SOURCE: Groupe SEB

September 06, 2005 02:02 ET

Groupe SEB announces 2005 First-Half Results

Paris, France -- (MARKET WIRE) -- September 6, 2005 --

                                                   6 September 2005


                                                      Press release



                            2005 First-Half Results

                            Stable Operating Margin
                             Strengthened Positions


   *In an economic environment that varied greatly from one region to
    another, the Group's active acquisitions strategy helped boost 
    sales by 3.3%. Operating margin was stable at EUR67 million.
   *Income from ordinary activities before net financial expense rose
    by 35% to EUR51 million and actions taken to increase 
    manufacturing competitiveness were pursued. Net income totalled 
    EUR24 million.
   *Following the first-half acquisitions, net debt at 30 June 2005
    amounted to EUR440 million. The debt-to-equity ratio therefore 
    stood at 0.6, confirming Group's healthy financial structure.


EUR millions                        H1 2004     H1 2005   Variation
                                       IFRS        IFRS  % based on
                                                              exact
                                                            figures
Sales                                    971       1,003      + 3.3
Operating margin                          67          67      + 0.4
Income from operations (EBIT)             38          51     + 35.0
Net income                                25          24      - 6.3
"The generally unstable, mixed economic environment of the past two years and the structural changes in our business support our strategic commitment to global expansion, targeted acquisitions and constant adaptation. Pursuing these three paths will enable us to consolidate our market positions and performance over the long run."

Thierry de La Tour d'Artaise, Chairman and Chief Executive Officer

*Stable operating margin

Sales increased by 3.3% in the six months ended 30 June 2005. Business was very contrasted from one region to another, as sales declined in Europe, where consumer spending remained sluggish, rebounded in North America and rose sharply in South America, as well in other countries around the world that represent future growth drivers. In this context, sales at constant scope of consolidation and exchange rates were down by 2% for the period, whereas the consolidation of acquisitions (All-Clad for six months, Lagostina for two months and Panex for one month) added EUR47 million to consolidated sales.

Operating margin was stable at EUR67 million. At a time of sharp deflationary pressure on prices, this result reflects the positive impact of acquisitions and Group's ongoing initiatives to maintain competitiveness through greater manufacturing efficiency and disciplined management of purchasing prices and costs.

   *Income from operations (EBIT) up 35% (not to be extrapolated over the
    entire year)
    Net income down 6%

During the first half, the iron production plant in Germany was resized. The resulting cost reduced income from operations by EUR11 million (compared with restructuring expenses of EUR20 million in first-half 2004). Measures to adjust the production base and ensure long-term competitiveness will be pursued.

Net income declined by 6% to EUR24 million, reflecting higher interest expense due to acquisitions and an increase in income tax for the period, as expected.

*A healthy balance sheet

At 30 June 2005, debt totalled EUR440 million, compared to EUR330 million at 31 December 2004. The increase resulted from acquisitions made in the past six months as well as from the impact of a more global business for the Group. Shareholders' equity at 30 June amounted to EUR709 million, an all-time high. As a result, the debt-to-equity ratio stood at 0.6, compared with 0.5 at 31 December 2004.

*Outlook

With the economic and competitive environment in Europe expected to remain difficult, Groupe SEB is taking a cautious outlook for the months ahead. Nonetheless, the Group is confident that it will meet its 2005 objectives of growth in sales at constant exchange rates and of a slight improvement in operating margin, thanks to its ambitious programme of new product launches -notably in the premium segment-, rapid international expansion, ongoing measures to adjust production resources and contributions from acquisitions.

Consolidated income statements at 30 June

in EUR millions                             H1 2004        H1 2005
                                               IFRS           IFRS
Net sales                                       971          1,003
Operating expenses                            (904)          (936)
Operating margin                                 67             67
Incentive bonuses and profit-sharing            (9)           (10)
Other operating revenues and expenses          (20)            (6)
Income from operations (EBIT)                    38             51
Net financial expense                           (5)           (10)
Income from companies accounted for               -            (1)
by the equity method
Income before income taxes                       33             40
Income taxes                                    (7)           (16)
Minority interests                              (1)              -
Net income attributable to SEB S.A.              25             24


Consolidated balance sheet at 30 June

Assets                                 30 June 2004    30 June 2005
In EUR millions                                IFRS            IFRS
Goodwill                                         29             168
Other intangible assets                          74             222
Property, plant and equipment                   348             374
Investments                                       4               2
Other non-current financial assets                3               6
Deferred taxes                                   91              81
Other non-current assets                          7               2
Non-current assets                              556             855
Inventories                                     443             569
Trade receivables                               389             399
Other receivables                                48              61
Income tax prepayments                           16              14
Cash and cash equivalents                        49              37
Current assets                                  945           1,080
Total assets                                  1,501           1,935

Liabilities and shareholders' equity   30 June 2004    30 June 2005
in EUR millions                                IFRS            IFRS
Common stock                                     51              51
Additional paid-in capital and                  596             726
retained earnings
Treasury stock                                 (56)            (69)
Shareholders' equity                            592             708
Minority interests                                5               1

Shareholders' equity including                  597             709
minority interests

Deferred tax liabilities                         21              96
Other long-term provisions                      115             100
Long-term provisions for                         11              11
restructuring
Long-term debt                                   25             112
Other non-current liabilities                     6               1
Non-current liabilities                         178             320

Other short-term provisions                      33              39
Short-term provisions for                        15              17
restructuring
Short-term debt                                 219             366
Trade payables                                  265             299
Other current liabilities                       164             164
Income tax payable                               30              21
Current liabilities                             726             906
Total liabilities and shareholders'           1,501           1,935
equity

             The interim report will be available in early October
  Sales for the first nine months of the year will be announced on 13 October


                      This information is provided by RNS
            The company news service from the London Stock Exchange