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Conzzeta: Result 2016 - Accelerated growth and higher operating result Dienstag, 21. März 2017 - 07:00
Conzzeta / Key word(s): Final Results
Conzzeta: Result 2016 - Accelerated growth and higher operating result
21-March-2017 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
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Annual Results 2016
Accelerated growth and higher operating result
Zurich, March 21, 2017 - In an uneven operating environment, the Conzzeta
Group generated revenue growth of 6.4%. The operating result (EBIT) was CHF
84.4 million with an EBIT margin of 6.9%, after CHF 75.9 million and 6.7%
respectively on the continued business in 2015. Return on net operating
assets (RONOA) was 15.6% (previous year: 13.4%).
After a subdued performance in the first six months, the second half of 2016
was exceptionally strong as expected, with revenue growth of 15.5% compared
with the second half of 2015 and disproportionately high growth of the
operating result. On a comparable basis, i.e. at constant exchange rates and
adjusted for changes in the scope of consolidation, revenue grew by 2.6% in
2016. The impact on revenue of the three acquisitions in 2016, Hydra Sponge,
DNE Laser and FMG, totaled CHF 47.7 million.
With the acquisition of DNE Laser, Shenzhen (China) and the realization of
various growth initiatives, Conzzeta's business showed disproportionately
high growth in the Asia region in 2016, both through acquisitions and
organically. Revenue across Asia was up by 31.5%, so that the share in net
revenue of the Asia and Others region increased to 24.1%, up from 19.5% in
2015.
The operating result for 2016 included nonrecurring restructuring costs in
connection with growth and efficiency measures of CHF 7.9 million, compared
with CHF 4.1 million the previous year.
The Group result increased by 7.7% to CHF 63.9 million. Taking into account
minority interests in connection with the 51% stake acquired in DNE Laser,
Group profit for 2016 was CHF 29.10 per registered share A and CHF 5.82 per
registered share B. The Board of Directors is proposing to the Annual
General Meeting on April 25, 2017 a 10% higher dividend of CHF 11 per
registered share A and CHF 2.20 per registered share B.
The Group generated an operating free cash flow of CHF 76.0 million in 2016,
after CHF 70.5 million in the previous year. At the end of the reporting
year, the Group had liquid assets of CHF 469.8 million and the equity ratio
stood at 75.0%. Conzzeta continues to have a solid balance sheet that will
help sustain the future development of its businesses and provide a basis
for active shaping of its portfolio.
Segments
In 2016 the Sheet Metal Processing segment (Bystronic) generated net revenue
of CHF 652.8 million, a year-on-year rise of 14.3% (previous year: CHF 570.9
million). On a comparable basis, revenue growth was 7.3%. The operating
result was CHF 63.0 million (CHF 55.4 million), giving an EBIT margin of
9.7% (9.6%). This included restructuring costs of CHF 4.3 million in
connection with the optimization of a site in China. The first half of the
year was marked by a muted sales trend, though this was more than offset by
a strong second-half performance. Order intake increased significantly year
on year. The order book at the end of 2016 was well above the average level.
The market environment remained highly competitive and the situation in
several markets was challenging owing to political and economic
uncertainties. Bystronic nevertheless succeeded in maintaining or increasing
revenues overall in the European and American markets, while the sales
performance in Asia improved significantly. Various growth initiatives and
the acquisition of DNE Laser contributed to this performance. The business
targeted investments on strengthening the presence in Asian markets,
including Japan, but also in selected European and American markets.
The Sporting Goods segment (Mammut Sports Group) generated net revenue of
CHF 233.4 million in 2016, 0.8% down on the previous year (CHF 235.3
million). At constant exchange rates, revenue declined by 2.9%. The
operating result was CHF 1.2 million (CHF 0.1 million). Lower revenues,
particularly in the core European markets of Switzerland, Germany and
Austria (the so-called DACH region), which account for a high proportion of
sales, were largely offset by growth in the markets of Asia and parts of
Europe outside the DACH region. At year-end, booked orders and advance
orders for the summer season were slightly up on the previous year. In
Europe and the USA the pressure on the traditional specialist trade
structures continued. By contrast, multichannel suppliers and dealers
operating exclusively online benefited from the changing pattern of consumer
behavior. Price rises for 2016 initiated after the currency turmoil of the
previous year as well as astute cost management have been effective.
Nevertheless, margin pressure, particularly in the fiercely competitive
European market environment, remained strong and was further intensified by
the sluggish winter business, which was again affected by unfavorable
weather conditions. In 2016 Mammut Sports Group began to implement the
five-year strategic program to create sustainable profitable growth. One of
the aims is to improve cooperation with major wholesale customers to
increase store traffic through more active management of floor space.
Digitization and further refining the business model as well as developing
specific capabilities as part of the ongoing change process, coupled with
the drive to accelerate internationalization, will have an adverse effect on
the operating result and operational free cash flow of the Sporting Goods
segment for the time being.
The Chemical Specialties segment (FoamPartner and Schmid Rhyner) generated
net revenue of CHF 220.6 million in 2016, a rise of 7.9% on the previous
year (CHF 204.5 million). On a comparable basis, revenue growth was 4.2%.
The operating result was CHF 23.1 million (CHF 18.5 million), giving an EBIT
margin of 10.4% (9.1%). Revenue growth was generated in Asia and the USA,
the latter thanks to the acquisition of Hydra Sponge in January 2016.
Business in Europe showed a flat tendency, though this varied from one
product segment to another. The sales dynamic was maintained in the second
half of 2016, despite isolated production cuts due to a shortage of raw
materials and partially rising commodity prices. The technical foams
business recorded broadly based growth across all regions in 2016. Solutions
for noise and heat insulation in vehicles and for special filters and
functional foams were in particularly high demand. By contrast, it was not
possible to maintain revenue in the comfort product segment, which is
strongly focused on Switzerland and neighboring countries. FoamPartner
reviewed its business strategy in the reporting year and implemented a new
organizational structure as per the beginning of 2017, devolving
responsibility for results to the regions and establishing three product
segments: Mobility, Specialties and Living & Care. In the print finishing
product segment, Schmid Rhyner continued the systematic repositioning,
initiated in previous years, to focus more on packaging printing. The
business was able to offset the continuing decline in revenue in the
European market for commercial printing, thanks to innovative Touch & Feel
products, coupled with gains in market share in Asia and the Middle East.
The Glass Processing segment (Bystronic glass) generated net revenue of CHF
107.5 million in 2016 (previous year: CHF 119.9 million). On a comparable
basis, revenue dropped by 11.2%. The operating result amounted to CHF 1.0
million (CHF 6.4 million) and the EBIT margin was 0.9% (5.6%). The result
included restructuring costs of CHF 3.6 million in connection with
cost-reduction measures in Europe and global process optimization. Although
the architectural glass business increased in Asia and the USA, the growth
was not sufficient to fully compensate for declining revenue in Europe in
the second half of the year. Nor was the automotive glass product segment
able to repeat the very strong performance in 2015, which was boosted by
major orders in the USA. The order intake came in lower than the previous
year after flattening off in the second half of 2016, while the order book
at year-end was slightly higher. Partly due to efficiency measures,
Bystronic glass returned to profitability in 2015 after several years of
losses. In spite of this, a comprehensive review completed in mid-2016
highlighted the need for further action to secure sustainable value
creation. In the second half of the reporting year, additional measures
aimed at creating a more flexible cost base were introduced as previously
announced. More efficient, global processes should shorten lead times by the
end of 2017 and will also help to deal with fluctuations in the order intake
by increasing the flexibility of capacity utilization while reducing
staffing levels at the international production locations. Parallel to the
efficiency measures, the focus in 2016 was on the continuation of ongoing
innovation activities. Worldwide efforts to curb climate change with
increasing regulations to conserve resources are expected to boost the
demand for energy-efficient architectural glass and thin, lightweight
automotive glass in the long term. To broaden the geographical spread of
growth opportunities, a particular effort in 2016 was on the development of
the Chinese market.
Trends and outlook
At year-end the order book for capital goods and customer activity were at a
higher level than the previous year. All of the Conzzeta Group's business
units are working on the realization of differentiated plans whose
objectives are to accelerate growth and to increase profitability on a
sustainable basis. In the medium term, the benchmark is the Group's ambition
to achieve revenue growth in excess of 5%, an EBIT margin of 8% to 10% and a
return on net operating assets of over 15%. Consistent with the Group
strategy, an appropriate contribution to the result is expected from every
business unit. For the time being, the Sporting Goods business unit will
fall short of the set targets during implementation of the ongoing
multi-year strategy program as will the Glass Processing business unit,
where the current restructuring measures are due to be completed by the end
of 2017. Conzzeta's overall assessment of the present operating environment
with its political and macro-economic uncertainties is that it will tend to
be vulnerable to fluctuations and continue to show regional differences. In
addition, the business performance will be strongly influenced by the
specific market environment of each individual area of activity. In view of
the uncertainties mentioned above and the different contributions of the
business units, Conzzeta expects to achieve organic revenue growth in 2017
and a higher operating result with a slightly improved EBIT margin.
For further information please contact:
Michael Stäheli, Head Investor Relations & Corporate Communications
Phone +41 44 468 24 49
media@conzzeta.com
About Conzzeta
Conzzeta is a broadly diversified Swiss Group of companies. It stands for
innovation, reliability and a long-term perspective. Conzzeta strives to
achieve leading positions in its target markets, with above-average growth
and long-term value creation. Over 4000 employees at more than 60 locations
worldwide are dedicated to offering customers innovative solutions in Sheet
Metal Processing, Sporting Goods, Foam Materials, Graphic Coatings and Glass
Processing. Conzzeta is listed on the SIX Swiss Exchange (SIX:CON).
Group key figures
2016 2015
Net revenue CHF m 1'214.3 1'140.81
Total revenue CHF m 1'215.1 1'138.51
Operating result CHF m 84.4 80.81
as % Total revenue 6.9 7.12
Group result CHF m 63.9 59.31
as % Total revenue 5.3 5.2
Operating free cash flow CHF m 76.0 70.5
Cash, cash equivalents and securities CHF m 519.8 540.8
Equity CHF m 941.5 959.5
Total assets CHF m 1'255.4 1'221.7
as % total assets 75.0 78.6
Net operating assets CHF m 401.6 413.3
Employees at year-end Number 4'098 3'479
Average employees (FTE's) Number 3'814 3'425
Earnings per share
per registered share A CHF 29.103 28.65
per registered share B CHF 5.823 5.73
1 Including contributions from discontinued Real Estate business unit: net
revenue
and total revenue: CHF 9.4 m; operating result: CHF 4.9 m; Group result: CHF
3.3 m.
2 Or 6.7% on continuing operations.
3 As proposed by the Board of Directors.
Segment key figures
2016 2015
Sheet Metal Processing Net revenue CHF m 652.8 570.9
Total revenue CHF m 648.7 576.3
Operating result CHF m 63.0 55.4
as % total revenue 9.7 9.6
Sporting Goods Net revenue CHF m 233.4 235.3
Total revenue CHF m 231.8 234.8
Operating result CHF m 1.2 0.1
as % total revenue 0.5 0.0
Chemical Specialties Net revenue CHF m 220.6 204.5
Total revenue CHF m 221.9 203.5
Operating result CHF m 23.1 18.5
as % total revenue 10.4 9.1
Glass Processing Net revenue CHF m 107.5 119.9
Total revenue CHF m 112.7 113.7
Operating result CHF m 1.0 6.4
as % total revenue 0.9 5.6
Discontinued Operations
Net revenue CHF m - 9.6
Total revenue CHF m - 9.4
Operating result CHF m - 4.9
as % total revenue - 52.1
For the full version of the annual report please refer to www.conzzeta.com.
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End of ad hoc announcement
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