Datwyler ‘scaling business model’ to deliver medium-term growth
21 Nov 2023
Swiss group impacted by “very rapid and almost complete loss of the Covid business”, higher costs in 2023
Altdorf, Switzerland – Swiss polymer group Datwyler has targeted growth with plans to scale its business model and tap into its recent investments in expansions and acquisitions.
In an ad hoc announcement 10 Nov, Datwyler said it was in a “strong position” to deliver “medium-term” growth targets, despite the anticipated weak results for 2023.
“Medium-term objectives” include a revenue growth of 6% to 10% per year, with the lower end likely to be achievable in the “near future”, given the subdued economic environment.
Leveraging the economies of scale and with the elimination of the most recent one-time effects, the group is targeting an earnings (EBIT) margin of between 18% and 21% in the future, said Datwyler in a capital market day event.
This year, following a slight recovery in the second half, Datwyler expects to generate revenue of close to CHF 1.17 billion (€1.2 billion), up 2.1% compared to last year.
Earnings margin is set to come in at “close to 11%” for the full year, down from 13.0% the previous year and “well below the target range”, Datwyler noted.
The group attributed the lower margins to “the very rapid and almost complete loss of the Covid business” and customers’ reduction of their high levels of security stocks.
The process, Datwyler noted, led to the “underutilisation” of its recently extended plants.
Furthermore, the temporary increase in energy costs in 2023 also impacted the margin.
For future growth, Datwyler said it would place “a clear focus” on achieving profitable organic growth “by scaling the business model and production capacities”.
Supporting the growth will be a “large number of promising new projects with existing and new customers”, according to Datwyler.
In the process, the Swiss group said it intended to tap into the potential of its existing customers and markets more effectively, while extending its markets with “high-value products”.
These include plans to expand into new regions with the ‘healthcare’ business unit, particularly in the US and the “attractive biotech field”.
With electrification on the rise, the group also aims to expand its “connectors business” by increasing penetration in existing markets and boosting sales in Europe.
In the ‘general industry’, the group aims to digitalise commercial processes and generate cross-selling projects with the ‘connectors’ unit.
In ‘food & beverage’, the group will aim to expand relationship with existing customers and enhance product and customers portfolios.