United Labels AG

Earnings Release • Mar 30, 2004

News Details

Ad-hoc | 30 March 2004 09:17

UNITEDLABELS posts results comparable to FY 2002

Ad-hoc-announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– – Year-on-year revenue increase of 4.3% – Above-par cash flow from operating activities – Order backlog increases by 67% year on year (Münster, March 30, 2004) – UNITEDLABELS AG (DE 0005489561), an enterprise specialising in comicware sold under licence, recorded consolidated revenues of EUR 36.2 million in the 2003 financial year (FY 2002: EUR 34.7 million). This corresponds to sales growth of 4.3% compared with the preceding financial year. Earnings before interest and taxes (EBIT) amounted to minus EUR 0.4 million (FY 2002: EUR 0.1 million), while the net loss stood at EUR 1.0 million (FY 2002: net loss of EUR 1.1 million). The result is attributable to a substantial decline in business with specialist retailers and the concomitant write-down of inventories. Performance was also influenced by the roll-out of the company’s “Best Of…” product line. Cash flow from operating activities improved by EUR 1.9 million to EUR 0.8 million (FY 2002: minus EUR 1.1 million). The order backlog, i.e. orders in hand, as at December 31, 2003, was EUR9.0 million (FY 2002: EUR5.4 million). This represents an increase of 67%. The company is confident that the first quarter of 2004 will produce revenue growth and a substantial improvement in earnings compared with the same period a year ago. The revenue target for the full 2004 financial year stands at approx. EUR 37 million, while EBIT is expected to be approx. EUR 1 million. For further information, please visit http://www.unitedlabels.com or contact: Katarina Orlovic – Investor & Public Relations – Tel.: +49 (0) 251-3221-406 korlovic@unitedlabels.com end of ad-hoc-announcement (c)DGAP 30.03.2004 Issuer’s information/explanatory remarks concerning this ad-hoc-announcement: – Year-on-year revenue increase of 4.3% / – Above-par cash flow from operating activities /- 106% increase in share price (Münster, March 30, 2003) – UNITEDLABELS AG (DE 0005489561), a specialist in comicware sold under licence, generated revenues of EUR 36.2 million in the 2003 financial year (FY 2002: EUR 34.7 million). This corresponds to sales growth of 4.3% compared with the preceding financial year. Earnings before interest and taxes (EBIT) amounted to minus EUR 0.4 million (FY 2002: EUR 0.1 million), while the net loss stood at EUR 1.0 million (FY 2002: net loss of EUR 1.1 million). The result is attributable to a substantial decline in business with specialist retailers and the associated write-down of inventories. “Traditional comicware merchandise saw a pronounced shift away from specialist retailers towards the key account segment over the course of the 2003 financial year,” said Peter M. Boder, CEO of United Labels AG. The premium “Best of Mickey” and “Best of Snoopy” chinaware range is expected to bolster UNITEDLABELS’ business within the specialist retail segment. In “Best of”, UNITEDLABELS has established a licensed product range which, for the first time, will be sold not only in Europe but also in other countries throughout the world. Within the Group, the equity ratio remained solid at 71.1%. Cash flow from operating activities improved by EUR 1.9 million to EUR 0.8 million (FY 2002: minus EUR 1.1 million).”A solid financial base is essential if we are to implement key strategic decisions for growth and profitability with the necessary conviction,” said Boder. The order backlog, i.e. orders in hand, as at December 31, 2003, was EUR9.0 million (FY 2002: EUR5.4 million). This represents an increase of 67%. The company is confident that the first quarter of 2004 will produce revenue growth and a substantial improvement in earnings compared with the same period a year ago. Boder: “The start to the new financial year has been very encouraging. Of course, there are another three quarters to go, and the consumer goods market is extremely dynamic. Having said that, we are well equipped to take on the challenge.” The revenue target for the full 2004 financial year stands at approx. EUR 37 million, while EBIT is expected to be approx. EUR 1 million. “Our main priority for the coming year is earnings, rather than growth. And, on the whole, growth in earnings is not to be found in revenues but in the avoidance of inventory- related risks within the specialist retail segment,” the CEO explained. -Foreign subsidiaries with improved performance – The foreign subsidiaries of UNITEDLABELS AG recorded improved financial results in 2003. Restructuring measures implemented at the Belgian subsidiary Colombine b.v.b.a. have already borne fruit, and Spanish-based UNITEDLABELS Iberica posted bottom-line results that were substantially above par. “Our consolidated financial results are dependent, to a large extent, on the performance of our foreign subsidiaries. We are not quite where we want to be, but we definitely took a giant step forward in 2003,” said Boder. -Huge market potential thanks to premium “Best of” brand – The newly launched high-end chinaware range “Best of” is UNITEDLABELS AG’s defiant challenge to the current sluggishness witnessed in the fast-moving consumer goods segment. The prospects for this pioneering brand appear to be excellent, given its success at the initial unveiling in Frankfurt towards the end of 2003 and at subsequent international trade fairs. In “Best of”, UNITEDLABELS AG has established a gateway to the global distribution of comicware sold under licence. “The start-up investments for our own label were implemented in 2003, and with this in mind the new financial year provides us with a perfect launch pad for accelerated business within the international arena,” said Peter M. Boder, CEO of UNITEDLABELS AG. He continued: “Germany is currently having to wrap up warmly in a consumer climate that is decidedly chilly. Therefore, the logical step for us is to seize the sales opportunities presented to us within the international domain.” In 2004, UNITEDLABELS’ “Best of” label will be represented in 22 countries worldwide, including Europe, China, Japan, Malaysia, Singapore and Russia. Boasting a high-end product range, UNITEDLABELS AG has now also gained access to a new customer segment comprising specialist glassware and chinaware retailers. “The success of the ‘Best of’ range points to the outstanding potential and sustainable impact of our brand within the international arena,” said the company’s CEO. -106% increase in share price – UNITEDLABELS AG’s share price more than doubled over the course of 12 months, registering a 106% increase in 2003 and closing at EUR 2.14. This trend continued unabated in the first months of 2004, with shares yet again almost doubling in market value. “The capital markets are beginning to acknowledge our business potential, and this has translated into price gains as well as a substantial increase in trading volumes. And I am confident that our shares have what it takes to maintain their forward momentum,” said Boder. -Primed for international success – The global market for products sold under licence has regained its footing, recording sales growth of 4.3% in 2002 despite the ongoing economic malaise. In contrast, 2001 had produced a 6.7% decline in aggregate sales. Forecasts for 2003 predicted slightly above-par growth for products sold under licence. However, authoritative figures are not yet available for the year just ended. UNITEDLABELS also succeeded in further enhancing its sales presence, achieving 4.3% revenue growth and an increase in its export ratio from 65% to 69%. The general retro trend witnessed throughout the market also proved to be particularly successful in licensed-product business. Major anniversaries within the world of cartoons – Mickey Mouse, for example, celebrated his 75th birthday – clearly contributed to this development. Other key anniversaries include the Pink Panther, who will be celebrating his 50th birthday, and Sesame Street, which was launched in the US 35 years ago. UNITEDLABELS AG will be participating in special promotional events in close cooperation with licensors and retail partners. Over the last two years, the market has been witnessing a growing trend towards well-established cartoon characters. The success of these licence characters bears testimony to the fact that long-standing licence themes – the basis of UNITEDLABELS AG’s business model – are becoming increasingly important within this sector. -UNITEDLABELS AG is one of Europe’s leading specialists for comicware sold under licence. The licensing partners working in cooperation with the independent media company include global players from the world of media and entertainment, such as Disney, Time/Warner, and 20th Century Fox. UNITEDLABELS is able to reach all age groups within the European market of licensed products, thanks to its successful portfolio of well-established classics, such as Snoopy and Sesame Street, and popular stars like The Simpsons and Bob the Builder. The company has already established the most comprehensive sales network for comicware in Europe, accessing more than 370 million European consumers via 4,800 retail partners. -For further information please visit www.unitedlabels.com or contact: Katarina Orlovic – Investor & Public Relations – Tel.: +49 (0) 251-3221-406, E-mail: korlovic@unitedlabels.com ——————————————————————————– WKN: 548956; ISIN: DE0005489561; Index: Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 300917 Mär 04