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[January 2004]
Waterford Wedgwood Trading Update
On 27 January 2004, Waterford Wedgwood reported that world-wide sales for the fourth quarter of 2003 were €241.9 million, equal to the same period of last year on a like-for-like basis. Operating margins improved to 7.7% in the quarter, generated by the successful flow-through of improvements to the company's fixed cost base as a result of the group's substantial investment in cost reductions, outsourcing programmes and technology. The company said that it had achieved a satisfactory performance in the Christmas shopping season, despite industry sales which were concentrated in the last 10 days in December.
International operations performed well. In the important Japanese market, sales were up 11% in the quarter and by 6% year-to-date on a like-for-like basis. Wedgwood remains the market leader in its category in Japan and the company said that it anticipated further growth in 2004.
The group's US sales were level with last year, rated a creditable performance given uncertainties in the US marketplace. Notable successes were cited as Wedgwood's 'Vera Wang at Wedgwood' line of luxury giftware and tableware products, All-Clad's popular 'Emeril at All-Clad' line of cookware and Waterford's 'Waterford Holiday Heirlooms' line of luxury Christmas items, all of which grew strongly.
Wedgwood's sales in the USA were up 7.4% in the nine-month period versus last year. Waterford Crystal continued to dominate the high end of the US crystal market, garnering an 84% market share of crystal giftware sales at price points of $100 and above and an 88% share of crystal stemware at price points in excess of $30.
Trading within Europe was weaker, with Ireland in particular feeling the impact of exchange rates on tourist sales. Rosenthal's sales, however, dropped only 2% in the quarter. The company commented that while this was a very creditable performance given Germany's continuing lack of consumer confidence, there had been encouraging sales trends in the German market in recent weeks.
Group Chief Executive Redmond O'Donoghue commented: "There are exciting things happening at Waterford Wedgwood. Our great global brands are strong, and each holds the promise of accelerating growth. Calendar 2003 ended in satisfactory form for the Group, with even better prospects for the year to come.
"I am delighted with the strength and breadth of our new offerings and programmes, and with the quality of people joining our Group to strengthen an already deep management team. We will continue to add value in the best interests of our shareholders and our customers."
ENDS