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Interroll results show solid growth

21 March 2014

The Interroll Group managed to strengthen its market position even further in financial year 2013. The company increased its sales by 3.1% in local currency and by 3.0% in consolidated currency to CHF 316.3 million (2012: CHF 307.2 million).

The Portec Group, which the company acquired in the United States in July 2013, is also included in these figures. Adjusted for small divestments in Europe, it contributed 1.8% to the total growth in sales and 2.2% to the higher order intake of the Interroll Group in the reporting year. Incoming orders increased by 5.6% in local currency and by 5.4% in consolidated currency to CHF 318.8 million (2012: CHF 302.6 million) compared to the previous year. 

Product groups develop differently

The "Drives” product group (motors and drives for conveyor systems) maintained its forward momentum by recording sales of CHF 109.4 million (+10.2%). Key factors that contributed to this positive development included the further technological development of our Synchronous Drum Motor and higher demand for Interroll’s 24 volt roller conveyor technology.

The product group "Rollers” (conveyor rollers) on the other hand declined by 6.2% to CHF 75.4 million. This group did not have as many large projects in 2013, which had resulted in higher volume the previous year. Nevertheless, Interroll managed to increase its market share in several countries with respect to pallet rollers and increased its sales by more than 12% in Eastern Europe by signing new customers.

The 2.6% increase in sales to CHF 71.2 million in the product group "Conveyors & Sorters” can be attributed to the trend toward automation that is being driven for the most part by e-commerce and ergonomics in working environments. Interroll received lucrative orders for sorters from Europe and the USA, but also from Japan, Russia, Brazil, Korea, and China in 2013.

The product group "Pallet & Carton Flow” also achieved growth in sales of 3.8% to CHF 60.3 million. Interroll realised its largest order ever for flow storage systems that was worth approx. CHF 6.5 million from Red Bull in Thailand in 2013. Red Bull placed three orders with the company in 2013 and Interroll has successfully filled six orders for this customer since 2009. The company also achieved strong growth of nearly 50% in this product segment in the USA.


Disproportionate growth in the Americas and Asia-Pacific region, slight decline in Europe

The three regions EMEA (Europe, Middle East, Africa), the Americas and Asia-Pacific developed differently during financial year 2013.


Whereas the company continued to experience growth in the regions Americas and Asia, sales declined by 5.7% in Europe as a result of the effects of the euro crisis on the economy, the temporary dip in demand in the area of logistics, mainly in Central Europe, but also project postponements.


The Americas region developed positively in financial year 2013. Organic growth and the acquisition of Portec Inc. in particular contributed to the significant growth in sales by 20.4% to CHF 68.1 million. Repeat sorter orders from leading companies like Amazon and Walmart and the extremely positive development with respect to the RollerDrives that were launched in North America also contributed to this positive performance.   


The Asian region too recorded a disproportionate rise in sales of 27.8% to CHF 45.2 million. With Dr. Ben Xia as the new Head of the operations in Asia and having expanded the sales structures in China, Interroll will now be able to continue to take full advantage of the growth opportunities.

Key Points

·         Incoming orders rise by a solid 5.4% to CHF 318.8 million.

·         3.0% increase in sales to CHF 316.3 million.

·         Disproportionately strong growth in the Americas (+ 20.4%) and Asia-Pacific (+27.8%).

·         EBITDA improves by 10.4% to CHF 45.4 million.

·         EBITDA margin increases to 14.3%.

·         Net profit 6.0% higher at CHF 20.5 million.

·         Operating cash flow increases by 16.5% to CHF 44.5 million.

·         Distribution out of reserves from capital contributions of CHF 8.80 (+10.0 %) proposed.

Ongoing "Cost Fitness” programme continues to bear fruits

The Interroll "Cost Fitness” programme continues to produce positive results. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 10.4% to CHF 45.4 million compared to last year. The EBITDA margin increased from 13.4% to a pleasant 14.3%. SAP-related amortisations of CHF 3.8 million (2012: CHF 2.9 million) are taken into account in the year under review. Earnings before interest and taxes (EBIT) increased by 9.6% to CHF 27.2 million. The EBIT margin improved from 8.1% the previous year to 8.6%.  Net profit increased by 6.0% to CHF 20.5 million by annual comparison.


Keeping an eye on future growth

Interroll invested nearly CHF 40 million in future growth in 2013. Investments in tangible assets in the amount of CHF 16.2 million went mainly towards construction of the new Regional Center of Excellence in Atlanta (USA), the planned further development of the SAP project, and the continuous renewal of Interroll’s global infrastructure and machinery. The net amount of CHF 23.6 million was invested in new companies. Portec, which was acquired in mid-2013, is already well-integrated into Interroll and contributing to the profitable growth of the Group.


Strong cash flow and a solid balance sheet

Interroll generated strong operational cash flow. Compared to last year, it rose by 16.5% to CHF 44.5 million or 14.1% of sales. Free cash flow remained positive at CHF 5.0 million, although CHF 39.8 million were invested. As a result, net financial assets increased from CHF 8.7 million the previous year to CHF 20.2 million.


The balance sheet figures document the sustained financial stability of the Interroll Group. Equity increased by 18.8% to CHF 187.2 million as of 31 December 2013 (2012: CHF 157.6 million) and the balance sheet total reached CHF 258.2 million (2012: CHF 227.6 million). The equity ratio continued to rise to 72.5% at the end of 2013 (2012: 69.3%).


Higher proposed distribution out of reserves from capital contributions

Due to the company’s consistently high financial stability and the gratifying results of the previous financial year, the Board of Directors will propose a 10% higher (2013: CHF 8.00) distribution out of reserves from capital contributions of CHF 8.80 per registered Interroll share to the Annual General Meeting on 9 May 2014. The distribution out of reserves from capital (instead of a dividend) is usually tax-free for holders of such shares.


Differentiated outlook for 2014

From today’s perspective, Interroll expects the economic environment to remain uncertain in 2014. The company assumes the environment to remain volatile, particularly in European countries, and different developments in the various markets. Growth impulses are expected mainly from the BRIC countries and the USA. Furthermore, Interroll sees excellent development opportunities in dynamic markets such as food processing, airport logistics, courier/express/post companies, distribution and industry, whose internal logistics hold significant optimisation potential. The consistent focus on innovation, growth, and productivity define Interroll’s strategy. The launch of new products and the strengthening of sales in China and the USA represent important measures in executing this strategy effectively and offering customers all over the world disproportionate added value.