The IPTE group sales rose from euro 110m in 2003 to 128m in 2004 (+16.5%), but the operating profit slipped back by 11% to 0.95m. The net result was a loss of 0.6m before restructuring costs, which is a slight improvement over the 2003 loss of 0.7m. The annual result was significantly affected by the restructuring undertaken in the automation activity. In the second quarter, the participating interest in the Singapore subsidiary Autoveyor was sold back to the minority shareholders. This transaction produced an additional loss of euro 1.9m, consisting of the depreciation of goodwill, selling costs and currency translation losses. In the fourth quarter of 2004, the board of directors decided on a global restructuring of the factory automation activity (EPP Europe 1/2, 2005). This step has had an additional negative impact of 3m on the 2004 result, but was necessary in order to reduce the cost structure of this division and to optimize the various activities. The total restructuring cost has been charged in full against the 2004 result, so the total net loss amounts to 5.6m as against a 0.7m loss in 2003. In 2004, a number of major projects were carried out for customers, which involved significant costs. The initial budgets for these design investments proved to have been underestimated, but this work is now fully under control and completed.
Connect Systems, the contract manufacturing division is doing well. Total sales are up 42% from 52.3m to 74.2m. This breaks down into 30% internal growth and 12% external growth from the acquisition of Infotron, through which the division is now active on the German market. During the past year, the plants in Vrable (Slovakia) and Oradea (Romania) expanded significantly. In 2004, this activity represented 60% of total IPTE sales volume.
Managing director Huub Baren in summarizing the last year: “For 2004 we look back with mixed feelings. On the one hand, we have the strong growth and profitability with our Connect Systems group. On the other hand, a hesitant market has required us to reorganize our automation activity. General demand for automation projects remains below our expectations, and we do not see any fundamental improvement on the horizon in 2005. For these reasons we have decided to adjust the strategy we have applied until now in the Factory Automation division and not to undertake any further expensive competence extensions. We will be concentrating on our existing areas of expertise to improve profitability. For our automation activity we therefore expect 2005 to be a stable, no-growth year”.
EPP EUROPE 404
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