Altdorf, Switzerland – After a difficult year, Datwyler has issued a fairly upbeat projection for its business prospects in 2020 as it restructures to focus on less cyclical sealing-products markets
For 2019, the Swiss group posted an 8.1% decline in earnings (adjusted EBIT) to CHF168.7 million (€157.7 million), from continuing operations in 2019, on net sales of CHF1,088.5 million – 5% higher than a year ago if adjusted for currency effects.
Including being-sold Distrelec and Nedis, Datwyler’s net sales were “virtually unchanged” at CHF1,360.8 million, though on-off factors contributed to an operating loss (EBIT) of CHF40.3 million and net loss of CHF86.6 million.
The announced sale of the distribution companies led to asset-impairment and one-off costs of CHF195.0 million in the 2019. There were also start-up costs for a US healthcare products plant of CHF9.2 million.
Excluding the two distribution companies, the performance reflected difficult market conditions offset by efficiency-improvements, Datwyler reported 6 Feb.
The adjusted net result for continuing operations – Sealing Solutions division and electronics distributor Reichelt – came in 7.5% lower at CHF129.7 million.
In 2019, Datwyler said, the US-China trade dispute impacted demand, particularly in the automotive sector. However, net revenue for continuing operations increased by 2.6% before currency effects.
With the recently announced sale of Distrelec and Nedis to German investment firm Aurelius , Datwyler said it is now focusing on the existing high-growth, high-margin sealing business.
An investment programme to expand production capacities is nearing completion, with investments in the reporting year declining to CHF104.6 million from the prior-year CHF138.0 million.
"With the investments and acquisitions we have already made, we are in an ideal position," commented Datwyler’s CEO Dirk Lambrecht.
Looking ahead, Datwyler said “it is hard to see any significant turnaround in the automotive market during the coming months.” However, it added that with its healthcare and Nespresso seals businesses, more than half of revenues will come from “low cyclical markets that are growing steadily.”
And with new healthcare production capacities coming on stream in the US, Europe and India, Datwyler said it is targeting revenue growth of 2% to 5% and an EBIT margin of more than 15% in 2020.