27 Jan 2020

Oce group reports decreased revenue thru Q2

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In the first half of 2010 total revenues amounted to € 1,289.9 million (31 May 2009: € 1,333.7 million), a decrease of 3.3% compared to the first half of 2009. Excluding exchange rates effects, the decrease was 3.5%. The sale of printing systems (non?recurring revenues) decreased organically by 2.2%. Revenues from service, inks, toners, media, rental, interest and business services (recurring revenues) decreased organically by 4.0%. The share of color continues to grow and now accounts for 33% (31 May 2009: 30%)


Gross margin The relative gross margin was 36.9% (31 May 2009: 37.2%). The normalized gross margin was 38.2% (31 May 2009: 37.3%). The increase was the result of several factors. Compared to the first half year of 2009 the changes in currency exchange rates caused a positive hedge variance of € 3.1 million, leading to a gross margin increase of 0.3% point. The gross margin increase for DDS and WFPS in total amounted to 0.6% points. The increase was mainly due to the better utilization of the supply centers in Venlo and Poing and the savings program. The gross margin includes a total of € 16 million integration costs following Océ's decision to impair tooling and inventories due to changes in the product portfolio from certain OEM suppliers to Canon.


Operating expenses Operating expenses as a percentage of total revenues amounted to 38.1% (31 May 2009: 35.9%). Normalized operating expenses amounted to 36.0% (31 May 2009: 36.0%), due to the savings program. In constant currencies operating expenses declined by € 16 million. Net R&D capitalization amounted to € 20.1 million which is € 5.1 million lower compared to the first half year of 2009 (€ 25.2 million). The integration cost recorded under operating expenses amounted in total to € 27 million due to the fact that Océ impaired intangible assets related to supply contracts with certain OEM suppliers as well as to the expected harmonization of Océ IT systems with Canon. Additionally, Océ incurred advisory fees related to the Canon transaction. Operating income The operating income amounted to ? € 15.9 million (31 May 2009: € 17.1 million).


Operating income as percentage of total revenues amounted to ? 1.2% (31 May 2009: 1.3%). Normalized operating income as percentage of total revenues amounted to 2.1% (31 May 2009: 1.4%).


Finance expenses Finance expenses (net) amounted to € 58.2 million (31 May 2009: € 19.3 million). Océ, through Canon, has refinanced both the multicurrency revolving credit facilities and the United States Private Placements. The total finance expenses related to the repayment of borrowings and the unwind of interest rate swaps amount to € 40 million. The refinancing by Canon does not include financial covenants or commitment fees and is at more favorable interest margins than the aforementioned facilities. The positive effect from the refinancing is not included in the above mentioned integration cost and will be visible in finance expenses from the third quarter onwards.


Taxation In the first half of 2010 taxation amounted to ? € 26.9 million (31 May 2009: € 1.2 million). The income tax effect of in total € 20 million results from the abovementioned items, from changes in the valuation of tax assets and liabilities and from reassessments of tax risks. With respect to the valuation of tax assets, as a consequence of the change of control, tax assets in Germany and the United States were (partially) forfeited due to local tax laws.


Net income (loss) Net loss for the six months ended 31 May 2010 amounted to ? € 100.8 million (31 May 2009: € 1.0 million net income). Net loss per ordinary share attributable to holders of these shares amounted to ? € 1.21 (31 May 2009: ? € 0.01). For the first half year the total effect of integration cost on reported net income amounted to ? € 103 million.


Balance sheet


Intangible assets Due to the integration with Canon, Océ has impaired supply contracts with certain OEM suppliers, internally developed software and purchased software for a total amount of € 22.5 million.


Inventory and property, plant an equipment The gross margin includes a total of € 16 million integration cost following Océ's decision to impair tooling and inventories due to changes in the product portfolio from certain OEM suppliers to Canon.


Borrowings As a result from the integration with Canon, the US Private Placements have been redeemed and the drawings under the multicurrency revolving credit facility have been discontinued. Both have been replaced with loans of Canon. The early redemption of the US Private Placements caused a loss of € 20 million.


Derivative financial instruments Due to discontinuation of the drawings under the multicurrency revolving credit facility (see borrowings), Océ has unwound its interest rate swaps which were intended to hedge (cash flow hedge) the drawings under the multicurrency revolving credit facility. As the forecasted transactions of the hedge are no longer expected to occur, Océ has reclassified the loss accumulated in the hedge reserve of € 20 million to the income statement.


Cash flow

The cash flow before financing activities (free cash flow) amounted to ? € 124 million (31 May 2009: ? € 48 million), a decrease of € 76 million compared to the first half of 2009. The cash flow from operating activities amounted to ? € 78 million, a decrease of € 83 million compared to the first half of 2009 (€ 5 million). This decrease was largely due to integration cost and to lower cash flows from both inventories and accounts receivable. This was partly compensated by a higher cash flow from creditors. The cash flow from investing activities amounted to ? € 46 million (31 May 2009: ? € 53 million). The cash flow from financing activities amounted to € 112 million (31 May 2009: € 177 million). The decrease was largely due to the refinancing of both the multicurrency revolving credit facilities and the United States Private Placements by loans of Canon. The cash dividend distributed to holders of ordinary shares was nil (31 May 2009: nil). The cash dividend paid to holders of financing preference shares relating to the financial year 2009 was nil (31 May 2009: € 2.0 million).


SBUs results first half year 2010


Digital Document Systems (DDS)

Revenues in DDS decreased by 3.9% to € 718.3 million (31 May 2009: € 747.6 million). On an organic basis revenues decreased by 3.9%. The share of color in revenues increased to 28% (31 May 2009: 25%) driven by Océ's production color continuous feed systems. Non?recurring revenues amounted to € 227.4 million (31 May 2009: € 233.5 million), an organic decrease of 2.8%. Recurring revenues amounted to € 490.9 million (31 May 2009: € 514.1 million), an organic decrease of 4.3%. The market deterioration resulted in lower print volumes and subsequently lower revenues in Office and black & white continuous feed. DDS grew its revenues in production cutsheet and continuous feed color.


Wide Format Printing Systems (WFPS)

Revenues in WFPS amounted to € 343.4 million (31 May 2009: € 353.8 million), an organic decrease of 4.4%. The share of color in revenues increased to 47%. (31 May 2009: 45%). For example as result of the newly?introduced Océ ColorWave 300 and Océ CS2400 color systems for the Technical Documentation market. To further strengthen its color portfolio for the wide format Graphics Arts market, Océ launched in June the high?speed Océ Arizona 550 XT flatbed printer which has double the speed of the Océ Arizona 350 XT systems.


Non?recurring revenues amounted to € 122.0 million (31 May 2009: € 120.7 million). Organically, nonrecurring revenues decreased by 1.0%. Recurring revenues amounted to € 221.4 million (31 May 2009: € 233.1 million), an organic decrease of 6.2%.


Océ Business Services (OBS)

Revenues in OBS amounted to € 228.2 million (31 May 2009: € 232.3 million), an organic decrease of 1.1%. Revenue growth in Europe continued. The United States is facing a decline in the traditional Mail business, which could only partly be compensated through growth in new services.


Integration with Canon


Share deal

Canon and Océ announced on 16 November 2009 that they had reached conditional agreement to combine their printing activities through a fully self?funded, public cash offer.


On 28 January 2010, Canon and Océ jointly announced that Canon will make a fully self?funded public cash offer for all the issued and outstanding ordinary shares of Océ at an offer price of € 8.60 per share. Canon obtained control over Océ on 9 March 2010, owning 77,41% of the share capital.


Canon and Océ

Canon and Océ will work towards creating the best combination in the printing industry. The priorities for 2010 remain unchanged and encompass growth through cross selling opportunities, the co?operation in technology and product development and the preparation of the next step in the integration. In the second half of 2010 we expect the first commercial results via cross?selling of Canon products in Océ channels and vice versa.


Océ and Canon are currently assessing the adequacy of all change of control related items and are in the process of evaluating valuation principles. As a consequence, additional entries or changes in Océ's assets and liabilities may be processed.


Risk profile

The assessment concerns the identification of the principal risks, which were subdivided into five groups. The following three groups of risks related to the three strategic pillars:

1. Lack of sufficient distribution power.

2. No full line competitive products and services portfolio.

3. Failure to implement the Operational Excellence program successfully.


The two additional groups of principal risks were:

4. A (temporary) significant decline in the demand for products and/or services.

5. Risks relating to the cash flow or the availability of liquid funds or financing.


Risks in second half year of 2010

In our view, the nature and potential impact of the risks as mentioned in the 2009 Annual Report will not be materially different for the second half of 2010 for groups 1, 3 and 4.


In addition the following should be noted:

- For strategic pillar 2: The risk has decreased due to introduction of own new products as well as access to full Canon assortment.

- Regarding financial risks: Canon, being our parent company since March 2010, refinanced the external loans. As a Canon subsidiary, Océ is no longer restricted by external covenants as described on pages 98 and 99 in the 2009 Annual Report.

Avery Dennison announces strong Q2 results; double digit sales growth

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Avery Dennison Corporation today announced preliminary, unaudited second quarter 2010 results.


"Avery Dennison delivered a strong second quarter, with double-digit sales growth and solid margin expansion," said Dean A. Scarborough, Avery Dennison chairman, president and CEO. "I'm especially pleased with the improved performance of Retail Information Services, which expanded operating margin above pre-recession levels. Our core pressure-sensitive materials businesses had solid results, including double-digit sales growth in all regions, and our investments in marketing have enabled us to convert more brand owners to pressure-sensitive solutions from other labeling technologies.


"The second half of the year will be more challenging than the second quarter, which is traditionally our strongest," Scarborough said. "While we expect solid second-half revenue growth, margins will come under pressure from rising raw material costs and Office Products' investments in innovation and demand creation. At the same time, we are on track to exceed our original target for strong free cash flow.


"We are confident about our future," Scarborough said. "We have leadership positions in rapidly growing emerging markets, which continue to lead the global economic recovery. As the world's leading producer of RFID inlays, we're excited by the accelerating growth in demand for item-level retail tagging solutions and other applications. Our investments in developing branding and information solutions are starting to pay off in innovative products and solutions, better service and stronger customer relationships. We are well positioned for long-term profitable growth."


Second Quarter 2010 Results by Segment

All references to sales reflect comparisons on an organic basis, which excludes the impact of foreign currency translation. All references to operating margin exclude the impact of restructuring, asset impairment charges, and other items.


Pressure-sensitive Materials (PSM)

- Roll Materials sales grew mid-teens percent, reflecting strength in all regions. Sales grew low-teens percent in the Graphics and Reflective Products division.

- Operating margin increased due to higher volume and the benefits from productivity actions, partially offset by raw material inflation.


Retail Information Services (RIS)

- Sales growth in what is this segment's seasonally largest quarter reflected increased demand, due in part to significant inventory destocking that occurred among apparel retailers in the first half of 2009, as well as new programs with key brands and retailers.

- Operating margin expanded above pre-recession levels due to increased volume and the benefit of restructuring and other productivity initiatives.


Office and Consumer Products (OCP)

- The decline in sales reflected weak end-market demand.

- Operating margin declined due to increased investment in consumer promotions and marketing, as well as lower volume.


Other specialty converting businesses

- Sales growth primarily reflected increased demand for products for automotive applications, which was down sharply in the second quarter of 2009.

- The improvement in operating margin reflected increased volume and the benefit of restructuring and productivity actions, partially offset by raw material inflation.


Consolidated Items and Actions

- In the fourth quarter of 2008, the Company began a restructuring program to reduce costs across all segments of the business. In the second quarter of 2010, the Company delivered approximately $20 million in incremental savings from these actions, net of transition costs, and achieved its goal of $180 million in annualized savings.

- The effective (GAAP) tax rate was 33 percent in the second quarter. The adjusted year-to-date tax rate in the second quarter was 23 percent.


2010 Outlook

The Company has adjusted its previous guidance. In the Company's supplemental presentation materials, "Second Quarter 2010 Financial Review and Analysis," the Company provides a list of factors that it believes will contribute to its 2010 financial results. Based on the factors listed and other assumptions, the Company now expects reported revenue growth of 7 to 8 percent, adjusted (non-GAAP) Earnings Per Share of $2.60 to $2.80, and Free Cash Flow in 2010 of approximately $350 million.

Service Graphics embarks on £4 million investment programme with announcement of new production supersite

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Following its order at IPEX for the UK’s first superwide Durst Rho 500R roll-to-roll UV printer, Service Graphics is unveiling plans to invest approximately £4 million over the next 18 months.  The investment by the St. Ives Group’s large-format division will see the company delivering new capabilities, greater efficiencies and an enhanced customer experience.

The new graphics and display production supersite, to be located near Chessington in Surrey, will comprise a 46,000 sq ft purpose-built factory, housing an array of new equipment and systems. These will include a software management system, tailored to the Service Graphics business to integrate core activities such as production scheduling, project management, sales, financial and supply chain management and CRM.

Primarily servicing the South of England and London, the supersite development will introduce new production capabilities while at the same time providing additional capacity to support the company’s other sites in Glasgow, Skelmersdale, Nottingham, Kent and Salisbury. Within the same timescale, Salisbury will move their sales office to a new facility that completes the modernisation plans in the southern region.

Service Graphics claims the investment programme will further lengthen its lead on its competition by boosting an arsenal of high-quality, high-output equipment that is already unmatched in the UK. According to Nick Cole, managing director of Service Graphics, it is a continuation of the company’s aggressive growth plans aimed at doubling overall production capacity.“

Investment in new capabilities is vital to ensuring both continued growth in our share of the large-format market and to growing the market itself,” comments Cole. “We are continually improving the quality of image production on a wider range of formats. By employing the latest technologies we can open up new opportunities for our customers and help define the market in the UK, especially in the lead up to London 2012 and beyond. The latest wide format fabric printing capabilities will prove to be a very significant advancement.”

Service Graphics’ most recent purchase was the UK’s first Durst Rho 500R, which delivers 600 dpi, six-colour print quality at output speeds up to 400m² per hour. Environmentally certified, it is designed for printing a wide variety of large format display items such as vinyl banners, textiles and mesh in widths up to 5 metres.

“Like most major UK businesses, we’re very proud to have the Games coming to our capital in 2012 and we intend to make it about more than just sporting excellence,” concludes Cole. “The world will be watching so we want to see the UK’s print output matching that excellence in every respect. Service Graphics will definitely be leading the field.”

Acquisition of Print Trader by LFR will bring online auctions to the wide-format industry


Print Trader

As a leading online resource for news within the wide-format printing industry, Large Format Review (LFR) is delighted to announce it has acquired Print Trader, the Internet based facility for buying and selling equipment. The integration of these two complementary areas will make it quicker and easier for vendors and purchasers to locate machinery, supplies and peripherals from a central location.

As part of the redevelopment of Print Trader, the ethos will be changed from being a location for classified advertisements offering machines for sale. Instead it will become an active online auction site with interactive bids and buy-it-now options making it straightforward for users to participate, sell and purchase items of all types and values.

With the recession now officially being in the past, growing numbers of companies are now looking to upgrade and trade-in their existing equipment. This can now be achieved independently without reliance on manufacturers and original suppliers.

Similarly, many printing machines have now been outgrown by their original purchasers, have plenty of years of service still remaining in them but are not suitable or eligible for part-exchange. Complementing this, there are businesses who want to augment existing technologies and who will welcome the opportunity of being able to purchase second-user systems independent of the original manufacturer.

Undergoing redevelopment now, the new look LFR Print Trader will be re-launched in the Autumn, and will be instantly accessible from within the news pages of LFR.

With its efficient and speedy reporting on news and trends within the wide-format industry, LFR has grown to become a reliable and respected source for all information relating to technologies and associated manufacturers, suppliers and end users. The addition of a comprehensive auction facility, LFR Print Trader, is expected to raise the numbers of visitors to the host site and add value to those who support it and rely on it as a regular resource.



Xerox reports Q2 earnings; increases full-year guidance

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Xerox Corporation announced today second-quarter 2010 results that include adjusted earnings per share of 24 cents and $678 million in operating cash flow. Adjusted EPS excludes 8 cents from restructuring charges and amortization of intangibles as well as acquisition-related and litigation costs, resulting in GAAP EPS of 16 cents.

"Our second-quarter results reflect strong across-the-board performance in driving revenue growth, generating cash and expanding earnings," said Ursula Burns, Xerox chairman and chief executive officer. "Through the first half of the year, we've made excellent progress in scaling our services business and strengthening our leadership in the marketplace. We expect this progress will continue, positioning us well to increase our earnings expectations for the full year."

Second-quarter revenue of $5.5 billion was up 48 percent including a 1 point negative impact from currency. On a pro-forma basis, with ACS in the company's 2009 results, total revenue grew 2 percent or 3 percent in constant currency. Revenue from technology, which represents the sale of document systems as well as the supplies, technical service and financing of products, was up 3 percent or 4 percent in constant currency. Total install activity for Xerox equipment was up 45 percent, reflecting strong demand across all segments including a 56 percent increase in entry-level printers and multifunction devices. Revenue from services was up 1 percent on a pro-forma basis, and represents the company's business process, IT and document outsourcing offerings.

"We're seeing consistent trends that indicate the benefit of our broad product line and expanded services as well as modest economic improvements," added Burns. "Demand continues to improve for Xerox technology, especially in developing markets and from small and mid-sized businesses. With annuity revenue representing 83 percent of total revenue and signings for Xerox services up 12 percent, our business is strengthened by multi-year contracts for business process and document management."

In February, Xerox closed on its acquisition of business process and IT outsourcing firm, Affiliated Computer Services (ACS). The resulting joint sales activities between Xerox and ACS as well as increased interest in the company's diverse portfolio of outsourcing offerings led to a significant second-quarter increase in the pipeline for services contracts.

Second-quarter gross margin was 34.8 percent, and selling, administrative and general expenses were 21.1 percent of revenue. On a pro-forma basis, operating margin of 10.1 percent was up nearly one point, driven by improvements in both gross margin and SAG as a percent of revenue.

The $678 million in second-quarter operating cash flow contributed to $1.1 billion in cash flow for the first half of the year. The company reiterated its expectations to deliver $2.6 billion in operating cash for the full year.

For the third quarter, Xerox expects GAAP earnings in the range of 14 to 16 cents per share. Third-quarter adjusted EPS is expected to be 19 to 21 cents per share. Full-year GAAP earnings are expected to be 47 to 51 cents per share. Full-year adjusted EPS is expected to be 88 to 92 cents, an increase from the company's previous guidance of 75 to 85 cents per share.


EFI reports increased revenue in Q2 2010


Electronics For Imaging, Inc., a world leader in customer-focused digital printing innovation, today announced its results for the second quarter of 2010. For the quarter ended June 30, 2010, the Company reported revenues of $119.1 million, compared to second quarter 2009 revenue of $90.1 million.

GAAP net loss was $(2.5) million or $(0.06) per diluted share in the second quarter of 2010, compared to GAAP net loss of $(13.3) million or $(0.27) per diluted share for the same period in 2009.

GAAP net loss was $(13.9) million or $(0.31) per diluted share for the six months ended June 30, 2010, compared to GAAP net income of $13.4 million or $0.26 per diluted share for the same period in 2009.

Non-GAAP net income was $4.0 million or $0.09 per diluted share in the second quarter of 2010, compared to non-GAAP net loss of $(6.1) million or $(0.12) per diluted share for the same period in 2009.

Non-GAAP net income was $3.9 million or $0.08 per diluted share for the six months ended June 30, 2010, compared to non-GAAP net loss of $(10.5) million or $(0.21) per diluted share for the same period in 2009.

"EFI posted a solid performance in Q2, with sequential revenue growth in all three of our businesses and greater than 30% year-over-year revenue growth in our Fiery and Inkjet segments, allowing us to exceed both our revenue and earnings outlook," said Guy Gecht, CEO of EFI. "We are also pleased with the progress we made on operating profit and cash flow and we look for these positive trends to continue in the current quarter."