Positive business development in a challenging year; Schekolin AG's business unit «Plastic Tubes & Laminates» sold

In the financial year 2016, Looser Holding AG generated consolidated net revenues of CHF 434.2 million (prior year: CHF 436.4 million). This corresponds to a decline by 0.5 percent from the previous year. After adjustments for currency effects and revenues of the divested Temperature Control segment (Single Group) in the amount of CHF 29.8 million (11 months) included in the prior year figures as well as for revenues of CHF 1.1 million relating to WMS WC-Mietservice GmbH (WMS) acquired in early September 2016, the Looser Group achieved a 5.6 percent revenue growth. The operating result (EBITDA) declined to CHF 46.1 million (prior year: CHF 64.4 million) and the EBITDA margin decreased from 14.8 percent in the previous year to 10.6 percent. Earnings before interest and taxes (EBIT) amounted to CHF 20.4 million (prior year: CHF 35.9 million), the EBIT margin to 4.7 percent (prior year: 8.2 percent). WMS contributed CHF 0.3 million to the operating result. The decline in EBITDA directly related to the effects of the disposal of the Single Group in the prior year. On the one hand, the Single Group contributed CHF 2.0 million to the operating result in 2015, on the other hand, the Looser Group generated a non-recurring profit of CHF 19.8 million from the sale of the Temperature Control segment. Excluding these effects, the prior year EBITDA was CHF 42.6 million. Due to the strategic projects «Sale of Coatings Group» and «Business Combination with Arbonia AG», non-recurring special expenses of CHF 3.7 million were incurred in the year under review without which the operating result in 2016 would have been CHF 49.8 million (2016 EBITDA margin: 11.5 percent / 2015 EBITDA margin after adjustments: 10.5 percent). After adjustments for these non-recurring effects, the operating result increased by about 17 percent from the previous year.

Consolidated net income / net debt

Based on the reduced operating result, the Looser Group reported consolidated net income of CHF 8.8 million (prior year: CHF 23.7 million). As of 31 December 2016, shareholders' equity was CHF 153.1 million. The equity ratio amounted to 38.5 percent. As a result of the reduced cashflow due to non-recurring special expenses relating to the abovementioned strategic projects as well as the outflow of funds for the acquisition of WMS and investments to increase productivity in the Doors segment, net debt increased from 31 December 2015 to CHF 93.4 million (prior year: CHF 85.3 million).

Investments

In the year under review, the Looser Group invested CHF 19 million. Significant funds were used to optimize and further expand manufacturing infrastructures, means of production, process improvements and innovation as well as to expand rental equipment. Currently, a major investment project is the construction of the new Condecta site and storage facility in the Swiss Central Plateau which is scheduled to be commissioned in mid-2017.

Coatings segment - again subject to significant challenges

Net revenues in the Coatings segment declined by 1.2 percent from the previous year to CHF 137.9 million (prior year: CHF 139.6 million). The decline after currency adjustments amounted to 0.9 percent. The operating result (EBITDA) decreased to CHF 6.6 million (prior year: CHF 7.1 million) and the EBITDA margin to 4.8 percent (prior year: 5.1 percent). The generally challenging market environment, continuous competitive and price pressures as well as weak sales in individual markets had a material negative impact on the development of revenues and earnings. Most severely affected was the area of furniture coatings for industrial applications in Switzerland. Revenues in the packaging coatings area were again at the prior year level. Very satisfactory revenue growth was generated in the area of non-stick coatings, inter alia due to successes in the area of Technical Applications. The operating result of the Coatings Group continued to be affected by special expenses relating to the relocation of the wood coatings production activities to Bendern (Liechtenstein).

Siegwerk acquires Schekolin AG's business unit «Plastic Tubes & Laminates»

On 27 February 2017, Looser Holding AG completed the sale of the business unit «Plastic Tube & Laminates» (PTL - polyethylene and laminated tubes) of Schekolin AG in Bendern (Liechtenstein). The new owner is Siegwerk Druckfarben AG & Co. KGaA in Siegburg near Cologne, Germany. The contracting parties have agreed not to disclose the purchase price.

The sale included the technical expertise, the entire product portfolio as well as the manufacturing equipment of Schekolin AG's business unit «Plastic Tubes & Laminates». Both companies will work closely together to ensure a handover of business without any interference for the customers of both parties.

Siegwerk, a sixth-generation family-owned company, is one of the leading international manufacturers of printing inks and individual solutions for packaging, labels and catalogs. With more than 180 years of experience, the company has solid expertise in and knowledge of many printing procedures. Siegwerk employs some 5,000 people worldwide in more than 30 country organizations and is headquartered in Siegburg near Cologne. With this acquisition, Siegwerk broadens its portfolio by adding speciality UV varnishes suitable for plastic packaging including rigid tubes. The varnishes can be applied on a wide range of laminates and tubes based on plastic substrates. This product line expansion further strengthens the company's position as full-range provider for packaging applications.

The entity Schekolin AG and the production plant in Bendern will continue to exist. Schekolin AG will carry on the business activities in the remaining business units «Metal Packaging for Cans and Fasteners», «Aluminum Tubes & Aerosol Cans», and «Spray Paints for Perfume, Cosmetics and Beverage Packaging made of Plastic, Glass and Metal» and continue to focus on the production of wood coatings as contract manufacturer for the Feyco Treffert Group. Furthermore, Schekolin AG will continue to produce PTL coatings for Siegwerk under a contract manufacturing agreement for at least another four to seven months.

To ensure the provision of services for Siegwerk and the Feyco Treffert Group, the production and laboratory capacities as well as the market organization of Schekolin AG will initially be maintained at their existing levels.

Meanwhile, the selling process relating to the remaining business units and the entity Schekolin AG as well as the Feyco Treffert Group and the Industrial Coatings Group (Ilag) is continuing. Looser Holding AG is confident that these disposals will also be successfully completed in the near future so that the sales targets communicated will be achieved for the entire Coatings segment.

Industrial Services segment - revenue target outperformed, weakened profitability

Net revenues of the Industrial Services segment increased by 9.5 percent from the previous year to CHF 61.3 million (prior year: CHF 56.0 million). The growth rate after adjustments for currency and acquisition effects was 7.4 percent. The operating result (EBITDA) declined from CHF 15.3 million in the previous year to CHF 14.9 million. The EBITDA margin amounted to 24.2 percent (prior year: 27.4 percent). The high revenue growth was due to intensified distribution activities and substantial demand in the trade, rental and event services business. The implementation of a housing development project for asylum seekers (trade business) also helped to achieve such growth. Despite the positive revenue development, the operating margin declined. On the one hand, the trade business, which generates lower margins than the rental business, grew overproportionately in the reporting year 2016. On the other hand, price pressures on the rental and trade business increased due to aggressive competition at the domestic and international levels.

Doors segment - marked increase in revenues and profitability

The Doors segment reported net revenues of CHF 238.8 million (prior year: CHF 215.1 million), a significant rise from the previous year by 11.0 percent. The increase in revenues after currency adjustments was 9.3 percent. The operating result (EBITDA) of CHF 32.6 million (prior year: CHF 25.0 million) and the EBITDA margin of 13.6 percent (prior year: 11.6 percent) also improved significantly from the prior year figures. The strong demand in the residential and non-residential building sectors in Germany, positive market conditions in Poland as well as the effects of measures implemented to remedy bottleneck situations and increase productivity and thus the improved delivery readiness and speed were the main drivers of this positive development.

The audited financial figures for the financial year 2016 will be published on 16 March 2017. The German language annual and financial report will also be published on 16 March 2017 and made available at www.looserholding.com.

Changes to the Board of Directors and Group Executive Management

The composition of the top controlling bodies of Looser Holding AG was adjusted as of the date of completion of the business combination with Arbonia AG on 13 December 2016. The former Board of Directors of Looser Holding AG, composed of Rudolf Huber, Chairman, and the members Marcella Looser-Paardekooper, Rudolf Hadorn, Thomas Lozser, Christian Wenger and Paul Zumbühl, resigned as of the completion date. Rudolf Huber also stepped down from his office of Acting CEO of the Looser Group as of 13 December 2016. The Board of Directors of Looser Holding AG is now composed of Alexander von Witzleben, Chairman of the Board of Directors and CEO of Arbonia AG, Felix Bodmer, CFO of Arbonia AG, and Christoph Fierz, the former CFO of the Looser Group. Christoph Fierz was appointed delegate of the Board of Directors of Looser Holding AG as of 21 December 2016.

Outlook 2017

The integration into the Arbonia Group of the Doors and Industrial Services segment is well advanced. As mentioned above, the selling process for the remaining businesses and product areas of the Coatings segment continues. The reporting activities will be managed by the Arbonia Group in the future.

Due to the acquisition of additional Looser shares, Arbonia AG currently holds more than 98 percent of the share capital of Looser Holding AG and filed action with the competent court in the Canton of Thurgau for the cancellation of the remaining Looser shares pursuant to article 137 of the Financial Market Infrastructure Act (Finanzmarktinfrastrukturgesetz) on 14 February 2017. Looser Holding AG has applied to the SIX Swiss Exchange for a delisting of all its shares. The delisting is scheduled to take place after the invalidation decision becomes legally binding. For the period of time until the effective delisting, an application has been filed with the SIX Swiss Exchange for exemption from certain conditions for the continuation of the listing pursuant to the Listing Rules (Kotierungsreglement).

Key figures of the Looser Group (unaudited)

(amounts in thousands of CHF)

Key figures Coatings segment (unaudited)

(amounts in thousands of CHF)

Key Figures Industrial Services segment (unaudited)

(amounts in thousands of CHF)

Key figures Doors segment (unaudited)

(amounts in thousands of CHF)

Key figures Temperature Control segment (unaudited)

(amounts in thousands of CHF)

1 For 11 months