- Group EBT of €11.1 million remains virtually unchanged (H1 2004/5: €11.4m) following cost streamlining; EBT margin reaches 7.3 per cent for first half, compared with 6.6 per cent a year ago
- Group value-added sales decline year on year from comparable €163.7 million to €152.1 million in first half
- First-half results within target range for financial year:
annual forecast is reaffirmed
Freudenstadt, 10 May 2006. schlott gruppe has today published its report for the second quarter (January to March) and the first half of the 2005/6 financial year. The preliminary results announced on 26 March 2006 were confirmed.
The second quarter clearly underlines the sustainable profitability of schlott gruppe. which performed solidly despite challenging market conditions. Lacklustre demand and intense price competition produced additional pressure in what is generally considered to be the weakest quarter of the financial year. Consequently, value-added sales (VAS) within the Group declined to €69.1 million, after €75.0 million (adjusted for comparability) in the same period a year ago. However, the impact on earnings was kept to a minimum following incisive efforts to scale back costs. Consolidated earnings before taxes (EBT) amounted to €1.3 million, after €2.0 million a year ago. In the first half, value-added sales for the Group amounted to €152.1 million, after a comparable €163.7 million, while Group EBT stood at €11.1 million, compared with €11.4 million. As a result, the EBT margin grew from 6.6 per cent to 7.3 per cent. The figures for the corresponding period a year ago have been adjusted for the amounts attributable to the disposal of heckel GmbH, which was deconsolidated at the beginning of the current financial year.The net profit for shareholders of schlott gruppe amounted to €1.1 million in the second quarter, compared with €1.3 million a year ago, and €6.8 million in the first half, after €7.0 million for the same period a year ago. Earnings per entitled share fell from €0.22 to €0.18 in the second quarter, and from €1.13 to €1.10 in the first half.
Within the print segment, value-added sales totalled €54.4 million in the second quarter of 2005/6, as opposed to a comparable €58.9 million in the same period a year ago. The decline is mainly attributable to a demand-related reduction in tonnage of around five per cent (123.0 thousand tonnes, after an adjusted total of 129.4 thousand tonnes). While the decline in volumes was offset to a large extent, the effect of lower prices and advance outlays for large-scale investments at the Freudenstadt plant had an impact on earnings. Segment EBT receded to €3.4 million, after a comparable €5.9 million recorded a year ago. In the six-month period, value-added sales amounted to €120.4 million, after a comparable €128.5 million, while EBT stood at €13.8 million, compared with €16.6 million.
The direct marketing segment performed better in the second quarter, despite the persistent challenging market conditions witnessed within this area. With value-added sales having contracted by €1.3 million year on year to €14.2 million, the loss before taxes improved to €0.9 million, after a loss of €2.4 million posted in the second quarter of 2004/5. This improvement is a result of the considerable reduction in general costs, particularly those associated with personnel. In the first half, value-added sales fell by €3.8 million to €30.5 million; despite this, the loss before taxes improved from €2.1 million to €0.7 million.
Within this context, cost streamlining within the corporate services segment contributed to the overall improvement in bottom-line results. In the reporting period, costs were reined back by a solid ten per cent, while the reduction achieved in the first six months as a whole amounted to 14 per cent, down from €10.7 million to €9.2 million. Overall, schlott gruppe can look forward to the second half with renewed optimism, particularly as this period is much more predictable than the previous quarters both in terms of capacity utilisation and prices. The original forecast of value-added sales in excess of €315 million and EBT growth to just above €26 million for the 2005/5 financial year has thus been reaffirmed by the Group.
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 2nd quarter 2005/6
