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GFT — Q1 constant currency organic growth was 13%

GFT — Q1 constant currency organic growth was 13%

GFT remains on target and thematic trends are broadly the same. Underlying Q1 revenue growth was solid at 13.3%, helped by 3% more days in the period, and management guidance was maintained. GFT’s retail banking activities remain buoyant, benefiting from digital banking projects in continental Europe and the group’s first retail banking project in the US, while the investment banking backdrop remains challenging, not helped by Brexit and the political changes in the US. With the sustained healthy outlook in digitalisation across the retail banking sector and the prospect of a recovery for the investment banking market (since these businesses need to invest in IT to sustain growth), we believe the shares are looking increasingly appealing on c 13x our FY19e earnings.

Written by

Katherine Thompson

Director

GFT

Q1 constant currency organic growth was 13%

Q1 results

Software & comp services

12 May 2017

Price

€19.80

Market cap

€521m

Net debt (€m) as at 31 March

61.2

Shares in issue

26.3m

Free float

64%

Code

GFT

Primary exchange

Frankfurt (Xetra)

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

7.8

0.3

(9.8)

Rel (local)

2.9

(7.9)

(29.2)

52-week high/low

€21.96

€16.39

Business description

GFT (legal name: GFT Technologies SE) is a global technology services business primarily focused on banks and insurance companies.

Next events

ESN European Champion (equinet), Frankfurt

19 May

AGM

31 May

German Champions 2017 (quirin), Frankfurt

1 June

Berenberg Pan-Euro Discovery Conference, Venice

22-23 June

Capital Markets Day, Stuttgart

29 June

Q2 results

10 August

Analysts

Richard Jeans

+44 (0)20 3077 5700

Katherine Thompson

+44 (0)20 3077 5730

GFT Technologies is a research client of Edison Investment Research Limited

GFT remains on target and thematic trends are broadly the same. Underlying Q1 revenue growth was solid at 13.3%, helped by 3% more days in the period, and management guidance was maintained. GFT’s retail banking activities remain buoyant, benefiting from digital banking projects in continental Europe and the group’s first retail banking project in the US, while the investment banking backdrop remains challenging, not helped by Brexit and the political changes in the US. With the sustained healthy outlook in digitalisation across the retail banking sector and the prospect of a recovery for the investment banking market (since these businesses need to invest in IT to sustain growth), we believe the shares are looking increasingly appealing on c 13x our FY19e earnings.

Year
end

Revenue (€m)

EBT*
(€m)

EPS*
(c)

Adjusted EPS** (c)

P/E
(x)

Yield
(%)

12/15

373.5

32.5

96.2

119.4

16.6

1.5

12/16

422.6

33.0

92.0

115.4

17.2

1.5

12/17e

455.0

35.1

92.2

116.9

16.9

1.7

12/18e

500.5

40.7

109.0

129.9

15.2

1.9

Note: *Earnings before tax and EPS are statutory, after the amortisation of acquired intangibles and exceptional items. **Adjusted EPS is before amortisation and exceptionals.

Q1 results: Total revenue growth was 14%

Q1 revenue grew by 14% to €111.1m, which includes 13.3% organic growth, a 2.2% currency headwind and €2.9m from Habber Tec Brazil, which was acquired in April 2016. Employee numbers grew 16% over the year to 4,833, but were down 1% over the quarter. EBITDA (GFT definition) slipped by 2% to €9.9m, but rose 10% after adding back €1m restructuring costs and a €250k earnout payment for Habber Tec. Net debt rose by €19.2m over the quarter to €61.2m, while outstanding acquisition liabilities and the pension deficit take the adjusted net debt to €102.1m. We note that most cash flow is generated in H2, as some of GFT’s largest customers utilise their budgets at the end of the financial year.

Guidance and forecasts – all maintained

Management has maintained its guidance, which includes FY17 revenue of €450m, EBITDA of €48.5m and EBT of €35m. The longer-term goal remains the same: to reach €800m of revenues along with a 12% EBITDA margin by 2020. This target includes c €180m revenues from acquisitions, which management is confident it can finance through internal cash generation. We have maintained all of our P&L forecasts.

Valuation: Attractive if it can improve margins

The stock trades on 1.13x our FY18e EV/sales and 10.3x EV/EBITDA, while its larger global IT services peers typically trade in the ranges of c 1.7-2.1x revenues and c 8.7-12.0x EBITDA. Our DCF model (which assumes a WACC of 9%, a 10-year revenue CAGR of 7.3% and 12% long-term EBITDA margins) values the shares at €23.18 (previously €22.84), c 17% above the current share price.

Q1 results: Constant currency organic growth was 13%

Q1 revenue grew by 14% to €111.1m, which includes 13.3% organic growth, a 2.2% currency headwind (mainly the British pound against the Polish zloty and the euro against the Brazilian real) and €2.9m from Habber Tec Brazil, which was acquired in April 2016. The growth was helped by 3% additional working days in Q1, while there will be 5% fewer days in Q2. Consequently, Q2 could be weaker than Q1. The Americas and UK segment produced organic growth of 6.1% (largely cancelled by a 4.6% currency headwind) while continental Europe grew by 21.6%, with the difference reflecting strong digital banking growth in continental European markets balanced by challenging investment banking in Anglo Saxon markets. However, the Americas and UK segment also includes a growing retail banking operating, which represents c 14% of the segment’s revenues, up from c 5%, reflecting the Habber Tec acquisition in Brazil and the group’s first major retail banking project in North America, which added €0.3m revenues in Q1. Revenue from investment banking customers fell by 2.5%, and the two largest customers, Deutsche Bank and Barclays, fell by a combined 9%. Continental Europe experienced strong growth at Deutsche Bank, Banco Sabadell and San Paolo, and most new projects are in digital banking.

Employee numbers grew 16% over the year to 4,833 (though were down 1% sequentially over the quarter), reflecting a 21% growth in the group’s near shore centres. Meanwhile, the number of freelancers fell by 6%. EBITDA (GFT definition) slipped by 2% to €9.9m, but rose 10% after adding back €1m restructuring costs (which related to restructuring of sales in the US and the UK due to changed market conditions) and a €250k earnout payment for Habber Tec. We have adjusted only for the €0.25m earnout payment (expected to total €1m for the year), and on that basis Edison adjusted EBITDA was flat at €10.2m. Net debt rose by €19.2m over the quarter to €61.2m, while outstanding acquisition liabilities of €32m and the €8.9m pension deficit take the adjusted net debt to €102.1m.

Exhibit 1: Quarterly analysis

€000s

2015

2016

2016

2016

2016

2016

2017

2017e

2017e

FY

Q1

Q2

Q3

Q4

FY

Q1

Q2-Q4

FY

GFT (continuing)

373,460

97,386

109,419

103,938

93,946

404,689

108,200

340,676

448,876

WG Systems (Habber Tec)

 

 

1,220

2,320

740

4,280

2,900

3,224

6,124

Total revenue

373,510

97,386

110,639

106,258

94,686

422,559

111,100

343,900

455,000

Cost of materials

(62,489)

(14,614)

(15,963)

(15,080)

(14,190)

(59,848)

(13,788)

(54,462)

(68,250)

Gross profit

311,021

82,772

94,676

91,178

80,495

362,711

97,312

289,438

386,750

Op costs before depreciation

(265,504)

(72,554)

(83,285)

(78,717)

(80,900)

(315,456)

(87,137)

(250,113)

(337,250)

Adjusted EBITDA

45,517

10,218

11,391

12,461

(404)

47,255

10,175

39,325

49,500

Depreciation

(5,154)

(1,356)

(1,405)

(1,538)

(1,953)

(6,252)

(1,569)

(4,346)

(5,915)

Adjusted operating profit

40,363

8,862

9,986

10,923

(2,358)

41,003

8,607

34,978

43,585

Operating Margin

10.8%

9.1%

9.0%

10.3%

(2.5%)

9.7%

7.7%

10.2%

9.6%

Net interest

(1,703)

(344)

(503)

(440)

(459)

(1,746)

(321)

(1,679)

(2,000)

Edison profit before tax (norm)

38,660

8,518

9,483

10,483

(2,817)

39,257

8,285

33,300

41,585

Associates

(30)

(15)

22

4

(66)

(54)

(5)

5

0

Amortisation of acquired intangibles*

(6,105)

(1,467)

(1,522)

(1,380)

(1,365)

(5,734)

(1,400)

(4,100)

(5,500)

Exceptionals

0

0

(421)

0

0

(421)

(250)

(750)

(1,000)

Profit before tax (FRS 3)

32,525

7,036

7,563

9,107

(4,248)

33,048

6,631

28,454

35,085

Source: GFT, Edison Investment Research

GFT receives a disproportionate level of cash in Q4, as some of its largest customers utilise their budgets at the end of the financial year. Q1 and Q2 typically have weaker cash flows. The remaining acquisition liabilities relate to Sempla (now GFT Italy), which are scheduled for payment in early 2018, and Habber Tec. The group limits its net debt to around 2x EBITDA, which calculates at €97m based on €48.5m EBITDA for FY17. With net debt at €61.2m, or €102.1m after outstanding acquisition liabilities and the pension deficit, this puts some limitation on acquisitions until debt levels are paid down.

Exhibit 2: Financial position

€m

31-Dec-15

31-Mar-16

30-Jun-16

30-Sep-16

31-Dec-16

31-Mar-17

Cash

(47.0)

(42.9)

(42.2)

(44.1)

(62.3)

(44.1)

Financial debt

83.4

91.9

112.6

104.4

104.3

105.4

Net (cash)/debt

36.5

49.0

70.3

60.3

42.1

61.2

Investments

0.0

0.0

0.0

0.0

0.0

0.0

Outstanding acquisition liabilities*

13.9

14.1

15.9

16.1

34.1

32.0

Pension deficit

8.3

8.7

8.8

8.9

8.7

8.9

Adjusted net (cash)/debt

58.7

71.8

95.0

85.3

84.9

102.1

Source: GFT accounts. Note: *Includes earnouts and deferred payments. Excludes €0.15m deferred payment for emagine.

Exhibit 3: Financial summary

€'000s

2014

2015

2016

2017e

2018e

2019e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

279,235

373,507

422,559

455,000

500,500

550,550

Cost of Materials

(52,194)

(62,486)

(59,848)

(68,250)

(75,075)

(82,583)

Gross Profit

227,042

311,021

362,711

386,750

425,425

467,968

EBITDA

 

32,834

44,586

46,765

48,500

54,456

63,613

Adjusted EBITDA

 

35,240

45,517

47,255

49,500

54,456

63,613

EBIT

 

26,433

34,258

34,848

37,085

42,449

50,681

Adjusted Operating Profit

 

31,875

40,363

41,003

43,585

47,949

56,181

Amortisation of acquired intangibles

(4,711)

(6,105)

(5,734)

(5,500)

(5,500)

(5,500)

Exceptionals

(731)

0

(421)

(1,000)

0

0

Associates

(12)

(30)

(54)

0

0

0

Operating Profit

26,421

34,228

34,794

37,085

42,449

50,681

Net Interest

(1,015)

(1,703)

(1,746)

(2,000)

(1,750)

(1,450)

Profit Before Tax (norm)

 

30,848

38,630

39,203

41,585

46,199

54,731

Earnings Before Tax

 

25,406

32,525

33,048

35,085

40,699

49,231

Tax

(6,819)

(5,979)

(8,819)

(10,812)

(12,012)

(14,230)

Net inc from discontinued ops

1,368

(1,209)

0

0

0

0

Profit After Tax (norm)

25,397

31,441

30,384

30,773

34,187

40,501

Profit After Tax (FRS 3)

19,955

25,336

24,229

24,273

28,687

35,001

Average Number of Shares Outstanding (m)

26.3

26.3

26.3

26.3

26.3

26.3

EPS - normalised (c)

 

96.5

119.4

115.4

116.9

129.9

153.8

EPS - normalised & fully diluted (c)

 

96.5

119.4

115.4

116.9

129.9

153.8

EPS - FRS 3 (c)

 

75.8

96.2

92.0

92.2

109.0

133.0

Dividend per share (c)

25.00

30.00

30.00

33.00

37.00

41.00

Gross Margin (%)

81.3

83.3

85.8

85.0

85.0

85.0

EBITDA Margin (%)

11.8

11.9

11.1

10.7

10.9

11.6

Adjusted Operating Margin (%)

11.4

10.8

9.7

9.6

9.6

10.2

BALANCE SHEET

Fixed Assets

 

148,732

173,451

175,538

174,133

172,136

169,114

Intangible Assets

125,852

139,480

136,920

131,420

125,920

120,420

Tangible Assets

17,780

26,488

30,908

35,003

38,506

40,984

Other

5,100

7,484

7,710

7,710

7,710

7,710

Current Assets

 

152,921

153,357

190,504

216,661

217,760

258,282

Stocks

0

0

28

30

33

36

Debtors

108,216

94,828

117,308

126,314

138,946

152,840

Cash

38,129

46,978

62,290

79,438

67,903

94,528

Current Liabilities

 

(140,614)

(90,628)

(114,723)

(121,643)

(132,037)

(143,471)

Creditors

(94,582)

(90,008)

(96,414)

(103,334)

(113,729)

(125,163)

Short term borrowings

(46,032)

(620)

(18,308)

(18,308)

(18,308)

(18,308)

Long Term Liabilities

 

(60,628)

(111,733)

(135,418)

(135,418)

(101,292)

(101,292)

Long term borrowings

(34,131)

(82,817)

(86,035)

(86,035)

(86,035)

(86,035)

Other long term liabilities

(26,497)

(28,916)

(49,383)

(49,383)

(15,257)

(15,257)

Net Assets

 

100,412

124,447

115,901

133,733

156,567

182,633

CASH FLOW

Operating Cash Flow

 

24,585

55,575

28,772

47,225

51,953

60,861

Net Interest

(997)

(1,447)

(1,613)

(2,000)

(1,750)

(1,450)

Tax

(8,152)

(11,424)

(7,164)

(9,980)

(11,088)

(13,135)

Capex

(9,680)

(14,456)

(10,160)

(10,010)

(10,010)

(9,910)

Acquisitions/disposals

(58,472)

(16,760)

(6,662)

(189)

(31,953)

0

Shares issued

(1,494)

(620)

1,578

0

0

0

Dividends

(6,584)

(6,584)

(7,898)

(7,898)

(8,688)

(9,741)

Net Cash Flow

(60,794)

4,284

(3,147)

17,148

(11,535)

26,625

Opening net debt/(cash)

 

(19,410)

42,034

36,449

42,053

24,905

36,440

Other

(650)

1,301

(2,457)

0

()

0

Closing net debt/(cash)

 

42,034

36,449

42,053

24,905

36,440

9,816

Source: GFT accounts, Edison Investment Research (forecasts)

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by GFT Technologies and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by GFT Technologies and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. 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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Research: Financials

Nürnberger Beteiligungs-AG — Discounted valuation, restructuring potential

Nürnberger Beteiligungs-AG (NBG) is now in its 134th year of operation and is one of Germany’s oldest and most recognised insurers, with gross premium income of €3.3bn. While its market share of the life sector is small (c 3%), in disability it ranks among the top providers, with a market share of 9.2% in 2016. Aided by a refocusing strategy, NBG reported profits of €58m in 2016 (2015: €47m). It is also a solid dividend payer, paying €3.00/share for the fourth consecutive year. Expected future restructuring measures suggest potential for further efficiency and market share gains.

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