Annual Results 2011: The Conzzeta Group increases revenues and income, despite the strength of the Swiss franc
(Thomson Reuters ONE) -
Conzzeta AG /
Annual Results 2011: The Conzzeta Group increases revenues and income, despite
the strength of the Swiss franc
. Processed and transmitted by Thomson Reuters ONE.
The issuer is solely responsible for the content of this announcement.
Zurich, 28 March 2012. - The ongoing debt crisis, affecting above all the
eurozone countries, was the main factor shaping the economic environment in the
2011 business year. Despite the negative impact of the strong Swiss franc,
Conzzeta posted improved revenues and income. The Group increased consolidated
net revenues by 7.2% to CHF 1 128.1 million (previous year: CHF 1 051.9
million). Adjusted for currency, acquisition and divestment effects, the growth
was 17.6%. The biggest growth regions in nominal terms were the North American
and Eastern European markets, with the products of the Sheet Metal Processing
Systems business unit as the principal driving force. The Conzzeta Group
recorded operating profit (EBIT) of CHF 61.9 million in 2011 (previous year: CHF
56.9 million), a rise of 8.7%. To mark the company's centenary year, the Board
of Directors is proposing a higher dividend as well as an allocation to the
employee pension funds.
The fluctuations in the currency markets influenced the performance of Conzzeta
in the 2011 business year. Even after the interventions of the Swiss National
Bank, the strong Swiss franc remained at a level that was well above purchasing-
power parity. These currency trends not only reduced income in terms of Swiss
francs, but also put significant pressure on margins due to the high proportion
of personnel costs incurred in Switzerland. Nonetheless, the Group increased
consolidated net revenues by 7.2% to CHF 1 128.1 million (previous year:
CHF 1 051.9 million). Adjusted for negative currency translation effects of
9.7% as well as acquisition and divestment effects, the growth was 17.6%.
Operating profit (EBIT) reached CHF 61.9 million, 8.7% higher than previous year
(CHF 56.9 million). The operating margin of 5.4% was slightly higher than the
previous year (5.3%). The operating result included one-time value adjustments
(impairments) on assets amounting to CHF 6.4 million. As announced in January
2012, these were for restructuring in the Glass Processing Systems business
unit. The Group result for 2011 amounts to CHF 52.1 million (previous year: CHF
51.5 million).
Worldwide, the recovery was sustained in the majority of the markets, the
exception being the hard-pressed economies of Southern Europe. Against this
background, most of the Conzzeta business units continued to grow locally,
although this growth was partly offset by the negative currency effects. The
strongest sales growth was recorded by the Sheet Metal Processing Systems and
Automation Systems business units. The consumer-goods-related businesses were
affected by changes in the purchasing behavior of customers in Europe, above all
in the home market of Switzerland.
Following a period of caution in investment activity during the two previous
years, the Conzzeta Group again invested in capacity expansion in 2011.
Investments in property, plant and equipment and intangible assets amounted to
CHF 40.1 million, almost twice the amount spent in the previous year (CHF 21.1
million). The investment activity included two major projects: the Sporting
Goods business unit began construction of an European logistics center in
Germany, while the Sheet Metal Processing Systems business unit started work on
a second production facility in China.
The cash flow from operating and investment activities (free cash flow)
generated by the Conzzeta Group was negative CHF 1.3 million (previous year: CHF
17.6 million). Cash, cash equivalents and securities held by the Group fell by
CHF 28.4 million to CHF 482.5 million (previous year: CHF 510.9 million). The
Group remains solidly financed, with an equity ratio of 74.9% (previous year:
76.3%). At the end of the year, the Conzzeta Group had 3 576 employees, 254 more
than in the previous year (3 322 employees).
To mark the company's centenary, the Board of Directors is proposing an
increased dividend to be paid from non-operational funds that originate mainly
from the sale of former operating premises. Its proposal to the Annual General
Meeting of Shareholders is for a dividend of CHF 217.00 (previous year: CHF
40.00) per bearer share and CHF 43.40 (previous year: CHF 8.00) per registered
share. The Board is also proposing a special allocation of CHF 15.0 million to
strengthen the financial position of the employee pension funds.
Business units
The Sheet Metal Processing Systems business unit (Bystronic) increased net
revenue by 22.4% to CHF 503.0 million (previous year: CHF 410.9 million).
Adjusted for currency translation effects, the increase was 36.2%. Bystronic
generated particularly strong growth in the USA, where the market recovery
continued to gather pace. During the reporting year, the business unit
transferred its headquarters from New York to the US industrial hub in the
Chicago region, where most of its customers are located. Other markets that
performed well were Eastern Europe and South America; China also showed good
growth rates. In these important sales regions, the negative currency effects
were not sufficient to put a brake on revenue growth. Bystronic is continuing to
invest in future markets, developing its business activities in India and
Vietnam, and establishing a sales and service center in Taiwan. To keep pace
with demand in China, the business unit started construction of a second
production facility in Tianjin. This is partly to ensure increased capacity, but
it will also offer extended capabilities for the development of new machines, as
well as accommodating a large demonstration center to support sales. The service
business was only marginally above the previous year's level, since customers
were investing more in new machinery. The fiber laser system, a new cutting
technology for thin sheets that was launched at the end of 2010, has had a very
positive reception in the market. In 2011, Bystronic also launched BySpeedPro, a
high-performance laser-cutting machine, ByTower, an automation system, and
ByJetSmart, a compact model for waterjet cutting.
In the Glass Processing Systems business unit (Bystronic glass), net revenue
fell by 10.4% to CHF 150.2 million (previous year: CHF 167.5 million). In local
currencies, the drop in sales was 2.0% compared with the previous year.
Bystronic glass was hard hit by the marked decline in construction activity in
Europe as well as by the strength of the Swiss franc. Demand for machinery for
cutting architectural glass and laminated safety glass (LSG) suffered a
significant decline. The business unit therefore had no choice in its decision,
announced in January 2012 (see media release issued on January 10), to give up
the architectural glass cutting segment at the Swiss plant in Bützberg. The
costly manufacture of customized machinery and systems can no longer be operated
economically from a Swiss base. In this field, Bystronic glass is therefore
seeking to cooperate with HEGLA. In a parallel move, the manufacture of LSG
machinery is being transferred from Gunzenhausen (D) to the Neuhausen-Hamberg
(D) site. This is in order to compensate for the decline in demand and benefit
from synergies. The automotive glass segment, whose highly specialized products
will continue to be produced in Bützberg, continued to develop well.
The Automation Systems business unit (ixmation) increased net revenue by 24.2%,
or 43.7% in local currencies, to CHF 70.0 million (previous year: CHF 56.4
million). This surge in growth is due to a major one-time order from the solar
industry. The business unit is continuing to focus on the alternative energy,
medical technology, and automotive segments, where ixmation acquired prominent
customers during the reporting year. In the Asian region, there was growing
interest in manufacturing automation. On the one hand, growing sales in the
automotive segment increased the demand for mechanization from automotive
manufacturers and component suppliers. On the other hand, mechanization of
manufacturing processes increasingly appears the more cost-effective option in
many industries, owing to rising wage costs. This applies not only in the
automotive industry, but also in the manufacture of medical products.
In the Foam Materials business unit (FoamPartner), net revenue fell slightly by
2.6% to CHF 124.6 million (previous year: CHF 127.9 million). Adjusted for
negative currency translation effects, the business unit posted a 3.7% increase
compared with the previous year. The strong franc put pressure on sales, above
all in the comfort foam segment of the Swiss market, where foreign competitors
made the most of the currency advantage by lowering prices. At the same time,
the exchange rate situation put a brake on exports from Switzerland. By
contrast, the markets in Asia recorded growth. Technical foams and packaging
materials are in demand in these markets because customers who have had a
positive experience in their dealings with FoamPartner in Europe wanted to be
able to rely on the same trusted supplier at the new locations in Asia.
Regardless of the regional markets or business fields, demand for converted foam
products was generally high. In the technical foams, for example, ceramic
filters, sponges and polishing disks were particularly in demand. Capacity
utilization was correspondingly high in plants with a high proportion of foam
conversion.
Net revenue in the Sporting Goods business unit (Mammut Sports Group) was also
adversely affected by the strong Swiss franc. Sales in the reporting year fell
by 4.7% to CHF 210.8 million (previous year: CHF 221.2 million). After
adjustments to account for the sale of the Toko business in 2010, the purchase
of Snowpulse in 2011, and currency effects, growth amounted to 4.1%. Across
Europe, customers' interest in winter sports products was curbed by the warm,
dry start to the winter. Furthermore, the strength of the Swiss franc prompted
customers in Switzerland to stock up in neighboring eurozone countries or buy
products from abroad now available in the Swiss market at cheaper prices. Mammut
responded with price reductions. By contrast, in Germany, the strongest market
for Mammut in terms of revenues, the Group reported double-digit growth in local
currencies. Sales in the South Korean and Japanese markets grew strongly. The
opening of additional mono-brand stores in these countries provided further
growth impetus. The business unit continued its efforts to make the Mammut brand
and product range more visible by opening further stores in Germany, Switzerland
and Spain. The Sporting Goods business unit expanded its portfolio by acquiring
Snowpulse, a manufacturer of avalanche airbags. Specially designed for skiers,
this system has a large airbag that reduces the danger of being completely
covered by an avalanche. With the groundbreaking ceremony at the new European
logistics center near Memmingen (D), Mammut embarked on the biggest investment
in its history.
The Graphic Coatings business unit (Schmid Rhyner) increased net revenue in the
reporting year by 3.3% to CHF 48.1 million (previous year: CHF 46.6 million).
The volume growth was not reflected to the same extent in the sales figures due
to the negative currency effects. The strong Swiss franc, combined with the
exclusively Swiss manufacturing base, put pressure on margins. At the same, raw
material costs rose steeply owing to a shortage of capacity at the producers.
The Graphic Coatings business unit generated growth in almost all its main
markets, above all in the Asian markets of China and India. A new series of
dispersion varnishes sold particularly well. New products were successfully
introduced in the UV-hardening line during 2011. These were well received in the
luxury goods sectors where they are used for printing on packaging.
The Real Estate business unit (Plazza Immobilien) generated revenue of CHF 21.0
million in 2011, roughly the same level as in the previous year (CHF 20.9
million). Demand for rented accommodation in the residential sector in
Switzerland remained stable. The plans for a residential development with around
200 apartments on the former industrial site in Wallisellen had to be revised
because of an objection and the proposal had to be represented for public
inspection. The revised development plans are set to be submitted to the
municipal assembly for approval in summer 2012. In the past year, the
municipality at Estavayer-le-Lac presented an offer to purchase all the land at
a former concrete block factory, which lies within their district. The sale went
through at the beginning of 2012.
Trends and outlook
Conzzeta expects the economic environment will be difficult in 2012, due
particularly to the unresolved currency and financial problems in Europe. As
long as the debt crisis continues, the Swiss franc will remain strong. Although
the intervention of the Swiss National Bank to stabilize the exchange rate did
not bring the parity of the Swiss franc down to a satisfactory level for the
long term, it did give a measure of security in planning.
The Group started the current business year with order books at the same level
as in 2011. From the current perspective, further growth can be expected in the
markets of Eastern Europe, America and Asia. In view of the almost daily mood
swings on the financial markets, it is impossible to make reliable forecasts.
Any further worsening of the debt crisis could lead to an immediate response on
the part of customers in the form of a marked decline in demand. Overall,
Conzzeta remains very cautious in its assessment of the situation and cannot
rule out adverse affects on the consolidated financial statements.
In addition to the difficult economic situation, two further one-time effects
will have a negative impact on the result. On the one hand, the restructuring in
the Glass Processing Systems business unit will affect the Group result. In
addition to the depreciation of CHF 6.4 million already recognized in the 2011
financial year, Conzzeta is reckoning with further costs of around CHF 12.0
million in 2012. On the other hand, on approval by the Annual General Meeting of
Shareholders of the proposal for the appropriation of profit, an allocation of
CHF 15.0 million to the employee pension funds will be recognized in the income
statement.
Bearing in mind the uncertain economic outlook, the Conzzeta Group will keep
fixed costs low and maintain a flexible approach. In view of the exchange rate
situation, it is important to remain close to the markets and to build up
Conzzeta's own local production as well as purchasing in local currencies. That
will act as a natural hedge and reduce the adverse currency effects.
The full version of the Annual Report is available at www.conzzeta.ch.
For further information please contact:
Christian Thalheimer, Head of Corporate Services
Phone +41 44 468 24 84
media(at)conzzeta.ch
Conzzeta Group is an internationally active Swiss holding company with
approximately 3,500 employees worldwide. Its activities are in the areas of
machinery and systems engineering, foam materials, sporting goods, graphic
coatings and real estate. Conzzeta's shares are listed on the SIX Swiss Exchange
(SWX:CZH).
The News Release including consolidated income statement can be downloaded from
the following link:
Media release (PDF):
http://hugin.info/100413/R/1597622/503606.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Conzzeta AG via Thomson Reuters ONE
[HUG#1597622]
Unternehmensinformation / Kurzprofil:
Datum: 28.03.2012 - 07:01 Uhr
Sprache: Deutsch
News-ID 129162
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