- Targets for financial year 2007/08 clearly achieved
- Cost reduction programme brings major savings
- Dividend proposal: €0.50 per share
- No improvement expected in market in FY 2008/09: slight decline in VAS; earnings affected by general economic climate, cost of energy and raw materials; results helped by cost reduction programme, EBT expected to reach break-even
Freudenstadt, November 5, 2008. schlott gruppe today publishes its provisional figures for the financial year 2007/08 and confirms its previously announced expectations.
Value-added sales (VAS) stood at €239.1 million compared to €251.7 million in the preceding year. Revenue reached €468.6 million after €482.2 million. The cost reduction programme was implemented as planned in 2007/08 and has already helped to cut staff costs by a significant margin. In total, before deducting the non recurring expense associated with the cost reduction programme, EBT stood at €0.5 million compared to €11.0 million in the previous year. The non recurring expense is expected to be €13.0 million. In addition, the loss produced by the sale of the group’s sachsendruck subsidiary, which is anticipated in the near-term, will be accounted for in the old financial year.
The print division achieved VAS of €236.0 million (€247.8 million) in FY 2007/08, with tonnage practically unchanged. EBT before non recurring expenses stood at €3.8 million after €12.9 million in the preceding year. The non recurring expense in the print division is made up of €12.5 million resulting from comprehensive staff reductions related to the cost reduction programme.
The group’s results as a whole are predominantly determined by the performance of the print division. The costs at the corporate services division, which solely provides inhouse services for the group, were within the planned range, including the attributable part of the cost reduction programme of €0.5 million.
The main factor affecting business in the sector was again seasonal excess capacity. Thus, the trend was for capacity in the print industry as a whole to be under-utilised; on the other hand, quantities at schlott gruppe remained stable. Pressure on prices continued in addition to the price discounts that had to be accepted during the course of the last financial year. Overall, the situation of the industry weakened further over the year.
Given the greater uncertainty on the capital marktes in the light of the banking crisis, the Management Board and the Supervisory Board have already discussed their dividend proposal to the Annual General Meeting for the financial year 2007/08. The Management Board and the Supervisory Board will propose a dividend of €0.50 per share after €1.00 in the previous year. Boath are thus continuing a long-established dividend policy based on stability and earnings performance.
Looking ahead to the current financial year 2008/09, schlott gruppe does not anticipate an improvement in the market situation in the print industry. Consequently, it expects little change in tonnage and a slight fall in VAS.
The planned figures for 2008/09 already take into account the sale of the group’s subsidiary sachsendruck, which is on the point of completion. Following the sale, schlott gruppe will focus even more closely on the production of catalogues, magazines and inserts for publishers and the advertising industry, using gravure and web offset techniques and providing a comprehensive range of further processing services.
With the loss of VAS from sachsendruck of around €14 million, schlott gruppe anticipates VAS of over €215 million for the current financial year.
The savings made as a result of the cost reduction programme, which was implemented in the reporting year and included in the income statement for FY 2007/08, will take full effect during the course of FY 2008/09 and bring about a substantial improvement especially in terms of staff costs. However, on the expenditure side, energy and raw materials costs are higher.
Overall, the further reduction in personnel costs, lower other operating costs, scheduled lower levels of depreciation and an improvement in the financial result due to the consequent further reduction of net debt will lead to an appreciable cut in the total expense ratio. Accordingly, the company anticipates a modest but positive figure for EBT despite the renewed fall in VAS.
Ongoing cost reduction measures remain on the agenda across the entire group in addition to the cost reduction programme of the reporting year.
Further information about the year under review and the group’s forecasts for 2008/09 will be available at the analysts’ conference to be held by schlott gruppe as part of the German Equity Forum on 11 November 2008 in Frankfurt.
Notes to financial data:
Alongside “revenue/sales”, schlott gruppe uses so-called “value-added sales” as a financial indicator – both in its external communications and as part of its internal controlling mechanisms. Revenue is subject to fluctuations that are beyond the company’s sphere of influence. These fluctuations 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 2007/8 financial year, the socalled paper provision ratio was 72.0 per cent. As a financial indicator, “value-added sales” eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual business performance.
