Bang & Bonsomer's financial year 2007 and outlook for the year 2008

Bang & Bonsomer Group continued its growth pattern also in 2007. The turn-over increased by 15% to 148 M€ and the total sales by 19% to 226 M€. The growth in basically all markets was fuelled by high demand as a result of the unusually strong economic situation. We especially wish to point out the good results achieved by our subsidiaries in Estonia. Also Banmark obtained a very good result. The development in Lithuania, Latvia and Belarus was positive. Sales in Russia increased drastically, but at the same time we had substantial investments in facilities and personnel, which adversely affected the result.

Increasing raw material prices, high cost inflation in emerging markets, IT investments and re-structuring costs, however, took its toll and weakened the group profit, which fell short of the preceding year’s level. 

After a slow start during the first quarter of 2008 the business took off in April. Compared to last year’s performance we are performing better after the first five months. Thanks to strict cost control we have gained on the EBIT and favourable exchange rates have positively affected the profit level. 

The business outlook is, however, becoming somewhat more conservative in the wake of the year. The outlook for some areas, such as construction and paint, is becoming gloomier in most of our markets, except Russia. Increasing interest rates are likely to curb new investments, also in the emerging markets and consumer confidence is likely to decline over the year.

The increasing prices of raw materials, particularly the oil based ones, pose a real challenge for the industry. The higher costs have, obviously, to be passed on along the chain. To pass on several consequential price increases to the customers is a tough task for the sales personnel.

Despite the less positive signs in the economy we still believe that no major slump in the economies will occur during 2008 and that the set targets can be achieved. During the first five months of 2008 we have followed our plan and we count on being able to achieve our goals for the whole year, even though they are challenging. Our main focus for 2008 is to improve the profitability. 

I wish to thank all our customers and suppliers. Have a nice summer and relaxing vacation! 

Johan von Knorring

President, CEO