Annual Report 2009 - Von Roll

Business development 11Von Roll Insulation:Varying development for high and low voltageThe business segment Von Roll Insulation reports sales for 2009 of CHF 355.3 million, a reductionof 33 % in comparison with the previous year (2008: CHF 526.2 million). Despite the fall in volume,the insulation business remains the main contributor to Group sales, with a share of 65 %. Orderintake decreased by 42 % to CHF 298.4 million (2008: CHF 514.9 million).During the first half of 2009, Von Roll recorded significantly lower demand from the economicallysensitive automotive and consumer goods industry. After many customers from these sectors hadestablished high inventories in the record year 2008, orders almost came to a standstill in 2009:Costs were reduced and both working capital and inventories were cut, which resulted first andforemost in a decline in sales for low-voltage products such as flexible materials and paint. Thereduced demand at Von Roll Insulation, however, remained below the values of the customer sectorswhere there were sometimes slumps in the market in excess of 50 %. In the second half of2009, many customers cut inventories, which, in combination with the more optimistic economicoutlook, led to a stabilisation in the low-voltage business. In particular, orders from the electronicsindustry in Asia began to pick up slowly.In the long cyclical business with high-voltage generators and traction engines, the demand remainedgenerally stable well into 2009. However, against the backdrop of the economic crisis,significant price pressure on major customers in the energy sector was noticeable, which had avery negative effect on sales. In addition, during the credit crunch as of the middle of 2009, investmentin major power station and wind farm projects were postponed. The fact that it was moredifficult for customers to obtain project financing resulted in a reduction in the order intake. On theother hand, the repairs business, in which Von Roll is particularly well positioned in Great Britainand Italy, benefited from the decreasing willingness to invest.The lower sales volume, as well as the trend towards more cost-effective alternatives within theproduct mix, had a negative effect on profitability. Accordingly, operating EBIT in the reporting periodfell to CHF 8.8 million, in comparison with CHF 48.4 million in the previous year.Von Roll Insulation: key figuresin CHF 1,000 20092008(restated)Net sales 355,324 526,229Gross margin 71,650 117,687– In % 20.2 22.4Operating EBIT 8,807 48,385Number of employeesIn the Von Roll Insulation segment 1,365 1,527