Buchs/Aarau, 17 August 2010 – In a still demanding business environment, Swisslog recorded figures for order intake and net sales in the first half of 2010 that are only slightly below last year’s. A one-time effect originating from the Healthcare Solutions division produced a significant impact on both operating profit (EBIT) and the half-year net profit. The Group’s financial situation remains solid as usual.

“The Group’s results, which otherwise were in line with expectations, were strongly affected by the operational issues at Healthcare Solutions in Europe. Based on the existing order backlog and first signs of a recovery in our predominantly late-cyclical business, we expect the second semester to be better,” Swisslog CEO Remo Brunschwiler comments on the half-year result. The Group’s order intake declined compared to the same period last year to MCHF 345.4 (-5.7%; -3.8% in constant currencies). Order backlog per 30 June 2010 stood at MCHF 475.2 (-3.8%; +0.2% in constant currencies). The reduction in net sales to MCHF 304.3 (-8.9%; -7.5% in constant currencies) met expectations. An operating profit (EBIT) of MCHF 5.7 (slightly negative currency effects; same period last year: MCHF 16.0) and a half-year net result of MCHF 3.0 were generated (no currency effects; same period last year: MCHF 11.9).

Warehouse & Distribution Solutions develops according to plan

The Warehouse & Distribution Solutions division recorded two major orders that contributed to the first half-year’s order intake total of MCHF 237.6 (-3.2%). Order backlog, at MCHF 326.4 (-4.9%) per 30 June 2010, was also only slightly below the previous year’s figure. The lower order backlog at the end of 2009 led to a drop in net sales to MCHF 199.1 (-6.7%). Operating profit (EBIT) fell to MCHF 7.6 (-14.6%). The EBIT margin was 3.8% (first half-year 2009: 4.2%).

Healthcare Solutions suffers from one-time effect and declining net sales

Order intake of the Healthcare Solutions division declined in the first half-year to MCHF 107.8 (-10.9%), order backlog to MCHF 148.8 (-1.3%). Net sales dropped to MCHF 105.2 (-12.9%) due to the lower order intake at the end of 2009 and beginning of 2010. The division had issues in connection with the introduction of new functionalities for the Automated Guided Vehicles and Electric Track Vehicles product lines. These caused one-time additional costs of MCHF 5.8 that led, together with lower net sales, to a significant diminution of the division’s operating profit (EBIT). It amounted to MCHF 2.5 (previous year’s period: MCHF 11.5). Accordingly, the EBIT margin was lower at 2.4% (first half-year 2009: 9.5%). The issues are identified and, as far as they still exist, in the process of being solved. The substantial part of the associated cost was recognized in the first half-year 2010. Brunschwiler emphasizes that “The other product lines, in particular the Pneumatic Tube Systems, traditionally the backbone of Healthcare Solutions’ net sales and profit, were not affected by these issues.”

Financial result improves, solid equity position

Financial income declined somewhat to MCHF 2.6 (previous year’s figure: MCHF 2.8), but the reduction in financial expenses to MCHF 2.2 (previous year: MCHF 3.0) was even more pronounced. Due to tight hedging, it was possible to offset the volatility on the currency exchange markets. The net financial result was MCHF +0.4 (first half-year 2009: MCHF -0.2). Income tax fell to MCHF 3.1 (previous year’s figure: MCHF 3.9).

The financial situation of the Group remains solid as usual. The equity ratio rose once more from 40.0% at the end of 2009 to 41.6%. Net cash fell to MCHF 58.9 (31.12.2009: MCHF 104.3), which is mainly due to the reduction of advance payments made by clients.

Outlook

Swisslog expects a better second half of the year compared to the first. This is based mostly on the existing order backlog and the implemented measures at Healthcare Solutions Europe. Moreover, there are first signs of a recovery of demand for both divisions, primarily in the North American and Asian markets.

The outlook for the current business year given in March 2010 is adjusted to take into account events as well as the development of the business environment. Order intake is expected to reach about previous year’s level. While the forecast for net sales is somewhat better (reduction of approx. 5% instead of 5-10%), Swisslog anticipates a reduction in operating profit (EBIT) of approx. 30% (instead of 5-10%) – barring any unforeseen events.



Calendar

8 March 2011: Publication of 2010 Annual Result
14 April 2011: General Meeting of Shareholders 2011