ANNUAL REPORT

20
FInancIal year 2006 rePort
The year 2006 was influenced by
strong fluctuations in the prices of
precious metals. The overall increase
of prices had a positive impact on
the profitability of our business but it
lead to a substantial higher financing
demand for in process material. The
precious metal financing lines from
our major banking partners were
adapted to meet our needs.
The consolidated sales of the Metalor
Group, without the intrinsic value
of the precious metal, amounted
to CHF 290.5 million which is 17 %
higher than the previous year. The
operating result (EBIT) increased from
CHF 21.4 million to CHF 40.4 million
in 2006. The operating costs were CHF
7.6 million higher than the previous
year. This increase is mainly due to
bonus provisions as a result of the
good profitability of the company in
2006. Excluding this impact operating
costs remained on the same level as
in 2005. The net income of CHF 36.3
million includes a non-operating gain
of CHF 3.6 million which was mainly
generated by the sale of a part of our
own precious metals inventories and
a reversal of a restructuring provision
which was not fully utilised. As
previously mentioned higher metals
prices also led to a CHF 2.6 million
increase in interest cost from lease
lines. The vacant factory building in La
Chaux-de-Fonds was sold during the
year. Major investments were made
to further increase the security of our
sites in Neuchâtel and Marin.
• The Refining Division performed
well in all locations. After
restructuring the USA operations
were profitable in 2006. Overall the
division recorded 41 % more sales
than the previous year.
• The Advanced Coatings Division
performed above expectations
in sales and profitability. Lower
operating costs and improved
margins lead to above average
profitability. The restructuring of our
Italian activities were accomplished
at lower costs than provisioned in
the previous year.
• The Watch and Jewelry Division
increased its sales volume by
11 %. The profitability improved
to a satisfactory level and met
our expectations. A substantial
amount of business was generated
with orders not coming from the
traditional watch industry.
• The Electrotechnics Division
continued a strong growth in sales
and profitability. The turnover
increased by 19 % and the EBIT
reached 12 %. The Chinese
operation started manufacturing
operations.
In 2006 a dividend of CHF 2 000
per share (CHF 18.5 million in total)
was paid to the shareholders. The
shareholder’s equity at year-end 2006
amounted to CHF 352.3 million
or 67 % of the total balance sheet
value. A shareholding program for
key employees was implemented and
327 treasury shares were sold to 29
employees. The total number of shares
remains unchanged at 10 000.
The Board of Directors proposes a
dividend payment of CHF 2 500 per
share (CHF 23.8 million in total).
The Group has a net cash position of
CHF 25.5 million effective 31.12.2006.