In 2006, the sia Group increased total sales by 8% to CHF 282 million, with all application areas contributing to this healthy growth. Sales performance was particularly strong in the markets of Europe, including Switzerland, and North America. Based on the solid growth, management expects operating profit before interest, tax, depreciation and amortisation (EBITDA) and operating profit before interest and tax (EBIT) to fall within the guidance ranges.
Healthy growth in all principal markets
In 2006, the sia Group increased sales by 8%, clearly beating the envisaged growth target of 4% to 6%. Sales rose by CHF 20.6 million to CHF 282.0 million. In local currency, sales were up by 7%. Last year, the sales growth driven by the acquisition of sia Abrafoam Ltd., first consolidated in November 2005, was CHF 11.1 million. Sales revenue improved in all the application areas. This positive development is due to the successful launch of various new products.
Sales increased by 8% in Europe, the international Group’s most important economic region, accounting for 65% of revenue. In Switzerland alone, the sales growth was 10%. This is due to the successful launch of new products, system sales with bonded abrasives from Tyrolit and the high quality of service and delivery. The strategy of maintaining a wide range of readily available products and ensuring fast delivery capability continued to pay off and led to a further increase in market share.
In the North American markets, sales grew by a healthy 25%. This was not just due to the good economic climate in that market. Growth was also driven by the strong expansion in the sia Group’s sales to large customers and by its successful move into new niches in vehicle construction. Persistent implementation of the market strategy also brought an increase in market share across this region.
Sales in Latin America rose at a modest rate of 1%, primarily because Brazil’s exports suffered from the expensive Brazilian currency relative to the US dollar. This hit the Brazilian furniture industry hard, which in turn had a negative impact on sales in this market segment.
In Oceania (Asia, Australia and New Zealand), the Group recorded a 6% decline in sales. This is mainly due to a slowdown in the Australian and New Zealand chipboard markets and to lost sales in Asian countries. “Bolstered by the new organisation we have set up for our market activities in Asia for 2007, we will generate higher growth again in this important market”, stresses the new CEO of sia Abrasives, Roland Eberle. Activities in this region will now be managed from a company base in Singapore.
Sales in Africa rose by 25% to CHF 5.3 million.
Results for 2006
Based on the healthy sales growth, sia Group management expects results to fall within the published ranges. The operating profit margin before interest, tax, depreciation and amortisation (EBITDA) will come in at between 15% and 17%. The operating profit margin before interest and tax (EBIT) is expected to be within a range of 10% to 12%. With this performance, the sia Group met all of its targets for last year. The solid results will lead to high free cash flow, allowing the Board of Directors to propose the payment of an increased dividend.
Expectations for 2007
This year the sia Group will focus primarily on sales growth and its customer relationships. This is to be achieved by launching new products, e.g. for metalworking, and by further expanding existing partnerships, e.g. with Sika. The foundation has been laid for sales to continue to grow at a faster rate than the anticipated rate of economic growth.
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 261.4 million and operating profit (EBITDA) of CHF 40.5 million for 2005. sia Abrasives Holding AG is listed on SWX Swiss Exchange and generates more than 90% of its sales outside Switzerland.
Financial calendar
23 March 2007, 9 a.m. Annual press conference at SWX Swiss Exchange in Zurich 23 March 2007, 11 a.m. Analyst conference at SWX Swiss Exchange in Zurich 24 April 2007, 4 p.m. Annual General Meeting of Shareholders at Frauenfeld Stadtcasino 30 April 2007 Dividend payment
® 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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