Measures taken to counter the strength of the Swiss franc

SFS has devised a comprehensive set of measures during recent weeks to improve the competiveness of its Swiss-based operations. In addition to strict cost management, a hiring freeze has been imposed, weekly working hours have been increased from 42 to 44 hours and annual leave has been reduced from 6 weeks to 5 weeks. Fixed compensation paid to the Group Executive Board was reduced by 10%. SFS is also steadfastly pressing ahead with sales and marketing activities, innovation efforts and the implementation of growth projects. In order to realize growth projects in Switzerland without hiring additional staff, SFS will increasingly assign manufacturing activities involving limited know-how and technology to its sites outside the country.

Heinrich Spoerry, Chairman of the Board of Directors and CEO of SFS Group: "Numerous measures are being taken to compensate for the currency-induced competitive disadvantages forced upon our Swiss production plants. We will intensify our efforts to innovate. In Switzerland we will focus even more on the development and production of innovative and demanding technologies and products.

Outlook for the 2015 financial year

The Swiss National Bank's decision to abandon the minimum exchange-rate floor of CHF 1.20 to the euro on January 15, 2015 changed the playing field going into the 2015 financial year. Due to the massive depreciation of the euro and other currencies against the Swiss franc, SFS is expecting reported sales in Swiss francs, the company's reporting currency, to decline by 2-4%.

Despite the many measures being taken, company management expects the EBITA margin to recede by 60 to 120 basis points compared to the margin reported for the 2014 financial year.

In view of the progress made during the 2014 financial year and the new projects that have been won, SFS is confident it can continue to strengthen its technology leadership and expand its position in its targeted niche markets during the coming year. For the coming year management expect sales in the core business to grow by 5-7% at constant exchange rates.

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