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Local residents in Cham give clear backing to development at the Papieri site
Net profit for the year of CHF 8.6 million and payment of a dividend of CHF 4.00 per share
The Cham Paper Group enjoyed a largely pleasing financial year in 2016. The Group has returned to growth following a lengthy and challenging period of transformation for the paper division, achieving EBIT at the lower end of its target margin range for the first time. The paper division benefited from efficiency improvements in production and from a return to normal raw material prices in what was a slightly weaker market environment. The clear backing from voters in Cham to the redevelopment of the Papieri site proved key to activities in the real estate division. A planning process that had lasted over four years was thus brought to a successful conclusion, paving the way for the creation of the town's new quarter.
The Cham Paper Group increased revenue by 2.1% to CHF 198.4 million in 2016 (previous year: CHF 194.3 million), achieving growth for the first time in five years. Even more pleasing were the 46% increase in gross profit, which rose from CHF 18.1 million to CHF 26.3 million, and the marked rise in operating profit (EBIT) to CHF 10.5 million (previous year: CHF 2.4 million). The Group generated a net profit for the year of CHF 8.6 million (previous year: CHF 0.5 million).
Paper division enjoys major improvement in results
After 2015, which was challenging in a number of respects, the 2016 financial year proved distinctly kinder despite a weaker market environment. Operating workflows stabilised following the end of many years of transformation and raw material prices returned to normal levels, enabling a slight increase in revenue to CHF 196.9 million (previous year: CHF 193.4 million) and a significant improvement in operating profit (EBIT) to CHF 9.9 million (previous year: CHF 0.7 million before the release of restructuring provisions). This equates to a return on sales of 5.1%, within the target EBIT margin range of 5-12%.
The efficiency improvements made by concentrating production in Italy and a further fall in fixed costs mean that the mills are now in a sound position. Initial results from the measures to optimise processes on the extensively modernised production systems are also coming through and are sending out positive signals for the future of the paper business. Innovations and efficiency gains will continue to enhance the competitiveness of Cham Paper Group's solutions in 2017 as well.
Real estate division on track
The development plan for the Papieri site was completed. Following the preliminary review by the cantonal offices, the planning dossiers were made public in the spring. On 25 September 2016, voters in the municipality of Cham approved the development plan and the associated partial change to the building regulations and the zoning plan. This marked the end of a planning phase which had lasted over four years and in which the authorities and residents of Cham had been actively involved.
In October, Specialized became the first company to move into the renovated former workshop building as a permanent commercial tenant, ensuring a steady rise in rental income together with the more than 70 other tenants making interim use of the site. This pushed the real estate division's revenue up by 64% to CHF 2.3 million in the year under review (previous year: CHF 0.8 million). This also includes the sale of a relatively small building from the portfolio for just over CHF 0.5 million. The division's operating profit (EBIT) came to CHF 769,000 (previous year: CHF 244,000).
Balance sheet remains strong
The Cham Paper Group still has a healthy balance sheet. Concentrating production in Italy enabled inventories to be cut by 20%, reducing total assets and liabilities. The investment made in the conversion of the workshop building in Cham increased the value of the Group's tangible fixed assets by nearly 4%. The equity ratio amounted to 55.4% at the end of the year (end of 2015: 50.6%) and the Group held cash and cash equivalents totalling CHF 42 million. The site in Cham is currently still valued at acquisition cost.
The Cham Paper Group's healthy operating profit means that it can propose a higher payout to its shareholders. The intention is to increase the dividend from CHF 3 (2015) to CHF 4 per share, once again to be paid in the form of a distribution from capital reserves, which will be tax-free for private investors. The Board of Directors will also propose to the General Meeting of Shareholders that all its members be re-elected.
Positive outlook across all divisions
The Board of Directors and the Executive Board believe that the Group has a bright future. The paper division will be in a position to generate additional growth over the next few years. Leveraging potential efficiency and productivity gains should ensure that profitability remains at between 5 and 12% of EBIT margin over the long term, i.e. within the target range previously announced. The real estate division will be implementing the first phase of its construction project in 2017, which will deliver a significant increase in rental income from 2020 onwards.
Annual Report 2016
The complete annual report (in German) is available on our website in the Investor Relations section (see «Financial Reports») or directly under the following link:
in KCHF, unless otherwise specified 2016 2015
Sales in tonnes 150,408 146,274
Net revenue 198,365 194,258
EBITDA 18,704 9,187
As a % of net revenue 9.4% 4.7%
EBIT before restructuring 10'498 627
As a % of net revenue 5.3% 0.3%
Restructuring income / (restructuring expenses) 0 1,795
EBIT after restructuring 10,498 2,422
Profit 8,590 480
Earnings per share (in CHF) 11.53 0.65
Dividend (in CHF) 4.00 3.00
Free Cash Flow 6,676 -5,695
Shareholders' equity 108,118 102,088
As a % of total assets 55.4% 50.6%
(Net debt) / Net cash 3,248 -1,432
Investments in tangible and intangible assets 11,603 12,073
Number of employees (FTE) 375 389
A media and analyst conference will take place in the SIX Convention Point in Zurich today, 27 March 2017, at 9:30.
For information, please contact
Media and IR office Cham Paper Group Holding AG
Edwin van der Geest
E-Mail: firstname.lastname@example.org or email@example.com
Phone +41 43 268 32 32 / +41 79 330 55 22
Cham Paper Group
The Cham Paper Group is a leading manufacturer of coated speciality papers. Surface finishing lends papers properties that generate value added for its customers. The company, which was founded in 1657, has three sites, one in Switzerland (Cham) and two in Italy (Carmignano and Condino), and a global sales network.
The decision to focus on development and sales and discontinue paper manufacturing in Switzerland has made way for a new project on the factory site in the centre of Cham. The Cham Paper Group is developing an eleven-hectare quarter there, called the Papieri site.
The Cham Paper Group (stock exchange symbol: CPGN) is listed on Switzerland's SIX Swiss Exchange.
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