Douglas - comment

Douglas reported another set of strong results, although we have to recognise differences between our model and the actuals. Volumes were lower at better prices, a trend that has been ongoing but continues to exceed our expectations. The most striking deviation however is found in Staff costs that are some €20m lower than we had modelled. This also continues a trend we had observed, but we hadn’t trusted it. We will ask management on the call how staff costs continue to defy inflation and for how long that should go on. We also wonder about a large adjustment item to EBITDA (nothing new for Douglas) of €11m that is classified under “Other”. Together with the better managed WC - need to ask - and less leaky “other operating cash outflows” than we’ve seen in the recent past, this explains the strong cash position the company now has. We expect requests to pay cash on bond coupons.