Schaffner: 2011/12 Interim Results Fall Short of Last Year's Strong Performance

As announced, the results posted by Schaffner Group for the first half of 2011/12 failed to keep pace with the previous year's strong performance. Net sales of CHF 81 million (1st half of 2010/11: CHF 98.6 million) are 17.9% lower year-on-year (13.8% in local currencies). After adjustment for the CHF 7.7 million contribution to sales of the newly consolidated Schaffner MTC LLC, this amounts to a fall of 25.7%. Although production capacities were systematically adapted to reflect demand and fixed costs were reduced slightly despite the first-time consolidation of Schaffner MTC, the drop in sales led to a decline in operating result (EBIT) to CHF 1.4 million (CHF 9.0 million), with an EBIT margin of 1.7% (9.1%). Net profit amounted to CHF 0.3 million (CHF 7.2 million).
At the end of the first six months of the current fiscal year new orders are considerably higher than during the second half of the previous year. During the first half of 2011/12, the book-to-bill ratio was greater than 1 in all three divisions and hit 1.10 for the entire Group compared to 1.03 after the first six months of the 2010/11 fiscal year and 0.97 after twelve months. On the one hand, a new inventory cycle has begun and electronic component distributors in particular have started investing in larger inventories once again. At the same time, demand for products for photovoltaic applications and rail technology is also picking up. Integration of the US company Schaffner MTC LLC, acquired in September 2011, into the Power Magnetics division has been successfully completed. Schaffner MTC contributed CHF 7.7 million (USD 8.5 million) or 9.6% of the Schaffner Group's half-year sales and met expectations with an EBITDA margin in the upper single-digit range.
The prospects of all divisions have improved across the board. Due to strong order intake during the first half of the year, sales during the second half of 2011/12 should exceed those of the first half and the same period of the previous year in all divisions. Major new product launches will give sales in the Automotive division a further boost as of summer 2012.