our Management report

business report of the gft group

Slight decline in revenue development of 2.0 per cent - Total dividend payout in 2021 at previous year's level - Strong growth in membership

In the past financial year 2021, GFT achieved revenues of € 129.7m (previous year: € 132.4m). Compared to the previous year, revenue was thus not maintained. Up to the end of the third quarter, revenue growth was achieved in every quarter, with the first and third quarters of 2021 proving to be the strongest revenue quarters. The fourth quarter led to a decline in turnover of 11.3 per cent due to supply bottlenecks in the components sector:

Revenue development 2021

2021, the product areas "security technology" (+2.0 percent) and passive network technology (+5.1 percent) were able to increase. In all other product areas, due to the industry's non-existent readiness to deliver from the end of Q3 2021 and especially in Q4 2021, a significant decline in turnover was felt: 

Information technology | Telecommunications: -3.5 per cent, Media technology | Intercom systems: -9.9 percent and Services | Repairs | Other: -7.4 percent.

Category

2021

2020 

±

 T€

 T€

%

ITC | Telecommunications

85.436

88.528

−3,5

Life Safety + Security Technology

32.266

31.621

2,0

Media + Intercom systems

2.808

3.116

−9,9

Passive network technology

6.191

5.888

5,1

Services | Others

2.969

3.207

−7,4

Total

129.670

132.360

−2,0

Business segment development (as at 31.12.)

Revenue in the main business areas developed as follows:

GFT´s revenue focus (as at 31.12.)

IT + Telecommunications: -3.5 per cent

GFT membership sell ICT hardware and software for communication solutions that must meet the current demands of the modern and fast-moving market. Revenue in the Information Technology | Telecommunications division, the main revenue driver for most GFT members, fell to €k 85,436 in the year under review. At 66 per cent, this business division represents the largest share of revenue in total revenue.

Business segment ITC over a 10-year period (as at 31.12.)

Since manufacturers in this area are increasingly turning to the indirect distribution channel via system houses, we continue to expect a positive sales trend. In the ICT business segment, 36 per cent of orders are placed directly with the manufacturers; smaller ICT systems and accessories are purchased through the manufacturers' distribution partners. In the 10-year view, the billing turnover in the ICT segment increased by 40.7 per cent.

+40,7%

Growth in the ICT product segment in a 10-year comparison.

Security technology grows by 2.0 per cent

In the safety technology business segment, the sales increase, which has been continuous for years, continued in the past business year. Revenues rose by 2.0 percent to €k 32,266. The share of total GFT revenue increased to 25 per cent. This means that revenue in this business segment has increased by a total of 49.6 per cent over the last 10 years. In the past financial year, the main focus was on the product group fire alarm systems with a share of 67 per cent. In second and third place came nurse call systems with a 14 percent share of sales and burglar and hold-up alarm systems with 12 percent.

Other product groups in this business field are: Emergency call systems and transmission devices, video surveillance, door opener systems, escape route technology and multifunctional products.

Business segment Life Safety + Security technology over a 10-year period (as at 31.12.)

49,6%

growth in the ICT product segment in a 10-year comparison.

Passive network technology increases by +5.1 per cent

In the Passive Network Technology business unit, turnover increased by 5.1 per cent to €k 6,191 thousand (previous year: €k 5,888 thousand). The main turnover in this area is accounted for by connection technology and control cabinet systems as well as cables and lines. The Passive Network Technology product area contributes 5 percent to GFT's total revenue.
 

Media Technology | Intercom Systems: -9.9 per cent

Revenue in this division, which combines a wide variety of security and communication solutions, declined by 9.9 per cent to €k 2,808. At 2 per cent, the share of total GFT revenue is unchanged from the previous year. Revenue in the Intercom Systems product group continues to be the main focus in this division and fell by 1.5 per cent to €k 1,820. Revenue from time recording and access control systems amounts to €k 967 and shrinks by 22 per cent compared to the previous year.
 

Services | Repairs | Other: -7.4 percent

Turnover in the product group Services, Repairs and Other amounted to €k 2,969 (previous year: €k 3,207). The fluctuations compared to the previous year result primarily from the individual contract situation for the airtime commissions of GFT members, the amount of which is subject to fluctuations customary in the industry from year to year.

The basis of the GFT business model is partnership-based relationships with members and suppliers.

Business relationships with manufacturers and distributors have developed over decades - our member companies and GFT have grown together with them. In the financial year 2021, we have also succeeded in stabilising organic growth for the coming years by listing new renowned suppliers, such as i-Alarmsysteme Deutschland GmbH, Hi-Systems Sicherheitstechnik GmbH and the two distributors Mehrens Unified Communication GmbH and ITAS AG.

The goal is to continue to increase GFT's billing volume and the subscription rate of our members through new listings. In particular, the synergy effects from the international markets open up access to new suppliers and/or adjacent new product segments for our members.

+5,1%

the passive network technology division achieved by far the largest growth in 2021.

Earnings situation

Gross profit increased by 6.2% to €k 2,703 compared to the previous year. Personnel expenses increased by 4.5 per cent to €k 1,935 compared to the same period of the previous year and show a value of 1.6 per cent in relation to sales revenues (previous year: 1.5 per cent). Depreciation and amortisation increased by €k 40.4 to €k 129.5 (previous year: €k 89.1). This is due in particular to increased investment activity in the areas of IT, buildings and operating and office equipment. Other operating expenses rose by €k 290.3 due to the expansion of business activities. The interest and investment result increased by €k 24.3 to €k 170.9 (previous year: €k 146.6).

4,9m €

Net profit before bonuses and reimbursement 2021.

Development of GFT earnings

2021

2020

Changes

in €K

Percentage

in €K

Percentage

in €K

Percentage

Revenues

124.795,7

100,0%

127.482,0

100,0%

-2.686,3

-2,1%

Costs of materials

122.092,4

97,8%

124.937,8

98,0%

-2.845,4

-2,3%

Gross profit

2.703,3

2,2%

2.544,2

2,0%

159,1

6,3%

Other operating income

315,9

0,3%

77,8

0,1%

238,1

306,0%

Operating income

3.019,2

2,4%

2.622,0

2,1%

397,2

15,1%

Staff costs

1.935,3

1,6%

1.852,6

1,5%

82,7

4,5%

Depriciations

129,5

0,1%

89,1

0,1%

40,4

45,3%

Other expenses

1.020,9

0,8%

730,6

0,6%

290,3

39,7%

Operating expenses

3.085,7

2,5%

2.672,3

2,1%

413,4

15,5%

Net interest and investment income

170,9

0,1%

146,6

0,1%

24,3

16,6%

Tax on profit and other taxes

43,6

0,0%

35,0

0,0%

8,6

24,6%

Profit for the financial year

60,8

0,0%

61,3

0,0%

-0,5

-0,8%

Bonuses & reimbursement

4.873,9

3,9%

4.879,4

3,8%

-5,5

-0,1%

Profit for the financial year (before bonuses & reimbursement)

4.934,7

4,0%

4.940,7

3,9%

-6,0

-0,1%

The net income for the year before bonuses and reimbursement tends to be almost at the previous year's level with 4.0 % or €k 4,934 (previous year: €k 4,941). The net profit for the year after taxes and distribution is also at the previous year's level at €k 60,8 (previous year: €k 61,3).

Development of revenues over a 10-year period (as at 31.12.)

27,1%

Growth in centrally invoiced revenue in 10-year comparison.

Total distribution of GFT increases to 3.77 percent

With a total distribution of €k 4,874, a distribution at the previous year's level was achieved despite a decline in revenue of 2.0 percent. The total payout in relation to turnover before sales deductions rose to 3.77 percent (previous year: 3.69 percent). The focus of the total distribution is the suppliers' merchandise bonus with a share of 65 per cent, followed by the cooperative merchandise reimbursement with 30 per cent and the DFÜ bonus of 5 per cent.

Investments and asset situation

In the past financial year, €k 413,4 was invested. Of the total investment, €k 184,5 was invested in "software", €k 120,6 in "land and buildings" and €k 108,3 in "other equipment, operating and office equipment".

The investments made are financed by own funds.

23,6 %

increase in the total distribution of GFT in a 5-year comparison.

Asset- and capital structure of the GFT

ASSETS

2021

2020

Changes

 €K

Perc.

 €K

Perc.

 €K

Perc.

Fixed assets

 903,9 

 5,2 

 620,0 

 4,7 

 283,9 

 45,8 

Stocks

 3.256,7 

 18,6 

 0,0 

 0,0 

 3.256,7 

 0,0 

Trade debtors

 11.798,4 

 67,5 

 8.318,3 

 63,7 

 3.480,1 

 41,8 

Liquid funds

 26,4 

 0,2 

 2.545,5 

 19,5 

−2.519,1 

 100,0 

Other assets

 1.484,4 

 8,5 

 1.578,6 

 12,1 

−94,2 

−6,0 

Current assets

 16.565,9 

 94,8 

 12.442,4 

 95,3 

 4.123,5 

 33,1 

Total assets

 17.469,8 

 100,0 

 13.062,4 

 100,0 

 4.407,4 

 33,7 



LIABILITIES

2021

2020

Changes

 

 €K

Perc.

 

 €K

Perc.

 

 €K

Perc.

Credit balance

1.454,1

8,3

 

1.382,7

10,6

 

71,4

5,2

Revenue reserves, retained earnings and other equity components

1.698,9

9,7

 

1.627,2

12,5

 

71,7

4,4

Shareholders’ equity

3.153,0

18,0

 

3.009,9

23,0

 

143,1

4,8

Provisions

332,5

1,9

 

1.134,9

8,7

 

−802,4

−70,7

Short-term bank debt

2.798,1

15,5

 

0,1

0,0

 

2.710,5

100,0

Long-term bank debt

233,3

1,8

 

0,0

0,0

 

320,8

100,0

Trade creditors

7.627,0

43,7

 

4.584,4

35,1

 

3.042,6

66,4

Other creditors

3.325,9

19,0

 

4.333,1

33,2

 

−1.007,2

−23,2

External funds

14.316,8

82,0

 

10.052,5

77,0

 

4.264,3

42,4

Total assets

17.469,8

100,0

 

13.062,4

100,0

 

4.407,4

33,7

Fixed assets amounting to €k 903,9 are fully covered by own funds. An equity share of €k 2,249.1 is also available to finance parts of the current assets.

The manufacturer licences acquired in the 2021 financial year with a total value of € 7.5 million were recognised at €k 3,256.7 as at the end of December 2021. Due to the balance sheet date and the increased use of project financing by our members, trade receivables increased by €k 3,480.1 to €k 11,798.4 compared to the previous year. At 67.5 per cent of the balance sheet total, they represent the largest single asset item. The balance sheet total grew by €k 4,407.4 to €k 17,469.8.

Equity increased in absolute terms by €k 143.1 to €k 3,153.0. Reserves including retained earnings amount to 53.9 per cent of equity.
 

Financial position

Cash and cash equivalents decreased by €k 2,519.1 to €k 26.4 compared to the previous year. The reduction is due in particular to the financing of the increased receivables at the end of the year as well as the build-up of inventories.

As of 31 December 2021, GFT had sufficient financial resources as well as free credit lines to meet its payment obligations on time at all times.

Trade payables increased to €k 7,627 due to invoicing and reporting date factors and were always settled with suppliers in the most economically favourable manner.

The other liabilities of €k 3,325.9 include the residual distribution to the member companies of €k 2,950.5. It consists of the cooperative refund, the DFÜ bonus for the second half of 2021, the remaining target achievement bonuses of the GFT suppliers and the dividend for the voluntary business shares of the GFT member companies.

3,2m €

Equity capital increases in absolute terms.

Membership development

In 2021, 14 new members joined the GFT. This is the highest growth in new members in the company's history. This means that GFT has welcomed a total of 26 new companies to the GFT group over the past five years. Of these, 12 companies focus on telecommunications and 14 on security technology.

Annual membership growth (as at 31.12.)

Highest increase in new members in the history of the GFT.

As of 31st December 2021, GFT has 186 members. This corresponds to an adjusted increase of 12 members compared to the previous year. Three member companies will leave the GFT as of 31st December 2021. The GFT continues to strive to gain companies in Germany and abroad as members, as every installer company and/or ICT system house that joins the GFT strengthens the market position of the group of companies.

Structure of membership

Members

Shares

Total of all shares

 

Number of members

Perc.

Number of shares

Perc.

Perc.

1 – 2 Shares

138

74,2

167

35,9

522.021

35,9

3 – 5 Shares

33

17,7

120

25,8

380.300

26,2

6 – 10 Shares

9

4,8

67

14,4

207.700

14,3

over 10 shares

6

3,2

111

23,9

344.100

23,7

 

186

100,0

465

100,0

1.454.121

100,0

Each member is not only a client, but also an owner of GFT. Depending on the turnover generated with GFT, the members subscribe to business shares of € 3,100.00 each: 109 members hold one share, 29 members hold two shares and 48 members hold more than two shares in GFT. With a share of 46 percent, the business assets represent a considerable part of the equity capital.
 

Overall statement of the Executive Board on the business development and situation of GFT eG

Thanks to stable growth at home and abroad, we see ourselves well positioned for the future. In addition, our members are growing into new business fields related to advanced building technology alongside their traditional business fields. We see interesting opportunities for GFT to successfully support our members on this growth path by expanding into new product segments and suppliers. The cloud PBX billing platform Asteria, which is currently being developed, marks a milestone in the telecommunications industry and will lead to further member retention and growth. Currently, there is no comparable service in our industry that is designed to be as open to manufacturers as Asteria.

The turnover level of the previous year was missed with a minus of 2.0 percent. The reason for this was a weak fourth quarter of 2021 due to supply bottlenecks after three strong quarters. However, we do not see this as problematic, as orders were ultimately only postponed into the new year and there will be catch-up effects here - after full delivery capability is restored on the international procurement markets. Nevertheless, the strength of the GFT group of companies is characterised by a payout ratio almost at the previous year's level. In relative terms, the total payout ratio of almost € 5m has risen to 3.77 percent of revenue.