Highlights:
-- First quarter revenues grew organically by 1.3%; excluding fax by 1.8%
-- Revenues from sales of printers up organically by 5.9%, partly thanks to partnerships
-- Recurring revenues lag behind because of economic situation in US
-- Gross margin decreases to 38.5% (2007: 39.4%)
-- Operating income is Euro 32.1 million, excluding one-off items Euro 17.5 million
-- Extra cost reduction of Euro 50 million to Euro 80 million in 2008
Comments by Rokus van Iperen, Chairman of the Board of Executive Directors:
'In the first quarter two significant developments occurred:
First, revenues from the sale of printers increased organically by 6%, partly due to our successful partnerships. On the back of this good sales performance, Oce has gained market share in wide format, color and high volume cutsheet printing. Especially in Asia we achieved excellent growth, whilst sales also increased in Europe.
Second, we felt the effects of recent economic developments. Especially in the financial sector, the purchase of new very high volume printers was postponed. Oce traditionally holds a strong position in this sector. There was also a decrease in printing volume at banks and in the construction sector, particularly in the United States, which meant that revenues from maintenance, toner and media lagged behind those of the previous year.
In 2007 Oce successfully started the implementation of the Strategic Plan 2007-2010. We are continuing to invest in expanding our distribution power and developing competitive products. In addition we are intensifying the co-operation with our partners both in distribution and in product development. Due to the economic uncertainty additional measures are being taken to reduce costs further. The aim for total 2008 is to realize an extra cost reduction of Euro 30 million to a total of Euro 80 million.'
Oce sells more printers despite lower than expected demand in some sub-markets Results first quarter 2008* Key figures First quarter In million Euro / as % 2008 2007 Total revenues 702.2 729.2 -3.7% EBITDA 77.8 71.6 8.7% Operating income (EBIT) 32.1 21.3 50.6% Net income 21.3 12.2 74.7% In Euro per share EBITDA 0.92 0.85 7.7% Net income attributable to holders of ordinary shares 0.24 0.13 80.4% * The figures in this report are unaudited.
Key figures per Strategic Business Unit
In million Euro / as % DDS OBS WFPS Total
Revenues 393.2 105.1 203.9 702.2
Organic growth in revenues -1.0% 6.1% 3.4% 1.3%
Organic growth in non-recurring
revenues 3.8% n/a 9.9% 5.9%
Organic growth in recurring revenues,
excluding fax
-1.7% 6.1% 0.1% 0.3%
Operating income 16.0 2.7 13.4 32.1
Normalized operating income* -0.6 3.4 14.7 17.5
* adjusted for one-off items
Summary of first quarter 2008
Oce's revenues grew organically in the first quarter by 1.3% (excluding fax: 1.8%). There was a difference between the 5.9% growth in sales of printing systems (non-recurring revenues) and the stable revenues from services, toner and media (recurring revenues), excluding the fax activities.
The organic growth in revenues was not evenly spread between the Strategic Business Units (SBUs). The revenues of OBS (6.1%) and WFPS (3.4%) increased. The revenues of DDS were down by 1.0%. Excluding the sale of Oce Document Technologies (ODT), which took place in January 2008, the revenues of DDS were stable. Economic developments in the United States slowed down the growth in revenues.
Operating income increased to Euro 32.1 million, including a contribution of Euro 14.6 million from one-off items (balance of reorganization costs and the sale of ODT). The same items also had a positive effect on net income, which increased to Euro 21.3 million.
The euro increased against the US dollar (11%) and against the pound sterling (10%) in comparison with the first quarter of 2007. This had a negative impact on operating income but a positive effect on Capital Employed. The Return on Capital Employed (RoCE), excluding one-off items, increased to 7.2% (2007: 5.5%).
First quarter In million Euro 2008 2007 Operating income 32.1 21.3 Reorganization costs 5.2 - Sales of ODT -19.8 - ----------------------------------------------------------- Normalized operating income* 17.5 21.3 Capitalised R&D costs (net) 6.8 5.5 Costs of share-based compensation -1.3 -0.7 * adjusted for one-off items
Financial expenses (net) amounted to Euro 8.6 million (2007: Euro 10.0 million). The decrease was due to a lower net debt position, partly as a result of exchange rate effects.
Taxation amounted to Euro 2.3 million (2007: -Euro 0.8 million).
On balance, net income increased to Euro 21.3 million (2007: Euro 12.2 million).
