Business News
Cautious sales recovery in second half of year – one-off costs put pressure on 2009 results
Monday 01. March 2010 - Punch Graphix nv (Punch Graphix) announces its 2009 results today. In comparison with 2008, sales dropped from 163.4 million EUR to 118.4 million EUR. Net losses amounted to 15.9 million EUR against net profits of 15.9 million EUR in 2008. The global economic crisis and one-off costs exerted pressure on the results.
Sales declined by 28% over the 2009 financial year as a result of a drop in equipment sales. Significant one-off costs amounting to 22.9 million EUR exerted pressure on the operating result. These one-off costs relate to the restructuring programme announced in May and impairment of inventory and amounts receivable.
IFRS 31 December 2009 31 December 2008
in million EUR
Sales 118.4 163.4
Operating income 125.8 177.3
EBITDA (1) 18.0 44.2
Operating result (EBIT) -14.2 25.9
Result before taxes -15.9 21.8
Net result -15.9 15.9
Earnings per share (in euro per share) -0.60 0.57
Earnings per share – diluted (in euro per share) -0.60 0.57
REBITDA (2) 20.6 43.5
REBIT (3) 8.7 30.7
(1) EBITDA: is a not defined term according to IFRS, Punch Graphix nv defines this term as earnings before interest and taxes, plus depreciation, amortisation and provisions booked, minus any potential reductions of those items.
(2) REBITDA – recurrent EBITDA: EBITDA adjusted for one-off (non-recurring) cash elements.
(3) REBIT – recurrent EBIT: EBIT adjusted for one-off (non-recurring) cash and non-cash elements.
Significant events during the accounting period
The Punch Graphix Prepress Germany GmbH company was sold to Nipson International nv on 2 March 2009. All CtP activities have now been centralised within Punch Graphix Prepress Belgium nv in Ypres.
The group introduced a cost savings plan during the first quarter of 2009 to bring cost levels into line with the current activity level. Operational costs will reduce by at least 10 million EUR on an annual basis. The full effects of these measures will be expressed in the results from the second quarter of 2010.
The collaborative agreement with Agfa Graphics nv was renewed for a period of four years.
The printing presses and platesetters Punch Graphix launched during Drupa 2008 were rolled out successfully during 2009. Both Xeikon and basysPrint continued to invest in R&D with a view to future product launches. At Xeikon the focus was on further improvement of printing quality and productivity, integration in various workflows and ecology.
Discussion of the annual results
Sales and operating income
Sales Consolidated
in thousand EUR 2009 2008
Sales per segment
Digital Printing Solutions 85,291 119,692
Prepress Solutions (CtP) 33,099 43,664
Total sales 118,390 163,356
Sales per activity/product
Equipment 49,348 91,159
Consumables 42,951 44,094
Service & Other 26,091 28,103
Total sales 118,390 163,356
Sales per region
Europe 83,013 125,370
Americas 31,763 34,645
Asia (including Australia and New Zealand) 3,614 3,341
Total sales 118,390 163,356
Sales declined by 28% compared with 2008. The most important developments were:
Both Digital Printing Solutions (-29%) and Prepress Solutions (-24%) exhibited a sales decline caused principally by a drop in equipment sales.
Revenues from equipment sales for 2009 were 46% below 2008 revenues. Clients continued to have difficulty financing capital items. All this particularly affected sales of the more expensive equipment in the range.
The recurring income from consumables and service activities remained largely stable.
In geographic terms sales declined mainly in Europe (-34%) and America (-8%). In Asia a small sales increase of 8% was achieved.
Operating income was 125.8 million EUR in comparison to 177.2 million EUR in 2008. Overall operating income was 7.4 million EUR and consisted mainly of subsidies and passed-on R&D costs. The 14 million EUR other operating income for 2008 included non-recurring income amounting to around 5 million EUR from the sale of buildings and patents.
EBITDA
EBITDA Consolidated
in thousand EUR 2009 2008
Consolidated 18,029 44,174
Non-recurring elements:
Restructuring costs 2,560 3,000
Costs of attending Drupa 2008 – 1,500
Capital gain on sale of assets – -1,500
REBITDA – -3,700
Consolidated 20,589 43,474
(1) The 2008 sales of patents related to the former milk robot activities.
REBITDA – recurrent EBITDA: EBITDA adjusted for one-off (non-recurring) cash elements
On a comparative basis EBITDA declined by 59%. The REBITDA (EBITDA corrected for one-off [non-recurring] cash elements) showed a decline of around 53%. The most important comments in this regard are:
The economic crisis has exerted pressure on the margins.
A cautious sales recovery began in the second half of the year. Sales in the second half of the year represented 53% of annual turnover.
The lower sales and margins were not fully compensated by the decline in operational costs. In 2009 the group launched a restructuring programme whose full impact will only be noted from the second quarter of 2010.
The restructuring programme mainly encompasses organisational adjustments.
Operating result (EBIT)
EBIT Consolidated
in thousand EUR 2009 2008
Consolidated -14,200 25,857
Non-recurring elements:
On EBITDA 2,560 -700
Impairment losses on current assets and provisions 20,317 5,501
REBIT 8,677 30,658
REBIT – recurrent EBIT: EBIT adjusted for one-off (non-recurring) cash and non-cash elements
The operating result was -14.2 million EUR. The most important elements were:
The total impairment of inventory was 8.0 million EUR over the 2009 financial year. In 2009 the group adjusted its methodology for the impairment of inventory.
The current economic crisis has exerted a negative effect on the payment conduct of clients: the impairments recognised on trade receivables have increased to 3.7 million EUR.
The group has booked provisions amounting to 8.6 million EUR. These provisions concern mainly warranty obligations, restructuring and legal disputes. Settling the damages compensation to Boumatic is included in this, amounting to 2.1 million EUR.
Depreciations and amortisations declined from 13.5 million EUR in 2008 to 11.9 million EUR in 2009.
Financial result and result before tax
The financial result (-0.9 million EUR) comprises mainly net interest income amounting to 0.2 million EUR and exchange rate and hedge losses amounting to 1.0 million EUR. The result before tax amounts to a loss of 15.9 EUR. Profit before tax for the 2008 financial year was 21.8 million EUR.
Net result – group share
The group share in the net loss amounted to 15.7 million EUR against a net profit of 16.0 million EUR in 2008.
Balance sheet and cash flow statement
Balance sheet Consolidated
in million EUR 2009 2008
Non-current assets 196.1 204.8
Current assets 50.2 75.6
Cash and cash equivalents 39.8 16.7
Total assets 286.2 297.0
Shareholders equity 167.0 183.4
Interest bearing loans & borrowings 67.8 59.8
Other liabilities 51.4 53.8
Total liabilities & equity 286.2 297.0
Net financial debt 28.0 43.1
Net financial debt / EBITDA 1.56 0.98
Solvency 58% 62%
Shareholders equity at the end of the reporting period was 167 million EUR. This meant a net decline of 16.4 million EUR against the previous year, a decline arising mainly from the result of the financial year (-15.9 million EUR) and the purchase of treasury shares (-0.4 million EUR).
At the end of the financial year Punch Graphix had a debt of 7 million EUR to Punch International nv. The net financial debt position declined to 28 million EUR.
Cash flow statement Consolidated
in million EUR 2009 2008
Operational cash flow 12.5 35.0
Cash from working capital 2.2 -5.0
Cash from operating activities 14.7 30.0
Cash used in investing activities -10.7 -36.0
Cash from financing activities 19.1 -18.1
Foreign exchange 0.0 0.2
Net cash flow 23.2 -24.0
Cash and cash equivalents end of period 39.8 16.7
The cash flow from operating activities realised in 2009 amounted to 14.7 million EUR; the result of an operational cash flow of 12.5 million EUR and a decline in working capital of 2.2 million EUR.
The investment cash flow for the financial year amounted to 10.7 million EUR net. The most significant investments were in R&D (4 million EUR) and property, plant and equipment (5 million EUR). 2008 investment included a one-off expenditure of 20.7 million EUR for the participation of 24.49% in Accentis nv.
In 2009, 20 million EUR was taken in new bank loans and 11 million EUR of bank debt was repaid. At the end of the accounting year Punch International nv had a receivable on Punch Graphix to the amount of 7 million EUR. Finally, treasury shares were purchased for around 0.4 million EUR. The cash flow from financing activities amounted to 19.1 million EUR and the net cash flow was 23.2 million EUR.
Information about financial debt covenants
The group has a syndicated loan of 75 million EUR with a bank consortium arranged contractually through covenants which are verified on a six-monthly basis. At the end of the 2009 financial year Punch Graphix met all the conditions stipulated in the covenants.
Prospects
Execution of the restructuring programme launched in the first quarter to optimise the organisation and enhance cost efficiency is running according to plan. Punch Graphix expects the market to remain challenging in 2010. It is therefore not possible to provide concrete forecasts.
Changes in the Supervisory Board and the Executive Board
On 1 February 2009 Mr Philip Ghekiere relinquished his office as a member of the Supervisory Board.
On 30 June 2009 Wim Deblauwe stood down as CEO and statutory director. Herman olde Bolhaar, Chairman of the Supervisory Board, was appointed interim CEO.
Wim Maes was appointed CEO with effect from 1 October 2009. During the Extraordinary General Meeting of 9 November 2009 he was confirmed as CEO and new statutory director.
On 1 October 2009 Guido Dumarey relinquished his office as a member of the Supervisory Board.
On 1 October 2009 Wim Deblauwe was appointed as a new member of the Supervisory Board.
Kees Vlasblom was appointed CFO with effect from 16 November 2009.
Purchase of treasury shares
The Executive Board has resolved to avail itself of the authority granted it to purchase treasury shares. Under this authority, which was extended at the Extraordinary General Meeting on 13 February 2009, the directors are empowered to purchase treasury shares up to the maximum quantity that may be vested in the company by virtue of statute and the articles of association at the time of acquisition, at a price between their par value and 110% of the stock-market price at the time of acquisition. The company will periodically report on the number of treasury shares purchased and the average acquisition price in its quarterly trading updates. At the end of 2009 the company had purchased a total of 2.336.979 treasury shares at an average price of 2.51 EUR. 248,458 treasury shares were purchased in 2009.
Proposed dividend
The Executive Board proposes that no dividend be distributed for the 2009 financial year