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In the first half of 2014/15, Datacolor AG increased consolidated net sales by 2% (in local currency terms 6%) to USD 34.4 million (H1 2013/14: USD 33.7 million). Operating earnings (EBIT) declined to USD 2.2 million (USD 2.5 million) mainly due to currency effects. Net profit for the period was USD 1.5 million (USD 2.2 million). Datacolor is debt-free and has a net cash position of USD 22.5 million (September 30, 2014: USD 28.5 million) including financial assets of USD 11.5 million. At 62.5% (60.3%) the equity capital ratio remains very solid. The average headcount rose from 359 to 397 as a result of a significant number of recruitments in the research and development department as well as in the marketing and sales organization.
Datacolor has made a determined drive to consolidate its leadership position in its core markets (i.e. the textile and apparel industry and imaging) and to further enhance its standing as a global leader in digital color management solutions with a broad range of software, instruments and customized services for the precise measurement and communication of color. The European market continued its recovery in the first half of 2014/15. The region contributed 39.5% (34.7%) to Group sales. Sales in the Asia-Pacific region were at the previous-year's level and accounted for 31.0% (32.1%) of Group sales, reflecting the soft investment climate in individual markets. The Americas region reported net sales of USD 10.1 million (USD 11.2 million), not quite matching the figure for the first half of 2013/14, which was strengthened by various large orders from the paint industry. The percentage of net sales attributable to North and South America was at 29.5% (33.2%). On the positive side, the Group's newly established sales and service company in Brazil reported an encouraging increase in sales and is also having a direct impact on distribution in South America.
As part of the process of implementing its corporate strategy, Datacolor is pursuing a clear goal of further expanding its sales and service organization in growth markets. For instance, as of the second half of the current financial year, sales and services for Italy will be handled directly, enabling Datacolor to tailor its operations even more closely to individual customer needs and guarantee top-tier, first-hand services and support. Datacolor enlarged it portfolio of customer-specific color matching software solutions through the acquisition of Italian software specialist Media Logic. Customers in the retail paint industry will benefit not only from more efficient tinting systems, but also from a larger sales organization in Italy. The successful integration of support and service into the sales organization and the strategic organizational adjustments made in the last years have played a major role in increasing efficiency and strengthening Datacolor's position in what continues to be a challenging international market and currency climate.
The existing product portfolio was systematically expanded in the first half of 2014/15 to address the needs of Datacolor's most important core and growth markets. With “Check 3.0” the company launched a portable quality control measuring device for customers in the paint, dye, plastics and textiles industries. Furthermore, Datacolor launched “Match Textile 2.0”, a significant upgrade to its successful formulation software for color professionals in the textile industry. Not only do the extended capabilities satisfy the rigorous quality standards of the textile industry, the software's enhanced efficiency will also translate into long-term cost savings for the customers. The first half also saw the roll-out of Datacolor’s modular, user-friendly color management software “Paint 2.0” for paint retailers. The entire workflow from color search and grade matching to physical dispensing can be managed simply, accurately and fast.
Datacolor also has launched the fifth generation of its successful Spyder family, a convenient-to-operate color management solution for the retail market. “Spyder 5” calibrates monitors to industrial color standards and enables users to accurately reproduce colours, making image processing much simpler and faster.
Outlook
New product launches, efficiency gains by simplifying internal processes and a strict cost management will help Datacolor to successfully overcome the challenges posed by volatile currency movements and by the global economy in the second half of 2014/15. Assuming that economic conditions in its core markets are stable and the international currency situation does not worsen, Datacolor is aiming to achieve a further increase in net sales in the second half of the current financial year. Operating margins will again be impacted by sizable investments to reinforce Datacolor's leading position in the consumer goods market for imaging products and to develop new industrial markets.
The full half year report 2014/15 is available on: www.datacolor.com/company/investor-relations/reports/
Lucerne, May 7, 2015
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