Press ReleaseJuly, 2, 2010
CONSOLIDATED RESULTS FOR THE YEAR ENDED MARCH, 31, 2010
Strong resistance in sales despite the economical crisis (-3.1%).
Major decrease in inventories (-8.4 M€)
Restructuring had been implemented in the 4th quarter and will bear its full effect in 2010-2011
Excluding non recurring items, EBIT improves by +4.5 M€.
Net result for the year: - 8.8 M€ (vs. + 3.3 M€ as at March, 31, 2009).
Key indicators for the year ended march, 31, 2010 are as follows:
| Euros million | 31/03/2010 | 31/03/2009 |
| Sales (products) | 54.5 | 56.2 |
| Sales (total) | 60.0 | 61.3 |
| Gross Margin | 29.4 | 32.0 |
| ( % ) | 49.0% | 52.2% |
| EBIT | (4.6) | 5.1 |
| Financial expenses | (1.4) | (1.8) |
| Net result | (8.8) | 3.3 |
| Net result per share (€) | (0.021) | 0,008 |
| Net financial Resources/(Debt) | (11.0) | (9,8) |
| Equity | 15.0 | 23,5 |
Despite the economical crisis, sales are increasing (6.5%) in markets where we operate directly or via a subsidiary (Western Europe and Asia). This is noticeable for France (+16.0%), Western Europe (+10.5%) or in the Hong-Kong/China area (+8.6%).
On the contrary, in countries where we operate through distributors, we suffered from the financial crisis or the high level of inventory in our distributors' hands (Eastern Europe and Middle-East) that shows a -23.6% decrease in sales. In order to cope with this high level of inventory, distributors tended to decrease, or even stop, their purchases. This is especially true for Russia (-92%), Middle-East (-29%) or Eastern Europe (-24%).
We noticed the beginning of a recovery for these markets as from early 2010, together with the continuation of the previous trends on other markets.
Per sector of business, the launches of new products (Défi pens, Défi leather goods) were a real success. Overall, sales increase for lighter and pens is +5.5% while leather goods and accessories decreased by -11.0% as Russia and Middle East are two major markets for this sector of business.
Results:
The 2 years are not really comparable because of non recurring items. As a matter of facts, last year results included a profit on insurance indemnity (+10.5 M€), the end of a litigation with a distributor (1.9 M€) while 2009-2010 includes the cost of restructuring implemented during the 4th quarter (-1.8 M€).
Excluding non recurring items and taking into accounts the decrease in overheads, EBIT shows a +4.5 M€ increase from one year to another.
- Gross margin percentage is decreasing because of under-activity, low level of sales that impacted the absorption of fixed costs and the sales promotion due to the decrease in inventory.
- Overheads have been significantly cut (-18 %).
- Restructuring (head office and plant) has been implemented on a volunteers basis. The major impact will be in 2010-2011. This plan aimed at cutting costs by 6 M€ on a full year basis.
EBIT amounts -4.6 M€ (vs. +5.1 M€ last year).
The consolidated loss amounts -8.8 M€ (vs. +3.3 M€ as at March, 31, 2009).
Decrease in inventory
Actions implemented in 2009-2010 led to a -M€ decrease in inventory, especially for finished goods (-35%) and components and raw materials (-27%). As at March, 31, 2010, the level of inventory is satisfactory regarding lighters and pens, it must continue to decrease for leather goods, accessories and components. Actions on the level of inventory will continue in 2010-2011.
This decrease in inventory has been achieved to the use of part-time unemployment in the plant combined with sales promotion operations that negatively impacted the gross margin, although in a limited way
Financing
Financing has been reinforced through the implementation of a factoring line of credit amounting 2.3 M€ maximum.
Based on our cash flow projections, the existing cash as at march, 31, 2010 and the support from our main shareholder (1.0 M€), we do think that the financing of our operations is secured for the next 12 months.
Contact Analystes : 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
1. Consolidated income statement
| (Euros 000) | 31/03/2010 | 31/03/2009 |
| Net product sales | 54 474 | 56 194 |
| Other revenue | 5 539 | 5 116 |
| Total sales | 60 013 | 61 310 |
| Cost of sales | (30 623) | (29 286) |
| Gross margin | 29 390 | 32 024 |
| Communication expenses | (3 117) | (6 454) |
| Selling expenses | (13 926) | (14 514) |
| Overheads and administrative expenses | (15 490) | (18 533) |
| Other expenses | (3 782) | (8 071) |
| Other income | 2 295 | 20 670 |
| Impairment | 0 | 10 |
| EBIT | (4 629) | 5 132 |
| Income from cash and cash equivalents | 283 | 349 |
| Finance costs, gross | (1 672) | (2 105) |
| Finance costs, net | (1 389) | (1 756) |
| Other financial income and expense, net | (1 440) | 254 |
| Income/(loss) from associates | (506) | (241) |
| Income tax expense | (7 965) | 3 389 |
| Income from cash and cash equivalents | (862) | (102) |
| Profit/(loss) for the period | (8 826) | 3 287 |
| Profit/(loss) for the period attributable to equity holders | (8 826) | 3 287 |
| Minority interests | - | - |
| Basic earnings/(loss) per share (in €) | (0.021) | 0.008 |
| Diluted earnings/(loss) per share (in €) | (0.014) | 0.008 |
2. Consolidated balance sheet
| ASSETS | ||
| (Euro 000) | 31/03/2010 | 31/03/2009 |
| Non-current assets | ||
| Goodwill | 3 003 | 3 074 |
| Intangible assets (net) | 783 | 1 149 |
| Property, plant and equipment (net) | 13 542 | 13 465 |
| Long-term financial assets | 1 305 | 1 582 |
| Investments in associates | 7 | 461 |
| Deferred taxes | 281 | 299 |
| Total non-current assets | 18 922 | 20 030 |
| Current assets | ||
| Inventories | 17 938 | 26 448 |
| Trade receivables | 7 482 | 8 507 |
| Other receivables | 4 144 | 6 785 |
| Tax | 317 | 634 |
| Cash and cash equivalent | 6 392 | 29 588 |
| Total current assets | 36 272 | 71 962 |
| Total assets | 55 194 | 91 992 |
| LIABILITIES | ||
| (Euro 000) | 31/03/2010 | 31/03/2009 |
| Equity | ||
| Share capital | 21 238 | 21 231 |
| Additional paid-in capital | 981 | 967 |
| Treasury shares | (1 002) | |
| Equity component of convertible bonds | 2 425 | 2 425 |
| Fair value of hedging instruments | 0 | 0 |
| Reserves | (561) | (3 167) |
| Cumulative translation adjustment | (276) | (213) |
| Profit/(loss) for the period | (8 826) | 3 287 |
| Equity attributable to equity holders | 14 981 | 23 528 |
| Minority interests | - | |
| Non-current liabilities | ||
| Convertible bonds (long-term portion) | 14 026 | 13 893 |
| Long-term borrowings | 21 | 26 |
| Long-term finance lease liabilities | 80 | 201 |
| Deferred taxes | 195 | 27 |
| Long-term provisions for pension and other post-employment benefits | 5 214 | 6 266 |
| Total non-current liabilities | 19 536 | 20 413 |
| Current liabilities | ||
| Trade accounts payable | 6 377 | 9 611 |
| Other payables | 8 333 | 9 976 |
| Short-term tax liabilities | 205 | 261 |
| Short-term provisions for contingencies and charges | 2 540 | 2 892 |
| Convertible bonds (short-term portion) | 1 502 | 23 601 |
| Short-term borrowings | 1 449 | 1 536 |
| Short-term finance lease liabilities | 270 | 174 |
| Total current liabilities | 20 677 | 48 051 |
| Total equity and liabilities | 55 194 | 91 992 |
3. Consolidated statement of cash flows
| (euros 000) | 31/03/2010 | 31/03/2009 |
| I - Operations | ||
| I - Cash flow from operating activities | (8 826) | 3 287 |
| Profit/(loss) for the period before tax | 1 788 | 1 510 |
| Unrealized gains and losses from changes in fair value | (1 405) | (4 764) |
| Insurance indemnity dedicated to capital expenditures (2) | 0 | (2 564) |
| Net interest expense | 1 498 | 2 465 |
| Gains and losses on disposals of assets | 557 | 406 |
| Tax expense/(income) | 457 | (244) |
| (Income)/loss from associates, net of dividends received | 506 | 241 |
| Cash flow from operations | (5 424) | 339 |
| Change in inventories and work in progress | 8 317 | (6 561) |
| Change in trade accounts receivable | 1 060 | 3 192 |
| Change in other receivables (3) | 2 653 | (1 455) |
| Change in trade accounts payable | (3 243) | 21 |
| Change in other payables | (1 368) | (1 075) |
| Change in operating working capital requirement | 7 418 | (5 878) |
| NET CASH GENERATED FROM/(USED IN) OPERATING ACTIVITIES | 1 994 | (5 538) |
| II - Investments | ||
| Development expenditure | (262) | (986) |
| Acquisitions of property, plant and equipment (net of insurance indemnity) | (1 818) | (2 221) |
| Acquisitions of investments | 277 | (174) |
| Cash used in investing activities | (1 802) | (3 382) |
| Proceeds from disposals of intangible assets | 0 | - |
| Proceeds from disposals of property, plant and equipment | - | |
| Proceeds from disposals of investments | 31 | 711 |
| Cash provided by divestments | 31 | 711 |
| FLUX DE TRESORERIE PROVENANT DES ACTIVITES D'INVESTISSEMENT | (1 771) | (2 671) |
| III - Cash flows from financing activities | ||
| Issue of share capital | - | |
| Purchases of S.T.Dupont shares | - | |
| Increase in borrowings | 293 | 15 449 |
| Repayments of borrowings | (22 630) | - |
| Interest paid | (1 543) | (191) |
| Other | (154) | (2 105) |
| Overdrafts | 158 | - |
| NET CASH GENERATED FROM FINANCING ACTIVITIES | (24 875) | 13 153 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 297 | 749 |
| Net change in cash and cash equivalents | (23 354) | 5 691 |
| Cash and cash equivalents at beginning of year | 29 162 | 23 471 |
| Effect of exchange rate fluctuations on cash and cash equivalents | 5 808 | 29 162 |
| Net change in cash and cash equivalents | (23 354) | 5 691 |