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Please find below all Forbo media releases listed by year.
Eglisau, July 26, 2001
In an increasingly difficult economic environment, the Forbo Group with its floor coverings and industry specialties businesses succeeded in recording sales of CHF 792.0 million in the first half-year 2001. In currency-adjusted terms and on a comparable basis this corresponds to an increase of 1.2% over the first six months of the previous year. Besides the vigorous implementation of the Group's strategy additional cost-cutting measures have been taken.
At CHF 56.4 million, the operative result of the continued business was effectively 15.2% below the comparable period in 2000. This decrease was due, on the one hand, to unfavorable currency exchange rates which alone account for CHF 2.5 million. On the other hand, it was the result of the economic downturn and pressure on margins through higher production costs. The Group's net profit of CHF 33.1 million was 24.9% below the first six months of the previous year, partly due to the clearly weaker financial result. This was influenced by non-realized valuation losses of CHF 1.8 million resulting from the stock market development. The financial result also includes interest cost of the share buy-back program which successfully contributes to the optimization of the capital structure. To date a total of 9.0% of the share capital have been acquired. A solid equity capital basis of 46.1% accompanies the good liquidity of the Group.
The share of the non-European business in Group sales could be increased to 21.4%. In the Floor Coverings business, the core product Linoleum recorded a sales growth of 3.1% in currency-adjusted terms, mainly due to a 15.4% increase in the USA. As opposed, sales in Germany decreased by 6.4% because of market conditions. Sales of Vinyls remained nearly unchanged (+ 0.7%) at slightly higher margins. In the Industry Specialties business, Belting suffered from the basic economic conditions (-1.1%) especially in the USA and in Asia. The launching costs of the new production plant in Hanover still burden the result. Adhesives sales showed a positive overall development (+4.4%), whereas raw material prices continue to be reason for concern.
Strategic projects for intensified market coverage, product innovation and higher efficiency in the use of resources continue as planned in spite of the existing pressure on profitability. Additional cost-cutting measures – notably in the areas of production, logistics, and organizational structure – were initiated in response to the cyclical downswing. As a result, further adjustments to the number of personnel are indispensable, mainly in the USA and in Asia. Compared with today's 5 833 employees Forbo anticipates to have up to 80 jobs less by the end of 2001.
Forbo operates in a short-term-oriented business that cannot rely on large orders on hand. This does make prognoses difficult, but changes of the market sentiment will have immediate positive effects on business performance. Targeted market focus and intensive marketing activities in addition to the initiated short-term measures make Forbo expect a stronger second half year.
Forbo is a global manufacturer of floor coverings and industry specialties. The Group employs some 6 000 people and has an international network of 28 production companies in 12 countries and 70 marketing organizations in 26 countries.
Head of Corporate Communications
Tel: + 41 1 868 25 69
Fax: + 41 1 868 35 69
Chief Financial Officer
Tel: + 41 1 868 25 25
Fax: + 41 1 868 25 26