Choose your country

Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2
Pulldown 2

WELCOME TO THE MEDIA ARCHIVE

Please find below all Forbo media releases listed by year.

Comments regarding Business Year 1998

Press Conference 1999: Comments regarding Business Year 1998

Business Development and Results
Eglisau, March 29, 1999 - Gross sales of CHF 1,832 million were 9.7% below the previous year, primarily as a result of the divestments of the laminates business and elements of the wallcoverings activities in 1997. After eliminating the effects of these divestments and of exchange rates, the effective growth in real terms of the turnover was 1%.
The operating result before depreciation (EBDIT) was CHF 228.3 million, an increase of 4.4%. The operating result (EBIT) of CHF 127.0 million, including fixed asset depreciation of CHF 101.3 million increased by CHF 21.8 million, or 20% above the previous year. This increase is a result of the divestments and restructuring activities, but also reflects cost reduction efforts at all levels.
In 1998, Forbo achieved its highest ever annual profit. The net income of CHF 76.7 million was an increase of CHF 35.6 million over the previous year, or an increase of 86.6%. In this context, it has to be noted that the previous year was depressed by a divestment charge of CHF 21.0 million.
The Group cash flow was CHF 178.0 million. During the reporting year, various restructuring activities and divestments were accomplished. The provisions made in previous years were sufficient to cover the costs incurred. The return on equity increased from 5.4% to 9.8%.
The Group shows a good liquidity and solid finances. The shareholder's equity represents 50.7% of the balance sheet total at year end. The net debt of CHF 244.7 million is equal to 137% of the annual cash flow.
The net profit generated by Forbo Holding amounted to CHF 33.0 million, CHF 1.8 million above the previous year. In the light of these results, the Board of Directors proposes that the Annual General Assembly should approve a dividend of CHF 22.- per share, corresponding to an increase of CHF 3.- in comparison to last year. The total dividend payment will therefore be CHF 32.4 million on an unchanged number of shares. Hence retained earnings of CHF 27.0 million will be carried forward. The proposed profit distribution in 1998 corresponds to 42% of the net income.

Personnel issues
As announced earlier, the Directors elected the former Deputy Chairman, Mr. Karl Janjöri, as Chairman of the Board and Dr. Willy Kissling as Deputy Chairman.
In order to supplement the Board, Dr. Paul Tanos, Member of the Management Committee of Wienerberger Baustoffindustrie AG, Vienna and Prof. Dr. Rolf Watter, Lawyer, Zurich will be proposed for election at the Annual General Meeting on 27 April 1999.

Shareholders
At the end of the year, 2'541 shareholders were listed in the share register. As far as the company is aware, no shareholder holds more than 5% of the voting rights.

Comments on Business Activities 1998
As a result of the divestment of loss-making businesses and restructuring of the wallcoverings activities, Forbo's organisation is now much more streamlined and focused on both the Flooring and Industry Specialties Businesses.
The gross turnover of CHF. 1,832 million is made up of 63% Floorcoverings and 37% Industry Specialities. Over 80% of the turnover has been achieved in Europe and about 55% in the Euro currency zone. This weighting has increased in 1998 in contrast to previous years because of the adverse economic business development in Asia, Russia and Eastern Europe. However, Forbo will continue to pursue its efforts to strengthen its position in these markets.
The Flooring Business sales of CHF 1,150 million decreased by 2%* in comparison to the previous year, as a consequence of restructuring measures leading to a turnover reduction in the wallcoverings business, which was still included in this sector with sales of CHF 84.0 million. In spite of the difficult market circumstances, the linoleum and textile floorcoverings businesses improved their sales by 2%* and the vinyl floorcoverings suffered a decrease of 4%*, which was less than the general market development in this field. The operating results for floorcoverings increased by 1% to CHF 96.9 million, whereas the return on sales increased from 8.1% to 8.4%.
The turnover of the Industry Specialties Business increased by 5% to CHF 682.0 million. Technical coatings (transport and drive belts), which include a significant business outside the European market, achieved an increase of 3%*, and even more so, the adhesive business grew by 7%*. Decorative films reported a further above average growth of 16%. The operating result increased by 58.6% to CHF 48.7 million and the return on sales improved from 3.7% to 7.1%.
Total investments for 1998 amounted to CHF 159.0 million divided equally between both Group Businesses. The major investments were made in the Siegling factory in Hanover, Germany to enable the production of conveyor belts up to 4.5 m width, in an innovative plant for the production of cushion vinyl floorcoverings at Forbo Novilon, Coevorden (NL) and in new manufacturing equipment for decorative films at Forbo CP, Cramlington (UK).
In total, the Group's return on operating capital employed has improved from 8.8% to 10.5%.

Outlook
The outlook for both core businesses, Floorcoverings and Industry Specialties, is considered to be favourable, especially since Forbo has many activities with further potential for expansion and has already achieved leading positions in some of the important market segments of both core businesses.
Such conditions are a good foundation for a strategy of profitable growth, which will lead to a stable increase in the enterprise value. The market turbulence experienced in 1998 has continued to affect sales in the early months of the current year. However, the Group expects that the many strategic and cost reduction measures already taken will lead to a further increase in earnings in 1999.

* excluding divestments and exchange rate effects