This growth can be attributed to strong core fields of business, such as household goods, specialty glass tubes and pharmaceutical packaging, but also solar energy, an extremely promising venture for the future. For fiscal 2004/2005 that ended on 9/30/05, Schott achieved sales of 1.925 billion Euros and more than tripled its earnings from 16 million to 54 million Euros. The modernization process that was introduced only two years ago is now yielding results. Today, Schott is positioned to work more effectively, act in a more flexible manner and, most importantly, achieve substantially higher profits, said Dr. Udo Ungeheuer, Chairman of the Board of Management at the companys annual results press conference held in Frankfurt/Main.
SCHOTT is striving to further expand its position as one of the worlds leading technology groups in the fields of specialized glass and related high tech materials. To achieve this, the company will be investing the record sum of 325 million Euros in fixed assets during its current business year. Half of this amount will be invested in company sites inside Germany. The construction of two plants that will manufacture large format glass substrates for TFT-LCD applications in Ochang/South Korea and in Jena, continued expansion of capacities in the field of photovoltaic, increasing the importance of Mainz/Germany as a center of competence for glass-ceramic, as well as the establishment of a new manufacturing facility for specialty glass tubes at the Bavarian site in Mitterteich/Germany are but a few of the companys most important projects.
SCHOTT also views establishing significantly greater presence in Asia to be of paramount importance. A large number of the companys customers manufacture their products here at the same time that market conditions in Western Europe are showing recessive tendencies. SCHOTT currently operates 7 manufacturing sites, 9 sales offices and employs some 2,000 employees in Asia. By the year 2010, we will have increased the share that Asia has today in total group sales from the current figure of 17 percent to 30 percent, Dr. Ungeheuer explained in describing the objective.
In addition to strengthening its existing core businesses, including household appliances (Ceran glass-ceramic cooktop panels and processed flat glasses), specialty glass tubes and pharmaceutical packaging (ampoules, vials and syringes), as well as components for the automotive industry, SCHOTT intends to systematically expand its presence in industries for the future, such as solar energy and high quality thin glass for use in flat screen display monitors.
SCHOTT is currently the only company in the world that offers products for use in all types of solar technologies, including photovoltaic, solar thermal for use in providing hot water and support for room heating, as well as solar thermal power plants that generate electricity centrally. Following the full acquisition of RWE SCHOTT Solar, the former joint venture in the field of photovoltaic, but also the receipt of orders to provide a total of 43,000 receivers for two solar thermal power plants located in the United States and Spain, SCHOTT has substantially improved its market position in the area of solar energy. The technology group is also looking to assume a leadership position in the market for display glass that is currently experiencing growth all over the world. The company is known to be the only European vendor capable of producing up to 0.7 millimeter thin glass substrates from borosilicate glass that is free of alkali, using a float technique. Investments in hot manufacturing at the site in Jena will now reach 110 million Euros and result in 170 new jobs. An additional 90 million Euros is being invested in a processing center for display glasses in South Korea.
Fiscal Year 2004/2005: Annual Profit more than Triples
For SCHOTT, fiscal 2004/2005 was quite a successful year. Despite the fact that sales declined slightly to 1.925 billion Euros due to portfolio adjustments, revenues from core businesses either remained stabile or increased slightly. The decision to rigorously focus on high growth markets resulted in a substantial improvement in overall profitability. Net income for the year increased from 16 to 54 million Euros. This means the company succeeded in more than tripling its previous performance. The positive development of business also expressed itself in a substantial improvement in the companys EBIT, which increased by 38 million Euros to 96 million Euros. Cash flow before taxes on profits reached 306 million Euros, a figure 9 % higher than in the previous year. It now represents 15.9 % of total sales. The group currently employs a staff of slightly fewer than 17,000 at sites all over the world. Nearly half of all company employees are based in Germany.
During the past fiscal year, investments in fixed assets increased by 28 % to 230 million Euros. With that, they exceeded depreciation by 55 million Euros. The company was also satisfied with having increased its equity-to-assets ratio by 4 percentage points to 33 %. Our solid financial structure provides us with the backbone we will need in order to continue along our path to growth at full speed, Dr. Ungeheuer said at the annual results press conference.