Schweizer Electronic Posts Business Performance in Q3 2022

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Despite a challenging market environment, new orders rose by +18.7 percent in the first three quarters of 2022 compared to the volume of the same period the previous year and amounted to EUR 152.7 million (9M 2021: EUR 128.6 million). Although the dynamic increase in new orders lost some momentum in the third quarter, an increase of +23.7 percent was still able to be recorded compared to the same period in 2021.

At the end of the third quarter of 2022, the order book amounted to EUR 249.1 million (31 December 2021: EUR 191.8 million), reaching another record high compared to the last four years.

With sales of EUR 99.8 million (9M 2021: EUR 90.3 million) in the first three quarters, a sales increase of +10.5 percent was achieved compared to the same period in the previous year. Sales to automotive customers amounted to EUR 69.0 million (9M 2021: EUR 65.1 million), which corresponds to an increase of +6.1 percent compared to the same period of the previous year. Sales to industrial customers and other customers increased by +22.0 percent to EUR 30.8 million (9M 2021: EUR 25.2 million) compared to the same period of the previous year.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were unchanged at EUR -6.9 million (9M 2021: EUR -6.9 million). The EBITDA ratio was -6.9 percent  (9M 2021: -7.6 percent). A positive Group EBITDA of EUR +0.2 million was achieved in the third quarter. In the Group excluding China, EBITDA amounted to EUR +4.7 million in the first three quarters of the year (9M 2021: EUR +6.0 million).

Forecast / outlook

For the 2022 financial year, the Executive Board continues to expect sales growth of +5 to +15 percent (just under EUR 130 to 140 million) for the year as a whole.

The noticeable slowdown in the economy due to energy prices and the ongoing war in Ukraine and the still prevailing shortage of components, especially for the automotive industry, are slowing down further sales growth. This is reflected in strongly fluctuating customer call-offs. Despite these adverse factors, the Executive Board confirmed its forecast, but the risks are growing. The sales growth achieved in the first three quarters and the order book for the fourth quarter underpin the forecast.

Furthermore, the forecast for the EBITDA ratio of -4 to -8 percent is maintained.

Due to the restructuring measures implemented at the China site in the first quarter of 2022, earnings are expected to improve in the second half of the year. While the EBITDA ratio was still -11 percent in the first half of the year, it improved to +0.6 percent in the third quarter. As a result, the expected effects of improvement in earnings have materialised. In contrast to the positive restructuring effects, the Executive Board expects a burden in the fourth quarter due to rising material costs, which can only be partially covered by efficiency increases and passed on by price increases.

The Group’s equity ratio was 1.4 percent at the end of September. The equity ratio of the parent company, Schweizer Electronic AG, remained above 30 percent. Further development will largely depend on the after-tax result in the fourth quarter and the successful implementation of a capital increase in the Chinese unit by external investors. If the latter is successful, the Group equity ratio can reach the target value of 6 to 11 percent.

Depending on how the entry of external investors in Schweizer Electronic in China is structured, there may not only be changes in equity, but also in sales and earnings forecasts. Due to ongoing negotiations, effects on the forecast key figures cannot be ruled out.