Schweizer Electronic Reports 8.1% Sales Growth Amidst Market Challenges

Estimated reading time: 2 minutes

SCHWEIZER Group publishes its results for the first half of 2024 and shows sales growth of 8.1 percent to EUR 74.3 million (previous year: EUR 68.7 million), despite a difficult market environment.

Order backlog

At the end of the second quarter of 2024, the SCHWEIZER-Group had an order backlog of EUR 213.0 million (31 December 2023: EUR 251.3 million). Of this amount, EUR 82.6 million is due for delivery in the following two quarters of 2024. Incoming orders were affected by project-specific postponements and cancellations. Incoming orders for sales of products from our strategic partners developed positively, whereas the order intake for own production declined. The order backlog for 2025 and subsequent years amounts to EUR 130.4 million.

Sales development

In the first half of 2024, sales increased by 8.1 percent to EUR 74.3 million (previous year: EUR 68.7 million). Sales from own production amounted to EUR 44.7 million, which corresponds to a decrease of 1.3 percent. In contrast, sales of products via the Asian partner network rose by 26.2 percent to EUR 29.6 million. This was due to the start of series production of embedding technology for automotive customers and the success of the fab-light partnerships.

Market segments and regions

Sales to automotive customers totalled EUR 59.4 million, an increase of 28.9 percent compared to the previous year. The share of sales from industrial and other customers totalled EUR 14.9 million, well below the previous year's level of EUR 22.7 million. Germany, the main market, recorded a drop in sales of 7.7 percent to EUR 30.9 million. By contrast, the other European markets increased by 50.4 percent to EUR 23.5 million. While adjusted sales in Asia rose by 14 percent, exports to America fell by 8.5 percent.

EBITDA (earnings before interest, taxes, depreciation and amortisation) for the first half of 2024 amounted to EUR 0.1 million (previous year: EUR 5.7 million), which corresponds to an EBITDA ratio of 0.1 percent. Profitability was negatively impacted by a falling capacity utilization at the Schramberg site, cost increases and shifts in the product mix.

Financial position and equity

The equity ratio fell to 18.7 percent (31.12.2023: 24.3 percent). Despite increased costs and loss transfers from the equity-accounted investment (in China), equity was stabilized thanks to strict balance sheet management. Non-current and current financial liabilities decreased to EUR 23.0 million.

Forecast / Outlook

The global economy will only grow moderately in 2024, with demand for electric vehicles in particular weaker than expected. Despite these challenges, SCHWEIZER's growth trend remains intact, supported by the series ramp-up of embedding technology and market share gains with key customers. Sales of between EUR 140 and 150 million are expected for the full year 2024, although the Executive Board currently expects to close the year at the lower end of the forecast range.

As capacity utilization at the Schramberg production plant is not expected to improve in the second half of the year and the measures introduced are not sufficient to achieve the original EBITDA expectation, we expect EBITDA of EUR 2 to 5 million (previously EUR 10 to 11 million) for the full year 2024.

The equity ratio is expected to be in the range of 20 to 25 percent at the end of the year.

In a challenging market environment, SCHWEIZER-Group believes it is well positioned for long-term success thanks to strategic initiatives such as high-voltage embedding and the fab-light strategy. Strict cost and cash management will be a high priority in the coming months.