Gurit achieves net sales growth of 3% and a strong operating profit margin of 10.5% in the first half of 2016
Gurit 1HY 2016 Report
Gurit Composite Materials
The business unit Composite Materials achieved net sales of CHF 136.0 million in the first half of 2016 (1HY 2015: CHF 136.6 million), a decrease of -0.6% on currency-adjusted basis and -0.4% in reported Swiss francs. Wind energy material demand saw a sales contraction of -3.1% on currency-adjusted basis and -2.7% in reported Swiss francs. Despite growth in most other global wind energy regions, the anticipated weaker demand in the Chinese wind energy industry of some 15% compared to the record year 2015 had its overall negative impact on the Company due to its high importance for Gurit. Sales to other material markets (Marine, Aerospace, Industrial, Automotive Materials, and Ballistics) increased by 2.4% to CHF 62.5 million in the first half of 2016.
Gurit Composite Components
The business unit Composite Components (car parts, bus components, structural engineering) reported sales of CHF 9.4 million for the first half-year 2016 as compared to CHF 14.9 million in the first six months of 2015. This represents a decrease of -35.4% on a currency-adjusted basis (‑36.8% in reported Swiss francs) and results from the known contract expirations over the course of 2015. Optimization of the future operational footprint of the business unit led to the majority of the reported, mostly non-cash effective one-off expenses from asset impairments in the UK.
In Tooling, sales of wind turbine blade moulds and related equipment in the first six months of 2016 increased by 44.3% to CHF 36.8 million (1HY 2015: CHF 26.3 million) on a currency-adjusted basis and +40.2% in reported Swiss francs. International customer demand for mould systems was much stronger than anticipated in the first six months of 2016, and Chinese mould demand for longer blades held up stronger than expected, as well.
Operational and Financial Result
Gurit achieved a strong operating profit of CHF 19.1 million in the first six months of 2016. The operating profit margin accordingly rose to 10.5% of net sales containing one-off expenses of CHF 2.5 million, mainly related to non-cash impairment charges in the U.K. of CHF 2.0 million. Operating profit improved by 21% compared to CHF 15.8 million in the first half of 2015. Operating profit margin before one-off costs reached remarkable 11.8% of net sales.
Profitability in particular benefited from the continued good turnover in the tooling business as well as a favorable product mix in the composite materials business. Moreover, the ongoing operational improvements contributed strongly to the excellent profitability level. Equally, the raw material sourcing conditions were favorable in the first half-year of 2016.
In total, Gurit generated a positive net cash flow from operating activities of CHF 12.6 million in the first half-year 2016 (1HY 2015: CHF 7.3 million) mainly due to the higher operating profit. Capital expenditures of CHF 7.5 million in the first six months of 2016 (1HY 2015: CHF 6.6 million) mainly related to completion of the set-up of an additional Tooling production hall in China, finalization of the set-up of a semi-automated car part production facility in Hungary, completion of the balsa wood production expansion in Ecuador and the set-up of balsa wood production at the existing site in China.
With an equity ratio of 72.9% at the end of June 2016 as compared to 71.4% at the end of December 2015, Gurit`s balance sheet remains very solid.
The Company confirms the target to deliver single-digit revenue growth for the full year 2016. In terms of profitability, some of the positive effects on profitability experienced in the first six months of the year are expected to even out over the course of the year resulting in an overall profitability level within the target range of eight to ten percent operating profit margin for the full-year 2016.
Online publication of Half-Year Report 2016, Media/Analyst conference and international webcast today, Thursday, August 25, 2016
Gurit has published its Half-Year 2016 Report online at http://investors.gurit.com/publicationsdownloads.aspx
Management will discuss the results today in further detail at a joint media and analyst conference in Zurich at 09:00 a.m. CEST. The conference will take place at SIX Swiss Exchange’s Convention Point, Selnau Strasse 30, CH-8021 Zürich. The presentations will be held in English and will also be accessible as a webcast on www.gurit.com where an archived version will later be available for download.
To the extent that this announcement contains forward-looking statements, such statements are based on assumptions, planning and forecasts at the time of publication of this announcement. Forward-looking statements always involve uncertainties. Business and economic risks and developments, the conduct of competitors, political decisions and other factors may cause the actual results to be materially different from the assumptions, planning and forecasts at the time of publication of this announcement. Therefore, Gurit Holding AG does not assume any responsibility relating to forward-looking statements contained in this announcement.
About Gurit Holding AG
The companies of Gurit Holding AG, Wattwil/Switzerland, (SIX Swiss Exchange: GUR) are specialized on the development and manufacture of advanced composite materials, related technologies and select finished parts and components. The comprehensive product range comprises fiber reinforced prepregs, structural core products, gel coats, adhesives, resins and consumables. Gurit supplies global growth markets with composite materials on the one hand and composite tooling equipment, structural engineering and select finished parts on the other. The global Group has production sites and offices in Switzerland, Germany, Hungary, Italy, Spain, the U.K., Canada, the U.S.A., Brazil, Ecuador, Australia, New Zealand, India and China. For more information, please visit www.gurit.com or sign-up for email alerts at http://investors.gurit.com/...