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y expanding foreign and export ratios during fiscal 2004 in the first instance. Overall, the share
of foreign and export in sales in the Business Segment Engineered Wood came to 56.5 percent.
The increase of 3.1 percent is particularly due to pleasing developments in the Polish market. The
Business Unit East, with its Polish affiliates Grajewo S.A. and Prospan S.A. saw sales increase
in fiscal 2004 by 19.9 percent to 227.3 million euros, thereby contributing around 30 percent to
overall sales of the Business Segment Engineered Wood. High demand in the Polish furniture
market on the eve of Poland joining the EU on May 1, 2004 helped sustain this dynamic development.
The Business Unit East met this stronger demand by making investments which will increase
both the capacity and quality of production at both sites. Exports of Polish production to
other eastern European states, together with the new production plant currently under construction
in Novgorod in Russia, means that Pfleiderer has increased its foreign sales share in
the Business Segment Engineered Wood overall. This Business Segment is now profiting from
expanding market economies in eastern Europe.
In fiscal 2004, earnings before interest, taxes, depreciation and amortization (EBITDA) for the
Business Segment Engineered Wood came to 78.9 million euros, a considerable improvement of
36.5 percent. The improvement of the EBITDA margin by 2.3 percentage points to 10.4 percent
reflects the improved price situation in the German and Polish particleboard markets in the second
half of the year. Earnings before interest and taxes (EBIT) at year-ending 2004 came to 48.4 million
euros (2003: 29.1 million euros).
In October 2004, Pfleiderer Engineered Wood’s Business Unit West introduced a new program
to further increase profitability through optimized procedures and greater customer utility.
Among others, the “PHW 2006” program analyzes the manufacturing and supply chain, as well
as commercial functions and marketing/sales. Our objective is to harness further potential
for increased profitability by improving the production process and reducing complexity.
Key Indicators of Business Segment Engineered Wood
in million euros 2004 2003
Sales revenues 758.9 715.9
EBITDA 78.9 57.8
EBIT 48.4 29.1
Capital employed 376.8 361.1
ROCE (in %) 12.9 8.1
Sales Revenues
2004
2003
EBITDA EBIT
2004 78.9 million euros 2004 48.4 million euros
2003
31
57.8 million euros
2003
MANAGEMENT REPORT BUSINESS SEGMENTS
29.1 million euros
758.9 million euros
715.9 million euros