§ Decline in net sales of 6.4 percent to CHF 299.1 million
§  Growth in sales of 0.9 percent from continued business activities excluding exchange and consolidation effects
§  Increase in the EBIT margin from 2.9 to 4.8 percent, largely as a consequence of the successful restructuring of the manufacturing business in North America
§  Net income up by 13.6 percent to CHF 10.0 million
 
“As expected, the successful restructuring of our North American manufacturing business last year had an extraordinarily positive impact on the EBIT margin,” explains CEO Silvan G.-R. Meier with regard to the increase in earnings. “The conscious decision to discontinue low-margin business with major home-improvement chains, which also explains the decline in sales at the Group level, was a key component of this restructuring process.”
 

Group

In the first half of 2010, the climate and manufacturing technology group Walter Meier recorded a decline in net sales as against the comparative period in the previous year of 6.4 percent to CHF 299.1 million. Excluding exchange and consolidation effects, the decline amounts to 5.2 percent. Factoring out the business activities that have been discontinued as a result of last year’s restructuring in North America, net sales have increased by 0.9 percent.

While sales in Climate Technology in the Swiss domestic market were maintained at the pleasing level of the previous year, sharp decreases had to be recorded in France. EBIT increased sharply in the first half of 2010 by 55.9 percent to CHF 14.5 million. This equates to an improvement in the EBIT margin from 2.9 to 4.8 percent. In essence, the trend in earnings was underpinned by the successful restructuring of the manufacturing business in North America. The reorganization of the climate business in France was a burden on earnings.

Net income amounted to CHF 10.0 million, which equates to an improvement on the previous year of 13.6 percent. While exchange effects continued to have a positive impact on the financial result in the previous year, negative translation effects had to be posted on the balance sheet date because of the weakness of the euro in particular. By contrast, the translation effects on transactions in the first half of 2010 largely canceled each other out.
Capital employed was maintained at the good level of December 2009. Net assets fell slightly for seasonal reasons and amounted to CHF 23.1 million on the balance sheet date. Equity came to CHF 150.7 million, which equates to a slightly reduced ratio of 46.5 percent. The change in equity is dominated by the capital reduction carried out in June 2010 and the continuing purchase of treasury shares on the second trading line.

 
Climate Technology

In Climate Technology, Walter Meier generated net sales of CHF 200.5 million, which is 2.3 percent less than in the same period in the previous year. Excluding consolidation and exchange effects, the decline falls to 1.6 percent.

The business units were able to maintain the previous year’s level of sales in local currency or even increase it slightly; only the business in France had to accept significant losses. This is attributable on the one hand to the downturn in the French heating market and on the other hand to the withdrawal from the market for air-conditioning units and split heat pumps which started in the second quarter.

Global net sales of humidification equipment and systems increased slightly in the first half of 2010, if exchange effects are excluded.

EBIT in Climate Technology amounted to CHF 10.0 million in the first half of 2010, which equates to a decline on the previous year of CHF 4.5 million or 31.0 percent. The EBIT margin shrank from 7.1 to 5.0 percent. Excluding anticipated expenses for the restructuring in France, the earnings capacity of previous years was largely maintained. The restructuring expenses consist of write-downs on inventories, expenses for guarantee services, payment obligations for a rented property and from a compensation program associated with a reduction in force.
 

Manufacturing Technology

In Manufacturing Technology, Walter Meier reported net sales of CHF 98.6 million. This equates to a decline on the previous year of 13.7 percent. Excluding exchange effects, the decline is somewhat smaller at 11.8 percent. Factoring out the sales from transactions with large home-improvement chains in North America, which were discontinued in the first half of 2009, marked growth in sales of 6.6 percent can be reported for the continued business activities.

While the automated metalworking business in Switzerland was stable at a low level, global sales of hand machinery for woodworking and metalworking for commerce, construction and industry recovered from the previous year’s dramatic slumps.

EBIT in Manufacturing Technology improved considerably to CHF 5.4 million. The EBIT margin was increased from –1.9 to 5.5 percent. Although all business units have contributed to this gratifying performance, the majority was accounted for by North America and is a result of the restructuring measures initiated promptly at the end of 2008 and now implemented in their entirety.

 
Personnel

Compared with year-end 2009, the number of personnel fell by 20 to 1 555 employees (full time equivalents). In net terms, the number of employees in Manufacturing Technology fell by nine and in Climate Technology by 20, whereby the latter reduction partly involved transfers from Climate Technology into the Group-wide service unit.

Outlook

Overall, for the second half of the year, Walter Meier expects the market to remain challenging. Growth will continue to vary significantly between Group Divisions and between individual markets. In Manufacturing Technology, Walter Meier expects the moderate growth from the first half of the year to continue.

In Climate Technology, forecasts indicate that the Swiss market will remain stable and the Division is expected to be able to offset the restructured decline in sales in France to a very large extent.
 
 
Walter Meier is an international climate and manufacturing technology group. The company was founded in 1937 in Zurich (Switzerland) and today does business in more than 70 countries. Its 1600 employees generate sales of approximately CHF 650 million. Walter Meier puts great emphasis on customer-specific solutions and comprehensive support services. Shares in Walter Meier are listed on the SIX Swiss Exchange (symbol WMN).