2012 was a challenging year for the industry and thus also for the Metall Zug Group. All business units had to contend with the impact of the debt crisis in Europe and the associated strength of the Swiss franc. Gross sales declined marginally, falling by 0.9% to CHF 856.4 million. (2011: CHF 864.2 million). Moreover, investments in the establishment and expansion of V-ZUG's international business as well as restructuring costs in the infection control business unit (Belimed Group) put a strain on the Group's result. It must also be borne in mind that the real estate unit only made a contribution to profit (CHF 7.5 million) in the first six months of the year under review. By contrast, operating income was positively impacted by an allocation of CHF 6.3 million from the welfare fund (Wohlfahrtsfonds) of V-ZUG AG to the employer's contribution reserves. Overall, the Metall Zug Group achieved operating income (EBIT) of CHF 66.6 million (2011: CHF 96.7 million), which was in line with the forecast communicated in summer 2012. The financial result improved to CHF 8.4 million in the reporting year (2011: CHF –20.2 million), and net income came to CHF 61.5 million (2011: CHF 63.4 million). The Metall Zug Group has a very sound balance sheet: Equity ratio increased to 72.5% (2011: 62.0%), and the net cash position at year-end 2012 stood at CHF 349.6 million.
Household appliances: Impressive sales volume in face of intense competitive pressure
For the household appliances business unit, 2012 was dominated by considerable price pressure. As the leading company in this segment to manufacture its products in Switzerland, for V-ZUG this price pressure, accentuated by the strong Swiss franc, was felt particularly hard. Nevertheless, the household appliances business unit continued to perform well in this extremely difficult environment. V-ZUG sold around 2% more appliances than in the previous year. This growth is primarily attributable to the world debut SteamFinish technology for dishwashers and Vacuisine technology for steamers. Satisfying sales growth was also reported at international level, with business in Belgium, Scandinavia, Russia and Australia developing particularly well. Moreover, V-ZUG secured significant large-scale projects in Singapore and Hong Kong that will be implemented in 2013 and 2014. However, the positive course of international business was not able to compensate for the high price pressure in Switzerland. Sales reported by the household appliances business unit declined marginally by 1.6% to CHF 556.9 million (2011: CHF 566.2 million). Operating income was also impacted by the internationalization of V-ZUG; it fell from CHF 70.4 million to CHF 59.1 million. This figure includes the allocation of CHF 6.3 million from the welfare fund. In the year under review, V-ZUG launched an efficiency program aimed at safeguarding and expanding its position as a leading and innovative supplier of household appliances. The household appliances business unit remains committed to Switzerland as a location for technology and industry.
Infection control: Internal processes dampen result
The infection control business unit (Belimed Group) failed to meet expectations for the 2012 financial year. As a consequence of the strategic realignment to create business segments consistently aligned to the market, projects launched in mid-2011 to boost efficiency did not progress as planned. In order to lower costs in the long term, the Belimed Group will further strengthen its production processes and structures as well as resolutely adjust them. Belimed has to focus intently on these issues in 2013 in order to fully exploit the potential that exists. Gross sales rose by 2.4% to CHF 199.6 million (2011: CHF 194.9 million). Especially the "Medical" segment achieved above-average growth. Operating income (EBIT) was disappointing, representing a loss of CHF 8.8 million.
Wire processing: North America and Japan offset weak sales in Europe
Last year, the markets in the wire processing industry witnessed differing developments. While the wire processing business unit (Schleuniger Group) in North America and Japan set new records, sales growth was considerably weaker in Europe. The strongest growth was posted with systems for processing special contacts used for high speed data transmission in the automotive industry. The Schleuniger Group achieved gross sales of CHF 103.0 million (2011: CHF 106.1 million). Operating income (EBIT) came to CHF 8.8 million (previous year: CHF 13.4 million).
Participation in Zug Estates Holding AG
In connection with the spin-off of the real estate business unit in summer 2012, the Metall Zug Group took over 60 000 registered shares of type B of Zug Estates Holding AG. As a final step toward complete separation and to focus on industrial activities, Metall Zug AG is looking into selling this participation, which has a market value of approximately CHF 75 million, to selected, long-term oriented investors. At current prices, a sale would generate financial income of around CHF 40 million and also increase net liquidity accordingly.
Special dividend to mark the double anniversary
Thanks to the solid financial base, the high level of liquidity, the good earnings outlook in the long term, and the potential income from a possible sale of Zug Estates shares, shareholders will – despite the challenging market environment – receive a special dividend of CHF 14.00 gross per registered share of type A and CHF 140.00 gross per registered share of type B. This dividend payment, which is being made to mark the double anniversary – 125 years of Metall Zug AG in 2012 and 100 years of V-ZUG AG in 2013 – is more than twice the previous year's dividend payout. If the general meeting accepts this proposal, a total of CHF 63.0 million will be paid out to shareholders.
Changes in the board of directors
After five successful years in office, Jürgen Dormann (73), chairman of the board of directors, will not be standing for re-election at the general meeting of shareholders on 3 May 2013. The board of directors of Metall Zug thanks Jürgen Dormann sincerely for his valuable contribution to the strategic realignment. Jürgen Dormann has also been an unwavering driving force behind the Metall Zug Group's internationalization and growth strategy. It is envisaged that Heinz M. Buhofer, member of the board of directors of Metall Zug AG since 1997, will take over the office of chairman. Heinz M. Buhofer (56) has a track record of entrepreneurial success serving on various governing and supervisory bodies of national and international companies.
The Metall Zug Group expects the market environment to remain challenging and filled with economic uncertainties in 2013. In particular, the pressure on prices is unlikely to ease. The Metall Zug Group will continue to implement the growth and internationalization strategy already launched. If there is no significant change in the market environment and the currency situation, operating income – adjusted for the one-time effect of the allocation from the welfare fund and for the absence of a contribution to income from the real estate business unit – should be similar to the level achieved in 2012.
The Metall Zug Group focuses on its three core businesses and is managed as an industrial group. It is headquartered in Zug and has a staff of around 3 200 employees. The household appliances business unit includes the Swiss market leader V-ZUG AG, SIBIRGroup AG and Gehrig Group AG. The infection control business unit is represented by the Belimed Group, and the Schleuniger Group makes up the wire processing business unit. The holding company Metall Zug AG is listed in the Domestic Standard of SIX Swiss Exchange, Zurich (registered shares of type B: securities number 3982108, ticker symbol METN).
Please note that any expectations expressed in this press release are based on assumptions. Actual results may vary from those anticipated. This press release is published in German and English. The German version takes precedence.
The annual report is available in electronic format at www.metallzug.ch
3 May 2013: General meeting of shareholders
26 August 2013: Half-year results