Ad Hoc

Ad hoc announcement pursuant to Art. 53 LR

Phoenix Mecano holds its own in a difficult environment

The Phoenix Mecano Group's sales and profit in the first half of 2024 were down on the previous year's figures. While industrial activities were impacted by the continued weakness of the European economy, the turnaround of the largest division, DewertOkin Technology Group, continued.

Kloten/Stein am Rhein, 15 August 2024. At EUR 386.2 million, Phoenix Mecano's consolidated gross sales in the first half of 2024 were 5.6% down on the previous year's figure (EUR 409.0 million). Organic, local-currency sales fell by 1.7%. The DewertOkin Technology (DOT) Group continued to grow, while sales in the Industrial Components and Enclosure Systems divisions declined.

Net sales totalled EUR 382.1 million (previous year: EUR 404.8 million). Incoming orders fell by 3.0% to EUR 388.3 million, although in organic, local-currency terms they were up slightly, by 1.0%. The book-to-bill ratio was 100.5%, compared with 97.9% the previous year.

The operating cash flow (EBITDA) declined by 8.5% from EUR 41.2 million to EUR 37.7 million and the operating result (EBIT) by 13.2% from EUR 30.2 million to EUR 26.2 million.

The result of the period was down 11.5% at EUR 18.2 million (previous year: EUR 20.5 million).

As a result of the divestment in the second half of 2023 and despite the increased dividend and the share buyback programme, the Group's net indebtedness decreased from EUR 55.8 million at 30 June 2023 to EUR 34.9 million at 30 June 2024.

 

Division performance

The DewertOkin Technology Group (DOT Group) division saw its gross sales rise by 7.2% to EUR 175.4 million. In organic, local-currency terms, the increase was 11.2%. The operating result climbed from EUR 3.8 million to EUR 9.9 million and the operating margin from 2.3% to 5.7%.

Raw material prices have largely normalised and customers' warehouses have slowly but surely begun to empty. In the main US market, business development was stable and the division was able to tap new business potential with functional fittings for existing customers. In Asia, market and sales development exceeded expectations, with the largest segment, motor-adjustable seating, performing most dynamically. The bedding products segment saw the launch of a smart control system with anti-snoring function. This application constantly monitors sleep data and automatically adjusts the sleeping position if necessary. In addition, furniture fittings production, which had previously been spread across two locations, was relocated to the new industrial park in Jiaxing ahead of schedule and consolidated there.

In Europe, business performance remained below expectations, with no signs yet of a significant recovery in demand.

Gross sales in the Industrial Components division fell by 21.8% to EUR 94.5 million, partly due to the divestment of the Rugged Computing business area. In organic, local-currency terms, they were down by 15.0%. The operating result declined from EUR 8.8 million to EUR 4.3 million while the operating margin shrank from 7.3% to 4.6%.

In the strategic systems and solutions business, the Automation Modules business area landed some major projects, meaning that orders on hand are now rising again.

In the Measuring Technology business area, continued high demand in the HVDC transmission and smart distribution grids segment offset the economic downturn in transformers and chokes. Operations of a smaller transformer and choke business were taken over as part of a bolt-on acquisition following an insolvency. A positive contribution to earnings is expected from 2025 once the integration is complete.

Industrial component orders were brought forward again, despite customer warehouses remaining well-stocked.

Sales in the Enclosure Systems division fell by 10.5% from EUR 124.6 million to EUR 111.5 million. In organic, local-currency terms, they were also down by 10.5%. The operating result declined from EUR 19.9 million to EUR 15.8 million and the operating margin from 16.0% to 14.2%. There are initial signs of a slight improvement in incoming orders in European countries as well as in India and the Middle East. However, in the important German market, especially the key automotive and mechanical engineering sectors, buyers remain cautious. Thanks to the focus on system integration, the explosion-proof enclosures business performed well and there were some sizeable orders for up-and-coming green hydrogen applications.


Outlook

With industrial activity still weak, the Phoenix Mecano Group is operating in a challenging environment. This has further accentuated the opposing trends between industrial activities on the one hand and the DOT Group on the other. Phoenix Mecano's largest division, the DOT Group continued to recover and was able to partially offset the decline in the Industrial Components and Enclosure Systems divisions. Variable production capacities were adjusted in order to cut costs.

Many uncertainties remain in the coming months. In key core markets, the prospects of a near-term recovery are subdued, with international purchasing managers' indices and the ifo Business Climate Index having fallen again recently. Nevertheless, the strategic focus on structurally growing sectors of application is paying off. In Phoenix Mecano growth markets such as these, there are initial signs of a bottoming-out. Project enquiries from larger customers are resuming and such customers are placing orders at shorter notice, resulting in an improvement in incoming orders and book-to-bill ratios. 

Phoenix Mecano's management still anticipates an economic upturn as the year progresses, although the recovery may come too late to fully offset the economic headwinds during much of 2024. In view of this, the Phoenix Mecano Group's Board of Directors and management expect an operating result unchanged from, or up to 20% lower than, the previous year.

A detailed semi-annual report will be available as a PDF download on our website from 15 August 2024.

 

 

About Phoenix Mecano
The Phoenix Mecano Group is a global player in the enclosures and industrial components segments and is a leader in many markets. Headquartered in Stein am Rhein, Switzerland, the Group employs around 7,000 people worldwide and generated sales of EUR 783.1 million in 2023. It is geared towards the manufacture of niche products and system solutions for customers in the mechanical engineering, measurement and control technology, medical technology, aerospace technology, alternative energy, and home and hospital care sectors. Phoenix Mecano was founded in 1975 and has been listed on the Swiss stock exchange since 1988.

 

 

For more information, please contact:
Phoenix Mecano Management AG
Dr Rochus Kobler, CEO
Lindenstrasse 23, CH-8302 Kloten
Tel.: +41 (0)43 255 4 255
info@phoenix-mecano.com
www.phoenix-mecano.com

 

 

Results H1 2024 in figures (in EUR million)

	1-6 2023		1-6 2024	in % vs. PY
Incoming orders	400.4		388.3	-3.0
Gross sales	409.0		386.2	-5.6
per division:
DewertOkin Technology Group	163.6		175.4	7.2
Industrial Components	120.8		94.5	-21.8
Enclosure Systems	124.6		111.5	-10.5
Other	0.0		4.8
Net sales	404.8		382.1	-5.6
Operating cash flow	41.2		37.7	-8.5
Margin	10.1%		9.8%
Operating result	30.2		26.2	-13.2
Margin	7.4%		6.8%
per division:
DewertOkin Technology Group	3.8		9.9	159.5
	2.3%		5.7%
Industrial Components	8.8		4.3	-50.9
	7.3%		4.6%
Enclosure Systems	19.9		15.8	-20.4
	16.0%		14.2%
Other	-2.3		-3.8	-66.9
Result of the period	20.5		18.2	-11.5
Margin	5.0%		4.7%