Carlo Gavazzi coped well in an adverse economic environment

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Implementation of the strategic focus on Automation Components
 
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.
 
Carlo Gavazzi's core business - Automation Components
 
Automation Components coped well  in an adverse economic  environment
and achieved a satisfactory result. Bookings and operating revenue in
Euro decreased by 7.2% and  6.5%, respectively. While sales in  North
America only slightly  declined by  less than 4%  in local  currency,
revenue in the European  region dropped by almost  6%, mainly due  to
the severe  economic  downturn  in  Iberia.  In  South-East-Asia  the
business unit experienced  an 11% decrease  of sales as  a result  of
strongly declining exports of local  manufacturers to Europe and  the
US.
Thanks  to  the  comprehensive  portfolio  in  the  area  of   energy
management, this product line achieved a growth of more than 35% over
the previous year. The continuous focus on priority markets paid off.
Sales to these segments increased in  excess of 3% with new  products
to the  heating,  ventilation  and air-conditioning  (HVAC)  and  the
renewable  energy  markets  growing  by   more  than  40%  and   20%,
respectively.
 
Accounting principles
 
Following international trends, the board of directors has decided to
change the accounting principles currently used by the group from  US
GAAP to IFRS commencing with the financial year 2010/11.
 
Key figures group (CHF million)
 
Income statement                       2008/09* 2007/08**     %
 
Bookings                                  172.7     195.7 -11.8
Operating revenue                         174.9     196.6 -11.0
EBIT                                       16.2      25.3 -36.0
EBIT-Margin                                9.3%     12.9%     -
Earnings from continuing operations        12.2      15.8 -22.8
Loss/gain from discontinued operations     -4.2       1.0     -
Shareholders' net income                    8.0      16.8 -52.4
Cash flow                                  17.9      23.6 -24.2
 
Balance sheets (as of March 31)            2009      2008
 
Net working capital                        43.2      47.3  -8.7
Shareholders' equity                      106.9     107.9  -0.9
Total assets                              156.4     171.1  -8.6
Equity in percent of assets               68.4%     63.1%     -
 
*    2008/09 figures reflect the results of continuing operations
** 2007/08 figures have been restated to reflect the effect of the
divestiture of the Computing Solutions Business Unit
 
Key figures Automation Components (EUR million)
 
                        2008/09 2007/08     %
 
Bookings                  110.7   119.3  -7.2
 
Operating revenue         112.1   119.9  -6.5
 
EBIT                       11.4    16.1 -29.2
 
ROS (EBIT/Revenue in %)    10.2    13.4     -
 
For further information contact:
Felix Stöcklin
Head of Corporate Communications
Carlo Gavazzi Holding AG
Phone     +41 41 747 45 26
E-Mail     felix.stoecklin@carlogavazzi.ch
 
Note:
1) The group's annual report 2008/09 and the presentation made at the
press conference scheduled for Tuesday, June 23, 2009, will be
available the same day at 2 pm on the company's website
www.carlogavazzi.com.
2) Our press releases are also available by e-mail instead of fax. If
you require this service, please register on our website or send an
e-mail to the following address: mady.arnold@carlogavazzi.ch.
 
About Carlo Gavazzi:
Carlo  Gavazzi  is  a   publicly  quoted  (SIX:  GAV)   international
electronics group  with activities  in the  design and  marketing  of
electronic control components for factory and building automation.
Please visit our website: www.carlogavazzi.com
 
The press release can be downloaded from the following link:
 
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Carlo Gavazzi Holding AG
Sumpfstrasse 32 Steinhausen 
 
WKN: 869279; 
ISIN: CH0011003594; Index: SPI, SPIEX, SSCI;
Listed: Main Market in SIX Swiss Exchange;