- Group value-added sales (VAS) decline from €93.0 million to €83.1 million year on year due to deconsolidation of heckel and changes in print advertising cycles
- Group EBT increases from €9.4 million to €9.7 million despite VAS contraction; EBT margin rises from 10.1 to 11.7 per cent
- Outlook: annual forecast remains unchanged
Freudenstadt, 8 February 2006. schlott gruppe today presents its first-quarter report (October to December) for the 2005/6 financial year. The preliminary financial results announced on 25 January 2006 have been confirmed.
The first quarter underlines the sustainable earnings performance of schlott gruppe. Consolidated earnings before taxes (EBT) increased from €9.4 million to €9.7 million year on year, despite a contraction in value-added sales (VAS) from €93.0 million in Q1 2004/5 to €83.1 million in the first quarter of the 2005/6 financial year; revenue totalled €141.0 million in the same period, compared with €158.0 million a year ago.
In the first quarter, value-added sales and revenue were affected by the sale and deconsolidation of heckel GmbH as well as by changes introduced by some key accounts with regard to their print advertising cycles.
Within the print business unit value-added sales amounted to €66.0 million in the first quarter of 2005/6, compared with adjusted €69.6 million in the same period a year ago; previous year’s figure of €73.8 million is adjusted for the €4.2 million value-added sales attributable to heckel in that period. The comparable adjusted tonnage declined to 146.2 thousand tonnes, compared with 154.1 thousand tonnes in Q1 2004/5. EBT totalled €10.4 million in Q1 2005/6, as opposed to €10.6 million in the same period a year ago. Nevertheless, the EBT-margin improved as the sale of heckel was associated merely with a deconsolidation of revenues and not with one of earnings.
Having achieved turnaround in the fourth quarter of 2004/5, the direct marketing business unit managed to consolidate the break even in the first quarter of the current financial year. Within this area, value-added sales amounted to €16.2 million, after €18.8 million a year ago. EBT amounted to €0.2 million, compared with €0.3 million in Q1 2004/5.
Despite lower value-added sales, consolidated earnings before taxes were propelled upwards in the first quarter due to the significant year-on-year reduction in costs attributable to the corporate services unit.
The start to the 2005/6 financial year was in line with the Group's forecasts, as a result of which schlott gruppe confirms its target for FY 2005/6 of value-added sales in excess of €315 million and pre-tax profit of over €26 million. As in the past, owing to seasonality, the second quarter is expected to be the weakest reporting period of the financial year as a whole, despite the changes introduced by a number of major clients in terms of their print advertising cycles. The Group therefore anticipates that earnings distribution for the second quarter and first half of 2005/6 will be similar to that recorded in the same period a year ago.
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 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 business performance.
Interim Report 1st quarter 2005/6
