Swisslog grows net profit - market environment increasingly more demanding

Swisslog grew net profit in the first half-year of 2009 from MCHF 5.5 to MCHF 11.9, considerably above the same period last year. An improved operating result, lower financial expenses and reduced income taxes enabled the increase. While order intake rose, net sales and - most notably - order backlog fell below the previous year's figures. The Group's financial situation improved again.

"With these business developments we are in line with our expectations for the full financial year. We anticipate a more difficult second semester," CEO Remo Brunschwiler comments on the half-year result. In an increasingly more demanding market environment, order intake for continuing operations rose to MCHF 366.4
(+7.3%) compared to the same period last year. Order backlog, totaling MCHF 493.9 (-24.1%) as of 30 June 2009, is below last year's figure. The same is the case for net sales, which fell to MCHF 334.0 (-5.1%) as a consequence of the lower order backlog recorded at the end of 2008. By contrast, operating profit (EBIT) grew to MCHF 16.0 (+24.0%), which is mainly due to improvements in project execution. The currency effects canceled each other out: a stronger US dollar was offset by a weaker euro.
 
Divisions affected differently by crisis
The Warehouse & Distribution Solutions division booked two major orders, which helped raise the first half-year's order intake to MCHF 245.5 (+9.6%). However, order backlog as of 30 June 2009 stood at MCHF 343.1 (-31.3%), well below last year's figure. The economic slump, which began in the second half of 2008, made
itself felt here, causing a sharp reduction in new orders. The resulting lower order backlog led to a decline in net sales to MCHF 213.3 (-9.4%). Nevertheless, the division succeeded in growing operating profit (EBIT) to MCHF 8.9. The increase by MCHF 2.0 compared to last year is the result of two opposing one-time effects, which
led to the positive difference in EBIT on a net basis (positive effect: improved project execution; negative effect: impairment of intangible asset). The higher EBIT combined with lower net sales produced an improved EBIT margin of 4.2% (previous year's figure: 2.9%).

The Healthcare Solutions division was comparatively less affected by the difficult economic environment, and has once again proved to be a stable source of earnings: order intake (+2.7% to MCHF 121.0) as well as order backlog (-0.7% to MCHF 150.8) reached values only slightly different from last year's. Net sales saw an increase
to MCHF 120.8 (+3.5%). Operating profit (EBIT) rose, thanks to the stronger US dollar in particular, to MCHF 11.5 (+7.5%); with constant exchange rates, it would have remained unchanged. The division's EBIT margin stood at 9.5%, thus recording a rise yet again (first half-year of 2008: 9.2%).
 
Improved financial result, lower taxes
Financial income diminished to MCHF 2.8 (previous year: MCHF 4.6) owing to the missing positive one-time effect of MCHF 4.1 recorded in the first half of 2008.
However, this reduction was more than offset by notably lower financial expenses of MCHF 3.0 (previous year's figure: MCHF 7.0). The decline was due to improved results arising from currency translations. The net financial result amounted to MCHF -0.2 (last year:

MCHF -2.4). Income tax fell to MCHF 3.9 (first half-year 2008: MCHF 5.0). The improved financial result and lower taxes, in addition to the higher operating profit, led to a significant growth of net profit to MCHF 11.9 for continuing operations (first half-year 2008: MCHF 5.5). The Group's financial situation developed positively as well. The equity ratio grew from 33.9% to 37.5% year-on-year while the net cash position rose to MCHF 75.1 (+19.2%).
 
Outlook
In view of the persisting economic crisis, Swisslog expects a more difficult second half-year compared to the first one. This applies most notably to the Warehouse & Distribution Solutions division, which is facing a decline in demand, increasing price pressure and a lower order backlog. The market environment for the Healthcare
Solutions division, by contrast, should continue to be less affected by the crisis in the second half-year. The outlook given in March 2009 for the current business year is being confirmed. Swisslog anticipates a decrease in net sales of 15% to 20% versus 2008 and an EBIT margin comparable to last year - barring any unforeseen
events.
 

Source: Transportweekly