P +41 58 787 25 41
Please find below all Forbo media releases listed by year.
Eglisau, December 7, 1999
Announcing its results for the first ten months of the 1999 business year, the Forbo Group, with worldwide operations in Flooring and Industry Specialties, reported gross sales of CHF 1.562 billion, largely unchanged from the CHF 1.559 billion posted in the prior-year period. However, net income after tax was up 5.8% from CHF 70.5 million to CHF 74.6 million. Following a downturn in the first half of the year, business picked up slightly in Europe, Asia and the USA in the second half. The cost-cutting measures introduced in the course of the year have begun to take effect. Despite persistent pressure on prices, most notably in the flooring and belting markets, the Group's operating profit for the first ten months of 1999 financial year was above the previous year's figure. Speaking at the press conference to announce the Group's results, Werner Kummer, CEO and President of the Executive Board, also presented information on Forbo's strategic reorientation, aimed at enhancing the Group's enterprise value by systematically focusing on profitable core businesses. By pushing the pace of internal growth in its strategic businesses and by making carefully selected acquisitions, the Forbo Group aims to boost sales up to CHF 3 billion over the next five years. The Group's strategic reorientation has necessitated a number of adjustments to the Group's organisation as well as the expansion of the Group Executive Board by two new members. Implementation of the new strategy will also require valuation adjustments and restructuring provisions in the order of CHF 70 million net of tax, which will be charged to the Group income statement for 1999. The planned restructuring will lead to the loss of up to 200 jobs throughout the Group as a whole, however, the growth strategy will allow to increase the number of personnel in some businesses.
In the first ten months of the current financial year Forbo Group's gross sales reached CHF 1.562 billion (previous year: CHF 1.559 billion). In the Flooring Division, gross sales of linoleum increased by 2.5% to CHF 371 million, from CHF 362 million in the previous year. Thanks to successful marketing in selected customer segments, Forbo posted gross sales of CHF 312 million in cushion vinyls (previous year: CHF 323 million). This was 3.4% lower than in the prior-year period, but the decline is substantially less than that experienced by the market as a whole. Gross sales in the Industry Specialties Division were flat (CHF 652 million, against CHF 651 million the previous year), reflecting the impact of restructuring measures as sales fell in the decorative films and extruded profiles businesses. The belting business witnessed a 3% rise in sales, from CHF 305 million to CHF 314 million. The adhesives business continued to operate highly successfully, registering a 5.1% increase in gross sales from CHF 178 million to CHF 187 million.
Positive earnings development
Thanks to carefully targeted restructuring measures and consistent efforts to cut costs, and in spite of persistent pressure on prices, most notably in the flooring and belting industries, the Forbo Group was able to lift earnings before depreciation, interest and tax (EBDIT) by 2% from CHF 199 million to CHF 203 million and earnings before interest and tax (EBIT) by 2.7% from CHF 113 million to CHF 116 million. Group profit at the end of October 1999 stood at CHF 74.6 million, compared with the previous year's figure of CHF 70.5 million (a 5.8% rise). Thanks to the carefully targeted and restrictive allocation of available funds, investments in fixed assets fell by 18.1% from CHF 105 million to CHF 86 million. The total number of Group employees at the end of October 1999 was 6'838 (1998: 6'781). The implementation of the Group's strategic reorientation will necessitate restructuring provisions and valuation adjustments totalling some CHF 70 million net of tax. These will be charged to the 1999 Group income statement. Thanks to the Group's expected operating results and its sound financial position, investors may assume that the dividend distribution will remain unchanged.
Objective: sustained increase in value
At the press conference held to announce the results for the first ten months of 1999, Werner Kummer also presented information on the Forbo Group's strategic renewal programme. By focusing systematically on its strategic core businesses of linoleum, cushion vinyl floorings, belting and adhesives and by intensifying its marketing activities accordingly, Forbo intends to bring about a substantial increase in its enterprise value. As far as the remaining businesses are concerned, future results will show whether these can be developed into autonomous Strategic Business Units or whether they can be integrated into existing Strategic Business Units; alternatively they may be spun off from the Group altogether. At the same time, Forbo aims to transform itself from a manufacturing-oriented company into one geared primarily to marketing. In order to implement this strategy, management responsibility at Group level will be reorganised and the Group Executive Board expanded from its former five members to seven. The Group's four strategic businesses will each be headed by a member of the Group Executive Board.
Over the next five years the Group aims to achieve total sales of up to CHF 3 billion. This will be achieved by means of a more sharply focused and dynamically managed product portfolio, the expansion of the Group's existing market positions, the targeted deployment of funds in strategic core businesses, internal growth and acquisitions. In the medium term, Forbo's objective is to achieve a 16% operating return (before depreciation) on sales and a 15% return on assets. In doing so Forbo, which the Swiss Stock Exchange will reassign from the 'Construction and building materials' segment to "miscellaneous industries" on 1 January 2000, will develop from a mid-cap in the direction of a SMI stock.
Press conference to announce annual results /
Financial analysts' meeting: 27 March 2000
Annual General Meeting of Shareholders: 3 May 2000