Orell Fuessli Holding AG : Orell Füssli contends with difficult business conditions
04/12/2012| 02:41am US/Eastern
Orell Füssli contends with difficult business conditions
Structural action in response to unsatisfactory operating
results in 2011
Zurich, April 12, 2012 - Orell Füssli reported sales of
CHF 287.8 million in the 2011 financial year, equivalent
to a decline of 9.9% compared with the previous year.
After adjustment for exchange rate movements and changes
in the scope of consolidation, revenues were 5.4% lower.
The Security Printing and Book Retailing divisions were
the main contributory factors to this outcome. Operating
earnings (EBIT) of the Orell Füssli Group declined to CHF
2.4 million (CHF 13.2 million in 2010). Operating
earnings were depressed by provisions in book retailing
and at Atlantic Zeiser totalling CHF 6.8 million. Profits
in security printing were lower than expected due to the
further postponement of a major order. Net income for the
period excluding minority interests amounted to CHF 0.2
million (CHF 9.5 million in 2010).
Atlantic Zeiser (AZ) reported a 4.5% increase in sales
revenues to € 61.9 million in the 2011 financial year.
Operating earnings before non-recurrent provisions
amounted to € -1.5 million (€ + 0.2 million in 2010).
Higher personnel expenditure with a view to boosting
marketing and sales performance also contributed to this
outcome. Rationalisation efforts that were initiated in
development and manufacturing operations as well as the
focusing of market services on promising sectors are
aimed at returning AZ to profitability.
Manfred Minich has been appointed new CEO of AZ. An
experienced, market-oriented corporate manager from the
industrial sector, he will assume his position at the
beginning of May 2012.
Security printing suffered a 14% decline in sales to CHF
85.4 million (CHF 99.3 million in 2010). This was
attributable to the order mix, price competition and the
adverse currency trend. Despite these difficult
circumstances the division reported EBIT of CHF 11.3
million (CHF 13.1 million in 2010). The optimisation
efforts which have been pursued in production operations
for the past two years made a significant contribution to
this outcome. Overall capacity utilisation was at a high
level, despite the fact that the starting date for
printing the new series of Swiss banknotes was postponed
again. More foreign customers were gained in the period
Sales revenues in the book retailing business at Orell
Füssli - and also throughout the sector - declined due to
price reductions and slightly lower sales volumes.
Overall sales amounted to CHF 113.8 million, equivalent
to a decline of 5.1% compared with the previous year (CHF
119.9 million). The division reported a breakeven result
(CHF 0.3 million) before non-recurrent provisions.
Provisions on the order of some CHF 3 million were set
aside for forthcoming adjustments to the branch
Despite these unsatisfactory results, Orell Füssli's
balance sheet is still very sound with an equity ratio of
66.5% (72.9% in 2010) including minority
Dividend proposal to the Annual General Meeting
The Board of Directors will propose to the Annual General
Meeting on May 10, 2012, that a dividend of CHF 2.-- per
share should be paid. Our long-term dividend policy does
not foresee a dividend payment on the basis of the
current results. However, it is justifiable in light of
the sound balance-sheet situation. The proposed dividend
is intended to underline our confidence in the future
development of the company.
Changes in the Board of Directors
Klaus Oesch, the present Chairman of the Board, will
retire from the Board as planned at the Annual General
Meeting. A proposal will be submitted to the Annual
General Meeting to elect Heinrich Fischer as a new member
of the Board. It is intended that Heinrich Fischer should
assume the chairmanship of the Board of Directors after
his election by the Annual General Meeting. Heinrich
Fischer is a recognised industry professional with many
years of international experience as a member of the
executive board of Oerlikon Bührle and as CEO and a
director of Saurer AG. He is currently chairman of an
investment company and a director of listed companies
such as Tecan, Schweiter, Hilti and other companies.
Orell Füssli expects results at Atlantic Zeiser to
improve significantly in 2012. Capacity utilisation can
be expected to remain high in security printing. The
order mix will improve compared with the previous year.
The question of when the production of the new Swiss
banknotes can finally begin is still unanswered to date.
In book retailing the current market trend of declining
sales in physical outlets is expected to continue. At the
same time Orell Füssli is facing up to the challenges and
seeking to exploit opportunities selectively in the
rapidly changing book retailing environment.