OREANDA-NEWS. The Interroll Group managed to successfully continue on its growth course in financial year 2014. The company increased its sales by 8.0% in local currency and by 6.0% in consolidated currency to CHF 335.3 million (2013: CHF 316.3 million). On the one hand, this increase can be attributed to organic sales growth of 3.6%. On the other hand, adjusted for small divestments in Europe, the successfully integrated acquisitions of Portec, USA, and Pert Engineering, China, contributed 2.4% to sales growth. Incoming orders increased by 12.0% in local currency and by 10.0% in consolidated currency to CHF 350.7 million (2013: CHF 318.8 million) compared to the previous year. This only includes the first of a total of six sorters from the framework contract with the Brazilian Post that was announced in November 2014. The first sorter will be shipped in 2015.

Positive development in all product groups

The product group “Drives” (motors and drives for conveyor systems) continued on its successful course by posting sales of CHF 114.9 million (+5.0%).

The product group “Rollers” (conveyor rollers) recorded an increase of 7.7% to CHF 81.2 million. Here, the demand in all three regions was quite encouraging.

The 12.1% increase in sales to CHF 79.8 million in the product group “Conveyors & Sorters” can be attributed to the sustained trend toward automation, driven for the most part by e-commerce and ergonomics in working environments.

At CHF 59.4 million, the product group “Pallet & Carton Flow” (flow storage) was slightly below last year’s level because the one-time order from Red Bull Thailand valued at approx. CHF 6.5 million was already included in 2013.

Strong organic growth in the Americas, positive development in Europe

The three regions EMEA (Europe, Middle East and Africa), the Americas and Asia-Pacific developed differently in financial year 2014.

The growth in sales by 20.3% to CHF 81.9 million in the Americas region was characterised by strong organic growth of nearly 10% as well as the acquisition of Portec in July 2013. In March 2014, Interroll opened a new regional Center of Excellence in Atlanta and closed two production companies in North America during 2014. Production was concentrated at the Centers of Excellence in Wilmington and Atlanta and at the local assembly facility in Newmarket, Canada. The Portec site in Ca?on City is being expanded into a regional Center of Excellence.

The company is also seeing a positive development in Brazil. In November 2014, a framework contract was signed with the Brazilian Post together with a US system integrator that includes delivery of a total of six sorters between 2015 and 2017.

The EMEA region also recorded encouraging growth of 3.5% to CHF 210.2 million. Nevertheless, the individual European regions developed quite differently. In Central and South Europe, the business developed positively for the most part, whereas a temporary saturation in the area of internal logistics could be observed in Scandinavia in particular.

By recording sales of CHF 43.2 million, the Asia-Pacific region remained slightly behind last year's level (CHF 45.2 million) due to the fact that 2013 included the one-time order from Red Bull Thailand valued at around CHF 6.5 million. Interroll continued to pursue its growth strategy in this region in 2014 by opening its new Asian headquarters in Shanghai and by acquiring Pert Engineering in Shenzhen, China. The company expanded its customer base even further in China and received repeat orders from important customers such as the Chinese Post. This lead to an increase in sales of around 26%.

Results impacted by one-time strategic investments

Interroll made high strategic investments in long-term growth and sustainable profitability in 2014. Development costs, the introduction of the modular conveyor platform, but also the consolidation of plants in the USA as part of the Portec acquisition in 2013 and the new Center of Excellence in Atlanta had a one-time negative impact on the results of financial year 2014.

Nevertheless, earnings before interest, taxes, depreciation and amortisation (EBITDA) only decreased slightly to CHF 44.1 million compared to the previous year's figure of CHF 45.4 million (-2.8%). The EBITDA margin was 13.2% (2013: 14.3%). Amortisation for acquired customer values, patents and licenses increased to CHF 3.9 million in 2014 (2013: CHF 3.2 million). Portec’s assets were amortised for the complete financial year for the first time.

Earnings before interest and taxes (EBIT) decreased to CHF 25.4 million (2013: CHF 27.2 million). The EBIT margin declined from 8.6% in the previous year to 7.6%. Net profit decreased slightly to CHF 19.1 million by annual comparison (2013: CHF 20.5 million).

Keeping an eye on future growth

Interroll invested nearly CHF 17 million in future growth in 2014. Investments in tangible assets in the amount of CHF 15 million went mainly towards construction of the new regional Center of Excellence in Atlanta, the planned further development of the SAP project as well as the continuous renewal of Interroll's global infrastructure and machinery. CHF 1.4 million were invested in new companies. The Chinese company Pert Engineering acquired in September 2014 is already contributing to the profitable growth of the Group.

Strong free cash flow and solid balance sheet underpin sound financial situation

In the fourth quarter of 2014, sales increased by 15.3% compared to last year. Due to higher net current assets, operating cash flow decreased to CHF 27.8 million (2013: CHF 44.5 million). At CHF 12.0 million, free cash flow was considerably higher than the previous year's level of CHF 5.0 million. As a result, net financial assets improved further from CHF 20.2 million the previous year to CHF 23.9 million.

The balance sheet figures document the sustained financial stability of the Interroll Group. Equity increased by 7.0% to CHF 200.3 million as of 31 December 2014 (2013: CHF 187.2 million) and the balance sheet total reached CHF 278.2 million (2013: CHF 258.2 million.). The equity ratio was 72.0% at the end of 2014 (2013: 72.5%).

Nominal value reduction proposed

On 8 May 2015, the Board of Directors will propose a repayment of capital by means of a capital reduction through a nominal value reduction of CHF 9.00 per registered share to a par value of CHF 1.00 to the General Assembly instead of a dividend. A distribution out of reserves from capital contributions in the amount of CHF 8.80 per Interroll registered share was made in 2013.