Vestel White Goods announced total revenues of US$974mn (Euro 664mn) and net income of US$24mn (Euro 16mn) in FY08.
Click here for FY08 CMB based unconsolidated financials.
With regards to the ongoing talks between Vestel Elektronik and Whirpool Europe, due to the global economic downturn and financial crisis, both parties have agreed to pause the talks until the conditions improve. However the parties believe that the strategic reasoning behind the deal are still valid.
Vestel White Goods announced total revenues of US$788mn (Euro 517mn) and net income of US$37mn (Euro 24.5mn) in 9mth-08. Unit sales grew by 4% YoY to 3,747,000 units, slightly lower than the Company targets despite deteriorating market conditions both at home and abroad. While domestic sales increased by 14% YoY to 716,700 units, exports rose by 2% YoY to 3,030,000 units.
In 9-mth 08, despite increased Chinese competition in the table-top refrigerator segment (mainly as a result of strong Euro/$ parity), white goods exports remained on track thanks to increased sales to A-brands mainly in all other segments in line with widening product portfolio. Accordingly, washing machine exports were up by 29% YoY. In terms of total unit sales, the highest growth was achieved in oven and dishwasher segments. While oven sales recorded 42% YoY growth (strong export growth), dishwasher sales (a new product) reached 131,000 units up from a low base of 32,000 units in 9mth-07.
EBITDA margin was up to 10.9% in 9mth-08 vs 6.7% in 9mth-07 (strong Euro effect (both against US$ and YTL) coupled with efficiency gains).Nevertheless, net income was down to US$37.3mn in 9mth-08 from US$51.3mn in 9mth-07 due to FX losses (vs. fx gains in 9mth-07) and lower interest income on a YoY basis.
On a QoQ basis, EBITDA margin came down to 7.6% level in line with relatively higher raw material costs (which could not be fully reflected on product prices due to tough market conditions) and the downward trend observed in Euro/$ parity in 3Q08. However, the trend reversal in raw material prices which started to be materialized in global markets in 4Q08 should contribute positively to EBITDA levels in the coming periods if remains sustainable.
On the balance sheet side, gross debt stood at US$65mn at the end of 9mth-08, indicating a gross debt to shareholders' equity ratio of 16%. Meanwhile, net debt reached US$46mn at the end of 9mth-08, up from US$10mn at year-end 2007. Please note that the Company realized total dividend payment of approx. US$42.5mn at the end of May 2008.
While short FX position of the Company is reported as approx. US$126mn in financials, the Company's actual short FX position is limited with US$34mn, taking into account the FX denominated nature of the major portion of the inventories. As previously explained in our 1H08 earnings review, due to nature of the operations, the Company has been carrying a long position in Euro (against US$), the major portion of which was closed through forward contracts (at the amount of Euro 17mn) in early July 2008. Accordingly, the Company reported financial income of US$1.9mn through this action in 3Q08 in line with the downward trend in Euro/$ parity.
Vestel White Goods realized total investments of US$19.7mn in 9-mth08
Click here for 9-mth08 CMB financials.
As we mentioned before in our public announcement on 11.06.2008, the talks between our main shareholder Vestel Elektronik and Whirlpool Europe SRL regarding to the establishment of a partnership in white goods segment still continue.
Vestel White Goods announced total revenues of Euro 325.5mn (5% YoY increase) and net income of Euro 17.5mn in 1H08. Unit sales grew by 7% YoY to 2,452,000 units. Domestic sales increased by 16% YoY to 410,000 units, while exports rose by 6% YoY to 2,042,000 units, in line with the Company targets.
In terms of unit sales, the highest growth was achieved in oven and dishwasher segments. While oven sales recorded 50% YoY growth (strong export growth), dishwasher sales (a new product) reached 76,000 units up from a low base of 6,000 units in 1H08. Meanwhile, refrigerator sales declined by 13% YoY mainly due to weaker export performance on the back of stiff competition from Far-Eastern producers in table-top segment with further strengthening of Euro against US$. Nevertheless, washing machines, recorded 15% YoY growth despite weak domestic sales thanks to increasing sales volumes to A-brands on the export side.
On a YoY basis, EBITDA margin was up to 12.8% in 1H08 vs 6.8% in 1H07, mainly due to: 1) inventory impact: EBITDA margin is inflated (depressed last year) in line with the depreciation of YTL (appreciation of YTL last year) due to TL-based weighted average inventory cost accounting. 2) positive impact of strong Euro against $ and YTL as Europe being the major export market (approx. 90% of export revenues in Euros), the Company benefits from strong Euro against $ and YTL considering also the significant share of YTL and $ denominated production and operating costs. 3) Continuing efficiency gains.
Nevertheless, net income was down to 17.5mn Euros in 1H08 from 24.8mn Euros in 1H07 due to FX losses (vs. fx gains in 1H07) and lower interest income on a YoY basis.
Compared to weak 1Q season, revenues increased by 43% QoQ to Euro 190mn in 2Q08. Accordingly, higher efficiency coupled with the continuing strong Euro trend brought the bottom-line up to Euro 15.2mn in 2Q08 vs. Euro 1.7mn in 1Q08.
Please note that the significant rise in raw material prices so far this year have not been reflected in 1H08 financials as the Company was able to set purchase prices for the major cost items for the upcoming two quarters at the beginning of the year. Nevertheless, the extent to which the Company can reflect these raw material price increases to its final product prices should set the level of the negative impact of higher raw material prices on margins in 2H08.
While short FX position of the Company is reported as approx. US$103mn in financials, the Company's actual short FX position is limited with US$5mn, taking into account the FX denominated nature of the major portion of the inventories. Nevertheless, as explained above, due to nature of the operations, the Company had been carrying a long position in Euro (against US$) and so far benefited from strong Euro trend. However, in order to limit the downside risk, the Company closed almost 70% of this long position through forward contracts in July 2008.
On the balance sheet side, gross debt stood at US$70mn at the end of 1H08, indicating a gross debt to shareholders' equity ratio of 18%. Please note that net debt reached US$49mn at end of 1H08, up from US$2.5mn at the end of 1Q08, mainly due to cash dividend payment of approx. US$42.5mn at the end of May 2008.
The Company realized total investments of US$16.4mn in 1H08.
Click here for 1H08 CMB financials.
Vestel Dis Ticaret A.Ş., a subsidiary of Vestel Elektronik (the majority shareholder of Vestel White Goods) acquired "Vestfrost" brand which has a strong positioning and recognition in Northern European Market and Russia. The Company plans to expand "Vestfrost" brand to overall European Market and to all its product range (refrigerators, washing machines, dishwashers, ACs and ovens) as "Vestfrost" has been solely refrigerator and freezer brand.
Vestfrost was established in 1963 in Denmark. The Company entered into strategic partnership with Vestel in household appliances (white goods) in 2006. With the sale of "Vestfrost" brand to Vestel on the household appliance side, the Company continues its operations solely in the commercial freezer area.
Please note that Vestel White Goods is not directly involved in the acquisition of "Vestfrost" brand. The acquirer of the brand, Vestel Foreign Trade, a sister company, undertakes Vestel White Goods international sales. In line with further strengthening of Vestel Foreign Trade's position in the export markets through "Vestfrost" brand, Vestel White Goods revenue generation and profitability is expected to be positively affected.
We have made a public announcement on 24 October 2007 that a non-binding letter of intent had been signed between Vestel Elektronik Sanayi ve Ticaret A.Ş., the majority shareholder of Vestel White Goods, and Whirlpool Europe srl for commencing exclusive negotiations to establish a joint venture company in equal proportion (50%-50%) and to transfer the entire shares owned by Vestel Elektronik Sanayi ve Ticaret A.S. in Vestel White Goods to the joint venture company to be established for the purpose of strengthening commercial activities in foreign and domestic white goods markets and developing cooperation in this respect.
The talks between Vestel Elektronik and Whirlpool Europe still continue. Meanwhile, Vestel Elektronik and Whirlpool further signed a confidentiality agreement on 11 June 2008 to start the due diligence process with regards to the transfer of the entire shares owned by Vestel Elektronik Sanayi ve Ticaret A.S. in Vestel CIS (100% owned by Vestel Elektronik) to the joint venture company to be established between the parties in equal proportion (50%-50%).
Vestel CIS is a wholly-owned Russian subsidiary of Vestel Elektronik. The Company manufactures refrigerators and washing machines for the Russian and CIS markets in facilities with 85,000m2 of enclosed space. The refrigerator and washing machine plants, which went into production in 2006, have annual production capacities of 500,000 units each.
Vestel White Goods announced total revenues of Euro 132.9mn (9.3% YoY increase) and net income of Euro 1.7mn in 1Q08. Unit sales grew by 12% YoY to 1,096,846 units. Domestic unit sales grew by 18% YoY to 153,000 units from last years low base, while exports rose by 11% YoY to 943,000 units, in line with the Company targets.
Please note that in line with the change in accounting practice, all FX gains/losses on trade receivables are now reported under financial income /expense item. Nevertheless, EBITDA margin was still inflated in 1Q08 in line with the depreciation of YTL due to TL-based weighted average inventory cost accounting.
Higher FX losses (on short-FX position) caused by the depreciation of YTL depressed the bottom-line in 1Q08. While short FX position of the Company is reported as approx. US$70mn in financials, the Company did have a long FX position in fact, taking into account the FX denominated nature of the major portion of the inventories.
The significant rise in raw material prices so far this year have not been reflected in 1Q08 financials as the Company was able to set purchase prices for the major cost items for the upcoming two quarters at the beginning of the year. Nevertheless, strong Euro/$ parity (as the Company is long in Euros) and the extent to a which the Company can reflect these raw material price increases to its final product prices should alleviate the negative impact on margins in the coming periods.
On the balance sheet side, gross debt stood at US$82mn at the end of 1Q08, indicating a gross debt to shareholders equity ratio of 21%. Please note that net debt declined to US$2.5mn from US$10mn at year-end in line with continuing improvement on the working capital side.
The Company realized total investments of US$6.87mn in 1Q08.
Click here for 1Q08 CMB financials.
The Board of Directors of Vestel White Goods decided to propose 0.2711 YTL gross dividend per share to the General Assembly to be distributed on the date set by the General Assembly (to be held on 28 May 2008). The total amount to be distributed comes up to US$40.9mn, indicating a dividend yield of 6.8%.
Vestel White Goods reported total revenues of US$906mn and net income of US$57mn in FY07. As being the exclusive OEM/ODM only white goods manufacturer, Vestel White Goods continues to increase its market share in the European market by capitalising on its low cost, highly efficient manufacturing capabilities that also enables the Company to provide differentiated products to its diverse customer base. Accordingly, despite the continuing appreciation of TL, and a contracting white goods market at home, total unit sales still increased by 12% YoY while revenues recorded a 6% growth in Euro terms in 2007.
Click here for FY07 update.