Business News
schlott gruppe confirms preliminary results for third quarter of 2009/10
Wednesday 04. August 2010 - Market conditions remain challenging, Cost base benefits from ongoing restructuring programme, Performance at low end of expectations due to unfavourable market development
schlott gruppe today confirmed its preliminary results for the third quarter (April to June) of the 2009/10 financial year, as published on 21 July 2010. The full financial report on the third quarter and the first nine months of 2009/10 can be accessed from the company website at www.schlottgruppe.de.
Despite a visible upturn in the general economy, the overall trend within the printing industry has not yet shown any signs of improvement in the third quarter. The sector as a whole continues to be dominated by sluggish demand and downward pressure exerted on prices.
In the reporting quarter, schlott gruppe generated revenue of 66.7 million, down from 83.0 million in the same period a year ago; after the first nine months of the 2009/10 financial year revenue stood at 231.5 million, compared with 278.6 million a year ago.
Value-added sales (VAS) for the third quarter receded by 16.8 per cent to 37.2 million, after 44.7 million in the same period a year ago. The year-on-year decline in revenue and VAS is to be seen against the backdrop of a reduction by 20 per cent in gravure printing capacities during the second quarter; additionally, this took full effect during the quarter under review. Furthermore, the fall in VAS was attributable to price-related factors and sluggish demand in the quarter under review.
The company succeeded in significantly reducing major expense items as part of the restructuring programme currently being implemented at Group level. Staff costs, for instance, were reined back by 18.6 per cent and other operating expense by 15.4 per cent. Recording a slight fall in depreciation/amortisation and write-downs, the Group was able to limit the decline in EBIT before restructuring expense to -3.4 million, compared to -2.5 million a year ago. After restructuring expense of 6.0 million, EBIT amounted to -9.4 million, compared to -3.9 million in the third quarter of the previous financial year (including restructuring expense of then 1.5 million). Net finance costs in the quarter under review were down slightly to -3.7 million from -3.9 million a year ago. Thus, the loss before taxes was -13.1 million, compared to -7.8 million a year ago. The consolidated loss after taxes was -13.1 million, after -5.5 million for the same quarter a year ago.
In the first nine months, VAS contracted by 13.9 per cent to 124.9 million, down from a comparable 145.0 million for the first nine months of 2008/9. EBIT before restructuring expense of 12.8 million stood at -6.5 million; including this expense item, it was -19.3 million, compared to -3.3 million in the same period a year ago (this had included 2.0 million in restructuring expenses). Net finance costs rose significantly year on year from -5.9 million to -9.0 million in the first nine months. EBT for the first nine months of 2009/10 thus amounted to -28.3 million, after -9.2 million a year before.
The consolidated loss after taxes was -26.9 million for the first nine months, compared with -6.4 million for the same period a year ago. The loss per share eligible for dividends was -1.86 in the third quarter, compared with -0.90 a year ago, and -3.83 in the first nine months, compared with -1.05 last year.
The print segment generated VAS of 36.8 million in the third quarter, after 44.2 million a year ago; segment EBT before restructuring expense was -5.4 million, compared to -5.2 million a year ago; including this expense item, segment EBT stood at -8.7 million, after -5.3 million for the same period last year. For the first nine months, VAS amounted to 123.6 million, down from 143.6 million a year ago. EBT before restructuring expense was -11.5 million, down from -4.2 million; including this expense item, EBT stood at -16.8 million, compared with -4.8 million a year ago.
Largely induced by the executed capacity reduction aggregate tonnage fell by 14.5 per cent to 105.0 thousand tonnes in the third quarter, down from 122.8 thousand tonnes in the same quarter a year ago. In the first nine months of 2009/10 tonnage fell by 10.9 per cent year on year to 352.0 thousand tonnes, down from 395.0 thousand tonnes in the previous year.
Overall, the corporate services segment performed in line with expectations. Excluding restructuring expense, EBT for the quarter under review was -1.7 million, compared to -1.2 million; including this expense item, it totalled -4.3 million, down from -2.6 million. For the first nine months, EBT before restructuring expense stood at
-3.9 million, compared with -2.0 million for the same period a year ago. Including this expense item, EBT was -11.4 million, down from
-3.5 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.
The execution of schlott gruppe’s restructuring measures remains on track. Of the bottom-line effects identified for the 2009/10 financial year, approx. 95 per cent were achieved in the first nine months. As regards fiscal 2011/12, which is scheduled to be the final year of restructuring, around two-third of these effects have already been unlocked.
The Group’s performance over the course of the financial year to date is thus at the lower end of the Management Board’s expectations. The outlook for the final quarter of the current 2009/10 financial year continues to be based on the assumption that market conditions will remain far from satisfactory. Against this backdrop, the Management Board anticipates a further reduction in VAS despite a good capacity utilisation in web-fed printing and finishing. The company’s earnings performance is expected to improve fundamentally, as underlined by the results posted for the first nine months. 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.
By the forceful execution of the remaining restructuring measures, which in total will lead to a cost relieve of approx. 38 million annually, the earnings performance of schlott gruppe is set to improve sustainably in future.