Half Year Report 2008

In the first half of 2008 HUBER+SUHNER posted again significantly higher results, expanding its position particularly in the low frequency technology business and fiber optics and recording above average growth rates in the railway, automotive and solar energy market segments.

With sales up 13.8% in local currency terms, HUBER+SUHNER remained on track for solid growth. Currency effects and portfolio adjustments reduced the growth rate reported in Swiss francs to 6.6% compared to the first half of 2007. While sales totalled CHF 386.9 million, order intake dropped just below the previous-year level (0.8%) to CHF 406.0 million, which is still above the figure for sales and reflects the ongoing positive business performance.

Increased prices for raw materials and changes in the product mix put pressure on the gross margin, but this was more than offset by growth and rationalisation measures. Overall, the first half of 2008 closed with a slightly higher gross margin of 37.9% (previous year 37.6%). The period under review saw operating profit (EBIT) rise by a pleasing 14.3% to CHF 53.5 million, resulting in an EBIT margin of 13.8%. Even discounting the one-off earnings of around CHF 8 million, generated primarily by the sale of the BERKOL business unit in January 2008, the EBIT margin reached a healthy 11.8%.

Mainly due to the recalculation of balance sheet positions in foreign currencies, the company recorded currency losses of approximately CHF 10 million compared to currency gains of around CHF 5 million in the previous-year period. As a result, the net income was slightly lower despite the higher operating profit. At CHF 35.6 million, after-tax earnings were CHF 6.7 million lower year-on-year. HUBER+SUHNER expects to close 2008 with sales in the order of CHF 760 million and a further increase in operating profit compared to 2007.