Larox Corp, Finland

Larox Corp, Finland

COMPANY PROFILE Larox Corp, Finland Profile Larox is a global supplier of solid/liquid separation products for process industries in the mining and ...

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COMPANY PROFILE

Larox Corp, Finland Profile

Larox is a global supplier of solid/liquid separation products for process industries in the mining and metallurgy, and, chemical processing sectors. Its key technologies include automatic pressure filters, horizontal vacuum belt filters, vacuum disc and drum filters, filter presses and polishing filters. Its core brand names includes Ceramec, Hoesch, Larox, Pannevis and Scheibler. Larox also provides consumables, spare-parts and maintenance services. It has production facilities in Finland, Germany and the Netherlands, and a global sales network. Analysis

Fiscal 2008 was a mixed year for Larox with the company achieving its target for growth in net sales, but not for profitability. Net sales for the year were E208.0 million, an increase of 31.4% on the previous year. The growth in net sales was attributed to strong performances from its aftermarket business and equipment sales to the mining and metallurgy industry. Larox’s sales to the chemical process industry increased only slightly compared with the previous year. The growth in sales was primarily organic, with the exception being the October 2008 purchase of the technical ceramics manufacturer Turku Ceramics, an existing supplier of ceramic plates to Larox for use in filter elements for disc filters. Turku Ceramics had fiscal 2007 net sales of E3.4 million. Approximately 93% of Larox’s net sales were generated outside its home base in Finland with 44.9% coming from Europe, Middle East and Africa, 33.1% from the Americas and the remaining 22.0% from Asia/Australasia. The company’s largest single order in 2008 was for horizontal pressure filters and came from India with a total value of approximately E13.5 million. Other major orders came from Japan, Chile, Russia, the Democratic Republic of Congo, Mexico and Germany. The company was disappointed with the progress of its order backlog during the fiscal 2008. The backlog stood at E72.0 million at 31 December 2008, a 26.0% decreased on the corresponding total a year earlier. New orders received during fiscal 2008 totalled E184.8 million, a decline of 11.3% on the E208.4 million earned during 2007. Larox posted an operating profit for the year of E16.6 million, an increase of 26.7% on fiscal 2007, although a decline as a percentage of net sales from 8.3% to 8.0%. Net profit for the year rose from E9.5 million to E10.0 million. The company’s net cash flow from operating activities was E10.8 million, compared to a negative E2.4 million a year earlier. Larox saw an increase in its average staff numbers during the year, which increased to 562 from the 458 of the year earlier. The growth came from the acquisition of Turku Ceramics, as well as an increase in service personnel in Finland, Australia, South Africa, Chile and Peru. Key Figures (Emillion) Larox Corp

COMMENT With the cyclical nature of its core mining, metallurgy and chemical processing markets reflecting the global economic downturn, Larox is expecting a difficult year in fiscal 2009. During the last quarter of fiscal 2008 Larox saw its new orders decrease substantially on earlier in the year. It began fiscal 2009 with its order backlog 26.0% down on the year earlier at E72.0 million, and has reported continuing weak demand during the first quarter. Consequently, the company has begun to turn its management focus to cost savings and has begun negotiations with staff in relation to possible working hour reductions and redundancies. In its home market of Finland, Larox is targeting savings of at least E3 million in personnel expenses compared with fiscal 2008, while similar cost saving initiatives are planned in its other territories. The company has seen some new business in fiscal 2009 announcing in early April that it had received new orders for approximately E6 million to supply filters to mining and metallurgy applications in Europe, CIS countries, India, Africa and South America. Beyond the current difficulties, Larox continues to focus on solid/liquid filtration with an emphasis on product development and aftermarket services, as well as geographic expansion. In fiscal 2008 this strategy saw it establish subsidiaries in China and Russia. The first of these facilities, located near Shanghai, is designed not only to better serve Larox’s existing customer base in China and neighbouring Asian markets, but is also expected to play a key role in improving its profitability, as it will procure its steel structures and components through this company. The Russian subsidiary was established to enhance the company’s presence in the market by introducing local sales and aftermarket operations. ■

Year ended 31.12 2008

2007

2006

2005

2004

208.0

158.3

122.8

104.3

96.5

Operating Profit

16.6

13.1

8.9

6.7

3.9

Profit before Taxes

14.0

11.8

7.0

5.8

1.8

Profit for the Period

10.0

9.5

5.0

4.5

1.5

184.8

208.4

138.0

121.5

93.2

Order Backlog

72.0

97.3

44.9

29.8

12.4

No of Employees

562

458

450

438

436

Net Sales

New Orders

Contact Details

Chair: President & CEO: Address:

May 2009

Timo Vartiainen Toivo Matti Karppanen PO Box 29, Tukkikatu 1, 53101 Lappeenranta, Finland

Tel: +358 20 7687 200 Fax: +358 20 7687 277 Web: www.larox.com

Email: [email protected]

Filtration Industry Analyst

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