Pfleiderer cuts cost to prepare for “difficult” 2009

Wood-based panels manufacturer Pfleiderer has blamed the global financial crisis for a fall in both annual sales and pre-tax profits in 2008 – despite posting a “respectable” return in sales.

The German company saw annual sales drop 3.6% to €1.74bn (2007: €1.8bn), while pre-tax profits fell from €248.7m to €223.7m, causing the EBITDA margin to fall slightly from 13.8% to 12.9%.

Cost-cutting measures, including the closure of its La Baie plant in Canada, helped the company reduce its cost base by €80m – and prepare for a difficult 2009.

“We are convinced that we will be able to gain market share and emerge from this crisis stronger than before,” said chairman Hans Overdiek.

In a statement, Pfleiderer said most of the decline in margin took place in eastern Europe, where the company’s Polish plants faced lower demand for chipboard – a result of strong local currency – and falling prices for both chipboard and MDF.

By contrast, the company’s Russian operations fared much better: sales grew significantly and the increased raw material costs were passed on in full to customers.

And, in western Europe, the EBIT margin improved to a new record level of 11.9%, thanks to the increasing share of high margin products in Pfleiderer’s portfolio and a “significant improvement in profitability” thanks to recent structural measures and strict cost management.

Meanwhile, the company’s US business was hit by the ongoing housing and financial markets crisis, although, thanks to the newly-acquired plant in Moncure, the fall in sales was only 9% to €404.9m.