Sales by division
The Enclosures division saw its gross sales fall by 2.9% in 2012 to EUR 160.0 million (4.1% when corrected for differences in foreign-exchange rates, 3.8% when corrected to take account of consolidation). Growth was once again achieved in systems technology and explosion-proof enclosures.
A slump in sales and impairment loss in the Datatel product area, which mainly supplies inverter components to the photovoltaic industry, led to an operating loss in the ELCOM/EMS division. The division recorded a 16.0% decline in sales in 2012 (16.5% when corrected for differences in foreign-exchange rates). Adjusted for consolidation effects, sales were down by 17.6%.
Sales in the Mechanical Components division fell by 0.8% in the reporting year to EUR 220.5 million (3.6% when corrected for differences in foreign-exchange rates).
The division’s industrial components business was affected by conservative stock-keeping on the part of customers due to the weakened economy in Europe.
Operating result
The operating result fell by 22.8% in 2012, from EUR 36.1 million to EUR 27.9 million. It was weighed down by exceptional expenses of around EUR 8 million. These were devaluations of non-current assets and losses on inventories and production materials in the photovoltaic components business. The operating margin was 5.6%, compared with 6.8% the previous year.
Result of the period
The result of the period was down by 23.6% from EUR 23.6 million to EUR 18.1 million. The net margin fell to 3.6% (previous year 4.5%).
Equity ratio and net indebtedness
The equity ratio climbed to 65.0% (previous year 63.7%), despite the lower result of the period and the share buy-back programme launched in summer 2012.
Net indebtedness was reduced in the reporting year from EUR 17.3 million to EUR 0.7 million thanks to the high free cash flow. Taking into account the current challenging environment in 2013 and possible acquisition opportunities, the Group has the financial leeway that it needs.
Q1 2013
The Phoenix Mecano Group generated gross sales of EUR 127.0 million in the first quarter of 2013 (down 8.5% year-on-year) Currency effects totalled -0.2%. Incoming orders fell by 7.6% to EUR 134.9 million. Excluding the photovoltaic business, incoming orders were up by 1.0% and gross sales were down by 2.2% on the previous year.
The book-to-bill ratio stood at 106.2%, signalling an upturn in business in the immediate term.
The quarterly result of EUR 10.6 million represents a 26.5% decrease compared with the same quarter last year. The operating margin was 8.3%.
In the Enclosures division, gross sales totalled EUR 42.1 million (down 6.0%). The operating result fell by 27.0% to EUR 6.4 million. The operating margin was 15.2%.
In the ELCOM/EMS division, gross sales were down by 6.2% compared with the previous year, at EUR 26.4 million. Excluding the aforementioned photovoltaic impact, the contraction in gross sales was 1.7%. The operating result was EUR 0.4 million (down 83.3%). The operating margin was 1.5%.
In the Mechanical Components division, which generates the biggest sales, gross sales remained practically unchanged year-on-year at EUR 58.5 million (up 0.5%). The operating result rose to EUR 4.5 million (up 12.5%). The operating margin increased to 7.7%.
Outlook
An operating result in the region of EUR 30-40 million seems realistic, provided the trend of Q1 2013 can be maintained. This is conditional upon a reasonably stable economic climate at the current level.
Phoenix Mecano is bracing itself for volatility in the immediate future. In this environment, it will continue to rely on solid corporate finances, the sustainable development of technologies and market position and the continuous evaluation and improvement of its core processes. This will be combined with ongoing investments on the same scale as previous years as well as possible bolt-on acquisitions to supplement its portfolio.
Dividend
Payments to shareholders in the form of at-least stable dividends as well as – depending on the situation on the financial markets – share buy-backs to consolidate profit are a high priority for Phoenix Mecano. Accordingly, the Board of Directors will propose to the Shareholders’ General Meeting a stable dividend of CHF 13 per bearer share.
Link to the annual report:
http://www.phoenix-mecano.com/annualreports.html
