Mecalux's rate of growth remains steady as it maintained a 12% sales increase and lifted profit by 18%. In the third quarter, the company reached 496 million euros in sales and 40 million euros in profit. Sales amounted to 444 million euros and profit was 33 million euros in the same period last year. Mecalux attributes the strong growth to the positive performance of all markets. Of particular note is the performance of markets in Eastern Europe, with growth by the Polish subsidiary of 73% and the excellent performance of countries such as Brazil, where the Mecalux Group company Esmena experienced growth of 83%. Mecalux also feels its commitment to the automated warehouse division involves ongoing growth in all markets due to strong current demand for automation by many companies.
Improvement in Profitability and Debt Ratios
EBITDA also grew by 5% to reach 71 million euros, compared to 68 million euros in the same period of the previous year. Pre-tax profit was up 13% to 49 million euros. The increase in net profit was higher, at 18%, reaching 40 million euros, although the Mecalux Group has applied and activated tax deductions in its Polish subsidiary related to investments made in Poland.
The Group's net debt fell by 89% to 19 million euros, compared to 175 million euros in the same period last year. Net worth also rose, from 218 to 423 million euros, a climb of 94%. The ratio of net debt to assets was 0.05 while the ratio of net debt to EBITDA was 0.27. Here it is important to remember the capital increase with a preemptive subscription right that took place on 18 July and which saw Caja Madrid take possession of 20% of the Group's shares. The total paid out by Caja Madrid was 168 million euros.
Sales by Geographical Area
Mecalux upped its sales in all markets, the highest growth being in MERCOSUR, with 60%, and Eastern Europe, with 64%. In Southern Europe sales climbed 2% and in the NAFTA area they were up 10%.
The Situation in Europe
Turnover in Spain, France, Italy and Portugal increased by 2%. The markets that performed best were Portugal and France. However, the situation invites caution as orders in these areas fell by 7%, probably as a result of the current economic situation.
The performance of markets in Central and Eastern Europe, where turnover increased by 64%, remains very positive. The Polish subsidiary increased its sales by 73%.
The Situation in the NAFTA Area
The increase in the NAFTA area was 10%, with sales that accounted for 14% of the Group's total. In Mexico, sales were up by 50% in local currency, which would explain the overall growth in the area. In the United States, the Mecalux subsidiary was down 9%.
The MERCOSUR Area
Sales in South America increased by 60%. In Argentina, where the Mecalux Group continues to be the market leader, sales in local currency rose by 52%. In Brazil, sales increased by 83% in the third quarter. Finally, sales in Chile increased by 7% in local currency.
Next Extraordinary General Meeting of Shareholders
The Company plans to hold an Extraordinary General Meeting of Shareholders on 4 or 5 November 2008, at first or second call, respectively. At the meeting, the appointment of two members of the Board of Directors, Mariano Pérez Claver and Ángel Córdoba Díaz, will be proposed by Caja Madrid, and there will be a proposal for the distribution of an extraordinary dividend of a gross sum of 0.16 euros per share, charged to the available reserves, a total sum of 5,377,240 euros (the total of shares in the company's capital is 33,607,750) as well as an increase in paid-up capital, in a proportion of 1 new share for every 10. The increase that led to the admission with 20% of Caja Madrid was notified to the Spanish Stock Exchange Commission on 3 June and endorsed on 14 July. The admission of Caja Madrid provides important support for the strong process of growth and expansion in international markets that Mecalux is undertaking.