Business News
schlott gruppe confirms preliminary results for Q2 2009/10
Wednesday 05. May 2010 - Burdening market conditions; VAS and tonnage performance remains poor; Implementation of restructuring programme underway, cost streamlining takes strong effect; Negotiations on financing successfully concluded
schlott gruppe today confirmed its preliminary results for the second quarter (January to March) of the 2009/10 financial year, as published on 21 April 2010. The full financial report on the second quarter and the first six months of 2009/10 can be accessed from the company website.
As previously reported, conditions in the printing industry as a whole remained unsatisfactory during the second quarter. Irrespective of the seasonal downturn generally associated with the first calendar quarter, restrained demand and excess capacity within the area of web-fed printing put paid to any form of recovery. Both demand and price structures failed to improve during the period under review.
In the reporting quarter, schlott gruppe generated revenue of 77.7 million, down from 89.0 million in the same period a year ago; after the first six months of the 2009/10 financial year revenue stood at 164.7 million, compared with 195.7 million a year ago. Value-added sales (VAS) declined by 3.5 million, or 7.9 per cent, to 40.9 million in the reporting quarter, down from 44.4 million for the same quarter last year. The decline in EBIT before restructuring expense – primarily as a result of substantial reductions in staff costs and other operating expense – was restricted to 1.9 million. Excluding restructuring expense, it stood at -4.1 million; after charges of -4.3 million, EBIT was -8.4 million In the same period a year ago, EBIT had been -2.6 million before restructuring expense of -0.4 million. The loss before taxes was -11.1 million, compared to -4.1 million a year ago. The consolidated loss after taxes was -10.9 million, after -3.5 million for the same quarter a year ago.
In the first six months, VAS contracted by 13.3 per cent to 87.7 million, down from 101.2 million for the first half of 2008/9. EBIT stood at -3.1 million before restructuring expense of -6.9 million. Including this expense item, EBIT was -10.0 million, compared with 0.7 million in the first half of 2008/9 (this figure included restructuring expense of -0.6 million). EBT for the first six months of 2009/10 was -15.3 million, compared with -1.3 million in the same period last year. It should be noted, that, on top of higher restructuring expenses in the current year, finance cost for the same period last year included foreign currency gains that had a positive impact on the net result.
The consolidated loss after taxes for the first half of the current financial year amounted to -13.9 million, compared with -0.9 million for the same period last year. The loss per share eligible for dividends was -1.55 in the second quarter, compared with -0.58 a year ago, and -1.97 in the first half, compared with -0.15 last year.
The print segment generated VAS of 40.2 million in the second quarter, after 43.7 million a year ago; segment EBT before restructuring expense was -5.6 million, compared to -3.2 million a year ago; including this expense item, segment EBT stood at -6.8 million, after -3.5 million for the same period last year. For the first six months, VAS amounted to 86.7 million, down from 99.4 million a year ago. EBT before restructuring expense was -6.1 million, down from 1.0 million; including this expense item, EBT stood at -8.1 million, compared with 0.5 million a year ago.
Aggregate tonnage fell by 3.9 per cent to 114.5 thousand tonnes in the second quarter, down from 119.1 thousand tonnes in the same quarter a year ago. After a decline of 13.6 per cent in the first quarter, the first six months of 2009/10 saw tonnage fall by 9.3 per cent to 246.9 thousand tonnes, compared with 272.3 thousand tonnes in the same period a year ago. As announced, the second quarter saw the introduction of agreed capacity reductions of approx. 20 per cent. This allowed the company to increase its level of capacity utilisation despite the decline in tonnage during the reporting quarter.
Overall, the corporate services segment performed in line with expectations. Excluding restructuring expense, EBT for the quarter under review was -1.2 million, compared to -0.2 million; including this expense item, it totalled -4.4 million, down from -0.3 million. For the first six months, EBT before restructuring expense stood at
-2.2 million, compared with -0.8 million for the same period a year ago. Including this expense item, EBT was -7.1 million, down from
-0.9 million a year ago. A significant proportion of restructuring expense was recorded in this business segment during the current financial year, as these charges related to cross-segment functions.
After the first six months of the current financial year, schlott gruppe remains on target as regards execution of the measures planned by the company. Of the bottom-line effects identified for the 2009/10 financial year, around 84 per cent have already been achieved. As regards fiscal 2011/12, which is scheduled to be the final year of restructuring, around 60 per cent of these effects have been unlocked.
The outlook for the current 2009/10 financial year continues to be based on the underlying assumption that there will be no improvement in market conditions. Overall, therefore, the Management Board anticipates a further decline in VAS. The company’s earnings performance is expected to improve fundamentally, as underlined by the results posted in the quarter under review. However, as the company explained when it initially presented its measures, the full effect of this programme will not become apparent until the subsequent years. In view of the charges associated with the execution of the company’s restructuring programme, the Management Board anticipates another significant loss before taxes for the 2009/10 financial year, both before and after restructuring expenses.
Notes to financial data:
Alongside “revenue/sales”, schlott gruppe uses so-called “value-added sales” (VAS) as a financial indicator – both in its external communications and as part of its internal controlling mechanisms. Revenue is subject to fluctuations that are attributable to the volume of paper supplied by customers as raw material for certain projects. In contrast to paper purchased directly by the company, paper supplied by customers is not included in the accounts of schlott gruppe. In the 2008/9 financial year, the paper provision ratio stood at 75.2 per cent. As a financial indicator, “value-added sales” eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual sales performance.