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Zurich, June 10, 2008. - In the first four months of the new business year (January to April 2008), the Conzzeta Group (machinery and systems engineering, industrial and consumer products) increased consolidated net revenues to CHF 489.1 (473.7) million, a rise of 3.2%. Revenues and earnings were affected by the strengthening of the Swiss franc against key export currencies. After adjustment for currency translation effects, revenue growth amounted to 7.4%. The operating result of CHF 28.7 (32.5) million includes special costs of CHF 10 million incurred by the Foam Materials business unit. On the strength of the healthy order books in the dominant machinery and systems engineering business activities, the Conzzeta Group expects the high level of capacity utilization to be sustained. However, it is hard to say whether capital spending will remain so vigorous in the second half of the year.
The business units of the Conzzeta Group continued to benefit from a generally favorable business environment in the first four months of the current year. This enabled them to sustain the momentum of the previous year, despite signs of the dynamic growth beginning to slow. The strengthening of the Swiss franc against the key export currencies (USD, EUR, GBP and CNY) compared with the same period a year ago had a substantial impact on sales and earnings. Consolidated net revenues rose by 3.2% to CHF 489.1 (473.7) million. Adjusted for currency translation effects, revenue growth amounted to 7.4%. Operating profit (EBIT) declined by 11.7% to CHF 28.7 (32.5) million; however, this figure includes special costs incurred by the Foam Materials business unit. Group profit reached CHF 22.9 million (previous year: CHF 78.5 million, although that figure included an extraordinary profit of CHF 51.5 million from the sale of real estate).
Business Units
The Sheet Metal Processing Systems business unit (Bystronic) reported sales of CHF 240.2 (242.4) million for the first four months of 2008. This slight fall compared with the previous year was attributable to exchange rate trends. Adjusted for currency translation effects, sales grew by 4.6%. The order backlog and incoming orders remained at a high level. Customers in Europe as well as North and South America continued to show a willingness to invest. In China, by contrast, growth slowed in the first four months compared with last year.
In the first four months of 2008, the Glass Processing Systems business unit (Bystronic glass) was able to increase substantially the number of customer projects completed compared with the same period a year ago. As a result, sales rose by 27.3% to CHF 85.2 (66.9) million. The insulating glass, architectural glass and laminated safety glass segments turned in a very positive performance. The latter has almost filled its order books for the 2008 business year already. As the only exception, the US market is showing signs of weakening, due to the decline in construction activity. The successful completion of major projects and high level of capacity loading are having a positive impact on profitability at all production sites. The order backlog and inflow of new orders are above the previous year's level.
The Automation Systems business unit (ixmation) reported sales of CHF 18.2 (30.4) million for the first four months of the current year. This decline of around 40% is due mainly to normal fluctuations in the project development business; a large number of installations are scheduled for delivery over the next few months. In the photovoltaics segment, ixmation further strengthened its position and secured follow-up orders. Integration of the Asian businesses in China and Malaysia is progressing well, creating a platform for handling an increasing volume of projects across departmental and national boundaries. The inflow of new orders in the first four months of this year was very good, significantly higher than for the same period of 2007, and capacity utilization at all four production centers is at a high level.
Sales in the Foam Materials business unit (FoamPartner) totaled CHF 54.3 (53.8) million, on a par with the previous year's level. The performance in the US market and the latex products segment fell short of expectations. The order and earnings situation in latex products, which comprise about 6% of the business unit's overall sales, continues to be unsatisfactory. As a result, it has been decided to adjust the value of the production facilities and to undertake an in-depth review of the business models for the future. The total charge for the adjustment of value on the latex manufacturing facilities and other special costs was CHF 10 million. Sales of foam materials in the automotive and polyurethane mattress segments were stable.
The Sporting Goods business unit (Mammut Sports Group) benefited from the momentum of the good run of business in the winter season and the strong growth of the Mammut brand, increasing sales to CHF 68.0 (59.0) million, a rise of 15.3%. More than half of the business unit's revenues were generated in the clothing segment, which grew by 30%. The footwear collection developed with Raichle technology will be relaunched in summer 2009 under the Mammut brand. The aim of this step, which will have advantages for marketing and sales, is to further strengthen the Mammut brand. As part of the brand consolidation process, the Raichle distributor in Great Britain was taken over. It will now offer the entire range of Mammut products under the new name of Mammut UK Ltd.
Schmid Rhyner (Print Finishing), which is consolidated under Other Industrial Activities, continued its rapid growth curve. The company achieved a remarkable increase in sales in the European and Asian markets. Cautiously positive outlook On the strength of the healthy order books in the dominant machinery and systems engineering businesses, the Conzzeta Group continues to reckon with a high level of capacity loading in these sectors. However, there are signs of the economic upswing weakening and a slowdown in the second half of the year cannot be ruled out. The sharp fall in the parity of key currencies against the Swiss franc will cut into revenues and earnings, with a significant impact on the annual result.
For further information please contact Carlo Menotti, Head of Corporate Services Phone +41 44 468 24 84 Mobile +41 79 379 56 84 media@conzzeta.ch
Conzzeta Group is an internationally active industrial holding company with over 3,400 employees worldwide. Its core business areas are machinery and systems engineering, and manufacture of consumer and industrial products. Conzzeta's shares are listed on the SWX Swiss Exchange (SWX:CZH).
The News Release including consolidated income statement can be downloaded from the following link:
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Conzzeta AG Giesshübelstrasse 45 Zürich Switzerland
WKN: 265798; ISIN: CH0002657986; Index: SPI, SSCI, SPIEX; Listed: Main Market in SWX Swiss Exchange;
