The Schaffner Group in fiscal 2006/2007 - Realignment completed - sales and profitability on target
Luterbach (ots)
The Schaffner Group increased net sales for its continuing operations by 23.6% to CHF 170.3 million in fiscal 2006/2007 (2005/2006: CHF 137.8 million). Adjusted for currency effects, this amounts to an increase of 20.3%. Order intake increased by 23.3% over the same period to CHF 174.3 million (CHF 141.4 million), while the book-to-bill ratio was 1.02 (1.03). The net result for continuing operations increased to CHF 7.6 million (CHF 6.5 million), or CHF 12.27 (CHF 10.44) per registered share (EPS). Including Test Systems, which was completely discontinued at the end of April 2007, the Schaffner Group posted net sales of CHF 186.1 million in fiscal 2006/2007 (CHF 184.0 million), while order intake amounted to CHF 188.0 million (CHF 188.5 million). Overall, net profit improved to CHF 5.4 million (CHF 3.6 million), which represents earnings per share (EPS) of CHF 8.77 (CHF 5.76). It will be proposed to the Annual General Meeting to pay out CHF 3.00 per registered share within the framework of a nominal capital reduction.
The EBIT from the Schaffner Group's continuing operations remained constant at CHF 10.2 million (CHF 10.1 million), while the EBIT margin, at 6.0% (7.4%), was in line with expectations. The decrease in profitability from operating activities compared with the previous year was mainly due to a slow first half-year in which an EBIT margin of 4.2% was posted on account of residual costs from the discontinued Test Systems Division, a poor first quarter in automotives, start-up costs for new products in Shanghai and an increase in materials costs which could only be offset at a later stage. A significant improvement in EBIT to 7.5% in the second half of the year and the positive development of the financial result, coupled with a low tax rate of just over 21%, led to a 16.5% increase in the net result from continuing operations to CHF 7.6 million (CHF 6.5 million) or CHF 12.27 (CHF 10.44) per registered share (EPS). Discontinued operations posted net sales of CHF 15.9 million and - owing to divestment transaction costs and provisions for remaining risks associated with the discontinued operations - a net result of CHF -2.2 million (CHF -2.9 million).
Strong growth in the renewable energy and motor drives markets As well as Schaffner's traditionally strong sales markets such as industrial electronics and telecommunications, the combination of EMC and power quality products opens up sustainable growth potential in rapidly-developing markets such as renewable energy and motor drives, which together contributed 31% to group sales in fiscal 2006/2007. In view of the increasing importance of Schaffner components used to feed energy from renewable sources into power networks, there is a strong correlation between investment in systems to harness renewable energy sources such as solar and wind power and the market potential of the Schaffner Group. As a result of the rigorously implemented realignment, the automotive products business line also made a positive contribution to the result for the first time. The breakdown of sales by geographical region underlines the significance of the traditionally robust European market and the strong growth in Asian markets. Thanks to the acquisition of Jacke, Europe contributed almost three-quarters of total sales. The Asian markets, with organic sales growth of around a third, contributed 17% to group sales, while 9% came from the USA. In order to be equipped for further organic growth in China, both production capacity and the workforce (up from 296 to 554 employees) were increased considerably in Shanghai.
Capital structure
The major cash inflows of the last two years from the sale of the Test Systems Division and the Luterbach properties enabled the Group to reduce its net debt to CHF 20.6 million (CHF 39.1 million), and the ratio of net debt to shareholders' equity (gearing) improved to 0.40 (0.77). Cash and cash equivalents rose substantially to CHF 28.8 million (CHF 9.0 million), corresponding to 19.6% (6.4%) of total assets. The equity ratio remained stable at 35.1% (36.0%).
Appropriation of profit
The Board of Directors of Schaffner Holding AG is proposing to the Annual General Meeting that the net result for fiscal 2006/2007 be carried forward and, instead of a dividend, to pay out CHF 3.00 per registered share within the framework of a nominal capital reduction. The proposed payout, which is 25% of the net result of continuing operations, is in line with the long-term payout policy of the Schaffner Group.
New Chief Financial Officer appointed
Kurt Ledermann (39) has been nominated as the new Chief Financial Officer of the Schaffner Group. Until Mr Ledermann takes up his duties sometime in the first half of 2008, Martin Zwyssig will continue to pursue his managerial role within the Schaffner Group as Executive Vice President and Chief Financial Officer. Kurt Ledermann is a Swiss national. He graduated from the Swiss Federal Institute of Technology Zurich with a master's degree in engineering (dipl. Ing. ETH) and earned a degree in economics (lic. oec.) from the University of St. Gallen. Before moving to the Schaffner Group, Mr Ledermann held the position of Executive Vice President Finance & IT at RUAG Aerospace. Prior to that he had spent four years as Manager Finance & Accounting of the Schaffner Group, prior to which he had held various positions inside the Sika Group.
Outlook
The chosen course of continuously building profitability through operational excellence will be rigorously pursued going forward. After increasing its capacity in Shanghai, Schaffner will continue to focus on growth in the dynamic Asian markets. Based on the current economic situation, the Schaffner Group aims to achieve organic growth of 6% to 8% in fiscal 2007/2008 and, thanks to its successful reorganization, anticipates an EBIT margin of between 7% and 8%. In view of the strong performance of the business, the Schaffner Group expects to achieve its target of annual net sales of around CHF 250 million with an average EBIT margin of 10% by fiscal 2010/2011.
Schaffner - energy efficiency and reliability.
Schaffner is the international leader in the fields of electromagnetic compatibility and power quality and supports with its components solutions for an efficient and reliable use of electric energy. With its products and services, the Schaffner Group plays a key role in promoting technologies that support renewable energies, ensures the reliable functioning of electronic equipment and systems in compliance with all major quality and performance standards and meets the requirements for greater energy efficiency.
The detailed Annual Report 2006/2007 is available at www.schaffner.com
This media information including the key figures can be downloaded as PDF from:
http://www.newsbox.ch/public/14380/att/16005_mimpke.pdf
Contact:
Alexander Hagemann
Chief Executive Officer
Tel.: +41/32/681'66'06
E-Mail: alexander.hagemann@schaffner.com
Dr. Martin Zwyssig
Chief Financial Officer
Tel.: +41/32/681'66'08
E-Mail: martin.zwyssig@schaffner.com
Schaffner Holding AG
4542 Luterbach, Schweiz
Tel: +41/32/681'66'26
Fax: +41/32/681'66'30
Internet: www.schaffner.ch