- 2003’s results are in line with expectations, given the adverse economic climate
- Operational cash flow (EBITDA) fell by 4.9% and current net profit by 7.9%
- The balance-sheet structure was further strengthened by reducing the net financial debt to €14 million
- It is proposed to increase dividends by 15%
Consolidated annual results 2003
1. Broad outlines
Allowing for the weak economy, VPK Packaging Group’s business performance was satisfactory in 2003, as it was in 2002.
Operational cash flow (EBITDA) was €61 million, and the current net profit was €21.7 million.
The main contribution to profit came from the packaging departments and from the trade division in the UK, France and the Netherlands.
2. Consolidated results for 2003
Allowing for the weak economy, VPK Packaging Group’s business performance was satisfactory in 2003, as it was in 2002.
Operational cash flow (EBITDA) was €61 million, and the current net profit was €21.7 million.
The main contribution to profit came from the packaging departments and from the trade division in the UK, France and the Netherlands.
2. Consolidated results for 2003
Extension of the scope of consolidation: figures as at 31-12-2003 include Twinpack (NL), Ondulys Industrie (F) and Maasbach Verpakkingen (NL) for 12 months and the activities of Deva Cores (UK) for 2 months
(1) Operating profit + depreciation + amortisation + provisions.
(2) Operating profit, i.e. : the result before financial results, taxes and extraordinary results.
(3) Operating profit minus financial results but before extraordinary results and taxation.
(4) Total net profit - extraordinary result (after adjustment for taxes) + amortisation on consolidation goodwill.
(5) Current net profit + depreciation + amortisation + provisions + balance of transfers from and transfers to deferred taxes.
(1) Operating profit + depreciation + amortisation + provisions.
(2) Operating profit, i.e. : the result before financial results, taxes and extraordinary results.
(3) Operating profit minus financial results but before extraordinary results and taxation.
(4) Total net profit - extraordinary result (after adjustment for taxes) + amortisation on consolidation goodwill.
(5) Current net profit + depreciation + amortisation + provisions + balance of transfers from and transfers to deferred taxes.
3. Notes
a) turnover
In 2003, the group’s turnover rose by 3.9% to €385.8 million. The rise is mainly to be attributed to the extension of the consolidation structure. The group’s turnover (the consolidated turnover including 100% of Ondulys) amounted to €451 million in 2003. In 2003, 74% of the turnover was recorded outside Belgium.
b) investments
In 2003, a total of €27.3 million was invested in intangible and tangible fixed assets.
The intangible investments (€5.1 million) related mainly to the goodwill from the purchase of Deva Cores and the further implementation of the ERP system.
Investments in tangible assets included the finishing of the extension of the corrugated board plant in Aalst.
c) financial result
In 2003 the financial result amounted to €–4.9 million, equal to 2002.
The Group’s financial income improved by €0.7 million, but this increase was offset by financial charges, the most significant of which were exchange rate differences owing largely to the fall in the pound sterling against the euro.
At the end of the financial year, the net financial debts stood at €14 million (€33 million in 2002).
Capital and reserves (after distribution of profit) rose to €177.6 million or 51.2% of the total assets and the gearing recorded a further spectacular improvement to 8% (20.2% in 2002) which guarantees a very sound financial structure.
d) proposed dividend
The Board of Directors will propose to increase the gross dividend by 15% to €0.46 per share at the Annual General Meeting on 28 May 2004.
Statutory auditor’s report
The statutory auditor, Grant Thornton, Lippens & Rabaey BVCV, Belgian Member Firm of Grant Thornton International, represented by Mr. Stefaan Rabaey, has confirmed that its audit, which has been fundamentally completed, has not revealed any significant correction which must be incorporated into the accounting information included in the press release.
4. Comments on the main activities
Paper
In 2003, the paper machines of the Oudegem Papier produced a total of 336,000 tonnes against 344,000 tonnes in 2002.
The production of Rigid Paper (UK) amounted to 65,500 tonnes against 64,000 tonnes in 2002.
Paper prices were under pressure as a result of the overcapacity on the paper production market, and margins fell due to sharp increases in the cost of energy and in raw material prices.
The overcapacity led to paper production being suspended at Oudegem for 10 days in August 2003.
Packaging
The demand for packaging is closely tied in with the state of the economy.
VPK Packaging Group succeeded in keeping its production volume up to the mark, but here too, margins came under pressure, especially towards the end of the year.
Trade and services
The trade division was extended at the start of 2003 with the addition of Maasbach Verpakkingen (NL), specialising in trading in meat packaging. As a result, VPK Packaging Group has been able to extend its specialist trading activities, which focus on niche markets, and further reinforce its leading role as an ideal logistical partner. This development bore fruit.
5. Outlook for 2004
Economic prospects for 2004 remain uncertain in all the countries where VPK Packaging Group is active, making reliable forecasting very difficult.
What is clear is that a long-term state of overcapacity has arisen in paper production, that raw material and energy prices will continue to rise, and that, as a result, margins will come under severe pressure.
For the future, VPK Packaging Group is keeping to its strategy as a service-oriented group which creates packaging solutions for its customers with increasing added value in economically prosperous regions of Europe.
VPK Packaging Group will continue to focus on both internal and external growth.
VPK Packaging Group’s strong financial structure and profitability remain important advantages in this connection.
An investment budget of €45 million has been earmarked for 2004, so that VPK Packaging Group can continue to respond to its customers’ increasing demand for service, quality and expansion.
6. Company profile
VPK Packaging Group, listed on Euronext Brussels, has two paper plants, nine corrugated board plants for the production of transport packaging, one solid board plant, six tube-winding companies and five trading companies which confirm the Group’s role as an ideal logistical partner. Its companies are based in the Benelux, France and the UK.
VPK Packaging Group is a service organisation. In addition to its products, a great deal of attention is paid to customer’s specific requirements, under the name VPK Packaging Solutions®.
VPK Packaging Group employs over 2,600 people in five countries.
7. Financial Calendar
24 March 2004: Financial analysts’ meeting
28 May 2004 at 3 pm : General Meeting of shareholders (2003 financial year)
14 June 2004 : Dividend becomes payable
16 September 2004 : Press announcement and publication of the half-yearly results for the 2004 financial year
a) turnover
In 2003, the group’s turnover rose by 3.9% to €385.8 million. The rise is mainly to be attributed to the extension of the consolidation structure. The group’s turnover (the consolidated turnover including 100% of Ondulys) amounted to €451 million in 2003. In 2003, 74% of the turnover was recorded outside Belgium.
b) investments
In 2003, a total of €27.3 million was invested in intangible and tangible fixed assets.
The intangible investments (€5.1 million) related mainly to the goodwill from the purchase of Deva Cores and the further implementation of the ERP system.
Investments in tangible assets included the finishing of the extension of the corrugated board plant in Aalst.
c) financial result
In 2003 the financial result amounted to €–4.9 million, equal to 2002.
The Group’s financial income improved by €0.7 million, but this increase was offset by financial charges, the most significant of which were exchange rate differences owing largely to the fall in the pound sterling against the euro.
At the end of the financial year, the net financial debts stood at €14 million (€33 million in 2002).
Capital and reserves (after distribution of profit) rose to €177.6 million or 51.2% of the total assets and the gearing recorded a further spectacular improvement to 8% (20.2% in 2002) which guarantees a very sound financial structure.
d) proposed dividend
The Board of Directors will propose to increase the gross dividend by 15% to €0.46 per share at the Annual General Meeting on 28 May 2004.
Statutory auditor’s report
The statutory auditor, Grant Thornton, Lippens & Rabaey BVCV, Belgian Member Firm of Grant Thornton International, represented by Mr. Stefaan Rabaey, has confirmed that its audit, which has been fundamentally completed, has not revealed any significant correction which must be incorporated into the accounting information included in the press release.
4. Comments on the main activities
Paper
In 2003, the paper machines of the Oudegem Papier produced a total of 336,000 tonnes against 344,000 tonnes in 2002.
The production of Rigid Paper (UK) amounted to 65,500 tonnes against 64,000 tonnes in 2002.
Paper prices were under pressure as a result of the overcapacity on the paper production market, and margins fell due to sharp increases in the cost of energy and in raw material prices.
The overcapacity led to paper production being suspended at Oudegem for 10 days in August 2003.
Packaging
The demand for packaging is closely tied in with the state of the economy.
VPK Packaging Group succeeded in keeping its production volume up to the mark, but here too, margins came under pressure, especially towards the end of the year.
Trade and services
The trade division was extended at the start of 2003 with the addition of Maasbach Verpakkingen (NL), specialising in trading in meat packaging. As a result, VPK Packaging Group has been able to extend its specialist trading activities, which focus on niche markets, and further reinforce its leading role as an ideal logistical partner. This development bore fruit.
5. Outlook for 2004
Economic prospects for 2004 remain uncertain in all the countries where VPK Packaging Group is active, making reliable forecasting very difficult.
What is clear is that a long-term state of overcapacity has arisen in paper production, that raw material and energy prices will continue to rise, and that, as a result, margins will come under severe pressure.
For the future, VPK Packaging Group is keeping to its strategy as a service-oriented group which creates packaging solutions for its customers with increasing added value in economically prosperous regions of Europe.
VPK Packaging Group will continue to focus on both internal and external growth.
VPK Packaging Group’s strong financial structure and profitability remain important advantages in this connection.
An investment budget of €45 million has been earmarked for 2004, so that VPK Packaging Group can continue to respond to its customers’ increasing demand for service, quality and expansion.
6. Company profile
VPK Packaging Group, listed on Euronext Brussels, has two paper plants, nine corrugated board plants for the production of transport packaging, one solid board plant, six tube-winding companies and five trading companies which confirm the Group’s role as an ideal logistical partner. Its companies are based in the Benelux, France and the UK.
VPK Packaging Group is a service organisation. In addition to its products, a great deal of attention is paid to customer’s specific requirements, under the name VPK Packaging Solutions®.
VPK Packaging Group employs over 2,600 people in five countries.
7. Financial Calendar
24 March 2004: Financial analysts’ meeting
28 May 2004 at 3 pm : General Meeting of shareholders (2003 financial year)
14 June 2004 : Dividend becomes payable
16 September 2004 : Press announcement and publication of the half-yearly results for the 2004 financial year
For additional information:
Pierre MACHARIS, CEO
Luc LEDEGEN, Investor Relations
Tel.: +32 (0)52 26 12 08
E-mail : luc.ledegen@vpk.be
Pierre MACHARIS, CEO
Luc LEDEGEN, Investor Relations
Tel.: +32 (0)52 26 12 08
E-mail : luc.ledegen@vpk.be
Last update: 23-03-2004
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