Closing 2008 – The SCHURTER Group in a Turbulent Environment

The SCHURTER Group, active in the electronics industry, experienced two very different business developments in the year 2008. During the first half of the year sales remained on the same level as in the previous year. In contrast, sales dropped heavily during the last months of 2008 due to decreasing global demand. Sales in 2008 reached a level of CHF200.3 million, which corresponds to a decrease of 5% compared to last year. Adjusted for exchange rate losses due to the very strong Swiss Franc, the decrease in sales is only marginal with 1.7%. Net profit decreased by 74% to a mere CHF1.9 million.

2008 got off to a promising start for the SCHURTER Group with her 19 worldwide subsidiaries achieving good sales figures, although indications of the market’s growing lack of confidence had already begun to be detected. Following the summer months a decline in sales was experienced in all markets with sales in America and Asia very much affected by the decline.

A significant part of the SCHURTER product portfolio has been affected by the decline in sales. The biggest division, connectors, circuit breakers for equipment and fuses, showed a sharp decline. However, with the division input systems, which mainly supplies the European market, an increase in sales has been achieved.

With sales of CHF200.3 million the target of CHF200 million annual sales has been exceeded for the second time, whereas a decline of 5% compared with the previous year had to be accepted. The high export ratio and the strong exchange rate of the Swiss Franc to the Euro as well as to the US dollar have had an important influence on the annual sales figures. However, after adjusting for these exchange rate losses, the decrease in sales by 1.7% was relatively low.

Net profit decreased to CHF1.9 million in 2008, a decrease of 74% compared with 2007. Cash flow declined by 36.6% to CHF10.88 million. This can be mainly attributed to the fact that the cost structure could not be reduced to the same order as the sales decrease.

The first months of 2009 have shown a continuing fragile demand for SCHURTER products. For that reason reduced hours have been introduced for most of the employees of the SCHURTER companies in Switzerland (Lucerne, Mellingen and Mendrisio) as well as in subsidiaries abroad. In some cases, early retirements have been agreed upon. Reduced hours came into effect at the beginning of March and April 2009 respectively, ranging from 30% to 50% reductions. Various indicators suggest that the current downturn may be drawing to a conclusion. However, it is difficult to estimate when business of the SCHURTER Group will reach the level of 2007 again.

As a family-owned enterprise with more than 1,500 employees worldwide, it is of great importance to the SCHURTER Group to retain the know-how of the employees and to continue offering innovative products to the customers.

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