Revenue up 5.6 percent
Successful year for the Pfleiderer Group: Consolidated sales of the engineered wood specialist rose by 5.6 percent to 1,062.5 million euros in 2018. Sales growth resulted from higher prices and larger sales volumes. For example, Pfleiderer succeeded in raising prices for its end products in 2018 in view of the sharp rise in raw material prices without slowing volume growth.
Business with value-added products such as laminated and coated particleboard (MFC) and high-pressure laminates (HPL) increased by 3.3 percent year-on-year and contributed 63 percent to total revenue in 2018. Thanks to strong demand last year, sales growth for basic products such as raw particleboard and MDF/HDF raw boards reached 6.8 percent year-on-year.
The Group's efforts to increase productivity and implement strict cost control led to EBITDA growth of an impressive 11.5 percent (133.8 million euros). Adjusted EBITDA, which was adjusted for non-recurring effects (including costs for sales and growth consulting), even increased by 12 percent year-on-year to EUR 141.9 million. This corresponds to an increase in the adjusted EBITDA margin of 0.8 percentage points to 13.4 percent.
Pfleiderer continues to focus on optimizing operating processes and controlling costs. General and administrative expenses fell by 4.5 percent in fiscal 2018 to less than 50 million euros. At 131.7 million euros, selling expenses were slightly lower than in the previous year, with revenue rising. As a result, total selling expenses accounted for only 17.1 percent of total revenue in fiscal 2018, a decline of 1.2 percentage points compared with the previous year.
Net profit in fiscal 2018 amounted to EUR 5.9 million, down 65 percent on the previous year. This decline is mainly due to the recognition of exchange rate differences and the adjustment of deferred taxes, both of which are non-cash events for the Group.
"Pfleiderer succeeded in increasing profitability in 2018 despite a difficult market environment," explains Tom K. Schäbinger, CEO of the Pfleiderer Group. "The Company also observed the first signs of declining demand as some customers decided to reduce their inventory levels at the end of the year in anticipation of slower GDP growth in some of our major markets. In view of these developments, the Pfleiderer Group will continue the growth initiatives described in the Diamond strategy, including the development of new products and the opening up of new niche markets. We are convinced that these initiatives will enable us to achieve our financial targets for 2021 even in a more difficult macroeconomic environment, as we focus on less cyclical value-added products. At the same time, we want to use our strong performance to generate cash to relieve the strain on the company".
At the end of 2018, the Group's net debt amounted to EUR 398.6 million (2.98 x EBITDA). Excluding the expenses for the share buyback, net debt amounted to EUR 274.2 million (2.05 x EBITDA). Last year, the company generated EUR 71.6 million in net cash flow from operating activities.