Published: 21-08-2018 18:17

Stern Groep N.V., the Dutch listed automotive group, announces its results for the first half of 2018.  

Key points in H1-2018 

  • Net revenue amounted to € 587.2 million. Without the effect of IFRS 15, revenue was up 0.6% 
  • Operating profit (EBIT) came to € 7.8 million (H1-2017: € 8.2 million) 
  • Profit after tax was € 4.7 million (H1-2017: € 5.4 million) 
  • The lease portfolio showed further organic growth to reach 11,927 contracts at the end of June 2018 (an increase of 8.2% compared to year-end 2017 and 13.4% compared to the end of June 2017) 
  • The results of Dealergroup Stern were disappointing, especially in Q1-2018, due to margin pressure and high sickleave 
  • Dealergroup Stern achieved a market share for passenger cars of 5.4% (H1-2017: 5.9%). The market share for light commercial vehicles came to 7.3% (H1-2017: 7.5%) 
  • As a result of unusually high WLTP inventory, solvency stood at 23.5% at the end of June 2018 (year-end 2017: 25.5%) 
  • Net asset value per share rose to € 28.11 at the end of June 2018 (year-end 2017: € 28.08) 
  • Refinancing of property completed, contributing to € 9.0 million extra financing for growth of the lease portfolio 

Henk van der Kwast, Chief Executive Officer: 

“In line with the Fast Forward strategy, the Stern Mobility Solutions fleet continued to grow in the second quarter, meaning we are on track to achieve our target of 20,000 vehicles by the end of 2020. The financial figures for this year reflect the effects of the other Fast Forward projects only to a limited extent. All our efforts are devoted to further improving our services and reducing our operating expenses through the harmonisation and optimisation of our processes and systems. In addition to the good progress at Stern Mobility Solutions, progress is being made in the areas of the workshops, parts and SternPoint. There have been delays with respect to the central Customer Service Center and at digital IT. We are convinced that the financial performance of Stern Group will show a significant improvement after 2018.” 

Progress in H1-2018 

Net revenue declined by 1.1% compared to H1-2017 to € 587.2 million. Stern applies IFRS-15 with effect from 2018. As a result, sales of cars for which Dealergroup Stern has concluded a repurchase commitment may no longer be recognised as revenue. Instead, these cars remain on the balance sheet and the margin is gradually credited to the result over the agreed term. The effect on revenue (which is lower) and the inventory (which is higher) amounted to € 11.3 million in H1-2018. Without this effect, net revenue would have risen marginally by 0.6%.  

Due to a different composition of revenue (relatively higher after-sales), gross profit came to 17.1% of net revenue, compared to 16.4% in H1-2017. Despite lower revenue therefore, gross profit still showed a small increase. 

Employee expenses rose significantly, by 7.2%. The collective labour agreement increase of 0.75% with effect from July 2017 and a further 1.80% with effect from 1 February 2018 caused an increase of approximately 2.30% in employee expenses. Employee expenses also increased by approximately 2.50% due to the acquisition of six car body repair businesses in mid 2017.  

The remaining increase in employee expenses was mainly due to temporary hires of mechanics. Temporary hires of mechanics were needed due to very high absenteeism in Q1-2018, while demand for service remained constant. 

Other operating expenses rose slightly by 4.0%, mainly due to the acquisition of the six car body repair businesses in 2017. Operating profit (EBIT) was slightly lower in H1-2018 at € 7.8 million (H1-2017: € 8.2 million). 

Press here for the press release dated 21 August 2018 in English