Machinery industry Oerlikon raises margin forecasts despite declining sales
Oerlikon also shrank in the second quarter of 2024. Both sales and profit declined, but at least the pace of decline slowed compared to the first quarter. The previous margin forecast has even been raised.
06.08.2024, 06:59
SDA
Turnover fell by a good 12 percent to 616 million Swiss francs, as the industrial group, which is active in surface technology and manmade fiber machinery, announced on Tuesday. Adjusted for currency effects, the decline amounted to 10 percent. In the first quarter, the decline was even greater.
Of the two divisions, Polymer Processing in particular suffered an organic decline of 26 percent to 224 million. It is known that Oerlikon intends to spin off this division, which focuses on the textile market.
The Surface Solutions division kept sales stable at CHF 392 million compared to the same quarter of the previous year; adjusted for currency effects, there was even a slight increase. This was due to good business performance in the aviation industry.
The decline in order intake was less marked, falling by 0.9 percent to 651 million from April to June. Excluding currency effects, order intake actually increased by 1 percent. Oerlikon points here to the continued positive momentum in the Polymer Processing division, which increased its order intake sequentially for the second time in a row.
Profit above expectations gives rise to optimism
At CHF 96 million, operating profit before depreciation and amortization (EBITDA) was almost 13 percent lower than in the same quarter of the previous year. The corresponding margin was narrowly maintained at 15.5 percent. This was due in particular to a clear improvement in the margin in the Surface Technology division.
With these results, the company slightly exceeded analysts' expectations at all levels.
Executive Chairman Michael Süss expressed his satisfaction: "In a challenging market environment, we achieved a strong result in the first half of the year. Our determined implementation led to organic order growth in the second quarter despite weak purchasing managers' indices in our industrial markets."
In the first half-year as a whole, Oerlikon generated sales of CHF 1.17 billion and order intake of CHF 1.29 billion. The former fell by just under 19 percent and the latter by a good 3 percent. Operating profit was almost 20 percent lower at 224 million, while net profit fell by 48 percent to 39 million.
The previous forecasts have been raised with regard to the operating margin for the year as a whole. Oerlikon now expects an operating EBITDA margin of between 15.5 and 16.0 percent (previously: 15.0 - 15.5 percent). A currency-adjusted organic sales decline in the high single-digit percentage range is still predicted.
