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Conzzeta: Annual results 2018 - profitable growth Mittwoch, 20. März 2019 - 06:45
Conzzeta / Key word(s): Annual Results/Dividend
Conzzeta: Annual results 2018 - profitable growth
20-March-2019 / 06:45 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
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Annual results 2018 - profitable growth
- Net revenue +20.2% to CHF 1,782.2 million
- EBIT +19.2% (or +28.3% adjusted for the divestment gain in 2017) to CHF
146.8 million
- EBIT margin 8.2% after 7.6% (adjusted) in 2017
- Strong result contribution of the Sheet Metal Processing business unit
(Bystronic)
- Group result +17.9% (or +29.6% adjusted) to CHF 114.8 million
- Earnings per class A share +15.5% to CHF 46.76; proposed dividend CHF
18.00, +12.5%
Group CHF m 2018 2017 Change
Order entry (capital goods) 1,129.0 1,067.3 5.8%
Net revenue 1,782.2 1,482.8 20.2%
comparable1 10.4%
Total revenue 1,796.7 1,500.9 19.7%
Operating result (EBIT) 146.8 123.22 19.2%
as a % of total revenue 8.2% 8.2%2 0 bp
Group result 114.8 97.42 17.9%
as a % of total revenue 6.4% 6.5%2 -10 bp
Minority interests 18.2 13.7 32.1%
Operating free cash flow 83.4 65.4 27.3%
Cash, cash equivalents and securities 389.6 399.1 -2.4%
Total assets 1,366.2 1,323.3 3.2%
Shareholders' equity 926.9 902.9 2.7%
as a % of total assets 67.8% 68.2% -40 bp
Net operating assets (NOA) 520.1 490.7 6.0%
Return on net operating assets (RONOA) 23.1% 21.5% 160 bp
Number of employees on December 31 5,259 4,717 11.5%
Earnings per class A share, in CHF 46.76 40.47 15.5%
Dividend for class A shares, in CHF 18.003 16.00 12.5%
Dividend for class B shares, in CHF 3.603 3.20 12.5%
1 At constant exchange rates and adjusted for changes in the scope of
consolidation.
2 Including divestment gain of CHF 8.8 million.
3 As proposed by the Board of Directors.
Zurich, March 20, 2019 - With net revenue of CHF 1,782.2 million, the
Conzzeta Group achieved revenue growth of 20.2% in 2018. On a comparable
basis, i.e. at constant exchange rates and adjusted for changes in the scope
of consolidation, net revenue growth was 10.4%. After an exceptionally
strong start to the year in a very favorable business environment for
capital goods, benefiting from the delivery of various large orders in the
Glass Processing segment and successful product launches in the Outdoor
segment, market trends became increasingly mixed across regions and
businesses. In Asia and particularly China, increasing geopolitical and
macroeconomic uncertainties had an adverse effect. The Chemical Specialties
segment was particularly affected by the marked slowdown in the automotive
sector in the fourth quarter. However, thanks to continuing robust business
development at Group level in Europe and America, net revenue in the second
half of the year was up by 8.1% compared to the strong prior year's period,
albeit with a declining margin due to the slowdown mentioned above. The high
order intake for capital goods weakened towards the end of the year, but
still increased by 5.8% for the year as a whole. The order book at the end
of the year in the Sheet Metal Processing segment was slightly higher, and
in the Glass Processing segment slightly lower than the previous year.
With an operating result of CHF 146.8 million in 2018 and an EBIT margin of
8.2%, the Group achieved its medium-term aspirational target of 8% to 10%
thanks to the further result improvement at a high level in the Sheet Metal
Processing segment. EBIT in 2017 amounted to CHF 123.2 million and the
margin was 8.2% (or CHF 114.4 million and 7.6% without the divestment gain
of CHF 8.8 million from the sale of the US joint venture in the Chemical
Specialties segment). The operating result improved notably in the reporting
year in three out of four segments, but it declined in the Chemical
Specialties segment from CHF 16.0 million in 2017 (not including the
divestment gain) to CHF 5.8 million.
Group result for 2018 amounted to CHF 46.76 for each class A registered
share and CHF 9.35 for each class B registered share, compared with CHF
40.47 and CHF 8.09, respectively, in the previous year. At the Annual
General Meeting on April 16, 2019, the Board of Directors will propose a
dividend of CHF 18.00 for each class A registered share and a dividend of
CHF 3.60 for each class B registered share, a 12.5% increase on the previous
year.
The Group generated a free operating cash flow of CHF 83.4 million in 2018,
against CHF 65.4 million in the previous year. Investments in fixed and
intangible assets amounted to CHF 72.2 million, up from CHF 37.3 million the
previous year.
According to Michael Willome, Conzzeta Group CEO: "We achieved significant
growth also in 2018. It was the first time we achieved our medium-term
margin target without one-off effects. In 2019, we will have to maintain
customer proximity with innovative solutions in an overall more demanding
business environment, and be able to respond to developments as the
situation demands. Thanks also to the strategic measures and investments
made, we see opportunities to further improve profitability. We anticipate
significant progress particularly in the Chemical Specialties and Outdoor
segments. Our employees in all segments deserve a huge thanks for their
commitment and their contribution to what was a strong year overall in
2018."
Trends and outlook: Geopolitical and macroeconomic uncertainties have gained
in importance for 2019. For the businesses continued after the announced
divestment of the Glass Processing segment, Conzzeta currently expects net
revenue in 2019 at the level of the previous year. Not including any
potential one-off effects from the divestment, the operating result is
anticipated to be more broadly based across the segments with a slight
improvement in the EBIT margin.
Segments CHF m 2018 2017 Change
Sheet Metal Processing Net revenue 1,013.2 856.1 18.3%
comparable1 14.9%
Total revenue 1,032.5 874.0 18.1%
Operating result (EBIT) 132.5 98.0 35.2%
as a % of total revenue 12.8% 11.2% 160 bp
Chemical Specialties Net revenue 382.9 279.2 37.1%
comparable1 -2.5%
Total revenue 383.0 281.3 36.1%
Operating result (EBIT) 5.8 24.82 -76.5%
as a % of total revenue 1.5% 8.8%2 -730 bp
Outdoor Net revenue 253.4 228.6 10.9%
comparable1 9.4%
Total revenue 253.4 228.6 10.9%
Operating result (EBIT) 5.2 0.1 n/a
as a % of total revenue 2.1% 0.1% 200 bp
Glass Processing Net revenue 133.3 119.3 11.7%
comparable1 10.4%
Total revenue 128.4 117.4 9.3%
Operating result (EBIT) 7.6 6.3 21.1%
as a % of total revenue 5.9% 5.4% 50 bp
1 At constant exchange rates and adjusted for changes in the scope of
consolidation.
2 Including divestment gain of CHF 8.8 million.
The Sheet Metal Processing segment (Bystronic) generated net revenue of CHF
1,013.2 million in 2018, an increase of 18.3%, with all regions and customer
segments recording solid double-digit growth rates and an improved EBIT
margin at a high level. On a comparable basis, i.e. at stable exchange rates
and excluding the revenue contribution of the two companies taken over in
2018, TTM Laser and Antil, revenue increased by 14.9%. After a very strong
first six months, the business environment cooled considerably in the second
half of the year, particularly in China, due to geopolitical and
macroeconomic factors. The consistent implementation of the current growth
strategy requires further efforts and investments to enhance market presence
and to develop new solutions and products, particularly in the area of
automation. The integration of Antil contributed in 2018 to the launch of
the new Automation and Software Competence Centers, which complement the
existing Cutting and Bending Competence Centers. The Tube Processing
Competence Center was also created in the course of the integration of TTM
Laser. The World Class Manufacturing campaign was continued. The focus in
the top customer segment was directed at flexible automation and integrated
manufacturing cells with comprehensive software solutions. Market presence
was spread further, including by way of new or expanded branches in
Singapore, Vietnam, Taiwan, Poland, Austria and the Netherlands. In the
reporting year, the groundbreaking took place for the new assembly plant and
experience center near Chicago (USA), and in Switzerland the comprehensive
renewal and modernization of a factory hall at the Niederönz site was
started.
The Chemical Specialties segment (FoamPartner and Schmid Rhyner) generated
net revenue of CHF 382.9 million in 2018, a rise of 37.1%. On a comparable
basis, revenue declined by 2.5%. The changes in the scope of consolidation
considered here relate primarily to the FoamPartner business unit, namely
Otto Bock Kunststoff, which was acquired as of September 1, 2017, and the
51% stake in the US joint venture, which was sold on July 1, 2017. The
operating result amounted to CHF 5.8 million compared with CHF 24.8 million
the previous year, which included a one-off gain of CHF 8.8 million from the
joint venture sale. The EBIT margin was 1.5%, down from 8.8% the year
before, although after adjusting for the divestment gain, the EBIT margin
the year before was 5.7%. 2018 was a challenging year, particularly for
FoamPartner, and the operating result was significantly lower than expected.
The implementation of the new regional management structure, the development
of regional business models and the merger with Otto Bock Kunststoff ran
according to plan. This gave rise to integration and reorganization costs of
CHF 5.5 million. These costs also include the closure of a North American
site. Raw material costs also had a negative effect on the operating result
compared with the previous year, despite the situation easing in the second
half of the year. The automotive business declined over the course of the
year due to market factors, in Europe because of the new test procedures
applicable to the certification of vehicles and in China because of the
significant industry slowdown associated with the trade dispute with the USA
as well as increased competitive pressure. With the help of innovative
solutions for customers and extensive measures to improve operating
efficiency, a concerted effort will be made over the next 24 months to
significantly improve margins. For Schmid Rhyner's print finishing business,
the raw materials situation in 2018 also proved challenging, with higher
costs, shortages of certain materials and the reclassification of certain
materials as hazardous. Despite price increases, it retained its existing
market share.
The Outdoor segment (Mammut Sports Group) generated net revenue of CHF 253.4
million in 2018, up 10.9%, with double-digit growth in all three regions,
Europe, America and Asia. The operating result increased significantly. The
solid 2017/2018 winter season was favorably influenced by, among other
things, successful product launches (new generation of the "Eiger Extreme"
clothing collection and new version of the "Barryvox" avalanche
transceiver). The progressive implementation of the five-year strategy
program, which commenced in 2016, was also beneficial. There was a
significant qualitative improvement in sales performance thanks to enhanced
cooperation with select specialist retailers, the development and expansion
of the segment's own online channels, optimization of the store portfolio
and the expansion of international activities. An improved gross margin has
already enabled the strategy-driven increase in the cost base in the areas
of digitalization, retail and design to be partially absorbed. Further
revenue gains and a disproportionate improvement in the EBIT margin are
expected by the conclusion of the strategy program. In the context of
changing consumer habits and the continuing shift from physical to online
stores, Mammut continues to work steadily on its digital transformation,
sharpening its own brand across channels and developing innovative tools to
promote customer loyalty. From 2019, this includes the use of NFC technology
in selected products as part of the "Mammut Connect" initiative. Customers
can use an app to access comprehensive product information, use additional
services or be part of a digital social network. Despite further clean-ups
in the physical volume business, where profitability is below average,
pre-orders from specialist retailers for the coming summer season were
notably higher at the end of 2018 compared with the previous year thanks to
new collections and the launch of various new products.
The Glass Processing segment (Bystronic glass) generated net revenue of CHF
133.3 million in 2018, an increase of 11.7%. The operating result amounted
to CHF 7.6 million (CHF 6.3 million), yielding an EBIT margin of 5.9%
(5.4%). After a very dynamic first half-year, driven by the delivery of
various large-scale orders, the business environment cooled in the second
half of the year. Despite that, for the full year double-digit revenue
growth was reported both in the automotive glass and architectural glass
product segments thanks to exceptional progress in Asia and America. By
contrast, order intake by product segment was mixed. The automotive glass
product segment, which is subject to strong inherent fluctuations, was
unable to continue on from the previous year's strong performance, which was
driven by large-scale orders, whereas order intake in the architectural
glass product segment was pleasing, particularly in Europe and the Americas.
On January 25, 2019, Conzzeta announced that a binding agreement had been
signed for the sale of the Glass Processing segment to the Finnish company
Glaston Corporation, headquartered in Helsinki, for an enterprise value of
EUR 68 million (CHF 78 million). Together, the two companies will become a
leading player in the glass processing machinery business with increasingly
integrated solutions in the value chain and the potential to sustainably
improve customer productivity across the various process steps.
Notes
Please visit www.conzzeta.com for further information.
As of the financial year 2018, the annual report is published online:
report.conzzeta.com.
Inquiries
Michael Stäheli, Head Investor Relations & Corporate Communications;
Tel. +41 44 468 24 49; media@conzzeta.com
About Conzzeta
Conzzeta is a broadly diversified Swiss group of companies. It stands for
innovation, market orientation and an entrepreneurial approach. Conzzeta
strives for leading positions in its target markets, above-average growth
and long-term value creation. Over 5,200 employees at more than 60 locations
worldwide work in the Sheet Metal Processing, Foam Materials, Graphic
Coatings, Outdoor and Glass Processing segments. Conzzeta AG is listed on
SIX Swiss Exchange (SIX:CON).
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End of ad hoc announcement
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