sia Group increases net income despite a difficult environment; now ranks No. 3 in the world (09/08/2001)
In the first half of 2001, the sia Group generated net income of CHF 7.8 million, improving on the year-earlier period (CHF 7.7 million) despite the unsettled global economic environment. The ratio of net income to sales rose from 6.8% a year ago to 7.4%.
Following a very subdued first quarter, with traders and customers reducing inventories in the wake of declining economic activity, the second quarter was satisfactory. Although net sales eased to CHF 105.7 million (2000: CHF 113.2 million), the operating profit margin practically matched last year’s level. At 9.9% (2000: 10.3%), it was bolstered by the impact of our rationalization investments and continual process optimization.
According to our information, the industry as a whole saw a 16 – 20% decline in the market worldwide. The sia Group outperformed the industry thanks to its continuing gain in market share and the internal cost-cutting measures.
In the first six months, we established a new marketing company in Mexico. This move supports the growth strategy defined for the NAFTA countries where we aim to provide faster and more customer-responsive service with products from our US conversion operation. Independently of cyclical trends, this region still offers considerable sales potential for the Group. We are looking to tap this potential more intensively by acquiring further distribution channels and conversion facilities.
This year has also seen the purchase of sia Fibral Ltd., a UK company to be included in the Group consolidation in the second half year. This expansion will allow us to market products that ideally complement our current sales mix through sia’s distribution channels, while using Fibral’s trade channels for sia products. The sia Group has now moved up to rank world third in the coated abrasives industry.
Outlook: sia Abrasives enjoying continued growth
Despite the ongoing uncertainty about the economic development in our principal markets over the months ahead, we expect higher sales and profitability in comparison with last year and with the first two quarters of this year. Our market share will continue to grow. This belief is founded on the measurable productivity improvements that will impact fully in the latter half of the year and on the continual expansion of our distribution channels and product line.
® Correct nomenclature for sia Abrasives Holding AG
As there are other companies and organizations that use the same abbreviation as our company, we would be grateful if you could help to avoid any misunderstandings by always writing our name as follows: sia Abrasives (never just sia by itself).
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