Orell Fuessli Holding AG : Orell Füssli: Unsatisfactory results
02/09/2012 | 01:16am US/Eastern
Orell Füssli: Unsatisfactory results
Results in all divisions well below expectations - severe
impact of special factors.
Zurich, February 9, 2012. According to provisional,
unaudited annual figures, the Orell Füssli Group recorded
sales of CHF 289 million in 2011 (8.8% lower than the
previous year's figure). After adjustments for exchange rate
movements and changes in the scope of consolidation, the
decline in revenue at ongoing businesses amounted to -6%.
In the 2011 financial year Orell Füssli generated operating
earnings (EBIT) of CHF 2.3 million (CHF 13.2 million in
2010). In addition to the operating results at all divisions,
the negative profit trend was also due to special factors at
Atlantic Zeiser and the Book Retailing Division.
Atlantic Zeiser recorded higher sales in euros in 2011, but
growth was significantly lower than expected. Personnel
expenditure, which increased disproportionately, had an
adverse impact. Since last year's results were again
unsatisfactory, radical action has been initiated to reduce
fixed costs. At the same time investments continue to be made
in solutions for promising markets.
Price reductions of up to 10%, caused mainly by exchange rate
movements, were a dominant feature of the book retailing
business. Combined with a slight decline in sales volumes,
this had a massive impact on Orell Füssli's sales revenues.
Lower sales could not be offset to the same degree on the
cost side, so that operating earnings deteriorated compared
with the previous year. In addition to this, profits were
depressed by provisions relating to current and planned
adjustments to the branch network.
In security printing, foreign orders meant that production
capacity was well utilised, despite unexpected delays in
printing the new series of Swiss banknotes. However, the
strong Swiss franc resulted in a considerable reduction in
margins. Orell Füssli was able to offset this by cuts in
personnel expenditure. In December 2011 Orell Füssli
announced that the start of production of the new Swiss
banknotes had been further delayed.
Outlook for 2012
Structural action is being taken at Atlantic Zeiser in 2012
in order to bring about a sustainable turnaround in earnings.
Clearly defined targets and the systematic utilisation of
resources are creating the necessary preconditions to achieve
this. The costs related to this restructuring have been
charged to 2011 accounts.
We expect the price trend in the book retailing business to
stabilise. Orell Füssli is confident of a return to better
results as a consequence of adjustments to the branch
network, the cost of which will have been charged to 2011
accounts, and the expansion of Internet activities.
In security printing the production of the Swiss banknotes
will ensure a return to customary earnings levels.
Orell Füssli will publish detailed annual figures for 2011 on
April 12, 2012.
Key figures for Orell Füssli (new in accordance with
Swiss GAAP FER)