PR Newswire/Les Echos/
PRESS RELEASE
2008 consolidated results
Paris, 30th April 2009:
Groupe VIAL (ISIN: FR0010340406), France's leading independent industrial
joinery discount group, announces its audited consolidated annual results for
the full year to 31 December 2008.
. 2008 consolidated results
2008 was marked by the combination of various factors that heavily weighed on
Groupe VIAL's activity and profitability:
- a rapid and substantial deterioration in the economic environment, with the
new housing market grinding to a halt, the individual loans market closing
shop and economic uncertainty resulting in a substantial slowdown in
demand for joinery products;
- a substantial hike in the prices of basic materials, notably over the first
half of the year;
- a major industrial incident that disrupted the entire Group (new ERP).
Although corrective measures were instigated over the second half of 2008,
disruptions continued. The net loss for the year was thus -EUR23.4 million, in
line with the Group's guidance (-EUR21 million), as it includes EUR4.1 million
in non-recurrent elements associated with the cancellation of industrialisation
projects: construction of a double-glazing plant (Istres, southern France) and
acquisition of production plants in Romania.
Over 2008, sales totalled EUR105.8 million, a slight fall of 1.5%. At constant
scope (i.e. excluding stores opened in 2008 and 2007), activity was down 10.6%.
Compared to the slump in the new housing market, Groupe VIAL's sales held up
relatively well, thanks notably to the broadening of Renovation product ranges
from May 2008.
Gross profit came to EUR30.1 million in 2008, down 53% on the previous year.
This underachievement was due to the increase in the prices of raw materials and
the decrease in sales prices approved in order to maintain prices at an
attractive level in a highly-competitive market. However, the sharp
deterioration in gross profit was first and foremost due to major disruptions
associated with the implementation of the new ERP.
EBITDA for the financial year was thus a negative EUR20.5 million, despite
personnel costs being kept under control (+11%), with the workforce increasing
from 388 employees at the end of 2007 to 445 employees at the end of 2008.
External expenses rose by 34% because of the growth of the distribution network.
Once EUR3.7 million in depreciations and provisions, notably including a
provision for the stopping of the construction of the glass plant, are taken
into account, there was an operating loss of -EUR25.9 million. The financial
loss was -EUR8.5 million, and consists of the following:
- +EUR1.9 million income from cash investments in negotiable deposit
certificates;
- -EUR7.5 million cost of debt associated with the payment of interest on
OCEANE bonds and the
syndicated loan
- -EUR2.9 million in financial charges essentially associated with an
allowance for the depreciation of debt associated with the Romanian plants
that the Group had planned to purchase.
Once a tax credit of EUR11 million is taken into account, the net loss for 2008
came to -EUR23.4 million.
(EUR millions, IFRS) 2007 2008
Sales 107.3 105.8
Gross result 64.4 30.1
Personnel expenses -13.0 -14.5
External expenses -24.7 -33.1
Taxes -1.9 -2.6
Other operating income and expenses -0.3 -0.4
EBITDA(1) 24.5 -20.5
Depreciation -2.1 -2.6
Provisions and write-backs -0.7 -1.1
Recurring operating result 21.7 -24.2
Operating result 21.8 -25.9
Finance income 1.6 1.9
Cost of gross debt -4.2 -7.5
Other financial cost and income 0.0 -2.9
Tax -6.6 +11.0
Consolidated net result 12.7 -23.4
(1) EBITDA: Recurring operating income before depreciation and provisions
The annual financial report is available on Groupe VIAL's website:
www.groupe-vial.com, in documents and financial reports section.
. Financial structure
At 31st December 2008, consolidated shareholders equity amounted to EUR36.0
million, following the negative impact of the annual loss and the payment of
dividends.
Gross debt at 31st December 2008 was EUR122.7 million and breaks down as
follows: EUR8.4 million within the coming year, EUR36.6 million between one and
five years and EUR77.7 million beyond that. Cash and financial assets totalled
+EUR34.1 million at the same date.
We would like to remind you that Groupe VIAL has obtained, from its banking
pool, an authorisation to exceed the covenants defined by the loan contracts.
New covenants, adapted to the Group's economic situation, have been
established. These came into effect on 31st December 2008 and are valid until
31st December 2010. These new covenants were fully met by Groupe VIAL at 31st
December 2008.
Over the second half of 2008, Groupe VIAL significantly intensified its efforts
to limit its Working Capital Requirements. The change in WCR was thus +EUR10.5
million over the year. This decrease in WCR was thus the result of a reduction
in inventories (-8% over the year) and, more importantly, the virtual
disappearance of accounts receivables (-80% to EUR2.9 million).). Indeed, the
Group took the decision to no longer grant its customers credit in order to
limit the risk of payment defaults.
Once tax is taken into account, net cash flow came to -EUR0.6 million in 2008,
vs. -EUR23.3 million in 2007.
. Debt-cutting operation
In March 2009, Vial Holding purchased some of the bonds convertible into and/or
exchangeable for new or existing shares (OCEANE) issued in October 2007 by
Groupe VIAL, for EUR7.1 million. This operation allowed the Group to cut its
consolidated debt by EUR35 million and to record capital gains of EUR27.4
million. It also allowed it to cut associated interest costs.
. Implementation of ERP
The implementation of ERP is continuing in accordance with the market plan. At
the end of March 2009, the production, distribution, accounting and sales
administration sides were all connected to the system, as were all stores in the
Group's French network. Although implementation is going well, it will still
take some time to make the entire system fully reliable. The next stage in the
process is thus to have a fully operational system by the end of the first half
of 2009.
. Outlook and guidance
Groupe VIAL is currently focussing its efforts on maintaining its cash position
and on breaking even again as soon as possible. Furthermore, as shown by the
weak level of activity over the first quarter, the economic situation remains
unfavourable. Groupe VIAL has therefore taken a number of strategic decisions:
- the new catalogue, which comes out in May, will focus on Renovation
products;
- there will be no external growth or industrialisation projects: the
construction of the glass plant (Istres) and the integration of the
Group's Romanian partner have been postponed indefinitely;
- the close of stores that have failed to meet the Group's profitability
demands.
About Groupe VIAL ( www.groupe-vial.com):
Listed on Euronext Paris (Compartment C) of NYSE Eruonext since December 2006,
Groupe VIAL manufactures and distributes aluminium, PVC and wood joinery
products (doors, windows, gates, stairs, etc.) offering unparalleled value for
money through tight control of supply lines; efficient, modern production
facilities and the 71-store VIAL Menuiseries distribution network (including 6
stores in Spain and 1 store in Portugal).
Public site: www.vial-menuiseries.com
Listed on Euronext Paris compartment C of NYSE Euronext
Reuters: VIA.PA - Bloomberg: VIA FP
Contacts
Groupe VIAL
Jean-François Buigues
Chief Financial Officer
investisseurs@groupe-vial.com
NewCap.
Financial Communications - Investor Relations
Steve Grobet / Pierre Laurent
Tel: +33 (0)1 44 71 94 94
Fax: +33 (0)1 44 71 94 90
vial@newcap.fr
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