The worsening economic conditions during the summer, together with lower-than-forecast sales of printing and writing papers across Europe and in North America, have negatively impacted Sequana’s sales. The drop in demand noted in August gathered pace in September in both the distribution and production businesses, putting strong pressure on selling prices.
Nevertheless, Arjowiggins’ specialty businesses and Antalis’ non-paper businesses held up well. Sales were down by 4% to €909 million (down 7.1% at constant exchange rates). The positive impact of the fall in raw material prices over the period – albeit by less than forecast – and a tight rein on costs helped offset the drop in volumes and the downward pressure on selling prices.
Third-quarter EBITDA came in at €21 million, or 2.3% of sales, up €3 million on the same period in 2011. Following the capital increase carried out on 9 July 2012 which helped to bolster the Group’s financial structure, Sequana implemented a number of strategic decisions in September:
- Arjowiggins brought its production capacity into line with market demand for printing and writing papers. It shut down one plant in Argentina in September and is in the process of closing two others in Denmark and the UK. These capacity reduction measures are being carried out in accordance with the planned timeline and with the restructuring expenditure initially budgeted for.
Of the €23 million in restructuring expenses booked in the third quarter, around €8 million will be disbursed in the last quarter of 2012 and most of the balance in 2013. The Group’s
restructuring plan will generate €17 million in full-year net cost savings, mostly from 2013 on.
- Continued expansion of Antalis in fast-growing market segments and in emerging economies with the acquisition of two packaging product distributors in Chile and the Czech Republic for an enterprise value of €17 million.
