Interim report January - June 2009 HL Display AB (publ)>
Interim report January - June 2009 HL Display AB (publ)
(Thomson Reuters ONE) - * Net sales for January - June amounted to MSEK 696 (787). Operating profit was MSEK 38 (75) and profit before tax was MSEK 38 (72). Net profit amounted to MSEK 27 (52). * Net sales during the second quarter of 2009 decreased by 15 per cent to MSEK 343 (404). Operating profit amounted to MSEK 21 (44) and profit before tax to MSEK 20 (44). Net profit was reported as MSEK 15 (31) and profit per share after dilution was SEK 0.47 (1.01) . * EBITA-margin for the first six months was 5.5 (9.5) per cent and for the second quarter 6.0 (10.8) per cent * Earnings per share after dilution amounted to SEK 0.88 (1.67) for the first six months of the year.Statement by the CEOHL Display has been increasingly affected by the global economicdownturn in the first half of the year. In the first quarter, alower demand was noted in most markets. This trend was even moreapparent in the second quarter. Total sales fell by 12 percent toMSEK 696 in the first half of the year. Adjusted for currencyeffects, the decline was 17 percent. However, it is our belief thatwe have strengthened our competitiveness and market share in a weakmarket.Results affected by reduced salesThe decline in sales volume has had a negative effect on the profitand has led to underutilization in production. Cost reductions at ourproduction facilities, and a shift in the product mix towards highermargin products, have been offsetting the negative volume effectssomewhat. Operating profit for the first half of 2009 amounted toMSEK 38, compared to MSEK 75 in the same period last year. The EBITAmargin amounted to 5.5 percent for the first six months of 2009. Thedecrease in operating profit is somewhat an effect of lower salesvolumes, although it has partly been compensated by a reduction inoperating expenses, production cost and currency effects.Differing trends among regionsLooking at the different regions in which we operate, it can beobserved that the market activity level is generally lower than lastyear. However, the trends vary from region to region. We can clearlysee that sales decreases in markets serviced by external distributorsare larger than in markets managed by our own sales companies.In Asia, HL Display is currently helped by the currency. In the firsthalf of the year, sales increased by 12 percent including currencyeffects. Sales in local currencies were down six percent.Sales in Middle Europe (countries such as Switzerland, Germany andAustria) for the first half of 2009 were overall better than for therest of Europe. This was largely due to the fact that food retailersin the region decided to keep investments in their stores at a higherlevel than in other European countries.In Southern Europe, there was clear evidence of a loss of investmentappetite among our customers during the second quarter. This wasparticularly the case in Spain. Overall, the region's sales were down15 per cent in the first half of 2009 in local currencies.The region which was hit hardest by the financial crisis and economicdownturn was Eastern Europe, with many of the region's countriesexperiencing severe negative economic growth. This is particularlytrue of the important Russian market, where we are experiencing avery tough market climate. However, if we compare the first andsecond quarters, it can be seen that the situation has notdeteriorated further in Eastern Europe. Sales decreased by 26 percentin the region during the first six months compared to the same periodlast year.The Nordic markets also experienced negative growth in the first halfof the year. Sales were down by 19 percent for the first six months.However, in certain countries, such as Norway, growth and investmentsin the food retail sector have been at a very high level for someyears. Consequently, the decline in sales is to some extent an effectof a natural downward revision of the investment level.Brand manufacturers still investingLooking at our priority customer groups, the food retail segment isthe group which has decided to reduce its investments most. Thistrend is common to most of our markets. Also in the non-food retailsegment, the propensity to invest has declined considerably,particularly in areas affected by the economic downturn, whichinclude home electronics and "Do-it-yourself". In the brandmanufacturer customer segment, it is evident that many companies havebeen adversely affected by the present situation. Nevertheless brandmanufacturers continue to invest in their brands, leading toincreased sales to this customer group for HL Display.Rationalisation work continuesIn the first half of the year, we continued our rationalisationprogramme with undiminished vigour. Measures include short-termmanagement of the market situation in which we find ourselves andimportant forward-looking measures designed to make HL Display astronger and more efficient company when the market turns.In the first half of the year, we implemented targeted cost reductionmeasures aimed at adapting capacity to lower demand and issuedredundancy notices at the Group's production facilities and salescompanies. We will however not see the full effects of these measuresuntil the third and fourth quarter of 2009. The number of employeeshas decreased from 970 people in December to 920 people at the end ofJune. In addition, we have taken measures to improve working capitalby actions aimed at reducing capital tied up in inventories andreceivables as well as payables improvements.In a long-term perspective, we are focusing on processes and rawmaterials in order to strengthen our production and our offer. We arefor example actively promoting increased use of recycled materials.One such example is the decision that the new shelf divider systemlaunched in autumn will be partly manufactured from recycled PETplastic.We are also continuing the important work of establishing regionalservice centres which will provide logistics and stock control, andalso encompass supporting and auxiliary services for administrationand finance for the regions' countries. This investment is designedto increase cost efficiency and quality in the long term whilereducing capital in tied up inventories. The new service center forparts of Central and Eastern Europe will open in Hungary in Octoberof 2009.Continuing focus on innovation and acquisitionsDespite a tough market climate, we have decided to continue investingin product development. This is one of our main competitive tools anddifferentiates us from our competitors. In 2009, we will be launchinga number of new innovative products aimed at the retail trade andbrand manufacturers.HL Display previously communicated the intention to strengthen itsmarket position and offering by means of acquisitive growth. Thiswork has continued during the first half of the year and we regularlyevaluate potential acquisitions.Future developmentIn summary, we have been affected by a weak market in the first halfof 2009. The market situation in the future is also very uncertain.At the same time it is important to emphasize that our financialposition continues to be strong. The measures that we haveimplemented have ensured that we, despite sales decreases, are stillmaintaining a profitable operation.Although we are expecting more turbulent times ahead, I am convincedthat the long-term measures we have initiated will create a healthierand better structured company when the market returns to normal.Nacka Strand in July 2009Gérard DubuyCEOThe full report incl. tables can be downloaded from the enclosedlink.http://hugin.info/1092/R/1329062/313601.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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Datum: 16.07.2009 - 08:40 Uhr
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