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Composite Materials Specialist – Schweiter continues to grow in the first half of the year News

Friday, August 18th, 2017 | Economy

The company is confident about the course of business in the year as a whole. Revenues from continuing operations with the 3A Composites Division rose by 5% to CHF 485.6 million, corresponding to an increase in local currencies of 6%. The company also contributed to the growth in sales, in particular in the display and the architectural business in Europe and the USA. Order intake increased by 1.4% to EUR 505.7 million.
Start-up costs for production impacted operating profit
On the other hand, the operating profit at EBITDA rose by 6% to CHF 52.6 million and the corresponding margin fell by 40 basis points to 10.8%. Here, however, the contribution of the SSM sold at the end of June is included. For 3A Composites alone, EBITDA fell by almost 7% to 53.9 million with a corresponding margin of 11.1%. Profitability was impacted by higher start-up costs than expected for a new production facility.
As a result, the company has not fully met the analysts' expectations. The AWP consensus on sales from the continuing business was CHF 489.3 million and for the corresponding EBITDA of 56.5 million
As already announced, the divestment of the SSM Textilmaschinen division led to a book profit of around CHF 90 million. The Reingewinn including SSM is now valued at CHF 129.5 million, compared to EUR 34.5 million in the previous year. The profit from continuing operations increased by 1% to 30.9 million
Raw material prices can only be passed on delayed
In the European display business, the market position was further expanded, according to the individual business segments. The further development of the product portfolio on transparent and non-transparent plates as well as the sales approach would have led to a disproportionately high increase in sales compared with the general economic trend. In the US display business, sales were even double-digit growth thanks to larger customer projects. However, the profitability here was comparatively lower, because of temporarily higher raw material costs and the time lag in the price adjustment.
In the architectural business, sales grew by double-digit in both Europe and America. In Asia, the architecture sector was braked by weaker demand in China and project delays in the Middle East and India.
Business with core materials continued to show strong demand on the previous year's level, both in the wind and non-wind sector. However, sales were impacted by a partial restricted availability of balsa, which is the result of unusually high rainfall in Ecuador.
Schweiter has described the business trend in the transport sector as very gratifying. Here, too, there was a double-digit growth rate, supported mainly by high demand in the rail vehicle sector. Profitability here rose disproportionately.
Positive sales expected
For the second semester of 2017, a positive sales trend and an operating result are now forecast at least at the level of the first half-year. Demand in the display and architectural business in Europe and the USA is expected to be stable. The selective adjustment of selling prices should have a positive impact on profitability in the second half of the year.
There is a certain recovery in the Asian architectural business, while solid demand is expected for core material business.
In addition, the acquisition of Athlone Extrusions in Ireland will further strengthen the Verbund business and provide a positive contribution to earnings.
(AWP)

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