Significant revenue growth, rise in earnings

Horgen, 20 August 2015 – Schweiter Technologies posted sharp growth in revenues and earnings in the first half of 2015. The Group’s net revenues amounted to CHF 431.0 million in the first half of the year, an increase of 15% (in local currencies: +18%). This includes the results for three months of the acquirees Polycasa and Plastwag, which both performed well. 3A Composites achieved a notable increase of 22% in local currencies (organic growth: 5%). SSM posted a cyclical decline of 9% compared with the high prior-year figure. The appreciation of the Swiss franc and the costs associated with the acquisition and integration of the acquirees reduced operating income by around CHF 8 million. Nevertheless, the Group’s EBITDA rose by 9% to CHF 43.8 million and EBIT increased by 10% to CHF 31.5 million. Net income declined by 10% to CHF 18.7 million due to currency movements. After using CHF 115 million for acquisitions and distributing a dividend of around CHF 57 million, the Group has cash holdings of CHF 120 million.

 
3A Composites recorded orders received of CHF 427.4 million (H1 2014: 349.9 million). Net revenues rose by 18% to CHF 392.5 million (H1 2014: 333.1 million). This resulted in EBITDA of CHF 40.6 million (H1 2014: 33.8 million), which translates into a return on sales of over 10%. EBIT amounted to CHF 28.9 million (H1 2014: 22.8 million).

One notable contributor to growth was the strong demand in the core materials business for wind energy, primarily in China. The architecture and display business in Europe continued to perform well. Alongside a stable trend in western European countries, revenues in southern Europe continued to recover slightly.

In the Middle East and the Asia-Pacific region, the architecture business failed to sustain the gratifying growth of recent years in the first half of 2015. Political uncertainty and project postponements into the second half of the year depressed revenue performance but do not cloud the positive long-term outlook.

In the USA, the architecture business made a modest start in the first quarter due to difficult weather conditions, although this was offset by a good second quarter. The display business turned in a solid performance.

Business in the transportation segment was on a positive track – compared with a weak prior-year period due to project postponements, revenues in the two main lines of business, rail vehicles and buses, increased sharply. However, margins were depressed by exchange rate effects.

The business and integration of Polycasa and Plastwag, the companies acquired at the end of March 2015, proceeded in line with expectations. The acquisition of PNG Balsa was completed on 30 June 2015. The costs associated with the acquisition and integration of these acquirees depressed half-year earnings by around CHF 2 million.

SSM Textile Machinery posted an orders received figure of CHF 36.3 million (H1 2014: 41.4 million). As expected, net revenues were down by 9% compared with the strong prior-year period to CHF 38.3 million (–8% in local currency). 

The markets in India and Bangladesh performed well, while the high prior-year revenues in Turkey and the countries of South East Asia could not be matched. China continued to experience lower-than-average investment activity.

EBITDA declined to CHF 4.5 million (H1 2014: 7.7 million), which translates into a return on net revenues of 12% despite a fall in volumes and the negative impact of currency movements.

Outlook

Overall, business performance in the second half of the year is expected to be at least on a par with the first six months. The measures initiated to offset the negative impact of the appreciation of the Swiss franc will take full effect in the second half of the year. In addition, the revenues and earnings of all acquirees will be fully effective in the second half of the year.