A more focused and profitable Phoenix Mecano

Ad hoc announcement pursuant to Art. 53 LR

In financial year 2023, Phoenix Mecano was able to sustain its sales despite divestments and boost its profitability in continuing operations. The DewertOkin Technology Group achieved a turnaround.

Kloten/Stein am Rhein, 15 February 2024. Based on provisional and unaudited results, the Phoenix Mecano Group achieved consolidated gross sales of EUR 783.1 million in financial year 2023. This was down 1.2% on the previous year's total of EUR 792.9 million. Sales therefore held steady despite the disposal of the Rugged Computing business area. In organic and local-currency terms, the Group grew by 5.8%. 

Net sales fell from EUR 784.4 million to EUR 775.5 million (down 1.1%). Incoming orders shrank by 2.8% from EUR 804.1 million to EUR 781.5 million. Organically, they expanded by 7.4%. The book-to-bill ratio was 99.8%, compared with 101.4% the previous year. 

Operating result and result for the period under review

The unaudited operating cash flow (EBITDA) rose by 9% to around EUR 85 million (previous year: EUR 78.0 million). The provisional operating result (EBIT) increased significantly again to around EUR 62 million (up 16%). Excluding special items, the operating result was up by 10% to around EUR 59 million. The (as yet unaudited) figures indicate that the result of the period rose by 16% to around EUR 45.5 million. Phoenix Mecano ended the year with a positive net cash position.

Phoenix Mecano Group CEO Rochus Kobler said: “After a year of sales growth in continuing operations and increased margins and cash flows, Phoenix Mecano is in its best shape for many years. The clear improvement in margin confirms that focusing on our core business was the right strategy. We are on track to achieve our medium-term targets.” 

Division performance

Sales in the DewertOkin Technology (DOT) Group division rose by 6.5% to EUR 330.4 million. Measured in local currency, the increase was 12.6%. In the United States, the furniture market picked up over the course of 2023, although it has not yet returned to pre-Covid levels. The division's new headquarters in Jiaxing, southwest of Shanghai, were officially opened in November. As well as production, the site houses administration, research & development, sales, service and laboratory functions.

Sales in the Industrial Components division declined by 12.8% to EUR 223.1 million. Organically, sales were up by 0.8%. In the Automation Modules business area, price increases and a high level of orders on hand cushioned declining demand as a result of a slowdown in industrial activity. The Electrotechnical Components business area opened a new site in Mexico to support its sales activities in this emerging market. The Measuring Technology business area benefited from the global expansion of high-voltage direct current (HVDC) transmission and investments in smart grids.

In the Enclosure Systems division, gross sales rose slightly to EUR 229.7 million (up 1.3%). Measured in local currency, they were up by 2.0%. While orders from mechanical engineering customers were subdued, demand for industrial PCs grew dynamically. Also in demand were power distribution units for electric commercial vehicles and explosion-proof enclosures for green hydrogen. The division is increasingly focusing its attention on such growth areas.

Outlook

At the end of last year, high Inflation rates, increased interest rates and geopolitical risks dampened the economic outlook. Phoenix Mecano Group customers are likely to remain under pressure, particularly those facing international competition.

Phoenix Mecano is responding to weaker demand in some sectors of application and is constantly adjusting its capacities in line with incoming orders.

One bright spot is the confirmed turnaround of the DewertOkin Technology Group, which saw a marked upturn in order momentum in the fourth quarter. Going forward, Phoenix Mecano expects higher growth rates in the smart furniture segment once again and anticipates a further improvement in DOT Group's operating performance. 

With leading positions in industrial niche markets, the Phoenix Mecano Group will benefit from growth driven by global megatrends such as automation and decarbonisation. Similarly, strategies aimed at reducing geopolitical risks and establishing regional supply chains will boost demand for Phoenix Mecano's modular solutions and services. 

Phoenix Mecano's management and Board of Directors are cautiously optimistic for the 2024 financial year, despite the challenging environment. Alongside growth, the main focus will remain on increasing profitability to achieve the medium-term targets communicated at the Capital Markets Day on 1 December 2022. 

A more specific assessment of financial year 2024 will be provided together with the results for the first quarter of 2024 and the publication of the 2023 annual report on 23 April 2024.

For more information, please contact:
Phoenix Mecano Management
Dr Rochus Kobler, CEO
Lindenstrasse 23, CH-8302 Kloten
Tel. +41 (0)43 255 4 255
info@phoenix-mecano.com
www.phoenix-mecano.com

About Phoenix Mecano
Phoenix Mecano is a global technology company with leading positions in the growth markets of industrial automation, industrial enclosures and drive systems for electrically adjustable comfort and healthcare furniture. Headquartered in Stein am Rhein, Switzerland, the Group employs around 7,000 people worldwide and generated sales of around EUR 783 million in 2023. Phoenix Mecano's successful business model focuses on the cost-effective manufacture of technical components and their further processing into customised products for niche applications and integration into modular system solutions. Three focused divisions supply a broad customer base in the mechanical engineering, measurement and control technology, medical technology, aerospace, alternative energy, and home and hospital care sectors. Phoenix Mecano was founded in 1975 and has been listed on the Swiss stock exchange since 1988.