ANNUAL REPORT 2011 A.S. CRÉATION TAPETEN AG

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GROUP MANAGEMENT REPORT 42 of Wallpaper Manufacturers (VDT). As a leniency applicant, who is exempt from potential fines, Tapetenfabrik Gebr. Rasch GmbH & Co. KG has caused the investigations by the Federal Cartel Office. Earnings position The earnings position of A.S. Création deteriorated in the fiscal year 2011. While declining results had been projected, the actual reduction was much more pronounced than expected. Instead of the projected € 6.5 million to € 7.5 million, net profit for the year 2011 came in at only € 4.6 million, down 44.6% on the previous year’s € 8.4 million. The detailed profit analysis shows that the operating result as well as the financial result and the tax ratio had an adverse impact on the company’s bottom line in 2011. Earnings before interest and taxes (EBIT) in € m 13.4 14.3 2009 2010 9.6 2011 15 10 5 0 The main reason for the poorer earnings position is the disappointing operating result of € 9.6 million, which was down by € 4.7 million on the previous year’s € 14.3 million in spite of the € 7.7 million increase in sales revenues. Accordingly, the EBIT margin reached only 5.0% in 2011 (2010: 7.8%), which was the lowest level since 1998, the year in which the company adopted International Financial Reporting Standards (IFRS). This development is attributable to the following factors: • Increased procurement costs As described under “Macroeconomic environment”, global commodity prices (excluding energy) increased by 12.4% and energy prices by 25.0% in 2011. These price increases also affected important raw materials used by A.S. Création such as paper, non-wovens, PVC and paint as well as energy purchases, which led to a rise in production costs by € 5.7 million. The procurement prices of merchandise such as furnishing fabrics increased as well and also weighed on the margins. A.S. Creation pursues a product policy of compensating these price increases on the procurement side by successively expanding the percentage of higher-quality products in the wallpaper range. In response to the sharp rise in commodity and energy prices in the year 2010, A.S. Création had additionally announced an extraordinary price increase
with effect from March 1, 2011. In spite of these measures, the gross profit margin (quotient of gross profit and total output) declined by 2.7 percentage points from 48.5% in the previous year to 45.8% in 2011. In relation to the increased total output of € 193.5 million, the decline in the margin means that € 5.2 million less in earnings was available to cover other expenses. The comparison with earnings before interest and taxes of € 9.6 million illustrates the strong negative impact of the increased commodity and energy prices on the company’s bottom line. • Increased personnel expenses As explained under “Employees”, staff productivity did not improve materially in the fiscal year 2011 due to the increase in the company’s headcount. Sales per employee amounted to € 0.242 million in the fiscal year, compared to € 0.239 in the previous year. Accordingly, A.S. Création was unable to offset the collective pay rise; as a result, personnel expenses as a percentage of total output deteriorated moderately from 21.1% in the previous year to 21.3% in 2011. • Adverse trend in other operating expenses The increased utilisation of the company’s production capacity led to an improved cost situation, as the fixed costs were spread over a higher total output. However, this contrasted with higher marketing and sales costs and increased expenses in conjunction with the first-time deliveries to the new DIY customers. Moreover, higher freight rates and a trend towards customers ordering smaller quantities per order led to a disproportionate increase in transport costs. As a result, other operating expenses as a percentage of total output deteriorated from the previous year’s 14.6% to 14.8%. As the rise in commodity and energy prices in 2011 could not be offset by increases in the company’s own prices and internal productivity improvements, earnings before interest and taxes declined, as mentioned above, by 33.0% from € 14.3 million in the previous year to € 9.6 million in 2011. The financial result also had an adverse impact on the bottom line and deteriorated from € -2.0 million in the previous year to € -2.3 million in 2011. As in the previous year, the discount factor used for the actuarial calculation of the pension provisions had to be adjusted to reflect the developments in the capital market and was reduced from 4.9% to 4.6%. This led to an actuarial increase in pension provisions by € 0.3 million, which was recognised as interest expense. In the fiscal year 2010, the GROUP MANAGEMENT REPORT 43
Page 1 and 2: ANNUAL REPORT 2011 A.S. CRÉATION T
Page 3 and 4: Foreword 8 Managing Board and Super
Page 5 and 6: account, however, the A.S. Créatio
Page 7 and 8: higher sales also in the Eastern Eu
Page 9 and 10: January February April May November
Page 11 and 12: Board has transferred decision-maki
Page 13 and 14: • discussion about the recommenda
Page 15 and 16: CORPORATE GOVERNANCE STATEMENT AND
Page 17 and 18: Declaration of conformity pursuant
Page 19 and 20: to the Supervisory Board in writing
Page 21 and 22: Accounting and audit The consolidat
Page 23 and 24: Introduction The A.S. Création Gro
Page 25 and 26: possible. On the other hand, there
Page 27 and 28: homing or cocooning, which they see
Page 29 and 30: evenues generated by A.S. Création
Page 31 and 32: the fiscal year is due to the revis
Page 33: dards by an independent auditor on
Page 37 and 38: Cash-flow in € m 17.6 19.0 2009 2
Page 39 and 40: production facility in Russia, the
Page 41 and 42: from the performance-oriented syste
Page 43 and 44: up to € 4,500,000 through the iss
Page 45 and 46: or its Audit Committee for the audi
Page 47 and 48: product for PVC, which would result
Page 49 and 50: with supplies to joint customers. A
Page 51 and 52: 5% are projected for Russia’s GDP
Page 53 and 54: start-up losses incurred in Russia
Page 55 and 56: Political stock markets weigh on sh
Page 57 and 58: light of this fact, the Managing Bo
Page 59 and 60: Shareholder Structure Free float 41
Page 61 and 62: CONSOLIDATED FINANCIAL STATEMENTS A
Page 63 and 64: Equity and Liabilities Notes 31.12.
Page 65 and 66: A.S. Création Tapeten AG, Gummersb
Page 67 and 68: A.S. Création Tapeten AG, Gummersb
Page 69 and 70: of domestic and foreign companies i
Page 71 and 72: In accordance with IAS 21, foreign
Page 73 and 74: attributable cost but also the fact
Page 75 and 76: conditions, shorter useful lives re
Page 77 and 78: (2) Intangible fixed assets The tab
Page 79 and 80: (5) Other assets A breakdown of oth
Page 81 and 82: (8) Inventories Inventories compris
Page 83 and 84: As in the previous year, capital re
Page 85 and 86:
(13) Other liabilities The breakdow
Page 87 and 88:
The table below shows the changes i
Page 89 and 90:
administrative offence proceedings.
Page 91 and 92:
(21) Depreciation A breakdown of de
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Complementary information (26) Cash
Page 95 and 96:
The table below shows a breakdown o
Page 97 and 98:
(31) Additional disclosures on fina
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(34) Supervisory Board In FY 2011,
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on its website. The declaration of
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In our opinion, based on the findin
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PROFIT APPROPRIATION PROPOSAL Balan
Page 107 and 108:
Equity and Liabilities 31.12.2011 3
Page 109 and 110:
March 22, 2012 Analyst presentation
Page 111:
Cover photo: A fascinating microcos
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ANNUAL REPORT 2011 A.S. CRÉATION TAPETEN AG

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