StarragTornos (STGN) H1 2024 earnings summary

Executive summary

• Order intake remained stable at CHF 255.5 million, down 2.9% year-over-year, with strong growth in Aerospace offsetting declines in Transportation, MedTech & Dental, and Luxury Goods.

• Net sales declined 13.8% year-over-year to CHF 254.9 million, mainly due to lower machine sales, economic headwinds, and a shift toward markets with longer production cycles.

• EBIT dropped to CHF 9.5 million, with margin at 3.7%, impacted by lower sales, higher costs, and one-time accounting effects.

• Order backlog increased 2.7% to CHF 350.1 million, driven by strong aerospace demand and providing sales stability.

• New plant opened in Taiwan, new products launched for medical and energy/MRO markets, and synergy program initiated post-merger.

Financial highlights

• Order intake: CHF 255.5 million (-2.9% year-over-year); net sales: CHF 254.9 million (-13.8% year-over-year); machine sales down 16.4%, service sales down to CHF 63.4 million.

• EBIT margin at 3.7% of net sales; net profit CHF 6.6 million; extraordinary net impact of +CHF 2 million in H1 2024.

• Gross margin improved to 57.7% from 54.2% year-over-year.

• Free cash flow was negative at CHF -42.4 million, mainly due to increased working capital and inventory.

• Equity ratio remains strong at 56.0%.

Outlook and guidance

• Order intake for full year 2024 expected to be comparable to 2023.

• Net sales and EBIT margin in H2 2024 anticipated to be similar to H1, with EBIT margin below 4%.

• Medium- and long-term targets unchanged: 5% annual top-line growth and 8% EBIT margin, with focus on expanding market presence.

• Cost reduction measures and synergy programs expected to offset recurring negative effects from purchase price allocation in H2.