Asian Bamboo AG / Key word(s): Quarter Results 14.05.2013 06:49 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Hamburg, 14 May 2013 - Asian Bamboo AG ('Asian Bamboo', 'the Company', ISIN: DE000A0M6M79, ticker symbol: '5AB', ADR ticker symbol 'ASIBY'), an integrated company in the bamboo industry, regrets that the conditions for running an agriculture business in Fujian province remained very challenging in Q1 2013. The results for the period were as follows (percentage numbers are year-on-year comparisons): * Revenue decreased 79% to EUR 5.2 million (Q1 2012: EUR 24.8 million) * Gross profit including FVBA-changes* decreased 69% to EUR 2.9 million (Q1 2012: EUR 9.1 million), equivalent to a gross profit margin including FVBA-changes of 55% (Q1 2012: 37%) * Net loss was kEUR 12 (Q1 2012: net profit EUR 7.2 million) * Operating cash flow before changes in working capital was EUR 0.6 million (Q1 2012: EUR 10.6 million) * Net cash from operating activities was negative EUR 3.2 million (Q1 2012: positive EUR 7.6 million) At the end of Q1, the Company's balance sheet remained strong (comparable numbers are 2012 year-end numbers): * Biological assets were EUR 89.3 million (2012: EUR 83.9 million) * Lease prepayments were EUR 202 million (2012: EUR 193.4 million) * Cash and cash equivalents were EUR 37.2 million (2012: EUR 38.6 million) * Total assets were EUR 364.1 million (2012: EUR 348.4 million) * Total bank borrowings were EUR 48.1 million (2012: EUR 46.5 million) * Total equity was EUR 303.3 million (2012: EUR 288 million) * Total liabilities and equity were EUR 364.1 million (2012: EUR 348.4 million) * FVBA is an abbreviation for gains/(losses) arising from changes in the fair value less estimated costs to sell of biological assets Strategic review Over the last two years the Management Board has tried various initiatives to improve the harvesting yields. However none has proved successful. Therefore the Management Board has decided to implement a turnaround plan, which involves fundamental changes to the Company's business model. In summary the Company is decentralising decision making and aligning the remuneration paid to employees involved in plantation management with the profitability of the plantation management centres, which are the main source of revenue for the Group. The turnaround plan consists of the following key components: * Organisational restructuring * New incentive scheme * Year-end review of the Company's operations Organisational restructuring The Company's business will be split into three areas which will be managed independently. The three areas are - plantation management (including harvesting and sales of bamboo shoots and bamboo trees), bamboo shoot processing (including production and sales of processed bamboo shoots) and bamboo fibre processing (including production and sales of bamboo fibre). The plantations will continue to be managed by the subsidiaries ('plantation management centres') operating where the plantations are located (Shaowu, Longyan, Shunchang, Wuyishan and Sanming). However, instead of reporting directly to the Company's CEO they will now report to the plantation management centre in Shaowu ('Shaowu'), which will have the overall responsibility for decisions for and co-ordination of the Company's plantation management activities, including the recruitment of farm labour and reclamation work. Shaowu currently manages the Company's largest plantation management centres and also has the longest and most successful track record in plantation management within the Group. Due to the Company's large plantation size and the complexities of running a plantation business, the Management Board believes that this structure will simplify and speed up decision making, generate synergies and increase the plantation yield, particularly from the most recently leased plantations. It will also allow the Company's CEO to focus on the bamboo fibre processing business, which he will manage directly, and on other matters of strategic importance. The bamboo shoot processing business, which is a stable and well established business, will be managed by the team at Fuzhou Xinrixian Food Development Co., Ltd. New incentive scheme Complementing the decentralised decision-making process described above, the plantation management centres ('the centres') will take part in an incentive scheme, which will align employee remuneration more closely with the profitability of each centre. In practice it means that all employees working for the centres will receive a fixed yearly salary and a variable bonus, paid at the end of the year, if certain profitability targets are achieved. When calculating the profitability all costs related to plantation management will be included and group overhead costs excluded. The Management Board believes that this incentive scheme will motivate these employees to look for creative and cost efficient solutions, which will in turn improve revenues and net profits of the centres, which are the main source of revenue and profits for the Group. Year-end review of the Company's operations At the end of the year the Management Board and the Supervisory Board will review all aspects of the Company's operations. In this context the Management Board wishes to emphasise that the structural issues, such as increasingly unpredictable weather patterns and the decreasing supply of farm labour, will not go away as a result of this turnaround plan. However, the Management Board believes that decentralised decision making and stronger and clearer incentives for the employees involved in plantation management will yield positive results. In the unlikely event that the situation does not improve by the end of the year, the Management Board and the Supervisory Board will consider selling assets. Such an asset sales programme could go on for a longer period of time and the worst performing assets would be sold first. The company's key assets are of course the plantation leases. Financial situation The financial situation remains stable. The Management Board forecasts close to positive operating cash flows this year and should the situation not improve before the end of the year, the Company will then initiate an asset sales program which would further improve the financial situation of the Group. Guidance The Management Board expects the overall operating situation to remain challenging for the rest of the year. Therefore, the Management Board forecasts revenues of at least EUR 50 million and close to positive operating cash flows in FY 2013. For enquiries, please contact: Asian Bamboo AG: Peter Sjovall +852-9385 3868 Chief Financial Officer [email protected] Anja Holst +49-(0)40 37644 798 Investor Relations Director [email protected] 14.05.2013 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: Asian Bamboo AG Stadthausbrücke 1-3 20355 Hamburg Germany Phone: +49 40 37644 798 Fax: +49 40 37644 500 E-mail: [email protected] Internet: www.asian-bamboo.de ISIN: DE000A0M6M79, DE000A0M6M79 WKN: A0M6M7, A0M6M7 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------