Brügg/Bienne, 17 August 2005 – In the first half of 2005, the Biella Group – Switzerland’s biggest manufacturer of office supplies with a strong presence in central and eastern Europe – reported a significant CHF 3.7 million year-on-year improvement in its operating result, from CHF 5.0 million to CHF 1.3 million, despite a decline in sales. Although operating conditions remain challenging, earnings are expected to increase further during the remainder of the year.
The positive development in the operating result must be seen in the context of persistently weak demand for paper, office supplies and stationery in Europe and Switzerland. There are still few, if any, signs of recovery in key western European economies. At the same time, competition is becoming tougher and increasing numbers of suppliers are being crowded out of the market. Pressure on the selling prices and margins of all manufacturers – already high – has increased once again.
In this difficult market environment, the Biella Group recorded a pleasing overall performance during the first half of 2005. The operating result for the first half (CHF 1.3 million) improved by 74 percent compared with the same period in 2004 (CHF 5.0 million). Meanwhile, sales of CHF 64.8 million were 3.6 percent lower than the year-back period (CHF 67.2 million). This is due largely to the sale of the illustrated calendar business to LZ Medien at the end of 2004. While the Group succeeded in expanding sales in Poland and Germany, all other markets suffered under difficult economic conditions. It should be noted that the income statement for the first half is traditionally weaker for seasonal reasons, with sales and earnings always picking up during the second six months of the year.
Biella-Neher AG acquired the remaining 26 percent of Vienna-based Donau Design GmbH with effect from 30 June 2005 and thereby completed its takeover of the company.
The relocation of manufacturing operations from the Wiener Neustadt site in Austria to the new premises in Szydlowiec, Poland (built at the end of last year), and to a lesser extent to Kimle, Hungary, began on schedule in early July 2005. Production at the new sites will commence in stages, starting immediately. In addition, logistics for the Czech Republic and Slovakia will be concentrated in Wiener Neustadt, in neighbouring Austria, by the end of 2005. Both projects will contribute to the necessary improvement in the Group’s competitiveness from 2006 onwards.
Thanks to its focus on its core competency as a manufacturer of customized products, as well as the sustained success of its restructuring programme, the Biella Group expects results to continue to improve over 2004. The aforementioned sale of the illustrated calendar business, as well as the strategic decision to discontinue unprofitable lines, will nonetheless mean lower sales.
If you have questions, please contact:
Mr Urban Fäh, CEO
+41 79 512 83 88
+41 32 366 33 33