Press Release: Figures for 2019: Schweiter reports strong revenue and earnings growth

Steinhausen, March 10, 2020 -- Schweiter Technologies successfully

closed out the 2019 business year with a double-digit increase in both

sales revenues and earnings amid challenging market conditions.

Driven by the acquisition of the Perspex companies at the end of 2018,

net sales revenues rose to CHF 1,179.6 million (prior year: CHF 1,047.4

million), an increase of 13% (15% in local currencies). Adjusted for

acquisitions and currency effects, organic sales growth came to 1%.

Group EBITDA rose by 14% to CHF 126.5 million (prior year: CHF 111.0

million) despite one-off integration expenditures, so that the return on

sales improved to 10.7%. In organic and currency-adjusted terms, EBITDA

was up by 7%. EBIT rose to CHF 88.6 million (previous year: CHF 82.2

million), while net income increased to CHF 62.6 million (previous year:

CHF 60.3 million).

Operating cash flow came to about CHF 104 million, equivalent to a

year-on-year increase of more than 70%. Cash and cash equivalents rose

to around CHF 116 million following a dividend distribution of

approximately CHF 57 million. At the General Meeting on April 8, 2020,

the Board of Directors will propose the payment of a dividend of CHF 40

per bearer share and the addition of Lars van der Haegen and Heinz

Baumgartner to the Board of Directors.

The media conference will be held today at 11 a.m. at the Marriott Hotel,

Neumühlequai 42, in Zurich.

The 2019 Annual Report and the investor presentation can be downloaded

from:

http://www.schweiter.ch/s1a200/investoren/geschaftsberichte-prasentationen.html

Key figures

Schweiter Technologies Group (in CHF

m) 2019 2018 + / -

------- -------- ------

Net revenues 1,179.6 1,047.4 +13%

EBITDA 126.5 111.0 +14%

as a % of net revenues 10.7% 10.6%

EBIT 88.6 82.2 +8%

Net income 62.6 60.3 +4%

------- -------- ------

Course of business

2019 was yet another challenging business year in which the various

market segments and geographies reported quite disparate rates of

growth. On the one hand, global demand grew for core materials for the

wind energy sector, the North American architecture business, and

European sales of structural components for road and rail vehicles. On

the other hand, organic growth in both the European and the US Display

business fell short of the previous year and missed the business units

own targets. Although the Architecture business performed very well

overall, it failed to repeat the strong showing from the previous year

in Europe and Asia.

Display

Demand in the display market is linked to customers' assessment of the

economic outlook. Simmering trade conflicts coupled with uncertainties

about the further economic development in Europe and the USA therefore

resulted in a weakening of display demand at the retail level, which is

a crucial sales driver.

In addition, falling prices for acryl raw materials dampened demand for

clear sheet products in Europe -- anticipating a drop in prices,

customers scaled back or postponed orders and reduced inventories to a

minimum along the entire supply chain.

A bright spot is the integration of the two Perspex companies, acquired

at the end of 2018, into the European sales organization. Perspex, the

leading manufacturer of cast acrylics, is a perfect fit for the existing

product and brand portfolio and contributed substantially to sales and

profit growth.

Architecture

ALUCOBOND(R) celebrated its 50th anniversary in 2019. Sales in the

Architecture business in the year under review were very mixed

regionally. Whereas the USA posted double-digit sales growth, the

European and Asian markets lagged behind the strong figures from the

previous year.

The European construction business registered a growth slowdown compared

with the strong rise reported in earlier years. In regions with a high

level of building activity, builders' capacity limitations held further

expansion in check. Sales increases were reported in central and

southern Europe and in the Benelux countries, whereas the UK and Turkey

saw revenues decline sharply in some cases. Uncertainty in connection

with Brexit had a dampening effect on the construction industry in the

UK, while economic turbulence led to a decline in sales revenue in

Turkey.

The construction industry in the USA stayed on a growth trajectory in

2019. 3A Composites holds a leading position in architects'

specifications for new builds and renovations and it outperformed the

market by a wide margin in the year under review. Revenue was up by

almost 20%, while profitability rose at an even higher rate. The growth

in the US Architecture business was supported by strategically expanded

partnerships with selected distribution partners and an improved service

offering. Moreover, the sustained trend to high-value, flame-retardant

or non-combustible cladding continues to favor 3A Composites' position

as the market's quality leader.

Demand for architecture products in Asia and the Middle East was mixed.

In India, overcapacity and financing bottlenecks in the private

construction sector resulted in delays to current projects and a

fall-off in the number of new builds. By contrast, sales revenues in

Egypt, Saudi Arabia, Vietnam and Malaysia increased. Sales volume in

China was also very gratifying, even though revenues did not quite reach

the previous year's strong level -- two major projects in 2018 could not

be repeated on the same scale in 2019. Uncertainty concerning local

building regulations led to a fall-off in demand in Australia.

Core Materials

The Core Materials business maintained its strong growth momentum from

the first half of the year, closing out 2019 with an overall sales

increase of almost 30%. The steep rise in demand for core materials for

the wind energy sector resulted in a very high capacity utilization of

production facilities and an even higher rate of earnings growth.

3A Composites remains the clear market leader for core materials for

wind turbines, with a systematic focus on PET foams and balsa materials.

3A Composites is the world's largest balsa wood plantation owner, with

efficiently managed plantations in Ecuador and Papua New Guinea, and

this unique selling proposition enables it to provide a stable and

reliable supply of balsa products to its customers.

In addition to the very satisfactory trend in the wind energy sector,

the US marine market and the automotive and industry market segments

reported higher sales revenue.

Transportation

The Transportation business posted the most successful year in its

history to date. Sales grew by more than 20%, while profitability grew

at a faster rate than it had the previous year thanks to ongoing firm

demand for weight-saving solutions for buses, mobile homes and trains.

The Road Vehicles market segment, encompassing systems for buses, mobile

homes and electromobility, made the largest contribution to sales

growth. The success in this market segment was driven by various

factors: customers' good order backlog, a volume increase in new

light-weight chassis for buses and mobile homes, and rising demand for

light-weight components for electric buses.

Outlook

3A Composites has gotten off to a strong start in the new year. It

expects its good performance to continue despite macroeconomic

uncertainties.

The economic forecasts show a mixed outlook for the European and US

display markets. On the one hand, digitization is driving a shift from

brick-and-mortar retailing to online commerce. On the other hand,

structural growth in the area of Hotel & Hospitality is expected to hold

up, with a trend to increasingly higher-value and faster-changing

interior fittings.

The Architecture business should also continue to perform strongly on

the back of the buoyant construction industry in Europe, the USA, and

Asia. The trend to non-combustible cladding panels, the strong market

position of 3A Composites, and the full pipeline of infrastructure

projects are driving medium-term sales growth in the Architecture

business.

The Core Materials business is benefiting from sustained firm demand

from the wind energy sector. Megatrends such as neo-ecology (renewable

energies, reduction of waste and of CO(2) emissions, etc.) plus

electromobility are lifting medium-term growth in the area of wind

energy and in the Automotive and Marine segments.

The Transportation business has a good order backlog. Demand for

weight-saving solutions for buses, mobile homes and rail vehicles should

remain firm and act as a springboard for further growth.

The Board of Directors will propose paying an unchanged dividend of CHF

40 per bearer share at the General Meeting on April 8, 2020. This adds

up to a total payout of about CHF 57 million. The company will continue

to pay an attractive dividend in addition to its investments in its

organic growth and acquisitions. The payout ratio is determined by the

target ratio of equity to debt financing as well as by the amount of

planned capital spending.

Addition to the Board of Directors

In addition to the already announced nomination of Lars van der Haegen,

the Board of Directors, seeking a long-term succession plan, proposes

that the General Meeting of April 8, 2020 elect its long-serving CEO

Heinz Baumgartner to the Board.

For further information please contact:

Martin Klöti, CFO

Tel. +41 41 757 77 00, Fax +41 41 757 70 01,

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March 10, 2020 01:00 ET (05:00 GMT)