Half-Year Report at June 30, 2014: Conzzeta with higher revenue and earnings
August 13, 2014 - London
Conzzeta AG /Half-Year Report at June 30, 2014: Conzzeta with higher revenue and earnings. Processed and transmitted by NASDAQ OMX Corporate Solutions.The issuer is solely responsible for the content of this announcement.
Zurich, August 13, 2014 - The Conzzeta Group generated net revenues of CHF 554 million in the first half of 2014, corresponding to growth of around 3%. The operating result was CHF 28.3 million, giving an EBIT margin of 4.9%.
Against a backdrop of patchy global economic developments, the Conzzeta Group increased net revenues in the first half of 2014 by 3.1% to CHF 554.3 million (previous year: CHF 537.7 million). Adjusted for currency and acquisition effects, organic growth amounted to 4.6%. The most significant growth markets were the Asian countries, as well as European markets outside the EU. The markets of Switzerland and the EU remained stable overall. The operating result (EBIT) rose by 4.9% to CHF 28.3 million compared with the same period a year ago (CHF 27.0 million). The EBIT margin also came in at 4.9% (previous year: 4.8%). Group profit increased by 7.6% over the previous year (CHF 21.6 million), reaching CHF 23.2 million. This figure contains an extraordinary result of CHF 2.5 million (previous year: CHF 2.9 million) from the sale of properties by Plazza Immobilien. The year-end results will contain a negative effect of around CHF 25 million arising from the divestment of the ixmation business unit, but most of this charge will be recognized in the second half of the year. Operational free cash flow amounted to CHF 18.2 million, slightly lower than for the comparable period of last year (CHF 18.9 million). Liquid assets stood at CHF 434.7 million (CHF 363.4 million), although it should be noted that the capital reduction of CHF 41.4 million was not paid out until July and therefore was not reflected in the interim financial statement. With an equity ratio of 75.6% (previous year: 75.1%), the Group has a solid financial basis.
The Sheet Metal Processing Systems business unit (Bystronic) reported net revenue of CHF 265.1 million (previous year: CHF 254.6 million) in the first half of 2014. This corresponds to growth of 4.1%, or organic growth of 7.5% after adjustment for negative currency effects. The trend in sales at the beginning of the business year was again subdued, but showed a marked improvement by the summer. From a regional perspective, Europe, above all northern and western Europe, and Asia were the main drivers of growth, while business in the rest of Europe and the American markets was slower. Bystronic brought several new products to the market in recent months, particularly in the field of laser technology. The family of fiber laser machines is the business unit's most important product group today.
Net revenue in the Glass Processing Systems business unit (Bystronic glass) fell by 17.6% to CHF 49.5 million (previous year: CHF 60.1 million). The decline was felt mainly in the insulating and laminated safety glass segments, above all in the EU and the USA. Sales grew in the rest of Europe and particularly Asia, where machinery in the mid-range performance segment is in demand. In the EU, by contrast, demand in the customary market for high-end machinery is low. Bystronic glass responded by adjusting capacity levels at the Neuhausen-Hamberg site (D) and closing down the manufacture of laminated safety glass systems. In general, the business unit is striving to simplify its product structure by moving toward machine series with a modular design that customers can combine to suit their specific requirements. Sales in the business with automotive glass machinery remained solid. The glass handling equipment segment developed satisfactorily.
The Automation Systems business unit (ixmation) continued to face stiff competition in the first half of the year, generating net revenue of CHF 17.3 million, a rise of 10.6% compared with the previous year (CHF 15.7 million). Orders came principally from the vehicle manufacturing, medical technology and consumer goods sectors. The business unit failed to fulfill expectations in the reporting period. With effect from July 1, the Group sold the entire Automation Systems business unit to BBS Automation GmbH. Depending on the outcome of the due diligence process, Conzzeta is expecting a one-time negative impact on the year-end consolidated financial statements of around CHF 25 million. The present interim financial statement does not contain any effects from this transaction.
The Foam Materials business unit (FoamPartner) reported net revenue of CHF 80.3 million for the first half of 2014, 16.1% higher than in the same period of 2013 (CHF 69.1 million). In addition to negative currency effects of 1.6%, an acquisition effect of 8% also has to be taken into account. The resulting organic growth of the business unit was 9.7%. On April 1, FoamPartner acquired Benien in Germany, a company specializing in acoustic components. This acquisition strengthened the Group's position in the growing market for sound-insulating components. Organic growth was generated mainly in the technical foams segment, particularly in Asia and America. The comfort foams business suffered from a weak market in most EU countries, while the home market of Switzerland developed in line with expectations thanks to the introduction of new products.
The Sporting Goods business unit (Mammut) increased net revenue by 3.4% to CHF 103.6 million (previous year: CHF 100.3 million). The result was negatively influenced by currency effects, mainly relating to the exchange rate of the Japanese yen. Organic growth amounted to 5.7%. Although Mammut reported a slight fall in sales in the markets of Germany, Austria and Switzerland, this was more than offset by the performance in the rest of Europe, America and Asia. The reason for the decline in the European core markets was the unseasonably mild weather and lack of snowfall in winter, which discouraged consumers from buying new equipment. The product segment showing the strongest growth was footwear, followed by clothing.
The Graphic Coatings business unit (Schmid Rhyner) reported a rise in net revenue to CHF 28.5 million, 4.4% higher than the same period of 2013 (CHF 27.3 million). Whereas sales of water-based varnishes fell, deliveries of the UV lines showed further gains, with a higher volume of orders from manufacturers of food and luxury goods in particular. While Schmid Rhyner consolidated its business with existing customers, it also succeeded in convincing leading branded goods producers - including suppliers in the cosmetics sector - of the advantages of packaging with textured effects. The regional picture revealed a slight fall in sales in Europe, whereas the markets in India and the USA grew strongly.
As expected, the Real Estate business unit (Plazza) recorded a fall in net revenue to CHF 9.4 million, 8.5% down on the same period a year ago (CHF 10.3 million). This was due in part to lower rental income caused by a drop in the reference interest rate and also a one-time gain from the sale of a leasehold in the comparable period of 2013, which raised the basis of comparison. The residential properties for rent in the Tiergarten development continued to be in great demand. However, the market for commercial properties is becoming more difficult. Plazza generated an extraordinary gain of CHF 2.5 million from the sale of two properties. Preparations are being made to hive off Plazza Immobilien, as already announced.
Trends and outlook
Conzzeta AG does not anticipate a change in the market environment. Technically sophisticated services and products will enable continued growth in the markets outside Europe, so the focus will be on strengthening technological capacities and activities in America and Asia. For the second half of the year, Conzzeta expects market trends and therefore results similar to those of the previous year. However, the estimated impact of the ixmation divestment on the year-end results will be of the order of CHF 25 million.
The full version of the half-year report with the income statement and balance sheet can be accessed at www.conzzeta.ch.
For further information please contact:
Christian Thalheimer, Head of Corporate Services
Phone +41 44 468 24 84
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 Half-Year Report including consolidated income statement and consolidated balance sheet can be downloaded from the following link:
Half-Year Report 2014
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Conzzeta AG via Globenewswire