- Break-even EBT before one-time charges in first half
- Cost reduction programme executed as planned at additional site
- Annual forecast confirmed
Freudenstadt, April 23, 2008. Based on provisional figures, schlott gruppe managed to develop in line with its forecasts during the second quarter and first half of the 2007/8 financial year.
The general conditions for business development within the industry as a whole remained largely unchanged over the course of the second quarter. Reflecting the seasonality of the printing sector, capacity utilisation remained at a low but stable level, while pricing pressures were as expected. Compared with the same quarter a year ago, as anticipated the erosion of prices witnessed over the course of the previous financial year had a corresponding effect on bottom-line results.
Against this backdrop, the Group achieved slightly positive EBT of €0.5 million before one-time charges in the first half of 2007/8, compared with EBT of €7.9 million in the same period a year ago. Value-added sales amounted to €122.1 million, after €130.0 million a year ago, while revenue receded to €239.1 million, down from the figure of €244.9 million posted for the first half of 2006/7. In addition, an amount of €6.3 million was recognised as provisions in the second quarter, earmarked for the cost reduction programme discussed in depth on previous occasions. Including these charges, the loss before taxes thus amounted to €5.8 million for the first half.
In the second quarter of the current financial year, value-added sales amounted to €56.9 million at Group level, down from €60.7 million in the same period a year ago. Revenue contracted from €122.5 million in Q2 2006/7 to €111.7 million in the second quarter of 2007/8. EBT before one-time charges fell to minus €2.7 million and to minus €9.0 million including one-time charges, compared with minus €0.6 million in the second quarter of the previous financial year.
The print unit generated value-added sales of €120.3 million in the first half of 2007/8, after €127.8 million posted for the same period a year ago. EBT before one-time charges amounted to €2.6 million. Including one-time charges, EBT stood at minus €3.7 million, compared with plus €9.8 million a year ago. In the second quarter of 2007/8, value-added sales totalled €56.0 million, compared with €59.7 million. For the same period, EBT before one-time charges stood at minus €1.5 million and minus €7.8 million including one-time charges, down from plus €0.6 million in Q2 2006/7.
The Group's results are dominated chiefly by business performance within the print division. Costs attributable to the corporate services unit, whose activities are limited to providing internal services for the Group, remained within the target range both in the first half and the second quarter.
schlott gruppe continued to channel resources into its cost reduction programme during the reporting period. Having already implemented appropriate measures at its Freudenstadt facility, the company focused on its site in Landau. The measures aimed at scaling back cost structures are expected to come into full effect from the beginning of the coming financial year. Negotiations with employee representatives are still underway with regard to the company's Nuremberg facility. Alongside the cost reduction programme directed at the gravure printing plants, all other operations at Group level are also subject to continuous streamlining.
Thus, schlott gruppe is well on the way to reining back annual expenses by an amount in the double-digit million range. The cost reduction programme initiated for this purpose has been scheduled for a period of three years. In implementing this action plan, schlott gruppe will partially offset – as early as the current financial year – the recent price reductions faced by the company as well as the projected contraction of prices. As announced, the total expense attributable to this programme will amount to approx. €15 million in the current financial year. schlott gruppe has reaffirmed its target of achieving break-even EBT in fiscal 2007/8, before the above mentioned one-time charges.
Notes to financial data:
Alongside "revenue/sales", schlott gruppe uses so-called "value-added sales" (VAS) as a financial indicator – both in its external communica-tions 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 2006/7 financial year, the so-called paper provision ratio stood at 72.5 per cent. As a financial indicator, "value-added sales" eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual sales performance.
