Walter Meier has announced increased net sales for the first half of 2011 against the same period in the previous year, by 3.3 per cent to CHF 317.4 million.
Although the group divisions Humidification and Tools had to accept a fall in net sales because of the strong Swiss franc, net sales in the group divisions Climate and Machining Solutions increased through retail operations that are mainly focused on Switzerland.
Machining Solutions accounted for almost 50 per cent of the growth in net sales which the company says is due to an accelerated recovery by the Swiss metalworking industry. Excluding exchange effects as well as consolidation effects from the Humidification division (withdrawal from the retail climate business in France and the United Kingdom as well as the acquisitions of JS Humidifiers and Anderberg Fugtstyring), organic growth in net sales of 11.0 per cent was achieved.
Walter Meier says that at 81.4 per cent, the increase in EBIT to CHF 26.3m in the first half of 2011 was completely disproportionate compared to organic growth. This equates to an improvement in the EBIT margin from 4.7 to 8.3 per cent.
In the same period in the previous year, earnings were depressed by restructuring expenses of CHF 4.0m incurred in the reorganisation of the climate business in France. Even allowing for this non-recurring effect, the EBIT margin still improved by 2.3 percentage points, apart from economies of scale from the growth in net sales, the main reasons for this are continuing positive transaction effects.
Cash flow from operating activities and free cash flow improved by 11.5 and 5.2 per cent, respectively, to CHF 15.5m and CHF 12.1m.
Net income amounted to CHF 19.8m compared with CHF 10.0m in the same period in 2010. This equates practically to a doubling in profit and was primarily a consequence of the increase in operating earnings.
Depending on economic developments, particularly in the key markets of Switzerland, Germany and North America, Walter Meier says it expects continued organic growth in net sales for the second half of 2011. Earnings in Swiss francs in the second half of 2011 will also depend heavily on movements in exchange rates, if these prove to be stable, Walter Meier expects the second half to be somewhat stronger than the first half because of seasonal factors. In this case, it should be possible to exceed last year's net income of CHF 41.2m in 2011.
