Mannesmann in 1999
17 February 2000
Mannesmann in 1999
-- EBITDA increased by 37 percent to Euro 4.3 billion
-- Proportionate EBITDA in Telecommunications increased by 65 percent
-- Sales increased by 22 percent
-- Investments worth Euro 16.5 billion
Mannesmann confirms its strong growth as indicated at the beginning of
the year
DUESSELDORF, Germany, Feb. 17 -- In 1999, Mannesmann's EBITDA
(earnings before interest, taxes, depreciation and amortisation) amounted to
about Euro 4.3 billion. This exceeded last year's level of Euro 3.1 billion
by 37 percent. Engineering & Automotive contributed about Euro 1.1 billion to
this result (1998: Euro 1.2 billion). At approx. Euro 2.1 billion,
proportionate EBITDA of the Telecommunications division increased by 65
percent (1998: Euro 1.3 billion). This was mainly due to the continued
success of mobile telecommunications activities and the substantial reduction
of start-up losses in the fixed-line business. Contrary to the first
statements in the previous year, Orange is not included in the figures.
At roughly Euro 1.5 billion, Mannesmann's result of ordinary activities
was above the 1998 level (Euro 1.385 billion), despite the large goodwill
amortisation and financing cost associated with the telecommunications
acquisitions. This increase was mainly due to the significant further
improvement in Telecommunications because of the strong growth in the mobile
telecommunications business.
Regarding the extraordinary result, positive effects from the continued
portfolio optimisation were overcompensated by significant expenses related to
the take-over bid from Vodafone. As already outlined at the beginning of this
year, net profit at about Euro 0.5 billion is below last year's level. The
acquisitions in Telecommunications resulted in high non-deductible goodwill
amortisation and led therefore to an increase of the arithmetical tax rate
corresponding to the ratio corporate tax divided by pre tax profit.
At Euro 23.2 billion, Mannesmann's sales increased by 22 percent in 1999.
This was due to the further strong growth in Telecommunications (+93%) as a
result of the continued market success of Mannesmann D2, Arcor as well as the
recent acquisitions. At the end of 1999, Mannesmann had about 130,700
employees. This 12 percent increase was a result of the expansion in the
European telecommunications activities. Mannesmann's investments reached a
value of Euro 16.5 billion (1998: Euro 3.6 billion) because of acquisitions in
1999. Approx. 95 percent of these investments were made in
Telecommunications.
Telecommunications drives sales growth
At Euro 23.2 billion, Mannesmann sales exceeded the previous year level by
22 percent in 1999. This increase was due to the growth in Telecommunications
(+93%). It was driven by the continued market success of Mannesmann D2, Arcor
as well as Mannesmann's expanded position in the European telecommunications
market, which was achieved through last year's acquisitions (Omnitel,
Infostrada, o.tel.o). Engineering & Automotive recorded a sales increase of 3
percent. Tubes/Other companies experienced a decline mostly due to the weak
market development at Mannesmann Tubes. Adjusted for the acquisition or sale
of various companies, Mannesmann sales increased by 8 percent.
Further increase in earnings
In 1999, Mannesmann further increased the result of ordinary activities.
Despite the large goodwill amortisation and financing cost due to the 1999
telecommunications acquisitions, it amounted to approx. Euro 1.5 billion
(1998: Euro 1.385 billion).
Due to the strong growth of the mobile telecommunications business of
Mannesmann D2, Omnitel (Italy) and SFR (France), Telecommunications has
significantly increased its earnings. As a consequence of the first-time
consolidation of o.tel.o and Infostrada, the result of fixed-line activities
was below last year's level. Arcor and Infostrada -- in a start-up situation
-- made strong progress.
Engineering & Automotive slightly exceeded last year's result. Dematic
and Demag Krauss-Maffei in particular achieved higher earnings than in 1998,
the latter especially because of portfolio optimisation measures.
Tubes/Other companies ended 1999 with a clearly negative result. This was
due to the negative market development in Tubes and the higher financing cost
as a result of acquisitions.
Development in the divisions
At Euro 9.1 billion, Mannesmann sales in Telecommunications increased by
93 percent in 1999. This represented a 39 percent share in total Mannesmann
sales. On a comparable basis -- excluding the pro-rata first-time inclusion
of Omnitel, Infostrada and o.tel.o -- this increase amounted to 31 percent.
Mannesmann D2 further expanded its leadership position in the German
mobile telecommunications market. Sales increased by 37 percent to
Euro 5.1 billion. With more than 3.5 million additional subscribers, the
customer base reached about 9.5 million by the end of the year (+59%).
Meanwhile, Mannesmann D2 has more than 10 million subscribers. In December
alone, D2 gained almost 700,000 new subscribers and roughly 500,000 in the
first six weeks of this year. The new integrated products, D2-Twin Star and
the D2-Triple-Pack (D2-Twin Star, D2-Online and D2-contract) met with a very
positive response in the market.
Mannesmann Arcor further increased its competitive edge as the leading
private full service provider of voice, data and value-added services in the
German fixed-line market. In doing so, the acquisition of o.tel.o and the
majority interest held in the Duesseldorf-based city carrier ISIS played an
important role. Since September 1999, Arcor has been the first nation-wide
competitor to offer a complete connection with all ISDN convenience features
and Internet access in ten large German cities. In the meantime, Arcor has
also introduced a broad scope of Internet services. Arcor increased its sales
by 41 percent to Euro 1.3 billion in 1999. Not including o.tel.o, the
increase was 9 percent.
In 1999, Italian mobile telecommunications operator Omnitel posted record
growth. Since the beginning of the year, the subscriber base has increased by
68 percent to about 10.4 million. At Euro 3.7 billion, sales were about 60
percent higher for the entire year. The new Internet products, Omnitel 2000
and http://www.spazioomnitel.it, started during the previous year, have developed
excellently and will be further expanded. On average, Omnitel 2000 counted 6
million visitors per month.
Infostrada, Mannesmann's Italian fixed-line operator, was further headed
for success. At the end of 1999, Infostrada had more than 2.4 million voice
subscribers and about 1.5 million Internet customers. Parallel to the strong
growth in business volume, network expansion was accelerated. Infostrada
increased its 1999 sales to Euro 723 million. Compared to 1998, it has more
than quadrupled.
Engineering & Automotive increased sales by 3 percent to Euro 12.3 billion
in 1999. All divisions contributed to this development.
At Mannesmann Rexroth, increases in the foreign companies, particularly in
the US and Asia, were responsible for exceeding the high sales level of 1998.
In order intake, declines in Germany were also overcompensated by an increased
order intake in the foreign companies, mainly in the above mentioned markets.
Mannesmann Dematic experienced a sales increase of 12 percent. Half of
this was due to the inclusion of new companies in France, Italy, the Czech
Republic, Australia and the US. Thus, Mannesmann Dematic further strengthened
its leading position in the world market and rounded out its product range.
On a comparable basis, order intake increased by 7 percent. To an
above-average extent, Systems, which increased significantly because of
stronger demand abroad, was responsible for this development.
At Mannesmann Demag Krauss-Maffei, various portfolio measures (Transport
Technology, Dorr-Oliver and Linear motor business) resulted in a decrease of
sales. On a comparable basis, this division recorded a 2 percent sales
growth, which was due to increases in the business units Plastics Machinery
and Process plant and equipment. Upon adjustment, the order intake reached
last year's level. The decline in Compressors and Process plant and equipment
was overcompensated by an increase in Plastics Machinery.
Mannesmann VDO continued its growth. Previous year sales were exceeded by
10 percent. With the exception of Information Systems Commercial Vehicles,
all business units exceeded last year's figures. Cockpit Systems experienced
the strongest increase. Car Communications, Kienzle, Car Information Systems
and Fuel Systems also recorded noteworthy increases.
In 1999, Mannesmann Sachs recorded a slight sales increase (+1%). Torque
Converters as well as Rubber Metal Parts and Gas Springs recorded significant
and above-average increases, respectively. Original equipment for shock
absorbers remained at last year's level.
Due to the sustained weak tubes market and adjusted for deconsolidated
activities in Tubes, Tubes/Other companies experienced a sales decrease of
17 percent to about Euro 2 billion.
Employees
At the end of 1999, Mannesmann had about 130,700 employees. This
12 percent increase was mainly due to the acquisitions in Telecommunications.
This was also reflected by the 34 percent increase to about 58,600 employees
outside of Germany.
Investments
In 1999, Mannesmann's investments amounted to Euro 16.5 billion, of which
almost 95 percent were applied to telecommunications activities -- further
networks extension and the acquisitions of o.tel.o, Omnitel and Infostrada as
well as the stake increase in Arcor.
With approx. Euro 500 million in 1999, operational investments in
Engineering & Automotive reached last year's level. 1998 figures contained a
larger volume resulting from first-time consolidations particularly at VDO
(Car Communication) and Sachs (Aralmex).
MANNESMANN Jan.-Dec. Jan.-Dec. Change
1999 1998 absolute in %
Sales in Euro
million 23,209 19,065 4,144 22
Telecommunications 9,075 4,713 4,362 93
Engineering & Automotive 12,321 11,906 415 3
Other companies 1,958 2,577 -619 -24
Employees (Dec. 31) 130,657 116,247 14,410 12
Investments in Euro
million 16,469 3,588 12,881 359
SALES Jan.-Dec. Jan.-Dec. Change
1999 1998
in Euro in Euro absolute in %
million million
Mobilfunk 5,111 3,731 1,380 37
Arcor 1,326 939 387 41
Omnitel * 2,190 2,190
Infostrada * 399 399
Eurokom 159 101 58 57
Telecommunications 9,075 4,713 4,362 93
Rexroth 2,588 2,547 41 2
Dematic 2,231 1,989 242 12
Demag Krauss-Maffei 1,936 2,132 -196 -9
VDO 3,464 3,160 304 10
Sachs 2,164 2,150 14 1
Engineering &
Automotive 12,321 11,906 415 3
Other companies 1,958 2,577 -619 -24
Total 23,354 19,196 4,158 22
./.Intercompany sales 145 131 14 11
MANNESMANN 23,209 19,065 4,144 22
Domestic sales 10,756 9,325 1,431 15
Foreign sales 12,453 9,740 2,713 28
* consolidated for the first time
EMPLOYEES Dec. 31, 1999 Dec. 31, 1998 Change
absolute in %
Mobilfunk 7,865 7,250 615 8
Arcor 7,913 6,499 1,414 22
Omnitel * 7,898 7,898
Infostrada * 3,222 3,222
Eurokom 1,555 1,029 526 51
Telecommunications 28,453 14,778 13,675 93
Rexroth 20,855 20,954 -99 0
Dematic 14,999 13,270 1,729 13
Demag Krauss-Maffei 10,162 11,279 -1,117 -10
VDO 23,865 21,905 1,960 9
Sachs 19,953 19,692 261 1
Engineering &
Automotive 89,834 87,100 2,734 3
Other companies 12,370 14,369 -1,999 -14
MANNESMANN 130,657 116,247 14,410 12
Domestic companies 72,107 72,426 -319 0
Foreign companies 58,550 43,821 14,729 34
* consolidated for the first time
INVESTMENTS Jan.-Dec. Jan.-Dec. Change
1999 1998
in Euro in Euro absolute %
million million
Mobilfunk 845 477 368 77
Arcor 2,601 604 1,997 331
Omnitel * 7,938 7,938
Infostrada * 2,977 2,977
Eurokom 1,218 899 319 35
Telecommunications 15,579 1,980 13,599
Rexroth 115 190 -75 -39
Dematic 165 185 -20 -11
Demag Krauss-Maffei 152 104 48 46
VDO 184 597 -413 -69
Sachs 149 259 -110 -42
Engineering & Automotive 765 1,335 -570 -43
Tubes/Other companies 125 273 -148 -54
MANNESMANN 16,469 3,588 12,881 359
* consolidated for the first time