Positive momentum of Group portfolio degraded by weak European market performance Zurich, March 14, 2013 - gategroup reports 11.3% stronger total revenue of CHF 2,993 million compared to CHF 2,688 million in 2011, and weaker EBITDA of CHF 170.8 million compared to CHF 205.1 million in the previous year, resulting in an EBITDA margin of 5.7% (7.6% in 2011). EBITDA performance was impacted by a weak European market. Due to the ongoing flat outlook for European airlines, gategroup has undertaken additional restructuring and adjusted the carrying value of certain assets to reflect current market trends. Accordingly, combined restructuring and impairment charges were CHF 73.9 million and result in a loss for the year of CHF 56.9 million. Excluding restructuring and impairment charges the underlying core profit for 2012 was CHF 17.0 million. In view of the reported loss for the period the Board will not propose a dividend for the financial year 2012 to the Annual General Meeting of Shareholders. Total revenue increased by 11.3% and reached CHF 2,993 million compared to CHF 2,688 million in 2011. Growth was driven primarily by higher revenues with existing customers, contribution from acquisitions, and favorable currency movements. EBITDA was CHF 170.8 million compared to EBITDA of CHF 205.1 million in 2011, resulting in an EBITDA margin of 5.7% (7.6% in 2011). In 2012 gategroup incurred non-cash impairment charges of CHF 51.7 million, the majority of which is related to assets in the Airline Solutions business within Europe. Further, restructuring charges of CHF 22.2 million resulted in total charges of CHF 73.9 million for 2012 compared to net charges in 2011 of CHF 4.3 million. This resulted in a Net Loss for 2012 of CHF 56.9 million. Excluding these charges Net Income for 2012 was approximately CHF 17.0 million CHF 58.7 million in 2011). Cash flow from operations meanwhile was down from CHF 109.8 million in 2011 to CHF 63.5 million in 2012. This was primarily driven by the lower EBITDA of CHF 170.8 million in 2012.The substantial growth in revenue, from higher volumes in the existing portfolio and the three acquisitions made in 2012 resulted in a corresponding working capital increase. Net Equity attributable to shareholders of the Company of CHF 246.6 million also includes the cumulative impact of the early adoption of IAS19 Employee Benefits (2011). Segments The Airline Solutions segment reported total revenue of CHF 2,590 million compared to CHF 2,350 million in the previous year, an increase of CHF 240.3 million or 10.2%. At constant exchange rates the Airline Solutions segment achieved a turnover of CHF 2,513 million, or +6.9%. Segment EBITDA reached CHF 155.4 million (192.8 million in 2011) or 6.0% of segment revenue (8.2% in 2011). The Product and Supply Chain Solutions segment increased total revenue by CHF 105 million or 22.1% from CHF 476 million in 2011 to CHF 581 million. At constant exchange rates the Product and Supply Chain Solutions segment achieved a turnover of CHF 569.1 million, or +19.6%. It reported an increase in EBITDA from CHF 34.3 million (7.2% of revenues) in 2011 to CHF 40.6 million (7.0% of revenues) in 2012. Restructuring the Airline Solutions business in Europe In 2012 gategroup launched a restructuring program in Europe to address the region's underperformance, which was and remains a direct reflection of the recessionary environment. In response to market weakness, traditional full-service carriers implemented substantial restructuring programs, network optimization and service level changes, particularly on short-haul routes. On the other hand, European low cost carriers, which are becoming an increasingly important revenue source for the Group, continued to grow and prosper. Within the Airline Solution division, Europe & Africa has and will continue to adjust its business model to the new environment and is driving costs down through numerous initiatives. Progress has been made in the year under review and significant efforts will continue into 2013. Outlook 2013 The trading conditions in Europe are expected to remain challenging in 2013. The rest of gategroup's business portfolio outside of Europe, representing approximately 60% of the Group, is on track and performing well. North America continues to demonstrate steady expansion in revenues and margins, supported by a stable market outlook. Across the Emerging Markets, the strong revenue growth achieved in 2012 will result in a higher contribution to profit in 2013. The Product and Supply Chain Solutions business is expected to continue its strong top-line and stable margin development. The restructuring initiated in the European Airline Solutions business will address the market deterioration experienced across its European customer base in 2012. The Group is prepared to address any further customer curtailments that may occur during the course of 2013. In aggregate the strengthening of the Group portfolio outside its European Airline Solutions business will be offset by the outlook in Europe. gategroup expects nominal growth in revenues in 2013 and projects an EBITDA margin in the range of 5.5% to 6.0%. Midterm Outlook 2016 The Group provides an updated midterm four year outlook for 2016. The majority of gategroup's portfolio remains on track; however, downward adjustments have been made due to the significant deterioration in its European Airline Solutions business during 2012 coupled with a flat outlook for Europe through 2014. The Group expects to expand the existing portfolio from organic growth and new business development of the order 10-15% and achieve revenues of approximately CHF 3.4 billion in 2016 on the basis of 2012 exchange rates. Additionally it is expected to achieve an EBITDA margin in the range of 7% to 8%, and a cash flow generated from operations in the range of 4% to 6% of revenue with ROIC greater than 12%. Due to the focus on restructuring of its Airline Solutions business, the midterm plan incorporates an expectation of less bolt-on acquisitions. Additional information, particularly with respect to the Outlook 2013 and the Midterm Outlook 2016, is provided in the Investors and Analysts presentation. This is available on the gategroup website, together with the annual report and further Company information, at the following link: http://www.gategroup.com/index.php?option=com_content&view=article&layout=edit&id=576 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, Pourshins and Supplair. Shares of Zurich-based gategroup are traded on the SIX Swiss Exchange under the symbol GATE. Please visit www.gategroup.com. ### INVITATION to analysts, investors and the media to participate in a telephone conference call. The presentation can be accessed via webcast and dial-in teleconference at 14:00 CET on Thursday, March 14, 2013. To listen to the live presentation via teleconference, call the dial-in number provided below: 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 website http://www.gategroup.com/index.php?option=com_content&view=article&layout=edit&id=576 ### Contacts: Media Investors Jean-Luc Ferrazzini Dagmara Robinson Head of Corporate Communications Director Investor Relations firstname.lastname@example.org email@example.com +41 43 812 9128 +41 43 812 54 96 FORWARD-LOOKING STATEMENTS 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, weather-related 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. Media Release (PDF) Provider Channel Contact Tensid Ltd., Switzerland newsbox.ch Provider/Channel related enquiries www.tensid.ch www.newsbox.ch firstname.lastname@example.org +41 41 763 00 50
Positive momentum of Group portfolio degraded by weak European m
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