News Archive

Sant'Antonino, 11th August 2010. The InterrollGroup, a global leader within the field of materials handling,logistics and automation, looks back on a promising first semester2010. Sales and profitability considerably increased compared with thefirst half of 2009. Based on its solid financial foundation, Interrollcontinued the implementation of strategic projects according toschedule. Despite encouraging indications from the markets in thereporting period, Interroll expects a challenging economic environmentin the second half of 2010.

In the first half of 2010,Interroll was quick to turn positive indicators emerging from themarkets to the company's advantage. However, there was still a generalreluctance to invest in materials-handling projects. Revenue, incomparison with the first half of 2009, increased encouragingly, risingby 20.3 % in local currency and by 17.4 % in terms of Group currencyfrom CHF 116.5 million to CHF 136.8 million. Order intake in Groupcurrency was up 18.9 % on the same period last year; costs and marginsdeveloped slightly better than expected. Although prices of rawmaterials such as steel and plastics continued to climb sharply duringthe reporting period, Interroll was generally able to neutralise theeffects of these increases thanks to productivity gains and a globallyestablished purchasing pool. Earnings before interest, taxes,depreciation and amortisation (EBITDA) were 78.9 % above the figure forthe first half of 2009, reaching CHF 15.2 million by the end of June2010. Earnings before interest and taxes (EBIT) rose by a considerableCHF 6.7 million to CHF 7.5 million. Net profit for the period alsoimproved significantly, from CHF 0.1 million in the comparable periodof last year to CHF 5.3 million.

Thanks to sound financing andin line with its strategy of long-term growth, Interroll continues topress ahead on schedule with strategically important projects, such asthe introduction of SAP and the construction and expansion of Centresof Excellence, despite the tough economic climate. The company has alsorefrained from scaling back expenditure on the development of newproducts aimed at generating future growth.

Business activity inNorth America picked up considerably in the first six months of 2010, atrend largely driven by Subsystems. Progress was also reported in Asiain the second quarter, while Europe stabilised at a very low levelbefore signs of a slight recovery became apparent; the situation herecontinues to be overshadowed by an unwillingness to commit to majorinvestments on account of the economic prospects and levels of nationaldebt. Within the highly promising growth markets of Brazil, India andChina, Interroll has succeeded in establishing stronger links withmajor clients and putting even more ground between itself and itscompetitors.

During the reporting period, the company addressedthe realignment of its worldwide sales organisation. It aims atincreasing the market penetration of products, raising customer valuethrough the overall availability of Interroll solutions and enhancingdistribution productivity. Sales and distribution will be reorganisedin stages by the end of 2011.

Financial position
Totalassets stood at CHF 218.4 million at the end of June 2010 (compared toCHF 215.7 million at the end of 2009) and the equity ratio stood at58.9 %. Investment (in the modernisation of production and the SAPsystem, amongst other things) amounted to CHF 12.9 million in theperiod under review. The rise in current assets linked to the growth insales, together with current investment projects, pushed up net debtfrom 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 aresult of higher net working capital arising from the substantialincrease in sales.

The Components segment
After a slowstart to the first quarter of 2010, Interroll reported higher levels ofnew orders in all of its regional markets towards the middle of theyear. Order intake for the Components segment rose by 16.3 % comparedto the same period of 2009. Revenue increased by 10.9 % to CHF 90.4million in local currency, and in Group currency by CHF 6.4 million tostand at CHF 88.0 million. All product categories delivered acontribution to sales growth. Thanks to strict cost controls, furtherimprovements 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 rosesharply to CHF 7.0 million compared to CHF 4.4 million in the first sixmonths of 2009.

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

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

The Subsystems segment
Althoughbusiness activity for the Subsystems segment was static as the yearbegan, the second quarter brought a significant recovery as investmentfunds were released for small-scale projects in particular; thereremained a reluctance to commit to investment in larger projects. Thistrend is likely to continue throughout the second half of the year. Incomparison with the same period of 2009, revenue generated within theSubsystems segment expanded by approx. 40 %, from CHF 35.0 million toCHF 48.8 million. Earnings before interest, taxes, depreciation andamortisation (EBITDA) improved substantially, from CHF -1.9 million inthe first six months of last year to CHF 2.3 million at the end of June2010. 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 theend of June 2010 increased by 24.0 %, from CHF 41.6 million in thefirst half of 2009 to CHF 51.6 million.

In terms of sales,Europe, America and Asia reported double-digit increases for the firsthalf of 2010, with the strongest growth coming in the US. Interrollreceived its biggest sorter contract so far in the region from aleading North American postal service. This year, Interroll plans toconsolidate its manufacturing facilities in Thailand and China at a newChinese site spanning over 10,000 square metres, the aim being tooptimise production activity in Asia. Thereafter, Thailand will focusexclusively on the southeast Asia region as a sales hub providing localassembly for quick customer service.

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

Inthe first half of 2010, Interroll received two major orders in the areaof Dynamic Storage. A wholesale distributor in South Africa placed afollow-up order linked to the expansion of a distribution centre;Interroll was able to win this contract on the basis of outstandingquality, a comprehensive product range and quick local service. Thesecond dynamic storage project was concluded in May for a client inSouth America; in this case, Interroll's global network and referenceswere the decisive factors, aside from the product itself.

Outlook
Althoughindications from the markets were encouraging in the first half of2010, they do not point to a widespread turnaround in the economy;visibility may have improved since last year, but remains limited onthe whole. The economic environment continues to be challenging as weapproach the second half of 2010. We are, however, very well placed aswe look to the future thanks to our sound financial base, the excellentbrand reputation of our market-leading products and solutions and ourlong-established partnerships with customers. Our strategy of long-termexpansion is based on sophisticated, energy-efficient,resource-friendly key products to support internal logistics. In thisway, Interroll will continue to support customers around the world,including those involved in the increasingly important and eco-friendlyfield of "green logistics".

Profile of the Interroll Group
Interrollis one of the world's leading suppliers of space and energy saving keyproducts with a short ROI for unit load handling, logistics andautomation. These include: easy-to-install drive solutions like DrumMotors for belt conveyors, driven and non-driven rollers for rollerconveyors; gravity-driven flow storage modules for pallets, cartons andtotes used in distribution centres; Crossbelt Sorters, Belt Curves andother easy-to-operate conveyor modules for economical material handlingsolutions. Interroll's product and service offering is targetedprincipally at regional system engineering companies and originalequipment manufacturers, system integrators, multinational companiesand end-users. Interroll serves more than 23,000 customers across allcontinents. The Interroll Group employs 1,200 people in 28 companiesworldwide and is listed on the SIX Swiss Exchange. Under the umbrellaof its strategic holding company located in Sant'Antonino, Switzerland,the sales and manufacturing units are responsible for all globaloperations 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