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Thursday, 30. April 2009 R. STAHL strenghened its market position in FY2008

Category: Corporate-News

Healthy capital base supports dividend payment - Fall in sales and earnings during Q1/2009 - Well prepared for difficult times

Waldenburg, 30 April 2009 - The R. STAHL Group, which specializes in electrical explosion protection equipment, was satisfied on the whole with the course of its business in fiscal year 2008. Following a good first six months, the group's business was burdened increasingly by the financial and economic crisis. Although the group succeeded in reaching its sales forecast of at least € 220 million, special items prevented it from meeting its targeted 10% return on sales. Despite the current slump in demand, R. STAHL's CEO Martin Schomaker remains optimistic: "We are well positioned to enhance our market standing in this difficult economic environment."

Slight increase in sales and order intake
The R. STAHL Group raised sales by 4.5% to € 221.2 million in fiscal year 2008 (previous year: € 211.6 million). The group's total order intake grew by 1.6% to € 223.6 million in the period under review (previous year: € 220.1 million). From the 3rd quarter onwards, the global economic slowdown led to year-on-year falls in both sales and order intake. Growth was driven by the strong development of the group's systems business and progress in the expansion of its American operations, while the Asia/Pacific region and orders from major projects fell short of expectations.

Earnings affected by special items
The economic downturn was most noticeable in the group's earnings figures. Pre-tax earnings reached € 18.5 million, compared with € 24.6 million in 2007. It should be noted, however, that the sale of our IT activities in the previous year provided extraordinary income of € 1.5 million. The main reason for the fall in earnings, though, were negative special items of around € 4 million in the 4th quarter. These resulted above all from currency losses due to exchange rate fluctuations, as well writedowns on inventories, receivables and real estate. At around € 22 million, the group's operating result (i.e. without special items) was in line with an expected return on sales of 10%.

After income taxes, consolidated earnings amounted to € 12.6 million (previous year: € 16.2 million) resulting in earnings per share of € 2.03 (previous year: € 2.65).

Very healthy capital situation enables high dividend
Despite reduced earnings, R. STAHL was able to raise cash flow from operating activities considerably in 2008 to € 27.5 million, compared with € 17.7 million in the previous year. The main reason was a reduction in net current assets and, in particular, in receivables and inventories.

As a result of this positive development in cash flow, liquidity increased to € 34.1 million at year-end 2008 (previous year: € 29.8 million) and thus exceeded current and non-current liabilities by € 23.4 million. In conjunction with an improved equity ratio of 43.7% (previous year: 41.7%), the group therefore boasts a solid capital structure with considerable financial leeway in a difficult economic climate.

In accordance with the company's financial strength, the Managing Board and Supervisory Board will propose a dividend of € 0.90 (previous year: € 1.10) at the Annual General Meeting. This corresponds to a dividend payout ratio of 42%, compared with 40% in the previous year. R. STAHL AG will continue to ensure its stockholders participate appropriately in the company's success in future.

Q1/2009 figures down on previous year
In the first three months of 2009, the R. STAHL Group recorded a year-on-year fall in sales revenues of 4.3% to € 51.7 million. At € 53.8 million, order intake was also down on the prior-year figure of € 59.3 million. The decline in business was due to weak demand as a result of the general economic crisis. Pre-tax earnings fell from € 6.6 to € 2.5 million.

R. STAHL will publish its detailed figures for the first quarter of 2009 on 18 May 2009.
 
Outlook 2009
For 2009 as a whole, the Managing Board expects lower sales and order intake than in 2008. As a supplier to the plant construction sector, R. STAHL does not generally feel the full effect of a downturn until later in the economic cycle. As a consequence, it is expected that sales of equipment for new plants will decrease further in the second half of 2009. As in the first quarter, earnings are likely to fall faster than sales. This is due to declining volumes and fiercer price competition as a result of excess industry capacity. An important aim of the company during the crisis is to maintain its core work force. This will enable it to continue its long-term growth strategy.

Thanks to the measures already introduced to optimise costs and processes, as well as the group's strong capital base, the Managing Board is confident that it can use the economic crisis to achieve a sustained improvement in its market position.
 

Key figures for the R. STAHL Group (figures in € million)

 

2008

2007

Change %

Order intake

223.6

220.1

+1.6

Sales

221.2

211.6

+4.5

Earnings before taxes (EBT)

18.5

24.6

- 24.8

Earnings per share (in €)

2.03

2.65

-23.4

Liquidity

34.1

29.7

+14.8

Dividend/share (in €)

0.90*

1.10

-18

Employees (annual average, without trainees)

1,320

1,222

+8.0

Trainees

67

72

-6.9

*Proposal to the Annual General Meeting

Full figures and detailed explanations on fiscal year 2008 are provided in our annual report.

The following documents for the balance press conference are available on our website:
Annual report: www.r-stahl.com/investor-relations/financial-reports.html
Slide presentation (only in German): www.r-stahl.com/investor-relations/investors-presentations.html
Pictures: www.r-stahl.com/downloads/press-photos/balance-press-conference-2009.html

Contact:
R. STAHL AG
Communication / Investor Relations
Judith Schäuble
Am Bahnhof 30, 74638 Waldenburg, Germany
Tel: +49 7942.943-1217, Fax: +49 7942.943-1364
E-mail: judith.schaeuble@stahl.de