November 09, 2010 | Ad hoc announcement pursuant to Art. 53 LR
Significant signs of recovery in order intake – profitability remains solid
Burckhardt Compression, one of the world’s leading manufacturers of reciprocating com-pressors, took in slightly more orders during the first half of fiscal year 2010 (April to September) while sales for the same period were about 5% lower. The Group achieved an 18% EBIT margin and 13% net profit margin, clearly better than average industry levels yet slightly below the corresponding margins in the prior-year period. Full-year sales in 2010 are expected to exceed CHF 350 million and the EBIT margin should range between 15% and 20%.
Order volumes clearly recovered during the period under review compared to the disappointing second-half intake in the previous fiscal year. Compared to the prior-year period, overall orders received in the first half increased by 0.4% to CHF 164.3 million. Orders for new machines sub-sided another 8.6% to CHF 100.0 million but were significantly higher compared to the second half of the previous fiscal year, rising by CHF 38.1 million or 61.6%. Order intake in the service busi-ness (CSS) remained on a firm growth path and increased by 15.4% to CHF 51.0 million. The compressor components business also reported pleasing growth during the period under review, up 33.0% to CHF 13.3 million.
Margins still better than average
Group sales amounted to CHF 173.9 million, a 4.7% decline from the prior-year figure. Gross profit declined by 5.0% to CHF 59.5 million, resulting in a gross profit margin of 34.2% (34.3% in the prior-year period). Sales and administrative expenses increased by CHF 1.8 million or 8.3% com-pared to the first half of the previous fiscal year. This increase is attributable solely to the ongoing expansion of sales infrastructure in the CSS and compressor components businesses.
Operating income in the first half of fiscal year 2010 amounted to CHF 30.9 million, an 11.7% de-cline from the year-ago figure, resulting in an EBIT margin of 17.8% (19.2% in 1st H 2009). Profit for the period declined by 13.3% to CHF 22.8 million and earnings per share were down by 12.4% to CHF 6.85. As of the end of September, Burckhardt Compression employed 910 people.
Market launch of extended Process Gas Compressor product line
The proactive initiatives for sales and development activities are already paying off. At the end of September Burckhardt Compression has launched its extended range of Process Gas Compres-sors. This performance enhancement sharpens Burckhardt Compression’s competitive edge and will strengthen its market position in the fields of oil refining and petrochemical applications. The accompanying sales activities met with positive reactions on the customer side. Also the order in-take of the service business could be increased comparing with the previous period due to intensi-fied sales activities.
New subsidiary in Dubai
In mid-June the Group’s most recently established subsidiary commenced operations in Dubai. This new operating location, which includes a service center, will enable the company to better serve its growing number of customers in the Middle East. In May the enlarged assembly hall in Winterthur was inaugurated after the completion of a building conversion project.
End of share buyback program
On December 15, 2008 the company started a share buyback program, which was extended in December 2009 by one year until December 16, 2010. Under this program Burckhardt Compression has the possibility to repurchase up to 170’000 shares of the outstanding shares (BCHN) or 5% of the company’s share capital on the regular market. As of September 30, 2010, the company had repurchased 75’317 shares, or 2.2% of the company’s share capital. The shares held by the company may be used by the Board of Directors for acquisitions. The Board of Directors has decided not to extend the share buyback program beyond December 16, 2010, since the original objective, to have roughly shares in the value of about CHF 20 million available for acquisitions, has been nearly achieved.
Outlook
From the company’s perspective the low point in the markets relevant to Burckhardt Compression has been passed. There are clear signs that the order intake for new machines, compared to the first-half year level will further improve. Full-year sales for fiscal year 2010 are expected to exceed CHF 350 million and the EBIT margin should range between 15% to 20%.
About Burckhardt Compression
Burckhardt Compression is one of the worldwide market leaders in the field of reciprocating com-pressors and the only manufacturer that offers a complete range of Laby (labyrinth piston), Pro-cess 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, pe-trochemical, 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.
The interim report for fiscal year 2010 is online at www.burckhardtcompression.com/midyearresults.
For further information
Contact: Valentin Vogt, CEO Tel.: +41 (0)52 262 55 00 Fax: +41 (0)52 262 04 08
E-mail: [email protected]
Internet: www.burckhardtcompression.com
