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CEAG Posts Moderate Business Performance in First Quarter of 2008
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| 05/19/2008 |
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| CEAG Posts Moderate Business Performance in First Quarter of 2008 |
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Ostbevern, Germany, May 15, 2008
Unit sales, revenues and earnings below the strong prior-year quarterSale of the FMP business unit successfully completed in May
CEAG AG, manufacturer of high-quality FRIWO brand power supplies and chargers, reports moderate business performance for the first quarter of 2008. The unit sales, revenues and earnings of the FRIWO Power Solutions (FPS) business unit failed to match the very high comparative figures for the first quarter of 2007 in which FPS generated exceedingly strong growth.
On February 7, 2008, CEAG AG signed an agreement on the sale of the FRIWO Mobile Power (FMP) business unit to a subsidiary of Flextronics International Ltd., which is located in Singapore. FMP manufactures power supplies and chargers for the mobile telephone industry. After the necessary approvals had been granted by the antitrust authorities and all other conditions had been met, FMP’s business activities were transferred to Flextronics with effect as of May 7, 2008. After the sale, CEAG will focus resolutely on the development of the FPS business unit.
In the quarter under review, FMP’s net profit is disclosed under discontinued operations in accordance with IFRS 5. As a result, only the income and expenses of the continuing operations − the FPS business unit − and of the holding company are discussed in detail, while the earnings of the FMP business unit are disclosed in a separate item entitled “Net profit (discontinued operations)”. The prior-year figures have been adjusted accordingly.
Industry Environment
CEAG AG, with its FPS business unit, supplies customized power supplies and chargers as well as standard products to the markets of IT and communications, household appliances and power tools, industrial applications and medical technology. The IT and communications segment is growing fast. The household appliances and white goods, industrial applications and medical technology segments are characterized by moderate yet sustainable growth.
Unit Sales of the CEAG Group
The CEAG Group and its FPS business unit sold a total of 7.3 million power supplies and chargers in the first three months of the current year. This represents a decrease of 4.9% on the comparable prior-year quarter (7.7 million units). It should be noted in this context that FPS reported strong growth of 33.5% in the first quarter of 2007 compared with the same period in 2006. In addition, weaker demand from certain customers at times due to project postponements and delays had a negative impact on unit sales development.
Revenues and Earnings of the CEAG Group
FPS revenues decreased by 13.5% to EUR 19.8 million in the first quarter of 2008 (prior-year quarter: EUR 22.9 million). Lower unit sales as well as the appreciation of the euro against the US dollar affecting orders invoiced in US dollars put a damper on revenue growth.
The Group generated earnings before interest and taxes (EBIT) of EUR 0.5 million compared with EUR 1.1 million in same prior-year quarter. The drop in earnings reflects the negative impact of lower revenues as well as the weakness of the US dollar in the first quarter of 2008.
The Group reports a net profit of EUR 0.4 million from its continuing operations (Q1/2007: EUR 1.2 million). Net profit from discontinued operations, i.e. from the activities of FMP, amounted to EUR 0.3 million (Q1/2007: EUR 0.6 million). Overall, consolidated net profit came to EUR 0.7 million compared with EUR 1.8 million in the same prior-year quarter.
FPS recorded EBIT of EUR 1.1 million as opposed to EUR 1.8 million in the prior-year quarter. The holding company’s EBIT came to -EUR 0.6 million compared with -EUR 0.7 million in the same period of the prior year.
Outlook for 2008
The Management Board anticipates that the weak demand from certain FPS customers will be temporary and that it will not detract from the business unit’s growth trend. The Board therefore still believes that further unit sales growth for FPS is possible in 2008. To what extent this unit sales growth will be reflected in revenues and earnings depends to a considerable degree on market and cost effects as well as the development of the US dollar/euro exchange rate. Moreover, the earnings situation of the CEAG Group in the current year will be substantially influenced by the income from the sale of the FMP business unit.
The interim statement for the first quarter of 2008 can be downloaded from the Company’s website at www.ceag-ag.com.
More information:
CEAG AG
Ms. Gudrun Richter
Investor Relations
Tel.: +49 – 2532 – 81 158
E-mail: richter@friwo.de
CEAG AG
CEAG AG has its registered office in Bad Homburg, Germany, and its business address in Ostbevern, Westphalia, Germany. It is listed in the General Standard, and is the holding company of the FRIWO Power Solutions (FPS) business unit.
FPS sells customized power supplies and chargers for the four segments of IT and communications, household appliances and power tools, industrial applications and medical technology. CEAG AG/FRIWO Group is present in all major world markets, with state-of-the-art development centers, production and sales operations in Europe, Asia and North America. FPS’s revenues amounted to EUR 84.3 million in 2007. CEAG AG’s principal shareholder is DELTON AG, which holds almost 77% of its capital.
DELTON AG
DELTON AG is a strategic management holding company which has its registered office in Bad Homburg, Germany. DELTON AG carries out value-added activities for its sole shareholder, Stefan Quandt, in the following fields: pharmaceuticals, household products, logistics, and power supply. DELTON AG operates in clearly defined segments of the growth markets of the future, in which it either holds or aims to hold a leading market position on an international scale. In 2007, the DELTON Group generated revenues of some EUR 2.75 billion with over 29,000 employees.
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CEAG AG