A.S. Creation Tapeten AG

Earnings Release • Mar 22, 2012

News Details

Corporate | 22 March 2012 10:06

A.S. Création Tapeten AG: Unsatisfactory profitability in FY 2011

A.S. Création Tapeten AG / Key word(s): Final Results

22.03.2012 / 10:06

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A.S. Création Tapeten AG, Gummersbach

(ISIN DE0005079909)

Unsatisfactory profitability in FY 2011

Sales revenues hit new record

2011 was another fiscal year in which A.S. Création was able to increase its Group revenues. At EUR 192.3 million, sales revenues were up by 4.1% on the previous year's EUR 184.6 million. This was a much more dynamic increase than the previous year's 1.8%. Growth was primarily driven by the German market, non-EU Eastern European countries and some Asian markets, especially China, where the intensified product development activities had a positive effect. By contrast, sales growth in the EU (excluding Germany) was unsatisfactory, especially in France market, where demand was weak in 2011.

Adverse impacts on the bottom line

In spite of the increase in sales, earnings fell short of expectations. A.S. Création generated a net profit of EUR 4.6 million in FY 2011, down 44.6% on the previous year's EUR 8.4 million, which means that the decline was much higher than provided for in the 2011 forecast. This is primarily attributable to the sharp rise in commodity and energy prices. The increase in some of our product prices, which was imposed with effect from March 1, 2011, was insufficient from today's point of view. Accordingly, the gross profit margin reached only 45.8%, down on the previous year's 48.5%. Based on the total output of EUR 193.5 million for the full year 2011, this translates into a gross profit shortfall of EUR 5.2 million. The costs incurred in conjunction with the start-up of the Russian production facility also weighed on the bottom line.

Sound financial position

As expected, capital expenditures reached a very high level. Following the majority takeover of two French wallpaper wholesalers in 2008, the remaining shares were acquired in 2011 as agreed. Together with the start-up of the wallpaper production facility in Russia, this led to capital expenditures of EUR 19.7 million in FY 2011, up EUR 12.9 million on the previous year's EUR 6.8 million. As A.S. Création's financial resources were insufficient to finance the unusually high capital expenditures, net financial liabilities increased to EUR 29.4 million as of December 31, 2011 (2010: EUR 16.3 million). A high equity ratio of 56.9% (2010: 54.9%) and a low leverage of 32.9% (2010: 18.3%) show that the financial structure of A.S. Création remains very sound.

Consistent dividend policy

In spite of the uncertain conditions prevailing in 2012 and the financing requirements resulting from the start-up of production in Russia, A.S. Création will maintain its dividend policy, which provides for a high payout ratio as long as this is warranted by the company's financial situation. We will therefore propose to the Annual General Meeting to pay out a dividend of EUR 0.75 (2010: EUR 1.35) per share. With regard to earnings per share, this represents a consistent payout ratio of 44.4% (2010: 44.3%). The decline in the absolute dividend amount reflects the deterioration in the company's earnings position.

Improved earnings position anticipated for 2012

The Managing Board expects the market environment to remain difficult in 2012, marked by rising commodity and energy prices. In such an environment, both divisions should expand their respective market positions, with Group revenues of between EUR 195 million and EUR 205 million projected for 2012. The Russian wallpaper production facility is scheduled to take up service in autumn 2012. Due to the investments that will be required up to this date, capital expenditures are expected to total EUR 13 million in 2012, which is above the normal level. In spite of the expected start-up losses in Russia and the adverse impact the commodity and energy prices will have on the bottom line, a consolidated net profit of between EUR 6.0 million and EUR 7.0 million is projected for 2012. The expectation of higher earnings is based on the spring 2012 increase in sales prices and an improved overall product range.

The Group's key figures for 2011 at a glance:

		2011	2010	Change
Sales	EUR '000	192,262	184,603	4.1 %
Earnings before interest and taxes (EBIT)	EUR '000	9,587	14,318	– 33.0 %
Earnings before income taxes	EUR '000	7,325	12,352	– 40.7 %
Net profit	EUR '000	4,650	8,395	– 44.6 %
Earnings per share	EUR/share	1.69	3.05	– 44.6 %
Cash-flow	EUR '000	14,338	19,027	– 24.6 %
Capital expenditures	EUR '000	19,667	6,826	188.1 %
Depreciation	EUR '000	9,933	10,504	– 5.4 %
Number of employees (average)		796	772	3.1 %

Gummersbach, March 22, 2012

A.S. Création Tapeten AG

The Managing Board

Contact:

Maik Krämer

CFO

Südstr. 47

D-51645 Gummersbach

phone + 49 – (0)22 61/542-387

fax + 49 – (0)22 61/542-304

e-mail: m.kraemer@as-creation.de

The 2011 Annual Report is available at www.as-creation.de or from:

A.S. Création Tapeten AG

Frau Börngen

Südstraße 47

D – 51645 Gummersbach

phone +49-(0)22 61/542-350

e-mail investor@as-creation.de

End of Corporate News

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Language:	English
Company:	A.S. Création Tapeten AG
	Südstraße 47
	51645 Gummersbach
	Germany
Phone:	+49 22 61 54 2-0
Fax:	+49 22 61 54 2-3 04
E-mail:	investor@as-creation.de
Internet:	http://www.as-creation.de
ISIN:	DE0005079909
WKN:	507990
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of News	DGAP News-Service

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