01 October 2002 07:36
Pfleiderer AG Sells Doors Operations to Danish Vest-Wood Group.
* Successful conclusion to divestments ends first phase of new strategic drection by Pfleiderer Group.
Neumarkt, October 1, 2002 - SDAX-listed Pfleiderer AG (stock exchange code: WKN 676 474) has sold its doors
operations to the Danish Vest-Wood A/S. An agreement to this effect has been made by the managements and supervisory
boards of both companies. The transaction, in which the investment bank Lazard acted as consultant, is still subject to
approval by national anti-trust authorities, but should become effective by the end of the year. Earlier than planned,
the agreement marks the conclusion of the announced series of divestment measures by the Pfleiderer Group. It must also
be seen as a successful end to the first phase in the Group's new strategic direction. The new corporate strategy
aims to achieve focused growth by concentrating on its two business centers, Wood-Based Panels and Infrastructure
Technology. One of the biggest European manufacturers of interior, exterior and special-purpose doors, the Vest-Wood
Group reported sales of around 260 million euros in fiscal 2000/2001. Vest-Wood now takes over Pfleiderer Turen GmbH
& Co. KG with its German production sites in Oettingen (Bavaria) and Mittweida (Saxony), production in Lenti in
Hungary and the Wirus Servicegesellschaft mbH, based in Gutersloh in Westphalia. With its brands Moralt®, Wirus® and
SVEDEX® , Pfleiderer's Doors Business Unit is market leader in the interior doors segment in Germany. The Doors
business unit had sales of 125 million euros in fiscal 2001 and employs around 1,200 people. As part of the deal, all
employees at Pfleiderer's doors operations will be taken over, and production will continue at existing sites. The
brands just mentioned will now become part of Vest-Wood Group's European doors family and will be extended. This
means that the doors operations will continue to prosper in what is a difficult market. After divestment of its Windows
operations through an MBO in June 2002, followed by the sale of its Insulation Technology activities to the Spanish
Uralita Group in September 2002, in this round of divestments, too, Pfleiderer AG has succeeded in living up to its
responsibilities towards employees, customers and business associates alike. For the Danish Vest-Wood Group, acquisition
of the Pfleiderer's doors operations is an important milestone within the framework of its European growth
strategy. This aims to build on its established market position in Northern Europe and the Baltic States, as well as to
strengthen the company's presence in Central Europe and Great Britain. Mr. Asbjorn Berge, CEO of Vest-Wood A/S:
"Vest-Wood is known as a niche player with a relatively narrow product range in the German market. Vest-Wood has
for some time been looking for a German acquisition candidate that could contribute to broaden the product range to
become a full supplier of door solutions. By combining the strengths of Pfleiderer and Vest-Wood in Germany we expect to
be able to significantly improve our services to both Pfleiderer and Vest-Wood customers. Pfleiderer and Vest-Wood
represent an ideal match as both products and channels are complementary. Pfleiderer is the leading doors manufacturer
in Germany, with a strong position in the merchant channel. Combining this with Vest-Wood´s strong position in the DIY
channel, we expect significant cross-sales opportunities. Vest-Wood intends to further develop the combined unit to
become the preferred door supplier in Germany. " First Phase of Pfleiderer's New Strategic Direction
Successfully Completed. In May 2002, Pfleiderer AG decided to move in a new strategic direction based on focused growth.
This has meant concentrating on its two business centers Wood-Based Panels and Infrastructure Technology. As a result,
new partners or owners were sought for the Group's Doors, Windows and Insulation Technology operations, at the
latest by the end of this year. The successful sale of its doors operations, much earlier than planned, marks the final
stage in completion of its announced divestment measures. It also signals the end of the first phase in the Group's
new strategic direction of * freeing the Group from the German construction industry and its difficult competitive
conditions, * reducing corporate debt and improve the equity ratio and * creating new scope for entrepreneurial
activity. Income gained from the divestments will provide Pfleiderer with considerable financial scope for the reduction
of corporate debt and for investment-driven growth in the business centers Wood-Based Panels and Infrastructure
Technology. As announced, the equity ratio will increase to over 25 percent. Bearing this positive development in mind,
Pfleiderer AG has consciously accepted that the divestment of its doors operations will result in slight book-value
losses which will be reflected in the Group's financial statements. In the financial statement for the holding
company, Pfleiderer AG, the one-off negative effect will be somewhat more marked. This will be compensated for by
drawing on capital reserves. As a result, and in accordance with Article 150 (4) of the German Stock Corporation Act, no
dividend payment will be made for fiscal 2002. As far as Pfleiderer's CEO Prof. Dr. Ralf H. Bufe is concerned, the
company must now utilize the next phase of focused growth to realize the investments and acquisitions planned for its
two business centers, Wood-Based Panels and Infrastructure Technology. "Despite a difficult market and trading
situation, Pfleiderer AG is relatively well positioned compared to our competitors and the industry as a whole. The
strength we have gained from these divestments will help us find new impetus. This and the clarity of our business model
will result in greater earnings power and increase the value of the company overall. " In the Wood-Based Panels
Business Center Pfleiderer will be expanding its range of products to include MDF boards from its own production, as
well as making targeted investments in the growth markets of Eastern Europe and Russia. The main focus of attention in
the Infrastructure Technology Business Center will be the entering into new international markets for rail sleeper
systems through its Business Unit track systems, as well as the expansion of mast production in the USA. Short Profile
of Vest-Wood A/S: The Vest-Wood Group was established in 1981 and has initially focused on production and sale of
different pine products. During the 90s, Vest-Wood followed a focused strategy on expanding its door business in the
Nordic countries. This was achieved through a combination of organic growth and acquisition-led growth. Despite such
fast sales growth in the past years, Vest-Wood A/S has always managed to grow profitably at least in line with sales
development, and has achieved profitability ratios of more than 15% EBITDA and 10% EBIT. Today Vest-Wood is one of
Europe's largest door manufacturers. It is a market leader in the Nordic market for internal doors and a major
player in the Nordic market for external doors. Vest-Wood is also a significant exporter to Germany of special solid
pine doors. Products are currently manufactured at factories in Denmark, Finland, Sweden and Estonia. The head office is
located in Logstor, Denmark. In April, 2002, a consortium of financially strong investors (including the three largest
Danish Pension funds) acquired Vest-Wood and delisted the company from Copenhagen stock exchange. Together with the
management of Vest-Wood, the new owners wish to continue the company's positive development. The strategy is to
maintain the company's leading position in the Nordic countries, to expand the sales in existing markets outside
the Nordic area and to develop new markets. Growth is to be achieved organically, as well as through acquisitions. The
new owners are able to provide Vest-Wood with the required capital for this growth strategy and support the management
with strategic advice. Background: Pfleiderer AG's New Strategic Direction In May 2002, Pfleiderer AG embarked on a
new corporate strategy based on focused growth. This involved concentrating on its Business Centers Wood-Based Panels
and Infrastructure Technology, while divesting itself of its two other building sector-linked operations, Doors +
Windows and Insulation Technology. In future, Pfleiderer AG intends to extend its international involvement in all its
business units and will be positioning itself * as a quality- and design-oriented partner for the furniture industry and
specialist outlets, * as a technologically leading systems supplier for infrastructure technology. The high earnings
power and dynamic growth that these two high-performing business centers provide will ensure that the company continues
to develop positively. Notes: In order to provide more information, we are pleased to invite you to take part in a
telephone conference with Prof. Dr. Ralf H. Bufe, CEO of Pfleiderer AG, and Dr. Jurgen Koch, CFO of Pfleiderer AG, on
Tuesday, October 1, 2002 * Journalists: 12.30 h * Analysts and investors: 13.00 h. The number to ring is + 49 (0) 61 03
/ 4 85 30 00.
[CAIW [Corporate Announcements Intelligence Wire]] |
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