Half-year results 1/2008: Growth in sales and profits at Orell Füssli
First-half results higher than in the previous year – stronger industrial business –high capacity utilisation in security printing continues – flat growth in book retail-ing and publishing – good annual outcome expected
Zurich, August 5, 2008. The Orell Füssli Group reported sales of CHF 173.9 million for the first half of 2008, an increase of 4.7% compared with the same period of the previous year. Operating earnings (EBIT) improved by 27.8% to CHF 15.0 million and net profit after minority interests rose by 15.0% to CHF 10.7 million. These results reflect the still favourable business environment in the group’s sales markets and special factors in the security printing business, where high-margin transactions were completed in the first six months.
In the industrial segment the Atlantic Zeiser Division’s machine manufacturing business benefited from presentations at the Interpack and DRUPA trade fairs. Orders in hand at mid-year reached a record level, and sales were 5% ahead of the previous year’s figure. However, the low dollar exchange rate is keeping margins under pressure in America and Asia. The Orell Füssli Security Printing Division recorded a 12% increase in sales with continued high capacity utilisation and a favourable product mix generated above-average margins, which will level off again in the course of the second half. Structural alteration and expansion work at the Zurich Wiedikon site is progressing according to plan. Reductions in capacity due to the construction work have been kept to a minimum to date.
The Orell Füssli Book Retailing Division reported slightly higher sales and EBIT figures at mid-year compared with the same period of the previous year. Good growth rates in the first quarter were offset by below-average figures in May and June. Organic growth in book retailing is likely to slow further as economic activity cools off. Orell Füssli will open three new branches in Berne and St. Gall in autumn 2008.
Publishing operations continued to make gains: sales were 7% above the previous year’s figure and operating earnings were also higher. The trend of business at the Orell Füssli Business Information Division was pleasing as new products were launched. The Orell Füssli Publishing Division reported double-digit increases in sales and EBIT compared with the same period of the previous year. Buchverlag Huber, which was integrated in Orell Füssli Publishing at the beginning of the year, also contributed to this.
Focus on core activities
In the course of its periodic review of the business portfolio, the board of directors of Orell Füssli Holding Ltd. decided to dispose of the business information operations, thus enabling this segment to pursue dynamic growth under the management of Swiss investors outside the group. With the sale of the Orell Füssli Business Information segment at the beginning of the second half of 2008, Orell Füssli will focus on its core businesses of security printing, industrial systems and book retailing. This sale will result in a book gain of some CHF 20 million for the Orell Füssli Group in 2008.
New head of the Security Printing Division
John Coleman will retire at the beginning of 2009 after heading the Orell Füssli Security Printing Division for 19 years. Bank note printing operations have been continuously expanded under his management and are now global acknowledged leaders in their field. He will be succeeded as Division CEO in March 2009 by Dr. Anton Gasteiger, 51, an Austrian national. In the person of Dr. Gasteiger we have secured the services of an internationally recognised professional in bank note printing, who has held executive positions for many years at industry leader Giesecke & Devrient GmbH in Munich.
Outlook
Orell Füssli expects the positive trend in the industry segment to continue in the second half of the year, although sales are likely to grow faster than EBIT. The book retailing business in Switzerland will make further gains as the network of book retailing outlets is expanded. Orell Füssli expects overall annual sales to be higher than in the previous year, with operating earnings at almost the same level and exceptionally high annual profits, due to the proceeds from the sale of OF Business Information.
Key figures for Orell Füssli
in CHF m | H1 2007 | H1 2008 | D% | FY 2007 |
Sales | 166.1 | 173.9 | +4.7% | 378.4 |
EBIT in % of sales | 11.7 7.1% | 15.0 8.6% | +27.8% | 42.2 11.2% |
Profit after minority interests in % of sales | 9.3 5.6% | 10.7 6.2% | +15.0% | 29.9 7.9% |
Total assets | 247.6 | 276.1 | +11.5% | 269.1 |
Shareholders’ equity in % of total assets | 132.7 53.6% | 150.9 54.7% | +13.7% | 152.8 56.8% |
Number of employees | 1 060 | 1 096 | +3.4% | 1 118 |
Information
Sönke Bandixen, CEO Orell Füssli
Phone +41 44 466 7273
ceo[at]ofh.ch
Agenda
Investors’ Day, Orell Füssli Insight: Zurich Wiedikon, October 1, 2008
Press release, provisional annual financial statements 2008: January 30, 2009
Encl.
Orell Füssli financial report, 1st half of 2008
Orell Füssli, an international industrial and commercial group, focuses on the core activities of bank note & security printing, industrial systems for the personalisation of security documents and branded products, and book retailing. Book publishing is the traditional basis of the Zurich-based group – since 1519. Orell Füssli generates sales of CHF 380 million with 1 100 employees at locations in 10 countries and is listed on the Swiss Stock Exchange.
