Forbo cautious despite first-half gains

Baar, Switzerland –  Forbo Group – a Swiss-based maker of floor coverings, adhesives, power transmission products and conveyor belting – has reported a 6.5-percent  year-on-year rise in first-half net sales to CHF590.9 million (€544.0 million).

Operating profit (EBITDA) grew 12.5 percent to CHF82.8 million, lifting margins to 14.0 percent, from the prior-year 13.3 percent, the Baar-based group announced 16 Aug.

Both divisions – Flooring Systems and Movement Systems – contributed to the gains, each growing sales by around 6.5 percent

Sales in local currencies in North, Central and South America grew 7.8 percent, while the Asia/Pacific and Africa region reported comparable growth of 7.4 percent. European sales were up 2.8 percent in “very mixed” market conditions.

Forbo, meanwhile, linked its improved profitability to “optimisation measures along the value chain and additional productivity gains in both divisions.”

Flooring Systems’ higher sales of CHF408.9 million partly reflecting a “firming of core markets in France and the US and by the incipient recovery in the Netherlands.” This included a recovery in demand for building & construction adhesives

Movement Systems sales of CHF182.0 million with most European markets performing better than the global average. Sales growth in the USA weakened slightly, while demand in China, the division's largest market in Asia/Pacific, slowed down somewhat compared with previous years.

For the full year 2016, Forbo said that despite “the encouraging first half, the overall environment remains challenging because the currency exchange situation and the trends on individual markets are still volatile.

“Barring any change in the foreign exchange situation, Forbo anticipates a slight increase in sales and group profit from continuing operations for the full year 2016.”