EQS-Adhoc: Conzzeta: Result 2016 - Accelerated growth and higher operating result
EQS Group-Ad-hoc: 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 theSheet 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.
TheSporting 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.
TheChemical 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.
TheGlass 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
1Including 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.
2Or 6.7% on continuing operations.
3As 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.
Additional features:
Document:http://n.eqs.com/c/fncls.ssp?u=CQQKNCEKER
Document title: Conzzeta_Annual Results 2016
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End of ad hoc announcement------------------------------------------------------
Language: English
Company: Conzzeta
Giesshübelstrasse 45
8045 Zürich
Switzerland
Phone: +41 44 468 24 49
Fax: +41 44 468 24 53
E-mail: info@conzzeta.com
Internet: www.conzzeta.com
ISIN: CH0244017502
Valor: A117LR
Listed: Regulated Unofficial Market in Berlin, Stuttgart; Open Market in
Frankfurt; SIX Swiss Exchange
End of Announcement EQS Group News Service
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555831 21-March-2017 CET/CEST
