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Please find below all Forbo media releases listed by year.
Eglisau, March 27, 2000
The Forbo Group recorded 1999 gross sales of CHF 1'874 million (previous year: 1'832 ). Floor coverings increased sales by 2.1% to CHF 1'088 million (previous year: CHF 1'066 million), while sales of industry specialties were up 2.6% at 786 Mio (previous year: CHF 766 Mio). Group profit rose by 12.3% to CHF 86.1 million. After deduction of specific provisions for strategic renewal of CHF 70 million (after tax), the resulting group profit is CHF 16.1 million.
Success in core businesses
Forbo increased 1999 gross sales to CHF 1'874 million (previous year: 1'832 million) as a result of improved trading conditions in the second half year. Floor coverings recorded a sales increase of 2.1% to CHF 1'088 million (previous year: CHF 1'066 million). Sales of the industry specialties division were up 2.6% at 786 Mio (previous year: CHF 766 Mio).
The core product linoleum accounted for 40.7% of floor covering sales. Forbo - world market leader in this field with a market share of about 60% - increased 1999 sales by 4.0% to CHF 443.1 million, among others as a result of the successful launch of new product ranges in different markets, such as in the USA. The plastic floor covering market is suffering from over-capacities and price erosion. With CHF 370.7 million, sales were only 1.2% lower than in the previous year thanks to the focused coverage of selected customer segments.
The dynamic development of the two core products of the industry specialties division, i.e. belting and adhesives, continued. Belting sales rose by 8% to CHF 339.5 million in spite of essential price pressure. Forbo's market leadership could be strengthened with the introduction of new products and the expansion in new, attractive segments. Adhesives benefited from picking-up demand in key markets. Sales rose by 6.9% to CHF 223.7 million.
Trading conditions improved in the second half of 1999 after the relatively weak first half year. The combined effect of this development, cost saving programs and the emphasis on core products boosted group profit by 12.3% to CHF 86.1 million over the previous year. The group profit is CHF 16.1 million after deduction of specific provisions of CHF 70 million (after tax) for the group's strategic renewal. The provisions have not been touched so far. The group will inform stakeholders in detail when provisions are being used.
Positive Cash Flow Development
The group cash flow is CHF 191.6 million, CHF 13.6 million or 7.6% higher than in the previous year. As a result of this improvement and focused investment activity, the positive free cash flow after capital costs was CHF 35.3 million. This is an increase of CHF 55.3 million against the previous year. Consequently the net debt could be reduced by CHF 39.6 million to CHF 205.1 million against 1998.
Forbo has a solid financial basis with 46% shareholders' equity in the balance sheet sum. "Our strength is based on solid financing and a high level of liquidity", says Gerold Zenger, Chief Financial Officer. "This is the financial basis for the further expansion of the group's activities".
The annual profit of Forbo Holding AG is CHF 33.5 million (previous year: CHF 33.0 million). The Board of Directors proposes a dividend of CHF 22.- per registered share, as in the previous year. The dividend distribution is CHF 32.4 million, related to the same number of shares as in 1998.
Besides, the Shareholders' Meeting will propose the nomination of Michael Pieper, Chief Executive Officer of the Franke Group, to the Board of Directors.
The company's renewal announced in December 1999 and its new organization will leverage Forbo's strategic outlook. All positions of the Executive Board have been filled. In the year 2000 the focus will be on the strategic business units that account for roughly 80% of group sales. "Our goal is sustainable sales and profit growth. We have taken strategic action to focus business activities, enhance market orientation and expand core businesses. We will seek to achieve a significant increase in sales by means of internal growth and targeted acquisitions", Werner Kummer, Chief Executive Officer, said. "For the year 2000, we are expecting another improvement in group profits which should actually exceed the budgeted sales increase of 4 - 5%. This means that we should be coming closer to our mid-term goals already in this year.
Forbo is a global company committed to the development, production and marketing of products and systems for floor coverings and industrial specialties. It employs some 7 000 people worldwide and has an international network of 29 production companies in 12 countries and 71 marketing organizations in 25 countries.