OC Oerlikon Management AG: Strong 2013 performance paves the way for future growth

Order intake grew by 3.2 %, sales remained at prior year level (-0.8 %). An EBIT margin of 12.7 % confirmed Oerlikon’s profitability level, which positions the Group amongst leading industrial peers. Oerlikon’s Manmade Fibers and Coating Segments delivered record margins and continued to operate on Best-in-Class levels. Strong operational performance and the proceeds from the divestments improved net liquidity to CHF 981 million (FY 2012: CHF 339 million) and equity ratio to 51 %. Oerlikon CEO Dr. Brice Koch said: “Based on strong performance in 2013, we can now accelerate profitable growth, both organically and inorganically, in line with a disciplined execution of our strategic agenda. The recent signing of the acquisition of Sulzer Metco is a first key milestone in this direction.”

Growth in orders, sales at prior year level
Order intake grew by 3.2 % to CHF 2 893 million compared to CHF 2 802 million in 2012, with all Segments, except the Advanced Technologies Segment, reporting higher orders. As expected, Group sales of CHF 2 883 million were at prior year’s level (-0.8 %, CHF 2 906 million). Sales increased in all Segments except the Drive Systems Segment. The regional sales split remained largely unchanged with Asia accounting for 44 % of the Group’s total sales, Europe for 34 % and North America for 17 % (others: 5 %).

Sustainable profitability levels
EBITDA amounted to CHF 492 million compared to CHF 508 million on a like-for-like basis a year ago (2012 reported: CHF 547 million), resulting in an EBITDA margin of 17.1 %. EBIT amounted to CHF 366 million compared to CHF 382 million on a like-for-like basis a year ago (2012 reported: CHF 421 million). The EBIT margin of 12.7 % confirmed Oerlikon’s position among leading industrial peers, resulting from a strong underlying performance, leading technology positions and a broad market exposure.

The result from continuing operations grew by 18.8 % to CHF 259 million compared to CHF 218 million a year ago. Including various non-cash, accounting effects from the divestments in 2013, net income was CHF 201 million (FY 2012: CHF 380 million).

2013 Group performance resulted in further improved value creation with an increase in the return on capital employed (ROCE) to 17.7 % (FY 2012: 17.4 % like-for-like, excluding the one-time effect from the Arbon property sale. Reported ROCE 2012: 19.7 %).

Continued portfolio shaping
In mid-2013, Oerlikon closed the sale of the natural fibers businesses, completing a strategic milestone in shaping and better balancing the portfolio. On January 31, 2014, Oerlikon announced an agreement to acquire Metco, a division of Sulzer AG. The combination of Metco with Oerlikon's existing Coating Segment will form the world technology leader in Surface Solutions. Closing is subject to the approval of merger control and is expected in the third quarter of 2014.

Ongoing strong investments in R&D
Investments in research and development (R&D) continued to be strong, increasing by 15.1 % from CHF 106 million to CHF 122 million. With this Oerlikon invests 4 % of its revenues in products and services of the future. Consequently, 2013 saw the launch of groundbreaking new technologies and services such as the new coating generation “BALIQ” with unique characteristics of extreme smoothness and hardness at the same time. The Manmade Fibers Segment also introduced the new S+ Bulked Continuous Fiber (BCF) machine for the efficient production of polymer filament yarns for carpet applications with an increase in productivity of 25 %.

Further strengthened financial position
A strong operational performance in 2013 and proceeds from portfolio adjustments further strengthened Oerlikon’s financial position. As at the reporting date, the Group had equity (attributable to shareholders of the parent) of CHF 2 072 million, increasing the equity ratio to 51 % compared with 45 % at the end of 2012. Net liquidity grew to CHF 981 million (FY 2012: CHF 339 million).

Q4 performance – record EBIT, growth in order intake and sales
For Q4 2013 the Oerlikon Group reported a record profitability with an EBIT of CHF 104 million, up 16.9 % compared to CHF 89 million a year ago. EBIT margin of 14.0 % was significantly above prior year’s level of 12.8 %. This result was mainly driven by a strong performance in the Manmade Fibers and Coating Segments.

Group order intake increased by 11.2 % to CHF 705 million (Q4 2012: CHF 634 million). Sales in Q4 2013 grew by 7.2 % to CHF 743 million compared to CHF 693 million in Q4 2012.

Dividend proposal
In line with the dividend policy introduced in 2011, the Board of Directors of Oerlikon will propose an increased dividend of CHF 0.27 per share to the Annual General Meeting of Shareholders on April 15, 2014, the second consecutive increase and up 8 % compared to fiscal year 2012. The dividend will be distributed from the reserve from capital contribution.

Media contact:
Burkhard Boendel Phone: 058 360 96 02 Fax: 058 360 98 02

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