Pfleiderer Accelerating Cost Cutting as Sales Fall

Neumarkt, Germany, Nov. 11, 2008--Pfleiderer AG is launching more cost-cutting measures after the financial market crisis eroded its third-quarter sales and made price increases difficult.

The maker of engineered wood and laminate flooring said third-quarter revenue fell 4 percent to 436.4 million euros ($562.8 million) while its cost of sales rose because it was unable to pass on the higher raw materials costs.

However, significant savings in selling and administrative expenses resulted in a slightly higher profit from operations of 32.6 million euros compared with 32.1 million last year. Its operating margin rose to 7.4 percent from 7.1 percent.

Pfleiderer said the economic situation made it nearly impossible for the company to raise prices of its products and in some cases "we actually had to reduce our prices".

"For the last quarter of 2008 and for next year, we do not anticipate any improvement of the overall market, on the contrary we will prepare for difficult times," it said.

"Against this backdrop, we have decided to temporarily suspend our growth policy in favour of strict cost management to be implemented in all areas and regions." It will review planned capital expenditures and make adjustments if needed.