Heckler & Koch Financial Results 2012
26.07.2013
Oberndorf, July 2013: The following general statement pertains to the financial statements of Heckler & Koch Beteiligungs GmbH (HKB) and of Heckler & Koch GmbH (HKO) for the years 2011 and 2012.
The Heckler & Koch Group (“HK”) does not require a “financial assistance” and is not “looking for investors” as speculated in some media. The current mid term business plan of HK forecasts profitability which will enable the individual entities and the group of companies to strengthen equity and reduce net debt.
With respect to the Financial Statements a distinction has to be made between HKB and HKO. HKB owns 100% of the share capital of HKO and 55% of its own shares (treasury shares). Owning treasury shares is quite common, especially stock listed companies use the instrument of redeeming shares. HKB can sell these shares, or parts thereof, to third parties. Such a sale is an appropriate instrument to raise equity and is thus comparable to a capital increase but would only be possible with the approval of all current shareholders. Based on positive business development such sale is neither necessary nor intended.
The balance sheets of HKO and HKB, based on German GAAP, show liabilities exceeding assets therefore negative equity. This has no impact with regards to insolvency law due to the auditors having confirmed a going concern status.
During the year 2012, the HKO-group generated a turnover of € 235 million, earnings from operations of € 42 million (EBIT) and profit before tax of € 9 million (PBT). The Consolidated Financial Statement for HKO-Group as per 31.12.2012, according to IFRS, is stating positive equity.
The current high level of debt and the negative equity of HKB and HKB-Group have nothing to do with the defence technology related activities of HKO as it is the result of value adjustments regarding investments of HKB in shares and securities triggered by the financial and economic crisis of 2008 and 2009.
The HKB/HKO - Group is solely financed by the corporate bond of € 295 million notes which are due in 2018. Net debt amounts to approximately € 270 million.
In its current business plan, HKO forecasts that it will continue its sound financial performance of the year 2012 in future years. Moreover, with strong profitability it plans to reduce debt and strengthen HK’s equity capital base. The interim financial statement of HKO (single entity) as of 30.6.2013 based on German GAAP states a positive equity in the two-digit millions.
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e questo l'ho preso da un blog USA del 20/07/2013
G3Kurz
"Indebted gun supplier to the Armed Forces
Germany's leading gun manufacturer Heckler & Koch is deep in debt. But there is no question of insolvency. Better business in the coming years to reduce the debt. By Gerhard Hegman
Heckler & Koch assault rifles at the Eurosatory exhibition in Paris
Photo: picture alliance / dpaSturmgewehre by Heckler & Koch at the Eurosatory exhibition in Paris
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Topics defense industry
Germany's leading gun manufacturer Heckler & Koch is over-indebted by high losses, so it has more debts than assets. Nevertheless, the parent must sign in Oberndorf am Neckar no insolvency and its parent company for good business prospects.
After researching the "world" of the company's future again significant gains after a crash into red figures for 2011 and 2012. In addition, auditors audited specifically a positive forecast.
After almost 20 million euro loss for 2011, a mid double-digit million profit is expected this year in the main house.
Indebtedness of 119 million euros
Background for the growing debt of the company with sales of EUR 202.7 million (2012), in addition to delayed deliveries of 2011 gun especially high interest charges and impairment losses amounting to millions of complex financial transactions.
As the company announced on request, the end of 2012 the balance sheet deficit Beteiligungs-GmbH was the parent company Heckler & Koch at 119 million euros. At headquarters the negative equity amounted to 7.2 million euros.
But with Heckler & Koch nobody wants to talk of a lopsided. "A 'rescue plan' is not necessary," it says on request. The company was able to on their own profitability to meet their obligations to strengthen the capital base and reduce the debt.
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"Doubts about the economic and financial soundness we refer explicitly to the realm of speculation," the company announced. The economic situation is referred to as robust.
Great mission of the Bundeswehr
The management hopes to cut through better business in the coming years the debt again. Could be a helpful completed a few days ago Great mission of the Bundeswehr over 140 million euros for approximately 12,700 new machine guns (MG5).
In previous years, ensured the financial transactions of the Heckler & Koch-owner Andreas Heeschen stir. The company belongs to the 52-year-olds along with his brother Alfred Schefenacker and the British Keith Halsey. Heeschen was sued in 2010 by hedge funds.
They accused him that he had diverted millions of dollars from a loan company for private purposes, such as yachts and real estate, but the suit was not admitted in New York. Heeschen dismissed the allegations and decided to continue juggling with the financing of the company.
Part of the remodeling that funds were used from a corporate bond of 295 million euros to replace a mature bond for 120 million euros. In addition, a so-called 170 million PIK loan was acquired.
It is now used internally for the parent company and was extended in April to 2018. PIK loans are considered extreme form of loans for which interest and principal are deferred in part, what the debt is constantly increasing.
Moody's rated company with junk status
The U.S. rating agency, Moody's in January, the German gun suppliers based on its financial position with Caa2, which corresponds to junk status. Income from continuing operations should be just enough as to only pay 28 million annual interest on the corporate bond, they say.
In this case the shareholders and the management is clear that the capital base must be strengthened. Therefore, a capital injection is generally considered. In addition to capital measures also could be sold a package of 55 percent of the capital, which is self-owned, according to research by the "world" in the Notes to the balance sheet of the parent company in 2011.
In search of a possible buyer but the company owner would be limited. In defense companies, the federal government has a say when entering a foreign investor.
Exporting nations USA and England
Industry insiders speak of a great constellation in the coming years with the leading German weapons manufacturer who recently achieved 80 percent of its sales outside Germany.
Main export countries are the United Kingdom and the United States. Have so much to be earned with the sale of weapons that the company can reduce the growing debt.
For new orders but a good reputation in the art and the internal structures is important. Therefore, Heckler & Koch emerging reports of alleged defects or failures of rifles since 2005 and the current prosecutor's investigation into alleged illegal exports to Mexico are highly inconvenient for months.
The Oberndorf company with over 600 employees speak of a campaign to damage the company and rejects the allegations. Overall, the company looks despite debt rather optimistic about the future. Next year, sales will be at the level of 2013, with a similarly high income, according to the forecast."
