The strong Swiss franc remained a challenge for the Swiss companies of the Metall Zug Group in 2016. Nevertheless, gross sales rose by 3.5% to CHF 960.6 million (previous year: CHF 927.8 million). Adjusted for the acquisition and currency effects of 0.2% and 0.4% respectively, this is equivalent to organic growth of 2.9% in local currencies. Operating income (EBIT) of the Metall Zug Group recorded a disproportionately high rise of 16.9% to CHF 94.1 million (previous year: CHF 80.5 million). The gain on disposal of Belimed's Ballwil site amounting to CHF 5.1 million is included under operating income. All of the Business Units contributed to this growth in sales and earnings. The positive performance of securities contributed to an improved financial result of CHF 10.3 million (previous year: CHF -8.2 million). Net income climbed to CHF 84.9 million (previous year: CHF 56.9 million). The investments made and the dividend distribution were financed by cash flow from operating activities of CHF 95.4 million (previous year: CHF 104.6 million). Significant investments in structures and processes, product development and quality assurance were also made in 2016. At 76.9% of total assets, the equity ratio remains solid (previous year: 76.8%). The net cash position reached CHF 543.0 million at the end of the reporting period (previous year: CHF 518.1 million). Household Appliances: Growth in the Home Market and Abroad The Household Appliances Business Unit can look back on another successful year. V-ZUG, whose production facilities are mostly based in Switzerland, was able to improve its position yet again in a slightly declining domestic market. The selective expansion of its international presence led to substantial growth abroad in the reporting period. The product range expansion proved to be a success factor. The modernized ZUGORAMA showrooms in Zurich and St. Gallen, the opening of a showroom in Hong Kong and the new campaigns in Germany helped increase the brand’s visibility. SIBIRGroup consolidated its market position thanks to the launch of new laundry room hot-air dryers at the end of 2015 and the acquisition of new customers in western Switzerland and Ticino. The Gehrig Group recorded pleasing growth in the key segments of Dishwashers, Thermal Appliances, Coffee and Service. The large order placed by Swiss Federal Railways (SBB) to equip its dining cars with dishwashing appliances reflects the confidence placed in the Gehrig Group’s solutions for the professional catering sector. Gross sales of the Household Appliances Business Unit were up 3.0% to CHF 599.2 million (previous year: CHF 581.9 million). Operating income (EBIT) recorded a disproportionately high rise of 11.0% to CHF 76.8 million (previous year: CHF 69.1 million). Infection Control: Further Progress in Restructuring The relocation of production in the Infection Control Business Unit was completed in 2016 on time and on budget. This means Belimed now has three focused production sites: one in Switzerland, one in Germany and one in Slovenia. The availability and quality of all products and services were guaranteed at all times throughout this process. Alongside these and many other restructuring measures, Belimed also stepped up the development of new products. The focus now lies on concluding the restructuring measures and strengthening the structures for Belimed’s continued long-term growth. Gross sales rose by 3.9% to CHF 206.1 million (previous year: CHF 198.3 million). At CHF -6.3 million, operating income (EBIT) improved on the previous year (CHF -12.9 million) as planned. The CHF 5.1 million gain on the sale of the property in Ballwil contributed to this improvement. High investments in R&D and in developing the US market and the duplication of positions during the relocation of production continued to have a negative impact on EBIT. Wire Processing: Investments in Cooperation and Production Capacities In the reporting period, sales of the Schleuniger Group outstripped those of the previous year. However, the subdued development of the Chinese market curbed sales growth. In the past financial year, Schleuniger entered into a strategic cooperation with Laser Wire Solutions (L W Solutions Ltd., UK) in the area of laser-based wire stripping and acquired a non-controlling interest in this partner. In addition, the previous shareholding of 35% in German cooperation partner DilT AG – a leading software solution provider of manufacturing execution systems for more than 20 years – was increased to 100% on January 1, 2017. Investments were made at the Thun site in new machine tools for the manufacture of precision components from aluminum and steel. Due to the high demand for flexible linear systems, the Solutions segment was given additional assembly space in Cham to complement the Unterägeri site. Schleuniger increased its gross sales by 5.4% to CHF 158.2 million (previous year: CHF 150.1 million) and operating income (EBIT) by 7.5% to CHF 22.8 million (previous year: CHF 21.2 million). Investments in Further Sustainable Growth V-ZUG's strategic site planning lays the foundations for the company’s long-term growth, which V-ZUG is seeking to achieve through its selective internationalization strategy. The move into the new “Mistral” production, assembly and development building marks a milestone in the transformation of V-ZUG’s main site into an urban center for technology and innovation. Further steps are set to follow shortly. Moreover, Metall Zug will continue to invest at the same level in innovation, flexibility and agility. Overall, investments in production systems and buildings in the next few years are likely to increase further. Thanks to its forward-looking action in terms of financial policy over the last few years, the Metall Zug Group has a very sound balance sheet. It thus retains full strategic flexibility with regard to the intended internal or external growth and dividend policy. Dividend: Higher Cash Distribution The Board of Directors will propose to the General Meeting of Shareholders of May 5, 2017, a dividend in the amount of CHF 7.00 gross per type A registered share and CHF 70.00 gross per type B registered share. In the previous year, the cash dividend (including the claim to a refund of withholding tax on the stock dividend) amounted to CHF 6.41 per type A registered share and CHF 64.10 per type B registered share. The additional stock dividend of the previous year involved the allocation of type B registered shares from the company’s own holdings, which equated to a value of CHF 4.66 per type A registered share or CHF 46.61 per type B registered share. Proposal for amendments to the Articles of Association At the next General Meeting of Shareholders on May 5, 2017, the Board of Directors will propose amending the Articles of Association in line with changes made to the Swiss Code of Obligations following implementation of the revised recommendations of the Financial Action Task Force (FATF). Furthermore, additional amendments and formal adjustments to the Articles of Association will be proposed, and these will be listed separately in the invitation to the General Meeting of Shareholders. Outlook The political and economic uncertainties of last year will continue to affect the Metall Zug Group in 2017 too. The world of global politics has become even more unpredictable, and its future impact is difficult to estimate. The Board of Directors and Senior Management of the Metall Zug Group therefore expect the environment to remain challenging. However, the Business Units of the Metall Zug Group are ideally equipped – thanks to further structural optimizations, their great innovative strength and proximity to the customers – both to seize the opportunities and take on the challenges that lie ahead. Assuming that the operating conditions remain unchanged, the Metall Zug Group expects 2017 operating income to be in line with that of the previous year. Financial key figures in CHF million | 2016 | 2015 | Change | Gross sales | 960.6 | 927.8 | 3.5% | Operating income (EBIT) | 94.1 | 80.5 | 16.9% | Financial result | 10.3 | -8.2 | - | Net income | 84.9 | 56.9 | 49.1% | Cash flow from operating activities | 95.4 | 104.6 | -8.8% | Total assets | 1 152.7 | 1 083.8 | 6.4% | Consolidated equity | 886.3 | 832.7 | 6.4% | Equity ratio | 76.9% | 76.8% | 0.1% | Net income per registered share of type B (EPS) in CHF | 190.8 | 129.2 | 47.7% | Headcount | 3 919 | 3 812 | 2.8% |
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