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Please find below all Forbo media releases listed by year.
Eglisau, October 28, 2002
For the third consecutive time, Forbo has reached a better quarterly result than in the previous quarter. This means that the Group has nearly caught up on the the shortfall of the result that still existed at mid-year. This was due to the Swift adhesives activities acquired in April and the other businesses. In the third quarter of 2002, Forbo recorded sales of CHF 417.2 million, corresponding with a 22.7% increase not considering the carpets business sold in October 2001. The reason for this increase is the takeover of the Swift adhesives activities in April. The operating profit (EBIT) in the third quarter was CHF 29.6 million. The operating profit for the first nine months is CHF 74.0 million (previous year 74.3 million) whereas this result suffered CHF 3.6 million from currencies translation into the strong Swiss Franc. Consolidated profit reached CHF 40.2 million and is thus CHF 3.4 million below the result of the corresponding period of the previous year. At mid-year, the difference was still CHF 8.6 million.
Sales and profit development
Forbo recorded sales of CHF 417.2 million in the third quarter of 2002. Excluding the carpets business sold in October 2001, this corresponds with an increase by 27,4% in local currencies, and 22.7% expressed in Swiss Francs. The Swift activities acquired in April contribute CHF 88.9 million to the sales. Without considering this acquisition, sales in local currencies were 0.6% higher. The operating profit (EBIT) in the third quarter is CHF 29.6 million. Without Swift, the operating profit is CHF 22.9 million, or CHF 3.2 million above the third quarter of the previous year.
In the first nine months, the Forbo Group reached sales of CHF 1 139.1 million, including CHF 163.9 million of the Swift activities. Without the carpets business, this corresponds with a 9.7% increase. Not considering the Swift business, sales of CHF 975.2 Mio decreased by 2.0% in local currency and by 6.1% in Swiss Francs compared with the corresponding period of the previous year.
After the first nine months of the business year, the operating profit is at CHF 74.0 million, and is almost unchanged from the previous year (CHF 74.3 million). Thus, the shortfall of CHF 12.0 million at mid-year could be caught up. This was due to both, the Swift activities and the other businesses. The operating profit from Swift alone is CHF 14.7 million after deduction of CHF 3.7 million amortization for goodwill paid. Not considering the Swift adhesives activities, the operating profit is CHF 59.3 million compared with CHF 70.3 million in the first nine months of the previous year. This decline is caused by unfavorable currency developments (CHF –3.6 million) and lower sales in key markets as a result of a difficult economic situation.
The consolidated profit at CHF 40.2 million is CHF 3.4 million below the corresponding period of the previous year. At the end of June, the respective shortfall was still CHF 8.6 million. After deduction of goodwill amortization and financing costs Swift is already making a positive contribution to the consolidated profit.
The liquidity of CHF 146.3 million continues to be good. Net debt was further reduced compared with the mid-year 2002 and amounted to CHF 531,0 million at the end of September 2002. For the total year, a free cash flow (before dividend) on the previous year's level (CHF 74 Mio) is still being expected.
Sales in the core business of linoleum decreased slightly in key European markets in parallel with the general economic trend. This applies particularly to Germany, Sweden, and Switzerland. The further expansion in the United States is very positive. In the vinyl business, the upward trend continues in Eastern Europe and in Asia. In contrast, sales declined in France, Switzerland, and in the Benelux countries, and notably in the difficult German market.
The adhesives business recorded a growth of more than 2% without acquisitions. The development in the Benelux, France, South and Eastern Europe is very positive and promising. The integration of the Swift activities into the Forbo Group is making very good progress. In North America, the separation of Swift sites from the Reichhold Group has almost been concluded. The move of the North American headquarters to a new site has been completed. The entire European market is now covered by a distribution network following the reorganization in Europe. The assignment of the markets to production sites specialized on individual product groups has been implemented.
The global belting business continues to suffer considerably from the reluctance of the general investment activities. In the third quarter, a clear stabilization could be observed in Europe and Asia and a slight recovery in the United States compared with the first two quarters of 2002.
Based on the overall economic situation it can be expected that the results of the fourth quarter will be below those of the third quarter. Nevertheless, the company anticipates that an operating result which is higher than in the previous year is still achievable. All the measures taken for further cost cutting are given full attention. In parallel, the development and launch of new products is being accelerated. High priority has the continuous generation of a substantial positive free cash flow, coupled with a further reduction of net debt.
Forbo is a global manufacturer of flooring, adhesives as well as conveyor and drive belts. The Group employs some 5700 people worldwide and has an international network of 40 production companies and 80 marketing organizations in 30 countries.
Head of Corporate Communications
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Chief Financial Officer
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