Operating profits at Antalis were down by almost a third in Q1, but the merchanting group said that its business in the UK had “held up well”.
Sales on a like-for-like basis (and excluding the South Africa and Botswana subsidiaries that were sold last year) were down 3.7% to €551m (£476.5m) in the first three months of the year. Operating profits fell by 27.7% to €9.5m, with operating margins down from 2.3% to 1.7%.
Gross margins were maintained at 24.4%.
EBITDA (earnings before interest, taxes, depreciation and amortisation) was down 18.3% to €15.1m.
In a brief update about its future ownership following the bankruptcy of major shareholder Sequana, Antalis said: “The process of setting up a new shareholding structure is progressing according to plan with the support of our advisors.”
Antalis reported that paper volumes declined by about 7% during the period, with economic uncertainty and the slowdown in Europe contributing to the reduction.
The receivership of the Arjowiggins Graphic papermaking operation, which has resulted in the closure of one of three mills in France, also caused disruption to the supply of coated and recycled papers and, especially in France, “hit sales significantly”.
Separately, the Arjowiggins Creative Papers mills at Stoneywood and Chartham in the UK continue to trade and remain up-for-sale. Administrators from FRP Advisory have been working with a preferred bidder for almost a month. A spokesman told PrintWeek there was no further update on the sale as of this morning (25 April).
The Creative Papers range includes Conqueror, Keaykolour, the Curious Collection and Pop'Set.
On a geographic basis, Antalis reported that sales in its main European markets including the UK and Ireland, Germany, Austria and France were down 5.3% to €288m, with the €15.8m reduction mainly reflecting the decline in paper volumes and the French hit due to the Arjowiggins Graphic situation.
“Business in the UK held up well,” Antalis stated, and said the same applied to its Visual Communication sign and display operation, despite the impact of Brexit uncertainty on UK retailers.
Sales for the rest of Europe slipped by 1.6% to €227.1m.
Antalis also announced that Steve McCue, who has been regional finance director at the UK & Ireland business for more than a decade, has taken over as chief financial officer of the group. He replaces Xavier Ray-Contancin who has left the business to “take a new direction in his career”.
A spokesman said a search was underway for McCue’s successor: “Steve remains a director of the UK & Ireland business and will oversee the formal elements of the role, with David Hunter, regional managing director – taking a more active role in the day-to-day support of our experienced finance teams in the interim.
“The recruitment process for Steve’s successor is advancing well and we’ll make an announcement on his successor in due course. Everyone in the UK & Ireland business is delighted for Steve, and we are proud that another member of the region has been promoted to the group board, it’s testament to the strength of our business.”
Antalis forecasted that sales for the full year were likely to decline by 3%-4%, and it expected EBITDA margins to be between 2.7% and 3.1%.
The expectation is that paper market to continue to contract “amid continuing economic uncertainty”.
“The decline in volumes will be exacerbated by the impact of the demise of Arjowiggins Graphic on Antalis’ Papers businesses. However, Antalis is stepping up the launch of new product ranges and this is already enabling it to provide its customers with premium alternative solutions,” the firm stated.
It also expects to see continued positive momentum at its Packaging wing, which is growing in most countries.
Antalis will hold its Annual General Meeting on 28 May.