Overall, the 2010 fiscal year has proved unsatisfactory from the operational point of view, since problems in the Healthcare Solutions division in Europe reduced net profit. Moreover, negative currency translation effects clearly lowered some of the results. “However, these facts should not be allowed to detract significantly from the general picture: considering our predominantly late-cycle business and the still demanding environment in 2010, Swisslog achieved good results in a number of respects,” CEO Remo Brunschwiler specifies the annual results.

For example, the Healthcare Solutions division posted a record order intake in local currency in North America. The Warehouse & Distribution Solutions division achieved considerable profitability improvements. Both divisions showed profitable growth in Asia, partly as a result of the further expansion of Swisslog’s presence in the growth market China. In the light goods technology area, additional projects were won and competences in this field significantly increased. Importantly, the financial situation of Swisslog remained consistently solid. A dividend payment of CHF 0.03 per share will therefore be proposed to the General Meeting, which is a rise over the two previous years. This is an expression of the sound financial base and the confidence in Swisslog’s further positive development.

Noted rise in profit at Warehouse & Distribution Solutions

In 2010, the division felt the effects of the continuing difficult economic situation in Europe. Order intake dropped to MCHF 382.5 (-5.3%, or -2.8% in constant currencies). Compared to the previous year, an increased number of small and medium-sized projects were added to three major orders from existing and new customers. Order backlog fell to MCHF 260.8 (-13.0%, or -5.2% in constant currencies) and net sales shrank to MCHF 396.8 (-4.0%, or -1.6% in constant currencies). The attractive Customer Support business, which was also affected by the crisis, recovered in 2010. “Simplicity”, the profitability improvement program introduced in the division in previous years, showed the desired impact. The increased EBIT of MCHF 18.9 (+25.2%) allowed the EBIT margin to grow from 3.7% in the past year to 4.8%.

Investments in the North American hospital sector picked up significantly over the course of the financial year, so that Healthcare Solutions achieved a record order intake in this region in local currency. However, this was not enough to make up for the decline in Europe: order intake slipped to MCHF 228.6 (-4.1%, +0.8% in constant currencies) and order backlog to MCHF 140.1(-4.5%, although +7.0% in constant currencies). Net sales fell to MCHF 218.0 (-7.9%, -3.1% in constant currencies) because of the lower order intake in late 2009 and early 2010. The division had problems in Europe, mainly in connection with the introduction of new functionalities in the Automated Guided Vehicles product line. Although most of the problem-ridden projects were stabilized in the course of 2010, this led to one-time additional costs of around MCHF 10. In combination with lower net sales, this substantially reduced EBIT, which came to MCHF 9.5 (2009: MCHF 22.0). The EBIT margin decreased to 4.4% (2009: 9.3%).

Lower net profit, robust equity 

As a result of this one-time effect, the Group’s EBIT fell from MCHF 28.4 to MCHF 20.1. The positive financial result of MCHF 0.4 (2009: MCHF -4.3) compensated to some extent for the lower EBIT, with income taxes remaining more or less constant at MCHF 6.9 (2009: MCHF 6.4). Net profit for 2010 reached MCHF 13.6 (2009: MCHF 17.7). The Group’s financial position continues to be solid. Equity was reduced to MCHF 152.7 (-5.3%) due to currency translation effects, but the equity ratio rose again, this year from 40.0% to 41.4%. Net cash dropped to MCHF 66.1 (31.12.2009: MCHF 104.3), primarily because of reduced advance payments from customers as measured on balance sheet date.

Optimistic outlook for 2011 

From the strategic point of view, Swisslog will benefit from an improved market position in light goods and drug management: in light goods logistics through the agreement with the Heron Group on the joint development and production of the SmartCarrier transport robot and the worldwide partnership with Hatteland on the innovative AutoStore bin storage solution, and in drug management logistics through the acquisition of Sabal Medical, whose mobile drug cabinet MedRover rounds off Swisslog’s existing portfolio. All these agreements were finalized in January 2011.

“Overall, we anticipate a more positive year. We expect markets to turn up again, and are reckoning on particularly good prospects for North America and Asia. Moreover, our results will no longer be charged by the one-time effect incurred in 2010,” Brunschwiler substantiates the friendly outlook. Swisslog expects a return to growth in order intake, a rise of 1-5% in net sales and an improved operating profit (EBIT) of MCHF 25-28 (based on current exchange rates).