Gamma Holding annual results
(Thomson Reuters ONE) -
* Turnover: ? 658 million (2008: ? 723 million)
* EBITDA1 excluding restructuring expenses: ? 63.2 million (2008: ? 70.2
million)
* Net group result excluding restructuring expenses and impairments:
? -20.2 million (2008: ? 14.0 million)
* Net group result: ? -69.0 million (2008: ? -33.2 million)
* Operational personnel and other operating expenses ? 37.9 million (10%)
lower
* Borrowing costs ? 21.1 million higher
* Clear recovery of result in second half of year
?2009 was in many respects a difficult year, in which tough measures had to be
taken. It is encouraging that we were already able to reap the first benefits of
these measures in the second half of the year. We expect the positive trend in
operating result to continue in 2010.'
Jan Albers, CEO
Virtually all its businesses were affected by the deterioration of the economy.
In response to the difficult market conditions, Gamma Holding, as in 2008,
accelerated its programme of strong measures to reduce costs and improve cash
flow. In that context, substantial headcount reductions were implemented in
virtually all the business units. Moreover, both the production and the assembly
activities were further optimised within the group and there was a sharper focus
on marketing & sales and innovation. In addition, a reduction of working time
was introduced in various businesses, investments were cut back as part of a
stringent financial policy and there was a constant focus on improving working
capital.
The accelerated measures started to have an effect from the second half of
2009. Also supported by economic improvements in Asia and America, earnings
showed a recovery from the third quarter, especially at Ammeraal Beltech and
Bekaert Textiles. EBITDA1 excluding restructuring expenses in the second half of
the year came to ? 37.6 million (second half of 2008: ? 25.6 million), compared
with EBITDA1 excluding restructuring expenses in the first six months of ? 25.6
million (first half of 2008: ? 44.6 million).
Financing and debt reduction
On 18 February 2009 Gamma Holding reached agreement with the syndicate of banks
on changes to the existing loan facilities until March 2010. In the end, the
facilities were extended to mid-July 2011, with an easing of the covenants.
During the year under review, talks were also held with an interested party on a
possible public-to-private transaction. In April 2009 talks between the
potential buyer and the banks on this subject came to an impasse, however.
Gamma Holding also sought suitable buyers for the business unit
Dimension-Polyant and the company Verseidag Ballistic Protection, which forms
part of Coating & Composites. As a consequence of the worldwide financial and
economic crisis the sale of both units had to be temporarily suspended in 2009
due to low valuations and limited availability of acquisition financing.
However, the process of selling Verseidag Ballistic Protection was resumed in
the second quarter of 2009. In the end, Gamma Holding was able to sell not only
Verseidag Ballistic Protection but also virtually the whole business unit
Coating & Composites by the end of the year and in this way improve its debt
position. The product group PTFE-coated glass woven fabrics for industrial
applications, which together with the companies Green Belting Industries, Biscor
and Mapelli formed part of Coating & Composites, has been transferred to
Ammeraal Beltech. PTFE represents annual turnover of ? 13 million and makes a
limited contribution to EBITDA1. This unit employs 138 people.
At the same time as the sale of virtually the whole of Coating & Composites,
Dimension-Polyant, the world market leader in sailcloth, was again accounted for
as a continued operation. The sectoral breakdown into Industrial Solutions and
Lifestyle Fabrics has been abandoned and the names of the business units have
been changed to the more easily recognisable company names. This means that, as
of the reporting date, Gamma Holding consists of five business units: Ammeraal
Beltech, Clear Edge Filtration, Dimension-Polyant, Bekaert Textiles and Vlisco
Group.
Turnover and results
In 2009 there was a decline in both turnover and income of Gamma Holding. Group
turnover came to ? 658 million (2008: ? 723 million), which includes a negative
effect of ? 6 million arising from currency movements.
The operational personnel and other operating expenses were ? 37.9 million lower
than in 2008. EBITDA1 of the group excluding restructuring expenses totalled ?
63.2 million (2008: ? 70.2 million). Currency movements had a positive effect of
? 0.4 million. The decline in EBITDA1 was caused by the lower turnover and,
partly due to this, under-utilisation of factory capacity. At the same time,
added value decreased as a consequence of price pressure and inventory
reductions.
EBITA2 excluding restructuring expenses and impairment came to ? 31.8 million
(2008: ? 38.7 million).
The balance of financial income and expense deteriorated substantially to ?
-37.9 million (2008:
? -16.8 million) due to higher (re-) financing expenses of ? -14.2 million,
higher interest charges and a fractionally lower balance of interest-bearing
liabilities. The effective tax rate was -9.9% (2008: -0.2%), mainly due to
unrecognised losses and because it was not possible to recognise a tax benefit
on the impairment of goodwill. It should be noted here that the group result
before taxation was negative in 2009 and 2008.
The net group result excluding restructuring expenses and impairment came to ?
-20.2 million (2008: ? 14.0 million).
Restructuring expenses in 2009 totalled ? 18.9 million (2008: ? 31.1 million).
Testing of calculations of value in use resulted in impairment charges in 2009
for intangible assets and property, plant and equipment of ? 32.9 million at
Clear Edge Filtration and Coating & Composites (2008: ? 22.6 million).
The net group result was ? -69.0 million (2008: ? -33.2 million). As a
consequence of this loss, Gamma Holding will not distribute a dividend.
Earnings per share came to ? -9.43 (2008: ? -4.61).
Developments by business unit
The turnover of Ammeraal Beltech (including PTFE) came to ? 239.7 million (2008:
? 276.1 million). EBITDA1 excluding restructuring expenses totalled ? 14.8
million (2008: ? 18.8 million). Worldwide, major projects at Original Equipment
Manufacturers (OEMs) suffered delays and customers postponed orders,
particularly in the first half of the year. This was reflected in sales of all
types of belting, but especially modular belts and in markets such as the
construction and textile sectors, as well as in the chemical, metalworking,
woodworking and automotive industries.
The replacement market was also affected by the economic stagnation, mainly due
to the fact that customers sought to save on the cost of maintenance. The
business unit was hit less hard, however, as regards belts for the food
industry, the print and packaging industry and treadmills.
The turnover of Clear Edge Filtration was ? 91.1 million (2008: ? 112.9
million). EBITDA1 excluding restructuring expenses came to ? 2.7 million (2008:
? 10.5 million). The fall in demand was mainly felt in Europe and among OEMS,
notably in mining, the chemical and the automotive industries. Replacement
orders were deferred, moreover. In the food industry, demand was less sensitive
to the economic cycle, however. Furthermore, sales of ceramic filter elements
showed an upward trend.
The turnover of Dimension-Polyant came to ? 31.0 million (2008: ? 37.7 million).
EBITDA1 excluding restructuring expenses totalled ? 2.1 million (2008: ? 3.4
million). The business unit had to contend with a slow start to the sailing
season and was adversely affected above all by an extremely weak OEM market and
a declining wind- and kite-surfing segment. The replacement market, however, was
less sensitive to the recession, while demand for high-quality sailcloth also
remained high.
The turnover of Bekaert Textiles amounted to ? 128.4 million (2008: ? 132.9
million). EBITDA1 excluding restructuring expenses showed a strong improvement
and totalled ? 16.1 million (2008: ? 5.7 million). In 2009 Bekaert Textiles
benefited noticeably from the vigorous cost-saving measures taken in the
previous years. The business unit even succeeded in increasing its market share,
in spite of the fact that mattress manufacturers are producing less and less and
are further cutting back inventories. Successful new products and initial
positive signals with regard to the economy, notably in the United States, also
contributed to the recovery.
The turnover of Vlisco Group came to ? 168.3 million (2008: ? 163.3 million)
thanks to higher volumes at Vlisco and Uniwax, internal improvement processes,
the differentiated brand strategy and extra sales efforts. The business unit was
unable to continue the strong growth of the first quarter because of the fact
that the recession is also making itself felt in Africa. EBITDA1 excluding
restructuring expenses totalled ? 28.2 million (2008: ? 32.4 million).
Cash flow and investments
The balance of interest-bearing liabilities was reduced from ? 285.5 million to
? 259.5 million. This includes a negative currency effect of ? 1.7 million. The
net interest-bearing debt in relation to EBITDA1 came to 4.2 and therefore
remains within the level of 5.7 agreed with the syndicate of banks. The other
bank covenants have also been complied with.
Investments in property, plant and equipment totalled ? 22.7 million (2008: ?
25.4 million) and were mainly in Ammeraal Beltech, Clear Edge Filtration,
Bekaert Textiles and Vlisco Group. On the other hand there were divestments
totalling ? 2.8 million (2008: ? 6.0 million), mainly related to the sale of
real estate. Net investments came to ? 19.9 million (2008: ? 19.4 million) and
remained significantly below the level of depreciation of ? 29.4 million (2008:
? 30.1 million).
Net working capital fell in the reporting period from ? 198.4 million in 2008 to
? 180.0 million in 2009. Net working capital as a percentage of turnover
remained almost the same at 27.3% (2008: 27.4%). Currency movements caused net
working capital to increase by ? 1.8 million. The organic decline in net working
capital was ? 20.2 million.
Total equity stood at ? 73.9 million (2008: ? 142.0 million). At year-end 2009
total equity as a percentage of the balance sheet total was 13.8% (year-end
2008: 21.0%).
Employees
As a consequence of the vigorous measures taken during the reporting period, the
total number of employees showed a net decrease of 8%, from 7,001 at year-end
2008 to 6,477 at year-end 2009.
Of the total workforce, 88% are employed outside the Netherlands and 55% outside
Europe. The number of temporary employees fell by 138.
All the business units contributed to the decrease, with the exception of
Dimension-Polyant and Vlisco Group. At these units the number of employees
increased in total by 102 in 2009 as a consequence of the starting-up of a
sail-making facility in Sri Lanka and the recruitment of experienced people to
strengthen the brands Vlisco, Uniwax, GTP and Woodin, respectively.
Outlook
Gamma Holding will continue to closely monitor market conditions and make
changes to the organisation as necessary. In that respect, restructuring costs
of approximately ? 10 million are expected to be incurred in 2010.Barring
unforeseen circumstances, the positive trend in operating result is expected to
continue in 2010.
Helmond, 26 February 2010
Executive Board of Gamma Holding N.V.
Jan Albers, CEO
Leendert van Reeuwijk, CFO
This press release is based on the financial statements prepared by the
Executive Board. The financial statements will be submitted to the General
Meeting of Shareholders of 29 April 2010 for adoption.
Appendices
Consolidated balance sheet
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of changes in equity
Consolidated statement of cash flows
Segment information
___________
1 Group result before income tax, interest, depreciation/amortisation and
impairment of property, plant and equipment and intangible assets.
2 Group result before income tax, interest and amortisation/impairment of
goodwill and acquired intangible assets.
Profile
Gamma Holding is active in 42 countries with some 6,500 employees and consists
of five business units: Ammeraal Beltech, Clear Edge Filtration,
Dimension-Polyant, Bekaert Textiles and Vlisco Group. The units develop,
manufacture and sell innovative, high-quality products throughout the world,
varying from process and conveyor belts and products for filtration processes to
sailcloth, mattress ticking and African fashion fabrics. With these activities,
the business units of Gamma Holding hold prominent market positions worldwide.
The Company's headquarters are located in Helmond (Netherlands) and its shares
are listed on Euronext Amsterdam.
For more information, click on www.gammaholding.com
[HUG#1388786]
Gamma Holding annual results: http://hugin.info/130740/R/1388786/346989.pdf
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Datum: 26.02.2010 - 02:16 Uhr
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