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FIRST HALF-YEAR 2024
Forbo Holding AG / Key word(s): Half Year Results MEDIA RELEASE Net sales and volume growth impacted by difficult market environment – continued negative currency effects on net sales and earnings – double-digit EBIT margins maintained – equity ratio further improved The Forbo Group – a leading manufacturer of floor coverings, building and construction adhesives, as well as belts for power transmission and conveyor belt solutions – reported net sales of CHF 570.3 million in the first half of 2024 (prior-year period: CHF 615.2 million), representing a decrease of 3.7% in local currencies (–7.3% in the corporate currency). Operating profit (EBIT) declined by 17.8% to CHF 61.8 million (prior-year period: CHF 75.2 million) with an EBIT margin of 10.8% (prior-year period: 12.2%). Group profit stood at CHF 48.4 million (prior-year period: CHF 57.4 million). Baar, July 26, 2024 Forbo looks back on a challenging first half of 2024. Market momentum slowed, resulting in a decline in demand and volume in comparison with a solid first half of 2023. Negative currency effects continued to impact net sales and earnings. The past few months have seen us launch attractive products in both divisions that meet our high sustainability standards. We put our funds and resources to targeted use in an entrepreneurial way and implemented operational excellence initiatives in a focused manner. Investments in product developments, production technology, and strategic projects were continued in a systematic way. Slight decline in net sales in local currencies Major impact of currency effects on net sales and earnings Operating result impacted by a decline in volumes The decline in volumes of 3.4% and the associated lower capacity utilization of production plants, negative currency effects and higher personnel cost due to inflation had a significant impact on the operating result compared with the first half of 2023. This was only partially offset by cost savings and optimized processes. Despite intense competition, sales prices more or less remained stable in comparison with the prior-year period (–0.3%). Group profit Equity ratio remains strong Solid balance sheet Performance of the divisions and focus for the second half of 2024 Newly launched products reported healthy growth, particularly with regard to the climate-positive linoleum collection “marmoleum solid” and projects for conductive vinyl floor coverings (ESD flooring) for workspaces such as data centers and operating rooms. Operating profit (EBIT) declined by 8.4% to CHF 48.1 million (prior-year period: CHF 52.5 million). The negative volume growth and corresponding decline in the capacity utilization of production plants, the higher personnel cost due to inflation, higher energy and freight cost, and negative currency effects had a significant impact on the operating result. This was partially mitigated by a slight easing of raw material prices, an increased share of sales of high-margin products and a strict cost management. Sales prices were slightly lower than in the prior-year period. Despite these developments, the EBIT margin at 12.4% was almost on par with the prior-year period (12.6%). In addition to increasing volumes and improving profitability, the focus for the second half of 2024 will be on the introduction of further innovative collections. A high level of product availability, reliable delivery quality and proximity to customers will remain key success factors. The Forbo Movement Systems division reported net sales of CHF 181.1 million in the first half of 2024 (prior-year period: CHF 199.3 million), which corresponds to a decrease of 5.2% in local currencies (–9.1% in the corporate currency). The challenging market environment was reflected in the decrease in demand in the Europe and Asia/Pacific regions, both for new investments and in the service and replacement business. In local currencies, the three regions recorded the following changes: Europe –9.1%, the Americas –1.1% and Asia/Pacific –3.5%. Operating profit (EBIT) decreased by 33.5% to CHF 18.1 million (prior-year period: CHF 27.2 million), which is largely attributable to lower net sales and the underutilization of plant capacities associated with the decline in volumes. Movement Systems also faced operational challenges in the USA and at the location in Germany. These topics led to higher operating cost and impaired delivery capability. A slight easing of raw material prices and lower energy prices partly counteracted this. Sales prices were maintained at the same level as in the prior-year period. The EBIT margin declined to 10.0% (prior-year period: 13.6%). The focus for the second half of 2024 will be on introducing new products, strict resource management and resolving operational challenges. The completion of the start-up of the new production line in China and the construction of the new coating production line in Japan remain important key projects. Well positioned Confirmed outlook for 2024 You can find further information in the 2024 Half-Year Report published online this morning: Forbo is a leading producer of floor coverings, building and construction adhesives, as well as belts for power transmission and lightweight conveyor technology. The sustainable manufacture of environmentally friendly products has long been an integral part of the strategy. Forbo’s linoleum floor coverings are made from natural raw materials. It is biodegradable and carbon negative (cradle to gate), without offsetting. For its manufacture of heterogenous vinyl floor coverings, Forbo uses the latest generation of phthalate-free plasticizers. As a proportion of total product weight, textile floor coverings also contain up to 45% recycled materials. The BioBelt is a conveyor belt consisting of at least 20% renewable raw materials. The AmpMiser conveyor belt allows savings in energy of up to 50%. The company employs about 5,200 people and has an international network of 25 sites with production and distribution, 6 fabrication centers, and 47 sales organizations in a total of 39 countries around the world. The company generated net sales of CHF 1,175.2 million in the 2023 business year. The company is headquartered in Baar in the canton of Zug, Switzerland. Contact person: End of Inside Information |
Language: | English |
Company: | Forbo Holding AG |
Lindenstrasse 8 | |
6341 Baar | |
Switzerland | |
Phone: | +41 58 787 25 25 |
Fax: | +41 58 787 25 20 |
E-mail: | info@forbo.com |
Internet: | www.forbo.com |
ISIN: | CH0003541510 |
Valor: | 354151 |
Listed: | SIX Swiss Exchange |
EQS News ID: | 1954645 |
End of Announcement | EQS News Service |
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1954645 26-Jul-2024 CET/CEST