Mallorca by Land, Air and Sea

France. Rodriguez Group changes strategy as pre-owned yacht sales slump

Monday, 20 November 2006

It should be noted that, for the first time, the results are presented in accordance with IFRS and particularly the recognition of new yacht sales in line with their state of completion and no longer on delivery, as previously.

Rodriguez Group realized sales of € 474.7 million at September 30, 2006, in line with previous year sales (474.9 million).

Group 2005/06 fiscal year sales may be analyzed by business segment as follows: New Yacht sales amounted to € 328.0 million, up 9.6 % over the same period last year; Pre-Owned Yacht sales amounted to € 107.0 million, compared to € 139.6 million (down 23.3 %) over the same period last year. The decline primarily resulted from a less dynamic end-of-year performance than expected from this business segment; Yacht Services and Merchandise sales were € 39.7 million, up 11.2 % over the same period last year.

Cumulative Sales Order Backlog (current and subsequent years)

Order Backlog published in November 2005 (€ millions)

Order Backlog
IFRS November 2005 (€ millions)

Order Backlog
IFRS November 2006 (€ millions)

379

334*

372

* order backlog of € 379 million restated by € 45 million corresponding to sales recognized by stage of completion at September 30, 2005

The recognition of sales by stage of completion requires the recalculation of the order backlog every year by deducting the sales recognized by stage of completion at September 30, of the previous year.

The IFRS order backlog at November 1, 2006 was thus € 372 million, up 11 % from € 334 million in November 2005

The Chairman of the Management Board, Alexandre RODRIGUEZ, commented on the publication of 2005/06 sales: “Our New Yacht sales, as well as our Yacht Services and Merchandise operations performed satisfactorily in 2005/06. However, Pre-Owned yacht sales were clearly below objectives.

The losses incurred and the provisions established in respect of the Pre-Owned yacht business will lead the Group to post a significantly lower 2005/06 net profit than in the previous fiscal year.

As a result, we have reviewed our strategy and developed a Strategic Reorientation Plan, which will be presented along with annual results and will have the following objectives: - to significantly downsize the Pre-Owned Yacht business, by sharply limiting trade-in on New Yacht sales; - to generate very significant free cash flow; to increase the Group’s share price.

2006/07 New Yacht sales guidance shall also be disclosed upon publication of annual results.

Following a 2005/06 transition fiscal year, we are convinced 2007 will mark the beginning of a new development phase for the Group, focused on profitability and cash flow”.


Publication of annual results: December 13, 2006 after close of trading

Last Updated ( Monday, 20 November 2006 )