Healthcare continues to drive Datwyler earnings growth

Altdorf, Switzerland – Swiss elastomer products manufacturer Datwyler increased first-half earnings on the back of continued strong growth in its healthcare division, while industrial markets remained under pressure from weak demand and geopolitical uncertainty.

Group sales for the first six months rose 3.5% year-on-year to CHF582.7 million (€626 million), or 4.6% on an organic basis, while earnings (EBIT) increased 9.9% to CHF75.7 million.

Earnings margin rose to 13.0% from 12.2% a year earlier, the Swiss group reported 23 July.

Datwyler linked the improved profitability to "operational improvements" under its ForwardNow transformation programme (ERJ report), while continuing to invest in innovation, commercial capabilities and new growth platforms.

Healthcare sales increased to CHF242.8 million from CHF236.8 million, driven by the continued ramp-up of new customer projects and higher volumes in existing applications, partly offset by currency effects.

Division earnings rose sharply to CHF50.8 million, up 26% from CHF40.1 million the year before, with margin improving to 20.9% from 16.9%.

Datwyler said it expected the healthcare segment to remain “the main growth driver”, supported by higher-value products, increasing capacity utilisation and the ramp-up of customer programmes.

These factors more than offset start-up costs for new customer programmes and higher aluminium prices linked to the conflict in the Middle East.

During the period, Datwyler began supplying components for a leading GLP-1 weight-loss medication from its FirstLine manufacturing site in Middletown, US.

Demand also increased for the group's NeoFlex spray-coated plungers for biologics, prefilled syringes and homecare applications, while the group launched what it described as the “industry's first” universal 20ml spray-coated plunger for large-volume injectable therapies.

Industrial division sales increased nearly 4% year-on-year to CHF342.4 million, but earnings declined 13.5% to CHF24.9 million from CHF28.8 million the year before. Segment margin fell to 7.3% from 8.7%.

Demand across the core industrial and automotive markets remained subdued, reflecting ongoing trade tensions and weak investment activity, while additional headwinds stemmed from the conflict in the Middle East.

Industrial profitability, Datwyler said, is forecast to improve in the second half as cost measures take effect.

Within Transportation & Electronics, Datwyler said it continued expanding its portfolio of higher-value applications while strengthening its position with Chinese vehicle manufacturers and adjacent mobility markets.

The ‘General Industry’ business secured new projects in the aerospace and medical technology sectors, while the group also advanced sealing solutions for liquid cooling systems used in data centres, where it expects attractive medium-term revenues.

In Food & Beverage, demand for aluminium coffee capsules remained strong, with additional production capacity supporting further growth.