EANS-Adhoc: gategroup Delivers Solid Results for First Half 2009

ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is solely responsible for the content of this announcement.


Resilient business model mitigates effects of weak airline environment

ZURICH, Aug. 13 --

Highlights for first half 2009:

  • Revenue of CHF 1,291.8 million, down 8.9% reported; down 2.0% in constant currencies
  • EBITDA of CHF 89.9 million, down 13.7% reported; down 6.1% in constant currencies; adjusted* EBITDA of CHF 96.5 million, down 3.5% in constant currencies
  • Operating profit of CHF 34.8 million, down 40.0% reported, down 31.2% in constant currencies; adjusted operating profit of CHF 49.2 million, down 12.1% in constant currencies
  • Profit for the period of CHF 33.2 million reported, up 89.3% in constant currencies
  • Adjusted cash flow from operating activities improved by CHF 32.6 million to CHF 18.5 million
  • Shares listed on SIX Swiss Exchange on 12 May

(*) Adjusted means normalized by one-time charges of restructuring costs and costs related to the listing process.

gategroup, the leading independent global provider of onboard services to companies that serve the travelling passenger, reported a first-half profit for the period of CHF 33.2 million against a backdrop of a worldwide economic recession and the most challenging conditions in recent memory for airlines, its core customer group.

The reported profit for the period was up by 89.3% on a constant currencies basis, primarily due to net foreign exchange gains of CHF 26.3 million. Fully diluted earnings per share were 1.63 CHF for the current period compared to 0.71 CHF in 2008.

"gategroup is maintaining respectable performance in one of the worst-ever industry environments," said Chief Executive Guy Dubois. "gategroup's business model is built to withstand the shocks of the cyclical industry it serves, and these results demonstrate that resilience, he said, adding, "We will continue to work closely with our key accounts as partners to address this economic challenge."

The results came on total revenue of CHF 1,291.8 million for the half year, a 2.0% drop in constant currencies.

Excluding a one-time charge of CHF 6.6 million, EBITDA was CHF 96.5 million, a 3.5% decline in constant currencies; EBITDA margin was 7.5%, a 0.1 percentage point decline in constant currencies; and operating profit, excluding one-time charges of CHF 14.4 million, was CHF 49.2 million, a 12.1% decline in constant currencies. On an adjusted basis, cash flow from operating activities was CHF 18.5 million, an improvement of CHF 32.6 million.

"Despite the difficult economic environment for airlines, gategroup remains confident in the industry. In line with the group's growth strategy, we made substantial investments in Scandinavia and Japan, which impacted cash flow in the first half in excess of CHF 40 million," said Chief Financial Officer Thomas Bucher. "The balance sheet remains solid, and the company sees no current need for an increase in capital," he said.

In May, gategroup undertook a significant next step in its evolution by listing its shares on the SIX Swiss Exchange under the symbol "GATE". The listing process ultimately led to a cash outflow of CHF 13.5 million during the first half. gategroup did not issue new shares nor raise capital. "But going public sets the stage for the company's future by raising visibility and flexibility in the financial marketplace, increasing the pool of potential investors, attracting and retaining key people, and raising awareness of gategroup's 11 brands," Bucher said.

Looking ahead, Dubois said the airline industry's financial condition remains fragile. "In our view the travel industry cycle has not yet reached bottom, and a turnaround will not be simultaneous across the world. We expect the US market to lead the way out, while Europe may see two to four more quarters of prolonged weakness," he said. "In addition to the continuously weak economic environment, the impact of the H1N1 swine flu pandemic may also have a delaying effect on the recovery," he added.

Dubois said uncertainty about the potential ongoing impact of the pandemic prevents the company from giving full-year guidance.

"The historic trend for airline passenger volume growth has been decidedly positive - an average annual rate of 4.7% since 1970. History shows that, at the end of past recessions, passenger volume was higher than at the entry point. We look forward to the inevitable upturn," Dubois said.

Key figures
In CHF m except per share data

Period ended 30 June 30 June 2009 2008 Revenue 1,291.8 1,417.9 EBITDA 89.9 104.2 EBITDA margin 7.0% 7.4% EBITDA adjusted* 96.5 107.8 EBITDA margin adjusted* 7.5% 7.6% Operating profit 34.8 58.0 Operating profit margin 2.7% 4.1% Operating profit adjusted* 49.2 62.8 Operating profit margin adjusted* 3.8% 4.4% Finance income/ costs, net 4.3 -29.3 Profit before tax 39.9 29.2 Profit for the period 33.2 21.4 Basic earnings per share 1.66 0.72 Fully diluted earnings per share 1.63 0.71

(*) Adjusted means normalized by one-time charges of restructuring costs and costs related to the listing process.

in CHF m 30 June 31 December 2009 2008 Current assets 709.8 598.7 Non-current assets 902.5 843.9 Total assets 1,612.3 1,442.6 Current liabilities 602.0 574.7 Non-current liabilities 928.0 809.3 Total liabilities 1,530.0 1,384.0 Equity attributable to owners of the Company 54.5 30.6 Non-controlling interests 27.8 28.0 Total equity 82.3 58.6 Total liabilities and equity 1,612.3 1,442.6 203.0 155.2 Cash and cash equivalents Short-term debt 82.9 85.9 Long-term debt 698.8 572.7 30 June 30 June 2009 2008 Period ended In CHF m Net cash flow (used in) operating activities -4.4 -20.4 Net cash flow (used in) operating activities adjusted* 18.5 -14.1 Net cash flow (used in) investing activities -53.1 -50.4 Net cash flow from financing activities 115.6 34.5 Change in cash 58.1 -36.3

For more detailed information, please see gategroup's Interim Report 2009, which is available in the Investor Relations section of our web site, www.gategroup.com.

This publication may contain specific forward-looking statements, e.g., statements including terms like "believe", "assume", "expect" or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties readers should not rely on forward-looking statements. The company assumes no responsibility to update or revise any of these forward-looking statements or to adapt them whether to reflect new information, future events, developments or circumstances or otherwise.

gategroup CEO Guy Dubois and CFO Thomas Bucher invite media representatives to participate in a telephone conference call regarding Half Year Results 2009.

The call will be held at 9 a.m. CET on Thursday, 13 August 2009.
To participate, please call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone

Direct dial-in numbers:
+41 (0)91 610 56 00 (CH & Other Countries)
+44 (0)207 107 06 11 (UK)
+1 866 291 4166 (USA - Toll-Free)
+49 (0)69 2 22 22 05 93 (Germany)

gategroup CEO Guy Dubois and CFO Thomas Bucher invite analysts and investors to a presentation of Half Year Results 2009.

The presentation can be accessed via webcast and dial-in teleconference at 3 p.m. CET on Thursday, 13 August 2009.

To listen to the teleconference, please call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone

Direct dial-in number:
+41 (0)91 610 56 00 (CH & Other Countries)
+44 (0)207 107 06 11 (UK)
+1 866 291 4166 (USA - Toll-Free)
+49 (0)69 2 22 22 05 93 (Germany)

To link to the live webcast of the presentation, please go to the "Investor Pack" tab under the "Investor Relations" section of the gategroup website, www.gategroup.com

SOURCE gategroup

end of announcement euro adhoc

emitter: gategroup Holding AG Balz-Zimmermannstrasse 7 CH-8302 Kloten phone: +41 43 812 54 96 FAX: +41 43 812 91 19 mail: invest@gategroup.com WWW: http://www.gategroupmember.com/ sector: Consumer Goods ISIN: CH0100185955 indexes: stockmarkets: Hauptsegment: SIX Swiss Exchange language: English

Rückfragen & Kontakt:

Media; John Bronson, Corporate Communications, +41-43-812-2048,
jbronson@gategourmet.com, Investor-Analysts; Dagmara Wawrzonowska, Investor
Relations, +41-43-812-5496, dwawrzonowska@gategourmet.com