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Half-Year Report 2024
Half-Year Report 2024

Margin improvement in a weak market environment

Datwyler was once again confronted with predominantly weak sales markets and the ongoing reduction in security stocks by healthcare customers in the first half of 2024. In addition, there was a lack of CHF 7.5 million in revenue from components for COVID vaccines compared to the prior year period. Overall, revenue decreased to CHF 572.5 million (previous year: CHF 602.7 million). Adjusted for negative currency effects, this translates to a decline of 2.4%.

All key figures
572.5million
Net revenue
11.8%
EBIT margin
67.5million
Operating result (EBIT)
886.5million
Average capital employed
14.4%
ROCE
19.7million
Capital expenditures
8'094
Full-time equivalents
All key figures

Strengthened profitability

Despite persistent weak demand and the resulting ongoing underutilization at several production sites, we succeeded in increasing the operating result (EBIT) by 11.6% to CHF 67.5 million (previous year: CHF 60.5 million). As a result, the EBIT margin improved by 180 basis points to 11.8% (previous year: 10.0%). Due to the higher EBIT, the net result also increased to CHF 38.6 million (previous year: CHF 32.1 million). The slightly higher tax expenses were almost compensated by the slightly lower financial expenses. The net result per share increased to CHF 2.27 (previous year: CHF 1.89). The strong Swiss franc also had a negative impact on the profit figures.

11.8%
EBIT margin

Successful in acquiring new business

We are using the current market phase to further optimize our structures and processes. The optimization of our cost structures, the price adjustments implemented and lower energy costs form the basis for an improved profit margin. In the first half of 2024, we were once again able to acquire promising projects with existing and new customers in all business units. Encouraged by this, we are driving forward our activities in the healthcare area and the transformation to e-mobility with high priority. Furthermore, we are investing consistently in our innovation and growth projects. Examples of these include film-coated healthcare products, magnetically active or electroactive polymers and soft dry electrodes for wearable applications. An industrial-scale pilot production line for electroactive polymers will go into operation in the second half of 2024.

Highest sustainability standard and SBTi commitment

We are continuously developing our sustainability measures. The globally recognized rating agency EcoVadis awarded us the platinum standard for our sustainability performance for the first time in the reporting period. The highest standard available, this places Datwyler in the top 1% of more than 130,000 companies from 180 countries that are rated by EcoVadis each year. Moreover, Datwyler also undertook with effect from the end of June 2024 to have its commitment to reducing its environmental footprint validated in accordance with the Science Based Targets initiative (SBTi). The SBTi commitment and the EcoVadis rating are highly important to customers, especially in the healthcare industry.

Newspaper icon More about EcoVadis Platinum Award
Half-Year Report 2024

Healthcare Solutions still affected by weak market environment and destocking

In the first half of 2024, the Healthcare Solutions business area once again felt the impact of a weak market environment and destocking by customers. As a result, revenue decreased to CHF 230.7 million (previous year: CHF 253.8 million). Adjusted for currency effects, this equates to a decline of 6.4%. The first half of 2023 still included some CHF 7.5 million in revenue from components for COVID vaccines. In comparison with the first half of 2019, currency-adjusted revenue is currently around 35% above pre-pandemic levels.  This corresponds to a CAGR of 6.5%.

Despite lower revenues and the current under-utilization of production capacities, we succeeded in keeping the EBIT margin stable at 15.4% (previous year: 15.7%). This can be explained by the price adjustments implemented, a slightly improved product mix and consistent cost management. In absolute terms, the operating result (EBIT) decreased to CHF 35.6 million (previous year: CHF 39.8 million). We are gradually expanding our market position by further developing our product portfolio and collaborating with the world’s leading glass manufacturers and system integrators.

15.4%
EBIT margin

Healthcare Solutions

Half-Year Report 2024
CPHI China booth

Industrial Solutions with significant margin improvement

9.3%
EBIT margin

Industrial Solutions

The slight decline in sales revenues in the Industrial Solutions business area to CHF 343.4 million (previous year: CHF 351.8 million) is primarily attributable to negative currency effects. The Mobility and Food & Beverage business units slightly outperformed their markets. Due to the slowdown in the expansion of the e-mobility market and a weak market environment in the US oil and gas industry, the Connectors and General Industry business units fell short of their sales and revenue targets. By consistently passing on cost increases, improving productivity and with sustainable lower energy costs, the business area was able to increase its operating profit (EBIT) by 54.1% to CHF 31.9 million (previous year: CHF 20.7 million). The EBIT margin increased accordingly by 340 basis points to 9.3% (previous year: 5.9%).

The Mobility business unit was able to acquire attractive new business in the e-mobility segment for applications involving air suspensions, brake systems and powertrains and further strengthen its pipeline for vehicle battery components. In the Connectors business unit, operational improvements at our production sites enabled us to largely compensate for the negative effect of lower sales revenues. The General Industry business unit further optimized its production concept and reorganized its various product lines within the existing sites. This will improve profitability as soon as demand rises again. The Food & Beverage business unit grew significantly faster than the market average thanks to the strong positioning of its customers. The new EU regulation on packaging materials underlines the importance of aluminum as an ideal material for coffee capsules.

Half-Year Report 2024
Mobility production, Schattdorf Switzerland

Changes to the Executive Management

The previously communicated changes to the Executive Management were completed in the reporting period. Volker Cwielong took over as CEO of Datwyler with effect from 1 April 2024. Volker Cwielong had been a member of the management team of the international Eberspächer Group since 2017, most recently as Co-CEO of the largest division, Purem by Eberspächer. He is a mechanical engineer and holds an MBA.

The previously communicated changes to the Executive Management were completed in the reporting period. Volker Cwielong took over as CEO of Datwyler with effect from 1 April 2024. Volker Cwielong had been a member of the management team of the international Eberspächer Group since 2017, most recently as Co-CEO of the largest division, Purem by Eberspächer. He is a mechanical engineer and holds an MBA. Judith van Walsum took over the role as CFO of Datwyler with effect from 1 June. Between 2004 and 2024, Judith van Walsum held various global management positions at Roche Group, most recently as CFO and Head of IT at Roche Diabetes Care since 2018. She holds a PhD from the London School of Economics.

Newspaper icon More about the Datwyler CEO change
Newspaper icon More about the changes in the Executive Management

Outlook

Reliable short-term forecasts remain difficult in most of our markets. We are expecting the weak demand and the destocking by healthcare customers to continue in the second half of the year. Probable exceptions to this are the Mobility and Food & Beverage business units, which are expected to maintain their positive business performance in the second half of 2024. For the Group, this means that performance in the second half of the year is likely to be broadly in line with the first half. For 2024 as a whole, Datwyler expects an EBIT margin above the prior year and revenue in the range of the prior year.

In the medium term, we are confident of the growth potential in our markets. As soon as the markets normalize and the quantities purchased begin to rise again, we will start to benefit from economies of scale thanks to the advanced investments we have brought forward. We are using the current market phase to further improve both our commercial and operational excellence and the standards within our company. Among other things, this will free up resources, which we can use to accelerate the commercialization of our innovation projects and further strengthen our innovation capabilities. The large number of new orders from existing and new customers shows that the long-term growth drivers in our markets are intact and that we are a preferred development partner for system-critical elastomer components.

Half-Year Report 2024

Thank you

We would like to sincerely thank our employees for their dedication and great commitment to Datwyler. Their competencies are what enable us to develop innovative new products and projects and achieve continuous improvements and efficiency increases.

We would also like to thank our existing and new customers for the trust they place in us with their orders. Finally, our thanks go to our shareholders for their loyalty to our company.

On behalf of the Board of Directors and the Executive Management

Portrait image of Paul Haelg

Dr. Paul Hälg

Chairman

Portrait image of Volker Cwielong

Volker Cwielong

CEO

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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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