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Turnover in Exotic Fabrics shows upward trend at Gamma
22 Apr '09
6 min read
Turnover in the Exotic Fabrics business unit showed an upward trend, increasing by 17% from EUR 35 million in 2008 to EUR 40 million in 2009 as a consequence of a pick-up in demand, notably for the products of Vlisco, GTP and Uniwax.
Turnover of Sleep Care Fabrics was EUR 30 million (2008: EUR 37 million). Manufacturers of mattresses cut production in response to the deteriorating economic climate and further reduced inventory.
Discontinued Operations
Turnover of Discontinued Operations was EUR 20 million (2008: EUR 20 million). As already indicated, the process for the sale of Verseidag Ballistic Protection has now been resumed.
Cost savings and restructurings
The group is working hard on the programme of further cost savings and restructurings announced on 20 February 2009, which will involve the loss of approximately 10% of the jobs (about 800 employees) within the group, of which 275 jobs were already shed in the fourth quarter of 2008. Cost savings of EUR 30 million will be achieved in 2009. The programme should ultimately yield annual savings of about EUR 45 million from 2010.
As a consequence of the measures taken, 205 employees in Industrial Solutions and 149 employees in Lifestyle Fabrics left the Company in the first quarter of 2009. Furthermore, short-time working is being introduced in various group companies.
As part of a stringent financial policy, investments have been reduced to a minimum and the Company is being managed very much in terms of working capital.
Debt reduction and financing
On 18 February 2009, Gamma Holding reached agreement on revised financing until March 2010, as a result of which the total facilities made available by the syndicate of banks amount to EUR 390 million. At the end of March, Gamma Holding was in compliance with the newly agreed bank covenants.
In order to reduce the Company's debt, the Company has been looking into the possibilities of disposing of business units at reasonable prices. Under present market conditions, however, this is very difficult because of low valuations and the limited availability of finance for acquisitions.
Against this background Gamma Holding will focus in the coming period primarily on the further implementation of the previously announced programme of cost savings and restructurings.
Moreover, in the recent period there have been concrete talks with an interested party on the possibility of a public-to-private transaction. However, at the beginning of this week it transpired that the potential purchaser was unable to reach agreement with the existing syndicate of banks on the financing of this transaction. Gamma Holding remains open to a public-to-private transaction.
Other events
At the request of the Supervisory Board, Mr Michel Frequin stepped down as a member of the Executive Board. The Company will be headed by Mr Meint Veninga, CEO. The Supervisory Board intends after the shareholders' meeting of 23 April 2009 to appoint the present Group Controller, Mr Leendert van Reeuwijk, as CFO and member of the Executive Board.
In connection with the changed circumstances in the capital market and as the Stichting Preferente Aandelen Gamma Holding (the Foundation) does not have financing facilities at present, Gamma Holding and the Foundation have decided to terminate the existing put option, under which the Company was able to require the Foundation to take (4%) participating preference shares in the capital of the Company. Gamma Holding has also concluded an agreement to grant the Foundation the right of enquiry. The Foundation's right to require the Company to issue (4%) participating preference shares (call option) remains unchanged.
Outlook
In view of the current economic downturn and the continuing pressure on the financial markets, market conditions will remain exceptionally difficult in 2009. With the implementation of the programme of further cost savings, restructurings and divestments, Gamma Holding expects to be able to withstand the current recession.
Turnover of Sleep Care Fabrics was EUR 30 million (2008: EUR 37 million). Manufacturers of mattresses cut production in response to the deteriorating economic climate and further reduced inventory.
Discontinued Operations
Turnover of Discontinued Operations was EUR 20 million (2008: EUR 20 million). As already indicated, the process for the sale of Verseidag Ballistic Protection has now been resumed.
Cost savings and restructurings
The group is working hard on the programme of further cost savings and restructurings announced on 20 February 2009, which will involve the loss of approximately 10% of the jobs (about 800 employees) within the group, of which 275 jobs were already shed in the fourth quarter of 2008. Cost savings of EUR 30 million will be achieved in 2009. The programme should ultimately yield annual savings of about EUR 45 million from 2010.
As a consequence of the measures taken, 205 employees in Industrial Solutions and 149 employees in Lifestyle Fabrics left the Company in the first quarter of 2009. Furthermore, short-time working is being introduced in various group companies.
As part of a stringent financial policy, investments have been reduced to a minimum and the Company is being managed very much in terms of working capital.
Debt reduction and financing
On 18 February 2009, Gamma Holding reached agreement on revised financing until March 2010, as a result of which the total facilities made available by the syndicate of banks amount to EUR 390 million. At the end of March, Gamma Holding was in compliance with the newly agreed bank covenants.
In order to reduce the Company's debt, the Company has been looking into the possibilities of disposing of business units at reasonable prices. Under present market conditions, however, this is very difficult because of low valuations and the limited availability of finance for acquisitions.
Against this background Gamma Holding will focus in the coming period primarily on the further implementation of the previously announced programme of cost savings and restructurings.
Moreover, in the recent period there have been concrete talks with an interested party on the possibility of a public-to-private transaction. However, at the beginning of this week it transpired that the potential purchaser was unable to reach agreement with the existing syndicate of banks on the financing of this transaction. Gamma Holding remains open to a public-to-private transaction.
Other events
At the request of the Supervisory Board, Mr Michel Frequin stepped down as a member of the Executive Board. The Company will be headed by Mr Meint Veninga, CEO. The Supervisory Board intends after the shareholders' meeting of 23 April 2009 to appoint the present Group Controller, Mr Leendert van Reeuwijk, as CFO and member of the Executive Board.
In connection with the changed circumstances in the capital market and as the Stichting Preferente Aandelen Gamma Holding (the Foundation) does not have financing facilities at present, Gamma Holding and the Foundation have decided to terminate the existing put option, under which the Company was able to require the Foundation to take (4%) participating preference shares in the capital of the Company. Gamma Holding has also concluded an agreement to grant the Foundation the right of enquiry. The Foundation's right to require the Company to issue (4%) participating preference shares (call option) remains unchanged.
Outlook
In view of the current economic downturn and the continuing pressure on the financial markets, market conditions will remain exceptionally difficult in 2009. With the implementation of the programme of further cost savings, restructurings and divestments, Gamma Holding expects to be able to withstand the current recession.
Gamma Holding
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