Well-positioned for Growth Through Year’s Strategic Groundwork

In the fiscal year 2010/11 the Schaffner Group recorded consolidated net sales of CHF 183.7 million, a decrease of 2.8% from the prior year (FY 2009/10: CHF 188.9 million). However, sales grew by 9% in local currencies. Operating profit (EBIT) was CHF 12.8 million (prior year: CHF 15.0 million). Amid the underutilization of the manufacturing plants (caused par-ticularly by the weak demand from China's railway industry), the non-recurring costs related to moving into the new facility in Shanghai and the acquisition-related expenses in the USA, the EBIT margin eased to 7.0% (prior year: 7.9%). The Group earned net profit for the year of CHF 10.2 million (prior year: CHF 12.0 million), representing basic earnings per share of CHF 16.03 and diluted earnings per share of CHF 15.43 (prior year: basic EPS of CHF 18.87 and diluted EPS of CHF 18.68).
In the 2010/11 fiscal year the sales contribution from the strategic growth markets of energy-efficient drive systems, renewable energy, rail technology and automotive electronics grew from 63% to 65%. The geographic sales split changed only little. Europe, at 57% (prior year: 60%), remained the largest geographic market for Schaffner, while the Americas had a share of 8% (prior year: 7%). The Asia/Pacific region accounted for 35% of consolidated sales (prior year: 33%), including 20% from the Chinese market (prior year: 22%); China thus re-mains Schaffner's second largest national market after Germany.
The integration of Schaffner MTC is progressing as planned. With the relocation in China to the new operations and production facility in Shanghai, the Schaffner Group has streng-thened its competitive position, particularly in the Chinese market. The roll-out of a SAP sys-tem, which will be largely complete in the first half of 2011/12, will drive further process opti-mization, especially in material planning and logistics.
The Schaffner Group expects the railway market in China and the photovoltaic market to re-cover in the course of fiscal 2011/12 from the lows of the second half of 2010/11. Nonethe-less, given the macroeconomic and global political environment, the further trajectory of the sales markets cannot be predicted with confidence. Currently it is not possible to forecast the Group's results for the fiscal year 2011/12. However, the medium-term targets remain in place: an operating profit margin of 10% and sales of more than CHF 200 million.