- 12.08.2010, 06:31:28
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EANS-Adhoc: gategroup Posts Strong First Half 2010 Results
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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.
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12.08.2010
Convincing performance despite weak economic and airline industry
environment and effects of volcanic ash cloud
ZURICH, Aug. 12 -- Highlights for the first half 2010:
- gategroup reports increases in revenue and operating profitability and
strong cash flow despite challenges in the global economy and airline
industry environment and effects of volcanic ash cloud
- Revenue of CHF 1,317.2 million, up 2.0% reported; up 3.0% in constant
currencies
- EBITDA of CHF 93.8 million, up 4.3% reported; up 4.6% in constant
currencies
- EBITDA margin of 7.1%, up 0.1 percentage point reported and in constant
currencies
- Operating profit of CHF 40.5 million, up 16.4% reported; up 11.8% in
constant currencies
- Reported profit for the period CHF 10.3 million; down 69.0% reported
- Cash flow from operating activities of CHF 21.0 versus CHF -2.4 million
- Net debt of CHF 418.1 million, down 27.8%
gategroup, the leading independent global provider of onboard products
and services, reported first half 2010 improvements in revenue, operating
profitability and cash flow against a backdrop of continuing global economic
uncertainty and an airline industry just starting on the path to recovery.
Airlines, gategroup's main customer group, in the U.S., Asia and Latin
America have reported significantly improved results, but the situation in
Europe remained clouded in the first half. Continuing challenges due to the
debt crisis, industry labor unrest and the volcanic eruption in April all
combined to depress the performance of Europe's airlines, and gategroup was
not immune to these effects. Due to the ash cloud alone, gategroup
experienced an operational impact on revenue of CHF 21.0 million and CHF 8.0
million in EBITDA.
"Despite the exceptional challenges, gategroup has once again delivered
to expectations," said Chief Executive Officer Guy Dubois. "Our business
model continues to demonstrate its resilience."
Strong underlying performance
Operating profit for the period was CHF 40.5 million, an 11.8 percent
gain over the same period last year after adjusting for foreign currency
fluctuations. Profit for the period was CHF 10.3 million in 2010 versus CHF
33.2 million last year, due largely to an unrealized foreign exchange gain
not repeated in 2010.
Reported earnings before interest, taxes, depreciation and amortization
(EBITDA) also increased to CHF 93.8 million versus CHF 89.9 million, which
resulted in a reported EBITDA margin of 7.1% for 2010, virtually the same as
2009.
"We are pleased with these results in the context of the overall economic
and industry climate," Dubois said. "They are a testimony to our long-term
strategy, dedicated employees and high quality management."
gategroup continued to generate strong cash flow from operating
activities. The amount for 2010 was CHF 21.0 million compared to CHF -2.4
million in 2009. "This is another reflection of strong underlying
performance," said Thomas Bucher, Chief Financial Officer. Capital
expenditures, meanwhile, decreased from CHF 41.7 million in 2009, when the
company made significant investments in Japan and Scandinavia, to CHF 26.3
million during the same period this year.
"We believe that our cash flow generation will remain strong going
forward and, as a result, we intend to be able to further reduce our net debt
level by the end of the year," Bucher said. Net debt at the end of the 2010
first half was CHF 418.1 million, down from last year's CHF 578.7 million.
Furthermore, equity attributable to shareholders of the Company increased
year over year by CHF 79.9 million to CHF 134.4 million.
Significant contract wins and retentions
gategroup's comprehensive offering of end-to-end solutions and the
ability to cross-sell among brands helped maintain a solid top line. For
example, in North America, Virgin Atlantic chose Gate Gourmet, Pourshins and
Supplair to service its flights at all 10 of its U.S. gateways. Gate Gourmet
focuses on catering and provisioning, Pourshins on supply chain management
and Supplair on innovative, centrally produced food and packaging solutions.
Elsewhere, the company's focus on deepening relationships with existing
customers continued to bear fruit. Swiss International Air Lines, for
instance, extended and awarded new contracts to Gate Gourmet in the U.S.,
Latin America and Asia. Other examples for Gate Gourmet include American
Airlines in Los Angeles and Singapore Airlines in Zurich. Pourshins and
Supplair continued to develop and expand business with United Airlines, and
Pourshins and Harmony, which specializes in passenger comfort items, did so
with Emirates. eGate Solutions gained momentum with its newly developed GP4
galley planning product with inaugural customers Singapore Airlines and LAN
Airlines. Also, JetBlue began using eGate Solutions' newly acquired TS4
application to process transactions for onboard retail sales, an area in
which gategroup brands have taken the lead in offering management and
technology solutions.
Investments in the future
The company also announced several strategic investments aimed for
long-term growth. In Tokyo, Gate Gourmet is expanding its catering
capabilities to include Haneda Airport this fall when a new runway will
permit international flights. Pourshins also will open a bonded warehouse at
Haneda.
In London, the transition of British Airways' short-haul business to
another provider, completed in May, has allowed the company to rationalize
its footprint at Heathrow Airport. A new purpose-built flight assembly center
at Heathrow North, which opened in July, gives the company increased
flexibility in its operating model. A refurbished Heathrow West continues to
cater British Airways' long-haul flights and the company will end the lease
on the Heathrow South building before year-end.
In Latin America, Gate Gourmet in July completed construction begun last
year on a new more efficient, eco-friendly facility in Guayaquil, Ecuador.
Key labor accords
There were also important developments on the employee relations front.
Gate Gourmet's union-represented workers in the U.S. ratified a new agreement
through the end of 2012. Labor accords also were reached in the U.K.,
Argentina and Brazil.
Outlook cautiously optimistic
Airlines have started to gain positive traction and the International Air
Transport Association (IATA) has revised its 2010 outlook from a loss of
nearly $3 billion to a profit of $2.5 billion on the strength of a global
traffic upturn. IATA, however, expects airlines in Europe to lose an
estimated $2.8 billion for the full year, the only region anticipated to be
in the red.
From a gategroup perspective, the North American market is stabilizing.
The Asia Pacific and Latin America regions are developing positively.
However, we believe that a turnaround in Europe will only begin later this
year.
"gategroup remains cautiously optimistic about the outlook for the
remainder of 2010," Dubois said. "Based on these solid first half results and
an anticipated recovery during the second half in Europe, all other things
being equal, we now expect an EBITDA margin of close to 8% with continued
strong operating cash flow.
Key figures of gategroup
Income Statement information
In CHF m except per share data
Period ended June 30, 2010 June 30, 2009 Revenue 1,317.2 1,291.8 EBITDA 93.8 89.9 EBITDA margin 7.1% 7.0% Operating profit 40.5 34.8 Operating profit margin 3.1% 2.7% Finance (costs)/ income, net (26.5) 4.3 Profit before tax 14.5 39.9 Profit for the period 10.3 33.2 Basic earnings per share in CHF 0.52 1.66 Diluted earnings per share in CHF 0.49 1.63 Balance Sheet information in CHF m June 30, 2010 June 30, 2009 Current assets 658.3 691.7 Non-current assets 847.8 903.1 Total assets 1,506.1 1,594.8 Current liabilities 538.1 584.5 Non-current liabilities 807.8 928.0 Total liabilities 1,345.9 1,512.5 Equity attributable to company shareholders 134.4 54.5 Non-controlling interests 25.8 27.8 Total equity 160.2 82.3 Total liabilities and equity 1,506.1 1,594.8 Cash and cash equivalents 213.2 203.0 Short-term debt 18.7 82.9 Long-term debt 612.6 698.8
Cash Flow information
in CHF m June 30, 2010 June 30, 2009 Profit before tax 14.5 39.9 Cash generated from operations 43.1 21.9 Interest, net (14.4) (20.2) Income taxes paid, net (7.7) (4.1) Net cash flow from operating activities 21.0 (2.4) Acquisition of subsidiaries - (14.2) Capital expenditure (26.3) (41.7) Other (3.3) 0.8 Net cash flow investing activities (29.6) (55.1) Net cash flow financing activities (32.7) 115.6 (Decrease)/increase in cash and cash equivalents (41.3) 58.1
For more detailed information, please see gategroup's Half Year Report
2010, which is available in English in the Investor Relations section of our
web site, www.gategroup.com.
About gategroup:
gategroup is the leading independent global provider of onboard services
to companies that serve people on the move. gategroup comprises 11 brands,
which are deSter, eGate Solutions, Elan, Gate Aviation, Gate Gourmet, Gate
Safe, Harmony, Performa, potmstudios, Pourshins and Supplair.
The Group's world-class capabilities are focused in catering and
hospitality; provisioning and logistics; and onboard solutions.
Our customers include top airlines and railroads around the world that
rely on our expertise and solutions tailored to their guests, service
offerings and geographic regions.
Shares of Zurich-based gategroup are traded on the SIX Swiss Exchange
under the symbol GATE. Please visit www.gategroup.com.
IMPORTANT NOTICE
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.
INVITATION TO MEDIA
gategroup CEO Guy Dubois and CFO Thomas Bucher invite media
representatives to participate in a telephone conference call regarding First
Half 2010 Results.
The call will be held at 09:00 CET on Thursday, Aug. 12, 2010.
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 (Europe)
+44 (0) 207 107 06 11 (UK)
+1 866 291 4166 (USA - Toll-Free)
+49 (0) 69 2 22 22 05 93 (Germany)
INVITATION TO ANALYSTS AND INVESTORS
gategroup CEO Guy Dubois and CFO Thomas Bucher invite analysts and
investors to participate in a telephone conference call regarding First Half
2010 Results.
The presentation can be accessed via webcast and dial-in teleconference
at 13:30 CET on Thursday, Aug. 12, 2010.
To listen to the live presentation via teleconference, 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 (Europe)
+44 (0)207 107 06 11 (UK)
+1 866 291 41 66 (USA - Toll-Free)
+49 (0)69 2 22 22 05 93 (Germany)
Please note that media will not be able to ask questions during the Q&A
session for analysts and investors.
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
Further inquiry note:
CONTACT: For media, John Bronson, Corporate Communications,
jbronson@gategourmet.com, +41 43 812 2048, or For investors/analysts, Laura
Clavari, Investor Relations, +41 43 812 5496, invest@gategroup.com
end of announcement euro adhoc
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issuer: 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
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