• EBIT down to 0.5 million euros
• Positioning in Eastern Europe further strengthened
• Andreas Zois CFO effective November 1
• Positive results expected for 2008/09
Fiscal 2007/08 was an important year for the HIRSCH Servo Group in our effort to realign activities for the future. It was also one where we were under considerable pressure in the form of the difficult market environment, the fire at our warehouse in Wroclaw and urgently needed investments in the future that have not yet started to bear fruit. Total sales are down to 100.0 MEUR because of delays in payments for project contracts (previous year: 104.7 MEUR). The operating profit (EBIT) dropped to 0.5 MEUR (PY: 4.7 MEUR) and the profit on ordinary activities (POA) to -3.1 MEUR (PY: 3.8 MEUR). Compared with the previous year, the EPS Processing business segment succeeded in increasing sales. The Technology business segment however reported the lowest sales in nine years. Our 10.2 MEUR investment program focused on EPS Processing.
The two divisions EPS Packaging and EPS Insulation in the EPS Processing business segment increased the EBIT by 1.5 MEUR to 3.6 MEUR (PY: 2.1 MEUR) despite depreciation and amortization rising by 1.6 MEUR and Group charges up 1.2 MEUR. Sales in EPS Processing improved by 17% to 80.8 MEUR (PY: 69.3 MEUR) and accounted for 81% (PY: 66%) of the HIRSCH Servo Group's total sales. In the EPS Packaging division sales were up 12% to 37.3 MEUR (PY: 33.3 MEUR) and up 21% to 43.5 MEUR in the EPS Insulation division (PY: 36.0 MEUR). Around 60% of the strong growth in EPS Insulation was generated by the increase in output at the plant in Romania, 25% in Austria and 15% in Hungary.
Sales in the Technology business segment (previously Machinery and Plant Engineering) were down 46% to 19.1 MEUR (PY: 35.2 MEUR). Molding machines in particular were affected, showing a sharp decline of 61%. The drop in sales is primarily due to the weak US dollar, the financial and real estate crisis, and consolidations in the US processing market. EBIT fell 5.7 MEUR to minus 3.1 MEUR (PY: 2.6 MEUR). The main reasons for the lower EBIT are the reduction in sales, which affected the operating result to the tune of around 5 MEUR, and adjustments of approximately 1 MEUR.
Due to our investments in the future and income that is still relatively low, the Logistics business segment achieved break-even EBIT.
The annual net income fell to -2.8 MEUR (PY: 2.8 MEUR) and the earnings per share to -5.55 euros (PY: 5.78 euros).
Cash flow from operating activities rose to 6.1 MEUR (PY: -2.7 MEUR).
At the reporting date June 30, 2008, the HIRSCH Servo Group employed 719 people. The annual average rose to 720 (PY: 604 people) with growth mainly occurring in Eastern Europe and Austria due to capacity expansion.
We invested a total of 10.2 MEUR (PY: 18.3 MEUR), of which 7.8 MEUR was used for EPS Processing. Investment in Poland accounted for a large part of the sum, 3.2 MEUR, of which 1.7 MEUR went on rebuilding the Wroclaw warehouse that burnt down in October 2007 and was paid for by the insurance. We also invested around 1 MEUR each in the development of the pallet project and expansion of the Group's IT infrastructure.
At the 13th Annual General Meeting, the Board will submit a proposal to carry forward the balance sheet profit of 684,285.55 euros to the next fiscal year and not to distribute a dividend (PY: 2.35 euros).
Andreas Zois new CFO effective November 1
Andreas Zois will take up his post as chief financial officer on November 1, 2008. A fifth member will not be appointed to the Board as originally planned for economic reasons. Following completion of the annual report work, Dr. Carsten Brinkmeier's management contract will be terminated prematurely (termination effective December 31, 2008) to reduce our fixed costs as quickly as possible but he will continue to work for the HIRSCH Servo Group as a consultant. Dr. Brinkmeier will therefore still provide support for the company in the pallet project and selected areas of technology.
Fiscal year 2007/08
|
|
Fiscal year |
Fiscal year |
Change |
|
Sales |
104,652 |
99,994 |
-4 |
|
EPS Processing |
69,307 |
80,831 |
+17 |
|
Technology |
35,235 |
19,054 |
-46 |
|
Other activities |
110 |
110 |
- |
|
POA |
3,845 |
-3,109 |
- |
|
EBITDA |
10,028 |
7,435 |
-26 |
|
EBIT |
4,745 |
473 |
-90 |
|
EPS Processing |
2,067 |
3,564 |
+72 |
|
Technology |
2,628 |
-3,147 |
- |
|
Other activities |
50 |
56 |
+12 |
|
Annual net income |
2,833 |
-2,770 |
- |
|
Earnings per share (in EUR) |
5.78 |
-5.55 |
- |
|
Investments |
18,284 |
10,214 |
-44 |
|
Cash flow from operating activities* |
-2,701 |
6,107 |
- |
|
Equity |
27,516 |
24,264 |
-12 |
|
Equity ratio in % |
26.1 |
23.0 |
- |
|
Net financial debt |
53,343 |
61,362 |
+15 |
|
Balance sheet total |
105,310 |
105,673 |
- |
|
Average price (in EUR) |
141.69 |
138.85 |
-2 |
|
P/E ratio as at June 30 |
35 |
- |
- |
|
Dividend yield in % as at June 30 |
1.2 |
0 |
- |
Outlook
Management expects EBIT of 5.0 MEUR for the current fiscal year 2008/09 and consequently results that build on the performance already shown. Given the fact that meeting projected targets depends to a great extent on our project business, we wish to stress that on the basis of the information available we expect to deliver the forecasted results despite the financial crisis. However, in view of the uncertainty surrounding further global economic developments, we cannot predict the actual course of business activities. Provided that the global economic crisis does not prove worse than would currently appear, we expect new impetus from the project business with satellite plants and pallet plants to improve results in 2009/10.
Further details of the outlook are to be found on pages 38 and 39 of the 2007/08 Annual Report, which can also be downloaded from our website www.hirsch-gruppe.com.
Announcement regarding annual report and financial statements:
The report for fiscal year 2007/08 from July 1, 2007 to June 30, 2008 can be downloaded from www.hirsch-gruppe.com and is also available from HIRSCH Servo AG, 9555 Glanegg Nr. 58, Austria or Bank Austria Creditanstalt AG, Vordere Zollamtstrasse 13, 1030 Vienna, Austria. The 2007/08 annual financial statements for the period from July 1, 2007 to June 30, 2008 can be downloaded from www.hirsch-gruppe.com.
The next date on the financial calendar is November 25, 2008 when the 13th Annual General Meeting will be held and the results for the first quarter 2008/09 announced.
*The HIRSCH Servo Group is the EPS specialist on the Vienna Stock Exchange with manufacturing facilities in Austria, Hungary, Poland, Slovakia, Italy and Romania. EPS products (EPS stands for expandable polystyrene and is better known under the brand name of Porozell®) support a variety of functions, including energy savings, as well as sustainable and eco-friendly growth. Their wide-ranging applications cover packaging, shape-molded parts, building insulation, modular boards for underfloor heating, construction blocks and Thermozell® lightweight concrete products.
For further information, please contact Michaela Promberger, Tel: +43 4277 2211-312, Fax: +43 4277 2211-370, E-mail: michaela.promberger@hirsch-gruppe.com, www.hirsch-gruppe.com