sia Abrasives can look back on a solid first half year. Performance reflected the stronger market presence, especially in European countries, and successful product innovations. Sales increased by 3.1% to CHF 147.6 million for the first six months of 2007. Operating results are in line with targets.
In the first six months of 2007, the sia Group generated sales of CHF 147.6 million, an increase of CHF 4.4 million or 3.1%. First half operating revenue derived from production activities advanced very satisfactorily, rising by CHF 10.0 million or 7.1%. While the sales growth after the first six months was still below the goal of 4% to 6%, management is confident that the sia Group will reach this full year growth target as the level of incoming orders is developing very positively. Year on year, order intake grew by CHF 6.5 million or 4.4%.
The Group posted a marked upturn in sales in Europe, where two-thirds of its revenue is generated. Performance was particularly encouraging in Germany, the UK and the home market of Switzerland, in each of which sia Abrasives achieved higher-than-average sales growth. These favourable developments are primarily due to the successes in key account business and, secondarily, to the good economic environment. sia Fibral (nonwoven products) and sia Abrafoam (foam abrasives) also came up with solid, above-average growth rates. In the USA and Asia/Australia, the sia Group got off to a slow start to the first quarter. However, sales have been picking up every month and should be in line with the set targets before year end.
Healthy operating results
Operating results for the first half of 2007 are in line with objectives and maintained a high level. Operating profit before depreciation, amortisation, interest and tax (EBITDA) rose by CHF 0.8 million to CHF 22.8 million, resulting in a margin of 15.2%. Operating profit before interest and tax (EBIT) was up by CHF 1.1 million or 7.3% to CHF 16.7 million. The EBIT margin was 11.1%. Profit for the period improved by 8.6% to CHF 11.8 million, the best half-year result ever achieved in the history of sia Abrasives. At 7.9%, the margin is slightly ahead of last year’s 7.8%. For the full year, the sia Group expects operating profit before depreciation, amortisation, interest and tax (EBITDA) to be between 15% and 17% of operating revenue and operating profit before interest and tax (EBIT) to be between 10% and 12%.
Innovative products fill market needs
In the first half of 2007, after two years of intensive development work, sia Abrasives successfully launched its revolutionary siastar grinding system on the market. siastar allows users to change grinding tools quickly and safely and to perform a wide variety of different grinding operations far more economically than using conventional systems. In creating siastar, sia Abrasives has come out with an innovative product that fills a large market need while offering great potential for expansion.
The automotive industry is increasingly coating bodywork surfaces with scratch- and abrasion-resistant paints that require new finishing methods. sia Abrasives responded to this trend early, developing siacarat velvet, an innovative abrasive featuring a high-grade diamond mineral coating. This product is exceptionally efficient for matt finishing of scratch-resistant automotive paints and has a lifetime at least 50 times longer than that of conventional abrasives. To the knowledge of sia Abrasives, there is no comparable product on the market today that can deliver anywhere near the same performance as siacarat velvet for this specific application.
Acquisition enhances market presence in Spain
On 1 July 2007, sia Abrasives integrated the only conversion facility in Central Spain into the Group. This facility producing standard abrasive belts also makes flap wheels, particularly for use in metal applications. By providing higher quality of service and delivery, sia Abrasives is gaining a market advantage over its competitors. In addition, this move will open up new market and customer potential for the companies in the sia Group.
sia Group financial highlights (CHF’000)
Six months ended 30 June 2007
Six months ended 30 June 2006
% Change
Net sales
147 611
143 168
+3.1%
Operating revenue
150 299
140 323
+7.1%
Operating profit before depreciation and amortisation (EBITDA)
22 817
22 016
+3.6%
EBITDA as % of operating revenue
15.2%
15.7%
Operating profit before interest and tax (EBIT)
16 664
15 534
+7.3%
EBIT as % of operating revenue
11.1%
11.1%
Profit for the period (EAT)
11 823
10 882
+8.6%
EAT as % of operating revenue
7.9%
7.8%
Net cash flow from operating activities
10 404
10 930
– 4.8%
Capital expenditure (gross)
5 783
3 052
+89.5%
Financial calendar
18 March 2008, 9.00 a.m. Annual press conference at the SWX Swiss Exchange in Zurich 18 March 2008, 11.00 a.m. Analyst conference at the SWX Swiss Exchange in Zurich 9 April 2008, 4.00 p.m. Annual General Meeting of Shareholders at Frauenfeld Stadtcasino
About the sia Group
The sia Group based in Frauenfeld ranks among the world’s top three suppliers of coated abrasives. It develops, manufactures and markets complete abrasive systems tailored to specific requirements and applications for surface preparation and finishing of all kinds. This commitment has made sanding and grinding into true surface technologies. Employing some 1,100 people worldwide, sia Abrasives posted net sales of CHF 282 million and operating profit (EBIT) of CHF 31.5 million for 2006. sia Abrasives Holding AG is listed on the SWX Swiss Exchange and generates more than 90% of its sales outside Switzerland.
® 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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