Állami Nyomda to expand further outside Hungary to boost sales

„We are looking at Bulgaria, Poland and the Ukraine for further acquisitions, which are expected in the next two to three years,” deputy CEO Gábor Zsámboki said in an interview yesterday. „We are watching local big dogs like OTP Bank Nyrt for where they are investing.” Exports increased to 10% of sales this year from 5% of total revenue, or Ft 578 million ($3 million), last year, Zsámboki said at his Budapest office. The company wants exports to eventually account for 40% of sales, he said, without giving a time frame. Állami Nyomda Nyrt, a Hungarian printer that makes the country's election ballots, established 155 years ago, bought its first foreign operation in Romania two years ago and has since acquired units in Bulgaria, Slovakia and Russia. The company is hoping further expansion will help lift its shares, which have lagged the broader Hungarian market since debuting in Budapest a year ago.

The shares have added 5% since last December, compared with a 10% increase for the benchmark BUX Index. Állami shares were unchanged today from Ft 6,100 at the close yesterday, valuing the company at Ft 9 billion. „Boosting exports is essential for turning our stock into a developing stock,” said Zsámboki, who joined Állami in 1999 after 19 years at Magyar Telekom Nyrt, Hungary's former phone monopoly. „We don't want to be a Magyar Telekom type of paper which investors buy just to reap the dividend.”

Állami Nyomda's clients include governments, banks and phone companies in Bulgaria, Hungary, Poland, Romania, Russia and Slovakia. It's the region's second-largest security printer by sales, trailing Polish rival PWPW SA, which is state-owned and also prints the country's banknotes. The printing house's nine-month net income dropped 4.8% to Ft 668.5 million, the company said November 14.
Like other Hungarian companies such as truck and auto part maker Rába Nyrt and retailer Fotex Nyrt, Állami Nyomda has suffered from currency fluctuations this year. The company imports some 90% of the raw material it uses. The more products it exports the better it can counter the weak forint in future years, Zsámboki said. „While this year's net won't reach the 2004 level, it will improve from last year when the costs of listing our shares weighed,” Zsámboki said. Profit in 2004 was Ft 1.1 billion. Exchange rate fluctuations cost the company Ft 64.9 million in the first nine months. The forint added 2.5% against the euro in the past year, peaking at 284.89 on June 29.

Állami printed Hungary's election ballots for the April parliamentary and the October municipal elections this year for Ft 1 billion. The company said October 30 it won an order worth Ft 100 million to produce driving licenses for Albania. The company gets 30% of its revenue, which totaled Ft 11.6 billion last year, from printing cards, 25% from selling security methods such as ink, another quarter from printing blanks and some 15% from traditional print products including books, Zsámboki said. „2006 was about stabilization,” Zsámboki said. „What we were is a very successful Hungarian private company, and now life is a bit more different having gone public.” (Bloomberg)