Half-year results for 2020: earnings growth despite tough market conditions

Steinhausen, August 17, 2020 – Schweiter Technologies reported a strong first half in 2020 despite challenging market conditions. Group revenues declined by -9% versus the same period the previous year to CHF 559.5 million, owing to the COVID-19 pandemic and negative currency effects. The decline in local currencies was -4%. In contrast, EBITDA rose by +10% to CHF 67.9 million (up +16% in local currencies). The return on net sales improved to 12.1%. Operating profit (EBIT) rose by 14% to CHF 49.3 million (+20% in local currencies), while net income grew to CHF 35.3 million. Operating cash flow expanded by +64% to CHF 56.5 million. Cash and cash equivalents stand at CHF 114.4 million following a dividend distribution of approximately CHF 57 million.

The diversification of 3A Composites proved to be a strength in the first half-year, which was overshadowed by the COVID-19 pandemic. While some market segments and geographies were affected by the lockdown measures and had to cope with a steep fall in demand, the European display business in particular, with its wide range of clear sheet products, and the core materials business for the wind energy sector benefited from firm demand.

The European display business was marked by two opposing trends. On the one hand, clear sheet production was running at full capacity, and the company took a number of measures to be able to meet the exceptionally high demand for transparent sheets for infection protection. On the other hand, display revenues in the areas of advertising, trade fairs and interior fittings tumbled as of mid-March. The US display business also suffered a significant downturn in demand in these areas. Growth in profitability clearly outpaced sales growth owing to falling raw material prices, high capacity utilization in clear sheet production, a temporary reduction in production capacity as well as a strict cost discipline at all sites.

The architecture business also saw conflicting trends. Whereas the US architecture business repeated the previous year's success and maintained revenue levels, the architecture business in Europe and Asia suffered a decline in revenues. The markets in China, India, the Middle East, and southern Europe were particularly hard hit by the lockdown measures and project postponements.

The core materials business maintained the previous year's strong momentum, posting percentage revenue growth in the double-digits. Ongoing firm demand in wind energy combined with very high capacity utilization at the production sites along with selective price increases produced a significant increase in revenues and an even bigger growth in profit.

In Transportation, both revenues and profit suffered a double-digit percentage decline – despite a high order backlog – owing to temporary closures of production sites and postponement of projects by certain key customers.

Outlook

The Group anticipates a good performance on the whole despite the volatile business environment. On the one hand, it is expected that demand for clear sheet products will normalize. On the other, however, the Group anticipates an uptick in demand in the business areas Display, Architecture, and Transportation. Moreover, the gratifying performance of Core Materials should continue owing to ongoing firm demand from wind energy customers.

The complete financial statements for the first half of 2020 can be found on our website www.schweiter.com

A media conference on the 2020 half-year results for analysts, media representatives, and investors will take place at the Marriott Hotel, Neumühlequai 42, Zurich, today at 11.00 a.m.

For further information please contact:
Martin Klöti, CFO
Tel. +41 41 757 77 00, Fax +41 41 757 70 01, martin.kloeti@schweiter.com

Please find the Media release in the PDF attached: 

Media release (PDF)