CEAG AG: Contrasting Performance of the FRIWO Business Units in 2007
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companies/Press Release: Publication of Provisional Figures
Ostbevern (euro adhoc) - Press Release: Publication of Provisional Figures
CEAG AG: Contrasting Performance of the FRIWO Business Units in 2007
. FRIWO Power Solutions (FPS) records pleasing growth in unit sales, revenues
and EBIT yet again
. Mobile telephone business falls short of strong prior-year performance
. FRIWO Mobile Power (FMP) sold to Flextronics in February 2008
. Timely distribution of a portion of the net proceeds from the sale planned
in 2008
. Annual shareholders' meeting on August 21, 2008Ostbevern, Germany, February 29, 2008 - CEAG AG, manufacturer of high-quality FRIWO brand power supplies and chargers, recorded contrasting performances by its two business units, FRIWO Mobile Power (FMP) and FRIWO Power Solutions (FPS), once again in fiscal year 2007. While FPS continued its pleasing growth in unit sales, revenues and EBIT, FMP failed to match its prior-year performance in the face of a sharp increase in competition. As reported, on February 7, 2008, CEAG signed an agreement to sell FMP in the first six months of 2008 to a subsidiary of the Singapore-based Flextronics International Ltd. Thus, in the future, CEAG will focus its energies on the FPS business unit, which is continually growing.
Unit Sales
In 2007, the CEAG Group sold a total of 289.2 million power supplies and chargers, down 6.8% on the prior year (2006: 310.4 million). This drop is entirely attributable to FMP, which serves the high-volume market for mobile telephones. FMP posted an 8.4% drop in unit sales year on year to 259.2 million units (prior year: 282.9 million units). As previously reported, this trend is mainly due to the discontinuation of linear-device production in favor of more technically advanced switch mode products. While CEAG was previously sole supplier to the biggest buyer of linear devices, mobile telephone manufacturers tend to have more than one supplier of switch mode products.
The FPS business unit, which serves various markets, such as IT and communications, household appliances and power tools, and industrial applications and medical technology, maintained its growth course and recorded unit sales of 30.1 million power supplies and chargers. This represents an increase of 9.3% (2006: 27.5 million units).
Revenues
The CEAG Group generated revenues of EUR 315.2 million in 2007, down 10.4% on the prior year (EUR 351.7 million). On the basis of prior-year exchange rates, the decrease was only 4.2%.
FMP generated revenues of EUR 230.9 million, 15.3% down on the prior year (2006: EUR 272.6 million). The disappointing performance of some of FMP's customers and the sharp increase in competition between suppliers to mobile telephone manufacturers in particular have left their mark. If exchange rates had been constant, the drop in revenues would have been 9.1%.
FPS posted revenues of EUR 84.3 million, up 6.7% on the prior year (2006: EUR 79.1 million). This growth was mainly achieved on the back of new projects, for example in IT and communications. Taking the exchange rate in the prior year as a basis, revenues would have increased by 13.2%.
EBIT Consolidated earnings before interest and taxes (EBIT) stood at EUR 12.0 million, a decrease of 10.5% on the prior year (EUR 13.4 million). The EBIT operating margin, in relation to revenues, remained at the prior-year level of 3.8%.
The CEAG Group's earnings were encumbered by the following external influences: The sharp increase in competition between suppliers to mobile telephone manufacturers led to considerable price pressure, which had a negative effect on recoverable margins. Wage increases and energy shortages in China, temporary interruptions to production at the Chinese plants due to strike action, and high prices of key raw materials also all impacted negatively on earnings. Furthermore, the appreciation of the euro against the US dollar, the currency used by CEAG for most of its invoicing, also damaged earnings.
Consolidated net profit amounted to EUR 9.8 million, after EUR 11.4 million in fiscal year 2006 (down 13.4%). Accordingly, earnings per share fell from EUR 1.48 to EUR 1.28.
FMP generated EBIT of EUR 9.5 million (2006: EUR 12.8 million; down 25.7%). The EBIT of the FPS business unit came to EUR 5.7 million, compared with EUR 3.5 million in the prior year, an increase of 60.0%. This rise is due to increased revenues, but also to effects arising from the well-balanced customer structure.
Sale of the FMP Business Unit On February 7, 2008, CEAG signed an agreement with a subsidiary of the Singapore-based Flextronics International Ltd. to sell FMP in the first six months of 2008. The transaction is subject to the approval of the competent antitrust authorities as well as other normal market terms and conditions. The purchase price is EUR 57.5 million, less the net financing debt. It is subject to a standard working capital adjustment provision, which could reduce the net proceeds from the sale. On the basis of the provisional figures for 2007, the purchase price would drop slightly if the adjustment provisions were applied. However, it looks as though application of these provisions as of the date of sale will reduce the purchase price further due to fluctuations in the net financing debt and the development of working capital in connection with the business and seasonal trend.
Outlook for 2008 Following the sale of FMP, CEAG will focus resolutely on the development of FPS, which is experiencing strong growth. After the successful performance of the past few years, the Management Board considers the chances of FPS boosting its revenues and EBIT again in 2008 to be good. The Management Board expects to generate positive proceeds in 2008 from the sale of FMP to Flextronics.
Profit Distribution and Annual Shareholders' Meeting in 2008 The sale of FMP will be initially recognized in net profit or loss for fiscal year 2008. Hence, it will not have any effect on the retained earnings of CEAG AG for fiscal year 2007, on which the annual shareholders' meeting will decide in 2008. Irrespective of this, and in order to provide the shareholders with a timely and maximum dividend distribution in 2008, CEAG AG has released the current revenue reserves of EUR 22.5 million. If FMP is sold at the time of the annual shareholders' meeting, the Management Board will propose to the annual shareholders' meeting to distribute most of the retained earnings. The annual shareholders' meeting is due to take place on August 21, 2008.
Rolf Endress, CEO of the Management Board of CEAG AG: "In fiscal year 2007, CEAG had to overcome numerous challenges. In view of the fierce headwinds buffeting the Group, the EBIT we generated was relatively pleasing. Once the FMP business unit has been sold, we will focus all our energies on the development of FPS. CEAG will remain a player on the international stage, with a focus on innovation, flexibility and excellence."
More information: CEAG AG Ms. Gudrun Richter Investor Relations Tel.: +49 - 2532 - 81 158 E-mail: richter@friwo.de
Provisional Figures for the CEAG Group (IFRSs)
| | |2007 |2006 |Change | | | | | |in % | |Unit sales of power supplies and|In millions|289.3 |310.4 |-6.8 | |chargers |of units | | | | |Thereof FMP |In millions|259.2 |282.9 |-8.4 | | |of units | | | | |Thereof FPS |In millions|30.1 |27.5 |9.3 | | |of units | | | | |CEAG revenues |EUR million|315.2 |351.7 |-10.4 | |Thereof FMP revenues |EUR million|230.9 |272.6 |-15.3 | |Thereof FPS revenues |EUR million|84.3 |79.1 |6.7 | |CEAG EBIT |EUR million|12.0 |13.4 |-10.5 | |EBIT margin |in % |3.8 |3.8 |- | |FMP EBIT |EUR million|9.5 |12.8 |-25.7 | |FPS EBIT |EUR million|5.7 |3.5 |60.0 | |Holding company EBIT |EUR million|-3.2 |-2.9 |-8.6 | |Consolidated net profit |EUR million|9.8 |11.4 |-13.4 | |Earnings per share |EUR |1.28 |1.48 |-13.4 | |Employees (as of December 31) |No. |19,027 |22,223 |-14.4 | |Thereof in Germany |No. |270 |270 |- | |Thereof in other countries |No. |18,757 |21,953 |-14.6 |
Preliminary Income Statement of the CEAG Group as of December 31, 2007
|In thousands of EUR | |2007 | |2006 | |Revenues | |315,219 | |351,659 | |Cost of sales | |-284,299| |-316,513| |Gross profit | |30,920 | |35,146 | |Research costs | |-344 | |-659 | |Selling expenses | |-6,830 | |-8,903 | |General and administrative expenses | |-12,219 | |-12,808 | |Other operating expenses | |-4,934 | |-3,644 | |Other operating income | |5,408 | |4,284 | |Income from investments | |17 | |17 | | | | | | | |Earnings before interest and taxes (EBIT)| |12,018 | |13,433 | |Interest result | |-814 | |-1,131 | |Earnings before income taxes (EBT) | |11,204 | |12,302 | |Income taxes | |-1,362 | |-932 | |Consolidated net profit | |9,842 | |11,370 | | | | | | | Preliminary Balance Sheet of the CEAG Group as of December 31, 2007 |Assets | | | | | |In thousands of EUR | |Dec. 31| |Dec. 31,| | | |, 2007 | |2006 | | | | | | | |Non-current assets | | | | | |Intangible assets | |1,349 | |1,222 | |Property, plant and equipment | |24,797 | |28,710 | |Financial assets | |5 | |5 | | | |26,151 | |29,937 | |Deferred taxes | |2,147 | |1,731 | | | |28,298 | |31,668 | | | | | | | |Current assets | | | | | |Inventories | |48,354 | |56,771 | |Trade receivables | |32,747 | |36,611 | |Other assets | |2,855 | |3,649 | |Prepaid expenses | |137 | |215 | |Cash | |15,539 | |2,522 | | | |99,632 | |99,768 | | | | | | | |Total assets | |127,930| |131,436 | | | | | | | |Equity and liabilities | | | | | |In thousands of EUR | |Dec. 31| |Dec. 31,| | | |2007 | |2006 | | | | | | | | | | | | | |Equity | |44,557 | |37,456 | | | | | | | |Non-current liabilities | | | | | |Non-current liabilities to banks | |8,970 | |2,288 | |Provisions for pensions and similar | |2,308 | |2,499 | |obligations | | | | | |Other non-current provisions | |1,321 | |1,114 | |Deferred taxes | |586 | |1,693 | | | |13,185 | |7,594 | | | | | | | |Current liabilities | | | | | |Provisions for income taxes | |659 | |693 | |Other current provisions | |2,296 | |2,157 | |Current financial liabilities | |631 | |6,057 | |Trade payables | |53,247 | |63,497 | |Income tax liabilities | |956 | |128 | |Other liabilities | |12,399 | |13,854 | | | |70,188 | |86,386 | | | |83,373 | |93,980 | | | | | | | |Total equity and liabilities | |127,930| |131,436 | | | | | | | 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 two FRIWO business units. The FRIWO Mobile Power (FMP) business unit operates in the mobile telecommunications market and is one of the world's leading manufacturers of chargers for mobile telephones. The FRIWO Power Solutions (FPS) business unit manufactures custom- made 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 and South America. CEAG AG's principal shareholder is DELTON AG, which holds almost 77% of its capital. DELTON AG DELTON AG is a holding company headquartered in Bad Homburg, Germany. With its divisions Pharmaceuticals, Household Products, Logistics and Power Supply, it manages the value-creating investment and entrepreneurial activities of its sole shareholder Stefan Quandt. DELTON AG is active in clearly defined markets offering future growth in which its divisions already hold or are intending to achieve leading positions on an international scale. With a workforce of more than 32,000 employees, the DELTON Group generated sales of around EUR 2.6 billion in fiscal 2006. ----------------------- <root/>
end of announcement euro adhoc --------------------------------------------------------------------------------
Further inquiry note:
Gudrun Richter
Investor Relations
Telefon: +49 (0) 2532-81-158
E-Mail: richter@friwo.de
Branche: Semiconductors & active components
ISIN: DE0006201106
WKN: 620110
Index: CDAX
Börsen: Börse Hamburg / free trade
Börse München / free trade
Börse Berlin / regulated dealing
Börse Stuttgart / regulated dealing
Börse Düsseldorf / regulated dealing
Börse Frankfurt / regulated dealing/general standard
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