PART
I
Introduction
General
The
Consolidated Financial Statements of Waterford Wedgwood plc (the
"
Company
") and its subsidiaries
(together the "
Group
"), which form
part of this annual report, are prepared in euro
("
€
"). References to
"
US dollars
" or
"
$
" are to United States dollars,
references to "
IR£
" are to Irish
pounds, the former currency of the Republic of Ireland prior to March
1, 2002; "
¥
" and
"
yen
" means the currency of Japan and
references to "
£
" or
"
pounds
" are to UK pounds sterling.
References to "
€
" are to
the euro, the currency of the European Monetary Union, which, as from
March 1, 2002 is the exclusive currency in the twelve nations of the
eurozone, including the Republic of Ireland. References to
"c" are to euro cents. References to
"we", "us",
"our", and other similar terms refer to the
Group, unless the context otherwise requires. Our Consolidated
Financial Statements are prepared in accordance with accounting
principles generally accepted in the Republic of Ireland
("
Irish GAAP
"), which differ in
certain significant respects from accounting principles generally
accepted in the United States ("
US
GAAP
"). The principal differences between Irish GAAP
and US GAAP that are relevant to us are explained in note 31 to the
Consolidated Financial Statements.
The Noon Buying Rate in New
York City for cable transfers in foreign currencies as certified for
customs purposes by the Federal Reserve Bank of New York (the
"
Noon Buying Rate
") on March
31, 2005 was €1.00 = $1.30. On September 16, 2005,
the Noon Buying Rate was €1.00 = $1.22. For further
information on exchange rates between the euro and the US dollar, see
"
Item 3—Key Information—Exchange
Rates
" and the discussion in "
Item
5—Operating and Financial Review and Prospects—Principal
Factors that Affect Our Results of Operations and Financial
Condition—Exchange rate fluctuations
" and
"
—Results of Operations
".
Unless the content indicates otherwise, the term
"
Ceramics Group
" refers to our
Ceramics business and products sold under the Wedgwood
®
,
Royal Doulton
®
and Rosenthal
®
brands.
The term "
Waterford Crystal
" refers
to our Crystal operations and products sold under the
Waterford
®
crystal, John Rocha at
Waterford
®
crystal, Marquis
®
by
Waterford, Stuart
®
crystal and Jasper Conran at
Waterford
®
Crystal brands. The term
"
Rosenthal
" refers to the Rosenthal AG
Group of companies and their respective operations and products sold
under the Rosenthal studio-line
®
,
Rosenthal
®
, Thomas
®
and
Hutschenreuther
®
brands. The term
"
All-Clad
" refers to the All-Clad
Group of companies and their respective operations and products sold
under the All-Clad Stainless
®
,
Cop-R-Chef
®
, LTD
®
, Copper
Core
®
, and MC2
®
brands. The term
"
WW UK
" refers to Waterford Wedgwood
U.K. plc and its subsidiaries and the term
"
Wedgwood
" refers to the Wedgwood
division of our Ceramics Group. The term "
Royal
Doulton
" refers to the Royal Doulton division of our
Ceramics Group.
WW UK, of which the Company holds 100% of
the ordinary share capital, is registered in England and Wales. Its
assets consist primarily of the entire issued ordinary share capital of
Wedgwood Limited (formerly Wedgwood plc) and 99% of the issued
share capital of Waterford Wedgwood Inc., held through its interests in
Waterford Wedgwood Partners.
References in this annual report to
the names "Waterford",
"Wedgwood", "Royal
Doulton", "Rosenthal" and
"All-Clad" are not intended as generic or
descriptive references to either crystal or fine bone china, fine
earthenware, stoneware, stainless steel or copper cookware.
Forward-Looking Statements
This annual report on Form 20-F
contains certain forward-looking statements as defined in Section 21E
of the United States Securities Exchange Act of 1934 with respect to
our financial condition, results of operations and business and certain
of the plans and objectives of our management with respect thereto,
including, but not limited to, the restructuring of our Ceramics
business, interest rate movements, foreign exchange fluctuations,
particularly that of the US dollar against the euro, and our hedging
4
activities with respect to foreign exchange
fluctuations. These statements may generally, but not always, be
identified by the use of words such as
"anticipates",
"should",
"expects",
"estimates" or similar expressions including
but not limited to, statements contained in or implied by the
discussion under "
Item 4—Information on the
Company
", "
Item 5—Operating and
Financial Review and Prospects
", "
Item
8—Financial Information
", and
"
Item 11—Quantitative and Qualitative Disclosures
about Market Risk
".
By their nature,
forward-looking statements involve risk and uncertainty because they
reflect current expectations and assumptions as to future events and
circumstances that may not prove accurate. The factors described in the
context of such forward-looking statements, and other factors referred
to in this annual report on Form 20-F; particularly in
"
Item 3—Key Information—Risk
Factors
", "
Item 5—Operating and
Financial Review and Prospects—Overview of Our
Business
", "
—Principal Factors
that Affect Our Results of Operations and Financial
Condition
", "
—Results of
Operations—Capital Resources
" and
"
Item 11—Quantitative and Qualitative
Disclosures about Market Risk
" could cause actual
results and developments to differ materially from those expressed in
or implied by such forward-looking statements.
Statements
Regarding Competitive Position
Statements made in
"
Item 4—Information on the
Company
" and "
Item 5—Operating
and Financial Review and Prospects
" referring to our
competitive position are based on the Company's belief, and in
some cases rely on a range of sources including investment
analysts' reports, independent market studies and the
Company's internal assessment of market share based on publicly
available information about the financial results and performance of
market participants.
Item 1—Identity of Directors, Senior
Management and Advisers
Not applicable.
Item
2—Offer Statistics and Expected Timetable
Not
applicable.
Item 3—Key Information
Selected
Financial Data
The selected consolidated financial data set
forth below should be read in conjunction with, and are qualified in
their entirety by reference to, the Consolidated Financial Statements
and notes thereto included elsewhere in this annual report. Certain
prior period amounts have been reclassified to reflect current year
presentation.
Our Consolidated Financial Statements are prepared
in accordance with Irish GAAP, which differ in certain significant
respects from US GAAP. Details of the principal differences between
Irish GAAP and US GAAP are set out in note 31 to the Consolidated
Financial Statements.
We changed our financial year end from
December 31, to March 31, by reporting a transition period of three
months ended March 31, 2002.
5
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Year
ended
December 31,
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3 months
ended March
31,
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Year ended March
31,
|
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2000
|
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2001
|
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2002
|
|
2003
|
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2004
|
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2005
|
|
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|
(€
in millions except per share and per ADS
amounts)
|
|
Consolidated
Income Statement Data
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Amounts in Accordance with
Irish
GAAP:
|
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Net
sales
|
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|
1,084.4
|
|
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|
1,012.0
|
|
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207.2
|
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951.3
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831.9
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732.6
|
|
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Cost
of
sales
|
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|
(547.9
|
)
|
|
|
(580.2
|
)
|
|
|
(115.0
|
)
|
|
|
(509.8
|
)
|
|
|
(448.7
|
)
|
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(480.1
|
)
|
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Gross
profit
|
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536.5
|
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431.8
|
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92.2
|
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441.5
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383.2
|
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|
252.5
|
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Distribution
and administrative
expenses
|
|
|
(434.6
|
)
|
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|
(433.6
|
)
|
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|
(102.9
|
)
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(416.8
|
)
|
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(397.7
|
)
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(450.2
|
)
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Other
operating
income/(expenses)
|
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2.5
|
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|
|
0.7
|
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|
|
0.2
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|
(3.1
|
)
|
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|
(0.3
|
)
|
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2.0
|
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Operating
income/(loss)
(i)
|
|
|
104.4
|
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|
(1.1
|
)
|
|
|
(10.5
|
)
|
|
|
(21.6
|
)
|
|
|
(14.8
|
)
|
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|
(195.7
|
)
|
Gain
arising on conversion of
US$
loans
|
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—
|
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—
|
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—
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9.7
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—
|
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—
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Gain
on sale of property, plant and
equipment
|
|
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—
|
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—
|
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—
|
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5.1
|
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6.0
|
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3.8
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Gain
on sale of All-Clad
business
(ii)
|
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—
|
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—
|
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—
|
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—
|
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—
|
|
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103.2
|
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Deficit
arising on closed
pension
plan
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
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|
(3.9
|
)
|
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—
|
|
|
|
—
|
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Amount
written off
investments
(iii)
|
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—
|
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(16.2
|
)
|
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—
|
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—
|
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—
|
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—
|
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Makewhole
payment
|
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—
|
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—
|
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—
|
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—
|
|
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(3.7
|
)
|
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(5.6
|
)
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Net
interest
expense
|
|
|
(24.8
|
)
|
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(26.0
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)
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(5.5
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)
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(25.3
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)
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(32.4
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)
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(54.9
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)
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Net
income/(loss) before taxes and minority
interests
|
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|
79.6
|
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(43.3
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)
|
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(16.0
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)
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7.2
|
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(44.9
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)
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(149.2
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)
|
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Taxes
on
(income)/credits
|
|
|
(14.1
|
)
|
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|
1.1
|
|
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|
0.2
|
|
|
|
(4.9
|
)
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(4.7
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)
|
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(12.3
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)
|
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Net
income/(loss) after taxes before minority
interests
|
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65.5
|
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|
(42.2
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)
|
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(15.8
|
)
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2.3
|
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|
(49.6
|
)
|
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(161.5
|
)
|
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Minority
interests
|
|
|
(0.8
|
)
|
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|
(0.4
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)
|
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0.4
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(0.5
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)
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0.3
|
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2.1
|
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Net
income/(loss)
|
|
|
64.7
|
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|
(42.6
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)
|
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|
(15.4
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)
|
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1.8
|
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(49.3
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)
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|
(159.4
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)
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Basic
income/(loss) per
ordinary
share
|
|
|
6.92c
|
|
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|
(4.48c
|
)
|
|
|
(1.60c
|
)
|
|
|
0.19c
|
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|
(4.75c
|
)
|
|
|
(10.50c
|
)
|
|
Basic
income/(loss) per
ADS
|
|
|
69.23c
|
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(44.85c
|
)
|
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|
(16.02c
|
)
|
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|
1.86c
|
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|
(47.54c
|
)
|
|
|
(105.04c
|
)
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Diluted
income/(loss)
per ordinary
share
|
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6.86c
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(4.48c
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)
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(1.60c
|
)
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0.19c
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(4.75c
|
)
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|
(10.50c
|
)
|
|
Diluted
income/(loss) per
ADS
|
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|
68.61c
|
|
|
|
(44.85c
|
)
|
|
|
(16.02c
|
)
|
|
|
1.86c
|
|
|
|
(47.54c
|
)
|
|
|
(105.04c
|
)
|
Amounts
in Accordance with
US
GAAP
(iii)(iv)
:
|
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|
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Net
sales
|
|
|
1,084.4
|
|
|
|
1,012.0
|
|
|
|
207.2
|
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|
951.3
|
|
|
|
831.9
|
|
|
|
732.6
|
|
|
Net
income/(loss) before
taxes
|
|
|
73.6
|
|
|
|
(69.1
|
)
|
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|
(19.2
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)
|
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18.5
|
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|
(55.7
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)
|
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(257.5
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)
|
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Net
income/(loss)
|
|
|
57.9
|
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|
(71.0
|
)
|
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|
(21.9
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)
|
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0.2
|
|
|
|
(60.8
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)
|
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|
(270.8
|
)
|
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Continuing
operations
|
|
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57.6
|
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(70.5
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)
|
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(22.4
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)
|
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|
(14.0
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)
|
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|
(68.4
|
)
|
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|
(362.8
|
)
|
|
Discontinued
operations
|
|
|
0.3
|
|
|
|
(0.5
|
)
|
|
|
0.5
|
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|
|
14.2
|
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|
7.6
|
|
|
|
92.0
|
|
Basic
income/(loss) per
ordinary
share
|
|
|
6.20c
|
|
|
|
(7.47c
|
)
|
|
|
(2.28c
|
)
|
|
|
0.02c
|
|
|
|
(5.86c
|
)
|
|
|
(17.85c
|
)
|
|
Continuing
operations
|
|
|
6.16c
|
|
|
|
(7.42c
|
)
|
|
|
(2.33c
|
)
|
|
|
(1.45c
|
)
|
|
|
(6.59c
|
)
|
|
|
(23.91c
|
)
|
|
Discontinued
operations
|
|
|
0.04c
|
|
|
|
(0.05c
|
)
|
|
|
0.05c
|
|
|
|
1.47c
|
|
|
|
0.73c
|
|
|
|
6.06c
|
|
|
Basic
income/(loss) per
ADS
|
|
|
61.95c
|
|
|
|
(74.74c
|
)
|
|
|
(22.78c
|
)
|
|
|
0.21c
|
|
|
|
(58.63c
|
)
|
|
|
(178.45c
|
)
|
|
Continuing
operations
|
|
|
61.58c
|
|
|
|
(74.22c
|
)
|
|
|
(23.30c
|
)
|
|
|
(14.47c
|
)
|
|
|
(65.95c
|
)
|
|
|
(239.08c
|
)
|
|
Discontinued
operations
|
|
|
0.37c
|
|
|
|
(0.52c
|
)
|
|
|
0.52c
|
|
|
|
14.68c
|
|
|
|
7.32c
|
|
|
|
60.63c
|
|
Diluted
income/(loss) per
ordinary
share
|
|
|
6.14c
|
|
|
|
(7.47c
|
)
|
|
|
(2.28c
|
)
|
|
|
0.02c
|
|
|
|
(5.86c
|
)
|
|
|
(17.85c
|
)
|
|
Continuing
operations
|
|
|
6.10c
|
|
|
|
(7.42c
|
)
|
|
|
(2.33c
|
)
|
|
|
(1.45c
|
)
|
|
|
(6.59c
|
)
|
|
|
(23.91c
|
)
|
|
Discontinued
operations
|
|
|
0.04c
|
|
|
|
(0.05c
|
)
|
|
|
0.05c
|
|
|
|
1.47c
|
|
|
|
0.73c
|
|
|
|
6.06c
|
|
|
Diluted
income/(loss) per
ADS
|
|
|
61.40c
|
|
|
|
(74.74c
|
)
|
|
|
(22.78c
|
)
|
|
|
0.21c
|
|
|
|
(58.63c
|
)
|
|
|
(178.45c
|
)
|
|
Continuing
operations
|
|
|
61.08c
|
|
|
|
(74.22c
|
)
|
|
|
(23.30c
|
)
|
|
|
(14.47c
|
)
|
|
|
(65.95c
|
)
|
|
|
(239.08c
|
)
|
|
Discontinued
operations
|
|
|
0.32c
|
|
|
|
(0.52c
|
)
|
|
|
0.52c
|
|
|
|
14.68c
|
|
|
|
7.32c
|
|
|
|
60.63c
|
|
|
Dividends
per
share
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Dividends
per share
$
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.02
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
6
|
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|
|
|
|
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|
|
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|
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|
Year
ended
December 31,
|
|
3 months
ended
March
31,
|
|
Year ended March
31,
|
|
|
|
2000
|
|
2001
|
|
2002
|
|
2003
|
|
2004
|
|
2005
|
|
|
|
(€
in millions except no. of
shares)
|
|
Consolidated
Balance Sheet
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in
Accordance with Irish GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term
deposits
|
|
|
66.2
|
|
|
|
119.6
|
|
|
|
88.1
|
|
|
|
84.0
|
|
|
|
51.6
|
|
|
|
20.0
|
|
|
Working
capital
|
|
|
311.9
|
|
|
|
353.0
|
|
|
|
345.6
|
|
|
|
325.7
|
|
|
|
337.8
|
|
|
|
209.8
|
|
|
Total
assets
|
|
|
964.2
|
|
|
|
993.5
|
|
|
|
963.9
|
|
|
|
874.8
|
|
|
|
848.2
|
|
|
|
723.4
|
|
|
Short
and long-term
debt
|
|
|
398.7
|
|
|
|
483.6
|
|
|
|
478.3
|
|
|
|
440.7
|
|
|
|
434.5
|
|
|
|
299.4
|
|
|
Shareholders'
equity
(iv)
|
|
|
304.5
|
|
|
|
253.3
|
|
|
|
240.0
|
|
|
|
199.8
|
|
|
|
194.3
|
|
|
|
126.4
|
|
|
Total
assets less current
liabilities
|
|
|
728.5
|
|
|
|
749.1
|
|
|
|
739.4
|
|
|
|
665.9
|
|
|
|
659.5
|
|
|
|
541.5
|
|
|
Amounts
in Accordance with US GAAP
(iii)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and short-term
deposits
|
|
|
66.2
|
|
|
|
119.6
|
|
|
|
88.1
|
|
|
|
84.0
|
|
|
|
51.6
|
|
|
|
20.0
|
|
|
Working
capital
|
|
|
321.4
|
|
|
|
308.1
|
|
|
|
296.4
|
|
|
|
179.5
|
|
|
|
285.7
|
|
|
|
175.9
|
|
|
Total
assets
|
|
|
1,119.3
|
|
|
|
1,121.6
|
|
|
|
1,091.7
|
|
|
|
995.7
|
|
|
|
988.9
|
|
|
|
764.2
|
|
|
Short
and long-term
debt
|
|
|
398.7
|
|
|
|
483.6
|
|
|
|
478.3
|
|
|
|
440.7
|
|
|
|
459.5
|
|
|
|
315.2
|
|
|
Shareholders'
equity
(iv)
|
|
|
450.3
|
|
|
|
370.3
|
|
|
|
356.9
|
|
|
|
220.9
|
|
|
|
249.8
|
|
|
|
35.0
|
|
|
Total
assets less current
liabilities
|
|
|
883.7
|
|
|
|
867.9
|
|
|
|
857.7
|
|
|
|
686.6
|
|
|
|
800.6
|
|
|
|
581.6
|
|
Weighted
average number of shares as adjusted to reflect Rights Issue,
December
2004
|
|
|
934.6
|
|
|
|
949.9
|
|
|
|
961.2
|
|
|
|
Next Section
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