Results for the first half of the 2015 financial year: Slight decrease in …

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Results for the first half of fiscal year 2015: Slight decrease in order intake – increase in sales – increase in profits

November 03, 2015

Orders received by Burckhardt Compression, one of the world’s leading manufacturers of reciprocating compressors, during the first half of fiscal 2015 (April to September) did not quite match the exceptionally high order intake of the period. of the previous year. At the same time, sales increased by 24% compared to the period of the previous year. The EBIT margin amounts to 14%, the net profit margin to 10%. Burckhardt Compression continues to expect full-year order intake to be close to the level of the previous year and sales to exceed CHF 500 million. The operating margin for fiscal 2015 is expected to be in the lower end of the long-term target range of 15-20%. The target payout rate of 50-70% is reiterated.

Increase in order intake in the Components, Services & Support (CSS) activity

Orders received in the first half of 2015 amounted to CHF 254.2 million, slightly below the exceptionally high inflows recorded in the first half of 2014. Order inflows for the Compressor Systems (CS) business mainly come from the transport sector and gas storage as well as refining and petrochemical customers; Total order intake for the segment amounted to CHF 167.9 million (-12.9%). The Components, Services & Support (CSS) business increased its order intake by 11.6% to CHF 86.3 million. Most of this growth was fueled by orders for spare parts and refit and modernization projects.

Renewed increase in sales and profits

The substantial increase in consolidated sales of 23.9% year-on-year to CHF 243.0 million is mainly attributable to the Compressor Systems business area (+ 34.3%). The turnover of the CSS business area increased by 5.4%.

Gross profit amounted to CHF 73.0 million, an increase of 14.2% compared to the first half of 2014, and the resulting gross profit margin was 30.0% (32.6% for the same period of the previous year). A slight contraction of the gross profit margin of the CS business area to 21.9% (22.3% during the period of last year) can be attributed to the change in the product mix of the projects concluded during the first semester. In the CSS business area, the gross profit margin of 48.7% was slightly lower than the very high margin recorded for the period of the previous year (51.0%).

Selling, marketing and general administration expenses increased by CHF 2.5 million or 7.6% year-on-year to CHF 35.4 million in the first half of 2015, which, like the previous year, is attributable to the continued expansion of sales and logistics operations in both business areas, with an emphasis on the CSS business area.

Mainly due to the higher level of gross operating profit, mid-year operating profit increased 17.6% year-on-year to CHF 32.8 million. Measured as a percentage of sales, this resulted in an operating profit margin of 13.5% (14.2% in the prior year period). Net profit increased by 16.7% to CHF 25.1 million and corresponds to 10.3% of sales or CHF 7.40 per share (CHF 6.32 the previous year).

Solid balance sheet

The balance sheet total at the end of September 2015 was CHF 657.0 million (+ 2.8%). Equity of CHF 336.3 million corresponds to a strong equity ratio of 51.2%, slightly higher than the previous year. The net financial position decreased slightly by CHF 3.4 million compared to the closing date of the previous financial year and amounted to CHF 119.2 million.

Establishment of new assembly plants on time

Assembly of the Laby®-GI compressors at the new plant in Busan, South Korea, began at the end of August. The official inauguration of this new factory will take place in November. Already in September this year, the expansion of the Winterthur plant was successfully completed. In June 2015, the foundation stone for a new process gas compressor assembly plant was laid in Houston, Texas. The first compressors intended for the American market will be assembled there provisionally in early January 2016.

Outlook

The different markets addressed by Burckhardt Compression show quite divergent trends. There are many projects, but the extremely competitive environment puts pressure on margins. To date, the company continues to expect order intake for the 2015 financial year (closing March 31, 2016) around the level reached the previous year and turnover is expected to exceed CHF 500 million. The operating result and the net result for the full year are expected to be around the level reached the previous year. The operating margin for fiscal 2015 is expected to be in the lower end of the long-term target range of 15-20%. The target payout ratio of 50 to 70% is reiterated.

Key figures for the first half of fiscal year 2015 (April – September 2015)

CHF million

april-sept. 2015

april-sept. 2014

Change 2015/2014

2014 financial year

Order intake

254.2

270.0

-5.8%

514.1

Sales

243.0

196.1

+ 23.9%

473.6

Gross profit

73.0

63.9

+ 14.2%

152.8

Operating profit (EBIT)
in% of sales

32.8
13.5%

27.9
14.2%

+ 17.6%

74.6
15.7%

Net revenue
in% of sales

25.1
10.3%

21.5
11.0%

+ 16.7%

57.6
12.2%

Total assets

657.0

639.3

+ 2.8%

681.4

Equity
as a% of total assets

336.3
51.2%

325.2
50.9%

+ 3.4%

338.6
49.7%

Earnings per share (in CHF)

7.40

6.32

+ 17.1%

16.93

Workforce Sept. 30 / March 31

1’438

1’308

+ 9.9%

1’385

Disclaimer

This document may contain forward-looking statements, including, but not limited to projections of financial results, market activity and future product developments. These forward-looking statements are subject to change based on known or unknown risks and various other factors that could cause actual results or performance to differ materially from statements made here.


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