Press ReleaseJuly, 3, 2009
CONSOLIDATED RESULTS AS AT MARCH, 31, 2009
Despite the overall context - fire in the plant early 2008 and the world crisis that both impact sales in a negative way (-17.8% vs. last year) - S.T. Dupont shows an EBIT amounting €5.1 millions increasing versus last year as for the last three years and a gross margin percentage steadily improving at 52.2% (+4.8 points)
The impact on EBIT of non recurring items, due especially to the fire, must be pointed out.
The insurance file is now fully completed and the Faverges plant is re-built and up-to-date
Compared to last year, lighters and writing instruments were deeply impacted by the consequences of the fire (-25%) compared to leather goods and accessories (- 13,5 %). Per geographical area, France did resist (- 8 %) and HGK/China is still growing. The most impacted markets were Russia and Eastern Europe as our local distributors stopped all orders as from September 2008 because of the crisis, Japan which is mostly a lighter market, because of the consequences of the fire and the U.S., where Dupont is actually doing a very low business.
In 2008-2009, the majority shareholder did confirm is strong support to S.T.Dupont through the €15 millions bond issue on March, 31, 2009.
KEY INDICATORS
Key consolidated indicators are as follow:
| Euros millions | 31/03/2009 | 31/03/2008 | 31/03/2007 |
| Sales Product | 56,2 | 69,7 | 71,4 |
| Consolidated sales | 61,3 | 74,6 | 76,5 |
| Gross Margin | 32,0 | 35,4 | 37,0 |
| ( % ) | 52,2 % | 47,4 % | 48,3 % |
| EBIT | 5,1 | 4,3 | 0,8 |
| Cost of financing (net) | (1,8) | (1,4) | (1,2) |
| Net Result | 3,3 | 1,3 | (1,0) |
| Net Debt | (9,8) | (1,1) | 10,3 |
| Consolidated Equity | 23,5 | 16,0 | 17,8 |
Major events for the year
Fire at the plant in Faverges
The fire that broke up on January, 4, 2008, destroyed the polishing, plating and lighters assembly line workshops. Decision to rebuild the plant was taken just after the fire so as the implementation of a sub contracting process in order to get a production capacity as soon as possible.
Impact of the fire on our consolidated results is as follows
| Euros 000 | 31/03/2009 | 31/03/2008 |
| Loss on fixed assets and inventories | - 3 310 | |
| Exceptionnal costs and under activity | - 5 526 | - 902 |
| Indemnity on assets | 508 | 11 183 |
| Indemnity on exceptionnal costs | 3 056 | |
| Indemnity on operational loss | 12 460 | |
| Impact on EBIT | 10 498 | 6 971 |
Impact of the fire is included in the EBIT. The Company considers that the operational loss indemnity covers the loss of margin generated by the fire.
Reconstruction of the plant was completed in December 2008 and it's now 100% operational. Capital expenditures related to the reconstruction are in line with the indemnity received for fixed assets.
As regards the operational loss, the indemnity covers the loss of margin both at the French Company and subsidiaries' level due to the consequences of the fire. The indemnity coverage was for a 12 months period that ended early January 2009.
On top of exceptional costs covered by the insurance indemnity, the fire led to under activity and part time unemployment that were attributable to the fire for a total amount of € 5.5 millions.
Termination of the litigation with the former distributor for Eastern Europe
The Group entered into a litigation with its former distributor for Eastern Europe and a provision for risk has been accounted for in 2006-2007.We came to an agreement for ending this litigation on February, 18, 2009. The net impact on EBIT is +€2.3 million.
€15 million bond issue (OCEANE)
In order to finance the repayment of the OCEANE 2004 having a maturity date April, 1st, 2009, S.T.Dupont issued on March, 30, 2009 a new bond issue amounting €15 million (€14.7 million net) having a maturity date March, 31, 2014 and a 10.0% coupon.
The bond issue has been mainly subscribed by the majority shareholder, D&D International BV (96,89 %), who guaranteed 100% of the bond issue.
Cash
The Group cash position is impacted by the high level of inventory compared to a normal situation. This is due to the implementation of subcontracting that led to higher inventories and the economical crisis as some distributors (Eastern Europe) suddenly stopped their orders. Over stock is estimated to be €8 million that directly impact the Group cash position.
Actions aiming at decrease the level of inventories has been launched either through commercial action, temporary stop of orders for purchased products and use of part time unemployment.
Combined with the consequences of the economical crisis, this led to a tight situation in term of cash for a couple of months.
Taking into account the expected level of sales from September to December 2009, that are higher and to support from the majority shareholder up to €1 million, the Group considers that operations can be financed for the next 12 months.
Contact Analystes : S.T.Dupont Michel Suhard 01 53 91 33 11 msuhard@st-dupont.com
Contact Presse : Euro RSCG Thierry Micheels 01 58 47 94 98 thierry.micheels@eurorscg.fr
Consolidated financial statements
Consolidated income statement
| (Euros 000) | 31/03/2009 | 31/03/2008 | 31/03/2007 |
| Net product sales | 56 194 | 69 682 | 71 379 |
| Other revenue | 5 116 | 4 886 | 5 095 |
| Total sales | 61 310 | 74 568 | 76 474 |
| Cost of sales | (29 286) | (39 205) | (39 502) |
| Gross margin | 32 024 | 35 363 | 36 972 |
| Communication expenses | (6 454) | (6 204) | (5 112) |
| Selling expenses | (14 514) | (14 339) | (14 794) |
| Overheads and administrative expenses | (18 533) | (19 258) | (18 890) |
| Other expenses | (8 071) | (5 356) | (2 345) |
| Other income | 20 670 | 11 814 | 4 798 |
| Impairment | 10 | 2 311 | 200 |
| EBIT | 5 132 | 4 331 | 829 |
| Income from cash and cash equivalents | 349 | 732 | 968 |
| Finance costs, gross | (2 105) | (2 129) | (2 213) |
| Finance costs, net | (1 756) | (1 397) | (1 245) |
| Other financial income and expense, net | 254 | (1 151) | (388) |
| Income/(loss) from associates | (241) | (144) | (192) |
| Income tax expense | 3 389 | 1 639 | (996) |
| Income from cash and cash equivalents | (102) | (363) | (22) |
| Profit/(loss) for the period | 3 287 | 1 276 | (1 018) |
| Profit/(loss) for the period attributable to equity holders | 3 287 | 1 276 | (1 018) |
| Minority interests | - | - | - |
| Basic earnings/(loss) per share (in €) | 0,008 | 0,003 | (0,003) |
| Diluted earnings/(loss) per share (in €) | 0,008 | 0,003 | (0,003) |
Consolidated balance sheet
| ASSETS | |||
| (Euro 000) | 31/03/2009 | 31/03/2008 | 31/03/2007 |
| Non-current assets | |||
| Goodwill | 3 074 | 2 556 | 2 995 |
| Intangible assets (net) | 1 149 | 750 | 578 |
| Property, plant and equipment (net) | 13 465 | 3 726 | 1 731 |
| Long-term financial assets | 1 582 | 1 859 | 1 491 |
| Investments in associates | 461 | 701 | 845 |
| Deferred taxes | 299 | 240 | 219 |
| Total non-current assets | 20 030 | 9 832 | 7 859 |
| Current assets | |||
| Inventories | 26 448 | 18 574 | 19 279 |
| Trade receivables | 8 507 | 11 344 | 9 949 |
| Other receivables | 6 785 | 11 291 | 3 327 |
| Tax | 634 | 808 | 867 |
| Cash and cash equivalent | 29 588 | 24 483 | 35 908 |
| Total current assets | 71 962 | 66 500 | 69 330 |
| Total assets | 91 992 | 76 332 | 77 189 |
| LIABILITIES | |||
| (Euro 000) | 31/03/2009 | 31/03/2008 | 31/03/2007 |
| Equity | |||
| Share capital | 21 231 | 21 231 | 21 231 |
| Additional paid-in capital | 967 | 967 | 967 |
| Treasury shares | (1 002) | (1 003) | (5) |
| Equity component of convertible bonds | 2 425 | 1 904 | 1 904 |
| Fair value of hedging instruments | 0 | 0 | 0 |
| Reserves | (3 167) | (4 908) | (4 039) |
| Cumulative translation adjustment | (213) | (3 509) | (1 251) |
| Profit/(loss) for the period | 3 287 | 1 276 | (1 018) |
| Equity attributable to equity holders | 23 528 | 15 958 | 17 789 |
| Minority interests | - | ||
| Non-current liabilities | |||
| Convertible bonds (long-term portion) | 13 893 | 21 424 | 20 856 |
| Long-term borrowings | 26 | 30 | 0 |
| Long-term finance lease liabilities | 201 | 157 | 133 |
| Deferred taxes | 27 | 23 | 19 |
| Long-term provisions for pension and other post-employment benefits | 6 266 | 6 046 | 6 170 |
| Total non-current liabilities | 20 413 | 27 680 | 27 179 |
| Current liabilities | |||
| Trade accounts payable | 9 611 | 9 259 | 7 037 |
| Other payables | 9 976 | 10 848 | 8 967 |
| Short-term tax liabilities | 261 | 389 | 545 |
| Short-term provisions for contingencies and charges | 2 892 | 8 228 | 11 057 |
| Convertible bonds (short-term portion) | 23 601 | 1 543 | 1 544 |
| Short-term borrowings | 1 536 | 2 149 | 2 830 |
| Short-term finance lease liabilities | 174 | 278 | 242 |
| Total current liabilities | 48 051 | 32 694 | 32 221 |
| Total equity and liabilities | 91 992 | 76 332 | 77 189 |
Consolidated statement of cash flows
| (Euro 000) | 31/03/2009 | 31/03/2008 (*) | 31/03/2007 |
| I - Activités Opérationnelles | |||
| I - Cash flow from operating activities | 3 287 | 1 276 | (1 018) |
| Profit/(loss) for the period before tax | 1 510 | 974 | 1 119 |
| Depreciation, amortization and impairment | (9) | ||
| Unrealized gains and losses from changes in fair value | (4 764) | (2 918) | (8 000) |
| Insurance indemnity dedicated to captial expenditures (2) | (2 564) | (1 451) | - |
| Net interest expense | 2 465 | 2 132 | 1 906 |
| Gains and losses on disposals of assets | 406 | 354 | (653) |
| Tax expense/(income) | (244) | (74) | 190 |
| (Income)/loss from associates, net of dividends received | 241 | 144 | (209) |
| Cash flow from operations | 339 | 437 | (6 674) |
| Change in inventories and work in progress | (6 561) | 128 | 1 676 |
| Change in trade accounts receivable | 3 192 | (1 166) | 3 673 |
| Change in other receivables (3) | (1 455) | (8 030) | 972 |
| Change in trade accounts payable | 21 | 2 357 | 2 171 |
| Change in other payables | (1 075) | 1 633 | (1 980) |
| Change in operating working capital requirement | (5 878) | (5 078) | 6 512 |
| NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES | (5 538) | (4 641) | (162) |
| II - Activités d'investissement | |||
| Development expenditure | (986) | (772) | (450) |
| Acquisitions of property, plant and equipment (net of insurance indemnity) | (2 221) | (1 515) | (1 731) |
| Acquisitions of investments | (174) | (371) | (79) |
| Cash used in investing activities | (3 382) | (2 658) | (2 260) |
| Proceeds from disposals of intangible assets | - | 200 | - |
| Proceeds from disposals of property, plant and equipment | - | - | 16 |
| Proceeds from disposals of investments | 711 | 83 | 34 |
| Cash provided by divestments | 711 | 283 | 50 |
| FLUX DE TRESORERIE PROVENANT DES ACTIVITES D'INVESTISSEMENT | (2 671) | (3 826) | (2 210) |
| III - Cash flows from financing activities | |||
| Issue of share capital | - | - | 41 154 |
| Purchases of S.T.Dupont shares | - | (1 000) | 19 |
| Increase in borrowings | 15 449 | 623 | 430 |
| Current account advances from the majority shareholder | - | - | (7 000) |
| Repayments of borrowings | (191) | (616) | (3 913) |
| Interest paid | (2 105) | (2 129) | (2 036) |
| Overdrafts | - | - | (220) |
| NET CASH GENERATED FROM FINANCING ACTIVITIES | 13 153 | (3 122) | 28 434 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 749 | (1 333) | (285) |
| Net change in cash and cash equivalents | 5 691 | (11 471) | 25 777 |
| Cash and cash equivalents at beginning of year | 23 471 | 34 942 | 9 165 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 29 162 | 23 471 | 34 942 |
| Net change in cash and cash equivalents | 5 691 | (11 471) | 25 777 |
(*) : The cash-flow statement as at march, 31, 2008, has been restated in order to show the impact of the fire and the insurance indemnity in the same presentation as at march, 31, 2009.
1 : Net profit before tax as at March, 31, 2009, includes €16 024 thousand coming from insurance indemnity (€11 183 thousand as at March, 31, 2008)
2 : indemnity from insurance company accrued as at March, 31, 2008 and amounting €6 182 thousand being too low to cover the €8 746 thousand paid during the year for reconstruction, the remaining has been taken from operational cash flow that includes €16 024 thousand of indemnity.
3 : change in other receivables has been restated by €6 182 thousand representing the accrued indemnity as at March, 31, 2008.