EQS-Adhoc: Bauwerk Boen Group achieves encouraging results in fiscal 2017
EQS Group-Ad-hoc: Bauwerk Parkett AG / Key word(s): Final Results
Bauwerk Boen Group achieves encouraging results in fiscal 2017
24-Apr-2018 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
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Press Release
Bauwerk Boen Group achieves encouraging results in fiscal 2017
Bauwerk Boen Group can look back on a very encouraging financial year 2017. The
main reasons for this were sustainably effective efficiency improvements at all
production stages, consistently implemented price increases to compensate for
rising material costs, further product mix improvements towards large-format and
higher-margin planks, and the elimination of unprofitable businesses and product
groups. Regarding the latter, a decline in volumes to 9.2 million square meters
of parquet sold (-3.8%) was deliberately accepted in the year under review.
Sales growth amounted to 2%, while the Group increased EBITDA and EBITA
over-proportionately by 28% and 35%, respectively. Net profit of CHF 6.1 million
was also significantly above the previous year (2016: CHF 2.7 million; +127%).
The Bauwerk Boen Group is confident that the measures now sustainably taking
effect will enable it to grow turnover to above CHF 295 million and further
increase earnings in the current financial year.
St. Margrethen, 24 April 2018 - Consolidated net turnover of the Bauwerk Boen
Group reached CHF 285.1 million during the financial year 2017, compared to CHF
279.4 million in the previous year (+2%). Adjusted for exchange rate differences
by applying the previous year's exchange rates, net turnover amounted to CHF
282.2 million. The operating result EBITDA could thereby be increased
significantly from CHF 25.5 million in the previous year to CHF 32.6 million in
2017, which corresponds to an improvement of the EBITDA margin from 9.1% to
11.4%.
Declining volumes deliberately accepted
In the year under review, the volume of floor coverings sold under the Bauwerk
Parkett and Boen brands decreased by 3.8% overall to 9.2 million square meters.
This was particularly due to the Group's strategy of foregoing unprofitable
customers and markets as well as streamlining the product range. In Europe,
sales increased by 1.5% to CHF 262.4 million in 2017. In the demanding Swiss
market, sales growth of 1.6% could be realized, while the German market saw a
slight decline. The Norwegian market developed well, while sales in Sweden
declined because unprofitable trade relationships with high volumes were
deliberately replaced by profitable ones with lower volumes. Turnover in Asia
and the USA rose by 10% to CHF 23 million compared to 2016. Thus, the export
markets outside Europe contributed around 8% to overall revenues (previous year
7%), with Asia accounting for the major proportion.
Build-up and expansion of the parquet factory in Croatia
In the year under review, the new production facility in Croatia was built up
and a first milestone was reached with the commissioning of the modernized
sawmill in early summer. In September, the manufacturing of prefabricated
products of the St. Margrethen plant was taken over and the newly built
capacities in the area of 3-layer parquet semi-finished products were ramped up
as a relief for the plant in Lithuania. In May 2018, with the completion of the
new surface and finishing line, the first 3-layer parquet finished products are
to be produced and delivered to customers. Overall, the new facility will
provide the Group with additional production capacities of 1 million square
meters or a good 10% of its current capacity. In addition, production in
Lithuania can be reduced to a more efficient 3-shift operation as planned.
Efficiency programs having a lasting impact
The efficiency measures implemented in recent years, and in particular in 2017,
are beginning to have a lasting effect at all production stages. As such,
Bauwerk Boen Group succeeded in significantly increasing the operating result
EBITDA to CHF 32.6 million in the 2017 financial year, compared to CHF 25.5
million in the previous year (+28%). The EBITDA margin increased from 9.1% in
the previous year to 11.4%. The result was, amongst other things, also
positively influenced by price increases and further product mix improvements
towards large-format and higher-margin planks. Adjusted for non-recurring
effects, mainly costs in connection with the efficiency enhancement program in
Lithuania and the build-up of the facility in Croatia as well as currency
effects, the adjusted operating result EBITDA amounted to CHF 34.6 million,
corresponding to a margin of 12.3% (9.6%). The operating result after
depreciation and before amortization EBITA amounted to CHF 22.0 million or 7.7%
of net turnover, compared to CHF 16.3 million or a 5.8% EBITA margin in the
previous year. Adjusted for the above-mentioned non-recurring and currency
effects, EBITA amounted to CHF 24.2 million or 8.6% of net turnover. Despite
higher financial and extraordinary costs and a slightly higher tax rate of 13.5%
vs. 12.6% in the previous year (as measured against earnings before taxes
adjusted for goodwill amortization), the 2017 net income of CHF 6.1 million is
significantly above the previous year (CHF 2.7 million).
Solid financing
The balance sheet and financial ratios of the Bauwerk Boen Group as at 31
December 2017 are solid. Including the subordinated shareholder loan, the equity
ratio as at the reporting date was 46.1% (43.7% as at 31 December 2016). The
increase of total assets to CHF 292.6 million (CHF 269.0 million) is due in
particular to currency effects due to a higher euro exchange rate on the balance
sheet date (CHF/EUR 1.17 vs. 1.07 in the previous year) and the build-up of the
parquet facility in Croatia with the associated insourcing of production steps
and the resulting increase in current assets.
The corporate bonds of Bauwerk Parkett AG in the amount of CHF 80 million will
mature on
22 May 2018. On 23 April 2018, Bauwerk Boen AG signed a bond purchase agreement
with the syndicate banks Neue Helvetische Bank AG, Zurich, and Raiffeisen
Schweiz Genossenschaft, St. Gallen, for the firm underwriting of a new bond
issue of Bauwerk Boen AG, which is to be used 100% to refinance the maturing
bonds of Bauwerk Parkett AG. Thus, the solid balance sheet ratios after the bond
issue remain unchanged.
Capital expenditure and cash flow
In 2017, CHF 13.3 million was spent on investments in the build-up and expansion
of the plant and infrastructure in Durdevac/Croatia. Automation solutions to
increase productivity in Kietaviskes/ Lithuania accounted for CHF 4.3 million.
Annual savings in the upper single-digit million range are expected from total
investments of CHF 21.5 million in 2017. A partial area of 21,500 square meters
of land in St. Margrethen that was no longer required after the relocation of
top-layer-lamella production to the site in Croatia was sold in 2017. Overall,
Bauwerk Boen Group generated a positive free cash flow of CHF 3.1 million in
2017, after a negative CHF 10.1 million in the previous year.
Outlook 2018
Following the consolidation of products and markets in 2017, the Bauwerk Boen
Group is confident that it will be able to return to its growth course also in
parquet flooring volumes and increase turnover to at least CHF 295 million in
2018. Thanks to the implemented efficiency improvement measures and the new
production site in Croatia, the Group has created the pre-conditions for further
improvements in earnings. The goal is to achieve an EBITDA margin of more than
11% in 2018 despite the fact that the Group continues to expect material prices
for large-size parquet planks to rise in the short to medium term.
Further, the Board of Directors of Bauwerk Boen Group has decided that the
previous accounting practice regarding the capitalization of goodwill will be
adjusted and that goodwill be offset against equity. Accordingly, an EBIT margin
of over 7% is expected for 2018.
In addition, the investment cycle in Croatia is coming to an end. The Bauwerk
Boen Group is therefore confident that investments in 2018 will not exceed CHF
20 million and that, as a consequence, a free cash flow of at least CHF 3.0
million can be achieved and that the net debt / EBITDA ratio will not exceed
3.0.
Consolidated Income Statement
in 1000 CHF 2017 2016
Change
in %
Net turnover 285'050 279'389
2.0
Material and goods -132'602
-136'549
Personnel costs -66'057 -63'039
Other operating costs -53'285 -53'640
Other revenues 1'512 580
Other expenditures (incl. restructurings) -2'007 -1'267
Operating results before depreciation and amortisation (EBITDA) 32'611 25'474
28.0
EBITDA in % of net turnover 11.4% 9.1%
Depreciation -10'583 -9'138
Operating results before amortisation (EBITA) 22'028 16'336
34.8
EBITA in % of net turnover 7.7% 5.8%
Amortisation -5'432 -5'446
Operating result (EBIT) 16'596 10'890
52.4
EBIT in % of net turnover 5.8% 3.9%
Financial results -6'226 -5'761
Extraordinary / non-recurring expenses -2'369 -1'057
Result before taxes (EBT) 8'001 4'072
96.5
EBT in % of net turnover 2.8% 1.5%
Taxes -1'892 -1'381
Net income 6'109 2'691
127.0
Net income in % of net turnover 2.1% 1.0%
Consolidated Balance Sheet 31 Dec 2017 in % 31
Dec 2016 in % Change in %
in 1000 CHF
Assets
Cash and cash equivalents 18'315
13'594
Other current assets 131'929
113'526
Current assets 150'244 51.3
127'120 47.3 23'124 18.2
Financial assets 1'518
1'969
Tangible fixed and intangible assets 140'837
139'891
Non-current assets 142'355 48.7
141'860 52.7 495 0.3
Total assets 292'599 100.0
268'980 100.0 23'619 8.8
Equity and liabilities
Financial liabilities 100'458
99'476
Other current liabilities 42'904
35'227
Other non-current liabilities 14'362
16'743
Total liabilities 157'724 53.9
151'446 56.3 6'278 4.1
Shareholder loan 37'308 12.8
37'295 13.9 13 0.0
Share capital 76'394
76'384
Capital reserves 14'813
14'813
Retained earnings (incl. currency translation differences) 6'360
-10'968
Total equity 97'567 33.3
80'239 29.8 17'328 21.6
Total equity and liabilities 292'599 100.0
268'980 100.0 23'619 8.8
Contact
Peter Schmitter, CFO Bauwerk Boen Group
Email:peter.schmitter@bauwerk-boen.com, Telefon +41 71 747 72 94
About Bauwerk Boen Group
Bauwerk Boen Group is, according to the assessment of the Bauwerk Boen
management, Europe's leading developer, manufacturer and supplier of parquet
flooring in the premium segment as well as the second-largest market participant
in wood flooring. With sold volumes of over 9.2 million square meters annually,
the Group offers a complementary portfolio of two- and three-layer parquets as
well as wooden sports flooring under the two brands Bauwerk and Boen. The key
markets Switzerland, Norway and Germany as well as Austria, the UK, France,
China and the US are being served by local subsidiaries. Administrative
headquarters of the Group are located in St. Margrethen, Switzerland. The
production locations are currently concentrated in St. Margrethen and
Kietaviškės, Lithuania and Durdevac/Croatia. During the financial year 2017, the
Bauwerk Boen Group generated a net turnover of CHF 285 million and employed
around 1'800 people.
Legal Information
The economic projections and predictions contained in this information relate to
future facts. Such projections and predictions are subject to risks,
uncertainties and changes which cannot be foreseen and which are beyond the
control of Bauwerk Boen Group. Bauwerk Boen Group is therefore not in a position
to make any representations as to the accuracy of economic projections and
predictions or their impact on the financial situation of Bauwerk Boen Group or
the market in the securities of Bauwerk Boen Group.
THIS INFORMATION DOES NOT CONSTITUTE AN ADVICE ON INVESTMENT NOR A
RECOMMENDATION OR INVITATION FOR PURCHASING, HOLDING OR SELLING ANY SECURITIES
AND IT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR OR PURCHASE
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RESULT IN AN INFRINGEMENT OF U.S. SECURITIES LAWS. SECURITIES OF BAUWERK PARKETT
AG AND OF BAUWERK BOEN AG ("COMPANIES") ARE NOT BEING PUBLICLY OFFERED OUTSIDE
OF SWITZERLAND. IN PARTICULAR, THE SECURITIES OF THE COMPANIES HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OF U.S.
PERSONS EXCEPT IN AN "OFFSHORE TRANSACTION" IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT. THIS DOCUMENT DOES NOT CONSTITUTE A PROSPECTUS
ACCORDING TO ART. 652A OR ART. 1156 OF THE SWISS CODE OF OBLIGATIONS OR ART. 27
ET SEQ. OF THE SIX SWISS EXCHANGE LISTING RULES.
This document is only directed at (i) persons who are outside the United Kingdom
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(all such persons together being referred to as "Relevant Persons"). The
securities are only available to, and any invitation, offer or agreement to
subscribe, purchase or otherwise acquire such securities will be engaged in only
with, Relevant Persons. Any person who is not a Relevant Person should not act
or rely on this information or any of its contents.
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End of ad hoc announcement------------------------------------------------------
Language: English
Company: Bauwerk Parkett AG
Neudorfstrasse 49
9430 St. Margrethen
Switzerland
Phone: +41 71 7477474
Fax: +41 71 7477423
E-mail: info@bauwerk.com
Internet: www.bauwerk.com
ISIN: CH0207961084
Listed: SIX Swiss Exchange
End of Announcement EQS Group News Service
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