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Germany - SCHMOLZ+BICKENBACH has overcome the crisis

Only one year after the biggest crisis in the steel industry, the Swiss public limited company SCHMOLZ+BICKENBACH AG has successfully turned itself around. Net income improved significantly to EUR 4.4 million (EUR -149.0 million). Revenue reached EUR 1,477.4 million (EUR 1,054.2 million). Operating profit before depreciation and amortisation was up by EUR 217.5 million on the previous year at EUR 102.3 million (EUR -115.2 million), with EBIT at EUR 49.2 million (EUR -166.5 million).

The optimisation initiatives in the form of cost reduction and efficiency measures showed results. The noticeable recovery in the economy since the second half of 2009, and particularly since the second quarter of 2010, as well as the completion of inventory rundowns by the customers at the end of 2009, resulted in a substantial increase in orders received, shipping volumes and order backlogs in the first half of 2010.

The improvement in the order situation that has been experienced in the last few months is continuing in all of the Group's production, processing and distribution operations. There is full capacity utilization for several months. The company therefore expects operating profit for 2010 to be clearly positive.

The credit agreements that were negotiated with an international bank consortium in connection with a new financing concept are in the finalizations phase. They are expected to be signed following completion of a state aid audit and approval by the European Commission.

The year 2009 was characterized by a fall in end customer demand, which in some cases was dramatic. Since the customers and steel consumers at all levels of the value chain were carrying inventories for normal operating levels, material from stock was used up first. This exacerbated the collapse in demand for the steel suppliers, particularly the steel producers. These depletions of customers' inventories came to an end in 2009. After a still weak first quarter of 2010, the second quarter brought a clear improvement in the economic situation of the market segments served by SCHMOLZ+BICKENBACH. In the first half of 2010, in response to the brightening economic situation, the steel-consuming customers increasingly ordered material and adapted their very low stock levels to their consumption needs again, although stock turnover rates are still lower than before the global economic crisis. This situation became particularly apparent with customers in the automobile and automobile components supply industries. Orders received were therefore clearly higher than in the comparable period last year.

In response to the increased raw material prices and higher sales volumes, Group revenue in the first half of 2010 rose to EUR 1,477.4 million (EUR 1,054.2 million). Operating profit before depreciation and amortisation (EBITDA) increased by EUR 217.5 million or 188.8% to EUR 102.3 million (EUR -115.2 million) and, in contrast to the same period of the previous year, was clearly positive again.

Cash flow before acquisition of Group companies was EUR -135.9 million (EUR 118.7 million), which was attributable to the rise in working capital resulting from the increased demand as well as higher factor prices. Total assets rose to EUR 2,608.0 million (31.12.2009: EUR 2,222.0 million). Net financial liabilities increased to EUR 1086.4 million (31.12.2009: EUR 917.2 million) due to the greater business volume. The equity ratio changed only slightly to 21.4% (31.12.2009: 23.7%).

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