PistenBully defies economic crisis

In spite of the tough 2006/2007 winter, group sales for fiscal year 2007/2008 proved robust at EUR 175.7 million. Once again the worldwide market share was increased in a difficult market. To date, the current fiscal year has been distinguished by the greatest number of new orders in history.

Management Board report – fiscal year 2007/2008
Jens Rottmair and Alexander Schöllhorn discussed the reasons for the sales and profits decline. With roughly 20% lower market volume, the company posted sales revenue losses of only 12%, and a decline in sales volume of a mere 4%. This result should be emphasized as particularly positive for the market leader, since typically a market leader is severely affected by a market decline. Kässbohrer Geländefahrzeug AG, however, has once again expanded its market leadership with its PistenBully. The worldwide market share amounts to 65%, to which the outstanding worldwide marketing and service organisation made a significant contribution. The company had acquired another Finnish competitor in the 2007/2008 fiscal year and again contributed to a further consolidation of the market.

From the snow to the beach: The small but smooth BeachTech division is likewise a market and technology leader with its equipment for beach cleaning. In this market, numerous, mostly regional suppliers make up the competition worldwide. Kässbohrer Geländefahrzeug AG sees more growth potential in the coming years for BeachTech equipment, particularly on the American East Coast.

The Management Board also reported a decline in the group’s profits from EUR 14.9 million to 8.9 million. The previous year’s results included securities earnings for the Ratrac subsidiary of EUR 3.5 million. In addition to this effect, the decline in sales also contributed to the decline in the group’s profits. Other detrimental factors were low margins due to increased competitive pressure, unfavourable exchange rates with the dollar, as well as expenses from the Finnish acquisition, which were not offset with any income from the 2007/2008 fiscal year.

Positive outlook for 2008/2009
The first quarter of the current 2008/2009 fiscal year ending in December 2008 was very satisfactory. The company posted the greatest number of new orders in its history for the current season. The group’s sales volume of EUR 108.3 million and the group’s profits of EUR 17.9 million exceeded those of the previous year by 8% and 8.5%, respectively. Reasons behind the jump can be found in the improved general conditions compared to the previous year. The very good winter of the previous year 2007/08 brought a good season to most ski regions, so that investment activity for the following winter season is assured. As of 31 December 2008, higher new vehicle sales were seen compared to the previous year. Furthermore, the early and, up to today, continuously good winter in the winter sports regions has had a positive impact on service and replacement parts sales. Long operation times for the vehicles result in more maintenance and replacements of worn parts. The Management Board has a positive overall outlook for the current fiscal year. The factors mentioned, along with the currently favourable dollar exchange rate, will positively influence sales and profits despite a tough worldwide economic environment.

The Management Board expects a sales volume of well over EUR 180 million and approaching the record 2005/2006 fiscal year. For profits, the target is for an EBIT margin in double digits (EBIT margin 2007/2008: 8.8%).

Compensation payment/guaranteed dividend
Irrespective of the net income, outside shareholders receive a guaranteed dividend from the existing profit and loss transfer agreement with LuMe Vermögensverwaltung GmbH of EUR 1.99 per share, i.e., 16 cents per share more than in the previous year. The shareholders thus benefit from a changed corporate tax rate for 2008, the reduction of which is immediately reflected in an increase of the guaranteed dividend for the 2007/08 fiscal year.

Annual Shareholders’ Meeting
Attendance at the Annual Shareholders’ Meeting was around 87% of the share capital of the company. According to the Management Board’s report, the Chairman of the Supervisory Board opened a general debate on all points of the agenda. The agenda of this year’s Annual Shareholders’ Meeting included the normal resolutions on discharging the Management Board and the Supervisory Board, as well as the election of the auditor for the current fiscal year.

The Management Board and Supervisory Board were discharged by a majority vote.

In addition to long-time, loyal small shareholders of the company, the two most important German share associations were also represented. Deutsche Schutzvereinigung für Wertpapierbesitz e.V. represented by Mr. Siegfried Pfündl, and Schutzvereinigung der Kapitalanleger e.V., represented by Mr. Dieter Tassler. Both share associations praised the good, positive company performance and singled out the efforts of the Management Board and employees.

In the past, LuMe Vermögensverwaltung GmbH had reported examining different strategic options with regard to its holding in Kässbohrer Geländefahrzeug AG. Due to strong interest from potential domestic and foreign investors, different possibilities were explored. At this time, no investors have been secured. The Management Board took a firm stand at the Annual Shareholders’ Meeting and asserted that Kässbohrer Geländefahrzeug AG will remain competitive due to its positive growth, its strong market position, and its loyal and dedicated employees—independent of the shareholder structure—and will strengthen its strong position. The Management Board is confident that potential investors will recognise the promise of this company, and it looks confidently into the future.