Sales growth of core markets and in the USA
Sales reported in Schaffner's core markets exceeded those of the previous year by 2%. The automotive electronics sector reported the strongest growth, with sales rising 25%. Growth in the core market of railway technology was also up by 16% due to strong demand in the USA and China, with the decline in demand in Europe the only factor preventing even better results. Sales with components for energy-efficient drive systems were also up a solid 10%, driven primarily by the market success of power quality solutions. Renewable energy was the only sector to register a decline in sales, which fell by 40% as a result of the cost-driven substitution of EMC filters in solar inverters for installations in China and a drop in demand from the European photovoltaic sector. Following the previous year's acquisition of the US company Trenco, the share of sales contributed by North America increased to 21% (16%). This resulted in a slight reduction in Asia's contribution to sales to 35% (37%), while that of Europe declined to 44% (47%), which was also currency-related.
Performance of the divisions
Sales of the EMC division declined by 13% to CHF 46.7 million (CHF 53.7 million). This was largely the result of the decline in value of the EUR and the fall in demand from the Chinese photovoltaic industry. The share of sales contributed by the EMC division fell to 46% (52%). The segment result declined to CHF 3.5 million (CHF 7.2 million) due to lower volumes and exchange rate reasons. The segment operating margin came to 7.4% (13.5%). The EMC division reported new orders worth CHF 49.0 million (CHF 55.1 million) in the first half of fiscal 2014/15, which was mainly thanks to the success of power quality solutions, resulting in a book-to-bill ratio of 1.05 (1.03).
The Power Magnetic division (PM) increased sales by 8% to CHF 33.2 million (CHF 30.8 million) in the first half of fiscal 2014/15, contributing 32% (30%) to the Group's net sales. Growth stemmed from the integration of the US company Trenco, which was acquired at the end of March 2014. In organic terms, segment sales remained below those of the previous year as a consequence of the depreciation of the euro and yen (JPY) and the suspension of rail technology orders from Russia to a European customer of Schaffner. The segment result amounted to CHF 1.3 million (CHF 1.7 million) and the profit margin to 3.9% (5.6%). New orders totaled CHF 31.5 million (CHF 35.5 million), resulting in a book-to-bill ratio of 0.95 (1.15).
The Automotive division (AM) increased sales by 25% to CHF 22.6 million (CHF 18.1 million) and its share of sales to 22% (18%). The segment result multiplied to CHF 2.8 million (CHF 0.6 million). In the first half of fiscal 2014/15, AM generated a record high operating margin of 12.3% (3.3%), while new orders totaled CHF 21.0 million (CHF 18.2 million), resulting in a book-to-bill ratio of 0.93 (1.0).
Sound financing structure
As at the reporting date of 31 March 2015, Schaffner held total assets of CHF 148.6 million (30 September 2014: CHF 154.5 million), net working capital of CHF 33.5 million (CHF 30.6 million), net debt of CHF 21.7 million (CHF 16.6 million) and a gearing ratio (ratio of net debt to shareholders' equity) of 37% (25%). Free cash flow amounted to CHF -2.8 million (CHF -2.2 million). With shareholders' equity of CHF 59.2 million (CHF 66.6 million), at 40% (43%) the equity ratio is within the target range even after the dividend payout, a negative reassessment of Schaffner's pension obligations and the negative influence of currency turbulence. Shareholders' equity per share totaled CHF 93.16 (CHF 104.80).
The Board of Directors and management are continuing to consistently implement the growth strategy of the Schaffner Group. The focus will be on Power Quality applications, the expansion of Power Magnetics' market position, and the regional expansion in the North American market while continuously reviewing and adaptating structures and processes. Schaffner is targeting sequential growth in sales and operating profits in each division in the second half of fiscal 2014/15 compared with the first half-year. In the absence of any major change in the economies or currencies of its relevant markets Schaffner continues to expect to report for the current fiscal year consolidated net sales that are roughly in line with those of the previous year and an EBIT margin of around 5%.
The full 2014/15 Half-Year Report is available at:
The webcast presentation of the first-half results for fiscal 2014/15 will be available from 10.00 a.m. on 12 May 2015 at the following link:
Conference Call on 12 May 2015 at 10.00 a.m.
Dial the following number 10 to 15 minutes before the scheduled start of the conference call:
Europe +41 (0)58 310 50 00 / UK +44 (0)203 059 58 62 / USA +1 (1)631 570 5613
Luterbach, 12 May 2015
in CHF '000
Net sales EMC division
Segment profit EMC division
Net sales Power Magnetics division
Segment profit/(loss) Power Magnetics division
Net sales Automotive division
Segment profit/(loss) Automotive division
Operating profit (EBIT)
in % of net sales
in % of net sales
Earnings per share in CHF
Free Cash flow
Net working capital
Gearing in %
Equity ratio in %
Shareholders' equity per share in CHF
8 December 2015
Publication of Annual Report 2014/15 (full-year results)
12 January 2016
20th Annual General Meeting