- EBT increases slightly from €25.6 million to €25.9 million
- Earnings per share for 2004/5 up from €2.51 to €2.55
- Net debt scaled back more significantly than planned by €18.1 million to
177.5 million - Management and Supervisory Board recommend further increase in dividend
by €0.10 to €1.00 per share
Freudenstadt, 13 January 2006 – As part if its meeting convened on January 13, 2006, the Supervisory Board of schlott gruppe AG examined and adopted the annual financial statements for the 2004/5 financial year ended September 30, 2005. The preliminary results already announced are hereby confirmed.
Earnings before taxes (EBT) rose from €25.6 million to €25.9 million. Thus, the Group was able to further enhance its profitability level despite the expenses amounting to almost €2 million associated with industrial action taken during collective wage negotiations in 2005. Within the area of print, improvements in productivity and increases in tonnage resulted in a 2.8 per cent increase in EBT, taking this figure to €33.2 million (FY 2003/4: €32.3 million). The direct marketing unit recorded a loss of €3.1 million before taxes, compared with a loss of €0.5 million in the previous year. Having stepped up its corporate restructuring measures over the course of the financial year, direct marketing returned to profitability in the fourth quarter. Consolidated net profit reported for the Group rose to €15.8 million (FY 2003/4: €15.6 million). Earnings per share improved year on year from €2.51 to €2.55.Consolidated value-added sales (VAS) receded slightly by 1.7 per cent in the 2004/5 financial year, down from €340.9 million to €335.2 million. The print division – this segment mainly encompasses the gravure printing activities of schlott gruppe – recorded VAS of €268.9 million, thus matching the previous year's performance (FY 2003/4: €269.0 million). The continued pressure on prices for printed media was counterbalanced by a 1.3% increase in overall tonnage to 584.3 thousand tonnes (FY 2003/4: 576.6). Within the area of direct marketing, business continued to lose momentum over the course of the year, with unfavourable market prices having a particularly adverse effect. Correspondingly, VAS within this area contracted by 9.4 per cent to €63.8 million compared with €70.4 million a year ago.
Owing to a higher paper provision ratio, revenue reported for the Group fell by 2.7 per cent – a slightly more pronounced decline than that of consolidated value-added sales – and eventually totalled €565.0 at the end of FY 2004/5, compared with €581.0 million in the previous year.
Cash flow from operating activities rose by 31.2 per cent to €71.0 million (FY 2003/4: €54.1 million), as a result of which capital expenditure on plant and equipment, which more than doubled year on year to €32.2 million mainly due the start-up of the installation of a new rotary gravure printing machine at the Freudenstadt locality, was financed entirely by means of internal funds. After interest payments of €9.0 million (FY 2003/4: €10.5 million) covered by free cash flow of €33.2 million, the Group had ample resources to rein back net debt by a considerable margin and much more significantly than originally anticipated. The latter was scaled back by €18.1 million year on year, down from €195.6 million a year ago to €177.5 million in 2004/5. The equity ratio increased from 25.9 per cent to 28.7 per cent.
The Management Board and Supervisory Board propose an increase in dividends to €1.00 per share (FY 2003/4: €0.90); the proposal will be put to the General Meeting of Shareholders. The dividend policy of schlott gruppe is based on the three criteria of continuity, financial return and cash flow/net debt ratio. This year's dividend proposal bears testimony to the considerable decrease in net amounts due to banks. Within this context, shareholders are to benefit from the greater flexibility gained in connection with the requisite allocations to revenue reserves.
The full annual report for 2004/5 and preliminary financial results for the first quarter (October to December) of the current financial year will be presented at the press and analysts' conference on January 25, 2006.
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 result from the paper-provision behaviour of customers and are of no relevance to bottom-line results: paper supplied by customers, as opposed to paper purchased by the Group, is not recorded in the accounts of schlott gruppe.
In the 2004/5 financial year, the so-called paper provision ratio was 73.2 per cent. As a financial indicator, “value-added sales” eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual sales performance.
The Group has categorised its activities into three business units: print, direct marketing and corporate services. Revenues and earnings generated by corporate services are derived solely from internal charging for services rendered as well as internal cost allocation. The results for the Group as a whole outlined above are derived from the print and direct marketing business units as well as the corporate services unit and consolidation effects.
