Schweiter Technologies (SWTQ) H2 2023 earnings summary

Executive summary

• Financial turnaround: 2023 EBITDA rose 5% and EBIT 18% despite lower sales; operating cash flow increased 62%.

• Sales weakness reflected subdued consumer and investment sentiment, while operational measures, efficiency and pricing supported profit recovery.

Financial highlights

• Net sales were CHF 1,069.6m, down 11% reported and 7% FX-adjusted; EBITDA was CHF 89.7m, up 5% reported and 10% FX-adjusted.

• EBIT reached CHF 50.3m, up 18% reported and 24% FX-adjusted; net income was CHF 27.6m versus CHF 29.1m in 2022.

• Net income was affected by CHF 5m higher currency exchange differences and a CHF 4m one-time JMB acquisition impact.

• Operating cash flow increased 62% to CHF 78m; free operating cash flow reached CHF 51m, supported by net working capital and CAPEX discipline.

Outlook and guidance

• 2024 sales and demand conditions are expected to remain subdued in Europe; first-half weakness is anticipated in Core Materials and Transport & Industry, with recovery expected in Core Materials in H2.

• America is expected to remain attractive in Display, especially Architecture; Asia Architecture is expected to grow, supported by the recently started JV.

• Strategic adaptation costs of up to CHF 20m are assumed for 2024; realized efficiency initiatives are expected to deliver ~CHF 10m annual run-rate savings.

• The profitability ambition is sustainable EBITDA above 10%, through efficiency, footprint optimization, cost control, innovation and portfolio management.