SCHWEIZER Confirms Turnover Growth of 3.7% for 2018

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The SCHWEIZER Group closed the accounts in 2018 with a turnover growth of 3.7% to 125.3 million euro (2017: 120.9 million euro). The final group EBITDA (earnings before interest, taxes, depreciation and amortisation) amounted to 9.2 million euro (2017: 8.4 million euro), corresponding to an EBITDA margin of 7.3% against 7.0% the year before. The group EBIT (earnings before interest and taxes) amounted to 1.6 million euro (2017: 0.3 million euro) and corresponds to an EBIT margin of 1.3% (2017: 0.3%). In the light of the comprehensive investments into the new high technology plant in China, SCHWEIZER’s Supervisory and Executive Boards will suggest a dividend omission on occasion of the forthcoming Annual General Meeting on June 28, 2019, in order to put the funds thus released into our growth investment in China.

Gross profit amounted to 18.6 million euro (2017: 19.0 million euro), the gross margin thus decreased to 14.8%. This decrease is mainly due to the fast rising share of the merchandise bought from our partners, which increased by 117% to 24.5 million euro while our in-house production decreased by 8% to 100.8 million euro. A weaker utilisation of own capacities burdened the profitability of SCHWEIZER’s inhouse-production in the fourth quarter. The order book amounted to 171.2 million euro (2017: 181.5 million euro) at the end of fiscal year 2018, of which 108 million euro are destined for delivery in 2019.

SCHWEIZER’s turnover with customers from the automotive sector grew by 4.9% to a peak value of 87.9 million euro in 2018, mainly driven by a high dynamic in the first half year, before the economic sentiment in the automotive industry significantly dimmed from late summer 2018 onwards. This development was mainly triggered by factors such as the introduction of the new  WLTP emission test method in September 2018 as well as a sharp drop-off in sales of diesel vehicles due to the realisation of diesel traffic bans in several inner cities and the sudden slump of sales on the worldwide biggest automotive market China. Business with customers from the industry sector developed pleasingly. Typical applications of this customer group are detection, sensor technology and plant control systems. Turnover in this segment amounted to 30.5 million euro, which is equivalent to an increase of 8.2%compared to 2017. The industry customer group thus represents 24.3% of SCHWEIZER’s group turnover.

The export ratio increased from 40.2% to 44.3% in the last fiscal year with Germany remaining by far the most important sales region. Despite a slight decline, the turnover in Germany amounted to 69.8 million euro (2017: 72.3 million euro), representing 55.7% of the group turnover. The decline in Germany was more than compensated by a sales increase of 7.2 million euro to 35.6 million euro in Europe, so that the turnover share from Europe including Germany rose to 84.1%. With a turnover of 9.4 million euro in Asia and 10.1 million euro in America, both regions remained almost stable.

Also last year, the trend towards technologically sophisticated printed circuit boards from the areas of power electronics and system cost reduction continued. Revenues from this technology segment increased by 19%while volumes of the standard segment were down by just under 18%

The significant increase of the production volumes with SCHWEIZER’s partners WUS in China and Meiko in Vietnam by in total 117% is due to the start of important projects in the field of high frequency printed circuit boards (PCBs) with WUS and standard PCBs with Meiko. Turnover generated with these partners now amounts to 20 percent of the total turnover of the SCHWEIZER group.

The company’s equity capital increased slightly to 63.0 million euro (December 31, 2017: 62.3 million euro) as of the balance sheet date. This corresponds to an equity ratio of 46.6% (December 31,, 2017: 54.9%). Net gearing was -7.2% compared to -6.5% in 2017.

Outlook for 2019 

In view of the significant overall economic, sector-specific and political uncertainties, our turnover expectation for the current business year ranges between -5% and +5% compared to 2018. This corresponds to a turnover range of about 120 to 130 million euro. While expecting sales increases at our strategic partners WUS in China and Meiko in Vietnam, triggered by product starts for our automotive customers, we anticipate a weaker development for products from Schramberg, which can affect all customer groups. Since start of production in Jintan is planned for the beginning of 2020, no turnover contributions are expected from this site for 2019. The anticipated start-up losses due to the construction and putting into operation of the new Jintan plant will burden the result in 2019. Therefore, we expect an EBITDA margin of between 4% and 6% in 2019, which is equivalent to an EBITDA of between 5 and 7 million euro. Without the negative contribution from the ramp up of the pant in China, the anticipated EBITDA margin lies between 7% and 9%.