Walstead Group, the leading pan-European commercial printing group, has announced its preliminary unaudited consolidated trading results for the 12-month period ending 31 December 2017. Walstead Group reports in euro.
These results represent the group’s first full year of trading following the acquisitions in June 2016 of Polestar’s Bicester printing facility in the UK (renamed Wyndeham Bicester) and Leykam Let’s Print in Austria. The comparative 2016 financial results shown below reflect six months’ trading contribution from these two acquisitions and a 12-month contribution from the group’s UK and Spain divisions.
Revenue increased by 85.0% to €481.1 million (2016: €260.0 million). Net revenue (gross revenue less paper costs) increased by 75.3% to €301.2 million (2016: €171.8 million).
EBITDA (earnings before interest, tax, depreciation, amortisation and exceptional charges) increased by 44.1% to €52.6 million (2016: €36.5 million). The 2017 result included certain non-recurring gains: on a normalised basis EBITDA was €49.4 million, an 35.3% increase on the prior year.
Profit before tax was €9.7 million (2016: €8.6 million) and profit after tax was €8.6 million (2016: €7.5 million).
Net debt at 31 December 2017 reduced by 13.6% to €132.7 million (31.12.16: €153.6 million) and comprised €66.4 million of bank debt less cash balances (31 December 2016: €58.8 million) and €66.3 million of shareholder loans (31 December 2016: €94.8 million).
During the year the group repaid €32.5 million of bank and shareholder loans. At the end of the financial year the group’s leverage ratio (bank debt/EBITDA) improved to 1.26x (2016: 1.61x) or 1.34x on a normalised basis and unused banking facilities provided headroom of €39.0 million.
In terms of manufacturing throughput, the number of A4 pages printed on the group’s 43 web offset and four gravure presses increased by 4.4% to 343.4 billion pages. (2016: 329.0 billion pages on a like-for-like 12-month basis).
The group operates three territory-based divisions: Walstead UK (trading as Wyndeham), Walstead Iberia (trading as Eurohueco and Rotocobrhi), and Walstead CE (trading as Leykam Let’s Print). At the end of the year the group employed 2,230 staff at its 12 sites in the UK, Spain, Austria, Czech Republic, and Slovenia (31 December 2016: 2,412).
Walstead UK’s gross revenue increased by 8.4% to GBP£125.7 million (2016: GBP£116.0 million). Net revenue increased by 7.7% to GBP£99.6 million (2016: GBP£92.5 million). Manufactured volume increased by 14.8% to 92.2 billion pages (2016: 80.3 billion pages). The division maintained its strong market position in the magazine and catalogue markets and was also able to increase its share of the retail advertising flyer market which the group sees as a key growth opportunity across all of Europe.
Walstead Iberia’s gross revenue decreased by 7.1% to €109.0 million (2016: €117.3 million). Net revenue was relatively static at €78.5 million (2016: €78.6 million). Manufactured volume decreased by 1.2% to 104.6 billion pages (2016: 105.9 billion pages). The principal reason for the decrease in gross revenue was attributable to new capacity and consequential price reductions offered by a Spanish competitor which re-emerged from bankruptcy after nearly a year of operational dormancy. Walstead’s policy is to release volume rather than retain work at sub-economic prices.
On a like-for-like basis, Walstead CE’s gross revenue decreased by 1.8% to €228.5 million (2016: €232.7 million). Net revenue decreased by 3.8% to €108.9 million (2016: €113.2 million). Manufactured volume increased by 2.7% to 146.6 billion pages. (2016: 142.7 billion pages).
The group’s capital expenditure in the year was €12.6 million and included €1.9 million on a Ferag drum stitching line in Neüdorfl, Austria, and €2.0 million (out of a total project expenditure of €10.5 million) on a Goss Sunday 96pp web offset printing press which is being installed at Rotocobrhi in Madrid. This press is due to be commissioned during the second half of 2018 and will further strengthen Walstead Iberia’s market-leading position in retail advertising flyer and magazine printing.
Trading in the first two months (2M) of 2018 has been in line with expectations. Unaudited gross revenue to 28 February 2018 was 0.8% ahead of the same period last year at €73.1 million (2M.2017: €72.5 million) and net revenue was slightly behind last year at €46.1 million (2M.2017: €47.0 million).
Mark Scanlon, chairman of Walstead, commented: “I am delighted to present these record results for 2017. They clearly demonstrate that Walstead’s strategy - which is predicated on growing by acquisition, maintaining sensible levels of capex, generating strong cash flows, reducing debt, continually improving production efficiencies, and maximising procurement scale - is the right one. I believe we have the best corporate environment, management talent, and financial firepower to continue consolidating the European commercial web offset and gravure print industry. I hope to report later this year on more exciting developments in this area."