Phoenix Mecano 2002: First posted loss since the company was founded - Prospects for 2003 remain intact

Wednesday, 30. April 2003 07:15

Consolidated gross sales per division

None of the group's four divisions managed to buck the market trend
last year. The corresponding declines in turnover were as follows:
Enclosures were down 8.4%, Electrotechnical Components 4.7%,
Mechanical Components 3.4% and Electronics Contract Manufacturing
(ECM) 2.8%. Adjusted to include the acquisition of backplane
manufacturer Hartmann Elektronik, the drop in turnover in the ECM
division totalled 12.5%.


Development of the company's cash flow and operating result

The operating result reflects this trend, decreasing by 31.5% from
EUR 17.3 million to EUR 11.8 million. The company's cash flow dropped
by 9.3% from EUR 41.1 million to EUR 37.3 million.


Financial result and net profit

Non-recurrent expenditure totalling EUR 40.6 million caused earnings
before interest and taxes to drop to EUR -28.8 million. These
non-recurrent expenses can be broken into restructuring costs (EUR
9.0 million), impairment losses on stocks and fixed assets (EUR 1.9
million) and extraordinary goodwill depreciation (EUR 29.7 million).
The group's intention behind this extraordinary goodwill depreciation
was to take account of the uncertain medium-term prospects. Currency
losses caused the financial result to slip to EUR -6.5 million, as
opposed to EUR -5.4 million the previous year. For 2002 the group
posted a net loss of EUR 38.3 million, compared with a net profit of
EUR 5.0 million the previous year. This is the first time the company
has posted a loss since it was founded in 1975. Despite the
depreciation of virtually all of the group's goodwill, its equity
ratio is very solid for the sector, at 41.8%.


Focus on systems engineering

Many customers are increasingly expecting an extended range of
products and services from their component suppliers. Phoenix Mecano
is capitalising on this trend by increasingly offering combinations
of keypads, housings and electronic components including functional
tests for complete units.


The first quarter of 2003

At EUR 85.3 million, the group's consolidated gross turnover for the
first quarter is just 1% down on the figure of EUR 86.2 million from
the corresponding quarter the previous year. Adjusted for currency
effects, this resulted in growth of 1%. The group EBIT (operating
result) was EUR 8.8 million, which is equivalent to a rise of 45.2%
on the previous year's level of EUR 6.1 million. Where the EBDIT was
concerned, cash flow increased by 15.4% from EUR 12.4 million in the
equivalent quarter the previous year to EUR 14.3 million. This gives
an EBDIT margin of 16.8%. Net profit was boosted by 36% to EUR 5.3
million, compared with EUR 3.9 million in the equivalent quarter the
previous year.


Prospects for 2003

The investment bottleneck building up on Phoenix Mecano's markets
will only lead to a tangible improvement in the situation in 2004.
Barring any further significant slump in the economy, the group's
turnover should approximately reach last year's level. The success of
the group's cost-cutting measures lead it to expect a significantly
improved operating result. If investment picks up again, Phoenix
Mecano will benefit disproportionately.

Dividends

Instead of a dividend, on 20 June 2003 the repayment of the second
instalment (CHF 6) of the nominal value will be paid out, as agreed
at the last General Meeting.


Elections to the Board of Directors

Following the group's restructuring, the outgoing Board of Directors
would like to clear the way for some fresh young blood. Most of its
members are therefore not standing for re-election, exceptions being
the Delegate of the Board, Benedikt Goldkamp, and long-standing Board
member Ulrich Hocker. At the 2003 General Meeting the outgoing Board
of Directors will nominate Dr Florian Ernst (Zurich), Dr Martin
Furrer (Zumikon) and Beat Siegrist (Herrliberg) for election to the
Board. The intention is to propose that Mr Ulrich Hocker be appointed
Chairman of the Board.


The press release can be downloaded from the following link:
View document
If you have any further questions, please contact:

Phoenix Mecano Management AG
Mr Benedikt Goldkamp
Tel. +41 (0)43 255 4 255
Fax +41 (0)43 255 4 256
Lindenstrasse 23, CH-8302 Kloten
Related Links: Phoenix Mecano AG
Author:
Hugin
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