Results for 2003. Handsome profits. Healthy balance sheet.

Press release 03-05-2004

The unaudited accounts for 2003 show that orders received by the Group increased 11% to CHF 288.6 million (2002: 260.1 million). This contrasts with the declines reported in the two preceding years. Sales came to CHF 270.0 million (2002: 322.4 million). The 16% contraction was reflected in a CHF 15 million falloff in sales across all divisions with the exception of Satis Vacuum (down CHF 4 million). SSM Textile Machinery and Satis each widened their operating profit margin considerably. Compounding the impact of lower sales volumes, Ismeca Automation and Ismeca Semiconductor also saw their results pressured by expenditure on adjustments and innovation.

The Group reported an operating result (EBIT) of CHF 17.2 million (2002: 40.2 million operating loss, including a 46.7 million goodwill impairment), resulting in net income of CHF 17.7 million (2002: 48.7 million net loss). Cash flow from operations amounted to around CHF 37 million (2002: 46 million). The Group posted year-end liquidity of CHF 49 million. Deduction of interest-bearing liabilities produced a net cash position of CHF 40 million (2002: 6 million). The equity ratio increased from 52% to 62%.

The Board of Directors will propose to the Annual General Meeting of May 19, 2004, that, in lieu of a dividend payment, the nominal value per share be reduced by CHF 3 to CHF 10, corresponding to the distribution of one quarter of net income for the year.

Key figures:

(Group, consolidated, YTD, in CHF millions)

2002 2003+/-
Orders received 276.2 288.6+ 11%
Gross revenues 322.4 270.0- 16%
Operating profit (EBIT) - 40.2 7.2-
Net income (loss) - 48.7 17.7-
Employees (31.12.) 824 741- 10%

SSM Textile Machinery
SSM Textile Machinery witnessed a 15% year-on-year decline in sales to CHF 109.7 million (2002: 129.0 million). However, thanks to a significant improvement in margins, operating profit (EBIT) came to CHF 20.1 million (2002: 20.0 million), corresponding to an EBIT margin exceeding 18%. The division’s sound result was driven mainly by its focus on lucrative projects and the operational progress made in air texturing.

Satis Vacuum
Satis Vacuum posted sales of CHF 65.2 million (2002: 69.2 million), while the operating result improved substantially to CHF 8.5 million (2002: 1.2 million). The EBIT margin amounted to 13%. Satis Vacuum’s strong market position and lean structures and the non-recurrence of impairment charges to the 2002 statements produced the division’s very solid result.

Ismeca Automation
Again in 2003, Ismeca Automation suffered from the slump in the capital goods industry. Sales contracted to CHF 34.3 million (2002: 50.3 million), producing an operating loss of CHF 3.4 million (2002: 25.9 million operating loss, including a 21.1 million goodwill impairment). Capacity adjustments meant a further 25% of jobs had to be shed. Despite a generally unsatisfactory result, Ismeca Automation delivered a balanced operating result in the second half and made operational advances. Medical and pharmaceutical automation equipment accounted for some 40% of division sales, proof positive of Ismeca Automation’s successful entry into this market.

Ismeca Semiconductor
Ismeca Semiconductor did not begin to profit from the semiconductor industry’s recovery until the 4th quarter 2003. Although the volume of orders received more than doubled year-on-year, sales saw a renewed decline, amounting to CHF 61.1 million (2002: 73.5 million). However, operational improvements and the absence of a goodwill impairment led to a significantly reduced operating loss of CHF 8.0 million (2002: 35.1 million operating loss, including a 25.6 million goodwill impairment). Ismeca Semiconductor also had to adjust capacity again, necessitating a 12% reduction in jobs.

SSM Textile Machinery and Satis Vacuum have both started 2004 on a positive note. Ismeca Semiconductor and Ismeca Automation in particular can expect to benefit from a stronger economy in 2004. The two divisions have started the year with significantly higher volumes of orders. On the other hand, the persistently weak dollar is depressing margins.