Healthcare Solutions enjoys strong order volumes.
The Covid-19 pandemic has left the Healthcare Solutions business area with additional costs, but demand is up too. Organic revenue growth of 5.7% was offset by negative currency effects. In Swiss francs, the strong performance of the same period last year was almost replicated, based on revenue of CHF 201.1 million (previous year: CHF 202.1 million). Although all Datwyler Healthcare plants have been classed as essential production facilities in their respective countries, the measures imposed by the authorities to contain the Covid-19 virus had reduced production capacity at the same time. Productivity has been steadily increasing since the end of April, however, and revenue growth is accelerating all the time. The product mix is also changing to good effect, with a significant increase in the percentage devoted to coated components with higher margins. The operating result (EBIT) amounted to CHF 35.5 million (previous year: CHF 42.4 million), which corresponds to an EBIT margin of 17.7% (previous year: 21.0%). Various additional costs to manage the impact of Covid-19, as well as higher depreciation and start-up costs for the new Healthcare plant in the USA, meant that margins were squeezed in the first half of the year. Adjusted for the start-up costs of CHF 8.1 million, the adjusted EBIT margin was 21.7%. Customer validation of the new US Healthcare plant has been accelerated by the additional need for production capacity for Covid-19 medicines and vaccines.
Industrial Solutions faced with sharp decline in automotive demand.
The Industrial Solutions business area was badly hit by the negative economic impact of the Covid-19 pandemic in the Mobility, Oil & Gas and General Industry business units. For example, many Mobility customers had pretty much closed their plants worldwide for several weeks. The number of facilities actively involved in oil extraction declined by over 60% in the USA due to the low price of oil during the first half of the year. Only the Food & Beverage business unit was able to buck the negative trend and accelerate growth compared with the previous year. Overall, the business area’s revenue declined to CHF 212.0 million (previous year: CHF 280.5 million). This corresponds to an organic decline of 18.4%. Datwyler was quickly able to adjust certain cost structures to reflect the new situation, at the sites concerned, by introducing short-time working, making people take holidays and overtime, dismissing temporary staff and making savings in respect of other operating costs. The adjusted operating result (EBIT) amounted to CHF 21.2 million (previous year: CHF 41.3 million). This equates to an adjusted EBIT margin of 10.0% (previous year: 14.7%).
Online distributor Reichelt enjoying strong growth.
During the first half of the year, the online distributor Reichelt profited from the growing popularity of online shopping. There was particularly strong demand for electronic devices and accessories for use in a home office or home schooling setting. The strong growth in the business-to-consumer segment more than compensated for the decline in the business-to-business segment. Thanks to its attractive value for money proposition, Reichelt achieved organic growth of 10.8% in a contracting market and increased revenue to CHF 89.6 million (previous year: CHF 85.8 million). The low cost base helped to increase the operating result (EBIT) by 15.6% to CHF 7.4 million (previous year: CHF 6.4 million). The EBIT margin improved to 8.3% (previous year: 7.5%).