Press ReleaseApril 25, 2008
CONSOLIDATED SALES FOR THE 4th QUARTER
& THE WHOLE YEAR 2007-2008
13.1 M€ in quarter 4 & 74.5 M€ for the whole year
Sales variation
Including exchange rates: Organic:
-26.2% Quarter 4 -23.0% Quarter 4
-2.5% Cumulative +1.0% Cumulative
1. SALES BY PRODUCTS
| Euros millions | Quarter 4 | Variation | Variation | Total | Variation | Variation |
| 07-08 | including | Organic | 07-08 | including | Organic | |
| exchange | exchange | |||||
| Lighters & Writing instruments | 4,4 | -38,8% | -36,0% | 35,9 | -3,1% | 0% |
| Leather goods & RTW | 7,4 | -22,0% | -18,6% | 33,8 | -1,7% | 1.9% |
| Total Products | 11,7 | -29,3% | -26,1% | 69,7 | -2,4% | 0,9% |
| Royalties | 1,4 | 15,4% | 20,2% | 4,9 | -4,1% | 3,1% |
| Consolidated sales | 13,1 | -26,2% | -23,0% | 74,5 | -2,5% | 1,0% |
Quarterly sales have been significantly affected by the consequences of the fire that broke out on January 5th in the Faverges plant. Since then production of lighters and writing instruments was nil as workshops destroyed by the fire are necessary for the production process.
Impact of fire has been slightly compensated through a fine tuning of the existing inventory of finished goods.
Although they are not directly affected by the fire, sales of leather goods and ready-to-wear suffers from collateral damages as some customers cancelled their orders because they didn't wish to receive partial deliveries.
On a cumulative basis, positive variance shown in the first 3 quarters (+9.0% by the end of December) tends to limit the impact of the decrease in sales due to the fire.
Exchange rates impact is still very material (-3.2% in Q4 & -3.3% cumulative for product sales).
Royalties increase by 3.1% organic and decrease by -4.1% including exchange rates as almost 100% of royalties are invoiced in non euro currencies.
2. SALES PER GEOGRAPHICAL AREAS
| Euros millions | Quarter 4 | Variation | Variation | Total | Variation | Variation |
| 07-08 | including | Organic | 07-08 | including | Organic | |
| exchange | exchange | |||||
| France | 1,3 | -29,0% | -29,0% | 8,9 | -0,2% | -0,2% |
| Europe (excluding France) | 2,0 | -52,2% | -52,2% | 22,8 | 11,8% | 12,1% |
| Asia | 7,7 | -16,7% | -11,1% | 31,0 | -11,0% | -5,0% |
| America | 0,0 | -86,1% | -85,8% | 2,2 | -33,1% | -26,9% |
| Other | 0,6 | -34,3% | -34,3% | 4,8 | 20,2% | 20,2% |
| Total Products | 11,7 | -29,3% | -26,1% | 69,7 | -2,4% | 0,9% |
For the 4th quarter, Europe (including export sales) deeply suffered from the fire as most of the markets are on direct deliveries from Faverges without local inventories.
Regarding Asia, impact was limited as these subsidiaries have local inventories that help them to keep sales to a certain level.
As for Americas, mainly concerned by lighters and writing instruments, deliveries were suspended as they have local inventories and we've decided to prioritize some markets in the monitoring of the finished goods shortage.
On a cumulative basis, thanks to the positive variation at the end of quarter 3, Europe and Middle East, show a strong increase in sales.
3. CONSEQUENCES OF THE FIRE
Just after the fire, we decided to rebuild the workshops in Faverges.
This will last over the 9 coming months as the buildings have to be destroyed then rebuild. Full production capacity should be recovered by December 2008.
In the meantime in order to be able to serve our markets either for existing or new products, we launched actions in view of getting production capacity though sub-contractors.
Because of our standards in term of quality and technical skills, the implementation of sub-contracting requires a very fine selection of sub-contractors and assistance from our staff during the launching phase. The first lighters and writing instruments were produced in April, in line with our expectations.
The development of the sub-contracting process and provisional craft shops in the plant will be progressive and allow us to limit to a maximum the consequences of the fire over our sales.
Thanks to our insurance policy both in term of damages and operational loss, the fire shouldn't have negative consequences on our 2008-2009 profit and we should be in line with our original assumptions as per the 2006 business plan.
Contacts:
- Contact Analyst: Michel Suhard (33) 1 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