Trading Update
3 July 2009
Fiberweb plc, the international nonwovens fabrics producer, is today publishing a trading update, ahead of interim results for the six-month period ending 30 June 2009, which are expected to be announced on 6th August.
Since the issue of the Interim Management Statement on 30 April 2009, the Company has continued to perform in line with the Board's expectations.
As expected, volumes in the first half have continued to show weakness overall, with a decline compared to the same period last year consistent with that reported in the IMS.However, underlying(1) margins have continued to improve due to the ongoing benefit of cost reduction programmes, improvements in operating efficiencies and lower raw material prices at the beginning of the year resulting in a first half in line with expectations.
Civil engineering markets have seen a stronger performance with Terram benefiting from innovation and increased sales resource. In Europe, Fiberweb is expanding its position in specialist medical fabrics while the European consumer fabrics business has won additional volumes for hygiene applications. Cost reduction and capacity rationalisation initiatives within the European consumer fabrics business are on-track and the new Italian spunbond line is now fully operational.
Industrial markets have remained challenging due to the generally poor economic environment, while Airlaid markets in Asia have been particularly impacted by poor volumes at a major customer, although some recovery is expected here in the second half.
Strong cash generation in the first half as well as continued improvements in working capital and the benefits of US dollar and Euro depreciation against sterling have reduced net debt to less than £130 million. In addition, while the Group benefited from the weak polymer prices in the first half, the recent rise in oil prices is beginning to affect raw material costs which may have some impact in the second half.
The proposed Joint Venture with Petropar S.A. announced on 26 June is expected to complete on 31 July and, subject to shareholder approval, will create a leading producer of spunbond nonwovens in the Americas, with the potential to serve customers more effectively from its leading asset and technology base. Implementation of the Joint Venture, as noted in the announcement made on 26 June, will initially increase net debt as a result of the transfer of Fiberweb plants in Mexico and the USA although it will remain within management expectations.
(1)Underlying profit measures are before restructuring costs and other non-recurring items.
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For further information please contact:
Fiberweb plc
0208 439 8594
Daniel Dayan, Chief Executive
Daniel Abrams, Chief Financial Officer
Weber Shandwick Financial
0207 067 0700
Terry Garrett / James White / Katie Matthews