SFS Group (SFSN) H2 2023 earnings summary

Executive summary

• Third-party sales CHF 3,090.8m, up 12.6% YoY; organic growth 2.1% and Hoffmann scope effects +14.6% were partly offset by FX impact of -4.1%.

• EBIT rose to CHF 358.6m from CHF 330.3m, while EBIT margin eased to 11.7% from 12.1%; EPS was CHF 6.84 vs. CHF 6.95, affected by tax effects.

• Results met targets despite a difficult economic environment; Hoffmann integration progressed, and customer-focus organizational changes were initiated.

Financial highlights

• FY2023 net sales were CHF 3,073.0m vs. CHF 2,738.7m; EBITDA was CHF 486.0m, 15.8% of sales, vs. CHF 448.1m, 16.4%.

• Net income was CHF 268.5m, 8.7% of sales, vs. CHF 270.6m, 9.9%; reported EBIT margin declined 40 bps YoY to 11.7%.

• CAPEX increased to CHF 174.0m from CHF 171.0m; operating free cash flow rose to CHF 139.4m from CHF 116.9m.

Outlook and guidance

• FY2024 sales development guidance is +3–6% in local currencies, including scope effects; EBIT margin is expected around the prior-year level of 11.7%.

• Guidance reflects a challenging geopolitical and economic environment and low visibility; mid-term EBIT margin guidance remains 12–15%.

• FY2024 tax rate is expected to decrease toward the prior-year level.