Annual Report 2011 (5.07 MB, PDF-File) - Oerlikon

Business development
Oerlikon Textile delivered significantly improved profitability in
2011, producing a record EBIT margin of 9 %. All Business
Units generated strong sales growth and made a positive contribution
to the Segment’s profitability. The Segment’s EBIT of
CHF 183 million clearly reflects the positive impact of the operating
improvements made in all of its business locations (EBIT
2010: CHF 21 million). Sales at Oerlikon Textile rose by 23 %
from CHF 1 653 million to CHF 2 037 million. As expected, order
intake decreased to CHF 1 977 million after hitting a high of
CHF 2 509 million in 2010. This decrease was due to weaker
demand for natural fibers in the second half of the year, a development
fueled in part by higher prices for cotton. As the year
progressed, this portion of the market stabilized on a moderate
level. Demand in the manmade fiber sector remained steady at
a high level, primarily because of the rapid rise in Chinese domestic
demand stimulated by government policies encouraging
the switch-in to manmade fibers. Order backlog totaled
CHF 1 053 million (previous year’s level: CHF 1 197 million) and
the Segment’s order book now extends through 2014. All of
Oerlikon Textile’s production facilities are operating at near full
capacity as a result.
In regional terms, the primary drivers of growth were the
Chinese and Indian markets. The Segment also delivered
Key topics
Focus on Asia: At the end of 2011, Oerlikon Textile announced
that it would further concentrate its focus on Asia and
simplify its organization. The Segment, which has been doing
business in Asia for nearly 50 years, will intensify its market and
customer centricity in this most critically important region. The
refocusing of Oerlikon Textile involves three key elements:
Organizational streamlining by merging the five businesses
into three Business Units (BU) effective as of January 1, 2012:
Oerlikon Barmag and Oerlikon Neumag have been combined
to create the new Manmade Fibers BU. Oerlikon Schlafhorst
and Oerlikon Saurer have become the Natural Fibers BU. The
structure of the Textile Components BU was not affected by
the realignment. Branding will not change.
Outlook: slight profitability growth, slight sales decline
Oerlikon Textile achieved high sales in 2011 following very
strong order intake in 2010, a year in which customers caught
up on investments postponed during the financial crisis of
2008/2009. In 2012, Oerlikon Textile expects a softening of
overall market demand. The Segment anticipates continued
growth for Manmade Fibers, flat sales for Textile Components
and a decrease in sales for Natural Fibers. Textile expects sales
to slightly decline, whereas profitability should show a slight
improvement.
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growth in Europe, Turkey, South America and the United
States, while markets in the Middle East were broadly stable. In
China, the most important world textile market, Oerlikon is the
technological leader and one of the largest textile machine
manufacturer. The Chinese market accounted for 40 % of the
Segment’s total sales in 2011 remaining on the same level as
2010. Asia’s overall share totaled 68 % (2010: 64 %). Europe’s
was 15 % (2010: 15 %) and North America 7 % (2010: 11 %).
To further improve strategic positioning, the Segment continued
to fine-tune its range of products during the course of the
year. The Oerlikon Neumag Business Unit divested its Carding
business, where about 250 employees make special equipment
and components for nonwoven production, to the
Chinese Hi-Tech Group Corporation.
The Segment’s position as the industry’s technological leader
was further enhanced in 2011. At the world’s largest textile
trade fair, the ITMA, held in Barcelona in September, Oerlikon
Textile presented groundbreaking innovations, including seven
newly developed machines and more than 20 new components.
These innovations were characterized by lower energy
consumption, higher efficiency, flexibility and quality.
Relocation of Textile’s headquarters to Shanghai: Oerlikon
Textile executives, including the CEO and the CFO, will work
out of Shanghai. By the end of 2012, more than 40 % of all
senior management positions will be based at Oerlikon’s new
office there.
R&D investment in Germany and China: In 2012, Oerlikon
Textile will boost its R&D expenditures in Germany to about
CHF 60 million (around CHF 80 million around the world) and
expand R&D capacities in China.