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Punch International Shows Nice 1Q, Net Current Profit Increases 97%

Press release from the issuing company

Sint-Martens-Latem, April 29, 2002 -- Punch International NV, EMS-provider with registered seat in St-Martens-Latem, Belgium, today announced its first quarter results. They are better than expected: despite a number of disinvestments in 2000 and 2001 Punch again made progress in the first quarter of 2002: turnover increased by 6.5% compared to the first quarter of 2001, to amount to EUR 26.2 million. This does not include the most recent acquisitions such as Xeikon and the announced joint venture Philips Power Solutions. Advantra International and the joint venture in PR China, i.e. the external growth since the start of 2001, accounted for 8.6% of turnover. The EBITDA margin rose again from 12.2% in the first quarter of 2001 to 18.3% in 2002. Over the whole of 2001 the EBITDA margin amounted to 15.5%. As announced before, the improvement of the operational margin remains a priority for the company. Net current profit rose by 96.8% to EUR 1.54 million. Punch is satisfied with this result over the first quarter and sticks to the expectations for the entire year 2002: a turnover of EUR 170 million (including Xeikon International) and a net profit comparable to the one in 2001. However, this forecasted net profit is still subject to the pace of integration and returning to profitability of Xeikon and Advantra International. The increase in the Ebitda margin is mainly due to a number of projects in the Global United Display Systems business unit with a higher margin, and Advantra International where margins also increased. The increase in financial costs is a result of higher credit obligations in the short term and the long term (EUR 20 million) and higher financing costs. Punch International experienced a good first quarter in 2002, despite the current economic difficulties in its most important markets. Especially the Global United Display Systems business unit did well: with a turnover of EUR 16.9 million the business unit accounted for 61% of the total turnover. In the Graphic Systems business unit, Xeikon International is only consolidated from the second quarter onwards. Graphic Systems, and especially Strobbe Graphics, did not reach the forecasted budget in the first quarter. The business unit represented in this period 26.6% of the turnover. The orders for CtP-machines were lower than expected, but recovered from March on. The Digital Consumer Electronics business unit performed according to budget. In all business units, Punch endeavors to improve the necessary working capital: they were especially able to reduce stocks in the first quarter of 2002. Due to the recent internal modifications within the Punch group and in the markets where Punch is active, the three business units were subject to a certain strategic refocus. Punch tries to capture the market tendencies very closely and therefore modifies its strategy whenever necessary. Everything which has to do with television sets, pc-monitors and components, is captured under the business unit Global United Display Systems. Due to the takeover of the bankrupt Xeikon, the graphical division of Punch grew considerably so Punch decided to bring these activities together in the Graphic Systems business unit. The third division, Digital Consumer Electronics, contains a number of smaller participations and other Punch companies especially aimed at the markets for consumer electronics. The Global United Display Systems and Graphic Systems business units are at present developing into large and independent groups of companies who, within the Punch group, follow their own strategy. Punch International therefore increasingly opts to organize the various functionalities such as HR, IT, Finance, etc on a business unit level and not on a holding level. Bernard Vandekerckhove, COO of Punch International, left the Punch group in April and started working as CEO of the Dutch stock quoted company Prolion. Prolion recently received a capital increase to which a.o. some shareholders of Punch subscribed.