Bielefeld. The overall economic development as well as the demand for German machine tools remained restrained in the 1st quarter of 2003. GILDEMEISTER was able to start the new financial year according to plan. In the first quarter, the sales amounted to EURO 226.0 million (minus 2% as against to the previous year). Order intake totalled to EURO 229.0 million (-3%) according to expectations. As announced, first quarter EBIT (Earnings before Interest and Taxes) was positive with EURO 2.6 million, and the results on ordinary activities were still negative with EURO -3.8 million. The orders on hand amounted to EURO 331.8 million. This continues to represent a satisfactory basic rate of capacity utilisation.
For the current financial year, GILDEMEISTER anticipates a restrained demand development in the aggregate; for the second half-year from September onwards, we assume an upturn, too. In case of an improved demand situation during the year, our orders on hand for the whole year may total to over EURO 1 billion, and the sales volume could again exceed EURO 1 billion. Due to the steps taken, we continue to expect an overall positive result for the whole year. We will consider payment of a dividend as soon as the group produces an appropriate annual net profit.
According to plan, Group sales in the 1st quarter totalled to EURO 226.0 million, reaching roughly the previous year's level (EURO 231.6 m). Sales abroad dropped by EURO 5.8 million or 5% to EURO 111.7 million. Domestic sales remained constant with EURO 114.3 million. The export ratio was 49%. Starting from the basis of the still satisfactory orders on hand with a range of about three months, and the order intake to be expected during the current fiscal year, we adhere to our forecast that the consolidated sales in 2003 could again exceed EURO 1 billion.
Order intake in the 1st quarter totalled to EURO 229.0 million, being only slightly below the value of the previous year's quarter (-3%). We are above the trend of the industry, which suffered a minus of 5% (as per March 2003). Domestic orders reached EURO 110.1 m; from abroad, we took in orders amounting to EURO 118.9 million. The export share increased to 52% (period last year: 50%). At the spring fairs and in-house exhibitions, we were able to secure 186 orders with an overall value of EURO 35 million. With a significant increase during the 1st quarter, the order intake of GILDEMEISTER Italiana developed particularly well. Based on our innovative machines, we plan to further raise our market share. From today's view, we assume that the order intake can reach more than EURO 1 billion.
As of 31st March 2003, the orders on hand in the group amounted to EURO 331.8 million.
As announced, GILDEMEISTER achieved a positive EBIT (Earnings before interest and taxes) of EURO 2.6 million during the 1st quarter of the current financial year. Results on ordinary activities were still negative with EURO -3.8 million. The annual deficit amounts to EURO 4.3 million. Based on the current planning presupposing an upturn in demand during the 2nd half, we anticipate positive results for the entire year. The second quarter will end with a positive EBIT and a positive results on ordinary activities. We will consider payment of a dividend as soon as the group produces an appropriate annual net profit.
The GILDEMEISTER share has passed its bottom. Until mid-February, our share was quoted on a 4 EURO-level; then the price eased on a weak market as a result of the Iraq conflict. The low was reached on 13th March with EURO 2.91. After the press conference on financial statements of 31st March, the GILDEMEISTER share moved up again to EURO 3.60. However, even the current quotation of EURO 4.65 (5th May 2003) does not reflect the company's value. According to expert opinion, a general turnaround on the equity market will only take place with significant signs of an economic recovery.
On 31st March 2003, GILDEMEISTER had 5,048 employees, including 192 apprentices (state as per 31st Dec. 2002: 5,045). Staff changes ensued from the set-up of the new production plant in China and personnel reinforcement of the Sales and Technical Services divisions. Manpower adjustment actions are directly linked with the business developments of the individual divisions. Expenditure for wages and salaries, including social insurance contributions, amounted to EURO 68.2 million in the 1st quarter.
We continue to pursue our innovation-focussed strategy of technological leadership in the field of cutting machine tools. In implementation, we have adapted ourselves to the development of business activity. During the current financial year, GILDEMEISTER will introduce 10 innovations completing the line structure of our product range.
With their innovations and the expansion of their sales and service organisations, GILDEMEISTER is well-prepared for a market revival during the current fiscal year. We adhere to our assumption that we will largely achieve the business targets announced for entire 2003 even under the continuing aggravated market circumstances.
The management report for 2002 and the 1st quarterly report for 2003 provide detailed information on the development of the GILDEMEISTER group during the current financial year. Further information is also available on the Internet under www.gildemeister.com.
The Managing Board
The interim group financial statements of GILDEMEISTER Aktiengesellschaft have been prepared in compliance with the International Financial Reporting Standards (IFRS). The previous International Accounting Standards (IAS) are part of the IFRS and continue to be valid. All and any comparative figures have been reported according to IFRS. The interim report has not been audited.
Note: We will be glad to send you the complete interim report on the 1st quarter of 2003 upon request.