- Year-on-year EBT swing of + € 6.5 million and positive results in Q2
- Tonnage 12.2 % up on previous year
- Marked debt reduction of € 12.3 million in line with targets
- Introduction of key indicators to enhance financial reporting
Freudenstadt, 13 May 2004. schlott gruppe performed admirably in the second quarter (January to March) of the 2003/4 financial year, thus significantly improving on its track record in Q2 2002/3. Capacity utilization increased by 12.2% year on year, up from 112.5k to 126.2k metric tons (6M: +6.4%, up from 268.8k to 285.9k). Operating within an only slightly improved market environment, schlott gruppe achieved a good level of full-scale machine utilization.
The company’s results also gained momentum. In the second quarter, earnings before taxes (EBT) rose by €6.5 million to €0.3 million, following a pre-tax loss of €6.2 million in Q2 2002/03 (6M: €6.4m after €4.4m). As a result, schlott gruppe returned to a level of earnings that is in keeping with its usual performance in the second quarter.
The consolidated net loss was reduced from €3.6 million to €0.6 million in the second quarter, an improvement of €3.0 million (6M: consolidated net profit of €2.5m, +€1.7m from €0.8m). Owing to non-deductible goodwill amortization, income taxes were slightly in excess of EBT. Earnings per share for the second quarter stood at minus €0.09 (Q2 2002/03: -€0.67; 6M 2003/04: €0.41 compared with €0.13).
Free cash flow (after dividend) for Q2 was within the parameters set by the company. It increased by €3.8 million year on year, to €14.0 million (6M: €4.7m compared with -€8.0m). In particular, cash resources were used to initiate a sustained reduction in net bank liabilities in the second quarter. Overall, bank liabilities were reined back by €12.3 million.
The company recorded an increase in the volume of paper supplied by customers. Thus, the amount of paper purchased and subsequently invoiced by schlott gruppe was lower than in the previous year. In line with this trend, reported revenue declined from €142.1 million to €133.1 million in the second quarter (6M: down from €313.5m to €293.6m).
One of the prime objectives of schlott gruppe’s Management Board is to enhance the transparency of financial reporting. The rationale behind this move is to create a basis for targeted performance analyses among market participants. Thus, the company has introduced a new financial indicator in the form of “value added sales”. In this case, revenue is adjusted for transitory expense items such as paper, thus providing a more accurate summary of the company’s operational performance. In the second quarter, value added sales amounted to €79.1 million compared to €74.7 million in the previous year; value added sales generated in the first six months totaled €170.4 million compared to €166.0 in the same period a year ago.
The second quarter was within the financial targets established as part of annual forecasting. The company’s outlook for the third quarter is also considered to be very promising. schlott gruppe is expected to post again a substantial year-on-year increase in earnings. Based on this performance, management reaffirms its forecast of 50% EBT growth, taking this figure to some €20 million, and free cash flow of approx. €30 million.
