sia Abrasives posts higher sales and operating income (04/03/2003)
sia Abrasives, the world’s third largest coated abrasives supplier, has strengthened its market position significantly. The Group posted 12% growth in local currency sales. In Swiss francs, net sales reached CHF 241.1 million, rising 8.4%. Operating income before interest and taxes (EBIT) increased 5.5% to CHF 21.8 million, while net income was CHF 13.4 million (2001: CHF 15.1 million).
Having gained market share, sia Abrasives ended 2002 with a strong year-on-year increase in sales. In local currencies, the Group recorded a 12% gain, with approximately 6% driven by organic growth and 6% by foreign acquisitions. In Swiss francs, net sales reached CHF 241.1 million, up 8.4% from CHF 222.3 million in 2001. Both sales revenues and profits were affected by the adverse exchange rate movements and global economic slowdown. In 2002, operating income before interest and taxes (EBIT) rose to CHF 21.8 million from CHF 20.6 million and represented 9.0% of net sales, compared to 9.3% in 2001. Net income slipped to CHF 13.4 million from CHF 15.1 million in 2001, down CHF 1.7 million. The return on sales was 5.6%, compared to 6.8% in 2001.
The centralization of the two UK facilities was completed according to plan, with the Saffron Walden company relocating its headquarters to the site of sia Fibral Ltd. in Greetland. This move is expected to generate recurring annual savings of at least CHF 2 million. The extraordinary one-time costs of CHF 0.8 million, incurred in transferring the production facilities, were expensed in 2002. Negotiations for the sale of the Saffron Walden property are going well.
Growth and deeper market penetration
By continuously broadening the product line, sia Abrasives won numerous new customers, gaining market share. Above all, the Group stood out as a system provider with product innovations. The acquisition of Weck Schleifmittel GmbH in Germany has given sia Abrasives access to additional customer segments – chiefly for metalworking applications. The nonwoven products of sia Fibral Ltd., acquired in 2001, ideally complement the established range of coated abrasives, helping to deepen market penetration. Sales were well ahead of the prior year. In the USA, the marketing of sia Fibral products was integrated in the distribution network of sia Abrasives, Inc. USA, further boosting sales in North America. In China, the company continued to expand the sia conversion operations launched in 2001. This strategic move into the emerging Asian market has already delivered encouraging results.
In acquiring CAPCO, a US conversion and sales company, sia Abrasives closed the year by laying the cornerstone to enter the American MRO (maintenance, repair and operations) market. This acquisition also provides access to another group of buyers: catalog customers who supply the US market via mail order selling and a network of 1,200 retail outlets. As a result, sia products became widely available in the USA in one fell swoop from January 2003. sia Abrasives expects this to bring a surge in sales.
Good start to 2003
New order bookings since the beginning of 2003 have been encouraging. The full order books are the result of broadening the customer base and launching new products. Hard though it is to predict the future business climate, the sia Group views the prospects for 2003 with cautious optimism.
® 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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