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A.S. Création Tapeten AG: Unsatisfactory profitability in FY 2011

DGAP-News: A.S. Création Tapeten AG / Key word(s): Final Results
A.S. Création Tapeten AG: Unsatisfactory profitability in FY 2011

22.03.2012 / 10:06

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A.S. Création Tapeten AG, Gummersbach
(ISIN DE0005079909)

Unsatisfactory profitability in FY 2011

Sales revenues hit new record
2011 was another fiscal year in which A.S. Création was able to increase
its Group revenues. At EUR 192.3 million, sales revenues were up by 4.1% on
the previous year´s EUR 184.6 million. This was a much more dynamic
increase than the previous year´s 1.8%. Growth was primarily driven by the
German market, non-EU Eastern European countries and some Asian markets,
especially China, where the intensified product development activities had
a positive effect. By contrast, sales growth in the EU (excluding Germany)
was unsatisfactory, especially in France market, where demand was weak in
2011.

Adverse impacts on the bottom line
In spite of the increase in sales, earnings fell short of expectations.
A.S. Création generated a net profit of EUR 4.6 million in FY 2011, down
44.6% on the previous year´s EUR 8.4 million, which means that the decline
was much higher than provided for in the 2011 forecast. This is primarily
attributable to the sharp rise in commodity and energy prices. The increase
in some of our product prices, which was imposed with effect from March 1,
2011, was insufficient from today´s point of view. Accordingly, the gross
profit margin reached only 45.8%, down on the previous year´s 48.5%.  Based
on the total output of EUR 193.5 million for the full year 2011, this
translates into a gross profit shortfall of EUR 5.2 million. The costs
incurred in conjunction with the start-up of the Russian production
facility also weighed on the bottom line.

Sound financial position
As expected, capital expenditures reached a very high level. Following the
majority takeover of two French wallpaper wholesalers in 2008, the
remaining shares were acquired in 2011 as agreed. Together with the
start-up of the wallpaper production facility in Russia, this led to
capital expenditures of EUR 19.7 million in FY 2011, up EUR 12.9 million on
the previous year´s EUR 6.8 million. As A.S. Création´s financial resources
were insufficient to finance the unusually high capital expenditures, net
financial liabilities increased to EUR 29.4 million as of December 31, 2011
(2010: EUR 16.3 million). A high equity ratio of 56.9% (2010: 54.9%) and a
low leverage of 32.9% (2010: 18.3%) show that the financial structure of
A.S. Création remains very sound.

Consistent dividend policy
In spite of the uncertain conditions prevailing in 2012 and the financing
requirements resulting from the start-up of production in Russia, A.S.