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14.03.2003
Brügg/Biel, 14 April 2003 Difficult market conditions left their mark on the 2002 annual results of the Biella Group, which has operations in a number of countries. Known mainly in Switzerland, Austria and eastern Europe as the manufacturer and vendor of articles for use in offices and schools along with calendars and customised presentation products, the group reported a drop in profits to CHF 2.8 million after provisions. The company's deliberately cautious financial policy caused the Board of Directors to propose a slightly lower dividend of CHF 175 per share, compared with CHF 100 for a six-month period in 2001, to the Annual General Meeting.
In the year ending 31 December 2002, the Biella Group generated profit after taxes and minority interests of CHF 2.8 million (2001: CHF 5.1 million) on net sales of CHF 165 million (2001: CHF 103 million). However, as the 2001 accounts covered only a six-month period (July to December 2001) and reflected strong seasonal distortions, it is difficult to make direct comparisons with the results for the previous year.
To brace the company for future developments in international trade, CHF 1.3 million was set aside as provisions, reducing the net profit for 2002. The Group results for last year are below expectations, but they exceed the general market trend.
Improved equity ratio, liquidity and cash flow for the Group
During 2002 the Biella Group further reduced its indebtedness to banks from CHF 28.5 million to CHF 23.9 million. The proportion of equity capital (including minority interests) in the balance sheet total as of the end of December 2002 has improved since 2001, and the equity ratio now stands at 60%, compared with 56% a year earlier. Net liquidity rose sharply from CHF -6.6 million in 2001 to CHF 2.3 million in 2002. The cash flow generated from business activities also improved, rising from CHF 2.7 million to CHF 12.2 million or 7.4% (2.7%) of net sales. The average total number of employees fell from 755 to 730.
Biella-Neher AG defies the economic situation
The company at the heart of the group, Biella-Neher AG, produced a good result despite the poor economic situation in Switzerland. Although sales were down by 11% on a year-on-year comparison, by concentrating on core products and core customers and implementing rigorous cost management the company managed to slightly increase its net profit.
The Donau Design Group was hit by the economic crisis in Germany and Austria, but in the eastern European markets gross sales were up by 5% compared with the previous year. For the business year 2002 as a whole it made a net loss, and this was exacerbated by exchange rate losses and the insolvency of Libro, the biggest distributor of office and school products in Austria. As the most important eastern European market, Poland is becoming an increasingly significant market for the Biella Group, with considerable growth potential.
Kadee Delft in Holland was also adversely affected by the economic recession, as a result of which it sustained a decline in sales and also a net loss for the year.
Biella Calender AG has been working successfully with its Italian partner and European market leader, Lediberg of Bergamo. Specifically, this cooperation has improved performance with regard to management of the range of diaries and calendars and in internal processes.
No sustained recovery expected for the present trading year
The Biella Group is not expecting any sustained recovery in the current business year. In view of the uncertain economic situation, its top priorities are therefore to retain profit-earning capacity and to expand and integrate its international activities.
Since 2001 the Biella Group has significantly strengthened its international profile. Today it has production facilities in Switzerland, Austria, Hungary and Holland, central support operations in Brügg/Biel and Wiener Neustadt and its own international distribution network. Its market presence is underpinned by the familiar brands “Biella”, “Donau” and “Kadee Delft”.
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