Sales by division
Thanks to a good market climate for capital goods, the Enclosures division managed to increase its sales by 12.5%. For the ELCOM/EMS division, declining sales in the photovoltaic sector resulted in an 8.5% drop in overall sales (10.9% in organic terms). Sales in the Mechanical Components division increased by 12.6%; adjusted for acquisitions, growth was 3.5%. In the electrically adjustable comfort furniture business, consumer caution in Europe was offset by dynamic growth overseas. Worldwide, the division’s industrial components business performed well.
Operating result
The operating result was affected by one-off charges and fell by 31.4% in 2011, from EUR 52.6 million to EUR 36.1 million. Without one-off expenses of around EUR 16 million, the result would be roughly equal to that of the previous year. EUR 11.6 million of those expenses relate to an impairment loss on intangible and tangible assets in the ELCOM/EMS division’s photovoltaic components business and just under EUR 4 million to the restructuring of the subsidiary DewertOkin in Germany. The operating margin was 6.8%, compared with 10.5% the previous year.
Result of the period
The result of the period was down by 46.1% in 2011, from EUR 43.9 million to EUR 23.6 million.
Equity ratio and net indebtedness
The equity ratio rose to 63.7% (previous year 61.9%), despite an increase in dividend from CHF 10 to CHF 13 and the lower result for the period in 2011. Net indebtedness was reduced in the reporting year to EUR 17.3 million, despite the acquisition of Platthaus GmbH (D) on 1 June 2011. In the previous year, net indebtedness stood at EUR 24.9 million. Considering the uncertain economic environment in 2012, the Group has a very solid capital structure, enabling it to also make further acquisitions.
Q1 2012
In the current relatively stable economic environment, Phoenix Mecano remains on course. Compared with the same quarter the previous year, incoming orders were up by 1.5% to EUR 146 million and sales by 1.3% to EUR 138.7 million. However, at EUR 14.4 million, the operating result fell short of the outstanding performance achieved in the first quarter of 2011 (EUR 18.2 million). The operating margin was 10.3%, compared with 13.3% the previous year.
In the Enclosures division, sales totalled EUR 44.8 million (down 1.3%). The operating result was EUR 8.8 million (down 14.1%). The operating margin was 19.6%. The ELCOM/EMS division increased its sales by 7.6% compared with the previous year, to EUR 35.8 million. The operating result was EUR 2.4 million (down 19.9%). The operating margin was 6.8%. Sales in the Mechanical Components division remained practically unchanged at EUR 58.1 million (EUR 58.3 million the previous year). The operating result was down by 34.3% to EUR 4.0 million. The operating margin was 6.9%.
Outlook
Based on the results of the first quarter, we expect sales to be at roughly the same level as in 2011, assuming reasonably stable market conditions. In the event of a further significant deterioration in the photovoltaic components market, the likeliest scenario would be a small, low-single-digit percentage decline in Group sales. As regards operating result, we are aiming for an EBIT of between EUR 43 and 53 million, within these scenarios.
Dividend
In view of the Group’s balance sheet ratios, which remain extremely sound, and in expectation of steadily increasing free cash flows, the Board of Directors will propose to the Shareholders’ General Meeting an unchanged dividend of CHF 13.00 per bearer share, despite the reduction in profit compared with 2010.
Link to the annual report:
http://www.phoenix-mecano.com/annualreports.html
