PAPER
MERCHANTING
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OVERALL
BUSINESS RESULTS
PaperlinX is one of the world’s largest global paper merchants, linking customers and suppliers through a global network of locally-focused fine paper merchants. Providing customers what they want, when they want it, backed up by global scale, and an expanding offering in Sign and Display, Industrial Packaging and Graphics.
We stock and market own branded paper, and we distribute well known mill brands in office, commercial print, printing and publishing paper. We offer a diverse range, superior product knowledge and technical expertise. We provide professional and timely solutions, and ongoing support until the job is completed.
We offer supply chain assurance that the wood fibre used in the paper we sell is sourced from sustainably managed forests. We support independent certification systems, such as the FSC accreditation process and the Programme for Endorsement of Forest Certification (PEFC).
Merchants Overall Results
Paper Merchanting produced an EBIT of $192.4 million, down 6 per cent, with underlying EBIT of $172.9 million, down 16 per cent. Overall, Paper Merchanting has continued to produce adequate returns in this difficult environment, with clear potential for upside from any improvements in the current market conditions. The total Merchanting return on average funds employed was 11.4 per cent.
Paper Merchanting Overall
| Year June 2008 |
Year June 2007 |
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|---|---|---|---|
| Sales volume | ’000 tonnes | 3,716 | 3,764 |
| Sales revenue | A$m | 6,816 | 7,159 |
| Earnings before interest and tax | A$m | 192.4 | 205.2 |
| EBIT/Sales ratio | % | 2.8 | 2.9 |
| Return on average funds employed | % | 11.4 | 11.9 |
- Overall sales volume for Paper Merchanting was down 1 per cent due mainly to lower volumes in the UK and NW Europe (mostly indent and commodity uncoated) and the divestment of the Western Canadian business.
- The EBIT/sales ratio declined slightly (2.8 per cent versus 2.9 per cent) largely due to the weaker US market.
- Growth in Sign and Display, Graphics and Industrial Packaging revenue was around 3 per cent in source currency, with these non-paper businesses now accounting for 17 per cent of gross profit.
- Sales revenue for the total Paper Merchanting business was down 5 per cent (flat in constant currency) and EBIT was down 6 per cent, but up 2 per cent versus 2006.
- Average working capital was $88 million below prior year and the average working capital to sales ratio declined from 16.1 per cent to 15.6 per cent.
- The return on average funds employed was 11.4 per cent, above the cost of capital.