Excluding currency effects SFS Group achieved organic sales growth of 6.1% in the first half of the year, mainly driven by the ramp up of new projects and products at its Engineered Components segment.
The strong appreciation of the Swiss Franc against the euro, however, “left a deep mark on SFS Group sales and profits in the first half of 2015”. The negative impact of exchange rate movements on the translation of Group sales into CHF added up to a CHF 35.8 million reduction or -5.5% of local sales.
Fastening Systems, including SFS intec and GESIPA® brands, reported sales of CHF 157.9 million, down 5.8% in Swiss Francs but slightly up in euros, the main currency for transactions. Exchange impacted Fastening Systems EBITA, which fell 35.9% to CHF 9 million. Factoring out exchange effect the reported margin of 5.4% would have been 8.1%.
The construction division saw operating performance “steadfastly improved” with a sharpening of the focus of production strategy and simplification of operating structures. SFS announced that finishing and assembly operations, previously carried out in Switzerland, will transfer to the Czech Republic to improve response times and competitive cost position.
The riveting division achieved above average growth in North America and Asia, supported by the ramp up of automotive projects and new customers.
Engineered Components, which develops and manufactures customised precision components, fastening assemblies and solutions, reported first half 2015 sales of CHF 358 million, up 13.5% on the same period in 2014. EBITA was CHF 55.6 million at a margin of 15.4%. SFS’ automotive and industrial divisions supply European customers primarily from three factories located in Switzerland with prices quoted almost entirely in euros, so exchange rates had a negative impact.
The distribution and logistics segment, which supplies fastening technology, tools and architectural hardware alongside innovative logistics solutions, recorded CHF 154.5 million sales, down 4.7%. EBITA was down 45% to CHF 7.8 million. SFS unimarket, operating solely in Switzerland, reacted to the CHF appreciation by adjusting prices but customers changed their ordering activity and drew down inventories. Like for like H1 sales fell 5.5% – currency induced markdowns reduced sales by a further 4.2%. The acquisition of Thomas Minder Holding AG added 5% to sales growth of the segment.
SFS Group expects a substantial recovery of operating profit margins during the second half 2015. Assuming no further adverse exchange rate changes and similar macro-economic conditions, full year Group sales are expected to be in-line with 2014 with an EBITA margin decline of 100 to 200 basis points.
Will joined Fastener + Fixing Magazine in 2007 and over the last 15 years has experienced every facet of the fastener sector - interviewing key figures within the industry and visiting leading companies and exhibitions around the globe.
Will manages the content strategy across all platforms and is the guardian for the high editorial standards that the Magazine is renowned.
Don't have an account? Sign Up
Signing up to Fastener + Fixing Magazine enables you to manage your account details.
