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Waterford Wedgwood: latest quarter sales level with previous year

Luxury crystal and porcelain ware manufacturer Waterford Wedgwood said 27 January 2004 that worldwide sales for the period 1 October to 31 December 2003 were EUR 241.9 million, equal to the same perio…

Luxury crystal and porcelain ware manufacturer Waterford Wedgwood said 27 January 2004 that worldwide sales for the period 1 October to 31 December 2003 were EUR 241.9 million, equal to the same period of the previous year on a like for like basis. In a press release, Waterford Wedgwood said operating margins improved to 7.7% in the quarter, generated by the successful flow-through of improvements to the company“s fixed cost base as a result of the group“s substantial investment in cost reductions, outsourcing programmes and technology. According to the release, Waterford Wedgwood performed satisfactorily in the Christmas shopping season despite industry sales which were concentrated in the last ten days of December. In the Japanese market, sales were up 11% in the quarter and 6% year-to-date on a like-for-like basis. Wedgwood said it remains the market leader in its category in Japan and the board anticipate further growth in 2004. The group“s U.S. sales were level with the previous year, a creditable performance given uncertainties in the U.S. marketplace, according to the firm. Notable successes in the U.S. included Wedgwood“s Vera Wang at Wedgwood line of luxury giftware and tableware products, All-Clad“s popular Emeril at All-Clad line of cookware, and Waterford“s Waterford Holiday Heirlooms line of luxury Christmas items, all of which grew strongly, the company said. Waterford Crystal said it continues to perform strongly at the high end of the U.S. crystal market, with an 84% market share of crystal giftware sales at price points of USD 100 and above, and an 88% share of crystal stemware sales at price points in excess of USD 30. Trading within Europe was weaker, with Ireland in particular feeling the impact of exchange rates on tourist sales. Rosenthal“s sales, however, dropped only 2% in the quarter. While in the group“s view this was a creditable performance given Germany“s continuing lack of consumer confidence, the company added that there have been encouraging sales trends in the German market in recent weeks. Waterford Wedgwood“s recent strengthening of its capital structure is now complete. A rights issue it describes as “well-received”, along with new bond and senior debt structures gives the group a platform for long-term growth in support of its world-class brands. Net debt at 31 December 2003 stood at EUR 400.1 million, in line with expectations following the one-time capital structure-related cash outflows. The company has put in place a hedging strategy for fiscal 2005 which caps its risk from erosion in the US Dollar value versus the Euro, while maintaining the opportunity for the group to take advantage of US Dollar strengthening over the course of the fiscal year. The Board says it is pleased with the contemporary new products and programmes in the pipeline, including marketing initiatives that are complementary to the global reach and quality of the group“s brands. The company says it is looking forward to growth in sales and in margins as these programmes enter the marketplace. The Board advises that the company has received significant, unsolicited 3rd party interest in the company“s All-Clad cookware subsidiary, the nature of which merits serious consideration. Waterford Wedgwood advised 27 January 2004 that Tony O“Reilly Jr., chief executive of Wedgwood, has strengthened his management team to reflect Wedgwood“s focus on further building and contemporising the brand. Redmond O“Donoghue, Group Chief Executive, commented: “Calendar 2003 ended in satisfactory form for the Group, with even better prospects for the year to come.”

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