DGAP-News: A.S. Création Tapeten AG: Unsatisfactory business trend in Q3 2018

A.S. Création Tapeten AG, Gummersbach
(ISIN DE000A1TNNN5)

Unsatisfactory business trend in Q3 2018

A.S. Création Tapeten AG, Europe's leading wallpaper manufacturer, today published the interim report for the period ended September 30, 2018. A summary is provided below:

Revenues decline sharply in third quarter
In a difficult macroeconomic environment, A.S. Création's consolidated sales revenues declined by EUR 6.7 million or 6.1% from EUR 109.4 million in the previous year to EUR 102.7 million in the first nine months of 2018. The poor business trend had a particularly adverse effect on A.S. Création in the past three months, with the company's third-quarter revenues dropping EUR 3.7 million or 11.1% from EUR 33.6 million in the previous year to EUR 29.9 million. This means that the third quarter alone accounted for 55.2% of the total EUR 6.7 million drop in nine-month revenues. A.S. Création's third-quarter revenues declined sharply in all regions - except for non-EU Eastern European countries. Eastern Europe was the only region in which the company was able to generate slightly higher revenues in the third quarter of the current fiscal year than in the same period of the previous year. This was attributable to the additional revenues generated by the new wallpaper factory opened near Minsk, Belarus.

Earnings not satisfactory
At EUR 2.0 million, the loss posted by A.S. Création for the first nine months of 2018 was clearly lower than the previous year's loss of EUR 14.1 million. It should be noted, however, that the previous year's operating result was adversely affected by extraordinary effects totalling EUR 13.5 million. The extraordinary effects in the first nine months of 2017 resulted from the anti-trust proceedings, from severance payments and from exchange rate effects. In the reporting period, comparable extraordinary effects relating to exchange rate effects and start-up losses in Belarus totalled EUR 1.4 million. Adjusted for these extraordinary effects, A.S. Création posted an operating loss of EUR 0.6 million for the first nine months of 2018, which is on a par with the previous year's loss. This means that A.S. Création has been able to offset the shortfall in earnings caused by the lower revenues by cutting its costs. As the measures implemented were insufficient, however, to make A.S. Création profitable again, the Managing Board is not satisfied with the company's performance in the fiscal year to date.

At EUR -2.0 million, the Group's financial result in the first nine months of 2018 was more or less on a par with the previous year's EUR -1.9 million. The result posted by the Russian joint venture, A.S. & Palitra, has the biggest influence on the consolidated financial result of A.S. Création. Given that A.S. Création Tapeten AG holds 50% of this company, the share in net result after taxes that is attributable to A.S. Création is recognised in the consolidated financial result. A.S. & Palitra achieved strong revenue growth in the first nine months of 2018 and thus improved its operating result. However, the depreciation of the Russian currency led to exchange losses in the company's income statement.

At EUR -4.2 million (previous year: EUR -15.9 million), A.S. Création's earnings after taxes for the first nine months of 2018 were much better than the company's 2017 earnings after taxes, which were adversely affected by significant extraordinary effects.

The Group's key figures for the first nine months of 2018 are summarised below:

Gummersbach, October 25, 2018

A.S. Création Tapeten AG

The Managing Board

Inquiries:
Maik Krämer,
Chairman of the Managing Board, Director of Finance and Controlling,
phone +49-22 61-542-387,
fax +49-22 61-542-304,
e-mail: m.kraemer@as-creation.de

The full 9-month report is available at:
www.as-creation.de or from
A.S. Création Tapeten AG,
Frau Börngen,
Südstr. 47,
D - 51645 Gummersbach,
phone: +49-22 61-542-350,
e-mail: investor@as-creation.de