Press ReleaseNovember 28, 2008
CONSOLIDATED RESULTS FOR THE FIRST HALF YEAR 2008-2009
Key indicators are strongly improving. Positive EBIT + 4.7 M€ vs. 0.0 M€ as at Sept, 30, 2007. Impact of fire upon sales is material but in line with our expectations. Impact of fire upon our EBIT as at Sept, 30, 2008 amounts +6.1 M€. Net profit as at Sept, 30, 2008 + 4.0 M€ vs -1.2 M€ as at Sept, 30, 2007.
Key indicators as at Sept, 30, 2008, are as follow:
| Quarter 2 | Half Year 1 | |||||
| 30/09/2008 | 30/092007 | variation | 30/09/2008 | 30/092007 | variation | |
| Consolidated (year to date) | ||||||
| Sales | 16 225 | 19 547 | -17,00% | 30 634 | 36 504 | -16,10% |
| Gross Margin | 9 666 | 9 349 | 3,40% | 16 604 | 17 919 | -7,30% |
| % | 59,60% | 47,80% | 11,70% | 54,20% | 49,10% | 5,10% |
| Overheads | -9 106 | -9 273 | -1,80% | -18 212 | -17 708 | 2,80% |
| Other income & charges | 2 982 | 248 | 6 254 | 7 | ||
| Profit/Loss on exchange | 165 | -114 | 59 | -248 | ||
| EBIT | 3 709 | 209 | 3 499 | 4 705 | -29 | 4 734 |
| % | 22,90% | 1,10% | 21,80% | 15,40% | -0,10% | 15,40% |
| Associated companies | -199 | -129 | -224 | -216 | ||
| Interests | 102 | -693 | -114,80% | -297 | -913 | -67,50% |
| Taxation | -94 | -242 | -184 | -128 | ||
| Net results | 3 517 | -855 | 3 999 | -1 286 | ||
| % | 21,70% | -4,40% | 26,10% | 13,10% | -3,50% | 16,60% |
Impact of fire upon sales in quarter 2 is still material but to a lower extent than during the first quarter. Gross margin percentage is significantly higher than last year as a consequence of cost cutting actions implemented in previous years and the decision taken after the fire to re-launch higher margin products. Impact of fire upon EBIT is material and comes from operational loss coverage less over costs linked to the fire.
Sales per sector of business:
Lighters and writing instruments are still deeply impacted by production troubles due to the fire. Although it's improving through the implementation of sub contractors, we're not yet up to 100% production capacity. Other sectors of business partly compensated the shortage of hard goods products and did relatively well aver the first half year.
Impact of exchange rates are still material (-2.0% for the period compared to last year). Although the euro dropped vs all other currencies by the end of September, the average exchange rate is still unfavourable.
Results:
- Gross margin percentage is significantly improving compared to last year because of cost cutting actions implemented in the previous years, a better balance between "retail" and "wholesale" and the decision taken when re-launching production through sub contractors to focus on higher margin products. All the companies within the group show an improvement in gross margin percentage compared to last year.
- Overheads are slightly increasing by 2.8% for the first half year and decreasing for the second quarter.
- Other income and expenses include exceptional costs linked to the fire, such as sub contracting and an estimate of the operational loss indemnity amounting 8.0 M€ based upon prepayments received from insurance companies.
EBIT amounted + 4.7 M€ vs 0.0 M€ last year.
Net profit amounted + 4.0 M€ vs a net loss of - 1.3 M€ as at Sept, 30, 2007.
Impact of the fire
Reconstruction of the plant is going on, in line with our planning. The plant should be operational early December 2008. Negotiations with insurance companies are completed as regard building, machines and inventories. Final result is slightly above our estimate as at March, 31, 2008 (+0.3 M€). As for operational loss, negotiations are still in process and we were not in a position to make a fair estimate. The received or accrued prepayments have been taken into account in the results for the period
Refinancing of the OCEANE
Refinancing of the OCEANE bonds matured as at April, 1st 2008 is still under analysis. We remind you the guarantee given by the majority shareholder to give its full support to S.T.Dupont SA so that the company will be in a position to repay 100% of the bond issue.
Impact of the financial crisis upon the business
Financial crisis will have an impact on our sales. Actions aiming at preserving the result for the year have been launched and will have an impact over the coming months. It's actually too soon to estimate of such an impact of this crisis but the drop of Euro vs. other foreign currencies will certainly help to limit the consequences.
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
CONSOLIDATED FINANCIAL STATEMENTS
P&L
| (euros 000) | 30/09/2008 | 31/03/2008 | 30/09/2007 |
| Sales products | 28 222 | 69 682 | 33 838 |
| Royalties | 2 412 | 4 886 | 2 666 |
| Net sales | 30 634 | 74 568 | 36 504 |
| Cost of goods sold | -14 030 | -39 205 | -18 585 |
| Gross Margin | 16 604 | 35 363 | 17 919 |
| Communication | -2 490 | -6 204 | -2 149 |
| Selling | -6 460 | -14 339 | -6 143 |
| Overheads | -9 262 | -19 258 | -9 416 |
| Other income and expenses | 6 313 | 6 458 | -241 |
| Impairment | - | 2 311 | - |
| EBIT | 4 705 | 4 331 | -29 |
| Financial income | 206 | 732 | 446 |
| Financial expenses | -1 044 | -2 129 | -1 067 |
| Net financing expense | -838 | -1 397 | -621 |
| Other financing | 541 | -1 151 | -292 |
| Share of results in associated companies | -224 | -144 | -216 |
| Result before tax | 4 183 | 1 639 | -1 159 |
| Tax | -184 | -363 | -128 |
| Net result | 3 999 | 1 276 | -1 286 |
| Result per share (euros) | 0,009 | 0,003 | -0,003 |
| Result per share diluted (euros) | 0,009 | 0,003 | -0,003 |
For comparison purposes, financial statements as at September 2007 have been restated regarding provision for inventory depreciation and financial foreign exchange loss.
Net impacts of these restatements are:
Gross margin decrease by 628 thousand euros as at Sept, 30,2007 for inventory depreciation;
Same reverse change for overheads;
Other income & expenses decrease by 243 thousand euros as at Sept, 30, 2007 due to financial exchange loss;
Same reverse change for other financial income & expenses.
Balance Sheet
| ASSETS | |||
| (in € thousands) | 30/09/2008 | 31/03/2008 | 30/09/2007 |
| Non-current assets | |||
| Goodwill | 2 810 | 2 556 | 2 838 |
| Intangible assets (net) | 903 | 750 | 466 |
| Property, plant and equipment (net) | 6 720 | 3 726 | 2 389 |
| Long-term financial assets | 2 073 | 1 859 | 1 716 |
| Investments in associates | 476 | 701 | 629 |
| Deferred taxes | 300 | 240 | 208 |
| Total non-current assets | 13 281 | 9 832 | 8 246 |
| Current assets | |||
| Inventories and work-in-progress | 25 203 | 18 574 | 21 172 |
| Trade accounts receivable | 9 653 | 11 344 | 12 030 |
| Other receivables | 19 277 | 11 291 | 3 945 |
| Short-term tax assets | 719 | 808 | 650 |
| Cash and cash equivalents | 12 773 | 24 483 | 26 412 |
| Total current assets | 67 624 | 66 500 | 64 209 |
| Total assets | 80 905 | 76 332 | 72 455 |
EQUITY AND LIABILITIES
| (in € thousands) | 30/09/2008 | 31/03/2008 | 30/09/2007 |
| Equity | |||
| Share capital | 21 231 | 21 231 | 21 231 |
| Additional paid-in capital | 967 | 967 | 967 |
| Treasury shares | (1 003) | (1 003) | (5) |
| Equity component of convertible bonds | 1 904 | 1 904 | 1 904 |
| Reserves | (3 399) | (4 908) | (5 057) |
| Cumulative translation adjustment | (2 104) | (3 509) | (1 935) |
| Profit/(loss) for the period | 3 999 | 1 276 | (1 286) |
| Equity attributable to equity holders | 21 596 | 15 958 | 15 819 |
| Minority interests | |||
| Non-current liabilities | |||
| Convertible bonds (long-term portion) | 0 | 21 424 | 21 194 |
| Long-term borrowings | 34 | 30 | 34 |
| Long-term finance lease liabilities | 109 | 157 | 131 |
| Deferred taxes | 22 | 23 | 22 |
| Long-term provisions for pension and other post- | 6 119 | 6 046 | 6 176 |
| employment benefits | |||
| Total non-current liabilities | 6 284 | 27 680 | 27 558 |
| Current liabilities | |||
| Trade accounts payable | 10 672 | 9 259 | 6 894 |
| Other payables | 9 531 | 10 848 | 9 087 |
| Short-term tax liabilities | 237 | 389 | 666 |
| Short-term provisions for contingencies and charges | 8 168 | 8 228 | 9 042 |
| Convertible bonds (short-term portion) | 22 509 | 1 543 | 772 |
| Short-term borrowings | 1 798 | 2 149 | 2 452 |
| Short-term finance lease liabilities | 111 | 278 | 167 |
| Total current liabilities | 53 025 | 32 694 | 29 079 |
| Total equity and liabilities | 80 905 | 76 332 | 72 455 |
Consolidated cash flow statement
| (euros 000) | 30/09/2008 | 31/03/2008(*) | 30/09/2007 |
| I - Cash flow from operations | |||
| Profit/(loss) for the period (1) | 3 999 | 1 276 | -1 286 |
| Depreciation, amortization & impairment | 1 029 | 974 | 372 |
| Change in provision | -8 | -2 918 | -1 989 |
| Insurance indemnity dedicated to capital expenditures (3) | -2 192 | -1 451 | |
| Interest expenses | 946 | 1 447 | 690 |
| Gain and (loss) on disposal of fixed assets | -302 | 354 | 372 |
| Tax expense/(income) | 184 | 411 | 128 |
| (income)/loss from associates | 224 | 144 | 216 |
| Cash flow from operations | 3 881 | 237 | -1 497 |
| Change in inventories | -5 991 | 128 | -2 178 |
| Change in trade accounts receivables | 1 789 | -1 166 | -2 176 |
| Change in other receivables (2) | -7 866 | -8 030 | -646 |
| Change in trade accounts payables | 1 298 | 2 357 | -83 |
| Change in other payables | -1 379 | 1 633 | 180 |
| Change in operating working capital requirement | -12 148 | [5 078] | -4 903 |
| Interest paid | -116 | -50 | -73 |
| Interest received | 206 | 735 | 447 |
| Income tax paid | -288 | -485 | 238 |
| NET CASH FROM OPERATING ACTIVITIES | -8 465 | -4 641 | -5 788 |
| II - Cash flow from investing activities | |||
| Acquisition of intangible assets (excluding development activities) | -446 | -772 | -256 |
| Acquisition of tangible assets (net of payments from insurance | |||
| -1 202 | -1 515 | -1 042 | |
| indemnity (3) | |||
| Acquisition of investments | -192 | -371 | -300 |
| Cash used in investments | -1 840 | -2 658 | -1 598 |
| Proceeds from disposal of intangible fixed assets | 200 | ||
| Proceeds from disposal of investments | 74 | 83 | 20 |
| Cash provided by divestments | 74 | 283 | 20 |
| NET CASH USED IN INVESTING ACTIVITIES | -1 766 | -2 375 | -1 578 |
| III - Cash flow from financing activities | |||
| Purchase of ST Dupont shares | - | -1 000 | - |
| Increase in borrowings | 329 | 623 | 297 |
| Repayment of borrowings | -983 | -616 | -1 386 |
| Interest paid | -1 044 | -2 129 | -1 067 |
| Overdrafts | - | - | |
| NET CASH GENERATES FROM FINANCING ACTIVITIES | -1 697 | -3 122 | -2 156 |
| Impact of exchange rate fluctuation on cash & cash equivalents | 399 | -1 333 | -286 |
| Net change in cash & cash equivalents | -11 530 | -11 471 | -9 808 |
| Cash & cash equivalents beginning of period | 23 471 | 34 942 | 34 942 |
| Cash & cash equivalents end of period | 11 941 | 23 471 | 25 134 |
| Net change in cash & cash equivalents | -11 530 | -11 471 | -9 808 |
(1): including 7 954 k€ insurance indemnity (September 08) and 11 183k€ (march 08)
(2): including change in accrued insurance indemnities amounting 4 484k€ as at September, 30, 2008
(3): as at Sept, 30, 2008, although 4M€ prepayment from insurance concerned operational loss, it has been used to finance plant reconstruction (*): insurance indemnity as at March, 31, 2008, has been restated in order to comply with September, 30, 2008, presentation