DGAP-Adhoc: Cham Paper Group Holding AG: Restructuring well on its way
Cham Paper Group Holding AG / Key word(s): Half Year Results
23.08.2013 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR
---------------------------------------------------------------------------
- Restructuring is well on its way, relocation has been completed
- EBIT is at CHF 2.0 million, net profit at CHF 1.6 million
- Net revenue increase in all strategic product segments
- Free cash flow of CHF 8.4 million leads to further reduction in net debt
and strengthens balance sheet
- Italian paper mills sold to Delfort Group, concentration fully focussed
on Swiss activities
- Transformation of Papieri Park: vision has been formulated and urban
planning study commissioned
In putting its comprehensive restructuring plan into effect the Cham Paper
Group reached further key milestones during the first half of 2013. The
transfer of key product segments from Cham to Carmignano - prepared in 2012
and executed during the second quarter of 2013 - has succeeded and the
associated processes have been established. The second paper machine in
Cham was shut down at the end of March as scheduled. The 'Cham
specialities' - in particular for Digital Imaging customers - are now being
produced using sourced base papers on both coating machines in the same
excellent quality our customers have grown to expect. The Cham coating unit
- focussing fully on surface coatings and finishings - is set to become
established as a niche player offering a high share of services in
attractive growth markets. Shortly after the close of the reporting period,
a sales agreement was signed for the Italian mills - well positioned after
the product transfer - to the Delfort Group, whose product range dovetails
with the Cham Paper Group's own.
In terms of figures, performance in the first half of 2013 was as
projected. Net revenue fell by 23% to CHF 119.3 million (prior-year period:
CHF 155.0 million) on account of the paper machines shut down in Cham at
the end of June 2012 and the end of March 2013; at 77,750 tons (104,186
tons), the volume of speciality papers sold fell by 25%. However, sales
continued to rise in strategic key product segments. Despite the demands
placed on the Group by the transfer and the associated costs and expenses
incurred, an operating profit of CHF 2.0 million (prior-year period: CHF
2.7 million) resulted, corresponding to an EBIT margin of 1.7% (1.8%). The
net profit for the first half of 2013 amounted to CHF 1.6 million (CHF 0.2
million). The free cash flow achieved during the first half amounted to a
welcome CHF 8.4 million (previous year: CHF 4.4 million), the Group's net
debt dropping to CHF 13.2 million despite the dividend of approx. CHF 2
million disbursed to shareholders in May of 2013.
Carmignano benefits from adaptation of product range, Condino continues to
grow
The two mills in Carmignano and Condino have trended favourably in 2013.
Sales topped the prior-year figure by well over 3%, although comprehensive
testing with the innerliner papers in Carmignano tied up considerable in
the way of funds and capacity. The successfully completed relocation
enabled the mill to sustainably optimise its product mix over the following
months, which also included introducing price increases. In Condino the
demand for glassine papers, the mill's main product, continued to rise at
an already favourable level. The margin improvements achieved also had a
positive impact on operating profit.
Continued growth dynamic in Transjet papers from Cham
In Digital Imaging, the positive trend in the Transjet product line
continues. The first half of 2013 again saw double-digit growth. The
geographical expansion of markets to North Africa and South America is
progressing well. In Inkjet Papers, the focus is on developing new
products. Now that testing has been successfully concluded the market
launch of a product for high-speed inkjet printing is right around the
corner in the second half of 2013.
The Barnamic family has undergone further development, however no sales
were recorded for it during the first half of 2013. In addition to the
existing individual water vapour and oxygen barriers Cham has successfully
engineered a product that combines both. In addition, testing with the
newly developed barriers against mineral oil components has been showing
excellent results. On the whole, over thirty projects involving Barnamic
applications are currently in progress.
Restructuring frees up further funds and strengthens balance sheet
Restructuring enabled additional funds to be released during the first half
of 2013. A free cash flow of CHF 8.4 million was achieved thanks in
particular to a further reduction in net working capital by 13.7% and
stringent cost control. Net debt was successfully reduced by another CHF
4.8 million despite a dividend payment of CHF 2.1 million. The equity ratio
is at a comfortable 41.2%.
Sale of Italian mills to the Delfort Group
During the past couple of months the Board of Directors of the Cham Paper
Group has examined strategic options that may restore a sustainable growth
dynamic to the speciality paper business after the comprehensive
restructuring over the past eighteen months. Integration of the two
complementary Italian mills in the Delfort Group was evaluated as a
promising alternative in this regard. Domiciled in Traun, Austria, the
Delfort Group develops, produces and markets with its 1,750-strong
workforce speciality papers in five mills located in Austria, Hungary, the
Czech Republic and Finland. Like the Cham Paper Group, this family-owned
and operated company has an acknowledged market position in various areas
of the speciality papers market.
The acquisition is subject to approval by the competent anti-trust
authorities. The transaction is expected to go through in the fourth
quarter of 2013. The enterprise value amounts to approx. EUR 86 million.
This figure includes bank debts of approx. EUR 45 million, which will be
assumed by the purchaser. The net purchase price will be paid in cash. The
parties are maintaining confidentiality on the details of the sales
agreement. The activities of the Cham Paper Group in Switzerland will not
be significantly impacted by the sale of the Italian mills.
Outlook: concentration fully focussed on Swiss activities
The small but innovative Cham Paper Group Schweiz AG (Solutions) will have
to prove itself in the marketplace over the coming twelve to eighteen
months. The market trends in the Digital Imaging segment are positive. The
Transjet segment is set to undergo significant growth. The newly developed
products for the high-speed inkjet printing presses will be market-ready in
the second half of the year and will then encounter a rapidly growing
market. Interest in the Barnamic technology is pronounced; however,
implementing a fully new concept in flexible packaging - as is the Barnamic
- takes time and the market must adjust to this new idea. Recently the Cham
mill has been offering contract coatings and finishings catering for
exacting customer requirements. Now sales volumes have to be successfully
increased and sustainable profitability enabled from 2015 on. Until then
production will take place on the Group's existing grounds, after which
production facilities will have to be relocated.
Papieri Park: vision has been formulated and urban planning study
commissioned
The Cham Paper Group and the municipality of Cham are currently working in
concert on transforming the use of the factory grounds to be vacated. In
the cooperative planning process, they are consulting the key stakeholders
and the local populace of Cham. The first half of 2013 saw the formulation
of the vision and the guiding principles of the new town district derived
from it. They were wholly confirmed by virtue of participation on the part
of the populace. During the second half of 2013 four qualifying
architectural firms will be tasked with an urban planning study. The
findings of this study will form the basis for the subsequent procurement
of planning funds. This will be followed by a popular referendum of Cham's
electorate anticipated for the end of 2014/beginning of 2015 on the
implementation of rezoning required to this end.
The costs of the development and planning process of the Papieri Park are
covered for the most part until 2015 by revenue from interim leasing
contracts and the operations of Cham Paper Group Schweiz AG (Solutions).
During the past twelve months a large number of new tenants have moved onto
the Cham grounds; the demand for office, storage and parking space is high.
Break-even operating result expected
The Board of Directors reckons with a break-even operating result for FY
2013. The effect that the sale of the Italian mills will have on the
consolidated financial statements cannot as yet be determined with any
precision.
Please note: on 23 August 2013, at 9:00 CEST, there will an analyst
conference call (conference ID: 4635391) with Delegate of the Board of
Directors Urs Ziegler and Finance & Controlling Head Luis Mata to discuss
the half-year results. To take part, call: +41 22 592 73 12.
The Cham Paper Group will be giving a company presentation on 11 September
2013 from 9:55 - 10:40 am at Investora, the small and mid cap conference,
at the Zurich Marriot Hotel. For further details, please consult:
www.investora.ch.
---------------------------------------------------------------------------
Information and Explaination of the Issuer to this News:
For further information please contact:
Media and IR Office, Cham Paper Group Holding AG
c/o Dynamics Group
Edwin van der Geest / Philippe Blangey
E-mail: media@cham-group.com and/or investor@cham-group.com
Phone: +41 43 268 32 32
Registered shares of Cham Paper Group Holding AG
Swiss Securities Number / ISIN / Ticker:
193 185 / CH0001931853 / CPGN
Cham Paper Group
Cham Paper Group is a leading manufacturer of coated speciality papers. The
group generates value added for its customers by providing finishing-based
functional capabilities. Founded in 1657, at its three locations in
Switzerland and Italy the company develops and manufactures speciality
papers for use in the consumer goods, industrial release and digital
imaging sectors. The consumer goods sector encompasses papers for flexible
packaging and base papers for label printing in the food, non-food,
tobacco, beverage and pharmaceutical industries. In terms of the industrial
release sector, Cham Paper Group supplies silicone-base papers for release
liners used in graphical applications and for adhesive tapes and labels.
The company also supplies base papers for process liners used in industrial
casting and laminating process applications. Facestock papers for the
self-adhesive industry round off the range. In addition to large-format
inkjet papers for indoor and outdoor applications, the digital imaging
sector also includes sublimation papers for digital textile printing. Cham
Paper Group has benefited from the trend for sustainable products and is
well established on the market thanks to the company's technological
innovation. Cham Paper Group (stock exchange symbol: CPGN) is listed on the
SIX Swiss Exchange as an independent company.
+++++
Additional features:
Document: http://n.equitystory.com/c/fncls.ssp?u=OTIHTQIMRJ
Document title: Press Release HY Report 2013
23.08.2013 News transmitted by EQS Schweiz AG.
The issuer is responsible for the contents of the release.
EquityStory publishes regulatory releases, media releases on the capital
market and press releases.
The EquityStory Group distributes authentic and real-time financial news
for over 1'300 listed companies.
The Swiss news archive can be found at www.equitystory.ch/news
---------------------------------------------------------------------------
Language: English
Company: Cham Paper Group Holding AG
Fabrikstrasse
6330 Cham
Switzerland
Phone: +41 41 785 33 33
Fax: +41 41 785 31 50
E-mail: mail.cham@cham-group.com
Internet: www.cham-group.com
ISIN: CH0001931853
Valor: -
Listed: SIX
End of Announcement EQS Group News-Service
---------------------------------------------------------------------------