Baar, Switzerland - Belting, adhesives and flooring specialist Forbo Group posted sales of CHf 1918.7 million ($1703.5 million) in 2008, just below the previous year's level of CHf 2004.0 million. Acquisition by Forbo of Bonar Floors and Transtex Belting contributed a sales rise of 3.6 percent.
The negative impact of currency translations was 6.0 percent, and in local currencies, sales growth came to 1.7 percent, said the group. Operating profit before depreciation and amortisation (EBITDA) was CHF 205.8 million, below the 2007 figure of CHf 221.9 million. Operating profit (EBIT) came to CHf 117.1 million (previous year CHf 162.4 million), equivalent to an EBIT margin of 6.1 percent.
Forbo, which has a polyurethane belting unit, Forbo Siegling, said additional special charges of CHf 16.0 million affected group profit for 2008: if these charges are taken out, "Forbo posted the second best result in its history," the group said, in its 17 March results announcement.
"Sales were stable until the third quarter of 2008, but fell considerably in the course of October and then slumped further as of November. The trend was exacerbated in December when Forbo's customers had to shut down factories, introduce forced vacation and short-time work," the statement said.
During the year, Forbo bought Transtex Belting, the lightweight PVC conveyor belt activities of Fenner Dunlop, a move which "strengthens and broadens the market presence of Movement Systems in strategically significant segments in the North American market," the group said.
An impairment charge to the industrial participation in automotive acoustics and textile systems group Rieter added to other net expenses, and group profit came to CHf 16.0 million (2007, CHf 110.7 million).
Forbo intended its 10-percent stake in Rieter to broaden its activities through a long-term industrial engagement in an additional world-leading activity with cooperation potential. As a company with a strong brand and superior cutting-edge technology, Rieter met these criteria, the group said. Forbo said it is keeping all options open, from selling the stake to building up the position further.
Forbo said shareholders' equity stood at CHF 584.4 million at the year-end of 2008. Additionally, Forbo was holding a position of own shares with a market value of CHFf 94.1 million at 31 Dec 2008. The company said it sees this "strong balance sheet in a prolonged economic downturn as a significant competitive advantage."
In terms of this year's outlook, Forbo said it does not anticipate a rapid recovery of the markets and believes that 2009 will be significantly more challenging than 2008, so no concrete forecasts are possible.
Forbo employs some 6500 people and has an international network of 44 sites with production and distribution and sales organisations in a 35 countries worldwide.