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IFCO Systems N.V. (FRA:IFE1) Corporate news announcement processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- --------------
IFCO SYSTEMS' group revenues grew by 9.5% in Q3 2008 and EBITDA increased by 2.9% compared to prior year quarter. Year to date group revenues grew by 8.7% and EBITDA by 4.7% compared to prior year.
Q3 2008 revenues on a group level increased by US $16.5 million, or 9.5%, to US $190.3 million (YTD 2008, 8.7% to US $556.1 million). RPC Management Services' Q3 2008 revenues increased by US $13.9 million, or 16.3%, to US $99.5 million compared to Q3 2007 (YTD 2008, 10.1% to US $263.5 million), largely as a result of the acquisition of STECO and solid organic growth. Pallet Management Services' revenues grew by US $2.6 million, or 2.9%, in Q3 2008 to US $90.9 million compared to the prior year quarter (YTD 2008, US $20.1 million, or 7.4%, to US $292.6 million).
Q3 2008 EBITDA grew by US $0.8 million, or 2.9%, to US $29.6 million (YTD 2008 grew by 4.7% to US $81.0 million). LTM Q3 2008 EBITDA reached a level of US $110.7 million. EBITDA in the RPC Management Services business segment grew by US $0.2 million, or 1.0%, in Q3 2008 compared to Q3 2007, and YTD 2008 EBITDA declined 4.9% to US $61.8 million. Despite the lower European trip volumes caused by the termination of a RPC retail contract, which has decreased fixed cost leverage, and despite higher fuel costs, RPC Management Services' EBITDA margin grew on a sequential basis to 24.3% in Q3 2008. Stable profitability in our RPC US business and improved operating synergies resulting from the STECO acquisition also contributed to the margin gains. Pallet Management Services' EBITDA increased by US $1.1 million, or 18.8%, to US $7.2 million in Q3 2008 compared to Q3 2007, and YTD 2008 increased significantly by 54.7% to US $24.8 million. EBITDA in the Pallet Management Services segment has continued to increase, although economic weakness has resulted in reduced growth and increased pricing pressure in certain regions of the North American market. Additionally, fuel costs have been significantly higher in 2008 than in 2007.
EBITDA margin on group level has improved each quarter of 2008, starting with 13.3% in Q1 2008, improving to 14.7% in Q2 2008 and reaching 15.5% in Q3 2008. These gains are expected to continue in Q4 2008.
Q3 2008 EBIT grew by US $1.4 million, or 8.0%, to US $19.3 million (YTD 2008 fell by 1.8% to US $46.6 million). EBIT has developed in excess of EBITDA as a result of overall reductions in relative depreciation levels. LTM Q3 2008 EBIT reached a level of US $65.7 million.
Net profit decreased by US $7.6 million, or 75.6%, to US $2.5 million in Q3 2008 (YTD 2008, 62.4% to US $8.4 million). Although EBIT increased in Q3 2008, higher nonrecurring SG&A expenses resulting from increased (US $2.9 million) legal defense costs related to the ICE investigation and the start-up of our Brazilian RPC business (US $1.0 million), together with higher net interest costs, resulted in lower net profit.
Operating cash flows from continuing operations before income tax payments declined significantly from US $82.0 million in YTD 2007 to US $26.1 million in YTD 2008. This decline was primarily caused by the usage of working capital, as reduced refundable deposit levels and other related effects on working capital followed the termination of a RPC retail contract in Europe.
Capital expenditure levels, excluding the 2008 effects of the STECO acquisition, decreased by 22.9% to US $39.5 million. Capital expenditures in RPC Europe decreased significantly by 74.0% compared to prior year levels. Including the cash paid for the STECO acquisition in 2008 and the South America acquisition in 2007, our YTD 2008 capital expenditure levels increased by 30.0% to US $68.8 million.
ROCE from continuing operations, on a LTM basis, decreased to 14.7% as of September 30, 2008, compared to 17.5% as of September 30, 2007.
US $ in Q3 2008 Q3 2007 % YTD YTD % LTM Q3 thousands, Change 2008 2007 Change 2008 except per share amounts
Net profit 0.05 0.19 (75.4%) 0.16 0.41 (62.2%) 0.24 per share - basic Net profit 0.05 0.19 (75.3%) 0.16 0.41 (62.0%) 0.24 per share - diluted
Operating cash flows from 26,687 42,679 (37.5%) 26,135 82,010 (68.1%) 62,964 continuing operations Capital expenditures from 21,465 21,597 (0.6%) 68,807 52,915 30.0% 93,391 continuing operations
Return on 14.7% 17.5% capital employed (ROCE)
Outlook: In light of the global financial crisis and the significantly reduced expectations for the worldwide economy, the Company expects that the economy in Europe will slow down during the remainder of 2008. The economy in the United States has slowed markedly in recent quarters and will likely remain depressed during the remainder of 2008 and into 2009. These conditions will result in difficult economic conditions in our key markets. The Company is very sensitive to these developments and is closely monitoring the key financial and operational indicators in our businesses in order to appropriately react.
The Company has initiated various projects to further grow our RPC business and has already built a good backlog of new prospects. Additionally, the Company expects to leverage synergies resulting from the acquisition of STECO.
Although the recovery in the productivity and profitability of the Pallet Management Services segment has continued during 2008, the rapidly weakening economic conditions could result in lower volumes during the remainder of 2008 and into 2009.
Despite this environment, IFCO SYSTEMS expects increased revenues and improved profitability on a group level in fiscal 2008 as compared to fiscal 2007.
For further explanations, please see IFCO SYSTEMS' quarterly report, which will be filed with the Deutsche Börse AG on or about November 06, 2008, and will be available on the Company's website www.ifcosystems.com or www.ifcosystems.de.
This release contains forward-looking statements that reflect Management's current view with respect to future events. All statements contained in this release that are not clearly historical in nature or necessarily depend on future events are forward-looking. The words "anticipate", "believe", "expect", "estimate", "planned" and similar expressions are generally intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections of the Management on currently available information. Many factors could cause the actual results, performance or achievements to be materially different from those that may be expressed or implied by such statements. We do not assume any obligation to update the forward-looking statements contained in this release.
IFCO SYSTEMS Sabine Preiss Investor Relations Tel +49 89 744 91 316 Fax +49 89 744 767 316 email: ir@ifcosystems.com www.ifcosystems.com or www.ifcosystems.de
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IFCO Systems N.V. Zugspitzstraße 7 Pullach
WKN: 157670; ISIN: NL0000268456 ; Index: CLASSIC All Share, Prime All Share; Listed: Amtlicher Markt in Frankfurter Wertpapierbörse, Freiverkehr in Bayerische Börse München, Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Börse Düsseldorf, Prime Standard in Frankfurter Wertpapierbörse;
