Group - L. Possehl & Co. mbH

EARNINGS POSITION IN THE TRADING DIVISION
in e million 2007 2006 Change
Sales 291.4 265.2 26.2
EBT 6.5 7.7 -1.2
Capital expenditures 0.5 1.1 -0.6
The complete reorganization of our trading business on the
American continent was implemented in 2007. At the beginning of
2008, the legal separation from our former partners was also arranged.
Furthermore, we have decided to discontinue the business activities
of GeoCrete B.V. in the Netherlands and the subsidiary in Greece. The
financial figures presented here for 2007 fully reflect the negative impact
arising from these steps. From now on, Possehl Erzkontor GmbH
will be solely responsible for the global trading business with fireproof
and non-fireproof materials. We continue to be represented on the
American continent with one subsidiary.
one-time Expenses depress Earnings
Net sales from the International Trading business rose by e 26.2
million or 9.9 %. Higher prices for raw materials were decisive for this
increase. Earnings before taxes for the division declined due to onetime
expenses to e 6.5 million after e 7.7 million in the previous year.
The Lübeck-based Erzkontor Group, however, was able to improve its
earnings from the previous year.
Fireproof Business: The economic conditions for our fireproof
activities were favorable last year. The European steel industry achieved
1.5 % production growth over the previous year. The rate of increase in
the German market was 2.8 %. The level of steel production led to good
capacity utilization for the fireproof industry.
22
Prices for almost all raw materials rose sharply during the reporting
period. The price increases for almost all essential products ranged
between 40 % and 80 %. Decisive here were rather high purchase
and freight prices as well as the restrictive export policies of the
Chinese government. Our trading business was able to benefit from
this development, particularly through higher profit margins.
Metallurgy: The metallurgical division grew at a double-digit rate
in the reporting year, but with a lower gross earnings margin. While
the trading business with raw iron clearly expanded both on a unit and
price basis, net sales and gross earnings declined with iron sand, raw
bauxite, and petroleum coke.
Plastics: The development of the trading business with plastics
was charac terized again last year by substantial price increases as a
result of a continued rise in the price of oil and a concomitant shortage
of tradable material. Despite constant volumes, sales increased by 8 %
from the previous year.
EARNINGS POSITION IN THE SERVICES DIVISION
in e million 2007 2006 Change
Sales 11.3 11.3 0.0
EBT 1.6 1.4 0.2
Earnings improvement with Constant Sales
The Services business with insurance, environmental protection
(tank protection, renovation, gravel, and disposal), and freight services
achieved sales of e 11.3 million, the same as in the previous year.
Earnings before taxes rose by e 0.2 million to e 1.6 million. This
growth came primarily from environmental protection and broker
activities. The latter benefited from higher freight fees and broker
activities. The return on sales in the Services division improved by
1.2 % percentage points to an encouraging 13.9 %.