Industry News

SFS Group reports good sales growth and expanded market positions during the first half of 2018. Group sales increased 9.9% to CHF 855.9 million, and operating profit rose 4.6% compared to the adjusted previous year.

Organic growth came in at 7.1%; currency translation and changes in scope of consolidation had a 2.8% positive effect on reported sales growth. SFS noted that “high advance outlays, structural adaptions and increased raw material costs still pressured the operating profit.”

Healthy growth was maintained in SFS Engineered Components segment, with first half sales at CHF 473.2 million, a 10.5% increase year on year with organic growth at 7.6%. Earnings were pressured by high levels of advance outlays in preparation for future growth projects and increased raw material costs. The majority of the Group’s CHF 69.5 million capital expenditure, 44% higher than same period last year, was committed to this segment, which displays the highest return on capital employed. SFS expects margins to recover in the second half 2018, as costs are passed through to customers, which has taken longer than expected to achieve, and new products are launched.

Sales for the Fastening Systems segment were CHF 213.0 million, 12% higher than first half 2017. SFS says Fastening Systems continued to strengthen its market position, “amid a robust market environment, thanks to its offering of compelling products and services”. The segment reported EBIT of CHF 20.7 million, up 12.2% on first half 2017.

SFS notes significant progress for the Construction Division in flat roof solutions, hinge technology and fastening solutions for exterior cladding – the latter strengthened by the 2016 acquisition of Ncase Ltd. For the Riveting Division solid sales growth was broadly based, with solutions for automotive applications showing the fastest growth. “Considerable progress” was made in improving the Division’s production profiles, although SFS noted that achieving full utilisation of the expanded production site at Thal in Germany had been a challenge due not least to the tight labour market in the region.

Following its increased stake to 51%, HECO was fully incorporated to the Group from 1st July, and “the growth and synergy potential and the core competencies of each partner are now being exploited even more effectively”.

The Distribution & Logistics segment, servicing the Swiss domestic market reported sales up 5.9% to CHF 169.7 million but sharper procurement costs continued to impact profits, with increased costs taking time to pass through to the market. Profits nevertheless rose 9.2% year on year to CHF 12.4 million.