A.S. Création Tapeten AG / Key word(s): Half Year Results/Quarter Results
11.08.2014 / 08:15
A.S. Création Tapeten AG, Gummersbach
(ISIN DE000A1TNNN5)
A.S. Création reports decline in revenues and earnings
A.S. Création Tapeten AG, Europe’s leading wallpaper manufacturer, today published the interim report for the period ended June 30, 2014. A summary is provided below:
Weak sales revenues in Q2 2014
While A.S. Création had been able to maintain sales revenues at the prior year level in the first three months of 2014, as the reduction in revenues in non-EU Eastern European countries was offset by strong revenue growth in the EU, this was no longer possible in the second quarter of 2014. One of the main reasons was the very poor state of the French (wallpaper) market, which is of great importance for A.S. Création. This had not been expected by the company. The difficult situation in Russia and Ukraine continues to have an adverse impact on A.S. Création’s revenues, as the decline in consumer spending in combination with the depreciation of the local currencies against the euro leads to lower demand for A.S. Création’s German-made wallpapers. On the upside, the strongly growing sales of Russian-made wallpapers are increasingly offsetting the drop in export sales. While Group sales revenues in non-EU Eastern European countries were down by 20.6% on the prior year level in the first quarter of 2014, this gap had narrowed to only 4.9% in the second quarter. At EUR 99.5 million, total Group sales revenues in the first six months of 2014 were down 5.0% on the previous year’s EUR 104.8 million. The Managing Board is not satisfied with this performance.
Positive signals in spite of lower earnings
The reduction in sales revenues had an adverse impact on A.S. Création’s bottom line in the first half of 2014. Earnings before taxes declined by 31.6% from EUR 7.2 million in the previous year to EUR 4.9 million in the reporting period. This reduction in earnings is not satisfactory. Compared to the first quarter of 2014, however, during which earnings before taxes dropped by 51.7%, there have been some initial positive signs. For instance, the gross profit margin again exceeded the prior year level in the second quarter of 2014 and the rationalisation and cost-cutting measures initiated by the company are reflected in declining operating expenses. Moreover, the measures taken to strengthen the distribution of Russian-made products are showing effect and have led to improved utilisation of the Russian production capacities. Accordingly, the start-up losses of the company declined notably in the second quarter. The Managing Board therefore believes that the Russian production company is on the right track.
The improvements achieved in the second quarter of 2014 were insufficient to offset the sharp drop in earnings of the first quarter, however. Accordingly, A.S. Création reported a reduction in total first-half earnings. The Managing Board will therefore continue to focus on improving the cost structures in the coming months.
Earnings forecast confirmed
In view of the bleaker economic outlook for the EU and the great uncertainty arising from the intensifying crisis in Ukraine, the Managing Board currently assumes that the company will be unable to realise its revenue plans for the fiscal year 2014. Instead, sales revenues are expected to decline to between EUR 180 million and EUR 190 million from today’s point of view. By contrast, earnings for the second half of 2014 should improve notably compared to the previous year, as the second half of 2013 was adversely affected by extraordinary factors. The Managing Board therefore continues to assume that A.S. Création’s net profit for the year 2014 will be much higher than the previous year’s net profit, provided that no extraordinary factors similar to those of the previous year occur.
The Group’s key figures for the first six months of 2014 are summarised below:
|
|
01.01.-30.06. |
01.01.-30.06. |
Change |
|
|
2014 |
2013 |
|
Sales |
EUR ‘000 |
99,501 |
104,756 |
-5.0 % |
Earnings before interest and taxes (EBIT) |
EUR ‘000 |
6,516 |
9,498 |
-31.4 % |
Earnings before taxes |
EUR ‘000 |
4,894 |
7,152 |
-31.6 % |
Net profit |
EUR ‘000 |
2,658 |
4,183 |
-36.5 % |
Earnings per share |
EUR/share |
0.96 |
1.52 |
-36.8 % |
Cash flow |
EUR ‘000 |
8,507 |
10,415 |
-18.3 % |
Capital expenditures |
EUR ‘000 |
3,191 |
5,774 |
-44.7 % |
Depreciation |
EUR ‘000 |
4,728 |
4,630 |
2.1 % |
Number of employees (average) |
|
825 |
833 |
-1.0 % |
Gummersbach, August 11, 2014
A.S. Création Tapeten AG
The Managing Board
Inquiries:
Maik Krämer, Director of Finance and Controlling, phone +49-(0)22 61/542-387, fax +49-(0)22 61/542-304,
e-mail m.kraemer@as-creation.de
The full 6-month report is available at:
www.as-creation.de
or from:
A.S. Création Tapeten AG, Frau Börngen, Südstr. 47, D – 51645 Gummersbach, phone: +49-(0)22 61/542-350,
e-mail: investor@as-creation.de