Revenue for the first semester of 2009 was 25% below 2008 and is expected to improve slightly during the second semester of 2009. The third quarter showed an improvement with only 22.8% below for the same period of 2008. During the month of September there were large orders received which included lasers.
The third quarter improvement does not represent a significant recovery to forecast a quick recovery of the activity. Initial 2010 budget estimates, which is a combination of our 23 operating companies in the world, shows a slight sales improvement. The 2010 increase in revenue is a result of the new products launched thanks to R&D efforts made over the past year. We have focused our R&D to match the changing needs of our customers.
As stated in the previous informational note of July 2009, the restructuring of the distribution subsidiaries are essentially complete and the benefits of the restructuring will be fully realized during 2010. The new Korean subsidiary which began operations in 2009 is off to an excellent start. In addition, we expect the rest of Asia, in particular China, to contribute to the positive trend of the Group.
Management is analyzing and reviewing other refinements to improve our global organization.
During 2010 the Group will consolidate from 3 sites and 5 buildings into 1 location in North Lyon. This action will greatly facilitate the synergies between our three main brands: Gravograph, Technifor and Vision Numeric.
With the current weakness of the US Dollar, past strategic choices are confirmed in which product sourcing, assembly and distribution are split into 3 locations: Shanghai (Minhang - China), Duluth (Georgia - USA) and La Chapelle Saint-Luc (Aube - France). These locations help balance foreign currency risks.
Although current sales are slow, this time provides the Group with an excellent opportunity to consolidate global market share, and emerge stronger. As a result of our restructuring, new and more competitive product offerings and our increased market share, the Group will be able to quickly regain historical results.
Chairman and CEO
Executive Senior Vice-President and
General Manager GravoTech Group