SOURCE: Komax Holding AG

March 24, 2010 03:23 ET

The Komax Group in the 2009 financial year

Challenging year of recession, return to profitability in 2010

Komax has posted a year-on-year decline in sales of 38 percent and a loss of CHF -19.8 million for the 2009 financial year. The company is nonetheless expecting to return to profit for the first half of 2010.

DIERIKON, SWITZERLAND--(Marketwire - March 24, 2010) - The last business year proved very difficult for the Komax Group. During the recession of 2009, we were confronted with a massive drop in sales and -- for the first time in the company's history -- ended the year on a loss.

Our annual sales fell by around 38 percent, from CHF 342.7 million (2008) to CHF 211.5 million (2009). Hardest hit was the Wire business unit, with its many automotive industry customers. However, sales in the Solar area, which had been experiencing strong growth, also fell. Only the non-cyclical Medtech business unit recorded good sales growth in 2009.

The Wire and Solar business units showed signs of a strong revival over the course of the fourth quarter of 2009. In the second half of 2009, new orders at Group level stood at 70 percent above the low value recorded for the first half. The order intake figure for the year as a whole came in at CHF 220.6 million (previous year: CHF 380.0 million).

Despite prompt implementation of cost-saving measures, we were unable to avoid a negative operating result for the Group of CHF -22.7 million. The markets relevant to our business stabilized in the fourth quarter of 2009, and we were able to achieve a positive operating result in this last quarter of the year. Group earnings after tax stood at CHF -19.8 million (previous year: CHF 23.2 million).

Financial key figures

At the end of 2009, the Komax Group had shareholders' equity of CHF 199.9 million, thus maintaining a very respectable equity ratio of 68.7 percent. Although the Group reported a loss after tax of CHF 19.8 million for the financial year, its equity ratio remained virtually unchanged. This is explained by the marked balance sheet contraction from CHF 322 million to CHF 291 million at the end of 2009. The undiluted loss per share thus amounts to CHF -5.97, as opposed to earnings per share of CHF 6.99 in the previous year. The Board of Directors will therefore propose to the General Meeting that no dividend be paid out for 2009.

Wire business unit

The Komax Group produces machines for wire-processing (crimping, for example) and wire harness production. The end markets for its wire- processing systems are the automotive industry, the household appliances market and the electronics market. In the first half of 2009, automotive- related activity was virtually non-existent. Later on in the year, the situation improved somewhat. Customers supplying the household appliances and electronics markets were generally less hard hit by the downturn.

Solar business unit

For the solar industry, Komax produces machines for manufacturing both crystalline and thin-film solar modules. Thanks to a wide range of innovations and a recovery in the market, especially in China, the Komax Solar business unit put in a very pleasing performance in the second half of the year. However, this did not apply to the thin-film area, which accounted for around 20 percent of Komax's solar sales in 2009. The Group made anti-cyclical investments in this sub-segment in 2009 and brought new products to market at great development expense.

Medtech business unit

In the area of medical technology, Komax produces machines and systems for assembling insulin delivery systems, inhalers and syringes. Despite tensions gripping the global economy, sales in this segment ended last year on a satisfactory note, even though a return to profit eluded us. We acquired several new customers and established ourselves as one of the leading providers in this market. The low level of profitability is attributable to high extraordinary expenses of around CHF 2 million associated with a single project. Other factors which weighed on our result were the establishment at Rotkreuz of a Medtech centre of excellence for the German-speaking market and delays in the sourcing of parts from suppliers towards the end of the year.

Development and basic engineering

Despite a difficult economic environment in the year under review, the company continued to press ahead with the development of new products. In 2009, Komax once again invested substantially in development and basic engineering, spending CHF 20.1 million in this area (2008: CHF 25.2 million).

Productronica for the Wire segment, where Komax presented 10 new products, was just one of countless trade fair appearances for Komax, while the Solar segment presented another 10 new machines and products to clients at a key trade fair in Hamburg. In Rotkreuz, Komax has now built up a German- speaking hub for medical technology alongside the photovoltaics centre of excellence for the development of process solutions in the thin-film area.

Strategy

The global recession and tough market environment forced us to adopt a series of restructuring measures - but we always did so with an eye to being ready as soon as economic recovery brought new market opportunities. The strategic reorganization, in which the Solar and Medtech business areas were established as complementary areas to our wire-processing activities, was completed in 2009 with the roll-out of the three business units. Innovation, customer focus and operational efficiency are the drivers behind our success in all business areas. Our goal is to achieve long-term organic growth in these three core business areas while gaining entry to new market segments and consolidating existing positions by means of complementary acquisitions.

Change in Group Management

Claudio Meisser, CTO and Josef Zumstein (Deputy Head of Wire division) retire. The new Executive Committee consists of Beat Kälin, CEO and Head of Wire division, Andreas Wolfisberg, CFO, Walter Nehls (Head of Solar division) and Serge Peguiron (Head of Medical Technology division).

Outlook

The upturn in Komax's key markets seems to be persisting. Indeed, Komax is expecting to report a profit for the first half of 2010. If this recovery continues, we anticipate a return to growth and a positive result for 2010 as a whole.

Market conditions have improved substantially in the Wire segment. Based on the extremely pleasing inflow of new orders in the first few months of 2010, we anticipate marked growth over the course of the year.

We also expect to see a recovery in the solar market in 2010. Many governments now have significant alternative energy development programmes either at the planning stage or already in place. From 2010, the number of solar modules being installed worldwide - and therefore the need for leading-edge production equipment - is likely to start growing again. Komax Solar is well placed to share in this growth.

Komax Medtech has entered 2010 with a cautiously optimistic outlook. The unit has a healthy number of orders on the books. Overall demand in the self-medication sector looks set to continue to grow in Europe, Asia and North America.


This media release can be downloaded in German or English at www.komaxgroup.com. Further key figures can be found in the Appendix or on the website.

Appendix

Key figures of the Komax Group

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Consolidated balance sheet                    31.12.200931.12.2008   Change
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                                               CHF 1,000 CHF 1,000        %
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Total assets                                     290,855   322,086     -9.7
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Net indebtedness (-) / Net cash (+)               -6,270    19,683   -131.9
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Shareholders' equity                             199,899   222,098    -10.0
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as % of total assets                                68.7      69.0       --
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Consolidated income statement                       2009      2008   Change
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                                               CHF 1,000 CHF 1,000        %
---------------------------------------------------------------------------
Revenues                                         211,504   342,733    -38.3
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Operating cash flow (EBITD) as % of              -14,504    39,091   -137.1
 revenues
                                              -----------------------------
                                                    -6.9      11.4       --
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Operating profit (EBIT) as % of                  -22,672    31,119   -172.9
 revenues
                                              -----------------------------
                                                   -10.7       9.1       --
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Free cash flow                                   -21,513    21,717   -199.1
---------------------------------------------------------------------------
Group profit after tax (EAT) as %                -19,835    23,226   -185.4
 of revenues
                                              -----------------------------
                                                    -9.4       6.8       --
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Research & development as % of                    20,101    25,248    -20.4
 revenues
                                              -----------------------------
                                                     9.5       7.4       --
---------------------------------------------------------------------------

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Operating Segments                                  Wire     Solar  Medtech
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2009                                           CHF 1,000 CHF 1,000CHF 1,000
---------------------------------------------------------------------------
Total net sales                                  100,189    45,925   66,752
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EBIT                                              -4,237    -5,541   -1,005
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2008
---------------------------------------------------------------------------
Total net sales                                  245,453    52,910   49,145
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EBIT                                              37,691     6,503   -4,728
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                                                    2009      2008 Change %
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Headcount (at year-end) (number of employees)        987     1,138    -13.3
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Net sales per employee (CHF 1,000)                   209       309    -32.4
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Net value added per employee (CHF 1,000)              79       130    -39.2
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Key share figures                                   2009      2008
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Share capital as at 31 Dec. (CHF 1,000)              339       339
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Number of shares as at 31 Dec. (units)         3,387,520 3,387,520
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Par value per share (CHF)                           0.10      0.10
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Stock market capitalization as at 31 Dec. (CHF   243,901   182,587
 1,000)
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Basic earnings per share (CHF)                      -5.97      6.99
---------------------------------------------------------------------------
P/E (price/earnings ratio) as at 31 Dec.            -12.1       7.7
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Appendix

Brief profile of the Komax Group: global leader in wire-processing, strong focus on photovoltaics and medical technology

Komax is the world leader in the wire-processing market (crimp-to-crimp machines), with a market share of around 40 percent. In addition, the Komax portfolio of products and services ranges from wirecutting and -stripping machines all the way to systems for the fully-automated manufacture of complete wire harnesses.

In the solar field, Komax is a worldwide supplier of machines for the production of crystalline and thin-film modules. Continuous innovation has enabled Komax to expand its product portfolio significantly in recent years. Today, the company covers the entire spectrum, from individual processes such as stringing through to integration of entire production lines. Its aim is to expand its global leadership in stringing to the other areas of its product portfolio.

In the medical technology sector, Komax produces, for example, machine systems for manufacturing inhalers and insulin delivery or injection systems. In this field too, Komax is among the world's leading suppliers.

The Komax Group operates production facilities in Switzerland, France, the United States, Malaysia and China. Finally, Komax offers professional service back-up in over 50 countries. The Group generated revenues of CHF 211.5 million in 2009, but, for the first time in its history, was unable to avoid a loss for the year. As at 31 December 2009, Komax employed a workforce of around 1,000 staff worldwide.


This media release can be downloaded in German or English at www.komaxgroup.com. Further key figures can be found in the Appendix or on the website.

The media release can be downloaded from the following link:

Media release (PDF): http://hugin.info/100418/R/1396925/353008.pdf

Komax Holding AG Direct line +41 79 236 52 64
Dominik Slappnig Fax +41 41 450 10 24
Investor Relations and
Corporate Communications dominik.slappnig@komaxgroup.com
 www.komaxgroup.com

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