Oerlikon reported strong order intake and sequential margin improvement in Q3; guidance confirmed
With a Q3 EBIT margin of 12.6 %, Oerlikon sequentially improved its profitability in the first nine months of 2013 and continued to deliver strong earnings in the third quarter despite a challenging business environment across the Group. Oerlikon’s Manmade Fibers and Coating Segments continued to operate on Best-in-Class levels.
Group order intake showed strong growth of 6.7 % to CHF 712 million and sales were close to the prior year’s level at CHF 697 million. The Group launched a number of innovative new products and continued to invest in regional expansion.
Oerlikon CEO Jürg Fedier said: “The strong order intake is a positive signal for our major end markets. However, we continue with our rigorous cost management until we get a more tangible affirmation of this trend. We are on track to deliver our full-year targets.” The Company confirmed its guidance for the full-year 2013.
Group order intake improved, sales as expected
Q3 Group order intake grew by 6.7 % to CHF 712 million compared to CHF 667 million in Q3 2012. The drivers of this increase were continued volume growth in the Manmade Fibers Segment (+6.3 %), project-driven orders with delivery in 2014 from energy customers in the Drive Systems Segment (+12.7 %) and growth in the R&D and analytics market in the Vacuum Segment (+9.7 %). Advanced Technologies Segment order intake was slightly up by 3 % to CHF 29 million.
As expected, Q3 Group sales reached CHF 697 million compared to CHF 735 million (-5.2 %) a year ago. Sales grew in the Advanced Technologies (+10 %, CHF 22 million) and Vacuum (+6.5 %, CHF 98 million) Segments, whilst Manmade Fibers (-6.6 %, CHF 282 million) and Drive Systems
(-11.8 %, CHF 172 million) Segments declined. The Coating Segment was stable at CHF 123 million. The decrease in Manmade Fibers resulted from normal phasing in project-driven businesses; the Drive Systems Segment was impacted by continued weakness in the infrastructure and construction sectors (heavy-duty off-highway equipment) and the energy market, particularly in the US.
Strong profitability with 12.6 % EBIT margin
Despite challenging market conditions faced across the Group, the Oerlikon Group continued to improve its profitability in the course of the year. “Our prudent management of break-even sales led to a sequentially higher EBIT margin despite lower sales”, said CEO Jürg Fedier. EBIT amounted to CHF 88 million in Q3 2013 and EBIT margin reached 12.6 % (Q2 2013: 12.4 %).
Q3 2013 performance resulted in a rolling 12-month Oerlikon Group ROCE of 17.3 % (Q3 2012: 17.3 %) compared to a ROCE of 16.5 % in H1 2013. The successful closing of the divestment of the Natural Fibers and Textile Components Business Units in July 2013 significantly increased the financial strength of the Oerlikon Group. The company reported net liquidity of CHF 963 million at the end of the third quarter.
