Pfleiderer affirms growth forecast for 2007

Oct 18, 2007. /Lesprom Network/. Pfleiderer AG presented on October 17, 2007 an overview of its current business development at a conference for investors and analysts in Berlin. Pfleiderer affirmed its growth forecasts for 2007. Including the consolidation of the Pergo Group, in the ten-month period of financial year 2007, the executive board anticipates total sales revenues of approximately Euro 1.9 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of between Euro 240 and Euro 250 million. This represents revenue growth of more than 30% and EBITDA growth of between 15% and 20% compared with the prior year, despite higher costs caused by the integration of Pergo. The positive development of demand and sales continued for Pfleiderer in the third quarter. The group targets sales revenues of Euro 890 million (excluding Pergo Europe) in 2007 in Western Europe, its biggest market. This represents an increase of 14% compared with the prior year. At the same time, operating profit is to grow at a higher rate than revenues. The targeted EBITDA of Euro 140 million represents an increase of 35%. Pfleiderer’s engineered-wood activities in Eastern Europe are benefiting from the ongoing positive development of the furniture industries in Poland and Russia and from the systematic expansion of production volumes. In Eastern Europe, the Group aims to achieve growth in sales revenues of 33% to approximately Euro 400 million and an average EBITDA margin of 20% in full-year 2007. Pfleiderer has particleboard plants in Poland and Russia as well as a glue factory in Poland. In the third quarter of 2007, a new thin-MDF plant went on stream in Grajewo, Poland. Furthermore, in July 2007, the Group announced the construction of an additional HDF/MDF plant in Novgorod, Russia, which will start production in the third quarter of 2009. The integration of the Pergo Group, which Pfleiderer acquired in March 2007, is making rapid progress and will be virtually completed by the end of 2007. Pergo, the inventor of laminated flooring, has production facilities in Sweden and North America and markets its products worldwide. The company has innovative products and many valuable patents and brands. As a result of the acquisition, Pfleiderer has become the market leader in North America with 15% of the market, and is well positioned in this important growth market as an integrated manufacturer with new sales and marketing concepts. Pfleiderer has succeeded in expanding its market share in North America this year. Due to the difficult economic situation in North America, in connection with the integration of Pergo Pfleiderer has also initiated comprehensive structural changes that will lead to the sustained enhancement of efficiency and competitiveness in this market. The changes include the merger of production facilities as well as of purchasing, logistics and administrative functions, and involve staff reductions of approximately 15% in Canada and the United States. These measures will give rise to a one-time charge on earnings of around Euro 20 million in the second half of 2007 and will lead to significantly lower structural costs as soon as the year 2008. Cost savings of more than Euro 10 million have already been realized. The group anticipates savings and synergies of Euro 25 million in 2008 and Euro 30 million in 2009. This will give Pfleiderer an excellent starting position in a market segment that will enjoy double-digit growth in the medium term. The group intends to continue along its path of profitable growth in fiscal 2008. Sales revenues should increase organically to over Euro 2 billion and an EBITDA margin of more than 15% should be achieved. And in financial and balance-sheet terms, Pfleiderer is well prepared to grow in the coming years also through acquisitions in Western and Eastern Europe as well as in North America. The goal is to profit over the long term from the market growth in these regions and to further strengthen the group’s profitability. MDAX-listed Pfleiderer AG is a leading supplier of engineered wood, surface finished products and laminate flooring. With around 5 200 employees and production sites in Western Europe, Eastern Europe and North America, the Pfleiderer Group posted revenues exceeding Euro 1.4 billion in fiscal 2006.