Business News
schlott gruppe ends Q1 2008/9 slightly above expectations
Thursday 29. January 2009 - VAS of 56.9 million in first quarter compared with 61.5 million (adjusted) a year ago in line with planning; EBIT of 3.4 million after 5.0 million a year ago; EBT (2.9 million compared to 3.2 million) additionally buoyed by exchange differences; Forecast for 2008/9 reaffirmed
As part of its financial results press conference and analysts’ meeting, schlott gruppe will today present its annual report for the 2007/8 financial year and comment in detail on the company’s performance. The provisional results for the financial year ended September 30, 2008, were published on November 5, 2008, and, as reported, were confirmed on January 14, 2009 at the Supervisory Board meeting that had been convened for the purpose of adopting the financial statements.
Additionally, schlott gruppe will today present its provisional results for the first quarter (October to December) of the 2008/9 financial year. The start to the new financial year is considered satisfying on the whole, with schlott gruppe managing to post results that were slightly above target.
Against the backdrop of a severe economic downturn in Europe since mid-2008, value-added sales (VAS) contracted as anticipated by 7.5 per cent from – adjusted for the sale of the subsidiary sachsendruck – 61.5 million a year ago to 56.9 million in the reporting period. At -5.8 per cent, the overall comparable volume processed by the company receded at a similar rate from 162.7 thousand tonnes to 153.2 thousand tonnes.
Group revenue for the first quarter of the current financial year stood at 106.6 million, compared with 119.9 million a year ago – adjusted for sachsendruck. The more pronounced year-on-year decline in revenue when compared with VAS was attributable to an exceptional rise in the paper provision ratio, up from 71.1 per cent a year ago to 76.4 per cent in the reporting period (cf. “Notes to financial data” below).
The effects on earnings of the year-on-year decline of VAS could be slightly better offset than planned by the cost-cutting measures implemented during the previous financial year. Thus the EBIT in the reporting period of 3.4 million compared to 5.0 million in the same period a year ago was above target.
The financial result of the first quarter was influenced by unusual high positive exchange differences resulting from hedging operating business in British Pounds. These differences might not be sustainable depending on the further development of the Pound compared to the Euro. As a result, EBT contracted at a less pronounced rate year on year, down from 3.2 million to 2.9 million. EBT of the first quarter was above expectations even excluding this effect, however.
The print unit generated value-added sales of 55.8 million in the first quarter of 2008/9, after 60.5 million (adjusted) in the same period a year ago. EBIT amounted to 2.8 million, compared to 5.1 million, while EBT reached 4.0 million, down from 4.1 million in the first quarter of 2007/8. The performance of corporate services, a unit that is responsible solely for providing services within the Group, was in line with expectations.
The overall business performance of schlott gruppe in the first quarter of the current financial year is considered satisfactory. The outlook for the financial year as a whole remains unchanged at 215 million in VAS, compared to 225 million (adjusted) last year, and EBT comparable to last year’s break-even result.
In view of the severe recession forecast for Europe by economic analysts, this outlook is subject to risk. schlott gruppe has based its forecasts on the assumption of a weak economic development in relevant sales markets. Should the economic development turn out to be even worse than expected, this will not remain without effects on revenue and earnings of schlott gruppe.
In particular, it should be taken into account that the most significant downturn in the economy is expected to take place at the beginning of the calendar year 2009, which coincides with what is generally considered the company’s weakest period of the season – the second quarter from January to March.
Irrespective of this, the cost-reduction programme initiated in 2007/8 as well as the range of supplementary measures will produce positive effects as the 2008/9 financial year progresses. Furthermore, negotiations have now also commenced with employee representatives at the company’s Hamburg site to adjust the cost structure of this gravure site to the changed earnings prospects, too. Furthermore, strict cost management in the Group as a whole remains clearly in the focus. With these measures schlott gruppe intends to use the opportunities which arise in the current crisis and intends to expand its competitive position in a difficult environment.