CEAG AG presents 2002 result
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| 04/16/2003 |
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| CEAG AG presents 2002 result |
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Press release
CEAG AG presents 2002 result:
Focus on turnaround after restructuring
■ Annual result burdened by one-time effects for restructuring
■ Strategic reorganization already shows a positive impact in the fourth quarter
■ Business units FMP und FPS programmed for growth
Ostbevern/Bad Homburg v. d. Höhe, 16 April 2003
In the course of its strategic reorganization, CEAG implemented an extensive restructuring program in the past business year. The offensive conversion of cost savings underlines CEAG's goal of returning to the profit zone.
The implemented actions yielded first success in the fourth quarter. The adjusted (restructuring) EBIT turned positive again with 0.7 mill.EUR. This bolstered the objective to realize the projected turnaround.
Restructuring, currency rate losses and revaluation of deferred taxes burden the annual result 2002
The cost intensive restructuring burdened the result considerably. The CEAG Group discloses a result before interest and tax (EBIT) of minus 16.1 mill.EUR (prev. year: -2.9 mill.EUR). Included are restructuring costs of 12.9 mill. EUR. One-time cost-adjusted, the EBIT (before restructuring) remains at minus 3.2 mill.EUR (prev. year: -1.7 mill.EUR).
The earnings before tax read minus 17.6 mill.EUR. Profit tax of 7.5 mill.EUR included - mostly because of the revaluation of deferred taxes as per IAS 12 - the Group discloses an annual shortfall of 25.1 mill.EUR.
FRIWO chargers for mobile phones – guarantor for marketing success
In the past business year, CEAG sold 122.6 mill. power supplies and chargers of the FRIWO brand worldwide – compared to 2001 (107.8 mill. units) this means a plus of 14 percent.
High-volume power supplies and chargers for mobile telephones, cordless telephones and mobile telephony turned out to be bestsellers of the business unit FMP (FRIWO Mobile Power). These products increased by 16 percent to 116.5 units versus the previous year.
Solely in the core segment of mobile telephony, FMP sold 113.9 mill. chargers - an increase of 21 percent compared to 2001, hence the company considerably augmented its world market share again to 27 percent (prev. year: 23.5 %).
Due to the higher economic dependency, FPS (FRIWO Power Solutions,) who manufactures power supplies and chargers for IT/Communication, Medical Technology, Power Tools and Industrial Applications, shows a declining development of approx. 6 mill. units. Sales losses had to be accepted on the domestic and European power supply markets.
Revenue affected by persistent price pressure and currency exchange effects
In 2002, the Group's revenue read 191.4 mill. EUR which is 10.5 percent less than previous year (213.8 mill. EUR). Currency adjusted, revenue lagged prior year's level by 6 percent.
According to the quarterly revenues of 2002, the positive sales development did not have a favourable impact on the annual revenue. FMP achieved a revenue of 149.1 mill. EUR, a marginal 11 percent less than in the previous year (166.8 mill. EUR). Its share of the Group's revenue reads 78 percent. Due to price deductions, product mix effects and currency exchange losses the considerable sales plus was overcompensated.
With a revenue of 42.3 mill. EUR, the business unit FPS remained below last year's level by 10 percent (47.0 mill. EUR). This was mainly caused by the strong economic sensitivity of the low-volume product portfolio as well as by the declining demand. Nevertheless, with a revenue loss of 9 percent vs. the market development which was minus 25 percent, FPS was able to hold its ground in Europe (source: EURO PSS, 2003) to some extent.
Business units FMP and FPS – robust into the future
The restructuring focussed on the subdivision into two independently operating business units. With this decision, CEAG reacted to the increasingly unstable economic conditions. With the motto "quick, flexible and profitable", the actions taken from the restructuring program SPRINT led the way for the reorganization capacity, location and sales configurations.
The Group concentrates its core business of high-volume power supplies and chargers in the business unit FMP. The entire production was transferred to the flexible and cost efficient Chinese locations. A third factory is being set up in Beijing's neighbourhood and will pick up its work in 2004.
FPS serves more fragmented markets; the running optimization of the FPS product portfolio is aimed at reducing the complexity of the individual product groups in accordance with market and customer requirements. Thanks to the decision to close the production sites in Mexico (Chihuahua) and in the USA (Colorado Springs) and to shift the production to China, this business unit receives a lean structure. The adjustment of capacities in Ostbevern (Germany) unfortunately caused a reduction of jobs.
In addition, the operating range of both business units was sustained by the extension of sales and marketing activities and the tightened sales structures.
The cost leadership project STEP which was implemented two years ago considerably contributed to the consolidation: in 2002 cost savings totalled roundabout 23 mill. EUR (2001: 20 mill EUR).
Outlook: Course set for turnaround
"We have accepted the challenge to break new grounds. With the implementation of our restructuring program SPRINT we have generated essential prerequisites for lasting profitability and growth. We are closing in on our goal to meet the projected turnaround within the current business year", says Rolf Endress, Chairman of the board of CEAG AG at the shareholders' press conference in Frankfurt on April 16, 2003.
CEAG AG. Germany
With the brand FRIWO and a market share of 27 per cent in 2002, the Prime Standard listed CEAG AG, holding of the FRIWO Group headquartered in Bad Homburg v. d. Hoehe, and headoffice in Ostbevern/Westfalen, Germany, is the worldwide leading supplier of chargers for mobile telephones.
Along with the chargers and power supplies for high-volume telephone and IT technology markets (FRIWO Mobile Power, FMP) individual products are manufactured for IT & communication, power tools, automation and medical technology (FRIWO Power Solutions, FPS) The group's turnover amounted to 191.4 million EUR in the financial year 2002. Worldwide more than 8,700 people were employed. With modern R&D centers, production facilities and sales locations in Europe, Asia and America, CEAG is represented on all important markets of the world. Main shareholder is DELTON AG with almost 77 per cent of the capital stock.
DELTON AG
The DELTON AG, in Bad Homburg, bundles entrepreneurial investments of its sole shareholder Stefan Quandt. As a strategic management holding DELTON leads apart of the CEAG AG (power supply) value creating entrepreneurial activities in business sectors logistics, pharmaceuticals, and household products. Thus the enterprise commits itself in clearly defined segments of future oriented growth markets, in which on a global scale a market leading position is already achieved or targeted.
After a large logistics acquisition in 2002, the group expects a sales volume of approximately 2.5 billion EUR in 2003 with worldwide more than 20,000 employees.
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