gategroup continues to deliver stronger revenue and cash in a difficult
*Year-to-date revenues up 11.0% to CHF 2,244.5 million
*EBITDA declined 9% leading to an EBITDA margin of 6.3%, down from 7.7% in
the previous period
*Cash flow generated from operations almost doubled to CHF 71.9 million
from CHF 44.4 million
*Restructuring is underway to address European weakness
ZURICH, Nov. 15, 2012 - gategroup delivered strong revenue and cash from
operations in the first nine months of fiscal year 2012. Revenue was up 11.0%
to CHF 2,244.5 million and cash flow from operations almost doubled in
comparison to the previous year reaching CHF 71.9 million. The EBITDA for the
reporting period was CHF 141.7 million, representing a decline of 9% from the
previous year reported EBITDA of CHF 156.2 million. The EBITDA margin for the
reporting period was 6.3% compared to 7.7% in the previous year. Profit for
the period was CHF 16.9 million compared to CHF 43.1 million in the prior
year. gategroup is responding to the challenging market environment in Europe
with a number of initiatives which are expected to have an increasing positive
impact through 2013.
In the first nine months of 2012, gategroup generated total reported revenues
of CHF 2,244.5 million (CHF 2,021.5 million in the previous year). The
increase of 11.0% was primarily driven by organic growth, new business and
acquisitions. Currency effects increased revenues by CHF 69.3 million or 3.2%.
gategroup achieved an EBITDA of CHF 141.7 million in the first nine months of
2012 compared to CHF 156.2 million in the same period of the previous year, a
decline of 9%. The EBITDA margin was 6.3%, down from 7.7% in 2011. The global
business portfolio delivered positive margin development, but the consolidated
EBITDA was impacted by continuing weakness in the European Airlines Solutions
business. This trend follows weaker results reported at the half year.
Streamlining initiatives within the European business to address these issues,
announced by gategroup in its second quarter financial report, are continuing.
These initiatives include direct labour savings, indirect labour rightsizing,
back office streamlining and portfolio optimization measures. A provision of
around CHF 10 million was made in launching these programs in Q3 and they are
expected to have an increasing positive impact through 2013. It is also noted
that start-up costs for new businesses, notably in Australia and the U.K.,
also impacted EBITDA for the period, gategroup expects these new businesses
will generate improvements to results going forward.
The net profit for the reporting period was CHF 16.9 million, down from CHF
43.1 million in the same period in the previous year. In addition to the
reduction in EBITDA, higher restructuring charges and financing costs incurred
in year to date 2012 have been the primary drivers of the lower net profit.
Cash flow generated from operations for the first nine months of 2012,
meanwhile, was CHF 71.9 million, up from CHF 44.4 million in the equivalent
period of the previous year, mainly due to improvements in the management of
gategroup's balance sheet as of September 30, 2012, shows equity of CHF 480.9
million (CHF 469.9 million as of September 30, 2011). Net debt as per
September 30, 2012, was at CHF 224.8 million (an increase of CHF 65.6 million
from September 30, 2011).
In October, gategroup announced contract extensions of five and three years
respectively with American Airlines and United Airlines, two of the Company's
largest customers. Both agreements include retention of catering and
provisioning services by Gate Gourmet at key hub locations for the two
carriers, amongst other businesses.
gategroup's bolt-on acquisition strategy is proceeding well. Following the
period end the Airline Solutions business completed the acquisition of the
in-flight catering unit of Alpha Flight Services in Amsterdam, which augments
the Company's presence in that important European hub. The integration of
acquisitions announced earlier in the year, namely Helios Market, Product and
Production Development BV by deSter Holding BV and the purchase of two flight
kitchens in Australia from Qantas Catering Group, are proceeding as planned.
gategroup's business is seasonal, reflecting long-established consumer travel
patterns and the performance of airlines, which are the Company's primary
customer base. This seasonality affects the comparability of gategroup results
between quarterly periods. Typically the low seasonal volumes experienced in
the 4th quarter degrade the full year EBITDA margin by approximately 0.5
percentage points. The streamlining of the European Airline Solutions business
is expected to have an increasing positive impact through 2013, however,
weakness in Europe is expected to continue and further restructuring is to be
expected. In addition gategroup will benefit from the acquisitions, new
business gains and investments that it has recently made.
for additional information on our January - September results.
Overview of key figures for the first nine months of 2012 (January -
Period ended Period ended Change
millions of CHF September 30, September 30, Change at const.
2012 2011 Fx
Revenue 2,244.5 2,021.5 11.0% 7.6%
EBITDA 141.7 156.2 (9.3%) (14.9%)
EBITDA margin 6.3% 7.7% (1.4pp) (1.6pp)
Operating profit 66.7 93.3 (28.5%) (36.7%)
Operating profit 3.0% 4.6% (1.6pp) (1.9pp)
Profit for the 16.9 43.1 (60.8%)
generated from 71.9 44.4 27.5
Net debt 224.8 159.2 65.6
(incl. available 362.2 512.1 (149.9)
OVERVIEW of 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
This publication contains forward-looking statements and other statements that
are not historical facts. The words "believe", "anticipate", "plan", "expect",
"project", "estimate", "predict", "intend", "target", "assume", "may", "will"
"could" and similar expression are intended to identify such forward-looking
statements. Such statements are made on the basis of assumptions and
expectations that we believe to be reasonable as of the date of this
publication but may prove to be erroneous and are subject to a variety of
significant uncertainties that could cause actual results to differ materially
from those expressed in forward-looking statements. Among these factors are
changes in overall economic conditions, changes in demand for our products,
changes in the demand for, or price of, oil, risk of terrorism, war,
geopolitical or other exogenous shocks to the airline sector, risks of
increased competition, manufacturing and product development risks, loss of
key customers, changes in government regulations, foreign and domestic
political and legislative risks, risks associated with foreign operations and
foreign currency exchange rates and controls, strikes, embargoes,
weatherrelated risks and other risks and uncertainties. We therefore caution
investors and prospective investors against relying on any of these
forward-looking statements. We assume no obligation to update forward-looking
statements or to update the reasons for which actual results could differ
materially from those anticipated in such forward-looking statements, except
as required by law.
INVITATION TO ANALYSTS AND INVESTORS
gategroup CFO Thomas Bucher invites analysts and investors to participate in a
telephone conference call regarding the 2012 third quarter results.
The presentation can be accessed via webcast and dial-in teleconference at
14:30 CET on Thursday, November 15, 2012.
To listen to the live presentation via teleconference, call the dial-in number
approximately 15 minutes before the start time. Once dialled in, please follow
the instructions given over the phone.
Direct dial-in numbers:
+41 (0)91 610 56 00 (Europe)
+44 (0) 203 059 58 62 (UK)
+1 866 291 41 66 (USA - Toll-Free)
To link to the live webcast of the presentation, please follow the link on our
For media For investors/analysts
Jean-Luc Ferrazzini Dagmara Robinson
+41 43 812 9128 +41 43 812 5496
Press release (PDF)
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