![]() |
|
|||||||||||||||||||
![]() |
||||||||||||||||||||
|
Report from the Management Board For Roto Smeets Group, 2011 was a year in a sort of limbo. After the departure of the previous Management Board, the business was run for the entire year, during the search for a suitable successor, by an interim CEO, Mr. R.A.J. Huyzer. This meant that the plans for consolidation and expansion that had been pursued in recent years were placed on the back burner, while priority was given to further restructuring the internal organisation. In order to achieve a recovery in the operating result, a number of planned improvements were set in train. An internal benchmarking project was used to compare the types of costs incurred in each operating company in order to arrive at uniform efficiency targets. Another project involved the development of a personnel planning system, which makes the work more flexible so that Roto Smeets Group can set up a scheduling system that facilitates a better match between worker deployment and the work available. In this way, the employees will get a better grasp on their own working hours. These planned improvements were developed in 2011 and it is expected that they will start to contribute to the operating result from 2012. More information on these and other improvement plans can be found in the 2011 corporate social responsibility report. The new Management Board will continue along this path to make the business more flexible, productive and responsive, thus improving both the Group's competitiveness and its profitability. The longer-term goals will be formulated in the course of 2012. The present report mainly looks back at 2011. Financial developments in 2011 By contrast, the business result (EBIT) rose to € 3.1 mln as against € - 23.9 mln in 2010. The increase was mainly the result of the special impairment of € 16.3 mln taken in 2010. Roto Smeets Group's added value (AV) declined slightly: € 165.8 mln in 2011 compared with € 166.1 mln in 2010. The net result came out at € - 0.7 mln, which an improvement of € 21.8 mln over 2010. Personnel costs fell slightly, thanks to the reorganisations in the Print Productions business line. Despite the increase in the number of employees in the MediaPartners Group, resulting from their increased order book, total employee numbers fell to 1.590 ftes (full-time equivalents) at year end 2011 (2010: 1.616 ftes). EBITDA improved by € 7.5 mln to € 26.7 mln (2010: € 19.2 mln). Cash flow from normal business operations improved to € 14.5 mln. Net investments in material fixed assets were € 8.9 mln (2010: € 16.1 mln). Solvency rose to 37.4% (year end 2010: 34.5%). According to the definition set down in the bank covenants, solvency is 34.4%. This means that Roto Smeets Group fulfils the minimum demand agreed with the banks (> 30%). Financing On 18 January 2010 Roto Smeets Group signed a factoring agreement with ABN AMRO Commercial Finance, formerly known as Fortis Commercial Finance N.V. This agreement covers a credit facility on current account with financing to at most 90% of the receivables pledged to ABN AMRO Commercial Finance. On 31 January 2012, this facility is extended until July 1, 2014 with a maximum of € 45 mln. Roto Smeets Group has a credit agreement with ABN AMRO Bank N.V. to the value of € 12.5 mln. This facility is to be paid down starting on 1 January 2012 at the rate of € 0.125 mln every quarter. This credit is linked to a credit mortgage with a principal of A supplementary credit agreement of € 4.0 mln was signed with ABN AMRO in 2011 to cover the seasonal fluctuations in financing demand. This ran from 15 May to 15 September 2011. In that period limited use was made of this supplementary credit. March 2012 will see the repayment of the € 0.75 mln facility agreed in 2010 with ING Investment, which was used to fund working capital. The remainder of € 11 mln has to be repaid on or before 31 March 2013. This loan is attached to the real estate of Roto Smeets Utrecht, Roto Smeets GrafiServices Eindhoven and Utrecht and in Heerhugowaard. Objectives and framework 2011 was a year of restraint in regard to investment. The Komori Lithrone SP presses purchased for Senefelder Misset in 2010 are now operational. These 'double deckers' have replaced three sheetfed presses. The new presses fit into Senefelder Misset's strategy to take the best advantage of new trends. The end of 2011 saw completion of the purchase of a new eight-colour Heidelberg press for Roto Smeets Grafiservices Utrecht. The press wil go into operation in April 2012 and will replace two other presses. Additional investments have been made in the Afterpress departments at Roto Smeets Deventer and Roto Smeets Weert to provide insert equipment, so that stitched products can be provided with multiple commercial supplements, for which there is increasing demand in the magazine market. These machines are second-hand, and were reconditioned prior to installation. A lot of attention was paid in 2011 to getting the Group's auxillary services in order at plant level. After a number of these services had been examined, the suppliers were involved in plans to make the installations cost efficient and more reliable and to maintain them at that level. Examples include the clustering of modifications and investments in the plant compressed air services, with centralised contracting. Tackling this issue jointly for all the plants has not only achieved considerable cost savings, but also equally great energy savings. A number of installations will be tackled in succession in the years to come. In 2011 we experienced severe variations in the prices of raw materials, influenced by the turbulence in the economy. In the first half-year we experienced the adverse impact of the steep rises in the price of paper, which went into effect in January 2011. This price increase could not be passed on to the market under existing contracts and had an adverse impact on our results. The price of a basic raw ingredient for ink also quadrupled in the course of 2011. The ink suppliers passed on most of the price increase to the graphical industry. The market for printed matter, however, did not absorb these price increases. A series of takeovers and closures among the paper manufacturers has changed the landscape somewhat. The total reduction in paper supply capacity amounts to some 5%. In addition, there was something of a slump in demand for paper in Q4, and paper consumption remained substantially under the 2010 level. The price increases that the paper suppliers have announced for 2012 turned out not to be achievable thanks to the lower volumes involved. The associated uncertainty, however, means that it is difficult to make any offers in the market without incurring major risks. For this reason the number of orders with supplied paper has increased. In connection to energy Roto Smeets Group profited in 2011 from the advance purchase of energy carriers. A large part of our energy requirement for 2012 has already been covered, albeit at a lower discount than in 2011. Purchasing implemented a well-structured, well-planned campaign to once again cut purchasing costs in 2011. The same plan will be continued in 2012. Work has been continuing for several year to fully centralise ICT tasks in order to achieve a Group-wide, common software and hardware platform. Recent developments in ICT technology mean it is increasingly possible to centralise previously decentral tasks, which had led to a clustering of knowledge and activities, so that a more effective job can be done with fewer people. Years ago, Roto Smeets Group opted for an enterprise ERP system (DiMS!) with coupled systems that are used throughout the Group (such as QTMS for production records, Oracle Finance, Unit 4 for salary administration, PSS for Tracking and Tracing, applications for the digital supply of production material, etc.). These can all be managed centrally quite simply. Market in general By contrast, offset capacity is fragmented, as it is owned by a large number of mainly independent suppliers. The shakeout of these firms is mainly affecting those plants with obsolescent technology. The new generation of big offset machines (some of them short-grain) that are on sale is now having an impact on the bottom end of the rotogravure market. The other trend is digitisation, which is putting permanent pressure on volumes of printed products in the market. After the earlier decline in the market for printed products thanks to the Internet and e-mail, now we are seeing consumer electronic equipment like the tablets, which are having a significant impact on such media carriers as the daily newspapers, magazines and books. A new equilibrium will have to be found between the printed media and their digital counterparts. New business models, such as those that have already been successfully launched by Senefelder Misset, will have to be investigated further and expanded. Developments in specific market segments In the mail order sector, too, there is a visible decline in print's share of the communications package. Mail order firms are increasingly turning to the Internet as a communications instrument as well as using it as an ordering channel. Just like the retail businesses, the off-line function of the printed medium is important, as it generates on-line traffic. This has led to the introduction of specialist sub-catalogues rather the thick, general ones. In the retail sector, research continues to show that shop traffic is mainly generated by print. 2011 saw the institution of environmental criteria for the post, which businesses in the sector must support in order to refute claims that print is unsustainable. The deployment of customer media by retail businesses, combined with the Internet has taken off. Sales organisation This meant that Roto Smeets group lost a number of weekly RTV titles, even though the difference in price offered was marginal. Bindinc BV, acting for the broadcasters in the European tendering procedure, had to grant the work to foreign parties, based on the criterion of the lowest price per title. Unpredictable factors in the publishing industry are the ban on automatic ('silent') subscription renewal, coupled with the decline in advertising volume. The retail business market is having to deal with low consumer confidence, plus the on-line retail concepts, which are competing with the traditional high street. There is, however, undiminished confidence in printed, door-to-door advertising. In 2011 we were worked on a large number of new orders such as Lands End (UK) and Bonaparte (DK). And, as already announced, Roto Smeets Group has signed a multi-year contract with Persgroep Publishing in Belgium to produce their weekly paper Dag Allemaal, and with the motoring association ANWB to do their monthly magazine De Kampioen. Agreement has been reached with Sanoma Media Netherlands and Sanoma Media Belgium to renew the contract on a large number of titles. Our collaboration with A.S. Watson Group will expand considerably in 2012. This business is the largest health & beauty retailer in the world, familiar in the Benelux countries under the Kruidvat, Trekpleister and ICI Paris XL brand names. Starting in 2012, Roto Smeets will provide the weekly Kruidvat folders for the Dutch market. Roto Smeets Rotogravure Roto Smeets Weert Senefelder Misset Antok Nyomdaipari After the founder had departed, having reached pensionable age, a new director joined Antok in mid-2011. Many new orders have now been gained, some from Austria, thanks to a new, more commercial approach. These new orders should achieve an occupancy such that ultimately a positive result can be achieved in Hungary. Roto Smeets GrafiServices De Wit Binders Market The market for customer media and content marketing is growing. Internationally, ICMF (International Content Marketing Forum, the combined custom publishing businesses) reports an average growth in turnover of 10% in the last two years. This growth is thanks to an increase in the number of channels, on-line and mobile, plus the growth of social media. There are many new entrants to the market for producers of customer media and content marketing, many of them coming from the public magazine sector, advertising agencies, the daily press, and specialist interactive media bureaux. The smaller bureaux in the sector try to associate with the dominant parties in the market. At the same time, there is an almost daily increase in the number of sole practitioners in the market. Netherlands The 2011 Customer Media Trend Inquiry reports a great increase in the number of titles in the customer media sector. In 2006 the Netherlands had 11,500 titles; this number has now grown to 16,000, including both printed and digital channels. A significant part of this growth is due to the increase in the number of media that are distributed on-line. Belgium The customer market in Belgium is growing by about 10% per annum (source: Custo). About ten important suppliers of customer media and content marketing are active in this market and the number of players (including publishers, printers and communications bureaux) is still on the increase. There are opportunities here for the MediaPartners Group to increase its turnover in the Belgian markt. MediaPartners Group As 2011 closed, MediaPartners Group could look back at a successful year. Besides familiar projects, like AllerHande and Holland Herald, a number of new projects were started. Besides the regular monthly issue of Albert Heijn's AllerHande – MediaPartners Group also produced a number of special issues in 2011, including a holiday season special and a Chistmas magazine, both delivered door-to-door, as well as themed inserts for Albert Heijn. In cooperation with Senefelder Misset's X-Media Solutions, we also introduced an Allerhande-app, which immediately led the list of Holland's most downloaded apps. Four issues of 'Wat Handig', Albert Heijn's non-food magazine, also appeared in 2011. In 2011, KPN brought its entire internal communications package to MediaPartners Group. This included the development of a strategy campaign, the production of a bi-monthly personnel magazine, a special Christmas booklet for employees, and the Dagkrant, an on-line news organ, for which a special editorial department was stationed at KPN. Another client to call on MediaPartners Group's wide range of services is motor cyclists' organisation Koninklijke Nederlandse Motorrijders Vereniging (KNMV). This started with the production of the membership magazine Grip and has now expanded to include a lot more campaign communication in the form of teasercampaigns, guerrilla actions and e-mailings. Many of these media were developed proactively by MediaPartners Group themselves and recommended to the client. One-off publications MediaPartners Group developed a one-off publication for software supplier Exact – Globe Next – which was used as an introductory magazine with the launch of a new software package. In the final months of the year, MediaPartners Group developed a new concept for the Sociale Verzekeringsbank [Social Insurance Bank] for Mijn AOW [My Pension], an annual magazine for those entitled to a pension. In 2011, too, MediaPartners Group lost two major, long-term contracts. One of the contracts remains in the Group since the forestry commission [Staatsbosbeheer] decided after a European tendering process, to transfer production of its magazine Onverwacht Nederland [Unexpected Holland] to Hoogte 80 (part of Senefelder Misset). ING Bank cut back its communications budget, which meant the loss of the quarterly magazine Mijn Geld [My Money]. MPG Belgium can also look back at a first-class 2011. Nearly all existing clients (like Unilever Food Services, Fidea, ABB, and Ethias) stayed with MP Belgium. MP Belgium was also able to welcome snack food producer Ad van Geloven (known for its Mora brand) as a new client. For some time now, two newsprint publications have been produced for them, intended for the business market. All together, these developments ensured that MediaPartners Group delivered a fine financial result. Set against historical revenues, 2011 can be seen as an all-time high. The challenge for 2012 is to exceed this result with sparkling, creative, unique products for existing and new clients. Leads to Loyals This was achieved partly because a large number of existing clients were retained last year. Leads to Loyals is increasingly seen by their business clients as a strategic partner in the development, implementation and execution of communication and loyalty programmes. In 2011, Leads to Loyals was able to show that they can implement effective, innovative marketing solutions, which has allowed them to gain more orders from existing clients, while adding several smaller orders to their portfolio. The size of some of the major orders means that Leads to Loyals is still vulnerable. For that reason, significant steps were taken in the second half of 2011 to get the Leads to Loyals platform updated with the latest technological facilities, which will leave them in a better position to recruit new business in the near future. Socially Responsible Business Practice Secondary employment benefits The composition of these labour costs is being examined in cooperation with the Central Works Council and the local works councils. All possibilities have been examined and discussed. It was rather difficult for the works council members to achieve an acceptable outcome, since any intervention in these benefits hurts. However, everybody was well aware that the Group's results must recover if jobs are to be preserved. After a number of options had been discussed, it was finally decided to scrap the jubilee bonus. "Planning with Breathing Space" Restructuring of the organisation The second project involved a redesign of the ICT department. Increasing systems centralisation, coupled with greater uniformity of both hardware and software, means that a number of positions have been cut. Employment Conditions Handbook Comfortable Employment Contract Mirror Conference Roto Smeets Group considers its environmental policy - like its concern for health, safety and welfare - to be an integral part of company policy. Operating in an environmentally sensitive world means having a policy aimed at preventing of pollution and other nuisances. Effective use of raw materials and energy has a high priority. The main elements in the policy are the more effective use of raw materials, working in accordance with internationally recognised standards drawn up for that purpose, and making good past environmental damage. The Ecobalance, introduced by Roto Smeets Group in 1994 for all production companies within the group, is a mass balance showing all inflows and outflows of materials, plus energy and water. As the Ecobalance shows the complete balance of materials of the companies, these are not only able to control emissions, but also make efficient use of raw materials and additives in the production process. With this complete mass balance, the Roto Smeets Group production companies can monitor their environmental aspects in a way that goes beyond what is required by an environmental care system. A comprehensive description of the views of Roto Smeets Group as to its responsibility with regard to environmental aspects and a report on this for 2011 is stated in the separately published Roto Smeets Group Corporate Social Responsibility Report 2011. Roto Smeets Group's dividend policy presupposes a cash payment of 40% of the net result per ordinary share, provided the Group's solvency fulfils the minimum requirement of 30%. In view of the negative result for 2011, no dividend will be paid. The market in which Roto Smeets Group operates is highly volatile. It is powerfully influenced by politics, economics, social and cultural phenomena, and technology. The overcapacity in the graphics industry will persist as long as the market continues to approve the restart of bankrupt businesses. Measures like changing the logistic structure (delivering periodicals only on Tuesdays, Thursdays and Saturdays) and the abolition of automatic subscription renewal have impacted the graphics industry's customers. New technological developments can pose a threat to those businesses that are not in a position to invest in them (or are barred from doing so by their creditors), but they can also pose a challenge to others. The shift from print to digital storage and web-based media, which is increasing, poses a threat to the Group's printing businesses, but it is a tremendous opportunity for the media businesses, like MediaPartners Group. In order to encourage the Marketing Communications business line to grow without restraint, options for MediaPartners Group to expand are being explored. The search for new markets (also abroad) is propelled by the major clients' increasing demands for exclusiveness. For the print business, the prospects are that the total market for print in Western Europe will continue to shrink and that rotogravure's share in it will decline. Over time, falling print runs will lead a large number of Dutch and Belgian magazines to transfer to offset. If we are to take account of shifts in the market and demand, our customers' wishes, and changes in technology, Roto Smeets Group will constantly have to improve its capacity utilisation and it must continue to adjust volumes to market conditions. If they are to comply with their customers' wishes, both the offset and the rotogravure plants will have to do their utmost to focus on the shortest possible manufacturing times. The experience that the Roto Smeets plants have gained during their existence, with many different types of orders, so that both offset and rotogravure can quickly change languages or editions, will now come home to benefit them. The prospects for 2012 are coloured by the uncertainty resulting from a general awareness of and response to the economic crisis. In the second half of 2011 we saw high volumes, expecially in rotogravure, and improving prices. Now, though, the uncertainty has become apparent in negotiations on 2012 orders. This, plus the way the paper suppliers initially sought to boost their prices, made negotiations difficult and is continuing to do so even now, with adverse results in many cases. It is clear that a number of Roto Smeets Group's larger competitors are seriously concerned about their machine occupancy in the first six months of 2012 and have once again seized price as their weapon. Another important element that may delay the recovery of our results is the increasing cost of labour. The social premiums, the unemployment premium that the sector pays, and the health care benefits have all increased in 2012. These factors have cancelled out a large part of the improvements achieved in 2011. This means that despite our satisfaction with 2011, Roto Smeets Group will be confronted with new challenges in 2012, to stay competitive in the longer term in the international arena. Based on the market developments just sketched out, we feel it would be irresponsible to make any statements about the way our results will develop in the current year. Deventer, 14 March 2012 |
||||||||||||||||||||
|
contact - conditions for usage
|
||||||||||||||||||||