|Lower turnover in third quarter 2011/2012|
Key third-quarter developments:
In the third quarter of the 2011/2012 fiscal year, Holland Colours realized 3% lower sales than in the same period last year. Exchange rates had a negative effect of approximately 1% on the turnover development in this quarter.
Holland Colours ended the quarter with a negative net result compared to a slightly positive net result in the same period last year. As in the first half year, the main reason for the lower results is in the fact that increased raw material prices could not completely be passed on to the sales prices for end products. The relative gross margin is noticeably lower than in the comparable period last year.
The turnover decrease in the third quarter completely came to the account of the Division Europe. The markedly lower turnover of this division was partly compensated by a significant turnover increase of the division Asia. Turnover of the division Americas was slightly higher than the turnover in the third quarter of last year.
The Building & Construction focus market showed a marked decrease in turnover in the third quarter relative to the third quarter of last year. This decrease is mainly explained by the development in the division Europe. The decrease in volume was even greater but was partly compensated by higher sales prices.
The Packaging market realized a marginal lower turnover. A decrease in the division Americas was almost completely compensated by the division Asia. In the Division Europe, Packaging sales were just above the level of the third quarter of last year.
At the end of December, working capital was considerably higher than in the same period last fiscal year, mainly due to higher raw material inventories. The increased value as a result of higher raw material prices is the main cause of this increase. In addition, the volume of some critical raw materials has been temporarily increased anticipating for announced purchase price increases per January1, 2012.
Despite the lower result and the increase of working capital the Total Debt / EBITDA ratio stayed well within the covenant as agreed with the bank. Also the other bank covenants have been met.
Third quarter results do not give a reason to change the earlier communicated outlook. Unforeseen circumstances aside, Holland Colours still expects for financial year 2011/2012 a lower turnover and a sharply lower net result as compared to the 2010/2011 financial year. The results for the financial year 2011/2012 will be announced to the market on Friday May 25, 2012 after stock-exchange close.