- Preliminary EBT of €25.9 million above target
- Debt reduction by €18 million outpaces schedule
- EBT forecast 2005/6 upped: threshold of
€26 million to be exceeded
Freudenstadt, 9 November 2005. Following today’s meeting convened by the Supervisory Board of schlott gruppe AG, the company has announced its preliminary results for the 2004/5 financial year ended September 30. Forecasts for the year have been met in full.
Consolidated earnings before taxes (EBT) amounted to €25.9 million, thus edging slightly beyond the original target. Value-added sales receded to €335.2 million, after €340.9 million in the previous year, due to the initially sluggish performance of the company’s direct marketing unit, which has now regained its footing. At €565.0 million, the year-on-year decline in revenue – down from €581.0 million in FY 2003/4 - was more pronounced than in the case of value-added sales due to the fact that revenue was impacted additionally by a change in the paper-provision ratio within the print unit, which, however, had no effect on net profit.Measures aimed at strengthening schlott gruppe’s balance sheet took effect faster than originally anticipated. Net debt was scaled back from €195.6 million a year ago to €177 million in FY 2004/5. As a result, the net debt/EBITDA ratio, which is of particular significance to the company, fell below the 2.5 mark. Since the last acquisition, debt was thus reined back by 0.8 points, or €42 million, within a period of just two years. Thus, schlott gruppe has in a very short period returned to those levels of the company’s long-term balance sheet planning which allow for further acquisitive growth.
The print unit was able to emulate its solid performance of the previous year. As forecasted, direct marketing achieved the turnaround in the fourth quarter. In the first quarters, and in the financial year as a whole, results had been below-par within this area. Over the course of the financial year, schlott gruppe reported promptly on measures implemented with the aim of guiding the unit again beyond the break-even threshold.
In view of the year-on-year increase in results, schlott gruppe has reassessed its forecast for the current 2005/6 financial year, which had originally outlined a rise in EBT to €26 million or slightly above. The company has now set a target of beyond €26 million.
schlott gruppe has made tangible progress in an extremely challenging market environment. In the current financial year challenges with regard to the company’s service capability are likely to be again higher. With this in mind, the company has chosen a conservative forecasting base, without factoring in market-driven stimuli. The run-up costs associated with machine investments at the Freudenstadt location are based on prudent calculations. The same applies to cost reductions in connection with the new industry-wide framework agreement on wages, as negotiations over the new company-specific agreements required within this area are still underway.
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 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 2003/4 financial year, the so-called paper provision ratio was 72.3 per cent. As a financial indicator, “value-added sales” eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual sales performance.
