Zurich, Switzerland — Conzzeta, which owns flexible foamer FoamPartner, had sales of CHF 1.78bn in 2018, up 20.2% on the previous financial year.
Challenging operating environment for FoamPartner in 2018
EBIT across the business rose by 19.2%, and reached CHF 146.8m in the 2018 financial year.
The company's chemical specialties business, which includes FoamParter, sales rose 36.2% between 2017 and 2018. They reached CHF 383m in the 2018 financial year. This compares with CHF 281.3m in the previous year.
Although sales were up, EBIT across in the division fell by 76.6% to CHF 5.8m in 2018.
The division was restructured significantly in 2017 when Otto Bock was purchased and Conzzeta sold its 51% stake in its US joint venture with Woodbridge. The one-off gain from the joint venture sale inflated earnings in 2017 by CHF 8.8m.
Conzzeta said 2018 was challenging for FoamPartner. The business spent CHF 5.5m implementing a new regional management structure, developing regional business models and closing a site in the US.
High raw materials prices in 2018 hit the numbers. At the same time declining European automotive production, through tougher emission tests reduced slowed business. China's economic slowdown and the trade dispute between China and the US also hit performance.
FoamPartner plans 'extensive measures to improve operational efficiency… over the next 24 months to improve margins.' Its goal is a 10% EBIT margin over the mid-term.
Moreover, sites will be consolidated in the US, and the company will focus more on specialities there in 2019. The same specialties focus will drive the Chinese business, and there will be an attempt to improve quality and yield there. In Europe, the business will examine its plant locations and strengthen sales.
In addition, the business will work on ERP and CRM tools, and increasingly digitise foaming, order management and logistics. It aims to develop more durable sponges, sealing products based on ether technology and a new prepolymer technology for automotive rolls.
'Thanks also to the strategic measures and investments made, we see opportunities to further improve profitability. We anticipate significant progress particularly in chemical specialties,' said Michael Willome, Conzzeta Group's CEO.
Currency conversion: XE.com.
|Conzzeta Numbers 2018 (CHF m)|