Daetwyler sees pressure on margins, despite strong demand

ERJ staff report (DS)

Altdorf, Switzerland -- In the six months to 30 June 2011, the Datwyler Group saw a 0.3 percent increase in net revenues to CHF 679.0 million (euro 601 million). Before restructuring costs and assuming no change in exchange rates, operating profitability was up slightly on the previous year's level. After taking account of all factors, the EBIT margin narrowed to 9.2 percent. The net result declined to CHF 44.2 million. For the year as a whole, Datwyler does not expect to improve on its 2010 revenue and income figures.

In the first half of 2011, Datwyler's Sealing Technologies Division enjoyed brisk demand from the automotive and construction industries. It was also able to further expand the major contract from Nespresso. Overall, net revenue grew 4.7 percent to CHF 80.7 million (previous year CHF 77.1 million). Currency-adjusted growth was 8.0 percent. Despite the good capacity utilisation, the operating result (EBIT) declined in comparison with the very good first half of 2010, falling to CHF 6.7 million (previous year CHF 9.2 million).

Daetwyler said the situation is especially difficult in the automotive sector at the Swiss Schattdorf site, which made no contribution to earnings during the period under review. A further factor is the marked rise in raw material prices which can only be passed on to customers with some delay and even then not in full. The first half of 2011 was also marked by high initial costs for complex new projects in the automotive sector. These include the preparatory work for the new plant in China.

Datwyler expects capacity utilisation at the production sites in the Sealing Technologies Division to remain high in the second half of the year. In light of the very well filled project pipeline in the automotive sector, the company is considering expanding the existing site in the Czech Republic.

In the first half of 2011, the Pharma Packaging Division once again grew faster than the market. While consolidation in Swiss francs translated into a -5.3 percent decrease in net revenue to CHF 145.8 million (previous year CHF 153.9 million), after adjustment for the negative currency effect, organic revenue grew by 8.7 percent.

Preparatory work for the change of brand from Helvoet Pharma to Datwyler is also well underway.

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Press release from the Datwyler Group