schlott gruppe Aktiengesellschaft / Restructure of Company
10.06.2009
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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schlott gruppe AG announces extensive restructuring
> Supervisory Board approves extensive measures to secure the
company's future
> Reduction in machine capacity by 20 per cent
> Cutting of approx. 350 jobs
Freudenstadt, 10 June 2009. At its meeting of June 9, 2009, the Supervisory
Board of schlott gruppe AG has discussed an extensive catalogue of measures
drawn up with the express purpose of securing the future viability of
schlott gruppe. The restructuring programme was approved by the majority of
the representatives of the shareholders. This programme of measures is
aimed at counteracting the negative impact of the economic crisis in terms
of production demand and with regard to the significant pressure exerted on
prices within the market for print media, in addition to guiding the
company back towards profits in a manner that is sustainable in the long
term. The management board addresses the concerns of the employees'
representatives by ensuring all applicable legal preconditions granted to
prefect the rights of the employees.
The plan involves a reduction of 20 per cent in the installed machine
capacity from 600,000t at present to 480,000t and around 350 job cuts (out
of 2,330 jobs at present). The sites in Northern Germany will be affected
by direct job cuts.
Together with further supplementary cost-cutting measures, there is to be a
lasting improvement of around EUR 25 million in profitability. The aim is
to achieve a positive pre-tax result again next year, before any one-off
effects due to restructuring, and then to increase profitability gradually
up to the 2011/12 financial year.
Negative general conditions
At present, the company - like the entire European printing industry - is
in a difficult situation, which has been aggravated by the financial and
economic crisis. The sector as a whole has seen a further drop in demand
since the beginning of the year. As there is already excess capacity on the
market, this situation leads to a considerable problem with prices and
volumes. Experts also believe that the printing industry will not return to
the levels seen before the crisis.
schlott gruppe AG, one of Europe's leading rotary printing companies, has
also registered a significant decline in its order intake, while the
overall level of prices is lower and costs are increasing at the same time,
particularly in the areas of staff, energy and transport costs.
While value-added sales (VAS) fell slightly from EUR 230.1 million to EUR
225.5 million between 2005/06 and 2007/08, earnings before tax (EBT)
dropped significantly by EUR 26 million. In the last financial year,
2007/08, only a balanced pre-tax result was achieved before restructuring
costs.
The latest figures confirm this negative development: value-added sales
fell by 17 per cent year-on-year in the second quarter of 2008/09, while
there was a drop in the printed tonnage of 37,000t (12 per cent) in the
same period. Before non-operational effects, the development of earnings
before tax (EUR -1.6 million in the same period of the previous year) was
negative again.
There has been a considerable drop in prices in the last few years,
particularly in the field of gravure printing. The gross operating profit
will have dropped by a total of 24 per cent between the 2005/06 financial
year and the end of the 2008/09 financial year with adjustments for
acquisitions, with a simultaneous drop in volumes of 11 per cent.
Details of the planned measures
The plan involves a reduction in the total machine capacity installed in
the field of gravure printing from 600,000t at present to 480,000t; this
represents a reduction by a total of five machines at various sites. At the
same time, capacity for post-processing services will be adjusted
accordingly.
As a result, schlott gruppe will cut around 350 of the 2,330 jobs at
various sites by spring 2010. If overall economic conditions become even
more negative than the assumptions on which the restructuring programme is
based, this catalogue of measures will be extended further.
Further measures to reduce personnel costs that will affect all employees,
such as the long-term abolition of one-off payments under collective pay
agreements or an extension of weekly working hours, are also urgently
required in order to achieve the necessary savings. Extensive measures are
also planned on the financing side, in order to strengthen the financial
basis of schlott gruppe AG.
Vision 2012
The aim of the measures that have been announced is to adapt printing and
further processing capacity to demand and achieve a high degree of
flexibility. This will allow schlott gruppe AG to detach itself from the
price war in the printing industry and create a stable basis for its future
development.
schlott gruppe AG is convinced that this extensive restructuring programme
is an important prerequisite for securing the future of the company and a
large proportion of jobs in the long term. When the measures described have
been completed, schlott gruppe AG will remain one of the leading rotary
printing companies on the European market.
Explanation of financial data:
Both in external communications and in internal management, schlott gruppe
uses the figure 'value-added sales' in addition to 'sales'. Sales are
subject to fluctuations resulting from customers' habits in providing
paper: in contrast to paper purchased by the company itself, paper provided
by customers does not go through the accounts of schlott gruppe. In the
2007/08 financial year, the paper provision rate was 72.0 per cent. The
value-added sales eliminate fluctuations in paper provision habits and thus
reflect the actual development of business.
schlott gruppe AG
Marco Walz
Investor Relations & PR
Wittlensweilerstraße 3
72250 Freudenstadt
GERMANY
Tel.: +49 7441 531-230
Fax: +49 7441 531-404
marco.walz@schlottgruppe.de
www.schlottgruppe.de
DGAP 10.06.2009
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Language: English
Issuer: schlott gruppe Aktiengesellschaft
Wittlensweilerstraße 3
72250 Freudenstadt
Deutschland
Phone: +49 (0)7441 531-230
Fax: +49 (0)7441 531-204
E-mail: marco.walz@schlottgruppe.de
Internet: www.schlottgruppe.de
ISIN: DE0005046304
WKN: 504630
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hamburg, Düsseldorf, Stuttgart, München
End of News DGAP News-Service
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DGAP-News: schlott gruppe AG announces extensive restructuring
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