Quadrant notices the recession

Quadrant reports sales of CHF 733.4 million for the 2008 financial year (2007: CHF 811.8 million), a 10% decline compared to the previous year’s result. Sales of the High-Performance Plastics division fell by 8% to CHF 608.3 million (2007: CHF 663.9 million) and of the Plastic Composites & Pipes division by 15% to CHF 125.1 million (2007: CHF 147.9 million). The decline in sales is due mainly to unfavorable currency developments and – not surprising, considering the global financial crisis and the large-scale loss of trust – to extremely weak orders in December.

Sales development suffered from the weak economy for the entire financial year and was characterized by a particularly poor fourth quarter. Never since 2001 have fourth quarter sales expressed in Swiss francs been as low as in 2008, and never before has Quadrant’s broad regional and industry diversification resulted in such a meager effect. All geographic markets and nearly all customer segments, especially those in the capital goods industry, suffered from the successively growing weakness in demand. The development was further compounded by customers running down their stocks, which in December nearly caused a standstill in activities. In addition, a significant share of the unfavorable development is due to the general strengthening of the Swiss franc compared to currencies of importance to Quadrant, with the exception of the Japanese yen. Without these unfavorable currency influences the negative growth would have amounted to only 3%. Acquisition-related growth amounted to 2%, sales adjusted for currencies and acquisition therefore shrunk by 5%.

With a sales decline of 1% adjusted for currencies, the High-Performance Plastics division (83% of total sales) again was the better performing division, although it was unable to maintain the promising development experienced in the 3rd quarter. A better performance was frustrated as a result of the financial crisis by the significantly growing recessive tendencies in North America, Europe and increasingly in Asia. The smaller Plastic Composites & Pipes division (17% of total sales) continued to suffer from the progressively deteriorating situation in the automobile industry. As expected, the division’s non-automotive business, which is currently being developed, and its successful pipe protection system were unable to make up for the loss. The sales reduction in local currencies amounted to 13%.

Quadrant was confronted with such a fast-changing economic environment during the last quarter, and especially during the last month of 2008, that timely operating measures were implemented to a limited degree only. Consequently, it will not be possible to report an operating income comparable to the corresponding period the previous year. Despite the difficult general conditions, Quadrant does not expect a substantial impairment on the goodwill position.

Quadrant will announce its 2008 financial results on 31 March 2009.

Quadrant, a global leader in high-performance polymer materials in the form of semi-finished and finished products with locations in 19 countries, generates annual sales of up to CHF 750 million. The specialty engineering thermoplastics and composites manufactured and marketed by more than 2’400 employees worldwide are superior in performance to metals and other materials and are used in a growing number of applications, primarily in the capital goods industry. Together with leaders in a wide range of customer markets, Quadrant is continuously developing new areas of application. Thanks to its clear strategic orientation and focus, Quadrant has generated substantial added value for customers and shareholders since it was established in 1996 and is well prepared to continue expanding its market leadership in future.