Q2 2023 Financial Results
3 August 2023
Page 1
Overview Q2
8% organic sales growth in Surface Solutions despite challenging environment; Filament market with limited activity for Polymer Processing Solutions
Orders
- Order intake -8.3% YoY at constant FX, including +5.7% from M&A 1)
- Driven by filament customers delaying investment decisions; Surface Solutions book-to-bill slightly above 1
FX with significant headwind:
Vs CHF | Since Jan 2023 2) | Since Jan 2020 2) |
EUR | -2% | -10% |
USD | -7% | -11% |
CNY | -11% | -15% |
-15.0% | ||||||||
FX adj.: -8.3% | ||||||||
773 | ||||||||
657 | ||||||||
Q2'22 | Q2'23 |
Sales
- Sales +3.6% at constant FX, including +5.9% from M&A 1)
- Surface Solutions with +7.8 organic constant FX sales growth despite contracting PMIs
- Polymer Processing Solutions impacted by postponements and Turkey earthquake
-4.4% | ||||||||
FX adj.: +3.6% | ||||||||
734 | ||||||||
702 | ||||||||
Profit
Q2'22 | Q2'23 | |||||
Operational EBITDA | ||||||
▪ Operational EBITDA impacted by FX, negative mix and higher input costs | -13.8% | |||||
▪ Continued focus on pass-on of wage inflation and energy costs | 128 | 111 | ||||
- Previously announced cost actions to positively impact H2'23
17.5% | Margin | 15.8% |
Q2'22 | Q2'23 |
1) Riri consolidated as of March 1, 2023; 2) Compares FX as per 18 Jul 2023 with 1 January 2023/20; * Numbers in financial charts of this presentation are in CHF m except when stated otherwise; discontinued inline ePD is excluded in 2022 operational figures
Page 2
End markets impacted by increasingly challenging macro conditions
Polymer Processing Solutions | Surface Solutions | |
Filament | Non-Filament | |
31% of 2022 Group sales | 19% | |
Customers delay | Flow Control | |
investments | supports | |
▪ | Difficult market environment | ▪ Flow Control benefiting from |
leading to customers | lightweight trend in cars and | |
postponing orders (started | market share gains in non- | |
in H2'22), impacting | automotive | |
2023/24 sales | ▪ Offset by some customers | |
▪ | Underlying need for | delaying investments in |
filament equipment intact; | nonwoven applications | |
equipment market CAGR | ||
01-22 of +4% | ||
General Ind. & Tooling
25%
Softening industrial activity
- Euro Area and US manufacturing PMIs remained in contraction and lost momentum throughout Q2
-
China PMI around neutral
(~50) in Q2 … slow post- COVID recovery
Automotive
13%
Mixed picture
- Receiving mixed signals from market with limited de-stocking at some customers in Q2
- Mid single-digit light vehicles production forecast for 2023 2) YoY driven by NA and Europe
- Successfully pioneering e- mobility applications, e.g. e-gearing and thermal insulation solutions
Luxury
7% 1)
Growth
- Solid Luxury market, e.g. +7%/14% Swiss watch exports in Apr/May
- Oerlikon experienced limited destocking in Mar / Apr; solid demand since May
- Expect high single-digit growth rates in mid-term
Aviation
6%
Continued recovery
- Recovery driven by MRO with increased flying hours
- New plane production supported by passenger growth and energy efficiency
- +46% / +39% passenger growth in Apr/May YoY 3)
Filament order recovery expected in 2024 | PMIs remained in contraction and lost momentum throughout Q2; | |
aviation and luxury strong | ||
1) For comparability reasons, includes annualized sales of Riri which was acquired on 28 Feb 2023; in 2022 reporting Luxury was counted as part of General Industry end market; 2) Source LMC: 6% growth for 2023 as per July 2023; 3) Source IATA
Page 3
Surface Solutions with sales growth in Q2, pricing and cost actions to support margins in H2
Markets | Orders | Sales | Operational EBITDA | |||
- Cautious customer purchasing behavior continued in Q2 due to macro environment
- Continued softening industrial activity across China, US and Europe
- Support from robust luxury and recovery in aviation
Q2'23 sales split by markets
Energy | Tooling | Americas | APAC | |||||||||||
Luxury 2) | ||||||||||||||
21% | 22% | |||||||||||||
14% | 28% | |||||||||||||
5% | ||||||||||||||
General | 24% | 22% | ||||||||||||
Industry | 14% | Auto- | 50% | |||||||||||
Aviation | motive | Europe | ||||||||||||
- Increased +21.9% FX adjusted; including +12.7% from Riri acquisition and +9.2% organic
- Orders sequentially up with book-to-bill ratio slightly above 1
- Order growth despite contracting manufacturing PMIs
Order intake
+13.3%
FX adj.: +21.9%
395 | |
348 | |
Q2'22 | Q2'23 |
- Increased +20.1% FX adjusted; including +12.3% from Riri acquisition and +7.8% organic
- Supported by aviation, general industry (incl. larger equipment and materials sales), luxury and energy; despite contracting PMI's
- +9.9% growth in H1 (FX adjusted organic)
Sales
(3rd party)
+11.6%
FX adj.: +20.1%
392 | |
352 | |
Q2'22 | Q2'23 |
- Impacted by FX, negative sales mix and higher input costs (labor, energy (as hedging needs continual renewals)); furthermore, delay in Chinese industrial production recovery impacting margin
- Pricing (Jan, Jun) and cost actions, announced at Q4 results, started to phase in and will further unfold in H2, supporting margin
Operational EBITDA 1)
+0.8% | |
63 | 63 |
17.8% | 16.1% |
Margin | |
Q2'22 | Q2'23 |
- Margin based on unrounded figures and total sales, including intercompany sales; discontinued inline ePD is excluded in 2022 operational EBITDA; 2) Luxury includes sales of Riri (consolidated as of 1 March 2023) and Coeurdor; Luxury was counted as part of General Industry end market in 2022 and is separately reported as of 2023
Page 4
Polymer Processing Solutions impacted by order postponements; non-filament and execution on cost measures on-track
Markets | Orders | Sales | Operational EBITDA | |||
- Filament market impacted by customers postponing orders; no sign of recovery yet
- Non-Filament with lower demand for carpet yarns and nonwoven as some customers are preserving cash; industrial yarn, staple fibers and Flow Control with solid demand
- Impacted by order postponements in Filament
- YoY comparison also influenced by strong order intake in Q2'22
- Supported by continued deliveries from last year's strong order intake, partly offset by impacts from earthquake in Turkey, which led to postponements from Q2 into H2'23
- Stable Non-Filament sales in H1 YoY
- Margin impacted by FX, sales mix, operating leverage and limited pass- through of higher input costs (e.g. labor, energy) to maintain volume
- Previously announced cost-out measures will start to phase during H2
Q2'23 sales split by markets | Order intake |
-38.1% | ||||||
FX adj.: -33.0% | ||||||
Flow Control | Americas | 425 | ||||
Europe | 9% | |||||
16% | ||||||
Nonwoven & | ||||||
16% | 263 | |||||
Plant | 12% | |||||
Engineering | ||||||
56% | ||||||
Industrial & | 17% | 76% | ||||
Interiors | Filament | APAC | Q2'22 | Q2'23 | ||
Sales
(3rd party)
-19.0%
FX adj.: -11.6%
383 | |
310 | |
Q2'22 | Q2'23 |
Operational EBITDA 1)
-32.6% | ||
65 | ||
44 | ||
17.1% | 14.2% | |
Margin | ||
Q2'22 | Q2'23 |
1) Margin based on unrounded figures and total sales, including intercompany sales
Page 5
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OC Oerlikon Corporation AG Pfäffikon published this content on 03 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2023 07:49:03 UTC.