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Schlatter Industries AG / Key word(s): Half Year Results SCHLATTER INDUSTRIES AG - SIX SWISS EXCHANGE: STRN - ISIN: CH0002277314 S c h l i e r e n, 17 August 2023 In the first half of 2023, the Schlatter Group posted order intake of CHF 62.4 million, which was lower than in the comparable period of the previous year (first half of 2022: CHF 94.6 million). The Group recorded a 31% rise in net sales to CHF 67.4 million (first half of 2022: CHF 51.3 million). At CHF 84.4 million, the order backlog as at 30 June 2023 was close to the level at year-end 2022 (31 December 2022: CHF 89.4 million). Operating profit (EBIT) for the first half of 2023 totalled CHF 3.7 million (EBIT margin: 5.4%), compared with CHF 2.9 million (EBIT margin: 5.7%) in the first half of 2022. For the first half of the year, the Schlatter Group is reporting a positive net result of CHF 3.3 million (first half of 2022: CHF 2.0 million).
Demand for Schlatter products normalized in the first half of 2023. In particular, demand for reinforcing mesh production systems and weaving machinery for the paper industry dropped following a period of market overheating. By contrast, after-sales volumes remained at a high level, while the number of industrial mesh production systems and rail welding systems sold increased. Suppliers’ delivery problems have eased in some areas, but the resulting backlogs continued to weigh on productivity. Prices of sourced materials did not rise as fast but are still holding back earnings, while further appreciation of the Swiss franc put further pressure on earnings.
Welding segment 1st half of 2023 Key figures Order intake: CHF 50.9 million (first half of 2022: CHF 71.7 million). Net sales: CHF 51.5 million (first half of 2022: CHF 44.5 million). Order backlog: CHF 61.9 million (31 December 2022: CHF 62.5 million).
Order intake in the welding segment was above expectations in the first half of the year and roughly corresponds to segment capacity. While there was a significant drop in order volume for reinforcing mesh production systems, order intake increased in the other product areas. As a result of supply bottlenecks, especially for electrical and control components, there were delays in the delivery of machinery. The delivery backlog has lasted for longer than had been anticipated and will continue to have a significant impact in the second half of 2023.
Welding segment outlook Given the present order backlog, good capacity utilization is ensured in the welding segment in 2023 and beyond. Delivery delays should be resolved by the final quarter of the year. For the most part, selling prices for machines and systems are fixed, so the cost increases weigh heavily on the margin. Schlatter assumes that price rises for the Schlatter product range in the fourth quarter of 2023 will have a more favourable effect on the margin. Inquiry activity remains good and is roughly in line with existing capacity, but orders are significantly dependent on overall economic developments.
Weaving segment 1st half of 2023 Key figures Order intake: CHF 11.5 million (first half of 2022: CHF 22.9 million). Net sales: CHF 15.9 million (first half of 2022: CHF 6.8 million). Order backlog: CHF 22.5 million (31 December 2022: CHF 26.9 million).
Capacity utilization in the weaving segment is secured until the end of 2024. Nevertheless, further orders for reinforcing mesh production systems are necessary for full capacity utilization at the Münster site.The measures implemented at this site in the past financial year have had the desired effect on earnings and a clear return to profitability has been achieved. However, costs need to be reduced further and placed on a more flexible basis in the medium term.
Outlook for the weaving segment The weaving segment is embarking on the second half of 2023 with a high order backlog. Including the welding modules for reinforcing mesh production systems and machinery for the manufacture in Münster of mobile fences, capacity utilization at this site in the current financial year and beyond is healthy. Capacity utilization in the weaving segment is secured until year-end 2024. The focus is on continuing to implement the medium and long-term measures. The high order intake from China in recent periods has come to an end. Orders from western markets are picking up, but order volume is lower than from China. Downside effects come from the steep rise in material prices and the availability of parts, especially electrical components.
Outlook Schlatter Group The Schlatter Group has successfully launched product innovations and stepped-up marketing in regions where the company was previously under-represented. The organization has been strengthened by increasing the headcount. In addition, it has extended services business. As a result of the significant profit in the first half of 2023, equity was strengthened. Downside factors were higher prices for parts and components, further appreciation of the Swiss franc, delivery delays due to supply bottlenecks, and the resulting backlog in the delivery of machinery.
The markets for reinforcing mesh production machinery and weaving machinery for the paper industry have normalized following a period of overheating, especially in the first half of the previous year. Thanks to the pleasing rise in the sale of industrial mesh production and rail welding systems, order intake remained at a satisfactory level – albeit lower – and was roughly in line with our capacity.
The Schlatter Group has ended the first half of 2023 with a high order backlog, which ensures good capacity utilization until mid-2024. Timely implementation of customer projects has priority. Other focal areas are implementing innovations and the introduction of more flexible cost structures. The Board of Directors and the management expect the operating result in the second half of the year to be around the same level as in the first half.
The full 2023 half-year report can be downloaded from the Schlatter Group website: http://www.schlattergroup.com/en/investor-relations/annual_and_semester_reports/
Further information Schlatter Industries AG Werner Schmidli Chief Executive Officer Telephone +41 44 732 71 70 Mobile +41 79 343 62 62 werner.schmidli@schlattergroup.com
Agenda
Key figures of the Schlatter Group
Schlatter Group (www.schlattergroup.com) - End of Inside Information |
| Language: | English |
| Company: | Schlatter Industries AG |
| Brandstrasse 24 | |
| 8952 Schlieren | |
| Switzerland | |
| Phone: | +41 44 732 71 11 |
| E-mail: | info@schlattergroup.com |
| Internet: | www.schlattergroup.com |
| ISIN: | CH0002277314 |
| Listed: | SIX Swiss Exchange |
| EQS News ID: | 1705269 |
| End of Announcement | EQS News Service |
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1705269 17-Aug-2023 CET/CEST
