- 2004’s results are characterised by a slight increase of the turnover and the market share but also by smaller profit margins.
- Operational cash flow (EBITDA) fell by 10,2% and net cashflow by 7,4%
- The strong balance-sheet stayed intact : further decrease of the net financial debt.
Consolidated Annual Results 2004
1. Broad outlines
In 2004 the business performance of VPK Packaging Group was characterised by smaller profit margins due to the increasing raw material and energy costs, which could not be entirely integrated in the sale prices because of overcapacity in the sector of the raw materials ( recycled paper ) as well as in the packaging sector.
Operational cash flow (EBITDA) was €54,7 million, and the current net profit was €22,4 million.
The consolidated turnover increased with 1,7% to €390,8 million and is mainly achieved by the growth of the corrugated board activities in the Benelux countries and UK, the Business Unit “Solid Board” and the Business Unit “Cores”.
2. Consolidated results for 2004
In 2004 the business performance of VPK Packaging Group was characterised by smaller profit margins due to the increasing raw material and energy costs, which could not be entirely integrated in the sale prices because of overcapacity in the sector of the raw materials ( recycled paper ) as well as in the packaging sector.
Operational cash flow (EBITDA) was €54,7 million, and the current net profit was €22,4 million.
The consolidated turnover increased with 1,7% to €390,8 million and is mainly achieved by the growth of the corrugated board activities in the Benelux countries and UK, the Business Unit “Solid Board” and the Business Unit “Cores”.
2. Consolidated results for 2004
Extension of the scope of consolidation: figures as at 31-12-2004 include the results of the following acquired companies : Deva Cores (UK) for 12 months, Ecotubes (B) for 4 months and Recycling Company Van Assche (B) for 3 months.
(1) EBITDA = Operating profit + depreciation + amortisation + provisions.
(2) EBIT = Operating profit, i.e. : the result before financial result and taxes
(3) Net cash flow= Net profit + depreciation + amortisation + provisions.
(1) EBITDA = Operating profit + depreciation + amortisation + provisions.
(2) EBIT = Operating profit, i.e. : the result before financial result and taxes
(3) Net cash flow= Net profit + depreciation + amortisation + provisions.
3. Notes
In general :
In the financial year 2005 all companies which are quoted on the stock exchange are obliged to publish their annual results in accordance with the “International Financial Reporting Standards” (IFRS). The Board of Directors of VPK Packaging Group already drew up his figures according to the IFRS-standards which has a positive impact on the equity and the operating results. In order to compare 2004 and 2003 figures, the 2003 figures have been restated. The application of the new standards has expecially influenced the appraisel of the tangible assets, pension provisions and technical reserves as well as on the passive tax latency. The quantitave information regarding the impact of the transition towards IFRS-standards shall be published at the website at the beginning of April 2005.
a) turnover
The consolidated turnover increased with 1,7% to €390,8 million Euro.
b) investments
In 2004, a total of €29,1 million was invested in intangible and tangible fixed assets, which is an increase of 8,5% compared to 2003.
The intangible investments (€1,9 million) related mainly to the further implementation of the ERP system.
Investments in tangible assets included the erection of a new factory for corrugated board in Selby (UK) in order to have an ultramodern transforming unit that complies with the severest environment and security requirments.
c) financial result
In 2004 the financial result improved to €-0,3 million thanks to a further decrease of the net financial depts.
Equity (before distribution of profit) rose to €217,1 million or 59,3% of the total assets and
the gearing recorded a further decrease to 7,8% which guarantees a very sound financial structure.
d) proposed dividend
The Board of Directors will propose to increase the gross dividend by 10,9% to €0,51 per share at the Annual General Meeting on 27 May 2005.
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 and recycled paper
In 2004, the paper machines of the Oudegem Papier (3 paper mills) produced a total of 343.000 tonnes against 337,000 tonnes in 2003. The production of Rigid Paper (UK) amounted to 70.500 tonnes against 65.000 tonnes in 2003.
Paper prices were under pressure as a result of the overcapacity on the paper production market; the margins were under pressure especially due to strong increases of the energy costs.
Packaging
The demand for packaging is closely tied in with the state of the economy.
The tendency in the packaging industry to move towards Central and Eastern Europe is still ongoing. VPK developed a strategy to respond to this new tendency and hopes to develop in the short and medium term a realistic presence on these new markets.
Trade and services
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 logistic providing partner.
5. Outlook for 2004
Economic prospects for 2005 remain uncertain in all the countries where VPK Packaging Group is active, which makes a reliable forecasting very difficult.
However it is certain that on a short term, VPK shall still face overcapacity on the paper market. Also a decrease of the prices of raw material and energy is not to expect within a short time; margins will still be under severe pressure.
10 new member states joined the EU last year and a wave of new de-locations was expected, during 2004 we noticed the first indications.
In 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 more than €40 million has been earmarked for 2005, 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 three 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
23 March 2005: Financial analysts’ meeting
27 May 2005 at 3 pm : General Meeting of shareholders (2004 financial year)
20 June 2005 : Dividend becomes payable
21 September 2005 : Press announcement and publication of the half-yearly results for the 2005 financial year
In general :
In the financial year 2005 all companies which are quoted on the stock exchange are obliged to publish their annual results in accordance with the “International Financial Reporting Standards” (IFRS). The Board of Directors of VPK Packaging Group already drew up his figures according to the IFRS-standards which has a positive impact on the equity and the operating results. In order to compare 2004 and 2003 figures, the 2003 figures have been restated. The application of the new standards has expecially influenced the appraisel of the tangible assets, pension provisions and technical reserves as well as on the passive tax latency. The quantitave information regarding the impact of the transition towards IFRS-standards shall be published at the website at the beginning of April 2005.
a) turnover
The consolidated turnover increased with 1,7% to €390,8 million Euro.
b) investments
In 2004, a total of €29,1 million was invested in intangible and tangible fixed assets, which is an increase of 8,5% compared to 2003.
The intangible investments (€1,9 million) related mainly to the further implementation of the ERP system.
Investments in tangible assets included the erection of a new factory for corrugated board in Selby (UK) in order to have an ultramodern transforming unit that complies with the severest environment and security requirments.
c) financial result
In 2004 the financial result improved to €-0,3 million thanks to a further decrease of the net financial depts.
Equity (before distribution of profit) rose to €217,1 million or 59,3% of the total assets and
the gearing recorded a further decrease to 7,8% which guarantees a very sound financial structure.
d) proposed dividend
The Board of Directors will propose to increase the gross dividend by 10,9% to €0,51 per share at the Annual General Meeting on 27 May 2005.
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 and recycled paper
In 2004, the paper machines of the Oudegem Papier (3 paper mills) produced a total of 343.000 tonnes against 337,000 tonnes in 2003. The production of Rigid Paper (UK) amounted to 70.500 tonnes against 65.000 tonnes in 2003.
Paper prices were under pressure as a result of the overcapacity on the paper production market; the margins were under pressure especially due to strong increases of the energy costs.
Packaging
The demand for packaging is closely tied in with the state of the economy.
The tendency in the packaging industry to move towards Central and Eastern Europe is still ongoing. VPK developed a strategy to respond to this new tendency and hopes to develop in the short and medium term a realistic presence on these new markets.
Trade and services
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 logistic providing partner.
5. Outlook for 2004
Economic prospects for 2005 remain uncertain in all the countries where VPK Packaging Group is active, which makes a reliable forecasting very difficult.
However it is certain that on a short term, VPK shall still face overcapacity on the paper market. Also a decrease of the prices of raw material and energy is not to expect within a short time; margins will still be under severe pressure.
10 new member states joined the EU last year and a wave of new de-locations was expected, during 2004 we noticed the first indications.
In 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 more than €40 million has been earmarked for 2005, 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 three 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
23 March 2005: Financial analysts’ meeting
27 May 2005 at 3 pm : General Meeting of shareholders (2004 financial year)
20 June 2005 : Dividend becomes payable
21 September 2005 : Press announcement and publication of the half-yearly results for the 2005 financial year
For additional information :
Pierre MACHARIS, CEO
Luc LEDEGEN, investor relations
Tel.: +32 (0)52 26 12 08
E-mail : mailto:luc.ledegen@vpk.be
Pierre MACHARIS, CEO
Luc LEDEGEN, investor relations
Tel.: +32 (0)52 26 12 08
E-mail : mailto:luc.ledegen@vpk.be
Last update: 23-03-2005
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