Expansions in pipeline at Datwyler sealing products unit

Altdorf, Switzerland – New capacity additions are on the cards for Dätwyler’s Sealing Solutions division, are a strong first-half showing that helped counter difficulties elsewhere in the group.

Datwyler Holding AG posted a 2.1% year-on-year drop in earnings (EBITDA) to CHF108.1 million (€91.6 million), on first-half net sales of CHF644.5 million 3.8% higher than in the same period last year.

Over the six months to 30 June, Datwyler said an acceleration in profitable growth at its Sealing Solutions division largely offset declines in its Technical Components division.

“Demand for sealing components within the automotive industry in China and for prefilled syringes in the healthcare market segment proved to be particularly dynamic,” the Swiss group reported 11 Aug.

On the other hand, Datwyler’s Europe-focused Technical Components division suffered a drop in revenue due to "persistently weak" demand in the business-to-consumer segment.

“The Datwyler Group is growing profitably and is on track for the year as a whole,” summarised CEO Dirk Lambrecht. “Despite higher raw material prices and a drop in revenue at our subsidiary Nedis, we managed to keep operating profitability at the previous year’s level.”

At the Sealing Solutions division, net revenue rose 9.7% to CHF420.2 million, while the operating result (EBIT) increased 8.4% to CHF 78.6 million, Datwyler’s figures show.

“Higher raw material prices as well as spending to stimulate growth prevented profits from growing further at this juncture,” the group noted.

Datwyler’s growth projects include the start-up of a new healthcare products plant in the US and initial investments in the new mixing plants in the Czech Republic and Belgium.

“The construction of the new US plant is on schedule, while certifications by customers in relation to the two new mixing plants are likely to be completed by the end of 2017,” it said. “Additional capacity expansion measures are in the pipeline to encourage growth.”

Datwyler noted that the automotive market segment had posted “very strong revenue growth” particularly in China.

Market penetration of diesel vehicles with selective catalytic reduction technology is continually increasing, leading to a sharp rise in sales of sophisticated sealing components, the group added.

While the Technical Components division increased revenue in the core business-to-business segment, demand was down in the business-to-consumer segment. Overall, net revenue fell 5.8% to CHF224.3 million, while the operating result (EBIT) slumped to CHF1.5 million from the prior year CHF9.2 million.

For 2017 as a whole, Datwyler expects to maintain first-half growth rates, and group net revenue to come in between CHF1,270 million and CHF1,310 million, and an adjusted EBIT margin to approach a 14% target.