Orell Füssli AG / Key word(s): Annual Results
Ad-hoc press release
Orell Füssli AG boosts profitability and increases dividend
Orell Füssli's strategy focuses on business areas that build on the security and education growth markets. The central elements are its expertise in security technology and important relationships with governmental institutions. The Group's focus is on the increased connection between physical and digital value documents, IDs and certificates, and their protection against misuse and forgery. With the acquisition of a majority stake in Procivis AG and the acquisition of Inspectron, in 2021 Orell Füssli further strengthened its technology portfolio and its market position in the area of e-government, identification systems and serialisation solutions for the security printing industry. The investment by Orell Füssli Thalia AG in the Evrlearn AG education platform has allowed the Book Retailing business segment to consolidate its expertise and leading market position in the strategically important segment of digital education. With the acquisition of Lehmanns Media AG, Delivros Orell Füssli AG, which focuses on the procurement, distribution and use of print and electronic media for business customers, further expanded its position in the Swiss B2B market.
Due to the strong digital focus of the Group's future structure, in 2021 the Board of Directors created a Digital Committee to support the Executive Board with acquisitions and the development of new digital business models. The Digital Committee is led by Dr Luka Müller, a member of the Board of Directors.
Security Printing generated revenue of CHF 73.8 million in 2021 (previous year: CHF 87.3 million), a decline of 15.4% compared with the previous year. The decrease in revenue is due in particular to the high proportion of export business with less complex banknotes that generate less added value. The operating result (EBIT) climbed to CHF 6.1 million (previous year: CHF 5.5 million). The improved EBIT margin reflects general efficiency improvement measures and a higher share of revenue in the high-margin ID document business.
Despite the difficult conditions in 2021, Security Printing managed to gain several new clients. These include an important project order for visa documents in Africa. Major investment (CHF 5.1 million) in new production systems was made in the year under review. Security Printing put a new generation of modern printing machines into operation that will enable it to further solidify its position as a leading and innovative quality supplier. The order backlog as of the end of 2021 ensures good capacity utilisation in 2022. Consequently, Orell Füssli expects a slight increase in revenue and a further increase in operating profit in Security Printing in 2022.
At CHF 25.3 million, the business segment generated revenue in 2021 slightly above the previous year and increased its operating result (EBIT) to CHF 5.5 million (previous year: CHF 5.3 million). This includes profit from the sale of a building in the UK of CHF 0.6 million. This corresponds to an EBIT margin of 21.9%. Thus, the business was stabilised at a high level.
Zeiser defended its position as the world's leading provider of serialisation solutions in the security printing industry in 2021. A significant individual order for numbering systems placed by one of Asia's biggest banknote printers ensured high capacity utilisation in the year under review. Nevertheless, Zeiser sensed a certain reluctance in terms of new client investments. In particular, the business with systems for digitally printed security documents suffered from supply bottlenecks at semiconductor manufacturers. Sales of passport printing systems, on the other hand, showed satisfactory development thanks to system upgrades and orders for spare parts. In addition, in 2021 Zeiser acquired leading technology in the area of document inspection and track & trace solutions for security printing from the UK's Inspectron and its US subsidiary. In addition, a service business with long-standing clients in the US was also acquired. The construction and on-time move at the end of 2021 to a new building in Emmingen, Germany, built in accordance with the latest environmental standards, represented a milestone for Zeiser. Zeiser is confident that revenue will grow in the current year due to the good order backlog and the expansion of the portfolio to include new technologies and service agreements, as well as the increasing number of enquiries.
With total revenue in 2021 of CHF 206.6 million (previous year: CHF 192.4 million), Orell Füssli Thalia AG performed well in 2021 and posted a good financial year, despite the closure for several weeks of all its branches. Its broad-based omnichannel strategy thus proved itself in yet another year of the pandemic. Revenue in the Book Retailing business segment, which is proportionately consolidated by Orell Füssli AG, amounted to CHF 103.3 million in 2021, an increase of 7.4% over the previous year (CHF 96.2 million). The proportionately consolidated operating result (EBIT) also improved year-on-year to CHF 7.5 million (previous year: CHF 5.5 million).
Book Retailing saw revenue growth in its brick-and-mortar and digital and online mail order businesses of 8.0% and 4.7%, respectively. The business customer segment, which provides schools, companies, government agencies and libraries with specialist literature, saw the most growth in 2021, with an increase of about 14.8%. Its offerings expanded further with the acquisition of Lehmanns Media AG in October 2021. Orell Füssli Thalia AG's shop development activities continue to focus on sites in places with high footfall, such as railway stations, shopping centres and city centres in German-speaking Switzerland. Various locations were opened or refurbished in 2021, including Einkaufs-Allee Metalli in Zug and at Zurich, Basel and St. Gallen railway stations. Additional branch openings in central Switzerland are planned in 2022, including in Pilatusmarkt in Kriens (canton Lucerne) and Lucerne railway station. A moderate increase in revenue and operating result is expected for the current year.
The publishing house performed very well and managed to post a positive EBIT once again in 2021. This confirms the path it has embarked on in which the business segment focuses in future on three pillars: legal media, learning and educational media and the well-known children's book brands Globi and Garigiet. In the area of legal media, the 18th edition of the Swiss Civil Code/Code of Obligations (ZGB/OR) was one of the best-sellers last year. Sales of revision books, workbooks and in particular the accompanying commentaries were also good. In the children's books market, Globi and Roger was particularly popular in 2021 and it became a best-seller. To ensure further development in this area, the publisher is pursuing a strategy based on e-learning and hybrid offerings, particularly in the learning media programme.
At the Annual General Meeting on 11 May 2022, the Board of Directors will propose an increase in the dividend and the approval of a distribution of CHF 3.40 (previous year: CHF 3.00) per Orell Füssli share. Orell Füssli intends to distribute a substantial 60%-80% of net profit to shareholders in future. The dividend will be paid out after approval by the shareholders at the Annual General Meeting.
Outlook for 2022
On the basis of the information contained in this report, the Board of Directors and the Executive Board expect to see a slight increase in revenue for 2022. However, the EBIT margin will be slightly below the previous year due to advance payments in the digital business, higher depreciation on tangible fixed assets and increased travel to client meetings.
Key figures for the Orell Füssli Group in CHF m
1) Proposal by the Board of Directors at the Annual General Meeting on 11 May 2022
File: Orell Füssli Media Release 201 E
End of ad hoc announcement
|Company:||Orell Füssli AG|
|Fax:||044 466 77 11|
|Listed:||SIX Swiss Exchange|
|EQS News ID:||1298945|
|End of Announcement||EQS News Service|
1298945 10-March-2022 CET/CEST