Orell Füssli reports significantly lower profits in the first half of the year
The conglomerate Orell Füssli saw a slight decline in revenue in the first half of 2017 and also reported significantly lower profits. Revenue fell by 5.4 percent to 131.9 million Swiss francs. However, Orell Füssli’s net profit was more than 40 percent lower than a year ago.
In the first half of 2016, the profit was still 5 million Swiss francs. As of the end of June 2017, it now stands at 2.9 million Swiss francs, as the company, which is active in book retailing, banknote printing, industry and publishing, announced on Monday. The operating result slumped by almost 60 percent in the first six months of 2017 to 3.2 million Swiss francs. Atlantic Zeiser, the plant manufacturer, was mainly responsible for this, the letter to shareholders said.
Change at Atlantic Zeiser
Atlantic Zeiser manufactures, among other things, machines for printing serial numbers on banknotes or passports and slipped into the red in the first half of the year. With sales down 38 percent to 23.6 million Swiss francs, the operating loss amounted to 1.6 million Swiss francs. In the same period last year, the operating profit was still 1.8 million francs.
Manfred Minich, Head of Atlantic Zeiser, will leave the company in August to pursue a new professional challenge, according to a media release. Until a successor is appointed, Group CEO Martin Buyle will assume interim responsibility. In addition, Daniel Broger, previously head of strategic projects, will be appointed to the Executive Board with immediate effect. He will be responsible for corporate development there.
In security printing, by far the most important division, Orell Füssli achieved a significant increase in sales in the first half of the year, with an increase of over 16% to CHF 64 million. However, the operating result declined by over 8% to CHF 7.8 million.
Book trade expands losses
Things are still not going well in the book trade. Following an operating loss of already 0.7 million Swiss francs in the previous year, losses widened to 1.8 million Swiss francs in the first half of 2017. At 39.2 million Swiss francs, sales were 6% below the previous year's figure. Orell Füssli mentions the absence of extraordinary income from the restructuring of the branch portfolio and the migration of purchases to the euro zone due to the exchange rate situation. By contrast, sales figures for e-books showed double-digit growth.
The publishers achieved 12 percent higher sales of 5.1 million Swiss francs in the first half of 2017. The increase came mainly from the non-fiction sector, while learning media, legal media and children's books were on a par with the previous year.
In the letter to shareholders, Group CEO Buyle describes the first half of the year as challenging. The second half of the year will be dominated by catching up on backlogs from the first six months. For 2017, Orell Füssli expects overall results to be in the order of the previous year's level, according to the statement. Atlantic Zeiser's goal for the second half of the year is to significantly increase net sales in all business units and generate a clearly positive result. Security Printing will continue to work on increasing productivity and reducing scrap costs, he added. Provided that Christmas business is good, the book retailing business, adjusted for special effects, is expected to achieve results comparable to those of the previous year. (SDA)
