Picanol turnover up 18% even after facing a tough second half

In line with the earlier forecasts, the Picanol Group realized a consolidated turnover of 466.95 million euros in 2011, which represents an increase in turnover of 18 per cent, compared to 395.77 million euros in 2010. In the second half of the year, it realized a turnover of 206.89 million euros, a decrease of 20.5 per cent compared to 260.06 million euros in the first half. The revenue decline occurred in both divisions.

The Weaving Machines Division experienced another strong year in 2011, where the first half in particular was characterized by a sustained high global demand for Picanol weaving machines, also supported by the favorable exchange rate of the yen and the weaker euro. In the second half of the year global demand for weaving machines slowed, under the influence of the increasing uncertainty due to the European debt crisis and limited availability of funding for investments.

In 2011, the Industries Division was able to continue the positive trend of 2010 by taking full advantage of its new molding line (Proferro) and its controller capacities (PsiControl Mechatronics).

Thanks to the strong turnover increase in both divisions over the full year and a continued cost control, Picanol managed to close 2011 with a REBIT of 67.26 million euros, compared to 47.59 million euros in 2010.

Weaving machines

The first half of 2011 was characterized by a sustained high global demand for Picanol weaving machines, supported by the favorable exchange rate of the yen and the weaker euro. This resulted in a strong demand for weaving machines produced in Ypres, whereby increased attention was paid to handling the various production peaks caused by the strong order book. Sales of spare parts and accessories also did well.

In the second half of the year, global demand for weaving machines slowed, under the influence of the increasing uncertainty due to the European debt crisis and limited availability of funding for investments.

By strongly focusing on a broader presence in the market and supported by a positive investment climate, Proferro managed to expand its customer portfolio with new customers in various sectors for both castings and for the finishing of castings. Last year, PsiControl Mechatronics again strongly focused on its customized controllers. This resulted in an expansion in R&D activities and an increasing demand for electronic products and assemblies.

In the second half of 2011, the Picanol Group realized a turnover of 206.89 million euros, which represents a decrease of 20.5 per cent compared to 260.06 million euros in the first half of 2011 and a decrease of 4.3 per cent compared to the second half of 2010. The gross profit of the group in the first half of 2011 amounted to 62.64 million euros, compared to 38.49 million euros in the second half of 2011 and 42.71 million euros in the second half of 2010. The gross margin decreased from 24.1 per cent in the first half to 18.6 per cent in the second half of 2011.

Picanol Group’s consolidated turnover for the full financial year was 466.95 million euros, which represents an increase in turnover of 18 per cent compared to 395.77 million euros in 2010. The turnover of Picanol NV increased to 348.87 million euros, up by 32.1 per cent compared to 264.08 million euros in 2010. This was mainly due to strong volume increase in the sale of weaving machines.

The gross profit for 2011 was 101.14 million euros, compared to 81.94 million euros in 2010. The gross margin increased from 20.7 per cent to 21.7 per cent. The operating result increased from 46.73 million euros in 2010 to 76.07 million euros in 2011. This was due to the strong turnover growth, strict cost control and the capital gain linked to the sale of GTP Greenville for an amount of 9.5 million euros.

As a result of the strong turnover growth in both divisions and sustained cost control, the Picanol Group managed to close 2011 with a REBIT of 67.26 million euros, compared to a REBIT of 47.59 million euros in 2010. Including non-recurring income of 9.5 million euros realized by the sale of GTP Greenville, the group closed 2011 with a net profit of 61.01 million euros compared to 35.24 million euros in 2010.

The Board of Directors will propose to the general meeting on April 18 not to pay out a dividend for the 2011 financial year. The Board believes that more value can be created within the group by investing in R&D, automation and robotics, and other investment projects.

Main events in 2011

In September, Picanol celebrated its 75th anniversary with the launch of two new products at ITMA Barcelona. The new airjet weaving machine OMNIplus Summum and the positive rapier (a newer version of the OptiMax) were introduced.

In order to put its rich history in the spotlight, Picanol published the book ‘Picanol – more than weaving machines’ in the fall of 2011. In September, it signed an agreement with Groz-Beckert KG for the sale of the Steel Heddle activities of GTP Greenville. The Picanol gravity point in Greenville, which is responsible for sales and service of its weaving machines and spare parts in the US, continues to operate as Picanol of America Inc.

In October 2011, the Picanol Group acquired the high-tech machinery of TBP Electronics Belgium NV from Geel. The acquisition fits into the growth plans of PsiControl Mechatronics focusing fully on the further expansion of its controller capacities.

For 2012, the Picanol Group takes into account a further slowdown of the weaving machine market. This is partly because of the growing economic uncertainty and limited availability of funding for investments, which means that customers are more cautious and investment decisions may be delayed or postponed.

For 2012, the group expects a further growth in the Industries activities, albeit differentiated into the different markets. It remains cautious, as it is active as an export-oriented company in a volatile world economy. In view of the cyclical nature of the textile market, strict cost control is most essential.