PCB | May 07, 2010

Schweizer records sales increase of 27%

Sales for the German PCB manufacturer Schweizer electronic reached EUR 23.9 million during the first quarter of the financial year. This exceeds the prior quarter figures by 27%.
Compared to the first quarter of 2009, this indicates an increase of 87% - we had expected an increase of 60%. 52% of sales were achieved in the automobile sector, 25% in solar electronics, 15% in the other industries segment and 8% in other customer sectors.

Order entries amounted to EUR 35.7 million in the first quarter, exceeding the year-on-year figure 13 times. The book-to-bill ratio was at 1.5 in the first quarter.

Sound profitability and financial stability
The first three months closed with an EBITDA (Earnings before interest and taxes, depreciation and amortisation) of EUR 3.2 million. The EBITDA ratio of 13% remains somewhat below the prior quarter figure but continues to remain stable. At EUR 2.2 million, or 9% of sales, EBIT (Earnings before interest and taxes) is stronger than in the prior quarters.

The balance sheet structures continue to improve due to the continued positive earnings situation. At the end of the first quarter, the equity ratio rose to 31.8% whereas the prior year quarter closed at 29.1%.

Cash flow from operating activities slightly negative
A negative cash flow of EUR 0.1 million was achieved in the first quarter of this financial year. The marked increase in business volumes resulted in an increase in working capital of EUR 3.8 million. This increase was in particular due to receivables which rose by EUR 5.3 million in the first three months and is purely volume-based – there was no change in the payment trends of our customers.

Outlook: Price increases and supply shortages in basic and raw materials
Due to the broad and steep increase in worldwide demand for raw materials as well as basic materials, the next few months will see longer delivery times as well as significant price adjustments on our supplier side. Schweizer Electronic has countered these signals by already introducing measures in order to avoid noticeably negative effects on profits.

Order situation remains positive
"At this point in time there are no indications of any flagging in the brisk ordering activities of our customers. We are therefore optimistic that high sales levels will be able to be maintained in the next few months", the company states.

Medium to long term development however continues to be beset with uncertainties. In the fast and intensive recovery of the electronics industry lies the danger of an equally fast relapse ("double-dip" risk). The medium-term effects of the debt situation of some southern European countries on the world economy are also not yet foreseeable today.

2010 promising for Schweizer
Schweizer Electronic will continue to explore important product developments and targeted investments in growth areas with continued financial discipline. At the main plant in Schramberg, the company is pursuing the goal of making its processes and structures more flexible in order to enable Schweizer to react to short term and continued increasing fluctuations in customer demand.

The 2010 budget has provided for investments of several millions in Schramberg – to increase flexibility and productivity and to cater for specific customer needs in growth areas. In addition, its partner, Meiko Electronics, has invested in significant capacity developments in the Asian plants.

Prognosis for the 1st half year of 2010
Against this backdrop, Schweizer Electronic expects to achieve sales of EUR 48 to 50 million at an EBIT ratio of between 8% and 9% (prior year period: Sales EUR 28.2 million / EBIT ratio – 20%) for the first half of the 2010 financial year. Therefore its forecast sales are in line with year-on-year growth of more than 70%.


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