EANS-Adhoc: CHRIST WATER TECHNOLOGY AG
CHRIST completes FY 2008 clean-up of
`poison projects´ and restructuring and takes strategic decisions
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Company Information
17.04.2009
Sales +10% to EUR 307.0 million (EUR 278.2 million) Order intake EUR 230.3 million (-29%) EBIT EUR -18.4 million (EUR +6.0 million) Operating cash flow EUR +1.6 million (EUR -15.6 million) CHRIST in front of strategic alliance for Food & Beverage
"The year 2008 turned out to be a challenging year for the CHRIST Group and was closed with an unexpected high net loss. A clear focus on profitability and cashflow as well as a reduction of risk and complexity meant a new orientation following the precedent time of growth and acquisitions, " says Malek Salamor, CEO of the Christ Water Technology Group.
Based on the high order backlog and the consolidation of the Zeta Group, net sales grew by 10% to EUR 307.0 million in 2008 (2007: EUR 278.2 million).
Order intake of EUR 230.3 million was down by 29% compared to a record year 2007 due to a large desalination order booked. The first-time inclusion of the bio-pharma activities of the new subsidiary Zeta pushed up Pharma orders by 90% while the deliberate withdrawal in turnkey power projects reduced volume in the Ultrapure Water division. The order backlog amounted to EUR 151.8 million as of December 31st, 2008.
Earnings before interest, taxes and depreciation/amortisation (EBITDA) was negative at EUR -7.2 million after EUR +9.7 million last year. The completion of a number of turnkey power projects sold at fixed prices in the past as well as negative or inactive projects in the Food & Beverage Division led to excessive losses due to lengthy execution schedules and cost overruns in material and third party cost. The negative impact of such `poison projects´ on the EBIT summed up to EUR 16.5 million in 2008.
The transformation process of the Group required the closing or down-sizing of non profitable companies and termination of businesses activities with extra cost of EUR 4.1 million. The increase of depreciations from the previous year´s EUR 3.7 million to EUR 11.2 million, included EUR 5 million write-offs via impairments of goodwill mainly in Joint Ventures and intangible assets. Thus, EBIT was at EUR -18.4 million after EUR +6.0 million in the year 2007. Adjusting for the mentioned special effects of roughly EUR 24.6 million, - including other positive and negative one-time effects of net EUR +1.0 million - a `normalized EBIT´ would have been EUR 6.2 million.
The net result of EUR -27.5 million (2007: EUR +1.7 million) was also impacted by the write-off of deferred taxes of EUR 3.4 million following the negative development in loss making and restructured group companies.
A positive signal can be reported from the cash side. After years of negative cashflow developments, operating cash flow could be turned into positive at EUR +1.6 million (2007: EUR -15.6 million). Cash flow from investing activities amounted to EUR -5.7 million (2007: EUR -7.8 million) and included capital expenditures of EUR 5.0 million. Total financial liabilities of the CHRIST Group as at December 31st, 2008 amounted to EUR 73.9 million, whereof EUR 50 million stem from a corporate bond with duration until 2013 and a coupon of 5.25%. The net position including cash and cash equivalents gave net debt of EUR 54.7 million (2007: EUR 42.2 million including interest-bearing financial receivables).
Due to the net loss, equity was reduced as at December 31st, 2008 to EUR 37.0 million (i.e. 16% equity ratio) after EUR 63.8 million or 27.7% the year before. Gearing as the ratio of net debt to equity showed an increase from 66% to 148%. The major credit facilities were renegotiated recently.
Outlook
"We have improved our flexibility and efficiency significantly during the past months and successfully executed our transformation concept which we started in September 2008. The number of employees has been reduced by 15% and through continuously reducing complexity we saved about EUR 10 million of cost. Our target is to return to profitability despite the current economic slow-down," says Malek Salamor, CEO of the Christ Water Technology Group. "To accelerate in the process of refocusing the Group and to allow Van der Molen a sustainable future development in the market of process technology for the beverage industry, we have taken the decision to form an alliance in the Food & Beverage division. In this context also two Italian based companies were sold to local business partners with effect January 1st, 2009. Besides good project activities in the pharmaceutical industry, there are also positive signs in the public or municipal infrastructure and utility projects including water treatment and desalination projects. Headed by one of the biggest water treatment orders ever placed in South Africa worth approx. EUR 60 million, we can report a solid order intake in Q1 2009 of almost EUR 90 million (Q1 2008: EUR 69 million). Nevertheless, earnings guidance for 2009 is currently very difficult as the health of the global economy is still not clear. Based on the corrected negative developments of the previous periods and the prevailing framework, we expect an adequate decline of net sales. Due to the improved cost structure and the cleaned project environment the basis for positive net result is well prepared."
The Annual Report and Annual Financial Report 2008 will be available as of April 30th, 2009 on the homepage www.christwater.com
end of announcement euro adhoc
Further inquiry note:
Christ Water Technology AG
Mag. Ralf Burchert
ralf.burchert@christwater.com
Tel.: 06232/5011-1113
Branche: Biotechnology
ISIN: AT0000499157
WKN: 675399
Index: WBI, ATX Prime
Börsen: Wiener Börse AG / official market