First half 2011 - Schweiter reports revenue growth in local currencies and 11% EBITDA margin

Horgen, August 19, 2011 - Net revenues amounted to CHF 425.0 million in the first half of 2011 (1H 2010: 465.5 million), which represents 3% growth in local currencies. 3A Composites and Ismeca Semiconductor increased their net revenues in local currency, while SSM Textile Machinery managed to hold net revenues almost on a par with the previous year’s gratifying result. Orders received reached CHF 480.3 million (1H 2010: 536.6 million). Expressed in local currencies, the figure was as high as in the previous year.

The Group posted EBITDA of CHF 46.3 million (1H 2010: 48.5 million) and EBIT of CHF 31.5 million (1H 2010: 33.7 million). Net earnings amounted to CHF 20.3 million (1H 2010: 23.6 million). The result includes currency losses of around CHF 9 million. Staff adjustments at 3A Composites led to income of just under CHF 4 million arising from a reduction in the actuarially determined staff pension obligations.

In a positive sector environment, SSM Textile Machinery reported new orders amounting to CHF 40.1 million (1H 2010: 47.2 million), resulting in net revenues of CHF 39.3 million (1H 2010: 42.5 million). After currency translation adjustments, this corresponds to a slight decrease of 2%. All regions – in particular India – reported healthy demand. Despite unfavorable exchange rates, margins were held, thanks in part to consistent efforts to cut costs. The operating result (EBIT) amounted to CHF 5.2 million (1H 2010: 7.2 million), which corresponds to a net profit ratio of approximately 13%. The lower result com-pared to the first half of 2010 was due to the slight decline in revenues and to upward revaluations of material inventories during the year-back period.

Amid buoyant demand, Ismeca Semiconductor reported new orders of CHF 50.9 million (1H 2010: 73.1 million). Around half of the considerable decrease compared with the previous year’s record level is due to currency effects. Revenues amounted to CHF 50.8 million (1H 2010: 50.4 million). As Ismeca invoices practically all its revenues in USD, in local currency this equates to a year-on-year increase of 18%. Despite unfavorable exchange rates, the gross margin was held thanks to Ismeca’s technological leadership. An operating result of CHF 4.8 million (1H 2010: 6.0 mil-lion) was reported, representing an EBIT margin of just over 10%.

3A Composites
recorded new orders amounting to CHF 389.3 million (1H 2010: 416.3 million) and revenues of CHF 334.7 million (1H 2010: 372.4 million), cor-responding to an increase of 2% in local currency. This translated into an EBITDA of CHF 36.7 million (1H 2010: 35.9 million) and an EBIT of CHF 22.6 million (1H 2010: 21.8 million). These figures include income of around CHF 4 million from wri-te-backs of staff pension obligations. The result was impaired by rises in the price of raw materials as well as restructuring costs of around CHF 4 million.
While progress in the European wind power market was consistently subdued, the robust demand in China continued thanks to strong footholds established in local OEMs. The marine market, which fell sharply during the financial crisis, showed some signs of recovering. Despite the more uncertain economic outlook, the cyclical Display business made encouraging progress in the US. In Europe in particular, Architecture suffered from rises in the cost of raw materials at the beginning of the year which could only be passed on to the market with some delay. In Asia, the Architecture and Display businesses were reorganized. Demand in China was reassuring, particularly for high-end façade cladding units.

In the second half of the year, SSM Texti-le Machinery and, in particular, Ismeca Semiconductor are expected to experience a strong slowdown.
The development of the Chinese wind power market going forward will be a key factor in the performance of 3A Composites’ core materials business. From the end of the year on, the possibility of a temporary slowdown owing to government measures will be offset by the positive impact of the joint venture concluded with a Chinese manufacturer of structural foams and a potential increase in demand in Europe and the US. Whereas in the US in particular, Architecture and Display are dependent on the economic cycle, business in Europe is not expected to change.
In all divisions, doggedly negative currency effects are to be offset by the positive impact of restructuring and costcutting programs, which will come fully into play at 3A Composites from Q4 onward. Overall, the result for the 2nd half will be lower.

A media conference on the results of the first half of 2011 for analysts, media representatives and investors will take place today, starting at 11am CET at the Hotel Marriott, Neumühlequai 42, 8035 Zürich.


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