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Forbo Holding AG / Key word(s): Annual Results MEDIA RELEASE The Forbo Group – a leading producer of floor coverings, building and construction adhesives, as well as power transmission and conveyor belt solutions – reported net sales of CHF 1,293 million for the business year 2022. This corresponds to growth of 8% in local currencies (+3% in the corporate currency). For the 2022 business year, management expects EBIT to come in at CHF 131 million (including one-time impacts of CHF 20 million), with a Group profit of CHF 101 million and a significantly lower free cash flow of slightly below CHF 50 million. Publication of the financial statements and Annual Report is set for March 2, 2023. The targeted implementation of strategic projects and initiatives which is already underway, along with the simplification of structures, will enable Forbo to meet the current challenges and ensure the sustainable success of the company. Baar, January 17, 2023 Forbo looks back on a mixed year. After the first half-year 2022 in which sales and earnings were more or less in line with expectations despite the various challenges faced, business performance proceeded to decline strongly in the second half of 2022. Significant drop in demand and associated decline in volumes from late summer 2022 Following the ongoing revival of the markets in 2021 and early 2022, demand dropped from the late summer 2022. This development reinforced during the fourth quarter of 2022, which led to an unexpectedly strong decline in volumes in the second half-year of 6% in contrast to growth of 3% in the first half of the year. For the 2022 year overall, this equates to a decrease in volume of 3%. Delayed reaction to declining volumes and significant rise in cost structure resulted in strong reduction in EBIT and margins From the late summer of 2022, this significantly higher cost basis was set against an increasingly strong decline in volumes, which combined to result in a significantly lower EBIT. At the same time, costs for raw materials, energy and logistics continued to rise. However, it was largely possible to offset these increases – albeit with a delay in project business – thanks to innovative, high-quality products and services with corresponding sales price rises. Group EBIT is expected to come in at CHF 131 million. Higher sales prices had a positive effect on the result, as did the initiatives taken in the second half of 2022 to effect increases in earnings. It was negatively affected by the lower volumes and sharp increase in the cost basis, along with one-time impacts. Group profit will be CHF 101 million, by no meaningful change in the tax rate. The drop in free cash flow to slightly below CHF 50 million can be attributed to the reduced profit and the increase in operating working capital. For its rise there were several reasons: higher trade receivables; the significant increase in the value of the inventories caused by higher purchase and manufacturing costs; challenges related to sales and production planning, and the increase in safety stock held to counter bottlenecks in the supply chain. EBIT was negatively affected by one-time impacts totaling CHF 20 million. Due to the political and economic situation in Russia, local impairments were made mainly on goodwill and property, plant, and equipment. Added to this, there were the costs of structural adjustments and various items affecting operating expenses and revenues, including, among others, the creation of provisions for various legal cases. Range of tough challenges Despite these measures, due to the general economic situation Forbo is expecting the first half of 2023 to be a demanding period with declining volumes in comparison to the first half of 2022, significantly higher workforce costs and further inflation-related cost increases. This E. Schneider, Executive Chairman, says: “In the first half of 2022, based on the continuing positive growth of volumes at the time, we intensified our investments in markets and sales activities and the expansion of operating structures and personnel. When the market abruptly weakened in the late summer of 2022, we reacted with a delay by taking the necessary measures, which further impacted the earnings position in the second half of 2022. Forbo will continue to pursue the successful strategy of recent years. We have an attractive and innovative product portfolio in both divisions. We are continuing to invest in line with strategy in our range of products and services, in growth markets, in digitization, and in new production technologies and enhancements – combined as always with an improved carbon footprint and increased efficiency.” Priorities for 2023 Based on the measures taken and a solid and healthy financial foundation, Forbo is well positioned to meet the challenges that lie ahead and ensure the sustainable success of the company. Forbo will provide further details of its performance in 2022 with the publication of the annual results and the Annual Report on March 2, 2023. Forbo is a leading producer of floor coverings, building and construction adhesives, as well as power transmission and conveyor belt solutions. Forbo’s linoleum floor coverings are made from natural raw materials. They are biodegradable and carbon-neutral (cradle to gate), without off-setting. In the manufacture of its heterogenous vinyl floor coverings, Forbo uses phthalate-free plasticizers of the latest generation. Vinyl floor coverings also contain up to 25% recycled material in relation to their total product weight. The BioBelt™ is a biologically degradable conveyor belt made largely from renewable, plant-based materials. The AmpMiser™ conveyor belt enables energy savings and therefore also a reduction in CO2 emissions of up to 50%. Forbo employs about 5,400 people and has an international network of 25 sites with production and distribution, 6 fabrication centers, and 49 sales organizations in a total of 39 countries around the world. The company generated net sales of CHF 1,293 million in the business year 2022. Forbo is headquartered in Baar in the canton of Zug, Switzerland. Contact person: End of Inside Information |
| Language: | English |
| Company: | Forbo Holding AG |
| Lindenstrasse 8 | |
| 6341 Baar | |
| Switzerland | |
| Phone: | +41 58 787 25 25 |
| Fax: | +41 58 787 25 20 |
| E-mail: | info@forbo.com |
| Internet: | www.forbo.com |
| ISIN: | CH0003541510 |
| Valor: | 354151 |
| Listed: | SIX Swiss Exchange |
| EQS News ID: | 1536401 |
| End of Announcement | EQS News Service |
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1536401 17-Jan-2023 CET/CEST
