IFCO SYSTEMS Continues to Grow in Q1 2009 in Sales and Profitability Despite Worldwide Economic Downturn

Business Wire, May 15, 2009

HOUSTON -- IFCO SYSTEMS’ group revenues and operational profitability grew in Q1 2009. RPC Management Services resisted the economic downturn and increased revenue and EBITDA significantly. However, in line with management's expectations, revenue and EBITDA in our Pallet Management Services business segment declined as a result of the effects of the US economic recession.

Revenues on a group level increased by US $2.0 million, or 1.2%, to US $169.9 million (currency adjusted grew by US $9.3 million, or 5.8%) in Q1 2009. RPC Management Services' Q1 2009 revenues increased by US $13.6 million, or 19.3%, to US $84.1 million (currency adjusted grew by US $20.8 million, or 32.9%) compared to Q1 2008, as a result of organic growth in our European business, the effects of the Q2 2008 STECO acquisition, and accelerating growth in our US RPC Management Services business. Pallet Management Services' revenues fell by US $11.5 million, or 11.9%, to US $85.7 million compared to the prior year quarter. Although key product volumes increased compared to Q1 2008, increasing pricing pressure resulting from lowered overall market demand and structural and planned downsizing of our Custom Crating division drove revenues lower in this segment.

EBITDA increased by US $1.9 million, or 8.5%, to US $24.2 million in Q1 2009 (currency adjusted grew by US $3.2 million, or 15.1%), with LTM Q1 2009 EBITDA at a level of US $112.9 million. EBITDA in the RPC Management Services business segment increased by 24.3% to US $19.5 million in Q1 2009 compared to Q1 2008 (currency adjusted grew by US $5.3 million, or 37.3%). RPC Management Services benefited in Europe from increasing synergies resulting from the integration of the former STECO organization and in the US primarily from sustainable economies of scales effects and lower transportation costs. Pallet Management Services' EBITDA decreased by 21.1% to US $6.5 million in Q1 2009, due to effects of the pricing pressure described above and higher distances in transporting finished goods to balance inventories across the organization.

EBITDA margin on group level increased as a result of the items above to 14.2% in Q1 2009 from 13.3% in Q1 2008.

EBIT increased by US $3.2 million, or 28.1%, to US $14.7 million in Q1 2009 (currency adjusted grew by US $3.7 million, or 33.7%), with LTM Q1 2009 EBIT at US $71.0 million.

Net profit increased by US $1.0 million, or 80.8%, to US $2.3 million in Q1 2009, mainly resulting from the net operational improvements discussed above and a foreign currency gain in Q1 2009, which were offset by higher ICE related expenses, increased net interest expenses and a higher income tax provision.

Operating cash flows from continuing operations before income tax payments generated US $4.3 million in Q1 2009, compared to a net use of cash of US $28.8 million in Q1 2008. The cash outflow in Q1 2008 was primarily caused by reduced refundable deposit levels and other related effects on working capital following the termination of the EDEKA contract in Europe.

Capital expenditure levels increased by US $4.1 million, or 54.6%, to US $11.5 million during Q1 2009. Following the loss of a key retail contract in early 2008, our European RPC division temporarily reduced its RPC pool investments until replacement retail contracts were adequately in place. Following the improved usage of the RPC pool in Europe and the realized growth, this division is continuing to invest in its RPC pool in Q1 2009, resulting in an overall increase in capital expenditures compared to Q1 2008. This increase has been partially offset by significantly lower costs of raw materials for all of our RPC pools in Q1 2009, reducing the average per unit acquisition cost of a new RPC in Q1 2009 as compared to Q1 2008.

ROCE from continuing operations, on a LTM basis, decreased to 15.2% as of March 31, 2009, compared to 16.8% as of March 31, 2008, although sequentially higher than the Q4 2008 level of 14.7%. The decrease compared to prior year quarter was caused by the significantly lower ROCE of the STECO organization. The sequential improvements of last quarters are in part the result of the successful integration of STECO’s organization into the IFCO SYSTEMS organization.

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Outlook: As the financial crisis that unfolded in 2008 spreads to the worldwide economy, it is expected that the global economic environment will be very challenging in 2009. While IFCO SYSTEMS anticipates the economy in both Europe and the United States, its two key markets, to decline overall in 2009, it is expected that these economies will begin to recover in 2010.