Zurich -- Swisss industrial holding Conzzeta Group said 11 June that the worldwide economic crisis had "a massive impact" on the performance of the group in the first four months of 2009. Compared with the same period of 2008, consolidated net revenues fell by -32.4 percent to CHf 330.9 million ($308 million). The operating result (EBIT) shrank to CHf 4.4 million (CHf 28.7 million: 2008). At the end of April 2009, group profit amounted to CHf 11.8 million (CHf 22.9 million: 2008).
Conzzeta, which owns the FoamPartner group of flexible foam manufacturers, said that the "continuing slump in incoming orders in machinery and systems engineering, to just one third of the previous year's level, will result in a further decrease in revenues and earnings."
In its foam materials business, sales for the four months were CHf 36.6 million, a drop of -32.7 percent over sales for the same period of 2008. Adjusted for the effect of an acquisition (+3.9 percent) and currency translation influences (-0.9 percent), the decline was -35.7 percent.
Conzzeta's statement said some customers have "down-scaled their orders and massively reduced inventories," in the foam sector, as a result of the economic crisis. All three product groups (industry, comfort and automotive) felt the impact of the slump, but the comfort segment was least affected, said Conzzeta, while sales in the industrial and automotive segments fell steeply. Conzzeta did, however, predict stabilisation of demand in the second four months of the year.
The group's sheet metal and glass processing units fared even worse than the foam units. Conzzeta's business in sheet-metal processing systems had net sales of CHf 127.8 million in the first four months of 2009, a decrease of -46.8 percent in Swiss franc revenues, and -43.1 percent in local currencies. And its glass-processing systems business had sales of CHf 47.0 million (-44.8 percent) in the first four months of 2009.
But Conzzeta's real estate business continued on a stable course, while its sporting goods business increased sales.
To counteract the slump in orders, Conzzeta said the affected businesses "took rapid and decisive action to temporarily adjust capacity and reduce costs." Capacity reductions were achieved mainly by cutting overtime, unused vacation and temporary work. Short-time working was also introduced at most locations. In the four months under review, the businesses reduced working hours by about 12 percent, to help cut personnel costs.
Looking forward, Conzzeta said it continues to face difficult conditions in its main markets, and feels it is still too early to say if the bottom of the downturn has been reached.