ANNUAL REPORT 2011 A.S. CRÉATION TAPETEN AG

5% are projected for Russia’s GDP in 2012,
with consumer spending again being one of
the main growth drivers.
Commodity and energy prices will probably be
influenced by both economic and political
factors in 2012. On the one hand, the slowdown
in economic activity in the industrialised
countries should lead to reduced demand for
commodities and energies and, hence, to
declining prices. On the other hand, there are
political trends, e.g. national efforts to reserve
certain commodities for local economies, as
well as the uncertainty about the oil supply
arising from the dispute about Iran’s nuclear
policy. This is why the forecast of commodity
and energy prices represents another factor of
uncertainty. This view is supported by the fact
that the HWWI Commodity Price Index, which
declined in late 2011, picked up sharply again
already in January 2012. The Managing Board
of A.S. Création tends to believe that commodity
and energy prices will increase further
in 2012.
Conclusion: In view of the projected recessionary
trend in the euro-zone and an only moderate
increase in private consumption expenditures,
the Managing Board expects the macroeconomic
environment in 2012 to be more
difficult than in 2011. It remains to be seen
whether demand for wallpapers and furnishing
fabrics will be able to isolate itself from this
general trend. However, the Managing Board
is of the opinion that the trend towards wallpapers
remains intact. From today’s point of
view, it is uncertain what, if any, impact the
anticipated increase in commodity and energy
prices will have on the earnings position of
A.S. Création.
The Managing Board projects a difficult market
environment for the Wallpaper Division in
2012, which will be marked by further increases
in the prices of commodities and energies. Even
though these price increases will probably be
much more moderate than in 2011, these
adverse effects must be compensated for in
order to prevent a further decline in the gross
profit margin. In response to this trend, the
company has therefore announced an increase
in its own sales prices in the first quarter of
2012. In view of the persistent fierce price competition
in the international wallpaper industry,
it is by no means certain that this measure
will be sufficient. This makes it all the more
important for A.S. Création to build its image
through products and marketing concepts. In
this respect, A.S. Création is very well positioned.
The company continued to expand its
competitive position in 2011 with the help of
continued intensive product development
efforts and the refinement of its marketing
instruments, e.g. modern shop fitting and pre-
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