sia Abrasives expecting profitable growth (09/04/2002)
Gratifying inflow of orders bolsters optimistic sales forecast for 2002
With sales of CHF 222.3 million in 2001, sia Abrasives only just failed to repeat its previous year’s record performance by a mere 1.5% despite the difficult economic climate (in local currencies plus 1%). Operating income dropped by 15.3% to CHF 20.6 million and net income by 10% to CHF 15.1 million. At the strategic level, the year 2001 saw sia Abrasives establish a sound basis for future internal growth thanks to its takeover of sia Fibral, a programme of capital expenditure in Frauenfeld and a number of new distribution agreements. The corporate management was also reinforced with an eye to the growth targets. Now ranking number three for coated abrasives worldwide, the company is aiming for sales growth of between 6% and 10% and an operating profit margin in excess of 10% for the current year. The Annual Meeting of Stockholders is being recommended to declare an unchanged dividend of CHF 6.75 per registered share.
'Operational consolidation and strategic reinforcement' is how Peter A. Schifferle, CEO and Member of the Board summed up the results for the 2001 business year at the balance-sheet press conference held on 9 April 2002. At the operational level, sia Abrasives recorded a slight fall-off in sales in 2001 for the first time after nine consecutive years of growth that was well above average for the industry as a whole. With sales of CHF 222.3 million, the publicly listed Thurgau-based group turned over 1.5% less than in the strong previous year (2000: CHF 225.7 million). While EBIT for 2001 fell by 15.3% to CHF 20.6 million (2000: CHF 24.3 million), net income registered a disproportionately low decline of 10% to CHF 15.1 million (2000: CHF 16.8 million). This resulted in an operating profit margin of 9.3% (2000: 10.8%) and return on sales of 6.8% (2000: 7.4%). The Board of Directors is proposing to the Annual Meeting of Stockholders the payment of an unchanged dividend of CHF 6.75 per registered share.
Strategic basis established for future growth
With the acquisition of the nonwoven abrasives arm of the Freudenberg Group on 30 July 2001, sia Abrasives firmly established itself as the world’s number 3 in the coated abrasives market. To further bolster its leading technological position, the sia Group invested CHF 11 million in basic production in Frauenfeld in the course of 2001. In addition, the Board of Directors has decided to invest a further CHF 33 million in expanding conversion operations in Frauenfeld until the end of 2004. To promote closer collaboration with customers, sia Abrasives further increased its worldwide presence in 2001 with a conversion plant in China and its own distribution company in Mexico.
Management reinforced
As head of sia Abrasives Industries AG, Bruno Perucchi has served as a new member of the sia Group Management since 1 April 2002. Donat Frei has taken on the newly created position of Chief Technology Officer and is now responsible for the further development of technology know-how throughout the Group. Since 1 March 2002, Henri Duvoisin has belonged to the extended Group Management in his role as head of Human Resources. The American and UK Group companies received new CEOs who bring with them valuable experience of the abrasives industry. There is also a change coming up in the Board of Directors: at the Annual Meeting of Stockholders of 15 May 2002, Dr. Alexander Krebs will be stepping down from the Board as planned. As a new member to replace him, the Board of Directors will be proposing the appointment of Ernst Kessler.
Prospects for 2002: increased sales and income
Although sia Abrasives continues to regard the economic climate for the year 2002 as difficult, the Group is nonetheless optimistic of achieving sales growth of between 6% and 10% overall and an operating profit margin in excess of 10%. Contributing to these results will be both the new subsidiaries and partnerships, as well as the sia Group’s planned launch in 2002 of a number of new and in some instances patented products in three of its four areas of application. "In addition to internal growth, we also aim to expand in future by means of targeted acquisitions. Negotiations in this direction have already been initiated,” explains Peter A. Schifferle, CEO and Member of the Board of sia Abrasives. The first quarter of 2002 saw a gratifying inflow of orders, which has resulted in a markedly higher volume of orders in hand than at the same time last year. Sales, too, exceeded expectations based on the year-back levels.
® 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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