OC Oerlikon (OERL) Q3 2024 earnings summary

Executive summary

• Advanced pure play transformation, focusing on Surface Solutions and Polymer Processing Solutions, with man-made fibers being separated as a standalone business and headquarters functions streamlined.

• Achieved robust profitability in Q3 2024, maintaining stable operational EBITDA margins in both divisions despite challenging end markets and softening demand.

• Surface Solutions is positioned for midterm growth, leveraging technology leadership, diversified markets, and efficiency gains.

• Polymer Processing Solutions is preparing for the separation of its Manmade Fibers business, targeting attractive returns and cyclical recovery.

Financial highlights

• Group sales declined 5% year-over-year at constant FX to CHF 580 million in Q3 2024, mainly due to lower filament orders.

• Group order intake decreased 4% year-over-year at constant FX, totaling CHF 538 million.

• Operational EBITDA margin was 16.9% in Q3 2024, stable year-over-year; Surface Solutions margin improved to 18.0%, Polymer Processing Solutions at 13.1%.

• Q3 2024 Group EBITDA was CHF 92 million (Q3 2023: CHF 95 million); EBIT was CHF 44 million (Q3 2023: CHF 41 million).

Outlook and guidance

• 2024 sales guidance updated to a high single-digit to low teens percentage decrease year-over-year, reflecting softening PMIs.

• Operational EBITDA margin guidance set at approximately 16%, at the high end of previous guidance.

• Long-term growth drivers for both divisions remain intact, with focus on innovation and cost control.