Taxation was negative and contributed Euro 5.5 million to net income [2007: + Euro 2.1 million].
On balance, net income decreased to Euro 5.5 million [2007: Euro 18.3 million].
Earnings per ordinary share attributable to shareholders decreased to Euro 0.05 per share [2007: Euro 0.21].
Results Océ Group
The very strong euro, which rose in the second quarter against the US dollar [15%] and the Pound sterling [15%], had a substantial impact on results.
Total revenues in the second quarter amounted to Euro 704.7 million. On an organic basis the decrease was 2.3% [including exchange rate effects –9.3%]. The share of color continues to grow and now accounts for 25% of revenues [2007: 18%]. We achieved this growth through our strong color product portfolio consisting of our own and partner products.
Non-recurring revenues decreased organically by 5.3% [including exchange rate effects by –11.5%].
Recurring revenues, excluding fax, remained virtually the same on an organic basis [–0.1%; including fax –0.9%]. If the fax activities and exchange rate effects are included, recurring revenues decreased by 8.4%.
Océ increased gross margin, excluding one-off items, to 40.2% [2007: 39.7%1]. Including one-off items, gross margin amounted to 39.1%.
Operating expenses amounted to Euro 266.0 million [2007: Euro 280.0 million]. After adjustment for exchange rate effects, operating expenses remained practically unchanged, despite the one-off items and the expansion of the European direct sales organization for the office segment.
On balance, normalized operating income decreased to Euro 20.2 million [2007: Euro 29.6 million]. Of this decrease Euro 5 million was caused by exchange rate effects, after hedges. Including one-off items, operating income amounted to Euro 9.2 million. Of the one-off items, the greater part [Euro 12.0 million] was incurred to implement the savings program of Euro 80 million in 2008.
Balance sheet, RoCE and cash flow
By comparison with the second quarter of 2007 the balance sheet total decreased at the end of the second quarter 2008 to Euro 2,414 million [2007 second quarter: Euro 2,611 million] reflecting the reduction in accounts receivable, the sale of fixed assets and exchange rate effects.
The net debt/EBITDA ratio amounted to 1.9 [2007: 2.2], which means that it is slightly lower than the sought-after bandwidth of 2 to 2.5. Net Capital Employed at the end of the second quarter was Euro 1,244 million [2007 second quarter: Euro 1,394 million]. In relation to normalized operating income the RoCE amounted to 6.8% [2007: 6.6%].
Free cash flow in the second quarter was Euro 3 million [2007: Euro 12 million].
Cash flow from operating activities was Euro 35 million [2007: Euro 38 million].
1] In 2008 and in the comparative figures for 2007 the transportation costs from distribution center to customer are fully included in the gross margin.
Results of SBUs
Digital Document Systems [DDS]
Revenues in DDS amounted to Euro 389.5 million. Organically, revenues decreased by 4.8%.
The share of color increased to 22% of revenues [2007: 15%].
Non-recurring revenues decreased organically by 9.2%. In the
office segment we accelerated the growth in revenues. This acceleration
was achieved through an expansion in the number of sales staff in Europe
and through the availability of the full product portfolio of Konica
Minolta. Sales were also higher in the printroom segment, notably for
the Oc é VarioPrint 6000 series and the color
printers of Konica Minolta.
