Gurit achieves in 2011 double-digit sales growth and an EBIT margin of 9.0% in a tough market environment

• Net sales grow on a currency-adjusted basis 23.1% to CHF 344.7 million
• Operational EBIT grows 11.4% to CHF 27.6 million.; operational EBIT margin remains unchanged at 8.0%  
• Strong equity ratio of 53.5% at 31.12.2011
• Net cash flow from operating activities at weak CHF -2.5 million. reflecting working capital tie-up by Wind Energy customers
• Proposed distribution of CHF 15.00 per bearer share; exempt from with holding tax 

                        

Zurich/Switzerland, March 16, 2012. Gurit achieved net sales of CHF 344.7 million for the full year 2011. In reported Swiss francs this is an increase of 10.6%, at constant December 2011 translation rates a plus of 23.1%. On a currency and acquisition adjusted basis, net sales grew by 19.2%. The Group EBIT margin for the full year reached 9.0% and the operational EBIT margin excluding one-time effects 8.0%.

Growth momentum accelerates in tough market environment
As anticipated in the half-year report 2011, Gurit was able to gain momentum in the second half of the year. Growth was mainly driven by higher prepreg sales to Wind Energy customers in Europe and the Americas. Especially supported by strong demand for carbon fibre prepregs, this positive trend has for a first time since 2007 reversed the decline in prepreg sales. This product category suffered as the market penetration of customers using the so-called infusion technology to build rotor blades grew at the expense of prepreg applications. This positive sales development of the European and American prepreg business even more than compensated the rapid decline in demand for Wind Energy materials seen in Chi-na during the second semester of 2011 – a trend we believe will reverse again during 2012. The comprehensive core material product range – strategically ex-panded step by step since 2008 and now complete with the acquisition of Balseurop – also showed continued growth momentum. The balsa core material business supported Gurit’s revenue growth solidly. Gurit managed to increase the overall sales prices by almost 1%. Raw material cost grew, however, by about 3% in relation to net sales, reflecting fierce competition and price pressures, especially in the Wind Energy market.  

Operational EBIT margin maintained but operational cash flow negative
Gurit maintained its operational EBIT margin at 8.0%, unchanged over the prior year. On a Group EBIT level, Gurit recorded lower one-time income compared with 2010. The overall EBIT margin thus declined to 9.0% after 10.5% in 2010. Cash flow from operating activities was CHF -2.5 million in 2011. It was impacted by a credit and liquidity shortfall noticeable at almost all of the global Wind Energy customers, but most visible in China. The resulting expansion of trade working capital as a percentage of net sales from 21% in 2010 to 31% in 2011 left its marks on cash flow.

Investment in future positioning continued at high level in 2011
Gurit reduced the regular capital expenditures in 2011 to CHF 10.1 million, down from CHF 26.3 million in 2010. However, including the acquisition of Balseurop and an earn-out payment for the Tooling business of CHF 17.9 million in total, Gurit invested CHF 28 million in its future positioning.

Development by Market Area
Wind Energy sales grew by 39.7% on a currency adjusted basis and 24.1% in re-ported Swiss francs to CHF 196.7 million and accounted for 57.0% of Group sales. The growth momentum anticipated for the second half of 2011 materialised in the prepreg business in Europe and the Americas and more than compensated the significant market contraction in China during that same period. The operational EBIT margin achieved in the Wind Energy business in 2011 was below the Group’s operational EBIT margin. The results were impacted by raw material cost increases and weak prepreg sales in the first half-year and a market decline in the Chinese market coupled by fierce competition in the second semester. The working capital tie-up was very significant across the global Wind Energy customer base as most customers saw a profitability and liquidity shortfall in 2011.

Tooling sales grew by 11.9% on a currency adjusted basis and declined by 0.4% in reported Swiss francs to CHF 43.2 million. Tooling thus contributed 12.5% to Group sales. The achieved growth largely reflects the successful and well managed internationalisation of the global customer base as evidenced by sales to India, the USA and Africa.  The domestic market in China recorded weak sales throughout the year except for the second quarter 2011. The operational EBIT margin of Tooling recorded in 2011 was above the Group’s operational EBIT margin level but was affected by stronger investments into global project management and execution teams, to globally support the ongoing market penetration.

Transportation sales grew by 0.9% on a currency adjusted basis and declined by 5.7% in reported Swiss francs to CHF 51.9 million. This represents 15.0% of Gurit’s overall sales. Sales for rail applications in China and revenues generated with smaller aerospace customers suffered from delays during the year under review while sales recorded with key aerospace accounts rose in the upper single-digit percentage range and automotive sales grew, as well. The operational EBIT margin level of Transportation recorded in 2011 was below the Group’s operational EBIT margin level.

Marine sales contributed 15.1% to Group sales. Revenue grew by 8.1% on a cur-rency-adjusted basis and declined by 2.8% in reported Swiss francs to CHF 52.1 million, mainly backed by growth generated in the USA and Europe while sales in Australia declined because of the exchange rate development of the Australian dollar. In 2011, the operational EBIT margin level of the Marine business was be-low the Group’s operational EBIT margin level.

Outlook
In 2012, Gurit sees further organic grow potential across all market areas and plans to achieve an operational EBIT in the guidance range of 8-10%, again. The high volatility in the Wind Energy market makes it difficult to provide a net sales guidance for 2012. Uncertainty still stems primarily from the unclear timing of the Chinese wind energy market recovery from the severe hit it took during the past six months and the situation around the US Wind Energy subsidy renewal for 2013 and beyond.  

Proposed distribution of CHF 15.00 per bearer share out of reserves from capital contributions and thus exempt from withholding tax
Based on the solid balance sheet with an equity ratio of 53.5% (2010: 57.2%) at the end of 2011, the good EBIT result with a margin of 9.0% achieved in 2011, and a positive mid and longer term business outlook, the Board of Directors proposes to the Annual General Meeting of Shareholders of April 23, 2012 to pay out 31% (2011: 28%) of the net profit for 2011 through the distribution of CHF 15.00 per bearer share out of reserves from capital contributions. Such a distribution is exempt from withholding tax.  

Online publication of the Annual Report 2011
In parallel to this press release, Gurit has also published its Annual Report 2011 and the presentation slides discussing the year-end 2011 results in more detail online in the investor relations section of the Gurit website www.gurit.com at http://investors.gurit.com/publicationsdownloads.aspx.

Media/Analyst conference at SIX Swiss Exchange’s Convention Point and international Webcast today, 09:30 a.m. CET
Later today, Management will discuss the 2011 results at a joint media and analyst conference in Zurich, starting at 09:30 a.m. CET. The presentation will be in English. The conference will take place at SIX Swiss Exchange, Convention Point, Selnau Strasse 30, CH-8021 Zürich. The presentation will also be accessible as a webcast on http://investors.gurit.com/webcast.aspx where a recorded version will be archived, later.

Annual General Meeting of Shareholders
The Annual General Meeting of Shareholders will take place on April 23, 2012, at 16:30 CET at the Hotel Seesdamm Plaza, CH-8806 Pfäffikon SZ, Switzerland. The invitation to the Annual General Meeting is also available for download at http://investors.gurit.com/agm.aspx.

Key financial figures in CHF thousand	2010	2011	% change	Change at constant  2011 rates
Wind Energy	158'481	196'697	24.1%	39.7%
Tooling	43'381	43'216	-0.4%	11.9%
Transportation	54'972	51'859	-5.7%	0.9%
Marine	53'581	52'071	-2.8%	8.1%
Others	1'161	876	-24.5%	-15.4%
Total Net Sales	311'576	344'719	10.6%	23.1%
Operational EBIT	24'804	27'638	11.4%
Group EBIT	32'713	31'046	-5.1%
Profit for the period	24'930	22'340	-10.4%
Operating cash flow	16'312	-2'474	-115.2%
Investments in PPE	22'747	9'773	-57.0%
Tax rate (in %)	15.8%	22.5%	6.7 %-pts
Equity ratio (in %)	57.2%	53.5%	-3.7 %-pts

Financial Calendar 2012

April 23, 2012	16:30 CET	Annual General Meeting;  Seedamm Plaza, Pfäffikon SZ
	After trading hours	Sales Q1 2012, AGM resolutions
August 30, 2012	Before trading hours	Half-year results 2012, Media release, publication of Half-year report on www.gurit.com
	09:30 CET	Media/Analyst conference and webcast
October 26, 2012	After trading hours	Sales Q3 2012

Please consult the regularly updated financial calendar in the Investor Relations section on www.gurit.com.


For further information: Rudolf Hadorn, CEO Gurit Holding AG
Tel + 41 44 316 1560; Mobile: +41 79 601 6128; rudolf.hadorn@gurit.com  
 
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On Gurit: The companies of Gurit Holding AG, Wattwil/Switzerland, (SIX Swiss Exchange: GUR) are specialised on the development and manufacture of advanced composite materials and related technologies featuring bespoke physical and chemical characteristics. The comprehensive product range comprises fibre reinforced prepregs, structural core products (man-made materials and balsa wood), gelcoats, adhesives, resins and consumables as well as certain finished parts. Gurit supplies growth markets in Wind Energy, Tooling, Transportation, Marine, and Engineered Structures. The international Group has production sites and offices in Switzerland, Germany, the UK, Canada, Spain, Australia, New Zealand, the USA, Ecuador, India and China.