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Please find below all Forbo media releases listed by year.
Eglisau/Zurich, October 29, 2004
The Forbo business showed a positive development in spite of partly difficult market conditions. Sales in the first nine months are CHF 1,238.8 million (previous year CHF 1,204.6 million). The industrial earning power before special charges could be maintained.
At the same time, Forbo announces the intention to strengthen its equity base by a capital increase. The purpose of this move is to keep, restructure and further develop the flooring business under the Forbo umbrella for the best possible realisation of the value potential in the interest of the company and its shareholders.
Based on detailed analyses of the consequences of a divestment of the flooring business, the Board of Directors has decided unanimously to keep this core business under the Forbo Group’s umbrella. To this purpose, Forbo’s own resources shall be strengthened by an equity increase in the order of CHF 200 million. The existing US private placement will remain in place. A refinancing solution would have been feasible in principle, but an equity capital increase will allow the Forbo Group to further develop the three existing core businesses on their own and, as a result, to ensure the necessary strategic flexibility. In addition, the cost of repayment of the private placement, which would have been considerable, can be avoided.
With the additional equity capital, Forbo intends to improve by itself the operative performance and increase the profitability of all the three businesses. Detailed information about the planned capital increase will be made available in the second half of November.
Higher sales – unchanged profitability
Compared with the previous year, Forbo’s sales rose in the first nine months of 2004 by 2.8 % to CHF 1,238.8 million in both Swiss Francs and local currencies. The influence of the weaker Dollar was compensated to a large extent by the stronger Euro. Whereas currency-adjusted sales of the flooring business were just below the previous year’s level, adhesives and belting recorded clear growth. The industrial earning power before special charges could be maintained.
At CHF 411.8 million, sales in the third quarter are about on previous year’s level (CHF 412.8 million), however 2.4 % higher than in 2003 in currency-adjusted terms.
Solid financial situation
Net debt decreased by CHF 30.8 million and CHF 15.5 million compared with the end of June 2004 and the end of the year 2003, respectively. At the end of September 2004, Forbo had in total liquid assets of CHF 177.7 million.
Development of the Group’s businesses
The flooring business achieved sales of CHF 564.3 million in the first nine months. Despite unchanged, difficult market conditions the business succeeded in keeping sales just about on the previous year’s level, but in local currencies they decreased slightly by 1 %. Especially in North America and Australia, but also in Southern Europe, Forbo recorded slight growth, whilst sales were stagnating in the remaining parts of Europe.
With third quarter sales of CHF 187.3 million, the flooring business essentially developed according to the first half-year 2004. However, sales are below the level of the comparable period of the previous year.
The adhesives business recorded sales of CHF 443.1 million, a 5,5 % increase over the previous year’s period, or 6.7 % at comparable exchange rates. Notably the American market and some European countries contributed overproportionally to this growth. Besides, the exports to Asia could be increased further.
Sales in the third quarter were at CHF 146.6 million, i.e. on the level of the first two quarters and higher than in the previous year’s period.
In the first nine months sales of the belting business rose by CHF 8.7 million to CHF 231.4 million, corresponding with a 3.9 % increase over the previous year’ period, or 4.9 % in local currencies. This positive trend is mainly due to stronger demand in the growth markets of Asia and North America, and the market success of drive belts of the Extremultus product line.
At CHF 77.9 million, third quarter sales were somewhat higher than in the first two quarters and also above the third quarter 2003.
Outlook on the full business year 2004
For the entire business year, the company is expecting slightly higher sales than in the previous year. The operating result before special charges is expected to be somewhat below the previous year’s level.
Forbo is a global producer of floor coverings, adhesives and belts for drive, process and transport purposes. The company has approximately 5,600 employees and an international network of 30 production companies and 45 sales organisations in 30 countries.
This E. Schneider
Delegate of the Board
Tel: + 41 1 868 25 49
Fax: + 41 1 868 35 49
Chief Financial Officer
Tel: + 41 1 868 25 56
Fax: + 41 1 868 35 56