News Archive

Sant'Antonino, 11th August 2010. The Interroll Group, a global leader within the field of materials handling, logistics and automation, looks back on a promising first semester 2010. Sales and profitability considerably increased compared with the first half of 2009. Based on its solid financial foundation, Interroll continued the implementation of strategic projects according to schedule. Despite encouraging indications from the markets in the reporting period, Interroll expects a challenging economic environment in the second half of 2010.

In the first half of 2010, Interroll was quick to turn positive indicators emerging from the markets to the company's advantage. However, there was still a general reluctance to invest in materials-handling projects. Revenue, in comparison with the first half of 2009, increased encouragingly, rising by 20.3 % in local currency and by 17.4 % in terms of Group currency from CHF 116.5 million to CHF 136.8 million. Order intake in Group currency was up 18.9 % on the same period last year; costs and margins developed slightly better than expected. Although prices of raw materials such as steel and plastics continued to climb sharply during the reporting period, Interroll was generally able to neutralise the effects of these increases thanks to productivity gains and a globally established purchasing pool. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were 78.9 % above the figure for the first half of 2009, reaching CHF 15.2 million by the end of June 2010. Earnings before interest and taxes (EBIT) rose by a considerable CHF 6.7 million to CHF 7.5 million. Net profit for the period also improved significantly, from CHF 0.1 million in the comparable period of last year to CHF 5.3 million.

Thanks to sound financing and in line with its strategy of long-term growth, Interroll continues to press ahead on schedule with strategically important projects, such as the introduction of SAP and the construction and expansion of Centres of Excellence, despite the tough economic climate. The company has also refrained from scaling back expenditure on the development of new products aimed at generating future growth.

Business activity in North America picked up considerably in the first six months of 2010, a trend largely driven by Subsystems. Progress was also reported in Asia in the second quarter, while Europe stabilised at a very low level before signs of a slight recovery became apparent; the situation here continues to be overshadowed by an unwillingness to commit to major investments on account of the economic prospects and levels of national debt. Within the highly promising growth markets of Brazil, India and China, Interroll has succeeded in establishing stronger links with major clients and putting even more ground between itself and its competitors.

During the reporting period, the company addressed the realignment of its worldwide sales organisation. It aims at increasing the market penetration of products, raising customer value through the overall availability of Interroll solutions and enhancing distribution productivity. Sales and distribution will be reorganised in stages by the end of 2011.

Financial position
Total assets stood at CHF 218.4 million at the end of June 2010 (compared to CHF 215.7 million at the end of 2009) and the equity ratio stood at 58.9 %. Investment (in the modernisation of production and the SAP system, amongst other things) amounted to CHF 12.9 million in the period under review. The rise in current assets linked to the growth in sales, together with current investment projects, pushed up net debt from CHF 4.2 million to CHF 10.4 million. In half-yearly comparison, cash flow declined from CHF 7.2 million to CHF 4.4 million, mainly as a result of higher net working capital arising from the substantial increase in sales.

The Components segment
After a slow start to the first quarter of 2010, Interroll reported higher levels of new orders in all of its regional markets towards the middle of the year. Order intake for the Components segment rose by 16.3 % compared to the same period of 2009. Revenue increased by 10.9 % to CHF 90.4 million in local currency, and in Group currency by CHF 6.4 million to stand at CHF 88.0 million. All product categories delivered a contribution to sales growth. Thanks to strict cost controls, further improvements in productivity and rising volumes, operating profit (EBITDA) expanded by 24.5 %, from CHF 10.4 million to CHF 12.9 million (EBITDA margin 14.6%). At the level of EBIT, operating profit rose sharply to CHF 7.0 million compared to CHF 4.4 million in the first six months of 2009.

There was a clear upturn in business activity in Europe against the same period last year, with upward trends also reported in North America and Asia over the same timeframe.

The new Synchronous Drum Motor and RollerDrives are expected to make considerable gains in market share. In the first half of 2010, Interroll put the finishing touches to a new RollerDrive generation that will be launched this autumn. With its new control system, the product line will open up access to smaller plant constructors who will benefit from its advanced user friendliness. The new solution promises to consolidate the technological supremacy of Interroll.

The Subsystems segment
Although business activity for the Subsystems segment was static as the year began, the second quarter brought a significant recovery as investment funds were released for small-scale projects in particular; there remained a reluctance to commit to investment in larger projects. This trend is likely to continue throughout the second half of the year. In comparison with the same period of 2009, revenue generated within the Subsystems segment expanded by approx. 40 %, from CHF 35.0 million to CHF 48.8 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) improved substantially, from CHF -1.9 million in the first six months of last year to CHF 2.3 million at the end of June 2010. EBIT also moved back into positive territory at CHF 0.5 million (compared to CHF -3.6 million for the 2009 period). Order intake at the end of June 2010 increased by 24.0 %, from CHF 41.6 million in the first half of 2009 to CHF 51.6 million.

In terms of sales, Europe, America and Asia reported double-digit increases for the first half of 2010, with the strongest growth coming in the US. Interroll received its biggest sorter contract so far in the region from a leading North American postal service. This year, Interroll plans to consolidate its manufacturing facilities in Thailand and China at a new Chinese site spanning over 10,000 square metres, the aim being to optimise production activity in Asia. Thereafter, Thailand will focus exclusively on the southeast Asia region as a sales hub providing local assembly for quick customer service.

During the reporting period, the new belt curve received a positive reception from the market. The British Airport Authority (BAA), agreed to use the device in its baggage handling systems at British airports. In China, Interroll secured its first large-scale orders for the new belt curve in connection with a series of airport projects; the company hopes, this will herald more projects of a similar nature in the future.

In the first half of 2010, Interroll received two major orders in the area of Dynamic Storage. A wholesale distributor in South Africa placed a follow-up order linked to the expansion of a distribution centre; Interroll was able to win this contract on the basis of outstanding quality, a comprehensive product range and quick local service. The second dynamic storage project was concluded in May for a client in South America; in this case, Interroll's global network and references were the decisive factors, aside from the product itself.

Outlook
Although indications from the markets were encouraging in the first half of 2010, they do not point to a widespread turnaround in the economy; visibility may have improved since last year, but remains limited on the whole. The economic environment continues to be challenging as we approach the second half of 2010. We are, however, very well placed as we look to the future thanks to our sound financial base, the excellent brand reputation of our market-leading products and solutions and our long-established partnerships with customers. Our strategy of long-term expansion is based on sophisticated, energy-efficient, resource-friendly key products to support internal logistics. In this way, Interroll will continue to support customers around the world, including those involved in the increasingly important and eco-friendly field of "green logistics".

Profile of the Interroll Group
Interroll is one of the world's leading suppliers of space and energy saving key products with a short ROI for unit load handling, logistics and automation. These include: easy-to-install drive solutions like Drum Motors for belt conveyors, driven and non-driven rollers for roller conveyors; gravity-driven flow storage modules for pallets, cartons and totes used in distribution centres; Crossbelt Sorters, Belt Curves and other easy-to-operate conveyor modules for economical material handling solutions. Interroll's product and service offering is targeted principally at regional system engineering companies and original equipment manufacturers, system integrators, multinational companies and end-users. Interroll serves more than 23,000 customers across all continents. The Interroll Group employs 1,200 people in 28 companies worldwide and is listed on the SIX Swiss Exchange. Under the umbrella of its strategic holding company located in Sant'Antonino, Switzerland, the sales and manufacturing units are responsible for all global operations ranging from consultancy to product management, R&D, production, distribution and service.
 
 
For any questions, please feel free to contact Interroll on 11th August, 2010 between 8:30 a.m. and 10:30 a.m.:

Paul Zumbühl, CEO
Tel. +41 91 850 25 24

Lorenz Koehler, Investor Relations
Tel. +41 91 850 25 21

www.interroll.com/ir (Investor Relations)
investor.relations@interroll.com