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Annual Report 2021
Annual Report 2021

Focused Datwyler achieves profitable growth

Datwyler experienced high demand in 2021 thanks to strong positions in attractive markets and leading core competencies. In comparison with the previous year, our sales markets and production were significantly less impacted by the negative effects of the pandemic. The safety concepts and rules of conduct at the sites were optimized continuously and proved to be effective, enabling us to protect our employees’ health and guarantee delivery capacities for our customers at all times.

All key figures
1'101.7million
Net revenue
16.9%
EBIT margin (adjusted)
234.2million
Operating result (EBIT)
738.0million
Average capital employed
23.8%
ROCE
110.9million
Capital expenditures
6'805
Full-time equivalents
All key figures

Review

Profit increase and
higher dividend

The figures reported for the year 2021 are influenced by the sale of the online distributor Reichelt at the end of September. Datwyler’s reported revenue rose to CHF 1'101.7 million (previous year: CHF 1'069.2 million). Reichelt’s revenue contribution for the first nine months of the year was CHF 154.1 million.

4.20CHF
Increased cash dividend

per bearer share

The profit figures reported also include contributions from Reichelt for the last time. At the level of the operating result (EBIT), this contribution was CHF 15.4 million from the operating business and CHF 58.4 million profit from the sale of the subsidiary. Datwyler thus achieved a total EBIT of CHF 234.2 million and a net result of CHF 194.0 million for 2021.

In view of the strong and sustainably profitable growth, the Board of Directors will ask the Annual General Meeting to pay a substantially increased cash dividend of CHF 4.20 per bearer share (previous year: CHF 3.20) and CHF 0.84 per registered share (previous year: CHF 0.64). This equates to an increase of 31.3% in the total dividend to CHF 71.4 million (previous year: CHF 54.4 million).

Record revenue from continuing operations

15.0%
Revenue growth

currency-adjusted

Datwyler was able to significantly increase revenue from continuing operations in all business units. Our record revenue figure of CHF 947.6 million (previous year: CHF 823.3 million) constitutes currency-adjusted growth of 15.0% (the currency effect was negligible). We surpassed average growth rates in all the markets we serve and are 8.0% above the pre-pandemic levels from 2019. Having been hit particularly hard by the pandemic in 2020, the Mobility and General Industry business units also performed encouragingly. The Mobility business unit, for example, acquired more new projects than it ever has in the past. In the Food & Beverage business unit, Datwyler grew successfully together with its coffee customers. In total, the Industrial Solutions business area (Mobility, General Industry and Food & Beverage) generated currency-adjusted revenue growth of more than 13%. The Healthcare Solutions business area posted currency-adjusted revenue growth of 16.0%. Here, Datwyler supports the leading pharmaceutical companies with the provision of COVID-19 vaccines. We are proud to make an important contribution to the global fight against the pandemic with our system-critical components.

Annual Report 2021
Datwyler supplies the leading manufacturers of COVID-19 vaccines.

Sustainable increase
in profitability

Thanks to strong growth, continual efficiency improvements and strict cost management, the EBIT for continuing operations increased over-proportionally by 23.2% to CHF 160.4 million (previous year: CHF 130.2 million). As a result, the EBIT margin improved significantly to 16.9% (previous year: 15.8%). The net result for continuing operations rose by 17.6% to CHF 123.7 million (previous year: CHF 105.2 million). In comparison with 2019, both EBIT and the EBIT margin for continuing operations are well above pre-pandemic levels.

16.9%
EBIT margin

continuing operations

Aerial view Yantai Xinhui Packing
Acquisition of Yantai Xinhui Packing in China.

Transformation complete – focus on organic growth and targeted acquisitions

With the sale of online distributor Reichelt in autumn 2021, Datwyler’s strategic transformation into a specialist in system-critical elastomer components is now complete. In the forthcoming phase, we will focus on organic growth and targeted acquisitions so as to bolster existing business sustainably. Our strong balance sheet, our highly distinctive core competencies and the associated competitive advantages provide an ideal basis from which to accelerate the implementation of our growth strategy and overcome the challenges of the pandemic. We will also continue to make acquisitions in order to open up new geographical markets, technologies or related product segments.

The companies we acquire must be suited to Datwyler in terms of strategy, core competencies and culture. A current example of a targeted acquisition is the takeover of Yantai Xinhui Packing in China that was announced in December 2021. With this transaction, Datwyler has gained direct access to the fast-growing healthcare market in China and filled an important strategic gap. Yantai Xinhui Packing’s modern production facility with reserve capacity offers an optimal platform for manufacturing our product range for the Chinese healthcare market locally.

Strategic topics

Two-thirds of revenue in low cyclical, structurally growing markets

Datwyler generates around two-thirds of its revenue in low cyclical, structurally growing markets like healthcare and food & beverages. The healthcare market in particular has long-term structural growth drivers that are independent of economic trends and the COVID pandemic. The aging society in the industrial countries, the rapidly growing middle class in the emerging countries, the increasing rates of chronic diseases like diabetes and the use of injections as the preferred method for administering medicines are keeping growth rates high.

Systemkritische Komponenten für die Abgasnachbehandlung
System-critical components
for exhaust gas aftertreatment.

System-critical elastomer components with low cost share and high barriers to entry

Datwyler’s elastomer components perform critical functions in our customers’ systems. In vehicle brakes or pre-filled syringes, for example, they make a vital contribution to the safety of car drivers and patients all around the world. Despite their importance for the quality of the end products, Datwyler’s components are set apart by the fact that they account for a low share of the overall costs of customer systems.

Furthermore, the barriers to entry are high due to the long learning curve and the strict regulatory requirements. New trends and technologies mean that the demand for increasingly powerful and complex products is rising. In many cases, our system-critical components are one of the things that make technological progress possible in the first place. We have summarized this potential in our mission statement:

We materialize ideas for a safer,
smarter and more sustainable world.

Annual Report 2021
Further development of the materials and technology portfolio.

Core competency-based market development and innovation

By bundling our technological core competencies in the Technology & Innovation Group function, we enhance our capacity for innovation and increase the share of our new primary products in total revenue. In the healthcare business, among our promising innovation projects are the coated NeoFlex components for pre-filled syringes and the soft dry electrodes for measuring brain, heart and muscle activity in wearable devices.

Besides medical technology, applications in the fields of lifestyle, sport and computer games are also evolving. In the Mobility business, Datwyler is continuing to develop its material and technology portfolio. The electroactive polymer (EAP) technology and the electrically and thermally conductive ETEMI materials will open up new applications in the vehicle of the future. We are therefore confident that, thanks to our leading core competencies, we will be able to utilize the transformation to electromobility to increase our component number and revenue per vehicle.

Further improvement in agility and digital competencies

In addition to the core competencies, the innovation pipeline and the expansion of production capacities, it is our proven strategic priorities that enable us to proactively seize market opportunities and accelerate organic growth. We have been facilitating profitable growth, increasing our agility, accelerating digitalization and promoting sustainability for a number of years now. In parallel to the actual digitalization process, we have significantly increased network and cyber security in recent years. With our modern management culture, we are continuously implementing our vision of being a self-learning organization.

Enhanced
sustainability strategy

by2030
Climate neutrality

Scope 1 and 2

One of the things we launched in the year under review was our enhanced sustainability strategy. We introduced 12 focus topics in order to reduce our environmental footprint and deliver more value for all stakeholders. The focus topics are structured according to Environmental, Social and Governance dimensions and are intended to close gaps and build on existing strengths. Each topic bundles activities relating to current and future projects, and contains clear responsibilities with measurable objectives and quantifiable key figures for effective management. Datwyler has been a member of the UN Global Compact since 2009 and aims to attain climate neutrality (scope 1 and 2) at all its sites by 2030.

Annual Report 2021
Support
for the local communities
in India.

Outlook

Confirmation of the
medium-term target ranges

Annual Report 2021
Investments in the expansion
of production capacities.

On the basis of its high order backlog and increased use of new production capacities and the positive change in the Healthcare product mix, we are confident that we will be able to reach the target ranges we set for ourself, namely to increase revenue by between 6% and 10% and to achieve an EBIT margin of 18% to 21%, in the medium term. However, the rising costs of raw materials, upstream products, energy and logistics services will present an increasing challenge in 2022. Despite this, Datwyler is aiming to achieve the lower value in its target range for the EBIT margin in 2022. Revenue growth should also in 2022 exceed the upper value in the target range.

6–10%
Revenue growth

Midterm target

18–21%
EBIT margin

Midterm target

Changes to the
Board of Directors

For personal reasons, Hanno Ulmer will not be available for re-election at the 2022 ordinary Annual General Meeting. We would like to thank him for his valuable work over the last seven years. Judith van Walsum will be nominated for election as a new Director and a representative of the public shareholders. Judith van Walsum is Chief Financial Officer and Head of IT at Roche Diabetes Care, a globally active division of the Roche Group.

Despite pandemic-related constraints both at work and in private, they continued to achieve excellence day in, day out. Thanks to their exemplary work, we were able to supply our customers with important products at all times, and that is something we as a company and our employees can be very proud of. We also thank our customers for their trust and flexibility. Both are necessary to overcome the challenges of a pandemic. Finally, we would like to take this opportunity to thank you, our shareholders, for your loyalty to Datwyler.

A very special thank you goes once again to our employees.

On behalf of the Board of Directors and the Executive Management

Annual Report 2021
Portrait image of Paul Haelg

Dr. Paul Hälg

Chairman

Annual Report 2021
Portrait image of Dirk Lambrecht

Dirk Lambrecht

CEO

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Published, edited and designed by:

Dätwyler Holding Inc.
Gotthardstrasse 31, 6460 Altdorf, Switzerland
T +41 41 875 11 00, F +41 41 875 12 28
info@datwyler.com, www.datwyler.com

Disclaimer

The Half-Year Report contains forward-looking statements. These statements reflect the Group's current assessment of market conditions, economic developments and future events. However, these forward-looking statements are subject to economic, regulatory and political risks, uncertainties, assumptions and other factors over which Datwyler has no control. Unforeseen events could therefore cause actual developments and report to differ materially from those anticipated and from the information published in this report. To that extent, all forward-looking statements contained in this report are qualified in their entirety and Datwyler cannot guarantee that they will prove to be correct. Datwyler is under no obligation, and assumes no liability, to update any such forward-looking statements. This document is neither an offer nor a solicitation to buy or sell Datwyler securities.

This Half-Year Report is available in English and German. The German version is binding.

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