Forbo op profit up on higher volumes, efficiency

20 March 2007 08:11  [Source: ICIS news]

SINGAPORE (ICIS news)--Swiss floor coverings, adhesives and beltings group Forbo on Tuesday reported a strong rise in its 2006 operating profit from a year ago on higher volumes and efficiency.

 

The company expected a further increase in its net sales this year and a better-than-average rise in profits.

 

Forbo’s earnings before interest and taxes (EBIT) soared to Swfr109.6m ($90.6m/€68.1m) in 2006 from Swfr23.9m a year ago.

 

A strong growth in volume coupled with measures to enhance efficiency and increase profit led to a significant improvement in profit margins.

 

Net sales rose 10.4% to Swfr1.9bn while net income at Swfr61.2m was almost four times higher than 2005.

 

Growth in all of its three divisions was driven by the robust US economy, dynamic expansion in Asia and an improved economic situation in Europe.

 

Linoleum and vinyl floor coverings sales were strong, boosting the operating profit before depreciation and amortisation (EBITDA) at its flooring division up by 11.6% to Swfr96.2m in 2006 from a year ago. Sales rose 6.3% to Swfr794.2m.

 

Operating profit for its bonding system division (adhesives) rose 34.7% to Swfr62.5m. Revenue was up 16.3% to Swfr731.1m partly due to the acquisition of the Chinese company Victa, a producer of hotmelts and water-based adhesives.

 

The movement system (belting) division almost doubled its operating profit to Swfr33.2m while sales rose 8.5% to Swfr354.2m. Better-than-average growth was generated in emerging markets Russia and China.

 

($1=Swfr1.21)

 

(€1=Swfr1.61)

By: Florence Tan
+65 6780 4359

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