The continued and sharp deterioration in currencies relevant to Swisslog (primarily the dollar and the euro) versus the franc has left its mark on the half-year result: while in local currencies all key figures in the income statement improved versus the same period last year, this is no longer the case for the reporting currency. “In light of this, it is pleasing to note that order intake and order backlog for the Group also grew in francs,” emphasizes CEO Remo Brunschwiler. “Moreover, the higher order backlog will allow us to significantly grow net sales in the second half.”

Order intake for the Group rose to MCHF 385.3 (+11.6% compared to the same period last year, +25.4% in constant currencies) and order backlog to MCHF 486.0 (+2.3%, +15.8% in constant currencies). Net sales fell to MCHF 271.0 (-10.9%, +0.4% in constant currencies). Besides the currency effect, this was due to a delay in the commissioning of several projects for new distribution centers. Operating profit (EBIT) increased to MCHF 6.6 (+15.8%, +49.1% in constant currencies), resulting in net profit of MCHF 3.2 (+6.7%, +53.3% in constant currencies).

Improved EBIT at Healthcare Solutions

The impact of the weaker dollar is especially noticeable in the Healthcare Solutions division, which conducts the bulk of its business in this currency area. While results in the local currency are consistently better than in the previous year, a mixed picture shows in the reporting currency: order intake in the first half of 2011 fell to MCHF 101.0 (-6.3%, +9.6% in constant currencies), while order backlog as at 30 June 2011 declined to MCHF 124.4 (-16.4%, +2.2% in constant currencies). Net sales remained unchanged at MCHF 105.4 (+0.2%, +17.2% in constant currencies). In contrast, EBIT increased to MCHF 6.1 (+144.0%, +208.0% in constant currencies), primarily due to lower additional costs compared to the same period last year for resolving problem-ridden projects in Europe. Accordingly, the EBIT margin increased to 5.8% (first half-year 2010: 2.4%).

Higher order intake, lower net sales at Warehouse & Distribution Solutions

The Warehouse & Distribution Solutions division increased order intake to MCHF 284.3 (+19.7%, +32.7% in constant currencies) and order backlog to MCHF 361.6 (+10.8%, +22.0% in constant currencies). Net sales fell due to the reasons mentioned above (delayed order intake, currency effect) to MCHF 165.7 (-16.8%, -8.4% in constant currencies), leading to a lower EBIT of MCHF 5.2 (-31.6%, -26.3% in constant currencies). The margin declined to 3.1% (first half-year 2010: 3.8%).

Solid financial situation

The net financial result (MCHF 0.0) changed only slightly compared with the same period last year (MCHF 0.4), while income taxes (MCHF 3.1) remained the same. The Group’s financial situation shows the familiar solid picture. The equity ratio declined slightly to 38.3% (31.12.2010: 41.4%) due to currency translation effects. Net cash fell to MCHF 29.9 (31.12.2010: MCHF 66.1), but this is primarily due to reduced advance payments from customers as measured on balance sheet date.

Better second half-year, exchange rates reduce result

Brunschwiler looks forward to a better second half-year. “In view of the Swisslog Group’s higher order backlog and progress made with project corrections at Healthcare Solutions Europe, we anticipate an improved second half, both in terms of net sales and EBIT.” Due to the exchange rate developments in particular and in view of the delayed order intake, the outlook given in March 2011 for the current business year has been revised as follows: Swisslog expects order intake to remain on a par with the prior-year level (instead of a return to growth); net sales are anticipated to fall by approx. 5-10% (instead of 1-5% growth) and for EBIT a target range of MCHF 17-20 is expected (instead of MCHF 25-28) – barring any unforeseen events.