Effective development in the second half of 2012
Brügg/Biel 12.12.2012 - 2012 is drawing to a close. It has been a significant period for the Biella Group. The acquisition of the Falken Group from Herlitz PBS AG (Germany) in the spring marked a milestone on the company’s strategic path. Since then, the Biella Group has become one of the largest sources of office supplies in Europe.
After Biella provided information on the development of our business and the sequence of events as regards the integration of the Falken Group in the first six months of the year in the form of the 2012 semi-annual report, the following should offer some orientation in relation to the second half of the year and our expectations for 2012 as a whole.
The integration of the Falken Group continues to go according to plan – in certain areas even faster than originally projected. Important organisational stages were the transfer of structures in the Sales & Marketing, Purchasing, Production and IT/Accounts divisions. From August, customer relations were transferred from Herlitz to Biella gradually and with virtually no hitches. In the coming year, integration will be completed to a large extent with the creation of a new Central European logistics platform and the harmonisation of internal processes. This will allow us to continue with the centralisation and slimming down of the organisation.
In the semi-annual report, Biella had already pointed out the striking uncertainties in the economic climate. Unfortunately, these became worse in the second half of the year. The deep recession in the countries of southern Europe is, in the meantime, having a substantial effect on Central European countries that were stable in the first six months of the year, as well as on countries with a strong interdependence with this region, namely Poland, the Czech Republic, Slovakia and Hungary. This general economic downturn also affected the paper, office supplies and stationery sector unusually severely and quickly. Figures for this sector point to downturns of between 5 and 10% in comparison with the previous year.
This sudden reduction in demand has also not passed unnoticed in Biella. Consequently, Group turnover figures as at November 2012 demonstrate an increase of 33% compared with the previous year's period. Adjusted to allow for the Falken acquisition, turnover up to November has however decreased by 4%, whereas in the first six months a 3% increase was experienced. As a result, the seasonal business in the second half of the year which is so important for the Biella Group has suffered a sensitive blow. Particularly affected by the fall in demand was the soft plastics product range in our Kimle factory in Hungary, which has clearly slipped into the red as a result. In addition and in spite of a declining economic situation, the profit situation has been further burdened by an increase in raw material prices.
Despite the stresses and strains described, it has been possible to achieve balanced Group operating results before interest and taxes. The one-off expenditure on the integration of Falken, however, is running at around CHF 3 million, which means that Biella will not be able to achieve positive Group results for the 2012 business year.
On the other hand, the statement of earnings of Biella-Neher Holding AG, which is essential for the decision of the AGM on the appropriation of net income, will close with a positive result.
However, for the year 2013, Biella expects a noticeable improvement in the EBIT margin, by virtue of the immediate measures introduced to reduce costs and the incidental synergies resulting from the Falken integration, which have proved greater than originally assumed.
Biella Group – with the acquisition of the Falcon Group one of Europe’s most important and powerful supplier of office products – runs production sites in Germany, Switzerland, Hungary, Poland, Romania and the UK, has logistics-centres in Brügg / Biel (CH), Wiener Neustadt (AT), Warsaw (PL) and Enkhuizen (NL) and a distribution network all over Europe. The Group employs on an annual average app.1.100 employees. The Biella-Neher Holding Ltd. is listed on the Berne Stock Exchange BX Berne eXchange (symbol: BLLN, Security: 151948s, ISIN: CH0001519484).
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