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Please find below all Forbo media releases listed by year.
Eglisau, July 25, 2002
The positive development of the adhesives business and the unsatisfactory market situation in Flooring and Belting mark the first half-year of 2002. Including sales of the acquired Swift Adhesives Business as of April 19, 2002, total sales of CHF 721.9 m were reached. This corresponds with an increase of 7.6% in local currencies or 3.4% in Swiss Francs of the continued operations. Compared with the strong first half-year 2001, the consolidated profit of CHF 24.5 m (previous year CHF 33.1 m) is weaker. Swift has already had a clearly positive impact on the result.
Development of results
Net sales are at CHF 721.9 m, including CHF 75.0 m of the Swift activities. Based on the continued operations, this corresponds with a 3.4% increase in Swiss Francs. Excluding the Swift activities, net sales decreased by 7.8% to CHF 644.3 m, of which about 4% relate to adverse exchange rates. The operating profit (EBIT) is at CHF 44.4 m, which is CHF 6.2 m or 12.3% below the previous year's level. This includes the Swift business with CHF 7.8 m after deduction of CHF 1.6 m amortization for goodwill paid. This decrease of the operating profit in the first half-year is mainly due to reduced sales in the key markets as a result of the difficult economic situation. Except for Adhesives, all the Businesses suffered from these conditions. Substantial cost savings were implemented in response to the result development.
Sales as well as the operating profit have improved on a comparable basis to the previous quarter for the second time in sequence.
The consolidated profit after tax for the first half-year 2002 declined to CHF 24.5 m (previous year CHF 33.1 m), of which around CHF 2 m are currency-related. This result includes the Swift Business for two and a half months. In the second half year, Swift will impact the sales and profit for the entire period.
The company's liquidity position is at CHF 133.6 m good, associated with a solid equity basis. The expected free cash flow on previous year's level (CHF 74 m) will further strengthen the financial situation by year-end.
Linoleum could once again slightly increase its relative share in the total floor covering market which was declining in the important European countries, especially so in Germany. Despite the maintained market shares within this product category, noticeable lower sales were recorded especially in Germany, Switzerland, and France. Slight increases were achieved in Great Britain and the United States. Sales on previous year's level could be kept up in Scandinavia. The situation with Vinyl proves to be more difficult as the markets which have been traditionally significant for Forbo remained under pressure. In contrast, sales continued to develop very positively in Eastern Europe.
The Adhesives Business recorded internal growth and slightly improved the contribution margin, with adhesives for industrial applications as well as adhesives for floor and wall applications contributing more or less to the same extent. With the acquisitions of the Spanish adhesives producer Carzuh and SABA in Germany, the share in the European adhesives business for automotive applications could be expanded substantially. The global Belting Business, which essentially depends on original equipment manufacturers (OEM) and investments in the logistics infrastructure, continues to suffer from the prevailing economic conditions. This could only be partly compensated by efforts made in recent years to reduce costs and improve the product and service offer.
Growth through acquisitions
The purchase of the Swift Adhesives Business in April 2002 was an important strategic step in that it gave Forbo access to the attractive North American market. Besides, the Forbo Group is expanding with this acquisition its market position in Europe, both geographically and technologically, while using numerous synergies. In the period from April 19 to June 30, 2002, the Swift Adhesives Business recorded net sales of CHF 75.0 m. The operating profit before depreciation and amortization (EBITDA) at CHF 11.1 m reflecting a return on sales of 14.8% was significantly above the expectations. Thus Swift's contribution to the Group's profit is clearly positive.
In spite of difficult conditions in the key markets, Forbo firmly keeps to the objective of achieving an operating profit that is above the previous year's level. The successful integration of the Swift activities will make an essential contribution to this objective since, in the second half year, this business will have a positive impact on the sales and profit for the entire period. However, reaching this goal will essentially depend on the further general economic development.
Forbo is a global manufacturer of floor coverings and industry specialties. The Group employs some 5 700 people and has an international network of 39 production companies in 12 countries and 79 marketing organizations in 28 countries.
Head of Corporate Communications
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Chief Financial Officer
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