Phoenix Mecano nine months into 2012: Slight slowdown in industr


Phoenix Mecano nine months into 2012: Slight slowdown in industrial markets -
Operational optimisation and long-term growth strategy continued

Stein am Rhein/Kloten, 5 November 2012. Phoenix Mecano, a leading technology
company active in the production of enclosures and industrial components, saw
a slight slowdown in global industrial markets in the first nine months of
financial year 2012. The deep crisis in the photovoltaic components segment is
now well advanced and the necessary operational measures in this segment have
been largely implemented. A number of Phoenix Mecano Group submarkets continue
to develop positively, most notably drive solutions for comfort furniture and
beds in the USA and explosion-proof enclosures for the oil & gas industry

Nine months into the year, consolidated gross sales were down 5.4% compared
with the previous year, at EUR388 million. Taking into account changes in the
scope of consolidation, the decline was 6.2%. Positive currency effects
contributed growth of 1.9%. Incoming orders fell by 4.3% to EUR390.1 million.
The book-to-bill ratio of 100.5% (ratio of incoming orders to sales) indicates
a relative stability in business development, despite a downward trend in
sales. Operating cash flow was down 17.8% compared with the same period last
year, at EUR49.3 million. Operating result fell by 26.9% to EUR32.8 million,
corresponding to an operating margin of 8.5% compared with 10.9% last year.

The result of the period after tax declined by 28.6% to EUR23.6 million, owing
to a slight increase in the tax burden.

The expected impairment on assets in the photovoltaic components segment
(ELCOM/EMS division), announced on 27 September 2012, will be charged to the
statement of income for the fourth quarter of 2012 in the amount of
approximately EUR6-8 million, as at the balance sheet date of 31 December

Euro crisis weighs down industrial business, slump in photovoltaic market

Sales in the Enclosures division declined by 3.3% over the period, from
EUR128.6 million to EUR124.3 million. The traditionally strong markets of
Germany and Switzerland, as well as southern Europe, have now been appreciably
impacted by the sovereign debt crisis in the eurozone, albeit for different
reasons. In addition, the current year has seen integration costs for the
newly acquired Leveringhaus production facility in Germany as well as start-up
costs for the new 'product ID labelling' business line. The expansion of
activities in overseas growth markets, particularly in China and India,
continues unabated.

Sales in the Mechanical Components division were down by 1.5%, from EUR168.6
million to EUR166.1 million. Here, a cyclical slowdown in the industrial
solutions segment (RK Rose&Krieger) is being offset by slight growth in linear
drive technology for medical equipment and comfort furniture (DewertOkin),
particularly in the USA and China.

The ELCOM/EMS division recorded a 13.6% drop in sales, from EUR113 million to
EUR97.6 million, mainly owing to the difficult market environment for
photovoltaic components. However, there are now also signs of a slight
slowdown in other industrial markets such as industrial control systems. This
reflects a generally more cautious market attitude towards new investments.


The noticeable caution among market participants regarding investment
decisions is now being felt right around the world. However, this slight
downward trend is in no way comparable to the unexpected and abrupt crisis of
2009. During this phase, Phoenix Mecano is focusing on the systematic
optimisation of its business processes as part of the Group-wide J2OX (Journey
towards Operational Excellence) programme launched in 2011, on the
implementation of the long-term growth strategy with associated capital
expenditure programmes, and on a thorough examination of the business
portfolio with a view to future growth opportunities in new technologies and
to meeting our minimum return targets.

To this end, we are currently building a new logistics centre and an R&D
centre for the DewertOkin arm (Mechanical Components division) in Hungary and
a new plant in the Greater Shanghai area to manufacture electrotechnical
components (ELCOM/EMS division) for the local market. The joint-venture
initiative launched at the start of the year to develop and market LED
exterior lighting components (Aton - ELCOM/EMS division) also illustrates
Phoenix Mecano's commitment to innovate and look to the future in a rapidly
changing world. Thanks to the Group's cash flow, which remains solid, and to
its very strong balance sheet, we are in a position to tackle these diverse
projects in a systematic way, irrespective of economic cycles. Therefore,
despite the very real and ubiquitous challenges, the Management and Board of
Directors see many attractive medium-term opportunities ahead for the Phoenix
Mecano Group.

For further information, please contact:

Phoenix Mecano Management AG

Benedikt Goldkamp, CEO

Lindenstrasse 23

8302 Kloten

Tel.: +41 (0)43 255 4 255

Media release (PDF)

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