Trading update third quarter Gamma Holding
(Thomson Reuters ONE) - - Turnover: EUR 167 million (third quarter 2008: EUR 179million)- EBITDA 1 excluding restructuring expenses: EUR 18.6 million(third quarter 2008: EUR 16.7 million)- Sale of Coating & Composites- Term of financing extended to mid-July 2011Gamma Holding intends to sell virtually the whole business unitCoating & Composites, including Verseidag Ballistic Protection, for asum of EUR 37.5 million to a German industrial company. The units tobe sold represent anticipated annual turnover of EUR 76 million andEBITDA 1 of EUR 2.5 million. The number of employees involved is 271.The transaction is expected to be completed in the coming weeks. Theunits concerned are included in this trading update as discontinuedoperations.The product group PTFE-coated glass woven fabrics for industrialapplications, which formed part of Coating & Composites, will betransferred to Belting. PTFE represents anticipated annual turnoverof EUR 13 million and makes a limited contribution to EBITDA 1. Theunit employs 134 people. It has also been decided to recognise thebusiness unit Sailcloth as a continuing operation once again witheffect from 30 September 2009.Gamma Holding has decided to abandon the sectoral breakdown intoIndustrial Solutions and Lifestyle Fabrics. With effect from thistrading update the Company reports separately on each business unitin line with the half-year report.Developments in the third quarterIn the third quarter Gamma Holding benefited from the acceleratedprogrammes of cost savings, restructurings and working capitalimprovement. Earnings showed a recovery as a consequence of thesemeasures, notably at Belting and Sleep Care Fabrics.Group turnover in the third quarter of 2009 totalled EUR 167 million(2008: EUR 179 million). This includes a positive effect of EUR 1.3million arising from currency movements.Group EBITDA 1 excluding restructuring expenses was EUR 18.6 million(2008: EUR 16.7 million). Currency movements had a positive effect ofEUR 0.5 million.In the third quarter the net interest-bearing debt fell by EUR 8.0million to EUR 305 million.The turnover of Belting (including PTFE) came to EUR 61 million(2008: EUR 68 million). EBITDA 1 excluding restructuring expenses wasEUR 5.1 million (2008: EUR 4.6 million). The business unit has tocontend with fewer orders in spite of signs of recovery in Asia andAmerica. The economic stagnation is making itself felt mainly insales of modular belts and in markets such as the construction andtextile sectors and in the chemical, metalworking, woodworking andautomotive industries. Belting was less affected, however, as regardsbelts for the food industry, the print and packaging industry,airbags and treadmills. In order to save on costs, more and morefabrication activities are being transferred from Western to EasternEurope and further personnel reductions have been undertaken.Turnover of Filtration was EUR 22 million (2008: EUR 28 million).EBITDA 1 excluding restructuring expenses came to EUR 1.0 million(2008: EUR 2.1 million). In Europe and among Original EquipmentManufacturers in particular there was a fall in demand for filterproducts, notably in mining and the chemical and automotiveindustries. Moreover, replacement orders were deferred. In the foodindustry, demand was less sensitive to the economic cycle.Furthermore, sales of ceramic filter elements showed an upward trend.The business unit will further adapt the organisation to the lowerlevel of turnover.Turnover of Sailcloth came to EUR 7 million (2008: EUR 7 million).EBITDA 1 excluding restructuring expenses was EUR -0.2 million (2008:EUR -0.4 million). The business unit is being adversely affectedabove all by an extremely weak OEM market and a declining wind- andkite-surfing segment. Demand for the top-segment D4-membrane sailsremained high, however, while the first high-qualityDimension-Polyant sails from the new production location in Sri Lankahave now been manufactured and sold.Turnover of Sleep Care Fabrics totalled EUR 34 million (2008: EUR 34million), with market share gains principally in America. EBITDA1 excluding restructuring expenses showed a strong improvement in thethird quarter as a result of higher turnover and cost savings andcame to EUR 5.6 million (2008: EUR 1.4 million). The last productionfacility in Belgium has in the meantime been closed down, with themachinery transferred to other units. Furthermore, the logistics andstorage of mattress fabrics for the European market will beoutsourced before the end of this year.Turnover of Exotic Fabrics held its own and came to EUR 43 million(2008: EUR 42 million), mainly due to Vlisco and Uniwax. EBITDA1 excluding restructuring expenses was EUR 7.2 million (2008: EUR 8.7million). In August the top brand Vlisco again successfully launcheda new collection called 'Touch of Sculpture'.Discontinued OperationsTurnover of Discontinued Operations amounted to EUR 17 million in thethird quarter (2008: EUR 21 million).Compared with other units within the Group, Verseidag BallisticProtection was less affected by the recession. The business unitsupplies body armour to European and US army and police forces andcomposite armoured material solutions to several armed forces.Turnover of Coating & Composites (excluding PTFE) was down. Inparticular, the seemee® product group (printable media fabric), whichis linked with the economically sensitive advertising sector, saw anappreciable fall in demand. Duraskin® also showed a decline, but wasable to grow in the area of tent fabric and coated fabric for roofstructures.Developments in the first nine monthsGroup turnover in the first nine months of 2009 totalled EUR 489million (2008: EUR 546 million). This includes a positive effect ofEUR 3.8 million arising from currency movements.The operational personnel and other operating expenses were EUR 23.3million lower than in the first nine months of 2008. Group EBITDA1 excluding restructuring expenses came to EUR 44.2 million (2008:EUR 61.2 million). Currency movements had a positive effect of EUR2.9 million.EBITA 2 was EUR 9.1 million (2008: EUR 36.9 million).The balance of financial income and expenses rose to EUR -31.5million (2008: EUR -11.1 million) as a consequence of higher(re-)financing expenses of EUR -14.3 million, higher interest chargesand a slightly higher balance of interest-bearing liabilities.The net group result excluding restructuring expenses and impairmentcame to EUR -17.8 million (2008: EUR 18.7 million).Restructuring expenses in the first nine months totalled EUR 11.1million (2008: EUR 0.4 million).In the first six months of the year the test against the value-in-usecalculations resulted in impairment of intangible assets andproperty, plant and equipment of EUR 32.9 million at Filtration andCoating & Composites (2008: nil).The net group result amounted to EUR -60.8 million (2008: EUR 18.4million), principally due to lower EBITDA 1, impairment of intangibleassets and property, plant and equipment, restructuring expenses, andhigher financial income and expenses.FinancingOn 18 February 2009, Gamma Holding reached agreement with the bankson new financing arrangements of EUR 390 million until March 2010.Improved conditions were agreed in mid-July 2009, with thepossibility of an extension of the financing subject to certainconditions.Gamma Holding has now met all the conditions and hence has financingavailable until mid-July 2011. The exercising of the extension optionhas meant a further easing of the covenants. As of 30 September 2009the net interest-bearing debt was EUR 305 million. The netinterest-bearing debt in relation to EBITDA 1 was 5.6 and istherefore within the level of 7.0 agreed with the syndicate of banks.The other covenants were also fulfilled.Strengthening of market positions and cost savingsGamma Holding will continue to focus on further strengthening itsmarket positions and on implementation of the programme of costsavings. The programme is already bearing fruit. In the first ninemonths of 2009 there has been a net reduction of 536 in theworkforce. The number of temporary employees through agencies fell by106. In addition, a reduction of working time has been introduced inseveral enterprises, investments have been reduced as part of astringent financial policy, and the Company is constantly striving toimprove working capital.OutlookIn spite of some positive developments, Gamma Holding does notanticipate an improvement in the current market conditions in thefourth quarter. The rest of 2009 will continue to pose a challenge.The Company will therefore continue to closely monitor marketconditions and make changes to the organisation as necessary.Gamma Holding expects to remain within the newly agreed bankcovenants.Executive Board of Gamma Holding N.V.Helmond, 23 October 2009The figures contained in this trading update have not been audited.AppendixFor a complete reproduction of the press release, including tables,please see attached pdf-file.ProfileGamma Holding develops, manufactures and sells innovative,high-quality industrial and consumer-related textile productsthroughout the world, varying from process and conveyor belts toproducts for filtration processes, sailcloth, mattress ticking andethnic fabrics. With these products, the company is a leading globalplayer in its selected niche markets. The company has some 6,500employees in 43 countries. Its headquarters are located in Helmond(Netherlands) and its shares are listed on Euronext Amsterdam.More information: www.gammaholding.nl.[1] Group result before income tax, interest, depreciation,amortisation and impairment of property, plant and equipment andintangible assets[2] Group result before income tax, interest andamortisation/impairment of goodwill and acquired intangible assetshttp://hugin.info/130740/R/1349590/325277.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 23.10.2009 - 08:16 Uhr
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