Schaffner posts significant growth in sales and operating profit

Media Release

Schaffner posts significant growth in sales and operating profit

First-half results 2017/18 affected by one-time effects

Luterbach, 9 May 2018 – The Schaffner Group posted dynamic growth in the first half of 2017/18 in a positive economic environment. New orders were up 14.8 % year-on-year to CHF 114.4 million (previous year: CHF 99.6 million), and net sales rose 14.5 % to CHF 108.3 million (previous year: CHF 94.6 million). In local currencies, the sales increase amounted to 10.2 %.

Operating profit (EBIT) rose substantially to CHF 9.0 million (previous year: CHF 6.0 million), while the EBIT margin increased to 8.3 % (previous year: 6.4 %). The result of the first half of 2017/18 includes various one-time items. Adjusted for the positive impact of the insurance settlement for the fire at the Schaffner plant in Thailand at the end of 2017 as well as costs in connection with the restructuring of the Power Magnetics division, EBIT was CHF 7.5 million and the EBIT margin 6.9%. The net profit of CHF 4.0 million (previous year: CHF 4.2 million) was also affected by a one-time adjustment in connection with the 2017 Tax Cuts and Jobs Act in the USA. Adjusted for these one-time items, the Schaffner Group recorded a net profit of CHF 5.7 million. Earnings per share were CHF 6.24 (previous year: CHF 6.57).

Total assets rose to CHF 155.6 million (30.9.2017: CHF 137.3 million). The equity ratio was 35.9 % (30.9.2017: 39.6 %). Free cash flow was CHF -1.6 million (previous year: CHF -3.1 million).

The EMC division expanded its leading market position in all market regions in the first half of 2017/18. Segment sales were up 21.4 % to CHF 55.5 million (previous year: CHF 45.7 million). Segment profit also rose 21.4 % to CHF 7.5 million (previous year: CHF 6.2 million). The Power Quality business, which is part of the EMC division, successfully launched the new generation of active harmonic filters and posted growth during the reporting period that exceeded the strong overall increase recorded by the EMC division. Thanks to continued progress in operational excellence and the successful implementation of price adjustments, the segment profit margin was maintained at the high prior-year level of 13.6 %, despite the ongoing margin pressure and higher material costs.

The Power Magnetics division increased segment sales despite a weak start in North America by 15.8 % to CHF 27.1 million (previous year: CHF 23.4 million). Under the leadership of the turnaround manager appointed at the end of 2017, the implementation of the restructuring program was accelerated and the structures were streamlined, which generated additional costs in the reporting period. Renegotiations for supply contracts with poor margins are progressing gradually. Year-on-year, the Power Magnetics division reduced the segment loss to CHF 3.2 million (previous year: CHF 3.5 million) and posted a negative segment profit margin before restructuring costs of
-12.0 % (previous year: -14.8 %).


The Automotive division recorded a strong first half of 2017/18. At CHF 25.7 million (previous year: CHF 25.4 million), sales were 0.8 % above the high level of the previous year. The segment result was CHF 8.9 million (previous year: CHF 5.9 million), positively impacted by a one-time effect in connection with the insurance settlement following the fire at the Schaffner plant in Thailand at the end of 2017. The segment profit margin was 34.5 % (previous year: 23.1 %). Adjusted for this one-time effect, the operating profit margin was slightly higher than in the previous year at 23.6 % (previous year: 23.1 %). In the reporting period, additional projects for filters to be used in electromobility were pushed ahead. These projects will have a positive impact on Schaffner's business within the next few years.

Outlook

In a continuing positive economic environment and at comparable exchange rates, Schaffner expects sales growth to continue. Assuming that material prices remain constant in the second half of the year, Schaffner strives to maintain the EBIT margin (excluding one-time effects) at least at the level of the first half. As before, the Schaffner Group continues to aim for organic sales growth of 5 % per year on a multi-year average basis, and for an EBIT margin of at least 8 % in the medium term.

Contacts

Marc Aeschlimann

Chief Executive Officer

T +41 32 681 66 06

marc.aeschlimann@schaffner.com

Kurt Ledermann

Chief Financial Officer

T +41 32 681 66 08

kurt.ledermann@schaffner.com

Half-year report 2017/18

The complete Schaffner half-year report 2017/18 is available at www.schaffner-ir.com.
Click here for the half-year report 2017/18: www.schaffner-ir.com/reports/

Conference call and audio webcast, 9 May 2018, 10.00 a.m

Marc Aeschlimann, CEO, and Kurt Ledermann, CFO, will comment on the results of the Schaffner Group for the first half of 2017/18 in a conference call.

The conference call will be held in German.

The dial-in numbers are:
+41 58 310 5000 (Europe)

+44 207 107 0613 (UK)

+1 631 570 5613 (USA)

When registering for the conference call, please state your name and company.

The presentation of Schaffner’s half-year results 2017/18 will be broadcast live in an audio webcast.

Click here for the audio webcast:
78449.choruscall.com/dataconf/productusers/schaffner/mediaframe/24150/indexr.html

After the presentation the audio webcast is available as a recording. Click here for the recording:
78449.choruscall.com/dataconf/productusers/schaffner/mediaframe/24150/indexr.html

Financial calendar

6 December 2018

11 January 2019

Publication of annual report 2017/18

23rdAnnual General Meeting

Schaffner Group | Key financials

Consolidated income statement | in CHF ‘000

For the first six months (1 October to 31 March)

2017/18

2016/17

Net sales

108,281

94,579

EBIT

8,976

6,037

in % of net sales

8.3

6.4

Net profit for the period

3,959

4,171

in % of net sales

3.7

4.4

Net profit for the period per share in CHF

6.24

6.57

Consolidated balance sheet | in CHF ‘000

31.3.2018

30.9.2017

Total assets

155,621

137,299

Current assets

121,502

101,633

Non-current assets

34,119

35,666

Total liabilities

99,829

82,899

Shareholders' equity

55,792

54,400

Equity ratio in %

35.9

39.6

Cash flow | in CHF ‘000

For the first six months (1 October to 31 March)

2017/18

2016/17

Cash flow from operating activities

2,829

-838

Cash flow from investing activities

-4,978

-1,041

Cash flow from financing activities

10,217

6,569

Free cash flow

-1,618

-3,093

Segment reporting | in CHF ‘000

For the first six months (1 October to 31 March)

2017/18

2016/17

EMC division

Segment sales

55,544

45,746

Segment profit

7,534

6,207

in % of segment sales

13.6

13.6

Power Magnetics division

Segment sales

27,079

23,386

Segment profit

-3,243

-3,461

in % of segment sales

-12.0

-14.8

Automotive division

Segment sales

25,658

25,447

Segment profit

8,862

5,887

in % of segment sales

34.5

23.1

Key share figures

31.3.2018

30.9.2017

Numbers of shares

635,940

635,940

Shareholders' equity per share in CHF

87.73

85.54

Share price in CHF

293

317

Market capitalization in CHF Mio.

186

202

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