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[November 2003]
Waterford Wedgwood Announces Interim Results
On 14 November Waterford Wedgwood announced first half (to 30 September 2003) group sales totalling €405.8 million (2002: €471.2 million) - down 3.7% at constant exchange rates and 13.9% at prevailing exchange rates. First quarter sales were down 9%, second quarter sales equal to last year and September sales up 3% (all at constant exchange rates).
Second quarter trading was stronger, with an operating profit of €16.1 million against an operating loss of €11.9 million in the first quarter. The first quarter result was heavily influenced by loss of sales caused by the war in Iraq and the SARS epidemic.
First half EBITDA before restructuring charges was €22.7 million (2002: €60.7 million) while there was a group pre-tax loss of €12.1 million (2002: profit of €24.5 million on a comparable basis) before previously announced exceptional restructuring charge of €32.7 million. The year-on-year variances were mainly caused by a difficult trading environment, lower capacity utilisation and adverse exchange movements.
Chairman Sir Anthony O'Reilly said: "We are pleased with the reversal of the first quarter performance to produce operating profit of €16.1 million in the second quarter. Like virtually all luxury goods businesses, we experienced a very challenging first quarter,
"During the first half of this year, we continued to focus on our fixed cost base by implementing important restructuring and outsourcing programmes and by investing in cost saving technology. These programmes include the closure of two factories in England, the shrinking of our workforce by some 1000 people this year, and the outsourcing of our entire Johnson Brothers production to Asia at significantly enhanced profit margins.
"These programmes, all at a once-off cost, are beginning to generate an improvement in profitability and we expect to generate total annual cost savings of €38.5 million. €2 million was achieved in the first half and €14 million is expected to be achieved in the second half of this fiscal year."
Sales of ceramic products were €170.3 million (2002: €211.1 million), down 12.3% at constant exchange rates and 19.3% at prevailing rates as the European ceramic market continued to prove difficult. Despite this, the combined Waterford and Wedgwood share of the US formal china market has grown from 21.5% to 24.5%, placing the group a strong and rapidly second in the vast US market.
ENDS