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RSDB ANNUAL RESULTS
2004
Considerable result improvement compared to
2003
2004 ANNUAL RESULTS
In 2004 RSDB realised a net result of EUR 14 million, 69% higher
than the net result from ordinary activities of EUR 8.3 million in
2003, while in 2003 the net result after deduction of reorganisation
provisions amounted to EUR 3.3 million.
All three brands contributed to this improvement of the result, whereby
the fourth quarter was the deciding factor:
Roto Smeets increased its market share and through a productivity
increase and cost reduction programmes managed to resist substantial
margin erosion.
PlantijnCasparie almost achieved its operating return target of break-even,
thereby leaving behind the period of heavy losses.
Media Partners proved that, with an increased focus on costs, it
could improve on the record result of 2003, even in a hesitant market.
Partly as a result of divestments, integrations and closures at PlantijnCasparie,
group turnover declined by 1.8% tot EUR 612.8 million (2003 EUR 623.9
million), while value-added was 3.2% lower at EUR 301.8 million (2003
EUR 311.7 million). Due to lower personnel costs, lower depreciation,
lower other operating costs and especially lower reorganisation provisions,
total operating costs declined by 8.1% from EUR 300.9 million in
2003 to EUR 276.6 million in 2004. The operating result including
reorganisation provisions amounted to EUR 25.3 million (2003 EUR
10.8 million).
The operating result for 2004 was on the one hand negatively influenced
by the balance of provisions made and extraordinary items of EUR
2 million related to the strategy adjustment announced in October
2004 and the planned divestment in connection with that adjustment
of the sheetfed printing activities of PlantijnCasparie. The operating
result was on the other hand positively influenced by the release,
among other things, of environmental provisions at Roto Smeets, on
balance more than EUR 2 million.
The balance of financial income and expenses declined from EUR 5.3
million to EUR 4.4 million. The cash flow from operating activities
amounted to EUR 61.3 million (2003 EUR 55.1 million). The solvency
ratio at year-end 2004 was 39.6% against 36.2% at year-end 2003.
The weighted average number of outstanding ordinary shares remained
unchanged compared to 2003 at 3,290,275. Profit per share for 2004
amounted to EUR 4.24 (2003 EUR 1.00). The annual General Meeting
of Shareholders, to be held on April 6 will be proposed to pay a
dividend of EUR 1.70 (2003 EUR 1.00) per ordinary share in cash.
PROSPECTS
The absence of a sufficient recovery in consumer confidence seems
to keep holding back market growth. Although new titles are launched
in the magazine segment, we are at the same time experiencing pressure
on circulation figures and advertising volumes at mass circulation
magazines.
Hardly any marketing communication budgets are likely to be increased.
Against these demand side factors we find ample capacity supply.
These market conditions result in unabated pressure on margins, whereby
on the purchasing side the development of paper prices and the rates
of energy carriers remain uncertain factors.
RSDB reacts to this market dynamism with both a sharpening of the
direction of the strategic development and a substantial investment
programme, the execution of which will run until mid-next year. The
current year is therefore dominated by activities which are meant
to contribute to profitability in the coming years. We look forward
to this period with confidence. For now, we believe it to be too
early to make statements regarding the profit development in the
current year.
THREE BRANDS
The three main brands Roto Smeets, PlantijnCasparie and Media Partners
showed the following result development:
| x EUR 1 mln |
2004 |
|
2003 |
| |
turnover |
operating result |
|
turnover |
operating result |
 |
| Roto Smeets |
464.5 |
24.7 |
|
463.1 |
22.3 |
|
| PlantijnCasparie |
137.5 |
-2.4 |
|
150.6 |
-14.3 |
|
| Media Partners |
17.8 |
2.9 |
|
17.1 |
2.8 |
The number of employees, in fulltime equivalents, declined from 3,465
at year-end 2003 to 3.177 at year-end 2004.
Roto Smeets
Growth in market volume continued by more than 4% in 2004. Roto Smeets
with more than 5% again showed stronger growth than the relevant north-western
European gravure and web offset market as a whole. Roto Smeets managed
to add a substantial number of titles, including many new launches
in the Netherlands, to its order book. The magazine segment as a whole,
however, showed no growth as a result of lower circulations and on
average a smaller amount of pages per existing magazine. In the catalogues
market the trend towards more titles with lower circulation and smaller
amount of pages continued. The overall size of the market in the catalogue
segment showed no significant change but did show an improved spread
over the year. The growth in the unaddressed advertising segment continued
unabated.
In the Benelux market, competitors have closed down production sites
in both web offset and rotogravure, because of the absence of financing
possibilities to guarantee continuity. The introduction of new capacity
by other suppliers, however, did lead to overall capacity not being
reduced.
The position of Roto Smeets for the coming years will be further strengthened
by way of a substantial investment programme, including a 48 page web
offset press for Roto Smeets Weert, a 3.68 metres gravure press for
Roto Smeets Deventer and a seamless binding machine for De Wit Grafische
Projecten in Eindhoven.
PlantijnCasparie
The domestic sheetfed printing market showed a slight decline. PlantijnCasparie
made good progress in its substantial restructuring project. The scale
increase of the five designated main sites in Almere, Capelle a/d IJssel,
Eindhoven, Utrecht and Zwolle was completed according to plan.
As a result of divestments, integrations and closures turnover of PlantijnCasparie
declined. The price war in the sheetfed offset segment continues unabated
as a result of the substantial excess capacity. RSDB has no ambition
to play a part in the necessary consolidation process of the sheetfed
printing sector. After the restructuring of PlantijnCasparie was completed,
measures were taken for the divestment of the sheetfed printing activities.
Within the pre-publishing activities pressure on margins increased
while volume development within the direct marketing activities, and
especially in the production segment, stagnated.
Media Partners
The market situation was characterised by hesitation in decision-making
by potential customers. A slightly improving advertising market within
the sponsored magazine segment in the second half-year in combination
with efficiency improvements, resulted in Media Partners maintaining
its excellent profitability. As a result of a continued sharp focus
on costs Media Partners was able to fully compensate for the price
declines that occurred. There was much demand for project proposals
and in many cases the decision-making processes have not yet been concluded.
Media Partners therefore has a well-filled prospect portfolio.
IFRS
As from the start of the 2005 financial year, listed companies in the
European Union must use the IFRS regulations as established by the
IASB and approved by the European Commission in drawing up the consolidated
annual accounts.
A large number of guidelines has been drawn up by now, while at the
same time a number of interpretations are still being discussed and
there is some degree of uncertainty with regard to the future of the
existing VUT early retirement scheme. The differences between the consistent
and the IFRS regulations can therefore not be precisely named.
For
RSDB, the most important differences concern:
- Pension commitments: the pension commitments have been transferred
to the Grafische Bedrijfsfondsen (GBF). The commitments of GBF, also
because of the absence of objective criteria for attributing investments
and commitments, qualify as a defined benefits scheme and have no influence
on equity for the time being.
- The industry VUT scheme: this scheme, in which almost all companies
in the Netherlands participate, is financed by way of an assessment
method. For this, IFRS requires that an actuarially determined provision
is made. The amount of this provision is determined by the nature and
the time period of the commitments, shortly to be discussed at the
upcoming CAO negotiations. Provision reconstruction and clearing costs:
the influence of reconstruction and clearing costs at the two gravure
printing sites is material: effect on the financial situation is approximately
EUR 1.5 million.
- Depending mainly on the commitment concerning the industry VUT scheme,
the write-off against the shareholders’ equity of the above mentioned
differences, after compensation by payable corporate income tax, will
be between approximately EUR 22 million – EUR 40 million.
- Application of IFRS will in view of the present operational lease
contracts, with a present value at year-end 2004 of EUR 23.4 million,
influence the operating result and the financial expenses, but on balance
not the net result. In addition, the solvency ration is affected by
more than 2 percentage points.
2005 – Strategy - Activities
In October of 2004 a strategy adjustment was announced. The available
means will be used for the business lines Print Productions and Marketing
Communications. Print Productions is aiming at the efficient production
of web printed products by means of specialised full service companies
which, as executor or director, cover the whole chain, from prepress
to distribution. In order to expand the web printing activities, the
company will cautiously look for acquisitions in the eastern European
markets, participating in the consolidation process if clear synergy
advantages may be gained.
Marketing Communications will aim at providing the best possible facilities
for the ‘own communication channel’ of customers with on
the one hand the focus on creation of cross-media, and on the other
hand storage of customers’ data and media moments. This position
will be further strengthened autonomously and by way of acquisitions.
There is no part in this concept for the sheetfed printing activities
of PlantijnCasparie, which will be divested this year.
Hilversum, March
10, 2005
ROTO SMEETS DE BOER NV
Executive Board
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