VARTA AG publishes 2020 annual report with record results

At the end of March 2021, VARTA AG released the Group's final annual report for the 2020 fiscal year. The Group's revenue achieved a high growth rate of about 140% to about 870 million euros. The organic growth rate (excluding the first integration of VARTA's consumer division) was about 47%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased by about 150 million euros to about 241 million euros, an increase of 147%.

In fiscal 2020, VARTA's Microbatteries & Solutions division performed strongly, with revenue increasing by 49% to approximately 508 million euros, and adjusted EBITDA increasing by 96% to approximately 187 million euros. The adjusted EBITDA margin increased significantly by approximately 8.8%, and now accounts for 36.9% of revenue. The rapid development of the market and the continued increase in customer demand have driven VARTA's rechargeable lithium battery revenue growth to a new high. This type of lithium battery is mainly used in high-tech consumer products, especially high-end TWS headphones. As an industry leader in technological innovation, VARTA's growth rate far exceeds the overall market level, and the company has also established a very successful business model.

In addition, VARTA further strengthened its market position in the field of rechargeable hearing aids. Thanks to new customer projects launched in the previous year, the business of intelligent modular energy solutions (power pack solutions) continued to grow at a high rate.

The Home Battery segment, which includes the Consumer Battery and Energy Storage Solutions businesses, saw revenue increase to €361 million in fiscal 2020. Profitability improved this fiscal year through a stronger focus on business brands, while the Energy Storage Solutions business also achieved strong growth, outperforming the market.

VARTA is optimistic about the prospects for fiscal year 2021, expecting revenue and profit to grow again, and the adjusted EBITDA margin to increase to around 30%. The market demand for VARTA's rechargeable lithium batteries remains strong, and these batteries are mainly used in high-tech consumer products represented by TWS headphones. The button battery field shows a trend of getting smaller and smaller in size and stronger in performance, which benefits VARTA, as a leader in technological innovation.

At the end of this year, VARTA will start small-scale trial production of new cylindrical lithium batteries in 21700 specifications. The battery is characterized by extremely low internal resistance, which allows very fast charging and discharging. Therefore, the battery is very suitable for applications that require high energy output, including powering high-power and high-torque power tools (such as drills, grinders and other equipment). In addition, the battery is also quite advantageous in new drive concepts in the automotive field.

Herbert Schein, CEO of VARTA AG, said: "We are proud that the VARTA Group achieved its best performance in the 135-year history of the company in fiscal 2020. In 2020, we achieved a growth rate of 140%, while the organic revenue growth rate was close to 50% and the organic EBITDA growth rate was just under 100%. All business segments once again exceeded the performance of the previous year. This year, we will continue this development trend. Our new cylindrical lithium battery will go into trial production at the end of the year, which means that we are looking to open up new business areas. Following the great success of CoinPower, VARTA has taken another major step forward with cylindrical high-performance lithium batteries."

Armin Hessenberger, CFO of VARTA AG, added: “VARTA currently has an equity ratio of 44 percent and, following the start of a major investment program, will be virtually debt-free from 2021 (net debt to EBITDA ratio of 0.06 percent at the end of fiscal year 2020). The VARTA Group is therefore well positioned for future business expansion.”

Taking into account the exceptional circumstances of the 2020 fiscal year, the Group’s Board of Directors has decided to pay shareholders a dividend totaling approximately EUR 100 million (EUR 2.48 per share), pending approval by the Annual General Meeting of Shareholders in June.