Carlo Gavazzi coped well in an adverse economic environment

Steinhausen, June 23, 2009 – In the financial year ended March 31, 2009, Carlo Gavazzi, the Zug-based electronic group, coped well in an adverse economic environment even though, due to the reduced market demand in the second semester, operating revenue from continuing operations decreased by 11% from CHF 196.6 million to CHF 174.9 million. Gross profit margin improved from 52.2% to 52.4% as a result of efficiency improvements and the change in product mix towards promising markets in the renewable energy and heating, ventilation and air-conditioning (HVAC) sectors. As a consequence of the decreased revenue and, notwithstanding the implementation of strict cost measures, EBIT declined from CHF 25.3 million to CHF 16.2 million. Earnings from continuing operations decreased from CHF 15.8 million to CHF 12.2 million with a satisfactory return on equity of 11.4%. In the past financial year, Carlo Gavazzi divested substantially all assets of its Computing Solutions Business Unit as already communicated. This will allow the group to focus all efforts on Automation Components. The divestiture has been accounted for as discontinued operations. Carlo Gavazzi’s strategy to increase sales through internal growth and by means of acquisitions in order to lay the foundations for sustained long-term success remains unchanged despite the current adverse economic environment. The group has put in place all necessary actions and is in a position to flexibly adapt structures and capacities to the market conditions which are likely to remain unfavourable. Shareholders’ equity at March 31, 2009 amounted to CHF 106.9 million or 68% of total assets. The financial position of the group has further improved with its net cash position increasing from CHF 21.1 million to CHF 29.7 million. Accordingly, the board of directors will propose to the annual shareholders’ meeting the payment of a dividend of CHF 5 (CHF 10) per bearer share, corresponding to a payout ratio of 29% of earnings from continuing operations.

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