OREANDA-NEWS. The Belimo Group had a successful 2014. Sales rose in Swiss francs by 4.5 percent to CHF 493.9 million. Adjusted for currencies, the growth rate was 6.6 percent. In the second half-year, the Americas and Asia/Pacific performed particularly well, while growth in Europe slowed.

Belimo posted operating income (EBIT) of CHF 81.3 million and an operating margin of 16.5 percent. Net income totaled CHF 67.2 million, which equates to CHF 109.52 per share. Return on equity (ROE) was 22.2 percent and return on invested capital (ROIC) 23.4 percent. Cash flow from operating activities rose by 5.0 percent to CHF 74.1 million.

The new production, logistics and administration building in Danbury (CT, USA) became operational on schedule. In Hinwil, Belimo started the construction for the logistics building expansion. Because of these two important investments, free cash flow fell by 46.9 percent to CHF 18.5 million, while cash and cash equivalents dropped 11.6 percent to CHF 92.3 million.

The Board of Directors proposes a dividend of CHF 65 per share to the Annual General Meeting on Monday, April 20, 2015.

Regional development:
Europe. Sales in the European market region grew by 4.3 percent, or 5.0 percent on a currency-adjusted basis. Growth contribution was strong in the United Arab Emirates, France, Switzerland and Poland. The slowdown in the second half-year is primarily due to Austria and the Ukraine. The low price of oil caused a downturn in investments in alternative heating systems in Austria. Growth was strong for water applications in Europe thanks to new product solutions for zone applications and for hydraulic balancing of plants.

Americas. Sales in the Americas market region grew by 4.6 percent, or 8.3 percent on a currency-adjusted basis. Belimo recorded solid growth in all markets, with strong performance in the second half-year in particular. Projects such as the new office building "Rufus 2.0" in downtown Seattle (WA, USA) and the LEED Platinum Project "Torre Cosmopolitan" in Tijuana (Mexico) helped drive growth. Air applications saw solid growth thanks to the OEM business, which was made up primarily of air damper actuators.

Asia/Pacific. Sales in the Asia/Pacific market region grew by 5.1 percent, or 9.3 percent on a currency-adjusted basis. Belimo posted good growth in Australia and the Philippines thanks to major projects, including the "Governor Phillip Tower" in Sydney. South Korea, Malaysia and Singapore were below expectations, as was the contracting business in China.

Net sales by region

in CHF 1,000 2014 % Growth in local
currencies
 in % 		2013 %
Europe 270,359 55 5.0 259,303 55
Americas 170,914 35 8.3 163,461 35
Asia/Pacific 52,646 10 9.3 50,095 10
Group 493,919 100 6.6 472,859 100

Net sales by application

in CHF 1,000 2014 % Growth in local currencies
 in % 		2013 %
Air 299,330 61 6.1 287,584 61
Water 194,589 39 7.4 185,275 39
Total 493,919 100 6.6 472,859 100

Innovation. A major portion of the variable volumetric flow controllers were equipped with the wireless technology near field communication. Before the device is connected to electricity, all the key settings can be made with the convenience of a smartphone app. Belimo Energy Valves(TM) and electronic pressure-independent valves were given small diameters and a safety function. The largely redeveloped product range of fire protection actuators provides additional security in case of fire with a new, patented locking function. At the new Belimo building in Danbury (CT, USA) a much larger water laboratory was built, providing a very good infrastructure for developing valves and conducting quality control.

Outlook. The uncertainties in Eastern Europe and the drop in income from the oil and gas business are leading to noticeable cuts in investments in key regions. The strong economy and the increase in spending on construction should carry on in the United States. Despite the lower energy costs, investments in building automation and energy efficiency are likely to continue unabated. In Asia/Pacific there are potentials in China and India in particular, as spending on infrastructure in these countries continues. High growth rates are also expected for Indonesia and Thailand.

Belimo will see continued growth with new product ranges in fire protection and zone applications. Innovative customer solutions are being designed based on technological developments such as the Internet of Things.

The strong Swiss franc, as a consequence of the discontinuation of the minimum exchange rate against the Euro, has a major impact on Belimo's sales and profitability. Based on the selected scenario (EUR/CHF 1.05, USD/CHF 0.95) and the budgeted growth in sales volume, Belimo expects sales in Swiss francs to be at about the same level as in previous year, with a 2.0-2.5 percentage point decrease in EBIT margin. The goal is to maintain the successful growth strategy. Current investment projects will deliver the expansion of the logistics capacity needed to maintain growth, and work is continuing on optimizing procurement and production processes. The new logistics building in Hinwil will become operational in 2015, which will improve process efficiency in manufacturing and distribution.

In mid-year Dr. Jacques Sanche will hand over responsibility as CEO to Lars van der Haegen, head of Americas. This succession will help support Belimo's continuity of sustainable development.

Key figures of the Belimo Group for the 2014 financial year

in CHF 1,000 (unless indicated otherwise) 2014 2013 Change
in %
Net sales 493,919 472,859 4.5
Operating income (EBIT)
in percent of net sales 		81,250
16.5% 		81,318
17.2% 		-0.1
Net income
in percent of net sales 		67,193
13.6% 		62,609
13.2% 		7.3
Cash flow from operating activities
in percent of net sales 		74,080
15.0% 		70,574
14.9% 		5.0
Free cash flow
in percent of net sales 		18,546
3.8% 		34,921
7.4% 		-46.9
Earnings per share, in CHF 109.52 102.57 6.8
Dividend per share, in CHF 65* 65 0.0
Investments 55,141 36,676 50.3
Research and development
in percent of net sales 		32,415
6.6% 		30,573
6.5% 		6.0
Number of employees at December 31
(FTE's) 		1,388 1,314 5.6