Financial Year 2009: Von Roll asserts itself in volatile market

Von Roll, one of the oldest industrial companies in Switzerland, reported its financial results for 2009 today. In the year under review, Von Roll was able to hold its ground, despite the challenging global market environment, and solidify its position as world leader in insulation products, systems and services. Within the scope of its restructuring programme, Von Roll has consolidated some production areas, terminated unprofitable product lines and streamlined group-wide functions, which resulted in 500 staff reductions across the Group. Starting in 2010, the programme will achieve long- term cost savings of CHF 15 million. At the same time, the already-launched Operational Excellence programme was stepped up further. Thomas Limberger, Chairman of the Board of Directors and CEO: “Thanks to our early and consistent action, we were able to counter the impact of the global financial and economic crisis in 2009. Furthermore, we will tackle the challenges ahead with the necessary vigilance in the current financial year. The aim of our actions is to ensure the growth of Von Roll and sustainable profitability.”

The company recorded a decline in sales of 23% to CHF 549 million in 2009. Adjusted for the effects of exchange rates and the price and volume of copper, turnover amounted to CHF 638 million, representing a decrease of 10%. Operating profit amounted to CHF 0.6 million. Taking into account one-time restructuring costs, the operating result was reduced to CHF -8.5 million. The company’s after-tax profits came in at CHF -11 million. The 3% increase in the equity ratio to 72% in conjunction with the operating cash flow of CHF 29 million shows that Von Roll has a stable financial foundation. The Board of Directors of Von Roll Holding AG proposes to the Annual General Meeting a dividend of CHF 0.10 per share for the 2009 fiscal year.

Transformer business as growth driver, Composites and Insulation stabilised in the second half of the year
The Von Roll Transformers unit proved to be a growth driver in 2009, and posted an increase in turnover of 27% to CHF 92 million (pro forma 2008 sales: CHF 72.3 million). Operating profit increased to CHF 7.1 million, which is largely due to positive market development. This trend will continue in 2010. There is little spare production capacity available until the end of 2010. A large number of orders have already been received for 2011 and 2012. The company plans to build additional capacity in order to exploit this potential further.

The traditional segments Von Roll Insulation and Von Roll Composites were more stable in the second half of the year after a lull in demand at the beginning of the year. Weak demand in the first half is largely attributable to the highly cyclical automotive, construction and consumer goods industries. Many customers in these sectors canceled orders and reduced inventory levels due to the financial crisis. Still, Von Roll was able to maintain its lead position in both segments. Von Roll Insulation generated a turnover of CHF 355 million in 2009, representing a decrease of 33% from the previous year. The operating profit in this segment fell accordingly to CHF 8.8 million, compared to CHF 48 million a year earlier. The turnover of Von Roll Composites in 2009 was 37% below last year’s level, amounting to CHF 102 million. The operating profit fell to CHF - 3.5 million, after CHF 17 million in the previous year.

Business expansion continues
The expansion strategy of Von Roll will continue in 2010 across all business segments. This strategy rests on three pillars: expansion of the existing core business, acquisitions in neighboring markets and operational performance improvement. Von Roll focuses on markets where above-average growth and, thus, higher profits can be achieved. Here, the company’s market position is to be strengthened through targeted acquisitions. The focus is on smaller acquisitions in line with the company’s strategy to create additional value.

A current example is the takeover of BHU Umwelttechnik GmbH, with its broad technology portfolio in water and wastewater treatment, which Von Roll acquired on March 8, 2010. The activities of BHU Umwelttechnik GmbH represent the first step in developing the new business segment “Von Roll Water”. In this way, Von Roll has created another strategically important pillar for expanding its business portfolio.

Outlook for 2010
From today’s perspective, Von Roll expects further stabilisation in the segments Insulation and Composites. In the Transformers segment, further growth is expected due to continued high demand. The fundamentals are intact and are expected to contribute to a positive business development. In addition, the restructuring along with Operational Excellence programmes will have a positive impact on operating results. Overall, Von Roll expects, based on the market’s recovery, to expand its market position and improve its cost structure in combination with a boost in sales and earnings compared to 2009.

Press:
Sven Ohligs, Communications T: +41 44 204 3034, F: +41 44 204 3039, E: press@vonroll.com

Investors:
Luitpold Wüsthof, Investor Relations T: +41 (44) 204 3050, F +41 44 204 3008, E: investor@vonroll.com

--- END press release Financial Year 2009: Von Roll asserts itself in volatile market ---

  Von Roll Schweiz AG (company entry)