Steep increase in sales and earnings for 1999 (19/04/2000)
Listed on the SWX since last October, the sia Group can look back over a successful year of business in 1999 and a very gratifying first-quarter start to 2000. As already announced at the beginning of March, the sia Group increased consolidated net sales in 1999 by 11,9% over the previous year to CHF 204.7 million and EBIT by as much as 22,2% to CHF 21.1 million. In the first quarter of the 2000 business year, the sia Group recorded net sales growth of some 12% compared with the same period of 2000. Contributing to this increase were both the success of existing products on current markets as well as a number of new launches. In addition to reinforcing the collaboration it already enjoys, sia Abrasives will be entering into several new strategic alliances in the so-called "emerging markets” and in Europe. These measures are intended to prepare the way to ensure that the development, manufacture and marketing of this specialist in flexible abrasives can continue to enjoy growth that is above-average for the sector in the future, too. For the current 2000 business year, the Group’s management is optimistic of achieving an increase in turnover in the region of 6 – 10%.
Systematic development of strategic alliances
As the sia Group announced at its balance sheet media conference, the Asian region offers interesting growth potential. In China, sia Abrasives has entered into a joint venture – by setting up a jointly-owned new company – with the Group’s long-term marketing partners in Hong Kong. By developing a modern conversion plant for the production of sanding belts and discs at Guangzhou in Southern China, sia Abrasives will be in a position to cover the Chinese market with products that are converted locally. sia Abrasives Holding AG is initially taking a 30% minority stake in this new company. After a build-up phase of two to three years, sia intends to take over a qualified majority holding in the company.
sia Abrasives has entered into a further strategic alliance in the form of a cooperation agreement with the Rodcraft company. Rodcraft GmbH of Mülheim (Germany) is a leading manufacturer of pneumatically-powered manual sanders which can be used in various areas of application. In May 2000, sia Abrasives will be taking over exclusive distribution of these machines for use in the automotive refinishing trade sector together with the abrasive materials required for use with them. This will make it possible for sia Abrasives to offer a complete sanding system for this sector from just one source. The collaboration between Rodcraft and sia Abrasives will be advertised by means of a joint label and the slogan "for better performance”. The sia Group expects the excellent synergetic effects of this collaboration to lead to a significant increase in sales in the automotive paint and bodywork segment.
The collaboration commenced at the end of 1999 with the Swedish BonaKemi AB, which makes exclusive use of sia Abrasives products for floorsanding, has developed extremely satisfactorily and is being successively extended to the do-it-yourself and building markets. BonaKemi AB rates as the world’s leading company in the realm of floor lacquering. For private customers wanting to freshen up their parquet floors, BonaKemi has set up a rental service that provides all the products and machinery necessary for renovating flooring surfaces. sia abrasives are ideal for this application and ensure that floors are sanded evenly all over.
In the technically highly challenging area of microfinishing, the new Group company of sia microtec AG that was set up in December 1999 is demonstrating its first marked successes: it has been able to win a number of leading German automobile manufacturers and an internationally-active manufacturer of construction plant and equipment for its products. As technical evaluation on the part of the customers is extremely time-consuming, it is taking longer than originally envisaged for penetration of this market to be achieved in the volume initially foreseen.
First quarter 2000 and prospects
In the first quarter of 2000, growth in net sales was a little more than 12% in excess of the same period last year. For the subsequent quarter-year periods of 2000, net sales will have to be compared with the substantially higher levels recorded in 1999. For this reason, it is unlikely that the overall growth rate for the current year to date will be extrapolated over the entire year. In addition to this, sia Abrasives is not at present able to evaluate either future economic developments in the major sales markets or the exchange rate situation and the impact that these might have. However, the Group’s management considers that it should be possible to achieve an increase in net sales to the amount of 6 – 10%.
® 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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