Strong currency impact on revenues and earnings for the first half of 2015; change in the Group Executive Management

The strong Swiss franc and weak demand in the Coatings segment had a significant negative impact on the revenues and earnings in the first half of 2015. The efficiency improvement measures implemented or initiated in the business areas so far have not yet had the desired effect.

Consolidated net revenues in the amount of CHF 219.1 million (prior year: CHF 243.9 million) declined by 10.2 percent from the previous year. After adjustments for currency effects, revenues decreased marginally by 1.5 percent. This decline in revenues was primarily due to weaker sales in the Coatings segment. The operating result (EBITDA) amounted to CHF 25.4 million, compared to CHF 30.6 million in the prior year period. The EBITDA margin was 11.6 percent (prior year: 12.6 percent). The operating result was reduced by about CHF 4.4 million due to translation effects as well as direct currency effects (transaction effects).

Consolidated net income amounted to CHF 5.9 million (prior year: CHF 9.7 million). In addition to the reduced operating result, mainly the currency losses in connection with the lifting of the Euro minimum exchange rate as well as an unscheduled revaluation of an interest rate swap had a negative impact on consolidated net income. With an equity ratio of 41.2 percent, the balance sheet continues to be sound.

Net debt decreased by CHF 25.8 million from the comparable prior year date. Compared to the year-end 2014, it increased by CHF 5.7 million to CHF 125.4 million. This increase was due to seasonally low cashflows from operating activities and the cash distribution made from capital contribution reserves.

Coatings: behind expectations

With net revenues of CHF 72.9 million (prior year: CHF 85.5 million), the Coatings segment recorded a marked decline in revenues by 14.7 percent. The decline after adjustments for currency (translation) effects amounted to 13.0 percent. The weak Euro increased price pressures not only with respect to exports but also in the Swiss market. In addition, the demand in various European countries as well as in China continued to be subdued. Against this background, the segment's operating result (EBITDA) declined to CHF 6.4 million (prior year: CHF 9.6 million) and, at 8.7 percent, the EBITDA margin also fell below the prior year figure. (prior year: 11.2 percent). The operating result for the first half of 2015 was reduced by about CHF 2.0 million due to translation and transaction effects.

The project started in 2013 for the relocation of the Feyco production plants in St. Margrethen and Urdorf to the Schekolin premises in Bendern (Principality of Liechtenstein) will be completed in August and thereby was implemented about five months earlier than planned. Thus first synergy effects will already be felt in 2015.

Industrial Services: improved operating margin

Revenues in the Industrial Services segment weakened mainly due to the effects of the Euro. Lower purchase prices had to be passed on directly to customers in the form of price reductions. Net revenues declined by 4.8 percent to CHF 26.8 million (prior year: CHF 28.1 million). While selling volumes in the modular space system and construction equipment trade were lower than in the previous year as a result of Euro price reductions, the rental business saw a positive development. The operating result (EBITDA) of CHF 7.5 million remained at exactly the same level as in the previous year. The operating margin of 28.0 percent improved substantially compared to the prior year period (prior year: 26.8 percent) as well as the full financial year 2014.

Doors: positive environment and growth in local currencies

Expressed in Swiss francs, net revenues of the Doors segment declined by 8.5 percent from the prior year to CHF 104.4 million (prior year: CHF 114.0 million). After currency adjustments, a gratifying growth in revenues by 6.2 percent was recorded. The demand for interior doors remained strong in the major markets of Germany, Poland, Italy, Slovakia and the Czech Republic. In addition, an upward trend compared to the previous year was experienced in the wood trade and wood wholesale sector. The operating result (EBITDA) of CHF 12.8 million (prior year: CHF 14.6 million) fell below the prior year figure but slightly increased against the previous year when expressed in local currencies. The EBITDA margin of 12.2 percent failed to reach the prior year level (prior year: 12.8 percent). The Prüm-Garant Group continues to experience weaknesses in the operational area when coping with increased demand. An extensive package of measures was adopted and initiated to increase capacities and improve the operating margin.

Temperature Control: growth in local currencies

The Temperature Control segment reported a decline in revenues expressed in Swiss francs by 9.3 percent against the prior year to CHF 17.0 million (prior year: CHF 18.8 million). In local currencies, however, the segment experienced a 4.1 percent growth. This increase in local currency revenues was due to stronger demand in the core business and positive developments in Asia. Thus the weaker demand for applications for the semi-conductor industry was offset. The operating result (EBITDA) of CHF 1.1 million generated by the Temperature Control segment declined from the previous year (prior year: CHF 1.7 million).

Envisaged management buy-out and staff changes in Looser's Group Executive Management

In connection with the ongoing concentration efforts, the Board of Directors decided to initiate a selling process for the Temperature Control Segment which is scheduled to be completed in the next nine months. CEO Tim Talaat expressed his willingness to take over Single Temperiertechnik GmbH and thus the Temperature Control segment in a management buy-out and to become active as an entrepreneur. In the opinion of the Board of Directors, such a sale to management constitutes an excellent and sustainable solution for the employees of the Single Group as well as for its customers. Therefore, the Board of Directors and Tim Talaat have signed a mutual letter of intent. Provided that the transaction can be completed in the best interest of Looser Holding AG and on terms and conditions in conformity with the market, Tim Talaat will be given the opportunity to structure a management buy-out. Therefore, Tim Talaat will resign from the position of CEO as of August 31, 2015. He will, however, continue to be available to the Looser Group in an advisory capacity for the completion of individual projects until further notice.

Tim Talaat joined the Looser Group as CEO in January 2009. With extensive competence, great personal commitment and with success, he has led the company through economically challenging times. The Board of Directors respects Tim Talaat's wish for reorientation and would like to thank him for his services rendered to the Looser Group.

Pending the decision on the replacement of Tim Talaat, Rudolf Huber, Chairman of the Board of Directors, will expand his activities at Looser Holding AG and serve as Executive Chairman. Thus the Group's operations will be headed by Rudolf Huber and CFO Christoph Fierz until further notice.

Outlook

Due to the present currency situation and related significant currency effects as well as the weak demand in the Coatings segment, Looser Holding AG expects that revenues in the second half of 2015 will remain at the same level as in the first half of the year. The company is striving to generate an operating margin for the full financial year 2015 in line with that reported in the previous year.

Key figures Looser Group

(Amounts in thousands of CHF)

Key figures Coatings segment

(Amounts in thousands of CHF)

Key figures Industrial Services segment

(Amounts in thousands of CHF)

Key figures Doors segment

(Amounts in thousands of CHF)

Key figures Temperature Control segment

(Amounts in thousands of CHF)