Nuance reports strong sales but profits fall

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The Nuance Group has announced its full-year results for 2004, revealing sales growth but a fall in profits linked to restructuring costs and increases in concession fees

The Nuance Group recorded sales of SFr1.75bn ($1.46bn) in 2004, an increase of 4.6% compared to 2003. Comparable sales for continuing operations showed a 9.7% increase to SFr1.57bn ($1.3bn).

Reported operating profits or EBIT (earnings before interest and taxes) fell 20% to SFr25.9m ($21.6m). But Nuance stressed that, when restated to exclude the impact of non-recurring restructuring costs, EBIT increased from SFr22.5m ($18.7m) to SFr27.4m ($23m).

Nuance said the increase in comparable sales was largely driven by strong passenger volumes in the Asia/Pacific region, reflecting recovery after SARS in 2003 as well as growth in the market. Volumes increased in the US and Canada, and growth in Europe was "marginally higher" than in 2003.

A Nuance statement said: "Profitability across the group (after restatement to exclude one-off restructuring costs, incurred mainly in Europe) was positively impacted by reductions in both personnel costs and other operating expenses. These positive impacts were only partially offset by an increase in concession fees driven by passenger-based contracts and high passenger increases at some airports."

Nuance said it was particularly pleased with the performance of its joint-venture operations in Portugal, Turkey, Hong Kong and Singapore, which all reported increased sales and profitability.

The Nuance Group president and CEO Roberto Graziani said: "Despite challenging market conditions the group posted a satisfactory operating profit in 2004 and further consolidated its position as the world number one in the travel-retail field."