Oce Reports Results for Fiscal Year 2001, Machine Sales Down 17%
Press release from the issuing company
VENLO, Netherlands, Jan. 9 - Oce N.V. - the Dutch-based supplier of digital printing and document systems and services, today announced the provisional results for the fourth quarter of 2001 and the full 2001 financial year, ended November 30, 2001.
* Total revenues EURO 3,234 million (+ 0.3%)
* Operating income EURO 225 million (-/- 20%)
* Net income*) EURO 105 million (-/- 31%)
* Net income per share*) EURO 1.19 (-/- 32%)
* ) before exceptional items
The net income of Oce N.V. from ordinary activities in the 2001 financial year amounted to EURO 105 million, which was 31% lower than in 2000. Net income per ordinary share decreased by 32% to EURO 1.19. After allowing for a one-off restructuring provision of EURO 125 million (gross) the net income after exceptional items amounts to EURO 10 million.
Total revenues were EURO 3,234 million, equal to the previous financial year. Lower sales of machines was fully compensated for by revenues from service and software. Revenues showed an autonomous decrease of 1%.
Results fourth quarter 2001
Total revenues for the quarter showed a decline of 6% to EURO 857 million compared to the fourth quarter of 2000. The autonomous decrease in the fourth quarter of 2001 amounted to 4%.
In Wide Format Printing Systems revenues went down by 6% to EURO 246 million. The autonomous decrease was 4%. Revenues from machine sales were below the previous year's level. Sales of the Oce 9800 / TDS800 made a good recovery during the quarter.
Revenues in Document Printing Systems were down by 5% to EURO 406 million. The autonomous decrease amounted to 3%. Here, too, sales of machines were the cause of the decline, with revenues from the Oce DPS400 lagging behind expectations. This occurred despite the fact that this printer had been well received by the market. Sales of the Oce CPS700 colour printer are progressing entirely according to plan.
In Production Printing Systems revenues decreased by 9% to EURO 205 million, of which 6% was an autonomous decrease. The lower machine sales were not sufficiently offset by growing revenues from service and software. The development of the order portfolio for machines during the quarter indicates that the decline that occurred during the course of the year has been brought to a halt.
Operating income amounted to EURO 62 million, a drop of 32% as compared to the strong fourth quarter of 2000. During the quarter operational expenses were 4% higher than in the previous year.
Financial expense (net) was slightly lower than in 2000, whilst the taxation percentage remained virtually the same. Net income before exceptional items was EURO 30.7 million (2000: EURO 49.5 million). Cash flow (net income plus depreciation) amounted to EURO 83 million (2000: EURO 99 million).
Based on the weighted average number of ordinary shares outstanding of EURO 0.50 nominal each, the income before exceptional charges amounted to EURO 0.35 (2000: EURO 0.57) and cash flow amounted to EURO 0.98 (2000: EURO 1.15).
Results 2001 financial year
Total revenues in Wide Format Printing Systems rose during the year by 1% to EURO 912 million. Excluding acquisition and exchange rate effects, revenues were in line with those of the previous year. Machine sales decreased by 13%. This decrease is the result of the postponement of investment decisions by customers. Thanks to a very much renewed range of Technical Document Systems Oce was able to maintain its leading market position. Software and services fully compensated for the decline in machine sales. In Display Graphics Oce's position has been strengthened by acquisitions, so that Oce now occupies a top-three position in the mid-volume and high volume segments.
In the market for Document Printing Systems revenues amounted to EURO 1,529 million (2000: EURO 1,550 million). Revenues showed an autonomous decrease of 3% compared to 2000. Machine sales were 17% lower than in the previous year. During the year the 100 ppm Oce DPS400 black-and-white printer and the colour printer, the Oce CPS700, were introduced. Sales of the Oce DPS400 clearly felt the effects of the worldwide slowdown in growth. In view of the positive reception given to this printer, its sales are expected to pick up speed in 2002. Sales of the Oce CPS700 were still limited as a result of the production start-up. However, demand in the fourth quarter warrants confidence in the success of this machine and its future versions.
In Production Printing Systems revenues increased by 3% to EURO 793 million. Revenues from machines were 15% lower than in 2000. Because of strong growth in software and services, total revenues -- after adjustment for acquisitions and exchange rate effects -- were at the same level as in 2000. In this professional market, too, Oce's position has remained unaffected. As mentioned earlier, there are indications that the decline in the orderbook position has come to a halt.
Operating income was EURO 225 million (2000: EURO 282 million) and financial expense (net) amounted to EURO 69 million (2000: EURO 61 million). Net income before exceptional items amounted to EURO 105 million (2000: EURO 152 million). Cash flow was EURO 299 million (2000: EURO 346 million). Based on the average number of ordinary shares outstanding of EURO 0.50 nominal each, net income before exceptional items was EURO 1.19 (2000: EURO 1.76) and cash flow was EURO 3.47 (2000: EURO 4.06).
The year 2001 was not an easy year for the entire document management market as a result of the global slowdown in economic growth. Seen against this background, the result achieved in 2001 gives confidence for the future. This confidence is also supported by the product range in DPS en WFPS which was substantially updated during the year. New software and services were introduced. In all business units these helped to compensate for the lower sales of hardware. Revenues from Facility Services grew by 25%.
In line with Oce's strategy, various acquisitions were also made during 2001 in strategic sectors such as Facility Services and Display Graphics. In Facility Services the United Kingdom business Practical Print Solutions was acquired. This has added a new dimension to Oce's activities in this area, i.e. the procurement and management of printing activities.
The acquisition of Gretag Professional Imaging Division, which was completed at the beginning of December 2001, is of great strategic importance. This acquisition has substantially strengthened Oce's position in Display Graphics.
The foundations were also laid in 2001 for the outsourcing of Oce's lease portfolio via contracts with Telia Finans AB and De Lage Landen International B.V. In the years ahead this will have a clear influence on Oce's balance sheet and on the return on invested capital.
On an autonomous basis operational expenses in 2001 remained at the same level as in 2000, whilst specifically targeted measures resulted in a reduction of more than 10% in stocks.
Over the coming year Oce will implement a restructuring process which is aimed at bringing the organisation into line with the changed market conditions.
The ongoing process of digitisation is creating new market segments and growth opportunities. Oce intends to exploit these. Thanks to its strong technology base and high quality sales and service organisation Oce will achieve new growth in revenues and income.
The restructuring operation implies an integration of the Strategic Business Units Document Printing Systems and Production Printing Systems in which products and systems are being deployed more and more often in comparable user environments. In addition, Oce will over the years ahead, restructure certain segments in the office market. This involves activities that make an insufficient contribution to the objectives in terms of value creation.
To cover the restructuring operation a one-off provision was taken in the 2001 financial year. This amounts to EURO 125 million, of which EURO 75 million is for the organisational restructuring and EURO 50 million for the write-off of stocks and the residual values in the segments in which the activities will be phased out.
A proposal will be made to shareholders that the dividend for the 2001 financial year be maintained at EURO 0.58 per ordinary share of EURO 0.50 nominal. If this proposal is adopted, the final dividend per ordinary share for 2001 will amount to EURO 0.43 in cash; the interim dividend over 2001 amounted to EURO 0.15 per ordinary share.
General Meeting of Shareholders
The Annual General Meeting of Shareholders will be held on Wednesday March 6, 2002. The agenda for the meeting will be announced on January 29, 2002. The annual report will be published on our website on January 30, 2002 and will be issued in printed form on February 13, 2002.
Oce has further improved its basic position over the past year. Consequently Oce will be able to benefit directly from an improvement in economic conditions. However, such improvement is not anticipated before the second half of 2002.
During the first half of 2002 the expectation is that the results will remain below those of the corresponding period of 2001. Oce expects that the results in the second half-year, supported by the initial effects of the restructuring process, will be higher than those of the second half of 2001.
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