Press Release24 Janvier 2008
CONSOLIDATED RESULTS FOR THE 3rd QUARTER AND 9 MONTHS 2007-2008
Back to structural profit for the first time in five years
Product sales increase (excluding exchange rate): +8.9%
A fire broke out in the Faverges plant
I - KET INDICATORS
Key indicators for quarter 3 and the first 9 months of 2007-08 are as follow:
| In € millions | QUARTER 3 | CUMUL | ||||
| Consolidated | 31/12/2007 | 31/12/2006 | variation | 31/12/2007 | 31/12/2006 | variation |
| Sales | 24.9 | 25.5 | -2.1% | 61.4 | 58.7 | 4.6% |
| Gross Margin | 12.9 | 12.7 | 1.1% | 31.4 | 28.1 | 12.0% |
| % | 51.7% | 50.1% | 1.6% | 51.2% | 47.8% | 3.3% |
| EBIT | 2.4 | 0.2 | 1.9 | 2.5 | ||
| % | 9.6% | 0.7% | 8.9% | 3.1% | 4.2% | -1.1% |
| Net result | 2.0 | -0.4 | 0.7 | 0.8 | ||
| % | 8.1% | -1.6% | 9.6% | 1.2% | 1.4% | -0.2% |
Quarterly sales are not fully comparable from one year to another. As a matter of fact, last year quarterly sales were impacted by the carry forward impact of the strike in Faverges that took place late September 2006; the impact was estimated to be 8.5 points.
Year-to-date increase is more in line with the group performance.
Sales are increasing despite the exchange rates that are still material (-3.2% in quarter 3 and -3.5% cumulative).
Sales per activity :
| Sales | Quarter 3 | Variation | Variation | 31/12/2007 | Variation | Variation |
| In € millions | organic | cumulative | Organic | |||
| Lighters & W.I. | 14.2 | 4.2% | 7.4% | 31.5 | 5.4% | 8.5% |
| Leathergoods & RTW | 9.9 | -7.9% | -5.2% | 26.4 | 6.1% | 9.4% |
| Total Sales Products | 24.1 | -1.1% | 1.9% | 57.9 | 5.7% | 8.9% |
| Royalties | 0.8 | -22.5% | -14.9% | 3.5 | -10.1% | -3.0% |
| Consolidated sales | 24.9 | -2.1% | 1.1% | 61.4 | 4.6% | 8.1% |
Lighters and writing instruments are still increasing both in volume and value. This confirms the turnaround perceived for a couple of months.
Regarding leather goods, accessories and ready-to-wear, quarterly performance is due to the Asian area where December sales were really bad while this activity is significant for this area.
Royalties are declining because of exchange rates and because one of our licences went into bankrupt late December 2007.
Regarding results, the recovery is there, both for quarterly and year-to-date figures. Almost all the performance indicators are better than expected in our 2006 business plan and we can show structural positive EBIT and net profit for the first time in five years.
- Gross margin percentage increases by +3.3 points compared to last year as a result of cost cutting actions ;
- Overheads are decreasing while sales increase ;
- Non recurring items, that amounted +5.4 million euros last year with a positive EBIT, are close to nil this year ;
- The only item still negative is the impact of exchange rates amounting -0.8 million euros.
Net profit amounts +0.7 million euros which is a very significant structural improvement compared to last year.
II - POST BALANCE SHEET ITEMS
On the 5th of January 2008, a fire broke out in the Faverges plant and destroyed the polishing, plating and lighters assembly line workshops and the related work in progress inventories. Finished goods inventories were not concerned by the fire.
This fire will impact more than 50% of our sales as lighters and writing instruments industrial process includes these workshops. Nevertheless, the rest of the business (leather goods, belts, accessories and ready-to-wear) is not concerned by the fire as fully sub contracted.
Existing finished goods inventories, both in Faverges and our subsidiaries or distributors will contribute to minimize, but not to fully compensate, the impact of the fire on our production capacity and our sales.
Due to the importance of the fire and despite all the efforts put on reconstruction, production of lighters and writing instruments will be significantly affected for the next two or even three quarters, although the impact will decrease as time goes on.
All priorities are put on the re-start of the production either through sub contracting or temporary workshops.
Group policy in term of insurance includes " replacement value " for fixed assets and " 12 months operational loss " at a consolidated level. Thus, this fire will probably have a material positive impact on this year results.
Despite the short term troubles, this fire is a opportunity as we'll have a new and more efficient production line, we'll be able to adapt our process in order to increase productivity and gross margin and to continue the reduce the size of our product lines.
This fire will not stop S.T.Dupont recovery but, on the contrary, will reinforce our ability to generate a structural profitable growth.
Contacts :
- Contact Analyst: Michel Suhard 01 53 91 33 11
- Contact Press : Burson-Marsteller
Lorie Lichtlen (33) 1 41 86 76 60 lorie.lichtlen@bm.com
Adélaïde Leroy-Beaulieu (33) 1 41 86 76 86 Adelaide.leroy-beaulieu@bm.com