AUGSBURG, Germany, April 5, 2004 (PRIMEZONE) -- In 2003 the BOWE SYSTEC Group once again enjoyed a very successful financial year. As the Board of Directors reported at today's closing accounts press conference called by the specialists in high-performance inserting systems and associated services, BOWE SYSTEC achieved the highest turnover and group net profit since the group was established. In the financial year 2003 the group achieved a leap in turnover, based on investment, of 69% to EUR 346.4 million, from EUR 204.6 million in 2002. The net earnings of EUR 16.2 million mean a growth of 16% on the previous year's figures. The growth in results was adversely affected by the clear exchange rate loss from the US$ to the Euro and by one-off expenditure on the integration of the 50% participation in BOWE Bell + Howell, USA.
With the acquisition of BOWE Bell + Howell, BOWE SYSTEC has taken a decisive step forward in ensuring sustained growth in turnover and results for the future. In the financial year 2003, priority was given to promoting the smooth integration of the American sales and service network of BOWE Bell + Howell into the organisation of the BOWE SYSTEC Group, in order to release the high potential arising from the merger. By the second half of the year the first successes became apparent, such as a clear reduction in the number of employees required for the US organisation.
A Leap in Turnover of Almost 70%
In the financial year 2003, the BOWE SYSTEC Group recorded a leap in turnover, based on acquisitions, of around 70%. With the first quoted inclusion of the 50% participation in BOWE Bell + Howell, USA, the group turnover grew from EUR 204.6 million to EUR 346.4 million.
At EUR 191.8 million, more than half of the total turnover was generated in the North American region, the biggest single market for paper management systems and associated systems. In the financial year 2002, BOWE SYSTEC achieved a turnover of EUR 50.0 million on the North American continent. At EUR 154.6 million, the turnover outside North America in 2003 was exactly the same as the previous year's level. In the financial year 2003, turnover from services contributed the greatest proportion of the group turnover (45.5%) and amounted to EUR 157.5 million compared with EUR 98.6 million in the previous year.
In the year just gone, the turnover development of the BOWE SYSTEC Group was very heavily impacted by the change in relations of the exchange rates between the US dollar, the yen and the euro. As a consequence of the high proportion of turnover achieved outside Europe (70.9%), this exchange rate effect reduced the growth of the group turnover by over EUR 30 million.
Results After Tax Reach a New High
In the financial year just gone, the BOWE SYSTEC Group saw a substantial increase in its operating results (EBITDA) and the net profit for the year. At EUR 16.2 million, the net profit represents an increase of 16% over the previous year (EUR 14.0 million), a new high in the company history of the BOWE SYSTEC Group. A similarly positive development can be seen in the earnings before interest, tax, depreciation and amortization (EBITDA), which increased by 29% from EUR 34.1 million in the financial year 2002 to EUR 44.0 million in the past year. As amortization of goodwill increased compared with the previous year by EUR 3.7 million to EUR 5.9 million, the earnings before interest and tax (EBIT) only increased by 6.7% to EUR 28.6 million. The earnings from usual business activities, which also include the negative financial results, showed a regression of EUR 2.2 million to EUR 21.6 million. The tax expenditure within the Group dropped due to the benefit of carrying forward losses at a rate of around 26%. The overall earnings development must be viewed against the background of the following negative effects: a loss in value of the US$ against the Euro, increased goodwill depreciation and one-off payments in connection with the merger of the two former competitors in the USA. These one-off payments will have a positive effect in future on the earnings situation of the Group.
The DVFA/SG results adjusted to take account of special influences indicates an increase from EUR 13.1 million to EUR 15.7 million for the financial year 2003. A DVFA/SG profit per share - based on the weighted average number of shares for the year 2003 of 6,098 million - of EUR 2.57 was achieved (previous year: EUR 2.17).
Dividends at EUR 1.25
The Board of Directors of BOWE SYSTEC AG will, subject to the agreement of the Supervisory Board, propose to the General Meeting to be held on 19 May 2004 a dividend payment of EUR 1.25 per share. The dividend per share thus remains unchanged compared with the previous year. However, the payout sum has increased, above all due to the 500,000 new shares issued in December 2003, to EUR 8.2 million, compared with EUR 7.3 million in the previous year.
Number of Employees Substantially Increased
On 31 December 2003, 2,684 employees worked for the BOWE SYSTEC Group. The workforce of the 50%-owned BOWE Bell + Howell with 1,104 employees was accounted for proportionally (previous year: 265 employees at BOWE SYSTEC Inc., USA). At the end of the previous year the number of employees in the Group, including those employed by the US subsidiary at the time, BOWE SYSTEC Inc., was 1,846. At the end of the year the companies in Germany employed 928 people, a situation which was virtually unchanged from the number (934) at the same date of the previous year.
Order Intake Up +68%
The trends of the order intake shows a similar pattern to the turnover developments. For the whole Group, the merger in the USA led to a rise from EUR 193.4 million in 2002 to EUR 323.9 million by the end of the last financial year. This corresponds to an increase of 68%. In North America the volume of orders obtained increased in comparison with the previous year from EUR 37.7 million to EUR 176.0 million. Exchange rate effects also reduced the growth in the area of order intake.
The orders outstanding for the BOWE SYSTEC Group stood at a figure of EUR 40.0 million at the 2003 year end. Compared with the balance sheet date for 2002 this represents an increase of 79%. As in previous years, the orders outstanding values do not include longer-term service contracts. In the financial year 2003 these contributed a share of 45.5% to the Group turnover, with a sum of EUR 157.5 million.
Further Growth in 2004
In the current difficult economic situation, BOWE SYSTEC benefits from its improved position in the market. While in Europe the established, well-developed service network has always formed a sound basis for growth and success in previous years, our customers in the USA can now also benefit from a substantially improved presence.
The 50% acquisition of the former competitor Bell + Howell provides BOWE SYSTEC not only with wider access to the US market, but also with the benefit of a widespread service and sales network in North America. The course is therefore set for further continued growth for many years to come.
The high proportion of the overall Group turnover generated by longer-term service contracts can be viewed as a positive commercial development for the coming year. Following the successfully implemented integration of the two companies forming BOWE Bell + Howell the firm is now also looking forward to a noticeable increase from the previous year in product sales. For the financial year 2004 substantial savings will arise from the merger, for example the reduced level of employees in the USA compared with the previous year.
The plan for the financial year 2004 forecasts a turnover of EUR 350 million and a further increase in results.
BOWE SYSTEC Group figures:
Figures in EUR million 2003 2002 Var. in %
Sales 346.4 204.6 +69.3
thereof abroad in % 91.3 85.9 -
thereof service in % 45.5 48.0 -
Order intake 323.9 193.4 +67.5
Investments 9.2 93.1 -90.1
Depreciation 15.4 7.5 +105.3
EBITDA 44.0 34.1 +29.0
EBIT 28.6 26.8 +6.7
Result from ordinary activities 21.6 23.8 -9.2
Net income 16.2 14.0 +15.7
DVFA/SG-Cash Flow 33.5 21.1 +58.8
Equity 94.9 82.2 +15.5
DVFA/SG-earnings per share (EUR) 2.57 2.17 +18.4
Dividend per share (EUR) 1.25 1.25 +/-0.0
Employees (number, annual average) 2,674 1,847 +44.8
Financial Calendar 2004:
Apr 05 Analysts' conference, Frankfurt am Main
May 12/13 Analysts' conference, Paris
May 19 Annual Shareholders' Meeting, Augsburg
May 21 Dividend payment
May 25 Interim report as of March 31, 2004
Aug 31 Interim report as of June 30, 2004
Nov 23 Interim report as of September 30, 2004
BOWE SYSTEC AG
The Board of Directors