Cham Paper Group Holding AG

DGAP-Adhoc: Cham Paper Group Schweiz AG: FY 2013: Cham Paper Group achieves continued success

Cham Paper Group Schweiz AG  / Key word(s): Final Results

20.03.2014 07:00

Release of an ad hoc announcement pursuant to Art. 53 KR

- Further momentous milestones in the transformation programme reached
- Strong demand for all strategically-important product groups
- Italian mills on the rise, Carmignano benefits from adaption of the
product range
- Balance sheet bolstered, Group free of net debt; dividend of CHF 3.00
- Papieri project progressing on schedule

The 2013 business year has seen the Cham Paper Group reach further
momentous milestones that form part of the company's comprehensive
transformation programme, which began in 2011. The transfer of the
company's key product groups from Cham to Italy has been successful, and
the relevant processes have now been embedded. Both Italian sites have made
substantial progress in terms of their profitability and competitiveness,
and have come to form a stable industrial backbone for the Group. In Cham,
CPG has been focussing on the development and manufacture of refined niche
applications since Q2 of the year under review. Also, planning is on
schedule for the widely-supported conversion of the industrial site at Cham
into a new neighbourhood, and the project is now taking shape.

As a result of the paper machines in Cham being taken out of service at the
end of June 2012 and March 2013, net turnover fell as expected by 17.3% to
CHF 231.3m (CHF 279.7m). Sales volumes were down by 19%, with 151,000
tonnes (187,000 tonnes) of speciality paper sold. In the
strategically-important product groups, however, sales continued to rise.
Despite the challenging transfer and associated costs and outlays,
operating profits in Italy proved rather promising. The sale of the Italian
sites that was announced in the summer and cancelled in November had a
one-off negative effect, resulting in associated costs of approximately CHF
1.5m. EBIT for the 2013 business year amounted to CHF 3.2m (the same as the
previous year) and net profit totalled CHF 0.4m (up from -1.2m in the
preceding year). Free cash flow in the year under review achieved CHF 16.7m
(CHF 8.1m in the previous year). The Group reduced net debt by a further
CHF 21.6m, meaning that the Group is now free of net debt and has cash
reserves of CHF 53.4m.

Carmignano benefits from adaptation of the product range, Condino continues
to grow
The two production sites, in Carmignano and Condino, developed in 2013 as
anticipated. Recorded sales were over 11.3% higher than in the previous
year, despite the extensive tests with Innerliner papers in Carmignano that
initially tied up considerable resources and capacities. Following the
successful relocation, the site was able to sustainably optimise its
product mix during the subsequent months. In Condino, demand for our chief
product, Glassine, increased again to reach a good level.

Strong demand for strategically-important product groups and a full
development pipeline
Consumer Goods: Following the successful transfer of Tobacco Papers to
Carmignano, we have been working on a range of innovative Innerliners for
this segment. The "Innerliner Leaf" can be composted and at the same time
is extremely suitable for the new drying systems on our coating machines.
What is more, the Labelcar product series, used to produce beer labels for
example, received certification for metallisation during the year under
review. It is increasingly common for wet-strengthened labels to be
metallised, generating strong market growth in this segment. Our
Development division is also working flat out to convert a proportion of
the papers for the Flexible Packaging segment to lower grammage.

Industrial Release: Sales in the Glassine product group increased
dramatically once again. The strongest growth was in Glassine tape.
Manufactured in Condino, this product takes the form of high-quality papers
used to produce adhesive tapes. Condino is well placed to build further on
our success in this segment. The focus of our market strategy will also
increasingly lie upon specialities in the field of Process Liners. The Cham
Paper Group not only manufactures Silicone Base Papers, but also
siliconises it itself. Applications range from packaging for adhesive
products to process liners used in the manufacture of a variety of plastic
materials. A full development pipeline has been put in place for this
segment. In addition to sophisticated base papers for the coating plant in
Cham, papers coated on a single side for reflective signs and labels, in
particular for car registration plates, are developed here.

Digital Imaging: We successfully continued our growth trajectory in Digital
Imaging. Transjet Sportsline - used for digital sublimation printing on
sports textiles - experienced a particularly strong increase in sales. The
development of two new products has been completed, expanding the product
range in Transfer Printing: Transjet Boost for the new high-speed inkjet
printers and Transjet ECO for the new markets in Asia and South America.
The next stage of development, achieving lower grammage for the fashion
industry, is already underway. The Graphics sector has also welcomed a new
product to market: Promoprint is the first matt inkjet paper of a new
product family, developed especially for high-speed inkjet printers.
Further products with a glossy finish are under development.

Barnamic: The market launch of Barnamic continued to be a high priority for
the Group. Used as a stand-alone packaging solution or as a part of
composite material, these barrier papers are suitable for a variety of food
and non-food applications. Projects with selected key clients were pursued
further, enabling considerable quantities to be sold for the first time in
Q4. Now it is a case of bringing the scale-up phase to a successful
conclusion and clearing the way for the roll-out of Barnamic in serial
production. In the meantime, the development team is working relentlessly
to develop the Barnamic product portfolio. The focus, in addition to
introducing new products, is to use 100% natural, sustainable raw

Restructuring frees up more resources and bolsters the balance sheet
The restructuring of the Cham Paper Group also freed up some financial
resources in the 2013 business year. Thanks to the further reduction of net
working capital by 26.2% and stringent cost controls, we were able to
achieve a free cash flow of CHF 16.7m. Furthermore, 35,000 shares from the
Group's own stock were placed with investors at market prices by year-end,
meaning that the company accrued an additional CHF 7.7m. Despite paying out
dividends worth CHF 2.1m in May 2013, the Group was able to reduce its net
debt by a further CHF 21.6m. The Group is now free of net debt and has cash
reserves of CHF 53.4m. Our equity ratio rose from 40.7% in 2012 to 46.3% by
the end of 2013.

Strengthening the social partnership in Italy
The sale of the Italian paper mills in Carmignano and Condino to the
Delfort Group, announced on 15 July 2013, collapsed after talks concerning
future contractual conditions between the buyer and the Italian employees'
representation in Carmignano proved unsuccessful. At the end of November,
the local factory management came to an economically viable and progressive
consensus with the employees. The new agreement, which was approved by the
General Assembly of Employees, enables a significant expansion of the
flexibility of the site in terms of its operating hours, especially on
weekends, while retaining the current remuneration models. The agreement
was reached as a result of the strong desire of all parties to see the
successful restructuring of the Cham Paper Group secure a significantly
improved market position of the plant in Carmignano in the long term.
Consequently, both sites in Italy remain under the ownership of the Cham
Paper Group. Thanks to the comprehensive restructuring of the Cham Paper
Group in the last two years, they are well positioned.

Continued streamlining of management
In the wake of the completion of the Group's comprehensive transformation,
it was found that the management structure could be further streamlined,
and the Executive Committee was disbanded at the end of November 2013. The
three site managers at Carmignano, Condino and Cham now report directly to
the delegate of the Board of Directors, Urs Ziegler. At a Group level, Urs
Ziegler will continue to be assisted by Luis Mata, Head of Finance &
Controlling, and Franziska Stöckli, Head of Corporate Services.

Papieri site: vision set out and urban development study commissioned
The Cham Paper Group and the Commune of Cham are currently working together
on the conversion of the factory site once it is vacated. The most
important Cham stakeholder groups and local communities have been involved
in the collaborative planning process. In the first half of the year, the
vision and the guidelines derived for the new district were set out, which
were fully approved with public involvement. Since October 2013, four
qualified architectural firms have been carrying out an urban development
study, and the initial results look promising. The final outcome will be
presented in Q2 2014, forming the basis for the subsequent production of
the plans. Voters in Cham are then expected to decide in the first half of
2015 on the rezoning necessary to carry out the project.

The costs of the development and planning process of the Papieri site will
largely be covered until 2015 by income from temporary leasing and the
operations of Cham Paper Solutions. A number of new tenants have moved onto
the Cham site in the last 18 months, in view of the high demand for
offices, storage space and parking.

Proposals to the General Assembly
By concentrating base paper production in Italy, we have freed up financial
resources, which the Board of Directors has utilised to reduce liabilities
to banks and wants to return to shareholders. The Board therefore
recommends a dividend of CHF 3.00 per share in the form of a tax-friendly
return of capital.

The Board of Directors is confident about the continued profitable growth
at the sites in Italy. The small, but highly innovative, unit in Cham still
has to prove its worth in the market. Sales must increase substantially if
we are to become sustainably profitable by 2015. Until then, we will
continue production on the existing site, and subsequently the equipment
must be moved to a new location.

We want to thank our employees for their considerable efforts, which have
been and continue to be indispensable in successfully completing the
transformation of the Cham Paper Group. Our thanks go to our clients,
partners and suppliers too for their close collaboration. As for our
esteemed shareholders, we would like to thank you for the confidence you
have placed in us.


Information and Explaination of the Issuer to this News:

A media and analyst conference will take place in the SIX Convention Point
in Zurich today, 20 March 2014, at 9:00.

The complete annual report (in German) is available on our website in the
Investor Relations section (see 'Financial Reports') or directly under the
following link:

For information, please contact
Media and IR Office of Cham Paper Group Holding AG
c/o Dynamics Group, Edwin van der Geest / Philippe Blangey
E-mail: /
Phone: +41 43 268 32 32
Securities no. / ISIN / ticker symbol: registered shares of Cham Paper
Group Holding AG 193 185 / CH0001931853 / CPGN

Cham Paper Group
The Cham Paper Group is a leading manufacturer of coated specialty papers.
It generates added value for its customers by providing finishing-based
functional capabilities. Founded in 1657, the company develops and
manufactures specialty papers at its three locations in Switzerland and
Italy for use in Consumer Goods, Industrial Release and Digital Imaging
applications. Consumer Goods encompasses papers for flexible packaging and
base papers for label printing in the food, non-food, tobacco, beverage and
pharmaceutical industries. In the Industrial Release segment, the Cham
Paper Group supplies silicone-base papers for release liners used in
graphical applications and for adhesive tapes and labels. The company also
supplies base papers for process liners used in industrial casting and
laminating process applications. Facestock papers for the self-adhesive
industry round off the range. Apart from large-format inkjet papers for
indoor and outdoor applications, the Digital Imaging segment also includes
sublimation papers for digital textile printing. The Cham Paper Group has
benefited from the trend for sustainable products and is well established
in the market thanks to its technological innovative prowess. It is listed
as an independent company on the SIX Swiss Exchange (ticker symbol: CPGN).

Additional features:
Document title: FY 2013: Cham Paper Group achieves continued success

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Language:               English
Company:                Cham Paper Group Schweiz AG
                        6330 Cham
Phone:                  +41 41 785 33 33
Fax:                    +41 41 785 31 50
ISIN:                   CH0001931853
Valor:                  -
Listed:                 SIX

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