schlott gruppe Aktiengesellschaft / Restructure of Company 10.06.2009 Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- schlott gruppe AG announces extensive restructuring > Supervisory Board approves extensive measures to secure the company's future > Reduction in machine capacity by 20 per cent > Cutting of approx. 350 jobs Freudenstadt, 10 June 2009. At its meeting of June 9, 2009, the Supervisory Board of schlott gruppe AG has discussed an extensive catalogue of measures drawn up with the express purpose of securing the future viability of schlott gruppe. The restructuring programme was approved by the majority of the representatives of the shareholders. This programme of measures is aimed at counteracting the negative impact of the economic crisis in terms of production demand and with regard to the significant pressure exerted on prices within the market for print media, in addition to guiding the company back towards profits in a manner that is sustainable in the long term. The management board addresses the concerns of the employees' representatives by ensuring all applicable legal preconditions granted to prefect the rights of the employees. The plan involves a reduction of 20 per cent in the installed machine capacity from 600,000t at present to 480,000t and around 350 job cuts (out of 2,330 jobs at present). The sites in Northern Germany will be affected by direct job cuts. Together with further supplementary cost-cutting measures, there is to be a lasting improvement of around EUR 25 million in profitability. The aim is to achieve a positive pre-tax result again next year, before any one-off effects due to restructuring, and then to increase profitability gradually up to the 2011/12 financial year. Negative general conditions At present, the company - like the entire European printing industry - is in a difficult situation, which has been aggravated by the financial and economic crisis. The sector as a whole has seen a further drop in demand since the beginning of the year. As there is already excess capacity on the market, this situation leads to a considerable problem with prices and volumes. Experts also believe that the printing industry will not return to the levels seen before the crisis. schlott gruppe AG, one of Europe's leading rotary printing companies, has also registered a significant decline in its order intake, while the overall level of prices is lower and costs are increasing at the same time, particularly in the areas of staff, energy and transport costs. While value-added sales (VAS) fell slightly from EUR 230.1 million to EUR 225.5 million between 2005/06 and 2007/08, earnings before tax (EBT) dropped significantly by EUR 26 million. In the last financial year, 2007/08, only a balanced pre-tax result was achieved before restructuring costs. The latest figures confirm this negative development: value-added sales fell by 17 per cent year-on-year in the second quarter of 2008/09, while there was a drop in the printed tonnage of 37,000t (12 per cent) in the same period. Before non-operational effects, the development of earnings before tax (EUR -1.6 million in the same period of the previous year) was negative again. There has been a considerable drop in prices in the last few years, particularly in the field of gravure printing. The gross operating profit will have dropped by a total of 24 per cent between the 2005/06 financial year and the end of the 2008/09 financial year with adjustments for acquisitions, with a simultaneous drop in volumes of 11 per cent. Details of the planned measures The plan involves a reduction in the total machine capacity installed in the field of gravure printing from 600,000t at present to 480,000t; this represents a reduction by a total of five machines at various sites. At the same time, capacity for post-processing services will be adjusted accordingly. As a result, schlott gruppe will cut around 350 of the 2,330 jobs at various sites by spring 2010. If overall economic conditions become even more negative than the assumptions on which the restructuring programme is based, this catalogue of measures will be extended further. Further measures to reduce personnel costs that will affect all employees, such as the long-term abolition of one-off payments under collective pay agreements or an extension of weekly working hours, are also urgently required in order to achieve the necessary savings. Extensive measures are also planned on the financing side, in order to strengthen the financial basis of schlott gruppe AG. Vision 2012 The aim of the measures that have been announced is to adapt printing and further processing capacity to demand and achieve a high degree of flexibility. This will allow schlott gruppe AG to detach itself from the price war in the printing industry and create a stable basis for its future development. schlott gruppe AG is convinced that this extensive restructuring programme is an important prerequisite for securing the future of the company and a large proportion of jobs in the long term. When the measures described have been completed, schlott gruppe AG will remain one of the leading rotary printing companies on the European market. Explanation of financial data: Both in external communications and in internal management, schlott gruppe uses the figure 'value-added sales' in addition to 'sales'. Sales are subject to fluctuations resulting from customers' habits in providing paper: in contrast to paper purchased by the company itself, paper provided by customers does not go through the accounts of schlott gruppe. In the 2007/08 financial year, the paper provision rate was 72.0 per cent. The value-added sales eliminate fluctuations in paper provision habits and thus reflect the actual development of business. schlott gruppe AG Marco Walz Investor Relations & PR Wittlensweilerstraße 3 72250 Freudenstadt GERMANY Tel.: +49 7441 531-230 Fax: +49 7441 531-404 marco.walz@schlottgruppe.de www.schlottgruppe.de DGAP 10.06.2009 --------------------------------------------------------------------------- Language: English Issuer: schlott gruppe Aktiengesellschaft Wittlensweilerstraße 3 72250 Freudenstadt Deutschland Phone: +49 (0)7441 531-230 Fax: +49 (0)7441 531-204 E-mail: marco.walz@schlottgruppe.de Internet: www.schlottgruppe.de ISIN: DE0005046304 WKN: 504630 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Hamburg, Düsseldorf, Stuttgart, München End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: schlott gruppe AG announces extensive restructuring
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