Fiscal year 2012: Higher order intake – sales growth – profitability stable – dividend raised again
June 04, 2013
Burckhardt Compression, one of the world’s leading manufacturers of reciprocating compressors, increased its order intake during the fiscal year 2012 (closing March 31, 2013) by 6% to a new record high amid a persistently challenging business environment. Sales rose by 12%. Operating profit and net income also showed strong growth. A CHF 2.00 increase in the dividend to CHF 9.00 per share will be proposed to shareholders at the upcoming annual general meeting, which corresponds to a payout ratio of 54%. The Board of Directors has increased the targeted payout range from 40%–60% to 50%–70%. For the current fiscal year Burckhardt Compression expects a renewed increase in orders received, significantly higher sales and an operating profit margin near the middle of the long-term target range of 15% to 20%.
Order intake back at the level from 2007
New orders amounted to CHF 427.8 mn, an increase of 5.7% (5.0% at constant exchange rates) over the previous year and a new record high for the company. Both business areas contributed to this achievement. In the Compressor Systems business (CS), incoming orders rose by 5.2% to CHF 272.7 mn, primarily thanks to orders from customers in the petrochemicals and gas transport and storage markets. The Components, Services & Support (CSS) business area increased its order intake by 6.5% to CHF 155.1 mn. Sales amounted to CHF 366.7 mn (plus 11.5%, at constant exchange rates plus 10.9%). As in the previous year, sales were higher in the second half than in the first half due to the compressor systems delivery schedules set by our customers. Compressor systems accounted for CHF 215.7 mn (plus 4.7%) of total sales and the service and components business area accounted for CHF 151.0 mn (plus 22.9%).
Stable earnings power
Gross profit grew 11.2% to CHF 136.0 mn during the year under review. The resulting gross profit margin was at the same level as in the prior year and reached 37.1%. Operating profit increased 14.5% to CHF 74.2 mn and the corresponding operating profit margin was virtually unchanged at 20.2% (19.7% in the previous year). Net income rose by 9.9% to CHF 55.5 mn (previous year CHF 50.5 mn) and reached an impressive 15.1% of sales. Net income per share amounted to CHF 16.62 (previous year CHF 15.22).
Currency situation still tense
The minimum exchange rate to the euro set by the Swiss National Bank has reduced exchangerate volatility and increased the accuracy of our planning and forecasting. Due to persisting margin pressure, especially in the compressor systems business, the measures initiated in prior years will be steadfastly maintained. They are focused on further increasing procurement and value creation activities in foreign countries, raising efficiency, developing new products and addressing new application areas.
Breakthrough in maritime dual-fuel engine systems
Burckhardt Compression scored a major success in dual-fuel technology with the receipt of an order for a Laby®-GI fuel gas compressor system for two LNG tankers. This marks a major milestone in the company’s efforts to position its compressors as a viable solution for an energy-efficient and environmentally friendly ship propulsion system with gas-driven diesel engines. This order can be viewed as a breakthrough in a market where significant investments will be made in order to comply with more stringent environmental standards.
Further strengthening of balance sheet
The equity ratio rose to 56.8% (previous year 53.3%). The net financial position increased by CHF 15.4 mn and stood at CHF 150.8 mn as of March 31, 2013.
Headcount reflects organic growth strategy
The number of employees rose by 95 or 9.7% to 1’078 full-time equivalents during the reporting year. About half of the new jobs were created in Winterthur while the increase in staff in other countries reflects the ongoing international expansion of our service and components business.
Burckhardt Compression Holding AG repurchased 75’317 registered shares from December 15, 2008 to December 16, 2010 within the scope of a share buyback program (2.22% of share capital). On January 18, 2013 these shares were successfully placed with institutional investors in accord with the changed purpose of the buyback program.
Positive outlook for the fiscal year 2013
Despite the global debt crisis, especially in Europe, and the associated turmoil, particularly in foreign exchange markets, Burckhardt Compression is confident about the course of business in the current fiscal year. Most of the markets continue to grow, especially the petrochemicals and gas transport and storage markets. From today’s standpoint, Burckhardt Compression expects an increase in order intake for both the Compressor Systems and the Components, Services & Support business area. Sales are forecast to be significantly higher compared to the fiscal year under review. The operating profit margin is expected to be near the middle of the long-term target range of 15% to 20%.
Further increase in the dividend
The Board of Directors will propose a dividend of CHF 9.00 (previous year CHF 7.00) per share at the upcoming annual general meeting, which corresponds to a payout ratio of 54% (previous year 46%) of net income. In view of the company’s sound finances and ample cash holdings, the Board of Directors has increased the targeted payout range from 40%–60% to 50%–70%.
About Burckhardt Compression
Burckhardt Compression is one of the worldwide market leaders in the field of reciprocating compressors and the only manufacturer that offers a complete range of Laby® (labyrinth piston), Process Gas, and Hyper Compressors. The compressors are used to compress, cool or liquefy gases. Burckhardt Compression’s customers include multinational companies active in the chemical, petrochemical, refinery, industrial gas and gas transport and storage industries. With the leading compressor technology, the high-quality compressor components and the comprehensive range of services Burckhardt Compression supports its customers in their effort to minimize the life cycle costs of their reciprocating compressor systems.
Marcel Pawlicek, CEO
Tel.: +41 (0)52 262 55 00
Fax: +41 (0)52 262 00 51
- Key figures at a glance
- Consolidated income statement
- Consolidated statement of comprehensive income
- Consolidated balance sheet
- Consolidated cash flow statement
- Key dates in 2013 and 2014
The 2012 annual report has been published on our website at www.burckhardtcompression.com/financial-reports