MEDIA RELEASE

Schwerzenbach, 21 February 2017

WALTER MEIER CLOSES 2016 UP SIGNIFICANTLY ON THE PREVIOUS FINANCIAL YEAR - SALES KEPT CONSTANT

PLANNED COMBINATION WITH TOBLER TO CREATE A LEADING SWISS BUILDING TECHNOLOGY PROVIDER

  • Sales kept stable at the prior year's level
  • EBIT margin comes to 5.4 per cent
  • Net income reaches CHF 2.02 per share
  • Proposed dividend payout at CHF 2.00 per share
  • Combination with Tobler to make Walter Meier a leader in Swiss building technology

Walter Meier recorded sales of CHF 239.6 million, a marginal fall of 0.5 per cent compared to the prior year. This was due to very strong demand in the project business involving air-conditioning systems, which fully offset low order levels in the replacement business.

The Group's continuing operations, i.e. the Climate Technology business, reported EBIT of CHF 13.0 million in the reporting year, following CHF 9.4 million in the prior year. This equated to an EBIT margin of 5.4 per cent (prior year 3.9 per cent). The operating result was significantly eroded by one-off project-related costs connected with moving into and opening the new distribution centre.

In terms of net income, these non-recurring expenses were almost fully offset by proceeds from the sale of properties in line with expectations. Compared to the prior-year figure of CHF 7.4 million, net income for 2016 came to CHF 14.7 million, or CHF 2.02 per share.

Due not least to the investment made in the highly automated central warehouse, free cash flow was negative in 2016 at CHF -5.8 million (prior year CHF 18.9 million).

As of year-end 2016, financial liabilities amounted to CHF 35.0 million as anticipated (prior year CHF 11.0 million) and net debt was up significantly year on year (CHF 27.8 million as against CHF 6.7 million). Besides operating cash flow and dividend payouts, these items mainly reflect the investment made in the new central warehouse.

Equity increased slightly to CHF 32.3 million at year-end 2016 (prior year CHF 32.2 million). The investment in the new central warehouse has increased total assets and liabilities, pushing the equity ratio down to 25.4 per cent (prior year 29.4 per cent).

The number of employees remained unchanged at the end of 2015 at 774 (full-time equivalents).

239 570

16 947

12 971

5.4

14 715

2.02

-5 865

KEY FIGURES

1 January to 31 December

in thousand CHF

2016

2015 1)

Variation in %

Sales

240 690

-0.5

EBITDA

13 149

28.9

EBIT

9 400

38.0

as a % of sales

3.9

Net income

7 420

per registered share in CHF

1.02

Free cash flow

18 938

in thousand CHF

31.12.2016

31.12.2015

Financial liabilities

11 004

Liquidity, net

-6 673

Equity

32 174

as a % of total assets

25.4

29.4

Number of employees (FTEs)

774

774

35 000

-27 811

32 300

1) Prior-year figures only disclosed for continuing operations, i.e. the Climate business unit.

Walter Meier Ltd. and Tobler Haustechnik AG are to integrate, creating a leading Swiss building technology provider.

Walter Meier is to pool its systems and service skills with Tobler's retail and logistics expertise. The move to join forces will create a leading building technology company for Switzerland with a wide range for the wholesale of products, components and accessories and covering heating and cooling systems as well as the service business.

Tobler generated sales around CHF 330 million in the past financial year, employing some 700 staff. In terms of their current profitability, Tobler and Walter Meier are very similar, meaning that the two companies are set to merge in a ratio of 1:1.

Rather than doubling, however, the number of Walter Meier Ltd. shares will only be increased by 4,705,412 from its present level of 7,294,588. A payment of CHF 117.8 million to Wolseley has been destined to cover the remainder and even out differences relating to items on the two companies' balance sheets, with bank loans furnishing the necessary liquidity.

UK-based heating and plumbing distributor Wolseley will hold around 39.2 per cent of Walter Meier shares once this transaction is complete. Current major shareholder Silvan G.-R. Meier, who holds his stake via Greentec AG, is backing the transaction.

He is to lose his majority stake in Walter Meier Ltd. and will hold 33.5 percent of Walter Meier shares. The capital increase that Walter Meier Ltd. is to carry out will see the current shareholders lose their subscription rights, which will be transferred to Wolseley. The two largest shareholders, Silvan G.-R. Meier (via Greentec AG) and Wolseley, will exercise joint control of Walter Meier Ltd. under a shareholders' agreement.

As things stand, Walter Meier expects its net debt to increase to around

CHF 170 million as of year-end 2017. Walter Meier forecasts that the new company should be in a position to generate EBITDA of more than CHF 60 million over the long term once the integration process is complete. A steady reduction in net debt should therefore be possible over subsequent years, even if the current dividend policy is maintained.

Combination in 2017, new company to launch in 2018

As the situation stands, implementing the combination between Walter Meier and Tobler should be achievable in the second quarter of 2017. It will hinge on the Annual Shareholders' Meeting of Walter Meier Ltd. approving the necessary capital increase and on the planned combination being passed by the Swiss Competition Commission.

The transaction will introduce a new Group Management team. The current CEO of Walter Meier Ltd., Martin Kaufmann, will remain responsible for managing the company. His deputy will be the present CEO of the Tobler Group, Arnold Marty, who will be in charge of sales, product management and marketing. The Tobler Group's current CFO, Andreas Ronchetti, is to hold the same role in the new company and will also be the third member of its Group Management. His counterpart at Walter Meier Ltd., Matthias Ryser, will leave Group Management and be in charge of integrating the two companies.

The two companies will enter the market in early 2018 under a new, shared name.

Annual Shareholders' Meeting

The Board of Directors of Walter Meier will submit a proposal to the Annual Shareholders' Meeting on 24 March 2017 to issue a dividend payout of CHF 2.00 per share.

At the same time, it will also propose that ordinary share capital be increased by CHF 470,541.20 to CHF 1,200,000 by issuing 4,705,412 fully paid-up registered shares.

The current members of the Board of Directors Alfred Gaffal, Silvan G-R. Meier (as Chairman) and Heinz Roth are standing for re-election. Paul Witschi is also standing for re-election but will leave the Board of Directors after the two companies have merged. Simon Oakland and Heinz Wiedmer, representing the Wolseley Group, will also be put forward for election to the Board of Directors, although their term of office would not start until the transaction has been completed.

Outlook for 2017

The projects completed over the past year, especially the opening of the highly automated central warehouse in Nebikon, will boost the company's operating capabilities. As the situation stands, net income is expected to remain stable and on a par with the previous year in both units, although the result for 2017 is likely to be encumbered by integration costs in the low eight-figure range.

In view of the company's robust financing and medium-term earnings forecasts, the intention is to keep the dividend unchanged at CHF 2.00 per share for the coming year as well.

More Information

Walter Meier, Corporate Communications

Phone +41 44 806 41 41, group@waltermeier.com

Key dates 24 March 2017 Annual Shareholders' Meeting

The climate technology group Walter Meier operates with a focus on the Swiss market. The company was founded in 1937 and today generates sales of some CHF 240 million with around 770 employees. Shares in Walter Meier are listed on the SIX Swiss Exchange (symbol WMN).

This media release and the Annual Report 2016 are available at

www.waltermeier.com/investors.

Walter Meier AG

Bahnstrasse 24, 8603 Schwerzenbach, Switzerland

Phone +41 44 806 41 41, Fax +41 44 806 49 49

group@waltermeier.com, www.waltermeier.com

Walter Meier AG published this content on 21 February 2017 and is solely responsible for the information contained herein.
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