- Negotiations on sale of direct marketing enter final stage
- Announcement of results for second quarter and first half of 2006/7 thus postponed from May 9 to May 14, 2007
Freudenstadt, April 25, 2007. As outlined in an ad hoc announcement of January 23, 2007, schlott gruppe intends to dispose of its direct marketing division and invest in its print division the resources freed up as part of this transaction. The sale of direct marketing will leave schlott gruppe with more room to manoeuvre, particularly in its efforts to actively enhance its core activities within the print segment and to leverage growth opportunities.
The direct marketing unit accounted for 19 per cent of value-added sales generated in the Group and 12 per cent of segment assets. Thus, the disposal of this segment will have a significant impact on the Group's key financials. The sale is in the final stages of negotiation, with the full details to be presented as part of the first-half results. Therefore, the announcement of schlott gruppe's preliminary results for the first half ended March 31, 2007, publication of which had originally been planned for today, has been cancelled. At the same time, the interim report has been postponed from May 9 to May 14, 2007.As already outlined during the balance sheet press conference and presentation of the figures for the first quarter of the current financial year 2006/7 in January 2007, schlott gruppe's overall operating performance within the print segment continues to be dominated by substantial market competition, giving rise to corresponding risks when it comes to earnings. These risks are unlikely to be offset completely by short-term cost streamlining in the course of the current financial year. Operating against this backdrop and as already announced, the company is thus anticipating a visible fall in EBT (earnings before taxes) within the print segment for the current 2006/7 financial year. The company intends to utilize the proceeds from the sale of the direct marketing division on group level to compensate for the earnings decline caused by the above mentioned factors in the print segment. In the long term, however, schlott gruppe is determined to reap the rewards of its initiated cost cutting measures and its position as one of the top two players in Europe's rapidly consolidating gravure-printing market.
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 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 2005/6 financial year, the so-called paper provision ratio stood at 79.9 per cent. As a financial indicator, "value-added sales" eliminates fluctuations relating to paper supplied by customers, thus reflecting the actual sales performance.
