May 10, 2012 - gategroup increases revenue, operating performance improves

Details

Parent Category: gategroup press releases

Published on Thursday, 10 May 2012 03:58

Deutsche Version         Version Française

ZURICH, May 10, 2012 –

• Revenue of CHF 656.7 million, up 2.9% on a reported basis; up 6.0% in constant currencies

• Segment EBITDA of CHF 25.5 million, up 4.5% on a reported basis; up 7.0% in constant currencies

• EBITDA margin of 3.9%, up 0.1 percentage point

• Operating profit of CHF 4.7 million, up 20.5% on a reported basis; up 17.9% in constant currencies

• Loss for the quarter of CHF 14.8 million versus a loss of CHF 6.2 million in 2011, due to refinancing costs

• Cash flow from operations of CHF 2.7 million, compared to a negative CHF 28.6 million reported the previous year

• Net debt of CHF 205.5 million, an increase of CHF 11.6 million over 2011

• Refinancing successfully completed with senior unsecured notes of EUR 350 million and a EUR 100 million unsecured revolving credit facility

gategroup Holding AG, the leading independent global provider of onboard products and services, delivered improved revenue and operating performance in the first quarter ending March 31, 2012.

The results are the first ever published for the January-March period since the Company listed on the SIX Swiss Exchange in 2009. This action follows a decision by the Board of Directors to introduce quarterly reporting to enhance performance tracking of gategroup by shareholders and investors.

gategroup’s business is seasonal and a large percentage of revenue is generated in the second and third quarters each year, which reflects long-established consumer travel patterns and the performance of airlines, the Company’s primary customer base. This seasonality affects the comparability of gategroup results between quarterly periods.

Earnings before interest, taxes, depreciation and amortization (“Segment EBITDA”) is also seasonal, and, like revenue, generally exhibits its strongest performance in the second and third quarters. Cash generated from operations is strongest in the fourth quarter due to the invoice-payment cycle following the high travel season.

On a reported basis, Group revenue of CHF 656.7 million was CHF 18.3 million higher than the comparable 2011 period, an improvement of 2.9%. The improvement was driven mainly by higher passenger volume year over year. On a constant currency basis, revenue rose to CHF 676.8 million, an increase of 6.0%.

Segment EBITDA was CHF 25.5 million, up 4.5% from CHF 24.4 million in 2011, resulting in an EBITDA margin of 3.9% on both a reported and constant currencies basis. An external event that impacted the Q1 income statement for 2011 was the Japan disaster.

Operating profit was up 20.5% on a reported basis to CHF 4.7 million while on a constant currency basis the operating profit showed a 17.9% improvement. Loss for the period was CHF 14.8 million due to higher financial expenses that include one-off costs associated with the refinancing, unfavorable foreign exchange movements and taxes. In 2011 the loss was CHF 6.2 million.

Cash flow from operations, meanwhile, was CHF 2.7 million versus a negative result in 2011 of CHF 28.6 million. The cash flow result was mainly due to better working capital management driven by a lower investment in inventory, lower outflows from trade payables and lower cash requirements for provisions and retirement benefit obligations.

Notable developments in the first quarter of 2012 included:

• Successful execution of a refinancing strategy including the issuance of senior unsecured notes in the amount of EUR 350 million to repay indebtedness and cancel all commitments under the existing credit facilities, and issuance of a EUR 100 million multi-currency revolving credit facility for working capital and general corporate purposes

• The acquisition of Helios Market, Product and Production Development by gategroup’s deSter subsidiary to leverage synergies in marketing, manufacturing and supply chains solutions by these complementary businesses

• The exercise of a call option with India Hospitality Corp. to acquire the remaining 26% of Skygourmet to provide maximum flexibility to run the Indian business as a fully owned and integrated operation

• A realignment of gategroup operations into two businesses –  Airline Solutions and Product and Supply Chain Solutions

“Looking ahead for this year, gategroup is maintaining an expectation of flat growth in real terms across its portfolio given the uncertain economic conditions that exist. Therefore, we are not providing definitive guidance on profitability due to potential volatility in certain key regions, notably Europe and its associated sub-markets. Nevertheless, we balance our short-term tactics with a long-term view and we will continue to invest in the business to enable future growth,” said gategroup CEO Andrew Gibson.

“Demand for air travel has shown steady upward growth for more than 40 years. We see no reason why that long-term trend will not continue with rebounds in passenger volumes after some periods of flat demand,” Gibson said.

Please see the following link on the gategroup web site for a copy of the Q1 financial results report and additional information:

http://www.gategroupmember.com/index.php?option=com_content&view=article&id=534&Itemid=228

About gategroup:
gategroup is the leading independent global provider of products, services and solutions related to a passenger’s onboard experience. gategroup comprises the following brands: deSter, eGate Solutions, Gate Aviation, Gate Gourmet, Gate Retail Onboard, Gate Safe, Harmony, Performa, potmstudios, Pourshins and Supplair.

Shares of Zurich-based gategroup are traded on the SIX Swiss Exchange under the symbol GATE. 

Click here for financial highlights of Q1 2012.

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.