Financial developments
x €1,000 | 2022 | 2021 |
Statement of profit or loss | ||
Net revenue | 283,261 | 257,297 |
Operating result | 21,787 | 22,027 |
Net result | 15,820 | 15,133 |
Cash flow | ||
From operating activities | 43,459 | 33,664 |
From investing activities | -8,681 | -6,661 |
From financing activities | -14,577 | -26,568 |
Net cash flow | 20,201 | 435 |
Balance sheet | ||
Shareholders’ equity attributable to shareholders | 85,990 | 76,082 |
Shareholders’ equity | 86,089 | 76,261 |
Balance sheet total | 240,319 | 213,591 |
Key ratios | ||
Operating result as % of revenue | 7.7% | 8.6% |
Profitability of capital invested 1 | 19.1% | 15.1% |
Profitability of shareholders’ equity 2 | 19.7% | 21.7% |
Solvency 3 | 35.8% | 35.7% |
Number of outstanding shares | 1,294,876 | 1,292,805 |
Earnings per share (in euros) | 12.31 | 11.70 |
Number of own employees4 | 1,032 | 1,092 |
- 1 Net result and interest expenses as a percentage of capital invested (total assets less cash and cash equivalents, less current, non-interest-bearing debts).
- 2 Net result as a percentage of the average shareholders’ equity attributable to Hydratec shareholders.
- 3 Shareholders’ equity as a percentage of the balance sheet total.
- 4 Own employee FTEs at year-end.
Result for 2022
Revenue in the year 2022 totalled €283 million. This is a 10% increase compared to 2021 (€257 million). The increase in revenue was achieved within Industrial Systems. As a result of the phasing out of production at Polmer, High-Tech Components’ revenue remained at the same level as the previous year. The fourth quarter saw record revenue, just like the third quarter. At 49.5%, the margin for 2022 is lower than for 2021 (52.1%). This was due to rising material prices in 2022, combined with the well-filled order book at the end of 2021. Price increases can generally only be passed on with some delay.
Operating costs came to €118 million in 2022 (2021: €112 million). There are several reasons for the increase. Higher remuneration and more insourcing have increased total salary costs. Sales costs also increased due to increased travel again after Covid-19 and more frequent participation in trade shows. Another major cause is increased production-related costs for energy and maintenance. More has also been invested in product development and development costs.
The higher level of revenue combined with higher costs resulted in an operating result comparable to 2021. Due to a lower debt position during 2022, the financial burden decreased from €1.4 million in 2021 to €0.9 million in 2022. The 2022 tax rate was 24.2% and lower than in 2021. Due to these effects, the net result (after tax) for 2022 was higher than in 2021: €15.8 million.
Cash flow
The operating cash flow in 2022 was €43.3 million (2021: €33.7 million). In total, we invested €11.3 million last year. We invested a large proportion of this in Helvoet India’s premises. Furthermore, we disposed of Polmer machinery and a Rollepaal building. Payment of dividends, repayment on and of non-current borrowings and lease liabilities resulted in a cash outflow of €13.9 million. On balance, the net cash flow was €20 million.
Financial position
The balance sheet total increased from €214 million in 2021 to €240 million for the past year. Inventory levels increased due to higher volumes at higher price levels. The positive bank balance continued to increase while the bank debt position fell further. Advance payments on projects by debtors also increased.
As at the balance sheet date, Hydratec Industries N.V. has not drawn on the overdraft under the credit facility available as at 31 December 2022 with a total amount of €44 million. However, there are bank guarantees as at the balance sheet date.
Solvency at the end of 2022 was 35.8% compared to 35.7% in 2021 and has thus improved.
Financial result for Industrial Systems
x €1,000 | 2022 | 2021 |
Revenue | 157,148 | 132,346 |
Gross margin | 65,323 | 60,086 |
Depreciation | 3,692 | 3,926 |
Investments | 1,076 | 2,014 |
Operating result | 17,152 | 17,477 |
Operating result (%) | 10.9% | 13.2% |
EBITDA | 20,844 | 21,403 |
Average number of FTEs | 348 | 366 |
Revenue at Industrial Systems worked out 19% higher in 2022 than 2021. A well-filled order book at the beginning of the year and a good intake during the year resulted in increased revenue. All markets within Industrial Systems contributed to the increased revenue: Royal Pas Reform considerably, Rollepaal strongly and Lan markedly. Supply chain problems had a negative impact on revenue. The gross margin increased, but was lower in percentage terms due to higher material and transport prices combined with an order book that was well-filled at the beginning of the year. This means that a relatively large amount of revenue was achieved on past orders. Cost increases on these projects could only be partially passed on to customers. In new projects, higher material costs are of course factored in. The different distribution of revenue across markets also lowers the margin.
Costs increased in 2022. Personnel costs rose due to further non-recurring income under the NOW wage subsidy scheme being recognised in 2021. Salary and insourcing costs were also higher. The number of FTEs remained roughly the same. In the first year after Covid-19, more was spent on sales costs (travel and trade shows), and product development.
The combination of higher revenue with a lower margin and higher costs led to an operating result similar to 2021: €17.2 million.
Revenue per FTE increased to €451 thousand, up 25% from 2021 (€362 thousand). This results from a more efficient approach and more outsourcing to partners.
Financial result of High-Tech Components
x €1,000 | 2022 | 2021 |
Revenue | 127,617 | 127,435 |
Gross margin | 74,901 | 73,938 |
Depreciation | 7,357 | 8,192 |
Investments | 10,193 | 4,605 |
Operating result | 7,777 | 7,031 |
Operating result (%) | 6.1% | 5.5% |
EBITDA | 15,134 | 15,223 |
Average number of FTEs | 680 | 782 |
At €128 million, revenue for High-Tech Components in 2022 was unchanged compared to the previous year. Not including the phased-out Polmer activities, revenue within High-Tech Components increased by 5.9% in 2022.
Despite higher raw material prices, the margin increased from 58.0% to 58.7% due to a better product mix. Since most of the costs at Polmer no longer applied, costs within this segment remained at the same level. Within High-Tech Components’ active markets, production-related energy and maintenance costs increased, as did other general costs. Despite the increase in energy costs, the fixed cost rate for active markets remained stable.
Due to the higher gross margin, the operating result rose from €7 million to €7.8 million.
More was invested in 2022 than in 2021. The largest investment was for the production site in India, which was previously leased. Investments were also made in injection moulding machines.
Revenue per FTE increased by 15%, from €163 thousand to €187 thousand per FTE.
Proposed dividend
Earnings per share in 2022 amounted to €12.31 (2021: €11.70). The proposal to the General Meeting of Shareholders is to set the dividend for the 2022 financial year at €6 per share. This dividend payment is in line with the policy of paying out at least 40% of the result after tax, excluding non-recurring income. The net result after the dividend for 2022 will be added to the other reserves.
Outlook and expectations
Hydratec got off to a good start in 2023. The companies’ market position remains strong, each in its own niche. As a result, we expect to pass on any continuing inflation, perhaps with a delay. The situation in Ukraine causes uncertainty. We do not expect any changes in our personnel, investment and financing policies in 2023. However, we will continue to critically examine activities that do not contribute enough. For instance, we plan to close the Hellevoetsluis site and relocate profitable operations to other locations. The order book is well-filled. In view of macroeconomic developments such as volatile exchange rates, trade restrictions, supply chain uncertainties and rising inflation, we do not consider it possible to make more concrete pronouncements about 2023.
