
2014(1)
2013(1)
2012(2)
(audited unless indicated
otherwise, consolidated)
(audited
unless
indicated
otherwise,
combined)
.
.
4,228
2,366
5,785
1,150
7,728
1,663
6,401
1,453
2,884
1,383
.
3,745
3,011
5,767
4,956
3,473
.
7,734
6,192
9,353
9,083
7,411
.
2,702
1,120
757
359
1,098
Total capital expenditures
(unaudited) . . . . . . . . . . . . . . . .
20,775
17,258
25,268
22,252
16,249
Capital expenditures as
percentage of sales revenues
and changes in inventories
(unaudited) (%)(3) . . . . . . . . . . .
3.9%
3.4%
3.7%
3.5%
3.9%
161
(3) Capital expenditures as percentage of sales revenues and changes in inventories is a non-IFRS measure. Capital expenditures
as percentage of sales revenues and changes in inventories represents the ratio of our capital expenditures over sales
revenues and changes in inventories. While the amounts included in capital expenditures as percentage of sales revenues
and changes in inventories have been derived from our audited consolidated financial statements as of and for the fiscal
year ended December 31, 2014 and our unaudited condensed consolidated interim financial statements as of and for the
accordance with IFRS. Accordingly, capital expenditures as percentage of sales revenues and changes in inventories should
be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined statements
of comprehensive income or our consolidated or combined statements of cash flow, which are prepared in accordance with
IFRS.
Our total capital expenditures increased by €3.5 million, or 20.4%, from €17.3 million in the
nine-month period ended September 30, 2014 to €20.8 million in the nine-month period ended
September 30, 2015. This increase was primarily driven by an increase in the number of
employees which required investments in hardware, office equipment and buildings.
fiscal year ended December 31, 2013 to €25.3 million in the fiscal year ended December 31,
2014. This increase was primarily driven by an increase in the number of our employees, which
required investments in software, hardware, office equipment and buildings.
2013. This increase was primarily driven by the integration of the Rücker Group and the BFFT
Group. As a consequence of having more employees as a result of these integrations,
investments in in software, hardware, office equipment and buildings were required.
Our capital expenditures amounted to 3.7% of sales revenues and changes in inventories as of
December 31, 2014, 3.5% of sales revenues and changes in inventories as of December 31, 2013
and 3.9% of sales revenues and changes in inventories as of December 31, 2012. Our ongoing
investments in an amount of €1.8 million relate predominantly to software, hardware, office
equipment and fixtures in third party buildings, with a geographic focus on Germany. As of the
date of this prospectus, an amount of €7.4 million has been approved to make firm
commitments for future investments that relate to software, hardware, office equipment and
fixtures in third party buildings, with a geographic focus on Germany. We plan to finance our
ongoing investments with cash generated from our operations. We aim to increase our overall
capital expenditures for the fiscal year 2015 to an amount of approximately €30.0 million.
4.
Number of employees
One of our performance indicators is the average number of employees we have in our various
segments for a given time. We define this metric as the average number of employees we
employ over a given period. These figures are then broken down by type of contractual
relationship and segment. We believe that these figures reflect the growth of the Group and its
capacity to service various customer needs, and serve as a benchmark for our growth targets. As
the provision of specialist services is our primary source of income, our average number of
employees determines our ability to generate revenue. These figures also reflect the success of
our recruitment efforts.
162
The following table shows our average number of employees over a given period, broken down
by contractual relationship and segment derived from the unaudited condensed consolidated
interim financial information for the nine-month periods ended September 30, 2015 and
September 30, 2014, the audited consolidated financial information for the fiscal years ended
December 31, 2014 and December 31, 2013 and the audited combined financial information for
the fiscal year ended December 31, 2012:
ended September 30,
2015
(average number of employees over period)
2014
2014(1)(2)
2013(2)
2012(3)
(audited,
unless
otherwise
(audited, unless otherwise indicated,
(unaudited, consolidated) indicated, consolidated) combined)
Breakdown according to contractual
relationship(4)
Salaried employees . . . . . . . . . . . . . . . . .
Apprentices . . . . . . . . . . . . . . . . . . . . . .
7,216
498
6,956
494
6,978
506
6,569
442
4,259
298
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
7,450
7,484
7,011
4,557
Breakdown into segments(4)
Vehicle Engineering . . . . . . . . . . . . . . . .
Production Solutions . . . . . . . . . . . . . . .
Electrics/Electronics . . . . . . . . . . . . . . . . .
4,764
1,291
1,659
4,854
1,082
1,224
4,806
1,120
1,292
4,645
873
1,043
2,644
732
354
Core Employees(5) (unaudited) . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
—
7,160
290
7,218
266
6,561
450
3,730
827
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,714
7,450
7,484
7,011
4,557
(1) Adjusted for the several divestitures undertaken in the fiscal year 2014, the number of new hires, including trainees, for the
year ended December 31, 2014 would have been approximately 600 employees, which represents an increase of
approximately 8% compared to the fiscal year ended December 31, 2013.
(5) Core Employees represents our employees in our three core segments (Vehicle Engineering, Electrics/Electronics and
Production Solutions), and excludes our employees in the Others segment.
(6) Represents our employees in the Others segment. The Others segment includes Haus Kurfürst GmbH, which provides hotel
and restaurant services for EDAG customers and employees, as well as a small batch production of chassis modules at our
location in Eisenach, which we deconsolidated as of December 31, 2014, EKS InTech GmbH, which was sold on May 31, 2014,
and our aerospace subsidiaries, which were sold on March 31, 2014. The Others segment also included the personnel service
provider ED Work GmbH & Co. KG until its deconsolidation on May 31, 2012.
Our average number of employees increased by approximately 264, or approximately 3.5%,
from 7,450 in the nine-month period ended September 30, 2014 to 7,714 in the nine-month
period ended September 30, 2015. This increase, which affected both, salaried employees and
apprentices, was primarily driven by an increase in sales volume.
Our average number of employees increased by approximately 473, or approximately 6.7%,
from 7,011 in the fiscal year ended December 31, 2013 to 7,484 in the fiscal year ended
December 31, 2014. This increase was also primarily driven by an increase in sales volume.
Our average number of employees increased by approximately 2,454, or approximately 53.9%,
from 4,557 in the fiscal year ended December 31, 2012 to 7,011 in the fiscal year ended
December 31, 2013. This increase, which affected both, salaried employees and apprentices, was
primarily driven by the integration of the Rücker Group and the BFFT Group.
163
V.
1.
DESCRIPTION OF KEY LINE ITEMS FROM THE CONSOLIDATED/COMBINED STATEMENT OF
COMPREHENSIVE INCOME
Sales revenues and changes in inventories
Sales revenues and changes in inventories are divided between sales revenues and changes in
inventories.
Sales revenues consist of revenue from the sale of goods or the provision of services, realized
upon the provision of the service and/or the transfer of the risk to the customer. This occurs net
of sales tax and all discounts and bonuses. Sales revenues also include income from the provision
of services assessed according to the percentage of completion method.
Changes in inventories consist of the increase or decrease in inventory of unfinished and
finished goods and services, determined on the basis of the acquisition cost method.
Sales revenues are measured at the attributable fair value for the consideration received or to
be received for the sale of goods and services within the context of the ordinary business
activity, less the price reductions and volume discounts granted by the Company. VAT and other
duties are not taken into account. Income is reported if the economic benefit is likely to accrue
to the Group, and the amount of the income can be reliably ascertained. See “—XI. Critical
Accounting Policies—1. Realization of income and expenses” for a description of our revenue
recognition policies, as well as possible changes to the standards for revenue recognition from
2018 under IFRS 15.
2.
Other income
Other income consists of non-cash benefit from car leasing, land and rental income, cost transfer
income, income from currency gains, catering and cafeteria income, income from investment
properties, income from recycling and scrap, income from compensation payments, income from
insurance reimbursements, income from currency hedging and hedging transactions,
miscellaneous operating income, deconsolidation income from the disposal of our aerospace,
tool and body works and various other businesses, income from the disposal and subsequent
capitalization of fixed assets, public sector benefits, consisting of subsidies for training and R&D,
income from the reversal of personnel and miscellaneous provisions, income from the reversal of
provisions for pensions and onerous contracts, income from impaired receivables and
miscellaneous non-operating income.
3.
Material expenses
Material expenses consist of expenses for materials and supplies and for purchased goods, which
primarily consist of expenses for models and small parts which have been purchased, and
expenses for purchased services, which primarily consist of costs for subcontractors and
miscellaneous services received.
4.
Gross profit
Gross profit is equal to the sum of sales revenues and changes in inventories and other income,
less material expenses.
5.
Personnel expenses
Personnel expenses consist of wages and salaries including expenses in connection with the
termination of employment contracts, social security contributions, expenses on retirement
pension plans and support and wage- and salary-related taxes. Expenses for retirement pension
plans and support include, among other things, expenses for defined benefit commitments.
6.
Depreciation, amortization and impairment
Depreciation, amortization and impairment includes the scheduled depreciation and
amortization of fixed assets, including both the amortization of intangible assets and the
164
depreciation of property, plant and equipment, as well as impairment losses and the
amortization and depreciation from purchase price allocation.
7.
Other expenses
Other expenses consist of rents and leases, maintenance, travel expenses, general administrative
expenses, miscellaneous ancillary personnel expenses, consulting contributions and fees, sales
and marketing expenses, personnel training and development expenses, insurance costs, vehicle
fuel and miscellaneous vehicle expenses, miscellaneous taxes and duties, surveillance and
security expenses, expenses from currency losses, expenses for guarantees, expenses from
currency hedging transactions, expenses from investment properties, miscellaneous operating
expenses, deconsolidation expenses, expenses from bad debt and loss, expenses from the
disposal of assets, expenses from impaired receivables, restructuring expenses and miscellaneous
non-operating expenses including consulting and reengineering costs and expenses in
connection with the termination of employment contracts.
8.
Earnings before interest and taxes (EBIT)
Earnings before interest and taxes (EBIT) is equal to gross profit less personnel expenses,
depreciation, amortization and impairment and other expenses.
9.
Financial result
Financial result is equal to the sum of results from investments accounted for using the equity
method and financial income, less financing expenses.
Financial income consists of income from other securities and loans from financial assets,
interest income earned from discounting, interest and similar income and miscellaneous
financial income.
Financing expenses consist of interest and similar expenses including interest related to pension
provisions, losses from valuation at fair value and miscellaneous financial expenses.
10.
Profit or loss
Profit or loss is equal to the sum of earnings after taxes from continuing operations and
earnings after taxes from discontinued operations.
VI.
RESULTS OF OPERATIONS
consolidated interim statements of comprehensive income of EDAG Engineering Schweiz
Sub-Holding AG for the nine-month periods ended September 30, 2015 and September 30, 2014
as well as from the audited consolidated statements of comprehensive income for the fiscal
years ended December 31, 2014 and December 31, 2013 and the audited combined statement of
comprehensive income for the fiscal year ended December 31, 2012 of EDAG Engineering
GmbH:
For the nine-month
period
ended September 30,
2015
(in € thousand)
PROFIT OR LOSS
Sales revenues and changes in
inventories . . . . . . . . . . . . . . . . . . . . . . . .
Sales revenues . . . . . . . . . . . . . . . . . . . . .
Changes in inventories . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . .
Material expenses . . . . . . . . . . . . . . . . . . . .
2014
(1)
534,035
534,375
ⳮ340
15,324
ⳮ72,877
165
506,286
513,954
ⳮ7,668
22,187
ⳮ78,719
2014(1)(2)
2013(2)
689,748
697,458
ⳮ7,710
58,868
ⳮ115,823
2012(3)
(audited,
combined)
632,412 415,181
620,127 415,836
12,285
ⳮ655
16,326
20,267
ⳮ104,943 ⳮ79,514
For the nine-month
period
ended September 30,
2015
2014(1)
2014(1)(2)
2013(2)
2012(3)
(audited,
combined)
(in € thousand)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . .
Personnel expenses . . . . . . . . . . . . . . . . . . .
Depreciation, amortization and
impairment . . . . . . . . . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . . . . . . . . . . .
(EBIT)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Result from investments accounted for
using the equity method . . . . . . . . . . . . .
Financial income . . . . . . . . . . . . . . . . . . . . .
Financing expenses . . . . . . . . . . . . . . . . . . .
476,482
ⳮ332,311
449,754
ⳮ314,147
632,793
ⳮ417,308
543,795 355,934
ⳮ386,226 ⳮ245,664
ⳮ18,087
ⳮ81,132
ⳮ18,202
ⳮ70,517
ⳮ25,613
ⳮ102,229
ⳮ24,984 ⳮ12,475
ⳮ94,062 ⳮ62,313
44,952
46,888
87,643
38,523
35,482
1,052
1,841
ⳮ8,050
—
518
ⳮ9,142
—
1,035
ⳮ11,752
—
1,487
ⳮ8,301
50
2,997
ⳮ5,938
Financial result . . . . . . . . . . . . . . . . . . . . . .
ⳮ5,157
ⳮ8,624
ⳮ10,717
ⳮ6,814
ⳮ2,891
Earnings before taxes from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . .
39,795
ⳮ12,337
38,264
ⳮ9,295
76,926
ⳮ18,688
31,709
ⳮ9,982
32,591
ⳮ7,672
operations . . . . . . . . . . . . . . . . . . . . . . . .
27,458
28,969
58,238
21,727
24,919
Discontinued operations(5)
Earnings after taxes from discontinued
operations . . . . . . . . . . . . . . . . . . . . . . . .
—
1,550
1,586
ⳮ1,905
ⳮ767
Profit or loss . . . . . . . . . . . . . . . . . . . . . . . .
27,458
30,519
59,824
19,822
24,152
“—III. Comparability of our results of operations as a result of the complex financial history of the Group” for a list of our
main acquisitions and disposals.
(4) EBIT is a non-IFRS measure. EBIT represents earnings before interest and taxes. While the amounts included in EBIT have
EBIT should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or combined
accordance with IFRS. Our management uses EBIT to assess our operating performance and as a measure of economic success
of our business. In addition, we believe that EBIT is a measure commonly used by investors. EBIT, as presented in this
prospectus, may not be comparable to similarly titled measures reported by other companies due to differences in the way
these measures are calculated.
(5) Discontinued operations represents expenses in connection with an indemnity payment for the nine-month period ended
September 30, 2014 and in the fiscal year ended December 31, 2014, provisions in connection with the sale of the
“Production” business division in the fiscal year ended December 31, 2013 and assets, liabilities and provisions of the
“Production Systems” and “Production” business divisions in the fiscal year ended December 31, 2012, which were classified
166
1.
Nine-month period ended September 30, 2014 compared to nine-month period ended
September 30, 2015
a.
nine-month period ended September 30, 2015.
Sales revenues with third parties
The following table shows our sales revenues with third parties broken down by segment for
the nine-month periods ended September 30, 2015 and September 30, 2014:
For the nine-month period ended
September 30,
2015
(in € thousand)
Vehicle Engineering . . . . . . . . . . . . . . .
Production Solutions . . . . . . . . . . . . . .
Electrics/Electronics . . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . .
Total sales revenues with third parties
2014(1)
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334,321
82,551
117,368
135
534,375
307,171
72,364
85,567
48,852
513,954
(1) Sales revenues for the subsidiaries disposed of during the nine-month period ended September 30, 2014 included only for
the periods prior to their respective disposals. See “—III. Comparability of our results of operations as a result of the complex
financial history of the Group” for a list of our main acquisitions and disposals.
(2) The Others segment represents revenues with third parties and includes the small batch production of chassis modules at our
location in Eisenach, as well as EKS InTec GmbH, which was sold on May 31, 2014, and our aerospace subsidiaries, which were
sold on March 31, 2014. In addition, all of our essential non-operating expenses and income are also reported here.
Our sales revenues increased by €20.4 million, or 4.0%, from €514.0 million in the nine-month
period ended September 30, 2014 to €534.4 million in the nine-month period ended September
30, 2015. This increase was primarily due to an increase in customer demand for engineering
services and our success in hiring additional employees to increase our capacities and meet this
demand by servicing a greater number of projects. The increased customer demand, in turn, was
largely due to positive trends in global economic development and the automotive industry
which encouraged OEMs to award larger and more complex work packages to external
engineering service providers.
On a segment level, sales revenues with third parties in our Vehicle Engineering segment
increased by €27.2 million, or 8.8%, from €307.2 million in the nine-month period ended
September 30, 2014 to €334.3 million in the nine-month period ended September 30, 2015.
Besides the positive trends described above, this was mainly due to development of new
customers for derivative car models and overall vehicle development and an increased
involvement of our facilities in best cost countries. Sales revenues with third parties in our
Production Solutions segment increased by €10.2 million, or 14.1%, from €72.4 million in the
September 30, 2015. Besides the positive trends described above, this was mainly due to hiring
of newly qualified employees, which allowed us to address a higher number of projects. Sales
revenues with third parties in our Electrics/Electronics segment increased by €31.8 million, or
37.2%, from €85.6 million in the nine-month period ended September 30, 2014 to €117.4 million
in the nine-month period ended September 30, 2015. Besides the positive trends described
above, this was mainly due to a higher amount of workpackages as compared to employee
leasing contracts in this segment.
167
Changes in inventories
Our changes in inventories changed by €7.3 million from a decrease of €7.7 million in the ninemonth period ended September 30, 2014 to a decrease of €0.3 million in the nine-month period
ended September 30, 2015. This difference resulted from the deconsolidation of our former tool
and body system division “Werkzeug und Karosseriesysteme Eisenach” as of December 31, 2014.
b.
Material expenses
Our material expenses decreased by €5.8 million, or 7.4%, from €78.7 million in the nine-month
period ended September 30, 2014 to €72.9 million in the nine-month period ended
September 30, 2015. The following table shows our material expenses broken down by type of
expense for the nine-month periods ended September 30, 2015 and September 30, 2014:
September 30,
2015
(in € thousand)
2014(1)
Expenses for materials and supplies and for purchased goods . . . .
Expenses for purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,065
53,813
24,519
54,199
Total material expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
72,877
78,719
(1) Results of operations for the subsidiaries disposed of during the nine-month period ended September 30, 2014 included only
for the periods prior to their respective disposals. See “—III. Comparability of our results of operations as a result of the
complex financial history of the Group” for a list of our main acquisitions and disposals.
Our expenses for materials and supplies and for purchased goods decreased by €5.5 million, or
22.3%, from €24.5 million in the nine-month period ended September 30, 2014 to €19.1 million
in the nine-month period ended September 30, 2015. This decrease was primarily due to the
deconsolidation of our former tool and body system division “Werkzeug und Karosseriesysteme
Eisenach” as of December 31, 2014.
Our expenses for purchased services decreased by €0.4 million, or 0.7%, from €54.2 million in
the nine-month period ended September 30, 2014 to €53.8 million in the nine-month period
ended September 30, 2015. This small decrease was due to executing more work in-house
instead of assigning work to third parties.
As a percentage of our sales revenues and changes in inventories, our material expenses
decreased from 15.5% in the in the nine-month period ended September 30, 2014 to 13.6% in
the in the nine-month period ended September 30, 2015.
c.
Gross profit
Our gross profit increased by €26.7 million, or 5.9%, from €449.8 million in the nine-month
30, 2015. This was partially due to an increase in our sales revenues and changes in inventories.
As a percentage of our sales revenues and changes in inventories, our gross profit increased
from 88.8% in the nine-month period ended September 30, 2014 to 89.2% in the nine-month
period ended September 30, 2015. This increase was primarily due to a fixed cost degression as a
result of an increase in sales revenues and changes in inventories as well as higher margins in
connection with customer projects.
d.
Personnel expenses
Our personnel expenses increased by €18.2 million, or 5.8%, from €314.1 million in the
September 30, 2015, which was mainly attributable to the growth in our workforce as a result of
additional hiring, which led to an increase in wages and salaries and social security contributions
168
as well as wage-related and salary-related taxes. The increase in expenses on retirement pension
plans and support also reflected the growth in our workforce. The following table shows our
personnel expenses broken down by type for the nine-month periods ended September 30, 2015
and September 30, 2014:
September 30,
2015
(in € thousand)
2014(1)
Wages and salaries . . . . . . . . . . . . . . . . . . . . . . . . .
Social security contributions . . . . . . . . . . . . . . . . . .
Expenses on retirement pension plans and support
Wage-related and salary-related taxes . . . . . . . . . .
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277,150
51,529
3,352
280
263,236
48,261
2,577
73
Total personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
332,311
314,147
(1) Results of operations for the subsidiaries disposed of during the nine-month period ended September 30, 2014 included only
for the periods prior to their respective disposals. See “—III. Comparability of our results of operations as a result of the
As of September 30, 2015 we employed 8,063 employees (7,551 employees at September 30,
2014), including trainees but excluding employees from discontinued operations in each period.
e.
Other expenses
Our other expenses increased by €10.6 million, or 15.1%, from €70.5 million in the nine-month
period ended September 30, 2014 to €81.1 million in the nine-month period ended
September 30, 2015. This increase was primarily due to higher rental and leasing expenses.
f.
Our earnings before interest and taxes (EBIT) decreased by €1.9 million, or 4.1%, from
nine-month period ended September 30, 2015. This decrease was partly due to the absence of
income from deconsolidation for the nine-month period ended September 30, 2015, which had
contributed €11.8 million to EBIT in the nine-month period ended September 30, 2014, as well
as higher expenses for restructuring. These developments were offset in part by a fixed cost
degression as a result of an increase in sales revenues and changes in inventories as well as
higher margins in connection with customer projects.
The following table shows EBIT, Adjusted EBIT, Adjusted EBIT margin as well as Adjusted Core
EBIT and Adjusted Core EBIT margin, derived from the unaudited condensed consolidated
interim statements of comprehensive income for the nine-month periods ended
September 30, 2015 and September 30, 2014 for EDAG Engineering Schweiz Sub-Holding AG:
September 30,
2015
(in € thousand)
EBIT(2) . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBIT(2) . . . . . . . . . . . . . . . .
Adjusted EBIT margin (%)(3) . . . . .
Adjusted Core EBIT(4) . . . . . . . . . . . .
Adjusted Core EBIT margin (%)(5)
2014(1)
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44,952
54,805
10.3%
55,076
10.3%
46,888
44,891
8.9%
42,616
9.1%
(1) Operating results for the subsidiaries disposed of during the the nine-month period ended September 30, 2014 are included
only for the periods prior to their respective disposals. See “—III. Comparability of our results of operations as a result of the
169
from our unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
EBIT and Adjusted EBIT should be viewed as supplemental to, but not as a substitute for, measures presented in our
which are prepared in accordance with IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating
performance and as a measure of economic success of our business. In addition, we believe that EBIT and Adjusted EBIT are
measures commonly used by investors. EBIT and Adjusted EBIT, as presented in this prospectus, may not be comparable to
similarly titled measures reported by other companies due to differences in the way these measures are calculated.
(3) Adjusted EBIT margin is a non-IFRS measure. Adjusted EBIT margin represents the ratio of the Adjusted EBIT over sales
unaudited condensed consolidated interim financial statements as of and for the nine-month period ended
September 30, 2015, this measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted EBIT
margin should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated or
prepared in accordance with IFRS.
While the amounts included in Adjusted Core EBIT have been derived from our unaudited condensed consolidated interim
financial statements as of and for the nine-month period ended September 30, 2015, this measure is not a financial measure
been derived from our unaudited condensed consolidated interim financial statements as of and for the nine-month period
ended September 30, 2015, this measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted
Core EBIT margin should be viewed as supplemental to, but not as a substitute for, measures presented in our consolidated
or combined statements of comprehensive income or our consolidated or combined statements of cash flow, which are
prepared in accordance with IFRS.
Our Adjusted EBIT increased by €9.9 million, or 22.1%, from €44.9 million in the nine-month
30, 2015 and our Adjusted EBIT margin increased by 1.4 percentage points from 8.9% in the
nine-month period ended September 30, 2014 to 10.3% in the nine-month period ended
September 30, 2015. This was primarily due to a fixed cost degression as a result of an increase
in sales revenues and changes in inventories as well as higher margins in connection with
customer projects.
Our Adjusted Core EBIT increased by €12.5 million, or 29.2%, from €42.6 million in the ninemonth period ended September 30, 2014 to €55.1 million in the nine-month period ended
September 30, 2015. Our Adjusted Core EBIT margin increased by 1.2 percentage points, from
9.1% in the nine-month period ended September 30, 2014 to 10.3% in the nine-month period
ended September 30, 2015, primarily due to the realization of cost and revenue synergies from
the Rücker Group integration.
g.
Financial result
Our financial result increased by €3.5 million, or 40.2%, from a loss of €8.6 million in the
nine-month period ended September 30, 2014 to a loss of €5.2 million in the nine-month period
ended September 30, 2015. This increase was, inter alia, due to lower interest charges as a result
of a partial repayment of the loan from ATON Group Finance GmbH towards the end of the
financial year ended December 31, 2014 and a higher interest income from related parties
transactions in connection with a sale-and-lease-back transaction (see “L. Business—XII. Material
Contracts—3. Agreements relating to Real Estate—b.Sale-and-lease-back of five properties in
Fulda, Cologne, Ingolstadt and Recklinghausen”) as well as income from investments accounted
for using the equity method (EDAG Werkzeug + Karosserie GmbH).
170
h.
Profit or loss
Our profit or loss decreased by €3.1 million, or 10.0%, from a profit of €30.5 million in the
nine-month period ended September 30, 2014 to a profit of €27.5 million in the nine-month
period ended September 30, 2015. This decrease was due to a decrease in EBIT as described
above, lower income from earnings after tax from discontinued operations as well as an increase
in the tax rate. These developments were offset in part by a fixed cost degression as a result of
an increase in sales revenues and changes in inventories as well as higher margins in connection
with customer projects.
2.
Fiscal year ended December 31, 2013 compared to fiscal year ended December 31, 2014
a.
the fiscal years ended December 31, 2014 and December 31, 2013:
For the fiscal year ended
December 31,
2014(1)(2)
(in € thousand)
Vehicle Engineering
Electrics/Electronics .
Others(3) . . . . . . . . . .
2013(2)
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409,992
100,768
123,696
63,002
387,443
75,427
97,836
59,421
Total sales revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
697,458
620,127
(1) Sales revenues for the various subsidiaries disposed of during the year ended December 31, 2014 included only for the
periods prior to their respective disposals. See “—III. Comparability of our results of operations as a result of the complex
aerospace subsidiaries, which were sold on March 31, 2014. In addition, all of our essential non-operating expenses and
income are also reported here.
Our sales revenues increased by €77.3 million, or 12.5%, from €620.1 million in the fiscal year
ended December 31, 2013 to €697.5 million in the fiscal year ended December 31, 2014. This
increase was primarily due to positive trends in global economic development and the
automotive industry which encouraged OEMs to award larger and more complex work packages
to external engineering service providers, as well as our hiring of additional engineers, which
allowed us to service a greater number of projects.
increased by €22.5 million, or 5.8%, from €387.4 million in the fiscal year ended December 31,
2013 to €410.0 million in the fiscal year ended December 31, 2014. Besides the positive trends
described above, this was mainly due to development of new customers for derivative and
overall vehicle development and an increased involvement of our facilities in best-cost countries.
Sales revenues with third parties in our Production Solutions segment increased by €25.3 million,
or 33.6%, from €75.4 million in the fiscal year ended December 31, 2013 to €100.8 million in the
fiscal year ended December 31, 2014. Besides the positive trends described above, this was
mainly due to hiring of newly qualified employees (apprentices/trainees), which allowed us to
171
address a higher number of projects. Sales revenues with third parties in our Electrics/Electronic
segment increased by €25.9 million, or 26.4%, from €97.8 million in the fiscal year ended
positive trends described above, this was mainly due to an above average growth at strategic
customer locations and knowledge transfer between domestic and foreign offices.
Our changes in inventories changed from an increase of €12.3 million in the fiscal year ended
December 31, 2013 to a decrease of €7.7 million in the fiscal year ended December 31, 2014. The
stock in our former tool and body system division increased significantly in the fiscal year ended
December 31, 2013. This stock was then reduced in the fiscal year ended December 31, 2014 as
we were able to invoice the stock to customers in that year.
b.
Material expenses
Our material expenses increased by €10.9 million, or 10.4%, from €104.9 million in the fiscal
year ended December 31, 2013 to €115.8 million in the fiscal year ended December 31, 2014. The
following table shows our material expenses broken down by type for the fiscal years ended
December 31, 2014 and December 31, 2013:
December 31,
2014(1)(2)
(in € thousand)
2013(2)
Expenses for materials and supplies and for purchased goods . . . . . . . . . .
Expenses for purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,231
80,592
32,305
72,638
Total material expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,823
104,943
(1) Results of operations for the various subsidiaries disposed of during the year ended December 31, 2014 included only for the
Our expenses for materials and supplies and for purchased goods increased by €2.9 million, or
9.1%, from €32.3 million in the fiscal year ended December 31, 2013 to €35.2 million in the fiscal
year ended December 31, 2014. This increase was primarily due to a higher sales volume of small
serial production in our former tool and body system division.
Our expenses for purchased services increased by €8.0 million, or 11.0%, from €72.6 million in
the fiscal year ended December 31, 2013 to €80.6 million in the fiscal year ended December 31,
2014. This increase was primarily due to an increase in sales volume.
increased from 16.6% in the fiscal year ended December 31, 2013 to 16.8% in the fiscal year
c.
Gross profit
Our gross profit increased by €89.0 million, or 16.4%, from €543.8 million in the fiscal year
ended December 31, 2013 to €632.8 million in the fiscal year ended December 31, 2014. Besides
the significant increase in sales revenues and changes in inventories, which was only partly
offset by a corresponding increase in material expenses, both as set out above, the increase in
our gross profit was primarily due to an increase in our other income by €42.5 million from
December 31, 2014. This increase in our other income mainly resulted from the effects of
deconsolidation of EKS Intec GmbH and our “Werkzeug und Karosseriesysteme Eisenach”
172
business division as well as our former aerospace business amounting to €27.0 million, and the
disposal of fixed assets, in particular land and buildings amounting to €18.4 million, mostly
pursuant to a sale-and-lease-back arrangement. This increase in other income was partially
offset by a lower reversal of provisions in the fiscal year ended December 31, 2014 (€0.9 million)
as compared to the fiscal year ended December 31, 2013 (€1.7 million), which comprise the
unwinding of provisions made for personnel, pensions and other purposes.
from 86.0% in the fiscal year ended December 31, 2013 to 91.7% in the fiscal year ended
December 31, 2014.
d.
Personnel expenses
Our personnel expenses increased by €31.1 million, or 8.0%, from €386.2 million in the fiscal
year ended December 31, 2013 to €417.3 million in the fiscal year ended December 31, 2014,
which was mainly attributable to the growth in our workforce as a result of additional hiring,
which led to higher wages and salaries and social security contributions as well as wage-related
and salary-related taxes. The increase in expenses on retirement pension plans and support also
reflected the growth in our workforce. In addition, higher expenses in conjunction with the
termination of employment contracts, which increased from €0.7 million in the fiscal year ended
December 31, 2013 to €1.0 million in the fiscal year ended December 31, 2014 also contributed
to the increase of personnel expenses. Expenses in conjunction with the termination of
employment contracts in the amount of €3.2 million for the fiscal year ended December 31,
2014 and €0.7 million in the fiscal year ended December 31, 2013 are included in the
miscellaneous non-operating expenses which are shown in the Adjusted EBIT. The increase in
personnel expenses was offset in part by efficiency gains, reflecting higher revenues coupled
with cost savings.
The following table shows our personnel expenses broken down by type for the fiscal years
ended December 31, 2014 and December 31, 2013:
December 31,
2014(1)(2)
(in € thousand)
2013(2)
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349,526
62,493
3,502
1,787
323,894
58,103
3,351
878
Total personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
417,308
386,226
As of December 31, 2014 we employed 7,401 employees (7,306 employees at December 31,
2013), including trainees but excluding employees from discontinued operations in each period.
Adjusted for the company divestitures of the Rücker aerospace companies, EKS InTec GmbH,
Wolfgang Rücker Ges.mbH, Vienna and the “Werkzeug und Karosseriesysteme Eisenach”
business division by way of a spin-off for absorption into EDAG Werkzeug + Karosserie GmbH,
our headcount in the fiscal ended December 31, 2014 increased by approximately 600
employees, which represents an increase of approximately 8% as compared to the fiscal year
173
e.
Other expenses
Our other expenses increased by €8.2 million, or 8.7%, from €94.1 million in the fiscal year
increase was primarily due to expenses from restructuring amounting to €4.8 million, mostly
related to expenses incurred in connection with the termination of employment contracts, as
well as transactional expenses from sale of real estate amounting to €1.3 million (see
“J. Management’s Discussion and Analysis of Financial Condition and Results of Operations—
IX. Off-Balance Sheet Arrangements”), consulting and reengineering costs and expenses
incurred in conjunction with the termination of employment contracts in the amount of
€6.8 million in the fiscal year ended December 31, 2014 as compared to €2.8 million for the fiscal
year ended December 31, 2013.
f.
Our earnings before interest and taxes (EBIT) increased significantly, by €49.1 million, or
Besides higher sales revenues which were due to positive trends in the global economic
development and the automotive industry, a greater number of projects and the integration of
the Rücker Group, this significant increase in earnings is partly due to extraordinary factors from
sales of the Rücker aerospace companies, EKS InTec GmbH and real estate sales. Moreover,
EDAG Engineering GmbH’s business unit “Werkzeug und Karosseriesysteme Eisenach” was
initially spun off into EDAG Werkzeug + Karosserie GmbH. In this context, FFT
Produktionssysteme GmbH & Co. KG acquired 51% of the shares in the company in the fiscal
year ended December 31, 2014, with the remaining 49% of the shares being accounted for using
the at-equity method as of December 31, 2014. These positive extraordinary effects from sales
were diminished by restructuring expenses related to the merger of EDAG Engineering GmbH
and the Rücker Group which was consummated in 2014, the resulting depreciation and
amortization from the purchase price allocation and impairment relating to a single building
that was qualified as an asset held for sale. After adjustment for these extraordinary effects, the
Adjusted EBIT amounted to €57.9 million for the fiscal year ended December 31, 2014 and was
€8.2 million, or 16.5% above the Adjusted EBIT for the fiscal year ended December 31, 2013. The
Adjusted EBIT margin also increased to 8.4% in the fiscal year ended December 31, 2014 from
7.9% in the fiscal year ended December 31, 2013.
The significant increase in our earnings before interest and taxes (EBIT) was partially offset by
an increase in our depreciation, amortization and impairment charge by €0.6 million, or 2.5%,
from €25.0 million in the fiscal year ended December 31, 2013 to €25.6 million in the fiscal year
ended December 31, 2014. Depreciation, amortization and impairment decreased slightly in
relation to the sales revenues and changes in inventories to 3.7% in the fiscal year ended
December 31, 2014, from 4.0% in the fiscal year ended December 31, 2013. In the fiscal year
ended December 31, 2014, an impairment loss of €0.9 million was recorded with respect to an
office property which was qualified as an asset held for sale. The depreciation and amortization
includes the depreciation and amortization related to step-ups from the purchase price
allocation in the amount of €7.0 million in the fiscal year ended December 31, 2014, of which
€5.3 million was attributable to our acquisition of the Rücker Group and €1.6 million was
attributable to our acquisition of the BFFT Group. This represents a decrease of €1.4 million, or
16.6%, from the depreciation and amortization related to step-ups from the purchase price
allocation in the amount of €8.4 million in the fiscal year ended December 31, 2013, of which
€5.3 million was attributable to our acquisition of the Rücker Group and €3.0 million was
attributable to our acquisition of the BFFT Group.
174
The following table shows EBIT, Adjusted EBIT, Adjusted EBIT margin as well as Adjusted Core
EBIT and Adjusted Core EBIT margin derived from the audited consolidated statements of
comprehensive income for the fiscal years ended December 31, 2014 and December 31, 2013 for
For the year ended
December 31,
2014(1)(2)
2013(2)
(in € thousand)
EBIT(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBIT(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBIT margin (%)(4) (unaudited) . . . . . . . . . . . . . . .
Adjusted Core EBIT (unaudited)(5) . . . . . . . . . . . . . . . . . . . . .
Adjusted Core EBIT margin (%)(6) (unaudited) . . . . . . . . . .
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87,643
57,877
8.4%
53,185
8.4%
38,523
49,665
7.9%
42,984
7.7%
from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, such measures are
not financial measures calculated in accordance with IFRS. Accordingly, EBIT and Adjusted EBIT should be viewed as
supplemental to, but not as a substitute for, measures presented in our consolidated or combined statements of
IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating performance and as a measure of economic
success of our business. In addition, we believe that EBIT and Adjusted EBIT are measures commonly used by investors. EBIT
and Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled measures reported by other
audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, this measure is not a
financial measure calculated in accordance with IFRS. Accordingly, Adjusted EBIT margin should be viewed as supplemental
to, but not as a substitute for, measures presented in our consolidated or combined statements of comprehensive income or
our consolidated or combined statements of cash flow, which are prepared in accordance with IFRS.
of and for the fiscal year ended December 31, 2014, this measure is not a financial measure calculated in accordance with
IFRS. Accordingly, Adjusted Core EBIT should be viewed as supplemental to, but not as a substitute for, measures presented
in our consolidated or combined statements of comprehensive income or our consolidated or combined statements of cash
been derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, this
measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted Core EBIT margin should be
IFRS.
Our Adjusted EBIT increased by €8.2 million, or 16.5%, from €49.7 million in the fiscal year
ended December 31, 2013 to €57.9 million in the fiscal year ended December 31, 2014.
Our Adjusted Core EBIT increased by €10.2 million, or 23.7%, from €43.0 million in the fiscal
year ended December 31, 2013 to €53.2 million in the fiscal year ended December 31, 2014. Our
Adjusted Core EBIT margin increased by 0.7 percentage points, from 7.7% in the fiscal year
ended December 31, 2013 to 8.4% in the fiscal year ended December 31, 2014.
175
g.
Financial result
Our financial result decreased by €3.9 million, or 57.3%, from a loss of €6.8 million in the fiscal
year ended December 31, 2013 to a loss of €10.7 million in the fiscal year ended December 31,
2014. This decrease was primarily due to a decrease in financial income as a result of reduced
interest on debit balances, and due to an increase in financial expense as a result of the
acquisitions of Rücker AG on September 24, 2012 and BFFT Gesellschaft für Fahrzeugtechnik
mbH on January 18, 2013. Furthermore, the inclusion of EDAG GmbH & Co. KGaA had a
negative effect on the financial result, as it entailed the assumption of financial liabilities in the
amount of €40.0 million in the fiscal year ended December 31, 2013, which in turn incurred
additional interest payments.
h.
Profit or loss
Our profit increased by €40.0 million from a profit of €19.8 million in the fiscal year ended
December 31, 2013 to a profit of €59.8 million in the fiscal year ended December 31, 2014.
Besides the increase in our earnings before interest and taxes (EBIT), which was partially offset
by a decrease in our financial result, both as set out above, this increase in our profit was also
partially due to an increase in our earnings after taxes from discontinued operations by
€3.5 million from a loss of €1.9 million in the fiscal year ended December 31, 2013 to a gain of
€1.6 million in the fiscal year ended December 31, 2014. In 2013, we recorded a provision of
€2.7 million to cover certain guarantees, which, due to an agreement we reached in relation to
residual costs from our discontinued business, was completely reversed in 2014. This was offset
in part by a severance payment of €0.5 million made in the fiscal year ended December 31, 2014.
3.
Fiscal year ended December 31, 2012 compared to fiscal year ended December 31, 2013
a.
ended December 31, 2013. This increase was primarily due to the full inclusion of the Rücker
Group and BFFT Group in the fiscal year ended December 31, 2013. While the Rücker Group was
only reflected from October 1, 2012, i.e., for a three-month period only, in the audited
combined financial information for the fiscal year ended December 31, 2012, the BFFT Group
was not included at all in the audited consolidated financial information for the fiscal year
ended December 31, 2012. The sales revenues of the Rücker Group amounted to €189.4 million
in the fiscal year ended December 31, 2012. If the inclusion had been effective by January 1,
2012, the group sales revenue would have included this amount. If, in addition the sales
revenues and changes in inventories of the BFFT Group in the fiscal year ended December 31,
2013 (amounting to €50.4 million) were removed from the sales revenues and changes in
inventories for the fiscal year ended December 31, 2013, then the sales revenues and changes in
inventories for those two fiscal years would have increased by approximately €26.0 million, or
approximately 4.7%, from approximately €556.2 million in the fiscal year ended December 31,
2012 to €582.1 million in the fiscal year ended December 31, 2013.
176
the fiscal years ended December 31, 2013 and December 31, 2012:
December 31,
2013(1)
2012(2)
(audited,
consolidated)
(audited,
combined)
.
.
.
.
387,443
75,427
97,836
59,421
252,283
67,686
37,547
58,320
Total sales revenues with third parties . . . . . . . . . . . . . . . . . . . . . . . . .
620,127
415,836
(in € thousand)
Vehicle Engineering
Electrics/Electronics .
Others(3) . . . . . . . . . .
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.
(1) Data for the fiscal year ended December 31, 2013 on a consolidated basis and comprising the business of the Rücker Group
and the business of the BFFT Group for the full fiscal year.
Our sales revenues increased by €204.3 million, or 49.1% from €415.8 million in the fiscal year
increase was primarily due to the full inclusion of the Rücker Group and the BFFT Group in the
fiscal year ended December 31, 2013 (as described above). The remainder of the increase across
all segments was due to positive trends in global economic development and the automotive
industry which encouraged OEMs to award larger and more complex work packages to external
engineering service providers and our hiring of additional engineers which allowed us to service
a greater number of projects.
increased by €135.2 million, or 53.6%, from €252.3 million in the fiscal year ended December 31,
2012 to €387.4 million in the fiscal year ended December 31, 2013. Besides the positive trends
described above, this was mainly due to the full inclusion of the Rücker Group. Sales revenues
with third parties in our Production Solutions segment increased by €7.7 million, or 11.4%, from
December 31, 2013. Besides the positive trends described above, this was mainly due to
developing our segment production solutions internationally by following our customers’
delocalization of production. Sales revenues with third parties in our Electrics/Electronics
segment increased by €60.3 million, or 160.6%, from €37.5 million in the fiscal year ended
positive trends described above, this was mainly due to the full inclusion of the BFFT Group.
Our changes in inventories changed from a decrease of €0.7 million in the fiscal year ended
December 31, 2012 to a gain of €12.3 million in the fiscal year ended December 31, 2013. This
change was primarily due to a significant increase in stock in our former tool and body system
division in the fiscal year ended December 31, 2013.
177
b.
Material expenses
Our material expenses increased by €25.4 million, or 32.0%, from €79.5 million in the fiscal year
ended December 31, 2012 to €104.9 million in the fiscal year ended December 31, 2013. The
following table shows our material expenses broken down by type for the fiscal years ended
December 31,
2013(1)
2012(2)
(audited,
consolidated)
(audited,
combined)
Expenses for materials and supplies and for purchased goods . . . . . . .
Expenses for purchased services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,305
72,638
30,757
48,757
Total material expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
104,943
79,514
(in € thousand)
Our expenses for materials and supplies and for purchased goods increased by €1.5 million, or
5.0%, from €30.8 million in the fiscal year ended December 31, 2012 to €32.3 million in the fiscal
year ended December 31, 2013. This increase was primarily due to the full inclusion of the
Rücker Group and the BFFT Group in the fiscal year ended December 31, 2013 as well as changes
in requirements as a result of our project mix, whereby customers required our use of certain
suppliers at certain prices for certain projects.
Our expenses for purchased services increased by €23.9 million, or 49.0%, from €48.8 million in
2013. Besides the effects from the full inclusion of the Rücker Group and the BFFT Group in the
fiscal year ended December 31, 2013, this increase was primarily due to an increased need for
services from third-party engineering services suppliers for consumer- or project-specific
specialist services, or to provide support in times of under-staffing.
increased from 19.2% in the fiscal year ended December 31, 2012 to 16.6% in the fiscal year
c.
Gross profit
Our gross profit increased by €187.9 million, or 52.8%, from €355.9 million in the fiscal year
ended December 31, 2012 to €543.8 million in the fiscal year ended December 31, 2013. This was
primarily due to the full inclusion of the Rücker Group and the BFFT Group in the fiscal year
ended December 31, 2013, and was partially offset by a decrease in our other income by
€16.3 million in the fiscal year ended December 31, 2013, as a result of a deconsolidation effect
of €4.8 million in the fiscal year ended December 31, 2012, €3.7 million of which was
attributable to the deconsolidation of 67% of the limited partner’s shares in ED Work GmbH &
Co. KG, which were sold to Kempfer & Kolakovic Personal Management GmbH, and €1.1 million
of which was attributable to the deconsolidation of Rosata GrundstücksVermietungsgesellschaft mbH & Co. Objekt Fulda-West KG.
slightly from 85.7% in the fiscal year ended December 31, 2012 to 86.0% in the fiscal year ended
December 31, 2013.
178
d.
Personnel expenses
year ended December 31, 2012 to €386.2 million in the fiscal year ended December 31, 2013. The
following table shows our personnel expenses broken down by type for the fiscal years ended
December 31,
2013(1)
2012(2)
(audited,
consolidated)
(audited,
combined)
.
.
.
.
323,894
58,103
3,351
878
201,729
40,567
3,145
223
Total personnel expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
386,226
245,664
(in € thousand)
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year ended December 31, 2012 to €386.2 million in the fiscal year ended December 31, 2013.
This increase was primarily due to the full inclusion of the Rücker Group, and the remainder
from the full inclusion of the BFFT Group in the fiscal year ended December 31, 2013 and
affected all of our types of personnel expenses.
As of December 31, 2013 we employed 7,306 employees, as compared to 6,102 employees as of
December 31, 2012, , including trainees but excluding employees from discontinued operations
in each period. Adjusted to remove the employees of the BFFT Group as of December 31, 2013,
the number of new hires, including trainees, for the fiscal year ended December 31, 2013 was
approximately 600 employees, which represents an increase of approximately 9.0% as compared
to the fiscal year ended December 31, 2012.
e.
Other expenses
The other expenses increased by €31.7 million, or 51.0%, from €62.3 million in the fiscal year
increase was primarily due to the full inclusion of the Rücker Group and the BFFT Group in the
fiscal year ended December 31, 2013, as well as related consulting and reengineering costs and
expenses incurred in conjunction with the termination of employment contracts amounting to
€2.8 million.
f.
Our earnings before interest and taxes (EBIT) increased by €3.0 million, or 8.6%, from
December 31, 2013. This increase was primarily due to the full inclusion of the Rücker Group and
the BFFT Group in the fiscal year ended December 31, 2013. While the Rücker Group was only
reflected from October 1, 2012 in the audited combined financial information for the fiscal year
ended December 31, 2012, the BFFT Group was not included at all in the audited consolidated
financial information for the fiscal year ended December 31, 2012. The remainder was primarily
due to increases in sales revenues and changes in inventories, offset in part by a decrease in
other income and increases in expenses, as well as an increase in depreciation, amortization and
179
impairment by €12.5 million from €12.5 million the fiscal year ended December 31, 2012 to
€25.0 million in the fiscal year ended December 31, 2013 as a result of the acquisition of the
Rücker Group and BFFT Group.
The following table shows EBIT, Adjusted EBIT and Adjusted EBIT margin as well as Adjusted
Core EBIT and Adjusted Core EBIT margin derived from the audited consolidated statements of
comprehensive income for the fiscal year ended December 31, 2013 and from the audited
combined statement of comprehensive income for the fiscal year ended December 31, 2012 for
For the year ended
December 31,
(in € thousand)
EBIT(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBIT(3) . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBIT margin (%)(4) (unaudited) . . . . .
Adjusted Core EBIT(5) (unaudited) . . . . . . . . . . . .
Adjusted Core EBIT margin (%)(6) (unaudited)
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2013(1)
2012(2)
(audited
unless
otherwise
indicated,
consolidated)
(audited
unless
otherwise
indicated,
combined)
38,523
49,665
7.9%
42,984
7.7%
35,482
32,043
7.7%
29,566
8.3%
from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, such measures are
not financial measures calculated in accordance with IFRS. Accordingly, EBIT and Adjusted EBIT should be viewed as
supplemental to, but not as a substitute for, measures presented in our consolidated or combined statements of
IFRS. Our management uses EBIT and Adjusted EBIT to assess our operating performance and as a measure of economic
success of our business. In addition, we believe that EBIT and Adjusted EBIT are measures commonly used by investors. EBIT
and Adjusted EBIT, as presented in this prospectus, may not be comparable to similarly titled measures reported by other
audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, this measure is not a
financial measure calculated in accordance with IFRS. Accordingly, Adjusted EBIT margin should be viewed as supplemental
to, but not as a substitute for, measures presented in our consolidated or combined statements of comprehensive income or
our consolidated or combined statements of cash flow, which are prepared in accordance with IFRS.
of and for the fiscal year ended December 31, 2014, this measure is not a financial measure calculated in accordance with
IFRS. Accordingly, Adjusted Core EBIT should be viewed as supplemental to, but not as a substitute for, measures presented
in our consolidated or combined statements of comprehensive income or our consolidated or combined statements of cash
been derived from our audited consolidated financial statements as of and for the fiscal year ended December 31, 2014, this
measure is not a financial measure calculated in accordance with IFRS. Accordingly, Adjusted Core EBIT margin should be
IFRS.
180
Our Adjusted EBIT increased by €17.6 million, or 55.0%, from €32.0 million in the fiscal year
ended December 31, 2012 to €49.7 million in the fiscal year ended December 31, 2013. This was
primarily due to the full inclusion of the Rücker Group and the BFFT Group in the fiscal year
ended December 31, 2013, as well as improved market conditions. Our Adjusted EBIT margin
increased by 0.2%, from 7.7% in the fiscal year ended December 31, 2012 to 7.9% in the fiscal
year ended December 31, 2013.
Our Adjusted Core EBIT increased by €13.4 million, or 45.4%, from €29.6 million in the fiscal
year ended December 31, 2012 to €43.0 million in the fiscal year ended December 31, 2013. Our
Adjusted Core EBIT margin decreased by 0.6 percentage points, from 8.3% in the fiscal year
ended December 31, 2012 to 7.7% in the fiscal year ended December 31, 2013.
g.
Financial result
Our financial result decreased by €3.9 million from a loss of €2.9 million in the fiscal year ended
December 31, 2012 to a loss of €6.8 million in the fiscal year ended December 31, 2013. This
decrease was primarily due to increased interest payments as a result of the acquisitions of
Rücker AG on September 24, 2012 and BFFT Gesellschaft für Fahrzeugtechnik mbH on
January 18, 2013, which required additional debt financing, as well as a decrease in interest on
debit balances and a higher level of net financial debt during the fiscal year ended
December 31, 2013.
h.
Profit or loss
Our profit decreased by €4.3 million, or 17.9%, from a profit of €24.2 million in the fiscal year
ended December 31, 2012 to a profit of €19.8 million in the fiscal year ended December 31,
2013. This decrease was primarily due to a decrease in our earnings after taxes from
discontinued operations, which decreased by €1.1 million, from a loss of €0.8 million in the fiscal
year ended December 31, 2012 to a loss of €1.9 million in the fiscal year ended December 31,
2013. As a result of a provision we recorded expenses in the fiscal year ended December 31,
2013 for certain guarantees amounting to €2.7 million, which amounted to a loss of €1.9 million
after considering the tax effect.
181
VII. SELECTED DATA FROM THE CONSOLIDATED/COMBINED STATEMENT OF FINANCIAL
POSITION
consolidated interim statement of EDAG Engineering Schweiz Sub-Holding AG of financial
position as of September 30, 2015 as well as from the audited consolidated statements of
financial position as of December 31, 2014 and December 31, 2013 and the audited combined
statement of financial position as of December 31, 2012 of EDAG Engineering GmbH:
As of September 30,
2015
(in € thousand)
ASSETS
Intangible assets . . . . . . . . . . . . . . . .
Of which goodwill . . . . . . . . . . . . .
Property, plant and equipment . . . . .
Investment property . . . . . . . . . . . . .
Financial assets . . . . . . . . . . . . . . . . . .
Investments accounted for using the
equity method . . . . . . . . . . . . . . . .
Non-current accounts receivable and
Deferred tax assets . . . . . . . . . . . . . . .
Total non-current assets . . . . . . . . . .
2014(1)
2013(1)
As of
January 1,
2013(2)
(audited,
combined)
106,754
64,162
62,073
—
196
109,864
63,903
55,608
—
171
113,393
63,903
87,529
3,004
535
84,346
44,528
82,974
3,105
519
16,585
15,519
—
—
1,219
506
187,333
1,350
681
183,193
1,301
3,158
208,920
1,464
1,306
173,714
1,606
6,884
18,190
3,397
139,332
50,373
37,732
29,150
138,915
197,084
156,055
128,248
761
188
3,494
26,971
5,539
92
6,679
39,502
27,956
109
5,977
68,606
20,209
68
5,017
36,188
750
311,256
750
301,364
9,043
295,712
7,105
209,173
498,589
484,557
504,632
382,887
.
.
.
22,905
41,306
92,279
20,000
40,746
67,756
50
40,000
67,839
50
40,000
70,441
.
.
ⳮ7,935
ⳮ2,134
ⳮ9,592
ⳮ1,568
ⳮ3,061
ⳮ2,059
ⳮ2,976
ⳮ568
.
.
.
146,421
91
146,512
117,342
69
117,411
102,769
153
102,922
106,947
6,058
113,005
Inventories . . . . . . . . . . . . . . . . . . . . .
contracts . . . . . . . . . . . . . . . . . . . . .
Current accounts receivable and
Of which cash receivables from
cash pooling . . . . . . . . . . . . . . . .
Other financial assets . . . . . . . . . . . . .
Income tax assets . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . .
Assets held for sale / discontinued
operations . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . .
Subscribed capital . . . . . . . . . . . . . .
Capital reserves . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . .
Reserves from profits and losses
recognized directly in equity . . . .
Currency conversion difference . . . .
Equity attributable to shareholders
of the parent company . . . . . . . . .
Non-controlling interests . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . .
As of December 31,
182
As of September 30,
2015
(in € thousand)
Provisions for pensions and similar
obligations . . . . . . . . . . . . . . . . .
Other non-current provisions . . . . .
Non-current income tax liabilities .
Deferred tax liabilities . . . . . . . . . .
Total non-current liabilities and
provisions . . . . . . . . . . . . . . . . . .
As of December 31,
2014(1)
2013(1)
As of
January 1,
2013(2)
(audited,
combined)
..
..
..
21,715
4,315
160,919
22,358
5,004
162,003
12,018
4,399
197,737
10,698
6,710
6,001
..
..
..
96
1,460
11,877
151
1,460
10,155
92
1,460
18,837
83
1,335
15,575
..
200,382
201,131
234,543
40,402
Current provisions . . . . . . . . . . . . . . .
Current financial liabilities . . . . . . . . .
contracts . . . . . . . . . . . . . . . . . . . . .
Current accounts payable and other
liabilities . . . . . . . . . . . . . . . . . . . . .
Income tax liabilities . . . . . . . . . . . . .
Provisions and liabilities in
connection with assets held for sale
/ from discontinued operations . . .
Total current liabilities and
provisions . . . . . . . . . . . . . . . . . . . .
12,173
28,729
12,767
4,858
13,083
35,648
8,384
117,948
36,099
61,618
38,579
27,575
69,368
5,326
73,082
13,690
69,281
5,970
71,839
3,734
—
—
4,606
—
151,695
166,015
167,167
229,480
Total equity, liabilities and
provisions . . . . . . . . . . . . . . . . . . . .
498,589
484,557
504,632
382,887
1.
Total non-current assets
The major items of our non-current assets are intangible assets and property, plant and
equipment.
a.
Intangible assets
As of September 30, 2015, our intangible assets amounted to €106.8 million, representing 21.4%
of our total assets. Intangible assets decreased by €3.1 million, from €109.9 million as of
December 31, 2014 to €106.8 million as of September 30, 2015. This decrease was primarily due
to amortizations in our client list. Intangible assets decreased by €3.5 million, from
€113.4 million as of December 31, 2013 to €109.9 million as of December 31, 2014. This decrease
was primarily due to amortization of customer relationship assets in the amount of €4.6 million
attributable to purchase price allocation from the acquisitions of the Rücker Group and the BFFT
Group in the fiscal year ended December 31, 2014. Intangible assets increased by €29.0 million,
from €84.3 million as of December 31, 2012 to €113.4 million as of December 31, 2013. This
increase was primarily due to step-ups in customer relationship assets, order backlog and
goodwill attributable to the purchase price allocation from the acquisitions of the BFFT Group.
183
b.
Property, plant and equipment
As of September 30, 2015, our property, plant and equipment amounted to €62.1 million,
representing 12.4% of our total assets. Property, plant and equipment increased by €6.5 million,
from €55.6 million as of December 31, 2014 to €62.1 million as of September 30, 2015. This
increase was primarily due to refurbishment in buildings on third party properties. Property,
plant and equipment decreased by €31.9 million, from €87.5 million as of December 31, 2013 to
€55.6 million as of December 31, 2014. This decrease was primarily due to the sale of real estate.
On December 12, 2014, we sold five buildings with a net book value of €22.5 million for a
purchase price of €38.4 million. Furthermore, in December 2014, we sold one building with a net
book value of €3.0 million for a purchase price of €5.3 million. The disposal of our aerospace
and tool and body works businesses during the fiscal year ended December 31, 2014 also
contributed to the decrease. Property, plant and equipment increased by €4.6 million, from
€83.0 million as of December 31, 2012 to €87.5 million as of December 31, 2013. This increase
was primarily due to the initial consolidation of the BFFT Group.
2.
Total current assets
The major items of our current assets are future receivables from construction contracts and
current accounts receivable and other receivables.
a.
Future receivables from construction contracts
As of September 30, 2015, our future receivables from construction contracts amounted to
€139.3 million, representing 27.9% of our total assets. Future receivables from construction
contracts increased by €89.0 million, from €50.4 million as of December 31, 2014 to
€139.3 million as of September 30, 2015. This increase is primarily due to the fact that a majority
of project billings generally take place in the fourth quarter of the financial year. Future
receivables from construction contracts increased by €12.6 million, from €37.7 million as of
December 31, 2013 to €50.4 million as of December 31, 2014. This increase was primarily due to
an increase in sales revenues as a result of higher project volumes. Future receivables from
construction contracts increased by €8.6 million, from €29.2 million as of December 31, 2012 to
€37.7 million as of December 31, 2013. This increase was primarily due to the initial
consolidation of the BFFT Group, as well as an increase in sales revenues as a result of higher
project volumes.
b.
Current accounts receivable and other receivables
As of September 30, 2015, our current accounts receivable and other receivables amounted to
€138.9 million, representing 27.9% of our total assets. Current accounts receivable and other
receivables decreased by €58.2 million, from €197.1 million as of December 31, 2014 to
€138.9 million as of September 30, 2015. This decrease was primarily due to the fact that a
majority of project billings from work packages generally take place in the fourth quarter of the
financial year. Current accounts receivable and other receivables increased by €41.0 million,
increase was primarily due to an increase in other receivables as a result of outstanding amounts
from sales of real estate assets. Current accounts receivable and other receivables increased by
€27.8 million, from €128.2 million as of December 31, 2012 to €156.1 million as of
December 31, 2013. This increase was primarily due to the initial consolidation of the BFFT
Group, as well as an increase in sales revenues as a result of higher project volumes.
3.
Total equity
The major items of our equity are capital reserves and retained earnings.
a.
Capital reserves
As of September 30, 2015, our capital reserves amounted to €41.3 million, representing 28.2%
of our total equity. Capital reserves increased by €0.6 million, from €40.7 million as of
December 31, 2014 to €41.3 million as of September 30, 2015. This increase was primarily due to
184
share-based payment transactions with cash alternatives (see “P. Corporate Bodies—IV.
Remuneration and other Benefits of the Board of Directors and the Group Executive
Management—4. Remuneration of the Group Executive Management”). Capital reserves
increased by €0.7 million, from €40.0 million as of December 31, 2013 to €40.7 million as of
December 31, 2014. This increase was primarily due to share-based payment transactions with
cash alternatives. Capital reserves did not change from €40.0 million as of January 1, 2013 and as
of December 31, 2013.
b.
Retained earnings
As of September 30, 2015, our retained earnings amounted to €92.3 million, representing 63.0%
of our total equity. Retained earnings increased by €24.5 million, from €67.8 million as of
December 31, 2014 to €92.3 million as of September 30, 2015. This increase was primarily due to
the attributable profit. Retained earnings decreased by €0.1 million, from €67.8 million as of
December 31, 2013 to €67.8 million as of December 31, 2014. This decrease was primarily due
combined effects of a €2.0 million increase in our legal reserve in accord with §150 of the
German Companies Act, as well as a withdrawal from our other retained earnings, attributable
profit of €60.0 million and the inclusion of EDAG GmbH & Co. KGaA through financing with
borrowed capital in the amount of €40.0 million and an investment in kind in subscribed capital
in the amount of €20.0 million in the fiscal year ended December 31, 2014. Retained earnings
decreased by €2.6 million, from €70.4 million as of January 1, 2013 to €67.8 million as of
December 31, 2013. This decrease was primarily due to attributable profit of €18.6 million, the
acquisition of shares of fully consolidated companies from non-controlling interest in an amount
of €7.6 million and dividend payments to the Selling Shareholder in the amount of
€13.6 million.
4.
Total non-current liabilities and provisions
The major items of our non-current liabilities and provisions are provisions for pensions and
similar obligations; and non-current financial liabilities.
a.
Provisions for pensions and similar obligations
As of September 30, 2015, our provisions for pensions and similar obligations amounted to
€21.7 million, representing 10.8% of our total non-current liabilities and provisions. Provisions
for pensions and similar obligations decreased by €0.6 million, from €22.4 million as of
December 31, 2014 to €21.7 million as of September 30, 2015. This decrease was primarily due to
an increased interest rate for domestic pensions plans. Provisions for pensions and similar
obligations increased by €10.3 million, from €12.0 million as of December 31, 2013 to
€22.4 million as of December 31, 2014. This increase was primarily due to a decrease in the
discount rate related to our defined benefit plans in Germany from 3.7% as of
December 31, 2013 to 2.0% as of December 31, 2014. Provisions for pensions and similar
obligations increased by €1.3 million, from €10.7 million as of December 31, 2012 to
€12.0 million as of December 31, 2013. This increase was primarily due to a corresponding
increase in ongoing service costs and net interest expenses.
b.
Non-current financial liabilities
As of September 30, 2015, our non-current financial liabilities amounted to €160.9 million,
representing 80.3% of our total non-current liabilities and provisions. Non-current financial
liabilities decreased by €1.1 million, from €162.0 million as of December 31, 2014 to
€160.9 million as of September 30, 2015. This decrease was primarily due to an ordinary
redemption in connection with liabilities due to credit institutions from loans. Non-current
financial liabilities decreased by €35.7 million, from €197.7 million as of December 31, 2013 to
€162.0 million as of December 31, 2014. This decrease was primarily due to repayments of a loan
from ATON Group Finance GmbH. Non-current financial liabilities increased by €191.7 million,
increase was primarily due to the completion of two long-term loans due to affiliated
185
companies taken out to finance the acquisition of the Rücker Group and the BFFT Group (see “L.
Business—XII. Material Contracts—1. Financing Agreements”).
5.
Total current liabilities and provisions
The major items of our current liabilities and provisions are current financial liabilities, future
liabilities from construction contracts, and current accounts payable and other liabilities.
a.
Current financial liabilities
As of September 30, 2015, our current financial liabilities amounted to €28.7 million,
representing 18.9% of our total current liabilities and provisions. Current financial liabilities
increased by €23.9 million, from €4.9 million as of December 31, 2014 to €28.7 million as of
September 30, 2015. This increase was primarily due to an increase in liabilities from loans due
to related parties (VKE Versorgungskasse EDAG Firmengruppe e.V.). Current financial liabilities
decreased by €30.8 million, from €35.6 million as of December 31, 2013 to €4.9 million as of
December 31, 2014. This decrease was primarily due to the assignment of debt in the amount of
€11.0 million. The loan from VKE Versorgungskasse EDAG Firmengruppe e.V. decreased by
€20.5 million from €20.7 million as of December 31, 2013 to €0.1 million as of
December 31, 2014. Current financial liabilities decreased by €82.3 million, from €117.9 million
as of December 31, 2012 to €35.6 million as of December 31, 2013. This decrease was primarily
due to a reallocation from current financial liabilities to non-current financial liabilities, the
repayment of €25.0 million to credit institutions and the repayment of €57.8 million to the
Selling Shareholder.
b.
Future liabilities from construction contracts
As of September 30, 2015, our future liabilities from construction contracts amounted to
€36.1 million, representing 23.8% of our total current liabilities and provisions. Future liabilities
from construction contracts decreased by €25.5 million, from €61.6 million as of
the fact, that a majority of project billings from work packages generally take place in the
fourth quarter of the financial year. Future liabilities from construction contracts increased by
€23.0 million, from €38.6 million as of December 31, 2013 to €61.6 million as of
December 31, 2014. This increase was primarily due to increased prepayments from customers.
Future liabilities from construction contracts increased by €11.0 million, from €27.6 million as of
December 31, 2012 to €38.6 million as of December 31, 2013. This increase was primarily due to
increased prepayments from customers.
c.
Current accounts payable and other liabilities
As of September 30, 2015, our current accounts payable and other liabilities amounted to
€69.4 million, representing 45.7% of our total current liabilities and other provisions. Current
accounts payable and other liabilities decreased by €3.7 million, from €73.1 million as of
a decrease in material expenses as described above. Current accounts payable and other
liabilities increased by €3.8 million, from €69.3 million as of December 31, 2013 to €73.1 million
as of December 31, 2014. This increase was primarily due to an increase in material expenses
incurred, part of which, in accordance with the relevant payment terms, had not been paid as of
the balance sheet date. Current accounts payable and other liabilities decreased by €2.6 million,
decrease was primarily due to the implementation of a policy requiring payments to suppliers of
the Rücker Group and the BFFT Group within 14 days.
186
VIII. LIQUIDITY AND CAPITAL RESOURCES
1.
Overview
During all of the periods presented, our primary sources of liquidity were cash generated from
operations, liquidity reserves, cash-pooling with the Selling Shareholder and lines of credit. For
the nine-month period ended September 30, 2015, we had cash outflows from operating
activities amounting to €16.3 million. As of September 30, 2015, we had cash and cash
equivalent of €27.0 million and access to lines of credit in the amount of €38.5 million. In
addition, we had receivables from the cash-pooling with our selling shareholder of €0.8 million.
As of September 30, 2015, our financial liabilities amounted to €189.6 million.
We expect to meet our working capital expenditure needs over the next twelve months through
cash generated from operations. Our ability to make scheduled payments of principal and
interest on, or to refinance, indebtedness, or to fund planned capital expenditures and working
capital, will depend on the future performance of the Company and its ability to generate cash
in the future, which, to a certain extent, is subject to general economic, financial, competitive,
legislative, legal, regulatory and other factors that are beyond our control, as well as the factors
discussed under “A. Risk Factors”. We may also, from time to time, seek other sources of
funding, which may include debt or equity financing, depending on our acquisition and
investment strategy, our financing needs and market conditions.
2.
Cash Flow
The changes to the items from the statement of financial position which are shown in the
statement of cash flow are not directly derivable from the statement of financial position, as
effects from the currency conversion and from changes in the scope of consolidation are noncash and disclosed separately.
consolidated interim statements of cash flow of EDAG Engineering Schweiz Sub-Holding AG for
the nine-month periods ended September 30, 2015 and September 30, 2014 as well as from the
audited consolidated statements of cash flow for the fiscal years ended December 31, 2014 and
December 31, 2013 and the audited combined statement cash flow for the fiscal year ended
ended September 30,
2015
(in € thousand)
operations . . . . . . . . . . . . . . . . . . . .
discontinued operations . . . . . . . . .
Income tax expenses . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . .
Financial result . . . . . . . . . . . . . . . . . .
Interest received . . . . . . . . . . . . . . . . .
Impairment from revaluation at fair
value less costs of disposal . . . . . . . .
Depreciation and amortization/writeups on tangible and intangible
assets . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation on current assets . . . . . .
Other non-cash expenses/income . . . .
Increase/decrease in non-current
provisions . . . . . . . . . . . . . . . . . . . . .
Profit/loss on the disposal of fixed
assets . . . . . . . . . . . . . . . . . . . . . . . .
Increase/decrease in inventories . . . . .
(1)
2014
2014(1)(2)
2013(2)
2012(3)
(audited,
(audited, consolidated) combined)
27,458
28,969
58,238
21,727
24,919
—
12,336
ⳮ16,326
5,158
563
1,550
9,960
ⳮ10,783
8,623
518
1,586
19,367
ⳮ15,625
10,717
981
ⳮ1,905
9,171
ⳮ10,114
6,814
716
ⳮ767
7,786
ⳮ3,031
3,827
940
—
—
865
—
—
18,087
—
2,054
18,202
—
ⳮ18,402
24,748
—
ⳮ34,664
ⳮ1,333
8,775
11,364
ⳮ654
6,247
ⳮ106
5,279
52
5,518
ⳮ18,321
5,519
ⳮ151
ⳮ13,964
ⳮ683
ⳮ1,073
187
24,984
13,930
—
—
ⳮ716 ⳮ10,124
ended September 30,
2015
(in € thousand)
2014
Increase/decrease in future receivables
from construction contracts,
receivables and other assets that
are not attributable to investing or
financing activities . . . . . . . . . . . . . .
Increase/decrease in current
provisions . . . . . . . . . . . . . . . . . . . . .
Increase/decrease in accounts
payables and other liabilities and
provisions that are not attributable
to investing or financing
activities . . . . . . . . . . . . . . . . . . . . . .
Cash inflow/outflow from operating
activities/operating cash flow . . . .
Deposits from disposals of tangible
fixed assets . . . . . . . . . . . . . . . . . . .
Payments for investments in tangible
fixed assets . . . . . . . . . . . . . . . . . . .
Deposits from disposals of intangible
fixed assets . . . . . . . . . . . . . . . . . . .
intangible fixed assets . . . . . . . . . .
Deposits from disposals of financial
assets . . . . . . . . . . . . . . . . . . . . . . .
(1)
2014(1)(2)
2013(2)
2012(3)
(audited,
ⳮ38,062
ⳮ41,652
ⳮ42,080
ⳮ27,567
18,690
ⳮ567
ⳮ4,735
ⳮ27
4,922
ⳮ1,850
ⳮ30,800
5,557
34,050
.
ⳮ16,259
12,152
56,718
21,029
44,788
.
5,833
793
1,934
1,130
2,320
.
ⳮ16,703
ⳮ11,402
ⳮ17,469
.
173
83
81
253
1,013
.
ⳮ4,252
ⳮ5,754
ⳮ7,691
ⳮ6,485
ⳮ2,895
.
29
22
604
7,142
44
ⳮ45
ⳮ35
ⳮ104
ⳮ41
ⳮ203
—
14,388
30,044
—
26,640
ⳮ1,096
ⳮ39,995
ⳮ39,995
ⳮ48,515 ⳮ66,422
ⳮ16,061
ⳮ41,900
ⳮ32,596
ⳮ62,440 ⳮ53,048
—
—
—
—
—
—
ⳮ14
ⳮ5,535
ⳮ30
ⳮ1,146
ⳮ30
ⳮ9,560
ⳮ14,055
ⳮ6,189
ⳮ1
ⳮ3,954
22,142
174
—
102
87,996
ⳮ1,021
ⳮ14,258
ⳮ31,868
—
—
11
Payments for investments in financial
assets . . . . . . . . . . . . . . . . . . . . . . . .
Deposits from disposals in shares of
fully consolidated companies/
divisions . . . . . . . . . . . . . . . . . . . . . .
Payments for investments in shares in
fully consolidated companies /
divisions . . . . . . . . . . . . . . . . . . . . . .
Cash inflow/outflow from investing
activities/investing cash flow . . . . .
Deposits from capital increases and
grants from the shareholders . . . . .
Payments for investments in shares of
fully consolidated companies from
NCI . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to shareholders/partners
(prior year dividend, capital
repayments, other distributions) . . .
Interest paid . . . . . . . . . . . . . . . . . . . .
Borrowing of short-term financial
liabilities . . . . . . . . . . . . . . . . . . . . . .
Repayment of short-term financial
liabilities . . . . . . . . . . . . . . . . . . . . . .
Borrowing of medium-term and longterm financial liabilities . . . . . . . . . .
188
7,766 ⳮ14,023
ⳮ15,924 ⳮ13,545
—
40,050
ⳮ14,424 ⳮ41,478
ⳮ84,046 ⳮ68,134
192,893
—
ended September 30,
2015
(in € thousand)
(1)
2014
2014(1)(2)
2013(2)
2012(3)
(audited,
Repayment of medium-term and
long-term financial liabilities . . . . . .
Repayment of leasing liabilities . . . . .
Repayment/investment in financial
receivables . . . . . . . . . . . . . . . . . . . .
—
ⳮ21
ⳮ14,000
ⳮ244
ⳮ35,608
ⳮ260
4,872
12,085
22,541
Cash inflow/outflow from financing
activities/financing cash flow . . . . .
20,423
ⳮ17,419
ⳮ54,774
75,979
ⳮ11,897
ⳮ47,167
ⳮ30,652
34,568 ⳮ14,703
ⳮ634
433
252
ⳮ854
ⳮ185
39,502
69,902
69,902
36,188
51,076
26,971
23,168
39,502
69,902
36,188
26,971
23,168
39,502
68,606
36,188
—
—
—
1,296
—
ⳮ32,320
ⳮ29,748
24,122
ⳮ41,411
ⳮ8,260
Net cash changes in financial funds . .
Effect of changes in currency
exchange rate and other effects
from changes of financial funds . . .
Financial funds at the start of
period . . . . . . . . . . . . . . . . . . . . . . .
Financial funds at the end of the
period . . . . . . . . . . . . . . . . . . . . . . .
of which: cash and cash
equivalents . . . . . . . . . . . . . . . . . . . .
of which: assets held for sale/
discontinued operations . . . . . . . . .
Free cash flow (FCF) – equity
approach(4) . . . . . . . . . . . . . . . . . . . .
ⳮ954
ⳮ395
ⳮ338
ⳮ506
3,047 ⳮ20,078
ⳮ6,443
“—III. Comparability of our results of operations as a result of the complex financial history of the Group” for a list of our
main acquisitions and disposals.
information.
(4) Free cash flow (FCF) – equity approach is a non-IFRS measure. Free cash flow (FCF) – equity approach represents operating
cash flow less investing cash flow. While the amounts included in free cash flow (FCF) – equity approach have been derived
2015, as applicable, such measure is not a financial measure calculated in accordance with IFRS. Accordingly, free cash flow
(FCF) – equity approach should be viewed as supplemental to, but not as a substitute for, measures presented in our
consolidated or combined statements of cash flow, which are prepared in accordance with IFRS. Free cash flow (FCF) – equity
approach, as presented in this prospectus, may not be comparable to similarly titled measures reported by other companies
due to differences in the way these measures are calculated.
a.
Operating cash flow
Our operating cash flow decreased, from a cash-inflow of €12.2 million in the nine-month
period ended September 30, 2014 to a cash outflow of €16.3 million in the nine-month period
ended September 30, 2015. This decrease was primarily due to an increased trade working
capital resulting from an increase in future receivables from construction contracts due to
varying agreed terms of payment, offset in part by a decrease in current trade receivables.
189
Our operating cash inflow increased by €35.7 million from €21.0 million in the fiscal year ended
December 31, 2013 to €56.7 million in the fiscal year ended December 31, 2014. This increase
was primarily due to an increase in earnings after tax from continuing operations that was
€36.5 million higher in the fiscal year ended December 31, 2014 as compared to the fiscal year
ended December 31, 2013 as a result of greater performance in our core business and certain
extraordinary items. This was offset in part by an increase in working capital as a result of an
increase in trade accounts receivables.
Our operating cash inflow decreased by €23.8 million, or 53.0%, from €44.8 million in the fiscal
year ended December 31, 2012 to €21.0 million in the fiscal year ended December 31, 2013. This
decrease was primarily due to an increase in working capital in the fiscal year ended
December 31, 2013 as a result of an increase in trade accounts receivables and project prefinancing.
b.
Investing cash flow
Our investing cash outflow decreased by €25.8 million, or 61.7%, from €41.9 million in the
September 30, 2015. This decrease was primarily due to lower cash outflows for investments in
shares of fully consolidated companies/divisions/business combinations (including EDAG GmbH &
Co. KGaA), partly offset by an increase in investments in tangible assets. Our total capital
expenditures increased by €3.5 million, or 20.4%, from €17.3 million in the nine-month period
ended September 30, 2014 to €20.8 million in the nine-month period ended September 30,
2015. This increase was primarily driven by refurbishment in buildings on third party properties.
Our investing cash outflow decreased by €29.8 million, or 47.8%, from €62.4 million in the fiscal
decrease was due in large part to a €30.0 million inflow from deposits from disposals in shares
of fully consolidated companies/divisions in the fiscal year ended December 31, 2014 as a result
of our disposal of our aerospace subsidiaries and various other subsidiaries during the fiscal year
ended December 31, 2014 (see “—II. Factors affecting results of operations—6. Acquisitions and
divestments”), whereas there were no such deposits for the fiscal year ended
December 31, 2013. The decrease in investing cash outflow was also due in part to lower cash
outflows for payments for investments in shares in fully consolidated companies, which
amounted to an outflow of €40.0 million in the fiscal year ended December 31, 2014 (related to
the assumption of debt of EDAG GmbH & Co. KGaA), as compared to an outflow of
€48.5 million in the fiscal year ended December 31, 2013. The decrease in investing cash outflow
was also offset in part by higher total capital expenditures (including payments for investments
in tangible, intangible and financial assets), which amounted to €25.3 million in the fiscal year
ended December 31, 2014 as compared to €22.3 million in the fiscal year ended
December 31, 2013. This increase was primarily driven by the greater number of our employees,
which required investments in software, hardware, office equipment and buildings.
Our investing cash outflow increased by €9.4 million, or 17.7%, from €53.0 million in the fiscal
increase was primarily due to the purchase of the BFFT Group. Our total capital expenditures
increased by €6.0 million, or 36.9%, from €16.2 million in the fiscal year ended
December 31, 2012 to €22.3 million in the fiscal year ended December 31, 2013. This increase
was primarily driven by the integration of the Rücker Group and the BFFT Group. As a
consequence of having more employees as a result of these integrations, additional/increased
investments in software, hardware, office equipment and buildings were required.
190
c.
Financing cash flow
Our financing cash flow changed by €37.8 million, from a cash outflow of €17.4 million in the
nine-month period ended September 30, 2014 to a cash inflow of €20.4 million in the ninemonth period ended September 30, 2015. This development was primarily due to an increase of
borrowing of short term financial liabilities due to related parties (VKE Versorgungskasse EDAGFirmengruppe e.V.).
Our financing cash flow changed from a cash inflow of €76.0 million in the fiscal year ended
December 31, 2013 to a cash outflow of €54.8 million in the fiscal year ended
December 31, 2014. This change was primarily due to repayments of current and non-current
financial liabilities of €31.9 million and €35.6 million, respectively, in the fiscal year ended
December 31, 2014, as well as fewer borrowings in the fiscal year ended December 31, 2014 as
compared to the fiscal year ended December 31, 2013.
Our financing cash flow changed from a cash outflow of €6.4 million in the fiscal year ended
December 31, 2012 to a cash inflow of €76.0 million in the fiscal year ended December 31, 2013.
This change was primarily due to an increase in an indirect loan of €192.8 million for financing
the purchase of the remaining shares of the Rücker Group and the BFFT Group in the fiscal year
ended December 31, 2013. In return the increase is offset in part by a repayment of a
shareholder loan of €57.8 million and by payment of dividends of €14.0 million to shareholders
in the fiscal year ended December 31, 2013.
d.
Free cash flow (FCF) – equity approach
Our free cash flow (FCF) – equity approach decreased by €2.6 million, or 8.6%, from an outflow
of €29.7 million in the nine-month period ended September 30, 2014 to an outflow of
€32.3 million in the nine-month period ended September 30, 2015. This increase in outflow was
primarily due to a decrease in operating cash flow, partly offset by lower cash outflow from
investing activities.
Our free cash flow (FCF) – equity approach increased by €65.5 million from a cash outflow of
€41.4 million in the fiscal year ended December 31, 2013 to a cash inflow of €24.1 million in the
fiscal year ended December 31, 2014. This increase was primarily due to a higher operating cash
flow, resulting mainly from higher earnings after taxes and deposits from disposals in shares of
fully consolidated companies.
Our free cash flow (FCF) – equity approach decreased by €33.2 million from a cash outflow of
€8.3 million in the fiscal year ended December 31, 2012 to a cash outflow of €41.4 million in the
fiscal year ended December 31, 2013. This decrease was primarily due to an increase in working
capital and decreasing deposits from disposals in shares of fully consolidated companies.
191
3.
Capital resources
The following table shows our available liquidity from cash and cash equivalents, lines of credit
and credit insurance lines from the unaudited condensed consolidated interim financial
information as of September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG as well as
from the audited consolidated financial information as of December 31, 2014 and December 31,
2013 and the audited combined financial information as of December 31, 2012 of EDAG
Engineering GmbH:
As of
September 30,
2015
(in € thousand)
(unaudited,
consolidated)
As of
December 31,
2014(1)
2013(1)
As of
January 1,
2013(2)
(audited,
unless
otherwise
(audited, unless otherwise indicated,
combined)
Cash and cash equivalents . . . . . . . . . . . . . . .
Credit bank lines (unaudited) . . . . . . . . . . . .
Credit insurance lines (unaudited) . . . . . . . . .
26,971
38,500
17,500
39,502
28,500
17,500
68,606
33,500
17,500
36,188
33,500
15,000
Total (unaudited) . . . . . . . . . . . . . . . . . . . . . .
82,971
85,502
119,606
82,188
information. For the fiscal year ended December 31, 2013, our aerospace business was classified as a “disposal group” under
IFRS 5, and it was disposed of on March 31, 2014.
(2) Data for the fiscal year ended January 1, 2013 on a combined basis and comprising the business of the Rücker Group with
Our credit bank lines and credit insurance lines are with third parties and give us access to
additional liquidity. We increased our lines of credit from €28.5 million on December 31, 2014
and €33.5 million on December 31, 2013 to €38.5 million as of September 30, 2015 to increase
our liquidity. We slightly increased our credit insurance lines during the year ended
December 31, 2013 but they have since remained stable.
Cash and cash equivalents were €27.0 million as of September 30, 2015 and €39.5 million and
€68.6 million as of December 31, 2014 and December 31, 2013, respectively. As of January 1,
2013, cash and cash equivalents were €36.2 million. In addition to these sources of liquidity, we
have also maintained a cash pooling agreement with the Selling Shareholder, which we agreed
with the Selling Shareholder to terminate prior to the settlement of the Offering. As of
September 30, 2015 and December 31, 2014, we had €0.8 million and €5.5 million, respectively,
of cash receivables from this cash pooling.
192
4.
Financial liabilities and other financial obligations
a.
Financial liabilities
The following table shows the financial liabilities from the unaudited condensed consolidated
interim statement of financial position as of September 30, 2015, the audited consolidated
statements of financial position as of December 31, 2014 and December 31, 2013 and the
audited combined statement of financial position as of December 31, 2012 of EDAG Engineering
GmbH:
As of
September 30,
2015
(unaudited,
consolidated)
(in € thousand)
Non-current financial liabilities . . . . . . . . . . . . . . .
Current financial liabilities . . . . . . . . . . . . . . . . . . .
Total financial liabilities
As of December 31,
2014
2013
160,919
28,729
189,648
162,003
4,858
166,861
197,737
35,648
233,385
As of
January 1,
2013
(audited,
combined)
6,001
117,948
123,949
As of September 30, 2015, our financial liabilities amounted to €189.6 million (€160.9 million
non-current financial liabilities and €28.7 million current financial liabilities) compared to
€166.9 million as of December 31, 2014 (€162.0 million non-current financial liabilities and
€4.9 million current financial liabilities), €233.4 million as of December 31, 2013 (€197.7 million
non-current financial liabilities and €35.6 million current financial liabilities) and €123.9 million
as of December 31, 2012 (€6.0 million non-current financial liabilities and €117.9 million current
financial liabilities). The majority of our financial liability relates to two long-term loans due to
affiliated companies taken out to finance the acquisition of the Rücker Group and the BFFT
Group (see “L. Business—XII. Material Contracts—1. Financing Agreements”).
The following table shows the maturity profile of our financial debt divided by type from the
audited consolidated financial information as of December 31, 2014 of EDAG Engineering
GmbH:
Term to maturity as of December 31, 2014
≤ 1 year
1-5 years
(in € thousand)
> 5 years
Total
Liabilities due to credit institutions . . . . . . . . . . . .
Liabilities from loans due to third parties . . . . . . .
Liabilities from loans due to affiliated companies
Liabilities from loans due to related parties . . . . .
Liabilities from financing leases . . . . . . . . . . . . . .
Liabilities from derivative financial instruments . .
.
.
.
.
.
.
3,325
7
1,213
139
38
136
3,025
10
158,800
—
168
—
—
—
—
—
—
—
6,350
17
160,013
139
206
136
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,858
162,003
—
166,861
b.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Financing leases
The Group has concluded financing leases and lease-to-buy contracts for various items of
technical equipment and operating and office equipment, as well as for a building complex,
with third-party lessors. The following schedule shows the net book values of the leasing objects
capitalized within the context of financing leasing activity from the audited consolidated
financial information as of December 31, 2014 and December 31, 2013 and the audited
combined financial information as of January 1, 2013 of EDAG Engineering GmbH:
As of December 31,
(1)
2014
(in € thousand)
(1)
2013
Other equipment, operating and office equipment . .
193
196
506
As of January 1,
2013(2)
(audited,
combined)
844
Rücker Group and the business of the BFFT Group for the full fiscal year. Furthermore, our aerospace business, which was
formerly part of the Rücker Group, was included in our audited combined financial information as of December 31, 2012. As
of December 31, 2013, our aerospace business was classified as a “disposal group” under IFRS 5, and it was disposed of on
March 31, 2014.
The net book value of our capitalized other equipment, operating and office equipment
decreased by €0.3 million, or 61.3%, from €0.5 million in the fiscal year ended December 31,
2013 to €0.2 million in the fiscal year ended December 31, 2014. This decrease was primarily
driven by a redemption of liabilities from financing leases which exceeded new liabilities from
financing leases.
The payment obligation resulting from finance leasing as of a given date is posted as a liability
in the amount of the net present value of the future minimum leasing payments. In subsequent
years, this liability will be reduced by the repayment portion as part of the leasing instalments.
The interest share of the payments was posted to the statement of comprehensive income. In
individual detail, the following table shows the future obligations result from the audited
consolidated financial information as of December 31, 2014 and December 31, 2013 and the
audited combined financial information as of January 1, 2013 of EDAG Engineering GmbH:
As of December 31,
As of January 1,
(1)
2013(2)
(1)
2014
2013
Minimum
Minimum
Minimum
leasing Interest Present
payments portion values payments portion values payments portion values
(in € thousand)
(audited, combined)
DUE DATE
Up to 1 year . . . . . .
1 to 5 years . . . . . . .
Over 5 years . . . . . .
52
198
—
14
30
—
38
168
—
182
275
86
23
42
5
159
233
81
465
422
109
37
50
11
428
372
98
Total . . . . . . . . . . . .
250
44
206
543
70
473
996
98
898
194
5.
Contractual obligations and commercial commitments
a.
Contractual obligations
The following table shows our contractual obligations and commercial commitments as
recorded in the unaudited condensed consolidated interim financial information as of
September 30, 2015 of EDAG Engineering Schweiz Sub-Holding AG as well as from the audited
consolidated financial information as of December 31, 2014 and December 31, 2013 and the
audited combined financial information as of December 31, 2012 of EDAG Engineering GmbH:
As of September 30,
2015
(in € thousand)
(unaudited,
consolidated)
As of December 31,
2014(1)
2013(1)
As of January 1,
2013(2)
(audited,
combined)
Current financial liabilities . . . . . .
contracts . . . . . . . . . . . . . . . . . .
Current accounts payable and
160,919
162,003
197,737
6,001
96
28,729
151
4,858
92
35,648
83
117,948
36,099
61,618
38,579
27,575
69,368
73,082
69,281
71,839
Total . . . . . . . . . . . . . . . . . . . . . . .
295,211
301,712
341,337
223,446
These contractual obligations decreased by €6.5 million, or 2.2%, from €301.7 million in the
fiscal year ended December 31, 2014 to €295.2 million in the nine-month period ended
September 30, 2015. This decrease was primarily driven by a decrease of our future liabilities
from construction contracts due to a decline of customer down-payments and prepayments and
our non-current financial liabilities due to an ordinary redemption of loan liabilities due to
credit institutions. This decrease was only partly offset by an increase of our current financial
liabilities due to an extension of a current, unsecured loan from VKE Versorgungskasse EDAGFirmengruppe e.V.
These contractual obligations decreased by €39.6 million, or 11.6%, from €341.3 million in the
2014. This decrease was primarily driven by a decrease of our non-current financial liabilities due
to an ordinary redemption of loan liabilities due to credit institutions as well as repayments of a
loan from ATON Group Finance GmbH. Furthermore, the decrease was driven by a decline in
current financial liabilities mainly due to an assignment of debt in the amount of €11.0 million
and a decrease of a loan from VKE Versorgungskasse EDAG-Firmengruppe e.V. in the amount of
€20.5 million in the fiscal year ended December 31, 2014. This decrease was mainly partly offset
by an increase of our future liabilities from construction contracts due to an increase of customer
down-payments and prepayments.
195
The following table shows our contractual obligations and commercial commitments as
recorded in the audited consolidated financial information as of December 31, 2014 of EDAG
Engineering GmbH by maturity:
Term to maturity as of December 31, 2014
þ 1 year
(in € thousand)
Non-current financial liabilities . . . . . . . . . . . .
Non-current accounts payable and other
liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current financial liabilities . . . . . . . . . . . . . . .
Future liabilities from construction contracts .
1-5 years
More than 5
years
Total
—
162,003
—
162,003
.
.
.
.
—
4,858
61,618
73,082
151
—
—
—
—
—
—
—
151
4,858
61,618
73,082
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
139,558
162,154
—
301,712
b.
..
.
.
.
.
Pension obligations
We maintain a company pension scheme for the benefit of our employees which takes the form
of defined benefit and/or defined contribution plans.
Defined contribution plans
Our defined contribution plans include benefits from state and private retirement insurers, to
which payments are made on the basis of statutory regulations, or on a voluntary basis.
Payments to defined contribution pension plans in the Group predominantly refer to
contributions to statutory pension schemes in Germany. For this type of plan, we have no
further payment obligations beyond the payment of the appointed contributions. In the fiscal
year ended December 31, 2014, we made contributions to defined contribution plans
amounting to €27.4 million (2013: €25.5 million; 2012: €25.5 million).
Defined benefit plans
Our defined benefit plans involve both direct benefits (direct pension commitments) and
indirect benefits made through VKE Versorgungskasse EDAG Firmengruppe e.V. (“VKE”).
The direct benefits under these plans are guaranteed life-long pension payments. In some cases,
this guarantees benefits at a fixed amount, while in others, benefits vary according to length of
service and employee’s salary. Old-age, disability and surviving dependents’ pensions are
assured.
VKE provides management services for the retirement pension schemes of Group companies.
The following Group companies use VKE to manage their retirement pension schemes (“Sponsor
Companies”):
Š
EDAG Engineering GmbH , Wiesbaden;
Š
EDAG Production Solutions GmbH & Co. KG, Fulda;
Š
EDAG Werkzeug + Karosserie GmbH , Fulda; and
Š
FFT Produktionssysteme GmbH & Co. KG, Fulda.
VKE’s exclusive function is to manage a support fund which grants voluntary, one-off, recurring
or ongoing benefits to beneficiaries pursuant to the VKE benefit plan in the event of
occupational incapacity or occupational disability, and during old age. Beneficiaries can be
employees and/or former employees of the Sponsor Companies, as well as their families
(spouses, children) and/or surviving dependants. Benefits also extend to persons with whom the
Sponsor Companies are, or have been, in an employment-type relationship.
EDAG Engineering GmbH no longer entered into pension commitments for employees recruited
on or after June 1, 2006. In accordance with the provisions of the pension scheme, employees
196
who are entitled to benefits receive old-age and surviving dependents’ benefits in the form of a
lump-sum payment. The benefits are financed through an external fund, with the fund assets
being re-invested in the form of loans in the sponsor companies.
Pension provisions
The following table shows our pension provisions from the audited consolidated financial
information as of December 31, 2014 and December 31, 2013 and the audited combined
financial information as of January 1, 2013 of EDAG Engineering GmbH:
As of December 31,
(1)
2014
(in € thousand)
(1)
2013
As of January 1,
2013(2)
(audited,
combined)
Present value of obligations financed through a fund . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . .
34,876
24,448
27,401
24,559
25,407
23,795
Financing deficit/surplus . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of obligations not financed through a
fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,428
2,842
1,612
11,930
9,176
8,889
Total deficit of the defined benefit obligations . . . . . . . .
Amount not recorded as assets due to asset ceiling . . . . .
22,358
—
12,018
—
10,501
197
Recognized pension provision . . . . . . . . . . . . . . . . . . . . .
22,358
12,018
10,698
Rücker Group, was included in our audited combined financial information as of December 31, 2012. As of
December 31, 2013, our aerospace business was classified as a “disposal group” under IFRS 5, and it was disposed of on
March 31, 2014.
Our recognized pension provisions increased by €10.3 million, or 86.7%, from €12.0 million in
2014. Our pension provisions were mainly influenced by the development of the discount rate
(changes in the financial assumptions) which increases or decreases the present value of
obligations financed through a fund and not financed through a fund. In the fiscal year ended
December 31, 2014 there were changes in the financial assumptions with an effect of
€9.6 million. In addition, the increase from December 31, 2013 to December 31, 2014 was mainly
related to an increase in ongoing service period costs of €1.4 million. The increase from January
1, 2013 to December 31, 2013 mainly resulted from an increase in ongoing service period costs
of €1.5 million.
IX.
1.
OFF-BALANCE SHEET ARRANGEMENTS
Sale-and-leaseback transaction
Pursuant to a sale-and-leaseback transaction, we entered into a sales agreement dated
December 12, 2014 to sell five buildings with a net book value of €22.5 million as of
December 12, 2014 to “Zweite FOM Objekt GmbH & Co. KG, Heidelberg” for a total purchase
price of €38.4 million which is recorded as other receivables as of December 31, 2014. Until the
final purchase price payment, we will hold 49% of the shares in “Zweite FOM Objekt GmbH &
Co. KG, Heidelberg”. The transfer of economic property took place on December 29, 2014. The
transaction resulted in a gain of €15.9 million in the financial year 2014 recorded in our other
income. At the same time, we entered into long-term leases with “Zweite FOM Objekt GmbH &
Co. KG, Heidelberg” (each with maturity December 31, 2029). These lease contracts are expected
to result in annual rental expenses totaling €3.1 million in the coming years. Also see “L.
Business—XII. Material Contracts—3. Agreements relating to Real Estate— b. Sale-and-leaseback of five properties in Fulda, Cologne, Ingolstadt and Recklinghausen.”
197
2.
Operating leases
Our obligations from non-cancelable operating leases mainly existed for commercial property
rental agreements, motor vehicles and technical equipment. As of December 31, 2014, the
expenses of operating leases posted to the profit or loss amounted to €26.7 million, as
compared to €24.6 million as of December 31, 2013 and €14.9 million as of December 31, 2012.
The following table shows the future minimum leasing payments from operating-leasing
business areas from the audited consolidated financial information as of December 31, 2014 and
December 31, 2013 and the audited combined financial information as of December 31, 2012 of
As of December 31,
(1)
2014
(in € thousand)
2013(1)
2012(2)
(audited,
combined)
Future expenses from reporting year +1 . . . . . . . . . . . . . . .
Future expenses from reporting year +2 to 4 . . . . . . . . . . . .
Future expenses from reporting year +5 et seqq. . . . . . . . .
22,663
36,694
38,956
16,781
21,094
7,862
14,720
15,800
3,412
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98,313
45,737
33,932
(2) Data as of December 31, 2012 on a combined basis and comprising the business of the Rücker Group. Data excludes the
business of the BFFT Group, which was acquired with effect for accounting purposes from January 1, 2013.
Of these, the following future minimum leasing payments existed which result from sale-andleaseback transactions from the audited consolidated financial information as of December 31,
2014 and December 31, 2013 and the audited combined financial information as of
As of December 31,
(1)
2014
(in € thousand)
2013(1)
2012(2)
(audited,
combined)
Future expenses from reporting year +1 . . . . . . . . . . . . . .
Future expenses from reporting year +2 to 4 . . . . . . . . . . .
Future expenses from reporting year +5 et seqq. . . . . . . .
3,983
15,140
31,900
450
1,801
463
450
1,801
914
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51,023
2,714
3,165
(2) Data as of December 31, 2012 on a combined basis and comprising the business of the Rücker Group. Data excludes the
business of the BFFT Group, which was acquired with effect for accounting purposes from January 1, 2013.
Obligations from non-cancelable operating leases mainly existed for commercial property
agreements, IT leasing, motor vehicles and technical equipment.
For the fiscal year ended December 31, 2014, no conditional lease payments recognized in profit
or loss were made, as compared to none for the fiscal year ended December 31, 2013 and
€12 thousand for the fiscal year ended December 31, 2012. As of December 31, 2014, there were
no expenses from sublease payments, as compared to €52 thousand as of December 31, 2013
and €50 thousand as of December 31, 2012.
198
X.
1.
QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
Risk management principles
In order to finance our business activities, we make use of financial instruments including bank
loans and overdraft credits, financing leases, debts from deliveries and services and loans. We
also have at our disposal various financial assets such as securities, accounts receivable, cash and
short-term investments resulting directly from our business activities.
With regard to these financial instruments, we are subject to risks resulting from changes in
exchange rates and interest rates, as well as to liquidity and credit risks. We aim to limit these
risks by means of on-going operative and finance-oriented activities as part of our financial risk
management, employing selected derivative and non-derivative hedging instruments. Generally,
security is provided only against risks that will affect our cash flow.
The derivative financial instruments employed by the Company primarily include foreign
exchange futures and interest rate caps. The purpose of the derivative financial instruments is to
provide security against interest and currency risks resulting from our business activities and our
funding sources. Derivative financial instruments are used solely as hedging instruments, and
are not used for trading or other speculative purposes.
The key goals underlying our financial policy are defined annually by the Executive Board and
are monitored by the Supervisory Board. The Group Treasury is responsible for the
implementation of the financial policy and for on-going risk management.
2.
Credit risk
Through our business and financing activities, we are exposed to the risk of default by
counterparties. We only enter into agreements with counterparties that we deem creditworthy.
We conduct a credit assessment of almost all of the customers who wish to purchase goods and
services on a credit basis. Our counterparties primarily consist of large corporations, particularly
international OEMs from the automotive industry. The credit risk of international OEM
counterparties is generally considered low, and as a result we do not subject them to any
separate monitoring of creditworthiness. The creditworthiness of non-OEM counterparties is
automatically monitored. Specific value adjustments are made to address any risk of default.
The maximum risk in the event of non-payment by a counterparty is reflected in the book values
of the financial assets recorded in our statement of financial position (including derivative
financial instruments with positive market values). As of December 31, 2014, there were no
significant agreements in existence that would reduce the maximum default risk (such as
offsetting agreements).
As of December 31, 2014, we were exposed to a maximum default risk of nil (December 31,
2013: nil; January 1, 2013: €3.2 million) as a result of financial guarantees given.
3.
Liquidity risk
The management of each individual Group company is generally responsible for monitoring that
entity’s solvency.
We seek to ensure that funding requirements are continually met by making use of overdraft
accounts, inter-company loans and leases. Individual Group companies send reports to the
parent company on a weekly basis so that the liquidity of the individual Group companies can
be monitored centrally.
The information in these reports is submitted to Group management on a weekly basis for risk
control purposes. Although we consider this liquidity risk to be low, we secure our liquidity by
way of lines of credit from external sources. We also maintain a cash-pooling agreement with
the shareholder. There is currently no indication of a potential risk of default on account of a
deterioration in the solvency of the Selling Shareholder. At the present time, the Selling
Shareholder has at its disposal a significant equity base, liquidity reserves and funding lines. The
Selling Shareholder maintains control functions to monitor our financial condition.
199
Until the third quarter of the fiscal year ended December 31, 2013, we sold certain customer
receivables to a factorer as an additional source of short-term financing. As a result, the risk of
default for receivables sold in this way was transferred directly to the factorer and was reduced
accordingly on our statement of financial position.
4.
Market risks
a.
Interest risks
Our business is primarily financed through fixed-interest loans from the shareholder or one of
its subsidiaries and/or related companies, as well as through the VKE Versorgungskasse EDAGFirmengruppe e.V. Because of this financing structure, we do not believe that we are subject to
any significant risk posed by fluctuations of market interest rates.
Changes to market interest rates of original, fixed-interest financial instruments do not affect
our results unless they are valued at their attributable fair values. Accordingly, no financial
instruments with a fixed interest rate valued at carried-forward acquisition costs are subject to
risk due to changes in interest.
As of December 31, 2014, we did not hold any variable interest-bearing financial instruments.
The interest rate of our overdraft liabilities is derived from a standard, fluctuating reference
rate and a company-specific credit margin. The interest rate for fixed-interest financial
instruments is defined only up to the maturity date of the given financial instrument. Our other
financial instruments are not interest-bearing, and therefore not subject to risk from changes in
interest.
b.
Currency risks
We are exposed to currency-related risks arising from financing and operating activities. We
hedge against foreign currency risks to the extent they could have a significant effect on our
cash flow. However, we generally do not hedge against foreign currency risks that would not
affect our cash flow, such as risks resulting from the conversion of assets and liabilities of
company units located abroad into our reporting currency.
Foreign currency risks from financing activities result from financial liabilities in foreign
currencies and foreign currency loans.
We use currency derivatives to convert financial obligations and intra-group loans denominated
in foreign currencies into the Group companies’ functional currencies.
As of December 31, 2014, we had hedged against currency risks relating to receivables and
liabilities denominated in USD, JPY, PLN, SEK and RUB. As a result of these hedging activities, we
were not exposed to any significant currency risks from financing activities as of December 31,
2014.
Individual Group companies conduct most of their business operations in the functional currency
of their domicile. As a result, we consider our currency risk from current operating activities to
be moderate. However, certain Group companies are exposed to currency risks in connection
with planned payments in currencies other than their own functional currency. In general, we
use currency derivatives to hedge these payments. As a result of these hedging activities, we
were not exposed to any significant currency risks in our operative segments as of December 31,
2014.
c.
Sensitivity analysis
For the presentation of market risks, IFRS 7 requires sensitivity analyses that show the effects of
hypothetical changes of relevant risk variables on profit or loss and shareholders’ equity. These
periodic effects are determined by relating the hypothetical changes in the risk variables to the
balance of financial instruments on a given reporting date. It is assumed that the balance on the
reporting date is representative of the entire year.
200
Currency risks as defined by IFRS 7 arise as a result of financial instruments being denominated
in a currency that is not the functional currency and being of a monetary nature. Differences
resulting from the translation of financial statements into our presentation currency are not
taken into consideration.
The currency sensitivity analysis is based on the following assumptions:
Š
Major non-derivative monetary financial instruments (i.e., liquid assets, receivables, interestbearing liabilities, finance lease liabilities and non-interest-bearing liabilities) are either
directly denominated in the functional currency, or transferred to the functional currency
through the use of derivatives. As a result, changes in exchange rates have no effect on results
or equity capital.
Š
We are subject only to currency risks from currency derivatives which are part of neither a
hedging relationship as defined by IAS 39, nor a hedging relationship with on-balance-sheet
underlying transactions (i.e., a natural hedge). These derivatives serve as hedges for planned
items. Exchange rate fluctuations in the currencies on which such financial instruments are
based affect other operating expenses or income, as any currency losses or gains from the
underlying transactions are also shown here (i.e., net gain or loss from the adjustment of
financial assets to fair value).
The following table shows the sensitivities of foreign currencies towards the Euro in the event
of a 10% appreciation or devaluation on the fair-value of the cover transaction in the foreign
currency:
As of December 31,
2014
(in € thousand)
2013
CURRENCY SENSITIVITIES
10% appreciation
EUR / USD . . . . . . . . .
EUR / JPY . . . . . . . . . .
EUR / HUF . . . . . . . . .
EUR / SEK . . . . . . . . .
EUR / RUB . . . . . . . . .
EUR / PLN . . . . . . . . .
105
13
—
ⳮ142
4
ⳮ46
89
ⳮ26
—
—
—
—
143
ⳮ52
ⳮ232
—
—
—
Total revaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ⳮ66
63
ⳮ141
.
.
.
.
.
.
ⳮ415
ⳮ1
—
159
ⳮ12
49
ⳮ34
22
—
—
—
—
ⳮ296
36
250
—
—
—
Total devaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ⳮ220
ⳮ12
ⳮ10
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2013
(audited,
combined)
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10% devaluation
EUR / USD . . . . . .
EUR / JPY . . . . . . .
EUR / HUF . . . . . .
EUR / SEK . . . . . .
EUR / RUB . . . . . .
EUR / PLN . . . . . .
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January 1,
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5.
Other price risks
We are not exposed to any significant risks relating to risk variables in the pricing of financial
instruments, such as pricing by stock exchange or indices.
XI.
CRITICAL ACCOUNTING POLICIES
The consolidated financial statements included in this offering memorandum have been
prepared on the basis of historical acquisition and production costs, except for information
relating to specific financial instruments, which are reported on the basis of the attributable fair
value.
201
The key accounting policies used to prepare the consolidated financial statements are as
follows:
1.
Realization of income and expenses
Sales revenues are measured at the attributable fair value for the consideration received or to
be received for the sale of goods and services within the context of the ordinary business
activity, less the price reductions and volume discounts granted by the Company. VAT and other
duties are not taken into account. Income is reported if the economic benefit is likely to accrue
to the Group, and the amount of the income can be reliably ascertained.
For the sale of goods and services, this corresponds to the point in time at which ownership and
risk are transferred, or the service is performed. Income from customer-specific production
orders is reported as income with reference to the degree of completion if the result of the
production order can be reliably estimated (i.e., the percentage of completion method). This
method is used only if the total income, any costs incurred up to the date of the statement of
financial position, any costs anticipated until the order has been completed and the degree of
completion can be reliably ascertained. The degree of completion is ascertained on the basis of
the costs incurred by the date of the statement of financial position as a percentage rate of the
total costs estimated for the given project. If the result of a production order cannot be reliably
estimated, income is only posted to the extent to which the costs incurred can be recovered
(i.e., the zero-profit method).
In the statement of financial position, the parts of the order for which income has been
accounted for with the percentage of completion method are posted to accounts receivable
after deducting any advance payments received. Expected losses from customer-specific
production orders are initially offset on the asset side with the status as of the reference date,
and the remainder is immediately posted in its full amount as pending loss.
If the sale of products encompasses an ascertainable partial amount for subsequent services
(i.e., multi-component contracts), the attributable sales revenues are accrued and released over
the term of the contract, affecting net income. Release is generally proportional to the
anticipated cost behavior pattern.
Interest income and expenses are posted on a pro rata temporis basis, applying the effective
interest method. Dividends are recorded when entitlement is legally effective.
Operating expenses are posted as costs when the service is utilized, or at the time they are
incurred.
The regulations and definitions set out in IFRS 15 are not yet mandatory but will replace the
contents of IAS 18 “Revenue” and of IAS 11 “Construction Contracts” beginning in 2018. According
to IFRS 15, revenue is to be recognized when the customer obtains control of the promised goods
and services, and can benefit from them. Under the current standard, the critical point is the transfer
of significant chances and risks set out in IAS 18 “Revenue”. The new standard establishes a five-step
model for recognizing revenue, requiring the identification of the contract with a customer and of
the performance obligations in the contract, the determination of the transaction price of the
contract and the price allocated to each separate performance obligation, and the recognition of
revenue for each performance obligation as soon as the promised goods have been delivered or
services rendered, or the customer has obtained control of the goods/services. Predetermined criteria
are applied to determine whether the satisfaction of a performance obligation occurs at a point in
time or over time. With multi-component contracts in particular, this could lead to significant
changes in evaluation, due to the different times at which revenue is recognized and to the
distribution of the transaction price to separate performance obligations. We in the process of
assessing the impact of IFRS 15 on our accounting practices.
2.
Research and development costs
For accounting purposes, research costs are defined as costs relating to targeted investigations
which are intended to deliver new scientific or technical findings and insights. Development
202
costs are defined as expenses relating to the application of research results or technical
knowledge in production, production processes, services or goods prior to the commencement
of commercial production or use. We primarily provide customers with development services
which can then be capitalized within the context of a customer project and subsequently
accounted for.
Research costs are immediately posted to the income statement. Development costs are
capitalized if they fulfil specific, precisely defined valuation criteria (IAS 38.57). Capitalization is
effected if the development activity is sufficiently certain to lead to future inflows of funds
which will also cover the corresponding development costs.
Production costs include directly attributable costs and directly attributable material and
production overheads, and also interest on borrowed capital where applicable.
Depreciation begins on completion of development, when the asset is available for use.
Depreciation is on a straight-line basis over the period during which sales revenues are
anticipated. During the development period, in which the asset is not yet in use, it is reviewed
annually with regard to impairment.
3.
Other intangible assets
Intangible assets are posted as per IAS 38 (“Intangible Assets”), and capitalized accordingly if
(a) the intangible asset is identifiable (i.e., it is separable or results from a contractual or other
right), (b) it is likely that the future economic benefit (e.g., liquid funds or other benefits, such
as cost savings) which results from the asset which will flow to the Company and (c) the costs of
the intangible asset can be reliably measured. Our intangible assets include customer relations,
concessions, industrial property rights and similar rights, IT software, goodwill and capitalized
development costs.
Intangible assets acquired for consideration are capitalized at acquisition cost and written off
over their useful life. The depreciation of intangible assets, with the exception of goodwill, is
always carried out on a straight-line basis, over the following periods:
Asset
Years
Customer relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized orders on hand . . . . . . . . . . . . . . . . . . . . . . .
Capitalized development services . . . . . . . . . . . . . . . . . .
Concessions, industrial property rights and similar rights
IT software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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8 – 10
1
3–5
4–6
3–8
Depreciation begins as soon as the asset can be used (i.e., when it is at the location and in the
condition necessary for it to be capable of operating in the manner intended by management).
Impairments are accounted for by means of unscheduled depreciation. Should reasons for
unscheduled depreciation be discontinued, corresponding write-ups are carried out to the
recoverable amount, which must not exceed the acquisition costs carried forward.
The development costs for a project are only capitalized as an intangible asset if the technical
implementation, the intention of completion and the utilization or sale of the intangible asset
can be demonstrated. Production costs cover the directly and indirectly attributable costs, and,
in the case of qualified assets in accordance with IAS 23, borrowing costs incurred during the
production period. These costs are amortized on a straight-line basis over their estimated useful
life, which is not to exceed five years.
In cases in which no own intangible asset can be recognized, the development costs are
recognized as expenses in the period in which they occur.
Goodwill is checked for possible impairment once a year. In the event of incidents or changed
circumstances indicating a possible reduction in value, the impairment review is to be carried
out more frequently.
203
4.
Impairment
At the date of each statement of financial position, or more frequently if incidents indicate the
necessity, we check the book values of our intangible assets and property, plant and equipment
to determine whether or not there is any evidence indicating impairment. If impairment is
indicated, the recoverable amount of the asset in question is ascertained and compared with its
book value to determine the value of any adjustment that might be necessary. If it is not
possible to determine a recoverable amount for an individual asset, the recoverable amount is
determined for the narrowest identifiable group of assets which generates cash and to which
the individual asset can be allocated (“cash generating units”).
The goodwill value or company value is then divided and assigned to the cash generating unit,
and recoverability is checked at this level. The cash generating unit residual book value is
compared with the recoverable amount (i.e., with the greater of net sales price or value in use).
The net sales price is the revenue which can be achieved by selling an asset in a transaction
using market conditions between two qualified parties willing to enter into a contract (i.e.,
attributable fair value), less disposal costs. We first determine the value in use in the course of
the impairment test. If the value in use is lower than the book value, the net disposal value after
deduction of the disposal costs is determined. The cash generating unit’s value in use is equal to
the cash value of the cash flow which, taking into account the continual usage of the strategic
business unit and its disposal, can be expected at the end of its useful life. Payment prognosis is
based on the current, long-term plans of the Group. The planning period is three years. The cost
of capital is calculated as the weighted average of the equity and debt capital costs. The primary
factor in this calculation is the proportion of equity and debt capital costs over the total capital.
The equity cost rate is determined with the Capital Asset Pricing Model, from a zero-coupon
bond interest rate with a time to maturity of 30 years plus a risk premium equivalent to one of
the separate cash generating units. Return on equity for the fiscal year ended December 31,
2014 was 9.70% (2013: 10.60%; 2012: 9.40%). For the fiscal year ended December 31, 2014, the
borrowing costs used amounted to 1.33% (2013: 2.45%; 2012: 2.45%), representing long-term
funding conditions. Both components were derived from information on the capital market and
represented an interest rate before tax. The resulting weighted average cost of capital for the
fiscal year ended December 31, 2014 was 9.00% (2013: 10.20%; 2012: 9.05%). There are no
specific capitalization rates for the segments, as the peer group is identical in all cases.
The planning is based on expectations with regard to the future development of the global
economy, on assumptions derived from the development of the engineering market, and on
concrete customer commitments relating to individual projects. A perpetuity growth rate of 1%
was applied for the fiscal year ended December 31, 2014 (2013: 1%).
In cases in which the book value of the cash generating unit is higher than its recoverable
amount, there is a depreciation loss in the amount of the difference. Taking the amount of this
adjustment, which is posted as expense, the goodwill of the given strategic business unit is
amortized. Any remaining sum is distributed across the other assets of the relevant strategic
business unit in proportion to their book values. The following table shows our cash generating
units along with their goodwill:
As of December 31,
2014
(in € thousand)
2013
2012
(audited,
combined)
Vehicle Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electrics/Electronics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,340
185
19,378
44,340
185
19,378
44,340
185
3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63,903
63,903
44,528
204
For the fiscal years ended December 31, 2014, 2013 and 2012, there was no need for
adjustments to be made to goodwill. Even if the equity cost rate increased by 100 basis points,
there would still be no need for any adjustment to be made to the other cash generating units.
If the reasons for unscheduled depreciation cease, corresponding write-ups are carried out.
Write-ups are only carried out if changes have been made to the estimates used to determine
the recoverable amount since the last time the expense incurred for impairments was recorded.
In this case, the book value of the asset is increased to its recoverable amount, but not more
than its carried-forward acquisition cost without taking into account any expense for
impairment. Unscheduled depreciation of goodwill is not corrected by means of write-ups.
Unscheduled depreciations and write-ups are recorded as operating results in the statement of
comprehensive income if continued operations are involved. However, this does not apply to
newly rated assets if the profit/loss arising from the re-evaluation is recorded under equity. In
this case, the depreciation is recorded in equity up to the amount from a previous re-evaluation.
5.
Provisions
According to IAS 37, a provision (a debt the maturity and/or amount of which is uncertain) is
created if a current legal or factual obligation resulting from past events exists vis-à-vis third
parties, it is likely that the settlement of the obligation will result in an outflow of resources and
the amount of the provision can be reliably determined.
Provisions are valued at their anticipated repayment amount and are not offset against refund
claims. Provisions that are based on a large number of similar types of events are accounted for
at their expected value. All non-current provisions (with a term of more than one year) are
posted with the anticipated, discounted amount to be paid on the date of the statement of
financial position. The amount to be paid also includes the cost increases to be taken into
account on the date of the statement of financial position.
If many similar types of obligations exist, as in the case of a statutory warranty, then the
probability that an outflow will be required in settlement is determined on the basis of this
group of obligations. A provision is also posted as a liability if the probability of an asset
impairment is negligible in relation to an individual obligation included in such a group of
obligations.
6.
Pensions and other post-employment benefits
We have both defined benefit and defined contribution-based pension plans. Defined
contribution-based pension plans require us to pay fixed contributions into a non-Group
company (i.e., a fund). We are under no legal or actual obligation to pay additional
contributions if the fund fails to have sufficient assets to meet the pension entitlements of all
employees from the current and previous fiscal years. By contrast, defined benefit plans typically
define a pension benefit volume that the employee will receive on reaching retirement age,
depending on one or more factors such as age, length of service and salary.
The provision for defined benefit pension plans recognized in the statement of financial
position corresponds to the net present value of defined benefit obligations on the date of the
statement of financial position, less the fair value of the plan assets. The defined benefit
obligation is calculated annually by an independent actuarial expert using the projected unit
credit method. The accounting valuation of the obligations is based on various estimates.
Assumptions are made in particular with regard to long-term trends in the development of
salaries and pensions, and to average life expectancy. Assumptions relating to salary and
pension trends are based on developments observed in the past, and also take into account
country-specific interest and inflation rates and relevant developments in the labor market.
Acknowledged biometric bases for calculation form the basis for estimating average life
expectancy. The interest rate used to discount the future payment obligations is derived from
premium corporate bonds with corresponding currencies and maturities.
205
Re-evaluations based on experience-related adjustments and amendments to actuarial
assumptions are recognized in other comprehensive income (in equity) in the period in which
they occur. Adjustments to an employment period are expensed immediately.
With the exception of the interest components, which are recognized in the financial result,
pension costs are posted under personnel costs.
With defined contribution plans, we pay premiums to public or private pension insurers on the
basis of a legal or contractual obligation, or on a voluntary basis. We have no further payment
obligations beyond payment of the premiums. The premiums are recognized in personnel
expenses on maturity. Prepaid contributions are recognized as assets to the extent that there is
a right to repayment or a reduction in future payments.
7.
Estimates (assumptions)
Presentation of the consolidated financial statements in accordance with IFRS requires qualified
estimates for several items from the statement of financial position which have an effect on the
basis and valuation in the statement of financial position and statement of comprehensive
income. The amounts that are actually realized can deviate from these estimates. These
estimates relate to ascertaining the useful life of property, plant and equipment and intangible
assets that are subject to wear and tear, the measurement of provisions, the valuation of
investments and other assets or liabilities. Although adequate account is taken of existing
uncertainties during valuation, actual results can still deviate from the estimates.
In the following situations, the assumptions made on the date of the statement of financial
position are of particular significance:
Š
The estimate of order costs and income is an important criterion for realizing profit according
to performance progress pursuant to IAS 11. The result of a construction contract can only be
reliably estimated if the economic advantages arising from the contract are likely to go to the
Company. Assumptions are also used as the basis on which probability is assessed.
Management continually reviews all estimates required for construction contracts, adjusting
them wherever necessary.
Š
Deferred tax assets are also recorded for tax losses carried forward. Their viability depends on
future taxable results of the respective Group company. If there is any doubt regarding the
realization of losses carried forward then no deferred taxes are posted.
Š
Pension provisions are influenced by assumptions regarding the future development of wages
and salaries or pensions, as well as by the interest, portfolio structure and anticipated
performance of the plan assets of pension funds. If the assumptions made fail to materialize,
this will result in an actuarial surplus or shortfall, which is offset with the retained earnings
and does not affect income.
Š
Other provisions also cover risks from legal disputes and legal action. In addition to an
assessment of the situation and claims awarded in similar cases, the results of comparable legal
actions and independent legal opinions are also taken into consideration, as are assumptions
regarding the probability of occurrence and the scope of possible claims, in order to determine
the amount of a provision. Actual costs can deviate from these estimates. When discounting
non-current provisions, assumptions are made regarding the interest rate to be used.
Š
Unscheduled amortization (impairments) on assets is carried out in the case of impairment. An
impairment test is carried out for goodwill and intangible assets with an indefinite useful life
if specific events indicate a possible impairment, but in any event at least once a year. In the
impairment test, the carried-forward book values of the assets are compared with the
recoverable amount of the assets. The recoverable amount is the higher of the net disposal
price or value in use of the asset. In order to determine the value in use, it is necessary to
estimate and discount cash flows. The estimated cash flows and the assumptions made are
based on whatever information is available on the date of the statement of financial position,
and can deviate from actual developments.
206
Š
Assets, liabilities and provisions held for sale are subject to two fundamental uncertainty
factors: first, the way in which negotiations develop, with possible loss of control; and second,
changes in value from ongoing activities, with possible loss of control.
Š
When accounting for leases, an assessment must be made of whether the main opportunities
and risks associated with the ownership of the property have been transferred. On the basis of
this assessment, the leased object is then allocated to either the lessee or the lessor. If they are
being recognized for the first time, assets and liabilities from finance leases are recorded at
the lesser of fair value or the cash value of the minimum leasing payments. The determination
of fair value is regularly associated with estimates regarding the cash flows resulting from
utilization of the leased object and the discount rate used.
Š
The useful lives of depreciable assets are determined on the basis of the anticipated usability
of the assets and are based on estimates. Empirical values for comparable assets are used as a
basis for orientation. The estimated service lives of intangible assets and property, plant and
equipment are examined at the end of each fiscal year and adjusted as necessary.
XII. INFORMATION FROM THE AUDITED OPENING STATEMENT OF FINANCIAL POSITION AS OF
NOVEMBER 2, 2015
Selected information from the audited opening statement of financial position of the Company
in accordance with IFRS as of November 2, 2015 is presented below. The opening statement of
financial position is included on pages F-132 et seqq. in the financial section.
As of November 2,
2015
(in € thousand, converted at an exchange rate of CHF 1.09 as of November 2, 2015)
(audited)
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES & EQUITY
Share capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reserves . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . .
Total Equity . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . .
Total equity and liabilities . . . . . . . . . . . . . . . . .
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920
920
920
920
ⳮ80
0
840
80
80
920
Equity consists of the fully paid-in share capital in the amount of €920 thousand (converted at
an exchange rate of CHF 1.09 as of November 2, 2015 as shown in the audited opening
statement of financial position of the Company as of November 2, 2015) as of November 2,
2015. For information on the contemplated Contribution see “C. The Offering—I. Subject Matter
of the Offering”.
207
K.
I.
MARKETS AND COMPETITION
OVERVIEW
Engineering services have become an important pillar contributing to the success of the
automotive industry. OEMs are increasingly reducing their degree of vertical integration by
transferring tasks and responsibilities to a variety of players along the value chain. For example,
they are sourcing vehicle components from suppliers and outsourcing research and development
(“R&D”) activities to ESPs like EDAG.
Within the automotive value chain, there are a number of development activities which, in parts
or their entirety, can be carried out by ESPs. For instance, ESPs are often involved in early-stage
concept development (approximately 60 months prior to start of production), where new
vehicles or technologies are defined. Likewise, they may also play an important role in the
supervision of serial production (typically 84 or more months after start of production), where
the focus typically lies on continuous functional or cost-driven production advancements, as well
as model facelifts (i.e., mid-generation refresh of the vehicle, which often include usually minor
styling alterations and engine upgrades) and derivative development. Between the two
antipodes of concept development and series production management, ESPs are generally
involved in the design of concept/show cars, interior and exterior design, component
development and systems integration as well as simulations and testing. Smaller ESPs thereby
tend to develop components, modules and systems, while larger ESPs such as EDAG are also
capable of developing entire vehicles. Apart from product and process development, ESPs also
provide complementary services such as cost calculations and budgeting, technical
documentation, project management or configuration of production facilities.
The global automotive ESP market reached a value of €15.3 billion in 2014 and is expected to
grow at a CAGR of 6.7% to a value of €22.6 billion in 2020. In 2014 the top 10 largest ESPs
contributed €5.3 billion to the overall market and – due to certain market dynamics described
below – are expected to grow at a CAGR of 9.9% to a value of €8.4 billion in 2020 (source: A.T.
Kearney Report).
II.
THE CHARACTERISTICS OF THE AUTOMOTIVE INDUSTRY AND ITS EFFECTS ON THE ESP
MARKET, IN PARTICULAR WITH REGARD TO GERMANY
Although the automotive ESP market is not directly linked to vehicle production volumes, the
development of global vehicle markets nevertheless impacts OEMs and suppliers and thus,
indirectly, also ESPs. Automotive sales and production volumes depend on customer demand,
which in turn is influenced by a confluence of macroeconomic and individual factors, including
the economic environment, consumer confidence, changing demographics (growing population,
increase of median age and urbanization), levels of disposable income and availability of
consumer finance. Regulation and government policies, such as the “scrappage” schemes
introduced to promote the replacement of old vehicles in the United States and Europe as a
reaction to the financial crisis in 2009, also typically have a temporary impact.
In 2014, approximately 87.4 million passenger cars and light-commercial vehicles were produced
worldwide compared to 67.6 million units in 2008 (CAGR 2008-2014: 4.4%). Global car
production is expected to reach 102.8 million units in 2020, which represents a 2.7% CAGR for
the period from 2014 to 2020 (source for all production figures: IHS/Global Insight).
Despite a geopolitically tense environment, the global automotive industry continued to grow
in 2014. The size of the global car market in terms of units produced increased with the three
largest markets of China, the USA and Western Europe recording growth. Even in Western
Europe a positive development was recorded after five years of negative growth, with new
registrations rising by 5% to 12.1 million cars. German OEMs produced almost 15 million cars
last year, 9.3 million of which were manufactured at sites outside Germany and 5.6 million of
which were produced domestically. One in five cars sold in 2014 belonged to a German brand
(source: VDA Annual Report 2015).
208
For many years, the German automotive industry has been the most important industrial branch
in Germany. Today, the German automotive industry contributes substantially to the German
economy and the country’s competitiveness in international markets, accounting for 13% of
Germany’s GDP in 2013 (source: berylls/VDA study; includes cars, commercial vehicles, trailer,
platforms, components, suppliers and ESPs). The success of the German automotive industry is
predominantly driven by innovation and high quality engineering which are also key aspects
that influence the ESP market on a global basis.
1.
Innovation and R&D expenditure
Over the last 50 years, several groundbreaking innovations in the fields of safety, fuel efficiency,
CO2 emissions, and connectivity can be associated with the German automotive industry. These
include the airbag, Anti-lock Braking System (ABS), Electronic Stability Program (ESP), Turbo
Diesel Injection (TDI), catalytic converter, dual-clutch transmission, aluminum and carbon bodies,
Advanced Driver Assistance Systems (ADAS) and recent developments in autonomous driving.
“Engineering Made in Germany” has therefore become a strong selling point, which, among
other factors, is a result of Germany’s success and innovation leadership in the automotive
industry.
In 2014, the automotive industry was Germany’s most research-intensive sector. In-house R&D
spending amounted to €17.6 billion. Compared with 2013, the German automotive industry
increased its R&D expenditure by 6% and represented almost one third (31%) of the German
economy’s total R&D expenditure. The German automotive industry accounts for a third
(34%) of the industry’s total worldwide R&D expenditure (source: VDA Annual Report 2015).
In addition to boosting the efficiency of the conventional combustion engine, reducing CO2
emissions and optimizing (production) processes, R&D efforts focus on alternative drive systems,
e-mobility, increased vehicle safety, vehicle networking and automated driving as well as the
development of assistance systems. The German automotive industry is investing significantly in
these new technologies (source: VDA Annual Report 2015).
On a global basis, R&D expenditure, as a percentage of total revenue, has proven to be more or
less stable over the last cycle (as shown in the chart below for the period from 2007 to 2014)
ranging between 3.3% and 4.3% of global OEMs’ annual revenue (source: A.T. Kearney Report).
Meanwhile, R&D spending of the five major OEMs in Germany (Audi, Porsche, Volkswagen
group (excluding Audi and Porsche), BMW and Daimler), as a percentage of total revenue,
exceeded overall industry levels on a consistent basis, ranging between 4.4% and 5.2% and
reflecting a focus on technologically leading, high-quality cars.
R&D expenditures (% of revenues)
4.9%
4.5%
4.4%
0.7%
0.7%
3.8%
3.7%
5.0%
5.0%
4.7%
5.2%
4.7%
0.6%
1.1%
1.0%
1.3%
1.7%
3.4%
3.3%
2012
2013
1.4%
German OEMs1
3.7%
OEM average
expenditure
4.3%
2007
2008
3.8%
2009
2010
3.7%
2011
1. Audi, Porsche, VW group (excl. Audi and Porsche), BMW, Daimler
Source: CapitallQ, A.T. Kearney
Source: A.T. Kearney Report
209
2014
In 2014, these five major OEMs in Germany spent a total of €23.4 billion cash on R&D compared
to €13.9 billion in 2010, representing a CAGR of 14% in the period from 2010 to 2014 (source:
A.T. Kearney Report).
German OEM Cash R&D expenditure1 (€ bn)
23.4
+14%
22.0
19.1
16.2
13.9
2010
2011
2012
2013
2014
1. Audi, Porsche, VW group (excl. Audi and Porsche), BMW, Daimler
Source: Evercore ISI, CapitellQ, Corporate reports, A.T. Kearney
Sources: A.T. Kearney Report
In-house R&D spending is supplemented by contracted-out R&D work, such as to R&D service
providers (e.g. ESPs) or universities but within the industry as well. In total, this external R&D
expenditure amounted to €8.2 billion in 2013 (source: VDA Annual Report 2015). In addition to
their own efforts, German automotive industry companies therefore rely heavily on external
R&D know-how, illustrating the major importance of the sector’s strong R&D networking and its
influence on the ESP market.
2.
Engineering Services
Another distinguishing feature of the German automotive industry is the division of labor and
the employment of external engineering services. Due to a structural shift in the industry, OEMs
increasingly focus on their core competencies while outsourcing a significant portion of
automobile design and production to external suppliers. Globally, automobile industry
participants not including OEMs represented approximately 75% to the automotive value chain
in 2014 (source: berylls/VDA study). Today, the complexity of the development and production
of an automobile, the extremely short development period and increasing overseas production
all require a substantial division of labor, flexibility and efficiency. The optimal use of personnel
is a central factor for success and essential to maintaining a competitive position (source: VDA
Annual Report 2015).
A comparable shift can be observed in the allocation of R&D work. ESPs first became involved in
vehicle development at the beginning of the 1970s. Since then, ESPs have come to contribute an
increasing portion of the value added along the automotive value chain. Particularly over the
last decade, ESPs experienced disproportionate growth driven by adjustments in the division of
labor in the automotive industry and OEMs’ pursuit of efficiency. Today, ESPs take over
development tasks that were previously the domain of the vehicle manufacturers themselves
and make critical contributions to improving the efficiency of the entire value chain.
Accordingly, ESPs’ scope of operations encompasses a broad range of engineering services,
including the development of vehicle components, modules and systems (source: VDA Annual
Report 2015). In Germany alone, ESPs employ approximately 50,000 engineers and technicians,
which compares to approximately 40,000 R&D employees at the top five German OEMs (Audi,
Porsche, Volkswagen group (excluding Audi and Porsche), BMW and Daimler) (source: berylls/
VDA study). As a consequence, ESPs are firmly anchored within the OEM value chain, operating
210
alongside OEMs and suppliers in both premium and mass market segments, as shown by the
contribution of ESPs to the automotive value chain in the area of R&D (see “K. Markets and
Competition—III. Key Benefits of Engaging Engineering Service Providers” below).
In our view, many of the current development programs of OEMs would not be feasible without
the involvement of ESPs due to limitations on in-house engineering capacity and a reluctance on
the part of many OEMs to add additional, usually highly-paid and full-time R&D personnel.
III.
KEY BENEFITS OF ENGAGING ENGINEERING SERVICE PROVIDERS
In particular, the following benefits characterize the symbiotic relationship between automotive
manufacturers and ESPs:
Š
Link between automotive manufacturers and their suppliers: ESPs often function as link
between OEMs and suppliers, with distinct benefits for both parties resulting from the
integration of ESPs into the development value chain.
Š
Local presence: Larger ESPs often maintain offices close to the development and production
facilities of their most important customers, which allows them to access their customers’
work sites when necessary and to fit smoothly into their customers’ production processes.
Š
Development of specific know how: ESPs provide additional and special development knowhow by pooling their expertise from a variety of projects for their customers.
Š
Personnel flexibility: ESPs provide significant resources in terms of engineers and technicians,
allowing customers to adjust their R&D resources and maintain a flexible cost structure.
Personnel management is a core competence of ESPs, often characterized by strong and
focused recruitment activities and the ability to easily allocate employees from one customer
to another. As a result, ESPs are well-placed to provide a sufficient amount of resources at
high quality in a timely manner (source: berylls/VDA study).
Š
Cost benefits: Smaller overhead structures, more flexible working hours and leaner social
security arrangements as well as leaner overall processes are among the factors that allow
ESPs to generally operate more cost efficiently than OEMs. At the same time, large ESPs
increasingly take on the development risk, further reducing the R&D requirements and costs
of customers. According to a project conducted by A.T. Kearney in 2011, amongst other
factors, R&D cost flexibility and access to necessary engineering and functional expertise are
the key motivations for OEMs to outsource R&D (source: A.T. Kearney Report). The biggest
cost factor for ESPs are personnel expenses (according to our own estimates approximately
60%) and expenses for external services (according to our own estimates between 10% and
12% of total costs). However, the substantial share of external services provides flexibility to
address fluctuations in capacity utilization.
We believe that our size, dedicated workforce, know-how and efficient processes allow us to
address all these motivations.
IV.
GLOBAL MEGATRENDS DRIVING R&D ACTIVITIES AND THE DEMAND FOR ENGINEERING
SERVICES
We believe that the development of the automotive ESP market is positively influenced by
global megatrends driving R&D needs at the OEM and supplier level, and thus in turn demand
for engineering services. These trends can be summarized in industry specific and ESP market
specific trends.
1.
Industry Specific Trends
Individualization (customizing and niche models)
The number of vehicle models and derivatives offered by global OEMs has increased steadily in
the past (source: A.T. Kearney Report). As a result of rapid advancements in technology as well
as increasingly comprehensive vehicle configuration and upgrade options, OEMs today
211
continuously launch new models and derivatives with comprehensive configuration options. The
increase in number of different car models offered per brand is generally accompanied by a
shortening of the model life cycles. The preference for individualization drives the availability of
vehicle configurations and vehicle complexity.
Cars increasingly feature new technologies, new materials and IT in an attempt to offer
customers a differentiated experience and new usage options. Despite the proliferation of
models, vehicle brands and designs remain an expression of personality and status.
Consequently, we believe that individualization is nowadays also a key topic in the mass market
segment.
Environmental efficiency (energy efficiency and lightweight construction)
Due to increasing environmental awareness, we expect the global tightening of emissions
regulations to continue, with the EU and the USA leading the way in terms of CO2 emission
targets, which will further drive the need for engineering services, especially solutions for CO2
emission and weight reduction. Environmentally-friendly vehicles can be developed, inter alia,
via innovative powertrain solutions, electric mobility, lightweight construction and increasing
use of electronic components. Electric mobility, in particular, requires innovative solutions with
respect to intelligent charging systems, layout and integration of electric drive systems and
energy storage units as well as vehicle energy and battery management systems. Weight
reduction can be achieved via multi-material systems comprising aluminum, composite,
magnesium or even textile carbon-fiber reinforced plastic solutions. Automotive electronic
components also help achieve this goal, as they are considered more fuel-efficient compared to
traditional mechanic, pneumatic or hydraulic solutions and allow for lower fuel consumption
based on smart sensor technology. In addition, environmental protection considerations and the
growing density of traffic in urban areas, combined with rising costs for car and freight
transportation, may encourage private and business travelers to make increasing use of
innovative mobility concepts.
Connected cars (connectivity and autonomous driving)
The demand for connectivity among vehicles and traffic infrastructure as well as the trend
towards fully automated driving supports the trend towards increased electronics in cars. The
rising electronic content in vehicles and the increasing requests for integrated solutions require
enhanced development capabilities around software, connectivity, sensor technology, battery/
energy management and electrical and electronic (“E/E”) integration. Innovative functions and
design components that are driven by E/E increasingly lead to further development tasks in
traditional fields such as chassis, exterior, interior and conventional power transmission. In
addition to drastically rising technical requirements for ESPs in the area of E/E, we believe that
the field of car-IT offers further market opportunities for ESPs with competence beyond the
automotive area, e.g., so-called “big data” solutions (i.e., predictive analytics used on large data
sets to extract value) or consumer electronics. We expect that powertrain electrification will
accelerate the shift of value-added from hardware to software as well as drive the demand for
integrated electronics solutions. The powertrain and the E/E segments are expected to show the
strongest growth within the automotive ESP market over a period from 2014 to 2020, at a CAGR
of 9.6% for powertrain and 9.3% for E/E (source: A.T. Kearney Report).
New mobility concepts (new mobility concepts and market entrants)
The current trend towards urbanization and the emergence of megacities drive the demand for
innovative mobility concepts. The worldwide growth in urbanization and megacities is pushing
transport routes to the limits of their capacity. By 2050, it is forecast that 70% of the world’s
population will live in cities and the number of automobiles on the roads will have doubled. The
challenge OEMs and ESPs thus face is to balance functioning mobility in cities with maintaining
quality of life for the population living there. Driver assistance systems and automated driving
will play a central role in uniting these two interests. The networked automobile will offer
212
greater safety, efficiency and reduced driver strain, but will also be more convenient due to
innovative services (source: VDA Annual Report 2015). Furthermore, new concepts to cope with
urbanization and the rising number of megacities include car sharing and innovative mobility
solutions and OEMs and ESPs are already adapting to specific requirements for car sharing
vehicles (e.g. six passengers, foldable seats, modularity, durability, rapid exchangeability of worn
parts, simple controls, etc.).
The changing concept of mobility and the accompanying advancement of the networked
automobile also provide opportunities for potential new market entrants such as Chinese OEMs,
Apple, Google and Uber who may profit from their individual market positions.
Smart production planning (Industry 4.0)
Industry 4.0 is the next stage of evolution in production technology. Robots, production
equipment and logistics systems are linked together with the help of the Internet of Things, so
that future production (cyber-physical systems) will be able to offer optimum resource allocation
and extreme flexibility, in the sense of the “smart” factory. Products are becoming more and
more intelligent, and know not only their own production processes but also possible
adjustments to these procedures. The creation of intelligent manufacturing networks through
the IT connection of machines, workflows and systems results in serious changes – not only for
machine and plant construction. We believe existing automobile development and production
processes will also change, as levels of integration in business and value adding processes
between the involved parties become increasingly more pronounced.
These industry specific trends, individualization, environmental efficiency, connected cars, new
mobility concepts and smart production planning, have a particularly strong influence on the
German automotive market due to Germany’s strong presence of premium OEMs (source:
Roland Berger study) which focus on these trends and allocate their R&D budget to them. In the
recent past, we have established four Competence Centers specializing in the areas relating to
“Lightweight Construction”, “E-Mobility”, “Car IT” and “New Production Technology” to
address these global mega trends.
2.
Global Trends Driving the ESP Market
Consolidation
The ESP market has seen a consolidation trend over the past few years, resulting in market share
growth for the largest ten players, which also benefitted us. Whilst the top 10 players accounted
for 27% of the total market in 2010, their combined market share already reached 34% in 2014.
A key driver of consolidation are OEMs’ requests for large-scale project capabilities and full
vehicle competence as they outsource engineering projects to ESPs. This trend is expected to
continue in the foreseeable future with the top 10 players forecast to reach a market share of
37% by 2020 (source: A.T. Kearney Report).
213
Automotive ESP market consolidation Top 10 (€ bn)
22.6
CAGR
2010-2020
6.5%
8.4
+9.9%
14.1
+5.0%
15.3
12.1
5.3
3.3
Market
Share
8.8
10.0
2010
2014
2020
27%
34%
37%
Top10 ESP player
Other ESP
1) 2014-2020 does not include M6A
Source:, A.T. Kearney
Outsourcing
The automotive ESP business is increasingly driven by OEMs focusing on their core competence,
while outsourcing development tasks that are increasingly complex but not regarded as
strategic. This is especially the case in Germany, given the strong presence of premium
automotive OEMs. ESPs are often able to handle these tasks faster and more efficiently than the
OEMs themselves (source: berylls/VDA study, March 2015). Key segments such as powertrain and
E/E profit from disproportionate outsourcing (source: A.T. Kearney Report).
Outsourcing - Ranking of outsourcing importance
Low 1
2
3
4
R&D cost flexibility
4.1
Access to necessary
engineering and
functional expertise
3.7
Headcount restriction
2.5
Access to proprietary
technology
Budget constraint
Improved
engineering quality
5 High
2.0
1.3
1.1
Regulation (Increase in Work Packages)
In Germany, current discussions around legislation on outsourcing of personnel aim to address
and define the rules that differentiate between genuine work package agreements
(“Werkverträge”) and activities qualifying as “employee leasing” (“Arbeitnehmerüberlassung”).
In a work package agreement, a service provider promises to perform a service for another
party; the service provider may use its own employees to perform the services, and such
employees may be sent to the other party, but the other party does not have any managerial
prerogative concerning the employees of the services provider. In turn, employee leasing means
that an employer sends its employee to a third party to work in the establishment and under the
managerial prerogative of the third party; the employee receives his or her remuneration from
the employer, who receives fees from the third party for leasing the employee to the third
214
party. Under the legislation currently in force, there is no fixed upper limit to the time period
for which an employee may be sent to a third party as long as it is not permanently
(vorübergehende Überlassung). Employees sent to a third party do have a right to equal pay and
equal treatment from day one, unless a collective agreement is applicable which deviates from
that rule.
Under the rules envisaged by the German federal government according to a political
agreement between the members of Germany’s current coalition government, engineers under
employee leasing contracts could be sent to OEMs for a maximum period of 18 months, would
have to receive the same pay and social security contributions as comparable OEM staff after a
certain period irrespective of the existence of deviating collective agreements, and ultimately
would have to be offered an employment contract directly with the OEM. Under this scenario,
structuring contracts as work packages would become even more attractive for OEMs than it is
already under the rules currently in force, as work package agreements facilitate the efficient
allocation of large-scale contracts, shift project responsibility to the ESPs, allow collaboration on
longer-term (more than 18 months) projects, and carry no risk of equal treatment obligations
for leased employees.
Under the rules currently in force, work package agreements must meet certain conditions
(otherwise, they may be treated by the courts as employee leasing). These include an agreement
between the customer and the ESP (i) setting forth the scope of services, (ii) providing clear
organizational separation between ESP and OEM employees, (iii) guaranteeing the ESP control
over the organization of the project, (iv) placing the full business risk of the project on the ESP
(v) prohibiting the OEM from passing operational instructions to the ESP or the employees of
the ESP (source: berylls/VDA study). Given a preference for work package agreements by OEMs,
the percentage of the latter is expected to increase from 76% of all contracts in 2014 to 87% in
2017, as shown in the chart below (source: A.T. Kearney Report).
Development of contract types in Germany (Estimate, ESP market Germany)
CAGR
2014-2017
100%
100%
13%
1%
-18%
24%
86%
+6%
-37%
4%
72%
2014
Body leasing
2017
Service contract
Work packages
Source: VDA/Berylls 2015, Lünendonk 2013, A.T. Kearney
Source: A.T. Kearney Report / berylls/VDA study
V.
THE DEVELOPMENT OF THE AUTOMOTIVE ESP MARKET
ESPs have become an integral part of automotive development. Of the global automotive R&D
value-added, which was estimated at approximately €132 billion in 2014, slightly less than 7%
was attributable to ESPs, while approximately 25% was attributable to OEMs’ internal R&D
capabilities and almost 70% to automotive suppliers. This compares to 12% ESP value-added
related to automotive R&D in Germany in the same year (source: berylls/VDA study). OEMs use
approximately 11% of their R&D expenditure for outsourcing to ESPs which accounts for
approximately 74% of the total R&D volume of ESPs. Suppliers outsource approximately 2% of
215
their R&D expenditure to ESPs which accounts for approximately 22% of the total R&D volume
of ESPs (source: berylls/VDA study; percentage based on absolute figures provided in the study).
Driven by rising R&D expenditures by OEMs, the global automotive ESP market reached a size of
€15.3 billion in 2014, representing a CAGR of 6.1% since 2010 when the size of the ESP market
was €12.1 billion (source: A.T. Kearney Report). Going forward, the automotive ESP market is
expected to grow at a CAGR of 6.7%, to reach a value of €22.6 billion by 2020 (source: A.T.
Kearney Report). During this period, growth will be particularly strong in the powertrain and
E/E segments, which are expected to grow at a CAGR of 9.6% and 9.3%, respectively, in the
period from 2014 to 2020.
Automotive ESP market 2010-2014 (€ bn)
CAGR
2010-2014
~6.1%
2.7
2010
3.6
2011
Exterior
Chassis
2012
Interior
+1.7%
3.0
+3.6%
3.9
+9.3%
3.9
4.3
+9.6%
2013
2014
3.6
3.3
3.3
3.0
1.5
2.9
2.8
3.0
+3.1%
+0.2%
+4.0%
1.5
1.5
2.7
2.6
Entire vehicle
13.6
0.8
0.7
1.0
12.8
0.8
0.7
0.9
1.4
12.1
0.8
0.7
0.9
1.4
15.3
0.9
0.7
1.0
14.4
0.8
0.7
1.0
Body-in-white
E&E
Powertrain
1. Automotive ESP market including commercial vehicles. Passenger cars and suppliers
Source:, A.T. Kearney
Automotive ESP market by segment (€ bn)1
6.7%
22.6
1.0
0.7
1.3
1.7
15.3
0.9
0.7
1.0
1.5
3.7
CAGR
2014-2020
+3.2%
+0.3%
+4.0%
+1.8%
+3.7%
3.0
6.7
+9.3%
7.4
+9.6%
3.9
4.3
2014
Entire vehicle
Exterior
1
2020
Chassis
Interior
Body-in-white
Powertrain
E&E
Automotive ESP market including Commercial vehicles, Passenger cars and suppliers
In terms of regional development, the European market constitutes the largest regional
segment within the global automotive ESP market with a value of approximately €6.4 billion (or
41.8% of the total market) in 2014. The European ESP market is expected to grow at a CAGR of
7% for the period from 2014 to 2020, reaching a total value of €9.7 billion in 2020 (which would
represent 42.9% of the global ESP market) (source: A.T. Kearney Report). The ESP markets in
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China and India had volumes of €0.9 billion and €0.3 billion, respectively, in 2014, and are
expected to grow strongly over the next few years, at a CAGR of 8.0% and 7.7%, respectively,
for the period from 2014 to 2018. Meanwhile, the U.S. automotive ESP market had a value of
€2.3 billion in 2014 and is forecast to grow at a CAGR of 5.4% in the period from 2014 to 2020
(source: A.T. Kearney Report).
The market share of the top 10 players in the automotive ESP market rose from 27% in 2010 to
34% in 2014. This consolidation trend – in a still fragmented industry – is supported by general
market conditions, with OEMs requesting ESPs to take on larger work packages and
development risk. Furthermore, smaller ESPs are generally less likely to have the capacity or the
flexibility to accommodate comprehensive and often complex projects having an international
reach, which are increasingly requested by OEMs and which are typically characterized by high
investment and equipment needs (source: A.T. Kearney Report).
We believe that leading ESPs (such as EDAG; see “K. Markets and Competition—VI. Competitive
Environment” below) with a broad service offering, strong project management capabilities,
international footprint and work package-compliant operational structures, are well positioned
to benefit from the ongoing consolidation and to enjoy disproportional growth compared to
the overall automotive ESP market.
VI.
COMPETITIVE ENVIRONMENT
In our view, there are a limited number of other ESPs with a comparable business model to EDAG
in terms of scope and breadth of services offered. We consider ourselves to be in a strong position
in a fragmented market that is characterized by high barriers to entry, i.e., a market that favors
size and experience, and which is largely unaffected by threats from temporary labor players and
low-cost providers according to the A.T. Kearney Report. For temporary labor players, the ESP
market entails challenging sales and key account processes and a strong dependency on existing
relationships and track records. Furthermore, temporary labor players tend to lack internal R&D
and IT infrastructure and the capability to handle large-scale projects. Additionally, the
qualification level of temporary labor employees tends to be insufficient. Similarly, low-cost
players tend to face entry-barriers due to a lack of qualifications and reference projects with a
conceptual focus, lack of experience, language capabilities and on-site presence. We believe that
the key differentiating factors for success in the automotive ESP market include:
Š
Innovation leadership:
technology trends.
ESPs must be at the forefront of global and specific sector and
Š
Critical scale: ESPs need to have the flexibility, resources and platform to handle large and
complex projects. They need to be able to provide sufficient resources at a high quality
standard in a timely manner and to take on an increasing share of responsibility and
development risks.
Š
Broad service offering: We expect that ESPs with high system and integration competence
and competence across all vehicle systems and components will benefit from outsourcing from
OEMs in all R&D segments.
Š
Strong local and international footprint: As a consequence of globalization, ESPs are
increasingly required to expand their international footprint and follow clients to emerging
markets such as China, India, Brazil or Mexico. The adaption of existing vehicles to various
local markets and requirements is preferably carried out by local R&D offices and we,
therefore, expect that operating an international cluster of facilities will be a differentiating
factor among ESPs.
Š
Independence: We believe that ESPs without ownership affiliation to their customers are
increasingly preferred by OEMs, which are generally trying to avoid the risk of transfer of
know-how to other OEM customers and conflicts of interest.
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Š
Strong customer relations: We believe it is essential for ESPs to maintain longstanding
customer relationships by providing overall high-quality services. This includes offering
premium engineering services as well as premium complementary services.
EDAG is one of the largest fully OEM and supplier independent ESPs and, based on automotiverelated revenues in 2014, the third largest ESP worldwide (source: A.T. Kearney Report;
automotive-related revenue for AVL has been estimated by A.T. Kearney). In the automotive ESP
market, we compete with integrated players, niche players, general ESPs with automotive
activities, as well as with the ESP businesses of suppliers, such as the following:
Š
Integrated larger players, such as AVL List GmbH (No. 1 ESP player), Bertrandt AG (listed,
partly owned by Volkswagen group; No. 2 ESP player), IAV GmbH (owned by Volkswagen
Group, Continental, Schaeffler, Freudenberg and Sabic; No. 4 ESP player), Bosch Engineering
(No. 5 ESP player) (source for market position: A.T. Kearney Report, based on automotiverelated revenue).
Š
Niche players focused on certain market sub-segments, such as Ricardo (listed) and FEV GmbH
Š
General ESPs, such as Altran (listed), Alten (listed) and AKKA (listed) (source: A.T. Kearney
Report).
Š
The ESP arms of automotive components suppliers, including Bosch Engineering, Continental
Engineering, Schaeffler Engineering and Magna.
Š
Outsourcing providers from emerging markets, such as Tata Technolgies and Infosys (source:
A.T. Kearney Report).
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L.
I.
BUSINESS
OVERVIEW OF OUR BUSINESS
We are one of the world’s largest independent ESPs in the automotive industry in terms of
revenues and headcount (source: A.T. Kearney Report). Independence in this context means that
no original equipment manufacturer (“OEM”) or supplier holds any majority or significant
minority shareholding in an ESP. We specialize in the development of automotive components
and modules, derivative car models (“derivatives”), including, in individual cases, entire cars, as
well as production facilities and designing innovative, ready-for-production solutions for
vehicles, two wheelers, trucks and production systems. We have strong and long-standing
relationships with all major German OEMs in the passenger car and commercial vehicle
industries with particular focus on German premium OEMs.
Furthermore, we have successfully developed other reputable automotive OEMs as customers in
markets outside Germany, particularly in Europe. To complement our activities, we also work for
systems suppliers in the automotive industry. In order to meet our customers’ demands we
follow their international footprint and offer our services globally.
Through our global network of 57 locations worldwide, located in close proximity to our
customers at important automotive hubs, we ensure that the expertise of the entire Group is
available to our customers on a local basis. Particularly in Germany, we have a dense network of
facilities in the vicinity of our key customers, which we believe to be a prerequisite for many of
our customers when engaging ESPs. Our main operating subsidiary’s headquarters in Wiesbaden
and technical headquarters in Fulda are within driving distance to the headquarters or major
facilities of all major German automotive manufacturers. We also employ a considerable number
of engineers in the Czech Republic, Hungary, Poland, Spain, Sweden, Switzerland and Italy in
accordance with our principle of serving our customers locally. Additionally, we operate several
subsidiaries in the United States, Brazil, India, China and Japan. While we have generated 78%
of our revenues and on average employed approximately 77% of our total workforce in the
fiscal year ended December 31, 2014 in Germany, our international footprint is set up
strategically and quality-driven. Our facilities in low-cost countries mainly carry out
intercompany contracts and enable us to offer best-cost services, while other international
facilities, for instance in China, provide our complete portfolio of high-end solutions to German
OEMs and local automotive manufacturers that are engaged in joint ventures with German and
other Western OEMs.
The complexity of customized solutions in the automotive industry is steadily increasing, due to
shorter times to market of new and derivative car models as well as constantly changing and
increasingly complex new technologies. In particular, the rising number of derivative car models
leads to an increasing demand for vehicle engineering services for complete vehicle integration,
development and testing (source: berylls/VDA study, March 2015). We believe that this trend has
a positive impact on the engineering outsourcing market, especially in Germany with its
presence of strong premium automotive OEMs. Furthermore, current trends towards increased
comfort, safety, connectivity and environmentally friendly vehicles require the combination of
technical know-how from various disciplines of automotive development. With more than 40
years of experience, we offer complete vehicle competence across the entire product value chain
and vehicle life cycle. Our comprehensive portfolio of services ranges from design to product
development, modelling, gauge construction, building of prototypes and testing to the
development of turnkey production systems. We offer particular expertise in the development
of production facilities and their implementation. We believe that we deliver particular value to
our customers given our complementary production solutions business, which enables us to
assist our customers not only in the development but also the subsequent production of
vehicles. Furthermore, due to our complete vehicle competence we believe we have become a
premium ESP for vehicle engineering services in the automotive industry and are able to profit
from our relationship across different products and divisions within our customers.
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While our services encompass general and specialist services as well as the development of
components, modules, systems and vehicle derivatives or even entire cars, our special know-how
is the guidance and support of customers from the initial idea to the finished prototype and
ultimately the production. These complete vehicle development capabilities form part of our
business strategy and are key to our success. On demand from our customers, we are present
throughout the entire life cycle of a product and accompany our customers from research and
advanced development, to concept and design to series development and finally supervision of
series production. In addition to vehicle engineering services, we carry out many complimentary
tasks along the development chain such as project management, quality management, supply
chain management or the documentation of entire projects. Furthermore, we attach great
importance to ensuring that our developments are in line with the current manufacturing needs
and requirements of our customers. At EDAG, we refer to this principle as “productionoptimized solutions”, meaning that any engineering solutions we provide are developed to
ensure the feasibility of the production process for particular products and designs.
Additionally, Feynsinn, our consultancy service, provides all-round customer support from the
concept phase to the implementation process and offers software-independent advice on
processes, methods and tools to optimize development and production sequences. Apart from
its consultancy services, Feynsinn provides implementation services and training.
In meeting customer demand, we put a particular emphasis on current key trends and
technologies in the automotive industry such as innovation for CO2 reduction, lightweight
design, e-mobility and Car-IT (source: Lünendonk analysis 2014). In order to meet our customers’
expectations and to contribute to automotive development, we constantly adapt our portfolio
of services to changing customer needs and varying market conditions. Our subsidiary BFFT, for
example, has specialized technical knowledge in the field of electrical and electronic
development, which is key for the development of applications such as driver assistance and
safety systems, in-car entertainment and car connectivity. Moreover, we have established
ourselves as an acknowledged partner in other areas. BFFT also provides support for our
customers in the fields of hardware and software development and alternative drive
technologies.
We consider ourselves an innovation and technology leader providing vehicle engineering
services to the automotive industry with German engineering excellence. In addition, we
maintain a number of electronics laboratories and testing facilities, most importantly our
accredited testing center in Fulda. We have thus proven to be a reliable partner in meeting
current and future challenges for vehicle engineering services across the entire value chain of
the product life cycle.
While the high level of expertise and years of experience of our engineers enable us, as we
believe, to deliver premium services in each individual area of the services we offer, we
additionally founded our Competence Centers “Lightweight Construction”, “E-Mobility”, “CarIT” and “New Production Technology”. These Competence Centers concentrate the combined
special knowledge of our experts in different fields and help further develop and retain such
special knowledge. In doing so, we manage to cater to the individual requirements of our
customers and come up with innovative ideas to maintain the attractiveness of our services on
the market.
Automotive OEMs are faced with constantly increasing technological complexity which is driving
engineering expenses and creating the necessity to have a clearly defined strategy regarding
core competences and outsourcing of vehicle engineering services (source: Roland Berger study,
March 2014). Diversified vehicle development between OEMs and ESPs, as is typical of the
German automotive industry, enables OEMs to insource high-value and competitively important
research and development (source: berylls/VDA study, March 2015). We believe that our business
is more and more driven by this current strategy of OEMs to focus on their core competence
while outsourcing development tasks that are increasingly complex but not considered to be of
sufficient strategic relevance to require the use of internal resources. As ESPs are often able to
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handle these tasks faster and more efficiently than the OEMs themselves (source: berylls/VDA
study, March 2015), we believe we will likely continue to benefit from OEM outsourcing.
With an average workforce of 7,714 people in the nine-month period ended September 30,
2015 (nine-month period ended September 30, 2014: 7,450), we believe to have reached a scale
that allows us to continue to succeed and grow as a sought-after ESP for German OEMs. In
particular, our ability to handle large-scale projects and to offer the delivery of projects in the
form of work packages instead of employee leasing arrangements, a service which an increasing
number of our customers more and more frequently requests, gives us a competitive advantage,
while our scale also offers us the flexibility and resources to handle large and complex projects.
When we take on project responsibility in development tasks, especially in the context of work
packages, we take responsibility for quality management, cost control and deadlines, providing
turnkey engineering solutions to our customers.
The Group’s operations are divided into three segments: Vehicle Engineering, Electrics/
Electronics (“E/E”) and Production Solutions. In the fiscal year ended December 31 2014, the
Group employed an average of 7,484 people (fiscal year ended December 31, 2013: an average
of 7,011). In the nine-month period ended September 30, 2015, we recorded a Core Revenue of
€533.9 million (in the nine-month period ended September 30, 2014: €465.8 million) and
Adjusted Core EBIT of €55.1 million (in the nine-month period ended September 30, 2014: €42.6
million). In 2014, we recorded a Core Revenue of €634.7 million and an Adjusted Core EBIT of
€53.2 million. In 2013, we recorded a Core Revenue of €560.6 million and Adjusted Core EBIT of
€43.0 million. For the year ended December 31, 2012, we recorded a Core Revenue of
€356.8 million and an Adjusted Core EBIT of €29.6 million.
II.
HISTORY AND KEY MILESTONES
EDAG was founded as “Konstruktionsbüro Horst Eckard” near Darmstadt, Germany, on
February 1, 1969. Today, we are represented on four continents and have a workforce of
8,063 employees (including trainees but excluding employees from discontinued operations)
worldwide as of September 30, 2015. The following provides an overview of our most important
historical achievements:
First phase:
Š
1970: The head office in Fulda was established. At the time, the orientation of the company
was towards vehicle and production plant development.
Š
1987: We started globalization of our Group with the founding of a branch office in
Barcelona, Spain. Furthermore, a separate training department was established.
Š
1995: The branch network in Germany included approximately 10 facilities situated close to
vehicle manufacturers.
Š
1997: The total number of employees worldwide rose to more than 2,000.
Š
1998: EDAG is the first automotive service provider to be admitted to the VDA (Association of
the German Automotive Industry).
Š
2001: Daimler hired us for our first full-car development for a derivative model (the Mercedes
B-Class).
Š
2002: We founded the “EDAG Tec-Center”, a multi-disciplinary product development
competence center for lightweight design, in Fulda.
Š
2004: EDAG opened its first branch office in China (Shanghai).
Š
2005: The first EDAG facility in Japan (Fukuoka) was founded.
Š
2006: ATON Group became the sole shareholder of EDAG.
The acquisition of EDAG by the ATON Group constituted an important step in our corporate
history since the ATON Group significantly affected and formed our strategy to focus our
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services on the automotive industry. We started a restructuring process, disposing of nonautomotive related businesses and acquiring complimentary automotive ESPs.
Second phase:
Š
2007: EDAG Group’s staff levels rose to more than 3,500 employees worldwide.
Š
2009: The EDAG “Light Car – Open Source”, a “purpose design” body concept for electric
vehicles created using the latest standards in lightweight materials, semi-finished products
and joining technology, was presented at the Geneva Motor Show and the International
Motor Show (IAA).
Š
2010: We founded the E-Mobility Competence Center at EDAG’s head office in Fulda.
Š
2011: We sold our subsidiary Mühlenberg Interiors GmbH & Co. KG as well as AKTEC
Automobil- und Kunststofftechnik GmbH. We established first contact with a Japanese
customer regarding derivative projects.
Š
2012: With the acquisition of the Rücker Group (which added approximately 2,500 employees)
we became one of the leading independent automotive ESPs, employing more than 7,000
employees. We sold our subsidiary Weser-Metall-Umformtechnik GmbH & Co. KG along with
its subsidiary Namibian Press and Tools International Prop. Ltd.
Š
2013: With the acquisition of the BFFT Group (comprising approximately 600 employees) we
managed to strengthen our position in the E/E segment. We founded the Competence Center
Car-IT.
Š
2014: At the Geneva Motor Show, EDAG presented the futuristic vehicle sculpture “EDAG
GENESIS”, which, using the example of a body structure, was designed to demonstrate the
revolutionary potential of additive manufacturing. The teams from EDAG and Rücker Group
were combined in the new entity EDAG Engineering AG. Approximately 60 locations in some
25 countries and more than 7,400 employees were at our customer´s disposal for the
development of vehicles and production plants. Furthermore, for the first time we completed
derivative projects for Japanese customers.
In 2014 we sold Rücker EKS GmbH (now EKS InTec GmbH), Rücker Aerospace GmbH, Silver
Aerospace B.V., Rücker France SARL and Rücker-Sier GIE. Additionally, we sold our business
division “Werkzeug & Karosseriesysteme” to EDAG Werkzeug+Karosserie GmbH, in which we
hold 49% as of December 31, 2014.
Š
In 2015, construction work started on the new EDAG Technology and Development Centre in
Wolfsburg-Warmenau. This year also marks the world premiere of the concept “EDAG Light
Cocoon” at the Geneva Motor Show 2015. Additionally, we established the Competence
Center “New Production Technology”. Furthermore, the Company was incorporated to
become the new parent company of the EDAG Group after consummation of the
Contribution.
III.
OUR KEY COMPETITIVE STRENGTHS
We believe we distinguish ourselves by the following key competitive strengths:
We are active in the growth market for automotive engineering services and we believe we are
well-positioned to grow above market average
The global market for automotive ESPs has grown at a CAGR of 6.1% in the period from 2010 to
2014, based on sales revenues (source: A.T. Kearney Report). We regard the automotive ESP
industry as a structurally attractive market and expect further growth in the foreseeable future,
due to trends such as the
Š
increasing number of models and derivatives offered by OEMs;
Š
rapid advancements in technology as well as increasingly comprehensive vehicle configuration
and upgrade options;
222
Š
emergence of e-mobility and environmentally-friendly technologies aimed at lower fuel
consumption and reduction of CO2 emissions; and
Š
increasing number of electronic and electrical components integrated in motor vehicles
In particular, it is expected that the rising number of vehicle derivative models will lead to an
increasing demand for vehicle engineering services for complete vehicle integration,
development and testing (source: berylls/VDA study, March 2015). Especially in Germany, home
of the world’s leading premium automotive OEMs, the ESP business is increasingly driven by
OEMs’ focus on core competences and the outsourcing of increasingly complex, although not
strategically important development tasks. ESPs are often able to handle these tasks faster and
more efficiently than the OEMs themselves (source: berylls/VDA study, March 2015). Based on
these trends, the automotive ESP market has consistently grown by approximately 6.1%
annually since 2010 and is forecast to grow 6.7% annually until 2020 (source: A.T. Kearney
Report). In addition, the European ESP market is estimated to hold the largest absolute growth
potential for ESPs. The top 5 ESPs, of which EDAG is one, are expected to grow at an even faster
rate, i.e. at a CAGR of 9-12% in the period from 2014 to 2020 measured by sales revenues
(source: A.T. Kearney Report). We believe that we are well positioned to successfully compete in
this market and to grow our sales revenues above market average in the medium term, based
on
Š
extensive expertise in the E/E field, where the ESP market is expected to grow
disproportionally at a CAGR of 9.3% in the period 2014 through 2020 to a total size of
€6.7 billion in revenues (source: A.T. Kearney Report), as well as in the areas of lightweight
materials and electro mobility;
Š
the breadth of our engineering capabilities, spanning from vehicle concepts across
development of automotive components and modules to derivative car models and
production facilities, which in turn enables us to act as an integrated system provider;
Š
our independence, coupled with a high degree of customer proximity through our local sites
situated near our customers’ facilities;
Š
the cross-selling potential with our Production Solutions segment;
Š
our ability to attract and retain an experienced and qualified workforce;
Š
our ability to handle larger-scale projects as well as our capacities in ramping up operations,
also internationally;
Š
our scale which permits OEMs to entrust us with large scale development assignments on the
basis of broadly defined work package agreements.
Our core business grew at a rate of 13.2% and 14.9% in terms of sales revenues with third
parties in the fiscal year ended December 31, 2014 and nine-month period ended September 30,
2015, respectively, compared to the relevant prior year development.
We are one of the largest independent ESPs worldwide and we believe we have the scale
needed to operate successfully in a market which favors size and experience
We consider size and related economies of scale as key success factors in today’s ESP market, as
flexibility, sufficient resources and a platform to handle large and complex projects are
increasingly important to OEMs. The ESP market has seen a consolidation trend over the past
few years with a key driver having been OEMs’ request for large-scale project capabilities and
full vehicle competence when outsourcing engineering projects to ESPs (source: A.T. Kearney
Report). We are one of the largest independent ESPs worldwide, based on revenues generated
by engineering services for the automotive industry (source: A.T. Kearney Report), and are
among the three largest ESPs globally with a market share of 5% in 2014 (source A.T. Kearney
Report).
223
In addition, with more than 40 years of experience, we consider ourselves one of the few players
in the market with capabilities across all vehicle systems and components and we benefit from
well-established, long-standing customer relationships with all German OEMs, which we believe
to be a strong competitive advantage for us. Furthermore, we believe that our size and brand
recognition helps us to recruit well trained engineers.
We provide the vast majority of our services under work package agreements (Werkverträge),
which in our view provides a competitive advantage, given that OEMs increasingly consider
work package agreements to be more attractive than employee leasing
(Arbeitnehmerüberlassung), in particular in connection with large-scale projects (source: A.T.
Kearney Report). We also expect to benefit from potential new legislation in Germany, which
will favor work package agreements over employee leasing or service contracts (Dienstverträge).
It is expected that the share of work package agreements in the German automotive
engineering services market will grow from 72% in 2014 to 86% by 2017 (source: A.T. Kearney
Report).
Finally, in a market which is still highly fragmented, we also believe that we have the size
needed to participate actively in any potential further market consolidation.
We believe we are a partner of choice for the automotive industry and have a blue chip
customer base with a focus on German OEMs
We have a broad customer portfolio and longstanding relationships with major OEMs in the
global automotive and commercial vehicle industries. While we focus on German OEMs such as
Volkswagen, BMW, Audi, Porsche and Daimler, our customers also include reputable
international car manufacturers. Among the major German OEMs, we make an effort to foster
our relations with premium brands, which tend to spend substantially more on R&D and
outsource more R&D services than the industry average (source: A.T. Kearney Report).
We have a strong footprint in Germany with our offices in close proximity to our customers at
important automotive hubs and thereby ensure that our entire expertise is available to our
customers on a local basis. Our international footprint is set up strategically and quality-driven.
We are present in Europe in the Czech Republic, Hungary, Italy, Poland, Spain, Sweden,
Switzerland and the United Kingdom in accordance with our principle of serving our customers
locally. Globally, we are active in the United States, Brazil, India, China, Japan, Malaysia, Mexico,
Russia and South Korea. Our international facilities carry out intercompany contracts and enable
us to offer best-cost services as well as to provide our complete portfolio of high-end solutions
to German OEMs and their local automotive manufacturers that are engaged with German and
other Western OEMs.
We believe we stand for leading technology and innovation based on German engineering
excellence and have capabilities across the entire vehicle value chain
We focus on providing independent vehicle engineering excellence. We offer our customers a
broad range of engineering services across the entire product life cycle beginning with earlystage concept development approximately 60 months prior to production over concept and
design and series development to supervision of series production, which typically runs for 84 or
more months after the start of production and includes facelifts and model derivatives. In
addition, we offer particular expertise in the development of production facilities and their
implementation. We believe that the key advantages we can offer to our customers comprise
the ability to act without conflicts of interest, complete vehicle development competence,
project life-cycle management ability as well as capability and capacity to complete large-scale
work packages. Due to our complete vehicle competence, we believe we have become a
premium ESP for vehicle engineering services in the automotive industry and are able to exploit
our relationships across different products and divisions within our customers.
We consider ourselves an innovation and technology leader providing vehicle engineering
services to the automotive industry with German engineering excellence, with the goal to
consistently be at the forefront of automotive innovation. Therefore, our Competence Centers
224
focus on key future technologies in the automotive industry such as lightweight construction,
electric mobility, connectivity/car IT, new mobility concepts and Industry 4.0 production network
solutions. We believe that our technology and innovation leadership is also evidenced by the
various innovation and design awards such as which we have won in the recent past.
We have a highly skilled engineering workforce, experienced management and offer in-house
development opportunities
We consider our employees to be our greatest asset. Our workforce consisted of 8,063
employees (including trainees but excluding employees from discontinued operations) as of
September 30, 2015. Approximately three quarters of our employees in Germany had an
academic/engineering background (including employees with similar qualifications, e.g.
directors, divisional and department heads, team managers, system and support engineers,
“Meister”, technicians, etc., but excluding trainees) as of September 30, 2015.
Since we believe that recruiting and retaining our highly skilled workforce is key to our business
success, we attach great importance to the recruitment, training and retention of highly
competent employees and have a comprehensive talent development process in place. Starting
with recruitment activities at universities and innovation partnerships, we offer regular
professional trainings, attractive incentive programs and career opportunities to our employees.
We believe that our strong management focus on our workforce is evidenced by the eight
consecutive top employer awards we have received from Top Employer Institute.
Moreover, we have a highly experienced executive management team with a combined
expertise of more than 40 years of experience in the automotive industry.
We have a solid financial profile based on strong revenue growth and attractive financial
returns
Our sales revenue has grown substantially since 2012 both organically and through strategic
acquisitions such as the Rücker Group in 2012 and the BFFT Group in 2013. In the fiscal year
ended December 31, 2014, our core business grew at a rate of 13.2% in terms of sales revenues
with third parties. We expect the automotive ESP market to remain on a structural growth path
in the foreseeable future and strive to continue our revenue growth on this basis.
Given our substantially increased scale and the significant synergies achieved following the
acquisitions of the Rücker Group and the BFFT Group, we have grown our Adjusted Core EBIT
margin to 10.0% for the three-month period ended March 31, 2015 and also to 10.0% for the
six-month period ended June 30, 2015. The Adjusted Core EBIT margin for the nine-month
period ended September 30, 2015 amounted to 10.3%. We aim to increase our Adjusted Core
EBIT margin in the medium term by means of cost synergy build-ups from such acquisitions.
Generally, we aim to maintain a high level of returns in the medium term. Moreover, our assetlight business model does not require large investments.
IV.
OUR STRATEGY
In order to retain our position as a premium ESP in the automotive industry and to shape future
automotive development, we put particular emphasis on the employment of a highly qualified
and highly trained workforce that helps us, as we believe, deliver excellent performance with
outstanding client feedback, meet the challenges of innovation and new technologies and form
a strong global presence and network. Our objective is to leverage and strengthen our position
as a top 3 global player in the growing ESP market and to achieve profitable growth. The key
elements of our strategy to pursue and achieve this objective include:
Further improving our productivity
The fiscal year ended December 31, 2014 was characterized by the integration of the Rücker
Group and the BFFT Group into the EDAG Group. Both acquisitions complemented our service
portfolio, global set-up and project management capabilities, which, as we believe, entails
significant benefits for our customers. Due to the concentration of our resources, including
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overhead functions, and our know-how we are now able to allocate resources more efficiently,
cover different areas of expertise more effectively and take on a greater number of larger
projects (e.g. complete vehicle development) for our customers. Additionally, we established a
fault management system and are continually working on optimization of both internal and
external processes. We rely on N5 and SAP software solutions to achieve these aims.
In order to further improve our productivity, we intend to further expand our strategic position
in the field of full vehicle and derivative development. We aim to be a first class, one-stop ESP
for our customers and strive to exploit synergies across all segments and combine our
engineering capabilities. In order to improve productivity, we have also implemented integrated
reporting and management of resources, for example by securing appropriate partnerships and
IT systems. Key to increased productivity is also our flexibility to serve multiple customers from
one location. Apart from key customers, for whom we are ready to establish a local presence,
data transfer allows us to service our customers remotely, which saves time and resources and
forms an important part of our strategy to streamline overhead costs.
Focusing on innovation
In the past, our high level of technological and professional expertise enabled us, as we believe,
to reinforce our role as an important and well-regarded knowledge and technology partner to
the automotive industry. In order to be able to realize complex technologies for automotive
OEMs and their systems suppliers in the future, we intend to further expand our know-how
network with universities, technology start-ups, manufacturers of semi-finished products and
other experts. For the same reason, we established our Competence Centers “Lightweight
Construction”, “E-Mobility”, “Car-IT” and “New Production Technology”. Our Competence
Centers play an important role for our development capabilities. We believe that technological
projects, such as “EDAG Genesis” and “EDAG Light Cocoon”, not only highlight our innovation
potential and strengthen our competitive edge but also help us win projects, including for the
development of new technologies, and attract new talent.
Given our clear focus on innovation, we aim to further expand our Competence Centers and
foster the identification of potential interdisciplinary projects, which we consider a particularly
important driver for innovation. Bundling engineering expertise and encouraging cooperation
between different departments moreover benefits the optimization of existing technology and
the advancement of know-how. We actively foster the internal transfer of know-how and raise
our profile within the automotive industry, for example through publications and our presence
in the media to further strengthen our brand.
We intend to market our innovations appropriately in order to fortify our reputation as a
technology leader and to gain access to new customers and projects. In addition, we intend to
advance the efficient and timely training of our employees which is, from our point of view,
equally important for our innovative capabilities.
Our focus on innovation is particularly important for our E/E segment. Vehicle electronics will be
one of the major innovation drivers in the future due to the technological shift in the automotive
industry towards alternative powertrains, especially electric motors, as well as, from a long-term
point of view, autonomous driving (source: A.T. Kearney Report). Electrical and electronic
components as well as software (including apps) already contribute a high proportion of the
added value in vehicle development today and will, as we believe, play an increasingly important
role regarding functionality, convenience, safety and environmental efficiency in the future.
In order to be able to participate in this trend, we established our Competence Center in the E/E
segment, particularly in the fields of car-IT (apps, autonomous driving and connectivity) and
e-mobility (energy storage and power electronics). In E/E development, we are a full service
provider to vehicle manufacturers and their systems suppliers. In particular, we strengthened
this segment with the acquisition of the BFFT Group, which substantially expanded our
capabilities in electric and electronic development and covers future-oriented areas such as
ADAS and infotainment.
226
Fostering our attractiveness as an employer
The leading position in technological know-how and innovation, we believe we have, can only
be maintained in the long term if we continue to successfully recruit, train and retain highly
qualified and skilled employees. The provision of attractive training and development measures
for our employees is firmly embedded in our corporate identity. Our staff benefits from a
comprehensive qualification program and a diversified range of training opportunities tailored
to the continuous improvement of technical skills and leadership qualities. In order to maintain
and enhance our position as an attractive employer, which is highlighted by numerous awards
we have won in this category, we also offer our employees training in specialist disciplines.
Additionally, we have implemented and intend to expand our internal development and
training program, the EDAG academy, and encourage job rotation. Likewise, we incentivize and
reward the participation of our staff in international assignments. In addition to our innovative
potential, our training program also serves to strengthen our competitive position as perceived
by our customers.
We believe that the development and implementation of management and brand values does
not only affect our customer relations but also inspires loyalty in our staff and helps us retain
our employees. We stress the importance of employee commitment for our company and focus
on strengthening their ties to EDAG, for example by implementing health and family
management initiatives and putting emphasis on the integration of employees from acquired
companies. As a consequence, we believe, we have a relatively moderate fluctuation rate of our
employees. The attractiveness of our projects and project flexibility as well as our compensation
and working models also prove essential for hiring and retaining employees. For further
information on employees and recruiting activities see “L. Business—IX. Employees”.
Further strengthening our market position
We are the number three in the German (source: Lünendonk analysis 2014) and global ESP
market (source: A.T. Kearney Report) as measured by revenue. While the automotive ESP market
has grown by a CAGR of approximately 6.1% in the period from 2010 to 2014 and is forecast to
grow at a CAGR of 6.7% in the period from 2014 to 2020 (source: A.T. Kearney Report), the
European ESP market, in absolute terms, is estimated to yield the largest absolute growth
potential for ESPs. The top 5 ESPs, of which EDAG is one, are expected to grow at an even faster
rate, i.e., at an annual rate of 9-12% until 2020 measured by sales revenue (source: A.T. Kearney
Report). We regard ourselves to be well-positioned to capture the high growth rates expected in
the relevant market by the A.T. Kearney Report due to our comprehensive service portfolio and
well-established relationships with our customers, especially with German OEMs. Due to our
expertise in engineering services for the automotive industry, we believe we enjoy a strong
reputation among our international customers.
German automotive OEMs and their suppliers are increasingly ramping up their foreign R&D
capabilities, reflecting the automotive industry’s increasing globalization. Following the
international footprint of our customers has therefore become a crucial factor for maintaining
customer relationships and retaining project assignments. Consequently, the flexibility to assist
our customers abroad with a local presence forms an important part of our strategy for
international expansion. For example, we considerably increased our presence in Spain where
we employed approximately 450 engineers as of December 31, 2014. We also enhanced our
workforce in Eastern Europe. Outside of Europe, we have already expanded our facilities in
India, China, the USA, Mexico and Brazil and plan to continue to do so in line with rising
customer demand.
To strengthen our market position, we plan to continue to follow our existing customers to
their international production locations, for example to Mexico or China, as our customers
expand their international footprint. Moreover, we aim to acquire new customers and are ready
to expand our geographical reach to win these customers.
227
Further increasing profitability
In the fiscal years ended December 31, 2012, 2013 and 2014, we were able to achieve an
Adjusted Core EBIT margin of 8.3%, 7.7% and 8.4% respectively. We were able to increase our
Adjusted Core EBIT margin to 10.0% for the three-month period ended March 31, 2015 and also
to 10.0% for the six-month period ended June 30, 2015. Our Adjusted Core EBIT margin for the
nine-month period ended September 30, 2015 amounted to 10.3%. Besides aiming to increase
our Adjusted Core EBIT margin in the medium term by means of cost synergy build-ups, we
intend to concentrate on strong project management and efficient resource allocation to
further increase our profitability. This includes the implementation of best-cost initiatives to
ensure competitiveness on an international level. Additionally, the consistent evaluation of
economics and the risk assessment of potential new projects further help raise profitability.
Likewise, early recognition and management of resource constraints and risks are key to
enhancing our profit margins and form part of our strategy to increase profitability.
During the fiscal years ended December 31, 2012, 2013 and 2014, our overall cost structure
remained relatively stable. Personnel expenses and expenses for external services (including
costs for ESPs operating as subcontractors) represented the largest cost factor.
Maintaining operating flexibility
A positive operating cashflow is essential for maintaining the operating flexibility that we seek
for optimally running our business. We are therefore ready to engage in viable investment
activities if they fit into our strategic considerations. Accordingly, improving our equity ratio
and our investment quota as well as maintaining an appropriate investment cashflow form
important parts of our long-term investment plans. Efficient debtors/creditors management
additionally helps us control the amount of liquidity available to us.
In order to maintain the level of liquidity which we consider necessary to maintain operational
flexibility, we aim to optimize the management of our working capital and receivables. While
carefully assessing investment opportunities, we will continue to concentrate on an asset-light
business model and strive to maintain a comfortable buffer for operating flexibility.
V.
OUR OFFERING AND OPERATIONS
At EDAG, our operations are organized along our three core segments Vehicle Engineering, E/E
and Production Solutions. While we offer single services in the individual segments, we also
offer these services to our customers as packages or in various combinations and in the form of
cross-divisional projects.
228
Vehicle Engineering
Design Concepts
• Styling
• Surfacing
• Model marking
Body Engineering
• Concept development and package
• Body in white and door systems
• Interior and exterior
Vehicle Integration
• Chassis
• Powertrain
• Vehicle functions (e.g. safety, thermal,
noise vibration harshness)
• Component and vehicle validation
• Simulation and calculation
• Experiment and test rig construction
• Vehicle assembly
Project Management
• Management of complete vehicle and
derivative projects
• Process consulting services
E/E Vehicle Engineering
• E/E architectures
• E/E functions development
• E/E functions validation
• Wiring and E/E component packages
E/E Systems Engineering
• Requirements management
• System implementation
• System validation
• Vehicle integration
E/E Embedded Systems
• ECU conception and specification
• Hardware development
•
•
•
Software development
Integration and validation
Systems solutions and tools
Concept Engineering
• Digital Factory
• Factory Planning
• Forming technology tool and dies
• Process planning (body shop, paint,
general assembly, logistics)
• Factory simulation and production IT
Realization Engineering
• Systems development
• Robotics
• Automation
Feynsinn
• Executive consulting (regarding value chain
process
• Technical consulting (regarding value chain
process)
• Implementation and training
E/E Car-IT
• Services and software products
• Engineering
• Standardization
• Consulting
Life Cycle Engineering/Support
• Quality management
• Documentation services
• Life cycle optimization (cost, etc.)
1.
Segments
Divisions
• Services
Vehicle Engineering
We deliver Vehicle Engineering services through 25 German and 16 international locations and
approximately 4,700 employees (including trainees), providing us with a strong global presence
near the R&D centers of our major customers. Our services in this segment cover all aspects of
the automotive development process and include concept development, ranging from
component, module and system to full vehicle development with lightweight design as a focus
of our innovation development. Moreover, we have strong capabilities and know-how in truck
applications. Our main customers are the major European automotive manufacturers and their
systems suppliers.
Examples of completed projects in the Vehicle Engineering segment include the development of
a frontal restraint system for a German premium OEM, the development of a head of state
vehicle for a German premium OEM, the development of a carbon fiber reinforced plastic body
in white for a German premium OEM and a full interior development for an entire vehicle
family for a US volume OEM. Furthermore, we were hired as a general contractor for surfacing
and clay modeling. In the Vehicle Engineering segment we also work on exhibition show cars
and the development of future light concepts.
With €417.6 million or a share of 60.5% in total sales revenues and changes in inventories in the
fiscal year ended December 31, 2014, Vehicle Engineering constitutes our largest segment by
sales revenues and changes in inventories. In this segment, we generated approximately half of
our revenues in Germany with module design in the fiscal year ended December 31, 2014, while
the activities styling, simulation and component and vehicle validation also contributed strongly
to our revenues.
Examples of completed projects in the Vehicle Engineering segment include the development of
a frontal restraint system for a German premium OEM, the development of a head of state
vehicle for a German premium OEM, the development of a carbon fiber reinforced plastic body
in white for a German premium OEM and a full interior development for an entire vehicle
family for a US volume OEM. Furthermore, we were hired as a general contractor for surfacing
and clay modeling. In the Vehicle Engineering segment we also work on exhibition show cars
and the development of future light concepts.
229
The segment is divided into the divisions Design Concepts, Body Engineering, Vehicle
Integration, Project Management and Life Cycle Engineering/Support.
The following chart provides an overview of our services along the product life-cycle chain in
the Vehicle Engineering segment:
Month -60
-48
Research & advanced
development
SOP
0
-36
Concept & styling
Series development
EOP
84+
Production
Light-weight Research
Body
Engineering
Design
Concepts
Styling
Surfacing
Model Making
Concept Development and Package
Body-in-white and Door Systems
Interior and Exterior
Chassis
Vehicle
Integration
Powertrain
Vehicle Functions
Component and Vehicle Validation
Simulation and Calculation
Life-cycle
Eng./ Supp.
Vehicle Assembly
Documentation Services
Quality Management
Life-cycle Optimization (cost, etc.)
Vehicle / Project independent services:
Experiment and Test Rig Construction
Management of Complete Vehicle and Derivative Projects
Process Consulting Services
a.
Design Concepts Division
Styling plays a key role in the development process of vehicles. While our customers provide
ideas and define the direction of a new product, we offer various types of design services and
help them implement their objectives, using both virtual and physical models to check technical
feasibility of designs.
In the Design Concepts division, we offer a full range of styling services, i.e., sketches, form
finding and model making, and our design studios are able to handle large model building
volumes. Our portfolio of services in this division includes product conception and design and
visualization in computer-aided industrial design applications.
Š
Styling: Our services comprise designing brand strategies, designing ideas, product
conception and design and visualization in computer-aided industrial design applications such
as 2D, 3D and Virtual Reality applications.
Š
Surfacing: Surface development is an important interface between design and the
subsequent development phases in other departments. We use clay and virtual models to
concurrently fulfill design requirements and technical feasibility and utilize surface simulation
to create photo-realistic images and virtual reality scenarios.
Š
Model making: We create high-precision physical models of commissioned vehicles, whether
for validation or as design models which includes, inter alia, hard models, drivable show cars
with a wide range of functions (e.g. lighting and electrical door mechanisms), sculptures and
special models as well as prototype parts. In model making, we also work on the integration
of electrical and electronic functions into the models.
b.
Body Engineering Division
The core areas of body engineering concern the development of body in white and exterior and
interior vehicle parts. Our services are driven by the automotive industry’s focus on developing
230
fuel efficient new vehicles with lower CO2 emissions, which is due to the introduction of
regulatory limits on CO2 emissions by car fleets produced by individual manufacturers. One of
the key tasks in vehicle development is weight reduction through the use of innovative
composite materials, high-strength steel, aluminum and magnesium.
Particularly as a result of the increased number of derivative car models brought to market by
OEMs, design elements and surface features in the interior of the vehicle have become
distinguishing features of significant importance to customers and thus car manufacturers to
differentiate and individualize their models. Ergonomics, comfort, safety and functionality are
key features of the interior design for cars. Since the development of complex interior
components and modules is closely linked to those of the body of the vehicle, we serve this
interface by combining work streams from our different business divisions.
The Body Engineering division encompasses all services such as package (the arranging of
components and modules in the vehicle in such a way that legal and functional requirements
are met), body in white, and the development of interior and exterior vehicle parts in
accordance with customer needs. This also includes the development of door systems. The Body
Engineering division plays an integral part in the full vehicle development programs of our
customers.
Š
Concept development and package: As part of intelligent module structures, we develop
platform and modular product concepts for our customers making optimum use of available
space. We also work on ergonomic analysis and concept validation of vehicle functions to
provide optimum ergonomic, assembly and maintenance properties.
Š
Body in white and door systems: Our services in this area include preliminary, concept and
series development of the vehicle body as well as lightweight design and the selection of
suitable material. Multi-material applications as well as designs in aluminum, magnesium,
reinforced polymers and carbon fiber are utilized. Additionally, we assess manufacturingrelated feasibility in terms of cost, ease of assembly and recyclability and supplier
management and development.
Š
Interior and exterior: Our services in interior comprise preliminary, concept and series
development, lightweight design and material selection and integration. Additionally, we
offer supplier management and development and, if agreed, take on responsibility for
module development with functional targets. Our vehicle engineering services regarding the
exterior system include the development of air spoilers, panels, windows, glass roof systems or
complete modules, e.g. bumper systems.
c.
Vehicle Integration Division
In the development of vehicle functions, we offer all around engineering of the attributes of
the complete vehicle. These include active and passive safety, longitudinal and lateral dynamics,
operational stability, noise vibration harshness (NVH), aerodynamics and aeroacoustics, as well
as thermal management, heating ventilation air condition (HVAC) and cooling. Another element
of our part in the function development process is the integration of the restraint system and
thermal components.
Š
Chassis: Regarding chassis development, we offer preliminary studies, concept and series
development. We perform the development of the chassis and the assessment of vehicle
dynamics. Therefore we offer design and simulation services as well as physical validation of
components, systems and the overall vehicle. Systems supplier development and integration is
also a vital and important part of our offering.
Š
Powertrain: Focusing on powertrain system integration, we offer complete vehicle
integration of powertrain systems including design, simulation and functional testing. The
main innovation drivers are new and alternative powertrain concepts, for example hybrid and
electric drive systems.
231
Š
Vehicle functions (e.g. safety, thermal, noise vibration harshness): Regarding vehicle safety,
we offer preliminary studies, concept and series development as well as the development of
passive and integral safety, i.e., the coordinated interaction of active and passive safety
requirements and therefore compliance with the relevant safety requirements. A strong part
of our offering is the simulation and calculation and the functional testing of such systems. In
this process we also integrate and manage the component supply base of the safety systems.
Regarding thermal development, we assist our customers with the functional integration of
the cooling, coolant circuit and air conditioning components and systems in the vehicle. We
carry out preliminary studies, concept and series development in this context. Attributes such
as aerodynamics, noise vibration harshness (NHV), acoustics, ride and handling and comfort
play a decisive role in the driving experience in modern vehicles. Our services in this respect
include developing attributes of the complete vehicle, as well as the development of module
functions.
Š
Component and vehicle validation: We examine and test new ideas and solutions in our
laboratories and testing facilities, employing rigorous testing procedures and systems. We
outsource the testing of entire vehicles in the course of the development programs for entire
vehicles.
Š
Simulation and calculation: Virtual simulation and testing within the framework of
computer-aided engineering (CAE) is key to validating products at an early stage until
production tooling release. With CAE we offer the testing of the rigidity, strength and misuse
loads, vibration and acoustics, operational strength and fatigue resistance, vehicle dynamics,
vehicle safety, structure design (crashworthiness), passenger safety (design of restraint
systems) and pedestrian protection.
Š
Experiment and test rig construction: Our laboratories also realize and test components,
modules, and even complete systems, focusing on components made of polymeric materials,
on ageing and weathering simulation, acoustics, thermal properties, material cards and
electrical and electronic components. These tests are mainly carried out by our accredited test
laboratory in Fulda (DIN EN ISO 17025 standards).
Š
Vehicle assembly: We also supervise our customers’ vehicle development projects, from the
preparation of product specifications to the start of production (SOP) since the validation and
certification process is one of the most important milestones in the process of the creation of
a new generation of vehicles. Starting with detailed competition analysis, the drafting of
vehicle technical specifications and generation of complete validation plans, to complete
vehicle testing and approval recommendation, we ensure that these processes run smoothly.
d.
Project Management Division
Our Project Management division manages complete vehicle projects, derivatives, special
vehicles and large-scale interdisciplinary module packages.
Š
Management of complete vehicle and derivative projects: In individual cases, our customers
contract us for the development of complete vehicles. Our services range from styling an idea
to manufacturing engineering and turnkey facilities. In this context, we also take on
engineering and supplier management on a component, system and vehicle level. In this role,
we define and coordinate the responsibilities of all parties involved in a project in order to
foster exchange of information, both internally as well as among all parties involved and
ensure the final delivery of the project within quality, timing and budget.
Š
Process consulting services: We consult new customers in emerging markets formulating
their strategies and setting up their processes. In particular, our services comprise consulting
on platform, cooperation and development strategies, the integration of production planning
simulation and optimization as well as CAE simulation, validation and testing in cooperation
with our customers. Furthermore, we support our customers to optimize single steps within
the whole development process.
232
e.
Life Cycle Engineering/Support Division
Š
Quality management: We offer ramp-up management, i.e., modification, module and
quality control in order to improve product quality.
Š
Documentation services: We offer technical communication solutions for our customers’
products, such as logbooks for repair and service guides as well as CE documentation for
machinery and plant engineering. With respect to information design, we develop guidelines
and individual communication products from 3D editing to methodical pattern recognition
and structuring and knowledge transfer via media products.
Š
Life cycle optimization (cost, etc.): We offer field monitoring, i.e., the processing of
complaints in aftersales, quality audits (according to state-of-the-art standards such as FMEA),
trainings and process optimization.
2.
Electrics/Electronics (E/E)
In the E/E segment, which is based in 18 German locations and one international location and
comprised approximately 1,660 employees (including trainees) as of September 30, 2015, we
carry out the integration of new electrical/electronic components and modules in sustainable
vehicle concepts, and also deal with the central theme of energy in vehicles. While our portfolio
of services comprises complete E/E packages, we also offer single services in body E/E, Car-IT and
connectivity and advanced driver assistance systems (ADAS). Electrical and electronic systems as
well as software in vehicles play a constantly increasing role in the development of automobiles
today, in particular regarding functionality, convenience, safety, fuel efficiency and electric
drive systems. We believe that future cars will rely on even more electrical and electronic
systems and software. This trend also leads to increasing complexity in the automotive
development sector, for which we believe we are very well equipped due to our global network
of engineers and the establishment of our Competence Centers. In order to implement
innovative and individualized solutions for our customers, we combine different competence
clusters, providing services from development, integration and validation of individual
components, modules and systems to complete vehicles with corresponding supporting services.
In order to achieve maximum project success, we pursue an interdisciplinary way of working.
This so-called networked engineering in accordance with our V-Model serves as a link between
product development/realization and integration/validation and reduces our coordination
efforts alongside the whole development chain within E/E, from product design to start of
production.
Examples of completed projects in the E/E segment include the development of piloted driving
and parking assistance systems for an European OEM, the global supervision of a series
production of infotainment and connectivity components for a German premium OEM (series
development after startup of all colored (online weather, Facebook) and grey (eCall, car finder)
services including country approaches and inventory maintenance and the development of a
display function for the combined and infotainment system and the implementation of the
software for character recognition (English and Chinese) as well as for voice-over-IP (letter to
speech), the software development for connected emergency functions (eCall) for a European
systems supplier, the development of inverter electronics regarding an electrical turbocharger
for a European systems supplier and the development of high-voltage lithium ion batteries for
an OEM in the automotive industry. Additionally, we were entrusted with the integration of the
steering wheel and the gear shift electronics as well as a transparent OLED display (including
touch screen) in the center console of a sports car.
With €123.8 million or a share of 18.0% in total sales revenues and changes in inventories in the
fiscal year ended December 31, 2014, E/E is currently our second largest segment after Vehicle
Engineering by sales revenues and changes in inventories. In this segment, we generated
approximately two thirds of our revenues in the fiscal year ended December 31, 2014 with test
233
and validation as well as systems engineering, with each of these two activities contributing
about a third of our revenues and the activity embedded systems adding to our revenues
strongly as well.
The segment is divided into the E/E Vehicle Engineering division, the E/E Systems Engineering
division, the E/E Embedded Systems division and the E/E Car-IT division.
the E/E segment:
Month -60
-48
Research & advanced
development
SOP
0
-36
Concept & styling
Series development
EOP
84+
Production
E/E Vehicle
Engineering
E/E Architectures
E/E Functions Development
E/E Functions Validation
Wiring and E/E Component Package
E/E Systems
Engineering
Requirements Management
System Implementation
System Validation
Vehicle Integration
E/E Embedded
Systems
ECU Conception and Specification
Hardware Development
Software Development
Integration and Validation
E/E
Car-IT
Standardization
Consulting
Engineering
Vehicle / Project independent services:
Car-IT Services and Software Products
Systems Solutions and Tools (e.g. test racks, measurement tools,
etc.)
a.
E/E Vehicle Engineering Division
The E/E Vehicle Engineering division takes on the functional development of electrical and
electronic systems in derivative and complete vehicle projects, commissioning, validation and the
approval process.
Š
E/E architectures: We develop new electrical architectures (benchmarks, concepts,
requirements management and partitioning of functions and systems).
Š
E/E functions development: We offer E/E functions development on total vehicle level from
concept phase to development phase to series maintenance.
Š
E/E functions validation: We assume the planning and execution of test and validation for
the interplay of all E/E systems in static and dynamic laboratory and prototype vehicles.
Š
Wiring and E/E component package: We execute release, draft and control activities,
including fastening elements, cable protection work, cable conduits and circuit plans, in
developing and integrating the physical electrical system into the vehicle.
b.
E/E Systems Engineering Division
In our E/E Systems Engineering division, we handle project packages from concept planning and
specification to integration and testing of innovative E/E systems for vehicle manufacturers and
their systems suppliers.
Š
Requirements management: We develop and define system requirements regarding functions,
sensors, actuators, electronic control units (ECUs), interconnection and diagnosis.
234
Š
System implementation: Our services include the implementation of several components to a
system (ECU, sensors, actuators).
Š
System validation: We offer system validation regarding functions, interconnection and
diagnosis.
Š
Vehicle integration: The physical and functional integration of E/E systems forms part of our
services portfolio.
c.
E/E Embedded Systems Division
Our E/E Embedded Systems division takes on complex projects from concept planning, to series
development, assembly of prototypes and initial start-up of electronic control units for systems
suppliers and vehicle manufacturers.
Š
ECU conception and specification: Our services in this area comprise the optimal architecture
concept of electronic control units as well as specification, simulation and calibration of
control systems.
Š
Hardware development: In respect of hardware development we define the hardware
architecture, do the circuit design and layout and execute the circuit and thermal simulation.
Furthermore we are specialized in developing power electronics.
Š
Software development: We offer our experience in model-based software development from
architecture and applications to automatic code generation.
Š
System integration and validation: We specialize on integrating software modules into the
hardware and validating the virtual and physical functions on the component level.
Š
Systems solutions and tools:
their operation.
d.
We develop test racks and measurement tools and also offer
E/E Car-IT Division
Our E/E Car-IT division is the driver for digital transformation and specialized in automotive
software development. This division offers software, services and system solutions for the
connected mobility industry that we develop ourselves. We use this expertise to offer our
customers (OEMs, systems suppliers and IT companies) engineering and development services in
the context of connectivity, e.g. car to x communication.
Š
Services and software products: We develop, provide and distribute Car-IT services,
applications, tools and software systems solutions.
Š
Engineering: Our portfolio in this area comprises engineering services for software products
of connected mobility from specification and realization to integration and validation.
Š
Standardization: We offer standardization of key technologies regarding connectivity.
Š
Consulting: Innovation scouting and evaluation as well as consulting in the area of digital
transformation form part of the services we offer.
3.
In the Production Solutions segment, which is based in 19 German and five international
locations and comprises approximately 1,300 employees (including trainees) worldwide, we act
as an holistic engineering partner for the development and implementation of production
processes, including turnkey engineering. Besides handling the individual stages of the product
creation process and offering all factory and production systems-related services, we also have
the ability to plan complete factories, including interaction between different cross processes,
and provide single-source support throughout the implementation stage. Within the context of
simultaneous engineering, we take an integrative approach. i.e., one in which the vehicle
engineering divisions, plant design and production simulation all work together to create highly
suitable project interfaces. In this context, our Production Solutions segment caters to the core
235
aim of the Industry 4.0 project which is the development of intelligent products and processes
that critically depend on the close interaction between electrical and mechanical engineering
and IT.
Examples of completed projects in the Production Solutions segment include the general
planning for a new engine plant in China for an automotive OEM, a full system development
(full engineering of a body in white line for the complete floor assembly) for an automotive
OEM in Germany, the USA and South Africa, the 3D engineering with our Digital Factory and
production engineering for a heavy duty truck OEM, the turnkey project management and
integration in an automotive production plant and the conversion of an assembly line into
paperless production for an automotive OEM in Germany.
With €106.4 million or a share of 15.4% in total sales revenues and changes in inventories,
Production Solutions was our third largest segment in the fiscal year ended December 31, 2014
by sales revenues and changes in inventories. In this segment, we generated more than half of
our revenues in the fiscal year ended December 31, 2014 with systems development and
robotics, with the activity process planning contributing to our revenues strongly as well.
The Production Solutions segment consists of three divisions: the Concept Engineering division,
the Realization Engineering division and Feynsinn.
the Productions Solutions segment:
Month -60
Research & advanced
development
-48
SOP
0
-36
Concept & styling
Series development
EOP
84+
Production
Architecture and Construction Planning/Utilities Planning
New production
technology
(Digital) Factory Planning
Forming Technology Tool & Dies
Process Planning (Body Shop, Paint, General Assembly, Logistics)
Systems Development
Robotics
Automation
Factory Simulation and Production IT
Safety Engineering Services
Vehicle / Project independent services (Feynsinn):
Executive Consulting (regarding value chain)
Technical Consulting (regarding value chain)
Implementational Training
a.
Concept Engineering Division
In our Concept Engineering division we offer our customers an integral approach in process
planning. We support companies in factory and production planning, i.e., we assist with the
implementation of new plans, but also with the conversion or expansion as well as the
optimization of existing systems whilst in operation.
By way of simultaneous engineering, we help our customers improve timing, costs, risks, quality
and efficiency of projects. In order to achieve maximum project success, we are equally
dedicated to project organization, communication and decision-making procedures. In addition,
we pursue an interdisciplinary way of working.
236
Production Solutions furthermore offers its customers profound know-how in production IT, or
carbon-fiber reinforced polymer (CFRP)/Plastics (from process development to planning of
complex products and production facilities as well as the quality control) and energy simulation
of entire plants.
Š
Digital factory: We support our customers in mapping, simulating and optimizing real-world
processes digitally and offer services from project scheduling and planning to layout
definition, simulation and optimization to offline programming. Process validation in the
digital factory is key for cost-minimization when implementing new production processes.
Š
Factory planning: In factory planning we offer product, process and operating analysis,
location analysis and planning, value stream analysis, design and optimization, concept
planning for product and factory and start-up and error management.
Š
Forming technology tool and dies: Tool making encompasses mechanical production, tool
making, tool assembly and try-out, press shop for low-volume production and quality
assurance and measuring technology. We offer support in the design and development of
press tooling where engaging in the systematic application of virtual CAE methods. Such
simulations allow us at an early stage in the development process to set the direction for
achieving the functional objectives requested by our customers and evaluate their design
targets with a view to cost and feasibility.
Š
Process planning (body shop, paint, general assembly, logistics): Our services in this area
consist of simultaneous engineering, concept product specification and detailed planning.
When designing the stations of an assembly sequence, we pay attention to efficient and
ergonomic materials supply, reducing distances to be covered on foot, and installationoriented line balancing. MTM (Methods-time Measurement) analyses are carried out for every
assembly process, to calculate production time and what resources are necessary.
Š
Factory simulation and production IT: In factory simulation we optimize our customers
business processes, controls and material flow throughout the entire production life cycle,
from the initial concept until the equipment is taken out of service. The systematic application
of process simulation during all stages of a project supports decision-making processes to find
a tailor-made, investment-optimised concept by providing key figures and process instructions.
Process simulations allow our customers to evaluate extreme scenarios and define suitable
measures in the concept and planning phase as well as in the operating phase without
influencing ongoing processes. In Production IT, the planning, implementation and support of
customized control systems is our target. Our holistic understanding of the cooperation
between the supplier, production and customer, but also within the production areas, enables
us to offer our customers customized instrumentation and a control concept adjusted to their
needs.
b.
Realization Engineering Division
This division’s spectrum of services ranges from the digital implementation of the initial idea to
the creation of detailed designs and production drawings.
Š
Systems development: Our spectrum of design services ranges from the digital
implementation of the initial idea to the creation of detailed designs and production
drawings and includes, in particular, a simultaneous engineering phase. Within the context of
simultaneous engineering, we favor an integrative approach, with body engineering, plant
design, production simulation and production systems all working together, to create ideal
project interfaces.
The production design department offers integrated competence for one-off solutions, but
also for turnkey systems for the complete body in white department. With our extensive CAD
capacity for all common systems, we are well able to handle complex production development
projects.
237
Š
Robotics: The field of robotics is a vital link between engineering and realization. Early
involvement in the engineering process enables us to systematically optimize the production
processes, cycle times and locking mechanisms of our customers’ equipment.
Š
Automation: To round off our production engineering portfolio across all disciplines, we
added automation to our services a few years ago and now offer a complete engineering
package, mechanically, electrically and functionally validated by means of virtual
commissioning, without any interface-related loss.
c.
Feynsinn
Our Product Solutions segment is complemented by our process consulting division “Feynsinn”
which closes the gap between product development and production development. Feynsinn
improves software and IT-supported processes and methods, in particular product design,
development and production and sales and marketing.
Š
Executive consulting (regarding value chain process): Feynsinn deals with topics like
potential analysis, process prototyping, lean development/development 4.0 and lean
manufacturing/industry 4.0. Feynsinn offers also technical consulting through PLM/PDM and
product cost management.
Š
Technical consulting (regarding value chain process): Feynsinn also offers consulting,
conceptual and realization services in the field of visualization technologies involving realtime visualization, virtual reality, augmented reality, offline rendering, animations and press
photos.
Š
Implementation and training: In contrast to other consulting services, Feynsinn also supervises
the implementation of solutions. Customized training opportunities complete Feynsinn’s
portfolio.
VI.
CUSTOMERS
Our customer base reflects our strong focus on the automotive industry: approximately 67% of
our sales revenues in the fiscal year ended December 31, 2014 were derived from customers that
are passenger car manufacturers and approximately 5% from commercial vehicle manufacturers
while approximately 27% were contributed by other manufacturers, i.e., predominantly
automotive systems suppliers.
We maintain particularly strong relations with all major German passenger car and commercial
vehicle manufacturers. In the fiscal year ended December 31, 2014, we generated 78% of our
sales revenues and in the nine-month period ended September 30, 2015 approximately 77% of
our sales revenues in Germany. 12% of our sales revenues in the fiscal year ended December 31,
2014 and approximately 13% of our sales revenues in the nine-month period ended
September 30, 2015 were derived from customers within the rest of Europe.
Our largest customers (divided according to customer sales divisions and not including FFT
Produktionssysteme GmbH & Co. KG) measured by sales revenues in the fiscal year ended
December 31, 2014 are set out in the following table:
Selected customer sales divisions in the financial year ended
December 31, 2014 (in % of total sales revenues)
Customer sales division A(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer sales division B(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21%
16%
Customer sales division C(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1%
Customer sales division D(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer sales division E(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17%
6%
Customer sales division F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4%
Customer sales division G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2%
238
(1) Customer sales division A: Volkswagen group (excluding Audi and Porsche); customer sales division B: Audi group; customer
sales division C: Porsche group; customer sales division D: BMW group; customer sales division E: Daimler group.
Our five largest customer sales divisions contributed approximately 64% of our sales revenues in
the fiscal year ended December 31, 2014 and 59% in the nine-month period ended September
30, 2015, respectively. We derived approximately 55% of our sales revenues in the fiscal year
ended December 31, 2014 (approximately 53% in the nine-month period ended September 30
2015) from our two major customer groups, the two German corporate groups Volkswagen and
BMW, with the Volkswagen group (Volkswagen, Audi and Porsche) generating approximately
38% of our sales revenues in the fiscal year ended December 31, 2014 and 38% in the ninemonth period ended September 30, 2015, respectively.
Recently, the competent U.S. authorities announced that they had discovered the presence of a
program in the engine software of certain vehicles having diesel engines manufactured by the
Volkswagen group. This program, these authorities claimed, violates U.S. environmental
standards by manipulating the exhaust emissions of the affected vehicles during emissions
testing. The Volkswagen group subsequently stated that the affected Diesel engine had been
built into approximately 11 million vehicles globally. The Volkswagen group recognized an
initial provision of €6.7 billion in its profit and loss statement for the third quarter of its current
fiscal year, for anticipated costs to repair affected diesel engines, however, this did not address
any legal risks connected to this issue which could not be assessed at that time and may result in
considerable financial charges. Subsequently, the Volkswagen group also announced that
during the course of internal investigations unexplained inconsistencies were found with regard
to type approval CO2 levels, affecting around 800 thousand vehicles with diesel engines as well
as around 98 thousand vehicles with petrol engines from the Volkswagen Group. The
Volkswagen group’s initial estimate for the additional economic risks from these findings
amounts to approximately €2 billion. As a consequence of this situation, which is still subject to
development, the Volkswagen group and the vehicles produced by it have come under scrutiny
by the authorities of several other countries, some of which have deployed preliminary measures
such as sales restrictions. We are currently not able to predict the effects these developments,
including potential substantial fines or other penalties, will have on the Volkswagen group, our
largest customer group, and any other of our major customers. The new management of
Volkswagen group has announced that the group’s R&D program is under review and that
investments not deemed absolutely necessary will be cancelled or delayed. As of the date of this
prospectus, EDAG does not have any contracts with Volkswagen in the area of powertrain and
has not had any cancellations of projects with the Volkswagen group. Also, we currently have
not been notified by the Volkswagen group that it plans to reduce engineering services contract
volumes with us.
Among the major German OEMs, we make an effort to foster our relationships with premium
OEMs. In the fiscal year ended December 31, 2014, we derived approximately 40% of our sales
revenues and in the nine-month period ended September 30, 2015 approximately 39% from
BMW, Audi, Daimler and Porsche.
Due to our customer-related international footprint and our continuous business development
efforts, our customers today also include reputable non-European car manufacturers and we
generated 10% of our sales revenues in the fiscal year ended December 31, 2014 and
approximately 11% of our sales revenues in the nine-month period ended September 30, 2015
outside of Europe.
In alphabetical order our most important customers in the automotive industry are Audi, BMW,
BMW Brilliance, Bugatti, Chery, Daimler, Ford, GM, Honda, Hyundai, Opel, Porsche, Renault,
Seat, Skoda, Toyota and Volkswagen.
Our most important customers (in alphabetical order) in the commercial vehicle industry include
Agrale, DAF, Daimler, MAN, Marcopolo, Navistar, Vanhool and Volvo.
Our most important customers from the automotive systems supplier segment (in alphabetical
order) include Benteler, Bosch, Continental, Delphi, Dräxlmaier, Johnson Controls, Kautex,
Krone, Magna, SMP, Polytech, Schmitz Cargobull, TRW and World Auto Steel.
239
According to our own estimates and based on revenue in the fiscal year ended December 31,
2014, we concluded almost all our contracts in the Vehicle Engineering segment in the form of
work packages (approximately 67%) and service contracts (approximately 29%). The average
contract size in this segment was approximately €230 thousand in the fiscal year ended
December 31, 2014. In the E/E segment we also concluded almost all our contracts in the form of
work packages (approximately 62%) and service contracts (approximately 34%). The average
contract size in this segment was approximately €141 thousand in the fiscal year ended
December 31, 2014. Likewise, in the Production Solutions segment we concluded almost all our
contracts in the form of work packages (approximately 83%) and service contracts
(approximately 13%). The average contract size in this segment was approximately €293
thousand in the fiscal year ended December 31, 2014.
VII. COMPETENCE CENTERS
In order to accommodate the increasing complexity of the car of the future and meet the high
technological requirements placed on it and its development, EDAG has concentrated the
special knowledge needed to focus on the development of new trends in four competence
centers: “Lightweight Construction”, “E-Mobility”, “Car-IT” and “New Production Technology”.
a.
Lightweight Construction
Lightweight construction is an extremely diverse and interdisciplinary technology and our
Competence Center is often involved in pilot projects and technology scouting. The spectrum of
lightweight production technologies we work with ranges from multi-material systems to
energy-efficient and affordable lightweight construction methods. Our vehicle engineering
services cover a broad range from motor sports to the premium segment as well as special
solutions for electric mobility to classic series production. As keeping manufacturing costs at an
acceptable level is always an issue with lightweight construction, the wide variety of lightweight
technologies available makes optimization a complex issue for the OEM.
We concentrate on a broad range of lightweight strategies for the automotive industry,
regardless of what strategies the manufacturers and systems suppliers are following themselves.
We invest our research activities in steel lightweight construction with innovative steel qualities
and intelligent semi-finished products, light metal solutions in cast metal and/or sheet
construction and fiber composite competencies.
b.
E-Mobility
We see further technological trends in energy management, new E/E architectures and the
networking of electric-powered vehicles, and are continuing to develop the competencies
required by our customers. Our aim is to guarantee a fully integrated concept for the
development of electric vehicles. With specially devised powertrain, architecture, interface, body
and safety solutions, intelligent charging systems, layout and integration of electric drive
systems and energy storage units and vehicle energy management we are constantly pushing
ahead with further developments in this field.
c.
Car-IT
The increasing importance of electronics, software and networking in our day-to-day lives is also
making itself felt in the world of mobility. With the legal requirement for an emergency call
system and with Regulation (EU) 2015/758 introducing an obligation to have eCall in new
vehicles form March 2018 throughout the EU, there is already a connection with the
infrastructure, and this marks the starting point for new functions. The Internet of Things, the
interconnection of everyday objects and universal interfaces for electronics, has also reached
automotive development. Today’s most important technological trends in Car-IT include
connectivity, intelligent assistance systems (ADAS), charging interfaces for e-mobility, the
integration of database systems, new operating concepts or autonomous driving, integration in
existing architectures or completely new developments, embedded software/hardware
development but also application development, visualization and all safety aspects.
240
d.
New Production Technology
In order to accommodate the current trend towards weight reduction our Competence Center
New Production Technology assists our customers in attaining and verifying necessary process
capabilities for new joining technologies. We work on new material combinations in order to
enable their series production. The produced materials are validated by means of rigorous and
comprehensive testing.
Another focus of our competence center New Production Technology is the use of lightweight/
sensitive robots which assist our design engineers in terms of perspective in the development
process and thus advance the cooperation between humans and machines in the production
process.
Our engineers are also engage in additive manufacturing, another future trend in the
automotive industry.
VIII. MARKETING AND SALES ACTIVITIES
While market developments vary from region to region, our customers mostly operate on a
global level. Additionally, the markets which we depend on are subject to cyclical developments.
Overall, this volatile environment influences our ability to anticipate our customers’ needs and
requires flexibility regarding workforce and service offering.
Adjusting to globalization and the increasing specialization of our customers as well as
unpredictable market developments, we have aligned our marketing and sales organization
towards customer-specific workflows and streamline all activities related to individual customers
across different segments and divisions. In this way we ensure efficient customer care. Full
transparency of all material business transactions and customer strategies is key for our
customer relations performance. While this structural organization avoids redundancies and
unites customers’ concerns, it also provides our customers with contact persons below the
management level who are able to address cross-divisional questions. Such customer relations
benefit us as well as the customers.
Our sales organization is divided into different business units. These business units correspond
to our major customers but we also have a business unit for systems suppliers and a general unit
for business development. Each of these divisions has a dedicated sales organization which is in
direct contact with the respective customers and which is responsible for the sales performance
of the relevant division and segment respectively. Our standardized SAP-based quotation
process ensures efficiency, short response time and uniform pricing criteria.
Our marketing department is divided into marketing and sales exhibitions, communications and
marketing. Due to the confidential nature of a substantial part of our business with OEMs, our
marketing strategy focuses on values, morale and competence and helps us position ourselves as
strong B2B brand, acquire new customers, retain existing customers and increase our awareness
as a brand employer. Our digital marketing footprint includes our own websites, social media
and mobile applications, e-advertisements and emails as well as online magazines and external
blogs.
Innovation is central to our ability to provide customers with an attractive and value-adding
service offering and enables us to participate in the ongoing trend of the global model and
technology initiatives launched by the leading vehicle manufacturers. While we generally focus
on development rather than research and our business model is not based on proprietary
intellectual property, we nevertheless maintain a development center in Fulda, Germany. We
believe that our investment in project-independent research and development, such as the
EDAG Light Cocoon car, ensures that we maintain customer awareness, brand recognition,
competitiveness and know-how in the automotive ESP market. We believe that this earns us a
reputation as a top-performing ESP and helps us attract new customers as our development
activities often provide an initial point of access to potential customers, for example when we
are invited to present our lightweight concepts introduced at international car shows at the
241
place of business of car manufacturers. From such initial meetings and our presence at
international car fares, we are often able to solicit customer specific R&D projects and expand
our expertise, services and abilities in the process. Such projects, as we believe, strengthen our
clients’ confidence in our performance and help us win future business. Additionally, market
awareness and brand recognition help us attract new talent and play an important role in our
recruiting efforts.
IX.
EMPLOYEES
In the nine-month period ended September 30, 2015, we employed an average of 7,714
employees, compared to an average of 7,450 employees in the nine-month period ended
September 30, 2014 and 7,484 employees in the fiscal year ended December 31, 2014, 7,011
employees in the fiscal year ended December 31, 2013 and 4,557 employees in the fiscal year
ended December 31, 2012, including trainees but excluding employees from discontinued
operations in each period. Since September 30, 2015, there has been no material change in the
number of our employees until the date of this prospectus.
The following table contains a summary of the average number of employees of our Group in
the nine-month period ended September 30, 2015 and in the fiscal years ended December 31,
2014, 2013 and 2012, each subdivided by segments:
For the nine-month
period ended
September 30,
For the fiscal year ended December 31,
2015
Breakdown according to
segments
2014
(consolidated,
unaudited)
Vehicle Engineering . . .
Electrics/Electronics (E/E)
Production Solutions . . .
Miscellaneous . . . . . . . .
Total . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
2013
(combined,
audited)
(consolidated, audited)
4,764
1,659
1,291
—
7,714
4,806 (64.2%)
1,292 (17.3%)
1,120 (15.0%)
266 (3.6%)
7,484 (100%)
2012
4,645 (66.3%)
1,043 (14.9%)
873 (12.5%)
450 (6.4%)
7,011 (100%)
2,644 (58.0%)
354 (7.8%)
732 (16.1%)
827 (18.1%)
4,557 (100%)
The following table contains a summary of the average number of employees of our Group in
the nine-month period ended September 30, 2015 and in the fiscal years ended December 31,
2014, 2013 and 2012, each subdivided by geographic regions:
For the nine-month
period ended
September 30,
For the fiscal year ended December 31,
2015
Breakdown according to
geographic regions
Germany . . . .
Rest of Europe
North America
South America
Asia . . . . . . . .
Africa . . . . . . .
Total . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2014
(consolidated,
unaudited)
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
2013
(consolidated, audited)
5,947
956
74
347
390
—
7,714
5,782 (77.3%)
941 (12.6%)
131 (1.8%)
301 (4.0%)
329 (4.4%)
—
7,484 (100%)
5,490 (78.3%)
876 (12.5%)
96 (1.4%)
268 (3.8%)
281 (4.0%)
—
7,011 (100%)
2012
(combined,
audited)
3,807 (83.5%)
322 (7.1%)
113 (2.5%)
143 (3.1%)
172 (3.8%)
—
4,557 (100%)
The tables above do not include any employees from discontinued operations, which were none
in the nine-month period ended September 30, 2015 and in the fiscal years ended December 31,
2014 and 2013 and approximately 125 in the fiscal year ended December 31, 2012.
In most countries in which we operate we are currently not bound by collective bargaining
agreements with trade unions. In some countries employee representative bodies have been
242
established. For example, in Germany a works council (Betriebsrat), a company-wide works
council (unternehmenseinheitlicher Betriebsrat) and a joint works council (Gesamtbetriebsrat)
are in place which enjoy certain information, consultation and co-determination rights,
especially with regard to voluntary compensation matters and benefits and in case of
restructurings or redundancies. In the recent past, we have not been subject to strikes or work
stoppages. We strive to enter into shop-level collective agreements with our employee
representatives on terms satisfactory to all parties in the future (see also “A. Risk Factors—II.
Regulatory and Legal Risks—2. Risks deriving from the potential invalidity of the election of the
company-wide works council (“unternehmenseinheitlicher Betriebsrat”) and the collective
agreements entered into by that committee could have a material adverse effect on our
business financial condition and results of operations”).
Our staff’s skills and qualifications form the basis of all services that we provide. The personnel
service, recruitment, personnel support and development functions are performed by our
human resources department.
Our personnel marketing targets both young and experienced professionals. To counteract
demographic changes at an early stage, we engage in higher-education marketing. In
cooperation with most important universities, our personnel marketing in this respect consists of
a carefully coordinated mix of advertising opportunities on college campuses in the form of
screen advertising, mailings and other campaigns. With regard to traditional advertising, we
focus these marketing campaigns on transport media and billboard advertising near college
campuses to achieve greatest outreach with students. Additionally, our staff, including our
management who invest a considerable amount of time in recruiting activities, visit colleges and
graduate fairs and attend selected specialist job fairs. In 2014 we furthermore initiated our
social media presence, for example on XING, Facebook, LinkedIn and twitter, and started online
and social media advertising to further extend public awareness of our brand and thus to
facilitate the recruitment of new employees.
In the past few years, including the fiscal year ended December 31, 2014, we experienced a
strong growth in the number of applications, whereby the number of applications exceeded the
number of employees we actually hired by a high multiple. For the mid-term, we generally strive
to hire a significant number of new employees per year.
Our mix of experienced and young employees is an integral part of our recruiting strategy. For this
reason, we encourage both initial vocational training and continuing technical and personal
training of our existing workforce. We attach great importance to hiring and retaining highly
competent employees and provide them with regular professional training to enhance their skills
and qualifications and implement various incentive programs to reinforce their identification with
the EDAG Group. We further provide high-potential employees at all levels with numerous career
opportunities and training to further develop their professional skills and competence, including
offering targeted and individually tailored career development training programs and job
rotation programs. In 2014, we offered selected target groups extensive development
opportunities to increase communication, leadership and project management skills.
On December 31, 2014 the EDAG Group comprised a total of 7,401 employees of which 505
were trainees and work-study students while as of September 30, 2015, our Group had 8,063
employees of which 563 were trainees and work-study students (including trainees but
excluding employees from discontinued operations at each date). Approximately three quarters
of our employees in Germany had an academic/engineering background. This includes
employees with similar qualifications, e.g. directors, divisional and department heads, team
managers, system and support engineers, “Meister”, technicians, etc., but excluding trainees.
The percentage of employees with academic/engineering background and the number of
trainees and work study students vary slightly from segment to segment.
The Company was incorporated on November 2, 2015. As of the date of the opening statement
of financial position of the Company, the Company had no employees. Between the date of its
incorporation and the date of this prospectus, the Company employed 3 employees.
243
X.
REAL PROPERTY OWNED AND LEASED
Our main operating subsidiary’s corporate headquarters are located at Wiesbaden, where we
lease one office building. The registered office of the Company is at Schlossgasse 2, 9320 Arbon,
Switzerland. We lease almost all the facilities for our global operations and do not currently
own any material property.
The following table provides an overview of the material real property leased by Group
companies as of September 30, 2015:
Location
Approx. Size(1)
(in m2)
Primary Use
Leased by
Braunschweiger Straße 108 – 110,
38518 Gifhorn
7,080
office; hangar
Bremer Straße 11, 80807 Munich
1,047
office
Weimarer Straße 14 and Frankfurter
Ring 178, 80807 Munich
7,716
office; hangar
Weimarer Straße 14, 80807 Munich
2,800
hangar
Frankfurter Ring 193a, 80807
Munich
1,597
office
Kreuzberger Ring 40, 65205
Wiesbaden
5,777
office
Max-Diamand-Straße 7, 80937
Munich
3,464
office; hangar
Reesbergstraße 1, 36039 Lehnerz
(Fulda)
8,640
office; hangar
22,028
office; hangar
Morsestrasse 9, 50769 Cologne
2,258
office; hangar
Robert-Bosch-Strasse 7a and 11,
85058 Ingolstadt
10,910
office; hangar
Christine-Englerth-Strasse 32, 45665
Recklinghausen
1,432
office; hangar
Dr.-Ludwig-Kraus-Strasse 2, 85080
Gaimersheim
2,513
office; hangar
BFFT
Dr.-Ludwig-Kraus-Strasse 3, 85080
Gaimersheim
1,022
office
Bunsenstrasse 38, 85053 Ingolstadt
5,002
office; hangar
Eisenstrasse 48+48a, 65248
Ruesselsheim
2,622
office; hangar
Friedrichshof 14, 71297 Moensheim
1,936
office
32,633
office; hanger
Max-Planck-Strasse 9-13, 71254
Ditzingen
5,575
office; hangar
Schickardstrasse 60, 71034
Boeblingen
5,589
office; hangar
Steinauer Straße 20, 36100
Petersberg (Fulda)
Hannoversche Strasse, 38448
Wolfsburg-Warmenau(2)
(1) Size of leased space might differ from operating capacity.
(2) Location is currently under construction. Completion is envisaged for the end of 2015.
244
The Company was incorporated on November 2, 2015. As of the date of the opening statement
of financial position of the Company, the Company did not own or lease any material property.
Between the date of its incorporation and the date of this prospectus, the Company did not
acquire or lease any material property.
XI.
INTELLECTUAL PROPERTY
We own the word and figurative trademark “EDAG” in Germany and in the form of a European
trademark in Europe, and furthermore in Canada, India, Japan, South Korea, Mexico, Russia,
China, the United States of America, Brazil and Malaysia.
Our Group also owns a number of internet domains (both country-code and generic) which
relate to our company and trading name EDAG (e.g. “edag.de”, “edag-ps.de”, “edag.cn”), to
Rücker (e.g. “rueckerlypsa.es”), and to BFFT (e.g. “bfft.de”, “bfft.cn”) as well as various more
general internet domains (e.g. “entwicklung4-0.de”).
EDAG Engineering GmbH currently owns 13 patents and 11 utility models and has made 16
patent applications in various countries. Furthermore, it owns 55 individual trademarks, while
EDAG Production Solutions holds 5 patents, 3 utility models and has made one patent
application in various countries and owns 14 individual trademarks. The patents, patent
applications, utility models and trademarks we own are not material to our business.
XII. MATERIAL CONTRACTS
The following section describes agreements to which one or more of the Group companies is a
party and which we consider to be material to our Group. The terms used in the respective
agreements and in the descriptions of those agreements do not necessarily have the same
meaning as similar terms that may be used in the financial statements of EDAG Engineering
Schweiz Sub-Holding AG or EDAG Engineering GmbH included in this prospectus (see “V.
Financial Information”), including terms that have a certain meaning under IFRS or the Swiss
Code of Obligations (Obligationenrecht).
1.
Financing Agreements
a.
On the basis of a credit agreement entered into on December 18, 2013, between ATON Group
Finance GmbH and ATON Engineering AG (now EDAG Engineering GmbH), ATON Group Finance
GmbH granted our subsidiary a credit facility in the amount of €141.3 million for the purposes
of refinancing our then existing indebtedness. The credit facility will terminate on November 6,
2018 and has an interest rate of 5% per annum during its term of approximately five years. The
interest payment date is November 6 of each year on which date we may also make individual
installment payments of up to €20.0 million if financed from our free cash flow. We are also
entitled to make extraordinary installment payments if the monies for such repayments are
derived from capital markets transactions. In 2014, we made payments on September 5, 2014 in
the amount of €14.0 million, on November 20, 2014 in the amount of €16.0 million and on
November 26, 2014 in the amount of €4.0 million. Pursuant to an agreement dated June 26,
2015, ATON Finance GmbH, EDAG Engineering GmbH and EDAG Engineering Holding GmbH
(the German intermediate holding company of the Group, through which the Company,
following consummation of the Contribution, will indirectly hold all shares in EDAG Engineering
GmbH) agreed to a transfer of the credit facility via assumption of debt with EDAG Engineering
Holding GmbH becoming the new debtor under the credit facility with effect as of September
30, 2015. In consideration for the assumption of debt, EDAG Engineering GmbH increased its
capital reserves by €107.3 million as of September 30, 2015. As of September 30, 2015, noncurrent liabilities to ATON Group Finance GmbH with a term of maturity of less than five years
amounted to €107.3 million.
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b.
BFFT Holding GmbH
On the basis of a credit agreement entered into on December 18, 2013, between ATON Group
Finance GmbH and our subsidiary BFFT Holding GmbH, ATON Group Finance GmbH granted our
subsidiary a credit facility in the amount of €51.5 million for the purposes of refinancing our
then existing indebtedness. The credit facility will terminate on November 6, 2018 and has an
interest rate of 5% per annum during its term of approximately five years. The interest payment
date is November 6 of each year on which date we may also make individual installment
payments of up to €6.0 million if financed from our free cash flow. We are also entitled to make
extraordinary installment payments if the monies for such repayments are derived from capital
markets transactions. As of September 30, 2015, non-current liabilities to ATON Group Finance
GmbH with a term of maturity of less than five years amounted to €51.5 million.
c.
Cash Pooling Agreement
We are party to a cash pooling agreement with the Selling Shareholder. On February 16/27,
2012, the Selling Shareholder and EDAG GmbH & Co. KGaA (now EDAG Engineering GmbH)
concluded a framework agreement for the provision of cash management services under which
the Selling Shareholder acts as a management agent for a cash pooling arrangement with
various of its subsidiaries, including EDAG Engineering GmbH (the “Participating Companies”).
Pursuant to the cash pooling agreement, the cash of all parties subject to the agreement, is
automatically pooled at ATON GmbH at the end of each day. Any negative balance on any
accounts of the Participating Companies is automatically settled by transfer of funds by ATON
GmbH to the respective account of the Participating Companies, thus setting these accounts to
zero at the end of each day. Based on yearly liquidity plans, ATON GmbH and EDAG Engineering
GmbH agreed on quarterly credit lines that may be drawn by EDAG Engineering GmbH at an
interest rate of a three-month EURIBOR plus a margin of 2.5% per annum. ATON GmbH and
EDAG Engineering GmbH agreed to terminate the cash pooling agreement prior to the
settlement of the Offering.
d.
Credit Agreements with VKE – Versorgungskasse EDAG-Firmengruppe e.V.
As of September 30, 2015, we have obligations, including interest, under two credit agreements
with VKE – Versorgungskasse EDAG-Firmengruppe e.V. (“VKE”) in the amount of
€20,199,385.12.
On January 1, 2015, EDAG Engineering AG (now EDAG Engineering GmbH) and VKE increased
an existing credit agreement by €16,700,000.00 to €16,839,383.63 at an interest rate of 4.2% per
annum. The credit agreement has a fixed term until December 31, 2015 but will be extended
automatically by a year. It may be terminated by either party at the end of a month upon one
month’s notice. If VKE does not wish to receive interest payments due at the end of each year,
the interest payment will automatically increase the amount of the loan.
On January 5, 2015, EDAG Production Solutions GmbH & Co. KG and VKE entered into a credit
agreement in the amount of €3,265,382.60 at an interest rate of 4.2% per annum. The credit
agreement has a fixed term until December 31, 2015 but will be extended automatically by a
year. It may be terminated by either party at the end of a month upon one month’s notice. If
VKE does not wish to receive interest payments due at the end of each year, the interest
payment will automatically increase the amount of the loan.
No material changes with regard to the financing agreements shown in this section have
occurred since September 30, 2015.
2.
Agreements relating to Acquisitions and Disposals
a.
Acquisitions
Rücker Group
Pursuant to a share purchase and transfer agreement executed September 24, 2012 (the “Rücker
SPA”), our subsidiary ATON Engineering AG (now EDAG Engineering GmbH) purchased
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4,932,265 shares (equal to 58.86% of the issued and outstanding share capital) of Rücker AG
from Nosta Oldtimer-Vermietungs-GmbH, a company controlled by Wolfgang Rücker. The total
purchase price for the shares amounted to €78.9 million and the share transfer was effected on
September 24, 2012.
The remaining shares of Rücker AG, Wiesbaden were acquired in 2012 and 2013, inter alia, by
launching a voluntary takeover offer in the amount of €16.23 per share. After having acquired a
total of 90.04% of the share capital of Rücker AG, ATON Engineering AG (now EDAG
Engineering GmbH) on May 3, 2013 requested squeeze-out proceedings pursuant to the German
Transformation Act (verschmelzungsrechtlicher Squeeze-out). On August 23, 2013, the general
shareholders’ meeting of Rücker resolved the squeeze-out which became effective upon
registration with the commercial register on October 29, 2013. For more information on the
ongoing litigation in connection with the squeeze-out proceedings see “L. Business—XIII. Legal
and Arbitration Proceedings”.
BFFT Group
Pursuant to a share purchase and transfer agreement dated and executed on January 16, 2013
(the “BFFT SPA”) between our subsidiary BFFT Holding GmbH and Georg Xaver Behr, Markus
Fichtner and Frank Fichtner, BFFT Holding acquired the entire issued and outstanding share
capital of BFFT Gesellschaft für Fahrzeugtechnik mbH and BFFT Engineering GmbH for a total
purchase price of €49.8 million.
b.
Disposals
ED WORK companies
Pursuant to a share purchase and transfer agreement dated May 25, 2012 (the “ED WORK
SPA”), our subsidiary EDAG GmbH & Co. KGaA (now EDAG Engineering GmbH) sold and
transferred 67% of the issued and outstanding share capital of ED WORK Verwaltungs GmbH,
67% of the limited partnership interest in ED WORK GmbH & CO KG as well as a shareholder
loan to Kempfer & Kolakovic Personalmanagement GmbH (“Kempfer”). The remaining issued
and outstanding share capital and limited partnership interest were concurrently sold and
transferred to Kempfer by Elmar Hoff GmbH & Co. KG. In the fiscal year ended December 31,
2012, the total purchase price received by EDAG GmbH & Co. KGaA (now EDAG Engineering
GmbH) amounted to €6,687,000 (€2,687,000 for the shares and the limited partnership interest
and €4.0 million for the shareholder loan). The ED WORK SPA provides for standard
representations and warranties by EDAG GmbH & Co. KGaA (now EDAG Engineering GmbH) for
the benefit of the purchaser.
Rücker Aerospace Group
Pursuant to a sale and transfer agreement dated March 11, 2014 (the “Aerospace SPA”), our
subsidiary Rücker GmbH (now EDAG Engineering GmbH) sold and transferred all of the issued
and outstanding shares in Rücker Aerospace GmbH as well as a shareholder loan to AIDA
Development GmbH. In the fiscal year ended December 31, 2014, the preliminary total purchase
price amounted to €9,578,842 (€7,711,452 for the shares and €1,867,390 for the shareholder
loan). In the fiscal year ended December 31, 2014, the final purchase price amounted to
€10,376,404 (€8,564,132 for the shares and €1,812,272 for the shareholder loan). As part of the
transaction, Rücker GmbH (now EDAG Engineering GmbH) also sold the following subsidiaries
and affiliated companies of Rücker Aerospace GmbH: Rücker France SARL, Silver Aerospace B.V.,
Rücker Sier GIE, Rücker-CTEngineering GmbH, Incat Aircraft Design B.V. and Rücker Aerospace
Canada Inc.
The Aerospace SPA contains standard representations and warranties by Rücker GmbH (now
EDAG Engineering GmbH) for the benefit of the purchaser.
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Business division EDAG Werkzeug & Karosseriesysteme
By way of a spin-off and takeover agreement dated November 21, 2014, our subsidiary EDAG
Engineering AG (now EDAG Engineering GmbH) transferred its business division “Werkzeug &
Karosseriesysteme” (the “WuK business division”) to EDAG Werkzeug+Karosserie GmbH
(“EDAG WuK”) whose shareholders at the time were EDAG Engineering AG (now EDAG
Engineering GmbH) (approximately 33%) and FFT Produktionssysteme GmbH & Co. KG
(approximately 67%).
In the fiscal year ended December 31, 2014, as consideration for the transfer of the WuK
business division, EDAG Engineering AG (now EDAG Engineering GmbH) received a cash
payment in the amount of €15,707,127.29 and subscribed to a non-cash capital increase of EDAG
WuK by contribution in kind of the WuK business division. As a result of the capital increase that
became effective on December 4, 2014, the shareholding of EDAG Engineering AG (now EDAG
Engineering GmbH) in EDAG WuK increased to 49% of the issued and outstanding share capital
as of December 31, 2014. Accordingly, the share of FFT Produktionssysteme GmbH & Co. KG in
EDAG WuK decreased to 51% of the issued and outstanding share capital in the fiscal year
Rücker Vienna
Pursuant to a share purchase and transfer agreement dated and executed on July 31, 2014 (the
“Rücker Vienna SPA”), EDAG Engineering GmbH sold 2.78% of the shares in Wolfgang Rücker
Gesellschaft m.b.H. with its registered office in Vienna. The purchase price of €505.08 has been
paid in the fiscal year ended December 31, 2014. Rücker Gesellschaft m.b.H. sold 97.22% of the
shares in Wolfgang Rücker Gesellschaft for a purchase price of €17,663.13, due on July 31, 2014
to Hana Schmuck. The representations and warranties of the Rücker Vienna SPA take into
account that the buyer, Hana Schmuck, had been appointed managing director of Wolfgang
Rücker Gesellschaft m.b.H. with sole power of representation as of April 1, 2013.
EKS InTec GmbH
Pursuant to a share purchase and transfer agreement dated and executed on June 4, 2014 (the
“EKS InTec SPA”) Rücker GmbH (now EDAG Engineering GmbH) sold 51% in its subsidiary
Rücker EKS GmbH (now EKS InTec GmbH) to HORUS Vermögensverwaltungs GmbH & Co. KG for
a purchase price of €5,355,000 in the fiscal year ended December 2014, and 49% to FFT
Produktionssysteme GmbH & Co. KG for a purchase price of €5,145,000 in the fiscal year ended
December 2014. The parties agreed on a liability threshold of €50,000 and a warranty cap of
100% of the purchase price.
The EKS InTec SPA contains standard representations and warranties by Rücker GmbH (now
EDAG Engineering GmbH) for the benefit of the purchaser.
3.
Agreements relating to Real Estate
a.
Wolfsburg-Warmenau project
Pursuant to a lease agreement dated March 18, 2015, our subsidiary EDAG Engineering GmbH
entered into a lease agreement for office space at a property currently under construction in
Wolfsburg-Warmenau with Bertram Projekt Unodecima GmbH & Co. KG (the “Warmenau
Agreement”).
Under the Warmenau Agreement and certain ancillary facilities, EDAG Engineering GmbH will
lease 31,240.08m² of office space for a monthly net rent of €333,942.35 which will be adjusted
for inflation for any rental period commencing after an initial rental period of two years. The
lease is scheduled to start on December 15, 2015 (for 22,310.45m²) and January 15, 2016 (for an
additional 8,929.63m²). The Warmenau Agreement has a fixed term of 13.5 years and can be
terminated for the first time on July 31, 2029 upon a prior notice period of 18 months. If the
start of the lease is delayed, the fixed term will be adjusted accordingly. In case the Warmenau
Agreement is not terminated it will automatically be extended for a period of 12 months.
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Furthermore, EDAG Engineering GmbH has the right to extend the fixed term of the lease twice
for a period of five years each (i.e., for a maximum of ten years). Within the first four years of
the fixed term, EDAG Engineering GmbH may request the construction of additional office space
of approximately 3,024m².
b.
Sale-and-lease-back of five properties in Fulda, Cologne, Ingolstadt and Recklinghausen
In 2014, our subsidiary EDAG Engineering GmbH decided to sell and lease back five real estate
properties: Reesbergstraße 1, Lehnerz (Fulda); Steinauer Strasse 20, Petersberg (Fulda);
Morsestrasse 9, Cologne; Robert-Bosch-Strasse 7a and 11, Ingolstadt; Christine-Englert-Strasse
32, Recklinghausen (the “Properties”). For this purpose, EDAG Engineering GmbH initiated a
bidding process during which Zweite FOM Objekt GmbH & Co. KG (“FOM KG”) was selected as
purchaser, having offered the most favorable conditions for the transaction from the view of
the EDAG Engineering GmbH. The general partner of FOM KG is Zweite FOM Beteiligungs
GmbH (“FOM Beteiligung”) and the sole limited partners are EDAG Engineering GmbH and FOM
Real Estate GmbH (“FOM”). EDAG Engineering GmbH and FOM are also the sole shareholders of
FOM Beteiligung. At the end of the fiscal year 2014, EDAG Engineering GmbH held 49% of the
issued and outstanding share capital of FOM Beteiligung and 49% of the limited partnership
interest in FOM KG, with FOM holding the remainder in both companies.
On December 12, 2014, EDAG Engineering GmbH, FOM and FOM Beteiligung entered into a
shareholder agreement (the “SHA”) regarding the sale and lease back of the Properties. The
parties agreed that EDAG Engineering GmbH (i) would sell and transfer the Properties to FOM
KG for a total purchase price of €38,400,000 which is recorded as other receivables as of
December 31, 2014 (the “Purchase Price”) and lease the Properties back and (ii) would, under
the condition precedent of payment of the Purchase Price, sell and transfer its shares in FOM
Beteiligung, its limited partnership interest in FOM KG and certain shareholder loan receivable
to FOM for a purchase price of €12,750 plus the nominal value of an outstanding shareholder
loan receivables. The parties also agreed that FOM would obtain sufficient debt funding for
FOM KG under usual market conditions and provide any remaining funds to effect the payment
of the Purchase Price until December 30, 2015 at the latest, in the form of a shareholder loan.
Furthermore, FOM agreed to transfer its shareholding in FOM Beteiligung and its limited
partnership interest in FOM KG to EDAG Engineering GmbH (or a third party to be appointed by
EDAG Engineering GmbH) under the condition precedent of FOM’s withdrawal from the
transaction and the payment of the nominal value of the shareholding and the partnership
interest. Pursuant to the SHA, FOM had the right to withdraw from the obligation to procure
sufficient debt funding for the transaction until May 31, 2015, which would trigger a
contractual fine of €250,000. In anticipation of FOM’s potential withdrawal from the
transaction, HORUS Vermögensverwaltungs GmbH & Co. KG (“HORUS”) on November 26, 2014
entered into an undertaking to acquire FOM’s limited partnership interest in FOM KG in case of
FOM’s withdrawal and non-payment of the Purchase Price. The undertaking also provided for
the joint management of FOM Beteiligung by EDAG Engineering GmbH and HORUS.
To implement the measures agreed upon in the SHA, EDAG Engineering GmbH and FOM KG on
December 12, 2014 entered into purchase and transfer agreements with effect as of
December 29, 2015 regarding the Properties (the “FOM PTA”) for the Purchase Price which is
recorded as other receivables as of December 31, 2014 (Lehnerz: 9,758m²/€8,156,367.57;
Petersberg: 87,235m²/€13,593,600.00; Cologne: 6,153m²/€3,489,210.81; Ingolstadt:
18,421m²/€12,141,664.86; Recklinghausen: 3,076m²/€1,019,156.76). While possession, use, risk
and charges for the Properties were transferred to FOM KG, legal ownership remained with
EDAG Engineering GmbH for the time being. The FOM PTA provided for a contractual
termination right of EDAG Engineering GmbH in case of non-payment of the Purchase Price
within four weeks of the due date, such due date having been deferred, however, until
December 31, 2015. FOM KG was also entitled to terminate the contract until January 31, 2016
in case FOM withdrew from its obligation to secure sufficient funding for the acquisition.
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On December 12, 2014, EDAG Engineering GmbH and FOM KG also entered into lease
agreements regarding the Properties (Lehnerz: 9,758m²/monthly net rent of €45,000.00;
Petersberg: 87,235m²/monthly net rent of €95,833.00; Cologne: 6,153m²/monthly net rent of
€20,000.00; Ingolstadt: 18,421m²/monthly net rent of €89.166,00; Recklinghausen:
3,076m²/monthly net rent of €4,167.00). The lease agreements and the FOM PTA were
contractually linked in such way that a termination of the FOM PTA would automatically lead to
a termination of the lease agreements. The lease agreements were concluded for fixed terms
from December 29, 2014 until December 31, 2029 and provide for an automatic extension by
one year if they are not terminated in written form six months prior to the end of the contract
term. The payment of the monthly rents regarding the Properties was deferred until the
Purchase Price under the FOM PTA was paid.
FOM exercised its right to withdraw on May 28, 2015, triggering the contractual fine of
€250,000. As a consequence, EDAG Engineering GmbH and FOM KG on September 1, 2015
agreed to rescind the FOM PTA with retroactive effect. As a result, the beneficial ownership and
control of the Properties reverted to EDAG Engineering GmbH and the lease agreements
automatically terminated with retroactive effect. On August 20, 2015, EDAG Engineering GmbH
paid the nominal value of the shareholding in FOM Beteiligung and the partnership interest in
FOM KG, a condition precedent for the transfer under the SHA whose fulfillment led to EDAG
Engineering GmbH’s full control over these companies.
On September 9, 2015 EDAG Engineering GmbH concluded five individual transfer and purchase
agreements as well as five individual lease agreements regarding the Properties. These
agreements were modeled after the FOM PTA and the original lease agreements and generally
provide for the same conditions, in particular the same purchase prices and monthly rents. The
transfer of usage and charges occurred on September 15, 2015 and the term of the lease
agreements started on the same date.
The transfer and purchase agreements and the leasing agreements were concluded with K Immo
GmbH, IN Immo GmbH, RE Immo GmbH, FD 1 Immo GmbH and FD 2 Immo GmbH. All of these
companies are held by KINREFD GmbH. The shareholders of KINREFD GmbH are HORUS (with a
share of 49.9%), Thomas Eichelmann (with a share of 7.6%), Habermann Vermögensverwaltungs
GmbH (with a share of 40.0%) and Joseph W. Braun (with a share of 2.5%) (also see “Q. Certain
Relationships and Related-Party Transactions—IV. Other Related Party Transactions—10. Sales
and Lease Back Agreements”).
XIII. LEGAL AND ARBITRATION PROCEEDINGS
In 2013, former shareholders of Rücker AG instituted an appraisal proceeding pursuant to the
German Appraisal Proceedings Act (Spruchverfahrensgesetz) against our subsidiary ATON
Engineering AG (now EDAG Engineering GmbH) before the Regional Court of Frankfurt am
Main (Landgericht Frankfurt am Main). The proceeding relates to a resolution passed by Rücker
AG’s 2013 general shareholders’ meeting regarding the squeeze-out of Rücker AG’s minority
shareholders in connection with the merger of Rücker AG into ATON Engineering AG (now
EDAG Engineering GmbH, verschmelzungsrechtlicher Squeeze-out). The minority shareholders
held 834,413 shares equaling 9.96 per cent in Rücker AG at that time. The resolution also
provided for a cash compensation of €16.23 per share to those minority shareholders in
exchange for their shares being transferred to EDAG Engineering GmbH pursuant to the merger
squeeze-out resolution. The cash compensation granted to the minority shareholders was equal
to the average share price of the three-months period prior to May 3, 2013 (the date on which
the squeeze-out request was published) while, according to the valuation report prepared by
the court-appointed valuation expert (Bewertungsgutachter) in preparation of the shareholders’
resolution, the actual value of shares at the legally relevant valuation date, the date of Rücker
AG’s 2013 general shareholders’ meeting, amounted to €12.46 per share. In their complaint,
Rücker AG’s former minority shareholders claimed that the cash payment did not represent the
actual value of shares of Rücker AG at the relevant valuation date and demanded the court to
determine an adequate cash compensation.
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In a ruling rendered in February 2015, the Regional Court of Frankfurt am Main (Landgericht
Frankfurt am Main) rejected the applications and confirmed that the cash compensation of
€16.23 per share was not inadequate and that the compensation payment was not to be
increased. Four applicants and the joint representative of the minority shareholders
(Gemeinsamer Vertreter) appealed (Beschwerde) to the Regional Court of Frankfurt am Main
which decided that the complaints should not be remedied and therefore requested the Higher
Regional Court of Frankfurt am Main (Oberlandesgericht Frankfurt am Main) to give a ruling
thereon. We cannot predict the outcome of the appeal and the view the Higher Regional Court
of Frankfurt am Main will take. We continue to believe that the cash consideration paid was
adequate and intend to continue to defend ourselves against the actions. No accrued liabilities
have been formed to cover any risks associated with this proceeding.
Apart from the above, neither the Company nor any of its Group companies is currently, or has
been in the past twelve months, a party to any governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened of which we are aware) which
may have, or have had in the recent past, a significant effect on the Company’s and/or the
Group’s financial position, profitability or cash flows.
XIV. INSURANCE
Our insurance coverage includes, inter alia, electronic insurance, fire insurance (including other
natural disasters), transport insurance, machinery insurance, vehicle insurance, business
interruption insurance, business liability insurance, legal expenses insurance, travel insurance,
accident insurance, and directors and officers (“D&O”) insurance.
We have taken out D&O insurance for the members of our Board of Directors, and certain other
senior officers of our Group companies, with a total coverage of approximately €100 million per
fiscal year. Additionally, we have taken out D&O insurance for the members of the management
board, the members of the supervisory board and certain other senior officers of our subsidiary
EDAG Engineering GmbH with a total coverage of approximately €100 million per fiscal year.
The D&O insurance covers financial losses that may arise in the course of the exercise of the
corporate duties of the insured persons.
We believe, according to our current knowledge and based on certain analyses performed by
our risk management team, that our insurance coverage, including the maximum coverage
amounts and terms and conditions of the policies, are standard for our ESPs and appropriate.
We cannot, however, guarantee that we will not incur any losses or be the subject of claims that
exceed the scope of the relevant insurance coverage.
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M.
I.
SHAREHOLDER INFORMATION
CURRENT SHAREHOLDER
The following table sets forth the shareholding of the Selling Shareholder, which directly or
indirectly holds an interest of 3% or more (calculated pursuant to Sections 21 et seqq. of the
German Securities Trading Act (Wertpapierhandelsgesetz)) in the Company’s capital and voting
rights as of the date of this prospectus, and its expected shareholdings upon completion of the
Offering.
Beneficial (Indirect) Ownership of the Company, in %
immediately
prior to the
Offering
Ultimate Shareholder
Dr. Lutz Mario Helmig1 . . . . . . . . . . . . . .
New Shareholders2 . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2
Direct
Shareholder
ATON GmbH
100
0
100.00
upon completion of the
Offering
(no
exercise of
Greenshoe
Option)
(full
exercise of
Greenshoe
Option)
65.0
35.0
100.00
59.75
40.25
100.00
The voting rights held by ATON GmbH are attributed to Dr. Lutz Mario Helmig pursuant to § 22 paragraph 1 German
Securities Trading Act (Wertpapierhandelsgesetz).
In addition, HORUS Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig, has indicated that it might
place an order to acquire up to 10% of the Offer Shares in the Offering, subject to allocation on a non-preferential basis. As
of the date of this prospectus, no decision has been made by HORUS Vermögensverwaltungs GbR whether to place an order
to acquire any shares in the Offering and there can be no assurances that HORUS Vermögensverwaltungs GbR will in fact do
so. In case HORUS Vermögensverwaltungs GbR acquires Offer Shares in the Offering, it will be subject to the same lock-up
restrictions as the Selling Shareholder (see “C. The Offering—XIII. Lock-up Agreement, Limitations on Disposal”).
The Selling Shareholder’s registered office is in Munich, Germany and its business address is
Leopoldstraße 53, 80802 Munich, Germany. For information on selling restrictions applicable to
the Selling Shareholder relating to the sale of Company’s shares, see “R. Underwriting—V.
Selling Restrictions”.
II.
CONTROLLING INTEREST
ATON GmbH owns more than 30% of the voting rights in the Company and is, therefore,
considered to hold a controlling interest in the Company pursuant to the German Securities
Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz). The Selling
Shareholder has committed to remain a significant shareholder of the Company for the next
three years - see “C. The Offering—XIII. Lock-up Agreement, Limitations on Disposal”.
The Selling Shareholder entered into a voting rights agreement with the Company – see
“P. Corporate Bodies—IX. Corporate Governance—2. Voting rights agreement”.
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N.
I.
GENERAL INFORMATION ON THE COMPANY AND THE
GROUP
FORMATION AND INCORPORATION
The Company was incorporated by ATON GmbH as founder as a stock corporation
(Aktiengesellschaft) domiciled in Switzerland under Swiss law on November 2, 2015 and
registered with the Commercial Register on November 3, 2015. Its legal name is “EDAG
Engineering Group AG” with its registered office in Arbon and its business address at
Schlossgasse 2, 9320 Arbon, Switzerland and it is registered under number CHE-294.533.486 with
the Commercial Register (Handelsregister) of the canton of Thurgau.
The Company is incorporated in Switzerland and subject to the laws of Switzerland.
II.
COMMERCIAL NAME AND REGISTERED OFFICE
The Company, following consummation of the Contribution, will become the parent company
of the Group; the Group primarily operates under the commercial name “EDAG”.
The Company’s registered office is in Arbon and its business address is Schlossgasse 2, 9320
Arbon, Switzerland, tel.: +41 71 447 36 12, website: www.ir.edag.ch.
III.
FISCAL YEAR AND DURATION
The Company’s fiscal year is the calendar year. The Company was established for an unlimited
period of time.
IV.
CORPORATE PURPOSE
Pursuant to Article 2 of the Articles of Association, the Company’s corporate purpose is to
acquire, hold and manage and sell participations in enterprises of any kind in Switzerland and
abroad, in particular participations in the area of engineering and design of vehicles,
components of vehicles, means of transport in the mobility industry, industrial products, design,
construction, manufacture and testing of vehicle prototypes, as well as construction,
modification and equipment of vehicles in small series, the construction and production of
machinery, equipment and tools as well as the planning and construction of facilities for the
production of vehicles, components of vehicles and all means of transport and parts for the
mobility industry and all similar businesses, as well as all-in-one solutions and the development
of hard- and software. The Company may acquire, mortgage, utilize and sell real estate
properties and intellectual property rights in Switzerland and abroad as well as incorporate and
finance subsidiaries and branches. The Company may engage in all kinds of commercial and
financial transactions that are beneficial for the realization of its purpose, in particular provide
and take out loans, issue bonds, provide suretyships and guarantees, provide collateral as well as
make investments in all marketable investment classes.
V.
GROUP STRUCTURE
The Company was incorporated by the Selling Shareholder on November 2, 2015 by way of a
capital contribution in cash in the aggregate amount of CHF 1,000 thousand against issuance of
25,000 thousand bearer shares with a nominal value of CHF 0.04 each. Since its incorporation, the
Company has not conducted any business, acquired any assets or incurred any liabilities other than
as directly related to its incorporation and the Offering. Concurrently with the determination of
the Offer Price, the Selling Shareholder will contribute all of the shares in EDAG Engineering
Schweiz Sub-Holding AG to the Company by way of the Contribution. EDAG Engineering Schweiz
Sub-Holding AG was incorporated on September 14, 2015 and indirectly, through EDAG
Engineering Holding GmbH, a German intermediate holding company, holds all of the shares in
EDAG Engineering GmbH. EDAG Engineering GmbH conducts, directly and indirectly, through its
subsidiaries the operating business described in this prospectus. By means of the Contribution, the
Company will, thus, acquire this business. No shares in the Company will be sold or delivered to
investors pursuant to the Offering unless the Contribution has taken effect. Following
253
consummation of the Contribution, the Group’s business will be conducted by its subsidiaries and
the Group will comprise of 37 subsidiaries that are active in vehicle engineering services rendered
to OEMs in the automotive industry.
As of the date of this prospectus, the Company has no subsidiaries and conducts no operative
business. Upon consummation of the Contribution, the Company will become the parent company
of the Group. The Group’s business is conducted by EDAG Engineering GmbH, which will be an
indirect subsidiary of the Company upon consummation of the Contribution, and its direct and
indirect subsidiaries.
The following diagram provides a simplified overview of the Group structure and the Company’s
significant subsidiaries, assuming consummation of the Contribution:
100%
Sub-Holding AG
100%
100%
100% (directly or indirectly)
VI.
EDAG Production
KG
Rücker Lypsa, S.L.
Fahrzeugtechnik
mbH
SIGNIFICANT SUBSIDIARIES
The following table provides an overview of the Company’s significant subsidiaries. All such
shareholdings will be indirectly held by the Company following consummation of the
Contribution. As of September 30, 2015, no amount was outstanding under the issued shares for
each of the below listed subsidiaries.
Name and registered
office
EDAG Engineering
GmbH, Germany
EDAG Production
Solutions GmbH &
Co. KG, Germany
BFFT Ges. für
Fahrzeugtechnik
mbH, Germany
Rücker Lypsa S.L.,
Spain
EDAG do Brasil
Ltda., Brazil
Company’s share (directly
and indirectly) in equity
as of September 30, 2015
Total equity (Local GAAP)
as of December 31, 2014
(in %)
(in € thousand)*
Corporate purpose
Product Development
100
141,459
Product Development
100
1,122
Product Development
100
21,049
Product Development
100
11,469
Product Development
100
12,3181
*
unless otherwise indicated
1
in Brazilian Real thousand
254
VII. AUDITORS
The Company appointed PwC-CH as (i) independent auditor to audit the Company’s opening
statement of financial position as of November 2, 2015 and PwC-CH issued an unqualified
auditor’s opinion, thereon (uneingeschränktes Prüfungsurteil) and (ii) statutory auditor to audit
the Company’s annual financial statements prepared in accordance with the Swiss Code of
Obligations (Obligationenrecht) and the Company’s consolidated financial statements prepared
in accordance with IFRS for the fiscal year ending on December 31, 2015. PwC-CH is a member of
EXPERTsuisse - Swiss Expert Association for Audit, Tax and Fiduciary (EXPERTsuisse-Schweizer
Expertenverband für Wirtschaftsprüfung, Steuern und Treuhand).
PwC Germany has audited the consolidated financial statements of EDAG Engineering GmbH as
of and for the fiscal year ended December 31, 2014, which includes the corresponding figures
for the fiscal year ended December 31, 2013, the opening statement of financial position as of
January 1, 2013 and the combined financial information as of and for the fiscal year ended
December 31, 2012, and issued an unqualified auditor’s report thereon (uneingeschränkter
Bestätigungsvermerk). PwC Germany is a member of the Chamber of Public Accountants
(Wirtschaftsprüferkammer), Rauchstraße 26, 10787 Berlin, Germany.
The aforementioned audited opening statement of financial position of the Company and
audited consolidated financial statements of EDAG Engineering GmbH and the auditor’s reports
thereon are included in the financial section of this prospectus.
VIII. ANNOUNCEMENTS, PAYING AGENT
In accordance with the Articles of Association, the announcements of the Company are
published in the Swiss Official Gazette of Commerce (Schweizerisches Handelsamtsblatt) and,
following the listing of the shares on the Frankfurt Stock Exchange, in the German Federal
Gazette (Bundesanzeiger), unless otherwise required by law.
In accordance with the German Securities Prospectus Act (Wertpapierprospektgesetz),
announcements in connection with the approval of this prospectus or any supplements thereto
will be published in the form of publication provided for in this prospectus, in particular
through publication on our website (www.www.ir.edag.ch). Printed copies of this prospectus
and any supplements thereto are available at the Company’s office of the Company at
Schlossgasse 2, 9320 Arbon, Switzerland as well as at the offices of its subsidiary EDAG
Engineering Holding GmbH.
The paying agent is Deutsche Bank. The mailing address of the paying agent is: Deutsche Bank
Aktiengesellschaft, Taunusanlage 12, 60325 Frankfurt am Main, Germany.
255
O.
I.
1.
DESCRIPTION OF THE COMPANY’S SHARE CAPITAL AND
APPLICABLE REGULATIONS
PROVISIONS RELATING TO THE SHARE CAPITAL OF THE COMPANY
Current Share Capital; Shares
As of the date of this prospectus, the share capital of the Company amounts to CHF 1,000
thousand (corresponding to €920 thousand converted at an exchange rate of CHF 1.09 as of
November 2, 2015 as shown in the audited opening statement of financial position of the
Company as of November 2, 2015) and is divided into 25,000 thousand bearer shares
(Inhaberaktien) with a nominal value of CHF 0.04 each. The share capital has been fully paid up.
The Company’s shares were created pursuant to Swiss law and are denominated in Swiss Francs.
2.
Development of the Share Capital
The Company was incorporated by the Selling Shareholder on November 2, 2015, and was
entered into the Commercial Register on November 3, 2015 as a stock corporation
(Aktiengesellschaft) under Swiss law with a share capital of CHF 1,000 thousand (corresponding
to €920 thousand converted at an exchange rate of CHF 1.09 as of November 2, 2015 as shown
in the audited opening statement of financial position of the Company as of November 2, 2015).
The original share capital of CHF 1,000 thousand was procured by the Selling Shareholder via
cash contribution (corresponding to €920 thousand converted at the CHF exchange rate as of
November 2, 2015).
3.
Contribution into the Capital Reserves
contribution value of EDAG Engineering Schweiz Sub-Holding AG as of the time of the
Contribution will not be based on a valuation report prepared by a third party but on the
of the Company determined in the Offering (i.e. the Offer Price, multiplied by all 25,000
thousand outstanding shares of the Company) represents the sum of (i) the net asset value of
the Company immediately prior to the Contribution plus (ii) the value of all of the shares in
EDAG Engineering Schweiz Sub-Holding AG. The contribution value of EDAG Engineering
Schweiz Sub-Holding AG is therefore the market value of the Company determined in the
Offering minus the net asset value of the Company immediately prior to the Contribution.
value will therefore be approximately €537,160 thousand. No other valuation will be conducted
for the purposes of determining the contribution value. The contribution value is subject to
4.
Authorized Capital
The Company has no authorized capital (genehmigtes Kapital).
256
5.
Conditional Capital
The Company has no conditional capital (bedingtes Kapital).
6.
Participation Certificates and Profit Sharing Certificates
As of the date of this prospectus, the Company has neither participation certificates
(Partizipationsscheine) nor profit sharing certificates (Genussscheine) outstanding.
7.
Treasury Shares
Neither the Company nor any of its subsidiaries holds any of the Company’s shares.
8.
Convertible Bonds and Warrants / Options
The Company has no bonds or options outstanding.
II.
REPURCHASE OF OWN SHARES
Swiss law limits the right of a company to purchase and hold its own shares. The Company and
its subsidiaries may purchase shares in the Company only if and to the extent that (i) the
Company has freely distributable reserves in the amount of the purchase price; and (ii) the
aggregate nominal value of all Company shares held by the Company does not exceed 10% of
the Company’s share capital.
In relation to Company shares held by the Company or its subsidiaries, the Company and its
subsidiaries, respectively, are not entitled to vote at shareholders’ meetings. However, they are
entitled to the economic benefits generally applicable to the shares, including dividends. Upon
the purchase of Company shares, the Company, pursuant to Swiss law, must furthermore create
a special reserve on its balance sheet in the amount of the purchase price of the acquired shares.
In addition, selective repurchases are only permitted under certain circumstances; in particular,
repurchases of shares listed on a regulated market in Germany are subject to certain restrictions
promulgated under Sections 3 paragraph 1 and 30a of the German Securities Trading Act
(Wertpapierhandelsgesetz).
III.
GENERAL PROVISIONS GOVERNING A LIQUIDATION OF THE COMPANY
The Articles of Association do not limit the Company’s duration. However, apart from
liquidation as a result of insolvency proceedings, the Company may be liquidated by a resolution
of the shareholders’ meeting which is passed by a two-thirds majority of the shares represented
at the meeting, provided that those votes also represent 50% or more of the share capital
represented at the shareholders’ meeting at which such vote is taken. Pursuant to the Swiss
Code of Obligations (Obligationenrecht), any assets remaining in the event of the Company’s
liquidation after all of the Company’s liabilities have been settled will be distributed among the
shareholders in proportion to their shareholdings.
IV.
GENERAL PROVISIONS GOVERNING A CHANGE IN THE SHARE CAPITAL
Under the Company’s Articles of Association, the Company requires a resolution of the
shareholders’ meeting to be passed by a majority of the votes cast at the meeting to increase its
share capital (ordentliche Kapitalerhöhung).
Shareholders may also create authorized share capital which requires a resolution passed by a
two-thirds majority of the voting rights represented at the meeting, provided that those votes
also represent 50% or more of the voting rights represented at the shareholders’ meeting at
which such vote is taken, authorizing the Board of Directors to issue in one or several steps up
to a specified amount of additional share capital within a period of not more than two years.
The nominal amount of the authorized share capital may not exceed half of the share capital
existing at the time the authorization is granted.
257
In addition, shareholders may create conditional share capital by a resolution passed with a twothirds majority of the voting rights represented at the meeting, provided that those votes also
represent 50% or more of the share capital represented at the shareholders’ meeting at which
such vote is taken. Such conditional share capital may be created for the purposes of (i) issuing
shares to holders of new convertible bonds and similar debt instruments issued by the company
or its group companies granting a right to subscribe the new shares or (ii) granting rights to
employees and officers of the company and group companies to subscribe shares. Although not
expressly provided for by law, conditional share capital may also be used to grant shareholders
of the company option rights to subscribe to shares (Aktionärsoptionen). The nominal amount
of the conditional share capital may not exceed half of the share capital existing at the time the
authorization is granted.
Resolutions to reduce a company’s share capital require a simple majority of the votes cast at
the shareholders’ meeting.
V.
GENERAL PROVISIONS GOVERNING SUBSCRIPTION RIGHTS
According to Article 652b paragraph 1 of the Swiss Code of Obligations (Obligationenrecht),
each shareholder is principally entitled to subscribe to the proportion of newly issued shares of a
capital increase that corresponds to his existing participation. Pursuant to Article 653c
paragraph 1 of the Swiss Code of Obligations (Obligationenrecht), the same applies to
convertible bonds and similar bonds to which conversion or option rights attach (so-called
“Vorwegzeichnungsrechte”). If admission for trading has been granted by a stock exchange,
subscription rights are freely transferable and may be traded on that stock exchange for a
prescribed period before the deadline for subscription expires. However, shareholders do not
have a right to request admission to trading for subscription rights.
The decision to exclude or limit subscription rights (Bezugsrechte) of existing shareholders in an
ordinary capital increase requires a two-thirds majority of the voting rights represented at the
shareholders’ meeting, provided that those votes also represent 50% or more of the share
capital represented at the shareholders’ meeting at which such vote is taken. However,
subscription rights may only be excluded for good cause. When approving authorized or
conditional share capital, the shareholders’ meeting may also authorize the Board of Directors
to exclude subscription rights of existing shareholders when subsequently issuing new shares
from such authorized share capital. According to Article 652b paragraph 2 of the Swiss Code of
Obligation (Obligationenrecht), good cause includes (but is not limited to) the takeover of
companies, parts of companies or equity interests as well as the participation of employees
(including officers). In any event, the exclusion of subscription rights must not result in any
improper advantage or disadvantage to the parties involved. The above principles apply also in
connection with conditional capital, i.e., subscription rights may only be excluded for good
cause.
VI.
EXCLUSION OF MINORITY SHAREHOLDERS (SQUEEZE-OUT MERGER)
The Swiss Federal Merger Act (Fusionsgesetz) provides for a squeeze-out of minority
shareholders in connection with a restructuring, i.e., merger (squeeze-outs are only applicable
to mergers and are excluded in the case of a spin-off or the reorganization/conversion of a
company). This squeeze-out procedure is available for public and private Swiss companies and
may be executed with a voting majority of 90% allowing for the exclusion of shareholders
holding 10% or less of votes in the course of a merger of two or more companies. In a squeeze
out merger according to Article 8 paragraph 2 of the Swiss Federal Merger Act (Fusionsgesetz),
the companies involved in a merger may agree that the execution of the merger shall be carried
out exclusively through the payment of compensation to the shareholders of the transferring
company (instead of shares of the surviving company). The compensation does not necessarily
have to be paid in cash, but can also be settled with other marketable assets, such as securities
of an associated company.
258
VII. SHAREHOLDER NOTIFICATION REQUIREMENTS; DIRECTORS’ DEALINGS
After the Company’s shares will have been admitted to trading on the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse), the Company, as a third country issuer that is listed on a
regulated market in Germany and has chosen Germany as its home member state, will be
subject to the provisions of the German Securities Trading Act (Wertpapierhandelsgesetz)
governing disclosure requirements for shareholdings.
1.
Notification Requirement Concerning the Possession of Significant Voting Rights
The German Securities Trading Act (Wertpapierhandelsgesetz) requires that anyone who
acquires, sells or whose shareholding in any other way reaches, exceeds or falls below 3%, 5%,
10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights in an issuer whose country of
origin is Germany and whose shares are admitted to trading on an organized market must
immediately, and no later than within four trading days of such fact, notify the issuer and at the
same time the BaFin. The notice can be drafted in either German or English and sent either in
writing or via fax. After the entry into force of the German Transparency Directive Amendment
Directive Act (see below „—2. The Transparency Directive Amendment Directive”) such
threshold can also be triggered as a result of an event affecting the total number of voting
rights and the notification requirement will generally apply at an earlier stage. While under
current law the thresholds are only crossed with the actual transfer of ownership (settlement),
the notification requirement will in future already be set off by the establishment of an
obligation to transfer such ownership.
The notice must include the address of the individual or entity, the share of voting rights held and
the date of reaching, exceeding, or falling below the respective threshold. After the entry into
force of the German Transparency Directive Amendment Directive Act (see below „—2. The
Transparency Directive Amendment Directive”) such notice will have to be issued via the
mandatory use of a standard form. As a domestic issuer, the Company must publish such notices
immediately, but no later than within three trading days after receiving them, via media outlets or
outlets where it can be assumed that the notice will be disseminated in the EU and the
non-European Union parties to the agreement on the EEA. The Company must also transmit the
notice to the BaFin and to the German Company Register (Unternehmensregister) for storage.
There are certain exceptions to the notice requirement.
In connection with these requirements, the German Securities Trading Act
(Wertpapierhandelsgesetz) contains various rules that require the attribution of voting rights of
certain persons associated with the shareholder or acting together with the shareholder. For
example, shares belonging to a third company are attributed to a company if the latter controls
the former; similarly shares held by a third company for the account of another company are
attributed to the latter. Shares or financial instruments held for trading by a securities services
company are not taken into account for determining the notification obligation if it is ensured
that the voting rights held by them are not exercised, and that they amount to no more than
5% of the voting shares, or do not grant the right to purchase more than 5% of the voting
shares.
Any cooperation among shareholders that is designed to effect a permanent and material
change in the business strategy of the Company can result in an attribution (Zurechnung) of
voting rights, that is, the cooperation does not necessarily have to be specifically about the
exercise of voting rights. Coordination in individual cases, however, will not trigger the
attribution (Zurechnung) of voting rights.
If a shareholder of the Company fails to file a notice or provides false information, a fine may be
imposed for failure to comply with the notification obligation.
Except for the 3% threshold, similar notification obligations exist for the Company and BaFin for
reaching, exceeding or falling below the aforementioned thresholds when holding other
financial instruments entitling their holder to unilaterally acquire existing shares of the
259
Company carrying voting rights by binding legal agreement. The Act on Strengthening Investor
Protection and Improving the Functionality of the Capital Market (Gesetz zur Stärkung des
Anlegerschutzes und Verbesserung der Funktionsfähigkeit des Kapitalmarktes), the relevant
part of which came into effect on February 1, 2012, extended this obligation to “other
instruments” that grant the holder the right to acquire unilaterally, based on a legally binding
agreement, existing shares of the Company carrying voting rights that do not qualify as
“financial instruments” within the meaning of the German Securities Trading Act
(Wertpapierhandelsgesetz), for example, securities lending agreements or sales and repurchase
agreements.
In addition, the Act on Strengthening Investor Protection and Improving the Functionality of
the Capital Market (Gesetz zur Stärkung des Anlegerschutzes und Verbesserung der
Funktionsfähigkeit des Kapitalmarktes) led to the addition of the new Section 25a of the
German Securities Trading Act (Wertpapierhandelsgesetz). Pursuant to this provision, any person
who directly or indirectly holds financial instruments or other instruments that are not covered
by Section 25 of the German Securities Trading Act (Wertpapierhandelsgesetz), that is,
instruments that merely enable the holder to acquire existing shares carrying voting rights of an
issuer whose home country is Germany, must notify the issuer and, simultaneously, the BaFin
immediately, and within four trading days at the latest, when reaching, exceeding or falling
below 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75%. Accordingly, such financial or other
instruments do not necessarily entitle the holder to claim delivery of the shares. A notification
requirement can be triggered if an acquisition of voting rights is only possible under the
economics of the instrument, for instance, if the counterparty to such financial or other
instrument can reduce or mitigate its risk by acquiring the relevant shares. Therefore,
cash-settled equity swaps and contracts for the payment of price differences are subject to the
notification requirement.
A shareholder who reaches or exceeds the threshold of 10% of the voting rights, or a higher
threshold, is obligated to notify the issuer within 20 trading days regarding the objective being
pursued through the acquisition of voting rights, as well as regarding the source of the funds
used for the purchase. Changes in those objectives must also be reported within 20 trading days.
The Articles of Association have not made use of the option to release shareholders from this
disclosure obligation. In calculating whether the 10% threshold has been reached or exceeded,
the attribution rules mentioned above apply.
Executives of an issuer with “managerial responsibilities” within the meaning of the German
Securities Trading Act (Wertpapierhandelsgesetz) have to notify the issuer and the BaFin within
five working days of transactions (so-called directors’ dealings) undertaken for their own
account relating to the shares of such issuer or to financial instruments based on such shares.
This also applies to persons who are “closely related to such executives” within the meaning of
the German Securities Trading Act (Wertpapierhandelsgesetz).
2.
The Transparency Directive Amendment Directive
Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013
amending the so-called Transparency Directive 2004/109/EC (the “Transparency Directive
Amendment Directive”) was published in the Official Journal of the European Union on 6
November 2013 and must be transposed into national law no later than November 26, 2015. The
German bill implementing the Transparency Directive (the “German Transparency Directive
Amendment Directive Act”) has already been passed and is currently awaiting signing by the
Federal President and publication in the Federal Law Gazette. It is expected that the German
Transparency Directive Amendment Directive will enter into force before November 27, 2015.
While the Transparency Directive contains various disclosure obligations for issuers whose
securities are listed on a regulated market, the Transparency Directive Amendment Directive
aims at reducing the administrative burden for small and medium sized issuers to improve their
access to capital and at improving the efficiency of the transparency system, particularly with
260
regard to the publication of information on corporate ownership. Most significant changes
under the Transparency Directive Amendment Directive include the removal of the obligation to
publish an interim statement or quarterly financial report and the extension of the notification
requirement for threshold crossing to financial instruments which give entitlement or the ability
to acquire shares with a comparable economic effect. With regard to the latter, Sections 25 and
25a of the German Securities Trading Act (Wertpapierhandelsgesetz) dealing with threshold
crossing in case of financial instruments have been amended. Except for the 3% threshold,
notification requirements for reaching, exceeding or falling below the thresholds for voting
rights will also apply to direct or indirect holders of instruments (i) which, on maturity, give the
holder the unconditional right to acquire shares to which voting rights are attached, already
issued, of the Company or the discretion as to his right to acquire such shares in the Company or
(ii) which are referenced to shares to which voting rights are attached, already issued, of the
Company and with similar economic effect to the instruments mentioned under (i), whether or
not they confer a right to a physical settlement. In particular, such instruments will comprise
transferable securities, options, futures, swaps, forward rate agreements and contracts for
differences. The number of voting rights relevant for the notification requirement will generally
be calculated by reference to the full nominal amount of shares underlying the instrument
except where the instrument provides exclusively for a cash settlement. Details for such
calculations are laid down by regulatory technical standards drafted by the European Securities
and Markets Authority.
261
P.
I.
CORPORATE BODIES
OVERVIEW
The Company’s main corporate bodies comprise the Board of Directors (Verwaltungsrat), the
Group executive management (Konzerngeschäftsleitung) (the “Group Executive Management”)
and the shareholders’ meeting (Generalversammlung).
Pursuant to Article 698 of the Swiss Code of Obligations (Obligationenrecht), the shareholders’
meeting is the supreme governing body of a stock corporation. As described in more detail
below, it has certain non-transferable powers, such as approving and amending the Articles of
Association, electing the members of the Board of Directors and the external auditors and
approving the management report and the consolidated financial statements.
The Board of Directors is the highest executive corporate body of the Company. Pursuant to
Article 716 of the Swiss Code of Obligations (Obligationenrecht), the Board of Directors may
pass resolutions on all matters not reserved to the shareholders’ meeting by law or the Articles
of Association. The Board of Directors is responsible for the management of the Company, to
the extent it has not delegated such authority to the Group Executive Management and to the
extent permitted by Swiss law and the Articles of Association. In this context, Article 716a of the
Swiss Code of Obligations (Obligationenrecht) stipulates certain non-transferable and
inalienable duties of the Board of Directors.
In accordance with Article 716b of the Swiss Code of Obligations (Obligationenrecht), the
Articles of Association authorize the Board of Directors to delegate the management of all or
part of the Company’s business, based on its organizational regulations, to individual members
of the Board of Directors or third parties (natural persons). According to the Company’s
organizational regulations enacted by the Board of Directors on November 2, 2015
(Organisationsreglement) (the “Organizational Regulations”), our Board of Directors has
delegated the day-to-day management of the Company to the Group Executive Management
(Geschäftsleitung) which is currently comprised of the chief executive officer (acting as speaker
of the Group Executive Management) and the chief financial officer. By virtue of the
Organizational Regulations, the Group Executive Management is also entrusted with Groupwide management (Konzernleitung), subject to the matters reserved to the Board of Directors.
Each member of the Board of Directors and the Group Executive Management owes a duty of
loyalty, duty of legality and duty of care to the Company. In their decision-making, members of
these bodies must consider a broad spectrum of interests, particularly those of the Company and
its shareholders, employees and creditors. In addition, they must take into consideration the
shareholders’ rights to equal treatment and equal access to information. If members of the
Board of Directors or Group Executive Management breach their duties, they may be liable to
the Company, individually or jointly and severally with the other members of the Board of
Directors or the Group Executive Management. They may also be liable to individual
shareholders and creditors to pay compensatory damages, as the case may be, that were caused
by such a breach of their duties. If the Company has suffered damages, the claim may be
brought by the Company as well as by individual shareholders. In such case, the shareholder’s
claim is directed at performance vis-à-vis the Company. If the Company goes bankrupt, the
bankruptcy administration and, in case the bankruptcy administration elects not to do so,
shareholders and third party creditors may bring claims for compensation of damages suffered
by the Company.
II.
1.
BOARD OF DIRECTORS
Overview
The Company’s Articles of Association provide that our Board of Directors (Verwaltungsrat)
comprise of at least 4 members, including the chairman of the Board of Directors (the
“Chairman”). Should the Board of Directors be composed of fewer than 4 members, the next
262
ordinary shareholders’ meeting will, at the latest, elect the additionally required members of
the Board of Directors. As of the date of this prospectus, the Board of Directors consists of 4
members.
All members of our Board of Directors, including the Chairman, must be elected, and may only
be removed, by shareholders’ resolution.
The term of office of members of the Board of Directors corresponds to the legally permitted
maximum term of one year and terminates at the end of the next ordinary shareholders’
meeting. Re-election is possible as long as the relevant member has not completed the age of
70.
Except for the election of the Chairman of the Board of Directors and the chairman and
members of the nomination and compensation committee which is carried out by the
shareholders’ meeting, the Board of Directors organizes itself. It appoints a secretary who does
not need to be a member of the Board of Directors.
According to the Company’s Organizational Regulations, the Board of Directors convenes upon
invitation by the Chairman whenever required, i.e., in the ordinary course of business at least 6
times a year. Meetings may also be called upon the request of another member of the Board of
Directors. The Board of Directors may pass resolutions if the majority of its members are
attending, whether in person, by telephone, video-conferencing or other electronic media. As a
rule, meetings shall be held at the offices of the Company or elsewhere in Switzerland. No
quorum is required if resolutions only regarding the implementation of a capital increase and
subsequent amendments of the Articles of Association are to be passed. Except as provided in
the Organizational Regulations, the Board of Directors passes its resolutions with the majority of
the votes cast. The Chairman has no casting vote.
Board of Directors resolutions may also be taken by means of circular resolutions, whether in
writing, by facsimile or by email, provided that no member of the Board of Directors requests
deliberations in a meeting.
a.
Powers and Duties
The Board of Directors is entrusted with the overall management of the Company and, through
the Company’s shareholder rights, its subsidiaries, including the issuance of all necessary
directives, and has the ultimate responsibility for the business and affairs of the Company and
its subsidiaries. Such management and responsibility includes the duty to select carefully, to
instruct properly and to supervise diligently the members of the Group Executive Management.
The Board of Directors is ultimately responsible for the management of the Company and the
supervision and control of how the Company’s business is conducted. It represents the Company
vis-à-vis third parties and resolves on all matters that are not reserved to another body of the
Company. In accordance with the Organizational Regulations, the day-to-day management of
the Company has been delegated to the Group Executive Management.
According to Article 17 of the Articles of Association, the Board of Directors retains the
following non-transferable and irrevocable duties:
Š
to ultimately direct the Company and issue the necessary directives;
Š
to determine the organization of the Company;
Š
to organize the accounting, the internal control system (ICS), the financial control and the
financial planning of the Company, the approval of the annual budget and business plans and
to perform a risk assessment;
Š
to appoint and recall the persons entrusted with the management and representation of the
Company and to grant signatory power;
Š
to ultimately supervise the persons entrusted with the management, in particular with respect
to compliance with the law, the Articles of Association, regulations and directives;
263
Š
to prepare the annual report, as well as the shareholders meeting and to implement its
resolutions;
Š
to prepare the compensation report;
Š
to inform the judge in the event of over-indebtedness;
Š
to pass resolutions regarding the subsequent payment of capital with respect to any non-fully
paid-in shares;
Š
to pass resolutions confirming increases in share capital and regarding the amendments to the
Articles of Association entailed thereby;
Š
to examine compliance with the legal requirements regarding the appointment, election and
the professional qualifications of the auditors;
Š
to execute the agreements pursuant to the Swiss Merger Act.
2.
Members of the Board of Directors
The following table lists the current members of the Board of Directors and their respective
responsibilities:
Name
Age
First appointed on
Thomas Eichelmann
50 November 2015
Sylvia Schwing
Dr. Michael Hammes
34 November 2015
60 November 2015
Dr. Philippe Weber
50 November 2015
Appointed until
Position
Committee membership
2016 Chairman Nomination and
Compensation
Committee
(chairman)
2016 Member
Audit Committee
2016 Member
Audit Committee
(chairman)
2016 Member
Nomination and
Compensation
Committee
The following description provides summaries of the curricula vitae of the current members of
the Board of Directors and indicates their principal activities outside the Group to the extent
that those activities are significant with respect to the Group.
Thomas Eichelmann
Thomas Eichelmann was born on July 10, 1965 in Singen am Hohentwiel, Germany. He holds a
degree in Economic Sciences from the University of Zurich, Switzerland. From 1984 to 1986 he
trained as a bank clerk at Deutsche Bank AG before studying Economic Sciences at the
Universities of Hohenheim (Stuttgart) and of Zurich, Switzerland from 1988 to 1994. From 1994
to 1997, Mr. Eichelmann worked at Boston Consulting Group in Frankfurt am Main before
becoming manager at Bain & Company in Munich. In 2000, Mr. Eichelmann joined Roland
Berger Strategy Consultants in Munich, where he became part of the worldwide management
team in 2003. From 2007 to 2009 Mr. Eichelmann was a member of the management board of
Deutsche Börse AG and also held various other management positions within the Deutsche
Börse Group during that time. In 2010, Mr. Eichelmann joined ATON GmbH as a member of the
board of directors and was also appointed member of the board of directors of EDAG Holding
GmbH. Since then, Mr. Eichelmann has held various management positions within the ATON
Group but also at various other companies. From 2010 to 2013 Mr. Eichelmann served as a
member of the supervisory board of EDAG GmbH & Co. KGaA which was integrated into EDAG
Engineering GmbH by way of an upstream merger. Since June 2012 Mr. Eichelmann has been
acting as chairman of the supervisory board of EDAG Engineering GmbH (formerly EDAG
Engineering AG) and in November 2015 Mr. Eichelmann was appointed chairman of the Board
of Directors.
264
Sylvia Schwing
Sylvia Schwing was born on October 27, 1980 in Donaueschingen, Germany. She holds a degree
in Business Administration from the Furtwangen University (formerly Fachhochschule) and was
appointed as an auditor in 2010. From 2005 to 2010 Ms. Schwing worked at Ernst & Young
GmbH Wirtschaftsprüfungsgesellschaft in Eschborn before joining PHOENIX Pharmahandel
GmbH & Co. KG in Mannheim until 2011. From 2011 to 2013, Ms. Schwing worked at Fresenius
Medical Care AG & Co. KGaA in Bad Homburg before joining ATON GmbH in Munich where she
was appointed head of group accounting in 2015.
Dr. Michael Hammes
Dr. Michael Hammes was born on January 2, 1955 in Ochtendung, Germany. He holds a degree
in Economics from the University of Mainz and a doctoral degree in economic policy from the
Johannes-Gutenberg-University in Mainz. Furthermore, he obtained an additional qualification
in Banking Management from the Johann-Wolfgang-Goethe-University in Frankfurt am Main.
From 1982 to 1984 Dr. Hammes worked at the Landesbank Rheinland-Pfalz in Mainz before
joining McKinsey & Company in Frankfurt am Main where he became a partner in 1991. In 1996
Dr. Hammes left McKinsey & Company to found CONSART Management Consultants GmbH in
Frankfurt am Main where he was managing shareholder until 2006 when he established senco
Management Consultants GmbH in Frankfurt am Main as managing shareholder. Dr. Hammes is
currently member/chairman of several supervisory boards/administrative boards.
Dr. Philippe Weber
Dr. Philippe Weber was born on February 8, 1965 in Zurich, Switzerland. He holds a degree in
law and a doctoral degree in law from the University of Zurich and an LL.M. from the European
University Institute (EUI) in Fiesole, Italy. He is admitted to the bar (Rechtsanwalt) in Zurich.
From 1990 to 1992 he was a research assistant at the University of Zurich before joining the
foreign affairs committees of the two chambers of the Swiss parliament as a legal clerk. In 1994
he joined the law firm Niederer Kraft & Frey AG, Zurich, where he became an associate in 1996.
In 2002 he was made a partner at Niederer Kraft & Frey AG. In 2009 he was elected to the
executive committee of Niederer Kraft & Frey AG, which he chairs (Managing Partner) since
2015.
All members of the Board of Directors may be reached at the Company’s offices at Schlossgasse
2, 9320 Arbon, Switzerland (tel. +41 71 447 36 12).
The following overview lists all of the companies and enterprises in which the members of the
Board of Directors currently hold seats or have held seats on administrative, management or
supervisory boards, or comparable Swiss or foreign supervisory bodies, or of which they were
partners during the last five years, with the exception of the Company and the subsidiaries of
the Group:
Thomas Eichelmann
Current seats:
Š
ATON Aero Verwaltungs GmbH (managing
director)
Š
AT Aviation GmbH (managing director)
Š
ATON GmbH (chief executive officer, managing
director)
Š
ATON Group Finance GmbH (managing director)
Š
ATON Oldtimer GmbH (managing director)
Š
ATON US Inc., Wilmington, Delaware, USA (member
of the board of directors)
265
Š
Bankhaus Ellwanger & Geiger KG (chairman of the
administrative board)
Š
FFT GmbH & Co. KGaA (member of the supervisory
board)
Š
HAEMA AG (member of the supervisory board)
Š
HORUS Beteiligungs-GmbH (managing director)
Š
HORUS Ellwanger & Geiger Holding GmbH
(managing director)
Š
HORUS Finanzholding GmbH (managing director)
Š
HORUS Spiekermann Holding GmbH (managing
director)
Š
J.S. Redpath Holdings, Inc. (member of the board of
directors)
Š
L53 Immobilien BV GmbH (managing director)
Š
L53 Immobilien GmbH (managing director)
Š
OrthoScan, Inc., Scottsdale, Arizona, USA (member
of the board of directors)
Š
Stadtsparkasse München (member of the economic
advisory council)
Š
Stiftung Deutsche Sporthilfe (member of the
advisory board)
Š
Stiftung Wir helfen München (member of the
advisory board)
Š
V-Bank AG (vice-chairman of the supervisory board)
Š
Wüstenrot & Württembergische AG (member of the
supervisory board)
Š
ATON Theta GmbH (managing director)
Š
FRONTIER-KEMPER CONSTRUCTORS, Inc. Evansville,
Indiana, USA (member of the board of directors)
Š
Hochtief AG (member and chairman of the
supervisory board)
Past seats:
Sylvia Schwing
Current seats:
None
Past seats:
None
Dr. Michael Hammes
Current seats:
Š
Bankhaus Ellwanger & Geiger KG (member of the
administrative board)
Š
Spiekermann & Co AG (chairman of the supervisory
board)
Š
senco Management Consultants GmbH (managing
director)
Š
V-Bank AG (member of the supervisory board)
Past seats:
None
266
Dr. Philippe Weber
Current seats:
Š
Niederer Kraft & Frey AG (chairman of the board of
directors and managing partner)
Š
Robert Aebi AG (member of the board of directors)
Š
Newron Suisse SA (member of the board of
directors)
Past seats:
None
3.
Committees of the Board of Directors
According to the Organizational Regulations, the Board of Directors has an audit committee
(the “Audit Committee”) and a nomination and compensation committee (the “Nomination and
Compensation Committee”) to strengthen the Company’s corporate governance structure. The
Board of Directors may set up further committees.
a.
Audit Committee
The Audit Committee shall consist of at least two members of the Board of Directors. The
members of the Audit Committee are appointed by the Board of Directors. The term of office of
the members of the Audit Committee shall be one year and shall end at the next annual
shareholders’ meeting. The Audit Committee currently consists of 2 members, i.e., Michael
Hammes (chairman) and Sylvia Schwing.
The Audit Committee assists the Board of Directors in fulfilling its duties to supervise the
management, in particular with regard to the completeness of the accounts, compliance with
law and regulations and the work of the Company’s internal audit and the external auditors.
The Audit Committee also assesses the adequacy of the financial reporting, the internal control
system and general monitoring of business risks. Furthermore, it ensures the ongoing
communication with the external auditors and internal audit with regard to the financial
situation and business development of the Group.
b.
Nomination and Compensation Committee
The shareholders’ meeting elects at least two and a maximum of four members of the Board of
Directors as members of the Nomination and Compensation Committee. The term of office of
the members of the Nomination and Compensation Committee shall be one year and shall end
at the next annual shareholders’ meeting. Re-election is possible. The Nomination and
Compensation Committee currently consists of 2 members, i.e., Thomas Eichelmann (chairman)
and Philippe Weber. In accordance with the Compensation Ordinance, as defined below, the
Articles of Association provide that the members of the Nomination and Compensation
Committee must be elected by the shareholders’ meeting.
The duties and responsibilities of the Nomination and Compensation Committee are primarily
set out in Article 19 of the Articles of Association as well as in the Organizational Regulations. In
particular, with respect to compensation matters the Nomination and Compensation Committee
has the following duties:
Š
proposals to the Board of Directors regarding the compensation scheme of the Group
pursuant to the principles of Articles 25 and 26 of the Articles of Association;
Š
proposals to the Board of Directors regarding the determination of compensation-related
targets for the Group Executive Management;
Š
proposals to the Board of Directors regarding the approval of the individual compensation of
the Chairman of the Board of Directors, the other members of the Board of Directors as well
as the maximum individual aggregate compensation of the chief executive officer;
267
Š
proposals to the Board of Directors regarding the individual compensation (fixed and variable
compensation) of the other members of the Group Executive Management as well as further
terms of employment and titles;
Š
proposals to the Board of Directors regarding amendments to the Articles of Association with
respect to the compensation scheme for members of the Group Executive Management;
Š
proposals to the Board of Directors regarding external mandates and further additional
occupation of the members of the Group Executive Management; and
Š
further duties and responsibilities as provided for in the Articles of Association.
III.
1.
GROUP EXECUTIVE MANAGEMENT
Overview
Subject to those affairs which form part of the non-transferable and inalienable duties of the
Board of Directors pursuant to the Swiss Code of Obligations (Obligationenrecht), the Articles of
Association and the Organizational Regulations, the Board of Directors of the Company has
delegated the executive management of the Company to the Group Executive Management.
The Group Executive Management is mainly responsible for the financial and operational
management of our Group and for the efficiency of the corporate structure and organization of
our Group. The members of the Group Executive Management are appointed by the Board of
Directors.
The Group Executive Management currently comprises 2 members: Jörg Ohlsen and Jürgen
Vogt. The chief executive officer, who acts as speaker, and the other member of the Group
Executive Management are appointed and removed by the Board of Directors.
2.
Members of the Group Executive Management
The table below sets out the name, age, the year of joining the EDAG Group, the date of
appointment and position of the current members of the Group Executive Management:
Name/Position
Jörg Ohlsen
Jürgen Vogt
Age
46
62
Joined EDAG
Appointed in current role
Function
October 1994
January 2000
November 2015
November 2015
Chief Executive Officer
Chief Financial Officer
The following description provides summaries of the curricula vitae of the current members of
the Group Executive Management, followed by a short description of each member’s
professional experience and education and indicates their principal activities outside the Group
to the extent that those activities are significant with respect to the Group.
Jörg Ohlsen
Jörg Ohlsen was born on April 24, 1969 in Hamburg, Germany. He holds a degree in mechanical
engineering from the Hamburg University of Applied Sciences (Fachhochschule). Mr. Ohlsen
joined the EDAG Group in 1994 as project manager for simulation technology. After various
managerial positions in Product and Manufacturing Simulation as well as Vehicle Integration he
was appointed as a managing director of EDAG Engineering GmbH in 2005 responsible for
Product Development. In 2008, Mr. Ohlsen was appointed chief executive officer of EDAG
Engineering GmbH and became a member of the Group Executive Management of EDAG
Engineering Group AG in 2015. Mr. Ohlsen holds several honorary positions.
Jürgen Vogt
Jürgen Vogt was born on August 3, 1953 in Seligenstadt, Germany. He holds a degree in
Business Administration (Diplomkaufmann) from the Johann-Wolfgang-Goethe-University in
Frankfurt am Main. From 1979 to 1981 Mr. Vogt worked at AEG Telefunken AG before joining
Société Générale SA where he was stationed in New York from 1986 to 1990 and managed
Lignotock GmbH from 1991 to 1995. From 1995 to 1999, Mr. Vogt was a member of the
268
management board of SAI Automotive AG in Frankfurt, working out of the United States from
1997 to 1999. In 2000, he joined Rücker AG in Wiesbaden as CFO and became managing director
of EDAG Engineering GmbH in 2014 and a member of the Group Executive Management of
EDAG Engineering Group AG in 2015.
The members of the Group Executive Management may be reached at the Company’s offices at
Schlossgasse 2, 9320 Arbon, Switzerland (tel. +41 71 447 36 12).
The following overview lists all of the companies and enterprises in which the members of the
Group Executive Management currently hold seats or have held seats on administrative,
management or supervisory boards, or comparable Swiss or foreign supervisory bodies, or of
which they were partners during the last five years, with the exception of the Company and the
subsidiaries of the Group:
Jörg Ohlsen
Current seats:
Š
Chamber of Commerce of Fulda (member of the
general assembly)
Š
German Association of the Automotive Industry
(Verband der Automobilindustrie e.V.) (member of
the advisory board)
Š
Automobiltechnische Zeitschrift (member of the
advisory board)
Past seats:
None
Jürgen Vogt
Current seats:
None
Past seats:
None
IV.
1.
REMUNERATION AND OTHER BENEFITS OF THE BOARD OF DIRECTORS AND THE GROUP
EXECUTIVE MANAGEMENT
Overview
Following completion of the Offering and listing of the shares, the Company will be subject to
the Swiss Ordinance against Excessive Compensation in Public Companies
(Vergütungsverordnung; VegüV) (the “Compensation Ordinance”).
The Compensation Ordinance contains a “say on pay” approval mechanism for the
compensation of the Board of Directors and the Group Executive Management pursuant to
which the shareholders must vote on the compensation of the Board of Directors and the Group
Executive Management on an annual basis, either prospectively or retrospectively or a
combination thereof. Swiss public companies are required to specify in their Articles of
Association the mechanism for say-on-pay votes, subject to certain minimum requirements.
These minimum requirements provide that the say-on-pay vote must be (i) held annually,
(ii) binding and (iii) separate for the members of the board of directors, the members of the
executive management and the members of the advisory board (if any).The Compensation
Ordinance also requires a company to establish in its articles of association the principles
relevant for the determination of the compensation of the board of directors and the executive
management, including, but not limited to, the principles regarding the performance-based
compensation for the members of the executive management and the grant of equity securities,
conversion rights and option rights to members of the executive management.
In addition, the Compensation Ordinance prohibits certain types of compensation arrangements
with members of a Swiss public company’s board of directors, executive management and
269
advisory board, including severance payments, forms of advance compensation, transaction
bonuses and certain other types of compensation and benefits not expressly provided for by the
company’s articles of association.
The Compensation Ordinance generally prohibits severance payments in whatever form. In
addition, excessive termination notice periods in employment contracts (i.e., longer than one
year) and long-term employment contracts for a fixed term of more than one year are viewed as
prohibited severance payments. However, post-employment non-competition covenants and
consultancy agreements are not subject to the Compensation Ordinance’s severance pay
prohibition, unless deemed disguised severance payments as a result of their excessive terms.
The Compensation Ordinance also restricts certain forms of advance compensation. The decisive
element in distinguishing prohibited advance payments from certain types of allowed advance
payments, such as sign-on bonuses, is the point in time at which such payments are made.
Consequently, sign-on bonuses compensating benefits and other entitlements that executives
forfeit from their previous employers are permissible whereas genuine prepayments of salary
(i.e., if the contractual salary is paid in advance) are not permitted. Likewise, the Compensation
Ordinance prohibits transaction bonuses.
The Compensation Ordinance requires a company’s board of directors to prepare an annual
written compensation report disclosing all compensation directly or indirectly granted by the
company. In substance, the compensation report must include the information that the Swiss
Code of Obligations (Obligationenrecht) already requires to be disclosed in the notes to a
company’s annual statutory balance sheet. The disclosure relates to any compensation, loans
and credits granted during the most recently ended fiscal year to members of the board of
directors, the executive management and the advisory board and, to the extent not in line with
market standards, to former members of the board of directors, the executive management and
the advisory board and related parties of such current and former members of the board of
directors, the executive management and the advisory board. The compensation report must
also include the compensation and the loans and credits granted (and in case of loans and
credits outstanding) to members of the board of directors and the advisory board disclosed on
an aggregate and individual basis, whereas compensation and loans and credits granted to
members of the executive management must only be disclosed on an aggregate basis, together
with the name of the executive management member who received the highest compensation
and the amount thereof.
As a result of the Compensation Ordinance, the articles of association of a Swiss public company
need to include provisions regarding (i) the maximum number of permissible activities that the
members of the board of directors, executive management and advisory board may carry out in
the supreme governing bodies of other companies that are not controlled by the company or
control the company, (ii) the maximum term of and/or the notice period under compensation
arrangements with members of the board of directors, executive management and advisory
board (which should not, in either case, exceed one year), (iii) the duties and responsibilities of a
company’s compensation committee and (iv) the particulars of the say-on-pay vote of the
ordinary shareholders’ meeting.
The Compensation Ordinance further requires that the members of the board of directors, the
chairman of the board of directors, the members of the compensation committee (who may
only be selected among the members of the board of directors) and one or several independent
proxies be elected by a shareholders’ meeting on an individual basis for a term ending at the
next ordinary shareholders’ meeting. Re-election in all instances is permitted.
The Compensation Ordinance prohibits the representation of shareholders by corporate proxies
(i.e., officers or other company representatives) as well as by proxies of deposited shares. The
provisions of the Compensation Ordinance further provide that the board of directors must
ensure that the shareholders are able to electronically grant proxies and instruct the
independent proxy on both (i) agenda items included in the invitation to the shareholders’
270
meeting and (ii) new motions which were not disclosed in the invitation to the shareholders’
meeting. The independent proxy is required to exercise the voting rights granted by
shareholders only in accordance with shareholder instructions. Further, absent express voting
instructions, the independent proxy is required to abstain from voting.
The criminal provisions of the Compensation Ordinance penalize intentional non-compliance by
any member of the board of directors, executive management and advisory board who acted
against their “better knowledge” (wider besseres Wissen) and pays out or receives impermissible
forms of compensation. The Compensation Ordinance also stipulates criminal liability for certain
prohibited actions by a Swiss public company’s board of directors. Intentional violations of the
Compensation Ordinance can result in imprisonment of up to three years and a fine of up to six
times the individual offender’s annual salary.
2.
Remuneration Principles of the Company
In accordance with the Compensation Ordinance, Article 12 of the Articles of Association
provides that each year, beginning at the annual shareholders’ meeting in 2016, the
shareholders’ meeting must vote separately on the proposals by the Board of Directors
regarding the aggregate amounts of the:
Š
fixed compensation of the Board of Directors for the term of office until the next
shareholders’ meeting, as well as any possible additional compensation of the Board of
Directors for the preceding business year as specified in Article 25 paragraph 1 of the Articles
of Association (i.e., at the annual shareholders meeting 2016, shareholders will, for the first
time, vote on the compensation of the Board of Directors for the period from the annual
shareholders’ meeting in 2016 until the shareholders’ meeting in 2017);
Š
the fixed compensation of the Group Executive Management to be paid in the subsequent
business year as specified in 12 of the Articles of Association (i.e., at the annual shareholders
meeting 2016, shareholders will, for the first time, vote on the fixed compensation of the
Group Executive Management for the business year 2017); and
Š
variable compensation of the Group Executive Management based on the results and targets
achieved in the preceding business year, which generally shall be paid after approval (i.e., at
the annual shareholders meeting 2016, shareholders will, for the first time, vote on the
variable compensation of the Group Executive Management for the business year 2015).
If the shareholders’ meeting does not approve the amount of the proposed fixed and proposed
variable compensation, as the case may be, the Board of Directors may either convene a new
extraordinary shareholders’ meeting with new proposals for approval or submit the proposals
regarding compensation for retrospective approval at the next annual shareholders’ meeting.
Furthermore, the Board of Directors may make proposals to the shareholders’ meeting for
approval in relation to (i) total amounts and/or parts of the compensation for other periods
and/or (ii) additional amounts for certain parts of the compensation.
The aggregate compensation amounts are deemed to be inclusive of all social security and
pension contributions by the members of the Board of Directors, the Group Executive
Management and by the Company (i.e., contributions by employee and employer).
Pursuant to the Compensation Ordinance, the Company will be required to prepare an annual
compensation report for the first time for the business year 2015. The Company intends to
include the compensation report in its annual financial statements. The compensation report
will, among other things, include the compensation of the members of the Board of Directors
and of the members of the Group Executive Management on an aggregate basis, as well as the
amount regarding the highest paid member of the Group Executive Management.
In accordance with the Compensation Ordinance, Article 28 of the Articles of Association
provides that the Company shall not grant loans, credits, pension benefits (other than from
occupational pension funds) or securities to the members of the Board of Directors or the Group
271
Executive Management. Article 28 of the Articles of Association further provides that, in
principle, the Company will not make payments to pension funds or similar institutions for the
members of the Board of Directors. However, in exceptional cases, such payments may be made
upon request of the Nomination and Compensation Committee, subject to the approval by the
shareholders’ meeting, if the members in question do not have other insurable income from
subordinate employment or if required by mandatory applicable law.
3.
Remuneration of the Board of Directors
In accordance with the requirements of the Compensation Ordinance, Article 25 of the Articles
of Association sets out the principles for the elements of the compensation of the members of
the Board of Directors.
The members of the Board of Directors shall receive a fixed compensation and additional fixed
compensation for memberships in committees of the Board of Directors as well as a lump sum
compensation for expenses that is determined by the full Board of Directors based on the
proposal of the Nomination and Compensation Committee and subject to and within the limits
of the aggregate amounts approved by the shareholder meeting. The compensation is awarded
in cash. In exceptional cases and subject to and within the limits of the approval by the
shareholder meeting, the members of the Board of Directors may be awarded an additional
bonus. For the current financial year the annual fixed salary amounts to €300 thousand for the
Chairman and €100 thousand for each other member, plus €50 thousand for each committee
membership (all amounts excl. VAT and Swiss social security contributions, if any).
The Chairman of the Board of Directors is also chairman of the supervisory board of EDAG
Engineering GmbH. The members of the supervisory board of EDAG Engineering GmbH receive
a fixed remuneration which is governed by the statutes of EDAG Engineering GmbH and
specified by shareholder resolution. In the fiscal year ended December 31, 2014, the aggregate
remuneration of the members of the supervisory board of EDAG Engineering GmbH amounted
to €479 thousand.
Members of the Board of Directors providing consulting services to the Company or other group
companies in a function other than as members of the Board of Directors may be compensated
in cash according to standard market rates subject to approval by the shareholder’s meeting.
The Company may indemnify members of the Board of Directors from any damage and other
losses incurred by them in connection with any proceedings, disputes and settlements relating
to their activity for the EDAG Group and make related advance payments and provide insurance
cover.
4.
Remuneration of the Group Executive Management
Article 26 of the Articles of Association sets out the principles for the elements of the
compensation of the members of the Group Executive Management. The compensation of the
members of the Group Executive Management shall consist of a fixed compensation and a
variable performance and success-based compensation (“Variable Compensation”), each payable
in cash, as well as a lump sum compensation for expenses.
The Variable Compensation is based on the level of achievement of specific pre-defined targets
for a one year performance period. The targets may relate to at least 50% (i) to financial
performance indicators namely turnover, EBIT, distributable profit and up to another 50% (ii) to
the achievement of special projects as well as other company related and/or individual target
values and also financial key figures. Upon proposal by the Nomination and Compensation
Committee, the Board of Directors is responsible for the selection and weighting of target
categories.
The maximum share of the Variable Compensation in the total compensation of a member of
the Group Executive Management is determined by the Board of Directors for each member of
the Group Executive Management as a percentage of the fixed compensation and may not
exceed an amount equal to 50% of the fixed compensation in case of the CEO and an amount
272
equal to 71.4% of the fixed compensation in case of the CFO. The targets are determined
annually for each member of the Group Executive Management at the beginning of the one
year performance period by the Board of Directors upon proposal by the Nomination and
Compensation Committee.
For the nine-month period ended September 30, 2015, the fixed and variable salary amounts to
an aggregate of €825.0 thousand for Mr. Ohlsen and Mr. Vogt of the management board of
EDAG Engineering GmbH (all amounts excluding social security and share based compensation).
These two managing directors represent the Group Executive Management of the Company as
of its incorporation. Furthermore, the two members of the Group Executive Management are
also managing directors of EDAG Engineering GmbH. As such they will receive a special bonus in
the amount of €500 thousand, either in cash or in shares or share options, in case the EDAG
Group goes public by December 31, 2016. This bonus has to be approved by the Shareholders’
meeting of the Company. For the fiscal year ended December 31, 2014, the managing directors
of EDAG Engineering GmbH, consisting of the Group Executive Management and two other
managing directors, received an aggregate remuneration in the amount of €3.4 million
(including fixed and variable remuneration).
No equity related securities or options shall be allocated and no additional compensation shall
be awarded for activities in companies being directly or indirectly controlled by the Company.
According to Article 12 of the Articles of Association, the annual shareholders’ meeting will, for
the first time in 2016, be required to approve (i) the variable compensation of the Group
Executive Management for the business year 2015; and (ii) the fixed compensation of the Group
Executive Management to be paid for the business year 2017.
Pursuant to Article 27 of the Articles of Association, expenses that are not covered by the lump
sum compensation for expenses pursuant to the expense regulations of the Company are
reimbursed against presentation of the relevant receipts. This additional compensation for
expenses actually incurred does not need to be approved by the General Meeting.
5.
Permitted other activities of the members of the Board of Directors and the Group
Executive Management
According to Article 23 of the Articles of Association, the members of the Board of Directors
may have the following other functions in management or administrative bodies (oberste
Leitungs- oder Verwaltungsorgane) of legal entities obliged to register themselves in a Swiss
commercial register or a foreign equivalent thereof and which are not controlled by the
Company, do not control the Company or do not constitute pension funds insuring employees
of our Group:
Š
up to 10 mandates as a member of the board of directors or any other top supervisory or
management body of a legal entity whose shares are publicly traded pursuant to Article 727
paragraph 1 number 1 Compensation Ordinance;
Š
management body of a legal entity pursuant to Article 727 paragraph 1 number 2
Compensation Ordinance;
Š
management body of legal entities that do not meet the above mentioned criteria; and
Š
up to 10 mandates in associations, charity foundations and employee assistance foundations.
273
With the approval of the Nomination and Compensation Committee, the members of the Group
Executive Management may have the following other functions in the top supervisory or
management bodies of legal entities obliged to register themselves in a Swiss commercial
register or a foreign equivalent thereof and which are not controlled by the Company, do not
control the Company or do not constitute pension funds insuring employees of our Group:
Š
up to 2 mandates as a member of a board of directors or any other top supervisory or
management body of a legal entity whose shares are publicly traded pursuant to Article 727
paragraph 1 number 1 Compensation Ordinance;
Š
management body of a legal entity pursuant to Article 727 paragraph 1 number 2
Compensation Ordinance; and
Š
management body of legal entities that do not meet the above mentioned criteria.
With respect to the additional activities of both the members of the Board of Directors and the
Group Executive Management, mandates in companies that are under uniform control or the
same beneficial ownership are deemed one mandate.
6.
Agreements related to the compensation for members of the Board of Directors and the
Group Executive Management
According to Article 24 of the Articles of Association, mandate agreements of the members of
the Board of Directors have a fixed term of one year ending on the conclusion of the next
annual shareholders’ meeting, subject to early termination or removal.
The employment agreements of the members of the Group Executive Management shall, in
principle, be concluded for an indefinite period. If the Board of Directors considers a fixed term
appropriate, such fixed term shall not exceed twelve months. With respect to employment
agreements entered into for an indefinite period, the maximum notice period shall not exceed
twelve months.
7.
Conflicts of interest
Swiss law does not provide for a general provision regarding conflicts of interest. However, the
Swiss Code of Obligations (Obligationenrecht) requires the Board of Directors and senior officers
to safeguard the Company’s interests and imposes a duty of care and loyalty on the members of
the Board of Directors and senior officers. This rule is generally understood as disqualifying
members of the Board of Directors and senior officers from decisions that directly affect them.
Members of the Board of Directors and senior officers are personally liable to the Company, its
shareholders and its creditors for damages caused by willful or negligent violation of their
duties. In addition, Swiss statutory law contains a provision under which payments made to a
shareholder or a member of the Board of Directors or any person associated with such
shareholder or member of the Board of Directors, other than at arm’s length, must be repaid to
the Company if the recipient of such payment acted in bad faith. In addition, if the company
concluding a contract is represented by the person with whom it is concluding the contract such
contract must be in writing pursuant to the Swiss Code of Obligations (Obligationenrecht). This
requirement does not apply to contracts relating to daily business matters if the value of the
company’s performance obligations under the contract does not exceed CHF 1,000. Further, as
described in more detail below, Swiss public companies listed in Switzerland or abroad must
comply with detailed rules regarding the compensation of, and granting of loans to, members
of the board of directors and the management.
In accordance with the Compensation Ordinance, the Articles of Association limit the number of
mandates which members of the Board of Directors and Group Executive Management may
accept outside our Group (see above).
274
8.
Shareholdings of the Members of the Board of Directors and Group Executive Management
No member of the Board of Directors or Group Executive Management holds any shares in the
Company.
V.
CERTAIN INFORMATION REGARDING THE MEMBERS OF THE BOARD OF DIRECTORS AND
GROUP EXECUTIVE MANAGEMENT
THE
In the last five years, no member of the Board of Directors or the Group Executive Management
has been convicted of fraudulent offences.
In the last five years, no member of the Board of Directors or the Group Executive Management
has been associated with any bankruptcy, receivership or liquidation acting in its capacity as a
member of any administrative, management or supervisory body or as a senior manager.
In the last five years, no official public incriminations and/or sanctions have been made by
statutory or legal authorities (including designated professional bodies) against the members of
the Board of Directors or the Group Executive Management, nor have sanctions been imposed
by the aforementioned authorities.
No court has ever disqualified any of the members of the Board of Directors or the Group
Executive Management from acting as a member of the administrative, management, or
supervisory body of an issuer, or from acting in the management or conduct of the affairs of any
issuer for at least the previous five years.
Thomas Eichelmann is the Chairman of the Board of Directors and the CEO of the Selling
Shareholder. Following the Offering, our Selling Shareholder will continue to exercise
significant influence on the Company and thereby have, inter alia, a substantial influence on
matters submitted to a vote of the Company’s shareholders meeting and change of control
matters. To the extent that interests of the Selling Shareholder differ from those of the
Company, Mr. Eichelmann is exposed to potential conflicts of interest.
Dr. Lutz Mario Helmig ultimately controls FFT Produktionssysteme GmbH & Co. KG, with which
we generate a significant amount of sales revenues. If the interests of this company diverge
from those of the EDAG Group, Dr. Helmig is exposed to potential conflicts of interest as
shareholder of FFT Produktionssysteme GmbH & Co. KG and as indirect shareholder of the
Company.
Otherwise, there are no conflicts of interest or potential conflicts of interest between the
members of the Board of Directors or the Group Executive Management as regards the
Company on the one side and their private interests, membership in governing bodies of
companies, or other obligations on the other side.
No member of the Board of Directors or the Group Executive Management has entered into a
service agreement with a Group company that provides for benefits upon termination of
employment or office.
There are no family relationships between the members of the Board of Directors and the Group
Executive Management respectively, either among themselves or in relation to the members of
the other body.
VI.
1.
SHAREHOLDERS’ MEETING
Overview
Under Swiss law, the ordinary shareholders’ meeting must take place annually within six months
of the end of a company’s fiscal year. Extraordinary shareholders’ meetings are called for if the
Board of Directors or the auditors deem it necessary or if shareholders representing at least 10%
of the share capital so request. Shareholders individually or jointly representing at least three
per cent of the share capital of the Company may demand that items be put on the agenda.
Such demands have to be submitted to the Chairman of the Board of Directors at least 45 days
275
before the date of the shareholders meeting and shall be in writing, specifying the item and the
proposals. Furthermore, one or more shareholders representing at least 10% of the total share
capital outstanding at the time may request the Board of Directors, in writing and by indicating
the agenda items and the associated motions, to call an extraordinary shareholders’ meeting.
The notices of any shareholders’ meeting is to be made by the Board of Directors by way of
official publication in the Swiss Official Gazette of Commerce (Schweizerisches
Handelsamtsblatt) and the German Electronic Federal Gazette (Bundesanzeiger) during the
period of the admission of the shares on the Frankfurt Stock Exchange or any other German
stock exchange not less than twenty days prior to the date of the meeting. The invitation must
state the date, time and place of the meeting, the agenda items as well as the motions of the
Board of Directors and of the shareholders who have requested the holding of the shareholders’
meeting or the inclusion of an item in the agenda.
The Articles of Association do not prescribe that a quorum of shareholders is required to be
present at a shareholders’ meeting. Unless otherwise required by law or the Articles of
Association, the shareholders’ meeting passes resolutions and carries out elections by absolute
majority of the votes cast, excluding any abstentions, blank or invalid votes. Elections are to be
held separately. A resolution by the shareholders’ meeting requires at least two-thirds of the
voting rights represented and an absolute majority of the nominal value of shares represented
for: (i) any amendment of the company’s objects, (ii) the introduction of shares with preferential
voting rights, (iii) any restriction on the transferability of registered shares, (iv) an authorized or
contingent capital increase (v) a capital increase funded by equity capital (Kapitalerhöhung aus
Eigenkapital), against contributions in kind (Sacheinlage) or to fund acquisitions in kind
(Sachübernahme) and the granting of special privileges (Gewährung besonderer Vorteile),
(vi) any restriction or cancelation of the subscription right, (vii) the change of the registered
office of the Company, (viii) the dissolution of the Company and (ix) other matters listed in
Article 704 (1) of the Swiss Code of Obligations (Obligationenrecht) or Article 18 and 64 of the
Swiss Federal Merger Act (Fusionsgesetz). Subject to the foregoing exceptions, a shareholders’
meeting also has the power to vote by an absolute majority of the votes cast on amendments to
the Articles of Association, to elect and remove the members of the Board of Directors, the
Chairman of the Board of Directors, the members and the chairman of the Nomination and
Compensation Committee, the independent proxy and the auditors and to approve the annual
report and financial statements as well as to pass resolutions regarding the use of the balance
sheet profit, in particular to declare dividends, to discharge the members of the Board of
Directors from liability for matters disclosed to the shareholders’ meeting, to pass resolutions as
to all matters which have been submitted to the shareholders’ meeting for its decision by the
Board of Directors and to approve the aggregate amounts of the maximum compensation of
the members of the Board of Directors and the Group Executive Management. Furthermore, the
shareholders’ meeting has the power, by an absolute majority of the votes cast, to order an
independent investigation into specific matters proposed to the shareholders’ meeting
(Sonderprüfung). The Chairman has no casting vote.
At shareholders’ meetings, shareholders may be represented by their statutory proxy, another
shareholder with voting rights or by the independent proxy (see below “P. Corporate Bodies—
VIII. Independent Proxy”). Shareholders will be required to provide evidence of their
shareholdings in the Company.
Resolutions and elections are carried out openly, unless a written ballot is resolved by the
shareholders’ meeting or is ordered by the chairman of the meeting. The chairman of the
meeting may also arrange for resolutions and elections to be carried out by electronic means.
Resolutions and elections carried out by electronic means are deemed to have the same effect as
written ballots.
In accordance with the Compensation Ordinance, special rules apply with respect to votes on
compensation (see “P. Corporate Bodies—IV. Remuneration and Other Benefits of the Board of
Directors and the Group Executive Management”).
276
2.
Shareholders’ inspection rights
A shareholder may review the minutes of the shareholders’ meeting at the registered office of
the Company. In accordance with Swiss law, the Company makes its annual report and the
auditors’ report available for inspection to its shareholders at its registered office/address at
least twenty days prior to each ordinary shareholders’ meeting. Any shareholder may request a
copy of these reports in advance of or after the ordinary shareholders’ meeting. In addition, at a
shareholders’ meeting, a shareholder may request information from the Board of Directors
concerning the business and operations of the Company and may request information from the
auditors concerning the performance and results of their examination of the financial
statements. The Company may refuse to provide that information to a shareholder if, in its
opinion, the disclosure of the requested information would reveal business secrets or infringe
other protected interests of the Company.
VII. AUDITORS
PwC-CH are the auditors of the Company. The shareholders must confirm the appointment of
the auditors on an annual basis at the shareholders’ meeting.
VIII. INDEPENDENT PROXY
Pursuant to the Compensation Ordinance and our Articles of Association, the shareholders’
meeting elects the independent proxy for a term ending at the conclusion of the next annual
shareholders’ meeting. Re-election is possible.
At our shareholders’ meeting held on November 2, 2015, Mr. Roger Föhn, c/o ADROIT Attorneysat-law, Kalchbühlstrasse 4, CH-8038 Zürich, Switzerland was elected as the independent proxy
for the term ending at the conclusion of the next annual shareholders’ meeting.
IX.
1.
CORPORATE GOVERNANCE
Corporate Governance Code
Neither the Swiss Code of Best Practice for Corporate Governance (the “Swiss Code”) nor the
German Corporate Governance Code are directly applicable to the Company. However, as of the
date of the prospectus, the Company complies, and following the listing of the Company’s
shares on the Frankfurt Stock Exchange intends to continue to comply, with the
recommendations of the Swiss Code except for such provisions which the Company believes
should be adapted to actual circumstances.
The Swiss Code was originally published by economiesuisse as the Swiss Business Federation
from all sectors of the economy in July 2002 and supplemented with an appendix containing
recommendations on the remuneration of boards of directors and executive boards in 2007. The
latest version was approved in its revised form by the board of economiesuisse on 28 August
2014 and reflects both the international developments in the area of corporate governance as
well as changes at Swiss level, which have resulted from the revision of Article 95 (3) of the
Federal Constitution in particular.
The Swiss Code makes non-binding proposals concerning the management and supervision of
Swiss-listed companies. It is based on internationally and nationally recognized standards of
good, responsible governance. The Code contains recommendations and suggestions (for
corporate governance in relation to shareholders and the shareholders’ meeting, the board of
directors the executive board, transparency and accounting and auditing of financial
statements. The Swiss Code is intended for Swiss public limited companies. Certain provisions
address institutional investors and intermediaries. The purpose of the Swiss Code is to set out
guidelines and recommendations while every company should retain the option of putting its
own ideas on organizing corporate governance into practice. Compliance with the Swiss Code’s
recommendations or suggestions is not obligatory. In addition, the Swiss Code specifically allows
for its rules to be adapted to actual circumstances, depending on the shareholder structure
(namely for companies with active major shareholders) and the size of the company.
277
Provisions of the Swiss Code which the Company believes should be adapted to actual
circumstances are the following: Presently and upon listing, the Company deviates and intends
to continue to deviate from the recommendation of the Swiss Code regarding the independence
of the (majority of the) members of the Board of Directors as well as (all) members of the Audit
Committee. In addition, the Company presently does not and does not intend to follow the
recommendation of the Swiss Code according to which members of the board and the executive
management should in part be compensated in shares.
On the other hand, presently, the Company goes beyond certain recommendations of the Swiss
Code. For example, the Company has no authorized or conditional capital meaning that for as
long as this will remain unchanged any future capital increase of the Company will require
shareholder approval. Also, the minimum nominal capital required to enable a shareholder to
request that a specific item be put on the agenda of the shareholders meeting is
CHF 1,000 thousand whereas the Articles of Associations set the level at 3% of the issued
nominal share capital which is less than CHF 1,000 thousand.
2.
Voting rights agreement
Following the successful completion of the Offering and assuming placement of all the Offer
Shares and full exercise of the Greenshoe Option, our Selling Shareholder together with HORUS
Vermögensverwaltungs GbR, a company controlled by Dr. Lutz Mario Helmig, which might
acquire shares in connection with the Offering on a non-preferential basis (see “C. The
the outstanding share capital of the Company. Therefore, the Selling Shareholder will continue
to exercise substantial control over the Company. However, following the successful completion
of the Offering, the Selling Shareholder intends to deconsolidate the Company from its
consolidated financial statements and has therefore agreed to limit its control over the
Company. The Selling Shareholder has entered into an a

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