- VAS and EBT in line with expectations
- Cost-reduction programme: staff costs show first signs of improvement
- Annual forecast confirmed: break-even EBT before charges for cost-reduction programme; approx. €15 million one-time charges
Freudenstadt, July 23, 2008. Based on provisional figures, schlott gruppe performed in line with its targets during the third quarter and first nine months of the 2007/8 financial year.
Against the backdrop of a lacklustre economy, the general business climate within the printing industry showed signs of further deterioration in the third quarter. Prompted by weak demand, capacity utilisation remained low, while the pressure exerted on prices continued.
As was the case in the second quarter, schlott gruppe's results continued to be impacted by the price erosion experienced over the course of the last financial year. In the first nine months of 2007/8, the Group generated EBT before non-recurring charges of minus €3.0 million, compared with plus €4.3 million in the same period a year ago.
Value-added sales stood at €175.8 million, after €186.4 million a year ago, while revenue amounted to €348.3 million, compared to €350.1 million. As budgeted, the one-time expenses incurred in connection with the cost-reduction programme currently in place amounted to €3.5 million in the third quarter and €9.8 million in the first nine months. Including this expense item, the loss before taxes was €12.8 million in the first nine months.
In the third quarter, value-added sales amounted to €53.7 million at Group level, down from €56.4 million in the same period a year ago. Revenue increased to €109.2 million, compared with €105.2 million a year ago. The loss before taxes and one-time charges was €3.5 million; including this expense item, the loss before taxes amounted to €7.0 million. The loss before taxes posted a year ago stood at €3.6 million.
The print segment generated added-value sales of €173.8 million in the first nine months of 2007/8, with tonnage remaining largely unchanged year on year, compared with value-added sales of €183.2 million in the first nine months of the previous financial year. Excluding one-time charges, the loss before taxes was €1.1 million. The loss before taxes and after one-time charges was €10.4 million, compared with €7.1 million a year ago. In the third quarter of 2007/8 value-added sales amounted to €53.5 million, compared to €55.3 million, while the loss before taxes and one-time charges totalled €3.7 million; including the one-time charges, the loss before taxes was €6.8 million, compared to a loss of €2.7 million for the same period a year ago.
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 nine months and the third quarter.
Over the course of the reporting period schlott gruppe continued to push ahead with its cost-reduction programme. Having implemented the cost-reduction measures envisaged for the sites in Freudenstadt and Landau as early as the first half of the current financial year, the company now also succeeded in concluding its negotiations for the Nuremberg facility. Here, the programme is mainly focused on the streamlining of all processes, a reduction of about 100 staff and a cost reduction of approx. €5 million per annum.
As outlined on previous occasions, the total measures are expected to take full effect over the course of the coming financial year. Having said this, the first positive effects have already been seen within the area of staff costs. Beyond the cost-reduction programme implemented at the gravure printing sites, measures aimed at streamlining cost structures remain on the agenda for all other areas within the Group. schlott gruppe has reaffirmed its target of achieving break-even EBT in fiscal 2007/8 before one-time charges amounting to approx. €15 million.
schlott gruppe's report for the second quarter of FY 2007/8 is to be published on August 6, 2008.
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 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.
