Revenues at prior year level, increase in operating result

March 18, 2015 at 02:05 am EDT

Press Release

Revenues at prior year level, increase in operating result

Net revenues of CHF 487.4 million at prior year level (-0.5 percent)
EBITDA of CHF 55.7 million exceeds prior year figure; EBITDA margin 11.4 percent
Consolidated net income of CHF 14.7 million significantly exceeds the prior year figure
Growth in two segments, higher EBITDA in three segments
Distribution expected to be at the prior year level, i.e. CHF 1.80

In the financial year 2014, Looser Holding AG, headquartered in Arbon (Switzerland), generated net revenues of CHF 487.4 million, which thus remained at the prior year level. After adjustments for currency, acquisition and divestment effects, revenues declined slightly from 2013 by 0.8 percent. The operating result (EBITDA) amounted to CHF 55.7 million, which corresponds to an increase by about 3.1 percent against the previous year (prior year: CHF 54.0 million). At 11.4 percent, the EBITDA margin slightly exceeded the prior year level (prior year: 11.0 percent). Earnings before interest and taxes (EBIT) amounted to CHF 30.5 million, including impairments of property, plant and equipment in the amount of approx. CHF 2 million, mainly relating to the relocation of Feyco's production plants in St. Margrethen and Urdorf to Bendern (Principality of Liechtenstein). The EBIT margin was 6.3 percent.

Higher consolidated net income, sound financial base

In the year under review, the consolidated net income of the Looser Group increased to CHF 14.7 million (prior year: CHF 3.4 million). It should, however, be noted that substantial impairments of goodwill and intangible assets had been reported in the previous year. Shareholders' equity as of 31 December 2014 amounted to CHF 217.9 million. The balance sheet continues to be sound with an equity ratio of 41.8 percent. Net debt was reduced markedly from 31 December 2013 by CHF 25.1 million to CHF 119.7 million (prior year: CHF 144.8 million). This reduction was mainly due to the cashflow from operations and an active management of net current assets.

Dividend distribution at prior year level

Thanks to the sound balance sheet and financial flexibility, the Board of Directors will be in a position to propose to the general meeting that a dividend of CHF 1.80 per registered share entitled to dividend be distributed, free of Swiss withholding tax, from capital contribution reserves. This corresponds to a dividend payout ratio of about 46 percent.

Forward-looking investments

In the year under review, the Looser Group made net investments of CHF 21 million, about CHF 5.3 million thereof in soil remediation and in the first stage of the construction of the new production and logistics building at the Schekolin Group's main location in Bendern, as well as in a new ERP system, also at the Bendern location. These investments made by the Looser Group formed the basis for the use of synergies between the two product areas wood coatings and packaging coatings and thus for a more competitive performance and higher quality standards. Other major investment projects were the expansion and replacements of rental assets in the Industrial Services segment and the installation of a high-performance processing center for the more efficient production of specialist doors as well as a new milling machine for the production of door frames at the Prüm-Garant Group in Weinsheim.

Coatings Segment: concentration measures completed; unexpectedly weak development in the fourth quarter of 2014

The concentration on the three main product areas, wood coatings, packaging coatings and non-stick coatings, was completed with the sale of Feycolor Group in March 2014 and of the metal coatings product area of Feyco AG in June 2014. The relocation of Feyco's production plants to Bendern in the second half of 2015 and the use of synergy effects from a closer cooperation with the Schekolin Group are expected to result in an increase in efficiency and productivity, the effects of which will be felt as from the financial year 2016. In 2015, the Looser Group expects to incur extra costs of about CHF 1 million in connection with the relocation of production activities.

Compared to the prior year, net revenues of the Coatings Segment declined by 16.1 percent to CHF 166.7 million (prior year: CHF 198.6 million.). After adjustments for currency and divestment effects, revenues declined by 7.6 percent from 2013. The segment's operating result (EBITDA) of CHF 16.1 million decreased by about 13.9 percent from the prior year level (prior year: CHF 18.7 million). Thanks to the concentration on higher-margin products, the EBITDA margin increased from 9.4 percent in the previous year to 9.7 percent. A negative development in the year under review was mainly experienced in the product area of packaging coatings, which in the fourth quarter suffered a strong decline with respect to the powder coatings division in Europe. A decrease in revenues was also reported in the product area of wood coatings due to the weaker demand for laminate floor coatings and declining revenues in the furniture industry division. The positive impetus from the Asian markets for wood coatings was not sufficient to offset the negative development in the wood coatings business in Switzerland. Revenues in the product area of non-stick coatings remained at the prior year level thanks to innovative applications and the good market position in China.

Industrial Services Segment: restrained revenue development, slightly increased profitability

Revenues in the Industrial Services Segment stagnated as from the second half of the year. Net revenues of CHF 59.2 million declined by 1.1 percent from the prior year and by 1.0 percent after currency adjustments (prior year: CHF 59.8 million). Crane and construction equipment trading operations experienced a decline, while trading and rental revenues relating to modular space systems increased against the previous year. Revenues in the event services division fell slightly below the prior year level which was due to a lack of major national events in 2014. The operating result (EBITDA) amounted to CHF 15.9 million (prior year: CHF 15.5 million) so that EBITDA in the Industrial Services segment improved by 2.6 percent from the prior year. The EBITDA margin rose by just under 1 percentage point to 26.9 percent (prior year: 26.0 percent).

Temperature Control Segment: earnings power markedly strengthened

Net revenues of the Temperature Control Segment rose to CHF 37.8 million (prior year: CHF 35.1 million), an increase of 7.7 percent, or 8.8 percent after currency adjustments, from the previous year. The operating result (EBITDA) of CHF 3.1 million rose significantly over the prior year level (prior year: CHF 1.5 million) and the EBITDA margin increased to 8.1 percent (prior year: 4.3 percent). These improvements were mainly due to strong revenue growth in the area of applications for the semi-conductor industry and the implementation of productivity enhancement programs as well as the successful replacements in and additions to the management team.

Doors Segment: restrained development of earnings

Revenue growth by 13.6 percent to CHF 228.5 million (prior year: CHF 201.2 million) was achieved in the Doors Segment. After adjustments for currency and acquisition effects, the growth rate was 4.3 percent. The operating result (EBITDA) increased by 10.2 percent to CHF 25.9 million (prior year: CHF 23.5 million). The EBITDA margin amounted to 11.3 percent (prior year: 11.7 percent). The reasons for this margin decline were the increase in labor costs in Germany and higher prices of raw materials, in particular fiberboard as well as the lower productivity rate at the Garant plant. Invado, which was acquired in 2013, experienced a gratifying development.

Outlook 2015

Exchange rate volatility increased substantially after the Swiss National Bank (SNB) abandoned the minimum exchange rate of CHF 1.20 for Euro 1.00 in January 2015. Therefore, prognoses for the development of revenues and earnings in the financial year 2015 are difficult and subject to uncertainty. The effects on the Looser Group of the weaker Euro mainly relate to the translation of revenues and earnings of foreign entities into Swiss francs (translation effects). In addition, there will be negative effects on the revenues and earnings of Swiss entities with significant export activities (transaction effects). At the currently prevailing exchange rate, the impact of translation effects on the consolidated revenues and operating result (EBITDA) are significant. To cope with these effects, the Looser Group will take various efficiency enhancement and cost reduction measures. Disregarding any potential negative economic developments in connection with the currency situation, Looser Holding AG expects that the operating margin (EBITDA) for the financial year 2015 will be on the same level as in the previous year.

Publication of the annual report

Looser Holding AG is now publishing a summarized report in German and English to give a brief overview of business developments and results of the financial year 2014. The full 2014 annual report will continue to be published in German and be made available online at www.looserholding.com.

Key figures of the Looser Group